LOANS (Tables)

9 Months Ended

Sep. 30, 2022

LOANS

Summary of loans outstanding

Summary of Loans by Type

(In Thousands)

	September 30,		December 31,
	2022		2021
Commercial:
Commercial loans secured by real estate	$	658,861	$	569,840
Commercial and industrial		172,258		159,073
Paycheck Protection Program - 1st Draw		24		1,356
Paycheck Protection Program - 2nd Draw		2,011		25,508
Political subdivisions		83,725		81,301
Commercial construction and land		76,194		60,579
Loans secured by farmland		12,839		11,121
Multi-family (5 or more) residential		59,315		50,089
Agricultural loans		2,492		2,351
Other commercial loans		14,636		17,153
Total commercial		1,082,355		978,371
Residential mortgage:
Residential mortgage loans - first liens		492,854		483,629
Residential mortgage loans - junior liens		24,208		23,314
Home equity lines of credit		42,972		39,252
1-4 Family residential construction		29,950		23,151
Total residential mortgage		589,984		569,346
Consumer		17,907		17,132
Total		1,690,246		1,564,849
Less: allowance for loan losses		(16,170)		(13,537)
Loans, net	$	1,674,076	$	1,551,312

Schedule of adjustments to the initial market rate and credit fair value adjustments recognized

(In Thousands)	Three Months Ended				Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2022		2021		2022		2021
Market Rate Adjustment
Adjustments to gross amortized cost of loans at beginning of period	$	(866)	$	(5)	$	(637)	$	718
Accretion (amortization) recognized in interest income		5		(368)		(224)		(1,091)
Adjustments to gross amortized cost of loans at end of period	$	(861)	$	(373)	$	(861)	$	(373)
Credit Adjustment on Non-impaired Loans
Adjustments to gross amortized cost of loans at beginning of period	$	(2,403)	$	(4,502)	$	(3,335)	$	(5,979)
Accretion recognized in interest income		308		666		1,240		2,143
Adjustments to gross amortized cost of loans at end of period	$	(2,095)	$	(3,836)	$	(2,095)	$	(3,836)

Schedule of PCI loans

(In Thousands)	September 30,		December 31,
	2022		2021
Outstanding balance	$	5,564	$	9,802
Carrying amount		3,783		6,558

Schedule of transactions within the allowance for loan losses

Three Months Ended September 30, 2022	June 30, 2022								September 30, 2022
(In Thousands)	Balance		Charge-offs		Recoveries		Provision (Credit)		Balance
Allowance for Loan Losses:
Commercial:
Commercial loans secured by real estate	$	4,982	$	(2,160)	$	0	$	3,225	$	6,047
Commercial and industrial		2,792		0		0		31		2,823
Commercial construction and land		515		0		0		169		684
Loans secured by farmland		112		0		0		1		113
Multi-family (5 or more) residential		339		0		0		88		427
Agricultural loans		23		0		0		(1)		22
Other commercial loans		131		0		0		(9)		122
Total commercial		8,894		(2,160)		0		3,504		10,238
Residential mortgage:
Residential mortgage loans - first liens		3,689		0		1		229		3,919
Residential mortgage loans - junior liens		180		0		0		14		194
Home equity lines of credit		308		0		0		25		333
1-4 Family residential construction		215		0		0		36		251
Total residential mortgage		4,392		0		1		304		4,697
Consumer		261		(36)		24		(14)		235
Unallocated		1,000		0		0		0		1,000
Total Allowance for Loan Losses	$	14,547	$	(2,196)	$	25	$	3,794	$	16,170

Three Months Ended September 30, 2021	June 30, 2021								September 30, 2021
(In Thousands)	Balance		Charge-offs		Recoveries		Provision (Credit)		Balance
Allowance for Loan Losses:
Commercial:
Commercial loans secured by real estate	$	3,452	$	0	$	0	$	368	$	3,820
Commercial and industrial		2,781		(1,194)		6		947		2,540
Commercial construction and land		452		0		0		107		559
Loans secured by farmland		113		0		0		(1)		112
Multi-family (5 or more) residential		150		0		0		46		196
Agricultural loans		25		0		0		8		33
Other commercial loans		145		0		0		28		173
Total commercial		7,118		(1,194)		6		1,503		7,433
Residential mortgage:
Residential mortgage loans - first liens		3,536		0		1		29		3,566
Residential mortgage loans - junior liens		327		0		0		(6)		321
Home equity lines of credit		294		0		0		(11)		283
1-4 Family residential construction		198		0		0		(9)		189
Total residential mortgage		4,355		0		1		3		4,359
Consumer		231		(26)		8		24		237
Unallocated		671		0		0		0		671
Total Allowance for Loan Losses	$	12,375	$	(1,220)	$	15	$	1,530	$	12,700

