10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 2022

Commission file number   0-7818

INDEPENDENT BANK CORPORATION

(Exact name of registrant as specified in its charter)

Michigan	38-2032782
(State or jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

4200 East Beltline, Grand Rapids, Michigan  49525

(Address of principal executive offices)

(616) 527-5820

(Registrant's telephone number, including area code)

NONE

Former name, address and fiscal year, if changed since last report.

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

Title of each Class	Trading Symbol	Name of each exchange which registered
Common stock, no par value	IBCP	The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all documents and reports required to be filed by Sections 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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

YES  ☒  NO ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, smaller reporting company or an emerging growth company.

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.  Yes  ☐  No  ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ☐  NO  ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: common stock, no par value, 21,055,754 as of August 4, 2022.

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

INDEX

		Number(s)
PART I -	Financial Information
Item 1.	Condensed Consolidated Statements of Financial Condition June 30, 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Operations Three- and Six-month periods ended June 30, 2022 and 2021	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) Three- and Six-month periods ended June 30, 2022 and 2021	5
	Condensed Consolidated Statements of Cash Flows Six-month periods ended June 30, 2022 and 2021	6
	Condensed Consolidated Statements of Shareholders' Equity Three- and Six-month periods ended June 30, 2022 and 2021	7
	Notes to Interim Condensed Consolidated Financial Statements	8-63
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	64-87
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	88
Item 4.	Controls and Procedures	88
PART II -	Other Information
Item 1A	Risk Factors	89
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	89
Item 6.	Exhibits	90

1

FORWARD-LOOKING STATEMENTS

Statements in this report that are not statements of historical fact, including statements that include terms such as ‘‘will,’’ ‘‘may,’’ ‘‘should,’’ ‘‘believe,’’ ‘‘expect,’’ ‘‘forecast,’’ ‘‘anticipate,’’ ‘‘estimate,’’ ‘‘project,’’ ‘‘intend,’’ ‘‘likely,’’ ‘‘optimistic’’ and ‘‘plan’’ and statements about future or projected financial and operating results, plans, projections, objectives, expectations, and intentions, are forward-looking statements. Forward-looking statements include, but are not limited to, descriptions of plans and objectives for future operations, products or services; projections of our future revenue, earnings or other measures of economic performance; forecasts of credit losses and other asset quality trends; statements about our business and growth strategies; and expectations about economic and market conditions and trends. These forward-looking statements express our current expectations, forecasts of future events, or long-term goals. They are based on assumptions, estimates, and forecasts that, although believed to be reasonable, may turn out to be incorrect. Actual results could differ materially from those discussed in the forward-looking statements for a variety of reasons, including:

• economic, market, operational, liquidity, credit, and interest rate risks associated with our business including the impact of the ongoing COVID-19 pandemic on each of these items;

• economic conditions generally and in the financial services industry, particularly economic conditions within Michigan and the regional and local real estate markets in which our bank operates including the economic impact of the ongoing COVID-19 pandemic in each of these areas;

• the failure of assumptions underlying the establishment of, and provisions made to, our allowance for credit losses;

• increased competition in the financial services industry, either nationally or regionally;

• our ability to achieve loan and deposit growth;

• volatility and direction of market interest rates;

• the continued services of our management team; and

• implementation of new legislation, which may have significant effects on us and the financial services industry.

This list provides examples of factors that could affect the results described by forward-looking statements contained in this report, but the list is not intended to be all-inclusive.  The risk factors disclosed in Part I – Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021, as updated by any new or modified risk factors disclosed in Part II – Item 1A of any subsequently filed Quarterly Report on Form 10-Q, include the known risks our management believes could materially affect the results described by forward-looking statements in this report. However, those risks may not be the only risks we face. Our results of operations, cash flows, financial position, and prospects could also be materially and adversely affected by additional factors that are not presently known to us that we currently consider to be immaterial, or that develop after the date of this report. We cannot assure you that our future results will meet expectations. While we believe the forward-looking statements in this report are reasonable, you should not place undue reliance on any forward-looking statement. In addition, these statements speak only as of the date made. We do not undertake, and expressly disclaim, any obligation to update or alter any statements, whether as a result of new information, future events, or otherwise, except as required by applicable law.

2

Part I - Item 1. INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Financial Condition

	June 30, 2022			December 31, 2021
	(Unaudited)
	(In thousands, except share amounts)
Assets
Cash and due from banks	$	56,516		$	51,069
Interest bearing deposits		2,970			58,404
Cash and Cash Equivalents		59,486			109,473
Securities available for sale		859,704			1,412,830
Securities held to maturity (fair value of $359,701 at June 30, 2022 and zero at December 31, 2021)		381,608			-
Federal Home Loan Bank and Federal Reserve Bank stock, at cost		17,653			18,427
Loans held for sale, carried at fair value		31,400			55,470
Loans held for sale, carried at lower of cost or fair value		-			34,811
Loans
Commercial		1,329,198			1,203,581
Mortgage		1,284,169			1,139,659
Installment		645,483			561,805
Total Loans		3,258,850			2,905,045
Allowance for credit losses		(47,883	)		(47,252	)
Net Loans		3,210,967			2,857,793
Other real estate and repossessed assets, net		508			245
Property and equipment, net		36,148			36,404
Bank-owned life insurance		55,088			55,279
Capitalized mortgage loan servicing rights, carried at fair value		39,477			26,232
Other intangibles		2,871			3,336
Goodwill		28,300			28,300
Accrued income and other assets		102,999			66,140
Total Assets	$	4,826,209		$	4,704,740
Liabilities and Shareholders' Equity
Deposits
Non-interest bearing	$	1,357,824		$	1,321,601
Savings and interest-bearing checking		1,961,124			1,897,487
Reciprocal		615,204			586,626
Time		316,425			308,438
Brokered time		39,997			2,938
Total Deposits		4,290,574			4,117,090
Other borrowings		25,507			30,009
Subordinated debt		39,395			39,357
Subordinated debentures		39,626			39,592
Accrued expenses and other liabilities		99,973			80,208
Total Liabilities		4,495,075			4,306,256
Commitments and contingent liabilities
Shareholders’ Equity
Preferred stock, no par value, 200,000 shares authorized;  none issued or outstanding		-			-
Common stock, no par value, 500,000,000 shares authorized; issued and outstanding: 21,049,218 shares at June 30, 2022 and 21,171,036 shares at December 31, 2021		319,885			323,401
Retained earnings		96,252			74,582
Accumulated other comprehensive income (loss)		(85,003	)		501
Total Shareholders’ Equity		331,134			398,484
Total Liabilities and Shareholders’ Equity	$	4,826,209		$	4,704,740

See notes to interim condensed consolidated financial statements (Unaudited)

3

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021
	(Unaudited)						(Unaudited)
	(In thousands, except per share amounts)
Interest Income
Interest and fees on loans	$	31,454		$	28,091		$	59,872		$	56,196
Interest on securities
Taxable		4,950			3,656			9,502			6,452
Tax-exempt		1,746			1,544			3,300			2,928
Other investments		214			208			431			425
Total Interest Income		38,364			33,499			73,105			66,001
Interest Expense
Deposits		1,216			1,142			1,983			2,398
Other borrowings and subordinated debt and debentures		1,087			964			2,060			1,926
Total Interest Expense		2,303			2,106			4,043			4,324
Net Interest Income		36,061			31,393			69,062			61,677
Provision for credit losses		2,379			(1,425	)		806			(1,899	)
Net Interest Income After Provision for Credit Losses		33,682			32,818			68,256			63,576
Non-interest Income
Interchange income		3,422			3,453			6,504			6,502
Service charges on deposit accounts		3,096			2,318			6,053			4,234
Net gains (losses) on assets
Mortgage loans		1,253			9,091			2,088			21,919
Securities available for sale		(345	)		-			(275	)		1,416
Mortgage loan servicing, net		4,162			(1,962	)		13,803			3,205
Other		3,044			1,871			5,407			3,901
Total Non-interest Income		14,632			14,771			33,580			41,177
Non-interest Expense
Compensation and employee benefits		19,882			19,883			40,012			38,405
Data processing		2,644			2,576			4,860			4,950
Occupancy, net		2,077			2,153			4,620			4,496
Interchange expense		1,262			1,201			2,273			2,149
Furniture, fixtures and equipment		1,042			1,034			2,087			2,037
Communications		762			777			1,519			1,658
Advertising		560			164			1,240			653
Loan and collection		647			859			1,206			1,618
FDIC deposit insurance		457			307			979			637
Legal and professional		479			522			972			1,021
Costs (recoveries) related to unfunded lending commitments		649			26			294			(6	)
Conversion related expense		6			1,143			50			1,361
Other		1,967			1,891			3,772			3,578
Total Non-interest Expense		32,434			32,536			63,884			62,557
Income Before Income Tax		15,880			15,053			37,952			42,196
Income tax expense		2,879			2,665			6,984			7,771
Net Income	$	13,001		$	12,388		$	30,968		$	34,425
Net Income Per Common Share
Basic	$	0.62		$	0.57		$	1.47		$	1.58
Diluted	$	0.61		$	0.56		$	1.45		$	1.56

See notes to interim condensed consolidated financial statements (Unaudited)

4

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

	Three months ended June 30,					Six months ended June 30,
	2022			2021		2022			2021
	(Unaudited - In thousands)
Net income	$	13,001		$	12,388	$	30,968		$	34,425
Other comprehensive income (loss)
Securities available for sale
Unrealized gains (losses) arising during period		(13,916	)		5,162		(83,358	)		(619	)
Net unrealized loss at time of transfer on securities available for sale transferred to held to maturity		(26,479	)		-		(26,479	)		-
Accretion of net unrealized losses on securities transferred to held to maturity		1,328			-		1,328			-
Reclassification adjustments for (gains) losses included in earnings		345			-		275			(1,416	)
Unrealized gains (losses) recognized in other comprehensive income (loss) on securities available for sale		(38,722	)		5,162		(108,234	)		(2,035	)
Income tax expense (benefit)		(8,133	)		1,084		(22,730	)		(427	)
Unrealized gains (losses) recognized in other comprehensive income (loss) on securities available for sale, net of tax		(30,589	)		4,078		(85,504	)		(1,608	)
Other comprehensive income (loss)		(30,589	)		4,078		(85,504	)		(1,608	)
Comprehensive income (loss)	$	(17,588	)	$	16,466	$	(54,536	)	$	32,817

See notes to interim condensed consolidated financial statements (Unaudited)

5

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

	Six months ended June 30,
	2022			2021
	(Unaudited - In thousands)
Net Income	$	30,968		$	34,425
Adjustments to Reconcile Net Income to Net Cash From Operating Activities
Proceeds from sales of loans held for sale		334,838			708,526
Disbursements for loans held for sale		(309,085	)		(653,925	)
Provision for credit losses		806			(1,899	)
Deferred income tax expense (benefit)		2,680			(251	)
Net deferred loan costs		(4,868	)		(345	)
Net depreciation, amortization of intangible assets and premiums and accretion of discounts on securities and loans		5,734			6,279
Net gains on mortgage loans		(2,088	)		(21,919	)
Net (gains) losses on securities available for sale		275			(1,416	)
Share based compensation		1,054			947
Increase in accrued income and other assets		(10,110	)		(9,205	)
Increase in accrued expenses and other liabilities		10,921			5,381
Total Adjustments		30,157			32,173
Net Cash From Operating Activities		61,125			66,598
Cash Flow Used in Investing Activities
Proceeds from the sale of securities available for sale		70,523			81,178
Proceeds from maturities, prepayments and calls of securities available for sale		105,288			222,767
Proceeds from maturities, prepayments and calls of securities held to maturity		10,906			-
Purchases of securities available for sale		(137,550	)		(546,621	)
Proceeds from the redemption of Federal Home Loan Bank stock		774			-
Net increase in portfolio loans (loans originated, net of principal payments)		(347,921	)		(79,241	)
Proceeds from the sale of portfolio loans		33,755			-
Proceeds from bank-owned life insurance		433			-
Proceeds from the sale of other real estate and repossessed assets		532			854
Capital expenditures		(2,966	)		(3,081	)
Net Cash Used in Investing Activities		(266,226	)		(324,144	)
Cash Flow From Financing Activities
Net increase in total deposits		173,484			225,111
Net increase (decrease) in other borrowings		498			(7	)
Proceeds from Federal Home Loan Bank Advances		35,000			-
Payments of Federal Home Loan Bank Advances		(40,000	)		-
Dividends paid		(9,298	)		(9,166	)
Proceeds from issuance of common stock		32			49
Repurchase of common stock		(4,010	)		(7,285	)
Share based compensation withholding obligation		(592	)		(607	)
Net Cash From Financing Activities		155,114			208,095
Net Decrease in Cash and Cash Equivalents		(49,987	)		(49,451	)
Cash and Cash Equivalents at Beginning of Period		109,473			118,705
Cash and Cash Equivalents at End of Period	$	59,486		$	69,254
Cash paid during the period for
Interest	$	3,950		$	4,393
Income taxes		3,940			8,659
Transfers to other real estate and repossessed assets		599			210
Transfer of securities available for sale to held to maturity		391,618			-
Right of use assets obtained in exchange for lease obligations		264			-
Purchase of securities available for sale not yet settled		-			23,825

See notes to interim condensed consolidated financial statements (Unaudited)

6

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity

	Common Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
	(Dollars in thousands, except per share amounts)
Balances at April 1, 2022	$	321,981		$	87,882		$	(54,414	)	$	355,449
Net income, three months ended June 30, 2022		-			13,001			-			13,001
Cash dividends declared, $0.22 per share		-			(4,631	)		-			(4,631	)
Repurchase of 122,584 shares of common stock		(2,626	)		-			-			(2,626	)
Issuance of 6,532 shares of common stock		19			-			-			19
Share based compensation (issuance of zero shares of common stock)		543			-			-			543
Share based compensation withholding obligation (withholding of 1,853 shares of common stock)		(32	)		-			-			(32	)
Other comprehensive loss		-			-			(30,589	)		(30,589	)
Balances at June 30, 2022	$	319,885		$	96,252		$	(85,003	)	$	331,134
Balances at April 1, 2021	$	335,704		$	47,287		$	4,338		$	387,329
Net income, three months ended June 30, 2021		-			12,388			-			12,388
Cash dividends declared, $0.21 per share		-			(4,574	)		-			(4,574	)
Repurchase of 163,338 shares of common stock		(3,684	)		-			-			(3,684	)
Issuance of 18,400 shares of common stock		30			-			-			30
Share based compensation (issuance of 8,871 shares of common stock)		505			-			-			505
Share based compensation withholding obligation (withholding of 4,755 shares of common stock)		(98	)		-			-			(98	)
Other comprehensive income		-			-			4,078			4,078
Balances at June 30, 2021	$	332,457		$	55,101		$	8,416		$	395,974
Balances at January 1, 2022	$	323,401		$	74,582		$	501		$	398,484
Net income, six months ended June 30, 2022		-			30,968			-			30,968
Cash dividends declared, $0.44 per share		-			(9,298	)		-			(9,298	)
Repurchase of 181,586 shares of common stock		(4,010	)		-			-			(4,010	)
Issuance of 21,632 shares of common stock		32			-			-			32
Share based compensation (issuance of 64,354 shares of common stock)		1,054			-			-			1,054
Share based compensation withholding obligation (withholding of 26,218 shares of common stock)		(592	)		-			-			(592	)
Other comprehensive loss		-			-			(85,504	)		(85,504	)
Balances at June 30, 2022	$	319,885		$	96,252		$	(85,003	)	$	331,134
Balances at January 1, 2021	$	339,353		$	40,145		$	10,024		$	389,522
Adoption of ASU 2016-13		-			(10,303	)		-			(10,303	)
Balances at January 1, 2021, as adjusted		339,353			29,842			10,024			379,219
Net income, six months ended June 30, 2021		-			34,425			-			34,425
Cash dividends declared, $0.42 per share		-			(9,166	)		-			(9,166	)
Repurchase of 344,005 shares of common stock		(7,285	)		-			-			(7,285	)
Issuance of 37,450 shares of common stock		49			-			-			49
Share based compensation (issuance of 117,946 shares of common stock)		947			-			-			947
Share based compensation withholding obligation (withholding of 32,279 shares of common stock)		(607	)		-			-			(607	)
Other comprehensive income		-			-			(1,608	)		(1,608	)
Balances at June 30, 2021	$	332,457		$	55,101		$	8,416		$	395,974

See notes to interim condensed consolidated financial statements (Unaudited)

7

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Preparation of Financial Statements

The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading.  The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2021 included in our Annual Report on Form 10-K.

In our opinion, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary to present fairly our consolidated financial condition as of June 30, 2022 and December 31, 2021, and the results of operations for the three and six-month periods ended June 30, 2022 and 2021.  The results of operations for the three and six-month periods ended June 30, 2022, are not necessarily indicative of the results to be expected for the full year.  Certain reclassifications have been made in the prior period condensed consolidated financial statements to conform to the current period presentation.  Our critical accounting policies include the determination of the allowance for credit losses (“ACL”) and the valuation of capitalized mortgage loan servicing rights.  Refer to our 2021 Annual Report on Form 10-K for a disclosure of our accounting policies.

2.
New Accounting Standards

In March, 2022, the FASB issued ASU 2022-01, “Derivative and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method”. This ASU expands the current “last-of-layer” hedge method to allow multiple hedged layers of a single closed portfolio as well as to include non prepayable financial assets.  This ASU also provides additional guidance on the accounting for and disclosure of certain hedge basis adjustments and specifies how hedge basis adjustments should be considered when determining credit losses for assets included in a closed portfolio.  This ASU is required in reporting periods beginning after December. 15, 2022, with early adoption permitted. We early adopted this ASU in the second quarter of 2022 with no material impact to our Condensed Consolidated Financial Statements.

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, ‘‘Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting’’. This new ASU provides temporary optional expedients and exceptions to 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. Entities can elect not to apply certain modification accounting requirements to contracts affected by reference rate reform, if certain criteria are met. Entities that make such elections would not have to remeasure contracts at the modification date or reassess a previous accounting determination.  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.

8

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

We have formed a cross-functional project team to lead this transition from LIBOR to a planned adoption of reference rates which could include Secured Overnight Financing Rate (“SOFR”), amongst others. We utilized the timeline guidance published by the Alternative Reference Rates Committee to develop and achieve internal milestones during this transitional period.  We have discontinued the use of new LIBOR-based loans as of December 31, 2021, according to regulatory guidelines. We also discontinued the use of new LIBOR based interest rate derivatives as of December 31, 2021.  The amended guidance under Topic 848 and our ability to elect its temporary optional expedients and exceptions are effective for us through December 31, 2022.  We expect to adopt the LIBOR transition relief allowed under this standard.

In March, 2022, the FASB issued ASU 2022-02, “Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructuring and Vintage Disclosures”. This ASU eliminates the troubled debt restructuring (“TDR”) accounting model for creditors that have already adopted Topic 326, which is commonly referred to as the current expected credit loss (“CECL”) model. In lieu of the TDR accounting model, creditors now will apply the general loan modification guidance in Subtopic 310-20 to all loan modifications, including modifications made for borrowers experiencing financial difficulty. Under the general loan modification guidance, a modification is treated as a new loan only if the terms of the new loan are at least as favorable to the lender as the terms for comparable loans to other customers with similar collection risks, and modifications to the terms of the original loan are more than minor. If either condition is not met, the modification is accounted for as the continuation of the old loan with any effect of the modification treated as a prospective adjustment to the loan’s effective interest rate. In addition, this ASU requires the disclosure of gross charge-offs recorded in the current period for financing receivables by origination year. For entities that have adopted Topic 326, ASU 2022-02 takes effect in reporting periods beginning after December 15, 2022, with early adoption permitted. We are currently assessing the impact of this ASU on our Condensed Consolidated Financial Statements.

9

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

3. Securities

Securities available for sale (“AFS”) consist of the following:

	Amortized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
June 30, 2022
U.S. agency	$	14,549	$	23	$	581	$	13,991
U.S. agency residential mortgage-backed		108,141		35		7,487		100,689
U.S. agency commercial mortgage-backed		16,873		-		1,282		15,591
Private label mortgage-backed		106,549		256		6,966		99,839
Other asset backed		240,479		3		6,247		234,235
Obligations of states and political subdivisions		358,103		42		45,230		312,915
Corporate		88,644		50		7,685		81,009
Trust preferred		977		-		41		936
Foreign government		500		-		1		499
Total	$	934,815	$	409	$	75,520	$	859,704
December 31, 2021
U.S. agency	$	34,634	$	152	$	112	$	34,674
U.S. agency residential mortgage-backed		309,907		1,952		3,874		307,985
U.S. agency commercial mortgage-backed		23,066		84		224		22,926
Private label mortgage-backed		102,480		807		672		102,615
Other asset backed		215,235		1,204		269		216,170
Obligations of states and political subdivisions		568,355		9,942		2,221		576,076
Corporate		148,707		2,446		1,194		149,959
Trust preferred		1,975		-		56		1,919
Foreign government		499		7		-		506
Total	$	1,404,858	$	16,594	$	8,622	$	1,412,830

Securities held to maturity (“HTM”) consist of the following:

			Transferred
	Carrying		Unrealized				Amortized		Unrealized
	Value		Loss (1)		ACL		Cost		Gains		Losses		Fair Value
							(In thousands)
June 30, 2022
U.S. agency	$	28,432	$	1,959	$	-	$	30,391	$	-	$	3,533	$	26,858
U.S. agency residential mortgage-backed		123,483		11,556		-		135,039		1		19,271		115,769
U.S. agency commercial mortgage-backed		5,071		273		-		5,344		-		432		4,912
Private label mortgage-backed		7,211		473		2		7,686		-		796		6,890
Obligations of states and political subdivisions		168,189		9,542		30		177,761		38		20,166		157,633
Corporate		48,283		1,292		121		49,696		12		3,058		46,650
Trust preferred		939		56		5		1,000		-		11		989
Total	$	381,608	$	25,151	$	158	$	406,917	$	51	$	47,267	$	359,701

(1) Represents the remaining unrealized loss to be accreted on securities that were transferred from AFS to HTM on April 1, 2022.

10

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

On April 1, 2022, we transferred certain securities AFS with an amortized cost and unrealized loss at the date of transfer of $418.1 million and $26.5 million, respectively to HTM. The transfer was made at fair value, with the unrealized loss becoming part of the purchase discount which will be accreted over the remaining life of the securities. The other comprehensive loss component is separated from the remaining available for sale securities and is accreted over the remaining life of the securities transferred. We have the ability and intent to hold these securities until they mature, at which time we expect to receive full value for these securities.

Gross unrealized losses and fair values for securities available for sale aggregated by investment type and length of time that individual securities have been at a continuous unrealized loss position follows:

	Less Than Twelve Months				Twelve Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
June 30, 2022
U.S. agency	$	11,436	$	580	$	864	$	1	$	12,300	$	581
U.S. agency residential mortgage-backed		78,099		6,344		18,542		1,143		96,641		7,487
U.S. agency commercial mortgage-backed		15,156		1,234		435		48		15,591		1,282
Private label mortgage-backed		97,269		6,863		1,950		103		99,219		6,966
Other asset backed		231,837		6,213		1,432		34		233,269		6,247
Obligations of states and political subdivisions		277,070		39,550		28,336		5,680		305,406		45,230
Corporate		74,016		7,368		1,711		317		75,727		7,685
Trust preferred		-		-		936		41		936		41
Foreign government		499		1		-		-		499		1
Total	$	785,382	$	68,153	$	54,206	$	7,367	$	839,588	$	75,520
December 31, 2021
U.S. agency	$	11,986	$	109	$	1,286	$	3	$	13,272	$	112
U.S. agency residential mortgage-backed		171,398		3,555		19,024		319		190,422		3,874
U.S. agency commercial mortgage-backed		19,900		224		-		-		19,900		224
Private label mortgage-backed		64,408		640		2,180		32		66,588		672
Other asset backed		86,581		248		978		21		87,559		269
Obligations of states and political subdivisions		178,484		2,151		7,093		70		185,577		2,221
Corporate		75,166		1,150		1,050		44		76,216		1,194
Trust preferred		-		-		1,919		56		1,919		56
Total	$	607,923	$	8,077	$	33,530	$	545	$	641,453	$	8,622

11

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Securities AFS in unrealized loss positions are evaluated quarterly for impairment related to credit losses. For securities AFS in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For securities AFS that do not meet this criteria, we evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, adverse conditions specifically related to the security and the issuer and the impact of changes in market interest rates on the market value of the security, among other factors.  If this assessment indicates that a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an ACL is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income (loss), net of applicable taxes. No ACL for securities AFS was needed at June 30, 2022.  Accrued interest receivable on securities AFS totaled $4.5 million and $6.0 million at June 30, 2022 and December 31, 2021, respectively, and is excluded from the estimate of credit losses and is included in accrued income and other assets in the Condensed Consolidated Statements of Financial Condition.

U.S. agency, U.S. agency residential mortgage-backed and U.S. agency commercial mortgage-backed securities — at June 30, 2022, we had 27 U.S. agency, 162 U.S. agency residential mortgage-backed and 16 U.S. agency commercial mortgage-backed securities whose fair value is less than amortized cost. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major credit rating agencies, and have a long history of no credit losses.  The unrealized losses are largely attributed to widening spreads to Treasury bonds and/or an increase in interest rates since acquisition.

Private label mortgage backed, other asset backed, corporate and foreign securities — at June 30, 2022, we had 96 private label mortgage backed, 145 other asset backed,  81 corporate and one foreign securities whose fair value is less than amortized cost. The unrealized losses are primarily due to credit spread widening and/or an increase in interest rates since acquisition.

Obligations of states and political subdivisions — at June 30, 2022, we had 339 municipal securities whose fair value is less than amortized cost. The unrealized losses are primarily due to an increase in interest rates since acquisition.

Trust preferred securities — at June 30, 2022, we had one trust preferred security whose fair value is less than amortized cost. This trust preferred security is a single issue security issued by a trust subsidiary of a bank holding company. The pricing of trust preferred securities has suffered from credit spread widening. This security is rated by a major rating agency as investment grade.

12

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

At June 30, 2022 management does not intend to liquidate any of the securities discussed above and it is more likely than not that we will not be required to sell these securities prior to recovery of these unrealized losses.

We recorded no credit related charges in our Condensed Consolidated Statements of Operations related to securities AFS during the three and six month periods ended June 30, 2022 and 2021, respectively.

The ACL on securities HTM is a contra asset valuation account that is deducted from the carrying amount of securities HTM to present the net amount expected to be collected. Securities HTM are charged off against the ACL when deemed uncollectible. Adjustments to the ACL are reported in our Condensed Consolidated Statements of Operations in provision for credit loss. We measure expected credit losses on securities HTM on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Accrued interest receivable on securities HTM totaled $1.7 million at June 30, 2022, and is excluded from the estimate of credit losses and is included in accrued income and other assets in the Condensed Consolidated Statements of Financial Condition. With regard to U.S. Government-sponsored agency and mortgage-backed securities (residential and commercial), all these securities are issued by a U.S. government-sponsored entity and have an implicit or explicit government guarantee; therefore, no allowance for credit losses has been recorded for these securities. With regard to obligations of states and political subdivisions, private label-mortgage-backed, corporate and trust preferred securities HTM, we consider (1) issuer bond ratings, (2) historical loss rates for given bond ratings, (3) the financial condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities. Historical loss rates associated with securities having similar grades as those in our portfolio have been insignificant. Furthermore, as of June 30, 2022, there were no past due principal and interest payments associated with these securities. An allowance for credit losses of $158,000 was recorded on non U.S. agency securities HTM based on applying the long-term historical credit loss rate, as published by Moody’s, for similarly rated securities.

On a quarterly basis, we monitor the credit quality of securities HTM through the use of credit ratings. The carrying value of securities HTM at June 30, 2022, aggregated by credit quality follow:

	Private Label Mortgage- Backed		Obligations of States and Political Subdivisions		Corporate		Trust Preferred		Carrying Value Total
	(In thousands)
Credit rating:
AAA	$	7,211	$	34,598	$	-	$	-	$	41,809
AA		-		109,674		-		-		109,674
A		-		5,197		6,884		-		12,081
BBB		-		1,174		38,515		-		39,689
Non-rated		-		17,546		2,884		939		21,369
Total	$	7,211	$	168,189	$	48,283	$	939	$	224,622

13

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

An analysis of the allowance for credit losses by security HTM type follows:

	Private Label Mortgage- Backed		Obligations of States and Political Subdivisions		Corporate		Trust Preferred		Total
	(In thousands)
Three months ended June 30, 2022
Balance at beginning of period	$	-	$	-	$	-	$	-	$	-
Additions (deductions)										-
Provision for credit losses		2		30		121		5		158
Recoveries credited to the allowance		-		-		-		-		-
Securities HTM charged against the allowance		-		-		-		-		-
Balance at end of period	$	2	$	30	$	121	$	5	$	158
Six months ended June 30, 2022
Balance at beginning of period	$	-	$	-	$	-	$	-	$	-
Additions (deductions)										-
Provision for credit losses		2		30		121		5		158
Recoveries credited to the allowance		-		-		-		-		-
Securities HTM charged against the allowance		-		-		-		-		-
Balance at end of period	$	2	$	30	$	121	$	5	$	158

The amortized cost and fair value of securities AFS and securities HTM at June 30, 2022, by contractual maturity, follow:

	Securities AFS				Securities HTM
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Maturing within one year	$	10,083	$	10,109	$	4,247	$	4,241
Maturing after one year but within five years		100,901		94,331		41,546		39,085
Maturing after five years but within ten years		134,151		118,515		119,016		108,172
Maturing after ten years		217,638		186,395		94,039		80,632
		462,773		409,350		258,848		232,130
U.S. agency residential mortgage-backed		108,141		100,689		135,039		115,769
U.S. agency commercial mortgage-backed		16,873		15,591		5,344		4,912
Private label mortgage-backed		106,549		99,839		7,686		6,890
Other asset backed		240,479		234,235		-		-
Total	$	934,815	$	859,704	$	406,917	$	359,701

The actual maturity may differ from the contractual maturity because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

Gains and losses realized on the sale of securities AFS are determined using the specific identification method and are recognized on a trade-date basis.  A summary of proceeds from the sale of securities AFS and gains and losses for the six month periods ending June 30, follows:

			Realized
	Proceeds		Gains		Losses
	(In thousands)
2022	$	70,523	$	164	$	439
2021		81,178		1,466		50

14

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

4. Loans

We estimate the ACL based on relevant available information from both internal and external sources, including historical loss trends, current conditions and forecasts, specific analysis of individual loans, and other relevant and appropriate factors. The allowance process is designed to provide for expected future losses based on our reasonable and supportable (“R&S”) forecast as of the reporting date. Our ACL process is administered by our Risk Management group utilizing a third party software solution, with significant input and ultimate approval from our Executive Enterprise Risk Committee. Further, we have established a CECL Forecast Committee, which includes a cross discipline structure with membership from Executive Management, Risk Management, and Accounting, which approves ACL model assumptions each quarter. Our ACL is comprised of three principal elements: (i) specific analysis of individual loans identified during the review of the loan portfolio, (ii) pooled analysis of loans with similar risk characteristics based on historical experience, adjusted for current conditions, R&S forecasts, and expected prepayments, and (iii) additional allowances based on subjective factors, including local and general economic business factors and trends, portfolio concentrations and changes in the size and/or the general terms of the loan portfolio.

The first ACL element (specific allocations) includes loans that do not share similar risk characteristics and are evaluated on an individual basis. We will typically evaluate on an individual basis loans that are on nonaccrual; commercial loans that have been modified resulting in a concession, for which the borrower is experiencing financial difficulties, and which are considered TDR; and severely delinquent mortgage and installment loans. When we determine that foreclosure is probable or when repayment is expected to be provided substantially through the operation or sale of underlying collateral, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for estimated selling costs. For loans evaluated on an individual basis that are not determined to be collateral dependent, a discounted cash flow analysis is performed to determine expected credit losses.

The second ACL element (pooled analysis) includes loans with similar risk characteristics, which are broken down by segment, class, and risk metric. The Bank’s primary segments of commercial, mortgage, and installment loans are further classified by other relevant attributes, such as collateral type, lien position, occupancy status, amortization method, troubled debt restructuring (“TDR”) status and balance size. Commercial classes are additionally segmented by risk rating, and mortgage and installment loan classes by credit score tier, which are updated at least semi-annually.

We utilize a discounted cash flow (“DCF”) model to estimate expected future losses for pooled loans. Expected future cash flows are developed from payment schedules over the contractual term, adjusted for forecasted default (probability of default), loss, and prepayment assumptions. We are not required to develop forecasts over the full contractual term of the financial asset or group of financial assets. Rather, for periods beyond which the entity is able to make or obtain R&S forecasts of expected credit losses, we revert to the long term average on a straight line or immediate basis, as determined by the CECL Forecast Committee, and which may vary depending on the economic outlook and uncertainty.

15

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The DCF model for the mortgage and installment pooled loan segments includes using probability of default (“PD”) assumptions that are derived through regression analysis with forecasted US unemployment levels by credit score tier. We review a composite forecast of approximately 50 analysts as well as the Federal Open Market Committee (“FOMC”) projections in setting the unemployment forecast for the R&S period. The current ACL utilizes a one year R&S forecast followed by immediate reversion to the 30 year average unemployment rate. PD assumptions for the remaining segments are based primarily on historical rates by risk metric as defaults were not strongly correlated with any economic indicator. Loss given default (“LGD”) assumptions for the mortgage loan segment are based on a two year forecast followed by a two year straight line reversion period to the longer term average, while LGD rates for the remaining segments are the historical average for the entire period. Prepayment assumptions represent average rates per segment for a period determined by our CECL Forecast Committee and as calculated through the Bank’s Asset and Liability Management program.

Pooled reserves for the commercial loan segment are calculated using the DCF model with assumptions generally based on historical averages by class and risk rating. Effective risk rating practices allow for strong predictability of defaults and losses over the portfolio’s expected shorter duration, relative to mortgage and installment loans. Our rating system is similar to those employed by state and federal banking regulators.

The third ACL element (additional allocations based on subjective factors) is based on factors that cannot be associated with a specific credit or loan category and reflects our attempt to ensure that the overall ACL appropriately reflects a margin for the imprecision necessarily inherent in the estimates of expected credit losses. We adjust our quantitative model for certain qualitative factors to reflect the extent to which management expects current conditions and R&S forecasts to differ from the conditions that existed for the period over which historical information was evaluated. The qualitative framework reflects changes related to relevant data, such as changes in asset quality trends, portfolio growth and composition, national and local economic factors, credit policy and administration and other factors not considered in the base quantitative model. We utilize a survey completed by business unit management throughout the Bank, as well as discussion with the CECL Forecast Committee to establish reserves under the qualitative framework. The current period’s ACL further recognizes inherent risk related to the ongoing COVID-19 pandemic; specifically to commercial loans in high risk industries and mortgage and installment borrowers with occupations in those high risk industries. Identified high risk industries include: food service, hospitality, entertainment, retail, investment real estate, assisted living, and non-owner occupied office.

16

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

An analysis of the allowance for credit losses by portfolio segment for the three months ended June 30, follows:

	Commercial			Mortgage			Installment			Subjective Allocation			Total
	(In thousands)
2022
Balance at beginning of period	$	10,744		$	19,208		$	3,604		$	12,071		$	45,627
Additions (deductions)
Provision for credit losses		164			1,046			791			220			2,221
Recoveries credited to the allowance		151			97			405			-			653
Loans charged against the allowance		-			(38	)		(580	)		-			(618	)
Balance at end of period	$	11,059		$	20,313		$	4,220		$	12,291		$	47,883
2021
Balance at beginning of period	$	9,530		$	18,448		$	3,979		$	14,798		$	46,755
Additions (deductions)
Provision for credit losses		(946	)		340			(219	)		(600	)		(1,425	)
Recoveries credited to the allowance		510			169			207			-			886
Loans charged against the allowance		-			(24	)		(266	)		-			(290	)
Balance at end of period	$	9,094		$	18,933		$	3,701		$	14,198		$	45,926

An analysis of the allowance for credit losses by portfolio segment for the six months ended June 30, follows:

	Commercial			Mortgage			Installment			Subjective Allocation			Total
	(In thousands)
2022
Balance at beginning of period	$	11,519		$	19,221		$	3,749		$	12,763		$	47,252
Additions (deductions)
Provision for credit losses		(688	)		868			940			(472	)		648
Recoveries credited to the allowance		228			268			778			-			1,274
Loans charged against the allowance		-			(44	)		(1,247	)		-			(1,291	)
Balance at end of period	$	11,059		$	20,313		$	4,220		$	12,291		$	47,883
2021
Balance at beginning of period	$	7,401		$	6,998		$	1,112		$	19,918		$	35,429
Additions (deductions)
Impact of adoption of ASC 326		2,551			12,000			3,052			(6,029	)		11,574
Provision for credit losses		(1,622	)		(280	)		(306	)		309			(1,899	)
Initial allowance on loans purchased with credit deterioration		95			18			21			-			134
Recoveries credited to the allowance		669			381			384			-			1,434
Loans charged against the allowance		-			(184	)		(562	)		-			(746	)
Balance at end of period	$	9,094		$	18,933		$	3,701		$	14,198		$	45,926

17

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Loans on non-accrual status and past due more than 90 days (“Non-performing Loans”) follow:

	Non- Accrual		Non- Accrual
	with no Allowance for Credit Loss		with an Allowance for Credit Loss		Total Non- Accrual		90+ and Still Accruing		Total Non- Performing Loans
June 30, 2022					(In thousands)
Commercial
Commercial and industrial (1)	$	-	$	14	$	14	$	-	$	14
Commercial real estate		-		-		-		-		-
Mortgage
1-4 family owner occupied - jumbo		-		695		695		-		695
1-4 family owner occupied - non-jumbo (2)		617		1,086		1,703		-		1,703
1-4 family non-owner occupied		159		449		608		-		608
1-4 family - 2nd lien		-		573		573		-		573
Resort lending		118		59		177		-		177
Installment
Boat lending		-		235		235		-		235
Recreational vehicle lending		-		187		187		-		187
Other		-		307		307		-		307
Total	$	894	$	3,605	$	4,499	$	-	$	4,499
Accrued interest excluded from total	$	-	$	-	$	-	$	-	$	-
December 31, 2021
Commercial
Commercial and industrial (1)	$	-	$	15	$	15	$	-	$	15
Commercial real estate		-		-		-		-		-
Mortgage
1-4 family owner occupied - jumbo		607		-		607		-		607
1-4 family owner occupied - non-jumbo (2)		137		1,815		1,952		-		1,952
1-4 family non-owner occupied		275		592		867		-		867
1-4 family - 2nd lien		182		681		863		-		863
Resort lending		118		119		237		-		237
Installment
Boat lending		-		210		210		-		210
Recreational vehicle lending		-		177		177		-		177
Other		-		182		182		-		182
Total	$	1,319	$	3,791	$	5,110	$	-	$	5,110
Accrued interest excluded from total	$	-	$	-	$	-	$	-	$	-

(1) Non-performing commercial and industrial loans exclude $0.042 million and $0.047 million of government guaranteed loans at June 30, 2022 and December 31, 2021, respectively.

(2) Non-performing 1-4 family owner occupied – non jumbo loans exclude $1.318 million and $0.388 million of government guaranteed loans at June 30, 2022 and December 31, 2021, respectively.

18

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The following table provides collateral information by class of loan for collateral-dependent loans with a specific reserve. A loan is considered to be collateral dependent when the borrower is experiencing financial difficulty and the repayment is expected to be provided substantially through the operation or sale of collateral.

The amortized cost of collateral-dependent loans by class follows:

	Collateral Type				Allowance
	Real Estate		Other		for Credit Losses
	(In thousands)
June 30, 2022
Commercial
Commercial and industrial	$	67	$	207	$	43
Commercial real estate		72		-		16
Mortgage
1-4 family owner occupied - jumbo		-		-		-
1-4 family owner occupied - non-jumbo		1,203		-		209
1-4 family non-owner occupied		170		-		4
1-4 family - 2nd lien		97		-		35
Resort lending		156		-		14
Installment
Boat lending		-		102		36
Recreational vehicle lending		-		51		18
Other		38		118		55
Total	$	1,803	$	478	$	430
Accrued interest excluded from total	$	-	$	-
December 31, 2021
Commercial
Commercial and industrial	$	80	$	245	$	51
Commercial real estate		84		-		19
Mortgage
1-4 family owner occupied - jumbo		607		-		-
1-4 family owner occupied - non-jumbo		940		-		286
1-4 family non-owner occupied		477		-		72
1-4 family - 2nd lien		370		-		67
Resort lending		237		-		42
Installment
Boat lending		-		80		29
Recreational vehicle lending		-		121		44
Other		-		70		25
Total	$	2,795	$	516	$	635
Accrued interest excluded from total	$	-	$	1

19

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

An aging analysis of loans by class follows:

	Loans Past Due								Loans not		Total
	30-59 days		60-89 days		90+ days		Total		Past Due		Loans
	(In thousands)
June 30, 2022
Commercial
Commercial and industrial	$	43	$	-	$	56	$	99	$	687,923	$	688,022
Commercial real estate		-		-		-		-		641,176		641,176
Mortgage
1-4 family owner occupied - jumbo		556		-		-		556		657,142		657,698
1-4 family owner occupied - non-jumbo		1,432		1,039		595		3,066		303,043		306,109
1-4 family non-owner occupied		317		-		159		476		180,787		181,263
1-4 family - 2nd lien		141		28		97		266		94,985		95,251
Resort lending		-		-		156		156		43,692		43,848
Installment
Boat lending		233		20		55		308		258,077		258,385
Recreational vehicle lending		328		18		50		396		279,678		280,074
Other		298		115		120		533		106,491		107,024
Total	$	3,348	$	1,220	$	1,288	$	5,856	$	3,252,994	$	3,258,850
Accrued interest excluded from total	$	29	$	13	$	-	$	42	$	7,653	$	7,695
December 31, 2021
Commercial
Commercial and industrial	$	-	$	2	$	62	$	64	$	593,048	$	593,112
Commercial real estate		-		-		-		-		610,469		610,469
Mortgage
1-4 family owner occupied - jumbo		-		-		607		607		540,416		541,023
1-4 family owner occupied - non-jumbo		774		408		657		1,839		264,571		266,410
1-4 family non-owner occupied		87		26		462		575		194,277		194,852
1-4 family - 2nd lien		422		60		289		771		87,958		88,729
Resort lending		-		-		237		237		48,408		48,645
Installment
Boat lending		438		28		52		518		227,622		228,140
Recreational vehicle lending		377		65		120		562		234,183		234,745
Other		252		57		49		358		98,562		98,920
Total recorded investment	$	2,350	$	646	$	2,535	$	5,531	$	2,899,514	$	2,905,045
Accrued interest excluded from total	$	25	$	9	$	-	$	34	$	6,802	$	6,836

20

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

We have allocated $2.7 million and $3.6 million of reserves to customers whose loan terms have been modified as TDRs at June 30, 2022 and December 31, 2021, respectively.

TDRs follow:

	June 30, 2022
	Commercial		Retail (1)			Total
	(In thousands)
Performing TDRs	$	3,266	$	28,580		$	31,846
Non-performing TDRs(2)		-		1,164	(3)		1,164
Total	$	3,266	$	29,744		$	33,010

	December 31, 2021
	Commercial		Retail (1)			Total
	(In thousands)
Performing TDRs	$	4,481	$	31,589		$	36,070
Non-performing TDRs(2)		-		1,016	(3)		1,016
Total	$	4,481	$	32,605		$	37,086

(1) Retail loans include mortgage and installment loan portfolio segments.

(2) Included in non-performing loans table above.

(3) Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis.

During the six months ended June 30, 2022, the terms of one loan was modified as a TDR. The modification of the terms of this loan included a reduction of the stated interest rate of the loan and a 34 month extension of the maturity date. The pre- and post-modification outstanding loan balances were both $0.3 million at June 30, 2022. This TDR increased the ACL by $0.03 million and resulted in zero charge-offs during the six months ended June 30, 2022. There were no TDR modifications during the six months ended June 30, 2021.

There were no TDRs that subsequently defaulted within twelve months following the modification during the three and six months periods ended June 30, 2022 and 2021.

A loan is considered to be in payment default generally once it is 90 days contractually past due under the modified terms.

In order to determine whether a borrower is experiencing financial difficulty, we perform an evaluation of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under our internal underwriting policy.

21

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Non-TDR Loan Modifications and Paycheck Protection Program (“PPP”) due to COVID-19 - Section 4013 of the 2020 CARES Act provided temporary relief from the accounting and reporting requirements for TDRs regarding certain loan modifications for our customers.  Section 4013 specified that COVID-19 related modifications on loans that were current (less than 30 days past due) as of December 31, 2019 were not TDRs.  While the provisions of Section 4013 were in place, we assisted both commercial and retail (mortgage and installment) borrowers with accommodations that included reduced or suspended payments. While these loans were in accommodation plans (prior to the expiration of Section 4013) they were not being reported as past due in keeping with the guidance in Section 4013.  Since the expiration of Section 4013 on January 1, 2022, we moved certain accommodation loans to non-accrual which totaled $0.4 million at June 30, 2022.  Total remaining accommodation loans were $1.2 million and $2.3 million at June 30, 2022 and December 31, 2021, respectively.

The CARES Act also included a loan program administered through the U.S. Small Business Administration (‘‘SBA’’) referred to as the PPP. Under the PPP, small businesses and other entities and individuals could apply for loans, subject to numerous limitations and eligibility criteria. We were a participating lender in the PPP. The PPP opened on April 3, 2020 providing American small businesses with cash-flow assistance through 100% federally guaranteed loans through the SBA.  The PPP initially closed on August 8, 2020 (“Round 1”). In December, 2020, additional funding was allocated for the PPP (“Round 2”), whose loans were also eligible for forgiveness.  Round 2 closed on May 31, 2021.

The following table summarizes PPP loans outstanding:

Paycheck Protection Program

	As of June 30, 2022				As of December 31, 2021
	Amount (#)		Amount ($)		Amount (#)		Amount ($)
	(Dollars in thousands)				(Dollars in thousands)
Closed and outstanding - Round 1 loans		-	$	-		6	$	197
Closed and outstanding - Round 2 loans		2		258		180		26,167
Total closed and outstanding		2	$	258		186	$	26,364
Unaccreted net fees remaining at period end			$	-			$	806

PPP loans are included in the commercial and industrial class of the commercial loan portfolio segment. As these loans are 100% guaranteed through the SBA the allowance for credit losses recorded on these loans is zero.  PPP loans funded totaled $6.9 million and $135.5 million during the three and six months ended June 30 2021, respectively.  There were no PPP loans funded during 2022. Interest and fees on loans in our condensed consolidated statement of operations includes $0.2 million and $0.8 million during the three and six month periods ended June 30, 2022, related to the accretion of net loan fees on PPP loans. Accretion of PPP net loan fees was $1.8 million and $3.9 million during the three and six month periods ended June 30, 2021.

Credit Quality Indicators – As part of our on-going monitoring of the credit quality of our loan portfolios, we track certain credit quality indicators including (a) risk grade of commercial loans, (b) the level of classified commercial loans, (c) credit scores of mortgage and installment loan borrowers, and (d) delinquency history and non-performing loans.

22

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

For commercial loans, we use a loan rating system that is similar to those employed by state and federal banking regulators. Loans are graded on a scale of 1 to 12. A description of the general characteristics of the ratings follows:

Rating 1 through 6: These loans are generally referred to as our “non-watch” commercial credits that include very high or exceptional credit fundamentals through acceptable credit fundamentals.

Rating 7 and 8: These loans are generally referred to as our “watch” commercial credits. These ratings include loans to borrowers that exhibit potential credit weakness or downward trends. If not checked or cured these trends could weaken our asset or credit position. While potentially weak, no loss of principal or interest is envisioned with these ratings.

Rating 9: These loans are generally referred to as our “substandard accruing” commercial credits. This rating includes loans to borrowers that exhibit a well-defined weakness where payment default is probable and loss is possible if deficiencies are not corrected. Generally, loans with this rating are considered collectible as to both principal and interest primarily due to collateral coverage.

Rating 10 and 11: These loans are generally referred to as our ‘‘substandard - non-accrual’’ and ‘‘doubtful’’ commercial credits. Our doubtful rating includes a sub classification for a loss rate other than 50% (which is the standard doubtful loss rate).  These ratings include loans to borrowers with weaknesses that make collection of the loan in full, on the basis of current facts, conditions and values at best questionable and at worst improbable. All of these loans are placed in non-accrual.

Rating 12: These loans are generally referred to as our “loss” commercial credits. This rating includes loans to borrowers that are deemed incapable of repayment and are charged-off.

23

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The following tables summarize loan ratings by loan class for our commercial portfolio loan segment at June 30, 2022 and December 31, 2021:

	Commercial
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
	(In thousands)
June 30, 2022
Commercial and industrial
Non-watch (1-6)	$	95,350	$	103,647	$	67,402	$	52,393	$	36,427	$	121,179	$	196,543	$	672,941
Watch (7-8)		38		3,864		451		-		137		4,530		303		9,323
Substandard Accrual (9)		-		1,534		-		1,993		1,022		1,153		-		5,702
Non-Accrual (10-11)		-		-		-		-		-		56		-		56
Total	$	95,388	$	109,045	$	67,853	$	54,386	$	37,586	$	126,918	$	196,846	$	688,022
Accrued interest excluded from total	$	130	$	187	$	143	$	97	$	191	$	310	$	439	$	1,497
Commercial real estate
Non-watch (1-6)	$	67,200	$	129,499	$	39,157	$	99,872	$	69,987	$	185,974	$	35,228	$	626,917
Watch (7-8)		-		-		164		2,568		10,550		842		-		14,124
Substandard Accrual (9)		-		135		-		-		-		-		-		135
Non-Accrual (10-11)		-		-		-		-		-		-		-		-
Total	$	67,200	$	129,634	$	39,321	$	102,440	$	80,537	$	186,816	$	35,228	$	641,176
Accrued interest excluded from total	$	190	$	236	$	62	$	233	$	229	$	458	$	63	$	1,471
Total Commercial
Non-watch (1-6)	$	162,550	$	233,146	$	106,559	$	152,265	$	106,414	$	307,153	$	231,771	$	1,299,858
Watch (7-8)		38		3,864		615		2,568		10,687		5,372		303		23,447
Substandard Accrual (9)		-		1,669		-		1,993		1,022		1,153		-		5,837
Non-Accrual (10-11)		-		-		-		-		-		56		-		56
Total	$	162,588	$	238,679	$	107,174	$	156,826	$	118,123	$	313,734	$	232,074	$	1,329,198
Accrued interest excluded from total	$	320	$	423	$	205	$	330	$	420	$	768	$	502	$	2,968

	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
	2021		2020		2019		2018		2017		Prior		Cost Basis		Total
	(In thousands)
December 31, 2021
Commercial and industrial
Non-watch (1-6)	$	121,917	$	69,856	$	56,984	$	44,827	$	38,307	$	96,261	$	144,579	$	572,731
Watch (7-8)		81		-		532		1,294		362		6,274		476		9,019
Substandard Accrual (9)		1,569		2		1,159		247		-		1,530		6,793		11,300
Non-Accrual (10-11)		-		-		-		-		-		62		-		62
Total	$	123,567	$	69,858	$	58,675	$	46,368	$	38,669	$	104,127	$	151,848	$	593,112
Accrued interest excluded from total	$	314	$	153	$	105	$	229	$	90	$	240	$	242	$	1,373
Commercial real estate
Non-watch (1-6)	$	123,330	$	55,479	$	108,056	$	75,828	$	39,123	$	160,199	$	31,551	$	593,566
Watch (7-8)		-		324		3,028		7,678		1,708		1,423		-		14,161
Substandard Accrual (9)		441		-		-		1,193		1,108		-		-		2,742
Non-Accrual (10-11)		-		-		-		-		-		-		-		-
Total	$	123,771	$	55,803	$	111,084	$	84,699	$	41,939	$	161,622	$	31,551	$	610,469
Accrued interest excluded from total	$	182	$	81	$	233	$	203	$	94	$	325	$	47	$	1,165
Total Commercial
Non-watch (1-6)	$	245,247	$	125,335	$	165,040	$	120,655	$	77,430	$	256,460	$	176,130	$	1,166,297
Watch (7-8)		81		324		3,560		8,972		2,070		7,697		476		23,180
Substandard Accrual (9)		2,010		2		1,159		1,440		1,108		1,530		6,793		14,042
Non-Accrual (10-11)		-		-		-		-		-		62		-		62
Total	$	247,338	$	125,661	$	169,759	$	131,067	$	80,608	$	265,749	$	183,399	$	1,203,581
Accrued interest excluded from total	$	496	$	234	$	338	$	432	$	184	$	565	$	289	$	2,538

For each of our mortgage and installment portfolio segment classes, we generally monitor credit quality based on the credit scores of the borrowers. These credit scores are generally updated semi-annually.

24

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The following tables summarize credit scores by loan class for our mortgage and installment loan portfolio segments at June 30, 2022 and December 31, 2021:

	Mortgage (1)
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
	(In thousands)
June 30, 2022
1-4 family owner occupied - jumbo
800 and above	$	6,169	$	31,107	$	18,008	$	3,943	$	690	$	5,400	$	-	$	65,317
750-799		56,497		204,172		75,666		24,735		5,479		19,208		2,071		387,828
700-749		22,889		69,946		23,815		7,324		2,152		7,475		-		133,601
650-699		4,856		22,462		15,192		6,135		4,112		5,446		-		58,203
600-649		1,976		1,857		1,411		501		473		3,416		-		9,634
550-599		-		-		1,864		-		-		-		-		1,864
500-549		556		-		-		-		-		695		-		1,251
Under 500		-		-		-		-		-		-		-		-
Unknown		-		-		-		-		-		-		-		-
Total	$	92,943	$	329,544	$	135,956	$	42,638	$	12,906	$	41,640	$	2,071	$	657,698
Accrued interest excluded from total	$	221	$	707	$	330	$	111	$	46	$	126	$	6	$	1,547
1-4 family owner occupied - non-jumbo
800 and above	$	4,128	$	11,364	$	4,556	$	2,594	$	1,923	$	7,397	$	3,472	$	35,434
750-799		28,528		38,076		16,879		9,041		5,262		19,462		9,072		126,320
700-749		18,439		21,607		6,901		3,001		3,193		22,438		4,832		80,411
650-699		1,283		9,075		3,013		3,312		2,134		13,849		1,347		34,013
600-649		298		1,159		1,497		2,078		1,804		8,663		91		15,590
550-599		-		410		514		438		453		5,705		48		7,568
500-549		-		209		279		355		432		3,037		18		4,330
Under 500		-		-		770		521		129		1,023		-		2,443
Unknown		-		-		-		-		-		-		-		-
Total	$	52,676	$	81,900	$	34,409	$	21,340	$	15,330	$	81,574	$	18,880	$	306,109
Accrued interest excluded from total	$	143	$	166	$	89	$	70	$	53	$	227	$	71	$	819
1-4 family non-owner occupied
800 and above	$	4,398	$	7,558	$	2,862	$	4,348	$	994	$	6,508	$	2,090	$	28,758
750-799		13,258		41,754		18,208		6,510		2,735		13,374		4,049		99,888
700-749		5,997		10,830		5,758		1,607		973		7,372		2,083		34,620
650-699		2,614		2,201		937		970		748		4,974		728		13,172
600-649		-		143		-		77		100		2,178		200		2,698
550-599		-		-		-		-		487		587		271		1,345
500-549		-		-		-		-		-		467		110		577
Under 500		-		-		-		-		-		205		-		205
Unknown		-		-		-		-		-		-		-		-
Total	$	26,267	$	62,486	$	27,765	$	13,512	$	6,037	$	35,665	$	9,531	$	181,263
Accrued interest excluded from total	$	57	$	154	$	72	$	44	$	22	$	108	$	36	$	493
1-4 family - 2nd lien
800 and above	$	97	$	117	$	1,042	$	244	$	171	$	547	$	9,075	$	11,293
750-799		1,607		2,832		1,951		833		504		4,280		32,283		44,290
700-749		280		1,556		990		848		409		1,981		18,710		24,774
650-699		-		163		292		288		315		1,990		7,375		10,423
600-649		-		100		175		214		157		805		1,359		2,810
550-599		-		-		-		25		38		424		176		663
500-549		-		-		-		77		-		427		248		752
Under 500		-		-		-		54		3		121		68		246
Unknown		-		-		-		-		-		-		-		-
Total	$	1,984	$	4,768	$	4,450	$	2,583	$	1,597	$	10,575	$	69,294	$	95,251
Accrued interest excluded from total	$	4	$	10	$	9	$	7	$	5	$	28	$	263	$	326

25

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

	Mortgage - continued (1)
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
	(In thousands)
June 30, 2022 - continued
Resort lending
800 and above	$	-	$	-	$	-	$	-	$	271	$	7,263	$	-	$	7,534
750-799		-		490		1,262		235		688		16,330		-		19,005
700-749		-		312		54		-		56		7,678		-		8,100
650-699		-		697		83		-		-		6,834		-		7,614
600-649		-		-		-		-		-		1,296		-		1,296
550-599		-		-		-		-		-		137		-		137
500-549		-		-		-		-		-		44		-		44
Under 500		-		-		-		-		-		118		-		118
Unknown		-		-		-		-		-		-		-		-
Total	$	-	$	1,499	$	1,399	$	235	$	1,015	$	39,700	$	-	$	43,848
Accrued interest excluded from total	$	-	$	1	$	3	$	1	$	3	$	102	$	-	$	110
Total Mortgage
800 and above	$	14,792	$	50,146	$	26,468	$	11,129	$	4,049	$	27,115	$	14,637	$	148,336
750-799		99,890		287,324		113,966		41,354		14,668		72,654		47,475		677,331
700-749		47,605		104,251		37,518		12,780		6,783		46,944		25,625		281,506
650-699		8,753		34,598		19,517		10,705		7,309		33,093		9,450		123,425
600-649		2,274		3,259		3,083		2,870		2,534		16,358		1,650		32,028
550-599		-		410		2,378		463		978		6,853		495		11,577
500-549		556		209		279		432		432		4,670		376		6,954
Under 500		-		-		770		575		132		1,467		68		3,012
Unknown		-		-		-		-		-		-		-		-
Total	$	173,870	$	480,197	$	203,979	$	80,308	$	36,885	$	209,154	$	99,776	$	1,284,169
Accrued interest excluded from total	$	425	$	1,038	$	503	$	233	$	129	$	591	$	376	$	3,295

	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
	2021		2020		2019		2018		2017		Prior		Cost Basis		Total
	(In thousands)
December 31, 2021
1-4 family owner occupied - jumbo
800 and above	$	31,137	$	17,652	$	8,491	$	2,565	$	7,516	$	527	$	-	$	67,888
750-799		135,292		92,590		30,072		7,118		9,469		5,043		2,371		281,955
700-749		67,255		34,665		13,765		4,421		7,748		4,856		-		132,710
650-699		19,367		10,313		5,447		5,285		6,080		690		-		47,182
600-649		2,050		2,638		506		1,013		837		976		-		8,020
550-599		-		469		-		-		781		-		-		1,250
500-549		-		1,411		-		-		-		-		-		1,411
Under 500		-		-		-		-		607		-		-		607
Unknown		-		-		-		-		-		-		-		-
Total	$	255,101	$	159,738	$	58,281	$	20,402	$	33,038	$	12,092	$	2,371	$	541,023
Accrued interest excluded from total	$	557	$	370	$	163	$	77	$	87	$	33	$	3	$	1,290
1-4 family owner occupied - non-jumbo
800 and above	$	6,185	$	5,534	$	3,756	$	2,514	$	3,566	$	4,569	$	4,026	$	30,150
750-799		33,227		20,300		9,688		5,664		8,887		12,498		8,341		98,605
700-749		19,317		10,572		4,813		4,035		5,008		21,806		5,637		71,188
650-699		6,593		4,233		3,217		2,010		3,135		12,423		2,812		34,423
600-649		2,119		1,082		1,051		1,549		1,660		8,663		89		16,213
550-599		-		295		1,076		758		1,023		5,802		147		9,101
500-549		-		57		421		327		510		3,169		18		4,502
Under 500		-		616		284		394		250		684		-		2,228
Unknown		-		-		-		-		-		-		-		-
Total	$	67,441	$	42,689	$	24,306	$	17,251	$	24,039	$	69,614	$	21,070	$	266,410
Accrued interest excluded from total	$	208	$	97	$	84	$	58	$	68	$	226	$	57	$	798

26

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

	Mortgage - continued (1)
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
	2021		2020		2019		2018		2017		Prior		Cost Basis		Total
	(In thousands)
December 31, 2021 (continued)
1-4 family non-owner occupied
800 and above	$	15,406	$	1,786	$	2,857	$	1,459	$	2,627	$	5,058	$	1,639	$	30,832
750-799		44,201		21,885		10,517		3,667		6,956		10,004		5,117		102,347
700-749		16,486		7,807		2,764		1,878		966		6,095		2,756		38,752
650-699		6,617		3,095		257		299		248		6,019		955		17,490
600-649		125		57		108		282		174		2,051		381		3,178
550-599		-		25		-		192		-		1,121		-		1,338
500-549		-		-		-		55		-		638		50		743
Under 500		-		-		-		-		-		172		-		172
Unknown		-		-		-		-		-		-		-		-
Total	$	82,835	$	34,655	$	16,503	$	7,832	$	10,971	$	31,158	$	10,898	$	194,852
Accrued interest excluded from total	$	171	$	95	$	46	$	23	$	33	$	107	$	38	$	513
1-4 family - 2nd lien
800 and above	$	415	$	964	$	426	$	95	$	266	$	353	$	8,465	$	10,984
750-799		2,161		2,413		714		1,332		1,859		2,415		30,106		41,000
700-749		1,307		1,049		771		561		1,374		2,365		16,316		23,743
650-699		122		309		460		405		140		1,639		5,286		8,361
600-649		-		177		72		106		92		1,143		1,370		2,960
550-599		-		-		61		-		-		476		228		765
500-549		-		-		99		-		89		190		155		533
Under 500		-		-		54		3		60		16		250		383
Unknown		-		-		-		-		-		-		-		-
Total	$	4,005	$	4,912	$	2,657	$	2,502	$	3,880	$	8,597	$	62,176	$	88,729
Accrued interest excluded from total	$	7	$	9	$	9	$	5	$	8	$	34	$	211	$	283
Resort lending
800 and above	$	-	$	-	$	-	$	274	$	-	$	7,347	$	-	$	7,621
750-799		600		1,246		250		511		63		19,630		-		22,300
700-749		-		174		-		301		67		9,052		-		9,594
650-699		951		-		-		-		-		6,057		-		7,008
600-649		-		-		-		-		-		1,841		-		1,841
550-599		-		-		-		-		-		80		-		80
500-549		-		-		-		-		-		201		-		201
Under 500		-		-		-		-		-		-		-		-
Unknown		-		-		-		-		-		-		-		-
Total	$	1,551	$	1,420	$	250	$	1,086	$	130	$	44,208	$	-	$	48,645
Accrued interest excluded from total	$	2	$	3	$	-	$	3	$	-	$	106	$	-	$	114
Total Mortgage
800 and above	$	53,143	$	25,936	$	15,530	$	6,907	$	13,975	$	17,854	$	14,130	$	147,475
750-799		215,481		138,434		51,241		18,292		27,234		49,590		45,935		546,207
700-749		104,365		54,267		22,113		11,196		15,163		44,174		24,709		275,987
650-699		33,650		17,950		9,381		7,999		9,603		26,828		9,053		114,464
600-649		4,294		3,954		1,737		2,950		2,763		14,674		1,840		32,212
550-599		-		789		1,137		950		1,804		7,479		375		12,534
500-549		-		1,468		520		382		599		4,198		223		7,390
Under 500		-		616		338		397		917		872		250		3,390
Unknown		-		-		-		-		-		-		-		-
Total	$	410,933	$	243,414	$	101,997	$	49,073	$	72,058	$	165,669	$	96,515	$	1,139,659
Accrued interest excluded from total	$	945	$	574	$	302	$	166	$	196	$	506	$	309	$	2,998

(1) Credit scores have been updated within the last twelve months.

