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, 2023

or

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 

For the transition period from____________to______________

Commission file number: 0-15536

CODORUS VALLEY BANCORP, INC. 

(Exact name of registrant as specified in its charter)

Pennsylvania	23-2428543
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

105 Leader Heights Road, York, Pennsylvania 17403 

(Address of principal executive offices)(Zip code)

717-747-1519

(Registrant’s telephone number, including area code)

Not Applicable 

(Former name, former address and former fiscal year, 

if changed since the last report.)

_____________________________________________

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

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $2.50 par value	CVLY	NASDAQ Global Market

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

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

Yes ☒   No ☐

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

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

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. On October 27, 2023, 9,611,110 shares of common stock, par value $2.50, were outstanding.

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Codorus Valley Bancorp, Inc.

Form 10-Q Index

PART I – FINANCIAL INFORMATION		Page #
Item 1.	Financial statements (unaudited):
	Consolidated balance sheets	3
	Consolidated statements of income	4
	Consolidated statements of comprehensive income (loss)	5
	Consolidated statements of cash flows	6
	Consolidated statements of changes in shareholders’ equity	7
	Notes to consolidated financial statements	8
Item 2.	Management’s discussion and analysis of financial condition and results of operations	40
Item 3.	Quantitative and qualitative disclosures about market risk	57
Item 4.	Controls and procedures	58
PART II – OTHER INFORMATION
Item 1.	Legal proceedings	58
Item 1A.	Risk factors	59
Item 2.	Unregistered sales of equity securities and use of proceeds	59
Item 3.	Defaults upon senior securities	59
Item 4.	Mine safety disclosures	59
Item 5.	Other information	59
Item 6.	Exhibits	60
SIGNATURES		61

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Codorus Valley Bancorp, Inc.

Consolidated Balance Sheets

(Unaudited)

	September 30,		December 31,
(dollars in thousands, except per share data)	2023		2022
Assets
Interest bearing deposits with banks	$	28,858		$	99,777
Cash and due from banks		22,449			20,662
Total cash and cash equivalents		51,307			120,439
Securities, available-for-sale, at fair value (amortized cost $391,694 net of
allowance for credit losses of $0)		335,656			345,457
Restricted investment in bank stocks, at cost		2,152			955
Loans held for sale		1,103			154
Loans (net of deferred fees of $3,718 - 2023 and $3,813 - 2022)		1,704,380			1,632,857
Less-allowance for credit losses (1)		(21,449)			(20,736)
Net loans		1,682,931			1,612,121
Premises and equipment, net		19,562			21,136
Operating leases right-of-use assets		2,618			3,072
Goodwill		2,301			2,301
Other assets		92,962			89,417
Total assets	$	2,190,592		$	2,195,052
Liabilities
Deposits
Noninterest bearing	$	398,486		$	463,853
Interest bearing		1,507,892			1,479,366
Total deposits		1,906,378			1,943,219
Short-term borrowings		39,099			11,605
Long-term debt and junior subordinated debt		11,528			11,550
Subordinated notes - face amount $31,000 (less discount and debt
issuance cost of $175 at September 30, 2023 and $236 at December 31, 2022)		30,825			30,764
Operating leases liabilities		2,726			3,204
Allowance for credit losses on off-balance sheet credit exposures		2,212			0
Other liabilities		14,461			17,410
Total liabilities		2,007,229			2,017,752
Shareholders' equity
Preferred stock, par value $2.50 per share;
1,000,000 shares authorized; shares issued and outstanding:
0 at September 30, 2023 and 0 at December 31, 2022		0			0
Common stock, par value $2.50 per share; 30,000,000 shares authorized;
shares issued: 9,883,660 at September 30, 2023 and December 31, 2022;
and shares outstanding: 9,618,854 at September 30, 2023 and 9,581,230 at December 31, 2022		24,709			24,709
Additional paid-in capital		142,525			141,896
Retained earnings		64,816			52,146
Accumulated other comprehensive loss		(42,869)			(34,764)
Treasury stock shares outstanding, at cost: 264,806 shares at September 30, 2023
and 302,430 at December 31, 2022		(5,818)			(6,687)
Total shareholders' equity		183,363			177,300
Total liabilities and shareholders' equity	$	2,190,592		$	2,195,052

(1) Results of reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP.

See accompanying notes.
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Codorus Valley Bancorp, Inc.

Consolidated Statements of Income

(Unaudited)

	Three months ended				Nine months ended
	September 30,				September 30,
(dollars in thousands, except per share data)	2023		2022		2023		2022
Interest income
Loans, including fees	$	26,000	$	18,994	$	73,837	$	51,463
Investment securities:
Taxable		2,562		2,069		7,511		5,081
Tax-exempt		106		113		306		317
Dividends		44		11		112		30
Other		361		1,486		1,590		2,362
Total interest income		29,073		22,673		83,356		59,253
Interest expense
Deposits		8,740		1,807		20,954		3,879
Federal funds purchased and other short-term borrowings		377		13		852		35
Long-term debt and junior subordinated debt		215		133		617		441
Subordinated notes		369		369		1,107		1,107
Total interest expense		9,701		2,322		23,530		5,462
Net interest income		19,372		20,351		59,826		53,791
Provision for (recovery of) credit losses - loans (1)		128		(567)		589		3,434
Provision for credit losses - unfunded commitments (1)		123		0		323		0
Net interest income after provision for (recovery of) credit losses		19,121		20,918		58,914		50,357
Noninterest income
Trust and investment services fees		1,293		1,141		3,770		3,440
Income from mutual fund, annuity and insurance sales		315		283		1,007		958
Service charges on deposit accounts		1,598		1,395		4,624		4,045
Income from bank owned life insurance		396		322		1,047		941
Other income		549		528		1,998		1,479
Gain on sales of loans held for sale		42		42		48		621
(Loss) gain on sales of assets held for sale		0		(100)		118		(100)
Loss on sales of securities		0		0		(388)		0
Total noninterest income		4,193		3,611		12,224		11,384
Noninterest expense
Personnel		9,412		9,243		27,943		26,124
Occupancy of premises, net		853		943		2,711		2,844
Furniture and equipment		798		852		2,514		2,551
Professional and legal		549		367		1,395		2,281
Marketing		347		507		1,010		1,340
FDIC insurance		245		190		739		617
Debit card processing		546		455		1,456		1,222
Charitable donations		62		56		993		971
External data processing		974		981		3,027		2,820
Impaired loan carrying costs (recovery)		107		217		(229)		512
Other		2,003		1,511		4,624		4,939
Total noninterest expense		15,896		15,322		46,183		46,221
Income before income taxes		7,418		9,207		24,955		15,520
Provision for income taxes		1,501		2,053		5,435		3,360
Net income	$	5,917	$	7,154	$	19,520	$	12,160
Net income per share, basic	$	0.62	$	0.75	$	2.03	$	1.28
Net income per share, diluted	$	0.61	$	0.75	$	2.03	$	1.27

(1) Results of reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior amounts continue to be reported in accordance with previously applicable GAAP.

See accompanying notes.
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Codorus Valley Bancorp, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

	Three months ended
	September 30,
(dollars in thousands)	2023		2022
Net income	$	5,917	$	7,154
Other comprehensive income (loss):
Securities available for sale:
Net unrealized holding losses arising during the period
(net of tax benefit of $2,218 and $4,005, respectively)		(7,219)		(13,037)
Net unrealized losses		(7,219)		(13,037)
Comprehensive loss	$	(1,302)	$	(5,883)
	Nine months ended
	September 30,
(dollars in thousands)	2023		2022
Net income	$	19,520	$	12,160
Other comprehensive income (loss):
Securities available for sale:
Net unrealized holding losses arising during the period
(net of tax benefit of $2,581 and $11,162, respectively)		(8,402)		(36,335)
Reclassification adjustment for losses included in net income
(net of tax benefit of $91 and $0, respectively) (a) (b)		297		0
Net unrealized losses		(8,105)		(36,335)
Comprehensive income (loss)	$	11,415	$	(24,175)

(a)Amounts are included in net gain (loss) on sales of securities on the Consolidated Statements of Income within noninterest income.

(b)Income tax amounts are included in the provision (benefit) for income taxes on the Consolidated Statements of Income.

See accompanying notes.

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Codorus Valley Bancorp, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	Nine months ended
	September 30,
(dollars in thousands)	2023		2022
Cash flows from operating activities
Net income	$	19,520	$	12,160
Adjustments to reconcile net income to net cash provided by operations:
Depreciation/software amortization		1,764		1,879
Net amortization expense		(482)		(886)
Net change in operating lease liabilities		(478)		(483)
Provision for credit losses on off-balance sheet credit exposures		323		0
Provision for credit losses on loans		589		3,434
Writedown of assets held for sale		95		91
Deferred income tax expense		(667)		0
Increase in bank owned life insurance		(1,047)		(941)
Originations of loans held for sale		(3,447)		(16,633)
Proceeds from sales of loans held for sale		2,547		24,259
Gain on sales of loans held for sale		(48)		(621)
(Gain) loss on disposal of premises and equipment		(118)		9
Loss on sales of securities, available-for-sale		388		0
Stock-based compensation		995		737
Increase in interest receivable		(235)		(854)
Decrease in other assets		1,297		3,058
Increase in interest payable		967		419
(Decrease) increase in other liabilities		(4,239)		2,232
Net cash provided by operating activities		17,724		27,860
Cash flows from investing activities
Purchases of securities, available-for-sale		(30,474)		(170,715)
Maturities, repayments and calls of securities, available-for-sale		24,745		33,653
Sales of securities, available-for-sale		4,253		0
Purchase of restricted investment in bank stock		(6,677)		0
Redemption of restricted investment in bank stock		5,480		356
Net increase in loans made to customers		(71,409)		(71,657)
Proceeds from sale of commercial loans held for sale		1,336		0
Purchases of premises and equipment		(1,503)		(1,170)
Investment in bank owned life insurance		0		(7)
Proceeds from bank owned life insurance		275		0
Proceeds from sale of fixed assets		685		0
Net cash used in investing activities		(73,289)		(209,540)
Cash flows from financing activities
Net decrease in demand and savings deposits		(98,430)		(61,206)
Net increase (decrease) in time deposits		61,589		(68,552)
Net increase in short-term borrowings		27,494		2,490
Repayment of long-term debt		0		(10,000)
Net change in finance lease liabilities		(22)		(21)
Cash dividends paid to shareholders		(4,701)		(4,281)
Payment of taxes related to stock withheld		(146)		(78)
Treasury stock reissued		1,040		664
Treasury stock repurchased		0		(34)
Proceeds from issuance of stock, net		(391)		0
Net cash used in financing activities		(13,567)		(141,018)
Net decrease in cash and cash equivalents		(69,132)		(322,698)
Cash and cash equivalents at beginning of year		120,439		545,494
Cash and cash equivalents at end of period	$	51,307	$	222,796

See accompanying notes.

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Codorus Valley Bancorp, Inc.

Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited)

							Accumulated
			Additional				Other
	Common		Paid-in		Retained		Comprehensive		Treasury
(dollars in thousands, except per share data)	Stock		Capital		Earnings		Loss		Stock		Total
Balance, January 1, 2023	$	24,709	$	141,896	$	52,146	$	(34,764)	$	(6,687)	$	177,300
Cumulative change in adoption of accounting principle ASC 326 as discussed in Note 1						(2,149)						(2,149)
Balance, January 1, 2023 (as adjusted for change in accounting principle)	$	24,709	$	141,896	$	49,997	$	(34,764)	$	(6,687)	$	175,151
Net income						6,992						6,992
Other comprehensive income, net of tax								3,823				3,823
Cash dividends ($0.16 per share)						(1,533)						(1,533)
Stock-based compensation				454								454
Forfeiture of restricted stock and withheld shares - 8,039 shares				25						(164)		(139)
Issuance and reissuance of stock:
6,079 shares under the dividend reinvestment and stock purchase plan				15						137		152
3,131 shares under the employee stock option plan				(25)						71		46
11,816 shares of stock-based compensation awards				(267)						267		0
Balance, March 31, 2023	$	24,709	$	142,098	$	55,456	$	(30,941)	$	(6,376)	$	184,946
Balance, April 1, 2023	$	24,709	$	142,098	$	55,456	$	(30,941)	$	(6,376)	$	184,946
Net income						6,611						6,611
Other comprehensive loss, net of tax								(4,709)				(4,709)
Cash dividends ($0.16 per share)						(1,535)						(1,535)
Stock-based compensation				276								276
Issuance and reissuance of stock:
9,021 shares under the dividend reinvestment and stock purchase plan				(55)						204		149
7,871 shares under employee stock purchase plan				(47)						178		131
Balance, June 30, 2023	$	24,709	$	142,272	$	60,532	$	(35,650)	$	(5,994)	$	185,869
Balance, July 1, 2023	$	24,709	$	142,272	$	60,532	$	(35,650)	$	(5,994)	$	185,869
Net income						5,917						5,917
Other comprehensive loss, net of tax								(7,219)				(7,219)
Cash dividends ($0.17 per share)						(1,633)						(1,633)
Stock-based compensation				265								265
Withheld stock - 358 shares										(7)		(7)
Issuance and reissuance of stock:
7,297 shares under the dividend reinvestment and stock purchase plan				(6)						165		159
805 shares under the stock option plan				(6)						18		12
Balance, September 30, 2023	$	24,709	$	142,525	$	64,816	$	(42,869)	$	(5,818)	$	183,363
Balance, January 1, 2022	$	24,708	$	142,067	$	37,769	$	(164)	$	(8,875)	$	195,505
Net income						3,053						3,053
Other comprehensive loss, net of tax								(13,793)				(13,793)
Cash dividends ($0.15 per share)						(1,421)						(1,421)
Stock-based compensation				289								289
Repurchased stock - 1,535 shares										(34)		(34)
Withheld stock - 3,177 shares										(70)		(70)
Issuance and reissuance of stock:
6,734 shares under the dividend reinvestment and stock purchase plan				20						126		146
3,137 shares under the employee stock option plan				(15)						59		44
50,559 shares of stock-based compensation awards				(952)						952		0
Balance, March 31, 2022	$	24,708	$	141,409	$	39,401	$	(13,957)	$	(7,842)	$	183,719
Balance, April 1, 2022	$	24,708	$	141,409	$	39,401	$	(13,957)	$	(7,842)	$	183,719
Net income						1,953						1,953
Other comprehensive loss, net of tax								(9,505)				(9,505)
Cash dividends ($0.15 per share)						(1,428)						(1,428)
Stock-based compensation				208								208
Forfeiture of restricted stock and withheld shares - 6,659 shares				91						(91)		0
Issuance and reissuance of stock:
6,348 shares under the dividend reinvestment and stock purchase plan				22						120		142
5,769 shares under the stock option plan				(48)						109		61
7,223 shares under employee stock purchase plan				(4)						136		132
Balance, June 30, 2022	$	24,708	$	141,678	$	39,926	$	(23,462)	$	(7,568)	$	175,282
Balance, July 1, 2022	$	24,708	$	141,678	$	39,926	$	(23,462)	$	(7,568)	$	175,282
Net income						7,154						7,154
Other comprehensive loss, net of tax								(13,037)				(13,037)
Cash dividends ($0.15 per share)						(1,432)						(1,432)
Stock-based compensation				240								240
Withheld stock - 375 shares										(8)		(8)
Issuance and reissuance of stock:
6,751 shares under the dividend reinvestment and stock purchase plan				12						128		140
473 shares of stock-based compensation awards		1		(1)								0
Balance, September 30, 2022	$	24,709	$	141,929	$	45,648	$	(36,499)	$	(7,448)	$	168,339

See accompanying notes. 

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Note 1—Summary of Significant Accounting Policies

Nature of Operations and Basis of Presentation

The accompanying consolidated balance sheet at December 31, 2022 has been derived from audited financial statements, and the unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, the instructions to Form 10-Q, and Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 270. Accordingly, the interim financial statements do not include all of the financial information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the interim consolidated financial statements include all adjustments necessary to present fairly the financial condition and results of operations for the reported periods, and all such adjustments are of a normal and recurring nature.

Codorus Valley Bancorp, Inc. (“Corporation” or “Codorus Valley”) is a bank holding company headquartered in York, Pennsylvania that provides a full range of banking services through its subsidiary, PeoplesBank, A Codorus Valley Company (“PeoplesBank” or “Bank”). As of September 30, 2023, PeoplesBank operates one wholly-owned subsidiary, Codorus Valley Financial Advisors, Inc. d/b/a PeoplesWealth Advisors, which sells nondeposit investment products. In addition, PeoplesBank may periodically create nonbank subsidiaries for the purpose of temporarily holding foreclosed properties pending the liquidation of these properties. PeoplesBank operates under a state charter and is subject to regulation by the Pennsylvania Department of Banking and Securities, and the Federal Deposit Insurance Corporation. The Corporation is subject to regulation by the Board of Governors of the Federal Reserve System and the Pennsylvania Department of Banking and Securities.

The consolidated financial statements include the accounts of Codorus Valley and its wholly-owned bank subsidiary, PeoplesBank, and a wholly-owned nonbank subsidiary, SYC Realty Company, Inc. SYC Realty was inactive during the period ended September 30, 2023. The accounts of CVB Statutory Trust No. I and No. II are not included in the consolidated financial statements as discussed in Note 6—Short-Term Borrowings and Long-Term Debt. All significant intercompany account balances and transactions have been eliminated in consolidation. The accounting and reporting policies of Codorus Valley and subsidiaries conform to accounting principles generally accepted in the United States of America and have been followed on a consistent basis.

These consolidated statements should be read in conjunction with the notes to the audited consolidated financial statements contained in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022.

The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year.

In accordance with FASB ASC 855, the Corporation evaluated the events and transactions that occurred after the balance sheet date of September 30, 2023 and through the date these consolidated financial statements were issued, for items of potential recognition or disclosure.

Allowance for Credit Losses—Available-for-Sale Securities

For available-for-sale debt securities in an unrealized loss position, the Corporation first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities available-for-sale that do not meet the aforementioned criteria, the Corporation evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit loss is recognized in other comprehensive income.

Changes in the allowance for credit losses are recorded as provision for credit loss expense (or reversal). Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable on available-for-sale debt securities, which totaled $1.6 million as of September 30, 2023, is excluded from the estimate of credit losses.

Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost, net of the allowance for credit losses. Amortized cost is the principal balance outstanding, net of deferred loan fees and costs. Accrued interest receivable totaled $5.3 million at September 30, 2023 and was reported in other assets on the consolidated balance sheets and is excluded from the estimate of credit losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. The loans receivable portfolio is disaggregated into segments. The segments include commercial,

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commercial real estate – construction, commercial real estate – owner occupied, commercial real estate – non-owner occupied, residential real estate – construction, residential real estate – revolving, residential real estate – multi family, residential real estate - other, and consumer loans.

Interest income on mortgage and commercial loans is discontinued and placed on nonaccrual status at the time the loan is 90 days delinquent unless the loan is well secured and in process of collection. Mortgage loans are charged off at 180 days past due, and commercial loans are charged off to the extent principal or interest is deemed uncollectible. Consumer loans continue to accrue interest until they are charged off no later than 120 days past due unless the loan is in the process of collection. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Under the cash-basis method, interest income is recorded when the payment is received in cash. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

As disclosed in Note 4—Loans and Allowance for Credit Losses, the Corporation engages in commercial and consumer lending. Loans are made within the Corporation’s primary market area and surrounding areas, and include the purchase of whole loan or participation interests in loans from other financial institutions. Commercial loans, which pose the greatest risk of loss to the Corporation, whether originated or purchased, are generally secured by real estate.

Allowance for credit losses – loans

The allowance for credit losses (“ACL”) is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

Management estimates the allowance balance using relevant available information from both internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors. These adjustments are commonly known as the Qualitative Framework.

In addition to the estimated quantitative credit loss for loans evaluated collectively, qualitative factors that may not be fully captured in the quantitative results are also evaluated. These include changes in lending policy, the nature and volume of the portfolio, overall business conditions in the economy, credit concentrations, competition, model imprecision, and legal and regulatory requirements. Qualitative adjustments are judgmental and are based on management’s knowledge of the portfolio and the markets in which the Corporation operates. Qualitative adjustments are evaluated and approved on a quarterly basis. Additionally, the ACL includes other allowance categories that are not directly incorporated in the quantitative results including loans in process.

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. Loans evaluated collectively for expected credit losses include loans on accrual status and loans initially evaluated individually but determined to not to have enhanced credit risk characteristics. The Corporation has identified the following portfolio segments:

Commercial loans

Commercial real estate – construction

Commercial real estate – owner occupied

Commercial real estate – non-owner occupied

Residential real estate – construction

Residential real estate – revolving

Residential real estate – multi family

Residential real estate – other

Consumer loans

The Corporation measures the allowance for credit losses using the following methods.

• Loans are aggregated into pools based on similar risk characteristics.

• The Probability of Default (PD) and Loss Given Default (LGD) CECL model components are determined based on loss estimates driven by historical experience at the input level.

• The PD model component uses "through the economic cycle transition" matrices based on the Corporation’s and peer group historical loan and transaction data across each pool of loans.

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• The LGD model component calculates a lifetime estimate across each pool of loans utilizing a nonparametric loss curve modeling approach.

• Reasonable and supportable forecasts are incorporated into the PD model component that are based on different economic forecasts and scenarios sourced from external parties. A future loss forecast over the reasonable and supportable forecast period of one year is based on the projected performance of specific economic variables that statistically correlate with the PD and LGD pools. After the reasonable and supportable forecast period, credit loss estimates revert over four quarters to input-level.

• Cash flow assumptions are established for each loan using maturity date, amortization schedule and interest rate.

• A constant prepayment rate is calculated for each loan pool in the CECL model.

Loans that do not share similar risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation. When management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.

Loans are modified if the Corporation grants borrowers experiencing financial difficulties concessions that it would not otherwise consider. Concessions granted under a modification may involve a reduction of the interest rate, forgiveness of principal, extension of the term of the loan, and/or other-than-insignificant payment delays.

Allowance for credit losses – off-balance sheet credit exposures

Effective January 1, 2023, the Corporation adopted ASC 326, at which time the Corporation estimated expected credit losses over the contractual period in which the Corporation is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Corporation. The allowance represents management’s estimate of expected losses in unfunded loan commitments and other noncancellable off-balance sheet credit exposures, such as letters of credit. The ACL specific to unfunded commitments is determined by estimating future draws and applying the expected loss rates on those draws. Future draws are based on historical averages of utilization rates, i.e., the likelihood of draws taken. Adjustments to the reserve for unfunded off-balance sheet credit exposures are recorded in provision for credit losses - unfunded off-balance sheet credit exposures in the Consolidated Statements of Income.

Loan-Level Interest Rate Swaps

PeoplesBank enters into loan-level interest rate swaps (“swaps”) to facilitate certain client transactions and to meet their financing needs.  These swaps qualify as derivatives, but are not designated as hedging instruments, which would be accounted for using hedge accounting.   A loan-level interest rate swap is a contract in which the series of interest rate flows (fixed and variable) are exchanged over the term of a loan with certain qualifying commercial loan clients, and PeoplesBank simultaneously enters into an interest rate swap with a dealer counterparty with identical notional amounts and terms. The net result of these swaps is that the client pays a fixed interest rate and PeoplesBank receives a floating interest rate.  The swap positions with clients are equally offset with the dealer counterparties to minimize the potential impact on PeoplesBank’s financial statements.

Pursuant to agreements with the dealer counterparties, PeoplesBank may receive collateral or may be required to post collateral based upon mark-to-market positions. Beyond unsecured threshold levels, collateral in the form of cash or securities may be made available to counterparties of interest rate swap transactions. Based upon the current positions and related future collateral requirements relating to them, PeoplesBank believes any effect on its cash flow or liquidity position to be immaterial.

Derivatives contain an element of credit risk, including the possibility that PeoplesBank will incur a loss because a party to the agreements, which may be a dealer counterparty or a client, fails to meet its contractual obligations. Derivative contracts may only be executed with dealer counterparties as approved by the Board of Directors.  Similarly, derivatives with clients may only be executed with clients within credit exposure limits approved by the Board of Directors.

Interest rate swaps, recorded at fair value, are included in other assets on the Consolidated Balance Sheets. Additional information is provided in Note 14 – Interest Rate Swaps.

Bank Premises and Equipment Held for Sale

Bank premises and equipment designated as held for sale are carried at the lower of cost or fair value, and, at September 30, 2023 consisted of a banking property totaling $1,269,000 and is included in other assets on the Consolidated Balance Sheets. The balance of $567,000 at December 31, 2022 consisted of one retail banking property, which closed in the second quarter of 2022.

Foreclosed Real Estate

Foreclosed real estate, included in other assets, is comprised of property acquired through a foreclosure proceeding or property that is acquired through in-substance foreclosure. Foreclosed real estate is initially recorded at fair value minus estimated costs to sell at the date of foreclosure, establishing a new cost basis. Any difference between the carrying value and the new cost basis is charged against the allowance for credit losses. Appraisals, obtained from an independent third party, are generally used to determine fair value. After

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foreclosure, management reviews valuations at least quarterly and adjusts the asset to the lower of cost or fair value minus estimated costs to sell through a valuation allowance or a write-down. Costs related to the improvement of foreclosed real estate are generally capitalized until the real estate reaches a saleable condition subject to fair value limitations. Revenue and expense from operations and changes in the valuation allowance are included in noninterest expense. When a foreclosed real estate asset is ultimately sold, any gain or loss on the sale is included in the income statement as a component of noninterest income or expense. At September 30, 2023 there was $383,000 of foreclosed commercial real estate compared to $479,000 at December 31, 2022. As of September 30, 2023, there was $219,000 consumer mortgage loans secured by residential real estate properties, for which formal foreclosure proceedings were in process according to local requirements of the applicable jurisdiction, compared to $124,000 as of December 31, 2022.

Mortgage Servicing Rights

Mortgage servicing rights (MSRs) associated with sold loans are included in other assets on the consolidated balance sheets at an amount equal to the estimated fair value of the contractual rights to service the mortgage loans. The MSR asset is amortized as a reduction to servicing income. The MSR asset is evaluated periodically for impairment and carried at the lower of amortized cost or fair value. An independent third party firm calculates fair value by discounting the estimated cash flows from servicing income using a rate consistent with the risk associated with these assets and an estimate of future net servicing income of the underlying loans. In the event that the amortized cost of the MSR asset exceeds the fair value of the asset, a valuation allowance would be established through a charge against servicing income. Subsequent fair value evaluations may determine that impairment has been reduced or eliminated, in which case the valuation allowance would be reduced through a credit to earnings. At September 30, 2023, the balance of residential mortgage loans serviced for third parties was $52,129,000 compared to $55,708,000 at December 31, 2022.

		Three months ended				Nine months ended
		September 30,				September 30,
(dollars in thousands)		2023		2022		2023		2022
Amortized cost:
Balance at beginning of period	$	248	$	315	$	279	$	380
Originations of mortgage servicing rights		0		0		0		6
Amortization expense		(10)		(20)		(41)		(91)
Balance at end of period	$	238	$	295	$	238	$	295

Goodwill and Core Deposit Intangible Assets

Goodwill arising from acquisitions is not amortized, but is subject to an annual impairment test. This test consists of a qualitative analysis. If the Corporation determines events or circumstances indicate that it is more likely than not that goodwill is impaired, a quantitative analysis must be completed. Analyses may also be performed between annual tests. Significant judgment is applied when goodwill is assessed for impairment. This judgment includes developing cash flow projections, selecting appropriate discount rates, identifying relevant market comparables, incorporating general economic and market conditions, and selecting an appropriate control premium. The Corporation completes its annual goodwill impairment test on October 1st of each year. Based upon a qualitative analysis of goodwill, the Corporation concluded that the amount of recorded goodwill was not impaired as of October 1, 2023. There were no conditions or events that would trigger an analysis or impairment since October 1, 2023.

Core deposit intangibles represent the value assigned to demand, interest checking, money market, and savings accounts acquired as part of an acquisition. The core deposit intangible value represents the future economic benefit of potential cost savings from acquiring core deposits as part of an acquisition compared to the cost of alternative funding sources and the alternative cost to grow a similar core deposit base. The core deposit intangible asset resulting from the merger with Madison Bancorp, Inc. was determined to have a definite life and is being amortized using the sum of the years’ digits method over ten years. All intangible assets must be evaluated for impairment if certain events or changes in circumstances occur. Any impairment write-downs would be recognized as expense on the consolidated statements of income. The core deposit intangible asset is included in other assets on the Consolidated Balance Sheets

Revenue from Contracts with Customers

Revenue from contracts with customers that are required to be recognized under FASB ASC Topic 606 - Revenue from Contracts with Customers (ASC 606) is measured based on consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. The Corporation recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer.

The majority of the Corporation’s revenue-generating transactions are not within the scope of ASC 606, including revenue generated from financial instruments, such as our loans, letters of credit, derivatives and investment securities, as well as revenue related to our mortgage servicing activities, as these activities are subject to other U.S. Generally Accepted Accounting Principles (GAAP) discussed elsewhere within our disclosures. Descriptions of our revenue-generating activities that are within the scope of ASC 606, which are presented in our consolidated statements of income as components of non-interest income are as follows:

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Trust and investment service fees: The Corporation provides trust, investment management custody and irrevocable life insurance trust services to clients. Such services are rendered in accordance with the underlying contracts for which fees are earned. The Corporation’s performance obligations are generally satisfied, and the related revenue recognized, over the period in which the service is provided. Payment for services rendered is primarily received in the following month.

Income from mutual fund, annuity and insurance sales: The Corporation sells mutual funds, annuity and insurance products to its clients. The Corporation’s performance obligation is met upon the signing of the product agreement and, in certain cases, a time component may exist when the client has the right to rescind the agreement with or without penalty. The Corporation recognizes revenues upon delivery of the product or service unless there is a time component in which case revenues are recognized utilizing the expected value method. Payment for services rendered is primarily received in the following month.

Service charges on deposits accounts: These represent general service fees for monthly account maintenance and activity- or transaction based fees and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Other service charges include revenue from processing wire transfers, cashier’s checks and other services. Revenue is recognized when the performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to the clients’ accounts.

Other noninterest income: The Corporation evaluated individual components of other noninterest income, such as credit card merchant fees, credit and gift card fees and ATM fees. Debit card income is primarily comprised of interchange fees earned whenever the Corporation’s debit cards are processed through payment networks, such as Visa. Credit and gift card income is realized through a third party provider who issues cards as private label in the Corporation’s name. ATM fees are primarily generated when a non-Corporation cardholder uses a Corporation ATM. The income is primarily comprised as a percentage of interchange fees earned whenever the issuer’s card is processed through card payment networks, such as Visa or Pulse. Merchant services income is realized through a referral agreement with a third party service provider. Amounts paid to the Corporation under the agreement are from fees charged to merchants for processing their debit card transactions. The Corporation’s performance obligation for these fees are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received within a one to three day lag or in the following month.

Per Share Data

The computation of net income per share is provided in the table below.

	Three months ended				Nine months ended
	September 30,				September 30,
(in thousands, except per share data)	2023		2022		2023		2022
Net income	$	5,917	$	7,154	$	19,520	$	12,160
Weighted average shares outstanding (basic)		9,616		9,545		9,600		9,521
Effect of dilutive stock options		15		23		18		29
Weighted average shares outstanding (diluted)		9,631		9,568		9,618		9,550
Basic earnings per share	$	0.62	$	0.75	$	2.03	$	1.28
Diluted earnings per share	$	0.61	$	0.75	$	2.03	$	1.27

Comprehensive Income

Accounting principles generally accepted in the United States require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the shareholders’ equity section of the balance sheet, such items, along with net income, are components of comprehensive income.

Cash Flow Information

For purposes of the consolidated statements of cash flows, the Corporation considers interest bearing deposits with banks, cash and due from banks, and federal funds sold to be cash and cash equivalents.

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Supplemental cash flow information is provided in the table below.

		Nine months ended
		September 30,
(dollars in thousands)		2023		2022
Cash paid during the period for:
Income taxes	$	7,630	$	531
Interest	$	22,563	$	5,044
Noncash investing and financing activities:
Transfer of loans to foreclosed real estate	$	0	$	479
Transfer of loans to held for sale	$	2,018	$	16,617
Transfer of premises and equipment to assets held for sale	$	1,269	$	109
Initial recognition of operating lease right-of-use assets	$	0	$	2,061
Initial recognition of operating lease liabilities	$	0	$	2,061

Recent Accounting Pronouncements

Pronouncements Adopted in 2023

On January 1, 2023, the Corporation adopted ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with Topic 842 on leases. In addition, ASC 326 made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities management does not intend to sell or believes that it is more likely than not they will be required to sell. The Corporation adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and off-balance-sheet (OBS) credit exposures. Results for reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Corporation recorded a net decrease to retained earnings of $2.1 million as of January 1, 2023 for the cumulative effect of adopting ASC 326. The transition adjustment included a $927,000 increase to ACL for loans, a $1.9 million increase in the ACL for unfunded commitments and a $667,000 increase in deferred tax assets.

At adoption, the Corporation changed the way the loan portfolio is segmented and now segments the portfolio based on collateral. Previously the Corporation segmented the loan portfolio based on industry.

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The following table illustrates the impact of ASC 326.

			January 1, 2023
					Reclassification to CECL		Post-CECL Adoption
(dollars in thousands)			Pre-CECL Adoption		Portfolio Segmentation		Portfolio Segmentation
Loans:
	Builder & developer	$	128,327	$	(128,327)	$	0
	Commercial real estate investor		367,366		(367,366)		0
	Commercial real estate-construction		0		144,782		144,782
	Commercial real estate-owner occupied		0		344,941		344,941
	Commercial real estate-non-owner occupied		0		445,408		445,408
	Residential real estate investor		263,262		(263,262)		0
	Residential real estate-construction		0		26,055		26,055
	Residential real estate-revolving		0		103,509		103,509
	Residential real estate-multi family		0		118,141		118,141
	Residential real estate-other		0		243,092		243,092
	Commercial		0		191,665		191,665
	Hotel/Motel		94,471		(94,471)		0
	Wholesale & retail		60,672		(60,672)		0
	Manufacturing		86,593		(86,593)		0
	Agriculture		91,449		(91,449)		0
	Service		73,094		(73,094)		0
	Commercial other		209,116		(209,116)		0
	Consumer		0		15,264		15,264
	Residential mortgage		135,340		(135,340)		0
	Home equity		98,030		(98,030)		0
	Consumer other		25,137		(25,137)		0
	Total	$	1,632,857	$	0	$	1,632,857

In March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings (TDRs), while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. ASU 2022-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. ASU 2022-02 did not have a material impact on the Corporation’s consolidated financial statements.

Note 2 – Securities

A summary of securities available-for-sale at September 30, 2023 and December 31, 2022 is provided below. The securities available-for-sale portfolio is generally comprised of high quality debt instruments, principally obligations of the United States government or agencies thereof, investments in the obligations of states and municipalities and selected corporate securities, including subordinated debt. At September 30, 2023 and December 31, 2022, there were no holdings of securities of any one issuer, other than the US Government and its agencies, in an amount greater than 10% of shareholders’ equity.

	Amortized			Allowance for	Gross Unrealized				Fair
(dollars in thousands)	Cost			Credit Losses	Gains		Losses		Value
September 30, 2023
Debt securities:
U.S. Treasury notes	$	19,804	$	0	$	0	$	(595)	$	19,209
U.S. agency		13,951		0		0		(1,518)		12,433
U.S. agency mortgage-backed, residential		284,345		0		4		(40,770)		243,579
State and municipal		35,399		0		3		(7,336)		28,066
Corporates		38,195		0		0		(5,826)		32,369
Total debt securities	$	391,694	$	0	$	7	$	(56,045)	$	335,656

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	Amortized		Gross Unrealized				Fair
(dollars in thousands)	Cost		Gains		Losses		Value
December 31, 2022
Debt securities:
U.S. Treasury notes	$	19,688	$	0	$	(588)	$	19,100
U.S. agency		12,750		0		(1,470)		11,280
U.S. agency mortgage-backed, residential		283,436		43		(33,377)		250,102
State and municipal		35,517		37		(6,155)		29,399
Corporates		39,531		0		(3,955)		35,576
Total debt securities	$	390,922	$	80	$	(45,545)	$	345,457

The proceeds from sales of securities and the associated gains and losses are listed below. Realized gains and losses are computed on the basis of specific identification of the adjusted cost of each security and are shown net as a separate line item in the income statement.

	Three months ended				Nine months ended
	September 30,				September 30,
(dollars in thousands)	2023		2022		2023		2022
Proceeds	$	0	$	0	$	4,253	$	0
Gross gains		0		0		0		0
Gross losses		0		0		(388)		0
Tax benefit		0		0		91		0

The amortized cost and estimated fair value of debt securities at September 30, 2023 by contractual maturity are shown below. Actual maturities may differ from contractual maturities if call options on select debt issues are exercised in the future. Mortgage-backed securities are included in the maturity categories based on average expected life.

	Available-for-sale
	Amortized		Fair
(dollars in thousands)	Cost		Value
Due in one year or less	$	9,908	$	9,698
Due after one year through five years		112,944		103,561
Due after five years through ten years		230,190		191,357
Due after ten years		38,652		31,040
Total debt securities	$	391,694	$	335,656

Investment securities having a carrying value of $227,602,000 and $204,887,000 on September 30, 2023 and December 31, 2022, respectively, were pledged to secure public and trust deposits, repurchase agreements and other short-term borrowings.

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The table below shows gross unrealized losses and fair value, aggregated by investment category and length of time, for securities that have been in a continuous unrealized loss position, for which an allowance for credit losses has not been recorded, at September 30, 2023 and December 31, 2022.

	Less than 12 months					12 months or more					Total
	Number of	Fair		Unrealized		Number of	Fair		Unrealized		Number of	Fair		Unrealized
(dollars in thousands)	Securities	Value		Losses		Securities	Value		Losses		Securities	Value		Losses
September 30, 2023
Debt securities:
U.S. Treasury notes	0	$	0	$	0	4	$	19,209	$	(595)	4	$	19,209	$	(595)
U.S. agency	3		1,913		(38)	9		10,520		(1,480)	12		12,433		(1,518)
U.S. agency mortgage-backed, residential	39		31,338		(1,065)	206		205,626		(39,705)	245		236,964		(40,770)
State and municipal	7		2,608		(215)	33		24,065		(7,121)	40		26,673		(7,336)
Corporates	2		1,169		(40)	30		29,699		(5,786)	32		30,868		(5,826)
Total temporarily impaired debt
securities, available-for-sale	51	$	37,028	$	(1,358)	282	$	289,119	$	(54,687)	333	$	326,147	$	(56,045)
December 31, 2022
Debt securities:
U.S. Treasury notes	4	$	19,100	$	(588)	0	$	0	$	0	4	$	19,100	$	(588)
U.S. agency	7	$	7,594	$	(656)	3	$	3,685	$	(814)	10	$	11,279	$	(1,470)
U.S. agency mortgage-backed, residential	147		140,409		(11,071)	72		102,061		(22,284)	219		242,470		(33,355)
State and municipal	6		2,334		(210)	35		25,121		(5,945)	41		27,455		(6,155)
Corporates	11		11,610		(831)	20		20,665		(3,124)	31		32,275		(3,955)
Total temporarily impaired debt
securities, available-for-sale	175	$	181,047	$	(13,356)	130	$	151,532	$	(32,167)	305	$	332,579	$	(45,523)

Securities available-for-sale are analyzed quarterly for impairment. The analysis considers, among other factors: 1) whether the Corporation has the intent to sell its securities prior to market recovery or maturity; 2) whether it is more likely than not that the Corporation will be required to sell its securities prior to market recovery or maturity; 3) default rates/history by security type; 4) third-party securities ratings; 5) third-party guarantees; 6) subordination; 7) payment delinquencies; 8) nature of the issuer; and 9) current financial news.

As of September 30, 2023, the Corporation’s security portfolio consisted of 344 securities, 333 of which were in an unrealized loss position. Through September 30, 2023 the Corporation has collected all interest and principal on its investment securities as scheduled. The majority of the unrealized losses are related to the Corporation’s mortgage-backed securities, as discussed below:

Mortgage-Backed Securities

At September 30, 2023, 100% of the mortgage-backed securities held by the Corporation were issued by U.S. government-sponsored entities and agencies. The decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Corporation does not have the intent to sell these mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Corporation does not consider these securities to have credit impairment at September 30, 2023.

Note 3—Restricted Investment in Bank Stocks

Restricted stock, which represents required investments in the common stock of correspondent banks, is carried at cost and, as of September 30, 2023 and December 31, 2022, consisted primarily of the common stock of the Federal Home Loan Bank of Pittsburgh (“FHLBP”) and, to a lesser degree, Atlantic Community Bancshares, Inc. (“ACBI”), the parent company of Atlantic Community Bankers Bank (“ACBB”). Under the FHLBP’s Capital Plan, member banks, including PeoplesBank, are required to maintain a minimum stock investment. The FHLBP uses a formula to determine the minimum stock investment, which is based on the volume of loans outstanding, unused borrowing capacity and other factors.

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The FHLBP paid dividends during the periods ended September 30, 2023 and 2022. The FHLBP restricts the repurchase of the excess capital stock of member banks. The amount of excess capital stock that can be repurchased from any member is currently the lesser of five percent of the member’s total capital stock outstanding or its excess capital stock outstanding.

Management evaluates the restricted stock for impairment in accordance with FASB ASC Topic 942. Management’s determination of whether these investments are impaired is based on their assessment of the ultimate recoverability of the cost rather than by recognizing temporary declines in value. Using the FHLBP as an example, the determination of whether a decline affects the ultimate recoverability of cost is influenced by criteria such as: (1) the significance of the decline in net assets of the FHLBP as compared to the capital stock amount for the FHLBP; (2) commitments by the FHLBP to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLBP; and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the FHLBP. Management believes no impairment charge was necessary related to the restricted stock during the periods ended September 30, 2023 and 2022.

Note 4—Loans and Allowance for Credit Losses

On January 1, 2023, the Corporation adopted ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. This change replaced the incurred loss model with a lifetime expected credit loss model.

At adoption, the Corporation changed the way the loan portfolio is segmented and now segments the portfolio based on collateral using federal call code targeting similar risk characteristics. Previously the Corporation segmented the loan portfolio based on industry. Management selected national civilian unemployment rates, housing price index and real gross domestic product (GDP) as the drivers of the quantitative portion of the collectively evaluated reserves. These third party supplied economic driver forecasts are updated within the model quarterly to calculate expected life and related loan default rates.

Loans that do not share similar risk characteristics are evaluated on an individual basis and are excluded from the quantitative calculations for the ACL. Loans that are individually evaluated under CECL will include loans in nonaccrual status and may include accruing loans that do not share similar risk characteristics within the evaluation. All individually evaluated loans in the current period were in nonaccrual status.

The ACL also includes a qualitative adjustment for risk factors that are not considered within the quantitative component or where the Company’s risk factors differ from the utilized peer data. Management may consider additional or reduced reserves to be warranted based on current and expected conditions. During the current quarter factors that were considered relevant by management in determining expected credit losses beyond the qualitative assessment include changes in:

Differences in lending policies, procedures, underwriting standards, charge off and recovery practices;

Changes in the nature and volume of the portfolio and terms of loans;

Changes in the experience, depth, and ability of lending management;

Delinquency trends;

Quality of the loan review system;

Value of underlying collateral;

Existence and effect of concentrations of credit and changes in the levels of such concentrations; and

The effect of other external factors including legal, competition, local economic and their impact on credit losses.

The qualitative adjustments and projected impact are reviewed and considered by the Corporation’s Chief Credit Officer in discussion with the appropriate finance and executive personnel. During the quarter ending September 30, 2023, the quantitative allowance was positively impacted by forecasted improvements in the macroeconomic conditions such as national civilian unemployment rates and GDP. While these changes project an improvement in credit conditions, a decrease was experienced in commercial real estate prices. This resulted in a decision to increase the qualitative loss risk related to changes in national, regional and local conditions along with changes in the value of underlying collateral for commercial real estate loans. This increased risk will continue to be monitored and would expect to remain until forecasts for the unemployment rate and GDP again align with projections for commercial real estate pricing. While other areas of risk beyond the quantitative risk have been identified within the model, no additional changes were considered warranted in the allocated reserve ratios within the current quarter.

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Loan Portfolio Composition

The table below provides the composition of the loan portfolio at September 30, 2023. The portfolio is comprised of nine segments, commercial, commercial real estate construction, commercial real estate owner occupied, commercial real estate non-owner occupied, residential real estate construction, residential real estate revolving, residential real estate multi family, residential real estate other and consumer as presented in the table below. Certain portfolio segments are further disaggregated for the purpose of estimating credit losses. The Corporation has not engaged in sub-prime residential mortgage originations.

	September 30,		% Total
(dollars in thousands)	2023		Loans
Commercial loans	$	171,490		10.1
Commercial real estate:
Construction		184,960		10.9
Owner occupied		347,857		20.4
Non-owner occupied		455,584		26.7
Residential real estate:
Construction		29,132		1.7
Revolving		105,169		6.2
Multi family		123,465		7.2
Other		273,170		16.0
Consumer		13,553		0.8
Gross Loans		1,704,380		100.0
Less: Allowance for credit losses		21,449
Net Loans	$	1,682,931

The table below provides the composition of the loan portfolio at December 31, 2022. The portfolio is comprised of two segments, commercial and consumer loans. The commercial loan segment is disaggregated by industry class which allows the Corporation to monitor risk and performance.

Those industries representing the largest dollar investment and most risk are listed separately. The “Other” commercial loans category is comprised of various industries. The consumer related segment is comprised of residential mortgages, home equity and other consumer loans.

	December 31,		% Total
(dollars in thousands)	2022		Loans
Builder & developer	$	128,327		7.9
Commercial real estate investor		367,366		22.5
Residential real estate investor		263,262		16.1
Hotel/Motel		94,471		5.8
Wholesale & retail		60,672		3.7
Manufacturing		86,593		5.3
Agriculture		91,449		5.6
Service		73,094		4.5
Other		209,116		12.8
Total commercial related loans		1,374,350		84.2
Residential mortgages		135,340		8.3
Home equity		98,030		6.0
Other		25,137		1.5
Total consumer related loans		258,507		15.8
Total loans	$	1,632,857		100.0

Management estimates the allowance balance using relevant available information from both internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors. These adjustments are commonly known as the Qualitative Framework.

In addition to the estimated quantitative credit loss for loans evaluated collectively, qualitative factors that may not be fully captured in the quantitative results are also evaluated. These include changes in lending policy, the nature and volume of the portfolio, overall

- 18 -

business conditions in the economy, credit concentrations, competition, model imprecision, and legal and regulatory requirements. Qualitative adjustments are judgmental and are based on management’s knowledge of the portfolio and the markets in which the Corporation operates. Qualitative adjustments are evaluated and approved on a quarterly basis. Additionally, the ACL includes other allowance categories that are not directly incorporated in the quantitative results including loans in process.

The following tables presents the activity in the allowance for credit losses by segment as of and for the three and nine months ended September 30, 2023.

(dollars in thousands)		Balance, July 1, 2023		Provision for credit losses		Loan charge-offs		Loan recoveries		Balance, September 30, 2023
Commercial loans	$	3,041	$	(614)	$	(190)	$	768	$	3,005
Commercial real estate:
Construction		3,542		451		0		0		3,993
Owner occupied		3,877		236		0		1		4,114
Non-owner occupied		6,125		36		0		0		6,161
Residential real estate:
Construction		93		(5)		0		0		88
Revolving		476		5		0		1		482
Multi family		1,907		75		0		0		1,982
Other		1,448		(43)		0		51		1,456
Consumer		172		(13)		(3)		12		168
Total	$	20,681	$	128	$	(193)	$	833	$	21,449

(dollars in thousands)		Balance, January 1, 2023 - Pre ASC 326 Adoption		Impact of adopting ASC 326		Provision for credit losses		Loan charge-offs		Loan recoveries		Balance, September 30, 2023
Commercial loans	$	4,783	$	(235)	$	(1,212)	$	(1,248)	$	917	$	3,005
Commercial real estate:
Construction		1,829		1,121		1,043		0		0		3,993
Owner occupied		4,341		(69)		484		(683)		41		4,114
Non-owner occupied		6,387		(468)		242		0		0		6,161
Residential real estate:
Construction		230		(144)		2		0		0		88
Revolving		417		192		(234)		(27)		134		482
Multi family		1,205		194		583		0		0		1,982
Other		1,511		169		(293)		0		69		1,456
Consumer		33		167		(26)		(27)		21		168
Total	$	20,736	$	927	$	589	$	(1,985)	$	1,182	$	21,449

- 19 -

The following table presents the activity in and the composition of the allowance for loan losses in accordance with previously applicable GAAP by loan segment and class detail as of and for the three and nine months ended September 30, 2022.

	Allowance for Loan Losses
	July 1, 2022								September 30, 2022
(dollars in thousands)	Balance		Charge-offs		Recoveries		Provision		Balance
Builder & developer	$	2,290	$	0	$	12	$	(176)	$	2,126
Commercial real estate investor		5,766		(22)		0		(13)		5,731
Residential real estate investor		3,483		(52)		1		(670)		2,762
Hotel/Motel		1,262		(10)		179		(345)		1,086
Wholesale & retail		518		0		0		17		535
Manufacturing		858		0		0		128		986
Agriculture		1,454		0		40		150		1,644
Service		827		(248)		1		443		1,023
Other commercial		5,936		0		6		(126)		5,816
Total commercial related loans		22,394		(332)		239		(592)		21,709
Residential mortgage		212		0		0		31		243
Home equity		195		0		24		(19)		200
Other consumer		75		(3)		6		2		80
Total consumer related loans		482		(3)		30		14		523
Unallocated		(11)		0		0		11		0
Total	$	22,865	$	(335)	$	269	$	(567)	$	22,232

	Allowance for Loan Losses
	January 1, 2022								September 30, 2022
(dollars in thousands)	Balance		Charge-offs		Recoveries		Provision		Balance
Builder & developer	$	2,408	$	0	$	12	$	(294)	$	2,126
Commercial real estate investor		5,647		(1,249)		0		1,333		5,731
Residential real estate investor		3,493		(52)		10		(689)		2,762
Hotel/Motel		968		(1,669)		179		1,608		1,086
Wholesale & retail		1,989		0		0		(1,454)		535
Manufacturing		883		0		0		103		986
Agriculture		1,307		(535)		40		832		1,644
Service		981		(736)		1		777		1,023
Other commercial		4,656		(3)		30		1,133		5,816
Total commercial related loans		22,332		(4,244)		272		3,349		21,709
Residential mortgage		186		0		0		57		243
Home equity		191		(49)		26		32		200
Other consumer		74		(6)		17		(5)		80
Total consumer related loans		451		(55)		43		84		523
Unallocated		(1)		0		0		1		0
Total	$	22,782	$	(4,299)	$	315	$	3,434	$	22,232

- 20 -

Non-accrual Loans

The table below presents a summary of non-accrual loans at September 30, 2023. An allowance is established for those individual loans where the Corporation has doubt as to the full recovery of the outstanding principal balance. Typically, individually evaluated consumer related loans are partially or fully charged-off eliminating the need for specific allowance. Interest income on loans with no related allowance is the result of interest collected on a cash basis.

		With a		Without a		Related		Interest Income
(dollars in thousands)		Related Allowance		Related Allowance		Allowance		Three months ended		Nine months ended
September 30, 2023
Commercial loans	$	1,988	$	1,996	$	1,092	$	136	$	381
Commercial real estate:
Construction				40		0		0		107
Owner occupied		0		2,043		0		0		53
Non-owner occupied		0		204		0		0		0
Residential real estate:
Construction		0		0		0		0		36
Revolving		0		506		0		0		27
Multi family		0		0		0		0		0
Other		0		828		0		0		38
Consumer		0		0		0		0		0
Total	$	1,988	$	5,617	$	1,092	$	136	$	642

The table below presents a summary of impaired loans at December 31, 2022 . Generally, impaired loans are all loans risk rated nonaccrual or classified troubled debt restructuring. An allowance is established for those individual loans where the Corporation has doubt as to the full recovery of the outstanding principal balance. Typically, impaired consumer related loans are partially or fully charged-off, eliminating the need for specific allowance. The recorded investment represents outstanding unpaid principal loan balances adjusted for payments collected on a non-cash basis and charged-offs.

	With No Allowance				With A Related Allowance						Total
	Recorded		Unpaid		Recorded		Unpaid		Related		Recorded		Unpaid
(dollars in thousands)	Investment		Principal		Investment		Principal		Allowance		Investment		Principal
December 31, 2022
Builder & developer	$	1,901	$	2,644	$	44	$	44	$	44	$	1,945	$	2,688
Commercial real estate investor		500		500		0		0		0		500		500
Residential real estate investor		647		665		209		215		152		856		880
Hotel/Motel		0		0		0		0		0		0		0
Wholesale & retail		0		0		0		0		0		0		0
Manufacturing		2,783		2,877		182		183		33		2,965		3,060
Agriculture		164		210		748		930		655		912		1,140
Service		0		0		0		0		0		0		0
Other commercial		1,836		3,037		1,600		2,338		1,600		3,436		5,375
Total impaired commercial related loans		7,831		9,933		2,783		3,710		2,484		10,614		13,643
Residential mortgage		1,112		1,115		0		0		0		1,112		1,115
Home equity		457		512		0		0		0		457		512
Other consumer		0		0		0		0		0		0		0
Total impaired consumer related loans		1,569		1,627		0		0		0		1,569		1,627
Total impaired loans	$	9,400	$	11,560	$	2,783	$	3,710	$	2,484	$	12,183	$	15,270

- 21 -

The tables below presents a summary of average impaired loans and related interest income that was included for the three and nine months ended September 30, 2022. Interest income on loans with no related allowance is the result of interest collected on a cash basis.