	December 31,								September 30,
Nine Months Ended September 30, 2022	2021						Provision		2022
(In Thousands)	Balance		Charge-offs		Recoveries		(Credit)		Balance
Allowance for Loan Losses:
Commercial:
Commercial loans secured by real estate	$	4,405	$	(2,160)	$	0	$	3,802	$	6,047
Commercial and industrial		2,723		(150)		0		250		2,823
Commercial construction and land		637		0		0		47		684
Loans secured by farmland		115		0		0		(2)		113
Multi-family (5 or more) residential		215		0		0		212		427
Agricultural loans		25		0		0		(3)		22
Other commercial loans		173		0		0		(51)		122
Total commercial		8,293		(2,310)		0		4,255		10,238
Residential mortgage:
Residential mortgage loans - first liens		3,650		0		3		266		3,919
Residential mortgage loans - junior liens		184		0		0		10		194
Home equity lines of credit		302		0		15		16		333
1-4 Family residential construction		202		0		0		49		251
Total residential mortgage		4,338		0		18		341		4,697
Consumer		235		(107)		39		68		235
Unallocated		671		0		0		329		1,000
Total Allowance for Loan Losses	$	13,537	$	(2,417)	$	57	$	4,993	$	16,170

	December 31,								September 30,
Nine Months Ended September 30, 2021	2020						Provision		2021
(In Thousands)	Balance		Charge-offs		Recoveries		(Credit)		Balance
Allowance for Loan Losses:
Commercial:
Commercial loans secured by real estate	$	3,051	$	0	$	2	$	767	$	3,820
Commercial and industrial		2,245		(1,194)		20		1,469		2,540
Commercial construction and land		454		0		0		105		559
Loans secured by farmland		120		0		0		(8)		112
Multi-family (5 or more) residential		236		0		0		(40)		196
Agricultural loans		34		0		0		(1)		33
Other commercial loans		168		0		0		5		173
Total commercial		6,308		(1,194)		22		2,297		7,433
Residential mortgage:
Residential mortgage loans - first liens		3,524		(11)		3		50		3,566
Residential mortgage loans - junior liens		349		0		0		(28)		321
Home equity lines of credit		281		0		2		0		283
1-4 Family residential construction		99		0		0		90		189
Total residential mortgage		4,253		(11)		5		112		4,359
Consumer		239		(73)		33		38		237
Unallocated		585		0		0		86		671
Total Allowance for Loan Losses	$	11,385	$	(1,278)	$	60	$	2,533	$	12,700

Schedule of aggregate credit quality classification of outstanding loans by risk

September 30, 2022									Purchased
(In Thousands)			Special						Credit
	Pass		Mention		Substandard		Doubtful		Impaired		Total
Commercial:
Commercial loans secured by real estate	$	637,390	$	5,938	$	11,789	$	0	$	3,744	$	658,861
Commercial and Industrial		159,735		9,085		3,399		0		39		172,258
Paycheck Protection Program - 1st Draw		24		0		0		0		0		24
Paycheck Protection Program - 2nd Draw		2,011		0		0		0		0		2,011
Political subdivisions		83,725		0		0		0		0		83,725
Commercial construction and land		75,433		714		47		0		0		76,194
Loans secured by farmland		10,903		618		1,318		0		0		12,839
Multi-family (5 or more) residential		58,458		0		857		0		0		59,315
Agricultural loans		1,875		29		588		0		0		2,492
Other commercial loans		14,636		0		0		0		0		14,636
Total commercial		1,044,190		16,384		17,998		0		3,783		1,082,355
Residential Mortgage:
Residential mortgage loans - first liens		478,768		7,398		6,688		0		0		492,854
Residential mortgage loans - junior liens		23,739		164		305		0		0		24,208
Home equity lines of credit		42,424		59		489		0		0		42,972
1-4 Family residential construction		29,950		0		0		0		0		29,950
Total residential mortgage		574,881		7,621		7,482		0		0		589,984
Consumer		17,844		0		63		0		0		17,907
Totals	$	1,636,915	$	24,005	$	25,543	$	0	$	3,783	$	1,690,246