27

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

	Installment (1)
	Term Loans Amortized Cost Basis by Origination Year
	2022		2021		2020		2019		2018		Prior		Total
	(In thousands)
June 30, 2022
Boat lending
800 and above	$	7,512	$	7,782	$	5,048	$	4,851	$	4,324	$	6,478	$	35,995
750-799		36,409		40,761		21,681		18,994		14,723		17,404		149,972
700-749		11,308		17,884		8,563		7,198		4,277		6,705		55,935
650-699		2,966		3,513		1,669		1,391		1,342		2,073		12,954
600-649		294		717		297		326		447		628		2,709
550-599		-		44		6		81		126		213		470
500-549		-		-		47		10		32		199		288
Under 500		-		-		-		-		28		34		62
Unknown		-		-		-		-		-		-		-
Total	$	58,489	$	70,701	$	37,311	$	32,851	$	25,299	$	33,734	$	258,385
Accrued interest excluded from total	$	133	$	150	$	87	$	84	$	58	$	76	$	588
Recreational vehicle lending
800 and above	$	9,586	$	7,967	$	5,149	$	5,129	$	3,712	$	4,934	$	36,477
750-799		47,236		58,380		18,792		14,206		10,072		10,168		158,854
700-749		17,003		28,781		8,234		5,702		3,357		3,001		66,078
650-699		2,558		7,068		1,871		1,337		922		1,179		14,935
600-649		98		1,237		513		246		279		192		2,565
550-599		-		137		95		247		255		118		852
500-549		-		50		76		59		-		46		231
Under 500		-		67		-		11		-		4		82
Unknown		-		-		-		-		-		-		-
Total	$	76,481	$	103,687	$	34,730	$	26,937	$	18,597	$	19,642	$	280,074
Accrued interest excluded from total	$	177	$	231	$	76	$	63	$	45	$	40	$	632
Other
800 and above	$	1,623	$	1,646	$	1,674	$	1,277	$	542	$	838	$	7,600
750-799		10,440		11,496		6,882		4,327		2,363		3,955		39,463
700-749		5,743		8,558		4,288		2,472		1,271		2,834		25,166
650-699		21,828		4,252		1,253		947		538		1,510		30,328
600-649		316		783		239		247		197		596		2,378
550-599		46		163		56		41		90		124		520
500-549		-		15		62		70		29		76		252
Under 500		-		1		61		32		36		33		163
Unknown		1,154		-		-		-		-		-		1,154
Total	$	41,150	$	26,914	$	14,515	$	9,413	$	5,066	$	9,966	$	107,024
Accrued interest excluded from total	$	48	$	55	$	29	$	25	$	15	$	40	$	212
Total installment
800 and above	$	18,721	$	17,395	$	11,871	$	11,257	$	8,578	$	12,250	$	80,072
750-799		94,085		110,637		47,355		37,527		27,158		31,527		348,289
700-749		34,054		55,223		21,085		15,372		8,905		12,540		147,179
650-699		27,352		14,833		4,793		3,675		2,802		4,762		58,217
600-649		708		2,737		1,049		819		923		1,416		7,652
550-599		46		344		157		369		471		455		1,842
500-549		-		65		185		139		61		321		771
Under 500		-		68		61		43		64		71		307
Unknown		1,154		-		-		-		-		-		1,154
Total	$	176,120	$	201,302	$	86,556	$	69,201	$	48,962	$	63,342	$	645,483
Accrued interest excluded from total	$	358	$	436	$	192	$	172	$	118	$	156	$	1,432

28

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

	Installment - continued (1)
	Term Loans Amortized Cost Basis by Origination Year
	2021		2020		2019		2018		2017		Prior		Total
	(In thousands)
December 31, 2021
Boat lending
800 and above	$	7,513	$	5,786	$	6,015	$	4,906	$	2,968	$	4,433	$	31,621
750-799		47,434		24,968		21,052		15,681		9,797		10,971		129,903
700-749		19,180		9,724		8,263		6,467		3,109		4,953		51,696
650-699		3,845		1,679		2,301		1,223		1,166		1,378		11,592
600-649		373		419		209		327		185		604		2,117
550-599		237		81		91		113		115		191		828
500-549		-		49		-		85		-		67		201
Under 500		-		-		-		10		168		4		182
Unknown		-		-		-		-		-		-		-
Total	$	78,582	$	42,706	$	37,931	$	28,812	$	17,508	$	22,601	$	228,140
Accrued interest excluded from total	$	169	$	102	$	106	$	69	$	44	$	47	$	537
Recreational vehicle lending
800 and above	$	8,475	$	5,121	$	5,837	$	4,627	$	2,456	$	3,594	$	30,110
750-799		66,834		22,707		17,173		11,973		5,281		6,794		130,762
700-749		32,702		9,500		6,169		3,768		1,657		2,343		56,139
650-699		7,390		2,423		1,842		948		649		905		14,157
600-649		990		408		291		333		152		111		2,285
550-599		271		100		163		318		6		72		930
500-549		39		21		105		62		26		91		344
Under 500		-		-		11		-		-		7		18
Unknown		-		-		-		-		-		-		-
Total	$	116,701	$	40,280	$	31,591	$	22,029	$	10,227	$	13,917	$	234,745
Accrued interest excluded from total	$	265	$	93	$	78	$	56	$	26	$	28	$	546
Other
800 and above	$	2,328	$	1,424	$	1,493	$	882	$	357	$	695	$	7,179
750-799		13,923		9,093		6,074		3,175		2,183		2,731		37,179
700-749		10,791		5,426		3,301		1,899		906		2,194		24,517
650-699		20,167		1,715		1,249		657		561		1,332		25,681
600-649		761		368		272		190		284		357		2,232
550-599		159		42		127		167		46		154		695
500-549		8		53		56		55		38		98		308
Under 500		6		62		42		14		12		18		154
Unknown		975		-		-		-		-		-		975
Total	$	49,118	$	18,183	$	12,614	$	7,039	$	4,387	$	7,579	$	98,920
Accrued interest excluded from total	$	73	$	40	$	36	$	19	$	11	$	38	$	217
Total installment
800 and above	$	18,316	$	12,331	$	13,345	$	10,415	$	5,781	$	8,722	$	68,910
750-799		128,191		56,768		44,299		30,829		17,261		20,496		297,844
700-749		62,673		24,650		17,733		12,134		5,672		9,490		132,352
650-699		31,402		5,817		5,392		2,828		2,376		3,615		51,430
600-649		2,124		1,195		772		850		621		1,072		6,634
550-599		667		223		381		598		167		417		2,453
500-549		47		123		161		202		64		256		853
Under 500		6		62		53		24		180		29		354
Unknown		975		-		-		-		-		-		975
Total	$	244,401	$	101,169	$	82,136	$	57,880	$	32,122	$	44,097	$	561,805
Accrued interest excluded from total	$	507	$	235	$	220	$	144	$	81	$	113	$	1,300

(1) Credit scores have been updated within the last twelve months.

29

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Foreclosed residential real estate properties included in other real estate and repossessed assets on our Condensed Consolidated Statements of Financial Condition totaled $0.5 million and $0.2 million at June 30, 2022 and December 31, 2021, respectively. Retail mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process according to local requirements totaled $0.4 million and $0.6 million at June 30, 2022 and December 31, 2021, respectively.

During the first quarter of 2022, we sold $33.4 million of portfolio residential fixed rate mortgage loans servicing retained to private investors and recognized a gain on sale of $0.41 million.  This transaction was done primarily for asset/liability management purposes.

5. Shareholders’ Equity and Earnings Per Common Share

On December 17, 2021, our Board of Directors authorized a share repurchase plan (the “Repurchase Plan”) to buy back up to 1,100,000 shares of our outstanding common stock through December 31, 2022. Shares would be repurchased through open market transactions, though we could execute repurchases through other means, such as privately negotiated transactions. The timing and amount of any share repurchases will depend on a variety of factors, including, among others, securities law restrictions, the trading price of our common stock, regulatory requirements, potential alternative uses for capital, and our financial performance. During the six month periods ended June 30, 2022 and 2021 repurchases were made totaling 181,586 shares and 344,005 shares of common stock, respectively, for an aggregate purchase price of $4.0 million and $7.3 million, respectively.

A reconciliation of basic and diluted net income per common share follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands, except per share data)
Net income	$	13,001	$	12,388	$	30,968	$	34,425
Weighted average shares outstanding (1)		21,070		21,750		21,131		21,788
Stock units for deferred compensation plan for non-employee directors		133		113		131		118
Effect of stock options		42		70		49		76
Performance share units		21		34		23		32
Weighted average shares outstanding for calculation of diluted earnings per share		21,266		21,967		21,334		22,014
Net income per common share
Basic (1)	$	0.62	$	0.57	$	1.47	$	1.58
Diluted	$	0.61	$	0.56	$	1.45	$	1.56

(1) Basic net income per common share includes weighted average common shares outstanding during the period and participating share awards.

Weighted average stock options outstanding that were not considered in computing diluted net income per common share because they were anti-dilutive were zero for the three and six month periods ended June 30, 2022 and 2021, respectively.

30

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

6. Derivative Financial Instruments

We are required to record derivatives on our Condensed Consolidated Statements of Financial Condition as assets and liabilities measured at their fair value.  The accounting for increases and decreases in the value of derivatives depends upon the use of derivatives and whether the derivatives qualify for hedge accounting.

Our derivative financial instruments according to the type of hedge in which they are designated follows:

	June 30, 2022
	Notional Amount		Average Maturity (years)		Fair Value
	(Dollars in thousands)
Fair value hedge designation
Pay-fixed interest rate swap agreements - commercial	$	6,579		6.9	$	193
Pay-fixed interest rate swap agreements - securities available for sale		148,895		5.3		15,460
Total	$	155,474		5.4	$	15,653
No hedge designation
Rate-lock mortgage loan commitments	$	96,536		0.1	$	(5,072	)
Mandatory commitments to sell mortgage loans		98,986		0.1		556
Pay-fixed interest rate swap agreements - mortgage		31,000		7.1		1,283
Pay-fixed interest rate swap agreements - commercial		217,503		5.3		9,545
Pay-variable interest rate swap agreements - commercial		217,503		5.3		(9,545	)
Total	$	661,528		3.9	$	(3,233	)

	December 31, 2021
	Notional Amount		Average Maturity (years)		Fair Value
	(Dollars in thousands)
Fair value hedge designation
Pay-fixed interest rate swap agreements - commercial	$	6,753		7.4	$	(384	)
Pay-fixed interest rate swap agreements - securities available for sale		148,895		5.8		4,413
Total	$	155,648		5.9	$	4,029
No hedge designation
Rate-lock mortgage loan commitments	$	129,846		0.1	$	2,140
Mandatory commitments to sell mortgage loans		97,737		0.1		(68	)
Interest rate swaption agreement		10,000		0.2		186
Pay-fixed interest rate swap agreements - commercial		207,080		5.7		(5,179	)
Pay-variable interest rate swap agreements - commercial		207,080		5.7		5,179
Interest rate cap agreements		90,000		1.3		35
Total	$	741,743		3.4	$	2,293

31

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

We have entered into a pay-fixed interest rate swap to protect a portion of the fair value of a certain fixed rate commercial loan (‘‘Fair Value Hedge – Commercial Loan’’). As a result, changes in the fair value of the pay-fixed interest rate swap is expected to offset changes in the fair value of the fixed rate commercial loan due to fluctuations in interest rates. We record the fair value of Fair Value Hedge – Commercial Loan in accrued income and other assets and accrued expenses and other liabilities on our Condensed Consolidated Statements of Financial Condition. The hedged item (fixed rate commercial loan) is also recorded at fair value which offsets the adjustment to the Fair Value Hedge – Commercial Loan. On an ongoing basis, we adjust our Condensed Consolidated Statements of Financial Condition to reflect the then current fair value of both the Fair Value Hedge – Commercial Loan and the hedged item. The related gains or losses are reported in interest income – interest and fees on loans in our Condensed Consolidated Statements of Operations.

We have entered into pay-fixed interest rate swaps to protect a portion of the fair value of certain securities AFS (‘‘Fair Value Hedge – AFS Securities’’). As a result, the change in the fair value of the pay-fixed interest rate swaps is expected to offset a portion of the change in the fair value of the fixed rate securities AFS due to fluctuations in interest rates. We record the fair value of Fair Value Hedge – AFS Securities in accrued income and other assets and accrued expenses and other liabilities on our Condensed Consolidated Statements of Financial Condition. The hedged items (fixed rate securities AFS) are also recorded at fair value which offsets the adjustment to the Fair Value Hedge – AFS Securities. On an ongoing basis, we adjust our Condensed Consolidated Statements of Financial Condition to reflect the then current fair value of both the Fair Value Hedge – AFS Securities and the hedged item. The related gains or losses are reported in interest income – interest on securities – tax-exempt in our Condensed Consolidated Statements of Operations.

Certain financial derivative instruments have not been designated as hedges. The fair value of these derivative financial instruments has been recorded on our Condensed Consolidated Statements of Financial Condition and is adjusted on an ongoing basis to reflect their then current fair value. The changes in fair value of derivative financial instruments not designated as hedges are recognized in our Condensed Consolidated Statements of Operations.

In the ordinary course of business, we enter into rate-lock mortgage loan commitments with customers (“Rate-Lock Commitments”).  These commitments expose us to interest rate risk.  We also enter into mandatory commitments to sell mortgage loans (“Mandatory Commitments”) to reduce the impact of price fluctuations of mortgage loans held for sale and Rate-Lock Commitments.  Mandatory Commitments help protect our loan sale profit margin from fluctuations in interest rates. The changes in the fair value of Rate-Lock Commitments and Mandatory Commitments are recognized currently as part of net gains on mortgage loans in our Condensed Consolidated Statements of Operations.  We obtain market prices on Mandatory Commitments and Rate-Lock Commitments.  Net gains on mortgage loans, as well as net income may be more volatile as a result of these derivative instruments, which are not designated as hedges.

We have purchased swaption and pay-fixed interest rate swap agreements in an attempt to reduce the impact of price fluctuations of certain mortgage construction loans held for sale. The pay-fixed interest rate swap agreements are presented as “Interest rate swap agreements – mortgage” in the table above. The swaption agreement terminated during the first quarter of 2022. The changes in the fair value of the swaption and pay fixed interest rate swap agreements are recognized currently as part of net gains on mortgage loans in our Condensed Consolidated Statements of Operations.

32

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

We have a program that allows commercial loan customers to lock in a fixed rate for a longer period of time than we would normally offer for interest rate risk reasons.  We will enter into a variable rate commercial loan and an interest rate swap agreement with a customer and then enter into an offsetting interest rate swap agreement with an unrelated party.  The interest rate swap agreement fair values will generally move in opposite directions resulting in little or no net impact on our Condensed Consolidated Statements of Operations.  All of the interest rate swap agreements -  commercial in the table above with no hedge designation relate to this program.

The no hedge designation interest rate cap agreements in the table above had previously qualified for cash flow hedge accounting but were classified to a no hedge designation during 2020 and any changes in fair value since the transfers to the no hedge designation have been recognized in interest expense – other borrowings and subordinated debt and debentures in our Condensed Consolidated Statements of Operations. Also in 2020 it became probable that the forecasted transactions being hedged by these interest rate cap agreements would not occur by the end of the originally specified time period and all remaining unrealized losses included as a component of accumulated other comprehensive income (loss) were reclassified into earnings at that time. During the second quarter of 2022 we terminated $75.0 million of interest rate caps while $15.0 million matured.

33

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The following tables illustrate the impact that the derivative financial instruments discussed above have on individual line items in the Condensed Consolidated Statements of Financial Condition for the periods presented:

Fair Values of Derivative Instruments

	Asset Derivatives						Liability Derivatives
	June 30, 2022			December 31, 2021			June 30, 2022			December 31, 2021
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
	(In thousands)
Derivatives designated as hedging instruments
Pay-fixed interest rate swap agreements	Other assets	$	15,653	Other assets	$	4,413	Other liabilities	$	-	Other liabilities	$	384
Derivatives not designated as hedging instruments
Rate-lock mortgage loan commitments	Other assets		-	Other assets		2,140	Other liabilities		5,072	Other liabilities		-
Mandatory commitments to sell mortgage loans	Other assets		556	Other assets		-	Other liabilities		-	Other liabilities		68
Pay-fixed interest rate swap agreements - mortgage	Other assets		1,283	Other assets		-	Other liabilities		-	Other liabilities		-
Interest rate swaption agreement	Other assets		-	Other assets		186	Other liabilities		-	Other liabilities		-
Pay-fixed interest rate swap agreements - commercial	Other assets		9,735	Other assets		165	Other liabilities		190	Other liabilities		5,344
Pay-variable interest rate swap agreements - commercial	Other assets		190	Other assets		5,344	Other liabilities		9,735	Other liabilities		165
Interest rate cap agreements	Other assets		-	Other assets		35	Other liabilities		-	Other liabilities		-
			11,764			7,870			14,997			5,577
Total derivatives		$	27,417		$	12,283		$	14,997		$	5,961

34

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The effect of derivative financial instruments on the Condensed Consolidated Statements of Operations follows:

		Gain (Loss) Recognized in Income
	Location of  Gain (Loss)  Recognized  in Income	Three Month Periods Ended June 30,
		2022			2021
Fair Value Hedges		(In thousands)
Pay-fixed interest rate swap agreement - commercial	Interest and fees on loans	$	200		$	(92	)
Pay-fixed interest rate swap agreement - securities available for sale	Interest on securities available for sale - tax - exempt		3,501			(2,234	)
Total		$	3,701		$	(2,326	)
No hedge designation
Rate-lock mortgage loan commitments	Net gains on mortgage loans	$	(1,842	)	$	1,158
Mandatory commitments to sell mortgage loans	Net gains on mortgage loans		(1,350	)		(1,027	)
Pay-fixed interest rate swap agreements -  mortgage	Net gains on mortgage loans		656			-
Interest rate swaption agreement	Net gains on mortgage loans		-			(27	)
Pay-fixed interest rate swap agreements -  commercial	Interest income		5,147			(448	)
Pay-variable interest rate swap agreements - commercial	Interest income		(5,147	)		448
Pay-fixed interest rate swap agreements	Interest expense		-			120
Interest rate cap agreements	Interest expense		23			(4	)
Purchased options	Interest expense		-			11
Written options	Interest expense		-			(11	)
Total		$	(2,513	)	$	220

35

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

		Gain (Loss) Recognized in Income
	Location of  Gain (Loss)  Recognized  in Income	Six Month Periods Ended June 30,
		2022			2021
		(In thousands)
Fair Value Hedges
Pay-fixed interest rate swap agreement - commercial	Interest and fees on loans	$	576		$	260
Pay-fixed interest rate swap agreement - securities available for sale	Interest on securities available for sale - tax - exempt		11,048			2,639
Total		$	11,624		$	2,899
No hedge designation
Rate-lock mortgage loan commitments	Net gains on mortgage loans	$	(7,212	)	$	(2,664	)
Mandatory commitments to sell mortgage loans	Net gains on mortgage loans		624			810
Pay-fixed interest rate swap agreements - mortgage	Net gains on mortgage loans		1,283			-
Interest rate swaption agreement	Net gains on mortgage loans		(186	)		(27	)
Pay-fixed interest rate swap agreements - commercial	Interest income		14,724			2,827
Pay-variable interest rate swap agreements - commercial	Interest income		(14,724	)		(2,827	)
Pay-fixed interest rate swap agreements	Interest expense		-			238
Interest rate cap agreements	Interest expense		245			11
Purchased options	Interest expense		-			29
Written options	Interest expense		-			(29	)
Total		$	(5,246	)	$	(1,632	)

36

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

7. Goodwill and Other Intangibles

The following table summarizes intangible assets, net of amortization:

	June 30, 2022				December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(In thousands)
Amortized intangible assets - core deposits	$	11,916	$	9,045	$	11,916	$	8,580
Unamortized intangible assets - goodwill	$	28,300			$	28,300

A summary of estimated core deposits intangible amortization at June 30, 2022 follows:

	(In thousands)
Six months ending December 31, 2022		320
2023		547
2024		516
2025		487
2026		460
2027 and thereafter		541
Total	$	2,871

8. Share Based Compensation

We maintain share based payment plans that include a non-employee director stock purchase plan and a long-term incentive plan that permits the issuance of share based compensation, including stock options and non-vested share awards. The long-term incentive plan, which is shareholder approved, permits the grant of additional share based awards for up to 0.6 million shares of common stock as of June 30, 2022.  The non-employee director stock purchase plan permits the issuance of additional share based payments for up to 0.1 million shares of common stock as of June 30, 2022. Share based awards and payments are measured at fair value at the date of grant and are expensed over the requisite service period. Common shares issued upon exercise of stock options come from currently authorized but unissued shares.

A summary of restricted stock and performance stock units (“PSU”) granted pursuant to our long-term incentive plan follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Restricted stock		2,500		10,000		58,787		85,584
PSU		-		-		19,748		23,981

37

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The shares of restricted stock and PSUs shown in the above table cliff vest after a period of three years.  The performance criteria of the PSUs is split evenly between a comparison of (i) our total shareholder return and (ii) our return on average assets each over the three year period starting on the grant date to these same criteria over that period to an index of our banking peers.

Our directors may elect to receive all or a portion of their cash retainer fees in the form of common stock (either on a current basis or on a deferred basis) pursuant to the non-employee director stock purchase plan referenced above. Shares equal in value to that portion of each director’s fees that he or she has elected to receive in stock on a current basis are issued each quarter and vest immediately. Shares issued on a deferred basis are credited at the rate of 90% of the current fair value of our common stock and vest immediately. During the six month periods ended June 30, 2022 and 2021 we issued 0.008 million and 0.009 million shares, respectively and expensed their value during those same periods.

Total compensation expense recognized for grants pursuant to our long-term incentive plan was $0.4 million and $0.9 million during the three and six month periods ended June 30, 2022, respectively, and was $0.5 million and $0.8 million during the same periods in 2021, respectively.  The corresponding tax benefit relating to this expense was $0.1 million and $0.2 million for the three and six month periods ended June 30, 2022, respectively and $0.1 million and $0.2 million for the same periods in 2021. Total expense recognized for non-employee director share based payments was $0.09 million and $0.19 million during the three and six month periods ended June 30, 2022, respectively, and was $0.09 million and $0.19 million during the same periods in 2021, respectively.  The corresponding tax benefit relating to this expense was $0.02 million and $0.04 million for the three and six month periods ended June 30, 2022, respectively and $0.02 million and $0.04 million during the same periods in 2021.

At June 30, 2022, the total expected compensation cost related to non-vested restricted stock and PSUs not yet recognized was $3.22 million.  The weighted-average period over which this amount will be recognized is 2.1 years.

A summary of outstanding stock option grants and related transactions follows:

	Number of Shares			Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregated Intrinsic Value
								(In thousands)
Outstanding at January 1, 2022		80,839		$	5.76
Granted		-
Exercised		(21,632	)		3.33
Forfeited		-
Expired		-
Outstanding at June 30, 2022		59,207		$	6.65		1.4	$	750
Vested and expected to vest at June 30, 2022		59,207		$	6.65		1.4	$	750
Exercisable at June 30, 2022		59,207		$	6.65		1.4	$	750

38

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

A summary of outstanding non-vested restricted stock and PSUs and related transactions follows:

	Number of Shares			Weighted- Average Grant Date Fair Value
Outstanding at January 1, 2022		234,226		$	21.64
Granted		78,535			26.31
Vested		(55,875	)		22.92
Forfeited		(10,200	)		22.14
Outstanding at June 30, 2022		246,686		$	22.81

Certain information regarding options exercised during the periods follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)				(In thousands)
Intrinsic value	$	111	$	388	$	424	$	701
Cash proceeds received	$	22	$	44	$	72	$	104
Tax benefit realized	$	23	$	81	$	89	$	147

9. Income Tax

Income tax expense was $2.9 million and $2.7 million during the three month periods ended June 30, 2022 and 2021, respectively and $7.0 million and $7.8 million during the six months ended June 30, 2022 and 2021, respectively. Our actual federal income tax expense is different than the amount computed by applying our statutory income tax rate to our income before income tax primarily due to tax-exempt interest income and tax-exempt income from the increase in the cash surrender value on life insurance.  In addition, the three and six month periods ending June 30, 2022 include reductions of $0.02 million and $0.08 million, respectively, of income tax expense related to the impact of the excess value of stock awards that vested and stock options that were exercised as compared to the initial fair values that were expensed. These amounts during the same periods in 2021 were $0.07 million and $0.17 million, respectively.

We assess whether a valuation allowance should be established against our deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard.  The ultimate realization of this asset is primarily based on generating future income.  We concluded at June 30, 2022, June 30, 2021 and December 31, 2021 that the realization of substantially all of our deferred tax assets continues to be more likely than not.

At both June 30, 2022 and December 31, 2021, we had approximately $0.2 million, respectively, of gross unrecognized tax benefits.  We do not expect the total amount of unrecognized tax benefits to significantly increase or decrease during the remainder of 2022.

39

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

10. Regulatory Matters

Capital guidelines adopted by federal and state regulatory agencies and restrictions imposed by law limit the amount of cash dividends our Bank can pay to us. Under these guidelines, the amount of dividends that may be paid in any calendar year is limited to the Bank’s current year net profits, combined with the retained net profits of the preceding two years. Further, the Bank cannot pay a dividend at any time that it has negative undivided profits. As of June 30, 2022, the Bank had positive undivided profits of $116.5 million. It is not our intent to have dividends paid in amounts that would reduce the capital of our Bank to levels below those which we consider prudent or that would not be in accordance with guidelines of regulatory authorities.

We are also subject to various regulatory capital requirements. The prompt corrective action regulations establish quantitative measures to ensure capital adequacy and require minimum amounts and ratios of total, Tier 1, and common equity Tier 1 capital to risk-weighted assets and Tier 1 capital to average assets. Failure to meet minimum capital requirements can result in certain mandatory, and possibly discretionary, actions by regulators that could have a material effect on our interim condensed consolidated financial statements. In addition, capital adequacy rules include a common equity Tier 1 capital conservation buffer of 2.5% of risk-weighted assets that applies to all supervised financial institutions. To avoid limits on capital distributions and certain discretionary bonus payments we must meet the minimum ratio for adequately capitalized institutions plus the buffer. Under capital adequacy guidelines, we must meet specific capital requirements that involve quantitative measures as well as qualitative judgments by the regulators. The most recent regulatory filings as of June 30, 2022 and December 31, 2021, categorized our Bank as well capitalized. Management is not aware of any conditions or events that would have changed the most recent Federal Deposit Insurance Corporation (“FDIC”) categorization.

40

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Our actual capital amounts and ratios follow (1):

	Actual					Minimum for Adequately Capitalized Institutions					Minimum for Well-Capitalized Institutions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
June 30, 2022
Total capital to risk-weighted assets
Consolidated	$	508,950		13.64	%	$	298,424		8.00	%	NA		NA
Independent Bank		456,878		12.26			298,219		8.00		$	372,774		10.00	%
Tier 1 capital to risk-weighted assets
Consolidated	$	422,723		11.33	%	$	223,818		6.00	%	NA		NA
Independent Bank		410,651		11.02			223,664		6.00		$	298,219		8.00	%
Common equity tier 1 capital to risk-weighted assets
Consolidated	$	384,321		10.30	%	$	167,864		4.50	%	NA		NA
Independent Bank		410,651		11.02			167,748		4.50		$	242,303		6.50	%
Tier 1 capital to average assets
Consolidated	$	422,723		8.74	%	$	193,472		4.00	%	NA		NA
Independent Bank		410,651		8.49			193,575		4.00		$	241,969		5.00	%
December 31, 2021
Total capital to risk-weighted assets
Consolidated	$	488,495		14.53	%	$	268,991		8.00	%	NA		NA
Independent Bank		438,352		13.05			268,808		8.00		$	336,011		10.00	%
Tier 1 capital to risk-weighted assets
Consolidated	$	406,645		12.09	%	$	201,743		6.00	%	NA		NA
Independent Bank		396,351		11.80			201,606		6.00		$	268,808		8.00	%
Common equity tier 1 capital to risk-weighted assets
Consolidated	$	368,277		10.95	%	$	151,307		4.50	%	NA		NA
Independent Bank		396,351		11.80			151,205		4.50		$	218,407		6.50	%
Tier 1 capital to average assets
Consolidated	$	406,645		8.79	%	$	185,034		4.00	%	NA		NA
Independent Bank		396,351		8.57			185,077		4.00		$	231,347		5.00	%

(1) These ratios do not reflect a capital conservation buffer of 2.50% at June 30, 2022 and December 31, 2021.

NA - Not applicable

41

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The components of our regulatory capital are as follows:

	Consolidated						Independent Bank
	June 30, 2022			December 31, 2021			June 30, 2022			December 31, 2021
	(In thousands)
Total shareholders' equity	$	331,134		$	398,484		$	357,464		$	426,558
Add (deduct)
Accumulated other comprehensive income (loss) for regulatory purposes		79,206			(6,298	)		79,206			(6,298	)
Goodwill and other intangibles		(31,171	)		(31,636	)		(31,171	)		(31,636	)
CECL (1)		5,152			7,727			5,152			7,727
Common equity tier 1 capital		384,321			368,277			410,651			396,351
Qualifying trust preferred securities		38,402			38,368			-			-
Tier 1 capital		422,723			406,645			410,651			396,351
Subordinated debt		40,000			40,000			-			-
Allowance for credit losses and allowance for unfunded lending commitments limited to 1.25% of total risk-weighted assets		46,227			41,850			46,227			42,001
Total risk-based capital	$	508,950		$	488,495		$	456,878		$	438,352

(1) We elected the three year CECL transition method for regulatory purposes.

11. Fair Value Disclosures

FASB ASC topic 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an 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. FASB ASC topic 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Valuation is based upon quoted prices for identical instruments traded in active markets. Level 1 instruments include securities traded on active exchange markets, such as the New York Stock Exchange, as well as U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets.

Level 2: Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 2 instruments include securities traded in less active dealer or broker markets.

Level 3: Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.

42

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

We used the following methods and significant assumptions to estimate fair value:

Securities:  Where quoted market prices are available in an active market, securities are classified as Level 1 of the valuation hierarchy.  We currently do not have any Level 1 securities. If quoted market prices are not available for the specific security, then fair values are estimated by (1) using quoted market prices of securities with similar characteristics, (2) matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices, or (3) a discounted cash flow analysis whose significant fair value inputs can generally be verified and do not typically involve judgment by management. These securities are classified as Level 2 of the valuation hierarchy and primarily include agency securities, private label mortgage-backed securities, other asset backed securities, obligations of states and political subdivisions, trust preferred securities, corporate securities and foreign government securities.

Loans held for sale:  The fair value of mortgage loans held for sale, carried at fair value is based on agency cash window loan pricing for comparable assets (recurring Level 2).

Collateral dependent loans with specific loss allocations based on collateral value:  From time to time, certain collateral dependent loans will have an ACL established. When the fair value of the collateral is based on an appraised value or when an appraised value is not available we record the collateral dependent loan as nonrecurring Level 3.  These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments can be significant and thus will typically result in a Level 3 classification of the inputs for determining fair value.

Other real estate: At the time of acquisition, other real estate is recorded at fair value, less estimated costs to sell, which becomes the property’s new basis. Subsequent write-downs to reflect declines in value since the time of acquisition may occur from time to time and are recorded in net gains on other real estate and repossessed assets, which is part of non-interest expense - other in the Condensed Consolidated Statements of Operations. The fair value of the property used at and subsequent to the time of acquisition is typically determined by a third party appraisal of the property. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments can be significant and typically result in a Level 3 classification of the inputs for determining fair value.

43

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Appraisals for both collateral-dependent loans and other real estate  are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by us. Once received, an independent third party, or a member of our Collateral Evaluation Department (for commercial properties), or a member of our Special Assets Group (for residential properties) reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. We compare the actual selling price of collateral that has been sold to the most recent appraised value of our properties to determine what additional adjustment, if any, should be made to the appraisal value to arrive at fair value. For commercial and residential properties we typically discount an appraisal to account for various factors that the appraisal excludes in its assumptions. These additional discounts generally do not result in material adjustments to the appraised value.

Capitalized mortgage loan servicing rights: The fair value of capitalized mortgage loan servicing rights is based on a valuation model used by an independent third party that calculates the present value of estimated net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income. Certain model assumptions are generally unobservable and are based upon the best information available including data relating to our own servicing portfolio, reviews of mortgage servicing assumption and valuation surveys and input from various mortgage servicers and, therefore, are recorded as Level 3.  Management evaluates the third party valuation for reasonableness each quarter as part of our financial reporting control processes.

Derivatives: The fair value of rate-lock mortgage loan commitments is based on agency cash window loan pricing for comparable assets and the fair value of mandatory commitments to sell mortgage loans is based on mortgage backed security pricing for comparable assets (recurring Level 2). The fair value of interest rate swap, interest rate cap and swaption agreements are derived from proprietary models which utilize current market data.  The significant fair value inputs can generally be observed in the market place and do not typically involve judgment by management (recurring Level 2).

44

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Assets and liabilities measured at fair value, including financial assets for which we have elected the fair value option, were as follows:

			Fair Value Measurements Using
	Fair Value Measure- ments		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Un- observable Inputs (Level 3)
	(In thousands)
June 30, 2022:
Measured at Fair Value on a Recurring Basis
Assets
Securities available for sale
U.S. agency	$	13,991	$	-	$	13,991	$	-
U.S. agency residential mortgage-backed		100,689		-		100,689		-
U.S. agency commercial mortgage-backed		15,591		-		15,591		-
Private label mortgage-backed		99,839		-		99,839		-
Other asset backed		234,235		-		234,235		-
Obligations of states and political subdivisions		312,915		-		312,915		-
Corporate		81,009		-		81,009		-
Trust preferred		936		-		936		-
Foreign government		499		-		499		-
Loans held for sale, carried at fair value		31,400		-		31,400		-
Capitalized mortgage loan servicing rights		39,477		-		-		39,477
Derivatives (1)		27,417		-		27,417		-
Liabilities
Derivatives (2)		14,997		-		14,997		-
Measured at Fair Value on a Non-recurring Basis:
Assets
Collateral dependent loans (3)
Commercial
Commercial and industrial		231		-		-		231
Commercial real estate		56		-		-		56
Mortgage
1-4 family owner occupied - non-jumbo		376		-		-		376
1-4 family non-owner occupied		7		-		-		7
1-4 family - 2nd lien		62		-		-		62
Resort lending		25		-		-		25
Installment
Boat lending		66		-		-		66
Recreational vehicle lending		33		-		-		33
Other		101		-		-		101

(1) Included in accrued income and other assets

(2) Included in accrued expenses and other liabilities

(3) Only includes individually evaluated loans with specific loss allocations based on collateral value.

45

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

			Fair Value Measurements Using
	Fair Value Measure- ments		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Un- observable Inputs (Level 3)
	(In thousands)
December 31, 2021:
Measured at Fair Value on a Recurring Basis
Assets
Securities available for sale
U.S. agency	$	34,674	$	-	$	34,674	$	-
U.S. agency residential mortgage-backed		307,985		-		307,985		-
U.S. agency commercial mortgage-backed		22,926		-		22,926		-
Private label mortgage-backed		102,615		-		102,615		-
Other asset backed		216,170		-		216,170		-
Obligations of states and political subdivisions		576,076		-		576,076		-
Corporate		149,959		-		149,959		-
Trust preferred		1,919		-		1,919		-
Foreign government		506		-		506		-
Loans held for sale, carried at fair value		55,470		-		55,470		-
Capitalized mortgage loan servicing rights		26,232		-		-		26,232
Derivatives (1)		12,283		-		12,283		-
Liabilities
Derivatives (2)		5,961		-		5,961		-
Measured at Fair Value on a Non-recurring Basis:
Assets
Collateral dependent loans (3)
Commercial
Commercial and industrial		274		-		-		274
Commercial real estate		65		-		-		65
Mortgage
1-4 family owner occupied - non-jumbo		516		-		-		516
1-4 family non-owner occupied		130		-		-		130
1-4 family - 2nd lien		121		-		-		121
Resort lending		77		-		-		77
Installment
Boat lending		51		-		-		51
Recreational vehicle lending		77		-		-		77
Other		45		-		-		45

(1) Included in accrued income and other assets

(2) Included in accrued expenses and other liabilities

(3) Only includes impaired loans with specific loss allocations based on collateral value.

46

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Changes in fair values for financial assets which we have elected the fair value option for the periods presented were as follows:

	Changes in Fair Values for the Six- Month Periods Ended June 30 for items Measured at Fair Value Pursuant to Election of the Fair Value Option
	Net Gains on Assets			Mortgage			Total Change in Fair Values Included in Current
	Mortgage Loans			Loan Servicing, net			Period Earnings
	(In thousands)
2022
Loans held for sale	$	(1,806	)	$	-		$	(1,806	)
Capitalized mortgage loan servicing rights		-			9,596			9,596
2021
Loans held for sale		(2,400	)		-			(2,400	)
Capitalized mortgage loan servicing rights		-			(581	)		(581	)

For those items measured at fair value pursuant to our election of the fair value option, interest income is recorded within the Condensed Consolidated Statements of Operations based on the contractual amount of interest income earned on these financial assets and dividend income is recorded based on cash dividends received.

The following represent impairment charges recognized during the three and six month periods ended June 30, 2022 and 2021 relating to assets measured at fair value on a non-recurring basis:

• Loans that are individually evaluated using the fair value of collateral for collateral dependent loans had a carrying amount of $1.0 million, which is net of a valuation allowance of $0.4 million at June 30, 2022, and had a carrying amount of $1.4 million, which is net of a valuation allowance of  $0.6  million  at December 31, 2021.  The provision for credit losses included in our results of operations relating to collateral dependent loans was a net expense of $0.1 million and $0.1 million for the three month periods ending June 30, 2022 and 2021, respectively, and a net expense of $0.2 million and $0.1 million for the six month periods ending June 30, 2022 and 2021, respectively.

• Other real estate, which is measured using the fair value of the property, had a carrying amount of zero which is net of a valuation allowance of $0.03 million at June 30, 2022, and a carrying amount of zero which is net of a valuation allowance of $0.03 million, at December 31, 2021. Charges included in our results of operations relating to other real estate measured at fair value were all zero during the three and six month periods ended June 30, 2022 and 2021.

47

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

A reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) follows:

	Capitalized Mortgage Loan Servicing Rights
	Three Months Ended June 30,					Six Months Ended June 30,
	2022		2021			2022		2021
	(In thousands)					(In thousands)
Beginning balance	$	35,933	$	23,530		$	26,232	$	16,904
Total gains (losses) realized and unrealized:
Included in results of operations		2,038		(3,838	)		9,596		(581	)
Included in other comprehensive loss		-		-			-		-
Purchases, issuances, settlements, maturities and calls		1,506		2,739			3,649		6,108
Transfers in and/or out of Level 3		-		-			-		-
Ending balance	$	39,477	$	22,431		$	39,477	$	22,431
Amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at June 30	$	2,038	$	(3,838	)	$	9,596	$	(581	)

The fair value of our capitalized mortgage loan servicing rights has been determined based on a valuation model used by an independent third party as discussed above.  The significant unobservable inputs used in the fair value measurement of the capitalized mortgage loan servicing rights are discount rate, cost to service, ancillary income, float rate and prepayment rate.  Significant changes in all five of these assumptions in isolation would result in significant changes to the value of our capitalized mortgage loan servicing rights.  Quantitative information about our Level 3 fair value measurements measured on a recurring basis follows:

	Asset Fair Value		Valuation Technique	Unobservable Inputs	Range			Weighted Average
	(In thousands)
June 30, 2022
Capitalized mortgage loan servicing rights	$	39,477	Present value of net servicing revenue	Discount rate	9.99% to 14.11		%		10.10	%
				Cost to service	$	67 to $194		$	78
				Ancillary income	20 to 35				21
				Float rate		3.08	%		3.08	%
				Prepayment rate	7.04% to 31.92		%		7.90	%
December 31, 2021
Capitalized mortgage loan servicing rights	$	26,232	Present value of net servicing revenue	Discount rate	10.00% to 13.00		%		10.07	%
				Cost to service	$	67 to $281		$	78
				Ancillary income	20 to 30				21
				Float rate		1.36	%		1.36	%
				Prepayment rate	7.02% to 44.21		%		13.92	%

48

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Quantitative information about Level 3 fair value measurements measured on a non-recurring basis follows:

	Asset Fair Value		Valuation Technique	Unobservable Inputs	Range		Weighted Average
	(In thousands)
June 30, 2022
Collateral dependent loans
Commercial	$	287	Sales comparison approach	Adjustment for differences between comparable sales	(12.5)% to 12.0	%		1.1	%
Mortgage and Installment(1)		670	Sales comparison approach	Adjustment for differences between comparable sales	(25.5) to 20.5			(1.7	)
December 31, 2021
Collateral dependent loans
Commercial	$	339	Sales comparison approach	Adjustment for differences between comparable sales	(12.5)% to 12.0	%		1.5	%
Mortgage and Installment(1)		1,017	Sales comparison approach	Adjustment for differences between comparable sales	(30.1) to 29.3			0.2

(1) In addition to the valuation techniques and unobservable inputs discussed above, at June 30, 2022 and December 31, 2021 certain collateral dependent installment loans totaling approximately $0.20 million and $0.17 million, respectively, are secured by collateral other than real estate.  For the majority of these loans, we apply internal discount rates to industry valuation guides.

The following table reflects the difference between the aggregate fair value and the aggregate remaining contractual principal balance outstanding for loans held for sale for which the fair value option has been elected for the periods presented.

	Aggregate Fair Value		Difference			Contractual Principal
	(In thousands)
Loans held for sale
June 30, 2022	$	31,400	$	(755	)	$	32,155
December 31, 2021		55,470		1,051			54,419

49

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

12. Fair Values of Financial Instruments

Most of our assets and liabilities are considered financial instruments. Many of these financial instruments lack an available trading market and it is our general practice and intent to hold the majority of our financial instruments to maturity. Significant estimates and assumptions were used to determine the fair value of financial instruments. These estimates are subjective in nature, involving uncertainties and matters of judgment, and therefore, fair values may not be a precise estimate. Changes in assumptions could significantly affect the estimates.

Estimated fair values have been determined using available data and methodologies that are considered suitable for each category of financial instrument. For instruments with adjustable interest rates which reprice frequently and without significant credit risk, it is presumed that estimated fair values approximate the recorded book balances.

50

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The estimated recorded book balances and fair values follow:

					Fair Value Using
	Recorded Book Balance		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Un- observable Inputs (Level 3)
	(In thousands)
June 30, 2022
Assets
Cash and due from banks	$	56,516	$	56,516	$	56,516	$	-	$	-
Interest bearing deposits		2,970		2,970		2,970		-		-
Securities available for sale		859,704		859,704		-		859,704		-
Securities held to maturity		381,608		359,701		-		359,701		-
Federal Home Loan Bank and Federal
Reserve Bank Stock		17,653	NA		NA		NA		NA
Net loans and loans held for sale		3,242,367		2,991,614		-		31,400		2,960,214
Accrued interest receivable		13,923		13,923		-		6,228		7,695
Derivative financial instruments		27,417		27,417		-		27,417		-
Liabilities
Deposits with no stated maturity (1)	$	3,904,324	$	3,904,324	$	3,904,324	$	-	$	-
Deposits with stated maturity (1)		386,250		381,095		-		381,095		-
Other borrowings		25,507		25,506		-		25,506		-
Subordinated debt		39,395		42,464		-		42,464		-
Subordinated debentures		39,626		38,034		-		38,034		-
Accrued interest payable		588		588		73		515		-
Derivative financial instruments		14,997		14,997		-		14,997		-
December 31, 2021
Assets
Cash and due from banks	$	51,069	$	51,069	$	51,069	$	-	$	-
Interest bearing deposits		58,404		58,404		58,404		-		-
Securities available for sale		1,412,830		1,412,830		-		1,412,830		-
Federal Home Loan Bank and Federal
Reserve Bank Stock		18,427	NA		NA		NA		NA
Net loans and loans held for sale		2,948,074		2,931,079		35,233		55,470		2,840,376
Accrued interest receivable		12,865		12,865		1		6,028		6,836
Derivative financial instruments		12,283		12,283		-		12,283		-
Liabilities
Deposits with no stated maturity (1)	$	3,781,298	$	3,781,298	$	3,781,298	$	-	$	-
Deposits with stated maturity (1)		335,792		336,006		-		336,006		-
Other borrowings		30,009		30,155		-		30,155		-
Subordinated debt		39,357		44,999		-		44,999		-
Subordinated debentures		39,592		33,866		-		33,866		-
Accrued interest payable		497		497		67		430		-
Derivative financial instruments		5,961		5,961		-		5,961		-

(1) Deposits with no stated maturity include reciprocal deposits with a recorded book balance of $585.376 million and $562.210 million at June 30, 2022 and December 31, 2021, respectively. Deposits with a stated maturity include reciprocal deposits with a recorded book balance of $29.828 million and $24.416 million at June 30, 2022 and December 31, 2021, respectively.

51

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The fair values for commitments to extend credit and standby letters of credit are estimated to approximate their aggregate book balance, which is nominal and therefore are not disclosed.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale the entire holdings of a particular financial instrument.

Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business, the value of future earnings attributable to off-balance sheet activities and the value of assets and liabilities that are not considered financial instruments.

Fair value estimates for deposit accounts do not include the value of the core deposit intangible asset resulting from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market.

13. Contingencies

Pandemic

The COVID-19 pandemic has created and may continue to create and contribute to significant economic uncertainty and market disruptions. Throughout 2020 and 2021, the volatility created by the pandemic and responses to the pandemic impacted our performance, customers, and the markets we serve. These effects continued to decline into the second quarter of 2022, but there remains a great deal of uncertainty with respect to whether and the degree to which they will have an impact on future conditions and performance.

Based on this uncertainty, it is difficult to predict the extent to which the pandemic may continue to adversely impact our business, results of operations, financial condition, and customers. The potential impacts may include, but are not limited to:

• difficulties encountered by our business customers in addressing the effects of the pandemic may cause increases in loan delinquencies, foreclosures and defaults;

• increases in our allowance for credit losses may be necessary; 

• declines in collateral values may occur;

• third party disruptions may occur, including outages at network providers, on-line banking vendors and other suppliers;

• there is increased cyber and payment fraud risk, as cybercriminals attempt to profit from the disruption, given increased online and remote activity;

• we may experience operational failures due to changes in our normal business practices necessitated by the pandemic and related governmental actions; and/or

• our production and efficiency may suffer due to employee illnesses and/or employees having to work remotely.

Given the ongoing uncertainty with respect to the pandemic, these risk factors may continue to some degree for an unknown period of time.

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NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Economic uncertainty also arises as a result of pressures from rising energy prices, heightened inflation, and concerns over the Russia-Ukraine war. Inflation remains elevated, reflecting supply and demand imbalances  related to,  among other pressures,  the pandemic and higher energy prices, and it exceeded an annual rate of 8.0% in the second quarter of 2022, well above the Federal Reserve Board’s target inflation rate. In June 2022, the Federal Reserve Board also increased short-term interest rates by 75 basis points and indicated that ongoing increases will continue to occur in 2022 in order to combat inflation. Further, the Russia-Ukraine war and related events are likely to create additional pressure on inflation and economic activity. The resulting responses by the U.S. and other countries (including the imposition of economic sanctions), and the potential for wider conflict has increased volatility and uncertainty in global financial markets, and could result in significant market disruptions, including in our customers’ industries or sectors.

The impacts on global economic conditions caused by higher inflation, rising energy prices, the Russia-Ukraine war, and the COVID-19 pandemic have created significant uncertainty about the future economic environment, which will continue to evolve and may continue to impact our business and results in 2022 and in future periods. The extent to which these pressures may impact our business, results of operations, asset valuations, financial condition, and customers will depend on future developments, which continue to be highly uncertain and difficult to predict. Material adverse impacts may include all or a combination of valuation impairments on our intangible assets, securities available for sale, loans, capitalized mortgage loan servicing rights or deferred tax assets.

Certain consumer-driven industries (including restaurants, hotels, retail, fitness, and other industries) have experienced increased stress and have been more adversely impacted by the COVID-19 pandemic and related consumer trends, labor shortages and supply chain disruptions. We believe that the following concentrations within our commercial loan portfolio represent higher potential risk in the current economic environment. The balances below are as of June 30, 2022.

	Amount		% of Total Loans
	(Dollars in millions)
Commercial and industrial portfolio segment:
Retail	$	79		2.4	%
Hotel		42		1.3
Food service		38		1.2
		159		4.9
Commercial real estate portfolio segment:
Retail		111		3.4
Office		74		2.3
Multifamily		56		1.7
		241		7.4
Total	$	400		12.3	%

53

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

At June 30, 2022, we had no commercial loans in forbearance. We continue to closely monitor and analyze the higher risk segments within our portfolio, and senior management is cautiously optimistic that the Company is positioned to continue managing the impact of the varied set of risks and uncertainties currently impacting the global economy. However, a high degree of uncertainty still exists with respect to the impact of the fluid global economic conditions on the future performance of our loan portfolio, including these higher risk segments.

Litigation

We are involved in various litigation matters in the ordinary course of business. At the present time, we do not believe any of these matters will have a significant impact on our interim condensed consolidated financial position or results of operations. The aggregate amount we have accrued for losses we consider probable as a result of these litigation matters is immaterial. However, because of the inherent uncertainty of outcomes from any litigation matter, we believe it is reasonably possible we may incur losses in addition to the amounts we have accrued.  At this time, we estimate the maximum amount of additional losses that are reasonably possible is insignificant.  However, because of a number of factors, including the fact that certain of these litigation matters are still in their early stages, this maximum amount may change in the future.

The litigation matters described in the preceding paragraph primarily include claims that have been brought against us for damages, but do not include litigation matters where we seek to collect amounts owed to us by third parties (such as litigation initiated to collect delinquent loans). These excluded, collection-related matters may involve claims or counterclaims by the opposing party or parties, but we have excluded such matters from the disclosure contained in the preceding paragraph in all cases where we believe the possibility of us paying damages to any opposing party is remote.

Visa Stock

We own 12,566 shares of VISA Class B common stock. At the present time, these shares can only be sold to other Class B shareholders. As a result, there has generally been limited transfer activity in private transactions between buyers and sellers. Given the limited activity that we have become aware of  and the continuing uncertainty regarding the likelihood, ultimate timing and eventual exchange rate for Class B shares into Class A shares, we continue to carry these shares at zero, representing cost basis less impairment. However, given the current conversion ratio of 1.6059 Class A shares for every 1 Class B share and the closing price of VISA Class A shares on July 18, 2022 of $207.21 per share, our 12,566 Class B shares would have a current “value” of approximately $4.2 million. We continue to monitor Class B trading activity and the status of the resolution of certain litigation matters at VISA that would trigger the conversion of Class B common shares into Class A common shares, which would not have any trading restrictions.

54

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

14. Accumulated Other Comprehensive Income (Loss) (“AOCIL”)

A summary of changes in AOCIL follows:

	Unrealized Gains (Losses) on Securities AFS			Unrealized Losses on Securities Transferred to Securities HTM (1)			Dispropor- tionate Tax Effects from Securities AFS			Total
	(In thousands)
For the three months ended June 30, 2022
Balances at beginning of period	$	(48,616	)	$	-		$	(5,798	)	$	(54,414	)
Other comprehensive loss before reclassifications		(10,447	)		(19,870	)		-			(30,317	)
Amounts reclassified from AOCIL		(272	)		-			-			(272	)
Net current period other comprehensive loss		(10,719	)		(19,870	)		-			(30,589	)
Balances at end of period	$	(59,335	)	$	(19,870	)	$	(5,798	)	$	(85,003	)
2021
Balances at beginning of period	$	10,136		$	-		$	(5,798	)	$	4,338
Other comprehensive income before reclassifications		4,078			-			-			4,078
Amounts reclassified from AOCIL		-			-			-			-
Net current period other comprehensive income		4,078			-			-			4,078
Balances at end of period	$	14,214		$	-		$	(5,798	)	$	8,416
For the six months ended June 30, 2022
Balances at beginning of period	$	6,299		$	-		$	(5,798	)	$	501
Other comprehensive loss before reclassifications		(65,417	)		(19,870	)		-			(85,287	)
Amounts reclassified from AOCIL		(217	)		-			-			(217	)
Net current period other comprehensive loss		(65,634	)		(19,870	)		-			(85,504	)
Balances at end of period	$	(59,335	)	$	(19,870	)	$	(5,798	)	$	(85,003	)
2021
Balances at beginning of period	$	15,822		$	-		$	(5,798	)	$	10,024
Other comprehensive loss before reclassifications		(2,727	)		-			-			(2,727	)
Amounts reclassified from AOCIL		1,119			-			-			1,119
Net current period other comprehensive loss		(1,608	)		-			-			(1,608	)
Balances at end of period	$	14,214		$	-		$	(5,798	)	$	8,416

(1) Represents the remaining unrealized loss to be accreted on securities that were transferred from AFS to HTM on April 1, 2022.

55

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The disproportionate tax effects from securities AFS arose due to tax effects of other comprehensive income (“OCI”) in the presence of a valuation allowance against our deferred tax assets and a pretax loss from operations.  Generally, the amount of income tax expense or benefit allocated to operations is determined without regard to the tax effects of other categories of income or loss, such as OCI. However, an exception to the general rule is provided when, in the presence of a valuation allowance against deferred tax assets, there is a pretax loss from operations and pretax income from other categories in the current period.  In such instances, income from other categories must offset the current loss from operations, the tax benefit of such offset being reflected in operations. Release of material disproportionate tax effects from other comprehensive income to earnings is done by the portfolio method whereby the effects will remain in AOCIL as long as we carry a more than inconsequential portfolio of securities AFS.

A summary of reclassifications out of each component of AOCIL for the three months ended June 30 follows:

AOCIL Component	Amount Reclassified From AOCIL			Affected Line Item in Condensed  Consolidated Statements of Operations
	(In thousands)
2022
Unrealized gains (losses) on securities available for sale
	$	(345	)	Net gains (losses) on securities available for sale
		(73	)	Income tax expense
	$	(272	)	Reclassifications, net of tax
2021
Unrealized gains (losses) on securities available for sale
	$	-		Net gains (losses) on securities available for sale
		-		Income tax expense
	$	-		Reclassifications, net of tax

56

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

A summary of reclassifications out of each component of AOCIL for the six months ended June 30 follows:

AOCIL Component	Amount Reclassified From AOCIL			Affected Line Item in Condensed  Consolidated Statements of Operations
	(In thousands)
2022
Unrealized gains (losses) on securities available for sale
	$	(275	)	Net gains (losses) on securities available for sale
		(58	)	Income tax expense
	$	(217	)	Reclassifications, net of tax
2021
Unrealized gains (losses) on securities available for sale
	$	1,416		Net gains (losses) on securities available for sale
		297		Income tax expense
	$	1,119		Reclassifications, net of tax

15. Revenue from Contracts with Customers

We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. We derive the majority of our revenue from financial instruments and their related contractual rights and obligations which for the most part are excluded from the scope of this topic.  These sources of revenue that are excluded from the scope of this topic include interest income, net gains on mortgage loans, net gains (losses) on securities AFS, mortgage loan servicing, net and bank owned life insurance and were approximately 83.4% and 86.6% of total revenues for the three month periods ending June 30, 2022 and 2021, respectively.

Material sources of revenue that are included in the scope of this topic include service charges on deposit accounts, other deposit related income, interchange income and investment and insurance commissions and are discussed in the following paragraphs.  Generally these sources of revenue are earned at the time the service is delivered or over the course of a monthly period and do not result in any contract asset or liability balance at any given period end.  As a result, there were no contract assets or liabilities recorded as of June 30, 2022 and December 31, 2021.

Service charges on deposit accounts and other deposit related income: Revenues are earned on depository accounts for commercial and retail customers and include fees for transaction-based, account maintenance and overdraft services. Transaction-based fees, which includes services such as ATM use fees, stop payment charges and ACH fees are recognized at the time the transaction is executed as that is the time we fulfill our customer’s request.  Account maintenance fees, which includes monthly maintenance services are earned over the course of a month representing the period over which the performance obligation is satisfied. Our obligation for overdraft services is satisfied at the time of the overdraft.

57

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Interchange income: Interchange income primarily includes debit card interchange and network revenues.  Debit card interchange and network revenues are earned on debit card transactions conducted through payment networks such as MasterCard, NYCE (during 2021) and Accel. Interchange income is recognized concurrently with the delivery of services on a daily basis. Interchange and network revenues are presented gross of interchange expenses, which are presented separately as a component of non-interest expense.

Investment and insurance commissions:  Investment and insurance commissions include fees and commissions from asset management, custody, recordkeeping, investment advisory and other services provided to our customers. Revenue is recognized on an accrual basis at the time the services are performed and is generally based on either the market value of the assets managed or the services provided.  We have an agent relationship with a third party provider of these services and net certain direct costs charged by the third party provider associated with providing these services to our customers.

Net (gains) losses on other real estate and repossessed assets:  We record a gain or loss from the sale of other real estate when control of the property transfers to the buyer, which generally occurs at the time of an executed deed.  If we were to finance the sale of other real estate to the buyer, we would assess whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction is probable.  Once these criteria are met, the other real estate asset would be derecognized and the gain or loss on sale would be recorded upon the transfer of control of the property to the buyer.  There were no other real estate properties sold during the three month periods ending June 30, 2022 and 2021 that were financed by us.

58

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Disaggregation of our revenue sources by attribute follows:

Three months ending June 30, 2022
	Service Charges on Deposit Accounts		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	2,499	$	-	$	-	$	-	$	2,499
Account service charges		452		-		-		-		452
ATM fees		-		310		-		-		310
Other		-		237		-		-		237
Business
Overdraft fees		145		-		-		-		145
ATM fees		-		7		-		-		7
Other		-		71		-		-		71
Interchange income		-		-		3,422		-		3,422
Asset management revenue		-		-		-		453		453
Transaction based revenue		-		-		-		229		229
Total	$	3,096	$	625	$	3,422	$	682	$	7,825
Reconciliation to Condensed Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	625
Investment and insurance commissions										682
Bank owned life insurance (1)										105
Other (1)										1,632
Total									$	3,044

(1) Excluded from the scope of ASC Topic 606.

59

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Three months ending June 30, 2021
	Service Charges on Deposit Accounts		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	1,835	$	-	$	-	$	-	$	1,835
Account service charges		331		-		-		-		331
ATM fees		-		213		-		-		213
Other		-		175		-		-		175
Business
Overdraft fees		152		-		-		-		152
ATM fees		-		4		-		-		4
Other		-		70		-		-		70
Interchange income		-		-		3,453		-		3,453
Asset management revenue		-		-		-		401		401
Transaction based revenue		-		-		-		233		233
Total	$	2,318	$	462	$	3,453	$	634	$	6,867
Reconciliation to Condensed Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	462
Investment and insurance commissions										634
Bank owned life insurance (1)										127
Other (1)										648
Total									$	1,871

(1) Excluded from the scope of ASC Topic 606.

60

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Six months ending June 30, 2022
	Service Charges on Deposit Accounts		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	5,005	$	-	$	-	$	-	$	5,005
Account service charges		773		-		-		-		773
ATM fees		-		587		-		-		587
Other		-		488		-		-		488
Business
Overdraft fees		275		-		-		-		275
ATM fees		-		14		-		-		14
Other		-		158		-		-		158
Interchange income		-		-		6,504		-		6,504
Asset management revenue		-		-		-		922		922
Transaction based revenue		-		-		-		498		498
Total	$	6,053	$	1,247	$	6,504	$	1,420	$	15,224
Reconciliation to Condensed Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	1,247
Investment and insurance commissions										1,420
Bank owned life insurance (1)										243
Other (1)										2,497
Total									$	5,407

(1) Excluded from the scope of ASC Topic 606.

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NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Six months ending June 30, 2021
	Service Charges on Deposit Accounts		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	3,047	$	-	$	-	$	-	$	3,047
Account service charges		843		-		-		-		843
ATM fees		-		481		-		-		481
Other		-		373		-		-		373
Business
Overdraft fees		344		-		-		-		344
ATM fees		-		10		-		-		10
Other		-		159		-		-		159
Interchange income		-		-		6,502		-		6,502
Asset management revenue		-		-		-		783		783
Transaction based revenue		-		-		-		434		434
Total	$	4,234	$	1,023	$	6,502	$	1,217	$	12,976
Reconciliation to Condensed Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	1,023
Investment and insurance commissions										1,217
Bank owned life insurance (1)										266
Other (1)										1,395
Total									$	3,901

(1) Excluded from the scope of ASC Topic 606.

16. Leases

We have entered into leases in the normal course of business primarily for office facilities, some of which include renewal options and escalation clauses.  Certain leases also include both lease components (fixed payments including rent, taxes and insurance costs) and non-lease components (common area or other maintenance costs) which are accounted for as a single lease component as we have elected the practical expedient to group lease and non-lease components together for all leases.  We have also elected not to recognize leases with original lease terms of 12 months or less (short-term leases) on our Condensed Consolidated Statements of Financial Condition.  Most of our leases include one or more options to renew. The exercise of lease renewal options is typically at our sole discretion and are included in our right of use (“ROU”) assets and lease liabilities if they are reasonably certain of exercise.

Leases are classified as operating or finance leases at the lease commencement date (we did not have any finance leases as of June 30, 2022). Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term. The ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of the lease payment over the lease term.

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NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.

The cost components of our operating leases follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)				(In thousands)
Operating lease cost	$	408	$	412	$	823	$	835
Variable lease cost		25		15		41		31
Short-term lease cost		19		16		37		30
Total	$	452	$	443	$	901	$	896

Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for our leased facilities.

Supplemental balance sheet information related to our operating leases follows:

	June 30, 2022			December 31, 2021
	(Dollars in thousands)
Lease right of use asset (1)	$	5,959		$	6,481
Lease liabilities (2)	$	6,062		$	6,602
Weighted average remaining lease term (years)		6.31			6.50
Weighted average discount rate		2.3	%		2.3	%

(1) Included in Accrued income and other assets in our Condensed Consolidated Statements of Financial Condition.

(2) Included in Accrued expenses and other liabilities in our Condensed Consolidated Statements of Financial Condition.

Maturity analysis of our lease liabilities at June 30, 2022 based on required contractual payments follows:

	(In thousands)
Six months ending December 31, 2022	$	789
2023		1,400
2024		871
2025		865
2026		801
2027 and thereafter		1,826
Total lease payments		6,552
Less imputed interest		(490	)
Total	$	6,062

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Item 2.

Management’s Discussion and Analysis

of Financial Condition and Results of Operations

Introduction. The following section presents additional information to assess the financial condition and results of operations of Independent Bank Corporation (“IBCP”), its wholly-owned bank, Independent Bank (the “Bank”), and their subsidiaries. This section should be read in conjunction with the Condensed Consolidated Financial Statements. We also encourage you to read our 2021 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”). That report includes a list of risk factors that you should consider in connection with any decision to buy or sell our securities.

Overview. We provide banking services to customers located primarily in Michigan’s Lower Peninsula. We also have two loan production offices in Ohio (Columbus and Fairlawn). As a result, our success depends to a great extent upon the economic conditions in Michigan’s Lower Peninsula.

Recent Developments. The COVID-19 pandemic has created and may continue to create and contribute to significant economic uncertainty and market disruptions. Throughout 2020 and 2021, the volatility created by the pandemic and responses to the pandemic impacted our performance, customers, and the markets we serve. These effects continued to decline into the second quarter of 2022, but there remains a great deal of uncertainty with respect to whether and the degree to which they will have an impact on future conditions and performance.

Based on this uncertainty, it is difficult to predict the extent to which the pandemic may continue to adversely impact our business, results of operations, financial condition, and customers. The potential impacts may include, but are not limited to:

• difficulties encountered by our business customers in addressing the effects of the pandemic may cause increases in loan delinquencies, foreclosures and defaults;

• increases in our allowance for credit losses may be necessary;

• declines in collateral values may occur;

• third party disruptions may occur, including outages at network providers, on-line banking vendors and other suppliers;

• there is increased cyber and payment fraud risk, as cybercriminals attempt to profit from the disruption, given increased online and remote activity;

• we may experience operational failures due to changes in our normal business practices necessitated by the pandemic and related governmental actions; and/or

• our production and efficiency may suffer due to employee illnesses and/or employees having to work remotely.

Given the ongoing uncertainty with respect to the pandemic, these risk factors may continue to some degree for an unknown period of time.

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Economic uncertainty also arises as a result of pressures from rising energy prices, heightened inflation, and concerns over the Russia-Ukraine war. Inflation remains elevated, reflecting supply and demand imbalances related to, among other pressures, the pandemic and higher energy prices, and it exceeded an annual rate of 8.0% in the second quarter of 2022, well above the Federal Reserve Board’s target inflation rate. In June 2022, the Federal Reserve Board also increased short-term interest rates by 75 basis points and indicated that ongoing increases will continue to occur in 2022 in order to combat inflation. Further, the Russia-Ukraine war and related events are likely to create additional pressure on inflation and economic activity. The resulting responses by the U.S. and other countries (including the imposition of economic sanctions), and the potential for wider conflict has increased volatility and uncertainty in global financial markets, and could result in significant market disruptions, including in our customers’ industries or sectors.

The impacts on global economic conditions caused by higher inflation, rising energy prices, the Russia-Ukraine war, and the COVID-19 pandemic have created significant uncertainty about the future economic environment, which will continue to evolve and may continue to impact our business and results in 2022 and in future periods. The extent to which these pressures may impact our business, results of operations, asset valuations, financial condition, and customers will depend on future developments, which continue to be highly uncertain and difficult to predict. Material adverse impacts may include all or a combination of valuation impairments on our intangible assets, securities available for sale (“AFS”), loans, capitalized mortgage loan servicing rights or deferred tax assets.

It is against this backdrop that we discuss our results of operations and financial condition in the first two quarters of 2022 as compared to earlier periods.

Results of Operations

Summary.  We recorded net income of $13.0 million and $12.4 million during the three months ended June 30, 2022 and 2021, respectively. The increase in 2022 second quarter results as compared to 2021 is primarily due to an increase in net-interest income and a decrease in non-interest expense that were partially offset by a decrease in non-interest income and increases in the provision for credit losses and income tax expense.

We recorded net income of $31.0 million and $34.4 million during the six months ended June 30, 2022 and 2021, respectively.  The decrease in 2022 year-to-date results as compared to 2021 is primarily due to increases in non-interest expense and the provision for credit losses and a decrease in non-interest income that was partially offset by an increase in net-interest income and a decrease in income tax expense.

Key performance ratios

	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021
Net income (annualized) to
Average assets		1.10	%		1.12	%		1.31	%		1.60	%
Average shareholders’ equity		15.68	%		12.78	%		17.49	%		18.06	%
Net income per common share
Basic	$	0.62		$	0.57		$	1.47		$	1.58
Diluted		0.61			0.56			1.45			1.56

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Net interest income.  Net interest income is the most important source of our earnings and thus is critical in evaluating our results of operations. Changes in our net interest income are primarily influenced by our level of interest-earning assets and the income or yield that we earn on those assets and the manner and cost of funding our interest-earning assets. Certain macro-economic factors can also influence our net interest income such as the level and direction of interest rates, the difference between short-term and long-term interest rates (the steepness of the yield curve) and the general strength of the economies in which we are doing business. Finally, risk management plays an important role in our level of net interest income. The ineffective management of credit risk and interest-rate risk in particular can adversely impact our net interest income.