	With No Related Allowance				With A Related Allowance				Total
	Average		Total		Average		Total		Average		Total
	Recorded		Interest		Recorded		Interest		Recorded		Interest
(dollars in thousands)	Investment		Income		Investment		Income		Investment		Income
Three months ended September 30, 2022
Builder & developer	$	982	$	0	$	1,492	$	0	$	2,474	$	0
Commercial real estate investor		2,855		4		0		0		2,855		4
Residential real estate investor		711		4		213		0		924		4
Hotel/Motel		0		0		0		0		0		0
Wholesale & retail		0		0		0		0		0		0
Manufacturing		4,023		0		0		0		4,023		0
Agriculture		405		0		748		0		1,153		0
Service		0		0		0		0		0		0
Other commercial		0		0		4,179		0		4,179		0
Total impaired commercial related loans		8,976		8		6,632		0		15,608		8
Residential mortgage		842		6		0		0		842		6
Home equity		470		0		0		0		470		0
Other consumer		44		15		0		0		44		15
Total impaired consumer related loans		1,356		21		0		0		1,356		21
Total impaired loans	$	10,332	$	29	$	6,632	$	0	$	16,964	$	29

	With No Related Allowance				With A Related Allowance				Total
	Average		Total		Average		Total		Average		Total
	Recorded		Interest		Recorded		Interest		Recorded		Interest
(dollars in thousands)	Investment		Income		Investment		Income		Investment		Income
Nine months ended September 30, 2022
Builder & developer	$	986	$	0	$	746	$	0	$	1,732	$	0
Commercial real estate investor		2,993		18		469		0		3,462		18
Residential real estate investor		466		27		106		0		572		27
Hotel/Motel		6,067		0		0		0		6,067		0
Wholesale & retail		0		0		0		0		0		0
Manufacturing		4,478		37		0		0		4,478		37
Agriculture		1,482		501		771		0		2,253		501
Service		0		0		486		0		486		0
Other commercial		996		177		3,596		0		4,592		177
Total impaired commercial related loans		17,468		760		6,174		0		23,642		760
Residential mortgage		452		13		280		8		732		21
Home equity		459		27		0		0		459		27
Other consumer		69		15		0		0		69		15
Total impaired consumer related loans		980		55		280		8		1,260		63
Total impaired loans	$	18,448	$	815	$	6,454	$	8	$	24,902	$	823

As of September 30, 2023 and December 31, 2022, there were approximately $5,600,000 and $9,400,000, respectively, of non-accrual loans that did not have a related allowance for credit losses. The estimated fair value of the collateral securing these loans exceeded their carrying amount, or the loans were previously charged down to realizable collateral values. Accordingly, no allowance for credit losses was considered to be necessary.

- 22 -

The table below shows the allowance amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for December 31, 2022.

	Allowance for Loan Losses						Loans
	Individually		Collectively				Individually		Collectively
	Evaluated For		Evaluated For				Evaluated For		Evaluated For
(dollars in thousands)	Impairment		Impairment		Balance		Impairment		Impairment		Balance
December 31, 2022
Builder & developer	$	44	$	1,725	$	1,769	$	1,945	$	126,382	$	128,327
Commercial real estate investor		0		4,858		4,858		500		366,866		367,366
Residential real estate investor		152		2,661		2,813		856		262,406		263,262
Hotel/Motel		0		1,658		1,658		0		94,471		94,471
Wholesale & retail		0		488		488		0		60,672		60,672
Manufacturing		33		897		930		2,965		83,628		86,593
Agriculture		655		990		1,645		912		90,537		91,449
Service		0		1,064		1,064		0		73,094		73,094
Other commercial		1,600		3,352		4,952		3,436		205,680		209,116
Total commercial related		2,484		17,693		20,177		10,614		1,363,736		1,374,350
Residential mortgage		0		270		270		1,112		134,228		135,340
Home equity		0		207		207		457		97,573		98,030
Other consumer		0		82		82		0		25,137		25,137
Total consumer related		0		559		559		1,569		256,938		258,507
Unallocated		0		0		0		0		0		0
Total	$	2,484	$	18,252	$	20,736	$	12,183	$	1,620,674	$	1,632,857

Asset Quality

The Corporation’s internal risk rating system follows regulatory guidance as to risk classifications and definitions. Every approved loan is assigned a risk rating. Generally, risk ratings for commercial related loans are determined by a formal evaluation of risk factors performed by the Corporation’s underwriting staff. For consumer and residential mortgage loans, the bank follows the Uniform Retail Credit Classification guidance. Commercial loans up to $500,000 may be scored using a third-party credit scoring software model for risk rating purposes. The loan portfolio is monitored on a continuous basis by loan officers, loan review personnel and senior management. Adjustments of loan risk ratings within the Watch, Criticized and Classified categories are generally performed by the Watch and Special Asset Committees, which includes senior management. The Committees, which typically meet at least quarterly, make changes, as appropriate, to these risk ratings. In addition to review by the Committees, existing loans are monitored by the primary loan officer and loan portfolio risk management officer to determine if any changes, upward or downward, in risk ratings are appropriate. Primary loan officers may recommend a change to a risk rating and internal loan review officers may downgrade existing loans, except to non-accrual status. Only the President/CEO or CFO may approve a downgrade of a loan to non-accrual status. The Special Asset Committee or President/CEO may upgrade a loan that is criticized or classified.

The Corporation uses eleven risk ratings to grade commercial loans. The first six ratings are considered “pass” ratings. A pass rating is a satisfactory credit rating, which applies to a loan that is expected to perform in accordance with the loan agreement and has a low probability of loss. A loan rated “special mention” has a potential weakness which may, if not corrected, weaken the loan or inadequately protect the Corporation’s position at some future date. A loan rated “substandard” is inadequately protected by the current net worth or paying capacity of the obligor, or of the collateral pledged. A “substandard” loan has a well-defined weakness or weaknesses that could jeopardize liquidation of the loan, which exposes the Corporation to potential loss if the deficiencies are not corrected. When circumstances indicate that collection of the loan is doubtful, the loan is risk-rated “nonaccrual,” the accrual of interest income is discontinued, and any unpaid interest previously credited to income is reversed.

‎

- 23 -

The following table summarizes designated internal risk rating categories by portfolio segment, by origination year, in the current period. It does not include the regulatory classification of “doubtful,” nor does it include the regulatory classification of “loss”, because the Corporation promptly charges off loan losses.

	Term Loans Amortized Cost Basis by Origination Year															Revolving Loans
														Revolving Loans		converted to Term
														Amortized Cost		Loans Amortized
(dollars in thousands)		2023		2022		2021		2020		2019		Prior		Basis		Cost Basis		Total
Commercial loans
Pass	$	14,196	$	44,255	$	15,949	$	4,712	$	10,760	$	9,893	$	51,716	$	0	$	151,481
Special Mention		0		0		50		0		563		137		3,374		0		4,124
Substandard		38		649		2,784		13		12		1,168		7,237		0		11,901
Nonaccrual		0		360		599		0		625		1,000		1,400		0		3,984
Total		14,234		45,264		19,382		4,725		11,960		12,198		63,727		0		171,490
Gross write-offs		0		(26)		0		(15)		0		(968)		(239)		0		(1,248)
Commercial real estate:
Construction
Pass	$	41,980	$	74,921	$	31,133	$	11,922	$	7,966	$	8,474	$	2,831	$	0	$	179,227
Special Mention		0		605		0		1,679		0		0		1,000		0		3,284
Substandard		0		0		0		2,409		0		0		0		0		2,409
Nonaccrual		0		0		0		0		0		40		0		0		40
Total		41,980		75,526		31,133		16,010		7,966		8,514		3,831		0		184,960
Gross write-offs		0		0		0		0		0		0		0		0		0
Owner occupied
Pass	$	33,433	$	60,051	$	66,381	$	24,657	$	34,689	$	94,644	$	16,803	$	0	$	330,658
Special Mention		140		0		0		2,519		0		4,151		0		0		6,810
Substandard		250		0		1,263		0		0		6,404		429		0		8,346
Nonaccrual		0		0		1,785		0		0		258		0		0		2,043
Total		33,823		60,051		69,429		27,176		34,689		105,457		17,232		0		347,857
Gross write-offs		0		0		0		0		0		(683)		0		0		(683)
Non-owner occupied
Pass	$	33,056	$	120,640	$	111,199	$	63,341	$	11,542	$	111,059	$	1,439	$	0	$	452,276
Special Mention		0		0		1,197		0		0		950		0		0		2,147
Substandard		0		0		0		0		0		957		0		0		957
Nonaccrual		0		0		0		50		0		154		0		0		204
Total		33,056		120,640		112,396		63,391		11,542		113,120		1,439		0		455,584
Gross write-offs		0		0		0		0		0		0		0		0		0
Residential real estate:
Construction
Pass	$	8,388	$	13,824	$	2,155	$	972	$	1,556	$	540	$	1,697	$	0	$	29,132
Special Mention		0		0		0		0		0		0		0		0		0
Substandard		0		0		0		0		0		0		0		0		0
Nonaccrual		0		0		0		0		0		0		0		0		0
Total		8,388		13,824		2,155		972		1,556		540		1,697		0		29,132
Gross write-offs		0		0		0		0		0		0		0		0		0
Revolving
Pass	$	9,616	$	16,462	$	1,099	$	333	$	638	$	2,102	$	74,413	$	0	$	104,663
Special Mention		0		0		0		0		0		0		0		0		0
Substandard		0		0		0		0		0		0		0		0		0
Nonaccrual		0		34		0		0		0		0		472		0		506
Total		9,616		16,496		1,099		333		638		2,102		74,885		0		105,169
Gross write-offs		0		0		0		0		0		(8)		(19)		0		(27)

- 24 -

Multi family
Pass	$	5,418	$	26,836	$	32,980	$	19,625	$	23,934	$	9,442	$	1,003	$	0	$	119,238
Special Mention		0		0		0		0		0		1,800		0		0		1,800
Substandard		0		0		0		0		0		2,427		0		0		2,427
Nonaccrual		0		0		0		0		0		0		0		0		0
Total		5,418		26,836		32,980		19,625		23,934		13,669		1,003		0		123,465
Gross write-offs		0		0		0		0		0		0		0		0		0
Other
Pass	$	50,055	$	63,283	$	43,265	$	38,398	$	18,221	$	56,723	$	956	$	0	$	270,901
Special Mention		0		0		0		52		0		1,012		42		0		1,106
Substandard		0		0		0		130		0		205		0		0		335
Nonaccrual		0		0		292		0		0		536		0		0		828
Total		50,055		63,283		43,557		38,580		18,221		58,476		998		0		273,170
Gross write-offs		0		0		0		0		0		0		0		0		0
Consumer
Pass	$	3,843	$	3,622	$	1,708	$	204	$	111	$	277	$	3,788	$	0	$	13,553
Special Mention		0		0		0		0		0		0		0		0		0
Substandard		0		0		0		0		0		0		0		0		0
Nonaccrual		0		0		0		0		0		0		0		0		0
Total		3,843		3,622		1,708		204		111		277		3,788		0		13,553
Gross write-offs		0		(2)		0		(2)		0		(1)		(22)		0		(27)
Total Loans
Pass	$	199,985	$	423,894	$	305,869	$	164,164	$	109,417	$	293,154	$	154,646	$	0	$	1,651,129
Special Mention		140		605		1,247		4,250		563		8,050		4,416		0		19,271
Substandard		288		649		4,047		2,552		12		11,161		7,666		0		26,375
Nonaccrual		0		394		2,676		50		625		1,988		1,872		0		7,605
Total		200,413		425,542		313,839		171,016		110,617		314,353		168,600		0		1,704,380
Total Gross Charge-Offs	$	0	$	(28)	$	0	$	(17)	$	0	$	(1,660)	$	(280)	$	0	$	(1,985)

			Special
(dollars in thousands)	Pass		Mention		Substandard		Nonaccrual		Total
December 31, 2022
Builder & developer	$	124,572	$	1,010	$	972	$	1,773	$	128,327
Commercial real estate investor		367,144		0		0		222		367,366
Residential real estate investor		262,406		0		0		856		263,262
Hotel/Motel		89,710		0		4,761		0		94,471
Wholesale & retail		59,930		56		686		0		60,672
Manufacturing		81,552		1,444		632		2,965		86,593
Agriculture		87,896		2,260		381		912		91,449
Service		68,373		384		4,337		0		73,094
Other		192,194		4,934		8,552		3,436		209,116
Total commercial related loans		1,333,777		10,088		20,321		10,164		1,374,350
Residential mortgage		134,850		0		141		349		135,340
Home equity		97,573		0		0		457		98,030
Other		25,137		0		0		0		25,137
Total consumer related loans		257,560		0		141		806		258,507
Total loans	$	1,591,337	$	10,088	$	20,462	$	10,970	$	1,632,857

- 25 -

The performance and credit quality of the loan portfolio is also monitored by using an aging schedule that shows the length of time a loan is past due. The table below presents a summary of past due loans, nonaccrual loans and current loans by class segment at September 30, 2023.

						≥ 90 Days				Total Past
		30-59 Days		60-89 Days		Past Due				Due and
(dollars in thousands)		Past Due		Past Due		and Accruing		Nonaccrual		Nonaccrual		Current		Total Loans
September 30, 2023
Commercial loans	$	50	$	0	$	0	$	3,984	$	4,034	$	167,456	$	171,490
Commercial real estate:
Construction		0		1,679		0		40		1,719		183,241		184,960
Owner occupied		0		0		0		2,043		2,043		345,814		347,857
Non-owner occupied		0		0		0		204		204		455,380		455,584
Residential real estate:
Construction		0		0		0		0		0		29,132		29,132
Revolving		246		0		0		506		752		104,417		105,169
Multi family		0		0		0		0		0		123,465		123,465
Other		3		0		0		828		831		272,339		273,170
Consumer		24		0		0		0		24		13,529		13,553
Total	$	323	$	1,679	$	0	$	7,605	$	9,607	$	1,694,773	$	1,704,380

The performance and credit quality of the loan portfolio is also monitored by using an aging schedule that shows the length of time a loan is past due. The table below presents a summary of past due loans, nonaccrual loans and current loans by class segment at December 31, 2022.

					≥ 90 Days
	30-59		60-89		Past Due				Total Past
	Days		Days		and				Due and				Total
(dollars in thousands)	Past Due		Past Due		Accruing		Nonaccrual		Nonaccrual		Current		Loans
December 31, 2022
Builder & developer	$	3,500	$	0	$	0	$	1,773	$	5,273	$	123,054	$	128,327
Commercial real estate investor		0		0		0		222		222		367,144		367,366
Residential real estate investor		0		0		0		856		856		262,406		263,262
Hotel/Motel		0		0		0		0		0		94,471		94,471
Wholesale & retail		0		0		0		0		0		60,672		60,672
Manufacturing		0		0		0		2,965		2,965		83,628		86,593
Agriculture		8		0		0		912		920		90,529		91,449
Service		0		0		0		0		0		73,094		73,094
Other		0		0		0		3,436		3,436		205,680		209,116
Total commercial related loans		3,508		0		0		10,164		13,672		1,360,678		1,374,350
Residential mortgage		207		0		0		349		556		134,784		135,340
Home equity		345		94		0		457		896		97,134		98,030
Other		7		42		0		0		49		25,088		25,137
Total consumer related loans		559		136		0		806		1,501		257,006		258,507
Total loans	$	4,067	$	136	$	0	$	10,970	$	15,173	$	1,617,684	$	1,632,857

Collateral Dependent Loans

A loan is considered to be collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. For all classes of loans deemed collateral-dependent, the Corporation elected the practical expedient to estimate expected credit losses based on the collateral’s fair value less cost to sell. In most cases, the Corporation records a partial charge-off to reduce the loan’s carrying value to the collateral’s fair value less cost to sell. Substantially all of the collateral supporting collateral-dependent financial assets consists of various types of real estate, including residential properties, commercial properties, such as retail centers, office buildings, lodging, agriculture land, and vacant land. At September 30, 2023 collateral dependent loans totaled $7,600,000.

- 26 -

Modifications

Occasionally, the Corporation modifies loans to borrowers in financial distress by providing principal forgiveness, other-than-insignificant payment delay, term extension or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.

In some cases, the Corporation provides multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. For the loans included in the “combination” columns below, multiple types of modifications have been made on the same loan within the current reporting period. The combination is at least two of the following: a term extension, principal forgiveness, an other-than-insignificant payment delay and/or an interest rate reduction.

The following table presents the amortized costs basis of loans at September 30, 2023 that were both experiencing financial difficulty and modified during the prior 3 months, by segment and type of modification. The percentage of the amortized costs basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of loan is also presented below:

		Payment Delay &
(dollars in thousands)		Term Extension	Total Loan Class
September 30, 2023
Commercial real estate:
Construction	$	1,679	0.91	%
Residential real estate:
Multi family		1,800	1.46
Total	$	3,479	0.20	%

The following table presents the amortized costs basis of loans at September 30, 2023 that were both experiencing financial difficulty and modified during the prior nine months, by segment and type of modification. The percentage of the amortized costs basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of loan is also presented below:

		Payment Delay &		Term
(dollars in thousands)		Term Extension		Extension	Total Loan Class
September 30, 2023
Commercial loans	$	0	$	1,748	1.02	%
Commercial real estate:
Construction		1,679		0	0.91
Owner occupied		0		1,785	0.51
Residential real estate:
Multi family		1,800		0	1.46
Total	$	3,479	$	3,533	0.41	%

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three months ended September 30, 2023:

	Weighted-Average
	Payment Delay &
(dollars in thousands)	Term Extension (months)
September 30, 2023
Commercial real estate:
Construction	4
Residential real estate:
Multi family	4

The Corporation has not committed to lend additional amounts to the borrowers included in the previous table.

- 27 -

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the nine months ended September 30, 2023:

		Weighted-Average
	Weighted-Average	Payment Delay &
(dollars in thousands)	Term Extension (months)	Term Extension (months)
September 30, 2023
Commercial loans	8	0
Commercial real estate:
Construction	0	4
Owner occupied	8	0
Residential real estate:
Multi family	0	4

The Corporation has committed to lend additional amounts totaling $231,000 to the borrowers included in the previous table.

The Corporation closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. None of the loans that have been modified in the last three and nine months were past due or had a payment default at September 30, 2023.

Note 5—Deposits

The composition of deposits as of September 30, 2023 and December 31, 2022 is shown below. The aggregate amount of demand deposit overdrafts that were reclassified as loans is $96,000 at September 30, 2023, compared to $122,000 at December 31, 2022.

	September 30,		December 31,
(dollars in thousands)	2023		2022
Noninterest bearing demand	$	398,486	$	463,853
Interest bearing demand		271,192		289,298
Money market		651,655		646,702
Savings		141,316		161,228
Time deposits less than $100		229,638		210,331
Time deposits $100 to $250		145,467		123,002
Time deposits $250 or more		68,624		48,805
Total deposits	$	1,906,378	$	1,943,219

Note 6—Short-Term Borrowings and Long-Term Debt

Short-term borrowings consist of securities sold under agreements to repurchase, federal funds purchased and other borrowings. At September 30, 2023, the balance of securities sold under agreements to repurchase was $13,224,000 compared to $11,605,000 at December 31, 2022. At September 30, 2023, the balance of other short-term borrowings was $25,875,000 compared to $0 at December 31, 2022. Short-term borrowings at September 30, 2023 consisted of FHLB Open Repo Line of Credit advances at a variable rate. The rate at September 30, 2023 was 5.68 percent.

The following table presents a summary of long-term debt as of September 30, 2023 and December 31, 2022.

	September 30,		December 31,
(dollars in thousands)	2023		2022
Junior subordinated debt
Due 2034, 7.69%, floating rate based on 3 month
SOFR plus 2.02%, callable quarterly	$	3,093	$	3,093
Due 2036, 7.11% floating rate based on 3 month
SOFR plus 1.54%, callable quarterly		7,217		7,217
Lease obligations included in long-term debt:
Finance lease liabilities		1,218		1,240
Total long term debt and junior subordinated debt	$	11,528	$	11,550
Subordinated notes
Due 2030, 4.50% fixed rate, callable on or after December 2025		30,825		30,764
Total long-term debt	$	42,353	$	42,314

- 28 -

In June 2006, Codorus Valley formed CVB Statutory Trust No. II, a wholly-owned special purpose entity whose sole purpose was to facilitate a pooled trust preferred debt issuance of $7,217,000. In November 2004, Codorus Valley formed CVB Statutory Trust No. I to facilitate a pooled trust preferred debt issuance of $3,093,000. The Corporation owns all of the common stock of these nonbank entities, and the debentures are the sole assets of the Trusts. The accounts of both Trusts are not consolidated for financial reporting purposes in accordance with FASB ASC 810. For regulatory capital purposes, all of the Corporation’s trust preferred securities qualified as Tier 1 capital for all reported periods. Trust preferred securities are subject to capital limitations under the FDIC’s risk-based capital guidelines. The Corporation used the net proceeds from these offerings to fund its operations.

In December 2020, Codorus Valley issued subordinated notes in the amount of $31,000,000. The Corporation may redeem the subordinated notes, in whole or in part, in a principal amount with integral multiples of $10,000, on or after December 9, 2025 and prior to the maturity date at 100% of the principal amount, plus accrued and unpaid interest. The subordinated notes mature on December 9, 2030. The subordinated notes are also redeemable in whole or in part from time to time, upon the occurrence of specific events defined within the Note Purchase Agreements. The subordinated notes may be included in Tier 2 capital (with certain limitations applicable) under current regulatory guidelines and interpretations. The subordinated notes have a fixed rate of interest equal to 4.50% until December 30, 2025. After that term, the variable rate of interest is equal to the then current 90-Day Average SOFR (Secured Overnight Financing Rate) plus 404 basis points.

Note 7—Leases

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Substantially all of the leases in which the Corporation is the lessee are comprised of real estate property, ATM locations, and office space. Substantially all of our leases are classified as operating leases, and therefore, were previously not recognized on the Corporation’s consolidated statements of condition. With the adoption of Topic 842, operating lease agreements are required to be recognized on the consolidated statements of condition as right-of-use (“ROU”) assets and corresponding lease liabilities. The Corporation also has one finance lease for one financial center.

Leases with an initial term of 12 months or less are not recorded on the consolidated statement of condition. All other leases have remaining lease terms of 1 year to 25 years, some of which include options to extend. Upon opening a new financial center, we typically install brand-specific leasehold improvements which are depreciated over the shorter of the useful life or length of the lease. To the extent that the initial lease term of the related lease is less than the useful life of the leasehold improvements and, taking into consideration the dollar amount of the improvements, we conclude that it is reasonably certain that a renewal option will be exercised, the renewal period is included in the lease term, and the related payments are reflected in the ROU asset and lease liability. Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Corporation utilizes its incremental borrowing rate at lease inception, on an amortizing and collateralized basis, over a similar term.

All of our leases include fixed rental payments. We commonly enter into leases under which the lease payments increase at pre-determined dates based on the change in the consumer price index. While the majority of our leases are gross leases, we also have a number of leases in which we make separate payments to the lessor based on the lessor’s property and casualty insurance cost and the property taxes assessed on the property, as well as a portion of the common area maintenance associated with the property. We have elected the practical expedient not to separate lease and nonlease components for all of our building leases.

The components of lease expense were as follows:

	Three months ended
	September 30,
(dollars in thousands)	2023		2022
Operating lease cost	$	171	$	190
Finance lease cost:
Amortization of right-of-use assets	$	12	$	12
Interest on lease liability		11		12
Total finance lease cost	$	23	$	24
Total lease cost	$	194	$	214

- 29 -

	Nine months ended
	September 30,
(dollars in thousands)	2023		2022
Operating lease cost	$	519	$	581
Finance lease cost:
Amortization of right-of-use assets	$	36	$	36
Interest on lease liability		33		36
Total finance lease cost	$	69	$	72
Total lease cost	$	588	$	653

Supplemental cash flow information related to leases was as follows:

	Nine months ended
	September 30,
	2023		2022
Operating cash flows from operating leases	$	540	$	547
Operating cash flows from financing leases		33		35
Financing cash flows from financing leases		24		21
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		0		2,061
Finance leases		0		0

Amounts recognized as right-of-use assets related to finance leases are included in fixed assets in the accompanying statement of financial position, while related lease liabilities are included in long-term debt. Supplemental balance sheet information related to leases was as follows:

	September 30,		December 31,
	2023		2022
Assets:
Operating leases right-of-use assets	$	2,618	$	3,072
Finance leases assets		959		994
Total lease assets	$	3,577	$	4,066
Liabilities:
Operating	$	2,726	$	3,204
Financing		1,218		1,240
Total lease liabilities	$	3,944	$	4,444
Weighted Average Remaining Lease Term (years)
Operating leases		6.6		6.9
Finance leases		20.4		21.2
Weighted Average Discount Rate
Operating leases		2.08%		2.14%
Finance leases		3.69%		3.69%

- 30 -

Future minimum payments for financing leases and operating leases as of September 30, 2023 and December 31, 2022 were as follows:

(dollars in thousands:)	September 30, 2023
Year Ending December 31,	Operating Leases		Finance Leases
2023	$	162	$	19
2024		638		75
2025		430		79
2026		324		80
2027		314		80
Thereafter		1,037		1,429
Total lease payments		2,905		1,762
Less imputed interest		(179)		(544)
Total	$	2,726	$	1,218

(dollars in thousands:)	December 31, 2022
Year Ending December 31,	Operating Leases		Finance Leases
2023	$	701	$	75
2024		638		75
2025		417		79
2026		324		80
2027		314		80
Thereafter		1,036		1,429
Total lease payments		3,430		1,818
Less imputed interest		(226)		(578)
Total	$	3,204	$	1,240

Note 8—Regulatory Matters

The Corporation is subject to restrictions on the payment of dividends to its shareholders pursuant to the Pennsylvania Business Corporation Law of 1988, as amended (“BCL”). The BCL prohibits the making of a dividend payment if such payment would render the Corporation insolvent or result in it having negative net worth. Federal and state banking regulations also place certain restrictions on dividends paid and loans or advances made by PeoplesBank to the Corporation. The amount of total dividends, which may be paid at any date, is generally limited to the retained earnings of PeoplesBank. Furthermore, dividend payments would be prohibited if the effect would be to cause PeoplesBank’s capital to fall below applicable minimum capital requirements as discussed below. Loans and advances by PeoplesBank to affiliates, including the Corporation, are limited to 10 percent of PeoplesBank’s capital stock and contributed capital on a secured basis.

Banks are also subject to regulatory capital requirements administered by federal banking agencies.  Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off balance sheet items calculated under regulatory accounting practices.  Capital amounts and classifications are also subject to qualitative judgments by regulators.  Failure of a bank to meet capital requirements can cause bank regulators to initiate certain regulatory actions.  The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital.  Management believes as of September 30, 2023, the Bank met all capital adequacy requirements to which it is subject.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At September 30, 2023 and December 31, 2022, the most recent regulatory notifications categorized PeoplesBank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.

- 31 -

The table below sets for the Corporation’s and PeoplesBank’s capital positive relative to its respective regulatory capital requirements at September 30, 2023 and December 31, 2022.

									To Be Well Capitalized Under
					Required for Capital				Prompt Corrective Action
	Actual (1)				Adequacy Purposes (2) (3)				Provisions (2)
(dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Codorus Valley Bancorp, Inc. (consolidated)
at September 30, 2023
Capital ratios:
Common equity Tier 1	$	223,708	12.52	%	$	125,037	7.00	%	$	n/a	n/a	%
Tier 1 risk based		233,708	13.08			151,831	8.50			n/a	n/a
Total risk based		285,982	16.01			187,556	10.50			n/a	n/a
Leverage		233,708	10.50			88,992	4.00			n/a	n/a
at December 31, 2022
Capital ratios:
Common equity Tier 1	$	209,540	12.04	%	$	121,871	7.00	%	$	n/a	n/a	%
Tier 1 risk based		219,540	12.61			147,986	8.50			n/a	n/a
Total risk based		271,040	15.57			182,806	10.50			n/a	n/a
Leverage		219,540	9.77			89,863	4.00			n/a	n/a
PeoplesBank, A Codorus Valley Company
at September 30, 2023
Capital ratios:
Common equity Tier 1	$	260,933	14.63	%	$	124,818	7.00	%	$	115,903	6.50	%
Tier 1 risk based		260,933	14.63			151,565	8.50			142,649	8.00
Total risk based		282,382	15.84			187,227	10.50			178,312	10.00
Leverage		260,933	11.75			88,852	4.00			111,065	5.00
at December 31, 2022
Capital ratios:
Common equity Tier 1	$	245,896	14.15	%	$	121,667	7.00	%	$	112,976	6.50	%
Tier 1 risk based		245,896	14.15			147,738	8.50			139,048	8.00
Total risk based		266,632	15.34			182,500	10.50			173,810	10.00
Leverage		245,896	10.96			89,705	4.00			112,131	5.00

(1) Net unrealized gains and losses on securities available-for-sale, net of taxes, are disregarded for capital ratio computation purposes in accordance with federal regulatory banking guidelines.

(2) The Corporation is currently not subject to the regulatory capital requirements imposed by Basel III on bank holding companies because the Corporation's consolidated assets did not exceed $3.0 billion as of September 30, 2023 and therefore qualified as a small bank holding company.

(3) Ratio includes Capital Conservation Buffer of 2.50%, except Leverage Ratio, for which the Capital Conservation Buffer does not apply.

Note 9—Shareholders’ Equity

Share Repurchase

The Corporation’s Board of Directors approved share repurchase programs in August 2021 ($5 million) and January 2022 ($5 million). In 2022 a total of 1,535 shares were purchased at an average price of $22.00 under the program approved in August 2021. There was no activity under the program approved in January 2022, which expired by its own terms in December 2022.

The Corporation’s Board of Directors approved a Share Repurchase Program (“Program”) in January 2023. Under the approved Program, the Corporation is authorized to repurchase up to $5 million of the Corporation’s issued and outstanding common stock. All shares of the common stock repurchased pursuant to the Program shall be held as treasury shares and be available for use and reissuance for the purpose as and when determined by the Board of Directors including, without limitation pursuant to the Corporation’s Dividend Reinvestment and Stock Purchase Plan and its equity compensation plan. There was no activity under the Program during the three and nine months ended September 30, 2023.

- 32 -

Note 10—Contingent Liabilities

The Corporation is involved in pending and threatened claims and other legal proceedings from time to time in the ordinary course of its business activities. Management evaluates the possible impact of these matters taking into consideration the most recent information available. A loss reserve is established for any matter for which it is believed that a loss is both probable and reasonably estimable. Once established, the reserve is adjusted as appropriate to reflect any subsequent developments. Actual losses with respect to any such matter may be more or less than the amount estimated. For any matter for which a loss is not probable, or the amount of the loss cannot reasonably be estimated, no loss reserve is established.

In addition, the Corporation may be involved in legal proceedings in the form of investigations or regulatory or governmental inquiries covering a range of possible issues. These could be specific to the Corporation, or part of more wide-spread inquires by regulatory authorities. These inquiries or investigations could lead to administrative, civil or criminal proceedings involving the Corporation and could result in fines, penalties, restitution, or other types of sanctions, or the need for the Corporation to undertake remedial actions, or to alter its business, financial or accounting practices.

Management believes that any liabilities, individually or in the aggregate, that may result from the final outcomes of pending or threatened legal proceedings will not have a material adverse effect on the financial condition of the Corporation or upon its results of operations.

Note 11—Guarantees

Codorus Valley does not issue any guarantees that would require liability recognition or disclosure, other than its standby letters of credit.  Standby letters of credit are written conditional commitments issued by PeoplesBank to guarantee the performance of a client to a third party.  Generally, all letters of credit, when issued, have expiration dates within one year.  The credit risk involved in issuing letters of credit is essentially the same as those that are involved in extending loan facilities to clients.  The Corporation generally holds collateral and/or personal guarantees supporting these commitments.  The Corporation had $16,699,000 of standby letters of credit outstanding on September 30, 2023, compared to $23,601,000 on December 31, 2022. Management believes that the proceeds obtained through a liquidation of collateral and the enforcement of guarantees would be sufficient to cover the potential amount of future payments required under the corresponding letters of credit. The amount of the liability as of September 30, 2023 and December 31, 2022, for guarantees under standby letters of credit issued, was not material. Many of the commitments are expected to expire without being drawn upon and, therefore, generally do not present significant liquidity risk to the Corporation or PeoplesBank.

Note 12—Fair Value of Assets and Liabilities

The Corporation uses its best judgment in estimating the fair value of the Corporation’s assets and liabilities; however, there are inherent weaknesses in any estimation technique. The estimated fair value amounts have been measured as of their respective period-ends and have not been re-evaluated or updated for purposes of these financial statements subsequent to those respective dates. As such, the estimated fair values subsequent to the respective reporting dates may be different than the amounts reported at each period end.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date. GAAP establishes a fair value hierarchy that prioritizes the use of inputs used in valuation methodologies into the following three levels:

Level 1: Inputs to the valuation methodology are quoted prices, unadjusted, for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available.

Level 2: Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; inputs to the valuation methodology include quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs to the valuation methodology that utilize model-based techniques for which all significant assumptions are observable in the market.

Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement; inputs to the valuation methodology that utilize model-based techniques for which significant assumptions are not observable in the market; or inputs to the valuation methodology that require significant management judgment or estimation, some of which may be internally developed.

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Since management maximizes the use of observable inputs and minimizes the use of unobservable inputs when determining fair value, an asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Management reviews and updates the fair value hierarchy classifications on a quarterly basis.

Assets Measured at Fair Value on a Recurring Basis

Securities available-for-sale

The fair values of investment securities were measured using information from a third-party pricing service. The pricing service uses quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique, used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities, but rather, by relying on the securities’ relationship to other benchmark quoted prices.

Interest rate swap agreements

Interest rate swap agreements are measured by alternative pricing sources with reasonable levels of price transparency in markets that are not active. Based on the complex nature of interest rate swap agreements, the markets these instruments trade in are not as efficient and are less liquid than that of the more mature Level 1 markets. These markets do, however, have comparable, observable inputs in which an alternative pricing source values these assets in order to arrive at a fair market value. These characteristics classify interest rate swap agreements as Level 2.

			Fair Value Measurements
(dollars in thousands)	Total		(Level 1) ‎Quoted Prices in ‎Active Markets for ‎Identical Assets		(Level 2) ‎Significant Other ‎Observable Inputs		(Level 3) ‎Significant Other ‎Unobservable Inputs
September 30, 2023
Securities available-for-sale:
U.S. Treasury notes	$	19,209	$	19,209	$	0	$	0
U.S. agency		12,433		0		12,433		0
U.S. agency mortgage-backed, residential		243,579		0		243,579		0
State and municipal		28,066		0		28,066		0
Corporates		32,369		0		32,369		0
Other assets:
Loan-level interest rate swaps		851		0		851		0
December 31, 2022
Securities available-for-sale:
U.S. Treasury notes	$	19,100	$	19,100	$	0	$	0
U.S. agency		11,280		0		11,280		0
U.S. agency mortgage-backed, residential		250,102		0		250,102		0
State and municipal		29,399		0		29,399		0
Corporates		35,576		0		35,576		0
Other assets:
Loan-level interest rate swaps		8		0		8		0

Assets Measured at Fair Value on a Nonrecurring Basis

Individually evaluated loans

Individually evaluated loans are those that are accounted for under FASB ASC Topic 310, in which the Corporation has measured impairment generally based on the fair value of the loan’s collateral.  Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds.  These loans are generally included as Level 3 fair values, based on the lowest level of input that is significant to the fair value measurements.  At September 30, 2023, the fair value of individually evaluated loans with a valuation allowance or partial charge-off was $1,434,000, net of valuation allowances of $1,092,000 and charge-offs of $340,000.  At December 31, 2022 the fair value of impaired loans with a valuation allowance or charge-off was $2,742,000, net of valuation allowances of $2,484,000 and charge-offs of $1,916,000. 

Foreclosed real estate

Other real estate property acquired through foreclosure is initially recorded at fair value of the property at the transfer date less estimated selling cost. Subsequently, other real estate owned is carried at the lower of its carrying value or the fair value less estimated selling cost.  Fair value is usually determined based on an independent third-party appraisal of the property or occasionally on a recent

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sales offer. At September 30, 2023 the fair value of foreclosed real estate assets was $383,000, net of a write-down down of $584,000. At December 31, 2022 the fair value of foreclosed real estate assets was $479,000, net of a write-down of $488,000.

Mortgage servicing rights

Mortgage servicing rights are initially recorded at fair value upon the sale of residential mortgage loans to secondary market investors. The fair value of servicing rights is based on the present value of estimated future cash flows on pools of mortgages stratified by rate and original time to maturity. Mortgage servicing rights are subsequently evaluated for impairment by an independent third party on a quarterly basis. Significant inputs to the valuation include expected cash flow, expected net servicing income, a cash flow discount rate and the expected life of the underlying loans.

			Fair Value Measurements
(dollars in thousands)		Total	(Level 1) ‎Quoted Prices in ‎Active Markets for ‎Identical Assets		(Level 2) ‎Significant Other ‎Observable Inputs		(Level 3) ‎Significant Other ‎Unobservable Inputs
September 30, 2023
Individually evaluated commercial loans	$	1,368	$	0	$	0	$	1,368
Individually evaluated residential real estate:
Individually evaluated other		66		0		0		66
Impaired other real estate owned		383		0		0		383
December 31, 2022
Impaired builder & developer loans	$	1,194	$	0	$	0	$	1,194
Impaired residential real estate investor loans		57		0		0		57
Impaired agriculture loans		228		0		0		228
Impaired manufacture loans		150		0		0		150
Impaired other loans		1,114		0		0		1,114
Impaired other real estate owned		479		0		0		479

‎

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

	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value		Valuation	Unobservable		Weighted
(dollars in thousands)	Estimate		Techniques	Input	Range	Average
September 30, 2023
Individually evaluated commercial loans	$	446	Appraisal (1)	Appraisal adjustments (2)	0%-9%	9%
Individually evaluated residential real estate:
Individually evaluated other		66	Appraisal (1)	Appraisal adjustments (2)	16%-16%	16%
Individually evaluated commercial loans		922	Business asset valuation (3)	Business asset valuation adjustments (4)	20%-50%	29%
Impaired other real estate owned		383	Appraisal (1)	Appraisal adjustments (2)	20%-25%	22%
December 31, 2022
Impaired builder & developer loans	$	1,194	Appraisal (1)	Appraisal adjustments (2)	2%-22%	5%
Impaired residential real estate investor loans		57	Appraisal (1)	Appraisal adjustments (2)	6%-10%	8%
Impaired agriculture loans		228	Appraisal (1)	Appraisal adjustments (2)	5%-13%	9%
Impaired manufacturer loans		150	Appraisal (1)	Appraisal adjustments (2)	67%-67%	67%
Impaired other loans		1,114	Appraisal (1)	Appraisal adjustments (2)	0%-25%	5%
Impaired other real estate owned		479	Appraisal (1)	Appraisal adjustments (2)	0%-25%	22%

(1)Fair value is generally determined through independent appraisals, which generally include various level 3 inputs that are not identifiable.

(2)Appraisal amounts may be adjusted downward by the Corporation's management for qualitative factors such as economic conditions and estimated liquidation expenses.

(3)Fair value is generally determined through customer-provided financial statements and bankruptcy court documents.

(4)Business asset valuation may be adjusted downward by the corporation’s management qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses adjustments are presented as a percent of the financial statement book value.

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The following presents the carrying amounts and estimated fair values of the Corporation’s financial instruments as of September 30, 2023 and December 31, 2022.

						Fair Value Estimates
					(Level 1)		(Level 2)		(Level 3)
					Quoted Prices		Significant		Significant
					in Active		Other		Other
	Carrying		Estimated		Markets for		Observable		Unobservable
(dollars in thousands)	Amount		Fair Value		Identical Assets		Inputs		Inputs
September 30, 2023
Financial assets
Cash and cash equivalents	$	51,307	$	51,307	$	51,307	$	0	$	0
Securities available-for-sale		335,656		335,656		19,209		316,447		0
Restricted investment in bank stocks		2,152		N/A		N/A		N/A		N/A
Loans held for sale		1,103		1,125		0		1,125		0
Loans, net		1,682,931		1,570,158		0		0		1,570,158
Interest receivable		6,859		6,859		0		1,567		5,292
Interest rate swaps		851		851		0		851		0
Financial liabilities
Deposits	$	1,906,378	$	1,899,852	$	0	$	1,899,852	$	0
Short-term borrowings		39,099		39,099		0		39,099		0
Long-term debt and junior subordinated debt (1)		10,310		9,239		0		0		9,239
Subordinated notes		30,825		28,531		0		28,531		0
Interest payable		1,458		1,458		0		1,458		0
Interest rate swaps		851		851		0		851		0
Off-balance sheet instruments		0		0		0		0		0
December 31, 2022
Financial assets
Cash and cash equivalents	$	120,439	$	120,439	$	120,439	$	0	$	0
Securities available-for-sale		345,457		345,457		19,100		326,357		0
Restricted investment in bank stocks		955		N/A		N/A		N/A		N/A
Loans held for sale		154		157		0		157		0
Loans, net		1,612,121		1,503,440		0		0		1,503,440
Interest receivable		6,624		6,624		0		948		5,676
Financial liabilities
Deposits	$	1,943,219	$	1,932,689	$	0	$	1,932,689	$	0
Short-term borrowings		11,605		11,605		0		11,605		0
Long-term debt and junior subordinated debt (1)		10,310		10,165		0		0		10,165
Subordinated notes		30,764		29,145		0		29,145		0
Interest payable		492		492		0		492		0
Off-balance sheet instruments		0		0		0		0		0
(1) Exclude leases included in Long-term debt

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Note 13—Assets and Liabilities Subject to Offsetting

Securities Sold Under Agreements to Repurchase

PeoplesBank enters into agreements with clients in which it sells securities subject to an obligation to repurchase the same securities (“repurchase agreements”). The contractual maturity of the repurchase agreement is overnight and continues until either party terminates the agreement. These repurchase agreements are accounted for as a collateralized financing arrangement (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities. The obligation to repurchase the securities is reflected as a liability (short-term borrowings) in the Corporation’s consolidated financial statements of condition, while the securities underlying the repurchase agreements are appropriately segregated for safekeeping purposes and remain in the respective securities asset accounts. Thus, there is no offsetting or netting of the securities with the repurchase agreement liabilities.

							Gross amounts Not Offset in
							the Statements of Condition
							Financial Instruments
(dollars in thousands)	Gross ‎Amounts of ‎Recognized ‎Liabilities		Gross ‎Amounts ‎Offset in the ‎Statements ‎of Condition		Net Amounts ‎of Liabilities ‎Presented in ‎the Statements ‎of Condition		U.S. agency ‎mortgage-backed, ‎residential		U.S. agency		Cash ‎Collateral ‎Pledged		Net ‎Amount
September 30, 2023
Repurchase Agreements	$	13,224	$	0	$	13,224	$	(13,030)	$	0	$	0	$	194
December 31, 2022
Repurchase Agreements	$	11,605	$	0	$	11,605	$	(13,767)	$	0	$	0	$	(2,162)

Note 14 – Interest Rate Swaps

Loan Level Interest Rate Swaps

PeoplesBank enters into loan-level interest rate swaps with certain qualifying, creditworthy commercial loan clients to provide a loan pricing structure that meets the interest rate risk management needs of both PeoplesBank as well as the client. PeoplesBank simultaneously enters into offsetting interest rate swaps with dealer counterparties, with identical notional amounts and terms. The net results of the offsetting client and deal counterparty swap agreements is that the client pays a fixed rate of interest and PeoplesBank receives a floating rate. PeoplesBank’s loan-level interest rate swaps are considered derivatives but are not accounted for using hedge accounting.

The fair value and notional amount related to loan-level interest rate swaps are presented below:

		September 30, 2023				December 31, 2022
		Notional		Asset (Liability)		Notional		Asset (Liability)
(dollars in thousands)		Amount		Fair Value		Amount		Fair Value
Interest Rate Swap with Customers
Positive Fair Values	$	34,173	$	851	$	5,992	$	8
Interest Rate Swaps with Counterparties
Negative Fair Values	$	34,173	$	(851)	$	5,992	$	(8)

‎

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The gross amounts of loan-level interest rate swaps, the amounts offset and the carrying values in the Consolidated Balance Sheets, and the collateral pledged to support such agreements are presented below.

(dollars in thousands)		September 30, 2023		December 31, 2022
Interest Rate Swap Contracts - Commercial Loans:
Gross amounts recognized	$	851	$	8
Gross amounts offset		851		8
Net amounts presented in the Consolidated Balance Sheets	$	0	$	0
Gross amounts not offset:
Cash Collateral	$	0	$	0
Net amounts	$	0	$	0

‎

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis of the significant changes in the results of operations, capital resources and liquidity presented in the accompanying consolidated financial statements for Codorus Valley Bancorp, Inc. (“Codorus Valley” or “the Corporation”), a bank holding company, and its wholly-owned subsidiary, PeoplesBank, A Codorus Valley Company (“PeoplesBank”), are provided below. Codorus Valley’s consolidated financial condition and results of operations consist almost entirely of PeoplesBank’s financial condition and results of operations. Current performance does not guarantee, and may not be indicative of, similar performance in the future.

Cautionary Note Regarding Forward-looking Statements

Management of the Corporation has made forward-looking statements in this Form 10-Q. Forward-looking statements may include information concerning the financial condition, results of operations and business of the Corporation and its subsidiaries and include, but are not limited to, statements regarding expectations or predictions of future financial or business performance or conditions relating to the Corporation and its operations. These forward-looking statements may include statements with respect to the Corporation’s beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, that are subject to significant risks and uncertainties, and are subject to change based on various factors (some of which are beyond the Corporation’s control). Forward-looking statements may also include, but are not limited to, discussions of strategy, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives, goals, expectations or consequences, and statements about future performance, expenses, operations, or products and services of the Corporation and its subsidiaries. Forward-looking statements can be identified by the use of words such as “may,” “should,” “will,” “could,” “believes,” “plans,” “expects,” “estimates,” “intends,” “anticipates,” “strives to,” “seeks,” ”intends,” “anticipates” or similar words or expressions.

Forward-looking statements are not historical facts, nor should they be relied upon as providing assurance of future performance. Forward-looking statements are based on current beliefs, expectations and assumptions regarding the future of the Corporation’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of the Corporation’s control. Note that many factors, some of which are discussed elsewhere in this report and in the documents that are incorporated by reference, could affect the future financial results of the Corporation and its subsidiaries, both individually and collectively, and could cause those results to differ materially from those expressed in the forward-looking statements contained or incorporated by reference in this Form 10-Q. Actual results could differ materially from those indicated in forward-looking statements due to, among others, the following factors:

changes in market interest rates and the persistence of the current inflationary environment in the U.S. and our market areas and the potential for an economic downturn or recession;

the effects of financial challenges at other banking institutions that could lead to depositor concerns that spread within the banking industry causing disruptive deposit outflows and other destabilizing results;

legislative and regulatory changes, and the uncertain impact of new laws and regulations;

monetary and fiscal policies of the federal government;

the effects of changes in accounting policies and practices;

ineffectiveness of the Corporation’s business strategy due to changes in current or future market conditions;

 changes in deposit flows, the cost of funds, demand for loan products and the demand for financial services;

the effects of the COVID-19 pandemic, including on the Corporation’s credit quality and operations as well as its impact on general economic conditions;

competition; market volatility, market downturns, changes in consumer behavior, business closures;

adverse changes in the quality or composition of the Corporation’s loan, investment and mortgage-backed securities portfolios, including from the effects of the current inflationary environment;

geographic concentration of the Corporation’s business;

deterioration of commercial real estate values;

the adequacy of loan loss reserves and the Corporation’s transition to the Current Expected Credit Loss (CECL) method of reserving for losses in its loan portfolio;

deterioration in the credit quality of borrowers;

the Company’s ability to attract and retain key personnel;

the impact of operational risks, including the risk of human error, failure or disruption of internal processes and systems, including of the Corporation’s information and other technology systems;

uncertainty surrounding the transition from LIBOR to an alternate reference rate;

failure or circumvention of our internal controls;

the Corporation’s ability to keep pace with technological changes;

breaches of security or failures of the Corporation to identify and adequately address cybersecurity and data breaches;

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changes in government regulation and supervision and the potential for negative consequences resulting from regulatory examinations, investigations and violations; 

the effects of adverse outcomes from claims and litigation;

occurrence of natural or man-made disasters or calamities, including health emergencies, the spread of infectious diseases, epidemics or pandemics, an outbreak or escalation of hostilities or other geopolitical instabilities, the effects of climate change or extraordinary events beyond the Corporation's control, and the Corporation’s ability to deal effectively with disruptions caused by the foregoing; and

economic, competitive, governmental and technological factors affecting the Corporation’s operations, markets, products, services and fees.

For a discussion of other risks and uncertainties that could affect the Corporation, please refer to the “Risk Factors” section of the Corporation’s Annual Report on Form 10-K for the year-ended December 31, 2022, and in its current and periodic reports that are, or will be, filed with the Securities and Exchange Commission (“SEC”) and available on the SEC’s website at www.sec.gov or in the Investor Relations section of the Corporation’s website at www.peoplesbanknet.com. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statement to reflect new information, events occurring after the date of this Form 10-Q or otherwise.

Critical Accounting Policies

The Corporation’s critical accounting policies, as summarized in Note 1—Summary of Significant Accounting Policies, include those related to the allowance for credit losses which requires management to make significant judgments, estimates and assumptions that have a material impact on the carrying value of certain assets and liabilities. For this Form 10-Q, there were material changes made to the Corporation’s critical accounting policies, which were described in Item 7 of the Corporation’s previously filed Annual Report on Form 10-K for the year ended December 31, 2022 below.

On January 1, 2023, the Corporation adopted ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with Topic 842 on leases. In addition, ASC 326 made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities management does not intend to sell or believes that it is more likely than not they will be required to sell. The Corporation adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and off-balance-sheet (OBS) credit exposures. Results for reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Corporation recorded a net decrease to retained earnings of $2,100,000 as of January 1, 2023 for the cumulative effect of adopting ASC 326. The transition adjustment included a $927,000 increase to the allowance for credit losses for loans, a $1,900,000 increase in the allowance for credit losses for unfunded commitments and a $667,000 increase in deferred tax assets.

Allowance for credit losses – loans

The allowance for credit losses (“ACL”) is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

Management estimates the allowance balance using relevant available information from both internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors. These adjustments are commonly known as the Qualitative Framework.

In addition to the estimated quantitative credit loss for loans evaluated collectively, qualitative factors that may not be fully captured in the quantitative results are also evaluated. These include changes in lending policy, the nature and volume of the portfolio, overall business conditions in the economy, credit concentrations, competition, model imprecision, and legal and regulatory requirements. Qualitative adjustments are judgmental and are based on management’s knowledge of the portfolio and the markets in which the Corporation operates. Qualitative adjustments are evaluated and approved on a quarterly basis. Additionally, the ACL includes other allowance categories that are not directly incorporated in the quantitative results including loans in process.

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The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. Loans evaluated collectively for expected credit losses include loans on accrual status and loans initially evaluated individually but determined to not to have enhanced credit risk characteristics. The Corporation has identified the following portfolio segments:

Commercial loans

Commercial real estate – construction

Commercial real estate – owner occupied

Commercial real estate – non-owner occupied

Residential real estate – construction

Residential real estate – revolving

Residential real estate – multi family

Residential real estate – other

Consumer loans

The Corporation measures the allowance for credit losses using the following methods.

• Loans are aggregated into pools based on similar risk characteristics.

• The Probability of Default (PD) and Loss Given Default (LGD) CECL model components are determined based on loss estimates driven by historical experience at the input level.

• The PD model component uses "through the economic cycle transition" matrices based on the Corporation’s and peer group historical loan and transaction data across each pool of loans.

• The LGD model component calculates a lifetime estimate across each pool of loans utilizing a nonparametric loss curve modeling approach.

• Reasonable and supportable forecasts are incorporated into the PD model component that are based on different economic forecasts and scenarios sourced from an external party. A future loss forecast over the reasonable and supportable forecast period is based on the projected performance of specific economic variables that statistically correlate with the PD and LGD pools. After the reasonable and supportable forecast period, loss estimates naturally revert to input-level reversion.

• Cash flow assumptions are established for each loan using maturity date, amortization schedule and interest rate.

• A constant prepayment rate is calculated for each loan pool in the CECL model.

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation. When management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.

Loans are modified if the Corporation grants borrowers experiencing financial difficulties concessions that it would not otherwise consider. Concessions granted under a modification may involve a reduction of the interest rate, forgiveness of principal, extension of the term of the loan, and/or other-than-insignificant payment delays.

Three Months Ended September 30, 2023 vs. Three Months Ended September 30, 2022

The schedule below presents selected performance metrics for the third quarter of both 2023 and 2022.

	Three months ended
	September 30,
	2023			2022
Basic earnings per share	$	0.62		$	0.75
Diluted earnings per share	$	0.61		$	0.75
Cash dividend payout ratio		27.61	%		19.04	%
Return on average assets		1.08	%		1.25	%
Return on average equity		12.64	%		15.93	%
Net interest margin (tax equivalent basis)		3.64	%		3.66	%
Net overhead ratio		2.14	%		2.04	%
Efficiency ratio		66.95	%		63.51	%
Average equity to average assets		8.55	%		7.84	%

The Corporation’s net income (earnings) was $5,917,000 for the quarter ended September 30, 2023, as compared to $7,154,000 for the quarter ended September 30, 2022, a decrease of $1,237,000 or 17 percent.

