10-Q

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For quarterly period ended September 30, 2022

¨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 001-35021

EVANS BANCORP, INC.

(Exact name of registrant as specified in its charter)

New York 16-1332767

(State or other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification No.)

6460 Main St. Williamsville, NY 14221

(Address of principal executive offices) (Zip Code)

(716) 926-2000

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed

since last report)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.50 par value	EVBN	NYSE American

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 x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the 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 x	Smaller reporting company x
Emerging growth company ¨

If an emerging growth company, indicate by checkmark 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 x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Common Stock, $.50 par value, 5,513,950 shares as of October 28, 2022.

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INDEX

EVANS BANCORP, INC. AND SUBSIDIARIES

PART 1. FINANCIAL INFORMATION		PAGE
Item 1.	Financial Statements
	Unaudited Consolidated Balance Sheets – September 30, 2022 and December 31, 2021	1
	Unaudited Consolidated Statements of Income – Three months ended September 30, 2022 and 2021	2
	Unaudited Consolidated Statements of Income – Nine months ended September 30, 2022 and 2021	3
	Unaudited Consolidated Statements of Comprehensive (Loss) Income – Three months ended September 30, 2022 and 2021	4
	Unaudited Consolidated Statements of Comprehensive (Loss) Income – Nine months ended September 30, 2022 and 2021	4
	Unaudited Consolidated Statements of Changes in Stockholders’ Equity – Three months ended September 30, 2022 and 2021	5
	Unaudited Consolidated Statements of Changes in Stockholders’ Equity – Nine months ended September 30, 2022 and 2021	6
	Unaudited Consolidated Statements of Cash Flows – Nine months ended September 30, 2022 and 2021	7
	Notes to Unaudited Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	42
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosure	43
Item 5.	Other Information	43
Item 6.	Exhibits	44
	Signatures	45

PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2022 AND DECEMBER 31, 2021
(in thousands, except share and per share amounts)
	September 30,		December 31,
	2022		2021
ASSETS
Cash and due from banks	$	14,394	$	9,856
Interest-bearing deposits at banks		6,813		234,929
Securities:
Available for sale, at fair value (amortized cost: $433,206 at September 30, 2022;		369,141		305,959
$310,228 at December 31, 2021)
Held to maturity, at amortized cost (fair value: $7,413 at September 30, 2022;		7,572		3,165
$3,179 at December 31, 2021)
Federal Home Loan Bank common stock, at cost		3,664		3,045
Federal Reserve Bank common stock, at cost		3,066		3,039
Loans, net of allowance for loan losses of $18,630 at September 30, 2022
and $18,438 at December 31, 2021		1,607,827		1,553,467
Properties and equipment, net of accumulated depreciation of $11,224 at September 30, 2022
and $10,283 at December 31, 2021		17,103		17,789
Goodwill		12,702		12,702
Intangible assets		1,327		1,627
Bank-owned life insurance		41,605		34,295
Operating lease right-of-use asset		4,127		4,826
Other assets		40,364		25,941
TOTAL ASSETS	$	2,129,705	$	2,210,640
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Demand	$	558,805	$	492,864
NOW		263,648		259,908
Savings		913,383		1,019,925
Time		137,910		164,340
Total deposits		1,873,746		1,937,037
Securities sold under agreement to repurchase		9,812		4,112
Other borrowings		42,594		32,879
Operating lease liability		4,471		5,210
Other liabilities		18,181		16,536
Subordinated debt		31,050		30,974
Total liabilities		1,979,854		2,026,748
STOCKHOLDERS' EQUITY:
Common stock, $0.50 par value, 10,000,000 shares authorized; 5,534,477 and 5,482,756 shares issued at
September 30, 2022 and December 31, 2021, respectively, and 5,509,917 and 5,482,756 shares outstanding at
September 30, 2022 and December 31, 2021, respectively.		2,770		2,744
Capital surplus		80,435		78,795
Treasury stock, at cost, 24,560 and 0 shares at September 30, 2022 and
December 31, 2021, respectively		(849)		-
Retained earnings		117,319		108,024
Accumulated other comprehensive income (loss), net of tax		(49,824)		(5,671)
Total stockholders' equity		149,851		183,892
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,129,705	$	2,210,640
See Notes to Unaudited Consolidated Financial Statements

‎

1

EVANS BANCORP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(in thousands, except share and per share amounts)
	Three Months Ended September 30,
	2022		2021
INTEREST INCOME
Loans	$	17,988	$	18,096
Interest-bearing deposits at banks		217		64
Securities:
Taxable		2,190		1,087
Non-taxable		92		55
Total interest income		20,487		19,302
INTEREST EXPENSE
Deposits		755		650
Other borrowings		83		84
Subordinated debt		461		405
Total interest expense		1,299		1,139
NET INTEREST INCOME		19,188		18,163
PROVISION (CREDIT) FOR LOAN LOSSES		1,328		(1,459)
NET INTEREST INCOME AFTER
PROVISION (CREDIT) FOR LOAN LOSSES		17,860		19,622
NON-INTEREST INCOME
Deposit service charges		782		664
Insurance service and fees		3,383		3,191
Bank-owned life insurance		161		158
Interchange fee income		532		548
Other		909		596
Total non-interest income		5,767		5,157
NON-INTEREST EXPENSE
Salaries and employee benefits		10,450		9,930
Occupancy		1,118		1,126
Advertising and public relations		417		434
Professional services		839		840
Technology and communications		1,339		1,327
Amortization of intangibles		100		135
FDIC insurance		255		285
Other		1,273		1,316
Total non-interest expense		15,791		15,393
INCOME BEFORE INCOME TAXES		7,836		9,386
INCOME TAX PROVISION		1,972		2,407
NET INCOME	$	5,864	$	6,979
Net income per common share-basic	$	1.06	$	1.28
Net income per common share-diluted	$	1.06	$	1.27
Weighted average number of common shares outstanding		5,510,118		5,459,076
Weighted average number of diluted shares outstanding		5,546,764		5,516,781
See Notes to Unaudited Consolidated Financial Statements

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2

EVANS BANCORP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(in thousands, except share and per share amounts)
	Nine Months Ended September 30,
	2022		2021
INTEREST INCOME
Loans	$	50,540	$	53,675
Interest-bearing deposits at banks		513		99
Securities:
Taxable		5,851		2,907
Non-taxable		197		167
Total interest income		57,101		56,848
INTEREST EXPENSE
Deposits		1,903		2,272
Other borrowings		172		258
Subordinated debt		1,285		1,208
Total interest expense		3,360		3,738
NET INTEREST INCOME		53,741		53,110
PROVISION (CREDIT) FOR LOAN LOSSES		1,816		(1,906)
NET INTEREST INCOME AFTER
PROVISION (CREDIT) FOR LOAN LOSSES		51,925		55,016
NON-INTEREST INCOME
Deposit service charges		2,177		1,843
Insurance service and fees		8,249		8,350
Bank-owned life insurance		486		493
Interchange fee income		1,563		1,585
Other		2,335		1,870
Total non-interest income		14,810		14,141
NON-INTEREST EXPENSE
Salaries and employee benefits		29,356		28,339
Occupancy		3,429		3,490
Advertising and public relations		1,034		1,102
Professional services		2,554		2,788
Technology and communications		3,750		4,023
Amortization of intangibles		300		405
FDIC insurance		775		864
Other		3,837		3,923
Total non-interest expense		45,035		44,934
INCOME BEFORE INCOME TAXES		21,700		24,223
INCOME TAX PROVISION		5,354		6,079
NET INCOME	$	16,346	$	18,144
Net income per common share-basic	$	2.97	$	3.34
Net income per common share-diluted	$	2.95	$	3.30
Weighted average number of common shares outstanding		5,505,936		5,438,708
Weighted average number of diluted shares outstanding		5,548,508		5,490,836
See Notes to Unaudited Consolidated Financial Statements

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3

EVANS BANCORP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
THREE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(in thousands)
	Three Months Ended September 30,
		2022		2021
NET INCOME		$	5,864	$	6,979
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX:
Unrealized loss on available-for-sale securities:			(15,581)		(1,530)
Defined benefit pension plans:
Amortization of prior service cost			6		5
Amortization of actuarial loss			50		70
Total			56		75
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX:			(15,525)		(1,455)
COMPREHENSIVE (LOSS) INCOME		$	(9,661)	$	5,524
See Notes to Unaudited Consolidated Financial Statements

EVANS BANCORP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(in thousands)
	Nine Month Ended September
	2022		2021
NET INCOME	$	16,346	$	18,144
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX:
Unrealized loss on available-for-sale securities		(44,319)		(3,697)
Defined benefit pension plans:
Amortization of prior service cost		16		16
Amortization of actuarial loss		150		210
Total		166		226
OTHER COMPREHENSIVE LOSS, NET OF TAX		(44,153)		(3,471)
COMPREHENSIVE (LOSS) INCOME	$	(27,807)	$	14,673
See Notes to Unaudited Consolidated Financial Statements

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4

EVANS BANCORP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
THREE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(in thousands, except share and per share amounts)
							Accumulated
							Other
	Common		Capital		Retained		Comprehensive		Treasury
	Stock		Surplus		Earnings		Loss		Stock		Total
Balance, June 30, 2021	$	2,724	$	77,270	$	98,430	$	(2,735)	$	-	$	175,689
Net Income						6,979						6,979
Other comprehensive loss								(1,455)				(1,455)
Cash dividends ($0.60 per common share)						(3,275)						(3,275)
Stock compensation expense				200								200
Issued 6,633 shares in stock option exercises		3		93								96
Issued 13,017 shares for earnout		7		593								600
Balance, September 30, 2021	$	2,734	$	78,156	$	102,134	$	(4,190)	$	-	$	178,834
Balance, June 30, 2022	$	2,769	$	80,072	$	114,982	$	(34,299)	$	(849)	$	162,675
Net Income						5,864						5,864
Other comprehensive loss								(15,525)				(15,525)
Cash dividends ($0.64 per common share)						(3,527)						(3,527)
Stock compensation expense				328								328
Issued 1,419 shares in stock option exercises		1		35								36
Issued 600 restricted shares												-
Forfeitures 765 shares of restricted stock												-
Balance, September 30, 2022	$	2,770	$	80,435	$	117,319	$	(49,824)	$	(849)	$	149,851
See Notes to Unaudited Consolidated Financial Statements

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5

EVANS BANCORP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(in thousands, except share and per share amounts)
							Accumulated
							Other
	Common		Capital		Retained		Comprehensive		Treasury
	Stock		Surplus		Earnings		Loss		Stock		Total
Balance, December 31, 2020	$	2,708	$	76,394	$	90,522	$	(719)	$	-	$	168,905
Net Income						18,144						18,144
Other comprehensive loss								(3,471)				(3,471)
Cash dividends ($1.20 per common share)						(6,532)						(6,532)
Stock compensation expense				634								634
Issued 7,971 restricted shares, net of forfeitures		4		(4)								-
Issued 4,611 shares under Dividend Reinvestment Plan		3		152								155
Issued 6,443 shares in Employee Stock Purchase Plan		3		200								203
Issued 19,715 shares in stock option exercises		9		187								196
Issued 13,017 shares for earnout		7		593								600
Balance, September 30, 2021	$	2,734	$	78,156	$	102,134	$	(4,190)	$	-	$	178,834
Balance, December 31, 2021	$	2,744	$	78,795	$	108,024	$	(5,671)	$	-	$	183,892
Net Income						16,346						16,346
Other comprehensive loss								(44,153)				(44,153)
Cash dividends ($1.26 per common share)						(6,936)						(6,936)
Stock compensation expense				952								952
Issued 18,844 restricted shares		9		(9)								-
Issued 22,270 shares in stock option exercises		11		361								372
Repurchased 29,269 shares of common stock										(1,098)		(1,098)
Reissued 6,660 restricted shares in stock option exercises						(115)				249		134
Forfeitures 1,951 shares of restricted stock												-
Reissued 3,705 shares through Dividend Reinvestment Program		2		141								143
Issued 6,902 shares in Employee Stock Purchase Plan		4		195								199
Balance, September 30, 2022	$	2,770	$	80,435	$	117,319	$	(49,824)	$	(849)	$	149,851
See Notes to Unaudited Consolidated Financial Statements

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6

EVANS BANCORP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(in thousands)
	Nine Months Ended September 30,
		2022		2021
OPERATING ACTIVITIES:
Interest received	$	55,607	$	53,464
Fees received		14,424		13,271
Interest paid		(3,607)		(4,674)
Cash paid to employees and vendors		(46,166)		(43,964)
Income taxes paid		(3,327)		(5,086)
Proceeds from sale of loans held for sale		4,719		-
Originations of loans held for sale		(4,529)		(262)
Net cash provided by operating activities		17,121		12,749
INVESTING ACTIVITIES:
Available for sales securities:
Purchases		(144,413)		(124,683)
Proceeds from sales, maturities, calls, and payments		20,806		27,680
Held to maturity securities:
Purchases		(6,581)		(3,562)
Proceeds from maturities, calls, and payments		2,174		3,034
Cash paid for bank-owned life insurance		(6,830)		-
Proceeds from bank-owned life insurance claims		378		-
Additions to properties and equipment		(654)		(901)
Proceeds from tax credit investment		191		-
Sale of other real estate		17		129
Net (increase) decrease in loans		(54,670)		85,896
Cash paid for earnout		-		(900)
Net cash used in investing activities		(189,582)		(13,307)
FINANCING ACTIVITIES:
Repayments from long-term borrowings, net		(12,402)		(6,891)
Proceeds (repayments) from short-term borrowings, net		28,200		(769)
Net (decrease) increase in deposits		(63,256)		105,040
Dividends paid		(3,409)		(3,257)
Repurchase of treasury stock		(1,098)		-
Issuance of common stock		714		554
Reissuance of treasury stock		134		-
Net cash (used in) provided by financing activities		(51,117)		94,677
Net (decrease) increase in cash and cash equivalents		(223,578)		94,119
CASH AND CASH EQUIVALENTS:
Beginning of period		244,785		97,604
End of period	$	21,207	$	191,723
See Notes to Unaudited Consolidated Financial Statements

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7

EVANS BANCORP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(in thousands)
	Nine Months Ended September 30,
		2022		2021
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net income	$	16,346	$	18,144
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization		1,270		1,481
Deferred tax expense		348		970
Provision (credit) for loan losses		1,816		(1,906)
Loss on sales of assets		5		22
Gain on loans sold		(92)		-
Stock compensation expense		952		634
Proceeds from sale of loans held for sale		4,719		-
Originations of loans held for sale		(4,529)		(262)
Changes in assets and liabilities affecting cash flow:
Other assets		(3,003)		(6,724)
Other liabilities		(711)		390
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	17,121	$	12,749
See Notes to Unaudited Consolidated Financial Statements

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8

EVANS BANCORP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2022 AND 2021

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting and reporting policies followed by Evans Bancorp, Inc. (the “Company”), a financial holding company, and its two direct, wholly-owned subsidiaries: (i) Evans Bank, National Association (the “Bank”), and the Bank’s subsidiaries, Evans National Leasing, Inc. (“ENL”), and Evans National Holding Corp. (“ENHC”); and (ii) Evans National Financial Services, LLC (“ENFS”), and ENFS’s subsidiary, The Evans Agency, LLC (“TEA”), and TEA’s subsidiaries, Frontier Claims Services, Inc. (“FCS”) and ENB Associates Inc. (“ENBA”), in the preparation of the accompanying interim unaudited consolidated financial statements conform with U.S. generally accepted accounting principles (“GAAP”) and with general practice within the industries in which it operates. Except as the context otherwise requires, the Company and its direct and indirect subsidiaries are collectively referred to in this report as the “Company.”

The Financial Accounting Standards Board (“FASB”) establishes changes to GAAP in the form of accounting standards updates (“ASUs”) to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs when they are issued by FASB. ASUs adopted by the Company during the current fiscal year are not expected to have a material impact on the Company’s consolidated financial position, results of operations, cash flows or disclosures.

The results of operations for the nine month period ended September 30, 2022 are not necessarily indicative of the results to be expected for the full year.

The accompanying unaudited consolidated financial statements should be read in conjunction with the Audited Consolidated Financial Statements and the Notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “10-K”). There have been no significant changes to the Company’s significant accounting policies as disclosed in Note 1 to the 10-K.

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9

2. SECURITIES

The amortized cost of securities and their approximate fair value at September 30, 2022 and December 31, 2021 were as follows:

	September 30, 2022
	(in thousands)
	Amortized		Unrealized				Fair
	Cost		Gains		Losses		Value
Available for Sale:
Debt securities:
U.S. treasuries and government agencies	$	166,351	$	2	$	(25,289)	$	141,064
States and political subdivisions		23,573		2		(1,721)		21,854
Total debt securities		189,924		4		(27,010)		162,918
Mortgage-backed securities:
FNMA		76,916		-		(13,272)		63,644
FHLMC		47,544		-		(7,160)		40,384
GNMA		40,741		-		(6,019)		34,722
SBA		23,044		-		(2,397)		20,647
CMO		55,037		-		(8,211)		46,826
Total mortgage-backed securities		243,282		-		(37,059)		206,223
Total securities designated as available for sale	$	433,206	$	4	$	(64,069)	$	369,141
Held to Maturity:
Debt securities
States and political subdivisions	$	7,572	$	-	$	(159)	$	7,413
Total securities designated as held to maturity	$	7,572	$	-	$	(159)	$	7,413

	December 31, 2021
	(in thousands)
	Amortized		Unrealized				Fair
	Cost		Gains		Losses		Value
Available for Sale:
Debt securities:
U.S. treasuries and government agencies	$	99,005	$	199	$	(2,386)	$	96,818
States and political subdivisions		6,150		96		-		6,246
Total debt securities		105,155		295		(2,386)		103,064
Mortgage-backed securities:
FNMA		64,056		222		(1,068)		63,210
FHLMC		38,796		62		(424)		38,434
GNMA		31,814		15		(615)		31,214
SBA		17,919		343		(54)		18,208
CMO		52,488		175		(834)		51,829
Total mortgage-backed securities		205,073		817		(2,995)		202,895
Total securities designated as available for sale	$	310,228	$	1,112	$	(5,381)	$	305,959
Held to Maturity:
Debt securities
States and political subdivisions	$	3,165	$	17	$	(3)	$	3,179
Total securities designated as held to maturity	$	3,165	$	17	$	(3)	$	3,179

Available for sale securities with a total fair value of $244 million and $207 million were pledged as collateral to secure public deposits and for other purposes required or permitted by law at September 30, 2022 and December 31, 2021, respectively.

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10

The scheduled maturities of debt and mortgage-backed securities at September 30, 2022 are summarized below. All maturity amounts are contractual maturities. Actual maturities may differ from contractual maturities because certain issuers have the right to call or prepay obligations with or without call premiums.

	September 30, 2022
	Amortized		Estimated
	cost		fair value
	(in thousands)
Debt securities available for sale:
Due in one year or less	$	6,839	$	6,769
Due after one year through five years		79,801		73,585
Due after five years through ten years		74,294		62,431
Due after ten years		28,990		20,133
		189,924		162,918
Mortgage-backed securities
available for sale		243,282		206,223
Total	$	433,206	$	369,141
Debt securities held to maturity:
Due in one year or less	$	6,665	$	6,615
Due after one year through five years		495		456
Due after five years through ten years		412		342
Due after ten years		-		-
Total	$	7,572	$	7,413

Contractual maturities of the Company’s mortgage-backed securities generally exceed ten years; however, the effective lives may be significantly shorter due to prepayments of the underlying loans and due to the nature of these securities.

There were no gross realized gains or losses from sales of investment securities for the three and nine month periods ended September 30, 2022 and 2021.

Management has assessed the securities available for sale in an unrealized loss position at September 30, 2022 and December 31, 2021 and determined the decline in fair value below amortized cost to be temporary. In making this determination, management considered the period of time the securities were in a loss position, the percentage decline in comparison to the securities’ amortized cost, and the financial condition of the issuer (primarily government or government-sponsored enterprises). In addition, management does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities before recovery of their amortized cost. Management believes the decline in fair value is primarily related to market interest rate fluctuations and not to the credit deterioration of the individual issuers.

The Company has not recorded any other-than-temporary impairment (“OTTI”) charges during the nine month period ended September 30, 2022 and did not record any OTTI charges during 2021. The credit worthiness of the Company’s securities portfolio is largely reliant on the ability of U.S. government sponsored agencies such as Federal Home Loan Bank (“FHLB”), Federal National Mortgage Association (“FNMA”), Government National Mortgage Association (“GNMA”), and Federal Home Loan Mortgage Corporation (“FHLMC”), and municipalities throughout New York State to meet their obligations. In addition, dysfunctional markets could materially alter the liquidity, interest rate, and pricing risk of the portfolio. The stable past performance is not a guarantee for similar performance of the Company’s securities portfolio in future periods.

‎

11

Information regarding unrealized losses within the Company’s available for sale securities at September 30, 2022 and December 31, 2021 is summarized below.

	September 30, 2022
		Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
		(in thousands)
Available for Sale:
Debt securities:
U.S. treasuries and government agencies	$	91,283	$	(9,992)	$	48,781	$	(15,297)	$	140,064	$	(25,289)
States and political subdivisions		20,748		(1,721)		-		-		20,748		(1,721)
Total debt securities		112,031		(11,713)		48,781		(15,297)		160,812		(27,010)
Mortgage-backed securities:
FNMA		31,695		(5,178)		31,889		(8,094)		63,584		(13,272)
FHLMC		24,908		(3,503)		15,458		(3,657)		40,366		(7,160)
GNMA		20,125		(2,675)		14,597		(3,344)		34,722		(6,019)
SBA		17,478		(1,966)		3,169		(431)		20,647		(2,397)
CMO		29,286		(3,855)		17,540		(4,356)		46,826		(8,211)
Total mortgage-backed securities		123,492		(17,177)		82,653		(19,882)		206,145		(37,059)
Held to Maturity:
Debt securities:
States and political subdivisions		7,335		(149)		78		(10)		7,413		(159)
Total temporarily impaired
securities	$	242,858	$	(29,039)	$	131,512	$	(35,189)	$	374,370	$	(64,228)
	December 31, 2021
		Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
		(in thousands)
Available for Sale:
Debt securities:
U.S. treasuries and government agencies	$	50,381	$	(884)	$	27,488	$	(1,502)	$	77,869	$	(2,386)
States and political subdivisions		-		-		-		-		-		-
Total debt securities		50,381		(884)		27,488		(1,502)		77,869		(2,386)
Mortgage-backed securities:
FNMA		48,008		(903)		2,941		(165)		50,949		(1,068)
FHLMC		35,851		(423)		76		(1)		35,927		(424)
GNMA		30,252		(615)		143		-		30,395		(615)
SBA		2,824		(25)		1,218		(29)		4,042		(54)
CMO		38,313		(833)		25		(1)		38,338		(834)
Total mortgage-backed securities		155,248		(2,799)		4,403		(196)		159,651		(2,995)
Held to Maturity:
Debt securities:
States and political subdivisions		1,782		(3)		-		-		1,782		(3)
Total temporarily impaired
securities	$	207,411	$	(3,686)	$	31,891	$	(1,698)	$	239,302	$	(5,384)

‎

12

3. LOANS AND THE ALLOWANCE FOR LOAN LOSSES

Loan Portfolio Composition

The following table presents selected information on the composition of the Company’s loan portfolio as of the dates indicated:

	September 30, 2022		December 31, 2021
Mortgage loans on real estate:	(in thousands)
Residential mortgages	$	433,102	$	411,060
Commercial and multi-family		765,136		739,761
Construction-Residential		3,136		5,109
Construction-Commercial		103,763		98,012
Home equities		83,334		81,238
Total real estate loans		1,388,471		1,335,180
Commercial and industrial loans		238,093		237,077
Consumer and other loans		427		719
Unaccreted yield adjustments*		(534)		(1,071)
Total gross loans		1,626,457		1,571,905
Allowance for loan losses		(18,630)		(18,438)
Loans, net	$	1,607,827	$	1,553,467

* Includes net premiums and discounts on acquired loans and net deferred fees and costs on loans originated.

At September 30, 2022, the outstanding principal balance and the carrying amount of acquired credit-impaired loans totaled $0.8 million and $0.7 million, respectively. At December 31, 2021, the outstanding principal balance and carrying amount of acquired credit-impaired loans totaled $0.8 million. There were no valuation allowances for specifically identified impairment attributable to acquired credit-impaired loans at September 30, 2022 or December 31, 2021. The Company is not recording interest on the acquired credit-impaired loans due to the uncertainty of the cash flows relating to such loans.

There were $508 million and $619 million in residential and commercial mortgage loans pledged to FHLBNY to serve as collateral for potential borrowings as of September 30, 2022 and December 31, 2021, respectively.

At September 30, 2022, the Company’s FHLMC loan serving portfolio had $61 million in principal balances of residential real estate loans that were sold to FHLMC and the servicing rights are retained by the Company. No loans were sold to FHLMC by the Company during the three month or nine month periods ending September 30, 2022 and 2021.

The Company may also sell certain fixed rate residential mortgages to FNMA while maintaining the servicing rights for those mortgages. At September 30, 2022, the Company’s FNMA loan servicing portfolio was $59 million in principal balances. In the three month and nine month periods ended September 30, 2022, the Company sold $1.3 million and $4.8 million, respectively, of residential mortgages to FNMA. The Company did not sell any mortgages to FNMA in the three and nine month periods ended September 30, 2021.

At September 30, 2022 and December 31, 2021, the Company had loan servicing portfolio principal balances of $120 million and $131 million, respectively, upon which it earned servicing fees. The fair value of the mortgage servicing rights for that portfolio was $1.2 million and $0.9 million at September 30, 2022 and December 31, 2021, respectively.

‎

13

At September 30, 2022 no residential mortgages were held for sale. At December 31, 2021 there were $0.1 million of residential mortgages held for sale.

Credit Quality Indicators

The Company monitors the credit risk in its loan portfolio by reviewing certain credit quality indicators (“CQI”). The primary CQI for the commercial mortgage and commercial and industrial portfolios is the individual loan’s credit risk rating. The following list provides a description of the credit risk ratings that are used internally by the Bank when assessing the adequacy of its allowance for loan losses:

Acceptable or better

Watch

Special Mention

Substandard

Doubtful

Loss

“Special mention” and “substandard” loans are weaker credits with a higher risk of loss and are categorized as “criticized” assets.

The Company’s consumer loans, including residential mortgages and home equities, are not individually risk rated or reviewed in the Company’s loan review process. Unlike commercial customers, consumer loan customers are not required to provide the Company with updated financial information. Consumer loans also carry smaller balances. Given the lack of updated information after the initial underwriting of the loan and small size of individual loans, the Company uses delinquency status as the primary credit quality indicator for consumer loans. However, once a consumer loan is identified as impaired, it is individually evaluated for impairment.

The following tables provide data, at the class level, of credit quality indicators of certain loans for the dates specified:

	September 30, 2022
	(in thousands)
Corporate Credit Exposure – By Credit Rating	Commercial Real Estate Construction		Commercial and Multi-Family Mortgages		Total Commercial Real Estate		Commercial and Industrial
Acceptable or better	$	64,746	$	547,332	$	612,078	$	175,101
Watch		19,505		165,144		184,649		46,557
Special Mention		6,943		21,453		28,396		9,555
Substandard		12,569		31,207		43,776		6,880
Doubtful/Loss		-		-		-		-
Total	$	103,763	$	765,136	$	868,899	$	238,093
	December 31, 2021
	(in thousands)
Corporate Credit Exposure – By Credit Rating	Commercial Real Estate Construction		Commercial and Multi-Family Mortgages		Total Commercial Real Estate		Commercial and Industrial
Acceptable or better	$	65,211	$	480,159	$	545,370	$	152,675
Watch		19,108		182,502		201,610		64,406
Special Mention		7,045		33,219		40,264		10,200
Substandard		6,648		43,881		50,529		9,796
Doubtful/Loss		-		-		-		-
Total	$	98,012	$	739,761	$	837,773	$	237,077

The Company continues to evaluate its portfolio of loans to clients within the hotel industry for residual impacts from the COVID-19 pandemic. The Company classified $81 million of loans to clients within the hotel industry as criticized in 2020. Subsequently, more than half of this portfolio has been upgraded or paid off. Currently, $38 million of the hotel portfolio remains in criticized status at the end of the 2022 third quarter. Total criticized assets were $89 and $111 million at September 30, 2022 and at the end of the 2021, respectively.

14

Past Due Loans

The following tables provide an analysis of the age of the recorded investment in loans that are past due as of the dates indicated:

	September 30, 2022
	(in thousands)
		Current							Non-accruing		Total
		Balance	30-59 days		60-89 days		90+ days		Loans		Balance
Commercial and industrial	$	229,785	$	5,375	$	30	$	64	$	2,839	$	238,093
Residential real estate:
Residential		428,009		-		1,371		-		3,722		433,102
Construction		3,136		-		-		-		-		3,136
Commercial real estate:
Commercial		754,993		750		203		-		9,190		765,136
Construction		87,302		5,958		875		774		8,854		103,763
Home equities		81,512		1,144		160		-		518		83,334
Consumer and other		414		8		4		1		-		427
Total Loans	$	1,585,151	$	13,235	$	2,643	$	839	$	25,123	$	1,626,991

Note: Loan balances do not include $(0.5) million of unaccreted yield adjustments as of September 30, 2022.