Our net interest income totaled $36.1 million during the second quarter of 2022, an increase of $4.7 million, or 14.9% from the year-ago period. This increase primarily reflects a $270.1 million increase in average interest-earning assets as well as a 24 basis point increase in our tax equivalent net interest income as a percent of average interest-earning assets (the “net interest margin”).

For the first six months of 2022, net interest income totaled $69.1 million, an increase of $7.4 million, or 12.0% from 2021.  This increase primarily reflects a $357.0 million increase in average interest-earning assets and a nine basis point increase in our net interest margin.

The increase in average interest-earning assets in 2022 as compared to 2021 primarily reflects growth in commercial, mortgage and installment loans funded from an increase in deposits.

Interest and fees on loans include $0.2 million and $0.8 million of accretion of net loan fees on PPP loans in the second quarter and first six months of 2022, respectively, compared to $1.8 million and $3.9 million for the second quarter and first six months of 2021, respectively. Interest and fees on loans also include $0.1 million and $0.2 million for the second quarter and first six months of 2022, respectively, and include $0.2 million and $0.6 million for the second quarter and six months of 2021, respectively of accretion of the discount recorded on loans acquired in the April 2018 acquisition of Traverse City State Bank (“TCSB”).

Our net interest income is also impacted by our level of non-accrual loans. In the second quarter and first six months of 2022, non-accrual loans averaged $4.9 million and $5.0 million, respectively. In the second quarter and first six months of 2021, non-accrual loans averaged $6.1 million and $7.0 million, respectively. In addition, in the second quarter and first six months of 2022 we had net recoveries of $0.23 million and $0.37 million, respectively of unpaid interest on loans placed on or taken off non-accrual or on loans previously charged-off compared to net recoveries of $0.43 million and $0.60 million, respectively, during the same periods in 2021.

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Average Balances and Tax Equivalent Rates

	Three Months Ended June 30,
	2022							2021
	Average Balance		Interest		Rate (2)			Average Balance		Interest
												Rate (2)
	(Dollars in thousands)
Assets
Taxable loans	$	3,137,369	$	31,383		4.01	%	$	2,852,972	$	28,026		3.94	%
Tax-exempt loans (1)		7,726		90		4.67			6,572		82		5.00
Taxable securities available for sale		966,146		4,950		2.05			908,622		3,656		1.61
Tax-exempt securities available for sale(1)		346,788		2,208		2.55			365,934		2,005		2.19
Interest bearing cash		18,032		29		0.65			71,043		22		0.12
Other investments		17,653		185		4.20			18,427		186		4.05
Interest Earning Assets		4,493,714		38,845		3.47			4,223,570		33,977		3.22
Cash and due from banks		58,497							54,120
Other assets, net		206,749							157,070
Total Assets	$	4,758,960						$	4,434,760
Liabilities
Savings and interest-
bearing checking	$	2,534,242		788		0.12		$	2,260,172		689		0.12
Time deposits		354,209		428		0.48			305,390		453		0.59
Other borrowings		116,652		1,087		3.74			108,863		964		3.55
Interest Bearing Liabilities		3,005,103		2,303		0.31			2,674,425		2,106		0.32
Non-interest bearing deposits		1,332,596							1,314,153
Other liabilities		88,651							57,402
Shareholders’ equity		332,610							388,780
Total liabilities and shareholders’ equity	$	4,758,960						$	4,434,760
Net Interest Income			$	36,542						$	31,871
Net Interest Income as a Percent of Average Interest Earning Assets						3.26	%						3.02	%

(1) Interest on tax-exempt loans and securities available for sale is presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.

(2) Annualized

67

Average Balances and Tax Equivalent Rates

	Six Months Ended June 30,
	2022							2021
	Average Balance		Interest		Rate (2)			Average Balance		Interest		Rate (2)
	(Dollars in thousands)
Assets
Taxable loans	$	3,054,925	$	59,723		3.93	%	$	2,840,224	$	56,065		3.98	%
Tax-exempt loans (1)		8,127		189		4.69			6,624		166		5.07
Taxable securities available for sale		1,022,884		9,502		1.86			845,895		6,452		1.52
Tax-exempt securities available for sale(1)		336,935		4,223		2.51			338,692		3,775		2.22
Interest bearing cash		52,483		66		0.25			86,384		51		0.12
Other investments		17,884		365		4.12			18,427		374		4.10
Interest Earning Assets		4,493,238		74,068		3.31			4,136,246		66,883		3.25
Cash and due from banks		58,586							55,239
Other assets, net		188,381							153,540
Total Assets	$	4,740,205						$	4,345,025
Liabilities
Savings and interest-
bearing checking	$	2,518,714		1,429		0.11		$	2,200,620		1,364		0.13
Time deposits		346,326		554		0.32			322,535		1,034		0.65
Other borrowings		112,831		2,060		3.68			108,844		1,926		3.58
Interest Bearing Liabilities		2,977,871		4,043		0.27			2,631,999		4,324		0.33
Non-interest bearing deposits		1,324,922							1,266,607
Other liabilities		83,222							61,950
Shareholders’ equity		354,190							384,469
Total liabilities and shareholders’ equity	$	4,740,205						$	4,345,025
Net Interest Income			$	70,025						$	62,559
Net Interest Income as a Percent of Average Interest Earning Assets						3.13	%						3.04	%

(1) Interest on tax-exempt loans and securities available for sale is presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.

(2) Annualized

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Reconciliation of Non-GAAP Financial Measures

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
	(Dollars in thousands)
Net Interest Margin, Fully Taxable Equivalent ("FTE")
Net interest income	$	36,061		$	31,393		$	69,062		$	61,677
Add:  taxable equivalent adjustment		481			478			963			882
Net interest income - taxable equivalent	$	36,542		$	31,871		$	70,025		$	62,559
Net interest margin (GAAP) (1)		3.21	%		2.98	%		3.09	%		3.00	%
Net interest margin (FTE) (1)		3.26	%		3.02	%		3.13	%		3.04	%

(1) Annualized.

Provision for credit losses.  The provision for credit losses was an expense of $2.4 million and a credit of $1.4 million for the three months ended June 30, 2022 and 2021, respectively. During the six-month periods ended June 30, 2022 and 2021, the provision for credit losses was an expense of $0.8 million and an credit of $1.9 million, respectively. The provision reflects our assessment of the allowance for credit losses (the “ACL”) taking into consideration factors such as loan growth, loan mix, levels of non-performing and classified loans, economic conditions and loan net charge-offs. While we use relevant information to recognize losses on loans, additional provisions for related losses may be necessary based on changes in economic conditions, customer circumstances and other credit risk factors. See “Portfolio Loans and asset quality” for a discussion of the various components of the ACL and their impact on the provision for credit losses in 2022. See note #13 to the Condensed Consolidated Financial Statements included within this report for a discussion on industry concentrations. The increase in the provision for credit losses expense from the prior year period is primarily due to an increase in the adjustment to allocations based on the pooled reserves due in part to loan growth that was partially offset by a decrease in the adjustment to subjective factors due in part to expected reduction in risk related to COVID-19.

Non-interest income.  Non-interest income is a significant element in assessing our results of operations. Non-interest income totaled $14.6 million during the second quarter of 2022 compared to $14.8 million in the second quarter of 2021. For the first six months of 2022, non-interest income totaled $33.6 million compared to $41.2 million for the first six months of 2021.

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The components of non-interest income are as follows:

Non-Interest Income

	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021
	(In thousands)
Interchange income	$	3,422		$	3,453		$	6,504		$	6,502
Service charges on deposit accounts		3,096			2,318			6,053			4,234
Net gains on assets
Mortgage loans		1,253			9,091			2,088			21,919
Securities		(345	)		-			(275	)		1,416
Mortgage loan servicing, net		4,162			(1,962	)		13,803			3,205
Investment and insurance commissions		682			634			1,420			1,217
Bank owned life insurance		105			127			243			266
Other		2,257			1,110			3,744			2,418
Total non-interest income	$	14,632		$	14,771		$	33,580		$	41,177

Service charges on deposit accounts increased on a comparative quarterly and year-to-date basis in 2022 as compared to 2021. The quarterly and year-to-date increases were principally due to increases in non-sufficient funds occurrences (and related fees).

As reflected in the table below, net gains on the sale of mortgage loans dropped significantly on both a quarterly and a year-to-date basis in 2022 compared to 2021. Mortgage loan activity is summarized as follows:

Mortgage Loan Activity

	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021
	(Dollars in thousands)
Mortgage loans originated	$	317,683		$	473,742		$	587,877		$	982,745
Mortgage loans sold		142,977			306,789			364,702			684,207
Net gains on mortgage loans		1,253			9,091			2,088			21,919
Net gains as a percent of mortgage loans sold  ("Loan Sales Margin")		0.88	%		2.96	%		0.57	%		3.20	%
Fair value adjustments included in the Loan Sales Margin		(0.27	)		(0.08	)		(1.24	)		(0.57	)

Mortgage loans originated decreased in 2022 as compared to 2021 due primarily to a decrease in mortgage loan refinance volumes. Mortgage loan refinance volumes declined in the second quarter of 2022 as compared to 2021 as higher mortgage loan interest rates in 2022 reduced this activity. Mortgage loans sold decreased in the second quarter of 2022 as compared to 2021 due primarily to lower loan origination volume. Net gains on mortgage loans decreased in 2022 as compared to 2021 due to the decline in loan sale volume, a decrease in the Loan Sales Margin and fair value adjustments as discussed below.

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The volume of loans sold is dependent upon our ability to originate mortgage loans as well as the demand for fixed-rate obligations and other loans that we choose to not put into portfolio because of our established interest-rate risk parameters. (See “Portfolio Loans and asset quality.”) Net gains on mortgage loans are also dependent upon economic and competitive factors as well as our ability to effectively manage exposure to changes in interest rates and thus can often be a volatile part of our overall revenues.

Our Loan Sales Margin is impacted by several factors including competition and the manner in which the loan is sold. Net gains on mortgage loans are also impacted by recording fair value accounting adjustments. Excluding these fair value accounting adjustments, the Loan Sales Margin would have been 1.15% and 3.04% in the second quarters of 2022 and 2021, respectively, and 1.81% and 3.77% for the comparative 2022 and 2021 year-to-date periods, respectively. The decline in the Loan Sales Margin (excluding fair value adjustments) in the second quarter of 2022 was generally due to lower primary-to-secondary market pricing spreads as market interest rates rose in 2022 (relative to 2021) which were impacted by the decrease in salable mortgage loan volumes.

We recorded a $0.35 million net loss and no net gains on securities AFS in the comparative quarterly periods, respectively. We recorded a net loss of $0.28 million and a net gain $1.42 million on securities AFS for the first six months of 2022 and 2021, respectively. We recorded no credit related charges in either 2022 or 2021 on securities AFS. See “Securities” below and note #3 to the Condensed Consolidated Financial Statements.

Mortgage loan servicing, net, generated income of $4.2 million and a loss of $2.0 million in the second quarters of 2022 and 2021, respectively. For the first six months of 2022 and 2021, mortgage loan servicing, net, generated income of $13.8 million and $3.2 million, respectively.  The significant variances in mortgage loan servicing, net are primarily due to changes in the fair value of capitalized mortgage loan servicing rights associated with changes in mortgage loan interest rates and the associated expected future prepayment levels.

Mortgage loan servicing, net activity is summarized in the following table:

Mortgage Servicing Revenue

	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021
Mortgage loan servicing	(In thousands)
Revenue, net	$	2,124		$	1,876		$	4,207		$	3,786
Fair value change due to price		3,120			(2,426	)		11,572			2,214
Fair value change due to pay-downs		(1,082	)		(1,412	)		(1,976	)		(2,795	)
Total	$	4,162		$	(1,962	)	$	13,803		$	3,205

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Activity related to capitalized mortgage loan servicing rights is as follows:

Capitalized Mortgage Loan Servicing Rights

	Three months ended June 30,					Six months ended June 30,
	2022		2021			2022		2021
	(In thousands)
Balance at beginning of period	$	35,933	$	23,530		$	26,232	$	16,904
Originated servicing rights capitalized		1,506		2,739			3,649		6,108
Change in fair value		2,038		(3,838	)		9,596		(581	)
Balance at end of period	$	39,477	$	22,431		$	39,477	$	22,431

At June 30, 2022 we were servicing approximately $3.45 billion in mortgage loans for others on which servicing rights have been capitalized. This servicing portfolio had a weighted average coupon rate of 3.48% and a weighted average service fee of approximately 25.6 basis points. Capitalized mortgage loan servicing rights at June 30, 2022 totaled $39.5 million, representing approximately 114.6 basis points on the related amount of mortgage loans serviced for others.

Investment and insurance commissions represent revenues generated on the sale or management of investments and insurance for our customers. These revenues increased on both a quarterly and year-to-date basis in 2022 as compared to 2021, primarily due to growth in assets under management and in annuity sales (reflecting customers seeking alternatives to traditional fixed income products such as time deposits given the prolonged low interest rate environment).

Other non-interest income increased on both a comparative quarterly and year-to-date basis in 2022 as compared to 2021 due primarily to the gain sale of bank owned property of $0.9 million.

Non-interest expense.  Non-interest expense is an important component of our results of operations. We strive to efficiently manage our cost structure.

Non-interest expense decreased by $0.1 million to $32.4 million and increased by $1.3 million to $63.9 million during the three- and six-month periods ended June 30, 2022, respectively, compared to the same periods in 2021.

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The components of non-interest expense are as follows:

Non-Interest Expense

	Three months ended June 30,					Six months ended June 30,
	2022			2021		2022			2021
	(In thousands)
Compensation	$	12,533		$	11,136	$	24,968		$	21,257
Performance-based compensation		3,776			4,783		7,438			9,075
Payroll taxes and employee benefits		3,573			3,964		7,606			8,073
Compensation and employee benefits		19,882			19,883		40,012			38,405
Data processing		2,644			2,576		4,860			4,950
Occupancy, net		2,077			2,153		4,620			4,496
Interchange expense		1,262			1,201		2,273			2,149
Furniture, fixtures and equipment		1,042			1,034		2,087			2,037
Communications		762			777		1,519			1,658
Advertising		560			164		1,240			653
Loan and collection		647			859		1,206			1,618
FDIC deposit insurance		457			307		979			637
Legal and professional		479			522		972			1,021
Amortization of intangible assets		233			243		465			485
Costs (recoveries) related to unfunded lending commitments		649			26		294			(6	)
Supplies		161			170		284			344
Correspondent bank service fees		80			115		157			215
Conversion related expenses		6			1,143		50			1,361
Provision for loss reimbursement on sold loans		12			25		45			59
Net (gains) on other real estate and repossessed assets		(141	)		6		(196	)		(174	)
Other		1,622			1,332		3,017			2,649
Total non-interest expense	$	32,434		$	32,536	$	63,884		$	62,557

Compensation and employee benefits expenses, in total, was unchanged on a quarterly comparative basis and increased $1.6 million for the first six months of 2022 compared to the same periods in 2021.

Compensation expense increased by $1.4 million and $3.7 million in the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.  These comparative increases in 2022 were primarily due to (a) salary increases that were predominantly effective on January 1, 2022, (b) a decreased level of compensation that was deferred as direct origination costs  due to lower mortgage loan origination volume, and (c) an increase in lending personnel.

Performance-based compensation decreased by $1.0 million and $1.6 million in the second quarter and first six months of 2022, respectively, compared to the same periods in 2021. The decreases are primarily due to a decrease in mortgage lending related incentives attributed to the decline in mortgage lending volume.

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Payroll taxes and employee benefits decreased by $0.4 million and $0.5 million in the second quarter and first six months of 2022, respectively, compared to the same periods in 2021, due primarily to decreases in payroll taxes (reflecting lower performance-based compensation costs), our 401(k) plan match and other indirect costs related to mortgage lending that were partially offset by higher health care costs (due to increased claims in 2022).

Data processing, occupancy, net, furniture, fixtures and equipment, communications, legal and professional, amortization of intangible assets, supplies, correspondent bank service fees and provision for loss reimbursement on sold loans were each substantially the same on a comparative quarterly and year-to-date basis in 2022 as compared to 2021.

Interchange expense primarily represents our third-party cost to process debit card transactions. The increase in this expense on both a comparative quarterly and year-to-date basis in 2022 as compared to 2021 is due principally to changes in transaction volume and transaction channel mix.

Advertising expense increased by approximately $0.4 million and $0.6 million in the second quarter and first six months of 2022, respectively, as compared to the same periods in 2021 due primarily due to a one-time marketing expense reimbursement from our third party card provider in the prior year.

Loan and collection expense decreased $0.2 million and $0.4 million in the second quarter and first six months of 2022, respectively, as compared to the same periods in 2021 due to recoveries of previously expensed amounts (year to date period), an increase in the deferral of certain loan origination costs as well as lower other real estate holding costs.

FDIC deposit insurance expense increased in 2022 on both a comparative quarterly and year-to-date basis as compared to 2021, due primarily to an increases in the assessment rate as well as the assessment base.

Costs (recoveries) related to unfunded lending commitments increased $0.6 million and $0.3 million in the second quarter and first six months of 2022, respectively, compared to the same prior year periods due primarily to changes in the amounts of such commitments to originate portfolio loans as well as (for commercial loan commitments) the grade (pursuant to our loan rating system) of such commitments.

Conversion related expenses declined as our conversion occurred during the second quarter of 2021 during which time we incurred a significant portion of related expense.

Net gains on other real estate and repossessed assets primarily represent the net gain on the sale or additional write downs on these assets subsequent to the transfer of the asset from our loan portfolio. This transfer occurs at the time we acquire the collateral that secured the loan. At the time of acquisition, the other real estate or repossessed asset is valued at fair value, less estimated costs to sell, which becomes the new basis for the asset. Any write-downs at the time of acquisition are charged to the allowance for credit losses.

Other expense increased $0.3 million and $0.4 million in the second quarter and first six months of 2022, respectively, as compared to the same periods in 2021 due in part to an increase in travel and entertainment related expenses (due in part to further easing of COVID-19 related restrictions as well as a general increase in the cost of such expenses).

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Income tax expense. We recorded an income tax expense of $2.9 million and $7.0 million in the second quarter and the first six months of 2022, respectively. This compares to an income tax expense of $2.7 million and $7.8 million in the second quarter and the first six months of 2021, respectively.  The decrease in expense for the first six months of 2022 compared to the same period in 2021 is primarily due to a decrease in pretax income.

Our actual income tax expense is different than the amount computed by applying our statutory income tax rate to our income before income tax primarily due to tax-exempt interest income, tax-exempt income from the increase in the cash surrender value on life insurance, and differences in the value of stock awards that vest and stock options that are exercised as compared to the initial fair values that were expensed.

We assess whether a valuation allowance should be established against our deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. The ultimate realization of this asset is primarily based on generating future income. We concluded at June 30, 2022 and 2021 and at December 31, 2021 that the realization of substantially all of our deferred tax assets continues to be more likely than not.

Financial Condition

Summary. Our total assets increased by $121.5 million during the first six months of 2022. Loans, excluding loans held for sale, were $3.26 billion at June 30, 2022, compared to $2.91 billion at December 31, 2021. Commercial loans, mortgage loans and installment loans each increased during the first six months of 2022. (See “Portfolio Loans and asset quality.”)

Deposits totaled $4.29 billion at June 30, 2022, an increase of $173.5 million from December 31, 2021 as all deposit types increased.  The increase in deposits from December 31, 2021 is due in part to the seasonal cash management needs of our business and municipal customers. Overall deposit balances remain elevated, relative to historical levels, due to the significant liquidity that has been injected into the economy through government programs, such as the PPP, as well as by monetary actions by the Federal Reserve Bank, all in response to the COVID-19 pandemic.

As the various government stimulus programs in response to the COVID-19 pandemic end or taper, it is unclear what the impact will be on our levels of Portfolio Loans and deposits. However, our liquidity and funding contingency plans take into account the possibility of reductions in commercial loans and deposits during 2022.

Securities. We maintain diversified securities portfolios, which include obligations of U.S. government-sponsored agencies, securities issued by states and political subdivisions, residential and commercial mortgage-backed securities, asset-backed securities, corporate securities, trust preferred securities and foreign government securities (that are denominated in U.S. dollars). We regularly evaluate asset/liability management needs and attempt to maintain a portfolio structure that provides sufficient liquidity and cash flow.

We believe that the unrealized losses on securities AFS are temporary in nature and are expected to be recovered within a reasonable time period. We believe that we have the ability to hold securities with unrealized losses to maturity or until such time as the unrealized losses reverse.(See “Asset/liability management.”)

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On April 1, 2022, we transferred certain securities AFS with an amortized cost and unrealized loss at the date of transfer of $418.1 million and $26.5 million, respectively to securities held to maturity (“HTM”).  The transfer was made at fair value, with the unrealized loss becoming part of the purchase discount which will be accreted over the remaining life of the securities.  The other comprehensive loss component is separated from the remaining available for sale securities and is accreted over the remaining life of the securities transferred.  We have the ability and intent to hold these securities until they mature, at which time we will receive full value for these securities.

Securities Available for Sale

	Amortized Cost		Unrealized				Fair Value
			Gains		Losses
Securities available for sale	(In thousands)
June 30, 2022	$	934,815	$	409	$	75,520	$	859,704
December 31, 2021		1,404,858		16,594		8,622		1,412,830

Securities Held to Maturity

	Carrying Value		Transfered Unrealized Loss (1)		ACL		Amortized Cost		Unrealized				Fair Value
									Gains		Losses
	(In thousands)
Securities held to maturity
June 30, 2022	$	381,608	$	25,151	$	158	$	406,917	$	51	$	47,267	$	359,701
December 31, 2021		-		-		-		-		-		-		-

(1) Represents the remaining unrealized loss to be accreted on secruties that were transfered from AFS to HTM on April 1, 2022.

Securities AFS in unrealized loss positions are evaluated quarterly for impairment related to credit losses. For securities AFS in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For securities AFS that do not meet this criteria, we evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, adverse conditions specifically related to the security and the issuer and the impact of changes in market interest rates on the market value of the security, among other factors. If this assessment indicates that a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an ACL is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income (loss), net of applicable taxes. No ACL for securities AFS was needed at June 30, 2022.  The increase in unrealized losses during the second quarter and first six months of 2022 is primarily attributed to an increase in interest rates since December 31, 2021.  See note #3 to the Condensed Consolidated Financial Statements included within this report for further discussion.

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For securities HTM an ACL is maintained at a level which represents our best estimate of expected credit losses. This ACL is a contra asset valuation account that is deducted from the carrying amount of securities HTM to present the net amount expected to be collected. Securities HTM are charged off against the ACL when deemed uncollectible. Adjustments to the ACL are reported in our Condensed Consolidated Statements of Operations in provision for credit loss. We measure expected credit losses on securities HTM on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. With regard to U.S. Government-sponsored agency and mortgage-backed securities (residential and commercial), all these securities are issued by a U.S. government-sponsored entity and have an implicit or explicit government guarantee; therefore, no allowance for credit losses has been recorded for these securities. With regard to obligations of states and political subdivisions, private label-mortgage-backed, corporate and trust preferred securities HTM, we consider (1) issuer bond ratings, (2) historical loss rates for given bond ratings, (3) the financial condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities. See note #3 to the Condensed Consolidated Financial Statements included within this report for further discussion.

Sales of securities were as follows (See “Non-interest income.”):

Sales of Securities

	Three months ended June 30,					Six months ended June 30,
	2022			2021		2022			2021
	(in thousands)					(In thousands)
Proceeds	$	66,128		$	3,000	$	70,523		$	81,178
Gross gains		94			2		164			1,466
Gross losses		439			2		439			50
Net gains (losses)	$	(345	)	$	-	$	(275	)	$	1,416

Portfolio Loans and asset quality. In addition to the communities served by our Bank branch and loan production office network, our principal lending markets also include nearby communities and metropolitan areas. Subject to established underwriting criteria, we also may participate in commercial lending transactions with certain non-affiliated banks and make whole loan purchases from other financial institutions.

The senior management and board of directors of our Bank retain authority and responsibility for credit decisions and we have adopted uniform underwriting standards. Our loan committee structure and the loan review process attempt to provide requisite controls and promote compliance with such established underwriting standards. However, there can be no assurance that our lending procedures and the use of uniform underwriting standards will prevent us from incurring significant credit losses in our lending activities.

We generally retain loans that may be profitably funded within established risk parameters. (See “Asset/liability management.”) As a result, we may hold adjustable-rate conventional and fixed rate jumbo mortgage loans as Portfolio Loans, while 15- and 30-year fixed-rate non-jumbo mortgage loans are generally sold to mitigate exposure to changes in interest rates. (See “Non-interest income.”) Due primarily to the expansion of our mortgage-banking activities and a change in mix in our mortgage loan originations, we are now originating and putting into Portfolio Loans more fixed rate mortgage loans as compared to past periods. These fixed rate mortgage loans generally have terms from 15 to 30 years, do not have prepayment penalties and expose us to more interest rate risk. (See “Asset/liability management.”).

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The PPP, is a short-term, forgivable loan program primarily intended to help businesses impacted by COVID-19 to continue paying their employees. See note #4 to the Condensed Consolidated Financial Statements included within this report for further discussion of the PPP.

A summary of our participation in the PPP (which ended on May 31, 2021 for new loans) follows:

Paycheck Protection Program Activity

	June 30, 2022				June 30, 2021
	Amount (#)		Amount		Amount (#)		Amount
	(Dollars in thousands)
Closed and outstanding at quarter end		2	$	258		1,707	$	171,888
Net fees accreted into interest income for the quarter		n/a		188		n/a		1,813
Net fees accreted into interest income year-to-date		n/a		804		n/a		3,895
Unaccreted net fees remaining at quarter end		n/a		-		n/a		5,810

During 2020, Section 4013 of the CARES Act provided temporary relief from the accounting and reporting requirements for TDRs regarding certain loan modifications for our customers. Section 4013 specified that COVID-19 related modifications on loans that were current (less than 30 days past due) as of December 31, 2019 are not TDRs. While the provisions of Section 4013 were in place, we assisted both our retail (mortgage and installment loans) and our commercial borrowers with accommodations that included reduced or suspended payments. Since the expiration of Section 4013 on January 1, 2022, we moved certain accommodation loans to non-accrual which totaled $0.4 million at June 30, 2022.  Total remaining accommodation loans were $1.2 million and $2.3 million at June 30, 2022 and December 31, 2021, respectively. See note #4 to the Condensed Consolidated Financial Statements included within this report.

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A summary of our Portfolio Loans follows:

	June 30, 2022		December 31, 2021
	(In thousands)
Real estate(1)
Residential first mortgages	$	681,631	$	870,169
Residential home equity and other junior mortgages		137,553		128,801
Construction and land development		277,205		278,992
Other(2)		814,695		726,224
Consumer		639,359		555,696
Commercial		403,430		339,785
Agricultural		4,977		5,378
Total loans	$	2,958,850	$	2,905,045

(1) Includes both residential and non-residential commercial loans secured by real estate.

(2) Includes loans secured by multi-family residential and non-farm, non-residential property.

Non-performing assets ⁽¹⁾

	June 30, 2022			December 31, 2021
	(Dollars in thousands)
Non-accrual loans	$	5,859		$	5,545
Loans 90 days or more past due and still accruing interest		-			-
Subtotal		5,859			5,545
Less:  Government guaranteed loans		1,360			435
Total non-performing loans		4,499			5,110
Other real estate and repossessed assets		508			245
Total non-performing assets	$	5,007		$	5,355
As a percent of Portfolio Loans
Non-performing loans		0.14	%		0.18
Allowance for credit losses		1.47			1.63
Non-performing assets to total assets		0.10			0.11
Allowance for credit losses as a percent of non-performing loans		1,064.30			924.70

⁽¹⁾  Excludes loans classified as "troubled debt restructured" that are not past due.

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  Troubled debt restructurings ("TDR")

	June 30, 2022
	Commercial		Retail (1)			Total
	(In thousands)
Performing TDR's	$	3,266	$	28,580		$	31,846
Non-performing TDR's (2)		-		1,164	(3)		1,164
Total	$	3,266	$	29,744		$	33,010

	December 31, 2021
	Commercial		Retail (1)			Total
	(In thousands)
Performing TDR's	$	4,481	$	31,589		$	36,070
Non-performing TDR's (2)		-		1,016	(3)		1,016
Total	$	4,481	$	32,605		$	37,086

(1) Retail loans include mortgage and installment loan portfolio segments.

(2) Included in non-performing assets table above.

(3) Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis.

Non-performing loans decreased by $0.6 million since year-end 2021, reflecting improving economic conditions and our ongoing collection efforts. Our collection and resolution efforts have generally resulted in a positive trend in non-performing loans.

Non-performing loans exclude performing loans that are classified as TDRs. Performing TDRs totaled $31.8 million, or 1.0% of total Portfolio Loans, and $36.1 million, or 1.2% of total Portfolio Loans, at June 30, 2022 and December 31, 2021, respectively. The decrease in the amount of performing TDRs in the first six months of 2022 reflects a decrease in both commercial and retail performing TDRs.

Other real estate and repossessed assets totaled $0.5 million and $0.2 million at June 30, 2022, and December 31, 2021, respectively.

We will place a loan that is 90 days or more past due on non-accrual, unless we believe the loan is both well secured and in the process of collection. Accordingly, we have determined that the collection of the accrued and unpaid interest on any loans that are 90 days or more past due and still accruing interest is probable.

The following tables reflect activity in our ACL on loans and ACL for unfunded lending commitments as well as the allocation of our ACL on loans.

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Allowance for credit losses on loans and unfunded lending commitments

	Six months ended June 30,
	2022					2021
	Loans			Unfunded Commitments		Loans			Unfunded Commitments
	(Dollars in thousands)
Balance at beginning of period	$	47,252		$	4,481	$	35,429		$	1,805
Additions (deductions)
Impact of adoption of ASC 326		-			-		11,574			1,469
Provision for credit losses		648			-		(1,899	)		-
Initial allowance on loans purchased with credit deterioration		-			-		134			-
Recoveries credited to allowance		1,274			-		1,434			-
Loans charged against the allowance		(1,291	)		-		(746	)		-
Recoveries included in non-interest expense		-			294		-			(6	)
Balance at end of period	$	47,883		$	4,775	$	45,926		$	3,268
Net loans charged (recovered) against the allowance to average Portfolio Loans		0.00	%				(0.08	)%

Allocation of the Allowance for Credit Losses on Loans

	June 30, 2022		December 31, 2021
	(Dollars in thousands)
Specific allocations	$	616	$	1,130
Pooled analysis allocations		34,976		33,359
Additional allocations based on subjective factors		12,291		12,763
Total	$	47,883	$	47,252

Some loans will not be repaid in full. Therefore, an ACL is maintained at a level which represents our best estimate of expected credit losses. Our ACL is comprised of three principal elements: (i) specific analysis of individual loans identified during the review of the loan portfolio, (ii) pooled analysis of loans with similar risk characteristics based on historical experience, adjusted for current conditions, reasonable and supportable forecasts, and expected prepayments, and (iii) additional allowances based on subjective factors, including local and general economic business factors and trends, portfolio concentrations and changes in the size and/or the general terms of the loan portfolios. See note #4 to the Condensed Consolidated Financial Statements included within this report for further discussion on the ACL.

While we use relevant information to recognize losses on loans, additional provisions for related losses may be necessary based on changes in economic conditions, customer circumstances and other credit risk factors.

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The ACL increased $0.6 million to $47.9 million at June 30, 2022 from $47.3 million at December 31, 2021 and was equal to 1.47% and 1.63% of total Portfolio Loans at June 30, 2022 and December 31, 2021, respectively.

Since December 31, 2021 the ACL related to specific loans decreased $0.5 million due primarily to a $2.3 million decrease in the amount of such loans. The ACL related to subjective factors decreased $0.5 million due primarily to lower reserve allocations reflecting a decrease in risk related to the COVID-19 pandemic that was partially offset by loan growth. The ACL related to pooled analysis of loans increased $1.6 million due primarily to loan growth that was partially offset by an improved loan risk rating mix.

Deposits and borrowings. Historically, the loyalty of our customer base has allowed us to price deposits competitively, contributing to a net interest margin that generally compares favorably to our peers. However, we still face a significant amount of competition for deposits within many of the markets served by our branch network, which limits our ability to materially increase deposits without adversely impacting the weighted-average cost of core deposits.

To attract new core deposits, we have implemented various account acquisition strategies as well as branch staff sales training. Account acquisition initiatives have historically generated increases in customer relationships. Over the past several years, we have also expanded our treasury management products and services for commercial businesses and municipalities or other governmental units and have also increased our sales calling efforts in order to attract additional deposit relationships from these sectors. We view long-term core deposit growth as an important objective. Core deposits generally provide a more stable and lower cost source of funds than alternative sources such as short-term borrowings. (See “Liquidity and capital resources.”)

Deposits totaled $4.29 billion and $4.12 billion at June 30, 2022 and December 31, 2021, respectively. The increase in deposits is primarily due to growth in non-interest bearing, savings and interest bearing checking deposits, time deposits, reciprocal deposits and brokered deposits. Reciprocal deposits totaled $615.2 million and $586.6 million at June 30, 2022 and December 31, 2021, respectively. These deposits represent demand, money market and time deposits from our customers that have been placed through IntraFi Network. This service allows our customers to access multi-million dollar FDIC deposit insurance on deposit balances greater than the standard FDIC insurance maximum.

We cannot be sure that we will be able to maintain our current level of core deposits. In particular, those deposits that are uninsured may be susceptible to outflow. At June 30, 2022, we had approximately $1.04 billion of uninsured deposits. A reduction in core deposits would likely increase our need to rely on wholesale funding sources.

We have also implemented strategies that incorporate using federal funds purchased, other borrowings and Brokered CDs to fund a portion of our interest-earning assets. The use of such alternate sources of funds supplements our core deposits and is also an integral part of our asset/liability management efforts.

Other borrowings, comprised primarily of advances from the FHLB, totaled $25.5 million and $30 million at June 30, 2022 and December 31, 2021, respectively.

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As described above, we have utilized wholesale funding, including federal funds purchased, FHLB and FRB borrowings and Brokered CDs to augment our core deposits and fund a portion of our assets. At June 30, 2022, our use of such wholesale funding sources (including reciprocal deposits) amounted to approximately $680.7 million, or 15.8% of total funding (deposits and all borrowings, excluding subordinated debt and debentures). Because wholesale funding sources are affected by general market conditions, the availability of such funding may be dependent on the confidence these sources have in our financial condition and operations. The continued availability to us of these funding sources is not certain, and Brokered CDs may be difficult for us to retain or replace at attractive rates as they mature. Our liquidity may be constrained if we are unable to renew our wholesale funding sources or if adequate financing is not available in the future at acceptable rates of interest or at all. Our financial performance could also be affected if we are unable to maintain our access to funding sources or if we are required to rely more heavily on more expensive funding sources. In such case, our net interest income and results of operations could be adversely affected.

We historically employed derivative financial instruments to manage our exposure to changes in interest rates. During the first six months of 2022 and 2021, we entered into $18.5 million and $15.6 million (aggregate notional amounts), respectively, of interest rate swaps with commercial loan customers, which were offset with interest rate swaps that the Bank entered into with a broker-dealer. We recorded $0.2 million and $0.3 million of fee income related to these transactions during the first six months of 2022 and 2021, respectively. See note #6 to the Condensed Consolidated Financial Statements included within this report for more information on our derivative financial instruments.

Liquidity and capital resources. Liquidity risk is the risk of being unable to timely meet obligations as they come due at a reasonable funding cost or without incurring unacceptable losses. Our liquidity management involves the measurement and monitoring of a variety of sources and uses of funds. Our Condensed Consolidated Statements of Cash Flows categorize these sources and uses into operating, investing and financing activities. We primarily focus our liquidity management on maintaining adequate levels of liquid assets (primarily funds on deposit with the FRB and certain securities AFS) as well as developing access to a variety of borrowing sources to supplement our deposit gathering activities and provide funds for purchasing securities or originating Portfolio Loans as well as to be able to respond to unforeseen liquidity needs.

Our primary sources of funds include our deposit base, secured advances from the FHLB and FRB, federal funds purchased borrowing facilities with other banks, and access to the capital markets (for Brokered CDs).

At June 30, 2022, we had $301.9 million of time deposits that mature in the next 12 months. Historically, a majority of these maturing time deposits are renewed by our customers. Additionally, $3.90 billion of our deposits at June 30, 2022, were in account types from which the customer could withdraw the funds on demand. Changes in the balances of deposits that can be withdrawn upon demand are usually predictable and the total balances of these accounts have generally grown or have been stable over time as a result of our marketing and promotional activities. However, there can be no assurance that historical patterns of renewing time deposits or overall growth or stability in deposits will continue in the future.

We have developed contingency funding plans that stress test our liquidity needs that may arise from certain events such as an adverse change in our financial metrics (for example, credit quality or regulatory capital ratios). Our liquidity management also includes periodic monitoring that measures quick assets (defined generally as highly liquid or short-term assets) to total assets, short-term liability dependence and basic surplus (defined as quick assets less volatile liabilities to total assets). Policy limits have been established for our various liquidity measurements and are monitored on a quarterly basis. In addition, we also prepare cash flow forecasts that include a variety of different scenarios.

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We believe that we currently have adequate liquidity at our Bank because of our cash and cash equivalents, our portfolio of securities AFS, our access to secured advances from the FHLB and FRB and our ability to issue Brokered CDs.

We also believe that the available cash on hand at the parent company (including time deposits) of approximately $45.4 million as of June 30, 2022 provides sufficient liquidity resources at the parent company to meet operating expenses, to make interest payments on the subordinated debt and debentures, and, along with dividends from the Bank, to pay projected cash dividends on our common stock.

Effective management of capital resources is critical to our mission to create value for our shareholders. In addition to common stock, our capital structure also currently includes subordinated debt and cumulative trust preferred securities.

Capitalization

	June 30, 2022			December 31, 2021
	(In thousands)
Subordinated debt	$	39,395		$	39,357
Subordinated debentures		39,626			39,592
Amount not qualifying as regulatory capital		(619	)		(581	)
Amount qualifying as regulatory capital		78,402			78,368
Shareholders’ equity
Common stock		319,885			323,401
Retained earnings		96,252			74,582
Accumulated other comprehensive income (loss)		(85,003	)		501
Total shareholders’ equity		331,134			398,484
Total capitalization	$	409,536		$	476,852

In May 2020, we issued $40.0 million of fixed to floating subordinated notes with a ten year maturity and a five year call option. The initial coupon rate is 5.95% fixed for five years and then floats at the Secured Overnight Financing Rate (“SOFR”) plus 5.825%. These notes are presented in the Condensed Consolidated Statement of Financial Condition under the caption “Subordinated debt” and the June 30, 2022 balance of $39.4 million is net of remaining unamortized deferred issuance costs of approximately $0.6 million that are being amortized through the maturity date into interest expense on other borrowings and subordinated debt and debentures in our Condensed Consolidated Statements of Operations.

We currently have four special purpose entities with $39.6 million of outstanding cumulative trust preferred securities as of June 30, 2022. These special purpose entities issued common securities and provided cash to our parent company that in turn issued subordinated debentures to these special purpose entities equal to the trust preferred securities and common securities. The subordinated debentures represent the sole asset of the special purpose entities. The common securities and subordinated debentures are included in our Condensed Consolidated Statements of Financial Condition.

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The FRB has issued rules regarding trust preferred securities as a component of the Tier 1 capital of bank holding companies. The aggregate amount of trust preferred securities (and certain other capital elements) are limited to 25 percent of Tier 1 capital elements, net of goodwill (net of any associated deferred tax liability). The amount of trust preferred securities and certain other elements in excess of the limit can be included in Tier 2 capital, subject to restrictions. At the parent company, all of these securities qualified as Tier 1 capital at June 30, 2022 and December 31, 2021.

Common shareholders’ equity decreased to $331.1 million at June 30, 2022, from $398.5 million at December 31, 2021. The decrease is primarily due to an $85.5 million decline in accumulated other comprehensive income (loss) related to unrealized losses on securities AFS, share repurchases and cash dividend payments that were partially offset by net income.  Our tangible common equity (“TCE”) totaled $300.0 million and $366.8 million, respectively, at those same dates. Our ratio of TCE to tangible assets was 6.26% and 7.85% at June 30, 2022, and December 31, 2021, respectively. TCE and the ratio of TCE to tangible assets are non-GAAP measures. TCE represents total common equity less goodwill and other intangible assets.

In December 2021, our Board of Directors authorized a 2022 share repurchase plan. Under the terms of the 2022 share repurchase plan, we are authorized to buy back up to 1,100,000, or approximately 5% of our outstanding common stock. During the first six months of 2022, the Company repurchased 181,586 shares at a weighted average purchase price of $22.08 per share.

We pay a quarterly cash dividend on our common stock. These dividends totaled $0.44 per share and $0.42 per share in the first six months of 2022 and 2021, respectively. We generally favor a dividend payout ratio between 30% and 50% of net income.

As of June 30, 2022 and December 31, 2021, our Bank (and holding company) continued to meet the requirements to be considered “well-capitalized” under federal regulatory standards (also see note #10 to the Condensed Consolidated Financial Statements included within this report).

Asset/liability management. Interest-rate risk is created by differences in the cash flow characteristics of our assets and liabilities. Options embedded in certain financial instruments, including caps on adjustable-rate loans as well as borrowers’ rights to prepay fixed-rate loans, also create interest-rate risk.

Our asset/liability management efforts identify and evaluate opportunities to structure our assets and liabilities in a manner that is consistent with our mission to maintain profitable financial leverage within established risk parameters. We evaluate various opportunities and alternate asset/liability management strategies carefully and consider the likely impact on our risk profile as well as the anticipated contribution to earnings. The marginal cost of funds is a principal consideration in the implementation of our asset/liability management strategies, but such evaluations further consider interest-rate and liquidity risk as well as other pertinent factors. We have established parameters for interest-rate risk. We regularly monitor our interest-rate risk and report at least quarterly to our board of directors.

85

We employ simulation analyses to monitor our interest-rate risk profile and evaluate potential changes in our net interest income and market value of portfolio equity that result from changes in interest rates. The purpose of these simulations is to identify sources of interest-rate risk. The simulations do not anticipate any actions that we might initiate in response to changes in interest rates and, accordingly, the simulations do not provide a reliable forecast of anticipated results. The simulations are predicated on immediate, permanent and parallel shifts in interest rates and generally assume that current loan and deposit pricing relationships remain constant. The simulations further incorporate assumptions relating to changes in customer behavior, including changes in prepayment rates on certain assets and liabilities. During 2022,  both our interest rate risk profile as measured by our short term earnings simulation and our longer term interest rate risk measure based on changes in economic value indicates exposure to rising rates. The shift is primarily due to an increase in asset duration and an increase in the repricing speed of liabilities. The increase in asset duration is attributed to growth in portfolio mortgage loans combined with lower cash balances. The increase in the repricing of liabilities is attributed to higher deposit betas.   However, we are carefully monitoring the change in the composition of our earning assets and paying liability repricing speed and the impact of potential future changes in interest rates on our changes in market value of portfolio equity and changes in net interest income. As a result, we may add some longer-term borrowings, may utilize derivatives (interest rate swaps and interest rate caps) to manage interest rate risk and may continue to sell some fixed rate jumbo and other portfolio mortgage loans in the future.

CHANGES IN MARKET VALUE OF PORTFOLIO EQUITY AND NET INTEREST INCOME

Change in Interest Rates	Market Value of Portfolio Equity(1)		Percent Change			Net Interest Income(2)		Percent Change
	(Dollars in thousands)
June 30, 2022
200 basis point rise	$	476,000		(15.78	)%	$	160,600		(0.62	)%
100 basis point rise		520,100		(7.98	)		161,500		(0.06	)
Base-rate scenario		565,200		-			161,600		-
100 basis point decline		572,600		1.13			155,400		(3.84	)
December 31, 2021
200 basis point rise	$	514,200		(5.86	)%	$	137,800		3.30	%
100 basis point rise		550,900		0.86			136,800		2.55
Base-rate scenario		546,200		-			133,400		-
100 basis point decline		473,000		(13.40	)		126,700		(5.02	)

(1) Simulation analyses calculate the change in the net present value of our assets and liabilities, including debt and related financial derivative instruments, under parallel shifts in interest rates by discounting the estimated future cash flows using a market-based discount rate. Cash flow estimates incorporate anticipated changes in prepayment speeds and other embedded options.

(2) Simulation analyses calculate the change in net interest income under immediate parallel shifts in interest rates over the next twelve months, based upon a static statement of financial condition, which includes debt and related financial derivative instruments, and do not consider loan fees.

Accounting standards update. See note #2 to the Condensed Consolidated Financial Statements included elsewhere in this report for details on recently issued accounting pronouncements and their impact on our interim condensed consolidated financial statements.

86

Fair valuation of financial instruments. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820 - “Fair Value Measurements and Disclosures” (“FASB ASC Topic 820”) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an 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.

We utilize fair value measurements to record fair value adjustments to certain financial instruments and to determine fair value disclosures. FASB ASC Topic 820 differentiates between those assets and liabilities required to be carried at fair value at every reporting period (“recurring”) and those assets and liabilities that are only required to be adjusted to fair value under certain circumstances (“nonrecurring”). Securities AFS, loans held for sale, carried at fair value, derivatives and capitalized mortgage loan servicing rights are financial instruments recorded at fair value on a recurring basis. Additionally, from time to time, we may be required to record at fair value other financial assets on a nonrecurring basis, such as loans held for investment and certain other assets. These nonrecurring fair value adjustments typically involve application of lower of cost or fair value accounting or write-downs of individual assets. See note #11 to the Condensed Consolidated Financial Statements included within this report for a complete discussion on our use of fair valuation of financial instruments and the related measurement techniques.

Litigation Matters

The aggregate amount we have accrued for losses we consider probable as a result of litigation matters is immaterial. However, because of the inherent uncertainty of outcomes from any litigation matter, we believe it is reasonably possible we may incur losses in addition to the amounts we have accrued. At this time, we estimate the maximum amount of additional losses that are reasonably possible is insignificant. However, because of a number of factors, including the fact that certain of these litigation matters are still in their early stages, this maximum amount may change in the future.

The litigation matters described in the preceding paragraph primarily include claims that have been brought against us for damages, but do not include litigation matters where we seek to collect amounts owed to us by third parties (such as litigation initiated to collect delinquent loans). These excluded, collection-related matters may involve claims or counterclaims by the opposing party or parties, but we have excluded such matters from the disclosure contained in the preceding paragraph in all cases where we believe the possibility of us paying damages to any opposing party is remote.

Critical Accounting Policies

Our accounting and reporting policies are in accordance with accounting principles generally accepted in the United States of America and conform to general practices within the banking industry. Accounting and reporting policies for the ACL and capitalized mortgage loan servicing rights are deemed critical since they involve the use of estimates and require significant management judgments. Application of assumptions different than those that we have used could result in material changes in our consolidated financial position or results of operations. There have been no material changes to our critical accounting policies as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

87

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

See applicable disclosures set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 under the caption “Asset/liability management.”

Item 4.

Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures.

With the participation of management, our chief executive officer and chief financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15(e) and 15d – 15(e)) for the period ended June 30, 2022, have concluded that, as of such date, our disclosure controls and procedures were effective.

(b) Changes in Internal Controls.

During the quarter ended June 30, 2022, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

88

Part II

Item 1A.  Risk Factors

There have been no material changes to the risk factors disclosed in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

The Company maintains a Deferred Compensation and Stock Purchase Plan for Non-Employee Directors (the "Plan") pursuant to which non-employee directors can elect to receive shares of the Company's common stock in lieu of fees otherwise payable to the director for his or her service as a director.  A director can elect to receive shares on a current basis or to defer receipt of the shares, in which case the shares are issued to a trust to be held for the account of the director and then generally distributed to the director after his or her retirement from the Board.  Pursuant to this Plan, during the second quarter of 2022, the Company issued 375 shares of common stock to non-employee directors on a current basis and 3,939 shares of common stock to the trust for distribution to directors on a deferred basis.  These shares were issued on April 1, 2022 representing aggregate fees of $0.09 million. The shares on a current basis were issued at a price of $22.00 per share and the shares on a deferred basis were issued at a price of $19.80 per share, representing 90% of the fair value of the shares on the credit date.   The price per share was the consolidated closing bid price per share of the Company's common stock as of the date of issuance, as determined in accordance with NASDAQ Marketplace Rules.  The Company issued the shares pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933 due to the fact that the issuance of the shares was made on a private basis pursuant to the Plan.

The following table shows certain information relating to repurchases of common stock for the three-months ended June 30, 2022:

Period	Total Number of Shares Purchased (1)		Average Price Paid Per Share		Total Number of Shares Purchased as Part of a Publicly Announced Plan		Remaining Number of Shares Authorized for Purchase Under the Plan
April 2022		110,248	$	21.55		110,109		930,889
May 2022		14,189		20.15		12,475		918,414
June 2022		-		-		-		918,414
Total		124,437	$	21.39		122,584		918,414

(1) April and May include 139 shares and 1,714 shares, respectively, withheld from the shares that would otherwise have been issued to certain officers in order to satisfy tax withholding obligations resulting from the vesting of restricted stock and performance share units as well as satisfy tax withholding obligations and stock option exercise price resulting from the exercise of stock options.

89

Item 6.  Exhibits

(a)	The following exhibits (listed by number corresponding to the Exhibit Table as Item 601 in Regulation S-K) are filed with this report:
	31.1	Certificate of the Chief Executive Officer of Independent Bank Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
	31.2	Certificate of the Chief Financial Officer of Independent Bank Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
	32.1	Certificate of the Chief Executive Officer of Independent Bank Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
	32.2	Certificate of the Chief Financial Officer of Independent Bank Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
	101.	INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within 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 Label 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)

90

SIGNATURES

Pursuant to the requirements 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.

Date	August 5, 2022	By	/s/ Gavin A. Mohr
			Gavin A. Mohr, Principal Financial Officer
Date	August 5, 2022	By	/s/ James J. Twarozynski
			James J. Twarozynski, Principal Accounting Officer

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, William B. Kessel, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Independent Bank Corporation;

2. Based on my knowledge, this quarterly 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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly 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 we 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 quarterly 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 quarterly 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;

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 the 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 controls over financial reporting.

	INDEPENDENT BANK CORPORATION
Date:  August 5, 2022	/s/ William B. Kessel
		William B. Kessel
		President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Gavin A. Mohr, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Independent Bank Corporation;

2. Based on my knowledge, this quarterly 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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly 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 we 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 quarterly 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 quarterly 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;

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 the 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 controls over financial reporting.

	INDEPENDENT BANK CORPORATION
Date:  August 5, 2022	/s/ Gavin A. Mohr
		Gavin A. Mohr
		Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATE OF THE

CHIEF EXECUTIVE OFFICER OF

INDEPENDENT BANK CORPORATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350):

I, William B. Kessel, President and Chief Executive Officer of Independent Bank Corporation, certify, to the best of my knowledge and belief, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) that:

(1)         The quarterly report on Form 10-Q for the quarterly period ended June 30, 2022, which this statement accompanies, fully complies with requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and;

(2)          The information contained in this quarterly report on Form 10-Q for the quarterly period ended June 30, 2022, fairly presents, in all material respects, the financial condition and results of operations of Independent Bank Corporation.

	INDEPENDENT BANK CORPORATION
Date:  August 5, 2022	/s/ William B. Kessel
		William B. Kessel
		President and Chief Executive Officer

The signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Independent Bank Corporation and will be retained by Independent Bank Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATE OF THE

CHIEF FINANCIAL OFFICER OF

INDEPENDENT BANK CORPORATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350):

I, Gavin A. Mohr, Chief Financial Officer of Independent Bank Corporation, certify, to the best of my knowledge and belief, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) that:

(1)          The quarterly report on Form 10-Q for the quarterly period ended June 30, 2022, which this statement accompanies, fully complies with requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and;

(2)          The information contained in this quarterly report on Form 10-Q for the quarterly period ended June 30, 2022, fairly presents, in all material respects, the financial condition and results of operations of Independent Bank Corporation.

	INDEPENDENT BANK CORPORATION
Date: August 5, 2022	/s/ Gavin A. Mohr
		Gavin A. Mohr
		Chief Financial Officer

The signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Independent Bank Corporation and will be retained by Independent Bank Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2022	Aug. 04, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2022
Entity File Number	0-7818
Entity Registrant Name	INDEPENDENT BANK CORPORATION
Entity Central Index Key	0000039311
Entity Incorporation, State or Country Code	MI
Entity Tax Identification Number	38-2032782
Entity Address, Address Line One	4200 East Beltline
Entity Address, City or Town	Grand Rapids
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	49525
City Area Code	616
Local Phone Number	527-5820
Title of 12(b) Security	Common stock, no par value
Trading Symbol	IBCP
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Document Transition Report	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		21,055,754

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Condensed Consolidated Statements of Financial Condition - USD ($) $ in Thousands		Jun. 30, 2022	Dec. 31, 2021
Assets
Cash and due from banks		$ 56,516	$ 51,069
Interest bearing deposits		2,970	58,404
Cash and Cash Equivalents		59,486	109,473
Securities available for sale		859,704	1,412,830
Securities held to maturity (fair value of $359,701 at June 30, 2022 and zero at December 31, 2021)		381,608	0
Federal Home Loan Bank and Federal Reserve Bank stock, at cost		17,653	18,427
Loans held for sale, carried at fair value		31,400	55,470
Loans held for sale, carried at lower of cost or fair value		0	34,811
Loans
Loans		3,258,850	2,905,045
Allowance for credit losses		(47,883)	(47,252)
Net Loans		3,210,967	2,857,793
Other real estate and repossessed assets, net		508	245
Property and equipment, net		36,148	36,404
Bank-owned life insurance		55,088	55,279
Capitalized mortgage loan servicing rights, carried at fair value		39,477	26,232
Other intangibles		2,871	3,336
Goodwill		28,300	28,300
Accrued income and other assets		102,999	66,140
Total Assets		4,826,209	4,704,740
Deposits
Non-interest bearing		1,357,824	1,321,601
Savings and interest-bearing checking		1,961,124	1,897,487
Reciprocal		615,204	586,626
Time		316,425	308,438
Brokered time		39,997	2,938
Total Deposits		4,290,574	4,117,090
Other borrowings		25,507	30,009
Subordinated debt		39,395	39,357
Subordinated debentures		39,626	39,592
Accrued expenses and other liabilities		99,973	80,208
Total Liabilities		4,495,075	4,306,256
Commitments and contingent liabilities
Shareholders' Equity
Preferred stock, no par value, 200,000 shares authorized; none issued or outstanding		0	0
Common stock, no par value, 500,000,000 shares authorized; issued and outstanding: 21,049,218 shares at June 30, 2022 and 21,171,036 shares at December 31, 2021		319,885	323,401
Retained earnings		96,252	74,582
Accumulated other comprehensive income (loss)		(85,003)	501
Total Shareholders' Equity		331,134	398,484
Total Liabilities and Shareholders' Equity		4,826,209	4,704,740
Commercial [Member]
Loans
Loans		1,329,198	1,203,581
Allowance for credit losses		(11,059)	(11,519)
Mortgage [Member]
Loans
Loans	[1]	1,284,169	1,139,659
Allowance for credit losses		(20,313)	(19,221)
Installment [Member]
Loans
Loans	[1]	645,483	561,805
Allowance for credit losses		$ (4,220)	$ (3,749)

[1] Credit scores have been updated within the last twelve months.

XML

Condensed Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Assets
Securities held to maturity, fair value	$ 359,701	$ 0
Shareholders' Equity
Preferred stock, par value (in dollars per share)	$ 0	$ 0
Preferred stock, shares authorized (in shares)	200,000	200,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	21,049,218	21,171,036
Common stock, shares outstanding (in shares)	21,049,218	21,171,036

XML

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Interest Income
Interest and fees on loans		$ 31,454	$ 28,091	$ 59,872	$ 56,196
Interest on securities
Taxable		4,950	3,656	9,502	6,452
Tax-exempt		1,746	1,544	3,300	2,928
Other investments		214	208	431	425
Total Interest Income		38,364	33,499	73,105	66,001
Interest Expense
Deposits		1,216	1,142	1,983	2,398
Other borrowings and subordinated debt and debentures		1,087	964	2,060	1,926
Total Interest Expense		2,303	2,106	4,043	4,324
Net Interest Income		36,061	31,393	69,062	61,677
Provision for credit losses		2,379	(1,425)	806	(1,899)
Net Interest Income After Provision for Credit Losses		33,682	32,818	68,256	63,576
Non-interest Income
Interchange income		3,422	3,453	6,504	6,502
Service charges on deposit accounts		3,096	2,318	6,053	4,234
Net gains (losses) on assets
Mortgage loans		1,253	9,091	2,088	21,919
Securities available for sale		(345)	0	(275)	1,416
Mortgage loan servicing, net		4,162	(1,962)	13,803	3,205
Other		3,044	1,871	5,407	3,901
Total Non-interest Income		14,632	14,771	33,580	41,177
Non-interest Expense
Compensation and employee benefits		19,882	19,883	40,012	38,405
Data processing		2,644	2,576	4,860	4,950
Occupancy, net		2,077	2,153	4,620	4,496
Interchange expense		1,262	1,201	2,273	2,149
Furniture, fixtures and equipment		1,042	1,034	2,087	2,037
Communications		762	777	1,519	1,658
Advertising		560	164	1,240	653
Loan and collection		647	859	1,206	1,618
FDIC deposit insurance		457	307	979	637
Legal and professional		479	522	972	1,021
Costs (recoveries) related to unfunded lending commitments		649	26	294	(6)
Conversion related expense		6	1,143	50	1,361
Other		1,967	1,891	3,772	3,578
Total Non-interest Expense		32,434	32,536	63,884	62,557
Income Before Income Tax		15,880	15,053	37,952	42,196
Income tax expense		2,879	2,665	6,984	7,771
Net Income		$ 13,001	$ 12,388	$ 30,968	$ 34,425
Net Income Per Common Share
Basic (in dollars per share)	[1]	$ 0.62	$ 0.57	$ 1.47	$ 1.58
Diluted (in dollars per share)		$ 0.61	$ 0.56	$ 1.45	$ 1.56

[1] Basic net income per common share includes weighted average common shares outstanding during the period and participating share awards.

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Condensed Consolidated Statements of Comprehensive Income (Loss) [Abstract]
Net income	$ 13,001	$ 12,388	$ 30,968	$ 34,425
Securities available for sale
Unrealized gains (losses) arising during period	(13,916)	5,162	(83,358)	(619)
Net unrealized loss at time of transfer on securities available for sale transferred to held to maturity	(26,479)	0	(26,479)	0
Accretion of net unrealized losses on securities transferred to held to maturity	1,328	0	1,328	0
Reclassification adjustments for (gains) losses included in earnings	345	0	275	(1,416)
Unrealized gains (losses) recognized in other comprehensive income (loss) on securities available for sale	(38,722)	5,162	(108,234)	(2,035)
Income tax expense (benefit)	(8,133)	1,084	(22,730)	(427)
Unrealized gains (losses) recognized in other comprehensive income (loss) on securities available for sale, net of tax	(30,589)	4,078	(85,504)	(1,608)
Other comprehensive income (loss)	(30,589)	4,078	(85,504)	(1,608)
Comprehensive income (loss)	$ (17,588)	$ 16,466	$ (54,536)	$ 32,817

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Condensed Consolidated Statements of Cash Flows [Abstract]
Net Income	$ 30,968	$ 34,425
Adjustments to Reconcile Net Income to Net Cash From Operating Activities
Proceeds from sales of loans held for sale	334,838	708,526
Disbursements for loans held for sale	(309,085)	(653,925)
Provision for credit losses	806	(1,899)
Deferred income tax expense (benefit)	2,680	(251)
Net deferred loan costs	(4,868)	(345)
Net depreciation, amortization of intangible assets and premiums and accretion of discounts on securities and loans	5,734	6,279
Net gains on mortgage loans	(2,088)	(21,919)
Net (gains) losses on securities available for sale	275	(1,416)
Share based compensation	1,054	947
Increase in accrued income and other assets	(10,110)	(9,205)
Increase in accrued expenses and other liabilities	10,921	5,381
Total Adjustments	30,157	32,173
Net Cash From Operating Activities	61,125	66,598
Cash Flow Used in Investing Activities
Proceeds from the sale of securities available for sale	70,523	81,178
Proceeds from maturities, prepayments and calls of securities available for sale	105,288	222,767
Proceeds from maturities, prepayments and calls of securities held to maturity	10,906	0
Purchases of securities available for sale	(137,550)	(546,621)
Proceeds from the redemption of Federal Home Loan Bank stock	774	0
Net increase in portfolio loans (loans originated, net of principal payments)	(347,921)	(79,241)
Proceeds from the sale of portfolio loans	33,755	0
Proceeds from bank-owned life insurance	433	0
Proceeds from the sale of other real estate and repossessed assets	532	854
Capital expenditures	(2,966)	(3,081)
Net Cash Used in Investing Activities	(266,226)	(324,144)
Cash Flow From Financing Activities
Net increase in total deposits	173,484	225,111
Net increase (decrease) in other borrowings	498	(7)
Proceeds from Federal Home Loan Bank Advances	35,000	0
Payments of Federal Home Loan Bank Advances	(40,000)	0
Dividends paid	(9,298)	(9,166)
Proceeds from issuance of common stock	32	49
Repurchase of common stock	(4,010)	(7,285)
Share based compensation withholding obligation	(592)	(607)
Net Cash From Financing Activities	155,114	208,095
Net Decrease in Cash and Cash Equivalents	(49,987)	(49,451)
Cash and Cash Equivalents at Beginning of Period	109,473	118,705
Cash and Cash Equivalents at End of Period	59,486	69,254
Cash paid during the period for
Interest	3,950	4,393
Income taxes	3,940	8,659
Transfers to other real estate and repossessed assets	599	210
Transfer of securities available for sale to held to maturity	391,618	0
Right of use assets obtained in exchange for lease obligations	264	0
Purchase of securities available for sale not yet settled	$ 0	$ 23,825

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Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total	Cumulative Change, Adjusted Balance [Member] Common Stock [Member]	Cumulative Change, Adjusted Balance [Member] Retained Earnings [Member]	Cumulative Change, Adjusted Balance [Member] Accumulated Other Comprehensive Income (Loss) [Member]	Cumulative Change, Adjusted Balance [Member]	Cumulative Change, Adjustment [Member] Common Stock [Member]	Cumulative Change, Adjustment [Member] Retained Earnings [Member]	Cumulative Change, Adjustment [Member] Accumulated Other Comprehensive Income (Loss) [Member]	Cumulative Change, Adjustment [Member]
Balance at beginning of period at Dec. 31, 2020	$ 339,353	$ 40,145	$ 10,024	$ 389,522
Balance at beginning of period (ASU 2016-13 [Member]) at Dec. 31, 2020					$ 339,353	$ 29,842	$ 10,024	$ 379,219	$ 0	$ (10,303)	$ 0	$ (10,303)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	34,425	0	34,425
Cash dividends declared	0	(9,166)	0	(9,166)
Repurchase of common stock	(7,285)	0	0	(7,285)
Issuance of common stock	49	0	0	49
Share based compensation	947	0	0	947
Share based compensation withholding obligation	(607)	0	0	(607)
Other comprehensive income (loss)	0	0	(1,608)	(1,608)
Balances at end of period at Jun. 30, 2021	332,457	55,101	8,416	395,974
Balance at beginning of period at Mar. 31, 2021	335,704	47,287	4,338	387,329
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	12,388	0	12,388
Cash dividends declared	0	(4,574)	0	(4,574)
Repurchase of common stock	(3,684)	0	0	(3,684)
Issuance of common stock	30	0	0	30
Share based compensation	505	0	0	505
Share based compensation withholding obligation	(98)	0	0	(98)
Other comprehensive income (loss)	0	0	4,078	4,078
Balances at end of period at Jun. 30, 2021	332,457	55,101	8,416	395,974
Balance at beginning of period at Dec. 31, 2021	323,401	74,582	501	398,484
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	30,968	0	30,968
Cash dividends declared	0	(9,298)	0	(9,298)
Repurchase of common stock	(4,010)	0	0	(4,010)
Issuance of common stock	32	0	0	32
Share based compensation	1,054	0	0	1,054
Share based compensation withholding obligation	(592)	0	0	(592)
Other comprehensive income (loss)	0	0	(85,504)	(85,504)
Balances at end of period at Jun. 30, 2022	319,885	96,252	(85,003)	331,134
Balance at beginning of period at Mar. 31, 2022	321,981	87,882	(54,414)	355,449
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	13,001	0	13,001
Cash dividends declared	0	(4,631)	0	(4,631)
Repurchase of common stock	(2,626)	0	0	(2,626)
Issuance of common stock	19	0	0	19
Share based compensation	543	0	0	543
Share based compensation withholding obligation	(32)	0	0	(32)
Other comprehensive income (loss)	0	0	(30,589)	(30,589)
Balances at end of period at Jun. 30, 2022	$ 319,885	$ 96,252	$ (85,003)	$ 331,134

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Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Condensed Consolidated Statements of Shareholders' Equity [Abstract]
Cash dividends declared (in dollars per share)	$ 0.22	$ 0.21	$ 0.44	$ 0.42
Repurchase of shares of common stock (in shares)	122,584	163,338	181,586	344,005
Issuance of shares of common stock (in shares)	6,532	18,400	21,632	37,450
Share based compensation, common stock (in shares)	0	8,871	64,354	117,946
Share based compensation withholding obligation, common stock (in shares)	1,853	4,755	26,218	32,279

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Preparation of Financial Statements

6 Months Ended

Jun. 30, 2022

Preparation of Financial Statements [Abstract]

Preparation of Financial Statements

1. Preparation of Financial Statements

The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading.  The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2021 included in our Annual Report on Form 10-K.

