Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 01, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-34292 | |
Entity Registrant Name | ORRSTOWN FINANCIAL SERVICES, INC. | |
Entity Incorporation, State or Country Code | PA | |
Entity Tax Identification Number | 23-2530374 | |
Entity Address, Address Line One | 77 East King Street | |
Entity Address, Address Line Two | P. O. Box 250 | |
Entity Address, City or Town | Shippensburg | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 17257 | |
City Area Code | (717) | |
Local Phone Number | 532-6114 | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | ORRF | |
Securities Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 11,206,452 | |
Entity Central Index Key | 0000826154 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and due from banks | $ 36,920 | $ 26,203 |
Interest-bearing deposits with banks | 274,495 | 99,055 |
Cash and cash equivalents | 311,415 | 125,258 |
Restricted investments in bank stocks | 7,051 | 10,563 |
Securities available for sale (amortized cost of $437,852 and $460,999 at September 30, 2021 and December 31, 2020, respectively) | 445,018 | 466,465 |
Loans held for sale, at fair value | 6,412 | 11,734 |
Loans | 1,939,764 | 1,979,690 |
Less: Allowance for loan losses | (19,965) | (20,151) |
Net loans | 1,919,799 | 1,959,539 |
Premises and equipment, net | 34,279 | 35,149 |
Cash surrender value of life insurance | 69,792 | 68,554 |
Goodwill | 18,724 | 18,724 |
Other intangible assets, net | 4,486 | 5,458 |
Accrued interest receivable | 8,015 | 8,927 |
Other assets | 45,191 | 40,201 |
Total assets | 2,870,182 | 2,750,572 |
Deposits: | ||
Noninterest-bearing | 545,323 | 456,778 |
Interest-bearing | 1,956,785 | 1,900,102 |
Total deposits | 2,502,108 | 2,356,880 |
Securities sold under agreements to repurchase | 27,595 | 19,466 |
FHLB advances and other borrowings | 2,003 | 58,045 |
Subordinated notes | 31,948 | 31,903 |
Other liabilities | 37,959 | 38,029 |
Total liabilities | 2,601,613 | 2,504,323 |
Shareholders’ Equity | ||
Preferred stock, value | 0 | 0 |
Common stock, value | 586 | 586 |
Additional paid - in capital | 189,168 | 189,066 |
Retained earnings | 74,122 | 54,099 |
Accumulated other comprehensive income | 5,661 | 3,346 |
Treasury stock— 43,865 and 55,729 shares, at cost at September 30, 2021 and December 31, 2020, respectively | (968) | (848) |
Total shareholders’ equity | 268,569 | 246,249 |
Total liabilities and shareholders’ equity | $ 2,870,182 | $ 2,750,572 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Securities available for sale amortized cost | $ 437,852 | $ 460,999 |
Preferred stock, par value (usd per share) | $ 1.25 | $ 1.25 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, stated value (usd per share) | $ 0.05205 | $ 0.05205 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 11,248,917 | 11,257,046 |
Common stock, shares outstanding (in shares) | 11,205,052 | 11,201,317 |
Treasury stock - common - shares (in shares) | 43,865 | 55,729 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Interest income | ||||
Loans | $ 19,890 | $ 21,645 | $ 62,724 | $ 63,605 |
Investment securities - taxable | 1,514 | 2,145 | 5,007 | 8,378 |
Investment securities - tax-exempt | 652 | 417 | 1,790 | 1,121 |
Short-term investments | 135 | 9 | 255 | 101 |
Total interest income | 22,191 | 24,216 | 69,776 | 73,205 |
Interest expense | ||||
Deposits | 937 | 2,483 | 3,410 | 10,147 |
Securities sold under agreements to repurchase | 8 | 20 | 25 | 72 |
FHLB advances and other borrowings | 123 | 394 | 458 | 1,604 |
Subordinated notes | 503 | 501 | 1,507 | 1,504 |
Total interest expense | 1,571 | 3,398 | 5,400 | 13,327 |
Net interest income | 20,620 | 20,818 | 64,376 | 59,878 |
Provision for loan losses | 365 | 2,200 | (10) | 5,025 |
Net interest income after provision for loan losses | 20,255 | 18,618 | 64,386 | 54,853 |
Noninterest income | ||||
Service charges on deposit accounts | 796 | 684 | 2,231 | 2,085 |
Interchange income | 1,030 | 900 | 3,049 | 2,507 |
Other service charges and fees | 197 | 168 | 527 | 473 |
Swap fee income | 67 | 95 | 135 | 527 |
Trust and investment management income | 1,930 | 1,713 | 5,862 | 5,049 |
Brokerage income | 987 | 751 | 2,708 | 2,069 |
Mortgage banking activities | 1,333 | 1,985 | 4,684 | 3,926 |
Gains on sale of portfolio loans | 0 | 0 | 0 | 2,803 |
Income from life insurance | 569 | 543 | 1,690 | 1,615 |
Investment securities gains (losses) | 479 | (13) | 635 | (44) |
Other income | 263 | 35 | 338 | 118 |
Total noninterest income | 7,651 | 6,861 | 21,859 | 21,128 |
Noninterest expenses | ||||
Salaries and employee benefits | 11,498 | 10,695 | 31,907 | 32,352 |
Occupancy | 1,154 | 1,231 | 3,492 | 3,480 |
Furniture and equipment | 1,220 | 1,203 | 3,800 | 3,569 |
Data processing | 990 | 958 | 3,041 | 2,620 |
Automated teller and interchange fees | 294 | 278 | 862 | 778 |
Advertising and bank promotions | 735 | 197 | 1,434 | 1,153 |
FDIC insurance | 218 | 230 | 570 | 491 |
Professional services | 562 | 603 | 1,862 | 2,340 |
Directors' compensation | 155 | 214 | 624 | 679 |
Taxes other than income | 16 | 453 | 929 | 904 |
Intangible asset amortization | 314 | 357 | 972 | 1,224 |
Branch consolidation expenses | 0 | 1,310 | 0 | 1,310 |
Insurance claim receivable recovery | 0 | 0 | 0 | (486) |
Other operating expenses | 1,879 | 1,536 | 4,358 | 5,586 |
Total noninterest expenses | 19,035 | 19,265 | 53,851 | 56,000 |
Income before income tax expense | 8,871 | 6,214 | 32,394 | 19,981 |
Income tax expense | 1,679 | 1,237 | 6,219 | 3,577 |
Net income | $ 7,192 | $ 4,977 | $ 26,175 | $ 16,404 |
Per share information: | ||||
Basic earnings per share (in usd per share) | $ 0.66 | $ 0.45 | $ 2.38 | $ 1.50 |
Diluted earnings per share (in usd per share) | 0.65 | 0.45 | 2.36 | 1.49 |
Dividends paid per share (in usd per share) | $ 0.19 | $ 0.17 | $ 0.55 | $ 0.51 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 7,192 | $ 4,977 | $ 26,175 | $ 16,404 |
Other comprehensive income (loss), net of tax: | ||||
Unrealized (losses) gains on securities available for sale arising during the period | (2,346) | 4,296 | 2,335 | 375 |
Reclassification adjustment for (gains) losses realized in net income | (479) | 13 | (635) | 44 |
Net unrealized (losses) gains on securities available for sale | (2,825) | 4,309 | 1,700 | 419 |
Tax effect | 593 | (904) | (357) | (87) |
Total other comprehensive (loss) income, net of tax and reclassification adjustments on securities available for sale | (2,232) | 3,405 | 1,343 | 332 |
Unrealized (losses) gains on interest rate swaps used in cash flow hedges | (183) | 208 | 473 | (1,893) |
Reclassification adjustment for losses realized in net income | 581 | 114 | 757 | 239 |
Net unrealized gains (losses) on interest rate swaps used in cash flow hedges | 398 | 322 | 1,230 | (1,654) |
Tax effect | (83) | (68) | (258) | 347 |
Total other comprehensive gains (losses), net of tax and reclassification adjustments on interest rate swaps used in cash flow hedges | 315 | 254 | 972 | (1,307) |
Total other comprehensive (loss) income, net of tax and reclassification adjustments | (1,917) | 3,659 | 2,315 | (975) |
Total comprehensive income | $ 5,275 | $ 8,636 | $ 28,490 | $ 15,429 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Beginning balance at Dec. 31, 2019 | $ 223,249 | $ 584 | $ 188,365 | $ 35,246 | $ (480) | $ (466) |
Increase (Decrease) in Shareholders' Equity | ||||||
Net income | 16,404 | 16,404 | ||||
Total other comprehensive income (loss) net of taxes | (975) | (975) | ||||
Cash dividends | (5,712) | (5,712) | ||||
Shares-based compensation plans: | ||||||
Shares issued, shares acquired including compensation expense | (119) | 2 | 223 | (344) | ||
Ending balance at Sep. 30, 2020 | 232,847 | 586 | 188,588 | 45,938 | (1,455) | (810) |
Beginning balance at Jun. 30, 2020 | 225,638 | 586 | 188,226 | 42,862 | (5,114) | (922) |
Increase (Decrease) in Shareholders' Equity | ||||||
Net income | 4,977 | 4,977 | ||||
Total other comprehensive income (loss) net of taxes | 3,659 | 3,659 | ||||
Cash dividends | (1,901) | (1,901) | ||||
Shares-based compensation plans: | ||||||
Shares issued, shares acquired including compensation expense | 474 | 0 | 362 | 112 | ||
Ending balance at Sep. 30, 2020 | 232,847 | 586 | 188,588 | 45,938 | (1,455) | (810) |
Beginning balance at Dec. 31, 2020 | 246,249 | 586 | 189,066 | 54,099 | 3,346 | (848) |
Increase (Decrease) in Shareholders' Equity | ||||||
Net income | 26,175 | 26,175 | ||||
Total other comprehensive income (loss) net of taxes | 2,315 | 2,315 | ||||
Cash dividends | (6,152) | (6,152) | ||||
Shares-based compensation plans: | ||||||
Shares issued, shares acquired including compensation expense | (18) | 0 | 102 | (120) | ||
Ending balance at Sep. 30, 2021 | 268,569 | 586 | 189,168 | 74,122 | 5,661 | (968) |
Beginning balance at Jun. 30, 2021 | 265,938 | 586 | 188,772 | 69,052 | 7,578 | (50) |
Increase (Decrease) in Shareholders' Equity | ||||||
Net income | 7,192 | 7,192 | ||||
Total other comprehensive income (loss) net of taxes | (1,917) | (1,917) | ||||
Cash dividends | (2,122) | (2,122) | ||||
Shares-based compensation plans: | ||||||
Shares issued, shares acquired including compensation expense | (522) | 0 | 396 | (918) | ||
Ending balance at Sep. 30, 2021 | $ 268,569 | $ 586 | $ 189,168 | $ 74,122 | $ 5,661 | $ (968) |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends per share (in usd per share) | $ 0.19 | $ 0.17 | $ 0.55 | $ 0.51 |
Common shares issued during the period (in shares) | 16,593 | 8,129 | 36,442 | |
Common shares forfeited (in shares) | 11,383 | |||
Treasury stock, shares issued/acquired (in shares) | 41,106 | 5,634 | 11,864 | 32,804 |
Compensation expense, issuance of stock | $ 483 | $ 437 | $ 1,428 | $ 1,613 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities | ||
Net income | $ 26,175 | $ 16,404 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Net discount accretion | (690) | (2,898) |
Depreciation and amortization expense | 4,014 | 4,980 |
Impairment of intangibles | 0 | 153 |
Provision for loan losses | (10) | 5,025 |
Share-based compensation | 1,428 | 1,613 |
Gains on sales of loans originated for sale | (3,980) | (4,028) |
Mortgage loans originated for sale | (150,652) | (147,647) |
Proceeds from sales of loans originated for sale | 159,425 | 146,890 |
Gains on sale of portfolio loans | 0 | (2,803) |
Net gain on disposal of OREO | 0 | 164 |
Writedown of OREO | 0 | 544 |
Deferred income taxes | (267) | (672) |
Investment securities (gains) losses | (635) | 44 |
Loss on derivative terminations | 514 | 0 |
Income from life insurance | (1,690) | (1,615) |
Decrease (increase) in accrued interest receivable | 912 | (2,772) |
Increase in accrued interest payable and other liabilities | (221) | (504) |
Other, net | (4,108) | 3,460 |
Net cash provided by operating activities | 30,215 | 16,338 |
Cash flows from investing activities | ||
Proceeds from sales of AFS securities | 149,038 | 0 |
Maturities, repayments and calls of AFS securities | 30,525 | 38,970 |
Purchases of AFS securities | (156,912) | (26,691) |
Net redemptions of restricted investments in bank stocks | 3,512 | 3,538 |
Net decrease in loans | 41,504 | 65,605 |
Proceeds from sales of portfolio loans | 0 | 22,665 |
Purchases of bank premises and equipment | (891) | (914) |
Proceeds from disposal of OREO | 0 | 3,734 |
Proceeds from disposal of bank premises and equipment | 0 | 59 |
Purchases of bank owned life insurance | 0 | (3,636) |
Net cash provided by investing activities | 66,776 | 103,330 |
Cash flows from financing activities | ||
Net increase (decrease) in deposits | 145,203 | (63,761) |
Net increase (decrease) in borrowings with original maturities less than 90 days | 8,129 | (137,424) |
Proceeds from FHLB advances and other borrowings | 0 | 180,955 |
Payments on FHLB advances and other borrowings | (56,042) | (60,649) |
Settlement of terminated derivatives | (525) | 0 |
Dividends paid | (6,152) | (5,712) |
Acquisition of treasury stock | (1,069) | (1,170) |
Shares repurchased as treasury stock for employee taxes associated with restricted stock vesting | (514) | (679) |
Proceeds from issuance of employee stock purchase plan shares | 136 | 116 |
Net cash provided by (used in) financing activities | 89,166 | (88,324) |
Net increase in cash and cash equivalents | 186,157 | 31,344 |
Cash and cash equivalents at beginning of period | 125,258 | 55,963 |
Cash and cash equivalents at end of period | 311,415 | 87,307 |
Cash paid during the period for: | ||
Interest | 5,007 | 13,387 |
Income taxes | $ 4,100 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES See the Glossary of Defined Terms at the beginning of this Report for terms used throughout the unaudited condensed consolidated financial statements and related notes of this Form 10-Q. Nature of Operations – Orrstown Financial Services, Inc. is a financial holding company that operates Orrstown Bank, a commercial bank providing banking and financial advisory services in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry and York Counties, Pennsylvania, and in Anne Arundel, Baltimore, Howard and Washington Counties, Maryland, as well as Baltimore City, Maryland. The Company operates in the community banking segment and engages in lending activities, including commercial, residential, commercial mortgages, construction, municipal, and various forms of consumer lending, and deposit services, including checking, savings, time, and money market deposits. The Company also provides fiduciary services, investment advisory, insurance and brokerage services. The Company and the Bank are subject to regulation by certain federal and state agencies and undergo periodic examinations by such regulatory authorities. Basis of Presentation – The accompanying unaudited condensed consolidated financial statements include the accounts of Orrstown Financial Services, Inc. and its wholly owned subsidiary, the Bank. The Company has prepared these unaudited condensed consolidated financial statements in accordance with GAAP for interim financial information, SEC rules that permit reduced disclosure for interim periods, and Article 10 of Regulation S-X. In the opinion of management, all adjustments (all of which are of a normal recurring nature) that are necessary for a fair statement are reflected in the unaudited condensed consolidated financial statements. The December 31, 2020 consolidated balance sheet information contained in this Quarterly Report on Form 10-Q was derived from the Company's 2020 audited consolidated financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Operating results for the nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. All significant intercompany transactions and accounts have been eliminated. The Company's management has evaluated all activity of the Company and concluded that subsequent events are properly reflected in the Company's unaudited condensed consolidated financial statements and notes as required by GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The effects of the COVID-19 pandemic may impact material estimates. Material estimates that are particularly susceptible to significant change include the determination of the ALL and those used in valuation methodologies in areas with no observable market, such as loans, deposits, borrowings, goodwill, core deposit and other intangible assets, mortgage servicing rights, other assets and liabilities obtained or assumed in business combinations. Certain prior-year amounts have been reclassified to conform to the current year presentation. These reclassifications did not have a material impact on the Company's consolidated financial condition or results of operations. Derivatives - FASB ASC 815, Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. The Company's objectives in using interest rate derivatives are to add stability to interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of fixed amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. Changes to the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income and are subsequently reclassified into earnings in the period that the hedged transaction affects earnings. The Company discontinues cash flow hedge accounting if it is probable the forecasted hedged transactions will not occur in the initially identified time period due to circumstances, such as the impact of the COVID-19 pandemic. Upon discontinuance, the associated gains and losses deferred in accumulated other comprehensive income (loss) are reclassified immediately into earnings and subsequent changes in the fair value of the cash flow hedge are recognized in earnings. S uch derivatives were used to hedge the variable cash flows associated with overnight borrowings. During the three and nine months ended September 30, 2021, the Company terminated its interest rate derivative designated as a cash flow hedge . Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings. Leases - The Company evaluates its contracts at inception to determine if an arrangement either is a lease or contains one. Operating lease ROU assets are included in other assets and operating lease liabilities in accrued interest payable and other liabilities in the unaudited condensed consolidated balance sheets. The Company had no finance leases at September 30, 2021. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company's leases do not provide an implicit rate, so the Company's incremental borrowing rate is used, which approximates its fully collateralized borrowing rate, based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is reevaluated upon lease modification. The operating lease ROU asset also includes any initial direct costs and prepaid lease payments made less any lease incentives. In calculating the present value of lease payments, the Company may include options to extend the lease when it is reasonably certain that it will exercise that option. In accordance with ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), the Company keeps leases with an initial term of 12 months or less off of the balance sheet. The Company recognizes these lease payments in the unaudited condensed consolidated statements of income on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components and has elected the practical expedient to account for them as a single lease component. Recent Accounting Pronouncements - ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ( "ASU 2016-13" ). The amendments in this update require an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. Organizations will continue to use judgment to determine which loss estimation method is appropriate for their circumstances. Additionally, the amendments in this update amend the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. For certain public companies, this update was effective for interim and annual periods beginning after December 15, 2019. The Company delayed the adoption of ASU 2016-13 as noted below. ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates ("ASU 2019-10"), extended the implementation deadline of ASU 2016-13 for smaller reporting and other companies until the fiscal year and interim periods beginning after December 15, 2022. The Company meets the requirements to be considered a smaller reporting company under SEC Regulation S-K and SEC Rule 405, and did not adopt ASU 2016-13 on January 1, 2020. The Company is evaluating the impact of the delay for adoption of ASU 2016-13, and is working with a third-party vendor solution to assist with the application of ASU 2016-13 and finalizing the loss estimation models to be used. Once management determines which methods will be utilized, a third party will be contracted to perform a model validation prior to adoption. While the Company anticipates the allowance for loan losses will increase under its current assumptions, it expects the impact of adopting ASU 2016-13 will be influenced by the composition, characteristics and quality of its loan and securities portfolios, as well as general economic conditions and forecasts at the adoption date. The other provisions of ASU 2019-10 were not applicable to the Company. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). ASU 2020-04 contains optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The optional expedients apply consistently to all contracts or transactions within the scope of this topic, while the optional expedients for hedging relationships can be elected on an individual basis. The Company has formed a cross-functional working group to lead the transition from LIBOR to a planned adoption of an alternate index. The Company currently plans to replace LIBOR with the 30-Day Average SOFR in its loan agreements. The Company is in the process of implementing fallback language for loans that will mature after 2021. The Company expects to adopt the LIBOR transition relief allowed under this standard, and is currently evaluating the potential impact of this guidance on its financial statements. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | INVESTMENT SECURITIES At September 30, 2021 and December 31, 2020, all investment securities were classified as AFS. The following table summarizes amortized cost and fair value of investment securities, and the corresponding amounts of gross unrealized gains and losses recognized in AOCI, at September 30, 2021 and December 31, 2020: Amortized Cost Gross Unrealized Gross Unrealized Fair Value September 30, 2021 U.S. Treasury securities $ 20,087 $ — $ 256 $ 19,831 States and political subdivisions 174,239 8,072 790 181,521 GSE residential MBSs 20,552 80 114 20,518 GSE residential CMOs 69,922 921 656 70,187 Non-agency CMOs 25,929 1 273 25,657 Asset-backed 126,726 457 276 126,907 Other 397 — — 397 Totals $ 437,852 $ 9,531 $ 2,365 $ 445,018 December 31, 2020 States and political subdivisions $ 104,704 $ 9,091 $ 1,125 $ 112,670 GSE residential MBSs 4,197 96 — 4,293 GSE residential CMOs 56,856 2,226 1,071 58,011 Non-agency CMOs 16,505 413 — 16,918 Private label commercial CMOs 63,941 57 1,762 62,236 Asset-backed 214,425 171 2,630 211,966 Other 371 — — 371 Totals $ 460,999 $ 12,054 $ 6,588 $ 466,465 The following table summarizes investment securities with unrealized losses at September 30, 2021 and December 31, 2020, aggregated by major investment security type and the length of time in a continuous unrealized loss position. Less Than 12 Months 12 Months or More Total # of Securities Fair Value Unrealized # of Securities Fair Value Unrealized # of Securities Fair Value Unrealized September 30, 2021 U.S. Treasury securities 3 $ 19,831 $ 256 — $ — $ — 3 $ 19,831 $ 256 States and political subdivisions 11 40,666 790 — — — 11 40,666 790 GSE residential MBSs 5 17,354 114 — — — 5 17,354 114 GSE residential CMOs 7 43,267 656 — — — 7 43,267 656 Non-agency CMOs 1 13,257 273 — — — 1 13,257 273 Asset-backed 2 19,084 14 3 36,067 262 5 55,151 276 Totals 29 $ 153,459 $ 2,103 3 $ 36,067 $ 262 32 $ 189,526 $ 2,365 December 31, 2020 States and political subdivisions 1 $ 9,079 $ 1,125 — $ — $ — 1 $ 9,079 $ 1,125 GSE residential CMOs 3 23,954 1,071 — — — 3 23,954 1,071 Private label commercial CMOs 1 4,314 685 10 42,403 1,077 11 46,717 1,762 Asset-backed 2 16,921 12 15 183,161 2,618 17 200,082 2,630 Totals 7 $ 54,268 $ 2,893 25 $ 225,564 $ 3,695 32 $ 279,832 $ 6,588 The Company determines whether unrealized losses are temporary in nature in accordance with FASB ASC 320-10, Investments - Overall , (“FASB ASC 320-10”) and FASB ASC 325-40, Investments – Beneficial Interests in Securitized Financial Assets , when applicable. The evaluation is based upon factors such as the creditworthiness of the underlying borrowers, performance of the underlying collateral, if applicable, and the level of credit support in the security structure. Management also evaluates other factors and circumstances that may be indicative of an OTTI condition. This includes, but is not limited to, an evaluation of the type of security, length of time and extent to which the fair value has been less than cost and near-term prospects of the issuer. FASB ASC 320-10 requires the Company to assess if an OTTI exists by considering whether the Company has the intent to sell the security or it is more likely than not that it will be required to sell the security before recovery. If either of these situations applies, the guidance requires the Company to record an OTTI charge to earnings on debt securities for the difference between the amortized cost basis of the security and the fair value of the security. If neither of these situations applies, the Company is required to assess whether it is expected to recover the entire amortized cost basis of the security. If the Company is not expected to recover the entire amortized cost basis of the security, the guidance requires the Company to bifurcate the identified OTTI into a credit loss component and a component representing loss related to other factors. A discount rate is applied which equals the effective yield of the security. The difference between the present value of the expected flows and the amortized book value is considered a credit loss, which would be recorded through earnings as an OTTI charge. When a market price is not readily available, the market value of the security is determined using the same expected cash flows; the discount rate is a rate the Company determines from the open market and other sources as appropriate for the security. The difference between the market value and the present value of cash flows expected to be collected is recognized in accumulated other comprehensive loss on the unaudited condensed consolidated statements of financial condition. As of September 30, 2021, the Company had no cumulative OTTI. There were no OTTI charges recognized in earnings as a result of credit losses on investments in the three and nine months ended September 30, 2021 and 2020. During 2020, unrealized losses were substantially higher due to market uncertainty brought about by the COVID-19 pandemic. The sudden and desperate need for liquidity from many institutional pools of capital, combined with the global economic implications of the COVID-19 pandemic, caused significant widening of spreads. Market conditions improved in the second half of 2020 and into 2021 as the uncertainty dissipated with economies re-opening and the distribution of vaccines. U.S. Treasury Securities. The unrealized losses presented in the table above have been caused by an increase in rates from the time these securities were purchased. Management considers the full faith and credit of the U.S. government in determining whether a security is OTTI. Because the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell them before recovery of their amortized cost basis, which may be maturity, the Company does not consider these securities to be OTTI at September 30, 2021. States and Political Subdivisions. The unrealized losses presented in the table above have been caused by a widening of spreads from the time these securities were purchased. Management considers the investment rating, the state of the issuer of the security and other credit support in determining whether the security is OTTI. Because the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell them before recovery of their amortized cost basis, which may be maturity, the Company does not consider these securities to be OTTI at September 30, 2021 or December 31, 2020. GSE Residential CMOs and GSE Residential MBS. The unrealized losses presented in the table above have been caused by a widening of spreads from the time these securities were purchased. The contractual terms of these securities do not permit the issuer to settle the securities at a price less than its par value basis. Because the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell them before recovery of their amortized cost basis, which may be maturity, the Company does not consider these securities to be OTTI at September 30, 2021 or December 31, 2020. Non-Agency CMOs. The unrealized losses presented in the table above were caused by a widening of spreads and/or a rise in interest rates from the time the securities were purchased. Because the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell them before recovery of their amortized cost basis, which may be maturity, the Company does not consider these securities to be OTTI at September 30, 2021. Asset-backed. The unrealized losses presented in the table above were caused by a widening of spreads from the time the securities were purchased. Management considers the investment rating and other credit support in determining whether a security is OTTI. Because the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell them before recovery of their amortized cost basis, which may be maturity, the Company does not consider these securities to be OTTI at September 30, 2021 or December 31, 2020. The following table summarizes amortized cost and fair value of investment securities by contractual maturity at September 30, 2021. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately. Amortized Cost Fair Value Due in one year or less $ — $ — Due after one year through five years 249 249 Due after five years through ten years 69,999 71,976 Due after ten years 124,475 129,524 CMOs and MBSs 116,403 116,362 Asset-backed 126,726 126,907 Totals $ 437,852 $ 445,018 The following table summarizes proceeds from sales of investment securities and gross gains and gross losses for the three and nine months ended September 30, 2021 and 2020: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Proceeds from sale of investment securities $ 73,319 $ — $ 149,038 $ — Gross gains 482 — 1,844 — Gross losses 3 13 1,209 44 |