	December 31, 2021
	(in thousands)
		Current							Non-accruing		Total
		Balance	30-59 days		60-89 days		90+ days		Loans		Balance
Commercial and industrial	$	229,724	$	1,336	$	568	$	548	$	4,901	$	237,077
Residential real estate:
Residential		402,992		3,466		1,563		-		3,039		411,060
Construction		5,109		-		-		-		-		5,109
Commercial real estate:
Commercial		711,481		16,451		6,073		-		5,756		739,761
Construction		93,842		757		-		480		2,933		98,012
Home equities		79,644		627		209		-		758		81,238
Consumer and other		706		9		4		-		-		719
Total Loans	$	1,523,498	$	22,646	$	8,417	$	1,028	$	17,387	$	1,572,976

Note: Loan balances do not include $(1.1) million of unaccreted yield adjustments as of December 31, 2021.
‎

15

Allowance for loan losses

The following tables present the activity in the allowance for loan losses according to portfolio segment for the three month periods ended September 30, 2022 and 2021.

	Three months ended September 30, 2022
	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer and Other		Residential Mortgages*		Home Equities		Total
Allowance for loan	(in thousands)
losses:
Beginning balance	$	3,714	$	12,305	$	70	$	2,164	$	566	$	18,819
Charge-offs		(1,515)		-		(45)		-		-		(1,560)
Recoveries		40		-		3		-		-		43
Provision		1,805		(603)		13		47		66		1,328
Ending balance	$	4,044	$	11,702	$	41	$	2,211	$	632	$	18,630

*Includes construction loans

	Three months ended September 30, 2021
	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer and Other		Residential Mortgages*		Home Equities		Total
Allowance for loan	(in thousands)
losses:
Beginning balance	$	3,790	$	13,925	$	58	$	1,694	$	475	$	19,942
Charge-offs		(424)		-		(29)		-		-		(453)
Recoveries		15		-		4		-		2		21
Provision		(228)		(1,555)		(12)		259		77		(1,459)
Ending balance	$	3,153	$	12,370	$	21	$	1,953	$	554	$	18,051

* Includes construction loans

‎

16

The following tables present the activity in the allowance for loan losses according to portfolio segment for the nine month periods ended September 30, 2022 and 2021.

	Nine months ended September 30, 2022
	(in thousands)
	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer and Other		Residential Mortgages*		Home Equities		Total
Allowance for loan
losses:
Beginning balance	$	3,309	$	12,367	$	54	$	2,127	$	581	$	18,438
Charge-offs		(1,546)		-		(112)		(55)		-		(1,713)
Recoveries		76		-		13		-		-		89
Provision (Credit)		2,205		(665)		86		139		51		1,816
Ending balance	$	4,044	$	11,702	$	41	$	2,211	$	632	$	18,630

‎*Includes construction loans

	Nine months ended September 30, 2021
	(in thousands)
	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer and Other		Residential Mortgages*		Home Equities		Total
Allowance for loan
losses:
Beginning balance	$	4,882	$	13,249	$	45	$	1,658	$	581	$	20,415
Charge-offs		(424)		-		(120)		-		-		(544)
Recoveries		58		-		26		-		2		86
Provision (Credit)		(1,363)		(879)		70		295		(29)		(1,906)
Ending balance	$	3,153	$	12,370	$	21	$	1,953	$	554	$	18,051

*Includes construction loans

‎

17

The following table presents the allocation of the allowance for loan losses according to portfolio segment summarized on the basis of the Company’s impairment methodology as of September 30, 2022 and December 31, 2021:

	September 30, 2022
	(in thousands)
	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer and Other		Residential Mortgages*		Home Equities		Total
Allowance for loan
losses:
Ending balance:
Loans acquired with deteriorated credit quality	$	-	$	-	$	-	$	-	$	-	$	-
Individually evaluated for impairment		2		2		-		66		39		109
Collectively evaluated for impairment		4,042		11,700		41		2,145		593		18,521
Total	$	4,044	$	11,702	$	41	$	2,211	$	632	$	18,630
Loans:
Ending balance:
Loans acquired with deteriorated credit quality	$	-	$	-	$	-	$	703	$	-	$	703
Individually evaluated for impairment		2,929		20,839		-		3,367		903		28,038
Collectively evaluated for impairment		235,164		848,060		427		432,168		82,431		1,598,250
Total	$	238,093	$	868,899	$	427	$	436,238	$	83,334	$	1,626,991

Note: Loan balances do not include $(0.5) million of unaccreted yield adjustments as of September 30, 2022.

* Includes construction loans

	December 31, 2021
	(in thousands)
	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer and Other		Residential Mortgages*		Home Equities		Total
Allowance for loan
losses:
Ending balance:
Loans acquired with deteriorated credit quality	$	-	$	-	$	-	$	-	$	-	$	-
Individually evaluated for impairment		100		345		-		9		41		495
Collectively evaluated for impairment		3,209		12,022		54		2,118		540		17,943
Total	$	3,309	$	12,367	$	54	$	2,127	$	581	$	18,438
Loans:
Ending balance:
Loans acquired with deteriorated credit quality	$	-	$	-	$	-	$	803	$	-	$	803
Individually evaluated for impairment		5,028		11,925		-		2,598		1,236		20,787
Collectively evaluated for impairment		232,049		825,848		719		412,768		80,002		1,551,386
Total	$	237,077	$	837,773	$	719	$	416,169	$	81,238	$	1,572,976

Note: Loan balances do not include $(1.1) million of unaccreted yield adjustments as of December 31, 2021.

* Includes construction loans

18

Impaired Loans

The following tables provide data, at the class level, for impaired loans as of the dates indicated:

	At September 30, 2022						At December 31, 2021
(in thousands)		Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial and industrial	$	2,926	$	3,551	$	-	$	4,874	$	5,712	$	-
Residential real estate:
Residential		3,784		4,253		-		3,297		3,654		-
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		11,814		12,150		-		8,821		9,338		-
Construction		8,854		8,998		-		1,395		1,499		-
Home equities		864		1,024		-		1,127		1,324		-
Consumer and other		-		-		-		-		-		-
Total impaired loans	$	28,242	$	29,976	$	-	$	19,514	$	21,527	$	-

	At September 30, 2022							At December 31, 2021
(in thousands)		Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With a related allowance recorded:
Commercial and industrial	$	3	$	3	$	2	$	154	$	158	$	100
Residential real estate:
Residential		245		245		66		60		60		9
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		171		197		2		171		717		16
Construction		-		-		-		1,538		1,555		329
Home equities		39		66		39		109		109		41
Consumer and other		-		-		-		-		-		-
Total impaired loans	$	458	$	511	$	109	$	2,032	$	2,599	$	495

‎

19

		At September 30, 2022					At December 31, 2021
(in thousands)		Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Total:
Commercial and industrial	$	2,929	$	3,554	$	2	$	5,028	$	5,870	$	100
Residential real estate:
Residential		4,029		4,498		66		3,357		3,714		9
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		11,985		12,347		2		8,992		10,055		16
Construction		8,854		8,998		-		2,933		3,054		329
Home equities		903		1,090		39		1,236		1,433		41
Consumer and other		-		-		-		-		-		-
Total impaired loans	$	28,700	$	30,487	$	109	$	21,546	$	24,126	$	495

			Three months ended September 30, 2022				Three months ended September 30, 2021
	(in thousands)		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Total:
Commercial and industrial		$	3,681	$	2	$	5,755	$	-
Residential real estate:
Residential			3,972		-		3,894		5
Construction			-		-		-		-
Commercial real estate:
Commercial			12,533		6		15,044		165
Construction			5,113		-		3,331		-
Home equities			932		4		1,440		3
Consumer and other			-		-		-		-
Total impaired loans		$	26,231	$	12	$	29,464	$	173

			Nine months ended September 30, 2022				Nine months ended September 30, 2021
	(in thousands)		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Total:
Commercial and industrial		$	4,251	$	6	$	5,657	$	29
Residential real estate:
Residential			3,735		12		4,756		22
Construction			-		-		-		-
Commercial real estate:
Commercial			10,785		183		15,014		228
Construction			3,881		-		3,305		2
Home equities			999		14		1,669		7
Consumer and other			-		-		-		-
Total impaired loans		$	23,651	$	215	$	30,401	$	288

20

Troubled debt restructurings

The following tables summarize the loans that were classified as troubled debt restructurings (“TDRs”) as of the dates indicated:

		September 30, 2022
		(in thousands)
		Total		Nonaccruing		Accruing		Related Allowance
Commercial and industrial	$	1,254	$	1,164	$	90	$	-
Residential real estate:
Residential		889		541		348		-
Construction		-		-		-		-
Commercial real estate:
Commercial and multi-family		2,795		-		2,795		-
Construction		-		-		-		-
Home equities		390		5		385		-
Consumer and other		-		-		-		-
Total TDR loans	$	5,328	$	1,710	$	3,618	$	-

		December 31, 2021
		(in thousands)
		Total		Nonaccruing		Accruing		Related Allowance
Commercial and industrial	$	1,003	$	876	$	127	$	-
Residential real estate:
Residential		989		627		362		-
Construction		-		-		-		-
Commercial real estate:
Commercial and multi-family		3,236		-		3,236		-
Construction		-		-		-		-
Home equities		490		12		478		-
Consumer and other		-		-		-		-
Total TDR loans	$	5,718	$	1,515	$	4,203	$	-

Any TDR that is placed on non-accrual status is not reverted back to accruing status until the borrower makes timely payments as contracted for at least six months and future collection under the revised terms is probable. All of the Company’s restructurings were allowed in an effort to maximize its ability to collect on loans where borrowers were experiencing financial difficulty.

The reserve for a TDR is based upon the present value of the future expected cash flows discounted at the loan’s original effective interest rate or upon the fair value of the collateral less costs to sell, if the loan is deemed collateral dependent. This reserve methodology is used because all TDR loans are considered impaired.

The Company’s TDRs have various agreements that involve deferral of principal payments, or interest-only payments, for a period (usually 12 months or less) to allow the borrower time to improve cash flow or sell the property. Other common concessions leading to the designation of a TDR are lines of credit that are termed-out and/or extensions of maturities at rates that are less than the prevailing market rates given the risk profile of the borrower.

During 2020, federal banking regulators issued guidance that modifications made to a borrower affected by the COVID-19 pandemic and governmental shutdown orders do not need to be identified as a TDR if the loan was current at the time a modification plan was implemented.

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21

The following tables present TDR activity by the type of concession granted to the borrower for the nine month periods ended September 30, 2022 and 2021. There were no new TDR loans during the three month periods ended September 30, 2022 and 2021.

	Nine months ended September 30, 2022					Nine months ended September 30, 2021
	(Recorded Investment in thousands)					(Recorded Investment in thousands)
Troubled Debt Restructurings by Type of Concession	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and Industrial:	-	$	-	$	-	-	$	-	$	-
Extension of maturity	1		461		461	-		-		-
Residential Real Estate & Construction:
Commercial Real Estate & Construction	-		-		-	-		-		-
Home Equities:
Extension of maturity and
interest rate reduction	1		38		38	-		-		-
Consumer and other loans	-		-		-	-		-		-

The general practice of the Bank is to work with borrowers so that they are able to repay their loan in full. If a borrower continues to be delinquent or cannot meet the terms of a TDR and the loan is determined to be uncollectible, the loan will be charged-off to its collateral value. A loan is considered in default when the loan is 90 days past due. Loans which were classified as TDRs during the previous 12 months which defaulted during the three month and nine month periods ended September 30, 2022 and 2021 were not material.

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22

4. COMMON EQUITY AND EARNINGS PER SHARE DATA

The common stock per share information is based upon the weighted average number of shares outstanding during each period. For the three and nine month periods ended September 30, 2022 the Company had an average of 36,646 and 42,572 dilutive shares outstanding, respectively. For the three and nine month periods ended September 30, 2021 the Company had an average of 57,705 and 52,128 dilutive shares outstanding, respectively.

Potential common shares that would have the effect of increasing diluted earnings per share are considered to be anti-dilutive and not included in calculating diluted earnings per share. There was an average of 54,680 and 55,847 potentially anti-dilutive shares outstanding for the three and nine month periods ended September 30, 2022, respectively. For the three and nine month periods ended September 30, 2021, there was an average of 39,390 and 80,614 potentially anti-dilutive shares outstanding, respectively. Potentially anti-dilutive shares outstanding were not included in calculating diluted earnings per share because their effect was anti-dilutive.

5. OTHER COMPREHENSIVE INCOME (LOSS)

The following tables summarize the changes in the components of accumulated other comprehensive income (loss) during the three and nine month periods ended September 30, 2022 and 2021:

	Balance at June 30, 2022		Net Change		Balance at September 30, 2022
	(in thousands)
Net unrealized loss on investment securities	$	(31,898)	$	(15,581)	$	(47,479)
Net defined benefit pension plan adjustments		(2,401)		56		(2,345)
Total	$	(34,299)	$	(15,525)	$	(49,824)

	Balance at June 30, 2021		Net Change		Balance at September 30, 2021
	(in thousands)
Net unrealized gain (loss) on investment securities	$	230	$	(1,530)	$	(1,300)
Net defined benefit pension plan adjustments		(2,965)		75		(2,890)
Total	$	(2,735)	$	(1,455)	$	(4,190)

	Balance at December 31, 2021		Net Change		Balance at September 30, 2022
	(in thousands)
Net unrealized loss on investment securities	$	(3,160)	$	(44,319)	$	(47,479)
Net defined benefit pension plan adjustments		(2,511)		166		(2,345)
Total	$	(5,671)	$	(44,153)	$	(49,824)

	Balance at December 31, 2020		Net Change		Balance at September 30, 2021
	(in thousands)
Net unrealized gain (loss) on investment securities	$	2,397	$	(3,697)	$	(1,300)
Net defined benefit pension plan adjustments		(3,116)		226		(2,890)
Total	$	(719)	$	(3,471)	$	(4,190)

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23

	Three months ended September 30, 2022						Three months ended September 30, 2021
	(in thousands)						(in thousands)
	Before-Tax Amount		Income Tax (Provision) Benefit		Net-of-Tax Amount		Before-Tax Amount		Income Tax (Provision) Benefit		Net-of-Tax Amount
Unrealized loss on investment
securities:
Unrealized loss on investment
securities	$	(21,016)	$	5,435	$	(15,581)	$	(2,066)	$	536	$	(1,530)
Defined benefit pension plan
adjustments:
Amortization of prior service cost		8		(2)		6		7		(2)		5
Amortization of actuarial loss		68		(18)		50		95		(25)		70
Net change		76		(20)		56		102		(27)		75
Other comprehensive loss	$	(20,940)	$	5,415	$	(15,525)	$	(1,964)	$	509	$	(1,455)

	Nine months ended September 30, 2022						Nine months ended September 30, 2021
	(in thousands)						(in thousands)
	Before-Tax Amount		Income Tax (Provision) Benefit		Net-of-Tax Amount		Before-Tax Amount		Income Tax (Provision) Benefit		Net-of-Tax Amount
Unrealized loss on investment
securities:
Unrealized loss on investment
securities	$	(59,796)	$	15,477	$	(44,319)	$	(4,995)	$	1,298	$	(3,697)
Defined benefit pension plan
adjustments:
Amortization of prior service cost		24		(8)		16		23		(7)		16
Amortization of actuarial loss		203		(53)		150		285		(75)		210
Net change		227		(61)		166		308		(82)		226
Other comprehensive loss	$	(59,569)	$	15,416	$	(44,153)	$	(4,687)	$	1,216	$	(3,471)

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24

6. NET PERIODIC BENEFIT COSTS

On January 31, 2008, the Bank froze its defined benefit pension plan. The plan covered substantially all Bank employees. The plan provides benefits that are based on the employees’ compensation and years of service. Under the freeze, eligible employees will receive, at retirement, the benefits already earned through January 31, 2008, but have not accrued any additional benefits since then. As a result, service cost is no longer incurred.

The Bank uses an actuarial method of amortizing prior service cost and unrecognized net gains or losses which result from actual expense and assumptions being different than those that are projected. The amortization method the Bank used recognized the prior service cost and net gains or losses over the average remaining service period of active employees.

The Bank also maintains a nonqualified supplemental executive retirement plan covering certain members of the Company’s senior management. The Bank uses an actuarial method of amortizing unrecognized net gains or losses which result from actual expense and assumptions being different than those that are projected. The amortization method the Bank uses recognizes the net gains or losses over the average remaining service period of active employees.

The following table presents the net periodic cost for the Bank’s defined benefit pension plan and supplemental executive retirement plan for the three and nine month periods ended September 30, 2022 and 2021:

		Three months ended September 30,
		(in thousands)
					Supplemental Executive
	Pension Benefits				Retirement Plan
	2022		2021		2022		2021
Service cost	$	-	$	-	$	33	$	37
Interest cost		44		41		31		25
Expected return on plan assets		(88)		(89)		-		-
Amortization of prior service cost		-		-		8		7
Amortization of the net loss		24		24		44		71
Net periodic (benefit) cost	$	(20)	$	(24)	$	116	$	140

		Nine months ended September 30,
		(in thousands)
					Supplemental Executive
	Pension Benefits				Retirement Plan
	2022		2021		2022		2021
Service cost	$	-	$	-	$	99	$	112
Interest cost		133		122		93		75
Expected return on plan assets		(264)		(266)		-		-
Amortization of prior service cost		-		-		24		23
Amortization of the net loss		71		72		132		213
Net periodic (benefit) cost	$	(60)	$	(72)	$	348	$	423

The components of net periodic benefit cost other than the service cost component are included in the line item “other expense” in the income statement.

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25

7. REVENUE RECOGNITION OF NON-INTEREST INCOME

A description of the Company’s material revenue streams in non-interest income accounted for under ASC 606 follows:

Insurance Service and Fees: Insurance services revenue relates to various revenue streams from services provided by TEA and the Bank:

TEA earns commission revenue from selling commercial and personal property and casualty (“P&C”) insurance as well as employee benefits solutions to commercial customers.

TEA has agreements with various insurance companies to sell policies to customers on behalf of the carriers. The performance obligation for TEA is to sell annual P&C policies to commercial customers and consumers. This performance obligation is met when a new policy is sold or when an existing policy renews. The policies are generally one year terms. In the agreements with the respective insurance companies, a commission rate is agreed upon.  The commission is recognized at the time of the sale of the policy or when a policy renews.

TEA has signed contracts with insurance carriers that enable TEA to sell benefit plans to commercial customers on behalf of the insurance carriers. The performance obligation for TEA is to sell the plans to commercial customers. After the initial sale when the customer signs an agreement to purchase the offered benefit plan, the performance obligation is met each month when a customer continues utilizing benefit plans from the carrier. The customer does not commit to a specific length of time with the carrier. In the agreements with the respective insurance companies, a commission rate is agreed upon. Revenue is recognized each month when the customer continues with the benefit plan sold by TEA.

TEA also earns contingent profit sharing revenue. TEA has signed written agreements with insurance carriers that document payouts to TEA based on the loss ratios of its customers. The performance obligation for TEA is to maintain a customer base with loss ratios below the agreed upon thresholds. In the contracts with the insurance companies, payout rates based on loss ratios are documented. The consideration is variable as loss ratios vary based on customer experience.  TEA’s performance obligation is over the course of the year as its customers’ performance with insurance carriers is measured throughout the year as losses occur. Due to the variable nature of contingent profit sharing revenue, TEA will accrue contingent profit sharing revenue throughout the year based on recent historical results. As loss events occur and overall performance becomes known to TEA, accrual adjustments will be made until the cash is ultimately received. 

Financial services commission revenue from the Bank related to wealth management such as life insurance, annuities, and mutual funds sales is also included in the “insurance service and fees” line of the income statement.

The Company earns wealth management fees from its contracts with customers for certain financial services.  Fees that are transaction-based are recognized at the point in time that the transaction is executed.  Other related services provided include financial planning services and the fees the Bank earns are recognized when the services are rendered. 

Insurance claims services revenue is recorded at FCS.

FCS has signed agreements with insurance companies to perform claims services including investigative and adjustment services related to residential and commercial lines. The performance obligation is for FCS to investigate the insurance claims and inspecting the damage to determine the extent of the insurance company’s liability. FCS is paid based on time and materials expended to investigate the claim. The rates paid are determined in the agreement between FCS and the respective insurance companies. Upon completion of its claims inspection work, FCS bills the insurance company for services rendered and recognizes the revenue earned.  FCS discontinued operations on December 31, 2021.

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26

A disaggregation of the total insurance service and other fees for the three and nine months ended September 30, 2022 and 2021 is provided in the tables below:

		Three months ended September 30,
		2022		2021
		(in thousands)
Commercial property and casualty insurance commissions	$	1,706	$	1,426
Personal property and casualty insurance commissions		901		856
Employee benefits sales commissions		206		231
Profit sharing and contingent revenue		410		410
Wealth management and other financial services		137		161
Insurance claims services revenue		-		77
Other insurance-related revenue		23		30
Total insurance service and other fees	$	3,383	$	3,191

		Nine months ended September 30,
		2022		2021
	(in thousands)
Commercial property and casualty insurance commissions	$	3,525	$	3,248
Personal property and casualty insurance commissions		2,554		2,517
Employee benefits sales commissions		649		692
Profit sharing and contingent revenue		971		1,029
Wealth management and other financial services		457		508
Insurance claims services revenue		-		236
Other insurance-related revenue		93		120
Total insurance service and other fees	$	8,249	$	8,350

8. FAIR VALUE MEASUREMENT

Fair value is defined in ASC Topic 820 “Fair Value Measurement” as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

There are three levels of inputs to fair value measurement:

	Level 1 inputs are quoted prices for identical instruments in active markets;
	Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and
	Level 3 inputs are unobservable inputs.

Observable market data should be used when available.

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27

FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE ON A RECURRING BASIS

The following table presents, for each of the fair-value hierarchy levels as defined in this footnote, those financial instruments which are measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021, respectively:

(in thousands)		Level 1		Level 2		Level 3		Fair Value
September 30, 2022
Securities available-for-sale:
US treasuries and government agencies	$	-	$	141,064	$	-	$	141,064
States and political subdivisions		-		21,854		-		21,854
Mortgage-backed securities		-		206,223		-		206,223
December 31, 2021
Securities available-for-sale:
US treasuries and government agencies	$	-	$	96,818	$	-	$	96,818
States and political subdivisions		-		6,246		-		6,246
Mortgage-backed securities		-		202,895		-		202,895

Securities available for sale

Fair values for available for sale securities are determined using independent pricing services and market-participating brokers. The Company utilizes a third-party for these pricing services. The third-party utilizes evaluated pricing models that vary by asset class and incorporate available trade, bid and other market information for structured securities, cash flow and, when available, loan performance data. Because many fixed income securities do not trade on a daily basis, the third-party service provider’s evaluated pricing applications apply information as applicable through processes, such as benchmarking of like securities, sector groupings, and matrix pricing, to prepare evaluations. In addition, our third-party pricing service provider uses model processes, such as the Option Adjusted Spread model, to assess interest rate impact and develop prepayment scenarios. The models and the process take into account market convention. For each asset class, a team of evaluators gathers information from market sources and integrates relevant credit information, perceived market movements and sector news into the evaluated pricing applications and models. The third-party, at times, may determine that it does not have sufficient verifiable information to value a particular security. In these cases the Company will utilize valuations from another pricing service.

On a quarterly basis the Company reviews changes, as submitted by our third-party pricing service provider, in the market value of its securities portfolio. Individual changes in valuations are reviewed for consistency with general interest rate movements and any known credit concerns for specific securities. Additionally, on a quarterly basis the Company has its entire securities portfolio priced by a second pricing service to determine consistency with another market evaluator. If, on the Company’s review or in comparing with another servicer, a material difference between pricing evaluations were to exist, the Company may submit an inquiry to our third-party pricing service provider regarding the data used to value a particular security. If the Company determines it has market information that would support a different valuation than our third-party service provider’s evaluation it can submit a challenge for a change to that security’s valuation.

Securities available for sale are classified as Level 2 in the fair value hierarchy as the valuation provided by the third-party provider uses observable market data.

ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A NONRECURRING BASIS

The Company is required, on a nonrecurring basis, to adjust the carrying value of certain assets or provide valuation allowances related to certain assets using fair value measurements. The following table presents for each of the fair-value hierarchy levels as defined in this footnote, those financial instruments which are measured at fair value on a nonrecurring basis September 30, 2022 and December 31, 2021:

(in thousands)		Level 1		Level 2		Level 3		Fair Value
September 30, 2022
Collateral dependent impaired loans	$	-	$	-	$	1,146	$	1,146
December 31, 2021
Collateral dependent impaired loans	$	-	$	-	$	4,608	$	4,608

28

Impaired loans

Collateral dependent loans carried at fair value have been partially charged-off or receive specific allocations of the allowance for credit losses. The Company evaluates and values collateral dependent impaired loans at the time the loan is identified as impaired, and the fair values of such loans are estimated using Level 3 inputs in the fair value hierarchy. Each loan’s collateral value has a unique appraisal and management’s discount of the value is based on factors unique to each impaired loan. The significant unobservable input in determining the fair value is management’s subjective discount on appraisals of the collateral securing the loan, which ranges from 10%-50%. Fair value is estimated based on the value of the collateral securing these loans. Collateral may consist of real estate and/or business assets including equipment, inventory and/or accounts receivable and the value of these assets is determined based on appraisals by qualified licensed appraisers hired by the Company. Appraised and reported values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, estimated costs to sell, and/or management’s expertise and knowledge of the client and the client’s business.

The Company has an appraisal policy in which appraisals are obtained upon a commercial loan being downgraded on the Company’s internal loan rating scale to a special mention or a substandard depending on the amount of the loan, the type of loan and the type of collateral.  All impaired commercial loans are graded substandard or worse on the internal loan rating scale.  For consumer loans, the Company obtains appraisals when a loan becomes 90 days past due or is determined to be impaired, whichever occurs first.  Subsequent to the downgrade or reaching 90 days past due, if the loan remains outstanding and impaired for at least one year more, management may require another follow-up appraisal.  Between receipts of updated appraisals, if necessary, management may perform an internal valuation based on any known changing conditions in the marketplace such as sales of similar properties, a change in the condition of the collateral, or feedback from local appraisers.  Collateral dependent impaired loans had a gross value of $1.2 million, with an allowance for loan loss of $0.1 million, at September 30, 2022 compared with $5.0 million and $0.4 million, respectively, at December 31, 2021.

The table below depicts the estimated fair values of the Company’s financial instruments, including those that are not measured and reported at fair value on a recurring basis or nonrecurring basis.

	September 30, 2022				December 31, 2021
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
		(in thousands)				(in thousands)
Financial assets:
Level 1:
Cash and cash equivalents	$	21,207	$	21,207	$	244,785	$	244,785
Level 2:
Available for sale securities		369,141		369,141		305,959		305,959
FHLB and FRB stock		6,730		N/A		6,084		N/A
Level 3:
Held to maturity securities		7,572		7,413		3,165		3,179
Loans, net		1,607,827		1,518,516		1,553,467		1,573,420
Financial liabilities:
Level 1:
Demand deposits	$	558,805	$	558,805	$	492,864	$	492,864
NOW deposits		263,648		263,648		259,908		259,908
Savings deposits		913,383		913,383		1,019,925		1,019,925
Level 2:
Securities sold under agreement to
repurchase		9,812		9,812		4,112		4,112
Other borrowed funds		42,594		41,902		32,879		32,990
Subordinated debt		31,050		30,906		30,974		32,111
Level 3:
Time deposits		137,910		135,710		164,340		164,574

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29

9. SEGMENT INFORMATION

The Company comprises two primary business segments, banking and insurance agency activities. The following tables set forth information regarding these segments for the three and nine month periods ended September 30, 2022 and 2021.