December 31, 2021									Purchased
(In Thousands)			Special						Credit
	Pass		Mention		Substandard		Doubtful		Impaired		Total
Commercial:
Commercial loans secured by real estate	$	538,966	$	10,510	$	16,220	$	0	$	4,144	$	569,840
Commercial and Industrial		142,775		10,841		4,694		0		763		159,073
Paycheck Protection Program - 1st Draw		1,356		0		0		0		0		1,356
Paycheck Protection Program - 2nd Draw		25,508		0		0		0		0		25,508
Political subdivisions		81,301		0		0		0		0		81,301
Commercial construction and land		59,816		715		48		0		0		60,579
Loans secured by farmland		10,011		186		924		0		0		11,121
Multi-family (5 or more) residential		47,638		0		873		0		1,578		50,089
Agricultural loans		1,802		0		549		0		0		2,351
Other commercial loans		17,150		3		0		0		0		17,153
Total commercial		926,323		22,255		23,308		0		6,485		978,371
Residential Mortgage:
Residential mortgage loans - first liens		469,044		7,981		6,534		0		70		483,629
Residential mortgage loans - junior liens		22,914		114		283		0		3		23,314
Home equity lines of credit		38,652		59		541		0		0		39,252
1-4 Family residential construction		23,151		0		0		0		0		23,151
Total residential mortgage		553,761		8,154		7,358		0		73		569,346
Consumer		17,092		0		40		0		0		17,132
Totals	$	1,497,176	$	30,409	$	30,706	$	0	$	6,558	$	1,564,849

Summary of loan balances and the related allowance for loan losses

September 30, 2022	Loans:						Allowance for Loan Losses:
(In Thousands)
	Individually		Collectively				Individually		Collectively
	Evaluated		Evaluated		Totals		Evaluated		Evaluated		Totals
Commercial:
Commercial loans secured by real estate	$	12,080	$	646,781	$	658,861	$	427	$	5,620	$	6,047
Commercial and industrial		369		171,889		172,258		0		2,823		2,823
Paycheck Protection Program - 1st Draw		0		24		24		0		0		0
Paycheck Protection Program - 2nd Draw		0		2,011		2,011		0		0		0
Political subdivisions		0		83,725		83,725		0		0		0
Commercial construction and land		47		76,147		76,194		0		684		684
Loans secured by farmland		78		12,761		12,839		0		113		113
Multi-family (5 or more) residential		0		59,315		59,315		0		427		427
Agricultural loans		60		2,432		2,492		0		22		22
Other commercial loans		0		14,636		14,636		0		122		122
Total commercial		12,634		1,069,721		1,082,355		427		9,811		10,238
Residential mortgage:
Residential mortgage loans - first liens		576		492,278		492,854		0		3,919		3,919
Residential mortgage loans - junior liens		31		24,177		24,208		0		194		194
Home equity lines of credit		68		42,904		42,972		0		333		333
1-4 Family residential construction		0		29,950		29,950		0		251		251
Total residential mortgage		675		589,309		589,984		0		4,697		4,697
Consumer		0		17,907		17,907		0		235		235
Unallocated												1,000
Total	$	13,309	$	1,676,937	$	1,690,246	$	427	$	14,743	$	16,170

December 31, 2021	Loans:						Allowance for Loan Losses:
(In Thousands)
	Individually		Collectively				Individually		Collectively
	Evaluated		Evaluated		Totals		Evaluated		Evaluated		Totals
Commercial:
Commercial loans secured by real estate	$	10,926	$	558,914	$	569,840	$	669	$	3,736	$	4,405
Commercial and industrial		2,503		156,570		159,073		71		2,652		2,723
Paycheck Protection Program - 1st Draw		0		1,356		1,356		0		0		0
Paycheck Protection Program - 2nd Draw		0		25,508		25,508		0		0		0
Political subdivisions		0		81,301		81,301		0		0		0
Commercial construction and land		0		60,579		60,579		0		637		637
Loans secured by farmland		83		11,038		11,121		0		115		115
Multi-family (5 or more) residential		1,578		48,511		50,089		0		215		215
Agricultural loans		0		2,351		2,351		0		25		25
Other commercial loans		0		17,153		17,153		0		173		173
Total commercial		15,090		963,281		978,371		740		7,553		8,293
Residential mortgage:
Residential mortgage loans - first liens		630		482,999		483,629		0		3,650		3,650
Residential mortgage loans - junior liens		14		23,300		23,314		0		184		184
Home equity lines of credit		0		39,252		39,252		0		302		302
1-4 Family residential construction		0		23,151		23,151		0		202		202
Total residential mortgage		644		568,702		569,346		0		4,338		4,338
Consumer		0		17,132		17,132		0		235		235
Unallocated												671
Total	$	15,734	$	1,549,115	$	1,564,849	$	740	$	12,126	$	13,537