LOANS AND ALLOWANCE FOR LOAN LO
LOANS AND ALLOWANCE FOR LOAN LOSSES | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
LOANS AND ALLOWANCE FOR LOAN LOSSES | LOANS AND ALLOWANCE FOR LOAN LOSSES Consistent with ASU 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Loan Losses, the Company’s loan portfolio is grouped into segments which are further broken down into classes to allow management to monitor the performance by the borrower and to monitor the yield on the portfolio. The risks associated with lending activities differ among the various loan classes and are subject to the impact of changes in interest rates, market conditions of collateral securing the loans, and general economic conditions. All of these factors may adversely impact both the borrower’s ability to repay its loans and associated collateral. The Company has various types of commercial real estate loans, which have differing levels of credit risk. Owner occupied commercial real estate loans are generally dependent upon the successful operation of the borrower’s business, with the cash flows generated from the business being the primary source of repayment of the loan. If the business suffers a downturn in sales or profitability, the borrower’s ability to repay the loan could be in jeopardy. Non-owner occupied and multi-family commercial real estate loans and non-owner occupied residential loans present a different credit risk to the Company than owner occupied commercial real estate loans, as the repayment of the loan is dependent upon the borrower’s ability to generate a sufficient level of occupancy to produce rental income that exceeds debt service requirements and operating expenses. Lower occupancy or lease rates may result in a reduction in cash flows, which hinders the ability of the borrower to meet debt service requirements, and may result in lower collateral values. The Company generally recognizes that greater risk is inherent in these credit relationships compared to owner occupied loans mentioned above. Acquisition and development loans consist of 1-4 family residential construction and commercial and land development loans. The risk of loss on these loans is largely dependent on the Company’s ability to assess the property’s value at the completion of the project, which should exceed the property’s construction costs. During the construction phase, a number of factors could potentially negatively impact the collateral value, including cost overruns, delays in completing the project, competition, and real estate market conditions, which may change based on the supply of similar properties in the area. In the event the collateral value at the completion of the project is not sufficient to cover the outstanding loan balance, the Company must rely upon other repayment sources, if any, including the guarantors of the project or other collateral securing the loan. Commercial and industrial loans include advances to local and regional businesses for general commercial purposes and include permanent and short-term working capital, machinery and equipment financing, and may be either in the form of lines of credit or term loans. Although commercial and industrial loans may be unsecured to our highest-rated borrowers, the majority of these loans are secured by the borrower’s accounts receivable, inventory and machinery and equipment. In a significant number of these loans, the collateral also includes the business real estate or the business owner’s personal real estate or assets. Commercial and industrial loans present credit exposure to the Company, as they are more susceptible to risk of loss during a downturn in the economy as borrowers may have greater difficulty in meeting their debt service requirements and the value of the collateral may decline. The Company attempts to mitigate this risk through its underwriting standards, including evaluating the creditworthiness of the borrower and, to the extent available, credit ratings on the business. Additionally, monitoring of the loans through annual renewals and meetings with the borrowers are typical. However, these procedures cannot eliminate the risk of loss associated with commercial and industrial lending. At September 30, 2021 and December 31, 2020, commercial and industrial loans include $259.9 million and $403.3 million, respectively, of loans, net of deferred fees and costs, originated through the SBA PPP. Municipal loans consist of extensions of credit to municipalities and school districts within the Company’s market area. These loans generally present a lower risk than commercial and industrial loans, as they are generally secured by the municipality’s full taxing authority, by revenue obligations, or by its ability to raise assessments on its customers for a specific utility. The Company originates loans to its retail customers, including fixed-rate and adjustable first lien mortgage loans, with the underlying 1-4 family owner occupied residential property securing the loan. The Company’s risk exposure is minimized in these types of loans through the evaluation of the creditworthiness of the borrower, including credit scores and debt-to-income ratios, and underwriting standards, which limit the loan-to-value ratio to generally no more than 80% upon loan origination, unless the borrower obtains private mortgage insurance. Home equity loans, including term loans and lines of credit, present a slightly higher risk to the Company than 1-4 family first liens, as these loans can be first or second liens on 1-4 family owner occupied residential property, but can have loan-to-value ratios of no greater than 90% of the value of the real estate taken as collateral. The creditworthiness of the borrower is also considered, including credit scores and debt-to-income ratios. Installment and other loans’ credit risk is mitigated through prudent underwriting standards, including evaluation of the creditworthiness of the borrower through credit scores and debt-to-income ratios and, if secured, the collateral value of the assets. These loans can be unsecured or secured by assets the value of which may depreciate quickly or may fluctuate, and may present a greater risk to the Company than 1-4 family residential loans. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was enacted. The CARES Act established the SBA PPP. The SBA PPP is intended to provide economic relief to small businesses nationwide adversely impacted under the COVID-19 Emergency Declaration issued on March 13, 2020. The SBA PPP, which began on April 3, 2020, provided small businesses with funds to cover up to 24 weeks of payroll costs and other expenses, including benefits. It also provides for forgiveness of up to the full principal amount of qualifying loans. Through December 31, 2020, the Bank closed and funded almost 3,200 loans for a total gross loan amount of $467.7 million. These loans resulted in net processing fees of $13.5 million to be recognized through net interest income over the life of the loans, which is between two five In an effort to assist clients that were negatively impacted by the COVID-19 pandemic, the Bank offered various mitigation options, including a loan payment deferral program. Under this program, most commercial deferrals were for a 90-day period, while most consumer deferrals were for a 180-day period. Commercial and consumer deferrals totaled zero and $317 thousand, respectively, at September 30, 2021 and $15.7 million and $2.5 million, respectively, at December 31, 2020. In accordance with the revised Interagency Statement on Loan Modifications by Financial Institutions Working with Customers Affected by the Coronaviru s issued by the federal bank regulatory agencies on April 7, 2020, these deferrals are exempt from TDR status as they meet the specified requirements. The following table presents the loan portfolio by segment and class, excluding residential mortgage LHFS, at September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Commercial real estate: Owner occupied $ 196,585 $ 174,908 Non-owner occupied 509,703 409,567 Multi-family 112,002 113,635 Non-owner occupied residential 100,088 114,505 Acquisition and development: 1-4 family residential construction 12,246 9,486 Commercial and land development 71,784 51,826 Commercial and industrial (1) 540,205 647,368 Municipal 13,631 20,523 Residential mortgage: First lien 203,360 244,321 Home equity - term 7,079 10,169 Home equity - lines of credit 154,004 157,021 Installment and other loans 19,077 26,361 Total loans $ 1,939,764 $ 1,979,690 (1) This balance includes $259.9 million and $403.3 million of SBA PPP loans, net of deferred fees and costs, at September 30, 2021 and December 31, 2020, respectively. In order to monitor ongoing risk associated with its loan portfolio and specific loans within the segments, management uses an internal grading system. The first several rating categories, representing the lowest risk to the Bank, are combined and given a “Pass” rating. Management generally follows regulatory definitions in assigning criticized ratings to loans, including "Special Mention," "Substandard," "Doubtful" or "Loss." The Special Mention category includes loans that have potential weaknesses that may, if not monitored or corrected, weaken the asset or inadequately protect the Bank's position at some future date. These assets pose elevated risk, but their weakness does not yet justify a more severe, or classified rating. Substandard loans are classified as they have a well-defined weakness, or weaknesses that jeopardize liquidation of the debt. These loans are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Substandard loans include loans that management has determined not to be impaired, as well as loans considered to be impaired. A Doubtful loan has a high probability of total or substantial loss, but because of specific pending events that may strengthen the asset, its classification as Loss is deferred. Loss loans are considered uncollectible, as the borrowers are often in bankruptcy, have suspended debt repayments, or have ceased business operations. Once a loan is classified as Loss, there is little prospect of collecting the loan’s principal or interest and it is charged-off. The Company has a loan review policy and program which is designed to identify and monitor risk in the lending function. The Management ERM Committee, comprised of executive officers and loan department personnel, is charged with the oversight of overall credit quality and risk exposure of the Company's loan portfolio. This includes the monitoring of the lending activities of all Company personnel with respect to underwriting and processing new loans and the timely follow-up and corrective action for loans showing signs of deterioration in quality. A loan review program provides the Company with an independent review of the commercial loan portfolio on an ongoing basis. Generally, consumer and residential mortgage loans are included in the Pass categories unless a specific action, such as extended delinquencies, bankruptcy, repossession or death of the borrower occurs, which heightens awareness as to a possible credit event. Internal loan reviews are completed annually on all commercial relationships with a committed loan balance in excess of $1.0 million, which includes confirmation of risk rating by an independent credit officer. In addition, all commercial relationships greater than $500 thousand rated Substandard, Doubtful or Loss are reviewed quarterly and corresponding risk ratings are reaffirmed by the Company's Problem Loan Committee, with subsequent reporting to the Management ERM Committee and the Board of Directors. The following table summarizes the Company’s loan portfolio ratings based on its internal risk rating system at September 30, 2021 and December 31, 2020: Pass Special Mention Non-Impaired Substandard Impaired - Substandard Doubtful PCI Loans Total September 30, 2021 Commercial real estate: Owner occupied $ 176,029 $ 8,219 $ 6,147 $ 3,832 $ — $ 2,358 $ 196,585 Non-owner occupied 476,947 32,272 168 — — 316 509,703 Multi-family 91,726 19,662 614 — — — 112,002 Non-owner occupied residential 95,338 2,028 1,344 171 — 1,207 100,088 Acquisition and development: 1-4 family residential construction 12,246 — — — — — 12,246 Commercial and land development 70,648 636 500 — — — 71,784 Commercial and industrial 521,530 7,939 5,505 2,941 — 2,290 540,205 Municipal 13,631 — — — — — 13,631 Residential mortgage: First lien 195,717 — 240 2,472 — 4,931 203,360 Home equity - term 7,056 — — 7 — 16 7,079 Home equity - lines of credit 153,436 21 52 495 — — 154,004 Installment and other loans 19,002 — — 37 — 38 19,077 $ 1,833,306 $ 70,777 $ 14,570 $ 9,955 $ — $ 11,156 $ 1,939,764 December 31, 2020 Commercial real estate: Owner occupied $ 148,846 $ 12,491 $ 7,855 $ 3,260 $ — $ 2,456 $ 174,908 Non-owner occupied 351,860 57,378 — — — 329 409,567 Multi-family 92,769 20,224 642 — — — 113,635 Non-owner occupied residential 107,557 3,948 1,422 268 — 1,310 114,505 Acquisition and development: 1-4 family residential construction 9,101 385 — — — — 9,486 Commercial and land development 49,832 655 525 814 — — 51,826 Commercial and industrial 617,213 17,561 6,118 3,639 — 2,837 647,368 Municipal 20,523 — — — — — 20,523 Residential mortgage: First lien 236,381 — — 2,628 — 5,312 244,321 Home equity - term 10,076 — 64 10 — 19 10,169 Home equity - lines of credit 156,264 95 54 608 — — 157,021 Installment and other loans 26,283 — — 17 — 61 26,361 $ 1,826,705 $ 112,737 $ 16,680 $ 11,244 $ — $ 12,324 $ 1,979,690 For commercial real estate, acquisition and development and commercial and industrial loans, a loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Generally, loans that are more than 90 days past due are deemed impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed to determine if the loan should be placed on nonaccrual status. Nonaccrual loans in the commercial and commercial real estate portfolios and any TDRs are, by definition, deemed to be impaired. Impairment is measured on a loan-by-loan basis for commercial, construction and restructured loans by either the present value of the expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. A loan is collateral dependent if the repayment of the loan is expected to be provided solely by the underlying collateral. For loans that are deemed to be impaired for extended periods of time, periodic updates on fair values are obtained, which may include updated appraisals. Updated fair values are incorporated into the impairment analysis in the next reporting period. Loan charge-offs, which may include partial charge-offs, are taken on an impaired loan that is collateral dependent if the loan’s carrying balance exceeds its collateral’s appraised value, the loan has been identified as uncollectible, and it is deemed to be a confirmed loss. Typically, impaired loans with a charge-off or partial charge-off will continue to be considered impaired, unless the note is split into two, and management expects the performing note to continue to perform and is adequately secured. The second, or non-performing note, would be charged-off. Generally, an impaired loan with a partial charge-off may continue to have an impairment reserve on it after the partial charge-off, if factors warrant. At September 30, 2021 and December 31, 2020, nearly all of the Company’s loan impairments were measured based on the estimated fair value of the collateral securing the loan, except for TDRs. By definition, TDRs are considered impaired. All TDR impairment analyses are initially based on discounted cash flows for those loans. For real estate loans, collateral generally consists of commercial real estate, but in the case of commercial and industrial loans, it could also consist of accounts receivable, inventory, equipment or other business assets. Commercial and industrial loans may also have real estate collateral. Updated appraisals are generally required every 18 months for classified commercial loans in excess of $250 thousand. The “as is" value provided in the appraisal is often used as the fair value of the collateral in determining impairment, unless circumstances, such as subsequent improvements, approvals, or other circumstances, dictate that another value than that provided by the appraiser is more appropriate. Generally, impaired commercial loans secured by real estate, other than performing TDRs, are measured at fair value using certified real estate appraisals that had been completed within the last 18 months. Appraised values are discounted for estimated costs to sell the property and other selling considerations to arrive at the property’s fair value. In those situations in which it is determined an updated appraisal is not required for loans individually evaluated for impairment, fair values are based on either an existing appraisal or a discounted cash flow analysis as determined by management. The approaches are discussed below: • Existing appraisal – if the existing appraisal provides a strong loan-to-value ratio (generally 70% or lower) and, after consideration of market conditions and knowledge of the property and area, it is determined by the Credit Administration staff that there has not been a significant deterioration in the collateral value, the existing certified appraised value may be used. Discounts to the appraised value, as deemed appropriate for selling costs, are factored into the fair value. • Discounted cash flows – in limited cases, discounted cash flows may be used on projects in which the collateral is liquidated to reduce the borrowings outstanding, and is used to validate collateral values derived from other approaches. Collateral on certain impaired loans is not limited to real estate, and may consist of accounts receivable, inventory, equipment or other business assets. Estimated fair values are determined based on borrowers’ financial statements, inventory ledgers, accounts receivable aging or appraisals from individuals with knowledge in the business. Stated balances are generally discounted for the age of the financial information or the quality of the assets. In determining fair value, liquidation discounts are applied to this collateral based on existing loan evaluation policies. The Company distinguishes substandard loans on both an impaired and non-impaired basis, as it places less emphasis on a loan’s classification, and increased reliance on whether the loan was performing in accordance with the contractual terms. A substandard classification does not automatically meet the definition of impaired. Loss potential, while existing in the aggregate amount of substandard loans, does not have to exist in individual extensions of credit classified as substandard. As a result, the Company’s methodology includes an evaluation of certain accruing commercial real estate, acquisition and development, and commercial and industrial loans rated substandard to be collectively evaluated for impairment. Although the Company believes these loans meet the definition of substandard, they are generally performing and management has concluded that it is likely the Company will be able to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement. Larger groups of smaller balance homogeneous loans are collectively evaluated for impairment. Generally, the Company does not separately identify individual consumer and residential loans for impairment disclosures, unless such loans are the subject of a restructuring agreement due to financial difficulties of the borrower. The following table, which excludes accruing PCI loans, summarizes impaired loans by segment and class, segregated by those for which a specific allowance was required and those for which a specific allowance was not required at September 30, 2021 and December 31, 2020. The recorded investment in loans excludes accrued interest receivable due to insignificance. Related allowances established generally pertain to those loans in which loan forbearance agreements were in the process of being negotiated or updated appraisals were pending, and any partial charge-off will be recorded when final information is received. Impaired Loans with a Specific Allowance Impaired Loans with No Specific Allowance Recorded Investment (Book Balance) Unpaid Principal Balance (Legal Balance) Related Allowance Recorded Investment (Book Balance) Unpaid Principal Balance (Legal Balance) September 30, 2021 Commercial real estate: Owner-occupied $ — $ — $ — $ 3,832 $ 4,923 Non-owner occupied residential — — — 171 383 Commercial and industrial — — — 2,941 3,592 Residential mortgage: First lien 469 469 29 2,003 3,161 Home equity—term — — — 7 10 Home equity—lines of credit — — — 495 733 Installment and other loans — — — 37 37 $ 469 $ 469 $ 29 $ 9,486 $ 12,839 December 31, 2020 Commercial real estate: Owner-occupied $ — $ — $ — $ 3,260 $ 4,091 Non-owner occupied residential — — — 268 393 Acquisition and development: Commercial and land development — — — 814 875 Commercial and industrial — — — 3,639 4,269 Residential mortgage: First lien 424 508 33 2,204 3,264 Home equity—term — — — 10 13 Home equity—lines of credit — — — 608 832 Installment and other loans — — — 17 18 $ 424 $ 508 $ 33 $ 10,820 $ 13,755 The following table, which excludes accruing PCI loans, summarizes the average recorded investment in impaired loans and related recognized interest income for the three and nine months ended September 30, 2021 and 2020: 2021 2020 Average Interest Average Interest Three Months Ended September 30, Commercial real estate: Owner-occupied $ 4,179 $ — $ 4,424 $ — Non-owner occupied — — 102 — Multi-family — — 141 — Non-owner occupied residential 232 — 433 — Acquisition and development: Commercial and land development — — 837 — Commercial and industrial 3,073 — 1,044 — Residential mortgage: First lien 2,541 11 3,209 12 Home equity – term 10 — 12 — Home equity - lines of credit 463 — 645 — Installment and other loans 24 — 17 — $ 10,522 $ 11 $ 10,864 $ 12 Nine Months Ended September 30, Commercial real estate: Owner occupied $ 3,848 $ 1 $ 5,033 $ 1 Non-owner occupied — — 108 — Multi-family 7 — 259 — Non-owner occupied residential 252 — 422 — Acquisition and development: Commercial and land development 246 — 586 — Commercial and industrial 3,046 — 1,316 — Residential mortgage: First lien 2,575 32 3,050 36 Home equity - term 12 — 12 — Home equity - lines of credit 547 — 699 1 Installment and other loans 17 — 29 — $ 10,550 $ 33 $ 11,514 $ 38 The following table presents impaired loans that are TDRs, with the recorded investment at September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Number of Recorded Number of Recorded Accruing: Commercial real estate: Owner occupied 1 $ 26 1 $ 28 Residential mortgage: First lien 8 813 9 898 Home equity - lines of credit — — 1 8 9 839 11 934 Nonaccruing: Residential mortgage: First lien 5 291 5 320 5 291 5 320 14 $ 1,130 16 $ 1,254 There were no new TDR's for the three and nine months ended September 30, 2021 or 2020. Management further monitors the performance and credit quality of the loan portfolio by analyzing the length of time a portfolio is past due, by aggregating loans based on its delinquencies. The following table presents the classes of loan portfolio summarized by aging categories of performing loans and nonaccrual loans at September 30, 2021 and December 31, 2020: Days Past Due Current 30-59 60-89 90+ Total Non- Total September 30, 2021 Commercial real estate: Owner occupied $ 190,183 $ 238 $ — $ — $ 238 $ 3,806 $ 194,227 Non-owner occupied 509,387 — — — — — 509,387 Multi-family 112,002 — — — — — 112,002 Non-owner occupied residential 98,459 — 251 — 251 171 98,881 Acquisition and development: 1-4 family residential construction 12,246 — — — — — 12,246 Commercial and land development 71,774 10 — — 10 — 71,784 Commercial and industrial 534,967 7 — — 7 2,941 537,915 Municipal 13,631 — — — — — 13,631 Residential mortgage: First lien 196,076 341 318 35 694 1,659 198,429 Home equity - term 7,041 15 — — 15 7 7,063 Home equity - lines of credit 153,266 208 35 — 243 495 154,004 Installment and other loans 18,891 70 41 — 111 37 19,039 Subtotal 1,917,923 889 645 35 1,569 9,116 1,928,608 Loans acquired with credit deterioration: Commercial real estate: Owner occupied 2,358 — — — — — 2,358 Non-owner occupied 316 — — — — — 316 Non-owner occupied residential 1,081 — — 126 126 — 1,207 Commercial and industrial 2,290 — — — — — 2,290 Residential mortgage: First lien 4,730 — — 201 201 — 4,931 Home equity - term 16 — — — — — 16 Installment and other loans 38 — — — — — 38 Subtotal 10,829 — — 327 327 — 11,156 $ 1,928,752 $ 889 $ 645 $ 362 $ 1,896 $ 9,116 $ 1,939,764 Days Past Due Current 30-59 60-89 90+ Total Non- Total December 31, 2020 Commercial real estate: Owner occupied $ 168,262 $ 958 $ — $ — $ 958 $ 3,232 $ 172,452 Non-owner occupied 409,130 108 — — 108 — 409,238 Multi-family 113,635 — — — — — 113,635 Non-owner occupied residential 112,443 484 — — 484 268 113,195 Acquisition and development: 1-4 family residential construction 9,486 — — — — — 9,486 Commercial and land development 50,922 32 58 — 90 814 51,826 Commercial and industrial 640,573 9 310 — 319 3,639 644,531 Municipal 19,677 846 — — 846 — 20,523 Residential mortgage: First lien 230,903 5,758 535 83 6,376 1,730 239,009 Home equity - term 10,099 40 — 1 41 10 10,150 Home equity - lines of credit 156,153 268 — — 268 600 157,021 Installment and other loans 26,052 168 49 14 231 17 26,300 Subtotal 1,947,335 8,671 952 98 9,721 10,310 1,967,366 Loans acquired with credit deterioration: Commercial real estate: Owner occupied 2,456 — — — — — 2,456 Non-owner occupied 329 — — — — — 329 Non-owner occupied residential 1,161 — — 149 149 — 1,310 Commercial and industrial 2,837 — — — — — 2,837 Residential mortgage: First lien 4,341 655 9 307 971 — 5,312 Home equity - term 19 — — — — — 19 Installment and other loans 57 4 — — 4 — 61 Subtotal 11,200 659 9 456 1,124 — 12,324 $ 1,958,535 $ 9,330 $ 961 $ 554 $ 10,845 $ 10,310 $ 1,979,690 The Company maintains its ALL at a level management believes adequate for probable incurred credit losses. The ALL is established and maintained through a provision for loan losses charged to earnings. On a quarterly basis, management assesses the adequacy of the ALL utilizing a defined methodology, which considers specific credit evaluation of impaired loans as discussed above, historical loan loss experience, and qualitative factors. Management believes its approach properly addresses relevant accounting guidance for loans individually identified as impaired and for loans collectively evaluated for impairment, and other bank regulatory guidance. In connection with its quarterly evaluation of the adequacy of the ALL, management reviews its methodology to determine if it properly addresses the current risk in the loan portfolio. For each loan class, general allowances based on quantitative factors, principally historical loss trends, are provided for loans that are collectively evaluated for impairment. An adjustment to historical loss factors may be incorporated for delinquency and other potential risk not elsewhere defined within the ALL methodology. In addition to this quantitative analysis, adjustments to the ALL requirements are allocated on loans collectively evaluated for impairment based on additional qualitative factors, including: Nature and Volume of Loans – including loan growth in the current and subsequent quarters based on the Company’s targeted growth and strategic plan, coupled with the types of loans booked based on risk management and credit culture; the number of exceptions to loan policy; and supervisory loan to value exceptions. Concentrations of Credit and Changes within Credit Concentrations – including the composition of the Company’s overall portfolio makeup and management's evaluation related to concentration risk management and the inherent risk associated with the concentrations identified. Underwriting Standards and Recovery Practices – including changes to underwriting standards and perceived impact on anticipated losses; trends in the number of exceptions to loan policy; supervisory loan to value exceptions; and administration of loan recovery practices. Delinquency Trends – including delinquency percentages noted in the portfolio relative to economic conditions; severity of the delinquencies; and whether the ratios are trending upwards or downwards. Classified Loans Trends – including internal loan ratings of the portfolio; severity of the ratings; whether the loan segment’s ratings show a more favorable or less favorable trend; and underlying market conditions and impact on the collateral values securing the loans. Experience, Ability and Depth of Management/Lending staff – including the years’ experience of senior and middle management and the lending staff; turnover of the staff; and instances of repeat criticisms of ratings. Quality of Loan Review – including the years of experience of the loan review staff; in-house versus outsourced provider of review; turnover of staff and the perceived quality of their work in relation to other external information. National and Local Economic Conditions – including trends in the consumer price index, unemployment rates, the housing price index, housing statistics compared to the prior year, bankruptcy rates, regulatory and legal environment risks and competition. All factors noted above were evaluated and remained unchanged for the nine months ended September 30, 2021, except for a reduction in the National and Local Economic Conditions qualitative factor during the three months ended March 31, 2021. COVID-19 – during the nine months ended September 30, 2020, a qualitative allocation was implemented associated with the potential impact of the COVID-19 pandemic on the Company's commercial loan portfolio. The factor assumes downgrades of loans which were granted deferrals or forbearances based upon identified hardships resulting from the economic shutdown driven by the pandemic. The qualitative reserve on these loans was reduced over time as sustained performance was demonstrated after the loans were removed from deferral status or the forbearance period ended. During the three and nine months ended September 30, 2021, this qualitative reserve was reduced by $1.0 million and $2.7 million, respectively. This reserve is zero at September 30, 2021. The following table presents the activity in the ALL for the three and nine months ended September 30, 2021 and 2020: Commercial Consumer Commercial Acquisition Commercial Municipal Total Residential Installment Total Unallocated Total Three Months Ended September 30, 2021 Balance, beginning of period $ 11,315 $ 1,243 $ 3,495 $ 29 $ 16,082 $ 2,863 $ 227 $ 3,090 $ 209 $ 19,381 Provision for loan losses (179) 290 386 (2) 495 (147) 18 (129) (1) 365 Charge-offs (89) — (55) — (144) — (20) (20) — (164) Recoveries 305 8 60 — 373 5 5 10 — 383 Balance, end of period $ 11,352 $ 1,541 $ 3,886 $ 27 $ 16,806 $ 2,721 $ 230 $ 2,951 $ 208 $ 19,965 September 30, 2020 Balance, beginning of period $ 9,347 $ 1,069 $ 2,916 $ 75 $ 13,407 $ 3,552 $ 386 $ 3,938 $ 172 $ 17,517 Provision for loan losses 1,520 (219) 963 (19) 2,245 (71) 18 (53) 8 2,200 Charge-offs (3) — (193) — (196) — (31) (31) — (227) Recoveries 171 — 45 — 216 6 13 19 — 235 Balance, end of period $ 11,035 $ 850 $ 3,731 $ 56 $ 15,672 $ 3,487 $ 386 $ 3,873 $ 180 $ 19,725 Nine Months Ended September 30, 2021 Balance, beginning of period $ 11,151 $ 1,114 $ 3,942 $ 40 $ 16,247 $ 3,362 $ 324 $ 3,686 $ 218 $ 20,151 Provision for loan losses 133 4 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
