Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 05, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
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 | 4750 Lindle Road | |
Entity Address, City or Town | Harrisburg | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 17111 | |
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 | 19,370,897 | |
Entity Central Index Key | 0000826154 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Assets | ||
Cash and due from banks | $ 35,951 | $ 32,586 |
Interest-bearing deposits with banks | 96,558 | 32,575 |
Cash and cash equivalents | 132,509 | 65,161 |
Restricted investments in bank stocks | 11,147 | 11,992 |
Securities available for sale (amortized cost of $566,421 and $549,089 at June 30, 2024 and December 31, 2023, respectively) | 529,082 | 513,519 |
Loans held for sale, at fair value | 1,562 | 5,816 |
Loans | 2,347,603 | 2,298,313 |
Less: Allowance for credit losses | (29,864) | (28,702) |
Net loans | 2,317,739 | 2,269,611 |
Premises and equipment, net | 28,484 | 29,393 |
Cash surrender value of life insurance | 74,119 | 73,204 |
Goodwill | 18,724 | 18,724 |
Other intangible assets, net | 1,974 | 2,414 |
Accrued interest receivable | 14,120 | 13,630 |
Deferred tax assets, net | 21,674 | 22,017 |
Other assets | 47,648 | 38,759 |
Total assets | 3,198,782 | 3,064,240 |
Deposits: | ||
Noninterest-bearing | 425,255 | 430,959 |
Interest-bearing | 2,277,629 | 2,127,855 |
Total deposits | 2,702,884 | 2,558,814 |
Securities sold under agreements to repurchase and federal funds purchased | 14,625 | 9,785 |
FHLB advances and other borrowings | 115,000 | 137,500 |
Subordinated notes | 32,128 | 32,093 |
Other liabilities | 55,769 | 60,992 |
Total liabilities | 2,920,406 | 2,799,184 |
Commitments and contingencies | ||
Shareholders’ Equity | ||
Preferred stock, $1.25 par value per share; 500,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, no par value—$0.05205 stated value per share; 50,000,000 shares authorized; 11,201,269 shares issued and 10,720,225 outstanding at June 30, 2024; 11,204,599 shares issued and 10,612,390 outstanding at December 31, 2023 | 583 | 583 |
Additional paid - in capital | 187,694 | 189,027 |
Retained earnings | 129,670 | 117,667 |
Accumulated other comprehensive loss | (28,404) | (28,476) |
Treasury stock—481,044 and 592,209 shares, at cost at June 30, 2024 and December 31, 2023, respectively | (11,167) | (13,745) |
Total shareholders’ equity | 278,376 | 265,056 |
Total liabilities and shareholders’ equity | $ 3,198,782 | $ 3,064,240 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Securities available for sale, amortized cost | $ 566,421 | $ 549,089 |
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) | 11,201,269 | 11,204,599 |
Common stock, shares outstanding (in shares) | 10,720,225 | 10,612,390 |
Treasury stock (in shares) | 481,044 | 592,209 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Interest income | ||||
Loans | $ 35,537 | $ 31,203 | $ 71,770 | $ 59,947 |
Investment securities - taxable | 4,999 | 4,415 | 9,583 | 8,785 |
Investment securities - tax-exempt | 881 | 865 | 1,758 | 1,730 |
Short-term investments | 1,864 | 418 | 2,820 | 716 |
Total interest income | 43,281 | 36,901 | 85,931 | 71,178 |
Interest expense | ||||
Deposits | 15,265 | 8,608 | 28,781 | 14,810 |
Securities sold under agreements to repurchase and federal funds purchased | 27 | 28 | 52 | 53 |
FHLB advances and other borrowings | 1,152 | 1,386 | 2,626 | 2,638 |
Subordinated notes | 734 | 504 | 1,488 | 1,008 |
Total interest expense | 17,178 | 10,526 | 32,947 | 18,509 |
Net interest income | 26,103 | 26,375 | 52,984 | 52,669 |
Provision for credit losses | 812 | 399 | 1,110 | 1,128 |
Net interest income after provision for credit losses | 25,291 | 25,976 | 51,874 | 51,541 |
Noninterest income | ||||
Service charges on deposit accounts | 1,018 | 984 | 2,023 | 1,946 |
Interchange income | 961 | 993 | 1,872 | 1,958 |
Other service charges, commissions and fees | 265 | 267 | 460 | 462 |
Swap fee income | 375 | 196 | 574 | 196 |
Trust and investment management income | 2,132 | 1,927 | 4,156 | 3,815 |
Brokerage income | 1,180 | 895 | 2,258 | 1,754 |
Mortgage banking activities | 369 | 112 | 827 | 590 |
Income from life insurance | 646 | 645 | 1,280 | 1,235 |
Investment securities losses | (12) | (2) | (17) | (10) |
Other income | 238 | 1,141 | 369 | 1,290 |
Total noninterest income | 7,172 | 7,158 | 13,802 | 13,236 |
Noninterest expenses | ||||
Salaries and employee benefits | 13,195 | 13,054 | 26,947 | 25,250 |
Occupancy | 1,178 | 1,054 | 2,379 | 2,160 |
Furniture and equipment | 1,527 | 1,212 | 2,965 | 2,439 |
Data processing | 1,237 | 1,201 | 2,502 | 2,418 |
Automated teller and interchange fees | 341 | 308 | 692 | 606 |
Advertising and bank promotions | 774 | 919 | 1,172 | 1,324 |
FDIC insurance | 419 | 519 | 860 | 1,023 |
Professional services | 801 | 504 | 1,432 | 1,238 |
Directors' compensation | 272 | 221 | 523 | 468 |
Taxes other than income | 49 | 3 | 543 | 460 |
Intangible asset amortization | 215 | 239 | 440 | 489 |
Merger-related expenses | 1,135 | 0 | 1,807 | 0 |
Other operating expenses | 1,496 | 1,515 | 2,846 | 3,129 |
Total noninterest expenses | 22,639 | 20,749 | 45,108 | 41,004 |
Income before income tax expense | 9,824 | 12,385 | 20,568 | 23,773 |
Income tax expense | 2,086 | 2,547 | 4,299 | 4,779 |
Net income | $ 7,738 | $ 9,838 | $ 16,269 | $ 18,994 |
Per share information: | ||||
Basic earnings per share (in usd per share) | $ 0.74 | $ 0.95 | $ 1.57 | $ 1.83 |
Diluted earnings per share (in usd per share) | 0.73 | 0.94 | 1.55 | 1.82 |
Dividends paid per share (in usd per share) | $ 0.20 | $ 0.20 | $ 0.40 | $ 0.40 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 7,738 | $ 9,838 | $ 16,269 | $ 18,994 |
Other comprehensive (loss) income, net of tax: | ||||
Unrealized (losses) gains on securities available for sale arising during the period | (93) | (2,836) | (1,769) | 5,938 |
Reclassification adjustment for losses realized in net income | 0 | 0 | 0 | 0 |
Net unrealized (losses) gains on securities available for sale | (93) | (2,836) | (1,769) | 5,938 |
Tax effect | 21 | 624 | 395 | (1,306) |
Total other comprehensive (loss) income, net of tax and reclassification adjustments on securities available for sale | (72) | (2,212) | (1,374) | 4,632 |
Unrealized gains on interest rate swaps used in cash flow hedges | 434 | 1,073 | 1,862 | 1,392 |
Reclassification adjustment for losses realized in net income | 0 | 0 | 0 | 0 |
Net unrealized gains on interest rate swaps used in cash flow hedges | 434 | 1,073 | 1,862 | 1,392 |
Tax effect | (98) | (232) | (416) | (306) |
Total other comprehensive income, net of tax and reclassification adjustments on interest rate swaps used in cash flow hedges | 336 | 841 | 1,446 | 1,086 |
Total other comprehensive income (loss), net of tax and reclassification adjustments | 264 | (1,371) | 72 | 5,717 |
Total comprehensive income | $ 8,002 | $ 8,467 | $ 16,341 | $ 24,711 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-In Capital | Retained Earnings | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss | Treasury Stock |
Beginning balance at Dec. 31, 2022 | $ 228,896 | $ (1,984) | $ 584 | $ 189,264 | $ 92,473 | $ (1,984) | $ (39,913) | $ (13,512) |
Increase (Decrease) in Shareholders' Equity | ||||||||
Net income | 18,994 | 18,994 | ||||||
Total other comprehensive (loss) income, net of taxes | 5,717 | 5,717 | ||||||
Cash dividends | (4,244) | (4,244) | ||||||
Share-based compensation plans: | ||||||||
Shares issued, shares acquired including compensation expense | (1,738) | (1) | (1,405) | (332) | ||||
Payment for fractional shares of common stock pursuant to merger | 2,579 | |||||||
Ending balance at Jun. 30, 2023 | 245,641 | 583 | 187,859 | 105,239 | (34,196) | (13,844) | ||
Beginning balance at Mar. 31, 2023 | 240,161 | 584 | 187,572 | 97,519 | (32,825) | (12,689) | ||
Increase (Decrease) in Shareholders' Equity | ||||||||
Net income | 9,838 | 9,838 | ||||||
Total other comprehensive (loss) income, net of taxes | (1,371) | (1,371) | ||||||
Cash dividends | (2,118) | (2,118) | ||||||
Share-based compensation plans: | ||||||||
Shares issued, shares acquired including compensation expense | (869) | (1) | 287 | (1,155) | ||||
Ending balance at Jun. 30, 2023 | 245,641 | 583 | 187,859 | 105,239 | (34,196) | (13,844) | ||
Beginning balance at Dec. 31, 2023 | 265,056 | 583 | 189,027 | 117,667 | (28,476) | (13,745) | ||
Increase (Decrease) in Shareholders' Equity | ||||||||
Net income | 16,269 | 16,269 | ||||||
Total other comprehensive (loss) income, net of taxes | 72 | 72 | ||||||
Cash dividends | (4,266) | (4,266) | ||||||
Share-based compensation plans: | ||||||||
Shares issued, shares acquired including compensation expense | 1,275 | (1,303) | 2,578 | |||||
Payment for fractional shares of common stock pursuant to merger | 0 | |||||||
Payment for fractional shares of common stock pursuant to merger | (30) | (30) | ||||||
Ending balance at Jun. 30, 2024 | 278,376 | 583 | 187,694 | 129,670 | (28,404) | (11,167) | ||
Beginning balance at Mar. 31, 2024 | 271,682 | 583 | 187,267 | 124,075 | (28,668) | (11,575) | ||
Increase (Decrease) in Shareholders' Equity | ||||||||
Net income | 7,738 | 7,738 | ||||||
Total other comprehensive (loss) income, net of taxes | 264 | 264 | ||||||
Cash dividends | (2,143) | (2,143) | ||||||
Share-based compensation plans: | ||||||||
Shares issued, shares acquired including compensation expense | 865 | 457 | 408 | |||||
Payment for fractional shares of common stock pursuant to merger | (30) | (30) | ||||||
Ending balance at Jun. 30, 2024 | $ 278,376 | $ 583 | $ 187,694 | $ 129,670 | $ (28,404) | $ (11,167) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends per share (in usd per share) | $ 0.20 | $ 0.20 | $ 0.40 | $ 0.40 |
Common shares acquired (in shares) | 1,952 | 14,652 | 3,330 | 21,162 |
Treasury stock, shares acquired (in shares) | 17,100 | 65,830 | 111,165 | 38,826 |
Compensation expense, issuance of stock | $ 864 | $ 535 | $ 1,831 | $ 1,154 |
Payment for fractional shares of common stock pursuant to merger | (30) | (30) | ||
Shares issued, shares acquired including compensation expense | $ 865 | $ (869) | $ 1,275 | $ (1,738) |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities | ||
Net income | $ 16,269 | $ 18,994 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Net premium amortization | 836 | 978 |
Depreciation and amortization expense | 2,136 | 2,114 |
Provision for credit losses | 1,110 | 1,128 |
Share-based compensation | 1,831 | 1,154 |
Gains on sales of loans originated for sale | (427) | (118) |
Fair value adjustments on loans held for sale | (31) | (187) |
Mortgage loans originated for sale | (16,472) | (9,829) |
Proceeds from sales of loans originated for sale | 21,184 | 14,564 |
Net gain on sale of OREO and premises held for sale | 0 | (301) |
Net loss on disposal of premises and equipment | 0 | 226 |
Deferred income tax expense | 321 | 886 |
Investment securities losses | 17 | 10 |
Return on investments in limited partnerships | (39) | (12) |
Net (gains) losses on derivatives | (168) | 199 |
Income from life insurance | (1,280) | (1,235) |
Premium on branch sale | 0 | (1,166) |
(Increase) decrease in accrued interest receivable and other assets | (2,752) | 2,816 |
Decrease in accrued interest payable and other liabilities | (3,799) | (8,900) |
Other, net | 367 | 335 |
Net cash provided by operating activities | 19,103 | 21,656 |
Cash flows from investing activities | ||
Maturities, repayments and calls of AFS securities | 31,841 | 19,182 |
Purchases of AFS securities | (50,289) | (9,532) |
Net redemptions (purchases) of restricted investments in bank stocks | 845 | (1,960) |
Net increase in loans | (51,088) | (83,157) |
Investment in limited partnerships | (4,521) | (716) |
Purchases of bank premises and equipment | (100) | (1,505) |
Proceeds from disposal of OREO and premises held for sale | 0 | 1,662 |
Proceeds from disposal of premises and equipment | 0 | 43 |
Net cash paid in branch sale | 0 | (17,656) |
Death benefit proceeds from life insurance contracts | 0 | 342 |
Net cash used in investing activities | (73,312) | (93,297) |
Cash flows from financing activities | ||
Net increase in deposits | 144,070 | 65,432 |
Net decrease in borrowings with original maturities less than 90 days | (17,660) | (10,933) |
Proceeds from FHLB advances with original maturities greater than 90 days | 0 | 40,000 |
Payments on FHLB advances with original maturities greater than 90 days | 0 | (228) |
Dividends paid | (4,266) | (4,244) |
Acquisition of treasury stock | 0 | (2,579) |
Shares repurchased as treasury stock for employee taxes associated with restricted stock vesting | (637) | (378) |
Proceeds from issuance of employee stock purchase plan shares | 80 | 66 |
Other | (30) | 0 |
Net cash provided by financing activities | 121,557 | 87,136 |
Net increase in cash and cash equivalents | 67,348 | 15,495 |
Cash and cash equivalents at beginning of period | 65,161 | 60,823 |
Cash and cash equivalents at end of period | 132,509 | 76,318 |
Cash paid during the period for: | ||
Interest | 33,044 | 17,934 |
Income taxes | 4,625 | 1,950 |
Supplemental schedule of noncash activities: | ||
OREO acquired in settlement of loans | 0 | 85 |
Lease liabilities arising from obtaining ROU assets | $ 0 | $ 2,416 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2024 | |
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. 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’s lending area also includes adjacent counties in Pennsylvania and Maryland, as well as Loudon County, Virginia and Berkeley, Jefferson and Morgan Counties, West Virginia. 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. There have been no material changes to the Company's significant accounting policies for the three and six months ended June 30, 2024. The December 31, 2023 consolidated balance sheet information contained in this Quarterly Report on Form 10-Q was derived from the Company's 2023 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, 2023. Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. All significant intercompany transactions and accounts have been eliminated. Certain reclassifications have been made to the prior period amounts to conform with current period classifications. These reclassifications did not have a material impact on the Company's consolidated financial condition, results of operations or statement of consolidated cash flows. 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. To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. Allowance for Credit Losses - Loans On January 1, 2023, the Company adopted ASU No. 2016-13 , Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), the current expected credit losses accounting standard commonly referred to as "CECL," which replaced the incurred loss model with the lifetime expected loss model. The CECL methodology requires an organization to measure all expected credit losses over the contractual term for financial assets measured at amortized cost, including loan receivables and held-to-maturity securities, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The CECL methodology also applies to off-balance sheet credit exposures not accounted for as insurance (e.g., loan commitments, standby letters of credit, financial guarantees and other similar instruments), net investments in leases recognized by a lessor in accordance with ASC Topic 842 on leases and AFS debt securities. The Company calculates credit losses over the estimated life of the applicable financial assets using the DCF methodology for the quantitative analysis for the majority of its loan segments, which applies the probability of default and loss given default factors to future cash flows, and then adjusts to the net present value to derive the required reserve. Reasonable and supportable macroeconomic conditions include unemployment and GDP. Model assumptions include the discount rate, prepayments and curtailments. The validation of credit models also included determining the length of the reasonable and supportable forecast and regression period and utilizing national peer group historical loss rates. For the consumer loan segments, the remaining life methodology is applied as a practical expedient based on the risk characteristics. Allowance for Credit Losses on Loans The ACL represents the amount that, in management's judgment, appropriately reflects credit losses inherent in the loan portfolio at the balance sheet date. Loans deemed to be uncollectible are charged against the ACL on loans and subsequent recoveries, if any, are credited to the ACL on loans when received. Changes to the ACL are recorded through the provision for credit losses on loans in the unaudited condensed consolidated statements of income. The ACL is maintained at a level considered appropriate to absorb credit losses over the expected life of the loan. The ACL for expected credit losses is determined based on a quantitative assessment of two categories of loans: collectively evaluated loans and individually evaluated loans. In addition, the ACL includes a qualitative component which adjusts the CECL model results for risk factors that are not considered within the CECL model but are relevant in assessing the expected credit losses within the loan classes. The ACL on loans is measured on a collective basis when similar risk characteristics exist within the Company's loan segments between commercial and consumer. For purposes of estimating the Company’s ACL, management generally evaluates collectively evaluated loans by federal call code, which represents the loan classes based upon U.S. regulatory loan classification rules, in order to group loans with similar risk characteristics. Each of these loan segments are broken down into multiple loan classes, which are characterized by loan type, collateral type, risk attributions and the manner in which management monitors the performance of the borrower. The risks associated with lending activities differ and are subject to the impact of change in interest rates, market conditions and the impact of economic conditions on the collateral securing the loans, and general economic conditions. The commercial loan segment includes commercial real estate, acquisition and development, commercial and industrial and municipal loan classes. The consumer loan segment includes residential mortgage, installment and other consumer loans. Loans collectively evaluated includes loans on accrual status, except for loans previously restructured that do not share similar risk characteristics, which are individually evaluated. The ACL for loans collectively evaluated is measured using a lifetime expected loss rate model that considers historical loss performance and past events in addition to forecasts of future economic conditions. The Company elected to use the DCF methodology for the quantitative analysis for the majority of its loan segments, which applies the probability of default to future cash flows, using a loss driver model and loss given default factors, and then adjusts to the net present value to derive the required reserve. The probability of default estimates are derived through the application of reasonable and supportable economic forecasts to the regression models, which incorporates the Company's and peer loss-rate data, unemployment rate and GDP. The reasonable and supportable forecasts of the selected economic metrics are then input into the regression model to calculate an expected default rate. The expected default rates are then applied to expected loan balances estimated through the consideration of contractual repayment terms and expected prepayments. The prepayment and curtailment assumptions adjust the contractual terms of the loan to arrive at the expected cash flows. The development and validation of credit models also included determining the length of the reasonable and supportable forecast and regression period and utilizing national peer group historical loss rates. Management selected the national unemployment rate and GDP as the drivers of the quantitative portion of collectively evaluated reserves on loan classes reliant upon the DCF methodology. For the consumer loan segment, the quantitative reserve was calculated using the remaining life methodology where the average historical bank-specific and peer loss rates are applied to expected loan balances over an estimated remaining life of loans. The estimated remaining life is calculated using historical