Summary of information related to impaired loans

(In Thousands)	September 30, 2022						December 31, 2021
	Unpaid						Unpaid
	Principal		Recorded		Related		Principal		Recorded		Related
	Balance		Investment		Allowance		Balance		Investment		Allowance
With no related allowance recorded:
Commercial loans secured by real estate	$	12,680	$	8,684	$	0	$	6,600	$	4,458	$	0
Commercial and industrial		2,135		369		0		5,213		2,431		0
Residential mortgage loans - first liens		601		576		0		656		630		0
Residential mortgage loans - junior liens		71		31		0		124		14		0
Home equity lines of credit		68		68		0		0		0		0
Loans secured by farmland		78		78		0		83		83		0
Agricultural loans		60		60		0		0		0		0
Construction and other land loans		47		47		0		0		0		0
Multi-family (5 or more) residential		0		0		0		2,734		1,578		0
Total with no related allowance recorded		15,740		9,913		0		15,410		9,194		0
With a related allowance recorded:
Commercial loans secured by real estate		3,396		3,396		427		6,468		6,468		668
Commercial and industrial		0		0		0		72		72		72
Total with a related allowance recorded		3,396		3,396		427		6,540		6,540		740
Total	$	19,136	$	13,309	$	427	$	21,950	$	15,734	$	740

Schedule of average balance of impaired loans and interest income recognized on impaired loans

(In Thousands)									Interest Income Recognized on
	Average Investment in Impaired Loans								Impaired Loans on a Cash Basis
	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	September 30,				September 30,				September 30,				September 30,
	2022		2021		2022		2021		2022		2021		2022		2021
Commercial:
Commercial loans secured by real estate	$	9,710	$	11,252	$	9,804	$	11,811	$	143	$	172	$	483	$	401
Commercial and industrial		371		3,844		839		2,566		4		4		207		25
Commercial construction and land		47		48		47		48		0		2		1		2
Loans secured by farmland		79		84		81		84		0		0		0		1
Multi-family (5 or more) residential		0		1,578		263		1,584		0		31		1,156		122
Agricultural loans		59		66		61		67		0		0		2		3
Total commercial		10,266		16,872		11,095		16,160		147		209		1,849		554
Residential mortgage:
Residential mortgage loans - first lien		612		1,322		587		1,830		5		11		17		68
Residential mortgage loans - junior lien		31		386		33		417		0		1		6		10
Home equity lines of credit		68		0		34		0		1		0		3		0
Total residential mortgage		711		1,708		654		2,247		6		12		26		78
Total	$	10,977	$	18,580	$	11,749	$	18,407	$	153	$	221	$	1,875	$	632

Schedule of breakdown by portfolio segment and class of non accrual loans

(In Thousands)	September 30, 2022				December 31, 2021
	Past Due				Past Due
	90+ Days and				90+ Days and
	Accruing		Nonaccrual		Accruing		Nonaccrual
Commercial:
Commercial loans secured by real estate	$	1,898	$	12,079	$	738	$	10,885
Commercial and industrial		248		304		30		2,299
Commercial construction and land		25		47		0		48
Loans secured by farmland		0		78		28		83
Multi-family (5 or more) residential		0		0		0		1,578
Agricultural loans		59		0		65		0
Total commercial		2,230		12,508		861		14,893
Residential mortgage:
Residential mortgage loans - first liens		985		4,271		1,144		4,005
Residential mortgage loans - junior liens		55		0		69		3
Home equity lines of credit		186		132		102		82
Total residential mortgage		1,226		4,403		1,315		4,090
Consumer		43		48		43		16
Totals	$	3,499	$	16,959	$	2,219	$	18,999