	Three months ended September 30, 2022
		Banking		Insurance Agency
		Activities		Activities		Total
		(in thousands)
Net interest income	$	19,188	$	-	$	19,188
Provision for loan losses		1,328		-		1,328
Net interest income after
provision for loan losses		17,860		-		17,860
Insurance service and fees		134		3,249		3,383
Other non-interest income		2,384		-		2,384
Amortization expense		5		95		100
Other non-interest expense		13,750		1,941		15,691
Income before income taxes		6,623		1,213		7,836
Income tax provision		1,658		314		1,972
Net income	$	4,965	$	899	$	5,864

	Three months ended September 30, 2021
		Banking		Insurance Agency
		Activities		Activities		Total
		(in thousands)
Net interest income (expense)	$	18,165	$	(2)	$	18,163
Provision (credit) for loan losses		(1,459)		-		(1,459)
Net interest income (expense) after
provision for loan losses		19,624		(2)		19,622
Insurance service and fees		141		3,050		3,191
Other non-interest income		1,966		-		1,966
Amortization expense		6		129		135
Other non-interest expense		13,382		1,876		15,258
Income before income taxes		8,343		1,043		9,386
Income tax provision		2,135		272		2,407
Net income	$	6,208	$	771	$	6,979

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30

	Nine months ended September 30, 2022
		Banking		Insurance Agency
		Activities		Activities		Total
		(in thousands)
Net interest income	$	53,741	$	-	$	53,741
Provision for loan losses		1,816		-		1,816
Net interest income after
provision for loan losses		51,925		-		51,925
Insurance service and fees		442		7,807		8,249
Other non-interest income		6,561		-		6,561
Amortization expense		15		285		300
Other non-interest expense		39,137		5,598		44,735
Income before income taxes		19,776		1,924		21,700
Income tax provision		4,855		499		5,354
Net income	$	14,921	$	1,425	$	16,346

	Nine months ended September 30, 2021
		Banking		Insurance Agency
		Activities		Activities		Total
		(in thousands)
Net interest income (expense)	$	53,118	$	(8)	$	53,110
Provision (credit) for loan losses		(1,906)		-		(1,906)
Net interest income (expense) after
provision for loan losses		55,024		(8)		55,016
Insurance service and fees		456		7,894		8,350
Other non-interest income		5,787		4		5,791
Amortization expense		16		389		405
Other non-interest expense		38,603		5,926		44,529
Income before income taxes		22,648		1,575		24,223
Income tax provision		5,669		410		6,079
Net income	$	16,979	$	1,165	$	18,144

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31

10. CONTINGENT LIABILITIES AND COMMITMENTS

The unaudited consolidated financial statements do not reflect various commitments and contingent liabilities, which arise in the normal course of business, and which involve elements of credit risk, interest rate risk and liquidity risk. These commitments and contingent liabilities consist of commitments to extend credit and standby letters of credit. A summary of the Bank’s commitments and contingent liabilities is as follows:

	September 30,		December 31,
	2022		2021
	(in thousands)
Commitments to extend credit	$	397,799	$	394,953
Standby letters of credit		10,657		4,636
Total	$	408,456	$	399,589

Commitments to extend credit and standby letters of credit include some exposure to credit loss in the event of nonperformance by the customer. The Bank’s credit policies and procedures for credit commitments and financial guarantees are the same as those for extensions of credit that are recorded on the Company’s unaudited consolidated balance sheets. Because these instruments have fixed maturity dates, and because they may expire without being drawn upon, they do not necessarily represent cash requirements of the Bank. The Bank did not incur any losses on its commitments and did not record a reserve for its commitments during the first nine months of 2022 or during 2021.

Certain lending commitments for construction residential mortgage loans are considered derivative instruments under the guidelines of GAAP. The changes in the fair value of these commitments, due to interest rate risk, are not recorded on the consolidated balance sheets as the fair value of these derivatives is not considered to be material.

11. RECENT ACCOUNTING PRONOUNCEMENTS

ASUs adopted by the Company during the current fiscal year are not expected to have a material impact on the Company’s consolidated financial position, results of operations, cash flows or disclosures. The following standard will be adopted in a future period. ASUs not listed below are not expected to have a material impact on the Company’s consolidated financial position, results of operations, cash flows or disclosures.

ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments – Current GAAP requires an “incurred loss” methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. Both financial institutions and users of their financial statements expressed concern that current GAAP restricts the ability to record credit losses that are expected, but do not yet meet the “probable” threshold. The main objective of this ASU (commonly known as the Current Expected Credit Loss Impairment Model, or CECL, in the industry) is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in CECL replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company has contracted with a third-party software vendor to assist with the development of the Bank’s approach for determining expected credit losses under the new guidance. The Company is actively working on preliminary test calculations, data validation, as well as process and procedural documentation. While the total impact of CECL to the Company’s financial statements is unknown at this time, the Company recognizes it may be material. On October 16, 2019, the FASB affirmed its decision to amend the effective date for the amendments in CECL for smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company will adopt CECL effective January 1, 2023.

ASU 2022-02, Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures – This ASU eliminates the accounting guidance for troubled debt restructurings ("TDRs") in ASC 310-40, "Receivables - Troubled Debt Restructurings by Creditors" for entities that have adopted the CECL model introduced by ASU 2016-13. ASU 2022-02 also requires that public business entities disclose current-period gross charge-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, "Financial Instruments—Credit Losses—Measured at Amortized Cost". The Company will adopt ASU 2022-02 effective January 1, 2023.

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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve substantial risks and uncertainties. When used in this report, or in the documents incorporated by reference herein, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “seek,” and similar expressions identify such forward-looking statements. These forward-looking statements include statements regarding the Company’s business plans, prospects, growth and operating strategies, statements regarding the asset quality of the Company’s loan and investment portfolios, and estimates of the Company’s risks and future costs and benefits.

These forward-looking statements are based largely on the expectations of the Company’s management and are subject to a number of risks and uncertainties, including but not limited to: adverse changes in general economic conditions, either nationally or in the Company’s market areas; increased competition among depository or other financial institutions; inflation and changes in the interest rate environment that reduce the Company’s margins or reduce the fair value of financial instruments; changes in laws or government regulations affecting financial institutions, including changes in regulatory fees, monetary policy, and capital requirements; the Company’s ability to enter new markets successfully and capitalize on growth opportunities; the Company’s ability to successfully integrate acquired entities; loan losses in excess of the Company’s allowance for loan losses; changes in accounting pronouncements and practices, as adopted by financial institution regulatory agencies, the Financial Accounting Standards Board and the Public Company Accounting Oversight Board; the impact of such changes in accounting pronouncements and practices being greater than anticipated; the ability to realize the benefit of deferred tax assets; changes in tax policies, rates and regulations of federal, state and local tax authorities; changes in consumer spending, borrowing and saving habits; changes in the Company’s organization, compensation and benefit plans; the effects of pandemics, including the effects of government responses, changes in consumer behavior, and supply chain interruptions; and other factors discussed elsewhere in this Quarterly Report on Form 10-Q, as well as in the Company’s periodic reports filed with the SEC, in particular the “Risk Factors” discussed in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Many of these factors are beyond the Company’s control and are difficult to predict.

Because of these and other uncertainties, the Company’s actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. Forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise forward-looking information, whether as a result of new, updated information, future events or otherwise, except to the extent required by law.

The Discussion and Analysis of Financial Condition and Results of Operations that follows includes comparisons to the quarter ended September 30, 2021 as well as the trailing quarter ended June 30, 2022 and balances as of December 31, 2021. Information with respect to the trailing quarter ended June 30, 2022 is included in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 as filed with the SEC.

APPLICATION OF CRITICAL ACCOUNTING ESTIMATES

The Company’s Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q are prepared in accordance with U.S. GAAP and follow general practices within the industries in which it operates. Application of these principles requires management to make estimates, assumptions, and judgments that affect the amounts reported in the Company’s Unaudited Consolidated Financial Statements and Notes. These estimates, assumptions, and judgments are based on information available as of the date of the Unaudited Consolidated Financial Statements. Accordingly, as this information changes, the Unaudited Consolidated Financial Statements could reflect different estimates, assumptions, and judgments. Certain policies inherently have a greater reliance on the use of estimates, assumptions, and judgments, and as such, have a greater possibility of producing results that could be materially different than originally reported.

Significant accounting policies followed by the Company are presented in Note 1 – “Organization and Summary of Significant Accounting Policies” to the Audited Consolidated Financial Statements included in Item 8 in its Annual Report on Form 10-K for the year ended December 31, 2021. These policies, along with the disclosures presented in the other Notes to the Company's Audited Consolidated Financial Statements contained in its Annual Report on Form 10-K and in this financial review, provide information on how significant assets and liabilities are presented in the Company’s Unaudited Consolidated Financial Statements and how those values are determined.

The more significant areas in which management of the Company applies critical assumptions and estimates includes the allowance for loan losses.

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Allowance for Loan Losses

The allowance for loan losses (“ALLL”) represents management’s estimate of probable incurred losses in the Bank’s loan portfolio. Determining the amount of the allowance for loan losses requires significant judgment on the part of management and the use of estimates related to the amount and timing of expected future cash flows on impaired loans, estimated losses on pools of homogeneous loans based on historical loss experience, consideration of current economic trends and conditions, and other qualitative and quantitative factors, all of which may be susceptible to significant change. Qualitative loss factors are applied to each portfolio segment with the amounts determined by historical loan charge-offs of a peer group of similar-sized regional banks. It is difficult to estimate how potential changes in any one economic factor or input might affect the overall allowance because a wide variety of factors and inputs are considered in estimating the allowance and changes in those factors and inputs considered may not occur at the same rate and may not be consistent across all product types. Additionally, changes in factors and inputs may be directionally inconsistent, such that improvement in one factor may offset deterioration in others.

In estimating the ALLL on loans, management considers the sensitivity of the model and significant judgments and assumptions that could result in an amount that is materially different from management’s estimate. Given the concentration of ALLL allocation to the total commercial portfolio and the significant judgments made by management in deriving the qualitative loss factors, management analyzed the impact that changes in judgments could have. The range of impact on the ALLL allocated to the total commercial loan portfolio was between a reduction of $12.1 million and an increase of $9.7 million at September 30, 2022. The sensitivity and related range of impact is a hypothetical analysis and is not intended to represent management’s judgments or assumptions of qualitative loss factors that were utilized at September 30, 2022 in estimation of the ALLL on loans recognized on the Consolidated Balance Sheet.

If the assumptions underlying the determination of the ALLL prove to be incorrect, the ALLL may not be sufficient to cover actual loan losses and an increase to the ALLL may be necessary to allow for different assumptions or adverse developments. In addition, a problem with one or more loans could require a significant increase to the ALLL.

ANALYSIS OF FINANCIAL CONDITION

Loan Activity

Total gross loans were $1.6 billion at September 30, 2022, December 31, 2021 and September 30, 2021. Total gross loans increased $55 million from December 31, 2021 and $12 million from the prior year period. PPP loan balances, which are included in commercial and industrial loans, decreased $24 million from December 31, 2021 and $75 million year-over-year. Excluding the decline in PPP loans, gross loans increased $79 million during 2022 and $87 million from the prior year period.

Loans secured by real estate were $1.4 billion at September 30, 2022, compared with $1.3 billion at December 31, 2021 and September 30, 2021. Residential real estate loans, including construction loans, were $436 million at September 30, 2022, $20 million or 5% higher than at December 31, 2021, and $27 million or 7% higher than at September 30, 2021. The increase in residential real estate loans reflects management’s decision to retain the majority of residential mortgages within our loan portfolio. Commercial real estate loans, including construction loans, were $869 million at September 30, 2022, $31 million or 4% higher than the balance at December 31, 2021, and $26 million or 3% higher than the balance at September 30, 2021.

In the third quarter of 2022, residential mortgage originations were $22 million compared with the previous quarter’s originations of $18 million and $31 million in the third quarter of 2021. The Company originated $62 million in residential mortgages in the first nine months of 2022, compared with $96 million in the first nine months of 2021. The decrease in residential mortgage originations as compared to the prior year is primarily due to customers refinancing at lower interest rates during the first nine months of 2021. The Company sold $1.3 million of residential mortgages during the third quarter of 2022 compared with $0.6 million during the second quarter of 2022. During the first nine months of 2022 the Company sold $4.8 million of residential mortgages. The Company did not sell any residential mortgages during the first nine months of 2021. Management decides to keep or sell residential mortgage loans at the time of origination based on interest rate risk management and the risk-adjusted return of alternative investment sources such as mortgage-backed securities.

The Company has also focused on growth opportunities in commercial and industrial (“C&I”) lending as a way to diversify its overall loan portfolio. The C&I portfolio was $238 million at September 30, 2022, representing a $1 million or less than 1% increase from December 31, 2021, and a decrease of $47 million or 16% from September 30, 2021. The decrease from prior year period is primarily the result of SBA forgiveness of $75 million of PPP loans as the program approaches conclusion. The Company originated a total of $298 million of PPP loans under the program during 2020 and 2021. As of September 30, 2022, a total of $297 million of the PPP loans have been forgiven by the SBA, including $2.5 million that was forgiven during the third quarter of 2022. A total of $24 million has been forgiven during the first nine months of 2022. Excluding the decline in PPP loans, C&I loans increased $25 million during 2022 and $28 million from the prior year period. C&I lending is a critical component of the Company’s strategy as C&I relationships can often include core deposits.

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Credit Quality of Loan Portfolio

Non-performing loans, defined as accruing loans greater than 90 days past due and nonaccrual loans, totaled $26 million, or 1.60% of total loans outstanding at September 30, 2022, compared with $18 million, or 1.17% of total loans outstanding, as of December 31, 2021 and $25 million, or 1.58% of total loans outstanding, as of September 30, 2021. The increase in non-performing loans since the end of last year was primarily due to two separate commercial real estate loans totaling $13 million that moved to non-accrual status during 2022, partially offset by a commercial real estate loan of $1.2 million that moved to other real estate owned during the second quarter of 2022 and a commercial and industrial loan with a balance of $1.8 million as of December 31, 2021 that was charged-off during the third quarter of 2022.

Commercial credits graded as “special mention” and “substandard,” or the criticized loan portfolio, were $89 million at September 30, 2022, a $22 million decrease from $111 million at December 31, 2021, and a $32 million decrease from $121 million at September 30, 2021. The Company continues to evaluate its portfolio of loans to clients within the hotel industry for residual impacts from the COVID-19 pandemic. The Company classified $81 million of loans to clients within the hotel industry as criticized in 2020. Subsequently, more than half of this portfolio has been upgraded or paid off. Currently, $38 million of the hotel portfolio remains in criticized status at the end of the 2022 third quarter. The level of criticized loans can fluctuate as new information is constantly received on the Company’s borrowers and their financial circumstances change over time. Internal risk ratings are the credit quality indicators used by the Company’s management to determine the appropriate allowance for loan losses for commercial credits. “Special mention” and “substandard” loans are weaker credits with a higher risk of loss and are categorized as “criticized” credits rather than “pass” or “watch” credits.

The Company maintains an allowance for loan losses that in management’s judgment appropriately reflects losses inherent in the loan portfolio. Loans acquired in a business combination are recorded at fair value with no carry-over of an acquired entity’s previously established allowance for credit losses. The allowance for loan losses totaled $18.6 million or 1.15% of total loans outstanding at September 30, 2022, compared with $18.4 million or 1.17% of total loans outstanding as of December 31, 2021 and $18.1 million or 1.12% of total loans outstanding at September 30, 2021. The Company recorded a $1.3 million provision for loan losses in the third quarter of 2022, compared with $0.3 million the second quarter of 2022, and a credit of $1.5 million during the third quarter of 2021. The higher-than-average provision for loan losses during the third quarter of 2022 was primarily due to the $1.5 million charge-off of a single government agency guaranteed commercial loan. During the third quarter of 2022, the Company was notified that its claim for reimbursement of the guarantee was denied.

Investing Activities

Total investment securities were $377 million at September 30, 2022, compared with $309 million at December 31, 2021 and $258 million at September 30, 2021. The increases reflect the use of excess cash balances. The primary objectives of the Company’s investment portfolio are to provide liquidity, provide collateral to secure municipal deposits, and maximize income while preserving safety of principal. Interest-bearing deposits at other banks, which consist of overnight funds kept at correspondent banks and the Federal Reserve, were $7 million at September 30, 2022 compared to $235 million at December 31, 2021, and $179 million at September 30, 2021. The primary uses of cash during 2022 were to purchase securities and originate loans. Average investment securities and interest-bearing cash were 22% of average interest-earning assets in the third quarter of 2022, compared with 24% in the second quarter of 2022 and 20% in the third quarter of 2021.

The Company’s highest concentration in its securities portfolio was in available for sale U.S. government sponsored mortgage-backed securities which comprised 55%, 66% and 63% of total investment securities at September 30, 2022, December 31, 2021 and September 30, 2021, respectively. Tax-advantaged debt securities issued by state and political subdivisions was 3%, 3% and 4% of the total securities portfolio at September 30, 2022, December 31, 2021 and September 30, 2021, respectively. The concentration in U.S. government-sponsored agency bonds was 37%, 31% and 33% of the total securities portfolio as of September 30, 2022, December 31, 2021 and September 30, 2021, respectively.

The total net unrealized loss position of the available-for-sale investment portfolio was $64.1 million at September 30, 2022, compared with net unrealized gains of $4.3 million at December 31, 2021 and net unrealized losses of $1.8 million at September 30, 2021. The securities in an unrealized loss position at the end of the third quarter of 2022 reflect an increase in market interest rates.  Management believes that the credit quality of the securities portfolio as a whole is strong. 

The Company monitors extension and prepayment risk in the securities portfolio to limit potential exposures. The Company has no direct exposure to subprime mortgages, nor does the Company hold private mortgage-backed securities, credit default swaps, or FNMA or FHLMC preferred stock investments in its investment portfolio.

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Funding Activities

Total deposits at September 30, 2022 were $1.9 billion, a $63 million or 3% decrease from December 31, 2021, and a $2 million or less than 1 percent decrease from September 30, 2021. The decrease from the beginning of 2022 reflects decreases in commercial savings deposits of $63 million, or 23%, consumer savings deposits of $46 million or 8%, and retail time deposits of $24 million or 16%. These decreases were offset by increases in total demand deposits of $66 million or 13% and total NOW deposits of $4 million or 1%.

The Company had $20 million in long-term advances from the Federal Home Loan Bank of New York (“FHLBNY”) at September 30, 2022, compared with $33 million at December 31, 2021 and $37 million at September 30, 2021. At September 30, 2022 overnight borrowings was $23 million. There were no overnight borrowings at December 31, 2021 and September 30, 2021. The Company’s use of its overnight line of credit with FHLBNY varies depending on its ability to fund investment and loan growth with deposits along with the line usage’s impact on interest rate risk.

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ANALYSIS OF RESULTS OF OPERATIONS

Average Balance Sheet

The following tables present the significant categories of the assets and liabilities of the Company, interest income and interest expense, and the corresponding yields earned and rates paid for the periods indicated. The assets and liabilities are presented as daily averages. The average loan balances include both performing and non-performing loans. Interest income on loans does not include interest on loans for which the Bank has ceased to accrue interest. Investments are included at book value. Yields are presented on a non-tax-equivalent basis.

	Three months ended September 30, 2022						Three months ended September 30, 2021
	Average		Interest				Average		Interest
	Outstanding		Earned/		Yield/		Outstanding		Earned/		Yield/
	Balance		Paid		Rate		Balance		Paid		Rate
	(dollars in thousands)						(dollars in thousands)
ASSETS
Interest-earning assets:
Loans, net (1)	$	1,597,382	$	17,988	4.47	%	$	1,647,395	$	18,096	4.36	%
Taxable securities		394,148		2,190	2.20	%		238,547		1,087	1.81	%
Tax-exempt securities		12,555		92	2.91	%		10,143		55	2.15	%
Interest bearing deposits at banks		42,788		217	2.01	%		174,296		64	0.15	%
Total interest-earning assets		2,046,873	$	20,487	3.97	%		2,070,381	$	19,302	3.70	%
Non interest-earning assets:
Cash and due from banks		16,599						10,399
Premises and equipment, net		17,225						18,909
Other assets		88,497						80,293
Total Assets	$	2,169,194					$	2,179,982
LIABILITIES & STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
NOW	$	269,359	$	71	0.10	%	$	262,105	$	63	0.10	%
Savings		964,051		471	0.19	%		949,956		356	0.15	%
Time deposits		132,319		213	0.64	%		186,126		231	0.49	%
Other borrowed funds		27,719		80	1.15	%		39,391		83	0.84	%
Subordinated debt		31,035		461	5.89	%		30,934		405	5.19	%
Securities sold U/A to repurchase		7,236		3	0.16	%		4,001		1	0.10	%
Total interest-bearing liabilities		1,431,719	$	1,299	0.36	%		1,472,513	$	1,139	0.31	%
Noninterest-bearing liabilities:
Demand deposits		549,625						503,006
Other		22,073						25,250
Total liabilities	$	2,003,417					$	2,000,769
Stockholders' equity		165,777						179,213
Total Liabilities and Equity	$	2,169,194					$	2,179,982
Net interest income			$	19,188					$	18,163
Net interest margin					3.72	%					3.48	%
Interest rate spread					3.61	%					3.39	%

(1) Included in interest earned on loans were PPP loan fees of $0.1 million and $2.1 million for the three months ended September 30, 2022 and 2021, respectively. Other loan fees included in interest earned were not material during the three months ended September 30, 2022 and 2021.
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	Nine months ended September 30, 2022						Nine months ended September 30, 2021
	Average		Interest				Average		Interest
	Outstanding		Earned/		Yield/		Outstanding		Earned/		Yield/
	Balance		Paid		Rate		Balance		Paid		Rate
	(dollars in thousands)						(dollars in thousands)
ASSETS
Interest-earning assets:
Loans, net (1)	$	1,585,469	$	50,540	4.26	%	$	1,690,527	$	53,675	4.25	%
Taxable securities		374,767		5,851	2.09	%		204,604		2,907	1.90	%
Tax-exempt securities		11,080		197	2.38	%		10,745		167	2.08	%
Interest bearing deposits at banks		110,494		513	0.62	%		116,396		99	0.11	%
Total interest-earning assets		2,081,810	$	57,101	3.67	%		2,022,272	$	56,848	3.76	%
Non interest-earning assets:
Cash and due from banks		14,718						15,893
Premises and equipment, net		17,476						19,043
Other assets		84,129						80,205
Total Assets	$	2,198,133					$	2,137,413
LIABILITIES & STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
NOW	$	260,234	$	183	0.09	%	$	246,548	$	210	0.11	%
Regular savings		1,002,613		1,163	0.16	%		915,411		1,168	0.17	%
Time deposits		144,088		557	0.52	%		213,958		894	0.56	%
Other borrowed funds		27,434		165	0.80	%		41,137		253	0.82	%
Subordinated debt		31,010		1,285	5.54	%		30,909		1,208	5.23	%
Securities sold U/A to repurchase		6,341		7	0.15	%		4,493		5	0.15	%
Total interest-bearing liabilities		1,471,720	$	3,360	0.31	%		1,452,456	$	3,738	0.34	%
Noninterest-bearing liabilities:
Demand deposits		534,994						487,247
Other		20,182						24,427
Total liabilities	$	2,026,896					$	1,964,130
Stockholders' equity		171,237						173,283
Total Liabilities and Equity	$	2,198,133					$	2,137,413
Net interest income			$	53,741					$	53,110
Net interest margin					3.45	%					3.51	%
Interest rate spread					3.36	%					3.42	%

(1) Included in interest earned on loans were PPP loan fees of $0.8 million and $6.3 million for the nine months ended September 30, 2022 and 2021, respectively. Other loan fees included in interest earned were not material during the nine months ended September 30, 2022 and 2021.

Net Income

Net income was $5.9 million, or $1.06 per diluted share, in the third quarter of 2022, compared with $5.7 million, or $1.03 per diluted share, in the second quarter of 2022 and $7.0 million, or $1.27 per diluted share, in last year’s third quarter. The increase from the sequential second quarter was largely due to higher net interest income. The change from prior year reflected a $1.3 million provision for loan losses in the third quarter of 2022 compared with a sizable credit to provision for loan losses in the third quarter of 2021, partially offset by higher net interest income.

Return on average equity was 14.15% for the third quarter of 2022, compared with 13.77% in the second quarter of 2022 and 15.58% in the third quarter of 2021.

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Results of Operations – Quarterly Comparison

Net interest income increased $1.1 million, or 6%, from the sequential second quarter and $1.0 million, or 6% when compared with prior-year third quarter. The increase from the trailing quarter primarily reflected higher rates on a relatively similar base of interest earning assets. Rate changes reflected the 300 basis point increase in the federal funds rate since the beginning of 2022. Partially offsetting the improvement in interest income was a $0.3 million increase in interest expense related to competitive pricing on deposits. The increase from prior year reflected higher interest income on investment securities of $1.1 million. A $1.9 million increase in interest income on loans resulting from the fed funds rate increases and higher average loan balances was offset by lower Paycheck Protection Program loan fees.

Third quarter net interest margin of 3.72% improved 27 basis points over the trailing second quarter and 24 basis points from the prior-year period. The yield on loans also improved both sequentially and year-over year, up 23 basis points and 11 basis points, respectively. The cost of interest-bearing liabilities was 0.36% compared with 0.28% in the second quarter of 2022 and 0.31% in the third quarter of 2021.

The $1.3 million provision for loan losses in the current quarter was primarily due to the $1.5 million charge-off of a single government agency guaranteed commercial loan. During the quarter, the Company was notified that its claim for reimbursement of the guarantee was denied. Management has evaluated the remaining government guaranteed portfolio and determined that this is an isolated event.

Non-interest income was $5.8 million in the third quarter of 2022, compared with $4.6 million in the second quarter of 2022, and $5.2 million in the prior year third quarter. The increase from the sequential second quarter reflects seasonally higher commercial lines insurance commissions and profit-sharing revenue. The increase from prior year’s third quarter was due to increased insurance commissions resulting from higher premiums and new commercial lines insurance business, a $0.2 million historic tax credit investment payment, as well as movements in the fair value of mortgage servicing rights,

Non-interest expenses of $15.8 million in the third quarter of 2022 increased $1.0 million or 7% when compared with the second quarter of 2022 and $0.4 million or 3% from last year’s third quarter. The increase from the second quarter of 2022 was primarily due to an increase in salaries and employee benefits expense, reflecting a $0.7 million increase in incentive accruals. The increase from the third quarter of 2021 is primarily due to annual merit increases. Salaries and employee benefits comprised 66% of total non-interest expense.

The Company’s efficiency ratio, or noninterest expenses divided by the sum of net interest income and noninterest income, was 63.3% in the third quarter of 2022, 65.2% in the second quarter of 2022, and 66.0% in the third quarter of 2021.

Income tax expense was $2.0 million, for an effective tax rate of 25.2%, in the third quarter of 2022 compared with 24.7% in the second quarter of 2022 and 25.6% in last year’s third quarter.

Results of Operations – Year-to-Date Comparison 

Net interest income was $53.7 million for the first nine months of 2022, a $0.6 million or 1% increase from the first nine months of 2021.  The increase in net interest income from prior year period is attributable to higher interest income of $0.3 million and lower interest expense of $0.4 million. Interest income on investment securities increased $3.0 million and income on interest-bearing deposits at banks increased $0.4 million. Offsetting those increases was a decrease in interest income on loans of $3.1 million resulting from a $5.5 million reduction in PPP fees. Partially offsetting the decrease in PPP fees were higher loan yields as a result of federal funds rate increases since the beginning of 2022. Average investment securities increased $170 million during the first nine months of 2022 when compared to the prior year period.

The Company’s net interest margin of 3.45% in the first nine months of 2022 was 6 basis points lower than the margin in the first nine months of 2021, largely reflecting changes in the composition of the Company’s earning assets.   The yield on average interest-earning assets decreased 9 basis points from 3.76% to 3.67%. Average loan yields increased 1 basis point to 4.26%, reflecting the Federal Reserve’s increase of the federal funds rate during 2022, largely offset by the reduction of PPP fees earned since the prior year.  The cost of interest-bearing liabilities was 0.31% in the first nine months of 2022, 3 basis points lower than during the first nine months of 2021.  

The Company recorded a $1.8 million provision for loan loss in the nine month period ended September 30, 2022, primarily resulting from the charge-off of a single commercial loan during the third quarter. The Company recorded a $1.9 million release of allowance for loan losses in the nine month period ended September 30, 2021, which reflected improved credit quality within the loan portfolio, decrease in specific reserves, and continued positive macroeconomic trends.

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Non-interest income for the first nine months of 2022 and 2021 was $14.8 million and $14.1 million, respectively. During the first nine months of 2022 deposit service charges and changes in the fair value of mortgage servicing rights each increased non-interest income by $0.3 million when compared to the prior year period. In addition, other non-interest income increased $0.2 million due to a historic tax credit investment payoff. Partially offsetting those increases was insurance service and fees revenue, the largest component of non-interest income, which decreased $0.1 million to $8.2 million as of September 30, 2022, primarily due to the discontinued operations of Frontier Claims Services, which ceased operations on December 31, 2021.

Total non-interest expense increased to $45.0 million in the first nine months of 2022, less than 1% more than the nine-month period ended September 30, 2021. The slight increase was mostly attributable to higher salaries and employee benefits costs related to annual merit increases partially offset by lower technology and communications costs of $0.3 million and professional services costs of $0.2 million during the first nine months of 2022. Salaries and employee benefits costs were $29.4 million for the first nine months of 2022 compared to $28.3 million in the prior year period.

The Company’s GAAP efficiency ratio, or noninterest expenses divided by the sum of net interest income and noninterest income, was 65.7% in the first nine months of 2022, compared with 66.8% during the prior-year period.