bank-specific loan attrition data. Loans that do not share similar risk characteristics are evaluated on an individual basis and are excluded from the collective evaluation for the ACL. Loans identified to be individually evaluated under CECL include loans on nonaccrual status and may include accruing loans that do not share similar risk characteristics to other accruing loans collectively evaluated. A specific reserve analysis is applied to the individually evaluated loans, which considers collateral value, an observable market price or the present value of expected future cash flows. A specific reserve may be assigned if the measured value of the loan using one of the before mentioned methods is less than the current carrying value of the loans. A loan is considered collateral-dependent when the Company determines foreclosure is probable or the borrower is experiencing financial difficulty and the Company expects repayment to be provided substantially through the operation or sale of the collateral. Collateral could be in the form of real estate, equipment or business assets. An ACL may result for a collateral-dependent loan if the fair value of the underlying collateral, as of the reporting date, adjusted for expected costs to repair or sell, was less than the amortized cost basis of the loan. If repayment of the loan is instead dependent only on the operation, rather than the sale of the collateral, the measure of the ACL does not incorporate estimated costs to sell. For loans evaluated on the basis of projected future principal and interest cash flows, the Company discounts the expected cash flows at the effective interest rate of the loan. An ACL will result if the present value of expected cash flows is less than the amortized cost basis of the loan. Based on management's analysis, adjustments may be applied for additional factors impacting the risk of loss in the loan portfolio beyond the quantitatively calculated reserve on collectively evaluated loans. As the quantitative reserve calculation incorporates historical conditions, management may consider an additional or reduced reserve is warranted through qualitative risk factors based on current and expected conditions. These qualitative risk factors include significant or unexpected changes in: • Lending policies, procedures, underwriting standards and recovery practices; • Nature and volume of loans; • Concentrations of credit; • Collateral valuation trends; • Delinquency and classified loan trends; • Experience, ability and depth of management and lending staff; • Quality of loan review system; and • Economic conditions and other external factors. For PCD loans, the nonaccrual status is determined in the same manner as for other loans. In accordance with the CECL standard, the Company accounts for its PCD loans under ASC 310-20, Receivables - Nonrefundable Fees and Other Asset s ("ASC 310-20"). These loans are initially recorded at fair value and include credit and interest rate marks associated with acquisition accounting adjustments. Purchase premiums or discounts are subsequently amortized as an adjustment to yield over the estimated contractual lives of the loans. Under ASC 310-20, the acquired loans are evaluated on an individual asset level, and not maintained in pools and accounted for as units of accounts, which would permit treating each pool as a single asset. On January 1, 2023, the Company adopted ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”). ASU 2022-02 requires that the Company evaluate, based on the guidance for accounting for loan modifications, whether the borrower is experiencing financial difficulty, if the modification results in a more-than-insignificant direct change in the contractual cash flows and whether the modifications represent terms that would result in a new loan or a continuation of an existing loan. The Company refers to these loans as "financial difficulty modifications" or "FDMs." This change requires all loan modifications to be accounted for under the general loan modification guidance in ASC 310-20, Receivables – Nonrefundable Fees and Other Costs, and subjects entities to new disclosure requirements on loan modifications to borrowers experiencing financial difficulty. If a modification occurs while the loan is on accrual status, it will continue to accrue interest under the modified terms. After the initial modification and recognition of a FDM, the Company will monitor the performance of the borrower. If no subsequent qualifying modifications are made to the FDM, the loan does not require disclosure in the current period's disclosures after the one-year period has elapsed. A comprehensive analysis of the ACL is performed by the Company on a quarterly basis. Management evaluates the adequacy of the ACL utilizing a defined methodology to determine if it properly addresses the current and expected risks in the loan portfolio, which considers the performance of borrowers and specific evaluation of individually evaluated loans including historical loss experiences, trends in delinquencies, nonperforming loans and other risk assets, and the qualitative factors. Risk factors are continuously reviewed and adjusted, as needed, by management when conditions support a change. Management believes its approach properly addresses relevant accounting and bank regulatory guidance for loans both collectively and individually evaluated. The results of the comprehensive analysis, including recommended changes, are governed by the Company's Reserve Adequacy Committee. See Note 4, Loans and Allowance for Credit Losses, to the unaudited condensed consolidated financial statements under Part I, Item 1, "Financial Information," for a description of the Company’s loan classes and differing levels of associated credit risk. Allowance for Credit Losses on AFS Securities Under CECL, the Company is still required to conduct an impairment evaluation on AFS securities to determine 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 these situations apply, the guidance continues to require the Company to reduce the security's amortized cost basis down to its fair value through earnings. The Company also evaluates the unrealized losses on AFS securities to determine if a security's decline in fair value below its amortized cost basis is due to credit factors. 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 a decline in the fair value of the security due to a credit factor. 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. If this assessment indicates that a credit loss exists, the present value of the expected cash flows of the security is compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost, an ACL is recorded for the credit loss, which is limited by the amount that the fair value is less than the amortized cost basis. Any additional amount of loss would be due to non-credit factors and is recorded in AOCI, net of taxes. If a credit loss is recognized in earnings, subsequent improvements to the expectation of collectability will be recognized through the ACL. If the fair value of the security increases above its amortized cost, the unrealized gain will be recorded in AOCI, net of taxes, on the unaudited condensed consolidated statements of financial condition. Accrued interest receivable on AFS securities is excluded from the estimate of credit losses. See Note 3, Investment Securities, to the unaudited condensed consolidated financial statements under Part I, Item 1, "Financial Information," for a description of the Company’s investment securities and impairment evaluation. Recent Accounting Pronouncements In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . The updated guidance requires enhanced disclosures for significant expenses by reportable operating segments. The significant expense categories would be those regularly provided to the Company's chief operating decision-maker ("CODM") and included in an operating segment's measures of profit or loss. Other required disclosures include the composition of other segment items, the title and position of the CODM and an explanation on how the CODM evaluates and uses the reportable segment's performance. This guidance for segment reporting is effective for fiscal years beginning after December 15, 2023 and interim periods with fiscal years beginning after December 15, 2024, with early adoption permitted. The Company will adopt the new standard for the annual reporting period beginning January 1, 2024 and for interim periods beginning January 1, 2025. The Company is not currently required to report segment information and, as such, does not anticipate that the updated guidance will have a significant impact on its consolidated financial statements. In December 2023, the Financial Accounting Standards Board issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which will require updates to the disclosures of the income tax rate reconciliation and income taxes paid. The income tax rate reconciliation will require expanded disclosure, using percentages and reporting currency amounts, to include specific categories, including state and local income tax, net of the federal income tax effect, tax credits and nontaxable and nondeductible items, with additional qualitative explanations of individually significant reconciling items. The amount of income taxes paid will require disaggregation by jurisdictional categories: federal, state and foreign. This guidance for income tax disclosures is effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the updated guidance; however, management does not expect it will have a significant impact on its consolidated financial statements. In March 2024, the SEC adopted the final rule under SEC Release No. 33-11275, “The Enhancement and Standardization of Climate-Related Disclosures for Investors”. This rule will require registrants to disclose certain climate-related information in registration statements and annual reports. The disclosure requirements will apply to the Company's fiscal year beginning January 1, 2026. The Company is currently evaluating the final rule to determine its impact on the Company's consolidated financial statements and disclosures. |
MERGER
MERGER | 6 Months Ended |
Jun. 30, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
MERGER | MERGER On July 1, 2024, Orrstown completed the previously announced merger of equals (the “Merger”) with Codorus Valley, pursuant to that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of December 12, 2023, by and between Orrstown and Codorus Valley. At the effective time of the Merger (the “Effective Time”), Codorus Valley was merged with and into Orrstown, with Orrstown as the surviving corporation, which was promptly followed by the merger of Codorus Valley’s wholly-owned bank subsidiary, PeoplesBank, A Codorus Valley Company, with and into Orrstown Bank, a wholly-owned subsidiary of Orrstown, with Orrstown Bank as the surviving bank. Pursuant to the terms of the Merger Agreement, each share of Codorus Valley common stock, $2.50 par value per share (“Codorus Common Stock”), outstanding immediately prior to the Effective Time was canceled and converted into the right to receive 0.875 shares (the “Exchange Ratio”) of Orrstown common stock, no par value per share (“Orrstown Common Stock”), with an amount in cash, without interest, to be paid in lieu of fractional shares. In addition, at the Effective Time, (i) each option to purchase Codorus Valley common stock issued under Codorus Valley’s 2007 Long-Term Incentive Plan, as amended, 2017 Long-Term Incentive Plan, as amended, and any other similar plan (collectively, the “Codorus Valley Equity Plans”), outstanding immediately prior to the Effective Time was automatically converted into an option to purchase a number of shares of Orrstown common stock equal to the product of the number of shares of Codorus Valley common stock subject to such stock option immediately prior to the Effective Time and the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (a) the exercise price per share of Codorus Valley common stock of such stock option immediately prior to the Effective Time divided by (b) the Exchange Ratio; (ii) all time-based restricted stock awards and time-based restricted stock unit awards granted under the Codorus Valley Equity Plans were vested in full; and (iii) all performance-based restricted stock awards and performance-based restricted stock unit awards granted under the Codorus Valley Equity Plans were vested in full. In addition, the 2007 Codorus Valley Bancorp, Inc. Restated Employee Stock Purchase Plan was terminated prior to the closing date of the Merger. Each outstanding share of Orrstown Common Stock remained outstanding and was unaffected by the Merger. As of June 30, 2024 and December 31, 2023, Codorus Valley had total assets of $2.2 billion, total loans of $1.7 billion and total deposits of $1.9 billion. Common shares outstanding totaled 9,751,323 and 9,642,851 at June 30, 2024 and December 31, 2023, respectively. PeoplesBank operated 22 full-service branches and eight limited purpose branches in Pennsylvania and Maryland as of June 30, 2024. Following the Merger, Orrstown operated 51 branches as of July 1, 2024. On August 5, 2024, Orrstown announced the Bank intends to close six of its branches. Five of the branch closures are subject to regulatory approval and are expected to be completed in the fourth quarter of 2024 and one of the branch closures qualifies as a branch consolidation and will be completed in the third quarter of 2024. After the branch closures are complete, the Bank will have 38 full-service branches and seven limited purpose branches. The total aggregate consideration delivered to holders of Codorus Valley common stock was approximately 8,532,107 shares of Orrstown common stock. The issuance of shares of Orrstown common stock in connection with the Merger was registered under the Securities Act on a registration statement initially filed by Orrstown with the SEC on March 29, 2024 and declared effective on April 23, 2024 (the “Registration Statement”). The consideration transferred at the close of the transaction is estimated at $233.4 million based on the closing market price of Orrstown common stock of $27.36 on June 28, 2024. The Merger accomplishes the Company’s objectives of providing increased market opportunities and expanding its branch network through a contiguous footprint in Central and Eastern Pennsylvania and the Greater Baltimore, Maryland area. Further, the merger creates an expanded product suite based on the complementary nature of the products and customers of both companies and increases lending capacity, which will support growth of the existing client base and is expected to provide an opportunity to mitigate risks and increase potential returns. The initial purchase accounting for the Merger in accordance with GAAP for this business combination is not finalized, therefore the Company is not yet able to disclose the preliminary fair value of the Codorus Valley assets acquired and liabilities assumed. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 6 Months Ended |
Jun. 30, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | INVESTMENT SECURITIES At June 30, 2024 and December 31, 2023, all investment securities were classified as AFS. The following table summarizes amortized cost, fair value and ACL of investment securities, and the corresponding amounts of gross unrealized gains and losses recognized in AOCI, and the allowance for credit losses at June 30, 2024 and December 31, 2023: Amortized Cost Gross Unrealized Gross Unrealized Allowance for Credit Losses Fair Value June 30, 2024 U.S. Treasury securities $ 20,050 $ — $ 2,337 $ — $ 17,713 U.S. Government Agencies 3,444 129 — — 3,573 States and political subdivisions 221,404 7 20,965 — 200,446 GSE residential MBSs 60,430 — 3,587 — 56,843 GSE commercial MBSs 3,778 311 — — 4,089 GSE residential CMOs 123,116 71 6,944 — 116,243 Non-agency CMOs 34,704 248 3,544 — 31,408 Asset-backed 99,386 487 1,215 — 98,658 Other 109 — — — 109 Totals $ 566,421 $ 1,253 $ 38,592 $ — $ 529,082 December 31, 2023 U.S. Treasury securities $ 20,057 $ — $ 2,217 $ — $ 17,840 U.S. Government Agencies 3,994 157 — — 4,151 States and political subdivisions 221,624 28 18,530 — 203,122 GSE residential MBSs 61,669 — 4,037 — 57,632 GSE commercial MBS 4,387 356 — — 4,743 GSE residential CMOs 79,284 18 6,200 — 73,102 Non-agency CMOs 48,162 316 3,809 — 44,669 Asset-backed 109,786 442 2,094 — 108,134 Other 126 — — — 126 Totals $ 549,089 $ 1,317 $ 36,887 $ — $ 513,519 The following table summarizes investment securities with unrealized losses at June 30, 2024 and December 31, 2023, 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 June 30, 2024 U.S. Treasury securities — $ — $ — 3 $ 17,713 $ 2,337 3 $ 17,713 $ 2,337 States and political subdivisions 6 2,029 45 42 197,920 20,920 48 199,949 20,965 GSE residential MBSs — — — 15 56,843 3,587 15 56,843 3,587 GSE residential CMOs 10 42,061 326 16 59,426 6,618 26 101,487 6,944 Non-agency CMOs 1 929 2 5 22,280 3,542 6 23,209 3,544 Asset-backed 3 18,648 54 10 51,393 1,161 13 70,041 1,215 Totals 20 $ 63,667 $ 427 91 $ 405,575 $ 38,165 111 $ 469,242 $ 38,592 December 31, 2023 U.S. Treasury securities — $ — $ — 3 $ 17,840 $ 2,217 3 $ 17,840 $ 2,217 States and political subdivisions 4 2,419 53 40 199,933 18,477 44 202,352 18,530 GSE residential MBSs — — — 15 57,632 4,037 15 57,632 4,037 GSE residential CMOs 4 12,710 186 14 56,765 6,014 18 69,475 6,200 Non-agency CMOs 3 11,531 83 4 16,334 3,726 7 27,865 3,809 Asset-backed 1 865 4 15 74,407 2,090 16 75,272 2,094 Totals 12 $ 27,525 $ 326 91 $ 422,911 $ 36,561 103 $ 450,436 $ 36,887 The Company is required to conduct an impairment evaluation on AFS securities to determine 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 these situations apply, the guidance requires the Company to reduce the security's amortized cost basis down to its fair value through earnings. The Company also evaluates the unrealized losses on AFS securities to determine if a security's decline in fair value below its amortized cost basis is due to credit factors. The evaluation is based upon factors such as the creditworthiness of the underlying issuers, 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 a decline in the fair value of the security due to a credit factor. 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. If this assessment indicates that a credit loss exists, the present value of the expected cash flows of the security is compared to the amortized cost basis of the security. Under the CECL standard, if the present value of the cash flows expected to be collected is less than the amortized cost, an ACL is recorded for the credit loss, which is limited by the amount that the fair value is less than the amortized cost basis. Any additional amount of loss would be due to non-credit factors and is recorded in AOCI, net of taxes. If a credit loss is recognized in earnings, subsequent improvements to the expectation of collectability will be recognized through the ACL. If the fair value of the security increases above its amortized cost, the unrealized gain will be recorded in AOCI, net of taxes, on the unaudited condensed consolidated balance sheets. The Company did not record an ACL on the AFS securities at June 30, 2024, December 31, 2023 or upon implementation of CECL on January 1, 2023. As of these periods, the Company considers the unrealized losses on the AFS securities to be related to fluctuations in market conditions, primarily interest rates, and not reflective of deterioration in credit. In addition, the Company maintains that it has the intent and ability to hold these AFS securities until the amortized cost is recovered and it is more likely than not that any of AFS securities in an unrealized loss position would not be required to be sold. At June 30, 2024 and December 31, 2023, unrealized losses were due to market uncertainty resulting from inflation and higher interest rates from the time of the security purchase. 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 declines in fair value are due to credit factors. States and Political Subdivisions. The unrealized losses presented in the table above have been caused by a rise in interest rates from the time these securities were purchased. Management evaluates the financial performance of the issuers, including the investment rating, the state of the issuer of the security and other support in determining whether declines in fair value are due to credit factors. GSE Residential CMOs and GSE Residential MBS. The unrealized losses presented in the table above have been caused by a widening of spreads and a rise in interest rates 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. Non-Agency CMOs. The unrealized losses presented in the table above were caused by a widening of spreads and a rise in interest rates from the time the securities were purchased. Management considers the investment rating and other credit support in its evaluation, including delinquencies and credit enhancements, in determining whether declines in fair value are due to credit factors. Asset-backed. The unrealized losses presented in the table above were caused by a widening of spreads and a rise in interest rates from the time the securities were purchased. Management considers the investment rating and other credit support in its evaluation, including delinquencies and credit enhancements, in determining whether declines in fair value are due to credit factors. The Company does not intend to sell the aforementioned investment securities with unrealized losses and it is more likely than not that the Company will not be required to sell them before recovery of their amortized cost basis, which may be maturity. In addition, the unrealized losses are not credit related. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at June 30, 2024. The following table summarizes amortized cost and fair value of investment securities by contractual maturity at June 30, 2024. Expected maturities may differ from contractual maturities if issuers 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 36,406 32,567 Due after five years through ten years 58,620 53,071 Due after ten years 149,981 136,203 CMOs and MBSs 222,028 208,583 Asset-backed 99,386 98,658 Totals $ 566,421 $ 529,082 The following table summarizes proceeds from sales of investment securities and gross gains and gross losses for the three and six months ended June 30, 2024 and 2023: Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Proceeds from sale of investment securities $ — $ — $ — $ — Gross gains — — — — Gross losses 12 2 17 10 |