Summary of the contractual aging of loans

(In Thousands)	As of September 30, 2022								As of December 31, 2021
	Current &								Current &
	Past Due		Past Due		Past Due				Past Due		Past Due		Past Due
	Less than		30-89		90+				Less than		30-89		90+
	30 Days		Days		Days		Total		30 Days		Days		Days		Total
Commercial:
Commercial loans secured by real estate	$	655,851	$	0	$	3,010	$	658,861	$	563,658	$	762	$	5,420	$	569,840
Commercial and industrial		171,819		129		310		172,258		158,188		72		813		159,073
Paycheck Protection Program - 1st Draw		24		0		0		24		1,339		17		0		1,356
Paycheck Protection Program - 2nd Draw		1,062		949		0		2,011		25,508		0		0		25,508
Political subdivisions		83,725		0		0		83,725		81,301		0		0		81,301
Commercial construction and land		75,925		197		72		76,194		60,509		70		0		60,579
Loans secured by farmland		12,675		86		78		12,839		11,010		0		111		11,121
Multi-family (5 or more) residential		59,315		0		0		59,315		48,532		0		1,557		50,089
Agricultural loans		2,433		0		59		2,492		2,279		7		65		2,351
Other commercial loans		14,636		0		0		14,636		17,153		0		0		17,153
Total commercial		1,077,465		1,361		3,529		1,082,355		969,477		928		7,966		978,371
Residential mortgage:
Residential mortgage loans - first liens		487,629		1,934		3,291		492,854		475,637		5,038		2,954		483,629
Residential mortgage loans - junior liens		24,106		47		55		24,208		23,229		16		69		23,314
Home equity lines of credit		42,465		227		280		42,972		38,830		279		143		39,252
1-4 Family residential construction		29,950		0		0		29,950		23,151		0		0		23,151
Total residential mortgage		584,150		2,208		3,626		589,984		560,847		5,333		3,166		569,346
Consumer		17,674		142		91		17,907		17,001		72		59		17,132
Totals	$	1,679,289	$	3,711	$	7,246	$	1,690,246	$	1,547,325	$	6,333	$	11,191	$	1,564,849

Summary of the contractual aging of nonaccrual loans

(In Thousands)	Current &
	Past Due		Past Due		Past Due
	Less than		30-89		90+
	30 Days		Days		Days		Total
September 30, 2022 Nonaccrual Totals	$	12,542	$	670	$	3,747	$	16,959
December 31, 2021 Nonaccrual Totals	$	8,800	$	1,227	$	8,972	$	18,999

Summary of troubled debt restructurings

(In Thousands)	Current &
	Past Due		Past Due		Past Due
	Less than		30-89		90+
	30 Days		Days		Days		Nonaccrual		Total
September 30, 2022 Totals	$	211	$	20	$	92	$	3,868	$	4,191
December 31, 2021 Totals	$	248	$	40	$	65	$	5,452	$	5,805

Schedule of loan modifications considered as TDRs

(Balances in Thousands)	Nine Months Ended			Nine Months Ended
	September 30, 2022			September 30, 2021
	Number			Number
	of	Recorded		of	Recorded
	Loans	Investment		Loans	Investment
Commercial loans secured by real estate	0	$	0	1	$	3,392
Total	0	$	0	1	$	3,392

Schedule of carrying amount of foreclosed residential real estate properties

(In Thousands)	September 30,		December 31,
	2022		2021
Foreclosed residential real estate	$	179	$	256

Schedule of mortgage loans secured by residential real properties

(In Thousands)	September 30,		December 31,
	2022		2021
Residential real estate in process of foreclosure	$	1,306	$	1,260

Troubled Debt Restructuring

LOANS

Summary of troubled debt restructurings

(Balances in Thousands)	Three Months Ended			Three Months Ended
	September 30, 2022			September 30, 2021
		Post-			Post-
	Number	Modification		Number	Modification
	of	Recorded		of	Recorded
	Loans	Investment		Loans	Investment
Home equity lines of credit,
Reduced monthly payments for an eighteen-month period	0	$	0	1	$	70
Total	0	$	0	1	$	70

	Nine Months Ended			Nine Months Ended
(Balances in Thousands)	September 30, 2022			September 30, 2021
		Post-			Post-
	Number	Modification		Number	Modification
	of	Recorded		of	Recorded
	Loans	Investment		Loans	Investment
Residential mortgage - first liens:
Reduced monthly payments and extended maturity date	0	$	0	1	$	12
Reduced monthly payments for a fifteen-month period	0		0	1		116
Home equity lines of credit:
Reduced monthly payments and extended maturity date	0		0	1		24
Reduced monthly payments for an eighteen-month period	0		0	1		70
Total	0	$	0	4	$	222