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INCOME STATEMENT ANALYSIS

Net Interest Income

Unless otherwise noted, this section discusses interest income and interest expense amounts as reported in the Consolidated Statements of Income, which are not presented on a tax equivalent basis.

Net interest income for the quarter ended September 30, 2023 was $19,372,000, a decrease of $979,000 or 5 percent compared to net interest income of $20,351,000 for the third quarter 2022.

The Corporation’s net interest margin, computed as interest income (tax-equivalent basis) annualized as a percentage of average interest earning assets, was 3.64 percent for the third quarter 2023 compared to 3.66 percent for the third quarter 2022. The net interest margin contraction was primarily the result of higher rates on interest bearing demand deposits and time deposits, offset by higher rates on commercial loans.

Total interest income for the third quarter 2023 totaled $29,073,000, an increase of $6,400,000 or 28 percent above the amount of total interest income for the third quarter 2022. The change was primarily a result of higher rates on commercial loans.

Interest and dividend income on investments increased $519,000 or 24 percent in the third quarter 2023 compared to the same period in 2022. The average balance of the investment securities portfolio increased $20,056,000 or 5 percent when comparing the third quarter 2023 to the same period in 2022. The tax-equivalent yield on investments for the third quarter 2023 was 2.75 percent or 39 basis points higher than the 2.36 percent realized in the third quarter 2022. The average balance of interest bearing deposits with banks decreased $233,530,000 or 90 percent in the third quarter 2023 compared to the third quarter 2022. The yield on the interest bearing deposits with banks increased 309 basis points when comparing the third quarter 2023 to the same period in 2022.

Interest income on loans increased $7,006,000 or 37 percent in the third quarter 2023 compared to the same period in 2022. The average balance of outstanding loans, primarily commercial loans, increased $119,721,000 or 8 percent comparing the third quarter 2023 to the same period in 2022. Higher rates on commercial loans was the primary driver of the increase in interest income on loans. The tax-equivalent yield on loans for the third quarter 2023 was 6.08 percent or 130 basis points higher than the 4.78 percent experienced in the third quarter 2022.

Total interest expense for the third quarter 2023 was $9,701,000, an increase of $7,379,000 or 318 percent as compared to total interest expense of $2,322,000 for the third quarter 2022. The change was primarily the result of the higher cost of interest bearing demand and time deposits.

Interest expense on deposits increased $6,933,000 or 384 percent in the third quarter 2023 compared to the same period in 2022. The average rate paid on interest bearing deposits was 2.31 percent in the third quarter 2023 or 185 basis points higher than the average rate paid of 0.46 percent in the third quarter 2022. The average balance of interest bearing deposits for the third quarter 2023 decreased by $51,565,000 or 3 percent compared to the third quarter 2022. Also, noninterest-bearing deposits decreased, with the average volume for the third quarter 2023 decreasing 18 percent to $401,734,000 as compared to $489,589,000 for the third quarter 2022.

For the third quarter 2023 interest expense on all borrowings increased $446,000 or 87 percent compared to the third quarter 2022. Short-term borrowings consisting of repurchase agreements and other short-term borrowings, which includes borrowings from the Federal Home Loan Bank of Pittsburgh (FHLBP) Open Repo Line of Credit averaged $38,726,000 for the third quarter 2023, compared to an average balance of $13,255,000 for the third quarter 2022. The rate on average short-term borrowings for the third quarter 2023 was 3.86 percent, an increase as compared to a rate of 0.39 percent for the third quarter 2022. Long-term debt, which includes junior subordinated trust preferred securities, finance leases and long-term FHLBP borrowings, averaged $14,356,000 for the third quarter 2023 and $15,047,000 for the third quarter 2022. For the third quarter 2023, the rate on average long-term debt was 5.94 percent, an increase of 243 basis points as compared to a rate of 3.51 percent for the third quarter 2022. Subordinated debentures, issued in December 2020 by the Corporation, averaged $30,818,000 for the third quarter 2023 and $30,737,000 for the third quarter 2022.

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Table 1-Average Balances and Interest Rates (tax equivalent basis)
	Three months ended September 30,
	2023							2022
	Average				Yield/			Average				Yield/
(dollars in thousands)	Balance		Interest		Rate			Balance		Interest		Rate
Assets
Interest bearing deposits with banks	$	26,772	$	361		5.35	%	$	260,302	$	1,486		2.26	%
Investment securities:
Taxable		371,603		2,606		2.78			347,656		2,080		2.37
Tax-exempt		22,523		128		2.25			26,414		142		2.13
Total investment securities		394,126		2,734		2.75			374,070		2,222		2.36
Loans:
Taxable (1)		1,677,117		25,829		6.11			1,556,060		18,817		4.80
Tax-exempt		21,721		213		3.89			23,057		222		3.82
Total loans		1,698,838		26,042		6.08			1,579,117		19,039		4.78
Total earning assets		2,119,736		29,137		5.45			2,213,489		22,747		4.08
Other assets (2)		71,008							78,942
Total assets	$	2,190,744						$	2,292,431
Liabilities and Shareholders' Equity
Deposits:
Interest bearing demand	$	917,983	$	5,542		2.40	%	$	982,174	$	1,238		0.50	%
Savings		146,038		11		0.03			166,275		13		0.03
Time		435,439		3,187		2.90			402,576		556		0.55
Total interest bearing deposits		1,499,460		8,740		2.31			1,551,025		1,807		0.46
Short-term borrowings		38,726		377		3.86			13,255		13		0.39
Long-term debt and junior subordinated debt		14,356		215		5.94			15,047		133		3.51
Subordinated notes		30,818		369		4.75			30,737		369		4.76
Total interest bearing liabilities		1,583,360		9,701		2.43			1,610,064		2,322		0.57
Noninterest bearing deposits		401,734							489,589
Other liabilities		18,439							12,992
Shareholders' equity		187,211							179,786
Total liabilities and
shareholders' equity	$	2,190,744						$	2,292,431
Net interest income (tax equivalent basis)			$	19,436						$	20,425
Net interest margin (3)						3.64	%						3.66	%
Tax equivalent adjustment				(64)							(74)
Net interest income			$	19,372						$	20,351

(1)Average balance includes average nonaccrual loans of $8,035,000 for 2023 and $15,775,000 for 2022.

Interest includes net loan fees of $798,000 for 2023 and $1,006,000 for 2022.

(2)Average balance includes average bank owned life insurance and foreclosed real estate.

(3)Net interest income (tax equivalent basis) annualized as a percentage of average earning assets.

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Table 2-Rate/Volume Analysis of Changes in Net Interest Income (tax equivalent basis)
	Three months ended
	September 30,
	2023 vs. 2022
	Increase (decrease) due to change in*
(dollars in thousands)	Volume		Rate			Net
Interest Income
Interest bearing deposits with banks	$	(1,333)	$	208	$	(1,125)
Investment securities:
Taxable		139		387		526
Tax-exempt		(21)		7		(14)
Loans:
Taxable		1,017		5,995		7,012
Tax-exempt		(13)		4		(9)
Total interest income		(211)		6,601		6,390
Interest Expense
Deposits:
Interest bearing demand		(35)		4,339		4,304
Savings		(2)		0		(2)
Time		48		2,583		2,631
Short-term borrowings		0		364		364
Long-term debt and junior subordinated debt		(4)		86		82
Subordinated notes		1		(1)		0
Total interest expense		8		7,371		7,379
Net interest income (tax equivalent basis)	$	(219)	$	(770)	$	(989)

*Changes which are due to both volume and rate are allocated in proportion to their relationship to the amount of change attributed directly to volume or rate.

Provision for Credit Losses

The provision for credit losses is an expense charged to earnings to cover the estimated losses attributable to uncollected loans. The provision reflects management’s judgment of an appropriate level for the allowance for credit losses. Total provision for credit losses, including off-balance sheet exposures, for the third quarter 2023 was a provision of $251,000. Recoveries on previously charged-off loans attributed $833,000 and other impacts, primarily increases in qualitative reserves, attributed $1,254,000 to the change in provision for the quarter. These were offset by attributions related to charge-offs of $192,000 and attributions associated with changes in quantitative reserves related to economic conditions of $1,127,000, resulting in a net change in provision in the third quarter 2023 of $768,000. The allowance as a percentage of total loans was 1.26 percent at September 30, 2023, as compared to 1.27 percent at December 31, 2022 and 1.39 percent at September 30, 2022.

More information about the allowance for credit losses can be found in this report under the caption Allowance for Credit Losses on page 56.

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Noninterest Income

The following table presents the components of total noninterest income for the third quarter 2023, compared to the third quarter 2022.

Table 3 - Noninterest income
		Three months ended				Change
		September 30,				Increase (Decrease)
(dollars in thousands)	2023		2022		$		%
Trust and investment services fees	$	1,293	$	1,141	$	152	13	%
Income from mutual fund, annuity and insurance sales		315		283		32	11
Service charges on deposit accounts		1,598		1,395		203	15
Income from bank owned life insurance		396		322		74	23
Other income		549		528		21	4
Gain on sales of loans held for sale		42		42		0	0
Loss on sales of assets held for sale		0		(100)		100	100
Total noninterest income	$	4,193	$	3,611	$	582	16	%

The discussion that follows addresses changes in selected categories of noninterest income.

Service charges on deposit accounts—The $203,000 or 15 percent increase in service charges on deposit accounts is primarily due to higher volume of overdraft fees.

Income from bank owned life insurance—The $74,000 or 23 percent increase in income from bank owned life insurance is primarily due to death benefits paid during the third quarter 2023.

Loss on sales of assets held for sale—The $100,000 or 100 percent change in loss on sales of assets held for sale was due to the loss recognized in the third quarter 2022 related to the disposition of a closed retail branch.

Noninterest Expense

The following table presents the components of total noninterest expense for the third quarter 2023, compared to the third quarter 2022.

Table 4 - Noninterest expense
		Three months ended				Change
		September 30,				Increase (Decrease)
(dollars in thousands)	2023		2022		$		%
Personnel	$	9,412	$	9,243	$	169	2	%
Occupancy of premises, net		853		943		(90)	(10)
Furniture and equipment		798		852		(54)	(6)
Professional and legal		549		367		182	50
Marketing		347		507		(160)	(32)
FDIC insurance		245		190		55	29
Debit card processing		546		455		91	20
Charitable donations		62		56		6	11
External data processing		974		981		(7)	(1)
Impaired loan carrying costs		107		217		(110)	(51)
Other		2,003		1,511		492	33
Total noninterest expense	$	15,896	$	15,322	$	574	4	%

The discussion that follows addresses changes in selected categories of noninterest expense.

Personnel—The $169,000 or 2 percent increase in personnel expense is attributed to higher variable compensation accruals in the third quarter 2023.

- 46 -

Professional and legal—The $182,000 or 50 percent increase in professional and legal expense is attributed to higher legal fees associated with corporate matters and higher consulting fees related to partial outsourcing of loan reviews and internal audits in the third quarter 2023.

Marketing—The $160,000 or 32 percent decrease in marketing expense is related to the marketing campaigns related to the new Hunt Valley Connections Center in the third quarter 2022.

FDIC insurance—The $55,000 or 29 percent increase in FDIC insurance expense is attributed to higher assessment rates during the current period.

Debit card processing—The $91,000 or 20 percent increase in debit card processing expense is attributed to incentive credits received in the third quarter 2022.

Impaired loan carrying costs—The $110,000 or 51 percent decrease in impaired loan carrying costs is attributed to the recovery of costs of prior periods during the current quarter.

Other—The $492,000 or 33 percent increase in other expense is associated with debit card dispute charge offs, higher appraisal expenses and new checking account rewards in the third quarter 2023 compared to the prior period. Several other categories increased slightly as attendance at seminars, business meetings and business development activities normalize following COVID.

Provision for Income Taxes

The provision for income taxes for the third quarter 2023 was $1,501,000 a decrease of $552,000 or 27 percent as compared to the third quarter 2022. The decrease was attributed to lower pre-tax net income for the third quarter 2023 compared to the third quarter 2022. The effective tax rate for the three months ended September 30, 2023 and September 30, 2022 was 20.2 percent and 22.3 percent, respectively. The effective tax rate differs from the statutory tax rate primarily due to the impact of certain elements with specific tax benefits, including tax-exempt income, such as income from tax-exempt investments, tax-exempt loans, and bank-owned life insurance.  

Nine Months Ended September 30, 2023 vs. Nine Months Ended September 30, 2022

The Corporation’s net income (earnings) was $19,520,000 for the first nine months of 2023 compared to $12,160,000 for the first nine months of 2022, an increase of $7,360,000 or 61 percent.

The schedule below presents selected performance metrics for the first nine months of both 2023 and 2022.

	Nine months ended
	September 30,
	2023			2022
Basic earnings per share	$	2.03		$	1.28
Diluted earnings per share	$	2.03		$	1.27
Cash dividend payout ratio		24.09	%		35.21	%
Return on average assets		1.20	%		0.69	%
Return on average equity		14.07	%		8.78	%
Net interest margin (tax equivalent basis)		3.81	%		3.21	%
Net overhead ratio		2.06	%		1.99	%
Efficiency ratio		63.32	%		70.44	%
Average equity to average assets		8.50	%		7.90	%

A more detailed analysis of the factors and trends affecting the Corporation’s earnings and financial position follows.

INCOME STATEMENT ANALYSIS

Net Interest Income

Net interest income for the nine months ended September 30, 2023 was $59,826,000, an increase of $6,035,000 or 11 percent compared to net interest income of $53,791,000 for the first nine months of 2022. The primary contributor to the increase was higher rates on commercial loans, partially offset by higher cost of interest bearing demand deposits and time deposits.

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The Corporation’s net interest margin, computed as interest income (tax-equivalent basis) annualized as a percentage of average interest earning assets, was 3.81 percent for the first nine months of 2023, representing an increase compared to the 3.21 percent net interest margin for the first nine months of 2022. The net interest margin expansion was predominantly the result of higher rates on commercial loans, partially offset by higher rates on interest bearing demand deposits and time deposits.

Total interest income for the first nine months of 2023 totaled $83,356,000, an increase of $24,103,000 or 41 percent above the amount of total interest income for the first nine months of 2022. The change was primarily a result of higher rates on commercial loans.

Interest income on loans increased $22,374,000 or 43 percent in the first nine months of 2023 compared to the same period in 2022. The average balance of outstanding loans increased $107,301,000 or 7 percent in the first nine months of 2023 compared to the first nine months of 2022.

Investment income for the first nine months of 2023 increased $2,501,000 or 46 percent compared to the first nine months of 2022. The average balance of investment securities increased $59,513,000 or 18 percent in the first nine months of 2023 compared to the first nine months of 2022, reflecting the change in mix of earning assets from interest bearing deposits with banks to investment securities. The tax-equivalent yield on investments for the first nine months of 2023 was 2.72 percent or 51 basis points higher than the 2.21 percent experienced during the first nine months of 2022. The average balance of interest bearing deposits with banks decreased $314,356,000 or 88 percent in the first nine months of 2023 compared to the first nine months of 2022. The yield on interest bearing deposits with banks was 4.92 percent for the first nine months of 2023, an increase of 404 basis points from 0.88 percent in the first nine months of 2022.

Total interest expense for the first nine months of 2023 was $23,530,000, an increase of $18,068,000 or 331 percent as compared to total interest expense of $5,462,000 for the first nine months of 2022. The change in interest expense was primarily a result of an increase in the cost of interest bearing demand deposits and time deposits.

Interest expense on deposits increased $17,075,000 or 440 percent in the first nine months of 2023 compared to the same period in 2022. The change was due primarily to an increase in the cost of interest bearing demand deposits and time deposits. The average balance of interest-bearing deposits for the first nine months of 2023 decreased $101,977,000 or 6 percent compared to the average for the first nine months of 2022. The average rate paid on interest-bearing deposits in the first nine months of 2023 was 1.90 percent, an increase of 157 basis points from the average rate of 0.33 percent paid on interest-bearing deposits during the first nine months of 2022. Also, noninterest-bearing deposits decreased, with the average volume for the first nine months of 2023 decreasing 16 percent to $421,397,000 as compared to $501,243,000 for the first nine months of 2022.

Interest expense on total borrowings for the first nine months of 2023 increased 63 percent compared to the first nine months of 2022, primarily due to higher rates on borrowings, except subordinated notes, which are currently at a fixed rate. Short-term borrowings consisting of repurchase agreements and other short-term borrowings, which includes borrowings from the Federal Home Loan Bank of Pittsburgh (FHLBP) Open Repo Line of Credit averaged $32,014,000 for the first nine months of 2023, compared to an average balance of $11,780,000 for the first nine months of 2022. The rate on average short-term borrowings for the first nine months of 2023 was 3.56 percent, an increase as compared to a rate of 0.40 percent for the same period in 2022. Long-term debt, which includes junior subordinated trust preferred securities, finance leases and long-term FHLBP borrowings, averaged $14,521,000 for the first nine months of 2023 and $20,049,000 for the first nine months of 2022. The decrease was attributable to FHLBP advances totaling $10,000,000 which matured and were repaid in the second quarter of 2022. For the first nine months of 2023, the rate on average long-term debt was 5.68 percent, an increase of 274 basis points as compared to a rate of 2.94 percent for the first nine months of 2022. Subordinated debentures, issued in December 2020 by the Corporation, averaged $30,798,000 for the first nine months of 2023 and $30,717,000 for the first nine months of 2022.

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Table 5-Average Balances and Interest Rates (tax equivalent basis)
	Nine months ended September 30,
	2023							2022
	Average				Yield/			Average				Yield/
(dollars in thousands)	Balance		Interest		Rate			Balance		Interest		Rate
Assets
Interest bearing deposits with banks	$	43,232	$	1,590		4.92	%	$	357,588	$	2,362		0.88	%
Investment securities:
Taxable		370,376		7,623		2.75			308,214		5,111		2.22
Tax-exempt		22,877		374		2.19			25,526		398		2.08
Total investment securities		393,253		7,997		2.72			333,740		5,509		2.21
Loans:
Taxable (1)		1,645,243		73,319		5.96			1,543,502		51,059		4.42
Tax-exempt		22,200		644		3.88			16,640		509		4.09
Total loans		1,667,443		73,963		5.93			1,560,142		51,568		4.42
Total earning assets		2,103,928		83,550		5.31			2,251,470		59,439		3.53
Other assets (2)		71,693							84,516
Total assets	$	2,175,621						$	2,335,986
Liabilities and Shareholders' Equity
Deposits:
Interest bearing demand	$	906,847	$	13,615		2.01	%	$	986,805	$	1,999		0.27	%
Savings		152,363		35		0.03			162,538		37		0.03
Time		413,646		7,304		2.36			425,490		1,843		0.58
Total interest bearing deposits		1,472,856		20,954		1.90			1,574,833		3,879		0.33
Short-term borrowings		32,014		852		3.56			11,780		35		0.40
Long-term debt and junior subordinated debt		14,521		617		5.68			20,049		441		2.94
Subordinated notes		30,798		1,107		4.81			30,717		1,107		4.82
Total interest bearing liabilities		1,550,189		23,530		2.03			1,637,379		5,462		0.45
Noninterest bearing deposits		421,397							501,243
Other liabilities		19,064							12,766
Shareholders' equity		184,971							184,598
Total liabilities and
shareholders' equity	$	2,175,621						$	2,335,986
Net interest income (tax equivalent basis)			$	60,020						$	53,977
Net interest margin (3)						3.81	%						3.21	%
Tax equivalent adjustment				(194)							(186)
Net interest income			$	59,826						$	53,791

(1)Average balance includes average nonaccrual loans of $8,327,000 for 2023 and $26,206,000 for 2022.

Interest includes net loan fees of $2,308,000 for 2023 and $3,653,000 for 2022.

(2)Average balance includes average bank owned life insurance and foreclosed real estate.

(3)Net interest income (tax equivalent basis) annualized as a percentage of average interest earning assets.

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Table 6-Rate/Volume Analysis of Changes in Net Interest Income (tax equivalent basis)
	Nine months ended
	September 30,
	2023 vs. 2022
	Increase (decrease) due to change in*
(dollars in thousands)	Volume		Rate		Net
Interest Income
Interest bearing deposits with banks	$	(2,076)	$	1,304	$	(772)
Investment securities:
Taxable		1,015		1,497		2,512
Tax-exempt		(41)		17		(24)
Loans:
Taxable		2,432		19,828		22,260
Tax-exempt		170		(35)		135
Total interest income		1,500		22,611		24,111
Interest Expense
Deposits:
Interest bearing demand		(139)		11,755		11,616
Savings		(2)		0		(2)
Time		(51)		5,512		5,461
Short-term borrowings		2		815		817
Long-term debt and junior subordinated debt		(123)		299		176
Subordinated notes		3		(3)		0
Total interest expense		(310)		18,378		18,068
Net interest income (tax equivalent basis)	$	1,810	$	4,233	$	6,043

*Changes which are due to both volume and rate are allocated in proportion to their relationship to the amount of change attributed directly to volume or rate.

Provision for Credit Losses

The provision for credit losses is an expense charged to earnings to cover the estimated losses attributable to uncollected loans. The provision reflects management’s judgment of an appropriate level for the allowance for credit losses. Total provision for credit losses, including off-balance sheet exposures, for the first nine months of 2023 was $912,000. The allowance as a percentage of total loans was 1.26 percent at September 30, 2023, as compared to 1.27 percent at December 31, 2022 and 1.39 percent at September 30, 2022.

More information about the allowance for loan losses can be found in this report under the caption Allowance for Loan Losses on page 56.

Noninterest Income

The following table presents the components of total noninterest income for the first nine months of 2023, compared to the first nine months of 2022.

Table 7 - Noninterest income
	Nine months ended				Change
	September 30,				Increase (Decrease)
(dollars in thousands)	2023		2022		$		%
Trust and investment services fees	$	3,770	$	3,440	$	330		10	%
Income from mutual fund, annuity and insurance sales		1,007		958		49		5
Service charges on deposit accounts		4,624		4,045		579		14
Income from bank owned life insurance		1,047		941		106		11
Other income		1,998		1,479		519		35
Gain on sales of loans held for sale		48		621		(573)		(92)
Gain (loss) on sales of assets held for sale		118		(100)		218		218
Loss on sales of securities		(388)		0		(388)		(100)
Total noninterest income	$	12,224	$	11,384	$	840		7	%

- 50 -

The discussion that follows addresses changes in selected categories of noninterest income.

Service charges on deposit accounts—The $579,000 or 14 percent increase in service charges on deposit accounts is attributable to an increase in overdraft fees in the current period.

Other income—The $519,000 or 35 percent increase in other income is attributable to fees associated with interest rate swaps recognized in the current period.

Gain on sales of loans held for sale—The $573,000 or 92 percent decrease in gain on sales of loans is due to the sale of a smaller volume of mortgage loans to the secondary market during the current period.

Gain on sales of assets held for sale—The $218,000 or 218 percent increase in gain on sales of assets is due to the sale of the Gardenville branch real estate during the current period.

Loss on sales of securities—There was a $388,000 loss on sales of securities in the current period compared to no sales of securities in the prior period.

Noninterest Expense

The following table presents the components of total noninterest expense for the first nine months of 2023, compared to the first nine months of 2022.

Table 8 - Noninterest expense
	Nine months ended				Change
	September 30,				Increase (Decrease)
(dollars in thousands)	2023			2022		$	%
Personnel	$	27,943	$	26,124	$	1,819		7	%
Occupancy of premises, net		2,711		2,844		(133)		(5)
Furniture and equipment		2,514		2,551		(37)		(1)
Professional and legal		1,395		2,281		(886)		(39)
Marketing		1,010		1,340		(330)		(25)
FDIC insurance		739		617		122		20
Debit card processing		1,456		1,222		234		19
Charitable donations		993		971		22		2
External data processing		3,027		2,820		207		7
(Recovery of) impaired loan carrying costs		(229)		512		(741)		(145)
Other		4,624		4,939		(315)		(6)
Total noninterest expense	$	46,183	$	46,221	$	(38)		(0)	%

The discussion that follows addresses changes in selected categories of noninterest expense.

Personnel—The $1,819,000 or 7 percent increase in personnel expense is attributed to higher variable compensation accruals in the current period.

Professional and legal—The $886,000 or 39 percent decrease in professional and legal expense is primarily due to corporate matters in the prior period.

Marketing—The $330,000 or 25 percent decrease in marketing expense is due to activity with branding and marketing campaigns in the prior period.

FDIC insurance—The $122,000 or 20 percent increase in FDIC insurance expense is attributed to higher assessment rates in the current period.

Debit card processing—The $234,000 or 19 percent increase in debit card processing expense is attributed to higher reliance by our clients on electronic access to their accounts in the current period.

- 51 -

(Recovery of) impaired loan carrying costs—The $741,000 or 145 percent decrease in impaired loan carrying costs is attributed to the recovery of costs associated with impaired loans during the current period.

Provision for Income Taxes

The provision for income taxes for the nine months ended September 30, 2023 was $5,435,000 an increase of $2,075,000 or 62 percent as compared to the nine months ended September 30, 2022. The increase was attributed to higher pre-tax net income for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. The effective tax rate for the nine months ended September 30, 2023 and September 30, 2022 was 21.8 percent and 21.7 percent, respectively. The effective tax rate differs from the statutory tax rate primarily due to the impact of certain elements with specific tax benefits, including tax-exempt income, such as income from tax-exempt investments, tax-exempt loans, and bank-owned life insurance

BALANCE SHEET REVIEW

Interest Bearing Deposits with Banks

On September 30, 2023, interest bearing deposits with banks totaled $28,858,000, a decrease of $70,919,000 or 71 percent, compared to the level at year-end 2022. The decrease is primarily due to an increase in commercial loans, resulting in a use of cash.

Investment Securities (Available-for-Sale)

The Corporation’s entire investment securities portfolio is classified available-for-sale, and is comprised of interest-earning debt securities. The overall composition of the Corporation’s investment securities portfolio is provided in Note 2—Securities. On September 30, 2023, the fair value of investment securities available-for-sale totaled $335,656,000, which represented a decrease of $9,801,000 as compared to the fair value of investment securities at year-end 2022. Purchases of securities did not exceed the cash flows from principal reductions and maturities during the first nine months of 2023.

Restricted Investments in Bank Stock, at Cost

On September 30, 2023, restricted investments in bank stock, at cost, was $2,152,000, which was $1,197,000 or 125 percent higher than the level at year-end 2022. This was attributable to short-term borrowings of $25,875,000 with FHLBP, which requires a corresponding membership stock purchase.

Loans Held For Sale

On September 30, 2023, loans held for sale totaled $1,103,000, which was $949,000 or 616 percent higher than the level at year-end 2022. This was primarily attributable to SBA loans held for sale at the end of the period.

Loans Held For Investment

On September 30, 2023, total loans, net of deferred fees, were $1.70 billion, which was $71,523,000 or 4 percent higher than the level at year-end 2022. The composition of the Corporation’s loan portfolio is provided in Note 4—Loans and Allowance for Credit Losses.

Deposits

Deposits are the Corporation’s principal source of funding for earning assets. On September 30, 2023, deposits totaled $1.91 billion, which reflected a $36,841,000 or 2 percent decrease compared to the level at year-end 2022. Of the decrease in total deposits, $65,367,000 is attributable to noninterest bearing deposits, offset by a $28,526,000 increase in interest bearing deposits, primarily money market accounts and time deposits. The Corporation maintains a well-diversified deposit base and has a comparatively low level of uninsured deposits. At September 30, 2023, 83% of the Bank’s deposits were estimated to be FDIC-insured, and an additional 7% of deposits were fully collateralized. The composition of the Corporation’s total deposit portfolio is provided in Note 5—Deposits.

Short-term Borrowings

Short-term borrowings, which consist of securities sold under agreements to repurchase (repurchase agreements), federal funds purchased, and other short-term borrowings, totaled $39,099,000 at September 30, 2023, which reflected a $27,494,000 or 237 percent increase compared to the level at year-end 2022. At September 30, 2023, the balance of other short-term borrowings was $25,875,000 compared to $0 at December 31, 2022, which consisted of FHLBP Open Repo line of credit advances.

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Long-term Debt and Subordinated Debentures

The Corporation uses long-term borrowings as a secondary funding source for asset growth and to manage interest rate risk. On September 30, 2023, long-term debt, including subordinated debentures totaled $42,353,000 compared to $42,314,000 at year-end 2022. A listing of outstanding long-term debt obligations is provided in Note 6—Short-Term Borrowings and Long-Term Debt.

Shareholders’ Equity and Capital Adequacy

Shareholders’ equity, or capital, enables Codorus Valley to maintain asset growth and absorb losses. Capital adequacy can be affected by a multitude of factors, including profitability, new stock issuances, corporate expansion and acquisitions, dividend policy and distributions, and regulatory mandates. The Corporation’s total shareholders’ equity was approximately $183,363,000 on September 30, 2023, an increase of $6,063,000 or 3 percent compared to the level at year-end 2022. The increase was primarily attributable to net income of $19,520,000, partially offset by dividends paid of $4,701,000 for the nine months ended September 30, 2023 and the adoption of ASC Topic 326 (CECL) of $2,100,000.

Cash Dividends on Stock

The Corporation has historically paid cash dividends on its stock on a quarterly basis. The Board of Directors determines the dividend rate after considering the Corporation's capital requirements, current and projected net income, and other relevant factors. As recently announced, the Board of Directors declared a quarterly cash dividend of $0.17 per share on October 10, 2023, payable on November 14, 2023, to shareholders of record at the close of business on October 24, 2023. The cash dividend follows a quarterly cash dividend of $0.16 per share distributed in February 2023 and May 2023 and a quarterly cash dividend of $0.17 per share distributed in August 2023.

Capital Adequacy

The Corporation and PeoplesBank are subject to various regulatory capital requirements administered by banking regulators that involve quantitative guidelines and qualitative judgments. The regulatory capital measures for the Corporation and PeoplesBank as of September 30, 2023 and the minimum capital ratios established by regulators are set forth in Note 8—Regulatory Matters to the financial statements. We believe that PeoplesBank is well capitalized on September 30, 2023 and had no regulatory dividend restrictions (see Note 8—Regulatory Matters to the financial statements).

RISK MANAGEMENT

Credit Risk Management

Credit risk represents the possibility that a loan client, counterparty or issuer may not perform in accordance with contractual terms, posing one of the most significant risks of loss to the Corporation. Accordingly, the Corporation emphasizes the management of credit risk, and has established a lending policy which management believes is sound given the nature and scope of our operations. The Credit Risk Management section included in Item 7 of the Corporation’s previously filed Annual Report on Form 10-K for the year ended December 31, 2022, provides a more detailed overview of the Corporation’s credit risk management process.

Management regularly analyzes the commercial real estate portfolio, which includes the review of occupancy, cash flows, expenses and expiring leases, as well as the location of the real estate. At September 30, 2023, the Corporation has $133,600,000 outstanding loan balances related to office space. Management believes that the office space portfolio is well-diversified and includes only limited exposure to properties located in major metro markets.

Nonperforming Assets

Nonperforming assets, as shown in the table below, are asset categories that pose the greatest risk of loss. The level of nonperforming assets at September 30, 2023 was $7,988,000, which decreased by $3,461,000 or 30 percent when compared to year-end 2022, of which $1,213,000 relates to troubled debt restructured loans reported under previously applicable GAAP. The decrease was primarily attributed to the repayment of nonaccrual loans during the year.

The Corporation regularly monitors large and criticized assets in its commercial loan portfolio recognizing that prolonged low economic growth, or a weakening economy, could have negative effects on these commercial borrowers. Nonperforming assets are monitored and managed for collection of these accounts. Collection efforts, including modification of contractual terms for individual accounts based on prevailing market conditions and liquidation of collateral assets, are employed to maximize recovery. A special assets committee meets regularly, at a minimum quarterly, to review nonperforming assets. We generally rely on appraisals performed by independent licensed appraisers to determine the value of real estate collateral for collateral-dependent loans. Generally, an appraisal is performed when: an account reaches 90 days past due, unless a certified appraisal was completed within the past twelve months; market values have changed significantly; the condition of the property has changed significantly; or the existing appraisal is outdated based upon regulatory or policy requirements. In instances where the value of the collateral, net of costs to sell, is less than

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the net carrying amount for individually evaluated commercial related loans, a specific loss allowance is established for the difference. Further provisions for credit losses may be required for nonaccrual loans as additional information becomes available or conditions change. When it is probable that some portion or an entire loan balance will not be collected, that amount is charged off as loss against the allowance.

The paragraphs and table below address significant changes in the nonperforming asset categories as of September 30, 2023 compared to December 31, 2022.

Table 9 – Nonperforming assets

(dollars in thousands)	September 30, 2023
Nonaccrual loans:
Commercial loans	$	3,984
Commercial real estate:
Construction		40
Owner occupied		2,043
Non-owner occupied		204
Residential real estate:
Revolving		506
Other		828
Total nonaccrual loans	$	7,605
Other Real Estate Owned	$	383
Total Nonperforming assets	$	7,988
Individually evaluated loans without a valuation allowance	$	5,617
Individually evaluated loans with a valuation allowance		1,988
Total individually evaluated loans	$	7,605
Valuation allowance related to individually evaluated loans	$	1,092
Nonperforming loans as a % of total loans		0.45	%
Nonperforming assets to total loans and foreclosed real estate		0.47	%
Nonperforming assets as a % of total period-end assets		0.36	%
ACL as a % of nonperforming loans		282.03	%
ACL as a % of nonperforming assets		268.50	%
ACL as a % of total loans		1.26	%
Nonaccrual loans as a % of applicable portfolio:
Commercial loans		2.32	%
Commercial real estate:
Construction		0.02	%
Owner occupied		0.59	%
Non-owner occupied		0.04	%
Residential real estate:
Revolving		0.48	%
Other		0.30	%

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(dollars in thousands)		December 31, 2022
Nonaccrual loans:
Builder & developer	$	1,773
Commercial real estate investor		222
Residential real estate investor		856
Manufacturing		2,965
Agriculture		912
Commercial other		3,436
Residential mortgages		349
Home equity		457
Total nonaccrual loans	$	10,970
Troubled debt restructurings (TDRs):
Performing	$	1,213
Total TDR loans	$	1,213
Other Real Estate Owned:	$	479
Total Nonperforming assets	$	11,449
Impaired loans without a valuation allowance	$	9,400
Impaired loans with a valuation allowance		2,783
Total impaired loans	$	12,183
Valuation allowance related to impaired loans	$	2,484
Nonaccrual loans as a % of total loans		0.67	%
Nonperforming loans as a % of total loans		0.67	%
Nonperforming assets as a % of total period-end assets		0.52	%
ALL as a % of nonaccrual loans		189.02	%
ALL as a % of nonperforming assets		181.12	%
ALL as a % of total loans		1.27	%
Nonaccrual loans as a % of applicable portfolio:
Builder & developer		1.38	%
Commercial real estate investor		0.06	%
Residential real estate investor		0.33	%
Manufacturing		3.42	%
Agriculture		1.00	%
Commercial other		1.64	%
Residential mortgages		0.26	%
Home equity		0.47	%

Nonperforming loans

Nonperforming loans consist of nonaccrual loans and accruing loans 90 days or more past due. We generally place a loan on nonaccrual status and cease accruing interest income (i.e., recognize interest income on a cash basis, as long as the loan is sufficiently collateralized) when loan payment performance is unsatisfactory and the loan is past due 90 days or more. A loan is returned to interest accruing status when we determine that circumstances have improved to the extent that all of the principal and interest amounts contractually due are current for at least six consecutive payments and future payments are reasonably assured. Loans past due 90 days or more and still accruing interest represent loans that are contractually past due, but are well collateralized and in the process of collection. As of September 30, 2023, the nonperforming loan portfolio balance totaled $7,605,000, compared to $10,970,000 at year-end 2022. For both periods, the nonperforming portfolio balance was comprised primarily of collateralized commercial loans.

Foreclosed Real Estate

Foreclosed real estate represents real estate acquired to satisfy debts owed to PeoplesBank and is included in the Other Assets category on the Corporation’s balance sheet. Foreclosed real estate was $383,000 as of September 30, 2023 and $479,000 as of December 31, 2022. A write-down of $96,000 was recorded during the nine months ended September 30, 2023.

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Allowance for Credit Losses (ACL)

The ACL is a reserve accumulated on the Consolidated Balance Sheets through the recognition of the provision for credit losses. The Corporation records a provision for credit losses in the Consolidated Statements of Income to maintain the ACL at a level considered sufficient to absorb expected credit losses.

The ACL on loans was $21,449,000 as of September 30, 2023 and $20,736,000 as of December 31, 2022. As a percentage of period-end loans, the ACL was 1.26 percent as of September 30, 2023 and 1.27 percent as of December 31, 2022. As detailed in Note 1–Summary of Significant Accounting Policies, the ACL increased $927,000 at the adoption of CECL.

The ACL as a percentage of nonperforming loans was 282.03 percent as of September 30, 2023 and 189.02 percent as of December 31, 2022. The ACL as a percentage of nonperforming assets was 268.50 percent as of September 30, 2023 and 181.12 percent as of December 31, 2022.

The ACL on unfunded commitments was $2,212,000 as of September 30, 2023 and $0 as of December 31, 2022. The Corporation recorded $323,000 of provision for credit losses on unfunded commitments for the nine months ended September 30, 2023, compared to none in the prior year. Similar to the increase in ACL on loans, the increase in ACL and provision expense on unfunded commitments was related to the adoption of CECL.

Liquidity Risk Management

Maintaining adequate liquidity provides the Corporation with the ability to meet financial obligations to depositors, loan clients, employees, and shareholders on a timely and cost effective basis in the normal course of business. Additionally, adequate liquidity provides funds for growth and business opportunities as they arise. Liquidity is generated from transactions relating to both the Corporation's assets and liabilities. The primary sources of asset liquidity are funds received from client loan payments, investment maturities and cash inflows from mortgage-backed securities, and the net proceeds of asset sales. The primary sources of liability liquidity are deposit growth, and funds obtained from short-term borrowings and long-term debt. The Consolidated Statements of Cash Flows, included in this report, present the changes in cash from operating, investing and financing activities. At September 30, 2023, we believe that liquidity was adequate based upon the availability of unpledged available-for-sale securities with a fair value totaling approximately $108,054,000. With an unrealized loss of $42,869,000, liquidation options would need to be considered, however there would be options for pledging of these securities to other borrowing sources. Although the Corporation has not utilized the Federal Reserve’s Bank Term Funding Facility as of September 30, 2023, the program has attractive features, such as being able to borrow based on the par values (rather than market values) of a bank’s investment securities that are pledged as collateral. For this reason, the program would be considered among the Corporation’s other wholesale borrowing options if additional liquidity was needed. Available credit from the Federal Home Loan Bank of Pittsburgh totals approximately $723,088,000. The Corporation’s loan-to-deposit ratio was 89.4 percent as of September 30, 2023, 84.0 percent as of December 31, 2022 and 89.3 percent as of June 30, 2022.

Off-Balance Sheet Arrangements

The Corporation’s financial statements do not reflect various commitments that are made in the normal course of business, which may involve some liquidity risk. These commitments consist primarily of commitments to grant new loans, unfunded commitments under existing loan facilities, and letters of credit issued under the same standards as on-balance sheet instruments. Unused commitments at September 30, 2023, totaled $733,233,000 and consisted of $640,385,000 in unfunded commitments under existing loan facilities, $76,139,000 to grant new loans and $16,699,000 in letters of credit. Generally these commitments have fixed expiration dates or termination clauses and are for specific purposes. Accordingly, many of the commitments are expected to expire without being drawn upon and, therefore, generally do not present significant liquidity risk to the Corporation or PeoplesBank.

Critical Accounting Estimates

Disclosure of the Corporation’s significant accounting policies is included in Note 1 in the notes to the consolidated financial statements its December 31, 2022 Form 10-K. Some of these policies require management to make significant judgments, estimates and assumptions that have a material impact on the carrying value of certain assets and liabilities. Management makes significant estimates in determining the allowance for credit loans. Subsequent to the adoption of ASC 326 in the first quarter of 2023, the Corporation’s accounting policy for ACL – loans is now as follows:

Allowance for credit losses – loans

The allowance for credit losses (“ACL”) is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

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Management estimates the allowance balance using relevant available information from both internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors. These adjustments are commonly known as the Qualitative Framework.

In addition to the estimated quantitative credit loss for loans evaluated collectively, qualitative factors that may not be fully captured in the quantitative results are also evaluated. These include changes in lending policy, the nature and volume of the portfolio, overall business conditions in the economy, credit concentrations, competition, model imprecision, and legal and regulatory requirements. Qualitative adjustments are judgmental and are based on management’s knowledge of the portfolio and the markets in which the Corporation operates. Qualitative adjustments are evaluated and approved on a quarterly basis. Additionally, the ACL includes other allowance categories that are not directly incorporated in the quantitative results including loans in process.

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. Loans evaluated collectively for expected credit losses include loans on accrual status and loans initially evaluated individually but determined to not to have enhanced credit risk characteristics. The Corporation has identified the following portfolio segments:

Commercial loans

Commercial real estate – construction

Commercial real estate – owner occupied

Commercial real estate – non-owner occupied

Residential real estate – construction

Residential real estate – revolving

Residential real estate – multi family

Residential real estate – other

Consumer loans

The Corporation measures the allowance for credit losses using the following methods.

• Loans are aggregated into pools based on similar risk characteristics.

• The Probability of Default (PD) and Loss Given Default (LGD) CECL model components are determined based on loss estimates driven by historical experience at the input level.

• The PD model component uses "through the economic cycle transition" matrices based on the Corporation’s and peer group historical loan and transaction data across each pool of loans.

• The LGD model component calculates a lifetime estimate across each pool of loans utilizing a nonparametric loss curve modeling approach.

• Reasonable and supportable forecasts are incorporated into the PD model component that are based on different economic forecasts and scenarios sourced from an external party. A future loss forecast over the reasonable and supportable forecast period is based on the projected performance of specific economic variables that statistically correlate with the PD and LGD pools. After the reasonable and supportable forecast period, loss estimates naturally revert to input-level reversion.

• Cash flow assumptions are established for each loan using maturity date, amortization schedule and interest rate.

• A constant prepayment rate is calculated for each loan pool in the CECL model.

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation. When management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.

Loans are modified if the Corporation grants borrowers experiencing financial difficulties concessions that it would not otherwise consider. Concessions granted under a modification may involve a reduction of the interest rate, forgiveness of principal, extension of the term of the loan, and/or other-than-insignificant payment delays.

Expected credit losses are estimated over the contractual terms of the loans, adjusted for expected prepayments when appropriate.

To the extent actual outcomes differ from management’s estimates, additional provision for credit losses may be required that would impact the Corporation’s operating results.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The most significant market risk to which the Corporation is exposed is interest rate risk. The primary business of the Corporation and the composition of its balance sheet consist of investments in interest earning assets (primarily loans and securities), which are funded by interest bearing liabilities (deposits and borrowings), all of which have varying levels of sensitivity to changes in market

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interest rates. Changes in rates also have an impact on the Corporation’s liquidity position and could affect its ability to meet obligations and continue to grow.

The Corporation employs various management techniques to minimize its exposure to interest rate risk. An Asset Liability Management Committee, consisting of key financial and senior management personnel, meets on a regular basis. The Committee is responsible for reviewing the interest rate sensitivity and liquidity positions of the Corporation, reviewing projected sources and uses of funds, approving asset and liability management policies, monitoring economic conditions, and overseeing the formulation and implementation of strategies regarding balance sheet positions.

Simulation of net interest income is performed for the next twelve-month period. A variety of interest rate scenarios are used to measure the effects of sudden and gradual movements upward and downward in the yield curve. These results are compared to the results obtained in a flat or unchanged interest rate scenario. Simulation of net interest income is used primarily to measure the Corporation’s short-term earnings exposure to rate movements. A "shock" is an immediate upward or downward movement of interest rates. The shocks do not take into account changes in client behavior that could result in changes to mix and/or volumes in the balance sheet, nor do they account for competitive pricing over the forward 12-month period. The Corporation applies these interest rate “shocks” to its financial instruments up and down 100, 200, 300, and 400 basis points. A 400 basis point decrease in interest rates is not simulated at this time.

The following table summarizes the expected impact of interest rate shocks on net interest income as well as the Corporation’s policy limits at each level. All scenarios were within policy limits at September 30, 2023.

Change in Interest Rates	Annual Change in Net		% Change in Net		% Change
(basis points)	Interest Income (in thousands)		Interest Income		Policy Limit
+100	$	654	0.82	%	(7.50)	%
(100)	$	642	0.81	%	(7.50)	%
+200	$	1,310	1.65	%	(15.00)	%
(200)	$	589	0.74	%	(15.00)	%
+300	$	1,978	2.49	%	(25.00)	%
(300)	$	(5)	(0.01)	%	(25.00)	%
+400	$	2,662	3.36	%	(35.00)	%

Item 4. Controls and Procedures

The Corporation carried out an evaluation, under the supervision and with the participation of the Corporation’s management, including the Corporation’s Chief Executive Officer and Treasurer, of the effectiveness of its disclosure controls and procedures, as defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Based upon the evaluation, the Corporation’s Chief Executive Officer and Treasurer concluded that, as of September 30, 2023, the Corporation’s disclosure controls and procedures were effective. The Corporation’s disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that information required to be disclosed in the Corporation’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. A control system, no matter how well conceived and operated, must reflect the fact that there are resource constraints and that the benefits of controls must be considered relative to their costs, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Effective January 1, 2023, the Corporation adopted ASC 326. The Corporation designed new controls and modified existing controls in conjunction with its adoption. These additional controls over financial reporting included controls over model creation and design, model governance and model assumptions, among others. There were no changes in the Corporation’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

Part II—OTHER INFORMATION

Item 1. Legal Proceedings

The Corporation is involved in pending and threatened claims and other legal proceedings from time to time in the ordinary course of its business activities. Management evaluates the possible impact of these matters taking into consideration the most recent information available. A loss reserve is established for any matter for which it is believed that a loss is both probable and reasonably estimable. Once established, the reserve is adjusted as appropriate to reflect any subsequent developments. Actual losses with respect to any such

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matter may be more or less than the amount estimated. For any matter for which a loss is not probable, or the amount of the loss cannot reasonably be estimated, no loss reserve is established.

In addition, the Corporation may be involved in legal proceedings in the form of investigations of regulatory or governmental inquiries covering a range of possible issues. These could be specific to the Corporation, or part of more wide-spread inquires by regulatory authorities. These inquiries or investigations could lead to administrative, civil or criminal proceedings involving the Corporation and could result in fines, penalties, restitution, or other types of sanctions, or the need for the Corporation to undertake remedial actions, or to alter its business, financial or accounting practices.

Management believes that any liabilities, individually or in the aggregate, that may result from the final outcomes of pending or threatened legal proceedings will not have a material adverse effect on the financial condition of the Corporation or upon its results of operations.

Item 1A. Risk Factors

Other than the risk factors set for below, there have been no material changes to the risk factors as previously disclosed in Item 1A – Risk Factors – in the Corporation’s 2022 10-K.

Risks Related to Recent Banking Industry Turmoil

The Corporation is exposed to the risk that when a bank or other financial institution experiences financial difficulties, there could be an adverse “contagion” impact on other banking institutions. The failures of Silicon Valley Bank in California, Signature Bank in New York and First Republic Bank in California during the first and second quarters of 2023 caused an element of panic and uncertainty in the investor community and among bank customers generally, including, specifically, deposit customers. While the Corporation does not believe that the circumstances of these three failures are necessarily indicators of broader issues for concern with all other banks or with the banking system itself, the failures are likely to reduce customer confidence, affect sources of funding and liquidity, increase regulatory requirements and costs, adversely affect financial markets and/or have negative reputational ramifications for institutions in the banking industry, including, possibly, the Corporation and its PeoplesBank subsidiary. The Corporation will continue to closely monitor the ongoing events and volatility in the financial services industry, together with any responsive measures taken by the banking regulators to mitigate or manage the concerns of bank customers regarding FDIC deposit insurance coverage and the safety and soundness of community banks.

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

The Corporation relies on its subsidiary PeoplesBank, A Codorus Valley Company, for dividend distributions, which are subject to restrictions as reported in Note 9—Regulatory Matters of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022.

The Corporation’s Board of Directors approved a new Share Repurchase Program in January 2023. Under the newly approved Program, the Corporation is authorized to repurchase up to $5 million of the Corporation’s issued and outstanding common stock. All shares of common stock repurchased pursuant to the Program are required to be held as treasury shares and be available for use and reissuance for purposes as and when determined by the Board of Directors including, without limitation, pursuant to the Corporation’s Dividend Reinvestment and Stock Purchase Plan and its equity compensation program. There was no activity under the new Program during the three and nine months ended September 30, 2023.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

This Item 4 is not applicable to the Corporation.

Item 5. Other Information

None

‎

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Item 6. Exhibits

Exhibit Number	Description of Exhibit
3.1	Amended Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q for June 30, 2018, filed with the Commission on August 6, 2018)
3.2	Amended and Restated By-laws (Incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K filed with the Commission on December 20, 2021)
4.1	Form of 4.50% Fixed-to-Floating Rate Subordinated Notes due 2030 of Codorus Valley Bancorp, Inc. (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Commission on December 10, 2020)
31.1	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – filed herewith.
31.2	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – filed herewith.
32	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – filed herewith.
101	Financial statements from the Quarterly Report on Form 10-Q of Codorus Valley Bancorp, Inc. for the quarter ended September 30, 2023, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income (iii) the Consolidated Statements of Comprehensive Income (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Changes in Shareholder’s Equity, and (vi) the Notes to Consolidated Financial Statements – filed herewith.
104	Cover page interactive data file (formatted as inline XBRL and contained in Exhibit 101)

‎

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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.

	Codorus Valley Bancorp, Inc. (Registrant)
November 6, 2023	/s/ Craig L. Kauffman
Date	Craig L. Kauffman,
	President
	and Chief Executive Officer (Principal Executive Officer)
November 6, 2023	/s/ Larry D. Pickett
Date	Larry D. Pickett
	Treasurer
	(Principal Financial and Accounting Officer)

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EX-31.1

EXHIBIT 31.1

Certification of Principal Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Craig L. Kauffman, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Codorus Valley Bancorp, Inc.;

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

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

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

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

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

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

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

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of 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 the 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:   November6, 2023	/s/ Craig L. Kauffman
	Craig L. Kauffman,
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

Certification of Principal Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Larry D. Pickett, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Codorus Valley Bancorp, Inc.;

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

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

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

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

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

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

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

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of 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 the 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:   November6, 2023	/s/ Larry D. Pickett
	Larry D. Pickett
	Treasurer
	(Principal Financial and Accounting Officer)

EX-32

EXHIBIT 32

Certification of Principal Executive Officer and Principal Financial Officer

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

The certification set forth below is being submitted in connection with the Quarterly Report of Codorus Valley Bancorp, Inc. (the "Company") on Form 10-Q for the period ended September 30, 2023, as filed with the Securities and Exchange Commission (the "Report"),  for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Craig L. Kauffman, the Chief Executive Officer, and Larry D. Pickett, the Principal Financial Officer, of the Company, each certifies that, to the best of his knowledge:

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

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

Date:   November6, 2023	/s/ Craig L. Kauffman
	Craig L. Kauffman,
	President and Chief Executive Officer
	(Principal Executive Officer)
	/s/ Larry D. Pickett
	Larry D. Pickett
	Treasurer
	(Principal Financial and Accounting Officer)

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2023	Oct. 27, 2023
Document And Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Current Fiscal Year End Date	--12-31
Entity File Number	0-15536
Entity Registrant Name	CODORUS VALLEY BANCORP, INC.
Entity Incorporation, State or Country Code	PA
Entity Tax Identification Number	23-2428543
Entity Address, Address Line One	105 Leader Heights Road
Entity Address, City or Town	York
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	17403
City Area Code	717
Local Phone Number	747-1519
Title of 12(b) Security	Common Stock, $2.50 par value
Trading Symbol	CVLY
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		9,611,110
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Entity Central Index Key	0000806279
Amendment Flag	false

XML

Consolidated Balance Sheets - USD ($) $ in Thousands		Sep. 30, 2023	Dec. 31, 2022
Assets
Interest bearing deposits with banks		$ 28,858	$ 99,777
Cash and due from banks		22,449	20,662
Total cash and cash equivalents		51,307	120,439
Securities, available-for-sale, at fair value (amortized cost $391,694 net of allowance for credit losses of $0)		335,656	345,457
Restricted investment in bank stocks, at cost		2,152	955
Loans held for sale		1,103	154
Loans (net of deferred fees of $3,718 - 2023 and $3,813 - 2022)		1,704,380	1,632,857
Less-allowance for credit losses	[1]	(21,449)	(20,736)
Net loans		1,682,931	1,612,121
Premises and equipment, net		19,562	21,136
Operating leases right-of-use assets		2,618	3,072
Goodwill		2,301	2,301
Other assets		92,962	89,417
Total assets		2,190,592	2,195,052
Deposits
Noninterest bearing		398,486	463,853
Interest bearing		1,507,892	1,479,366
Total deposits		1,906,378	1,943,219
Short-term borrowings		39,099	11,605
Long-term debt and junior subordinated debt		11,528	11,550
Subordinated notes - face amount $31,000 (less discount and debt issuance cost of $175 at September 30, 2023 and $236 at December 31, 2022)		30,825	30,764
Operating leases liabilities		2,726	3,204
Allowance for credit losses on off-balance sheet credit exposures		2,212	0
Other liabilities		14,461	17,410
Total liabilities		2,007,229	2,017,752
Shareholders' equity
Preferred stock, par value $2.50 per share; 1,000,000 shares authorized; shares issued and outstanding: 0 at September 30, 2023 and 0 at December 31, 2022		0	0
Common stock, par value $2.50 per share; 30,000,000 shares authorized; shares issued: 9,883,660 at September 30, 2023 and December 31, 2022; and shares outstanding: 9,618,854 at September 30, 2023 and 9,581,230 at December 31, 2022		24,709	24,709
Additional paid-in capital		142,525	141,896
Retained earnings		64,816	52,146
Accumulated other comprehensive loss		(42,869)	(34,764)
Treasury stock shares outstanding, at cost: 264,806 shares at September 30, 2023 and 302,430 at December 31, 2022		(5,818)	(6,687)
Total shareholders' equity		183,363	177,300
Total liabilities and shareholders' equity		$ 2,190,592	$ 2,195,052

[1] Results of reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP.