LOANS AND ALLOWANCE FOR CREDIT
LOANS AND ALLOWANCE FOR CREDIT LOSSES | 6 Months Ended |
Jun. 30, 2024 | |
Receivables [Abstract] | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | LOANS AND ALLOWANCE FOR CREDIT 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 the value of its 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 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 is typical. However, these procedures cannot eliminate the risk of loss associated with commercial and industrial lending. At June 30, 2024 and December 31, 2023, commercial and industrial loans include $5.2 million and $5.7 million, respectively, net of deferred fees and costs, originated through the SBA PPP. At June 30, 2024, the Bank has $43 thousand of net deferred SBA PPP fees remaining to be recognized through net interest income over the remaining life of the loans. As these loans are 100% guaranteed by the SBA, there is no associated ACL at June 30, 2024 and December 31, 2023. 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 clients for a specific utility. The Company originates loans to its retail clients, 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 85% 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. The following table presents the loan portfolio by segment and class, excluding residential LHFS, at June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 Commercial real estate: Owner occupied $ 371,301 $ 373,757 Non-owner occupied 710,477 694,638 Multi-family 151,542 150,675 Non-owner occupied residential 89,156 95,040 Acquisition and development: 1-4 family residential construction 32,439 24,516 Commercial and land development 129,883 115,249 Commercial and industrial 374,976 367,085 Municipal 10,594 9,812 Residential mortgage: First lien 271,153 266,239 Home equity - term 4,633 5,078 Home equity - lines of credit 192,736 186,450 Installment and other loans 8,713 9,774 Total loans $ 2,347,603 $ 2,298,313 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 may determine to be either individually evaluated, referred to as "Substandard - Individually Evaluated Loan," or collectively evaluated, referred to as "Substandard Non-Individually Evaluated Loan." 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, senior 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 presents the amortized cost basis of the loan portfolio, by year of origination, loan class, and credit quality, as of June 30, 2024 and December 31, 2023. For residential and consumer loan classes, the Company also evaluates credit quality based on the aging status of the loan and payment activity, which residential mortgage and installment and other consumer loans are presented below based on payment performance: performing or nonperforming. Term Loans Amortized Cost Basis by Origination Year As of June 30, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Basis Revolving Loans Converted to Term Total Commercial Real Estate: Owner-occupied: Risk rating Pass $ 16,172 $ 54,321 $ 99,774 $ 68,370 $ 20,368 $ 78,843 $ 5,518 $ — $ 343,366 Special mention — — — 1,370 1,154 508 165 — 3,197 Substandard - Non-IEL — 704 10,000 2,957 5,994 1,538 95 — 21,288 Substandard - IEL — — — 1,239 — 2,211 — — 3,450 Total owner-occupied loans $ 16,172 $ 55,025 $ 109,774 $ 73,936 $ 27,516 $ 83,100 $ 5,778 $ — $ 371,301 Current period gross charge offs - owner-occupied $ — $ — $ — $ — $ — $ 12 $ — $ — $ 12 Non-owner occupied: Risk rating Pass $ 38,792 $ 79,834 $ 99,324 $ 227,068 $ 82,064 $ 176,728 $ 643 $ — $ 704,453 Special mention — — — 341 — 2,124 — — 2,465 Substandard - Non-IEL — — — — — 2,697 — 862 3,559 Substandard - IEL — — — — — — — — — Total non-owner occupied loans $ 38,792 $ 79,834 $ 99,324 $ 227,409 $ 82,064 $ 181,549 $ 643 $ 862 $ 710,477 Current period gross charge offs - non-owner occupied $ — $ — $ — $ — $ — $ — $ — $ — $ — Multi-family: Risk rating Pass $ 5,844 $ 2,823 $ 61,840 $ 28,489 $ 12,511 $ 38,021 $ 346 $ — $ 149,874 Special mention — — 1,119 — — 237 — — 1,356 Substandard - Non-IEL — — — — — — — — — Substandard - IEL — — — — — 312 — — 312 Total multi-family loans $ 5,844 $ 2,823 $ 62,959 $ 28,489 $ 12,511 $ 38,570 $ 346 $ — $ 151,542 Current period gross charge offs - multi-family $ — $ — $ — $ — $ — $ — $ — $ — $ — Non-owner occupied residential: Risk rating Pass $ 2,901 $ 10,156 $ 20,153 $ 16,307 $ 6,810 $ 31,235 $ 399 $ — $ 87,961 Special mention — — — — — 504 — — 504 Substandard - Non-IEL — — — — — 425 — — 425 Substandard - IEL — 2 — 185 — 79 — — 266 Total non-owner occupied residential loans $ 2,901 $ 10,158 $ 20,153 $ 16,492 $ 6,810 $ 32,243 $ 399 $ — $ 89,156 Current period gross charge offs - non-owner occupied residential $ — $ — $ — $ — $ — $ — $ — $ — $ — continued Term Loans Amortized Cost Basis by Origination Year As of June 30, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Basis Revolving Loans Converted to Term Total Acquisition and development: 1-4 family residential construction: Risk rating Pass $ 13,971 $ 17,179 $ 865 $ — $ — $ — $ — $ 129 $ 32,144 Special mention 74 221 — — — — — — 295 Substandard - Non-IEL — — — — — — — — — Substandard - IEL — — — — — — — — — Total 1-4 family residential construction loans $ 14,045 $ 17,400 $ 865 $ — $ — $ — $ — $ 129 $ 32,439 Current period gross charge offs - 1-4 family residential construction $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial and land development: Risk rating Pass $ 15,213 $ 39,209 $ 43,482 $ 5,455 $ 9,826 $ 1,567 $ 5,533 $ 8,818 $ 129,103 Special mention — — — — 780 — — — 780 Substandard - Non-IEL — — — — — — — — — Substandard - IEL — — — — — — — — — Total commercial and land development loans $ 15,213 $ 39,209 $ 43,482 $ 5,455 $ 10,606 $ 1,567 $ 5,533 $ 8,818 $ 129,883 Current period gross charge offs - commercial and land development $ — $ 23 $ — $ — $ — $ — $ — $ — $ 23 Commercial and Industrial: Risk rating Pass $ 30,700 $ 60,734 $ 63,069 $ 57,202 $ 21,753 $ 26,589 $ 95,701 $ 3,249 $ 358,997 Special mention — — — 31 7 946 320 — 1,304 Substandard - Non-IEL — — — 5,861 — 217 8,568 — 14,646 Substandard - IEL — 12 — — 2 — 15 — 29 Total commercial and industrial loans $ 30,700 $ 60,746 $ 63,069 $ 63,094 $ 21,762 $ 27,752 $ 104,604 $ 3,249 $ 374,976 Current period gross charge offs - commercial and industrial $ — $ — $ 54 $ — $ — $ 6 $ — $ — $ 60 Municipal: Risk rating Pass $ 1,577 $ — $ — $ 3,124 $ — $ 5,893 $ — $ — $ 10,594 Total municipal loans $ 1,577 $ — $ — $ 3,124 $ — $ 5,893 $ — $ — $ 10,594 Current period gross charge offs - municipal $ — $ — $ — $ — $ — $ — $ — $ — $ — Residential mortgage: First lien: Payment performance Performing $ 18,111 $ 44,351 $ 65,479 $ 33,167 $ 7,856 $ 98,520 $ — $ 630 $ 268,114 Nonperforming — — 248 232 — 2,559 — — 3,039 Total first lien loans $ 18,111 $ 44,351 $ 65,727 $ 33,399 $ 7,856 $ 101,079 $ — $ 630 $ 271,153 Current period gross charge offs - first lien $ — $ — $ — $ — $ — $ — $ — $ — $ — continued Term Loans Amortized Cost Basis by Origination Year As of June 30, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Basis Revolving Loans Converted to Term Total Home equity - term: Payment performance Performing $ 183 $ 473 $ 674 $ 71 $ 390 $ 2,840 $ — $ — $ 4,631 Nonperforming — — — — — 2 — — 2 Total home equity - term loans $ 183 $ 473 $ 674 $ 71 $ 390 $ 2,842 $ — $ — $ 4,633 Current period gross charge offs - home equity - term $ — $ — $ — $ — $ — $ — $ — $ — $ — Home equity - lines of credit: Payment performance Performing $ — $ — $ — $ — $ — $ — $ 190,786 $ 535 $ 191,321 Nonperforming — — — — — — 1,199 216 1,415 Total residential real estate - home equity - lines of credit loans $ — $ — $ — $ — $ — $ — $ 191,985 $ 751 $ 192,736 Current period gross charge offs - home equity - lines of credit $ — $ — $ — $ — $ — $ — $ 50 $ — $ 50 Installment and other loans: Payment performance Performing $ 593 $ 568 $ 316 $ 281 $ 78 $ 848 $ 6,011 $ — $ 8,695 Nonperforming — 3 — — — 15 — — 18 Total Installment and other loans $ 593 $ 571 $ 316 $ 281 $ 78 $ 863 $ 6,011 $ — $ 8,713 Current period gross charge offs - installment and other $ 74 $ 12 $ — $ — $ — $ 18 $ 14 $ — $ 118 Term Loans Amortized Cost Basis by Origination Year As of December 31, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Basis Revolving Loans Converted to Term Total Commercial Real Estate: Owner-occupied: Risk rating Pass $ 50,829 $ 103,192 $ 69,888 $ 21,232 $ 21,251 $ 62,634 $ 4,941 $ — $ 333,967 Special mention — — 2,517 1,176 — 1,314 — — 5,007 Substandard - Non-IEL — 9,923 — 6,075 — 2,687 312 — 18,997 Substandard - IEL — — — 13,366 — 2,420 — — 15,786 Total owner-occupied loans $ 50,829 $ 113,115 $ 72,405 $ 41,849 $ 21,251 $ 69,055 $ 5,253 $ — $ 373,757 Current period gross charge offs - owner-occupied $ — $ — $ — $ — $ — $ — $ — $ — $ — Non-owner occupied: Risk rating Pass $ 82,879 $ 102,212 $ 235,031 $ 83,652 $ 63,176 $ 120,696 $ 509 $ — $ 688,155 Special mention — — — 524 — 2,112 — — 2,636 Substandard - Non-IEL — — — — — 2,739 — 868 3,607 Substandard - IEL — — — — — 240 — — 240 Total non-owner occupied loans $ 82,879 $ 102,212 $ 235,031 $ 84,176 $ 63,176 $ 125,787 $ 509 $ 868 $ 694,638 Current period gross charge offs - non-owner occupied $ — $ — $ — $ — $ — $ — $ — $ — $ — continued Term Loans Amortized Cost Basis by Origination Year As of December 31, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Basis Revolving Loans Converted to Term Total Multi-family: Risk rating Pass $ 2,701 $ 61,805 $ 28,541 $ 12,694 $ 7,437 $ 33,895 $ 117 $ — $ 147,190 Special mention — — — — 244 2,008 — — 2,252 Substandard - Non-IEL — — — — — — — — — Substandard - IEL — — — — — 1,233 — — 1,233 Total multi-family loans $ 2,701 $ 61,805 $ 28,541 $ 12,694 $ 7,681 $ 37,136 $ 117 $ — $ 150,675 Current period gross charge offs - multi-family $ — $ — $ — $ — $ — $ — $ — $ — $ — Non-owner occupied residential: Risk rating Pass $ 10,075 $ 20,473 $ 16,947 $ 7,974 $ 6,444 $ 28,319 $ 1,130 $ — $ 91,362 Special mention — — — — — 731 — — 731 Substandard - Non-IEL — — — — — 375 — — 375 Substandard - IEL 2 — 192 1,461 — 917 — — 2,572 Total non-owner occupied residential loans $ 10,077 $ 20,473 $ 17,139 $ 9,435 $ 6,444 $ 30,342 $ 1,130 $ — $ 95,040 Current period gross charge offs - non-owner occupied residential $ — $ — $ — $ — $ — $ 12 $ — $ — $ 12 Acquisition and development: 1-4 family residential construction: Risk rating Pass $ 18,820 $ 5,400 $ — $ — $ — $ — $ — $ — $ 24,220 Special mention 222 — 74 — — — — — 296 Substandard - Non-IEL — — — — — — — — — Substandard - IEL — — — — — — — — — Total 1-4 family residential construction loans $ 19,042 $ 5,400 $ 74 $ — $ — $ — $ — $ — $ 24,516 Current period gross charge offs - 1-4 family residential construction $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial and land development: Risk rating Pass $ 28,829 $ 48,453 $ 9,847 $ 9,927 $ 110 $ 1,774 $ 6,574 $ 6,936 $ 112,450 Special mention — — — 1,001 — 437 — — 1,438 Substandard - Non-IEL — — — — — — — — — Substandard - IEL — — — — — 1,361 — — 1,361 Total commercial and land development loans $ 28,829 $ 48,453 $ 9,847 $ 10,928 $ 110 $ 3,572 $ 6,574 $ 6,936 $ 115,249 Current period gross charge offs - commercial and land development $ — $ — $ — $ — $ — $ — $ — $ — $ — continued Term Loans Amortized Cost Basis by Origination Year As of December 31, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Basis Revolving Loans Converted to Term Total Commercial and Industrial: Risk rating Pass $ 67,735 $ 69,670 $ 67,117 $ 24,580 $ 10,753 $ 20,775 $ 86,475 $ 1,522 $ 348,627 Special mention — 4,251 4,364 11 552 356 2,258 — 11,792 Substandard - Non-IEL — — 4,682 — 5 225 1,082 — 5,994 Substandard - IEL — 69 — 7 — 455 141 — 672 Total commercial and industrial loans $ 67,735 $ 73,990 $ 76,163 $ 24,598 $ 11,310 $ 21,811 $ 89,956 $ 1,522 $ 367,085 Current period gross charge offs - commercial and industrial $ — $ 161 $ 106 $ — $ — $ 8 $ 473 $ — $ 748 Municipal: Risk rating Pass $ — $ — $ 3,403 $ — $ — $ 6,409 $ — $ — $ 9,812 Total municipal loans $ — $ — $ 3,403 $ — $ — $ 6,409 $ — $ — $ 9,812 Current period gross charge offs - municipal $ — $ — $ — $ — $ — $ — $ — $ — $ — Residential mortgage: First lien: Payment performance Performing $ 43,641 $ 71,311 $ 34,704 $ 8,056 $ 7,465 $ 97,943 $ — $ 638 $ 263,758 Nonperforming — — — — 120 2,361 — — 2,481 Total first lien loans $ 43,641 $ 71,311 $ 34,704 $ 8,056 $ 7,585 $ 100,304 $ — $ 638 $ 266,239 Current period gross charge offs - first lien $ — $ — $ — $ — $ — $ 58 $ — $ — $ 58 Home equity - term: Payment performance Performing $ 607 $ 732 $ 90 $ 426 $ 115 $ 3,105 $ — $ — $ 5,075 Nonperforming — — — — — 3 — — 3 Total home equity - term loans $ 607 $ 732 $ 90 $ 426 $ 115 $ 3,108 $ — $ — $ 5,078 Current period gross charge offs - home equity - term $ — $ — $ — $ — $ — $ — $ — $ — $ — Home equity - lines of credit: Payment performance Performing $ — $ — $ — $ — $ — $ — $ 107,967 $ 77,171 $ 185,138 Nonperforming — — — — — — 1,296 16 1,312 Total residential real estate - home equity - lines of credit loans $ — $ — $ — $ — $ — $ — $ 109,263 $ 77,187 $ 186,450 Current period gross charge offs - home equity - lines of credit $ — $ — $ — $ — $ — $ — $ 40 $ — $ 40 Installment and other loans: Payment performance Performing $ 758 $ 413 $ 332 $ 106 $ 670 $ 947 $ 6,500 $ — $ 9,726 Nonperforming 3 — — — 33 12 — — 48 Total Installment and other loans $ 761 $ 413 $ 332 $ 106 $ 703 $ 959 $ 6,500 $ — $ 9,774 Current period gross charge offs - installment and other $ 181 $ 24 $ — $ — $ 4 $ 10 $ 28 $ — $ 247 For commercial real estate, acquisition and development, commercial and industrial and municipal segments, a loan is evaluated individually 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 expected credit losses, and whether the loan will be individually evaluated, 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 individually evaluated. Generally, loans that are more than 90 days past due will be individually evaluated for a specific reserve. 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 are, by definition, deemed to be individually evaluated under CECL. A specific reserve allocation for individually evaluated loans is measured on a loan-by-loan basis for commercial and construction 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 experiencing financial difficulty for extended periods of time, periodic updates on fair values are obtained, which may include updated appraisals. Updated fair values are incorporated into the analysis in the next reporting period. Loan charge-offs, which may include partial charge-offs, are taken on an individually evaluated loan that is collateral dependent if the carrying balance of the loan exceeds the appraised value of the collateral, the loan has been placed on nonaccrual status or identified as uncollectible, and it is deemed to be a confirmed loss. Typically, loans with a charge-off or partial charge-off will continue to be individually evaluated. Generally, an individually evaluated loan with a partial charge-off may continue to have a specific reserve on it after the partial charge-off, if factors warrant. At June 30, 2024 and December 31, 2023, the Company’s individually evaluated loans were measured based on the estimated fair value of the collateral securing the loan, except for purchased auto loans on nonaccrual status and accruing loans accounted for as TDRs prior to the adoption of ASU 2022-02. For real estate loans, collateral generally consists of commercial or residential 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, secured by commercial real estate, 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, commercial loans secured by real estate that are evaluated individually 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 credit expected losses, fair values are based on either an existing appraisal or a DCF 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, DCF 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 loans evaluated individually 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 for both loans individually and collectively evaluated, 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 an individually evaluated loan. 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, commercial and industrial and municipal loans rated substandard to be collectively evaluated for credit expected losses. 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. The following table presents the amortized cost basis of nonaccrual loans, according to loan class, with and without reserves on individually evaluated loans as of June 30, 2024 and December 31, 2023. The Company did not recognize interest income on nonaccrual loans during the three and six months ended June 30, 2024 and 2023. During the six months ended June 30, 2024, the Company recorded interest income previously applied to principal of $1.6 million from the payoff of a commercial real estate loan, which totaled $13.4 million at December 31, 2023. June 30, 2024 December 31, 2023 Nonaccrual loans with a related ACL Nonaccrual loans with no related ACL Total nonaccrual loans Loans Past Due 90+ Accruing Nonaccrual loans with a related ACL Nonaccrual loans with no related ACL Total nonaccrual loans Loans Past Due 90+ Accruing Commercial real estate: Owner-occupied $ — $ 3,450 $ 3,450 $ — $ — $ 15,786 $ 15,786 $ — Non-owner occupied — — — — — 240 240 — Multi-family — 312 312 — — 1,233 1,233 — Non-owner occupied residential — 266 266 — — 2,572 2,572 — Acquisition and development: Commercial and land development — — — — — 1,361 1,361 — Commercial and industrial — 29 29 — 68 604 672 — Residential mortgage: First lien — 2,871 2,871 187 — 2,309 2,309 66 Home equity – term — 2 2 — — 3 3 — Home equity – lines of credit — 1,415 1,415 — — 1,312 1,312 — Installment and other loans 3 15 18 — 3 36 39 — Total $ 3 $ 8,360 $ 8,363 $ 187 $ 71 $ 25,456 $ 25,527 $ 66 A loan is considered to be collateral-dependent when the borrower is experiencing financial difficulty and the repayment is expected to be provided substantially through the operation or sale of collateral. At June 30, 2024 and December 31, 2023, substantially all individually evaluated loans were collateral-dependent and consisted primarily of commercial real estate, acquisition and development and residential mortgage loans, which were primarily secured by commercial or residential real estate. All of the Company’s collateral-dependent loans had appraised collateral values which exceeded the amortized cost basis of the related loan except for one consumer installment loan as of June 30, 2024 and one commercial and industrial loan and one consumer installment loan as of December 31, 2023. The following table presents the amortized cost basis of collateral-dependent loans by class as of June 30, 2024 and December 31, 2023: Type of Collateral June 30, 2024 Business Assets Commercial Real Estate Equipment Land Residential Real Estate Other Total Commercial real estate: Owner occupied $ — $ 3,449 $ — $ — $ — $ — $ 3,449 Non-owner occupied — — — — — — — Multi-family — 312 — — — — 312 Non-owner occupied residential — 266 — — — — 266 Acquisition and development: Commercial and land development — — — — — — — Commercial and industrial 15 — 17 — — — 32 Residential mortgage: First lien — — — — 2,797 — 2,797 Home equity - term — — — — 2 — 2 Home equity - lines of credit — — — — 1,415 — 1,415 Installment and other loans — — 3 — — — 3 Total $ 15 $ 4,027 $ 20 $ — $ 4,214 $ — $ 8,276 December 31, 2023 Commercial real estate: Owner occupied $ — $ 15,786 $ — $ — $ — $ — $ 15,786 Non-owner occupied — 240 — — — — 240 Multi-family — 1,233 — — — — 1,233 Non-owner occupied residential — 2,572 — — — — 2,572 Acquisition and development: Commercial and land development — — — 1,361 — — 1,361 Commercial and industrial 2 76 594 — — — 672 Residential mortgage: First lien — — — — 2,231 — 2,231 Home equity - term — — — — 3 — 3 Home equity - lines of credit — — — — 1,312 — 1,312 Installment and other loans — — 18 — — — 18 Total $ 2 $ 19,907 $ 612 $ 1,361 $ 3,546 $ — $ 25,428 ASU 2022-02 requires that the Company evaluate, based on the accounting for loan modifications, whether the borrower is experiencing financial difficulty and the modification results in a more-than-insignificant direct change in the contractual cash flows and represents a new loan or a continuation of an existing loan. This change requires all loan modifications to be accounted for under the general loan modification guidance in ASC 310-20, Receivables – Nonrefundable Fees and Other Costs, and subjects entities to new disclosure requirements on loan modifications to borrowers experiencing financial difficulty. The Company may modify loans to borrowers experiencing financial difficulty by providing principal forgiveness, term extension, interest rate reduction or an other-than-insignificant payment delay. When principal forgiveness is provided, the amount of forgiveness is charged off against the ACL. The C |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
