10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

OR

☐       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Commission File No.      0-28190

CAMDEN NATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

Maine			01-0413282
(State or other jurisdiction of			(I.R.S. Employer
incorporation or organization)			Identification No.)
2 ELM STREET	CAMDEN	ME	04843
(Address of principal executive offices)			(Zip Code)

Registrant's telephone number, including area code:  (207) 236-8821

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, without par value	CAC	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x          No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x          No ¨

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

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

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

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

Yes ☐          No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date:

Outstanding at October 28, 2022: Common stock (no par value) 14,565,409 shares.

CAMDEN NATIONAL CORPORATION

 FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2022

TABLE OF CONTENTS OF INFORMATION REQUIRED IN REPORT

		PAGE
PART I.  FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS
	Consolidated Statements of Condition (unaudited) - September 30, 2022 and December 31, 2021	3
	Consolidated Statements of Income (unaudited) - Three and Nine Months Ended September 30, 2022 and 2021	4
	Consolidated Statements of Comprehensive (Loss) Income (unaudited) - Three and Nine Months Ended September 30, 2022 and 2021	5
	Consolidated Statements of Changes in Shareholders’ Equity (unaudited) - Three and Nine Months Ended September 30, 2022 and 2021	6
	Consolidated Statements of Cash Flows (unaudited) - Nine Months Ended September 30, 2022 and 2021	7
	Notes to the Unaudited Consolidated Financial Statements	8
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	43
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	74
ITEM 4.	CONTROLS AND PROCEDURES	75
PART II. OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	76
ITEM 1A.	RISK FACTORS	76
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	76
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	76
ITEM 4.	MINE SAFETY DISCLOSURES	76
ITEM 5.	OTHER INFORMATION	76
ITEM 6.	EXHIBITS	76
SIGNATURES		78

2

PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF CONDITION

(unaudited)

(In thousands, except number of shares)	September 30,  2022		December 31,  2021
ASSETS
Cash and due from banks	$	55,073	$	38,902
Interest-bearing deposits in other banks (including restricted cash)	26,939		181,723
Total cash, cash equivalents and restricted cash	82,012		220,625
Investments:
Trading securities	3,727		4,428
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	723,618		1,507,486
Held-to-maturity securities, at amortized cost (fair value of $491,759 and $1,380, respectively)	534,309		1,291
Other investments	15,108		10,280
Total investments	1,276,762		1,523,485
Loans held for sale, at fair value (book value of $4,863 and $5,786, respectively)	4,629		5,815
Loans	3,860,680		3,431,474
Less: allowance for credit losses on loans	(36,542)		(33,256)
Net loans	3,824,138		3,398,218
Goodwill	94,697		94,697
Core deposit intangible assets	1,719		2,188
Bank-owned life insurance	98,760		97,241
Premises and equipment, net	36,179		37,775
Deferred tax assets	53,693		19,210
Other assets	79,135		101,102
Total assets	$	5,551,724	$	5,500,356
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits:
Non-interest checking	$	1,245,137	$	1,279,565
Interest checking	1,460,571		1,351,736
Savings and money market	1,493,518		1,459,472
Certificates of deposit	279,603		309,648
Brokered deposits	89,775		208,468
Total deposits	4,568,604		4,608,889
Short-term borrowings	421,101		211,608
Subordinated debentures	44,331		44,331
Accrued interest and other liabilities	86,681		94,234
Total liabilities	5,120,717		4,959,062
Commitments and Contingencies
Shareholders’ Equity
Common stock, no par value: authorized 40,000,000 shares, issued and outstanding 14,563,828 and 14,739,956 shares on September 30, 2022 and December 31, 2021, respectively	114,536		123,111
Retained earnings	452,927		424,412
Accumulated other comprehensive loss	(136,456)		(6,229)
Total shareholders’ equity	431,007		541,294
Total liabilities and shareholders’ equity	$	5,551,724	$	5,500,356

The accompanying notes are an integral part of these consolidated financial statements.

3

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except number of shares and per share data)	2022		2021		2022		2021
Interest Income
Interest and fees on loans	$	37,568	$	31,185	$	102,724	$	92,610
Taxable interest on investments	5,756		5,157		17,395		13,362
Nontaxable interest on investments	790		756		2,324		2,247
Dividend income	137		99		349		306
Other interest income	330		182		677		508
Total interest income	44,581		37,379		123,469		109,033
Interest Expense
Interest on deposits	5,442		1,973		9,785		5,957
Interest on borrowings	787		122		1,372		454
Interest on subordinated debentures	539		538		1,600		1,983
Total interest expense	6,768		2,633		12,757		8,394
Net interest income	37,813		34,746		110,712		100,639
Provision (credit) for credit losses	2,764		939		4,034		(4,420)
Net interest income after provision (credit) for credit losses	35,049		33,807		106,678		105,059
Non-Interest Income
Debit card income	3,234		3,278		9,371		9,126
Service charges on deposit accounts	1,941		1,744		5,705		4,800
Income from fiduciary services	1,535		1,627		4,847		4,860
Brokerage and insurance commissions	1,003		993		3,269		2,885
Mortgage banking income, net	635		1,913		3,186		11,620
Bank-owned life insurance	374		589		1,519		1,774
Net loss on sale of securities	—		—		(9)		—
Other income	1,232		955		3,032		2,569
Total non-interest income	9,954		11,099		30,920		37,634
Non-Interest Expense
Salaries and employee benefits	15,849		15,902		46,757		45,742
Furniture, equipment and data processing	3,305		2,980		9,639		8,954
Net occupancy costs	1,765		1,813		5,715		5,569
Debit card expense	1,210		1,106		3,410		3,166
Consulting and professional fees	814		792		3,114		2,652
Regulatory assessments	575		522		1,745		1,512
Amortization of core deposit intangible assets	156		163		469		491
Other real estate owned and collection costs (recoveries), net	56		60		9		(156)
Other expenses	3,361		2,925		8,998		8,822
Total non-interest expense	27,091		26,263		79,856		76,752
Income before income tax expense	17,912		18,643		57,742		65,941
Income Tax Expense	3,645		4,003		11,654		13,418
Net Income	$	14,267	$	14,640	$	46,088	$	52,523
Per Share Data
Basic earnings per share	$	0.97	$	0.98	$	3.13	$	3.51
Diluted earnings per share	$	0.97	$	0.97	$	3.12	$	3.49
Cash dividends declared per share	$	0.40	$	0.36	$	1.20	$	1.08
Weighted average number of common shares outstanding	14,619,460		14,931,056		14,670,450		14,930,387
Diluted weighted average number of common shares outstanding	14,675,332		14,999,013		14,728,349		14,996,541

The accompanying notes are an integral part of these consolidated financial statements.  

4

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Net Income	$	14,267	$	14,640	$	46,088	$	52,523
Other comprehensive loss:
Net change in unrealized loss on debt securities, net of tax	(24,231)		(5,139)		(139,095)		(20,352)
Net change in unrealized gain (loss) on cash flow hedging derivatives, net of tax	2,560		467		8,324		3,267
Net change in other comprehensive income for supplemental executive retirement plan and other postretirement benefit plan, net of tax	181		171		544		512
Other comprehensive loss	(21,490)		(4,501)		(130,227)		(16,573)
Comprehensive (Loss) Income	$	(7,223)	$	10,139	$	(84,139)	$	35,950

The accompanying notes are an integral part of these consolidated financial statements.

5

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(unaudited)

	Three Months Ended
	Common Stock			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
(In thousands, except number of shares and per share data)	Shares Outstanding	Amount
Balance at June 30, 2021	14,951,067	$	132,278	$	404,602	$	8,668	$	545,548
Net income	—	—		14,640		—		14,640
Other comprehensive loss, net of tax	—	—		—		(4,501)		(4,501)
Stock-based compensation expense	—	493		—		—		493
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings	4,762	67		—		—		67
Common stock repurchased	(106,502)	(4,913)		—		—		(4,913)
Cash dividends declared ($0.36 per share)	—	—		(5,350)		—		(5,350)
Balance at September 30, 2021	14,849,327	$	127,925	$	413,892	$	4,167	$	545,984
Balance at June 30, 2022	14,625,041	$	116,825	$	444,522	$	(114,966)	446,381
Net income	—	—		14,267		—		14,267
Other comprehensive loss, net of tax	—	—		—		(21,490)		(21,490)
Stock-based compensation expense	—	522		—		—		522
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings	2,476	16		—		—		16
Common stock repurchased	(63,689)	(2,827)		—		—		(2,827)
Cash dividends declared ($0.40 per share)	—	—		(5,862)		—		(5,862)
Balance at September 30, 2022	14,563,828	$	114,536	$	452,927	$	(136,456)	$	431,007

	Nine Months Ended
	Common Stock			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
(In thousands, except number of shares and per share data)	Shares Outstanding	Amount
Balance at December 31, 2020	14,909,097	$	131,072	$	377,502	$	20,740	$	529,314
Net income	—	—		52,523		—		52,523
Other comprehensive loss, net of tax	—	—		—		(16,573)		(16,573)
Stock-based compensation expense	—	2,007		—		—		2,007
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings	46,732	(241)		—		—		(241)
Common stock repurchased	(106,502)	(4,913)		—		—		(4,913)
Cash dividends declared ($1.08 per share)	—	—		(16,133)		—		(16,133)
Balance at September 30, 2021	14,849,327	$	127,925	$	413,892	$	4,167	$	545,984
Balance at December 31, 2021	14,739,956	$	123,111	$	424,412	$	(6,229)	$	541,294
Net income	—	—		46,088		—		46,088
Other comprehensive loss, net of tax	—	—		—		(130,227)		(130,227)
Stock-based compensation expense	—	2,039		—		—		2,039
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings	49,117	(374)		—		—		(374)
Common stock repurchased	(225,245)	(10,240)		—		—		(10,240)
Cash dividends declared ($1.20 per share)	—	—		(17,573)		—		(17,573)
Balance at September 30, 2022	14,563,828	$	114,536	$	452,927	$	(136,456)	$	431,007

The accompanying notes are an integral part of these consolidated financial statements.

6

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Nine Months Ended September 30,
(In thousands)	2022		2021
Operating Activities
Net Income	$	46,088	$	52,523
Adjustments to reconcile net income to net cash provided by operating activities:
Originations of mortgage loans held for sale	(130,725)		(359,842)
Proceeds from the sale of mortgage loans	134,597		400,812
Gain on sale of mortgage loans, net of origination costs	(2,948)		(11,260)
Provision (credit) for credit losses	4,034		(4,420)
Depreciation and amortization expense	2,638		2,779
Investment securities amortization and accretion, net	3,118		5,238
Stock-based compensation expense	2,039		2,007
Amortization of core deposit intangible assets	469		491
Purchase accounting accretion, net	(197)		(589)
Net gain on sale of premises and equipment	(204)		—
Net decrease in derivative collateral posted	30,470		25,090
(Increase) decrease in other assets	(765)		2,827
Decrease in other liabilities	(3,899)		(3,994)
Net cash provided by operating activities	84,715		111,662
Investing Activities
Proceeds from available-for-sale debt securities	160,708		248,186
Purchase of available-for-sale debt securities	(80,868)		(618,744)
Proceeds from paydowns of held-to-maturity securities	15,192		—
Purchase of held-to-maturity securities	(24,502)		—
Net increase in loans	(429,948)		(95,720)
Purchase of Federal Home Loan Bank stock	(29,104)		(68)
Proceeds from sale of Federal Home Loan Bank stock	24,276		1,329
Purchase of premises and equipment	(1,348)		(1,549)
Proceeds from the sale of premises and equipment	466		—
Recoveries of previously charged-off loans	437		272
Proceeds from the sale of other real estate owned	287		465
Net cash used in investing activities	(364,404)		(465,829)
Financing Activities
Net (decrease) increase in deposits	(40,285)		599,936
Net proceeds from borrowings less than 90 days	209,493		49,113
Repayments of Federal Home Loan Bank long-term advances	—		(25,000)
Repayment of subordinated debt	—		(15,000)
Common stock repurchases	(9,968)		(4,924)
Exercise of stock options and issuance of restricted stock, net of repurchase for tax withholdings	(374)		(241)
Cash dividends paid on common stock	(17,671)		(15,721)
Finance lease payments	(119)		(114)
Net cash provided by financing activities	141,076		588,049
Net (decrease) increase in cash, cash equivalents and restricted cash	(138,613)		233,882
Cash, cash equivalents, and restricted cash at beginning of period	220,625		145,774
Cash, cash equivalents and restricted cash at end of period	$	82,012	$	379,656
Supplemental information
Transfer from available-for-sale securities to held-to-maturity securities1	$	592,438	$	—
Interest paid	12,565		8,523
Income taxes paid	9,761		14,277
Cash dividends declared, not paid	5,861		5,348
Unsettled common stock repurchase	272		—
Transfer from premises to other real estate owned	—		204

(1)    As of the date of transfer, the amortized cost basis of the debt securities was $592.4 million, fair value was $520.3 million and the net pre-tax unrealized losses included in AOCI was $72.1 million. Refer to Note 3 for further details.

The accompanying notes are an integral part of these consolidated financial statements.

7

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited consolidated interim financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include all disclosures required by accounting principles generally accepted in the United States of America for complete presentation of financial statements. In the opinion of management, the consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the consolidated statements of condition of Camden National Corporation (the "Company") as of September 30, 2022 and December 31, 2021, the consolidated statements of income for the three and nine months ended September 30, 2022 and 2021, the consolidated statements of comprehensive (loss) income for the three and nine months ended September 30, 2022 and 2021, the consolidated statements of changes in shareholders' equity for the three and nine months ended September 30, 2022 and 2021, and the consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021. The consolidated financial statements include the accounts of the Company and Camden National Bank (the "Bank"), a wholly-owned subsidiary of the Company (which includes the consolidated accounts of Healthcare Professional Funding Corporation ("HPFC") and Property A, Inc. as of and for the three and nine months ended September 30, 2022 and 2021). All intercompany accounts and transactions have been eliminated in consolidation. Assets held by the Bank in a fiduciary capacity, through Camden National Wealth Management, a division of the Bank, are not assets of the Company and, therefore, are not included in the consolidated statements of condition. The Company also owns 100% of the common stock of Camden Capital Trust A and Union Bankshares Capital Trust I. These entities are unconsolidated subsidiaries of the Company. Certain reclassifications may have been made to prior period amounts to conform to the current period presentation. Any such reclassifications did not impact net income or shareholders' equity as previously reported. Net income reported for the three and nine months ended September 30, 2022, is not necessarily indicative of the results that may be expected for the full year. The information in this report should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

8

The acronyms, abbreviations and definitions identified below are used throughout this Form 10-Q, including Part I. "Financial Information" and Part II. "Management's Discussion and Analysis of Financial Condition and Results of Operations." The following is provided to aid the reader and provide a reference page when reviewing these sections of the Form 10-Q.

Acronym	Description	Acronym	Description
AFS:	Available-for-sale	FRBB:	Federal Reserve Bank of Boston
ALCO:	Asset/Liability Committee	GAAP:	Generally accepted accounting principles in the United States
ACL:	Allowance for credit losses	GDP:	Gross domestic product
AOCI:	Accumulated other comprehensive income (loss)	HPFC:	Healthcare Professional Funding Corporation, a wholly-owned subsidiary of Camden National Bank
ASC:	Accounting Standards Codification	HTM:	Held-to-maturity
ASU:	Accounting Standards Update	IRS:	Internal Revenue Service
Bank:	Camden National Bank, a wholly-owned subsidiary of Camden National Corporation	LGD:	Loss given default
BOLI:	Bank-owned life insurance	LIBOR:	London Interbank Offered Rate
Board ALCO:	Board of Directors' Asset/Liability Committee	LTIP:	Long-Term Performance Share Plan
CARES Act:	Coronavirus Aid, Relief, and Economic Security Act, signed into law in March 2020 in response to COVID-19	Management ALCO:	Management Asset/Liability Committee
CCTA:	Camden Capital Trust A, an unconsolidated entity formed by Camden National Corporation	MBS:	Mortgage-backed security
CDs:	Certificate of deposits	MSPP:	Management Stock Purchase Plan
CECL:	Current Expected Credit Losses	N/A:	Not applicable
Company:	Camden National Corporation	N.M.:	Not meaningful
CMO:	Collateralized mortgage obligation	OCC:	Office of the Comptroller of the Currency
CUSIP:	Committee on Uniform Securities Identification Procedures	OCI:	Other comprehensive income (loss)
DCRP:	Defined Contribution Retirement Plan	OREO:	Other real estate owned
EPS:	Earnings per share	OTTI:	Other-than-temporary impairment
FASB:	Financial Accounting Standards Board	PD:	Probability of default
FDIC:	Federal Deposit Insurance Corporation	SBA:	U.S. Small Business Administration
FHLB:	Federal Home Loan Bank	SBA PPP:	U.S. Small Business Administration Paycheck Protection Program
FHLBB:	Federal Home Loan Bank of Boston	SERP:	Supplemental executive retirement plans
FHLMC:	Federal Home Loan Mortgage Corporation	SOFR:	Secured Overnight Financing Rate
FNMA:	Federal National Mortgage Association	TDR:	Troubled-debt restructured loan
FOMC:	Federal Open Market Committee	UBCT:	Union Bankshares Capital Trust I, an unconsolidated entity formed by Union Bankshares Company that was subsequently acquired by Camden National Corporation
FRB:	Federal Reserve System Board of Governors	U.S.:	United States of America

9

NOTE 2 – RECENT ACCOUNTING PRONOUNCEMENTS

The following provides a brief description of recently issued accounting pronouncements that have yet to be adopted by the Company:

ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02"). The FASB issued ASU 2022-02 to provide new guidance on TDRs and write-offs for entities that have adopted ASU 2016-13. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the effect of ASU 2022-02 on its consolidated financial statements and does not anticipate a material impact upon adoption.

ASU No. 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method ("ASU 2022-01"). The FASB issued ASU 2022-01 to amend ASU 2017-12, which was adopted by the Company in 2018. This amendment renames the "last-of-layer" method to the "portfolio layer" method, permits non-repayable financial assets to be included in a closed portfolio hedged using the portfolio layer method, and provides additional guidance for entities that apply the portfolio layer method of hedge accounting in accordance with Topic 815. The amendment is effective for fiscal years beginning after December 15, 2022. The Company is currently evaluating the amendment and does not anticipate a material impact on its consolidated financial statements upon adoption of this guidance.

NOTE 3 – INVESTMENTS

Trading Securities

Trading securities are reported on the Company's consolidated statements of condition at fair value. As of September 30, 2022 and December 31, 2021, the fair value of the Company's trading securities were $3.7 million and $4.4 million, respectively. These securities are held in a rabbi trust account and invested in mutual funds. The trading securities will be used for future payments associated with the Company's deferred compensation plan for eligible employees and directors.

AFS Debt Securities

AFS debt securities are reported on the Company's consolidated statements of condition at fair value. The following table summarizes the amortized cost, estimated fair value, and unrealized gains (losses) of AFS debt securities, as of the dates indicated:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
September 30, 2022
Obligations of states and political subdivisions	$	53,247	$	1	$	(1,774)	$	51,474
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	622,660		65		(92,937)		529,788
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	134,872		—		(13,061)		121,811
Subordinated corporate bonds	23,109		—		(2,564)		20,545
Total AFS debt securities	$	833,888	$	66	$	(110,336)	$	723,618
December 31, 2021
Obligations of U.S. government-sponsored enterprises	$	8,585	$	—	$	(241)	$	8,344
Obligations of states and political subdivisions	112,086		5,392		—		117,478
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	1,003,869		7,856		(11,468)		1,000,257
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	361,781		2,835		(5,767)		358,849
Subordinated corporate bonds	22,660		152		(254)		22,558
Total AFS debt securities	$	1,508,981	$	16,235	$	(17,730)	$	1,507,486

As of September 30, 2022 and December 31, 2021, there was no allowance carried on AFS debt securities.

10

In June of 2022, the Company transferred securities with a fair value of $520.3 million from AFS to HTM. The unrealized losses on the AFS debt securities at the time of transfer were $72.1 million, pre-tax, and were reported within AOCI. These unrealized losses are being amortized over the remaining life of the securities from AOCI into interest income on the consolidated statements of income. At September 30, 2022, the net unrealized losses on the transferred securities reported within AOCI were $53.7 million, net of a deferred tax asset of $14.7 million.

The net unrealized losses on AFS debt securities reported within AOCI (excluding the aforementioned securities transferred from AFS to HTM) at September 30, 2022, were $86.6 million, net of a deferred tax asset of $23.7 million and at December 31, 2021 were $1.2 million, net of a deferred tax asset of $321,000.

The following table details the Company's sales of AFS debt securities for the periods indicated below:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Proceeds from sales of investments	$	—	$	—	$	8,723	$	—
Gross realized gains	—		—		13		—
Gross realized losses	—		—		(22)		—

The following table presents the Company's AFS debt securities with gross unrealized losses, for which an ACL has not been recorded, segregated by the length of time the securities have been in a continuous loss position, as of the dates indicated:  

		Less Than 12 Months				12 Months or More				Total
(In thousands, except number of holdings)	Number of Holdings	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2022
Obligations of states and political subdivisions	101	$	51,026	$	(1,774)	$	—	$	—	$	51,026	$	(1,774)
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	172	203,082		(24,432)		322,251		(68,505)		525,333		(92,937)
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	76	83,532		(7,433)		38,279		(5,628)		121,811		(13,061)
Subordinated corporate bonds	13	9,071		(910)		11,474		(1,654)		20,545		(2,564)
Total AFS debt securities	362	$	346,711	$	(34,549)	$	372,004	$	(75,787)	$	718,715	$	(110,336)
December 31, 2021
Obligations of U.S. government-sponsored enterprises	4	$	8,344	$	(241)	$	—	$	—	$	8,344	$	(241)
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	113	659,851		(8,999)		61,978		(2,469)		721,829		(11,468)
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	56	191,456		(4,602)		38,117		(1,165)		229,573		(5,767)
Subordinated corporate bonds	7	11,932		(232)		979		(22)		12,911		(254)
Total AFS debt securities	180	$	871,583	$	(14,074)	$	101,074	$	(3,656)	$	972,657	$	(17,730)

For the three and nine months ended September 30, 2022 and 2021, the unrealized losses on the Company's AFS debt securities have not been recognized into income because management does not intend to sell and it is not more-likely-than-not it

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will be required to sell any of the AFS debt securities before recovery of its amortized cost basis. Furthermore, the unrealized losses were due to changes in interest rates and other market conditions and were not reflective of credit events, the issuers continue to make timely principal and interest payments on the bonds. Agency-backed and government-sponsored enterprise securities have a long 40 year history with no credit losses, including during times of severe stress like the 2007-2008 financial crisis. The principal and interest payments on agency guaranteed debt is backed by the U.S. government. Government-sponsored enterprises similarly guarantee principal and interest payments and carry an implicit guarantee from the U.S. Department of the Treasury. Additionally, government-sponsored enterprise securities are exceptionally liquid, readily marketable, and provide a substantial amount of price transparency and price parity, indicating a perception of zero credit losses.

At September 30, 2022 and December 31, 2021, total accrued interest receivable on AFS debt securities, which has been excluded from reported amortized cost basis on AFS debt securities, was $2.0 million and $3.4 million, respectively, and was reported within other assets on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date.

The amortized cost and estimated fair values of the Company's AFS debt securities by contractual maturity at September 30, 2022, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-related securities are shown in total, as their maturities are highly variable.

(In thousands)	Amortized Cost		Fair Value
Due in one year or less	$	501	$	500
Due after one year through five years	15,785		14,033
Due after five years through ten years	60,070		57,486
Due after ten years	—		—
Subtotal	76,356		72,019
Mortgage-related securities	757,532		651,599
Total	$	833,888	$	723,618

HTM Debt Securities

HTM debt securities are reported on the Company's consolidated statements of condition at amortized cost. The following table summarizes the amortized cost, estimated fair value and unrealized gains (losses) of HTM debt securities as of the dates indicated:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
September 30, 2022
Obligations of U.S. government-sponsored enterprises	$	7,422	$	—	$	(664)	$	6,758
Obligations of states and political subdivisions	55,908		—		(3,595)		52,313
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	320,850		—		(27,067)		293,783
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	147,753		—		(10,990)		136,763
Subordinated corporate bonds	2,376		—		(234)		2,142
Total HTM debt securities	$	534,309	$	—	$	(42,550)	$	491,759
December 31, 2021
Obligations of states and political subdivisions	$	1,291	$	89	$	—	$	1,380
Total HTM debt securities	$	1,291	$	89	$	—	$	1,380

In June of 2022, the Company transferred securities with a fair value of $520.3 million from AFS to HTM. See discussion above for details.

As of September 30, 2022, the Company's HTM debt securities portfolio was primarily comprised of holdings issued or guaranteed by U.S. government sponsored enterprises and municipal debt. Agency-backed and government-sponsored

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enterprise securities have a long 40 year history with no credit losses, including during times of severe stress like the 2007-2008 financial crisis. The principal and interest payments on agency guaranteed debt is backed by the U.S. government. Government-sponsored enterprises similarly guarantee principal and interest payments and carry an implicit guarantee from the U.S. Department of the Treasury. Additionally, government-sponsored enterprise securities are exceptionally liquid, readily marketable, and provide a substantial amount of price transparency and price parity, indicating a perception of zero credit losses. HTM municipal debt holdings are comprised solely of high credit quality (rated A- or higher) state and municipal obligations. High credit quality state and municipal obligations have a history of zero to near-zero credit loss. As of December 31, 2021, the Company’s HTM debt securities portfolio was made up of three investment grade municipal debt securities, of which two securities also carried credit enhancements. Accordingly, the Company determined that the expected credit loss on its HTM portfolio was immaterial, and therefore it did not carry an allowance on its HTM debt securities at September 30, 2022 or December 31, 2021.

As of September 30, 2022 and December 31, 2021, none of the Company's HTM debt securities were past due or on non-accrual status. For the three and nine months ended September 30, 2022 and 2021, the Company did not recognize any interest income on non-accrual HTM debt securities. At September 30, 2022 and December 31, 2021, total accrued interest receivable on HTM debt securities, which has been excluded from reported amortized cost basis on HTM debt securities, was $1.4 million and $10,000, respectively, and was reported within other assets on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date.

The amortized cost and estimated fair values of HTM debt securities by contractual maturity at September 30, 2022 are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(In thousands)	Amortized Cost		Fair Value
Due in one year or less	$	—	$	—
Due after one year through five years	864		845
Due after five years through ten years	14,562		13,538
Due after ten years	50,280		46,830
Subtotal	65,706		61,213
Mortgage-related securities	468,603		430,546
Total	$	534,309	$	491,759

AFS and HTM Debt Securities Pledged

At September 30, 2022 and December 31, 2021, AFS and HTM debt securities with an amortized cost of $765.8 million and $640.1 million and estimated fair values of $673.6 million and $641.2 million, respectively, were pledged to secure FHLBB advances, public deposits, and securities sold under agreements to repurchase and for other purposes required or permitted by law.

Other Investments

The Company's FHLBB and FRB common stock are reported at cost within other investments on the consolidated statements of condition. The Company evaluates these investments for impairment based on the ultimate recoverability of the par value. The Company did not record any impairment on its FHLBB and FRB stock for the three and nine months ended September 30, 2022 and 2021.

The following table summarizes the Company's investment in FHLBB stock and FRBB stock as presented within other investments on the consolidated statements of condition, as of the dates indicated:

(In thousands)	September 30, 2022		December 31, 2021
FHLBB	$	9,734	$	4,906
FRB	5,374		5,374
Total other investments	$	15,108	$	10,280

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NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS

Loans

The composition of the Company’s loan portfolio, excluding residential loans held for sale, was as follows for the dates indicated:

(In thousands)	September 30, 2022		December 31, 2021
Commercial Loans:
Commercial real estate - non-owner-occupied	$	1,229,102	$	1,178,185
Commercial real estate - owner-occupied	333,785		317,275
Commercial	423,325		363,695
SBA PPP	685		35,953
Total commercial loans	1,986,897		1,895,108
Retail Loans:
Residential real estate	1,619,409		1,306,447
Home equity	233,367		210,403
Consumer	21,007		19,516
Total retail loans	1,873,783		1,536,366
Total loans	$	3,860,680	$	3,431,474

The loan balances for each portfolio segment presented above are net of their respective unamortized fair value mark discount on acquired loans and net of unamortized loan origination costs for the dates indicated:

(In thousands)	September 30, 2022		December 31, 2021
Net unamortized fair value mark discount on acquired loans	$	(396)	$	(593)
Net unamortized loan origination costs(1)	6,429		3,110
Total	$	6,033	$	2,517

(1)    Net unamortized loan origination costs includes unrecognized origination fees for SBA PPP loans of $20,000 and $1.2 million as of September 30, 2022 and December 31, 2021, respectively.

The Company's lending activities are primarily conducted in Maine, but also include loan production offices in Massachusetts and New Hampshire. The Company originates single- and multi-family residential loans, commercial real estate loans, business loans, municipal loans and a variety of consumer loans. In addition, the Company makes loans for the construction of residential homes, multi-family properties and commercial real estate properties. The ability and willingness of borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the geographic area and the general economy.

SBA PPP Loans. Beginning in April 2020, the Company originated SBA PPP loans issued to qualifying businesses as part of the federal stimulus packages issued due to the COVID-19 pandemic. This program provided qualifying businesses a specialized, low-interest-rate loan by the U.S. Treasury Department and was administered by the SBA. SBA PPP loans provided borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilized the loan proceeds to cover employee compensation-related business operating costs, as well as certain other costs up to pre-established limits. Effective May 31, 2021, the SBA PPP loan program ended and the Company ceased originating loans under this program.

For the year ended December 31, 2021, the Company originated 1,620 SBA PPP loans totaling $102.2 million to qualifying businesses across our markets in need of financial support due to the COVID-19 pandemic. Of these SBA PPP loans originated during the year ended December 31, 2021, 6 loans totaling $685,000 remained outstanding as of September 30, 2022.

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Related Party Loans. In the normal course of business, the Bank makes loans to certain officers, directors and their associated companies, under terms that are consistent with the Company's lending policies and regulatory requirements and that do not involve more than the normal risk of collectability or present other unfavorable features. At September 30, 2022 and December 31, 2021, outstanding loans to certain officers, directors and their associated companies were less than 5% of the Company's shareholders' equity.

Loan Sales

For the three months ended September 30, 2022 and 2021, the Company sold $37.9 million and $86.2 million, respectively, of residential mortgage loans on the secondary market, which resulted in gains on the sale of loans (net of costs) of $783,000 and $2.2 million, respectively. For the nine months ended September 30, 2022 and 2021, the Company sold $131.6 million and $389.6 million, respectively, of residential mortgage loans on the secondary market, which resulted in gains on the sale of loans (net of costs) of $2.9 million and $11.3 million, respectively.

At September 30, 2022 and December 31, 2021, the Company had certain residential mortgage loans with a principal balance of $4.9 million and $5.8 million, respectively, designated as held for sale. The Company has elected the fair value option of accounting for its loans held for sale, and at September 30, 2022 and December 31, 2021, recorded an unrealized (loss) gain of ($233,000) and $29,000, respectively. For the three months ended September 30, 2022 and 2021, the Company recorded an unrealized loss on loans held for sale recorded within mortgage banking income, net, on the Company's consolidated statements of income of $193,000 and $216,000, respectively. For the nine months ended September 30, 2022 and 2021, the Company recorded an unrealized loss on loans held for sale recorded within mortgage banking income, net, on the Company's consolidated statements of income of $262,000 and $1.0 million respectively.

The Company has forward delivery commitments with a secondary market investor on each of its loans held for sale at September 30, 2022 and December 31, 2021. Refer to Note 8 for further discussion of the Company's forward delivery commitments.

ACL on Loans

The Company manages its loan portfolio proactively to effectively identify problem credits and assess trends early, implement effective work-out strategies, and take charge-offs as promptly as practical. In addition, the Company continuously reassesses its underwriting standards in response to credit risk posed by changes in economic conditions. The Company monitors and manages credit risk through the following governance structure:

•The Credit Risk and Special Assets team and the Credit Risk Policy Committee, which is an internal management committee comprised of various executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Credit Risk and Special Assets, Compliance, and Commercial and Retail Banking, oversee the Company's systems and procedures to monitor the credit quality of its loan portfolio, conduct a loan review program, and maintain the integrity of the loan rating system.

•The adequacy of the ACL is overseen by the Management Provision Committee, which is an internal management committee comprised of various Company executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Credit Risk and Special Assets, Compliance, and Commercial and Retail Banking. The Management Provision Committee supports the oversight efforts of the Audit Committee of the Board of Directors.

•The Directors' Credit Committee of the Board of Directors reviews large credit exposures, monitors external loan review reports, reviews the lending authority for individual loan officers when required, and has approval authority and responsibility for all matters regarding the loan policy and other credit-related policies, including reviewing and monitoring asset quality trends, and concentration levels.

•The Audit Committee of the Board of Directors has approval authority and oversight responsibility for the ACL adequacy and methodology.

Segmentation. For purposes of determining the ACL on loans, the Company disaggregates its loans into portfolio segments. Each portfolio segment possesses unique risk characteristics that are considered when determining the appropriate level of allowance. As of September 30, 2022 and December 31, 2021, the Company's loan portfolio segments, as determined based on the unique risk characteristics of each, include the following:

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Commercial Real Estate - Non-Owner-Occupied. Non-owner-occupied commercial real estate loans are, in substance, all commercial real estate loans that are not categorized by the Company as owner-occupied commercial real estate loans. Non-owner-occupied commercial estate loans are investment properties in which the primary source for repayment of the loan by the borrower is derived from rental income associated with the property or the proceeds of the sale, refinancing, or permanent refinancing of the property. Non-owner-occupied commercial real estate loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, multi-family residential, commercial/retail office space, industrial/warehouse space, hotels, assisted living facilities and other specific use properties. Also included within the non-owner-occupied commercial real estate loan segment are construction projects until they are completed. Commercial real estate loans are typically written with amortizing payment structures. Collateral values are determined based upon appraisals and evaluations in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines.

Commercial Real Estate - Owner-Occupied. Generally, owner-occupied commercial real estate loans are properties that are owned and operated by the borrower, and the primary source for repayment is the cash flow from the ongoing operations and activities conducted by the borrower's business. Owner-occupied commercial real estate loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, commercial/retail office space, restaurants, educational and medical practice facilities and other specific use properties. Commercial real estate loans are typically written with amortizing payment structures. Collateral values are determined based upon appraisals and evaluations in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines.

Commercial. Commercial loans consist of revolving and term loan obligations extended to business and corporate enterprises for the purpose of financing working capital and/or capital investment. Collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, and/or real estate, if applicable. Commercial loans are primarily paid by the operating cash flow of the borrower. Commercial loans may be secured or unsecured.

SBA PPP. SBA PPP loans are unsecured, fully guaranteed commercial loans backed by the SBA, issued to qualifying small businesses as part of federal stimulus issued in response to the COVID-19 pandemic. Loans made under the program have terms of two or five years and are to be used by the borrower to offset certain payroll and other operating costs, such as rent and utilities. The loan and accrued interest, or a portion thereof, are eligible for forgiveness by the SBA should the qualifying small business meet certain conditions. SBA PPP loans were originated under the guidance of the SBA, which has been subject to change. Effective May 31, 2021, the SBA PPP loan program ended and the Company ceased originating loans under this program.

Residential Real Estate.  Residential real estate loans held in the Company's loan portfolio are made to borrowers who demonstrate the ability to make scheduled payments with full consideration to underwriting factors. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines. Collateral consists of mortgage liens on one- to four-family residences, including for investment purposes.

Home Equity. Home equity loans and lines of credit are made to qualified individuals and are secured by senior or junior mortgage liens on owner-occupied one- to four-family homes, condominiums, or vacation homes. Each home equity loan has a fixed rate and is billed as equal payments comprised of principal and interest. Each home equity line of credit has a variable rate and is billed as interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the principal balance plus all accrued interest. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines.

Consumer. Consumer loan products include personal lines of credit and amortizing loans made to qualified individuals for various purposes such as education, auto loans, debt consolidation, personal expenses or overdraft protection. Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines, as applicable. Consumer loans may be secured or unsecured.

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The following table presents the activity in the ACL on loans, as reported under CECL, for the periods indicated:

	Commercial Real Estate
(In thousands)	Non-Owner-Occupied		Owner- Occupied		Commercial		SBA PPP		Residential Real Estate		Home Equity		Consumer		Total
At or For The Three Months Ended September 30, 2022
Beginning balance, June 30, 2022	$	16,210	$	2,501	$	5,145	$	1	$	8,438	$	1,796	$	153	$	34,244
Loans charged off	—		—		(183)		—		(49)		—		(46)		(278)
Recoveries	1		—		61		—		—		1		—		63
Provision for loan losses	922		146		192		—		696		63		494		2,513
Ending balance, September 30, 2022	$	17,133	$	2,647	$	5,215	$	1	$	9,085	$	1,860	$	601	$	36,542
At or For The Nine Months Ended September 30, 2022
Beginning balance, December 31, 2021	$	18,834	$	2,539	$	4,183	$	19	$	6,133	$	1,469	$	79	$	33,256
Loans charged off	—		—		(744)		—		(65)		—		(130)		(939)
Recoveries	2		2		341		—		—		87		5		437
(Credit) provision for loan losses	(1,703)		106		1,435		(18)		3,017		304		647		3,788
Ending balance, September 30, 2022	$	17,133	$	2,647	$	5,215	$	1	$	9,085	$	1,860	$	601	$	36,542
At or For The Three Months Ended September 30, 2021
Beginning balance, June 30, 2021	$	19,577	$	2,516	$	4,342	$	66	$	3,205	$	2,065	$	289	$	32,060
Loans charged off	—		—		(97)		—		(4)		—		(20)		(121)
Recoveries	—		2		49		—		2		4		7		64
Provision (credit) for loan losses	157		(214)		295		(23)		450		(231)		(165)		269
Ending balance, September 30, 2021	$	19,734	$	2,304	$	4,589	$	43	$	3,653	$	1,838	$	111	$	32,272
At or For The Nine Months Ended September 30, 2021
Beginning balance, December 31, 2020	$	21,778	$	2,832	$	6,703	$	69	$	3,474	$	2,616	$	393	$	37,865
Loans charged off	—		—		(503)		—		(92)		(145)		(88)		(828)
Recoveries	—		7		159		—		72		4		30		272
(Credit) provision for loan losses	(2,044)		(535)		(1,770)		(26)		199		(637)		(224)		(5,037)
Ending balance, September 30, 2021	$	19,734	$	2,304	$	4,589	$	43	$	3,653	$	1,838	$	111	$	32,272
At or For The Year Ended December 31, 2021
Beginning balance, December 31, 2020	$	21,778	$	2,832	$	6,703	$	69	$	3,474	$	2,616	$	393	$	37,865
Loans charged off	—		—		(799)		—		(92)		(162)		(111)		(1,164)
Recoveries	—		9		220		—		107		4		32		372
(Credit) provision for loan losses	(2,944)		(302)		(1,941)		(50)		2,644		(989)		(235)		(3,817)
Ending balance, December 31, 2021	$	18,834	$	2,539	$	4,183	$	19	$	6,133	$	1,469	$	79	$	33,256

The ACL on loans increased $3.3 million during the nine months ended September 30, 2022, to $36.5 million. The net increase was driven by: (1) a softening overall economy and the increasing likelihood of a recession and (2) 13% loan growth during this period, which was driven by residential real estate, commercial and commercial real estate - non-owner-occupied, that offset (3) the release of $5.0 million of reserves established for certain hospitality-related loans within the commercial real estate-non-owner occupied loan segment in response to the COVID-19 pandemic and the identified elevated credit risk the pandemic presented to these loans at that time. As of September 30, 2022 and December 31, 2021, the ACL on loans for these previously modified hospitality-related loans was $0 and $5.0 million, respectively.

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Credit Concentrations

The Company focuses on maintaining a well-balanced and diversified loan portfolio. Despite such efforts, it is recognized that credit concentrations may occasionally emerge as a result of economic conditions, changes in local demand, natural loan growth and runoff. To identify credit concentrations effectively, all commercial and commercial real estate loans are assigned Standard Industrial Classification codes, North American Industry Classification System codes, and state and county codes. Shifts in portfolio concentrations are monitored. As of September 30, 2022, the Company's total exposure to the lessors of nonresidential buildings' industry was 13% of total loans and 32% of total commercial real estate loans. There were no other industry exposures exceeding 10% of the Company's total loan portfolio as of September 30, 2022.

Credit Quality Indicators

To further identify loans with similar risk profiles, the Company categorizes each portfolio segment into classes by credit risk characteristic and applies a credit quality indicator to each portfolio segment. The indicators for commercial real estate - non-owner-occupied and owner-occupied, commercial and residential real estate portfolio segments are represented by Grades 1 through 10 as outlined below. In general, risk ratings are adjusted periodically throughout the year as updated analysis and review warrants. This process may include, but is not limited to, annual credit and loan reviews, periodic reviews of loan performance metrics, such as delinquency rates, and quarterly reviews of adversely risk rated loans. The Company uses the following definitions when assessing grades for the purpose of evaluating the risk and adequacy of the ACL on loans:

•Grade 1 through 6 — Grades 1 through 6 represent groups of loans that are not subject to adverse criticism as defined in regulatory guidance. Loans in these groups exhibit characteristics that represent low to moderate risks, which is measured using a variety of credit risk criteria, such as cash flow coverage, debt service coverage, balance sheet leverage, liquidity, management experience, industry position, prevailing economic conditions, support from secondary sources of repayment and other credit factors that may be relevant to a specific loan. In general, these loans are supported by properly margined collateral and guarantees of principal parties.

•Grade 7 — Loans with potential weakness (Special Mention). Loans in this category are currently protected based on collateral and repayment capacity and do not constitute undesirable credit risk, but have potential weakness that may result in deterioration of the repayment process at some future date. This classification is used if a negative trend is evident in the obligor’s financial situation. Special mention loans do not sufficiently expose the Company to warrant adverse classification.

•Grade 8 — Loans with definite weakness (Substandard). Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or by collateral pledged. Borrowers experience difficulty in meeting debt repayment requirements. Deterioration is sufficient to cause the Company to look to the sale of collateral.

•Grade 9 — Loans with potential loss (Doubtful). Loans classified as doubtful have all the weaknesses inherent in the substandard grade with the added characteristic that the weaknesses make collection or liquidation of the loan in full highly questionable and improbable. The possibility of some loss is extremely high, but because of specific pending factors that may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined.

•Grade 10 — Loans with definite loss (Loss). Loans classified as loss are considered uncollectible. The loss classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the asset because recovery and collection time may be protracted.

The Company periodically reassesses asset quality indicators to reflect appropriately the risk composition of the Company’s loan portfolio. Home equity and consumer loans are not individually risk rated, but rather analyzed as groups taking into account delinquency rates and other economic conditions which may affect the ability of borrowers to meet debt service requirements, including interest rates and energy costs. Performing loans include loans that are current and loans that are past due less than 90 days. Loans that are past due over 90 days and non-accrual loans, including TDRs, are considered non-performing.

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Based on the most recent analysis performed, the risk category of loans by portfolio segment by vintage was as follows as of the dates indicated:

(In thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of September 30, 2022
Commercial real estate - non-owner-occupied
Risk rating
Pass (Grades 1-6)	$	261,937	$	275,295	$	164,434	$	126,764	$	111,150	$	259,205	$	—	$	—	$	1,198,785
Special mention (Grade 7)	—		168		368		266		78		327		—		—		1,207
Substandard (Grade 8)	—		131		1,356		207		7,998		19,418		—		—		29,110
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - non-owner-occupied	261,937		275,594		166,158		127,237		119,226		278,950		—		—		1,229,102
Commercial real estate - owner-occupied
Risk rating
Pass (Grades 1-6)	52,250		82,599		28,982		24,000		40,311		75,807		—		—		303,949
Special mention (Grade 7)	—		2,076		—		19,991		—		422		—		—		22,489
Substandard (Grade 8)	26		—		—		—		3,299		4,022		—		—		7,347
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - owner occupied	52,276		84,675		28,982		43,991		43,610		80,251		—		—		333,785
Commercial
Risk rating
Pass (Grades 1-6)	57,184		73,885		35,048		35,969		23,346		28,931		132,833		29,911		417,107
Special mention (Grade 7)	—		—		99		154		83		200		1,089		14		1,639
Substandard (Grade 8)	17		19		139		238		725		1,598		1,211		632		4,579
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial	57,201		73,904		35,286		36,361		24,154		30,729		135,133		30,557		423,325
SBA PPP
Risk rating
Pass (Grades 1-6)	—		685		—		—		—		—		—		—		685
Special mention (Grade 7)	—		—		—		—		—		—		—		—		—
Substandard (Grade 8)	—		—		—		—		—		—		—		—		—
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total SBA PPP	—		685		—		—		—		—		—		—		685
Residential Real Estate
Risk rating
Pass (Grades 1-6)	429,072		584,538		248,329		81,522		52,447		220,335		334		—		1,616,577
Special mention (Grade 7)	—		—		—		—		170		2,662		—		—		2,832
Substandard (Grade 8)	—		—		—		—		—		—		—		—		—
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total residential real estate	429,072		584,538		248,329		81,522		52,617		222,997		334		—		1,619,409
Home equity
Risk rating
Performing	22,801		698		346		5,003		8,193		9,403		174,615		11,720		232,779
Non-performing	—		—		—		—		—		59		441		88		588
Total home equity	22,801		698		346		5,003		8,193		9,462		175,056		11,808		233,367
Consumer
Risk rating
Performing	6,797		4,510		2,017		1,522		434		2,447		3,279		—		21,006
Non-performing	—		—		—		—		—		1		—		—		1
Total consumer	6,797		4,510		2,017		1,522		434		2,448		3,279		—		21,007
Total Loans	$	830,084	$	1,024,604	$	481,118	$	295,636	$	248,234	$	624,837	$	313,802	$	42,365	$	3,860,680

19

(In thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2021
Commercial real estate - non-owner-occupied
Risk rating
Pass (Grades 1-6)	$	286,428	$	179,565	$	161,695	$	118,196	$	96,169	$	274,731	$	—	$	—	$	1,116,784
Special mention (Grade 7)	171		7,266		286		119		4,294		10,590		—		—		22,726
Substandard (Grade 8)	350		1,518		217		9,942		391		26,257		—		—		38,675
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - non-owner-occupied	286,949		188,349		162,198		128,257		100,854		311,578		—		—		1,178,185
Commercial real estate - owner-occupied
Risk rating
Pass (Grades 1-6)	91,328		39,082		31,409		43,786		46,466		56,682		—		—		308,753
Special mention (Grade 7)	—		—		—		3,396		362		1,708		—		—		5,466
Substandard (Grade 8)	—		—		54		—		1,785		1,217		—		—		3,056
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - owner occupied	91,328		39,082		31,463		47,182		48,613		59,607		—		—		317,275
Commercial
Risk rating
Pass (Grades 1-6)	91,102		43,757		44,925		23,895		13,818		27,743		80,775		31,586		357,601
Special mention (Grade 7)	145		117		590		115		383		222		967		244		2,783
Substandard (Grade 8)	—		339		320		492		293		1,209		360		298		3,311
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial	91,247		44,213		45,835		24,502		14,494		29,174		82,102		32,128		363,695
SBA PPP
Risk rating
Pass (Grades 1-6)	35,164		319		—		—		—		—		—		—		35,483
Special mention (Grade 7)	470		—		—		—		—		—		—		—		470
Substandard (Grade 8)	—		—		—		—		—		—		—		—		—
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total SBA PPP	35,634		319		—		—		—		—		—		—		35,953
Residential Real Estate
Risk rating
Pass (Grades 1-6)	586,637		281,804		103,228		63,403		46,696		219,983		903		—		1,302,654
Special mention (Grade 7)	—		—		—		—		—		230		—		—		230
Substandard (Grade 8)	—		—		—		—		—		3,563		—		—		3,563
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total residential real estate	586,637		281,804		103,228		63,403		46,696		223,776		903		—		1,306,447
Home equity
Risk rating
Performing	760		554		6,179		10,995		2,464		10,792		165,189		12,295		209,228
Non-performing	—		—		—		41		—		174		847		113		1,175
Total home equity	760		554		6,179		11,036		2,464		10,966		166,036		12,408		210,403
Consumer
Risk rating
Performing	6,860		3,523		3,089		1,051		548		2,014		2,399		—		19,484
Non-performing	—		9		21		—		—		2		—		—		32
Total consumer	6,860		3,532		3,110		1,051		548		2,016		2,399		—		19,516
Total Loans	$	1,099,415	$	557,853	$	352,013	$	275,431	$	213,669	$	637,117	$	251,440	$	44,536	$	3,431,474

20

Past Due and Non-Accrual Loans

The Company closely monitors the performance of its loan portfolio. A loan is placed on non-accrual status when the financial condition of the borrower is deteriorating, payment in full of both principal and interest is not expected as scheduled, or principal or interest has been in default for 90 days or more. Exceptions may be made if the asset is secured by collateral sufficient to satisfy both the principal and accrued interest in full and collection is reasonably assured. When one loan to a borrower is placed on non-accrual status, all other loans to the borrower are re-evaluated to determine if they should also be placed on non-accrual status. All previously accrued and unpaid interest is reversed at this time. A loan will return to accrual status when collection of principal and interest is assured and the borrower has demonstrated timely payments of principal and interest for a reasonable period, generally at least six months. Unsecured loans, however, are not normally placed on non-accrual status because they are generally charged-off once their collectability is in doubt.

The following is a loan aging analysis by portfolio segment (including loans past due over 90 days and non-accrual loans) and loans past due over 90 days and accruing as of the following dates:

(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans Outstanding		Loans > 90 Days Past Due and Accruing
September 30, 2022
Commercial real estate - non-owner-occupied	$	195	$	—	$	11	$	206	$	1,228,896	$	1,229,102	$	—
Commercial real estate - owner-occupied	—		—		47		47		333,738		333,785
Commercial	1,323		14		470		1,807		421,518		423,325		—
SBA PPP	—		—		—		—		685		685		—
Residential real estate	2,179		500		843		3,522		1,615,887		1,619,409		—
Home equity	620		210		327		1,157		232,210		233,367		—
Consumer	41		2		1		44		20,963		21,007		—
Total	$	4,358	$	726	$	1,699	$	6,783	$	3,853,897	$	3,860,680	$	—
December 31, 2021
Commercial real estate - non-owner-occupied	$	—	$	—	$	51	$	51	$	1,178,134	$	1,178,185	$	—
Commercial real estate - owner-occupied	47		—		133		180		317,095		317,275		—
Commercial	282		174		787		1,243		362,452		363,695		—
SBA PPP	—		68		—		68		35,885		35,953		—
Residential real estate	379		475		1,210		2,064		1,304,383		1,306,447		—
Home equity	456		50		445		951		209,452		210,403		—
Consumer	95		1		32		128		19,388		19,516		—
Total	$	1,259	$	768	$	2,658	$	4,685	$	3,426,789	$	3,431,474	$	—

The following table presents the amortized cost basis of loans on non-accrual status (including non-accruing TDRs) by portfolio segment as of the dates indicated:

	September 30, 2022						December 31, 2021
(In thousands)	Non-Accrual Loans With an Allowance		Non-Accrual Loans Without an Allowance		Total Non-Accrual Loans		Non-Accrual Loans With an Allowance		Non-Accrual Loans Without an Allowance		Total Non-Accrual Loans
Commercial real estate - non-owner-occupied	$	15	$	11	$	26	$	38	$	13	$	51
Commercial real estate - owner-occupied	—		47		47		86		47		133
Commercial	201		340		541		785		44		829
Residential real estate	1,203		359		1,562		1,780		327		2,107
Home equity	522		66		588		1,064		111		1,175
Consumer	1		—		1		32		—		32
Total	$	1,942	$	823	$	2,765	$	3,785	$	542	$	4,327

21

The following table presents the amortized cost basis of collateral-dependent non-accrual loans (including non-accruing TDRs) by portfolio segment and collateral type, as of the dates indicated:

	September 30, 2022						December 31, 2021
	Collateral Type				Total Collateral -Dependent Non-Accrual Loans		Collateral Type				Total Collateral -Dependent Non-Accrual Loans
(In thousands)	Real Estate		General Business Assets				Real Estate		General Business Assets
Residential real estate	$	321	$	—	$	321	$	268	$	—	$	268
Home equity	—		—		—		111		—		111
Total	$	321	$	—	$	321	$	379	$	—	$	379

Collateral-dependent loans are loans for which repayment is expected to be provided substantially by the underlying collateral and there are no other available and reliable sources of repayment.