LEASES | LEASESA lease provides the lessee the right to control the use of an identified asset for a period of time in exchange for consideration. The Company has primarily entered into operating leases for branches and office space. Most of the Company's leases contain renewal options, which the Company is reasonably certain to exercise. Including renewal options, the Company's leases range from seven The Company uses its incremental borrowing rate to determine the present value of the lease payments, as the rate implicit in the Company's leases is not readily determinable. Lease agreements that contain non-lease components are generally accounted for as a single lease component, while variable costs, such as common area maintenance expenses and property taxes, are expensed as incurred. The following table summarizes the Company's operating leases at September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Operating lease ROU assets $ 9,301 $ 8,686 Operating lease ROU liabilities 9,832 9,143 Weighted-average remaining lease term (in years) 16.0 16.8 Weighted-average discount rate 4.2 % 4.3 % The following table presents information related to the Company's operating leases for the three and nine months ended September 30, 2021 and 2020: Three Months Ended Nine Months Ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Cash paid for operating lease liabilities $ 331 $ 210 $ 947 $ 847 Operating lease expense 388 421 1,179 1,171 The following table presents expected future maturities of the Company's lease liabilities as of September 30, 2021: Remainder of 2021 $ 296 2022 926 2023 951 2024 974 2025 991 Thereafter 10,387 14,525 Less: imputed interest 4,693 Total lease liabilities $ 9,832 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS The following table presents changes in goodwill for the nine months ended September 30, 2021 and 2020: September 30, 2021 September 30, 2020 Balance, beginning of year $ 18,724 $ 19,925 Adjustments to acquired goodwill (1) — (1,201) Balance, end of period $ 18,724 $ 18,724 (1) The Company finalized its purchase accounting adjustments associated with Hamilton as of May 1, 2020. Goodwill is not amortized but is reviewed for potential impairment on at least an annual basis, with testing between annual tests if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit. The Company typically completes its annual goodwill impairment assessment as of November 30. Due to the severe economic impact of COVID-19 and a resulting sustained decline in the Company's market value below book value, management performed a quantitative Step 1 impairment analysis of its goodwill to determine whether the Company's goodwill was impaired as of August 31, 2020. This analysis, which was performed in accordance with ASU 2017-04, Intangibles-Goodwill and Other, considered several factors, such as future cash flow projections and estimated market acquisition premiums in its analysis. In performing the analysis, management made several assumptions with respect to future operating performance, economic and market conditions and various others, many of which required significant judgment. The analysis performed and the related assumptions reflected the best currently available estimates and judgements regarding future performance of the Company. It was concluded that no impairment existed at August 31, 2020 as the calculated fair value of the reporting unit exceeded its book value. No changes have occurred that would impact the results of that analysis through September 30, 2021. The following table presents changes in other intangible assets for the three and nine months ended September 30, 2021 and 2020: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Beginning of period $ 4,800 $ 6,160 $ 5,458 $ 7,180 Amortization expense (314) (357) (972) (1,224) Impairment — — — (153) Balance, end of period $ 4,486 $ 5,803 $ 4,486 $ 5,803 No impairment charges were recorded in the three and nine months ended September 30, 2021. During the nine months ended September 30, 2020, the Company recorded an impairment charge of $153 thousand for the full remaining balance attributable to a customer list intangible asset due to the dissolution of Wheatland Advisors, Inc. The following table presents the components of other identifiable intangible assets at September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Gross Amount Accumulated Gross Amount Accumulated Amortized intangible assets: Core deposit intangibles $ 8,390 $ 3,906 $ 8,390 $ 2,935 Other customer relationship intangibles 25 23 25 22 Total $ 8,415 $ 3,929 $ 8,415 $ 2,957 The following table presents future estimated aggregate amortization expense for intangible assets remaining at September 30, 2021: Remainder of 2021 $ 303 2022 1,105 2023 935 2024 766 2025 596 Thereafter 781 $ 4,486 |
SHARE-BASED COMPENSATION PLANS
SHARE-BASED COMPENSATION PLANS | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION PLANS | SHARE-BASED COMPENSATION PLANS The Company maintains share-based compensation plans under the shareholder-approved 2011 Plan. The purpose of the share-based compensation plans is to provide officers, employees, and non-employee members of the Board of Directors of the Company with additional incentive to further the success of the Company. 881,920 shares of the common stock of the Company were originally reserved, of which 258,020 shares are available to be issued as of September 30, 2021. The 2011 Plan incentive awards may consist of grants of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, deferred stock units and performance shares. All employees and members of the Board of Directors of the Company are eligible to participate in the 2011 Plan. The 2011 Plan allows for the Compensation Committee of the Board of Directors to determine the type of incentive to be awarded, its term, manner of exercise, vesting and restrictions on shares. Generally, awards are nonqualified under the IRC, unless the awards are deemed to be incentive awards to employees at the Compensation Committee’s discretion. The table below presents a summary of nonvested restricted shares activity for the nine months ended September 30, 2021: Shares Weighted Average Grant Date Fair Value Nonvested shares, beginning of year 245,576 $ 21.45 Granted 127,847 19.21 Forfeited (29,388) 19.69 Vested (78,588) 23.52 Nonvested shares, at period end 265,447 $ 19.92 The following table presents restricted shares compensation expense, with tax benefit information, and fair value of shares vested, for the three and nine months ended September 30, 2021 and 2020: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Restricted share award expense $ 468 $ 434 $ 1,380 $ 1,607 Restricted share award tax benefit 98 91 316 337 Fair value of shares vested — 225 1,539 1,314 The unrecognized compensation expense related to the share awards totaled $2.6 million at September 30, 2021 and $2.0 million at December 31, 2020. The unrecognized compensation expense at September 30, 2021 is expected to be recognized over a weighted-average period of 1.8 years. The Company maintains an employee stock purchase plan to provide its employees with an opportunity to purchase Company common stock. Eligible employees may purchase shares in an amount that does not exceed 10% of their annual salary, at the lower of 95% of the fair market value of the shares on the semi-annual offering date or related purchase date. The purchases occur in March and September of each year. The Company reserved 350,000 shares of its common stock to be issued under the employee stock purchase plan. At September 30, 2021, 151,480 shares were available to be issued under the employee stock purchase plan. The following table presents information for the employee stock purchase plan for the three and nine months ended September 30, 2021 and 2020: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Shares purchased 3,271 4,218 8,755 7,831 Weighted average price of shares purchased $ 19.16 $ 13.08 $ 15.58 $ 14.85 Compensation expense recognized 15 3 48 6 The Company issues either new shares or treasury shares, when available, for award through its share-based compensation plans. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used as risk management tools by the Company to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s borrowings and are not used for trading or speculative purposes. The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company, however, discontinues cash flow hedge accounting if it is probable the forecasted hedged transactions will not occur in the initially identified time period due to circumstances, such as the impact of the COVID-19 pandemic. Upon discontinuance, the associated gains and losses deferred in accumulated other comprehensive income (loss) are reclassified immediately into earnings and subsequent changes in the fair value of the cash flow hedge are recognized in earnings. During the three months ended September 30, 2021, the Company terminated its interest rate derivative of $50.0 million that was designated as a cash flow hedge of interest-rate risk associated with overnight borrowings due to the unprecedented nature and impact of the COVID-19 pandemic, and reclassified $398.0 thousand of the realized losses from AOCI to current earnings because the hedged forecasted transaction was determined to be no longer probable of occurring. At December 31, 2020, the Company had one interest rate derivative designated as a hedging instrument with an aggregate notional amount of $50.0 million. At September 30, 2021 and December 31, 2020, the Company had cash collateral of zero and $1.7 million held with the counterparty for these derivatives, respectively. The cash collateral was settled with the derivative counterparty upon termination of the cash flow hedge. The Company enters into interest rate swaps that allow its commercial loan customers to effectively convert a variable-rate commercial loan agreement to a fixed-rate commercial loan agreement. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to an interest rate swap agreement, which serves to effectively swap the customer’s variable-rate loan into a fixed-rate loan. The Company then enters into a corresponding swap agreement with a third party in order to economically hedge its exposure through the customer agreement. The interest rate swaps with both the customers and third parties are not designated as hedges and are marked through earnings. At September 30, 2021, the Company had 11 customer and 11 corresponding third-party broker interest rate derivatives not designated as a hedging instrument with an aggregate notional amount of $64.9 million. The Company had $61.3 million in notional amount of such derivative instruments at December 31, 2020. The Company entered into a risk participation agreement with a financial institution counterparty (the “Agent Bank”) for an interest rate derivative contract related to a loan in which the Company is a participant. The risk participation agreement provides credit protection to the Agent Bank should the borrower fail to perform on its interest rate derivative contracts with the Agent Bank. The Company received an upfront fee of $53 thousand upon entry into the risk participation agreement in the nine months ended September 30, 2021 . The Company manages its credit risk on the risk participation agreement by monitoring the creditworthiness of the borrower, which is based on the same credit review process as though the Company had entered into the derivative instruments directly with the borrow er. The notional amount of such risk participation agreement reflects the Company’s pro-rata share of the derivative instrument, consistent with its share of the related participated loan. As of September 30, 2021 and December 31, 2020, the total notional amount of the risk participation agreement was $15.9 million and zero, respectively. As a part of its normal residential mortgage operations, the Company will enter into an interest rate lock commitment with a potential borrower. The Company will enter into a corresponding commitment with an investor to sell that loan at a specific price shortly after origination. In accordance with FASB ASC 820, adjustments are recorded through earnings to account for the net change in fair value of these transactions. The following table summarizes the fair value of the Company's derivative instruments at September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Notional Amount Balance Sheet Location Fair Value Notional Amount Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate swaps - balance sheet hedge $ — $ — $ 50,000 Other liabilities $ (1,230) Total derivatives designated as hedging instruments $ — $ (1,230) Derivatives not designated as hedging instruments: Interest rate swap - commercial borrower $ 32,462 Other assets $ 277 $ 30,673 Other assets $ 690 Interest rate swap - counterparty 32,462 Other liabilities (269) 30,673 Other liabilities (726) Risk participation 15,855 Other liabilities (3) — — Interest rate lock commitments with customers 22,025 Other assets 546 22,560 Other assets 673 Forward sale commitment 6,198 Other assets 23 10,400 Other liabilities (61) Total derivatives not designated as hedging instruments $ 574 $ 576 The following tables summarize the effect of the Company's derivative financial instruments on OCI and net income for the three and nine months ended September 30, 2021 and 2020: Amount of (Loss) Gain Recognized in OCI on Derivative Amount of Gain (Loss) Recognized in OCI on Derivative Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Derivatives in cash flow hedging relationships: Interest rate products $ (183) $ 208 $ 473 $ (1,893) Total $ (183) $ 208 $ 473 $ (1,893) Amount of Loss Reclassified from AOCI into Income Amount of Loss Reclassified from AOCI into Income Location of Loss Recognized from AOCI into Income Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Derivatives in cash flow hedging relationships: Interest rate products $ (581) $ (114) $ (757) $ (239) Interest expense / Other operating expenses (1) Total $ (581) $ (114) $ (757) $ (239) (1) Includes $514 thousand recorded to other operating expenses due to the loss from the termination of an interest rate swap designated as a cash flow hedge. Amount of Gain (Loss) Recognized in Income Amount of Gain (Loss) Recognized in Income Location of Gain (Loss) Recognized in Income Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Derivatives not designated as hedging instruments: Interest rate products $ 8 $ (4) $ 44 $ (21) Other operating expenses Risk participation agreement 1 — (3) — Other operating expenses Interest rate lock commitments with customers 89 157 (128) 1,040 Mortgage banking activities Forward sale commitment 1 71 84 (126) Mortgage banking activities Total $ 99 $ 224 $ (3) $ 893 The following table is a summary of components for interest rate swaps designated as hedging at September 30, 2021 and December 31, 2020. During the three and nine months ended September 30, 2021, the Company terminated its interest rate derivative of $50.0 million. September 30, 2021 December 31, 2020 Weighted average pay rate — % 0.77 % Weighted average receive rate — % 0.09 % Weighted average maturity in years 0.0 4.2 |
SHAREHOLDERS' EQUITY AND REGULA
SHAREHOLDERS' EQUITY AND REGULATORY CAPITAL | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY AND REGULATORY CAPITAL | SHAREHOLDERS’ EQUITY AND REGULATORY CAPITAL Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Under the Basel Committee on Banking Supervision's capital guidelines for U.S. Banks ("Basel III rules"), an entity must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The Company and the Bank have elected not to include net unrealized gain or loss on available for sale securities in computing regulatory capital. The consolidated asset limit on small bank holding companies is $3.0 billion and a company with assets under that limit is not subject to the FRB consolidated capital rules, but may file reports that include capital amounts and ratios. The Company has elected to file those reports. Management believes that the Company and the Bank met all capital adequacy requirements to which they are subject at September 30, 2021 and December 31, 2020. Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At September 30, 2021, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Bank's classification. The following table presents capital amounts and ratios at September 30, 2021 and December 31, 2020: Actual For Capital Adequacy Purposes To Be Well Amount Ratio Amount Ratio Amount Ratio September 30, 2021 Total risk-based capital: Orrstown Financial Services, Inc. $ 291,785 15.6 % $ 195,965 10.5 % n/a n/a Orrstown Bank 273,583 14.7 % 195,899 10.5 % $ 186,570 10.0 % Tier 1 risk-based capital: Orrstown Financial Services, Inc. 238,492 12.8 % 158,639 8.5 % n/a n/a Orrstown Bank 252,238 13.5 % 158,585 8.5 % 149,256 8.0 % Tier 1 common equity risk-based capital: Orrstown Financial Services, Inc. 238,492 12.8 % 130,644 7.0 % n/a n/a Orrstown Bank 252,238 13.5 % 130,599 7.0 % 121,271 6.5 % Tier 1 leverage capital: Orrstown Financial Services, Inc. 238,492 8.3 % 115,630 4.0 % n/a n/a Orrstown Bank 252,238 8.7 % 115,706 4.0 % 144,633 5.0 % December 31, 2020 Total risk-based capital: Orrstown Financial Services, Inc. $ 271,184 15.6 % $ 183,099 10.5 % n/a n/a Orrstown Bank 256,376 14.7 % 183,012 10.5 % $ 174,297 10.0 % Tier 1 risk-based capital: Orrstown Financial Services, Inc. 217,582 12.5 % 148,223 8.5 % n/a n/a Orrstown Bank 234,677 13.5 % 148,152 8.5 % 139,437 8.0 % Tier 1 common equity risk-based capital: Orrstown Financial Services, Inc. 217,582 12.5 % 122,066 7.0 % n/a n/a Orrstown Bank 234,677 13.5 % 122,008 7.0 % 113,293 6.5 % Tier 1 leverage capital: Orrstown Financial Services, Inc. 217,582 8.1 % 108,063 4.0 % n/a n/a Orrstown Bank 234,677 8.7 % 108,148 4.0 % 135,185 5.0 % In September 2015, the Board of Directors of the Company authorized a share repurchase program under which the Company may repurchase up to 5% of the Company's outstanding shares of common stock, or approximately 416,000 shares, in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Exchange Act of 1934, as amended. On April 19, 2021, the Board of Directors authorized the additional future repurchase of up to 562,000 shares of its outstanding common stock. As of September 30, 2021, 201,518 shares had been repurchased at a total cost of $3.7 million, or $18.26 per share. Common stock available for future repurchase totals approximately 776,482 shares, or 7% of the Company's outstanding common stock at September 30, 2021. When and if appropriate, repurchases may be made in the open market or privately negotiated transactions, depending on market conditions, regulatory requirements and other corporate considerations, as determined by management. Share repurchases may not occur and may be discontinued at any time. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table presents earnings per share for the three and nine months ended September 30, 2021 and 2020: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net income $ 7,192 $ 4,977 $ 26,175 $ 16,404 Weighted average shares outstanding - basic 10,979 10,941 10,976 10,939 Dilutive effect of share-based compensation 143 84 127 88 Weighted average shares outstanding - diluted 11,122 11,025 11,103 11,027 Per share information: Basic earnings per share $ 0.66 $ 0.45 $ 2.38 $ 1.50 Diluted earnings per share 0.65 0.45 2.36 1.49 |
FINANCIAL INSTRUMENTS WITH OFF-
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK | FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the unaudited condensed consolidated balance sheets. The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit and financial guarantees written is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The following table presents these contractual, or notional, amounts: Contractual or Notional Amount September 30, 2021 December 31, 2020 Commitments to fund: Home equity lines of credit $ 251,607 $ 223,216 1-4 family residential construction loans 35,519 28,928 Commercial real estate, construction and land development loans 122,850 60,606 Commercial, industrial and other loans 339,569 268,931 Standby letters of credit 21,423 14,491 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit-worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the customer. Collateral varies but may include accounts receivable, inventory, equipment, residential real estate, and income-producing commercial properties. Standby letters of credit and financial guarantees written are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. The Company holds collateral supporting those commitments when deemed necessary by management. The liability, at September 30, 2021 and December 31, 2020, for guarantees under standby letters of credit issued was not considered to be material. |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Certain financial instruments and all non-financial instruments are excluded from disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are: Level 1 – quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access at the measurement date. Level 2 – significant other observable inputs other than Level 1 prices such as prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 – at least one significant unobservable input that reflects a company's own assumptions about the assumptions that market participants would use in pricing an asset or liability. In instances in which multiple levels of inputs are used to measure fair value, hierarchy classification is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The Company used the following methods and significant assumptions to estimate fair value for instruments measured on a recurring basis: Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include highly liquid government bonds, mortgage products and exchange traded equities. If quoted market prices are not available, securities are classified within Level 2 and fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flow. Level 2 securities include U.S. agency securities, mortgage-backed securities, obligations of states and political subdivisions and certain corporate, asset backed and other securities. In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy. The Company’s investment securities are classified as available for sale. The fair values of interest rate swaps and risk participation derivatives are determined using models that incorporate readily observable market data into a market standard methodology. This methodology nets the discounted future cash receipts and the discounted expected cash payments. The discounted variable cash receipts and payments are based on expectations of future interest rates derived from observable market interest rate curves. In addition, fair value is adjusted for the effect of nonperformance risk by incorporating credit valuation adjustments for the Company and its counterparties. These assets and liabilities are classified as Level 2 fair values, based upon the lowest level of input that is significant to the fair value measurements. The following table summarizes assets measured at fair value on a recurring basis at September 30, 2021 and December 31, 2020: Level 1 Level 2 Level 3 Total Fair September 30, 2021 Financial Assets Investment securities: U.S. Treasury securities $ 19,831 $ — $ — $ 19,831 States and political subdivisions — 171,304 10,217 181,521 GSE residential MBSs — 20,518 — 20,518 GSE residential CMOs — 70,187 — 70,187 Nonagency CMOs — 12,400 13,257 25,657 Asset-backed — 126,907 — 126,907 Other 397 — — 397 Loans held for sale — 6,412 — 6,412 Derivatives — 277 546 823 Totals $ 20,228 $ 408,005 $ 24,020 $ 452,253 Financial Liabilities Derivatives $ — $ 272 $ — $ 272 December 31, 2020 Financial Assets Investment securities: States and political subdivisions $ — $ 103,591 $ 9,079 $ 112,670 GSE residential MBSs — 4,293 — 4,293 GSE residential CMOs — 58,011 — 58,011 Nonagency CMOs — — 16,918 16,918 Private label commercial CMOs — 56,730 5,506 62,236 Asset-backed — 211,966 — 211,966 Other 371 — — 371 Loans held for sale — 11,734 — 11,734 Derivatives — 690 673 1,363 Totals $ 371 $ 447,015 $ 32,176 $ 479,562 Financial Liabilities Derivatives $ — $ 1,956 $ — $ 1,956 The Company h ad one municipal bond and one CMO measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at September 30, 2021. At December 31, 2020 , this municipal bond as well as three CMOs were measured on a recurring basis using Level 3 unobservable inputs. One of the CMOs held at December 31, 2020 was sold and one was called in the nine months ended September 30, 2021 . The Level 3 valuation is based on a non-executable broker quote, which is considered a significant unobservable input. Such quotes are updated as available and may remain constant for a period of time for certain broker-quoted securities that do not move with the market or that are not interest rate sensitive as a result of their structure or overall attributes. The Company’s residential mortgage loans held for sale are recorded at fair value utilizing Level 2 measurements. This fair value measurement is determined based upon third party quotes obtained on similar loans. For loans held for sale for which the fair value option has been elected, the aggregate fair value exceeded the aggregate principal balance by $151 thousand as of September 30, 2021. The determination of the fair value of interest rate lock commitments on residential mortgages is based on agreed upon pricing with the respective investor on each loan and includes a pull through percentage. The pull through percentage represents an estimate of loans in the pipeline to be delivered to an investor versus the total loans committed for delivery. Significant changes in this input could result in a significantly higher or lower fair value measurement. As the pull through percentage is a significant unobservable input, this is deemed a Level 3 valuation input. The average pull through percentage, which is based upon historical experience, was 89% as of September 30, 2021. An increase or decrease of 5% in the pull through assumption would result in a positive or negative change of $26 thousand in the fair value of interest rate lock commitments at September 30, 2021. The following provides details of the Level 3 fair value measurement activity for the periods ended September 30, 2021 and 2020: Investment securities: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Balance, beginning of period $ 24,925 $ 23,834 $ 31,503 $ 24,279 Unrealized (loss) gain included in OCI (964) 200 467 (229) Principal payments and other (487) (142) (4,951) (158) Sales — — (3,545) — Balance, end of period $ 23,474 $ 23,892 $ 23,474 $ 23,892 Interest rate lock commitments on residential mortgages: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Balance, beginning of period $ 456 $ 986 $ 673 $ 103 Total gains (losses) Included in earnings 90 157 (127) 1,040 Balance, end of period $ 546 $ 1,143 $ 546 $ 1,143 Certain financial assets are measured at fair value on a nonrecurring basis. Adjustments to the fair value of these assets usually results from the application of lower of cost or market accounting or write-downs of individual assets. The Company used the following methods and significant assumptions to estimate fair value for these financial assets. Impaired Loans Loans are designated as impaired when, in the judgment of management and based on current information and events, it is probable that all amounts due, according to the contractual terms of the loan agreement, will not be collected. The measurement of loss associated with impaired loans for all loan classes can be based on either the observable market price of the loan, the fair value of the collateral, or discounted cash flows using the rate of return implicit in the original loan for TDRs. For collateral-dependent loans, fair value is measured based on the value of the collateral securing the loan, less estimated costs to sell. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. The value of the real estate collateral is determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed appraiser outside of the Company using observable market data (Level 2). However, if the collateral is a house or building in the process of construction, or if management adjusts the appraisal value, then the fair value is considered Level 3. The value of business equipment is based upon an outside appraisal, if deemed significant, or the net book value on the applicable business’ financial statements if not considered significant using observable market data. Likewise, values for inventory and accounts receivable collateral are based on financial statement balances or aging reports (Level 3). Impaired loans with an allocation to the ALL are measured at fair value on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as provision for loan losses on the unaudited condensed consolidated statements of income. Any changes in the fair value of impaired loans still held were not material for the three and nine months ended September 30, 2021 and 2020. Foreclosed Real Estate OREO property acquired through foreclosure is initially recorded at the fair value of the property at the transfer date less estimated selling cost. Subsequently, OREO is carried at the lower of its carrying value or the fair value less estimated selling cost. Fair value is usually determined based upon an independent third-party appraisal of the property or occasionally upon a recent sales offer. The Company had no OREO balances at September 30, 2021 and December 31, 2020. Mortgage Servicing Rights The MSR fair value is estimated to be equal to its carrying value, unless the quarterly valuation model calculates the present value of the estimated net servicing income is less than its carrying value, in which case an impairment charge is taken. At September 30, 2021 and December 31, 2020, an impairment reserve of $372 thousand and $1.1 million, respectively, existed on the mortgage servicing right portfolio. For the three months ended September 30, 2021 and 2020, an impairment valuation allowance reversal of $43 thousand and an impairment charge of $166 thousand were included, respectively, in mortgage banking activities on the unaudited condensed consolidated statements of income. For the nine months ended September 30, 2021 and 2020, an impairment valuation allowance reversal of $695 thousand and an impairment charge of $986 thousand, respectively, were included in mortgage banking activities on the unaudited condensed consolidated statements of income. The impairment charges in 2020 resulted from rapidly declining market rates caused by the COVID-19 pandemic. The reversals in the three and nine months ended September 30, 2021 were due to a subsequent increase in market rates. The following table summarizes assets measured at fair value on a nonrecurring basis at September 30, 2021 and December 31, 2020: Level 1 Level 2 Level 3 Total September 30, 2021 Impaired Loans Commercial real estate: Owner occupied $ — $ — $ 776 $ 776 Non-owner occupied residential — — 69 69 Residential mortgage: First lien — — 677 677 Home equity - lines of credit — — 77 77 Total impaired loans $ — $ — $ 1,599 $ 1,599 Mortgage servicing rights $ — $ — $ 3,642 $ 3,642 December 31, 2020 Impaired Loans Commercial real estate: Owner occupied $ — $ — $ 846 $ 846 Non-owner occupied residential — — 36 36 Commercial and industrial — — 12 12 Residential mortgage: First lien — — 638 638 Home equity - lines of credit — — 89 89 Total impaired loans $ — $ — $ 1,621 $ 1,621 Mortgage servicing rights $ — $ — $ 2,745 $ 2,745 The following table presents additional qualitative information about assets measured on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value: Fair Value Valuation Unobservable Input Range September 30, 2021 Impaired loans $ 1,599 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 10% - 25% discount - Management adjustments for liquidation expenses 6% - 18% discount Mortgage servicing rights $ 3,642 Discounted cash flows Weighted average CPR 14.53% - Weighted average discount rate 9.04% December 31, 2020 Impaired loans $ 1,621 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 5% - 25% discount - Management adjustments for liquidation expenses 6% - 19% discount Mortgage servicing rights $ 2,745 Discounted cash flows Weighted average CPR 18.02% - Weighted average discount rate 9.56% Fair values of financial instruments The following table presents carrying amounts and estimated fair values of the Company’s financial instruments at September 30, 2021 and December 31, 2020: Carrying Fair Value Level 1 Level 2 Level 3 September 30, 2021 Financial Assets Cash and due from banks $ 36,920 $ 36,920 $ 36,920 $ — $ — Interest-bearing deposits with banks 274,495 274,495 274,495 — — Restricted investments in bank stocks 7,051 n/a n/a n/a n/a Investment securities 445,018 445,018 20,228 401,316 23,474 Loans held for sale 6,412 6,412 — 6,412 — Loans, net of allowance for loan losses 1,919,799 1,917,091 — — 1,917,091 Derivatives 823 823 — 277 546 Accrued interest receivable 8,015 8,015 — 2,169 5,846 Financial Liabilities Deposits 2,502,108 2,503,695 — 2,503,695 — Securities sold under agreements to repurchase 27,595 27,595 — 27,595 — FHLB advances and other 2,003 2,176 — 2,176 — Subordinated notes 31,948 32,781 — 32,781 — Derivatives 272 272 — 272 — Accrued interest payable 631 631 — 631 — Off-balance sheet instruments — — — — — December 31, 2020 Financial Assets Cash and due from banks $ 26,203 $ 26,203 $ 26,203 $ — $ — Interest-bearing deposits with banks 99,055 99,055 99,055 — — Restricted investments in bank stocks 10,563 n/a n/a n/a n/a Investment securities 466,465 466,465 371 434,591 31,503 Loans held for sale 11,734 11,734 — 11,734 — Loans, net of allowance for loan losses 1,959,539 1,953,860 — — 1,953,860 Derivatives 1,363 1,363 — 690 673 Accrued interest receivable 8,927 8,927 — 1,529 7,398 Financial Liabilities Deposits 2,356,880 2,359,317 — 2,359,317 — Securities sold under agreements to repurchase 19,466 19,466 — 19,466 — FHLB advances and other 58,045 58,298 — 58,298 — Subordinated notes 31,903 31,712 — 31,712 — Derivatives 1,956 1,956 — 1,956 — Accrued interest payable 238 238 — 238 — Off-balance sheet instruments — — — — — The methods used to estimate the fair value of financial instruments at September 30, 2021 and December 31, 2020 did not necessarily represent an exit price. In accordance with the Company's adoption of ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, the methods utilized to measure the fair value of financial instruments at September 30, 2021 and December 31, 2020 represent an approximation of exit price; however, an actual exit price may differ. |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES The nature of the Company’s business generates a certain amount of litigation involving matters arising out of the ordinary course of business. Except as described below, in the opinion of management, there are no legal proceedings that might have a material effect on the results of operations, liquidity, or the financial position of the Company at this time. On March 5, 2019, Paul Parshall, a purported individual stockholder of Hamilton, filed, on behalf of himself and all of Hamilton’s stockholders other than the named defendants and their affiliates (the “Purported Class”), a derivative and putative class action complaint in the Circuit Court for Baltimore City, Maryland, captioned Paul Parshall v. Carol Coughlin et. al., naming each Hamilton director, Orrstown, and Hamilton as defendants (the “Action”). The Action alleged, among other things, that Hamilton’s directors breached their fiduciary duties to the Purported Class in connection with the merger, and that the Proxy Statement/Prospectus omitted certain material information regarding the merger. Orrstown was alleged to have aided and abetted the Hamilton directors’ alleged breaches of their fiduciary duties. The Action sought, among other remedies, to enjoin the merger or, in the event the merger was completed, rescission of the merger or rescissory damages; unspecified damages; and costs of the lawsuit, including attorneys’ and experts’ fees. A settlement was reached on the Action in March 2020 which resulted in a payment by the Company of $135 thousand in mootness fees to the defendants in April 2020. On May 25, 2012, SEPTA filed a putative class action complaint in the U.S. District Court for the Middle District of Pennsylvania against the Company, the Bank and certain current and former directors and officers (collectively, the “Orrstown Defendants”). The complaint alleged, among other things, that (i) in connection with the Company’s Registration Statement on Form S-3 dated February 23, 2010 and its Prospectus Supplement dated March 23, 2010, and (ii) during the purported class period of March 24, 2010 through October 27, 2011, the Company issued materially false and misleading statements regarding the Company’s lending practices and financial results, including misleading statements concerning the stringent nature of the Bank’s credit practices and underwriting standards, the quality of its loan portfolio, and the intended use of the proceeds from the Company’s March 2010 public offering of common stock. The complaint asserted claims under Sections 11, 12(a) and 15 of the Securities Act of 1933, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and sought class certification, unspecified money damages, interest, costs, fees and equitable or injunctive relief. Under the Private Securities Litigation Reform Act of 1995 (“PSLRA”), the Court appointed SEPTA Lead Plaintiff on August 20, 2012. On March 4, 2013, SEPTA filed an amended complaint. The amended complaint expanded the list of defendants in the action to include the Company’s former independent registered public accounting firm, Smith Elliott Kearns & Company, LLC (“SEK”), and the underwriters of the Company’s March 2010 public offering of common stock. In addition, among other things, the amended complaint extended the purported 1934 Exchange Act class period from March 15, 2010 through April 5, 2012. On June 22, 2015, in a 96-page Memorandum, the Court dismissed without prejudice SEPTA’s amended complaint against all defendants, finding that SEPTA failed to state a claim under either the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. On February 8, 2016, the Court granted SEPTA’s motion for leave to amend again and SEPTA filed its second amended complaint that same day. On December 7, 2016, the Court issued an Order and Memorandum granting in part and denying in part defendants’ motions to dismiss SEPTA’s second amended complaint. The Court granted the motions to dismiss the Securities Act claims against all defendants, and granted the motions to dismiss the Exchange Act Section 10(b) and Rule 10b-5 claims against all defendants except Orrstown Financial Services, Inc., Orrstown Bank, Thomas R. Quinn, Jr., Bradley S. Everly, and Jeffrey W. Embly. The Court also denied the motions to dismiss the Exchange Act Section 20(a) claims against Quinn, Everly, and Embly. On December 15, 2017, the Orrstown Defendants and SEPTA exchanged expert reports in opposition to and in support of class certification, respectively. On January 15, 2018, the parties exchanged expert rebuttal reports. SEPTA has not yet filed a motion for class certification. On August 9, 2018, SEPTA filed a motion to compel the production of Confidential Supervisory Information (CSI) of non-parties the Board of Governors of the FRB and the Pennsylvania Department of Banking and Securities, in the possession of Orrstown and third parties. On August 30, 2018, the FRB filed an unopposed motion to intervene in the Action for the purpose of opposing SEPTA’s motion to compel. On February 12, 2019, the Court denied SEPTA’s motion to compel the production of CSI on the ground that SEPTA had failed to exhaust its administrative remedies. On April 11, 2019, SEPTA filed a motion for leave to file a third amended complaint. The proposed third amended complaint seeks to reassert the Securities Act claims that the Court dismissed as to all defendants on December 7, 2016, when the Court granted in part and denied in part defendants’ motions to dismiss SEPTA’s second amended complaint. The proposed third amended complaint also seeks to reassert the Exchange Act claims against those defendants that the Court dismissed from the case on December 7, 2016. On June 13, 2019, Orrstown filed a motion for protective order to stay discovery pending resolution of SEPTA’s motion for leave to file a third amended complaint. On July 17, 2019, the Court entered an Order partially granting Orrstown’s motion for protective order, ruling that all deposition discovery in the case was stayed pending a decision on SEPTA’s motion for leave to file a third amended complaint. Party and non-party document discovery in the case has largely been completed. On February 14, 2020, the Court issued an Order and Memorandum granting SEPTA’s motion for leave to file a third amended complaint. The third amended complaint is now the operative complaint. It reinstates the Orrstown Defendants, as well as SEK and the underwriter defendants, previously dismissed from the case on December 7, 2016. The third amended complaint also revives the previously dismissed Securities Act claim against the Orrstown Defendants, SEK, and the underwriter defendants. Defendants filed their motions to dismiss the third amended complaint on April 24, 2020. SEPTA’s opposition was filed on July 8, 2020, and Orrstown’s reply brief was filed on August 12, 2020. Additionally, on February 24, 2020, the Orrstown Defendants, and the underwriter defendants and SEK, separately filed motions under 28 U.S.C. § 1292(b) asking the District Court to certify its February 14, 2020 Order granting leave to file the third amended complaint for interlocutory appeal to the Third Circuit Court of Appeals. The District Court granted those motions on July 17, 2020, and defendants filed their Petition for Permission to Appeal with the Third Circuit on July 27, 2020. The Third Circuit granted permission to appeal the Order pursuant to 28 U.S.C. § 1292(b) on August 13, 2020. Defendants filed their joint Opening Brief in the Third Circuit on November 2, 2020, asking the Court to reverse the district court’s Order. SEPTA filed its responsive brief on December 2, 2020 and defendants filed their reply brief on December 23, 2020. Oral argument was held on February 10, 2021. On September 2, 2021, the Third Circuit affirmed the District Court's February 14, 2020 Order granting SEPTA leave to file a third amended complaint. Defendants' motions to dismiss the third amended complaint are still pending in the District Court. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations – Orrstown Financial Services, Inc. is a financial holding company that operates Orrstown Bank, a commercial bank providing banking and financial advisory services in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry and York Counties, Pennsylvania, and in Anne Arundel, Baltimore, Howard and Washington Counties, Maryland, as well as Baltimore City, Maryland. The Company operates in the community banking segment and engages in lending activities, including commercial, residential, commercial mortgages, construction, municipal, and various forms of consumer lending, and deposit services, including checking, savings, time, and money market deposits. The Company also provides fiduciary services, investment advisory, insurance and brokerage services. The Company and the Bank are subject to regulation by certain federal and state agencies and undergo periodic examinations by such regulatory authorities. |
Basis of Presentation | Basis of Presentation – The accompanying unaudited condensed consolidated financial statements include the accounts of Orrstown Financial Services, Inc. and its wholly owned subsidiary, the Bank. The Company has prepared these unaudited condensed consolidated financial statements in accordance with GAAP for interim financial information, SEC rules that permit reduced disclosure for interim periods, and Article 10 of Regulation S-X. In the opinion of management, all adjustments (all of which are of a normal recurring nature) that are necessary for a fair statement are reflected in the unaudited condensed consolidated financial statements. The December 31, 2020 consolidated balance sheet information contained in this Quarterly Report on Form 10-Q was derived from the Company's 2020 audited consolidated financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Operating results for the nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. All significant intercompany transactions and accounts have been eliminated. The Company's management has evaluated all activity of the Company and concluded that subsequent events are properly reflected in the Company's unaudited condensed consolidated financial statements and notes as required by GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The effects of the COVID-19 pandemic may impact material estimates. Material estimates that are particularly susceptible to significant change include the determination of the ALL and those used in valuation methodologies in areas with no observable market, such as loans, deposits, borrowings, goodwill, core deposit and other intangible assets, mortgage servicing rights, other assets and liabilities obtained or assumed in business combinations. Certain prior-year amounts have been reclassified to conform to the current year presentation. These reclassifications did not have a material impact on the Company's consolidated financial condition or results of operations. |
Derivatives | Derivatives - FASB ASC 815, Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. The Company's objectives in using interest rate derivatives are to add stability to interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of fixed amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. Changes to the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income and are subsequently reclassified into earnings in the period that the hedged transaction affects earnings. The Company discontinues cash flow hedge accounting if it is probable the forecasted hedged transactions will not occur in the initially identified time period due to circumstances, such as the impact of the COVID-19 pandemic. Upon discontinuance, the associated gains and losses deferred in accumulated other comprehensive income (loss) are reclassified immediately into earnings and subsequent changes in the fair value of the cash flow hedge are recognized in earnings. S uch derivatives were used to hedge the variable cash flows associated with overnight borrowings. During the three and nine months ended September 30, 2021, the Company terminated its interest rate derivative designated as a cash flow hedge . |
Leases | Leases - The Company evaluates its contracts at inception to determine if an arrangement either is a lease or contains one. Operating lease ROU assets are included in other assets and operating lease liabilities in accrued interest payable and other liabilities in the unaudited condensed consolidated balance sheets. The Company had no finance leases at September 30, 2021. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company's leases do not provide an implicit rate, so the Company's incremental borrowing rate is used, which approximates its fully collateralized borrowing rate, based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is reevaluated upon lease modification. The operating lease ROU asset also includes any initial direct costs and prepaid lease payments made less any lease incentives. In calculating the present value of lease payments, the Company may include options to extend the lease when it is reasonably certain that it will exercise that option. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements - ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ( "ASU 2016-13" ). The amendments in this update require an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. Organizations will continue to use judgment to determine which loss estimation method is appropriate for their circumstances. Additionally, the amendments in this update amend the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. For certain public companies, this update was effective for interim and annual periods beginning after December 15, 2019. The Company delayed the adoption of ASU 2016-13 as noted below. ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates ("ASU 2019-10"), extended the implementation deadline of ASU 2016-13 for smaller reporting and other companies until the fiscal year and interim periods beginning after December 15, 2022. The Company meets the requirements to be considered a smaller reporting company under SEC Regulation S-K and SEC Rule 405, and did not adopt ASU 2016-13 on January 1, 2020. The Company is evaluating the impact of the delay for adoption of ASU 2016-13, and is working with a third-party vendor solution to assist with the application of ASU 2016-13 and finalizing the loss estimation models to be used. Once management determines which methods will be utilized, a third party will be contracted to perform a model validation prior to adoption. While the Company anticipates the allowance for loan losses will increase under its current assumptions, it expects the impact of adopting ASU 2016-13 will be influenced by the composition, characteristics and quality of its loan and securities portfolios, as well as general economic conditions and forecasts at the adoption date. The other provisions of ASU 2019-10 were not applicable to the Company. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). ASU 2020-04 contains optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The optional expedients apply consistently to all contracts or transactions within the scope of this topic, while the optional expedients for hedging relationships can be elected on an individual basis. The Company has formed a cross-functional working group to lead the transition from LIBOR to a planned adoption of an alternate index. The Company currently plans to replace LIBOR with the 30-Day Average SOFR in its loan agreements. The Company is in the process of implementing fallback language for loans that will mature after 2021. The Company expects to adopt the LIBOR transition relief allowed under this standard, and is currently evaluating the potential impact of this guidance on its financial statements. |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Amortized Cost and Fair Values of AFS Securities | At September 30, 2021 and December 31, 2020, all investment securities were classified as AFS. The following table summarizes amortized cost and fair value of investment securities, and the corresponding amounts of gross unrealized gains and losses recognized in AOCI, at September 30, 2021 and December 31, 2020: Amortized Cost Gross Unrealized Gross Unrealized Fair Value September 30, 2021 U.S. Treasury securities $ 20,087 $ — $ 256 $ 19,831 States and political subdivisions 174,239 8,072 790 181,521 GSE residential MBSs 20,552 80 114 20,518 GSE residential CMOs 69,922 921 656 70,187 Non-agency CMOs 25,929 1 273 25,657 Asset-backed 126,726 457 276 126,907 Other 397 — — 397 Totals $ 437,852 $ 9,531 $ 2,365 $ 445,018 December 31, 2020 States and political subdivisions $ 104,704 $ 9,091 $ 1,125 $ 112,670 GSE residential MBSs 4,197 96 — 4,293 GSE residential CMOs 56,856 2,226 1,071 58,011 Non-agency CMOs 16,505 413 — 16,918 Private label commercial CMOs 63,941 57 1,762 62,236 Asset-backed 214,425 171 2,630 211,966 Other 371 — — 371 Totals $ 460,999 $ 12,054 $ 6,588 $ 466,465 |
Summary of AFS Securities with Unrealized Losses | The following table summarizes investment securities with unrealized losses at September 30, 2021 and December 31, 2020, aggregated by major investment security type and the length of time in a continuous unrealized loss position. Less Than 12 Months 12 Months or More Total # of Securities Fair Value Unrealized # of Securities Fair Value Unrealized # of Securities Fair Value Unrealized September 30, 2021 U.S. Treasury securities 3 $ 19,831 $ 256 — $ — $ — 3 $ 19,831 $ 256 States and political subdivisions 11 40,666 790 — — — 11 40,666 790 GSE residential MBSs 5 17,354 114 — — — 5 17,354 114 GSE residential CMOs 7 43,267 656 — — — 7 43,267 656 Non-agency CMOs 1 13,257 273 — — — 1 13,257 273 Asset-backed 2 19,084 14 3 36,067 262 5 55,151 276 Totals 29 $ 153,459 $ 2,103 3 $ 36,067 $ 262 32 $ 189,526 $ 2,365 December 31, 2020 States and political subdivisions 1 $ 9,079 $ 1,125 — $ — $ — 1 $ 9,079 $ 1,125 GSE residential CMOs 3 23,954 1,071 — — — 3 23,954 1,071 Private label commercial CMOs 1 4,314 685 10 42,403 1,077 11 46,717 1,762 Asset-backed 2 16,921 12 15 183,161 2,618 17 200,082 2,630 Totals 7 $ 54,268 $ 2,893 25 $ 225,564 $ 3,695 32 $ 279,832 $ 6,588 |
Schedule of Amortized Cost and Fair Values of AFS Securities by Contractual Maturity | The following table summarizes amortized cost and fair value of investment securities by contractual maturity at September 30, 2021. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately. Amortized Cost Fair Value Due in one year or less $ — $ — Due after one year through five years 249 249 Due after five years through ten years 69,999 71,976 Due after ten years 124,475 129,524 CMOs and MBSs 116,403 116,362 Asset-backed 126,726 126,907 Totals $ 437,852 $ 445,018 |
Proceeds From Sale of AFS Securities and Gross Gains and Gross Losses | The following table summarizes proceeds from sales of investment securities and gross gains and gross losses for the three and nine months ended September 30, 2021 and 2020: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Proceeds from sale of investment securities $ 73,319 $ — $ 149,038 $ — Gross gains 482 — 1,844 — Gross losses 3 13 1,209 44 |
LOANS AND ALLOWANCE FOR LOAN _2
LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Summary of Loan Portfolio, Excluding Residential Loans Held for Sale, Broken Out by Classes | The following table presents the loan portfolio by segment and class, excluding residential mortgage LHFS, at September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Commercial real estate: Owner occupied $ 196,585 $ 174,908 Non-owner occupied 509,703 409,567 Multi-family 112,002 113,635 Non-owner occupied residential 100,088 114,505 Acquisition and development: 1-4 family residential construction 12,246 9,486 Commercial and land development 71,784 51,826 Commercial and industrial (1) 540,205 647,368 Municipal 13,631 20,523 Residential mortgage: First lien 203,360 244,321 Home equity - term 7,079 10,169 Home equity - lines of credit 154,004 157,021 Installment and other loans 19,077 26,361 Total loans $ 1,939,764 $ 1,979,690 (1) This balance includes $259.9 million and $403.3 million of SBA PPP loans, net of deferred fees and costs, at September 30, 2021 and December 31, 2020, respectively. |