LEASES | LEASES A 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 4 to 29 years. Operating lease right-of-use assets and lease liabilities are included in other assets and accrued interest and other liabilities on the Company's unaudited condensed consolidated balance sheets. 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 June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 Operating lease ROU assets $ 10,360 $ 10,824 Operating lease ROU liabilities 11,189 11,614 Weighted-average remaining lease term (in years) 14.9 15.1 Weighted-average discount rate 4.4 % 4.4 % The following table presents information related to the Company's operating leases for the three and six months ended June 30, 2024 and 2023: Three Months Ended Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Cash paid for operating lease liabilities $ 336 $ 287 $ 671 $ 571 Operating lease expense 355 302 711 611 The following table presents expected future maturities of the Company's lease liabilities as of June 30, 2024: 2024 $ 678 2025 1,371 2026 1,403 2027 1,437 2028 1,194 Thereafter 10,187 16,270 Less: imputed interest 5,081 Total lease liabilities $ 11,189 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS At June 30, 2024 and December 31, 2023, goodwill was $18.7 million. No impairment charges were recorded in the three and six months ended June 30, 2024 and 2023. 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 conducted its last annual goodwill impairment test as of November 30, 2023 using generally accepted valuation methods. As a result of that impairment test, no goodwill impairment was identified. No changes occurred that would impact the results of that analysis through June 30, 2024. The following table presents changes in and components of other intangible assets for the three and six months ended June 30, 2024 and 2023. No impairment charges were recorded on other intangible assets during the three and six months ended June 30, 2024 and June 30, 2023. Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Beginning of period $ 2,189 $ 2,828 $ 2,414 $ 3,078 Amortization expense (215) (239) (440) (489) Balance, end of period $ 1,974 $ 2,589 $ 1,974 $ 2,589 The following table presents the components of other identifiable intangible assets at June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 Gross Amount Accumulated Gross Amount Accumulated Amortized intangible assets: Core deposit intangibles $ 8,390 $ 6,651 $ 8,390 $ 6,247 Other customer relationship intangibles 289 54 289 18 Total $ 8,679 $ 6,705 $ 8,679 $ 6,265 The following table presents future estimated aggregate amortization expense for other identifiable intangible assets at June 30, 2024: 2024 $ 396 2025 656 2026 476 2027 297 2028 120 Thereafter 29 $ 1,974 |
SHARE-BASED COMPENSATION PLANS
SHARE-BASED COMPENSATION PLANS | 6 Months Ended |
Jun. 30, 2024 | |
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, and 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 and its subsidiaries 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. At June 30, 2024, 1,281,920 shares of the common stock of the Company were reserved, of which 267,885 shares are available to be issued. The following table presents a summary of nonvested restricted shares activity for the six months ended June 30, 2024: Shares Weighted Average Grant Date Fair Value Nonvested shares, beginning of year 291,231 $ 22.85 Granted 158,684 27.48 Forfeited (3,330) 23.62 Vested (128,574) 21.02 Nonvested shares, at period end 318,011 $ 25.89 The following table presents restricted share compensation expense, with tax benefit information, and fair value of shares vested, for the three and six months ended June 30, 2024 and 2023: Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Restricted share award expense $ 864 $ 534 $ 1,809 $ 1,150 Restricted share award tax benefit 181 112 380 242 Fair value of shares vested 578 423 3,466 2,460 The unrecognized compensation expense related to the share awards totaled $5.9 million at June 30, 2024 and $3.4 million at December 31, 2023. The unrecognized compensation expense at June 30, 2024 is expected to be recognized over a weighted-average period of 0.7 years, which reflects the accelerated vesting of time-based restricted stock awards totaling 198,462 shares with compensation expense of $4.0 million recognized on July 1, 2024 pursuant to the Merger closing. The Company maintains an employee stock purchase plan to provide employees of the Company with an opportunity to purchase Company common stock. Eligible employees may purchase shares in an amount that does not exceed the lesser of the IRS limit of $25,000 or 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 June 30, 2024, 135,296 shares were available to be issued. The following table presents information for the employee stock purchase plan for the three and six months ended June 30, 2024 and 2023: Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Shares purchased — — 3,850 3,003 Weighted average price of shares purchased $ — $ — $ 20.67 $ 21.85 Compensation expense recognized — — $ 22 $ 3 The Company issues new shares or treasury shares, depending on market conditions, in its share-based compensation plans. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS The Company is exposed to certain risks 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 may enter 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 investment securities and 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 uses interest rate swaps and interest rate caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve limiting the Company's exposure to fluctuations in future cash flows through the receipt of fixed or variable amounts from a counterparty in exchange for the Company making variable-rate or fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. 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. Upon discontinuance, the associated gains and losses deferred in AOCI are reclassified immediately into earnings and subsequent changes in the fair value of the cash flow hedge are recognized in earnings. At June 30, 2024 and December 31, 2023, the Company had two interest rate swaps designated as cash flow hedges with a total notional value of $125.0 million, which included a pay-fixed hedge with a notional value of $75.0 million for the purpose of hedging variable cash flows associated with the Company's borrowings and a pay-float hedge of $50.0 million for the purpose of hedging the variable cash flows of selected AFS securities or loans. During the three and six months ended June 30, 2024, the Company did not enter into new interest rate swaps designated as cash flow hedges. 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. The gain or loss on the fair value hedge, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in current earnings as the fair value changes. When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability. At June 30, 2024 and December 31, 2023, the Company had three pay-fixed interest rate swaps on certain closed portfolio loans with our commercial clients with a total notional value of $100.0 million. The commercial loans are scheduled to mature at various dates ranging from December 2026 to October 2054. The interest rate swaps are designated as fair value hedges and allow the Company to offer long-term fixed rate loans to commercial clients while mitigating the interest rate risk of a long-term asset by converting fixed rate interest payments to floating rate interest payments indexed to a synthetic U.S. SOFR rate. During the three and six months ended June 30, 2024, the Company did not enter into new interest rate swaps designated as fair value hedges. The Company enters into interest rate swap agreements 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. In addition, the Company may enter into interest rate caps that allow its commercial loan customers to gain protection against significant interest rate increases and provide an upper limit, or cap, on the variable interest rate. The Company then enters into a corresponding swap or cap agreement with a third party in order to economically hedge its exposure through the customer agreement. The interest rate swaps and interest rate caps with both the customers and third parties are not designated as hedges and are marked through earnings. At June 30, 2024, the Company had 39 customer and 39 corresponding third-party broker interest rate derivatives not designated as a hedging instrument with an aggregate notional amount of $593.4 million compared to $444.8 million in notional amount of such derivative instruments at December 31, 2023. During the three and six months ended June 30, 2024, the Company entered into four and five, respectively, new interest rate swaps with a commercial loan customer and recorded swap fee income of $375 thousand and $574 thousand, respectively. The Company entered into two new interest rate swaps and recorded $196 thousand in swap fee income during the three and six months ended June 30, 2023. Swap fee income is included in noninterest income in the unaudited condensed consolidated statements of income. At June 30, 2024 and December 31, 2023, the Company had cash collateral of $6.8 million and $6.6 million with third parties for certain of these derivatives, respectively. At June 30, 2024 and December 31, 2023, the Company held cash collateral of $9.8 million and $4.4 million from a counterparty for these derivatives, respectively. The Company also may enter into risk participation agreements with a financial institution counterparty for an interest rate derivative contract related to a loan in which the Company may be a participant or the agent bank. 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 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 borrower. 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. At June 30, 2024 and December 31, 2023, the Company had four risk participation agreements with sold protection with a notional value of $33.0 million and $32.7 million, respectively. In addition, the Company had five risk participations with purchased protection with a notional value of $23.8 million at June 30, 2024 compared to three risk participations with purchased protection with a notional value of $11.0 million at December 31, 2023. The Company did not enter into any risk participation agreements during the three months ended June 30, 2024. For the six months ended June 30, 2024, the Company entered into two risk participation agreements with purchased protection. The Company entered into one new risk participation with sold protection during the three and six months ended June 30, 2023. 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 may 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 for the held for sale loan pipeline. The fair value of held for sale loans can vary based on the interest rate locked with the customer and the current market interest rate at the balance sheet date. The following table summarizes the fair value of the Company's derivative instruments at June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 Notional Amount Balance Sheet Location Fair Value Notional Amount Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Cash flow hedge designation: Interest rate swaps -FHLB advances $ 75,000 Other assets $ 1,746 $ 75,000 Other assets $ 135 Interest rate swaps - AFS securities 50,000 Other liabilities (175) 50,000 Other liabilities (426) Fair value hedge designation: Interest rate swaps - commercial loans 100,000 Other assets 414 — Other assets — Interest rate swaps - commercial loans — Other liabilities — 100,000 Other liabilities (1,718) Total derivatives designated as hedging instruments $ 1,985 $ (2,009) Derivatives not designated as hedging instruments: Interest rate swaps $ 262,458 Other assets $ 11,803 $ 216,485 Other assets $ 11,157 Interest rate swaps 262,458 Other liabilities (11,828) 216,485 Other liabilities (11,253) Purchased options – rate cap 5,861 Other assets 7 5,909 Other assets 8 Written options – rate cap 5,861 Other liabilities (7) 5,909 Other liabilities (8) Risk participations - sold credit protection 32,952 Other liabilities (30) 32,722 Other liabilities (59) Risk participations - purchased credit protection 23,832 Other assets 72 11,035 Other assets 28 Interest rate lock commitments with customers 3,133 Other assets 71 2,181 Other assets 55 Forward sale commitments 1,538 Other assets 4 688 Other assets (4) Total derivatives not designated as hedging instruments $ 92 $ (76) The following table presents the carrying amount and associated cumulative basis adjustment related to the application of fair value hedge accounting that is included in the carrying amount of hedged assets as of June 30, 2024 and 2023 . Carrying Amounts of Hedged Assets Cumulative Amounts of Fair Value Hedging Adjustments Included in the Carrying Amounts of the Hedged Assets Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Commercial loans $ 100,000 $ — $ (415) $ — The following tables summarize the effect of the Company's derivative financial instruments on OCI and net income for the three and six months ended June 30, 2024 and 2023: Amount of Gain Recognized in OCI on Derivative Amount of Gain Recognized in OCI on Derivative Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Derivatives in cash flow hedging relationships: Interest rate products $ 434 $ 1,073 $ 1,862 $ 1,392 Total $ 434 $ 1,073 $ 1,862 $ 1,392 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 June 30, Six Months Ended June 30, 2024 2023 2024 2023 Derivatives in cash flow hedging relationships: Interest rate products $ — $ — $ — $ — Interest income Total $ — $ — $ — $ — Amount of Gain Recognized in Income Amount of Gain Recognized in Income Location of Gain Recognized in Income Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Derivatives designated as hedging instruments Fair value hedge designation: Interest rate swaps - commercial loans (1) $ 5 n/a $ 8 n/a Interest income on loans Derivatives not designated as hedging instruments: Interest rate products $ 27 $ 40 $ 71 $ (119) Other operating expenses Risk participation agreements (8) 37 73 27 Other operating expenses Interest rate lock commitments with customers 15 10 17 32 Mortgage banking activities Forward sale commitments 5 (7) 7 (139) Mortgage banking activities Total derivatives not designated as hedging instruments $ 39 $ 80 $ 168 $ (199) (1) Amount includes the net of the change in the fair value of the interest rate swaps hedging commercial loans and the change in the carrying value included in the hedged commercial loans. The following table is a summary of components for interest rate swaps designated as hedging instruments at June 30, 2024 and December 31, 2023: Weighted Average Pay Rate Weighted Average Receive Rate Weighted Average Maturity in Years June 30, 2024 Cash flow hedge designation: Interest rate swaps - FHLB advances 3.49 % 5.34 % 3.8 Interest rate swaps - AFS securities 5.33 % 3.73 % 0.2 Fair value hedge designation: Interest rate swaps - commercial loans 4.12 % 5.34 % 3.2 December 31, 2023 Cash flow hedge designation: Interest rate swaps - FHLB advances 3.49 % 5.34 % 4.3 Interest rate swaps - AFS securities 5.34 % 3.73 % 0.7 Fair value hedge designation: Interest rate swaps - commercial loans 4.12 % 5.34 % 3.7 |
SHORT-TERM BORROWINGS
SHORT-TERM BORROWINGS | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BORROWINGS | SHORT-TERM BORROWINGS The Company has short-term borrowing capability from the FHLB and the FRB discount window. The following table summarizes these short-term borrowings at June 30, 2024 and December 31, 2023, and for the six and twelve months then ended: June 30, 2024 December 31, 2023 Balance at period-end $ 75,000 $ 97,500 Weighted average interest rate during the period 5.67 % 5.68 % Average balance during the period $ 75,000 $ 87,370 Average interest rate during the period 5.77 % 5.46 % Maximum month-end balance during the period $ 105,000 $ 120,984 At June 30, 2024 and December 31, 2023, the Company had availability under FHLB lines for its short-term borrowings totaling $75.0 million and $52.5 million, respectively. |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT The following table presents components of the Company’s long-term debt at June 30, 2024 and December 31, 2023: Amount Weighted Average Rate June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023 FHLB fixed rate advances maturing: 2025 $ 15,000 $ 15,000 4.57 % 4.57 % 2028 25,000 25,000 3.98 % 3.98 % Total FHLB Advances $ 40,000 $ 40,000 4.20 % 4.20 % The Bank is a member of the FHLB of Pittsburgh and has access to the FHLB program of overnight and term advances. Under terms of a blanket collateral agreement for advances, lines and letters of credit from the FHLB, collateral for all outstanding advances, lines and letters of credit consisted of 1-4 family mortgage loans and other real estate secured loans totaling $1.1 billion at both June 30, 2024 and December 31, 2023. The Bank had additional availability of $1.0 billion at the FHLB on June 30, 2024, based on its qualifying collateral, net of short-term borrowings and long-term debt detailed above, deposit letters of credit of $1.0 million and non-deposit letters of credit of $609 thousand at June 30, 2024. At December 31, 2023, the Bank had additional availability of $973.3 million at the FHLB and $609 thousand of non-deposit letters of credit. There were zero deposit letters of credit at December 31, 2023. |
SHAREHOLDERS' EQUITY AND REGULA
SHAREHOLDERS' EQUITY AND REGULATORY CAPITAL | 6 Months Ended |
Jun. 30, 2024 | |