Interest income that would have been recognized if loans on non-accrual status had been current in accordance with their original terms is estimated to have been $30,000 and $59,000 for the three months ended September 30, 2022 and 2021, respectively. For the nine months ended September 30, 2022 and 2021, the interest income that is estimated to have been recognized if loans on non-accrual status had been current in accordance with their original terms was $115,000 and $202,000, respectively.

The Company's policy is to reverse previously recorded interest income when a loan is placed on non-accrual. As a result, the Company did not record any interest income on its non-accruals for the three or nine months ended September 30, 2022 and 2021. An immaterial amount of accrued interest on non-accrual loans was written-off during the three and nine months ended September 30, 2022 and 2021, by reversing interest income. At September 30, 2022 and December 31, 2021, total accrued interest receivable on loans, which has been excluded from reported amortized cost basis on loans, was $8.9 million and $7.8 million, respectively, and reported within other assets on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date.

TDRs

The Company takes a conservative approach with credit risk management and remains focused on community lending and reinvesting. The Company works closely with borrowers experiencing credit problems to assist in loan repayment or term modifications. TDRs consist of loans where the Company, for economic or legal reasons related to the borrower’s financial difficulties, granted a concession to the borrower that it would not otherwise consider. TDRs typically involve term modifications or a reduction of either interest or principal. Once such an obligation has been restructured, it will remain a TDR until paid in full, or until the loan is again restructured at current market rates and no concessions are granted.

The specific reserve allowance was determined by discounting the total expected future cash flows from the borrower at the original loan interest rate, or if the loan is currently collateral-dependent, using net realizable value, which was obtained through independent appraisals and internal evaluations. The following is a summary of TDRs, by portfolio segment, and the associated specific reserve included within the ACL for the dates indicated:

	Number of Contracts		Recorded Investment				Specific Reserve
(In thousands, except number of contracts)	September 30, 2022	December 31, 2021	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Commercial real estate - owner-occupied	1	1	$	114	$	118	$	48	$	43
Commercial	1	2	58		74		—		—
Residential real estate	18	19	2,254		2,341		321		$	348
Consumer and home equity	3	3	246		253		7		6
Total	23	25	$	2,672	$	2,786	$	376	$	397

22

At September 30, 2022, the Company had performing and non-performing TDRs with a recorded investment balance of $2.3 million and $387,000, respectively. At December 31, 2021, the Company had performing and non-performing TDRs with a recorded investment balance of $2.4 million and $394,000, respectively.

The following represents loan modifications that qualify as TDRs that occurred during the periods indicated:

	Number of Contracts		Pre-Modification Outstanding Recorded Investment				Post-Modification Outstanding Recorded Investment				Specific Reserve
(In thousands, except number of contracts)	2022	2021	2022		2021		2022		2021		2022		2021
For the Three Months Ended September 30:
Home equity:
Maturity concession	—	1	$	—	$	144	$	—	$	143	$	—	$	6
Total	—	1	$	—	$	144	$	—	$	143	$	—	$	6
For the Nine Months Ended September 30:
Home equity:
Interest rate concession and payment deferral	—	1	$	—	$	159	$	—	$	170	$	—	$	56
Maturity concession	—	1	—		144		—		143		—		6
Total	—	2	$	—	$	303	$	—	$	313	$	—	$	62

As of September 30, 2022 and December 31, 2021, the Company did not have any material commitments to lend additional funds to borrowers with loans classified as TDRs.

For the three and nine months ended September 30, 2022 and 2021, no loans were modified as TDRs within the previous 12 months for which the borrower subsequently defaulted.

In-Process Foreclosure Proceedings

At September 30, 2022 and December 31, 2021, the Company had $542,000 and $888,000, respectively, of consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings were in process.

FHLB Advances

FHLB advances are those borrowings from the FHLBB greater than 90 days. FHLB advances are collateralized by a blanket lien on qualified collateral consisting primarily of loans with first mortgages secured by one- to four-family properties, certain commercial real estate loans, certain pledged investment securities and other qualified assets. The carrying value of residential real estate and commercial loans pledged as collateral was $1.7 billion and $1.4 billion at September 30, 2022 and December 31, 2021, respectively.

Refer to Notes 3 and 6 of the consolidated financial statements for discussion of securities pledged as collateral.

NOTE 5 – BORROWINGS

The following summarizes the Company's short-term borrowed funds as presented on the consolidated statements of condition as of the dates indicated. The Company did not have any long-term borrowings as of the dates indicated.

(In thousands)	September 30, 2022		December 31, 2021
Short-Term Borrowings:
Customer repurchase agreements	$	268,876	$	211,608
Overnight borrowings	102,225		—
FHLBB borrowings	50,000		—
Total short-term borrowings	$	421,101	$	211,608

23

The Company's subordinated debentures were $44.3 million at both September 30, 2022 and December 31, 2021. As of September 30, 2022 and December 31, 2021, the Company's subordinated debentures were comprised of two tranches of junior subordinated debentures. Refer to Note 10 of the consolidated financial statements for further details.

NOTE 6 – REPURCHASE AGREEMENTS

The Company can raise additional liquidity by entering into repurchase agreements at its discretion. In a security repurchase agreement transaction, the Company will generally sell a security, agreeing to repurchase either the same or a substantially identical security on a specified later date, at a greater price than the original sales price. The difference between the sale price and purchase price is the cost of the proceeds, which is recorded within interest on borrowings on the consolidated statements of income. The securities underlying the agreements are delivered to counterparties as collateral for the repurchase obligations. Because the securities are treated as collateral and the agreement does not qualify for a full transfer of effective control, the transactions do not meet the criteria to be classified as sales, and are therefore considered secured borrowing

transactions for accounting purposes. Payments on such borrowings are interest only until the scheduled repurchase date. In a repurchase agreement the Company is subject to the risk that the purchaser may default at maturity and not return the securities underlying the agreements. In order to minimize this potential risk, the Company either deals with established firms when entering into these transactions, or with customers whose agreements stipulate that the securities underlying the agreement are not delivered to the customer and instead are held in segregated safekeeping accounts by the Company's safekeeping agents.

The table below sets forth information regarding the Company’s repurchase agreements accounted for as secured borrowings and types of collateral as of the dates indicated:

(In thousands)	September 30, 2022		December 31, 2021
Customer Repurchase Agreements(1)(2):
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	$	224,819	$	88,749
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	41,057		120,846
Obligations of states and political subdivisions	3,000		2,013
Total	$	268,876	$	211,608

(1)    Presented within short-term borrowings on the consolidated statements of condition.

(2)    All customer repurchase agreements mature continuously or overnight for the dates indicated.

At September 30, 2022 and December 31, 2021, certain customers held CDs totaling $616,000 and $728,000, respectively, that were collateralized by CMO and MBS securities that were overnight repurchase agreements.

Certain counterparties monitor collateral, and may request additional collateral to be posted from time to time.

NOTE 7 – COMMITMENTS AND CONTINGENCIES

Commitments

In the normal course of business, the Company is a party to both on- and off-balance sheet financial instruments involving, to varying degrees, elements of credit risk and interest rate risk in addition to the amounts recognized in the consolidated statements of condition.

The following is a summary of the Company's contractual off-balance sheet commitments as of the dates indicated:

(In thousands)	September 30, 2022		December 31, 2021
Commitments to extend credit	$	876,757	$	834,533
Standby letters of credit	4,689		7,952
Total	$	881,446	$	842,485

The Company’s commitments to extend credit from its lending activities do not necessarily represent future cash requirements since certain of these instruments may expire without being funded and others may not be fully drawn upon.

24

These commitments are subject to the Company’s credit approval process, including an evaluation of the customer’s creditworthiness and related collateral requirements. Commitments generally have fixed expiration dates or other termination clauses.

Standby letters of credit are conditional commitments issued to guarantee the performance of a borrower to a third party. In the event of nonperformance by the borrower, the Company would be required to fund the commitment and would be entitled to the underlying collateral, if applicable, which generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, and/or real estate. The maximum potential future payments are limited to the contractual amount of the commitment.

The Company establishes an ACL on off-balance sheet credit exposures on its contractual off-balance sheet commitments, except those that are unconditionally cancellable by the Company. As of September 30, 2022 and December 31, 2021, the ACL on off-balance sheet credit exposures was $3.4 million and $3.2 million, respectively. The ACL on off-balance sheet credit exposure was presented within accrued interest and other liabilities on the consolidated statements of condition.

For the three months ended September 30, 2022 and 2021, the provision for credit losses on off-balance sheet credit exposures was $251,000 and $670,000, respectively. For the nine months ended September 30, 2022 and 2021, the provision for credit losses on off-balance sheet credit exposure was $246,000 and $617,000.

Legal Contingencies

In the normal course of business, the Company and its subsidiaries are subject to pending and threatened litigation, claims investigations and legal and administrative cases and proceedings. Although the Company is not able to predict the outcome of such actions, after reviewing pending and threatened actions with counsel, management believes that, based on the information currently available, the outcome of such actions, individually or in the aggregate, will not have a material adverse effect on the Company’s consolidated financial statements.

Reserves are established for legal claims only when losses associated with the claims are judged to be probable, and the loss can be reasonably estimated. Assessments of litigation exposure are difficult because they involve inherently unpredictable factors including, but not limited to: whether the proceeding is in the early stages; whether damages are unspecified, unsupported, or uncertain; whether there is a potential for punitive or other pecuniary damages; whether the matter involves legal uncertainties, including novel issues of law; whether the matter involves multiple parties and/or jurisdictions; whether discovery has begun or is not complete; whether meaningful settlement discussions have commenced; and whether the lawsuit involves class allegations. In many lawsuits and arbitrations, it is not possible to determine whether a liability has been incurred or to estimate the ultimate or minimum amount of that liability until the case is close to resolution, in which case a reserve will not be recognized until that time. Assessments of class action litigation, which is generally more complex than other types of litigation, are particularly difficult, especially in the early stages of the proceeding when it is not known whether a class will be certified or how a potential class, if certified, will be defined. As a result, the Company may be unable to estimate reasonably possible losses with respect to every litigation matter it faces.

The Company did not have any material loss contingencies that were provided for and/or that are required to be disclosed as of September 30, 2022 and December 31, 2021, respectively.

NOTE 8 – DERIVATIVES AND HEDGING

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s credit derivatives result from loan participation arrangements, and therefore are not used to manage interest rate risk in the Company’s assets or liabilities.

25

Derivatives Designated as Hedging Instruments - Cash Flow Hedges of Interest Rate Risk

Interest Rate Contracts. The Company’s objectives in using interest rate derivatives are to add stability to interest income and expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed rate payments or the receipt of fixed rate amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. For the three and nine months ended September 30, 2022 and 2021, such derivatives were used to hedge the variable cash flows associated with existing variable-rate assets or liabilities or forecasted issuances of debt.

For derivatives designated, and that qualify as, cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCI and subsequently is reclassified into interest expense or interest income in the same period(s) during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense or interest income as interest payments are made or received on the Company’s variable-rate liabilities or assets. The Company estimates that an additional $2.8 million will be reclassified as a decrease to interest expense and an additional $2.6 million will be reclassified as a decrease to interest income over the next 12 months.

Derivatives not Designated as Hedges

Customer Loan Swaps. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings.

Fixed Rate Mortgage Interest Rate Lock Commitments. As part of the origination process of a residential loan, the Company may enter into rate lock agreements with its borrower, which is considered an interest rate lock commitment. If the Company intends to sell the loan upon origination, it will account for the interest rate lock commitment as a derivative.

Forward Delivery Commitments. The Company typically enters into a forward delivery commitment with a secondary market investor, which has been approved by the Company within its normal governance process, at the onset of the loan origination process. The Company may enter into these arrangements with the secondary market investors on a "best effort" or "mandatory delivery" basis. The Company's normal practice is typically to enter into these arrangements on a "best effort" basis. The Company enters into these arrangements with the secondary market investors to manage its interest rate exposure. The Company accounts for the forward delivery commitment as a derivative upon origination of a loan identified as held for sale.

Risk Participation Agreements. The Company’s existing credit derivatives result from participations in or out of interest rate swaps provided by or to external lenders as part of loan participation arrangements, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain lenders which participate in loans.

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The following table presents the fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition as of the dates indicated:

	Derivative Assets					Derivative Liabilities
(In thousands)	Notional Amount		Location	Fair Value		Notional Amount		Location	Fair Value
September 30, 2022
Derivatives designated as hedging instruments:
Interest rate contracts(1)	$	110,000	Other assets	$	13,806	$	133,000	Accrued interest and other liabilities	$	5,459
Total derivatives designated as hedging instruments				$	13,806				$	5,459
Derivatives not designated as hedging instruments:
Customer loan swaps(1)	$	264,758	Other assets	$	16,112	$	264,758	Accrued interest and other liabilities	$	16,134
Risk participation agreements	21,937		Other assets	—		44,741		Accrued interest and other liabilities	—
Fixed rate mortgage interest rate lock commitments	2,400		Other assets	11		12,166		Accrued interest and other liabilities	395
Forward delivery commitments	4,863		Other assets	318		—		Accrued interest and other liabilities	—
Total derivatives not designated as hedging instruments				$	16,441				$	16,529
December 31, 2021
Derivatives designated as hedging instruments:
Interest rate contracts(1)	$	160,000	Other assets	$	5,589	$	83,000	Accrued interest and other liabilities	$	7,872
Total derivatives designated as hedging instruments				$	5,589				$	7,872
Derivatives not designated as hedging instruments:
Customer loan swaps(1)	$	345,545	Other assets	$	19,297	$	345,545	Accrued interest and other liabilities	$	19,485
Risk participation agreements	25,347		Other assets	—		53,704		Accrued interest and other liabilities	—
Fixed rate mortgage interest rate lock commitments	20,437		Other assets	371		8,587		Accrued interest and other liabilities	91
Forward delivery commitments	3,882		Other assets	86		1,903		Accrued interest and other liabilities	6
Total derivatives not designated as hedging instruments				$	19,754				$	19,582

(1)    Reported fair values include accrued interest receivable and payable.

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The table below presents the effect of cash flow hedge accounting, before tax, on AOCI for the periods indicated:

(Dollars in thousands)	Amount of Gain (Loss) Recognized in OCI on Derivative		Amount of Gain (Loss) Recognized in OCI Included Component		Amount of Gain (Loss) Recognized in OCI Excluded Component		Location of Gain (Loss) Recognized from AOCI into Income	Amount of Gain (Loss) Reclassified from AOCI into Income		Amount of Gain (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain (Loss) Reclassified from AOCI into Income Excluded Component
Derivatives in Cash Flow Hedge Relationships:
For the Three Months Ended September 30, 2022
Interest rate contracts	$	(1,798)	$	(1,798)	$	—	Interest and fees on loans	$	(121)	$	(121)	$	—
Interest rate contracts	146		146		—		Interest on deposits	189		189		—
Interest rate contracts	2,544		2,544		—		Interest on borrowings	185		185		—
Interest rate contracts	2,489		2,489		—		Interest on subordinated debentures	(133)		(133)		—
Total	$	3,381	$	3,381	$	—		$	120	$	120	$	—
For the Nine Months Ended September 30, 2022
Interest rate contracts	$	(5,713)	$	(5,713)	$	—	Interest and fees on loans	$	498	$	498	$	—
Interest rate contracts	5,867		5,867		—		Interest on deposits	72		72		—
Interest rate contracts	2,544		2,544		—		Interest on borrowings	185		185		—
Interest rate contracts	7,906		7,906		—		Interest on subordinated debentures	(755)		(755)		—
Total	$	10,604	$	10,604	$	—		$	—	$	—	$	—
For the Three Months Ended September 30, 2021
Interest rate contracts	$	48	$	48	$	—	Interest and fees on loans	$	410	$	410	$	—
Interest rate contracts	190		190		—		Interest on deposits	(170)		(170)		—
Interest rate contracts	228		228				Interest on subordinated debentures	(369)		(369)
Total	$	466	$	466	$	—		$	(129)	$	(129)	$	—
For the Nine Months Ended September 30, 2021
Interest rate contracts	$	(688)	$	(688)	$	—	Interest and fees on loans	$	1,205	$	1,205	$	—
Interest rate contracts	2,142		2,142		—		Interest on deposits	(490)		(490)		—
Interest rate contracts	2,201		2,201		—		Interest on subordinated debentures	(1,222)		(1,222)		—
Total	$	3,655	$	3,655	$	—		$	(507)	$	(507)	$	—

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The table below presents the effect of cash flow hedge accounting on the consolidated statements of income for the periods indicated:

	Location and Amount of Gain (Loss) Recognized in Income
	Three Months Ended September 30,
	2022								2021
(Dollars in thousands)	Interest and fees on loans		Interest on deposits		Interest on borrowings		Interest on subordinated debentures		Interest and fees on loans		Interest on deposits		Interest on borrowings		Interest on subordinated debentures
Total presented on the consolidated statements of income in which the effects of cash flow hedges are recorded	$	37,568	$	5,442	$	787	$	539	$	31,185	$	1,973	$	122	$	538
Gain (loss) on cash flow hedging relationships
Interest rate contracts:
Amount of gain (loss) reclassified from AOCI into income	$	(121)	$	189	$	185	$	(133)	$	410	$	(170)	$	—	$	(369)
Amount of gain (loss) reclassified from AOCI into income - included component	$	(121)	$	189	$	185	$	(133)	$	410	$	(170)	$	—	$	(369)
Amount of gain (loss) reclassified from AOCI into income - excluded component	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

	Location and Amount of Gain (Loss) Recognized in Income
	Nine Months Ended September 30,
	2022								2021
(Dollars in thousands)	Interest and fees on loans		Interest on deposits		Interest on borrowings		Interest on subordinated debentures		Interest and fees on loans		Interest on deposits		Interest on borrowings		Interest on subordinated debentures
Total presented on the consolidated statements of income in which the effects of cash flow hedges are recorded	$	102,724	$	9,785	$	1,372	$	1,600	$	92,610	$	5,957	$	454	$	1,983
Gain (loss) on cash flow hedging relationships
Interest rate contracts:
Amount of gain (loss) reclassified from AOCI into income	$	498	$	72	$	185	$	(755)	$	1,205	$	(490)	$	—	$	(1,222)
Amount of gain (loss) reclassified from AOCI into income - included component	$	498	$	72	$	185	$	(755)	$	1,205	$	(490)	$	—	$	(1,222)
Amount of gain (loss) reclassified from AOCI into income - excluded component	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

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The table below presents the effect of the Company's derivative financial instruments that are not designated as hedging instruments on the consolidated statements of income for the periods indicated:

	Location of Gain (Loss) Recognized in Income	Amount of Gain (Loss) Recognized in Income
		Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)		2022		2021		2022		2021
Customer loan swaps	Other expense	$	28	$	—	$	166	$	—
Fixed rate mortgage interest rate lock commitments	Mortgage banking income, net	(473)		(434)		(664)		22
Forward delivery commitments	Mortgage banking income, net	227		65		238		78
Total		$	(218)	$	(369)	$	(260)	$	100

Credit Risk-Related Contingent Features    

By using derivatives, the Company is exposed to credit risk to the extent that counterparties to the derivative contracts do not perform as required. Should a counterparty fail to perform under the terms of a derivative contract, the Company’s credit exposure on interest rate swaps is limited to the net positive fair value and accrued interest of all swaps with each counterparty. The Company seeks to minimize counterparty credit risk through credit approvals, limits, monitoring procedures, and obtaining collateral, where appropriate. As such, management believes the risk of incurring credit losses on derivative contracts with institutional counterparties is remote.

The Company has agreements with its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. In addition, the Company also has agreements with certain of its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well- capitalized institution, then the counterparty could terminate the derivative position(s) and the Company could be required to settle its obligations under the agreements.

As of September 30, 2022 and December 31, 2021, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for non-performance risk, related to these agreements was $16.1 million and $26.1 million, respectively. As of September 30, 2022 and December 31, 2021, the Company has minimum collateral posting thresholds with certain of its derivative counterparties and has posted cash collateral of $0 and $30.7 million, respectively. If the Company had breached any of these provisions at September 30, 2022 or December 31, 2021, it could have been required to settle its obligations under the agreements at their termination value of $16.1 million and $26.1 million, respectively.

NOTE 9 – BALANCE SHEET OFFSETTING

The Company does not offset the carrying value for derivative instruments or repurchase agreements on the consolidated statements of condition. The Company nets the amount recognized for the right to reclaim cash collateral against the obligation to return cash collateral arising from instruments executed with the same counterparty under a master netting arrangement. Collateral legally required to be pledged or received is monitored and adjusted as necessary. Refer to Note 6 for further discussion of repurchase agreements and Note 8 for further discussion of derivative instruments.

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The following table presents the Company's derivative positions and repurchase agreements, and the potential effect of netting arrangements on its financial position, as of the dates indicated:

							Gross Amount Not Offset in the Consolidated Statements of Condition
(In thousands)	Gross Amount Recognized in the Consolidated Statements of Condition		Gross Amount Offset in the Consolidated Statements of Condition		Net Amount Presented in the Consolidated Statements of Condition		Financial Instruments Pledged (Received)(1)		Cash Collateral Pledged (Received)(1)		Net Amount
September 30, 2022
Derivative assets:
Customer loan swaps - dealer bank(2)	$	16,112	$	—	$	16,112	$	—	$	—	$	16,112
Interest rate contracts(3)	13,806		—		13,806		—		(11,459)		2,347
Total	$	29,918	$	—	$	29,918	$	—	$	(11,459)	$	18,459
Derivative liabilities:
Customer loan swaps - commercial customer(3)	$	16,134	$	—	$	16,134	$	—	$	—	$	16,134
Interest rate contracts(3)	5,459		—		5,459		—		5,459		—
Total	$	21,593	$	—	$	21,593	$	—	$	5,459	$	16,134
Customer repurchase agreements	$	268,876	$	—	$	268,876	$	268,876	$	—	$	—
December 31, 2021
Derivative assets:
Customer loan swaps - commercial customer(2)	$	19,297	$	—	$	19,297	$	—	$	—	$	19,297
Interest rate contracts(3)	5,589		—		5,589		—		(5,529)		60
Total	$	24,886	$	—	$	24,886	$	—	$	(5,529)	$	19,357
Derivative liabilities:
Customer loan swaps - dealer bank(3)	$	19,485	$	—	19,485		$	—	$	19,485	$	—
Interest rate contracts(3)	7,872		—		7,872		—		6,603		1,269
Total	$	27,357	$	—	$	27,357	$	—	$	26,088	$	1,269
Customer repurchase agreements	$	211,608	$	—	$	211,608	$	211,608	$	—	$	—

(1)    The amount presented was the lesser of the amount pledged (received) or the net amount presented in the consolidated statements of condition.

(2)    Interest rate swap contracts were completed with the same dealer bank. The Company maintains a master netting arrangement with each counterparty and settles collateral on a net basis for all contracts.

(3)    The Company manages its net exposure on its commercial customer loan swaps by obtaining collateral as part of the normal loan policy and underwriting practices.

NOTE 10 – REGULATORY CAPITAL REQUIREMENTS

The Company and Bank are subject to various regulatory capital requirements administered by the FRB and the OCC. Failure to meet minimum capital requirements can result in mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements.

The Company and Bank are required to maintain certain levels of capital based on risk-adjusted assets. These capital requirements represent quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company and Bank's capital classification is also subject to qualitative judgments by our regulators about components, risk weightings and other factors. The quantitative measures established to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios of total capital, Tier 1 capital, and common equity Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets, or the leverage ratio. These requirements apply to the Company on a consolidated basis.

Under the current requirements, banking organizations must have a minimum total risk-based capital ratio of 8.0%, a minimum Tier 1 risk-based capital ratio of 6.0%, a minimum common equity Tier 1 risk-based capital ratio of 4.5%, and a minimum leverage ratio of 4.0% in order to be "adequately capitalized." In addition to these requirements, banking organizations must maintain a capital conservation buffer consisting of common Tier 1 equity in an amount above the minimum

31

risk-based capital requirements for "adequately capitalized" institutions equal to 2.5% of total risk-weighted assets, resulting in a requirement for the Company and the Bank effectively to maintain common equity Tier 1, Tier 1 and total capital ratios of 7.0%, 8.5% and 10.5%, respectively. The Company and the Bank must maintain the capital conservation buffer to avoid restrictions on the ability to pay dividends, pay discretionary bonuses and to engage in share repurchases based on the amount of the shortfall and the institution's "eligible retained income" (that is, the greater of (i) net income for the preceding four quarters, net of distributions and associated tax effects not reflected in net income and (ii) average net income over the preceding four quarters).

The Company and Bank's risk-based capital ratios exceeded regulatory requirements, including the capital conservation buffer, at September 30, 2022 and December 31, 2021, and the Bank's capital ratios met the requirements for it to be considered "well capitalized" under prompt corrective action provisions for each period. There were no changes to the Company or Bank's capital ratios that occurred subsequent to September 30, 2022 that would change the Company or Bank's regulatory capital categorization. The following table presents the Company and Bank's regulatory capital ratios at the periods indicated:

	September 30, 2022				Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer		Minimum Regulatory Provision to Be "Well Capitalized"		December 31, 2021				Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer		Minimum Regulatory Provision to Be "Well Capitalized"
(Dollars in thousands)	Amount		Ratio						Amount		Ratio
Camden National Corporation:
Total risk-based capital ratio	$	547,244	13.81	%	10.50	%	10.00	%	$	522,714	14.71	%	10.50	%	10.00	%
Tier 1 risk-based capital ratio	507,262		12.81	%	8.50	%	6.00	%	486,263		13.68	%	8.50	%	6.00	%
Common equity Tier 1 risk-based capital ratio(1)	464,262		11.72	%	7.00	%	N/A		443,263		12.47	%	7.00	%	N/A
Tier 1 leverage capital ratio(1)	507,262		9.24	%	4.00	%	N/A		486,263		8.92	%	4.00	%	N/A
Camden National Bank:
Total risk-based capital ratio	$	516,673	13.07	%	10.50	%	10.00	%	$	488,070	13.78	%	10.50	%	10.00	%
Tier 1 risk-based capital ratio	476,691		12.06	%	8.50	%	8.00	%	451,620		12.75	%	8.50	%	8.00	%
Common equity Tier 1 risk-based capital ratio	476,691		12.06	%	7.00	%	6.50	%	451,620		12.75	%	7.00	%	6.50	%
Tier 1 leverage capital ratio	476,691		8.69	%	4.00	%	5.00	%	451,620		8.31	%	4.00	%	5.00	%

(1)    “Minimum Regulatory Provisions to Be ‘Well Capitalized’” are not formally defined under applicable banking regulations for bank holding companies.

In 2006 and 2008, the Company issued $43.0 million of junior subordinated debentures in connection with the issuance of trust preferred securities. Although the junior subordinated debentures are recorded as liabilities on the Company's consolidated statements of condition, the Company is permitted, in accordance with applicable regulation, to include the debentures within its calculation of risk-based capital, subject to certain limits. At September 30, 2022 and December 31, 2021, $43.0 million of the junior subordinated debentures were included in Tier 1 and Tier 2 capital for the Company.

The Company and Bank's regulatory capital and risk-weighted assets fluctuate due to normal business, including profits and losses generated by the Company and Bank as well as changes to their asset mix. Of particular significance are changes within the Company and Bank's loan portfolio mix due to the differences in regulatory risk-weighting between retail and commercial loans. Furthermore, the Company and Bank's regulatory capital and risk-weighted assets are subject to change due to changes in GAAP and regulatory capital standards. The Company and Bank proactively monitor their regulatory capital and risk-weighted assets, and the impact of changes to their asset mix, and the impact of proposed and pending changes as a result of new and/or amended GAAP standards and regulatory changes.

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NOTE 11 – OTHER COMPREHENSIVE INCOME (LOSS)

The following tables present a reconciliation of the changes in the components of other comprehensive income and loss for the periods indicated, including the amount of tax (expense) benefit allocated to each component:

	For the Three Months Ended
	September 30, 2022						September 30, 2021
(In thousands)	Pre-Tax Amount		Tax (Expense) Benefit		After-Tax Amount		Pre-Tax Amount		Tax (Expense) Benefit		After-Tax Amount
Debt Securities:
Change in fair value	$	(28,432)	$	6,113	$	(22,319)	$	(6,546)	$	1,407	$	(5,139)
Less: reclassification adjustment for amortization of securities transferred from AFS to HTM(1)	2,436		(524)		1,912		—		—		—
Net change in fair value	(30,868)		6,637		(24,231)		(6,546)		1,407		(5,139)
Cash Flow Hedges:
Change in fair value	3,381		(727)		2,654		466		(100)		366
Less: reclassified AOCI loss into interest expense(2)	241		(52)		189		(539)		116		(423)
Less: reclassified AOCI gain into interest income(3)	(121)		26		(95)		410		(88)		322
Net change in fair value	3,261		(701)		2,560		595		(128)		467
Postretirement Plans:
Amortization of settlement recognition of net loss and prior service credit(4)	230		(49)		181		217		(46)		171
Other comprehensive loss	$	(27,377)	$	5,887	$	(21,490)	$	(5,734)	$	1,233	$	(4,501)

(1) Reclassified into taxable interest on investments and/or nontaxable interest on investments in the consolidated statements of income. Refer to Note 3 of the consolidated financial statements for further details.

(2) Reclassified into interest on deposits, borrowings and/or subordinated debentures on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.

(3)    Reclassified into interest and fees on loans on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.

(4)    Reclassified into other expenses on the consolidated statements of income. Refer to Note 13 of the consolidated financial statements for further details.

33

	For the Nine Months Ended
	September 30, 2022						September 30, 2021
(In thousands)	Pre-Tax Amount		Tax (Expense) Benefit		After-Tax Amount		Pre-Tax Amount		Tax (Expense) Benefit		After-Tax Amount
Debt Securities:
Change in fair value	$	(173,421)	$	37,286	$	(136,135)	$	(25,926)	$	5,574	$	(20,352)
Less: reclassification adjustment for amortization of securities transferred from AFS to HTM(1)	3,780		(813)		2,967		—		—		—
Less: reclassification adjustment for net realized losses(2)	(9)		2		(7)		—		—		—
Net change in fair value	(177,192)		38,097		(139,095)		(25,926)		5,574		(20,352)
Cash Flow Hedges:
Change in fair value	10,604		(2,280)		8,324		3,655		(785)		2,870
Less: reclassified AOCI loss into interest expense(3)	(498)		107		(391)		(1,712)		368		(1,344)
Less: reclassified AOCI gain into interest income(4)	498		(107)		391		1,205		(258)		947
Net change in fair value	10,604		(2,280)		8,324		4,162		(895)		3,267
Postretirement Plans:
Amortization of settlement recognition of net loss and prior service credit(5)	693		(149)		544		652		(140)		512
Other comprehensive loss	$	(165,895)	$	35,668	$	(130,227)	$	(21,112)	$	4,539	$	(16,573)

(1) Reclassified into taxable interest on investments and/or nontaxable interest on investments in the consolidated statements of income. Refer to Note 3 of the consolidated financial statements for further details.

(2)    Reclassified into net loss on sale of securities in the consolidated statements of income. Refer to Note 3 of the consolidated financial statements for further details.

(3) Reclassified into interest on deposits, borrowings and/or subordinated debentures on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.

(4)    Reclassified into interest and fees on loans on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.

(5)    Reclassified into other expenses on the consolidated statements of income. Refer to Note 13 of the consolidated financial statements for further details.

34

The following table presents the changes in each component of AOCI, after tax, for the periods indicated:

(In thousands)	Net Unrealized Gains (Losses) on Debt Securities		Net Unrealized Losses (Gains) on Cash Flow Hedges		Defined Benefit Postretirement Plans		AOCI
At or For the Three Months Ended September 30, 2022
Balance at June 30, 2022	$	(116,037)	$	3,985	$	(2,914)	$	(114,966)
Other comprehensive (loss) income before reclassifications	(22,319)		2,654		—		(19,665)
Less: Amounts reclassified from AOCI	1,912		94		(181)		1,825
Other comprehensive (loss) income	(24,231)		2,560		181		(21,490)
Balance at September 30, 2022	$	(140,268)	$	6,545	$	(2,733)	$	(136,456)
At or For the Nine Months Ended September 30, 2022
Balance at December 31, 2021	$	(1,173)	$	(1,779)	$	(3,277)	$	(6,229)
Other comprehensive (loss) income before reclassifications	(136,135)		8,324		—		(127,811)
Less: Amounts reclassified from AOCI	2,960		—		(544)		2,416
Other comprehensive (loss) income	(139,095)		8,324		544		(130,227)
Balance at September 30, 2022	$	(140,268)	$	6,545	$	(2,733)	$	(136,456)
At or For the Three Months Ended September 30, 2021
Balance at June 30, 2021	$	14,097	$	(1,826)	$	(3,603)	$	8,668
Other comprehensive (loss) income before reclassifications	(5,139)		366		—		(4,773)
Less: Amounts reclassified from AOCI	—		(101)		(171)		(272)
Other comprehensive (loss) income	(5,139)		467		171		(4,501)
Balance at September 30, 2021	$	8,958	$	(1,359)	$	(3,432)	$	4,167
At or For the Nine Months Ended September 30, 2021
Balance at December 31, 2020	$	29,310	$	(4,626)	$	(3,944)	$	20,740
Other comprehensive (loss) income before reclassifications	(20,352)		2,870		—		(17,482)
Less: Amounts reclassified from AOCI	—		(397)		(512)		(909)
Other comprehensive (loss) income	(20,352)		3,267		512		(16,573)
Balance at September 30, 2021	$	8,958	$	(1,359)	$	(3,432)	$	4,167

NOTE 12 – REVENUE FROM CONTRACTS WITH CUSTOMERS

A portion of the Company's non-interest income is derived from contracts with customers, and, as such, the revenue recognized depicts the transfer of promised goods or services to its customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company considers the terms of the contract and all relevant facts and circumstances when applying this guidance.

35

The Company has disaggregated its revenue from contracts with customers into categories based on the nature of the revenue. The categorization of revenues from contracts with customers that are within the scope of ASC 606 closely aligns with the presentation of revenue categories presented within non-interest income on the consolidated statements of income. The following table presents the revenue streams within the scope of ASC 606 for the periods indicated:

	Location on Consolidated Statements of Income	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)		2022		2021		2022		2021
Debit card interchange income	Debit card income	$	3,234	$	3,278	$	9,371	$	9,126
Services charges on deposit accounts	Service charges on deposit accounts	1,941		1,744		5,705		4,800
Fiduciary services income	Income from fiduciary services	1,535		1,627		4,847		4,860
Investment program income	Brokerage and insurance commissions	1,003		993		3,269		2,885
Other non-interest income	Other income	509		521		1,360		1,368
Total non-interest income within the scope of ASC 606		8,222		8,163		24,552		23,039
Total non-interest income not in scope of ASC 606		1,732		2,936		6,368		14,595
Total non-interest income		$	9,954	$	11,099	$	30,920	$	37,634

In each of the revenue streams identified above, there were no significant judgments made in determining or allocating the transaction price, as the consideration and services are generally explicitly identified in the associated contracts.

NOTE 13 – EMPLOYEE BENEFIT PLANS

The Company sponsors unfunded, non-qualified SERPs for certain officers and provides medical and life insurance to certain eligible retired employees.

The components of net periodic pension and postretirement benefit cost were as follow for the following periods:

Supplemental Executive Retirement Plan:

(In thousands)	Location on Consolidated Statements of Income	Three Months Ended September 30,				Nine Months Ended September 30,
Net periodic pension cost		2022		2021		2022		2021
Service cost	Salaries and employee benefits	$	133	$	126	$	400	$	378
Interest cost	Other expenses	115		97		345		292
Recognized net actuarial loss	Other expenses	214		194		645		583
Total		$	462	$	417	$	1,390	$	1,253

Other Postretirement Benefit Plan:

(In thousands)	Location on Consolidated Statements of Income	Three Months Ended September 30,				Nine Months Ended September 30,
Net periodic postretirement benefit cost		2022		2021		2022		2021
Service cost	Salaries and employee benefits	$	5	$	7	$	15	$	20
Interest cost	Other expenses	28		26		84		77
Recognized net actuarial loss	Other expenses	22		29		66		87
Amortization of prior service credit	Other expenses	(6)		(6)		(18)		(18)
Total		$	49	$	56	$	147	$	166

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NOTE 14 – EPS

The following is an analysis of basic and diluted EPS, reflecting the application of the two-class method, as described below:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except number of shares and per share data)	2022		2021		2022		2021
Net income	$	14,267	$	14,640	$	46,088	$	52,523
Dividends and undistributed earnings allocated to participating securities(1)	(39)		(40)		(121)		(145)
Net income available to common shareholders	$	14,228	$	14,600	$	45,967	$	52,378
Weighted-average common shares outstanding for basic EPS	14,619,460		14,931,056		14,670,450		14,930,387
Dilutive effect of stock-based awards(2)	55,872		67,957		57,899		66,154
Weighted-average common and potential common shares for diluted EPS	14,675,332		14,999,013		14,728,349		14,996,541
Earnings per common share:
Basic EPS	$	0.97	$	0.98	$	3.13	$	3.51
Diluted EPS	$	0.97	$	0.97	$	3.12	$	3.49
Awards excluded from the calculation of diluted EPS(3):
Performance-based awards	3,903		3,382		—		—

(1)    Represents dividends paid and undistributed earnings allocated to non-vested stock-based awards that contain non-forfeitable rights to dividends.

(2)    Represents the assumed dilutive effect of unexercised and/or unvested stock options, restricted shares, restricted share units and contingently issuable performance-based awards utilizing the treasury stock method.

(3)    Represents stock-based awards not included in the computation of potential common shares for purposes of calculating diluted EPS as the exercise prices were greater than the average market price of the Company's common stock, and, therefore, are considered anti-dilutive.

Non-vested stock-based payment awards that contain non-forfeitable rights to dividends are participating securities and are included in the computation of EPS pursuant to the two-class method. The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Certain of the Company’s non-vested stock-based awards qualify as participating securities. 

Net income is allocated between the common stock and participating securities pursuant to the two-class method. Basic EPS is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period, excluding participating non-vested stock-based awards. Diluted EPS is computed in a similar manner, except that the denominator includes the number of additional common shares that would have been outstanding if potentially dilutive common shares were issued using the treasury stock method.

NOTE 15 – FAIR VALUE MEASUREMENT AND DISCLOSURE

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined using quoted market prices. However, in many instances, quoted market prices are not available. In such instances, fair values are determined using various valuation techniques. Various assumptions and observable inputs must be relied upon in applying these techniques. GAAP establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

GAAP permits an entity to choose to measure eligible financial instruments and other items at fair value. The Company has elected the fair value option for its loans held for sale. Electing the fair value option for loans held for sale enables the Company’s financial position to align more clearly with the economic value of the actively traded asset.

The fair value hierarchy for valuation of an asset or liability is as follows:

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Level 1:   Valuation is based upon unadjusted quoted prices in active markets for identical assets and liabilities that the entity has the ability to access as of the measurement date.

Level 2:   Valuation is determined from quoted prices for similar assets or liabilities in active markets, from quoted prices for identical or similar instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market.

Level 3:   Valuation is derived from model-based and other techniques in which at least one significant input is unobservable and which may be based on the Company’s own estimates about the assumptions that market participants would use to value the asset or liability.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon model-based techniques incorporating various assumptions including interest rates, prepayment speeds and credit losses. Assets and liabilities valued using model-based techniques are classified as either Level 2 or Level 3, depending on the lowest level classification of an input that is considered significant to the overall valuation. A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

Financial Instruments Recorded at Fair Value on a Recurring Basis

Trading Securities and Deferred Compensation: The fair value of trading securities and deferred compensation is reported using market quoted prices and has been classified as Level 1 as such securities and underlying securities are actively traded and no valuation adjustments have been applied.

Debt Securities:  The fair value of investments in debt securities is reported utilizing prices provided by an independent pricing service based on recent trading activity and other observable information including, but not limited to, dealer quotes, market spreads, cash flows, market interest rate curves, market consensus prepayment speeds, credit information, and the bond’s terms and conditions. The fair value of debt securities is classified as Level 2.

Loans Held For Sale: The fair value of loans held for sale is determined on an individual loan basis using quoted secondary market prices and is classified as Level 2.

Derivatives:  The fair value of interest rate swaps is determined using inputs that are observable in the market place obtained from third parties including yield curves, publicly available volatilities, and floating indexes and, accordingly, are classified as Level 2 inputs. The credit value adjustments associated with derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default. As of September 30, 2022 and December 31, 2021, the credit valuation adjustment on the overall valuation of its derivative positions and was not significant to the overall valuation of its derivatives, and, thus, the Company's interest rate swaps were classified as Level 2.

The fair value of the Company's fixed rate interest rate lock commitments were determined using secondary market pricing for loans with similar structures, including term, rate and borrower credit quality, adjusted for the Company's pull-through rate estimate (i.e. estimate of loans within its loan pipeline that will ultimately complete the origination process and be funded). The Company has classified its fixed rate interest rate lock commitments as Level 2, as the quoted secondary market prices are the more significant input, and, although the Company's internal pull-through rate estimate is a Level 3 estimate, it is less significant to the ultimate valuation.

The fair value of the Company's forward delivery commitments is determined using secondary market pricing for loans with similar structures, including term, rate and borrower credit quality, and the locked and agreed to price with the secondary market investor. The Company has classified its fixed rate interest rate lock commitments as Level 2.

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The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, for the dates indicated:

(In thousands)	Fair Value		Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)
September 30, 2022
Financial assets:
Trading securities	$	3,727	$	3,727	$	—	$	—
AFS debt securities:
Obligations of states and political subdivisions	51,474		—		51,474		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	529,788		—		529,788		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	121,811		—		121,811		—
Subordinated corporate bonds	20,545		—		20,545		—
Loans held for sale	4,629		—		4,629		—
Customer loan swaps	16,112		—		16,112		—
Interest rate contracts	13,806		—		13,806		—
Fixed rate mortgage interest rate lock commitments	11		—		11		—
Forward delivery commitments	318		—		318		—
Financial liabilities:
Deferred compensation	$	3,727	$	3,727	$	—	$	—
Customer loan swaps	16,134		—		16,134		—
Interest rate contracts	5,459		—		5,459		—
Fixed rate mortgage interest rate lock commitments	395		—		395		—
December 31, 2021
Financial assets:
Trading securities	$	4,428	$	4,428	$	—	$	—
AFS debt securities:
Obligations of U.S. government-sponsored enterprises	8,344		—		8,344		—
Obligations of states and political subdivisions	117,478		—		117,478		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	1,000,257		—		1,000,257		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	358,849		—		358,849		—
Subordinated corporate bonds	22,558		—		22,558		—
Loans held for sale	5,815		—		5,815		—
Customer loan swaps	19,297		—		19,297		—
Interest rate contracts	5,589		—		5,589		—
Fixed rate mortgage interest rate lock commitments	371		—		371		—
Forward delivery commitments	86		—		86		—
Financial liabilities:
Deferred compensation	$	4,428	$	4,428	$	—	$	—
Customer loan swaps	19,485		—		19,485		—
Interest rate contracts	7,872		—		7,872		—
Fixed rate mortgage interest rate lock commitments	91		—		91		—
Forward delivery commitments	6		—		6		—

 The Company did not have any transfers between Level 1 and Level 2 of the fair value hierarchy during the nine months ended September 30, 2022. The Company’s policy for determining transfers between levels occurs at the end of the reporting period when circumstances in the underlying valuation criteria change and result in transfer between levels.

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Financial Instruments Recorded at Fair Value on a Nonrecurring Basis

The Company may be required, from time to time, to measure certain financial assets and financial liabilities at fair value on a nonrecurring basis in accordance with GAAP. These include assets that are measured at the lower of cost or market value that were recognized at fair value below cost at the end of the period.

Collateral-Dependent Loans:  Expected credit losses on individually assessed loans deemed to be collateral dependent are valued based upon the lower of amortized cost or fair value of the underlying collateral less costs to sell. Management estimates the fair values of these assets using Level 2 inputs, such as the fair value of collateral based on independent third-party market approach appraisals for collateral-dependent loans, and Level 3 inputs where circumstances warrant an adjustment to the appraised value based on the age of the appraisal and/or comparable sales, condition of the collateral, and market conditions.

Servicing Assets:  The Company accounts for mortgage servicing assets at cost, subject to impairment testing. When the carrying value of a tranche exceeds fair value, a valuation allowance is established to reduce the carrying cost to fair value. Fair value is based on a valuation model that calculates the present value of estimated net servicing income. The Company obtains a third-party valuation based upon loan level data including note rate, type and term of the underlying loans. The model utilizes two significant unobservable inputs, namely loan prepayment assumptions and the discount rate used, to calculate the fair value of each tranche, and, as such, the Company has classified the model within Level 3 of the fair value hierarchy.

Non-Financial Instruments Recorded at Fair Value on a Non-Recurring Basis

The Company has no non-financial assets or non-financial liabilities measured at fair value on a recurring basis. Non-financial assets measured at fair value on a non-recurring basis consist of OREO, goodwill and core deposit intangible assets. 

OREO: OREO properties acquired through foreclosure or deed in lieu of foreclosure are recorded at net realizable value, which is the fair value of the real estate, less estimated costs to sell. Any write-down of the recorded investment in the related loan is charged to the ACL upon transfer to OREO. Upon acquisition of a property, a current appraisal is used or an internal valuation is prepared to substantiate fair value of the property. After foreclosure, management periodically, but at least annually, obtains updated valuations of the OREO properties and, if additional impairments are deemed necessary, the subsequent write-downs for declines in value are recorded through a valuation allowance and a provision for credit losses charged to other non-interest expense within the consolidated statements of income. As management considers appropriate, adjustments are made to the appraisal obtained for the OREO property to account for recent sales activity of comparable properties, changes in the condition of the property, and changes in market conditions. These adjustments are not observable in an active market and are classified as Level 3. At September 30, 2022 and December 31, 2021, the Company did not have any OREO properties.

Goodwill: Goodwill represents the excess cost of an acquisition over the fair value of the net assets acquired. The fair value of goodwill is estimated by utilizing several standard valuation techniques, including discounted cash flow analyses, bank merger multiples, and/or an estimation of the impact of business conditions and investor activities on the long-term value of the goodwill. Should an impairment occur, the associated goodwill is written-down to fair value and the impairment charge is recorded within non-interest expense in the consolidated statements of income. The Company conducts an annual impairment test of goodwill in the fourth quarter each year, or more frequently as necessary. There have been no indications or triggering events during the nine months ended September 30, 2022, for which management believes it is more likely than not that goodwill is impaired.

Core Deposit Intangible Assets: The Company's core deposit intangible assets represent the estimated value of acquired customer relationships and are amortized over the estimated life of those relationships. Core deposit intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. There were no events or changes in circumstances for the nine months ended September 30, 2022, that indicated the carrying amount may not be recoverable.

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The table below highlights financial and non-financial assets measured and recorded at fair value on a non-recurring basis for the dates indicated:

(In thousands)	Fair Value		Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)
September 30, 2022
Financial assets:
Collateral-dependent loans	$	69	$	—	$	—	$	69
December 31, 2021
Financial assets:
Collateral-dependent loans	$	73	$	—	$	—	$	73

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis for the dates indicated:

(Dollars in thousands)	Fair Value		Valuation Methodology	Unobservable Input	Discount
September 30, 2022
Collateral-dependent loans:
Partially charged-off	$	69	Market approach appraisal of    collateral	Estimated selling costs	18%
December 31, 2021
Collateral-dependent loans
Specifically reserved	$	73	Market approach appraisal of collateral	Estimated selling costs	11%

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The estimated fair values and related carrying amounts for assets and liabilities for which fair value is only disclosed are shown below as of the dates indicated:

	Carrying Amount		Fair Value		Readily Available Market Prices (Level 1)		Observable Market Prices (Level 2)		Company Determined Market Prices (Level 3)
September 30, 2022
Financial assets:
HTM debt securities	$	534,309	$	491,759	$	—	$	491,759	$	—
Commercial real estate loans(1)(2)	1,543,107		1,517,911		—		—		1,517,911
Commercial loans(2)	418,110		412,670		—		—		412,670
SBA PPP loans(2)	684		704		—		—		704
Residential real estate loans(2)	1,610,324		1,424,504		—		—		1,424,504
Home equity loans(2)	231,507		238,723		—		—		238,723
Consumer loans(2)	20,406		18,277		—		—		18,277
Servicing assets	2,470		4,466		—		—		4,466
Financial liabilities:
Time deposits	$	279,603	$	270,794	$	—	$	270,794	$	—
Short-term borrowings	421,101		420,608		—		420,608		—
Subordinated debentures	44,331		31,918		—		31,918		—
December 31, 2021
Financial assets:
HTM debt securities	$	1,291	$	1,380	$	—	$	1,380	$	—
Commercial real estate loans(1)(2)	1,474,087		1,435,794		—		—		1,435,794
Commercial loans(2)	359,512		356,463		—		—		356,463
SBA PPP loans(2)	35,934		37,133		—		—		37,133
Residential real estate loans(2)	1,300,314		1,297,592		—		—		1,297,592
Home equity loans(2)	208,934		205,920		—		—		208,934
Consumer loans(2)	19,437		17,551		—		—		17,551
Servicing assets	2,471		3,310		—		—		3,310
Financial liabilities:
Time deposits	$	409,668	$	409,264	$	—	$	409,264	$	—
Short-term borrowings	211,608		211,586		—		211,586		—
Subordinated debentures	44,331		33,248		—		33,248		—

(1)    Commercial real estate loan includes non-owner-occupied and owner-occupied properties.

(2)    The presented carrying amount is net of the allocated ACL on loans.

Excluded from the summary were financial instruments measured at fair value on a recurring and nonrecurring basis, as previously described.

The Company considers its financial instruments' current use to be the highest and best use of the instruments.

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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

The discussions set forth below and in the documents we incorporate by reference herein contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including certain plans, exceptions, goals, projections, and statements, which are subject to numerous risks, assumptions, and uncertainties. Forward-looking statements can be identified by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “plan,” “target,” “potential” or “goal” or future or conditional verbs such as “will,” “may,” “might,” “should,” “could” and other expressions which predict or indicate future events or trends and which do not relate to historical matters. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult for the Company to predict. The actual results, performance or achievements of the Company may differ materially from what is reflected in such forward-looking statements

Forward-looking statements should not be relied on, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of the Company. These risks, uncertainties and other factors may cause the actual results, performance or achievements of the Company to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.

The following factors, among others, could cause the Company’s financial performance to differ materially from the Company’s goals, plans, objectives, intentions, expectations and other forward-looking statements:

•the impact of the COVID-19 pandemic;

•the impact of the war in Ukraine;

•weakness in the United States economy in general and the regional and local economies within the New England region and Maine, which could result in a deterioration of credit quality, an increase in the allowance for credit losses or a reduced demand for the Company’s credit or fee-based products and services;

•changes in trade, monetary, and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System;

•inflation, interest rate, market, and monetary fluctuations;

•ongoing competition in the labor markets and increased employee turnover;

•competitive pressures, including continued industry consolidation and the increased financial services provided by non-banks;

•the effects of climate change on the Company and its customers, borrowers or service providers;

•the effects of civil unrest, international hostilities or other geopolitical events;

•deterioration in the value of the Company's investment securities;

•volatility in the securities markets that could adversely affect the value or credit quality of the Company’s assets, impairment of goodwill, or the availability and terms of funding necessary to meet the Company’s liquidity needs;

•changes in information technology and other operational risks, including cybersecurity, that require increased capital spending;

•changes in consumer spending and savings habits;

•changes in tax, banking, securities and insurance laws and regulations;

•the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; and

•changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Financial Accounting Standards Board ("FASB"), and other accounting standard setters.

In addition, statements regarding the potential effects of the war in Ukraine, the COVID-19 pandemic and other notable national and global current events on the Company’s business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable

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and in many cases beyond the Company's control.

You should carefully review all of these factors, and be aware that there may be other factors that could cause differences, including the risk factors listed in our Annual Report on Form 10-K for the year ended December 31, 2021, as updated by the Company's quarterly reports on Form 10-Q, including this report, and other filings with the Securities and Exchange Commission. Readers should carefully review the risk factors described therein and should not place undue reliance on our forward-looking statements.

These forward-looking statements were based on information, plans and estimates at the date of this report, and we undertake no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except to the extent required by applicable law or regulation.

