Quarterly Report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 |
Transition report pursuant to Section 13 or 15 (d) of the Exchange Act |
(State or other jurisdiction of | (I.R.S. Employer Identification No.) | |||||||
incorporation or organization) | ||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Large accelerated filer | ☐ | Accelerated filer | ☐ | ||||||||
| ☒ | Smaller reporting company | |||||||||
Emerging growth company |
Page | ||||||||
Number | ||||||||
June 30, | December 31, | |||||||||||||
(In Thousands, Except Share And Per Share Data) | 2023 | 2022 | ||||||||||||
ASSETS: | ||||||||||||||
Noninterest-bearing balances | $ | $ | ||||||||||||
Interest-bearing balances in other financial institutions | ||||||||||||||
Total cash and cash equivalents | ||||||||||||||
Investment debt securities, available for sale, at fair value | ||||||||||||||
Investment equity securities, at fair value | ||||||||||||||
Restricted investment in bank stock | ||||||||||||||
Loans held for sale | ||||||||||||||
Loans | ||||||||||||||
Allowance for credit losses | ( | ( | ||||||||||||
Loans, net | ||||||||||||||
Premises and equipment, net | ||||||||||||||
Accrued interest receivable | ||||||||||||||
Bank-owned life insurance | ||||||||||||||
Investment in limited partnerships | ||||||||||||||
Goodwill | ||||||||||||||
Intangibles | ||||||||||||||
Operating lease right-of-use asset | ||||||||||||||
Deferred tax asset | ||||||||||||||
Other assets | ||||||||||||||
TOTAL ASSETS | $ | $ | ||||||||||||
LIABILITIES: | ||||||||||||||
Interest-bearing deposits | $ | $ | ||||||||||||
Noninterest-bearing deposits | ||||||||||||||
Total deposits | ||||||||||||||
Short-term borrowings | ||||||||||||||
Long-term borrowings | ||||||||||||||
Accrued interest payable | ||||||||||||||
Operating lease liability | ||||||||||||||
Other liabilities | ||||||||||||||
TOTAL LIABILITIES | ||||||||||||||
SHAREHOLDERS’ EQUITY: | ||||||||||||||
Preferred stock, no par value, | ||||||||||||||
Common stock, par value $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive loss: | ||||||||||||||
Net unrealized loss on available for sale securities | ( | ( | ||||||||||||
Defined benefit plan | ( | ( | ||||||||||||
Treasury stock at cost, | ( | ( | ||||||||||||
TOTAL SHAREHOLDERS' EQUITY | ||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
(In Thousands, Except Share And Per Share Data) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
INTEREST AND DIVIDEND INCOME: | ||||||||||||||||||||||||||
Loans, including fees | $ | $ | $ | $ | ||||||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||||
Taxable | ||||||||||||||||||||||||||
Tax-exempt | ||||||||||||||||||||||||||
Dividend and other interest income | ||||||||||||||||||||||||||
TOTAL INTEREST AND DIVIDEND INCOME | ||||||||||||||||||||||||||
INTEREST EXPENSE: | ||||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||||
Short-term borrowings | ||||||||||||||||||||||||||
Long-term borrowings | ||||||||||||||||||||||||||
TOTAL INTEREST EXPENSE | ||||||||||||||||||||||||||
NET INTEREST INCOME | ||||||||||||||||||||||||||
(Recovery) provision losses on loans | ( | ( | ||||||||||||||||||||||||
(Recovery) provision for off balance sheet credit exposures | ( | ( | ||||||||||||||||||||||||
TOTAL (RECOVERY) PROVISION FOR CREDIT LOSSES | ( | ( | ||||||||||||||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | ||||||||||||||||||||||||||
NON-INTEREST INCOME: | ||||||||||||||||||||||||||
Service charges | ||||||||||||||||||||||||||
Net debt securities losses, available for sale | ( | ( | ( | ( | ||||||||||||||||||||||
Net equity securities (losses) gains | ( | ( | ( | |||||||||||||||||||||||
Bank-owned life insurance | ||||||||||||||||||||||||||
Gain on sale of loans | ||||||||||||||||||||||||||
Insurance commissions | ||||||||||||||||||||||||||
Brokerage commissions | ||||||||||||||||||||||||||
Loan broker commissions | ||||||||||||||||||||||||||
Debit card income | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
TOTAL NON-INTEREST INCOME | ||||||||||||||||||||||||||
NON-INTEREST EXPENSE: | ||||||||||||||||||||||||||
Salaries and employee benefits | ||||||||||||||||||||||||||
Occupancy | ||||||||||||||||||||||||||
Furniture and equipment | ||||||||||||||||||||||||||
Software amortization | ||||||||||||||||||||||||||
Pennsylvania shares tax | ||||||||||||||||||||||||||
Professional fees | ||||||||||||||||||||||||||
Federal Deposit Insurance Corporation deposit insurance | ||||||||||||||||||||||||||
Marketing | ||||||||||||||||||||||||||
Intangible amortization | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
TOTAL NON-INTEREST EXPENSE | ||||||||||||||||||||||||||
INCOME BEFORE INCOME TAX PROVISION | ||||||||||||||||||||||||||
INCOME TAX PROVISION | ||||||||||||||||||||||||||
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS' | $ | $ | $ | $ | ||||||||||||||||||||||
EARNINGS PER SHARE - BASIC | $ | $ | $ | $ | ||||||||||||||||||||||
EARNINGS PER SHARE - DILUTED | $ | $ | $ | $ | ||||||||||||||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC | ||||||||||||||||||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED | ||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Net Income | $ | $ | $ | $ | ||||||||||||||||||||||
Other comprehensive (loss) income: | ||||||||||||||||||||||||||
Net unrealized (loss) gain on available for sale securities | ( | ( | ( | |||||||||||||||||||||||
Tax effect | ( | |||||||||||||||||||||||||
Net realized loss on available for sale securities included in net income | ||||||||||||||||||||||||||
Tax effect | ( | ( | ( | ( | ||||||||||||||||||||||
Amortization of unrecognized pension loss | ||||||||||||||||||||||||||
Tax effect | ( | ( | ( | ( | ||||||||||||||||||||||
Total other comprehensive (loss) income | ( | ( | ( | |||||||||||||||||||||||
Comprehensive income (loss) | $ | $ | $ | $ | ( |
COMMON STOCK | ADDITIONAL PAID-IN CAPITAL | RETAINED EARNINGS | ACCUMULATED OTHER COMPREHENSIVE LOSS | TREASURY STOCK | TOTAL SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||||||||||||||||||
(In Thousands, Except Share And Per Share Data) | SHARES | AMOUNT | ||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Common shares issued for employee stock purchase plan | ||||||||||||||||||||||||||||||||||||||||||||
Director Compensation Plan | ||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2023 | $ | $ | $ | $ | ( | $ | ( | $ |
COMMON STOCK | ADDITIONAL PAID-IN CAPITAL | RETAINED EARNINGS | ACCUMULATED OTHER COMPREHENSIVE LOSS | TREASURY STOCK | TOTAL SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||||||||||||||||||
(In Thousands, Except Share And Per Share Data) | SHARES | AMOUNT | ||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||||||||||||||||||
Cash settlement of options | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Common shares issued for employee stock purchase plan | ||||||||||||||||||||||||||||||||||||||||||||
Director Compensation Plan | ||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ |
COMMON STOCK | ADDITIONAL PAID-IN CAPITAL | RETAINED EARNINGS | ACCUMULATED OTHER COMPREHENSIVE LOSS | TREASURY STOCK | TOTAL SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||||||||||||||||||
(In Thousands, Except Share And Per Share Data) | SHARES | AMOUNT | ||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Common shares issued for employee stock purchase plan | ||||||||||||||||||||||||||||||||||||||||||||
Director Compensation Plan | ||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2023 | $ | $ | $ | $ | ( | $ | ( | $ |
COMMON STOCK | ADDITIONAL PAID-IN CAPITAL | RETAINED EARNINGS | ACCUMULATED OTHER COMPREHENSIVE LOSS | TREASURY STOCK | TOTAL SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||||||||||||||||||
(In Thousands, Except Share And Per Share Data) | SHARES | AMOUNT | ||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||||||||||||||||||
Cash settlement of options | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Common shares issued for employee stock purchase plan | ||||||||||||||||||||||||||||||||||||||||||||
Director Compensation Plan | ||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock ( shares) | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ |
Six Months Ended June 30, | ||||||||||||||
(In Thousands) | 2023 | 2022 | ||||||||||||
OPERATING ACTIVITIES: | ||||||||||||||
Net Income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Write down of leasehold improvements | ||||||||||||||
Amortization of intangible assets | ||||||||||||||
(Recovery) provision for credit losses | ( | |||||||||||||
Stock based compensation | ||||||||||||||
Accretion and amortization of investment security discounts and premiums | ||||||||||||||
Net securities losses, available for sale | ||||||||||||||
Originations of loans held for sale | ( | ( | ||||||||||||
Proceeds of loans held for sale | ||||||||||||||
Gain on sale of loans | ( | ( | ||||||||||||
Net equity securities (gains) losses | ( | |||||||||||||
Security trades payable | ||||||||||||||
Earnings on bank-owned life insurance | ( | ( | ||||||||||||
Decrease (increase) in deferred tax asset | ( | |||||||||||||
Other, net | ( | |||||||||||||
Net cash provided by operating activities | ||||||||||||||
INVESTING ACTIVITIES: | ||||||||||||||
Proceeds from sales of available for sale securities | ||||||||||||||
Proceeds from calls and maturities of available for sale securities | ||||||||||||||
Purchases of available for sale securities | ( | ( | ||||||||||||
Net increase in loans | ( | ( | ||||||||||||
Acquisition of premises and equipment | ( | ( | ||||||||||||
Proceeds from the sale of premises and equipment | ||||||||||||||
Proceeds from the sale of foreclosed assets | ||||||||||||||
Purchase of bank-owned life insurance | ( | ( | ||||||||||||
Proceeds from bank-owned life insurance death benefit | ||||||||||||||
Investment in limited partnership | ( | |||||||||||||
Proceeds from redemption of regulatory stock | ||||||||||||||
Purchases of regulatory stock | ( | ( | ||||||||||||
Net cash used for investing activities | ( | ( | ||||||||||||
FINANCING ACTIVITIES: | ||||||||||||||
Net increase (decrease) in interest-bearing deposits | ( | |||||||||||||
Net (decrease) increase in noninterest-bearing deposits | ( | |||||||||||||
Proceeds from long-term borrowings | ||||||||||||||
Repayment of long-term borrowings | ( | ( | ||||||||||||
Net increase (decrease) in short-term borrowings | ( | |||||||||||||
Finance lease principal payments | ( | ( | ||||||||||||
Dividends paid | ( | ( | ||||||||||||
Issuance of common stock | ||||||||||||||
Purchases of treasury stock | ( | |||||||||||||
Net cash provided by (used for) financing activities | ( | |||||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | ( | |||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING | ||||||||||||||
CASH AND CASH EQUIVALENTS, ENDING | $ | $ |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||||||||
Interest paid | $ | $ | ||||||||||||
Income taxes paid | ||||||||||||||
Non-cash investing and financing activities: | ||||||||||||||
Transfer of loans to foreclosed real estate | ||||||||||||||
• | Loans aggregated into pools based on similar risk characteristics. |
• | The probability of default "PD" and loss given default rate "LGD" CECL model components are determined based on loss estimates driven by historical experience at the input level. |
• | The PD model component uses "through the economic cycle transition" matrices based on the Company's historical loan and transaction data across each pool of loans. |
• | The LGD model component calculates a lifetime LGD estimate across each pool of loans utilizing a nonparametric loss curve modeling approach. |
• | Reasonable and supportable forecasts are incorporated into the PD model component. |
• | Cash flow assumptions are established for each loan using maturity date, amortization schedule and interest rate. |
• | A constant prepayment rate is calculated for each loan pool in the CECL model. |
• | Pass: These loans do not currently pose undue credit risk and can range from the highest to average quality, depending on the degree of potential risk. |
• | Special Mention: These loans have a heightened credit risk, but not to the point of justifying a classification of Substandard. Loans in this category are currently acceptable, but are nevertheless potentially weak. |
• | Substandard or Lower: There exists a well-defined weakness or weaknesses that jeopardize the normal repayment of the debt. |
January 1, 2023 | ||||||||||||||||||||
(In Thousands) | Pre-adoption | Adoption impact | As Reported | |||||||||||||||||
Assets | ||||||||||||||||||||
ACL on loans | ||||||||||||||||||||
Commercial, financial, and agricultural | $ | $ | $ | |||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||
Residential | ( | |||||||||||||||||||
Commercial | ( | |||||||||||||||||||
Construction | ( | |||||||||||||||||||
Consumer automobile loans | ||||||||||||||||||||
Other consumer installment loans | ||||||||||||||||||||
Unallocated | ( | |||||||||||||||||||
Liabilities | ||||||||||||||||||||
ACL for unfunded commitments | ||||||||||||||||||||
$ | $ | ( | $ |
Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||||
(In Thousands) | Net Unrealized (Loss) Gain on Available for Sale Securities | Defined Benefit Plan | Total | Net Unrealized Gain (Loss) on Available for Sale Securities | Defined Benefit Plan | Total | ||||||||||||||||||||||||||||||||
Beginning balance | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||
Other comprehensive loss before reclassifications | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | ||||||||||||||||||||||||||||||||||||||
Net current-period other comprehensive (loss) income | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Ending balance | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( |
Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||||
(In Thousands) | Net Unrealized Gain (Loss) on Available for Sale Securities | Defined Benefit Plan | Total | Net Unrealized Gain (Loss) on Available for Sale Securities | Defined Benefit Plan | Total | ||||||||||||||||||||||||||||||||
Beginning balance | $ | ( | $ | ( | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | ||||||||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive gain | ||||||||||||||||||||||||||||||||||||||
Net current-period other comprehensive income (loss) | ( | ( | ||||||||||||||||||||||||||||||||||||
Ending balance | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( |
Details about Accumulated Other Comprehensive Loss Components | Amount Reclassified from Accumulated Other Comprehensive Loss | Affected Line Item in the Consolidated Statement of Income | ||||||||||||||||||
Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | |||||||||||||||||||
Net unrealized loss on available for sale securities | $ | ( | $ | ( | Net debt securities (losses) gains, available for sale | |||||||||||||||
Income tax effect | Income tax provision | |||||||||||||||||||
Total reclassifications for the period | $ | ( | $ | ( | ||||||||||||||||
Net unrecognized pension costs | $ | ( | $ | ( | Other non-interest expense | |||||||||||||||
Income tax effect | Income tax provision | |||||||||||||||||||
Total reclassifications for the period | $ | ( | $ | ( |
Details about Accumulated Other Comprehensive Loss Components | Amount Reclassified from Accumulated Other Comprehensive Loss | Affected Line Item in the Consolidated Statement of Income | ||||||||||||||||||
Six months ended June 30, 2023 | Six months ended June 30, 2022 | |||||||||||||||||||
Net unrealized losses on available for sale securities | $ | ( | $ | ( | Net debt securities losses, available for sale | |||||||||||||||
Income tax effect | Income tax provision | |||||||||||||||||||
Total reclassifications for the period | $ | ( | $ | ( | ||||||||||||||||
Net unrecognized pension costs | $ | ( | $ | ( | Other non-interest expense | |||||||||||||||
Income tax effect | Income tax provision | |||||||||||||||||||
Total reclassifications for the period | $ | ( | $ | ( |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Weighted average common shares issued | ||||||||||||||||||||||||||
Weighted average treasury stock shares | ( | ( | ( | ( | ||||||||||||||||||||||
Weighted average common shares outstanding - basic and diluted | ||||||||||||||||||||||||||
June 30, 2023 | ||||||||||||||||||||||||||
Gross | Gross | |||||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||||||||||||
(In Thousands) | Cost | Gains | Losses | Value | ||||||||||||||||||||||
Available for sale (AFS): | ||||||||||||||||||||||||||
U.S. Government and agency securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
Mortgage-backed securities | ( | |||||||||||||||||||||||||
State and political securities | ( | |||||||||||||||||||||||||
Other debt securities | ( | |||||||||||||||||||||||||
Total debt securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
Investment equity securities: | ||||||||||||||||||||||||||
Equity securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||
Gross | Gross | |||||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||||||||||||