XML

Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Securities, amortized cost	$ 391,694,000	$ 390,922,000
Securities, allowance for credit losses	0
Loans, deferred fees	$ 3,718,000	$ 3,813,000
Preferred stock, par value	$ 2.50	$ 2.50
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 2.50	$ 2.50
Common stock, shares authorized	30,000,000	30,000,000
Common stock, shares issued	9,883,660	9,883,660
Common stock, shares outstanding	9,618,854	9,581,230
Treasury stock, at cost, shares	264,806	302,430
Subordinated Notes [Member]
Debt instrument face amount	$ 31,000,000	$ 31,000,000
Unamortized discount and debt issuance cost	$ 175,000	$ 236,000

XML

Consolidated Statements of Income - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Interest income
Loans, including fees		$ 26,000	$ 18,994	$ 73,837	$ 51,463
Investment securities:
Taxable		2,562	2,069	7,511	5,081
Tax-exempt		106	113	306	317
Dividends		44	11	112	30
Other		361	1,486	1,590	2,362
Total interest income		29,073	22,673	83,356	59,253
Interest expense
Deposits		8,740	1,807	20,954	3,879
Federal funds purchased and other short-term borrowings		377	13	852	35
Long-term debt and junior subordinated debt		215	133	617	441
Subordinated notes		369	369	1,107	1,107
Total interest expense		9,701	2,322	23,530	5,462
Net interest income		19,372	20,351	59,826	53,791
Provision for (recovery of) credit losses - loans	[1]	128	(567)	589	3,434
Provision for credit losses - unfunded commitments	[1]	123	0	323	0
Net interest income after provision for (recovery of) credit losses		19,121	20,918	58,914	50,357
Noninterest income
Trust and investment services fees		1,293	1,141	3,770	3,440
Income from mutual fund, annuity and insurance sales		315	283	1,007	958
Service charges on deposit accounts		1,598	1,395	4,624	4,045
Income from bank owned life insurance		396	322	1,047	941
Other income		549	528	1,998	1,479
Gain on sales of loans held for sale		42	42	48	621
(Loss) gain on sales of assets held for sale		0	(100)	118	(100)
Loss on sales of securities		0	0	(388)	0
Total noninterest income		4,193	3,611	12,224	11,384
Noninterest expense
Personnel		9,412	9,243	27,943	26,124
Occupancy of premises, net		853	943	2,711	2,844
Furniture and equipment		798	852	2,514	2,551
Professional and legal		549	367	1,395	2,281
Marketing		347	507	1,010	1,340
FDIC insurance		245	190	739	617
Debit card processing		546	455	1,456	1,222
Charitable donations		62	56	993	971
External data processing		974	981	3,027	2,820
Impaired loan carrying costs (recovery)		107	217	(229)	512
Other		2,003	1,511	4,624	4,939
Total noninterest expense		15,896	15,322	46,183	46,221
Income before income taxes		7,418	9,207	24,955	15,520
Provision for income taxes		1,501	2,053	5,435	3,360
Net income		$ 5,917	$ 7,154	$ 19,520	$ 12,160
Net income per share, basic		$ 0.62	$ 0.75	$ 2.03	$ 1.28
Net income per share, diluted		$ 0.61	$ 0.75	$ 2.03	$ 1.27

[1] Results of reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP.

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Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Consolidated Statements of Comprehensive Income (Loss) [Abstract]
Net income		$ 5,917	$ 7,154	$ 19,520	$ 12,160
Securities available for sale:
Net unrealized holding losses arising during the period (net of tax benefit)		(7,219)	(13,037)	(8,402)	(36,335)
Reclassification adjustment for losses included in net income (net of tax benefit of $91 and $0, respectively)	[1],[2]			297	0
Net unrealized losses		(7,219)	(13,037)	(8,105)	(36,335)
Comprehensive income (loss)		$ (1,302)	$ (5,883)	$ 11,415	$ (24,175)

[1] Amounts are included in net gain (loss) on sales of securities on the Consolidated Statements of Income within noninterest income.

[2] Income tax amounts are included in the provision (benefit) for income taxes on the Consolidated Statements of Income.

XML

Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Consolidated Statements of Comprehensive Income (Loss) [Abstract]
Net unrealized holding (losses) gains arising during the period, tax (benefit) expense	$ 2,218	$ 4,005	$ 2,581	$ 11,162
Reclassification adjustment for losses (gains) included in net income, tax (benefit) expense			$ 91	$ 0

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands		9 Months Ended
		Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities
Net income		$ 19,520	$ 12,160
Adjustments to reconcile net income to net cash provided by operations:
Depreciation/software amortization		1,764	1,879
Net amortization expense		(482)	(886)
Net change in operating lease liabilities		(478)	(483)
Provision for credit losses on off-balance sheet credit exposures	[1]	323	0
Provision for credit losses on loans	[1]	589	3,434
Writedown of assets held for sale		95	91
Deferred income tax expense		(667)	0
Increase in bank owned life insurance		(1,047)	(941)
Originations of loans held for sale		(3,447)	(16,633)
Proceeds from sales of loans held for sale		2,547	24,259
Gain on sales of loans held for sale		(48)	(621)
(Gain) loss on disposal of premises and equipment		(118)	9
Loss on sales of securities, available-for-sale		388	0
Stock-based compensation		995	737
Increase in interest receivable		(235)	(854)
Decrease in other assets		1,297	3,058
Increase in interest payable		967	419
(Decrease) increase in other liabilities		(4,239)	2,232
Net cash provided by operating activities		17,724	27,860
Cash flows from investing activities
Purchases of securities, available-for-sale		(30,474)	(170,715)
Maturities, repayments and calls of securities, available-for-sale		24,745	33,653
Sales of securities, available-for-sale		4,253	0
Purchase of restricted investment in bank stock		(6,677)	0
Redemption of restricted investment in bank stock		5,480	356
Net increase in loans made to customers		(71,409)	(71,657)
Proceeds from sale of commercial loans held for sale		1,336	0
Purchases of premises and equipment		(1,503)	(1,170)
Investment in bank owned life insurance		0	(7)
Proceeds from bank owned life insurance		275	0
Proceeds from sale of fixed assets		685	0
Net cash used in investing activities		(73,289)	(209,540)
Cash flows from financing activities
Net decrease in demand and savings deposits		(98,430)	(61,206)
Net increase (decrease) in time deposits		61,589	(68,552)
Net increase in short-term borrowings		27,494	2,490
Repayment of long-term debt		0	(10,000)
Net change in finance lease liabilities		(22)	(21)
Cash dividends paid to shareholders		(4,701)	(4,281)
Payment of taxes related to stock withheld		(146)	(78)
Treasury stock reissued		1,040	664
Treasury stock repurchased		0	(34)
Proceeds from issuance of stock, net		(391)	0
Net cash used in financing activities		(13,567)	(141,018)
Net decrease in cash and cash equivalents		(69,132)	(322,698)
Cash and cash equivalents at beginning of year		120,439	545,494
Cash and cash equivalents at end of period		$ 51,307	$ 222,796

[1] Results of reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP.

XML

Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Common Stock [Member] Cumulative Effect, Period of Adoption, Adjusted Balance [Member]	Common Stock [Member]	Additional Paid-In Capital [Member] Cumulative Effect, Period of Adoption, Adjusted Balance [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member] Cumulative Effect, Period of Adoption, Adjustment [Member]	Retained Earnings [Member] Cumulative Effect, Period of Adoption, Adjusted Balance [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member] Cumulative Effect, Period of Adoption, Adjusted Balance [Member]	Accumulated Other Comprehensive Loss [Member]	Treasury Common Stock [Member] Cumulative Effect, Period of Adoption, Adjusted Balance [Member]	Treasury Common Stock [Member]	Cumulative Effect, Period of Adoption, Adjustment [Member]	Cumulative Effect, Period of Adoption, Adjusted Balance [Member]	Total
Balance at Dec. 31, 2021		$ 24,708		$ 142,067			$ 37,769		$ (164)		$ (8,875)			$ 195,505
Net income							3,053							3,053
Other comprehensive loss, net of tax									(13,793)					(13,793)
Cash dividends							(1,421)							(1,421)
Stock-based compensation				289										289
Repurchased stock											(34)			(34)
Withheld stock											(70)			(70)
Issuance and reissuance of common stock:
Issuance of shares under the dividend reinvestment and stock purchase plan				20							126			146
Issuance of shares under the employee stock option plan				(15)							59			44
Issuance of shares under stock-based compensation awards				(952)							952			0
Balance at Mar. 31, 2022		24,708		141,409			39,401		(13,957)		(7,842)			183,719
Balance at Dec. 31, 2021		24,708		142,067			37,769		(164)		(8,875)			195,505
Net income														12,160
Balance at Sep. 30, 2022		24,709		141,929			45,648		(36,499)		(7,448)			168,339
Balance at Dec. 31, 2021		24,708		142,067			37,769		(164)		(8,875)			$ 195,505
Accounting Standards Update [Extensible Enumeration]														Accounting Standards Update201613 [Member]
Balance at Dec. 31, 2022	$ 24,709	24,709	$ 141,896	141,896	$ (2,149)	$ 49,997	52,146	$ (34,764)	(34,764)	$ (6,687)	(6,687)	$ (2,149)	$ 175,151	$ 177,300
Balance at Mar. 31, 2022		24,708		141,409			39,401		(13,957)		(7,842)			183,719
Net income							1,953							1,953
Other comprehensive loss, net of tax									(9,505)					(9,505)
Cash dividends							(1,428)							(1,428)
Stock-based compensation				208										208
Forfeiture of restricted stock and withheld shares				91							(91)			0
Issuance and reissuance of common stock:
Issuance of shares under the dividend reinvestment and stock purchase plan				22							120			142
Issuance of shares under the employee stock option plan				(48)							109			61
Issuance of shares under employee stock purchase plan				(4)							136			132
Balance at Jun. 30, 2022		24,708		141,678			39,926		(23,462)		(7,568)			175,282
Net income							7,154							7,154
Other comprehensive loss, net of tax									(13,037)					(13,037)
Cash dividends							(1,432)							(1,432)
Stock-based compensation				240										240
Withheld stock											(8)			(8)
Issuance and reissuance of common stock:
Issuance of shares under the dividend reinvestment and stock purchase plan				12							128			140
Issuance of shares under the employee stock option plan		1		(1)										0
Balance at Sep. 30, 2022		24,709		141,929			45,648		(36,499)		(7,448)			168,339
Balance at Dec. 31, 2022	24,709	24,709	141,896	141,896	(2,149)	49,997	52,146	(34,764)	(34,764)	(6,687)	(6,687)	(2,149)	175,151	177,300
Net income							6,992							6,992
Other comprehensive loss, net of tax									3,823					3,823
Cash dividends							(1,533)							(1,533)
Stock-based compensation				454										454
Forfeiture of restricted stock and withheld shares				25							(164)			(139)
Issuance and reissuance of common stock:
Issuance of shares under the dividend reinvestment and stock purchase plan				15							137			152
Issuance of shares under the employee stock option plan				(25)							71			46
Issuance of shares under stock-based compensation awards				(267)							267			0
Balance at Mar. 31, 2023		24,709		142,098			55,456		(30,941)		(6,376)			184,946
Balance at Dec. 31, 2022	$ 24,709	24,709	$ 141,896	141,896	$ (2,149)	$ 49,997	52,146	$ (34,764)	(34,764)	$ (6,687)	(6,687)	$ (2,149)	$ 175,151	177,300
Net income														19,520
Balance at Sep. 30, 2023		24,709		142,525			64,816		(42,869)		(5,818)			183,363
Balance at Mar. 31, 2023		24,709		142,098			55,456		(30,941)		(6,376)			184,946
Net income							6,611							6,611
Other comprehensive loss, net of tax									(4,709)					(4,709)
Cash dividends							(1,535)							(1,535)
Stock-based compensation				276										276
Issuance and reissuance of common stock:
Issuance of shares under the dividend reinvestment and stock purchase plan				(55)							204			149
Issuance of shares under employee stock purchase plan				(47)							178			131
Balance at Jun. 30, 2023		24,709		142,272			60,532		(35,650)		(5,994)			185,869
Net income							5,917							5,917
Other comprehensive loss, net of tax									(7,219)					(7,219)
Cash dividends							(1,633)							(1,633)
Stock-based compensation				265										265
Withheld stock											(7)			(7)
Issuance and reissuance of common stock:
Issuance of shares under the dividend reinvestment and stock purchase plan				(6)							165			159
Issuance of shares under the employee stock option plan				(6)							18			12
Balance at Sep. 30, 2023		$ 24,709		$ 142,525			$ 64,816		$ (42,869)		$ (5,818)			$ 183,363

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Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022
Consolidated Statements of Changes in Shareholders' Equity [Abstract]
Cash dividends, per share	$ 0.17	$ 0.16	$ 0.16	$ 0.15	$ 0.15	$ 0.15
Repurchased stock, shares						1,535
Forfeiture of restricted stock and withheld shares, shares	358		8,039	375	6,659	3,177
Issuance and reissuance of common stock:
Shares under the dividend reinvestment and stock purchase plan	7,297	9,021	6,079	6,751	6,348	6,734
Shares under the stock option plan	805		3,131		5,769	3,137
Shares under employee stock purchase plan		7,871			7,223
Shares of stock-based compensation awards			11,816	473		50,559

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 1—Summary of Significant Accounting Policies

Nature of Operations and Basis of Presentation

The accompanying consolidated balance sheet at December 31, 2022 has been derived from audited financial statements, and the unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, the instructions to Form 10-Q, and Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 270. Accordingly, the interim financial statements do not include all of the financial information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the interim consolidated financial statements include all adjustments necessary to present fairly the financial condition and results of operations for the reported periods, and all such adjustments are of a normal and recurring nature.

Codorus Valley Bancorp, Inc. (“Corporation” or “Codorus Valley”) is a bank holding company headquartered in York, Pennsylvania that provides a full range of banking services through its subsidiary, PeoplesBank, A Codorus Valley Company (“PeoplesBank” or “Bank”). As of September 30, 2023, PeoplesBank operates one wholly-owned subsidiary, Codorus Valley Financial Advisors, Inc. d/b/a PeoplesWealth Advisors, which sells nondeposit investment products. In addition, PeoplesBank may periodically create nonbank subsidiaries for the purpose of temporarily holding foreclosed properties pending the liquidation of these properties. PeoplesBank operates under a state charter and is subject to regulation by the Pennsylvania Department of Banking and Securities, and the Federal Deposit Insurance Corporation. The Corporation is subject to regulation by the Board of Governors of the Federal Reserve System and the Pennsylvania Department of Banking and Securities.

The consolidated financial statements include the accounts of Codorus Valley and its wholly-owned bank subsidiary, PeoplesBank, and a wholly-owned nonbank subsidiary, SYC Realty Company, Inc. SYC Realty was inactive during the period ended September 30, 2023. The accounts of CVB Statutory Trust No. I and No. II are not included in the consolidated financial statements as discussed in Note 6—Short-Term Borrowings and Long-Term Debt. All significant intercompany account balances and transactions have been eliminated in consolidation. The accounting and reporting policies of Codorus Valley and subsidiaries conform to accounting principles generally accepted in the United States of America and have been followed on a consistent basis.

These consolidated statements should be read in conjunction with the notes to the audited consolidated financial statements contained in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022.

The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year.

In accordance with FASB ASC 855, the Corporation evaluated the events and transactions that occurred after the balance sheet date of September 30, 2023 and through the date these consolidated financial statements were issued, for items of potential recognition or disclosure.

Allowance for Credit Losses—Available-for-Sale Securities

For available-for-sale debt securities in an unrealized loss position, the Corporation first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities available-for-sale that do not meet the aforementioned criteria, the Corporation evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit loss is recognized in other comprehensive income.

Changes in the allowance for credit losses are recorded as provision for credit loss expense (or reversal). Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable on available-for-sale debt securities, which totaled $1.6 million as of September 30, 2023, is excluded from the estimate of credit losses.

Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost, net of the allowance for credit losses. Amortized cost is the principal balance outstanding, net of deferred loan fees and costs. Accrued interest receivable totaled $5.3 million at September 30, 2023 and was reported in other assets on the consolidated balance sheets and is excluded from the estimate of credit losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. The loans receivable portfolio is disaggregated into segments. The segments include commercial,

commercial real estate – construction, commercial real estate – owner occupied, commercial real estate – non-owner occupied, residential real estate – construction, residential real estate – revolving, residential real estate – multi family, residential real estate - other, and consumer loans.

Interest income on mortgage and commercial loans is discontinued and placed on nonaccrual status at the time the loan is 90 days delinquent unless the loan is well secured and in process of collection. Mortgage loans are charged off at 180 days past due, and commercial loans are charged off to the extent principal or interest is deemed uncollectible. Consumer loans continue to accrue interest until they are charged off no later than 120 days past due unless the loan is in the process of collection. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Under the cash-basis method, interest income is recorded when the payment is received in cash. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

As disclosed in Note 4—Loans and Allowance for Credit Losses, the Corporation engages in commercial and consumer lending. Loans are made within the Corporation’s primary market area and surrounding areas, and include the purchase of whole loan or participation interests in loans from other financial institutions. Commercial loans, which pose the greatest risk of loss to the Corporation, whether originated or purchased, are generally secured by real estate.

Allowance for credit losses – loans

The allowance for credit losses (“ACL”) is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

Management estimates the allowance balance using relevant available information from both internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors. These adjustments are commonly known as the Qualitative Framework.

In addition to the estimated quantitative credit loss for loans evaluated collectively, qualitative factors that may not be fully captured in the quantitative results are also evaluated. These include changes in lending policy, the nature and volume of the portfolio, overall business conditions in the economy, credit concentrations, competition, model imprecision, and legal and regulatory requirements. Qualitative adjustments are judgmental and are based on management’s knowledge of the portfolio and the markets in which the Corporation operates. Qualitative adjustments are evaluated and approved on a quarterly basis. Additionally, the ACL includes other allowance categories that are not directly incorporated in the quantitative results including loans in process.

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. Loans evaluated collectively for expected credit losses include loans on accrual status and loans initially evaluated individually but determined to not to have enhanced credit risk characteristics. The Corporation has identified the following portfolio segments:

Commercial loans

Commercial real estate – construction

Commercial real estate – owner occupied

Commercial real estate – non-owner occupied

Residential real estate – construction

Residential real estate – revolving

Residential real estate – multi family

Residential real estate – other

Consumer loans

The Corporation measures the allowance for credit losses using the following methods.

• Loans are aggregated into pools based on similar risk characteristics.

• The Probability of Default (PD) and Loss Given Default (LGD) CECL model components are determined based on loss estimates driven by historical experience at the input level.

• The PD model component uses "through the economic cycle transition" matrices based on the Corporation’s and peer group historical loan and transaction data across each pool of loans.

• The LGD model component calculates a lifetime estimate across each pool of loans utilizing a nonparametric loss curve modeling approach.

• Reasonable and supportable forecasts are incorporated into the PD model component that are based on different economic forecasts and scenarios sourced from external parties. A future loss forecast over the reasonable and supportable forecast period of one year is based on the projected performance of specific economic variables that statistically correlate with the PD and LGD pools. After the reasonable and supportable forecast period, credit loss estimates revert over four quarters to input-level.

• Cash flow assumptions are established for each loan using maturity date, amortization schedule and interest rate.

• A constant prepayment rate is calculated for each loan pool in the CECL model.

Loans that do not share similar risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation. When management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.

Loans are modified if the Corporation grants borrowers experiencing financial difficulties concessions that it would not otherwise consider. Concessions granted under a modification may involve a reduction of the interest rate, forgiveness of principal, extension of the term of the loan, and/or other-than-insignificant payment delays.

Allowance for credit losses – off-balance sheet credit exposures

Effective January 1, 2023, the Corporation adopted ASC 326, at which time the Corporation estimated expected credit losses over the contractual period in which the Corporation is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Corporation. The allowance represents management’s estimate of expected losses in unfunded loan commitments and other noncancellable off-balance sheet credit exposures, such as letters of credit. The ACL specific to unfunded commitments is determined by estimating future draws and applying the expected loss rates on those draws. Future draws are based on historical averages of utilization rates, i.e., the likelihood of draws taken. Adjustments to the reserve for unfunded off-balance sheet credit exposures are recorded in provision for credit losses - unfunded off-balance sheet credit exposures in the Consolidated Statements of Income.

Loan-Level Interest Rate Swaps

PeoplesBank enters into loan-level interest rate swaps (“swaps”) to facilitate certain client transactions and to meet their financing needs.  These swaps qualify as derivatives, but are not designated as hedging instruments, which would be accounted for using hedge accounting.   A loan-level interest rate swap is a contract in which the series of interest rate flows (fixed and variable) are exchanged over the term of a loan with certain qualifying commercial loan clients, and PeoplesBank simultaneously enters into an interest rate swap with a dealer counterparty with identical notional amounts and terms. The net result of these swaps is that the client pays a fixed interest rate and PeoplesBank receives a floating interest rate.  The swap positions with clients are equally offset with the dealer counterparties to minimize the potential impact on PeoplesBank’s financial statements.

Pursuant to agreements with the dealer counterparties, PeoplesBank may receive collateral or may be required to post collateral based upon mark-to-market positions. Beyond unsecured threshold levels, collateral in the form of cash or securities may be made available to counterparties of interest rate swap transactions. Based upon the current positions and related future collateral requirements relating to them, PeoplesBank believes any effect on its cash flow or liquidity position to be immaterial.

Derivatives contain an element of credit risk, including the possibility that PeoplesBank will incur a loss because a party to the agreements, which may be a dealer counterparty or a client, fails to meet its contractual obligations. Derivative contracts may only be executed with dealer counterparties as approved by the Board of Directors.  Similarly, derivatives with clients may only be executed with clients within credit exposure limits approved by the Board of Directors.

Interest rate swaps, recorded at fair value, are included in other assets on the Consolidated Balance Sheets. Additional information is provided in Note 14 – Interest Rate Swaps.

Bank Premises and Equipment Held for Sale

Bank premises and equipment designated as held for sale are carried at the lower of cost or fair value, and, at September 30, 2023 consisted of a banking property totaling $1,269,000 and is included in other assets on the Consolidated Balance Sheets. The balance of $567,000 at December 31, 2022 consisted of one retail banking property, which closed in the second quarter of 2022.

Foreclosed Real Estate

Foreclosed real estate, included in other assets, is comprised of property acquired through a foreclosure proceeding or property that is acquired through in-substance foreclosure. Foreclosed real estate is initially recorded at fair value minus estimated costs to sell at the date of foreclosure, establishing a new cost basis. Any difference between the carrying value and the new cost basis is charged against the allowance for credit losses. Appraisals, obtained from an independent third party, are generally used to determine fair value. After

foreclosure, management reviews valuations at least quarterly and adjusts the asset to the lower of cost or fair value minus estimated costs to sell through a valuation allowance or a write-down. Costs related to the improvement of foreclosed real estate are generally capitalized until the real estate reaches a saleable condition subject to fair value limitations. Revenue and expense from operations and changes in the valuation allowance are included in noninterest expense. When a foreclosed real estate asset is ultimately sold, any gain or loss on the sale is included in the income statement as a component of noninterest income or expense. At September 30, 2023 there was $383,000 of foreclosed commercial real estate compared to $479,000 at December 31, 2022. As of September 30, 2023, there was $219,000 consumer mortgage loans secured by residential real estate properties, for which formal foreclosure proceedings were in process according to local requirements of the applicable jurisdiction, compared to $124,000 as of December 31, 2022.

Mortgage Servicing Rights

Mortgage servicing rights (MSRs) associated with sold loans are included in other assets on the consolidated balance sheets at an amount equal to the estimated fair value of the contractual rights to service the mortgage loans. The MSR asset is amortized as a reduction to servicing income. The MSR asset is evaluated periodically for impairment and carried at the lower of amortized cost or fair value. An independent third party firm calculates fair value by discounting the estimated cash flows from servicing income using a rate consistent with the risk associated with these assets and an estimate of future net servicing income of the underlying loans. In the event that the amortized cost of the MSR asset exceeds the fair value of the asset, a valuation allowance would be established through a charge against servicing income. Subsequent fair value evaluations may determine that impairment has been reduced or eliminated, in which case the valuation allowance would be reduced through a credit to earnings. At September 30, 2023, the balance of residential mortgage loans serviced for third parties was $52,129,000 compared to $55,708,000 at December 31, 2022.

		Three months ended				Nine months ended
		September 30,				September 30,
(dollars in thousands)		2023		2022		2023		2022
Amortized cost:
Balance at beginning of period	$	248	$	315	$	279	$	380
Originations of mortgage servicing rights		0		0		0		6
Amortization expense		(10)		(20)		(41)		(91)
Balance at end of period	$	238	$	295	$	238	$	295

Goodwill and Core Deposit Intangible Assets

Goodwill arising from acquisitions is not amortized, but is subject to an annual impairment test. This test consists of a qualitative analysis. If the Corporation determines events or circumstances indicate that it is more likely than not that goodwill is impaired, a quantitative analysis must be completed. Analyses may also be performed between annual tests. Significant judgment is applied when goodwill is assessed for impairment. This judgment includes developing cash flow projections, selecting appropriate discount rates, identifying relevant market comparables, incorporating general economic and market conditions, and selecting an appropriate control premium. The Corporation completes its annual goodwill impairment test on October 1st of each year. Based upon a qualitative analysis of goodwill, the Corporation concluded that the amount of recorded goodwill was not impaired as of October 1, 2023. There were no conditions or events that would trigger an analysis or impairment since October 1, 2023.

Core deposit intangibles represent the value assigned to demand, interest checking, money market, and savings accounts acquired as part of an acquisition. The core deposit intangible value represents the future economic benefit of potential cost savings from acquiring core deposits as part of an acquisition compared to the cost of alternative funding sources and the alternative cost to grow a similar core deposit base. The core deposit intangible asset resulting from the merger with Madison Bancorp, Inc. was determined to have a definite life and is being amortized using the sum of the years’ digits method over ten years. All intangible assets must be evaluated for impairment if certain events or changes in circumstances occur. Any impairment write-downs would be recognized as expense on the consolidated statements of income. The core deposit intangible asset is included in other assets on the Consolidated Balance Sheets

Revenue from Contracts with Customers

Revenue from contracts with customers that are required to be recognized under FASB ASC Topic 606 - Revenue from Contracts with Customers (ASC 606) is measured based on consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. The Corporation recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer.

The majority of the Corporation’s revenue-generating transactions are not within the scope of ASC 606, including revenue generated from financial instruments, such as our loans, letters of credit, derivatives and investment securities, as well as revenue related to our mortgage servicing activities, as these activities are subject to other U.S. Generally Accepted Accounting Principles (GAAP) discussed elsewhere within our disclosures. Descriptions of our revenue-generating activities that are within the scope of ASC 606, which are presented in our consolidated statements of income as components of non-interest income are as follows:

Trust and investment service fees: The Corporation provides trust, investment management custody and irrevocable life insurance trust services to clients. Such services are rendered in accordance with the underlying contracts for which fees are earned. The Corporation’s performance obligations are generally satisfied, and the related revenue recognized, over the period in which the service is provided. Payment for services rendered is primarily received in the following month.

Income from mutual fund, annuity and insurance sales: The Corporation sells mutual funds, annuity and insurance products to its clients. The Corporation’s performance obligation is met upon the signing of the product agreement and, in certain cases, a time component may exist when the client has the right to rescind the agreement with or without penalty. The Corporation recognizes revenues upon delivery of the product or service unless there is a time component in which case revenues are recognized utilizing the expected value method. Payment for services rendered is primarily received in the following month.

Service charges on deposits accounts: These represent general service fees for monthly account maintenance and activity- or transaction based fees and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Other service charges include revenue from processing wire transfers, cashier’s checks and other services. Revenue is recognized when the performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to the clients’ accounts.

Other noninterest income: The Corporation evaluated individual components of other noninterest income, such as credit card merchant fees, credit and gift card fees and ATM fees. Debit card income is primarily comprised of interchange fees earned whenever the Corporation’s debit cards are processed through payment networks, such as Visa. Credit and gift card income is realized through a third party provider who issues cards as private label in the Corporation’s name. ATM fees are primarily generated when a non-Corporation cardholder uses a Corporation ATM. The income is primarily comprised as a percentage of interchange fees earned whenever the issuer’s card is processed through card payment networks, such as Visa or Pulse. Merchant services income is realized through a referral agreement with a third party service provider. Amounts paid to the Corporation under the agreement are from fees charged to merchants for processing their debit card transactions. The Corporation’s performance obligation for these fees are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received within a one to three day lag or in the following month.

Per Share Data

The computation of net income per share is provided in the table below.

	Three months ended				Nine months ended
	September 30,				September 30,
(in thousands, except per share data)	2023		2022		2023		2022
Net income	$	5,917	$	7,154	$	19,520	$	12,160
Weighted average shares outstanding (basic)		9,616		9,545		9,600		9,521
Effect of dilutive stock options		15		23		18		29
Weighted average shares outstanding (diluted)		9,631		9,568		9,618		9,550
Basic earnings per share	$	0.62	$	0.75	$	2.03	$	1.28
Diluted earnings per share	$	0.61	$	0.75	$	2.03	$	1.27

Comprehensive Income

Accounting principles generally accepted in the United States require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the shareholders’ equity section of the balance sheet, such items, along with net income, are components of comprehensive income.

Cash Flow Information

For purposes of the consolidated statements of cash flows, the Corporation considers interest bearing deposits with banks, cash and due from banks, and federal funds sold to be cash and cash equivalents.

Supplemental cash flow information is provided in the table below.

		Nine months ended
		September 30,
(dollars in thousands)		2023		2022
Cash paid during the period for:
Income taxes	$	7,630	$	531
Interest	$	22,563	$	5,044
Noncash investing and financing activities:
Transfer of loans to foreclosed real estate	$	0	$	479
Transfer of loans to held for sale	$	2,018	$	16,617
Transfer of premises and equipment to assets held for sale	$	1,269	$	109
Initial recognition of operating lease right-of-use assets	$	0	$	2,061
Initial recognition of operating lease liabilities	$	0	$	2,061

Recent Accounting Pronouncements

Pronouncements Adopted in 2023

On January 1, 2023, the Corporation adopted ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with Topic 842 on leases. In addition, ASC 326 made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities management does not intend to sell or believes that it is more likely than not they will be required to sell. The Corporation adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and off-balance-sheet (OBS) credit exposures. Results for reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Corporation recorded a net decrease to retained earnings of $2.1 million as of January 1, 2023 for the cumulative effect of adopting ASC 326. The transition adjustment included a $927,000 increase to ACL for loans, a $1.9 million increase in the ACL for unfunded commitments and a $667,000 increase in deferred tax assets.

At adoption, the Corporation changed the way the loan portfolio is segmented and now segments the portfolio based on collateral. Previously the Corporation segmented the loan portfolio based on industry.

The following table illustrates the impact of ASC 326.

			January 1, 2023
					Reclassification to CECL		Post-CECL Adoption
(dollars in thousands)			Pre-CECL Adoption		Portfolio Segmentation		Portfolio Segmentation
Loans:
	Builder & developer	$	128,327	$	(128,327)	$	0
	Commercial real estate investor		367,366		(367,366)		0
	Commercial real estate-construction		0		144,782		144,782
	Commercial real estate-owner occupied		0		344,941		344,941
	Commercial real estate-non-owner occupied		0		445,408		445,408
	Residential real estate investor		263,262		(263,262)		0
	Residential real estate-construction		0		26,055		26,055
	Residential real estate-revolving		0		103,509		103,509
	Residential real estate-multi family		0		118,141		118,141
	Residential real estate-other		0		243,092		243,092
	Commercial		0		191,665		191,665
	Hotel/Motel		94,471		(94,471)		0
	Wholesale & retail		60,672		(60,672)		0
	Manufacturing		86,593		(86,593)		0
	Agriculture		91,449		(91,449)		0
	Service		73,094		(73,094)		0
	Commercial other		209,116		(209,116)		0
	Consumer		0		15,264		15,264
	Residential mortgage		135,340		(135,340)		0
	Home equity		98,030		(98,030)		0
	Consumer other		25,137		(25,137)		0
	Total	$	1,632,857	$	0	$	1,632,857

In March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings (TDRs), while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. ASU 2022-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. ASU 2022-02 did not have a material impact on the Corporation’s consolidated financial statements.

 

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Securities

9 Months Ended

Sep. 30, 2023

Securities [Abstract]

Securities

Note 2 – Securities

A summary of securities available-for-sale at September 30, 2023 and December 31, 2022 is provided below. The securities available-for-sale portfolio is generally comprised of high quality debt instruments, principally obligations of the United States government or agencies thereof, investments in the obligations of states and municipalities and selected corporate securities, including subordinated debt. At September 30, 2023 and December 31, 2022, there were no holdings of securities of any one issuer, other than the US Government and its agencies, in an amount greater than 10% of shareholders’ equity.

	Amortized			Allowance for	Gross Unrealized				Fair
(dollars in thousands)	Cost			Credit Losses	Gains		Losses		Value
September 30, 2023
Debt securities:
U.S. Treasury notes	$	19,804	$	0	$	0	$	(595)	$	19,209
U.S. agency		13,951		0		0		(1,518)		12,433
U.S. agency mortgage-backed, residential		284,345		0		4		(40,770)		243,579
State and municipal		35,399		0		3		(7,336)		28,066
Corporates		38,195		0		0		(5,826)		32,369
Total debt securities	$	391,694	$	0	$	7	$	(56,045)	$	335,656

	Amortized		Gross Unrealized				Fair
(dollars in thousands)	Cost		Gains		Losses		Value
December 31, 2022
Debt securities:
U.S. Treasury notes	$	19,688	$	0	$	(588)	$	19,100
U.S. agency		12,750		0		(1,470)		11,280
U.S. agency mortgage-backed, residential		283,436		43		(33,377)		250,102
State and municipal		35,517		37		(6,155)		29,399
Corporates		39,531		0		(3,955)		35,576
Total debt securities	$	390,922	$	80	$	(45,545)	$	345,457

The proceeds from sales of securities and the associated gains and losses are listed below. Realized gains and losses are computed on the basis of specific identification of the adjusted cost of each security and are shown net as a separate line item in the income statement.

	Three months ended				Nine months ended
	September 30,				September 30,
(dollars in thousands)	2023		2022		2023		2022
Proceeds	$	0	$	0	$	4,253	$	0
Gross gains		0		0		0		0
Gross losses		0		0		(388)		0
Tax benefit		0		0		91		0

The amortized cost and estimated fair value of debt securities at September 30, 2023 by contractual maturity are shown below. Actual maturities may differ from contractual maturities if call options on select debt issues are exercised in the future. Mortgage-backed securities are included in the maturity categories based on average expected life.

	Available-for-sale
	Amortized		Fair
(dollars in thousands)	Cost		Value
Due in one year or less	$	9,908	$	9,698
Due after one year through five years		112,944		103,561
Due after five years through ten years		230,190		191,357
Due after ten years		38,652		31,040
Total debt securities	$	391,694	$	335,656

Investment securities having a carrying value of $227,602,000 and $204,887,000 on September 30, 2023 and December 31, 2022, respectively, were pledged to secure public and trust deposits, repurchase agreements and other short-term borrowings.

The table below shows gross unrealized losses and fair value, aggregated by investment category and length of time, for securities that have been in a continuous unrealized loss position, for which an allowance for credit losses has not been recorded, at September 30, 2023 and December 31, 2022.

	Less than 12 months					12 months or more					Total
	Number of	Fair		Unrealized		Number of	Fair		Unrealized		Number of	Fair		Unrealized
(dollars in thousands)	Securities	Value		Losses		Securities	Value		Losses		Securities	Value		Losses
September 30, 2023
Debt securities:
U.S. Treasury notes	0	$	0	$	0	4	$	19,209	$	(595)	4	$	19,209	$	(595)
U.S. agency	3		1,913		(38)	9		10,520		(1,480)	12		12,433		(1,518)
U.S. agency mortgage-backed, residential	39		31,338		(1,065)	206		205,626		(39,705)	245		236,964		(40,770)
State and municipal	7		2,608		(215)	33		24,065		(7,121)	40		26,673		(7,336)
Corporates	2		1,169		(40)	30		29,699		(5,786)	32		30,868		(5,826)
Total temporarily impaired debt
securities, available-for-sale	51	$	37,028	$	(1,358)	282	$	289,119	$	(54,687)	333	$	326,147	$	(56,045)
December 31, 2022
Debt securities:
U.S. Treasury notes	4	$	19,100	$	(588)	0	$	0	$	0	4	$	19,100	$	(588)
U.S. agency	7	$	7,594	$	(656)	3	$	3,685	$	(814)	10	$	11,279	$	(1,470)
U.S. agency mortgage-backed, residential	147		140,409		(11,071)	72		102,061		(22,284)	219		242,470		(33,355)
State and municipal	6		2,334		(210)	35		25,121		(5,945)	41		27,455		(6,155)
Corporates	11		11,610		(831)	20		20,665		(3,124)	31		32,275		(3,955)
Total temporarily impaired debt
securities, available-for-sale	175	$	181,047	$	(13,356)	130	$	151,532	$	(32,167)	305	$	332,579	$	(45,523)

Securities available-for-sale are analyzed quarterly for impairment. The analysis considers, among other factors: 1) whether the Corporation has the intent to sell its securities prior to market recovery or maturity; 2) whether it is more likely than not that the Corporation will be required to sell its securities prior to market recovery or maturity; 3) default rates/history by security type; 4) third-party securities ratings; 5) third-party guarantees; 6) subordination; 7) payment delinquencies; 8) nature of the issuer; and 9) current financial news.

As of September 30, 2023, the Corporation’s security portfolio consisted of 344 securities, 333 of which were in an unrealized loss position. Through September 30, 2023 the Corporation has collected all interest and principal on its investment securities as scheduled. The majority of the unrealized losses are related to the Corporation’s mortgage-backed securities, as discussed below:

Mortgage-Backed Securities

At September 30, 2023, 100% of the mortgage-backed securities held by the Corporation were issued by U.S. government-sponsored entities and agencies. The decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Corporation does not have the intent to sell these mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Corporation does not consider these securities to have credit impairment at September 30, 2023.

 

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Restricted Investment in Bank Stocks

9 Months Ended

Sep. 30, 2023

Restricted Investment in Bank Stocks [Abstract]

Restricted Investment in Bank Stocks

Note 3—Restricted Investment in Bank Stocks

Restricted stock, which represents required investments in the common stock of correspondent banks, is carried at cost and, as of September 30, 2023 and December 31, 2022, consisted primarily of the common stock of the Federal Home Loan Bank of Pittsburgh (“FHLBP”) and, to a lesser degree, Atlantic Community Bancshares, Inc. (“ACBI”), the parent company of Atlantic Community Bankers Bank (“ACBB”). Under the FHLBP’s Capital Plan, member banks, including PeoplesBank, are required to maintain a minimum stock investment. The FHLBP uses a formula to determine the minimum stock investment, which is based on the volume of loans outstanding, unused borrowing capacity and other factors.

The FHLBP paid dividends during the periods ended September 30, 2023 and 2022. The FHLBP restricts the repurchase of the excess capital stock of member banks. The amount of excess capital stock that can be repurchased from any member is currently the lesser of five percent of the member’s total capital stock outstanding or its excess capital stock outstanding.

Management evaluates the restricted stock for impairment in accordance with FASB ASC Topic 942. Management’s determination of whether these investments are impaired is based on their assessment of the ultimate recoverability of the cost rather than by recognizing temporary declines in value. Using the FHLBP as an example, the determination of whether a decline affects the ultimate recoverability of cost is influenced by criteria such as: (1) the significance of the decline in net assets of the FHLBP as compared to the capital stock amount for the FHLBP; (2) commitments by the FHLBP to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLBP; and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the FHLBP. Management believes no impairment charge was necessary related to the restricted stock during the periods ended September 30, 2023 and 2022.

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Loans and Allowance for Credit Losses

9 Months Ended

Sep. 30, 2023

Loans and Allowance for Credit Losses [Abstract]

Loans and Allowance for Credit Losses

Note 4—Loans and Allowance for Credit Losses

On January 1, 2023, the Corporation adopted ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. This change replaced the incurred loss model with a lifetime expected credit loss model.

At adoption, the Corporation changed the way the loan portfolio is segmented and now segments the portfolio based on collateral using federal call code targeting similar risk characteristics. Previously the Corporation segmented the loan portfolio based on industry. Management selected national civilian unemployment rates, housing price index and real gross domestic product (GDP) as the drivers of the quantitative portion of the collectively evaluated reserves. These third party supplied economic driver forecasts are updated within the model quarterly to calculate expected life and related loan default rates.

Loans that do not share similar risk characteristics are evaluated on an individual basis and are excluded from the quantitative calculations for the ACL. Loans that are individually evaluated under CECL will include loans in nonaccrual status and may include accruing loans that do not share similar risk characteristics within the evaluation. All individually evaluated loans in the current period were in nonaccrual status.

The ACL also includes a qualitative adjustment for risk factors that are not considered within the quantitative component or where the Company’s risk factors differ from the utilized peer data. Management may consider additional or reduced reserves to be warranted based on current and expected conditions. During the current quarter factors that were considered relevant by management in determining expected credit losses beyond the qualitative assessment include changes in:

Differences in lending policies, procedures, underwriting standards, charge off and recovery practices;

Changes in the nature and volume of the portfolio and terms of loans;

Changes in the experience, depth, and ability of lending management;

Delinquency trends;

Quality of the loan review system;

Value of underlying collateral;

Existence and effect of concentrations of credit and changes in the levels of such concentrations; and

The effect of other external factors including legal, competition, local economic and their impact on credit losses.

The qualitative adjustments and projected impact are reviewed and considered by the Corporation’s Chief Credit Officer in discussion with the appropriate finance and executive personnel. During the quarter ending September 30, 2023, the quantitative allowance was positively impacted by forecasted improvements in the macroeconomic conditions such as national civilian unemployment rates and GDP. While these changes project an improvement in credit conditions, a decrease was experienced in commercial real estate prices. This resulted in a decision to increase the qualitative loss risk related to changes in national, regional and local conditions along with changes in the value of underlying collateral for commercial real estate loans. This increased risk will continue to be monitored and would expect to remain until forecasts for the unemployment rate and GDP again align with projections for commercial real estate pricing. While other areas of risk beyond the quantitative risk have been identified within the model, no additional changes were considered warranted in the allocated reserve ratios within the current quarter.

Loan Portfolio Composition

The table below provides the composition of the loan portfolio at September 30, 2023. The portfolio is comprised of nine segments, commercial, commercial real estate construction, commercial real estate owner occupied, commercial real estate non-owner occupied, residential real estate construction, residential real estate revolving, residential real estate multi family, residential real estate other and consumer as presented in the table below. Certain portfolio segments are further disaggregated for the purpose of estimating credit losses. The Corporation has not engaged in sub-prime residential mortgage originations.

	September 30,		% Total
(dollars in thousands)	2023		Loans
Commercial loans	$	171,490		10.1
Commercial real estate:
Construction		184,960		10.9
Owner occupied		347,857		20.4
Non-owner occupied		455,584		26.7
Residential real estate:
Construction		29,132		1.7
Revolving		105,169		6.2
Multi family		123,465		7.2
Other		273,170		16.0
Consumer		13,553		0.8
Gross Loans		1,704,380		100.0
Less: Allowance for credit losses		21,449
Net Loans	$	1,682,931

The table below provides the composition of the loan portfolio at December 31, 2022. The portfolio is comprised of two segments, commercial and consumer loans. The commercial loan segment is disaggregated by industry class which allows the Corporation to monitor risk and performance.

Those industries representing the largest dollar investment and most risk are listed separately. The “Other” commercial loans category is comprised of various industries. The consumer related segment is comprised of residential mortgages, home equity and other consumer loans.

	December 31,		% Total
(dollars in thousands)	2022		Loans
Builder & developer	$	128,327		7.9
Commercial real estate investor		367,366		22.5
Residential real estate investor		263,262		16.1
Hotel/Motel		94,471		5.8
Wholesale & retail		60,672		3.7
Manufacturing		86,593		5.3
Agriculture		91,449		5.6
Service		73,094		4.5
Other		209,116		12.8
Total commercial related loans		1,374,350		84.2
Residential mortgages		135,340		8.3
Home equity		98,030		6.0
Other		25,137		1.5
Total consumer related loans		258,507		15.8
Total loans	$	1,632,857		100.0

Management estimates the allowance balance using relevant available information from both internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors. These adjustments are commonly known as the Qualitative Framework.

In addition to the estimated quantitative credit loss for loans evaluated collectively, qualitative factors that may not be fully captured in the quantitative results are also evaluated. These include changes in lending policy, the nature and volume of the portfolio, overall

business conditions in the economy, credit concentrations, competition, model imprecision, and legal and regulatory requirements. Qualitative adjustments are judgmental and are based on management’s knowledge of the portfolio and the markets in which the Corporation operates. Qualitative adjustments are evaluated and approved on a quarterly basis. Additionally, the ACL includes other allowance categories that are not directly incorporated in the quantitative results including loans in process.

The following tables presents the activity in the allowance for credit losses by segment as of and for the three and nine months ended September 30, 2023.

(dollars in thousands)		Balance, July 1, 2023		Provision for credit losses		Loan charge-offs		Loan recoveries		Balance, September 30, 2023
Commercial loans	$	3,041	$	(614)	$	(190)	$	768	$	3,005
Commercial real estate:
Construction		3,542		451		0		0		3,993
Owner occupied		3,877		236		0		1		4,114
Non-owner occupied		6,125		36		0		0		6,161
Residential real estate:
Construction		93		(5)		0		0		88
Revolving		476		5		0		1		482
Multi family		1,907		75		0		0		1,982
Other		1,448		(43)		0		51		1,456
Consumer		172		(13)		(3)		12		168
Total	$	20,681	$	128	$	(193)	$	833	$	21,449

(dollars in thousands)		Balance, January 1, 2023 - Pre ASC 326 Adoption		Impact of adopting ASC 326		Provision for credit losses		Loan charge-offs		Loan recoveries		Balance, September 30, 2023
Commercial loans	$	4,783	$	(235)	$	(1,212)	$	(1,248)	$	917	$	3,005
Commercial real estate:
Construction		1,829		1,121		1,043		0		0		3,993
Owner occupied		4,341		(69)		484		(683)		41		4,114
Non-owner occupied		6,387		(468)		242		0		0		6,161
Residential real estate:
Construction		230		(144)		2		0		0		88
Revolving		417		192		(234)		(27)		134		482
Multi family		1,205		194		583		0		0		1,982
Other		1,511		169		(293)		0		69		1,456
Consumer		33		167		(26)		(27)		21		168
Total	$	20,736	$	927	$	589	$	(1,985)	$	1,182	$	21,449

The following table presents the activity in and the composition of the allowance for loan losses in accordance with previously applicable GAAP by loan segment and class detail as of and for the three and nine months ended September 30, 2022.

	Allowance for Loan Losses
	July 1, 2022								September 30, 2022
(dollars in thousands)	Balance		Charge-offs		Recoveries		Provision		Balance
Builder & developer	$	2,290	$	0	$	12	$	(176)	$	2,126
Commercial real estate investor		5,766		(22)		0		(13)		5,731
Residential real estate investor		3,483		(52)		1		(670)		2,762
Hotel/Motel		1,262		(10)		179		(345)		1,086
Wholesale & retail		518		0		0		17		535
Manufacturing		858		0		0		128		986
Agriculture		1,454		0		40		150		1,644
Service		827		(248)		1		443		1,023
Other commercial		5,936		0		6		(126)		5,816
Total commercial related loans		22,394		(332)		239		(592)		21,709
Residential mortgage		212		0		0		31		243
Home equity		195		0		24		(19)		200
Other consumer		75		(3)		6		2		80
Total consumer related loans		482		(3)		30		14		523
Unallocated		(11)		0		0		11		0
Total	$	22,865	$	(335)	$	269	$	(567)	$	22,232

	Allowance for Loan Losses
	January 1, 2022								September 30, 2022
(dollars in thousands)	Balance		Charge-offs		Recoveries		Provision		Balance
Builder & developer	$	2,408	$	0	$	12	$	(294)	$	2,126
Commercial real estate investor		5,647		(1,249)		0		1,333		5,731
Residential real estate investor		3,493		(52)		10		(689)		2,762
Hotel/Motel		968		(1,669)		179		1,608		1,086
Wholesale & retail		1,989		0		0		(1,454)		535
Manufacturing		883		0		0		103		986
Agriculture		1,307		(535)		40		832		1,644
Service		981		(736)		1		777		1,023
Other commercial		4,656		(3)		30		1,133		5,816
Total commercial related loans		22,332		(4,244)		272		3,349		21,709
Residential mortgage		186		0		0		57		243
Home equity		191		(49)		26		32		200
Other consumer		74		(6)		17		(5)		80
Total consumer related loans		451		(55)		43		84		523
Unallocated		(1)		0		0		1		0
Total	$	22,782	$	(4,299)	$	315	$	3,434	$	22,232

Non-accrual Loans

The table below presents a summary of non-accrual loans at September 30, 2023. An allowance is established for those individual loans where the Corporation has doubt as to the full recovery of the outstanding principal balance. Typically, individually evaluated consumer related loans are partially or fully charged-off eliminating the need for specific allowance. Interest income on loans with no related allowance is the result of interest collected on a cash basis.

		With a		Without a		Related		Interest Income
(dollars in thousands)		Related Allowance		Related Allowance		Allowance		Three months ended		Nine months ended
September 30, 2023
Commercial loans	$	1,988	$	1,996	$	1,092	$	136	$	381
Commercial real estate:
Construction				40		0		0		107
Owner occupied		0		2,043		0		0		53
Non-owner occupied		0		204		0		0		0
Residential real estate:
Construction		0		0		0		0		36
Revolving		0		506		0		0		27
Multi family		0		0		0		0		0
Other		0		828		0		0		38
Consumer		0		0		0		0		0
Total	$	1,988	$	5,617	$	1,092	$	136	$	642

The table below presents a summary of impaired loans at December 31, 2022 . Generally, impaired loans are all loans risk rated nonaccrual or classified troubled debt restructuring. An allowance is established for those individual loans where the Corporation has doubt as to the full recovery of the outstanding principal balance. Typically, impaired consumer related loans are partially or fully charged-off, eliminating the need for specific allowance. The recorded investment represents outstanding unpaid principal loan balances adjusted for payments collected on a non-cash basis and charged-offs.

	With No Allowance				With A Related Allowance						Total
	Recorded		Unpaid		Recorded		Unpaid		Related		Recorded		Unpaid
(dollars in thousands)	Investment		Principal		Investment		Principal		Allowance		Investment		Principal
December 31, 2022
Builder & developer	$	1,901	$	2,644	$	44	$	44	$	44	$	1,945	$	2,688
Commercial real estate investor		500		500		0		0		0		500		500
Residential real estate investor		647		665		209		215		152		856		880
Hotel/Motel		0		0		0		0		0		0		0
Wholesale & retail		0		0		0		0		0		0		0
Manufacturing		2,783		2,877		182		183		33		2,965		3,060
Agriculture		164		210		748		930		655		912		1,140
Service		0		0		0		0		0		0		0
Other commercial		1,836		3,037		1,600		2,338		1,600		3,436		5,375
Total impaired commercial related loans		7,831		9,933		2,783		3,710		2,484		10,614		13,643
Residential mortgage		1,112		1,115		0		0		0		1,112		1,115
Home equity		457		512		0		0		0		457		512
Other consumer		0		0		0		0		0		0		0
Total impaired consumer related loans		1,569		1,627		0		0		0		1,569		1,627
Total impaired loans	$	9,400	$	11,560	$	2,783	$	3,710	$	2,484	$	12,183	$	15,270

The tables below presents a summary of average impaired loans and related interest income that was included for the three and nine months ended September 30, 2022. Interest income on loans with no related allowance is the result of interest collected on a cash basis.