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NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP

In addition to evaluating the Company’s results of operations in accordance with GAAP, management supplements this evaluation with an analysis of certain non-GAAP financial measures, return on average tangible equity; the efficiency ratio; net interest income (fully-taxable equivalent); earnings before income taxes and provision; earnings before income taxes, provision, and SBA PPP loan income; total loans, excluding SBA PPP loans; adjusted yield on interest-earning assets and adjusted net interest margin (fully-taxable equivalent); tangible book value per share; tangible common equity ratio; and core deposits and average core deposits. We utilize these non-GAAP financial measures for purposes of measuring performance against the Company's peer group and other financial institutions, as well as for analyzing its internal performance. The Company also believes these non-GAAP financial measures help investors better understand the Company's operating performance and trends and allows for better performance comparisons to other banks. In addition, these non-GAAP financial measures remove the impact of unusual items that may obscure trends in the Company’s underlying performance. These disclosures should not be viewed as a substitute for GAAP operating results, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other financial institutions.

Return on Average Tangible Equity. Return on average tangible equity is the ratio of (i) net income, adjusted for (a) tax effected amortization of core deposit intangible assets and (b) goodwill impairment, as necessary, to (ii) average shareholders' equity, adjusted for average goodwill and core deposit intangible assets. This adjusted financial ratio reflects a shareholder's return on tangible capital deployed in our business and is a common measure within the financial services industry.

	Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in thousands)	2022			2021			2022			2021
Net income, as presented	$	14,267		$	14,640		$	46,088		$	52,523
Add: amortization of core deposit intangible assets, net of tax(1)	123			129			371			388
Net income, adjusted for amortization of core deposit intangible assets	$	14,390		$	14,769		$	46,459		$	52,911
Average equity, as presented	$	452,815		$	552,721		$	478,420		$	541,841
Less: average goodwill and core deposit intangible assets	(96,493)			(97,128)			(96,651)			(97,293)
Average tangible equity	$	356,322		$	455,593		$	381,769		$	444,548
Return on average equity	12.50		%	10.51		%	12.88		%	12.96		%
Return on average tangible equity	16.02		%	12.86		%	16.27		%	15.91		%

(1)     Assumed a 21% tax rate.

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Efficiency Ratio.  The efficiency ratio represents an approximate measure of the cost required for the Company to generate a dollar of revenue. This is a common measure within the financial services industry and is a key ratio for evaluating Company performance. The efficiency ratio is calculated as the ratio of (i) total non-interest expense, adjusted for certain operating expenses, as necessary, to (ii) net interest income on a tax equivalent basis plus total non-interest income, adjusted for certain other income items, as necessary.

	Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in thousands)	2022			2021			2022			2021
Non-interest expense, as presented	$	27,091		$	26,263		$	79,856		$	76,752
Less: prepayment penalty on borrowings	—			—			—			(514)
Adjusted non-interest expense	$	27,091		$	26,263		$	79,856		$	76,238
Net interest income, as presented	$	37,813		$	34,746		$	110,712		$	100,639
Add: effect of tax-exempt income(1)	242			228			700			764
Non-interest income, as presented	9,954			11,099			30,920			37,634
Add: net loss on sale of securities	—			—			9			—
Adjusted net interest income plus non-interest income	$	48,009		$	46,073		$	142,341		$	139,037
Ratio of non-interest expense to total revenues(2)	56.71		%	57.29		%	56.38		%	55.51		%
Efficiency ratio	56.43		%	57.00		%	56.10		%	54.83		%

(1)     Assumed a 21% tax rate.

(2)    Revenue is the sum of net interest income and non-interest income.

Net Interest Income (Fully-Taxable Equivalent). Net interest income on a fully-taxable equivalent basis is net interest income plus the taxes that would have been paid had tax-exempt securities been taxable. This number attempts to enhance the comparability of the performance of assets that have different tax liabilities. This is a common measure within the financial services industry and is used within the calculation of net interest margin on a fully-taxable equivalent basis.

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Net interest income, as presented	$	37,813	$	34,746	$	110,712	$	100,639
Add: effect of tax-exempt income(1)	242		228		700		764
Net interest income (fully-taxable equivalent)	$	38,055	$	34,974	$	111,412	$	101,403

(1)     Assumed a 21% tax rate.

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Earnings before Income Taxes and Provision, and Earnings before Income Taxes, Provision and SBA PPP Loan Income. Earnings before income taxes and provision, and earnings before income taxes, provision and SBA PPP loan income are each a supplemental measure of operating earnings and performance. Earnings before income taxes and provision is calculated as net income before provision for credit losses and income tax expense, and earnings before income taxes, provision and SBA PPP loan income is calculated as net income before provision for credit losses, income tax expense and SBA PPP loan income. These supplemental measures have become more widely used by financial institutions as a measure of financial performance for comparability across financial institutions due to the impact of the COVID-19 pandemic on the provision for credit losses, as well as the origination of SBA PPP loans in response to the COVID-19 pandemic that are not a recurring and sustainable source of revenues for financial institutions.

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Net income, as presented	$	14,267	$	14,640	$	46,088	$	52,523
Add: income tax expense, as presented	3,645		4,003		11,654		13,418
Add: provision (credit) for credit losses, as presented	2,764		939		4,034		(4,420)
Earnings before income taxes and provision for credit losses	$	20,676	$	19,582	$	61,776	$	61,521
Less: SBA PPP loan income	(50)		(1,951)		(1,248)		(5,487)
Earnings before income taxes, provision for credit losses and SBA PPP Loan income	$	20,626	$	17,631	$	60,528	$	56,034

Adjusted Yield on Interest-Earning Assets. Adjusted yield on interest-earning assets normalizes the Company's reported yield on interest-earning assets for certain unusual, non-recurring items, including: (i) the impact of SBA PPP loans and (ii) excess cash/liquidity held by the Company, primarily due to Federal stimulus programs and changes in the FRB cash holding requirements for financial institutions both in response to COVID-19.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Yield on interest-earning assets, as presented	3.40	%	2.97	%	3.19	%	3.06	%
Add: effect of excess liquidity on yield on interest-earning assets	—	%	0.16	%	0.03	%	0.12	%
Less: effect of SBA PPP loans on yield on interest-earning assets	(0.01)	%	(0.09)	%	(0.02)	%	(0.06)	%
Adjusted yield on interest-earning assets	3.39	%	3.04	%	3.20	%	3.12	%

Adjusted Net Interest Margin (Fully-Taxable Equivalent). Adjusted net interest margin on a fully-taxable equivalent basis normalizes the Company's reported net interest margin on a fully-taxable equivalent basis for certain unusual, non-recurring items, including: (i) the impact of SBA PPP loans and (ii) excess cash/liquidity held by the Company, primarily due to Federal stimulus programs and changes in the FRB cash holding requirements for financial institutions both in response to COVID-19.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net interest margin (fully-taxable equivalent), as presented	2.88	%	2.76	%	2.86	%	2.82	%
Add: effect of excess liquidity on net interest margin (fully-taxable equivalent)	—	%	0.15	%	0.02	%	0.12	%
Less: effect of SBA PPP loans on net interest margin (fully-taxable equivalent)	—	%	(0.09)	%	(0.02)	%	(0.07)	%
Adjusted net interest margin (fully-taxable equivalent)	2.88	%	2.82	%	2.86	%	2.87	%

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Tangible Book Value per Share.  Tangible book value per share is the ratio of (i) shareholders’ equity less goodwill and other intangibles to (ii) total common shares outstanding at period end. Tangible book value per share is a common measure within the financial services industry to assess the value of a company, as it removes goodwill and other intangible assets generated within purchase accounting upon a business combination.

Tangible Common Equity Ratio. Tangible common equity is the ratio of (i) shareholders’ equity less goodwill and other intangible assets to (ii) total assets less goodwill and other intangible assets. This ratio is a measure used within the financial services industry to assess a company's capital adequacy.

(In thousands, except number of shares, per share data and ratios)	September 30, 2022			December 31, 2021
Tangible Book Value Per Share:
Shareholders’ equity, as presented	$	431,007		$	541,294
Less: goodwill and other intangible assets	(96,416)			(96,885)
Tangible shareholders’ equity	$	334,591		$	444,409
Shares outstanding at period end	14,563,828			14,739,956
Book value per share	$	29.59		$	36.72
Tangible book value per share	$	22.97		$	30.15
Tangible Common Equity Ratio:
Total assets	$	5,551,724		$	5,500,356
Less: goodwill and other intangible assets	(96,416)			(96,885)
Tangible assets	$	5,455,308		$	5,403,471
Common equity ratio	7.76		%	9.84		%
Tangible common equity ratio	6.13		%	8.22		%

Core Deposits. Core deposits are used by management to measure the portion of the Company's total deposits that management believes to be more stable and at a lower interest rate cost. The Company calculates core deposits as total deposits (as reported on the consolidated statements of condition) less certificates of deposit and brokered deposits. Management believes core deposits is a useful measure to assess the Company's deposit base, including its potential volatility.

(In thousands)	September 30, 2022		December 31, 2021
Total deposits	$	4,568,604	$	4,608,889
Less: certificates of deposit	(279,603)		(309,648)
Less: brokered deposits	(89,775)		(208,468)
Core deposits	$	4,199,226	$	4,090,773

Average Core Deposits. Average core deposits are used by management to measure the portion of the Company's total deposits that management believes to be more stable and at a lower interest rate cost. The Company calculates average core deposits as total deposits (as disclosed on the Average Balance, Interest and Yield/Rate Analysis tables) less certificates of deposit. Management believes core deposits is a useful measure to assess the Company's deposit base, including its potential volatility.

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Total average deposits	$	4,531,019	$	4,223,964	$	4,431,837	$	3,994,457
Less: average certificates of deposit	(290,043)		(327,802)		(297,646)		(339,230)
Average core deposits	$	4,240,976	$	3,896,162	$	4,134,191	$	3,655,227

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Total Loans, Excluding SBA PPP loans. Total loans, excluding SBA PPP loans is used by management to measure the Company's core loan portfolio. The Company calculates total loans, excluding SBA PPP loans as total loans (as reported on the consolidated statements of condition) less SBA PPP loans.

(In thousands)	September 30, 2022		December 31, 2021
Total loans, as presented	$	3,860,680	$	3,431,474
Less: SBA PPP loans	(685)		(35,953)
Total loans, excluding SBA PPP loans	$	3,859,995	$	3,395,521

CRITICAL ACCOUNTING POLICIES

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and could potentially result in materially different results under different assumptions and conditions. In preparing the Company’s consolidated financial statements, management is required to make significant estimates and assumptions that affect assets, liabilities, revenues, and expenses reported. Actual results could differ materially from our current estimates as a result of changing conditions and future events. Several estimates are particularly critical and are susceptible to significant near-term change, including (i) the ACL, including the ACL on loans, off-balance sheet credit exposures and investments; (ii) accounting for acquisitions and the subsequent review of goodwill and intangible assets generated in an acquisition for impairment; (iii) income taxes; and (iv) accounting for defined benefit and postretirement plans.

There have been no material changes to the Company's critical accounting policies from those disclosed within its Annual Report on Form 10-K for the year ended December 31, 2021. Refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2021, for discussion of the Company's critical accounting policies.

Refer to Note 2 of the consolidated financial statements for discussion of accounting pronouncements issued but yet to be adopted and implemented.

GENERAL OVERVIEW

Camden National Corporation (hereafter referred to as “we,” “our,” “us,” or the “Company”) is a publicly-held bank holding company, with approximately $5.6 billion in assets at September 30, 2022, incorporated under the laws of the State of Maine and headquartered in Camden, Maine. Camden National Bank (the "Bank"), a wholly-owned subsidiary of the Company, was founded in 1875. The Company was founded in 1984, went public in 1997 and is now registered with NASDAQ Global Market (“NASDAQ”) under the ticker symbol "CAC."

The primary business of the Company and the Bank is to attract deposits from, and to extend loans to, consumer, institutional, municipal, non-profit and commercial customers. The Company, through the Bank, provides a broad array of banking and other financial services, including wealth management and trust services, brokerage, investment advisory and insurance services, to consumer, business, non-profit and municipal customers.

The Company operates throughout Maine, with its primary markets and presence being throughout coastal and central Maine, and select areas of New Hampshire and Massachusetts. The Company and the Bank generally have effectively competed with other financial institutions by emphasizing customer service, highlighted by local decision-making, establishing long-term customer relationships, building customer loyalty and providing products and services designed to meet the needs of customers.

EXECUTIVE OVERVIEW

Third Quarter Update. Throughout the third quarter of 2022, global and national markets were, again, challenged by the dynamic and rapid shift in the operating environment, continuing the trend from the beginning of the year. During the third quarter of 2022, the FOMC raised the Federal Funds Rate a total of 1.50% through two 0.75% interest rate increases in July and September, which brought the Federal Funds Rate target interest rate range to 3.00% - 3.25%. Through the first nine months of 2022, the Federal Funds Rate has increased in total 3.00% as it works to slow national inflation. Current expectations are for the FOMC to continue to increase interest through the end of 2022 and into 2023.

Through the first nine months of 2022, the Company has seen the impact of the change in the interest rate environment and stock market directly within its own operations and financial results, not unlike other banks, including:

49

•The change in the interest rate environment through the nine months ended September 30, 2022, compared to the same period last year can been seen in the Company's net interest income and net interest margin. Should interest rates continue to drive higher, we anticipate this will likely impact overall growth nationally and within our markets and lead to slowing loan demand in coming periods.

•The effects of the change in the interest rate environment across the same periods can also be seen on the Company's stockholders' equity (or capital). The sharp rise in interest rates through the nine months ended September 30, 2022, has led to a sharp decrease in the valuation of the Company's bond investments portfolio. Those bonds designated and accounted for as AFS are carried at fair value and the change in fair value between periods is accounted for in AOCI within shareholders' equity. As a result, the Company's stockholders' equity to total assets ratio has decreased from 9.84% at December 31, 2021 to 7.76% at September 30, 2022, and its tangible common equity ratio (non-GAAP) has decreased from 8.22% at December 31, 2021 to 6.13% at September 30, 2022. The Company's regulatory capital ratios, as described in Note 10 of the consolidated financial statements, continue to be strong and well in excess of regulatory capital requirements.

•The growing risk of a near-term recession has been factored into the Company's ACL calculation through the first nine months of 2022 and has resulted in an increase to the ACL the last two quarters, including the third quarter of 2022, despite excellent credit quality across the Company's loan portfolio.

•Lower market-related revenues for the three and nine months ended September 30, 2022, compared to the same periods of 2021, including income from fiduciary services and BOLI.

Discussed below is further information on the Company's financial performance for the third quarter and first nine months of 2022, and its current financial position.

Operating Results. Net income for the third quarter of 2022 was $14.3 million, a decrease of $373,000 or 3%, compared to the third quarter of 2021, and diluted EPS remained consistent at $0.97 for the third quarter of 2022 and 2021. Earnings before income taxes and provision expense (non-GAAP) for the third quarter of 2022 were $20.7 million, an increase of $1.1 million, or 6%, between periods, and earnings before income taxes, provision expense and SBA PPP loan income (non-GAAP) increased $3.0 million, or 17%, between periods.

Revenues (defined as the sum of net interest income and non-interest income) for the third quarter of 2022 totaled $47.8 million, an increase of $1.9 million, or 4%, compared to the third quarter of 2021.

•Net interest income increased $3.1 million, or 9%, between periods driven by strong average interest-earning assets between periods of $221.6 million, or 4%, and net interest margin expansion of 12 basis points to 2.88% for the third quarter of 2022 due to the sharp rise in interest rates and change in mix of interest-earnings assets as lower yielding excess cash and investment cash flows were deployed to fund higher yielding loan growth.

•Non-interest income decreased $1.1 million or 10%, between periods primarily led by lower mortgage banking income of $1.3 million. The decrease in mortgage banking income reflects the change in the markets between periods, highlighted by the increase in interest rates and slowing demand. Residential mortgage production decreased 30% between periods, and the Company sold 21% of mortgage production in the third quarter of 2022, compared to 33% for the third quarter of 2021.

A provision for credit losses of $2.8 million was reported for the third quarter of 2022, compared to $939,000 reported for the third quarter of 2021. This increase was driven by the change in forecasted economic outlook for a softening overall economy and 16% loan growth over the last twelve months.

Non-interest expense for the third quarter of 2022 was $27.1 million, an increase of $828,000, or 3%, over the third quarter of 2021. The Company's GAAP efficiency ratio and non-GAAP efficiency ratio for the third quarter of 2022 was 56.71% and 56.43%, respectively, compared to 57.29% and 57.00% for the third quarter of 2021, respectively.

Net income for the nine months ended September 30, 2022 was $46.1 million, a decrease of $6.4 million, or 12%, over the nine months ended September 30, 2021, and diluted EPS was $3.12 for the nine months ended September 30, 2022, a decrease of $0.37, or 11%, compared to the same period last year. Earnings before income taxes and provision expense (non-GAAP) for the nine months ended September 30, 2022 were $61.8 million, an increase of $255,000 over the same period of 2021, and earnings before income taxes and provision expense and SBA PPA loan income (non-GAAP) for the nine months ended September 30, 2022 increased $4.5 million, or 8%, between periods.

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Net interest income for the first nine months of 2022 was $110.7 million, an increase of $10.1 million, or 10%, compared to the first nine months of 2021. This increase was driven by average interest-earning assets growth of $394.4 million, or 8%, along with the net interest margin expansion of 4 basis points to 2.86% for the nine months ended September 30, 2022.

Non-interest income for the first nine months of 2022 was $30.9 million, a decrease of $6.7 million, or 18%, compared to the same period in 2021. Mortgage banking income was the primary reason for the decrease between periods as revenues decreased $8.4 million, or 73%, as residential mortgage production decreased 25% between periods, and the Company sold 21% of its production through the first nine months of 2022, compared to 47% for the same period last year. Increases in other business lines partially offset the decrease in mortgage banking, including service charge fees, brokerage and insurance commissions, debit card income and other income due to the sale of property.

A provision for credit losses of $4.0 million was recorded for the first nine months of 2022, compared to a release of $4.4 million for the same period 2021. This increase was the result of a change in our economic outlook between periods as the risk of an economic slowdown has grown, as well as strong loan growth between periods of 16%. During the first nine months of 2021, reserves were released as expected credit losses during the onset of the COVID-19 pandemic in 2020 did not manifest and market conditions stabilized.

Non-interest expense for the first nine month of 2022 was $79.9 million, an increase of $3.1 million, or 4%, over the first nine months of 2021. The Company's GAAP efficiency ratio and non-GAAP efficiency ratio for the nine months ended September, 30 2022 was 56.38% and 56.10%, respectively, compared to 55.51% and 54.83% for the same period last year, respectively.

Other key financial metrics for the periods indicated were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Return on average assets (annualized)	1.03	%	1.08	%	1.13	%	1.36	%
Return on average equity (annualized)	12.50	%	10.51	%	12.88	%	12.96	%
Return on average tangible equity (annualized) (non-GAAP)	16.02	%	12.86	%	16.27	%	15.91	%
Overhead ratio (non-interest expense divided by average assets) (annualized)	1.96	%	1.95	%	1.95	%	1.99	%

Asset Quality. As of September 30, 2022, the Company's asset quality metrics remained very strong with non-performing assets strengthening to 0.09% of total assets, compared to 0.13%, at December 31, 2021. As of September 30, 2022, loans 30-89 days past due increased to 0.12% of total loans, compared to 0.04% at December 31, 2021. The increase in past due loans during the third quarter of 2022 was primarily within the residential mortgage loans portfolio and commercial real estate loans portfolio and was the result of a few large loans becoming delinquent. The Company does not view the increase in past due loans during the quarter as indicative of a larger trend.

Shareholders' Equity. As of September 30, 2022, the Company's regulatory capital ratios were each well in excess of regulatory capital requirements. Despite the Company's regulatory capital ratios remaining strong, the continued decreases in the market value of the AFS investment portfolio due to the sharp rise in interest rates through the nine months ended September 30, 2022, caused decreases across the common equity ratio and tangible common equity ratio (non-GAAP), as well as book value per share and tangible book value per share (non-GAAP) over this period. The Company expects these decreases to be temporary and not reflective of underlying credit risk within the investment portfolio. The Company's non-regulatory capital ratios and book value as of the dates indicated were as follows:

•As of September 30, 2022, the Company's common equity ratio was 7.76% and its tangible common equity ratio (non-GAAP) was 6.13%, compared to 9.84% and 8.22% as of December 31, 2021, respectively.

•As of September 30, 2022, the Company's book value per share was $29.59 and its tangible book value per share (non-GAAP) was $22.97, compared to $36.72 and $30.15 as of December 31, 2021, respectively.

In the first quarter of 2022, the Company initiated a new share repurchase program for up to 750,000 shares of its common stock, or approximately 5% of the Company's shares outstanding. This share repurchase program replaces the program that terminated in January 2022. The Company repurchased 225,245 shares of its outstanding common stock through the first nine months of 2022 at a weighted-average price of $45.46 per share, which included the repurchase of 63,689 shares at an average price of $44.38 per share in the third quarter of 2022.

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RESULTS OF OPERATIONS

Net Interest Income and Net Interest Margin

Net interest income is the interest earned on loans, securities, and other interest-earning assets, adjusted for net loan fees, origination costs, and accretion or amortization of fair value marks on loans and/or CDs created in purchase accounting, less the interest paid on interest-bearing deposits and borrowings. Net interest income is our largest source of revenue ("revenue" is defined as the sum of net interest income and non-interest income). For the quarter ended September 30, 2022, net interest income was 79% of total revenues, compared to 76% for the quarter ended September 30, 2021. Net interest income is affected by several factors including, but not limited to, changes in interest rates, loan and deposit pricing strategies and competitive conditions, the volume and mix of interest-earning assets and liabilities, and the level of non-performing assets.

For the quarter ended September 30, 2022, net interest income was $37.8 million, an increase of $3.1 million, or 9%, over the quarter ended September 30, 2021, and on a fully-taxable equivalent basis (non-GAAP), net interest income was $38.1 million, an increase of $3.1 million, or 9%, over the same period. Interest income on a fully-taxable equivalent basis increased $7.2 million, or 19%, over this period to $44.8 million for the quarter ended September 30, 2022, while interest expense increased $4.1 million, or 157%, to $6.8 million for the quarter ended September 30, 2022.

The increase in interest income on a fully-taxable equivalent basis for the quarter ended September 30, 2022 over the same quarter last year was driven by: (1) average interest-earning asset growth of $221.6 million, or 4%, between periods, which included average loan growth of $497.1 million, or 15%, net of a decrease in interest-earning cash balances of $274.5 million, or 90%, (2) the increase in the interest rate environment between periods driving a higher yield of 43 basis points between periods, partially offset by (3) lower SBA PPP loan income of $1.9 million.

•Our average loan growth between periods was attributable to the growth of: (1) residential real estate, which grew $396.9 million, or 34%, reflecting our strategy to hold more residential mortgage production within our loan portfolio, (2) commercial real estate, which grew $136.4 million, or 10%, and (3) commercial loans, which grew $53.5 million, or 15%, offsetting (4) decreasing average SBA PPP loan balances of $104.5 million as the majority of borrowers took advantage of loan forgiveness.

•For the quarter ended September 30, 2022, our interest-earning asset yield increased to 3.40%, compared to 2.97% for the quarter ended September 30, 2021. This increase in our interest-earning asset yield was the result of: (1) the shift in asset mix between periods with excess cash being deployed to fund strong loan growth of 16% between periods, primarily in residential mortgages, and (2) the change in the interest rate environment through the first nine months of 2022 as the FOMC has sharply raised interest rates in an effort to curb high levels of inflation. For the quarter ended September 30, 2022, the average interest rate for 10-year U.S. Treasury was 3.10%, compared to 1.32% for the quarter ended September 30, 2021.

The increase in interest expense for the quarter ended September 30, 2022, over the same period last year was driven by an increase in the cost of funds as total funding liabilities increased 32 basis points between periods to 0.54% for the quarter ended September 30, 2022. Between periods, cost of deposits increased 30 basis points and cost of borrowings increased 62 basis points bringing each to 0.45% and 0.54% for the quarter ended September 30, 2022, respectively. The increase in the cost of deposits and borrowings between period was, too, driven by the sharp increase in interest rates between periods. Our growth in average deposits over the past twelve months of $307.1 million, or 7%, enabled the Company to fund its 5% interest-earning asset growth, or $221.6 million, between periods through lower cost deposits. Average deposit growth between periods was driven by average interest checking and savings balances increasing $255.8 million, or 21%, and $86.4 million, or 13%, respectively, which offset lower average CD balances of $37.8 million, or 12%, between periods. Average total borrowings decreased $54.2 million, or 11%, between periods due to the strong aforementioned average deposit growth. Within average total borrowings, average brokered deposit balances decreased $208.7 million, or 72%, and average other borrowings, which consisted of FHLBB overnight and short-term advances, increased $108.1 million between periods.

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For the quarter ended September 30, 2022, net interest margin was 2.88%, an increase of 12 basis points over the quarter ended September 30, 2021.

For the nine months ended September 30, 2022, net interest income was $110.7 million, an increase of $10.1 million, or 10%, over the same period for 2021, and on a fully-taxable equivalent basis (non-GAAP) was $111.4 million, an increase of $10.0 million, or 10%, over the same period. Interest income on a fully-taxable equivalent basis increased $14.4 million, or 13%, over this period to $124.2 million for the nine months ended September 30, 2022, while interest expense increased $4.4 million, or 52%, over this period to $12.7 million for the nine months ended September 30, 2022.

The increase in interest income on a fully-taxable equivalent basis for the nine months ended September 30, 2022, over the same period last year was driven by: (1) average interest-earning asset growth of $394.4 million, or 8%, between periods, which included average loan growth of $355.5 million, or 11%, average investments growth of $229.5 million, or 19%, offset by the decrease in average interest-earning cash balances of $190.6 million, or 76%, partially offset by (2) lower SBA PPP loan income of $4.2 million. Our average loan growth between periods was concentrated in: (1) residential real estate, which grew $342.3 million, or 31%, as, we continue the strategy to hold more residential mortgage loan production in our loan portfolio, (2) commercial real estate, which grew $112.1 million, or 8%, and (3) commercial loans, which grew $50.0 million, or 15%, offsetting (4) decreasing average SBA PPP loan balances of $130.3 million as the majority of borrowers took advantage of loan forgiveness programs, and (5) decrease average consumer loans of $15.0 million, or 6%. Our investment growth between periods was driven by our increased investment activity in 2021 as we deployed our low interest earning excess liquidity to drive net interest income growth through higher yielding assets available at that time.

For the nine months ended September 30, 2022, our interest-earning asset yield was 3.19%, compared to 3.06% for the same period last year. This increase in our interest-earning asset yield was driven by the increase in our average investment yield of 11 basis points between periods to 1.92% for the nine months ended September 30, 2022. The average loan yield remained flat at 3.75% for the nine months ended September 30, 2022 and 2021. This was driven by the by the decrease in average loan yield for residential mortgages of 21 basis points. Throughout 2021, customers actively refinanced residential loans to take advantage of the lower interest rate environment driving lower yielding new loan originations and compressing the average yield in the mortgage loan segments. This decrease in mortgage yield was offset by the increase in commercial real estate of 22 basis points with more variable rate loans that broke through the floor in 2022 as interest rates continued to rise in the nine months ended September 30, 2022.

The increase in interest expense for the nine months ended September 30, 2022, over the same period last year was driven by an increase in the cost of funds as total funding liabilities increased 10 basis points between periods to 0.35% for the nine months ended September 30, 2022. Between periods, the cost of deposits increased 10 basis points and the cost of borrowings increased 19 basis points bringing each to 0.27% and 0.35% for the nine months ended September 30, 2022, respectively. The increase in the cost of deposits and borrowings between period was driven by the sharp increase in interest rates between periods. Our growth in average deposits between periods of $437.4 million, or 11%, enabled the Company to fund its 8% interest-earning asset growth, or $394.4 million, between periods through lower cost deposits. Average deposit growth between periods was driven by average core deposits (non-GAAP) growth of $479.0 million, or 13%, which offset lower average CD balances of $41.6 million, or 12%, between periods. Average total borrowings decreased $54.6 million, or 11%, between periods due to the strong aforementioned average deposit growth. Within average total borrowings, average brokered deposit balances decreased $152.2 million, or 53%, and average other borrowings, which consisted of FHLBB overnight and short-term advances, increased $60.8 million between periods.

For the nine months ended September 30, 2022 net interest margin increased 4 basis points to 2.86% over the nine months ended September 30, 2021.

The following table presents average balances, interest income, interest expense, and the corresponding average yields earned and cost of funds, as well as net interest income, net interest rate spread and net interest margin on a fully-taxable basis for the followings periods:

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Quarterly Average Balance, Interest and Yield/Rate Analysis

	Three Months Ended
	September 30, 2022						September 30, 2021
(Dollars in thousands)	Average Balance		Interest		Yield/Rate		Average Balance		Interest		Yield/Rate
Assets
Interest-earning assets:
Interest-bearing deposits in other banks and other interest-earning assets	$	30,063	$	172	2.24	%	$	304,594	$	96	0.12	%
Investments - taxable	1,288,172		6,051		1.88	%	1,284,851		5,341		1.66	%
Investments - nontaxable(1)	109,661		1,001		3.65	%	114,033		958		3.36	%
Loans(2):
Commercial real estate	1,546,638		15,973		4.04	%	1,410,201		12,934		3.59	%
Commercial(1)	402,152		4,380		4.26	%	348,619		3,201		3.59	%
SBA PPP	1,254		50		15.67	%	105,742		1,950		7.22	%
Municipal(1)	22,574		171		3.01	%	17,021		146		3.41	%
Residential real estate	1,571,449		13,712		3.49	%	1,174,559		10,368		3.53	%
Consumer and home equity	252,145		3,313		5.21	%	242,921		2,613		4.27	%
Total loans	3,796,212		37,599		3.91	%	3,299,063		31,212		3.73	%
Total interest-earning assets	5,224,108		44,823		3.40	%	5,002,541		37,607		2.97	%
Cash and due from banks	52,693						53,095
Other assets	274,978						363,704
Less: ACL	(34,698)						(32,033)
Total assets	$	5,517,081					$	5,387,307
Liabilities & Shareholders' Equity
Deposits:
Non-interest checking	$	1,243,174	$	—	—	%	$	1,251,492	$	—	—	%
Interest checking	1,502,436		3,213		0.85	%	1,246,634		643		0.20	%
Savings	774,725		86		0.04	%	688,331		71		0.04	%
Money market	720,641		1,532		0.84	%	709,705		520		0.29	%
Certificates of deposit	290,043		326		0.45	%	327,802		408		0.49	%
Total deposits	4,531,019		5,157		0.45	%	4,223,964		1,642		0.15	%
Borrowings:
Brokered deposits	80,701		285		1.40	%	289,374		331		0.45	%
Customer repurchase agreements	228,495		328		0.57	%	182,114		122		0.26	%
Subordinated debentures	44,331		539		4.83	%	44,331		538		4.81	%
Other borrowings	108,084		459		1.68	%	—		—		—	%
Total borrowings	461,611		1,611		1.38	%	515,819		991		0.76	%
Total funding liabilities	4,992,630		6,768		0.54	%	4,739,783		2,633		0.22	%
Other liabilities	71,636						94,803
Shareholders' equity	452,815						552,721
Total liabilities & shareholders' equity	$	5,517,081					$	5,387,307
Net interest income (fully-taxable equivalent)			38,055						34,974
Less: fully-taxable equivalent adjustment			(242)						(228)
Net interest income			$	37,813					$	34,746
Net interest rate spread (fully-taxable equivalent)					2.86	%					2.75	%
Net interest margin (fully-taxable equivalent)					2.88	%					2.76	%
Adjusted net interest margin (fully-taxable equivalent) (non-GAAP)					2.88	%					2.82	%

(1)    Reported on tax-equivalent basis calculated using a 21% tax rate, including certain commercial loans.

(2)    Non-accrual loans and loans held for sale are included in total average loans.

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Year-to-Date Average Balance, Interest and Yield/Rate Analysis

	Nine Months Ended
	September 30, 2022						September 30, 2021
(Dollars in thousands)	Average Balance		Interest		Yield/Rate		Average Balance		Interest		Yield/Rate
Assets
Interest-earning assets:
Interest-bearing deposits in other banks and other interest-earning assets	$	60,105	$	260	0.57	%	$	250,715	$	198	0.10	%
Investments - taxable	1,354,339		18,161		1.79	%	1,121,569		13,977		1.66	%
Investments - nontaxable(1)	112,526		2,942		3.49	%	115,755		2,845		3.28	%
Loans(2):
Commercial real estate	1,512,285		43,675		3.81	%	1,400,224		38,099		3.59	%
Commercial(1)	391,540		11,357		3.82	%	341,510		9,862		3.81	%
SBA PPP	9,138		1,248		18.01	%	139,453		5,487		5.19	%
Municipal(1)	18,837		446		3.17	%	22,404		557		3.32	%
Residential real estate	1,459,659		37,825		3.46	%	1,117,389		30,756		3.67	%
Consumer and home equity	240,041		8,255		4.60	%	255,058		8,016		4.20	%
Total loans	3,631,500		102,806		3.75	%	3,276,038		92,777		3.75	%
Total interest-earning assets	5,158,470		124,169		3.19	%	4,764,077		109,797		3.06	%
Cash and due from banks	50,100						52,571
Other assets	275,074						372,012
Less: ALL	(33,353)						(35,174)
Total assets	$	5,450,291					$	5,153,486
Liabilities & Shareholders' Equity
Deposits:
Non-interest checking	$	1,214,263	$	—	—	%	$	1,014,778	$	—	—	%
Interest checking	1,448,146		5,024		0.46	%	1,282,358		1,843		0.19	%
Savings	759,053		239		0.04	%	658,497		201		0.04	%
Money market	712,729		2,796		0.52	%	699,594		1,548		0.30	%
Certificates of deposit	297,646		988		0.44	%	339,230		1,407		0.55	%
Total deposits	4,431,837		9,047		0.27	%	3,994,457		4,999		0.17	%
Borrowings:
Brokered deposits	133,928		738		0.74	%	286,080		958		0.45	%
Customer repurchase agreements	220,026		682		0.41	%	177,559		419		0.31	%
Subordinated debentures	44,331		1,600		4.83	%	50,045		1,983		5.30	%
Other borrowings	65,595		690		1.41	%	4,762		35		0.99	%
Total borrowings	463,880		3,710		1.07	%	518,446		3,395		0.88	%
Total funding liabilities	4,895,717		12,757		0.35	%	4,512,903		8,394		0.25	%
Other liabilities	76,154						98,742
Shareholders' equity	478,420						541,841
Total liabilities & shareholders' equity	$	5,450,291					$	5,153,486
Net interest income (fully-taxable equivalent)			111,412						101,403
Less: fully-taxable equivalent adjustment			(700)						(764)
Net interest income			$	110,712					$	100,639
Net interest rate spread (fully-taxable equivalent)					2.84	%					2.81	%
Net interest margin (fully-taxable equivalent)					2.86	%					2.82	%
Adjusted net interest margin (fully-taxable equivalent) (non-GAAP)					2.86	%					2.87	%

(1)    Reported on tax-equivalent basis calculated using a 21% tax rate, including certain commercial loans.

(2)    Non-accrual loans and loans held for sale are included in total average loans.

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The following table presents certain information on a fully-taxable equivalent basis regarding changes in interest income and interest expense for the periods indicated. For each category of interest-earning assets and interest-bearing liabilities, information is provided with respect to changes attributable to rate and volume. The (a) changes in volume (change in volume multiplied by prior period's rate), (b) changes in rates (change in rate multiplied prior period's volume), and (c) changes in rate/volume (change in rate multiplied by the change in volume), which is allocated to the change due to rate column.

	Three Months Ended September 30, 2022 vs. September 30, 2021						Nine Months Ended September 30, 2022 vs. September 30, 2021
	Increase (Decrease) Due to:				Net Increase (Decrease)		Increase (Decrease) Due to:				Net Increase (Decrease)
(In thousands)	Volume		Rate				Volume		Rate
Interest-earning assets:
Interest-bearing deposits in other banks and other interest-earning assets	$	(82)	$	158	$	76	$	(143)	$	205	$	62
Investments – taxable	14		696		710		2,898		1,286		4,184
Investments – nontaxable	(37)		80		43		(79)		176		97
Commercial real estate	1,252		1,787		3,039		3,051		2,525		5,576
Commercial	491		688		1,179		1,445		50		1,495
SBA PPP	(1,928)		28		(1,900)		(5,129)		890		(4,239)
Municipal	48		(23)		25		(89)		(22)		(111)
Residential real estate	3,503		(159)		3,344		9,421		(2,352)		7,069
Consumer and home equity	99		601		700		(472)		711		239
Total interest income (fully-taxable equivalent)	3,360		3,856		7,216		10,903		3,469		14,372
Interest-bearing liabilities:
Interest checking	129		2,441		2,570		236		2,945		3,181
Savings	9		6		15		30		8		38
Money market	8		1,004		1,012		29		1,219		1,248
Certificates of deposit	(47)		(35)		(82)		(171)		(248)		(419)
Brokered deposits	(237)		191		(46)		(512)		292		(220)
Customer repurchase agreements	31		175		206		100		163		263
Subordinated debentures	—		1		1		(227)		(156)		(383)
Other borrowings	459		—		459		450		205		655
Total interest expense	352		3,783		4,135		(65)		4,428		4,363
Net interest income (fully-taxable equivalent)	$	3,008	$	73	$	3,081	$	10,968	$	(959)	$	10,009

Net interest income on a fully-taxable equivalent basis included the following for the periods indicated:

	Income Statement Location	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)		2022		2021		2022		2021
Loan (cost) fees	Interest income	$	(297)	$	1,744	$	1,006	$	4,437
Net fair value mark accretion from purchase accounting	Interest income and Interest expense	71		154		197		579
Recoveries on previously charged-off acquired loans	Interest income	20		24		189		157
Total		$	(206)	$	1,922	$	1,392	$	5,173

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Provision (Credit) for Credit Losses

The provision (credit) for credit losses was made up of the following components for the periods indicated:

	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
(Dollars in thousands)	2022		2021		$		%		2022		2021		$		%
Provision (credit) for loan losses	$	2,513	$	269	$	2,244	834	%	$	3,788	$	(5,037)	$	8,825	175	%
Provision for credit losses on off-balance sheet credit exposures	251		670		(419)		(63)	%	246		617		(371)		(60)	%
Provision (credit) for credit losses	$	2,764	$	939	$	1,825	194	%	$	4,034	$	(4,420)	$	8,454	(191)	%

For the three and nine months ended September 30, 2022, a provision for credit losses on loans was recorded of $2.5 million and $3.8 million, respectively, and was driven by: (1) a softening overall economy and the continued increasing likelihood of an economic slowdown in the future, and (2) 4% loan growth for the quarter ended September 30, 2022 and 13% loan growth for the nine months of 2022, that offset (3) the release of $768,000 and $5.0 million for the three and nine months ended September 30, 2022, respectively, of additional reserves provided for certain commercial real estate loans at the onset of the COVID-19 pandemic due to the heightened credit risk at that time. For these loans, the Company established certain credit metrics that would need to be met by the borrower prior to releasing the reserve, including a debt service coverage ratio and consistent timely payments of full principal and interest as agreed. As of September 30, 2022, there were no remaining commercial real estate loans carrying additional reserves due to COVID-19-related risks as they all were paid-off or met these criteria and are performing at or above pre-pandemic levels.

For the three months ended September 30, 2021, a provision for credit losses on loans of $269,000 was recorded primarily due to loan growth in the third quarter 2021. For the nine months ended September 30 ,2021 the improvement in the Company's macroeconomic outlook and the continued strength of the Company's credit quality more than offset the loan growth that resulted in the credit for credit losses on loans of $5.0 million recorded during this period.

Net charge-offs for the three and nine months ended September 30, 2022 were $216,000 and $503,000, respectively, compared to $58,000 and $557,000 for the three and nine months ended September 30, 2021.

Non-Interest Income

The following table presents the components of non-interest income for the periods indicated:

	Three Months Ended September 30,						Change				Nine Months Ended September 30,						Change
(Dollars in thousands)	2022			2021			$		%		2022			2021			$		%
Debit card income	$	3,234		$	3,278		$	(44)	(1)	%	$	9,371		$	9,126		$	245	3	%
Service charges on deposit accounts(1)	1,941			1,744			197		11	%	5,705			4,800			905		19	%
Income from fiduciary services	1,535			1,627			(92)		(6)	%	4,847			4,860			(13)		—	%
Brokerage and insurance commissions	1,003			993			10		1	%	3,269			2,885			384		13	%
Mortgage banking income, net(2)	635			1,913			(1,278)		(67)	%	3,186			11,620			(8,434)		(73)	%
Bank-owned life insurance(3)	374			589			(215)		(37)	%	1,519			1,774			(255)		(14)	%
Net loss on sale of securities	—			—			—		—	%	(9)			—			(9)		N.M.
Other income(4)	1,232			955			277		29	%	3,032			2,569			463		18	%
Total non-interest income	$	9,954		$	11,099		$	(1,145)	(10)	%	$	30,920		$	37,634		$	(6,714)	(18)	%
Non-interest income as a percentage of total revenues	21		%	24		%					22		%	27		%

(1)    Service charges on deposit accounts: The increase for the three and nine months ended September 30, 2022, compared to the same periods of 2021, was driven by a decrease in overdraft fees in 2021 due to stimulus funds received by customers and an increase in deposit account fees due to program and product changes. In September 2022, the Company made certain non-sufficient funds and overdraft program changes to assist our customers and support their financial well-being. The changes are not expected to materially decrease revenues.

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(2)    Mortgage banking income, net: The decrease for the three months ended September 30, 2022, compared to the same period of 2021, was driven by the change in the housing market between periods, highlighted by the change in interest rates between periods. During the third quarter of 2022, the Company sold $38.0 million, or 21%, of its residential mortgage loan production compared to $86.2 million, or 33%, of its residential mortgage loan production for the third quarter of 2021. Our markets saw elevated housing demand through 2020 and 2021 largely in response to the COVID-19 pandemic. This activity, coupled with the low interest rate environment, drove record residential mortgage production in 2021. The continued increase in interest rates through the first nine months of 2022, together with higher housing prices and operating in highly competitive markets, has slowed residential mortgage production through the first nine months of 2022 and decreased the amount of salable production to the secondary market. As of September 30, 2022, the Company's residential mortgage loan pipeline stood at $113.4 million, compared to the $194.9 million at September 30, 2021, a decrease of 42%.

The decrease for the nine months ended September 30, 2022, compared to the same period of 2021, was due to the decrease in residential mortgage loan sales, compared to September 30, 2021. For the nine months ended September 30, 2022, the Company sold $131.6 million, or 21%, of its residential mortgages, compared to $389.6 million, or 47%, for the nine months ended September 30, 2021. This decrease was driven by the decrease in residential mortgage production through the first nine months of 2022 (for the reasons outlined above), which have slowed commensurate with the overall industry.

(3)    Bank-owned life insurance: The decrease for the three and nine months ended September 30, 2022, compared to the same periods of 2021, was the result of underlying investments in one of the Company's BOLI contracts dropping below its stable value wrapper and, thus, a write down was recognized in the third quarter of 2022. A further decrease in the market value of these underlying investments within this contract may result in lower BOLI income in future periods.

(4)    Other income: The increase in other income for the three months ended September 30, 2022 compared to the three months ended September 30, 2021 was driven by the sale of a property in 2022. The increase for the nine months ended September 30, 2022, compared to the same period in 2021, was primarily driven by the sale of the property, along with increased foreign exchange fees and credit card interchange fees during the first nine months of the year.

Non-Interest Expense

The following table presents the components of non-interest expense for the periods indicated:

	Three Months Ended September 30,						Change				Nine Months Ended September 30,						Change
(Dollars in thousands)	2022			2021			$		%		2022			2021			$		%
Salaries and employee benefits	$	15,849		$	15,902		$	(53)	—	%	$	46,757		$	45,742		$	1,015	2	%
Furniture, equipment and data processing(1)	3,305			2,980			325		11	%	9,639			8,954			685		8	%
Net occupancy costs	1,765			1,813			(48)		(3)	%	5,715			5,569			146		3	%
Debit card expense	1,210			1,106			104		9	%	3,410			3,166			244		8	%
Consulting and professional fees(2)	814			792			22		3	%	3,114			2,652			462		17	%
Regulatory assessments(3)	575			522			53		10	%	1,745			1,512			233		15	%
Amortization of core deposit intangible assets	156			163			(7)		(4)	%	469			491			(22)		(4)	%
Other real estate owned and collection costs (recoveries), net	56			60			(4)		(7)	%	9			(156)			165		(106)	%
Other expenses(4)	3,361			2,925			436		15	%	8,998			8,822			176		2	%
Total non-interest expense	$	27,091		$	26,263		$	828	3	%	$	79,856		$	76,752		$	3,104	4	%
Ratio of non-interest expense to total revenues	56.71		%	57.29		%					56.38		%	55.51		%
Efficiency ratio (non-GAAP)	56.43		%	57.00		%					56.10		%	54.83		%

(1)    Furniture, equipment and data processing costs: The increase for the three and nine months ended September 30, 2022, compared to the same periods of 2021, was driven by increased demand for online banking and bill pay products along with our continued investment in technology and data processing.

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(2)    Consulting and professional fees: The increase for the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, was driven by an increase in consulting and compliance-related costs of $270,000 and director fees, including annual equity awards, of $207,000.

(3)    Regulatory assessments: The increase for the three and nine months ended September 30. 2022, compared to the same periods of 2021, was driven by the increase in quarterly FDIC assessments primarily due to asset growth. The FDIC has approved increased assessment rates effective January 1, 2023 that will drive increases to the Company's assessment expenses in 2023.

(4)    Other expenses: The increase for the three months ended September 30, 2022, compared to the three months ended 2021, was driven by the increases in business travel costs due to limited travel in 2021 from the pandemic, as well as increases in marketing costs to promote new initiatives and employee appreciation costs for in person events that were done virtually in 2021.

FINANCIAL CONDITION

Cash and Cash Equivalents

Total cash and cash equivalents at September 30, 2022, were $82.0 million, compared to $220.6 million at December 31, 2021. This decrease was due to the deployment of cash and cash equivalents' balances to support strong loan growth of 13% during the first nine months of 2022. We continually monitor our cash levels as part of our liquidity risk management practices.

Investments

The Company utilizes the investment portfolio to manage liquidity, interest rate risk, and regulatory capital, as well as to take advantage of market conditions to generate returns without undue risk. At September 30, 2022 and December 31, 2021, the Company’s investment portfolio generally consisted of MBS, CMO, municipal and corporate debt securities, FHLBB and FRB common stock, and mutual funds held in a rabbi trust for its executive and director nonqualified retirement plans. We designate our debt securities as AFS or HTM based on our intent and investment strategy and they are carried at fair value or amortized cost, respectively. Our FHLBB and FRB common stock is carried at cost, and our mutual funds are designated as trading securities and are carried at fair value.

During the quarter ended June 30, 2022, we transferred 141 securities with a fair value of $520.3 million from AFS to HTM to help manage our capital position in a rising interest rate environment. The securities were reclassified at fair value at the time of the transfer, a non-cash transaction. The unrealized losses on the AFS debt securities at the time of the transfer were $72.1 million, pre-tax, and were reported within AOCI. The weighted average life of the transferred securities as of the date of transfer was 8.8 years and the unrealized losses will be amortized over the remaining lives. At September 30, 2022, the net unrealized losses on the transferred securities reported within AOCI were $53.7 million, net of a deferred tax asset of $14.7 million and the weighted-average life on these securities was 8.8 years.

At September 30, 2022, the Company's investments portfolio totaled $1.3 billion, a decrease of $246.7 million, or 16%, since December 31, 2021. This was driven by changes within our debt securities portfolio, including:

•Paydowns, calls and maturities of $167.2 million and sales of $8.7 million;

•A net decrease in the fair value of the AFS debt securities portfolio of $108.7 million as interest rates rose sharply during the first nine months of 2022 in anticipation of a tightening economic policy to curb inflationary pressures. As a result, the 2-year U.S. Treasury increased 349 basis points and the 10-year U.S. Treasury increased 231 basis points during the first nine months of 2022 to 4.22% and 3.83%, respectively, at September 30, 2022, causing bond prices to fall. The change in market interest rates was the primary driver of the increase in the weighted average life of our debt securities portfolio from 5.9 years at December 31, 2021 to 7.0 years at September 30, 2022;

•A decrease of $68.4 million due to the unamortized unrealized losses on the AFS securities that were transferred to HTM in June of 2022;

•Partially offset by purchases of $105.4 million of debt securities during the first nine months of 2022. The weighted-average life of investments purchased during this period 6.1 years.

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Our debt securities designated as AFS, which comprised 58% and 99% of our investment portfolio at September 30, 2022 and December 31, 2021, respectively, were carried at fair value using level 2 valuation techniques. Refer to Note 15 of the consolidated financial statements for further details on fair value. At September 30, 2022 and December 31, 2021, investments were 23% and 28% of total assets, respectively. Our debt securities designated as HTM, comprised 40% at September 30, 2022 and were less than 1% at December 31, 2021. Our HTM debt securities were carried at amortized cost on the consolidated statements of condition.

The AFS and HTM debt securities portfolio has limited credit risk due to its composition, which includes debt securities that are highly rated by nationally recognized rating agencies, and securities backed by the U.S. government and government-sponsored agencies. At September 30, 2022 and December 31, 2021, these investments represented 90% of the investment portfolio. The majority of the municipal bonds, which represented 9% of the investment portfolio at September 30, 2022 and December 31, 2021, had a credit rating of "AA" or higher.

Other investments on the consolidated statements of condition consist of FHLBB and FRB common stock. These investments are carried at cost. We are required to maintain a certain level of investment in FHLBB stock based on our level of FHLBB advances, and maintain a certain level of investment in FRB common stock based on the Bank's capital levels. As of September 30, 2022 and December 31, 2021, investment in FHLBB stock totaled $9.7 million and $4.9 million, respectively, and our investment in FRB stock was $5.4 million at each date.

Investments in mutual funds are designated as trading securities and carried at fair value. These investments are held within a rabbi trust and will be used for future payments associated with the Company’s Executive and Director Deferred Compensation Plan. These investments are carried at fair value using level 1 valuation techniques. Refer to Note 15 of the consolidated financial statements for further details on fair value.

AFS debt securities that are in an unrealized loss position are assessed to determine if an allowance should be recorded or if a write-down is required. We did not record any allowances or write-down any of our AFS debt securities in an unrealized loss position as of September 30, 2022 or December 31, 2021. As noted above, the unrealized losses within our AFS debt securities as of September 30, 2022 and December 31, 2021 were driven by changes in the interest rate environment and were not credit-related.

HTM debt securities are assessed to determine if an allowance should be recorded or if a write-down is required. Based on the portfolio of the HTM debt securities as of September 30, 2022 and December 31, 2021, we did not record any allowances or write-down any of the HTM debt securities. Refer to "Note 3—Investments" for further discussion of the detail of the portfolio and our determination that the expected credit loss was immaterial.

We continually monitor and evaluate our investment portfolio to identify and assess risks within our portfolio, including but not limited to, the impact of the current interest rate environment and the related prepayment risk, and the review of credit ratings. The overall mix of debt securities at September 30, 2022, compared to December 31, 2021, remains relatively unchanged and the Company expects it will continue to be well positioned to provide a stable source of cash flow. At September 30, 2022 and December 31, 2021, the duration of our debt investment securities portfolio, adjusting for calls when appropriate and consensus prepayment speeds, was 5.8 years and 4.8 years, respectively. Similar to the weighted-average life of the investment portfolio, the duration of the investment portfolio primarily increased between periods due to the increase in interest rates during the first half of 2022.

Loans

The Company provides loans primarily to customers located within our geographic market area. Our primary market continues to be Maine, making up 70% and 72% of the loan portfolio as of September 30, 2022 and December 31, 2021, respectively. Massachusetts and New Hampshire are our second and third largest markets that we serve, making up 15% and 9%, of our total loan portfolio as of September 30, 2022, respectively, and 14% and 9% as of December 31, 2021. As of September 30, 2022, our distribution channels included 57 branches within Maine, a residential mortgage lending office in Massachusetts, a branch and commercial loan production office in New Hampshire, and online residential mortgage and small commercial loan platforms.