(In Thousands) | Cost | Gains | Losses | Value | ||||||||||||||||||||||
Available for sale (AFS): | ||||||||||||||||||||||||||
U.S. Government and agency securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
Mortgage-backed securities | ( | |||||||||||||||||||||||||
State and political securities | ( | |||||||||||||||||||||||||
Other debt securities | ( | |||||||||||||||||||||||||
Total debt securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
Investment equity securities: | ||||||||||||||||||||||||||
Equity securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
June 30, 2023 | ||||||||||||||||||||||||||||||||||||||
Less than Twelve Months | Twelve Months or Greater | Total | ||||||||||||||||||||||||||||||||||||
Gross | Gross | Gross | ||||||||||||||||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||||||||||||||||
(In Thousands) | Value | Losses | Value | Losses | Value | Losses | ||||||||||||||||||||||||||||||||
Available for sale (AFS): | ||||||||||||||||||||||||||||||||||||||
U.S. Government and agency securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
Mortgage-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
State and political securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Other debt securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Total debt securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Less than Twelve Months | Twelve Months or Greater | Total | ||||||||||||||||||||||||||||||||||||
Gross | Gross | Gross | ||||||||||||||||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||||||||||||||||
(In Thousands) | Value | Losses | Value | Losses | Value | Losses | ||||||||||||||||||||||||||||||||
Available for sale (AFS): | ||||||||||||||||||||||||||||||||||||||
U.S. Government and agency securities | $ | $ | ( | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
Mortgage-backed securities | ( | ( | ||||||||||||||||||||||||||||||||||||
State and political securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Other debt securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Total debt securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
(In Thousands) | Amortized Cost | Fair Value | ||||||||||||
Due in one year or less | $ | $ | ||||||||||||
Due after one year to five years | ||||||||||||||
Due after five years to ten years | ||||||||||||||
Due after ten years | ||||||||||||||
Total | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Available for sale (AFS): | ||||||||||||||||||||||||||
Gross realized gains: | ||||||||||||||||||||||||||
State and political securities | $ | $ | $ | $ | ||||||||||||||||||||||
Gross realized losses: | ||||||||||||||||||||||||||
State and political securities | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Net (losses) gains recognized in equity securities during the period | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||
Less: Net gains realized on the sale of equity securities during the period | ||||||||||||||||||||||||||
Unrealized (losses) gains recognized in equity securities held at reporting date | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||
June 30, 2023 | ||||||||||||||||||||||||||
Past Due | Past Due 90 | |||||||||||||||||||||||||
30 To 89 | Days Or More | |||||||||||||||||||||||||
(In Thousands) | Days | Current | Total | & Still Accruing | ||||||||||||||||||||||
Commercial, financial, and agricultural | $ | $ | $ | $ | ||||||||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||
Consumer automobile loans | ||||||||||||||||||||||||||
Other consumer installment loans | ||||||||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||||||||
Net deferred loan fees and discounts | ||||||||||||||||||||||||||
Allowance for credit losses | ( | |||||||||||||||||||||||||
Loans, net | $ |
December 31, 2022 | ||||||||||||||||||||||||||||||||
Past Due | Past Due 90 | |||||||||||||||||||||||||||||||
30 To 89 | Days Or More | Non- | ||||||||||||||||||||||||||||||
(In Thousands) | Days | & Still Accruing | Accrual | Current | Total | |||||||||||||||||||||||||||
Commercial, financial, and agricultural | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Consumer automobile loans | ||||||||||||||||||||||||||||||||
Other consumer installment loans | ||||||||||||||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||||||||||
Net deferred loan fees and discounts | ||||||||||||||||||||||||||||||||
Allowance for loan losses | ( | |||||||||||||||||||||||||||||||
Loans, net | $ |
June 30, | ||||||||
(In Thousands) | 2023 | |||||||
ACL - loans | $ | |||||||
ACL - off balance sheet credit exposure | ||||||||
Total ACL | $ |
June 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Non-accrual Loans | ||||||||||||||||||||||||||
(In Thousands) | With a Related ACL | Without a Related ACL | Total | Total Non-accrual loans | ||||||||||||||||||||||
Commercial, financial, and agricultural | $ | $ | $ | $ | ||||||||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||
Consumer automobile | ||||||||||||||||||||||||||
Other consumer installment loans | ||||||||||||||||||||||||||
$ | $ | $ | $ |
December 31, 2022 | ||||||||||||||||||||
Recorded | Unpaid Principal | Related | ||||||||||||||||||
(In Thousands) | Investment | Balance | Allowance | |||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||
Commercial, financial, and agricultural | $ | $ | $ | — | ||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||
Residential | — | |||||||||||||||||||
Commercial | — | |||||||||||||||||||
Construction | — | |||||||||||||||||||
Consumer automobile loans | — | |||||||||||||||||||
Installment loans to individuals | — | |||||||||||||||||||
— | ||||||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||
Commercial, financial, and agricultural | ||||||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||
Residential | ||||||||||||||||||||
Commercial | ||||||||||||||||||||
Construction | ||||||||||||||||||||
Consumer automobile loans | ||||||||||||||||||||
Installment loans to individuals | ||||||||||||||||||||
Total: | ||||||||||||||||||||
Commercial, financial, and agricultural | ||||||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||
Residential | ||||||||||||||||||||
Commercial | ||||||||||||||||||||
Construction | ||||||||||||||||||||
Consumer automobile loans | ||||||||||||||||||||
Installment loans to individuals | ||||||||||||||||||||
$ | $ | $ |
(In Thousands) | Real estate | Other* | Unsecured** | Total | ||||||||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||||||||
Residential | $ | $ | $ | $ | ||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||||||||||||
Three Months Ended June 30, | ||||||||||||||||||||
2022 | ||||||||||||||||||||
(In Thousands) | Average Investment in Impaired Loans | Interest Income Recognized on an Accrual Basis on Impaired Loans | Interest Income Recognized on a Cash Basis on Impaired Loans | |||||||||||||||||
Commercial, financial, and agricultural | $ | $ | $ | |||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||
Residential | ||||||||||||||||||||
Commercial | ||||||||||||||||||||
Construction | ||||||||||||||||||||
Consumer automobile | ||||||||||||||||||||
Other consumer installment loans | ||||||||||||||||||||
$ | $ | $ |
Six Months Ended June 30, | ||||||||||||||||||||
2022 | ||||||||||||||||||||
(In Thousands) | Average Investment in Impaired Loans | Interest Income Recognized on an Accrual Basis on Impaired Loans | Interest Income Recognized on a Cash Basis on Impaired Loans | |||||||||||||||||
Commercial, financial, and agricultural | $ | $ | $ | |||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||
Residential | ||||||||||||||||||||
Commercial | ||||||||||||||||||||
Construction | ||||||||||||||||||||
Consumer automobile | ||||||||||||||||||||
Other consumer installment loans | ||||||||||||||||||||
$ | $ | $ |
June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving Loans | Revolving Loans Converted to Term | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial, financial, and agricultural | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard or Lower | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Current period gross write offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard or Lower | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Current period gross write offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard or Lower | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Current period gross write offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard or Lower | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Current period gross write offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer Automobile | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard or Lower | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Current period gross write offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Installment loans to individuals | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard or Lower | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Current period gross write offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Commercial, Financial, and Agricultural | Real Estate Mortgages | Consumer automobile | Other consumer installment loans | |||||||||||||||||||||||||||||||||||||||||
(In Thousands) | Residential | Commercial | Construction | Totals | ||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ |
Three Months Ended June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial, Financial, and Agricultural | Real Estate Mortgages | Consumer automobile | Other consumer installment | |||||||||||||||||||||||||||||||||||||||||||||||
(In Thousands) | Residential | Commercial | Construction | Unallocated | Totals | |||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||||||||||||||||
Provision | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance | $ | $ | $ | $ | $ | $ | $ | $ |
Three Months Ended June 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial, Financial, and Agricultural | Real Estate Mortgages | Consumer automobile | Other consumer installment | |||||||||||||||||||||||||||||||||||||||||||||||
(In Thousands) | Residential | Commercial | Construction | Unallocated | Totals | |||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||||||||||||||||
Provision | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance | $ | $ | $ | $ | $ | $ | $ | $ |
t | Six Months Ended June 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||
Commercial, Financial, and Agricultural | Real Estate Mortgages | Consumer automobile | Other consumer installment | |||||||||||||||||||||||||||||||||||||||||||||||
(In Thousands) | Residential | Commercial | Construction | Unallocated | Totals | |||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Impact of adopting ASC 326 | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||||||||||||||||
Provision | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance | $ | $ | $ | $ | $ | $ | $ | $ |
Six Months Ended June 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial, Financial, and Agricultural | Real Estate Mortgages | Consumer automobile | Other consumer installment | |||||||||||||||||||||||||||||||||||||||||||||||
(In Thousands) | Residential | Commercial | Construction | Unallocated | Totals | |||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||||||||||||||||
Provision | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance | $ | $ | $ | $ | $ | $ | $ | $ |
June 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Owners of residential rental properties | % | % | ||||||||||||
Owners of commercial rental properties | % | % |
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial, Financial, and Agricultural | Real Estate Mortgages | Consumer Automobile | Other consumer installment | Unallocated | ||||||||||||||||||||||||||||||||||||||||||||||
(In Thousands) | Residential | Commercial | Construction | Totals | ||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Loan Losses: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Collectively evaluated for impairment | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total ending allowance balance | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Collectively evaluated for impairment | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total ending loans balance | $ | $ | $ | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Interest cost | $ | $ | $ | $ | ||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | ||||||||||||||||||||||
Amortization of net loss | ||||||||||||||||||||||||||
Net periodic benefit | $ | ( | $ | ( | $ | ( | $ | ( |
(In Thousands) | June 30, 2023 | December 31, 2022 | ||||||||||||
Commitments to extend credit | $ | $ | ||||||||||||
Standby letters of credit | ||||||||||||||
Credit exposure from the sale of assets with recourse | ||||||||||||||
$ | $ | |||||||||||||
Allowance for credit losses | $ | $ |
Level I: | Quoted prices are available in active markets for identical assets or liabilities as of the reported date. | |||||||
Level II: | Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities include items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed. | |||||||
Level III: | Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. |
June 30, 2023 | ||||||||||||||||||||||||||
(In Thousands) | Level I | Level II | Level III | Total | ||||||||||||||||||||||
Assets measured on a recurring basis: | ||||||||||||||||||||||||||
Investment securities, available for sale: | ||||||||||||||||||||||||||
U.S. Government and agency securities | $ | $ | $ | $ | ||||||||||||||||||||||
Mortgage-backed securities | ||||||||||||||||||||||||||
State and political securities | ||||||||||||||||||||||||||
Other debt securities | ||||||||||||||||||||||||||
Investment equity securities: | ||||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||
(In Thousands) | Level I | Level II | Level III | Total | ||||||||||||||||||||||
Assets measured on a recurring basis: | ||||||||||||||||||||||||||
Investment securities, available for sale: | ||||||||||||||||||||||||||
U.S. Government and agency securities | $ | $ | $ | $ | ||||||||||||||||||||||
Mortgage-backed securities | ||||||||||||||||||||||||||
State and political securities | ||||||||||||||||||||||||||
Other debt securities | ||||||||||||||||||||||||||
Investment equity securities: | ||||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||
June 30, 2023 | ||||||||||||||||||||||||||
(In Thousands) | Level I | Level II | Level III | Total | ||||||||||||||||||||||
Assets measured on a non-recurring basis: | ||||||||||||||||||||||||||
Collateral dependent loans | $ | $ | $ | $ | ||||||||||||||||||||||
Other real estate owned | ||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||
(In Thousands) | Level I | Level II | Level III | Total | ||||||||||||||||||||||
Assets measured on a non-recurring basis: | ||||||||||||||||||||||||||
Impaired loans | $ | $ | $ | $ | ||||||||||||||||||||||
Other real estate owned | ||||||||||||||||||||||||||
June 30, 2023 | ||||||||||||||||||||||||||||||||
Quantitative Information About Level III Fair Value Measurements | ||||||||||||||||||||||||||||||||
(In Thousands) | Fair Value | Valuation Technique(s) | Unobservable Inputs | Range | Weighted Average | |||||||||||||||||||||||||||
Collateral dependent loans | $ | Appraisal of collateral (1) | Appraisal adjustments (1) | ( | ( | |||||||||||||||||||||||||||
Other real estate owned | $ | Appraisal of collateral (1) | Appraisal adjustments (1) | ( | ( |
December 31, 2022 | ||||||||||||||||||||||||||||||||
Quantitative Information About Level III Fair Value Measurements | ||||||||||||||||||||||||||||||||
(In Thousands) | Fair Value | Valuation Technique(s) | Unobservable Inputs | Range | Weighted Average | |||||||||||||||||||||||||||
Impaired loans | $ | Appraisal of collateral (1) | Appraisal adjustments (1) | ( | ||||||||||||||||||||||||||||
Other real estate owned | $ | Appraisal of collateral (1) | Appraisal adjustments (1) | ( | ( |
Carrying | Fair | Fair Value Measurements at June 30, 2023 | ||||||||||||||||||||||||||||||
(In Thousands) | Value | Value | Level I | Level II | Level III | |||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||
Loans held for sale (1) | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Loans, net | ||||||||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||
Time deposits & brokered deposits | ||||||||||||||||||||||||||||||||
Short-term borrowings | ||||||||||||||||||||||||||||||||
Long-term borrowings | ||||||||||||||||||||||||||||||||
Carrying | Fair | Fair Value Measurements at December 31, 2022 | ||||||||||||||||||||||||||||||
(In Thousands) | Value | Value | Level I | Level II | Level III | |||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||
Loans held for sale (1) | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Loans, net | ||||||||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||
Time deposits & brokered deposits | ||||||||||||||||||||||||||||||||
Short-term borrowings | ||||||||||||||||||||||||||||||||
Long-term borrowings | ||||||||||||||||||||||||||||||||