Loan Portfolio Ratings Based on Internal Risk Rating System | The following table summarizes the Company’s loan portfolio ratings based on its internal risk rating system at September 30, 2021 and December 31, 2020: Pass Special Mention Non-Impaired Substandard Impaired - Substandard Doubtful PCI Loans Total September 30, 2021 Commercial real estate: Owner occupied $ 176,029 $ 8,219 $ 6,147 $ 3,832 $ — $ 2,358 $ 196,585 Non-owner occupied 476,947 32,272 168 — — 316 509,703 Multi-family 91,726 19,662 614 — — — 112,002 Non-owner occupied residential 95,338 2,028 1,344 171 — 1,207 100,088 Acquisition and development: 1-4 family residential construction 12,246 — — — — — 12,246 Commercial and land development 70,648 636 500 — — — 71,784 Commercial and industrial 521,530 7,939 5,505 2,941 — 2,290 540,205 Municipal 13,631 — — — — — 13,631 Residential mortgage: First lien 195,717 — 240 2,472 — 4,931 203,360 Home equity - term 7,056 — — 7 — 16 7,079 Home equity - lines of credit 153,436 21 52 495 — — 154,004 Installment and other loans 19,002 — — 37 — 38 19,077 $ 1,833,306 $ 70,777 $ 14,570 $ 9,955 $ — $ 11,156 $ 1,939,764 December 31, 2020 Commercial real estate: Owner occupied $ 148,846 $ 12,491 $ 7,855 $ 3,260 $ — $ 2,456 $ 174,908 Non-owner occupied 351,860 57,378 — — — 329 409,567 Multi-family 92,769 20,224 642 — — — 113,635 Non-owner occupied residential 107,557 3,948 1,422 268 — 1,310 114,505 Acquisition and development: 1-4 family residential construction 9,101 385 — — — — 9,486 Commercial and land development 49,832 655 525 814 — — 51,826 Commercial and industrial 617,213 17,561 6,118 3,639 — 2,837 647,368 Municipal 20,523 — — — — — 20,523 Residential mortgage: First lien 236,381 — — 2,628 — 5,312 244,321 Home equity - term 10,076 — 64 10 — 19 10,169 Home equity - lines of credit 156,264 95 54 608 — — 157,021 Installment and other loans 26,283 — — 17 — 61 26,361 $ 1,826,705 $ 112,737 $ 16,680 $ 11,244 $ — $ 12,324 $ 1,979,690 |
Impaired Loans by Segment and Class | The following table, which excludes accruing PCI loans, summarizes impaired loans by segment and class, segregated by those for which a specific allowance was required and those for which a specific allowance was not required at September 30, 2021 and December 31, 2020. The recorded investment in loans excludes accrued interest receivable due to insignificance. Related allowances established generally pertain to those loans in which loan forbearance agreements were in the process of being negotiated or updated appraisals were pending, and any partial charge-off will be recorded when final information is received. Impaired Loans with a Specific Allowance Impaired Loans with No Specific Allowance Recorded Investment (Book Balance) Unpaid Principal Balance (Legal Balance) Related Allowance Recorded Investment (Book Balance) Unpaid Principal Balance (Legal Balance) September 30, 2021 Commercial real estate: Owner-occupied $ — $ — $ — $ 3,832 $ 4,923 Non-owner occupied residential — — — 171 383 Commercial and industrial — — — 2,941 3,592 Residential mortgage: First lien 469 469 29 2,003 3,161 Home equity—term — — — 7 10 Home equity—lines of credit — — — 495 733 Installment and other loans — — — 37 37 $ 469 $ 469 $ 29 $ 9,486 $ 12,839 December 31, 2020 Commercial real estate: Owner-occupied $ — $ — $ — $ 3,260 $ 4,091 Non-owner occupied residential — — — 268 393 Acquisition and development: Commercial and land development — — — 814 875 Commercial and industrial — — — 3,639 4,269 Residential mortgage: First lien 424 508 33 2,204 3,264 Home equity—term — — — 10 13 Home equity—lines of credit — — — 608 832 Installment and other loans — — — 17 18 $ 424 $ 508 $ 33 $ 10,820 $ 13,755 |
Average Recorded Investment in Impaired Loans and Related Interest Income | The following table, which excludes accruing PCI loans, summarizes the average recorded investment in impaired loans and related recognized interest income for the three and nine months ended September 30, 2021 and 2020: 2021 2020 Average Interest Average Interest Three Months Ended September 30, Commercial real estate: Owner-occupied $ 4,179 $ — $ 4,424 $ — Non-owner occupied — — 102 — Multi-family — — 141 — Non-owner occupied residential 232 — 433 — Acquisition and development: Commercial and land development — — 837 — Commercial and industrial 3,073 — 1,044 — Residential mortgage: First lien 2,541 11 3,209 12 Home equity – term 10 — 12 — Home equity - lines of credit 463 — 645 — Installment and other loans 24 — 17 — $ 10,522 $ 11 $ 10,864 $ 12 Nine Months Ended September 30, Commercial real estate: Owner occupied $ 3,848 $ 1 $ 5,033 $ 1 Non-owner occupied — — 108 — Multi-family 7 — 259 — Non-owner occupied residential 252 — 422 — Acquisition and development: Commercial and land development 246 — 586 — Commercial and industrial 3,046 — 1,316 — Residential mortgage: First lien 2,575 32 3,050 36 Home equity - term 12 — 12 — Home equity - lines of credit 547 — 699 1 Installment and other loans 17 — 29 — $ 10,550 $ 33 $ 11,514 $ 38 |
Troubled Debt Restructurings | The following table presents impaired loans that are TDRs, with the recorded investment at September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Number of Recorded Number of Recorded Accruing: Commercial real estate: Owner occupied 1 $ 26 1 $ 28 Residential mortgage: First lien 8 813 9 898 Home equity - lines of credit — — 1 8 9 839 11 934 Nonaccruing: Residential mortgage: First lien 5 291 5 320 5 291 5 320 14 $ 1,130 16 $ 1,254 |
Loan Portfolio Summarized by Aging Categories of Performing Loans and Nonaccrual Loans | The following table presents the classes of loan portfolio summarized by aging categories of performing loans and nonaccrual loans at September 30, 2021 and December 31, 2020: Days Past Due Current 30-59 60-89 90+ Total Non- Total September 30, 2021 Commercial real estate: Owner occupied $ 190,183 $ 238 $ — $ — $ 238 $ 3,806 $ 194,227 Non-owner occupied 509,387 — — — — — 509,387 Multi-family 112,002 — — — — — 112,002 Non-owner occupied residential 98,459 — 251 — 251 171 98,881 Acquisition and development: 1-4 family residential construction 12,246 — — — — — 12,246 Commercial and land development 71,774 10 — — 10 — 71,784 Commercial and industrial 534,967 7 — — 7 2,941 537,915 Municipal 13,631 — — — — — 13,631 Residential mortgage: First lien 196,076 341 318 35 694 1,659 198,429 Home equity - term 7,041 15 — — 15 7 7,063 Home equity - lines of credit 153,266 208 35 — 243 495 154,004 Installment and other loans 18,891 70 41 — 111 37 19,039 Subtotal 1,917,923 889 645 35 1,569 9,116 1,928,608 Loans acquired with credit deterioration: Commercial real estate: Owner occupied 2,358 — — — — — 2,358 Non-owner occupied 316 — — — — — 316 Non-owner occupied residential 1,081 — — 126 126 — 1,207 Commercial and industrial 2,290 — — — — — 2,290 Residential mortgage: First lien 4,730 — — 201 201 — 4,931 Home equity - term 16 — — — — — 16 Installment and other loans 38 — — — — — 38 Subtotal 10,829 — — 327 327 — 11,156 $ 1,928,752 $ 889 $ 645 $ 362 $ 1,896 $ 9,116 $ 1,939,764 Days Past Due Current 30-59 60-89 90+ Total Non- Total December 31, 2020 Commercial real estate: Owner occupied $ 168,262 $ 958 $ — $ — $ 958 $ 3,232 $ 172,452 Non-owner occupied 409,130 108 — — 108 — 409,238 Multi-family 113,635 — — — — — 113,635 Non-owner occupied residential 112,443 484 — — 484 268 113,195 Acquisition and development: 1-4 family residential construction 9,486 — — — — — 9,486 Commercial and land development 50,922 32 58 — 90 814 51,826 Commercial and industrial 640,573 9 310 — 319 3,639 644,531 Municipal 19,677 846 — — 846 — 20,523 Residential mortgage: First lien 230,903 5,758 535 83 6,376 1,730 239,009 Home equity - term 10,099 40 — 1 41 10 10,150 Home equity - lines of credit 156,153 268 — — 268 600 157,021 Installment and other loans 26,052 168 49 14 231 17 26,300 Subtotal 1,947,335 8,671 952 98 9,721 10,310 1,967,366 Loans acquired with credit deterioration: Commercial real estate: Owner occupied 2,456 — — — — — 2,456 Non-owner occupied 329 — — — — — 329 Non-owner occupied residential 1,161 — — 149 149 — 1,310 Commercial and industrial 2,837 — — — — — 2,837 Residential mortgage: First lien 4,341 655 9 307 971 — 5,312 Home equity - term 19 — — — — — 19 Installment and other loans 57 4 — — 4 — 61 Subtotal 11,200 659 9 456 1,124 — 12,324 $ 1,958,535 $ 9,330 $ 961 $ 554 $ 10,845 $ 10,310 $ 1,979,690 |
Summary of Activity in the ALL and Ending Loan Balances Individually Evaluated for Impairment Based on Loan Segment | The following table presents the activity in the ALL for the three and nine months ended September 30, 2021 and 2020: Commercial Consumer Commercial Acquisition Commercial Municipal Total Residential Installment Total Unallocated Total Three Months Ended September 30, 2021 Balance, beginning of period $ 11,315 $ 1,243 $ 3,495 $ 29 $ 16,082 $ 2,863 $ 227 $ 3,090 $ 209 $ 19,381 Provision for loan losses (179) 290 386 (2) 495 (147) 18 (129) (1) 365 Charge-offs (89) — (55) — (144) — (20) (20) — (164) Recoveries 305 8 60 — 373 5 5 10 — 383 Balance, end of period $ 11,352 $ 1,541 $ 3,886 $ 27 $ 16,806 $ 2,721 $ 230 $ 2,951 $ 208 $ 19,965 September 30, 2020 Balance, beginning of period $ 9,347 $ 1,069 $ 2,916 $ 75 $ 13,407 $ 3,552 $ 386 $ 3,938 $ 172 $ 17,517 Provision for loan losses 1,520 (219) 963 (19) 2,245 (71) 18 (53) 8 2,200 Charge-offs (3) — (193) — (196) — (31) (31) — (227) Recoveries 171 — 45 — 216 6 13 19 — 235 Balance, end of period $ 11,035 $ 850 $ 3,731 $ 56 $ 15,672 $ 3,487 $ 386 $ 3,873 $ 180 $ 19,725 Nine Months Ended September 30, 2021 Balance, beginning of period $ 11,151 $ 1,114 $ 3,942 $ 40 $ 16,247 $ 3,362 $ 324 $ 3,686 $ 218 $ 20,151 Provision for loan losses 133 418 109 (13) 647 (578) (69) (647) (10) (10) Charge-offs (270) — (621) — (891) (92) (49) (141) — (1,032) Recoveries 338 9 456 — 803 29 24 53 — 856 Balance, end of period $ 11,352 $ 1,541 $ 3,886 $ 27 $ 16,806 $ 2,721 $ 230 $ 2,951 $ 208 $ 19,965 September 30, 2020 Balance, beginning of period $ 7,634 $ 959 $ 2,356 $ 100 $ 11,049 $ 3,147 $ 319 $ 3,466 $ 140 $ 14,655 Provision for loan losses 2,780 (117) 1,875 (44) 4,494 329 162 491 40 5,025 Charge-offs (3) — (689) — (692) (109) (117) (226) — (918) Recoveries 624 8 189 — 821 120 22 142 — 963 Balance, end of period $ 11,035 $ 850 $ 3,731 $ 56 $ 15,672 $ 3,487 $ 386 $ 3,873 $ 180 $ 19,725 The following table summarizes the ending loan balance individually evaluated for impairment based upon loan segment, as well as the related ALL loss allocation for each at September 30, 2021 and December 31, 2020. Accruing PCI loans are excluded from loans individually evaluated for impairment. Commercial Consumer Commercial Acquisition Commercial Municipal Total Residential Installment Total Unallocated Total September 30, 2021 Loans allocated by: Individually evaluated for impairment $ 4,003 $ — $ 2,941 $ — $ 6,944 $ 2,974 $ 37 $ 3,011 $ — $ 9,955 Collectively evaluated for impairment 914,375 84,030 537,264 13,631 1,549,300 361,469 19,040 380,509 — 1,929,809 $ 918,378 $ 84,030 $ 540,205 $ 13,631 $ 1,556,244 $ 364,443 $ 19,077 $ 383,520 $ — $ 1,939,764 ALL allocated by: Individually evaluated for impairment $ — $ — $ — $ — $ — $ 29 $ — $ 29 $ — $ 29 Collectively evaluated for impairment 11,352 1,541 3,886 27 16,806 2,692 230 2,922 208 19,936 $ 11,352 $ 1,541 $ 3,886 $ 27 $ 16,806 $ 2,721 $ 230 $ 2,951 $ 208 $ 19,965 December 31, 2020 Loans allocated by: Individually evaluated for impairment $ 3,528 $ 814 $ 3,639 $ — $ 7,981 $ 3,246 $ 17 $ 3,263 $ — $ 11,244 Collectively evaluated for impairment 809,087 60,498 643,729 20,523 1,533,837 408,265 26,344 434,609 — 1,968,446 $ 812,615 $ 61,312 $ 647,368 $ 20,523 $ 1,541,818 $ 411,511 $ 26,361 $ 437,872 $ — $ 1,979,690 ALL allocated by: Individually evaluated for impairment $ — $ — $ — $ — $ — $ 33 $ — $ 33 $ — $ 33 Collectively evaluated for impairment 11,151 1,114 3,942 40 16,247 3,329 324 3,653 218 20,118 $ 11,151 $ 1,114 $ 3,942 $ 40 $ 16,247 $ 3,362 $ 324 $ 3,686 $ 218 $ 20,151 |
Schedule of Activity for the Accretable Yield of Purchased Impaired Loans | The following table provides activity for the accretable yield of PCI loans for the three and nine months ended September 30, 2021 and 2020: Three Months Ended Nine Months Ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Accretable yield, beginning of period $ 3,016 $ 4,182 $ 3,438 $ 6,950 Additions (1) — — — 570 Accretion of income (203) (546) (878) (2,459) Reclassifications from nonaccretable difference due to improvement in expected cash flows 11 139 128 1,260 Other changes, net (2) (12) (231) 124 (2,777) Accretable yield, end of period $ 2,812 $ 3,544 $ 2,812 $ 3,544 (1) The amount for the nine months ended September 30, 2020 reflects a measurement period adjustment for Hamilton loans that should have been in the PCI pool at the acquisition date. |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Summary of ROU Assets and Related Lease Liabilities | The following table summarizes the Company's operating leases at September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Operating lease ROU assets $ 9,301 $ 8,686 Operating lease ROU liabilities 9,832 9,143 Weighted-average remaining lease term (in years) 16.0 16.8 Weighted-average discount rate 4.2 % 4.3 % |
Information Related to Operating Leases | The following table presents information related to the Company's operating leases for the three and nine months ended September 30, 2021 and 2020: Three Months Ended Nine Months Ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Cash paid for operating lease liabilities $ 331 $ 210 $ 947 $ 847 Operating lease expense 388 421 1,179 1,171 |
Schedule of Maturities of Lease Liabilities | The following table presents expected future maturities of the Company's lease liabilities as of September 30, 2021: Remainder of 2021 $ 296 2022 926 2023 951 2024 974 2025 991 Thereafter 10,387 14,525 Less: imputed interest 4,693 Total lease liabilities $ 9,832 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of in Changes in Goodwill | The following table presents changes in goodwill for the nine months ended September 30, 2021 and 2020: September 30, 2021 September 30, 2020 Balance, beginning of year $ 18,724 $ 19,925 Adjustments to acquired goodwill (1) — (1,201) Balance, end of period $ 18,724 $ 18,724 (1) The Company finalized its purchase accounting adjustments associated with Hamilton as of May 1, 2020. |
Schedule of Changes in Other Intangible Assets | The following table presents changes in other intangible assets for the three and nine months ended September 30, 2021 and 2020: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Beginning of period $ 4,800 $ 6,160 $ 5,458 $ 7,180 Amortization expense (314) (357) (972) (1,224) Impairment — — — (153) Balance, end of period $ 4,486 $ 5,803 $ 4,486 $ 5,803 |
Schedule of Components of Other Intangible Assets | The following table presents the components of other identifiable intangible assets at September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Gross Amount Accumulated Gross Amount Accumulated Amortized intangible assets: Core deposit intangibles $ 8,390 $ 3,906 $ 8,390 $ 2,935 Other customer relationship intangibles 25 23 25 22 Total $ 8,415 $ 3,929 $ 8,415 $ 2,957 |
Schedule of Estimated Aggregated Amortization Expense | The following table presents future estimated aggregate amortization expense for intangible assets remaining at September 30, 2021: Remainder of 2021 $ 303 2022 1,105 2023 935 2024 766 2025 596 Thereafter 781 $ 4,486 |
SHARE-BASED COMPENSATION PLANS
SHARE-BASED COMPENSATION PLANS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Nonvested Restricted Shares Activity | The table below presents a summary of nonvested restricted shares activity for the nine months ended September 30, 2021: Shares Weighted Average Grant Date Fair Value Nonvested shares, beginning of year 245,576 $ 21.45 Granted 127,847 19.21 Forfeited (29,388) 19.69 Vested (78,588) 23.52 Nonvested shares, at period end 265,447 $ 19.92 |
Schedule of Restricted Shares Compensation Expense | The following table presents restricted shares compensation expense, with tax benefit information, and fair value of shares vested, for the three and nine months ended September 30, 2021 and 2020: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Restricted share award expense $ 468 $ 434 $ 1,380 $ 1,607 Restricted share award tax benefit 98 91 316 337 Fair value of shares vested — 225 1,539 1,314 |
Schedule of Employee Stock Purchase Plan | The following table presents information for the employee stock purchase plan for the three and nine months ended September 30, 2021 and 2020: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Shares purchased 3,271 4,218 8,755 7,831 Weighted average price of shares purchased $ 19.16 $ 13.08 $ 15.58 $ 14.85 Compensation expense recognized 15 3 48 6 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivative Instruments | The following table summarizes the fair value of the Company's derivative instruments at September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Notional Amount Balance Sheet Location Fair Value Notional Amount Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate swaps - balance sheet hedge $ — $ — $ 50,000 Other liabilities $ (1,230) Total derivatives designated as hedging instruments $ — $ (1,230) Derivatives not designated as hedging instruments: Interest rate swap - commercial borrower $ 32,462 Other assets $ 277 $ 30,673 Other assets $ 690 Interest rate swap - counterparty 32,462 Other liabilities (269) 30,673 Other liabilities (726) Risk participation 15,855 Other liabilities (3) — — Interest rate lock commitments with customers 22,025 Other assets 546 22,560 Other assets 673 Forward sale commitment 6,198 Other assets 23 10,400 Other liabilities (61) Total derivatives not designated as hedging instruments $ 574 $ 576 |
Effect of Derivative Financial Instruments on OCI and Net Income | The following tables summarize the effect of the Company's derivative financial instruments on OCI and net income for the three and nine months ended September 30, 2021 and 2020: Amount of (Loss) Gain Recognized in OCI on Derivative Amount of Gain (Loss) Recognized in OCI on Derivative Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Derivatives in cash flow hedging relationships: Interest rate products $ (183) $ 208 $ 473 $ (1,893) Total $ (183) $ 208 $ 473 $ (1,893) Amount of Loss Reclassified from AOCI into Income Amount of Loss Reclassified from AOCI into Income Location of Loss Recognized from AOCI into Income Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Derivatives in cash flow hedging relationships: Interest rate products $ (581) $ (114) $ (757) $ (239) Interest expense / Other operating expenses (1) Total $ (581) $ (114) $ (757) $ (239) (1) Includes $514 thousand recorded to other operating expenses due to the loss from the termination of an interest rate swap designated as a cash flow hedge. Amount of Gain (Loss) Recognized in Income Amount of Gain (Loss) Recognized in Income Location of Gain (Loss) Recognized in Income Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Derivatives not designated as hedging instruments: Interest rate products $ 8 $ (4) $ 44 $ (21) Other operating expenses Risk participation agreement 1 — (3) — Other operating expenses Interest rate lock commitments with customers 89 157 (128) 1,040 Mortgage banking activities Forward sale commitment 1 71 84 (126) Mortgage banking activities Total $ 99 $ 224 $ (3) $ 893 |
Summary of Interest Rate Swap Components | The following table is a summary of components for interest rate swaps designated as hedging at September 30, 2021 and December 31, 2020. During the three and nine months ended September 30, 2021, the Company terminated its interest rate derivative of $50.0 million. September 30, 2021 December 31, 2020 Weighted average pay rate — % 0.77 % Weighted average receive rate — % 0.09 % Weighted average maturity in years 0.0 4.2 |
SHAREHOLDERS' EQUITY AND REGU_2
SHAREHOLDERS' EQUITY AND REGULATORY CAPITAL (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Capital Amounts and Ratios | The following table presents capital amounts and ratios at September 30, 2021 and December 31, 2020: Actual For Capital Adequacy Purposes To Be Well Amount Ratio Amount Ratio Amount Ratio September 30, 2021 Total risk-based capital: Orrstown Financial Services, Inc. $ 291,785 15.6 % $ 195,965 10.5 % n/a n/a Orrstown Bank 273,583 14.7 % 195,899 10.5 % $ 186,570 10.0 % Tier 1 risk-based capital: Orrstown Financial Services, Inc. 238,492 12.8 % 158,639 8.5 % n/a n/a Orrstown Bank 252,238 13.5 % 158,585 8.5 % 149,256 8.0 % Tier 1 common equity risk-based capital: Orrstown Financial Services, Inc. 238,492 12.8 % 130,644 7.0 % n/a n/a Orrstown Bank 252,238 13.5 % 130,599 7.0 % 121,271 6.5 % Tier 1 leverage capital: Orrstown Financial Services, Inc. 238,492 8.3 % 115,630 4.0 % n/a n/a Orrstown Bank 252,238 8.7 % 115,706 4.0 % 144,633 5.0 % December 31, 2020 Total risk-based capital: Orrstown Financial Services, Inc. $ 271,184 15.6 % $ 183,099 10.5 % n/a n/a Orrstown Bank 256,376 14.7 % 183,012 10.5 % $ 174,297 10.0 % Tier 1 risk-based capital: Orrstown Financial Services, Inc. 217,582 12.5 % 148,223 8.5 % n/a n/a Orrstown Bank 234,677 13.5 % 148,152 8.5 % 139,437 8.0 % Tier 1 common equity risk-based capital: Orrstown Financial Services, Inc. 217,582 12.5 % 122,066 7.0 % n/a n/a Orrstown Bank 234,677 13.5 % 122,008 7.0 % 113,293 6.5 % Tier 1 leverage capital: Orrstown Financial Services, Inc. 217,582 8.1 % 108,063 4.0 % n/a n/a Orrstown Bank 234,677 8.7 % 108,148 4.0 % 135,185 5.0 % |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | The following table presents earnings per share for the three and nine months ended September 30, 2021 and 2020: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net income $ 7,192 $ 4,977 $ 26,175 $ 16,404 Weighted average shares outstanding - basic 10,979 10,941 10,976 10,939 Dilutive effect of share-based compensation 143 84 127 88 Weighted average shares outstanding - diluted 11,122 11,025 11,103 11,027 Per share information: Basic earnings per share $ 0.66 $ 0.45 $ 2.38 $ 1.50 Diluted earnings per share 0.65 0.45 2.36 1.49 |
FINANCIAL INSTRUMENTS WITH OF_2
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Contractual or Notional Amounts, Commitments to Fund | The following table presents these contractual, or notional, amounts: Contractual or Notional Amount September 30, 2021 December 31, 2020 Commitments to fund: Home equity lines of credit $ 251,607 $ 223,216 1-4 family residential construction loans 35,519 28,928 Commercial real estate, construction and land development loans 122,850 60,606 Commercial, industrial and other loans 339,569 268,931 Standby letters of credit 21,423 14,491 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets Measured at Fair Value on Recurring Basis | The following table summarizes assets measured at fair value on a recurring basis at September 30, 2021 and December 31, 2020: Level 1 Level 2 Level 3 Total Fair September 30, 2021 Financial Assets Investment securities: U.S. Treasury securities $ 19,831 $ — $ — $ 19,831 States and political subdivisions — 171,304 10,217 181,521 GSE residential MBSs — 20,518 — 20,518 GSE residential CMOs — 70,187 — 70,187 Nonagency CMOs — 12,400 13,257 25,657 Asset-backed — 126,907 — 126,907 Other 397 — — 397 Loans held for sale — 6,412 — 6,412 Derivatives — 277 546 823 Totals $ 20,228 $ 408,005 $ 24,020 $ 452,253 Financial Liabilities Derivatives $ — $ 272 $ — $ 272 December 31, 2020 Financial Assets Investment securities: States and political subdivisions $ — $ 103,591 $ 9,079 $ 112,670 GSE residential MBSs — 4,293 — 4,293 GSE residential CMOs — 58,011 — 58,011 Nonagency CMOs — — 16,918 16,918 Private label commercial CMOs — 56,730 5,506 62,236 Asset-backed — 211,966 — 211,966 Other 371 — — 371 Loans held for sale — 11,734 — 11,734 Derivatives — 690 673 1,363 Totals $ 371 $ 447,015 $ 32,176 $ 479,562 Financial Liabilities Derivatives $ — $ 1,956 $ — $ 1,956 |
Level 3 Fair Value Measurement Activity | The following provides details of the Level 3 fair value measurement activity for the periods ended September 30, 2021 and 2020: Investment securities: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Balance, beginning of period $ 24,925 $ 23,834 $ 31,503 $ 24,279 Unrealized (loss) gain included in OCI (964) 200 467 (229) Principal payments and other (487) (142) (4,951) (158) Sales — — (3,545) — Balance, end of period $ 23,474 $ 23,892 $ 23,474 $ 23,892 Interest rate lock commitments on residential mortgages: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Balance, beginning of period $ 456 $ 986 $ 673 $ 103 Total gains (losses) Included in earnings 90 157 (127) 1,040 Balance, end of period $ 546 $ 1,143 $ 546 $ 1,143 |
Summary of Assets Measured at Fair Value on Nonrecurring Basis | The following table summarizes assets measured at fair value on a nonrecurring basis at September 30, 2021 and December 31, 2020: Level 1 Level 2 Level 3 Total September 30, 2021 Impaired Loans Commercial real estate: Owner occupied $ — $ — $ 776 $ 776 Non-owner occupied residential — — 69 69 Residential mortgage: First lien — — 677 677 Home equity - lines of credit — — 77 77 Total impaired loans $ — $ — $ 1,599 $ 1,599 Mortgage servicing rights $ — $ — $ 3,642 $ 3,642 December 31, 2020 Impaired Loans Commercial real estate: Owner occupied $ — $ — $ 846 $ 846 Non-owner occupied residential — — 36 36 Commercial and industrial — — 12 12 Residential mortgage: First lien — — 638 638 Home equity - lines of credit — — 89 89 Total impaired loans $ — $ — $ 1,621 $ 1,621 Mortgage servicing rights $ — $ — $ 2,745 $ 2,745 |
Summary of Additional Qualitative Information | The following table presents additional qualitative information about assets measured on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value: Fair Value Valuation Unobservable Input Range September 30, 2021 Impaired loans $ 1,599 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 10% - 25% discount - Management adjustments for liquidation expenses 6% - 18% discount Mortgage servicing rights $ 3,642 Discounted cash flows Weighted average CPR 14.53% - Weighted average discount rate 9.04% December 31, 2020 Impaired loans $ 1,621 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 5% - 25% discount - Management adjustments for liquidation expenses 6% - 19% discount Mortgage servicing rights $ 2,745 Discounted cash flows Weighted average CPR 18.02% - Weighted average discount rate 9.56% |
Carrying Amounts and Estimated Fair Values of Financial Instruments | The following table presents carrying amounts and estimated fair values of the Company’s financial instruments at September 30, 2021 and December 31, 2020: Carrying Fair Value Level 1 Level 2 Level 3 September 30, 2021 Financial Assets Cash and due from banks $ 36,920 $ 36,920 $ 36,920 $ — $ — Interest-bearing deposits with banks 274,495 274,495 274,495 — — Restricted investments in bank stocks 7,051 n/a n/a n/a n/a Investment securities 445,018 445,018 20,228 401,316 23,474 Loans held for sale 6,412 6,412 — 6,412 — Loans, net of allowance for loan losses 1,919,799 1,917,091 — — 1,917,091 Derivatives 823 823 — 277 546 Accrued interest receivable 8,015 8,015 — 2,169 5,846 Financial Liabilities Deposits 2,502,108 2,503,695 — 2,503,695 — Securities sold under agreements to repurchase 27,595 27,595 — 27,595 — FHLB advances and other 2,003 2,176 — 2,176 — Subordinated notes 31,948 32,781 — 32,781 — Derivatives 272 272 — 272 — Accrued interest payable 631 631 — 631 — Off-balance sheet instruments — — — — — December 31, 2020 Financial Assets Cash and due from banks $ 26,203 $ 26,203 $ 26,203 $ — $ — Interest-bearing deposits with banks 99,055 99,055 99,055 — — Restricted investments in bank stocks 10,563 n/a n/a n/a n/a Investment securities 466,465 466,465 371 434,591 31,503 Loans held for sale 11,734 11,734 — 11,734 — Loans, net of allowance for loan losses 1,959,539 1,953,860 — — 1,953,860 Derivatives 1,363 1,363 — 690 673 Accrued interest receivable 8,927 8,927 — 1,529 7,398 Financial Liabilities Deposits 2,356,880 2,359,317 — 2,359,317 — Securities sold under agreements to repurchase 19,466 19,466 — 19,466 — FHLB advances and other 58,045 58,298 — 58,298 — Subordinated notes 31,903 31,712 — 31,712 — Derivatives 1,956 1,956 — 1,956 — Accrued interest payable 238 238 — 238 — Off-balance sheet instruments — — — — — |
INVESTMENT SECURITIES - Amortiz
INVESTMENT SECURITIES - Amortized Cost and Fair Values of AFS Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 437,852 | $ 460,999 |