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The following table sets forth the composition of our loan portfolio as of the dates indicated:

							Change
(Dollars in thousands)	September 30, 2022			December 31, 2021			($)		(%)
Commercial real estate - non-owner-occupied	$	1,229,102		$	1,178,185		$	50,917	4	%
Commercial real estate - owner-occupied	333,785			317,275			16,510		5	%
Commercial	423,325			363,695			59,630		16	%
SBA PPP	685			35,953			(35,268)		(98)	%
Residential real estate	1,619,409			1,306,447			312,962		24	%
Consumer and home equity	254,374			229,919			24,455		11	%
Total loans	$	3,860,680		$	3,431,474		$	429,206	13	%
Commercial Loan Portfolio	$	1,986,897		$	1,895,108		$	91,789	5	%
Retail Loan Portfolio	$	1,873,783		$	1,536,366		$	337,417	22	%
Commercial Portfolio Mix	51		%	55		%
Retail Portfolio Mix	49		%	45		%

For the first nine months of 2022, the Company held 79% of its funded residential mortgage production, which was higher than in recent years, primarily due to market conditions, such as local market pricing and jumbo mortgage demand.

Beginning in April 2020, the Company started funding SBA PPP loans issued to qualifying small businesses as part of the federal stimulus package issued due to the COVID-19 pandemic. Effective May 2021, the SBA PPP loan program ended and the Company ceased originating loans under this program. The decrease for the first nine months of 2022 was driven by borrower loans being forgiven under the terms of the program. As of September 30, 2022 and December 31, 2021, there were $20,000 and $1.2 million of SBA PPP loan origination fees yet to be recognized, respectively.

Through the first nine months of 2022, the FOMC increased the Federal Funds Interest Rate sharply in an effort to curb inflationary pressures. In doing so, there is a high likelihood the economy will slow which may have an impact on overall loan demand and slow the Company's loan growth moving forward.

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Asset Quality

Our practice is to manage the Company's loan portfolio proactively so that we are able to effectively identify problem credits and trends early, assess and implement effective work-out strategies, and take charge-offs as promptly as practical. In addition, the Company continually reassesses its underwriting standards in response to credit risk posed by changes in economic conditions. The Company continues to dedicate significant resources to monitor and manage credit risk throughout our loan portfolio. In light of the current environment, management is monitoring the impact of the following on our borrowers: (1) rising interest rates, (2) widespread inflationary pressures, and (3) challenges across the labor market.

Management of the Company's credit risk includes management and board-level oversight as follows:

•The Credit Risk and Special Assets team and the Credit Risk Policy Committee, which is an internal management committee comprised of various executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Credit Risk and Special Assets, Compliance, and Commercial and Retail Banking, oversee the Company's systems and procedures to monitor the credit quality of its loan portfolio, conduct a loan review program, and maintain the integrity of the loan ratings system.

•The adequacy of the ACL is overseen by the Management Provision Committee, which is an internal management committee comprised of various Company executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Credit Risk and Special Assets, Compliance, and Commercial and Retail Banking. The Management Provision Committee supports the oversight efforts of the Audit Committee of the Board of Directors.

•The Directors Credit Committee of the Board of Directors reviews large credit exposures, monitors external loan review reports, reviews the lending authority for individual loan officers when required, and has approval authority and responsibility for all matters regarding the loan policy and other credit-related policies, including reviewing and monitoring asset quality trends, and concentration levels.

•The Audit Committee of the Board of Directors has approval authority and oversight responsibility for the ACL adequacy and methodology.

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Non-Performing Assets

Non-performing assets include non-accrual loans, accruing loans 90 days or more past due, accruing TDRs, and property acquired through foreclosure or repossession. The following table sets forth the composition and amounts of our non-performing loans as of the dates indicated: 

(Dollars in thousands)	September 30, 2022			December 31, 2021
Non-accrual loans:
Commercial real estate - non-owner-occupied	$	26		$	51
Commercial real estate - owner-occupied	47			133
Commercial	541			829
Residential real estate	1,562			2,107
Consumer and home equity	589			1,207
Total non-accrual loans	2,765			4,327
Accruing TDRs not included above	2,285			2,392
Total non-performing loans	5,050			6,719
Other real estate owned	—			165
Total non-performing assets	$	5,050		$	6,884
Total loans, excluding loans held for sale	$	3,860,680		$	3,431,474
Total assets	$	5,551,724		$	5,500,356
ACL on loans	$	36,542		$	33,256
ACL on loans to non-accrual loans	1,321.59		%	768.57		%
Non-accrual loans to total loans	0.07		%	0.13		%
Non-performing loans to total loans	0.13		%	0.20		%
Non-performing assets to total assets	0.09		%	0.13		%

Potential Problem Loans

Potential problem loans consist of classified accruing commercial and commercial real estate loans that were 30-89 days past due. Such loans are characterized by weaknesses in the financial condition of borrowers or collateral deficiencies. Based on historical experience, the credit quality of some of these loans may improve due to changes in collateral values or the financial condition of the borrowers, while the credit quality of other loans may deteriorate, resulting in a loss. These loans are not included in the above analysis of non-accrual loans. At September 30, 2022, loans classified as potential problem loans totaled $554,000.

Past Due Loans

Past due loans consist of accruing loans that were 30-89 days past due. The following table presents the recorded investment of past due loans as of the dates indicated:

(Dollars in thousands)	September 30, 2022			December 31, 2021
Accruing loans 30-89 days past due:
Commercial real estate - non-owner-occupied	$	195		$	—
Commercial real estate - owner-occupied	—			47
Commercial	1,344			552
Residential real estate	2,326			400
Consumer and home equity	843			509
Total	$	4,708		$	1,508
Total loans	$	3,860,680		$	3,431,474
Accruing loans 30-89 days past due to total loans	0.12		%	0.04		%

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ACL

The following table sets forth information concerning the components of our ACL for the periods indicated:

	At or For The Three Months Ended September 30,						At or For The Nine Months Ended September 30,						At or For The Year Ended December 31, 2021
(Dollars in thousands)	2022			2021			2022			2021
ACL on loans at the beginning of the period	$	34,244		$	32,060		$	33,256		$	37,865		$	37,865
Provision (credit) for loan losses	2,513			269			3,788			(5,037)			(3,817)
Net charge-offs (recoveries)1
Commercial real estate	(1)			(2)			(4)			(7)			(9)
Commercial	122			48			403			344			579
Residential real estate	49			2			65			20			(15)
Consumer and home equity	45			9			38			199			237
ACL on loans at the end of the period	$	36,542		$	32,272		$	36,542		$	32,272		$	33,256
Components of ACL:
ACL on loans	$	36,542		$	32,272		$	36,542		$	32,272		$	33,256
ACL on off-balance sheet credit exposures	3,441			3,185			3,441			3,185			3,195
ACL at end of the period	$	39,983		$	35,457		$	39,983		$	35,457		$	36,451
Total loans, excluding loans held for sale	$	3,860,680		$	3,315,303		$	3,860,680		$	3,315,303		$	3,431,474
Average Loans	$	3,796,212		$	3,299,063		$	3,631,500		$	3,276,038		$	3,299.313
Net charge-offs to average loans	0.02		%	0.01		%	0.02		%	0.02		%	0.02		%
Provision (credit) for loan losses (annualized) to average loans	0.26		%	0.03		%	0.21		%	(0.31)		%	(0.12)		%
ACL on loans to total loans	0.95		%	0.97		%	0.95		%	0.97		%	0.97		%

(1)    Additional information related to net charge-offs (recoveries) is presented in the following table for the periods indicated:

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	For The Three Months Ended September 30,
(Dollars in thousands)	Total Charge-offs		Total Recoveries		Net Charge-Offs (Recoveries)		Average Loans		Ratio of Net Charge-Offs (Recoveries) to Average Loans
2022:
Commercial real estate	$	—	$	1	$	(1)	$	1,546,638	—	%
Commercial	183		61		122		424,726		0.03	%
SBA PPP	—		—		—		1,254		—	%
Residential real estate	49		—		49		1,571,449		—	%
Consumer and home equity	46		1		45		252,145		0.02	%
Total	$	278	$	63	$	215	$	3,796,212	0.01	%
2021:
Commercial real estate	$	—	$	2	$	(2)	$	1,410,201	—	%
Commercial	97		49		48		365,640		0.01	%
SBA PPP	—		—		—		105,742		—	%
Residential real estate	4		2		2		1,174,559		—	%
Consumer and home equity	20		11		9		242,921		—	%
Total	$	121	$	64	$	57	$	3,299,063	—	%
	For The Nine Months Ended September 30,
2022:
Commercial real estate	$	—	$	4	$	(4)	$	1,512,285	—	%
Commercial	744		341		403		410,377		0.10	%
SBA PPP	—		—		—		9,138		—	%
Residential real estate	65		—		65		1,459,659		—	%
Consumer and home equity	130		92		38		240,041		0.02	%
Total	$	939	$	437	$	502	$	3,631,500	0.01	%
2021:
Commercial real estate	$	—	$	7	$	(7)	$	1,400,224	—	%
Commercial	503		159		344		363,914		0.09	%
SBA PPP	—		—		—		139,453		—	%
Residential real estate	92		72		20		1,117,389		—	%
Consumer and home equity	233		34		199		255,058		0.08	%
Total	$	828	$	272	$	556	$	3,276,038	0.02	%
	For the Year Ended December 31,
2021:
Commercial real estate	$	—	$	9	$	(9)	$	1,412,884	—	%
Commercial	799		220		579		361,256		0.16	%
SBA PPP	—		—		—		118,414		—	%
Residential real estate	92		107		(15)		1,156,698		—	%
Consumer and home equity	273		36		237		250,061		0.09	%
Total	$	1,164	$	372	$	792	$	3,299,313	0.02	%

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ACL on Loans

There were no significant changes in our modeling methodology to determine the ACL on loans during the nine months ended September 30, 2022. The significant key assumptions used with the ACL on loans calculation at September 30, 2022 and December 31, 2021, included: (i) Company-specific macroeconomic factors (i.e. loss drivers), (ii) our forecast period and reversion speed, (iii) prepayment speeds, and (iv) various qualitative factors.

As of September 30, 2022 and December 31, 2021, the recorded ACL on loans was $36.5 million and $33.3 million, respectively, and represented our best estimate. The increase in the ACL on loans between periods was primarily driven by loan growth and the economic outlook of a softening economy over the coming quarters, net of the release of $5.0 million of reserves provided for certain COVID modified loans deemed as "recovered" or have been paid off. To have been deemed "recovered" by the Company, the borrower must have met certain credit metrics, including a debt service coverage ratio and consistent timely payments of full principal and interest under an agreed upon payment schedule. Refer to "—Results of Operations—Provision for Credit Losses—Provision (Credit) for Loan Losses" for further discussion of the drivers of the change between periods. As of September 30, 2022, all COVID modified loans have been paid off or deemed fully "recovered".

The overall global and national markets continue to be volatile and carry a high degree of uncertainty, and any changes to our forecast or qualitative factors subject our ACL estimate to a higher risk of fluctuation between periods.

We may adjust our assumptions to account for differences between expected and actual losses from period to period. A future change of our assumptions likely will alter the level of allowance required and may have a material impact on future results of operations and financial condition. The ACL on loans is reviewed periodically within a calendar quarter to assess trends in CECL key assumptions and asset quality, and their effects on the Company's financial condition.

ACL on Off-Balance Sheet Credit Exposures

There were no significant changes in our modeling methodology to determine the ACL on off-balance sheet credit exposures during the three and nine months ended September 30, 2022. The model uses the credit loss factors for each segment calculated within the ACL on loans model described above. The ACL on off-balance sheet credit exposures as of September 30, 2022 and December 31, 2021, was $3.4 million and $3.2 million, respectively.

The ACL on off-balance sheet credit exposures was presented within accrued interest and other liabilities on the consolidated statements of condition. Increases (decreases) to the ACL on off-balance sheet credit exposures were presented within provision (credit) for credit losses on the consolidated statements of income.

We may adjust our assumptions to account for differences between expected and actual losses from period to period. A future change to our assumptions will likely alter the level of allowance required and may have a material impact on future results of operations and financial condition.

Liabilities and Shareholders’ Equity

Deposits

At September 30, 2022, deposits totaled $4.6 billion, a decrease of $40.3 million, or 1%, since December 31, 2021. The decrease in deposits during the first half of 2022 was driven by a decrease in brokered deposits of $118.7 million as we used alternative borrowing sources to manage funding costs. Core deposits (non-GAAP) totaled $4.2 billion as of September 30, 2022, an increase of $108.5 million, or 3% since year end, driven by checking account growth of $74.4 million, or 3%, during the period.

The Company's loan-to-deposit ratio was 85% at September 30, 2022, compared to 74% at December 31, 2021.

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Uninsured Deposits

Total deposits that exceed the FDIC deposit insurance limit of $250,000 were $1.2 billion at September 30, 2022 and $1.3 billion at December 31, 2021. The Company has pledged assets as collateral covering certain deposits in the amount of $314.2 million and $347.0 million at September 30, 2022 and December 31, 2021, respectively.

The portion of time deposits that exceed the FDIC deposit insurance limit of $250,000, by time remaining until maturity, at September 30, 2022, was $57.7 million. At September 30, 2022, the Company does not have time deposits that are otherwise uninsured.

Borrowings

At September 30, 2022, total borrowings were $465.4 million, an increase of $209.5 million, or 82%, since December 31, 2021. This increase was the result of a shift in alternative funding over this period from brokered deposits to more cost-effective overnight borrowings, as well as the need for additional funding to support loan growth during the first nine months of 2022.

Shareholders' Equity

Shareholders' equity at September 30, 2022 totaled $431.0 million, a decrease of $110.3 million, or 20%, since December 31, 2021. The decrease in shareholders' equity over the first nine months of 2022 was driven by a decrease in the valuation of our investments of $139.1 million, which included a $85.4 million, net of tax, decrease in the debt securities portfolio valuation designated as AFS in response to the increase in interest rates during 2022, and net unrealized losses of $53.7 million from the AFS to HTM transfer, net of tax. These net unrealized losses were recorded in the second quarter of 2022 as we transferred selected securities from AFS to HTM to protect our capital position in the rising interest rate environment. As discussed further in "—Investments," management believes the decrease in shareholders' equity is temporary and does not believe that the decrease is an indication of permanent losses. The Company and the Bank continue to be well-capitalized under the standards set by its regulators. Refer to Note 10 of the consolidated financial statements for further details.

On September 27, 2022, the Company announced a quarterly cash dividend to shareholders of $0.40 per share, payable on October 31, 2022 to shareholders of record as of October 14, 2022. As of September 30, 2022, the Company's annualized dividend yield was 3.76% based on Camden National's closing share price of $42.60, as reported by NASDAQ on September 30, 2022.

In January 2022, the Company's Board of Directors authorized the repurchase of up to 750,000 shares of the Company's common stock, representing approximately 5% of the Company's issued and outstanding shares of common stock as of December 31, 2021. During the nine months ended September 30, 2022, the Company repurchased 225,245 shares at a weighted average price of $45.46 per share.

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The following table presents certain information regarding shareholders’ equity as of and for the periods indicated:

	At or For The Three Months Ended September 30,						At or For The Nine Months Ended September 30,						At or For The Year Ended December 31, 2021
	2022			2021			2022			2021
Financial Ratios
Average equity to average assets	8.21		%	10.26		%	8.78		%	10.51		%	10.33		%
Common equity ratio	7.76		%	9.92		%	7.76		%	9.92		%	9.84		%
Tangible common equity ratio (non-GAAP)	6.13		%	8.30		%	6.13		%	8.30		%	8.22		%
Dividend payout ratio	41.24		%	36.73		%	38.34		%	30.77		%	32.03		%
Per Share Data
Book value per share	$	29.59		$	30.52		$	29.59		$	30.52		$	36.72
Tangible book value per share (non-GAAP)	$	22.97		$	30.23		$	22.97		$	30.23		$	30.15
Dividends declared per share	$	0.40		$	0.36		$	1.20		$	1.08		$	1.48

Refer to "—Capital Resources" and Note 10 of the consolidated financial statements for further discussion of the Company and Bank's capital resources and regulatory capital requirements.

LIQUIDITY

Our liquidity needs require the availability of cash to meet the withdrawal demands of depositors and credit commitments to borrowers. Liquidity is defined as our ability to maintain availability of funds to meet customer needs, as well as to support our asset base. The primary objective of liquidity management is to maintain a balance between sources and uses of funds to meet our cash flow needs in the most economical and expedient manner. Due to the potential for unexpected fluctuations in both deposits and loans, active management of liquidity is necessary. We maintain various sources of funding and levels of liquid assets and monitor liquidity in accordance with internal guidelines and all applicable regulatory requirements. As of September 30, 2022 and December 31, 2021, our level of liquidity exceeded target levels. We believe that we currently have appropriate liquidity available to respond to demands. Sources of funds that we utilize consist of deposits; borrowings from the FHLBB and other sources; cash flows from loans and investments; and cash flows from operations, including other contractual obligations and commitments.

We believe that our level of liquidity is sufficient to meet current and future funding requirements; however, changes in economic conditions, including consumer saving habits and the availability or access to the brokered deposit and wholesale repurchase markets, could significantly affect our liquidity position.

Deposits. Deposits continue to represent our primary source of funds. As of September 30, 2022 and December 31, 2021, total deposits, including brokered deposits, were $4.6 billion, which included money market deposits of $61.5 million and $63.9 million, respectively, from Camden National Wealth Management, which represent client funds. These funds fluctuate with changes in the portfolios of the clients of Camden National Wealth Management. Time deposits are generally considered to be more interest rate sensitive than other deposits and, therefore, more likely to be withdrawn to obtain higher yields elsewhere if available.

The following is a summary of the scheduled maturities of CDs as of September 30, 2022:

(In thousands)	CDs
1 year or less	$	199,794
> 1 year	79,809
Total	$	279,603

Borrowings. Borrowings are used to supplement deposits as a source of liquidity. In addition to borrowings and advances from the FHLBB, we utilize brokered deposits, purchase federal funds, and sell securities under agreements to repurchase. As of September 30, 2022, total borrowings were $465.4 million, compared to $255.9 million as of December 31, 2021. We secure borrowings from the FHLBB with qualified residential real estate loans, certain investment securities and certain other assets available to be pledged. Customer repurchase agreements are secured by mortgage-backed securities and government-

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sponsored enterprises. Through the Bank, we have available lines of credit with the FHLBB of $9.9 million, with a correspondent bank of $50.0 million, and with the FRB Discount Window of $42.7 million as of September 30, 2022. We also believe we have additional untapped access to the brokered deposit market, wholesale reverse repurchase transaction market, and the FRB discount window. These sources are considered as liquidity alternatives in our contingent liquidity plan.

The following is a summary of the scheduled maturities of borrowings as of September 30, 2022:

(In thousands)	FHLBB Advances		Customer Repurchase Agreements		Subordinated Debentures		Total
1 year or less	$	152,225	$	268,876	$	—	$	421,101
> 1 year	—		—		44,331		44,331
Total	$	152,225	$	268,876	$	44,331	$	465,432

Loans. Contractual loan repayments also affect our liquidity position. Actual speed and timing of repayment may differ materially from contract terms due to prepayments or nonpayment. Specifically, in a rising interest rate environment prepayment speeds may slow, which then would decrease the pace in which we receive cash flow from loans. The Company's residential mortgage loan portfolio is also a significant source of contingent liquidity for the Company that could be accessed in a reasonable time period through the sale of loans on the secondary market, as needed. As of September 30, 2022, book value of $1.7 billion of qualifying loans were pledged as collateral.

The following table presents the contractual maturities of loans at the date indicated:

	September 30, 2022
(Dollars in thousands)	Due in 1 Year or Less		Due after 1 Year Through 5 Years		Due After 5 Years Through 15 Years		Due in More than 15 Years		Total		Percent of Total Loans
Maturity Distribution(1):
Fixed Rate:
Commercial real estate(2)	$	12,821	$	159,790	$	578,271	$	2,117	$	752,999	20	%
Commercial	13,277		96,326		97,645		453		207,701		5	%
Residential real estate	204		10,074		177,041		1,130,819		1,318,138		34	%
Consumer and home equity	1,327		14,317		24,089		168,401		208,134		5	%
Total fixed rate	27,629		280,507		877,046		1,301,790		2,486,972		64	%
Variable Rate:
Commercial real estate(2)	5,832		161,266		386,635		256,155		809,888		21	%
Commercial	45,459		114,493		45,466		10,891		216,309		6	%
Residential real estate	25		802		39,099		261,345		301,271		8	%
Consumer and home equity	484		2,729		12,020		31,007		46,240		1	%
Total variable rate	51,800		279,290		483,220		559,398		1,373,708		36	%
Total loans	$	79,429	$	559,797	$	1,360,266	$	1,861,188	$	3,860,680	100	%

(1)    Scheduled repayments are reported in the maturity category in which payment is due. Demand loans, loans having no stated schedule of repayments and no stated maturity, and overdrafts are reported as due in one year or less

(2)    Commercial real estate loans includes non-owner-occupied and owner-occupied properties.

Additionally, we have active relationships with various secondary market investors that purchase residential mortgage loans we originate. In addition to managing our interest rate risk position and earnings through the sale of these loans, we are also able to manage our liquidity position through timely sales of residential mortgage loans to the secondary market.

Investments. We generally invest in amortizing MBS and CMO debt securities that return cash flow at an accelerated rate in comparison to other types of debt securities that are of a bullet structure. As of September 30, 2022 and December 31, 2021, the Company's MBS and CMO debt securities portfolio totaled 88% and 90%, respectively, of the Company's investment portfolio. The investment portfolio is also a significant source of contingent liquidity for the Company that could be accessed in a reasonable time period through the sale of investments on the secondary market, if needed. For purposes of assessing our

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liquidity position, we only consider those investments designated as AFS. As of September 30, 2022, $358.6 million of our AFS debt securities, or 43%, were not pledged as collateral, compared to $867.4 million, or 58%, as of December 31, 2021.

The following is a summary of the scheduled cash flows from our debt securities portfolio, including investments designated as AFS and HTM, as of September 30, 2022:

(In thousands)	Contractual Cash Flows(1)
1 year or less	$	148,827
> 1 year	1,219,370
Total	$	1,368,197

(1)    Expected contractual cash flows could differ as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Prepayment speeds may slow in a rising interest rate environment, which then would decrease the pace within which we receive cash flow from our investments.

Other Liquidity Requirements. Through the Company's normal course of business it generates cash flows from earnings and, while not contractual, it has a history of paying a quarterly cash dividend to its shareholders and repurchasing its shares of common stock. For the nine months ended September 30, 2022, the Company reported $46.1 million of net income, paid cash dividends of $17.7 million to shareholders and repurchased shares of its common stock for $10.0 million.

Also through its normal operations, the Company is party to several other contractual obligations not previously discussed, such as various lease agreements on a number of its branches. Renewal options within the various lease contracts, as applicable, were considered to determine the lease term and estimate the contractual obligation and commitment for the Company's operating and finance leases. Furthermore, certain lease contracts of the Company contain language that subject its rent payment to variability, such as those tied to an index or change in an index. As a result, the future contractual obligation and commitment may materially differ from that estimated and disclosed within the table below. At September 30, 2022, we had the following lease and other contractual obligations to make future payments under each of these contracts as follows:

(In thousands)	Total Amount		Payments Due per Period
Contractual obligations and commitments	Committed		<1 Year		1 – 3 Years
Operating leases	$	3,598	$	1,318	$	2,280
Finance leases	941		311		630
Other contractual obligations	6,954		6,954		—
Total	$	11,493	$	8,583	$	2,910

The Company's estimated lease liability for its various operating and finance leases was reported within other liabilities on our consolidated statements of condition.

In the normal course of business, we are a party to credit related financial instruments with off-balance sheet risk, which are not reflected in the consolidated statements of condition. These financial instruments include commitments to extend credit and standby letters of credit. Many of the commitments will expire without being drawn upon, and thus, the total amount does not necessarily represent future cash requirements. Refer to Note 7 of the consolidated financial statements for additional details.

We use derivative financial instruments for risk management purposes (primarily interest rate risk) and not for trading or speculative purposes. These contracts with our various counterparties may subject the Company to various cash flow requirements, which may include posting of cash as collateral (or other assets) for arrangements that the Company is in a liability position (i.e. “underwater”). Refer to Note 8 of the consolidated financial statements for further discussion of our derivatives and hedge instruments.

CAPITAL RESOURCES

As part of our goal to operate a safe, sound and profitable financial organization, we are committed to maintaining a strong capital base. Shareholders’ equity totaled $431.0 million and $541.3 million at September 30, 2022 and December 31, 2021,

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respectively, which amounted to 8% and 10% of total assets, respectively. Refer to "— Financial Condition — Liabilities and Shareholders' Equity" for discussion regarding the driver for the decrease in shareholders' equity for the nine months ended September 30, 2022.

Our principal cash requirement is the payment of dividends on our common stock, as and when declared by the Company's Board of Directors. We declared dividends to shareholders in the aggregate amount of $17.6 million and $16.1 million for the nine months ended September 30, 2022 and 2021, respectively. The Company's Board of Directors approves cash dividends on a quarterly basis after careful analysis and consideration of various factors, including the following: (i) capital position relative to total assets, (ii) risk-based assets, (iii) total classified assets, (iv) economic conditions, (v) growth rates for total assets and total liabilities, (vi) earnings performance and projections and (vii) strategic initiatives and related capital requirements. All dividends declared and distributed by the Company will be in compliance with applicable state corporate law and regulatory requirements.

We are primarily dependent upon the payment of cash dividends by the Bank, our wholly-owned subsidiary, to service our commitments. We, as the sole shareholder of the Bank, are entitled to dividends, when and as declared by the Bank's Board of Directors from legally available funds. For the nine months ended September 30, 2022 and 2021, the Bank declared dividends payable to the Company in the amount of $23.9 million and $32.8 million, respectively. Under regulations prescribed by the OCC, the Bank may not declare dividends in excess of the Bank’s net income for the current year plus its retained net income for the prior two years without prior approval from the OCC. If we are required to use dividends from the Bank to service unforeseen commitments in the future, we may be required to reduce the dividends paid to our shareholders going forward.

Please refer to Note 10 of the consolidated financial statements for discussion and details of the Company and Bank's regulatory capital requirements. At September 30, 2022 and December 31, 2021, the Company and Bank exceeded all regulatory capital requirements, and the Bank continues to meet the capital requirements to be classified as "well capitalized" under applicable prompt corrective action provisions.

RISK MANAGEMENT

The Company’s Board of Directors and management have identified significant risk categories which affect the Company. The risk categories include: credit; liquidity; market; interest rate; capital; operational and technology, including cybersecurity; vendor and third party; people and compensation; compliance and legal; and strategic alignment and reputation. The Board of Directors has approved an Enterprise Risk Management ("ERM") Policy that addresses each category of risk. The direct oversight and responsibility for the Company's risk management program has been delegated to the Company's Executive Vice President, Enterprise Risk Management and Chief Risk Officer, who is a member of the Executive Committee and reports directly to the Chief Executive Officer.

The spread of the COVID-19 pandemic has increased many of the risks we face, including our credit, operational, vendor and third party, and technology risks. In response to the COVID-19 pandemic, the Company formed the Pandemic Work Group in 2020 to develop and oversee the Company’s response. The Pandemic Work Group: (i) developed employee practices, policies and playbooks to address pandemic related issues; (ii) implemented monitoring of all federal, state and local actions, such as stay-at-home orders, masking mandates and others, so that the Company can comply with all legal requirements; (iii) completed risk assessments and proactive monitoring over critical vendors, along with enhanced cybersecurity monitoring and reporting; (iv) created ongoing assessment and monitoring over employee availability, safety, workloads and access to tools (including technology needed to work from home effectively); (v) oversaw the roll out of and continue to monitor the SBA PPP loan program and temporary loan relief programs; (vi) developed our branch network plan, including determination of which of our branches were to close in order to best allocate resources; (vii) developed a plan for, and oversaw the re-opening of our branches in June 2020, which included ensuring health and safety protocols and practices were in place for our employees and customers; and (viii) completed and implemented the Company's “return-to-office” strategy during the third quarter of 2021, which included certain employees returning to the office full-time, others through a hybrid model (i.e., work from home part-time and from one of the Company's physical locations part-time), and others working remotely full-time. The Company's Executive Committee re-assessed its use of a hybrid model for its employees during the first quarter of 2022 and, at this time, will continue to use such model and govern in accordance with the established policy. The Executive Committee will continue to monitor and assess the related policy and its practice periodically.

The Pandemic Work Group was established in response to the COVID-19 pandemic to oversee the Company’s response to the COVID-19 pandemic and its impact on the Company and its employees. These areas of oversight included, but were not limited to, employee practices and assessment of employee availability, safety and workload. Members of the Pandemic Work Group include the Company’s executive team and other members of senior management. Throughout the pandemic, the

71

Pandemic Work Group, through the Company's executive team, reported to the Board of Directors on related matters to assist the Board of Directors with both its ongoing oversight of the Company’s response to COVID-19 as well as its management of all areas of risks the Company faces, which have been affected by the COVID-19 pandemic. The Pandemic Work Group continues to meet periodically as needed, based on current developments relating to the COVID-19 pandemic, and updates the Board of Directors accordingly.

There have been no material changes to the Company's risk categories and risk management policies as described in Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2021. Please refer to Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2021 for further details regarding the Company's risk management.

Interest rate risk

Interest rate risk represents the sensitivity of earnings to changes in market interest rates. As interest rates change, the interest income and expense streams associated with our financial instruments also change, thereby impacting net interest income, the primary component of our earnings. Board ALCO and Management ALCO utilize the results of a detailed and dynamic simulation model to quantify the estimated exposure of net interest income to sustained interest rate changes. While Board ALCO and Management ALCO routinely monitor simulated net interest income sensitivity over a rolling two-year horizon, they also utilize additional tools to monitor potential longer-term interest rate risk.

The simulation model captures the impact of changing interest rates on the interest income received and interest expense paid on all interest-earning assets and interest-bearing liabilities reflected on our consolidated statements of condition, as well as for derivative financial instruments. This sensitivity analysis is compared to ALCO policy limits, which specify a maximum tolerance level for net interest income exposure over a one- and two-year horizon, assuming a static balance sheet, given a 200 basis point upward and downward shift in interest rates. Although our policy specifies a downward shift of 200 basis points, this would have resulted in negative rates as of September 30, 2021, as many deposit and funding rates were below 2.00%. In this case, a downward shift of 100 basis points was the only down scenario performed. A parallel and pro rata shift in rates over a 12-month period is assumed. Using this approach, we are able to produce simulation results that illustrate the effect that both a gradual change of rates and a “rate shock” have on earnings expectations. In the down 100 and 200 basis points scenarios, Federal Funds and Treasury yields are floored at 0.01% while Prime is floored at 3.00%. All other market rates are floored at the lesser of current levels or 0.25%.

The sensitivity analysis below does not represent a forecast and should not be relied upon as being indicative of expected operating results. These hypothetical estimates are based upon numerous assumptions including, among others, the nature and timing of interest rate levels, yield curve shape, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits and reinvestment/replacement of asset and liability cash flows. While assumptions are developed based upon current economic and local market conditions, we cannot make any assurances as to the predictive nature of these assumptions, including how customer preferences or competitor influences might change.

As of September 30, 2022 and 2021, our net interest income sensitivity analysis reflected the following changes to net interest income assuming no balance sheet growth and a parallel shift in interest rates. All rate changes were “ramped” over the first 12-month period and then maintained at those levels over the remainder of the ALCO simulation horizon.

	Estimated Changes In  Net Interest Income
Rate Change from Year 1 — Base	September 30, 2022		September 30, 2021
Year 1
+200 basis points	(2.82)	%	1.68	%
-100 basis points	N/A		(1.52)	%
-200 basis points	1.56	%	N/A
Year 2
+200 basis points	8.34	%	7.19	%
-100 basis points	N/A		(11.43)	%
-200 basis points	5.09	%	N/A

72

If rates remain at or near current levels, net interest income is projected to increase in year two of the simulation. Asset cash flows reprice and replace into the current higher rate environment at rates above current portfolio averages while funding costs remain largely unchanged, causing balance sheet spread to expand.

If rates increase 200 basis points, net interest income is projected to decrease in the first year of the simulation as the funding base adjusts into the higher rate environment to a greater degree than asset yields increase. In the second year, net interest income is projected to increase as loan and investment yields continue to reprice/reset into higher yields and funding cost increases continually slow.

If rates decrease 200 basis points, net interest income is projected to increase slightly as reductions in funding costs are able to more than offset near-term asset yield deterioration. In the second year, net interest income is projected to further improve as asset yields are supported by fixed rates and floors while remaining cost of funds reductions are exhausted.

Periodically, if deemed appropriate, we use back-to-back loan swaps, interest rate swaps, floors and caps, which are common derivative financial instruments, to hedge our interest rate risk position. The Board of Directors has approved hedging policy statements governing the use of these instruments. The Board and Management ALCO monitor derivative activities relative to their expectations and our hedging policies. Refer Note 8 of the consolidated financial statements for further discussion of these derivative instruments.

LIBOR is a benchmark interest rate for certain floating rate loans, deposits and borrowings, and off-balance sheet exposures of the Company. The administrator of LIBOR has announced that the publication of the most commonly used U.S. Dollar LIBOR settings will cease to be provided or will cease to be representative after June 30, 2023. The publication of all other LIBOR settings ceased to be provided or ceased to be representative as of December 31, 2021. As such, the Company has an internal project team that is focused on an orderly transition from LIBOR to alternative reference rates. The markets for alternative rates are developing. The Company will continue to assess the use of alternative rates, including SOFR, and expects to transition to alternative rates as the markets and best practices further develop. The Company is also currently assessing the applicability and scope of the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”), which was enacted on March 15, 2022. The LIBOR Act establishes a process for replacing LIBOR on existing LIBOR contracts that do not provide for the use of a clearly defined or practicable replacement benchmark rate. Under the LIBOR Act’s process for replacing LIBOR, a benchmark replacement identified by the Board of Governors of the Federal Reserve System that is based on SOFR will replace LIBOR as the benchmark for such contracts. The final implementation of the LIBOR Act currently is uncertain, as the Federal Reserve has not yet issued final regulations that are necessary for the LIBOR Act’s administration. As of September 30, 2022, the Company has no LIBOR-based deposits.

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ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Information required by this Item 3 is included in Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations - Risk Management" and such information is incorporated into this Item 3 by reference.

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ITEM 4.  CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company’s management conducted an evaluation with the participation of the Company’s Chief Executive Officer and Chief Operating Officer and Chief Financial Officer & Principal Financial and Accounting Officer, regarding the effectiveness of the Company’s disclosure controls and procedures, as of the end of the last fiscal year. In designing and evaluating the Company’s disclosure controls and procedures, the Company and its management recognize that any controls and procedures, no matter how well designed and operated, can provide only a reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating and implementing possible controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Operating Officer and Chief Financial Officer & Principal Financial and Accounting Officer concluded that they believe the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. We intend to continue to review and document our disclosure controls and procedures, including our internal controls and procedures for financial reporting, and we may from time to time make changes to the disclosure controls and procedures to enhance their effectiveness and to ensure that our systems evolve with our business.

There was no change in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

 In the normal course of business, the Company and its subsidiaries are subject to pending and threatened legal actions. Although the Company is not able to predict the outcome of such actions, after reviewing pending and threatened actions with counsel, management believes that based on the information currently available the outcome of such actions, individually or in the aggregate, will not have a material adverse effect on the Company’s consolidated financial position as a whole.

ITEM 1A.  RISK FACTORS

There are a number of factors that may adversely affect the Company’s business, financial results or stock price. Refer to “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, for discussion of these risks.

ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) None.

(b) None.

(c) None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

 None.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION

None.

ITEM 6.  EXHIBITS

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Exhibit No.	Definition
3.1	Amendment to the Articles of Incorporation of Camden National Corporation (incorporated herein by reference to Exhibit 3.3 to the Company's Registration Statement on Form S-8 filed with the Commission on April 28, 2022 (File No. 333-264534)).
3.2	Camden National Corporation Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.4 to the Company's Registration Statement on Form S-8 filed with the Commission on April 28, 2022 (File No. 333-264534)).
10.1†	Camden National Corporation 2022 Equity and Incentive Plan (incorporated herein by reference to Exhibit 99.1 to the Company's Registration Statement on Form S-8 filed with the Commission on April 28, 2022 (File No. 333-264534)).
10.2†	Camden National Corporation Second Amended and Restated Long-Term Performance Share Program, effective as of April 26, 2022 (incorporated herein by reference to Exhibit 10.1 to the Company's Form 8-K filed with the Commission on April 28, 2022).
10.3†	Camden National Corporation Second Amended and Restated Management Stock Purchase Program, effective as of April 26, 2022 (incorporated herein by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 5, 2022).
10.4†	Camden National Corporation Third Amended and Restated Defined Contribution Retirement Program, effective as of April 26, 2022 (incorporated herein by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 5, 2022).
10.5†	Camden National Corporation Amended and Restated Independent Directors' Equity Compensation Program, effective as of April 26, 2022 (incorporated herein by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 5, 2022).
10.6†	Form of Non-Executive Restricted Stock Award Agreement Under the 2022 Equity and Incentive Plan (incorporated herein by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 5, 2022).
10.7†	Form of Executive Restricted Stock Award Agreement Under the 2022 Equity and Incentive Plan (incorporated herein by reference to Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 5, 2022).
10.8†	Form of Restricted Stock Award Agreement Under the Second Amended and Restated Management Stock Purchase Program (incorporated herein by reference to Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 5, 2022).
10.9†	Form of Restricted Stock Unit Award Agreement for Company Employees Under the 2022 Equity and Incentive Plan (incorporated herein by reference to Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 5, 2022).
10.10†	Form of Performance Share Unit award Agreement Under the Second Amended and Restated Long-Term Performance Share Program (incorporated herein by reference to Exhibit 10.10 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 5, 2022).
10.11†	Form of Incentive Stock Option Agreement Under the Camden National Corporation 2022 Equity and Incentive Plan (incorporated herein by reference to Exhibit 10.11 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 5, 2022).
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
31.2*	Certification of Chief Financial Officer, Principal Financial & Accounting Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
32.1**	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Chief Financial Officer, Principal Financial & Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	iXBRL (Inline eXtensible Business Reporting Language). The following materials from Camden National Corporation’s Quarterly Report on Form 10-Q for the period ended September 30, 2022, formatted in iXBRL: (i) Consolidated Statements of Condition - September 30, 2022 and December 31, 2021; (ii) Consolidated Statements of Income - Three and Nine Months Ended September 30, 2022 and 2021; (iii) Consolidated Statements of Comprehensive (Loss) Income - Three and Nine Months Ended September 30, 2022 and 2021; (iv) Consolidated Statements of Changes in Shareholders’ Equity - Three and Nine Months Ended September 30, 2022 and 2021; (v) Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2022 and 2021; and (vi) Notes to the Unaudited Consolidated Financial Statements.
104*	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
*	Filed herewith.
**	Furnished herewith.
†	Management contract or a compensatory plan or arrangement.

77

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CAMDEN NATIONAL CORPORATION
(Registrant)
/s/ Gregory A. Dufour	November 3, 2022
Gregory A. Dufour	Date
President and Chief Executive Officer (Principal Executive Officer)
/s/ Michael R. Archer	November 3, 2022
Michael R. Archer	Date
Chief Financial Officer and Principal Financial & Accounting Officer

78

EX-31.1

Exhibit #31.1

CERTIFICATION

I, Gregory A. Dufour, certify that:

I have reviewed this quarterly report on Form 10-Q of Camden National Corporation;

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

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

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

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

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

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

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

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

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

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

Date: November 3, 2022

/s/ Gregory A. Dufour

Gregory A. Dufour

President and Chief Executive Officer

EX-31.2

Exhibit #31.2

CERTIFICATION

I, Michael R. Archer, certify that: 

I have reviewed this quarterly report on Form 10-Q of Camden National Corporation;

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

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

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

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

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

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

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

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

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

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

Date: November 3, 2022

/s/ Michael R. Archer

Michael R. Archer

Chief Financial Officer and Principal Financial & Accounting Officer

EX-32.1

Exhibit #32.1

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

The undersigned officer of Camden National Corporation (the “Company”) hereby certifies that the Company's quarterly report on Form 10-Q for the period ended September 30, 2022 to which this certification is being furnished as an exhibit (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.  This certification is provided pursuant to 18 U.S.C. Section 1350 and Item 601(b)(32) of Regulation S-K (“Item 601(b)(32)”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), and the Exchange Act. In accordance with clause (ii) of Item 601(b)(32), this certification (a) shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to liability of this section, and (b) shall not be deemed to be incorporated by reference into any filing under the Securities Act of the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

/s/ Gregory A. Dufour	November 3, 2022
Gregory A. Dufour	Date
President and Chief Executive Officer

EX-32.2

Exhibit #32.2

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

The undersigned officer of Camden National Corporation (the “Company”) hereby certifies that the Company's quarterly report on Form 10-Q for the period ended September 30, 2022 to which this certification is being furnished as an exhibit (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.  This certification is provided pursuant to 18 U.S.C. Section 1350 and Item 601(b)(32) of Regulation S-K (“Item 601(b)(32)”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), and the Exchange Act. In accordance with clause (ii) of Item 601(b)(32), this certification (a) shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to liability of this section, and (b) shall not be deemed to be incorporated by reference into any filing under the Securities Act of the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

/s/ Michael R. Archer	November 3, 2022
Michael R. Archer	Date
Chief Financial Officer and Principal Financial & Accounting Officer

XML

Cover - shares	9 Months Ended
	Sep. 30, 2022	Oct. 28, 2022
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	0-28190
Entity Registrant Name	CAMDEN NATIONAL CORP
Entity Central Index Key	0000750686
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Incorporation, State or Country Code	ME
Entity Tax Identification Number	01-0413282
Entity Address, Address Line One	2 ELM STREET
Entity Address, City or Town	CAMDEN
Entity Address, State or Province	ME
Entity Address, Postal Zip Code	04843
City Area Code	207
Local Phone Number	236-8821
Title of 12(b) Security	Common Stock, without par value
Trading Symbol	CAC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		14,565,409

XML

CONSOLIDATED STATEMENTS OF CONDITION (CURRENT PERIOD UNAUDITED) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
ASSETS
Cash and due from banks	$ 55,073	$ 38,902
Interest-bearing deposits in other banks (including restricted cash)	26,939	181,723
Total cash, cash equivalents and restricted cash	82,012	220,625
Investments:
Trading securities	3,727	4,428
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	723,618	1,507,486
Held-to-maturity securities, at amortized cost (fair value of $491,759 and $1,380, respectively)	534,309	1,291
Other investments	15,108	10,280
Total investments	1,276,762	1,523,485
Loans held for sale, at fair value (book value of $4,863 and $5,786, respectively)	4,629	5,815
Loans	3,860,680	3,431,474
Less: allowance for credit losses on loans	(36,542)	(33,256)
Net loans	3,824,138	3,398,218
Goodwill	94,697	94,697
Core deposit intangible assets	1,719	2,188
Bank-owned life insurance	98,760	97,241
Premises and equipment, net	36,179	37,775
Deferred tax assets	53,693	19,210
Other assets	79,135	101,102
Total assets	5,551,724	5,500,356
Deposits:
Non-interest checking	1,245,137	1,279,565
Interest checking	1,460,571	1,351,736
Savings and money market	1,493,518	1,459,472
Certificates of deposit	279,603	309,648
Brokered deposits	89,775	208,468
Total deposits	4,568,604	4,608,889
Short-term borrowings	421,101	211,608
Subordinated debentures	44,331	44,331
Accrued interest and other liabilities	86,681	94,234
Total liabilities	5,120,717	4,959,062
Commitments and Contingencies
Shareholders’ Equity
Common stock, no par value: authorized 40,000,000 shares, issued and outstanding 14,563,828 and 14,739,956 shares on September 30, 2022 and December 31, 2021, respectively	114,536	123,111
Retained earnings	452,927	424,412
Accumulated other comprehensive loss	(136,456)	(6,229)
Total shareholders’ equity	431,007	541,294
Total liabilities and shareholders’ equity	$ 5,551,724	$ 5,500,356

XML

CONSOLIDATED STATEMENTS OF CONDITION (CURRENT PERIOD UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Available-for-sale securities, book value	$ 833,888	$ 1,508,981
Held-to-maturity securities, fair value	491,759	1,380
Loans held for sale	$ 4,863	$ 5,786
Common stock, no par value (dollars per share)	$ 0	$ 0
Common stock, authorized (in shares)	40,000,000	40,000,000
Common stock, issued (in shares)	14,563,828	14,739,956
Common stock, outstanding (in shares)	14,563,828	14,739,956

XML

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Interest Income
Interest and fees on loans	$ 37,568	$ 31,185	$ 102,724	$ 92,610
Taxable interest on investments	5,756	5,157	17,395	13,362
Nontaxable interest on investments	790	756	2,324	2,247
Dividend income	137	99	349	306
Other interest income	330	182	677	508
Total interest income	44,581	37,379	123,469	109,033
Interest Expense
Interest on deposits	5,442	1,973	9,785	5,957
Interest on borrowings	787	122	1,372	454
Interest on subordinated debentures	539	538	1,600	1,983
Total interest expense	6,768	2,633	12,757	8,394
Net interest income	37,813	34,746	110,712	100,639
Provision (credit) for credit losses	2,764	939	4,034	(4,420)
Net interest income after provision (credit) for credit losses	35,049	33,807	106,678	105,059
Non-Interest Income
Brokerage and insurance commissions	1,003	993	3,269	2,885
Mortgage banking income, net	635	1,913	3,186	11,620
Bank-owned life insurance	374	589	1,519	1,774
Net loss on sale of securities	0	0	(9)	0
Other income	1,232	955	3,032	2,569
Total non-interest income	9,954	11,099	30,920	37,634
Non-Interest Expense
Salaries and employee benefits	15,849	15,902	46,757	45,742
Furniture, equipment and data processing	3,305	2,980	9,639	8,954
Net occupancy costs	1,765	1,813	5,715	5,569
Debit card expense	1,210	1,106	3,410	3,166
Consulting and professional fees	814	792	3,114	2,652
Regulatory assessments	575	522	1,745	1,512
Amortization of core deposit intangible assets	156	163	469	491
Other real estate owned and collection costs (recoveries), net	56	60	9	(156)
Other expenses	3,361	2,925	8,998	8,822
Total non-interest expense	27,091	26,263	79,856	76,752
Income before income tax expense	17,912	18,643	57,742	65,941
Income Tax Expense	3,645	4,003	11,654	13,418
Net Income	$ 14,267	$ 14,640	$ 46,088	$ 52,523
Per Share Data
Basic earnings per share	$ 0.97	$ 0.98	$ 3.13	$ 3.51
Diluted earnings per share	0.97	0.97	3.12	3.49
Cash dividends declared per share	$ 0.40	$ 0.36	$ 1.20	$ 1.08
Weighted average number of common shares outstanding	14,619,460	14,931,056	14,670,450	14,930,387
Diluted weighted average number of common shares outstanding	14,675,332	14,999,013	14,728,349	14,996,541
Debit card income
Non-Interest Income
Revenue	$ 3,234	$ 3,278	$ 9,371	$ 9,126
Service charges on deposit accounts
Non-Interest Income
Revenue	1,941	1,744	5,705	4,800
Income from fiduciary services
Non-Interest Income
Revenue	$ 1,535	$ 1,627	$ 4,847	$ 4,860

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Statement of Comprehensive Income [Abstract]
Net Income	$ 14,267	$ 14,640	$ 46,088	$ 52,523
Other comprehensive loss:
Net change in unrealized gains on available-for-sale securities, net of tax	(24,231)	(5,139)	(139,095)	(20,352)
Net decrease in fair value, tax (expense) benefit	2,560	467	8,324	3,267
Net gain on postretirement plans, net of tax	181	171	544	512
Other comprehensive loss	(21,490)	(4,501)	(130,227)	(16,573)
Comprehensive (Loss) Income	$ (7,223)	$ 10,139	$ (84,139)	$ 35,950

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Total	Common Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning Balance (in shares) at Dec. 31, 2020		14,909,097
Beginning Balance at Dec. 31, 2020	$ 529,314	$ 131,072	$ 377,502	$ 20,740
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	52,523		52,523
Other comprehensive loss, net of tax	(16,573)			(16,573)
Stock-based compensation expense	2,007	$ 2,007
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings and tax benefit (shares)		46,732
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings	(241)	$ (241)
Common stock repurchased (in shares)		(106,502)
Common stock repurchased	(4,913)	$ (4,913)
Cash dividends declared	(16,133)		(16,133)
Ending Balance (in shares) at Sep. 30, 2021		14,849,327
Ending Balance at Sep. 30, 2021	545,984	$ 127,925	413,892	4,167
Beginning Balance (in shares) at Jun. 30, 2021		14,951,067
Beginning Balance at Jun. 30, 2021	545,548	$ 132,278	404,602	8,668
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	14,640		14,640
Other comprehensive loss, net of tax	(4,501)			(4,501)
Stock-based compensation expense	493	$ 493
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings and tax benefit (shares)		4,762
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings	67	$ 67
Common stock repurchased (in shares)		(106,502)
Common stock repurchased	(4,913)	$ (4,913)
Cash dividends declared	(5,350)		(5,350)
Ending Balance (in shares) at Sep. 30, 2021		14,849,327
Ending Balance at Sep. 30, 2021	545,984	$ 127,925	413,892	4,167
Beginning Balance (in shares) at Dec. 31, 2021		14,739,956
Beginning Balance at Dec. 31, 2021	541,294	$ 123,111	424,412	(6,229)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	46,088		46,088
Other comprehensive loss, net of tax	(130,227)			(130,227)
Stock-based compensation expense	2,039	$ 2,039
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings and tax benefit (shares)		49,117
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings	(374)	$ (374)
Common stock repurchased (in shares)		(225,245)
Common stock repurchased	(10,240)	$ (10,240)
Cash dividends declared	(17,573)		(17,573)
Ending Balance (in shares) at Sep. 30, 2022		14,563,828
Ending Balance at Sep. 30, 2022	431,007	$ 114,536	452,927	(136,456)
Beginning Balance (in shares) at Jun. 30, 2022		14,625,041
Beginning Balance at Jun. 30, 2022	446,381	$ 116,825	444,522	(114,966)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	14,267		14,267
Other comprehensive loss, net of tax	(21,490)			(21,490)
Stock-based compensation expense	522	$ 522
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings and tax benefit (shares)		2,476
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings	16	$ 16
Common stock repurchased (in shares)		(63,689)
Common stock repurchased	(2,827)	$ (2,827)
Cash dividends declared	(5,862)		(5,862)
Ending Balance (in shares) at Sep. 30, 2022		14,563,828
Ending Balance at Sep. 30, 2022	$ 431,007	$ 114,536	$ 452,927	$ (136,456)

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Statement of Stockholders' Equity [Abstract]
Cash dividends declared, per share (in dollars per share)	$ 0.40	$ 0.36	$ 1.20	$ 1.08

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands		9 Months Ended
		Sep. 30, 2022	Sep. 30, 2021
Operating Activities
Net Income		$ 46,088	$ 52,523
Adjustments to reconcile net income to net cash provided by operating activities:
Originations of mortgage loans held for sale		(130,725)	(359,842)
Proceeds from the sale of mortgage loans		134,597	400,812
Gain on sale of mortgage loans, net of origination costs		(2,948)	(11,260)
Provision (credit) for credit losses		4,034	(4,420)
Depreciation and amortization expense		2,638	2,779
Investment securities amortization and accretion, net		3,118	5,238
Stock-based compensation expense		2,039	2,007
Amortization of core deposit intangible assets		469	491
Purchase accounting accretion, net		(197)	(589)
Net gain on sale of premises and equipment		(204)	0
Net decrease in derivative collateral posted		30,470	25,090
(Increase) decrease in other assets		(765)	2,827
Decrease in other liabilities		(3,899)	(3,994)
Net cash provided by operating activities		84,715	111,662
Investing Activities
Proceeds from available-for-sale debt securities		160,708	248,186
Purchase of available-for-sale debt securities		80,868	618,744
Proceeds from paydowns of held-to-maturity securities		15,192	0
Purchase of held-to-maturity securities		(24,502)	0
Net increase in loans		(429,948)	(95,720)
Purchase of Federal Home Loan Bank stock		(29,104)	(68)
Proceeds from sale of Federal Home Loan Bank stock		24,276	1,329
Purchase of premises and equipment		1,348	1,549
Proceeds from the sale of premises and equipment		466	0
Recoveries of previously charged-off loans		437	272
Proceeds from the sale of other real estate owned		287	465
Net cash used in investing activities		(364,404)	(465,829)
Financing Activities
Net (decrease) increase in deposits		(40,285)	599,936
Net proceeds from borrowings less than 90 days		209,493	49,113
Repayments of Federal Home Loan Bank long-term advances		0	25,000
Repayment of subordinated debt		0	(15,000)
Common stock repurchases		(9,968)	(4,924)
Exercise of stock options and issuance of restricted stock, net of repurchase for tax withholdings		(374)	(241)
Cash dividends paid on common stock		17,671	15,721
Finance lease payments		(119)	(114)
Net cash provided by financing activities		141,076	588,049
Net (decrease) increase in cash, cash equivalents and restricted cash		(138,613)	233,882
Cash, cash equivalents, and restricted cash at beginning of period		220,625	145,774
Cash, cash equivalents and restricted cash at end of period		82,012	379,656
Supplemental information
Transfer from available-for-sale securities to held-to-maturity securities	[1]	592,438	0
Interest paid		12,565	8,523
Income taxes paid		9,761	14,277
Dividends Payable		5,861	5,348
Unsettled common stock repurchase		272	0
Transfer from premises to other real estate owned		$ 0	$ 204

[1] As of the date of transfer, the amortized cost basis of the debt securities was $592.4 million, fair value was $520.3 million and the net pre-tax unrealized losses included in AOCI was $72.1 million. Refer to Note 3 for further details.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - Transferred Securities $ in Millions	1 Months Ended
	Jun. 30, 2022 USD ($)
AFS debt securities transferred to HTM, amortized cost	$ 592.4
AFS debt securities transferred to HTM, fair value	520.3
AFS debt securities, transfer, unrealized loss	$ 72.1

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BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

The accompanying unaudited consolidated interim financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include all disclosures required by accounting principles generally accepted in the United States of America for complete presentation of financial statements. In the opinion of management, the consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the consolidated statements of condition of Camden National Corporation (the "Company") as of September 30, 2022 and December 31, 2021, the consolidated statements of income for the three and nine months ended September 30, 2022 and 2021, the consolidated statements of comprehensive (loss) income for the three and nine months ended September 30, 2022 and 2021, the consolidated statements of changes in shareholders' equity for the three and nine months ended September 30, 2022 and 2021, and the consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021. The consolidated financial statements include the accounts of the Company and Camden National Bank (the "Bank"), a wholly-owned subsidiary of the Company (which includes the consolidated accounts of Healthcare Professional Funding Corporation ("HPFC") and Property A, Inc. as of and for the three and nine months ended September 30, 2022 and 2021). All intercompany accounts and transactions have been eliminated in consolidation. Assets held by the Bank in a fiduciary capacity, through Camden National Wealth Management, a division of the Bank, are not assets of the Company and, therefore, are not included in the consolidated statements of condition. The Company also owns 100% of the common stock of Camden Capital Trust A and Union Bankshares Capital Trust I. These entities are unconsolidated subsidiaries of the Company. Certain reclassifications may have been made to prior period amounts to conform to the current period presentation. Any such reclassifications did not impact net income or shareholders' equity as previously reported. Net income reported for the three and nine months ended September 30, 2022, is not necessarily indicative of the results that may be expected for the full year. The information in this report should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

The acronyms, abbreviations and definitions identified below are used throughout this Form 10-Q, including Part I. "Financial Information" and Part II. "Management's Discussion and Analysis of Financial Condition and Results of Operations." The following is provided to aid the reader and provide a reference page when reviewing these sections of the Form 10-Q.