In our opinion, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary to present fairly our consolidated financial condition as of June 30, 2022 and December 31, 2021, and the results of operations for the three and six-month periods ended June 30, 2022 and 2021.  The results of operations for the three and six-month periods ended June 30, 2022, are not necessarily indicative of the results to be expected for the full year.  Certain reclassifications have been made in the prior period condensed consolidated financial statements to conform to the current period presentation.  Our critical accounting policies include the determination of the allowance for credit losses (“ACL”) and the valuation of capitalized mortgage loan servicing rights.  Refer to our 2021 Annual Report on Form 10-K for a disclosure of our accounting policies.

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New Accounting Standards

6 Months Ended

Jun. 30, 2022

New Accounting Standards [Abstract]

New Accounting Standards

2.
New Accounting Standards

In March, 2022, the FASB issued ASU 2022-01, “Derivative and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method”. This ASU expands the current “last-of-layer” hedge method to allow multiple hedged layers of a single closed portfolio as well as to include non prepayable financial assets.  This ASU also provides additional guidance on the accounting for and disclosure of certain hedge basis adjustments and specifies how hedge basis adjustments should be considered when determining credit losses for assets included in a closed portfolio.  This ASU is required in reporting periods beginning after December. 15, 2022, with early adoption permitted. We early adopted this ASU in the second quarter of 2022 with no material impact to our Condensed Consolidated Financial Statements.

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, ‘‘Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting’’. This new ASU provides temporary optional expedients and exceptions to 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. Entities can elect not to apply certain modification accounting requirements to contracts affected by reference rate reform, if certain criteria are met. Entities that make such elections would not have to remeasure contracts at the modification date or reassess a previous accounting determination.  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.

We have formed a cross-functional project team to lead this transition from LIBOR to a planned adoption of reference rates which could include Secured Overnight Financing Rate (“SOFR”), amongst others. We utilized the timeline guidance published by the Alternative Reference Rates Committee to develop and achieve internal milestones during this transitional period.  We have discontinued the use of new LIBOR-based loans as of December 31, 2021, according to regulatory guidelines. We also discontinued the use of new LIBOR based interest rate derivatives as of December 31, 2021.  The amended guidance under Topic 848 and our ability to elect its temporary optional expedients and exceptions are effective for us through December 31, 2022.  We expect to adopt the LIBOR transition relief allowed under this standard.

In March, 2022, the FASB issued ASU 2022-02, “Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructuring and Vintage Disclosures”. This ASU eliminates the troubled debt restructuring (“TDR”) accounting model for creditors that have already adopted Topic 326, which is commonly referred to as the current expected credit loss (“CECL”) model. In lieu of the TDR accounting model, creditors now will apply the general loan modification guidance in Subtopic 310-20 to all loan modifications, including modifications made for borrowers experiencing financial difficulty. Under the general loan modification guidance, a modification is treated as a new loan only if the terms of the new loan are at least as favorable to the lender as the terms for comparable loans to other customers with similar collection risks, and modifications to the terms of the original loan are more than minor. If either condition is not met, the modification is accounted for as the continuation of the old loan with any effect of the modification treated as a prospective adjustment to the loan’s effective interest rate. In addition, this ASU requires the disclosure of gross charge-offs recorded in the current period for financing receivables by origination year. For entities that have adopted Topic 326, ASU 2022-02 takes effect in reporting periods beginning after December 15, 2022, with early adoption permitted. We are currently assessing the impact of this ASU on our Condensed Consolidated Financial Statements.

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Securities

6 Months Ended

Jun. 30, 2022

Securities [Abstract]

Securities

3. Securities

Securities available for sale (“AFS”) consist of the following:

	Amortized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
June 30, 2022
U.S. agency	$	14,549	$	23	$	581	$	13,991
U.S. agency residential mortgage-backed		108,141		35		7,487		100,689
U.S. agency commercial mortgage-backed		16,873		-		1,282		15,591
Private label mortgage-backed		106,549		256		6,966		99,839
Other asset backed		240,479		3		6,247		234,235
Obligations of states and political subdivisions		358,103		42		45,230		312,915
Corporate		88,644		50		7,685		81,009
Trust preferred		977		-		41		936
Foreign government		500		-		1		499
Total	$	934,815	$	409	$	75,520	$	859,704
December 31, 2021
U.S. agency	$	34,634	$	152	$	112	$	34,674
U.S. agency residential mortgage-backed		309,907		1,952		3,874		307,985
U.S. agency commercial mortgage-backed		23,066		84		224		22,926
Private label mortgage-backed		102,480		807		672		102,615
Other asset backed		215,235		1,204		269		216,170
Obligations of states and political subdivisions		568,355		9,942		2,221		576,076
Corporate		148,707		2,446		1,194		149,959
Trust preferred		1,975		-		56		1,919
Foreign government		499		7		-		506
Total	$	1,404,858	$	16,594	$	8,622	$	1,412,830

Securities held to maturity (“HTM”) consist of the following:

			Transferred
	Carrying		Unrealized				Amortized		Unrealized
	Value		Loss (1)		ACL		Cost		Gains		Losses		Fair Value
							(In thousands)
June 30, 2022
U.S. agency	$	28,432	$	1,959	$	-	$	30,391	$	-	$	3,533	$	26,858
U.S. agency residential mortgage-backed		123,483		11,556		-		135,039		1		19,271		115,769
U.S. agency commercial mortgage-backed		5,071		273		-		5,344		-		432		4,912
Private label mortgage-backed		7,211		473		2		7,686		-		796		6,890
Obligations of states and political subdivisions		168,189		9,542		30		177,761		38		20,166		157,633
Corporate		48,283		1,292		121		49,696		12		3,058		46,650
Trust preferred		939		56		5		1,000		-		11		989
Total	$	381,608	$	25,151	$	158	$	406,917	$	51	$	47,267	$	359,701

(1) Represents the remaining unrealized loss to be accreted on securities that were transferred from AFS to HTM on April 1, 2022.

On April 1, 2022, we transferred certain securities AFS with an amortized cost and unrealized loss at the date of transfer of $418.1 million and $26.5 million, respectively to HTM. The transfer was made at fair value, with the unrealized loss becoming part of the purchase discount which will be accreted over the remaining life of the securities. The other comprehensive loss component is separated from the remaining available for sale securities and is accreted over the remaining life of the securities transferred. We have the ability and intent to hold these securities until they mature, at which time we expect to receive full value for these securities.

Gross unrealized losses and fair values for securities available for sale aggregated by investment type and length of time that individual securities have been at a continuous unrealized loss position follows:

	Less Than Twelve Months				Twelve Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
June 30, 2022
U.S. agency	$	11,436	$	580	$	864	$	1	$	12,300	$	581
U.S. agency residential mortgage-backed		78,099		6,344		18,542		1,143		96,641		7,487
U.S. agency commercial mortgage-backed		15,156		1,234		435		48		15,591		1,282
Private label mortgage-backed		97,269		6,863		1,950		103		99,219		6,966
Other asset backed		231,837		6,213		1,432		34		233,269		6,247
Obligations of states and political subdivisions		277,070		39,550		28,336		5,680		305,406		45,230
Corporate		74,016		7,368		1,711		317		75,727		7,685
Trust preferred		-		-		936		41		936		41
Foreign government		499		1		-		-		499		1
Total	$	785,382	$	68,153	$	54,206	$	7,367	$	839,588	$	75,520
December 31, 2021
U.S. agency	$	11,986	$	109	$	1,286	$	3	$	13,272	$	112
U.S. agency residential mortgage-backed		171,398		3,555		19,024		319		190,422		3,874
U.S. agency commercial mortgage-backed		19,900		224		-		-		19,900		224
Private label mortgage-backed		64,408		640		2,180		32		66,588		672
Other asset backed		86,581		248		978		21		87,559		269
Obligations of states and political subdivisions		178,484		2,151		7,093		70		185,577		2,221
Corporate		75,166		1,150		1,050		44		76,216		1,194
Trust preferred		-		-		1,919		56		1,919		56
Total	$	607,923	$	8,077	$	33,530	$	545	$	641,453	$	8,622

Securities AFS in unrealized loss positions are evaluated quarterly for impairment related to credit losses. For securities AFS in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For securities AFS that do not meet this criteria, we evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, adverse conditions specifically related to the security and the issuer and the impact of changes in market interest rates on the market value of the security, among other factors.  If this assessment indicates that a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an ACL is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income (loss), net of applicable taxes. No ACL for securities AFS was needed at June 30, 2022.  Accrued interest receivable on securities AFS totaled $4.5 million and $6.0 million at June 30, 2022 and December 31, 2021, respectively, and is excluded from the estimate of credit losses and is included in accrued income and other assets in the Condensed Consolidated Statements of Financial Condition.

U.S. agency, U.S. agency residential mortgage-backed and U.S. agency commercial mortgage-backed securities — at June 30, 2022, we had 27 U.S. agency, 162 U.S. agency residential mortgage-backed and 16 U.S. agency commercial mortgage-backed securities whose fair value is less than amortized cost. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major credit rating agencies, and have a long history of no credit losses.  The unrealized losses are largely attributed to widening spreads to Treasury bonds and/or an increase in interest rates since acquisition.

Private label mortgage backed, other asset backed, corporate and foreign securities — at June 30, 2022, we had 96 private label mortgage backed, 145 other asset backed,  81 corporate and one foreign securities whose fair value is less than amortized cost. The unrealized losses are primarily due to credit spread widening and/or an increase in interest rates since acquisition.

Obligations of states and political subdivisions — at June 30, 2022, we had 339 municipal securities whose fair value is less than amortized cost. The unrealized losses are primarily due to an increase in interest rates since acquisition.

Trust preferred securities — at June 30, 2022, we had one trust preferred security whose fair value is less than amortized cost. This trust preferred security is a single issue security issued by a trust subsidiary of a bank holding company. The pricing of trust preferred securities has suffered from credit spread widening. This security is rated by a major rating agency as investment grade.

At June 30, 2022 management does not intend to liquidate any of the securities discussed above and it is more likely than not that we will not be required to sell these securities prior to recovery of these unrealized losses.

We recorded no credit related charges in our Condensed Consolidated Statements of Operations related to securities AFS during the three and six month periods ended June 30, 2022 and 2021, respectively.

The ACL on securities HTM is a contra asset valuation account that is deducted from the carrying amount of securities HTM to present the net amount expected to be collected. Securities HTM are charged off against the ACL when deemed uncollectible. Adjustments to the ACL are reported in our Condensed Consolidated Statements of Operations in provision for credit loss. We measure expected credit losses on securities HTM on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Accrued interest receivable on securities HTM totaled $1.7 million at June 30, 2022, and is excluded from the estimate of credit losses and is included in accrued income and other assets in the Condensed Consolidated Statements of Financial Condition. With regard to U.S. Government-sponsored agency and mortgage-backed securities (residential and commercial), all these securities are issued by a U.S. government-sponsored entity and have an implicit or explicit government guarantee; therefore, no allowance for credit losses has been recorded for these securities. With regard to obligations of states and political subdivisions, private label-mortgage-backed, corporate and trust preferred securities HTM, we consider (1) issuer bond ratings, (2) historical loss rates for given bond ratings, (3) the financial condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities. Historical loss rates associated with securities having similar grades as those in our portfolio have been insignificant. Furthermore, as of June 30, 2022, there were no past due principal and interest payments associated with these securities. An allowance for credit losses of $158,000 was recorded on non U.S. agency securities HTM based on applying the long-term historical credit loss rate, as published by Moody’s, for similarly rated securities.

On a quarterly basis, we monitor the credit quality of securities HTM through the use of credit ratings. The carrying value of securities HTM at June 30, 2022, aggregated by credit quality follow:

	Private Label Mortgage- Backed		Obligations of States and Political Subdivisions		Corporate		Trust Preferred		Carrying Value Total
	(In thousands)
Credit rating:
AAA	$	7,211	$	34,598	$	-	$	-	$	41,809
AA		-		109,674		-		-		109,674
A		-		5,197		6,884		-		12,081
BBB		-		1,174		38,515		-		39,689
Non-rated		-		17,546		2,884		939		21,369
Total	$	7,211	$	168,189	$	48,283	$	939	$	224,622

An analysis of the allowance for credit losses by security HTM type follows:

	Private Label Mortgage- Backed		Obligations of States and Political Subdivisions		Corporate		Trust Preferred		Total
	(In thousands)
Three months ended June 30, 2022
Balance at beginning of period	$	-	$	-	$	-	$	-	$	-
Additions (deductions)										-
Provision for credit losses		2		30		121		5		158
Recoveries credited to the allowance		-		-		-		-		-
Securities HTM charged against the allowance		-		-		-		-		-
Balance at end of period	$	2	$	30	$	121	$	5	$	158
Six months ended June 30, 2022
Balance at beginning of period	$	-	$	-	$	-	$	-	$	-
Additions (deductions)										-
Provision for credit losses		2		30		121		5		158
Recoveries credited to the allowance		-		-		-		-		-
Securities HTM charged against the allowance		-		-		-		-		-
Balance at end of period	$	2	$	30	$	121	$	5	$	158

The amortized cost and fair value of securities AFS and securities HTM at June 30, 2022, by contractual maturity, follow:

	Securities AFS				Securities HTM
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Maturing within one year	$	10,083	$	10,109	$	4,247	$	4,241
Maturing after one year but within five years		100,901		94,331		41,546		39,085
Maturing after five years but within ten years		134,151		118,515		119,016		108,172
Maturing after ten years		217,638		186,395		94,039		80,632
		462,773		409,350		258,848		232,130
U.S. agency residential mortgage-backed		108,141		100,689		135,039		115,769
U.S. agency commercial mortgage-backed		16,873		15,591		5,344		4,912
Private label mortgage-backed		106,549		99,839		7,686		6,890
Other asset backed		240,479		234,235		-		-
Total	$	934,815	$	859,704	$	406,917	$	359,701

The actual maturity may differ from the contractual maturity because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

Gains and losses realized on the sale of securities AFS are determined using the specific identification method and are recognized on a trade-date basis.  A summary of proceeds from the sale of securities AFS and gains and losses for the six month periods ending June 30, follows:

			Realized
	Proceeds		Gains		Losses
	(In thousands)
2022	$	70,523	$	164	$	439
2021		81,178		1,466		50

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Loans

6 Months Ended

Jun. 30, 2022

Loans [Abstract]

Loans

4. Loans

We estimate the ACL based on relevant available information from both internal and external sources, including historical loss trends, current conditions and forecasts, specific analysis of individual loans, and other relevant and appropriate factors. The allowance process is designed to provide for expected future losses based on our reasonable and supportable (“R&S”) forecast as of the reporting date. Our ACL process is administered by our Risk Management group utilizing a third party software solution, with significant input and ultimate approval from our Executive Enterprise Risk Committee. Further, we have established a CECL Forecast Committee, which includes a cross discipline structure with membership from Executive Management, Risk Management, and Accounting, which approves ACL model assumptions each quarter. Our ACL is comprised of three principal elements: (i) specific analysis of individual loans identified during the review of the loan portfolio, (ii) pooled analysis of loans with similar risk characteristics based on historical experience, adjusted for current conditions, R&S forecasts, and expected prepayments, and (iii) additional allowances based on subjective factors, including local and general economic business factors and trends, portfolio concentrations and changes in the size and/or the general terms of the loan portfolio.

The first ACL element (specific allocations) includes loans that do not share similar risk characteristics and are evaluated on an individual basis. We will typically evaluate on an individual basis loans that are on nonaccrual; commercial loans that have been modified resulting in a concession, for which the borrower is experiencing financial difficulties, and which are considered TDR; and severely delinquent mortgage and installment loans. When we determine that foreclosure is probable or when repayment is expected to be provided substantially through the operation or sale of underlying collateral, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for estimated selling costs. For loans evaluated on an individual basis that are not determined to be collateral dependent, a discounted cash flow analysis is performed to determine expected credit losses.

The second ACL element (pooled analysis) includes loans with similar risk characteristics, which are broken down by segment, class, and risk metric. The Bank’s primary segments of commercial, mortgage, and installment loans are further classified by other relevant attributes, such as collateral type, lien position, occupancy status, amortization method, troubled debt restructuring (“TDR”) status and balance size. Commercial classes are additionally segmented by risk rating, and mortgage and installment loan classes by credit score tier, which are updated at least semi-annually.

We utilize a discounted cash flow (“DCF”) model to estimate expected future losses for pooled loans. Expected future cash flows are developed from payment schedules over the contractual term, adjusted for forecasted default (probability of default), loss, and prepayment assumptions. We are not required to develop forecasts over the full contractual term of the financial asset or group of financial assets. Rather, for periods beyond which the entity is able to make or obtain R&S forecasts of expected credit losses, we revert to the long term average on a straight line or immediate basis, as determined by the CECL Forecast Committee, and which may vary depending on the economic outlook and uncertainty.

The DCF model for the mortgage and installment pooled loan segments includes using probability of default (“PD”) assumptions that are derived through regression analysis with forecasted US unemployment levels by credit score tier. We review a composite forecast of approximately 50 analysts as well as the Federal Open Market Committee (“FOMC”) projections in setting the unemployment forecast for the R&S period. The current ACL utilizes a one year R&S forecast followed by immediate reversion to the 30 year average unemployment rate. PD assumptions for the remaining segments are based primarily on historical rates by risk metric as defaults were not strongly correlated with any economic indicator. Loss given default (“LGD”) assumptions for the mortgage loan segment are based on a two year forecast followed by a two year straight line reversion period to the longer term average, while LGD rates for the remaining segments are the historical average for the entire period. Prepayment assumptions represent average rates per segment for a period determined by our CECL Forecast Committee and as calculated through the Bank’s Asset and Liability Management program.

Pooled reserves for the commercial loan segment are calculated using the DCF model with assumptions generally based on historical averages by class and risk rating. Effective risk rating practices allow for strong predictability of defaults and losses over the portfolio’s expected shorter duration, relative to mortgage and installment loans. Our rating system is similar to those employed by state and federal banking regulators.

The third ACL element (additional allocations based on subjective factors) is based on factors that cannot be associated with a specific credit or loan category and reflects our attempt to ensure that the overall ACL appropriately reflects a margin for the imprecision necessarily inherent in the estimates of expected credit losses. We adjust our quantitative model for certain qualitative factors to reflect the extent to which management expects current conditions and R&S forecasts to differ from the conditions that existed for the period over which historical information was evaluated. The qualitative framework reflects changes related to relevant data, such as changes in asset quality trends, portfolio growth and composition, national and local economic factors, credit policy and administration and other factors not considered in the base quantitative model. We utilize a survey completed by business unit management throughout the Bank, as well as discussion with the CECL Forecast Committee to establish reserves under the qualitative framework. The current period’s ACL further recognizes inherent risk related to the ongoing COVID-19 pandemic; specifically to commercial loans in high risk industries and mortgage and installment borrowers with occupations in those high risk industries. Identified high risk industries include: food service, hospitality, entertainment, retail, investment real estate, assisted living, and non-owner occupied office.

An analysis of the allowance for credit losses by portfolio segment for the three months ended June 30, follows:

	Commercial			Mortgage			Installment			Subjective Allocation			Total
	(In thousands)
2022
Balance at beginning of period	$	10,744		$	19,208		$	3,604		$	12,071		$	45,627
Additions (deductions)
Provision for credit losses		164			1,046			791			220			2,221
Recoveries credited to the allowance		151			97			405			-			653
Loans charged against the allowance		-			(38	)		(580	)		-			(618	)
Balance at end of period	$	11,059		$	20,313		$	4,220		$	12,291		$	47,883
2021
Balance at beginning of period	$	9,530		$	18,448		$	3,979		$	14,798		$	46,755
Additions (deductions)
Provision for credit losses		(946	)		340			(219	)		(600	)		(1,425	)
Recoveries credited to the allowance		510			169			207			-			886
Loans charged against the allowance		-			(24	)		(266	)		-			(290	)
Balance at end of period	$	9,094		$	18,933		$	3,701		$	14,198		$	45,926

An analysis of the allowance for credit losses by portfolio segment for the six months ended June 30, follows:

	Commercial			Mortgage			Installment			Subjective Allocation			Total
	(In thousands)
2022
Balance at beginning of period	$	11,519		$	19,221		$	3,749		$	12,763		$	47,252
Additions (deductions)
Provision for credit losses		(688	)		868			940			(472	)		648
Recoveries credited to the allowance		228			268			778			-			1,274
Loans charged against the allowance		-			(44	)		(1,247	)		-			(1,291	)
Balance at end of period	$	11,059		$	20,313		$	4,220		$	12,291		$	47,883
2021
Balance at beginning of period	$	7,401		$	6,998		$	1,112		$	19,918		$	35,429
Additions (deductions)
Impact of adoption of ASC 326		2,551			12,000			3,052			(6,029	)		11,574
Provision for credit losses		(1,622	)		(280	)		(306	)		309			(1,899	)
Initial allowance on loans purchased with credit deterioration		95			18			21			-			134
Recoveries credited to the allowance		669			381			384			-			1,434
Loans charged against the allowance		-			(184	)		(562	)		-			(746	)
Balance at end of period	$	9,094		$	18,933		$	3,701		$	14,198		$	45,926

Loans on non-accrual status and past due more than 90 days (“Non-performing Loans”) follow:

	Non- Accrual		Non- Accrual
	with no Allowance for Credit Loss		with an Allowance for Credit Loss		Total Non- Accrual		90+ and Still Accruing		Total Non- Performing Loans
June 30, 2022					(In thousands)
Commercial
Commercial and industrial (1)	$	-	$	14	$	14	$	-	$	14
Commercial real estate		-		-		-		-		-
Mortgage
1-4 family owner occupied - jumbo		-		695		695		-		695
1-4 family owner occupied - non-jumbo (2)		617		1,086		1,703		-		1,703
1-4 family non-owner occupied		159		449		608		-		608
1-4 family - 2nd lien		-		573		573		-		573
Resort lending		118		59		177		-		177
Installment
Boat lending		-		235		235		-		235
Recreational vehicle lending		-		187		187		-		187
Other		-		307		307		-		307
Total	$	894	$	3,605	$	4,499	$	-	$	4,499
Accrued interest excluded from total	$	-	$	-	$	-	$	-	$	-
December 31, 2021
Commercial
Commercial and industrial (1)	$	-	$	15	$	15	$	-	$	15
Commercial real estate		-		-		-		-		-
Mortgage
1-4 family owner occupied - jumbo		607		-		607		-		607
1-4 family owner occupied - non-jumbo (2)		137		1,815		1,952		-		1,952
1-4 family non-owner occupied		275		592		867		-		867
1-4 family - 2nd lien		182		681		863		-		863
Resort lending		118		119		237		-		237
Installment
Boat lending		-		210		210		-		210
Recreational vehicle lending		-		177		177		-		177
Other		-		182		182		-		182
Total	$	1,319	$	3,791	$	5,110	$	-	$	5,110
Accrued interest excluded from total	$	-	$	-	$	-	$	-	$	-

(1) Non-performing commercial and industrial loans exclude $0.042 million and $0.047 million of government guaranteed loans at June 30, 2022 and December 31, 2021, respectively.

(2) Non-performing 1-4 family owner occupied – non jumbo loans exclude $1.318 million and $0.388 million of government guaranteed loans at June 30, 2022 and December 31, 2021, respectively.

The following table provides collateral information by class of loan for collateral-dependent loans with a specific reserve. A loan is considered to be collateral dependent when the borrower is experiencing financial difficulty and the repayment is expected to be provided substantially through the operation or sale of collateral.

The amortized cost of collateral-dependent loans by class follows:

	Collateral Type				Allowance
	Real Estate		Other		for Credit Losses
	(In thousands)
June 30, 2022
Commercial
Commercial and industrial	$	67	$	207	$	43
Commercial real estate		72		-		16
Mortgage
1-4 family owner occupied - jumbo		-		-		-
1-4 family owner occupied - non-jumbo		1,203		-		209
1-4 family non-owner occupied		170		-		4
1-4 family - 2nd lien		97		-		35
Resort lending		156		-		14
Installment
Boat lending		-		102		36
Recreational vehicle lending		-		51		18
Other		38		118		55
Total	$	1,803	$	478	$	430
Accrued interest excluded from total	$	-	$	-
December 31, 2021
Commercial
Commercial and industrial	$	80	$	245	$	51
Commercial real estate		84		-		19
Mortgage
1-4 family owner occupied - jumbo		607		-		-
1-4 family owner occupied - non-jumbo		940		-		286
1-4 family non-owner occupied		477		-		72
1-4 family - 2nd lien		370		-		67
Resort lending		237		-		42
Installment
Boat lending		-		80		29
Recreational vehicle lending		-		121		44
Other		-		70		25
Total	$	2,795	$	516	$	635
Accrued interest excluded from total	$	-	$	1

An aging analysis of loans by class follows:

	Loans Past Due								Loans not		Total
	30-59 days		60-89 days		90+ days		Total		Past Due		Loans
	(In thousands)
June 30, 2022
Commercial
Commercial and industrial	$	43	$	-	$	56	$	99	$	687,923	$	688,022
Commercial real estate		-		-		-		-		641,176		641,176
Mortgage
1-4 family owner occupied - jumbo		556		-		-		556		657,142		657,698
1-4 family owner occupied - non-jumbo		1,432		1,039		595		3,066		303,043		306,109
1-4 family non-owner occupied		317		-		159		476		180,787		181,263
1-4 family - 2nd lien		141		28		97		266		94,985		95,251
Resort lending		-		-		156		156		43,692		43,848
Installment
Boat lending		233		20		55		308		258,077		258,385
Recreational vehicle lending		328		18		50		396		279,678		280,074
Other		298		115		120		533		106,491		107,024
Total	$	3,348	$	1,220	$	1,288	$	5,856	$	3,252,994	$	3,258,850
Accrued interest excluded from total	$	29	$	13	$	-	$	42	$	7,653	$	7,695
December 31, 2021
Commercial
Commercial and industrial	$	-	$	2	$	62	$	64	$	593,048	$	593,112
Commercial real estate		-		-		-		-		610,469		610,469
Mortgage
1-4 family owner occupied - jumbo		-		-		607		607		540,416		541,023
1-4 family owner occupied - non-jumbo		774		408		657		1,839		264,571		266,410
1-4 family non-owner occupied		87		26		462		575		194,277		194,852
1-4 family - 2nd lien		422		60		289		771		87,958		88,729
Resort lending		-		-		237		237		48,408		48,645
Installment
Boat lending		438		28		52		518		227,622		228,140
Recreational vehicle lending		377		65		120		562		234,183		234,745
Other		252		57		49		358		98,562		98,920
Total recorded investment	$	2,350	$	646	$	2,535	$	5,531	$	2,899,514	$	2,905,045
Accrued interest excluded from total	$	25	$	9	$	-	$	34	$	6,802	$	6,836

We have allocated $2.7 million and $3.6 million of reserves to customers whose loan terms have been modified as TDRs at June 30, 2022 and December 31, 2021, respectively.

TDRs follow:

	June 30, 2022
	Commercial		Retail (1)			Total
	(In thousands)
Performing TDRs	$	3,266	$	28,580		$	31,846
Non-performing TDRs(2)		-		1,164	(3)		1,164
Total	$	3,266	$	29,744		$	33,010

	December 31, 2021
	Commercial		Retail (1)			Total
	(In thousands)
Performing TDRs	$	4,481	$	31,589		$	36,070
Non-performing TDRs(2)		-		1,016	(3)		1,016
Total	$	4,481	$	32,605		$	37,086

(1) Retail loans include mortgage and installment loan portfolio segments.

(2) Included in non-performing loans table above.

(3) Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis.

During the six months ended June 30, 2022, the terms of one loan was modified as a TDR. The modification of the terms of this loan included a reduction of the stated interest rate of the loan and a 34 month extension of the maturity date. The pre- and post-modification outstanding loan balances were both $0.3 million at June 30, 2022. This TDR increased the ACL by $0.03 million and resulted in zero charge-offs during the six months ended June 30, 2022. There were no TDR modifications during the six months ended June 30, 2021.

There were no TDRs that subsequently defaulted within twelve months following the modification during the three and six months periods ended June 30, 2022 and 2021.

A loan is considered to be in payment default generally once it is 90 days contractually past due under the modified terms.

In order to determine whether a borrower is experiencing financial difficulty, we perform an evaluation of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under our internal underwriting policy.

Non-TDR Loan Modifications and Paycheck Protection Program (“PPP”) due to COVID-19 - Section 4013 of the 2020 CARES Act provided temporary relief from the accounting and reporting requirements for TDRs regarding certain loan modifications for our customers.  Section 4013 specified that COVID-19 related modifications on loans that were current (less than 30 days past due) as of December 31, 2019 were not TDRs.  While the provisions of Section 4013 were in place, we assisted both commercial and retail (mortgage and installment) borrowers with accommodations that included reduced or suspended payments. While these loans were in accommodation plans (prior to the expiration of Section 4013) they were not being reported as past due in keeping with the guidance in Section 4013.  Since the expiration of Section 4013 on January 1, 2022, we moved certain accommodation loans to non-accrual which totaled $0.4 million at June 30, 2022.  Total remaining accommodation loans were $1.2 million and $2.3 million at June 30, 2022 and December 31, 2021, respectively.

The CARES Act also included a loan program administered through the U.S. Small Business Administration (‘‘SBA’’) referred to as the PPP. Under the PPP, small businesses and other entities and individuals could apply for loans, subject to numerous limitations and eligibility criteria. We were a participating lender in the PPP. The PPP opened on April 3, 2020 providing American small businesses with cash-flow assistance through 100% federally guaranteed loans through the SBA.  The PPP initially closed on August 8, 2020 (“Round 1”). In December, 2020, additional funding was allocated for the PPP (“Round 2”), whose loans were also eligible for forgiveness.  Round 2 closed on May 31, 2021.

The following table summarizes PPP loans outstanding:

Paycheck Protection Program

	As of June 30, 2022				As of December 31, 2021
	Amount (#)		Amount ($)		Amount (#)		Amount ($)
	(Dollars in thousands)				(Dollars in thousands)
Closed and outstanding - Round 1 loans		-	$	-		6	$	197
Closed and outstanding - Round 2 loans		2		258		180		26,167
Total closed and outstanding		2	$	258		186	$	26,364
Unaccreted net fees remaining at period end			$	-			$	806

PPP loans are included in the commercial and industrial class of the commercial loan portfolio segment. As these loans are 100% guaranteed through the SBA the allowance for credit losses recorded on these loans is zero.  PPP loans funded totaled $6.9 million and $135.5 million during the three and six months ended June 30 2021, respectively.  There were no PPP loans funded during 2022. Interest and fees on loans in our condensed consolidated statement of operations includes $0.2 million and $0.8 million during the three and six month periods ended June 30, 2022, related to the accretion of net loan fees on PPP loans. Accretion of PPP net loan fees was $1.8 million and $3.9 million during the three and six month periods ended June 30, 2021.

Credit Quality Indicators – As part of our on-going monitoring of the credit quality of our loan portfolios, we track certain credit quality indicators including (a) risk grade of commercial loans, (b) the level of classified commercial loans, (c) credit scores of mortgage and installment loan borrowers, and (d) delinquency history and non-performing loans.

For commercial loans, we use a loan rating system that is similar to those employed by state and federal banking regulators. Loans are graded on a scale of 1 to 12. A description of the general characteristics of the ratings follows:

Rating 1 through 6: These loans are generally referred to as our “non-watch” commercial credits that include very high or exceptional credit fundamentals through acceptable credit fundamentals.

Rating 7 and 8: These loans are generally referred to as our “watch” commercial credits. These ratings include loans to borrowers that exhibit potential credit weakness or downward trends. If not checked or cured these trends could weaken our asset or credit position. While potentially weak, no loss of principal or interest is envisioned with these ratings.

Rating 9: These loans are generally referred to as our “substandard accruing” commercial credits. This rating includes loans to borrowers that exhibit a well-defined weakness where payment default is probable and loss is possible if deficiencies are not corrected. Generally, loans with this rating are considered collectible as to both principal and interest primarily due to collateral coverage.

Rating 10 and 11: These loans are generally referred to as our ‘‘substandard - non-accrual’’ and ‘‘doubtful’’ commercial credits. Our doubtful rating includes a sub classification for a loss rate other than 50% (which is the standard doubtful loss rate).  These ratings include loans to borrowers with weaknesses that make collection of the loan in full, on the basis of current facts, conditions and values at best questionable and at worst improbable. All of these loans are placed in non-accrual.

Rating 12: These loans are generally referred to as our “loss” commercial credits. This rating includes loans to borrowers that are deemed incapable of repayment and are charged-off.

The following tables summarize loan ratings by loan class for our commercial portfolio loan segment at June 30, 2022 and December 31, 2021:

	Commercial
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
	(In thousands)
June 30, 2022
Commercial and industrial
Non-watch (1-6)	$	95,350	$	103,647	$	67,402	$	52,393	$	36,427	$	121,179	$	196,543	$	672,941
Watch (7-8)		38		3,864		451		-		137		4,530		303		9,323
Substandard Accrual (9)		-		1,534		-		1,993		1,022		1,153		-		5,702
Non-Accrual (10-11)		-		-		-		-		-		56		-		56
Total	$	95,388	$	109,045	$	67,853	$	54,386	$	37,586	$	126,918	$	196,846	$	688,022
Accrued interest excluded from total	$	130	$	187	$	143	$	97	$	191	$	310	$	439	$	1,497
Commercial real estate
Non-watch (1-6)	$	67,200	$	129,499	$	39,157	$	99,872	$	69,987	$	185,974	$	35,228	$	626,917
Watch (7-8)		-		-		164		2,568		10,550		842		-		14,124
Substandard Accrual (9)		-		135		-		-		-		-		-		135
Non-Accrual (10-11)		-		-		-		-		-		-		-		-
Total	$	67,200	$	129,634	$	39,321	$	102,440	$	80,537	$	186,816	$	35,228	$	641,176
Accrued interest excluded from total	$	190	$	236	$	62	$	233	$	229	$	458	$	63	$	1,471
Total Commercial
Non-watch (1-6)	$	162,550	$	233,146	$	106,559	$	152,265	$	106,414	$	307,153	$	231,771	$	1,299,858
Watch (7-8)		38		3,864		615		2,568		10,687		5,372		303		23,447
Substandard Accrual (9)		-		1,669		-		1,993		1,022		1,153		-		5,837
Non-Accrual (10-11)		-		-		-		-		-		56		-		56
Total	$	162,588	$	238,679	$	107,174	$	156,826	$	118,123	$	313,734	$	232,074	$	1,329,198
Accrued interest excluded from total	$	320	$	423	$	205	$	330	$	420	$	768	$	502	$	2,968

	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
	2021		2020		2019		2018		2017		Prior		Cost Basis		Total
	(In thousands)
December 31, 2021
Commercial and industrial
Non-watch (1-6)	$	121,917	$	69,856	$	56,984	$	44,827	$	38,307	$	96,261	$	144,579	$	572,731
Watch (7-8)		81		-		532		1,294		362		6,274		476		9,019
Substandard Accrual (9)		1,569		2		1,159		247		-		1,530		6,793		11,300
Non-Accrual (10-11)		-		-		-		-		-		62		-		62
Total	$	123,567	$	69,858	$	58,675	$	46,368	$	38,669	$	104,127	$	151,848	$	593,112
Accrued interest excluded from total	$	314	$	153	$	105	$	229	$	90	$	240	$	242	$	1,373
Commercial real estate
Non-watch (1-6)	$	123,330	$	55,479	$	108,056	$	75,828	$	39,123	$	160,199	$	31,551	$	593,566
Watch (7-8)		-		324		3,028		7,678		1,708		1,423		-		14,161
Substandard Accrual (9)		441		-		-		1,193		1,108		-		-		2,742
Non-Accrual (10-11)		-		-		-		-		-		-		-		-
Total	$	123,771	$	55,803	$	111,084	$	84,699	$	41,939	$	161,622	$	31,551	$	610,469
Accrued interest excluded from total	$	182	$	81	$	233	$	203	$	94	$	325	$	47	$	1,165
Total Commercial
Non-watch (1-6)	$	245,247	$	125,335	$	165,040	$	120,655	$	77,430	$	256,460	$	176,130	$	1,166,297
Watch (7-8)		81		324		3,560		8,972		2,070		7,697		476		23,180
Substandard Accrual (9)		2,010		2		1,159		1,440		1,108		1,530		6,793		14,042
Non-Accrual (10-11)		-		-		-		-		-		62		-		62
Total	$	247,338	$	125,661	$	169,759	$	131,067	$	80,608	$	265,749	$	183,399	$	1,203,581
Accrued interest excluded from total	$	496	$	234	$	338	$	432	$	184	$	565	$	289	$	2,538

For each of our mortgage and installment portfolio segment classes, we generally monitor credit quality based on the credit scores of the borrowers. These credit scores are generally updated semi-annually.

The following tables summarize credit scores by loan class for our mortgage and installment loan portfolio segments at June 30, 2022 and December 31, 2021:

	Mortgage (1)
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
	(In thousands)
June 30, 2022
1-4 family owner occupied - jumbo
800 and above	$	6,169	$	31,107	$	18,008	$	3,943	$	690	$	5,400	$	-	$	65,317
750-799		56,497		204,172		75,666		24,735		5,479		19,208		2,071		387,828
700-749		22,889		69,946		23,815		7,324		2,152		7,475		-		133,601
650-699		4,856		22,462		15,192		6,135		4,112		5,446		-		58,203
600-649		1,976		1,857		1,411		501		473		3,416		-		9,634
550-599		-		-		1,864		-		-		-		-		1,864
500-549		556		-		-		-		-		695		-		1,251
Under 500		-		-		-		-		-		-		-		-
Unknown		-		-		-		-		-		-		-		-
Total	$	92,943	$	329,544	$	135,956	$	42,638	$	12,906	$	41,640	$	2,071	$	657,698
Accrued interest excluded from total	$	221	$	707	$	330	$	111	$	46	$	126	$	6	$	1,547
1-4 family owner occupied - non-jumbo
800 and above	$	4,128	$	11,364	$	4,556	$	2,594	$	1,923	$	7,397	$	3,472	$	35,434
750-799		28,528		38,076		16,879		9,041		5,262		19,462		9,072		126,320
700-749		18,439		21,607		6,901		3,001		3,193		22,438		4,832		80,411
650-699		1,283		9,075		3,013		3,312		2,134		13,849		1,347		34,013
600-649		298		1,159		1,497		2,078		1,804		8,663		91		15,590
550-599		-		410		514		438		453		5,705		48		7,568
500-549		-		209		279		355		432		3,037		18		4,330
Under 500		-		-		770		521		129		1,023		-		2,443
Unknown		-		-		-		-		-		-		-		-
Total	$	52,676	$	81,900	$	34,409	$	21,340	$	15,330	$	81,574	$	18,880	$	306,109
Accrued interest excluded from total	$	143	$	166	$	89	$	70	$	53	$	227	$	71	$	819
1-4 family non-owner occupied
800 and above	$	4,398	$	7,558	$	2,862	$	4,348	$	994	$	6,508	$	2,090	$	28,758
750-799		13,258		41,754		18,208		6,510		2,735		13,374		4,049		99,888
700-749		5,997		10,830		5,758		1,607		973		7,372		2,083		34,620
650-699		2,614		2,201		937		970		748		4,974		728		13,172
600-649		-		143		-		77		100		2,178		200		2,698
550-599		-		-		-		-		487		587		271		1,345
500-549		-		-		-		-		-		467		110		577
Under 500		-		-		-		-		-		205		-		205
Unknown		-		-		-		-		-		-		-		-
Total	$	26,267	$	62,486	$	27,765	$	13,512	$	6,037	$	35,665	$	9,531	$	181,263
Accrued interest excluded from total	$	57	$	154	$	72	$	44	$	22	$	108	$	36	$	493
1-4 family - 2nd lien
800 and above	$	97	$	117	$	1,042	$	244	$	171	$	547	$	9,075	$	11,293
750-799		1,607		2,832		1,951		833		504		4,280		32,283		44,290
700-749		280		1,556		990		848		409		1,981		18,710		24,774
650-699		-		163		292		288		315		1,990		7,375		10,423
600-649		-		100		175		214		157		805		1,359		2,810
550-599		-		-		-		25		38		424		176		663
500-549		-		-		-		77		-		427		248		752
Under 500		-		-		-		54		3		121		68		246
Unknown		-		-		-		-		-		-		-		-
Total	$	1,984	$	4,768	$	4,450	$	2,583	$	1,597	$	10,575	$	69,294	$	95,251
Accrued interest excluded from total	$	4	$	10	$	9	$	7	$	5	$	28	$	263	$	326

	Mortgage - continued (1)
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
	(In thousands)
June 30, 2022 - continued
Resort lending
800 and above	$	-	$	-	$	-	$	-	$	271	$	7,263	$	-	$	7,534
750-799		-		490		1,262		235		688		16,330		-		19,005
700-749		-		312		54		-		56		7,678		-		8,100
650-699		-		697		83		-		-		6,834		-		7,614
600-649		-		-		-		-		-		1,296		-		1,296
550-599		-		-		-		-		-		137		-		137
500-549		-		-		-		-		-		44		-		44
Under 500		-		-		-		-		-		118		-		118
Unknown		-		-		-		-		-		-		-		-
Total	$	-	$	1,499	$	1,399	$	235	$	1,015	$	39,700	$	-	$	43,848
Accrued interest excluded from total	$	-	$	1	$	3	$	1	$	3	$	102	$	-	$	110
Total Mortgage
800 and above	$	14,792	$	50,146	$	26,468	$	11,129	$	4,049	$	27,115	$	14,637	$	148,336
750-799		99,890		287,324		113,966		41,354		14,668		72,654		47,475		677,331
700-749		47,605		104,251		37,518		12,780		6,783		46,944		25,625		281,506
650-699		8,753		34,598		19,517		10,705		7,309		33,093		9,450		123,425
600-649		2,274		3,259		3,083		2,870		2,534		16,358		1,650		32,028
550-599		-		410		2,378		463		978		6,853		495		11,577
500-549		556		209		279		432		432		4,670		376		6,954
Under 500		-		-		770		575		132		1,467		68		3,012
Unknown		-		-		-		-		-		-		-		-
Total	$	173,870	$	480,197	$	203,979	$	80,308	$	36,885	$	209,154	$	99,776	$	1,284,169
Accrued interest excluded from total	$	425	$	1,038	$	503	$	233	$	129	$	591	$	376	$	3,295

	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
	2021		2020		2019		2018		2017		Prior		Cost Basis		Total
	(In thousands)
December 31, 2021
1-4 family owner occupied - jumbo
800 and above	$	31,137	$	17,652	$	8,491	$	2,565	$	7,516	$	527	$	-	$	67,888
750-799		135,292		92,590		30,072		7,118		9,469		5,043		2,371		281,955
700-749		67,255		34,665		13,765		4,421		7,748		4,856		-		132,710
650-699		19,367		10,313		5,447		5,285		6,080		690		-		47,182
600-649		2,050		2,638		506		1,013		837		976		-		8,020
550-599		-		469		-		-		781		-		-		1,250
500-549		-		1,411		-		-		-		-		-		1,411
Under 500		-		-		-		-		607		-		-		607
Unknown		-		-		-		-		-		-		-		-
Total	$	255,101	$	159,738	$	58,281	$	20,402	$	33,038	$	12,092	$	2,371	$	541,023
Accrued interest excluded from total	$	557	$	370	$	163	$	77	$	87	$	33	$	3	$	1,290
1-4 family owner occupied - non-jumbo
800 and above	$	6,185	$	5,534	$	3,756	$	2,514	$	3,566	$	4,569	$	4,026	$	30,150
750-799		33,227		20,300		9,688		5,664		8,887		12,498		8,341		98,605
700-749		19,317		10,572		4,813		4,035		5,008		21,806		5,637		71,188
650-699		6,593		4,233		3,217		2,010		3,135		12,423		2,812		34,423
600-649		2,119		1,082		1,051		1,549		1,660		8,663		89		16,213
550-599		-		295		1,076		758		1,023		5,802		147		9,101
500-549		-		57		421		327		510		3,169		18		4,502
Under 500		-		616		284		394		250		684		-		2,228
Unknown		-		-		-		-		-		-		-		-
Total	$	67,441	$	42,689	$	24,306	$	17,251	$	24,039	$	69,614	$	21,070	$	266,410
Accrued interest excluded from total	$	208	$	97	$	84	$	58	$	68	$	226	$	57	$	798

	Mortgage - continued (1)
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
	2021		2020		2019		2018		2017		Prior		Cost Basis		Total
	(In thousands)
December 31, 2021 (continued)
1-4 family non-owner occupied
800 and above	$	15,406	$	1,786	$	2,857	$	1,459	$	2,627	$	5,058	$	1,639	$	30,832
750-799		44,201		21,885		10,517		3,667		6,956		10,004		5,117		102,347
700-749		16,486		7,807		2,764		1,878		966		6,095		2,756		38,752
650-699		6,617		3,095		257		299		248		6,019		955		17,490
600-649		125		57		108		282		174		2,051		381		3,178
550-599		-		25		-		192		-		1,121		-		1,338
500-549		-		-		-		55		-		638		50		743
Under 500		-		-		-		-		-		172		-		172
Unknown		-		-		-		-		-		-		-		-
Total	$	82,835	$	34,655	$	16,503	$	7,832	$	10,971	$	31,158	$	10,898	$	194,852
Accrued interest excluded from total	$	171	$	95	$	46	$	23	$	33	$	107	$	38	$	513
1-4 family - 2nd lien
800 and above	$	415	$	964	$	426	$	95	$	266	$	353	$	8,465	$	10,984
750-799		2,161		2,413		714		1,332		1,859		2,415		30,106		41,000
700-749		1,307		1,049		771		561		1,374		2,365		16,316		23,743
650-699		122		309		460		405		140		1,639		5,286		8,361
600-649		-		177		72		106		92		1,143		1,370		2,960
550-599		-		-		61		-		-		476		228		765
500-549		-		-		99		-		89		190		155		533
Under 500		-		-		54		3		60		16		250		383
Unknown		-		-		-		-		-		-		-		-
Total	$	4,005	$	4,912	$	2,657	$	2,502	$	3,880	$	8,597	$	62,176	$	88,729
Accrued interest excluded from total	$	7	$	9	$	9	$	5	$	8	$	34	$	211	$	283
Resort lending
800 and above	$	-	$	-	$	-	$	274	$	-	$	7,347	$	-	$	7,621
750-799		600		1,246		250		511		63		19,630		-		22,300
700-749		-		174		-		301		67		9,052		-		9,594
650-699		951		-		-		-		-		6,057		-		7,008
600-649		-		-		-		-		-		1,841		-		1,841
550-599		-		-		-		-		-		80		-		80
500-549		-		-		-		-		-		201		-		201
Under 500		-		-		-		-		-		-		-		-
Unknown		-		-		-		-		-		-		-		-
Total	$	1,551	$	1,420	$	250	$	1,086	$	130	$	44,208	$	-	$	48,645
Accrued interest excluded from total	$	2	$	3	$	-	$	3	$	-	$	106	$	-	$	114
Total Mortgage
800 and above	$	53,143	$	25,936	$	15,530	$	6,907	$	13,975	$	17,854	$	14,130	$	147,475
750-799		215,481		138,434		51,241		18,292		27,234		49,590		45,935		546,207
700-749		104,365		54,267		22,113		11,196		15,163		44,174		24,709		275,987
650-699		33,650		17,950		9,381		7,999		9,603		26,828		9,053		114,464
600-649		4,294		3,954		1,737		2,950		2,763		14,674		1,840		32,212
550-599		-		789		1,137		950		1,804		7,479		375		12,534
500-549		-		1,468		520		382		599		4,198		223		7,390
Under 500		-		616		338		397		917		872		250		3,390
Unknown		-		-		-		-		-		-		-		-
Total	$	410,933	$	243,414	$	101,997	$	49,073	$	72,058	$	165,669	$	96,515	$	1,139,659
Accrued interest excluded from total	$	945	$	574	$	302	$	166	$	196	$	506	$	309	$	2,998

(1) Credit scores have been updated within the last twelve months.

	Installment (1)
	Term Loans Amortized Cost Basis by Origination Year
	2022		2021		2020		2019		2018		Prior		Total
	(In thousands)
June 30, 2022
Boat lending
800 and above	$	7,512	$	7,782	$	5,048	$	4,851	$	4,324	$	6,478	$	35,995
750-799		36,409		40,761		21,681		18,994		14,723		17,404		149,972
700-749		11,308		17,884		8,563		7,198		4,277		6,705		55,935
650-699		2,966		3,513		1,669		1,391		1,342		2,073		12,954
600-649		294		717		297		326		447		628		2,709
550-599		-		44		6		81		126		213		470
500-549		-		-		47		10		32		199		288
Under 500		-		-		-		-		28		34		62
Unknown		-		-		-		-		-		-		-
Total	$	58,489	$	70,701	$	37,311	$	32,851	$	25,299	$	33,734	$	258,385
Accrued interest excluded from total	$	133	$	150	$	87	$	84	$	58	$	76	$	588
Recreational vehicle lending
800 and above	$	9,586	$	7,967	$	5,149	$	5,129	$	3,712	$	4,934	$	36,477
750-799		47,236		58,380		18,792		14,206		10,072		10,168		158,854
700-749		17,003		28,781		8,234		5,702		3,357		3,001		66,078
650-699		2,558		7,068		1,871		1,337		922		1,179		14,935
600-649		98		1,237		513		246		279		192		2,565
550-599		-		137		95		247		255		118		852
500-549		-		50		76		59		-		46		231
Under 500		-		67		-		11		-		4		82
Unknown		-		-		-		-		-		-		-
Total	$	76,481	$	103,687	$	34,730	$	26,937	$	18,597	$	19,642	$	280,074
Accrued interest excluded from total	$	177	$	231	$	76	$	63	$	45	$	40	$	632
Other
800 and above	$	1,623	$	1,646	$	1,674	$	1,277	$	542	$	838	$	7,600
750-799		10,440		11,496		6,882		4,327		2,363		3,955		39,463
700-749		5,743		8,558		4,288		2,472		1,271		2,834		25,166
650-699		21,828		4,252		1,253		947		538		1,510		30,328
600-649		316		783		239		247		197		596		2,378
550-599		46		163		56		41		90		124		520
500-549		-		15		62		70		29		76		252
Under 500		-		1		61		32		36		33		163
Unknown		1,154		-		-		-		-		-		1,154
Total	$	41,150	$	26,914	$	14,515	$	9,413	$	5,066	$	9,966	$	107,024
Accrued interest excluded from total	$	48	$	55	$	29	$	25	$	15	$	40	$	212
Total installment
800 and above	$	18,721	$	17,395	$	11,871	$	11,257	$	8,578	$	12,250	$	80,072
750-799		94,085		110,637		47,355		37,527		27,158		31,527		348,289
700-749		34,054		55,223		21,085		15,372		8,905		12,540		147,179
650-699		27,352		14,833		4,793		3,675		2,802		4,762		58,217
600-649		708		2,737		1,049		819		923		1,416		7,652
550-599		46		344		157		369		471		455		1,842
500-549		-		65		185		139		61		321		771
Under 500		-		68		61		43		64		71		307
Unknown		1,154		-		-		-		-		-		1,154
Total	$	176,120	$	201,302	$	86,556	$	69,201	$	48,962	$	63,342	$	645,483
Accrued interest excluded from total	$	358	$	436	$	192	$	172	$	118	$	156	$	1,432

	Installment - continued (1)
	Term Loans Amortized Cost Basis by Origination Year
	2021		2020		2019		2018		2017		Prior		Total
	(In thousands)
December 31, 2021
Boat lending
800 and above	$	7,513	$	5,786	$	6,015	$	4,906	$	2,968	$	4,433	$	31,621
750-799		47,434		24,968		21,052		15,681		9,797		10,971		129,903
700-749		19,180		9,724		8,263		6,467		3,109		4,953		51,696
650-699		3,845		1,679		2,301		1,223		1,166		1,378		11,592
600-649		373		419		209		327		185		604		2,117
550-599		237		81		91		113		115		191		828
500-549		-		49		-		85		-		67		201
Under 500		-		-		-		10		168		4		182
Unknown		-		-		-		-		-		-		-
Total	$	78,582	$	42,706	$	37,931	$	28,812	$	17,508	$	22,601	$	228,140
Accrued interest excluded from total	$	169	$	102	$	106	$	69	$	44	$	47	$	537
Recreational vehicle lending
800 and above	$	8,475	$	5,121	$	5,837	$	4,627	$	2,456	$	3,594	$	30,110
750-799		66,834		22,707		17,173		11,973		5,281		6,794		130,762
700-749		32,702		9,500		6,169		3,768		1,657		2,343		56,139
650-699		7,390		2,423		1,842		948		649		905		14,157
600-649		990		408		291		333		152		111		2,285
550-599		271		100		163		318		6		72		930
500-549		39		21		105		62		26		91		344
Under 500		-		-		11		-		-		7		18
Unknown		-		-		-		-		-		-		-
Total	$	116,701	$	40,280	$	31,591	$	22,029	$	10,227	$	13,917	$	234,745
Accrued interest excluded from total	$	265	$	93	$	78	$	56	$	26	$	28	$	546
Other
800 and above	$	2,328	$	1,424	$	1,493	$	882	$	357	$	695	$	7,179
750-799		13,923		9,093		6,074		3,175		2,183		2,731		37,179
700-749		10,791		5,426		3,301		1,899		906		2,194		24,517
650-699		20,167		1,715		1,249		657		561		1,332		25,681
600-649		761		368		272		190		284		357		2,232
550-599		159		42		127		167		46		154		695
500-549		8		53		56		55		38		98		308
Under 500		6		62		42		14		12		18		154
Unknown		975		-		-		-		-		-		975
Total	$	49,118	$	18,183	$	12,614	$	7,039	$	4,387	$	7,579	$	98,920
Accrued interest excluded from total	$	73	$	40	$	36	$	19	$	11	$	38	$	217
Total installment
800 and above	$	18,316	$	12,331	$	13,345	$	10,415	$	5,781	$	8,722	$	68,910
750-799		128,191		56,768		44,299		30,829		17,261		20,496		297,844
700-749		62,673		24,650		17,733		12,134		5,672		9,490		132,352
650-699		31,402		5,817		5,392		2,828		2,376		3,615		51,430
600-649		2,124		1,195		772		850		621		1,072		6,634
550-599		667		223		381		598		167		417		2,453
500-549		47		123		161		202		64		256		853
Under 500		6		62		53		24		180		29		354
Unknown		975		-		-		-		-		-		975
Total	$	244,401	$	101,169	$	82,136	$	57,880	$	32,122	$	44,097	$	561,805
Accrued interest excluded from total	$	507	$	235	$	220	$	144	$	81	$	113	$	1,300

(1) Credit scores have been updated within the last twelve months.

Foreclosed residential real estate properties included in other real estate and repossessed assets on our Condensed Consolidated Statements of Financial Condition totaled $0.5 million and $0.2 million at June 30, 2022 and December 31, 2021, respectively. Retail mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process according to local requirements totaled $0.4 million and $0.6 million at June 30, 2022 and December 31, 2021, respectively.

During the first quarter of 2022, we sold $33.4 million of portfolio residential fixed rate mortgage loans servicing retained to private investors and recognized a gain on sale of $0.41 million.  This transaction was done primarily for asset/liability management purposes.

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Shareholders' Equity and Earnings Per Common Share

6 Months Ended

Jun. 30, 2022

Shareholders' Equity and Earnings Per Common Share [Abstract]

Shareholders' Equity and Earnings Per Common Share

5. Shareholders’ Equity and Earnings Per Common Share

On December 17, 2021, our Board of Directors authorized a share repurchase plan (the “Repurchase Plan”) to buy back up to 1,100,000 shares of our outstanding common stock through December 31, 2022. Shares would be repurchased through open market transactions, though we could execute repurchases through other means, such as privately negotiated transactions. The timing and amount of any share repurchases will depend on a variety of factors, including, among others, securities law restrictions, the trading price of our common stock, regulatory requirements, potential alternative uses for capital, and our financial performance. During the six month periods ended June 30, 2022 and 2021 repurchases were made totaling 181,586 shares and 344,005 shares of common stock, respectively, for an aggregate purchase price of $4.0 million and $7.3 million, respectively.

A reconciliation of basic and diluted net income per common share follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands, except per share data)
Net income	$	13,001	$	12,388	$	30,968	$	34,425
Weighted average shares outstanding (1)		21,070		21,750		21,131		21,788
Stock units for deferred compensation plan for non-employee directors		133		113		131		118
Effect of stock options		42		70		49		76
Performance share units		21		34		23		32
Weighted average shares outstanding for calculation of diluted earnings per share		21,266		21,967		21,334		22,014
Net income per common share
Basic (1)	$	0.62	$	0.57	$	1.47	$	1.58
Diluted	$	0.61	$	0.56	$	1.45	$	1.56

(1) Basic net income per common share includes weighted average common shares outstanding during the period and participating share awards.

Weighted average stock options outstanding that were not considered in computing diluted net income per common share because they were anti-dilutive were zero for the three and six month periods ended June 30, 2022 and 2021, respectively.

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2022

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

6. Derivative Financial Instruments

We are required to record derivatives on our Condensed Consolidated Statements of Financial Condition as assets and liabilities measured at their fair value.  The accounting for increases and decreases in the value of derivatives depends upon the use of derivatives and whether the derivatives qualify for hedge accounting.

Our derivative financial instruments according to the type of hedge in which they are designated follows:

	June 30, 2022
	Notional Amount		Average Maturity (years)		Fair Value
	(Dollars in thousands)
Fair value hedge designation
Pay-fixed interest rate swap agreements - commercial	$	6,579		6.9	$	193
Pay-fixed interest rate swap agreements - securities available for sale		148,895		5.3		15,460
Total	$	155,474		5.4	$	15,653
No hedge designation
Rate-lock mortgage loan commitments	$	96,536		0.1	$	(5,072	)
Mandatory commitments to sell mortgage loans		98,986		0.1		556
Pay-fixed interest rate swap agreements - mortgage		31,000		7.1		1,283
Pay-fixed interest rate swap agreements - commercial		217,503		5.3		9,545
Pay-variable interest rate swap agreements - commercial		217,503		5.3		(9,545	)
Total	$	661,528		3.9	$	(3,233	)

	December 31, 2021
	Notional Amount		Average Maturity (years)		Fair Value
	(Dollars in thousands)
Fair value hedge designation
Pay-fixed interest rate swap agreements - commercial	$	6,753		7.4	$	(384	)
Pay-fixed interest rate swap agreements - securities available for sale		148,895		5.8		4,413
Total	$	155,648		5.9	$	4,029
No hedge designation
Rate-lock mortgage loan commitments	$	129,846		0.1	$	2,140
Mandatory commitments to sell mortgage loans		97,737		0.1		(68	)
Interest rate swaption agreement		10,000		0.2		186
Pay-fixed interest rate swap agreements - commercial		207,080		5.7		(5,179	)
Pay-variable interest rate swap agreements - commercial		207,080		5.7		5,179
Interest rate cap agreements		90,000		1.3		35
Total	$	741,743		3.4	$	2,293

We have entered into a pay-fixed interest rate swap to protect a portion of the fair value of a certain fixed rate commercial loan (‘‘Fair Value Hedge – Commercial Loan’’). As a result, changes in the fair value of the pay-fixed interest rate swap is expected to offset changes in the fair value of the fixed rate commercial loan due to fluctuations in interest rates. We record the fair value of Fair Value Hedge – Commercial Loan in accrued income and other assets and accrued expenses and other liabilities on our Condensed Consolidated Statements of Financial Condition. The hedged item (fixed rate commercial loan) is also recorded at fair value which offsets the adjustment to the Fair Value Hedge – Commercial Loan. On an ongoing basis, we adjust our Condensed Consolidated Statements of Financial Condition to reflect the then current fair value of both the Fair Value Hedge – Commercial Loan and the hedged item. The related gains or losses are reported in interest income – interest and fees on loans in our Condensed Consolidated Statements of Operations.

We have entered into pay-fixed interest rate swaps to protect a portion of the fair value of certain securities AFS (‘‘Fair Value Hedge – AFS Securities’’). As a result, the change in the fair value of the pay-fixed interest rate swaps is expected to offset a portion of the change in the fair value of the fixed rate securities AFS due to fluctuations in interest rates. We record the fair value of Fair Value Hedge – AFS Securities in accrued income and other assets and accrued expenses and other liabilities on our Condensed Consolidated Statements of Financial Condition. The hedged items (fixed rate securities AFS) are also recorded at fair value which offsets the adjustment to the Fair Value Hedge – AFS Securities. On an ongoing basis, we adjust our Condensed Consolidated Statements of Financial Condition to reflect the then current fair value of both the Fair Value Hedge – AFS Securities and the hedged item. The related gains or losses are reported in interest income – interest on securities – tax-exempt in our Condensed Consolidated Statements of Operations.

Certain financial derivative instruments have not been designated as hedges. The fair value of these derivative financial instruments has been recorded on our Condensed Consolidated Statements of Financial Condition and is adjusted on an ongoing basis to reflect their then current fair value. The changes in fair value of derivative financial instruments not designated as hedges are recognized in our Condensed Consolidated Statements of Operations.

In the ordinary course of business, we enter into rate-lock mortgage loan commitments with customers (“Rate-Lock Commitments”).  These commitments expose us to interest rate risk.  We also enter into mandatory commitments to sell mortgage loans (“Mandatory Commitments”) to reduce the impact of price fluctuations of mortgage loans held for sale and Rate-Lock Commitments.  Mandatory Commitments help protect our loan sale profit margin from fluctuations in interest rates. The changes in the fair value of Rate-Lock Commitments and Mandatory Commitments are recognized currently as part of net gains on mortgage loans in our Condensed Consolidated Statements of Operations.  We obtain market prices on Mandatory Commitments and Rate-Lock Commitments.  Net gains on mortgage loans, as well as net income may be more volatile as a result of these derivative instruments, which are not designated as hedges.

We have purchased swaption and pay-fixed interest rate swap agreements in an attempt to reduce the impact of price fluctuations of certain mortgage construction loans held for sale. The pay-fixed interest rate swap agreements are presented as “Interest rate swap agreements – mortgage” in the table above. The swaption agreement terminated during the first quarter of 2022. The changes in the fair value of the swaption and pay fixed interest rate swap agreements are recognized currently as part of net gains on mortgage loans in our Condensed Consolidated Statements of Operations.

We have a program that allows commercial loan customers to lock in a fixed rate for a longer period of time than we would normally offer for interest rate risk reasons.  We will enter into a variable rate commercial loan and an interest rate swap agreement with a customer and then enter into an offsetting interest rate swap agreement with an unrelated party.  The interest rate swap agreement fair values will generally move in opposite directions resulting in little or no net impact on our Condensed Consolidated Statements of Operations.  All of the interest rate swap agreements -  commercial in the table above with no hedge designation relate to this program.

The no hedge designation interest rate cap agreements in the table above had previously qualified for cash flow hedge accounting but were classified to a no hedge designation during 2020 and any changes in fair value since the transfers to the no hedge designation have been recognized in interest expense – other borrowings and subordinated debt and debentures in our Condensed Consolidated Statements of Operations. Also in 2020 it became probable that the forecasted transactions being hedged by these interest rate cap agreements would not occur by the end of the originally specified time period and all remaining unrealized losses included as a component of accumulated other comprehensive income (loss) were reclassified into earnings at that time. During the second quarter of 2022 we terminated $75.0 million of interest rate caps while $15.0 million matured.