Stock Options Granted | ||||||||||||||||||||||||||||||||||||||||||||
Date | Shares | Forfeited | Cash Settlement | Outstanding | Strike Price | Vesting Period | Expiration | |||||||||||||||||||||||||||||||||||||
January 20, 2023 | $ | |||||||||||||||||||||||||||||||||||||||||||
January 20, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
January 18, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
January 18, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
April 9, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
April 9, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
March 11, 2020 | ||||||||||||||||||||||||||||||||||||||||||||
March 11, 2020 | ||||||||||||||||||||||||||||||||||||||||||||
March 15, 2019 | ( | |||||||||||||||||||||||||||||||||||||||||||
March 15, 2019 | ( | |||||||||||||||||||||||||||||||||||||||||||
August 27, 2015 | ( | ( |
June 30, 2023 | ||||||||||||||
Shares | Weighted Average Exercise Price | |||||||||||||
Outstanding, beginning of year | $ | |||||||||||||
Granted | ||||||||||||||
Forfeited | ||||||||||||||
Expired | ||||||||||||||
Outstanding, end of period | $ | |||||||||||||
Exercisable, end of period | $ | |||||||||||||
Six months ended June 30, | ||||||||
2023 | ||||||||
Risk-free interest rate | % | |||||||
Expected volatility | % | |||||||
Expected Annual dividend | $ | |||||||
Expected life | ||||||||
Weighted average grant date fair value per option | $ | |||||||
(Dollars in Thousands, Except Per Share Data) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
GAAP net income | $ | 4,171 | $ | 4,231 | $ | 8,829 | $ | 7,663 | ||||||||||||||||||
Net securities losses, net of tax | 31 | 43 | 62 | 91 | ||||||||||||||||||||||
Non-GAAP core earnings | $ | 4,202 | $ | 4,274 | $ | 8,891 | $ | 7,754 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
GAAP Return on average assets (ROA) | 0.80 | % | 0.88 | % | 0.86 | % | 0.80 | % | ||||||||||||||||||
Net securities losses, net of tax | — | % | 0.01 | % | 8 | — | % | 0.01 | % | |||||||||||||||||
Non-GAAP core ROA | 0.80 | % | 0.89 | % | 0.86 | % | 0.81 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
GAAP Return on average equity (ROE) | 9.53 | % | 10.15 | % | 10.37 | % | 9.20 | % | ||||||||||||||||||
Net securities losses, net of tax | 0.07 | % | 0.10 | % | 0.07 | % | 0.11 | % | ||||||||||||||||||
Non-GAAP core ROE | . | 9.60 | % | 10.25 | % | 10.44 | % | 9.31 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
GAAP Basic earnings per share (EPS) | $ | 0.59 | $ | 0.60 | $ | 1.25 | $ | 1.08 | ||||||||||||||||||
Net securities losses, net of tax | 0.01 | 0.01 | 0.01 | 0.02 | ||||||||||||||||||||||
Non-GAAP core operating EPS | $ | 0.60 | $ | 0.61 | $ | 1.26 | $ | 1.10 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
GAAP Diluted EPS | $ | 0.59 | $ | 0.60 | $ | 1.25 | $ | 1.08 | ||||||||||||||||||
Net securities losses, net of tax | 0.01 | 0.01 | 0.01 | 0.02 | ||||||||||||||||||||||
Non-GAAP diluted core EPS | $ | 0.60 | $ | 0.61 | $ | 1.26 | $ | 1.10 |
Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | Change | |||||||||||||||||||||||||||||||||||||||||||||
(In Thousands) | Amount | % Total | Amount | % Total | Amount | % | |||||||||||||||||||||||||||||||||||||||||
Loans including fees | $ | 19,846 | 90.65 | % | $ | 13,620 | 89.70 | % | $ | 6,226 | 45.71 | % | |||||||||||||||||||||||||||||||||||
Investment securities: | |||||||||||||||||||||||||||||||||||||||||||||||
Taxable | 1,287 | 5.88 | 864 | 5.69 | 423 | 48.96 | |||||||||||||||||||||||||||||||||||||||||
Tax-exempt | 118 | 0.54 | 194 | 1.28 | (76) | (39.18) | |||||||||||||||||||||||||||||||||||||||||
Dividend and other interest income | 642 | 2.93 | 506 | 3.33 | 136 | 26.88 | |||||||||||||||||||||||||||||||||||||||||
Total interest and dividend income | $ | 21,893 | 100.00 | % | $ | 15,184 | 100.00 | % | $ | 6,709 | 44.18 | % |
Six Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | Change | |||||||||||||||||||||||||||||||||||||||||||||
(In Thousands) | Amount | % Total | Amount | % Total | Amount | % | |||||||||||||||||||||||||||||||||||||||||
Loans including fees | $ | 37,851 | 90.65 | % | $ | 26,658 | 90.49 | % | $ | 11,193 | 41.99 | % | |||||||||||||||||||||||||||||||||||
Investment securities: | |||||||||||||||||||||||||||||||||||||||||||||||
Taxable | 2,505 | 6.00 | 1,601 | 5.43 | 904 | 56.46 | |||||||||||||||||||||||||||||||||||||||||
Tax-exempt | 296 | 0.71 | 358 | 1.22 | (62) | (17.32) | |||||||||||||||||||||||||||||||||||||||||
Dividend and other interest income | 1,105 | 2.64 | 842 | 2.86 | 263 | 31.24 | |||||||||||||||||||||||||||||||||||||||||
Total interest and dividend income | $ | 41,757 | 100.00 | % | $ | 29,459 | 100.00 | % | $ | 12,298 | 41.75 | % |
Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | Change | |||||||||||||||||||||||||||||||||||||||||||||
(In Thousands) | Amount | % Total | Amount | % Total | Amount | % | |||||||||||||||||||||||||||||||||||||||||
Deposits | $ | 4,851 | 57.02 | % | $ | 710 | 53.10 | % | $ | 4,141 | 583.24 | % | |||||||||||||||||||||||||||||||||||
Short-term borrowings | 2,232 | 26.24 | 2 | 0.15 | 2,230 | n/m | |||||||||||||||||||||||||||||||||||||||||
Long-term borrowings | 1,424 | 16.74 | 625 | 46.75 | 799 | 127.84 | |||||||||||||||||||||||||||||||||||||||||
Total interest expense | $ | 8,507 | 100.00 | % | $ | 1,337 | 100.00 | % | $ | 7,170 | 536.28 | % |
Six Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | Change | |||||||||||||||||||||||||||||||||||||||||||||
(In Thousands) | Amount | % Total | Amount | % Total | Amount | % | |||||||||||||||||||||||||||||||||||||||||
Deposits | $ | 8,223 | 58.43 | % | $ | 1,498 | 54.30 | % | $ | 6,725 | 448.93 | % | |||||||||||||||||||||||||||||||||||
Short-term borrowings | 3,672 | 26.09 | 3 | 0.11 | 3,669 | n/m | |||||||||||||||||||||||||||||||||||||||||
Long-term borrowings | 2,178 | 15.48 | 1,258 | 45.59 | 920 | 73.13 | |||||||||||||||||||||||||||||||||||||||||
Total interest expense | $ | 14,073 | 100.00 | % | $ | 2,759 | 100.00 | % | $ | 11,314 | 410.08 | % |
AVERAGE BALANCES AND INTEREST RATES | ||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||||
(In Thousands) | Average Balance (1) | Interest | Average Rate | Average Balance (1) | Interest | Average Rate | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||
Tax-exempt loans (3) | $ | 66,613 | $ | 461 | 2.78 | % | $ | 52,886 | $ | 331 | 2.51 | % | ||||||||||||||||||||||||||
All other loans | 1,672,111 | 19,482 | 4.67 | % | 1,394,631 | 13,358 | 3.84 | % | ||||||||||||||||||||||||||||||
Total loans (2) | 1,738,724 | 19,943 | 4.60 | % | 1,447,517 | 13,689 | 3.79 | % | ||||||||||||||||||||||||||||||
Federal funds sold | — | — | n/a | 48,352 | 154 | 1.28 | % | |||||||||||||||||||||||||||||||
Taxable securities | 190,862 | 1,807 | 3.84 | % | 154,484 | 1,048 | 2.75 | % | ||||||||||||||||||||||||||||||
Tax-exempt securities (3) | 23,310 | 150 | 2.61 | % | 45,824 | 245 | 2.17 | % | ||||||||||||||||||||||||||||||
Total securities | 214,172 | 1,957 | 3.71 | % | 200,308 | 1,293 | 2.62 | % | ||||||||||||||||||||||||||||||
Interest-bearing balances in other financial institutions | 9,961 | 122 | 4.91 | % | 102,172 | 168 | 0.66 | % | ||||||||||||||||||||||||||||||
Total interest-earning assets | 1,962,857 | 22,022 | 4.50 | % | 1,798,349 | 15,304 | 3.42 | % | ||||||||||||||||||||||||||||||
Other assets | 133,239 | 131,117 | ||||||||||||||||||||||||||||||||||||
Total assets | $ | 2,096,096 | $ | 1,929,466 | ||||||||||||||||||||||||||||||||||
Liabilities and shareholders’ equity: | ||||||||||||||||||||||||||||||||||||||
Savings | $ | 232,889 | 155 | 0.27 | % | $ | 248,063 | 24 | 0.04 | % | ||||||||||||||||||||||||||||
Super Now deposits | 271,438 | 913 | 1.35 | % | 388,002 | 239 | 0.25 | % | ||||||||||||||||||||||||||||||
Money market deposits | 293,682 | 1,665 | 2.27 | % | 304,636 | 210 | 0.28 | % | ||||||||||||||||||||||||||||||
Time deposits | 261,947 | 2,118 | 3.24 | % | 164,301 | 237 | 0.58 | % | ||||||||||||||||||||||||||||||
Total interest-bearing deposits | 1,059,956 | 4,851 | 1.84 | % | 1,105,002 | 710 | 0.26 | % | ||||||||||||||||||||||||||||||
Short-term borrowings | 169,723 | 2,232 | 5.27 | % | 5,636 | 2 | 0.14 | % | ||||||||||||||||||||||||||||||
Long-term borrowings | 182,719 | 1,424 | 3.13 | % | 112,901 | 625 | 2.22 | % | ||||||||||||||||||||||||||||||
Total borrowings | 352,442 | 3,656 | 4.16 | % | 118,537 | 627 | 2.12 | % | ||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 1,412,398 | 8,507 | 2.42 | % | 1,223,539 | 1,337 | 0.44 | % | ||||||||||||||||||||||||||||||
Demand deposits | 484,607 | 518,467 | ||||||||||||||||||||||||||||||||||||
Other liabilities | 24,059 | 20,708 | ||||||||||||||||||||||||||||||||||||
Shareholders’ equity | 175,032 | 166,752 | ||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 2,096,096 | $ | 1,929,466 | ||||||||||||||||||||||||||||||||||
Interest rate spread (3) | 2.08 | % | 2.98 | % | ||||||||||||||||||||||||||||||||||
Net interest income/margin (3) | $ | 13,515 | 2.77 | % | $ | 13,967 | 3.12 | % |
AVERAGE BALANCES AND INTEREST RATES | ||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||||
(In Thousands) | Average Balance (1) | Interest | Average Rate | Average Balance (1) | Interest | Average Rate | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||
Tax-exempt loans (3) | $ | 65,669 | $ | 909 | 2.79 | % | $ | 50,775 | $ | 639 | 2.54 | % | ||||||||||||||||||||||||||
All other loans | 1,636,798 | 37,133 | 4.57 | % | 1,372,810 | 26,153 | 3.84 | % | ||||||||||||||||||||||||||||||
Total loans (2) | 1,702,467 | 38,042 | 4.51 | % | 1,423,585 | 26,792 | 3.80 | % | ||||||||||||||||||||||||||||||
Federal funds sold | — | — | n/a | 49,171 | 247 | 1.01 | % | |||||||||||||||||||||||||||||||
Taxable securities | 186,168 | 3,386 | 3.67 | % | 149,489 | 1,968 | 2.67 | % | ||||||||||||||||||||||||||||||
Tax-exempt securities (3) | 28,409 | 375 | 2.66 | % | 43,416 | 453 | 2.12 | % | ||||||||||||||||||||||||||||||
Total securities | 214,577 | 3,761 | 3.53 | % | 192,905 | 2,421 | 2.54 | % | ||||||||||||||||||||||||||||||
Interest-bearing balances in other financial institutions | 9,985 | 224 | 4.52 | % | 129,704 | 228 | 0.35 | % | ||||||||||||||||||||||||||||||
Total interest-earning assets | 1,927,029 | 42,027 | 4.20 | % | 1,795,365 | 29,688 | 3.34 | % | ||||||||||||||||||||||||||||||
Other assets | 132,561 | 128,624 | ||||||||||||||||||||||||||||||||||||
Total assets | $ | 2,059,590 | $ | 1,923,989 | ||||||||||||||||||||||||||||||||||
Liabilities and shareholders’ equity: | ||||||||||||||||||||||||||||||||||||||
Savings | $ | 238,067 | 275 | 0.23 | % | $ | 244,528 | 46 | 0.04 | % | ||||||||||||||||||||||||||||
Super Now deposits | 318,669 | 1,852 | 1.17 | % | 379,496 | 434 | 0.23 | % | ||||||||||||||||||||||||||||||
Money market deposits | 291,719 | 2,945 | 2.04 | % | 301,744 | 396 | 0.26 | % | ||||||||||||||||||||||||||||||
Time deposits | 225,414 | 3,151 | 2.82 | % | 177,487 | 622 | 0.71 | % | ||||||||||||||||||||||||||||||
Total interest-bearing deposits | 1,073,869 | 8,223 | 1.54 | % | 1,103,255 | 1,498 | 0.27 | % | ||||||||||||||||||||||||||||||
Short-term borrowings | 145,871 | 3,672 | 5.09 | % | 5,416 | 3 | 0.11 | % | ||||||||||||||||||||||||||||||
Long-term borrowings | 151,169 | 2,178 | 2.91 | % | 114,077 | 1,258 | 2.23 | % | ||||||||||||||||||||||||||||||
Total borrowings | 297,040 | 5,850 | 3.98 | % | 119,493 | 1,261 | 2.13 | % | ||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 1,370,909 | 14,073 | 2.07 | % | 1,222,748 | 2,759 | 0.46 | % | ||||||||||||||||||||||||||||||
Demand deposits | 491,356 | 512,441 | ||||||||||||||||||||||||||||||||||||
Other liabilities | 27,050 | 22,184 | ||||||||||||||||||||||||||||||||||||
Shareholders’ equity | 170,275 | 166,616 | ||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 2,059,590 | $ | 1,923,989 | ||||||||||||||||||||||||||||||||||
Interest rate spread (3) | 2.13 | % | 2.88 | % | ||||||||||||||||||||||||||||||||||
Net interest income/margin (3) | $ | 27,954 | 2.92 | % | $ | 26,929 | 3.03 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Total interest income | $ | 21,893 | $ | 15,184 | $ | 41,757 | $ | 29,459 | ||||||||||||||||||
Total interest expense | 8,507 | 1,337 | 14,073 | 2,759 | ||||||||||||||||||||||
Net interest income (GAAP) | 13,386 | 13,847 | 27,684 | 26,700 | ||||||||||||||||||||||
Tax equivalent adjustment | 129 | 120 | 270 | 229 | ||||||||||||||||||||||
Net interest income (fully taxable equivalent) (NON-GAAP) | $ | 13,515 | $ | 13,967 | $ | 27,954 | $ | 26,929 |
Three Months Ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||||||||
2023 vs. 2022 | 2023 vs. 2022 | |||||||||||||||||||||||||||||||||||||
Increase (Decrease) Due to | Increase (Decrease) Due to | |||||||||||||||||||||||||||||||||||||
(In Thousands) | Volume | Rate | Net | Volume | Rate | Net | ||||||||||||||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||||||||||||||
Tax-exempt loans | $ | 92 | $ | 38 | $ | 130 | $ | 202 | $ | 68 | $ | 270 | ||||||||||||||||||||||||||
All other loans | 2,935 | 3,189 | 6,124 | 5,521 | 5,459 | 10,980 | ||||||||||||||||||||||||||||||||
Federal funds sold | (154) | — | (154) | (247) | — | (247) | ||||||||||||||||||||||||||||||||
Taxable investment securities | 283 | 476 | 759 | 562 | 856 | 1,418 | ||||||||||||||||||||||||||||||||
Tax-exempt investment securities | (138) | 43 | (95) | (179) | 101 | (78) | ||||||||||||||||||||||||||||||||
Interest bearing deposits | (272) | 226 | (46) | (1,497) | 1,493 | (4) | ||||||||||||||||||||||||||||||||
Total interest-earning assets | 2,746 | 3,972 | 6,718 | 4,362 | 7,977 | 12,339 | ||||||||||||||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||||||||||||
Savings deposits | (2) | 133 | 131 | (1) | 230 | 229 | ||||||||||||||||||||||||||||||||
Super Now deposits | (93) | 767 | 674 | (80) | 1,498 | 1,418 | ||||||||||||||||||||||||||||||||
Money market deposits | (8) | 1,463 | 1,455 | (13) | 2,562 | 2,549 | ||||||||||||||||||||||||||||||||
Time deposits | 216 | 1,665 | 1,881 | 211 | 2,318 | 2,529 | ||||||||||||||||||||||||||||||||
Short-term borrowings | 985 | 1,245 | 2,230 | 1,339 | 2,330 | 3,669 | ||||||||||||||||||||||||||||||||
Long-term borrowings | 480 | 319 | 799 | 474 | 446 | 920 | ||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 1,578 | 5,592 | 7,170 | 1,930 | 9,384 | 11,314 | ||||||||||||||||||||||||||||||||
Change in net interest income | $ | 1,168 | $ | (1,620) | $ | (452) | $ | 2,432 | $ | (1,407) | $ | 1,025 |
Total Nonperforming Loans | ||||||||||||||||||||
(In Thousands) | 90 Days Past Due | Non-accrual | Total | |||||||||||||||||
June 30, 2023 | $ | 1,120 | $ | 3,156 | $ | 4,276 | ||||||||||||||
March 31, 2023 | 1,215 | 3,551 | 4,766 | |||||||||||||||||
December 31, 2022 | 1,275 | 3,615 | 4,890 | |||||||||||||||||
September 30, 2022 | 1,161 | 4,582 | 5,743 | |||||||||||||||||
June 30, 2022 | 421 | 4,679 | 5,100 | |||||||||||||||||
June 30, 2023 | ||||||||||||||||||||||||||||||||||||||
Amount of Allowance for Credit Losses Allocated | Total loans | Allowance for Credit Losses to Total Loans Ratio | Net (Charge-Offs) Recoveries | Average Loans | Ratio of Net (Charge-Offs) Recoveries to Average Loans | |||||||||||||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||||||||||||||
Commercial, financial, and agricultural | $ | 3,019 | $ | 208,174 | 1.45 | % | $ | 961 | $ | 199,448 | 0.48 | % | ||||||||||||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||||||||||||||||||||
Residential | 1,078 | 743,705 | 0.14 | % | (78) | 724,170 | (0.01) | % | ||||||||||||||||||||||||||||||
Commercial | 4,191 | 517,713 | 0.81 | % | (114) | 509,033 | (0.02) | % | ||||||||||||||||||||||||||||||
Construction | 178 | 53,486 | 0.33 | % | — | 46,540 | — | % | ||||||||||||||||||||||||||||||
Consumer automobiles | 2,446 | 234,956 | 1.04 | % | (291) | 213,039 | (0.14) | % | ||||||||||||||||||||||||||||||
Other consumer installment loans | 680 | 10,121 | 6.72 | % | (129) | 10,237 | (1.26) | % | ||||||||||||||||||||||||||||||
$ | 11,592 | $ | 1,768,155 | 0.66 | % | $ | 349 | $ | 1,702,467 | 0.02 | % | |||||||||||||||||||||||||||
Total non-accrual loans outstanding | $ | 3,156 | ||||||||||||||||||||||||||||||||||||
Non-accrual loans to total loans outstanding | 0.18 | % | ||||||||||||||||||||||||||||||||||||
Allowance for credit losses to non-accrual loans | 367.30 | % |
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Amount of Allowance for Loan Losses Allocated | Total loans | Allowance for Loan Losses to Total Loans Ratio | Net (Charge-Offs) Recoveries | Average Loans | Ratio of Net (Charge-Offs) Recoveries to Average Loans | |||||||||||||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||||||||||||||
Commercial, financial, and agricultural | $ | 1,914 | $ | 190,461 | 1.00 | % | $ | 165 | $ | 173,433 | 0.10 | % | ||||||||||||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||||||||||||||||||||
Residential | 5,061 | 708,209 | 0.71 | % | 26 | 649,989 | — | % | ||||||||||||||||||||||||||||||
Commercial | 6,110 | 500,632 | 1.22 | % | (150) | 466,526 | (0.03) | % | ||||||||||||||||||||||||||||||
Construction | 188 | 43,308 | 0.43 | % | 29 | 44,968 | 0.06 | % | ||||||||||||||||||||||||||||||