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, 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 gains or losses included in AOCI in computing regulatory capital. On January 1, 2023, the Company adopted ASU No. 2016-13, which replaced the existing incurred loss model for recognizing credit losses with an expected loss model referred to as the CECL model, and resulted in a reduction to opening retained earnings, net of income tax, and an increase to the allowance for credit losses for loans of approximately $2.4 million and allowance for credit losses for off-balance sheet exposures of $100 thousand, which combined totals $2.5 million. The federal bank regulatory agencies issued a rule, which provided for the option to elect a three-year transition provision of the day-one impact of the CECL model beginning with regulatory capital at March 31, 2023. The Company elected the three-year phase in option. The Company and the Bank met all capital adequacy requirements to which they are subject at June 30, 2024 and December 31, 2023. 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 June 30, 2024, 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 June 30, 2024 and December 31, 2023: Actual For Capital Adequacy Purposes To Be Well Amount Ratio Amount Ratio Amount Ratio June 30, 2024 Total risk-based capital: Orrstown Financial Services, Inc. $ 341,909 13.3 % $ 269,335 10.5 % n/a n/a Orrstown Bank 337,000 13.1 % 269,264 10.5 % $ 256,442 10.0 % Tier 1 risk-based capital: Orrstown Financial Services, Inc. 286,005 11.1 % 218,033 8.5 % n/a n/a Orrstown Bank 306,798 12.0 % 217,976 8.5 % 205,154 8.0 % Tier 1 common equity risk-based capital: Orrstown Financial Services, Inc. 286,005 11.1 % 179,557 7.0 % n/a n/a Orrstown Bank 306,798 12.0 % 179,509 7.0 % 166,687 6.5 % Tier 1 leverage capital: Orrstown Financial Services, Inc. 286,005 8.9 % 129,255 4.0 % n/a n/a Orrstown Bank 306,798 9.5 % 129,231 4.0 % 161,539 5.0 % December 31, 2023 Total risk-based capital: Orrstown Financial Services, Inc. $ 326,878 13.0 % $ 264,019 10.5 % n/a n/a Orrstown Bank 320,687 12.8 % 263,942 10.5 % $ 251,373 10.0 % Tier 1 risk-based capital: Orrstown Financial Services, Inc. 272,677 10.8 % 213,730 8.5 % n/a n/a Orrstown Bank 292,160 11.6 % 213,667 8.5 % 201,099 8.0 % Tier 1 common equity risk-based capital: Orrstown Financial Services, Inc. 272,677 10.8 % 176,013 7.0 % n/a n/a Orrstown Bank 292,160 11.6 % 175,961 7.0 % 163,393 6.5 % Tier 1 leverage capital: Orrstown Financial Services, Inc. 272,677 8.9 % 122,907 4.0 % n/a n/a Orrstown Bank 292,160 9.5 % 122,907 4.0 % 153,634 5.0 % The Company maintains a stockholder dividend reinvestment and stock purchase plan. Under the plan, shareholders may purchase additional shares of the Company’s common stock at the prevailing market prices with reinvested dividends and voluntary cash payments. The Company reserved 1,045,000 shares of its common stock to be issued under the dividend reinvestment and stock purchase plan. At June 30, 2024, approximately 665,000 shares were available to be issued under the plan. In September 2015, the Board of Directors of the Company authorized a share repurchase program pursuant to which the Company could repurchase up to 416,000 shares of the Company's outstanding shares of common stock, in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Exchange Act, as amended. On April 19, 2021, the Board of Directors authorized the additional repurchase of up to 562,000 shares of its outstanding common stock for a total of 978,000 shares. 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. For the three and six months ended June 30, 2024, the Company repurchased zero shares of its common stock. At June 30, 2024, 949,533 shares had been repurchased at a total cost of $21.2 million, or $22.36 per share. Common stock available for future repurchase totals 28,467 shares, or 0.3% of the Company's outstanding common stock at June 30, 2024. On July 17, 2024, the Board of Directors declared a cash dividend of $0.23 per common share, which will be paid on August 15, 2024 to shareholders of record at August 8, 2024. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table presents earnings per share for the three and six months ended June 30, 2024 and 2023: Three Months Ended June 30, Six Months Ended June 30, (shares presented in the table are in thousands) 2024 2023 2024 2023 Net income $ 7,738 $ 9,838 $ 16,269 $ 18,994 Weighted average shares outstanding - basic 10,393 10,336 10,371 10,360 Dilutive effect of share-based compensation 160 85 146 98 Weighted average shares outstanding - diluted 10,553 10,421 10,517 10,458 Per share information: Basic earnings per share $ 0.74 $ 0.95 $ 1.57 $ 1.83 Diluted earnings per share 0.73 0.94 1.55 1.82 For the three and six months ended June 30, 2024, there were average outstanding restricted award shares totaling 2 and 775, respectively, compared to 14,268 and 9,891 shares for the three and six months ended June 30, 2023, respectively, excluded from the computation of earnings per share because the effect was antidilutive, as the grant price exceeded the average market price. The dilutive effect of share-based compensation in each period above relates principally to restricted stock awards. |
FINANCIAL INSTRUMENTS WITH OFF-
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK | 6 Months Ended |
Jun. 30, 2024 | |
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 clients. 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 at June 30, 2024 and December 31, 2023. Contractual or Notional Amount June 30, 2024 December 31, 2023 Commitments to fund: Home equity lines of credit $ 343,976 $ 337,460 1-4 family residential construction loans 49,901 40,330 Commercial real estate, construction and land development loans 150,073 132,607 Commercial, industrial and other loans 357,150 357,099 Standby letters of credit 30,653 24,529 Commitments to extend credit are agreements to lend to a client 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 the 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 client’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 client. 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 client 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 clients. The Company holds collateral supporting those commitments when deemed necessary by management. The liability at June 30, 2024 and December 31, 2023 for guarantees under standby letters of credit issued was not considered to be material. The Company maintains a reserve on its off-balance sheet credit exposures, which totaled approximately $1.6 million and $1.7 million at June 30, 2024 and December 31, 2023, respectively, and is recorded in other liabilities on the unaudited condensed consolidated balance sheets. On January 1, 2023, the Company adopted CECL and recorded a day-one adjustment, which increased the allowance for credit losses for off-balance sheet credit exposures by $100 thousand. The reserve is based on management's estimate of expected losses in its off-balance sheet credit exposures. The reserve specific to unfunded loan commitments is determined by applying utilization assumptions based on historical experience and applying the expected loss rates by loan class. Following adoption of CECL, the change in the reserve for off-balance sheet credit exposures is recorded as a provision or reduction to expense through the provision for credit losses in the unaudited condensed consolidated statements of income. The Company recorded no provision for credit losses and a reversal of $123 thousand for off-balance sheet credit exposures for the three and six months ended June 30, 2024. For the three and six months ended June 30, 2023, the Company recorded expense of zero to other operating expenses in the unaudited condensed consolidated statements of income associated with its reserve for off-balance sheet credit exposures. |
FAIR VALUE
FAIR VALUE | 6 Months Ended |
Jun. 30, 2024 | |
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, investment securities are classified within Level 1 of the valuation hierarchy. Level 1 investment securities include highly liquid government bonds, mortgage products and exchange traded equities. If quoted market prices are not available, investment securities are classified within Level 2 and fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or DCF. Level 2 investment securities include U.S. agency securities, MBS, 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, investment securities are classified within Level 3 of the valuation hierarchy. The Company’s investment securities are classified as AFS. The fair values of interest rate swaps, interest rate caps 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 and liabilities measured at fair value on a recurring basis at June 30, 2024 and December 31, 2023: Level 1 Level 2 Level 3 Total Fair June 30, 2024 Financial Assets Investment securities: U.S. Treasury securities $ 17,713 $ — $ — $ 17,713 U.S. Government Agencies — 3,573 — 3,573 States and political subdivisions — 194,114 6,332 200,446 GSE residential MBSs — 56,843 — 56,843 GSE commercial MBSs — 4,089 — 4,089 GSE residential CMOs — 116,243 — 116,243 Non-agency CMOs — 20,173 11,235 31,408 Asset-backed — 98,658 — 98,658 Other 109 — — 109 Loans held for sale — 1,562 — 1,562 Derivatives — 14,042 71 14,113 Totals $ 17,822 $ 509,297 $ 17,638 $ 544,757 Financial Liabilities Derivatives $ — $ 12,040 $ — $ 12,040 December 31, 2023 Financial Assets Investment securities: U.S. Treasury securities $ 17,840 $ — $ — $ 17,840 U.S. Government Agencies — 4,151 — 4,151 States and political subdivisions — 197,060 6,062 203,122 GSE residential MBSs — 57,632 — 57,632 GSE commercial MBSs — 4,743 — 4,743 GSE residential CMOs — 73,102 — 73,102 Non-agency CMOs — 22,878 21,791 44,669 Asset-backed — 108,134 — 108,134 Other 126 — — 126 Loans held for sale — 5,816 — 5,816 Derivatives — 11,328 55 11,383 Totals $ 17,966 $ 484,844 $ 27,908 $ 530,718 Financial Liabilities Derivatives $ — $ 13,464 $ — $ 13,464 The Company had one municipal bond and two CMOs measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at June 30, 2024 and December 31, 2023. During the six months ended June 30, 2024, the Company had one non-agency CMO security totaling $2.9 million called by the issuer. 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 LHFS 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 was greater than the aggregate principal balance by $31 thousand as of June 30, 2024 and below the aggregate principal balance by $1.5 million as of December 31, 2023. 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 92% as of June 30, 2024. An increase or decrease of 5% in the pull through assumption would result in a positive or negative change of $4 thousand in the fair value of interest rate lock commitments at June 30, 2024. The following provides details of the Level 3 fair value measurement activity for the periods ended June 30, 2024 and 2023: Investment securities: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Balance, beginning of period $ 17,734 $ 28,190 $ 27,853 $ 27,193 Unrealized (losses) gains included in OCI (14) (84) 82 136 Purchases — — — 871 Net discount accretion 16 10 33 23 Principal payments and other (169) (122) (294) (229) Calls — — (10,107) — Balance, end of period $ 17,567 $ 27,994 $ 17,567 $ 27,994 Interest rate lock commitments on residential mortgages: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Balance, beginning of period $ 56 $ 57 $ 55 $ 35 Total gains included in earnings 15 10 16 32 Balance, end of period $ 71 $ 67 $ 71 $ 67 Certain financial assets are measured at fair value on a nonrecurring basis. Adjustments to the fair value of these assets usually result 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. There were no transfers into or out of Level 3 at June 30, 2024 and 2023. Individually Evaluated Loans Loans individually evaluated for credit expected losses include nonaccrual loans and other loans that do not share similar risk characteristics to loans in the CECL loan pools, which have been classified as Level 3. Individually evaluated loans with an allocation to the ACL are measured at fair value on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as provision for credit losses on the unaudited condensed consolidated statements of income. The measurement of loss associated with loans evaluated individually for all loan classes was based on either the observable market price of the loan, the fair value of the collateral or DCF. For collateral-dependent loans, fair value was 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). Changes in the fair value of individually evaluated loans still held and considered in the determination of the provision for credit losses were declines of $136 thousand and $431 thousand for the three and six months ended June 30, 2024, respectively, compared to increases of $285 thousand and $510 thousand for the three and six months ended June 30, 2023. Mortgage Servicing Rights MSRs are evaluated for impairment by comparing the carrying value to the fair value, which is determined through a DCF valuation. To the extent the amortized cost of the MSRs exceeds their estimated fair values, a valuation allowance is established for such impairment. Fair value adjustments on the MSRs only occurs if there is an impairment charge. At both June 30, 2024 and December 31, 2023, the MSR impairment reserve was zero. For both the three and six months ended June 30, 2024 and 2023, there were no impairment valuation allowance adjustments in mortgage banking activities on the unaudited consolidated statements of income. The following table summarizes assets measured at fair value on a nonrecurring basis at June 30, 2024 and December 31, 2023: Level 1 Level 2 Level 3 Total June 30, 2024 Individually Evaluated Loans Commercial real estate: Owner occupied $ — $ — $ 46 $ 46 Residential mortgage: First lien — — 206 206 Home equity - lines of credit — — 45 45 Total individually evaluated loans $ — $ — $ 297 $ 297 December 31, 2023 Individually Evaluated Loans Commercial real estate: Owner occupied $ — $ — $ 75 $ 75 Commercial and industrial — — 164 164 Residential mortgage: First lien — — 219 219 Home equity - lines of credit — — 56 56 Total individually evaluated loans $ — $ — $ 514 $ 514 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 June 30, 2024 Individually evaluated loans $ 297 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 10% - 25% discount - Management adjustments for liquidation expenses 6.78% - 12.30% discount December 31, 2023 Individually evaluated loans $ 514 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 10% - 70% discount - Management adjustments for liquidation expenses 3.30% - 12.30% discount Fair values of financial instruments GAAP requires disclosure of the fair value of financial assets and liabilities, including those that are not measured and reported at fair value on a recurring or nonrecurring basis. The following table presents carrying amounts and estimated fair values of the financial assets and liabilities at June 30, 2024 and December 31, 2023: Carrying Fair Value Level 1 Level 2 Level 3 June 30, 2024 Financial Assets Cash and due from banks $ 35,951 $ 35,951 $ 35,951 $ — $ — Interest-bearing deposits with banks 96,558 96,558 96,558 — — Restricted investments in bank stock 11,147 n/a n/a n/a n/a Investment securities 529,082 529,082 17,822 493,693 17,567 Loans held for sale 1,562 1,562 — 1,562 — Loans, net of allowance for credit losses 2,317,739 2,215,206 — — 2,215,206 Derivatives 14,113 14,113 — 14,042 71 Accrued interest receivable 14,120 14,120 — 4,891 9,229 Financial Liabilities Deposits 2,702,884 2,700,274 — 2,700,274 — Securities sold under agreements to repurchase and federal funds purchased 14,625 14,625 — 14,625 — FHLB advances and other borrowings 115,000 114,541 — 114,541 — Subordinated notes 32,128 30,631 — 30,631 — Derivatives 12,040 12,040 — 12,040 — Accrued interest payable 2,463 2,463 — 2,463 — Off-balance sheet instruments — — — — — December 31, 2023 Financial Assets Cash and due from banks $ 32,586 $ 32,586 $ 32,586 $ — $ — Interest-bearing deposits with banks 32,575 32,575 32,575 — — Restricted investments in bank stock 11,992 n/a n/a n/a n/a Investment securities 513,519 513,519 17,966 467,700 27,853 Loans held for sale 5,816 5,816 — 5,816 — Loans, net of allowance for loan losses 2,269,611 2,159,745 — — 2,159,745 Derivatives 11,383 11,383 — 11,328 55 Accrued interest receivable 13,630 13,630 — 4,987 8,643 Financial Liabilities Deposits 2,558,814 2,555,904 — 2,555,904 — Securities sold under agreements to repurchase 9,785 9,785 — 9,785 — FHLB advances and other borrowings 137,500 137,500 — 137,500 — Subordinated notes 32,093 29,887 — 29,887 — Derivatives 13,464 13,464 — 13,464 — Accrued interest payable 2,560 2,560 — 2,560 — Off-balance sheet instruments — — — — — 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 June 30, 2024 and December 31, 2023 represent an approximation of exit price; however, an actual exit price may differ. |
CONTINGENCIES
CONTINGENCIES | 6 Months Ended |
Jun. 30, 2024 | |
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 25, 2022, a customer of the Bank filed a putative class action complaint against the Bank in the Court of Common Pleas of Cumberland County, Pennsylvania, in a case captioned Alleman, on behalf of himself and all others similarly situated, v. Orrstown Bank . The complaint alleges, among other things, that the Bank breached its account agreements by charging certain overdraft fees. The complaint seeks a refund of all allegedly improper fees, damages in an amount to be proven at trial, attorneys’ fees and costs, and an injunction against the Bank’s allegedly improper overdraft practices. This lawsuit is similar to lawsuits filed against other financial institutions pertaining to overdraft fee disclosures. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||
Net income | $ 7,738 | $ 9,838 | $ 16,269 | $ 18,994 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
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. 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’s lending area also includes adjacent counties in Pennsylvania and Maryland, as well as Loudon County, Virginia and Berkeley, Jefferson and Morgan Counties, West Virginia. 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. There have been no material changes to the Company's significant accounting policies for the three and six months ended June 30, 2024. The December 31, 2023 consolidated balance sheet information contained in this Quarterly Report on Form 10-Q was derived from the Company's 2023 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, 2023. Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. All significant intercompany transactions and accounts have been eliminated. Certain reclassifications have been made to the prior period amounts to conform with current period classifications. These reclassifications did not have a material impact on the Company's consolidated financial condition, results of operations or statement of consolidated cash flows. 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. To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. |