	With No Related Allowance				With A Related Allowance				Total
	Average		Total		Average		Total		Average		Total
	Recorded		Interest		Recorded		Interest		Recorded		Interest
(dollars in thousands)	Investment		Income		Investment		Income		Investment		Income
Three months ended September 30, 2022
Builder & developer	$	982	$	0	$	1,492	$	0	$	2,474	$	0
Commercial real estate investor		2,855		4		0		0		2,855		4
Residential real estate investor		711		4		213		0		924		4
Hotel/Motel		0		0		0		0		0		0
Wholesale & retail		0		0		0		0		0		0
Manufacturing		4,023		0		0		0		4,023		0
Agriculture		405		0		748		0		1,153		0
Service		0		0		0		0		0		0
Other commercial		0		0		4,179		0		4,179		0
Total impaired commercial related loans		8,976		8		6,632		0		15,608		8
Residential mortgage		842		6		0		0		842		6
Home equity		470		0		0		0		470		0
Other consumer		44		15		0		0		44		15
Total impaired consumer related loans		1,356		21		0		0		1,356		21
Total impaired loans	$	10,332	$	29	$	6,632	$	0	$	16,964	$	29

	With No Related Allowance				With A Related Allowance				Total
	Average		Total		Average		Total		Average		Total
	Recorded		Interest		Recorded		Interest		Recorded		Interest
(dollars in thousands)	Investment		Income		Investment		Income		Investment		Income
Nine months ended September 30, 2022
Builder & developer	$	986	$	0	$	746	$	0	$	1,732	$	0
Commercial real estate investor		2,993		18		469		0		3,462		18
Residential real estate investor		466		27		106		0		572		27
Hotel/Motel		6,067		0		0		0		6,067		0
Wholesale & retail		0		0		0		0		0		0
Manufacturing		4,478		37		0		0		4,478		37
Agriculture		1,482		501		771		0		2,253		501
Service		0		0		486		0		486		0
Other commercial		996		177		3,596		0		4,592		177
Total impaired commercial related loans		17,468		760		6,174		0		23,642		760
Residential mortgage		452		13		280		8		732		21
Home equity		459		27		0		0		459		27
Other consumer		69		15		0		0		69		15
Total impaired consumer related loans		980		55		280		8		1,260		63
Total impaired loans	$	18,448	$	815	$	6,454	$	8	$	24,902	$	823

As of September 30, 2023 and December 31, 2022, there were approximately $5,600,000 and $9,400,000, respectively, of non-accrual loans that did not have a related allowance for credit losses. The estimated fair value of the collateral securing these loans exceeded their carrying amount, or the loans were previously charged down to realizable collateral values. Accordingly, no allowance for credit losses was considered to be necessary.

The table below shows the allowance amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for December 31, 2022.

	Allowance for Loan Losses						Loans
	Individually		Collectively				Individually		Collectively
	Evaluated For		Evaluated For				Evaluated For		Evaluated For
(dollars in thousands)	Impairment		Impairment		Balance		Impairment		Impairment		Balance
December 31, 2022
Builder & developer	$	44	$	1,725	$	1,769	$	1,945	$	126,382	$	128,327
Commercial real estate investor		0		4,858		4,858		500		366,866		367,366
Residential real estate investor		152		2,661		2,813		856		262,406		263,262
Hotel/Motel		0		1,658		1,658		0		94,471		94,471
Wholesale & retail		0		488		488		0		60,672		60,672
Manufacturing		33		897		930		2,965		83,628		86,593
Agriculture		655		990		1,645		912		90,537		91,449
Service		0		1,064		1,064		0		73,094		73,094
Other commercial		1,600		3,352		4,952		3,436		205,680		209,116
Total commercial related		2,484		17,693		20,177		10,614		1,363,736		1,374,350
Residential mortgage		0		270		270		1,112		134,228		135,340
Home equity		0		207		207		457		97,573		98,030
Other consumer		0		82		82		0		25,137		25,137
Total consumer related		0		559		559		1,569		256,938		258,507
Unallocated		0		0		0		0		0		0
Total	$	2,484	$	18,252	$	20,736	$	12,183	$	1,620,674	$	1,632,857

Asset Quality

The Corporation’s internal risk rating system follows regulatory guidance as to risk classifications and definitions. Every approved loan is assigned a risk rating. Generally, risk ratings for commercial related loans are determined by a formal evaluation of risk factors performed by the Corporation’s underwriting staff. For consumer and residential mortgage loans, the bank follows the Uniform Retail Credit Classification guidance. Commercial loans up to $500,000 may be scored using a third-party credit scoring software model for risk rating purposes. The loan portfolio is monitored on a continuous basis by loan officers, loan review personnel and senior management. Adjustments of loan risk ratings within the Watch, Criticized and Classified categories are generally performed by the Watch and Special Asset Committees, which includes senior management. The Committees, which typically meet at least quarterly, make changes, as appropriate, to these risk ratings. In addition to review by the Committees, existing loans are monitored by the primary loan officer and loan portfolio risk management officer to determine if any changes, upward or downward, in risk ratings are appropriate. Primary loan officers may recommend a change to a risk rating and internal loan review officers may downgrade existing loans, except to non-accrual status. Only the President/CEO or CFO may approve a downgrade of a loan to non-accrual status. The Special Asset Committee or President/CEO may upgrade a loan that is criticized or classified.

The Corporation uses eleven risk ratings to grade commercial loans. The first six ratings are considered “pass” ratings. A pass rating is a satisfactory credit rating, which applies to a loan that is expected to perform in accordance with the loan agreement and has a low probability of loss. A loan rated “special mention” has a potential weakness which may, if not corrected, weaken the loan or inadequately protect the Corporation’s position at some future date. A loan rated “substandard” is inadequately protected by the current net worth or paying capacity of the obligor, or of the collateral pledged. A “substandard” loan has a well-defined weakness or weaknesses that could jeopardize liquidation of the loan, which exposes the Corporation to potential loss if the deficiencies are not corrected. When circumstances indicate that collection of the loan is doubtful, the loan is risk-rated “nonaccrual,” the accrual of interest income is discontinued, and any unpaid interest previously credited to income is reversed.

‎

The following table summarizes designated internal risk rating categories by portfolio segment, by origination year, in the current period. It does not include the regulatory classification of “doubtful,” nor does it include the regulatory classification of “loss”, because the Corporation promptly charges off loan losses.

	Term Loans Amortized Cost Basis by Origination Year															Revolving Loans
														Revolving Loans		converted to Term
														Amortized Cost		Loans Amortized
(dollars in thousands)		2023		2022		2021		2020		2019		Prior		Basis		Cost Basis		Total
Commercial loans
Pass	$	14,196	$	44,255	$	15,949	$	4,712	$	10,760	$	9,893	$	51,716	$	0	$	151,481
Special Mention		0		0		50		0		563		137		3,374		0		4,124
Substandard		38		649		2,784		13		12		1,168		7,237		0		11,901
Nonaccrual		0		360		599		0		625		1,000		1,400		0		3,984
Total		14,234		45,264		19,382		4,725		11,960		12,198		63,727		0		171,490
Gross write-offs		0		(26)		0		(15)		0		(968)		(239)		0		(1,248)
Commercial real estate:
Construction
Pass	$	41,980	$	74,921	$	31,133	$	11,922	$	7,966	$	8,474	$	2,831	$	0	$	179,227
Special Mention		0		605		0		1,679		0		0		1,000		0		3,284
Substandard		0		0		0		2,409		0		0		0		0		2,409
Nonaccrual		0		0		0		0		0		40		0		0		40
Total		41,980		75,526		31,133		16,010		7,966		8,514		3,831		0		184,960
Gross write-offs		0		0		0		0		0		0		0		0		0
Owner occupied
Pass	$	33,433	$	60,051	$	66,381	$	24,657	$	34,689	$	94,644	$	16,803	$	0	$	330,658
Special Mention		140		0		0		2,519		0		4,151		0		0		6,810
Substandard		250		0		1,263		0		0		6,404		429		0		8,346
Nonaccrual		0		0		1,785		0		0		258		0		0		2,043
Total		33,823		60,051		69,429		27,176		34,689		105,457		17,232		0		347,857
Gross write-offs		0		0		0		0		0		(683)		0		0		(683)
Non-owner occupied
Pass	$	33,056	$	120,640	$	111,199	$	63,341	$	11,542	$	111,059	$	1,439	$	0	$	452,276
Special Mention		0		0		1,197		0		0		950		0		0		2,147
Substandard		0		0		0		0		0		957		0		0		957
Nonaccrual		0		0		0		50		0		154		0		0		204
Total		33,056		120,640		112,396		63,391		11,542		113,120		1,439		0		455,584
Gross write-offs		0		0		0		0		0		0		0		0		0
Residential real estate:
Construction
Pass	$	8,388	$	13,824	$	2,155	$	972	$	1,556	$	540	$	1,697	$	0	$	29,132
Special Mention		0		0		0		0		0		0		0		0		0
Substandard		0		0		0		0		0		0		0		0		0
Nonaccrual		0		0		0		0		0		0		0		0		0
Total		8,388		13,824		2,155		972		1,556		540		1,697		0		29,132
Gross write-offs		0		0		0		0		0		0		0		0		0
Revolving
Pass	$	9,616	$	16,462	$	1,099	$	333	$	638	$	2,102	$	74,413	$	0	$	104,663
Special Mention		0		0		0		0		0		0		0		0		0
Substandard		0		0		0		0		0		0		0		0		0
Nonaccrual		0		34		0		0		0		0		472		0		506
Total		9,616		16,496		1,099		333		638		2,102		74,885		0		105,169
Gross write-offs		0		0		0		0		0		(8)		(19)		0		(27)

Multi family
Pass	$	5,418	$	26,836	$	32,980	$	19,625	$	23,934	$	9,442	$	1,003	$	0	$	119,238
Special Mention		0		0		0		0		0		1,800		0		0		1,800
Substandard		0		0		0		0		0		2,427		0		0		2,427
Nonaccrual		0		0		0		0		0		0		0		0		0
Total		5,418		26,836		32,980		19,625		23,934		13,669		1,003		0		123,465
Gross write-offs		0		0		0		0		0		0		0		0		0
Other
Pass	$	50,055	$	63,283	$	43,265	$	38,398	$	18,221	$	56,723	$	956	$	0	$	270,901
Special Mention		0		0		0		52		0		1,012		42		0		1,106
Substandard		0		0		0		130		0		205		0		0		335
Nonaccrual		0		0		292		0		0		536		0		0		828
Total		50,055		63,283		43,557		38,580		18,221		58,476		998		0		273,170
Gross write-offs		0		0		0		0		0		0		0		0		0
Consumer
Pass	$	3,843	$	3,622	$	1,708	$	204	$	111	$	277	$	3,788	$	0	$	13,553
Special Mention		0		0		0		0		0		0		0		0		0
Substandard		0		0		0		0		0		0		0		0		0
Nonaccrual		0		0		0		0		0		0		0		0		0
Total		3,843		3,622		1,708		204		111		277		3,788		0		13,553
Gross write-offs		0		(2)		0		(2)		0		(1)		(22)		0		(27)
Total Loans
Pass	$	199,985	$	423,894	$	305,869	$	164,164	$	109,417	$	293,154	$	154,646	$	0	$	1,651,129
Special Mention		140		605		1,247		4,250		563		8,050		4,416		0		19,271
Substandard		288		649		4,047		2,552		12		11,161		7,666		0		26,375
Nonaccrual		0		394		2,676		50		625		1,988		1,872		0		7,605
Total		200,413		425,542		313,839		171,016		110,617		314,353		168,600		0		1,704,380
Total Gross Charge-Offs	$	0	$	(28)	$	0	$	(17)	$	0	$	(1,660)	$	(280)	$	0	$	(1,985)

			Special
(dollars in thousands)	Pass		Mention		Substandard		Nonaccrual		Total
December 31, 2022
Builder & developer	$	124,572	$	1,010	$	972	$	1,773	$	128,327
Commercial real estate investor		367,144		0		0		222		367,366
Residential real estate investor		262,406		0		0		856		263,262
Hotel/Motel		89,710		0		4,761		0		94,471
Wholesale & retail		59,930		56		686		0		60,672
Manufacturing		81,552		1,444		632		2,965		86,593
Agriculture		87,896		2,260		381		912		91,449
Service		68,373		384		4,337		0		73,094
Other		192,194		4,934		8,552		3,436		209,116
Total commercial related loans		1,333,777		10,088		20,321		10,164		1,374,350
Residential mortgage		134,850		0		141		349		135,340
Home equity		97,573		0		0		457		98,030
Other		25,137		0		0		0		25,137
Total consumer related loans		257,560		0		141		806		258,507
Total loans	$	1,591,337	$	10,088	$	20,462	$	10,970	$	1,632,857

The performance and credit quality of the loan portfolio is also monitored by using an aging schedule that shows the length of time a loan is past due. The table below presents a summary of past due loans, nonaccrual loans and current loans by class segment at September 30, 2023.

						≥ 90 Days				Total Past
		30-59 Days		60-89 Days		Past Due				Due and
(dollars in thousands)		Past Due		Past Due		and Accruing		Nonaccrual		Nonaccrual		Current		Total Loans
September 30, 2023
Commercial loans	$	50	$	0	$	0	$	3,984	$	4,034	$	167,456	$	171,490
Commercial real estate:
Construction		0		1,679		0		40		1,719		183,241		184,960
Owner occupied		0		0		0		2,043		2,043		345,814		347,857
Non-owner occupied		0		0		0		204		204		455,380		455,584
Residential real estate:
Construction		0		0		0		0		0		29,132		29,132
Revolving		246		0		0		506		752		104,417		105,169
Multi family		0		0		0		0		0		123,465		123,465
Other		3		0		0		828		831		272,339		273,170
Consumer		24		0		0		0		24		13,529		13,553
Total	$	323	$	1,679	$	0	$	7,605	$	9,607	$	1,694,773	$	1,704,380

The performance and credit quality of the loan portfolio is also monitored by using an aging schedule that shows the length of time a loan is past due. The table below presents a summary of past due loans, nonaccrual loans and current loans by class segment at December 31, 2022.

					≥ 90 Days
	30-59		60-89		Past Due				Total Past
	Days		Days		and				Due and				Total
(dollars in thousands)	Past Due		Past Due		Accruing		Nonaccrual		Nonaccrual		Current		Loans
December 31, 2022
Builder & developer	$	3,500	$	0	$	0	$	1,773	$	5,273	$	123,054	$	128,327
Commercial real estate investor		0		0		0		222		222		367,144		367,366
Residential real estate investor		0		0		0		856		856		262,406		263,262
Hotel/Motel		0		0		0		0		0		94,471		94,471
Wholesale & retail		0		0		0		0		0		60,672		60,672
Manufacturing		0		0		0		2,965		2,965		83,628		86,593
Agriculture		8		0		0		912		920		90,529		91,449
Service		0		0		0		0		0		73,094		73,094
Other		0		0		0		3,436		3,436		205,680		209,116
Total commercial related loans		3,508		0		0		10,164		13,672		1,360,678		1,374,350
Residential mortgage		207		0		0		349		556		134,784		135,340
Home equity		345		94		0		457		896		97,134		98,030
Other		7		42		0		0		49		25,088		25,137
Total consumer related loans		559		136		0		806		1,501		257,006		258,507
Total loans	$	4,067	$	136	$	0	$	10,970	$	15,173	$	1,617,684	$	1,632,857

Collateral Dependent Loans

A loan is considered to be collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. For all classes of loans deemed collateral-dependent, the Corporation elected the practical expedient to estimate expected credit losses based on the collateral’s fair value less cost to sell. In most cases, the Corporation records a partial charge-off to reduce the loan’s carrying value to the collateral’s fair value less cost to sell. Substantially all of the collateral supporting collateral-dependent financial assets consists of various types of real estate, including residential properties, commercial properties, such as retail centers, office buildings, lodging, agriculture land, and vacant land. At September 30, 2023 collateral dependent loans totaled $7,600,000.

Modifications

Occasionally, the Corporation modifies loans to borrowers in financial distress by providing principal forgiveness, other-than-insignificant payment delay, term extension or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.

In some cases, the Corporation provides multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. For the loans included in the “combination” columns below, multiple types of modifications have been made on the same loan within the current reporting period. The combination is at least two of the following: a term extension, principal forgiveness, an other-than-insignificant payment delay and/or an interest rate reduction.

The following table presents the amortized costs basis of loans at September 30, 2023 that were both experiencing financial difficulty and modified during the prior 3 months, by segment and type of modification. The percentage of the amortized costs basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of loan is also presented below:

		Payment Delay &
(dollars in thousands)		Term Extension	Total Loan Class
September 30, 2023
Commercial real estate:
Construction	$	1,679	0.91	%
Residential real estate:
Multi family		1,800	1.46
Total	$	3,479	0.20	%

The following table presents the amortized costs basis of loans at September 30, 2023 that were both experiencing financial difficulty and modified during the prior nine months, by segment and type of modification. The percentage of the amortized costs basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of loan is also presented below:

		Payment Delay &		Term
(dollars in thousands)		Term Extension		Extension	Total Loan Class
September 30, 2023
Commercial loans	$	0	$	1,748	1.02	%
Commercial real estate:
Construction		1,679		0	0.91
Owner occupied		0		1,785	0.51
Residential real estate:
Multi family		1,800		0	1.46
Total	$	3,479	$	3,533	0.41	%

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three months ended September 30, 2023:

	Weighted-Average
	Payment Delay &
(dollars in thousands)	Term Extension (months)
September 30, 2023
Commercial real estate:
Construction	4
Residential real estate:
Multi family	4

The Corporation has not committed to lend additional amounts to the borrowers included in the previous table.

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the nine months ended September 30, 2023:

		Weighted-Average
	Weighted-Average	Payment Delay &
(dollars in thousands)	Term Extension (months)	Term Extension (months)
September 30, 2023
Commercial loans	8	0
Commercial real estate:
Construction	0	4
Owner occupied	8	0
Residential real estate:
Multi family	0	4

The Corporation has committed to lend additional amounts totaling $231,000 to the borrowers included in the previous table.

The Corporation closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. None of the loans that have been modified in the last three and nine months were past due or had a payment default at September 30, 2023.

 

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Deposits

9 Months Ended

Sep. 30, 2023

Deposits [Abstract]

Deposits

Note 5—Deposits

The composition of deposits as of September 30, 2023 and December 31, 2022 is shown below. The aggregate amount of demand deposit overdrafts that were reclassified as loans is $96,000 at September 30, 2023, compared to $122,000 at December 31, 2022.

	September 30,		December 31,
(dollars in thousands)	2023		2022
Noninterest bearing demand	$	398,486	$	463,853
Interest bearing demand		271,192		289,298
Money market		651,655		646,702
Savings		141,316		161,228
Time deposits less than $100		229,638		210,331
Time deposits $100 to $250		145,467		123,002
Time deposits $250 or more		68,624		48,805
Total deposits	$	1,906,378	$	1,943,219

 

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Short-Term Borrowings and Long-Term Debt

9 Months Ended

Sep. 30, 2023

Short-Term Borrowings and Long-Term Debt [Abstract]

Short-Term Borrowings and Long-Term Debt

Note 6—Short-Term Borrowings and Long-Term Debt

Short-term borrowings consist of securities sold under agreements to repurchase, federal funds purchased and other borrowings. At September 30, 2023, the balance of securities sold under agreements to repurchase was $13,224,000 compared to $11,605,000 at December 31, 2022. At September 30, 2023, the balance of other short-term borrowings was $25,875,000 compared to $0 at December 31, 2022. Short-term borrowings at September 30, 2023 consisted of FHLB Open Repo Line of Credit advances at a variable rate. The rate at September 30, 2023 was 5.68 percent.

The following table presents a summary of long-term debt as of September 30, 2023 and December 31, 2022.

	September 30,		December 31,
(dollars in thousands)	2023		2022
Junior subordinated debt
Due 2034, 7.69%, floating rate based on 3 month
SOFR plus 2.02%, callable quarterly	$	3,093	$	3,093
Due 2036, 7.11% floating rate based on 3 month
SOFR plus 1.54%, callable quarterly		7,217		7,217
Lease obligations included in long-term debt:
Finance lease liabilities		1,218		1,240
Total long term debt and junior subordinated debt	$	11,528	$	11,550
Subordinated notes
Due 2030, 4.50% fixed rate, callable on or after December 2025		30,825		30,764
Total long-term debt	$	42,353	$	42,314

In June 2006, Codorus Valley formed CVB Statutory Trust No. II, a wholly-owned special purpose entity whose sole purpose was to facilitate a pooled trust preferred debt issuance of $7,217,000. In November 2004, Codorus Valley formed CVB Statutory Trust No. I to facilitate a pooled trust preferred debt issuance of $3,093,000. The Corporation owns all of the common stock of these nonbank entities, and the debentures are the sole assets of the Trusts. The accounts of both Trusts are not consolidated for financial reporting purposes in accordance with FASB ASC 810. For regulatory capital purposes, all of the Corporation’s trust preferred securities qualified as Tier 1 capital for all reported periods. Trust preferred securities are subject to capital limitations under the FDIC’s risk-based capital guidelines. The Corporation used the net proceeds from these offerings to fund its operations.

In December 2020, Codorus Valley issued subordinated notes in the amount of $31,000,000. The Corporation may redeem the subordinated notes, in whole or in part, in a principal amount with integral multiples of $10,000, on or after December 9, 2025 and prior to the maturity date at 100% of the principal amount, plus accrued and unpaid interest. The subordinated notes mature on December 9, 2030. The subordinated notes are also redeemable in whole or in part from time to time, upon the occurrence of specific events defined within the Note Purchase Agreements. The subordinated notes may be included in Tier 2 capital (with certain limitations applicable) under current regulatory guidelines and interpretations. The subordinated notes have a fixed rate of interest equal to 4.50% until December 30, 2025. After that term, the variable rate of interest is equal to the then current 90-Day Average SOFR (Secured Overnight Financing Rate) plus 404 basis points.

 

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Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

Note 7—Leases

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Substantially all of the leases in which the Corporation is the lessee are comprised of real estate property, ATM locations, and office space. Substantially all of our leases are classified as operating leases, and therefore, were previously not recognized on the Corporation’s consolidated statements of condition. With the adoption of Topic 842, operating lease agreements are required to be recognized on the consolidated statements of condition as right-of-use (“ROU”) assets and corresponding lease liabilities. The Corporation also has one finance lease for one financial center.

Leases with an initial term of 12 months or less are not recorded on the consolidated statement of condition. All other leases have remaining lease terms of 1 year to 25 years, some of which include options to extend. Upon opening a new financial center, we typically install brand-specific leasehold improvements which are depreciated over the shorter of the useful life or length of the lease. To the extent that the initial lease term of the related lease is less than the useful life of the leasehold improvements and, taking into consideration the dollar amount of the improvements, we conclude that it is reasonably certain that a renewal option will be exercised, the renewal period is included in the lease term, and the related payments are reflected in the ROU asset and lease liability. Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Corporation utilizes its incremental borrowing rate at lease inception, on an amortizing and collateralized basis, over a similar term.

All of our leases include fixed rental payments. We commonly enter into leases under which the lease payments increase at pre-determined dates based on the change in the consumer price index. While the majority of our leases are gross leases, we also have a number of leases in which we make separate payments to the lessor based on the lessor’s property and casualty insurance cost and the property taxes assessed on the property, as well as a portion of the common area maintenance associated with the property. We have elected the practical expedient not to separate lease and nonlease components for all of our building leases.

The components of lease expense were as follows:

	Three months ended
	September 30,
(dollars in thousands)	2023		2022
Operating lease cost	$	171	$	190
Finance lease cost:
Amortization of right-of-use assets	$	12	$	12
Interest on lease liability		11		12
Total finance lease cost	$	23	$	24
Total lease cost	$	194	$	214

	Nine months ended
	September 30,
(dollars in thousands)	2023		2022
Operating lease cost	$	519	$	581
Finance lease cost:
Amortization of right-of-use assets	$	36	$	36
Interest on lease liability		33		36
Total finance lease cost	$	69	$	72
Total lease cost	$	588	$	653

Supplemental cash flow information related to leases was as follows:

	Nine months ended
	September 30,
	2023		2022
Operating cash flows from operating leases	$	540	$	547
Operating cash flows from financing leases		33		35
Financing cash flows from financing leases		24		21
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		0		2,061
Finance leases		0		0

Amounts recognized as right-of-use assets related to finance leases are included in fixed assets in the accompanying statement of financial position, while related lease liabilities are included in long-term debt. Supplemental balance sheet information related to leases was as follows:

	September 30,		December 31,
	2023		2022
Assets:
Operating leases right-of-use assets	$	2,618	$	3,072
Finance leases assets		959		994
Total lease assets	$	3,577	$	4,066
Liabilities:
Operating	$	2,726	$	3,204
Financing		1,218		1,240
Total lease liabilities	$	3,944	$	4,444
Weighted Average Remaining Lease Term (years)
Operating leases		6.6		6.9
Finance leases		20.4		21.2
Weighted Average Discount Rate
Operating leases		2.08%		2.14%
Finance leases		3.69%		3.69%

Future minimum payments for financing leases and operating leases as of September 30, 2023 and December 31, 2022 were as follows:

(dollars in thousands:)	September 30, 2023
Year Ending December 31,	Operating Leases		Finance Leases
2023	$	162	$	19
2024		638		75
2025		430		79
2026		324		80
2027		314		80
Thereafter		1,037		1,429
Total lease payments		2,905		1,762
Less imputed interest		(179)		(544)
Total	$	2,726	$	1,218

(dollars in thousands:)	December 31, 2022
Year Ending December 31,	Operating Leases		Finance Leases
2023	$	701	$	75
2024		638		75
2025		417		79
2026		324		80
2027		314		80
Thereafter		1,036		1,429
Total lease payments		3,430		1,818
Less imputed interest		(226)		(578)
Total	$	3,204	$	1,240

 

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Regulatory Matters

9 Months Ended

Sep. 30, 2023

Regulatory Matters [Abstract]

Regulatory Matters

Note 8—Regulatory Matters

The Corporation is subject to restrictions on the payment of dividends to its shareholders pursuant to the Pennsylvania Business Corporation Law of 1988, as amended (“BCL”). The BCL prohibits the making of a dividend payment if such payment would render the Corporation insolvent or result in it having negative net worth. Federal and state banking regulations also place certain restrictions on dividends paid and loans or advances made by PeoplesBank to the Corporation. The amount of total dividends, which may be paid at any date, is generally limited to the retained earnings of PeoplesBank. Furthermore, dividend payments would be prohibited if the effect would be to cause PeoplesBank’s capital to fall below applicable minimum capital requirements as discussed below. Loans and advances by PeoplesBank to affiliates, including the Corporation, are limited to 10 percent of PeoplesBank’s capital stock and contributed capital on a secured basis.

Banks are also subject to regulatory capital requirements administered by federal banking agencies.  Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off balance sheet items calculated under regulatory accounting practices.  Capital amounts and classifications are also subject to qualitative judgments by regulators.  Failure of a bank to meet capital requirements can cause bank regulators to initiate certain regulatory actions.  The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital.  Management believes as of September 30, 2023, the Bank met all capital adequacy requirements to which it is subject.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At September 30, 2023 and December 31, 2022, the most recent regulatory notifications categorized PeoplesBank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.

The table below sets for the Corporation’s and PeoplesBank’s capital positive relative to its respective regulatory capital requirements at September 30, 2023 and December 31, 2022.

									To Be Well Capitalized Under
					Required for Capital				Prompt Corrective Action
	Actual (1)				Adequacy Purposes (2) (3)				Provisions (2)
(dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Codorus Valley Bancorp, Inc. (consolidated)
at September 30, 2023
Capital ratios:
Common equity Tier 1	$	223,708	12.52	%	$	125,037	7.00	%	$	n/a	n/a	%
Tier 1 risk based		233,708	13.08			151,831	8.50			n/a	n/a
Total risk based		285,982	16.01			187,556	10.50			n/a	n/a
Leverage		233,708	10.50			88,992	4.00			n/a	n/a
at December 31, 2022
Capital ratios:
Common equity Tier 1	$	209,540	12.04	%	$	121,871	7.00	%	$	n/a	n/a	%
Tier 1 risk based		219,540	12.61			147,986	8.50			n/a	n/a
Total risk based		271,040	15.57			182,806	10.50			n/a	n/a
Leverage		219,540	9.77			89,863	4.00			n/a	n/a
PeoplesBank, A Codorus Valley Company
at September 30, 2023
Capital ratios:
Common equity Tier 1	$	260,933	14.63	%	$	124,818	7.00	%	$	115,903	6.50	%
Tier 1 risk based		260,933	14.63			151,565	8.50			142,649	8.00
Total risk based		282,382	15.84			187,227	10.50			178,312	10.00
Leverage		260,933	11.75			88,852	4.00			111,065	5.00
at December 31, 2022
Capital ratios:
Common equity Tier 1	$	245,896	14.15	%	$	121,667	7.00	%	$	112,976	6.50	%
Tier 1 risk based		245,896	14.15			147,738	8.50			139,048	8.00
Total risk based		266,632	15.34			182,500	10.50			173,810	10.00
Leverage		245,896	10.96			89,705	4.00			112,131	5.00

(1) Net unrealized gains and losses on securities available-for-sale, net of taxes, are disregarded for capital ratio computation purposes in accordance with federal regulatory banking guidelines.

(2) The Corporation is currently not subject to the regulatory capital requirements imposed by Basel III on bank holding companies because the Corporation's consolidated assets did not exceed $3.0 billion as of September 30, 2023 and therefore qualified as a small bank holding company.

(3) Ratio includes Capital Conservation Buffer of 2.50%, except Leverage Ratio, for which the Capital Conservation Buffer does not apply.

 

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Shareholders' Equity

9 Months Ended

Sep. 30, 2023

Shareholders' Equity [Abstract]

Shareholders' Equity

Note 9—Shareholders’ Equity

Share Repurchase

The Corporation’s Board of Directors approved share repurchase programs in August 2021 ($5 million) and January 2022 ($5 million). In 2022 a total of 1,535 shares were purchased at an average price of $22.00 under the program approved in August 2021. There was no activity under the program approved in January 2022, which expired by its own terms in December 2022.

The Corporation’s Board of Directors approved a Share Repurchase Program (“Program”) in January 2023. Under the approved Program, the Corporation is authorized to repurchase up to $5 million of the Corporation’s issued and outstanding common stock. All shares of the common stock repurchased pursuant to the Program shall be held as treasury shares and be available for use and reissuance for the purpose as and when determined by the Board of Directors including, without limitation pursuant to the Corporation’s Dividend Reinvestment and Stock Purchase Plan and its equity compensation plan. There was no activity under the Program during the three and nine months ended September 30, 2023.

 

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Contingent Liabilities

9 Months Ended

Sep. 30, 2023

Contingent Liabilities [Abstract]

Contingent Liabilities

Note 10—Contingent Liabilities

The Corporation is involved in pending and threatened claims and other legal proceedings from time to time in the ordinary course of its business activities. Management evaluates the possible impact of these matters taking into consideration the most recent information available. A loss reserve is established for any matter for which it is believed that a loss is both probable and reasonably estimable. Once established, the reserve is adjusted as appropriate to reflect any subsequent developments. Actual losses with respect to any such matter may be more or less than the amount estimated. For any matter for which a loss is not probable, or the amount of the loss cannot reasonably be estimated, no loss reserve is established.

In addition, the Corporation may be involved in legal proceedings in the form of investigations or regulatory or governmental inquiries covering a range of possible issues. These could be specific to the Corporation, or part of more wide-spread inquires by regulatory authorities. These inquiries or investigations could lead to administrative, civil or criminal proceedings involving the Corporation and could result in fines, penalties, restitution, or other types of sanctions, or the need for the Corporation to undertake remedial actions, or to alter its business, financial or accounting practices.

Management believes that any liabilities, individually or in the aggregate, that may result from the final outcomes of pending or threatened legal proceedings will not have a material adverse effect on the financial condition of the Corporation or upon its results of operations.

 

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Guarantees

9 Months Ended

Sep. 30, 2023

Guarantees [Abstract]

Guarantees

Note 11—Guarantees

Codorus Valley does not issue any guarantees that would require liability recognition or disclosure, other than its standby letters of credit.  Standby letters of credit are written conditional commitments issued by PeoplesBank to guarantee the performance of a client to a third party.  Generally, all letters of credit, when issued, have expiration dates within one year.  The credit risk involved in issuing letters of credit is essentially the same as those that are involved in extending loan facilities to clients.  The Corporation generally holds collateral and/or personal guarantees supporting these commitments.  The Corporation had $16,699,000 of standby letters of credit outstanding on September 30, 2023, compared to $23,601,000 on December 31, 2022. Management believes that the proceeds obtained through a liquidation of collateral and the enforcement of guarantees would be sufficient to cover the potential amount of future payments required under the corresponding letters of credit. The amount of the liability as of September 30, 2023 and December 31, 2022, for guarantees under standby letters of credit issued, was not material. Many of the commitments are expected to expire without being drawn upon and, therefore, generally do not present significant liquidity risk to the Corporation or PeoplesBank.

 

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Fair Value of Assets and Liabilities

9 Months Ended

Sep. 30, 2023

Fair Value of Assets and Liabilities [Abstract]

Fair Value of Assets and Liabilities

Note 12—Fair Value of Assets and Liabilities

The Corporation uses its best judgment in estimating the fair value of the Corporation’s assets and liabilities; however, there are inherent weaknesses in any estimation technique. The estimated fair value amounts have been measured as of their respective period-ends and have not been re-evaluated or updated for purposes of these financial statements subsequent to those respective dates. As such, the estimated fair values subsequent to the respective reporting dates may be different than the amounts reported at each period end.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date. GAAP establishes a fair value hierarchy that prioritizes the use of inputs used in valuation methodologies into the following three levels:

Level 1: Inputs to the valuation methodology are quoted prices, unadjusted, for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available.

Level 2: Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; inputs to the valuation methodology include quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs to the valuation methodology that utilize model-based techniques for which all significant assumptions are observable in the market.

Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement; inputs to the valuation methodology that utilize model-based techniques for which significant assumptions are not observable in the market; or inputs to the valuation methodology that require significant management judgment or estimation, some of which may be internally developed.

Since management maximizes the use of observable inputs and minimizes the use of unobservable inputs when determining fair value, an asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Management reviews and updates the fair value hierarchy classifications on a quarterly basis.

Assets Measured at Fair Value on a Recurring Basis

Securities available-for-sale

The fair values of investment securities were measured using information from a third-party pricing service. The pricing service uses quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique, used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities, but rather, by relying on the securities’ relationship to other benchmark quoted prices.

Interest rate swap agreements

Interest rate swap agreements are measured by alternative pricing sources with reasonable levels of price transparency in markets that are not active. Based on the complex nature of interest rate swap agreements, the markets these instruments trade in are not as efficient and are less liquid than that of the more mature Level 1 markets. These markets do, however, have comparable, observable inputs in which an alternative pricing source values these assets in order to arrive at a fair market value. These characteristics classify interest rate swap agreements as Level 2.

			Fair Value Measurements
(dollars in thousands)	Total		(Level 1) ‎Quoted Prices in ‎Active Markets for ‎Identical Assets		(Level 2) ‎Significant Other ‎Observable Inputs		(Level 3) ‎Significant Other ‎Unobservable Inputs
September 30, 2023
Securities available-for-sale:
U.S. Treasury notes	$	19,209	$	19,209	$	0	$	0
U.S. agency		12,433		0		12,433		0
U.S. agency mortgage-backed, residential		243,579		0		243,579		0
State and municipal		28,066		0		28,066		0
Corporates		32,369		0		32,369		0
Other assets:
Loan-level interest rate swaps		851		0		851		0
December 31, 2022
Securities available-for-sale:
U.S. Treasury notes	$	19,100	$	19,100	$	0	$	0
U.S. agency		11,280		0		11,280		0
U.S. agency mortgage-backed, residential		250,102		0		250,102		0
State and municipal		29,399		0		29,399		0
Corporates		35,576		0		35,576		0
Other assets:
Loan-level interest rate swaps		8		0		8		0

Assets Measured at Fair Value on a Nonrecurring Basis

Individually evaluated loans

Individually evaluated loans are those that are accounted for under FASB ASC Topic 310, in which the Corporation has measured impairment generally based on the fair value of the loan’s collateral.  Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds.  These loans are generally included as Level 3 fair values, based on the lowest level of input that is significant to the fair value measurements.  At September 30, 2023, the fair value of individually evaluated loans with a valuation allowance or partial charge-off was $1,434,000, net of valuation allowances of $1,092,000 and charge-offs of $340,000.  At December 31, 2022 the fair value of impaired loans with a valuation allowance or charge-off was $2,742,000, net of valuation allowances of $2,484,000 and charge-offs of $1,916,000. 

Foreclosed real estate

Other real estate property acquired through foreclosure is initially recorded at fair value of the property at the transfer date less estimated selling cost. Subsequently, other real estate owned is carried at the lower of its carrying value or the fair value less estimated selling cost.  Fair value is usually determined based on an independent third-party appraisal of the property or occasionally on a recent

sales offer. At September 30, 2023 the fair value of foreclosed real estate assets was $383,000, net of a write-down down of $584,000. At December 31, 2022 the fair value of foreclosed real estate assets was $479,000, net of a write-down of $488,000.

Mortgage servicing rights

Mortgage servicing rights are initially recorded at fair value upon the sale of residential mortgage loans to secondary market investors. The fair value of servicing rights is based on the present value of estimated future cash flows on pools of mortgages stratified by rate and original time to maturity. Mortgage servicing rights are subsequently evaluated for impairment by an independent third party on a quarterly basis. Significant inputs to the valuation include expected cash flow, expected net servicing income, a cash flow discount rate and the expected life of the underlying loans.

			Fair Value Measurements
(dollars in thousands)		Total	(Level 1) ‎Quoted Prices in ‎Active Markets for ‎Identical Assets		(Level 2) ‎Significant Other ‎Observable Inputs		(Level 3) ‎Significant Other ‎Unobservable Inputs
September 30, 2023
Individually evaluated commercial loans	$	1,368	$	0	$	0	$	1,368
Individually evaluated residential real estate:
Individually evaluated other		66		0		0		66
Impaired other real estate owned		383		0		0		383
December 31, 2022
Impaired builder & developer loans	$	1,194	$	0	$	0	$	1,194
Impaired residential real estate investor loans		57		0		0		57
Impaired agriculture loans		228		0		0		228
Impaired manufacture loans		150		0		0		150
Impaired other loans		1,114		0		0		1,114
Impaired other real estate owned		479		0		0		479

‎

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

	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value		Valuation	Unobservable		Weighted
(dollars in thousands)	Estimate		Techniques	Input	Range	Average
September 30, 2023
Individually evaluated commercial loans	$	446	Appraisal (1)	Appraisal adjustments (2)	0%-9%	9%
Individually evaluated residential real estate:
Individually evaluated other		66	Appraisal (1)	Appraisal adjustments (2)	16%-16%	16%
Individually evaluated commercial loans		922	Business asset valuation (3)	Business asset valuation adjustments (4)	20%-50%	29%
Impaired other real estate owned		383	Appraisal (1)	Appraisal adjustments (2)	20%-25%	22%
December 31, 2022
Impaired builder & developer loans	$	1,194	Appraisal (1)	Appraisal adjustments (2)	2%-22%	5%
Impaired residential real estate investor loans		57	Appraisal (1)	Appraisal adjustments (2)	6%-10%	8%
Impaired agriculture loans		228	Appraisal (1)	Appraisal adjustments (2)	5%-13%	9%
Impaired manufacturer loans		150	Appraisal (1)	Appraisal adjustments (2)	67%-67%	67%
Impaired other loans		1,114	Appraisal (1)	Appraisal adjustments (2)	0%-25%	5%
Impaired other real estate owned		479	Appraisal (1)	Appraisal adjustments (2)	0%-25%	22%

(1)Fair value is generally determined through independent appraisals, which generally include various level 3 inputs that are not identifiable.

(2)Appraisal amounts may be adjusted downward by the Corporation's management for qualitative factors such as economic conditions and estimated liquidation expenses.

(3)Fair value is generally determined through customer-provided financial statements and bankruptcy court documents.

(4)Business asset valuation may be adjusted downward by the corporation’s management qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses adjustments are presented as a percent of the financial statement book value.

The following presents the carrying amounts and estimated fair values of the Corporation’s financial instruments as of September 30, 2023 and December 31, 2022.

						Fair Value Estimates
					(Level 1)		(Level 2)		(Level 3)
					Quoted Prices		Significant		Significant
					in Active		Other		Other
	Carrying		Estimated		Markets for		Observable		Unobservable
(dollars in thousands)	Amount		Fair Value		Identical Assets		Inputs		Inputs
September 30, 2023
Financial assets
Cash and cash equivalents	$	51,307	$	51,307	$	51,307	$	0	$	0
Securities available-for-sale		335,656		335,656		19,209		316,447		0
Restricted investment in bank stocks		2,152		N/A		N/A		N/A		N/A
Loans held for sale		1,103		1,125		0		1,125		0
Loans, net		1,682,931		1,570,158		0		0		1,570,158
Interest receivable		6,859		6,859		0		1,567		5,292
Interest rate swaps		851		851		0		851		0
Financial liabilities
Deposits	$	1,906,378	$	1,899,852	$	0	$	1,899,852	$	0
Short-term borrowings		39,099		39,099		0		39,099		0
Long-term debt and junior subordinated debt (1)		10,310		9,239		0		0		9,239
Subordinated notes		30,825		28,531		0		28,531		0
Interest payable		1,458		1,458		0		1,458		0
Interest rate swaps		851		851		0		851		0
Off-balance sheet instruments		0		0		0		0		0
December 31, 2022
Financial assets
Cash and cash equivalents	$	120,439	$	120,439	$	120,439	$	0	$	0
Securities available-for-sale		345,457		345,457		19,100		326,357		0
Restricted investment in bank stocks		955		N/A		N/A		N/A		N/A
Loans held for sale		154		157		0		157		0
Loans, net		1,612,121		1,503,440		0		0		1,503,440
Interest receivable		6,624		6,624		0		948		5,676
Financial liabilities
Deposits	$	1,943,219	$	1,932,689	$	0	$	1,932,689	$	0
Short-term borrowings		11,605		11,605		0		11,605		0
Long-term debt and junior subordinated debt (1)		10,310		10,165		0		0		10,165
Subordinated notes		30,764		29,145		0		29,145		0
Interest payable		492		492		0		492		0
Off-balance sheet instruments		0		0		0		0		0
(1) Exclude leases included in Long-term debt

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Assets and Liabilities Subject to Offsetting

9 Months Ended

Sep. 30, 2023

Assets and Liabilities Subject to Offsetting [Abstract]

Assets and Liabilities Subject to Offsetting

Note 13—Assets and Liabilities Subject to Offsetting

Securities Sold Under Agreements to Repurchase

PeoplesBank enters into agreements with clients in which it sells securities subject to an obligation to repurchase the same securities (“repurchase agreements”). The contractual maturity of the repurchase agreement is overnight and continues until either party terminates the agreement. These repurchase agreements are accounted for as a collateralized financing arrangement (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities. The obligation to repurchase the securities is reflected as a liability (short-term borrowings) in the Corporation’s consolidated financial statements of condition, while the securities underlying the repurchase agreements are appropriately segregated for safekeeping purposes and remain in the respective securities asset accounts. Thus, there is no offsetting or netting of the securities with the repurchase agreement liabilities.

							Gross amounts Not Offset in
							the Statements of Condition
							Financial Instruments
(dollars in thousands)	Gross ‎Amounts of ‎Recognized ‎Liabilities		Gross ‎Amounts ‎Offset in the ‎Statements ‎of Condition		Net Amounts ‎of Liabilities ‎Presented in ‎the Statements ‎of Condition		U.S. agency ‎mortgage-backed, ‎residential		U.S. agency		Cash ‎Collateral ‎Pledged		Net ‎Amount
September 30, 2023
Repurchase Agreements	$	13,224	$	0	$	13,224	$	(13,030)	$	0	$	0	$	194
December 31, 2022
Repurchase Agreements	$	11,605	$	0	$	11,605	$	(13,767)	$	0	$	0	$	(2,162)

 

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Interest Rate Swaps

9 Months Ended

Sep. 30, 2023

Interest Rate Swaps [Abstract]

Interest Rate Swaps

Note 14 – Interest Rate Swaps

Loan Level Interest Rate Swaps

PeoplesBank enters into loan-level interest rate swaps with certain qualifying, creditworthy commercial loan clients to provide a loan pricing structure that meets the interest rate risk management needs of both PeoplesBank as well as the client. PeoplesBank simultaneously enters into offsetting interest rate swaps with dealer counterparties, with identical notional amounts and terms. The net results of the offsetting client and deal counterparty swap agreements is that the client pays a fixed rate of interest and PeoplesBank receives a floating rate. PeoplesBank’s loan-level interest rate swaps are considered derivatives but are not accounted for using hedge accounting.

The fair value and notional amount related to loan-level interest rate swaps are presented below:

		September 30, 2023				December 31, 2022
		Notional		Asset (Liability)		Notional		Asset (Liability)
(dollars in thousands)		Amount		Fair Value		Amount		Fair Value
Interest Rate Swap with Customers
Positive Fair Values	$	34,173	$	851	$	5,992	$	8
Interest Rate Swaps with Counterparties
Negative Fair Values	$	34,173	$	(851)	$	5,992	$	(8)

‎

The gross amounts of loan-level interest rate swaps, the amounts offset and the carrying values in the Consolidated Balance Sheets, and the collateral pledged to support such agreements are presented below.

(dollars in thousands)		September 30, 2023		December 31, 2022
Interest Rate Swap Contracts - Commercial Loans:
Gross amounts recognized	$	851	$	8
Gross amounts offset		851		8
Net amounts presented in the Consolidated Balance Sheets	$	0	$	0
Gross amounts not offset:
Cash Collateral	$	0	$	0
Net amounts	$	0	$	0

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Summary of Significant Accounting Policies (Policy)

9 Months Ended

Sep. 30, 2023

Summary of Significant Accounting Policies [Abstract]

Nature of Operations and Basis of Presentation

Nature of Operations and Basis of Presentation

The accompanying consolidated balance sheet at December 31, 2022 has been derived from audited financial statements, and the unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, the instructions to Form 10-Q, and Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 270. Accordingly, the interim financial statements do not include all of the financial information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the interim consolidated financial statements include all adjustments necessary to present fairly the financial condition and results of operations for the reported periods, and all such adjustments are of a normal and recurring nature.

Codorus Valley Bancorp, Inc. (“Corporation” or “Codorus Valley”) is a bank holding company headquartered in York, Pennsylvania that provides a full range of banking services through its subsidiary, PeoplesBank, A Codorus Valley Company (“PeoplesBank” or “Bank”). As of September 30, 2023, PeoplesBank operates one wholly-owned subsidiary, Codorus Valley Financial Advisors, Inc. d/b/a PeoplesWealth Advisors, which sells nondeposit investment products. In addition, PeoplesBank may periodically create nonbank subsidiaries for the purpose of temporarily holding foreclosed properties pending the liquidation of these properties. PeoplesBank operates under a state charter and is subject to regulation by the Pennsylvania Department of Banking and Securities, and the Federal Deposit Insurance Corporation. The Corporation is subject to regulation by the Board of Governors of the Federal Reserve System and the Pennsylvania Department of Banking and Securities.

The consolidated financial statements include the accounts of Codorus Valley and its wholly-owned bank subsidiary, PeoplesBank, and a wholly-owned nonbank subsidiary, SYC Realty Company, Inc. SYC Realty was inactive during the period ended September 30, 2023. The accounts of CVB Statutory Trust No. I and No. II are not included in the consolidated financial statements as discussed in Note 6—Short-Term Borrowings and Long-Term Debt. All significant intercompany account balances and transactions have been eliminated in consolidation. The accounting and reporting policies of Codorus Valley and subsidiaries conform to accounting principles generally accepted in the United States of America and have been followed on a consistent basis.

These consolidated statements should be read in conjunction with the notes to the audited consolidated financial statements contained in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022.

The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year.

In accordance with FASB ASC 855, the Corporation evaluated the events and transactions that occurred after the balance sheet date of September 30, 2023 and through the date these consolidated financial statements were issued, for items of potential recognition or disclosure.

Allowance for Credit Losses—Available-for-Sale Securities

Allowance for Credit Losses—Available-for-Sale Securities

For available-for-sale debt securities in an unrealized loss position, the Corporation first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities available-for-sale that do not meet the aforementioned criteria, the Corporation evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit loss is recognized in other comprehensive income.

Changes in the allowance for credit losses are recorded as provision for credit loss expense (or reversal). Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable on available-for-sale debt securities, which totaled $1.6 million as of September 30, 2023, is excluded from the estimate of credit losses.

Loans

Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost, net of the allowance for credit losses. Amortized cost is the principal balance outstanding, net of deferred loan fees and costs. Accrued interest receivable totaled $5.3 million at September 30, 2023 and was reported in other assets on the consolidated balance sheets and is excluded from the estimate of credit losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. The loans receivable portfolio is disaggregated into segments. The segments include commercial,

commercial real estate – construction, commercial real estate – owner occupied, commercial real estate – non-owner occupied, residential real estate – construction, residential real estate – revolving, residential real estate – multi family, residential real estate - other, and consumer loans.

Interest income on mortgage and commercial loans is discontinued and placed on nonaccrual status at the time the loan is 90 days delinquent unless the loan is well secured and in process of collection. Mortgage loans are charged off at 180 days past due, and commercial loans are charged off to the extent principal or interest is deemed uncollectible. Consumer loans continue to accrue interest until they are charged off no later than 120 days past due unless the loan is in the process of collection. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Under the cash-basis method, interest income is recorded when the payment is received in cash. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

As disclosed in Note 4—Loans and Allowance for Credit Losses, the Corporation engages in commercial and consumer lending. Loans are made within the Corporation’s primary market area and surrounding areas, and include the purchase of whole loan or participation interests in loans from other financial institutions. Commercial loans, which pose the greatest risk of loss to the Corporation, whether originated or purchased, are generally secured by real estate.

Allowance for Credit Losses - Loans

Allowance for credit losses – loans

The allowance for credit losses (“ACL”) is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

Management estimates the allowance balance using relevant available information from both internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors. These adjustments are commonly known as the Qualitative Framework.

In addition to the estimated quantitative credit loss for loans evaluated collectively, qualitative factors that may not be fully captured in the quantitative results are also evaluated. These include changes in lending policy, the nature and volume of the portfolio, overall business conditions in the economy, credit concentrations, competition, model imprecision, and legal and regulatory requirements. Qualitative adjustments are judgmental and are based on management’s knowledge of the portfolio and the markets in which the Corporation operates. Qualitative adjustments are evaluated and approved on a quarterly basis. Additionally, the ACL includes other allowance categories that are not directly incorporated in the quantitative results including loans in process.

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. Loans evaluated collectively for expected credit losses include loans on accrual status and loans initially evaluated individually but determined to not to have enhanced credit risk characteristics. The Corporation has identified the following portfolio segments:

Commercial loans

Commercial real estate – construction

Commercial real estate – owner occupied

Commercial real estate – non-owner occupied

Residential real estate – construction

Residential real estate – revolving

Residential real estate – multi family

Residential real estate – other

Consumer loans

The Corporation measures the allowance for credit losses using the following methods.

• Loans are aggregated into pools based on similar risk characteristics.

• The Probability of Default (PD) and Loss Given Default (LGD) CECL model components are determined based on loss estimates driven by historical experience at the input level.

• The PD model component uses "through the economic cycle transition" matrices based on the Corporation’s and peer group historical loan and transaction data across each pool of loans.

• The LGD model component calculates a lifetime estimate across each pool of loans utilizing a nonparametric loss curve modeling approach.

• Reasonable and supportable forecasts are incorporated into the PD model component that are based on different economic forecasts and scenarios sourced from external parties. A future loss forecast over the reasonable and supportable forecast period of one year is based on the projected performance of specific economic variables that statistically correlate with the PD and LGD pools. After the reasonable and supportable forecast period, credit loss estimates revert over four quarters to input-level.

• Cash flow assumptions are established for each loan using maturity date, amortization schedule and interest rate.

• A constant prepayment rate is calculated for each loan pool in the CECL model.

Loans that do not share similar risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation. When management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.

Loans are modified if the Corporation grants borrowers experiencing financial difficulties concessions that it would not otherwise consider. Concessions granted under a modification may involve a reduction of the interest rate, forgiveness of principal, extension of the term of the loan, and/or other-than-insignificant payment delays.

Allowance for credit losses – off-balance sheet credit exposures

Effective January 1, 2023, the Corporation adopted ASC 326, at which time the Corporation estimated expected credit losses over the contractual period in which the Corporation is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Corporation. The allowance represents management’s estimate of expected losses in unfunded loan commitments and other noncancellable off-balance sheet credit exposures, such as letters of credit. The ACL specific to unfunded commitments is determined by estimating future draws and applying the expected loss rates on those draws. Future draws are based on historical averages of utilization rates, i.e., the likelihood of draws taken. Adjustments to the reserve for unfunded off-balance sheet credit exposures are recorded in provision for credit losses - unfunded off-balance sheet credit exposures in the Consolidated Statements of Income.

Loan-Level Interest Rate Swaps

Loan-Level Interest Rate Swaps

PeoplesBank enters into loan-level interest rate swaps (“swaps”) to facilitate certain client transactions and to meet their financing needs.  These swaps qualify as derivatives, but are not designated as hedging instruments, which would be accounted for using hedge accounting.   A loan-level interest rate swap is a contract in which the series of interest rate flows (fixed and variable) are exchanged over the term of a loan with certain qualifying commercial loan clients, and PeoplesBank simultaneously enters into an interest rate swap with a dealer counterparty with identical notional amounts and terms. The net result of these swaps is that the client pays a fixed interest rate and PeoplesBank receives a floating interest rate.  The swap positions with clients are equally offset with the dealer counterparties to minimize the potential impact on PeoplesBank’s financial statements.

Pursuant to agreements with the dealer counterparties, PeoplesBank may receive collateral or may be required to post collateral based upon mark-to-market positions. Beyond unsecured threshold levels, collateral in the form of cash or securities may be made available to counterparties of interest rate swap transactions. Based upon the current positions and related future collateral requirements relating to them, PeoplesBank believes any effect on its cash flow or liquidity position to be immaterial.

Derivatives contain an element of credit risk, including the possibility that PeoplesBank will incur a loss because a party to the agreements, which may be a dealer counterparty or a client, fails to meet its contractual obligations. Derivative contracts may only be executed with dealer counterparties as approved by the Board of Directors.  Similarly, derivatives with clients may only be executed with clients within credit exposure limits approved by the Board of Directors.