The following tables illustrate the impact that the derivative financial instruments discussed above have on individual line items in the Condensed Consolidated Statements of Financial Condition for the periods presented:

Fair Values of Derivative Instruments

	Asset Derivatives						Liability Derivatives
	June 30, 2022			December 31, 2021			June 30, 2022			December 31, 2021
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
	(In thousands)
Derivatives designated as hedging instruments
Pay-fixed interest rate swap agreements	Other assets	$	15,653	Other assets	$	4,413	Other liabilities	$	-	Other liabilities	$	384
Derivatives not designated as hedging instruments
Rate-lock mortgage loan commitments	Other assets		-	Other assets		2,140	Other liabilities		5,072	Other liabilities		-
Mandatory commitments to sell mortgage loans	Other assets		556	Other assets		-	Other liabilities		-	Other liabilities		68
Pay-fixed interest rate swap agreements - mortgage	Other assets		1,283	Other assets		-	Other liabilities		-	Other liabilities		-
Interest rate swaption agreement	Other assets		-	Other assets		186	Other liabilities		-	Other liabilities		-
Pay-fixed interest rate swap agreements - commercial	Other assets		9,735	Other assets		165	Other liabilities		190	Other liabilities		5,344
Pay-variable interest rate swap agreements - commercial	Other assets		190	Other assets		5,344	Other liabilities		9,735	Other liabilities		165
Interest rate cap agreements	Other assets		-	Other assets		35	Other liabilities		-	Other liabilities		-
			11,764			7,870			14,997			5,577
Total derivatives		$	27,417		$	12,283		$	14,997		$	5,961

The effect of derivative financial instruments on the Condensed Consolidated Statements of Operations follows:

		Gain (Loss) Recognized in Income
	Location of  Gain (Loss)  Recognized  in Income	Three Month Periods Ended June 30,
		2022			2021
Fair Value Hedges		(In thousands)
Pay-fixed interest rate swap agreement - commercial	Interest and fees on loans	$	200		$	(92	)
Pay-fixed interest rate swap agreement - securities available for sale	Interest on securities available for sale - tax - exempt		3,501			(2,234	)
Total		$	3,701		$	(2,326	)
No hedge designation
Rate-lock mortgage loan commitments	Net gains on mortgage loans	$	(1,842	)	$	1,158
Mandatory commitments to sell mortgage loans	Net gains on mortgage loans		(1,350	)		(1,027	)
Pay-fixed interest rate swap agreements -  mortgage	Net gains on mortgage loans		656			-
Interest rate swaption agreement	Net gains on mortgage loans		-			(27	)
Pay-fixed interest rate swap agreements -  commercial	Interest income		5,147			(448	)
Pay-variable interest rate swap agreements - commercial	Interest income		(5,147	)		448
Pay-fixed interest rate swap agreements	Interest expense		-			120
Interest rate cap agreements	Interest expense		23			(4	)
Purchased options	Interest expense		-			11
Written options	Interest expense		-			(11	)
Total		$	(2,513	)	$	220

		Gain (Loss) Recognized in Income
	Location of  Gain (Loss)  Recognized  in Income	Six Month Periods Ended June 30,
		2022			2021
		(In thousands)
Fair Value Hedges
Pay-fixed interest rate swap agreement - commercial	Interest and fees on loans	$	576		$	260
Pay-fixed interest rate swap agreement - securities available for sale	Interest on securities available for sale - tax - exempt		11,048			2,639
Total		$	11,624		$	2,899
No hedge designation
Rate-lock mortgage loan commitments	Net gains on mortgage loans	$	(7,212	)	$	(2,664	)
Mandatory commitments to sell mortgage loans	Net gains on mortgage loans		624			810
Pay-fixed interest rate swap agreements - mortgage	Net gains on mortgage loans		1,283			-
Interest rate swaption agreement	Net gains on mortgage loans		(186	)		(27	)
Pay-fixed interest rate swap agreements - commercial	Interest income		14,724			2,827
Pay-variable interest rate swap agreements - commercial	Interest income		(14,724	)		(2,827	)
Pay-fixed interest rate swap agreements	Interest expense		-			238
Interest rate cap agreements	Interest expense		245			11
Purchased options	Interest expense		-			29
Written options	Interest expense		-			(29	)
Total		$	(5,246	)	$	(1,632	)

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Goodwill and Other Intangibles

6 Months Ended

Jun. 30, 2022

Goodwill and Other Intangibles [Abstract]

Goodwill and Other Intangibles

7. Goodwill and Other Intangibles

The following table summarizes intangible assets, net of amortization:

	June 30, 2022				December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(In thousands)
Amortized intangible assets - core deposits	$	11,916	$	9,045	$	11,916	$	8,580
Unamortized intangible assets - goodwill	$	28,300			$	28,300

A summary of estimated core deposits intangible amortization at June 30, 2022 follows:

	(In thousands)
Six months ending December 31, 2022		320
2023		547
2024		516
2025		487
2026		460
2027 and thereafter		541
Total	$	2,871

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Share Based Compensation

6 Months Ended

Jun. 30, 2022

Share Based Compensation [Abstract]

Share Based Compensation

8. Share Based Compensation

We maintain share based payment plans that include a non-employee director stock purchase plan and a long-term incentive plan that permits the issuance of share based compensation, including stock options and non-vested share awards. The long-term incentive plan, which is shareholder approved, permits the grant of additional share based awards for up to 0.6 million shares of common stock as of June 30, 2022.  The non-employee director stock purchase plan permits the issuance of additional share based payments for up to 0.1 million shares of common stock as of June 30, 2022. Share based awards and payments are measured at fair value at the date of grant and are expensed over the requisite service period. Common shares issued upon exercise of stock options come from currently authorized but unissued shares.

A summary of restricted stock and performance stock units (“PSU”) granted pursuant to our long-term incentive plan follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Restricted stock		2,500		10,000		58,787		85,584
PSU		-		-		19,748		23,981

The shares of restricted stock and PSUs shown in the above table cliff vest after a period of three years.  The performance criteria of the PSUs is split evenly between a comparison of (i) our total shareholder return and (ii) our return on average assets each over the three year period starting on the grant date to these same criteria over that period to an index of our banking peers.

Our directors may elect to receive all or a portion of their cash retainer fees in the form of common stock (either on a current basis or on a deferred basis) pursuant to the non-employee director stock purchase plan referenced above. Shares equal in value to that portion of each director’s fees that he or she has elected to receive in stock on a current basis are issued each quarter and vest immediately. Shares issued on a deferred basis are credited at the rate of 90% of the current fair value of our common stock and vest immediately. During the six month periods ended June 30, 2022 and 2021 we issued 0.008 million and 0.009 million shares, respectively and expensed their value during those same periods.

Total compensation expense recognized for grants pursuant to our long-term incentive plan was $0.4 million and $0.9 million during the three and six month periods ended June 30, 2022, respectively, and was $0.5 million and $0.8 million during the same periods in 2021, respectively.  The corresponding tax benefit relating to this expense was $0.1 million and $0.2 million for the three and six month periods ended June 30, 2022, respectively and $0.1 million and $0.2 million for the same periods in 2021. Total expense recognized for non-employee director share based payments was $0.09 million and $0.19 million during the three and six month periods ended June 30, 2022, respectively, and was $0.09 million and $0.19 million during the same periods in 2021, respectively.  The corresponding tax benefit relating to this expense was $0.02 million and $0.04 million for the three and six month periods ended June 30, 2022, respectively and $0.02 million and $0.04 million during the same periods in 2021.

At June 30, 2022, the total expected compensation cost related to non-vested restricted stock and PSUs not yet recognized was $3.22 million.  The weighted-average period over which this amount will be recognized is 2.1 years.

A summary of outstanding stock option grants and related transactions follows:

	Number of Shares			Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregated Intrinsic Value
								(In thousands)
Outstanding at January 1, 2022		80,839		$	5.76
Granted		-
Exercised		(21,632	)		3.33
Forfeited		-
Expired		-
Outstanding at June 30, 2022		59,207		$	6.65		1.4	$	750
Vested and expected to vest at June 30, 2022		59,207		$	6.65		1.4	$	750
Exercisable at June 30, 2022		59,207		$	6.65		1.4	$	750

A summary of outstanding non-vested restricted stock and PSUs and related transactions follows:

	Number of Shares			Weighted- Average Grant Date Fair Value
Outstanding at January 1, 2022		234,226		$	21.64
Granted		78,535			26.31
Vested		(55,875	)		22.92
Forfeited		(10,200	)		22.14
Outstanding at June 30, 2022		246,686		$	22.81

Certain information regarding options exercised during the periods follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)				(In thousands)
Intrinsic value	$	111	$	388	$	424	$	701
Cash proceeds received	$	22	$	44	$	72	$	104
Tax benefit realized	$	23	$	81	$	89	$	147

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Income Tax

6 Months Ended

Jun. 30, 2022

Income Tax [Abstract]

Income Tax

9. Income Tax

Income tax expense was $2.9 million and $2.7 million during the three month periods ended June 30, 2022 and 2021, respectively and $7.0 million and $7.8 million during the six months ended June 30, 2022 and 2021, respectively. Our actual federal income tax expense is different than the amount computed by applying our statutory income tax rate to our income before income tax primarily due to tax-exempt interest income and tax-exempt income from the increase in the cash surrender value on life insurance.  In addition, the three and six month periods ending June 30, 2022 include reductions of $0.02 million and $0.08 million, respectively, of income tax expense related to the impact of the excess value of stock awards that vested and stock options that were exercised as compared to the initial fair values that were expensed. These amounts during the same periods in 2021 were $0.07 million and $0.17 million, respectively.

We assess whether a valuation allowance should be established against our deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard.  The ultimate realization of this asset is primarily based on generating future income.  We concluded at June 30, 2022, June 30, 2021 and December 31, 2021 that the realization of substantially all of our deferred tax assets continues to be more likely than not.

At both June 30, 2022 and December 31, 2021, we had approximately $0.2 million, respectively, of gross unrecognized tax benefits.  We do not expect the total amount of unrecognized tax benefits to significantly increase or decrease during the remainder of 2022.

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Regulatory Matters

6 Months Ended

Jun. 30, 2022

Regulatory Matters [Abstract]

Regulatory Matters

10. Regulatory Matters

Capital guidelines adopted by federal and state regulatory agencies and restrictions imposed by law limit the amount of cash dividends our Bank can pay to us. Under these guidelines, the amount of dividends that may be paid in any calendar year is limited to the Bank’s current year net profits, combined with the retained net profits of the preceding two years. Further, the Bank cannot pay a dividend at any time that it has negative undivided profits. As of June 30, 2022, the Bank had positive undivided profits of $116.5 million. It is not our intent to have dividends paid in amounts that would reduce the capital of our Bank to levels below those which we consider prudent or that would not be in accordance with guidelines of regulatory authorities.

We are also subject to various regulatory capital requirements. The prompt corrective action regulations establish quantitative measures to ensure capital adequacy and require minimum amounts and ratios of total, Tier 1, and common equity Tier 1 capital to risk-weighted assets and Tier 1 capital to average assets. Failure to meet minimum capital requirements can result in certain mandatory, and possibly discretionary, actions by regulators that could have a material effect on our interim condensed consolidated financial statements. In addition, capital adequacy rules include a common equity Tier 1 capital conservation buffer of 2.5% of risk-weighted assets that applies to all supervised financial institutions. To avoid limits on capital distributions and certain discretionary bonus payments we must meet the minimum ratio for adequately capitalized institutions plus the buffer. Under capital adequacy guidelines, we must meet specific capital requirements that involve quantitative measures as well as qualitative judgments by the regulators. The most recent regulatory filings as of June 30, 2022 and December 31, 2021, categorized our Bank as well capitalized. Management is not aware of any conditions or events that would have changed the most recent Federal Deposit Insurance Corporation (“FDIC”) categorization.

Our actual capital amounts and ratios follow (1):

	Actual					Minimum for Adequately Capitalized Institutions					Minimum for Well-Capitalized Institutions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
June 30, 2022
Total capital to risk-weighted assets
Consolidated	$	508,950		13.64	%	$	298,424		8.00	%	NA		NA
Independent Bank		456,878		12.26			298,219		8.00		$	372,774		10.00	%
Tier 1 capital to risk-weighted assets
Consolidated	$	422,723		11.33	%	$	223,818		6.00	%	NA		NA
Independent Bank		410,651		11.02			223,664		6.00		$	298,219		8.00	%
Common equity tier 1 capital to risk-weighted assets
Consolidated	$	384,321		10.30	%	$	167,864		4.50	%	NA		NA
Independent Bank		410,651		11.02			167,748		4.50		$	242,303		6.50	%
Tier 1 capital to average assets
Consolidated	$	422,723		8.74	%	$	193,472		4.00	%	NA		NA
Independent Bank		410,651		8.49			193,575		4.00		$	241,969		5.00	%
December 31, 2021
Total capital to risk-weighted assets
Consolidated	$	488,495		14.53	%	$	268,991		8.00	%	NA		NA
Independent Bank		438,352		13.05			268,808		8.00		$	336,011		10.00	%
Tier 1 capital to risk-weighted assets
Consolidated	$	406,645		12.09	%	$	201,743		6.00	%	NA		NA
Independent Bank		396,351		11.80			201,606		6.00		$	268,808		8.00	%
Common equity tier 1 capital to risk-weighted assets
Consolidated	$	368,277		10.95	%	$	151,307		4.50	%	NA		NA
Independent Bank		396,351		11.80			151,205		4.50		$	218,407		6.50	%
Tier 1 capital to average assets
Consolidated	$	406,645		8.79	%	$	185,034		4.00	%	NA		NA
Independent Bank		396,351		8.57			185,077		4.00		$	231,347		5.00	%

(1) These ratios do not reflect a capital conservation buffer of 2.50% at June 30, 2022 and December 31, 2021.

NA - Not applicable

The components of our regulatory capital are as follows:

	Consolidated						Independent Bank
	June 30, 2022			December 31, 2021			June 30, 2022			December 31, 2021
	(In thousands)
Total shareholders' equity	$	331,134		$	398,484		$	357,464		$	426,558
Add (deduct)
Accumulated other comprehensive income (loss) for regulatory purposes		79,206			(6,298	)		79,206			(6,298	)
Goodwill and other intangibles		(31,171	)		(31,636	)		(31,171	)		(31,636	)
CECL (1)		5,152			7,727			5,152			7,727
Common equity tier 1 capital		384,321			368,277			410,651			396,351
Qualifying trust preferred securities		38,402			38,368			-			-
Tier 1 capital		422,723			406,645			410,651			396,351
Subordinated debt		40,000			40,000			-			-
Allowance for credit losses and allowance for unfunded lending commitments limited to 1.25% of total risk-weighted assets		46,227			41,850			46,227			42,001
Total risk-based capital	$	508,950		$	488,495		$	456,878		$	438,352

(1) We elected the three year CECL transition method for regulatory purposes.

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Fair Value Disclosures

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Disclosures

11. Fair Value Disclosures

FASB ASC topic 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an 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. FASB ASC topic 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Valuation is based upon quoted prices for identical instruments traded in active markets. Level 1 instruments include securities traded on active exchange markets, such as the New York Stock Exchange, as well as U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets.

Level 2: Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 2 instruments include securities traded in less active dealer or broker markets.

Level 3: Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.

We used the following methods and significant assumptions to estimate fair value:

Securities:  Where quoted market prices are available in an active market, securities are classified as Level 1 of the valuation hierarchy.  We currently do not have any Level 1 securities. If quoted market prices are not available for the specific security, then fair values are estimated by (1) using quoted market prices of securities with similar characteristics, (2) matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices, or (3) a discounted cash flow analysis whose significant fair value inputs can generally be verified and do not typically involve judgment by management. These securities are classified as Level 2 of the valuation hierarchy and primarily include agency securities, private label mortgage-backed securities, other asset backed securities, obligations of states and political subdivisions, trust preferred securities, corporate securities and foreign government securities.

Loans held for sale:  The fair value of mortgage loans held for sale, carried at fair value is based on agency cash window loan pricing for comparable assets (recurring Level 2).

Collateral dependent loans with specific loss allocations based on collateral value:  From time to time, certain collateral dependent loans will have an ACL established. When the fair value of the collateral is based on an appraised value or when an appraised value is not available we record the collateral dependent loan as nonrecurring Level 3.  These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments can be significant and thus will typically result in a Level 3 classification of the inputs for determining fair value.

Other real estate: At the time of acquisition, other real estate is recorded at fair value, less estimated costs to sell, which becomes the property’s new basis. Subsequent write-downs to reflect declines in value since the time of acquisition may occur from time to time and are recorded in net gains on other real estate and repossessed assets, which is part of non-interest expense - other in the Condensed Consolidated Statements of Operations. The fair value of the property used at and subsequent to the time of acquisition is typically determined by a third party appraisal of the property. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments can be significant and typically result in a Level 3 classification of the inputs for determining fair value.

Appraisals for both collateral-dependent loans and other real estate  are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by us. Once received, an independent third party, or a member of our Collateral Evaluation Department (for commercial properties), or a member of our Special Assets Group (for residential properties) reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. We compare the actual selling price of collateral that has been sold to the most recent appraised value of our properties to determine what additional adjustment, if any, should be made to the appraisal value to arrive at fair value. For commercial and residential properties we typically discount an appraisal to account for various factors that the appraisal excludes in its assumptions. These additional discounts generally do not result in material adjustments to the appraised value.

Capitalized mortgage loan servicing rights: The fair value of capitalized mortgage loan servicing rights is based on a valuation model used by an independent third party that calculates the present value of estimated net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income. Certain model assumptions are generally unobservable and are based upon the best information available including data relating to our own servicing portfolio, reviews of mortgage servicing assumption and valuation surveys and input from various mortgage servicers and, therefore, are recorded as Level 3.  Management evaluates the third party valuation for reasonableness each quarter as part of our financial reporting control processes.

Derivatives: The fair value of rate-lock mortgage loan commitments is based on agency cash window loan pricing for comparable assets and the fair value of mandatory commitments to sell mortgage loans is based on mortgage backed security pricing for comparable assets (recurring Level 2). The fair value of interest rate swap, interest rate cap and swaption agreements are derived from proprietary models which utilize current market data.  The significant fair value inputs can generally be observed in the market place and do not typically involve judgment by management (recurring Level 2).

Assets and liabilities measured at fair value, including financial assets for which we have elected the fair value option, were as follows:

			Fair Value Measurements Using
	Fair Value Measure- ments		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Un- observable Inputs (Level 3)
	(In thousands)
June 30, 2022:
Measured at Fair Value on a Recurring Basis
Assets
Securities available for sale
U.S. agency	$	13,991	$	-	$	13,991	$	-
U.S. agency residential mortgage-backed		100,689		-		100,689		-
U.S. agency commercial mortgage-backed		15,591		-		15,591		-
Private label mortgage-backed		99,839		-		99,839		-
Other asset backed		234,235		-		234,235		-
Obligations of states and political subdivisions		312,915		-		312,915		-
Corporate		81,009		-		81,009		-
Trust preferred		936		-		936		-
Foreign government		499		-		499		-
Loans held for sale, carried at fair value		31,400		-		31,400		-
Capitalized mortgage loan servicing rights		39,477		-		-		39,477
Derivatives (1)		27,417		-		27,417		-
Liabilities
Derivatives (2)		14,997		-		14,997		-
Measured at Fair Value on a Non-recurring Basis:
Assets
Collateral dependent loans (3)
Commercial
Commercial and industrial		231		-		-		231
Commercial real estate		56		-		-		56
Mortgage
1-4 family owner occupied - non-jumbo		376		-		-		376
1-4 family non-owner occupied		7		-		-		7
1-4 family - 2nd lien		62		-		-		62
Resort lending		25		-		-		25
Installment
Boat lending		66		-		-		66
Recreational vehicle lending		33		-		-		33
Other		101		-		-		101

(1) Included in accrued income and other assets

(2) Included in accrued expenses and other liabilities

(3) Only includes individually evaluated loans with specific loss allocations based on collateral value.

			Fair Value Measurements Using
	Fair Value Measure- ments		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Un- observable Inputs (Level 3)
	(In thousands)
December 31, 2021:
Measured at Fair Value on a Recurring Basis
Assets
Securities available for sale
U.S. agency	$	34,674	$	-	$	34,674	$	-
U.S. agency residential mortgage-backed		307,985		-		307,985		-
U.S. agency commercial mortgage-backed		22,926		-		22,926		-
Private label mortgage-backed		102,615		-		102,615		-
Other asset backed		216,170		-		216,170		-
Obligations of states and political subdivisions		576,076		-		576,076		-
Corporate		149,959		-		149,959		-
Trust preferred		1,919		-		1,919		-
Foreign government		506		-		506		-
Loans held for sale, carried at fair value		55,470		-		55,470		-
Capitalized mortgage loan servicing rights		26,232		-		-		26,232
Derivatives (1)		12,283		-		12,283		-
Liabilities
Derivatives (2)		5,961		-		5,961		-
Measured at Fair Value on a Non-recurring Basis:
Assets
Collateral dependent loans (3)
Commercial
Commercial and industrial		274		-		-		274
Commercial real estate		65		-		-		65
Mortgage
1-4 family owner occupied - non-jumbo		516		-		-		516
1-4 family non-owner occupied		130		-		-		130
1-4 family - 2nd lien		121		-		-		121
Resort lending		77		-		-		77
Installment
Boat lending		51		-		-		51
Recreational vehicle lending		77		-		-		77
Other		45		-		-		45

(1) Included in accrued income and other assets

(2) Included in accrued expenses and other liabilities

(3) Only includes impaired loans with specific loss allocations based on collateral value.

Changes in fair values for financial assets which we have elected the fair value option for the periods presented were as follows:

	Changes in Fair Values for the Six- Month Periods Ended June 30 for items Measured at Fair Value Pursuant to Election of the Fair Value Option
	Net Gains on Assets			Mortgage			Total Change in Fair Values Included in Current
	Mortgage Loans			Loan Servicing, net			Period Earnings
	(In thousands)
2022
Loans held for sale	$	(1,806	)	$	-		$	(1,806	)
Capitalized mortgage loan servicing rights		-			9,596			9,596
2021
Loans held for sale		(2,400	)		-			(2,400	)
Capitalized mortgage loan servicing rights		-			(581	)		(581	)

For those items measured at fair value pursuant to our election of the fair value option, interest income is recorded within the Condensed Consolidated Statements of Operations based on the contractual amount of interest income earned on these financial assets and dividend income is recorded based on cash dividends received.

The following represent impairment charges recognized during the three and six month periods ended June 30, 2022 and 2021 relating to assets measured at fair value on a non-recurring basis:

• Loans that are individually evaluated using the fair value of collateral for collateral dependent loans had a carrying amount of $1.0 million, which is net of a valuation allowance of $0.4 million at June 30, 2022, and had a carrying amount of $1.4 million, which is net of a valuation allowance of  $0.6  million  at December 31, 2021.  The provision for credit losses included in our results of operations relating to collateral dependent loans was a net expense of $0.1 million and $0.1 million for the three month periods ending June 30, 2022 and 2021, respectively, and a net expense of $0.2 million and $0.1 million for the six month periods ending June 30, 2022 and 2021, respectively.

• Other real estate, which is measured using the fair value of the property, had a carrying amount of zero which is net of a valuation allowance of $0.03 million at June 30, 2022, and a carrying amount of zero which is net of a valuation allowance of $0.03 million, at December 31, 2021. Charges included in our results of operations relating to other real estate measured at fair value were all zero during the three and six month periods ended June 30, 2022 and 2021.

A reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) follows:

	Capitalized Mortgage Loan Servicing Rights
	Three Months Ended June 30,					Six Months Ended June 30,
	2022		2021			2022		2021
	(In thousands)					(In thousands)
Beginning balance	$	35,933	$	23,530		$	26,232	$	16,904
Total gains (losses) realized and unrealized:
Included in results of operations		2,038		(3,838	)		9,596		(581	)
Included in other comprehensive loss		-		-			-		-
Purchases, issuances, settlements, maturities and calls		1,506		2,739			3,649		6,108
Transfers in and/or out of Level 3		-		-			-		-
Ending balance	$	39,477	$	22,431		$	39,477	$	22,431
Amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at June 30	$	2,038	$	(3,838	)	$	9,596	$	(581	)

The fair value of our capitalized mortgage loan servicing rights has been determined based on a valuation model used by an independent third party as discussed above.  The significant unobservable inputs used in the fair value measurement of the capitalized mortgage loan servicing rights are discount rate, cost to service, ancillary income, float rate and prepayment rate.  Significant changes in all five of these assumptions in isolation would result in significant changes to the value of our capitalized mortgage loan servicing rights.  Quantitative information about our Level 3 fair value measurements measured on a recurring basis follows:

	Asset Fair Value		Valuation Technique	Unobservable Inputs	Range			Weighted Average
	(In thousands)
June 30, 2022
Capitalized mortgage loan servicing rights	$	39,477	Present value of net servicing revenue	Discount rate	9.99% to 14.11		%		10.10	%
				Cost to service	$	67 to $194		$	78
				Ancillary income	20 to 35				21
				Float rate		3.08	%		3.08	%
				Prepayment rate	7.04% to 31.92		%		7.90	%
December 31, 2021
Capitalized mortgage loan servicing rights	$	26,232	Present value of net servicing revenue	Discount rate	10.00% to 13.00		%		10.07	%
				Cost to service	$	67 to $281		$	78
				Ancillary income	20 to 30				21
				Float rate		1.36	%		1.36	%
				Prepayment rate	7.02% to 44.21		%		13.92	%

Quantitative information about Level 3 fair value measurements measured on a non-recurring basis follows:

	Asset Fair Value		Valuation Technique	Unobservable Inputs	Range		Weighted Average
	(In thousands)
June 30, 2022
Collateral dependent loans
Commercial	$	287	Sales comparison approach	Adjustment for differences between comparable sales	(12.5)% to 12.0	%		1.1	%
Mortgage and Installment(1)		670	Sales comparison approach	Adjustment for differences between comparable sales	(25.5) to 20.5			(1.7	)
December 31, 2021
Collateral dependent loans
Commercial	$	339	Sales comparison approach	Adjustment for differences between comparable sales	(12.5)% to 12.0	%		1.5	%
Mortgage and Installment(1)		1,017	Sales comparison approach	Adjustment for differences between comparable sales	(30.1) to 29.3			0.2

(1) In addition to the valuation techniques and unobservable inputs discussed above, at June 30, 2022 and December 31, 2021 certain collateral dependent installment loans totaling approximately $0.20 million and $0.17 million, respectively, are secured by collateral other than real estate.  For the majority of these loans, we apply internal discount rates to industry valuation guides.

The following table reflects the difference between the aggregate fair value and the aggregate remaining contractual principal balance outstanding for loans held for sale for which the fair value option has been elected for the periods presented.

	Aggregate Fair Value		Difference			Contractual Principal
	(In thousands)
Loans held for sale
June 30, 2022	$	31,400	$	(755	)	$	32,155
December 31, 2021		55,470		1,051			54,419

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Fair Values of Financial Instruments

6 Months Ended

Jun. 30, 2022

Fair Values of Financial Instruments [Abstract]

Fair Values of Financial Instruments

12. Fair Values of Financial Instruments

Most of our assets and liabilities are considered financial instruments. Many of these financial instruments lack an available trading market and it is our general practice and intent to hold the majority of our financial instruments to maturity. Significant estimates and assumptions were used to determine the fair value of financial instruments. These estimates are subjective in nature, involving uncertainties and matters of judgment, and therefore, fair values may not be a precise estimate. Changes in assumptions could significantly affect the estimates.

Estimated fair values have been determined using available data and methodologies that are considered suitable for each category of financial instrument. For instruments with adjustable interest rates which reprice frequently and without significant credit risk, it is presumed that estimated fair values approximate the recorded book balances.

The estimated recorded book balances and fair values follow:

					Fair Value Using
	Recorded Book Balance		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Un- observable Inputs (Level 3)
	(In thousands)
June 30, 2022
Assets
Cash and due from banks	$	56,516	$	56,516	$	56,516	$	-	$	-
Interest bearing deposits		2,970		2,970		2,970		-		-
Securities available for sale		859,704		859,704		-		859,704		-
Securities held to maturity		381,608		359,701		-		359,701		-
Federal Home Loan Bank and Federal
Reserve Bank Stock		17,653	NA		NA		NA		NA
Net loans and loans held for sale		3,242,367		2,991,614		-		31,400		2,960,214
Accrued interest receivable		13,923		13,923		-		6,228		7,695
Derivative financial instruments		27,417		27,417		-		27,417		-
Liabilities
Deposits with no stated maturity (1)	$	3,904,324	$	3,904,324	$	3,904,324	$	-	$	-
Deposits with stated maturity (1)		386,250		381,095		-		381,095		-
Other borrowings		25,507		25,506		-		25,506		-
Subordinated debt		39,395		42,464		-		42,464		-
Subordinated debentures		39,626		38,034		-		38,034		-
Accrued interest payable		588		588		73		515		-
Derivative financial instruments		14,997		14,997		-		14,997		-
December 31, 2021
Assets
Cash and due from banks	$	51,069	$	51,069	$	51,069	$	-	$	-
Interest bearing deposits		58,404		58,404		58,404		-		-
Securities available for sale		1,412,830		1,412,830		-		1,412,830		-
Federal Home Loan Bank and Federal
Reserve Bank Stock		18,427	NA		NA		NA		NA
Net loans and loans held for sale		2,948,074		2,931,079		35,233		55,470		2,840,376
Accrued interest receivable		12,865		12,865		1		6,028		6,836
Derivative financial instruments		12,283		12,283		-		12,283		-
Liabilities
Deposits with no stated maturity (1)	$	3,781,298	$	3,781,298	$	3,781,298	$	-	$	-
Deposits with stated maturity (1)		335,792		336,006		-		336,006		-
Other borrowings		30,009		30,155		-		30,155		-
Subordinated debt		39,357		44,999		-		44,999		-
Subordinated debentures		39,592		33,866		-		33,866		-
Accrued interest payable		497		497		67		430		-
Derivative financial instruments		5,961		5,961		-		5,961		-

(1) Deposits with no stated maturity include reciprocal deposits with a recorded book balance of $585.376 million and $562.210 million at June 30, 2022 and December 31, 2021, respectively. Deposits with a stated maturity include reciprocal deposits with a recorded book balance of $29.828 million and $24.416 million at June 30, 2022 and December 31, 2021, respectively.

The fair values for commitments to extend credit and standby letters of credit are estimated to approximate their aggregate book balance, which is nominal and therefore are not disclosed.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale the entire holdings of a particular financial instrument.

Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business, the value of future earnings attributable to off-balance sheet activities and the value of assets and liabilities that are not considered financial instruments.

Fair value estimates for deposit accounts do not include the value of the core deposit intangible asset resulting from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market.

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Contingencies

6 Months Ended

Jun. 30, 2022

Contingencies [Abstract]

Contingencies

13. Contingencies

Pandemic

The COVID-19 pandemic has created and may continue to create and contribute to significant economic uncertainty and market disruptions. Throughout 2020 and 2021, the volatility created by the pandemic and responses to the pandemic impacted our performance, customers, and the markets we serve. These effects continued to decline into the second quarter of 2022, but there remains a great deal of uncertainty with respect to whether and the degree to which they will have an impact on future conditions and performance.

Based on this uncertainty, it is difficult to predict the extent to which the pandemic may continue to adversely impact our business, results of operations, financial condition, and customers. The potential impacts may include, but are not limited to:

• difficulties encountered by our business customers in addressing the effects of the pandemic may cause increases in loan delinquencies, foreclosures and defaults;

• increases in our allowance for credit losses may be necessary; 

• declines in collateral values may occur;

• third party disruptions may occur, including outages at network providers, on-line banking vendors and other suppliers;

• there is increased cyber and payment fraud risk, as cybercriminals attempt to profit from the disruption, given increased online and remote activity;

• we may experience operational failures due to changes in our normal business practices necessitated by the pandemic and related governmental actions; and/or

• our production and efficiency may suffer due to employee illnesses and/or employees having to work remotely.

Given the ongoing uncertainty with respect to the pandemic, these risk factors may continue to some degree for an unknown period of time.

Economic uncertainty also arises as a result of pressures from rising energy prices, heightened inflation, and concerns over the Russia-Ukraine war. Inflation remains elevated, reflecting supply and demand imbalances  related to,  among other pressures,  the pandemic and higher energy prices, and it exceeded an annual rate of 8.0% in the second quarter of 2022, well above the Federal Reserve Board’s target inflation rate. In June 2022, the Federal Reserve Board also increased short-term interest rates by 75 basis points and indicated that ongoing increases will continue to occur in 2022 in order to combat inflation. Further, the Russia-Ukraine war and related events are likely to create additional pressure on inflation and economic activity. The resulting responses by the U.S. and other countries (including the imposition of economic sanctions), and the potential for wider conflict has increased volatility and uncertainty in global financial markets, and could result in significant market disruptions, including in our customers’ industries or sectors.

The impacts on global economic conditions caused by higher inflation, rising energy prices, the Russia-Ukraine war, and the COVID-19 pandemic have created significant uncertainty about the future economic environment, which will continue to evolve and may continue to impact our business and results in 2022 and in future periods. The extent to which these pressures may impact our business, results of operations, asset valuations, financial condition, and customers will depend on future developments, which continue to be highly uncertain and difficult to predict. Material adverse impacts may include all or a combination of valuation impairments on our intangible assets, securities available for sale, loans, capitalized mortgage loan servicing rights or deferred tax assets.

Certain consumer-driven industries (including restaurants, hotels, retail, fitness, and other industries) have experienced increased stress and have been more adversely impacted by the COVID-19 pandemic and related consumer trends, labor shortages and supply chain disruptions. We believe that the following concentrations within our commercial loan portfolio represent higher potential risk in the current economic environment. The balances below are as of June 30, 2022.

	Amount		% of Total Loans
	(Dollars in millions)
Commercial and industrial portfolio segment:
Retail	$	79		2.4	%
Hotel		42		1.3
Food service		38		1.2
		159		4.9
Commercial real estate portfolio segment:
Retail		111		3.4
Office		74		2.3
Multifamily		56		1.7
		241		7.4
Total	$	400		12.3	%

At June 30, 2022, we had no commercial loans in forbearance. We continue to closely monitor and analyze the higher risk segments within our portfolio, and senior management is cautiously optimistic that the Company is positioned to continue managing the impact of the varied set of risks and uncertainties currently impacting the global economy. However, a high degree of uncertainty still exists with respect to the impact of the fluid global economic conditions on the future performance of our loan portfolio, including these higher risk segments.

Litigation

We are involved in various litigation matters in the ordinary course of business. At the present time, we do not believe any of these matters will have a significant impact on our interim condensed consolidated financial position or results of operations. The aggregate amount we have accrued for losses we consider probable as a result of these litigation matters is immaterial. However, because of the inherent uncertainty of outcomes from any litigation matter, we believe it is reasonably possible we may incur losses in addition to the amounts we have accrued.  At this time, we estimate the maximum amount of additional losses that are reasonably possible is insignificant.  However, because of a number of factors, including the fact that certain of these litigation matters are still in their early stages, this maximum amount may change in the future.

The litigation matters described in the preceding paragraph primarily include claims that have been brought against us for damages, but do not include litigation matters where we seek to collect amounts owed to us by third parties (such as litigation initiated to collect delinquent loans). These excluded, collection-related matters may involve claims or counterclaims by the opposing party or parties, but we have excluded such matters from the disclosure contained in the preceding paragraph in all cases where we believe the possibility of us paying damages to any opposing party is remote.

Visa Stock

We own 12,566 shares of VISA Class B common stock. At the present time, these shares can only be sold to other Class B shareholders. As a result, there has generally been limited transfer activity in private transactions between buyers and sellers. Given the limited activity that we have become aware of  and the continuing uncertainty regarding the likelihood, ultimate timing and eventual exchange rate for Class B shares into Class A shares, we continue to carry these shares at zero, representing cost basis less impairment. However, given the current conversion ratio of 1.6059 Class A shares for every 1 Class B share and the closing price of VISA Class A shares on July 18, 2022 of $207.21 per share, our 12,566 Class B shares would have a current “value” of approximately $4.2 million. We continue to monitor Class B trading activity and the status of the resolution of certain litigation matters at VISA that would trigger the conversion of Class B common shares into Class A common shares, which would not have any trading restrictions.

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Accumulated Other Comprehensive Income (Loss) ("AOCIL")

6 Months Ended

Jun. 30, 2022

Accumulated Other Comprehensive Income (Loss) ("AOCIL") [Abstract]

Accumulated Other Comprehensive Income (Loss) ("AOCIL")

14. Accumulated Other Comprehensive Income (Loss) (“AOCIL”)

A summary of changes in AOCIL follows:

	Unrealized Gains (Losses) on Securities AFS			Unrealized Losses on Securities Transferred to Securities HTM (1)			Dispropor- tionate Tax Effects from Securities AFS			Total
	(In thousands)
For the three months ended June 30, 2022
Balances at beginning of period	$	(48,616	)	$	-		$	(5,798	)	$	(54,414	)
Other comprehensive loss before reclassifications		(10,447	)		(19,870	)		-			(30,317	)
Amounts reclassified from AOCIL		(272	)		-			-			(272	)
Net current period other comprehensive loss		(10,719	)		(19,870	)		-			(30,589	)
Balances at end of period	$	(59,335	)	$	(19,870	)	$	(5,798	)	$	(85,003	)
2021
Balances at beginning of period	$	10,136		$	-		$	(5,798	)	$	4,338
Other comprehensive income before reclassifications		4,078			-			-			4,078
Amounts reclassified from AOCIL		-			-			-			-
Net current period other comprehensive income		4,078			-			-			4,078
Balances at end of period	$	14,214		$	-		$	(5,798	)	$	8,416
For the six months ended June 30, 2022
Balances at beginning of period	$	6,299		$	-		$	(5,798	)	$	501
Other comprehensive loss before reclassifications		(65,417	)		(19,870	)		-			(85,287	)
Amounts reclassified from AOCIL		(217	)		-			-			(217	)
Net current period other comprehensive loss		(65,634	)		(19,870	)		-			(85,504	)
Balances at end of period	$	(59,335	)	$	(19,870	)	$	(5,798	)	$	(85,003	)
2021
Balances at beginning of period	$	15,822		$	-		$	(5,798	)	$	10,024
Other comprehensive loss before reclassifications		(2,727	)		-			-			(2,727	)
Amounts reclassified from AOCIL		1,119			-			-			1,119
Net current period other comprehensive loss		(1,608	)		-			-			(1,608	)
Balances at end of period	$	14,214		$	-		$	(5,798	)	$	8,416

(1) Represents the remaining unrealized loss to be accreted on securities that were transferred from AFS to HTM on April 1, 2022.

The disproportionate tax effects from securities AFS arose due to tax effects of other comprehensive income (“OCI”) in the presence of a valuation allowance against our deferred tax assets and a pretax loss from operations.  Generally, the amount of income tax expense or benefit allocated to operations is determined without regard to the tax effects of other categories of income or loss, such as OCI. However, an exception to the general rule is provided when, in the presence of a valuation allowance against deferred tax assets, there is a pretax loss from operations and pretax income from other categories in the current period.  In such instances, income from other categories must offset the current loss from operations, the tax benefit of such offset being reflected in operations. Release of material disproportionate tax effects from other comprehensive income to earnings is done by the portfolio method whereby the effects will remain in AOCIL as long as we carry a more than inconsequential portfolio of securities AFS.

A summary of reclassifications out of each component of AOCIL for the three months ended June 30 follows:

AOCIL Component	Amount Reclassified From AOCIL			Affected Line Item in Condensed  Consolidated Statements of Operations
	(In thousands)
2022
Unrealized gains (losses) on securities available for sale
	$	(345	)	Net gains (losses) on securities available for sale
		(73	)	Income tax expense
	$	(272	)	Reclassifications, net of tax
2021
Unrealized gains (losses) on securities available for sale
	$	-		Net gains (losses) on securities available for sale
		-		Income tax expense
	$	-		Reclassifications, net of tax

A summary of reclassifications out of each component of AOCIL for the six months ended June 30 follows:

AOCIL Component	Amount Reclassified From AOCIL			Affected Line Item in Condensed  Consolidated Statements of Operations
	(In thousands)
2022
Unrealized gains (losses) on securities available for sale
	$	(275	)	Net gains (losses) on securities available for sale
		(58	)	Income tax expense
	$	(217	)	Reclassifications, net of tax
2021
Unrealized gains (losses) on securities available for sale
	$	1,416		Net gains (losses) on securities available for sale
		297		Income tax expense
	$	1,119		Reclassifications, net of tax

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Revenue from Contracts with Customers

6 Months Ended

Jun. 30, 2022

Revenue from Contracts with Customers [Abstract]

Revenue from Contracts with Customers

15. Revenue from Contracts with Customers

We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. We derive the majority of our revenue from financial instruments and their related contractual rights and obligations which for the most part are excluded from the scope of this topic.  These sources of revenue that are excluded from the scope of this topic include interest income, net gains on mortgage loans, net gains (losses) on securities AFS, mortgage loan servicing, net and bank owned life insurance and were approximately 83.4% and 86.6% of total revenues for the three month periods ending June 30, 2022 and 2021, respectively.

Material sources of revenue that are included in the scope of this topic include service charges on deposit accounts, other deposit related income, interchange income and investment and insurance commissions and are discussed in the following paragraphs.  Generally these sources of revenue are earned at the time the service is delivered or over the course of a monthly period and do not result in any contract asset or liability balance at any given period end.  As a result, there were no contract assets or liabilities recorded as of June 30, 2022 and December 31, 2021.

Service charges on deposit accounts and other deposit related income: Revenues are earned on depository accounts for commercial and retail customers and include fees for transaction-based, account maintenance and overdraft services. Transaction-based fees, which includes services such as ATM use fees, stop payment charges and ACH fees are recognized at the time the transaction is executed as that is the time we fulfill our customer’s request.  Account maintenance fees, which includes monthly maintenance services are earned over the course of a month representing the period over which the performance obligation is satisfied. Our obligation for overdraft services is satisfied at the time of the overdraft.

Interchange income: Interchange income primarily includes debit card interchange and network revenues.  Debit card interchange and network revenues are earned on debit card transactions conducted through payment networks such as MasterCard, NYCE (during 2021) and Accel. Interchange income is recognized concurrently with the delivery of services on a daily basis. Interchange and network revenues are presented gross of interchange expenses, which are presented separately as a component of non-interest expense.

Investment and insurance commissions:  Investment and insurance commissions include fees and commissions from asset management, custody, recordkeeping, investment advisory and other services provided to our customers. Revenue is recognized on an accrual basis at the time the services are performed and is generally based on either the market value of the assets managed or the services provided.  We have an agent relationship with a third party provider of these services and net certain direct costs charged by the third party provider associated with providing these services to our customers.

Net (gains) losses on other real estate and repossessed assets:  We record a gain or loss from the sale of other real estate when control of the property transfers to the buyer, which generally occurs at the time of an executed deed.  If we were to finance the sale of other real estate to the buyer, we would assess whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction is probable.  Once these criteria are met, the other real estate asset would be derecognized and the gain or loss on sale would be recorded upon the transfer of control of the property to the buyer.  There were no other real estate properties sold during the three month periods ending June 30, 2022 and 2021 that were financed by us.

Disaggregation of our revenue sources by attribute follows:

Three months ending June 30, 2022
	Service Charges on Deposit Accounts		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	2,499	$	-	$	-	$	-	$	2,499
Account service charges		452		-		-		-		452
ATM fees		-		310		-		-		310
Other		-		237		-		-		237
Business
Overdraft fees		145		-		-		-		145
ATM fees		-		7		-		-		7
Other		-		71		-		-		71
Interchange income		-		-		3,422		-		3,422
Asset management revenue		-		-		-		453		453
Transaction based revenue		-		-		-		229		229
Total	$	3,096	$	625	$	3,422	$	682	$	7,825
Reconciliation to Condensed Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	625
Investment and insurance commissions										682
Bank owned life insurance (1)										105
Other (1)										1,632
Total									$	3,044

(1) Excluded from the scope of ASC Topic 606.

Three months ending June 30, 2021
	Service Charges on Deposit Accounts		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	1,835	$	-	$	-	$	-	$	1,835
Account service charges		331		-		-		-		331
ATM fees		-		213		-		-		213
Other		-		175		-		-		175
Business
Overdraft fees		152		-		-		-		152
ATM fees		-		4		-		-		4
Other		-		70		-		-		70
Interchange income		-		-		3,453		-		3,453
Asset management revenue		-		-		-		401		401
Transaction based revenue		-		-		-		233		233
Total	$	2,318	$	462	$	3,453	$	634	$	6,867
Reconciliation to Condensed Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	462
Investment and insurance commissions										634
Bank owned life insurance (1)										127
Other (1)										648
Total									$	1,871

(1) Excluded from the scope of ASC Topic 606.

Six months ending June 30, 2022
	Service Charges on Deposit Accounts		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	5,005	$	-	$	-	$	-	$	5,005
Account service charges		773		-		-		-		773
ATM fees		-		587		-		-		587
Other		-		488		-		-		488
Business
Overdraft fees		275		-		-		-		275
ATM fees		-		14		-		-		14
Other		-		158		-		-		158
Interchange income		-		-		6,504		-		6,504
Asset management revenue		-		-		-		922		922
Transaction based revenue		-		-		-		498		498
Total	$	6,053	$	1,247	$	6,504	$	1,420	$	15,224
Reconciliation to Condensed Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	1,247
Investment and insurance commissions										1,420
Bank owned life insurance (1)										243
Other (1)										2,497
Total									$	5,407

(1) Excluded from the scope of ASC Topic 606.

Six months ending June 30, 2021
	Service Charges on Deposit Accounts		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	3,047	$	-	$	-	$	-	$	3,047
Account service charges		843		-		-		-		843
ATM fees		-		481		-		-		481
Other		-		373		-		-		373
Business
Overdraft fees		344		-		-		-		344
ATM fees		-		10		-		-		10
Other		-		159		-		-		159
Interchange income		-		-		6,502		-		6,502
Asset management revenue		-		-		-		783		783
Transaction based revenue		-		-		-		434		434
Total	$	4,234	$	1,023	$	6,502	$	1,217	$	12,976
Reconciliation to Condensed Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	1,023
Investment and insurance commissions										1,217
Bank owned life insurance (1)										266
Other (1)										1,395
Total									$	3,901

(1) Excluded from the scope of ASC Topic 606.

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Leases

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Leases

16. Leases

We have entered into leases in the normal course of business primarily for office facilities, some of which include renewal options and escalation clauses.  Certain leases also include both lease components (fixed payments including rent, taxes and insurance costs) and non-lease components (common area or other maintenance costs) which are accounted for as a single lease component as we have elected the practical expedient to group lease and non-lease components together for all leases.  We have also elected not to recognize leases with original lease terms of 12 months or less (short-term leases) on our Condensed Consolidated Statements of Financial Condition.  Most of our leases include one or more options to renew. The exercise of lease renewal options is typically at our sole discretion and are included in our right of use (“ROU”) assets and lease liabilities if they are reasonably certain of exercise.

Leases are classified as operating or finance leases at the lease commencement date (we did not have any finance leases as of June 30, 2022). Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term. The ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of the lease payment over the lease term.

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.

The cost components of our operating leases follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)				(In thousands)
Operating lease cost	$	408	$	412	$	823	$	835
Variable lease cost		25		15		41		31
Short-term lease cost		19		16		37		30
Total	$	452	$	443	$	901	$	896

Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for our leased facilities.

Supplemental balance sheet information related to our operating leases follows:

	June 30, 2022			December 31, 2021
	(Dollars in thousands)
Lease right of use asset (1)	$	5,959		$	6,481
Lease liabilities (2)	$	6,062		$	6,602
Weighted average remaining lease term (years)		6.31			6.50
Weighted average discount rate		2.3	%		2.3	%

(1) Included in Accrued income and other assets in our Condensed Consolidated Statements of Financial Condition.

(2) Included in Accrued expenses and other liabilities in our Condensed Consolidated Statements of Financial Condition.

Maturity analysis of our lease liabilities at June 30, 2022 based on required contractual payments follows:

	(In thousands)
Six months ending December 31, 2022	$	789
2023		1,400
2024		871
2025		865
2026		801
2027 and thereafter		1,826
Total lease payments		6,552
Less imputed interest		(490	)
Total	$	6,062

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New Accounting Standards (Policies)

6 Months Ended

Jun. 30, 2022

New Accounting Standards [Abstract]

New Accounting Standards

In March, 2022, the FASB issued ASU 2022-01, “Derivative and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method”. This ASU expands the current “last-of-layer” hedge method to allow multiple hedged layers of a single closed portfolio as well as to include non prepayable financial assets.  This ASU also provides additional guidance on the accounting for and disclosure of certain hedge basis adjustments and specifies how hedge basis adjustments should be considered when determining credit losses for assets included in a closed portfolio.  This ASU is required in reporting periods beginning after December. 15, 2022, with early adoption permitted. We early adopted this ASU in the second quarter of 2022 with no material impact to our Condensed Consolidated Financial Statements.

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, ‘‘Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting’’. This new ASU provides temporary optional expedients and exceptions to 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. Entities can elect not to apply certain modification accounting requirements to contracts affected by reference rate reform, if certain criteria are met. Entities that make such elections would not have to remeasure contracts at the modification date or reassess a previous accounting determination.  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.

We have formed a cross-functional project team to lead this transition from LIBOR to a planned adoption of reference rates which could include Secured Overnight Financing Rate (“SOFR”), amongst others. We utilized the timeline guidance published by the Alternative Reference Rates Committee to develop and achieve internal milestones during this transitional period.  We have discontinued the use of new LIBOR-based loans as of December 31, 2021, according to regulatory guidelines. We also discontinued the use of new LIBOR based interest rate derivatives as of December 31, 2021.  The amended guidance under Topic 848 and our ability to elect its temporary optional expedients and exceptions are effective for us through December 31, 2022.  We expect to adopt the LIBOR transition relief allowed under this standard.

In March, 2022, the FASB issued ASU 2022-02, “Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructuring and Vintage Disclosures”. This ASU eliminates the troubled debt restructuring (“TDR”) accounting model for creditors that have already adopted Topic 326, which is commonly referred to as the current expected credit loss (“CECL”) model. In lieu of the TDR accounting model, creditors now will apply the general loan modification guidance in Subtopic 310-20 to all loan modifications, including modifications made for borrowers experiencing financial difficulty. Under the general loan modification guidance, a modification is treated as a new loan only if the terms of the new loan are at least as favorable to the lender as the terms for comparable loans to other customers with similar collection risks, and modifications to the terms of the original loan are more than minor. If either condition is not met, the modification is accounted for as the continuation of the old loan with any effect of the modification treated as a prospective adjustment to the loan’s effective interest rate. In addition, this ASU requires the disclosure of gross charge-offs recorded in the current period for financing receivables by origination year. For entities that have adopted Topic 326, ASU 2022-02 takes effect in reporting periods beginning after December 15, 2022, with early adoption permitted. We are currently assessing the impact of this ASU on our Condensed Consolidated Financial Statements.

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Securities (Tables)

6 Months Ended

Jun. 30, 2022

Securities [Abstract]

Securities Available for Sale

Securities available for sale (“AFS”) consist of the following:

	Amortized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
June 30, 2022
U.S. agency	$	14,549	$	23	$	581	$	13,991
U.S. agency residential mortgage-backed		108,141		35		7,487		100,689
U.S. agency commercial mortgage-backed		16,873		-		1,282		15,591
Private label mortgage-backed		106,549		256		6,966		99,839
Other asset backed		240,479		3		6,247		234,235
Obligations of states and political subdivisions		358,103		42		45,230		312,915
Corporate		88,644		50		7,685		81,009
Trust preferred		977		-		41		936
Foreign government		500		-		1		499
Total	$	934,815	$	409	$	75,520	$	859,704
December 31, 2021
U.S. agency	$	34,634	$	152	$	112	$	34,674
U.S. agency residential mortgage-backed		309,907		1,952		3,874		307,985
U.S. agency commercial mortgage-backed		23,066		84		224		22,926
Private label mortgage-backed		102,480		807		672		102,615
Other asset backed		215,235		1,204		269		216,170
Obligations of states and political subdivisions		568,355		9,942		2,221		576,076
Corporate		148,707		2,446		1,194		149,959
Trust preferred		1,975		-		56		1,919
Foreign government		499		7		-		506
Total	$	1,404,858	$	16,594	$	8,622	$	1,412,830

Securities Held to Maturity

Securities held to maturity (“HTM”) consist of the following:

			Transferred
	Carrying		Unrealized				Amortized		Unrealized
	Value		Loss (1)		ACL		Cost		Gains		Losses		Fair Value
							(In thousands)
June 30, 2022
U.S. agency	$	28,432	$	1,959	$	-	$	30,391	$	-	$	3,533	$	26,858
U.S. agency residential mortgage-backed		123,483		11,556		-		135,039		1		19,271		115,769
U.S. agency commercial mortgage-backed		5,071		273		-		5,344		-		432		4,912
Private label mortgage-backed		7,211		473		2		7,686		-		796		6,890
Obligations of states and political subdivisions		168,189		9,542		30		177,761		38		20,166		157,633
Corporate		48,283		1,292		121		49,696		12		3,058		46,650
Trust preferred		939		56		5		1,000		-		11		989
Total	$	381,608	$	25,151	$	158	$	406,917	$	51	$	47,267	$	359,701

(1) Represents the remaining unrealized loss to be accreted on securities that were transferred from AFS to HTM on April 1, 2022.

Investments in a Continuous Unrealized Loss Position

Gross unrealized losses and fair values for securities available for sale aggregated by investment type and length of time that individual securities have been at a continuous unrealized loss position follows:

	Less Than Twelve Months				Twelve Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
June 30, 2022
U.S. agency	$	11,436	$	580	$	864	$	1	$	12,300	$	581
U.S. agency residential mortgage-backed		78,099		6,344		18,542		1,143		96,641		7,487
U.S. agency commercial mortgage-backed		15,156		1,234		435		48		15,591		1,282
Private label mortgage-backed		97,269		6,863		1,950		103		99,219		6,966
Other asset backed		231,837		6,213		1,432		34		233,269		6,247
Obligations of states and political subdivisions		277,070		39,550		28,336		5,680		305,406		45,230
Corporate		74,016		7,368		1,711		317		75,727		7,685
Trust preferred		-		-		936		41		936		41
Foreign government		499		1		-		-		499		1
Total	$	785,382	$	68,153	$	54,206	$	7,367	$	839,588	$	75,520
December 31, 2021
U.S. agency	$	11,986	$	109	$	1,286	$	3	$	13,272	$	112
U.S. agency residential mortgage-backed		171,398		3,555		19,024		319		190,422		3,874
U.S. agency commercial mortgage-backed		19,900		224		-		-		19,900		224
Private label mortgage-backed		64,408		640		2,180		32		66,588		672
Other asset backed		86,581		248		978		21		87,559		269
Obligations of states and political subdivisions		178,484		2,151		7,093		70		185,577		2,221
Corporate		75,166		1,150		1,050		44		76,216		1,194
Trust preferred		-		-		1,919		56		1,919		56
Total	$	607,923	$	8,077	$	33,530	$	545	$	641,453	$	8,622

Held-to-Maturity, Credit Quality

On a quarterly basis, we monitor the credit quality of securities HTM through the use of credit ratings. The carrying value of securities HTM at June 30, 2022, aggregated by credit quality follow:

	Private Label Mortgage- Backed		Obligations of States and Political Subdivisions		Corporate		Trust Preferred		Carrying Value Total
	(In thousands)
Credit rating:
AAA	$	7,211	$	34,598	$	-	$	-	$	41,809
AA		-		109,674		-		-		109,674
A		-		5,197		6,884		-		12,081
BBB		-		1,174		38,515		-		39,689
Non-rated		-		17,546		2,884		939		21,369
Total	$	7,211	$	168,189	$	48,283	$	939	$	224,622

Held-to-Maturity, Allowance for Credit Losses

An analysis of the allowance for credit losses by security HTM type follows:

	Private Label Mortgage- Backed		Obligations of States and Political Subdivisions		Corporate		Trust Preferred		Total
	(In thousands)
Three months ended June 30, 2022
Balance at beginning of period	$	-	$	-	$	-	$	-	$	-
Additions (deductions)										-
Provision for credit losses		2		30		121		5		158
Recoveries credited to the allowance		-		-		-		-		-
Securities HTM charged against the allowance		-		-		-		-		-
Balance at end of period	$	2	$	30	$	121	$	5	$	158
Six months ended June 30, 2022
Balance at beginning of period	$	-	$	-	$	-	$	-	$	-
Additions (deductions)										-
Provision for credit losses		2		30		121		5		158
Recoveries credited to the allowance		-		-		-		-		-
Securities HTM charged against the allowance		-		-		-		-		-
Balance at end of period	$	2	$	30	$	121	$	5	$	158

Amortized Cost and Fair Value of Securities Available for Sale and Held to Maturity by Contractual Maturity

The amortized cost and fair value of securities AFS and securities HTM at June 30, 2022, by contractual maturity, follow:

	Securities AFS				Securities HTM
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Maturing within one year	$	10,083	$	10,109	$	4,247	$	4,241
Maturing after one year but within five years		100,901		94,331		41,546		39,085
Maturing after five years but within ten years		134,151		118,515		119,016		108,172
Maturing after ten years		217,638		186,395		94,039		80,632
		462,773		409,350		258,848		232,130
U.S. agency residential mortgage-backed		108,141		100,689		135,039		115,769
U.S. agency commercial mortgage-backed		16,873		15,591		5,344		4,912
Private label mortgage-backed		106,549		99,839		7,686		6,890
Other asset backed		240,479		234,235		-		-
Total	$	934,815	$	859,704	$	406,917	$	359,701

The actual maturity may differ from the contractual maturity because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

Gains and Losses Realized on Sale of Securities Available for Sale

Gains and losses realized on the sale of securities AFS are determined using the specific identification method and are recognized on a trade-date basis.  A summary of proceeds from the sale of securities AFS and gains and losses for the six month periods ending June 30, follows:

			Realized
	Proceeds		Gains		Losses
	(In thousands)
2022	$	70,523	$	164	$	439
2021		81,178		1,466		50

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Loans (Tables)

6 Months Ended

Jun. 30, 2022

Loans [Abstract]

Analysis of ACL by Portfolio Segment

An analysis of the allowance for credit losses by portfolio segment for the three months ended June 30, follows:

	Commercial			Mortgage			Installment			Subjective Allocation			Total
	(In thousands)
2022
Balance at beginning of period	$	10,744		$	19,208		$	3,604		$	12,071		$	45,627
Additions (deductions)
Provision for credit losses		164			1,046			791			220			2,221
Recoveries credited to the allowance		151			97			405			-			653
Loans charged against the allowance		-			(38	)		(580	)		-			(618	)
Balance at end of period	$	11,059		$	20,313		$	4,220		$	12,291		$	47,883
2021
Balance at beginning of period	$	9,530		$	18,448		$	3,979		$	14,798		$	46,755
Additions (deductions)
Provision for credit losses		(946	)		340			(219	)		(600	)		(1,425	)
Recoveries credited to the allowance		510			169			207			-			886
Loans charged against the allowance		-			(24	)		(266	)		-			(290	)
Balance at end of period	$	9,094		$	18,933		$	3,701		$	14,198		$	45,926

An analysis of the allowance for credit losses by portfolio segment for the six months ended June 30, follows:

	Commercial			Mortgage			Installment			Subjective Allocation			Total
	(In thousands)
2022
Balance at beginning of period	$	11,519		$	19,221		$	3,749		$	12,763		$	47,252
Additions (deductions)
Provision for credit losses		(688	)		868			940			(472	)		648
Recoveries credited to the allowance		228			268			778			-			1,274
Loans charged against the allowance		-			(44	)		(1,247	)		-			(1,291	)
Balance at end of period	$	11,059		$	20,313		$	4,220		$	12,291		$	47,883
2021
Balance at beginning of period	$	7,401		$	6,998		$	1,112		$	19,918		$	35,429
Additions (deductions)
Impact of adoption of ASC 326		2,551			12,000			3,052			(6,029	)		11,574
Provision for credit losses		(1,622	)		(280	)		(306	)		309			(1,899	)
Initial allowance on loans purchased with credit deterioration		95			18			21			-			134
Recoveries credited to the allowance		669			381			384			-			1,434
Loans charged against the allowance		-			(184	)		(562	)		-			(746	)
Balance at end of period	$	9,094		$	18,933		$	3,701		$	14,198		$	45,926

Loans on Non-Accrual Status and Past Due More than 90 Days

Loans on non-accrual status and past due more than 90 days (“Non-performing Loans”) follow:

	Non- Accrual		Non- Accrual
	with no Allowance for Credit Loss		with an Allowance for Credit Loss		Total Non- Accrual		90+ and Still Accruing		Total Non- Performing Loans
June 30, 2022					(In thousands)
Commercial
Commercial and industrial (1)	$	-	$	14	$	14	$	-	$	14
Commercial real estate		-		-		-		-		-
Mortgage
1-4 family owner occupied - jumbo		-		695		695		-		695
1-4 family owner occupied - non-jumbo (2)		617		1,086		1,703		-		1,703
1-4 family non-owner occupied		159		449		608		-		608
1-4 family - 2nd lien		-		573		573		-		573
Resort lending		118		59		177		-		177
Installment
Boat lending		-		235		235		-		235
Recreational vehicle lending		-		187		187		-		187
Other		-		307		307		-		307
Total	$	894	$	3,605	$	4,499	$	-	$	4,499
Accrued interest excluded from total	$	-	$	-	$	-	$	-	$	-
December 31, 2021
Commercial
Commercial and industrial (1)	$	-	$	15	$	15	$	-	$	15
Commercial real estate		-		-		-		-		-
Mortgage
1-4 family owner occupied - jumbo		607		-		607		-		607
1-4 family owner occupied - non-jumbo (2)		137		1,815		1,952		-		1,952
1-4 family non-owner occupied		275		592		867		-		867
1-4 family - 2nd lien		182		681		863		-		863
Resort lending		118		119		237		-		237
Installment
Boat lending		-		210		210		-		210
Recreational vehicle lending		-		177		177		-		177
Other		-		182		182		-		182
Total	$	1,319	$	3,791	$	5,110	$	-	$	5,110
Accrued interest excluded from total	$	-	$	-	$	-	$	-	$	-

(1) Non-performing commercial and industrial loans exclude $0.042 million and $0.047 million of government guaranteed loans at June 30, 2022 and December 31, 2021, respectively.

(2) Non-performing 1-4 family owner occupied – non jumbo loans exclude $1.318 million and $0.388 million of government guaranteed loans at June 30, 2022 and December 31, 2021, respectively.

Amortized Cost of Collateral-dependent Loans by Class

The amortized cost of collateral-dependent loans by class follows:

	Collateral Type				Allowance
	Real Estate		Other		for Credit Losses
	(In thousands)
June 30, 2022
Commercial
Commercial and industrial	$	67	$	207	$	43
Commercial real estate		72		-		16
Mortgage
1-4 family owner occupied - jumbo		-		-		-
1-4 family owner occupied - non-jumbo		1,203		-		209
1-4 family non-owner occupied		170		-		4
1-4 family - 2nd lien		97		-		35
Resort lending		156		-		14
Installment
Boat lending		-		102		36
Recreational vehicle lending		-		51		18
Other		38		118		55
Total	$	1,803	$	478	$	430
Accrued interest excluded from total	$	-	$	-
December 31, 2021
Commercial
Commercial and industrial	$	80	$	245	$	51
Commercial real estate		84		-		19
Mortgage
1-4 family owner occupied - jumbo		607		-		-
1-4 family owner occupied - non-jumbo		940		-		286
1-4 family non-owner occupied		477		-		72
1-4 family - 2nd lien		370		-		67
Resort lending		237		-		42
Installment
Boat lending		-		80		29
Recreational vehicle lending		-		121		44
Other		-		70		25
Total	$	2,795	$	516	$	635
Accrued interest excluded from total	$	-	$	1

Aging Analysis of Loans by Class

An aging analysis of loans by class follows:

	Loans Past Due								Loans not		Total
	30-59 days		60-89 days		90+ days		Total		Past Due		Loans
	(In thousands)
June 30, 2022
Commercial
Commercial and industrial	$	43	$	-	$	56	$	99	$	687,923	$	688,022
Commercial real estate		-		-		-		-		641,176		641,176
Mortgage
1-4 family owner occupied - jumbo		556		-		-		556		657,142		657,698
1-4 family owner occupied - non-jumbo		1,432		1,039		595		3,066		303,043		306,109
1-4 family non-owner occupied		317		-		159		476		180,787		181,263
1-4 family - 2nd lien		141		28		97		266		94,985		95,251
Resort lending		-		-		156		156		43,692		43,848
Installment
Boat lending		233		20		55		308		258,077		258,385
Recreational vehicle lending		328		18		50		396		279,678		280,074
Other		298		115		120		533		106,491		107,024
Total	$	3,348	$	1,220	$	1,288	$	5,856	$	3,252,994	$	3,258,850
Accrued interest excluded from total	$	29	$	13	$	-	$	42	$	7,653	$	7,695
December 31, 2021
Commercial
Commercial and industrial	$	-	$	2	$	62	$	64	$	593,048	$	593,112
Commercial real estate		-		-		-		-		610,469		610,469
Mortgage
1-4 family owner occupied - jumbo		-		-		607		607		540,416		541,023
1-4 family owner occupied - non-jumbo		774		408		657		1,839		264,571		266,410
1-4 family non-owner occupied		87		26		462		575		194,277		194,852
1-4 family - 2nd lien		422		60		289		771		87,958		88,729
Resort lending		-		-		237		237		48,408		48,645
Installment
Boat lending		438		28		52		518		227,622		228,140
Recreational vehicle lending		377		65		120		562		234,183		234,745
Other		252		57		49		358		98,562		98,920
Total recorded investment	$	2,350	$	646	$	2,535	$	5,531	$	2,899,514	$	2,905,045
Accrued interest excluded from total	$	25	$	9	$	-	$	34	$	6,802	$	6,836

Troubled Debt Restructurings

We have allocated $2.7 million and $3.6 million of reserves to customers whose loan terms have been modified as TDRs at June 30, 2022 and December 31, 2021, respectively.

TDRs follow:

	June 30, 2022
	Commercial		Retail (1)			Total
	(In thousands)
Performing TDRs	$	3,266	$	28,580		$	31,846
Non-performing TDRs(2)		-		1,164	(3)		1,164
Total	$	3,266	$	29,744		$	33,010

	December 31, 2021
	Commercial		Retail (1)			Total
	(In thousands)
Performing TDRs	$	4,481	$	31,589		$	36,070
Non-performing TDRs(2)		-		1,016	(3)		1,016
Total	$	4,481	$	32,605		$	37,086

(1) Retail loans include mortgage and installment loan portfolio segments.

(2) Included in non-performing loans table above.

(3) Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis.