Consumer automobiles | 1,617 | 186,112 | 0.87 | % | (328) | 150,261 | (0.22) | % | ||||||||||||||||||||||||||||||
Other consumer installment loans | 109 | 10,361 | 1.05 | % | (191) | 9,737 | (1.96) | % | ||||||||||||||||||||||||||||||
Unallocated | 638 | |||||||||||||||||||||||||||||||||||||
$ | 15,637 | $ | 1,639,083 | 0.95 | % | $ | (449) | $ | 1,494,914 | (0.03) | % | |||||||||||||||||||||||||||
Total non-accrual loans outstanding | $ | 3,615 | ||||||||||||||||||||||||||||||||||||
Non-accrual loans to total loans outstanding | 0.22 | % | ||||||||||||||||||||||||||||||||||||
Allowance for loan losses to non-accrual loans | 432.56 | % |
Three Months Ended | ||||||||||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | Change | ||||||||||||||||||||||||||||||||||||
(In Thousands) | Amount | % Total | Amount | % Total | Amount | % | ||||||||||||||||||||||||||||||||
Service charges | $ | 516 | 25.52 | % | $ | 509 | 23.82 | % | $ | 7 | 1.38 | % | ||||||||||||||||||||||||||
Net debt securities losses, available for sale | (19) | (0.94) | (10) | (0.47) | (9) | (90.00) | ||||||||||||||||||||||||||||||||
Net equity securities losses | (20) | (0.99) | (44) | (2.06) | 24 | 54.55 | ||||||||||||||||||||||||||||||||
Bank-owned life insurance | 166 | 8.21 | 161 | 7.53 | 5 | 3.11 | ||||||||||||||||||||||||||||||||
Gain on sale of loans | 244 | 12.07 | 266 | 12.45 | (22) | (8.27) | ||||||||||||||||||||||||||||||||
Insurance commissions | 115 | 5.69 | 107 | 5.01 | 8 | 7.48 | ||||||||||||||||||||||||||||||||
Brokerage commissions | 141 | 6.97 | 158 | 7.39 | (17) | (10.76) | ||||||||||||||||||||||||||||||||
Loan broker commissions | 317 | 15.68 | 371 | 17.36 | (54) | (14.56) | ||||||||||||||||||||||||||||||||
Debit card income | 340 | 16.82 | 391 | 18.30 | (51) | (13.04) | ||||||||||||||||||||||||||||||||
Other | 222 | 10.97 | 228 | 10.66 | (6) | (2.63) | ||||||||||||||||||||||||||||||||
Total non-interest income | $ | 2,022 | 100.00 | % | $ | 2,137 | 100.00 | % | $ | (115) | (5.38) | % |
Six Months Ended | ||||||||||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | Change | ||||||||||||||||||||||||||||||||||||
(In Thousands) | Amount | % Total | Amount | % Total | Amount | % | ||||||||||||||||||||||||||||||||
Service charges | $ | 1,012 | 23.65 | % | $ | 1,004 | 22.07 | % | $ | 8 | 0.80 | % | ||||||||||||||||||||||||||
Net debt securities losses, available for sale | (80) | (1.87) | (12) | (0.26) | (68) | (566.67) | ||||||||||||||||||||||||||||||||
Net equity securities (losses) gains | 1 | 0.02 | (103) | (2.26) | 104 | 100.97 | ||||||||||||||||||||||||||||||||
Bank-owned life insurance | 722 | 16.87 | 331 | 7.28 | 391 | 118.13 | ||||||||||||||||||||||||||||||||
Gain on sale of loans | 475 | 11.10 | 611 | 13.43 | (136) | (22.26) | ||||||||||||||||||||||||||||||||
Insurance commissions | 280 | 6.54 | 277 | 6.09 | 3 | 1.08 | ||||||||||||||||||||||||||||||||
Brokerage commissions | 306 | 7.15 | 358 | 7.87 | (52) | (14.53) | ||||||||||||||||||||||||||||||||
Loan broker commissions | 487 | 11.38 | 912 | 20.05 | (425) | (46.60) | ||||||||||||||||||||||||||||||||
Debit card income | 675 | 15.77 | 736 | 16.18 | (61) | (8.29) | ||||||||||||||||||||||||||||||||
Other | 401 | 9.39 | 435 | 9.55 | (34) | (7.82) | ||||||||||||||||||||||||||||||||
Total non-interest income | $ | 4,279 | 100.00 | % | $ | 4,549 | 100.00 | % | $ | (270) | (5.94) | % |
Three Months Ended | ||||||||||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | Change | ||||||||||||||||||||||||||||||||||||
(In Thousands) | Amount | % Total | Amount | % Total | Amount | % | ||||||||||||||||||||||||||||||||
Salaries and employee benefits | $ | 6,312 | 55.23 | % | $ | 6,141 | 58.93 | % | $ | 171 | 2.78 | % | ||||||||||||||||||||||||||
Occupancy | 772 | 6.75 | 740 | 7.10 | 32 | 4.32 | ||||||||||||||||||||||||||||||||
Furniture and equipment | 790 | 6.91 | 746 | 7.16 | 44 | 5.90 | ||||||||||||||||||||||||||||||||
Software amortization | 173 | 1.51 | 219 | 2.10 | (46) | (21.00) | ||||||||||||||||||||||||||||||||
Pennsylvania shares tax | 279 | 2.44 | 396 | 3.80 | (117) | (29.55) | ||||||||||||||||||||||||||||||||
Professional fees | 906 | 7.93 | 582 | 5.59 | 324 | 55.67 | ||||||||||||||||||||||||||||||||
Federal Deposit Insurance Corporation deposit insurance | 452 | 3.95 | 228 | 2.19 | 224 | 98.25 | ||||||||||||||||||||||||||||||||
Marketing | 272 | 2.38 | 220 | 2.11 | 52 | 23.64 | ||||||||||||||||||||||||||||||||
Intangible amortization | 32 | 0.28 | 41 | 0.39 | (9) | (21.95) | ||||||||||||||||||||||||||||||||
Other | 1,441 | 12.62 | 1,107 | 10.63 | 334 | 30.17 | ||||||||||||||||||||||||||||||||
Total non-interest expense | $ | 11,429 | 100.00 | % | $ | 10,420 | 100.00 | % | $ | 1,009 | 9.68 | % |
Six Months Ended | ||||||||||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | Change | ||||||||||||||||||||||||||||||||||||
(In Thousands) | Amount | % Total | Amount | % Total | Amount | % | ||||||||||||||||||||||||||||||||
Salaries and employee benefits | $ | 12,488 | 55.93 | % | $ | 12,405 | 57.89 | % | $ | 83 | 0.67 | % | ||||||||||||||||||||||||||
Occupancy | 1,638 | 7.34 | 1,650 | 7.70 | (12) | (0.73) | ||||||||||||||||||||||||||||||||
Furniture and equipment | 1,636 | 7.33 | 1,638 | 7.64 | (2) | (0.12) | ||||||||||||||||||||||||||||||||
Software amortization | 356 | 1.59 | 472 | 2.20 | (116) | (24.58) | ||||||||||||||||||||||||||||||||
Pennsylvania shares tax | 527 | 2.36 | 785 | 3.66 | (258) | (32.87) | ||||||||||||||||||||||||||||||||
Professional fees | 1,594 | 7.14 | 1,120 | 5.23 | 474 | 42.32 | ||||||||||||||||||||||||||||||||
Federal Deposit Insurance Corporation deposit insurance | 697 | 3.12 | 430 | 2.01 | 267 | 62.09 | ||||||||||||||||||||||||||||||||
Marketing | 427 | 1.91 | 284 | 1.33 | 143 | 50.35 | ||||||||||||||||||||||||||||||||
Intangible amortization | 67 | 0.30 | 85 | 0.40 | (18) | (21.18) | ||||||||||||||||||||||||||||||||
Other | 2,897 | 12.98 | 2,558 | 11.94 | 339 | 13.25 | ||||||||||||||||||||||||||||||||
Total non-interest expense | $ | 22,327 | 100.00 | % | $ | 21,427 | 100.00 | % | $ | 900 | 4.20 | % |
June 30, 2023 | December 31, 2022 | Change | ||||||||||||||||||||||||||||||||||||
(In Thousands) | Amount | % Total | Amount | % Total | Amount | % | ||||||||||||||||||||||||||||||||
Commercial, financial, and agricultural | $ | 208,174 | 11.77 | % | $ | 190,461 | 11.62 | % | $ | 17,713 | 9.30 | % | ||||||||||||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||||||||||||||||||||
Residential | 743,705 | 42.03 | 708,209 | 43.19 | 35,496 | 5.01 | % | |||||||||||||||||||||||||||||||
Commercial | 517,713 | 29.26 | 500,632 | 30.53 | 17,081 | 3.41 | % | |||||||||||||||||||||||||||||||
Construction | 53,486 | 3.02 | 43,308 | 2.64 | 10,178 | 23.50 | % | |||||||||||||||||||||||||||||||
Consumer automobile loans | 234,956 | 13.28 | 186,112 | 11.35 | 48,844 | 26.24 | % | |||||||||||||||||||||||||||||||
Other consumer installment loans | 10,121 | 0.57 | 10,361 | 0.63 | (240) | (2.32) | % | |||||||||||||||||||||||||||||||
Net deferred loan fees and discounts | 1,248 | 0.07 | 648 | 0.04 | 600 | 92.59 | % | |||||||||||||||||||||||||||||||
Gross loans | $ | 1,769,403 | 100.00 | % | $ | 1,639,731 | 100.00 | % | $ | 129,672 | 7.91 | % |
A- to AAA | B- to BBB+ | C- to CCC+ | Not Rated | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In Thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Available for sale (AFS): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Government and agency securities | $ | 1,503 | $ | 1,467 | $ | — | $ | — | $ | — | $ | — | $ | 2,498 | $ | 2,418 | $ | 4,001 | $ | 3,885 | ||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | 9,710 | 7 | 9,330 | — | — | — | — | — | — | 9,710 | 9,330 | |||||||||||||||||||||||||||||||||||||||||||||||||||
State and political securities | 131,164 | 123,481 | — | — | — | — | 4,087 | 3,998 | 135,251 | 127,479 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other debt securities | 24,808 | 23,051 | 6,328 | 5,585 | — | — | 18,873 | 17,296 | 50,009 | 45,932 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total debt securities AFS | $ | 167,185 | $ | 157,329 | $ | 6,328 | $ | 5,585 | $ | — | $ | — | $ | 25,458 | $ | 23,712 | $ | 198,971 | $ | 186,626 | ||||||||||||||||||||||||||||||||||||||||||
June 30, 2023 | December 31, 2022 | Change | ||||||||||||||||||||||||||||||||||||
(In Thousands) | Amount | % Total | Amount | % Total | Amount | % | ||||||||||||||||||||||||||||||||
Demand deposits | $ | 475,937 | 30.63 | % | $ | 519,063 | 33.35 | % | $ | (43,126) | (8.31) | % | ||||||||||||||||||||||||||
NOW accounts | 238,353 | 15.34 | 372,574 | 23.94 | (134,221) | (36.03) | ||||||||||||||||||||||||||||||||
Money market deposits | 296,957 | 19.11 | 270,589 | 17.38 | 26,368 | 9.74 | ||||||||||||||||||||||||||||||||
Savings deposits | 229,108 | 14.75 | 247,952 | 15.93 | (18,844) | (7.60) | ||||||||||||||||||||||||||||||||
Time deposits | 226,224 | 14.56 | 137,949 | 8.86 | 88,275 | 63.99 | ||||||||||||||||||||||||||||||||
Brokered deposits | 87,178 | 5.61 | 8,333 | 0.54 | 78,845 | 5.07 | ||||||||||||||||||||||||||||||||
Total deposits | $ | 1,553,757 | 100.00 | % | $ | 1,556,460 | 100.00 | % | $ | (2,703) | (0.17) | % | ||||||||||||||||||||||||||
June 30, 2023 | December 31, 2022 | Change | ||||||||||||||||||||||||||||||||||||
(In Thousands) | Amount | % Total | Amount | % Total | Amount | % | ||||||||||||||||||||||||||||||||
Short-term borrowings: | ||||||||||||||||||||||||||||||||||||||
FHLB repurchase agreements | $ | 125,621 | 32.79 | % | $ | 148,195 | 57.86 | % | $ | (22,574) | (15.23) | |||||||||||||||||||||||||||
Short-term FHLB borrowings | 50,000 | 13.05 | — | — | 50,000 | n/a | ||||||||||||||||||||||||||||||||
Securities sold under agreement to repurchase | 4,789 | 1.25 | 5,154 | 2.01 | (365) | (7.08) | ||||||||||||||||||||||||||||||||
Total short-term borrowings | 180,410 | 47.09 | 153,349 | 59.87 | 27,061 | 17.65 | ||||||||||||||||||||||||||||||||
Long-term borrowings: | ||||||||||||||||||||||||||||||||||||||
Long-term FHLB borrowings | 195,000 | 50.89 | 95,000 | 37.09 | 100,000 | 105.26 | ||||||||||||||||||||||||||||||||
Long-term finance lease | 7,692 | 2.01 | 7,783 | 3.04 | (91) | (1.17) | ||||||||||||||||||||||||||||||||
Total long-term borrowings | 202,692 | 52.91 | 102,783 | 40.13 | 99,909 | 97.20 | ||||||||||||||||||||||||||||||||
Total borrowed funds | $ | 383,102 | 100.00 | % | $ | 256,132 | 100.00 | % | $ | 126,970 | 49.57 | % |
Remaining Contractual Maturity Overnight and Continuous | ||||||||||||||
(In Thousands) | June 30, 2023 | December 31, 2022 | ||||||||||||
Investment debt securities pledged, fair value | $ | 7,285 | $ | 7,165 | ||||||||||
Repurchase agreements | 4,789 | 5,154 | ||||||||||||
June 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
(In Thousands) | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||
Common Equity Tier I Capital (to Risk-weighted Assets) | ||||||||||||||||||||||||||
Actual | $ | 172,025 | 9.695 | % | $ | 165,346 | 9.973 | % | ||||||||||||||||||
For Capital Adequacy Purposes | 79,847 | 4.500 | 74,607 | 4.500 | ||||||||||||||||||||||
Minimum To Maintain Capital Conservation Buffer At Reporting Date | 124,206 | 7.000 | 116,056 | 7.000 | ||||||||||||||||||||||
To Be Well Capitalized | 115,334 | 6.500 | 107,766 | 6.500 | ||||||||||||||||||||||
Total Capital (to Risk-weighted Assets) | ||||||||||||||||||||||||||
Actual | $ | 184,983 | 10.425 | % | $ | 181,127 | 10.925 | % | ||||||||||||||||||
For Capital Adequacy Purposes | 141,953 | 8.000 | 132,633 | 8.000 | ||||||||||||||||||||||
Minimum To Maintain Capital Conservation Buffer At Reporting Date | 186,314 | 10.500 | 174,081 | 10.500 | ||||||||||||||||||||||
To Be Well Capitalized | 177,442 | 10.000 | 165,791 | 10.000 | ||||||||||||||||||||||
Tier I Capital (to Risk-weighted Assets) | ||||||||||||||||||||||||||
Actual | $ | 172,025 | 9.695 | % | $ | 165,346 | 9.973 | % | ||||||||||||||||||
For Capital Adequacy Purposes | 106,462 | 6.000 | 99,476 | 6.000 | ||||||||||||||||||||||
Minimum To Maintain Capital Conservation Buffer At Reporting Date | 150,821 | 8.500 | 140,925 | 8.500 | ||||||||||||||||||||||
To Be Well Capitalized | 141,949 | 8.000 | 132,635 | 8.000 | ||||||||||||||||||||||
Tier I Capital (to Average Assets) | ||||||||||||||||||||||||||
Actual | $ | 172,025 | 8.332 | % | $ | 165,346 | 8.636 | % | ||||||||||||||||||
For Capital Adequacy Purposes | 82,585 | 4.000 | 76,585 | 4.000 | ||||||||||||||||||||||
To Be Well Capitalized | 103,232 | 5.000 | 95,731 | 5.000 |
June 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
(In Thousands) | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||
Common Equity Tier I Capital (to Risk-weighted Assets) | ||||||||||||||||||||||||||
Actual | $ | 124,177 | 9.516 | % | $ | 119,783 | 9.781 | % | ||||||||||||||||||
For Capital Adequacy Purposes | 58,722 | 4.500 | 55,109 | 4.500 | ||||||||||||||||||||||
Minimum To Maintain Capital Conservation Buffer At Reporting Date | 91,345 | 7.000 | 85,725 | 7.000 | ||||||||||||||||||||||
To Be Well Capitalized | 84,820 | 6.500 | 79,602 | 6.500 | ||||||||||||||||||||||
Total Capital (to Risk-weighted Assets) | ||||||||||||||||||||||||||
Actual | $ | 134,791 | 10.330 | % | $ | 131,379 | 10.728 | % | ||||||||||||||||||
For Capital Adequacy Purposes | 104,388 | 8.000 | 97,971 | 8.000 | ||||||||||||||||||||||
Minimum To Maintain Capital Conservation Buffer At Reporting Date | 137,009 | 10.500 | 128,587 | 10.500 | ||||||||||||||||||||||
To Be Well Capitalized | 130,485 | 10.000 | 122,464 | 10.000 | ||||||||||||||||||||||
Tier I Capital (to Risk-weighted Assets) | - | - | ||||||||||||||||||||||||
Actual | $ | 124,177 | 9.516 | % | $ | 119,783 | 9.781 | % | ||||||||||||||||||
For Capital Adequacy Purposes | 78,296 | 6.000 | 73,479 | 6.000 | ||||||||||||||||||||||
Minimum To Maintain Capital Conservation Buffer At Reporting Date | 110,919 | 8.500 | 104,095 | 8.500 | ||||||||||||||||||||||
To Be Well Capitalized | 104,394 | 8.000 | 97,972 | 8.000 | ||||||||||||||||||||||
Tier I Capital (to Average Assets) | ||||||||||||||||||||||||||
Actual | $ | 124,177 | 8.155 | % | $ | 119,783 | 8.383 | % | ||||||||||||||||||
For Capital Adequacy Purposes | 60,908 | 4.000 | 57,155 | 4.000 | ||||||||||||||||||||||
To Be Well Capitalized | 76,135 | 5.000 | 71,444 | 5.000 |
June 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
(In Thousands) | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||
Common Equity Tier I Capital (to Risk-weighted Assets) | ||||||||||||||||||||||||||
Actual | $ | 46,679 | 9.810 | % | $ | 43,364 | 9.877 | % | ||||||||||||||||||
For Capital Adequacy Purposes | 21,412 | 4.500 | 19,757 | 4.500 | ||||||||||||||||||||||
Minimum To Maintain Capital Conservation Buffer At Reporting Date | 33,308 | 7.000 | 30,733 | 7.000 | ||||||||||||||||||||||
To Be Well Capitalized | 30,929 | 6.500 | 28,538 | 6.500 | ||||||||||||||||||||||
Total Capital (to Risk-weighted Assets) | ||||||||||||||||||||||||||
Actual | $ | 49,023 | 10.303 | % | $ | 47,549 | 10.830 | % | ||||||||||||||||||
For Capital Adequacy Purposes | 38,065 | 8.000 | 35,124 | 8.000 | ||||||||||||||||||||||
Minimum To Maintain Capital Conservation Buffer At Reporting Date | 49,960 | 10.500 | 46,100 | 10.500 | ||||||||||||||||||||||
To Be Well Capitalized | 47,581 | 10.000 | 43,905 | 10.000 | ||||||||||||||||||||||
Tier I Capital (to Risk-weighted Assets) | ||||||||||||||||||||||||||
Actual | $ | 46,679 | 9.810 | % | $ | 43,364 | 9.877 | % | ||||||||||||||||||
For Capital Adequacy Purposes | 28,550 | 6.000 | 26,342 | 6.000 | ||||||||||||||||||||||
Minimum To Maintain Capital Conservation Buffer At Reporting Date | 40,446 | 8.500 | 37,318 | 8.500 | ||||||||||||||||||||||
To Be Well Capitalized | 38,066 | 8.000 | 35,123 | 8.000 | ||||||||||||||||||||||
Tier I Capital (to Average Assets) | ||||||||||||||||||||||||||
Actual | $ | 46,679 | 8.215 | % | $ | 43,364 | 8.260 | % | ||||||||||||||||||
For Capital Adequacy Purposes | 22,729 | 4.000 | 21,000 | 4.000 | ||||||||||||||||||||||
To Be Well Capitalized | 28,411 | 5.000 | 26,249 | 5.000 |
Parallel Rate Shock in Basis Points | ||||||||||||||||||||||||||||||||||||||||||||||||||
(In Thousands) | -300 | -200 | -100 | Static | +100 | +200 | +300 | +400 | ||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 58,497 | $ | 60,617 | $ | 62,366 | $ | 63,802 | $ | 64,790 | $ | 65,720 | $ | 66,634 | $ | 67,518 | ||||||||||||||||||||||||||||||||||
Change from static | (5,305) | (3,185) | (1,436) | — | 988 | 1,918 | 2,832 | 3,716 | ||||||||||||||||||||||||||||||||||||||||||
Percent change from static | -8.31 | % | -4.99 | % | -2.25 | % | — | 1.55 | % | 3.01 | % | 4.44 | % | 5.82 | % |
Period | Total Number of Shares (or Units) Purchased | Average Price Paid per Share (or Units) Purchased | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
Month #1 (April 1 - April 30, 2023) | — | $ | — | — | 324,000 | |||||||||||||||||||||
Month #2 (May 1 - May 31, 2023) | — | — | — | 353,000 | ||||||||||||||||||||||
Month #3 (June 1 - June 30, 2023) | — | — | — | 353,000 |
Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3(i) of the Registrant's Annual Report on Form 10-K for the year ended December 31, 2022). | ||||||||