Acronym	Description	Acronym	Description
AFS:	Available-for-sale	FRBB:	Federal Reserve Bank of Boston
ALCO:	Asset/Liability Committee	GAAP:	Generally accepted accounting principles in the United States
ACL:	Allowance for credit losses	GDP:	Gross domestic product
AOCI:	Accumulated other comprehensive income (loss)	HPFC:	Healthcare Professional Funding Corporation, a wholly-owned subsidiary of Camden National Bank
ASC:	Accounting Standards Codification	HTM:	Held-to-maturity
ASU:	Accounting Standards Update	IRS:	Internal Revenue Service
Bank:	Camden National Bank, a wholly-owned subsidiary of Camden National Corporation	LGD:	Loss given default
BOLI:	Bank-owned life insurance	LIBOR:	London Interbank Offered Rate
Board ALCO:	Board of Directors' Asset/Liability Committee	LTIP:	Long-Term Performance Share Plan
CARES Act:	Coronavirus Aid, Relief, and Economic Security Act, signed into law in March 2020 in response to COVID-19	Management ALCO:	Management Asset/Liability Committee
CCTA:	Camden Capital Trust A, an unconsolidated entity formed by Camden National Corporation	MBS:	Mortgage-backed security
CDs:	Certificate of deposits	MSPP:	Management Stock Purchase Plan
CECL:	Current Expected Credit Losses	N/A:	Not applicable
Company:	Camden National Corporation	N.M.:	Not meaningful
CMO:	Collateralized mortgage obligation	OCC:	Office of the Comptroller of the Currency
CUSIP:	Committee on Uniform Securities Identification Procedures	OCI:	Other comprehensive income (loss)
DCRP:	Defined Contribution Retirement Plan	OREO:	Other real estate owned
EPS:	Earnings per share	OTTI:	Other-than-temporary impairment
FASB:	Financial Accounting Standards Board	PD:	Probability of default
FDIC:	Federal Deposit Insurance Corporation	SBA:	U.S. Small Business Administration
FHLB:	Federal Home Loan Bank	SBA PPP:	U.S. Small Business Administration Paycheck Protection Program
FHLBB:	Federal Home Loan Bank of Boston	SERP:	Supplemental executive retirement plans
FHLMC:	Federal Home Loan Mortgage Corporation	SOFR:	Secured Overnight Financing Rate
FNMA:	Federal National Mortgage Association	TDR:	Troubled-debt restructured loan
FOMC:	Federal Open Market Committee	UBCT:	Union Bankshares Capital Trust I, an unconsolidated entity formed by Union Bankshares Company that was subsequently acquired by Camden National Corporation
FRB:	Federal Reserve System Board of Governors	U.S.:	United States of America

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RECENT ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Sep. 30, 2022

Accounting Standards Update and Change in Accounting Principle [Abstract]

RECENT ACCOUNTING PRONOUNCEMENTS

RECENT ACCOUNTING PRONOUNCEMENTS

The following provides a brief description of recently issued accounting pronouncements that have yet to be adopted by the Company:

ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02"). The FASB issued ASU 2022-02 to provide new guidance on TDRs and write-offs for entities that have adopted ASU 2016-13. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the effect of ASU 2022-02 on its consolidated financial statements and does not anticipate a material impact upon adoption.

ASU No. 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method ("ASU 2022-01"). The FASB issued ASU 2022-01 to amend ASU 2017-12, which was adopted by the Company in 2018. This amendment renames the "last-of-layer" method to the "portfolio layer" method, permits non-repayable financial assets to be included in a closed portfolio hedged using the portfolio layer method, and provides additional guidance for entities that apply the portfolio layer method of hedge accounting in accordance with Topic 815. The amendment is effective for fiscal years beginning after December 15, 2022. The Company is currently evaluating the amendment and does not anticipate a material impact on its consolidated financial statements upon adoption of this guidance.

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INVESTMENTS

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

INVESTMENTS

Trading Securities

Trading securities are reported on the Company's consolidated statements of condition at fair value. As of September 30, 2022 and December 31, 2021, the fair value of the Company's trading securities were $3.7 million and $4.4 million, respectively. These securities are held in a rabbi trust account and invested in mutual funds. The trading securities will be used for future payments associated with the Company's deferred compensation plan for eligible employees and directors.

AFS Debt Securities

AFS debt securities are reported on the Company's consolidated statements of condition at fair value. The following table summarizes the amortized cost, estimated fair value, and unrealized gains (losses) of AFS debt securities, as of the dates indicated:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
September 30, 2022
Obligations of states and political subdivisions	$	53,247	$	1	$	(1,774)	$	51,474
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	622,660		65		(92,937)		529,788
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	134,872		—		(13,061)		121,811
Subordinated corporate bonds	23,109		—		(2,564)		20,545
Total AFS debt securities	$	833,888	$	66	$	(110,336)	$	723,618
December 31, 2021
Obligations of U.S. government-sponsored enterprises	$	8,585	$	—	$	(241)	$	8,344
Obligations of states and political subdivisions	112,086		5,392		—		117,478
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	1,003,869		7,856		(11,468)		1,000,257
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	361,781		2,835		(5,767)		358,849
Subordinated corporate bonds	22,660		152		(254)		22,558
Total AFS debt securities	$	1,508,981	$	16,235	$	(17,730)	$	1,507,486

As of September 30, 2022 and December 31, 2021, there was no allowance carried on AFS debt securities.

In June of 2022, the Company transferred securities with a fair value of $520.3 million from AFS to HTM. The unrealized losses on the AFS debt securities at the time of transfer were $72.1 million, pre-tax, and were reported within AOCI. These unrealized losses are being amortized over the remaining life of the securities from AOCI into interest income on the consolidated statements of income. At September 30, 2022, the net unrealized losses on the transferred securities reported within AOCI were $53.7 million, net of a deferred tax asset of $14.7 million.

The net unrealized losses on AFS debt securities reported within AOCI (excluding the aforementioned securities transferred from AFS to HTM) at September 30, 2022, were $86.6 million, net of a deferred tax asset of $23.7 million and at December 31, 2021 were $1.2 million, net of a deferred tax asset of $321,000.

The following table details the Company's sales of AFS debt securities for the periods indicated below:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Proceeds from sales of investments	$	—	$	—	$	8,723	$	—
Gross realized gains	—		—		13		—
Gross realized losses	—		—		(22)		—

The following table presents the Company's AFS debt securities with gross unrealized losses, for which an ACL has not been recorded, segregated by the length of time the securities have been in a continuous loss position, as of the dates indicated:  

		Less Than 12 Months				12 Months or More				Total
(In thousands, except number of holdings)	Number of Holdings	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2022
Obligations of states and political subdivisions	101	$	51,026	$	(1,774)	$	—	$	—	$	51,026	$	(1,774)
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	172	203,082		(24,432)		322,251		(68,505)		525,333		(92,937)
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	76	83,532		(7,433)		38,279		(5,628)		121,811		(13,061)
Subordinated corporate bonds	13	9,071		(910)		11,474		(1,654)		20,545		(2,564)
Total AFS debt securities	362	$	346,711	$	(34,549)	$	372,004	$	(75,787)	$	718,715	$	(110,336)
December 31, 2021
Obligations of U.S. government-sponsored enterprises	4	$	8,344	$	(241)	$	—	$	—	$	8,344	$	(241)
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	113	659,851		(8,999)		61,978		(2,469)		721,829		(11,468)
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	56	191,456		(4,602)		38,117		(1,165)		229,573		(5,767)
Subordinated corporate bonds	7	11,932		(232)		979		(22)		12,911		(254)
Total AFS debt securities	180	$	871,583	$	(14,074)	$	101,074	$	(3,656)	$	972,657	$	(17,730)

For the three and nine months ended September 30, 2022 and 2021, the unrealized losses on the Company's AFS debt securities have not been recognized into income because management does not intend to sell and it is not more-likely-than-not it

will be required to sell any of the AFS debt securities before recovery of its amortized cost basis. Furthermore, the unrealized losses were due to changes in interest rates and other market conditions and were not reflective of credit events, the issuers continue to make timely principal and interest payments on the bonds. Agency-backed and government-sponsored enterprise securities have a long 40 year history with no credit losses, including during times of severe stress like the 2007-2008 financial crisis. The principal and interest payments on agency guaranteed debt is backed by the U.S. government. Government-sponsored enterprises similarly guarantee principal and interest payments and carry an implicit guarantee from the U.S. Department of the Treasury. Additionally, government-sponsored enterprise securities are exceptionally liquid, readily marketable, and provide a substantial amount of price transparency and price parity, indicating a perception of zero credit losses.

At September 30, 2022 and December 31, 2021, total accrued interest receivable on AFS debt securities, which has been excluded from reported amortized cost basis on AFS debt securities, was $2.0 million and $3.4 million, respectively, and was reported within other assets on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date.

The amortized cost and estimated fair values of the Company's AFS debt securities by contractual maturity at September 30, 2022, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-related securities are shown in total, as their maturities are highly variable.

(In thousands)	Amortized Cost		Fair Value
Due in one year or less	$	501	$	500
Due after one year through five years	15,785		14,033
Due after five years through ten years	60,070		57,486
Due after ten years	—		—
Subtotal	76,356		72,019
Mortgage-related securities	757,532		651,599
Total	$	833,888	$	723,618

HTM Debt Securities

HTM debt securities are reported on the Company's consolidated statements of condition at amortized cost. The following table summarizes the amortized cost, estimated fair value and unrealized gains (losses) of HTM debt securities as of the dates indicated:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
September 30, 2022
Obligations of U.S. government-sponsored enterprises	$	7,422	$	—	$	(664)	$	6,758
Obligations of states and political subdivisions	55,908		—		(3,595)		52,313
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	320,850		—		(27,067)		293,783
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	147,753		—		(10,990)		136,763
Subordinated corporate bonds	2,376		—		(234)		2,142
Total HTM debt securities	$	534,309	$	—	$	(42,550)	$	491,759
December 31, 2021
Obligations of states and political subdivisions	$	1,291	$	89	$	—	$	1,380
Total HTM debt securities	$	1,291	$	89	$	—	$	1,380

In June of 2022, the Company transferred securities with a fair value of $520.3 million from AFS to HTM. See discussion above for details.

As of September 30, 2022, the Company's HTM debt securities portfolio was primarily comprised of holdings issued or guaranteed by U.S. government sponsored enterprises and municipal debt. Agency-backed and government-sponsored

enterprise securities have a long 40 year history with no credit losses, including during times of severe stress like the 2007-2008 financial crisis. The principal and interest payments on agency guaranteed debt is backed by the U.S. government. Government-sponsored enterprises similarly guarantee principal and interest payments and carry an implicit guarantee from the U.S. Department of the Treasury. Additionally, government-sponsored enterprise securities are exceptionally liquid, readily marketable, and provide a substantial amount of price transparency and price parity, indicating a perception of zero credit losses. HTM municipal debt holdings are comprised solely of high credit quality (rated A- or higher) state and municipal obligations. High credit quality state and municipal obligations have a history of zero to near-zero credit loss. As of December 31, 2021, the Company’s HTM debt securities portfolio was made up of three investment grade municipal debt securities, of which two securities also carried credit enhancements. Accordingly, the Company determined that the expected credit loss on its HTM portfolio was immaterial, and therefore it did not carry an allowance on its HTM debt securities at September 30, 2022 or December 31, 2021.

As of September 30, 2022 and December 31, 2021, none of the Company's HTM debt securities were past due or on non-accrual status. For the three and nine months ended September 30, 2022 and 2021, the Company did not recognize any interest income on non-accrual HTM debt securities. At September 30, 2022 and December 31, 2021, total accrued interest receivable on HTM debt securities, which has been excluded from reported amortized cost basis on HTM debt securities, was $1.4 million and $10,000, respectively, and was reported within other assets on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date.

The amortized cost and estimated fair values of HTM debt securities by contractual maturity at September 30, 2022 are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(In thousands)	Amortized Cost		Fair Value
Due in one year or less	$	—	$	—
Due after one year through five years	864		845
Due after five years through ten years	14,562		13,538
Due after ten years	50,280		46,830
Subtotal	65,706		61,213
Mortgage-related securities	468,603		430,546
Total	$	534,309	$	491,759

AFS and HTM Debt Securities Pledged

At September 30, 2022 and December 31, 2021, AFS and HTM debt securities with an amortized cost of $765.8 million and $640.1 million and estimated fair values of $673.6 million and $641.2 million, respectively, were pledged to secure FHLBB advances, public deposits, and securities sold under agreements to repurchase and for other purposes required or permitted by law.

Other Investments

The Company's FHLBB and FRB common stock are reported at cost within other investments on the consolidated statements of condition. The Company evaluates these investments for impairment based on the ultimate recoverability of the par value. The Company did not record any impairment on its FHLBB and FRB stock for the three and nine months ended September 30, 2022 and 2021.

The following table summarizes the Company's investment in FHLBB stock and FRBB stock as presented within other investments on the consolidated statements of condition, as of the dates indicated:

(In thousands)	September 30, 2022		December 31, 2021
FHLBB	$	9,734	$	4,906
FRB	5,374		5,374
Total other investments	$	15,108	$	10,280

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LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS

9 Months Ended

Sep. 30, 2022

Loans and Leases Receivable Disclosure [Abstract]

LOANS AND ALLOWANCE FOR LOAN LOSSES

LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS

Loans

The composition of the Company’s loan portfolio, excluding residential loans held for sale, was as follows for the dates indicated:

(In thousands)	September 30, 2022		December 31, 2021
Commercial Loans:
Commercial real estate - non-owner-occupied	$	1,229,102	$	1,178,185
Commercial real estate - owner-occupied	333,785		317,275
Commercial	423,325		363,695
SBA PPP	685		35,953
Total commercial loans	1,986,897		1,895,108
Retail Loans:
Residential real estate	1,619,409		1,306,447
Home equity	233,367		210,403
Consumer	21,007		19,516
Total retail loans	1,873,783		1,536,366
Total loans	$	3,860,680	$	3,431,474

The loan balances for each portfolio segment presented above are net of their respective unamortized fair value mark discount on acquired loans and net of unamortized loan origination costs for the dates indicated:

(In thousands)	September 30, 2022		December 31, 2021
Net unamortized fair value mark discount on acquired loans	$	(396)	$	(593)
Net unamortized loan origination costs(1)	6,429		3,110
Total	$	6,033	$	2,517

(1)    Net unamortized loan origination costs includes unrecognized origination fees for SBA PPP loans of $20,000 and $1.2 million as of September 30, 2022 and December 31, 2021, respectively.

The Company's lending activities are primarily conducted in Maine, but also include loan production offices in Massachusetts and New Hampshire. The Company originates single- and multi-family residential loans, commercial real estate loans, business loans, municipal loans and a variety of consumer loans. In addition, the Company makes loans for the construction of residential homes, multi-family properties and commercial real estate properties. The ability and willingness of borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the geographic area and the general economy.

SBA PPP Loans. Beginning in April 2020, the Company originated SBA PPP loans issued to qualifying businesses as part of the federal stimulus packages issued due to the COVID-19 pandemic. This program provided qualifying businesses a specialized, low-interest-rate loan by the U.S. Treasury Department and was administered by the SBA. SBA PPP loans provided borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilized the loan proceeds to cover employee compensation-related business operating costs, as well as certain other costs up to pre-established limits. Effective May 31, 2021, the SBA PPP loan program ended and the Company ceased originating loans under this program.

For the year ended December 31, 2021, the Company originated 1,620 SBA PPP loans totaling $102.2 million to qualifying businesses across our markets in need of financial support due to the COVID-19 pandemic. Of these SBA PPP loans originated during the year ended December 31, 2021, 6 loans totaling $685,000 remained outstanding as of September 30, 2022.

Related Party Loans. In the normal course of business, the Bank makes loans to certain officers, directors and their associated companies, under terms that are consistent with the Company's lending policies and regulatory requirements and that do not involve more than the normal risk of collectability or present other unfavorable features. At September 30, 2022 and December 31, 2021, outstanding loans to certain officers, directors and their associated companies were less than 5% of the Company's shareholders' equity.

Loan Sales

For the three months ended September 30, 2022 and 2021, the Company sold $37.9 million and $86.2 million, respectively, of residential mortgage loans on the secondary market, which resulted in gains on the sale of loans (net of costs) of $783,000 and $2.2 million, respectively. For the nine months ended September 30, 2022 and 2021, the Company sold $131.6 million and $389.6 million, respectively, of residential mortgage loans on the secondary market, which resulted in gains on the sale of loans (net of costs) of $2.9 million and $11.3 million, respectively.

At September 30, 2022 and December 31, 2021, the Company had certain residential mortgage loans with a principal balance of $4.9 million and $5.8 million, respectively, designated as held for sale. The Company has elected the fair value option of accounting for its loans held for sale, and at September 30, 2022 and December 31, 2021, recorded an unrealized (loss) gain of ($233,000) and $29,000, respectively. For the three months ended September 30, 2022 and 2021, the Company recorded an unrealized loss on loans held for sale recorded within mortgage banking income, net, on the Company's consolidated statements of income of $193,000 and $216,000, respectively. For the nine months ended September 30, 2022 and 2021, the Company recorded an unrealized loss on loans held for sale recorded within mortgage banking income, net, on the Company's consolidated statements of income of $262,000 and $1.0 million respectively.

The Company has forward delivery commitments with a secondary market investor on each of its loans held for sale at September 30, 2022 and December 31, 2021. Refer to Note 8 for further discussion of the Company's forward delivery commitments.

ACL on Loans

The Company manages its loan portfolio proactively to effectively identify problem credits and assess trends early, implement effective work-out strategies, and take charge-offs as promptly as practical. In addition, the Company continuously reassesses its underwriting standards in response to credit risk posed by changes in economic conditions. The Company monitors and manages credit risk through the following governance structure:

•The Credit Risk and Special Assets team and the Credit Risk Policy Committee, which is an internal management committee comprised of various executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Credit Risk and Special Assets, Compliance, and Commercial and Retail Banking, oversee the Company's systems and procedures to monitor the credit quality of its loan portfolio, conduct a loan review program, and maintain the integrity of the loan rating system.

•The adequacy of the ACL is overseen by the Management Provision Committee, which is an internal management committee comprised of various Company executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Credit Risk and Special Assets, Compliance, and Commercial and Retail Banking. The Management Provision Committee supports the oversight efforts of the Audit Committee of the Board of Directors.

•The Directors' Credit Committee of the Board of Directors reviews large credit exposures, monitors external loan review reports, reviews the lending authority for individual loan officers when required, and has approval authority and responsibility for all matters regarding the loan policy and other credit-related policies, including reviewing and monitoring asset quality trends, and concentration levels.

•The Audit Committee of the Board of Directors has approval authority and oversight responsibility for the ACL adequacy and methodology.

Segmentation. For purposes of determining the ACL on loans, the Company disaggregates its loans into portfolio segments. Each portfolio segment possesses unique risk characteristics that are considered when determining the appropriate level of allowance. As of September 30, 2022 and December 31, 2021, the Company's loan portfolio segments, as determined based on the unique risk characteristics of each, include the following:

Commercial Real Estate - Non-Owner-Occupied. Non-owner-occupied commercial real estate loans are, in substance, all commercial real estate loans that are not categorized by the Company as owner-occupied commercial real estate loans. Non-owner-occupied commercial estate loans are investment properties in which the primary source for repayment of the loan by the borrower is derived from rental income associated with the property or the proceeds of the sale, refinancing, or permanent refinancing of the property. Non-owner-occupied commercial real estate loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, multi-family residential, commercial/retail office space, industrial/warehouse space, hotels, assisted living facilities and other specific use properties. Also included within the non-owner-occupied commercial real estate loan segment are construction projects until they are completed. Commercial real estate loans are typically written with amortizing payment structures. Collateral values are determined based upon appraisals and evaluations in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines.

Commercial Real Estate - Owner-Occupied. Generally, owner-occupied commercial real estate loans are properties that are owned and operated by the borrower, and the primary source for repayment is the cash flow from the ongoing operations and activities conducted by the borrower's business. Owner-occupied commercial real estate loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, commercial/retail office space, restaurants, educational and medical practice facilities and other specific use properties. Commercial real estate loans are typically written with amortizing payment structures. Collateral values are determined based upon appraisals and evaluations in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines.

Commercial. Commercial loans consist of revolving and term loan obligations extended to business and corporate enterprises for the purpose of financing working capital and/or capital investment. Collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, and/or real estate, if applicable. Commercial loans are primarily paid by the operating cash flow of the borrower. Commercial loans may be secured or unsecured.

SBA PPP. SBA PPP loans are unsecured, fully guaranteed commercial loans backed by the SBA, issued to qualifying small businesses as part of federal stimulus issued in response to the COVID-19 pandemic. Loans made under the program have terms of two or five years and are to be used by the borrower to offset certain payroll and other operating costs, such as rent and utilities. The loan and accrued interest, or a portion thereof, are eligible for forgiveness by the SBA should the qualifying small business meet certain conditions. SBA PPP loans were originated under the guidance of the SBA, which has been subject to change. Effective May 31, 2021, the SBA PPP loan program ended and the Company ceased originating loans under this program.

Residential Real Estate.  Residential real estate loans held in the Company's loan portfolio are made to borrowers who demonstrate the ability to make scheduled payments with full consideration to underwriting factors. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines. Collateral consists of mortgage liens on one- to four-family residences, including for investment purposes.

Home Equity. Home equity loans and lines of credit are made to qualified individuals and are secured by senior or junior mortgage liens on owner-occupied one- to four-family homes, condominiums, or vacation homes. Each home equity loan has a fixed rate and is billed as equal payments comprised of principal and interest. Each home equity line of credit has a variable rate and is billed as interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the principal balance plus all accrued interest. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines.

Consumer. Consumer loan products include personal lines of credit and amortizing loans made to qualified individuals for various purposes such as education, auto loans, debt consolidation, personal expenses or overdraft protection. Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines, as applicable. Consumer loans may be secured or unsecured.

The following table presents the activity in the ACL on loans, as reported under CECL, for the periods indicated:

	Commercial Real Estate
(In thousands)	Non-Owner-Occupied		Owner- Occupied		Commercial		SBA PPP		Residential Real Estate		Home Equity		Consumer		Total
At or For The Three Months Ended September 30, 2022
Beginning balance, June 30, 2022	$	16,210	$	2,501	$	5,145	$	1	$	8,438	$	1,796	$	153	$	34,244
Loans charged off	—		—		(183)		—		(49)		—		(46)		(278)
Recoveries	1		—		61		—		—		1		—		63
Provision for loan losses	922		146		192		—		696		63		494		2,513
Ending balance, September 30, 2022	$	17,133	$	2,647	$	5,215	$	1	$	9,085	$	1,860	$	601	$	36,542
At or For The Nine Months Ended September 30, 2022
Beginning balance, December 31, 2021	$	18,834	$	2,539	$	4,183	$	19	$	6,133	$	1,469	$	79	$	33,256
Loans charged off	—		—		(744)		—		(65)		—		(130)		(939)
Recoveries	2		2		341		—		—		87		5		437
(Credit) provision for loan losses	(1,703)		106		1,435		(18)		3,017		304		647		3,788
Ending balance, September 30, 2022	$	17,133	$	2,647	$	5,215	$	1	$	9,085	$	1,860	$	601	$	36,542
At or For The Three Months Ended September 30, 2021
Beginning balance, June 30, 2021	$	19,577	$	2,516	$	4,342	$	66	$	3,205	$	2,065	$	289	$	32,060
Loans charged off	—		—		(97)		—		(4)		—		(20)		(121)
Recoveries	—		2		49		—		2		4		7		64
Provision (credit) for loan losses	157		(214)		295		(23)		450		(231)		(165)		269
Ending balance, September 30, 2021	$	19,734	$	2,304	$	4,589	$	43	$	3,653	$	1,838	$	111	$	32,272
At or For The Nine Months Ended September 30, 2021
Beginning balance, December 31, 2020	$	21,778	$	2,832	$	6,703	$	69	$	3,474	$	2,616	$	393	$	37,865
Loans charged off	—		—		(503)		—		(92)		(145)		(88)		(828)
Recoveries	—		7		159		—		72		4		30		272
(Credit) provision for loan losses	(2,044)		(535)		(1,770)		(26)		199		(637)		(224)		(5,037)
Ending balance, September 30, 2021	$	19,734	$	2,304	$	4,589	$	43	$	3,653	$	1,838	$	111	$	32,272
At or For The Year Ended December 31, 2021
Beginning balance, December 31, 2020	$	21,778	$	2,832	$	6,703	$	69	$	3,474	$	2,616	$	393	$	37,865
Loans charged off	—		—		(799)		—		(92)		(162)		(111)		(1,164)
Recoveries	—		9		220		—		107		4		32		372
(Credit) provision for loan losses	(2,944)		(302)		(1,941)		(50)		2,644		(989)		(235)		(3,817)
Ending balance, December 31, 2021	$	18,834	$	2,539	$	4,183	$	19	$	6,133	$	1,469	$	79	$	33,256

The ACL on loans increased $3.3 million during the nine months ended September 30, 2022, to $36.5 million. The net increase was driven by: (1) a softening overall economy and the increasing likelihood of a recession and (2) 13% loan growth during this period, which was driven by residential real estate, commercial and commercial real estate - non-owner-occupied, that offset (3) the release of $5.0 million of reserves established for certain hospitality-related loans within the commercial real estate-non-owner occupied loan segment in response to the COVID-19 pandemic and the identified elevated credit risk the pandemic presented to these loans at that time. As of September 30, 2022 and December 31, 2021, the ACL on loans for these previously modified hospitality-related loans was $0 and $5.0 million, respectively.

Credit Concentrations

The Company focuses on maintaining a well-balanced and diversified loan portfolio. Despite such efforts, it is recognized that credit concentrations may occasionally emerge as a result of economic conditions, changes in local demand, natural loan growth and runoff. To identify credit concentrations effectively, all commercial and commercial real estate loans are assigned Standard Industrial Classification codes, North American Industry Classification System codes, and state and county codes. Shifts in portfolio concentrations are monitored. As of September 30, 2022, the Company's total exposure to the lessors of nonresidential buildings' industry was 13% of total loans and 32% of total commercial real estate loans. There were no other industry exposures exceeding 10% of the Company's total loan portfolio as of September 30, 2022.

Credit Quality Indicators

To further identify loans with similar risk profiles, the Company categorizes each portfolio segment into classes by credit risk characteristic and applies a credit quality indicator to each portfolio segment. The indicators for commercial real estate - non-owner-occupied and owner-occupied, commercial and residential real estate portfolio segments are represented by Grades 1 through 10 as outlined below. In general, risk ratings are adjusted periodically throughout the year as updated analysis and review warrants. This process may include, but is not limited to, annual credit and loan reviews, periodic reviews of loan performance metrics, such as delinquency rates, and quarterly reviews of adversely risk rated loans. The Company uses the following definitions when assessing grades for the purpose of evaluating the risk and adequacy of the ACL on loans:

•Grade 1 through 6 — Grades 1 through 6 represent groups of loans that are not subject to adverse criticism as defined in regulatory guidance. Loans in these groups exhibit characteristics that represent low to moderate risks, which is measured using a variety of credit risk criteria, such as cash flow coverage, debt service coverage, balance sheet leverage, liquidity, management experience, industry position, prevailing economic conditions, support from secondary sources of repayment and other credit factors that may be relevant to a specific loan. In general, these loans are supported by properly margined collateral and guarantees of principal parties.

•Grade 7 — Loans with potential weakness (Special Mention). Loans in this category are currently protected based on collateral and repayment capacity and do not constitute undesirable credit risk, but have potential weakness that may result in deterioration of the repayment process at some future date. This classification is used if a negative trend is evident in the obligor’s financial situation. Special mention loans do not sufficiently expose the Company to warrant adverse classification.

•Grade 8 — Loans with definite weakness (Substandard). Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or by collateral pledged. Borrowers experience difficulty in meeting debt repayment requirements. Deterioration is sufficient to cause the Company to look to the sale of collateral.

•Grade 9 — Loans with potential loss (Doubtful). Loans classified as doubtful have all the weaknesses inherent in the substandard grade with the added characteristic that the weaknesses make collection or liquidation of the loan in full highly questionable and improbable. The possibility of some loss is extremely high, but because of specific pending factors that may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined.

•Grade 10 — Loans with definite loss (Loss). Loans classified as loss are considered uncollectible. The loss classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the asset because recovery and collection time may be protracted.

The Company periodically reassesses asset quality indicators to reflect appropriately the risk composition of the Company’s loan portfolio. Home equity and consumer loans are not individually risk rated, but rather analyzed as groups taking into account delinquency rates and other economic conditions which may affect the ability of borrowers to meet debt service requirements, including interest rates and energy costs. Performing loans include loans that are current and loans that are past due less than 90 days. Loans that are past due over 90 days and non-accrual loans, including TDRs, are considered non-performing.

Based on the most recent analysis performed, the risk category of loans by portfolio segment by vintage was as follows as of the dates indicated:

(In thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of September 30, 2022
Commercial real estate - non-owner-occupied
Risk rating
Pass (Grades 1-6)	$	261,937	$	275,295	$	164,434	$	126,764	$	111,150	$	259,205	$	—	$	—	$	1,198,785
Special mention (Grade 7)	—		168		368		266		78		327		—		—		1,207
Substandard (Grade 8)	—		131		1,356		207		7,998		19,418		—		—		29,110
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - non-owner-occupied	261,937		275,594		166,158		127,237		119,226		278,950		—		—		1,229,102
Commercial real estate - owner-occupied
Risk rating
Pass (Grades 1-6)	52,250		82,599		28,982		24,000		40,311		75,807		—		—		303,949
Special mention (Grade 7)	—		2,076		—		19,991		—		422		—		—		22,489
Substandard (Grade 8)	26		—		—		—		3,299		4,022		—		—		7,347
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - owner occupied	52,276		84,675		28,982		43,991		43,610		80,251		—		—		333,785
Commercial
Risk rating
Pass (Grades 1-6)	57,184		73,885		35,048		35,969		23,346		28,931		132,833		29,911		417,107
Special mention (Grade 7)	—		—		99		154		83		200		1,089		14		1,639
Substandard (Grade 8)	17		19		139		238		725		1,598		1,211		632		4,579
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial	57,201		73,904		35,286		36,361		24,154		30,729		135,133		30,557		423,325
SBA PPP
Risk rating
Pass (Grades 1-6)	—		685		—		—		—		—		—		—		685
Special mention (Grade 7)	—		—		—		—		—		—		—		—		—
Substandard (Grade 8)	—		—		—		—		—		—		—		—		—
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total SBA PPP	—		685		—		—		—		—		—		—		685
Residential Real Estate
Risk rating
Pass (Grades 1-6)	429,072		584,538		248,329		81,522		52,447		220,335		334		—		1,616,577
Special mention (Grade 7)	—		—		—		—		170		2,662		—		—		2,832
Substandard (Grade 8)	—		—		—		—		—		—		—		—		—
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total residential real estate	429,072		584,538		248,329		81,522		52,617		222,997		334		—		1,619,409
Home equity
Risk rating
Performing	22,801		698		346		5,003		8,193		9,403		174,615		11,720		232,779
Non-performing	—		—		—		—		—		59		441		88		588
Total home equity	22,801		698		346		5,003		8,193		9,462		175,056		11,808		233,367
Consumer
Risk rating
Performing	6,797		4,510		2,017		1,522		434		2,447		3,279		—		21,006
Non-performing	—		—		—		—		—		1		—		—		1
Total consumer	6,797		4,510		2,017		1,522		434		2,448		3,279		—		21,007
Total Loans	$	830,084	$	1,024,604	$	481,118	$	295,636	$	248,234	$	624,837	$	313,802	$	42,365	$	3,860,680

(In thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2021
Commercial real estate - non-owner-occupied
Risk rating
Pass (Grades 1-6)	$	286,428	$	179,565	$	161,695	$	118,196	$	96,169	$	274,731	$	—	$	—	$	1,116,784
Special mention (Grade 7)	171		7,266		286		119		4,294		10,590		—		—		22,726
Substandard (Grade 8)	350		1,518		217		9,942		391		26,257		—		—		38,675
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - non-owner-occupied	286,949		188,349		162,198		128,257		100,854		311,578		—		—		1,178,185
Commercial real estate - owner-occupied
Risk rating
Pass (Grades 1-6)	91,328		39,082		31,409		43,786		46,466		56,682		—		—		308,753
Special mention (Grade 7)	—		—		—		3,396		362		1,708		—		—		5,466
Substandard (Grade 8)	—		—		54		—		1,785		1,217		—		—		3,056
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - owner occupied	91,328		39,082		31,463		47,182		48,613		59,607		—		—		317,275
Commercial
Risk rating
Pass (Grades 1-6)	91,102		43,757		44,925		23,895		13,818		27,743		80,775		31,586		357,601
Special mention (Grade 7)	145		117		590		115		383		222		967		244		2,783
Substandard (Grade 8)	—		339		320		492		293		1,209		360		298		3,311
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial	91,247		44,213		45,835		24,502		14,494		29,174		82,102		32,128		363,695
SBA PPP
Risk rating
Pass (Grades 1-6)	35,164		319		—		—		—		—		—		—		35,483
Special mention (Grade 7)	470		—		—		—		—		—		—		—		470
Substandard (Grade 8)	—		—		—		—		—		—		—		—		—
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total SBA PPP	35,634		319		—		—		—		—		—		—		35,953
Residential Real Estate
Risk rating
Pass (Grades 1-6)	586,637		281,804		103,228		63,403		46,696		219,983		903		—		1,302,654
Special mention (Grade 7)	—		—		—		—		—		230		—		—		230
Substandard (Grade 8)	—		—		—		—		—		3,563		—		—		3,563
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total residential real estate	586,637		281,804		103,228		63,403		46,696		223,776		903		—		1,306,447
Home equity
Risk rating
Performing	760		554		6,179		10,995		2,464		10,792		165,189		12,295		209,228
Non-performing	—		—		—		41		—		174		847		113		1,175
Total home equity	760		554		6,179		11,036		2,464		10,966		166,036		12,408		210,403
Consumer
Risk rating
Performing	6,860		3,523		3,089		1,051		548		2,014		2,399		—		19,484
Non-performing	—		9		21		—		—		2		—		—		32
Total consumer	6,860		3,532		3,110		1,051		548		2,016		2,399		—		19,516
Total Loans	$	1,099,415	$	557,853	$	352,013	$	275,431	$	213,669	$	637,117	$	251,440	$	44,536	$	3,431,474

Past Due and Non-Accrual Loans

The Company closely monitors the performance of its loan portfolio. A loan is placed on non-accrual status when the financial condition of the borrower is deteriorating, payment in full of both principal and interest is not expected as scheduled, or principal or interest has been in default for 90 days or more. Exceptions may be made if the asset is secured by collateral sufficient to satisfy both the principal and accrued interest in full and collection is reasonably assured. When one loan to a borrower is placed on non-accrual status, all other loans to the borrower are re-evaluated to determine if they should also be placed on non-accrual status. All previously accrued and unpaid interest is reversed at this time. A loan will return to accrual status when collection of principal and interest is assured and the borrower has demonstrated timely payments of principal and interest for a reasonable period, generally at least six months. Unsecured loans, however, are not normally placed on non-accrual status because they are generally charged-off once their collectability is in doubt.

The following is a loan aging analysis by portfolio segment (including loans past due over 90 days and non-accrual loans) and loans past due over 90 days and accruing as of the following dates:

(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans Outstanding		Loans > 90 Days Past Due and Accruing
September 30, 2022
Commercial real estate - non-owner-occupied	$	195	$	—	$	11	$	206	$	1,228,896	$	1,229,102	$	—
Commercial real estate - owner-occupied	—		—		47		47		333,738		333,785
Commercial	1,323		14		470		1,807		421,518		423,325		—
SBA PPP	—		—		—		—		685		685		—
Residential real estate	2,179		500		843		3,522		1,615,887		1,619,409		—
Home equity	620		210		327		1,157		232,210		233,367		—
Consumer	41		2		1		44		20,963		21,007		—
Total	$	4,358	$	726	$	1,699	$	6,783	$	3,853,897	$	3,860,680	$	—
December 31, 2021
Commercial real estate - non-owner-occupied	$	—	$	—	$	51	$	51	$	1,178,134	$	1,178,185	$	—
Commercial real estate - owner-occupied	47		—		133		180		317,095		317,275		—
Commercial	282		174		787		1,243		362,452		363,695		—
SBA PPP	—		68		—		68		35,885		35,953		—
Residential real estate	379		475		1,210		2,064		1,304,383		1,306,447		—
Home equity	456		50		445		951		209,452		210,403		—
Consumer	95		1		32		128		19,388		19,516		—
Total	$	1,259	$	768	$	2,658	$	4,685	$	3,426,789	$	3,431,474	$	—

The following table presents the amortized cost basis of loans on non-accrual status (including non-accruing TDRs) by portfolio segment as of the dates indicated:

	September 30, 2022						December 31, 2021
(In thousands)	Non-Accrual Loans With an Allowance		Non-Accrual Loans Without an Allowance		Total Non-Accrual Loans		Non-Accrual Loans With an Allowance		Non-Accrual Loans Without an Allowance		Total Non-Accrual Loans
Commercial real estate - non-owner-occupied	$	15	$	11	$	26	$	38	$	13	$	51
Commercial real estate - owner-occupied	—		47		47		86		47		133
Commercial	201		340		541		785		44		829
Residential real estate	1,203		359		1,562		1,780		327		2,107
Home equity	522		66		588		1,064		111		1,175
Consumer	1		—		1		32		—		32
Total	$	1,942	$	823	$	2,765	$	3,785	$	542	$	4,327

The following table presents the amortized cost basis of collateral-dependent non-accrual loans (including non-accruing TDRs) by portfolio segment and collateral type, as of the dates indicated:

	September 30, 2022						December 31, 2021
	Collateral Type				Total Collateral -Dependent Non-Accrual Loans		Collateral Type				Total Collateral -Dependent Non-Accrual Loans
(In thousands)	Real Estate		General Business Assets				Real Estate		General Business Assets
Residential real estate	$	321	$	—	$	321	$	268	$	—	$	268
Home equity	—		—		—		111		—		111
Total	$	321	$	—	$	321	$	379	$	—	$	379

Collateral-dependent loans are loans for which repayment is expected to be provided substantially by the underlying collateral and there are no other available and reliable sources of repayment.

Interest income that would have been recognized if loans on non-accrual status had been current in accordance with their original terms is estimated to have been $30,000 and $59,000 for the three months ended September 30, 2022 and 2021, respectively. For the nine months ended September 30, 2022 and 2021, the interest income that is estimated to have been recognized if loans on non-accrual status had been current in accordance with their original terms was $115,000 and $202,000, respectively.

The Company's policy is to reverse previously recorded interest income when a loan is placed on non-accrual. As a result, the Company did not record any interest income on its non-accruals for the three or nine months ended September 30, 2022 and 2021. An immaterial amount of accrued interest on non-accrual loans was written-off during the three and nine months ended September 30, 2022 and 2021, by reversing interest income. At September 30, 2022 and December 31, 2021, total accrued interest receivable on loans, which has been excluded from reported amortized cost basis on loans, was $8.9 million and $7.8 million, respectively, and reported within other assets on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date.

TDRs

The Company takes a conservative approach with credit risk management and remains focused on community lending and reinvesting. The Company works closely with borrowers experiencing credit problems to assist in loan repayment or term modifications. TDRs consist of loans where the Company, for economic or legal reasons related to the borrower’s financial difficulties, granted a concession to the borrower that it would not otherwise consider. TDRs typically involve term modifications or a reduction of either interest or principal. Once such an obligation has been restructured, it will remain a TDR until paid in full, or until the loan is again restructured at current market rates and no concessions are granted.

The specific reserve allowance was determined by discounting the total expected future cash flows from the borrower at the original loan interest rate, or if the loan is currently collateral-dependent, using net realizable value, which was obtained through independent appraisals and internal evaluations. The following is a summary of TDRs, by portfolio segment, and the associated specific reserve included within the ACL for the dates indicated:

	Number of Contracts		Recorded Investment				Specific Reserve
(In thousands, except number of contracts)	September 30, 2022	December 31, 2021	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Commercial real estate - owner-occupied	1	1	$	114	$	118	$	48	$	43
Commercial	1	2	58		74		—		—
Residential real estate	18	19	2,254		2,341		321		$	348
Consumer and home equity	3	3	246		253		7		6
Total	23	25	$	2,672	$	2,786	$	376	$	397

At September 30, 2022, the Company had performing and non-performing TDRs with a recorded investment balance of $2.3 million and $387,000, respectively. At December 31, 2021, the Company had performing and non-performing TDRs with a recorded investment balance of $2.4 million and $394,000, respectively.

The following represents loan modifications that qualify as TDRs that occurred during the periods indicated:

	Number of Contracts		Pre-Modification Outstanding Recorded Investment				Post-Modification Outstanding Recorded Investment				Specific Reserve
(In thousands, except number of contracts)	2022	2021	2022		2021		2022		2021		2022		2021
For the Three Months Ended September 30:
Home equity:
Maturity concession	—	1	$	—	$	144	$	—	$	143	$	—	$	6
Total	—	1	$	—	$	144	$	—	$	143	$	—	$	6
For the Nine Months Ended September 30:
Home equity:
Interest rate concession and payment deferral	—	1	$	—	$	159	$	—	$	170	$	—	$	56
Maturity concession	—	1	—		144		—		143		—		6
Total	—	2	$	—	$	303	$	—	$	313	$	—	$	62

As of September 30, 2022 and December 31, 2021, the Company did not have any material commitments to lend additional funds to borrowers with loans classified as TDRs.

For the three and nine months ended September 30, 2022 and 2021, no loans were modified as TDRs within the previous 12 months for which the borrower subsequently defaulted.

In-Process Foreclosure Proceedings

At September 30, 2022 and December 31, 2021, the Company had $542,000 and $888,000, respectively, of consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings were in process.

FHLB Advances

FHLB advances are those borrowings from the FHLBB greater than 90 days. FHLB advances are collateralized by a blanket lien on qualified collateral consisting primarily of loans with first mortgages secured by one- to four-family properties, certain commercial real estate loans, certain pledged investment securities and other qualified assets. The carrying value of residential real estate and commercial loans pledged as collateral was $1.7 billion and $1.4 billion at September 30, 2022 and December 31, 2021, respectively.

Refer to Notes 3 and 6 of the consolidated financial statements for discussion of securities pledged as collateral.

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BORROWINGS

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

BORROWINGS

BORROWINGS

The following summarizes the Company's short-term borrowed funds as presented on the consolidated statements of condition as of the dates indicated. The Company did not have any long-term borrowings as of the dates indicated.

(In thousands)	September 30, 2022		December 31, 2021
Short-Term Borrowings:
Customer repurchase agreements	$	268,876	$	211,608
Overnight borrowings	102,225		—
FHLBB borrowings	50,000		—
Total short-term borrowings	$	421,101	$	211,608

The Company's subordinated debentures were $44.3 million at both September 30, 2022 and December 31, 2021. As of September 30, 2022 and December 31, 2021, the Company's subordinated debentures were comprised of two tranches of junior subordinated debentures. Refer to Note 10 of the consolidated financial statements for further details.

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REPURCHASE AGREEMENTS

9 Months Ended

Sep. 30, 2022

Banking and Thrift, Other Disclosure [Abstract]

REPURCHASE AGREEMENTS

REPURCHASE AGREEMENTS

The Company can raise additional liquidity by entering into repurchase agreements at its discretion. In a security repurchase agreement transaction, the Company will generally sell a security, agreeing to repurchase either the same or a substantially identical security on a specified later date, at a greater price than the original sales price. The difference between the sale price and purchase price is the cost of the proceeds, which is recorded within interest on borrowings on the consolidated statements of income. The securities underlying the agreements are delivered to counterparties as collateral for the repurchase obligations. Because the securities are treated as collateral and the agreement does not qualify for a full transfer of effective control, the transactions do not meet the criteria to be classified as sales, and are therefore considered secured borrowing

transactions for accounting purposes. Payments on such borrowings are interest only until the scheduled repurchase date. In a repurchase agreement the Company is subject to the risk that the purchaser may default at maturity and not return the securities underlying the agreements. In order to minimize this potential risk, the Company either deals with established firms when entering into these transactions, or with customers whose agreements stipulate that the securities underlying the agreement are not delivered to the customer and instead are held in segregated safekeeping accounts by the Company's safekeeping agents.

The table below sets forth information regarding the Company’s repurchase agreements accounted for as secured borrowings and types of collateral as of the dates indicated:

(In thousands)	September 30, 2022		December 31, 2021
Customer Repurchase Agreements(1)(2):
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	$	224,819	$	88,749
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	41,057		120,846
Obligations of states and political subdivisions	3,000		2,013
Total	$	268,876	$	211,608

(1)    Presented within short-term borrowings on the consolidated statements of condition.

(2)    All customer repurchase agreements mature continuously or overnight for the dates indicated.

At September 30, 2022 and December 31, 2021, certain customers held CDs totaling $616,000 and $728,000, respectively, that were collateralized by CMO and MBS securities that were overnight repurchase agreements.

Certain counterparties monitor collateral, and may request additional collateral to be posted from time to time.

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COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Commitments

In the normal course of business, the Company is a party to both on- and off-balance sheet financial instruments involving, to varying degrees, elements of credit risk and interest rate risk in addition to the amounts recognized in the consolidated statements of condition.

The following is a summary of the Company's contractual off-balance sheet commitments as of the dates indicated:

(In thousands)	September 30, 2022		December 31, 2021
Commitments to extend credit	$	876,757	$	834,533
Standby letters of credit	4,689		7,952
Total	$	881,446	$	842,485

The Company’s commitments to extend credit from its lending activities do not necessarily represent future cash requirements since certain of these instruments may expire without being funded and others may not be fully drawn upon.

These commitments are subject to the Company’s credit approval process, including an evaluation of the customer’s creditworthiness and related collateral requirements. Commitments generally have fixed expiration dates or other termination clauses.

Standby letters of credit are conditional commitments issued to guarantee the performance of a borrower to a third party. In the event of nonperformance by the borrower, the Company would be required to fund the commitment and would be entitled to the underlying collateral, if applicable, which generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, and/or real estate. The maximum potential future payments are limited to the contractual amount of the commitment.

The Company establishes an ACL on off-balance sheet credit exposures on its contractual off-balance sheet commitments, except those that are unconditionally cancellable by the Company. As of September 30, 2022 and December 31, 2021, the ACL on off-balance sheet credit exposures was $3.4 million and $3.2 million, respectively. The ACL on off-balance sheet credit exposure was presented within accrued interest and other liabilities on the consolidated statements of condition.

For the three months ended September 30, 2022 and 2021, the provision for credit losses on off-balance sheet credit exposures was $251,000 and $670,000, respectively. For the nine months ended September 30, 2022 and 2021, the provision for credit losses on off-balance sheet credit exposure was $246,000 and $617,000.

Legal Contingencies

In the normal course of business, the Company and its subsidiaries are subject to pending and threatened litigation, claims investigations and legal and administrative cases and proceedings. Although the Company is not able to predict the outcome of such actions, after reviewing pending and threatened actions with counsel, management believes that, based on the information currently available, the outcome of such actions, individually or in the aggregate, will not have a material adverse effect on the Company’s consolidated financial statements.

Reserves are established for legal claims only when losses associated with the claims are judged to be probable, and the loss can be reasonably estimated. Assessments of litigation exposure are difficult because they involve inherently unpredictable factors including, but not limited to: whether the proceeding is in the early stages; whether damages are unspecified, unsupported, or uncertain; whether there is a potential for punitive or other pecuniary damages; whether the matter involves legal uncertainties, including novel issues of law; whether the matter involves multiple parties and/or jurisdictions; whether discovery has begun or is not complete; whether meaningful settlement discussions have commenced; and whether the lawsuit involves class allegations. In many lawsuits and arbitrations, it is not possible to determine whether a liability has been incurred or to estimate the ultimate or minimum amount of that liability until the case is close to resolution, in which case a reserve will not be recognized until that time. Assessments of class action litigation, which is generally more complex than other types of litigation, are particularly difficult, especially in the early stages of the proceeding when it is not known whether a class will be certified or how a potential class, if certified, will be defined. As a result, the Company may be unable to estimate reasonably possible losses with respect to every litigation matter it faces.

The Company did not have any material loss contingencies that were provided for and/or that are required to be disclosed as of September 30, 2022 and December 31, 2021, respectively.

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DERIVATIVES AND HEDGING

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES AND HEDGING

DERIVATIVES AND HEDGINGThe Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s credit derivatives result from loan participation arrangements, and therefore are not used to manage interest rate risk in the Company’s assets or liabilities.

Derivatives Designated as Hedging Instruments - Cash Flow Hedges of Interest Rate Risk

Interest Rate Contracts. The Company’s objectives in using interest rate derivatives are to add stability to interest income and expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed rate payments or the receipt of fixed rate amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. For the three and nine months ended September 30, 2022 and 2021, such derivatives were used to hedge the variable cash flows associated with existing variable-rate assets or liabilities or forecasted issuances of debt.