The Company recorded income tax expense of $5.4 million for the nine-month period ended September 30, 2022, compared with $6.1 million in the first nine months of 2021.   The effective tax rate for the first nine months of 2022 was 24.7%, compared with 25.1% in the comparable 2021 period.

CAPITAL

The Company consistently maintains regulatory capital ratios significantly above the federal “well capitalized” standard, including a Tier 1 leverage ratio of 9.00% at September 30, 2022, compared with 8.73% at June 30, 2022 and 8.34% at September 30, 2021.

In October 2022, the Company paid a semi-annual cash dividend of $0.64 per common share. Cash dividends totaled $1.26 per common share during 2022, up 5% over 2021.

Book value per share was $27.20 at September 30, 2022 compared with $29.53 at June 30, 2022 and $32.73 at September 30, 2021. Reflected in the book value changes are the Federal Reserve’s aggressive interest rate hikes, that have resulted in significant changes in unrealized gains and losses on investment securities, which reduced book value per share at September 30, 2022 by $2.83 when compared with the sequential second quarter and by $8.38 from last year’s third quarter. Such unrealized gains and losses are generally due to changes in interest rates and represent the difference, net of applicable income tax effect, between the estimated fair value and amortized cost of investment securities classified as available-for-sale. The Company had no other-than-temporary impairment charges in its investment portfolio in 2022 or 2021.

The Company has also issued subordinated capital notes and junior subordinated debentures associated with trust preferred securities to provide liquidity and enhance regulatory capital ratios. The Company had $11.3 million of junior subordinated debentures associated with trust preferred securities outstanding at September 30, 2022 and December 31, 2021 which are considered Tier 1 capital and are includable in total regulatory capital. The Company had $20 million of 6.00% Fixed-to-Floating Rate Subordinated Notes due 2030 outstanding at September 30, 2022 and December 31, 2021. The Company moved $15 million of the proceeds from the sale of these notes to the Company’s Evans Bank, N.A. subsidiary as Tier 1 capital.

While we are currently classified as well capitalized, an extended economic recession could adversely impact our reported and regulatory capital ratios by credit losses. The Company relies on cash on hand as well as dividends from its subsidiary bank to service its debt. If the Company’s subsidiary bank’s capital deteriorates such that it is unable to pay dividends to the Company for an extended period of time, the Company may not be able to service its debt that was issued.

LIQUIDITY

The Bank utilizes cash flows from the investment portfolio and federal funds sold balances to manage the liquidity requirements related to loan demand and deposit fluctuations. The Bank also has many borrowing options. The Company uses the FHLBNY as its primary source of overnight funds and has long-term advance with FHLBNY. The Company’s use of its overnight line of credit with FHLBNY varies depending on its ability to fund investment and loan growth with core deposits along with the line usage’s impact on interest rate risk. The Company had $22.5 million of outstanding borrowings on the FHLBNY overnight line of credit at September 30, 2022. The Company has pledged sufficient collateral in the form of residential and commercial real estate loans at FHLBNY that meets FHLB collateral requirements. As a member of the FHLB, the Bank is able to borrow funds at competitive rates. As of September 30, 2022, advances of up to $350 million could be drawn on the FHLB via an Overnight Line of Credit Agreement between the Bank and the FHLB. As of September 30, 2022, the Bank also had the ability to purchase up to $18 million in federal funds from its correspondent banks. By placing sufficient collateral in safekeeping at the Federal Reserve Bank, the Bank could borrow at the discount window. The

40

Bank’s liquidity needs also can be met by more aggressively pursuing time deposits, or accessing the brokered time deposit market, including the Certificate of Deposit Account Registry Service (“CDARS”) network.

Cash flows from the Bank’s investment portfolio are laddered, so that securities mature at regular intervals, to provide funds from principal and interest payments at various times as liquidity needs may arise. Contractual maturities are also laddered, with consideration as to the volatility of market prices. At September 30, 2022, approximately 4% of the Bank’s securities had contractual maturity dates of one year or less and approximately 23% had maturity dates of five years or less. Additionally, mortgage-backed securities, which comprise 55% of the investment portfolio at September 30, 2022, provide consistent cash flows for the Bank.

The Company’s primary source of liquidity is dividends from the Bank. Additionally, the Company has access to capital markets as a funding source.

Management, on an ongoing basis, closely monitors the Company’s liquidity position for compliance with internal policies and believes that available sources of liquidity are adequate to meet funding needs in the normal course of business. As part of that monitoring process, management calculates the 90-day liquidity each month by analyzing the cash needs of the Bank. Included in the calculation are liquid assets and potential liabilities. Management stresses the potential liabilities calculation to ensure a strong liquidity position. Included in the calculation are assumptions of some significant deposit run-off as well as funds needed for loan closings and investment purchases. In the Company’s internal stress test at September 30, 2022, the Company had net short-term liquidity of $443 million as compared with $724 million at December 31, 2021. Available assets of $381 million, divided by public and purchased funds of $371 million, resulted in a long-term liquidity ratio of 103% at September 30, 2022, compared with 153% at December 31, 2021.

Management does not anticipate engaging in any activities, either currently or in the long term, for which adequate funding would not be available and which would therefore result in significant pressure on liquidity.

The Company believes that the Bank maintains a sufficient level of U.S. government and government agency securities and New York State municipal bonds that can be pledged as collateral for municipal deposits.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Additional information responsive to this Item is contained in the Liquidity section of Management’s Discussion and Analysis of Financial Condition and Results of Operations, which information is incorporated herein by reference.

Market risk is the risk of loss from adverse changes in market prices and/or interest rates of the Bank’s financial instruments. The primary market risk that the Company is exposed to is interest rate risk. The core banking activities of lending and deposit-taking expose the Bank to interest rate risk, which occurs when assets and liabilities reprice at different times and by different amounts as interest rates change. As a result, net interest income earned by the Bank is subject to the effects of changing interest rates. The Bank measures interest rate risk by calculating the variability of net interest income in future periods under various interest rate scenarios using projected balances for interest-earning assets and interest-bearing liabilities. Management’s philosophy toward interest rate risk management is to limit the variability of net interest income to changes in net interest rates. The balances of financial instruments used in the projections are based on expected growth from forecasted business opportunities, anticipated prepayments of loans, and expected maturities of investment securities, loans, and deposits. Management supplements the modeling technique described above with analysis of market values of the Bank’s financial instruments and changes to such market values given changes in the interest rates.

The Bank’s Asset-Liability Committee, which includes members of senior management, monitors the Bank’s interest rate sensitivity with the aid of a model that considers the impact of ongoing lending and deposit taking activities, as well as interrelationships in the magnitude and timing of the repricing of financial instruments, including the effect of changing interest rates on expected prepayments and maturities. When deemed prudent, management has taken actions, and intends to do so in the future, to mitigate exposure to interest rate risk through the use of on- or off-balance sheet financial instruments. Possible actions include, but are not limited to, changing the pricing of loan and deposit products, and modifying the composition of interest-earning assets and interest-bearing liabilities, and reliance on other financial instruments used for interest rate risk management purposes.

‎

41

The following table demonstrates the possible impact of changes in interest rates on the Bank’s net interest income over a 12-month period of time:

SENSITIVITY OF NET INTEREST INCOME TO CHANGES IN INTEREST RATES

	Calculated increase (decrease)
	in projected annual net interest income
	(in thousands)
		September 30, 2022		December 31, 2021
Changes in interest rates
+200 basis points	$	(298)	$	1,375
+100 basis points		3,004		3,569
-100 basis points		(4,548)		(2,183)
-200 basis points		NM		NM

Many assumptions were utilized by management to calculate the impact that changes in interest rates may have on the Bank’s net interest income. The more significant assumptions related to the rate of prepayments of mortgage-related assets, loan and deposit volumes and pricing, and deposit maturities. The Bank assumed immediate changes in rates including 200 basis point rate changes. In the 200 basis point rate reduction scenario, the applicable rate changes may be limited to lesser amounts such that interest rates are not less than zero. The assumptions in the Company’s projections are inherently uncertain and, as a result, the Bank cannot precisely predict the impact of changes in interest rates on net interest income. Actual results may differ significantly due to the timing, magnitude, and frequency of interest rate changes in market conditions and interest rate differentials (spreads) between maturity/repricing categories, as well as any actions such as those previously described, which management may take to counter such changes. In light of the uncertainties and assumptions associated with the process, the amounts presented in the table and changes in such amounts are not considered significant to the Bank’s projected net interest income.

ITEM 4 - CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

The Company’s management, with the participation of the Company’s principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2022 (the end of the period covered by this Report). Based on that evaluation, the Company’s principal executive and principal financial officers concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2022.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

No changes in the Company’s internal control over financial reporting were identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under the Exchange Act that occurred during the fiscal quarter ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

‎

42

PART II - OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

The nature of the Company’s business generates a certain amount of litigation involving matters arising in the ordinary course of business.

In the opinion of management, there are no proceedings pending to which the Company is a party or to which its property is subject, which, if determined adversely, would have a material effect on the Company’s results of operations or financial condition.

ITEM 1A – RISK FACTORS

There have been no material changes to the risk factors previously disclosed in Item 1A. Part I of the Company’s Annual Report on Form 10- K for the fiscal year ended December 31, 2021.

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

Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that may yet be Purchased Under the Plans or Programs
July 1, 2022 - July 31, 2022
Repurchase program(1)		-	$	-	-	270,731
Employee transactions(2)		-	$	-	N/A	N/A
August 1, 2022 - August 31, 2022
Repurchase program(1)		-	$	-	-	270,731
Employee transactions(2)		-	$	-	N/A	N/A
September 1, 2022 - September 30, 2022
Repurchase program(1)		-	$	-	-	270,731
Employee transactions(2)		-	$	-	N/A	N/A
Total:
Repurchase program(1)		-	$	-	-	270,731
Employee transactions(2)		-	$	-	N/A	N/A

(1)On February 25, 2021, the Board of Directors authorized the Company to repurchase up to 300,000 shares of the Company’s common stock (the “2021 Repurchase Program”). The 2021 Repurchase program does not expire and may be suspended or discontinued by the Board of Directors at any time. The remaining number of shares that may be purchased under the 2021 Repurchase Program as of September 30, 2022 was 270,731.

(2)The total shares purchased in the period consist of shares constructively tendered to the Company by attestation in satisfaction of the exercise price due upon exercise of options issued pursuant to the Company’s 2019 Long-Term Incentive Plan. The “average price paid per share” reported in the table above, with respect to such shares, reflects the fair market value of the Company’s common stock on the exercise date, which was the closing sales price of the Company’s common stock as reported on the NYSE American on that date.

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

(Not Applicable.)

ITEM 4 – MINE SAFETY DISCLOSURE

(Not Applicable.)

ITEM 5 – OTHER INFORMATION

(Not Applicable.)
‎

43

ITEM 6 – EXHIBITS

The following exhibits are filed as a part of this report:

	EXHIBIT INDEX
Exhibit No.	Name
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer pursuant to 18 USC Section 1350 Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer pursuant to 18 USC Section 1350 Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials from Evans Bancorp, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, formatted in XBRL (eXtensible Business Reporting Language): (i) Unaudited Consolidated Balance Sheets – September 30, 2022 and December 31, 2021; (ii) Unaudited Consolidated Statements of Income – Three months ended September 30, 2022 and 2021; (iii) Unaudited Consolidated Statements of Income – Nine months ended September 30, 2022 and 2021; (iv) Unaudited Statements of Consolidated Comprehensive Income (Loss) – Three months ended September 30, 2022 and 2021; (v) Unaudited Statements of Consolidated Comprehensive Income (Loss) – Nine months ended September 30, 2022 and 2021; (vi) Unaudited Consolidated Statements of Stockholders' Equity – Three months ended September 30, 2022 and 2021; (vii) Unaudited Consolidated Statements of Stockholders' Equity – Nine months ended September 30, 2022 and 2021; (viii) Unaudited Consolidated Statements of Cash Flows – Nine months ended September 30, 2022 and 2021; and (ix) Notes to Unaudited Consolidated Financial Statements.
104	The cover page from the Evans Bancorp, Inc’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, formatted in Inline XBRL.

‎

44

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.

Evans Bancorp, Inc.

DATE

October 28, 2022

/s/ David J Nasca

David J. Nasca

President and CEO

(Principal Executive Officer)

DATE

October 28, 2022

/s/ John B. Connerton

John B. Connerton

Treasurer

(Principal Financial Officer and Principal Accounting Officer)

45

EX-31.1

Exhibit 31.1

Certification

I, David J. Nasca, certify that:

1. I have reviewed this report on Form 10-Q of Evans 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(s) 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 bedesigned 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(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

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

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

Date: October28, 2022

/s/ David J. Nasca

David J. Nasca

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification

I, John B. Connerton, certify that:

1. I have reviewed this report on Form 10-Q of Evans 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(s) 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(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

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

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

Date:October28, 2022

/s/ John B. Connerton

John B. Connerton

Treasurer

(Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICERS

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, David J. Nasca, the President and Chief Executive Officer of Evans Bancorp, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: (1) the Quarterly Report of Evans Bancorp, Inc. on Form 10-Q for the fiscal quarter ended September  30, 2022fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and (2) the information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Evans Bancorp, Inc.

Date:October28, 2022

By:	/s/ David J. Nasca
Name:	David J. Nasca
Title:	President and Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICERS

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, John B. Connerton, the Treasurer of Evans Bancorp, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: (1) the Quarterly Report of Evans Bancorp, Inc. on Form 10-Q for the fiscal quarter endedSeptember  30, 2022 fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and (2) the information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Evans Bancorp, Inc.

Date: October28, 2022

By:	/s/ John B. Connerton
Name:	John B. Connerton
Title:	Treasurer
	(Principal Financial Officer and Principal Accounting Officer)

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2022	Oct. 28, 2022
Document And Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Fiscal Period Focus	Q3
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-35021
Entity Registrant Name	EVANS BANCORP, INC.
Entity Incorporation, State or Country Code	NY
Entity Tax Identification Number	16-1332767
Entity Address, Address Line One	6460 Main St.
Entity Address, City or Town	Williamsville
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	14221
City Area Code	716
Local Phone Number	926-2000
Title of 12(b) Security	Common Stock, $0.50 par value
Trading Symbol	EVBN
Security Exchange Name	NYSEAMER
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		5,513,950
Amendment Flag	false
Entity Central Index Key	0000842518
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
ASSETS
Cash and due from banks	$ 14,394	$ 9,856
Interest-bearing deposits at banks	6,813	234,929
Securities:
Available for sale, at fair value (amortized cost: $433,206 at September 30, 2022; $310,228 at December 31, 2021)	369,141	305,959
Held to maturity, at amortized cost (fair value: $7,413 at September 30, 2022; $3,179 at December 31, 2021)	7,572	3,165
Federal Home Loan Bank common stock, at cost	3,664	3,045
Federal Reserve Bank common stock, at cost	3,066	3,039
Loans, net of allowance for loan losses of $18,630 at September 30, 2022 and $18,438 at December 31, 2021	1,607,827	1,553,467
Properties and equipment, net of accumulated depreciation of $11,224 at September 30, 2022 and $10,283 at December 31, 2021	17,103	17,789
Goodwill	12,702	12,702
Intangible assets	1,327	1,627
Bank-owned life insurance	41,605	34,295
Operating lease right-of-use asset	4,127	4,826
Other assets	40,364	25,941
TOTAL ASSETS	2,129,705	2,210,640
Deposits:
Demand	558,805	492,864
NOW	263,648	259,908
Savings	913,383	1,019,925
Time	137,910	164,340
Total deposits	1,873,746	1,937,037
Securities sold under agreement to repurchase	9,812	4,112
Other borrowings	42,594	32,879
Operating lease liability	4,471	5,210
Other liabilities	18,181	16,536
Subordinated debt	31,050	30,974
Total liabilities	1,979,854	2,026,748
STOCKHOLDERS' EQUITY:
Common stock, $0.50 par value, 10,000,000 shares authorized; 5,534,477 and 5,482,756 shares issued at September 30, 2022 and December 31, 2021, respectively, and 5,509,917 and 5,482,756 shares outstanding at September 30, 2022 and December 31, 2021, respectively.	2,770	2,744
Capital surplus	80,435	78,795
Treasury stock, at cost, 24,560 and 0 shares at September 30, 2022 and December 31, 2021, respectively	(849)
Retained earnings	117,319	108,024
Accumulated other comprehensive income (loss), net of tax	(49,824)	(5,671)
Total stockholders' equity	149,851	183,892
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 2,129,705	$ 2,210,640

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Securities:
Available for sale, amortized cost	$ 433,206	$ 310,228
Held to maturity, fair value	7,413	3,179
Loans, allowance for loan losses	18,630	18,438
Properties and equipment, accumulated depreciation	$ 11,224	$ 10,283
STOCKHOLDERS' EQUITY:
Common stock, par value	$ 0.50	$ 0.50
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	5,534,477	5,482,756
Common stock, shares outstanding	5,509,917	5,482,756
Treasury stock, shares	24,560	0

XML

Consolidated Statements Of Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
INTEREST INCOME
Loans	$ 17,988	$ 18,096	$ 50,540	$ 53,675
Interest-bearing deposits at banks	217	64	513	99
Securities:
Taxable	2,190	1,087	5,851	2,907
Non-taxable	92	55	197	167
Total interest income	20,487	19,302	57,101	56,848
INTEREST EXPENSE
Deposits	755	650	1,903	2,272
Other borrowings	83	84	172	258
Subordinated debt	461	405	1,285	1,208
Total interest expense	1,299	1,139	3,360	3,738
NET INTEREST INCOME	19,188	18,163	53,741	53,110
PROVISION (CREDIT) FOR LOAN LOSSES	1,328	(1,459)	1,816	(1,906)
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR LOAN LOSSES	17,860	19,622	51,925	55,016
NON-INTEREST INCOME
Deposit service charges	782	664	2,177	1,843
Insurance service and fees	3,383	3,191	8,249	8,350
Bank-owned life insurance	161	158	486	493
Interchange fee income	532	548	1,563	1,585
Other	909	596	2,335	1,870
Total non-interest income	5,767	5,157	14,810	14,141
NON-INTEREST EXPENSE
Salaries and employee benefits	10,450	9,930	29,356	28,339
Occupancy	1,118	1,126	3,429	3,490
Advertising and public relations	417	434	1,034	1,102
Professional services	839	840	2,554	2,788
Technology and communications	1,339	1,327	3,750	4,023
Amortization of intangibles	100	135	300	405
FDIC insurance	255	285	775	864
Other	1,273	1,316	3,837	3,923
Total non-interest expense	15,791	15,393	45,035	44,934
INCOME BEFORE INCOME TAXES	7,836	9,386	21,700	24,223
INCOME TAX PROVISION	1,972	2,407	5,354	6,079
NET INCOME	$ 5,864	$ 6,979	$ 16,346	$ 18,144
Net income per common share-basic	$ 1.06	$ 1.28	$ 2.97	$ 3.34
Net income per common share-diluted	$ 1.06	$ 1.27	$ 2.95	$ 3.30
Weighted average number of common shares outstanding	5,510,118	5,459,076	5,505,936	5,438,708
Weighted average number of diluted shares outstanding	5,546,764	5,516,781	5,548,508	5,490,836

XML

Consolidated Statements Of Comprehensive (Loss) Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Consolidated Statements Of Comprehensive (Loss) Income [Abstract]
NET INCOME	$ 5,864	$ 6,979	$ 16,346	$ 18,144
Unrealized (loss) gain on available-for-sale securities
Unrealized (loss) gain on available-for-sale securities:	(15,581)	(1,530)	(44,319)	(3,697)
Defined benefit pension plans:
Amortization of prior service cost	6	5	16	16
Amortization of actuarial loss	50	70	150	210
Total	56	75	166	226
OTHER COMPREHENSIVE (LOSS) INCOME , NET OF TAX:	(15,525)	(1,455)	(44,153)	(3,471)
COMPREHENSIVE (LOSS) INCOME	$ (9,661)	$ 5,524	$ (27,807)	$ 14,673

XML

Consolidated Statements Of Changes In Stockholders’ Equity - USD ($) $ in Thousands	Common Stock [Member]	Capital Surplus [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]	Treasury Stock [Member]	Total
Balance at Dec. 31, 2020	$ 2,708	$ 76,394	$ 90,522	$ (719)		$ 168,905
Net income			18,144			18,144
Other comprehensive income (loss)				(3,471)		(3,471)
Cash dividends			(6,532)			(6,532)
Stock compensation expense		634				634
Issued restricted shares, net of forfeitures	4	(4)
Issued shares under Dividend Reinvestment Plan	3	152				155
Issued shares in Employee Stock Purchase Plan	3	200				203
Issued shares in stock option exercises	9	187				196
Issued shares for earnout	7	593				600
Balance at Sep. 30, 2021	2,734	78,156	102,134	(4,190)		178,834
Balance at Jun. 30, 2021	2,724	77,270	98,430	(2,735)		175,689
Net income			6,979			6,979
Other comprehensive income (loss)				(1,455)		(1,455)
Cash dividends			(3,275)			(3,275)
Stock compensation expense		200				200
Issued shares under Dividend Reinvestment Plan	3	93				96
Issued shares for earnout	7	593				600
Balance at Sep. 30, 2021	2,734	78,156	102,134	(4,190)		178,834
Balance at Dec. 31, 2021	2,744	78,795	108,024	(5,671)		183,892
Net income			16,346			16,346
Other comprehensive income (loss)				(44,153)		(44,153)
Cash dividends			(6,936)			(6,936)
Stock compensation expense		952				952
Issued restricted shares	9	(9)
Reissued shares under Dividend Reinvestment Plan	2	141				143
Issued shares in Employee Stock Purchase Plan	4	195				199
Issued shares in stock option exercises	11	361				372
Repurchased shares in treasury stock					$ (1,098)	(1,098)
Reissued restricted shares, net of forfeitures			(115)		249	134
Balance at Sep. 30, 2022	2,770	80,435	117,319	(49,824)	(849)	149,851
Balance at Jun. 30, 2022	2,769	80,072	114,982	(34,299)	(849)	162,675
Net income			5,864			5,864
Other comprehensive income (loss)				(15,525)		(15,525)
Cash dividends			(3,527)			(3,527)
Stock compensation expense		328				328
Issued shares in stock option exercises	1	35				36
Balance at Sep. 30, 2022	$ 2,770	$ 80,435	$ 117,319	$ (49,824)	$ (849)	$ 149,851

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Consolidated Statements Of Changes In Stockholders’ Equity (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Consolidated Statements Of Changes In Stockholders’ Equity [Abstract]
Cash dividends per common share	$ 0.64	$ 0.60	$ 1.26	$ 1.20
Reissued restricted shares			6,660
Issued restricted shares	600
Issued restricted shares, net of forfeitures			18,844	7,971
Forfeitures shares of restricted stock	765		1,951
Issued shares under Dividend Reinvestment Plan		6,633		4,611
Issued shares in Employee Stock Purchase Plan		13,017		6,443
Issued shares in stock option exercises	1,419		22,270	19,715
Repurchased shares in treasury stock			29,269
Issued shares for earnout				13,017
Reissued shares under Dividend Reinvestment Plan			3,705
Reissued shares in stock option exercises			6,902

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Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
OPERATING ACTIVITIES:
Interest received	$ 55,607	$ 53,464
Fees received	14,424	13,271
Interest paid	(3,607)	(4,674)
Cash paid to employees and vendors	(46,166)	(43,964)
Income taxes paid	(3,327)	(5,086)
Proceeds from sale of loans held for sale	4,719
Originations of loans held for sale	(4,529)	(262)
Net cash provided by operating activities	17,121	12,749
Available For Sales Securities:
Purchases	(144,413)	(124,683)
Proceeds from sales, maturities, calls, and payments	20,806	27,680
Held to maturity securities:
Purchases	(6,581)	(3,562)
Proceeds from maturities, calls, and payments	2,174	3,034
Cash paid for bank-owned life insurance	(6,830)
Proceeds from bank-owned life insurance claims	378
Additions to properties and equipment	(654)	(901)
Proceeds from tax credit investment	191
Sale of other real estate	17	129
Net (increase) decrease in loans	(54,670)	85,896
Cash paid for earnout		(900)
Net cash used in investing activities	(189,582)	(13,307)
FINANCING ACTIVITIES:
Repayments from long-term borrowings, net	(12,402)	(6,891)
Proceeds (repayments) from short-term borrowings, net	28,200	(769)
Net (decrease) increase in deposits	(63,256)	105,040
Dividends paid	(3,409)	(3,257)
Repurchase of treasury stock	(1,098)
Issuance of common stock	714	554
Reissuance of treasury stock	134
Net cash (used in) provided by financing activities	(51,117)	94,677
Net (decrease) increase in cash and cash equivalents	(223,578)	94,119
CASH AND CASH EQUIVALENTS:
Beginning of period	244,785	97,604
End of period	21,207	191,723
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Net income	16,346	18,144
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,270	1,481
Deferred tax expense	348	970
Provision (credit) for loan losses	1,816	(1,906)
Loss on sales of assets	5	22
Gain on loans sold	(92)
Stock compensation expense	952	634
Proceeds from sale of loans held for sale	4,719
Originations of loans held for sale	(4,529)	(262)
Changes in assets and liabilities affecting cash flow:
Other assets	(3,003)	(6,724)
Other liabilities	(711)	390
NET CASH PROVIDED BY OPERATING ACTIVITIES	$ 17,121	$ 12,749

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Organization And Summary Of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Organization And Summary Of Significant Accounting Policies [Abstract]

Organization And Summary Of Significant Accounting Policies

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting and reporting policies followed by Evans Bancorp, Inc. (the “Company”), a financial holding company, and its two direct, wholly-owned subsidiaries: (i) Evans Bank, National Association (the “Bank”), and the Bank’s subsidiaries, Evans National Leasing, Inc. (“ENL”), and Evans National Holding Corp. (“ENHC”); and (ii) Evans National Financial Services, LLC (“ENFS”), and ENFS’s subsidiary, The Evans Agency, LLC (“TEA”), and TEA’s subsidiaries, Frontier Claims Services, Inc. (“FCS”) and ENB Associates Inc. (“ENBA”), in the preparation of the accompanying interim unaudited consolidated financial statements conform with U.S. generally accepted accounting principles (“GAAP”) and with general practice within the industries in which it operates. Except as the context otherwise requires, the Company and its direct and indirect subsidiaries are collectively referred to in this report as the “Company.”

The Financial Accounting Standards Board (“FASB”) establishes changes to GAAP in the form of accounting standards updates (“ASUs”) to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs when they are issued by FASB. ASUs adopted by the Company during the current fiscal year are not expected to have a material impact on the Company’s consolidated financial position, results of operations, cash flows or disclosures.

The results of operations for the nine month period ended September 30, 2022 are not necessarily indicative of the results to be expected for the full year.

The accompanying unaudited consolidated financial statements should be read in conjunction with the Audited Consolidated Financial Statements and the Notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “10-K”). There have been no significant changes to the Company’s significant accounting policies as disclosed in Note 1 to the 10-K.

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Securities

9 Months Ended

Sep. 30, 2022

Securities [Abstract]

Securities

2. SECURITIES

The amortized cost of securities and their approximate fair value at September 30, 2022 and December 31, 2021 were as follows:

	September 30, 2022
	(in thousands)
	Amortized		Unrealized				Fair
	Cost		Gains		Losses		Value
Available for Sale:
Debt securities:
U.S. treasuries and government agencies	$	166,351	$	2	$	(25,289)	$	141,064
States and political subdivisions		23,573		2		(1,721)		21,854
Total debt securities		189,924		4		(27,010)		162,918
Mortgage-backed securities:
FNMA		76,916		-		(13,272)		63,644
FHLMC		47,544		-		(7,160)		40,384
GNMA		40,741		-		(6,019)		34,722
SBA		23,044		-		(2,397)		20,647
CMO		55,037		-		(8,211)		46,826
Total mortgage-backed securities		243,282		-		(37,059)		206,223
Total securities designated as available for sale	$	433,206	$	4	$	(64,069)	$	369,141
Held to Maturity:
Debt securities
States and political subdivisions	$	7,572	$	-	$	(159)	$	7,413
Total securities designated as held to maturity	$	7,572	$	-	$	(159)	$	7,413

	December 31, 2021
	(in thousands)
	Amortized		Unrealized				Fair
	Cost		Gains		Losses		Value
Available for Sale:
Debt securities:
U.S. treasuries and government agencies	$	99,005	$	199	$	(2,386)	$	96,818
States and political subdivisions		6,150		96		-		6,246
Total debt securities		105,155		295		(2,386)		103,064
Mortgage-backed securities:
FNMA		64,056		222		(1,068)		63,210
FHLMC		38,796		62		(424)		38,434
GNMA		31,814		15		(615)		31,214
SBA		17,919		343		(54)		18,208
CMO		52,488		175		(834)		51,829
Total mortgage-backed securities		205,073		817		(2,995)		202,895
Total securities designated as available for sale	$	310,228	$	1,112	$	(5,381)	$	305,959
Held to Maturity:
Debt securities
States and political subdivisions	$	3,165	$	17	$	(3)	$	3,179
Total securities designated as held to maturity	$	3,165	$	17	$	(3)	$	3,179

Available for sale securities with a total fair value of $244 million and $207 million were pledged as collateral to secure public deposits and for other purposes required or permitted by law at September 30, 2022 and December 31, 2021, respectively.