Bylaws of the Registrant (incorporated by reference to Exhibit 3(ii) of the Registrant's Annual Report on Form 10-K for the year ended December 31, 2020). | ||||||||
Rule 13a-14(a)/Rule 15d-14(a) Certification of Chief Executive Officer. | ||||||||
Rule 13a-14(a)/Rule 15d-14(a) Certification of Chief Financial Officer. | ||||||||
Section 1350 Certification of Chief Executive Officer. | ||||||||
Section 1350 Certification of Chief Financial Officer. | ||||||||
101 | Interactive data file containing the following financial statements formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheet at June 30, 2023 and December 31, 2022; (ii) the Consolidated Statement of Income for the three and six months ended June 30, 2023 and 2022; (iii) Consolidated Statement of Comprehensive Income for the three and six months ended June 30, 2023 and 2022; (iv) the Consolidated Statement of Shareholders’ Equity for the three and six months ended June 30, 2023 and 2022; (v) the Consolidated Statement of Cash Flows for the six months ended June 30, 2023 and 2022 and (vi) the Notes to Consolidated Financial Statements. As provided in Rule 406T of Regulation S-T, this interactive data file shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, and shall not be deemed “filed” or part of any registration statement or prospectus for purposes of Section 11 or 12 under the Securities Act of 1933, or otherwise subject to liability under those sections. | |||||||
104 | Cover page interactive data file (formatted as inline XBRL and contained in Exhibit 101). |
PENNS WOODS BANCORP, INC. | ||||||||
(Registrant) | ||||||||
Date: | August 11, 2023 | /s/ Richard A. Grafmyre | ||||||
Richard A. Grafmyre, Chief Executive Officer | ||||||||
(Principal Executive Officer) | ||||||||
Date: | August 11, 2023 | /s/ Brian L. Knepp | ||||||
Brian L. Knepp, President and Chief Financial Officer | ||||||||
(Principal Financial Officer and Principal Accounting | ||||||||
Officer) |
Date: | August 11, 2023 | /s/ Richard A. Grafmyre | ||||||
Richard A. Grafmyre | ||||||||
Chief Executive Officer | ||||||||
(Principal Executive Officer) |
Date: | August 11, 2023 | /s/ Brian L. Knepp | ||||||
Brian L. Knepp | ||||||||
President and Chief Financial Officer | ||||||||
(Principal Financial Officer and Principal Accounting Officer) |
/s/ Richard A. Grafmyre | |||||
Richard A. Grafmyre | |||||
Chief Executive Officer | |||||
August 11, 2023 |
/s/ Brian L. Knepp | |||||
Brian L. Knepp | |||||
President and Chief Financial Officer | |||||
August 11, 2023 |
CONSOLIDATED BALANCE SHEET (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 3,000,000 | 3,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 5.55 | $ 5.55 |
Common stock, shares authorized (in shares) | 22,500,000 | 22,500,000 |
Common stock, shares issued (in shares) | 7,573,713 | 7,566,810 |
Common stock, shares outstanding (in shares) | 7,063,488 | 7,056,585 |
Treasury stock (in shares) | 510,225 | 510,225 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
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Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 4,171 | $ 4,231 | $ 8,829 | $ 7,663 |
Other comprehensive (loss) income: | ||||
Net unrealized (loss) gain on available for sale securities | (2,329) | (3,995) | 4 | (10,892) |
Tax effect | 489 | 839 | (1) | 2,287 |
Net realized loss on available for sale securities included in net income | 19 | 10 | 80 | 12 |
Tax effect | (4) | (2) | (17) | (2) |
Amortization of unrecognized pension loss | 37 | 18 | 74 | 35 |
Tax effect | (7) | (4) | (15) | (8) |
Total other comprehensive (loss) income | (1,795) | (3,134) | 125 | (8,568) |
Comprehensive income (loss) | $ 2,376 | $ 1,097 | $ 8,954 | $ (905) |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
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Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared per share (in dollars per share) | $ 0.32 | $ 0.32 | $ 0.64 | $ 0.64 |
Purchase of treasury stock (in shares) | 30,000,000 |
Basis of Presentation |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Penns Woods Bancorp, Inc. (the “Company”) and its wholly-owned subsidiaries: Woods Investment Company, Inc., Woods Real Estate Development Company, Inc., United Insurance Solutions, LLC., Luzerne Bank, and Jersey Shore State Bank (Jersey Shore State Bank and Luzerne Bank are referred to together as the “Banks”) and Jersey Shore State Bank’s wholly-owned subsidiary, The M Group, Inc. D/B/A The Comprehensive Financial Group (“The M Group”). All significant inter-company balances and transactions have been eliminated in the consolidation. The interim financial statements are unaudited, but in the opinion of management reflect all adjustments necessary for the fair presentation of results for such periods. The results of operations for any interim period are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. In reference to the attached financial statements, all adjustments are of a normal recurring nature pursuant to Rule 10-01(b) (8) of Regulation S-X. CECL Adoption and Updated Significant Accounting Policy On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology, and is referred to as CECL. The measurement of expected credit losses under CECL is applicable to financial assets measured at amortized cost, including loans and HTM debt securities. It also applies to off-balance sheet (“OBS”) credit exposures (loan commitments, standby letters of credit, financial guarantees, and other similar instruments. The Company adopted CECL using the modified retrospective method for all financial assets measured at amortized cost, net of investments in leases and OBS credit exposures. Results for reporting periods beginning after January 1, 2023 are presented under CECL, while prior period results are reported in accordance with the previously applicable incurred loss methodology. The Company recorded an overall decrease of $3,789,000 to the Allowance for Credit Losses (“ACL”) on January 1, 2023 as a result of the adoption of CECL with an associated increase to retained earnings of $2,993,000 and decrease to deferred tax assets of $796,000. The Company also recorded a liability of $1,703,000 for OBS credit exposures that resulted in a decrease to retained earnings of $1,346,000 and an increase to deferred tax assets of $357,000. Allowance for Credit Losses: The discussion that follows describes the methodology for determining the ACL under the CECL model that was adopted effective January 1, 2023. The allowance methodology for prior periods is disclosed in the Company’s 2022 Annual Report on Form 10-K. The Company has elected to exclude accrued interest receivable from the measurement of its ACL. When a loan is placed on non-accrual status, any outstanding accrued interest is reversed against interest income. Loans: The ACL for loans is an estimate of the expected losses to be realized over the life of the loans in the portfolio. The ACL is determined for two distinct categories of loans: 1) loans evaluated collectively for expected credit losses and 2) loans evaluated individually for expected credit losses. The ACL also includes certain qualitative adjustments to the CECL model. Loans Evaluated Collectively: Management believes that internal credit ratings are the most relevant credit quality indicator for these types of loans, however; the Company does not assign internal credit ratings to smaller balance, homogeneous loans, such as home equity, residential mortgage, and consumer automobile loans. For these loans, the most relevant credit quality indicator is delinquency status and management evaluates credit quality based on the aging status of the loan. In order to determine the ACL:
Loans Evaluated Individually: Loans evaluated individually for expected credit losses include loans determined to be collateral-dependant. Loans evaluated individually may have specific allocations assigned. For loans measured using the fair value of collateral, if the analysis determines that sufficient collateral value would be available for repayment of the debt, then no allocations would be assigned to those loans. Collateral could be in the form of real estate or business assets, such as accounts receivable or inventory, in the case of commercial and industrial loans. For loans secured by real estate, estimated fair values are determined through appraisals performed by third-party appraisers or third party evaluations for commercial real estate loans and our internal appraisal department for 1-4 family real estate secured loans, discounted to arrive at expected net sale proceeds. For collateral dependent loans, estimated real estate fair values are also net of estimated selling costs. When a real estate secured loan is impaired, a decision is made regarding whether an updated appraisal of the real estate is necessary. This decision is based on various considerations, including: the age of the most recent appraisal; the loan-to-value ratio based on the original appraisal; the condition of the property; the Company’s experience and knowledge of the real estate market; the purpose of the loan; market factors; payment status; the strength of any guarantors; and the existence and age of other indications of value such as broker price opinions, among others. The Company generally obtains updated evaluations for collateral dependent loans secured predominantly by real estate every 12 months. When updated evaluations are not obtained for loans secured by real estate, fair values are estimated based on the original appraisal values, as long as the original appraisal indicated an acceptable loan-to-value position and there has not been a significant deterioration in the collateral value since the original appraisal was performed. Management regularly reviews loans in the portfolio to assess credit quality indicators and to determine appropriate loan classification. For commercial loans, commercial mortgages and construction loans to commercial borrowers, an internal credit rating process is used. The Company believes that internal credit ratings are the most relevant credit quality indicator for these types of loans. The migration of loans through the various internal credit rating categories is a significant component of the ACL methodology for these loans, which bases the PD on this migration. Assigning credit ratings involves judgment. Credit ratings may be changed based on ongoing monitoring procedures, or if specific loan review assessments identify a deterioration or an improvement in the loan. The following is a summary of the Company's internal credit rating categories:
The allocation of the ACL is reviewed to evaluate its appropriateness in relation to the overall risk profile of the loan portfolio. The Company considers risk factors such as: local and national economic conditions; trends in delinquencies and non-accrual loans; the diversity of borrower industry types; and the composition of the portfolio by loan type. Qualitative and Other Adjustments to ACL: In addition to the quantitative credit loss estimates for loans evaluated collectively, qualitative factors that may not be fully captured in the quantitative results are also evaluated. These include changes in lending policy, volume of the portfolio, economy conditions, credit concentrations, level of problem loans, loan review, collateral value, and experience of credit staff. Qualitative adjustments are judgmental and are based on Management’s knowledge of the portfolio and the markets in which the Company operates. Qualitative adjustments are evaluated and approved on a quarterly basis. OBS Credit Exposures: The ACL for OBS credit exposures is recorded in other liabilities on the consolidated balance sheet. This ACL represents management’s estimate of expected losses in its unfunded loan commitments and other OBS credit exposures, such as letters of credit and credit recourse on sold residential mortgage loans. The ACL specific to unfunded commitments is determined by estimating future draws and applying the expected loss rates on those draws. Future draws are based on historical averages of utilization rates (i.e., the likelihood of draws taken). The ACL for OBS credit exposures is increased or decreased by charges or reductions to expense, through the provision for credit losses. The impact from the adoption of CECL is shown below:
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Accumulated Other Comprehensive Loss |
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Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive LossThe changes in accumulated other comprehensive loss by component shown net of tax and parenthesis indicating debits, as of June 30, 2023 and 2022 were as follows:
The reclassifications out of accumulated other comprehensive loss shown, net of tax and parenthesis indicating debits to net income, as of June 30, 2023 and 2022 were as follows:
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Recent Accounting Pronouncements |
6 Months Ended |
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Jun. 30, 2023 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets. This standard, along with several other subsequent codification updates, replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses that are expected to occur over the remaining life of a financial asset and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments in this update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The new current expected credit losses model (“CECL”) will apply to the allowance for loan losses, available-for-sale and held-to-maturity debt securities, purchased financial assets with credit deterioration and certain off-balance sheet credit exposures. Management has completed its implementation plan, segmentation and testing, and model validation. The implementation plan included drafting of additional controls and policies to govern data uploads to its third-party vendor, balancing and reconciling, testing and auditing of inputs, and review and decision-making surrounding segmentation, methodologies, qualitative factor adjustments, and reasonable and supportable forecasts and reversion techniques. Parallel runs were processed during 2022 and the results were consistent with management's expectations. The implementation plan is currently going through the Company's control structure and internal control testing is being performed. As a result of adopting this standard, the Company recorded a decrease in its allowance effective January 1, 2023, of $2,086,000. As a result, the Company recorded a decrease in its loan allowance as of January 1, 2023, of $3,789,000; as well as an increase in its allowance for off-balance sheet credit exposures of $1,703,000. These estimates are subject to further refinements based on ongoing evaluations of our model, methodologies, and judgments, as well as prevailing economic conditions and forecasts as of the adoption date. The adoption of ASU 2016-13 is not expected to have a significant impact on our regulatory capital ratios. At adoption, the Company did not have any securities classified as HTM debt securities. No allowance was recorded related to AFS debt securities at the date of adoption, January 1, 2023. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. To simplify the subsequent measurement of goodwill, the FASB eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Update is effective for smaller reporting companies and all other entities for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. This Update is not expected to have a significant impact on the Company’s financial statements. In January 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, March 2020, to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls “reference rate reform” if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Also, entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain criteria are met, and can make a one-time election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform. The amendments in this ASU are effective for all entities upon issuance through December 31, 2022. It is too early to predict whether a new rate index replacement and the adoption of the ASU will have a material impact on the Company’s financial statements. In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. This ASU removes from U.S. GAAP the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, entities will not separately present in equity an embedded conversion feature in such debt. Instead, they will account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock (i.e., as a single unit of account), unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC 815 or (2) a convertible debt instrument was issued at a substantial premium. This ASU requires entities to provide expanded disclosures about the terms and features of convertible instruments, how the instruments have been reported in the entity’s financial statements, and information about events, conditions, and circumstances that can affect how to assess the amount or timing of an entity’s future cash flows related to those instruments. The amendments in this ASU are effective for public business entities that are not smaller reporting companies, for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. For all other entities, this ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The guidance may be early adopted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. This Update is not expected to have a significant impact on the Company’s financial statements. In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (ASC 326): Troubled Debt Restructurings (TDRs) and Vintage Disclosures. The guidance amends ASC 326 to eliminate the accounting guidance for TDRs by creditors, while enhancing disclosure requirements for certain loan refinancing and restructuring activities by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying TDR recognition and measurement guidance, creditors will determine whether a modification results in a new loan or continuation of existing loan. These amendments are intended to enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. Additionally, the amendments to ASC 326 require that an entity disclose current-period gross writeoffs by year of origination within the vintage disclosures, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination. The guidance is only for entities that have adopted the amendments in Update 2016-13 for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. This Update did not have a significant impact on the Company’s financial statements. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820) – Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. This amendment clarifies the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security. It also introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. The amendments will be applied prospectively, with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. This Update is not expected to have a significant impact on the Company’s financial statements.