For derivatives designated, and that qualify as, cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCI and subsequently is reclassified into interest expense or interest income in the same period(s) during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense or interest income as interest payments are made or received on the Company’s variable-rate liabilities or assets. The Company estimates that an additional $2.8 million will be reclassified as a decrease to interest expense and an additional $2.6 million will be reclassified as a decrease to interest income over the next 12 months.

Derivatives not Designated as Hedges

Customer Loan Swaps. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings.

Fixed Rate Mortgage Interest Rate Lock Commitments. As part of the origination process of a residential loan, the Company may enter into rate lock agreements with its borrower, which is considered an interest rate lock commitment. If the Company intends to sell the loan upon origination, it will account for the interest rate lock commitment as a derivative.

Forward Delivery Commitments. The Company typically enters into a forward delivery commitment with a secondary market investor, which has been approved by the Company within its normal governance process, at the onset of the loan origination process. The Company may enter into these arrangements with the secondary market investors on a "best effort" or "mandatory delivery" basis. The Company's normal practice is typically to enter into these arrangements on a "best effort" basis. The Company enters into these arrangements with the secondary market investors to manage its interest rate exposure. The Company accounts for the forward delivery commitment as a derivative upon origination of a loan identified as held for sale.

Risk Participation Agreements. The Company’s existing credit derivatives result from participations in or out of interest rate swaps provided by or to external lenders as part of loan participation arrangements, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain lenders which participate in loans.

The following table presents the fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition as of the dates indicated:

	Derivative Assets					Derivative Liabilities
(In thousands)	Notional Amount		Location	Fair Value		Notional Amount		Location	Fair Value
September 30, 2022
Derivatives designated as hedging instruments:
Interest rate contracts(1)	$	110,000	Other assets	$	13,806	$	133,000	Accrued interest and other liabilities	$	5,459
Total derivatives designated as hedging instruments				$	13,806				$	5,459
Derivatives not designated as hedging instruments:
Customer loan swaps(1)	$	264,758	Other assets	$	16,112	$	264,758	Accrued interest and other liabilities	$	16,134
Risk participation agreements	21,937		Other assets	—		44,741		Accrued interest and other liabilities	—
Fixed rate mortgage interest rate lock commitments	2,400		Other assets	11		12,166		Accrued interest and other liabilities	395
Forward delivery commitments	4,863		Other assets	318		—		Accrued interest and other liabilities	—
Total derivatives not designated as hedging instruments				$	16,441				$	16,529
December 31, 2021
Derivatives designated as hedging instruments:
Interest rate contracts(1)	$	160,000	Other assets	$	5,589	$	83,000	Accrued interest and other liabilities	$	7,872
Total derivatives designated as hedging instruments				$	5,589				$	7,872
Derivatives not designated as hedging instruments:
Customer loan swaps(1)	$	345,545	Other assets	$	19,297	$	345,545	Accrued interest and other liabilities	$	19,485
Risk participation agreements	25,347		Other assets	—		53,704		Accrued interest and other liabilities	—
Fixed rate mortgage interest rate lock commitments	20,437		Other assets	371		8,587		Accrued interest and other liabilities	91
Forward delivery commitments	3,882		Other assets	86		1,903		Accrued interest and other liabilities	6
Total derivatives not designated as hedging instruments				$	19,754				$	19,582

(1)    Reported fair values include accrued interest receivable and payable.

The table below presents the effect of cash flow hedge accounting, before tax, on AOCI for the periods indicated:

(Dollars in thousands)	Amount of Gain (Loss) Recognized in OCI on Derivative		Amount of Gain (Loss) Recognized in OCI Included Component		Amount of Gain (Loss) Recognized in OCI Excluded Component		Location of Gain (Loss) Recognized from AOCI into Income	Amount of Gain (Loss) Reclassified from AOCI into Income		Amount of Gain (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain (Loss) Reclassified from AOCI into Income Excluded Component
Derivatives in Cash Flow Hedge Relationships:
For the Three Months Ended September 30, 2022
Interest rate contracts	$	(1,798)	$	(1,798)	$	—	Interest and fees on loans	$	(121)	$	(121)	$	—
Interest rate contracts	146		146		—		Interest on deposits	189		189		—
Interest rate contracts	2,544		2,544		—		Interest on borrowings	185		185		—
Interest rate contracts	2,489		2,489		—		Interest on subordinated debentures	(133)		(133)		—
Total	$	3,381	$	3,381	$	—		$	120	$	120	$	—
For the Nine Months Ended September 30, 2022
Interest rate contracts	$	(5,713)	$	(5,713)	$	—	Interest and fees on loans	$	498	$	498	$	—
Interest rate contracts	5,867		5,867		—		Interest on deposits	72		72		—
Interest rate contracts	2,544		2,544		—		Interest on borrowings	185		185		—
Interest rate contracts	7,906		7,906		—		Interest on subordinated debentures	(755)		(755)		—
Total	$	10,604	$	10,604	$	—		$	—	$	—	$	—
For the Three Months Ended September 30, 2021
Interest rate contracts	$	48	$	48	$	—	Interest and fees on loans	$	410	$	410	$	—
Interest rate contracts	190		190		—		Interest on deposits	(170)		(170)		—
Interest rate contracts	228		228				Interest on subordinated debentures	(369)		(369)
Total	$	466	$	466	$	—		$	(129)	$	(129)	$	—
For the Nine Months Ended September 30, 2021
Interest rate contracts	$	(688)	$	(688)	$	—	Interest and fees on loans	$	1,205	$	1,205	$	—
Interest rate contracts	2,142		2,142		—		Interest on deposits	(490)		(490)		—
Interest rate contracts	2,201		2,201		—		Interest on subordinated debentures	(1,222)		(1,222)		—
Total	$	3,655	$	3,655	$	—		$	(507)	$	(507)	$	—

The table below presents the effect of cash flow hedge accounting on the consolidated statements of income for the periods indicated:

	Location and Amount of Gain (Loss) Recognized in Income
	Three Months Ended September 30,
	2022								2021
(Dollars in thousands)	Interest and fees on loans		Interest on deposits		Interest on borrowings		Interest on subordinated debentures		Interest and fees on loans		Interest on deposits		Interest on borrowings		Interest on subordinated debentures
Total presented on the consolidated statements of income in which the effects of cash flow hedges are recorded	$	37,568	$	5,442	$	787	$	539	$	31,185	$	1,973	$	122	$	538
Gain (loss) on cash flow hedging relationships
Interest rate contracts:
Amount of gain (loss) reclassified from AOCI into income	$	(121)	$	189	$	185	$	(133)	$	410	$	(170)	$	—	$	(369)
Amount of gain (loss) reclassified from AOCI into income - included component	$	(121)	$	189	$	185	$	(133)	$	410	$	(170)	$	—	$	(369)
Amount of gain (loss) reclassified from AOCI into income - excluded component	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

	Location and Amount of Gain (Loss) Recognized in Income
	Nine Months Ended September 30,
	2022								2021
(Dollars in thousands)	Interest and fees on loans		Interest on deposits		Interest on borrowings		Interest on subordinated debentures		Interest and fees on loans		Interest on deposits		Interest on borrowings		Interest on subordinated debentures
Total presented on the consolidated statements of income in which the effects of cash flow hedges are recorded	$	102,724	$	9,785	$	1,372	$	1,600	$	92,610	$	5,957	$	454	$	1,983
Gain (loss) on cash flow hedging relationships
Interest rate contracts:
Amount of gain (loss) reclassified from AOCI into income	$	498	$	72	$	185	$	(755)	$	1,205	$	(490)	$	—	$	(1,222)
Amount of gain (loss) reclassified from AOCI into income - included component	$	498	$	72	$	185	$	(755)	$	1,205	$	(490)	$	—	$	(1,222)
Amount of gain (loss) reclassified from AOCI into income - excluded component	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

The table below presents the effect of the Company's derivative financial instruments that are not designated as hedging instruments on the consolidated statements of income for the periods indicated:

	Location of Gain (Loss) Recognized in Income	Amount of Gain (Loss) Recognized in Income
		Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)		2022		2021		2022		2021
Customer loan swaps	Other expense	$	28	$	—	$	166	$	—
Fixed rate mortgage interest rate lock commitments	Mortgage banking income, net	(473)		(434)		(664)		22
Forward delivery commitments	Mortgage banking income, net	227		65		238		78
Total		$	(218)	$	(369)	$	(260)	$	100

Credit Risk-Related Contingent Features    

By using derivatives, the Company is exposed to credit risk to the extent that counterparties to the derivative contracts do not perform as required. Should a counterparty fail to perform under the terms of a derivative contract, the Company’s credit exposure on interest rate swaps is limited to the net positive fair value and accrued interest of all swaps with each counterparty. The Company seeks to minimize counterparty credit risk through credit approvals, limits, monitoring procedures, and obtaining collateral, where appropriate. As such, management believes the risk of incurring credit losses on derivative contracts with institutional counterparties is remote.

The Company has agreements with its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. In addition, the Company also has agreements with certain of its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well- capitalized institution, then the counterparty could terminate the derivative position(s) and the Company could be required to settle its obligations under the agreements.

As of September 30, 2022 and December 31, 2021, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for non-performance risk, related to these agreements was $16.1 million and $26.1 million, respectively. As of September 30, 2022 and December 31, 2021, the Company has minimum collateral posting thresholds with certain of its derivative counterparties and has posted cash collateral of $0 and $30.7 million, respectively. If the Company had breached any of these provisions at September 30, 2022 or December 31, 2021, it could have been required to settle its obligations under the agreements at their termination value of $16.1 million and $26.1 million, respectively.

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BALANCE SHEET OFFSETTING

9 Months Ended

Sep. 30, 2022

Offsetting [Abstract]

BALANCE SHEET OFFSETTING

BALANCE SHEET OFFSETTINGThe Company does not offset the carrying value for derivative instruments or repurchase agreements on the consolidated statements of condition. The Company nets the amount recognized for the right to reclaim cash collateral against the obligation to return cash collateral arising from instruments executed with the same counterparty under a master netting arrangement. Collateral legally required to be pledged or received is monitored and adjusted as necessary. Refer to Note 6 for further discussion of repurchase agreements and Note 8 for further discussion of derivative instruments.

The following table presents the Company's derivative positions and repurchase agreements, and the potential effect of netting arrangements on its financial position, as of the dates indicated:

							Gross Amount Not Offset in the Consolidated Statements of Condition
(In thousands)	Gross Amount Recognized in the Consolidated Statements of Condition		Gross Amount Offset in the Consolidated Statements of Condition		Net Amount Presented in the Consolidated Statements of Condition		Financial Instruments Pledged (Received)(1)		Cash Collateral Pledged (Received)(1)		Net Amount
September 30, 2022
Derivative assets:
Customer loan swaps - dealer bank(2)	$	16,112	$	—	$	16,112	$	—	$	—	$	16,112
Interest rate contracts(3)	13,806		—		13,806		—		(11,459)		2,347
Total	$	29,918	$	—	$	29,918	$	—	$	(11,459)	$	18,459
Derivative liabilities:
Customer loan swaps - commercial customer(3)	$	16,134	$	—	$	16,134	$	—	$	—	$	16,134
Interest rate contracts(3)	5,459		—		5,459		—		5,459		—
Total	$	21,593	$	—	$	21,593	$	—	$	5,459	$	16,134
Customer repurchase agreements	$	268,876	$	—	$	268,876	$	268,876	$	—	$	—
December 31, 2021
Derivative assets:
Customer loan swaps - commercial customer(2)	$	19,297	$	—	$	19,297	$	—	$	—	$	19,297
Interest rate contracts(3)	5,589		—		5,589		—		(5,529)		60
Total	$	24,886	$	—	$	24,886	$	—	$	(5,529)	$	19,357
Derivative liabilities:
Customer loan swaps - dealer bank(3)	$	19,485	$	—	19,485		$	—	$	19,485	$	—
Interest rate contracts(3)	7,872		—		7,872		—		6,603		1,269
Total	$	27,357	$	—	$	27,357	$	—	$	26,088	$	1,269
Customer repurchase agreements	$	211,608	$	—	$	211,608	$	211,608	$	—	$	—

(1)    The amount presented was the lesser of the amount pledged (received) or the net amount presented in the consolidated statements of condition.

(2)    Interest rate swap contracts were completed with the same dealer bank. The Company maintains a master netting arrangement with each counterparty and settles collateral on a net basis for all contracts.

(3)    The Company manages its net exposure on its commercial customer loan swaps by obtaining collateral as part of the normal loan policy and underwriting practices.

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REGULATORY CAPITAL REQUIREMENTS

9 Months Ended

Sep. 30, 2022

Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]

REGULATORY CAPITAL REQUIREMENTS

REGULATORY CAPITAL REQUIREMENTS

The Company and Bank are subject to various regulatory capital requirements administered by the FRB and the OCC. Failure to meet minimum capital requirements can result in mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements.

The Company and Bank are required to maintain certain levels of capital based on risk-adjusted assets. These capital requirements represent quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company and Bank's capital classification is also subject to qualitative judgments by our regulators about components, risk weightings and other factors. The quantitative measures established to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios of total capital, Tier 1 capital, and common equity Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets, or the leverage ratio. These requirements apply to the Company on a consolidated basis.

Under the current requirements, banking organizations must have a minimum total risk-based capital ratio of 8.0%, a minimum Tier 1 risk-based capital ratio of 6.0%, a minimum common equity Tier 1 risk-based capital ratio of 4.5%, and a minimum leverage ratio of 4.0% in order to be "adequately capitalized." In addition to these requirements, banking organizations must maintain a capital conservation buffer consisting of common Tier 1 equity in an amount above the minimum

risk-based capital requirements for "adequately capitalized" institutions equal to 2.5% of total risk-weighted assets, resulting in a requirement for the Company and the Bank effectively to maintain common equity Tier 1, Tier 1 and total capital ratios of 7.0%, 8.5% and 10.5%, respectively. The Company and the Bank must maintain the capital conservation buffer to avoid restrictions on the ability to pay dividends, pay discretionary bonuses and to engage in share repurchases based on the amount of the shortfall and the institution's "eligible retained income" (that is, the greater of (i) net income for the preceding four quarters, net of distributions and associated tax effects not reflected in net income and (ii) average net income over the preceding four quarters).

The Company and Bank's risk-based capital ratios exceeded regulatory requirements, including the capital conservation buffer, at September 30, 2022 and December 31, 2021, and the Bank's capital ratios met the requirements for it to be considered "well capitalized" under prompt corrective action provisions for each period. There were no changes to the Company or Bank's capital ratios that occurred subsequent to September 30, 2022 that would change the Company or Bank's regulatory capital categorization. The following table presents the Company and Bank's regulatory capital ratios at the periods indicated:

	September 30, 2022				Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer		Minimum Regulatory Provision to Be "Well Capitalized"		December 31, 2021				Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer		Minimum Regulatory Provision to Be "Well Capitalized"
(Dollars in thousands)	Amount		Ratio						Amount		Ratio
Camden National Corporation:
Total risk-based capital ratio	$	547,244	13.81	%	10.50	%	10.00	%	$	522,714	14.71	%	10.50	%	10.00	%
Tier 1 risk-based capital ratio	507,262		12.81	%	8.50	%	6.00	%	486,263		13.68	%	8.50	%	6.00	%
Common equity Tier 1 risk-based capital ratio(1)	464,262		11.72	%	7.00	%	N/A		443,263		12.47	%	7.00	%	N/A
Tier 1 leverage capital ratio(1)	507,262		9.24	%	4.00	%	N/A		486,263		8.92	%	4.00	%	N/A
Camden National Bank:
Total risk-based capital ratio	$	516,673	13.07	%	10.50	%	10.00	%	$	488,070	13.78	%	10.50	%	10.00	%
Tier 1 risk-based capital ratio	476,691		12.06	%	8.50	%	8.00	%	451,620		12.75	%	8.50	%	8.00	%
Common equity Tier 1 risk-based capital ratio	476,691		12.06	%	7.00	%	6.50	%	451,620		12.75	%	7.00	%	6.50	%
Tier 1 leverage capital ratio	476,691		8.69	%	4.00	%	5.00	%	451,620		8.31	%	4.00	%	5.00	%

(1)    “Minimum Regulatory Provisions to Be ‘Well Capitalized’” are not formally defined under applicable banking regulations for bank holding companies.

In 2006 and 2008, the Company issued $43.0 million of junior subordinated debentures in connection with the issuance of trust preferred securities. Although the junior subordinated debentures are recorded as liabilities on the Company's consolidated statements of condition, the Company is permitted, in accordance with applicable regulation, to include the debentures within its calculation of risk-based capital, subject to certain limits. At September 30, 2022 and December 31, 2021, $43.0 million of the junior subordinated debentures were included in Tier 1 and Tier 2 capital for the Company.

The Company and Bank's regulatory capital and risk-weighted assets fluctuate due to normal business, including profits and losses generated by the Company and Bank as well as changes to their asset mix. Of particular significance are changes within the Company and Bank's loan portfolio mix due to the differences in regulatory risk-weighting between retail and commercial loans. Furthermore, the Company and Bank's regulatory capital and risk-weighted assets are subject to change due to changes in GAAP and regulatory capital standards. The Company and Bank proactively monitor their regulatory capital and risk-weighted assets, and the impact of changes to their asset mix, and the impact of proposed and pending changes as a result of new and/or amended GAAP standards and regulatory changes.

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OTHER COMPREHENSIVE INCOME (LOSS) OTHER COMPREHENSIVE INCOME (LOSS)

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

OTHER COMPREHENSIVE INCOME (LOSS)

OTHER COMPREHENSIVE INCOME (LOSS)

The following tables present a reconciliation of the changes in the components of other comprehensive income and loss for the periods indicated, including the amount of tax (expense) benefit allocated to each component:

	For the Three Months Ended
	September 30, 2022						September 30, 2021
(In thousands)	Pre-Tax Amount		Tax (Expense) Benefit		After-Tax Amount		Pre-Tax Amount		Tax (Expense) Benefit		After-Tax Amount
Debt Securities:
Change in fair value	$	(28,432)	$	6,113	$	(22,319)	$	(6,546)	$	1,407	$	(5,139)
Less: reclassification adjustment for amortization of securities transferred from AFS to HTM(1)	2,436		(524)		1,912		—		—		—
Net change in fair value	(30,868)		6,637		(24,231)		(6,546)		1,407		(5,139)
Cash Flow Hedges:
Change in fair value	3,381		(727)		2,654		466		(100)		366
Less: reclassified AOCI loss into interest expense(2)	241		(52)		189		(539)		116		(423)
Less: reclassified AOCI gain into interest income(3)	(121)		26		(95)		410		(88)		322
Net change in fair value	3,261		(701)		2,560		595		(128)		467
Postretirement Plans:
Amortization of settlement recognition of net loss and prior service credit(4)	230		(49)		181		217		(46)		171
Other comprehensive loss	$	(27,377)	$	5,887	$	(21,490)	$	(5,734)	$	1,233	$	(4,501)

(1) Reclassified into taxable interest on investments and/or nontaxable interest on investments in the consolidated statements of income. Refer to Note 3 of the consolidated financial statements for further details.

(2) Reclassified into interest on deposits, borrowings and/or subordinated debentures on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.

(3)    Reclassified into interest and fees on loans on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.

(4)    Reclassified into other expenses on the consolidated statements of income. Refer to Note 13 of the consolidated financial statements for further details.

	For the Nine Months Ended
	September 30, 2022						September 30, 2021
(In thousands)	Pre-Tax Amount		Tax (Expense) Benefit		After-Tax Amount		Pre-Tax Amount		Tax (Expense) Benefit		After-Tax Amount
Debt Securities:
Change in fair value	$	(173,421)	$	37,286	$	(136,135)	$	(25,926)	$	5,574	$	(20,352)
Less: reclassification adjustment for amortization of securities transferred from AFS to HTM(1)	3,780		(813)		2,967		—		—		—
Less: reclassification adjustment for net realized losses(2)	(9)		2		(7)		—		—		—
Net change in fair value	(177,192)		38,097		(139,095)		(25,926)		5,574		(20,352)
Cash Flow Hedges:
Change in fair value	10,604		(2,280)		8,324		3,655		(785)		2,870
Less: reclassified AOCI loss into interest expense(3)	(498)		107		(391)		(1,712)		368		(1,344)
Less: reclassified AOCI gain into interest income(4)	498		(107)		391		1,205		(258)		947
Net change in fair value	10,604		(2,280)		8,324		4,162		(895)		3,267
Postretirement Plans:
Amortization of settlement recognition of net loss and prior service credit(5)	693		(149)		544		652		(140)		512
Other comprehensive loss	$	(165,895)	$	35,668	$	(130,227)	$	(21,112)	$	4,539	$	(16,573)

(1) Reclassified into taxable interest on investments and/or nontaxable interest on investments in the consolidated statements of income. Refer to Note 3 of the consolidated financial statements for further details.

(2)    Reclassified into net loss on sale of securities in the consolidated statements of income. Refer to Note 3 of the consolidated financial statements for further details.

(3) Reclassified into interest on deposits, borrowings and/or subordinated debentures on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.

(4)    Reclassified into interest and fees on loans on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.

(5)    Reclassified into other expenses on the consolidated statements of income. Refer to Note 13 of the consolidated financial statements for further details.

The following table presents the changes in each component of AOCI, after tax, for the periods indicated:

(In thousands)	Net Unrealized Gains (Losses) on Debt Securities		Net Unrealized Losses (Gains) on Cash Flow Hedges		Defined Benefit Postretirement Plans		AOCI
At or For the Three Months Ended September 30, 2022
Balance at June 30, 2022	$	(116,037)	$	3,985	$	(2,914)	$	(114,966)
Other comprehensive (loss) income before reclassifications	(22,319)		2,654		—		(19,665)
Less: Amounts reclassified from AOCI	1,912		94		(181)		1,825
Other comprehensive (loss) income	(24,231)		2,560		181		(21,490)
Balance at September 30, 2022	$	(140,268)	$	6,545	$	(2,733)	$	(136,456)
At or For the Nine Months Ended September 30, 2022
Balance at December 31, 2021	$	(1,173)	$	(1,779)	$	(3,277)	$	(6,229)
Other comprehensive (loss) income before reclassifications	(136,135)		8,324		—		(127,811)
Less: Amounts reclassified from AOCI	2,960		—		(544)		2,416
Other comprehensive (loss) income	(139,095)		8,324		544		(130,227)
Balance at September 30, 2022	$	(140,268)	$	6,545	$	(2,733)	$	(136,456)
At or For the Three Months Ended September 30, 2021
Balance at June 30, 2021	$	14,097	$	(1,826)	$	(3,603)	$	8,668
Other comprehensive (loss) income before reclassifications	(5,139)		366		—		(4,773)
Less: Amounts reclassified from AOCI	—		(101)		(171)		(272)
Other comprehensive (loss) income	(5,139)		467		171		(4,501)
Balance at September 30, 2021	$	8,958	$	(1,359)	$	(3,432)	$	4,167
At or For the Nine Months Ended September 30, 2021
Balance at December 31, 2020	$	29,310	$	(4,626)	$	(3,944)	$	20,740
Other comprehensive (loss) income before reclassifications	(20,352)		2,870		—		(17,482)
Less: Amounts reclassified from AOCI	—		(397)		(512)		(909)
Other comprehensive (loss) income	(20,352)		3,267		512		(16,573)
Balance at September 30, 2021	$	8,958	$	(1,359)	$	(3,432)	$	4,167

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REVENUE FROM CONTRACTS WITH CUSTOMERS REVENUE FROM CONTRACS WITH CUSTOMERS

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

REVENUE FROM CONTRACTS WITH CUSTOMERSA portion of the Company's non-interest income is derived from contracts with customers, and, as such, the revenue recognized depicts the transfer of promised goods or services to its customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company considers the terms of the contract and all relevant facts and circumstances when applying this guidance.

The Company has disaggregated its revenue from contracts with customers into categories based on the nature of the revenue. The categorization of revenues from contracts with customers that are within the scope of ASC 606 closely aligns with the presentation of revenue categories presented within non-interest income on the consolidated statements of income. The following table presents the revenue streams within the scope of ASC 606 for the periods indicated:

	Location on Consolidated Statements of Income	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)		2022		2021		2022		2021
Debit card interchange income	Debit card income	$	3,234	$	3,278	$	9,371	$	9,126
Services charges on deposit accounts	Service charges on deposit accounts	1,941		1,744		5,705		4,800
Fiduciary services income	Income from fiduciary services	1,535		1,627		4,847		4,860
Investment program income	Brokerage and insurance commissions	1,003		993		3,269		2,885
Other non-interest income	Other income	509		521		1,360		1,368
Total non-interest income within the scope of ASC 606		8,222		8,163		24,552		23,039
Total non-interest income not in scope of ASC 606		1,732		2,936		6,368		14,595
Total non-interest income		$	9,954	$	11,099	$	30,920	$	37,634

In each of the revenue streams identified above, there were no significant judgments made in determining or allocating the transaction price, as the consideration and services are generally explicitly identified in the associated contracts.

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EMPLOYEE BENEFIT PLANS

9 Months Ended

Sep. 30, 2022

Retirement Benefits [Abstract]

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS

The Company sponsors unfunded, non-qualified SERPs for certain officers and provides medical and life insurance to certain eligible retired employees.

The components of net periodic pension and postretirement benefit cost were as follow for the following periods:

Supplemental Executive Retirement Plan:

(In thousands)	Location on Consolidated Statements of Income	Three Months Ended September 30,				Nine Months Ended September 30,
Net periodic pension cost		2022		2021		2022		2021
Service cost	Salaries and employee benefits	$	133	$	126	$	400	$	378
Interest cost	Other expenses	115		97		345		292
Recognized net actuarial loss	Other expenses	214		194		645		583
Total		$	462	$	417	$	1,390	$	1,253

Other Postretirement Benefit Plan:

(In thousands)	Location on Consolidated Statements of Income	Three Months Ended September 30,				Nine Months Ended September 30,
Net periodic postretirement benefit cost		2022		2021		2022		2021
Service cost	Salaries and employee benefits	$	5	$	7	$	15	$	20
Interest cost	Other expenses	28		26		84		77
Recognized net actuarial loss	Other expenses	22		29		66		87
Amortization of prior service credit	Other expenses	(6)		(6)		(18)		(18)
Total		$	49	$	56	$	147	$	166

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EPS

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

EPS

EPS

The following is an analysis of basic and diluted EPS, reflecting the application of the two-class method, as described below:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except number of shares and per share data)	2022		2021		2022		2021
Net income	$	14,267	$	14,640	$	46,088	$	52,523
Dividends and undistributed earnings allocated to participating securities(1)	(39)		(40)		(121)		(145)
Net income available to common shareholders	$	14,228	$	14,600	$	45,967	$	52,378
Weighted-average common shares outstanding for basic EPS	14,619,460		14,931,056		14,670,450		14,930,387
Dilutive effect of stock-based awards(2)	55,872		67,957		57,899		66,154
Weighted-average common and potential common shares for diluted EPS	14,675,332		14,999,013		14,728,349		14,996,541
Earnings per common share:
Basic EPS	$	0.97	$	0.98	$	3.13	$	3.51
Diluted EPS	$	0.97	$	0.97	$	3.12	$	3.49
Awards excluded from the calculation of diluted EPS(3):
Performance-based awards	3,903		3,382		—		—

(1)    Represents dividends paid and undistributed earnings allocated to non-vested stock-based awards that contain non-forfeitable rights to dividends.

(2)    Represents the assumed dilutive effect of unexercised and/or unvested stock options, restricted shares, restricted share units and contingently issuable performance-based awards utilizing the treasury stock method.

(3)    Represents stock-based awards not included in the computation of potential common shares for purposes of calculating diluted EPS as the exercise prices were greater than the average market price of the Company's common stock, and, therefore, are considered anti-dilutive.

Non-vested stock-based payment awards that contain non-forfeitable rights to dividends are participating securities and are included in the computation of EPS pursuant to the two-class method. The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Certain of the Company’s non-vested stock-based awards qualify as participating securities. 

Net income is allocated between the common stock and participating securities pursuant to the two-class method. Basic EPS is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period, excluding participating non-vested stock-based awards. Diluted EPS is computed in a similar manner, except that the denominator includes the number of additional common shares that would have been outstanding if potentially dilutive common shares were issued using the treasury stock method.

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FAIR VALUE MEASUREMENT AND DISCLOSURE

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENT AND DISCLOSURE

FAIR VALUE MEASUREMENT AND DISCLOSURE

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined using quoted market prices. However, in many instances, quoted market prices are not available. In such instances, fair values are determined using various valuation techniques. Various assumptions and observable inputs must be relied upon in applying these techniques. GAAP establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

GAAP permits an entity to choose to measure eligible financial instruments and other items at fair value. The Company has elected the fair value option for its loans held for sale. Electing the fair value option for loans held for sale enables the Company’s financial position to align more clearly with the economic value of the actively traded asset.

The fair value hierarchy for valuation of an asset or liability is as follows:

Level 1:   Valuation is based upon unadjusted quoted prices in active markets for identical assets and liabilities that the entity has the ability to access as of the measurement date.

Level 2:   Valuation is determined from quoted prices for similar assets or liabilities in active markets, from quoted prices for identical or similar instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market.

Level 3:   Valuation is derived from model-based and other techniques in which at least one significant input is unobservable and which may be based on the Company’s own estimates about the assumptions that market participants would use to value the asset or liability.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon model-based techniques incorporating various assumptions including interest rates, prepayment speeds and credit losses. Assets and liabilities valued using model-based techniques are classified as either Level 2 or Level 3, depending on the lowest level classification of an input that is considered significant to the overall valuation. A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

Financial Instruments Recorded at Fair Value on a Recurring Basis

Trading Securities and Deferred Compensation: The fair value of trading securities and deferred compensation is reported using market quoted prices and has been classified as Level 1 as such securities and underlying securities are actively traded and no valuation adjustments have been applied.

Debt Securities:  The fair value of investments in debt securities is reported utilizing prices provided by an independent pricing service based on recent trading activity and other observable information including, but not limited to, dealer quotes, market spreads, cash flows, market interest rate curves, market consensus prepayment speeds, credit information, and the bond’s terms and conditions. The fair value of debt securities is classified as Level 2.

Loans Held For Sale: The fair value of loans held for sale is determined on an individual loan basis using quoted secondary market prices and is classified as Level 2.

Derivatives:  The fair value of interest rate swaps is determined using inputs that are observable in the market place obtained from third parties including yield curves, publicly available volatilities, and floating indexes and, accordingly, are classified as Level 2 inputs. The credit value adjustments associated with derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default. As of September 30, 2022 and December 31, 2021, the credit valuation adjustment on the overall valuation of its derivative positions and was not significant to the overall valuation of its derivatives, and, thus, the Company's interest rate swaps were classified as Level 2.

The fair value of the Company's fixed rate interest rate lock commitments were determined using secondary market pricing for loans with similar structures, including term, rate and borrower credit quality, adjusted for the Company's pull-through rate estimate (i.e. estimate of loans within its loan pipeline that will ultimately complete the origination process and be funded). The Company has classified its fixed rate interest rate lock commitments as Level 2, as the quoted secondary market prices are the more significant input, and, although the Company's internal pull-through rate estimate is a Level 3 estimate, it is less significant to the ultimate valuation.

The fair value of the Company's forward delivery commitments is determined using secondary market pricing for loans with similar structures, including term, rate and borrower credit quality, and the locked and agreed to price with the secondary market investor. The Company has classified its fixed rate interest rate lock commitments as Level 2.

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, for the dates indicated:

(In thousands)	Fair Value		Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)
September 30, 2022
Financial assets:
Trading securities	$	3,727	$	3,727	$	—	$	—
AFS debt securities:
Obligations of states and political subdivisions	51,474		—		51,474		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	529,788		—		529,788		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	121,811		—		121,811		—
Subordinated corporate bonds	20,545		—		20,545		—
Loans held for sale	4,629		—		4,629		—
Customer loan swaps	16,112		—		16,112		—
Interest rate contracts	13,806		—		13,806		—
Fixed rate mortgage interest rate lock commitments	11		—		11		—
Forward delivery commitments	318		—		318		—
Financial liabilities:
Deferred compensation	$	3,727	$	3,727	$	—	$	—
Customer loan swaps	16,134		—		16,134		—
Interest rate contracts	5,459		—		5,459		—
Fixed rate mortgage interest rate lock commitments	395		—		395		—
December 31, 2021
Financial assets:
Trading securities	$	4,428	$	4,428	$	—	$	—
AFS debt securities:
Obligations of U.S. government-sponsored enterprises	8,344		—		8,344		—
Obligations of states and political subdivisions	117,478		—		117,478		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	1,000,257		—		1,000,257		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	358,849		—		358,849		—
Subordinated corporate bonds	22,558		—		22,558		—
Loans held for sale	5,815		—		5,815		—
Customer loan swaps	19,297		—		19,297		—
Interest rate contracts	5,589		—		5,589		—
Fixed rate mortgage interest rate lock commitments	371		—		371		—
Forward delivery commitments	86		—		86		—
Financial liabilities:
Deferred compensation	$	4,428	$	4,428	$	—	$	—
Customer loan swaps	19,485		—		19,485		—
Interest rate contracts	7,872		—		7,872		—
Fixed rate mortgage interest rate lock commitments	91		—		91		—
Forward delivery commitments	6		—		6		—

 The Company did not have any transfers between Level 1 and Level 2 of the fair value hierarchy during the nine months ended September 30, 2022. The Company’s policy for determining transfers between levels occurs at the end of the reporting period when circumstances in the underlying valuation criteria change and result in transfer between levels.

Financial Instruments Recorded at Fair Value on a Nonrecurring Basis

The Company may be required, from time to time, to measure certain financial assets and financial liabilities at fair value on a nonrecurring basis in accordance with GAAP. These include assets that are measured at the lower of cost or market value that were recognized at fair value below cost at the end of the period.

Collateral-Dependent Loans:  Expected credit losses on individually assessed loans deemed to be collateral dependent are valued based upon the lower of amortized cost or fair value of the underlying collateral less costs to sell. Management estimates the fair values of these assets using Level 2 inputs, such as the fair value of collateral based on independent third-party market approach appraisals for collateral-dependent loans, and Level 3 inputs where circumstances warrant an adjustment to the appraised value based on the age of the appraisal and/or comparable sales, condition of the collateral, and market conditions.

Servicing Assets:  The Company accounts for mortgage servicing assets at cost, subject to impairment testing. When the carrying value of a tranche exceeds fair value, a valuation allowance is established to reduce the carrying cost to fair value. Fair value is based on a valuation model that calculates the present value of estimated net servicing income. The Company obtains a third-party valuation based upon loan level data including note rate, type and term of the underlying loans. The model utilizes two significant unobservable inputs, namely loan prepayment assumptions and the discount rate used, to calculate the fair value of each tranche, and, as such, the Company has classified the model within Level 3 of the fair value hierarchy.

Non-Financial Instruments Recorded at Fair Value on a Non-Recurring Basis

The Company has no non-financial assets or non-financial liabilities measured at fair value on a recurring basis. Non-financial assets measured at fair value on a non-recurring basis consist of OREO, goodwill and core deposit intangible assets. 

OREO: OREO properties acquired through foreclosure or deed in lieu of foreclosure are recorded at net realizable value, which is the fair value of the real estate, less estimated costs to sell. Any write-down of the recorded investment in the related loan is charged to the ACL upon transfer to OREO. Upon acquisition of a property, a current appraisal is used or an internal valuation is prepared to substantiate fair value of the property. After foreclosure, management periodically, but at least annually, obtains updated valuations of the OREO properties and, if additional impairments are deemed necessary, the subsequent write-downs for declines in value are recorded through a valuation allowance and a provision for credit losses charged to other non-interest expense within the consolidated statements of income. As management considers appropriate, adjustments are made to the appraisal obtained for the OREO property to account for recent sales activity of comparable properties, changes in the condition of the property, and changes in market conditions. These adjustments are not observable in an active market and are classified as Level 3. At September 30, 2022 and December 31, 2021, the Company did not have any OREO properties.

Goodwill: Goodwill represents the excess cost of an acquisition over the fair value of the net assets acquired. The fair value of goodwill is estimated by utilizing several standard valuation techniques, including discounted cash flow analyses, bank merger multiples, and/or an estimation of the impact of business conditions and investor activities on the long-term value of the goodwill. Should an impairment occur, the associated goodwill is written-down to fair value and the impairment charge is recorded within non-interest expense in the consolidated statements of income. The Company conducts an annual impairment test of goodwill in the fourth quarter each year, or more frequently as necessary. There have been no indications or triggering events during the nine months ended September 30, 2022, for which management believes it is more likely than not that goodwill is impaired.

Core Deposit Intangible Assets: The Company's core deposit intangible assets represent the estimated value of acquired customer relationships and are amortized over the estimated life of those relationships. Core deposit intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. There were no events or changes in circumstances for the nine months ended September 30, 2022, that indicated the carrying amount may not be recoverable.

The table below highlights financial and non-financial assets measured and recorded at fair value on a non-recurring basis for the dates indicated:

(In thousands)	Fair Value		Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)
September 30, 2022
Financial assets:
Collateral-dependent loans	$	69	$	—	$	—	$	69
December 31, 2021
Financial assets:
Collateral-dependent loans	$	73	$	—	$	—	$	73

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis for the dates indicated:

(Dollars in thousands)	Fair Value		Valuation Methodology	Unobservable Input	Discount
September 30, 2022
Collateral-dependent loans:
Partially charged-off	$	69	Market approach appraisal of    collateral	Estimated selling costs	18%
December 31, 2021
Collateral-dependent loans
Specifically reserved	$	73	Market approach appraisal of collateral	Estimated selling costs	11%

The estimated fair values and related carrying amounts for assets and liabilities for which fair value is only disclosed are shown below as of the dates indicated:

	Carrying Amount		Fair Value		Readily Available Market Prices (Level 1)		Observable Market Prices (Level 2)		Company Determined Market Prices (Level 3)
September 30, 2022
Financial assets:
HTM debt securities	$	534,309	$	491,759	$	—	$	491,759	$	—
Commercial real estate loans(1)(2)	1,543,107		1,517,911		—		—		1,517,911
Commercial loans(2)	418,110		412,670		—		—		412,670
SBA PPP loans(2)	684		704		—		—		704
Residential real estate loans(2)	1,610,324		1,424,504		—		—		1,424,504
Home equity loans(2)	231,507		238,723		—		—		238,723
Consumer loans(2)	20,406		18,277		—		—		18,277
Servicing assets	2,470		4,466		—		—		4,466
Financial liabilities:
Time deposits	$	279,603	$	270,794	$	—	$	270,794	$	—
Short-term borrowings	421,101		420,608		—		420,608		—
Subordinated debentures	44,331		31,918		—		31,918		—
December 31, 2021
Financial assets:
HTM debt securities	$	1,291	$	1,380	$	—	$	1,380	$	—
Commercial real estate loans(1)(2)	1,474,087		1,435,794		—		—		1,435,794
Commercial loans(2)	359,512		356,463		—		—		356,463
SBA PPP loans(2)	35,934		37,133		—		—		37,133
Residential real estate loans(2)	1,300,314		1,297,592		—		—		1,297,592
Home equity loans(2)	208,934		205,920		—		—		208,934
Consumer loans(2)	19,437		17,551		—		—		17,551
Servicing assets	2,471		3,310		—		—		3,310
Financial liabilities:
Time deposits	$	409,668	$	409,264	$	—	$	409,264	$	—
Short-term borrowings	211,608		211,586		—		211,586		—
Subordinated debentures	44,331		33,248		—		33,248		—

(1)    Commercial real estate loan includes non-owner-occupied and owner-occupied properties.

(2)    The presented carrying amount is net of the allocated ACL on loans.

Excluded from the summary were financial instruments measured at fair value on a recurring and nonrecurring basis, as previously described.

The Company considers its financial instruments' current use to be the highest and best use of the instruments.

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RECENT ACCOUNTING PRONOUNCEMENTS (Policies)

9 Months Ended

Sep. 30, 2022

Accounting Standards Update and Change in Accounting Principle [Abstract]

Accounting Standards Adopted in 2021

The following provides a brief description of recently issued accounting pronouncements that have yet to be adopted by the Company:

ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02"). The FASB issued ASU 2022-02 to provide new guidance on TDRs and write-offs for entities that have adopted ASU 2016-13. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the effect of ASU 2022-02 on its consolidated financial statements and does not anticipate a material impact upon adoption.

ASU No. 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method ("ASU 2022-01"). The FASB issued ASU 2022-01 to amend ASU 2017-12, which was adopted by the Company in 2018. This amendment renames the "last-of-layer" method to the "portfolio layer" method, permits non-repayable financial assets to be included in a closed portfolio hedged using the portfolio layer method, and provides additional guidance for entities that apply the portfolio layer method of hedge accounting in accordance with Topic 815. The amendment is effective for fiscal years beginning after December 15, 2022. The Company is currently evaluating the amendment and does not anticipate a material impact on its consolidated financial statements upon adoption of this guidance.

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INVESTMENTS (Tables)

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Summary of Amortized Costs and Estimated Fair Values of Available-For-Sale Securities

The following table summarizes the amortized cost, estimated fair value, and unrealized gains (losses) of AFS debt securities, as of the dates indicated:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
September 30, 2022
Obligations of states and political subdivisions	$	53,247	$	1	$	(1,774)	$	51,474
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	622,660		65		(92,937)		529,788
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	134,872		—		(13,061)		121,811
Subordinated corporate bonds	23,109		—		(2,564)		20,545
Total AFS debt securities	$	833,888	$	66	$	(110,336)	$	723,618
December 31, 2021
Obligations of U.S. government-sponsored enterprises	$	8,585	$	—	$	(241)	$	8,344
Obligations of states and political subdivisions	112,086		5,392		—		117,478
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	1,003,869		7,856		(11,468)		1,000,257
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	361,781		2,835		(5,767)		358,849
Subordinated corporate bonds	22,660		152		(254)		22,558
Total AFS debt securities	$	1,508,981	$	16,235	$	(17,730)	$	1,507,486

The following table summarizes the Company's investment in FHLBB stock and FRBB stock as presented within other investments on the consolidated statements of condition, as of the dates indicated:

(In thousands)	September 30, 2022		December 31, 2021
FHLBB	$	9,734	$	4,906
FRB	5,374		5,374
Total other investments	$	15,108	$	10,280

Company's Sales of Securities

The following table details the Company's sales of AFS debt securities for the periods indicated below:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Proceeds from sales of investments	$	—	$	—	$	8,723	$	—
Gross realized gains	—		—		13		—
Gross realized losses	—		—		(22)		—

Unrealized Gross Losses and Estimated Fair Values of Investment Securities by Length of Time that Individual Securities in Each Category in Continuous Loss Position

The following table presents the Company's AFS debt securities with gross unrealized losses, for which an ACL has not been recorded, segregated by the length of time the securities have been in a continuous loss position, as of the dates indicated:  

		Less Than 12 Months				12 Months or More				Total
(In thousands, except number of holdings)	Number of Holdings	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2022
Obligations of states and political subdivisions	101	$	51,026	$	(1,774)	$	—	$	—	$	51,026	$	(1,774)
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	172	203,082		(24,432)		322,251		(68,505)		525,333		(92,937)
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	76	83,532		(7,433)		38,279		(5,628)		121,811		(13,061)
Subordinated corporate bonds	13	9,071		(910)		11,474		(1,654)		20,545		(2,564)
Total AFS debt securities	362	$	346,711	$	(34,549)	$	372,004	$	(75,787)	$	718,715	$	(110,336)
December 31, 2021
Obligations of U.S. government-sponsored enterprises	4	$	8,344	$	(241)	$	—	$	—	$	8,344	$	(241)
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	113	659,851		(8,999)		61,978		(2,469)		721,829		(11,468)
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	56	191,456		(4,602)		38,117		(1,165)		229,573		(5,767)
Subordinated corporate bonds	7	11,932		(232)		979		(22)		12,911		(254)
Total AFS debt securities	180	$	871,583	$	(14,074)	$	101,074	$	(3,656)	$	972,657	$	(17,730)

Contractual Obligation, Fiscal Year Maturity

The amortized cost and estimated fair values of the Company's AFS debt securities by contractual maturity at September 30, 2022, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-related securities are shown in total, as their maturities are highly variable.

(In thousands)	Amortized Cost		Fair Value
Due in one year or less	$	501	$	500
Due after one year through five years	15,785		14,033
Due after five years through ten years	60,070		57,486
Due after ten years	—		—
Subtotal	76,356		72,019
Mortgage-related securities	757,532		651,599
Total	$	833,888	$	723,618

Debt Securities, Held-to-maturity

The following table summarizes the amortized cost, estimated fair value and unrealized gains (losses) of HTM debt securities as of the dates indicated:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
September 30, 2022
Obligations of U.S. government-sponsored enterprises	$	7,422	$	—	$	(664)	$	6,758
Obligations of states and political subdivisions	55,908		—		(3,595)		52,313
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	320,850		—		(27,067)		293,783
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	147,753		—		(10,990)		136,763
Subordinated corporate bonds	2,376		—		(234)		2,142
Total HTM debt securities	$	534,309	$	—	$	(42,550)	$	491,759
December 31, 2021
Obligations of states and political subdivisions	$	1,291	$	89	$	—	$	1,380
Total HTM debt securities	$	1,291	$	89	$	—	$	1,380

Amortized Cost and Estimated Fair Values of Debt Securities by Contractual Maturity

The amortized cost and estimated fair values of HTM debt securities by contractual maturity at September 30, 2022 are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(In thousands)	Amortized Cost		Fair Value
Due in one year or less	$	—	$	—
Due after one year through five years	864		845
Due after five years through ten years	14,562		13,538
Due after ten years	50,280		46,830
Subtotal	65,706		61,213
Mortgage-related securities	468,603		430,546
Total	$	534,309	$	491,759

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LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Tables)

9 Months Ended

Sep. 30, 2022

Loans and Leases Receivable Disclosure [Abstract]

Composition of Loan Portfolio, Excluding Residential Loans Held for Sale

The composition of the Company’s loan portfolio, excluding residential loans held for sale, was as follows for the dates indicated:

(In thousands)	September 30, 2022		December 31, 2021
Commercial Loans:
Commercial real estate - non-owner-occupied	$	1,229,102	$	1,178,185
Commercial real estate - owner-occupied	333,785		317,275
Commercial	423,325		363,695
SBA PPP	685		35,953
Total commercial loans	1,986,897		1,895,108
Retail Loans:
Residential real estate	1,619,409		1,306,447
Home equity	233,367		210,403
Consumer	21,007		19,516
Total retail loans	1,873,783		1,536,366
Total loans	$	3,860,680	$	3,431,474

Schedule of Loan Balances by Portfolio Segment

The loan balances for each portfolio segment presented above are net of their respective unamortized fair value mark discount on acquired loans and net of unamortized loan origination costs for the dates indicated:

(In thousands)	September 30, 2022		December 31, 2021
Net unamortized fair value mark discount on acquired loans	$	(396)	$	(593)
Net unamortized loan origination costs(1)	6,429		3,110
Total	$	6,033	$	2,517

(1)    Net unamortized loan origination costs includes unrecognized origination fees for SBA PPP loans of $20,000 and $1.2 million as of September 30, 2022 and December 31, 2021, respectively.