Interest rate swaps, recorded at fair value, are included in other assets on the Consolidated Balance Sheets. Additional information is provided in Note 14 – Interest Rate Swaps.

Bank Premises and Equipment Held for Sale

Bank Premises and Equipment Held for Sale

Bank premises and equipment designated as held for sale are carried at the lower of cost or fair value, and, at September 30, 2023 consisted of a banking property totaling $1,269,000 and is included in other assets on the Consolidated Balance Sheets. The balance of $567,000 at December 31, 2022 consisted of one retail banking property, which closed in the second quarter of 2022.

Foreclosed Real Estate

Foreclosed Real Estate

Foreclosed real estate, included in other assets, is comprised of property acquired through a foreclosure proceeding or property that is acquired through in-substance foreclosure. Foreclosed real estate is initially recorded at fair value minus estimated costs to sell at the date of foreclosure, establishing a new cost basis. Any difference between the carrying value and the new cost basis is charged against the allowance for credit losses. Appraisals, obtained from an independent third party, are generally used to determine fair value. After

foreclosure, management reviews valuations at least quarterly and adjusts the asset to the lower of cost or fair value minus estimated costs to sell through a valuation allowance or a write-down. Costs related to the improvement of foreclosed real estate are generally capitalized until the real estate reaches a saleable condition subject to fair value limitations. Revenue and expense from operations and changes in the valuation allowance are included in noninterest expense. When a foreclosed real estate asset is ultimately sold, any gain or loss on the sale is included in the income statement as a component of noninterest income or expense. At September 30, 2023 there was $383,000 of foreclosed commercial real estate compared to $479,000 at December 31, 2022. As of September 30, 2023, there was $219,000 consumer mortgage loans secured by residential real estate properties, for which formal foreclosure proceedings were in process according to local requirements of the applicable jurisdiction, compared to $124,000 as of December 31, 2022.

Mortgage Servicing Rights

Mortgage Servicing Rights

Mortgage servicing rights (MSRs) associated with sold loans are included in other assets on the consolidated balance sheets at an amount equal to the estimated fair value of the contractual rights to service the mortgage loans. The MSR asset is amortized as a reduction to servicing income. The MSR asset is evaluated periodically for impairment and carried at the lower of amortized cost or fair value. An independent third party firm calculates fair value by discounting the estimated cash flows from servicing income using a rate consistent with the risk associated with these assets and an estimate of future net servicing income of the underlying loans. In the event that the amortized cost of the MSR asset exceeds the fair value of the asset, a valuation allowance would be established through a charge against servicing income. Subsequent fair value evaluations may determine that impairment has been reduced or eliminated, in which case the valuation allowance would be reduced through a credit to earnings. At September 30, 2023, the balance of residential mortgage loans serviced for third parties was $52,129,000 compared to $55,708,000 at December 31, 2022.

		Three months ended				Nine months ended
		September 30,				September 30,
(dollars in thousands)		2023		2022		2023		2022
Amortized cost:
Balance at beginning of period	$	248	$	315	$	279	$	380
Originations of mortgage servicing rights		0		0		0		6
Amortization expense		(10)		(20)		(41)		(91)
Balance at end of period	$	238	$	295	$	238	$	295

Goodwill and Core Deposit Intangible Assets

Goodwill and Core Deposit Intangible Assets

Goodwill arising from acquisitions is not amortized, but is subject to an annual impairment test. This test consists of a qualitative analysis. If the Corporation determines events or circumstances indicate that it is more likely than not that goodwill is impaired, a quantitative analysis must be completed. Analyses may also be performed between annual tests. Significant judgment is applied when goodwill is assessed for impairment. This judgment includes developing cash flow projections, selecting appropriate discount rates, identifying relevant market comparables, incorporating general economic and market conditions, and selecting an appropriate control premium. The Corporation completes its annual goodwill impairment test on October 1st of each year. Based upon a qualitative analysis of goodwill, the Corporation concluded that the amount of recorded goodwill was not impaired as of October 1, 2023. There were no conditions or events that would trigger an analysis or impairment since October 1, 2023.

Core deposit intangibles represent the value assigned to demand, interest checking, money market, and savings accounts acquired as part of an acquisition. The core deposit intangible value represents the future economic benefit of potential cost savings from acquiring core deposits as part of an acquisition compared to the cost of alternative funding sources and the alternative cost to grow a similar core deposit base. The core deposit intangible asset resulting from the merger with Madison Bancorp, Inc. was determined to have a definite life and is being amortized using the sum of the years’ digits method over ten years. All intangible assets must be evaluated for impairment if certain events or changes in circumstances occur. Any impairment write-downs would be recognized as expense on the consolidated statements of income. The core deposit intangible asset is included in other assets on the Consolidated Balance Sheets

Revenue from Contracts with Customers

Revenue from Contracts with Customers

Revenue from contracts with customers that are required to be recognized under FASB ASC Topic 606 - Revenue from Contracts with Customers (ASC 606) is measured based on consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. The Corporation recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer.

The majority of the Corporation’s revenue-generating transactions are not within the scope of ASC 606, including revenue generated from financial instruments, such as our loans, letters of credit, derivatives and investment securities, as well as revenue related to our mortgage servicing activities, as these activities are subject to other U.S. Generally Accepted Accounting Principles (GAAP) discussed elsewhere within our disclosures. Descriptions of our revenue-generating activities that are within the scope of ASC 606, which are presented in our consolidated statements of income as components of non-interest income are as follows:

Trust and investment service fees: The Corporation provides trust, investment management custody and irrevocable life insurance trust services to clients. Such services are rendered in accordance with the underlying contracts for which fees are earned. The Corporation’s performance obligations are generally satisfied, and the related revenue recognized, over the period in which the service is provided. Payment for services rendered is primarily received in the following month.

Income from mutual fund, annuity and insurance sales: The Corporation sells mutual funds, annuity and insurance products to its clients. The Corporation’s performance obligation is met upon the signing of the product agreement and, in certain cases, a time component may exist when the client has the right to rescind the agreement with or without penalty. The Corporation recognizes revenues upon delivery of the product or service unless there is a time component in which case revenues are recognized utilizing the expected value method. Payment for services rendered is primarily received in the following month.

Service charges on deposits accounts: These represent general service fees for monthly account maintenance and activity- or transaction based fees and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Other service charges include revenue from processing wire transfers, cashier’s checks and other services. Revenue is recognized when the performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to the clients’ accounts.

Other noninterest income: The Corporation evaluated individual components of other noninterest income, such as credit card merchant fees, credit and gift card fees and ATM fees. Debit card income is primarily comprised of interchange fees earned whenever the Corporation’s debit cards are processed through payment networks, such as Visa. Credit and gift card income is realized through a third party provider who issues cards as private label in the Corporation’s name. ATM fees are primarily generated when a non-Corporation cardholder uses a Corporation ATM. The income is primarily comprised as a percentage of interchange fees earned whenever the issuer’s card is processed through card payment networks, such as Visa or Pulse. Merchant services income is realized through a referral agreement with a third party service provider. Amounts paid to the Corporation under the agreement are from fees charged to merchants for processing their debit card transactions. The Corporation’s performance obligation for these fees are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received within a one to three day lag or in the following month.

Per Share Data

Per Share Data

The computation of net income per share is provided in the table below.

	Three months ended				Nine months ended
	September 30,				September 30,
(in thousands, except per share data)	2023		2022		2023		2022
Net income	$	5,917	$	7,154	$	19,520	$	12,160
Weighted average shares outstanding (basic)		9,616		9,545		9,600		9,521
Effect of dilutive stock options		15		23		18		29
Weighted average shares outstanding (diluted)		9,631		9,568		9,618		9,550
Basic earnings per share	$	0.62	$	0.75	$	2.03	$	1.28
Diluted earnings per share	$	0.61	$	0.75	$	2.03	$	1.27

Comprehensive Income

Comprehensive IncomeAccounting principles generally accepted in the United States require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the shareholders’ equity section of the balance sheet, such items, along with net income, are components of comprehensive income.

Cash Flow Information

Cash Flow Information

For purposes of the consolidated statements of cash flows, the Corporation considers interest bearing deposits with banks, cash and due from banks, and federal funds sold to be cash and cash equivalents.

Supplemental cash flow information is provided in the table below.

		Nine months ended
		September 30,
(dollars in thousands)		2023		2022
Cash paid during the period for:
Income taxes	$	7,630	$	531
Interest	$	22,563	$	5,044
Noncash investing and financing activities:
Transfer of loans to foreclosed real estate	$	0	$	479
Transfer of loans to held for sale	$	2,018	$	16,617
Transfer of premises and equipment to assets held for sale	$	1,269	$	109
Initial recognition of operating lease right-of-use assets	$	0	$	2,061
Initial recognition of operating lease liabilities	$	0	$	2,061

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Pronouncements Adopted in 2023

On January 1, 2023, the Corporation adopted ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with Topic 842 on leases. In addition, ASC 326 made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities management does not intend to sell or believes that it is more likely than not they will be required to sell. The Corporation adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and off-balance-sheet (OBS) credit exposures. Results for reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Corporation recorded a net decrease to retained earnings of $2.1 million as of January 1, 2023 for the cumulative effect of adopting ASC 326. The transition adjustment included a $927,000 increase to ACL for loans, a $1.9 million increase in the ACL for unfunded commitments and a $667,000 increase in deferred tax assets.

At adoption, the Corporation changed the way the loan portfolio is segmented and now segments the portfolio based on collateral. Previously the Corporation segmented the loan portfolio based on industry.

The following table illustrates the impact of ASC 326.

			January 1, 2023
					Reclassification to CECL		Post-CECL Adoption
(dollars in thousands)			Pre-CECL Adoption		Portfolio Segmentation		Portfolio Segmentation
Loans:
	Builder & developer	$	128,327	$	(128,327)	$	0
	Commercial real estate investor		367,366		(367,366)		0
	Commercial real estate-construction		0		144,782		144,782
	Commercial real estate-owner occupied		0		344,941		344,941
	Commercial real estate-non-owner occupied		0		445,408		445,408
	Residential real estate investor		263,262		(263,262)		0
	Residential real estate-construction		0		26,055		26,055
	Residential real estate-revolving		0		103,509		103,509
	Residential real estate-multi family		0		118,141		118,141
	Residential real estate-other		0		243,092		243,092
	Commercial		0		191,665		191,665
	Hotel/Motel		94,471		(94,471)		0
	Wholesale & retail		60,672		(60,672)		0
	Manufacturing		86,593		(86,593)		0
	Agriculture		91,449		(91,449)		0
	Service		73,094		(73,094)		0
	Commercial other		209,116		(209,116)		0
	Consumer		0		15,264		15,264
	Residential mortgage		135,340		(135,340)		0
	Home equity		98,030		(98,030)		0
	Consumer other		25,137		(25,137)		0
	Total	$	1,632,857	$	0	$	1,632,857

In March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings (TDRs), while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. ASU 2022-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. ASU 2022-02 did not have a material impact on the Corporation’s consolidated financial statements.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

Summary of Significant Accounting Policies [Abstract]

Summary of Changes in Mortgage Service Rights

		Three months ended				Nine months ended
		September 30,				September 30,
(dollars in thousands)		2023		2022		2023		2022
Amortized cost:
Balance at beginning of period	$	248	$	315	$	279	$	380
Originations of mortgage servicing rights		0		0		0		6
Amortization expense		(10)		(20)		(41)		(91)
Balance at end of period	$	238	$	295	$	238	$	295

Schedule of Computation of Net Income Per Share

	Three months ended				Nine months ended
	September 30,				September 30,
(in thousands, except per share data)	2023		2022		2023		2022
Net income	$	5,917	$	7,154	$	19,520	$	12,160
Weighted average shares outstanding (basic)		9,616		9,545		9,600		9,521
Effect of dilutive stock options		15		23		18		29
Weighted average shares outstanding (diluted)		9,631		9,568		9,618		9,550
Basic earnings per share	$	0.62	$	0.75	$	2.03	$	1.28
Diluted earnings per share	$	0.61	$	0.75	$	2.03	$	1.27

Schedule of Supplemental Cash Flow Information

		Nine months ended
		September 30,
(dollars in thousands)		2023		2022
Cash paid during the period for:
Income taxes	$	7,630	$	531
Interest	$	22,563	$	5,044
Noncash investing and financing activities:
Transfer of loans to foreclosed real estate	$	0	$	479
Transfer of loans to held for sale	$	2,018	$	16,617
Transfer of premises and equipment to assets held for sale	$	1,269	$	109
Initial recognition of operating lease right-of-use assets	$	0	$	2,061
Initial recognition of operating lease liabilities	$	0	$	2,061

Schedule of Impact from Adoption of Pronouncement

			January 1, 2023
					Reclassification to CECL		Post-CECL Adoption
(dollars in thousands)			Pre-CECL Adoption		Portfolio Segmentation		Portfolio Segmentation
Loans:
	Builder & developer	$	128,327	$	(128,327)	$	0
	Commercial real estate investor		367,366		(367,366)		0
	Commercial real estate-construction		0		144,782		144,782
	Commercial real estate-owner occupied		0		344,941		344,941
	Commercial real estate-non-owner occupied		0		445,408		445,408
	Residential real estate investor		263,262		(263,262)		0
	Residential real estate-construction		0		26,055		26,055
	Residential real estate-revolving		0		103,509		103,509
	Residential real estate-multi family		0		118,141		118,141
	Residential real estate-other		0		243,092		243,092
	Commercial		0		191,665		191,665
	Hotel/Motel		94,471		(94,471)		0
	Wholesale & retail		60,672		(60,672)		0
	Manufacturing		86,593		(86,593)		0
	Agriculture		91,449		(91,449)		0
	Service		73,094		(73,094)		0
	Commercial other		209,116		(209,116)		0
	Consumer		0		15,264		15,264
	Residential mortgage		135,340		(135,340)		0
	Home equity		98,030		(98,030)		0
	Consumer other		25,137		(25,137)		0
	Total	$	1,632,857	$	0	$	1,632,857

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Securities (Tables)

9 Months Ended

Sep. 30, 2023

Securities [Abstract]

Summary of Securities Available-for-Sale

	Amortized			Allowance for	Gross Unrealized				Fair
(dollars in thousands)	Cost			Credit Losses	Gains		Losses		Value
September 30, 2023
Debt securities:
U.S. Treasury notes	$	19,804	$	0	$	0	$	(595)	$	19,209
U.S. agency		13,951		0		0		(1,518)		12,433
U.S. agency mortgage-backed, residential		284,345		0		4		(40,770)		243,579
State and municipal		35,399		0		3		(7,336)		28,066
Corporates		38,195		0		0		(5,826)		32,369
Total debt securities	$	391,694	$	0	$	7	$	(56,045)	$	335,656

	Amortized		Gross Unrealized				Fair
(dollars in thousands)	Cost		Gains		Losses		Value
December 31, 2022
Debt securities:
U.S. Treasury notes	$	19,688	$	0	$	(588)	$	19,100
U.S. agency		12,750		0		(1,470)		11,280
U.S. agency mortgage-backed, residential		283,436		43		(33,377)		250,102
State and municipal		35,517		37		(6,155)		29,399
Corporates		39,531		0		(3,955)		35,576
Total debt securities	$	390,922	$	80	$	(45,545)	$	345,457

Schedule of Gross Realized Gains and Losses on Sales of Securities Available-for-Sale

	Three months ended				Nine months ended
	September 30,				September 30,
(dollars in thousands)	2023		2022		2023		2022
Proceeds	$	0	$	0	$	4,253	$	0
Gross gains		0		0		0		0
Gross losses		0		0		(388)		0
Tax benefit		0		0		91		0

Schedule of Amortized Cost and Estimated Fair Value of Debt Securities

	Available-for-sale
	Amortized		Fair
(dollars in thousands)	Cost		Value
Due in one year or less	$	9,908	$	9,698
Due after one year through five years		112,944		103,561
Due after five years through ten years		230,190		191,357
Due after ten years		38,652		31,040
Total debt securities	$	391,694	$	335,656

Schedule of Gross Unrealized Losses and Fair Value, Aggregated by Investment Category and Length of Time

	Less than 12 months					12 months or more					Total
	Number of	Fair		Unrealized		Number of	Fair		Unrealized		Number of	Fair		Unrealized
(dollars in thousands)	Securities	Value		Losses		Securities	Value		Losses		Securities	Value		Losses
September 30, 2023
Debt securities:
U.S. Treasury notes	0	$	0	$	0	4	$	19,209	$	(595)	4	$	19,209	$	(595)
U.S. agency	3		1,913		(38)	9		10,520		(1,480)	12		12,433		(1,518)
U.S. agency mortgage-backed, residential	39		31,338		(1,065)	206		205,626		(39,705)	245		236,964		(40,770)
State and municipal	7		2,608		(215)	33		24,065		(7,121)	40		26,673		(7,336)
Corporates	2		1,169		(40)	30		29,699		(5,786)	32		30,868		(5,826)
Total temporarily impaired debt
securities, available-for-sale	51	$	37,028	$	(1,358)	282	$	289,119	$	(54,687)	333	$	326,147	$	(56,045)
December 31, 2022
Debt securities:
U.S. Treasury notes	4	$	19,100	$	(588)	0	$	0	$	0	4	$	19,100	$	(588)
U.S. agency	7	$	7,594	$	(656)	3	$	3,685	$	(814)	10	$	11,279	$	(1,470)
U.S. agency mortgage-backed, residential	147		140,409		(11,071)	72		102,061		(22,284)	219		242,470		(33,355)
State and municipal	6		2,334		(210)	35		25,121		(5,945)	41		27,455		(6,155)
Corporates	11		11,610		(831)	20		20,665		(3,124)	31		32,275		(3,955)
Total temporarily impaired debt
securities, available-for-sale	175	$	181,047	$	(13,356)	130	$	151,532	$	(32,167)	305	$	332,579	$	(45,523)

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Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2023

Loans and Allowance for Credit Losses [Abstract]

Schedule of Loan Portfolio Composition

	September 30,		% Total
(dollars in thousands)	2023		Loans
Commercial loans	$	171,490		10.1
Commercial real estate:
Construction		184,960		10.9
Owner occupied		347,857		20.4
Non-owner occupied		455,584		26.7
Residential real estate:
Construction		29,132		1.7
Revolving		105,169		6.2
Multi family		123,465		7.2
Other		273,170		16.0
Consumer		13,553		0.8
Gross Loans		1,704,380		100.0
Less: Allowance for credit losses		21,449
Net Loans	$	1,682,931

The table below provides the composition of the loan portfolio at December 31, 2022. The portfolio is comprised of two segments, commercial and consumer loans. The commercial loan segment is disaggregated by industry class which allows the Corporation to monitor risk and performance.

Those industries representing the largest dollar investment and most risk are listed separately. The “Other” commercial loans category is comprised of various industries. The consumer related segment is comprised of residential mortgages, home equity and other consumer loans.

	December 31,		% Total
(dollars in thousands)	2022		Loans
Builder & developer	$	128,327		7.9
Commercial real estate investor		367,366		22.5
Residential real estate investor		263,262		16.1
Hotel/Motel		94,471		5.8
Wholesale & retail		60,672		3.7
Manufacturing		86,593		5.3
Agriculture		91,449		5.6
Service		73,094		4.5
Other		209,116		12.8
Total commercial related loans		1,374,350		84.2
Residential mortgages		135,340		8.3
Home equity		98,030		6.0
Other		25,137		1.5
Total consumer related loans		258,507		15.8
Total loans	$	1,632,857		100.0

Summary of Allowance for Credit Losses by Segment

The following tables presents the activity in the allowance for credit losses by segment as of and for the three and nine months ended September 30, 2023.

(dollars in thousands)		Balance, July 1, 2023		Provision for credit losses		Loan charge-offs		Loan recoveries		Balance, September 30, 2023
Commercial loans	$	3,041	$	(614)	$	(190)	$	768	$	3,005
Commercial real estate:
Construction		3,542		451		0		0		3,993
Owner occupied		3,877		236		0		1		4,114
Non-owner occupied		6,125		36		0		0		6,161
Residential real estate:
Construction		93		(5)		0		0		88
Revolving		476		5		0		1		482
Multi family		1,907		75		0		0		1,982
Other		1,448		(43)		0		51		1,456
Consumer		172		(13)		(3)		12		168
Total	$	20,681	$	128	$	(193)	$	833	$	21,449

(dollars in thousands)		Balance, January 1, 2023 - Pre ASC 326 Adoption		Impact of adopting ASC 326		Provision for credit losses		Loan charge-offs		Loan recoveries		Balance, September 30, 2023
Commercial loans	$	4,783	$	(235)	$	(1,212)	$	(1,248)	$	917	$	3,005
Commercial real estate:
Construction		1,829		1,121		1,043		0		0		3,993
Owner occupied		4,341		(69)		484		(683)		41		4,114
Non-owner occupied		6,387		(468)		242		0		0		6,161
Residential real estate:
Construction		230		(144)		2		0		0		88
Revolving		417		192		(234)		(27)		134		482
Multi family		1,205		194		583		0		0		1,982
Other		1,511		169		(293)		0		69		1,456
Consumer		33		167		(26)		(27)		21		168
Total	$	20,736	$	927	$	589	$	(1,985)	$	1,182	$	21,449

The following table presents the activity in and the composition of the allowance for loan losses in accordance with previously applicable GAAP by loan segment and class detail as of and for the three and nine months ended September 30, 2022.

	Allowance for Loan Losses
	July 1, 2022								September 30, 2022
(dollars in thousands)	Balance		Charge-offs		Recoveries		Provision		Balance
Builder & developer	$	2,290	$	0	$	12	$	(176)	$	2,126
Commercial real estate investor		5,766		(22)		0		(13)		5,731
Residential real estate investor		3,483		(52)		1		(670)		2,762
Hotel/Motel		1,262		(10)		179		(345)		1,086
Wholesale & retail		518		0		0		17		535
Manufacturing		858		0		0		128		986
Agriculture		1,454		0		40		150		1,644
Service		827		(248)		1		443		1,023
Other commercial		5,936		0		6		(126)		5,816
Total commercial related loans		22,394		(332)		239		(592)		21,709
Residential mortgage		212		0		0		31		243
Home equity		195		0		24		(19)		200
Other consumer		75		(3)		6		2		80
Total consumer related loans		482		(3)		30		14		523
Unallocated		(11)		0		0		11		0
Total	$	22,865	$	(335)	$	269	$	(567)	$	22,232

	Allowance for Loan Losses
	January 1, 2022								September 30, 2022
(dollars in thousands)	Balance		Charge-offs		Recoveries		Provision		Balance
Builder & developer	$	2,408	$	0	$	12	$	(294)	$	2,126
Commercial real estate investor		5,647		(1,249)		0		1,333		5,731
Residential real estate investor		3,493		(52)		10		(689)		2,762
Hotel/Motel		968		(1,669)		179		1,608		1,086
Wholesale & retail		1,989		0		0		(1,454)		535
Manufacturing		883		0		0		103		986
Agriculture		1,307		(535)		40		832		1,644
Service		981		(736)		1		777		1,023
Other commercial		4,656		(3)		30		1,133		5,816
Total commercial related loans		22,332		(4,244)		272		3,349		21,709
Residential mortgage		186		0		0		57		243
Home equity		191		(49)		26		32		200
Other consumer		74		(6)		17		(5)		80
Total consumer related loans		451		(55)		43		84		523
Unallocated		(1)		0		0		1		0
Total	$	22,782	$	(4,299)	$	315	$	3,434	$	22,232

Summary of Non-Accrual Loans

		With a		Without a		Related		Interest Income
(dollars in thousands)		Related Allowance		Related Allowance		Allowance		Three months ended		Nine months ended
September 30, 2023
Commercial loans	$	1,988	$	1,996	$	1,092	$	136	$	381
Commercial real estate:
Construction				40		0		0		107
Owner occupied		0		2,043		0		0		53
Non-owner occupied		0		204		0		0		0
Residential real estate:
Construction		0		0		0		0		36
Revolving		0		506		0		0		27
Multi family		0		0		0		0		0
Other		0		828		0		0		38
Consumer		0		0		0		0		0
Total	$	1,988	$	5,617	$	1,092	$	136	$	642

Summary of Impaired Loans and Average Impaired Loans

The table below presents a summary of impaired loans at December 31, 2022 . Generally, impaired loans are all loans risk rated nonaccrual or classified troubled debt restructuring. An allowance is established for those individual loans where the Corporation has doubt as to the full recovery of the outstanding principal balance. Typically, impaired consumer related loans are partially or fully charged-off, eliminating the need for specific allowance. The recorded investment represents outstanding unpaid principal loan balances adjusted for payments collected on a non-cash basis and charged-offs.

	With No Allowance				With A Related Allowance						Total
	Recorded		Unpaid		Recorded		Unpaid		Related		Recorded		Unpaid
(dollars in thousands)	Investment		Principal		Investment		Principal		Allowance		Investment		Principal
December 31, 2022
Builder & developer	$	1,901	$	2,644	$	44	$	44	$	44	$	1,945	$	2,688
Commercial real estate investor		500		500		0		0		0		500		500
Residential real estate investor		647		665		209		215		152		856		880
Hotel/Motel		0		0		0		0		0		0		0
Wholesale & retail		0		0		0		0		0		0		0
Manufacturing		2,783		2,877		182		183		33		2,965		3,060
Agriculture		164		210		748		930		655		912		1,140
Service		0		0		0		0		0		0		0
Other commercial		1,836		3,037		1,600		2,338		1,600		3,436		5,375
Total impaired commercial related loans		7,831		9,933		2,783		3,710		2,484		10,614		13,643
Residential mortgage		1,112		1,115		0		0		0		1,112		1,115
Home equity		457		512		0		0		0		457		512
Other consumer		0		0		0		0		0		0		0
Total impaired consumer related loans		1,569		1,627		0		0		0		1,569		1,627
Total impaired loans	$	9,400	$	11,560	$	2,783	$	3,710	$	2,484	$	12,183	$	15,270

The tables below presents a summary of average impaired loans and related interest income that was included for the three and nine months ended September 30, 2022. Interest income on loans with no related allowance is the result of interest collected on a cash basis.

	With No Related Allowance				With A Related Allowance				Total
	Average		Total		Average		Total		Average		Total
	Recorded		Interest		Recorded		Interest		Recorded		Interest
(dollars in thousands)	Investment		Income		Investment		Income		Investment		Income
Three months ended September 30, 2022
Builder & developer	$	982	$	0	$	1,492	$	0	$	2,474	$	0
Commercial real estate investor		2,855		4		0		0		2,855		4
Residential real estate investor		711		4		213		0		924		4
Hotel/Motel		0		0		0		0		0		0
Wholesale & retail		0		0		0		0		0		0
Manufacturing		4,023		0		0		0		4,023		0
Agriculture		405		0		748		0		1,153		0
Service		0		0		0		0		0		0
Other commercial		0		0		4,179		0		4,179		0
Total impaired commercial related loans		8,976		8		6,632		0		15,608		8
Residential mortgage		842		6		0		0		842		6
Home equity		470		0		0		0		470		0
Other consumer		44		15		0		0		44		15
Total impaired consumer related loans		1,356		21		0		0		1,356		21
Total impaired loans	$	10,332	$	29	$	6,632	$	0	$	16,964	$	29

	With No Related Allowance				With A Related Allowance				Total
	Average		Total		Average		Total		Average		Total
	Recorded		Interest		Recorded		Interest		Recorded		Interest
(dollars in thousands)	Investment		Income		Investment		Income		Investment		Income
Nine months ended September 30, 2022
Builder & developer	$	986	$	0	$	746	$	0	$	1,732	$	0
Commercial real estate investor		2,993		18		469		0		3,462		18
Residential real estate investor		466		27		106		0		572		27
Hotel/Motel		6,067		0		0		0		6,067		0
Wholesale & retail		0		0		0		0		0		0
Manufacturing		4,478		37		0		0		4,478		37
Agriculture		1,482		501		771		0		2,253		501
Service		0		0		486		0		486		0
Other commercial		996		177		3,596		0		4,592		177
Total impaired commercial related loans		17,468		760		6,174		0		23,642		760
Residential mortgage		452		13		280		8		732		21
Home equity		459		27		0		0		459		27
Other consumer		69		15		0		0		69		15
Total impaired consumer related loans		980		55		280		8		1,260		63
Total impaired loans	$	18,448	$	815	$	6,454	$	8	$	24,902	$	823

Summary of Allowance Amount for Loans Individually and Collectively Evaluated for Impairment

	Allowance for Loan Losses						Loans
	Individually		Collectively				Individually		Collectively
	Evaluated For		Evaluated For				Evaluated For		Evaluated For
(dollars in thousands)	Impairment		Impairment		Balance		Impairment		Impairment		Balance
December 31, 2022
Builder & developer	$	44	$	1,725	$	1,769	$	1,945	$	126,382	$	128,327
Commercial real estate investor		0		4,858		4,858		500		366,866		367,366
Residential real estate investor		152		2,661		2,813		856		262,406		263,262
Hotel/Motel		0		1,658		1,658		0		94,471		94,471
Wholesale & retail		0		488		488		0		60,672		60,672
Manufacturing		33		897		930		2,965		83,628		86,593
Agriculture		655		990		1,645		912		90,537		91,449
Service		0		1,064		1,064		0		73,094		73,094
Other commercial		1,600		3,352		4,952		3,436		205,680		209,116
Total commercial related		2,484		17,693		20,177		10,614		1,363,736		1,374,350
Residential mortgage		0		270		270		1,112		134,228		135,340
Home equity		0		207		207		457		97,573		98,030
Other consumer		0		82		82		0		25,137		25,137
Total consumer related		0		559		559		1,569		256,938		258,507
Unallocated		0		0		0		0		0		0
Total	$	2,484	$	18,252	$	20,736	$	12,183	$	1,620,674	$	1,632,857

Summary of Loan Risk Ratings by Loan Class

	Term Loans Amortized Cost Basis by Origination Year															Revolving Loans
														Revolving Loans		converted to Term
														Amortized Cost		Loans Amortized
(dollars in thousands)		2023		2022		2021		2020		2019		Prior		Basis		Cost Basis		Total
Commercial loans
Pass	$	14,196	$	44,255	$	15,949	$	4,712	$	10,760	$	9,893	$	51,716	$	0	$	151,481
Special Mention		0		0		50		0		563		137		3,374		0		4,124
Substandard		38		649		2,784		13		12		1,168		7,237		0		11,901
Nonaccrual		0		360		599		0		625		1,000		1,400		0		3,984
Total		14,234		45,264		19,382		4,725		11,960		12,198		63,727		0		171,490
Gross write-offs		0		(26)		0		(15)		0		(968)		(239)		0		(1,248)
Commercial real estate:
Construction
Pass	$	41,980	$	74,921	$	31,133	$	11,922	$	7,966	$	8,474	$	2,831	$	0	$	179,227
Special Mention		0		605		0		1,679		0		0		1,000		0		3,284
Substandard		0		0		0		2,409		0		0		0		0		2,409
Nonaccrual		0		0		0		0		0		40		0		0		40
Total		41,980		75,526		31,133		16,010		7,966		8,514		3,831		0		184,960
Gross write-offs		0		0		0		0		0		0		0		0		0
Owner occupied
Pass	$	33,433	$	60,051	$	66,381	$	24,657	$	34,689	$	94,644	$	16,803	$	0	$	330,658
Special Mention		140		0		0		2,519		0		4,151		0		0		6,810
Substandard		250		0		1,263		0		0		6,404		429		0		8,346
Nonaccrual		0		0		1,785		0		0		258		0		0		2,043
Total		33,823		60,051		69,429		27,176		34,689		105,457		17,232		0		347,857
Gross write-offs		0		0		0		0		0		(683)		0		0		(683)
Non-owner occupied
Pass	$	33,056	$	120,640	$	111,199	$	63,341	$	11,542	$	111,059	$	1,439	$	0	$	452,276
Special Mention		0		0		1,197		0		0		950		0		0		2,147
Substandard		0		0		0		0		0		957		0		0		957
Nonaccrual		0		0		0		50		0		154		0		0		204
Total		33,056		120,640		112,396		63,391		11,542		113,120		1,439		0		455,584
Gross write-offs		0		0		0		0		0		0		0		0		0
Residential real estate:
Construction
Pass	$	8,388	$	13,824	$	2,155	$	972	$	1,556	$	540	$	1,697	$	0	$	29,132
Special Mention		0		0		0		0		0		0		0		0		0
Substandard		0		0		0		0		0		0		0		0		0
Nonaccrual		0		0		0		0		0		0		0		0		0
Total		8,388		13,824		2,155		972		1,556		540		1,697		0		29,132
Gross write-offs		0		0		0		0		0		0		0		0		0
Revolving
Pass	$	9,616	$	16,462	$	1,099	$	333	$	638	$	2,102	$	74,413	$	0	$	104,663
Special Mention		0		0		0		0		0		0		0		0		0
Substandard		0		0		0		0		0		0		0		0		0
Nonaccrual		0		34		0		0		0		0		472		0		506
Total		9,616		16,496		1,099		333		638		2,102		74,885		0		105,169
Gross write-offs		0		0		0		0		0		(8)		(19)		0		(27)

Multi family
Pass	$	5,418	$	26,836	$	32,980	$	19,625	$	23,934	$	9,442	$	1,003	$	0	$	119,238
Special Mention		0		0		0		0		0		1,800		0		0		1,800
Substandard		0		0		0		0		0		2,427		0		0		2,427
Nonaccrual		0		0		0		0		0		0		0		0		0
Total		5,418		26,836		32,980		19,625		23,934		13,669		1,003		0		123,465
Gross write-offs		0		0		0		0		0		0		0		0		0
Other
Pass	$	50,055	$	63,283	$	43,265	$	38,398	$	18,221	$	56,723	$	956	$	0	$	270,901
Special Mention		0		0		0		52		0		1,012		42		0		1,106
Substandard		0		0		0		130		0		205		0		0		335
Nonaccrual		0		0		292		0		0		536		0		0		828
Total		50,055		63,283		43,557		38,580		18,221		58,476		998		0		273,170
Gross write-offs		0		0		0		0		0		0		0		0		0
Consumer
Pass	$	3,843	$	3,622	$	1,708	$	204	$	111	$	277	$	3,788	$	0	$	13,553
Special Mention		0		0		0		0		0		0		0		0		0
Substandard		0		0		0		0		0		0		0		0		0
Nonaccrual		0		0		0		0		0		0		0		0		0
Total		3,843		3,622		1,708		204		111		277		3,788		0		13,553
Gross write-offs		0		(2)		0		(2)		0		(1)		(22)		0		(27)
Total Loans
Pass	$	199,985	$	423,894	$	305,869	$	164,164	$	109,417	$	293,154	$	154,646	$	0	$	1,651,129
Special Mention		140		605		1,247		4,250		563		8,050		4,416		0		19,271
Substandard		288		649		4,047		2,552		12		11,161		7,666		0		26,375
Nonaccrual		0		394		2,676		50		625		1,988		1,872		0		7,605
Total		200,413		425,542		313,839		171,016		110,617		314,353		168,600		0		1,704,380
Total Gross Charge-Offs	$	0	$	(28)	$	0	$	(17)	$	0	$	(1,660)	$	(280)	$	0	$	(1,985)

			Special
(dollars in thousands)	Pass		Mention		Substandard		Nonaccrual		Total
December 31, 2022
Builder & developer	$	124,572	$	1,010	$	972	$	1,773	$	128,327
Commercial real estate investor		367,144		0		0		222		367,366
Residential real estate investor		262,406		0		0		856		263,262
Hotel/Motel		89,710		0		4,761		0		94,471
Wholesale & retail		59,930		56		686		0		60,672
Manufacturing		81,552		1,444		632		2,965		86,593
Agriculture		87,896		2,260		381		912		91,449
Service		68,373		384		4,337		0		73,094
Other		192,194		4,934		8,552		3,436		209,116
Total commercial related loans		1,333,777		10,088		20,321		10,164		1,374,350
Residential mortgage		134,850		0		141		349		135,340
Home equity		97,573		0		0		457		98,030
Other		25,137		0		0		0		25,137
Total consumer related loans		257,560		0		141		806		258,507
Total loans	$	1,591,337	$	10,088	$	20,462	$	10,970	$	1,632,857

Summary of Past Due Loans, Nonaccrual Loans and Current Loans by Loan Segment and Class

						≥ 90 Days				Total Past
		30-59 Days		60-89 Days		Past Due				Due and
(dollars in thousands)		Past Due		Past Due		and Accruing		Nonaccrual		Nonaccrual		Current		Total Loans
September 30, 2023
Commercial loans	$	50	$	0	$	0	$	3,984	$	4,034	$	167,456	$	171,490
Commercial real estate:
Construction		0		1,679		0		40		1,719		183,241		184,960
Owner occupied		0		0		0		2,043		2,043		345,814		347,857
Non-owner occupied		0		0		0		204		204		455,380		455,584
Residential real estate:
Construction		0		0		0		0		0		29,132		29,132
Revolving		246		0		0		506		752		104,417		105,169
Multi family		0		0		0		0		0		123,465		123,465
Other		3		0		0		828		831		272,339		273,170
Consumer		24		0		0		0		24		13,529		13,553
Total	$	323	$	1,679	$	0	$	7,605	$	9,607	$	1,694,773	$	1,704,380

The performance and credit quality of the loan portfolio is also monitored by using an aging schedule that shows the length of time a loan is past due. The table below presents a summary of past due loans, nonaccrual loans and current loans by class segment at December 31, 2022.

					≥ 90 Days
	30-59		60-89		Past Due				Total Past
	Days		Days		and				Due and				Total
(dollars in thousands)	Past Due		Past Due		Accruing		Nonaccrual		Nonaccrual		Current		Loans
December 31, 2022
Builder & developer	$	3,500	$	0	$	0	$	1,773	$	5,273	$	123,054	$	128,327
Commercial real estate investor		0		0		0		222		222		367,144		367,366
Residential real estate investor		0		0		0		856		856		262,406		263,262
Hotel/Motel		0		0		0		0		0		94,471		94,471
Wholesale & retail		0		0		0		0		0		60,672		60,672
Manufacturing		0		0		0		2,965		2,965		83,628		86,593
Agriculture		8		0		0		912		920		90,529		91,449
Service		0		0		0		0		0		73,094		73,094
Other		0		0		0		3,436		3,436		205,680		209,116
Total commercial related loans		3,508		0		0		10,164		13,672		1,360,678		1,374,350
Residential mortgage		207		0		0		349		556		134,784		135,340
Home equity		345		94		0		457		896		97,134		98,030
Other		7		42		0		0		49		25,088		25,137
Total consumer related loans		559		136		0		806		1,501		257,006		258,507
Total loans	$	4,067	$	136	$	0	$	10,970	$	15,173	$	1,617,684	$	1,632,857

Summary of Amortized Cost and Percent of Loans

The following table presents the amortized costs basis of loans at September 30, 2023 that were both experiencing financial difficulty and modified during the prior 3 months, by segment and type of modification. The percentage of the amortized costs basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of loan is also presented below:

		Payment Delay &
(dollars in thousands)		Term Extension	Total Loan Class
September 30, 2023
Commercial real estate:
Construction	$	1,679	0.91	%
Residential real estate:
Multi family		1,800	1.46
Total	$	3,479	0.20	%

The following table presents the amortized costs basis of loans at September 30, 2023 that were both experiencing financial difficulty and modified during the prior nine months, by segment and type of modification. The percentage of the amortized costs basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of loan is also presented below:

		Payment Delay &		Term
(dollars in thousands)		Term Extension		Extension	Total Loan Class
September 30, 2023
Commercial loans	$	0	$	1,748	1.02	%
Commercial real estate:
Construction		1,679		0	0.91
Owner occupied		0		1,785	0.51
Residential real estate:
Multi family		1,800		0	1.46
Total	$	3,479	$	3,533	0.41	%

Summary of Financial Effect of Loan Modifications

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three months ended September 30, 2023:

	Weighted-Average
	Payment Delay &
(dollars in thousands)	Term Extension (months)
September 30, 2023
Commercial real estate:
Construction	4
Residential real estate:
Multi family	4

The Corporation has not committed to lend additional amounts to the borrowers included in the previous table.

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the nine months ended September 30, 2023:

		Weighted-Average
	Weighted-Average	Payment Delay &
(dollars in thousands)	Term Extension (months)	Term Extension (months)
September 30, 2023
Commercial loans	8	0
Commercial real estate:
Construction	0	4
Owner occupied	8	0
Residential real estate:
Multi family	0	4

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Deposits (Tables)

9 Months Ended

Sep. 30, 2023

Deposits [Abstract]

Schedule of Composition of Deposits

	September 30,		December 31,
(dollars in thousands)	2023		2022
Noninterest bearing demand	$	398,486	$	463,853
Interest bearing demand		271,192		289,298
Money market		651,655		646,702
Savings		141,316		161,228
Time deposits less than $100		229,638		210,331
Time deposits $100 to $250		145,467		123,002
Time deposits $250 or more		68,624		48,805
Total deposits	$	1,906,378	$	1,943,219

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Short-Term Borrowings and Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2023

Short-Term Borrowings and Long-Term Debt [Abstract]

Summary of Long-Term Debt

	September 30,		December 31,
(dollars in thousands)	2023		2022
Junior subordinated debt
Due 2034, 7.69%, floating rate based on 3 month
SOFR plus 2.02%, callable quarterly	$	3,093	$	3,093
Due 2036, 7.11% floating rate based on 3 month
SOFR plus 1.54%, callable quarterly		7,217		7,217
Lease obligations included in long-term debt:
Finance lease liabilities		1,218		1,240
Total long term debt and junior subordinated debt	$	11,528	$	11,550
Subordinated notes
Due 2030, 4.50% fixed rate, callable on or after December 2025		30,825		30,764
Total long-term debt	$	42,353	$	42,314

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Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Components of Lease Expense

	Three months ended
	September 30,
(dollars in thousands)	2023		2022
Operating lease cost	$	171	$	190
Finance lease cost:
Amortization of right-of-use assets	$	12	$	12
Interest on lease liability		11		12
Total finance lease cost	$	23	$	24
Total lease cost	$	194	$	214

	Nine months ended
	September 30,
(dollars in thousands)	2023		2022
Operating lease cost	$	519	$	581
Finance lease cost:
Amortization of right-of-use assets	$	36	$	36
Interest on lease liability		33		36
Total finance lease cost	$	69	$	72
Total lease cost	$	588	$	653

Supplemental Cash Flow Information Related to Leases

	Nine months ended
	September 30,
	2023		2022
Operating cash flows from operating leases	$	540	$	547
Operating cash flows from financing leases		33		35
Financing cash flows from financing leases		24		21
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		0		2,061
Finance leases		0		0

Supplemental Balance Sheet Information Related to Leases

	September 30,		December 31,
	2023		2022
Assets:
Operating leases right-of-use assets	$	2,618	$	3,072
Finance leases assets		959		994
Total lease assets	$	3,577	$	4,066
Liabilities:
Operating	$	2,726	$	3,204
Financing		1,218		1,240
Total lease liabilities	$	3,944	$	4,444
Weighted Average Remaining Lease Term (years)
Operating leases		6.6		6.9
Finance leases		20.4		21.2
Weighted Average Discount Rate
Operating leases		2.08%		2.14%
Finance leases		3.69%		3.69%

Future Minimum Payments for Financing Leases and Operating Leases

(dollars in thousands:)	September 30, 2023
Year Ending December 31,	Operating Leases		Finance Leases
2023	$	162	$	19
2024		638		75
2025		430		79
2026		324		80
2027		314		80
Thereafter		1,037		1,429
Total lease payments		2,905		1,762
Less imputed interest		(179)		(544)
Total	$	2,726	$	1,218

(dollars in thousands:)	December 31, 2022
Year Ending December 31,	Operating Leases		Finance Leases
2023	$	701	$	75
2024		638		75
2025		417		79
2026		324		80
2027		314		80
Thereafter		1,036		1,429
Total lease payments		3,430		1,818
Less imputed interest		(226)		(578)
Total	$	3,204	$	1,240

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Regulatory Matters (Tables)

9 Months Ended

Sep. 30, 2023

Regulatory Matters [Abstract]

Schedule of Risk-Based Capital Ratios and Leverage Ratios

									To Be Well Capitalized Under
					Required for Capital				Prompt Corrective Action
	Actual (1)				Adequacy Purposes (2) (3)				Provisions (2)
(dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Codorus Valley Bancorp, Inc. (consolidated)
at September 30, 2023
Capital ratios:
Common equity Tier 1	$	223,708	12.52	%	$	125,037	7.00	%	$	n/a	n/a	%
Tier 1 risk based		233,708	13.08			151,831	8.50			n/a	n/a
Total risk based		285,982	16.01			187,556	10.50			n/a	n/a
Leverage		233,708	10.50			88,992	4.00			n/a	n/a
at December 31, 2022
Capital ratios:
Common equity Tier 1	$	209,540	12.04	%	$	121,871	7.00	%	$	n/a	n/a	%
Tier 1 risk based		219,540	12.61			147,986	8.50			n/a	n/a
Total risk based		271,040	15.57			182,806	10.50			n/a	n/a
Leverage		219,540	9.77			89,863	4.00			n/a	n/a
PeoplesBank, A Codorus Valley Company
at September 30, 2023
Capital ratios:
Common equity Tier 1	$	260,933	14.63	%	$	124,818	7.00	%	$	115,903	6.50	%
Tier 1 risk based		260,933	14.63			151,565	8.50			142,649	8.00
Total risk based		282,382	15.84			187,227	10.50			178,312	10.00
Leverage		260,933	11.75			88,852	4.00			111,065	5.00
at December 31, 2022
Capital ratios:
Common equity Tier 1	$	245,896	14.15	%	$	121,667	7.00	%	$	112,976	6.50	%
Tier 1 risk based		245,896	14.15			147,738	8.50			139,048	8.00
Total risk based		266,632	15.34			182,500	10.50			173,810	10.00
Leverage		245,896	10.96			89,705	4.00			112,131	5.00

(1) Net unrealized gains and losses on securities available-for-sale, net of taxes, are disregarded for capital ratio computation purposes in accordance with federal regulatory banking guidelines.

(2) The Corporation is currently not subject to the regulatory capital requirements imposed by Basel III on bank holding companies because the Corporation's consolidated assets did not exceed $3.0 billion as of September 30, 2023 and therefore qualified as a small bank holding company.

(3) Ratio includes Capital Conservation Buffer of 2.50%, except Leverage Ratio, for which the Capital Conservation Buffer does not apply.

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Fair Value of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value of Assets and Liabilities [Abstract]

Schedule of Assets Measured at Fair Value on Recurring Basis

			Fair Value Measurements
(dollars in thousands)	Total		(Level 1) ‎Quoted Prices in ‎Active Markets for ‎Identical Assets		(Level 2) ‎Significant Other ‎Observable Inputs		(Level 3) ‎Significant Other ‎Unobservable Inputs
September 30, 2023
Securities available-for-sale:
U.S. Treasury notes	$	19,209	$	19,209	$	0	$	0
U.S. agency		12,433		0		12,433		0
U.S. agency mortgage-backed, residential		243,579		0		243,579		0
State and municipal		28,066		0		28,066		0
Corporates		32,369		0		32,369		0
Other assets:
Loan-level interest rate swaps		851		0		851		0
December 31, 2022
Securities available-for-sale:
U.S. Treasury notes	$	19,100	$	19,100	$	0	$	0
U.S. agency		11,280		0		11,280		0
U.S. agency mortgage-backed, residential		250,102		0		250,102		0
State and municipal		29,399		0		29,399		0
Corporates		35,576		0		35,576		0
Other assets:
Loan-level interest rate swaps		8		0		8		0

Schedule of Assets Measured at Fair Value on Nonrecurring Basis

			Fair Value Measurements
(dollars in thousands)		Total	(Level 1) ‎Quoted Prices in ‎Active Markets for ‎Identical Assets		(Level 2) ‎Significant Other ‎Observable Inputs		(Level 3) ‎Significant Other ‎Unobservable Inputs
September 30, 2023
Individually evaluated commercial loans	$	1,368	$	0	$	0	$	1,368
Individually evaluated residential real estate:
Individually evaluated other		66		0		0		66
Impaired other real estate owned		383		0		0		383
December 31, 2022
Impaired builder & developer loans	$	1,194	$	0	$	0	$	1,194
Impaired residential real estate investor loans		57		0		0		57
Impaired agriculture loans		228		0		0		228
Impaired manufacture loans		150		0		0		150
Impaired other loans		1,114		0		0		1,114
Impaired other real estate owned		479		0		0		479

Schedule of Level 3 Assets Measured at Fair Value on Nonrecurring Basis

	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value		Valuation	Unobservable		Weighted
(dollars in thousands)	Estimate		Techniques	Input	Range	Average
September 30, 2023
Individually evaluated commercial loans	$	446	Appraisal (1)	Appraisal adjustments (2)	0%-9%	9%
Individually evaluated residential real estate:
Individually evaluated other		66	Appraisal (1)	Appraisal adjustments (2)	16%-16%	16%
Individually evaluated commercial loans		922	Business asset valuation (3)	Business asset valuation adjustments (4)	20%-50%	29%
Impaired other real estate owned		383	Appraisal (1)	Appraisal adjustments (2)	20%-25%	22%
December 31, 2022
Impaired builder & developer loans	$	1,194	Appraisal (1)	Appraisal adjustments (2)	2%-22%	5%
Impaired residential real estate investor loans		57	Appraisal (1)	Appraisal adjustments (2)	6%-10%	8%
Impaired agriculture loans		228	Appraisal (1)	Appraisal adjustments (2)	5%-13%	9%
Impaired manufacturer loans		150	Appraisal (1)	Appraisal adjustments (2)	67%-67%	67%
Impaired other loans		1,114	Appraisal (1)	Appraisal adjustments (2)	0%-25%	5%
Impaired other real estate owned		479	Appraisal (1)	Appraisal adjustments (2)	0%-25%	22%

(1)Fair value is generally determined through independent appraisals, which generally include various level 3 inputs that are not identifiable.

(2)Appraisal amounts may be adjusted downward by the Corporation's management for qualitative factors such as economic conditions and estimated liquidation expenses.

(3)Fair value is generally determined through customer-provided financial statements and bankruptcy court documents.

(4)Business asset valuation may be adjusted downward by the corporation’s management qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses adjustments are presented as a percent of the financial statement book value.

Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments

						Fair Value Estimates
					(Level 1)		(Level 2)		(Level 3)
					Quoted Prices		Significant		Significant
					in Active		Other		Other
	Carrying		Estimated		Markets for		Observable		Unobservable
(dollars in thousands)	Amount		Fair Value		Identical Assets		Inputs		Inputs
September 30, 2023
Financial assets
Cash and cash equivalents	$	51,307	$	51,307	$	51,307	$	0	$	0
Securities available-for-sale		335,656		335,656		19,209		316,447		0
Restricted investment in bank stocks		2,152		N/A		N/A		N/A		N/A
Loans held for sale		1,103		1,125		0		1,125		0
Loans, net		1,682,931		1,570,158		0		0		1,570,158
Interest receivable		6,859		6,859		0		1,567		5,292
Interest rate swaps		851		851		0		851		0
Financial liabilities
Deposits	$	1,906,378	$	1,899,852	$	0	$	1,899,852	$	0
Short-term borrowings		39,099		39,099		0		39,099		0
Long-term debt and junior subordinated debt (1)		10,310		9,239		0		0		9,239
Subordinated notes		30,825		28,531		0		28,531		0
Interest payable		1,458		1,458		0		1,458		0
Interest rate swaps		851		851		0		851		0
Off-balance sheet instruments		0		0		0		0		0
December 31, 2022
Financial assets
Cash and cash equivalents	$	120,439	$	120,439	$	120,439	$	0	$	0
Securities available-for-sale		345,457		345,457		19,100		326,357		0
Restricted investment in bank stocks		955		N/A		N/A		N/A		N/A
Loans held for sale		154		157		0		157		0
Loans, net		1,612,121		1,503,440		0		0		1,503,440
Interest receivable		6,624		6,624		0		948		5,676
Financial liabilities
Deposits	$	1,943,219	$	1,932,689	$	0	$	1,932,689	$	0
Short-term borrowings		11,605		11,605		0		11,605		0
Long-term debt and junior subordinated debt (1)		10,310		10,165		0		0		10,165
Subordinated notes		30,764		29,145		0		29,145		0
Interest payable		492		492		0		492		0
Off-balance sheet instruments		0		0		0		0		0
(1) Exclude leases included in Long-term debt

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Assets and Liabilities Subject to Offsetting (Tables)

9 Months Ended

Sep. 30, 2023

Assets and Liabilities Subject to Offsetting [Abstract]

Schedule of Securities Sold Under Agreements to Repurchase

							Gross amounts Not Offset in
							the Statements of Condition
							Financial Instruments
(dollars in thousands)	Gross ‎Amounts of ‎Recognized ‎Liabilities		Gross ‎Amounts ‎Offset in the ‎Statements ‎of Condition		Net Amounts ‎of Liabilities ‎Presented in ‎the Statements ‎of Condition		U.S. agency ‎mortgage-backed, ‎residential		U.S. agency		Cash ‎Collateral ‎Pledged		Net ‎Amount
September 30, 2023
Repurchase Agreements	$	13,224	$	0	$	13,224	$	(13,030)	$	0	$	0	$	194
December 31, 2022
Repurchase Agreements	$	11,605	$	0	$	11,605	$	(13,767)	$	0	$	0	$	(2,162)

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Interest Rate Swaps (Tables)

9 Months Ended

Sep. 30, 2023

Interest Rate Swaps [Abstract]

Fair Value, Notational Amount, and Collateral Posted Related to Loan-Level Interest Rate Swaps

		September 30, 2023				December 31, 2022
		Notional		Asset (Liability)		Notional		Asset (Liability)
(dollars in thousands)		Amount		Fair Value		Amount		Fair Value
Interest Rate Swap with Customers
Positive Fair Values	$	34,173	$	851	$	5,992	$	8
Interest Rate Swaps with Counterparties
Negative Fair Values	$	34,173	$	(851)	$	5,992	$	(8)

Gross Amounts of Commercial Loan Swap Derivatives, Amounts Offset and Carrying Values in Consolidated Balance Sheets, and Collateral Pledged to Support Such Agreements

(dollars in thousands)		September 30, 2023		December 31, 2022
Interest Rate Swap Contracts - Commercial Loans:
Gross amounts recognized	$	851	$	8
Gross amounts offset		851		8
Net amounts presented in the Consolidated Balance Sheets	$	0	$	0
Gross amounts not offset:
Cash Collateral	$	0	$	0
Net amounts	$	0	$	0

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Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands			3 Months Ended		9 Months Ended
		Jan. 01, 2023 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) item	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Summary of Significant Accounting Policies [Line Items]
Number of subsidiaries | item					1
Other assets			$ 92,962		$ 92,962		$ 89,417
Foreclosed real estate, net of allowance			383		383		479
Other income			549	$ 528	1,998	$ 1,479
Retained earnings			64,816		64,816		52,146
Provision for credit losses on loans	[1]		128	(567)	589	3,434
Provision for credit losses on off-balance sheet credit exposures	[1]		123	$ 0	323	$ 0
Accrued interest receivable on available-for-sale debt securities			1,600		1,600
Accrued interest receivable, loans			$ 5,300		$ 5,300
Financing Receivable, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration]			Other assets		Other assets
Bank Premises and Equipment [Member]
Summary of Significant Accounting Policies [Line Items]
Other assets			$ 1,269		$ 1,269		567
Accounting Standards Update 2016-13 [Member]
Summary of Significant Accounting Policies [Line Items]
Retained earnings		$ (2,100)
Provision for credit losses on loans		927
Provision for credit losses on off-balance sheet credit exposures		1,900
Deferred Income Tax Liabilities		$ 667
Mortgage Servicing Rights [Member] | Residential Mortgages [Member]
Summary of Significant Accounting Policies [Line Items]
Mortgage loans serviced for third parties			52,129		52,129		55,708
Consumer Related Loans [Member] | Residential Mortgages [Member]
Summary of Significant Accounting Policies [Line Items]
Loans in process of foreclosure amount			$ 219		$ 219		$ 124
Core Deposits Intangible Assets [Member]
Summary of Significant Accounting Policies [Line Items]
Intangible assets, amortization period			10 years		10 years

[1] Results of reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP.