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Per Share Data |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per Share Data | Per Share Data There are no convertible securities which would affect the denominator in calculating basic and dilutive earnings per share. There were a total of 1,003,000 stock options, with an average exercise price of $25.56, outstanding on June 30, 2023. These options were excluded, on a weighted average basis, in the computation of diluted earnings per share for the period due to the average market price of common shares of $25.10 for the period being less than the strike price. There were a total of 919,250 stock options, with an average exercise price of $25.36 that were excluded, on a weighted average basis, in the computation of diluted earnings per share for the period due to the average market price of common shares of $23.78 being less than the strike price for the period ending June 30, 2022.
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Investment Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | Investment Securities The amortized cost, gross unrealized gains and losses, and fair values of our investment securities portfolio at June 30, 2023 and December 31, 2022 are as follows:
The following tables show the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time, that the individual debt securities have been in a continuous unrealized loss position, at June 30, 2023 and December 31, 2022.
At June 30, 2023, there were a total of 62 securities in a continuous unrealized loss position for less than twelve months and 171 individual securities that were in a continuous unrealized loss position for twelve months or greater. No credit losses occurred for the period ended June 30, 2023. The Company reviews its position quarterly and has determined that, at June 30, 2023, the declines outlined in the above table represent temporary non-credit declines and the Company does not intend to sell, and does not believe it will be required to sell, these securities before recovery of their cost basis, which may be at maturity. The Company has concluded that the unrealized losses disclosed above are not credit-related but are the result of interest rate changes, sector credit ratings changes, or company-specific ratings changes that are not expected to result in the non-collection of principal and interest during the period. The amortized cost and fair value of debt securities at June 30, 2023, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities since borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Total gross proceeds from sales of debt securities available for sale for the six months ended June 30, 2023 was $22,725,000, compared to $0 for the corresponding 2022 period. The following table represents gross realized gains and losses from the sales of debt securities available for sale:
Investment securities with a carrying value of approximately $100,631,000 and $154,946,000 at June 30, 2023 and December 31, 2022, respectively, were pledged to secure certain deposits, repurchase agreements, and for other purposes as required by law. At June 30, 2023 and December 31, 2022, we had $1,143,000 and $1,142,000, respectively, in equity securities recorded at fair value. The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the three and six months ended June 30, 2023 and 2022:
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Loans |
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Loans and Leases Receivable Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | LoansManagement segments the Banks' loan portfolio to a level that enables risk and performance monitoring according to similar risk characteristics. Loans are segmented based on the underlying collateral characteristics. Categories include commercial, financial, and agricultural, real estate, and installment loans. Real estate loans are further segmented into three categories: residential, commercial, and construction, while installment loans are classified as either consumer automobile loans or other installment loans. The following table presents the related aging categories of loans, by class, as of June 30, 2023 and December 31, 2022:
The Allowance for Credit Losses ("ACL") related to loans consists of loans evaluated collectively and individually for expected credit losses. The ACL related to loans represents an estimate of expected credit losses over the expected life of the loans as of the balance sheet date and is recorded as a reduction to net loans. The ACL for off balance sheet credit exposure includes estimated losses on unfunded loan commitments, letters of credit and other off balance sheet credit exposures and is recorded in other liabilities. The total ACL is increased by charges to expense, through the provision for credit losses, and decreased by charge-offs, net of recoveries. The following table presents the components of the ACL as of June 30, 2023:
Non-accrual Loans
Total interest income recorded on non-accrual loans at June 30, 2023 totaled $66,000. The following table presents the recorded investment, unpaid principal balance, and related allowance of impaired loans by segment as of December 31, 2022:
The following table presents outstanding loan balances of collateral-dependent loans by class as of June 30, 2023:
* 90% of loan balances guaranteed by USDA remaining 10% is unsecured ** Loan considered unsecured due to lien position on property The following table presents the average recorded investment in impaired loans and related interest income recognized for the three and six months ended June 30, 2022:
Loan Modifications On January 1, 2023, the Corporation adopted ASU 2022-02. Loan modifications reported below do not include modifications with insignificant payment delays. ASU 2022-02 lists the following factors when considering if the loan modification has insignificant payment delays: (1) the amount of the restructured payments subject to the delay is insignificant relative to the unpaid principal or collateral value of the debt and will result in an insignificant shortfall in the contractual amount due, and (2) the delay in timing of the restructured payment period is insignificant relative to the frequency of payments due under the debt, the debt’s original contractual maturity or the debt’s original expected duration. The ACL incorporates an estimate of lifetime expected credit losses and is recorded upon asset origination or acquisition. The starting point for the estimate of the ACL is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. The Corporation uses a probability of default/loss given default model to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. There were no loan modifications completed during the three and six months ended June 30, 2023. There were no loan modifications considered to be TDRs completed during the three and six months ended June 30, 2022. There were no loan modifications made during the twelve months prior to June 30, 2023 that defaulted during the six months ended June 30, 2023. There were no loan modifications considered to be a TDR made during the twelve months previous to June 30, 2022 that defaulted during the six months ended June 31, 2022. Loans considered modifications amounted to $7,087,000 and $7,468,000 as of June 30, 2023 and December 31, 2022, respectively. The amount of foreclosed residential real estate held at June 30, 2023 and December 31, 2022, totaled $2,112,000 and $950,000, respectively. Consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process at June 30, 2023 and December 31, 2022, totaled $456,000 and $890,000, respectively. Internal Credit Ratings Management uses a ten point internal credit rating system to monitor the credit quality of the overall loan portfolio. The first six categories are considered not criticized, and are aggregated as “Pass” rated. The criticized rating categories utilized by management generally follow bank regulatory definitions. The special mention category includes assets that are currently protected but are potentially weak, resulting in an undue and unwarranted credit risk, but not to the point of justifying a substandard classification. Loans in the substandard category have well-defined weaknesses that jeopardize the liquidation of the debt, and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. All loans greater than 90 days past due are evaluated for substandard classification. Loans in the doubtful category exhibit the same weaknesses found in the substandard loans; however, the weaknesses are more pronounced. Such loans are static and collection in full is improbable. However, these loans are not yet rated as loss because certain events may occur which would salvage the debt. Loans classified as loss are considered uncollectible and charge-off is imminent. To help ensure that credit ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Banks have a structured loan rating process with several layers of internal and external oversight. Generally, consumer and residential mortgage loans are included in the pass category unless a specific action, such as bankruptcy, repossession, or death occurs to raise awareness of a possible credit event. An external semi-annual loan review of large commercial relationships is performed, as well as a sample of smaller transactions. The 2023 loan review will evaluate 55% of the Banks' average outstanding commercial portfolio which can consist of outstanding loans, commercial real estate mortgages and outstanding commitments. Detailed reviews, including plans for resolution, are performed on loans classified as substandard, doubtful, or loss on a quarterly basis. The following table presents the credit quality categories identified above as of June 30, 2023 and December 31, 2022:
The information presented in the table above is not required for periods prior to the adoption of CECL. The following table presents the most comparable required information for the prior period, internal credit ratings for the report loan segments as of December 31, 2022:
Allowance for Credit Losses Maintaining an appropriate Allowance for Credit Losses ("ACL") is dependent on various factors, including the ability to identify potential problem loans in a timely manner. For commercial construction, residential construction, commercial and industrial, and commercial real estate, an internal credit rating process is used. Management believes that internal credit ratings are the most relevant credit quality indicator for these types of loans. The migration of loans through the various internal credit rating categories is a significant component of the ACL methodology for these loans, which bases the probability of default on this migration. Assigning credit ratings involves judgment. The Company's loan review process provide a separate assessment of credit rating accuracy. Credit ratings may be changed based on the ongoing monitoring procedures performed by loan officers or credit administration staff or if specific loan review assessments identify a deterioration or an improvement in the loans. Management considers the performance of the loan portfolio and its impact on the ACL. The Company does not assign internal Credit ratings to smaller balance, homogeneous loans, such as home equity, residential mortgage, and consumer automobile loans. For these loans, the most relevant credit quality indicator is delinquency status and management evaluates credit quality based on the aging status of the loan. Historical loss trends are used in the estimation of losses in the current portfolio. These historical loss amounts are modified by other qualitative factors. A historical charge-off factor is calculated utilizing the charge-off and recovery data over the past ten years. Management has identified a number of additional qualitative factors which it uses to supplement the historical charge-off factor because these factors are likely to cause estimated credit losses associated with the existing loan pools to differ from historical loss experience. The additional factors that are evaluated quarterly and updated using information obtained from internal, regulatory, and governmental sources are: national and local economic trends and conditions; trends in volumes and terms of loans; effects of changes in lending policies; experience, ability, and depth of lending staff; value of underlying collateral; and concentrations of credit from a loan type, industry and/or geographic standpoint. Management reviews the loan portfolio on a quarterly basis in order to make appropriate and timely adjustments to the ACL. When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the ACL. Activity in the allowance is presented for the three and six months ended June 30, 2023 and 2022:
The shift in allocation and the changes in the provision for credit losses are primarily due to changes in the credit metrics within the loan portfolio coupled with the adoption of CECL on January 1, 2023. The increase in provision for the three and six month periods ended June 30, 2023 for consumer auto was loan volume driven. The decrease in provision for the three and six month periods ended June 30, 2023 for commercial, financial, and agricultural was the result of improving credit metrics coupled with a large recovery during the three month period ended June 30, 2023 which effected the historical loss rate calculations. The increase in provision for the three and six month periods ended June 30, 2023 for commercial real estate was primarily the result of growth within this segment of the loan portfolio. The Company grants commercial, industrial, residential, and installment loans to customers primarily throughout north-east and central Pennsylvania. Although the Company has a diversified loan portfolio, a substantial portion of its debtors’ ability to honor their contracts is dependent on the economic conditions within this region. The Company has a concentration of the following to gross loans at June 30, 2023 and 2022:
The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment based on impairment method as of December 31, 2022:
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Net Periodic Benefit Cost-Defined Benefit Plans |
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Net Periodic Benefit Cost-Defined Benefit Plans | Net Periodic Benefit Cost-Defined Benefit Plans For a detailed disclosure on the Company’s pension and employee benefits plans, please refer to Note 13 of the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2022. The following sets forth the components of the net periodic expense/(gain) of the domestic non-contributory defined benefit plan for the three and six months ended June 30, 2023 and 2022, respectively:
Employer Contributions The Company previously disclosed in its consolidated financial statements, included in the Annual Report on Form 10-K for the year ended December 31, 2022, that it does not expect to contribute to its defined benefit plan in 2023. As of June 30, 2023, there were no contributions made to the pension plan.