Summary of Activity in Allowance for Loan Losses

The following table presents the activity in the ACL on loans, as reported under CECL, for the periods indicated:

	Commercial Real Estate
(In thousands)	Non-Owner-Occupied		Owner- Occupied		Commercial		SBA PPP		Residential Real Estate		Home Equity		Consumer		Total
At or For The Three Months Ended September 30, 2022
Beginning balance, June 30, 2022	$	16,210	$	2,501	$	5,145	$	1	$	8,438	$	1,796	$	153	$	34,244
Loans charged off	—		—		(183)		—		(49)		—		(46)		(278)
Recoveries	1		—		61		—		—		1		—		63
Provision for loan losses	922		146		192		—		696		63		494		2,513
Ending balance, September 30, 2022	$	17,133	$	2,647	$	5,215	$	1	$	9,085	$	1,860	$	601	$	36,542
At or For The Nine Months Ended September 30, 2022
Beginning balance, December 31, 2021	$	18,834	$	2,539	$	4,183	$	19	$	6,133	$	1,469	$	79	$	33,256
Loans charged off	—		—		(744)		—		(65)		—		(130)		(939)
Recoveries	2		2		341		—		—		87		5		437
(Credit) provision for loan losses	(1,703)		106		1,435		(18)		3,017		304		647		3,788
Ending balance, September 30, 2022	$	17,133	$	2,647	$	5,215	$	1	$	9,085	$	1,860	$	601	$	36,542
At or For The Three Months Ended September 30, 2021
Beginning balance, June 30, 2021	$	19,577	$	2,516	$	4,342	$	66	$	3,205	$	2,065	$	289	$	32,060
Loans charged off	—		—		(97)		—		(4)		—		(20)		(121)
Recoveries	—		2		49		—		2		4		7		64
Provision (credit) for loan losses	157		(214)		295		(23)		450		(231)		(165)		269
Ending balance, September 30, 2021	$	19,734	$	2,304	$	4,589	$	43	$	3,653	$	1,838	$	111	$	32,272
At or For The Nine Months Ended September 30, 2021
Beginning balance, December 31, 2020	$	21,778	$	2,832	$	6,703	$	69	$	3,474	$	2,616	$	393	$	37,865
Loans charged off	—		—		(503)		—		(92)		(145)		(88)		(828)
Recoveries	—		7		159		—		72		4		30		272
(Credit) provision for loan losses	(2,044)		(535)		(1,770)		(26)		199		(637)		(224)		(5,037)
Ending balance, September 30, 2021	$	19,734	$	2,304	$	4,589	$	43	$	3,653	$	1,838	$	111	$	32,272
At or For The Year Ended December 31, 2021
Beginning balance, December 31, 2020	$	21,778	$	2,832	$	6,703	$	69	$	3,474	$	2,616	$	393	$	37,865
Loans charged off	—		—		(799)		—		(92)		(162)		(111)		(1,164)
Recoveries	—		9		220		—		107		4		32		372
(Credit) provision for loan losses	(2,944)		(302)		(1,941)		(50)		2,644		(989)		(235)		(3,817)
Ending balance, December 31, 2021	$	18,834	$	2,539	$	4,183	$	19	$	6,133	$	1,469	$	79	$	33,256

Credit Risk Exposure Indicators by Portfolio Segment

Based on the most recent analysis performed, the risk category of loans by portfolio segment by vintage was as follows as of the dates indicated:

(In thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of September 30, 2022
Commercial real estate - non-owner-occupied
Risk rating
Pass (Grades 1-6)	$	261,937	$	275,295	$	164,434	$	126,764	$	111,150	$	259,205	$	—	$	—	$	1,198,785
Special mention (Grade 7)	—		168		368		266		78		327		—		—		1,207
Substandard (Grade 8)	—		131		1,356		207		7,998		19,418		—		—		29,110
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - non-owner-occupied	261,937		275,594		166,158		127,237		119,226		278,950		—		—		1,229,102
Commercial real estate - owner-occupied
Risk rating
Pass (Grades 1-6)	52,250		82,599		28,982		24,000		40,311		75,807		—		—		303,949
Special mention (Grade 7)	—		2,076		—		19,991		—		422		—		—		22,489
Substandard (Grade 8)	26		—		—		—		3,299		4,022		—		—		7,347
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - owner occupied	52,276		84,675		28,982		43,991		43,610		80,251		—		—		333,785
Commercial
Risk rating
Pass (Grades 1-6)	57,184		73,885		35,048		35,969		23,346		28,931		132,833		29,911		417,107
Special mention (Grade 7)	—		—		99		154		83		200		1,089		14		1,639
Substandard (Grade 8)	17		19		139		238		725		1,598		1,211		632		4,579
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial	57,201		73,904		35,286		36,361		24,154		30,729		135,133		30,557		423,325
SBA PPP
Risk rating
Pass (Grades 1-6)	—		685		—		—		—		—		—		—		685
Special mention (Grade 7)	—		—		—		—		—		—		—		—		—
Substandard (Grade 8)	—		—		—		—		—		—		—		—		—
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total SBA PPP	—		685		—		—		—		—		—		—		685
Residential Real Estate
Risk rating
Pass (Grades 1-6)	429,072		584,538		248,329		81,522		52,447		220,335		334		—		1,616,577
Special mention (Grade 7)	—		—		—		—		170		2,662		—		—		2,832
Substandard (Grade 8)	—		—		—		—		—		—		—		—		—
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total residential real estate	429,072		584,538		248,329		81,522		52,617		222,997		334		—		1,619,409
Home equity
Risk rating
Performing	22,801		698		346		5,003		8,193		9,403		174,615		11,720		232,779
Non-performing	—		—		—		—		—		59		441		88		588
Total home equity	22,801		698		346		5,003		8,193		9,462		175,056		11,808		233,367
Consumer
Risk rating
Performing	6,797		4,510		2,017		1,522		434		2,447		3,279		—		21,006
Non-performing	—		—		—		—		—		1		—		—		1
Total consumer	6,797		4,510		2,017		1,522		434		2,448		3,279		—		21,007
Total Loans	$	830,084	$	1,024,604	$	481,118	$	295,636	$	248,234	$	624,837	$	313,802	$	42,365	$	3,860,680

(In thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2021
Commercial real estate - non-owner-occupied
Risk rating
Pass (Grades 1-6)	$	286,428	$	179,565	$	161,695	$	118,196	$	96,169	$	274,731	$	—	$	—	$	1,116,784
Special mention (Grade 7)	171		7,266		286		119		4,294		10,590		—		—		22,726
Substandard (Grade 8)	350		1,518		217		9,942		391		26,257		—		—		38,675
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - non-owner-occupied	286,949		188,349		162,198		128,257		100,854		311,578		—		—		1,178,185
Commercial real estate - owner-occupied
Risk rating
Pass (Grades 1-6)	91,328		39,082		31,409		43,786		46,466		56,682		—		—		308,753
Special mention (Grade 7)	—		—		—		3,396		362		1,708		—		—		5,466
Substandard (Grade 8)	—		—		54		—		1,785		1,217		—		—		3,056
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - owner occupied	91,328		39,082		31,463		47,182		48,613		59,607		—		—		317,275
Commercial
Risk rating
Pass (Grades 1-6)	91,102		43,757		44,925		23,895		13,818		27,743		80,775		31,586		357,601
Special mention (Grade 7)	145		117		590		115		383		222		967		244		2,783
Substandard (Grade 8)	—		339		320		492		293		1,209		360		298		3,311
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial	91,247		44,213		45,835		24,502		14,494		29,174		82,102		32,128		363,695
SBA PPP
Risk rating
Pass (Grades 1-6)	35,164		319		—		—		—		—		—		—		35,483
Special mention (Grade 7)	470		—		—		—		—		—		—		—		470
Substandard (Grade 8)	—		—		—		—		—		—		—		—		—
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total SBA PPP	35,634		319		—		—		—		—		—		—		35,953
Residential Real Estate
Risk rating
Pass (Grades 1-6)	586,637		281,804		103,228		63,403		46,696		219,983		903		—		1,302,654
Special mention (Grade 7)	—		—		—		—		—		230		—		—		230
Substandard (Grade 8)	—		—		—		—		—		3,563		—		—		3,563
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total residential real estate	586,637		281,804		103,228		63,403		46,696		223,776		903		—		1,306,447
Home equity
Risk rating
Performing	760		554		6,179		10,995		2,464		10,792		165,189		12,295		209,228
Non-performing	—		—		—		41		—		174		847		113		1,175
Total home equity	760		554		6,179		11,036		2,464		10,966		166,036		12,408		210,403
Consumer
Risk rating
Performing	6,860		3,523		3,089		1,051		548		2,014		2,399		—		19,484
Non-performing	—		9		21		—		—		2		—		—		32
Total consumer	6,860		3,532		3,110		1,051		548		2,016		2,399		—		19,516
Total Loans	$	1,099,415	$	557,853	$	352,013	$	275,431	$	213,669	$	637,117	$	251,440	$	44,536	$	3,431,474

Loan Aging Analysis by Portfolio Segment

The following is a loan aging analysis by portfolio segment (including loans past due over 90 days and non-accrual loans) and loans past due over 90 days and accruing as of the following dates:

(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans Outstanding		Loans > 90 Days Past Due and Accruing
September 30, 2022
Commercial real estate - non-owner-occupied	$	195	$	—	$	11	$	206	$	1,228,896	$	1,229,102	$	—
Commercial real estate - owner-occupied	—		—		47		47		333,738		333,785
Commercial	1,323		14		470		1,807		421,518		423,325		—
SBA PPP	—		—		—		—		685		685		—
Residential real estate	2,179		500		843		3,522		1,615,887		1,619,409		—
Home equity	620		210		327		1,157		232,210		233,367		—
Consumer	41		2		1		44		20,963		21,007		—
Total	$	4,358	$	726	$	1,699	$	6,783	$	3,853,897	$	3,860,680	$	—
December 31, 2021
Commercial real estate - non-owner-occupied	$	—	$	—	$	51	$	51	$	1,178,134	$	1,178,185	$	—
Commercial real estate - owner-occupied	47		—		133		180		317,095		317,275		—
Commercial	282		174		787		1,243		362,452		363,695		—
SBA PPP	—		68		—		68		35,885		35,953		—
Residential real estate	379		475		1,210		2,064		1,304,383		1,306,447		—
Home equity	456		50		445		951		209,452		210,403		—
Consumer	95		1		32		128		19,388		19,516		—
Total	$	1,259	$	768	$	2,658	$	4,685	$	3,426,789	$	3,431,474	$	—

Financing Receivable, Nonaccrual

The following table presents the amortized cost basis of loans on non-accrual status (including non-accruing TDRs) by portfolio segment as of the dates indicated:

	September 30, 2022						December 31, 2021
(In thousands)	Non-Accrual Loans With an Allowance		Non-Accrual Loans Without an Allowance		Total Non-Accrual Loans		Non-Accrual Loans With an Allowance		Non-Accrual Loans Without an Allowance		Total Non-Accrual Loans
Commercial real estate - non-owner-occupied	$	15	$	11	$	26	$	38	$	13	$	51
Commercial real estate - owner-occupied	—		47		47		86		47		133
Commercial	201		340		541		785		44		829
Residential real estate	1,203		359		1,562		1,780		327		2,107
Home equity	522		66		588		1,064		111		1,175
Consumer	1		—		1		32		—		32
Total	$	1,942	$	823	$	2,765	$	3,785	$	542	$	4,327

The following table presents the amortized cost basis of collateral-dependent non-accrual loans (including non-accruing TDRs) by portfolio segment and collateral type, as of the dates indicated:

	September 30, 2022						December 31, 2021
	Collateral Type				Total Collateral -Dependent Non-Accrual Loans		Collateral Type				Total Collateral -Dependent Non-Accrual Loans
(In thousands)	Real Estate		General Business Assets				Real Estate		General Business Assets
Residential real estate	$	321	$	—	$	321	$	268	$	—	$	268
Home equity	—		—		—		111		—		111
Total	$	321	$	—	$	321	$	379	$	—	$	379

Troubled Debt Restructuring and Specific Reserve Related to TDRs

The following is a summary of TDRs, by portfolio segment, and the associated specific reserve included within the ACL for the dates indicated:

	Number of Contracts		Recorded Investment				Specific Reserve
(In thousands, except number of contracts)	September 30, 2022	December 31, 2021	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Commercial real estate - owner-occupied	1	1	$	114	$	118	$	48	$	43
Commercial	1	2	58		74		—		—
Residential real estate	18	19	2,254		2,341		321		$	348
Consumer and home equity	3	3	246		253		7		6
Total	23	25	$	2,672	$	2,786	$	376	$	397

Troubled Debt Restructuring

The following represents loan modifications that qualify as TDRs that occurred during the periods indicated:

	Number of Contracts		Pre-Modification Outstanding Recorded Investment				Post-Modification Outstanding Recorded Investment				Specific Reserve
(In thousands, except number of contracts)	2022	2021	2022		2021		2022		2021		2022		2021
For the Three Months Ended September 30:
Home equity:
Maturity concession	—	1	$	—	$	144	$	—	$	143	$	—	$	6
Total	—	1	$	—	$	144	$	—	$	143	$	—	$	6
For the Nine Months Ended September 30:
Home equity:
Interest rate concession and payment deferral	—	1	$	—	$	159	$	—	$	170	$	—	$	56
Maturity concession	—	1	—		144		—		143		—		6
Total	—	2	$	—	$	303	$	—	$	313	$	—	$	62

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BORROWINGS (Tables)

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Schedule of Borrowed Funds Outstanding

The following summarizes the Company's short-term borrowed funds as presented on the consolidated statements of condition as of the dates indicated. The Company did not have any long-term borrowings as of the dates indicated.

(In thousands)	September 30, 2022		December 31, 2021
Short-Term Borrowings:
Customer repurchase agreements	$	268,876	$	211,608
Overnight borrowings	102,225		—
FHLBB borrowings	50,000		—
Total short-term borrowings	$	421,101	$	211,608

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REPURCHASE AGREEMENTS (Tables)

9 Months Ended

Sep. 30, 2022

Banking and Thrift, Other Disclosure [Abstract]

Schedule of Underlying Assets of Repurchase Agreements when Amount of Repurchase Agreements Exceeds 10 Percent of Assets

The table below sets forth information regarding the Company’s repurchase agreements accounted for as secured borrowings and types of collateral as of the dates indicated:

(In thousands)	September 30, 2022		December 31, 2021
Customer Repurchase Agreements(1)(2):
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	$	224,819	$	88,749
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	41,057		120,846
Obligations of states and political subdivisions	3,000		2,013
Total	$	268,876	$	211,608

(1)    Presented within short-term borrowings on the consolidated statements of condition.

(2)    All customer repurchase agreements mature continuously or overnight for the dates indicated.

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COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Schedule Of Contractual And Notional Amounts Of Financial Instruments Table

The following is a summary of the Company's contractual off-balance sheet commitments as of the dates indicated:

(In thousands)	September 30, 2022		December 31, 2021
Commitments to extend credit	$	876,757	$	834,533
Standby letters of credit	4,689		7,952
Total	$	881,446	$	842,485

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DERIVATIVES AND HEDGING (Tables)

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Derivative Financial Instruments

The following table presents the fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition as of the dates indicated:

	Derivative Assets					Derivative Liabilities
(In thousands)	Notional Amount		Location	Fair Value		Notional Amount		Location	Fair Value
September 30, 2022
Derivatives designated as hedging instruments:
Interest rate contracts(1)	$	110,000	Other assets	$	13,806	$	133,000	Accrued interest and other liabilities	$	5,459
Total derivatives designated as hedging instruments				$	13,806				$	5,459
Derivatives not designated as hedging instruments:
Customer loan swaps(1)	$	264,758	Other assets	$	16,112	$	264,758	Accrued interest and other liabilities	$	16,134
Risk participation agreements	21,937		Other assets	—		44,741		Accrued interest and other liabilities	—
Fixed rate mortgage interest rate lock commitments	2,400		Other assets	11		12,166		Accrued interest and other liabilities	395
Forward delivery commitments	4,863		Other assets	318		—		Accrued interest and other liabilities	—
Total derivatives not designated as hedging instruments				$	16,441				$	16,529
December 31, 2021
Derivatives designated as hedging instruments:
Interest rate contracts(1)	$	160,000	Other assets	$	5,589	$	83,000	Accrued interest and other liabilities	$	7,872
Total derivatives designated as hedging instruments				$	5,589				$	7,872
Derivatives not designated as hedging instruments:
Customer loan swaps(1)	$	345,545	Other assets	$	19,297	$	345,545	Accrued interest and other liabilities	$	19,485
Risk participation agreements	25,347		Other assets	—		53,704		Accrued interest and other liabilities	—
Fixed rate mortgage interest rate lock commitments	20,437		Other assets	371		8,587		Accrued interest and other liabilities	91
Forward delivery commitments	3,882		Other assets	86		1,903		Accrued interest and other liabilities	6
Total derivatives not designated as hedging instruments				$	19,754				$	19,582

(1)    Reported fair values include accrued interest receivable and payable.

Schedule of Cash Flow Hedging Instruments, Location

The table below presents the effect of cash flow hedge accounting, before tax, on AOCI for the periods indicated:

(Dollars in thousands)	Amount of Gain (Loss) Recognized in OCI on Derivative		Amount of Gain (Loss) Recognized in OCI Included Component		Amount of Gain (Loss) Recognized in OCI Excluded Component		Location of Gain (Loss) Recognized from AOCI into Income	Amount of Gain (Loss) Reclassified from AOCI into Income		Amount of Gain (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain (Loss) Reclassified from AOCI into Income Excluded Component
Derivatives in Cash Flow Hedge Relationships:
For the Three Months Ended September 30, 2022
Interest rate contracts	$	(1,798)	$	(1,798)	$	—	Interest and fees on loans	$	(121)	$	(121)	$	—
Interest rate contracts	146		146		—		Interest on deposits	189		189		—
Interest rate contracts	2,544		2,544		—		Interest on borrowings	185		185		—
Interest rate contracts	2,489		2,489		—		Interest on subordinated debentures	(133)		(133)		—
Total	$	3,381	$	3,381	$	—		$	120	$	120	$	—
For the Nine Months Ended September 30, 2022
Interest rate contracts	$	(5,713)	$	(5,713)	$	—	Interest and fees on loans	$	498	$	498	$	—
Interest rate contracts	5,867		5,867		—		Interest on deposits	72		72		—
Interest rate contracts	2,544		2,544		—		Interest on borrowings	185		185		—
Interest rate contracts	7,906		7,906		—		Interest on subordinated debentures	(755)		(755)		—
Total	$	10,604	$	10,604	$	—		$	—	$	—	$	—
For the Three Months Ended September 30, 2021
Interest rate contracts	$	48	$	48	$	—	Interest and fees on loans	$	410	$	410	$	—
Interest rate contracts	190		190		—		Interest on deposits	(170)		(170)		—
Interest rate contracts	228		228				Interest on subordinated debentures	(369)		(369)
Total	$	466	$	466	$	—		$	(129)	$	(129)	$	—
For the Nine Months Ended September 30, 2021
Interest rate contracts	$	(688)	$	(688)	$	—	Interest and fees on loans	$	1,205	$	1,205	$	—
Interest rate contracts	2,142		2,142		—		Interest on deposits	(490)		(490)		—
Interest rate contracts	2,201		2,201		—		Interest on subordinated debentures	(1,222)		(1,222)		—
Total	$	3,655	$	3,655	$	—		$	(507)	$	(507)	$	—

The table below presents the effect of cash flow hedge accounting on the consolidated statements of income for the periods indicated:

	Location and Amount of Gain (Loss) Recognized in Income
	Three Months Ended September 30,
	2022								2021
(Dollars in thousands)	Interest and fees on loans		Interest on deposits		Interest on borrowings		Interest on subordinated debentures		Interest and fees on loans		Interest on deposits		Interest on borrowings		Interest on subordinated debentures
Total presented on the consolidated statements of income in which the effects of cash flow hedges are recorded	$	37,568	$	5,442	$	787	$	539	$	31,185	$	1,973	$	122	$	538
Gain (loss) on cash flow hedging relationships
Interest rate contracts:
Amount of gain (loss) reclassified from AOCI into income	$	(121)	$	189	$	185	$	(133)	$	410	$	(170)	$	—	$	(369)
Amount of gain (loss) reclassified from AOCI into income - included component	$	(121)	$	189	$	185	$	(133)	$	410	$	(170)	$	—	$	(369)
Amount of gain (loss) reclassified from AOCI into income - excluded component	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

	Location and Amount of Gain (Loss) Recognized in Income
	Nine Months Ended September 30,
	2022								2021
(Dollars in thousands)	Interest and fees on loans		Interest on deposits		Interest on borrowings		Interest on subordinated debentures		Interest and fees on loans		Interest on deposits		Interest on borrowings		Interest on subordinated debentures
Total presented on the consolidated statements of income in which the effects of cash flow hedges are recorded	$	102,724	$	9,785	$	1,372	$	1,600	$	92,610	$	5,957	$	454	$	1,983
Gain (loss) on cash flow hedging relationships
Interest rate contracts:
Amount of gain (loss) reclassified from AOCI into income	$	498	$	72	$	185	$	(755)	$	1,205	$	(490)	$	—	$	(1,222)
Amount of gain (loss) reclassified from AOCI into income - included component	$	498	$	72	$	185	$	(755)	$	1,205	$	(490)	$	—	$	(1,222)
Amount of gain (loss) reclassified from AOCI into income - excluded component	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Schedule of Derivatives Not Designated as Hedging Instruments

The table below presents the effect of the Company's derivative financial instruments that are not designated as hedging instruments on the consolidated statements of income for the periods indicated:

	Location of Gain (Loss) Recognized in Income	Amount of Gain (Loss) Recognized in Income
		Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)		2022		2021		2022		2021
Customer loan swaps	Other expense	$	28	$	—	$	166	$	—
Fixed rate mortgage interest rate lock commitments	Mortgage banking income, net	(473)		(434)		(664)		22
Forward delivery commitments	Mortgage banking income, net	227		65		238		78
Total		$	(218)	$	(369)	$	(260)	$	100

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BALANCE SHEET OFFSETTING (Tables)

9 Months Ended

Sep. 30, 2022

Offsetting [Abstract]

Offsetting Assets

The following table presents the Company's derivative positions and repurchase agreements, and the potential effect of netting arrangements on its financial position, as of the dates indicated:

							Gross Amount Not Offset in the Consolidated Statements of Condition
(In thousands)	Gross Amount Recognized in the Consolidated Statements of Condition		Gross Amount Offset in the Consolidated Statements of Condition		Net Amount Presented in the Consolidated Statements of Condition		Financial Instruments Pledged (Received)(1)		Cash Collateral Pledged (Received)(1)		Net Amount
September 30, 2022
Derivative assets:
Customer loan swaps - dealer bank(2)	$	16,112	$	—	$	16,112	$	—	$	—	$	16,112
Interest rate contracts(3)	13,806		—		13,806		—		(11,459)		2,347
Total	$	29,918	$	—	$	29,918	$	—	$	(11,459)	$	18,459
Derivative liabilities:
Customer loan swaps - commercial customer(3)	$	16,134	$	—	$	16,134	$	—	$	—	$	16,134
Interest rate contracts(3)	5,459		—		5,459		—		5,459		—
Total	$	21,593	$	—	$	21,593	$	—	$	5,459	$	16,134
Customer repurchase agreements	$	268,876	$	—	$	268,876	$	268,876	$	—	$	—
December 31, 2021
Derivative assets:
Customer loan swaps - commercial customer(2)	$	19,297	$	—	$	19,297	$	—	$	—	$	19,297
Interest rate contracts(3)	5,589		—		5,589		—		(5,529)		60
Total	$	24,886	$	—	$	24,886	$	—	$	(5,529)	$	19,357
Derivative liabilities:
Customer loan swaps - dealer bank(3)	$	19,485	$	—	19,485		$	—	$	19,485	$	—
Interest rate contracts(3)	7,872		—		7,872		—		6,603		1,269
Total	$	27,357	$	—	$	27,357	$	—	$	26,088	$	1,269
Customer repurchase agreements	$	211,608	$	—	$	211,608	$	211,608	$	—	$	—

(1)    The amount presented was the lesser of the amount pledged (received) or the net amount presented in the consolidated statements of condition.

(2)    Interest rate swap contracts were completed with the same dealer bank. The Company maintains a master netting arrangement with each counterparty and settles collateral on a net basis for all contracts.

(3)    The Company manages its net exposure on its commercial customer loan swaps by obtaining collateral as part of the normal loan policy and underwriting practices.

Offsetting Liabilities

The following table presents the Company's derivative positions and repurchase agreements, and the potential effect of netting arrangements on its financial position, as of the dates indicated:

							Gross Amount Not Offset in the Consolidated Statements of Condition
(In thousands)	Gross Amount Recognized in the Consolidated Statements of Condition		Gross Amount Offset in the Consolidated Statements of Condition		Net Amount Presented in the Consolidated Statements of Condition		Financial Instruments Pledged (Received)(1)		Cash Collateral Pledged (Received)(1)		Net Amount
September 30, 2022
Derivative assets:
Customer loan swaps - dealer bank(2)	$	16,112	$	—	$	16,112	$	—	$	—	$	16,112
Interest rate contracts(3)	13,806		—		13,806		—		(11,459)		2,347
Total	$	29,918	$	—	$	29,918	$	—	$	(11,459)	$	18,459
Derivative liabilities:
Customer loan swaps - commercial customer(3)	$	16,134	$	—	$	16,134	$	—	$	—	$	16,134
Interest rate contracts(3)	5,459		—		5,459		—		5,459		—
Total	$	21,593	$	—	$	21,593	$	—	$	5,459	$	16,134
Customer repurchase agreements	$	268,876	$	—	$	268,876	$	268,876	$	—	$	—
December 31, 2021
Derivative assets:
Customer loan swaps - commercial customer(2)	$	19,297	$	—	$	19,297	$	—	$	—	$	19,297
Interest rate contracts(3)	5,589		—		5,589		—		(5,529)		60
Total	$	24,886	$	—	$	24,886	$	—	$	(5,529)	$	19,357
Derivative liabilities:
Customer loan swaps - dealer bank(3)	$	19,485	$	—	19,485		$	—	$	19,485	$	—
Interest rate contracts(3)	7,872		—		7,872		—		6,603		1,269
Total	$	27,357	$	—	$	27,357	$	—	$	26,088	$	1,269
Customer repurchase agreements	$	211,608	$	—	$	211,608	$	211,608	$	—	$	—

(1)    The amount presented was the lesser of the amount pledged (received) or the net amount presented in the consolidated statements of condition.

(2)    Interest rate swap contracts were completed with the same dealer bank. The Company maintains a master netting arrangement with each counterparty and settles collateral on a net basis for all contracts.

(3)    The Company manages its net exposure on its commercial customer loan swaps by obtaining collateral as part of the normal loan policy and underwriting practices.

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REGULATORY CAPITAL REQUIREMENTS (Tables)

9 Months Ended

Sep. 30, 2022

Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations

The following table presents the Company and Bank's regulatory capital ratios at the periods indicated:

	September 30, 2022				Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer		Minimum Regulatory Provision to Be "Well Capitalized"		December 31, 2021				Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer		Minimum Regulatory Provision to Be "Well Capitalized"
(Dollars in thousands)	Amount		Ratio						Amount		Ratio
Camden National Corporation:
Total risk-based capital ratio	$	547,244	13.81	%	10.50	%	10.00	%	$	522,714	14.71	%	10.50	%	10.00	%
Tier 1 risk-based capital ratio	507,262		12.81	%	8.50	%	6.00	%	486,263		13.68	%	8.50	%	6.00	%
Common equity Tier 1 risk-based capital ratio(1)	464,262		11.72	%	7.00	%	N/A		443,263		12.47	%	7.00	%	N/A
Tier 1 leverage capital ratio(1)	507,262		9.24	%	4.00	%	N/A		486,263		8.92	%	4.00	%	N/A
Camden National Bank:
Total risk-based capital ratio	$	516,673	13.07	%	10.50	%	10.00	%	$	488,070	13.78	%	10.50	%	10.00	%
Tier 1 risk-based capital ratio	476,691		12.06	%	8.50	%	8.00	%	451,620		12.75	%	8.50	%	8.00	%
Common equity Tier 1 risk-based capital ratio	476,691		12.06	%	7.00	%	6.50	%	451,620		12.75	%	7.00	%	6.50	%
Tier 1 leverage capital ratio	476,691		8.69	%	4.00	%	5.00	%	451,620		8.31	%	4.00	%	5.00	%

(1)    “Minimum Regulatory Provisions to Be ‘Well Capitalized’” are not formally defined under applicable banking regulations for bank holding companies.

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OTHER COMPREHENSIVE INCOME (LOSS) OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Schedule of of Comprehensive Income (Loss)

The following tables present a reconciliation of the changes in the components of other comprehensive income and loss for the periods indicated, including the amount of tax (expense) benefit allocated to each component:

	For the Three Months Ended
	September 30, 2022						September 30, 2021
(In thousands)	Pre-Tax Amount		Tax (Expense) Benefit		After-Tax Amount		Pre-Tax Amount		Tax (Expense) Benefit		After-Tax Amount
Debt Securities:
Change in fair value	$	(28,432)	$	6,113	$	(22,319)	$	(6,546)	$	1,407	$	(5,139)
Less: reclassification adjustment for amortization of securities transferred from AFS to HTM(1)	2,436		(524)		1,912		—		—		—
Net change in fair value	(30,868)		6,637		(24,231)		(6,546)		1,407		(5,139)
Cash Flow Hedges:
Change in fair value	3,381		(727)		2,654		466		(100)		366
Less: reclassified AOCI loss into interest expense(2)	241		(52)		189		(539)		116		(423)
Less: reclassified AOCI gain into interest income(3)	(121)		26		(95)		410		(88)		322
Net change in fair value	3,261		(701)		2,560		595		(128)		467
Postretirement Plans:
Amortization of settlement recognition of net loss and prior service credit(4)	230		(49)		181		217		(46)		171
Other comprehensive loss	$	(27,377)	$	5,887	$	(21,490)	$	(5,734)	$	1,233	$	(4,501)

(1) Reclassified into taxable interest on investments and/or nontaxable interest on investments in the consolidated statements of income. Refer to Note 3 of the consolidated financial statements for further details.

(2) Reclassified into interest on deposits, borrowings and/or subordinated debentures on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.

(3)    Reclassified into interest and fees on loans on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.

(4)    Reclassified into other expenses on the consolidated statements of income. Refer to Note 13 of the consolidated financial statements for further details.

	For the Nine Months Ended
	September 30, 2022						September 30, 2021
(In thousands)	Pre-Tax Amount		Tax (Expense) Benefit		After-Tax Amount		Pre-Tax Amount		Tax (Expense) Benefit		After-Tax Amount
Debt Securities:
Change in fair value	$	(173,421)	$	37,286	$	(136,135)	$	(25,926)	$	5,574	$	(20,352)
Less: reclassification adjustment for amortization of securities transferred from AFS to HTM(1)	3,780		(813)		2,967		—		—		—
Less: reclassification adjustment for net realized losses(2)	(9)		2		(7)		—		—		—
Net change in fair value	(177,192)		38,097		(139,095)		(25,926)		5,574		(20,352)
Cash Flow Hedges:
Change in fair value	10,604		(2,280)		8,324		3,655		(785)		2,870
Less: reclassified AOCI loss into interest expense(3)	(498)		107		(391)		(1,712)		368		(1,344)
Less: reclassified AOCI gain into interest income(4)	498		(107)		391		1,205		(258)		947
Net change in fair value	10,604		(2,280)		8,324		4,162		(895)		3,267
Postretirement Plans:
Amortization of settlement recognition of net loss and prior service credit(5)	693		(149)		544		652		(140)		512
Other comprehensive loss	$	(165,895)	$	35,668	$	(130,227)	$	(21,112)	$	4,539	$	(16,573)

(1) Reclassified into taxable interest on investments and/or nontaxable interest on investments in the consolidated statements of income. Refer to Note 3 of the consolidated financial statements for further details.

(2)    Reclassified into net loss on sale of securities in the consolidated statements of income. Refer to Note 3 of the consolidated financial statements for further details.

(3) Reclassified into interest on deposits, borrowings and/or subordinated debentures on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.

(4)    Reclassified into interest and fees on loans on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.

(5)    Reclassified into other expenses on the consolidated statements of income. Refer to Note 13 of the consolidated financial statements for further details.

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table presents the changes in each component of AOCI, after tax, for the periods indicated:

(In thousands)	Net Unrealized Gains (Losses) on Debt Securities		Net Unrealized Losses (Gains) on Cash Flow Hedges		Defined Benefit Postretirement Plans		AOCI
At or For the Three Months Ended September 30, 2022
Balance at June 30, 2022	$	(116,037)	$	3,985	$	(2,914)	$	(114,966)
Other comprehensive (loss) income before reclassifications	(22,319)		2,654		—		(19,665)
Less: Amounts reclassified from AOCI	1,912		94		(181)		1,825
Other comprehensive (loss) income	(24,231)		2,560		181		(21,490)
Balance at September 30, 2022	$	(140,268)	$	6,545	$	(2,733)	$	(136,456)
At or For the Nine Months Ended September 30, 2022
Balance at December 31, 2021	$	(1,173)	$	(1,779)	$	(3,277)	$	(6,229)
Other comprehensive (loss) income before reclassifications	(136,135)		8,324		—		(127,811)
Less: Amounts reclassified from AOCI	2,960		—		(544)		2,416
Other comprehensive (loss) income	(139,095)		8,324		544		(130,227)
Balance at September 30, 2022	$	(140,268)	$	6,545	$	(2,733)	$	(136,456)
At or For the Three Months Ended September 30, 2021
Balance at June 30, 2021	$	14,097	$	(1,826)	$	(3,603)	$	8,668
Other comprehensive (loss) income before reclassifications	(5,139)		366		—		(4,773)
Less: Amounts reclassified from AOCI	—		(101)		(171)		(272)
Other comprehensive (loss) income	(5,139)		467		171		(4,501)
Balance at September 30, 2021	$	8,958	$	(1,359)	$	(3,432)	$	4,167
At or For the Nine Months Ended September 30, 2021
Balance at December 31, 2020	$	29,310	$	(4,626)	$	(3,944)	$	20,740
Other comprehensive (loss) income before reclassifications	(20,352)		2,870		—		(17,482)
Less: Amounts reclassified from AOCI	—		(397)		(512)		(909)
Other comprehensive (loss) income	(20,352)		3,267		512		(16,573)
Balance at September 30, 2021	$	8,958	$	(1,359)	$	(3,432)	$	4,167

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REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table presents the revenue streams within the scope of ASC 606 for the periods indicated:

	Location on Consolidated Statements of Income	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)		2022		2021		2022		2021
Debit card interchange income	Debit card income	$	3,234	$	3,278	$	9,371	$	9,126
Services charges on deposit accounts	Service charges on deposit accounts	1,941		1,744		5,705		4,800
Fiduciary services income	Income from fiduciary services	1,535		1,627		4,847		4,860
Investment program income	Brokerage and insurance commissions	1,003		993		3,269		2,885
Other non-interest income	Other income	509		521		1,360		1,368
Total non-interest income within the scope of ASC 606		8,222		8,163		24,552		23,039
Total non-interest income not in scope of ASC 606		1,732		2,936		6,368		14,595
Total non-interest income		$	9,954	$	11,099	$	30,920	$	37,634

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EMPLOYEE BENEFIT PLANS (Tables)

9 Months Ended

Sep. 30, 2022

Retirement Benefits [Abstract]

Components of Net Period Benefit Cost

The components of net periodic pension and postretirement benefit cost were as follow for the following periods:

Supplemental Executive Retirement Plan:

(In thousands)	Location on Consolidated Statements of Income	Three Months Ended September 30,				Nine Months Ended September 30,
Net periodic pension cost		2022		2021		2022		2021
Service cost	Salaries and employee benefits	$	133	$	126	$	400	$	378
Interest cost	Other expenses	115		97		345		292
Recognized net actuarial loss	Other expenses	214		194		645		583
Total		$	462	$	417	$	1,390	$	1,253

Other Postretirement Benefit Plan:

(In thousands)	Location on Consolidated Statements of Income	Three Months Ended September 30,				Nine Months Ended September 30,
Net periodic postretirement benefit cost		2022		2021		2022		2021
Service cost	Salaries and employee benefits	$	5	$	7	$	15	$	20
Interest cost	Other expenses	28		26		84		77
Recognized net actuarial loss	Other expenses	22		29		66		87
Amortization of prior service credit	Other expenses	(6)		(6)		(18)		(18)
Total		$	49	$	56	$	147	$	166

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EPS (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Analysis of Basic and Diluted Earnings Per Share

The following is an analysis of basic and diluted EPS, reflecting the application of the two-class method, as described below:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except number of shares and per share data)	2022		2021		2022		2021
Net income	$	14,267	$	14,640	$	46,088	$	52,523
Dividends and undistributed earnings allocated to participating securities(1)	(39)		(40)		(121)		(145)
Net income available to common shareholders	$	14,228	$	14,600	$	45,967	$	52,378
Weighted-average common shares outstanding for basic EPS	14,619,460		14,931,056		14,670,450		14,930,387
Dilutive effect of stock-based awards(2)	55,872		67,957		57,899		66,154
Weighted-average common and potential common shares for diluted EPS	14,675,332		14,999,013		14,728,349		14,996,541
Earnings per common share:
Basic EPS	$	0.97	$	0.98	$	3.13	$	3.51
Diluted EPS	$	0.97	$	0.97	$	3.12	$	3.49
Awards excluded from the calculation of diluted EPS(3):
Performance-based awards	3,903		3,382		—		—

(1)    Represents dividends paid and undistributed earnings allocated to non-vested stock-based awards that contain non-forfeitable rights to dividends.

(2)    Represents the assumed dilutive effect of unexercised and/or unvested stock options, restricted shares, restricted share units and contingently issuable performance-based awards utilizing the treasury stock method.

(3)    Represents stock-based awards not included in the computation of potential common shares for purposes of calculating diluted EPS as the exercise prices were greater than the average market price of the Company's common stock, and, therefore, are considered anti-dilutive.

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FAIR VALUE MEASUREMENT AND DISCLOSURE (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, for the dates indicated:

(In thousands)	Fair Value		Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)
September 30, 2022
Financial assets:
Trading securities	$	3,727	$	3,727	$	—	$	—
AFS debt securities:
Obligations of states and political subdivisions	51,474		—		51,474		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	529,788		—		529,788		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	121,811		—		121,811		—
Subordinated corporate bonds	20,545		—		20,545		—
Loans held for sale	4,629		—		4,629		—
Customer loan swaps	16,112		—		16,112		—
Interest rate contracts	13,806		—		13,806		—
Fixed rate mortgage interest rate lock commitments	11		—		11		—
Forward delivery commitments	318		—		318		—
Financial liabilities:
Deferred compensation	$	3,727	$	3,727	$	—	$	—
Customer loan swaps	16,134		—		16,134		—
Interest rate contracts	5,459		—		5,459		—
Fixed rate mortgage interest rate lock commitments	395		—		395		—
December 31, 2021
Financial assets:
Trading securities	$	4,428	$	4,428	$	—	$	—
AFS debt securities:
Obligations of U.S. government-sponsored enterprises	8,344		—		8,344		—
Obligations of states and political subdivisions	117,478		—		117,478		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	1,000,257		—		1,000,257		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	358,849		—		358,849		—
Subordinated corporate bonds	22,558		—		22,558		—
Loans held for sale	5,815		—		5,815		—
Customer loan swaps	19,297		—		19,297		—
Interest rate contracts	5,589		—		5,589		—
Fixed rate mortgage interest rate lock commitments	371		—		371		—
Forward delivery commitments	86		—		86		—
Financial liabilities:
Deferred compensation	$	4,428	$	4,428	$	—	$	—
Customer loan swaps	19,485		—		19,485		—
Interest rate contracts	7,872		—		7,872		—
Fixed rate mortgage interest rate lock commitments	91		—		91		—
Forward delivery commitments	6		—		6		—

Summary of Assets Measured at Fair Value on Non Recurring Basis

The table below highlights financial and non-financial assets measured and recorded at fair value on a non-recurring basis for the dates indicated:

(In thousands)	Fair Value		Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)
September 30, 2022
Financial assets:
Collateral-dependent loans	$	69	$	—	$	—	$	69
December 31, 2021
Financial assets:
Collateral-dependent loans	$	73	$	—	$	—	$	73

Valuation Methodology and Unobservable Inputs for Level Three Assets Measured at Fair Value on Non Recurring Basis

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis for the dates indicated:

(Dollars in thousands)	Fair Value		Valuation Methodology	Unobservable Input	Discount
September 30, 2022
Collateral-dependent loans:
Partially charged-off	$	69	Market approach appraisal of    collateral	Estimated selling costs	18%
December 31, 2021
Collateral-dependent loans
Specifically reserved	$	73	Market approach appraisal of collateral	Estimated selling costs	11%

Carrying Amounts and Estimated Fair Value for Financial Instrument Assets and Liabilities

The estimated fair values and related carrying amounts for assets and liabilities for which fair value is only disclosed are shown below as of the dates indicated:

	Carrying Amount		Fair Value		Readily Available Market Prices (Level 1)		Observable Market Prices (Level 2)		Company Determined Market Prices (Level 3)
September 30, 2022
Financial assets:
HTM debt securities	$	534,309	$	491,759	$	—	$	491,759	$	—
Commercial real estate loans(1)(2)	1,543,107		1,517,911		—		—		1,517,911
Commercial loans(2)	418,110		412,670		—		—		412,670
SBA PPP loans(2)	684		704		—		—		704
Residential real estate loans(2)	1,610,324		1,424,504		—		—		1,424,504
Home equity loans(2)	231,507		238,723		—		—		238,723
Consumer loans(2)	20,406		18,277		—		—		18,277
Servicing assets	2,470		4,466		—		—		4,466
Financial liabilities:
Time deposits	$	279,603	$	270,794	$	—	$	270,794	$	—
Short-term borrowings	421,101		420,608		—		420,608		—
Subordinated debentures	44,331		31,918		—		31,918		—
December 31, 2021
Financial assets:
HTM debt securities	$	1,291	$	1,380	$	—	$	1,380	$	—
Commercial real estate loans(1)(2)	1,474,087		1,435,794		—		—		1,435,794
Commercial loans(2)	359,512		356,463		—		—		356,463
SBA PPP loans(2)	35,934		37,133		—		—		37,133
Residential real estate loans(2)	1,300,314		1,297,592		—		—		1,297,592
Home equity loans(2)	208,934		205,920		—		—		208,934
Consumer loans(2)	19,437		17,551		—		—		17,551
Servicing assets	2,471		3,310		—		—		3,310
Financial liabilities:
Time deposits	$	409,668	$	409,264	$	—	$	409,264	$	—
Short-term borrowings	211,608		211,586		—		211,586		—
Subordinated debentures	44,331		33,248		—		33,248		—

(1)    Commercial real estate loan includes non-owner-occupied and owner-occupied properties.

(2)    The presented carrying amount is net of the allocated ACL on loans.

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INVESTMENTS (Narrative) (Detail) - USD ($) $ in Thousands	1 Months Ended
	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2021
Schedule of Investments [Line Items]
Trading securities		$ 3,727	$ 4,428
AFS debt securities, allowance		0	0
Net unrealized loss on debt securities, net of tax		86,600	1,200
Deferred tax assets, unrealized losses on available for sale securities		23,700	321
HTM debt securities, allowance		0	0
HTM debt securities, excluding accrued interest from amortized cost		1,400	10
Asset Pledged as Collateral
Schedule of Investments [Line Items]
AFS and HTM debt securities, amortized cost		765,800	640,100
AFS and HTM debt securities, fair value		673,600	641,200
Available-for-sale Securities
Schedule of Investments [Line Items]
Interest Receivable		2,000	$ 3,400
Transferred Securities
Schedule of Investments [Line Items]
AFS debt securities transferred to HTM, fair value	$ 520,300
AFS debt securities, transfer, unrealized loss	$ 72,100
Net unrealized loss on debt securities, net of tax		(53,700)
Deferred tax assets, unrealized losses on available for sale securities		$ 14,700

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INVESTMENTS (Summary of Amortized Costs and Estimated Fair Values of Available-For-Sale Securities) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Debt Securities, Available-for-sale [Abstract]
Amortized Cost, Total	$ 833,888	$ 1,508,981
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	723,618	1,507,486
US Government-sponsored Enterprises Debt Securities [Member]
Debt Securities, Available-for-sale [Abstract]
Amortized Cost, Total		8,585
Unrealized Gains		0
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax		241
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)		8,344
Obligations of states and political subdivisions
Debt Securities, Available-for-sale [Abstract]
Amortized Cost, Total	53,247	112,086
Unrealized Gains	1	5,392
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax	1,774	0
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	51,474	117,478
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises
Debt Securities, Available-for-sale [Abstract]
Amortized Cost, Total	622,660	1,003,869
Unrealized Gains	65	7,856
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax	92,937	11,468
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	529,788	1,000,257
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises
Debt Securities, Available-for-sale [Abstract]
Amortized Cost, Total	134,872	361,781
Unrealized Gains	0	2,835
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax	13,061	5,767
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	121,811	358,849
Subordinated corporate bonds
Debt Securities, Available-for-sale [Abstract]
Amortized Cost, Total	23,109	22,660
Unrealized Gains	0	152
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax	2,564	254
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	20,545	22,558
Total AFS debt securities
Debt Securities, Available-for-sale [Abstract]
Amortized Cost, Total	833,888	1,508,981
Unrealized Gains	66	16,235
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax	110,336	17,730
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	$ 723,618	$ 1,507,486

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INVESTMENTS (Company's Sale of AFS Investments) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Debt Securities, Available-for-sale [Line Items]
Proceeds from sales of AFS investments	$ 0	$ 0	$ 8,723	$ 0
Debt Securities, Available-for-sale, Realized Gain	0	0	13	0
Debt Securities, Available-for-sale, Realized Loss	$ 0	$ 0	$ 22	$ 0

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INVESTMENTS (Schedule of Unrealized Gross Losses and Estimated Fair values of Investment Securities) (Details) $ in Thousands	Sep. 30, 2022 USD ($) security	Dec. 31, 2021 USD ($) security
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions | security	362	180
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ 346,711	$ 871,583
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	34,549	14,074
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	372,004	101,074
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	(75,787)	(3,656)
Debt Securities, Available-for-sale, Unrealized Loss Position, Total	718,715	972,657
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss	$ 110,336	$ 17,730
Obligations of states and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions | security	101
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ 51,026
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	1,774
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	0
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	0
Debt Securities, Available-for-sale, Unrealized Loss Position, Total	51,026
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss	$ 1,774
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions | security	172	113
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ 203,082	$ 659,851
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	24,432	8,999
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	322,251	61,978
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	(68,505)	(2,469)
Debt Securities, Available-for-sale, Unrealized Loss Position, Total	525,333	721,829
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss	$ 92,937	$ 11,468
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions | security	76	56
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ 83,532	$ 191,456
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	7,433	4,602
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	38,279	38,117
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	(5,628)	(1,165)
Debt Securities, Available-for-sale, Unrealized Loss Position, Total	121,811	229,573
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss	$ 13,061	$ 5,767
Subordinated corporate bonds
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions | security	13	7
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ 9,071	$ 11,932
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	910	232
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	11,474	979
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	(1,654)	(22)
Debt Securities, Available-for-sale, Unrealized Loss Position, Total	20,545	12,911
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss	$ 2,564	$ 254
US Government-sponsored Enterprises Debt Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions | security		4
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months		$ 8,344
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss		241
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer		0
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss		0
Debt Securities, Available-for-sale, Unrealized Loss Position, Total		8,344
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss		$ 241

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INVESTMENTS (Schedule of Amortized Cost and Estimated Fair Values of Debt Securities by Contractual Maturity) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Available-for-sale, Amortized Cost
Due in one year or less	$ 501
Due after one year through five years	15,785
Due after five years through ten years	60,070
Due after ten years	0
Subtotal	76,356
Mortgage-related securities	757,532
Available-for-sale securities, book value	833,888	$ 1,508,981
Available-for-sale, Fair Value
Due in one year or less	500
Due after one year through five years	14,033
Due after five years through ten years	57,486
Due after ten years	0
Subtotal	72,019
Mortgage-related securities	651,599
Fair value, total	$ 723,618	$ 1,507,486

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INVESTMENTS (Summary of Amortized Cost and Fair Value of Held to Maturity Securities) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Schedule of Investments [Line Items]
Held-to-maturity securities, at amortized cost	$ 534,309	$ 1,291
Unrealized Gains	0	89
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss	(42,550)	0
Held-to-maturity securities, fair value	491,759	1,380
US Government-sponsored Enterprises Debt Securities [Member]
Schedule of Investments [Line Items]
Held-to-maturity securities, at amortized cost	7,422
Unrealized Gains	0
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss	(664)
Held-to-maturity securities, fair value	6,758
Obligations of states and political subdivisions
Schedule of Investments [Line Items]
Held-to-maturity securities, at amortized cost	55,908	1,291
Unrealized Gains	0	89
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss	(3,595)	0
Held-to-maturity securities, fair value	52,313	$ 1,380
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Schedule of Investments [Line Items]
Held-to-maturity securities, at amortized cost	320,850
Unrealized Gains	0
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss	(27,067)
Held-to-maturity securities, fair value	293,783
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises
Schedule of Investments [Line Items]
Held-to-maturity securities, at amortized cost	147,753
Unrealized Gains	0
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss	(10,990)
Held-to-maturity securities, fair value	136,763
Subordinated corporate bonds
Schedule of Investments [Line Items]
Held-to-maturity securities, at amortized cost	2,376
Unrealized Gains	0
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss	(234)
Held-to-maturity securities, fair value	$ 2,142

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INVESTMENTS (Amortized Cost and Fair Values of HTM Securities by Contractual Maturity) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Held-to-maturity, Amortized Cost
Due in one year or less	$ 0
Due after one year through five years	864
Due after five years through ten years	14,562
Due after ten years	50,280
Due in one year or less	61,213
Debt Securities, Held-to-Maturity, Amortized Cost, after Allowance for Credit Loss, Maturity, Allocated and Single Maturity Date	65,706
Debt Securities, Held-to-Maturity, Amortized Cost, after Allowance for Credit Loss, Maturity, without Single Maturity Date	468,603
Debt Securities, Held-to-maturity, Maturity, without Single Maturity Date, Fair Value	430,546
Amortized Cost	534,309	$ 1,291
Held-to-maturity, Fair Value
Due in one year or less	0
Due after one year through five years	845
Due after five years through ten years	13,538
Due after ten years	46,830
Fair value, total	$ 491,759	$ 1,380

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INVESTMENTS (Schedule of Amortized Cost and Fair Value of Other Investments) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Investments, Debt and Equity Securities [Abstract]
FHLBB	$ 9,734	$ 4,906
FRB	5,374	5,374
Other Investments, Amortized Cost	$ 15,108	$ 10,280

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LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Narrative) (Details)	3 Months Ended			6 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2022 USD ($) loan	Mar. 31, 2022 USD ($) loan	Sep. 30, 2021 USD ($) loan	Jun. 30, 2022 USD ($)	Sep. 30, 2022 USD ($) loan	Sep. 30, 2021 USD ($) loan	Dec. 31, 2021 USD ($)	Jun. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
SBA PPP Loans, Total Originations, Number of Loans | loan		1,620
SBA PPP Loans, Total Originations		$ 102,200,000
Loans and Leases Receivable, Related Parties, Description				At September 30, 2022 and December 31, 2021, outstanding loans to certain officers, directors and their associated companies were less than 5% of the Company's shareholders' equity.	At September 30, 2022 and December 31, 2021, outstanding loans to certain officers, directors and their associated companies were less than 5% of the Company's shareholders' equity.
Proceeds from the sale of mortgage loans					$ 134,597,000	$ 400,812,000
Gain on sale of mortgage loans					(2,948,000)	(11,260,000)
Loans held for sale, at fair value (book value of $4,863 and $5,786, respectively)	$ 4,629,000				4,629,000		$ 5,815,000
Allowance for Loan and Lease Losses, Period Increase (Decrease)					3,300,000
Allowance for credit losses	36,542,000		$ 32,272,000	$ 34,244,000	36,542,000	32,272,000	33,256,000	$ 32,060,000	$ 37,865,000
Provision for loan losses	2,513,000		269,000		$ 3,788,000	(5,037,000)	(3,817,000)
Other industry exposures					0
Non-Accrual Loans	2,765,000				$ 2,765,000		4,327,000
Loans outstanding	3,860,680,000				3,860,680,000		3,431,474,000
Interest lost on nonaccrual loans	30,000		$ 59,000		115,000	$ 202,000
Loans and Leases Receivable, Excluded Accrued Interest from Amortized Cost	8,900,000				8,900,000		7,800,000
Recorded Investment	2,672,000				2,672,000		2,786,000
Financing Receivable, Troubled Debt Restructuring, Commitment to Lend	$ 0				$ 0		0
Loans modified | loan	0		0		0	0
FHLB advances, general debt obligations, pledged collateral	$ 1,700,000,000				$ 1,700,000,000		1,400,000,000
SBA PPP Loans, 2021 Originations, Outstanding | loan	6				6
Financing Receivable, Year One, Originated, Current Fiscal Year	$ 830,084,000				$ 830,084,000		1,099,415,000
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	1,024,604,000				1,024,604,000		557,853,000
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	481,118,000				481,118,000		352,013,000
SBA PPP
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses	1,000		$ 43,000	1,000	1,000	$ 43,000	19,000	66,000	69,000
Provision for loan losses	0		(23,000)		(18,000)	(26,000)	(50,000)
Loans outstanding	685,000				685,000		35,953,000
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses	9,085,000		3,653,000	8,438,000	9,085,000	3,653,000	6,133,000	3,205,000	3,474,000
Provision for loan losses	696,000		450,000		3,017,000	199,000	2,644,000
Non-Accrual Loans	1,562,000				1,562,000		2,107,000
Loans outstanding	1,619,409,000				1,619,409,000		1,306,447,000
Mortgage Loans in Process of Foreclosure, Amount	542,000				542,000		888,000
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses	5,215,000		4,589,000	5,145,000	5,215,000	4,589,000	4,183,000	4,342,000	6,703,000
Provision for loan losses	192,000		295,000		1,435,000	(1,770,000)	(1,941,000)
Non-Accrual Loans	541,000				541,000		829,000
Loans outstanding	423,325,000				423,325,000		363,695,000
Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses	1,860,000		1,838,000	1,796,000	1,860,000	1,838,000	1,469,000	2,065,000	2,616,000
Provision for loan losses	63,000		(231,000)		304,000	(637,000)	(989,000)
Non-Accrual Loans	588,000				588,000		1,175,000
Loans outstanding	233,367,000				233,367,000		210,403,000
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses	601,000		111,000	$ 153,000	601,000	111,000	79,000	$ 289,000	$ 393,000
Provision for loan losses	494,000		(165,000)		647,000	(224,000)	(235,000)
Non-Accrual Loans	1,000				1,000		32,000
Loans outstanding	21,007,000				21,007,000		19,516,000
Commercial real estate - non-owner-occupied, hospitality-related
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses	0				0		5,000,000
Provision for loan losses					(5,000,000)
Fixed Rate Residential Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Proceeds from the sale of mortgage loans	37,900,000		86,200,000		131,600,000	389,600,000
Gain on sale of mortgage loans	(783,000)		(2,200,000)		(2,900,000)	(11,300,000)
Loans held for sale, at fair value (book value of $4,863 and $5,786, respectively)	4,900,000				4,900,000		5,800,000
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	58,000				58,000		74,000
Financing Receivable, Year One, Originated, Current Fiscal Year	57,201,000				57,201,000		91,247,000
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	73,904,000				73,904,000		44,213,000
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	35,286,000				35,286,000		45,835,000
SBA PPP
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0				0		35,634,000
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	685,000				685,000		319,000
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0				0		0
Nonoperating Income (Expense) | Fixed Rate Residential Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gain on sale of mortgage loans	193,000		216,000,000,000		$ 262,000	$ 1,000,000
Unrealized gain (loss) on loans held for sale	(233,000)		$ 29,000,000
Non-Residential Building Operators Industry Sector | Loan Concentration Risk | Total Loan Portfolio
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration risk (percentage)					13.00%
Non-Residential Building Operators Industry Sector | Loan Concentration Risk | Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration risk (percentage)					32.00%
Substandard [Member] | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	17,000				$ 17,000		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	19,000				19,000		339,000
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	139,000				139,000		320,000
Substandard [Member] | SBA PPP
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0				0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0				0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0				0		0
Pass [Member] | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	57,184,000				57,184,000		91,102,000
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	73,885,000				73,885,000		43,757,000
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	35,048,000				35,048,000		44,925,000
Pass [Member] | SBA PPP
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0				0		35,164,000
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	685,000				685,000		319,000
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0				0		0
Performing Financial Instruments [Member] | Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	2,300,000				2,300,000		2,400,000
Nonperforming Financial Instruments [Member] | Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	$ 387,000				$ 387,000		$ 394,000

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LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Composition of Loan Portfolio) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 3,860,680	$ 3,431,474
Loans and Leases Receivable, Net of Deferred Income	3,860,680	3,431,474
Commercial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	1,986,897	1,895,108
Commercial real estate - non-owner-occupied
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	1,229,102	1,178,185
Commercial real estate - owner-occupied
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	333,785	317,275
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	423,325	363,695
SBA PPP
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	685	35,953
Retail Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	1,873,783	1,536,366
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	1,619,409	1,306,447
Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	233,367	210,403
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 21,007	$ 19,516

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LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Unamortized fair value mark and costs) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Loans and Leases Receivable Disclosure [Line Items]
Net Unamortized fair Value Mark (Discount) on Loans	$ (396)	$ (593)
Loans and Leases Receivable, Deferred Income	6,429	3,110
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums	6,033	2,517
SBA PPP
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Deferred Income	$ 20	$ 1,200