‎

The scheduled maturities of debt and mortgage-backed securities at September 30, 2022 are summarized below. All maturity amounts are contractual maturities. Actual maturities may differ from contractual maturities because certain issuers have the right to call or prepay obligations with or without call premiums.

	September 30, 2022
	Amortized		Estimated
	cost		fair value
	(in thousands)
Debt securities available for sale:
Due in one year or less	$	6,839	$	6,769
Due after one year through five years		79,801		73,585
Due after five years through ten years		74,294		62,431
Due after ten years		28,990		20,133
		189,924		162,918
Mortgage-backed securities
available for sale		243,282		206,223
Total	$	433,206	$	369,141
Debt securities held to maturity:
Due in one year or less	$	6,665	$	6,615
Due after one year through five years		495		456
Due after five years through ten years		412		342
Due after ten years		-		-
Total	$	7,572	$	7,413

Contractual maturities of the Company’s mortgage-backed securities generally exceed ten years; however, the effective lives may be significantly shorter due to prepayments of the underlying loans and due to the nature of these securities.

There were no gross realized gains or losses from sales of investment securities for the three and nine month periods ended September 30, 2022 and 2021.

Management has assessed the securities available for sale in an unrealized loss position at September 30, 2022 and December 31, 2021 and determined the decline in fair value below amortized cost to be temporary. In making this determination, management considered the period of time the securities were in a loss position, the percentage decline in comparison to the securities’ amortized cost, and the financial condition of the issuer (primarily government or government-sponsored enterprises). In addition, management does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities before recovery of their amortized cost. Management believes the decline in fair value is primarily related to market interest rate fluctuations and not to the credit deterioration of the individual issuers.

The Company has not recorded any other-than-temporary impairment (“OTTI”) charges during the nine month period ended September 30, 2022 and did not record any OTTI charges during 2021. The credit worthiness of the Company’s securities portfolio is largely reliant on the ability of U.S. government sponsored agencies such as Federal Home Loan Bank (“FHLB”), Federal National Mortgage Association (“FNMA”), Government National Mortgage Association (“GNMA”), and Federal Home Loan Mortgage Corporation (“FHLMC”), and municipalities throughout New York State to meet their obligations. In addition, dysfunctional markets could materially alter the liquidity, interest rate, and pricing risk of the portfolio. The stable past performance is not a guarantee for similar performance of the Company’s securities portfolio in future periods.

‎

Information regarding unrealized losses within the Company’s available for sale securities at September 30, 2022 and December 31, 2021 is summarized below.

	September 30, 2022
		Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
		(in thousands)
Available for Sale:
Debt securities:
U.S. treasuries and government agencies	$	91,283	$	(9,992)	$	48,781	$	(15,297)	$	140,064	$	(25,289)
States and political subdivisions		20,748		(1,721)		-		-		20,748		(1,721)
Total debt securities		112,031		(11,713)		48,781		(15,297)		160,812		(27,010)
Mortgage-backed securities:
FNMA		31,695		(5,178)		31,889		(8,094)		63,584		(13,272)
FHLMC		24,908		(3,503)		15,458		(3,657)		40,366		(7,160)
GNMA		20,125		(2,675)		14,597		(3,344)		34,722		(6,019)
SBA		17,478		(1,966)		3,169		(431)		20,647		(2,397)
CMO		29,286		(3,855)		17,540		(4,356)		46,826		(8,211)
Total mortgage-backed securities		123,492		(17,177)		82,653		(19,882)		206,145		(37,059)
Held to Maturity:
Debt securities:
States and political subdivisions		7,335		(149)		78		(10)		7,413		(159)
Total temporarily impaired
securities	$	242,858	$	(29,039)	$	131,512	$	(35,189)	$	374,370	$	(64,228)
	December 31, 2021
		Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
		(in thousands)
Available for Sale:
Debt securities:
U.S. treasuries and government agencies	$	50,381	$	(884)	$	27,488	$	(1,502)	$	77,869	$	(2,386)
States and political subdivisions		-		-		-		-		-		-
Total debt securities		50,381		(884)		27,488		(1,502)		77,869		(2,386)
Mortgage-backed securities:
FNMA		48,008		(903)		2,941		(165)		50,949		(1,068)
FHLMC		35,851		(423)		76		(1)		35,927		(424)
GNMA		30,252		(615)		143		-		30,395		(615)
SBA		2,824		(25)		1,218		(29)		4,042		(54)
CMO		38,313		(833)		25		(1)		38,338		(834)
Total mortgage-backed securities		155,248		(2,799)		4,403		(196)		159,651		(2,995)
Held to Maturity:
Debt securities:
States and political subdivisions		1,782		(3)		-		-		1,782		(3)
Total temporarily impaired
securities	$	207,411	$	(3,686)	$	31,891	$	(1,698)	$	239,302	$	(5,384)

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Loans And The Allowance For Loan Losses

9 Months Ended

Sep. 30, 2022

Loans And The Allowance For Loan Losses [Abstract]

Loans And The Allowance For Loan Losses

3. LOANS AND THE ALLOWANCE FOR LOAN LOSSES

Loan Portfolio Composition

The following table presents selected information on the composition of the Company’s loan portfolio as of the dates indicated:

	September 30, 2022		December 31, 2021
Mortgage loans on real estate:	(in thousands)
Residential mortgages	$	433,102	$	411,060
Commercial and multi-family		765,136		739,761
Construction-Residential		3,136		5,109
Construction-Commercial		103,763		98,012
Home equities		83,334		81,238
Total real estate loans		1,388,471		1,335,180
Commercial and industrial loans		238,093		237,077
Consumer and other loans		427		719
Unaccreted yield adjustments*		(534)		(1,071)
Total gross loans		1,626,457		1,571,905
Allowance for loan losses		(18,630)		(18,438)
Loans, net	$	1,607,827	$	1,553,467

* Includes net premiums and discounts on acquired loans and net deferred fees and costs on loans originated.

At September 30, 2022, the outstanding principal balance and the carrying amount of acquired credit-impaired loans totaled $0.8 million and $0.7 million, respectively. At December 31, 2021, the outstanding principal balance and carrying amount of acquired credit-impaired loans totaled $0.8 million. There were no valuation allowances for specifically identified impairment attributable to acquired credit-impaired loans at September 30, 2022 or December 31, 2021. The Company is not recording interest on the acquired credit-impaired loans due to the uncertainty of the cash flows relating to such loans.

There were $508 million and $619 million in residential and commercial mortgage loans pledged to FHLBNY to serve as collateral for potential borrowings as of September 30, 2022 and December 31, 2021, respectively.

At September 30, 2022, the Company’s FHLMC loan serving portfolio had $61 million in principal balances of residential real estate loans that were sold to FHLMC and the servicing rights are retained by the Company. No loans were sold to FHLMC by the Company during the three month or nine month periods ending September 30, 2022 and 2021.

The Company may also sell certain fixed rate residential mortgages to FNMA while maintaining the servicing rights for those mortgages. At September 30, 2022, the Company’s FNMA loan servicing portfolio was $59 million in principal balances. In the three month and nine month periods ended September 30, 2022, the Company sold $1.3 million and $4.8 million, respectively, of residential mortgages to FNMA. The Company did not sell any mortgages to FNMA in the three and nine month periods ended September 30, 2021.

At September 30, 2022 and December 31, 2021, the Company had loan servicing portfolio principal balances of $120 million and $131 million, respectively, upon which it earned servicing fees. The fair value of the mortgage servicing rights for that portfolio was $1.2 million and $0.9 million at September 30, 2022 and December 31, 2021, respectively.

‎

At September 30, 2022 no residential mortgages were held for sale. At December 31, 2021 there were $0.1 million of residential mortgages held for sale.

Credit Quality Indicators

The Company monitors the credit risk in its loan portfolio by reviewing certain credit quality indicators (“CQI”). The primary CQI for the commercial mortgage and commercial and industrial portfolios is the individual loan’s credit risk rating. The following list provides a description of the credit risk ratings that are used internally by the Bank when assessing the adequacy of its allowance for loan losses:

Acceptable or better

Watch

Special Mention

Substandard

Doubtful

Loss

“Special mention” and “substandard” loans are weaker credits with a higher risk of loss and are categorized as “criticized” assets.

The Company’s consumer loans, including residential mortgages and home equities, are not individually risk rated or reviewed in the Company’s loan review process. Unlike commercial customers, consumer loan customers are not required to provide the Company with updated financial information. Consumer loans also carry smaller balances. Given the lack of updated information after the initial underwriting of the loan and small size of individual loans, the Company uses delinquency status as the primary credit quality indicator for consumer loans. However, once a consumer loan is identified as impaired, it is individually evaluated for impairment.

The following tables provide data, at the class level, of credit quality indicators of certain loans for the dates specified:

	September 30, 2022
	(in thousands)
Corporate Credit Exposure – By Credit Rating	Commercial Real Estate Construction		Commercial and Multi-Family Mortgages		Total Commercial Real Estate		Commercial and Industrial
Acceptable or better	$	64,746	$	547,332	$	612,078	$	175,101
Watch		19,505		165,144		184,649		46,557
Special Mention		6,943		21,453		28,396		9,555
Substandard		12,569		31,207		43,776		6,880
Doubtful/Loss		-		-		-		-
Total	$	103,763	$	765,136	$	868,899	$	238,093
	December 31, 2021
	(in thousands)
Corporate Credit Exposure – By Credit Rating	Commercial Real Estate Construction		Commercial and Multi-Family Mortgages		Total Commercial Real Estate		Commercial and Industrial
Acceptable or better	$	65,211	$	480,159	$	545,370	$	152,675
Watch		19,108		182,502		201,610		64,406
Special Mention		7,045		33,219		40,264		10,200
Substandard		6,648		43,881		50,529		9,796
Doubtful/Loss		-		-		-		-
Total	$	98,012	$	739,761	$	837,773	$	237,077

The Company continues to evaluate its portfolio of loans to clients within the hotel industry for residual impacts from the COVID-19 pandemic. The Company classified $81 million of loans to clients within the hotel industry as criticized in 2020. Subsequently, more than half of this portfolio has been upgraded or paid off. Currently, $38 million of the hotel portfolio remains in criticized status at the end of the 2022 third quarter. Total criticized assets were $89 and $111 million at September 30, 2022 and at the end of the 2021, respectively.

Past Due Loans

The following tables provide an analysis of the age of the recorded investment in loans that are past due as of the dates indicated:

	September 30, 2022
	(in thousands)
		Current							Non-accruing		Total
		Balance	30-59 days		60-89 days		90+ days		Loans		Balance
Commercial and industrial	$	229,785	$	5,375	$	30	$	64	$	2,839	$	238,093
Residential real estate:
Residential		428,009		-		1,371		-		3,722		433,102
Construction		3,136		-		-		-		-		3,136
Commercial real estate:
Commercial		754,993		750		203		-		9,190		765,136
Construction		87,302		5,958		875		774		8,854		103,763
Home equities		81,512		1,144		160		-		518		83,334
Consumer and other		414		8		4		1		-		427
Total Loans	$	1,585,151	$	13,235	$	2,643	$	839	$	25,123	$	1,626,991

Note: Loan balances do not include $(0.5) million of unaccreted yield adjustments as of September 30, 2022.

	December 31, 2021
	(in thousands)
		Current							Non-accruing		Total
		Balance	30-59 days		60-89 days		90+ days		Loans		Balance
Commercial and industrial	$	229,724	$	1,336	$	568	$	548	$	4,901	$	237,077
Residential real estate:
Residential		402,992		3,466		1,563		-		3,039		411,060
Construction		5,109		-		-		-		-		5,109
Commercial real estate:
Commercial		711,481		16,451		6,073		-		5,756		739,761
Construction		93,842		757		-		480		2,933		98,012
Home equities		79,644		627		209		-		758		81,238
Consumer and other		706		9		4		-		-		719
Total Loans	$	1,523,498	$	22,646	$	8,417	$	1,028	$	17,387	$	1,572,976

Note: Loan balances do not include $(1.1) million of unaccreted yield adjustments as of December 31, 2021.
‎

Allowance for loan losses

The following tables present the activity in the allowance for loan losses according to portfolio segment for the three month periods ended September 30, 2022 and 2021.

	Three months ended September 30, 2022
	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer and Other		Residential Mortgages*		Home Equities		Total
Allowance for loan	(in thousands)
losses:
Beginning balance	$	3,714	$	12,305	$	70	$	2,164	$	566	$	18,819
Charge-offs		(1,515)		-		(45)		-		-		(1,560)
Recoveries		40		-		3		-		-		43
Provision		1,805		(603)		13		47		66		1,328
Ending balance	$	4,044	$	11,702	$	41	$	2,211	$	632	$	18,630

*Includes construction loans

	Three months ended September 30, 2021
	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer and Other		Residential Mortgages*		Home Equities		Total
Allowance for loan	(in thousands)
losses:
Beginning balance	$	3,790	$	13,925	$	58	$	1,694	$	475	$	19,942
Charge-offs		(424)		-		(29)		-		-		(453)
Recoveries		15		-		4		-		2		21
Provision		(228)		(1,555)		(12)		259		77		(1,459)
Ending balance	$	3,153	$	12,370	$	21	$	1,953	$	554	$	18,051

* Includes construction loans

‎

The following tables present the activity in the allowance for loan losses according to portfolio segment for the nine month periods ended September 30, 2022 and 2021.

	Nine months ended September 30, 2022
	(in thousands)
	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer and Other		Residential Mortgages*		Home Equities		Total
Allowance for loan
losses:
Beginning balance	$	3,309	$	12,367	$	54	$	2,127	$	581	$	18,438
Charge-offs		(1,546)		-		(112)		(55)		-		(1,713)
Recoveries		76		-		13		-		-		89
Provision (Credit)		2,205		(665)		86		139		51		1,816
Ending balance	$	4,044	$	11,702	$	41	$	2,211	$	632	$	18,630

‎*Includes construction loans

	Nine months ended September 30, 2021
	(in thousands)
	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer and Other		Residential Mortgages*		Home Equities		Total
Allowance for loan
losses:
Beginning balance	$	4,882	$	13,249	$	45	$	1,658	$	581	$	20,415
Charge-offs		(424)		-		(120)		-		-		(544)
Recoveries		58		-		26		-		2		86
Provision (Credit)		(1,363)		(879)		70		295		(29)		(1,906)
Ending balance	$	3,153	$	12,370	$	21	$	1,953	$	554	$	18,051

*Includes construction loans

‎

The following table presents the allocation of the allowance for loan losses according to portfolio segment summarized on the basis of the Company’s impairment methodology as of September 30, 2022 and December 31, 2021:

	September 30, 2022
	(in thousands)
	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer and Other		Residential Mortgages*		Home Equities		Total
Allowance for loan
losses:
Ending balance:
Loans acquired with deteriorated credit quality	$	-	$	-	$	-	$	-	$	-	$	-
Individually evaluated for impairment		2		2		-		66		39		109
Collectively evaluated for impairment		4,042		11,700		41		2,145		593		18,521
Total	$	4,044	$	11,702	$	41	$	2,211	$	632	$	18,630
Loans:
Ending balance:
Loans acquired with deteriorated credit quality	$	-	$	-	$	-	$	703	$	-	$	703
Individually evaluated for impairment		2,929		20,839		-		3,367		903		28,038
Collectively evaluated for impairment		235,164		848,060		427		432,168		82,431		1,598,250
Total	$	238,093	$	868,899	$	427	$	436,238	$	83,334	$	1,626,991

Note: Loan balances do not include $(0.5) million of unaccreted yield adjustments as of September 30, 2022.

* Includes construction loans

	December 31, 2021
	(in thousands)
	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer and Other		Residential Mortgages*		Home Equities		Total
Allowance for loan
losses:
Ending balance:
Loans acquired with deteriorated credit quality	$	-	$	-	$	-	$	-	$	-	$	-
Individually evaluated for impairment		100		345		-		9		41		495
Collectively evaluated for impairment		3,209		12,022		54		2,118		540		17,943
Total	$	3,309	$	12,367	$	54	$	2,127	$	581	$	18,438
Loans:
Ending balance:
Loans acquired with deteriorated credit quality	$	-	$	-	$	-	$	803	$	-	$	803
Individually evaluated for impairment		5,028		11,925		-		2,598		1,236		20,787
Collectively evaluated for impairment		232,049		825,848		719		412,768		80,002		1,551,386
Total	$	237,077	$	837,773	$	719	$	416,169	$	81,238	$	1,572,976

Note: Loan balances do not include $(1.1) million of unaccreted yield adjustments as of December 31, 2021.

* Includes construction loans

Impaired Loans

The following tables provide data, at the class level, for impaired loans as of the dates indicated:

	At September 30, 2022						At December 31, 2021
(in thousands)		Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial and industrial	$	2,926	$	3,551	$	-	$	4,874	$	5,712	$	-
Residential real estate:
Residential		3,784		4,253		-		3,297		3,654		-
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		11,814		12,150		-		8,821		9,338		-
Construction		8,854		8,998		-		1,395		1,499		-
Home equities		864		1,024		-		1,127		1,324		-
Consumer and other		-		-		-		-		-		-
Total impaired loans	$	28,242	$	29,976	$	-	$	19,514	$	21,527	$	-

	At September 30, 2022							At December 31, 2021
(in thousands)		Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With a related allowance recorded:
Commercial and industrial	$	3	$	3	$	2	$	154	$	158	$	100
Residential real estate:
Residential		245		245		66		60		60		9
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		171		197		2		171		717		16
Construction		-		-		-		1,538		1,555		329
Home equities		39		66		39		109		109		41
Consumer and other		-		-		-		-		-		-
Total impaired loans	$	458	$	511	$	109	$	2,032	$	2,599	$	495

‎

		At September 30, 2022					At December 31, 2021
(in thousands)		Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Total:
Commercial and industrial	$	2,929	$	3,554	$	2	$	5,028	$	5,870	$	100
Residential real estate:
Residential		4,029		4,498		66		3,357		3,714		9
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		11,985		12,347		2		8,992		10,055		16
Construction		8,854		8,998		-		2,933		3,054		329
Home equities		903		1,090		39		1,236		1,433		41
Consumer and other		-		-		-		-		-		-
Total impaired loans	$	28,700	$	30,487	$	109	$	21,546	$	24,126	$	495

			Three months ended September 30, 2022				Three months ended September 30, 2021
	(in thousands)		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Total:
Commercial and industrial		$	3,681	$	2	$	5,755	$	-
Residential real estate:
Residential			3,972		-		3,894		5
Construction			-		-		-		-
Commercial real estate:
Commercial			12,533		6		15,044		165
Construction			5,113		-		3,331		-
Home equities			932		4		1,440		3
Consumer and other			-		-		-		-
Total impaired loans		$	26,231	$	12	$	29,464	$	173

			Nine months ended September 30, 2022				Nine months ended September 30, 2021
	(in thousands)		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Total:
Commercial and industrial		$	4,251	$	6	$	5,657	$	29
Residential real estate:
Residential			3,735		12		4,756		22
Construction			-		-		-		-
Commercial real estate:
Commercial			10,785		183		15,014		228
Construction			3,881		-		3,305		2
Home equities			999		14		1,669		7
Consumer and other			-		-		-		-
Total impaired loans		$	23,651	$	215	$	30,401	$	288

Troubled debt restructurings

The following tables summarize the loans that were classified as troubled debt restructurings (“TDRs”) as of the dates indicated:

		September 30, 2022
		(in thousands)
		Total		Nonaccruing		Accruing		Related Allowance
Commercial and industrial	$	1,254	$	1,164	$	90	$	-
Residential real estate:
Residential		889		541		348		-
Construction		-		-		-		-
Commercial real estate:
Commercial and multi-family		2,795		-		2,795		-
Construction		-		-		-		-
Home equities		390		5		385		-
Consumer and other		-		-		-		-
Total TDR loans	$	5,328	$	1,710	$	3,618	$	-

		December 31, 2021
		(in thousands)
		Total		Nonaccruing		Accruing		Related Allowance
Commercial and industrial	$	1,003	$	876	$	127	$	-
Residential real estate:
Residential		989		627		362		-
Construction		-		-		-		-
Commercial real estate:
Commercial and multi-family		3,236		-		3,236		-
Construction		-		-		-		-
Home equities		490		12		478		-
Consumer and other		-		-		-		-
Total TDR loans	$	5,718	$	1,515	$	4,203	$	-

Any TDR that is placed on non-accrual status is not reverted back to accruing status until the borrower makes timely payments as contracted for at least six months and future collection under the revised terms is probable. All of the Company’s restructurings were allowed in an effort to maximize its ability to collect on loans where borrowers were experiencing financial difficulty.

The reserve for a TDR is based upon the present value of the future expected cash flows discounted at the loan’s original effective interest rate or upon the fair value of the collateral less costs to sell, if the loan is deemed collateral dependent. This reserve methodology is used because all TDR loans are considered impaired.

The Company’s TDRs have various agreements that involve deferral of principal payments, or interest-only payments, for a period (usually 12 months or less) to allow the borrower time to improve cash flow or sell the property. Other common concessions leading to the designation of a TDR are lines of credit that are termed-out and/or extensions of maturities at rates that are less than the prevailing market rates given the risk profile of the borrower.

During 2020, federal banking regulators issued guidance that modifications made to a borrower affected by the COVID-19 pandemic and governmental shutdown orders do not need to be identified as a TDR if the loan was current at the time a modification plan was implemented.

‎

The following tables present TDR activity by the type of concession granted to the borrower for the nine month periods ended September 30, 2022 and 2021. There were no new TDR loans during the three month periods ended September 30, 2022 and 2021.

	Nine months ended September 30, 2022					Nine months ended September 30, 2021
	(Recorded Investment in thousands)					(Recorded Investment in thousands)
Troubled Debt Restructurings by Type of Concession	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and Industrial:	-	$	-	$	-	-	$	-	$	-
Extension of maturity	1		461		461	-		-		-
Residential Real Estate & Construction:
Commercial Real Estate & Construction	-		-		-	-		-		-
Home Equities:
Extension of maturity and
interest rate reduction	1		38		38	-		-		-
Consumer and other loans	-		-		-	-		-		-

The general practice of the Bank is to work with borrowers so that they are able to repay their loan in full. If a borrower continues to be delinquent or cannot meet the terms of a TDR and the loan is determined to be uncollectible, the loan will be charged-off to its collateral value. A loan is considered in default when the loan is 90 days past due. Loans which were classified as TDRs during the previous 12 months which defaulted during the three month and nine month periods ended September 30, 2022 and 2021 were not material.

‎

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Common Equity And Earnings Per Share Data

9 Months Ended

Sep. 30, 2022

Common Equity And Earnings Per Share Data [Abstract]

Common Equity And Earnings Per Share Data

4. COMMON EQUITY AND EARNINGS PER SHARE DATA

The common stock per share information is based upon the weighted average number of shares outstanding during each period. For the three and nine month periods ended September 30, 2022 the Company had an average of 36,646 and 42,572 dilutive shares outstanding, respectively. For the three and nine month periods ended September 30, 2021 the Company had an average of 57,705 and 52,128 dilutive shares outstanding, respectively.

Potential common shares that would have the effect of increasing diluted earnings per share are considered to be anti-dilutive and not included in calculating diluted earnings per share. There was an average of 54,680 and 55,847 potentially anti-dilutive shares outstanding for the three and nine month periods ended September 30, 2022, respectively. For the three and nine month periods ended September 30, 2021, there was an average of 39,390 and 80,614 potentially anti-dilutive shares outstanding, respectively. Potentially anti-dilutive shares outstanding were not included in calculating diluted earnings per share because their effect was anti-dilutive.

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Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2022

Other Comprehensive Income (Loss) [Abstract]

Other Comprehensive Income (Loss)

5. OTHER COMPREHENSIVE INCOME (LOSS)

The following tables summarize the changes in the components of accumulated other comprehensive income (loss) during the three and nine month periods ended September 30, 2022 and 2021:

	Balance at June 30, 2022		Net Change		Balance at September 30, 2022
	(in thousands)
Net unrealized loss on investment securities	$	(31,898)	$	(15,581)	$	(47,479)
Net defined benefit pension plan adjustments		(2,401)		56		(2,345)
Total	$	(34,299)	$	(15,525)	$	(49,824)

	Balance at June 30, 2021		Net Change		Balance at September 30, 2021
	(in thousands)
Net unrealized gain (loss) on investment securities	$	230	$	(1,530)	$	(1,300)
Net defined benefit pension plan adjustments		(2,965)		75		(2,890)
Total	$	(2,735)	$	(1,455)	$	(4,190)

	Balance at December 31, 2021		Net Change		Balance at September 30, 2022
	(in thousands)
Net unrealized loss on investment securities	$	(3,160)	$	(44,319)	$	(47,479)
Net defined benefit pension plan adjustments		(2,511)		166		(2,345)
Total	$	(5,671)	$	(44,153)	$	(49,824)

	Balance at December 31, 2020		Net Change		Balance at September 30, 2021
	(in thousands)
Net unrealized gain (loss) on investment securities	$	2,397	$	(3,697)	$	(1,300)
Net defined benefit pension plan adjustments		(3,116)		226		(2,890)
Total	$	(719)	$	(3,471)	$	(4,190)

‎

	Three months ended September 30, 2022						Three months ended September 30, 2021
	(in thousands)						(in thousands)
	Before-Tax Amount		Income Tax (Provision) Benefit		Net-of-Tax Amount		Before-Tax Amount		Income Tax (Provision) Benefit		Net-of-Tax Amount
Unrealized loss on investment
securities:
Unrealized loss on investment
securities	$	(21,016)	$	5,435	$	(15,581)	$	(2,066)	$	536	$	(1,530)
Defined benefit pension plan
adjustments:
Amortization of prior service cost		8		(2)		6		7		(2)		5
Amortization of actuarial loss		68		(18)		50		95		(25)		70
Net change		76		(20)		56		102		(27)		75
Other comprehensive loss	$	(20,940)	$	5,415	$	(15,525)	$	(1,964)	$	509	$	(1,455)

	Nine months ended September 30, 2022						Nine months ended September 30, 2021
	(in thousands)						(in thousands)
	Before-Tax Amount		Income Tax (Provision) Benefit		Net-of-Tax Amount		Before-Tax Amount		Income Tax (Provision) Benefit		Net-of-Tax Amount
Unrealized loss on investment
securities:
Unrealized loss on investment
securities	$	(59,796)	$	15,477	$	(44,319)	$	(4,995)	$	1,298	$	(3,697)
Defined benefit pension plan
adjustments:
Amortization of prior service cost		24		(8)		16		23		(7)		16
Amortization of actuarial loss		203		(53)		150		285		(75)		210
Net change		227		(61)		166		308		(82)		226
Other comprehensive loss	$	(59,569)	$	15,416	$	(44,153)	$	(4,687)	$	1,216	$	(3,471)

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Net Periodic Benefit Costs

9 Months Ended

Sep. 30, 2022

Net Periodic Benefit Costs [Abstract]

Net Periodic Benefit Costs

6. NET PERIODIC BENEFIT COSTS

On January 31, 2008, the Bank froze its defined benefit pension plan. The plan covered substantially all Bank employees. The plan provides benefits that are based on the employees’ compensation and years of service. Under the freeze, eligible employees will receive, at retirement, the benefits already earned through January 31, 2008, but have not accrued any additional benefits since then. As a result, service cost is no longer incurred.

The Bank uses an actuarial method of amortizing prior service cost and unrecognized net gains or losses which result from actual expense and assumptions being different than those that are projected. The amortization method the Bank used recognized the prior service cost and net gains or losses over the average remaining service period of active employees.

The Bank also maintains a nonqualified supplemental executive retirement plan covering certain members of the Company’s senior management. The Bank uses an actuarial method of amortizing unrecognized net gains or losses which result from actual expense and assumptions being different than those that are projected. The amortization method the Bank uses recognizes the net gains or losses over the average remaining service period of active employees.

The following table presents the net periodic cost for the Bank’s defined benefit pension plan and supplemental executive retirement plan for the three and nine month periods ended September 30, 2022 and 2021:

		Three months ended September 30,
		(in thousands)
					Supplemental Executive
	Pension Benefits				Retirement Plan
	2022		2021		2022		2021
Service cost	$	-	$	-	$	33	$	37
Interest cost		44		41		31		25
Expected return on plan assets		(88)		(89)		-		-
Amortization of prior service cost		-		-		8		7
Amortization of the net loss		24		24		44		71
Net periodic (benefit) cost	$	(20)	$	(24)	$	116	$	140

		Nine months ended September 30,
		(in thousands)
					Supplemental Executive
	Pension Benefits				Retirement Plan
	2022		2021		2022		2021
Service cost	$	-	$	-	$	99	$	112
Interest cost		133		122		93		75
Expected return on plan assets		(264)		(266)		-		-
Amortization of prior service cost		-		-		24		23
Amortization of the net loss		71		72		132		213
Net periodic (benefit) cost	$	(60)	$	(72)	$	348	$	423

The components of net periodic benefit cost other than the service cost component are included in the line item “other expense” in the income statement.