Commercial and Retail Loan COVID-19 Accommodations

The following table summarizes PPP loans outstanding:

Paycheck Protection Program

	As of June 30, 2022				As of December 31, 2021
	Amount (#)		Amount ($)		Amount (#)		Amount ($)
	(Dollars in thousands)				(Dollars in thousands)
Closed and outstanding - Round 1 loans		-	$	-		6	$	197
Closed and outstanding - Round 2 loans		2		258		180		26,167
Total closed and outstanding		2	$	258		186	$	26,364
Unaccreted net fees remaining at period end			$	-			$	806

Loan Ratings by Loan Class

The following tables summarize loan ratings by loan class for our commercial portfolio loan segment at June 30, 2022 and December 31, 2021:

	Commercial
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
	(In thousands)
June 30, 2022
Commercial and industrial
Non-watch (1-6)	$	95,350	$	103,647	$	67,402	$	52,393	$	36,427	$	121,179	$	196,543	$	672,941
Watch (7-8)		38		3,864		451		-		137		4,530		303		9,323
Substandard Accrual (9)		-		1,534		-		1,993		1,022		1,153		-		5,702
Non-Accrual (10-11)		-		-		-		-		-		56		-		56
Total	$	95,388	$	109,045	$	67,853	$	54,386	$	37,586	$	126,918	$	196,846	$	688,022
Accrued interest excluded from total	$	130	$	187	$	143	$	97	$	191	$	310	$	439	$	1,497
Commercial real estate
Non-watch (1-6)	$	67,200	$	129,499	$	39,157	$	99,872	$	69,987	$	185,974	$	35,228	$	626,917
Watch (7-8)		-		-		164		2,568		10,550		842		-		14,124
Substandard Accrual (9)		-		135		-		-		-		-		-		135
Non-Accrual (10-11)		-		-		-		-		-		-		-		-
Total	$	67,200	$	129,634	$	39,321	$	102,440	$	80,537	$	186,816	$	35,228	$	641,176
Accrued interest excluded from total	$	190	$	236	$	62	$	233	$	229	$	458	$	63	$	1,471
Total Commercial
Non-watch (1-6)	$	162,550	$	233,146	$	106,559	$	152,265	$	106,414	$	307,153	$	231,771	$	1,299,858
Watch (7-8)		38		3,864		615		2,568		10,687		5,372		303		23,447
Substandard Accrual (9)		-		1,669		-		1,993		1,022		1,153		-		5,837
Non-Accrual (10-11)		-		-		-		-		-		56		-		56
Total	$	162,588	$	238,679	$	107,174	$	156,826	$	118,123	$	313,734	$	232,074	$	1,329,198
Accrued interest excluded from total	$	320	$	423	$	205	$	330	$	420	$	768	$	502	$	2,968

	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
	2021		2020		2019		2018		2017		Prior		Cost Basis		Total
	(In thousands)
December 31, 2021
Commercial and industrial
Non-watch (1-6)	$	121,917	$	69,856	$	56,984	$	44,827	$	38,307	$	96,261	$	144,579	$	572,731
Watch (7-8)		81		-		532		1,294		362		6,274		476		9,019
Substandard Accrual (9)		1,569		2		1,159		247		-		1,530		6,793		11,300
Non-Accrual (10-11)		-		-		-		-		-		62		-		62
Total	$	123,567	$	69,858	$	58,675	$	46,368	$	38,669	$	104,127	$	151,848	$	593,112
Accrued interest excluded from total	$	314	$	153	$	105	$	229	$	90	$	240	$	242	$	1,373
Commercial real estate
Non-watch (1-6)	$	123,330	$	55,479	$	108,056	$	75,828	$	39,123	$	160,199	$	31,551	$	593,566
Watch (7-8)		-		324		3,028		7,678		1,708		1,423		-		14,161
Substandard Accrual (9)		441		-		-		1,193		1,108		-		-		2,742
Non-Accrual (10-11)		-		-		-		-		-		-		-		-
Total	$	123,771	$	55,803	$	111,084	$	84,699	$	41,939	$	161,622	$	31,551	$	610,469
Accrued interest excluded from total	$	182	$	81	$	233	$	203	$	94	$	325	$	47	$	1,165
Total Commercial
Non-watch (1-6)	$	245,247	$	125,335	$	165,040	$	120,655	$	77,430	$	256,460	$	176,130	$	1,166,297
Watch (7-8)		81		324		3,560		8,972		2,070		7,697		476		23,180
Substandard Accrual (9)		2,010		2		1,159		1,440		1,108		1,530		6,793		14,042
Non-Accrual (10-11)		-		-		-		-		-		62		-		62
Total	$	247,338	$	125,661	$	169,759	$	131,067	$	80,608	$	265,749	$	183,399	$	1,203,581
Accrued interest excluded from total	$	496	$	234	$	338	$	432	$	184	$	565	$	289	$	2,538

For each of our mortgage and installment portfolio segment classes, we generally monitor credit quality based on the credit scores of the borrowers. These credit scores are generally updated semi-annually.

The following tables summarize credit scores by loan class for our mortgage and installment loan portfolio segments at June 30, 2022 and December 31, 2021:

	Mortgage (1)
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
	(In thousands)
June 30, 2022
1-4 family owner occupied - jumbo
800 and above	$	6,169	$	31,107	$	18,008	$	3,943	$	690	$	5,400	$	-	$	65,317
750-799		56,497		204,172		75,666		24,735		5,479		19,208		2,071		387,828
700-749		22,889		69,946		23,815		7,324		2,152		7,475		-		133,601
650-699		4,856		22,462		15,192		6,135		4,112		5,446		-		58,203
600-649		1,976		1,857		1,411		501		473		3,416		-		9,634
550-599		-		-		1,864		-		-		-		-		1,864
500-549		556		-		-		-		-		695		-		1,251
Under 500		-		-		-		-		-		-		-		-
Unknown		-		-		-		-		-		-		-		-
Total	$	92,943	$	329,544	$	135,956	$	42,638	$	12,906	$	41,640	$	2,071	$	657,698
Accrued interest excluded from total	$	221	$	707	$	330	$	111	$	46	$	126	$	6	$	1,547
1-4 family owner occupied - non-jumbo
800 and above	$	4,128	$	11,364	$	4,556	$	2,594	$	1,923	$	7,397	$	3,472	$	35,434
750-799		28,528		38,076		16,879		9,041		5,262		19,462		9,072		126,320
700-749		18,439		21,607		6,901		3,001		3,193		22,438		4,832		80,411
650-699		1,283		9,075		3,013		3,312		2,134		13,849		1,347		34,013
600-649		298		1,159		1,497		2,078		1,804		8,663		91		15,590
550-599		-		410		514		438		453		5,705		48		7,568
500-549		-		209		279		355		432		3,037		18		4,330
Under 500		-		-		770		521		129		1,023		-		2,443
Unknown		-		-		-		-		-		-		-		-
Total	$	52,676	$	81,900	$	34,409	$	21,340	$	15,330	$	81,574	$	18,880	$	306,109
Accrued interest excluded from total	$	143	$	166	$	89	$	70	$	53	$	227	$	71	$	819
1-4 family non-owner occupied
800 and above	$	4,398	$	7,558	$	2,862	$	4,348	$	994	$	6,508	$	2,090	$	28,758
750-799		13,258		41,754		18,208		6,510		2,735		13,374		4,049		99,888
700-749		5,997		10,830		5,758		1,607		973		7,372		2,083		34,620
650-699		2,614		2,201		937		970		748		4,974		728		13,172
600-649		-		143		-		77		100		2,178		200		2,698
550-599		-		-		-		-		487		587		271		1,345
500-549		-		-		-		-		-		467		110		577
Under 500		-		-		-		-		-		205		-		205
Unknown		-		-		-		-		-		-		-		-
Total	$	26,267	$	62,486	$	27,765	$	13,512	$	6,037	$	35,665	$	9,531	$	181,263
Accrued interest excluded from total	$	57	$	154	$	72	$	44	$	22	$	108	$	36	$	493
1-4 family - 2nd lien
800 and above	$	97	$	117	$	1,042	$	244	$	171	$	547	$	9,075	$	11,293
750-799		1,607		2,832		1,951		833		504		4,280		32,283		44,290
700-749		280		1,556		990		848		409		1,981		18,710		24,774
650-699		-		163		292		288		315		1,990		7,375		10,423
600-649		-		100		175		214		157		805		1,359		2,810
550-599		-		-		-		25		38		424		176		663
500-549		-		-		-		77		-		427		248		752
Under 500		-		-		-		54		3		121		68		246
Unknown		-		-		-		-		-		-		-		-
Total	$	1,984	$	4,768	$	4,450	$	2,583	$	1,597	$	10,575	$	69,294	$	95,251
Accrued interest excluded from total	$	4	$	10	$	9	$	7	$	5	$	28	$	263	$	326

	Mortgage - continued (1)
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
	(In thousands)
June 30, 2022 - continued
Resort lending
800 and above	$	-	$	-	$	-	$	-	$	271	$	7,263	$	-	$	7,534
750-799		-		490		1,262		235		688		16,330		-		19,005
700-749		-		312		54		-		56		7,678		-		8,100
650-699		-		697		83		-		-		6,834		-		7,614
600-649		-		-		-		-		-		1,296		-		1,296
550-599		-		-		-		-		-		137		-		137
500-549		-		-		-		-		-		44		-		44
Under 500		-		-		-		-		-		118		-		118
Unknown		-		-		-		-		-		-		-		-
Total	$	-	$	1,499	$	1,399	$	235	$	1,015	$	39,700	$	-	$	43,848
Accrued interest excluded from total	$	-	$	1	$	3	$	1	$	3	$	102	$	-	$	110
Total Mortgage
800 and above	$	14,792	$	50,146	$	26,468	$	11,129	$	4,049	$	27,115	$	14,637	$	148,336
750-799		99,890		287,324		113,966		41,354		14,668		72,654		47,475		677,331
700-749		47,605		104,251		37,518		12,780		6,783		46,944		25,625		281,506
650-699		8,753		34,598		19,517		10,705		7,309		33,093		9,450		123,425
600-649		2,274		3,259		3,083		2,870		2,534		16,358		1,650		32,028
550-599		-		410		2,378		463		978		6,853		495		11,577
500-549		556		209		279		432		432		4,670		376		6,954
Under 500		-		-		770		575		132		1,467		68		3,012
Unknown		-		-		-		-		-		-		-		-
Total	$	173,870	$	480,197	$	203,979	$	80,308	$	36,885	$	209,154	$	99,776	$	1,284,169
Accrued interest excluded from total	$	425	$	1,038	$	503	$	233	$	129	$	591	$	376	$	3,295

	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
	2021		2020		2019		2018		2017		Prior		Cost Basis		Total
	(In thousands)
December 31, 2021
1-4 family owner occupied - jumbo
800 and above	$	31,137	$	17,652	$	8,491	$	2,565	$	7,516	$	527	$	-	$	67,888
750-799		135,292		92,590		30,072		7,118		9,469		5,043		2,371		281,955
700-749		67,255		34,665		13,765		4,421		7,748		4,856		-		132,710
650-699		19,367		10,313		5,447		5,285		6,080		690		-		47,182
600-649		2,050		2,638		506		1,013		837		976		-		8,020
550-599		-		469		-		-		781		-		-		1,250
500-549		-		1,411		-		-		-		-		-		1,411
Under 500		-		-		-		-		607		-		-		607
Unknown		-		-		-		-		-		-		-		-
Total	$	255,101	$	159,738	$	58,281	$	20,402	$	33,038	$	12,092	$	2,371	$	541,023
Accrued interest excluded from total	$	557	$	370	$	163	$	77	$	87	$	33	$	3	$	1,290
1-4 family owner occupied - non-jumbo
800 and above	$	6,185	$	5,534	$	3,756	$	2,514	$	3,566	$	4,569	$	4,026	$	30,150
750-799		33,227		20,300		9,688		5,664		8,887		12,498		8,341		98,605
700-749		19,317		10,572		4,813		4,035		5,008		21,806		5,637		71,188
650-699		6,593		4,233		3,217		2,010		3,135		12,423		2,812		34,423
600-649		2,119		1,082		1,051		1,549		1,660		8,663		89		16,213
550-599		-		295		1,076		758		1,023		5,802		147		9,101
500-549		-		57		421		327		510		3,169		18		4,502
Under 500		-		616		284		394		250		684		-		2,228
Unknown		-		-		-		-		-		-		-		-
Total	$	67,441	$	42,689	$	24,306	$	17,251	$	24,039	$	69,614	$	21,070	$	266,410
Accrued interest excluded from total	$	208	$	97	$	84	$	58	$	68	$	226	$	57	$	798

	Mortgage - continued (1)
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
	2021		2020		2019		2018		2017		Prior		Cost Basis		Total
	(In thousands)
December 31, 2021 (continued)
1-4 family non-owner occupied
800 and above	$	15,406	$	1,786	$	2,857	$	1,459	$	2,627	$	5,058	$	1,639	$	30,832
750-799		44,201		21,885		10,517		3,667		6,956		10,004		5,117		102,347
700-749		16,486		7,807		2,764		1,878		966		6,095		2,756		38,752
650-699		6,617		3,095		257		299		248		6,019		955		17,490
600-649		125		57		108		282		174		2,051		381		3,178
550-599		-		25		-		192		-		1,121		-		1,338
500-549		-		-		-		55		-		638		50		743
Under 500		-		-		-		-		-		172		-		172
Unknown		-		-		-		-		-		-		-		-
Total	$	82,835	$	34,655	$	16,503	$	7,832	$	10,971	$	31,158	$	10,898	$	194,852
Accrued interest excluded from total	$	171	$	95	$	46	$	23	$	33	$	107	$	38	$	513
1-4 family - 2nd lien
800 and above	$	415	$	964	$	426	$	95	$	266	$	353	$	8,465	$	10,984
750-799		2,161		2,413		714		1,332		1,859		2,415		30,106		41,000
700-749		1,307		1,049		771		561		1,374		2,365		16,316		23,743
650-699		122		309		460		405		140		1,639		5,286		8,361
600-649		-		177		72		106		92		1,143		1,370		2,960
550-599		-		-		61		-		-		476		228		765
500-549		-		-		99		-		89		190		155		533
Under 500		-		-		54		3		60		16		250		383
Unknown		-		-		-		-		-		-		-		-
Total	$	4,005	$	4,912	$	2,657	$	2,502	$	3,880	$	8,597	$	62,176	$	88,729
Accrued interest excluded from total	$	7	$	9	$	9	$	5	$	8	$	34	$	211	$	283
Resort lending
800 and above	$	-	$	-	$	-	$	274	$	-	$	7,347	$	-	$	7,621
750-799		600		1,246		250		511		63		19,630		-		22,300
700-749		-		174		-		301		67		9,052		-		9,594
650-699		951		-		-		-		-		6,057		-		7,008
600-649		-		-		-		-		-		1,841		-		1,841
550-599		-		-		-		-		-		80		-		80
500-549		-		-		-		-		-		201		-		201
Under 500		-		-		-		-		-		-		-		-
Unknown		-		-		-		-		-		-		-		-
Total	$	1,551	$	1,420	$	250	$	1,086	$	130	$	44,208	$	-	$	48,645
Accrued interest excluded from total	$	2	$	3	$	-	$	3	$	-	$	106	$	-	$	114
Total Mortgage
800 and above	$	53,143	$	25,936	$	15,530	$	6,907	$	13,975	$	17,854	$	14,130	$	147,475
750-799		215,481		138,434		51,241		18,292		27,234		49,590		45,935		546,207
700-749		104,365		54,267		22,113		11,196		15,163		44,174		24,709		275,987
650-699		33,650		17,950		9,381		7,999		9,603		26,828		9,053		114,464
600-649		4,294		3,954		1,737		2,950		2,763		14,674		1,840		32,212
550-599		-		789		1,137		950		1,804		7,479		375		12,534
500-549		-		1,468		520		382		599		4,198		223		7,390
Under 500		-		616		338		397		917		872		250		3,390
Unknown		-		-		-		-		-		-		-		-
Total	$	410,933	$	243,414	$	101,997	$	49,073	$	72,058	$	165,669	$	96,515	$	1,139,659
Accrued interest excluded from total	$	945	$	574	$	302	$	166	$	196	$	506	$	309	$	2,998

(1) Credit scores have been updated within the last twelve months.

	Installment (1)
	Term Loans Amortized Cost Basis by Origination Year
	2022		2021		2020		2019		2018		Prior		Total
	(In thousands)
June 30, 2022
Boat lending
800 and above	$	7,512	$	7,782	$	5,048	$	4,851	$	4,324	$	6,478	$	35,995
750-799		36,409		40,761		21,681		18,994		14,723		17,404		149,972
700-749		11,308		17,884		8,563		7,198		4,277		6,705		55,935
650-699		2,966		3,513		1,669		1,391		1,342		2,073		12,954
600-649		294		717		297		326		447		628		2,709
550-599		-		44		6		81		126		213		470
500-549		-		-		47		10		32		199		288
Under 500		-		-		-		-		28		34		62
Unknown		-		-		-		-		-		-		-
Total	$	58,489	$	70,701	$	37,311	$	32,851	$	25,299	$	33,734	$	258,385
Accrued interest excluded from total	$	133	$	150	$	87	$	84	$	58	$	76	$	588
Recreational vehicle lending
800 and above	$	9,586	$	7,967	$	5,149	$	5,129	$	3,712	$	4,934	$	36,477
750-799		47,236		58,380		18,792		14,206		10,072		10,168		158,854
700-749		17,003		28,781		8,234		5,702		3,357		3,001		66,078
650-699		2,558		7,068		1,871		1,337		922		1,179		14,935
600-649		98		1,237		513		246		279		192		2,565
550-599		-		137		95		247		255		118		852
500-549		-		50		76		59		-		46		231
Under 500		-		67		-		11		-		4		82
Unknown		-		-		-		-		-		-		-
Total	$	76,481	$	103,687	$	34,730	$	26,937	$	18,597	$	19,642	$	280,074
Accrued interest excluded from total	$	177	$	231	$	76	$	63	$	45	$	40	$	632
Other
800 and above	$	1,623	$	1,646	$	1,674	$	1,277	$	542	$	838	$	7,600
750-799		10,440		11,496		6,882		4,327		2,363		3,955		39,463
700-749		5,743		8,558		4,288		2,472		1,271		2,834		25,166
650-699		21,828		4,252		1,253		947		538		1,510		30,328
600-649		316		783		239		247		197		596		2,378
550-599		46		163		56		41		90		124		520
500-549		-		15		62		70		29		76		252
Under 500		-		1		61		32		36		33		163
Unknown		1,154		-		-		-		-		-		1,154
Total	$	41,150	$	26,914	$	14,515	$	9,413	$	5,066	$	9,966	$	107,024
Accrued interest excluded from total	$	48	$	55	$	29	$	25	$	15	$	40	$	212
Total installment
800 and above	$	18,721	$	17,395	$	11,871	$	11,257	$	8,578	$	12,250	$	80,072
750-799		94,085		110,637		47,355		37,527		27,158		31,527		348,289
700-749		34,054		55,223		21,085		15,372		8,905		12,540		147,179
650-699		27,352		14,833		4,793		3,675		2,802		4,762		58,217
600-649		708		2,737		1,049		819		923		1,416		7,652
550-599		46		344		157		369		471		455		1,842
500-549		-		65		185		139		61		321		771
Under 500		-		68		61		43		64		71		307
Unknown		1,154		-		-		-		-		-		1,154
Total	$	176,120	$	201,302	$	86,556	$	69,201	$	48,962	$	63,342	$	645,483
Accrued interest excluded from total	$	358	$	436	$	192	$	172	$	118	$	156	$	1,432

	Installment - continued (1)
	Term Loans Amortized Cost Basis by Origination Year
	2021		2020		2019		2018		2017		Prior		Total
	(In thousands)
December 31, 2021
Boat lending
800 and above	$	7,513	$	5,786	$	6,015	$	4,906	$	2,968	$	4,433	$	31,621
750-799		47,434		24,968		21,052		15,681		9,797		10,971		129,903
700-749		19,180		9,724		8,263		6,467		3,109		4,953		51,696
650-699		3,845		1,679		2,301		1,223		1,166		1,378		11,592
600-649		373		419		209		327		185		604		2,117
550-599		237		81		91		113		115		191		828
500-549		-		49		-		85		-		67		201
Under 500		-		-		-		10		168		4		182
Unknown		-		-		-		-		-		-		-
Total	$	78,582	$	42,706	$	37,931	$	28,812	$	17,508	$	22,601	$	228,140
Accrued interest excluded from total	$	169	$	102	$	106	$	69	$	44	$	47	$	537
Recreational vehicle lending
800 and above	$	8,475	$	5,121	$	5,837	$	4,627	$	2,456	$	3,594	$	30,110
750-799		66,834		22,707		17,173		11,973		5,281		6,794		130,762
700-749		32,702		9,500		6,169		3,768		1,657		2,343		56,139
650-699		7,390		2,423		1,842		948		649		905		14,157
600-649		990		408		291		333		152		111		2,285
550-599		271		100		163		318		6		72		930
500-549		39		21		105		62		26		91		344
Under 500		-		-		11		-		-		7		18
Unknown		-		-		-		-		-		-		-
Total	$	116,701	$	40,280	$	31,591	$	22,029	$	10,227	$	13,917	$	234,745
Accrued interest excluded from total	$	265	$	93	$	78	$	56	$	26	$	28	$	546
Other
800 and above	$	2,328	$	1,424	$	1,493	$	882	$	357	$	695	$	7,179
750-799		13,923		9,093		6,074		3,175		2,183		2,731		37,179
700-749		10,791		5,426		3,301		1,899		906		2,194		24,517
650-699		20,167		1,715		1,249		657		561		1,332		25,681
600-649		761		368		272		190		284		357		2,232
550-599		159		42		127		167		46		154		695
500-549		8		53		56		55		38		98		308
Under 500		6		62		42		14		12		18		154
Unknown		975		-		-		-		-		-		975
Total	$	49,118	$	18,183	$	12,614	$	7,039	$	4,387	$	7,579	$	98,920
Accrued interest excluded from total	$	73	$	40	$	36	$	19	$	11	$	38	$	217
Total installment
800 and above	$	18,316	$	12,331	$	13,345	$	10,415	$	5,781	$	8,722	$	68,910
750-799		128,191		56,768		44,299		30,829		17,261		20,496		297,844
700-749		62,673		24,650		17,733		12,134		5,672		9,490		132,352
650-699		31,402		5,817		5,392		2,828		2,376		3,615		51,430
600-649		2,124		1,195		772		850		621		1,072		6,634
550-599		667		223		381		598		167		417		2,453
500-549		47		123		161		202		64		256		853
Under 500		6		62		53		24		180		29		354
Unknown		975		-		-		-		-		-		975
Total	$	244,401	$	101,169	$	82,136	$	57,880	$	32,122	$	44,097	$	561,805
Accrued interest excluded from total	$	507	$	235	$	220	$	144	$	81	$	113	$	1,300

(1) Credit scores have been updated within the last twelve months.

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Shareholders' Equity and Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2022

Shareholders' Equity and Earnings Per Common Share [Abstract]

Reconciliation of Basic and Diluted Net Income Per Share

A reconciliation of basic and diluted net income per common share follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands, except per share data)
Net income	$	13,001	$	12,388	$	30,968	$	34,425
Weighted average shares outstanding (1)		21,070		21,750		21,131		21,788
Stock units for deferred compensation plan for non-employee directors		133		113		131		118
Effect of stock options		42		70		49		76
Performance share units		21		34		23		32
Weighted average shares outstanding for calculation of diluted earnings per share		21,266		21,967		21,334		22,014
Net income per common share
Basic (1)	$	0.62	$	0.57	$	1.47	$	1.58
Diluted	$	0.61	$	0.56	$	1.45	$	1.56

(1) Basic net income per common share includes weighted average common shares outstanding during the period and participating share awards.

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2022

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments According to Type of Hedge Designation

Our derivative financial instruments according to the type of hedge in which they are designated follows:

	June 30, 2022
	Notional Amount		Average Maturity (years)		Fair Value
	(Dollars in thousands)
Fair value hedge designation
Pay-fixed interest rate swap agreements - commercial	$	6,579		6.9	$	193
Pay-fixed interest rate swap agreements - securities available for sale		148,895		5.3		15,460
Total	$	155,474		5.4	$	15,653
No hedge designation
Rate-lock mortgage loan commitments	$	96,536		0.1	$	(5,072	)
Mandatory commitments to sell mortgage loans		98,986		0.1		556
Pay-fixed interest rate swap agreements - mortgage		31,000		7.1		1,283
Pay-fixed interest rate swap agreements - commercial		217,503		5.3		9,545
Pay-variable interest rate swap agreements - commercial		217,503		5.3		(9,545	)
Total	$	661,528		3.9	$	(3,233	)

	December 31, 2021
	Notional Amount		Average Maturity (years)		Fair Value
	(Dollars in thousands)
Fair value hedge designation
Pay-fixed interest rate swap agreements - commercial	$	6,753		7.4	$	(384	)
Pay-fixed interest rate swap agreements - securities available for sale		148,895		5.8		4,413
Total	$	155,648		5.9	$	4,029
No hedge designation
Rate-lock mortgage loan commitments	$	129,846		0.1	$	2,140
Mandatory commitments to sell mortgage loans		97,737		0.1		(68	)
Interest rate swaption agreement		10,000		0.2		186
Pay-fixed interest rate swap agreements - commercial		207,080		5.7		(5,179	)
Pay-variable interest rate swap agreements - commercial		207,080		5.7		5,179
Interest rate cap agreements		90,000		1.3		35
Total	$	741,743		3.4	$	2,293

Fair Value of Derivative Instruments

Fair Values of Derivative Instruments

	Asset Derivatives						Liability Derivatives
	June 30, 2022			December 31, 2021			June 30, 2022			December 31, 2021
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
	(In thousands)
Derivatives designated as hedging instruments
Pay-fixed interest rate swap agreements	Other assets	$	15,653	Other assets	$	4,413	Other liabilities	$	-	Other liabilities	$	384
Derivatives not designated as hedging instruments
Rate-lock mortgage loan commitments	Other assets		-	Other assets		2,140	Other liabilities		5,072	Other liabilities		-
Mandatory commitments to sell mortgage loans	Other assets		556	Other assets		-	Other liabilities		-	Other liabilities		68
Pay-fixed interest rate swap agreements - mortgage	Other assets		1,283	Other assets		-	Other liabilities		-	Other liabilities		-
Interest rate swaption agreement	Other assets		-	Other assets		186	Other liabilities		-	Other liabilities		-
Pay-fixed interest rate swap agreements - commercial	Other assets		9,735	Other assets		165	Other liabilities		190	Other liabilities		5,344
Pay-variable interest rate swap agreements - commercial	Other assets		190	Other assets		5,344	Other liabilities		9,735	Other liabilities		165
Interest rate cap agreements	Other assets		-	Other assets		35	Other liabilities		-	Other liabilities		-
			11,764			7,870			14,997			5,577
Total derivatives		$	27,417		$	12,283		$	14,997		$	5,961

Effect of Derivative Financial Instruments on Consolidated Statement of Operations

The effect of derivative financial instruments on the Condensed Consolidated Statements of Operations follows:

		Gain (Loss) Recognized in Income
	Location of  Gain (Loss)  Recognized  in Income	Three Month Periods Ended June 30,
		2022			2021
Fair Value Hedges		(In thousands)
Pay-fixed interest rate swap agreement - commercial	Interest and fees on loans	$	200		$	(92	)
Pay-fixed interest rate swap agreement - securities available for sale	Interest on securities available for sale - tax - exempt		3,501			(2,234	)
Total		$	3,701		$	(2,326	)
No hedge designation
Rate-lock mortgage loan commitments	Net gains on mortgage loans	$	(1,842	)	$	1,158
Mandatory commitments to sell mortgage loans	Net gains on mortgage loans		(1,350	)		(1,027	)
Pay-fixed interest rate swap agreements -  mortgage	Net gains on mortgage loans		656			-
Interest rate swaption agreement	Net gains on mortgage loans		-			(27	)
Pay-fixed interest rate swap agreements -  commercial	Interest income		5,147			(448	)
Pay-variable interest rate swap agreements - commercial	Interest income		(5,147	)		448
Pay-fixed interest rate swap agreements	Interest expense		-			120
Interest rate cap agreements	Interest expense		23			(4	)
Purchased options	Interest expense		-			11
Written options	Interest expense		-			(11	)
Total		$	(2,513	)	$	220

		Gain (Loss) Recognized in Income
	Location of  Gain (Loss)  Recognized  in Income	Six Month Periods Ended June 30,
		2022			2021
		(In thousands)
Fair Value Hedges
Pay-fixed interest rate swap agreement - commercial	Interest and fees on loans	$	576		$	260
Pay-fixed interest rate swap agreement - securities available for sale	Interest on securities available for sale - tax - exempt		11,048			2,639
Total		$	11,624		$	2,899
No hedge designation
Rate-lock mortgage loan commitments	Net gains on mortgage loans	$	(7,212	)	$	(2,664	)
Mandatory commitments to sell mortgage loans	Net gains on mortgage loans		624			810
Pay-fixed interest rate swap agreements - mortgage	Net gains on mortgage loans		1,283			-
Interest rate swaption agreement	Net gains on mortgage loans		(186	)		(27	)
Pay-fixed interest rate swap agreements - commercial	Interest income		14,724			2,827
Pay-variable interest rate swap agreements - commercial	Interest income		(14,724	)		(2,827	)
Pay-fixed interest rate swap agreements	Interest expense		-			238
Interest rate cap agreements	Interest expense		245			11
Purchased options	Interest expense		-			29
Written options	Interest expense		-			(29	)
Total		$	(5,246	)	$	(1,632	)

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Goodwill and Other Intangibles (Tables)

6 Months Ended

Jun. 30, 2022

Goodwill and Other Intangibles [Abstract]

Other Intangible Assets, Net of Amortization

The following table summarizes intangible assets, net of amortization:

	June 30, 2022				December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(In thousands)
Amortized intangible assets - core deposits	$	11,916	$	9,045	$	11,916	$	8,580
Unamortized intangible assets - goodwill	$	28,300			$	28,300

Estimated Core Deposits Intangible Amortization

A summary of estimated core deposits intangible amortization at June 30, 2022 follows:

	(In thousands)
Six months ending December 31, 2022		320
2023		547
2024		516
2025		487
2026		460
2027 and thereafter		541
Total	$	2,871

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Share Based Compensation (Tables)

6 Months Ended

Jun. 30, 2022

Share Based Compensation [Abstract]

Restricted Stock and Performance Stock Units Granted

A summary of restricted stock and performance stock units (“PSU”) granted pursuant to our long-term incentive plan follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Restricted stock		2,500		10,000		58,787		85,584
PSU		-		-		19,748		23,981

Outstanding Stock Option Grants and Transactions

A summary of outstanding stock option grants and related transactions follows:

	Number of Shares			Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregated Intrinsic Value
								(In thousands)
Outstanding at January 1, 2022		80,839		$	5.76
Granted		-
Exercised		(21,632	)		3.33
Forfeited		-
Expired		-
Outstanding at June 30, 2022		59,207		$	6.65		1.4	$	750
Vested and expected to vest at June 30, 2022		59,207		$	6.65		1.4	$	750
Exercisable at June 30, 2022		59,207		$	6.65		1.4	$	750

Non-Vested Restricted Stock, Restricted Stock Units and PSU's

A summary of outstanding non-vested restricted stock and PSUs and related transactions follows:

	Number of Shares			Weighted- Average Grant Date Fair Value
Outstanding at January 1, 2022		234,226		$	21.64
Granted		78,535			26.31
Vested		(55,875	)		22.92
Forfeited		(10,200	)		22.14
Outstanding at June 30, 2022		246,686		$	22.81

Information Regarding Options Exercised

Certain information regarding options exercised during the periods follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)				(In thousands)
Intrinsic value	$	111	$	388	$	424	$	701
Cash proceeds received	$	22	$	44	$	72	$	104
Tax benefit realized	$	23	$	81	$	89	$	147

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Regulatory Matters (Tables)

6 Months Ended

Jun. 30, 2022

Regulatory Matters [Abstract]

Actual Capital Amounts and Ratios

Our actual capital amounts and ratios follow (1):

	Actual					Minimum for Adequately Capitalized Institutions					Minimum for Well-Capitalized Institutions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
June 30, 2022
Total capital to risk-weighted assets
Consolidated	$	508,950		13.64	%	$	298,424		8.00	%	NA		NA
Independent Bank		456,878		12.26			298,219		8.00		$	372,774		10.00	%
Tier 1 capital to risk-weighted assets
Consolidated	$	422,723		11.33	%	$	223,818		6.00	%	NA		NA
Independent Bank		410,651		11.02			223,664		6.00		$	298,219		8.00	%
Common equity tier 1 capital to risk-weighted assets
Consolidated	$	384,321		10.30	%	$	167,864		4.50	%	NA		NA
Independent Bank		410,651		11.02			167,748		4.50		$	242,303		6.50	%
Tier 1 capital to average assets
Consolidated	$	422,723		8.74	%	$	193,472		4.00	%	NA		NA
Independent Bank		410,651		8.49			193,575		4.00		$	241,969		5.00	%
December 31, 2021
Total capital to risk-weighted assets
Consolidated	$	488,495		14.53	%	$	268,991		8.00	%	NA		NA
Independent Bank		438,352		13.05			268,808		8.00		$	336,011		10.00	%
Tier 1 capital to risk-weighted assets
Consolidated	$	406,645		12.09	%	$	201,743		6.00	%	NA		NA
Independent Bank		396,351		11.80			201,606		6.00		$	268,808		8.00	%
Common equity tier 1 capital to risk-weighted assets
Consolidated	$	368,277		10.95	%	$	151,307		4.50	%	NA		NA
Independent Bank		396,351		11.80			151,205		4.50		$	218,407		6.50	%
Tier 1 capital to average assets
Consolidated	$	406,645		8.79	%	$	185,034		4.00	%	NA		NA
Independent Bank		396,351		8.57			185,077		4.00		$	231,347		5.00	%

(1) These ratios do not reflect a capital conservation buffer of 2.50% at June 30, 2022 and December 31, 2021.

NA - Not applicable

Regulatory Capital

The components of our regulatory capital are as follows:

	Consolidated						Independent Bank
	June 30, 2022			December 31, 2021			June 30, 2022			December 31, 2021
	(In thousands)
Total shareholders' equity	$	331,134		$	398,484		$	357,464		$	426,558
Add (deduct)
Accumulated other comprehensive income (loss) for regulatory purposes		79,206			(6,298	)		79,206			(6,298	)
Goodwill and other intangibles		(31,171	)		(31,636	)		(31,171	)		(31,636	)
CECL (1)		5,152			7,727			5,152			7,727
Common equity tier 1 capital		384,321			368,277			410,651			396,351
Qualifying trust preferred securities		38,402			38,368			-			-
Tier 1 capital		422,723			406,645			410,651			396,351
Subordinated debt		40,000			40,000			-			-
Allowance for credit losses and allowance for unfunded lending commitments limited to 1.25% of total risk-weighted assets		46,227			41,850			46,227			42,001
Total risk-based capital	$	508,950		$	488,495		$	456,878		$	438,352

(1) We elected the three year CECL transition method for regulatory purposes.

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Fair Value Disclosures (Tables)

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value

Assets and liabilities measured at fair value, including financial assets for which we have elected the fair value option, were as follows:

			Fair Value Measurements Using
	Fair Value Measure- ments		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Un- observable Inputs (Level 3)
	(In thousands)
June 30, 2022:
Measured at Fair Value on a Recurring Basis
Assets
Securities available for sale
U.S. agency	$	13,991	$	-	$	13,991	$	-
U.S. agency residential mortgage-backed		100,689		-		100,689		-
U.S. agency commercial mortgage-backed		15,591		-		15,591		-
Private label mortgage-backed		99,839		-		99,839		-
Other asset backed		234,235		-		234,235		-
Obligations of states and political subdivisions		312,915		-		312,915		-
Corporate		81,009		-		81,009		-
Trust preferred		936		-		936		-
Foreign government		499		-		499		-
Loans held for sale, carried at fair value		31,400		-		31,400		-
Capitalized mortgage loan servicing rights		39,477		-		-		39,477
Derivatives (1)		27,417		-		27,417		-
Liabilities
Derivatives (2)		14,997		-		14,997		-
Measured at Fair Value on a Non-recurring Basis:
Assets
Collateral dependent loans (3)
Commercial
Commercial and industrial		231		-		-		231
Commercial real estate		56		-		-		56
Mortgage
1-4 family owner occupied - non-jumbo		376		-		-		376
1-4 family non-owner occupied		7		-		-		7
1-4 family - 2nd lien		62		-		-		62
Resort lending		25		-		-		25
Installment
Boat lending		66		-		-		66
Recreational vehicle lending		33		-		-		33
Other		101		-		-		101

(1) Included in accrued income and other assets

(2) Included in accrued expenses and other liabilities

(3) Only includes individually evaluated loans with specific loss allocations based on collateral value.

			Fair Value Measurements Using
	Fair Value Measure- ments		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Un- observable Inputs (Level 3)
	(In thousands)
December 31, 2021:
Measured at Fair Value on a Recurring Basis
Assets
Securities available for sale
U.S. agency	$	34,674	$	-	$	34,674	$	-
U.S. agency residential mortgage-backed		307,985		-		307,985		-
U.S. agency commercial mortgage-backed		22,926		-		22,926		-
Private label mortgage-backed		102,615		-		102,615		-
Other asset backed		216,170		-		216,170		-
Obligations of states and political subdivisions		576,076		-		576,076		-
Corporate		149,959		-		149,959		-
Trust preferred		1,919		-		1,919		-
Foreign government		506		-		506		-
Loans held for sale, carried at fair value		55,470		-		55,470		-
Capitalized mortgage loan servicing rights		26,232		-		-		26,232
Derivatives (1)		12,283		-		12,283		-
Liabilities
Derivatives (2)		5,961		-		5,961		-
Measured at Fair Value on a Non-recurring Basis:
Assets
Collateral dependent loans (3)
Commercial
Commercial and industrial		274		-		-		274
Commercial real estate		65		-		-		65
Mortgage
1-4 family owner occupied - non-jumbo		516		-		-		516
1-4 family non-owner occupied		130		-		-		130
1-4 family - 2nd lien		121		-		-		121
Resort lending		77		-		-		77
Installment
Boat lending		51		-		-		51
Recreational vehicle lending		77		-		-		77
Other		45		-		-		45

(1) Included in accrued income and other assets

(2) Included in accrued expenses and other liabilities

(3) Only includes impaired loans with specific loss allocations based on collateral value.

Changes in Fair Value for Financial Assets

Changes in fair values for financial assets which we have elected the fair value option for the periods presented were as follows:

	Changes in Fair Values for the Six- Month Periods Ended June 30 for items Measured at Fair Value Pursuant to Election of the Fair Value Option
	Net Gains on Assets			Mortgage			Total Change in Fair Values Included in Current
	Mortgage Loans			Loan Servicing, net			Period Earnings
	(In thousands)
2022
Loans held for sale	$	(1,806	)	$	-		$	(1,806	)
Capitalized mortgage loan servicing rights		-			9,596			9,596
2021
Loans held for sale		(2,400	)		-			(2,400	)
Capitalized mortgage loan servicing rights		-			(581	)		(581	)

For those items measured at fair value pursuant to our election of the fair value option, interest income is recorded within the Condensed Consolidated Statements of Operations based on the contractual amount of interest income earned on these financial assets and dividend income is recorded based on cash dividends received.

The following represent impairment charges recognized during the three and six month periods ended June 30, 2022 and 2021 relating to assets measured at fair value on a non-recurring basis:

• Loans that are individually evaluated using the fair value of collateral for collateral dependent loans had a carrying amount of $1.0 million, which is net of a valuation allowance of $0.4 million at June 30, 2022, and had a carrying amount of $1.4 million, which is net of a valuation allowance of  $0.6  million  at December 31, 2021.  The provision for credit losses included in our results of operations relating to collateral dependent loans was a net expense of $0.1 million and $0.1 million for the three month periods ending June 30, 2022 and 2021, respectively, and a net expense of $0.2 million and $0.1 million for the six month periods ending June 30, 2022 and 2021, respectively.

• Other real estate, which is measured using the fair value of the property, had a carrying amount of zero which is net of a valuation allowance of $0.03 million at June 30, 2022, and a carrying amount of zero which is net of a valuation allowance of $0.03 million, at December 31, 2021. Charges included in our results of operations relating to other real estate measured at fair value were all zero during the three and six month periods ended June 30, 2022 and 2021.

Reconciliation for all Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

A reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) follows:

	Capitalized Mortgage Loan Servicing Rights
	Three Months Ended June 30,					Six Months Ended June 30,
	2022		2021			2022		2021
	(In thousands)					(In thousands)
Beginning balance	$	35,933	$	23,530		$	26,232	$	16,904
Total gains (losses) realized and unrealized:
Included in results of operations		2,038		(3,838	)		9,596		(581	)
Included in other comprehensive loss		-		-			-		-
Purchases, issuances, settlements, maturities and calls		1,506		2,739			3,649		6,108
Transfers in and/or out of Level 3		-		-			-		-
Ending balance	$	39,477	$	22,431		$	39,477	$	22,431
Amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at June 30	$	2,038	$	(3,838	)	$	9,596	$	(581	)

Quantitative Information About Level 3 Fair Value Measurements Measured on a Recurring Basis and Non-recurring Basis

Quantitative information about our Level 3 fair value measurements measured on a recurring basis follows:

	Asset Fair Value		Valuation Technique	Unobservable Inputs	Range			Weighted Average
	(In thousands)
June 30, 2022
Capitalized mortgage loan servicing rights	$	39,477	Present value of net servicing revenue	Discount rate	9.99% to 14.11		%		10.10	%
				Cost to service	$	67 to $194		$	78
				Ancillary income	20 to 35				21
				Float rate		3.08	%		3.08	%
				Prepayment rate	7.04% to 31.92		%		7.90	%
December 31, 2021
Capitalized mortgage loan servicing rights	$	26,232	Present value of net servicing revenue	Discount rate	10.00% to 13.00		%		10.07	%
				Cost to service	$	67 to $281		$	78
				Ancillary income	20 to 30				21
				Float rate		1.36	%		1.36	%
				Prepayment rate	7.02% to 44.21		%		13.92	%

Quantitative information about Level 3 fair value measurements measured on a non-recurring basis follows:

	Asset Fair Value		Valuation Technique	Unobservable Inputs	Range		Weighted Average
	(In thousands)
June 30, 2022
Collateral dependent loans
Commercial	$	287	Sales comparison approach	Adjustment for differences between comparable sales	(12.5)% to 12.0	%		1.1	%
Mortgage and Installment(1)		670	Sales comparison approach	Adjustment for differences between comparable sales	(25.5) to 20.5			(1.7	)
December 31, 2021
Collateral dependent loans
Commercial	$	339	Sales comparison approach	Adjustment for differences between comparable sales	(12.5)% to 12.0	%		1.5	%
Mortgage and Installment(1)		1,017	Sales comparison approach	Adjustment for differences between comparable sales	(30.1) to 29.3			0.2

(1) In addition to the valuation techniques and unobservable inputs discussed above, at June 30, 2022 and December 31, 2021 certain collateral dependent installment loans totaling approximately $0.20 million and $0.17 million, respectively, are secured by collateral other than real estate.  For the majority of these loans, we apply internal discount rates to industry valuation guides.

Aggregate Fair Value and Aggregate Remaining Contractual Principal Balance for Loans Held for Sale

The following table reflects the difference between the aggregate fair value and the aggregate remaining contractual principal balance outstanding for loans held for sale for which the fair value option has been elected for the periods presented.

	Aggregate Fair Value		Difference			Contractual Principal
	(In thousands)
Loans held for sale
June 30, 2022	$	31,400	$	(755	)	$	32,155
December 31, 2021		55,470		1,051			54,419

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Fair Values of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2022

Fair Values of Financial Instruments [Abstract]

Estimated Recorded Book Balances and Fair Values

The estimated recorded book balances and fair values follow:

					Fair Value Using
	Recorded Book Balance		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Un- observable Inputs (Level 3)
	(In thousands)
June 30, 2022
Assets
Cash and due from banks	$	56,516	$	56,516	$	56,516	$	-	$	-
Interest bearing deposits		2,970		2,970		2,970		-		-
Securities available for sale		859,704		859,704		-		859,704		-
Securities held to maturity		381,608		359,701		-		359,701		-
Federal Home Loan Bank and Federal
Reserve Bank Stock		17,653	NA		NA		NA		NA
Net loans and loans held for sale		3,242,367		2,991,614		-		31,400		2,960,214
Accrued interest receivable		13,923		13,923		-		6,228		7,695
Derivative financial instruments		27,417		27,417		-		27,417		-
Liabilities
Deposits with no stated maturity (1)	$	3,904,324	$	3,904,324	$	3,904,324	$	-	$	-
Deposits with stated maturity (1)		386,250		381,095		-		381,095		-
Other borrowings		25,507		25,506		-		25,506		-
Subordinated debt		39,395		42,464		-		42,464		-
Subordinated debentures		39,626		38,034		-		38,034		-
Accrued interest payable		588		588		73		515		-
Derivative financial instruments		14,997		14,997		-		14,997		-
December 31, 2021
Assets
Cash and due from banks	$	51,069	$	51,069	$	51,069	$	-	$	-
Interest bearing deposits		58,404		58,404		58,404		-		-
Securities available for sale		1,412,830		1,412,830		-		1,412,830		-
Federal Home Loan Bank and Federal
Reserve Bank Stock		18,427	NA		NA		NA		NA
Net loans and loans held for sale		2,948,074		2,931,079		35,233		55,470		2,840,376
Accrued interest receivable		12,865		12,865		1		6,028		6,836
Derivative financial instruments		12,283		12,283		-		12,283		-
Liabilities
Deposits with no stated maturity (1)	$	3,781,298	$	3,781,298	$	3,781,298	$	-	$	-
Deposits with stated maturity (1)		335,792		336,006		-		336,006		-
Other borrowings		30,009		30,155		-		30,155		-
Subordinated debt		39,357		44,999		-		44,999		-
Subordinated debentures		39,592		33,866		-		33,866		-
Accrued interest payable		497		497		67		430		-
Derivative financial instruments		5,961		5,961		-		5,961		-

(1) Deposits with no stated maturity include reciprocal deposits with a recorded book balance of $585.376 million and $562.210 million at June 30, 2022 and December 31, 2021, respectively. Deposits with a stated maturity include reciprocal deposits with a recorded book balance of $29.828 million and $24.416 million at June 30, 2022 and December 31, 2021, respectively.

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Contingencies (Tables)

6 Months Ended

Jun. 30, 2022

Contingencies [Abstract]

Commercial Loan Portfolio with Higher Potential Risk

Certain consumer-driven industries (including restaurants, hotels, retail, fitness, and other industries) have experienced increased stress and have been more adversely impacted by the COVID-19 pandemic and related consumer trends, labor shortages and supply chain disruptions. We believe that the following concentrations within our commercial loan portfolio represent higher potential risk in the current economic environment. The balances below are as of June 30, 2022.

	Amount		% of Total Loans
	(Dollars in millions)
Commercial and industrial portfolio segment:
Retail	$	79		2.4	%
Hotel		42		1.3
Food service		38		1.2
		159		4.9
Commercial real estate portfolio segment:
Retail		111		3.4
Office		74		2.3
Multifamily		56		1.7
		241		7.4
Total	$	400		12.3	%

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Accumulated Other Comprehensive Income (Loss) ("AOCIL") (Tables)

6 Months Ended

Jun. 30, 2022

Accumulated Other Comprehensive Income (Loss) ("AOCIL") [Abstract]

Accumulated Other Comprehensive Income (Loss) (AOCIL), Net of Tax

A summary of changes in AOCIL follows:

	Unrealized Gains (Losses) on Securities AFS			Unrealized Losses on Securities Transferred to Securities HTM (1)			Dispropor- tionate Tax Effects from Securities AFS			Total
	(In thousands)
For the three months ended June 30, 2022
Balances at beginning of period	$	(48,616	)	$	-		$	(5,798	)	$	(54,414	)
Other comprehensive loss before reclassifications		(10,447	)		(19,870	)		-			(30,317	)
Amounts reclassified from AOCIL		(272	)		-			-			(272	)
Net current period other comprehensive loss		(10,719	)		(19,870	)		-			(30,589	)
Balances at end of period	$	(59,335	)	$	(19,870	)	$	(5,798	)	$	(85,003	)
2021
Balances at beginning of period	$	10,136		$	-		$	(5,798	)	$	4,338
Other comprehensive income before reclassifications		4,078			-			-			4,078
Amounts reclassified from AOCIL		-			-			-			-
Net current period other comprehensive income		4,078			-			-			4,078
Balances at end of period	$	14,214		$	-		$	(5,798	)	$	8,416
For the six months ended June 30, 2022
Balances at beginning of period	$	6,299		$	-		$	(5,798	)	$	501
Other comprehensive loss before reclassifications		(65,417	)		(19,870	)		-			(85,287	)
Amounts reclassified from AOCIL		(217	)		-			-			(217	)
Net current period other comprehensive loss		(65,634	)		(19,870	)		-			(85,504	)
Balances at end of period	$	(59,335	)	$	(19,870	)	$	(5,798	)	$	(85,003	)
2021
Balances at beginning of period	$	15,822		$	-		$	(5,798	)	$	10,024
Other comprehensive loss before reclassifications		(2,727	)		-			-			(2,727	)
Amounts reclassified from AOCIL		1,119			-			-			1,119
Net current period other comprehensive loss		(1,608	)		-			-			(1,608	)
Balances at end of period	$	14,214		$	-		$	(5,798	)	$	8,416

(1) Represents the remaining unrealized loss to be accreted on securities that were transferred from AFS to HTM on April 1, 2022.

Reclassifications Out of Each Component of AOCIL

A summary of reclassifications out of each component of AOCIL for the three months ended June 30 follows:

AOCIL Component	Amount Reclassified From AOCIL			Affected Line Item in Condensed  Consolidated Statements of Operations
	(In thousands)
2022
Unrealized gains (losses) on securities available for sale
	$	(345	)	Net gains (losses) on securities available for sale
		(73	)	Income tax expense
	$	(272	)	Reclassifications, net of tax
2021
Unrealized gains (losses) on securities available for sale
	$	-		Net gains (losses) on securities available for sale
		-		Income tax expense
	$	-		Reclassifications, net of tax

A summary of reclassifications out of each component of AOCIL for the six months ended June 30 follows:

AOCIL Component	Amount Reclassified From AOCIL			Affected Line Item in Condensed  Consolidated Statements of Operations
	(In thousands)
2022
Unrealized gains (losses) on securities available for sale
	$	(275	)	Net gains (losses) on securities available for sale
		(58	)	Income tax expense
	$	(217	)	Reclassifications, net of tax
2021
Unrealized gains (losses) on securities available for sale
	$	1,416		Net gains (losses) on securities available for sale
		297		Income tax expense
	$	1,119		Reclassifications, net of tax

XML

Revenue from Contracts with Customers (Tables)

6 Months Ended

Jun. 30, 2022

Revenue from Contracts with Customers [Abstract]

Disaggregation of Revenue Sources by Attribute

Disaggregation of our revenue sources by attribute follows:

Three months ending June 30, 2022
	Service Charges on Deposit Accounts		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	2,499	$	-	$	-	$	-	$	2,499
Account service charges		452		-		-		-		452
ATM fees		-		310		-		-		310
Other		-		237		-		-		237
Business
Overdraft fees		145		-		-		-		145
ATM fees		-		7		-		-		7
Other		-		71		-		-		71
Interchange income		-		-		3,422		-		3,422
Asset management revenue		-		-		-		453		453
Transaction based revenue		-		-		-		229		229
Total	$	3,096	$	625	$	3,422	$	682	$	7,825
Reconciliation to Condensed Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	625
Investment and insurance commissions										682
Bank owned life insurance (1)										105
Other (1)										1,632
Total									$	3,044

(1) Excluded from the scope of ASC Topic 606.

Three months ending June 30, 2021
	Service Charges on Deposit Accounts		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	1,835	$	-	$	-	$	-	$	1,835
Account service charges		331		-		-		-		331
ATM fees		-		213		-		-		213
Other		-		175		-		-		175
Business
Overdraft fees		152		-		-		-		152
ATM fees		-		4		-		-		4
Other		-		70		-		-		70
Interchange income		-		-		3,453		-		3,453
Asset management revenue		-		-		-		401		401
Transaction based revenue		-		-		-		233		233
Total	$	2,318	$	462	$	3,453	$	634	$	6,867
Reconciliation to Condensed Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	462
Investment and insurance commissions										634
Bank owned life insurance (1)										127
Other (1)										648
Total									$	1,871

(1) Excluded from the scope of ASC Topic 606.

Six months ending June 30, 2022
	Service Charges on Deposit Accounts		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	5,005	$	-	$	-	$	-	$	5,005
Account service charges		773		-		-		-		773
ATM fees		-		587		-		-		587
Other		-		488		-		-		488
Business
Overdraft fees		275		-		-		-		275
ATM fees		-		14		-		-		14
Other		-		158		-		-		158
Interchange income		-		-		6,504		-		6,504
Asset management revenue		-		-		-		922		922
Transaction based revenue		-		-		-		498		498
Total	$	6,053	$	1,247	$	6,504	$	1,420	$	15,224
Reconciliation to Condensed Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	1,247
Investment and insurance commissions										1,420
Bank owned life insurance (1)										243
Other (1)										2,497
Total									$	5,407

(1) Excluded from the scope of ASC Topic 606.

Six months ending June 30, 2021
	Service Charges on Deposit Accounts		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	3,047	$	-	$	-	$	-	$	3,047
Account service charges		843		-		-		-		843
ATM fees		-		481		-		-		481
Other		-		373		-		-		373
Business
Overdraft fees		344		-		-		-		344
ATM fees		-		10		-		-		10
Other		-		159		-		-		159
Interchange income		-		-		6,502		-		6,502
Asset management revenue		-		-		-		783		783
Transaction based revenue		-		-		-		434		434
Total	$	4,234	$	1,023	$	6,502	$	1,217	$	12,976
Reconciliation to Condensed Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	1,023
Investment and insurance commissions										1,217
Bank owned life insurance (1)										266
Other (1)										1,395
Total									$	3,901

(1) Excluded from the scope of ASC Topic 606.

XML

Leases (Tables)

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Components of Operating Leases

The cost components of our operating leases follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)				(In thousands)
Operating lease cost	$	408	$	412	$	823	$	835
Variable lease cost		25		15		41		31
Short-term lease cost		19		16		37		30
Total	$	452	$	443	$	901	$	896

Supplemental Balance Sheet Information Related to Operating Leases

Supplemental balance sheet information related to our operating leases follows:

	June 30, 2022			December 31, 2021
	(Dollars in thousands)
Lease right of use asset (1)	$	5,959		$	6,481
Lease liabilities (2)	$	6,062		$	6,602
Weighted average remaining lease term (years)		6.31			6.50
Weighted average discount rate		2.3	%		2.3	%

(1) Included in Accrued income and other assets in our Condensed Consolidated Statements of Financial Condition.

(2) Included in Accrued expenses and other liabilities in our Condensed Consolidated Statements of Financial Condition.

Maturity Analysis of Lease Liabilities

Maturity analysis of our lease liabilities at June 30, 2022 based on required contractual payments follows:

	(In thousands)
Six months ending December 31, 2022	$	789
2023		1,400
2024		871
2025		865
2026		801
2027 and thereafter		1,826
Total lease payments		6,552
Less imputed interest		(490	)
Total	$	6,062

XML

Securities, Securities Available for Sale (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Available-for-sale Securities, Amortized Cost Basis [Abstract]
Amortized cost	$ 934,815	$ 1,404,858
Unrealized Gains	409	16,594
Unrealized Losses	75,520	8,622
Fair Value	859,704	1,412,830
U.S. Agency [Member]
Available-for-sale Securities, Amortized Cost Basis [Abstract]
Amortized cost	14,549	34,634
Unrealized Gains	23	152
Unrealized Losses	581	112
Fair Value	13,991	34,674
U.S. Agency Residential Mortgage-Backed [Member]
Available-for-sale Securities, Amortized Cost Basis [Abstract]
Amortized cost	108,141	309,907
Unrealized Gains	35	1,952
Unrealized Losses	7,487	3,874
Fair Value	100,689	307,985
U.S. Agency Commercial Mortgage-Backed [Member]
Available-for-sale Securities, Amortized Cost Basis [Abstract]
Amortized cost	16,873	23,066
Unrealized Gains	0	84
Unrealized Losses	1,282	224
Fair Value	15,591	22,926
Private Label Mortgage-Backed [Member]
Available-for-sale Securities, Amortized Cost Basis [Abstract]
Amortized cost	106,549	102,480
Unrealized Gains	256	807
Unrealized Losses	6,966	672
Fair Value	99,839	102,615
Other Asset Backed [Member]
Available-for-sale Securities, Amortized Cost Basis [Abstract]
Amortized cost	240,479	215,235
Unrealized Gains	3	1,204
Unrealized Losses	6,247	269
Fair Value	234,235	216,170
Obligations of States and Political Subdivisions [Member]
Available-for-sale Securities, Amortized Cost Basis [Abstract]
Amortized cost	358,103	568,355
Unrealized Gains	42	9,942
Unrealized Losses	45,230	2,221
Fair Value	312,915	576,076
Corporate [Member]
Available-for-sale Securities, Amortized Cost Basis [Abstract]
Amortized cost	88,644	148,707
Unrealized Gains	50	2,446
Unrealized Losses	7,685	1,194
Fair Value	81,009	149,959
Trust Preferred [Member]
Available-for-sale Securities, Amortized Cost Basis [Abstract]
Amortized cost	977	1,975
Unrealized Gains	0	0
Unrealized Losses	41	56
Fair Value	936	1,919
Foreign Government [Member]
Available-for-sale Securities, Amortized Cost Basis [Abstract]
Amortized cost	500	499
Unrealized Gains	0	7
Unrealized Losses	1	0
Fair Value	$ 499	$ 506

XML

Securities, Securities Held to Maturity (Details) - USD ($) $ in Thousands		Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Securities, Held-to-Maturity [Abstract]
Carrying Value		$ 381,608		$ 0
Transferred Unrealized Loss	[1]	25,151
ACL		158	$ 0	0
Amortized cost		406,917
Unrealized Gains		51
Unrealized Losses		47,267
Fair Value		359,701		0
Accrued interest receivable on HTM securities		1,700
Available-for-sale Securities Transferred to Held-to-maturity [Abstract]
Available for sale securities amortized cost transferred to held to maturity			418,100
Available for sale securities unrealized loss transferred to held to maturity			26,500
U.S. Agency [Member]
Securities, Held-to-Maturity [Abstract]
Carrying Value		28,432
Transferred Unrealized Loss	[1]	1,959
ACL		0
Amortized cost		30,391
Unrealized Gains		0
Unrealized Losses		3,533
Fair Value		26,858
U.S. Agency Residential Mortgage-Backed [Member]
Securities, Held-to-Maturity [Abstract]
Carrying Value		123,483
Transferred Unrealized Loss	[1]	11,556
ACL		0
Amortized cost		135,039
Unrealized Gains		1
Unrealized Losses		19,271
Fair Value		115,769
U.S. Agency Commercial Mortgage-Backed [Member]
Securities, Held-to-Maturity [Abstract]
Carrying Value		5,071
Transferred Unrealized Loss	[1]	273
ACL		0
Amortized cost		5,344
Unrealized Gains		0
Unrealized Losses		432
Fair Value		4,912
Private Label Mortgage-Backed [Member]
Securities, Held-to-Maturity [Abstract]
Carrying Value		7,211
Transferred Unrealized Loss	[1]	473
ACL		2	0	0
Amortized cost		7,686
Unrealized Gains		0
Unrealized Losses		796
Fair Value		6,890
Obligations of States and Political Subdivisions [Member]
Securities, Held-to-Maturity [Abstract]
Carrying Value		168,189
Transferred Unrealized Loss	[1]	9,542
ACL		30	0	0
Amortized cost		177,761
Unrealized Gains		38
Unrealized Losses		20,166
Fair Value		157,633
Corporate [Member]
Securities, Held-to-Maturity [Abstract]
Carrying Value		48,283
Transferred Unrealized Loss	[1]	1,292
ACL		121	0	0
Amortized cost		49,696
Unrealized Gains		12
Unrealized Losses		3,058
Fair Value		46,650
Trust Preferred [Member]
Securities, Held-to-Maturity [Abstract]
Carrying Value		939
Transferred Unrealized Loss	[1]	56
ACL		5	$ 0	$ 0
Amortized cost		1,000
Unrealized Gains		0
Unrealized Losses		11
Fair Value		$ 989

[1] Represents the remaining unrealized loss to be accreted on securities that were transferred from AFS to HTM on April 1, 2022.