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Summary of Significant Accounting Policies (Summary of Changes in Mortgage Service Rights) (Details) - Residential Mortgages [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Balance at beginning of year	$ 248	$ 315	$ 279	$ 380
Originations of mortgage servicing rights	0	0	0	6
Amortization expense	(10)	(20)	(41)	(91)
Balance at end of year	$ 238	$ 295	$ 238	$ 295

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Summary of Significant Accounting Policies (Schedule of Computation of Net Income Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Summary of Significant Accounting Policies [Abstract]
Net income	$ 5,917	$ 6,611	$ 6,992	$ 7,154	$ 1,953	$ 3,053	$ 19,520	$ 12,160
Weighted average shares outstanding (basic)	9,616			9,545			9,600	9,521
Effect of dilutive stock options	15			23			18	29
Weighted average shares outstanding (diluted)	9,631			9,568			9,618	9,550
Basic earnings per share	$ 0.62			$ 0.75			$ 2.03	$ 1.28
Diluted earnings per share	$ 0.61			$ 0.75			$ 2.03	$ 1.27

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Summary of Significant Accounting Policies (Schedule of Supplemental Cash Flow Information) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Summary of Significant Accounting Policies [Abstract]
Cash paid during the period for: Income taxes	$ 7,630	$ 531
Cash paid during the period for: Interest	22,563	5,044
Noncash investing and financing activities:
Transfer of loans to foreclosed real estate	0	479
Transfer of loans to held for sale	2,018	16,617
Transfer of premises and equipment to assets held for sale	1,269	109
Initial recognition of operating lease right-of-use assets	0	2,061
Initial recognition of operating lease liabilities	$ 0	$ 2,061

XML

Summary of Significant Accounting Policies (Schedule of Impact from Adoption of Pronouncement) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Sep. 30, 2023	Jan. 01, 2023
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	$ 1,632,857	$ 1,704,380
Accounting Standards Update [Extensible Enumeration]	Accounting Standards Update201613 [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			$ 0
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			1,632,857
Commercial Loans [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	$ 0	171,490
Commercial Loans [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			191,665
Commercial Loans [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			191,665
Commercial Real Estate [Member] | Construction/Builder & Developer [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	0	184,960
Commercial Real Estate [Member] | Construction/Builder & Developer [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			144,782
Commercial Real Estate [Member] | Construction/Builder & Developer [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			144,782
Commercial Real Estate [Member] | Owner Occupied [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	0	347,857
Commercial Real Estate [Member] | Owner Occupied [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			344,941
Commercial Real Estate [Member] | Owner Occupied [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			344,941
Commercial Real Estate [Member] | Non-Owner Occupied [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	0	455,584
Commercial Real Estate [Member] | Non-Owner Occupied [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			445,408
Commercial Real Estate [Member] | Non-Owner Occupied [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			445,408
Commercial Real Estate [Member] | Commercial Real Estate Investor [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	367,366
Commercial Real Estate [Member] | Commercial Real Estate Investor [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			(367,366)
Commercial Real Estate [Member] | Commercial Real Estate Investor [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			0
Commercial Real Estate [Member] | Other [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans		455,584
Residential Real Estate [Member] | Construction/Builder & Developer [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	0	29,132
Residential Real Estate [Member] | Construction/Builder & Developer [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			26,055
Residential Real Estate [Member] | Construction/Builder & Developer [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			26,055
Residential Real Estate [Member] | Residential Mortgages [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans		29,132
Residential Real Estate [Member] | Revolving/Home Equity [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	0	105,169
Residential Real Estate [Member] | Revolving/Home Equity [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			103,509
Residential Real Estate [Member] | Revolving/Home Equity [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			103,509
Residential Real Estate [Member] | Multi Family [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	0	123,465
Residential Real Estate [Member] | Multi Family [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			118,141
Residential Real Estate [Member] | Multi Family [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			118,141
Residential Real Estate [Member] | Other [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	0	273,170
Residential Real Estate [Member] | Other [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			243,092
Residential Real Estate [Member] | Other [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			243,092
Consumer Loan [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	0	$ 13,553
Consumer Loan [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			15,264
Consumer Loan [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			15,264
Commercial Related Loans [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	1,374,350
Commercial Related Loans [Member] | Construction/Builder & Developer [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	128,327
Commercial Related Loans [Member] | Construction/Builder & Developer [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			(128,327)
Commercial Related Loans [Member] | Construction/Builder & Developer [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			0
Commercial Related Loans [Member] | Commercial Real Estate Investor [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	367,366
Commercial Related Loans [Member] | Residential Real Estate Investor [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	263,262
Commercial Related Loans [Member] | Residential Real Estate Investor [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			(263,262)
Commercial Related Loans [Member] | Residential Real Estate Investor [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			0
Commercial Related Loans [Member] | Hotel/Motel [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	94,471
Commercial Related Loans [Member] | Hotel/Motel [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			(94,471)
Commercial Related Loans [Member] | Hotel/Motel [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			0
Commercial Related Loans [Member] | Wholesale & Retail [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	60,672
Commercial Related Loans [Member] | Wholesale & Retail [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			(60,672)
Commercial Related Loans [Member] | Wholesale & Retail [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			0
Commercial Related Loans [Member] | Manufacturing [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	86,593
Commercial Related Loans [Member] | Manufacturing [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			(86,593)
Commercial Related Loans [Member] | Manufacturing [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			0
Commercial Related Loans [Member] | Agriculture [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	91,449
Commercial Related Loans [Member] | Agriculture [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			(91,449)
Commercial Related Loans [Member] | Agriculture [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			0
Commercial Related Loans [Member] | Service [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	73,094
Commercial Related Loans [Member] | Service [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			(73,094)
Commercial Related Loans [Member] | Service [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			0
Commercial Related Loans [Member] | Other [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	209,116
Commercial Related Loans [Member] | Other [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			(209,116)
Commercial Related Loans [Member] | Other [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			0
Consumer Related Loans [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	258,507
Consumer Related Loans [Member] | Residential Mortgages [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	135,340
Consumer Related Loans [Member] | Residential Mortgages [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			(135,340)
Consumer Related Loans [Member] | Residential Mortgages [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			0
Consumer Related Loans [Member] | Revolving/Home Equity [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	98,030
Consumer Related Loans [Member] | Revolving/Home Equity [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			(98,030)
Consumer Related Loans [Member] | Revolving/Home Equity [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			0
Consumer Related Loans [Member] | Other [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans	$ 25,137
Consumer Related Loans [Member] | Other [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			(25,137)
Consumer Related Loans [Member] | Other [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loans			$ 0

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Securities (Narrative) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($) security	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($) security
Schedule of Available-for-sale Securities [Line Items]
Income tax expense related to net investment security gains | $	$ 91	$ 0
Number of securities	344
Number of securities in unrealized loss position	333		305
Carrying Amount [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities pledged as collateral | $	$ 227,602		$ 204,887
U.S. Agency [Member]
Schedule of Available-for-sale Securities [Line Items]
Number of securities in unrealized loss position	12		10
Percentage of mortgage-backed securities held issued by financial instrument	100.00%
Corporates [Member]
Schedule of Available-for-sale Securities [Line Items]
Number of securities in unrealized loss position	32		31

XML

Securities (Summary of Securities Available-for-Sale) (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Schedule of Available-for-sale Securities [Line Items]
Total debt securities, Amortized Cost	$ 391,694	$ 390,922
Allowance for Credit Losses	0
Total debt securities, Gross Unrealized Gains	7	80
Total debt securities, Gross Unrealized Losses	(56,045)	(45,545)
Total debt securities, Fair Value	335,656	345,457
U.S. Treasury Notes [Member]
Schedule of Available-for-sale Securities [Line Items]
Total debt securities, Amortized Cost	19,804	19,688
Allowance for Credit Losses	0
Total debt securities, Gross Unrealized Gains	0	0
Total debt securities, Gross Unrealized Losses	(595)	(588)
Total debt securities, Fair Value	19,209	19,100
U.S. Agency [Member]
Schedule of Available-for-sale Securities [Line Items]
Total debt securities, Amortized Cost	13,951	12,750
Allowance for Credit Losses	0
Total debt securities, Gross Unrealized Gains	0	0
Total debt securities, Gross Unrealized Losses	(1,518)	(1,470)
Total debt securities, Fair Value	12,433	11,280
U.S. Agency Mortgage-Backed, Residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Total debt securities, Amortized Cost	284,345	283,436
Allowance for Credit Losses	0
Total debt securities, Gross Unrealized Gains	4	43
Total debt securities, Gross Unrealized Losses	(40,770)	(33,377)
Total debt securities, Fair Value	243,579	250,102
State and Municipal [Member]
Schedule of Available-for-sale Securities [Line Items]
Total debt securities, Amortized Cost	35,399	35,517
Allowance for Credit Losses	0
Total debt securities, Gross Unrealized Gains	3	37
Total debt securities, Gross Unrealized Losses	(7,336)	(6,155)
Total debt securities, Fair Value	28,066	29,399
Corporates [Member]
Schedule of Available-for-sale Securities [Line Items]
Total debt securities, Amortized Cost	38,195	39,531
Allowance for Credit Losses	0
Total debt securities, Gross Unrealized Gains	0	0
Total debt securities, Gross Unrealized Losses	(5,826)	(3,955)
Total debt securities, Fair Value	$ 32,369	$ 35,576

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Securities (Schedule of Gross Realized Gains and Losses on Sales of Securities Available-for-Sale) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Securities [Abstract]
Proceeds	$ 0	$ 0	$ 4,253	$ 0
Gross gains	0	0	0	0
Gross losses	0	0	(388)	0
Tax benefit	$ 0	$ 0	$ 91	$ 0

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Securities (Schedule of Amortized Cost and Estimated Fair Value of Debt Securities) (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Securities [Abstract]
Due in one year or less, Available-for-sale, Amortized Cost	$ 9,908
Due after one year through five years, Available-for-sale, Amortized Cost	112,944
Due after five years through ten years, Available-for-sale, Amortized Cost	230,190
Due after ten years, Available-for-sale, Amortized Cost	38,652
Total debt securities, Amortized Cost	391,694	$ 390,922
Due in one year or less, Available-for-sale, Fair Value	9,698
Due after one year through five years, Available-for-sale, Fair Value	103,561
Due after five years through ten years, Available-for-sale, Fair Value	191,357
Due after ten years, Available-for-sale, Fair Value	31,040
Total debt securities, Fair Value	$ 335,656	$ 345,457

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Securities (Schedule of Gross Unrealized Losses and Fair Value, Aggregated by Investment Category and Length of Time) (Details) $ in Thousands	Sep. 30, 2023 USD ($) security	Dec. 31, 2022 USD ($) security
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Number of Securities | security	51	175
Less than 12 months, Fair Value	$ 37,028	$ 181,047
Less than 12 months, Unrealized Losses	$ (1,358)	$ (13,356)
12 months or more, Number of Securities | security	282	130
12 months or more, Fair Value	$ 289,119	$ 151,532
12 months or more, Unrealized Losses	$ (54,687)	$ (32,167)
Total, Number of Securities | security	333	305
Total, Fair Value	$ 326,147	$ 332,579
Total, Unrealized Losses	$ (56,045)	$ (45,523)
U.S. Treasury Notes [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Number of Securities | security	0	4
Less than 12 months, Fair Value	$ 0	$ 19,100
Less than 12 months, Unrealized Losses	$ 0	$ (588)
12 months or more, Number of Securities | security	4	0
12 months or more, Fair Value	$ 19,209	$ 0
12 months or more, Unrealized Losses	$ (595)	$ 0
Total, Number of Securities | security	4	4
Total, Fair Value	$ 19,209	$ 19,100
Total, Unrealized Losses	$ (595)	$ (588)
U.S. Agency [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Number of Securities | security	3	7
Less than 12 months, Fair Value	$ 1,913	$ 7,594
Less than 12 months, Unrealized Losses	$ (38)	$ (656)
12 months or more, Number of Securities | security	9	3
12 months or more, Fair Value	$ 10,520	$ 3,685
12 months or more, Unrealized Losses	$ (1,480)	$ (814)
Total, Number of Securities | security	12	10
Total, Fair Value	$ 12,433	$ 11,279
Total, Unrealized Losses	$ (1,518)	$ (1,470)
U.S. Agency Mortgage-Backed, Residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Number of Securities | security	39	147
Less than 12 months, Fair Value	$ 31,338	$ 140,409
Less than 12 months, Unrealized Losses	$ (1,065)	$ (11,071)
12 months or more, Number of Securities | security	206	72
12 months or more, Fair Value	$ 205,626	$ 102,061
12 months or more, Unrealized Losses	$ (39,705)	$ (22,284)
Total, Number of Securities | security	245	219
Total, Fair Value	$ 236,964	$ 242,470
Total, Unrealized Losses	$ (40,770)	$ (33,355)
State and Municipal [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Number of Securities | security	7	6
Less than 12 months, Fair Value	$ 2,608	$ 2,334
Less than 12 months, Unrealized Losses	$ (215)	$ (210)
12 months or more, Number of Securities | security	33	35
12 months or more, Fair Value	$ 24,065	$ 25,121
12 months or more, Unrealized Losses	$ (7,121)	$ (5,945)
Total, Number of Securities | security	40	41
Total, Fair Value	$ 26,673	$ 27,455
Total, Unrealized Losses	$ (7,336)	$ (6,155)
Corporates [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Number of Securities | security	2	11
Less than 12 months, Fair Value	$ 1,169	$ 11,610
Less than 12 months, Unrealized Losses	$ (40)	$ (831)
12 months or more, Number of Securities | security	30	20
12 months or more, Fair Value	$ 29,699	$ 20,665
12 months or more, Unrealized Losses	$ (5,786)	$ (3,124)
Total, Number of Securities | security	32	31
Total, Fair Value	$ 30,868	$ 32,275
Total, Unrealized Losses	$ (5,826)	$ (3,955)

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Restricted Investment in Bank Stocks (Narrative) (Details) - FHLBP [Member] - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Maximum percent of member's total capital stock outstanding available for repurchase	5.00%
Impairment on restricted investment in bank stocks	$ 0	$ 0

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Loans and Allowance for Credit Losses (Narrative) (Details) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2023 USD ($) loan	Sep. 30, 2023 USD ($) segment loan	Dec. 31, 2022 USD ($) segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loan portfolio segments | segment		9	2
Nonaccrual	$ 7,605	$ 7,605	$ 10,970
Loans	1,704,380	1,704,380	1,632,857
Commitments to lend additional amounts to TDRs	$ 231	$ 231
Number of loan defaults | loan	0	0
Collateral Pledged [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 7,600	$ 7,600
Nonaccrual [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual	5,600	5,600	9,400
Loans	$ 7,605	$ 7,605	$ 10,970

XML

Loans and Allowance for Credit Losses (Schedule of Loan Portfolio Composition) (Details) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2023		Dec. 31, 2022		Jun. 30, 2023
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 1,704,380		$ 1,632,857
Allowance for Credit Loss, Beginning Balance	21,449	[1]	20,736	[1]	$ 20,681
Net loans	1,682,931		1,612,121
Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	171,490		0
Allowance for Credit Loss, Beginning Balance	3,005		4,783		3,041
Commercial Real Estate [Member] | Construction/Builder & Developer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	184,960		0
Allowance for Credit Loss, Beginning Balance	3,993		1,829		3,542
Commercial Real Estate [Member] | Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	347,857		0
Allowance for Credit Loss, Beginning Balance	4,114		4,341		3,877
Commercial Real Estate [Member] | Non-Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	455,584		0
Allowance for Credit Loss, Beginning Balance	6,161		6,387		6,125
Commercial Real Estate [Member] | Commercial Real Estate Investor [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans			367,366
Commercial Real Estate [Member] | Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	455,584
Residential Real Estate [Member] | Construction/Builder & Developer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	29,132		0
Allowance for Credit Loss, Beginning Balance	88		230		93
Residential Real Estate [Member] | Residential Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	29,132
Residential Real Estate [Member] | Revolving/Home Equity [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	105,169		0
Allowance for Credit Loss, Beginning Balance	482		417		476
Residential Real Estate [Member] | Multi Family [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	123,465		0
Allowance for Credit Loss, Beginning Balance	1,982		1,205		1,907
Residential Real Estate [Member] | Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	273,170		0
Allowance for Credit Loss, Beginning Balance	1,456		1,511		1,448
Consumer Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	13,553		0
Allowance for Credit Loss, Beginning Balance	$ 168		33		$ 172
Commercial Related Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans			1,374,350
Allowance for Credit Loss, Beginning Balance			20,177
Commercial Related Loans [Member] | Construction/Builder & Developer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans			128,327
Allowance for Credit Loss, Beginning Balance			1,769
Commercial Related Loans [Member] | Commercial Real Estate Investor [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans			367,366
Allowance for Credit Loss, Beginning Balance			4,858
Commercial Related Loans [Member] | Residential Real Estate Investor [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans			263,262
Allowance for Credit Loss, Beginning Balance			2,813
Commercial Related Loans [Member] | Hotel/Motel [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans			94,471
Allowance for Credit Loss, Beginning Balance			1,658
Commercial Related Loans [Member] | Wholesale & Retail [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans			60,672
Allowance for Credit Loss, Beginning Balance			488
Commercial Related Loans [Member] | Manufacturing [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans			86,593
Allowance for Credit Loss, Beginning Balance			930
Commercial Related Loans [Member] | Agriculture [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans			91,449
Allowance for Credit Loss, Beginning Balance			1,645
Commercial Related Loans [Member] | Service [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans			73,094
Allowance for Credit Loss, Beginning Balance			1,064
Commercial Related Loans [Member] | Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans			209,116
Allowance for Credit Loss, Beginning Balance			4,952
Consumer Related Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans			258,507
Allowance for Credit Loss, Beginning Balance			559
Consumer Related Loans [Member] | Residential Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans			135,340
Allowance for Credit Loss, Beginning Balance			270
Consumer Related Loans [Member] | Revolving/Home Equity [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans			98,030
Allowance for Credit Loss, Beginning Balance			207
Consumer Related Loans [Member] | Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans			25,137
Allowance for Credit Loss, Beginning Balance			$ 82
Credit Concentration Risk [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans	100.00%		100.00%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans	10.10%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Commercial Real Estate [Member] | Construction/Builder & Developer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans	10.90%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Commercial Real Estate [Member] | Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans	20.40%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Commercial Real Estate [Member] | Non-Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans	26.70%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Residential Real Estate [Member] | Construction/Builder & Developer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans	1.70%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Residential Real Estate [Member] | Revolving/Home Equity [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans	6.20%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Residential Real Estate [Member] | Multi Family [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans	7.20%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Residential Real Estate [Member] | Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans	16.00%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Consumer Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans	0.80%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Commercial Related Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans			84.20%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Commercial Related Loans [Member] | Construction/Builder & Developer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans			7.90%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Commercial Related Loans [Member] | Commercial Real Estate Investor [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans			22.50%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Commercial Related Loans [Member] | Residential Real Estate Investor [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans			16.10%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Commercial Related Loans [Member] | Hotel/Motel [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans			5.80%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Commercial Related Loans [Member] | Wholesale & Retail [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans			3.70%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Commercial Related Loans [Member] | Manufacturing [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans			5.30%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Commercial Related Loans [Member] | Agriculture [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans			5.60%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Commercial Related Loans [Member] | Service [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans			4.50%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Commercial Related Loans [Member] | Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans			12.80%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Consumer Related Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans			15.80%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Consumer Related Loans [Member] | Residential Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans			8.30%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Consumer Related Loans [Member] | Revolving/Home Equity [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans			6.00%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Consumer Related Loans [Member] | Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
% Total Loans			1.50%

[1] Results of reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP.

XML

Loans and Allowance for Credit Losses (Summary of Allowance for Loan Losses by Loan Segment and Class) (Details) - USD ($) $ in Thousands			3 Months Ended			9 Months Ended			12 Months Ended
		Jan. 01, 2023	Sep. 30, 2023		Sep. 30, 2022	Sep. 30, 2023		Sep. 30, 2022	Dec. 31, 2022		Jun. 30, 2023
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance			$ 21,449	[1]		$ 21,449	[1]		$ 20,736	[1]	$ 20,681
Provision for (recovery of) credit losses - loans	[1]		128		$ (567)	589		$ 3,434
Loan charge-offs			(193)			(1,985)
Loan recoveries			833			1,182
Allowance for Credit Loss, Ending Balance	[1]		21,449			21,449			20,736
Allowance for Loan Losses, Beginning Balance					22,865			22,782	22,782
Charge-offs					(335)			(4,299)
Recoveries					269			315
Provision					(567)			3,434
Allowance for Loan Losses, Ending Balance					22,232			22,232
Accounting Standards Update 2016-13 [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									927
Provision for (recovery of) credit losses - loans		$ 927
Allowance for Credit Loss, Ending Balance									927
Commercial Loans [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance			3,005			3,005			4,783		3,041
Provision for (recovery of) credit losses - loans			(614)			(1,212)
Loan charge-offs			(190)			(1,248)
Loan recoveries			768			917
Allowance for Credit Loss, Ending Balance			3,005			3,005			4,783
Allowance for Loan Losses, Beginning Balance								22,332	22,332
Charge-offs								(4,244)
Recoveries								272
Provision								3,349
Allowance for Loan Losses, Ending Balance					21,709			21,709
Commercial Loans [Member] | Accounting Standards Update 2016-13 [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									(235)
Allowance for Credit Loss, Ending Balance									(235)
Commercial Loans [Member] | Construction/Builder & Developer [Member]
Allowance for Credit Loss [Abstract]
Allowance for Loan Losses, Beginning Balance								2,408	2,408
Charge-offs								0
Recoveries								12
Provision								(294)
Allowance for Loan Losses, Ending Balance					2,126			2,126
Commercial Loans [Member] | Commercial Real Estate Investor [Member]
Allowance for Credit Loss [Abstract]
Allowance for Loan Losses, Beginning Balance								5,647	5,647
Charge-offs								(1,249)
Recoveries								0
Provision								1,333
Allowance for Loan Losses, Ending Balance					5,731			5,731
Commercial Loans [Member] | Residential Real Estate Investor [Member]
Allowance for Credit Loss [Abstract]
Allowance for Loan Losses, Beginning Balance								3,493	3,493
Charge-offs								(52)
Recoveries								10
Provision								(689)
Allowance for Loan Losses, Ending Balance					2,762			2,762
Commercial Loans [Member] | Hotel/Motel [Member]
Allowance for Credit Loss [Abstract]
Allowance for Loan Losses, Beginning Balance								968	968
Charge-offs								(1,669)
Recoveries								179
Provision								1,608
Allowance for Loan Losses, Ending Balance					1,086			1,086
Commercial Loans [Member] | Wholesale & Retail [Member]
Allowance for Credit Loss [Abstract]
Allowance for Loan Losses, Beginning Balance								1,989	1,989
Charge-offs								0
Recoveries								0
Provision								(1,454)
Allowance for Loan Losses, Ending Balance					535			535
Commercial Loans [Member] | Manufacturing [Member]
Allowance for Credit Loss [Abstract]
Allowance for Loan Losses, Beginning Balance								883	883
Charge-offs								0
Recoveries								0
Provision								103
Allowance for Loan Losses, Ending Balance					986			986
Commercial Loans [Member] | Agriculture [Member]
Allowance for Credit Loss [Abstract]
Allowance for Loan Losses, Beginning Balance								1,307	1,307
Charge-offs								(535)
Recoveries								40
Provision								832
Allowance for Loan Losses, Ending Balance					1,644			1,644
Commercial Loans [Member] | Service [Member]
Allowance for Credit Loss [Abstract]
Allowance for Loan Losses, Beginning Balance								981	981
Charge-offs								(736)
Recoveries								1
Provision								777
Allowance for Loan Losses, Ending Balance					1,023			1,023
Commercial Loans [Member] | Other [Member]
Allowance for Credit Loss [Abstract]
Allowance for Loan Losses, Beginning Balance								4,656	4,656
Charge-offs								(3)
Recoveries								30
Provision								1,133
Allowance for Loan Losses, Ending Balance					5,816			5,816
Commercial Real Estate [Member] | Construction/Builder & Developer [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance			3,993			3,993			1,829		3,542
Provision for (recovery of) credit losses - loans			451			1,043
Loan charge-offs			0			0
Loan recoveries			0			0
Allowance for Credit Loss, Ending Balance			3,993			3,993			1,829
Commercial Real Estate [Member] | Construction/Builder & Developer [Member] | Accounting Standards Update 2016-13 [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									1,121
Allowance for Credit Loss, Ending Balance									1,121
Commercial Real Estate [Member] | Owner Occupied [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance			4,114			4,114			4,341		3,877
Provision for (recovery of) credit losses - loans			236			484
Loan charge-offs			0			(683)
Loan recoveries			1			41
Allowance for Credit Loss, Ending Balance			4,114			4,114			4,341
Commercial Real Estate [Member] | Owner Occupied [Member] | Accounting Standards Update 2016-13 [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									(69)
Allowance for Credit Loss, Ending Balance									(69)
Commercial Real Estate [Member] | Non-Owner Occupied [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance			6,161			6,161			6,387		6,125
Provision for (recovery of) credit losses - loans			36			242
Loan charge-offs			0			0
Loan recoveries			0			0
Allowance for Credit Loss, Ending Balance			6,161			6,161			6,387
Commercial Real Estate [Member] | Non-Owner Occupied [Member] | Accounting Standards Update 2016-13 [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									(468)
Allowance for Credit Loss, Ending Balance									(468)
Residential Real Estate [Member] | Construction/Builder & Developer [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance			88			88			230		93
Provision for (recovery of) credit losses - loans			(5)			2
Loan charge-offs			0			0
Loan recoveries			0			0
Allowance for Credit Loss, Ending Balance			88			88			230
Residential Real Estate [Member] | Construction/Builder & Developer [Member] | Accounting Standards Update 2016-13 [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									(144)
Allowance for Credit Loss, Ending Balance									(144)
Residential Real Estate [Member] | Revolving/Home Equity [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance			482			482			417		476
Provision for (recovery of) credit losses - loans			5			(234)
Loan charge-offs			0			(27)
Loan recoveries			1			134
Allowance for Credit Loss, Ending Balance			482			482			417
Residential Real Estate [Member] | Revolving/Home Equity [Member] | Accounting Standards Update 2016-13 [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									192
Allowance for Credit Loss, Ending Balance									192
Residential Real Estate [Member] | Multi Family [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance			1,982			1,982			1,205		1,907
Provision for (recovery of) credit losses - loans			75			583
Loan charge-offs			0			0
Loan recoveries			0			0
Allowance for Credit Loss, Ending Balance			1,982			1,982			1,205
Residential Real Estate [Member] | Multi Family [Member] | Accounting Standards Update 2016-13 [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									194
Allowance for Credit Loss, Ending Balance									194
Residential Real Estate [Member] | Other [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance			1,456			1,456			1,511		1,448
Provision for (recovery of) credit losses - loans			(43)			(293)
Loan charge-offs			0			0
Loan recoveries			51			69
Allowance for Credit Loss, Ending Balance			1,456			1,456			1,511
Residential Real Estate [Member] | Other [Member] | Accounting Standards Update 2016-13 [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									169
Allowance for Credit Loss, Ending Balance									169
Consumer Loan [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance			168			168			33		$ 172
Provision for (recovery of) credit losses - loans			(13)			(26)
Loan charge-offs			(3)			(27)
Loan recoveries			12			21
Allowance for Credit Loss, Ending Balance			$ 168			$ 168			33
Allowance for Loan Losses, Beginning Balance								451	451
Charge-offs								(55)
Recoveries								43
Provision								84
Allowance for Loan Losses, Ending Balance					523			523
Consumer Loan [Member] | Accounting Standards Update 2016-13 [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									167
Allowance for Credit Loss, Ending Balance									167
Consumer Loan [Member] | Residential Mortgages [Member]
Allowance for Credit Loss [Abstract]
Allowance for Loan Losses, Beginning Balance								186	186
Charge-offs								0
Recoveries								0
Provision								57
Allowance for Loan Losses, Ending Balance					243			243
Consumer Loan [Member] | Revolving/Home Equity [Member]
Allowance for Credit Loss [Abstract]
Allowance for Loan Losses, Beginning Balance								191	191
Charge-offs								(49)
Recoveries								26
Provision								32
Allowance for Loan Losses, Ending Balance					200			200
Consumer Loan [Member] | Other [Member]
Allowance for Credit Loss [Abstract]
Allowance for Loan Losses, Beginning Balance								74	74
Charge-offs								(6)
Recoveries								17
Provision								(5)
Allowance for Loan Losses, Ending Balance					80			80
Commercial Related Loans [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									20,177
Allowance for Credit Loss, Ending Balance									20,177
Allowance for Loan Losses, Beginning Balance					22,394
Charge-offs					(332)
Recoveries					239
Provision					(592)
Allowance for Loan Losses, Ending Balance					21,709			21,709
Commercial Related Loans [Member] | Construction/Builder & Developer [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									1,769
Allowance for Credit Loss, Ending Balance									1,769
Allowance for Loan Losses, Beginning Balance					2,290
Charge-offs					0
Recoveries					12
Provision					(176)
Allowance for Loan Losses, Ending Balance					2,126			2,126
Commercial Related Loans [Member] | Commercial Real Estate Investor [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									4,858
Allowance for Credit Loss, Ending Balance									4,858
Allowance for Loan Losses, Beginning Balance					5,766
Charge-offs					(22)
Recoveries					0
Provision					(13)
Allowance for Loan Losses, Ending Balance					5,731			5,731
Commercial Related Loans [Member] | Residential Real Estate Investor [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									2,813
Allowance for Credit Loss, Ending Balance									2,813
Allowance for Loan Losses, Beginning Balance					3,483
Charge-offs					(52)
Recoveries					1
Provision					(670)
Allowance for Loan Losses, Ending Balance					2,762			2,762
Commercial Related Loans [Member] | Hotel/Motel [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									1,658
Allowance for Credit Loss, Ending Balance									1,658
Allowance for Loan Losses, Beginning Balance					1,262
Charge-offs					(10)
Recoveries					179
Provision					(345)
Allowance for Loan Losses, Ending Balance					1,086			1,086
Commercial Related Loans [Member] | Wholesale & Retail [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									488
Allowance for Credit Loss, Ending Balance									488
Allowance for Loan Losses, Beginning Balance					518
Charge-offs					0
Recoveries					0
Provision					17
Allowance for Loan Losses, Ending Balance					535			535
Commercial Related Loans [Member] | Manufacturing [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									930
Allowance for Credit Loss, Ending Balance									930
Allowance for Loan Losses, Beginning Balance					858
Charge-offs					0
Recoveries					0
Provision					128
Allowance for Loan Losses, Ending Balance					986			986
Commercial Related Loans [Member] | Agriculture [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									1,645
Allowance for Credit Loss, Ending Balance									1,645
Allowance for Loan Losses, Beginning Balance					1,454
Charge-offs					0
Recoveries					40
Provision					150
Allowance for Loan Losses, Ending Balance					1,644			1,644
Commercial Related Loans [Member] | Service [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									1,064
Allowance for Credit Loss, Ending Balance									1,064
Allowance for Loan Losses, Beginning Balance					827
Charge-offs					(248)
Recoveries					1
Provision					443
Allowance for Loan Losses, Ending Balance					1,023			1,023
Commercial Related Loans [Member] | Other [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									4,952
Allowance for Credit Loss, Ending Balance									4,952
Allowance for Loan Losses, Beginning Balance					5,936
Charge-offs					0
Recoveries					6
Provision					(126)
Allowance for Loan Losses, Ending Balance					5,816			5,816
Consumer Related Loans [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									559
Allowance for Credit Loss, Ending Balance									559
Allowance for Loan Losses, Beginning Balance					482
Charge-offs					(3)
Recoveries					30
Provision					14
Allowance for Loan Losses, Ending Balance					523			523
Consumer Related Loans [Member] | Residential Mortgages [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									270
Allowance for Credit Loss, Ending Balance									270
Allowance for Loan Losses, Beginning Balance					212
Charge-offs					0
Recoveries					0
Provision					31
Allowance for Loan Losses, Ending Balance					243			243
Consumer Related Loans [Member] | Revolving/Home Equity [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									207
Allowance for Credit Loss, Ending Balance									207
Allowance for Loan Losses, Beginning Balance					195
Charge-offs					0
Recoveries					24
Provision					(19)
Allowance for Loan Losses, Ending Balance					200			200
Consumer Related Loans [Member] | Other [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									82
Allowance for Credit Loss, Ending Balance									82
Allowance for Loan Losses, Beginning Balance					75
Charge-offs					(3)
Recoveries					6
Provision					2
Allowance for Loan Losses, Ending Balance					80			80
Unallocated [Member]
Allowance for Credit Loss [Abstract]
Allowance for Credit Loss, Beginning Balance									0
Allowance for Credit Loss, Ending Balance									0
Allowance for Loan Losses, Beginning Balance					(11)			(1)	$ (1)
Charge-offs					0			0
Recoveries					0			0
Provision					11			1
Allowance for Loan Losses, Ending Balance					$ 0			$ 0

[1] Results of reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP.

XML

Loans and Allowance for Credit Losses (Summary of Non-Accrual Loans) (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2023 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
With a Related Allowance	$ 1,988	$ 1,988
Without a Related Allowance	5,617	5,617
Related Allowance	1,092	1,092
Year to Date Interest Income	136	642
Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With a Related Allowance	1,988	1,988
Without a Related Allowance	1,996	1,996
Related Allowance	1,092	1,092
Year to Date Interest Income	136	381
Commercial Real Estate [Member] | Construction/Builder & Developer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Without a Related Allowance	40	40
Related Allowance	0	0
Year to Date Interest Income	0	107
Commercial Real Estate [Member] | Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With a Related Allowance	0	0
Without a Related Allowance	2,043	2,043
Related Allowance	0	0
Year to Date Interest Income	0	53
Commercial Real Estate [Member] | Non-Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With a Related Allowance	0	0
Without a Related Allowance	204	204
Related Allowance	0	0
Year to Date Interest Income	0	0
Residential Real Estate [Member] | Construction/Builder & Developer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With a Related Allowance	0	0
Without a Related Allowance	0	0
Related Allowance	0	0
Year to Date Interest Income	0	36
Residential Real Estate [Member] | Revolving/Home Equity [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With a Related Allowance	0	0
Without a Related Allowance	506	506
Related Allowance	0	0
Year to Date Interest Income	0	27
Residential Real Estate [Member] | Multi Family [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With a Related Allowance	0	0
Without a Related Allowance	0	0
Related Allowance	0	0
Year to Date Interest Income	0	0
Residential Real Estate [Member] | Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With a Related Allowance	0	0
Without a Related Allowance	828	828
Related Allowance	0	0
Year to Date Interest Income	0	38
Consumer Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With a Related Allowance	0	0
Without a Related Allowance	0	0
Related Allowance	0	0
Year to Date Interest Income	$ 0	$ 0

XML

Loans and Allowance for Credit Losses (Summary of Impaired Loans) (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Allowance, Recorded Investment	$ 9,400
Impaired Loans, With No Allowance, Unpaid Principal	11,560
Impaired Loans, With A Related Allowance, Recorded Investment	2,783
Impaired Loans, With A Related Allowance, Unpaid Principal	3,710
Impaired Loans, With A Related Allowance, Related Allowance	2,484
Impaired Loans, Total, Recorded Investment	12,183
Impaired Loans, Total, Unpaid Principal	15,270
Commercial Related Loans [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Allowance, Recorded Investment	7,831
Impaired Loans, With No Allowance, Unpaid Principal	9,933
Impaired Loans, With A Related Allowance, Recorded Investment	2,783
Impaired Loans, With A Related Allowance, Unpaid Principal	3,710
Impaired Loans, With A Related Allowance, Related Allowance	2,484
Impaired Loans, Total, Recorded Investment	10,614
Impaired Loans, Total, Unpaid Principal	13,643
Commercial Related Loans [Member] | Construction/Builder & Developer [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Allowance, Recorded Investment	1,901
Impaired Loans, With No Allowance, Unpaid Principal	2,644
Impaired Loans, With A Related Allowance, Recorded Investment	44
Impaired Loans, With A Related Allowance, Unpaid Principal	44
Impaired Loans, With A Related Allowance, Related Allowance	44
Impaired Loans, Total, Recorded Investment	1,945
Impaired Loans, Total, Unpaid Principal	2,688
Commercial Related Loans [Member] | Commercial Real Estate Investor [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Allowance, Recorded Investment	500
Impaired Loans, With No Allowance, Unpaid Principal	500
Impaired Loans, With A Related Allowance, Recorded Investment	0
Impaired Loans, With A Related Allowance, Unpaid Principal	0
Impaired Loans, With A Related Allowance, Related Allowance	0
Impaired Loans, Total, Recorded Investment	500
Impaired Loans, Total, Unpaid Principal	500
Commercial Related Loans [Member] | Residential Real Estate Investor [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Allowance, Recorded Investment	647
Impaired Loans, With No Allowance, Unpaid Principal	665
Impaired Loans, With A Related Allowance, Recorded Investment	209
Impaired Loans, With A Related Allowance, Unpaid Principal	215
Impaired Loans, With A Related Allowance, Related Allowance	152
Impaired Loans, Total, Recorded Investment	856
Impaired Loans, Total, Unpaid Principal	880
Commercial Related Loans [Member] | Hotel/Motel [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Allowance, Recorded Investment	0
Impaired Loans, With No Allowance, Unpaid Principal	0
Impaired Loans, With A Related Allowance, Recorded Investment	0
Impaired Loans, With A Related Allowance, Unpaid Principal	0
Impaired Loans, With A Related Allowance, Related Allowance	0
Impaired Loans, Total, Recorded Investment	0
Impaired Loans, Total, Unpaid Principal	0
Commercial Related Loans [Member] | Wholesale & Retail [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Allowance, Recorded Investment	0
Impaired Loans, With No Allowance, Unpaid Principal	0
Impaired Loans, With A Related Allowance, Recorded Investment	0
Impaired Loans, With A Related Allowance, Unpaid Principal	0
Impaired Loans, With A Related Allowance, Related Allowance	0
Impaired Loans, Total, Recorded Investment	0
Impaired Loans, Total, Unpaid Principal	0
Commercial Related Loans [Member] | Manufacturing [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Allowance, Recorded Investment	2,783
Impaired Loans, With No Allowance, Unpaid Principal	2,877
Impaired Loans, With A Related Allowance, Recorded Investment	182
Impaired Loans, With A Related Allowance, Unpaid Principal	183
Impaired Loans, With A Related Allowance, Related Allowance	33
Impaired Loans, Total, Recorded Investment	2,965
Impaired Loans, Total, Unpaid Principal	3,060
Commercial Related Loans [Member] | Agriculture [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Allowance, Recorded Investment	164
Impaired Loans, With No Allowance, Unpaid Principal	210
Impaired Loans, With A Related Allowance, Recorded Investment	748
Impaired Loans, With A Related Allowance, Unpaid Principal	930
Impaired Loans, With A Related Allowance, Related Allowance	655
Impaired Loans, Total, Recorded Investment	912
Impaired Loans, Total, Unpaid Principal	1,140
Commercial Related Loans [Member] | Service [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Allowance, Recorded Investment	0
Impaired Loans, With No Allowance, Unpaid Principal	0
Impaired Loans, With A Related Allowance, Recorded Investment	0
Impaired Loans, With A Related Allowance, Unpaid Principal	0
Impaired Loans, With A Related Allowance, Related Allowance	0
Impaired Loans, Total, Recorded Investment	0
Impaired Loans, Total, Unpaid Principal	0
Commercial Related Loans [Member] | Other [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Allowance, Recorded Investment	1,836
Impaired Loans, With No Allowance, Unpaid Principal	3,037
Impaired Loans, With A Related Allowance, Recorded Investment	1,600
Impaired Loans, With A Related Allowance, Unpaid Principal	2,338
Impaired Loans, With A Related Allowance, Related Allowance	1,600
Impaired Loans, Total, Recorded Investment	3,436
Impaired Loans, Total, Unpaid Principal	5,375
Consumer Related Loans [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Allowance, Recorded Investment	1,569
Impaired Loans, With No Allowance, Unpaid Principal	1,627
Impaired Loans, With A Related Allowance, Recorded Investment	0
Impaired Loans, With A Related Allowance, Unpaid Principal	0
Impaired Loans, With A Related Allowance, Related Allowance	0
Impaired Loans, Total, Recorded Investment	1,569
Impaired Loans, Total, Unpaid Principal	1,627
Consumer Related Loans [Member] | Residential Mortgages [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Allowance, Recorded Investment	1,112
Impaired Loans, With No Allowance, Unpaid Principal	1,115
Impaired Loans, With A Related Allowance, Recorded Investment	0
Impaired Loans, With A Related Allowance, Unpaid Principal	0
Impaired Loans, With A Related Allowance, Related Allowance	0
Impaired Loans, Total, Recorded Investment	1,112
Impaired Loans, Total, Unpaid Principal	1,115
Consumer Related Loans [Member] | Revolving/Home Equity [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Allowance, Recorded Investment	457
Impaired Loans, With No Allowance, Unpaid Principal	512
Impaired Loans, With A Related Allowance, Recorded Investment	0
Impaired Loans, With A Related Allowance, Unpaid Principal	0
Impaired Loans, With A Related Allowance, Related Allowance	0
Impaired Loans, Total, Recorded Investment	457
Impaired Loans, Total, Unpaid Principal	512
Consumer Related Loans [Member] | Other [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Allowance, Recorded Investment	0
Impaired Loans, With No Allowance, Unpaid Principal	0
Impaired Loans, With A Related Allowance, Recorded Investment	0
Impaired Loans, With A Related Allowance, Unpaid Principal	0
Impaired Loans, With A Related Allowance, Related Allowance	0
Impaired Loans, Total, Recorded Investment	0
Impaired Loans, Total, Unpaid Principal	$ 0

XML

Loans and Allowance for Credit Losses (Summary of Average Impaired Loans and Related Interest Income) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Related Allowance, Average Recorded Investment	$ 10,332	$ 18,448
Impaired Loans, With No Related Allowance, Total Interest Income	29	815
Impaired Loans, With A Related Allowance, Average Recorded Investment	6,632	6,454
Impaired Loans, With A Related Allowance, Total Interest Income	0	8
Impaired Loans, Total, Average Recorded Investment	16,964	24,902
Impaired Loans, Total, Total Interest Income	29	823
Commercial Related Loans [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Related Allowance, Average Recorded Investment	8,976	17,468
Impaired Loans, With No Related Allowance, Total Interest Income	8	760
Impaired Loans, With A Related Allowance, Average Recorded Investment	6,632	6,174
Impaired Loans, With A Related Allowance, Total Interest Income	0	0
Impaired Loans, Total, Average Recorded Investment	15,608	23,642
Impaired Loans, Total, Total Interest Income	8	760
Commercial Related Loans [Member] | Construction/Builder & Developer [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Related Allowance, Average Recorded Investment	982	986
Impaired Loans, With No Related Allowance, Total Interest Income	0	0
Impaired Loans, With A Related Allowance, Average Recorded Investment	1,492	746
Impaired Loans, With A Related Allowance, Total Interest Income	0	0
Impaired Loans, Total, Average Recorded Investment	2,474	1,732
Impaired Loans, Total, Total Interest Income	0	0
Commercial Related Loans [Member] | Commercial Real Estate Investor [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Related Allowance, Average Recorded Investment	2,855	2,993
Impaired Loans, With No Related Allowance, Total Interest Income	4	18
Impaired Loans, With A Related Allowance, Average Recorded Investment	0	469
Impaired Loans, With A Related Allowance, Total Interest Income	0	0
Impaired Loans, Total, Average Recorded Investment	2,855	3,462
Impaired Loans, Total, Total Interest Income	4	18
Commercial Related Loans [Member] | Residential Real Estate Investor [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Related Allowance, Average Recorded Investment	711	466
Impaired Loans, With No Related Allowance, Total Interest Income	4	27
Impaired Loans, With A Related Allowance, Average Recorded Investment	213	106
Impaired Loans, With A Related Allowance, Total Interest Income	0	0
Impaired Loans, Total, Average Recorded Investment	924	572
Impaired Loans, Total, Total Interest Income	4	27
Commercial Related Loans [Member] | Hotel/Motel [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Related Allowance, Average Recorded Investment	0	6,067
Impaired Loans, With No Related Allowance, Total Interest Income	0	0
Impaired Loans, With A Related Allowance, Average Recorded Investment	0	0
Impaired Loans, With A Related Allowance, Total Interest Income	0	0
Impaired Loans, Total, Average Recorded Investment	0	6,067
Impaired Loans, Total, Total Interest Income	0	0
Commercial Related Loans [Member] | Wholesale & Retail [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Related Allowance, Average Recorded Investment	0	0
Impaired Loans, With No Related Allowance, Total Interest Income	0	0
Impaired Loans, With A Related Allowance, Average Recorded Investment	0	0
Impaired Loans, With A Related Allowance, Total Interest Income	0	0
Impaired Loans, Total, Average Recorded Investment	0	0
Impaired Loans, Total, Total Interest Income	0	0
Commercial Related Loans [Member] | Manufacturing [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Related Allowance, Average Recorded Investment	4,023	4,478
Impaired Loans, With No Related Allowance, Total Interest Income	0	37
Impaired Loans, With A Related Allowance, Average Recorded Investment	0	0
Impaired Loans, With A Related Allowance, Total Interest Income	0	0
Impaired Loans, Total, Average Recorded Investment	4,023	4,478
Impaired Loans, Total, Total Interest Income	0	37
Commercial Related Loans [Member] | Agriculture [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Related Allowance, Average Recorded Investment	405	1,482
Impaired Loans, With No Related Allowance, Total Interest Income	0	501
Impaired Loans, With A Related Allowance, Average Recorded Investment	748	771
Impaired Loans, With A Related Allowance, Total Interest Income	0	0
Impaired Loans, Total, Average Recorded Investment	1,153	2,253
Impaired Loans, Total, Total Interest Income	0	501
Commercial Related Loans [Member] | Service [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Related Allowance, Average Recorded Investment	0	0
Impaired Loans, With No Related Allowance, Total Interest Income	0	0
Impaired Loans, With A Related Allowance, Average Recorded Investment	0	486
Impaired Loans, With A Related Allowance, Total Interest Income	0	0
Impaired Loans, Total, Average Recorded Investment	0	486
Impaired Loans, Total, Total Interest Income	0	0
Commercial Related Loans [Member] | Other [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Related Allowance, Average Recorded Investment	0	996
Impaired Loans, With No Related Allowance, Total Interest Income	0	177
Impaired Loans, With A Related Allowance, Average Recorded Investment	4,179	3,596
Impaired Loans, With A Related Allowance, Total Interest Income	0	0
Impaired Loans, Total, Average Recorded Investment	4,179	4,592
Impaired Loans, Total, Total Interest Income	0	177
Consumer Related Loans [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Related Allowance, Average Recorded Investment	1,356	980
Impaired Loans, With No Related Allowance, Total Interest Income	21	55
Impaired Loans, With A Related Allowance, Average Recorded Investment	0	280
Impaired Loans, With A Related Allowance, Total Interest Income	0	8
Impaired Loans, Total, Average Recorded Investment	1,356	1,260
Impaired Loans, Total, Total Interest Income	21	63
Consumer Related Loans [Member] | Residential Mortgages [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Related Allowance, Average Recorded Investment	842	452
Impaired Loans, With No Related Allowance, Total Interest Income	6	13
Impaired Loans, With A Related Allowance, Average Recorded Investment	0	280
Impaired Loans, With A Related Allowance, Total Interest Income	0	8
Impaired Loans, Total, Average Recorded Investment	842	732
Impaired Loans, Total, Total Interest Income	6	21
Consumer Related Loans [Member] | Revolving/Home Equity [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Related Allowance, Average Recorded Investment	470	459
Impaired Loans, With No Related Allowance, Total Interest Income	0	27
Impaired Loans, With A Related Allowance, Average Recorded Investment	0	0
Impaired Loans, With A Related Allowance, Total Interest Income	0	0
Impaired Loans, Total, Average Recorded Investment	470	459
Impaired Loans, Total, Total Interest Income	0	27
Consumer Related Loans [Member] | Other [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, With No Related Allowance, Average Recorded Investment	44	69
Impaired Loans, With No Related Allowance, Total Interest Income	15	15
Impaired Loans, With A Related Allowance, Average Recorded Investment	0	0
Impaired Loans, With A Related Allowance, Total Interest Income	0	0
Impaired Loans, Total, Average Recorded Investment	44	69
Impaired Loans, Total, Total Interest Income	$ 15	$ 15

XML

Loans and Allowance For Credit Losses (Summary of Allowance Amount for Loans Individually and Collectively Evaluated for Impairment) (Details) - USD ($) $ in Thousands	Sep. 30, 2023		Jun. 30, 2023	Dec. 31, 2022
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Individually Evaluated For Impairment				$ 2,484
Allowance for Loan Losses, Collectively Evaluated For Impairment				18,252
Allowance for credit loss	$ 21,449	[1]	$ 20,681	20,736	[1]
Loans, Individually Evaluated For Impairment				12,183
Loans, Collectively Evaluated For Impairment				1,620,674
Total Past Due and Nonaccrual	$ 1,704,380			1,632,857
Commercial Related Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Individually Evaluated For Impairment				2,484
Allowance for Loan Losses, Collectively Evaluated For Impairment				17,693
Allowance for credit loss				20,177
Loans, Individually Evaluated For Impairment				10,614
Loans, Collectively Evaluated For Impairment				1,363,736
Total Past Due and Nonaccrual				1,374,350
Commercial Related Loans [Member] | Construction/Builder & Developer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Individually Evaluated For Impairment				44
Allowance for Loan Losses, Collectively Evaluated For Impairment				1,725
Allowance for credit loss				1,769
Loans, Individually Evaluated For Impairment				1,945
Loans, Collectively Evaluated For Impairment				126,382
Total Past Due and Nonaccrual				128,327
Commercial Related Loans [Member] | Commercial Real Estate Investor [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Individually Evaluated For Impairment				0
Allowance for Loan Losses, Collectively Evaluated For Impairment				4,858
Allowance for credit loss				4,858
Loans, Individually Evaluated For Impairment				500
Loans, Collectively Evaluated For Impairment				366,866
Total Past Due and Nonaccrual				367,366
Commercial Related Loans [Member] | Residential Real Estate Investor [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Individually Evaluated For Impairment				152
Allowance for Loan Losses, Collectively Evaluated For Impairment				2,661
Allowance for credit loss				2,813
Loans, Individually Evaluated For Impairment				856
Loans, Collectively Evaluated For Impairment				262,406
Total Past Due and Nonaccrual				263,262
Commercial Related Loans [Member] | Hotel/Motel [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Individually Evaluated For Impairment				0
Allowance for Loan Losses, Collectively Evaluated For Impairment				1,658
Allowance for credit loss				1,658
Loans, Individually Evaluated For Impairment				0
Loans, Collectively Evaluated For Impairment				94,471
Total Past Due and Nonaccrual				94,471
Commercial Related Loans [Member] | Wholesale & Retail [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Individually Evaluated For Impairment				0
Allowance for Loan Losses, Collectively Evaluated For Impairment				488
Allowance for credit loss				488
Loans, Individually Evaluated For Impairment				0
Loans, Collectively Evaluated For Impairment				60,672
Total Past Due and Nonaccrual				60,672
Commercial Related Loans [Member] | Manufacturing [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Individually Evaluated For Impairment				33
Allowance for Loan Losses, Collectively Evaluated For Impairment				897
Allowance for credit loss				930
Loans, Individually Evaluated For Impairment				2,965
Loans, Collectively Evaluated For Impairment				83,628
Total Past Due and Nonaccrual				86,593
Commercial Related Loans [Member] | Agriculture [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Individually Evaluated For Impairment				655
Allowance for Loan Losses, Collectively Evaluated For Impairment				990
Allowance for credit loss				1,645
Loans, Individually Evaluated For Impairment				912
Loans, Collectively Evaluated For Impairment				90,537
Total Past Due and Nonaccrual				91,449
Commercial Related Loans [Member] | Service [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Individually Evaluated For Impairment				0
Allowance for Loan Losses, Collectively Evaluated For Impairment				1,064
Allowance for credit loss				1,064
Loans, Individually Evaluated For Impairment				0
Loans, Collectively Evaluated For Impairment				73,094
Total Past Due and Nonaccrual				73,094
Commercial Related Loans [Member] | Other [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Individually Evaluated For Impairment				1,600
Allowance for Loan Losses, Collectively Evaluated For Impairment				3,352
Allowance for credit loss				4,952
Loans, Individually Evaluated For Impairment				3,436
Loans, Collectively Evaluated For Impairment				205,680
Total Past Due and Nonaccrual				209,116
Consumer Related Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Individually Evaluated For Impairment				0
Allowance for Loan Losses, Collectively Evaluated For Impairment				559
Allowance for credit loss				559
Loans, Individually Evaluated For Impairment				1,569
Loans, Collectively Evaluated For Impairment				256,938
Total Past Due and Nonaccrual				258,507
Consumer Related Loans [Member] | Residential Mortgages [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Individually Evaluated For Impairment				0
Allowance for Loan Losses, Collectively Evaluated For Impairment				270
Allowance for credit loss				270
Loans, Individually Evaluated For Impairment				1,112
Loans, Collectively Evaluated For Impairment				134,228
Total Past Due and Nonaccrual				135,340
Consumer Related Loans [Member] | Revolving/Home Equity [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Individually Evaluated For Impairment				0
Allowance for Loan Losses, Collectively Evaluated For Impairment				207
Allowance for credit loss				207
Loans, Individually Evaluated For Impairment				457
Loans, Collectively Evaluated For Impairment				97,573
Total Past Due and Nonaccrual				98,030
Consumer Related Loans [Member] | Other [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Individually Evaluated For Impairment				0
Allowance for Loan Losses, Collectively Evaluated For Impairment				82
Allowance for credit loss				82
Loans, Individually Evaluated For Impairment				0
Loans, Collectively Evaluated For Impairment				25,137
Total Past Due and Nonaccrual				25,137
Unallocated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Individually Evaluated For Impairment				0
Allowance for Loan Losses, Collectively Evaluated For Impairment				0
Allowance for credit loss				0
Loans, Individually Evaluated For Impairment				0
Loans, Collectively Evaluated For Impairment				0
Total Past Due and Nonaccrual				$ 0

[1] Results of reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP.