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LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Activity in Allowance for Credit Losses on Loans by Portfolio Segment) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning Balance	$ 34,244	$ 32,060	$ 33,256	$ 37,865	$ 37,865
Loans charged off	(278)	(121)	(939)	(828)	(1,164)
Recoveries	63	64	437	272	372
Provision for loan losses	2,513	269	3,788	(5,037)	(3,817)
Ending Balance	36,542	32,272	36,542	32,272	33,256
Commercial real estate - non-owner-occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning Balance	16,210	19,577	18,834	21,778	21,778
Loans charged off	0	0	0	0	0
Recoveries	1	0	2	0	0
Provision for loan losses	922	157	(1,703)	(2,044)	(2,944)
Ending Balance	17,133	19,734	17,133	19,734	18,834
Commercial real estate - owner-occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning Balance	2,501	2,516	2,539	2,832	2,832
Loans charged off	0	0	0	0	0
Recoveries	0	2	2	7	9
Provision for loan losses	146	(214)	106	(535)	(302)
Ending Balance	2,647	2,304	2,647	2,304	2,539
Commercial
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning Balance	5,145	4,342	4,183	6,703	6,703
Loans charged off	(183)	(97)	(744)	(503)	(799)
Recoveries	61	49	341	159	220
Provision for loan losses	192	295	1,435	(1,770)	(1,941)
Ending Balance	5,215	4,589	5,215	4,589	4,183
SBA PPP
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning Balance	1	66	19	69	69
Loans charged off	0	0	0	0	0
Recoveries	0	0	0	0	0
Provision for loan losses	0	(23)	(18)	(26)	(50)
Ending Balance	1	43	1	43	19
Residential real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning Balance	8,438	3,205	6,133	3,474	3,474
Loans charged off	(49)	(4)	(65)	(92)	(92)
Recoveries	0	2	0	72	107
Provision for loan losses	696	450	3,017	199	2,644
Ending Balance	9,085	3,653	9,085	3,653	6,133
Home equity
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning Balance	1,796	2,065	1,469	2,616	2,616
Loans charged off	0	0	0	(145)	(162)
Recoveries	1	4	87	4	4
Provision for loan losses	63	(231)	304	(637)	(989)
Ending Balance	1,860	1,838	1,860	1,838	1,469
Consumer
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning Balance	153	289	79	393	393
Loans charged off	(46)	(20)	(130)	(88)	(111)
Recoveries	0	7	5	30	32
Provision for loan losses	494	(165)	647	(224)	(235)
Ending Balance	$ 601	$ 111	$ 601	$ 111	$ 79

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Credit Quality and Origination by Portfolio Segment Analysis) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	$ 830,084	$ 1,099,415
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	1,024,604	557,853
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	481,118	352,013
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	295,636	275,431
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	248,234	213,669
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	624,837	637,117
Financing Receivable, Revolving	313,802	251,440
Financing Receivable, Revolving, Converted to Term Loan	42,365	44,536
Gross loans	3,860,680	3,431,474
Commercial real estate - non-owner-occupied
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	261,937	286,949
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	275,594	188,349
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	166,158	162,198
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	127,237	128,257
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	119,226	100,854
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	278,950	311,578
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	1,229,102	1,178,185
Commercial real estate - non-owner-occupied | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	261,937	286,428
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	275,295	179,565
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	164,434	161,695
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	126,764	118,196
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	111,150	96,169
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	259,205	274,731
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	1,198,785	1,116,784
Commercial real estate - non-owner-occupied | Special Mention [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	171
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	168	7,266
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	368	286
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	266	119
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	78	4,294
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	327	10,590
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	1,207	22,726
Commercial real estate - non-owner-occupied | Substandard [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	350
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	131	1,518
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	1,356	217
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	207	9,942
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	7,998	391
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	19,418	26,257
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	29,110	38,675
Commercial real estate - non-owner-occupied | Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0	0
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	0	0
Commercial real estate - owner-occupied
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	52,276	91,328
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	84,675	39,082
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	28,982	31,463
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	43,991	47,182
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	43,610	48,613
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	80,251	59,607
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	333,785	317,275
Commercial real estate - owner-occupied | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	52,250	91,328
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	82,599	39,082
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	28,982	31,409
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	24,000	43,786
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	40,311	46,466
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	75,807	56,682
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	303,949	308,753
Commercial real estate - owner-occupied | Special Mention [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	2,076	0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	19,991	3,396
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	362
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	422	1,708
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	22,489	5,466
Commercial real estate - owner-occupied | Substandard [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	26	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	54
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	3,299	1,785
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	4,022	1,217
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	7,347	3,056
Commercial real estate - owner-occupied | Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0	0
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	0	0
Commercial
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	57,201	91,247
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	73,904	44,213
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	35,286	45,835
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	36,361	24,502
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	24,154	14,494
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	30,729	29,174
Financing Receivable, Revolving	135,133	82,102
Financing Receivable, Revolving, Converted to Term Loan	30,557	32,128
Gross loans	423,325	363,695
Commercial | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	57,184	91,102
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	73,885	43,757
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	35,048	44,925
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	35,969	23,895
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	23,346	13,818
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	28,931	27,743
Financing Receivable, Revolving	132,833	80,775
Financing Receivable, Revolving, Converted to Term Loan	29,911	31,586
Gross loans	417,107	357,601
Commercial | Special Mention [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	145
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	117
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	99	590
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	154	115
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	83	383
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	200	222
Financing Receivable, Revolving	1,089	967
Financing Receivable, Revolving, Converted to Term Loan	14	244
Gross loans	1,639	2,783
Commercial | Substandard [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	17	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	19	339
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	139	320
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	238	492
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	725	293
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	1,598	1,209
Financing Receivable, Revolving	1,211	360
Financing Receivable, Revolving, Converted to Term Loan	632	298
Gross loans	4,579	3,311
Commercial | Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0	0
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	0	0
SBA PPP
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	35,634
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	685	319
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0	0
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	685	35,953
SBA PPP | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	35,164
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	685	319
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0	0
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	685	35,483
SBA PPP | Special Mention [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	470
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0	0
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	0	470
SBA PPP | Substandard [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0	0
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	0	0
SBA PPP | Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0	0
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	0	0
Residential real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	429,072	586,637
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	584,538	281,804
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	248,329	103,228
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	81,522	63,403
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	52,617	46,696
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	222,997	223,776
Financing Receivable, Revolving	334	903
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	1,619,409	1,306,447
Residential real estate | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	429,072	586,637
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	584,538	281,804
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	248,329	103,228
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	81,522	63,403
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	52,447	46,696
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	220,335	219,983
Financing Receivable, Revolving	334	903
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	1,616,577	1,302,654
Residential real estate | Special Mention [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	170	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	2,662	230
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	2,832	230
Residential real estate | Substandard [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0	3,563
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	0	3,563
Residential real estate | Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0	0
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	0	0
Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	22,801	760
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	698	554
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	346	6,179
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	5,003	11,036
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	8,193	2,464
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	9,462	10,966
Financing Receivable, Revolving	175,056	166,036
Financing Receivable, Revolving, Converted to Term Loan	11,808	12,408
Gross loans	233,367	210,403
Home equity | Performing Financial Instruments [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	22,801	760
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	698	554
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	346	6,179
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	5,003	10,995
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	8,193	2,464
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	9,403	10,792
Financing Receivable, Revolving	174,615	165,189
Financing Receivable, Revolving, Converted to Term Loan	11,720	12,295
Gross loans	232,779	209,228
Home equity | Nonperforming Financial Instruments [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	41
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	59	174
Financing Receivable, Revolving	441	847
Financing Receivable, Revolving, Converted to Term Loan	88	113
Gross loans	588	1,175
Consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	6,797	6,860
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	4,510	3,532
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	2,017	3,110
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	1,522	1,051
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	434	548
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	2,448	2,016
Financing Receivable, Revolving	3,279	2,399
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	21,007	19,516
Consumer | Performing Financial Instruments [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	6,797	6,860
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	4,510	3,523
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	2,017	3,089
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	1,522	1,051
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	434	548
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	2,447	2,014
Financing Receivable, Revolving	3,279	2,399
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	21,006	19,484
Consumer | Nonperforming Financial Instruments [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	9
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	21
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	1	2
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	$ 1	$ 32

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LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Loan Aging Analysis by Portfolio Segment) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financing Receivable, Past Due [Line Items]
Loans outstanding	$ 3,860,680	$ 3,431,474
Loans 90 Days Past Due and Accruing	0	0
Financing Receivable, Year One, Originated, Current Fiscal Year	830,084	1,099,415
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	1,024,604	557,853
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	481,118	352,013
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	295,636	275,431
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	248,234	213,669
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	624,837	637,117
Financing Receivable, Revolving	313,802	251,440
Financing Receivable, Revolving, Converted to Term Loan	42,365	44,536
Gross loans	3,860,680	3,431,474
Commercial real estate - non-owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	1,229,102	1,178,185
Loans 90 Days Past Due and Accruing	0	0
Gross loans	1,229,102	1,178,185
Commercial real estate - owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	333,785	317,275
Loans 90 Days Past Due and Accruing		0
Gross loans	333,785	317,275
Commercial
Financing Receivable, Past Due [Line Items]
Loans outstanding	423,325	363,695
Loans 90 Days Past Due and Accruing	0	0
Gross loans	423,325	363,695
SBA PPP
Financing Receivable, Past Due [Line Items]
Loans outstanding	685	35,953
Loans 90 Days Past Due and Accruing	0	0
Gross loans	685	35,953
Residential real estate
Financing Receivable, Past Due [Line Items]
Loans outstanding	1,619,409	1,306,447
Loans 90 Days Past Due and Accruing	0	0
Gross loans	1,619,409	1,306,447
Home equity
Financing Receivable, Past Due [Line Items]
Loans outstanding	233,367	210,403
Loans 90 Days Past Due and Accruing	0	0
Gross loans	233,367	210,403
Consumer
Financing Receivable, Past Due [Line Items]
Loans outstanding	21,007	19,516
Loans 90 Days Past Due and Accruing	0	0
Gross loans	21,007	19,516
Total Past Due
Financing Receivable, Past Due [Line Items]
Loans outstanding	6,783	4,685
Total Past Due | Commercial real estate - non-owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	206	51
Total Past Due | Commercial real estate - owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	47	180
Total Past Due | Commercial
Financing Receivable, Past Due [Line Items]
Loans outstanding	1,807	1,243
Total Past Due | SBA PPP
Financing Receivable, Past Due [Line Items]
Loans outstanding	0	68
Total Past Due | Residential real estate
Financing Receivable, Past Due [Line Items]
Loans outstanding	3,522	2,064
Total Past Due | Home equity
Financing Receivable, Past Due [Line Items]
Loans outstanding	1,157	951
Total Past Due | Consumer
Financing Receivable, Past Due [Line Items]
Loans outstanding	44	128
30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans outstanding	4,358	1,259
30-59 Days Past Due | Commercial real estate - non-owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	195	0
30-59 Days Past Due | Commercial real estate - owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	0	47
30-59 Days Past Due | Commercial
Financing Receivable, Past Due [Line Items]
Loans outstanding	1,323	282
30-59 Days Past Due | SBA PPP
Financing Receivable, Past Due [Line Items]
Loans outstanding	0	0
30-59 Days Past Due | Residential real estate
Financing Receivable, Past Due [Line Items]
Loans outstanding	2,179	379
30-59 Days Past Due | Home equity
Financing Receivable, Past Due [Line Items]
Loans outstanding	620	456
30-59 Days Past Due | Consumer
Financing Receivable, Past Due [Line Items]
Loans outstanding	41	95
60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans outstanding	726	768
60-89 Days Past Due | Commercial real estate - non-owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	0	0
60-89 Days Past Due | Commercial real estate - owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	0	0
60-89 Days Past Due | Commercial
Financing Receivable, Past Due [Line Items]
Loans outstanding	14	174
60-89 Days Past Due | SBA PPP
Financing Receivable, Past Due [Line Items]
Loans outstanding	0	68
60-89 Days Past Due | Residential real estate
Financing Receivable, Past Due [Line Items]
Loans outstanding	500	475
60-89 Days Past Due | Home equity
Financing Receivable, Past Due [Line Items]
Loans outstanding	210	50
60-89 Days Past Due | Consumer
Financing Receivable, Past Due [Line Items]
Loans outstanding	2	1
90 Days or Greater Past Due
Financing Receivable, Past Due [Line Items]
Loans outstanding	1,699	2,658
90 Days or Greater Past Due | Commercial real estate - non-owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	11	51
90 Days or Greater Past Due | Commercial real estate - owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	47	133
90 Days or Greater Past Due | Commercial
Financing Receivable, Past Due [Line Items]
Loans outstanding	470	787
90 Days or Greater Past Due | SBA PPP
Financing Receivable, Past Due [Line Items]
Loans outstanding	0	0
90 Days or Greater Past Due | Residential real estate
Financing Receivable, Past Due [Line Items]
Loans outstanding	843	1,210
90 Days or Greater Past Due | Home equity
Financing Receivable, Past Due [Line Items]
Loans outstanding	327	445
90 Days or Greater Past Due | Consumer
Financing Receivable, Past Due [Line Items]
Loans outstanding	1	32
Current
Financing Receivable, Past Due [Line Items]
Loans outstanding	3,853,897	3,426,789
Current | Commercial real estate - non-owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	1,228,896	1,178,134
Current | Commercial real estate - owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	333,738	317,095
Current | Commercial
Financing Receivable, Past Due [Line Items]
Loans outstanding	421,518	362,452
Current | SBA PPP
Financing Receivable, Past Due [Line Items]
Loans outstanding	685	35,885
Current | Residential real estate
Financing Receivable, Past Due [Line Items]
Loans outstanding	1,615,887	1,304,383
Current | Home equity
Financing Receivable, Past Due [Line Items]
Loans outstanding	232,210	209,452
Current | Consumer
Financing Receivable, Past Due [Line Items]
Loans outstanding	20,963	19,388
Commercial
Financing Receivable, Past Due [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	57,201	91,247
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	73,904	44,213
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	35,286	45,835
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	36,361	24,502
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	24,154	14,494
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	30,729	29,174
Financing Receivable, Revolving	135,133	82,102
Financing Receivable, Revolving, Converted to Term Loan	30,557	32,128
Gross loans	423,325	363,695
Commercial | Doubtful
Financing Receivable, Past Due [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0	0
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	0	0
Residential real estate
Financing Receivable, Past Due [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	429,072	586,637
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	584,538	281,804
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	248,329	103,228
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	81,522	63,403
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	52,617	46,696
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	222,997	223,776
Financing Receivable, Revolving	334	903
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	1,619,409	1,306,447
Residential real estate | Doubtful
Financing Receivable, Past Due [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0	0
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	0	0
Commercial real estate - non-owner-occupied
Financing Receivable, Past Due [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	261,937	286,949
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	275,594	188,349
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	166,158	162,198
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	127,237	128,257
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	119,226	100,854
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	278,950	311,578
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	1,229,102	1,178,185
Commercial real estate - non-owner-occupied | Doubtful
Financing Receivable, Past Due [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0	0
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	$ 0	$ 0

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LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Financing Receivable, Nonaccrual) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual, With Allowance	$ 1,942	$ 3,785
Financing Receivable, Nonaccrual, No Allowance	823	542
Financing Receivable, Nonaccrual	2,765	4,327
Real Estate
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual	321	379
General Business Assets
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual	0	0
Total Collateral -Dependent Non-Accrual Loans
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual	321	379
Commercial real estate - non-owner-occupied
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual, With Allowance	15	38
Financing Receivable, Nonaccrual, No Allowance	11	13
Financing Receivable, Nonaccrual	26	51
Commercial real estate - owner-occupied
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual, With Allowance	0	86
Financing Receivable, Nonaccrual, No Allowance	47	47
Financing Receivable, Nonaccrual	47	133
Commercial
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual, With Allowance	201	785
Financing Receivable, Nonaccrual, No Allowance	340	44
Financing Receivable, Nonaccrual	541	829
Residential real estate
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual, With Allowance	1,203	1,780
Financing Receivable, Nonaccrual, No Allowance	359	327
Financing Receivable, Nonaccrual	1,562	2,107
Residential real estate | Real Estate
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual	321	268
Residential real estate | General Business Assets
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual	0	0
Residential real estate | Total Collateral -Dependent Non-Accrual Loans
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual	321	268
Home equity
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual, With Allowance	522	1,064
Financing Receivable, Nonaccrual, No Allowance	66	111
Financing Receivable, Nonaccrual	588	1,175
Home equity | Real Estate
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual	0	111
Home equity | General Business Assets
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual	0	0
Home equity | Total Collateral -Dependent Non-Accrual Loans
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual	0	111
Consumer
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual, With Allowance	1	32
Financing Receivable, Nonaccrual, No Allowance	0	0
Financing Receivable, Nonaccrual	$ 1	$ 32

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LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Troubled Debt Restructuring Loans) (Details) $ in Thousands	Sep. 30, 2022 USD ($) loan	Dec. 31, 2021 USD ($) loan
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts | loan	23	25
Recorded Investment	$ 2,672	$ 2,786
Specific Reserve	$ 376	$ 397
Residential real estate
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts | loan	18	19
Recorded Investment	$ 2,254	$ 2,341
Specific Reserve	$ 321	$ 348
Commercial
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts | loan	1	2
Recorded Investment	$ 58	$ 74
Specific Reserve	$ 0	$ 0
Consumer
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts | loan	3	3
Recorded Investment	$ 246	$ 253
Specific Reserve	$ 7	$ 6
Commercial real estate - owner-occupied
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts | loan	1	1
Recorded Investment	$ 114	$ 118
Specific Reserve	$ 48	$ 43

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LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Troubled Debt Restructuring by Portfolio Segment) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($) loan	Sep. 30, 2021 USD ($) loan	Sep. 30, 2022 USD ($) loan	Sep. 30, 2021 USD ($) loan
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts | loan	0	1	0	2
Financing Receivable, Troubled Debt Restructuring, Premodification	$ 0	$ 144	$ 0	$ 303
Financing Receivable, Troubled Debt Restructuring, Postmodification	0	143	0	313
Allowance Related to Troubled Debt Restructurings assigned during period	$ 0	$ 6	$ 0	$ 62
Home equity | Interest Rate Concession and Payment Deferral
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts | loan			0	1
Financing Receivable, Troubled Debt Restructuring, Premodification			$ 0	$ 159
Financing Receivable, Troubled Debt Restructuring, Postmodification			0	170
Allowance Related to Troubled Debt Restructurings assigned during period			$ 0	$ 56
Home equity | Extended Maturity
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts | loan	0	1	0	1
Financing Receivable, Troubled Debt Restructuring, Premodification	$ 0	$ 144	$ 0	$ 144
Financing Receivable, Troubled Debt Restructuring, Postmodification	0	143	0	143
Allowance Related to Troubled Debt Restructurings assigned during period	$ 0	$ 6	$ 0	$ 6

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BORROWINGS (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Repurchase Agreements	$ 268,876	$ 211,608
Total short-term borrowings	421,101	211,608
Subordinated Debt	44,331	44,331
Short-term Debt [Member]
Debt Instrument [Line Items]
Repurchase Agreements	268,876	211,608
Federal Home Loan Bank, Advance, Maturity, Year One	50,000	0
FHLBB and Correspondent Bank Overnight Borrowings	$ 102,225	$ 0

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REPURCHASE AGREEMENTS (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	$ 268,876	$ 211,608
44834
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	268,876	211,608
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises | 44834
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	41,057	120,846
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises | 44834
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	224,819	88,749
Obligations of states and political subdivisions | 44834
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	3,000	2,013
Total Collateral -Dependent Non-Accrual Loans | 44834
Assets Sold under Agreements to Repurchase [Line Items]
Certificates of Deposit, at Carrying Value	$ 616	$ 728

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COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Legal Proceedings [Line Items]
Off-Balance Sheet, Credit Loss, Liability	$ 3,400,000		$ 3,400,000		$ 3,200,000
Off-Balance Sheet, Credit Loss, Liability, Credit Loss Expense (Reversal)	251,000	$ 670,000	246,000	$ 617,000
Loss Contingency Accrual	$ 0		$ 0		$ 0

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COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES (Summary of Contractual and Notional Amounts of FInancial Instruments) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financial Instruments [Line Items]
Contractual Amounts Of Financial Instrument	$ 881,446	$ 842,485
Commitments to Extend Credit [Member]
Financial Instruments [Line Items]
Contractual Amounts Of Financial Instrument	876,757	834,533
Standby Letters of Credit [Member]
Financial Instruments [Line Items]
Contractual Amounts Of Financial Instrument	$ 4,689	$ 7,952

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DERIVATIVES AND HEDGING (Narrative) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Other Commitments [Line Items]
Estimated amount to be reclassified as an increase to interest expense	$ 2,800
Estimated amount to be reclassified as an increase to interest income	2,600
Derivative liability, fair value, net	16,100	$ 26,100
Cash collateral	0	30,700
Termination value	$ 16,100	$ 26,100

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DERIVATIVES AND HEDGING (Schedule of derivative financial instruments) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Derivative [Line Items]
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Other assets	Other assets
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Accrued interest and other liabilities	Accrued interest and other liabilities
Interest rate contracts
Derivative [Line Items]
Fair Value	$ 13,806	$ 5,589
Fair Value	5,459	7,872
Designated as Hedging Instrument
Derivative [Line Items]
Fair Value	13,806	5,589
Fair Value	5,459	7,872
Designated as Hedging Instrument | Interest rate contracts
Derivative [Line Items]
Notional Amount	110,000	160,000
Fair Value	13,806	5,589
Notional Amount	133,000	83,000
Fair Value	5,459	7,872
Not Designated as Hedging Instrument
Derivative [Line Items]
Fair Value	16,441	19,754
Fair Value	16,529	19,582
Not Designated as Hedging Instrument | Customer loan swaps
Derivative [Line Items]
Notional Amount	264,758	345,545
Fair Value	16,112	19,297
Notional Amount	264,758	345,545
Fair Value	16,134	19,485
Not Designated as Hedging Instrument | Risk participation agreements
Derivative [Line Items]
Notional Amount	21,937	25,347
Fair Value	0	0
Notional Amount	44,741	53,704
Fair Value	0	0
Not Designated as Hedging Instrument | Fixed rate mortgage interest rate lock commitments
Derivative [Line Items]
Notional Amount	2,400	20,437
Fair Value	11	371
Notional Amount	12,166	8,587
Fair Value	395	91
Not Designated as Hedging Instrument | Forward delivery commitments
Derivative [Line Items]
Notional Amount	4,863	3,882
Fair Value	318	86
Notional Amount	0	1,903
Fair Value	$ 0	$ 6

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DERIVATIVES AND HEDGING (Schedule of cash flow hedging instruments, location) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	$ 727	$ 100	$ 2,280	$ 785
Amount of gain (loss) reclassified from AOCI into income	701	128	2,280	895
Net interest income	37,813	34,746	110,712	100,639
Cash Flow Hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	3,381	466	10,604	3,655
Amount of gain (loss) reclassified from AOCI into income	120	(129)	0	(507)
Cash Flow Hedging | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	(1,798)	48	(5,713)	(688)
Cash Flow Hedging | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	146	190	5,867	2,142
Cash Flow Hedging | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	2,544		2,544
Cash Flow Hedging | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	2,489	228	7,906	2,201
Cash Flow Hedging | Interest and fees on loans
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	(121)	410	498	1,205
Cash Flow Hedging | Interest and fees on loans | Reclassification out of Accumulated Other Comprehensive Income
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net interest income	37,568	31,185	102,724	92,610
Cash Flow Hedging | Interest and fees on loans | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	(121)	410	498	1,205
Cash Flow Hedging | Interest on deposits
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	189	(170)	72	(490)
Cash Flow Hedging | Interest on deposits | Reclassification out of Accumulated Other Comprehensive Income
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net interest income	5,442	1,973	9,785	5,957
Cash Flow Hedging | Interest on deposits | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	189	(170)	72	(490)
Cash Flow Hedging | Interest on borrowings
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	185		185
Cash Flow Hedging | Interest on borrowings | Reclassification out of Accumulated Other Comprehensive Income
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net interest income	787	122	1,372	454
Cash Flow Hedging | Interest on borrowings | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	185	0	185	0
Cash Flow Hedging | Interest on subordinated debentures
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	(133)	(369)	(755)	(1,222)
Cash Flow Hedging | Interest on subordinated debentures | Reclassification out of Accumulated Other Comprehensive Income
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net interest income	539	538	1,600	1,983
Cash Flow Hedging | Interest on subordinated debentures | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	(133)	(369)	(755)	(1,222)
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	3,381	466	10,604	3,655
Amount of gain (loss) reclassified from AOCI into income	120	(129)	0	(507)
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	(1,798)	48	(5,713)	(688)
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	146	190	5,867	2,142
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	2,544		2,544
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	2,489	228	7,906	2,201
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest and fees on loans
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	(121)	410	498	1,205
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest and fees on loans | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	(121)	410	498	1,205
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest on deposits
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	189	(170)	72	(490)
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest on deposits | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	189	(170)	72	(490)
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest on borrowings
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	185		185
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest on borrowings | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	185	0	185	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest on subordinated debentures
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	(133)	(369)	(755)	(1,222)
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest on subordinated debentures | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	(133)	(369)	(755)	(1,222)
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	0	0	0	0
Amount of gain (loss) reclassified from AOCI into income	0	0	0	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	0	0	0	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	0	0	0	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	0		0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	0		0	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest and fees on loans
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	0	0	0	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest and fees on loans | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	0	0	0	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest on deposits
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	0	0	0	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest on deposits | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	0	0	0	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest on borrowings
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	0		0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest on borrowings | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	0	0	0	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest on subordinated debentures
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	0		0	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest on subordinated debentures | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	$ 0	$ 0	$ 0	$ 0

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DERIVATIVES AND HEDGING (Schedule of derivatives effect on OCI) (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Derivative, Gain (Loss) on Derivative, Net	$ (218)	$ (369)	$ (260)	$ 100
Customer loan swaps
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Derivative, Gain (Loss) on Derivative, Net	28	0	166	0
Fixed rate mortgage interest rate lock commitments
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Derivative, Gain (Loss) on Derivative, Net	(473)	(434)	(664)	22
Forward delivery commitments
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Derivative, Gain (Loss) on Derivative, Net	$ 227	$ 65	$ 238	$ 78

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BALANCE SHEET OFFSETTING (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Offsetting Assets [Line Items]
Derivative Asset, Securities Purchased under Agreements to Resell, Securities Borrowed, Gross	$ 29,918	$ 24,886
Derivative Asset, Securities Purchased under Agreements to Resell, Securities Borrowed, Liability	0	0
Derivative Asset, Securities Purchased under Agreements to Resell, Securities Borrowed	29,918	24,886
Derivative Asset, Securities Purchased under Agreements to Resell, Securities Borrowed, Not Offset, Policy Election Deduction	0	0
Derivative Asset, Securities Purchased under Agreements to Resell, Securities Borrowed, Collateral, Obligation to Return Cash	(11,459)	(5,529)
Derivative Asset, Securities Purchased under Agreements to Resell, Securities Borrowed, Amount Offset Against Collateral	18,459	19,357
Derivative Liability, Securities Sold under Agreements to Repurchase, Securities Loaned, Gross	21,593	27,357
Derivative Liability, Securities Sold under Agreements to Repurchase, Securities Loaned, Asset	0	0
Derivative Liability, Securities Sold under Agreements to Repurchase, Securities Loaned	21,593	27,357
Derivative Liability, Securities Sold under Agreements to Repurchase, Securities Loaned, Not Offset, Policy Election Deduction	0	0
Derivative Liability, Securities Sold under Agreements to Repurchase, Securities Loaned, Collateral, Right to Reclaim Cash	5,459	26,088
Derivative Liability, Securities Sold under Agreements to Repurchase, Securities Loaned, Amount Offset Against Collateral	16,134	1,269
Securities Sold under Agreements to Repurchase, Gross	268,876	211,608
Securities Sold under Agreements to Repurchase, Asset	0	0
Securities Sold under Agreements to Repurchase	268,876	211,608
Derivative Liability, Securities Sold under Agreements to Repurchase, Securities Loaned, Collateral, Right to Reclaim Securities	268,876	211,608
Securities Sold under Agreements to Repurchase, Collateral, Right to Reclaim Cash	0	0
Securities Sold under Agreements to Repurchase, Amount Offset Against Collateral	0	0
Customer Loan Swap Dealer Bank [Member]
Offsetting Assets [Line Items]
Derivative Asset, Fair Value, Gross Asset	16,112
Derivative Asset, Fair Value, Gross Liability	0
Fair Value	16,112
Derivative Asset, Not Offset, Policy Election Deduction	0
Derivative, Collateral, Obligation to Return Cash	0
Derivative Asset, Fair Value, Amount Offset Against Collateral	16,112
Derivative Liability, Fair Value, Gross Liability		19,485
Derivative Liability, Fair Value, Gross Asset		0
Fair Value		19,485
Derivative Liability, Not Offset, Policy Election Deduction		0
Derivative, Collateral, Right to Reclaim Cash		19,485
Derivative Liability, Fair Value, Amount Offset Against Collateral		0
Customer Loan Swaps Commercial Customer [Member]
Offsetting Assets [Line Items]
Derivative Asset, Fair Value, Gross Asset		19,297
Derivative Asset, Fair Value, Gross Liability		0
Fair Value		19,297
Derivative Asset, Not Offset, Policy Election Deduction		0
Derivative, Collateral, Obligation to Return Cash		0
Derivative Asset, Fair Value, Amount Offset Against Collateral		19,297
Derivative Liability, Fair Value, Gross Liability	16,134
Derivative Liability, Fair Value, Gross Asset	0
Fair Value	16,134
Derivative Liability, Not Offset, Policy Election Deduction	0
Derivative, Collateral, Right to Reclaim Cash	0
Derivative Liability, Fair Value, Amount Offset Against Collateral	16,134
Interest rate contracts
Offsetting Assets [Line Items]
Derivative Asset, Fair Value, Gross Asset	13,806	5,589
Derivative Asset, Fair Value, Gross Liability	0	0
Fair Value	13,806	5,589
Derivative Asset, Not Offset, Policy Election Deduction	0	0
Derivative, Collateral, Obligation to Return Cash	(11,459)	(5,529)
Derivative Asset, Fair Value, Amount Offset Against Collateral	2,347	60
Derivative Liability, Fair Value, Gross Liability	5,459	7,872
Derivative Liability, Fair Value, Gross Asset	0	0
Fair Value	5,459	7,872
Derivative Liability, Not Offset, Policy Election Deduction	0	0
Derivative, Collateral, Right to Reclaim Cash	5,459	6,603
Derivative Liability, Fair Value, Amount Offset Against Collateral	$ 0	$ 1,269

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REGULATORY CAPITAL REQUIREMENTS Regulatory Capital Requirements (Narrative) (Details) $ in Thousands	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Banking Regulation, Total Risk-Based Capital Ratio, Capital Adequacy, Minimum	0.1050	0.1050
Banking Regulation, Tier One Risk-Based Capital Ratio, Capital Adequacy, Minimum	0.0850	0.0850
Common Equity Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	7.00%	7.00%
Banking Regulation, Tier One Leverage Capital Ratio, Capital Adequacy, Minimum	0.0400	0.0400
Value Of Trust Preferred Securities Included In Tier One Capital	$ 43,000	$ 43,000
Subordinated Debt	$ 44,331	$ 44,331
Minimum
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Banking Regulation, Total Risk-Based Capital Ratio, Capital Adequacy, Minimum	0.080
Banking Regulation, Tier One Risk-Based Capital Ratio, Capital Adequacy, Minimum	0.060
Common Equity Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	4.50%
Banking Regulation, Tier One Leverage Capital Ratio, Capital Adequacy, Minimum	0.040

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REGULATORY CAPITAL REQUIREMENTS (Details) $ in Thousands	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Banking Regulation, Total Capital, Actual	$ 547,244	$ 522,714
Banking Regulation, Total Risk-Based Capital Ratio, Actual	0.1381	0.1471
Banking Regulation, Total Risk-Based Capital Ratio, Capital Adequacy, Minimum	0.1050	0.1050
Banking Regulation, Total Risk-Based Capital Ratio, Well Capitalized, Minimum	0.1000	0.1000
Banking Regulation, Tier One Risk-Based Capital, Actual	$ 507,262	$ 486,263
Banking Regulation, Tier One Risk-Based Capital Ratio, Actual	0.1281	0.1368
Banking Regulation, Tier One Risk-Based Capital Ratio, Capital Adequacy, Minimum	0.0850	0.0850
Banking Regulation, Tier One Risk-Based Capital Ratio, Well Capitalized, Minimum	0.0600	0.0600
Common equity tier I capital	$ 464,262	$ 443,263
Common Equity Tier I Risk Based Capital Ratio	11.72%	12.47%
Common Equity Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	7.00%	7.00%
Banking Regulation, Tier One Leverage Capital, Actual	$ 507,262	$ 486,263
Banking Regulation, Excess Tier One Leverage Capital Ratio, Actual	0.0924	0.0892
Banking Regulation, Tier One Leverage Capital Ratio, Capital Adequacy, Minimum	0.0400	0.0400
Subsidiaries
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Banking Regulation, Total Capital, Actual	$ 516,673	$ 488,070
Banking Regulation, Total Risk-Based Capital Ratio, Actual	0.1307	0.1378
Banking Regulation, Total Risk-Based Capital Ratio, Capital Adequacy, Minimum	0.1050	0.1050
Banking Regulation, Total Risk-Based Capital Ratio, Well Capitalized, Minimum	0.1000	0.1000
Banking Regulation, Tier One Risk-Based Capital, Actual	$ 476,691	$ 451,620
Banking Regulation, Tier One Risk-Based Capital Ratio, Actual	0.1206	0.1275
Banking Regulation, Tier One Risk-Based Capital Ratio, Capital Adequacy, Minimum	0.0850	0.0850
Banking Regulation, Tier One Risk-Based Capital Ratio, Well Capitalized, Minimum	0.0800	0.0800
Common equity tier I capital	$ 476,691	$ 451,620
Common Equity Tier I Risk Based Capital Ratio	12.06%	12.75%
Common Equity Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	7.00%	7.00%
Common Equity Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	6.50%	6.50%
Banking Regulation, Tier One Leverage Capital, Actual	$ 476,691	$ 451,620
Banking Regulation, Excess Tier One Leverage Capital Ratio, Actual	0.0869	0.0831
Banking Regulation, Tier One Leverage Capital Ratio, Capital Adequacy, Minimum	0.0400	0.0400
Banking Regulation, Tier One Leverage Capital Ratio, Well Capitalized, Minimum	0.0500	0.0500

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OTHER COMPREHENSIVE INCOME (LOSS) Components of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021	Dec. 31, 2020
AFS Debt Securities:
Unrealized holding gains, pre-tax amount	$ (28,432)	$ (6,546)	$ (173,421)	$ (25,926)
Unrealized holdings gains, tax (expense) benefit	6,113	1,407	37,286	5,574
Unrealized holdings gains, after-tax amount	(22,319)	(5,139)	(136,135)	(20,352)
Less: reclassification adjustment for amortization of securities transferred from AFS to HTM, pre-tax amount	2,436	0	3,780	0
Less: reclassification adjustment for amortization of securities transferred from AFS to HTM, tax (expense) benefit	(524)	0	(813)	0
Less: reclassification adjustment for amortization of securities transferred from AFS to HTM, after-tax amount	1,912	0	2,967	0
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax			(9)	0
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax			2	0
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax			(7)	0
Net unrealized gains, pre-tax amount	(30,868)	(6,546)	(177,192)	(25,926)
Net unrealized gains, tax (expense) benefit	6,637	1,407	38,097	5,574
Net unrealized gains, after-tax amount	(24,231)	(5,139)	(139,095)	(20,352)
Cash Flow Hedges:
Net decrease in fair value, pre-tax amount	3,381	466	10,604	3,655
Net decrease in fair value, tax (expense) benefit	(727)	(100)	(2,280)	(785)
Net decrease in fair value, after-tax amount	2,654	366	8,324	2,870
Net decrease in fair value, pre-tax amount	3,261	595	10,604	4,162
Net decrease in fair value, tax (expense) benefit	(701)	(128)	(2,280)	(895)
Net decrease in fair value, after-tax amount	2,560	467	8,324	3,267
Postretirement Plans:
Net gain on postretirement plans, pre-tax amount	230	217	693	652
Net gain on postretirement plans, tax (expense) benefit	(49)	(46)	(149)	(140)
Net gain on postretirement plans, net of tax	181	171	544	512
Other comprehensive income, pre-tax amount	(27,377)	(5,734)	(165,895)	(21,112)
Other comprehensive income, tax (expense) benefit	5,887	1,233	35,668	4,539
Other comprehensive loss	(21,490)	(4,501)	(130,227)	(16,573)
Allowance for credit losses	36,542	32,272	36,542	32,272	$ 34,244	$ 33,256	$ 32,060	$ 37,865
Commercial real estate - non-owner-occupied, hospitality-related
Postretirement Plans:
Allowance for credit losses	0		0			$ 5,000
Interest Expense, Borrowings
Cash Flow Hedges:
Less: effective portion reclassified into interest expense, pre-tax amount	241	(539)	(498)	(1,712)
Less: effective portion reclassified into interest expense, tax (expense) benefit	(52)	116	107	368
Less: effective portion reclassified into interest expense, after-tax amount	189	(423)	(391)	(1,344)
Interest Income, Interest and Fees on Loans
Cash Flow Hedges:
Less: effective portion reclassified into interest expense, pre-tax amount	(121)	410	498	1,205
Less: effective portion reclassified into interest expense, tax (expense) benefit	26	(88)	(107)	(258)
Less: effective portion reclassified into interest expense, after-tax amount	$ (95)	$ 322	$ 391	$ 947

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OTHER COMPREHENSIVE INCOME (LOSS) Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	$ 446,381	$ 545,548	$ 541,294	$ 529,314
Other comprehensive (loss) income before reclassifications	(19,665)	(4,773)	(127,811)	(17,482)
Less: Amounts reclassified from AOCI	1,825	(272)	2,416	(909)
Other comprehensive loss	(21,490)	(4,501)	(130,227)	(16,573)
Ending Balance	431,007	545,984	431,007	545,984
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(114,966)	8,668	(6,229)	20,740
Ending Balance	(136,456)	4,167	(136,456)	4,167
Net Unrealized Gains (Losses) on Debt Securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(116,037)	14,097	(1,173)	29,310
Other comprehensive (loss) income before reclassifications	(22,319)	(5,139)	(136,135)	(20,352)
Less: Amounts reclassified from AOCI	1,912	0	2,960	0
Other comprehensive loss	(24,231)	(5,139)	(139,095)	(20,352)
Ending Balance	(140,268)	8,958	(140,268)	8,958
Net Unrealized Losses (Gains) on Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	3,985	(1,826)	(1,779)	(4,626)
Other comprehensive (loss) income before reclassifications	2,654	366	8,324	2,870
Less: Amounts reclassified from AOCI	94	(101)	0	(397)
Other comprehensive loss	2,560	467	8,324	3,267
Ending Balance	6,545	(1,359)	6,545	(1,359)
Defined Benefit Postretirement Plans
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(2,914)	(3,603)	(3,277)	(3,944)
Other comprehensive (loss) income before reclassifications	0	0	0	0
Less: Amounts reclassified from AOCI	(181)	(171)	(544)	(512)
Other comprehensive loss	181	171	544	512
Ending Balance	$ (2,733)	$ (3,432)	$ (2,733)	$ (3,432)

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REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 8,222	$ 8,163	$ 24,552	$ 23,039
Revenue Not from Contract with Customer	1,732	2,936	6,368	14,595
Noninterest Income	9,954	11,099	30,920	37,634
Products And Services, Debt Card Income [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	3,234	3,278	9,371	9,126
Products And Services, Deposit Accounts Service Charges [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	1,941	1,744	5,705	4,800
Products And Services, Fiduciary Services Income [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	1,535	1,627	4,847	4,860
Products And Services, Brokerage and Insurance Commissions [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	1,003	993	3,269	2,885
Products And Services, Other Income [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 509	$ 521	$ 1,360	$ 1,368

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EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Supplemental Employee Retirement Plan [Member]
Net periodic pension cost
Service cost	$ 133	$ 126	$ 400	$ 378
Interest cost	115	97	345	292
Recognized net actuarial loss	214	194	645	583
Net period benefit cost	462	417	1,390	1,253
Other Postretirement Benefit Plan
Net periodic pension cost
Service cost	5	7	15	20
Interest cost	28	26	84	77
Recognized net actuarial loss	22	29	66	87
Amortization of prior service credit	(6)	(6)	(18)	(18)
Net period benefit cost	$ 49	$ 56	$ 147	$ 166

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EPS (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share [Abstract]
Net income	$ 14,267	$ 14,640	$ 46,088	$ 52,523
Dividends and undistributed earnings allocated to participating securities	(39)	(40)	(121)	(145)
Net income available to common shareholders	$ 14,228	$ 14,600	$ 45,967	$ 52,378
Weighted-average common shares outstanding for basic EPS	14,619,460	14,931,056	14,670,450	14,930,387
Dilutive effect of stock-based awards (shares)	55,872	67,957	57,899	66,154
Weighted-average common and potential common shares for diluted EPS (shares)	14,675,332	14,999,013	14,728,349	14,996,541
Basic EPS (in dollars per share)	$ 0.97	$ 0.98	$ 3.13	$ 3.51
Diluted EPS (in dollars per share)	$ 0.97	$ 0.97	$ 3.12	$ 3.49

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EPS (Additional Information) (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Performance Shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Stock options (shares)	3,903	3,382	0	0

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FAIR VALUE MEASUREMENT AND DISCLOSURE (Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financial assets:
Trading securities	$ 3,727	$ 4,428
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	723,618	1,507,486
Loans held for sale	4,863	5,786
Financial liabilities:
Debt Securities, Trading	3,727	4,428
US Government-sponsored Enterprises Debt Securities [Member]
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)		8,344
Obligations of states and political subdivisions
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	51,474	117,478
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	529,788	1,000,257
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	121,811	358,849
Fair Value, Measurements, Recurring
Financial assets:
Trading securities	3,727	4,428
Loans held for sale	4,629	5,815
Financial liabilities:
Debt Securities, Trading	3,727	4,428
Fair Value, Measurements, Recurring | US Government-sponsored Enterprises Debt Securities [Member]
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)		8,344
Fair Value, Measurements, Recurring | Obligations of states and political subdivisions
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	51,474	117,478
Fair Value, Measurements, Recurring | Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	529,788	1,000,257
Fair Value, Measurements, Recurring | Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	121,811	358,849
Fair Value, Measurements, Recurring | Corporate Bond Securities [Member]
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	20,545	22,558
Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring
Financial assets:
Trading securities	3,727	4,428
Loans held for sale	0	0
Financial liabilities:
Debt Securities, Trading	3,727	4,428
Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring | US Government-sponsored Enterprises Debt Securities [Member]
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)		0
Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring | Obligations of states and political subdivisions
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	0	0
Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring | Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	0	0
Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring | Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	0	0
Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring | Corporate Bond Securities [Member]
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	0	0
Observable Market Data (Level 2) | Fair Value, Measurements, Recurring
Financial assets:
Trading securities	0	0
Loans held for sale	4,629	5,815
Financial liabilities:
Debt Securities, Trading	0	0
Observable Market Data (Level 2) | Fair Value, Measurements, Recurring | US Government-sponsored Enterprises Debt Securities [Member]
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)		8,344
Observable Market Data (Level 2) | Fair Value, Measurements, Recurring | Obligations of states and political subdivisions
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	51,474	117,478
Observable Market Data (Level 2) | Fair Value, Measurements, Recurring | Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	529,788	1,000,257
Observable Market Data (Level 2) | Fair Value, Measurements, Recurring | Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	121,811	358,849
Observable Market Data (Level 2) | Fair Value, Measurements, Recurring | Corporate Bond Securities [Member]
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	20,545	22,558
Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring
Financial assets:
Trading securities	0	0
Loans held for sale	0	0
Financial liabilities:
Debt Securities, Trading	0	0
Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring | US Government-sponsored Enterprises Debt Securities [Member]
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)		0
Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring | Obligations of states and political subdivisions
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	0	0
Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring | Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	0	0
Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring | Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	0	0
Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring | Corporate Bond Securities [Member]
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $833,888 and $1,508,981, respectively)	0	0
Interest Rate Lock Commitments [Member] | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	11	371
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value	395	91
Interest Rate Lock Commitments [Member] | Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	0	0
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value		0
Interest Rate Lock Commitments [Member] | Observable Market Data (Level 2) | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	11	371
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value	395	91
Interest Rate Lock Commitments [Member] | Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	0	0
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value	0	0
Forward delivery commitments | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	318	86
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value		6
Forward delivery commitments | Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	0	0
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value		0
Forward delivery commitments | Observable Market Data (Level 2) | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	318	86
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value		6
Forward delivery commitments | Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	0	0
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value		0
Customer loan swaps | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	16,112	19,297
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value	16,134	19,485
Customer loan swaps | Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	0	0
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value	0	0
Customer loan swaps | Observable Market Data (Level 2) | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	16,112	19,297
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value	16,134	19,485
Customer loan swaps | Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	0	0
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value	0	0
Interest rate contracts
Financial assets:
Fair Value	13,806	5,589
Financial liabilities:
Derivative Liability	5,459	7,872
Interest rate contracts | Fair Value, Measurements, Recurring
Financial assets:
Fair Value	13,806	5,589
Financial liabilities:
Derivative Liability	5,459	7,872
Interest rate contracts | Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring
Financial assets:
Fair Value	0	0
Financial liabilities:
Derivative Liability		0
Interest rate contracts | Observable Market Data (Level 2) | Fair Value, Measurements, Recurring
Financial assets:
Fair Value	13,806	5,589
Financial liabilities:
Derivative Liability	5,459	7,872
Interest rate contracts | Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring
Financial assets:
Fair Value	0	0
Financial liabilities:
Derivative Liability	$ 0	$ 0

XML

FAIR VALUE MEASUREMENT AND DISCLOSURE (Summary of Assets Measured at Fair Value on Non Recurring Basis) (Details) - Nonrecurring - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Collateral-dependent impaired loans
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
Fair Value	$ 69
Collateral-dependent impaired loans | Readily Available Market Prices (Level 1)
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
Fair Value	0
Collateral-dependent impaired loans | Observable Market Data (Level 2)
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
Fair Value	0
Collateral-dependent impaired loans | Company Determined Fair Value (Level 3)
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
Fair Value	$ 69
Servicing Contracts
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
Fair Value		$ 73
Servicing Contracts | Readily Available Market Prices (Level 1)
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
Fair Value		0
Servicing Contracts | Observable Market Data (Level 2)
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
Fair Value		0
Servicing Contracts | Company Determined Fair Value (Level 3)
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
Fair Value		$ 73

XML

FAIR VALUE MEASUREMENT AND DISCLOSURE (Schedule of Valuation Methodology and Unobservable Inputs) (Details) - Fair Value, Inputs, Level 3 [Member] - Nonrecurring $ in Thousands	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Specifically reserved
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Impaired Loans		$ 73
Partially charged-off
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Impaired Loans	$ 69
Estimated selling costs | Market Approach Valuation Technique | Specifically reserved
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Impaired Loans Specifically Reserved, Measurement Input		11
Estimated selling costs | Market Approach Valuation Technique | Partially charged-off
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Impaired Loans Partially Charged Off, Measurement Input	0.18

XML

FAIR VALUE MEASUREMENT AND DISCLOSURE (Schedule of Carrying Amounts and Estimated Fair Value for Financial Instrument Assets and Liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financial assets:
Held-to-maturity securities, at amortized cost	$ 534,309	$ 1,291
Held-to-maturity securities, fair value	491,759	1,380
Mortgage servicing rights	4,466	3,310
Financial liabilities:
Time deposits	270,794	409,264
Short-term Debt, Fair Value	420,608	211,586
Subordinated debentures	31,918	33,248
Commercial Real Estate
Financial assets:
Loans receivable, net of allowance	1,517,911	1,435,794
Commercial
Financial assets:
Loans receivable, net of allowance	412,670	356,463
SBA PPP
Financial assets:
Loans receivable, net of allowance	704	37,133
Residential real estate
Financial assets:
Loans receivable, net of allowance	1,424,504	1,297,592
Home equity
Financial assets:
Loans receivable, net of allowance	238,723	205,920
Consumer
Financial assets:
Loans receivable, net of allowance	18,277	17,551
Readily Available Market Prices (Level 1)
Financial assets:
Held-to-maturity securities, fair value	0	0
Mortgage servicing rights	0	0
Financial liabilities:
Time deposits	0	0
Short-term Debt, Fair Value	0	0
Subordinated debentures	0	0
Readily Available Market Prices (Level 1) | Commercial Real Estate
Financial assets:
Loans receivable, net of allowance	0	0
Readily Available Market Prices (Level 1) | Commercial
Financial assets:
Loans receivable, net of allowance	0	0
Readily Available Market Prices (Level 1) | SBA PPP
Financial assets:
Loans receivable, net of allowance	0	0
Readily Available Market Prices (Level 1) | Residential real estate
Financial assets:
Loans receivable, net of allowance	0	0
Readily Available Market Prices (Level 1) | Home equity
Financial assets:
Loans receivable, net of allowance	0	0
Readily Available Market Prices (Level 1) | Consumer
Financial assets:
Loans receivable, net of allowance	0	0
Observable Market Data (Level 2)
Financial assets:
Held-to-maturity securities, fair value	491,759	1,380
Mortgage servicing rights	0	0
Financial liabilities:
Time deposits	270,794	409,264
Short-term Debt, Fair Value	420,608	211,586
Subordinated debentures	31,918	33,248
Observable Market Data (Level 2) | Commercial Real Estate
Financial assets:
Loans receivable, net of allowance	0	0
Observable Market Data (Level 2) | Commercial
Financial assets:
Loans receivable, net of allowance	0	0
Observable Market Data (Level 2) | SBA PPP
Financial assets:
Loans receivable, net of allowance	0	0
Observable Market Data (Level 2) | Residential real estate
Financial assets:
Loans receivable, net of allowance	0	0
Observable Market Data (Level 2) | Home equity
Financial assets:
Loans receivable, net of allowance	0	0
Observable Market Data (Level 2) | Consumer
Financial assets:
Loans receivable, net of allowance	0	0
Company Determined Fair Value (Level 3)
Financial assets:
Held-to-maturity securities, fair value	0	0
Mortgage servicing rights	4,466	3,310
Financial liabilities:
Time deposits	0	0
Short-term Debt, Fair Value	0	0
Subordinated debentures	0	0
Company Determined Fair Value (Level 3) | Commercial Real Estate
Financial assets:
Loans receivable, net of allowance	1,517,911	1,435,794
Company Determined Fair Value (Level 3) | Commercial
Financial assets:
Loans receivable, net of allowance	412,670	356,463
Company Determined Fair Value (Level 3) | SBA PPP
Financial assets:
Loans receivable, net of allowance	704	37,133
Company Determined Fair Value (Level 3) | Residential real estate
Financial assets:
Loans receivable, net of allowance	1,424,504	1,297,592
Company Determined Fair Value (Level 3) | Home equity
Financial assets:
Loans receivable, net of allowance	238,723	208,934
Company Determined Fair Value (Level 3) | Consumer
Financial assets:
Loans receivable, net of allowance	18,277	17,551
Carrying Amount
Financial assets:
Held-to-maturity securities, at amortized cost	534,309	1,291
Mortgage servicing rights	2,470	2,471
Financial liabilities:
Time deposits	279,603	409,668
Short-term Debt, Fair Value	421,101	211,608
Subordinated debentures	44,331	44,331
Carrying Amount | Commercial Real Estate
Financial assets:
Loans receivable, net of allowance	1,543,107	1,474,087
Carrying Amount | Commercial
Financial assets:
Loans receivable, net of allowance	418,110	359,512
Carrying Amount | SBA PPP
Financial assets:
Loans receivable, net of allowance	684	35,934
Carrying Amount | Residential real estate
Financial assets:
Loans receivable, net of allowance	1,610,324	1,300,314
Carrying Amount | Home equity
Financial assets:
Loans receivable, net of allowance	231,507	208,934
Carrying Amount | Consumer
Financial assets:
Loans receivable, net of allowance	$ 20,406	$ 19,437