XML

Securities, Available for Sale, Gross Unrealized Losses and Fair Values (Details) $ in Thousands	Jun. 30, 2022 USD ($) Security	Dec. 31, 2021 USD ($)	Jun. 30, 2021 USD ($)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Less Than Twelve Months, Fair Value	$ 785,382	$ 607,923
Less Than Twelve Months, Unrealized Losses	68,153	8,077
Twelve Months or More, Fair Value	54,206	33,530
Twelve Months or More, Unrealized Losses	7,367	545
Total, Fair Value	839,588	641,453
Total, Unrealized Losses	75,520	8,622
Available-for-sale, allowance for credit losses	0		$ 0
Accrued interest receivable	4,500	6,000
U.S. Agency [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Less Than Twelve Months, Fair Value	11,436	11,986
Less Than Twelve Months, Unrealized Losses	580	109
Twelve Months or More, Fair Value	864	1,286
Twelve Months or More, Unrealized Losses	1	3
Total, Fair Value	12,300	13,272
Total, Unrealized Losses	$ 581	112
Number of securities with market fair value less than amortized cost | Security	27
U.S. Agency Residential Mortgage-Backed [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Less Than Twelve Months, Fair Value	$ 78,099	171,398
Less Than Twelve Months, Unrealized Losses	6,344	3,555
Twelve Months or More, Fair Value	18,542	19,024
Twelve Months or More, Unrealized Losses	1,143	319
Total, Fair Value	96,641	190,422
Total, Unrealized Losses	$ 7,487	3,874
Number of securities with market fair value less than amortized cost | Security	162
U.S. Agency Commercial Mortgage-Backed [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Less Than Twelve Months, Fair Value	$ 15,156	19,900
Less Than Twelve Months, Unrealized Losses	1,234	224
Twelve Months or More, Fair Value	435	0
Twelve Months or More, Unrealized Losses	48	0
Total, Fair Value	15,591	19,900
Total, Unrealized Losses	$ 1,282	224
Number of securities with market fair value less than amortized cost | Security	16
Private Label Mortgage-Backed [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Less Than Twelve Months, Fair Value	$ 97,269	64,408
Less Than Twelve Months, Unrealized Losses	6,863	640
Twelve Months or More, Fair Value	1,950	2,180
Twelve Months or More, Unrealized Losses	103	32
Total, Fair Value	99,219	66,588
Total, Unrealized Losses	$ 6,966	672
Number of securities with market fair value less than amortized cost | Security	96
Other Asset Backed [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Less Than Twelve Months, Fair Value	$ 231,837	86,581
Less Than Twelve Months, Unrealized Losses	6,213	248
Twelve Months or More, Fair Value	1,432	978
Twelve Months or More, Unrealized Losses	34	21
Total, Fair Value	233,269	87,559
Total, Unrealized Losses	$ 6,247	269
Number of securities with market fair value less than amortized cost | Security	145
Obligations of States and Political Subdivisions [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Less Than Twelve Months, Fair Value	$ 277,070	178,484
Less Than Twelve Months, Unrealized Losses	39,550	2,151
Twelve Months or More, Fair Value	28,336	7,093
Twelve Months or More, Unrealized Losses	5,680	70
Total, Fair Value	305,406	185,577
Total, Unrealized Losses	$ 45,230	2,221
Number of securities with market fair value less than amortized cost | Security	339
Corporate [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Less Than Twelve Months, Fair Value	$ 74,016	75,166
Less Than Twelve Months, Unrealized Losses	7,368	1,150
Twelve Months or More, Fair Value	1,711	1,050
Twelve Months or More, Unrealized Losses	317	44
Total, Fair Value	75,727	76,216
Total, Unrealized Losses	$ 7,685	1,194
Number of securities with market fair value less than amortized cost | Security	81
Trust Preferred [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Less Than Twelve Months, Fair Value	$ 0	0
Less Than Twelve Months, Unrealized Losses	0	0
Twelve Months or More, Fair Value	936	1,919
Twelve Months or More, Unrealized Losses	41	56
Total, Fair Value	936	1,919
Total, Unrealized Losses	$ 41	$ 56
Number of securities with market fair value less than amortized cost | Security	1
Foreign Government [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Less Than Twelve Months, Fair Value	$ 499
Less Than Twelve Months, Unrealized Losses	1
Twelve Months or More, Fair Value	0
Twelve Months or More, Unrealized Losses	0
Total, Fair Value	499
Total, Unrealized Losses	$ 1
Number of securities with market fair value less than amortized cost | Security	1

XML

Securities, Held to Maturity, Credit Quality (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Held-to-Maturity [Abstract]
Carrying Value	$ 381,608	$ 0
Private Label Mortgage-Backed [Member]
Held-to-Maturity [Abstract]
Carrying Value	7,211
Obligations of States and Political Subdivisions [Member]
Held-to-Maturity [Abstract]
Carrying Value	168,189
Corporate [Member]
Held-to-Maturity [Abstract]
Carrying Value	48,283
Trust Preferred [Member]
Held-to-Maturity [Abstract]
Carrying Value	939
Credit Rated and Non-rated Securities HTM [Member]
Held-to-Maturity [Abstract]
Carrying Value	224,622
AAA [Member]
Held-to-Maturity [Abstract]
Carrying Value	41,809
AAA [Member] | Private Label Mortgage-Backed [Member]
Held-to-Maturity [Abstract]
Carrying Value	7,211
AAA [Member] | Obligations of States and Political Subdivisions [Member]
Held-to-Maturity [Abstract]
Carrying Value	34,598
AAA [Member] | Corporate [Member]
Held-to-Maturity [Abstract]
Carrying Value	0
AAA [Member] | Trust Preferred [Member]
Held-to-Maturity [Abstract]
Carrying Value	0
AA [Member]
Held-to-Maturity [Abstract]
Carrying Value	109,674
AA [Member] | Private Label Mortgage-Backed [Member]
Held-to-Maturity [Abstract]
Carrying Value	0
AA [Member] | Obligations of States and Political Subdivisions [Member]
Held-to-Maturity [Abstract]
Carrying Value	109,674
AA [Member] | Corporate [Member]
Held-to-Maturity [Abstract]
Carrying Value	0
AA [Member] | Trust Preferred [Member]
Held-to-Maturity [Abstract]
Carrying Value	0
A [Member]
Held-to-Maturity [Abstract]
Carrying Value	12,081
A [Member] | Private Label Mortgage-Backed [Member]
Held-to-Maturity [Abstract]
Carrying Value	0
A [Member] | Obligations of States and Political Subdivisions [Member]
Held-to-Maturity [Abstract]
Carrying Value	5,197
A [Member] | Corporate [Member]
Held-to-Maturity [Abstract]
Carrying Value	6,884
A [Member] | Trust Preferred [Member]
Held-to-Maturity [Abstract]
Carrying Value	0
BBB [Member]
Held-to-Maturity [Abstract]
Carrying Value	39,689
BBB [Member] | Private Label Mortgage-Backed [Member]
Held-to-Maturity [Abstract]
Carrying Value	0
BBB [Member] | Obligations of States and Political Subdivisions [Member]
Held-to-Maturity [Abstract]
Carrying Value	1,174
BBB [Member] | Corporate [Member]
Held-to-Maturity [Abstract]
Carrying Value	38,515
BBB [Member] | Trust Preferred [Member]
Held-to-Maturity [Abstract]
Carrying Value	0
Non-Rated [Member]
Held-to-Maturity [Abstract]
Carrying Value	21,369
Non-Rated [Member] | Private Label Mortgage-Backed [Member]
Held-to-Maturity [Abstract]
Carrying Value	0
Non-Rated [Member] | Obligations of States and Political Subdivisions [Member]
Held-to-Maturity [Abstract]
Carrying Value	17,546
Non-Rated [Member] | Corporate [Member]
Held-to-Maturity [Abstract]
Carrying Value	2,884
Non-Rated [Member] | Trust Preferred [Member]
Held-to-Maturity [Abstract]
Carrying Value	$ 939

XML

Securities, Held-to-Maturity, Allowance for Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2022
Held-to-Maturity, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	$ 0	$ 0
Additions (deductions)	0	0
Provision for credit losses	158	158
Recoveries credited to the allowance	0	0
Securities HTM charged against the allowance	0	0
Balance at end of period	158	158
Private Label Mortgage-Backed [Member]
Held-to-Maturity, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	0	0
Provision for credit losses	2	2
Recoveries credited to the allowance	0	0
Securities HTM charged against the allowance	0	0
Balance at end of period	2	2
Obligations of States and Political Subdivisions [Member]
Held-to-Maturity, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	0	0
Provision for credit losses	30	30
Recoveries credited to the allowance	0	0
Securities HTM charged against the allowance	0	0
Balance at end of period	30	30
Corporate [Member]
Held-to-Maturity, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	0	0
Provision for credit losses	121	121
Recoveries credited to the allowance	0	0
Securities HTM charged against the allowance	0	0
Balance at end of period	121	121
Trust Preferred [Member]
Held-to-Maturity, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	0	0
Provision for credit losses	5	5
Recoveries credited to the allowance	0	0
Securities HTM charged against the allowance	0	0
Balance at end of period	$ 5	$ 5

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Securities, Amortized Cost and Fair Value Securities Available for Sale and Held to Maturity Contractual Maturities (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Fiscal Year Maturity [Abstract]
Maturing within one year	$ 10,083
Maturing after one year but within five years	100,901
Maturing after five years but within ten years	134,151
Maturing after ten years	217,638
Amortized cost	462,773
U.S. agency residential mortgage-backed	108,141
U.S. agency commercial mortgage-backed	16,873
Private label mortgage-backed	106,549
Other asset backed	240,479
Amortized cost	934,815	$ 1,404,858
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
Maturing within one year	10,109
Maturing after one year but within five years	94,331
Maturing after five years but within ten years	118,515
Maturing after ten years	186,395
Total available-for-sale securities fair value	409,350
U.S. agency residential mortgage-backed	100,689
U.S. agency commercial mortgage-backed	15,591
Private label mortgage-backed	99,839
Other asset backed	234,235
Total	859,704	1,412,830
Debt Securities, Held-to-Maturity, Amortized Cost, after Allowance for Credit Loss, Maturity [Abstract]
Maturing within one year	4,247
Maturing after one year but within five years	41,546
Maturing after five years but within ten years	119,016
Maturing after ten years	94,039
Amortized cost	258,848
U.S. agency residential mortgage-backed	135,039
U.S. agency commercial mortgage-backed	5,344
Private label mortgage-backed	7,686
Other asset backed	0
Amortized cost	406,917
Debt Securities, Held-to-Maturity, Fair Value, Maturity [Abstract]
Maturing within one year	4,241
Maturing after one year but within five years	39,085
Maturing after five years but within ten years	108,172
Maturing after ten years	80,632
Total held-to-maturity securities fair value	232,130
U.S. agency residential mortgage-backed	115,769
U.S. agency commercial mortgage-backed	4,912
Private label mortgage-backed	6,890
Other asset backed	0
Fair value	$ 359,701	$ 0

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Securities, Gains and Losses Realized on Sale of Securities Available for Sale (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Gain and losses realized on sale of securities available for sale [Abstract]
Proceeds	$ 70,523	$ 81,178
Realized gains	164	1,466
Realized losses	$ 439	$ 50

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Loans, Allowance for Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Analysis of allowance for loan losses by portfolio segment [Roll Forward]
Balance at beginning of period	$ 45,627	$ 46,755	$ 47,252	$ 35,429
Additions (deductions) [Abstract]
Provision for credit losses	2,221	(1,425)	648	(1,899)
Initial allowance on loans purchased with credit deterioration				134
Recoveries credited to the allowance	653	886	1,274	1,434
Loans charged against the allowance	(618)	(290)	(1,291)	(746)
Balance at end of period	47,883	45,926	47,883	45,926
Impact of Adoption [Member] | ASU 2016-13 [Member]
Analysis of allowance for loan losses by portfolio segment [Roll Forward]
Balance at beginning of period				11,574
Commercial [Member]
Analysis of allowance for loan losses by portfolio segment [Roll Forward]
Balance at beginning of period	10,744	9,530	11,519	7,401
Additions (deductions) [Abstract]
Provision for credit losses	164	(946)	(688)	(1,622)
Initial allowance on loans purchased with credit deterioration				95
Recoveries credited to the allowance	151	510	228	669
Loans charged against the allowance	0	0	0	0
Balance at end of period	11,059	9,094	11,059	9,094
Commercial [Member] | Impact of Adoption [Member] | ASU 2016-13 [Member]
Analysis of allowance for loan losses by portfolio segment [Roll Forward]
Balance at beginning of period				2,551
Mortgage [Member]
Analysis of allowance for loan losses by portfolio segment [Roll Forward]
Balance at beginning of period	19,208	18,448	19,221	6,998
Additions (deductions) [Abstract]
Provision for credit losses	1,046	340	868	(280)
Initial allowance on loans purchased with credit deterioration				18
Recoveries credited to the allowance	97	169	268	381
Loans charged against the allowance	(38)	(24)	(44)	(184)
Balance at end of period	20,313	18,933	20,313	18,933
Mortgage [Member] | Impact of Adoption [Member] | ASU 2016-13 [Member]
Analysis of allowance for loan losses by portfolio segment [Roll Forward]
Balance at beginning of period				12,000
Installment [Member]
Analysis of allowance for loan losses by portfolio segment [Roll Forward]
Balance at beginning of period	3,604	3,979	3,749	1,112
Additions (deductions) [Abstract]
Provision for credit losses	791	(219)	940	(306)
Initial allowance on loans purchased with credit deterioration				21
Recoveries credited to the allowance	405	207	778	384
Loans charged against the allowance	(580)	(266)	(1,247)	(562)
Balance at end of period	4,220	3,701	4,220	3,701
Installment [Member] | Impact of Adoption [Member] | ASU 2016-13 [Member]
Analysis of allowance for loan losses by portfolio segment [Roll Forward]
Balance at beginning of period				3,052
Subjective Allocation [Member]
Analysis of allowance for loan losses by portfolio segment [Roll Forward]
Balance at beginning of period	12,071	14,798	12,763	19,918
Additions (deductions) [Abstract]
Provision for credit losses	220	(600)	(472)	309
Initial allowance on loans purchased with credit deterioration				0
Recoveries credited to the allowance	0	0	0	0
Loans charged against the allowance	0	0	0	0
Balance at end of period	$ 12,291	$ 14,198	$ 12,291	14,198
Subjective Allocation [Member] | Impact of Adoption [Member] | ASU 2016-13 [Member]
Analysis of allowance for loan losses by portfolio segment [Roll Forward]
Balance at beginning of period				$ (6,029)

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Loans, Receivables Past Due (Details) - USD ($) $ in Thousands		Jun. 30, 2022	Dec. 31, 2021
Non performing loans [Abstract]
Non-Accrual with no Allowance for Credit Loss		$ 894	$ 1,319
Non-Accrual with an Allowance for Credit Loss		3,605	3,791
Total Non-Accrual		4,499	5,110
90+ and Still Accruing		0	0
Accrued interest excluded from total		7,695	6,836
Loans Past Due, 90+ days [Member]
Non performing loans [Abstract]
Accrued interest excluded from total		0	0
Commercial and Industrial [Member]
Non performing loans [Abstract]
Government guaranteed loans excluded from non-performing loans		42	47
1-4 Family Owner Occupied - Non-jumbo [Member]
Non performing loans [Abstract]
Government guaranteed loans excluded from non-performing loans		1,318	388
Commercial [Member]
Non performing loans [Abstract]
Accrued interest excluded from total		2,968	2,538
Commercial [Member] | Commercial and Industrial [Member]
Non performing loans [Abstract]
Non-Accrual with no Allowance for Credit Loss	[1]	0	0
Non-Accrual with an Allowance for Credit Loss	[1]	14	15
Total Non-Accrual	[1]	14	15
90+ and Still Accruing	[1]	0	0
Accrued interest excluded from total		1,497	1,373
Commercial [Member] | Commercial Real Estate [Member]
Non performing loans [Abstract]
Non-Accrual with no Allowance for Credit Loss		0	0
Non-Accrual with an Allowance for Credit Loss		0	0
Total Non-Accrual		0	0
90+ and Still Accruing		0	0
Accrued interest excluded from total		1,471	1,165
Mortgage [Member]
Non performing loans [Abstract]
Accrued interest excluded from total	[2]	3,295	2,998
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member]
Non performing loans [Abstract]
Non-Accrual with no Allowance for Credit Loss		0	607
Non-Accrual with an Allowance for Credit Loss		695	0
Total Non-Accrual		695	607
90+ and Still Accruing		0	0
Accrued interest excluded from total	[2]	1,547	1,290
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member]
Non performing loans [Abstract]
Non-Accrual with no Allowance for Credit Loss	[3]	617	137
Non-Accrual with an Allowance for Credit Loss	[3]	1,086	1,815
Total Non-Accrual	[3]	1,703	1,952
90+ and Still Accruing	[3]	0	0
Accrued interest excluded from total	[2]	819	798
Mortgage [Member] | 1-4 Family Non-owner Occupied [Member]
Non performing loans [Abstract]
Non-Accrual with no Allowance for Credit Loss		159	275
Non-Accrual with an Allowance for Credit Loss		449	592
Total Non-Accrual		608	867
90+ and Still Accruing		0	0
Accrued interest excluded from total	[2]	493	513
Mortgage [Member] | 1-4 Family - 2nd Lien [Member]
Non performing loans [Abstract]
Non-Accrual with no Allowance for Credit Loss		0	182
Non-Accrual with an Allowance for Credit Loss		573	681
Total Non-Accrual		573	863
90+ and Still Accruing		0	0
Accrued interest excluded from total	[2]	326	283
Mortgage [Member] | Resort Lending [Member]
Non performing loans [Abstract]
Non-Accrual with no Allowance for Credit Loss		118	118
Non-Accrual with an Allowance for Credit Loss		59	119
Total Non-Accrual		177	237
90+ and Still Accruing		0	0
Accrued interest excluded from total	[2]	110	114
Installment [Member]
Non performing loans [Abstract]
Accrued interest excluded from total	[2]	1,432	1,300
Installment [Member] | Boat Lending [Member]
Non performing loans [Abstract]
Non-Accrual with no Allowance for Credit Loss		0	0
Non-Accrual with an Allowance for Credit Loss		235	210
Total Non-Accrual		235	210
90+ and Still Accruing		0	0
Accrued interest excluded from total	[2]	588	537
Installment [Member] | Recreational Vehicle Lending [Member]
Non performing loans [Abstract]
Non-Accrual with no Allowance for Credit Loss		0	0
Non-Accrual with an Allowance for Credit Loss		187	177
Total Non-Accrual		187	177
90+ and Still Accruing		0	0
Accrued interest excluded from total	[2]	632	546
Installment [Member] | Other [Member]
Non performing loans [Abstract]
Non-Accrual with no Allowance for Credit Loss		0	0
Non-Accrual with an Allowance for Credit Loss		307	182
Total Non-Accrual		307	182
90+ and Still Accruing		0	0
Accrued interest excluded from total	[2]	212	217
Non-Performing Loans [Member]
Non performing loans [Abstract]
Total Non-performing Loans		4,499	5,110
Accrued interest excluded from total		0	0
Non-Performing Loans [Member] | Commercial [Member] | Commercial and Industrial [Member]
Non performing loans [Abstract]
Total Non-performing Loans	[1]	14	15
Non-Performing Loans [Member] | Commercial [Member] | Commercial Real Estate [Member]
Non performing loans [Abstract]
Total Non-performing Loans		0	0
Non-Performing Loans [Member] | Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member]
Non performing loans [Abstract]
Total Non-performing Loans		695	607
Non-Performing Loans [Member] | Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member]
Non performing loans [Abstract]
Total Non-performing Loans	[3]	1,703	1,952
Non-Performing Loans [Member] | Mortgage [Member] | 1-4 Family Non-owner Occupied [Member]
Non performing loans [Abstract]
Total Non-performing Loans		608	867
Non-Performing Loans [Member] | Mortgage [Member] | 1-4 Family - 2nd Lien [Member]
Non performing loans [Abstract]
Total Non-performing Loans		573	863
Non-Performing Loans [Member] | Mortgage [Member] | Resort Lending [Member]
Non performing loans [Abstract]
Total Non-performing Loans		177	237
Non-Performing Loans [Member] | Installment [Member] | Boat Lending [Member]
Non performing loans [Abstract]
Total Non-performing Loans		235	210
Non-Performing Loans [Member] | Installment [Member] | Recreational Vehicle Lending [Member]
Non performing loans [Abstract]
Total Non-performing Loans		187	177
Non-Performing Loans [Member] | Installment [Member] | Other [Member]
Non performing loans [Abstract]
Total Non-performing Loans		$ 307	$ 182

[1] Non-performing commercial and industrial loans exclude $0.042 million and $0.047 million of government guaranteed loans at June 30, 2022 and December 31, 2021, respectively.

[2] Credit scores have been updated within the last twelve months.

[3] Non-performing 1-4 family owner occupied – non jumbo loans exclude $1.318 million and $0.388 million of government guaranteed loans at June 30, 2022 and December 31, 2021, respectively.

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Loans, Amortized Cost of Collateral-dependent Loans by Class (Details) - USD ($) $ in Thousands		Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020
Collateral-dependent Loans by Class [Abstract]
Total loans		$ 3,258,850		$ 2,905,045
Allowance for credit losses		47,883	$ 45,627	47,252	$ 45,926	$ 46,755	$ 35,429
Accrued interest excluded from total		7,695		6,836
Collateral Dependent Loans [Member]
Collateral-dependent Loans by Class [Abstract]
Allowance for credit losses		430		635
Real Estate [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		1,803		2,795
Accrued interest excluded from total		0		0
Other Loan [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		478		516
Accrued interest excluded from total		0		1
Commercial [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		1,329,198		1,203,581
Allowance for credit losses		11,059	10,744	11,519	9,094	9,530	7,401
Accrued interest excluded from total		2,968		2,538
Commercial [Member] | Commercial and Industrial [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		688,022		593,112
Accrued interest excluded from total		1,497		1,373
Commercial [Member] | Commercial and Industrial [Member] | Collateral Dependent Loans [Member]
Collateral-dependent Loans by Class [Abstract]
Allowance for credit losses		43		51
Commercial [Member] | Commercial and Industrial [Member] | Real Estate [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		67		80
Commercial [Member] | Commercial and Industrial [Member] | Other Loan [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		207		245
Commercial [Member] | Commercial Real Estate [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		641,176		610,469
Accrued interest excluded from total		1,471		1,165
Commercial [Member] | Commercial Real Estate [Member] | Collateral Dependent Loans [Member]
Collateral-dependent Loans by Class [Abstract]
Allowance for credit losses		16		19
Commercial [Member] | Commercial Real Estate [Member] | Real Estate [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		72		84
Commercial [Member] | Commercial Real Estate [Member] | Other Loan [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		0		0
Mortgage [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans	[1]	1,284,169		1,139,659
Allowance for credit losses		20,313	19,208	19,221	18,933	18,448	6,998
Accrued interest excluded from total	[1]	3,295		2,998
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans	[1]	657,698		541,023
Accrued interest excluded from total	[1]	1,547		1,290
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member] | Collateral Dependent Loans [Member]
Collateral-dependent Loans by Class [Abstract]
Allowance for credit losses		0		0
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member] | Real Estate [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		0		607
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member] | Other Loan [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		0		0
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans	[1]	306,109		266,410
Accrued interest excluded from total	[1]	819		798
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member] | Collateral Dependent Loans [Member]
Collateral-dependent Loans by Class [Abstract]
Allowance for credit losses		209		286
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member] | Real Estate [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		1,203		940
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member] | Other Loan [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		0		0
Mortgage [Member] | 1-4 Family Non-owner Occupied [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans	[1]	181,263		194,852
Accrued interest excluded from total	[1]	493		513
Mortgage [Member] | 1-4 Family Non-owner Occupied [Member] | Collateral Dependent Loans [Member]
Collateral-dependent Loans by Class [Abstract]
Allowance for credit losses		4		72
Mortgage [Member] | 1-4 Family Non-owner Occupied [Member] | Real Estate [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		170		477
Mortgage [Member] | 1-4 Family Non-owner Occupied [Member] | Other Loan [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		0		0
Mortgage [Member] | 1-4 Family - 2nd Lien [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans	[1]	95,251		88,729
Accrued interest excluded from total	[1]	326		283
Mortgage [Member] | 1-4 Family - 2nd Lien [Member] | Collateral Dependent Loans [Member]
Collateral-dependent Loans by Class [Abstract]
Allowance for credit losses		35		67
Mortgage [Member] | 1-4 Family - 2nd Lien [Member] | Real Estate [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		97		370
Mortgage [Member] | 1-4 Family - 2nd Lien [Member] | Other Loan [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		0		0
Mortgage [Member] | Resort Lending [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans	[1]	43,848		48,645
Accrued interest excluded from total	[1]	110		114
Mortgage [Member] | Resort Lending [Member] | Collateral Dependent Loans [Member]
Collateral-dependent Loans by Class [Abstract]
Allowance for credit losses		14		42
Mortgage [Member] | Resort Lending [Member] | Real Estate [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		156		237
Mortgage [Member] | Resort Lending [Member] | Other Loan [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		0		0
Installment [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans	[1]	645,483		561,805
Allowance for credit losses		4,220	$ 3,604	3,749	$ 3,701	$ 3,979	$ 1,112
Accrued interest excluded from total	[1]	1,432		1,300
Installment [Member] | Boat Lending [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans	[1]	258,385		228,140
Accrued interest excluded from total	[1]	588		537
Installment [Member] | Boat Lending [Member] | Collateral Dependent Loans [Member]
Collateral-dependent Loans by Class [Abstract]
Allowance for credit losses		36		29
Installment [Member] | Boat Lending [Member] | Real Estate [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		0		0
Installment [Member] | Boat Lending [Member] | Other Loan [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		102		80
Installment [Member] | Recreational Vehicle Lending [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans	[1]	280,074		234,745
Accrued interest excluded from total	[1]	632		546
Installment [Member] | Recreational Vehicle Lending [Member] | Collateral Dependent Loans [Member]
Collateral-dependent Loans by Class [Abstract]
Allowance for credit losses		18		44
Installment [Member] | Recreational Vehicle Lending [Member] | Real Estate [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		0		0
Installment [Member] | Recreational Vehicle Lending [Member] | Other Loan [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		51		121
Installment [Member] | Other [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans	[1]	107,024		98,920
Accrued interest excluded from total	[1]	212		217
Installment [Member] | Other [Member] | Collateral Dependent Loans [Member]
Collateral-dependent Loans by Class [Abstract]
Allowance for credit losses		55		25
Installment [Member] | Other [Member] | Real Estate [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		38		0
Installment [Member] | Other [Member] | Other Loan [Member]
Collateral-dependent Loans by Class [Abstract]
Total loans		$ 118		$ 70

[1] Credit scores have been updated within the last twelve months.

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Loans, Aging Analysis of Loans by Class (Details) - USD ($) $ in Thousands		Jun. 30, 2022	Dec. 31, 2021
Aging analysis of loans by class [Abstract]
Total loans		$ 3,258,850	$ 2,905,045
Total recorded investment			2,905,045
Accrued interest excluded from total		7,695	6,836
Loans Past Due Total [Member]
Aging analysis of loans by class [Abstract]
Total loans		5,856	5,531
Accrued interest excluded from total		42	34
Loans Past Due, 30-59 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		3,348	2,350
Accrued interest excluded from total		29	25
Loans Past Due, 60-89 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		1,220	646
Accrued interest excluded from total		13	9
Loans Past Due, 90+ days [Member]
Aging analysis of loans by class [Abstract]
Total loans		1,288	2,535
Accrued interest excluded from total		0	0
Loans Not Past Due [Member]
Aging analysis of loans by class [Abstract]
Total loans		3,252,994	2,899,514
Accrued interest excluded from total		7,653	6,802
Commercial [Member]
Aging analysis of loans by class [Abstract]
Total loans		1,329,198	1,203,581
Accrued interest excluded from total		2,968	2,538
Commercial [Member] | Commercial and Industrial [Member]
Aging analysis of loans by class [Abstract]
Total loans		688,022	593,112
Total recorded investment			593,112
Accrued interest excluded from total		1,497	1,373
Commercial [Member] | Commercial and Industrial [Member] | Loans Past Due Total [Member]
Aging analysis of loans by class [Abstract]
Total loans		99	64
Commercial [Member] | Commercial and Industrial [Member] | Loans Past Due, 30-59 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		43	0
Commercial [Member] | Commercial and Industrial [Member] | Loans Past Due, 60-89 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		0	2
Commercial [Member] | Commercial and Industrial [Member] | Loans Past Due, 90+ days [Member]
Aging analysis of loans by class [Abstract]
Total loans		56	62
Commercial [Member] | Commercial and Industrial [Member] | Loans Not Past Due [Member]
Aging analysis of loans by class [Abstract]
Total loans		687,923	593,048
Commercial [Member] | Commercial Real Estate [Member]
Aging analysis of loans by class [Abstract]
Total loans		641,176	610,469
Total recorded investment			610,469
Accrued interest excluded from total		1,471	1,165
Commercial [Member] | Commercial Real Estate [Member] | Loans Past Due Total [Member]
Aging analysis of loans by class [Abstract]
Total loans		0	0
Commercial [Member] | Commercial Real Estate [Member] | Loans Past Due, 30-59 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		0	0
Commercial [Member] | Commercial Real Estate [Member] | Loans Past Due, 60-89 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		0	0
Commercial [Member] | Commercial Real Estate [Member] | Loans Past Due, 90+ days [Member]
Aging analysis of loans by class [Abstract]
Total loans		0	0
Commercial [Member] | Commercial Real Estate [Member] | Loans Not Past Due [Member]
Aging analysis of loans by class [Abstract]
Total loans		641,176	610,469
Mortgage [Member]
Aging analysis of loans by class [Abstract]
Total loans	[1]	1,284,169	1,139,659
Accrued interest excluded from total	[1]	3,295	2,998
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member]
Aging analysis of loans by class [Abstract]
Total loans	[1]	657,698	541,023
Total recorded investment			541,023
Accrued interest excluded from total	[1]	1,547	1,290
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member] | Loans Past Due Total [Member]
Aging analysis of loans by class [Abstract]
Total loans		556	607
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member] | Loans Past Due, 30-59 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		556	0
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member] | Loans Past Due, 60-89 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		0	0
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member] | Loans Past Due, 90+ days [Member]
Aging analysis of loans by class [Abstract]
Total loans		0	607
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member] | Loans Not Past Due [Member]
Aging analysis of loans by class [Abstract]
Total loans		657,142	540,416
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member]
Aging analysis of loans by class [Abstract]
Total loans	[1]	306,109	266,410
Total recorded investment			266,410
Accrued interest excluded from total	[1]	819	798
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member] | Loans Past Due Total [Member]
Aging analysis of loans by class [Abstract]
Total loans		3,066	1,839
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member] | Loans Past Due, 30-59 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		1,432	774
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member] | Loans Past Due, 60-89 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		1,039	408
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member] | Loans Past Due, 90+ days [Member]
Aging analysis of loans by class [Abstract]
Total loans		595	657
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member] | Loans Not Past Due [Member]
Aging analysis of loans by class [Abstract]
Total loans		303,043	264,571
Mortgage [Member] | 1-4 Family Non-owner Occupied [Member]
Aging analysis of loans by class [Abstract]
Total loans	[1]	181,263	194,852
Total recorded investment			194,852
Accrued interest excluded from total	[1]	493	513
Mortgage [Member] | 1-4 Family Non-owner Occupied [Member] | Loans Past Due Total [Member]
Aging analysis of loans by class [Abstract]
Total loans		476	575
Mortgage [Member] | 1-4 Family Non-owner Occupied [Member] | Loans Past Due, 30-59 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		317	87
Mortgage [Member] | 1-4 Family Non-owner Occupied [Member] | Loans Past Due, 60-89 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		0	26
Mortgage [Member] | 1-4 Family Non-owner Occupied [Member] | Loans Past Due, 90+ days [Member]
Aging analysis of loans by class [Abstract]
Total loans		159	462
Mortgage [Member] | 1-4 Family Non-owner Occupied [Member] | Loans Not Past Due [Member]
Aging analysis of loans by class [Abstract]
Total loans		180,787	194,277
Mortgage [Member] | 1-4 Family - 2nd Lien [Member]
Aging analysis of loans by class [Abstract]
Total loans	[1]	95,251	88,729
Total recorded investment			88,729
Accrued interest excluded from total	[1]	326	283
Mortgage [Member] | 1-4 Family - 2nd Lien [Member] | Loans Past Due Total [Member]
Aging analysis of loans by class [Abstract]
Total loans		266	771
Mortgage [Member] | 1-4 Family - 2nd Lien [Member] | Loans Past Due, 30-59 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		141	422
Mortgage [Member] | 1-4 Family - 2nd Lien [Member] | Loans Past Due, 60-89 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		28	60
Mortgage [Member] | 1-4 Family - 2nd Lien [Member] | Loans Past Due, 90+ days [Member]
Aging analysis of loans by class [Abstract]
Total loans		97	289
Mortgage [Member] | 1-4 Family - 2nd Lien [Member] | Loans Not Past Due [Member]
Aging analysis of loans by class [Abstract]
Total loans		94,985	87,958
Mortgage [Member] | Resort Lending [Member]
Aging analysis of loans by class [Abstract]
Total loans	[1]	43,848	48,645
Total recorded investment			48,645
Accrued interest excluded from total	[1]	110	114
Mortgage [Member] | Resort Lending [Member] | Loans Past Due Total [Member]
Aging analysis of loans by class [Abstract]
Total loans		156	237
Mortgage [Member] | Resort Lending [Member] | Loans Past Due, 30-59 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		0	0
Mortgage [Member] | Resort Lending [Member] | Loans Past Due, 60-89 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		0	0
Mortgage [Member] | Resort Lending [Member] | Loans Past Due, 90+ days [Member]
Aging analysis of loans by class [Abstract]
Total loans		156	237
Mortgage [Member] | Resort Lending [Member] | Loans Not Past Due [Member]
Aging analysis of loans by class [Abstract]
Total loans		43,692	48,408
Installment [Member]
Aging analysis of loans by class [Abstract]
Total loans	[1]	645,483	561,805
Accrued interest excluded from total	[1]	1,432	1,300
Installment [Member] | Boat Lending [Member]
Aging analysis of loans by class [Abstract]
Total loans	[1]	258,385	228,140
Total recorded investment			228,140
Accrued interest excluded from total	[1]	588	537
Installment [Member] | Boat Lending [Member] | Loans Past Due Total [Member]
Aging analysis of loans by class [Abstract]
Total loans		308	518
Installment [Member] | Boat Lending [Member] | Loans Past Due, 30-59 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		233	438
Installment [Member] | Boat Lending [Member] | Loans Past Due, 60-89 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		20	28
Installment [Member] | Boat Lending [Member] | Loans Past Due, 90+ days [Member]
Aging analysis of loans by class [Abstract]
Total loans		55	52
Installment [Member] | Boat Lending [Member] | Loans Not Past Due [Member]
Aging analysis of loans by class [Abstract]
Total loans		258,077	227,622
Installment [Member] | Recreational Vehicle Lending [Member]
Aging analysis of loans by class [Abstract]
Total loans	[1]	280,074	234,745
Total recorded investment			234,745
Accrued interest excluded from total	[1]	632	546
Installment [Member] | Recreational Vehicle Lending [Member] | Loans Past Due Total [Member]
Aging analysis of loans by class [Abstract]
Total loans		396	562
Installment [Member] | Recreational Vehicle Lending [Member] | Loans Past Due, 30-59 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		328	377
Installment [Member] | Recreational Vehicle Lending [Member] | Loans Past Due, 60-89 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		18	65
Installment [Member] | Recreational Vehicle Lending [Member] | Loans Past Due, 90+ days [Member]
Aging analysis of loans by class [Abstract]
Total loans		50	120
Installment [Member] | Recreational Vehicle Lending [Member] | Loans Not Past Due [Member]
Aging analysis of loans by class [Abstract]
Total loans		279,678	234,183
Installment [Member] | Other [Member]
Aging analysis of loans by class [Abstract]
Total loans	[1]	107,024	98,920
Total recorded investment			98,920
Accrued interest excluded from total	[1]	212	217
Installment [Member] | Other [Member] | Loans Past Due Total [Member]
Aging analysis of loans by class [Abstract]
Total loans		533	358
Installment [Member] | Other [Member] | Loans Past Due, 30-59 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		298	252
Installment [Member] | Other [Member] | Loans Past Due, 60-89 days [Member]
Aging analysis of loans by class [Abstract]
Total loans		115	57
Installment [Member] | Other [Member] | Loans Past Due, 90+ days [Member]
Aging analysis of loans by class [Abstract]
Total loans		120	49
Installment [Member] | Other [Member] | Loans Not Past Due [Member]
Aging analysis of loans by class [Abstract]
Total loans		$ 106,491	$ 98,562

[1] Credit scores have been updated within the last twelve months.

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Loans, Troubled Debt Restructurings (Details) $ in Thousands		3 Months Ended	6 Months Ended	12 Months Ended
		Jun. 30, 2022 USD ($)	Jun. 30, 2022 USD ($) Contract Payment	Dec. 31, 2021 USD ($) Contract
Troubled Debt Restructuring [Abstract]
Troubled debt restructuring		$ 33,010	$ 33,010	$ 37,086
Troubled debt restructuring, reserve		2,700	$ 2,700	$ 3,600
Number of consecutive timely payments required | Payment			6
Modifications involving extension of maturity date, period range			34 months
Loans classified as troubled debt restructurings [Abstract]
Number of contracts | Contract			1	0
Pre-modification recorded balance			$ 300
Post-modification recorded balance			300
Charge offs due to troubled debt restructurings			0
Increase in allowance for credit losses			$ 30
Charge-offs on TDRs that subsequently defaulted		0		$ 0
Past due period for modified loans			90 days
Performing TDRs [Member]
Troubled Debt Restructuring [Abstract]
Troubled debt restructuring		31,846	$ 31,846	36,070
Non-performing TDRs [Member]
Troubled Debt Restructuring [Abstract]
Troubled debt restructuring	[1]	1,164	1,164	1,016
Commercial [Member]
Troubled Debt Restructuring [Abstract]
Troubled debt restructuring		3,266	3,266	4,481
Commercial [Member] | Performing TDRs [Member]
Troubled Debt Restructuring [Abstract]
Troubled debt restructuring		3,266	3,266	4,481
Commercial [Member] | Non-performing TDRs [Member]
Troubled Debt Restructuring [Abstract]
Troubled debt restructuring	[1]	0	0	0
Retail [Member]
Troubled Debt Restructuring [Abstract]
Troubled debt restructuring	[2]	29,744	29,744	32,605
Retail [Member] | Performing TDRs [Member]
Troubled Debt Restructuring [Abstract]
Troubled debt restructuring	[2]	28,580	28,580	31,589
Retail [Member] | Non-performing TDRs [Member]
Troubled Debt Restructuring [Abstract]
Troubled debt restructuring	[1],[2],[3]	$ 1,164	$ 1,164	$ 1,016

[1] Included in non-performing loans table above.

[2] Retail loans include mortgage and installment loan portfolio segments.

[3] Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis.

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Loans, Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") Due to COVID-19 (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022 USD ($) Loan	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($) Loan	Jun. 30, 2021 USD ($)	Dec. 31, 2021 USD ($) Loan
Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") due to COVID-19 [Abstract]
Accommodation loans moved to non-accrual	$ 4,499		$ 4,499		$ 5,110
COVID-19 Accommodations and Outstanding Loans [Abstract]
Total loans	3,258,850		3,258,850		2,905,045
Interest and fees on loans	31,454	$ 28,091	59,872	$ 56,196
Paycheck Protection Program [Member]
COVID-19 Accommodations and Outstanding Loans [Abstract]
Total loans	$ 258		$ 258
Total loans					$ 26,364
Number of outstanding loans | Loan	2		2		186
Unaccreted net fees remaining at period end	$ 0		$ 0		$ 806
Loans funded		6,900	0	135,500
Interest and fees on loans	200	$ 1,800	800	$ 3,900
COVID-19 Accommodations [Member] | Paycheck Protection Program [Member]
Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") due to COVID-19 [Abstract]
Accommodation loans moved to non-accrual	400		400
COVID-19 Accommodations and Outstanding Loans [Abstract]
Non-TDR loan modifications, portfolio loans outstanding	1,200		1,200		2,300
Closed and Outstanding - Round 1 Loans [Member] | Paycheck Protection Program [Member]
COVID-19 Accommodations and Outstanding Loans [Abstract]
Total loans	$ 0		$ 0
Total loans					$ 197
Number of outstanding loans | Loan	0		0		6
Closed and Outstanding - Round 2 Loans [Member] | Paycheck Protection Program [Member]
COVID-19 Accommodations and Outstanding Loans [Abstract]
Total loans	$ 258		$ 258
Total loans					$ 26,167
Number of outstanding loans | Loan	2		2		180

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Loans, Loan Ratings by Loan Class, Commercial (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Summary of Loan Ratings by Loan Class [Abstract]
Total loans	$ 3,258,850	$ 2,905,045
Accrued interest excluded from total	7,695	6,836
Commercial [Member]
Summary of Loan Ratings by Loan Class [Abstract]
2021	162,588	247,338
2020	238,679	125,661
2019	107,174	169,759
2018	156,826	131,067
2017	118,123	80,608
Prior	313,734	265,749
Revolving loans amortized, Cost basis	232,074	183,399
Total loans	1,329,198	1,203,581
Accrued interest, 2021	320	496
Accrued interest, 2020	423	234
Accrued interest, 2019	205	338
Accrued interest, 2018	330	432
Accrued interest, 2017	420	184
Accrued interest, Prior	768	565
Accrued interest, Revolving	502	289
Accrued interest excluded from total	2,968	2,538
Commercial [Member] | Non-Watch 1-6 [Member]
Summary of Loan Ratings by Loan Class [Abstract]
2021	162,550	245,247
2020	233,146	125,335
2019	106,559	165,040
2018	152,265	120,655
2017	106,414	77,430
Prior	307,153	256,460
Revolving loans amortized, Cost basis	231,771	176,130
Total loans	1,299,858	1,166,297
Commercial [Member] | Watch 7-8 [Member]
Summary of Loan Ratings by Loan Class [Abstract]
2021	38	81
2020	3,864	324
2019	615	3,560
2018	2,568	8,972
2017	10,687	2,070
Prior	5,372	7,697
Revolving loans amortized, Cost basis	303	476
Total loans	23,447	23,180
Commercial [Member] | Substandard Accrual 9 [Member]
Summary of Loan Ratings by Loan Class [Abstract]
2021	0	2,010
2020	1,669	2
2019	0	1,159
2018	1,993	1,440
2017	1,022	1,108
Prior	1,153	1,530
Revolving loans amortized, Cost basis	0	6,793
Total loans	5,837	14,042
Commercial [Member] | Non-Accrual 10-11 [Member]
Summary of Loan Ratings by Loan Class [Abstract]
2021	0	0
2020	0	0
2019	0	0
2018	0	0
2017	0	0
Prior	56	62
Revolving loans amortized, Cost basis	0	0
Total loans	56	62
Commercial [Member] | Commercial and Industrial [Member]
Summary of Loan Ratings by Loan Class [Abstract]
2021	95,388	123,567
2020	109,045	69,858
2019	67,853	58,675
2018	54,386	46,368
2017	37,586	38,669
Prior	126,918	104,127
Revolving loans amortized, Cost basis	196,846	151,848
Total loans	688,022	593,112
Accrued interest, 2021	130	314
Accrued interest, 2020	187	153
Accrued interest, 2019	143	105
Accrued interest, 2018	97	229
Accrued interest, 2017	191	90
Accrued interest, Prior	310	240
Accrued interest, Revolving	439	242
Accrued interest excluded from total	1,497	1,373
Commercial [Member] | Commercial and Industrial [Member] | Non-Watch 1-6 [Member]
Summary of Loan Ratings by Loan Class [Abstract]
2021	95,350	121,917
2020	103,647	69,856
2019	67,402	56,984
2018	52,393	44,827
2017	36,427	38,307
Prior	121,179	96,261
Revolving loans amortized, Cost basis	196,543	144,579
Total loans	672,941	572,731
Commercial [Member] | Commercial and Industrial [Member] | Watch 7-8 [Member]
Summary of Loan Ratings by Loan Class [Abstract]
2021	38	81
2020	3,864	0
2019	451	532
2018	0	1,294
2017	137	362
Prior	4,530	6,274
Revolving loans amortized, Cost basis	303	476
Total loans	9,323	9,019
Commercial [Member] | Commercial and Industrial [Member] | Substandard Accrual 9 [Member]
Summary of Loan Ratings by Loan Class [Abstract]
2021	0	1,569
2020	1,534	2
2019	0	1,159
2018	1,993	247
2017	1,022	0
Prior	1,153	1,530
Revolving loans amortized, Cost basis	0	6,793
Total loans	5,702	11,300
Commercial [Member] | Commercial and Industrial [Member] | Non-Accrual 10-11 [Member]
Summary of Loan Ratings by Loan Class [Abstract]
2021	0	0
2020	0	0
2019	0	0
2018	0	0
2017	0	0
Prior	56	62
Revolving loans amortized, Cost basis	0	0
Total loans	56	62
Commercial [Member] | Commercial Real Estate [Member]
Summary of Loan Ratings by Loan Class [Abstract]
2021	67,200	123,771
2020	129,634	55,803
2019	39,321	111,084
2018	102,440	84,699
2017	80,537	41,939
Prior	186,816	161,622
Revolving loans amortized, Cost basis	35,228	31,551
Total loans	641,176	610,469
Accrued interest, 2021	190	182
Accrued interest, 2020	236	81
Accrued interest, 2019	62	233
Accrued interest, 2018	233	203
Accrued interest, 2017	229	94
Accrued interest, Prior	458	325
Accrued interest, Revolving	63	47
Accrued interest excluded from total	1,471	1,165
Commercial [Member] | Commercial Real Estate [Member] | Non-Watch 1-6 [Member]
Summary of Loan Ratings by Loan Class [Abstract]
2021	67,200	123,330
2020	129,499	55,479
2019	39,157	108,056
2018	99,872	75,828
2017	69,987	39,123
Prior	185,974	160,199
Revolving loans amortized, Cost basis	35,228	31,551
Total loans	626,917	593,566
Commercial [Member] | Commercial Real Estate [Member] | Watch 7-8 [Member]
Summary of Loan Ratings by Loan Class [Abstract]
2021	0	0
2020	0	324
2019	164	3,028
2018	2,568	7,678
2017	10,550	1,708
Prior	842	1,423
Revolving loans amortized, Cost basis	0	0
Total loans	14,124	14,161
Commercial [Member] | Commercial Real Estate [Member] | Substandard Accrual 9 [Member]
Summary of Loan Ratings by Loan Class [Abstract]
2021	0	441
2020	135	0
2019	0	0
2018	0	1,193
2017	0	1,108
Prior	0	0
Revolving loans amortized, Cost basis	0	0
Total loans	135	2,742
Commercial [Member] | Commercial Real Estate [Member] | Non-Accrual 10-11 [Member]
Summary of Loan Ratings by Loan Class [Abstract]
2021	0	0
2020	0	0
2019	0	0
2018	0	0
2017	0	0
Prior	0	0
Revolving loans amortized, Cost basis	0	0
Total loans	$ 0	$ 0

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Loans, Credit Scores by Loan Class, Mortgage and Installment Segments (Details) - USD ($) $ in Thousands		Jun. 30, 2022	Dec. 31, 2021
Summary of Credit Scores by Loan Class [Abstract]
Total loans		$ 3,258,850	$ 2,905,045
Accrued interest excluded from total		7,695	6,836
Mortgage [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	173,870	410,933
2020	[1]	480,197	243,414
2019	[1]	203,979	101,997
2018	[1]	80,308	49,073
2017	[1]	36,885	72,058
Prior	[1]	209,154	165,669
Revolving loans amortized, Cost basis	[1]	99,776	96,515
Total loans	[1]	1,284,169	1,139,659
Accrued interest, 2021	[1]	425	945
Accrued interest, 2020	[1]	1,038	574
Accrued interest, 2019	[1]	503	302
Accrued interest, 2018	[1]	233	166
Accrued interest, 2017	[1]	129	196
Accrued interest, Prior	[1]	591	506
Accrued interest, Revolving	[1]	376	309
Accrued interest excluded from total	[1]	3,295	2,998
Mortgage [Member] | 800 and Above [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	14,792	53,143
2020	[1]	50,146	25,936
2019	[1]	26,468	15,530
2018	[1]	11,129	6,907
2017	[1]	4,049	13,975
Prior	[1]	27,115	17,854
Revolving loans amortized, Cost basis	[1]	14,637	14,130
Total loans	[1]	148,336	147,475
Mortgage [Member] | 750 to 799 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	99,890	215,481
2020	[1]	287,324	138,434
2019	[1]	113,966	51,241
2018	[1]	41,354	18,292
2017	[1]	14,668	27,234
Prior	[1]	72,654	49,590
Revolving loans amortized, Cost basis	[1]	47,475	45,935
Total loans	[1]	677,331	546,207
Mortgage [Member] | 700 to 749 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	47,605	104,365
2020	[1]	104,251	54,267
2019	[1]	37,518	22,113
2018	[1]	12,780	11,196
2017	[1]	6,783	15,163
Prior	[1]	46,944	44,174
Revolving loans amortized, Cost basis	[1]	25,625	24,709
Total loans	[1]	281,506	275,987
Mortgage [Member] | 650 to 699 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	8,753	33,650
2020	[1]	34,598	17,950
2019	[1]	19,517	9,381
2018	[1]	10,705	7,999
2017	[1]	7,309	9,603
Prior	[1]	33,093	26,828
Revolving loans amortized, Cost basis	[1]	9,450	9,053
Total loans	[1]	123,425	114,464
Mortgage [Member] | 600 to 649 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	2,274	4,294
2020	[1]	3,259	3,954
2019	[1]	3,083	1,737
2018	[1]	2,870	2,950
2017	[1]	2,534	2,763
Prior	[1]	16,358	14,674
Revolving loans amortized, Cost basis	[1]	1,650	1,840
Total loans	[1]	32,028	32,212
Mortgage [Member] | 550 to 599 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	410	789
2019	[1]	2,378	1,137
2018	[1]	463	950
2017	[1]	978	1,804
Prior	[1]	6,853	7,479
Revolving loans amortized, Cost basis	[1]	495	375
Total loans	[1]	11,577	12,534
Mortgage [Member] | 500 to 549 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	556	0
2020	[1]	209	1,468
2019	[1]	279	520
2018	[1]	432	382
2017	[1]	432	599
Prior	[1]	4,670	4,198
Revolving loans amortized, Cost basis	[1]	376	223
Total loans	[1]	6,954	7,390
Mortgage [Member] | Under 500 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	616
2019	[1]	770	338
2018	[1]	575	397
2017	[1]	132	917
Prior	[1]	1,467	872
Revolving loans amortized, Cost basis	[1]	68	250
Total loans	[1]	3,012	3,390
Mortgage [Member] | Unknown [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	0
2017	[1]	0	0
Prior	[1]	0	0
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	0	0
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	92,943	255,101
2020	[1]	329,544	159,738
2019	[1]	135,956	58,281
2018	[1]	42,638	20,402
2017	[1]	12,906	33,038
Prior	[1]	41,640	12,092
Revolving loans amortized, Cost basis	[1]	2,071	2,371
Total loans	[1]	657,698	541,023
Accrued interest, 2021	[1]	221	557
Accrued interest, 2020	[1]	707	370
Accrued interest, 2019	[1]	330	163
Accrued interest, 2018	[1]	111	77
Accrued interest, 2017	[1]	46	87
Accrued interest, Prior	[1]	126	33
Accrued interest, Revolving	[1]	6	3
Accrued interest excluded from total	[1]	1,547	1,290
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member] | 800 and Above [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	6,169	31,137
2020	[1]	31,107	17,652
2019	[1]	18,008	8,491
2018	[1]	3,943	2,565
2017	[1]	690	7,516
Prior	[1]	5,400	527
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	65,317	67,888
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member] | 750 to 799 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	56,497	135,292
2020	[1]	204,172	92,590
2019	[1]	75,666	30,072
2018	[1]	24,735	7,118
2017	[1]	5,479	9,469
Prior	[1]	19,208	5,043
Revolving loans amortized, Cost basis	[1]	2,071	2,371
Total loans	[1]	387,828	281,955
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member] | 700 to 749 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	22,889	67,255
2020	[1]	69,946	34,665
2019	[1]	23,815	13,765
2018	[1]	7,324	4,421
2017	[1]	2,152	7,748
Prior	[1]	7,475	4,856
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	133,601	132,710
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member] | 650 to 699 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	4,856	19,367
2020	[1]	22,462	10,313
2019	[1]	15,192	5,447
2018	[1]	6,135	5,285
2017	[1]	4,112	6,080
Prior	[1]	5,446	690
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	58,203	47,182
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member] | 600 to 649 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	1,976	2,050
2020	[1]	1,857	2,638
2019	[1]	1,411	506
2018	[1]	501	1,013
2017	[1]	473	837
Prior	[1]	3,416	976
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	9,634	8,020
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member] | 550 to 599 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	469
2019	[1]	1,864	0
2018	[1]	0	0
2017	[1]	0	781
Prior	[1]	0	0
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	1,864	1,250
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member] | 500 to 549 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	556	0
2020	[1]	0	1,411
2019	[1]	0	0
2018	[1]	0	0
2017	[1]	0	0
Prior	[1]	695	0
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	1,251	1,411
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member] | Under 500 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	0
2017	[1]	0	607
Prior	[1]	0	0
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	0	607
Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member] | Unknown [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	0
2017	[1]	0	0
Prior	[1]	0	0
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	0	0
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	52,676	67,441
2020	[1]	81,900	42,689
2019	[1]	34,409	24,306
2018	[1]	21,340	17,251
2017	[1]	15,330	24,039
Prior	[1]	81,574	69,614
Revolving loans amortized, Cost basis	[1]	18,880	21,070
Total loans	[1]	306,109	266,410
Accrued interest, 2021	[1]	143	208
Accrued interest, 2020	[1]	166	97
Accrued interest, 2019	[1]	89	84
Accrued interest, 2018	[1]	70	58
Accrued interest, 2017	[1]	53	68
Accrued interest, Prior	[1]	227	226
Accrued interest, Revolving	[1]	71	57
Accrued interest excluded from total	[1]	819	798
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member] | 800 and Above [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	4,128	6,185
2020	[1]	11,364	5,534
2019	[1]	4,556	3,756
2018	[1]	2,594	2,514
2017	[1]	1,923	3,566
Prior	[1]	7,397	4,569
Revolving loans amortized, Cost basis	[1]	3,472	4,026
Total loans	[1]	35,434	30,150
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member] | 750 to 799 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	28,528	33,227
2020	[1]	38,076	20,300
2019	[1]	16,879	9,688
2018	[1]	9,041	5,664
2017	[1]	5,262	8,887
Prior	[1]	19,462	12,498
Revolving loans amortized, Cost basis	[1]	9,072	8,341
Total loans	[1]	126,320	98,605
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member] | 700 to 749 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	18,439	19,317
2020	[1]	21,607	10,572
2019	[1]	6,901	4,813
2018	[1]	3,001	4,035
2017	[1]	3,193	5,008
Prior	[1]	22,438	21,806
Revolving loans amortized, Cost basis	[1]	4,832	5,637
Total loans	[1]	80,411	71,188
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member] | 650 to 699 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	1,283	6,593
2020	[1]	9,075	4,233
2019	[1]	3,013	3,217
2018	[1]	3,312	2,010
2017	[1]	2,134	3,135
Prior	[1]	13,849	12,423
Revolving loans amortized, Cost basis	[1]	1,347	2,812
Total loans	[1]	34,013	34,423
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member] | 600 to 649 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	298	2,119
2020	[1]	1,159	1,082
2019	[1]	1,497	1,051
2018	[1]	2,078	1,549
2017	[1]	1,804	1,660
Prior	[1]	8,663	8,663
Revolving loans amortized, Cost basis	[1]	91	89
Total loans	[1]	15,590	16,213
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member] | 550 to 599 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	410	295
2019	[1]	514	1,076
2018	[1]	438	758
2017	[1]	453	1,023
Prior	[1]	5,705	5,802
Revolving loans amortized, Cost basis	[1]	48	147
Total loans	[1]	7,568	9,101
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member] | 500 to 549 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	209	57
2019	[1]	279	421
2018	[1]	355	327
2017	[1]	432	510
Prior	[1]	3,037	3,169
Revolving loans amortized, Cost basis	[1]	18	18
Total loans	[1]	4,330	4,502
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member] | Under 500 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	616
2019	[1]	770	284
2018	[1]	521	394
2017	[1]	129	250
Prior	[1]	1,023	684
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	2,443	2,228
Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member] | Unknown [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	0
2017	[1]	0	0
Prior	[1]	0	0
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	0	0
Mortgage [Member] | 1-4 Non-owner Occupied [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	26,267	82,835
2020	[1]	62,486	34,655
2019	[1]	27,765	16,503
2018	[1]	13,512	7,832
2017	[1]	6,037	10,971
Prior	[1]	35,665	31,158
Revolving loans amortized, Cost basis	[1]	9,531	10,898
Total loans	[1]	181,263	194,852
Accrued interest, 2021	[1]	57	171
Accrued interest, 2020	[1]	154	95
Accrued interest, 2019	[1]	72	46
Accrued interest, 2018	[1]	44	23
Accrued interest, 2017	[1]	22	33
Accrued interest, Prior	[1]	108	107
Accrued interest, Revolving	[1]	36	38
Accrued interest excluded from total	[1]	493	513
Mortgage [Member] | 1-4 Non-owner Occupied [Member] | 800 and Above [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	4,398	15,406
2020	[1]	7,558	1,786
2019	[1]	2,862	2,857
2018	[1]	4,348	1,459
2017	[1]	994	2,627
Prior	[1]	6,508	5,058
Revolving loans amortized, Cost basis	[1]	2,090	1,639
Total loans	[1]	28,758	30,832
Mortgage [Member] | 1-4 Non-owner Occupied [Member] | 750 to 799 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	13,258	44,201
2020	[1]	41,754	21,885
2019	[1]	18,208	10,517
2018	[1]	6,510	3,667
2017	[1]	2,735	6,956
Prior	[1]	13,374	10,004
Revolving loans amortized, Cost basis	[1]	4,049	5,117
Total loans	[1]	99,888	102,347
Mortgage [Member] | 1-4 Non-owner Occupied [Member] | 700 to 749 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	5,997	16,486
2020	[1]	10,830	7,807
2019	[1]	5,758	2,764
2018	[1]	1,607	1,878
2017	[1]	973	966
Prior	[1]	7,372	6,095
Revolving loans amortized, Cost basis	[1]	2,083	2,756
Total loans	[1]	34,620	38,752
Mortgage [Member] | 1-4 Non-owner Occupied [Member] | 650 to 699 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	2,614	6,617
2020	[1]	2,201	3,095
2019	[1]	937	257
2018	[1]	970	299
2017	[1]	748	248
Prior	[1]	4,974	6,019
Revolving loans amortized, Cost basis	[1]	728	955
Total loans	[1]	13,172	17,490
Mortgage [Member] | 1-4 Non-owner Occupied [Member] | 600 to 649 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	125
2020	[1]	143	57
2019	[1]	0	108
2018	[1]	77	282
2017	[1]	100	174
Prior	[1]	2,178	2,051
Revolving loans amortized, Cost basis	[1]	200	381
Total loans	[1]	2,698	3,178
Mortgage [Member] | 1-4 Non-owner Occupied [Member] | 550 to 599 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	25
2019	[1]	0	0
2018	[1]	0	192
2017	[1]	487	0
Prior	[1]	587	1,121
Revolving loans amortized, Cost basis	[1]	271	0
Total loans	[1]	1,345	1,338
Mortgage [Member] | 1-4 Non-owner Occupied [Member] | 500 to 549 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	55
2017	[1]	0	0
Prior	[1]	467	638
Revolving loans amortized, Cost basis	[1]	110	50
Total loans	[1]	577	743
Mortgage [Member] | 1-4 Non-owner Occupied [Member] | Under 500 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	0
2017	[1]	0	0
Prior	[1]	205	172
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	205	172
Mortgage [Member] | 1-4 Non-owner Occupied [Member] | Unknown [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	0
2017	[1]	0	0
Prior	[1]	0	0
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	0	0
Mortgage [Member] | 1-4 Family - 2nd Lien [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	1,984	4,005
2020	[1]	4,768	4,912
2019	[1]	4,450	2,657
2018	[1]	2,583	2,502
2017	[1]	1,597	3,880
Prior	[1]	10,575	8,597
Revolving loans amortized, Cost basis	[1]	69,294	62,176
Total loans	[1]	95,251	88,729
Accrued interest, 2021	[1]	4	7
Accrued interest, 2020	[1]	10	9
Accrued interest, 2019	[1]	9	9
Accrued interest, 2018	[1]	7	5
Accrued interest, 2017	[1]	5	8
Accrued interest, Prior	[1]	28	34
Accrued interest, Revolving	[1]	263	211
Accrued interest excluded from total	[1]	326	283
Mortgage [Member] | 1-4 Family - 2nd Lien [Member] | 800 and Above [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	97	415
2020	[1]	117	964
2019	[1]	1,042	426
2018	[1]	244	95
2017	[1]	171	266
Prior	[1]	547	353
Revolving loans amortized, Cost basis	[1]	9,075	8,465
Total loans	[1]	11,293	10,984
Mortgage [Member] | 1-4 Family - 2nd Lien [Member] | 750 to 799 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	1,607	2,161
2020	[1]	2,832	2,413
2019	[1]	1,951	714
2018	[1]	833	1,332
2017	[1]	504	1,859
Prior	[1]	4,280	2,415
Revolving loans amortized, Cost basis	[1]	32,283	30,106
Total loans	[1]	44,290	41,000
Mortgage [Member] | 1-4 Family - 2nd Lien [Member] | 700 to 749 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	280	1,307
2020	[1]	1,556	1,049
2019	[1]	990	771
2018	[1]	848	561
2017	[1]	409	1,374
Prior	[1]	1,981	2,365
Revolving loans amortized, Cost basis	[1]	18,710	16,316
Total loans	[1]	24,774	23,743
Mortgage [Member] | 1-4 Family - 2nd Lien [Member] | 650 to 699 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	122
2020	[1]	163	309
2019	[1]	292	460
2018	[1]	288	405
2017	[1]	315	140
Prior	[1]	1,990	1,639
Revolving loans amortized, Cost basis	[1]	7,375	5,286
Total loans	[1]	10,423	8,361
Mortgage [Member] | 1-4 Family - 2nd Lien [Member] | 600 to 649 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	100	177
2019	[1]	175	72
2018	[1]	214	106
2017	[1]	157	92
Prior	[1]	805	1,143
Revolving loans amortized, Cost basis	[1]	1,359	1,370
Total loans	[1]	2,810	2,960
Mortgage [Member] | 1-4 Family - 2nd Lien [Member] | 550 to 599 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	61
2018	[1]	25	0
2017	[1]	38	0
Prior	[1]	424	476
Revolving loans amortized, Cost basis	[1]	176	228
Total loans	[1]	663	765
Mortgage [Member] | 1-4 Family - 2nd Lien [Member] | 500 to 549 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	99
2018	[1]	77	0
2017	[1]	0	89
Prior	[1]	427	190
Revolving loans amortized, Cost basis	[1]	248	155
Total loans	[1]	752	533
Mortgage [Member] | 1-4 Family - 2nd Lien [Member] | Under 500 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	54
2018	[1]	54	3
2017	[1]	3	60
Prior	[1]	121	16
Revolving loans amortized, Cost basis	[1]	68	250
Total loans	[1]	246	383
Mortgage [Member] | 1-4 Family - 2nd Lien [Member] | Unknown [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	0
2017	[1]	0	0
Prior	[1]	0	0
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	0	0
Mortgage [Member] | Resort Lending [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	1,551
2020	[1]	1,499	1,420
2019	[1]	1,399	250
2018	[1]	235	1,086
2017	[1]	1,015	130
Prior	[1]	39,700	44,208
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	43,848	48,645
Accrued interest, 2021	[1]	0	2
Accrued interest, 2020	[1]	1	3
Accrued interest, 2019	[1]	3	0
Accrued interest, 2018	[1]	1	3
Accrued interest, 2017	[1]	3	0
Accrued interest, Prior	[1]	102	106
Accrued interest, Revolving	[1]	0	0
Accrued interest excluded from total	[1]	110	114
Mortgage [Member] | Resort Lending [Member] | 800 and Above [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	274
2017	[1]	271	0
Prior	[1]	7,263	7,347
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	7,534	7,621
Mortgage [Member] | Resort Lending [Member] | 750 to 799 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	600
2020	[1]	490	1,246
2019	[1]	1,262	250
2018	[1]	235	511
2017	[1]	688	63
Prior	[1]	16,330	19,630
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	19,005	22,300
Mortgage [Member] | Resort Lending [Member] | 700 to 749 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	312	174
2019	[1]	54	0
2018	[1]	0	301
2017	[1]	56	67
Prior	[1]	7,678	9,052
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	8,100	9,594
Mortgage [Member] | Resort Lending [Member] | 650 to 699 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	951
2020	[1]	697	0
2019	[1]	83	0
2018	[1]	0	0
2017	[1]	0	0
Prior	[1]	6,834	6,057
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	7,614	7,008
Mortgage [Member] | Resort Lending [Member] | 600 to 649 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	0
2017	[1]	0	0
Prior	[1]	1,296	1,841
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	1,296	1,841
Mortgage [Member] | Resort Lending [Member] | 550 to 599 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	0
2017	[1]	0	0
Prior	[1]	137	80
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	137	80
Mortgage [Member] | Resort Lending [Member] | 500 to 549 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	0
2017	[1]	0	0
Prior	[1]	44	201
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	44	201
Mortgage [Member] | Resort Lending [Member] | Under 500 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	0
2017	[1]	0	0
Prior	[1]	118	0
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	118	0
Mortgage [Member] | Resort Lending [Member] | Unknown [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	0
2017	[1]	0	0
Prior	[1]	0	0
Revolving loans amortized, Cost basis	[1]	0	0
Total loans	[1]	0	0
Installment [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	176,120	244,401
2020	[1]	201,302	101,169
2019	[1]	86,556	82,136
2018	[1]	69,201	57,880
2017	[1]	48,962	32,122
Prior	[1]	63,342	44,097
Total loans	[1]	645,483	561,805
Accrued interest, 2021	[1]	358	507
Accrued interest, 2020	[1]	436	235
Accrued interest, 2019	[1]	192	220
Accrued interest, 2018	[1]	172	144
Accrued interest, 2017	[1]	118	81
Accrued interest, Prior	[1]	156	113
Accrued interest excluded from total	[1]	1,432	1,300
Installment [Member] | 800 and Above [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	18,721	18,316
2020	[1]	17,395	12,331
2019	[1]	11,871	13,345
2018	[1]	11,257	10,415
2017	[1]	8,578	5,781
Prior	[1]	12,250	8,722
Total loans	[1]	80,072	68,910
Installment [Member] | 750 to 799 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	94,085	128,191
2020	[1]	110,637	56,768
2019	[1]	47,355	44,299
2018	[1]	37,527	30,829
2017	[1]	27,158	17,261
Prior	[1]	31,527	20,496
Total loans	[1]	348,289	297,844
Installment [Member] | 700 to 749 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	34,054	62,673
2020	[1]	55,223	24,650
2019	[1]	21,085	17,733
2018	[1]	15,372	12,134
2017	[1]	8,905	5,672
Prior	[1]	12,540	9,490
Total loans	[1]	147,179	132,352
Installment [Member] | 650 to 699 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	27,352	31,402
2020	[1]	14,833	5,817
2019	[1]	4,793	5,392
2018	[1]	3,675	2,828
2017	[1]	2,802	2,376
Prior	[1]	4,762	3,615
Total loans	[1]	58,217	51,430
Installment [Member] | 600 to 649 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	708	2,124
2020	[1]	2,737	1,195
2019	[1]	1,049	772
2018	[1]	819	850
2017	[1]	923	621
Prior	[1]	1,416	1,072
Total loans	[1]	7,652	6,634
Installment [Member] | 550 to 599 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	46	667
2020	[1]	344	223
2019	[1]	157	381
2018	[1]	369	598
2017	[1]	471	167
Prior	[1]	455	417
Total loans	[1]	1,842	2,453
Installment [Member] | 500 to 549 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	47
2020	[1]	65	123
2019	[1]	185	161
2018	[1]	139	202
2017	[1]	61	64
Prior	[1]	321	256
Total loans	[1]	771	853
Installment [Member] | Under 500 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	6
2020	[1]	68	62
2019	[1]	61	53
2018	[1]	43	24
2017	[1]	64	180
Prior	[1]	71	29
Total loans	[1]	307	354
Installment [Member] | Unknown [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	1,154	975
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	0
2017	[1]	0	0
Prior	[1]	0	0
Total loans	[1]	1,154	975
Installment [Member] | Boat Lending [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	58,489	78,582
2020	[1]	70,701	42,706
2019	[1]	37,311	37,931
2018	[1]	32,851	28,812
2017	[1]	25,299	17,508
Prior	[1]	33,734	22,601
Total loans	[1]	258,385	228,140
Accrued interest, 2021	[1]	133	169
Accrued interest, 2020	[1]	150	102
Accrued interest, 2019	[1]	87	106
Accrued interest, 2018	[1]	84	69
Accrued interest, 2017	[1]	58	44
Accrued interest, Prior	[1]	76	47
Accrued interest excluded from total	[1]	588	537
Installment [Member] | Boat Lending [Member] | 800 and Above [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	7,512	7,513
2020	[1]	7,782	5,786
2019	[1]	5,048	6,015
2018	[1]	4,851	4,906
2017	[1]	4,324	2,968
Prior	[1]	6,478	4,433
Total loans	[1]	35,995	31,621
Installment [Member] | Boat Lending [Member] | 750 to 799 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	36,409	47,434
2020	[1]	40,761	24,968
2019	[1]	21,681	21,052
2018	[1]	18,994	15,681
2017	[1]	14,723	9,797
Prior	[1]	17,404	10,971
Total loans	[1]	149,972	129,903
Installment [Member] | Boat Lending [Member] | 700 to 749 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	11,308	19,180
2020	[1]	17,884	9,724
2019	[1]	8,563	8,263
2018	[1]	7,198	6,467
2017	[1]	4,277	3,109
Prior	[1]	6,705	4,953
Total loans	[1]	55,935	51,696
Installment [Member] | Boat Lending [Member] | 650 to 699 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	2,966	3,845
2020	[1]	3,513	1,679
2019	[1]	1,669	2,301
2018	[1]	1,391	1,223
2017	[1]	1,342	1,166
Prior	[1]	2,073	1,378
Total loans	[1]	12,954	11,592
Installment [Member] | Boat Lending [Member] | 600 to 649 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	294	373
2020	[1]	717	419
2019	[1]	297	209
2018	[1]	326	327
2017	[1]	447	185
Prior	[1]	628	604
Total loans	[1]	2,709	2,117
Installment [Member] | Boat Lending [Member] | 550 to 599 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	237
2020	[1]	44	81
2019	[1]	6	91
2018	[1]	81	113
2017	[1]	126	115
Prior	[1]	213	191
Total loans	[1]	470	828
Installment [Member] | Boat Lending [Member] | 500 to 549 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	49
2019	[1]	47	0
2018	[1]	10	85
2017	[1]	32	0
Prior	[1]	199	67
Total loans	[1]	288	201
Installment [Member] | Boat Lending [Member] | Under 500 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	10
2017	[1]	28	168
Prior	[1]	34	4
Total loans	[1]	62	182
Installment [Member] | Boat Lending [Member] | Unknown [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	0
2017	[1]	0	0
Prior	[1]	0	0
Total loans	[1]	0	0
Installment [Member] | Recreational Vehicle Lending [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	76,481	116,701
2020	[1]	103,687	40,280
2019	[1]	34,730	31,591
2018	[1]	26,937	22,029
2017	[1]	18,597	10,227
Prior	[1]	19,642	13,917
Total loans	[1]	280,074	234,745
Accrued interest, 2021	[1]	177	265
Accrued interest, 2020	[1]	231	93
Accrued interest, 2019	[1]	76	78
Accrued interest, 2018	[1]	63	56
Accrued interest, 2017	[1]	45	26
Accrued interest, Prior	[1]	40	28
Accrued interest excluded from total	[1]	632	546
Installment [Member] | Recreational Vehicle Lending [Member] | 800 and Above [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	9,586	8,475
2020	[1]	7,967	5,121
2019	[1]	5,149	5,837
2018	[1]	5,129	4,627
2017	[1]	3,712	2,456
Prior	[1]	4,934	3,594
Total loans	[1]	36,477	30,110
Installment [Member] | Recreational Vehicle Lending [Member] | 750 to 799 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	47,236	66,834
2020	[1]	58,380	22,707
2019	[1]	18,792	17,173
2018	[1]	14,206	11,973
2017	[1]	10,072	5,281
Prior	[1]	10,168	6,794
Total loans	[1]	158,854	130,762
Installment [Member] | Recreational Vehicle Lending [Member] | 700 to 749 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	17,003	32,702
2020	[1]	28,781	9,500
2019	[1]	8,234	6,169
2018	[1]	5,702	3,768
2017	[1]	3,357	1,657
Prior	[1]	3,001	2,343
Total loans	[1]	66,078	56,139
Installment [Member] | Recreational Vehicle Lending [Member] | 650 to 699 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	2,558	7,390
2020	[1]	7,068	2,423
2019	[1]	1,871	1,842
2018	[1]	1,337	948
2017	[1]	922	649
Prior	[1]	1,179	905
Total loans	[1]	14,935	14,157
Installment [Member] | Recreational Vehicle Lending [Member] | 600 to 649 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	98	990
2020	[1]	1,237	408
2019	[1]	513	291
2018	[1]	246	333
2017	[1]	279	152
Prior	[1]	192	111
Total loans	[1]	2,565	2,285
Installment [Member] | Recreational Vehicle Lending [Member] | 550 to 599 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	271
2020	[1]	137	100
2019	[1]	95	163
2018	[1]	247	318
2017	[1]	255	6
Prior	[1]	118	72
Total loans	[1]	852	930
Installment [Member] | Recreational Vehicle Lending [Member] | 500 to 549 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	39
2020	[1]	50	21
2019	[1]	76	105
2018	[1]	59	62
2017	[1]	0	26
Prior	[1]	46	91
Total loans	[1]	231	344
Installment [Member] | Recreational Vehicle Lending [Member] | Under 500 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	67	0
2019	[1]	0	11
2018	[1]	11	0
2017	[1]	0	0
Prior	[1]	4	7
Total loans	[1]	82	18
Installment [Member] | Recreational Vehicle Lending [Member] | Unknown [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	0
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	0
2017	[1]	0	0
Prior	[1]	0	0
Total loans	[1]	0	0
Installment [Member] | Other [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	41,150	49,118
2020	[1]	26,914	18,183
2019	[1]	14,515	12,614
2018	[1]	9,413	7,039
2017	[1]	5,066	4,387
Prior	[1]	9,966	7,579
Total loans	[1]	107,024	98,920
Accrued interest, 2021	[1]	48	73
Accrued interest, 2020	[1]	55	40
Accrued interest, 2019	[1]	29	36
Accrued interest, 2018	[1]	25	19
Accrued interest, 2017	[1]	15	11
Accrued interest, Prior	[1]	40	38
Accrued interest excluded from total	[1]	212	217
Installment [Member] | Other [Member] | 800 and Above [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	1,623	2,328
2020	[1]	1,646	1,424
2019	[1]	1,674	1,493
2018	[1]	1,277	882
2017	[1]	542	357
Prior	[1]	838	695
Total loans	[1]	7,600	7,179
Installment [Member] | Other [Member] | 750 to 799 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	10,440	13,923
2020	[1]	11,496	9,093
2019	[1]	6,882	6,074
2018	[1]	4,327	3,175
2017	[1]	2,363	2,183
Prior	[1]	3,955	2,731
Total loans	[1]	39,463	37,179
Installment [Member] | Other [Member] | 700 to 749 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	5,743	10,791
2020	[1]	8,558	5,426
2019	[1]	4,288	3,301
2018	[1]	2,472	1,899
2017	[1]	1,271	906
Prior	[1]	2,834	2,194
Total loans	[1]	25,166	24,517
Installment [Member] | Other [Member] | 650 to 699 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	21,828	20,167
2020	[1]	4,252	1,715
2019	[1]	1,253	1,249
2018	[1]	947	657
2017	[1]	538	561
Prior	[1]	1,510	1,332
Total loans	[1]	30,328	25,681
Installment [Member] | Other [Member] | 600 to 649 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	316	761
2020	[1]	783	368
2019	[1]	239	272
2018	[1]	247	190
2017	[1]	197	284
Prior	[1]	596	357
Total loans	[1]	2,378	2,232
Installment [Member] | Other [Member] | 550 to 599 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	46	159
2020	[1]	163	42
2019	[1]	56	127
2018	[1]	41	167
2017	[1]	90	46
Prior	[1]	124	154
Total loans	[1]	520	695
Installment [Member] | Other [Member] | 500 to 549 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	8
2020	[1]	15	53
2019	[1]	62	56
2018	[1]	70	55
2017	[1]	29	38
Prior	[1]	76	98
Total loans	[1]	252	308
Installment [Member] | Other [Member] | Under 500 [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	0	6
2020	[1]	1	62
2019	[1]	61	42
2018	[1]	32	14
2017	[1]	36	12
Prior	[1]	33	18
Total loans	[1]	163	154
Installment [Member] | Other [Member] | Unknown [Member]
Summary of Credit Scores by Loan Class [Abstract]
2021	[1]	1,154	975
2020	[1]	0	0
2019	[1]	0	0
2018	[1]	0	0
2017	[1]	0	0
Prior	[1]	0	0
Total loans	[1]	$ 1,154	$ 975

[1] Credit scores have been updated within the last twelve months.