Recently Adopted Accounting Standards | Allowance for Credit Losses - Loans On January 1, 2023, the Company adopted ASU No. 2016-13 , Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), the current expected credit losses accounting standard commonly referred to as "CECL," which replaced the incurred loss model with the lifetime expected loss model. The CECL methodology requires an organization to measure all expected credit losses over the contractual term for financial assets measured at amortized cost, including loan receivables and held-to-maturity securities, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The CECL methodology also applies to off-balance sheet credit exposures not accounted for as insurance (e.g., loan commitments, standby letters of credit, financial guarantees and other similar instruments), net investments in leases recognized by a lessor in accordance with ASC Topic 842 on leases and AFS debt securities. The Company calculates credit losses over the estimated life of the applicable financial assets using the DCF methodology for the quantitative analysis for the majority of its loan segments, which applies the probability of default and loss given default factors to future cash flows, and then adjusts to the net present value to derive the required reserve. Reasonable and supportable macroeconomic conditions include unemployment and GDP. Model assumptions include the discount rate, prepayments and curtailments. The validation of credit models also included determining the length of the reasonable and supportable forecast and regression period and utilizing national peer group historical loss rates. For the consumer loan segments, the remaining life methodology is applied as a practical expedient based on the risk characteristics. Recent Accounting Pronouncements In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . The updated guidance requires enhanced disclosures for significant expenses by reportable operating segments. The significant expense categories would be those regularly provided to the Company's chief operating decision-maker ("CODM") and included in an operating segment's measures of profit or loss. Other required disclosures include the composition of other segment items, the title and position of the CODM and an explanation on how the CODM evaluates and uses the reportable segment's performance. This guidance for segment reporting is effective for fiscal years beginning after December 15, 2023 and interim periods with fiscal years beginning after December 15, 2024, with early adoption permitted. The Company will adopt the new standard for the annual reporting period beginning January 1, 2024 and for interim periods beginning January 1, 2025. The Company is not currently required to report segment information and, as such, does not anticipate that the updated guidance will have a significant impact on its consolidated financial statements. In December 2023, the Financial Accounting Standards Board issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which will require updates to the disclosures of the income tax rate reconciliation and income taxes paid. The income tax rate reconciliation will require expanded disclosure, using percentages and reporting currency amounts, to include specific categories, including state and local income tax, net of the federal income tax effect, tax credits and nontaxable and nondeductible items, with additional qualitative explanations of individually significant reconciling items. The amount of income taxes paid will require disaggregation by jurisdictional categories: federal, state and foreign. This guidance for income tax disclosures is effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the updated guidance; however, management does not expect it will have a significant impact on its consolidated financial statements. In March 2024, the SEC adopted the final rule under SEC Release No. 33-11275, “The Enhancement and Standardization of Climate-Related Disclosures for Investors”. This rule will require registrants to disclose certain climate-related information in registration statements and annual reports. The disclosure requirements will apply to the Company's fiscal year beginning January 1, 2026. The Company is currently evaluating the final rule to determine its impact on the Company's consolidated financial statements and disclosures. |
Allowance for Credit Losses on Loans | Allowance for Credit Losses on Loans The ACL represents the amount that, in management's judgment, appropriately reflects credit losses inherent in the loan portfolio at the balance sheet date. Loans deemed to be uncollectible are charged against the ACL on loans and subsequent recoveries, if any, are credited to the ACL on loans when received. Changes to the ACL are recorded through the provision for credit losses on loans in the unaudited condensed consolidated statements of income. The ACL is maintained at a level considered appropriate to absorb credit losses over the expected life of the loan. The ACL for expected credit losses is determined based on a quantitative assessment of two categories of loans: collectively evaluated loans and individually evaluated loans. In addition, the ACL includes a qualitative component which adjusts the CECL model results for risk factors that are not considered within the CECL model but are relevant in assessing the expected credit losses within the loan classes. The ACL on loans is measured on a collective basis when similar risk characteristics exist within the Company's loan segments between commercial and consumer. For purposes of estimating the Company’s ACL, management generally evaluates collectively evaluated loans by federal call code, which represents the loan classes based upon U.S. regulatory loan classification rules, in order to group loans with similar risk characteristics. Each of these loan segments are broken down into multiple loan classes, which are characterized by loan type, collateral type, risk attributions and the manner in which management monitors the performance of the borrower. The risks associated with lending activities differ and are subject to the impact of change in interest rates, market conditions and the impact of economic conditions on the collateral securing the loans, and general economic conditions. The commercial loan segment includes commercial real estate, acquisition and development, commercial and industrial and municipal loan classes. The consumer loan segment includes residential mortgage, installment and other consumer loans. Loans collectively evaluated includes loans on accrual status, except for loans previously restructured that do not share similar risk characteristics, which are individually evaluated. The ACL for loans collectively evaluated is measured using a lifetime expected loss rate model that considers historical loss performance and past events in addition to forecasts of future economic conditions. The Company elected to use the DCF methodology for the quantitative analysis for the majority of its loan segments, which applies the probability of default to future cash flows, using a loss driver model and loss given default factors, and then adjusts to the net present value to derive the required reserve. The probability of default estimates are derived through the application of reasonable and supportable economic forecasts to the regression models, which incorporates the Company's and peer loss-rate data, unemployment rate and GDP. The reasonable and supportable forecasts of the selected economic metrics are then input into the regression model to calculate an expected default rate. The expected default rates are then applied to expected loan balances estimated through the consideration of contractual repayment terms and expected prepayments. The prepayment and curtailment assumptions adjust the contractual terms of the loan to arrive at the expected cash flows. The development and validation of credit models also included determining the length of the reasonable and supportable forecast and regression period and utilizing national peer group historical loss rates. Management selected the national unemployment rate and GDP as the drivers of the quantitative portion of collectively evaluated reserves on loan classes reliant upon the DCF methodology. For the consumer loan segment, the quantitative reserve was calculated using the remaining life methodology where the average historical bank-specific and peer loss rates are applied to expected loan balances over an estimated remaining life of loans. The estimated remaining life is calculated using historical bank-specific loan attrition data. Loans that do not share similar risk characteristics are evaluated on an individual basis and are excluded from the collective evaluation for the ACL. Loans identified to be individually evaluated under CECL include loans on nonaccrual status and may include accruing loans that do not share similar risk characteristics to other accruing loans collectively evaluated. A specific reserve analysis is applied to the individually evaluated loans, which considers collateral value, an observable market price or the present value of expected future cash flows. A specific reserve may be assigned if the measured value of the loan using one of the before mentioned methods is less than the current carrying value of the loans. A loan is considered collateral-dependent when the Company determines foreclosure is probable or the borrower is experiencing financial difficulty and the Company expects repayment to be provided substantially through the operation or sale of the collateral. Collateral could be in the form of real estate, equipment or business assets. An ACL may result for a collateral-dependent loan if the fair value of the underlying collateral, as of the reporting date, adjusted for expected costs to repair or sell, was less than the amortized cost basis of the loan. If repayment of the loan is instead dependent only on the operation, rather than the sale of the collateral, the measure of the ACL does not incorporate estimated costs to sell. For loans evaluated on the basis of projected future principal and interest cash flows, the Company discounts the expected cash flows at the effective interest rate of the loan. An ACL will result if the present value of expected cash flows is less than the amortized cost basis of the loan. Based on management's analysis, adjustments may be applied for additional factors impacting the risk of loss in the loan portfolio beyond the quantitatively calculated reserve on collectively evaluated loans. As the quantitative reserve calculation incorporates historical conditions, management may consider an additional or reduced reserve is warranted through qualitative risk factors based on current and expected conditions. These qualitative risk factors include significant or unexpected changes in: • Lending policies, procedures, underwriting standards and recovery practices; • Nature and volume of loans; • Concentrations of credit; • Collateral valuation trends; • Delinquency and classified loan trends; • Experience, ability and depth of management and lending staff; • Quality of loan review system; and • Economic conditions and other external factors. For PCD loans, the nonaccrual status is determined in the same manner as for other loans. In accordance with the CECL standard, the Company accounts for its PCD loans under ASC 310-20, Receivables - Nonrefundable Fees and Other Asset s ("ASC 310-20"). These loans are initially recorded at fair value and include credit and interest rate marks associated with acquisition accounting adjustments. Purchase premiums or discounts are subsequently amortized as an adjustment to yield over the estimated contractual lives of the loans. Under ASC 310-20, the acquired loans are evaluated on an individual asset level, and not maintained in pools and accounted for as units of accounts, which would permit treating each pool as a single asset. On January 1, 2023, the Company adopted ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”). ASU 2022-02 requires that the Company evaluate, based on the guidance for accounting for loan modifications, whether the borrower is experiencing financial difficulty, if the modification results in a more-than-insignificant direct change in the contractual cash flows and whether the modifications represent terms that would result in a new loan or a continuation of an existing loan. The Company refers to these loans as "financial difficulty modifications" or "FDMs." This change requires all loan modifications to be accounted for under the general loan modification guidance in ASC 310-20, Receivables – Nonrefundable Fees and Other Costs, and subjects entities to new disclosure requirements on loan modifications to borrowers experiencing financial difficulty. If a modification occurs while the loan is on accrual status, it will continue to accrue interest under the modified terms. After the initial modification and recognition of a FDM, the Company will monitor the performance of the borrower. If no subsequent qualifying modifications are made to the FDM, the loan does not require disclosure in the current period's disclosures after the one-year period has elapsed. A comprehensive analysis of the ACL is performed by the Company on a quarterly basis. Management evaluates the adequacy of the ACL utilizing a defined methodology to determine if it properly addresses the current and expected risks in the loan portfolio, which considers the performance of borrowers and specific evaluation of individually evaluated loans including historical loss experiences, trends in delinquencies, nonperforming loans and other risk assets, and the qualitative factors. Risk factors are continuously reviewed and adjusted, as needed, by management when conditions support a change. Management believes its approach properly addresses relevant accounting and bank regulatory guidance for loans both collectively and individually evaluated. The results of the comprehensive analysis, including recommended changes, are governed by the Company's Reserve Adequacy Committee. See Note 4, Loans and Allowance for Credit Losses, to the unaudited condensed consolidated financial statements under Part I, Item 1, "Financial Information," for a description of the Company’s loan classes and differing levels of associated credit risk. |
Allowance for Credit Losses on AFS Securities | Allowance for Credit Losses on AFS Securities Under CECL, the Company is still required to conduct an impairment evaluation on AFS securities to determine 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 these situations apply, the guidance continues to require the Company to reduce the security's amortized cost basis down to its fair value through earnings. The Company also evaluates the unrealized losses on AFS securities to determine if a security's decline in fair value below its amortized cost basis is due to credit factors. 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 a decline in the fair value of the security due to a credit factor. 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. If this assessment indicates that a credit loss exists, the present value of the expected cash flows of the security is compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost, an ACL is recorded for the credit loss, which is limited by the amount that the fair value is less than the amortized cost basis. Any additional amount of loss would be due to non-credit factors and is recorded in AOCI, net of taxes. If a credit loss is recognized in earnings, subsequent improvements to the expectation of collectability will be recognized through the ACL. If the fair value of the security increases above its amortized cost, the unrealized gain will be recorded in AOCI, net of taxes, on the unaudited condensed consolidated statements of financial condition. Accrued interest receivable on AFS securities is excluded from the estimate of credit losses. |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Amortized Cost and Fair Values of AFS Securities | At June 30, 2024 and December 31, 2023, all investment securities were classified as AFS. The following table summarizes amortized cost, fair value and ACL of investment securities, and the corresponding amounts of gross unrealized gains and losses recognized in AOCI, and the allowance for credit losses at June 30, 2024 and December 31, 2023: Amortized Cost Gross Unrealized Gross Unrealized Allowance for Credit Losses Fair Value June 30, 2024 U.S. Treasury securities $ 20,050 $ — $ 2,337 $ — $ 17,713 U.S. Government Agencies 3,444 129 — — 3,573 States and political subdivisions 221,404 7 20,965 — 200,446 GSE residential MBSs 60,430 — 3,587 — 56,843 GSE commercial MBSs 3,778 311 — — 4,089 GSE residential CMOs 123,116 71 6,944 — 116,243 Non-agency CMOs 34,704 248 3,544 — 31,408 Asset-backed 99,386 487 1,215 — 98,658 Other 109 — — — 109 Totals $ 566,421 $ 1,253 $ 38,592 $ — $ 529,082 December 31, 2023 U.S. Treasury securities $ 20,057 $ — $ 2,217 $ — $ 17,840 U.S. Government Agencies 3,994 157 — — 4,151 States and political subdivisions 221,624 28 18,530 — 203,122 GSE residential MBSs 61,669 — 4,037 — 57,632 GSE commercial MBS 4,387 356 — — 4,743 GSE residential CMOs 79,284 18 6,200 — 73,102 Non-agency CMOs 48,162 316 3,809 — 44,669 Asset-backed 109,786 442 2,094 — 108,134 Other 126 — — — 126 Totals $ 549,089 $ 1,317 $ 36,887 $ — $ 513,519 |
Summary of Investment Securities with Unrealized Losses | The following table summarizes investment securities with unrealized losses at June 30, 2024 and December 31, 2023, 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 June 30, 2024 U.S. Treasury securities — $ — $ — 3 $ 17,713 $ 2,337 3 $ 17,713 $ 2,337 States and political subdivisions 6 2,029 45 42 197,920 20,920 48 199,949 20,965 GSE residential MBSs — — — 15 56,843 3,587 15 56,843 3,587 GSE residential CMOs 10 42,061 326 16 59,426 6,618 26 101,487 6,944 Non-agency CMOs 1 929 2 5 22,280 3,542 6 23,209 3,544 Asset-backed 3 18,648 54 10 51,393 1,161 13 70,041 1,215 Totals 20 $ 63,667 $ 427 91 $ 405,575 $ 38,165 111 $ 469,242 $ 38,592 December 31, 2023 U.S. Treasury securities — $ — $ — 3 $ 17,840 $ 2,217 3 $ 17,840 $ 2,217 States and political subdivisions 4 2,419 53 40 199,933 18,477 44 202,352 18,530 GSE residential MBSs — — — 15 57,632 4,037 15 57,632 4,037 GSE residential CMOs 4 12,710 186 14 56,765 6,014 18 69,475 6,200 Non-agency CMOs 3 11,531 83 4 16,334 3,726 7 27,865 3,809 Asset-backed 1 865 4 15 74,407 2,090 16 75,272 2,094 Totals 12 $ 27,525 $ 326 91 $ 422,911 $ 36,561 103 $ 450,436 $ 36,887 |
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 June 30, 2024. Expected maturities may differ from contractual maturities if issuers 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 36,406 32,567 Due after five years through ten years 58,620 53,071 Due after ten years 149,981 136,203 CMOs and MBSs 222,028 208,583 Asset-backed 99,386 98,658 Totals $ 566,421 $ 529,082 |
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 six months ended June 30, 2024 and 2023: Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Proceeds from sale of investment securities $ — $ — $ — $ — Gross gains — — — — Gross losses 12 2 17 10 |
LOANS AND ALLOWANCE FOR CREDI_2
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 LHFS, at June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 Commercial real estate: Owner occupied $ 371,301 $ 373,757 Non-owner occupied 710,477 694,638 Multi-family 151,542 150,675 Non-owner occupied residential 89,156 95,040 Acquisition and development: 1-4 family residential construction 32,439 24,516 Commercial and land development 129,883 115,249 Commercial and industrial 374,976 367,085 Municipal 10,594 9,812 Residential mortgage: First lien 271,153 266,239 Home equity - term 4,633 5,078 Home equity - lines of credit 192,736 186,450 Installment and other loans 8,713 9,774 Total loans $ 2,347,603 $ 2,298,313 |