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Revenue Recognition Of Non-Interest Income

9 Months Ended

Sep. 30, 2022

Revenue Recognition Of Non-Interest Income [Abstract]

Revenue Recognition Of Non-Interest Income

7. REVENUE RECOGNITION OF NON-INTEREST INCOME

A description of the Company’s material revenue streams in non-interest income accounted for under ASC 606 follows:

Insurance Service and Fees: Insurance services revenue relates to various revenue streams from services provided by TEA and the Bank:

TEA earns commission revenue from selling commercial and personal property and casualty (“P&C”) insurance as well as employee benefits solutions to commercial customers.

TEA has agreements with various insurance companies to sell policies to customers on behalf of the carriers. The performance obligation for TEA is to sell annual P&C policies to commercial customers and consumers. This performance obligation is met when a new policy is sold or when an existing policy renews. The policies are generally one year terms. In the agreements with the respective insurance companies, a commission rate is agreed upon.  The commission is recognized at the time of the sale of the policy or when a policy renews.

TEA has signed contracts with insurance carriers that enable TEA to sell benefit plans to commercial customers on behalf of the insurance carriers. The performance obligation for TEA is to sell the plans to commercial customers. After the initial sale when the customer signs an agreement to purchase the offered benefit plan, the performance obligation is met each month when a customer continues utilizing benefit plans from the carrier. The customer does not commit to a specific length of time with the carrier. In the agreements with the respective insurance companies, a commission rate is agreed upon. Revenue is recognized each month when the customer continues with the benefit plan sold by TEA.

TEA also earns contingent profit sharing revenue. TEA has signed written agreements with insurance carriers that document payouts to TEA based on the loss ratios of its customers. The performance obligation for TEA is to maintain a customer base with loss ratios below the agreed upon thresholds. In the contracts with the insurance companies, payout rates based on loss ratios are documented. The consideration is variable as loss ratios vary based on customer experience.  TEA’s performance obligation is over the course of the year as its customers’ performance with insurance carriers is measured throughout the year as losses occur. Due to the variable nature of contingent profit sharing revenue, TEA will accrue contingent profit sharing revenue throughout the year based on recent historical results. As loss events occur and overall performance becomes known to TEA, accrual adjustments will be made until the cash is ultimately received. 

Financial services commission revenue from the Bank related to wealth management such as life insurance, annuities, and mutual funds sales is also included in the “insurance service and fees” line of the income statement.

The Company earns wealth management fees from its contracts with customers for certain financial services.  Fees that are transaction-based are recognized at the point in time that the transaction is executed.  Other related services provided include financial planning services and the fees the Bank earns are recognized when the services are rendered. 

Insurance claims services revenue is recorded at FCS.

FCS has signed agreements with insurance companies to perform claims services including investigative and adjustment services related to residential and commercial lines. The performance obligation is for FCS to investigate the insurance claims and inspecting the damage to determine the extent of the insurance company’s liability. FCS is paid based on time and materials expended to investigate the claim. The rates paid are determined in the agreement between FCS and the respective insurance companies. Upon completion of its claims inspection work, FCS bills the insurance company for services rendered and recognizes the revenue earned.  FCS discontinued operations on December 31, 2021.

‎

A disaggregation of the total insurance service and other fees for the three and nine months ended September 30, 2022 and 2021 is provided in the tables below:

		Three months ended September 30,
		2022		2021
		(in thousands)
Commercial property and casualty insurance commissions	$	1,706	$	1,426
Personal property and casualty insurance commissions		901		856
Employee benefits sales commissions		206		231
Profit sharing and contingent revenue		410		410
Wealth management and other financial services		137		161
Insurance claims services revenue		-		77
Other insurance-related revenue		23		30
Total insurance service and other fees	$	3,383	$	3,191

		Nine months ended September 30,
		2022		2021
	(in thousands)
Commercial property and casualty insurance commissions	$	3,525	$	3,248
Personal property and casualty insurance commissions		2,554		2,517
Employee benefits sales commissions		649		692
Profit sharing and contingent revenue		971		1,029
Wealth management and other financial services		457		508
Insurance claims services revenue		-		236
Other insurance-related revenue		93		120
Total insurance service and other fees	$	8,249	$	8,350

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Fair Value Measurement

9 Months Ended

Sep. 30, 2022

Fair Value Measurement [Abstract]

Fair Value Measurement

8. FAIR VALUE MEASUREMENT

Fair value is defined in ASC Topic 820 “Fair Value Measurement” as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

There are three levels of inputs to fair value measurement:

	Level 1 inputs are quoted prices for identical instruments in active markets;
	Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and
	Level 3 inputs are unobservable inputs.

Observable market data should be used when available.

‎

FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE ON A RECURRING BASIS

The following table presents, for each of the fair-value hierarchy levels as defined in this footnote, those financial instruments which are measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021, respectively:

(in thousands)		Level 1		Level 2		Level 3		Fair Value
September 30, 2022
Securities available-for-sale:
US treasuries and government agencies	$	-	$	141,064	$	-	$	141,064
States and political subdivisions		-		21,854		-		21,854
Mortgage-backed securities		-		206,223		-		206,223
December 31, 2021
Securities available-for-sale:
US treasuries and government agencies	$	-	$	96,818	$	-	$	96,818
States and political subdivisions		-		6,246		-		6,246
Mortgage-backed securities		-		202,895		-		202,895

Securities available for sale

Fair values for available for sale securities are determined using independent pricing services and market-participating brokers. The Company utilizes a third-party for these pricing services. The third-party utilizes evaluated pricing models that vary by asset class and incorporate available trade, bid and other market information for structured securities, cash flow and, when available, loan performance data. Because many fixed income securities do not trade on a daily basis, the third-party service provider’s evaluated pricing applications apply information as applicable through processes, such as benchmarking of like securities, sector groupings, and matrix pricing, to prepare evaluations. In addition, our third-party pricing service provider uses model processes, such as the Option Adjusted Spread model, to assess interest rate impact and develop prepayment scenarios. The models and the process take into account market convention. For each asset class, a team of evaluators gathers information from market sources and integrates relevant credit information, perceived market movements and sector news into the evaluated pricing applications and models. The third-party, at times, may determine that it does not have sufficient verifiable information to value a particular security. In these cases the Company will utilize valuations from another pricing service.

On a quarterly basis the Company reviews changes, as submitted by our third-party pricing service provider, in the market value of its securities portfolio. Individual changes in valuations are reviewed for consistency with general interest rate movements and any known credit concerns for specific securities. Additionally, on a quarterly basis the Company has its entire securities portfolio priced by a second pricing service to determine consistency with another market evaluator. If, on the Company’s review or in comparing with another servicer, a material difference between pricing evaluations were to exist, the Company may submit an inquiry to our third-party pricing service provider regarding the data used to value a particular security. If the Company determines it has market information that would support a different valuation than our third-party service provider’s evaluation it can submit a challenge for a change to that security’s valuation.

Securities available for sale are classified as Level 2 in the fair value hierarchy as the valuation provided by the third-party provider uses observable market data.

ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A NONRECURRING BASIS

The Company is required, on a nonrecurring basis, to adjust the carrying value of certain assets or provide valuation allowances related to certain assets using fair value measurements. The following table presents for each of the fair-value hierarchy levels as defined in this footnote, those financial instruments which are measured at fair value on a nonrecurring basis September 30, 2022 and December 31, 2021:

(in thousands)		Level 1		Level 2		Level 3		Fair Value
September 30, 2022
Collateral dependent impaired loans	$	-	$	-	$	1,146	$	1,146
December 31, 2021
Collateral dependent impaired loans	$	-	$	-	$	4,608	$	4,608

Impaired loans

Collateral dependent loans carried at fair value have been partially charged-off or receive specific allocations of the allowance for credit losses. The Company evaluates and values collateral dependent impaired loans at the time the loan is identified as impaired, and the fair values of such loans are estimated using Level 3 inputs in the fair value hierarchy. Each loan’s collateral value has a unique appraisal and management’s discount of the value is based on factors unique to each impaired loan. The significant unobservable input in determining the fair value is management’s subjective discount on appraisals of the collateral securing the loan, which ranges from 10%-50%. Fair value is estimated based on the value of the collateral securing these loans. Collateral may consist of real estate and/or business assets including equipment, inventory and/or accounts receivable and the value of these assets is determined based on appraisals by qualified licensed appraisers hired by the Company. Appraised and reported values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, estimated costs to sell, and/or management’s expertise and knowledge of the client and the client’s business.

The Company has an appraisal policy in which appraisals are obtained upon a commercial loan being downgraded on the Company’s internal loan rating scale to a special mention or a substandard depending on the amount of the loan, the type of loan and the type of collateral.  All impaired commercial loans are graded substandard or worse on the internal loan rating scale.  For consumer loans, the Company obtains appraisals when a loan becomes 90 days past due or is determined to be impaired, whichever occurs first.  Subsequent to the downgrade or reaching 90 days past due, if the loan remains outstanding and impaired for at least one year more, management may require another follow-up appraisal.  Between receipts of updated appraisals, if necessary, management may perform an internal valuation based on any known changing conditions in the marketplace such as sales of similar properties, a change in the condition of the collateral, or feedback from local appraisers.  Collateral dependent impaired loans had a gross value of $1.2 million, with an allowance for loan loss of $0.1 million, at September 30, 2022 compared with $5.0 million and $0.4 million, respectively, at December 31, 2021.

The table below depicts the estimated fair values of the Company’s financial instruments, including those that are not measured and reported at fair value on a recurring basis or nonrecurring basis.

	September 30, 2022				December 31, 2021
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
		(in thousands)				(in thousands)
Financial assets:
Level 1:
Cash and cash equivalents	$	21,207	$	21,207	$	244,785	$	244,785
Level 2:
Available for sale securities		369,141		369,141		305,959		305,959
FHLB and FRB stock		6,730		N/A		6,084		N/A
Level 3:
Held to maturity securities		7,572		7,413		3,165		3,179
Loans, net		1,607,827		1,518,516		1,553,467		1,573,420
Financial liabilities:
Level 1:
Demand deposits	$	558,805	$	558,805	$	492,864	$	492,864
NOW deposits		263,648		263,648		259,908		259,908
Savings deposits		913,383		913,383		1,019,925		1,019,925
Level 2:
Securities sold under agreement to
repurchase		9,812		9,812		4,112		4,112
Other borrowed funds		42,594		41,902		32,879		32,990
Subordinated debt		31,050		30,906		30,974		32,111
Level 3:
Time deposits		137,910		135,710		164,340		164,574

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Segment Information

9 Months Ended

Sep. 30, 2022

Segment Information [Abstract]

Segment Information

9. SEGMENT INFORMATION

The Company comprises two primary business segments, banking and insurance agency activities. The following tables set forth information regarding these segments for the three and nine month periods ended September 30, 2022 and 2021.

	Three months ended September 30, 2022
		Banking		Insurance Agency
		Activities		Activities		Total
		(in thousands)
Net interest income	$	19,188	$	-	$	19,188
Provision for loan losses		1,328		-		1,328
Net interest income after
provision for loan losses		17,860		-		17,860
Insurance service and fees		134		3,249		3,383
Other non-interest income		2,384		-		2,384
Amortization expense		5		95		100
Other non-interest expense		13,750		1,941		15,691
Income before income taxes		6,623		1,213		7,836
Income tax provision		1,658		314		1,972
Net income	$	4,965	$	899	$	5,864

	Three months ended September 30, 2021
		Banking		Insurance Agency
		Activities		Activities		Total
		(in thousands)
Net interest income (expense)	$	18,165	$	(2)	$	18,163
Provision (credit) for loan losses		(1,459)		-		(1,459)
Net interest income (expense) after
provision for loan losses		19,624		(2)		19,622
Insurance service and fees		141		3,050		3,191
Other non-interest income		1,966		-		1,966
Amortization expense		6		129		135
Other non-interest expense		13,382		1,876		15,258
Income before income taxes		8,343		1,043		9,386
Income tax provision		2,135		272		2,407
Net income	$	6,208	$	771	$	6,979

‎

	Nine months ended September 30, 2022
		Banking		Insurance Agency
		Activities		Activities		Total
		(in thousands)
Net interest income	$	53,741	$	-	$	53,741
Provision for loan losses		1,816		-		1,816
Net interest income after
provision for loan losses		51,925		-		51,925
Insurance service and fees		442		7,807		8,249
Other non-interest income		6,561		-		6,561
Amortization expense		15		285		300
Other non-interest expense		39,137		5,598		44,735
Income before income taxes		19,776		1,924		21,700
Income tax provision		4,855		499		5,354
Net income	$	14,921	$	1,425	$	16,346

	Nine months ended September 30, 2021
		Banking		Insurance Agency
		Activities		Activities		Total
		(in thousands)
Net interest income (expense)	$	53,118	$	(8)	$	53,110
Provision (credit) for loan losses		(1,906)		-		(1,906)
Net interest income (expense) after
provision for loan losses		55,024		(8)		55,016
Insurance service and fees		456		7,894		8,350
Other non-interest income		5,787		4		5,791
Amortization expense		16		389		405
Other non-interest expense		38,603		5,926		44,529
Income before income taxes		22,648		1,575		24,223
Income tax provision		5,669		410		6,079
Net income	$	16,979	$	1,165	$	18,144

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Contingent Liabilities And Commitments

9 Months Ended

Sep. 30, 2022

Contingent Liabilities And Commitments [Abstract]

Contingent Liabilities And Commitments

10. CONTINGENT LIABILITIES AND COMMITMENTS

The unaudited consolidated financial statements do not reflect various commitments and contingent liabilities, which arise in the normal course of business, and which involve elements of credit risk, interest rate risk and liquidity risk. These commitments and contingent liabilities consist of commitments to extend credit and standby letters of credit. A summary of the Bank’s commitments and contingent liabilities is as follows:

	September 30,		December 31,
	2022		2021
	(in thousands)
Commitments to extend credit	$	397,799	$	394,953
Standby letters of credit		10,657		4,636
Total	$	408,456	$	399,589

Commitments to extend credit and standby letters of credit include some exposure to credit loss in the event of nonperformance by the customer. The Bank’s credit policies and procedures for credit commitments and financial guarantees are the same as those for extensions of credit that are recorded on the Company’s unaudited consolidated balance sheets. Because these instruments have fixed maturity dates, and because they may expire without being drawn upon, they do not necessarily represent cash requirements of the Bank. The Bank did not incur any losses on its commitments and did not record a reserve for its commitments during the first nine months of 2022 or during 2021.

Certain lending commitments for construction residential mortgage loans are considered derivative instruments under the guidelines of GAAP. The changes in the fair value of these commitments, due to interest rate risk, are not recorded on the consolidated balance sheets as the fair value of these derivatives is not considered to be material.

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2022

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

11. RECENT ACCOUNTING PRONOUNCEMENTS

ASUs adopted by the Company during the current fiscal year are not expected to have a material impact on the Company’s consolidated financial position, results of operations, cash flows or disclosures. The following standard will be adopted in a future period. ASUs not listed below are not expected to have a material impact on the Company’s consolidated financial position, results of operations, cash flows or disclosures.

ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments – Current GAAP requires an “incurred loss” methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. Both financial institutions and users of their financial statements expressed concern that current GAAP restricts the ability to record credit losses that are expected, but do not yet meet the “probable” threshold. The main objective of this ASU (commonly known as the Current Expected Credit Loss Impairment Model, or CECL, in the industry) is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in CECL replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company has contracted with a third-party software vendor to assist with the development of the Bank’s approach for determining expected credit losses under the new guidance. The Company is actively working on preliminary test calculations, data validation, as well as process and procedural documentation. While the total impact of CECL to the Company’s financial statements is unknown at this time, the Company recognizes it may be material. On October 16, 2019, the FASB affirmed its decision to amend the effective date for the amendments in CECL for smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company will adopt CECL effective January 1, 2023.

ASU 2022-02, Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures – This ASU eliminates the accounting guidance for troubled debt restructurings ("TDRs") in ASC 310-40, "Receivables - Troubled Debt Restructurings by Creditors" for entities that have adopted the CECL model introduced by ASU 2016-13. ASU 2022-02 also requires that public business entities disclose current-period gross charge-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, "Financial Instruments—Credit Losses—Measured at Amortized Cost". The Company will adopt ASU 2022-02 effective January 1, 2023.

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Organization And Summary Of Significant Accounting Policies (Policy)

9 Months Ended

Sep. 30, 2022

Organization And Summary Of Significant Accounting Policies [Abstract]

Organization And Summary Of Significant Accounting Policies

The accounting and reporting policies followed by Evans Bancorp, Inc. (the “Company”), a financial holding company, and its two direct, wholly-owned subsidiaries: (i) Evans Bank, National Association (the “Bank”), and the Bank’s subsidiaries, Evans National Leasing, Inc. (“ENL”), and Evans National Holding Corp. (“ENHC”); and (ii) Evans National Financial Services, LLC (“ENFS”), and ENFS’s subsidiary, The Evans Agency, LLC (“TEA”), and TEA’s subsidiaries, Frontier Claims Services, Inc. (“FCS”) and ENB Associates Inc. (“ENBA”), in the preparation of the accompanying interim unaudited consolidated financial statements conform with U.S. generally accepted accounting principles (“GAAP”) and with general practice within the industries in which it operates. Except as the context otherwise requires, the Company and its direct and indirect subsidiaries are collectively referred to in this report as the “Company.”

The Financial Accounting Standards Board (“FASB”) establishes changes to GAAP in the form of accounting standards updates (“ASUs”) to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs when they are issued by FASB. ASUs adopted by the Company during the current fiscal year are not expected to have a material impact on the Company’s consolidated financial position, results of operations, cash flows or disclosures.

The results of operations for the nine month period ended September 30, 2022 are not necessarily indicative of the results to be expected for the full year.

The accompanying unaudited consolidated financial statements should be read in conjunction with the Audited Consolidated Financial Statements and the Notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “10-K”). There have been no significant changes to the Company’s significant accounting policies as disclosed in Note 1 to the 10-K.

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Securities (Tables)

9 Months Ended

Sep. 30, 2022

Securities [Abstract]

Schedule Of Amortized Cost And Approximate Fair Value Of Securities

	September 30, 2022
	(in thousands)
	Amortized		Unrealized				Fair
	Cost		Gains		Losses		Value
Available for Sale:
Debt securities:
U.S. treasuries and government agencies	$	166,351	$	2	$	(25,289)	$	141,064
States and political subdivisions		23,573		2		(1,721)		21,854
Total debt securities		189,924		4		(27,010)		162,918
Mortgage-backed securities:
FNMA		76,916		-		(13,272)		63,644
FHLMC		47,544		-		(7,160)		40,384
GNMA		40,741		-		(6,019)		34,722
SBA		23,044		-		(2,397)		20,647
CMO		55,037		-		(8,211)		46,826
Total mortgage-backed securities		243,282		-		(37,059)		206,223
Total securities designated as available for sale	$	433,206	$	4	$	(64,069)	$	369,141
Held to Maturity:
Debt securities
States and political subdivisions	$	7,572	$	-	$	(159)	$	7,413
Total securities designated as held to maturity	$	7,572	$	-	$	(159)	$	7,413

	December 31, 2021
	(in thousands)
	Amortized		Unrealized				Fair
	Cost		Gains		Losses		Value
Available for Sale:
Debt securities:
U.S. treasuries and government agencies	$	99,005	$	199	$	(2,386)	$	96,818
States and political subdivisions		6,150		96		-		6,246
Total debt securities		105,155		295		(2,386)		103,064
Mortgage-backed securities:
FNMA		64,056		222		(1,068)		63,210
FHLMC		38,796		62		(424)		38,434
GNMA		31,814		15		(615)		31,214
SBA		17,919		343		(54)		18,208
CMO		52,488		175		(834)		51,829
Total mortgage-backed securities		205,073		817		(2,995)		202,895
Total securities designated as available for sale	$	310,228	$	1,112	$	(5,381)	$	305,959
Held to Maturity:
Debt securities
States and political subdivisions	$	3,165	$	17	$	(3)	$	3,179
Total securities designated as held to maturity	$	3,165	$	17	$	(3)	$	3,179

Scheduled Maturities Of Debt And Mortgage-Backed Securities

	September 30, 2022
	Amortized		Estimated
	cost		fair value
	(in thousands)
Debt securities available for sale:
Due in one year or less	$	6,839	$	6,769
Due after one year through five years		79,801		73,585
Due after five years through ten years		74,294		62,431
Due after ten years		28,990		20,133
		189,924		162,918
Mortgage-backed securities
available for sale		243,282		206,223
Total	$	433,206	$	369,141
Debt securities held to maturity:
Due in one year or less	$	6,665	$	6,615
Due after one year through five years		495		456
Due after five years through ten years		412		342
Due after ten years		-		-
Total	$	7,572	$	7,413

Unrealized Losses On Securities

	September 30, 2022
		Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
		(in thousands)
Available for Sale:
Debt securities:
U.S. treasuries and government agencies	$	91,283	$	(9,992)	$	48,781	$	(15,297)	$	140,064	$	(25,289)
States and political subdivisions		20,748		(1,721)		-		-		20,748		(1,721)
Total debt securities		112,031		(11,713)		48,781		(15,297)		160,812		(27,010)
Mortgage-backed securities:
FNMA		31,695		(5,178)		31,889		(8,094)		63,584		(13,272)
FHLMC		24,908		(3,503)		15,458		(3,657)		40,366		(7,160)
GNMA		20,125		(2,675)		14,597		(3,344)		34,722		(6,019)
SBA		17,478		(1,966)		3,169		(431)		20,647		(2,397)
CMO		29,286		(3,855)		17,540		(4,356)		46,826		(8,211)
Total mortgage-backed securities		123,492		(17,177)		82,653		(19,882)		206,145		(37,059)
Held to Maturity:
Debt securities:
States and political subdivisions		7,335		(149)		78		(10)		7,413		(159)
Total temporarily impaired
securities	$	242,858	$	(29,039)	$	131,512	$	(35,189)	$	374,370	$	(64,228)
	December 31, 2021
		Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
		(in thousands)
Available for Sale:
Debt securities:
U.S. treasuries and government agencies	$	50,381	$	(884)	$	27,488	$	(1,502)	$	77,869	$	(2,386)
States and political subdivisions		-		-		-		-		-		-
Total debt securities		50,381		(884)		27,488		(1,502)		77,869		(2,386)
Mortgage-backed securities:
FNMA		48,008		(903)		2,941		(165)		50,949		(1,068)
FHLMC		35,851		(423)		76		(1)		35,927		(424)
GNMA		30,252		(615)		143		-		30,395		(615)
SBA		2,824		(25)		1,218		(29)		4,042		(54)
CMO		38,313		(833)		25		(1)		38,338		(834)
Total mortgage-backed securities		155,248		(2,799)		4,403		(196)		159,651		(2,995)
Held to Maturity:
Debt securities:
States and political subdivisions		1,782		(3)		-		-		1,782		(3)
Total temporarily impaired
securities	$	207,411	$	(3,686)	$	31,891	$	(1,698)	$	239,302	$	(5,384)

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Loans And The Allowance For Loan Losses (Tables)

9 Months Ended

Sep. 30, 2022

Loans And The Allowance For Loan Losses [Abstract]

Schedule Of Loan Portfolio Composition

	September 30, 2022		December 31, 2021
Mortgage loans on real estate:	(in thousands)
Residential mortgages	$	433,102	$	411,060
Commercial and multi-family		765,136		739,761
Construction-Residential		3,136		5,109
Construction-Commercial		103,763		98,012
Home equities		83,334		81,238
Total real estate loans		1,388,471		1,335,180
Commercial and industrial loans		238,093		237,077
Consumer and other loans		427		719
Unaccreted yield adjustments*		(534)		(1,071)
Total gross loans		1,626,457		1,571,905
Allowance for loan losses		(18,630)		(18,438)
Loans, net	$	1,607,827	$	1,553,467

* Includes net premiums and discounts on acquired loans and net deferred fees and costs on loans originated.

Data, At Class Level, Of Credit Quality Indicators Of Certain Loans

	September 30, 2022
	(in thousands)
Corporate Credit Exposure – By Credit Rating	Commercial Real Estate Construction		Commercial and Multi-Family Mortgages		Total Commercial Real Estate		Commercial and Industrial
Acceptable or better	$	64,746	$	547,332	$	612,078	$	175,101
Watch		19,505		165,144		184,649		46,557
Special Mention		6,943		21,453		28,396		9,555
Substandard		12,569		31,207		43,776		6,880
Doubtful/Loss		-		-		-		-
Total	$	103,763	$	765,136	$	868,899	$	238,093
	December 31, 2021
	(in thousands)
Corporate Credit Exposure – By Credit Rating	Commercial Real Estate Construction		Commercial and Multi-Family Mortgages		Total Commercial Real Estate		Commercial and Industrial
Acceptable or better	$	65,211	$	480,159	$	545,370	$	152,675
Watch		19,108		182,502		201,610		64,406
Special Mention		7,045		33,219		40,264		10,200
Substandard		6,648		43,881		50,529		9,796
Doubtful/Loss		-		-		-		-
Total	$	98,012	$	739,761	$	837,773	$	237,077

Recorded Investment In Loans Past Due

	September 30, 2022
	(in thousands)
		Current							Non-accruing		Total
		Balance	30-59 days		60-89 days		90+ days		Loans		Balance
Commercial and industrial	$	229,785	$	5,375	$	30	$	64	$	2,839	$	238,093
Residential real estate:
Residential		428,009		-		1,371		-		3,722		433,102
Construction		3,136		-		-		-		-		3,136
Commercial real estate:
Commercial		754,993		750		203		-		9,190		765,136
Construction		87,302		5,958		875		774		8,854		103,763
Home equities		81,512		1,144		160		-		518		83,334
Consumer and other		414		8		4		1		-		427
Total Loans	$	1,585,151	$	13,235	$	2,643	$	839	$	25,123	$	1,626,991

Note: Loan balances do not include $(0.5) million of unaccreted yield adjustments as of September 30, 2022.

	December 31, 2021
	(in thousands)
		Current							Non-accruing		Total
		Balance	30-59 days		60-89 days		90+ days		Loans		Balance
Commercial and industrial	$	229,724	$	1,336	$	568	$	548	$	4,901	$	237,077
Residential real estate:
Residential		402,992		3,466		1,563		-		3,039		411,060
Construction		5,109		-		-		-		-		5,109
Commercial real estate:
Commercial		711,481		16,451		6,073		-		5,756		739,761
Construction		93,842		757		-		480		2,933		98,012
Home equities		79,644		627		209		-		758		81,238
Consumer and other		706		9		4		-		-		719
Total Loans	$	1,523,498	$	22,646	$	8,417	$	1,028	$	17,387	$	1,572,976

Note: Loan balances do not include $(1.1) million of unaccreted yield adjustments as of December 31, 2021.
‎

Schedule Of Allowance For Loan Losses According To Portfolio Segment

The following tables present the activity in the allowance for loan losses according to portfolio segment for the three month periods ended September 30, 2022 and 2021.

	Three months ended September 30, 2022
	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer and Other		Residential Mortgages*		Home Equities		Total
Allowance for loan	(in thousands)
losses:
Beginning balance	$	3,714	$	12,305	$	70	$	2,164	$	566	$	18,819
Charge-offs		(1,515)		-		(45)		-		-		(1,560)
Recoveries		40		-		3		-		-		43
Provision		1,805		(603)		13		47		66		1,328
Ending balance	$	4,044	$	11,702	$	41	$	2,211	$	632	$	18,630

*Includes construction loans

	Three months ended September 30, 2021
	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer and Other		Residential Mortgages*		Home Equities		Total
Allowance for loan	(in thousands)
losses:
Beginning balance	$	3,790	$	13,925	$	58	$	1,694	$	475	$	19,942
Charge-offs		(424)		-		(29)		-		-		(453)
Recoveries		15		-		4		-		2		21
Provision		(228)		(1,555)		(12)		259		77		(1,459)
Ending balance	$	3,153	$	12,370	$	21	$	1,953	$	554	$	18,051

* Includes construction loans

‎

The following tables present the activity in the allowance for loan losses according to portfolio segment for the nine month periods ended September 30, 2022 and 2021.