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Loans, Foreclosed Residential Real Estate Properties (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Other Real Estate and Foreclosed Assets [Abstract]
Foreclosed residential real estate properties	$ 500			$ 500		$ 200
Retail mortgage loans in process of foreclosure	400			400		600
Sale of Mortgage Loans [Abstract]
Loans held for sale	0			0		$ 34,811
Gain on sale of loans	$ 1,253		$ 9,091	$ 2,088	$ 21,919
Mortgage [Member] | Residential Fixed Rate Mortgage Loans [Member]
Sale of Mortgage Loans [Abstract]
Loans held for sale		$ 33,400
Gain on sale of loans		$ 410

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Shareholders' Equity and Earnings Per Common Share, Shareholders' Equity (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 17, 2021
Share Repurchase Plan [Abstract]
Stock repurchased (in shares)	122,584	163,338	181,586	344,005
Stock repurchased	$ 2,626	$ 3,684	$ 4,010	$ 7,285
Common Stock [Member]
Share Repurchase Plan [Abstract]
Number of shares authorized for repurchase (in shares)					1,100,000
Stock repurchased (in shares)			181,586	344,005
Stock repurchased	$ 2,626	$ 3,684	$ 4,010	$ 7,285

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Shareholders' Equity and Earnings Per Common Share, Earnings Per Share Reconciliation (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Earnings Per Share Reconciliation [Abstract]
Net income		$ 13,001	$ 12,388	$ 30,968	$ 34,425
Weighted average shares outstanding (in shares)	[1]	21,070,000	21,750,000	21,131,000	21,788,000
Stock units for deferred compensation plan for non-employee directors (in shares)		133,000	113,000	131,000	118,000
Effect of stock options (in shares)		42,000	70,000	49,000	76,000
Performance share units (in shares)		21,000	34,000	23,000	32,000
Weighted average shares outstanding for calculation of diluted earnings per share (in shares)		21,266,000	21,967,000	21,334,000	22,014,000
Net income per common share [Abstract]
Basic (in dollars per share)	[1]	$ 0.62	$ 0.57	$ 1.47	$ 1.58
Diluted (in dollars per share)		$ 0.61	$ 0.56	$ 1.45	$ 1.56
Stock Options [Member]
Antidilutive Securities [Abstract]
Antidilutive shares excluded from computation of diluted loss per share (in shares)		0	0	0	0

[1] Basic net income per common share includes weighted average common shares outstanding during the period and participating share awards.

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Derivative Financial Instruments, Type of Hedge and Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives	$ 27,417	$ 27,417	$ 12,283
Liability Derivatives	14,997	14,997	5,961
Fair Value Hedge Designation [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount	155,474	$ 155,474	$ 155,648
Average Maturity		5 years 4 months 24 days	5 years 10 months 24 days
Fair Value	15,653	$ 15,653	$ 4,029
No Hedge Designation [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount	661,528	$ 661,528	$ 741,743
Average Maturity		3 years 10 months 24 days	3 years 4 months 24 days
Fair Value	(3,233)	$ (3,233)	$ 2,293
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives	11,764	11,764	7,870
Liability Derivatives	14,997	14,997	5,577
No Hedge Designation [Member] | Rate-Lock Mortgage Loan Commitments [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount	96,536	$ 96,536	$ 129,846
Average Maturity		1 month 6 days	1 month 6 days
Fair Value	(5,072)	$ (5,072)	$ 2,140
No Hedge Designation [Member] | Mandatory Commitments to Sell Mortgage Loans [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount	98,986	$ 98,986	$ 97,737
Average Maturity		1 month 6 days	1 month 6 days
Fair Value	556	$ 556	$ (68)
No Hedge Designation [Member] | Interest Rate Swaption Agreement [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount			$ 10,000
Average Maturity			2 months 12 days
Fair Value			$ 186
No Hedge Designation [Member] | Interest-Rate Cap Agreements [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount			$ 90,000
Average Maturity			1 year 3 months 18 days
Fair Value			$ 35
Interest rate cap terminated	75,000
Interest rate cap matured	15,000
Fixed Income Interest Rate [Member] | Fair Value Hedge Designation [Member] | Interest Rate Swap [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount	6,579	$ 6,579	$ 6,753
Average Maturity		6 years 10 months 24 days	7 years 4 months 24 days
Fair Value	193	$ 193	$ (384)
Fixed Income Interest Rate [Member] | Fair Value Hedge Designation [Member] | Interest Rate Swap [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount	148,895	$ 148,895	$ 148,895
Average Maturity		5 years 3 months 18 days	5 years 9 months 18 days
Fair Value	15,460	$ 15,460	$ 4,413
Fixed Income Interest Rate [Member] | No Hedge Designation [Member] | Interest Rate Swap [Member] | Mortgage [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount	31,000	$ 31,000
Average Maturity		7 years 1 month 6 days
Fair Value	1,283	$ 1,283
Fixed Income Interest Rate [Member] | No Hedge Designation [Member] | Interest Rate Swap [Member] | Commercial [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount	217,503	$ 217,503	$ 207,080
Average Maturity		5 years 3 months 18 days	5 years 8 months 12 days
Fair Value	9,545	$ 9,545	$ (5,179)
Variable Income Interest Rate [Member] | No Hedge Designation [Member] | Interest Rate Swap [Member] | Commercial [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount	217,503	$ 217,503	$ 207,080
Average Maturity		5 years 3 months 18 days	5 years 8 months 12 days
Fair Value	(9,545)	$ (9,545)	$ 5,179
Other Assets [Member] | No Hedge Designation [Member] | Rate-Lock Mortgage Loan Commitments [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives	0	0	2,140
Other Assets [Member] | No Hedge Designation [Member] | Mandatory Commitments to Sell Mortgage Loans [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives	556	556	0
Other Assets [Member] | No Hedge Designation [Member] | Interest Rate Swaption Agreement [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives	0	0	186
Other Assets [Member] | No Hedge Designation [Member] | Interest-Rate Cap Agreements [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives	0	0	35
Other Assets [Member] | Fixed Income Interest Rate [Member] | Designated as Hedging Instrument [Member] | Interest Rate Swap [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives	15,653	15,653	4,413
Other Assets [Member] | Fixed Income Interest Rate [Member] | No Hedge Designation [Member] | Interest Rate Swap [Member] | Mortgage [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives	1,283	1,283	0
Other Assets [Member] | Fixed Income Interest Rate [Member] | No Hedge Designation [Member] | Interest Rate Swap [Member] | Commercial [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives	9,735	9,735	165
Other Assets [Member] | Variable Income Interest Rate [Member] | No Hedge Designation [Member] | Interest Rate Swap [Member] | Commercial [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives	190	190	5,344
Other Liabilities [Member] | No Hedge Designation [Member] | Rate-Lock Mortgage Loan Commitments [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Liability Derivatives	5,072	5,072	0
Other Liabilities [Member] | No Hedge Designation [Member] | Mandatory Commitments to Sell Mortgage Loans [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Liability Derivatives	0	0	68
Other Liabilities [Member] | No Hedge Designation [Member] | Interest Rate Swaption Agreement [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Liability Derivatives	0	0	0
Other Liabilities [Member] | No Hedge Designation [Member] | Interest-Rate Cap Agreements [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Liability Derivatives	0	0	0
Other Liabilities [Member] | Fixed Income Interest Rate [Member] | Designated as Hedging Instrument [Member] | Interest Rate Swap [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Liability Derivatives	0	0	384
Other Liabilities [Member] | Fixed Income Interest Rate [Member] | No Hedge Designation [Member] | Interest Rate Swap [Member] | Mortgage [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Liability Derivatives	0	0	0
Other Liabilities [Member] | Fixed Income Interest Rate [Member] | No Hedge Designation [Member] | Interest Rate Swap [Member] | Commercial [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Liability Derivatives	190	190	5,344
Other Liabilities [Member] | Variable Income Interest Rate [Member] | No Hedge Designation [Member] | Interest Rate Swap [Member] | Commercial [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Liability Derivatives	$ 9,735	$ 9,735	$ 165

XML

Derivative Financial Instruments, Effect on Statement of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Fair Value Hedge Designation [Member]
Effect of derivative financial instruments on the condensed consolidated financial statements of operations [Abstract]
Gain (Loss) Recognized in Income	$ 3,701	$ (2,326)	$ 11,624	$ 2,899
Fair Value Hedge Designation [Member] | Fixed Income Interest Rate [Member] | Interest Rate Swap [Member]
Effect of derivative financial instruments on the condensed consolidated financial statements of operations [Abstract]
Gain (Loss) Recognized in Income	$ 3,501	(2,234)	$ 11,048	2,639
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Tax-exempt		Tax-exempt
Fair Value Hedge Designation [Member] | Fixed Income Interest Rate [Member] | Commercial [Member] | Interest Rate Swap [Member]
Effect of derivative financial instruments on the condensed consolidated financial statements of operations [Abstract]
Gain (Loss) Recognized in Income	$ 200	(92)	$ 576	260
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Interest and fees on loans		Interest and fees on loans
No Hedge Designation [Member]
Effect of derivative financial instruments on the condensed consolidated financial statements of operations [Abstract]
Gain (Loss) Recognized in Income	$ (2,513)	220	$ (5,246)	(1,632)
No Hedge Designation [Member] | Rate-Lock Mortgage Loan Commitments [Member]
Effect of derivative financial instruments on the condensed consolidated financial statements of operations [Abstract]
Gain (Loss) Recognized in Income	$ (1,842)	1,158	$ (7,212)	(2,664)
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Mortgage loans		Mortgage loans
No Hedge Designation [Member] | Mandatory Commitments to Sell Mortgage Loans [Member]
Effect of derivative financial instruments on the condensed consolidated financial statements of operations [Abstract]
Gain (Loss) Recognized in Income	$ (1,350)	(1,027)	$ 624	810
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Mortgage loans		Mortgage loans
No Hedge Designation [Member] | Interest-Rate Cap Agreements [Member]
Effect of derivative financial instruments on the condensed consolidated financial statements of operations [Abstract]
Gain (Loss) Recognized in Income	$ 23	(4)	$ 245	11
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Interest Expense		Interest Expense
No Hedge Designation [Member] | Interest Rate Swaption Agreement [Member]
Effect of derivative financial instruments on the condensed consolidated financial statements of operations [Abstract]
Gain (Loss) Recognized in Income	$ 0	(27)	$ (186)	(27)
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Mortgage loans		Mortgage loans
No Hedge Designation [Member] | Purchased Options [Member]
Effect of derivative financial instruments on the condensed consolidated financial statements of operations [Abstract]
Gain (Loss) Recognized in Income	$ 0	11	$ 0	29
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Interest Expense		Interest Expense
No Hedge Designation [Member] | Written Options [Member]
Effect of derivative financial instruments on the condensed consolidated financial statements of operations [Abstract]
Gain (Loss) Recognized in Income	$ 0	(11)	$ 0	(29)
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Interest Expense		Interest Expense
No Hedge Designation [Member] | Fixed Income Interest Rate [Member] | Interest Rate Swap [Member]
Effect of derivative financial instruments on the condensed consolidated financial statements of operations [Abstract]
Gain (Loss) Recognized in Income	$ 0	120	$ 0	238
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Interest Expense		Interest Expense
No Hedge Designation [Member] | Fixed Income Interest Rate [Member] | Commercial [Member] | Interest Rate Swap [Member]
Effect of derivative financial instruments on the condensed consolidated financial statements of operations [Abstract]
Gain (Loss) Recognized in Income	$ 5,147	(448)	$ 14,724	2,827
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Interest and Dividend Income, Operating		Interest and Dividend Income, Operating
No Hedge Designation [Member] | Fixed Income Interest Rate [Member] | Mortgage [Member] | Interest Rate Swap [Member]
Effect of derivative financial instruments on the condensed consolidated financial statements of operations [Abstract]
Gain (Loss) Recognized in Income	$ 656	0	$ 1,283	0
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Mortgage loans		Mortgage loans
No Hedge Designation [Member] | Variable Income Interest Rate [Member] | Commercial [Member] | Interest Rate Swap [Member]
Effect of derivative financial instruments on the condensed consolidated financial statements of operations [Abstract]
Gain (Loss) Recognized in Income	$ (5,147)	$ 448	$ (14,724)	$ (2,827)
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Interest and Dividend Income, Operating		Interest and Dividend Income, Operating

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Goodwill and Other Intangibles (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Amortized intangible assets - core deposits [Abstract]
Gross Carrying Amount	$ 11,916	$ 11,916
Accumulated Amortization	9,045	8,580
Unamortized intangible assets - goodwill [Abstract]
Gross Carrying Amount	28,300	$ 28,300
Summary of estimated core deposits intangible amortization [Abstract]
Six months ending December 31, 2022	320
2023	547
2024	516
2025	487
2026	460
2027 and thereafter	541
Total	$ 2,871

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Share Based Compensation, Share Based Payment Plans (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Share Based Compensation [Abstract]
Number of additional shares approved for grant (in shares)			600,000
Shares issued on deferral basis credited percentage of current value	90.00%		90.00%
Total compensation cost not yet recognized	$ 3,220		$ 3,220
Total compensation cost not yet recognized, period for recognition			2 years 1 month 6 days
Long-Term Incentive Plan [Member]
Share Based Compensation [Abstract]
Total compensation expense recognized	400	$ 500	$ 900	$ 800
Tax benefit relating to compensation expense recognized	$ 100	$ 100	$ 200	$ 200
Restricted Stock [Member] | Long-Term Incentive Plan [Member]
Share Based Compensation [Abstract]
Restricted stock and Performance stock units granted (in shares)	2,500	10,000	58,787	85,584
Restricted Stock [Member] | Long-Term Incentive Plan [Member] | Cliff Vest After Three Years [Member]
Share Based Compensation [Abstract]
Vesting period			3 years	3 years
Performance Stock Units [Member] | Long-Term Incentive Plan [Member]
Share Based Compensation [Abstract]
Restricted stock and Performance stock units granted (in shares)	0	0	19,748	23,981
Performance Stock Units [Member] | Long-Term Incentive Plan [Member] | Cliff Vest After Three Years [Member]
Share Based Compensation [Abstract]
Vesting period			3 years	3 years
Performance feature comparison period			3 years
Non-Employee Directors [Member]
Share Based Compensation [Abstract]
Number of additional shares approved for grant (in shares)			100,000
Total compensation expense recognized	$ 90	$ 90	$ 190	$ 190
Tax benefit relating to compensation expense recognized	$ 20	$ 20	$ 40	$ 40
Directors [Member]
Share Based Compensation [Abstract]
Shares issues as retainer fees (in shares)			8,000.000	9,000.000

XML

Share Based Compensation, Outstanding Stock Option Grants and Related Transactions (Details) - Stock Options [Member] $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($) $ / shares shares
Number of Shares [Roll Forward]
Outstanding, beginning balance (in shares)	80,839
Granted (in shares)	0
Exercised (in shares)	(21,632)
Forfeited (in shares)	0
Expired (in shares)	0
Outstanding, ending balance (in shares)	59,207
Vested and expected to vest, period end (in shares)	59,207
Exercisable, period end (in shares)	59,207
Average Exercise Price [Roll Forward]
Outstanding, beginning balance (in dollars per share) | $ / shares	$ 5.76
Exercised (in dollars per share) | $ / shares	3.33
Outstanding, ending balance (in dollars per share) | $ / shares	6.65
Vested and expected to vest, period end (in dollars per share) | $ / shares	6.65
Exercisable, period end (in dollars per share) | $ / shares	$ 6.65
Weighted-Average Remaining Contractual Term (Years) [Abstract]
Outstanding, weighted average remaining contractual term	1 year 4 months 24 days
Vested and expected to vest, weighted-average remaining contractual term	1 year 4 months 24 days
Exercisable, weighted average remaining contractual term	1 year 4 months 24 days
Aggregate Intrinsic Value [Abstract]
Outstanding, aggregate intrinsic value | $	$ 750
Vested and expected to vest, aggregate intrinsic value | $	750
Exercisable, aggregate intrinsic value | $	$ 750

XML

Share Based Compensation, Outstanding Non-vested Restricted Stock and PSUs and Related Transactions (Details) - Non-vested Restricted Stock and PSU's [Member]	6 Months Ended
	Jun. 30, 2022 $ / shares shares
Number of Shares [Roll Forward]
Outstanding, beginning balance (in shares) | shares	234,226
Granted (in shares) | shares	78,535
Vested (in shares) | shares	(55,875)
Forfeited (in shares) | shares	(10,200)
Outstanding, ending balance (in shares) | shares	246,686
Weighted Average Grant Date Fair Value [Roll Forward]
Outstanding, beginning balance (in dollars per share) | $ / shares	$ 21.64
Granted (in dollars per share) | $ / shares	26.31
Vested (in dollars per share) | $ / shares	22.92
Forfeited (in dollars per share) | $ / shares	22.14
Outstanding, ending balance (in dollars per share) | $ / shares	$ 22.81

XML

Share Based Compensation, Options Exercised During the Periods (Details) - Stock Options [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Information regarding options exercised [Abstract]
Intrinsic value	$ 111	$ 388	$ 424	$ 701
Cash proceeds received	22	44	72	104
Tax benefit realized	$ 23	$ 81	$ 89	$ 147

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Income Tax (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Income Tax [Abstract]
Income tax expense	$ 2,879	$ 2,665	$ 6,984	$ 7,771
(Decrease) increase in income tax expense	(20)	$ (70)	(80)	$ (170)
Gross unrecognized tax benefits	$ 200		$ 200		$ 200

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Regulatory Matters (Details) $ in Thousands		6 Months Ended
		Jun. 30, 2022 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Jun. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Regulatory Matters [Abstract]
Undivided profits		$ 116,500
Tier 1 capital to average assets [Abstract]
Capital conservation buffer		0.0250		0.0250
Components of regulatory capital [Abstract]
Total shareholders' equity		$ 331,134	$ 355,449	$ 398,484	$ 395,974	$ 387,329	$ 389,522
Add (deduct) [Abstract]
Accumulated other comprehensive income (loss) for regulatory purposes		(85,003)		501
Subordinated debt		$ 39,395		39,357
Period of transition method for regulatory purposes		3 years
Consolidated [Member]
Total capital to risk-weighted assets [Abstract]
Total risk-based capital	[1]	$ 508,950		$ 488,495
Actual, Ratio	[1]	0.1364		0.1453
Minimum for Adequately Capitalized Institutions, Amount	[1]	$ 298,424		$ 268,991
Minimum for Adequately Capitalized Institutions, Ratio	[1]	0.0800		0.0800
Tier 1 capital to risk-weighted assets [Abstract]
Actual, Amount	[1]	$ 422,723		$ 406,645
Actual, Ratio	[1]	0.1133		0.1209
Minimum for Adequately Capitalized Institutions, Amount	[1]	$ 223,818		$ 201,743
Minimum for Adequately Capitalized Institutions, Ratio	[1]	0.0600		0.0600
Common equity tier 1 capital to risk-weighted assets [Abstract]
Actual, Amount	[1]	$ 384,321		$ 368,277
Actual, Ratio	[1]	0.1030		0.1095
Minimum for Adequately Capitalized Institutions, Amount	[1]	$ 167,864		$ 151,307
Minimum for Adequately Capitalized Institutions, Ratio	[1]	0.0450		0.0450
Tier 1 capital to average assets [Abstract]
Tier 1 capital	[1]	$ 422,723		$ 406,645
Actual, Ratio	[1]	0.0874		0.0879
Minimum for Adequately Capitalized Institutions, Amount	[1]	$ 193,472		$ 185,034
Minimum for Adequately Capitalized Institutions, Ratio	[1]	0.0400		0.0400
Components of regulatory capital [Abstract]
Total shareholders' equity		$ 331,134		$ 398,484
Add (deduct) [Abstract]
Accumulated other comprehensive income (loss) for regulatory purposes		79,206		(6,298)
Goodwill and other intangibles		(31,171)		(31,636)
CECL	[2]	5,152		7,727
Common equity tier 1 capital	[1]	384,321		368,277
Qualifying trust preferred securities		38,402		38,368
Tier 1 capital	[1]	422,723		406,645
Subordinated debt		40,000		40,000
Allowance for credit losses and allowance for unfunded lending commitments limited to 1.25% of total risk-weighted assets		46,227		41,850
Total risk-based capital	[1]	508,950		488,495
Independent Bank [Member]
Total capital to risk-weighted assets [Abstract]
Total risk-based capital	[1]	$ 456,878		$ 438,352
Actual, Ratio	[1]	0.1226		0.1305
Minimum for Adequately Capitalized Institutions, Amount	[1]	$ 298,219		$ 268,808
Minimum for Adequately Capitalized Institutions, Ratio	[1]	0.0800		0.0800
Minimum for Well-Capitalized Institutions, Amount	[1]	$ 372,774		$ 336,011
Minimum for Well-Capitalized Institutions, Ratio	[1]	0.1000		0.1000
Tier 1 capital to risk-weighted assets [Abstract]
Actual, Amount	[1]	$ 410,651		$ 396,351
Actual, Ratio	[1]	0.1102		0.1180
Minimum for Adequately Capitalized Institutions, Amount	[1]	$ 223,664		$ 201,606
Minimum for Adequately Capitalized Institutions, Ratio	[1]	0.0600		0.0600
Minimum for Well-Capitalized Institutions, Amount	[1]	$ 298,219		$ 268,808
Minimum for Well-Capitalized Institutions, Ratio	[1]	0.0800		0.0800
Common equity tier 1 capital to risk-weighted assets [Abstract]
Actual, Amount	[1]	$ 410,651		$ 396,351
Actual, Ratio	[1]	0.1102		0.1180
Minimum for Adequately Capitalized Institutions, Amount	[1]	$ 167,748		$ 151,205
Minimum for Adequately Capitalized Institutions, Ratio	[1]	0.0450		0.0450
Minimum for Well-Capitalized Institutions, Amount	[1]	$ 242,303		$ 218,407
Minimum for Well-Capitalized Institutions, Ratio	[1]	0.0650		0.0650
Tier 1 capital to average assets [Abstract]
Tier 1 capital	[1]	$ 410,651		$ 396,351
Actual, Ratio	[1]	0.0849		0.0857
Minimum for Adequately Capitalized Institutions, Amount	[1]	$ 193,575		$ 185,077
Minimum for Adequately Capitalized Institutions, Ratio	[1]	0.0400		0.0400
Minimum for Well-Capitalized Institutions, Amount	[1]	$ 241,969		$ 231,347
Minimum for Well-Capitalized Institutions, Ratio	[1]	0.0500		0.0500
Components of regulatory capital [Abstract]
Total shareholders' equity		$ 357,464		$ 426,558
Add (deduct) [Abstract]
Accumulated other comprehensive income (loss) for regulatory purposes		79,206		(6,298)
Goodwill and other intangibles		(31,171)		(31,636)
CECL	[2]	5,152		7,727
Common equity tier 1 capital	[1]	410,651		396,351
Qualifying trust preferred securities		0		0
Tier 1 capital	[1]	410,651		396,351
Subordinated debt		0		0
Allowance for credit losses and allowance for unfunded lending commitments limited to 1.25% of total risk-weighted assets		46,227		42,001
Total risk-based capital	[1]	$ 456,878		$ 438,352

[1] These ratios do not reflect a capital conservation buffer of 2.50% at June 30, 2022 and December 31, 2021.

[2] We elected the three year CECL transition method for regulatory purposes.

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Fair Value Disclosures, Significant Assumptions (Details) - USD ($) $ in Thousands		Jun. 30, 2022		Dec. 31, 2021
Assets [Abstract]
Securities available for sale		$ 859,704		$ 1,412,830
Loans held for sale, carried at fair value		31,400		55,470
U.S. Agency [Member]
Assets [Abstract]
Securities available for sale		13,991		34,674
U.S. Agency Residential Mortgage-Backed [Member]
Assets [Abstract]
Securities available for sale		100,689		307,985
U.S. Agency Commercial Mortgage-Backed [Member]
Assets [Abstract]
Securities available for sale		15,591		22,926
Private Label Mortgage-Backed [Member]
Assets [Abstract]
Securities available for sale		99,839		102,615
Other Asset Backed [Member]
Assets [Abstract]
Securities available for sale		234,235		216,170
Obligations of States and Political Subdivisions [Member]
Assets [Abstract]
Securities available for sale		312,915		576,076
Corporate [Member]
Assets [Abstract]
Securities available for sale		81,009		149,959
Trust Preferred [Member]
Assets [Abstract]
Securities available for sale		936		1,919
Foreign Government [Member]
Assets [Abstract]
Securities available for sale		499		506
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets [Abstract]
Securities available for sale		0		0
Derivatives		0		0
Liabilities [Abstract]
Derivatives		0		0
Significant Other Observable Inputs (Level 2) [Member]
Assets [Abstract]
Securities available for sale		859,704		1,412,830
Derivatives		27,417		12,283
Liabilities [Abstract]
Derivatives		14,997		5,961
Significant Un-observable Inputs (Level 3) [Member]
Assets [Abstract]
Securities available for sale		0		0
Derivatives		0		0
Liabilities [Abstract]
Derivatives		0		0
Recurring Basis [Member]
Assets [Abstract]
Loans held for sale, carried at fair value		31,400		55,470
Capitalized mortgage loan servicing rights		39,477		26,232
Derivatives	[1]	27,417		12,283
Liabilities [Abstract]
Derivatives	[2]	14,997		5,961
Recurring Basis [Member] | U.S. Agency [Member]
Assets [Abstract]
Securities available for sale		13,991		34,674
Recurring Basis [Member] | U.S. Agency Residential Mortgage-Backed [Member]
Assets [Abstract]
Securities available for sale		100,689		307,985
Recurring Basis [Member] | U.S. Agency Commercial Mortgage-Backed [Member]
Assets [Abstract]
Securities available for sale		15,591		22,926
Recurring Basis [Member] | Private Label Mortgage-Backed [Member]
Assets [Abstract]
Securities available for sale		99,839		102,615
Recurring Basis [Member] | Other Asset Backed [Member]
Assets [Abstract]
Securities available for sale		234,235		216,170
Recurring Basis [Member] | Obligations of States and Political Subdivisions [Member]
Assets [Abstract]
Securities available for sale		312,915		576,076
Recurring Basis [Member] | Corporate [Member]
Assets [Abstract]
Securities available for sale		81,009		149,959
Recurring Basis [Member] | Trust Preferred [Member]
Assets [Abstract]
Securities available for sale		936		1,919
Recurring Basis [Member] | Foreign Government [Member]
Assets [Abstract]
Securities available for sale		499		506
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets [Abstract]
Loans held for sale, carried at fair value		0		0
Capitalized mortgage loan servicing rights		0		0
Derivatives	[1]	0		0
Liabilities [Abstract]
Derivatives	[2]	0		0
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | U.S. Agency [Member]
Assets [Abstract]
Securities available for sale		0		0
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | U.S. Agency Residential Mortgage-Backed [Member]
Assets [Abstract]
Securities available for sale		0		0
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | U.S. Agency Commercial Mortgage-Backed [Member]
Assets [Abstract]
Securities available for sale		0		0
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Private Label Mortgage-Backed [Member]
Assets [Abstract]
Securities available for sale		0		0
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Other Asset Backed [Member]
Assets [Abstract]
Securities available for sale		0		0
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Obligations of States and Political Subdivisions [Member]
Assets [Abstract]
Securities available for sale		0		0
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Corporate [Member]
Assets [Abstract]
Securities available for sale		0		0
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Trust Preferred [Member]
Assets [Abstract]
Securities available for sale		0		0
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Foreign Government [Member]
Assets [Abstract]
Securities available for sale		0		0
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member]
Assets [Abstract]
Loans held for sale, carried at fair value		31,400		55,470
Capitalized mortgage loan servicing rights		0		0
Derivatives	[1]	27,417		12,283
Liabilities [Abstract]
Derivatives	[2]	14,997		5,961
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | U.S. Agency [Member]
Assets [Abstract]
Securities available for sale		13,991		34,674
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | U.S. Agency Residential Mortgage-Backed [Member]
Assets [Abstract]
Securities available for sale		100,689		307,985
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | U.S. Agency Commercial Mortgage-Backed [Member]
Assets [Abstract]
Securities available for sale		15,591		22,926
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Private Label Mortgage-Backed [Member]
Assets [Abstract]
Securities available for sale		99,839		102,615
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Other Asset Backed [Member]
Assets [Abstract]
Securities available for sale		234,235		216,170
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Obligations of States and Political Subdivisions [Member]
Assets [Abstract]
Securities available for sale		312,915		576,076
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Corporate [Member]
Assets [Abstract]
Securities available for sale		81,009		149,959
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Trust Preferred [Member]
Assets [Abstract]
Securities available for sale		936		1,919
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Foreign Government [Member]
Assets [Abstract]
Securities available for sale		499		506
Recurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member]
Assets [Abstract]
Loans held for sale, carried at fair value		0		0
Capitalized mortgage loan servicing rights		39,477		26,232
Derivatives	[1]	0		0
Liabilities [Abstract]
Derivatives	[2]	0		0
Recurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member] | U.S. Agency [Member]
Assets [Abstract]
Securities available for sale		0		0
Recurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member] | U.S. Agency Residential Mortgage-Backed [Member]
Assets [Abstract]
Securities available for sale		0		0
Recurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member] | U.S. Agency Commercial Mortgage-Backed [Member]
Assets [Abstract]
Securities available for sale		0		0
Recurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member] | Private Label Mortgage-Backed [Member]
Assets [Abstract]
Securities available for sale		0		0
Recurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member] | Other Asset Backed [Member]
Assets [Abstract]
Securities available for sale		0		0
Recurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member] | Obligations of States and Political Subdivisions [Member]
Assets [Abstract]
Securities available for sale		0		0
Recurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member] | Corporate [Member]
Assets [Abstract]
Securities available for sale		0		0
Recurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member] | Trust Preferred [Member]
Assets [Abstract]
Securities available for sale		0		0
Recurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member] | Foreign Government [Member]
Assets [Abstract]
Securities available for sale		0		0
Nonrecurring Basis [Member] | Collateral Dependent Loans [Member] | Commercial [Member] | Commercial and Industrial [Member]
Assets [Abstract]
Loans receivable		231	[3]	274	[4]
Nonrecurring Basis [Member] | Collateral Dependent Loans [Member] | Commercial [Member] | Commercial Real Estate [Member]
Assets [Abstract]
Loans receivable		56	[3]	65	[4]
Nonrecurring Basis [Member] | Collateral Dependent Loans [Member] | Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member]
Assets [Abstract]
Loans receivable		376	[3]	516	[4]
Nonrecurring Basis [Member] | Collateral Dependent Loans [Member] | Mortgage [Member] | 1-4 Family Non-owner Occupied [Member]
Assets [Abstract]
Loans receivable		7	[3]	130	[4]
Nonrecurring Basis [Member] | Collateral Dependent Loans [Member] | Mortgage [Member] | 1-4 Family - 2nd Lien [Member]
Assets [Abstract]
Loans receivable		62	[3]	121	[4]
Nonrecurring Basis [Member] | Collateral Dependent Loans [Member] | Mortgage [Member] | Resort Lending [Member]
Assets [Abstract]
Loans receivable		25	[3]	77	[4]
Nonrecurring Basis [Member] | Collateral Dependent Loans [Member] | Installment [Member] | Boat Lending [Member]
Assets [Abstract]
Loans receivable		66	[3]	51	[4]
Nonrecurring Basis [Member] | Collateral Dependent Loans [Member] | Installment [Member] | Recreational Vehicle Lending [Member]
Assets [Abstract]
Loans receivable		33	[3]	77	[4]
Nonrecurring Basis [Member] | Collateral Dependent Loans [Member] | Installment [Member] | Other [Member]
Assets [Abstract]
Loans receivable		101	[3]	45	[4]
Nonrecurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Collateral Dependent Loans [Member] | Commercial [Member] | Commercial and Industrial [Member]
Assets [Abstract]
Loans receivable		0	[3]	0	[4]
Nonrecurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Collateral Dependent Loans [Member] | Commercial [Member] | Commercial Real Estate [Member]
Assets [Abstract]
Loans receivable		0	[3]	0	[4]
Nonrecurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Collateral Dependent Loans [Member] | Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member]
Assets [Abstract]
Loans receivable		0	[3]	0	[4]
Nonrecurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Collateral Dependent Loans [Member] | Mortgage [Member] | 1-4 Family Non-owner Occupied [Member]
Assets [Abstract]
Loans receivable		0	[3]	0	[4]
Nonrecurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Collateral Dependent Loans [Member] | Mortgage [Member] | 1-4 Family - 2nd Lien [Member]
Assets [Abstract]
Loans receivable		0	[3]	0	[4]
Nonrecurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Collateral Dependent Loans [Member] | Mortgage [Member] | Resort Lending [Member]
Assets [Abstract]
Loans receivable		0	[3]	0	[4]
Nonrecurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Collateral Dependent Loans [Member] | Installment [Member] | Boat Lending [Member]
Assets [Abstract]
Loans receivable		0	[3]	0	[4]
Nonrecurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Collateral Dependent Loans [Member] | Installment [Member] | Recreational Vehicle Lending [Member]
Assets [Abstract]
Loans receivable		0	[3]	0	[4]
Nonrecurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Collateral Dependent Loans [Member] | Installment [Member] | Other [Member]
Assets [Abstract]
Loans receivable		0	[3]	0	[4]
Nonrecurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Collateral Dependent Loans [Member] | Commercial [Member] | Commercial and Industrial [Member]
Assets [Abstract]
Loans receivable		0	[3]	0	[4]
Nonrecurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Collateral Dependent Loans [Member] | Commercial [Member] | Commercial Real Estate [Member]
Assets [Abstract]
Loans receivable		0	[3]	0	[4]
Nonrecurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Collateral Dependent Loans [Member] | Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member]
Assets [Abstract]
Loans receivable		0	[3]	0	[4]
Nonrecurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Collateral Dependent Loans [Member] | Mortgage [Member] | 1-4 Family Non-owner Occupied [Member]
Assets [Abstract]
Loans receivable		0	[3]	0	[4]
Nonrecurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Collateral Dependent Loans [Member] | Mortgage [Member] | 1-4 Family - 2nd Lien [Member]
Assets [Abstract]
Loans receivable		0	[3]	0	[4]
Nonrecurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Collateral Dependent Loans [Member] | Mortgage [Member] | Resort Lending [Member]
Assets [Abstract]
Loans receivable		0	[3]	0	[4]
Nonrecurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Collateral Dependent Loans [Member] | Installment [Member] | Boat Lending [Member]
Assets [Abstract]
Loans receivable		0	[3]	0	[4]
Nonrecurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Collateral Dependent Loans [Member] | Installment [Member] | Recreational Vehicle Lending [Member]
Assets [Abstract]
Loans receivable		0	[3]	0	[4]
Nonrecurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Collateral Dependent Loans [Member] | Installment [Member] | Other [Member]
Assets [Abstract]
Loans receivable		0	[3]	0	[4]
Nonrecurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member] | Collateral Dependent Loans [Member] | Commercial [Member] | Commercial and Industrial [Member]
Assets [Abstract]
Loans receivable		231	[3]	274	[4]
Nonrecurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member] | Collateral Dependent Loans [Member] | Commercial [Member] | Commercial Real Estate [Member]
Assets [Abstract]
Loans receivable		56	[3]	65	[4]
Nonrecurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member] | Collateral Dependent Loans [Member] | Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member]
Assets [Abstract]
Loans receivable		376	[3]	516	[4]
Nonrecurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member] | Collateral Dependent Loans [Member] | Mortgage [Member] | 1-4 Family Non-owner Occupied [Member]
Assets [Abstract]
Loans receivable		7	[3]	130	[4]
Nonrecurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member] | Collateral Dependent Loans [Member] | Mortgage [Member] | 1-4 Family - 2nd Lien [Member]
Assets [Abstract]
Loans receivable		62	[3]	121	[4]
Nonrecurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member] | Collateral Dependent Loans [Member] | Mortgage [Member] | Resort Lending [Member]
Assets [Abstract]
Loans receivable		25	[3]	77	[4]
Nonrecurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member] | Collateral Dependent Loans [Member] | Installment [Member] | Boat Lending [Member]
Assets [Abstract]
Loans receivable		66	[3]	51	[4]
Nonrecurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member] | Collateral Dependent Loans [Member] | Installment [Member] | Recreational Vehicle Lending [Member]
Assets [Abstract]
Loans receivable		33	[3]	77	[4]
Nonrecurring Basis [Member] | Significant Un-observable Inputs (Level 3) [Member] | Collateral Dependent Loans [Member] | Installment [Member] | Other [Member]
Assets [Abstract]
Loans receivable		$ 101	[3]	$ 45	[4]

[1] Included in accrued income and other assets

[2] Included in accrued expenses and other liabilities

[3] Only includes individually evaluated loans with specific loss allocations based on collateral value.

[4] Only includes impaired loans with specific loss allocations based on collateral value.

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Fair Value Disclosures, Changes in Fair Value for Financial Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Changes in fair value for financial assets [Abstract]
Loans held for sale			$ (1,806)	$ (2,400)
Capitalized mortgage loan servicing rights, net gains (losses)			9,596	(581)
Impairment charges recognized [Abstract]
Collateral dependent loans, carrying amount	$ 1,000		1,000		$ 1,400
Collateral dependent loans, valuation allowance	400		400		600
Additional provision for credit losses on collateral dependent loans	100	$ 100	200	100
Other real estate, carrying amount	0		0		0
Other real estate, valuation allowance	30		30		$ 30
Other real estate, additional charge	$ 0	$ 0	0	0
Mortgage Loans [Member]
Changes in fair value for financial assets [Abstract]
Loans held for sale			(1,806)	(2,400)
Mortgage Loan Servicing, Net [Member]
Changes in fair value for financial assets [Abstract]
Capitalized mortgage loan servicing rights, net gains (losses)			$ 9,596	$ (581)

XML

Fair Value Disclosures, Reconciliation for all Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) (Details) - Capitalized Mortgage Loan Servicing Rights [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Reconciliation for all assets and (liabilities) measured at fair value on a recurring basis using significant unobservable inputs (Level 3) [Roll Forward]
Beginning balance	$ 35,933	$ 23,530	$ 26,232	$ 16,904
Total gains (losses) realized and unrealized [Abstract]
Included in results of operations	2,038	(3,838)	9,596	(581)
Included in other comprehensive loss	0	0	0	0
Purchases, issuances, settlements, maturities and calls	1,506	2,739	3,649	6,108
Transfers in and/or out of Level 3	0	0	0	0
Ending balance	39,477	22,431	39,477	22,431
Amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at June 30	$ 2,038	$ (3,838)	$ 9,596	$ (581)

XML

Fair Value Disclosures, Quantitative Information About Level 3 (Details) $ in Thousands		Jun. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Installment [Member]
Asset Fair Value [Abstract]
Collateral dependent loans fair value		$ 200	$ 170
Recurring Basis [Member] | Capitalized Mortgage Loan Servicing Rights [Member] | Significant Un-observable Inputs (Level 3) [Member]
Asset Fair Value [Abstract]
Servicing asset fair value		$ 39,477	$ 26,232
Recurring Basis [Member] | Capitalized Mortgage Loan Servicing Rights [Member] | Present Value of Net Servicing Revenue [Member] | Significant Un-observable Inputs (Level 3) [Member] | Float Rate [Member]
Ranges and Weighted Average [Abstract]
Servicing asset measurement input		0.0308	0.0136
Recurring Basis [Member] | Capitalized Mortgage Loan Servicing Rights [Member] | Minimum [Member] | Significant Un-observable Inputs (Level 3) [Member] | Cost to Service [Member]
Ranges and Weighted Average [Abstract]
Servicing asset measurement input		67	67
Recurring Basis [Member] | Capitalized Mortgage Loan Servicing Rights [Member] | Minimum [Member] | Significant Un-observable Inputs (Level 3) [Member] | Ancillary Income [Member]
Ranges and Weighted Average [Abstract]
Servicing asset measurement input		20	20
Recurring Basis [Member] | Capitalized Mortgage Loan Servicing Rights [Member] | Minimum [Member] | Present Value of Net Servicing Revenue [Member] | Significant Un-observable Inputs (Level 3) [Member] | Discount Rate [Member]
Ranges and Weighted Average [Abstract]
Servicing asset measurement input		0.0999	0.1000
Recurring Basis [Member] | Capitalized Mortgage Loan Servicing Rights [Member] | Minimum [Member] | Present Value of Net Servicing Revenue [Member] | Significant Un-observable Inputs (Level 3) [Member] | Prepayment Rate [Member]
Ranges and Weighted Average [Abstract]
Servicing asset measurement input		0.0704	0.0702
Recurring Basis [Member] | Capitalized Mortgage Loan Servicing Rights [Member] | Maximum [Member] | Significant Un-observable Inputs (Level 3) [Member] | Cost to Service [Member]
Ranges and Weighted Average [Abstract]
Servicing asset measurement input		194	281
Recurring Basis [Member] | Capitalized Mortgage Loan Servicing Rights [Member] | Maximum [Member] | Significant Un-observable Inputs (Level 3) [Member] | Ancillary Income [Member]
Ranges and Weighted Average [Abstract]
Servicing asset measurement input		35	30
Recurring Basis [Member] | Capitalized Mortgage Loan Servicing Rights [Member] | Maximum [Member] | Present Value of Net Servicing Revenue [Member] | Significant Un-observable Inputs (Level 3) [Member] | Discount Rate [Member]
Ranges and Weighted Average [Abstract]
Servicing asset measurement input		0.1411	0.1300
Recurring Basis [Member] | Capitalized Mortgage Loan Servicing Rights [Member] | Maximum [Member] | Present Value of Net Servicing Revenue [Member] | Significant Un-observable Inputs (Level 3) [Member] | Prepayment Rate [Member]
Ranges and Weighted Average [Abstract]
Servicing asset measurement input		0.3192	0.4421
Recurring Basis [Member] | Capitalized Mortgage Loan Servicing Rights [Member] | Weighted Average [Member] | Significant Un-observable Inputs (Level 3) [Member] | Cost to Service [Member]
Ranges and Weighted Average [Abstract]
Servicing asset measurement input		78	78
Recurring Basis [Member] | Capitalized Mortgage Loan Servicing Rights [Member] | Weighted Average [Member] | Significant Un-observable Inputs (Level 3) [Member] | Ancillary Income [Member]
Ranges and Weighted Average [Abstract]
Servicing asset measurement input		21	21
Recurring Basis [Member] | Capitalized Mortgage Loan Servicing Rights [Member] | Weighted Average [Member] | Present Value of Net Servicing Revenue [Member] | Significant Un-observable Inputs (Level 3) [Member] | Discount Rate [Member]
Ranges and Weighted Average [Abstract]
Servicing asset measurement input		0.1010	0.1007
Recurring Basis [Member] | Capitalized Mortgage Loan Servicing Rights [Member] | Weighted Average [Member] | Present Value of Net Servicing Revenue [Member] | Significant Un-observable Inputs (Level 3) [Member] | Float Rate [Member]
Ranges and Weighted Average [Abstract]
Servicing asset measurement input		0.0308	0.0136
Recurring Basis [Member] | Capitalized Mortgage Loan Servicing Rights [Member] | Weighted Average [Member] | Present Value of Net Servicing Revenue [Member] | Significant Un-observable Inputs (Level 3) [Member] | Prepayment Rate [Member]
Ranges and Weighted Average [Abstract]
Servicing asset measurement input		0.0790	0.1392
Nonrecurring Basis [Member] | Collateral Dependent Loans Commercial [Member] | Significant Un-observable Inputs (Level 3) [Member]
Asset Fair Value [Abstract]
Collateral dependent loans fair value		$ 287	$ 339
Nonrecurring Basis [Member] | Collateral Dependent Loans Commercial [Member] | Minimum [Member] | Sales Comparison Approach [Member] | Significant Un-observable Inputs (Level 3) [Member] | Adjustment for Differences Between Comparable Sales [Member]
Ranges and Weighted Average [Abstract]
Impaired loans measurement input		(0.125)	(0.125)
Nonrecurring Basis [Member] | Collateral Dependent Loans Commercial [Member] | Maximum [Member] | Sales Comparison Approach [Member] | Significant Un-observable Inputs (Level 3) [Member] | Adjustment for Differences Between Comparable Sales [Member]
Ranges and Weighted Average [Abstract]
Impaired loans measurement input		0.120	0.120
Nonrecurring Basis [Member] | Collateral Dependent Loans Commercial [Member] | Weighted Average [Member] | Sales Comparison Approach [Member] | Significant Un-observable Inputs (Level 3) [Member] | Adjustment for Differences Between Comparable Sales [Member]
Ranges and Weighted Average [Abstract]
Impaired loans measurement input		0.011	0.015
Nonrecurring Basis [Member] | Collateral Dependent Loans Mortgage and Installment [Member] | Significant Un-observable Inputs (Level 3) [Member]
Asset Fair Value [Abstract]
Collateral dependent loans fair value	[1]	$ 670	$ 1,017
Nonrecurring Basis [Member] | Collateral Dependent Loans Mortgage and Installment [Member] | Minimum [Member] | Sales Comparison Approach [Member] | Significant Un-observable Inputs (Level 3) [Member] | Adjustment for Differences Between Comparable Sales [Member]
Ranges and Weighted Average [Abstract]
Impaired loans measurement input	[1]	(0.255)	(0.301)
Nonrecurring Basis [Member] | Collateral Dependent Loans Mortgage and Installment [Member] | Maximum [Member] | Sales Comparison Approach [Member] | Significant Un-observable Inputs (Level 3) [Member] | Adjustment for Differences Between Comparable Sales [Member]
Ranges and Weighted Average [Abstract]
Impaired loans measurement input	[1]	0.205	0.293
Nonrecurring Basis [Member] | Collateral Dependent Loans Mortgage and Installment [Member] | Weighted Average [Member] | Sales Comparison Approach [Member] | Significant Un-observable Inputs (Level 3) [Member] | Adjustment for Differences Between Comparable Sales [Member]
Ranges and Weighted Average [Abstract]
Impaired loans measurement input	[1]	(0.017)	0.002

[1] In addition to the valuation techniques and unobservable inputs discussed above, at June 30, 2022 and December 31, 2021 certain collateral dependent installment loans totaling approximately $0.20 million and $0.17 million, respectively, are secured by collateral other than real estate.  For the majority of these loans, we apply internal discount rates to industry valuation guides.

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Fair Value Disclosures, Difference Between Aggregate Fair Value and Aggregate Remaining Contractual Principal (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Loans held for sale [Abstract]
Aggregate Fair Value	$ 31,400	$ 55,470
Difference	(755)	1,051
Contractual Principal	$ 32,155	$ 54,419

XML

Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands		Jun. 30, 2022	Dec. 31, 2021
Assets [Abstract]
Securities available for sale		$ 859,704	$ 1,412,830
Securities held to maturity		381,608	0
Federal Home Loan Bank and Federal Reserve Bank Stock		17,653	18,427
Liabilities [Abstract]
Other borrowings		25,507	30,009
Subordinated debt		39,395	39,357
Subordinated debentures		39,626	39,592
Reciprocal deposits included in deposits with no stated maturity		585,376	562,210
Reciprocal deposits included in deposits with stated maturity		29,828	24,416
Recorded Book Balance [Member]
Assets [Abstract]
Cash and due from banks		56,516	51,069
Interest bearing deposits		2,970	58,404
Securities available for sale		859,704	1,412,830
Securities held to maturity		381,608
Federal Home Loan Bank and Federal Reserve Bank Stock		17,653	18,427
Net loans and loans held for sale		3,242,367	2,948,074
Accrued interest receivable		13,923	12,865
Derivative financial instruments		27,417	12,283
Liabilities [Abstract]
Deposits with no stated maturity	[1]	3,904,324	3,781,298
Deposits with stated maturity	[1]	386,250	335,792
Other borrowings		25,507	30,009
Subordinated debt		39,395	39,357
Subordinated debentures		39,626	39,592
Accrued interest payable		588	497
Derivative financial instruments		14,997	5,961
Fair Value [Member]
Assets [Abstract]
Cash and due from banks		56,516	51,069
Interest bearing deposits		2,970	58,404
Securities available for sale		859,704	1,412,830
Securities held to maturity		359,701
Net loans and loans held for sale		2,991,614	2,931,079
Accrued interest receivable		13,923	12,865
Derivative financial instruments		27,417	12,283
Liabilities [Abstract]
Deposits with no stated maturity		3,904,324	3,781,298
Deposits with stated maturity		381,095	336,006
Other borrowings		25,506	30,155
Subordinated debt		42,464	44,999
Subordinated debentures		38,034	33,866
Accrued interest payable		588	497
Derivative financial instruments		14,997	5,961
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets [Abstract]
Cash and due from banks		56,516	51,069
Interest bearing deposits		2,970	58,404
Securities available for sale		0	0
Securities held to maturity		0
Net loans and loans held for sale		0	35,233
Accrued interest receivable		0	1
Derivative financial instruments		0	0
Liabilities [Abstract]
Deposits with no stated maturity		3,904,324	3,781,298
Deposits with stated maturity		0	0
Other borrowings		0	0
Subordinated debt		0	0
Subordinated debentures		0	0
Accrued interest payable		73	67
Derivative financial instruments		0	0
Significant Other Observable Inputs (Level 2) [Member]
Assets [Abstract]
Cash and due from banks		0	0
Interest bearing deposits		0	0
Securities available for sale		859,704	1,412,830
Securities held to maturity		359,701
Net loans and loans held for sale		31,400	55,470
Accrued interest receivable		6,228	6,028
Derivative financial instruments		27,417	12,283
Liabilities [Abstract]
Deposits with no stated maturity		0	0
Deposits with stated maturity		381,095	336,006
Other borrowings		25,506	30,155
Subordinated debt		42,464	44,999
Subordinated debentures		38,034	33,866
Accrued interest payable		515	430
Derivative financial instruments		14,997	5,961
Significant Unobservable Inputs (Level 3) [Member]
Assets [Abstract]
Cash and due from banks		0	0
Interest bearing deposits		0	0
Securities available for sale		0	0
Securities held to maturity		0
Net loans and loans held for sale		2,960,214	2,840,376
Accrued interest receivable		7,695	6,836
Derivative financial instruments		0	0
Liabilities [Abstract]
Deposits with no stated maturity		0	0
Deposits with stated maturity		0	0
Other borrowings		0	0
Subordinated debt		0	0
Subordinated debentures		0	0
Accrued interest payable		0	0
Derivative financial instruments		$ 0	$ 0

[1] Deposits with no stated maturity include reciprocal deposits with a recorded book balance of $585.376 million and $562.210 million at June 30, 2022 and December 31, 2021, respectively. Deposits with a stated maturity include reciprocal deposits with a recorded book balance of $29.828 million and $24.416 million at June 30, 2022 and December 31, 2021, respectively.

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Contingencies (Details) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2022 USD ($) shares	Jul. 18, 2022 USD ($) $ / shares
COVID-19 [Abstract]
Loans and leases receivable	$ 400.0
% of Total Loans	12.30%
VISA Class A Common Stock [Member]
Visa Stock [Abstract]
Current conversion ratio	1.6059
VISA Class A Common Stock [Member] | Subsequent Event [Member]
Visa Stock [Abstract]
Closing price (in dollars per share) | $ / shares		$ 207.21
VISA Class B Common Stock [Member]
Visa Stock [Abstract]
Number of shares owned (in shares) | shares	12,566
VISA Class B Common Stock [Member] | Subsequent Event [Member]
Visa Stock [Abstract]
Current value of shares owned		$ 4.2
Commercial and Industrial [Member]
COVID-19 [Abstract]
Loans and leases receivable	$ 159.0
% of Total Loans	4.90%
Commercial and Industrial [Member] | Retail [Member]
COVID-19 [Abstract]
Loans and leases receivable	$ 79.0
% of Total Loans	2.40%
Commercial and Industrial [Member] | Hotel [Member]
COVID-19 [Abstract]
Loans and leases receivable	$ 42.0
% of Total Loans	1.30%
Commercial and Industrial [Member] | Food Service [Member]
COVID-19 [Abstract]
Loans and leases receivable	$ 38.0
% of Total Loans	1.20%
Commercial Real Estate [Member]
COVID-19 [Abstract]
Loans and leases receivable	$ 241.0
% of Total Loans	7.40%
Commercial Real Estate [Member] | Retail [Member]
COVID-19 [Abstract]
Loans and leases receivable	$ 111.0
% of Total Loans	3.40%
Commercial Real Estate [Member] | Office [Member]
COVID-19 [Abstract]
Loans and leases receivable	$ 74.0
% of Total Loans	2.30%
Commercial Real Estate [Member] | Multifamily [Member]
COVID-19 [Abstract]
Loans and leases receivable	$ 56.0
% of Total Loans	1.70%

XML

Accumulated Other Comprehensive Income (Loss) ("AOCIL"), Summary of Changes (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Changes in AOCIL [Roll Forward]
Balance at beginning of period		$ 355,449	$ 387,329	$ 398,484	$ 389,522
Other comprehensive income (loss) before reclassifications		(30,317)	4,078	(85,287)	(2,727)
Amounts reclassified from AOCIL		(272)	0	(217)	1,119
Other comprehensive income (loss)		(30,589)	4,078	(85,504)	(1,608)
Balances at end of period		331,134	395,974	331,134	395,974
Accumulated Other Comprehensive Income (Loss) [Member]
Changes in AOCIL [Roll Forward]
Balance at beginning of period		(54,414)	4,338	501	10,024
Other comprehensive income (loss)		(30,589)	4,078	(85,504)	(1,608)
Balances at end of period		(85,003)	8,416	(85,003)	8,416
Unrealized Gains (Losses) on Securities AFS [Member]
Changes in AOCIL [Roll Forward]
Balance at beginning of period		(48,616)	10,136	6,299	15,822
Other comprehensive income (loss) before reclassifications		(10,447)	4,078	(65,417)	(2,727)
Amounts reclassified from AOCIL		(272)	0	(217)	1,119
Other comprehensive income (loss)		(10,719)	4,078	(65,634)	(1,608)
Balances at end of period		(59,335)	14,214	(59,335)	14,214
Unrealized Losses on Securities Transferred to Securities HTM [Member]
Changes in AOCIL [Roll Forward]
Balance at beginning of period	[1]	0	0	0	0
Other comprehensive income (loss) before reclassifications	[1]	(19,870)	0	(19,870)	0
Amounts reclassified from AOCIL	[1]	0	0	0	0
Other comprehensive income (loss)	[1]	(19,870)	0	(19,870)	0
Balances at end of period	[1]	(19,870)	0	(19,870)	0
Disproportionate Tax Effects from Securities AFS [Member]
Changes in AOCIL [Roll Forward]
Balance at beginning of period		(5,798)	(5,798)	(5,798)	(5,798)
Other comprehensive income (loss) before reclassifications		0	0	0	0
Amounts reclassified from AOCIL		0	0	0	0
Other comprehensive income (loss)		0	0	0	0
Balances at end of period		$ (5,798)	$ (5,798)	$ (5,798)	$ (5,798)

[1] Represents the remaining unrealized loss to be accreted on securities that were transferred from AFS to HTM on April 1, 2022.

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Accumulated Other Comprehensive Income (Loss) ("AOCIL"), Reclassification Out of Each Components (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Reclassifications out of AOCIL [Abstract]
Income tax expense	$ 2,879	$ 2,665	$ 6,984	$ 7,771
Reclassifications, net of tax	13,001	12,388	30,968	34,425
Accumulated Other Comprehensive Income (Loss) [Member]
Reclassifications out of AOCIL [Abstract]
Reclassifications, net of tax	0	0	0	0
Unrealized Gains (Losses) on Securities Available for Sale [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassifications out of AOCIL [Abstract]
Net gains (losses) on securities available for sale	(345)	0	(275)	1,416
Income tax expense	(73)	0	(58)	297
Reclassifications, net of tax	$ (272)	$ 0	$ (217)	$ 1,119

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Revenue from Contracts with Customers (Details) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2022 USD ($) Asset	Jun. 30, 2021 USD ($) Asset	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)
Revenue from Contracts with Customers [Abstract]
Percentage of revenues excluded from ASC Topic 606		83.40%	86.60%
Contract assets		$ 0		$ 0		$ 0
Contract liabilities		$ 0		0		$ 0
Number of real estate assets sold during the period | Asset		0	0
Disaggregation of Revenue Sources by Attributes [Abstract]
Revenue from contracts with customers		$ 7,825	$ 6,867	15,224	$ 12,976
Bank owned life insurance	[1]	105	127	243	266
Other	[1]	1,632	648	2,497	1,395
Total		3,044	1,871	5,407	3,901
Service Charges on Deposit Accounts [Member]
Disaggregation of Revenue Sources by Attributes [Abstract]
Revenue from contracts with customers		3,096	2,318	6,053	4,234
Overdraft Fees [Member] | Retail [Member]
Disaggregation of Revenue Sources by Attributes [Abstract]
Revenue from contracts with customers		2,499	1,835	5,005	3,047
Overdraft Fees [Member] | Business [Member]
Disaggregation of Revenue Sources by Attributes [Abstract]
Revenue from contracts with customers		145	152	275	344
Account Service Charges [Member] | Retail [Member]
Disaggregation of Revenue Sources by Attributes [Abstract]
Revenue from contracts with customers		452	331	773	843
Other Deposit Related Income [Member]
Disaggregation of Revenue Sources by Attributes [Abstract]
Revenue from contracts with customers		625	462	1,247	1,023
ATM Fees [Member] | Retail [Member]
Disaggregation of Revenue Sources by Attributes [Abstract]
Revenue from contracts with customers		310	213	587	481
ATM Fees [Member] | Business [Member]
Disaggregation of Revenue Sources by Attributes [Abstract]
Revenue from contracts with customers		7	4	14	10
Other [Member] | Retail [Member]
Disaggregation of Revenue Sources by Attributes [Abstract]
Revenue from contracts with customers		237	175	488	373
Other [Member] | Business [Member]
Disaggregation of Revenue Sources by Attributes [Abstract]
Revenue from contracts with customers		71	70	158	159
Interchange Income [Member]
Disaggregation of Revenue Sources by Attributes [Abstract]
Revenue from contracts with customers		3,422	3,453	6,504	6,502
Investment and Insurance Commissions [Member]
Disaggregation of Revenue Sources by Attributes [Abstract]
Revenue from contracts with customers		682	634	1,420	1,217
Asset Management Revenue [Member]
Disaggregation of Revenue Sources by Attributes [Abstract]
Revenue from contracts with customers		453	401	922	783
Transaction Based Revenue [Member]
Disaggregation of Revenue Sources by Attributes [Abstract]
Revenue from contracts with customers		$ 229	$ 233	$ 498	$ 434

[1] Excluded from the scope of ASC Topic 606.

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Leases (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Components of operating leases [Abstract]
Operating lease cost		$ 408	$ 412	$ 823	$ 835
Variable lease cost		25	15	41	31
Short-term lease cost		19	16	37	30
Total		452	$ 443	901	$ 896
Supplemental balance sheet information related to operating leases [Abstract]
Lease right of use asset	[1]	$ 5,959		$ 5,959		$ 6,481
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]		Other Assets		Other Assets		Other Assets
Lease liabilities	[2]	$ 6,062		$ 6,062		$ 6,602
Operating Lease, Liability, Statement of Financial Position [Extensible List]		Other Liabilities		Other Liabilities		Other Liabilities
Weighted average remaining lease term		6 years 3 months 21 days		6 years 3 months 21 days		6 years 6 months
Weighted average discount rate		2.30%		2.30%		2.30%
Maturities of lease liabilities [Abstract]
Six months ending December 31, 2022		$ 789		$ 789
2023		1,400		1,400
2024		871		871
2025		865		865
2026		801		801
2027 and thereafter		1,826		1,826
Total lease payments		6,552		6,552
Less imputed interest		(490)		(490)
Total	[2]	$ 6,062		$ 6,062		$ 6,602

[1] Included in Accrued income and other assets in our Condensed Consolidated Statements of Financial Condition.

[2] Included in Accrued expenses and other liabilities in our Condensed Consolidated Statements of Financial Condition.