Gross Unrealized Gains | 9,531 | 12,054 |
Gross Unrealized Losses | 2,365 | 6,588 |
Fair Value | 445,018 | 466,465 |
U.S. Treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 20,087 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 256 | |
Fair Value | 19,831 | |
States and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 174,239 | 104,704 |
Gross Unrealized Gains | 8,072 | 9,091 |
Gross Unrealized Losses | 790 | 1,125 |
Fair Value | 181,521 | 112,670 |
GSE residential MBSs | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 20,552 | 4,197 |
Gross Unrealized Gains | 80 | 96 |
Gross Unrealized Losses | 114 | 0 |
Fair Value | 20,518 | 4,293 |
GSE residential CMOs | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 69,922 | 56,856 |
Gross Unrealized Gains | 921 | 2,226 |
Gross Unrealized Losses | 656 | 1,071 |
Fair Value | 70,187 | 58,011 |
Non-agency CMOs | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 25,929 | 16,505 |
Gross Unrealized Gains | 1 | 413 |
Gross Unrealized Losses | 273 | 0 |
Fair Value | 25,657 | 16,918 |
Private label commercial CMOs | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 63,941 | |
Gross Unrealized Gains | 57 | |
Gross Unrealized Losses | 1,762 | |
Fair Value | 62,236 | |
Asset-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 126,726 | 214,425 |
Gross Unrealized Gains | 457 | 171 |
Gross Unrealized Losses | 276 | 2,630 |
Fair Value | 126,907 | 211,966 |
Other | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 397 | 371 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 397 | $ 371 |
INVESTMENT SECURITIES - Summary
INVESTMENT SECURITIES - Summary of AFS Securities with Unrealized Losses (Details) $ in Thousands | Sep. 30, 2021USD ($)security | Dec. 31, 2020USD ($)security |
Number of Securities | ||
Less Than 12 Months | security | 29 | 7 |
12 Months or More | security | 3 | 25 |
Total | security | 32 | 32 |
Fair Value | ||
Less Than 12 Months | $ 153,459 | $ 54,268 |
12 Months or More | 36,067 | 225,564 |
Total | 189,526 | 279,832 |
Unrealized Losses | ||
Less Than 12 Months | 2,103 | 2,893 |
12 Months or More | 262 | 3,695 |
Total | $ 2,365 | $ 6,588 |
U.S. Treasury securities | ||
Number of Securities | ||
Less Than 12 Months | security | 3 | |
12 Months or More | security | 0 | |
Total | security | 3 | |
Fair Value | ||
Less Than 12 Months | $ 19,831 | |
12 Months or More | 0 | |
Total | 19,831 | |
Unrealized Losses | ||
Less Than 12 Months | 256 | |
12 Months or More | 0 | |
Total | $ 256 | |
States and political subdivisions | ||
Number of Securities | ||
Less Than 12 Months | security | 11 | 1 |
12 Months or More | security | 0 | 0 |
Total | security | 11 | 1 |
Fair Value | ||
Less Than 12 Months | $ 40,666 | $ 9,079 |
12 Months or More | 0 | 0 |
Total | 40,666 | 9,079 |
Unrealized Losses | ||
Less Than 12 Months | 790 | 1,125 |
12 Months or More | 0 | 0 |
Total | $ 790 | $ 1,125 |
GSE residential MBSs | ||
Number of Securities | ||
Less Than 12 Months | security | 5 | |
12 Months or More | security | 0 | |
Total | security | 5 | |
Fair Value | ||
Less Than 12 Months | $ 17,354 | |
12 Months or More | 0 | |
Total | 17,354 | |
Unrealized Losses | ||
Less Than 12 Months | 114 | |
12 Months or More | 0 | |
Total | $ 114 | |
GSE residential CMOs | ||
Number of Securities | ||
Less Than 12 Months | security | 7 | 3 |
12 Months or More | security | 0 | 0 |
Total | security | 7 | 3 |
Fair Value | ||
Less Than 12 Months | $ 43,267 | $ 23,954 |
12 Months or More | 0 | 0 |
Total | 43,267 | 23,954 |
Unrealized Losses | ||
Less Than 12 Months | 656 | 1,071 |
12 Months or More | 0 | 0 |
Total | $ 656 | $ 1,071 |
Non-agency CMOs | ||
Number of Securities | ||
Less Than 12 Months | security | 1 | |
12 Months or More | security | 0 | |
Total | security | 1 | |
Fair Value | ||
Less Than 12 Months | $ 13,257 | |
12 Months or More | 0 | |
Total | 13,257 | |
Unrealized Losses | ||
Less Than 12 Months | 273 | |
12 Months or More | 0 | |
Total | $ 273 | |
Private label commercial CMOs | ||
Number of Securities | ||
Less Than 12 Months | security | 1 | |
12 Months or More | security | 10 | |
Total | security | 11 | |
Fair Value | ||
Less Than 12 Months | $ 4,314 | |
12 Months or More | 42,403 | |
Total | 46,717 | |
Unrealized Losses | ||
Less Than 12 Months | 685 | |
12 Months or More | 1,077 | |
Total | $ 1,762 | |
Asset-backed | ||
Number of Securities | ||
Less Than 12 Months | security | 2 | 2 |
12 Months or More | security | 3 | 15 |
Total | security | 5 | 17 |
Fair Value | ||
Less Than 12 Months | $ 19,084 | $ 16,921 |
12 Months or More | 36,067 | 183,161 |
Total | 55,151 | 200,082 |
Unrealized Losses | ||
Less Than 12 Months | 14 | 12 |
12 Months or More | 262 | 2,618 |
Total | $ 276 | $ 2,630 |
INVESTMENT SECURITIES - Schedul
INVESTMENT SECURITIES - Schedule of Amortized Cost and Fair Values of AFS Securities by Contractual Maturity (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Amortized Cost | |
Due in one year or less | $ 0 |
Due after one year through five years | 249 |
Due after five years through ten years | 69,999 |
Due after ten years | 124,475 |
CMOs and MBSs | 116,403 |
Asset-backed | 126,726 |
Total Amortized Cost | 437,852 |
Fair Value | |
Due in one year or less | 0 |
Due after one year through five years | 249 |
Due after five years through ten years | 71,976 |
Due after ten years | 129,524 |
CMOs and MBSs | 116,362 |
Asset-backed | 126,907 |
Total Fair Value | $ 445,018 |
INVESTMENT SECURITIES - Proceed
INVESTMENT SECURITIES - Proceeds from Sales of AFS Securities and Gross Gains and Gross Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds from sale of investment securities | $ 73,319 | $ 0 | $ 149,038 | $ 0 |
Gross gains | 482 | 0 | 1,844 | 0 |
Gross losses | $ 3 | $ 13 | $ 1,209 | $ 44 |
INVESTMENT SECURITIES - Narrati
INVESTMENT SECURITIES - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($)security | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)security | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Debt Securities, Available-for-sale [Line Items] | |||||
Gain on investments | $ 479 | $ 635 | |||
Loss adjustment on equity securities | $ (13) | $ (44) | |||
Number of investment securities sold | security | 18 | ||||
Investment securities | 445,018 | $ 445,018 | $ 466,465 | ||
Proceeds from sale of investment securities | 73,319 | $ 0 | 149,038 | 0 | |
Debt Securities | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Investment securities | $ 148,400 | 148,400 | |||
Proceeds from sale of investment securities | 149,000 | $ 0 | |||
Debt Securities | Asset-backed | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Number of investment securities sold | security | 4 | ||||
Investment securities | $ 72,800 | 72,800 | |||
Proceeds from sale of investment securities | 73,300 | ||||
Collateral Pledged | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Investment securities pledged to secure public funds, fair value | $ 316,000 | $ 316,000 | $ 398,700 |
LOANS AND ALLOWANCE FOR LOAN _3
LOANS AND ALLOWANCE FOR LOAN LOSSES - Narrative (Details) | 3 Months Ended | 9 Months Ended | 18 Months Ended | ||||||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)loannote | Dec. 31, 2020USD ($)loan | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)loan | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||
Loans, net | $ 1,939,764,000 | $ 1,939,764,000 | $ 1,979,690,000 | $ 1,939,764,000 | |||||
Number of PPP loans | loan | 3,300 | 3,200 | |||||||
Interest and fee income on loans | (19,890,000) | $ (21,645,000) | $ (62,724,000) | $ (63,605,000) | |||||
SBA, loan guarantee, percentage | 100.00% | ||||||||
Amount of loan on which review have been made annually | 1,000,000 | $ 1,000,000 | 1,000,000 | ||||||
Amount of loan on which reviews require approval | 500,000 | $ 500,000 | 500,000 | ||||||
Loans that are deemed impaired, number of days past due (more than) | 90 days | ||||||||
Number of notes split | note | 2 | ||||||||
Appraisals, required period interval | 18 months | ||||||||
Minimum amount on which annual updated appraisals for classified loans is required | 250,000 | $ 250,000 | 250,000 | ||||||
Allowance for loan losses | 19,965,000 | 19,725,000 | 19,965,000 | $ 20,151,000 | 19,725,000 | 19,965,000 | $ 19,381,000 | $ 17,517,000 | $ 14,655,000 |
Commercial | |||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||
Allowance for loan losses | 16,806,000 | 15,672,000 | 16,806,000 | 16,247,000 | 15,672,000 | 16,806,000 | 16,082,000 | 13,407,000 | 11,049,000 |
Consumer | |||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||
Allowance for loan losses | 2,951,000 | 3,873,000 | $ 2,951,000 | 3,686,000 | 3,873,000 | 2,951,000 | 3,090,000 | 3,938,000 | 3,466,000 |
Maximum | |||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||
Percentage of loan-to-value ratio upon loan origination | 80.00% | ||||||||
Percentage of loan-to-value ratios of the value of the real estate taken as collateral | 90.00% | ||||||||
Percentage of strong loan-to-value (or lower) | 70.00% | ||||||||
Commercial and industrial | |||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||
Loans, net | 540,205,000 | $ 540,205,000 | 647,368,000 | 540,205,000 | |||||
Commercial and industrial | Commercial | |||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||
Allowance for loan losses | 3,886,000 | $ 3,731,000 | 3,886,000 | 3,942,000 | $ 3,731,000 | 3,886,000 | $ 3,495,000 | $ 2,916,000 | $ 2,356,000 |
Commercial real estate | |||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||
Decrease in reserve | 1,000,000 | 2,700,000 | |||||||
Allowance for loan losses | 0 | 0 | 0 | ||||||
SBA | Commercial | Payment Deferral | |||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||
Loans, net | 0 | 0 | 15,700,000 | $ 0 | |||||
Number of PPP loans | loan | 6,500 | ||||||||
PPP loans generated amount | 231,700,000 | 231,700,000 | 467,700,000 | $ 231,700,000 | |||||
PPP Loan processing fee income | 13,500,000 | ||||||||
Interest and fee income on loans | $ (8,600,000) | ||||||||
Loan deferral period | 180 days | ||||||||
SBA | Commercial | 2021 Payment Deferrals | |||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||
PPP Loan processing fee income | $ 12,300,000 | ||||||||
SBA | Consumer | Payment Deferral | |||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||
Loans, net | 317,000 | $ 317,000 | $ 2,500,000 | 317,000 | |||||
Loan deferral period | 90 days | ||||||||
SBA | Maximum | Payment Deferral | |||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||
Fee income amortization period | 5 years | ||||||||
SBA | Maximum | Commercial | Payment Deferral | |||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||
PPP loans generated amount | 699,400,000 | $ 699,400,000 | 699,400,000 | ||||||
SBA | Minimum | Payment Deferral | |||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||
Fee income amortization period | 2 years | ||||||||
SBA | Commercial and industrial | SBA PPP Loans | |||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||
Loans, net | $ 259,900,000 | $ 259,900,000 | $ 403,300,000 | $ 259,900,000 |
LOANS AND ALLOWANCE FOR LOAN _4
LOANS AND ALLOWANCE FOR LOAN LOSSES - Summary of Loan Portfolio, Excluding Residential Loans Held for Sale (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | $ 1,939,764 | $ 1,979,690 |
Commercial real estate | Owner occupied | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 196,585 | 174,908 |
Commercial real estate | Non-owner occupied | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 509,703 | 409,567 |
Commercial real estate | Multi-family | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 112,002 | 113,635 |
Commercial real estate | Non-owner occupied residential | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 100,088 | 114,505 |
Acquisition and development | 1-4 family residential construction | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 12,246 | 9,486 |
Acquisition and development | Commercial and land development | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 71,784 | 51,826 |
Commercial and industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 540,205 | 647,368 |
Commercial and industrial | SBA | SBA PPP Loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 259,900 | 403,300 |
Municipal | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 13,631 | 20,523 |
Residential mortgage | First lien | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 203,360 | 244,321 |
Residential mortgage | Home equity - term | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 7,079 | 10,169 |
Residential mortgage | Home equity - lines of credit | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 154,004 | 157,021 |
Installment and other loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | $ 19,077 | $ 26,361 |
LOANS AND ALLOWANCE FOR LOAN _5
LOANS AND ALLOWANCE FOR LOAN LOSSES - Company's Loan Portfolio Ratings Based on its Internal Risk Rating System (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | $ 1,939,764 | $ 1,979,690 |
Commercial real estate | Owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 196,585 | 174,908 |
Commercial real estate | Non-owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 509,703 | 409,567 |
Commercial real estate | Multi-family | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 112,002 | 113,635 |
Commercial real estate | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 100,088 | 114,505 |
Acquisition and development | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 12,246 | 9,486 |
Acquisition and development | Commercial and land development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 71,784 | 51,826 |
Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 540,205 | 647,368 |
Municipal | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 13,631 | 20,523 |
Residential mortgage | First lien | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 203,360 | 244,321 |
Residential mortgage | Home equity - term | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 7,079 | 10,169 |
Residential mortgage | Home equity - lines of credit | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 154,004 | 157,021 |
Installment and other loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 19,077 | 26,361 |
Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 1,833,306 | 1,826,705 |
Pass | Commercial real estate | Owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 176,029 | 148,846 |
Pass | Commercial real estate | Non-owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 476,947 | 351,860 |
Pass | Commercial real estate | Multi-family | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 91,726 | 92,769 |
Pass | Commercial real estate | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 95,338 | 107,557 |
Pass | Acquisition and development | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 12,246 | 9,101 |
Pass | Acquisition and development | Commercial and land development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 70,648 | 49,832 |
Pass | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 521,530 | 617,213 |
Pass | Municipal | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 13,631 | 20,523 |
Pass | Residential mortgage | First lien | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 195,717 | 236,381 |
Pass | Residential mortgage | Home equity - term | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 7,056 | 10,076 |
Pass | Residential mortgage | Home equity - lines of credit | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 153,436 | 156,264 |
Pass | Installment and other loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 19,002 | 26,283 |
Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 70,777 | 112,737 |
Special Mention | Commercial real estate | Owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 8,219 | 12,491 |
Special Mention | Commercial real estate | Non-owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 32,272 | 57,378 |
Special Mention | Commercial real estate | Multi-family | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 19,662 | 20,224 |
Special Mention | Commercial real estate | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 2,028 | 3,948 |
Special Mention | Acquisition and development | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 385 |
Special Mention | Acquisition and development | Commercial and land development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 636 | 655 |
Special Mention | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 7,939 | 17,561 |
Special Mention | Municipal | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Special Mention | Residential mortgage | First lien | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Special Mention | Residential mortgage | Home equity - term | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Special Mention | Residential mortgage | Home equity - lines of credit | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 21 | 95 |
Special Mention | Installment and other loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Non-Impaired Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 14,570 | 16,680 |
Non-Impaired Substandard | Commercial real estate | Owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 6,147 | 7,855 |
Non-Impaired Substandard | Commercial real estate | Non-owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 168 | 0 |
Non-Impaired Substandard | Commercial real estate | Multi-family | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 614 | 642 |
Non-Impaired Substandard | Commercial real estate | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 1,344 | 1,422 |
Non-Impaired Substandard | Acquisition and development | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Non-Impaired Substandard | Acquisition and development | Commercial and land development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 500 | 525 |
Non-Impaired Substandard | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 5,505 | 6,118 |
Non-Impaired Substandard | Municipal | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Non-Impaired Substandard | Residential mortgage | First lien | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 240 | 0 |
Non-Impaired Substandard | Residential mortgage | Home equity - term | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 64 |
Non-Impaired Substandard | Residential mortgage | Home equity - lines of credit | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 52 | 54 |
Non-Impaired Substandard | Installment and other loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Impaired - Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 9,955 | 11,244 |
Impaired - Substandard | Commercial real estate | Owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 3,832 | 3,260 |
Impaired - Substandard | Commercial real estate | Non-owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Impaired - Substandard | Commercial real estate | Multi-family | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Impaired - Substandard | Commercial real estate | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 171 | 268 |
Impaired - Substandard | Acquisition and development | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Impaired - Substandard | Acquisition and development | Commercial and land development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 814 |
Impaired - Substandard | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 2,941 | 3,639 |
Impaired - Substandard | Municipal | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Impaired - Substandard | Residential mortgage | First lien | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 2,472 | 2,628 |
Impaired - Substandard | Residential mortgage | Home equity - term | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 7 | 10 |
Impaired - Substandard | Residential mortgage | Home equity - lines of credit | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 495 | 608 |
Impaired - Substandard | Installment and other loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 37 | 17 |
Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Doubtful | Commercial real estate | Owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Doubtful | Commercial real estate | Non-owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Doubtful | Commercial real estate | Multi-family | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Doubtful | Commercial real estate | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Doubtful | Acquisition and development | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Doubtful | Acquisition and development | Commercial and land development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Doubtful | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Doubtful | Municipal | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Doubtful | Residential mortgage | First lien | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Doubtful | Residential mortgage | Home equity - term | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Doubtful | Residential mortgage | Home equity - lines of credit | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Doubtful | Installment and other loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
PCI Loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 11,156 | 12,324 |
PCI Loans | Commercial real estate | Owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 2,358 | 2,456 |
PCI Loans | Commercial real estate | Non-owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 316 | 329 |
PCI Loans | Commercial real estate | Multi-family | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
PCI Loans | Commercial real estate | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 1,207 | 1,310 |
PCI Loans | Acquisition and development | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
PCI Loans | Acquisition and development | Commercial and land development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
PCI Loans | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 2,290 | 2,837 |
PCI Loans | Municipal | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
PCI Loans | Residential mortgage | First lien | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 4,931 | 5,312 |
PCI Loans | Residential mortgage | Home equity - term | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 16 | 19 |
PCI Loans | Residential mortgage | Home equity - lines of credit | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
PCI Loans | Installment and other loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | $ 38 | $ 61 |
LOANS AND ALLOWANCE FOR LOAN _6
LOANS AND ALLOWANCE FOR LOAN LOSSES - Impaired Loans by Segment and Class (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Financing Receivable, Impaired [Line Items] | ||
Impaired Loans with a Specific Allowance, Recorded Investment (Book Balance) | $ 469 | $ 424 |
Impaired Loans with a Specific Allowance, Unpaid Principal Balance (Legal Balance) | 469 | 508 |
Impaired Loans with a Specific Allowance, Related Allowance | 29 | 33 |
Impaired Loans with No Specific Allowance, Recorded Investment (Book Balance) | 9,486 | 10,820 |
Impaired Loans with No Specific Allowance, Unpaid Principal Balance (Legal Balance) | 12,839 | 13,755 |
Commercial real estate | Owner occupied | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired Loans with a Specific Allowance, Recorded Investment (Book Balance) | 0 | 0 |
Impaired Loans with a Specific Allowance, Unpaid Principal Balance (Legal Balance) | 0 | 0 |
Impaired Loans with a Specific Allowance, Related Allowance | 0 | 0 |
Impaired Loans with No Specific Allowance, Recorded Investment (Book Balance) | 3,832 | 3,260 |
Impaired Loans with No Specific Allowance, Unpaid Principal Balance (Legal Balance) | 4,923 | 4,091 |
Commercial real estate | Non-owner occupied residential | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired Loans with a Specific Allowance, Recorded Investment (Book Balance) | 0 | 0 |
Impaired Loans with a Specific Allowance, Unpaid Principal Balance (Legal Balance) | 0 | 0 |
Impaired Loans with a Specific Allowance, Related Allowance | 0 | 0 |
Impaired Loans with No Specific Allowance, Recorded Investment (Book Balance) | 171 | 268 |
Impaired Loans with No Specific Allowance, Unpaid Principal Balance (Legal Balance) | 383 | 393 |
Acquisition and development | Commercial and land development | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired Loans with a Specific Allowance, Recorded Investment (Book Balance) | 0 | |
Impaired Loans with a Specific Allowance, Unpaid Principal Balance (Legal Balance) | 0 | |
Impaired Loans with a Specific Allowance, Related Allowance | 0 | |
Impaired Loans with No Specific Allowance, Recorded Investment (Book Balance) | 814 | |
Impaired Loans with No Specific Allowance, Unpaid Principal Balance (Legal Balance) | 875 | |
Commercial and industrial | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired Loans with a Specific Allowance, Recorded Investment (Book Balance) | 0 | 0 |
Impaired Loans with a Specific Allowance, Unpaid Principal Balance (Legal Balance) | 0 | 0 |
Impaired Loans with a Specific Allowance, Related Allowance | 0 | 0 |
Impaired Loans with No Specific Allowance, Recorded Investment (Book Balance) | 2,941 | 3,639 |
Impaired Loans with No Specific Allowance, Unpaid Principal Balance (Legal Balance) | 3,592 | 4,269 |
Residential mortgage | First lien | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired Loans with a Specific Allowance, Recorded Investment (Book Balance) | 469 | 424 |
Impaired Loans with a Specific Allowance, Unpaid Principal Balance (Legal Balance) | 469 | 508 |
Impaired Loans with a Specific Allowance, Related Allowance | 29 | 33 |
Impaired Loans with No Specific Allowance, Recorded Investment (Book Balance) | 2,003 | 2,204 |
Impaired Loans with No Specific Allowance, Unpaid Principal Balance (Legal Balance) | 3,161 | 3,264 |
Residential mortgage | Home equity - term | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired Loans with a Specific Allowance, Recorded Investment (Book Balance) | 0 | 0 |
Impaired Loans with a Specific Allowance, Unpaid Principal Balance (Legal Balance) | 0 | 0 |
Impaired Loans with a Specific Allowance, Related Allowance | 0 | 0 |
Impaired Loans with No Specific Allowance, Recorded Investment (Book Balance) | 7 | 10 |
Impaired Loans with No Specific Allowance, Unpaid Principal Balance (Legal Balance) | 10 | 13 |
Residential mortgage | Home equity - lines of credit | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired Loans with a Specific Allowance, Recorded Investment (Book Balance) | 0 | 0 |
Impaired Loans with a Specific Allowance, Unpaid Principal Balance (Legal Balance) | 0 | 0 |
Impaired Loans with a Specific Allowance, Related Allowance | 0 | 0 |
Impaired Loans with No Specific Allowance, Recorded Investment (Book Balance) | 495 | 608 |
Impaired Loans with No Specific Allowance, Unpaid Principal Balance (Legal Balance) | 733 | 832 |
Installment and other loans | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired Loans with a Specific Allowance, Recorded Investment (Book Balance) | 0 | 0 |
Impaired Loans with a Specific Allowance, Unpaid Principal Balance (Legal Balance) | 0 | 0 |
Impaired Loans with a Specific Allowance, Related Allowance | 0 | 0 |
Impaired Loans with No Specific Allowance, Recorded Investment (Book Balance) | 37 | 17 |
Impaired Loans with No Specific Allowance, Unpaid Principal Balance (Legal Balance) | $ 37 | $ 18 |
LOANS AND ALLOWANCE FOR LOAN _7
LOANS AND ALLOWANCE FOR LOAN LOSSES - Average Recorded Investment in Impaired Loans and Related Interest Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Financing Receivable, Impaired [Line Items] | ||||
Average Impaired Balance | $ 10,522 | $ 10,864 | $ 10,550 | $ 11,514 |
Interest Income Recognized | 11 | 12 | 33 | 38 |
Commercial real estate | Owner occupied | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average Impaired Balance | 4,179 | 4,424 | 3,848 | 5,033 |
Interest Income Recognized | 0 | 0 | 1 | 1 |
Commercial real estate | Non-owner occupied | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average Impaired Balance | 0 | 102 | 0 | 108 |
Interest Income Recognized | 0 | 0 | 0 | 0 |
Commercial real estate | Multi-family | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average Impaired Balance | 0 | 141 | 7 | 259 |
Interest Income Recognized | 0 | 0 | 0 | 0 |
Commercial real estate | Non-owner occupied residential | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average Impaired Balance | 232 | 433 | 252 | 422 |
Interest Income Recognized | 0 | 0 | 0 | 0 |
Acquisition and development | Commercial and land development | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average Impaired Balance | 0 | 837 | 246 | 586 |
Interest Income Recognized | 0 | 0 | 0 | 0 |
Commercial and industrial | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average Impaired Balance | 3,073 | 1,044 | 3,046 | 1,316 |
Interest Income Recognized | 0 | 0 | 0 | 0 |