	Nine months ended September 30, 2022
	(in thousands)
	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer and Other		Residential Mortgages*		Home Equities		Total
Allowance for loan
losses:
Beginning balance	$	3,309	$	12,367	$	54	$	2,127	$	581	$	18,438
Charge-offs		(1,546)		-		(112)		(55)		-		(1,713)
Recoveries		76		-		13		-		-		89
Provision (Credit)		2,205		(665)		86		139		51		1,816
Ending balance	$	4,044	$	11,702	$	41	$	2,211	$	632	$	18,630

‎*Includes construction loans

	Nine months ended September 30, 2021
	(in thousands)
	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer and Other		Residential Mortgages*		Home Equities		Total
Allowance for loan
losses:
Beginning balance	$	4,882	$	13,249	$	45	$	1,658	$	581	$	20,415
Charge-offs		(424)		-		(120)		-		-		(544)
Recoveries		58		-		26		-		2		86
Provision (Credit)		(1,363)		(879)		70		295		(29)		(1,906)
Ending balance	$	3,153	$	12,370	$	21	$	1,953	$	554	$	18,051

*Includes construction loans

‎

The following table presents the allocation of the allowance for loan losses according to portfolio segment summarized on the basis of the Company’s impairment methodology as of September 30, 2022 and December 31, 2021:

	September 30, 2022
	(in thousands)
	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer and Other		Residential Mortgages*		Home Equities		Total
Allowance for loan
losses:
Ending balance:
Loans acquired with deteriorated credit quality	$	-	$	-	$	-	$	-	$	-	$	-
Individually evaluated for impairment		2		2		-		66		39		109
Collectively evaluated for impairment		4,042		11,700		41		2,145		593		18,521
Total	$	4,044	$	11,702	$	41	$	2,211	$	632	$	18,630
Loans:
Ending balance:
Loans acquired with deteriorated credit quality	$	-	$	-	$	-	$	703	$	-	$	703
Individually evaluated for impairment		2,929		20,839		-		3,367		903		28,038
Collectively evaluated for impairment		235,164		848,060		427		432,168		82,431		1,598,250
Total	$	238,093	$	868,899	$	427	$	436,238	$	83,334	$	1,626,991

Note: Loan balances do not include $(0.5) million of unaccreted yield adjustments as of September 30, 2022.

* Includes construction loans

	December 31, 2021
	(in thousands)
	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer and Other		Residential Mortgages*		Home Equities		Total
Allowance for loan
losses:
Ending balance:
Loans acquired with deteriorated credit quality	$	-	$	-	$	-	$	-	$	-	$	-
Individually evaluated for impairment		100		345		-		9		41		495
Collectively evaluated for impairment		3,209		12,022		54		2,118		540		17,943
Total	$	3,309	$	12,367	$	54	$	2,127	$	581	$	18,438
Loans:
Ending balance:
Loans acquired with deteriorated credit quality	$	-	$	-	$	-	$	803	$	-	$	803
Individually evaluated for impairment		5,028		11,925		-		2,598		1,236		20,787
Collectively evaluated for impairment		232,049		825,848		719		412,768		80,002		1,551,386
Total	$	237,077	$	837,773	$	719	$	416,169	$	81,238	$	1,572,976

Note: Loan balances do not include $(1.1) million of unaccreted yield adjustments as of December 31, 2021.

* Includes construction loans

Data, At Class Level, Of Impaired Loans

	At September 30, 2022						At December 31, 2021
(in thousands)		Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial and industrial	$	2,926	$	3,551	$	-	$	4,874	$	5,712	$	-
Residential real estate:
Residential		3,784		4,253		-		3,297		3,654		-
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		11,814		12,150		-		8,821		9,338		-
Construction		8,854		8,998		-		1,395		1,499		-
Home equities		864		1,024		-		1,127		1,324		-
Consumer and other		-		-		-		-		-		-
Total impaired loans	$	28,242	$	29,976	$	-	$	19,514	$	21,527	$	-

	At September 30, 2022							At December 31, 2021
(in thousands)		Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With a related allowance recorded:
Commercial and industrial	$	3	$	3	$	2	$	154	$	158	$	100
Residential real estate:
Residential		245		245		66		60		60		9
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		171		197		2		171		717		16
Construction		-		-		-		1,538		1,555		329
Home equities		39		66		39		109		109		41
Consumer and other		-		-		-		-		-		-
Total impaired loans	$	458	$	511	$	109	$	2,032	$	2,599	$	495

‎

		At September 30, 2022					At December 31, 2021
(in thousands)		Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Total:
Commercial and industrial	$	2,929	$	3,554	$	2	$	5,028	$	5,870	$	100
Residential real estate:
Residential		4,029		4,498		66		3,357		3,714		9
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		11,985		12,347		2		8,992		10,055		16
Construction		8,854		8,998		-		2,933		3,054		329
Home equities		903		1,090		39		1,236		1,433		41
Consumer and other		-		-		-		-		-		-
Total impaired loans	$	28,700	$	30,487	$	109	$	21,546	$	24,126	$	495

			Three months ended September 30, 2022				Three months ended September 30, 2021
	(in thousands)		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Total:
Commercial and industrial		$	3,681	$	2	$	5,755	$	-
Residential real estate:
Residential			3,972		-		3,894		5
Construction			-		-		-		-
Commercial real estate:
Commercial			12,533		6		15,044		165
Construction			5,113		-		3,331		-
Home equities			932		4		1,440		3
Consumer and other			-		-		-		-
Total impaired loans		$	26,231	$	12	$	29,464	$	173

Loans Classified As Troubled Debt Restructurings

		September 30, 2022
		(in thousands)
		Total		Nonaccruing		Accruing		Related Allowance
Commercial and industrial	$	1,254	$	1,164	$	90	$	-
Residential real estate:
Residential		889		541		348		-
Construction		-		-		-		-
Commercial real estate:
Commercial and multi-family		2,795		-		2,795		-
Construction		-		-		-		-
Home equities		390		5		385		-
Consumer and other		-		-		-		-
Total TDR loans	$	5,328	$	1,710	$	3,618	$	-

		December 31, 2021
		(in thousands)
		Total		Nonaccruing		Accruing		Related Allowance
Commercial and industrial	$	1,003	$	876	$	127	$	-
Residential real estate:
Residential		989		627		362		-
Construction		-		-		-		-
Commercial real estate:
Commercial and multi-family		3,236		-		3,236		-
Construction		-		-		-		-
Home equities		490		12		478		-
Consumer and other		-		-		-		-
Total TDR loans	$	5,718	$	1,515	$	4,203	$	-

TDR Activity By Type Of Concession Granted To Borrower

	Nine months ended September 30, 2022					Nine months ended September 30, 2021
	(Recorded Investment in thousands)					(Recorded Investment in thousands)
Troubled Debt Restructurings by Type of Concession	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and Industrial:	-	$	-	$	-	-	$	-	$	-
Extension of maturity	1		461		461	-		-		-
Residential Real Estate & Construction:
Commercial Real Estate & Construction	-		-		-	-		-		-
Home Equities:
Extension of maturity and
interest rate reduction	1		38		38	-		-		-
Consumer and other loans	-		-		-	-		-		-

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Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2022

Other Comprehensive Income (Loss) [Abstract]

Schedule of Accumulated Other Comprehensive Income

	Balance at June 30, 2022		Net Change		Balance at September 30, 2022
	(in thousands)
Net unrealized loss on investment securities	$	(31,898)	$	(15,581)	$	(47,479)
Net defined benefit pension plan adjustments		(2,401)		56		(2,345)
Total	$	(34,299)	$	(15,525)	$	(49,824)

	Balance at June 30, 2021		Net Change		Balance at September 30, 2021
	(in thousands)
Net unrealized gain (loss) on investment securities	$	230	$	(1,530)	$	(1,300)
Net defined benefit pension plan adjustments		(2,965)		75		(2,890)
Total	$	(2,735)	$	(1,455)	$	(4,190)

	Balance at December 31, 2021		Net Change		Balance at September 30, 2022
	(in thousands)
Net unrealized loss on investment securities	$	(3,160)	$	(44,319)	$	(47,479)
Net defined benefit pension plan adjustments		(2,511)		166		(2,345)
Total	$	(5,671)	$	(44,153)	$	(49,824)

	Balance at December 31, 2020		Net Change		Balance at September 30, 2021
	(in thousands)
Net unrealized gain (loss) on investment securities	$	2,397	$	(3,697)	$	(1,300)
Net defined benefit pension plan adjustments		(3,116)		226		(2,890)
Total	$	(719)	$	(3,471)	$	(4,190)

Components Of Other Comprehensive Income

	Three months ended September 30, 2022						Three months ended September 30, 2021
	(in thousands)						(in thousands)
	Before-Tax Amount		Income Tax (Provision) Benefit		Net-of-Tax Amount		Before-Tax Amount		Income Tax (Provision) Benefit		Net-of-Tax Amount
Unrealized loss on investment
securities:
Unrealized loss on investment
securities	$	(21,016)	$	5,435	$	(15,581)	$	(2,066)	$	536	$	(1,530)
Defined benefit pension plan
adjustments:
Amortization of prior service cost		8		(2)		6		7		(2)		5
Amortization of actuarial loss		68		(18)		50		95		(25)		70
Net change		76		(20)		56		102		(27)		75
Other comprehensive loss	$	(20,940)	$	5,415	$	(15,525)	$	(1,964)	$	509	$	(1,455)

	Nine months ended September 30, 2022						Nine months ended September 30, 2021
	(in thousands)						(in thousands)
	Before-Tax Amount		Income Tax (Provision) Benefit		Net-of-Tax Amount		Before-Tax Amount		Income Tax (Provision) Benefit		Net-of-Tax Amount
Unrealized loss on investment
securities:
Unrealized loss on investment
securities	$	(59,796)	$	15,477	$	(44,319)	$	(4,995)	$	1,298	$	(3,697)
Defined benefit pension plan
adjustments:
Amortization of prior service cost		24		(8)		16		23		(7)		16
Amortization of actuarial loss		203		(53)		150		285		(75)		210
Net change		227		(61)		166		308		(82)		226
Other comprehensive loss	$	(59,569)	$	15,416	$	(44,153)	$	(4,687)	$	1,216	$	(3,471)

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Net Periodic Benefit Costs (Tables)

9 Months Ended

Sep. 30, 2022

Net Periodic Benefit Costs [Abstract]

Schedule Of Net Periodic Benefit Cost

		Three months ended September 30,
		(in thousands)
					Supplemental Executive
	Pension Benefits				Retirement Plan
	2022		2021		2022		2021
Service cost	$	-	$	-	$	33	$	37
Interest cost		44		41		31		25
Expected return on plan assets		(88)		(89)		-		-
Amortization of prior service cost		-		-		8		7
Amortization of the net loss		24		24		44		71
Net periodic (benefit) cost	$	(20)	$	(24)	$	116	$	140

		Nine months ended September 30,
		(in thousands)
					Supplemental Executive
	Pension Benefits				Retirement Plan
	2022		2021		2022		2021
Service cost	$	-	$	-	$	99	$	112
Interest cost		133		122		93		75
Expected return on plan assets		(264)		(266)		-		-
Amortization of prior service cost		-		-		24		23
Amortization of the net loss		71		72		132		213
Net periodic (benefit) cost	$	(60)	$	(72)	$	348	$	423

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Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Measurement [Abstract]

Financial Instruments Measured At Fair Value On Recurring Basis

(in thousands)		Level 1		Level 2		Level 3		Fair Value
September 30, 2022
Securities available-for-sale:
US treasuries and government agencies	$	-	$	141,064	$	-	$	141,064
States and political subdivisions		-		21,854		-		21,854
Mortgage-backed securities		-		206,223		-		206,223
December 31, 2021
Securities available-for-sale:
US treasuries and government agencies	$	-	$	96,818	$	-	$	96,818
States and political subdivisions		-		6,246		-		6,246
Mortgage-backed securities		-		202,895		-		202,895

Financial Instruments Measured At Fair Value On Nonrecurring Basis

(in thousands)		Level 1		Level 2		Level 3		Fair Value
September 30, 2022
Collateral dependent impaired loans	$	-	$	-	$	1,146	$	1,146
December 31, 2021
Collateral dependent impaired loans	$	-	$	-	$	4,608	$	4,608

Estimated Fair Values Of Financial Instruments

	September 30, 2022				December 31, 2021
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
		(in thousands)				(in thousands)
Financial assets:
Level 1:
Cash and cash equivalents	$	21,207	$	21,207	$	244,785	$	244,785
Level 2:
Available for sale securities		369,141		369,141		305,959		305,959
FHLB and FRB stock		6,730		N/A		6,084		N/A
Level 3:
Held to maturity securities		7,572		7,413		3,165		3,179
Loans, net		1,607,827		1,518,516		1,553,467		1,573,420
Financial liabilities:
Level 1:
Demand deposits	$	558,805	$	558,805	$	492,864	$	492,864
NOW deposits		263,648		263,648		259,908		259,908
Savings deposits		913,383		913,383		1,019,925		1,019,925
Level 2:
Securities sold under agreement to
repurchase		9,812		9,812		4,112		4,112
Other borrowed funds		42,594		41,902		32,879		32,990
Subordinated debt		31,050		30,906		30,974		32,111
Level 3:
Time deposits		137,910		135,710		164,340		164,574

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2022

Segment Information [Abstract]

Schedule Of Business Segments

	Three months ended September 30, 2022
		Banking		Insurance Agency
		Activities		Activities		Total
		(in thousands)
Net interest income	$	19,188	$	-	$	19,188
Provision for loan losses		1,328		-		1,328
Net interest income after
provision for loan losses		17,860		-		17,860
Insurance service and fees		134		3,249		3,383
Other non-interest income		2,384		-		2,384
Amortization expense		5		95		100
Other non-interest expense		13,750		1,941		15,691
Income before income taxes		6,623		1,213		7,836
Income tax provision		1,658		314		1,972
Net income	$	4,965	$	899	$	5,864

	Three months ended September 30, 2021
		Banking		Insurance Agency
		Activities		Activities		Total
		(in thousands)
Net interest income (expense)	$	18,165	$	(2)	$	18,163
Provision (credit) for loan losses		(1,459)		-		(1,459)
Net interest income (expense) after
provision for loan losses		19,624		(2)		19,622
Insurance service and fees		141		3,050		3,191
Other non-interest income		1,966		-		1,966
Amortization expense		6		129		135
Other non-interest expense		13,382		1,876		15,258
Income before income taxes		8,343		1,043		9,386
Income tax provision		2,135		272		2,407
Net income	$	6,208	$	771	$	6,979

‎

	Nine months ended September 30, 2022
		Banking		Insurance Agency
		Activities		Activities		Total
		(in thousands)
Net interest income	$	53,741	$	-	$	53,741
Provision for loan losses		1,816		-		1,816
Net interest income after
provision for loan losses		51,925		-		51,925
Insurance service and fees		442		7,807		8,249
Other non-interest income		6,561		-		6,561
Amortization expense		15		285		300
Other non-interest expense		39,137		5,598		44,735
Income before income taxes		19,776		1,924		21,700
Income tax provision		4,855		499		5,354
Net income	$	14,921	$	1,425	$	16,346

	Nine months ended September 30, 2021
		Banking		Insurance Agency
		Activities		Activities		Total
		(in thousands)
Net interest income (expense)	$	53,118	$	(8)	$	53,110
Provision (credit) for loan losses		(1,906)		-		(1,906)
Net interest income (expense) after
provision for loan losses		55,024		(8)		55,016
Insurance service and fees		456		7,894		8,350
Other non-interest income		5,787		4		5,791
Amortization expense		16		389		405
Other non-interest expense		38,603		5,926		44,529
Income before income taxes		22,648		1,575		24,223
Income tax provision		5,669		410		6,079
Net income	$	16,979	$	1,165	$	18,144

‎

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Contingent Liabilities And Commitments (Tables)

9 Months Ended

Sep. 30, 2022

Contingent Liabilities And Commitments [Abstract]

Summary Of Commitments And Contingent Liabilities

	September 30,		December 31,
	2022		2021
	(in thousands)
Commitments to extend credit	$	397,799	$	394,953
Standby letters of credit		10,657		4,636
Total	$	408,456	$	399,589

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Organization And Summary Of Significant Accounting Policies (Narrative) (Details)	9 Months Ended
	Sep. 30, 2022 entity
Organization And Summary Of Significant Accounting Policies [Abstract]
Number of subsidiaries	2

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Securities (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Schedule of Available-for-sale Securities [Line Items]
Available for sale securities pledged as collateral	$ 244,000,000		$ 244,000,000		$ 207,000,000
Gross realized gains (losses) from sales of investment securities	$ 0	$ 0	0	$ 0
Other-than-temporary impairment charges			$ 0		$ 0
Minimum [Member] | Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Contractual maturities duration	10 years		10 years

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Securities (Schedule Of Amortized Cost And Approximate Fair Value Of Securities) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Schedule of Available-for-sale Securities [Line Items]
Total securities designated as available for sale, Amortized Cost	$ 433,206	$ 310,228
Available for Sale, Unrealized Gains	4	1,112
Available for Sale, Unrealized Losses	(64,069)	(5,381)
Available for Sale, Fair Value	369,141	305,959
Held to Maturity, Amortized Cost	7,572	3,165
Held to Maturity, Unrealized Gains		17
Held to Maturity, Unrealized Losses	(159)	(3)
Held to Maturity, Fair Value	7,413	3,179
US Treasuries And Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities designated as available for sale, Amortized Cost	166,351	99,005
Available for Sale, Unrealized Gains	2	199
Available for Sale, Unrealized Losses	(25,289)	(2,386)
Available for Sale, Fair Value	141,064	96,818
States and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities designated as available for sale, Amortized Cost	23,573	6,150
Available for Sale, Unrealized Gains	2	96
Available for Sale, Unrealized Losses	(1,721)
Available for Sale, Fair Value	21,854	6,246
Held to Maturity, Amortized Cost	7,572	3,165
Held to Maturity, Unrealized Gains		17
Held to Maturity, Unrealized Losses	(159)	(3)
Held to Maturity, Fair Value	7,413	3,179
Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities designated as available for sale, Amortized Cost	189,924	105,155
Available for Sale, Unrealized Gains	4	295
Available for Sale, Unrealized Losses	(27,010)	(2,386)
Available for Sale, Fair Value	162,918	103,064
Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities designated as available for sale, Amortized Cost	243,282	205,073
Available for Sale, Unrealized Gains		817
Available for Sale, Unrealized Losses	(37,059)	(2,995)
Available for Sale, Fair Value	206,223	202,895
FNMA [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities designated as available for sale, Amortized Cost	76,916	64,056
Available for Sale, Unrealized Gains		222
Available for Sale, Unrealized Losses	(13,272)	(1,068)
Available for Sale, Fair Value	63,644	63,210
FHLMC [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities designated as available for sale, Amortized Cost	47,544	38,796
Available for Sale, Unrealized Gains		62
Available for Sale, Unrealized Losses	(7,160)	(424)
Available for Sale, Fair Value	40,384	38,434
GNMA [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities designated as available for sale, Amortized Cost	40,741	31,814
Available for Sale, Unrealized Gains		15
Available for Sale, Unrealized Losses	(6,019)	(615)
Available for Sale, Fair Value	34,722	31,214
SBA [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities designated as available for sale, Amortized Cost	23,044	17,919
Available for Sale, Unrealized Gains		343
Available for Sale, Unrealized Losses	(2,397)	(54)
Available for Sale, Fair Value	20,647	18,208
CMO [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities designated as available for sale, Amortized Cost	55,037	52,488
Available for Sale, Unrealized Gains		175
Available for Sale, Unrealized Losses	(8,211)	(834)
Available for Sale, Fair Value	$ 46,826	$ 51,829

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Securities (Scheduled Maturities Of Debt And Mortgage-Backed Securities) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Schedule of Available-for-sale Securities [Line Items]
Debt securities available for sale, Due in one year or less, Amortized cost	$ 6,839
Debt securities available for sale, Due after one year through five years, Amortized cost	79,801
Debt securities available for sale, Due after five years through ten years, Amortized cost	74,294
Debt securities available for sale, Due after ten years, Amortized cost	28,990
Total securities designated as available for sale, Amortized Cost	189,924
Total securities designated as available for sale, Amortized Cost	433,206	$ 310,228
Debt securities available for sale, Due in one year or less, Estimated fair value	6,769
Debt securities available for sale, Due after one year through five years, Estimated fair value	73,585
Debt securities available for sale, Due after five years through ten years, Estimated fair value	62,431
Debt securities available for sale, Due after ten years, Estimated fair value	20,133
Debt securities available for sale, Estimated fair value	162,918
$159,157 at December 31, 2021)	369,141	305,959
Debt securities held to maturity, Due in one year or less, Amortized cost	6,665
Debt securities held to maturity, Due after one year through five years, Amortized cost	495
Debt securities held to maturity, Due after five years through ten years, Amortized cost	412
Held to Maturity, Amortized Cost	7,572	3,165
Debt securities held to maturity, Due in one year or less, Estimated fair value	6,615
Debt securities held to maturity, Due after one year through five years, Estimated fair value	456
Debt securities held to maturity, Due after five years through ten years, Estimated fair value	342
Held to maturity, Estimated fair value	7,413	3,179
Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities designated as available for sale, Amortized Cost	189,924	105,155
$159,157 at December 31, 2021)	162,918	103,064
Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Mortgage-backed securities available for sale, Amortized cost	243,282
Total securities designated as available for sale, Amortized Cost	243,282	205,073
Mortgage-backed securities available for sale, Estimated fair value	206,223
$159,157 at December 31, 2021)	$ 206,223	$ 202,895

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Securities (Unrealized Losses On Securities) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Schedule of Available-for-sale Securities [Line Items]
Total temporarily impaired securities, Less than 12 months, Fair Value	$ 242,858	$ 207,411
Total temporarily impaired securities, 12 months or longer, Fair Value	131,512	31,891
Total temporarily impaired securities, Total, Fair Value	374,370	239,302
Total temporarily impaired securities, Less than 12 months, Unrealized Losses	(29,039)	(3,686)
Total temporarily impaired securities, 12 months or longer, Unrealized Losses	(35,189)	(1,698)
Total temporarily impaired securities, Total, Unrealized Losses	(64,228)	(5,384)
US Treasuries And Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for Sale, Less than 12 months, Fair Value	91,283	50,381
Available for Sale, 12 months or longer, Fair Value	48,781	27,488
Available for Sale, Total, Fair Value	140,064	77,869
Available for Sale, Less than 12 months, Unrealized Losses	(9,992)	(884)
Available for Sale, 12 months or longer, Unrealized Losses	(15,297)	(1,502)
Available for Sale, Total, Unrealized Losses	(25,289)	(2,386)
States and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for Sale, Less than 12 months, Fair Value	20,748
Available for Sale, Total, Fair Value	20,748
Available for Sale, Less than 12 months, Unrealized Losses	(1,721)
Available for Sale, Total, Unrealized Losses	(1,721)
Held To Maturity, Less than 12 months, Fair Value	7,335	1,782
Held To Maturity, 12 months or longer, Fair Value	78
Held To Maturity, Total, Fair Value	7,413	1,782
Held To Maturity, Less than 12 months, Unrealized Losses	(149)	(3)
Held To Maturity, 12 months or longer, Unrealized Losses	(10)
Held To Maturity, Total, Unrealized Losses	(159)	(3)
Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for Sale, Less than 12 months, Fair Value	112,031	50,381
Available for Sale, 12 months or longer, Fair Value	48,781	27,488
Available for Sale, Total, Fair Value	160,812	77,869
Available for Sale, Less than 12 months, Unrealized Losses	(11,713)	(884)
Available for Sale, 12 months or longer, Unrealized Losses	(15,297)	(1,502)
Available for Sale, Total, Unrealized Losses	(27,010)	(2,386)
Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for Sale, Less than 12 months, Fair Value	123,492	155,248
Available for Sale, 12 months or longer, Fair Value	82,653	4,403
Available for Sale, Total, Fair Value	206,145	159,651
Available for Sale, Less than 12 months, Unrealized Losses	(17,177)	(2,799)
Available for Sale, 12 months or longer, Unrealized Losses	(19,882)	(196)
Available for Sale, Total, Unrealized Losses	(37,059)	(2,995)
FNMA [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for Sale, Less than 12 months, Fair Value	31,695	48,008
Available for Sale, 12 months or longer, Fair Value	31,889	2,941
Available for Sale, Total, Fair Value	63,584	50,949
Available for Sale, Less than 12 months, Unrealized Losses	(5,178)	(903)
Available for Sale, 12 months or longer, Unrealized Losses	(8,094)	(165)
Available for Sale, Total, Unrealized Losses	(13,272)	(1,068)
FHLMC [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for Sale, Less than 12 months, Fair Value	24,908	35,851
Available for Sale, 12 months or longer, Fair Value	15,458	76
Available for Sale, Total, Fair Value	40,366	35,927
Available for Sale, Less than 12 months, Unrealized Losses	(3,503)	(423)
Available for Sale, 12 months or longer, Unrealized Losses	(3,657)	(1)
Available for Sale, Total, Unrealized Losses	(7,160)	(424)
GNMA [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for Sale, Less than 12 months, Fair Value	20,125	30,252
Available for Sale, 12 months or longer, Fair Value	14,597	143
Available for Sale, Total, Fair Value	34,722	30,395
Available for Sale, Less than 12 months, Unrealized Losses	(2,675)	(615)
Available for Sale, 12 months or longer, Unrealized Losses	(3,344)
Available for Sale, Total, Unrealized Losses	(6,019)	(615)
SBA [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for Sale, Less than 12 months, Fair Value	17,478	2,824
Available for Sale, 12 months or longer, Fair Value	3,169	1,218
Available for Sale, Total, Fair Value	20,647	4,042
Available for Sale, Less than 12 months, Unrealized Losses	(1,966)	(25)
Available for Sale, 12 months or longer, Unrealized Losses	(431)	(29)
Available for Sale, Total, Unrealized Losses	(2,397)	(54)
CMO [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for Sale, Less than 12 months, Fair Value	29,286	38,313
Available for Sale, 12 months or longer, Fair Value	17,540	25
Available for Sale, Total, Fair Value	46,826	38,338
Available for Sale, Less than 12 months, Unrealized Losses	(3,855)	(833)
Available for Sale, 12 months or longer, Unrealized Losses	(4,356)	(1)
Available for Sale, Total, Unrealized Losses	$ (8,211)	$ (834)

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Loans And The Allowance For Loan Losses (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding principal balance	$ 800,000		$ 800,000		$ 800,000
Acquired credit-impaired loans	700,000		700,000
Valuation allowances, acquired credit-impaired loans	0		0		0
Balance	1,585,151,000		1,585,151,000		1,523,498,000
Total criticized assets increase	89,000,000		$ 89,000,000		111,000,000
Period of timely payments before reversion to accruing status			6 months
Residential Mortgages [Member] | FSB [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan servicing portfolio principal balance	61,000,000		$ 61,000,000
Commercial And Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance	229,785,000		229,785,000		229,724,000
Consumer And Other Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance	414,000		414,000		706,000
Total Real Estate Loans [Member] | Residential Mortgages [Member] | Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage loans sold			4,800,000
Loan servicing portfolio principal balance	120,000,000		120,000,000		131,000,000
Mortgage servicing rights	1,200,000		1,200,000		900,000
Mortgage loans held-for-sale	0		0		100,000
Balance	428,009,000		428,009,000		402,992,000
Total Real Estate Loans [Member] | Residential Mortgages [Member] | FHLMC Loans [Member] | Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage loans sold	0	$ 0	0	$ 0
Total Real Estate Loans [Member] | Residential Mortgages [Member] | FNMA Loans [Member] | Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage loans sold	1,300,000			$ 0
Loan servicing portfolio principal balance	59,000,000		59,000,000
Total Real Estate Loans [Member] | Commercial Real Estate Mortgages [Member] | Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance	754,993,000		754,993,000		711,481,000
Total Real Estate Loans [Member] | FHLBNY [Member] | Residential Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance	508,000,000		508,000,000		$ 619,000,000
Hotel Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Hotel loan portfolio	$ 38,000,000		$ 38,000,000
Total criticized assets increase						$ 81,000,000

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Loans And The Allowance For Loan Losses (Schedule Of Loan Portfolio Composition) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans before deferred loan origination costs	$ 1,626,991	$ 1,572,976
Unaccreted yield adjustments	(534)	(1,071)
Total gross loans	1,626,457	1,571,905
Allowance for loan losses	(18,630)	(18,438)
Loans, net	1,607,827	1,553,467
Commercial And Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans before deferred loan origination costs	238,093	237,077
Consumer And Other Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans before deferred loan origination costs	427	719
Total Real Estate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans before deferred loan origination costs	1,626,991	1,572,976
Unaccreted yield adjustments	(500)	(1,100)
Total Real Estate Loans [Member] | Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans before deferred loan origination costs	1,388,471	1,335,180
Total Real Estate Loans [Member] | Residential Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans before deferred loan origination costs	436,238	416,169
Total Real Estate Loans [Member] | Residential Mortgages [Member] | Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans before deferred loan origination costs	433,102	411,060
Total Real Estate Loans [Member] | Residential Mortgages [Member] | Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans before deferred loan origination costs	3,136	5,109
Total Real Estate Loans [Member] | Commercial Real Estate Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans before deferred loan origination costs	868,899	837,773
Total Real Estate Loans [Member] | Commercial Real Estate Mortgages [Member] | Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans before deferred loan origination costs	765,136	739,761
Total Real Estate Loans [Member] | Commercial Real Estate Mortgages [Member] | Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans before deferred loan origination costs	103,763	98,012
Total Real Estate Loans [Member] | Home Equity Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans before deferred loan origination costs	83,334	81,238
Total Real Estate Loans [Member] | Home Equity Loans [Member] | Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans before deferred loan origination costs	83,334	81,238
Total Real Estate Loans [Member] | Commercial And Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans before deferred loan origination costs	238,093	237,077
Total Real Estate Loans [Member] | Consumer And Other Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans before deferred loan origination costs	$ 427	$ 719

