CAPITAL RATIOS AND SHAREHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2022

CAPITAL RATIOS AND SHAREHOLDERS' EQUITY

Schedule of Actual and Required Capital Ratios

	September 30, 2022
					Minimum Regulatory
	Actual				Capital Requirements
(in thousands, except ratios)	Amount		Ratio		Amount		Ratio
Company (consolidated)
Total capital to risk-weighted assets	$	404,804	13.42	%	$	241,314	8.00	%
Common equity tier 1 capital to risk-weighted assets		317,043	10.51			135,740	4.50
Tier 1 capital to risk-weighted assets		337,663	11.19			180,986	6.00
Tier 1 capital to average assets (leverage ratio)		337,663	9.13			147,908	4.00
Bank
Total capital to risk-weighted assets	$	398,292	13.22	%	$	241,079	8.00	%
Common equity tier 1 capital to risk-weighted assets		371,151	12.32			135,606	4.50
Tier 1 capital to risk-weighted assets		371,151	12.32			180,808	6.00
Tier 1 capital to average assets (leverage ratio)		371,151	10.05			147,791	4.00

	December 31, 2021
					Minimum Regulatory
	Actual				Capital Requirements
(in thousands, except ratios)	Amount		Ratio		Amount		Ratio
Company (consolidated)
Total capital to risk-weighted assets	$	380,690	14.31	%	$	212,798	8.00	%
Common equity tier 1 capital to risk-weighted assets		295,635	11.11			119,699	4.50
Tier 1 capital to risk-weighted assets		316,255	11.89			159,598	6.00
Tier 1 capital to average assets (leverage ratio)		316,255	8.66			146,029	4.00
Bank
Total capital to risk-weighted assets	$	375,435	14.13	%	$	220,425	8.00	%
Common equity tier 1 capital to risk-weighted assets		351,000	13.21			123,812	4.50
Tier 1 capital to risk-weighted assets		351,000	13.21			165,082	6.00
Tier 1 capital to average assets (leverage ratio)		351,000	9.62			151,082	4.00

Schedule of Components of Accumulated Other Comprehensive Income

(in thousands)	September 30, 2022		December 31, 2021
Accumulated other comprehensive income, before tax:
Net unrealized (loss) gain on AFS securities	$	(76,606)	$	2,580
Net unrealized (loss) gain on hedging derivatives		(4,316)		1,130
Net unrealized loss on post-retirement plans		(718)		(718)
Income taxes related to items of accumulated other comprehensive income:
Net unrealized loss (gain) on AFS securities		17,891		(595)
Net unrealized loss (gain) on hedging derivatives		994		(260)
Net unrealized loss on post-retirement plans		166		166
Accumulated other comprehensive (loss) income	$	(62,589)	$	2,303

Schedule of Components of Other Comprehensive Income (Loss)

The following table presents the components of other comprehensive income (loss) for the three and nine months ended September 30, 2022 and 2021:

(in thousands)	Before Tax		Tax Effect		Net of Tax
Three Months Ended September 30, 2022
Net unrealized loss on AFS securities:
Net unrealized loss arising during the period	$	(26,889)	$	6,512	$	(20,377)
Less: reclassification adjustment for gains (losses) realized in net income		44		(10)		34
Net unrealized loss on AFS securities		(26,933)		6,522		(20,411)
Net unrealized loss on hedging derivatives:
Net unrealized loss arising during the period		(1,568)		361		(1,207)
Less: reclassification adjustment for gains (losses) realized in net income		—		—		—
Net unrealized loss on cash flow hedging derivatives		(1,568)		361		(1,207)
Net unrealized loss on post-retirement plans:
Net unrealized loss arising during the period		—		—		—
Less: reclassification adjustment for gains (losses) realized in net income		—		—		—
Net unrealized loss on post-retirement plans		—		—		—
Other comprehensive loss	$	(28,501)	$	6,883	$	(21,618)
Three Months Ended September 30, 2021
Net unrealized gain on AFS securities:
Net unrealized gain arising during the period	$	(1,770)	$	403	$	(1,367)
Less: reclassification adjustment for gains (losses) realized in net income		1,930		(458)		1,472
Net unrealized gain on AFS securities		(3,700)		861		(2,839)
Net unrealized gain on derivative hedgess:
Net unrealized gain arising during the period		(203)		48		(155)
Less: reclassification adjustment for gains (losses) realized in net income		—		—		—
Net unrealized gain on cash flow derivative hedges		(203)		48		(155)
Net unrealized loss on post-retirement plans:
Net unrealized loss arising during the period		—		—		—
Less: reclassification adjustment for gains (losses) realized in net income		—		—		—
Net unrealized loss on post-retirement plans		—		—		—
Other comprehensive (loss) income	$	(3,903)	$	909	$	(2,994)