Residential mortgage | First lien | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average Impaired Balance | 2,541 | 3,209 | 2,575 | 3,050 |
Interest Income Recognized | 11 | 12 | 32 | 36 |
Residential mortgage | Home equity - term | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average Impaired Balance | 10 | 12 | 12 | 12 |
Interest Income Recognized | 0 | 0 | 0 | 0 |
Residential mortgage | Home equity - lines of credit | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average Impaired Balance | 463 | 645 | 547 | 699 |
Interest Income Recognized | 0 | 0 | 0 | 1 |
Installment and other loans | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average Impaired Balance | 24 | 17 | 17 | 29 |
Interest Income Recognized | $ 0 | $ 0 | $ 0 | $ 0 |
LOANS AND ALLOWANCE FOR LOAN _8
LOANS AND ALLOWANCE FOR LOAN LOSSES - Troubled Debt Restructurings (Details) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2021USD ($)contract | Sep. 30, 2020contract | Dec. 31, 2020USD ($)contract | |
Financing Receivable, Modifications [Line Items] | |||
Number of Contracts | 14 | 16 | |
Recorded Investment | $ | $ 1,130 | $ 1,254 | |
Number of new contracts | 0 | 0 | |
Accruing | |||
Financing Receivable, Modifications [Line Items] | |||
Number of Contracts | 9 | 11 | |
Recorded Investment | $ | $ 839 | $ 934 | |
Accruing | Commercial real estate | Owner occupied | |||
Financing Receivable, Modifications [Line Items] | |||
Number of Contracts | 1 | 1 | |
Recorded Investment | $ | $ 26 | $ 28 | |
Accruing | Residential mortgage | First lien | |||
Financing Receivable, Modifications [Line Items] | |||
Number of Contracts | 8 | 9 | |
Recorded Investment | $ | $ 813 | $ 898 | |
Accruing | Residential mortgage | Home equity - lines of credit | |||
Financing Receivable, Modifications [Line Items] | |||
Number of Contracts | 0 | 1 | |
Recorded Investment | $ | $ 0 | $ 8 | |
Nonaccruing | |||
Financing Receivable, Modifications [Line Items] | |||
Number of Contracts | 5 | 5 | |
Recorded Investment | $ | $ 291 | $ 320 | |
Nonaccruing | Residential mortgage | First lien | |||
Financing Receivable, Modifications [Line Items] | |||
Number of Contracts | 5 | 5 | |
Recorded Investment | $ | $ 291 | $ 320 |
LOANS AND ALLOWANCE FOR LOAN _9
LOANS AND ALLOWANCE FOR LOAN LOSSES - Loan Portfolio Summarized by Aging Categories of Performing Loans and Nonaccrual Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | $ 362 | $ 554 |
Non- Accrual | 9,116 | 10,310 |
Loans, net | 1,939,764 | 1,979,690 |
Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 35 | 98 |
Non- Accrual | 9,116 | 10,310 |
Loans, net | 1,928,608 | 1,967,366 |
Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 327 | 456 |
Non- Accrual | 0 | 0 |
Loans, net | 11,156 | 12,324 |
Current | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 1,928,752 | 1,958,535 |
Current | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 1,917,923 | 1,947,335 |
Current | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 10,829 | 11,200 |
30 to 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 889 | 9,330 |
30 to 59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 889 | 8,671 |
30 to 59 Days Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 659 |
60 to 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 645 | 961 |
60 to 89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 645 | 952 |
60 to 89 Days Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 9 |
Total Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 1,896 | 10,845 |
Total Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 1,569 | 9,721 |
Total Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 327 | 1,124 |
Commercial real estate | Owner occupied | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 196,585 | 174,908 |
Commercial real estate | Owner occupied | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 0 | 0 |
Non- Accrual | 3,806 | 3,232 |
Loans, net | 194,227 | 172,452 |
Commercial real estate | Owner occupied | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 0 | 0 |
Non- Accrual | 0 | 0 |
Loans, net | 2,358 | 2,456 |
Commercial real estate | Owner occupied | Current | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 190,183 | 168,262 |
Commercial real estate | Owner occupied | Current | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 2,358 | 2,456 |
Commercial real estate | Owner occupied | 30 to 59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 238 | 958 |
Commercial real estate | Owner occupied | 30 to 59 Days Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Commercial real estate | Owner occupied | 60 to 89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Commercial real estate | Owner occupied | 60 to 89 Days Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Commercial real estate | Owner occupied | Total Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 238 | 958 |
Commercial real estate | Owner occupied | Total Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Commercial real estate | Non-owner occupied | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 509,703 | 409,567 |
Commercial real estate | Non-owner occupied | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 0 | 0 |
Non- Accrual | 0 | 0 |
Loans, net | 509,387 | 409,238 |
Commercial real estate | Non-owner occupied | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 0 | 0 |
Non- Accrual | 0 | 0 |
Loans, net | 316 | 329 |
Commercial real estate | Non-owner occupied | Current | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 509,387 | 409,130 |
Commercial real estate | Non-owner occupied | Current | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 316 | 329 |
Commercial real estate | Non-owner occupied | 30 to 59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 108 |
Commercial real estate | Non-owner occupied | 30 to 59 Days Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Commercial real estate | Non-owner occupied | 60 to 89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Commercial real estate | Non-owner occupied | 60 to 89 Days Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Commercial real estate | Non-owner occupied | Total Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 108 |
Commercial real estate | Non-owner occupied | Total Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Commercial real estate | Multi-family | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 112,002 | 113,635 |
Commercial real estate | Multi-family | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 0 | 0 |
Non- Accrual | 0 | 0 |
Loans, net | 112,002 | 113,635 |
Commercial real estate | Multi-family | Current | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 112,002 | 113,635 |
Commercial real estate | Multi-family | 30 to 59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Commercial real estate | Multi-family | 60 to 89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Commercial real estate | Multi-family | Total Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Commercial real estate | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 100,088 | 114,505 |
Commercial real estate | Non-owner occupied residential | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 0 | 0 |
Non- Accrual | 171 | 268 |
Loans, net | 98,881 | 113,195 |
Commercial real estate | Non-owner occupied residential | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 126 | 149 |
Non- Accrual | 0 | 0 |
Loans, net | 1,207 | 1,310 |
Commercial real estate | Non-owner occupied residential | Current | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 98,459 | 112,443 |
Commercial real estate | Non-owner occupied residential | Current | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 1,081 | 1,161 |
Commercial real estate | Non-owner occupied residential | 30 to 59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 484 |
Commercial real estate | Non-owner occupied residential | 30 to 59 Days Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Commercial real estate | Non-owner occupied residential | 60 to 89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 251 | 0 |
Commercial real estate | Non-owner occupied residential | 60 to 89 Days Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Commercial real estate | Non-owner occupied residential | Total Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 251 | 484 |
Commercial real estate | Non-owner occupied residential | Total Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 126 | 149 |
Acquisition and development | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 12,246 | 9,486 |
Acquisition and development | 1-4 family residential construction | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 0 | 0 |
Non- Accrual | 0 | 0 |
Loans, net | 12,246 | 9,486 |
Acquisition and development | 1-4 family residential construction | Current | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 12,246 | 9,486 |
Acquisition and development | 1-4 family residential construction | 30 to 59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Acquisition and development | 1-4 family residential construction | 60 to 89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Acquisition and development | 1-4 family residential construction | Total Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Acquisition and development | Commercial and land development | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 71,784 | 51,826 |
Acquisition and development | Commercial and land development | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 0 | 0 |
Non- Accrual | 0 | 814 |
Loans, net | 71,784 | 51,826 |
Acquisition and development | Commercial and land development | Current | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 71,774 | 50,922 |
Acquisition and development | Commercial and land development | 30 to 59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 10 | 32 |
Acquisition and development | Commercial and land development | 60 to 89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 58 |
Acquisition and development | Commercial and land development | Total Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 10 | 90 |
Commercial and industrial | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 540,205 | 647,368 |
Commercial and industrial | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 0 | 0 |
Non- Accrual | 2,941 | 3,639 |
Loans, net | 537,915 | 644,531 |
Commercial and industrial | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 0 | 0 |
Non- Accrual | 0 | 0 |
Loans, net | 2,290 | 2,837 |
Commercial and industrial | Current | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 534,967 | 640,573 |
Commercial and industrial | Current | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 2,290 | 2,837 |
Commercial and industrial | 30 to 59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 7 | 9 |
Commercial and industrial | 30 to 59 Days Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Commercial and industrial | 60 to 89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 310 |
Commercial and industrial | 60 to 89 Days Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Commercial and industrial | Total Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 7 | 319 |
Commercial and industrial | Total Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Municipal | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 13,631 | 20,523 |
Municipal | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 0 | 0 |
Non- Accrual | 0 | 0 |
Loans, net | 13,631 | 20,523 |
Municipal | Current | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 13,631 | 19,677 |
Municipal | 30 to 59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 846 |
Municipal | 60 to 89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Municipal | Total Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 846 |
Residential mortgage | First lien | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 203,360 | 244,321 |
Residential mortgage | First lien | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 35 | 83 |
Non- Accrual | 1,659 | 1,730 |
Loans, net | 198,429 | 239,009 |
Residential mortgage | First lien | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 201 | 307 |
Non- Accrual | 0 | 0 |
Loans, net | 4,931 | 5,312 |
Residential mortgage | First lien | Current | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 196,076 | 230,903 |
Residential mortgage | First lien | Current | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 4,730 | 4,341 |
Residential mortgage | First lien | 30 to 59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 341 | 5,758 |
Residential mortgage | First lien | 30 to 59 Days Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 655 |
Residential mortgage | First lien | 60 to 89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 318 | 535 |
Residential mortgage | First lien | 60 to 89 Days Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 9 |
Residential mortgage | First lien | Total Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 694 | 6,376 |
Residential mortgage | First lien | Total Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 201 | 971 |
Residential mortgage | Home equity - term | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 7,079 | 10,169 |
Residential mortgage | Home equity - term | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 0 | 1 |
Non- Accrual | 7 | 10 |
Loans, net | 7,063 | 10,150 |
Residential mortgage | Home equity - term | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 0 | 0 |
Non- Accrual | 0 | 0 |
Loans, net | 16 | 19 |
Residential mortgage | Home equity - term | Current | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 7,041 | 10,099 |
Residential mortgage | Home equity - term | Current | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 16 | 19 |
Residential mortgage | Home equity - term | 30 to 59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 15 | 40 |
Residential mortgage | Home equity - term | 30 to 59 Days Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Residential mortgage | Home equity - term | 60 to 89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Residential mortgage | Home equity - term | 60 to 89 Days Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Residential mortgage | Home equity - term | Total Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 15 | 41 |
Residential mortgage | Home equity - term | Total Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Residential mortgage | Home equity - lines of credit | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 154,004 | 157,021 |
Residential mortgage | Home equity - lines of credit | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 0 | 0 |
Non- Accrual | 495 | 600 |
Loans, net | 154,004 | 157,021 |
Residential mortgage | Home equity - lines of credit | Current | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 153,266 | 156,153 |
Residential mortgage | Home equity - lines of credit | 30 to 59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 208 | 268 |
Residential mortgage | Home equity - lines of credit | 60 to 89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 35 | 0 |
Residential mortgage | Home equity - lines of credit | Total Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 243 | 268 |
Installment and other loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 19,077 | 26,361 |
Installment and other loans | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 0 | 14 |
Non- Accrual | 37 | 17 |
Loans, net | 19,039 | 26,300 |
Installment and other loans | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
90+ (still accruing) Days Past Due | 0 | 0 |
Non- Accrual | 0 | 0 |
Loans, net | 38 | 61 |
Installment and other loans | Current | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 18,891 | 26,052 |
Installment and other loans | Current | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 38 | 57 |
Installment and other loans | 30 to 59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 70 | 168 |
Installment and other loans | 30 to 59 Days Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 4 |
Installment and other loans | 60 to 89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 41 | 49 |
Installment and other loans | 60 to 89 Days Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 0 | 0 |
Installment and other loans | Total Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | 111 | 231 |
Installment and other loans | Total Past Due | Loans Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, net | $ 0 | $ 4 |
LOANS AND ALLOWANCE FOR LOAN_10
LOANS AND ALLOWANCE FOR LOAN LOSSES - Activity in Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Activity in allowance for loan losses | ||||
Balance, beginning of period | $ 19,381 | $ 17,517 | $ 20,151 | $ 14,655 |
Provision for loan losses | 365 | 2,200 | (10) | 5,025 |
Charge-offs | (164) | (227) | (1,032) | (918) |
Recoveries | 383 | 235 | 856 | 963 |
Balance, end of period | 19,965 | 19,725 | 19,965 | 19,725 |
Unallocated | ||||
Activity in allowance for loan losses | ||||
Balance, beginning of period | 209 | 172 | 218 | 140 |
Provision for loan losses | (1) | 8 | (10) | 40 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Balance, end of period | 208 | 180 | 208 | 180 |
Commercial | ||||
Activity in allowance for loan losses | ||||
Balance, beginning of period | 16,082 | 13,407 | 16,247 | 11,049 |
Provision for loan losses | 495 | 2,245 | 647 | 4,494 |
Charge-offs | (144) | (196) | (891) | (692) |
Recoveries | 373 | 216 | 803 | 821 |
Balance, end of period | 16,806 | 15,672 | 16,806 | 15,672 |
Commercial | Commercial Real Estate | ||||
Activity in allowance for loan losses | ||||
Balance, beginning of period | 11,315 | 9,347 | 11,151 | 7,634 |
Provision for loan losses | (179) | 1,520 | 133 | 2,780 |
Charge-offs | (89) | (3) | (270) | (3) |
Recoveries | 305 | 171 | 338 | 624 |
Balance, end of period | 11,352 | 11,035 | 11,352 | 11,035 |
Commercial | Acquisition and Development | ||||
Activity in allowance for loan losses | ||||
Balance, beginning of period | 1,243 | 1,069 | 1,114 | 959 |
Provision for loan losses | 290 | (219) | 418 | (117) |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 8 | 0 | 9 | 8 |
Balance, end of period | 1,541 | 850 | 1,541 | 850 |
Commercial | Commercial and Industrial | ||||
Activity in allowance for loan losses | ||||
Balance, beginning of period | 3,495 | 2,916 | 3,942 | 2,356 |
Provision for loan losses | 386 | 963 | 109 | 1,875 |
Charge-offs | (55) | (193) | (621) | (689) |
Recoveries | 60 | 45 | 456 | 189 |
Balance, end of period | 3,886 | 3,731 | 3,886 | 3,731 |
Commercial | Municipal | ||||
Activity in allowance for loan losses | ||||
Balance, beginning of period | 29 | 75 | 40 | 100 |
Provision for loan losses | (2) | (19) | (13) | (44) |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Balance, end of period | 27 | 56 | 27 | 56 |
Consumer | ||||
Activity in allowance for loan losses | ||||
Balance, beginning of period | 3,090 | 3,938 | 3,686 | 3,466 |
Provision for loan losses | (129) | (53) | (647) | 491 |
Charge-offs | (20) | (31) | (141) | (226) |
Recoveries | 10 | 19 | 53 | 142 |
Balance, end of period | 2,951 | 3,873 | 2,951 | 3,873 |
Consumer | Residential Mortgage | ||||
Activity in allowance for loan losses | ||||
Balance, beginning of period | 2,863 | 3,552 | 3,362 | 3,147 |
Provision for loan losses | (147) | (71) | (578) | 329 |
Charge-offs | 0 | 0 | (92) | (109) |
Recoveries | 5 | 6 | 29 | 120 |
Balance, end of period | 2,721 | 3,487 | 2,721 | 3,487 |
Consumer | Installment and Other | ||||
Activity in allowance for loan losses | ||||
Balance, beginning of period | 227 | 386 | 324 | 319 |
Provision for loan losses | 18 | 18 | (69) | 162 |
Charge-offs | (20) | (31) | (49) | (117) |
Recoveries | 5 | 13 | 24 | 22 |
Balance, end of period | $ 230 | $ 386 | $ 230 | $ 386 |
LOANS AND ALLOWANCE FOR LOAN_11
LOANS AND ALLOWANCE FOR LOAN LOSSES - Summary of Ending Loan Balances Evaluated for Impairment and Related Allowance for Loan Losses Allocation (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Loans allocated by: | ||||||
Individually evaluated for impairment | $ 9,955 | $ 11,244 | ||||
Collectively evaluated for impairment | 1,929,809 | 1,968,446 | ||||
Total Loans | 1,939,764 | 1,979,690 | ||||
ALL allocated by: | ||||||
Individually evaluated for impairment | 29 | 33 | ||||
Collectively evaluated for impairment | 19,936 | 20,118 | ||||
Total allowance for loan losses | 19,965 | $ 19,381 | 20,151 | $ 19,725 | $ 17,517 | $ 14,655 |
Commercial and Industrial | ||||||
Loans allocated by: | ||||||
Total Loans | 540,205 | 647,368 | ||||
Municipal | ||||||
Loans allocated by: | ||||||
Total Loans | 13,631 | 20,523 | ||||
Installment and Other | ||||||
Loans allocated by: | ||||||
Total Loans | 19,077 | 26,361 | ||||
Commercial | ||||||
Loans allocated by: | ||||||
Individually evaluated for impairment | 6,944 | 7,981 | ||||
Collectively evaluated for impairment | 1,549,300 | 1,533,837 | ||||
Total Loans | 1,556,244 | 1,541,818 | ||||
ALL allocated by: | ||||||
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 16,806 | 16,247 | ||||
Total allowance for loan losses | 16,806 | 16,247 | ||||
Commercial | Commercial Real Estate | ||||||
Loans allocated by: | ||||||
Individually evaluated for impairment | 4,003 | 3,528 | ||||
Collectively evaluated for impairment | 914,375 | 809,087 | ||||
Total Loans | 918,378 | 812,615 | ||||
ALL allocated by: | ||||||
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 11,352 | 11,151 | ||||
Total allowance for loan losses | 11,352 | 11,151 | ||||
Commercial | Acquisition and Development | ||||||
Loans allocated by: | ||||||
Individually evaluated for impairment | 0 | 814 | ||||
Collectively evaluated for impairment | 84,030 | 60,498 | ||||
Total Loans | 84,030 | 61,312 | ||||
ALL allocated by: | ||||||
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 1,541 | 1,114 | ||||
Total allowance for loan losses | 1,541 | 1,114 | ||||
Commercial | Commercial and Industrial | ||||||
Loans allocated by: | ||||||
Individually evaluated for impairment | 2,941 | 3,639 | ||||
Collectively evaluated for impairment | 537,264 | 643,729 | ||||
Total Loans | 540,205 | 647,368 | ||||
ALL allocated by: | ||||||
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 3,886 | 3,942 | ||||
Total allowance for loan losses | 3,886 | 3,942 | ||||
Commercial | Municipal | ||||||
Loans allocated by: | ||||||
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 13,631 | 20,523 | ||||
Total Loans | 13,631 | 20,523 | ||||
ALL allocated by: | ||||||
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 27 | 40 | ||||
Total allowance for loan losses | 27 | 40 | ||||
Consumer | ||||||
Loans allocated by: | ||||||
Individually evaluated for impairment | 3,011 | 3,263 | ||||
Collectively evaluated for impairment | 380,509 | 434,609 | ||||
Total Loans | 383,520 | 437,872 | ||||
ALL allocated by: | ||||||
Individually evaluated for impairment | 29 | 33 | ||||
Collectively evaluated for impairment | 2,922 | 3,653 | ||||
Total allowance for loan losses | 2,951 | 3,686 | ||||
Consumer | Residential Mortgage | ||||||
Loans allocated by: | ||||||
Individually evaluated for impairment | 2,974 | 3,246 | ||||
Collectively evaluated for impairment | 361,469 | 408,265 | ||||
Total Loans | 364,443 | 411,511 | ||||
ALL allocated by: | ||||||
Individually evaluated for impairment | 29 | 33 | ||||
Collectively evaluated for impairment | 2,692 | 3,329 | ||||
Total allowance for loan losses | 2,721 | 3,362 | ||||
Consumer | Installment and Other | ||||||
Loans allocated by: | ||||||
Individually evaluated for impairment | 37 | 17 | ||||
Collectively evaluated for impairment | 19,040 | 26,344 | ||||
Total Loans | 19,077 | 26,361 | ||||
ALL allocated by: | ||||||
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 230 | 324 | ||||
Total allowance for loan losses | 230 | 324 | ||||
Unallocated | ||||||
Loans allocated by: | ||||||
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 0 | 0 | ||||
Total Loans | 0 | 0 | ||||
ALL allocated by: | ||||||
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 208 | 218 | ||||
Total allowance for loan losses | $ 208 | $ 218 |
LOANS AND ALLOWANCE FOR LOAN_12
LOANS AND ALLOWANCE FOR LOAN LOSSES - Schedule of Accretable Yield of Purchased Impaired Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Accretable Yield Movement Schedule [Roll Forward] | ||||
Accretable yield, beginning of period | $ 3,016 | $ 4,182 | $ 3,438 | $ 6,950 |
Additions | 0 | 0 | 0 | 570 |
Accretion of income | (203) | (546) | (878) | (2,459) |
Reclassifications from nonaccretable difference due to improvement in expected cash flows | 11 | 139 | 128 | 1,260 |
Other changes, net | (12) | (231) | 124 | (2,777) |
Accretable yield, end of period | $ 2,812 | $ 3,544 | $ 2,812 | $ 3,544 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | Sep. 30, 2021 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease terms | 7 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lease terms | 32 years |
LEASES - Summary of Information
LEASES - Summary of Information Related to Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Leases [Abstract] | |||||
Operating lease ROU assets | $ 9,301 | $ 9,301 | $ 8,686 | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets | Other assets | Other assets | ||
Operating lease ROU liabilities | $ 9,832 | $ 9,832 | $ 9,143 | ||
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Other Liabilities | Other Liabilities | Other Liabilities | ||
Weighted-average remaining lease term (in years) | 16 years | 16 years | 16 years 9 months 18 days | ||
Weighted-average discount rate | 4.20% | 4.20% | 4.30% | ||
Cash paid for operating lease liabilities | $ 331 | $ 210 | $ 947 | $ 847 | |
Operating lease expense | $ 388 | $ 421 | $ 1,179 | $ 1,171 |
LEASES - Schedule of Maturities
LEASES - Schedule of Maturities of Leases Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Remainder of 2021 | $ 296 | |
2022 | 926 | |
2023 | 951 | |
2024 | 974 | |
2025 | 991 | |
Thereafter | 10,387 | |
Total payments due | 14,525 | |
Less: imputed interest | 4,693 | |
Total lease liabilities | $ 9,832 | $ 9,143 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in Goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill [Roll Forward] | ||
Balance, beginning of year | $ 18,724 | $ 19,925 |
Adjustments to acquired goodwill | 0 | (1,201) |
Balance, end of period | $ 18,724 | $ 18,724 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) | Aug. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Finite-Lived Intangible Assets [Line Items] | |||||
Impairments | $ 0 | ||||
Impairment of intangibles | $ 0 | $ 0 | $ 0 | $ 153,000 | |
Customer Lists | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of intangibles | $ 0 | $ 0 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Finite-lived Intangible Assets [Roll Forward] | ||||
Beginning of period | $ 4,800 | $ 6,160 | $ 5,458 | $ 7,180 |
Amortization expense | (314) | (357) | (972) | (1,224) |
Impairment | 0 | 0 | 0 | (153) |
Balance, end of period | $ 4,486 | $ 5,803 | $ 4,486 | $ 5,803 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Components of Other Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 8,415 | $ 8,415 |
Accumulated Amortization | 3,929 | 2,957 |
Core deposit intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 8,390 | 8,390 |
Accumulated Amortization | 3,906 | 2,935 |
Other customer relationship intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 25 | 25 |
Accumulated Amortization | $ 23 | $ 22 |
GOODWILL AND OTHER INTANGIBLE_7
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Estimated Aggregate Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||||||
Remainder of 2021 | $ 303 | |||||
2022 | 1,105 | |||||
2023 | 935 | |||||
2024 | 766 | |||||
2025 | 596 | |||||
Thereafter | 781 | |||||
Total | $ 4,486 | $ 4,800 | $ 5,458 | $ 5,803 | $ 6,160 | $ 7,180 |
SHARE-BASED COMPENSATION PLAN_2
SHARE-BASED COMPENSATION PLANS - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation expense, recognition period | 1 year 9 months 18 days | |
Orrstown 2011 Incentive Stock Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares reserved to be issued (in shares) | 881,920 | |
Number of shares available to be issued under employee stock purchase plan (in shares) | 258,020 | |
Orrstown 2011 Incentive Stock Plan | Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation expense | $ 2.6 | $ 2 |
Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares reserved to be issued (in shares) | 350,000 | |
Number of shares available to be issued under employee stock purchase plan (in shares) | 151,480 | |
Maximum shares that can be purchased, as percentage of annual salary | 10.00% | |
Percentage of value of the shares on the semi-annual offering | 95.00% |
SHARE-BASED COMPENSATION PLAN_3
SHARE-BASED COMPENSATION PLANS - Summary of Nonvested Restricted Shares Activity (Details) - Orrstown 2011 Incentive Stock Plan - Restricted Stock | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Shares | |