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Loans And The Allowance For Loan Losses (Data, At Class Level, Of Credit Quality Indicators Of Certain Loans) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	$ 1,626,991	$ 1,572,976
Total Real Estate Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	1,626,991	1,572,976
Total Real Estate Loans [Member] | Mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	1,388,471	1,335,180
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	868,899	837,773
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member] | Corporate Credit Exposure—By Credit Rating, Acceptable Or Better [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	612,078	545,370
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member] | Corporate Credit Exposure—By Credit Rating, Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	184,649	201,610
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member] | Corporate Credit Exposure—By Credit Rating, Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	28,396	40,264
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member] | Corporate Credit Exposure—By Credit Rating, Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	43,776	50,529
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member] | Corporate Credit Exposure—By Credit Rating, Doubtful/Loss [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	103,763	98,012
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member] | Construction [Member] | Corporate Credit Exposure—By Credit Rating, Acceptable Or Better [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	64,746	65,211
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member] | Construction [Member] | Corporate Credit Exposure—By Credit Rating, Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	19,505	19,108
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member] | Construction [Member] | Corporate Credit Exposure—By Credit Rating, Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	6,943	7,045
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member] | Construction [Member] | Corporate Credit Exposure—By Credit Rating, Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	12,569	6,648
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member] | Construction [Member] | Corporate Credit Exposure—By Credit Rating, Doubtful/Loss [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member] | Mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	765,136	739,761
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member] | Mortgages [Member] | Corporate Credit Exposure—By Credit Rating, Acceptable Or Better [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	547,332	480,159
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member] | Mortgages [Member] | Corporate Credit Exposure—By Credit Rating, Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	165,144	182,502
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member] | Mortgages [Member] | Corporate Credit Exposure—By Credit Rating, Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	21,453	33,219
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member] | Mortgages [Member] | Corporate Credit Exposure—By Credit Rating, Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	31,207	43,881
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member] | Mortgages [Member] | Corporate Credit Exposure—By Credit Rating, Doubtful/Loss [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans
Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	238,093	237,077
Commercial And Industrial [Member] | Corporate Credit Exposure—By Credit Rating, Acceptable Or Better [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	175,101	152,675
Commercial And Industrial [Member] | Corporate Credit Exposure—By Credit Rating, Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	46,557	64,406
Commercial And Industrial [Member] | Corporate Credit Exposure—By Credit Rating, Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	9,555	10,200
Commercial And Industrial [Member] | Corporate Credit Exposure—By Credit Rating, Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	6,880	9,796
Commercial And Industrial [Member] | Corporate Credit Exposure—By Credit Rating, Doubtful/Loss [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans
Commercial And Industrial [Member] | Total Real Estate Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	$ 238,093	$ 237,077

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Loans And The Allowance For Loan Losses (Recorded Investment In Loans Past Due) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	$ 1,585,151	$ 1,523,498
Non-accruing Loans	25,123	17,387
Total Balance	1,626,991	1,572,976
Unaccreted yield adjustments	(534)	(1,071)
30-59 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	13,235	22,646
60-89 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	2,643	8,417
90+ Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	839	1,028
Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	229,785	229,724
Non-accruing Loans	2,839	4,901
Total Balance	238,093	237,077
Commercial And Industrial [Member] | 30-59 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	5,375	1,336
Commercial And Industrial [Member] | 60-89 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	30	568
Commercial And Industrial [Member] | 90+ Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	64	548
Consumer And Other Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	414	706
Total Balance	427	719
Consumer And Other Loans [Member] | 30-59 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	8	9
Consumer And Other Loans [Member] | 60-89 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	4	4
Consumer And Other Loans [Member] | 90+ Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	1
Total Real Estate Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Balance	1,626,991	1,572,976
Unaccreted yield adjustments	(500)	(1,100)
Total Real Estate Loans [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Balance	238,093	237,077
Total Real Estate Loans [Member] | Residential Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Balance	436,238	416,169
Total Real Estate Loans [Member] | Commercial Real Estate Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Balance	868,899	837,773
Total Real Estate Loans [Member] | Home Equity Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	81,512	79,644
Non-accruing Loans	518	758
Total Balance	83,334	81,238
Total Real Estate Loans [Member] | Home Equity Loans [Member] | 30-59 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	1,144	627
Total Real Estate Loans [Member] | Home Equity Loans [Member] | 60-89 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	160	209
Total Real Estate Loans [Member] | Consumer And Other Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Balance	427	719
Mortgages [Member] | Total Real Estate Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Balance	1,388,471	1,335,180
Mortgages [Member] | Total Real Estate Loans [Member] | Residential Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	428,009	402,992
Non-accruing Loans	3,722	3,039
Total Balance	433,102	411,060
Mortgages [Member] | Total Real Estate Loans [Member] | Residential Mortgages [Member] | 30-59 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance		3,466
Mortgages [Member] | Total Real Estate Loans [Member] | Residential Mortgages [Member] | 60-89 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	1,371	1,563
Mortgages [Member] | Total Real Estate Loans [Member] | Commercial Real Estate Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	754,993	711,481
Non-accruing Loans	9,190	5,756
Total Balance	765,136	739,761
Mortgages [Member] | Total Real Estate Loans [Member] | Commercial Real Estate Mortgages [Member] | 30-59 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	750	16,451
Mortgages [Member] | Total Real Estate Loans [Member] | Commercial Real Estate Mortgages [Member] | 60-89 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	203	6,073
Mortgages [Member] | Total Real Estate Loans [Member] | Home Equity Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Balance	83,334	81,238
Construction [Member] | Total Real Estate Loans [Member] | Residential Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	3,136	5,109
Total Balance	3,136	5,109
Construction [Member] | Total Real Estate Loans [Member] | Commercial Real Estate Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	87,302	93,842
Non-accruing Loans	8,854	2,933
Total Balance	103,763	98,012
Construction [Member] | Total Real Estate Loans [Member] | Commercial Real Estate Mortgages [Member] | 30-59 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	5,958	757
Construction [Member] | Total Real Estate Loans [Member] | Commercial Real Estate Mortgages [Member] | 60-89 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	875
Construction [Member] | Total Real Estate Loans [Member] | Commercial Real Estate Mortgages [Member] | 90+ Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Balance	$ 774	$ 480

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Loans And The Allowance For Loan Losses (Schedule Of Allowance For Loan Losses According To Portfolio Segment) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses: Provision(Credit)	$ 1,328	$ (1,459)	$ 1,816	$ (1,906)
Total	1,626,991		1,626,991		$ 1,572,976
Unaccreted yield adjustments	(534)		(534)		(1,071)
Total Real Estate Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses: Beginning balance	18,819	19,942	18,438	20,415
Allowance for loan losses: Charge-offs	(1,560)	(453)	(1,713)	(544)
Allowance for loan losses: Recoveries	43	21	89	86
Allowance for loan losses: Provision(Credit)	1,328	(1,459)	1,816	(1,906)
Allowance for loan losses: Ending balance	18,630	18,051	18,630	18,051
Allowance for loan losses: Individually evaluated for impairment	109		109		495
Allowance for loan losses: Collectively evaluated for impairment	18,521		18,521		17,943
Allowance for loan losses: Total	18,630	18,051	18,630	18,051	18,438
Loans: Loans acquired with deteriorated credit quality	703		703		803
Loans: Individually evaluated for impairment	28,038		28,038		20,787
Loans: Collectively evaluated for impairment	1,598,250		1,598,250		1,551,386
Total	1,626,991		1,626,991		1,572,976
Unaccreted yield adjustments	(500)		(500)		(1,100)
Commercial And Industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	238,093		238,093		237,077
Commercial And Industrial [Member] | Total Real Estate Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses: Beginning balance	3,714	3,790	3,309	4,882
Allowance for loan losses: Charge-offs	(1,515)	(424)	(1,546)	(424)
Allowance for loan losses: Recoveries	40	15	76	58
Allowance for loan losses: Provision(Credit)	1,805	(228)	2,205	(1,363)
Allowance for loan losses: Ending balance	4,044	3,153	4,044	3,153
Allowance for loan losses: Individually evaluated for impairment	2		2		100
Allowance for loan losses: Collectively evaluated for impairment	4,042		4,042		3,209
Allowance for loan losses: Total	4,044	3,153	4,044	3,153	3,309
Loans: Individually evaluated for impairment	2,929		2,929		5,028
Loans: Collectively evaluated for impairment	235,164		235,164		232,049
Total	238,093		238,093		237,077
Commercial Real Estate Mortgages [Member] | Total Real Estate Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses: Beginning balance	12,305	13,925	12,367	13,249
Allowance for loan losses: Provision(Credit)	(603)	(1,555)	(665)	(879)
Allowance for loan losses: Ending balance	11,702	12,370	11,702	12,370
Allowance for loan losses: Individually evaluated for impairment	2		2		345
Allowance for loan losses: Collectively evaluated for impairment	11,700		11,700		12,022
Allowance for loan losses: Total	11,702	12,370	11,702	12,370	12,367
Loans: Individually evaluated for impairment	20,839		20,839		11,925
Loans: Collectively evaluated for impairment	848,060		848,060		825,848
Total	868,899		868,899		837,773
Consumer And Other Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	427		427		719
Consumer And Other Loans [Member] | Total Real Estate Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses: Beginning balance	70	58	54	45
Allowance for loan losses: Charge-offs	(45)	(29)	(112)	(120)
Allowance for loan losses: Recoveries	3	4	13	26
Allowance for loan losses: Provision(Credit)	13	(12)	86	70
Allowance for loan losses: Ending balance	41	21	41	21
Allowance for loan losses: Collectively evaluated for impairment	41		41		54
Allowance for loan losses: Total	41	21	41	21	54
Loans: Collectively evaluated for impairment	427		427		719
Total	427		427		719
Residential Mortgages [Member] | Total Real Estate Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses: Beginning balance	2,164	1,694	2,127	1,658
Allowance for loan losses: Charge-offs			(55)
Allowance for loan losses: Provision(Credit)	47	259	139	295
Allowance for loan losses: Ending balance	2,211	1,953	2,211	1,953
Allowance for loan losses: Individually evaluated for impairment	66		66		9
Allowance for loan losses: Collectively evaluated for impairment	2,145		2,145		2,118
Allowance for loan losses: Total	2,211	1,953	2,211	1,953	2,127
Loans: Loans acquired with deteriorated credit quality	703		703		803
Loans: Individually evaluated for impairment	3,367		3,367		2,598
Loans: Collectively evaluated for impairment	432,168		432,168		412,768
Total	436,238		436,238		416,169
Home Equity Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses: Beginning balance				581
Allowance for loan losses: Recoveries				2
Allowance for loan losses: Provision(Credit)				(29)
Allowance for loan losses: Ending balance		554		554
Allowance for loan losses: Total		554		554
Home Equity Loans [Member] | Total Real Estate Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses: Beginning balance	566	475	581
Allowance for loan losses: Recoveries		2
Allowance for loan losses: Provision(Credit)	66	77	51
Allowance for loan losses: Ending balance	632	554	632	554
Allowance for loan losses: Individually evaluated for impairment	39		39		41
Allowance for loan losses: Collectively evaluated for impairment	593		593		540
Allowance for loan losses: Total	632	$ 554	632	$ 554	581
Loans: Individually evaluated for impairment	903		903		1,236
Loans: Collectively evaluated for impairment	82,431		82,431		80,002
Total	$ 83,334		$ 83,334		$ 81,238

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Loans And The Allowance For Loan Losses (Data, At Class Level, Of Impaired Loans) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Financing Receivable, Impaired [Line Items]
Impaired Loans, Recorded Investment, With no related allowance recorded	$ 28,242		$ 28,242		$ 19,514
Impaired Loans, Recorded Investment, With a related allowance recorded	458		458		2,032
Impaired Loans, Recorded Investment, Total	28,700		28,700		21,546
Impaired Loans, Unpaid Principal Balance, With no related allowance recorded	29,976		29,976		21,527
Impaired Loans, Unpaid Principal Balance, With a related allowance recorded	511		511		2,599
Impaired Loans, Unpaid Principal Balance, Total	30,487		30,487		24,126
Impaired Loans, Related Allowance	109		109		495
Impaired loans, Average Recorded Investment, Total	26,231	$ 29,464	23,651	$ 30,401
Impaired Loans, Interest Income Recognized, Total	12	173	215	288
Commercial And Industrial [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, Recorded Investment, With no related allowance recorded	2,926		2,926		4,874
Impaired Loans, Recorded Investment, With a related allowance recorded	3		3		154
Impaired Loans, Recorded Investment, Total	2,929		2,929		5,028
Impaired Loans, Unpaid Principal Balance, With no related allowance recorded	3,551		3,551		5,712
Impaired Loans, Unpaid Principal Balance, With a related allowance recorded	3		3		158
Impaired Loans, Unpaid Principal Balance, Total	3,554		3,554		5,870
Impaired Loans, Related Allowance	2		2		100
Impaired loans, Average Recorded Investment, Total	3,681	5,755	4,251	5,657
Impaired Loans, Interest Income Recognized, Total	2		6	29
Residential Mortgages [Member] | Mortgages [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, Recorded Investment, With no related allowance recorded	3,784		3,784		3,297
Impaired Loans, Recorded Investment, With a related allowance recorded	245		245		60
Impaired Loans, Recorded Investment, Total	4,029		4,029		3,357
Impaired Loans, Unpaid Principal Balance, With no related allowance recorded	4,253		4,253		3,654
Impaired Loans, Unpaid Principal Balance, With a related allowance recorded	245		245		60
Impaired Loans, Unpaid Principal Balance, Total	4,498		4,498		3,714
Impaired Loans, Related Allowance	66		66		9
Impaired loans, Average Recorded Investment, Total	3,972	3,894	3,735	4,756
Impaired Loans, Interest Income Recognized, Total		5	12	22
Commercial Real Estate Mortgages [Member] | Mortgages [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, Recorded Investment, With no related allowance recorded	11,814		11,814		8,821
Impaired Loans, Recorded Investment, With a related allowance recorded	171		171		171
Impaired Loans, Recorded Investment, Total	11,985		11,985		8,992
Impaired Loans, Unpaid Principal Balance, With no related allowance recorded	12,150		12,150		9,338
Impaired Loans, Unpaid Principal Balance, With a related allowance recorded	197		197		717
Impaired Loans, Unpaid Principal Balance, Total	12,347		12,347		10,055
Impaired Loans, Related Allowance	2		2		16
Impaired loans, Average Recorded Investment, Total	12,533	15,044	10,785	15,014
Impaired Loans, Interest Income Recognized, Total	6	165	183	228
Commercial Real Estate Mortgages [Member] | Construction [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, Recorded Investment, With no related allowance recorded	8,854		8,854		1,395
Impaired Loans, Recorded Investment, With a related allowance recorded					1,538
Impaired Loans, Recorded Investment, Total	8,854		8,854		2,933
Impaired Loans, Unpaid Principal Balance, With no related allowance recorded	8,998		8,998		1,499
Impaired Loans, Unpaid Principal Balance, With a related allowance recorded					1,555
Impaired Loans, Unpaid Principal Balance, Total	8,998		8,998		3,054
Impaired Loans, Related Allowance					329
Impaired loans, Average Recorded Investment, Total	5,113	3,331	3,881	3,305
Impaired Loans, Interest Income Recognized, Total				2
Home Equity Loans [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, Recorded Investment, With no related allowance recorded	864		864		1,127
Impaired Loans, Recorded Investment, With a related allowance recorded	39		39		109
Impaired Loans, Recorded Investment, Total	903		903		1,236
Impaired Loans, Unpaid Principal Balance, With no related allowance recorded	1,024		1,024		1,324
Impaired Loans, Unpaid Principal Balance, With a related allowance recorded	66		66		109
Impaired Loans, Unpaid Principal Balance, Total	1,090		1,090		1,433
Impaired Loans, Related Allowance	39		39		$ 41
Impaired loans, Average Recorded Investment, Total	932	1,440	999	1,669
Impaired Loans, Interest Income Recognized, Total	$ 4	$ 3	$ 14	$ 7

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Loans And The Allowance For Loan Losses (Loans Classified As Troubled Debt Restructurings) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financing Receivable, Modifications [Line Items]
Total	$ 5,328	$ 5,718
Commercial And Industrial [Member]
Financing Receivable, Modifications [Line Items]
Total	1,254	1,003
Nonaccruing [Member]
Financing Receivable, Modifications [Line Items]
Total	1,710	1,515
Nonaccruing [Member] | Commercial And Industrial [Member]
Financing Receivable, Modifications [Line Items]
Total	1,164	876
Accruing [Member]
Financing Receivable, Modifications [Line Items]
Total	3,618	4,203
Accruing [Member] | Commercial And Industrial [Member]
Financing Receivable, Modifications [Line Items]
Total	90	127
Total Real Estate Loans [Member] | Home Equity Loans [Member]
Financing Receivable, Modifications [Line Items]
Total	390	490
Total Real Estate Loans [Member] | Nonaccruing [Member] | Home Equity Loans [Member]
Financing Receivable, Modifications [Line Items]
Total	5	12
Total Real Estate Loans [Member] | Accruing [Member] | Home Equity Loans [Member]
Financing Receivable, Modifications [Line Items]
Total	385	478
Mortgages [Member] | Total Real Estate Loans [Member] | Residential Mortgages [Member]
Financing Receivable, Modifications [Line Items]
Total	889	989
Mortgages [Member] | Total Real Estate Loans [Member] | Commercial Real Estate Mortgages [Member]
Financing Receivable, Modifications [Line Items]
Total	2,795	3,236
Mortgages [Member] | Total Real Estate Loans [Member] | Nonaccruing [Member] | Residential Mortgages [Member]
Financing Receivable, Modifications [Line Items]
Total	541	627
Mortgages [Member] | Total Real Estate Loans [Member] | Accruing [Member] | Residential Mortgages [Member]
Financing Receivable, Modifications [Line Items]
Total	348	362
Mortgages [Member] | Total Real Estate Loans [Member] | Accruing [Member] | Commercial Real Estate Mortgages [Member]
Financing Receivable, Modifications [Line Items]
Total	$ 2,795	$ 3,236

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Loans And The Allowance For Loan Losses (TDR Activity By Type Of Concession Granted To Borrower) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($) contract
Commercial And Industrial [Member] | Extension Of Maturity [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	1
Pre-Modification Outstanding Recorded Investment	$ 461
Post-Modification Outstanding Recorded Investment	$ 461
Home Equity Loans [Member] | Extension Of Maturity And Interest Rate Reduction [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	1
Pre-Modification Outstanding Recorded Investment	$ 38
Post-Modification Outstanding Recorded Investment	$ 38

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Common Equity And Earnings Per Share Data (Narrative) (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Common Equity And Earnings Per Share Data [Abstract]
Weighted average number of shares outstanding, dilutive	36,646	57,705	42,572	52,128
Potentially anti-dilutive shares outstanding	54,680	39,390	55,847	80,614

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Other Comprehensive Income (Loss) (Schedule Of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	$ (34,299)	$ (2,735)	$ (5,671)	$ (719)
Net Change	(15,525)	(1,455)	(44,153)	(3,471)
Ending Balance	(49,824)	(4,190)	(49,824)	(4,190)
Net Unrealized Gain (Loss) On Investment Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(31,898)	230	(3,160)	2,397
Net Change	(15,581)	(1,530)	(44,319)	(3,697)
Ending Balance	(47,479)	(1,300)	(47,479)	(1,300)
Net Defined Benefit Pension Plan Adjustments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(2,401)	(2,965)	(2,511)	(3,116)
Net Change	56	75	166	226
Ending Balance	$ (2,345)	$ (2,890)	$ (2,345)	$ (2,890)

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Other Comprehensive Income (Loss) (Components Of Other Comprehensive Income) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Unrealized (loss) gain on investment securities:
Unrealized (loss) gain on investment securities, Before-Tax Amount	$ (21,016)	$ (2,066)	$ (59,796)	$ (4,995)
Unrealized (loss) gain on investment securities, Income Tax (Provision) Benefit	5,435	536	15,477	1,298
Unrealized (loss) gain on investment securities, Net-of-Tax Amount	(15,581)	(1,530)	(44,319)	(3,697)
Defined benefit pension plan adjustments:
Amortization of prior service cost, Before-Tax Amount	8	7	24	23
Amortization of prior service cost, Income Tax (Provision) Benefit	(2)	(2)	(8)	(7)
Amortization of prior service cost, Net-of-Tax Amount	6	5	16	16
Amortization of actuarial loss, Before-Tax Amount	68	95	203	285
Amortization of actuarial loss, Income Tax (Provision) Benefit	(18)	(25)	(53)	(75)
Amortization of actuarial loss, Net-of-Tax Amount	50	70	150	210
Net change, Before-Tax Amount	76	102	227	308
Net change, Income Tax (Provision) Benefit	(20)	(27)	(61)	(82)
Total	56	75	166	226
Other comprehensive (loss) income, Before-Tax Amount	(20,940)	(1,964)	(59,569)	(4,687)
Other comprehensive (loss) income, Income Tax (Provision) Benefit	5,415	509	15,416	1,216
OTHER COMPREHENSIVE (LOSS) INCOME , NET OF TAX:	$ (15,525)	$ (1,455)	$ (44,153)	$ (3,471)

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Net Periodic Benefit Costs (Schedule Of Net Periodic Benefit Cost) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Pension [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest cost	$ 44	$ 41	$ 133	$ 122
Expected return on plan assets	(88)	(89)	(264)	(266)
Amortization of the net loss	24	24	71	72
Net periodic (benefit) cost	(20)	(24)	(60)	(72)
Supplemental Executive Retirement Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	33	37	99	112
Interest cost	31	25	93	75
Amortization of prior service cost	8	7	24	23
Amortization of the net loss	44	71	132	213
Net periodic (benefit) cost	$ 116	$ 140	$ 348	$ 423

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Revenue Recognition Of Non-Interest Income (Schedule Of Disaggregation Of Insurance Service And Other Fees) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue [Line Items]
Total insurance service and other fees	$ 3,383	$ 3,191	$ 8,249	$ 8,350
Commercial Property And Casualty Insurance Commissions [Member]
Disaggregation of Revenue [Line Items]
Total insurance service and other fees	1,706	1,426	3,525	3,248
Personal Property And Casualty Insurance Commissions [Member]
Disaggregation of Revenue [Line Items]
Total insurance service and other fees	901	856	2,554	2,517
Employee Benefits Sales Commissions [Member]
Disaggregation of Revenue [Line Items]
Total insurance service and other fees	206	231	649	692
Profit Sharing And Contingent Revenue [Member]
Disaggregation of Revenue [Line Items]
Total insurance service and other fees	410	410	971	1,029
Wealth Management And Other Financial Services [Member]
Disaggregation of Revenue [Line Items]
Total insurance service and other fees	137	161	457	508
Insurance Claims Services Revenue [Member]
Disaggregation of Revenue [Line Items]
Total insurance service and other fees		77		236
Other Insurance-Related Revenue [Member]
Disaggregation of Revenue [Line Items]
Total insurance service and other fees	$ 23	$ 30	$ 93	$ 120

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Fair Value Measurement (Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans, allowance for loan loss	$ 109	$ 495
Consumer Loans [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Collateral dependent impaired loans, gross	1,200	5,000
Impaired loans, allowance for loan loss	$ 100	$ 400

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Fair Value Measurement (Financial Instruments Measured At Fair Value On Recurring Basis) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	$ 369,141	$ 305,959
Recurring [Member] | US Treasuries And Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	141,064	96,818
Recurring [Member] | US Treasuries And Government Agencies [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	141,064	96,818
Recurring [Member] | States and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	21,854	6,246
Recurring [Member] | States and Political Subdivisions [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	21,854	6,246
Recurring [Member] | Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	206,223	202,895
Recurring [Member] | Mortgage-Backed Securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	$ 206,223	$ 202,895

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Fair Value Measurement (Financial Instruments Measured At Fair Value On Nonrecurring Basis) (Details) - Nonrecurring [Member] - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Collateral dependent impaired loans	$ 1,146	$ 4,608
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Collateral dependent impaired loans	$ 1,146	$ 4,608

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Fair Value Measurement (Estimated Fair Values Of Financial Instruments) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	$ 369,141	$ 305,959
Held to maturity securities	7,413	3,179
Demand deposits	558,805	492,864
NOW deposits	263,648	259,908
Savings deposits	913,383	1,019,925
Time deposits	137,910	164,340
Carrying Amount [Member] | Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	21,207	244,785
Demand deposits	558,805	492,864
NOW deposits	263,648	259,908
Savings deposits	913,383	1,019,925
Carrying Amount [Member] | Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	369,141	305,959
FHLB and FRB stock	6,730	6,084
Securities sold under agreement to repurchase	9,812	4,112
Other borrowed funds	42,594	32,879
Subordinated debt	31,050	30,974
Carrying Amount [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Held to maturity securities	7,572	3,165
Loans, net	1,607,827	1,553,467
Time deposits	137,910	164,340
Fair Value [Member] | Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	21,207	244,785
Demand deposits	558,805	492,864
NOW deposits	263,648	259,908
Savings deposits	913,383	1,019,925
Fair Value [Member] | Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	369,141	305,959
Securities sold under agreement to repurchase	9,812	4,112
Other borrowed funds	41,902	32,990
Subordinated debt	30,906	32,111
Fair Value [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Held to maturity securities	7,413	3,179
Loans, net	1,518,516	1,573,420
Time deposits	$ 135,710	$ 164,574

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Segment Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) segment	Sep. 30, 2021 USD ($)
Number of primary business segments | segment			2
Net interest income (expense)	$ 19,188	$ 18,163	$ 53,741	$ 53,110
Provision (credit) for loan losses	1,328	(1,459)	1,816	(1,906)
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR LOAN LOSSES	17,860	19,622	51,925	55,016
Insurance service and fees	3,383	3,191	8,249	8,350
Other non-interest income	5,767	5,157	14,810	14,141
Amortization expense	100	135	300	405
Other non-interest expense	15,791	15,393	45,035	44,934
INCOME BEFORE INCOME TAXES	7,836	9,386	21,700	24,223
Income tax provision	1,972	2,407	5,354	6,079
NET INCOME	5,864	6,979	16,346	18,144
Operating Segments [Member]
Net interest income (expense)	19,188	18,163	53,741	53,110
Provision (credit) for loan losses	1,328	(1,459)	1,816	(1,906)
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR LOAN LOSSES	17,860	19,622	51,925	55,016
Insurance service and fees	3,383	3,191	8,249	8,350
Other non-interest income	2,384	1,966	6,561	5,791
Amortization expense	100	135	300	405
Other non-interest expense	15,691	15,258	44,735	44,529
INCOME BEFORE INCOME TAXES	7,836	9,386	21,700	24,223
Income tax provision	1,972	2,407	5,354	6,079
NET INCOME	5,864	6,979	16,346	18,144
Banking Activities [Member] | Operating Segments [Member]
Net interest income (expense)	19,188	18,165	53,741	53,118
Provision (credit) for loan losses	1,328	(1,459)	1,816	(1,906)
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR LOAN LOSSES	17,860	19,624	51,925	55,024
Insurance service and fees	134	141	442	456
Other non-interest income	2,384	1,966	6,561	5,787
Amortization expense	5	6	15	16
Other non-interest expense	13,750	13,382	39,137	38,603
INCOME BEFORE INCOME TAXES	6,623	8,343	19,776	22,648
Income tax provision	1,658	2,135	4,855	5,669
NET INCOME	4,965	6,208	14,921	16,979
Insurance Agency Activities [Member] | Operating Segments [Member]
Net interest income (expense)		(2)		(8)
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR LOAN LOSSES		(2)		(8)
Insurance service and fees	3,249	3,050	7,807	7,894
Other non-interest income				4
Amortization expense	95	129	285	389
Other non-interest expense	1,941	1,876	5,598	5,926
INCOME BEFORE INCOME TAXES	1,213	1,043	1,924	1,575
Income tax provision	314	272	499	410
NET INCOME	$ 899	$ 771	$ 1,425	$ 1,165

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Contingent Liabilities And Commitments (Narrative) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Contingent Liabilities And Commitments [Abstract]
Losses on commitments	$ 0	$ 0
Reserve for commitments	$ 0	$ 0

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Contingent Liabilities And Commitments (Summary Of Commitments And Contingent Liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Loss Contingencies [Line Items]
Commitments and contingent liabilities	$ 408,456	$ 399,589
Commitments To Extend Credit [Member]
Loss Contingencies [Line Items]
Commitments and contingent liabilities	397,799	394,953
Standby Letters Of Credit [Member]
Loss Contingencies [Line Items]
Commitments and contingent liabilities	$ 10,657	$ 4,636