Amortized Cost of the Loan Portfolio, by Year of Origination, Loan Class, and Credit Quality | The following table presents the amortized cost basis of the loan portfolio, by year of origination, loan class, and credit quality, as of June 30, 2024 and December 31, 2023. For residential and consumer loan classes, the Company also evaluates credit quality based on the aging status of the loan and payment activity, which residential mortgage and installment and other consumer loans are presented below based on payment performance: performing or nonperforming. Term Loans Amortized Cost Basis by Origination Year As of June 30, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Basis Revolving Loans Converted to Term Total Commercial Real Estate: Owner-occupied: Risk rating Pass $ 16,172 $ 54,321 $ 99,774 $ 68,370 $ 20,368 $ 78,843 $ 5,518 $ — $ 343,366 Special mention — — — 1,370 1,154 508 165 — 3,197 Substandard - Non-IEL — 704 10,000 2,957 5,994 1,538 95 — 21,288 Substandard - IEL — — — 1,239 — 2,211 — — 3,450 Total owner-occupied loans $ 16,172 $ 55,025 $ 109,774 $ 73,936 $ 27,516 $ 83,100 $ 5,778 $ — $ 371,301 Current period gross charge offs - owner-occupied $ — $ — $ — $ — $ — $ 12 $ — $ — $ 12 Non-owner occupied: Risk rating Pass $ 38,792 $ 79,834 $ 99,324 $ 227,068 $ 82,064 $ 176,728 $ 643 $ — $ 704,453 Special mention — — — 341 — 2,124 — — 2,465 Substandard - Non-IEL — — — — — 2,697 — 862 3,559 Substandard - IEL — — — — — — — — — Total non-owner occupied loans $ 38,792 $ 79,834 $ 99,324 $ 227,409 $ 82,064 $ 181,549 $ 643 $ 862 $ 710,477 Current period gross charge offs - non-owner occupied $ — $ — $ — $ — $ — $ — $ — $ — $ — Multi-family: Risk rating Pass $ 5,844 $ 2,823 $ 61,840 $ 28,489 $ 12,511 $ 38,021 $ 346 $ — $ 149,874 Special mention — — 1,119 — — 237 — — 1,356 Substandard - Non-IEL — — — — — — — — — Substandard - IEL — — — — — 312 — — 312 Total multi-family loans $ 5,844 $ 2,823 $ 62,959 $ 28,489 $ 12,511 $ 38,570 $ 346 $ — $ 151,542 Current period gross charge offs - multi-family $ — $ — $ — $ — $ — $ — $ — $ — $ — Non-owner occupied residential: Risk rating Pass $ 2,901 $ 10,156 $ 20,153 $ 16,307 $ 6,810 $ 31,235 $ 399 $ — $ 87,961 Special mention — — — — — 504 — — 504 Substandard - Non-IEL — — — — — 425 — — 425 Substandard - IEL — 2 — 185 — 79 — — 266 Total non-owner occupied residential loans $ 2,901 $ 10,158 $ 20,153 $ 16,492 $ 6,810 $ 32,243 $ 399 $ — $ 89,156 Current period gross charge offs - non-owner occupied residential $ — $ — $ — $ — $ — $ — $ — $ — $ — continued Term Loans Amortized Cost Basis by Origination Year As of June 30, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Basis Revolving Loans Converted to Term Total Acquisition and development: 1-4 family residential construction: Risk rating Pass $ 13,971 $ 17,179 $ 865 $ — $ — $ — $ — $ 129 $ 32,144 Special mention 74 221 — — — — — — 295 Substandard - Non-IEL — — — — — — — — — Substandard - IEL — — — — — — — — — Total 1-4 family residential construction loans $ 14,045 $ 17,400 $ 865 $ — $ — $ — $ — $ 129 $ 32,439 Current period gross charge offs - 1-4 family residential construction $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial and land development: Risk rating Pass $ 15,213 $ 39,209 $ 43,482 $ 5,455 $ 9,826 $ 1,567 $ 5,533 $ 8,818 $ 129,103 Special mention — — — — 780 — — — 780 Substandard - Non-IEL — — — — — — — — — Substandard - IEL — — — — — — — — — Total commercial and land development loans $ 15,213 $ 39,209 $ 43,482 $ 5,455 $ 10,606 $ 1,567 $ 5,533 $ 8,818 $ 129,883 Current period gross charge offs - commercial and land development $ — $ 23 $ — $ — $ — $ — $ — $ — $ 23 Commercial and Industrial: Risk rating Pass $ 30,700 $ 60,734 $ 63,069 $ 57,202 $ 21,753 $ 26,589 $ 95,701 $ 3,249 $ 358,997 Special mention — — — 31 7 946 320 — 1,304 Substandard - Non-IEL — — — 5,861 — 217 8,568 — 14,646 Substandard - IEL — 12 — — 2 — 15 — 29 Total commercial and industrial loans $ 30,700 $ 60,746 $ 63,069 $ 63,094 $ 21,762 $ 27,752 $ 104,604 $ 3,249 $ 374,976 Current period gross charge offs - commercial and industrial $ — $ — $ 54 $ — $ — $ 6 $ — $ — $ 60 Municipal: Risk rating Pass $ 1,577 $ — $ — $ 3,124 $ — $ 5,893 $ — $ — $ 10,594 Total municipal loans $ 1,577 $ — $ — $ 3,124 $ — $ 5,893 $ — $ — $ 10,594 Current period gross charge offs - municipal $ — $ — $ — $ — $ — $ — $ — $ — $ — Residential mortgage: First lien: Payment performance Performing $ 18,111 $ 44,351 $ 65,479 $ 33,167 $ 7,856 $ 98,520 $ — $ 630 $ 268,114 Nonperforming — — 248 232 — 2,559 — — 3,039 Total first lien loans $ 18,111 $ 44,351 $ 65,727 $ 33,399 $ 7,856 $ 101,079 $ — $ 630 $ 271,153 Current period gross charge offs - first lien $ — $ — $ — $ — $ — $ — $ — $ — $ — continued Term Loans Amortized Cost Basis by Origination Year As of June 30, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Basis Revolving Loans Converted to Term Total Home equity - term: Payment performance Performing $ 183 $ 473 $ 674 $ 71 $ 390 $ 2,840 $ — $ — $ 4,631 Nonperforming — — — — — 2 — — 2 Total home equity - term loans $ 183 $ 473 $ 674 $ 71 $ 390 $ 2,842 $ — $ — $ 4,633 Current period gross charge offs - home equity - term $ — $ — $ — $ — $ — $ — $ — $ — $ — Home equity - lines of credit: Payment performance Performing $ — $ — $ — $ — $ — $ — $ 190,786 $ 535 $ 191,321 Nonperforming — — — — — — 1,199 216 1,415 Total residential real estate - home equity - lines of credit loans $ — $ — $ — $ — $ — $ — $ 191,985 $ 751 $ 192,736 Current period gross charge offs - home equity - lines of credit $ — $ — $ — $ — $ — $ — $ 50 $ — $ 50 Installment and other loans: Payment performance Performing $ 593 $ 568 $ 316 $ 281 $ 78 $ 848 $ 6,011 $ — $ 8,695 Nonperforming — 3 — — — 15 — — 18 Total Installment and other loans $ 593 $ 571 $ 316 $ 281 $ 78 $ 863 $ 6,011 $ — $ 8,713 Current period gross charge offs - installment and other $ 74 $ 12 $ — $ — $ — $ 18 $ 14 $ — $ 118 Term Loans Amortized Cost Basis by Origination Year As of December 31, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Basis Revolving Loans Converted to Term Total Commercial Real Estate: Owner-occupied: Risk rating Pass $ 50,829 $ 103,192 $ 69,888 $ 21,232 $ 21,251 $ 62,634 $ 4,941 $ — $ 333,967 Special mention — — 2,517 1,176 — 1,314 — — 5,007 Substandard - Non-IEL — 9,923 — 6,075 — 2,687 312 — 18,997 Substandard - IEL — — — 13,366 — 2,420 — — 15,786 Total owner-occupied loans $ 50,829 $ 113,115 $ 72,405 $ 41,849 $ 21,251 $ 69,055 $ 5,253 $ — $ 373,757 Current period gross charge offs - owner-occupied $ — $ — $ — $ — $ — $ — $ — $ — $ — Non-owner occupied: Risk rating Pass $ 82,879 $ 102,212 $ 235,031 $ 83,652 $ 63,176 $ 120,696 $ 509 $ — $ 688,155 Special mention — — — 524 — 2,112 — — 2,636 Substandard - Non-IEL — — — — — 2,739 — 868 3,607 Substandard - IEL — — — — — 240 — — 240 Total non-owner occupied loans $ 82,879 $ 102,212 $ 235,031 $ 84,176 $ 63,176 $ 125,787 $ 509 $ 868 $ 694,638 Current period gross charge offs - non-owner occupied $ — $ — $ — $ — $ — $ — $ — $ — $ — continued Term Loans Amortized Cost Basis by Origination Year As of December 31, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Basis Revolving Loans Converted to Term Total Multi-family: Risk rating Pass $ 2,701 $ 61,805 $ 28,541 $ 12,694 $ 7,437 $ 33,895 $ 117 $ — $ 147,190 Special mention — — — — 244 2,008 — — 2,252 Substandard - Non-IEL — — — — — — — — — Substandard - IEL — — — — — 1,233 — — 1,233 Total multi-family loans $ 2,701 $ 61,805 $ 28,541 $ 12,694 $ 7,681 $ 37,136 $ 117 $ — $ 150,675 Current period gross charge offs - multi-family $ — $ — $ — $ — $ — $ — $ — $ — $ — Non-owner occupied residential: Risk rating Pass $ 10,075 $ 20,473 $ 16,947 $ 7,974 $ 6,444 $ 28,319 $ 1,130 $ — $ 91,362 Special mention — — — — — 731 — — 731 Substandard - Non-IEL — — — — — 375 — — 375 Substandard - IEL 2 — 192 1,461 — 917 — — 2,572 Total non-owner occupied residential loans $ 10,077 $ 20,473 $ 17,139 $ 9,435 $ 6,444 $ 30,342 $ 1,130 $ — $ 95,040 Current period gross charge offs - non-owner occupied residential $ — $ — $ — $ — $ — $ 12 $ — $ — $ 12 Acquisition and development: 1-4 family residential construction: Risk rating Pass $ 18,820 $ 5,400 $ — $ — $ — $ — $ — $ — $ 24,220 Special mention 222 — 74 — — — — — 296 Substandard - Non-IEL — — — — — — — — — Substandard - IEL — — — — — — — — — Total 1-4 family residential construction loans $ 19,042 $ 5,400 $ 74 $ — $ — $ — $ — $ — $ 24,516 Current period gross charge offs - 1-4 family residential construction $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial and land development: Risk rating Pass $ 28,829 $ 48,453 $ 9,847 $ 9,927 $ 110 $ 1,774 $ 6,574 $ 6,936 $ 112,450 Special mention — — — 1,001 — 437 — — 1,438 Substandard - Non-IEL — — — — — — — — — Substandard - IEL — — — — — 1,361 — — 1,361 Total commercial and land development loans $ 28,829 $ 48,453 $ 9,847 $ 10,928 $ 110 $ 3,572 $ 6,574 $ 6,936 $ 115,249 Current period gross charge offs - commercial and land development $ — $ — $ — $ — $ — $ — $ — $ — $ — continued Term Loans Amortized Cost Basis by Origination Year As of December 31, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Basis Revolving Loans Converted to Term Total Commercial and Industrial: Risk rating Pass $ 67,735 $ 69,670 $ 67,117 $ 24,580 $ 10,753 $ 20,775 $ 86,475 $ 1,522 $ 348,627 Special mention — 4,251 4,364 11 552 356 2,258 — 11,792 Substandard - Non-IEL — — 4,682 — 5 225 1,082 — 5,994 Substandard - IEL — 69 — 7 — 455 141 — 672 Total commercial and industrial loans $ 67,735 $ 73,990 $ 76,163 $ 24,598 $ 11,310 $ 21,811 $ 89,956 $ 1,522 $ 367,085 Current period gross charge offs - commercial and industrial $ — $ 161 $ 106 $ — $ — $ 8 $ 473 $ — $ 748 Municipal: Risk rating Pass $ — $ — $ 3,403 $ — $ — $ 6,409 $ — $ — $ 9,812 Total municipal loans $ — $ — $ 3,403 $ — $ — $ 6,409 $ — $ — $ 9,812 Current period gross charge offs - municipal $ — $ — $ — $ — $ — $ — $ — $ — $ — Residential mortgage: First lien: Payment performance Performing $ 43,641 $ 71,311 $ 34,704 $ 8,056 $ 7,465 $ 97,943 $ — $ 638 $ 263,758 Nonperforming — — — — 120 2,361 — — 2,481 Total first lien loans $ 43,641 $ 71,311 $ 34,704 $ 8,056 $ 7,585 $ 100,304 $ — $ 638 $ 266,239 Current period gross charge offs - first lien $ — $ — $ — $ — $ — $ 58 $ — $ — $ 58 Home equity - term: Payment performance Performing $ 607 $ 732 $ 90 $ 426 $ 115 $ 3,105 $ — $ — $ 5,075 Nonperforming — — — — — 3 — — 3 Total home equity - term loans $ 607 $ 732 $ 90 $ 426 $ 115 $ 3,108 $ — $ — $ 5,078 Current period gross charge offs - home equity - term $ — $ — $ — $ — $ — $ — $ — $ — $ — Home equity - lines of credit: Payment performance Performing $ — $ — $ — $ — $ — $ — $ 107,967 $ 77,171 $ 185,138 Nonperforming — — — — — — 1,296 16 1,312 Total residential real estate - home equity - lines of credit loans $ — $ — $ — $ — $ — $ — $ 109,263 $ 77,187 $ 186,450 Current period gross charge offs - home equity - lines of credit $ — $ — $ — $ — $ — $ — $ 40 $ — $ 40 Installment and other loans: Payment performance Performing $ 758 $ 413 $ 332 $ 106 $ 670 $ 947 $ 6,500 $ — $ 9,726 Nonperforming 3 — — — 33 12 — — 48 Total Installment and other loans $ 761 $ 413 $ 332 $ 106 $ 703 $ 959 $ 6,500 $ — $ 9,774 Current period gross charge offs - installment and other $ 181 $ 24 $ — $ — $ 4 $ 10 $ 28 $ — $ 247 |
Schedule of Amortized Cost of Nonaccrual Loans by Class, With and Without Loan Reserves | The following table presents the amortized cost basis of nonaccrual loans, according to loan class, with and without reserves on individually evaluated loans as of June 30, 2024 and December 31, 2023. The Company did not recognize interest income on nonaccrual loans during the three and six months ended June 30, 2024 and 2023. During the six months ended June 30, 2024, the Company recorded interest income previously applied to principal of $1.6 million from the payoff of a commercial real estate loan, which totaled $13.4 million at December 31, 2023. June 30, 2024 December 31, 2023 Nonaccrual loans with a related ACL Nonaccrual loans with no related ACL Total nonaccrual loans Loans Past Due 90+ Accruing Nonaccrual loans with a related ACL Nonaccrual loans with no related ACL Total nonaccrual loans Loans Past Due 90+ Accruing Commercial real estate: Owner-occupied $ — $ 3,450 $ 3,450 $ — $ — $ 15,786 $ 15,786 $ — Non-owner occupied — — — — — 240 240 — Multi-family — 312 312 — — 1,233 1,233 — Non-owner occupied residential — 266 266 — — 2,572 2,572 — Acquisition and development: Commercial and land development — — — — — 1,361 1,361 — Commercial and industrial — 29 29 — 68 604 672 — Residential mortgage: First lien — 2,871 2,871 187 — 2,309 2,309 66 Home equity – term — 2 2 — — 3 3 — Home equity – lines of credit — 1,415 1,415 — — 1,312 1,312 — Installment and other loans 3 15 18 — 3 36 39 — Total $ 3 $ 8,360 $ 8,363 $ 187 $ 71 $ 25,456 $ 25,527 $ 66 |
Schedule of Amortized Cost Basis of Collateral-Dependent Loans | The following table presents the amortized cost basis of collateral-dependent loans by class as of June 30, 2024 and December 31, 2023: Type of Collateral June 30, 2024 Business Assets Commercial Real Estate Equipment Land Residential Real Estate Other Total Commercial real estate: Owner occupied $ — $ 3,449 $ — $ — $ — $ — $ 3,449 Non-owner occupied — — — — — — — Multi-family — 312 — — — — 312 Non-owner occupied residential — 266 — — — — 266 Acquisition and development: Commercial and land development — — — — — — — Commercial and industrial 15 — 17 — — — 32 Residential mortgage: First lien — — — — 2,797 — 2,797 Home equity - term — — — — 2 — 2 Home equity - lines of credit — — — — 1,415 — 1,415 Installment and other loans — — 3 — — — 3 Total $ 15 $ 4,027 $ 20 $ — $ 4,214 $ — $ 8,276 December 31, 2023 Commercial real estate: Owner occupied $ — $ 15,786 $ — $ — $ — $ — $ 15,786 Non-owner occupied — 240 — — — — 240 Multi-family — 1,233 — — — — 1,233 Non-owner occupied residential — 2,572 — — — — 2,572 Acquisition and development: Commercial and land development — — — 1,361 — — 1,361 Commercial and industrial 2 76 594 — — — 672 Residential mortgage: First lien — — — — 2,231 — 2,231 Home equity - term — — — — 3 — 3 Home equity - lines of credit — — — — 1,312 — 1,312 Installment and other loans — — 18 — — — 18 Total $ 2 $ 19,907 $ 612 $ 1,361 $ 3,546 $ — $ 25,428 |
Loan Portfolio Summarized by Aging Categories of Performing Loans and Nonaccrual Loans | The following table presents the classes of the loan portfolio summarized by aging categories at June 30, 2024 and December 31, 2023: 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due Total Loans Not Past Due Total June 30, 2024 Commercial real estate: Owner occupied $ 328 $ — $ 1,327 $ 1,655 $ 369,646 $ 371,301 Non-owner occupied — — — — 710,477 710,477 Multi-family — — — — 151,542 151,542 Non-owner occupied residential 79 69 185 333 88,823 89,156 Acquisition and development: 1-4 family residential construction — — — — 32,439 32,439 Commercial and land development — — — — 129,883 129,883 Commercial and industrial 168 3,022 33 3,223 371,753 374,976 Municipal — — — — 10,594 10,594 Residential mortgage: First lien 976 935 1,078 2,989 268,164 271,153 Home equity - term — — — — 4,633 4,633 Home equity - lines of credit 683 1,120 762 2,565 190,171 192,736 Installment and other loans 91 45 3 139 8,574 8,713 $ 2,325 $ 5,191 $ 3,388 $ 10,904 $ 2,336,699 $ 2,347,603 December 31, 2023 Commercial real estate: Owner occupied $ 13,852 $ — $ 117 $ 13,969 $ 359,788 $ 373,757 Non-owner occupied 152 — — 152 694,486 694,638 Multi-family — — — — 150,675 150,675 Non-owner occupied residential — — 192 192 94,848 95,040 Acquisition and development: 1-4 family residential construction — — — — 24,516 24,516 Commercial and land development 16 — — 16 115,233 115,249 Commercial and industrial 27 69 625 721 366,364 367,085 Municipal — — — — 9,812 9,812 Residential mortgage: First lien 5,433 1,058 721 7,212 259,027 266,239 Home equity - term 20 2 — 22 5,056 5,078 Home equity - lines of credit 1,801 100 839 2,740 183,710 186,450 Installment and other loans 84 28 19 131 9,643 9,774 $ 21,385 $ 1,257 $ 2,513 $ 25,155 $ 2,273,158 $ 2,298,313 |
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 ACL for the three and six months ended June 30, 2024 and 2023: Commercial Consumer Commercial Acquisition Commercial Municipal Total Residential Installment Total Unallocated Total Three Months Ended June 30, 2024 Balance, beginning of period $ 17,975 $ 2,233 $ 5,389 $ 164 $ 25,761 $ 3,193 $ 211 $ 3,404 $ — $ 29,165 Provision for credit losses 236 423 267 (3) 923 (126) 15 (111) — 812 Charge-offs (12) (23) (14) — (49) (50) (65) (115) — (164) Recoveries 4 1 10 — 15 6 30 36 — 51 Balance, end of period $ 18,203 $ 2,634 $ 5,652 $ 161 $ 26,650 $ 3,023 $ 191 $ 3,214 $ — $ 29,864 June 30, 2023 Balance, beginning of period $ 16,697 $ 3,217 $ 5,787 $ 177 $ 25,878 $ 2,278 $ 208 $ 2,486 $ — $ 28,364 Provision for loan losses 246 (451) 440 (10) 225 64 110 174 — 399 Charge-offs (12) — (395) — (407) (98) (67) (165) — (572) Recoveries 65 1 22 — 88 63 41 104 — 192 Balance, end of period $ 16,996 $ 2,767 $ 5,854 $ 167 $ 25,784 $ 2,307 $ 292 $ 2,599 $ — $ 28,383 Six Months Ended June 30, 2024 Balance, beginning of period $ 17,873 $ 2,241 $ 5,806 $ 157 $ 26,077 $ 2,424 $ 201 $ 2,625 $ — $ 28,702 Provision for credit losses 314 414 (194) 4 538 637 58 695 — 1,233 Charge-offs (12) (23) (60) — (95) (50) (118) (168) — (263) Recoveries 28 2 100 — 130 12 50 62 — 192 Balance, end of period $ 18,203 $ 2,634 $ 5,652 $ 161 $ 26,650 $ 3,023 $ 191 $ 3,214 $ — $ 29,864 June 30, 2023 Balance, beginning of period $ 13,558 $ 3,214 $ 4,505 $ 24 $ 21,301 $ 3,444 $ 188 $ 3,632 $ 245 $ 25,178 Impact of adopting ASC 326 2,857 (214) 928 169 3,740 (1,121) 49 (1,072) (245) 2,423 Provision for loan losses 508 (236) 852 (26) 1,098 (76) 106 30 — 1,128 Charge-offs (12) — (481) — (493) (98) (123) (221) — (714) Recoveries 85 3 50 — 138 158 72 230 — 368 Balance, end of period $ 16,996 $ 2,767 $ 5,854 $ 167 $ 25,784 $ 2,307 $ 292 $ 2,599 $ — $ 28,383 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Summary of ROU Assets and Related Lease Liabilities | The following table summarizes the Company's operating leases at June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 Operating lease ROU assets $ 10,360 $ 10,824 Operating lease ROU liabilities 11,189 11,614 Weighted-average remaining lease term (in years) 14.9 15.1 Weighted-average discount rate 4.4 % 4.4 % |
Information Related to Operating Leases | The following table presents information related to the Company's operating leases for the three and six months ended June 30, 2024 and 2023: Three Months Ended Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Cash paid for operating lease liabilities $ 336 $ 287 $ 671 $ 571 Operating lease expense 355 302 711 611 |
Schedule of Maturities of Lease Liabilities | The following table presents expected future maturities of the Company's lease liabilities as of June 30, 2024: 2024 $ 678 2025 1,371 2026 1,403 2027 1,437 2028 1,194 Thereafter 10,187 16,270 Less: imputed interest 5,081 Total lease liabilities $ 11,189 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Other Intangible Assets | The following table presents changes in and components of other intangible assets for the three and six months ended June 30, 2024 and 2023. No impairment charges were recorded on other intangible assets during the three and six months ended June 30, 2024 and June 30, 2023. Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Beginning of period $ 2,189 $ 2,828 $ 2,414 $ 3,078 Amortization expense (215) (239) (440) (489) Balance, end of period $ 1,974 $ 2,589 $ 1,974 $ 2,589 |
Schedule of Components of Other Intangible Assets | The following table presents the components of other identifiable intangible assets at June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 Gross Amount Accumulated Gross Amount Accumulated Amortized intangible assets: Core deposit intangibles $ 8,390 $ 6,651 $ 8,390 $ 6,247 Other customer relationship intangibles 289 54 289 18 Total $ 8,679 $ 6,705 $ 8,679 $ 6,265 |
Schedule of Estimated Aggregated Amortization Expense | The following table presents future estimated aggregate amortization expense for other identifiable intangible assets at June 30, 2024: 2024 $ 396 2025 656 2026 476 2027 297 2028 120 Thereafter 29 $ 1,974 |
SHARE-BASED COMPENSATION PLANS
SHARE-BASED COMPENSATION PLANS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Nonvested Restricted Shares Activity | The following table presents a summary of nonvested restricted shares activity for the six months ended June 30, 2024: Shares Weighted Average Grant Date Fair Value Nonvested shares, beginning of year 291,231 $ 22.85 Granted 158,684 27.48 Forfeited (3,330) 23.62 Vested (128,574) 21.02 Nonvested shares, at period end 318,011 $ 25.89 |
Schedule of Restricted Shares Compensation Expense | The following table presents restricted share compensation expense, with tax benefit information, and fair value of shares vested, for the three and six months ended June 30, 2024 and 2023: Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Restricted share award expense $ 864 $ 534 $ 1,809 $ 1,150 Restricted share award tax benefit 181 112 380 242 Fair value of shares vested 578 423 3,466 2,460 |
Schedule of Employee Stock Purchase Plan | The following table presents information for the employee stock purchase plan for the three and six months ended June 30, 2024 and 2023: Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Shares purchased — — 3,850 3,003 Weighted average price of shares purchased $ — $ — $ 20.67 $ 21.85 Compensation expense recognized — — $ 22 $ 3 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 Notional Amount Balance Sheet Location Fair Value Notional Amount Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Cash flow hedge designation: Interest rate swaps -FHLB advances $ 75,000 Other assets $ 1,746 $ 75,000 Other assets $ 135 Interest rate swaps - AFS securities 50,000 Other liabilities (175) 50,000 Other liabilities (426) Fair value hedge designation: Interest rate swaps - commercial loans 100,000 Other assets 414 — Other assets — Interest rate swaps - commercial loans — Other liabilities — 100,000 Other liabilities (1,718) Total derivatives designated as hedging instruments $ 1,985 $ (2,009) Derivatives not designated as hedging instruments: Interest rate swaps $ 262,458 Other assets $ 11,803 $ 216,485 Other assets $ 11,157 Interest rate swaps 262,458 Other liabilities (11,828) 216,485 Other liabilities (11,253) Purchased options – rate cap 5,861 Other assets 7 5,909 Other assets 8 Written options – rate cap 5,861 Other liabilities (7) 5,909 Other liabilities (8) Risk participations - sold credit protection 32,952 Other liabilities (30) 32,722 Other liabilities (59) Risk participations - purchased credit protection 23,832 Other assets 72 11,035 Other assets 28 Interest rate lock commitments with customers 3,133 Other assets 71 2,181 Other assets 55 Forward sale commitments 1,538 Other assets 4 688 Other assets (4) Total derivatives not designated as hedging instruments $ 92 $ (76) The following table presents the carrying amount and associated cumulative basis adjustment related to the application of fair value hedge accounting that is included in the carrying amount of hedged assets as of June 30, 2024 and 2023 . Carrying Amounts of Hedged Assets Cumulative Amounts of Fair Value Hedging Adjustments Included in the Carrying Amounts of the Hedged Assets Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Commercial loans $ 100,000 $ — $ (415) $ — |