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Stock Purchase Plans |
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Share-Based Payment Arrangement [Abstract] | |
Stock Purchase Plans | Stock Purchase PlansThe Company maintains an Employee Stock Purchase Plan (“Plan”). The Plan is intended to encourage employee participation in the ownership and economic progress of the Company. The Plan allows for up to 1,500,000 shares to be purchased by employees. The purchase price of the shares is 95% of market value with an employee eligible to purchase up to the lesser of 15% of base compensation or $12,000 in market value annually. During the six months ended June 30, 2023 and 2022, there were 1,684 and 1,903 shares issued under the Plan, respectively, for total proceeds of $39,000 and $44,000.The Company maintains the 2020 Non-Employee Director Compensation Plan ("Director Plan"). Under this Director Plan, non-employee directors who have not attained specified stock ownership levels are required to receive a portion of their annual compensation in the form of common stock (currently 50% of total annual compensation), with the ability to elect to receive up to 100% of annual compensation in the form of common stock by making a written election prior to the calendar year to which the compensation relates. The Director Plan allows for up to 100,000 shares to be issued. As of June 30, 2023, the Company has issued a total of 39,850 shares of common stock to non-employee directors under the Director Plan in lieu of otherwise payable cash compensation with 5,219 and 6,990 shares issued, respectively, with an associated expense of $130,000 and $168,000 during the three months ended June 30, 2023 and 2022. |
Off-Balance Sheet Risk |
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Off-Balance Sheet Risk | Off-Balance Sheet Risk The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments are primarily comprised of commitments to extend credit, standby letters of credit, and credit exposure from the sale of assets with recourse. These instruments involve, to varying degrees, elements of credit, interest rate, or liquidity risk in excess of the amount recognized in the Consolidated Balance Sheet. The contract amounts of these instruments express the extent of involvement the Company has in particular classes of financial instruments. The Company’s exposure to credit loss from nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual amount of these instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The Company may require collateral or other security to support financial instruments with off-balance sheet credit risk. Financial instruments whose contract amounts represent credit risk are as follows at June 30, 2023 and December 31, 2022:
Commitments to extend credit are legally binding agreements to lend to customers. Commitments generally have fixed expiration dates or other termination clauses and may require payment of fees. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future liquidity requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company, on an extension of credit is based on management’s credit assessment of the counterparty. Standby letters of credit represent conditional commitments issued by the Company to guarantee the performance of a customer to a third party. These instruments are issued primarily to support bid or performance related contracts. The coverage period for these instruments is typically a one year period with an annual renewal option subject to prior approval by management. Fees earned from the issuance of these letters are recognized upon expiration of the coverage period. For secured letters of credit, the collateral is typically Bank deposit instruments or customer business assets.
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Fair Value Measurements |
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Fair Value Measurements | Fair Value Measurements The following disclosures show the hierarchal disclosure framework associated with the level of pricing observations utilized in measuring assets and liabilities at fair value.
This hierarchy requires the use of observable market data when available. The following table presents the assets reported on the Consolidated Balance Sheet at their fair value on a recurring basis as of June 30, 2023 and December 31, 2022, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
The following table presents the assets reported on the Consolidated Balance Sheet at their fair value on a non-recurring basis as of June 30, 2023 and December 31, 2022, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
The following tables present a listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques as of June 30, 2023 and December 31, 2022:
(1) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.
(1) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The significant unobservable input used in the fair value measurement of the Company’s impaired loans using the appraisal of collateral valuation technique include appraisal adjustments, which are adjustments to appraisals by management for qualitative factors such as economic conditions and estimated liquidation expenses. The significant unobservable input used in the fair value measurement of the Company’s other real estate owned are the same inputs used to value impaired loans using the appraisal of collateral valuation technique.
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Fair Value of Financial Instruments |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company is required to disclose fair values for its financial instruments. Fair values 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 at one time the Company’s entire holdings of a particular financial instrument. Also, it is the Company’s general practice and intention to hold most of its financial instruments to maturity and not to engage in trading or sales activities. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These fair values are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions can significantly affect the fair values. Fair values have been determined by the Company using historical data and an estimation methodology suitable for each category of financial instruments. The Company’s fair values are set forth below for the Company’s other financial instruments. As certain assets and liabilities, such as deferred tax assets, premises and equipment, and many other operational elements of the Company, are not considered financial instruments but have value, this fair value of financial instruments would not represent the full market value of the Company. The fair values of the Company’s financial instruments not recorded at fair value on a recurring or nonrecurring basis are as follows at June 30, 2023 and December 31, 2022:
(1) The financial instrument is carried at cost at, June 30, 2023 which approximate the fair value of the instruments
The methods and assumptions used by the Company in estimating fair values of financial instruments is in accordance with ASC Topic 825, Financial Instruments, as amended by ASU 2016-01 which requires public entities to use exit pricing in the calculation of the above tables.
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Stock Options |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options | Stock Options In 2020, the Company adopted the 2020 Equity Incentive Plan which replaced the 2014 Equity Incentive Plan that did not have any remaining shares available for issuance. The plans are designed to help the Company attract, retain, and motivate employees and non-employee directors. Incentive stock options, non-qualified stock options, restricted stock, restricted stock units, and other equity-based awards may be granted as part of the plan. As of January 1, 2023, the Company had a total of 914,000 stock options outstanding. During the six months ended as of June 30, 2023, the Company issued 89,000 stock options with a strike price of $27.77 to a group of employees. The options granted in 2023 all expire ten years from the grant date. Of the 89,000 grants awarded in 2023, 59,500 of the options vest in three years while the 29,500 remaining options vest in five years. Stock options outstanding as of June 30, 2023 are presented below:
A summary of stock option activity is presented below:
The estimated fair value of options, including the effect of estimated forfeitures, is recognized as expense on a straight line basis over the options’ vesting periods while ensuring that the cumulative amount of compensation cost recognized at least equals the value of the vested portion of the award at that date. The fair value of stock options is estimated using the Black-Scholes option pricing model. The following is a summary of the assumptions used in this model for stock options granted for the six months ended June 30, 2023:
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Reclassification of Comparative Amounts |
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Reclassification of Comparative Amounts | |
Reclassification of Comparative Amounts | Reclassification of Comparative AmountsCertain comparative amounts for the prior period have been reclassified to conform to current period presentations. Such reclassifications had no effect on net income or shareholders’ equity |
Basis of Presentation (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | The consolidated financial statements include the accounts of Penns Woods Bancorp, Inc. (the “Company”) and its wholly-owned subsidiaries: Woods Investment Company, Inc., Woods Real Estate Development Company, Inc., United Insurance Solutions, LLC., Luzerne Bank, and Jersey Shore State Bank (Jersey Shore State Bank and Luzerne Bank are referred to together as the “Banks”) and Jersey Shore State Bank’s wholly-owned subsidiary, The M Group, Inc. D/B/A The Comprehensive Financial Group (“The M Group”). All significant inter-company balances and transactions have been eliminated in the consolidation. The interim financial statements are unaudited, but in the opinion of management reflect all adjustments necessary for the fair presentation of results for such periods. The results of operations for any interim period are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
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CECL Adoption and Updated Significant Accounting Policy | CECL Adoption and Updated Significant Accounting Policy On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology, and is referred to as CECL. The measurement of expected credit losses under CECL is applicable to financial assets measured at amortized cost, including loans and HTM debt securities. It also applies to off-balance sheet (“OBS”) credit exposures (loan commitments, standby letters of credit, financial guarantees, and other similar instruments. The Company adopted CECL using the modified retrospective method for all financial assets measured at amortized cost, net of investments in leases and OBS credit exposures. Results for reporting periods beginning after January 1, 2023 are presented under CECL, while prior period results are reported in accordance with the previously applicable incurred loss methodology. The Company recorded an overall decrease of $3,789,000 to the Allowance for Credit Losses (“ACL”) on January 1, 2023 as a result of the adoption of CECL with an associated increase to retained earnings of $2,993,000 and decrease to deferred tax assets of $796,000. The Company also recorded a liability of $1,703,000 for OBS credit exposures that resulted in a decrease to retained earnings of $1,346,000 and an increase to deferred tax assets of $357,000. Allowance for Credit Losses: The discussion that follows describes the methodology for determining the ACL under the CECL model that was adopted effective January 1, 2023. The allowance methodology for prior periods is disclosed in the Company’s 2022 Annual Report on Form 10-K. The Company has elected to exclude accrued interest receivable from the measurement of its ACL. When a loan is placed on non-accrual status, any outstanding accrued interest is reversed against interest income. Loans: The ACL for loans is an estimate of the expected losses to be realized over the life of the loans in the portfolio. The ACL is determined for two distinct categories of loans: 1) loans evaluated collectively for expected credit losses and 2) loans evaluated individually for expected credit losses. The ACL also includes certain qualitative adjustments to the CECL model. Loans Evaluated Collectively: Management believes that internal credit ratings are the most relevant credit quality indicator for these types of loans, however; the Company does not assign internal credit ratings to smaller balance, homogeneous loans, such as home equity, residential mortgage, and consumer automobile loans. For these loans, the most relevant credit quality indicator is delinquency status and management evaluates credit quality based on the aging status of the loan. In order to determine the ACL:
Loans Evaluated Individually: Loans evaluated individually for expected credit losses include loans determined to be collateral-dependant. Loans evaluated individually may have specific allocations assigned. For loans measured using the fair value of collateral, if the analysis determines that sufficient collateral value would be available for repayment of the debt, then no allocations would be assigned to those loans. Collateral could be in the form of real estate or business assets, such as accounts receivable or inventory, in the case of commercial and industrial loans. For loans secured by real estate, estimated fair values are determined through appraisals performed by third-party appraisers or third party evaluations for commercial real estate loans and our internal appraisal department for 1-4 family real estate secured loans, discounted to arrive at expected net sale proceeds. For collateral dependent loans, estimated real estate fair values are also net of estimated selling costs. When a real estate secured loan is impaired, a decision is made regarding whether an updated appraisal of the real estate is necessary. This decision is based on various considerations, including: the age of the most recent appraisal; the loan-to-value ratio based on the original appraisal; the condition of the property; the Company’s experience and knowledge of the real estate market; the purpose of the loan; market factors; payment status; the strength of any guarantors; and the existence and age of other indications of value such as broker price opinions, among others. The Company generally obtains updated evaluations for collateral dependent loans secured predominantly by real estate every 12 months. When updated evaluations are not obtained for loans secured by real estate, fair values are estimated based on the original appraisal values, as long as the original appraisal indicated an acceptable loan-to-value position and there has not been a significant deterioration in the collateral value since the original appraisal was performed. Management regularly reviews loans in the portfolio to assess credit quality indicators and to determine appropriate loan classification. For commercial loans, commercial mortgages and construction loans to commercial borrowers, an internal credit rating process is used. The Company believes that internal credit ratings are the most relevant credit quality indicator for these types of loans. The migration of loans through the various internal credit rating categories is a significant component of the ACL methodology for these loans, which bases the PD on this migration. Assigning credit ratings involves judgment. Credit ratings may be changed based on ongoing monitoring procedures, or if specific loan review assessments identify a deterioration or an improvement in the loan. The following is a summary of the Company's internal credit rating categories:
The allocation of the ACL is reviewed to evaluate its appropriateness in relation to the overall risk profile of the loan portfolio. The Company considers risk factors such as: local and national economic conditions; trends in delinquencies and non-accrual loans; the diversity of borrower industry types; and the composition of the portfolio by loan type. Qualitative and Other Adjustments to ACL: In addition to the quantitative credit loss estimates for loans evaluated collectively, qualitative factors that may not be fully captured in the quantitative results are also evaluated. These include changes in lending policy, volume of the portfolio, economy conditions, credit concentrations, level of problem loans, loan review, collateral value, and experience of credit staff. Qualitative adjustments are judgmental and are based on Management’s knowledge of the portfolio and the markets in which the Company operates. Qualitative adjustments are evaluated and approved on a quarterly basis. OBS Credit Exposures: The ACL for OBS credit exposures is recorded in other liabilities on the consolidated balance sheet. This ACL represents management’s estimate of expected losses in its unfunded loan commitments and other OBS credit exposures, such as letters of credit and credit recourse on sold residential mortgage loans. The ACL specific to unfunded commitments is determined by estimating future draws and applying the expected loss rates on those draws. Future draws are based on historical averages of utilization rates (i.e., the likelihood of draws taken). The ACL for OBS credit exposures is increased or decreased by charges or reductions to expense, through the provision for credit losses. The impact from the adoption of CECL is shown below:
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets. This standard, along with several other subsequent codification updates, replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses that are expected to occur over the remaining life of a financial asset and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments in this update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The new current expected credit losses model (“CECL”) will apply to the allowance for loan losses, available-for-sale and held-to-maturity debt securities, purchased financial assets with credit deterioration and certain off-balance sheet credit exposures. Management has completed its implementation plan, segmentation and testing, and model validation. The implementation plan included drafting of additional controls and policies to govern data uploads to its third-party vendor, balancing and reconciling, testing and auditing of inputs, and review and decision-making surrounding segmentation, methodologies, qualitative factor adjustments, and reasonable and supportable forecasts and reversion techniques. Parallel runs were processed during 2022 and the results were consistent with management's expectations. The implementation plan is currently going through the Company's control structure and internal control testing is being performed. As a result of adopting this standard, the Company recorded a decrease in its allowance effective January 1, 2023, of $2,086,000. As a result, the Company recorded a decrease in its loan allowance as of January 1, 2023, of $3,789,000; as well as an increase in its allowance for off-balance sheet credit exposures of $1,703,000. These estimates are subject to further refinements based on ongoing evaluations of our model, methodologies, and judgments, as well as prevailing economic conditions and forecasts as of the adoption date. The adoption of ASU 2016-13 is not expected to have a significant impact on our regulatory capital ratios. At adoption, the Company did not have any securities classified as HTM debt securities. No allowance was recorded related to AFS debt securities at the date of adoption, January 1, 2023. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. To simplify the subsequent measurement of goodwill, the FASB eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Update is effective for smaller reporting companies and all other entities for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. This Update is not expected to have a significant impact on the Company’s financial statements. In January 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, March 2020, to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls “reference rate reform” if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Also, entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain criteria are met, and can make a one-time election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform. The amendments in this ASU are effective for all entities upon issuance through December 31, 2022. It is too early to predict whether a new rate index replacement and the adoption of the ASU will have a material impact on the Company’s financial statements. In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. This ASU removes from U.S. GAAP the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, entities will not separately present in equity an embedded conversion feature in such debt. Instead, they will account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock (i.e., as a single unit of account), unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC 815 or (2) a convertible debt instrument was issued at a substantial premium. This ASU requires entities to provide expanded disclosures about the terms and features of convertible instruments, how the instruments have been reported in the entity’s financial statements, and information about events, conditions, and circumstances that can affect how to assess the amount or timing of an entity’s future cash flows related to those instruments. The amendments in this ASU are effective for public business entities that are not smaller reporting companies, for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. For all other entities, this ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The guidance may be early adopted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. This Update is not expected to have a significant impact on the Company’s financial statements. In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (ASC 326): Troubled Debt Restructurings (TDRs) and Vintage Disclosures. The guidance amends ASC 326 to eliminate the accounting guidance for TDRs by creditors, while enhancing disclosure requirements for certain loan refinancing and restructuring activities by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying TDR recognition and measurement guidance, creditors will determine whether a modification results in a new loan or continuation of existing loan. These amendments are intended to enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. Additionally, the amendments to ASC 326 require that an entity disclose current-period gross writeoffs by year of origination within the vintage disclosures, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination. The guidance is only for entities that have adopted the amendments in Update 2016-13 for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. This Update did not have a significant impact on the Company’s financial statements. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820) – Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. This amendment clarifies the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security. It also introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. The amendments will be applied prospectively, with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. This Update is not expected to have a significant impact on the Company’s financial statements.In March 2023, the FASB issued ASU 2023-02, Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method. ASU 2023-02 permits reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. ASU 2023-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023. This Update is not expected to have a significant impact on the Company’s financial statements.