(in thousands)	Before Tax		Tax Effect		Net of Tax
Nine Months Ended September 30, 2022
Net unrealized loss on AFS securities:
Net unrealized loss arising during the period	$	(79,133)	$	18,474	$	(60,659)
Less: reclassification adjustment for gains (losses) realized in net income		53		(12)		41
Net unrealized loss on AFS securities		(79,186)		18,486		(60,700)
Net unrealized loss on hedging derivatives:
Net unrealized loss arising during the period		(5,446)		1,254		(4,192)
Less: reclassification adjustment for gains (losses) realized in net income		—		—		—
Net unrealized gain on hedging derivatives		(5,446)		1,254		(4,192)
Net unrealized loss on post-retirement plans:
Net unrealized loss arising during the period		—		—		—
Less: reclassification adjustment for gains (losses) realized in net income		—		—		—
Net unrealized loss on post-retirement plans		—		—		—
Other comprehensive loss	$	(84,632)	$	19,740	$	(64,892)
Nine Months Ended September 30, 2021
Net unrealized loss on AFS securities:
Net unrealized loss arising during the period	$	(5,348)	$	1,234	$	(4,114)
Less: reclassification adjustment for gains realized in net income		1,980		(469)		1,511
Net unrealized loss on AFS securities		(7,328)		1,703		(5,625)
Net unrealized gain on hedging derivatives:
Net unrealized gain arising during the period		2,311		(538)		1,773
Less: reclassification adjustment for gains (losses) realized in net income		—		—		—
Net unrealized gain on cash flow hedging derivatives		2,311		(538)		1,773
Net unrealized loss on post-retirement plans:
Net unrealized loss arising during the period		—		—		—
Less: reclassification adjustment for gains (losses) realized in net income		—		—		—
Net unrealized loss on post-retirement plans		—		—		—
Other comprehensive (loss) income	$	(5,017)	$	1,165	$	(3,852)

Schedule of Changes in Components of Accumulated Other Comprehensive Income (Loss)

	Net unrealized		Net gain (loss) on		Net unrealized
	gain (loss)		effective cash		loss
	on AFS		flow hedging		on pension
(in thousands)	Securities		derivatives		plans		Total
Three Months Ended September 30, 2022
Balance at beginning of period	$	(38,304)	$	(2,115)	$	(552)	$	(40,971)
Other comprehensive loss before reclassifications		(20,377)		(1,207)		—		(21,584)
Less: amounts reclassified from accumulated other comprehensive income		34		—		—		34
Total other comprehensive income		(20,411)		(1,207)		—		(21,618)
Balance at end of period	$	(58,715)	$	(3,322)	$	(552)	$	(62,589)
Three Months Ended September 30, 2021
Balance at beginning of period	$	7,237	$	63	$	(1,418)	$	5,882
Other comprehensive gain before reclassifications		(1,367)		(155)		—		(1,522)
Less: amounts reclassified from accumulated other comprehensive income		1,472		—		—		1,472
Total other comprehensive income		(2,839)		(155)		—		(2,994)
Balance at end of period	$	4,398	$	(92)	$	(1,418)	$	2,888
Nine Months Ended September 30, 2022
Balance at beginning of period	$	1,985	$	870	$	(552)	$	2,303
Other comprehensive loss before reclassifications		(60,659)		(4,192)		—		(64,851)
Less: amounts reclassified from accumulated other comprehensive income		41		—		—		41
Total other comprehensive loss		(60,700)		(4,192)		—		(64,892)
Balance at end of period	$	(58,715)	$	(3,322)	$	(552)	$	(62,589)
Nine Months Ended September 30, 2021
Balance at beginning of period	$	10,023	$	(1,865)	$	(1,418)	$	6,740
Other comprehensive (loss) gain before reclassifications		(4,114)		1,773		—		(2,341)
Less: amounts reclassified from accumulated other comprehensive income		1,511		—		—		1,511
Total other comprehensive (loss) gain		(5,625)		1,773		—		(3,852)
Balance at end of period	$	4,398	$	(92)	$	(1,418)	$	2,888

Reclassification out of Accumulated Other Comprehensive Income (Loss)

	Three Months Ended September 30,				Nine Months Ended September 30,				Affected Line Item where
(in thousands)	2022		2021		2022		2021		Net Income is Presented
Net realized gains on AFS securities:
Before tax (1)	$	44	$	1,930	$	53	$	1,980	Non-interest income
Tax effect		(10)		(458)		(12)		(469)	Tax expense
Total reclassifications for the period	$	34	$	1,472	$	41	$	1,511

(1) Net realized gains before tax include $141 thousand realized gains for the three months ended September 30, 2022 and $97 thousand of gross realized losses. Net realized gains before tax include $150 thousand realized gains for the nine months ended September 30, 2022 and $97 thousand of gross realized losses. Net realized gains before tax include $1.9 million realized gains for the three months ended September 30, 2021 and $97 thousand of gross realized losses. Net realized gains before tax include $2.0 million realized gains for the nine months ended September 30, 2021 and $50 thousand of gross realized losses.