XML

Loans and Allowance for Credit Losses (Summary of Loan Risk Ratings by Loan Class) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Financing Receivable, Recorded Investment [Line Items]
2023	$ 200,413
2022	425,542
2021	313,839
2020	171,016
2019	110,617
Prior	314,353
Revolving Amortized Basis	168,600
Revolving converted Loans Cost Basis	0
Total	1,704,380	$ 1,632,857
Gross write-offs:
2023	0
2022	(28)
2021	0
2020	(17)
2019	0
Prior	(1,660)
Revolving Amortized Basis	(280)
Revolving converted Loans Cost Basis	0
Total	(1,985)
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	199,985
2022	423,894
2021	305,869
2020	164,164
2019	109,417
Prior	293,154
Revolving Amortized Basis	154,646
Revolving converted Loans Cost Basis	0
Total	1,651,129	1,591,337
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	140
2022	605
2021	1,247
2020	4,250
2019	563
Prior	8,050
Revolving Amortized Basis	4,416
Revolving converted Loans Cost Basis	0
Total	19,271	10,088
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	288
2022	649
2021	4,047
2020	2,552
2019	12
Prior	11,161
Revolving Amortized Basis	7,666
Revolving converted Loans Cost Basis	0
Total	26,375	20,462
Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	394
2021	2,676
2020	50
2019	625
Prior	1,988
Revolving Amortized Basis	1,872
Revolving converted Loans Cost Basis	0
Total	7,605	10,970
Commercial Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	14,234
2022	45,264
2021	19,382
2020	4,725
2019	11,960
Prior	12,198
Revolving Amortized Basis	63,727
Revolving converted Loans Cost Basis	0
Total	171,490	0
Gross write-offs:
2023	0
2022	(26)
2021	0
2020	(15)
2019	0
Prior	(968)
Revolving Amortized Basis	(239)
Revolving converted Loans Cost Basis	0
Total	(1,248)
Commercial Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	14,196
2022	44,255
2021	15,949
2020	4,712
2019	10,760
Prior	9,893
Revolving Amortized Basis	51,716
Revolving converted Loans Cost Basis	0
Total	151,481
Commercial Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	50
2020	0
2019	563
Prior	137
Revolving Amortized Basis	3,374
Revolving converted Loans Cost Basis	0
Total	4,124
Commercial Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	38
2022	649
2021	2,784
2020	13
2019	12
Prior	1,168
Revolving Amortized Basis	7,237
Revolving converted Loans Cost Basis	0
Total	11,901
Commercial Loans [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	360
2021	599
2020	0
2019	625
Prior	1,000
Revolving Amortized Basis	1,400
Revolving converted Loans Cost Basis	0
Total	3,984
Commercial Real Estate [Member] | Construction/Builder & Developer [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	41,980
2022	75,526
2021	31,133
2020	16,010
2019	7,966
Prior	8,514
Revolving Amortized Basis	3,831
Revolving converted Loans Cost Basis	0
Total	184,960	0
Gross write-offs:
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	0
Commercial Real Estate [Member] | Construction/Builder & Developer [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	41,980
2022	74,921
2021	31,133
2020	11,922
2019	7,966
Prior	8,474
Revolving Amortized Basis	2,831
Revolving converted Loans Cost Basis	0
Total	179,227
Commercial Real Estate [Member] | Construction/Builder & Developer [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	605
2021	0
2020	1,679
2019	0
Prior	0
Revolving Amortized Basis	1,000
Revolving converted Loans Cost Basis	0
Total	3,284
Commercial Real Estate [Member] | Construction/Builder & Developer [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	0
2020	2,409
2019	0
Prior	0
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	2,409
Commercial Real Estate [Member] | Construction/Builder & Developer [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	40
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	40
Commercial Real Estate [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	33,823
2022	60,051
2021	69,429
2020	27,176
2019	34,689
Prior	105,457
Revolving Amortized Basis	17,232
Revolving converted Loans Cost Basis	0
Total	347,857	0
Gross write-offs:
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	(683)
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	(683)
Commercial Real Estate [Member] | Owner Occupied [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	33,433
2022	60,051
2021	66,381
2020	24,657
2019	34,689
Prior	94,644
Revolving Amortized Basis	16,803
Revolving converted Loans Cost Basis	0
Total	330,658
Commercial Real Estate [Member] | Owner Occupied [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	140
2022	0
2021	0
2020	2,519
2019	0
Prior	4,151
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	6,810
Commercial Real Estate [Member] | Owner Occupied [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	250
2022	0
2021	1,263
2020	0
2019	0
Prior	6,404
Revolving Amortized Basis	429
Revolving converted Loans Cost Basis	0
Total	8,346
Commercial Real Estate [Member] | Owner Occupied [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	1,785
2020	0
2019	0
Prior	258
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	2,043
Commercial Real Estate [Member] | Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	33,056
2022	120,640
2021	112,396
2020	63,391
2019	11,542
Prior	113,120
Revolving Amortized Basis	1,439
Revolving converted Loans Cost Basis	0
Total	455,584	0
Gross write-offs:
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	0
Commercial Real Estate [Member] | Non-Owner Occupied [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	33,056
2022	120,640
2021	111,199
2020	63,341
2019	11,542
Prior	111,059
Revolving Amortized Basis	1,439
Revolving converted Loans Cost Basis	0
Total	452,276
Commercial Real Estate [Member] | Non-Owner Occupied [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	1,197
2020	0
2019	0
Prior	950
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	2,147
Commercial Real Estate [Member] | Non-Owner Occupied [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	957
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	957
Commercial Real Estate [Member] | Non-Owner Occupied [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	0
2020	50
2019	0
Prior	154
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	204
Commercial Real Estate [Member] | Commercial Real Estate Investor [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		367,366
Commercial Real Estate [Member] | Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	455,584
Residential Real Estate [Member] | Construction/Builder & Developer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	29,132	0
Residential Real Estate [Member] | Residential Mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	8,388
2022	13,824
2021	2,155
2020	972
2019	1,556
Prior	540
Revolving Amortized Basis	1,697
Revolving converted Loans Cost Basis	0
Total	29,132
Gross write-offs:
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	0
Residential Real Estate [Member] | Residential Mortgages [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	8,388
2022	13,824
2021	2,155
2020	972
2019	1,556
Prior	540
Revolving Amortized Basis	1,697
Revolving converted Loans Cost Basis	0
Total	29,132
Residential Real Estate [Member] | Residential Mortgages [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	0
Residential Real Estate [Member] | Residential Mortgages [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	0
Residential Real Estate [Member] | Residential Mortgages [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	0
Residential Real Estate [Member] | Revolving/Home Equity [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	9,616
2022	16,496
2021	1,099
2020	333
2019	638
Prior	2,102
Revolving Amortized Basis	74,885
Revolving converted Loans Cost Basis	0
Total	105,169	0
Gross write-offs:
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	(8)
Revolving Amortized Basis	(19)
Revolving converted Loans Cost Basis	0
Total	(27)
Residential Real Estate [Member] | Revolving/Home Equity [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	9,616
2022	16,462
2021	1,099
2020	333
2019	638
Prior	2,102
Revolving Amortized Basis	74,413
Revolving converted Loans Cost Basis	0
Total	104,663
Residential Real Estate [Member] | Revolving/Home Equity [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	0
Residential Real Estate [Member] | Revolving/Home Equity [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	0
Residential Real Estate [Member] | Revolving/Home Equity [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	34
2021	0
2020	0
2019	0
Prior	0
Revolving Amortized Basis	472
Revolving converted Loans Cost Basis	0
Total	506
Residential Real Estate [Member] | Multi Family [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	5,418
2022	26,836
2021	32,980
2020	19,625
2019	23,934
Prior	13,669
Revolving Amortized Basis	1,003
Revolving converted Loans Cost Basis	0
Total	123,465	0
Gross write-offs:
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	0
Residential Real Estate [Member] | Multi Family [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	5,418
2022	26,836
2021	32,980
2020	19,625
2019	23,934
Prior	9,442
Revolving Amortized Basis	1,003
Revolving converted Loans Cost Basis	0
Total	119,238
Residential Real Estate [Member] | Multi Family [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	1,800
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	1,800
Residential Real Estate [Member] | Multi Family [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	2,427
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	2,427
Residential Real Estate [Member] | Multi Family [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	0
Residential Real Estate [Member] | Other [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	50,055
2022	63,283
2021	43,557
2020	38,580
2019	18,221
Prior	58,476
Revolving Amortized Basis	998
Revolving converted Loans Cost Basis	0
Total	273,170	0
Gross write-offs:
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	0
Residential Real Estate [Member] | Other [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	50,055
2022	63,283
2021	43,265
2020	38,398
2019	18,221
Prior	56,723
Revolving Amortized Basis	956
Revolving converted Loans Cost Basis	0
Total	270,901
Residential Real Estate [Member] | Other [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	0
2020	52
2019	0
Prior	1,012
Revolving Amortized Basis	42
Revolving converted Loans Cost Basis	0
Total	1,106
Residential Real Estate [Member] | Other [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	0
2020	130
2019	0
Prior	205
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	335
Residential Real Estate [Member] | Other [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	292
2020	0
2019	0
Prior	536
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	828
Consumer Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	3,843
2022	3,622
2021	1,708
2020	204
2019	111
Prior	277
Revolving Amortized Basis	3,788
Revolving converted Loans Cost Basis	0
Total	13,553	0
Gross write-offs:
2023	0
2022	(2)
2021	0
2020	(2)
2019	0
Prior	(1)
Revolving Amortized Basis	(22)
Revolving converted Loans Cost Basis	0
Total	(27)
Consumer Loan [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	3,843
2022	3,622
2021	1,708
2020	204
2019	111
Prior	277
Revolving Amortized Basis	3,788
Revolving converted Loans Cost Basis	0
Total	13,553
Consumer Loan [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	0
Consumer Loan [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	0
Consumer Loan [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Amortized Basis	0
Revolving converted Loans Cost Basis	0
Total	$ 0
Commercial Related Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		1,374,350
Commercial Related Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		1,333,777
Commercial Related Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		10,088
Commercial Related Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		20,321
Commercial Related Loans [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		10,164
Commercial Related Loans [Member] | Construction/Builder & Developer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		128,327
Commercial Related Loans [Member] | Construction/Builder & Developer [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		124,572
Commercial Related Loans [Member] | Construction/Builder & Developer [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		1,010
Commercial Related Loans [Member] | Construction/Builder & Developer [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		972
Commercial Related Loans [Member] | Construction/Builder & Developer [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		1,773
Commercial Related Loans [Member] | Commercial Real Estate Investor [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		367,366
Commercial Related Loans [Member] | Commercial Real Estate Investor [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		367,144
Commercial Related Loans [Member] | Commercial Real Estate Investor [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		0
Commercial Related Loans [Member] | Commercial Real Estate Investor [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		0
Commercial Related Loans [Member] | Commercial Real Estate Investor [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		222
Commercial Related Loans [Member] | Residential Real Estate Investor [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		263,262
Commercial Related Loans [Member] | Residential Real Estate Investor [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		262,406
Commercial Related Loans [Member] | Residential Real Estate Investor [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		0
Commercial Related Loans [Member] | Residential Real Estate Investor [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		0
Commercial Related Loans [Member] | Residential Real Estate Investor [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		856
Commercial Related Loans [Member] | Hotel/Motel [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		94,471
Commercial Related Loans [Member] | Hotel/Motel [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		89,710
Commercial Related Loans [Member] | Hotel/Motel [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		0
Commercial Related Loans [Member] | Hotel/Motel [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		4,761
Commercial Related Loans [Member] | Hotel/Motel [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		0
Commercial Related Loans [Member] | Wholesale & Retail [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		60,672
Commercial Related Loans [Member] | Wholesale & Retail [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		59,930
Commercial Related Loans [Member] | Wholesale & Retail [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		56
Commercial Related Loans [Member] | Wholesale & Retail [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		686
Commercial Related Loans [Member] | Wholesale & Retail [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		0
Commercial Related Loans [Member] | Manufacturing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		86,593
Commercial Related Loans [Member] | Manufacturing [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		81,552
Commercial Related Loans [Member] | Manufacturing [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		1,444
Commercial Related Loans [Member] | Manufacturing [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		632
Commercial Related Loans [Member] | Manufacturing [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		2,965
Commercial Related Loans [Member] | Agriculture [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		91,449
Commercial Related Loans [Member] | Agriculture [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		87,896
Commercial Related Loans [Member] | Agriculture [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		2,260
Commercial Related Loans [Member] | Agriculture [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		381
Commercial Related Loans [Member] | Agriculture [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		912
Commercial Related Loans [Member] | Service [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		73,094
Commercial Related Loans [Member] | Service [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		68,373
Commercial Related Loans [Member] | Service [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		384
Commercial Related Loans [Member] | Service [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		4,337
Commercial Related Loans [Member] | Service [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		0
Commercial Related Loans [Member] | Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		209,116
Commercial Related Loans [Member] | Other [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		192,194
Commercial Related Loans [Member] | Other [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		4,934
Commercial Related Loans [Member] | Other [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		8,552
Commercial Related Loans [Member] | Other [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		3,436
Consumer Related Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		258,507
Consumer Related Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		257,560
Consumer Related Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		0
Consumer Related Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		141
Consumer Related Loans [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		806
Consumer Related Loans [Member] | Residential Mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		135,340
Consumer Related Loans [Member] | Residential Mortgages [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		134,850
Consumer Related Loans [Member] | Residential Mortgages [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		0
Consumer Related Loans [Member] | Residential Mortgages [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		141
Consumer Related Loans [Member] | Residential Mortgages [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		349
Consumer Related Loans [Member] | Revolving/Home Equity [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		98,030
Consumer Related Loans [Member] | Revolving/Home Equity [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		97,573
Consumer Related Loans [Member] | Revolving/Home Equity [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		0
Consumer Related Loans [Member] | Revolving/Home Equity [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		0
Consumer Related Loans [Member] | Revolving/Home Equity [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		457
Consumer Related Loans [Member] | Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		25,137
Consumer Related Loans [Member] | Other [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		25,137
Consumer Related Loans [Member] | Other [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		0
Consumer Related Loans [Member] | Other [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		0
Consumer Related Loans [Member] | Other [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		$ 0

XML

Loans and Allowance for Credit Losses (Summary of Past Due Loans, Nonaccrual Loans and Current Loans by Loan Segment and Class) (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	$ 1,704,380	$ 1,632,857
Nonaccrual	7,605	10,970
Total Past Due and Nonaccrual	9,607	15,173
30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	323	4,067
60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	1,679	136
Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0	0
Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	1,694,773	1,617,684
Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	171,490	0
Nonaccrual	3,984
Total Past Due and Nonaccrual	4,034
Commercial Loans [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	50
Commercial Loans [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Commercial Loans [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Commercial Loans [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	167,456
Commercial Real Estate [Member] | Construction/Builder & Developer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	184,960	0
Nonaccrual	40
Total Past Due and Nonaccrual	1,719
Commercial Real Estate [Member] | Construction/Builder & Developer [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Commercial Real Estate [Member] | Construction/Builder & Developer [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	1,679
Commercial Real Estate [Member] | Construction/Builder & Developer [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Commercial Real Estate [Member] | Construction/Builder & Developer [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	183,241
Commercial Real Estate [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	347,857	0
Nonaccrual	2,043
Total Past Due and Nonaccrual	2,043
Commercial Real Estate [Member] | Owner Occupied [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Commercial Real Estate [Member] | Owner Occupied [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Commercial Real Estate [Member] | Owner Occupied [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Commercial Real Estate [Member] | Owner Occupied [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	345,814
Commercial Real Estate [Member] | Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	455,584	0
Commercial Real Estate [Member] | Commercial Real Estate Investor [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		367,366
Commercial Real Estate [Member] | Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	455,584
Nonaccrual	204
Total Past Due and Nonaccrual	204
Commercial Real Estate [Member] | Other [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Commercial Real Estate [Member] | Other [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Commercial Real Estate [Member] | Other [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Commercial Real Estate [Member] | Other [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	455,380
Residential Real Estate [Member] | Construction/Builder & Developer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	29,132	0
Nonaccrual	0
Total Past Due and Nonaccrual	0
Residential Real Estate [Member] | Construction/Builder & Developer [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Residential Real Estate [Member] | Construction/Builder & Developer [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Residential Real Estate [Member] | Construction/Builder & Developer [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Residential Real Estate [Member] | Construction/Builder & Developer [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	29,132
Residential Real Estate [Member] | Residential Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	29,132
Residential Real Estate [Member] | Revolving/Home Equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	105,169	0
Nonaccrual	506
Total Past Due and Nonaccrual	752
Residential Real Estate [Member] | Revolving/Home Equity [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	246
Residential Real Estate [Member] | Revolving/Home Equity [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Residential Real Estate [Member] | Revolving/Home Equity [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Residential Real Estate [Member] | Revolving/Home Equity [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	104,417
Residential Real Estate [Member] | Multi Family [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	123,465	0
Nonaccrual	0
Total Past Due and Nonaccrual	0
Residential Real Estate [Member] | Multi Family [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Residential Real Estate [Member] | Multi Family [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Residential Real Estate [Member] | Multi Family [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Residential Real Estate [Member] | Multi Family [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	123,465
Residential Real Estate [Member] | Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	273,170	0
Nonaccrual	828
Total Past Due and Nonaccrual	831
Residential Real Estate [Member] | Other [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	3
Residential Real Estate [Member] | Other [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Residential Real Estate [Member] | Other [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Residential Real Estate [Member] | Other [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	272,339
Consumer Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	13,553	0
Nonaccrual	0
Total Past Due and Nonaccrual	24
Consumer Loan [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	24
Consumer Loan [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Consumer Loan [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	0
Consumer Loan [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	$ 13,529
Commercial Related Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		1,374,350
Nonaccrual		10,164
Total Past Due and Nonaccrual		13,672
Commercial Related Loans [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		3,508
Commercial Related Loans [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		1,360,678
Commercial Related Loans [Member] | Construction/Builder & Developer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		128,327
Nonaccrual		1,773
Total Past Due and Nonaccrual		5,273
Commercial Related Loans [Member] | Construction/Builder & Developer [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		3,500
Commercial Related Loans [Member] | Construction/Builder & Developer [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Construction/Builder & Developer [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Construction/Builder & Developer [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		123,054
Commercial Related Loans [Member] | Commercial Real Estate Investor [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		367,366
Nonaccrual		222
Total Past Due and Nonaccrual		222
Commercial Related Loans [Member] | Commercial Real Estate Investor [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Commercial Real Estate Investor [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Commercial Real Estate Investor [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Commercial Real Estate Investor [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		367,144
Commercial Related Loans [Member] | Residential Real Estate Investor [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		263,262
Nonaccrual		856
Total Past Due and Nonaccrual		856
Commercial Related Loans [Member] | Residential Real Estate Investor [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Residential Real Estate Investor [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Residential Real Estate Investor [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Residential Real Estate Investor [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		262,406
Commercial Related Loans [Member] | Hotel/Motel [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		94,471
Nonaccrual		0
Total Past Due and Nonaccrual		0
Commercial Related Loans [Member] | Hotel/Motel [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Hotel/Motel [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Hotel/Motel [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Hotel/Motel [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		94,471
Commercial Related Loans [Member] | Wholesale & Retail [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		60,672
Nonaccrual		0
Total Past Due and Nonaccrual		0
Commercial Related Loans [Member] | Wholesale & Retail [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Wholesale & Retail [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Wholesale & Retail [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Wholesale & Retail [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		60,672
Commercial Related Loans [Member] | Manufacturing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		86,593
Nonaccrual		2,965
Total Past Due and Nonaccrual		2,965
Commercial Related Loans [Member] | Manufacturing [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Manufacturing [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Manufacturing [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Manufacturing [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		83,628
Commercial Related Loans [Member] | Agriculture [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		91,449
Nonaccrual		912
Total Past Due and Nonaccrual		920
Commercial Related Loans [Member] | Agriculture [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		8
Commercial Related Loans [Member] | Agriculture [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Agriculture [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Agriculture [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		90,529
Commercial Related Loans [Member] | Service [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		73,094
Nonaccrual		0
Total Past Due and Nonaccrual		0
Commercial Related Loans [Member] | Service [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Service [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Service [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Service [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		73,094
Commercial Related Loans [Member] | Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		209,116
Nonaccrual		3,436
Total Past Due and Nonaccrual		3,436
Commercial Related Loans [Member] | Other [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Other [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Other [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Commercial Related Loans [Member] | Other [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		205,680
Consumer Related Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		258,507
Nonaccrual		806
Total Past Due and Nonaccrual		1,501
Consumer Related Loans [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		559
Consumer Related Loans [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		136
Consumer Related Loans [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Consumer Related Loans [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		257,006
Consumer Related Loans [Member] | Residential Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		135,340
Nonaccrual		349
Total Past Due and Nonaccrual		556
Consumer Related Loans [Member] | Residential Mortgages [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		207
Consumer Related Loans [Member] | Residential Mortgages [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Consumer Related Loans [Member] | Residential Mortgages [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Consumer Related Loans [Member] | Residential Mortgages [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		134,784
Consumer Related Loans [Member] | Revolving/Home Equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		98,030
Nonaccrual		457
Total Past Due and Nonaccrual		896
Consumer Related Loans [Member] | Revolving/Home Equity [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		345
Consumer Related Loans [Member] | Revolving/Home Equity [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		94
Consumer Related Loans [Member] | Revolving/Home Equity [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Consumer Related Loans [Member] | Revolving/Home Equity [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		97,134
Consumer Related Loans [Member] | Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		25,137
Nonaccrual		0
Total Past Due and Nonaccrual		49
Consumer Related Loans [Member] | Other [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		7
Consumer Related Loans [Member] | Other [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		42
Consumer Related Loans [Member] | Other [Member] | Greater Than Or Equal To 90 Days Past Due And Accruing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		0
Consumer Related Loans [Member] | Other [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans		$ 25,088

XML

Loans and Allowance for Credit Losses (Summary of Amortized Cost and Percent of Loans) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Financing Receivable, Modifications [Line Items]
Amortized cost of financing receivable modified during period, percent	0.20%	0.41%
Payment Delay and Term Extension [Member]
Financing Receivable, Modifications [Line Items]
Amortized cost of financing receivable modified during period	$ 3,479	$ 3,479
Term Extension [Member]
Financing Receivable, Modifications [Line Items]
Amortized cost of financing receivable modified during period		$ 3,533
Commercial Loans [Member]
Financing Receivable, Modifications [Line Items]
Amortized cost of financing receivable modified during period, percent		1.02%
Commercial Loans [Member] | Payment Delay and Term Extension [Member]
Financing Receivable, Modifications [Line Items]
Amortized cost of financing receivable modified during period		$ 0
Commercial Loans [Member] | Term Extension [Member]
Financing Receivable, Modifications [Line Items]
Amortized cost of financing receivable modified during period		$ 1,748
Commercial Real Estate [Member] | Construction/Builder & Developer [Member]
Financing Receivable, Modifications [Line Items]
Amortized cost of financing receivable modified during period, percent	0.91%	0.91%
Commercial Real Estate [Member] | Construction/Builder & Developer [Member] | Payment Delay and Term Extension [Member]
Financing Receivable, Modifications [Line Items]
Amortized cost of financing receivable modified during period	$ 1,679	$ 1,679
Commercial Real Estate [Member] | Construction/Builder & Developer [Member] | Term Extension [Member]
Financing Receivable, Modifications [Line Items]
Amortized cost of financing receivable modified during period		$ 0
Commercial Real Estate [Member] | Owner Occupied [Member]
Financing Receivable, Modifications [Line Items]
Amortized cost of financing receivable modified during period, percent		0.51%
Commercial Real Estate [Member] | Owner Occupied [Member] | Payment Delay and Term Extension [Member]
Financing Receivable, Modifications [Line Items]
Amortized cost of financing receivable modified during period		$ 0
Commercial Real Estate [Member] | Owner Occupied [Member] | Term Extension [Member]
Financing Receivable, Modifications [Line Items]
Amortized cost of financing receivable modified during period		$ 1,785
Residential Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Amortized cost of financing receivable modified during period, percent		1.46%
Residential Real Estate [Member] | Payment Delay and Term Extension [Member]
Financing Receivable, Modifications [Line Items]
Amortized cost of financing receivable modified during period		$ 1,800
Residential Real Estate [Member] | Term Extension [Member]
Financing Receivable, Modifications [Line Items]
Amortized cost of financing receivable modified during period		$ 0
Residential Real Estate [Member] | Multi Family [Member]
Financing Receivable, Modifications [Line Items]
Amortized cost of financing receivable modified during period, percent	1.46%
Residential Real Estate [Member] | Multi Family [Member] | Payment Delay and Term Extension [Member]
Financing Receivable, Modifications [Line Items]
Amortized cost of financing receivable modified during period	$ 1,800

XML

Loans and Allowance for Credit Losses (Summary of Financial Effect of Loan Modification) (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Term Extension [Member] | Commercial Loans [Member]
Financing Receivable, Modifications [Line Items]
Weighted-Average Term Extension		8 months
Term Extension [Member] | Commercial Real Estate [Member] | Construction/Builder & Developer [Member]
Financing Receivable, Modifications [Line Items]
Weighted-Average Term Extension		0 months
Term Extension [Member] | Commercial Real Estate [Member] | Owner Occupied [Member]
Financing Receivable, Modifications [Line Items]
Weighted-Average Term Extension		8 months
Term Extension [Member] | Residential Real Estate [Member] | Multi Family [Member]
Financing Receivable, Modifications [Line Items]
Weighted-Average Term Extension		0 months
Payment Delay and Term Extension [Member] | Commercial Loans [Member]
Financing Receivable, Modifications [Line Items]
Weighted-Average Term Extension		0 months
Payment Delay and Term Extension [Member] | Commercial Real Estate [Member] | Construction/Builder & Developer [Member]
Financing Receivable, Modifications [Line Items]
Weighted-Average Term Extension	4 months	4 months
Payment Delay and Term Extension [Member] | Commercial Real Estate [Member] | Owner Occupied [Member]
Financing Receivable, Modifications [Line Items]
Weighted-Average Term Extension		0 months
Payment Delay and Term Extension [Member] | Residential Real Estate [Member] | Multi Family [Member]
Financing Receivable, Modifications [Line Items]
Weighted-Average Term Extension	4 months	4 months

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Deposits (Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Deposits [Abstract]
Demand deposit overdrafts reclassified as loans	$ 96	$ 122

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Deposits (Schedule of Composition of Deposits) (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Deposits [Abstract]
Noninterest bearing demand	$ 398,486	$ 463,853
Interest bearing demand	271,192	289,298
Money market	651,655	646,702
Savings	141,316	161,228
Time deposits less than $100	229,638	210,331
Time deposits $100 to $250	145,467	123,002
Time deposits $250 or more	68,624	48,805
Total deposits	$ 1,906,378	$ 1,943,219

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Short-Term Borrowings and Long-Term Debt (Narrative) (Details) - USD ($)	1 Months Ended			9 Months Ended
	Dec. 31, 2020	Jun. 30, 2006	Nov. 30, 2004	Sep. 30, 2023	Dec. 31, 2022
Securities sold under agreements to repurchase				$ 13,224,000	$ 11,605,000
Other short-term borrowings				$ 25,875,000	0
CVB Statutory Trust No. 2 [Member]
Pooled trust preferred debt issuance		$ 7,217,000
CVB Statutory Trust No. 1 [Member]
Pooled trust preferred debt issuance			$ 3,093,000
Federal Home Loan Bank [Member]
Debt instrument variable interest rate				5.68%
Subordinated Notes [Member]
Debt instrument face amount	$ 31,000,000			$ 31,000,000	$ 31,000,000
Debt instrument redemption integral multiples amount	$ 10,000
Debt instrument redemption start date				Dec. 09, 2025
Debt instrument redemption percentage prior to maturity date	100.00%
Debt instrument maturity date				Dec. 09, 2030
Debt instrument interest rate	4.50%
Subordinated Notes [Member] | SOFR (Secured Overnight Financing Rate) [Member]
Debt instrument basis spread	4.04%

XML

Short-Term Borrowings and Long-Term Debt (Summary of Long-Term Debt) (Details) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
	Dec. 31, 2020	Sep. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Total long-term debt		$ 42,353	$ 42,314
Finance lease liabilities		1,218	1,240
Junior Subordinated Debt [Member]
Debt Instrument [Line Items]
Total long-term debt		11,528	11,550
Subordinated Notes [Member]
Debt Instrument [Line Items]
Interest rate	4.50%
SOFR (Secured Overnight Financing Rate) [Member] | Subordinated Notes [Member]
Debt Instrument [Line Items]
Debt instrument basis spread	4.04%
Due 2034, 7.69% [Member] | Junior Subordinated Debt [Member]
Debt Instrument [Line Items]
Total long-term debt		$ 3,093	3,093
Interest rate		7.69%
Debt instrument basis spread		2.02%
Long-term debt year due		2034
Due 2036, 7.11% [Member] | Junior Subordinated Debt [Member]
Debt Instrument [Line Items]
Total long-term debt		$ 7,217	7,217
Interest rate		7.11%
Debt instrument basis spread		1.54%
Long-term debt year due		2036
Due 2030, 4.50% [Member] | Subordinated Notes [Member]
Debt Instrument [Line Items]
Total long-term debt		$ 30,825	$ 30,764
Interest rate		4.50%
Long-term debt year due		2030

XML

Leases (Narrative) (Details)	9 Months Ended
	Sep. 30, 2023 property contract
Number of finance leases | contract	1
Number of financial centers under finance leases | property	1
Operating Lease [Member] | Minimum [Member]
Lessee operating leases remaining lease terms	1 year
Operating Lease [Member] | Maximum [Member]
Lessee operating leases remaining lease terms	25 years

XML

Leases (Components of Lease Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating lease cost	$ 171	$ 190	$ 519	$ 581
Finance lease cost:
Amortization of right-of-use assets	12	12	36	36
Interest on lease liability	11	12	33	36
Total finance lease cost	23	24	69	72
Total lease cost	$ 194	$ 214	$ 588	$ 653

XML

Leases (Supplemental Cash Flow Information Related to Leases) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating cash flows from operating leases	$ 540	$ 547
Operating cash flows from financing leases	33	35
Financing cash flows from financing leases	24	21
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	0	2,061
Finance leases	$ 0	$ 0

XML

Leases (Supplemental Balance Sheet Information Related to Leases) (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Assets:
Operating leases right-of-use assets	$ 2,618	$ 3,072
Finance leases assets	959	994
Total lease assets	3,577	4,066
Liabilities:
Operating	2,726	3,204
Financing	1,218	1,240
Total lease liabilities	$ 3,944	$ 4,444
Weighted Average Remaining Lease Term (years)
Operating leases	6 years 7 months 6 days	6 years 10 months 24 days
Finance leases	20 years 4 months 24 days	21 years 2 months 12 days
Weighted Average Discount Rate
Operating leases	2.08%	2.14%
Finance leases	3.69%	3.69%

XML

Leases (Future Minimum Payments for Financing Leases and Operating Leases) (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Operating Leases
2023	$ 162
2024	638	$ 701
2025	430	638
2026	324	417
2027	314	324
2027		314
Thereafter	1,037	1,036
Total lease payments	2,905	3,430
Less imputed interest	(179)	(226)
Total	2,726	3,204
Finance Leases
2023	19
2024	75	75
2025	79	75
2026	80	79
2027	80	80
2027		80
Thereafter	1,429	1,429
Total lease payments	1,762	1,818
Less imputed interest	(544)	(578)
Total	$ 1,218	$ 1,240

XML

Regulatory Matters (Narrative) (Details)	9 Months Ended
	Sep. 30, 2023
Regulatory Matters [Abstract]
Loans and advances by PeoplesBank to affiliates threshold	10.00%

XML

Regulatory Matters (Schedule of Risk-Based Capital Ratios and Leverage Ratios) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Common equity Tier 1, Actual, Amount	$ 223,708	$ 209,540
Common equity Tier 1, Minimum for Capital Adequacy, Amount	$ 125,037	$ 121,871
Common equity Tier 1, Actual, Ratio	0.1252	0.1204
Common equity Tier 1, Minimum for Capital Adequacy, Ratio	0.0700	0.0700
Tier 1 risk based, Actual, Amount	$ 233,708	$ 219,540
Tier 1 risk based, Minimum for Capital Adequacy, Amount	$ 151,831	$ 147,986
Tier 1 risk based, Actual, Ratio	0.1308	0.1261
Tier 1 risk based, Minimum for Capital Adequacy, Ratio	0.0850	0.0850
Total risk based, Actual, Amount	$ 285,982	$ 271,040
Total risk based, Minimum for Capital Adequacy, Amount	$ 187,556	$ 182,806
Total risk based, Actual, Ratio	0.1601	0.1557
Total risk based, Minimum for Capital Adequacy, Ratio	0.1050	0.1050
Leverage, Actual, Amount	$ 233,708	$ 219,540
Leverage, Minimum for Capital Adequacy, Amount	$ 88,992	$ 89,863
Leverage, Actual, Ratio	0.1050	0.0977
Leverage, Minimum for Capital Adequacy, Ratio	0.0400	0.0400
Regulatory capital requirement, consolidated assets, benchmark	$ 3,000,000
Capital conservation buffer percent	2.50%
PeoplesBank, A Codorus Valley Company [Member]
Common equity Tier 1, Actual, Amount	$ 260,933	$ 245,896
Common equity Tier 1, Minimum for Capital Adequacy, Amount	124,818	121,667
Common equity Tier 1, Well Capitalized Minimum, Amount	$ 115,903	$ 112,976
Common equity Tier 1, Actual, Ratio	0.1463	0.1415
Common equity Tier 1, Minimum for Capital Adequacy, Ratio	0.0700	0.0700
Common equity Tier 1, Well Capitalized Minimum, Ratio	0.0650	0.0650
Tier 1 risk based, Actual, Amount	$ 260,933	$ 245,896
Tier 1 risk based, Minimum for Capital Adequacy, Amount	151,565	147,738
Tier 1 risk based, Well Capitalized Minimum, Amount	$ 142,649	$ 139,048
Tier 1 risk based, Actual, Ratio	0.1463	0.1415
Tier 1 risk based, Minimum for Capital Adequacy, Ratio	0.0850	0.0850
Tier 1 risk based, Well Capitalized Minimum, Ratio	0.0800	0.0800
Total risk based, Actual, Amount	$ 282,382	$ 266,632
Total risk based, Minimum for Capital Adequacy, Amount	187,227	182,500
Total risk based, Well Capitalized Minimum, Amount	$ 178,312	$ 173,810
Total risk based, Actual, Ratio	0.1584	0.1534
Total risk based, Minimum for Capital Adequacy, Ratio	0.1050	0.1050
Total risk based, Well Capitalized Minimum, Ratio	0.1000	0.1000
Leverage, Actual, Amount	$ 260,933	$ 245,896
Leverage, Minimum for Capital Adequacy, Amount	88,852	89,705
Leverage, Well Capitalized Minimum, Amount	$ 111,065	$ 112,131
Leverage, Actual, Ratio	0.1175	0.1096
Leverage, Minimum for Capital Adequacy, Ratio	0.0400	0.0400
Leverage, Well Capitalized Minimum, Ratio	0.0500	0.0500

XML

Shareholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2022	Jan. 31, 2023	Jan. 31, 2022	Aug. 31, 2021
Class of Stock [Line Items]
Shares repurchased during the period	1,535	1,535
Shares repurchased average price per share		$ 22.00
August 2021 Share Repurchase Program [Member]
Class of Stock [Line Items]
Share repurchase program approved amount					$ 5
January 2022 Share Repurchase Program [Member]
Class of Stock [Line Items]
Share repurchase program approved amount				$ 5
January 2023 Share Repurchase Program [Member]
Class of Stock [Line Items]
Share repurchase program approved amount			$ 5

XML

Guarantees (Narrative) (Details) - Standby Letters Of Credit [Member] - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Loss Contingencies [Line Items]
Standby letters of credit outstanding	$ 16,699	$ 23,601
Maximum [Member]
Loss Contingencies [Line Items]
Standby letters of credit expiration period	1 year

XML

Fair Value of Assets and Liabilities (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Dec. 31, 2022
Impaired loans, valuation allowances			$ 2,484
Impaired loans charge-offs	$ 193	$ 1,985
Fair value of foreclosed real estate	383	383	479
Foreclosed real estate, write-downs		584	488
(Level 3) Significant Other Unobservable Inputs [Member]
Impaired loans	1,434	1,434	2,742
Impaired loans, valuation allowances	$ 1,092	1,092	2,484
Impaired loans charge-offs		$ 340	$ 1,916

XML

Fair Value of Assets and Liabilities (Schedule of Assets Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	$ 335,656	$ 345,457
Recurring [Member] | U.S. Treasury Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	19,209	19,100
Recurring [Member] | U.S. Agency [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	12,433	11,280
Recurring [Member] | U.S. Agency Mortgage-Backed, Residential [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	243,579	250,102
Recurring [Member] | State and Municipal [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	28,066	29,399
Recurring [Member] | Corporates [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	32,369	35,576
Recurring [Member] | Loan-Level Interest Rate Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other assets	851	8
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Recurring [Member] | U.S. Treasury Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	19,209	19,100
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Recurring [Member] | U.S. Agency [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	0	0
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Recurring [Member] | U.S. Agency Mortgage-Backed, Residential [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	0	0
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Recurring [Member] | State and Municipal [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	0	0
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Recurring [Member] | Corporates [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	0	0
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Recurring [Member] | Loan-Level Interest Rate Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other assets	0	0
(Level 2) Significant Other Observable Inputs [Member] | Recurring [Member] | U.S. Treasury Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	0	0
(Level 2) Significant Other Observable Inputs [Member] | Recurring [Member] | U.S. Agency [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	12,433	11,280
(Level 2) Significant Other Observable Inputs [Member] | Recurring [Member] | U.S. Agency Mortgage-Backed, Residential [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	243,579	250,102
(Level 2) Significant Other Observable Inputs [Member] | Recurring [Member] | State and Municipal [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	28,066	29,399
(Level 2) Significant Other Observable Inputs [Member] | Recurring [Member] | Corporates [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	32,369	35,576
(Level 2) Significant Other Observable Inputs [Member] | Recurring [Member] | Loan-Level Interest Rate Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other assets	851	8
(Level 3) Significant Other Unobservable Inputs [Member] | Recurring [Member] | U.S. Treasury Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	0	0
(Level 3) Significant Other Unobservable Inputs [Member] | Recurring [Member] | U.S. Agency [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	0	0
(Level 3) Significant Other Unobservable Inputs [Member] | Recurring [Member] | U.S. Agency Mortgage-Backed, Residential [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	0	0
(Level 3) Significant Other Unobservable Inputs [Member] | Recurring [Member] | State and Municipal [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	0	0
(Level 3) Significant Other Unobservable Inputs [Member] | Recurring [Member] | Corporates [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	0	0
(Level 3) Significant Other Unobservable Inputs [Member] | Recurring [Member] | Loan-Level Interest Rate Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other assets	$ 0	$ 0

XML

Fair Value of Assets and Liabilities (Schedule of Assets Measured at Fair Value on Nonrecurring Basis) (Details) - Nonrecurring [Member] - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Individually Evaluated Commercial Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 1,368
Individually Evaluated Residential Real Estate, Other [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	66
Impaired Builder And Developer Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		$ 1,194
Impaired Residential Real Estate Investor Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		57
Impaired Agriculture Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		228
Impaired Manufacturing Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		150
Impaired Other Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		1,114
Impaired Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	383	479
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Individually Evaluated Commercial Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Individually Evaluated Residential Real Estate, Other [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Impaired Builder And Developer Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Impaired Residential Real Estate Investor Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Impaired Agriculture Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Impaired Manufacturing Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Impaired Other Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Impaired Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
(Level 2) Significant Other Observable Inputs [Member] | Individually Evaluated Commercial Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0
(Level 2) Significant Other Observable Inputs [Member] | Individually Evaluated Residential Real Estate, Other [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0
(Level 2) Significant Other Observable Inputs [Member] | Impaired Builder And Developer Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0
(Level 2) Significant Other Observable Inputs [Member] | Impaired Residential Real Estate Investor Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0
(Level 2) Significant Other Observable Inputs [Member] | Impaired Agriculture Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0
(Level 2) Significant Other Observable Inputs [Member] | Impaired Manufacturing Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0
(Level 2) Significant Other Observable Inputs [Member] | Impaired Other Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0
(Level 2) Significant Other Observable Inputs [Member] | Impaired Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
(Level 3) Significant Other Unobservable Inputs [Member] | Individually Evaluated Commercial Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	1,368
(Level 3) Significant Other Unobservable Inputs [Member] | Individually Evaluated Residential Real Estate, Other [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	66
(Level 3) Significant Other Unobservable Inputs [Member] | Impaired Builder And Developer Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		1,194
(Level 3) Significant Other Unobservable Inputs [Member] | Impaired Residential Real Estate Investor Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		57
(Level 3) Significant Other Unobservable Inputs [Member] | Impaired Agriculture Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		228
(Level 3) Significant Other Unobservable Inputs [Member] | Impaired Manufacturing Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		150
(Level 3) Significant Other Unobservable Inputs [Member] | Impaired Other Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		1,114
(Level 3) Significant Other Unobservable Inputs [Member] | Impaired Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 383	$ 479

XML

Fair Value of Assets and Liabilities (Schedule of Level 3 Assets Measured at Fair Value on Nonrecurring Basis) (Details) - Nonrecurring [Member] - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Individually Evaluated Commercial Loans [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value	$ 1,368
Individually Evaluated Commercial Loans [Member] | (Level 3) Significant Other Unobservable Inputs [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value	1,368
Individually Evaluated Commercial Loans [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value	446
Individually Evaluated Commercial Loans [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Business Asset Valuation Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value	$ 922
Individually Evaluated Commercial Loans [Member] | Minimum [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range	0.00%
Individually Evaluated Commercial Loans [Member] | Minimum [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Business Asset Valuation Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range	20.00%
Individually Evaluated Commercial Loans [Member] | Maximum [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range	9.00%
Individually Evaluated Commercial Loans [Member] | Maximum [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Business Asset Valuation Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range	50.00%
Individually Evaluated Commercial Loans [Member] | Weighted Average [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range	9.00%
Individually Evaluated Commercial Loans [Member] | Weighted Average [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Business Asset Valuation Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range	29.00%
Individually Evaluated Residential Real Estate, Other [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value	$ 66
Individually Evaluated Residential Real Estate, Other [Member] | (Level 3) Significant Other Unobservable Inputs [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value	66
Individually Evaluated Residential Real Estate, Other [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value	$ 66
Individually Evaluated Residential Real Estate, Other [Member] | Minimum [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range	16.00%
Individually Evaluated Residential Real Estate, Other [Member] | Maximum [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range	16.00%
Individually Evaluated Residential Real Estate, Other [Member] | Weighted Average [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range	16.00%
Impaired Builder And Developer Loans [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value		$ 1,194
Impaired Builder And Developer Loans [Member] | (Level 3) Significant Other Unobservable Inputs [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value		1,194
Impaired Builder And Developer Loans [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value		$ 1,194
Impaired Builder And Developer Loans [Member] | Minimum [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range		2.00%
Impaired Builder And Developer Loans [Member] | Maximum [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range		22.00%
Impaired Builder And Developer Loans [Member] | Weighted Average [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range		5.00%
Impaired Residential Real Estate Investor Loans [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value		$ 57
Impaired Residential Real Estate Investor Loans [Member] | (Level 3) Significant Other Unobservable Inputs [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value		57
Impaired Residential Real Estate Investor Loans [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value		$ 57
Impaired Residential Real Estate Investor Loans [Member] | Minimum [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range		6.00%
Impaired Residential Real Estate Investor Loans [Member] | Maximum [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range		10.00%
Impaired Residential Real Estate Investor Loans [Member] | Weighted Average [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range		8.00%
Impaired Agriculture Loans [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value		$ 228
Impaired Agriculture Loans [Member] | (Level 3) Significant Other Unobservable Inputs [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value		228
Impaired Agriculture Loans [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value		$ 228
Impaired Agriculture Loans [Member] | Minimum [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Business Asset Valuation Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range		5.00%
Impaired Agriculture Loans [Member] | Maximum [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range		13.00%
Impaired Agriculture Loans [Member] | Weighted Average [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Business Asset Valuation Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range		9.00%
Impaired Other Loans [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value		$ 1,114
Impaired Other Loans [Member] | (Level 3) Significant Other Unobservable Inputs [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value		1,114
Impaired Other Loans [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value		$ 1,114
Impaired Other Loans [Member] | Minimum [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Business Asset Valuation Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range		0.00%
Impaired Other Loans [Member] | Maximum [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range		25.00%
Impaired Other Loans [Member] | Weighted Average [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range		5.00%
Impaired Other Real Estate Owned [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value	$ 383	$ 479
Impaired Other Real Estate Owned [Member] | (Level 3) Significant Other Unobservable Inputs [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value	383	479
Impaired Other Real Estate Owned [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value	$ 383	$ 479
Impaired Other Real Estate Owned [Member] | Minimum [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range	20.00%	0.00%
Impaired Other Real Estate Owned [Member] | Maximum [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range	25.00%	25.00%
Impaired Other Real Estate Owned [Member] | Weighted Average [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range	22.00%
Impaired Manufacturing Loans [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value		$ 150
Impaired Manufacturing Loans [Member] | (Level 3) Significant Other Unobservable Inputs [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value		150
Impaired Manufacturing Loans [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets measured at fair value		$ 150
Impaired Manufacturing Loans [Member] | Minimum [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range		67.00%
Impaired Manufacturing Loans [Member] | Maximum [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range		67.00%
Impaired Manufacturing Loans [Member] | Weighted Average [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range		67.00%
Impaired Other Residential Real Estate [Member] | Weighted Average [Member] | (Level 3) Significant Other Unobservable Inputs [Member] | Appraisal Adjustments [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range		22.00%

XML

Fair Value of Assets and Liabilities (Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available-for-sale	$ 335,656	$ 345,457
Subordinated notes	30,825	30,764
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	51,307	120,439
Securities available-for-sale	335,656	345,457
Restricted investment in bank stocks	2,152	955
Loans held for sale	1,103	154
Loans, net	1,682,931	1,612,121
Interest receivable	6,859	6,624
Interest rate swaps	851
Deposits	1,906,378	1,943,219
Short-term borrowings	39,099	11,605
Long-term debt and junior subordinated debt	10,310	10,310
Subordinated notes	30,825	30,764
Interest payable	1,458	492
Interest rate swaps	851
Off-balance sheet instruments	0	0
Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	51,307	120,439
Securities available-for-sale	335,656	345,457
Loans held for sale	1,125	157
Loans, net	1,570,158	1,503,440
Interest receivable	6,859	6,624
Interest rate swaps	851
Deposits	1,899,852	1,932,689
Short-term borrowings	39,099	11,605
Long-term debt and junior subordinated debt	9,239	10,165
Subordinated notes	28,531	29,145
Interest payable	1,458	492
Interest rate swaps	851
Off-balance sheet instruments	0	0
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	51,307	120,439
Securities available-for-sale	19,209	19,100
Loans held for sale	0	0
Loans, net	0	0
Interest receivable	0	0
Interest rate swaps	0
Deposits	0	0
Short-term borrowings	0	0
Long-term debt and junior subordinated debt	0	0
Subordinated notes	0	0
Interest payable	0	0
Interest rate swaps	0
Off-balance sheet instruments	0	0
(Level 2) Significant Other Observable Inputs [Member] | Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	0	0
Securities available-for-sale	316,447	326,357
Loans held for sale	1,125	157
Loans, net	0	0
Interest receivable	1,567	948
Interest rate swaps	851
Deposits	1,899,852	1,932,689
Short-term borrowings	39,099	11,605
Long-term debt and junior subordinated debt	0	0
Subordinated notes	28,531	29,145
Interest payable	1,458	492
Interest rate swaps	851
Off-balance sheet instruments	0	0
(Level 3) Significant Other Unobservable Inputs [Member] | Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	0	0
Securities available-for-sale	0	0
Loans held for sale	0	0
Loans, net	1,570,158	1,503,440
Interest receivable	5,292	5,676
Interest rate swaps	0
Deposits	0	0
Short-term borrowings	0	0
Long-term debt and junior subordinated debt	9,239	10,165
Subordinated notes	0	0
Interest payable	0	0
Interest rate swaps	0
Off-balance sheet instruments	$ 0	$ 0

XML

Assets and Liabilities Subject to Offsetting (Schedule of Securities Sold Under Agreements to Repurchase) (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Offsetting Liabilities [Line Items]
Repurchase Agreements, Gross Amounts of Recognized Liabilities	$ 13,224	$ 11,605
Repurchase Agreements, Gross Amounts Offset in the Statements of Condition	0	0
Repurchase Agreements, Net Amounts of Liabilities Presented in the Statements of Condition	13,224	11,605
Repurchase Agreements, Gross amounts Not Offset in the Statements of Condition, Cash Collateral Pledged	0	0
Repurchase Agreements, Net Amount	194	(2,162)
U.S. Agency Mortgage-Backed, Residential [Member]
Offsetting Liabilities [Line Items]
Repurchase Agreements, Gross amounts Not Offset in the Statements of Condition, Financial Instruments	(13,030)	(13,767)
U.S. Agency [Member]
Offsetting Liabilities [Line Items]
Repurchase Agreements, Gross amounts Not Offset in the Statements of Condition, Financial Instruments	$ 0	$ 0

XML

Interest Rate Swaps (Fair Value, Notational Amount, and Collateral Posted Related to Loan-Level Interest Rate Swap) (Details) - Interest Rate Swap [Member] - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Commercial Loan [Member]
Derivative [Line Items]
Notional Amount	$ 34,173	$ 5,992
Asset (Liability) Fair Value	851	8
Counterparties Loan [Member]
Derivative [Line Items]
Notional Amount	34,173	5,992
Asset (Liability) Fair Value	$ (851)	$ (8)

XML

Interest Rate Swaps (Gross Amounts of Commercial Loan Swap Derivatives, Amounts Offset and Carrying Values in Consolidated Balance Sheets, and Collateral Pledged to Support Such Agreements) (Details) - Commercial Loan [Member] - Interest Rate Swap [Member] - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Derivative [Line Items]
Gross amounts recognized	$ 851	$ 8
Gross amounts offset	851	8
Net amounts presented in the Consolidated Balance Sheets	0	0
Gross amounts not offset: Cash Collateral	0	0
Net amounts	$ 0	$ 0