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Basis of Presentation (Tables) |
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Impact of CECL | The impact from the adoption of CECL is shown below:
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Accumulated Other Comprehensive Loss (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in accumulated other comprehensive income by component | The changes in accumulated other comprehensive loss by component shown net of tax and parenthesis indicating debits, as of June 30, 2023 and 2022 were as follows:
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Schedule of reclassifications out of accumulated other comprehensive income | The reclassifications out of accumulated other comprehensive loss shown, net of tax and parenthesis indicating debits to net income, as of June 30, 2023 and 2022 were as follows:
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Per Share Data (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of weighted average common shares (denominator) used in the basic and dilutive earnings per share computation | There were a total of 919,250 stock options, with an average exercise price of $25.36 that were excluded, on a weighted average basis, in the computation of diluted earnings per share for the period due to the average market price of common shares of $23.78 being less than the strike price for the period ending June 30, 2022.
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Investment Securities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of amortized cost, gross unrealized gains and losses, and fair values of equity and trading investment securities | The amortized cost, gross unrealized gains and losses, and fair values of our investment securities portfolio at June 30, 2023 and December 31, 2022 are as follows:
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Schedule of gross unrealized losses and fair value | The following tables show the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time, that the individual debt securities have been in a continuous unrealized loss position, at June 30, 2023 and December 31, 2022.
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Schedule of amortized cost and fair value of debt securities by contractual maturity | The amortized cost and fair value of debt securities at June 30, 2023, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities since borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
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Schedule of gross realized gains and losses | The following table represents gross realized gains and losses from the sales of debt securities available for sale:
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Schedule of unrealized and realized gains and losses recognized in net income | The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the three and six months ended June 30, 2023 and 2022:
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Loans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Leases Receivable Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of related aging categories of loans by segment | The following table presents the related aging categories of loans, by class, as of June 30, 2023 and December 31, 2022:
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Schedule of components of and activity in the allowance | The following table presents the components of the ACL as of June 30, 2023:
Activity in the allowance is presented for the three and six months ended June 30, 2023 and 2022:
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Schedule of non-accrual loans | Non-accrual Loans
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Schedule of recorded investment, unpaid principal balance, and related allowance of impaired loans by segment | The following table presents the recorded investment, unpaid principal balance, and related allowance of impaired loans by segment as of December 31, 2022:
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Schedule of collateral dependent loans | The following table presents outstanding loan balances of collateral-dependent loans by class as of June 30, 2023:
* 90% of loan balances guaranteed by USDA remaining 10% is unsecured ** Loan considered unsecured due to lien position on property
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Schedule of average recorded investment in impaired loans and related interest income recognized | The following table presents the average recorded investment in impaired loans and related interest income recognized for the three and six months ended June 30, 2022:
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Schedule of credit quality categories | The following table presents the credit quality categories identified above as of June 30, 2023 and December 31, 2022:
The information presented in the table above is not required for periods prior to the adoption of CECL. The following table presents the most comparable required information for the prior period, internal credit ratings for the report loan segments as of December 31, 2022:
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Schedule of concentration of loan | The Company has a concentration of the following to gross loans at June 30, 2023 and 2022:
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Schedule of allowance for loan losses and the recorded investment in loans by portfolio segment based on impairment method | The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment based on impairment method as of December 31, 2022:
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Net Periodic Benefit Cost-Defined Benefit Plans (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of the net periodic benefit/cost of the domestic non-contributory defined benefit plan | The following sets forth the components of the net periodic expense/(gain) of the domestic non-contributory defined benefit plan for the three and six months ended June 30, 2023 and 2022, respectively:
|
Off-Balance Sheet Risk (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Off Balance Sheet Risk | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial instruments whose contract amounts represent credit risk | Financial instruments whose contract amounts represent credit risk are as follows at June 30, 2023 and December 31, 2022:
|
Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets reported on the balance sheet at their fair value on a recurring basis | The following table presents the assets reported on the Consolidated Balance Sheet at their fair value on a recurring basis as of June 30, 2023 and December 31, 2022, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
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Schedule of assets reported on the consolidated balance sheet at their fair value on a non-recurring basis | The following table presents the assets reported on the Consolidated Balance Sheet at their fair value on a non-recurring basis as of June 30, 2023 and December 31, 2022, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
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Schedule of listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques | The following tables present a listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques as of June 30, 2023 and December 31, 2022:
(1) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.
(1) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.
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Fair Value of Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value of financial instruments | The fair values of the Company’s financial instruments not recorded at fair value on a recurring or nonrecurring basis are as follows at June 30, 2023 and December 31, 2022:
(1) The financial instrument is carried at cost at, June 30, 2023 which approximate the fair value of the instruments
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Stock Options (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Stock Options Granted | Stock options outstanding as of June 30, 2023 are presented below:
A summary of stock option activity is presented below:
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following is a summary of the assumptions used in this model for stock options granted for the six months ended June 30, 2023:
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Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|---|---|---|
Assets | ||||||
Net impact of adoption | $ 12,791 | $ 15,780 | ||||
Allowance for credit losses | 11,592 | $ 11,734 | 15,637 | $ 14,393 | $ 14,023 | $ 14,176 |
ACL - off balance sheet credit exposure | $ 1,199 | 143 | ||||
Adoption impact | ||||||
Assets | ||||||
Net impact of adoption | (2,086) | |||||
Allowance for credit losses | (3,789) | |||||
ACL - off balance sheet credit exposure | $ 1,703 |
Per Share Data - Narrative (Details) - $ / shares |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Dec. 31, 2022 |
Aug. 27, 2015 |
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Earnings Per Share [Abstract] | |||||
Convertible securities which would affect denominator in calculating basic and dilutive earnings per share (in shares) | 0 | ||||
Options, outstanding (in shares) | 1,003,000 | 919,250 | 1,003,000 | 914,000 | 3,000 |
Outstanding, weighted average exercise price (in dollars per share) | $ 25.56 | $ 25.36 | $ 25.56 | $ 25.34 | |
Average share price (in dollars per share) | $ 25.10 | $ 23.78 |
Per Share Data - Composition of Weighted Average Common Shares Used in Earnings per Share Computation (Details) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Earnings Per Share [Abstract] | ||||
Weighted average common shares issued (in shares) | 7,572,243 | 7,557,402 | 7,570,443 | 7,555,113 |
Weighted average treasury stock shares (in shares) | (510,225) | (498,357) | (510,225) | (489,341) |
Weighted average shares outstanding - diluted (in shares) | 7,062,018 | 7,059,045 | 7,060,218 | 7,065,772 |
Weighted average shares outstanding - basic (in shares) | 7,062,018 | 7,059,045 | 7,060,218 | 7,065,772 |
Investment Securities - Narrative (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023
USD ($)
security
|
Jun. 30, 2023
USD ($)
security
|
Jun. 30, 2022
USD ($)
|
Dec. 31, 2022
USD ($)
|
|
Investments, Debt and Equity Securities [Abstract] | ||||
Number of individual securities that were in a continuous unrealized loss position for less than twelve months (in securities) | security | 62 | 62 | ||
Number of individual securities that were in a continuous unrealized loss position for greater than twelve months (in securities) | security | 171 | 171 | ||
Credit losses | $ 0 | |||
Gross proceeds from sales of securities | $ 22,725,000 | $ 0 | ||
Carrying value of investment securities pledged | 100,631,000 | 100,631,000 | $ 154,946,000 | |
Investment equity securities, at fair value | $ 1,143,000 | $ 1,143,000 | $ 1,142,000 |
Investment Securities - Amortized Cost and Fair Value of Debt Securities (Details) $ in Thousands |
Jun. 30, 2023
USD ($)
|
---|---|
Amortized Cost | |
Due in one year or less | $ 32,438 |
Due after one year to five years | 96,817 |
Due after five years to ten years | 62,073 |
Due after ten years | 7,643 |
Amortized Cost | 198,971 |
Fair Value | |
Due in one year or less | 31,949 |
Due after one year to five years | 90,609 |
Due after five years to ten years | 56,741 |
Due after ten years | 7,327 |
Total | $ 186,626 |
Investment Securities - Total Gross Proceeds from Sales of Securities (Details) - State and political securities - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Available for sale (AFS): | ||||
Available-for-sale securities, gross realized gains | $ 91 | $ 13 | $ 145 | $ 14 |
Available-for-sale securities, gross realized losses | $ 110 | $ 23 | $ (225) | $ (26) |
Investment Securities - Unrealized and Realized Gains and Losses Recognized in Net Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Equity Securities, FV-NI, Gain (Loss) [Abstract] | ||||
Net (losses) gains recognized in equity securities during the period | $ (20) | $ (44) | $ 1 | $ (103) |
Less: Net gains realized on the sale of equity securities during the period | 0 | 0 | 0 | 0 |
Unrealized (losses) gains recognized in equity securities held at reporting date | $ (20) | $ (44) | $ 1 | $ (103) |
Loans - Narrative (Details) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2023
USD ($)
category
|
Jun. 30, 2022
USD ($)
|
Jun. 30, 2023
USD ($)
contract
category
|
Jun. 30, 2022
USD ($)
contract
|
Dec. 31, 2022
USD ($)
|
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Non-accrual loans interest income | $ 66,000 | ||||
Number of TDRs that defaulted (in contracts) | contract | 0 | 0 | |||
Loan modifications | $ 0 | $ 0 | $ 0 | $ 0 | |
Troubled debt restructuring | 7,087,000 | 7,087,000 | $ 7,468,000 | ||
Real estate acquired through foreclosure | 2,112,000 | 2,112,000 | 950,000 | ||
Mortgage loans in process of foreclosure, amount | $ 456,000 | $ 456,000 | $ 890,000 | ||
Number of categories considered not criticized and rated as pass (in categories) | category | 6 | 6 | |||
Minimum period after which loans are considered as substandard (in days) | 90 days | ||||
Percentage of loan review evaluated | 0.55 | ||||
Real Estate | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Number of categories in which real estate loans segmented (in categories) | category | 3 |
Loans - Components of the Allowance (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|---|---|---|
Other Income and Expenses [Abstract] | ||||||
Allowance for credit losses | $ 11,592 | $ 11,734 | $ 15,637 | $ 14,393 | $ 14,023 | $ 14,176 |
ACL - off balance sheet credit exposure | 1,199 | 143 | ||||
Total ACL | $ 12,791 | $ 15,780 |
Loans - Schedule of Concentration Risk (Details) - Owners of rental properties - Financing receivable |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Residential | ||
Concentration Risk [Line Items] | ||
Concentration of loans (as a percent) | 18.79% | 19.65% |
Commercial | ||
Concentration Risk [Line Items] | ||
Concentration of loans (as a percent) | 14.80% | 16.11% |
Net Periodic Benefit Cost-Defined Benefit Plans (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Net periodic benefit cost of the domestic non-contributory defined benefit plan | ||||
Interest cost | $ 198,000 | $ 138,000 | $ 396,000 | $ 276,000 |
Expected return on plan assets | (326,000) | (413,000) | (652,000) | (825,000) |
Amortization of net loss | 37,000 | 18,000 | 74,000 | 35,000 |
Net periodic benefit | $ (91,000) | $ (257,000) | (182,000) | $ (514,000) |
Employer contributions made to the defined benefit plan | $ 0 |
Off-Balance Sheet Risk (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Dec. 31, 2022 |
|
Off Balance Sheet Risk | ||
Contract amounts representing credit risk | $ 176,903 | $ 186,638 |
Allowance for credit losses | 1,199 | 143 |
Commitments to extend credit | ||
Off Balance Sheet Risk | ||
Contract amounts representing credit risk | 159,795 | 169,365 |
Standby letters of credit | ||
Off Balance Sheet Risk | ||
Contract amounts representing credit risk | $ 9,750 | 9,915 |
Coverage period for instrument (in years) | 1 year | |
Credit exposure from the sale of assets with recourse | ||
Off Balance Sheet Risk | ||
Contract amounts representing credit risk | $ 7,358 | $ 7,358 |
Stock Options - Schedule of Stock Options Granted (Details) - $ / shares |
6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Jan. 20, 2023 |
Jan. 18, 2022 |
Apr. 09, 2021 |
Mar. 11, 2020 |
Mar. 15, 2019 |
Aug. 27, 2015 |
Jun. 30, 2023 |
Dec. 31, 2022 |
Jun. 30, 2022 |
|
Employee Stock Purchase Plan | |||||||||
Shares (in shares) | 58,125 | 89,000 | |||||||
Forfeited (in shares) | (26,250) | 0 | |||||||
Exercised (in shares) | (28,875) | ||||||||
Outstanding (in shares) | 3,000 | 1,003,000 | 914,000 | 919,250 | |||||
Strike price (in dollars per share) | $ 28.02 | $ 27.77 | |||||||
Vesting period (in years) | 5 years | ||||||||
Expiration (in years) | 10 years | ||||||||
Tranche One | |||||||||
Employee Stock Purchase Plan | |||||||||
Shares (in shares) | 59,500 | 156,000 | 156,500 | 119,300 | 120,900 | 59,500 | |||
Forfeited (in shares) | 0 | 0 | 0 | 0 | (18,300) | ||||
Exercised (in shares) | 0 | 0 | 0 | 0 | 0 | ||||
Outstanding (in shares) | 59,500 | 156,000 | 156,500 | 119,300 | 102,600 | ||||
Strike price (in dollars per share) | $ 27.77 | $ 24.10 | $ 24.23 | $ 25.34 | $ 28.01 | ||||
Vesting period (in years) | 3 years | 3 years | 3 years | 3 years | 3 years | ||||
Expiration (in years) | 10 years | 10 years | 10 years | 10 years | 10 years | ||||
Tranche Two | |||||||||
Employee Stock Purchase Plan | |||||||||
Shares (in shares) | 29,500 | 78,000 | 78,000 | 119,200 | 119,100 | 29,500 | |||
Forfeited (in shares) | 0 | 0 | 0 | 0 | (17,700) | ||||
Exercised (in shares) | 0 | 0 | 0 | 0 | 0 | ||||
Outstanding (in shares) | 29,500 | 78,000 | 78,000 | 119,200 | 101,400 | ||||
Strike price (in dollars per share) | $ 27.77 | $ 24.10 | $ 24.23 | $ 25.34 | $ 28.01 | ||||
Vesting period (in years) | 5 years | 5 years | 5 years | 5 years | 5 years | ||||
Expiration (in years) | 10 years | 10 years | 10 years | 10 years | 10 years |
Stock Options - Schedule of Options Outstanding (Details) - $ / shares |
6 Months Ended | |
---|---|---|
Aug. 27, 2015 |
Jun. 30, 2023 |
|
Shares | ||
Outstanding, beginning of year (in shares) | 914,000 | |
Granted (in shares) | 58,125 | 89,000 |
Forfeited (in shares) | (26,250) | 0 |
Expired (in shares) | 0 | |
Outstanding, end of period (in shares) | 3,000 | 1,003,000 |
Exercisable, end of period (in shares) | 224,900 | |
Weighted Average Exercise Price | ||
Outstanding, weighted average exercise price (in dollars per share) | $ 25.34 | |
Granted (in dollars per share) | $ 28.02 | 27.77 |
Forfeited (in dollars per share) | 0 | |
Expired (in dollars per share) | 0 | |
Outstanding, weighted average exercise price (in dollars per share) | 25.56 | |
Exercisable, end of period (in dollars per share) | $ 26.59 |
Stock Options - Fair Value Assumptions (Details) |
6 Months Ended |
---|---|
Jun. 30, 2023
$ / shares
| |
Share-Based Payment Arrangement [Abstract] | |
Risk-free interest rate | 3.76% |
Expected volatility | 31.00% |
Expected Annual dividend (in dollars per share) | $ 1.28 |
Expected life | 6 years 10 months 2 days |
Weighted average grant date fair value per option (in dollars per share) | $ 6.11 |
Reclassification of Comparative Amounts (Details) |
6 Months Ended |
---|---|
Jun. 30, 2023
USD ($)
| |
Reclassification of Comparative Amounts | |
Effect of reclassification adjustment on net income or shareholders' equity | $ 0 |
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