Nonvested shares, beginning of year (in shares) | shares | 245,576 |
Granted (in shares) | shares | 127,847 |
Forfeited (in shares) | shares | (29,388) |
Vested (in usd per share) | shares | (78,588) |
Nonvested shares, at period end (in shares) | shares | 265,447 |
Weighted Average Grant Date Fair Value | |
Nonvested shares, beginning of year (in usd per share) | $ / shares | $ 21.45 |
Granted (in usd per share) | $ / shares | 19.21 |
Forfeited (in usd per share) | $ / shares | 19.69 |
Vested (in usd per share) | $ / shares | 23.52 |
Nonvested shares, at period end (in usd per share) | $ / shares | $ 19.92 |
SHARE-BASED COMPENSATION PLAN_4
SHARE-BASED COMPENSATION PLANS - Schedule of Restricted Shares Compensation Expense (Details) - Orrstown 2011 Incentive Stock Plan - Restricted Stock - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted share award expense | $ 468 | $ 434 | $ 1,380 | $ 1,607 |
Restricted share award tax benefit | 98 | 91 | 316 | 337 |
Fair value of shares vested | $ 0 | $ 225 | $ 1,539 | $ 1,314 |
SHARE-BASED COMPENSATION PLAN_5
SHARE-BASED COMPENSATION PLANS - Schedule of Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | ||||
Shares purchased (in shares) | 3,271 | 4,218 | 8,755 | 7,831 |
Weighted average price of shares purchased (in usd per share) | $ 19.16 | $ 13.08 | $ 15.58 | $ 14.85 |
Compensation expense recognized | $ 15 | $ 3 | $ 48 | $ 6 |
DERIVATIVES FINANCIAL INSTRUMEN
DERIVATIVES FINANCIAL INSTRUMENTS - Narrative (Details) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021USD ($)bankcustomer | Sep. 30, 2021USD ($)bankcustomer | Dec. 31, 2020USD ($)bank | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Third-party broker | bank | 11 | 11 | |
Cash collateral held by counterparty for derivatives | $ 0 | $ 0 | $ 1,700,000 |
Interest rate derivative | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Number of derivatives | bank | 1 | ||
Interest rate derivative | Designated as hedging instrument | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Derivative | 50,000,000 | 50,000,000 | |
Reclassification of realized losses from AOCI | (398,000) | ||
Derivative, notional amount | $ 50,000,000 | ||
Interest rate derivative | Derivatives not designated as hedging instruments: | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Derivative, notional amount | $ 64,900,000 | $ 64,900,000 | 61,300,000 |
Number of customers | customer | 11 | 11 | |
Interest rate derivative | Derivatives not designated as hedging instruments: | Other Liabilities | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Derivative | $ 32,462,000 | $ 32,462,000 | 30,673,000 |
Interest rate derivative | Derivatives not designated as hedging instruments: | Agent Bank | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Upfront fee from derivative | 53,000 | ||
Interest rate derivative | Derivatives not designated as hedging instruments: | Agent Bank | Other Liabilities | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Derivative | $ 15,900,000 | $ 15,900,000 | $ 0 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Summary of Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Derivatives designated as hedging instruments: | ||
Fair Value | ||
Total derivatives | $ 0 | $ (1,230) |
Derivatives designated as hedging instruments: | Interest rate swap | ||
Notional Amount | ||
Derivative liabilities | 50,000 | |
Derivatives designated as hedging instruments: | Other Liabilities | Interest rate swaps - balance sheet hedge | ||
Notional Amount | ||
Derivative liabilities | 0 | 50,000 |
Fair Value | ||
Derivative liabilities | 0 | (1,230) |
Derivatives not designated as hedging instruments: | ||
Fair Value | ||
Total derivatives | 574 | 576 |
Derivatives not designated as hedging instruments: | Other Liabilities | Interest rate swap | ||
Notional Amount | ||
Derivative liabilities | 32,462 | 30,673 |
Fair Value | ||
Derivative liabilities | (269) | (726) |
Derivatives not designated as hedging instruments: | Other Liabilities | Risk participation agreement | ||
Notional Amount | ||
Derivative liabilities | 15,855 | 0 |
Fair Value | ||
Derivative liabilities | (3) | 0 |
Derivatives not designated as hedging instruments: | Other Liabilities | Forward sale commitment | ||
Notional Amount | ||
Derivative liabilities | 10,400 | |
Derivative asset | 6,198 | |
Fair Value | ||
Derivative liabilities | (61) | |
Derivative asset | 23 | |
Derivatives not designated as hedging instruments: | Other assets | Interest rate swap | ||
Notional Amount | ||
Derivative asset | 32,462 | 30,673 |
Fair Value | ||
Derivative asset | 277 | 690 |
Derivatives not designated as hedging instruments: | Other assets | Interest rate lock commitments with customers | ||
Notional Amount | ||
Derivative asset | 22,025 | 22,560 |
Fair Value | ||
Derivative asset | $ 546 | $ 673 |
DERIVATIVES FINANCIAL INSTRUM_2
DERIVATIVES FINANCIAL INSTRUMENTS - Effect of Derivative Financial Instruments on OCI and Net Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Gain (Loss) Recognized in OCI on Derivative | $ (183) | $ 208 | $ 473 | $ (1,893) |
Amount of Loss Reclassified from AOCI into Income | (581) | (114) | (757) | (239) |
Interest expense | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Loss Reclassified from AOCI into Income | (581) | (114) | (757) | (239) |
Mortgage banking activities | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | 99 | 224 | (3) | 893 |
Interest rate products | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Gain (Loss) Recognized in OCI on Derivative | (183) | 208 | 473 | (1,893) |
Interest rate products | Interest expense | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Loss Reclassified from AOCI into Income | (581) | (114) | (757) | (239) |
Interest rate products | Other operating expense | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Loss Reclassified from AOCI into Income | 514 | |||
Amount of Gain (Loss) Recognized in Income | 8 | (4) | 44 | (21) |
Risk participation agreement | Other operating expense | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | 1 | 0 | (3) | 0 |
Interest rate lock commitments with customers | Mortgage banking activities | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | 89 | 157 | (128) | 1,040 |
Forward sale commitment | Mortgage banking activities | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | $ 1 | $ 71 | $ 84 | $ (126) |
DERIVATIVES FINANCIAL INSTRUM_3
DERIVATIVES FINANCIAL INSTRUMENTS - Summary of Interest Rate Swap Components (Details) - Interest Rate Swap | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Weighted average pay rate | 0.00% | 0.77% |
Weighted average receive rate | 0.00% | 0.09% |
Weighted average maturity in years | 0 years | 4 years 2 months 12 days |
SHAREHOLDERS_ EQUITY AND REGULA
SHAREHOLDERS’ EQUITY AND REGULATORY CAPITAL - Schedule of Actual and Required Capital Amounts and Ratios (Detail) $ in Thousands | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) |
Orrstown Financial Services, Inc. | ||
Total risk-based capital: | ||
Actual, Amount | $ 291,785 | $ 271,184 |
Actual, Ratio | 0.156 | 0.156 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 195,965 | $ 183,099 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 0.105 | 0.105 |
Tier 1 risk-based capital: | ||
Actual, Amount | $ 238,492 | $ 217,582 |
Actual, Ratio | 0.128 | 0.125 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 158,639 | $ 148,223 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 0.085 | 0.085 |
Tier 1 common equity risk-based capital: | ||
Actual, Amount | $ 238,492 | $ 217,582 |
Actual, Ratio | 12.80% | 12.50% |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 130,644 | $ 122,066 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 7.00% | 7.00% |
Tier 1 leverage capital: | ||
Actual, Amount | $ 238,492 | $ 217,582 |
Actual, Ratio | 0.083 | 0.081 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 115,630 | $ 108,063 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 0.040 | 0.040 |
Orrstown Bank | ||
Total risk-based capital: | ||
Actual, Amount | $ 273,583 | $ 256,376 |
Actual, Ratio | 0.147 | 0.147 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 195,899 | $ 183,012 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 0.105 | 0.105 |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 186,570 | $ 174,297 |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 0.100 | 0.100 |
Tier 1 risk-based capital: | ||
Actual, Amount | $ 252,238 | $ 234,677 |
Actual, Ratio | 0.135 | 0.135 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 158,585 | $ 148,152 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 0.085 | 0.085 |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 149,256 | $ 139,437 |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 0.080 | 0.080 |
Tier 1 common equity risk-based capital: | ||
Actual, Amount | $ 252,238 | $ 234,677 |
Actual, Ratio | 13.50% | 13.50% |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 130,599 | $ 122,008 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 7.00% | 7.00% |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 121,271 | $ 113,293 |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 6.50% | 6.50% |
Tier 1 leverage capital: | ||
Actual, Amount | $ 252,238 | $ 234,677 |
Actual, Ratio | 0.087 | 0.087 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 115,706 | $ 108,148 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 0.040 | 0.040 |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 144,633 | $ 135,185 |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 0.050 | 0.050 |
SHAREHOLDERS' EQUITY AND REGU_3
SHAREHOLDERS' EQUITY AND REGULATORY CAPITAL - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Oct. 18, 2021 | Sep. 30, 2021 | Apr. 19, 2021 | Sep. 30, 2015 |
Equity, Class of Treasury Stock [Line Items] | ||||
Number of shares authorized to be repurchased (in shares) | 416,000 | |||
Acquisition of treasury stock (in shares) | 201,518 | |||
Acquisition of treasury stock | $ 3.7 | |||
Acquisition of treasury stock (in usd per share) | $ 18.26 | |||
Stock repurchase program, additional number of shares authorized to be repurchased | 562,000 | |||
Stock repurchase program, shares available for future repurchase | 776,482 | |||
Stock repurchase program percentage of outstanding shares of common stock available for future purchase | 7.00% | |||
Subsequent Event | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Dividends declared per share (in usd per share) | $ 0.19 | |||
Maximum | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Stock repurchase program authorized, maximum percentage of outstanding shares of common stock | 5.00% |
EARNINGS PER SHARE - Calculatio
EARNINGS PER SHARE - Calculation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 7,192 | $ 4,977 | $ 26,175 | $ 16,404 |
Weighted average shares outstanding - basic (in shares) | 10,979 | 10,941 | 10,976 | 10,939 |
Dilutive effect of share-based compensation (in shares) | 143 | 84 | 127 | 88 |
Weighted average shares outstanding - diluted (in shares) | 11,122 | 11,025 | 11,103 | 11,027 |
Per share information: | ||||
Basic earnings per share (in usd per share) | $ 0.66 | $ 0.45 | $ 2.38 | $ 1.50 |
Diluted earnings per share (in usd per share) | $ 0.65 | $ 0.45 | $ 2.36 | $ 1.49 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Average outstanding options excluded from diluted earnings per share (in shares) | 0 | 6,110 | 0 | 21,479 |
FINANCIAL INSTRUMENTS WITH OF_3
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Reserve for off-balance sheet credit exposures | $ 1,400 | $ 1,500 |
Home equity lines of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments to fund | 251,607 | 223,216 |
1-4 family residential construction loans | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments to fund | 35,519 | 28,928 |
Commercial real estate, construction and land development loans | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments to fund | 122,850 | 60,606 |
Commercial, industrial and other loans | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments to fund | 339,569 | 268,931 |
Standby letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments to fund | $ 21,423 | $ 14,491 |
FAIR VALUE - Narrative (Detail)
FAIR VALUE - Narrative (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($)security | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)securitybank | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)security | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Number of investment securities sold | security | 18 | ||||
Fair value option, aggregate fair value exceeded principle amount | $ 151 | $ 151 | |||
Increase (decrease) in fair value | 150,652 | $ 147,647 | |||
Impairment reserve (recovery) for mortgage servicing rights | 372 | 372 | $ 1,100 | ||
Impairment charges (reversal) | $ 43 | $ 166 | (695) | $ 986 | |
Interest rate lock commitments on residential mortgages | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Increase (decrease) in fair value | $ 26 | ||||
Level 3 | Municipal Bonds | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Number of investment securities | security | 1 | 1 | |||
Level 3 | Collateralized Mortgage Obligations | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Number of investment securities | security | 1 | 1 | 3 | ||
Number of investment securities sold | security | 1 | ||||
Number of investment securities called | bank | 1 | ||||
Level 3 | Measurement Input, Pull Through | Interest rate lock commitments on residential mortgages | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Asset, measurement input (percent) | 0.89 | 0.89 | |||
Level 3 | Measurement Input, Pull Through Increase (Decrease) | Interest rate lock commitments on residential mortgages | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Asset, measurement input (percent) | 0.05 | 0.05 |
FAIR VALUE - Summary of Assets
FAIR VALUE - Summary of Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Financial Assets | ||
Investment securities | $ 445,018 | $ 466,465 |
U.S. Treasury securities | ||
Financial Assets | ||
Investment securities | 19,831 | |
States and political subdivisions | ||
Financial Assets | ||
Investment securities | 181,521 | 112,670 |
GSE residential MBSs | ||
Financial Assets | ||
Investment securities | 20,518 | 4,293 |
GSE residential CMOs | ||
Financial Assets | ||
Investment securities | 70,187 | 58,011 |
Non-agency CMOs | ||
Financial Assets | ||
Investment securities | 25,657 | 16,918 |
Asset-backed | ||
Financial Assets | ||
Investment securities | 126,907 | 211,966 |
Other | ||
Financial Assets | ||
Investment securities | 397 | 371 |
Fair Value, Measurements, Recurring | ||
Financial Assets | ||
Loans held for sale | 6,412 | 11,734 |
Totals | 452,253 | 479,562 |
Financial Liabilities | ||
Derivatives | 272 | 1,956 |
Fair Value, Measurements, Recurring | Derivatives | ||
Financial Assets | ||
Derivatives | 823 | 1,363 |
Fair Value, Measurements, Recurring | U.S. Treasury securities | ||
Financial Assets | ||
Investment securities | 19,831 | |
Fair Value, Measurements, Recurring | States and political subdivisions | ||
Financial Assets | ||
Investment securities | 181,521 | 112,670 |
Fair Value, Measurements, Recurring | GSE residential MBSs | ||
Financial Assets | ||
Investment securities | 20,518 | 4,293 |
Fair Value, Measurements, Recurring | GSE residential CMOs | ||
Financial Assets | ||
Investment securities | 70,187 | 58,011 |
Fair Value, Measurements, Recurring | Non-agency CMOs | ||
Financial Assets | ||
Investment securities | 25,657 | 16,918 |
Fair Value, Measurements, Recurring | Private label commercial CMOs | ||
Financial Assets | ||
Investment securities | 62,236 | |
Fair Value, Measurements, Recurring | Asset-backed | ||
Financial Assets | ||
Investment securities | 126,907 | 211,966 |
Fair Value, Measurements, Recurring | Other | ||
Financial Assets | ||
Investment securities | 397 | 371 |
Fair Value, Measurements, Recurring | Level 1 | ||
Financial Assets | ||
Loans held for sale | 0 | 0 |
Totals | 20,228 | 371 |
Financial Liabilities | ||
Derivatives | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Derivatives | ||
Financial Assets | ||
Derivatives | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | U.S. Treasury securities | ||
Financial Assets | ||
Investment securities | 19,831 | |
Fair Value, Measurements, Recurring | Level 1 | States and political subdivisions | ||
Financial Assets | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | GSE residential MBSs | ||
Financial Assets | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | GSE residential CMOs | ||
Financial Assets | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Non-agency CMOs | ||
Financial Assets | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Private label commercial CMOs | ||
Financial Assets | ||
Investment securities | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Asset-backed | ||
Financial Assets | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Other | ||
Financial Assets | ||
Investment securities | 397 | 371 |
Fair Value, Measurements, Recurring | Level 2 | ||
Financial Assets | ||
Loans held for sale | 6,412 | 11,734 |
Totals | 408,005 | 447,015 |
Financial Liabilities | ||
Derivatives | 272 | 1,956 |
Fair Value, Measurements, Recurring | Level 2 | Derivatives | ||
Financial Assets | ||
Derivatives | 277 | 690 |
Fair Value, Measurements, Recurring | Level 2 | U.S. Treasury securities | ||
Financial Assets | ||
Investment securities | 0 | |
Fair Value, Measurements, Recurring | Level 2 | States and political subdivisions | ||
Financial Assets | ||
Investment securities | 171,304 | 103,591 |
Fair Value, Measurements, Recurring | Level 2 | GSE residential MBSs | ||
Financial Assets | ||
Investment securities | 20,518 | 4,293 |
Fair Value, Measurements, Recurring | Level 2 | GSE residential CMOs | ||
Financial Assets | ||
Investment securities | 70,187 | 58,011 |
Fair Value, Measurements, Recurring | Level 2 | Non-agency CMOs | ||
Financial Assets | ||
Investment securities | 12,400 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Private label commercial CMOs | ||
Financial Assets | ||
Investment securities | 56,730 | |
Fair Value, Measurements, Recurring | Level 2 | Asset-backed | ||
Financial Assets | ||
Investment securities | 126,907 | 211,966 |
Fair Value, Measurements, Recurring | Level 2 | Other | ||
Financial Assets | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | ||
Financial Assets | ||
Loans held for sale | 0 | 0 |
Totals | 24,020 | 32,176 |
Financial Liabilities | ||
Derivatives | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Derivatives | ||
Financial Assets | ||
Derivatives | 546 | 673 |
Fair Value, Measurements, Recurring | Level 3 | U.S. Treasury securities | ||
Financial Assets | ||
Investment securities | 0 | |
Fair Value, Measurements, Recurring | Level 3 | States and political subdivisions | ||
Financial Assets | ||
Investment securities | 10,217 | 9,079 |
Fair Value, Measurements, Recurring | Level 3 | GSE residential MBSs | ||
Financial Assets | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | GSE residential CMOs | ||
Financial Assets | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Non-agency CMOs | ||
Financial Assets | ||
Investment securities | 13,257 | 16,918 |
Fair Value, Measurements, Recurring | Level 3 | Private label commercial CMOs | ||
Financial Assets | ||
Investment securities | 5,506 | |
Fair Value, Measurements, Recurring | Level 3 | Asset-backed | ||
Financial Assets | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Other | ||
Financial Assets | ||
Investment securities | $ 0 | $ 0 |
FAIR VALUE - Level 3 Fair Value
FAIR VALUE - Level 3 Fair Value Measurement Activity (Details) - Level 3 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Interest rate lock commitments on residential mortgages | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | $ 456 | $ 986 | $ 673 | $ 103 |
Included in earnings | 90 | 157 | (127) | 1,040 |
Balance, end of period | 546 | 1,143 | 546 | 1,143 |
Collateralized Mortgage Obligations | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 24,925 | 23,834 | 31,503 | 24,279 |
Unrealized (loss) gain included in OCI | (964) | 200 | 467 | (229) |
Principal payments and other | (487) | (142) | (4,951) | (158) |
Sales | 0 | 0 | (3,545) | 0 |
Balance, end of period | $ 23,474 | $ 23,892 | $ 23,474 | $ 23,892 |
FAIR VALUE - Summary of Asset_2
FAIR VALUE - Summary of Assets Measured at Fair Value on Nonrecurring Basis (Details) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | $ 1,599 | $ 1,621 |
Mortgage servicing rights | 3,642 | 2,745 |
Commercial real estate | Owner occupied | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 776 | 846 |
Commercial real estate | Non-owner occupied residential | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 69 | 36 |
Commercial and industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 12 | |
Residential mortgage | First lien | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 677 | 638 |
Residential mortgage | Home equity - lines of credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 77 | 89 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Level 1 | Commercial real estate | Owner occupied | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 0 | 0 |
Level 1 | Commercial real estate | Non-owner occupied residential | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 0 | 0 |
Level 1 | Commercial and industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 0 | |
Level 1 | Residential mortgage | First lien | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 0 | 0 |
Level 1 | Residential mortgage | Home equity - lines of credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Level 2 | Commercial real estate | Owner occupied | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 0 | 0 |
Level 2 | Commercial real estate | Non-owner occupied residential | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 0 | 0 |
Level 2 | Commercial and industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 0 | |
Level 2 | Residential mortgage | First lien | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 0 | 0 |
Level 2 | Residential mortgage | Home equity - lines of credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 1,599 | 1,621 |
Mortgage servicing rights | 3,642 | 2,745 |
Level 3 | Commercial real estate | Owner occupied | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 776 | 846 |
Level 3 | Commercial real estate | Non-owner occupied residential | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 69 | 36 |
Level 3 | Commercial and industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 12 | |
Level 3 | Residential mortgage | First lien | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | 677 | 638 |
Level 3 | Residential mortgage | Home equity - lines of credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impaired loans | $ 77 | $ 89 |
FAIR VALUE - Summary of Additio
FAIR VALUE - Summary of Additional Qualitative Information (Details) - Fair Value, Measurements, Nonrecurring $ in Thousands | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) |
Impaired loans | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.06 | |
Impaired loans | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.19 | |
Impaired loans | Discount Rate | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.06 | |
Impaired loans | Discount Rate | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.18 | |
Impaired loans | Appraisal of collateral | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Estimate | $ 1,599 | $ 1,621 |
Impaired loans | Appraisal of collateral | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.05 | |
Impaired loans | Appraisal of collateral | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.25 | |
Impaired loans | Appraisal of collateral | Discount Rate | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.10 | |
Impaired loans | Appraisal of collateral | Discount Rate | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.25 | |
Mortgage servicing rights | Discounted cash flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Estimate | $ 3,642 | $ 2,745 |
Mortgage servicing rights | Discounted cash flow | Discount Rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.0904 | 0.0956 |
Mortgage servicing rights | Discounted cash flow | Constant Prepayment Rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.1453 | 0.1802 |
FAIR VALUE - Financial Instrume
FAIR VALUE - Financial Instruments at Carrying Amounts and Estimated Fair Values (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Financial Assets | ||
Interest-bearing deposits with banks | $ 274,495 | $ 99,055 |
Restricted investments in bank stocks | 7,051 | 10,563 |
Investment securities | 445,018 | 466,465 |
Financial Liabilities | ||
Securities sold under agreements to repurchase | 27,595 | 19,466 |
Carrying Amount | ||
Financial Assets | ||
Cash and due from banks | 36,920 | 26,203 |
Interest-bearing deposits with banks | 274,495 | 99,055 |
Restricted investments in bank stocks | 7,051 | 10,563 |
Investment securities | 445,018 | 466,465 |
Loans held for sale | 6,412 | 11,734 |
Loans, net of allowance for loan losses | 1,919,799 | 1,959,539 |
Accrued interest receivable | 8,015 | 8,927 |
Financial Liabilities | ||
Deposits | 2,502,108 | 2,356,880 |
Securities sold under agreements to repurchase | 27,595 | 19,466 |
FHLB advances and other | 2,003 | 58,045 |
Subordinated notes | 31,948 | 31,903 |
Accrued interest payable | 631 | 238 |
Off-balance sheet instruments | 0 | 0 |
Carrying Amount | Derivatives | ||
Financial Assets | ||
Derivatives | 823 | 1,363 |
Financial Liabilities | ||
Derivatives | 272 | 1,956 |
Fair Value | ||
Financial Liabilities | ||
Off-balance sheet instruments | 0 | 0 |
Fair Value | Fair Value, Inputs, Level 1, 2 and 3 | ||
Financial Assets | ||
Cash and due from banks | 36,920 | 26,203 |
Interest-bearing deposits with banks | 274,495 | 99,055 |
Investment securities | 445,018 | 466,465 |
Loans held for sale | 6,412 | 11,734 |
Loans, net of allowance for loan losses | 1,917,091 | 1,953,860 |
Accrued interest receivable | 8,015 | 8,927 |
Financial Liabilities | ||
Deposits | 2,503,695 | 2,359,317 |
Securities sold under agreements to repurchase | 27,595 | 19,466 |
FHLB advances and other | 2,176 | 58,298 |
Subordinated notes | 32,781 | 31,712 |
Accrued interest payable | 631 | 238 |
Fair Value | Fair Value, Inputs, Level 1, 2 and 3 | Derivatives | ||
Financial Assets | ||
Derivatives | 823 | 1,363 |
Financial Liabilities | ||
Derivatives | 272 | 1,956 |
Fair Value | Level 1 | ||
Financial Assets | ||
Cash and due from banks | 36,920 | 26,203 |
Interest-bearing deposits with banks | 274,495 | 99,055 |
Investment securities | 20,228 | 371 |
Loans held for sale | 0 | 0 |
Loans, net of allowance for loan losses | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Financial Liabilities | ||
Deposits | 0 | 0 |
Securities sold under agreements to repurchase | 0 | 0 |
FHLB advances and other | 0 | 0 |
Subordinated notes | 0 | 0 |
Accrued interest payable | 0 | 0 |
Off-balance sheet instruments | 0 | 0 |
Fair Value | Level 1 | Derivatives | ||
Financial Assets | ||
Derivatives | 0 | 0 |
Financial Liabilities | ||
Derivatives | 0 | 0 |
Fair Value | Level 2 | ||
Financial Assets | ||
Cash and due from banks | 0 | 0 |
Interest-bearing deposits with banks | 0 | 0 |
Investment securities | 401,316 | 434,591 |
Loans held for sale | 6,412 | 11,734 |
Loans, net of allowance for loan losses | 0 | 0 |
Accrued interest receivable | 2,169 | 1,529 |
Financial Liabilities | ||
Deposits | 2,503,695 | 2,359,317 |
Securities sold under agreements to repurchase | 27,595 | 19,466 |
FHLB advances and other | 2,176 | 58,298 |
Subordinated notes | 32,781 | 31,712 |
Accrued interest payable | 631 | 238 |
Off-balance sheet instruments | 0 | 0 |
Fair Value | Level 2 | Derivatives | ||
Financial Assets | ||
Derivatives | 277 | 690 |
Financial Liabilities | ||
Derivatives | 272 | 1,956 |
Fair Value | Level 3 | ||
Financial Assets | ||
Cash and due from banks | 0 | 0 |
Interest-bearing deposits with banks | 0 | 0 |
Investment securities | 23,474 | 31,503 |
Loans held for sale | 0 | 0 |
Loans, net of allowance for loan losses | 1,917,091 | 1,953,860 |
Accrued interest receivable | 5,846 | 7,398 |
Financial Liabilities | ||
Deposits | 0 | 0 |
Securities sold under agreements to repurchase | 0 | 0 |
FHLB advances and other | 0 | 0 |
Subordinated notes | 0 | 0 |
Accrued interest payable | 0 | 0 |
Off-balance sheet instruments | 0 | 0 |
Fair Value | Level 3 | Derivatives | ||
Financial Assets | ||
Derivatives | 546 | 673 |
Financial Liabilities | ||
Derivatives | $ 0 | $ 0 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) $ in Thousands | 1 Months Ended |
Apr. 30, 2020USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation settlement fees paid | $ 135 |