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 six months ended June 30, 2024 and 2023: Amount of Gain Recognized in OCI on Derivative Amount of Gain Recognized in OCI on Derivative Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Derivatives in cash flow hedging relationships: Interest rate products $ 434 $ 1,073 $ 1,862 $ 1,392 Total $ 434 $ 1,073 $ 1,862 $ 1,392 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 June 30, Six Months Ended June 30, 2024 2023 2024 2023 Derivatives in cash flow hedging relationships: Interest rate products $ — $ — $ — $ — Interest income Total $ — $ — $ — $ — Amount of Gain Recognized in Income Amount of Gain Recognized in Income Location of Gain Recognized in Income Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Derivatives designated as hedging instruments Fair value hedge designation: Interest rate swaps - commercial loans (1) $ 5 n/a $ 8 n/a Interest income on loans Derivatives not designated as hedging instruments: Interest rate products $ 27 $ 40 $ 71 $ (119) Other operating expenses Risk participation agreements (8) 37 73 27 Other operating expenses Interest rate lock commitments with customers 15 10 17 32 Mortgage banking activities Forward sale commitments 5 (7) 7 (139) Mortgage banking activities Total derivatives not designated as hedging instruments $ 39 $ 80 $ 168 $ (199) (1) Amount includes the net of the change in the fair value of the interest rate swaps hedging commercial loans and the change in the carrying value included in the hedged commercial loans. |
Summary of Components of Interest Rate Swaps | The following table is a summary of components for interest rate swaps designated as hedging instruments at June 30, 2024 and December 31, 2023: Weighted Average Pay Rate Weighted Average Receive Rate Weighted Average Maturity in Years June 30, 2024 Cash flow hedge designation: Interest rate swaps - FHLB advances 3.49 % 5.34 % 3.8 Interest rate swaps - AFS securities 5.33 % 3.73 % 0.2 Fair value hedge designation: Interest rate swaps - commercial loans 4.12 % 5.34 % 3.2 December 31, 2023 Cash flow hedge designation: Interest rate swaps - FHLB advances 3.49 % 5.34 % 4.3 Interest rate swaps - AFS securities 5.34 % 3.73 % 0.7 Fair value hedge designation: Interest rate swaps - commercial loans 4.12 % 5.34 % 3.7 |
SHORT-TERM BORROWINGS (Tables)
SHORT-TERM BORROWINGS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Summary of the Use of Short-Term Borrowings | The Company has short-term borrowing capability from the FHLB and the FRB discount window. The following table summarizes these short-term borrowings at June 30, 2024 and December 31, 2023, and for the six and twelve months then ended: June 30, 2024 December 31, 2023 Balance at period-end $ 75,000 $ 97,500 Weighted average interest rate during the period 5.67 % 5.68 % Average balance during the period $ 75,000 $ 87,370 Average interest rate during the period 5.77 % 5.46 % Maximum month-end balance during the period $ 105,000 $ 120,984 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | The following table presents components of the Company’s long-term debt at June 30, 2024 and December 31, 2023: Amount Weighted Average Rate June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023 FHLB fixed rate advances maturing: 2025 $ 15,000 $ 15,000 4.57 % 4.57 % 2028 25,000 25,000 3.98 % 3.98 % Total FHLB Advances $ 40,000 $ 40,000 4.20 % 4.20 % |
SHAREHOLDERS' EQUITY AND REGU_2
SHAREHOLDERS' EQUITY AND REGULATORY CAPITAL (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Capital Amounts and Ratios | The following table presents capital amounts and ratios at June 30, 2024 and December 31, 2023: Actual For Capital Adequacy Purposes To Be Well Amount Ratio Amount Ratio Amount Ratio June 30, 2024 Total risk-based capital: Orrstown Financial Services, Inc. $ 341,909 13.3 % $ 269,335 10.5 % n/a n/a Orrstown Bank 337,000 13.1 % 269,264 10.5 % $ 256,442 10.0 % Tier 1 risk-based capital: Orrstown Financial Services, Inc. 286,005 11.1 % 218,033 8.5 % n/a n/a Orrstown Bank 306,798 12.0 % 217,976 8.5 % 205,154 8.0 % Tier 1 common equity risk-based capital: Orrstown Financial Services, Inc. 286,005 11.1 % 179,557 7.0 % n/a n/a Orrstown Bank 306,798 12.0 % 179,509 7.0 % 166,687 6.5 % Tier 1 leverage capital: Orrstown Financial Services, Inc. 286,005 8.9 % 129,255 4.0 % n/a n/a Orrstown Bank 306,798 9.5 % 129,231 4.0 % 161,539 5.0 % December 31, 2023 Total risk-based capital: Orrstown Financial Services, Inc. $ 326,878 13.0 % $ 264,019 10.5 % n/a n/a Orrstown Bank 320,687 12.8 % 263,942 10.5 % $ 251,373 10.0 % Tier 1 risk-based capital: Orrstown Financial Services, Inc. 272,677 10.8 % 213,730 8.5 % n/a n/a Orrstown Bank 292,160 11.6 % 213,667 8.5 % 201,099 8.0 % Tier 1 common equity risk-based capital: Orrstown Financial Services, Inc. 272,677 10.8 % 176,013 7.0 % n/a n/a Orrstown Bank 292,160 11.6 % 175,961 7.0 % 163,393 6.5 % Tier 1 leverage capital: Orrstown Financial Services, Inc. 272,677 8.9 % 122,907 4.0 % n/a n/a Orrstown Bank 292,160 9.5 % 122,907 4.0 % 153,634 5.0 % |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | The following table presents earnings per share for the three and six months ended June 30, 2024 and 2023: Three Months Ended June 30, Six Months Ended June 30, (shares presented in the table are in thousands) 2024 2023 2024 2023 Net income $ 7,738 $ 9,838 $ 16,269 $ 18,994 Weighted average shares outstanding - basic 10,393 10,336 10,371 10,360 Dilutive effect of share-based compensation 160 85 146 98 Weighted average shares outstanding - diluted 10,553 10,421 10,517 10,458 Per share information: Basic earnings per share $ 0.74 $ 0.95 $ 1.57 $ 1.83 Diluted earnings per share 0.73 0.94 1.55 1.82 |
FINANCIAL INSTRUMENTS WITH OF_2
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Contractual or Notional Amounts, Commitments to Fund | The following table presents these contractual, or notional, amounts at June 30, 2024 and December 31, 2023. Contractual or Notional Amount June 30, 2024 December 31, 2023 Commitments to fund: Home equity lines of credit $ 343,976 $ 337,460 1-4 family residential construction loans 49,901 40,330 Commercial real estate, construction and land development loans 150,073 132,607 Commercial, industrial and other loans 357,150 357,099 Standby letters of credit 30,653 24,529 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets Measured at Fair Value on Recurring Basis | The following table summarizes assets and liabilities measured at fair value on a recurring basis at June 30, 2024 and December 31, 2023: Level 1 Level 2 Level 3 Total Fair June 30, 2024 Financial Assets Investment securities: U.S. Treasury securities $ 17,713 $ — $ — $ 17,713 U.S. Government Agencies — 3,573 — 3,573 States and political subdivisions — 194,114 6,332 200,446 GSE residential MBSs — 56,843 — 56,843 GSE commercial MBSs — 4,089 — 4,089 GSE residential CMOs — 116,243 — 116,243 Non-agency CMOs — 20,173 11,235 31,408 Asset-backed — 98,658 — 98,658 Other 109 — — 109 Loans held for sale — 1,562 — 1,562 Derivatives — 14,042 71 14,113 Totals $ 17,822 $ 509,297 $ 17,638 $ 544,757 Financial Liabilities Derivatives $ — $ 12,040 $ — $ 12,040 December 31, 2023 Financial Assets Investment securities: U.S. Treasury securities $ 17,840 $ — $ — $ 17,840 U.S. Government Agencies — 4,151 — 4,151 States and political subdivisions — 197,060 6,062 203,122 GSE residential MBSs — 57,632 — 57,632 GSE commercial MBSs — 4,743 — 4,743 GSE residential CMOs — 73,102 — 73,102 Non-agency CMOs — 22,878 21,791 44,669 Asset-backed — 108,134 — 108,134 Other 126 — — 126 Loans held for sale — 5,816 — 5,816 Derivatives — 11,328 55 11,383 Totals $ 17,966 $ 484,844 $ 27,908 $ 530,718 Financial Liabilities Derivatives $ — $ 13,464 $ — $ 13,464 |
Level 3 Fair Value Measurement Activity | The following provides details of the Level 3 fair value measurement activity for the periods ended June 30, 2024 and 2023: Investment securities: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Balance, beginning of period $ 17,734 $ 28,190 $ 27,853 $ 27,193 Unrealized (losses) gains included in OCI (14) (84) 82 136 Purchases — — — 871 Net discount accretion 16 10 33 23 Principal payments and other (169) (122) (294) (229) Calls — — (10,107) — Balance, end of period $ 17,567 $ 27,994 $ 17,567 $ 27,994 Interest rate lock commitments on residential mortgages: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Balance, beginning of period $ 56 $ 57 $ 55 $ 35 Total gains included in earnings 15 10 16 32 Balance, end of period $ 71 $ 67 $ 71 $ 67 |
Summary of Assets Measured at Fair Value on Nonrecurring Basis | The following table summarizes assets measured at fair value on a nonrecurring basis at June 30, 2024 and December 31, 2023: Level 1 Level 2 Level 3 Total June 30, 2024 Individually Evaluated Loans Commercial real estate: Owner occupied $ — $ — $ 46 $ 46 Residential mortgage: First lien — — 206 206 Home equity - lines of credit — — 45 45 Total individually evaluated loans $ — $ — $ 297 $ 297 December 31, 2023 Individually Evaluated Loans Commercial real estate: Owner occupied $ — $ — $ 75 $ 75 Commercial and industrial — — 164 164 Residential mortgage: First lien — — 219 219 Home equity - lines of credit — — 56 56 Total individually evaluated loans $ — $ — $ 514 $ 514 |
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 June 30, 2024 Individually evaluated loans $ 297 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 10% - 25% discount - Management adjustments for liquidation expenses 6.78% - 12.30% discount December 31, 2023 Individually evaluated loans $ 514 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 10% - 70% discount - Management adjustments for liquidation expenses 3.30% - 12.30% discount |
Carrying Amounts and Estimated Fair Values of Financial Instruments | The following table presents carrying amounts and estimated fair values of the financial assets and liabilities at June 30, 2024 and December 31, 2023: Carrying Fair Value Level 1 Level 2 Level 3 June 30, 2024 Financial Assets Cash and due from banks $ 35,951 $ 35,951 $ 35,951 $ — $ — Interest-bearing deposits with banks 96,558 96,558 96,558 — — Restricted investments in bank stock 11,147 n/a n/a n/a n/a Investment securities 529,082 529,082 17,822 493,693 17,567 Loans held for sale 1,562 1,562 — 1,562 — Loans, net of allowance for credit losses 2,317,739 2,215,206 — — 2,215,206 Derivatives 14,113 14,113 — 14,042 71 Accrued interest receivable 14,120 14,120 — 4,891 9,229 Financial Liabilities Deposits 2,702,884 2,700,274 — 2,700,274 — Securities sold under agreements to repurchase and federal funds purchased 14,625 14,625 — 14,625 — FHLB advances and other borrowings 115,000 114,541 — 114,541 — Subordinated notes 32,128 30,631 — 30,631 — Derivatives 12,040 12,040 — 12,040 — Accrued interest payable 2,463 2,463 — 2,463 — Off-balance sheet instruments — — — — — December 31, 2023 Financial Assets Cash and due from banks $ 32,586 $ 32,586 $ 32,586 $ — $ — Interest-bearing deposits with banks 32,575 32,575 32,575 — — Restricted investments in bank stock 11,992 n/a n/a n/a n/a Investment securities 513,519 513,519 17,966 467,700 27,853 Loans held for sale 5,816 5,816 — 5,816 — Loans, net of allowance for loan losses 2,269,611 2,159,745 — — 2,159,745 Derivatives 11,383 11,383 — 11,328 55 Accrued interest receivable 13,630 13,630 — 4,987 8,643 Financial Liabilities Deposits 2,558,814 2,555,904 — 2,555,904 — Securities sold under agreements to repurchase 9,785 9,785 — 9,785 — FHLB advances and other borrowings 137,500 137,500 — 137,500 — Subordinated notes 32,093 29,887 — 29,887 — Derivatives 13,464 13,464 — 13,464 — Accrued interest payable 2,560 2,560 — 2,560 — Off-balance sheet instruments — — — — — |
MERGER (Details)
MERGER (Details) $ / shares in Units, $ in Thousands | Jul. 01, 2024 USD ($) branch $ / shares shares | Aug. 05, 2024 branch | Jun. 30, 2024 USD ($) $ / shares shares | Jun. 28, 2024 $ / shares | Dec. 31, 2023 USD ($) $ / shares shares |
Business Acquisition [Line Items] | |||||
Common stock, stated value (usd per share) | $ / shares | $ 0.05205 | $ 0.05205 | |||
Total assets | $ | $ 3,198,782 | $ 3,064,240 | |||
Total loans | $ | 2,317,739 | 2,269,611 | |||
Total deposits | $ | $ 2,702,884 | $ 2,558,814 | |||
Common stock, shares outstanding (in shares) | shares | 10,720,225 | 10,612,390 | |||
Subsequent Event | |||||
Business Acquisition [Line Items] | |||||
Full service branches | 38 | ||||
Limited purpose branches | 7 | ||||
Bank branch closures | 6 | ||||
Branch closures subject to regulatory approval | 5 | ||||
Branch closures to be consolidated | 1 | ||||
Codorus Valley | Subsequent Event | |||||
Business Acquisition [Line Items] | |||||
Full service branches | 22 | ||||
Limited purpose branches | 8 | ||||
Consideration transferred | $ | $ 233,400 | ||||
Codorus Valley | Codorus Valley | |||||
Business Acquisition [Line Items] | |||||
Total assets | $ | $ 2,200,000 | $ 2,200,000 | |||
Total loans | $ | 1,700,000 | 1,700,000 | |||
Total deposits | $ | $ 1,900,000 | $ 1,900,000 | |||
Common stock, shares outstanding (in shares) | shares | 9,751,323 | 9,642,851 | |||
Codorus Valley | Orrstown Financial Services Inc | |||||
Business Acquisition [Line Items] | |||||
Share price (usd per share) | $ / shares | $ 27.36 | ||||
Codorus Valley | Orrstown Financial Services Inc | Subsequent Event | |||||
Business Acquisition [Line Items] | |||||
Number of branches operated | 51 | ||||
Shares issued for common stock (in shares) | shares | 8,532,107 | ||||
Codorus Valley | Common Stock | Subsequent Event | |||||
Business Acquisition [Line Items] | |||||
Business combination, shares of common stock to be received by acquiree for number of shares outstanding | 0.875 | ||||
Codorus Valley | Common Stock | Codorus Valley | Subsequent Event | |||||
Business Acquisition [Line Items] | |||||
Common stock, stated value (usd per share) | $ / shares | $ 2.50 |
INVESTMENT SECURITIES - Amortiz
INVESTMENT SECURITIES - Amortized Cost and Fair Values of AFS Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 566,421 | $ 549,089 |
Gross Unrealized Gains | 1,253 | 1,317 |
Gross Unrealized Losses | 38,592 | 36,887 |
Allowance for Credit Losses | 0 | 0 |
Fair Value | 529,082 | 513,519 |
U.S. Treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 20,050 | 20,057 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 2,337 | 2,217 |
Allowance for Credit Losses | 0 | 0 |
Fair Value | 17,713 | 17,840 |
U.S. Government Agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 3,444 | 3,994 |
Gross Unrealized Gains | 129 | 157 |
Gross Unrealized Losses | 0 | 0 |
Allowance for Credit Losses | 0 | 0 |
Fair Value | 3,573 | 4,151 |
States and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 221,404 | 221,624 |
Gross Unrealized Gains | 7 | 28 |
Gross Unrealized Losses | 20,965 | 18,530 |
Allowance for Credit Losses | 0 | 0 |
Fair Value | 200,446 | 203,122 |
GSE residential MBSs | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 60,430 | 61,669 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 3,587 | 4,037 |
Allowance for Credit Losses | 0 | 0 |
Fair Value | 56,843 | 57,632 |
GSE commercial MBSs | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 3,778 | 4,387 |
Gross Unrealized Gains | 311 | 356 |
Gross Unrealized Losses | 0 | 0 |
Allowance for Credit Losses | 0 | 0 |
Fair Value | 4,089 | 4,743 |
GSE residential CMOs | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 123,116 | 79,284 |
Gross Unrealized Gains | 71 | 18 |
Gross Unrealized Losses | 6,944 | 6,200 |
Allowance for Credit Losses | 0 | 0 |
Fair Value | 116,243 | 73,102 |
Non-agency CMOs | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 34,704 | 48,162 |
Gross Unrealized Gains | 248 | 316 |
Gross Unrealized Losses | 3,544 | 3,809 |
Allowance for Credit Losses | 0 | 0 |
Fair Value | 31,408 | 44,669 |
Asset-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 99,386 | 109,786 |
Gross Unrealized Gains | 487 | 442 |
Gross Unrealized Losses | 1,215 | 2,094 |
Allowance for Credit Losses | 0 | 0 |
Fair Value | 98,658 | 108,134 |
Other | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 109 | 126 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Allowance for Credit Losses | 0 | 0 |
Fair Value | $ 109 | $ 126 |
INVESTMENT SECURITIES - Summary
INVESTMENT SECURITIES - Summary of AFS Securities with Unrealized Losses (Details) $ in Thousands | Jun. 30, 2024 USD ($) security | Dec. 31, 2023 USD ($) security |
Number of Securities | ||
Less Than 12 Months | security | 20 | 12 |
12 Months or More | security | 91 | 91 |
Total | security | 111 | 103 |
Fair Value | ||
Less Than 12 Months | $ 63,667 | $ 27,525 |
12 Months or More | 405,575 | 422,911 |
Total | 469,242 | 450,436 |
Unrealized Losses | ||
Less Than 12 Months | 427 | 326 |
12 Months or More | 38,165 | 36,561 |
Total | $ 38,592 | $ 36,887 |
U.S. Treasury securities | ||
Number of Securities | ||
Less Than 12 Months | security | 0 | 0 |
12 Months or More | security | 3 | 3 |
Total | security | 3 | 3 |
Fair Value | ||
Less Than 12 Months | $ 0 | $ 0 |
12 Months or More | 17,713 | 17,840 |
Total | 17,713 | 17,840 |
Unrealized Losses | ||
Less Than 12 Months | 0 | 0 |
12 Months or More | 2,337 | 2,217 |
Total | $ 2,337 | $ 2,217 |
States and political subdivisions | ||
Number of Securities | ||
Less Than 12 Months | security | 6 | 4 |
12 Months or More | security | 42 | 40 |
Total | security | 48 | 44 |
Fair Value | ||
Less Than 12 Months | $ 2,029 | $ 2,419 |
12 Months or More | 197,920 | 199,933 |
Total | 199,949 | 202,352 |
Unrealized Losses | ||
Less Than 12 Months | 45 | 53 |
12 Months or More | 20,920 | 18,477 |
Total | $ 20,965 | $ 18,530 |
GSE residential MBSs | ||
Number of Securities | ||
Less Than 12 Months | security | 0 | 0 |
12 Months or More | security | 15 | 15 |
Total | security | 15 | 15 |
Fair Value | ||
Less Than 12 Months | $ 0 | $ 0 |
12 Months or More | 56,843 | 57,632 |
Total | 56,843 | 57,632 |
Unrealized Losses | ||
Less Than 12 Months | 0 | 0 |
12 Months or More | 3,587 | 4,037 |
Total | $ 3,587 | $ 4,037 |
GSE residential CMOs | ||
Number of Securities | ||
Less Than 12 Months | security | 10 | 4 |
12 Months or More | security | 16 | 14 |
Total | security | 26 | 18 |
Fair Value | ||
Less Than 12 Months | $ 42,061 | $ 12,710 |
12 Months or More | 59,426 | 56,765 |
Total | 101,487 | 69,475 |
Unrealized Losses | ||
Less Than 12 Months | 326 | 186 |
12 Months or More | 6,618 | 6,014 |
Total | $ 6,944 | $ 6,200 |
Non-agency CMOs | ||
Number of Securities | ||
Less Than 12 Months | security | 1 | 3 |
12 Months or More | security | 5 | 4 |
Total | security | 6 | 7 |
Fair Value | ||
Less Than 12 Months | $ 929 | $ 11,531 |
12 Months or More | 22,280 | 16,334 |
Total | 23,209 | 27,865 |
Unrealized Losses | ||
Less Than 12 Months | 2 | 83 |
12 Months or More | 3,542 | 3,726 |
Total | $ 3,544 | $ 3,809 |
Asset-backed | ||
Number of Securities | ||
Less Than 12 Months | security | 3 | 1 |
12 Months or More | security | 10 | 15 |
Total | security | 13 | 16 |
Fair Value | ||
Less Than 12 Months | $ 18,648 | $ 865 |
12 Months or More | 51,393 | 74,407 |
Total | 70,041 | 75,272 |
Unrealized Losses | ||
Less Than 12 Months | 54 | 4 |
12 Months or More | 1,161 | 2,090 |
Total | $ 1,215 | $ 2,094 |
INVESTMENT SECURITIES - Narrati
INVESTMENT SECURITIES - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 USD ($) security | Jun. 30, 2023 USD ($) security | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Debt Securities, Available-for-sale [Line Items] | ||||||
Debt securities, available-for-sale, unrealized loss position, allowance for credit loss | $ 0 | $ 0 | $ 0 | $ 0 | ||
Gross losses | $ 12,000 | $ 2,000 | 17,000 | $ 10,000 | ||
Investment securities sold | security | 0 | 0 | ||||
Collateral Pledged | ||||||
Debt Securities, Available-for-sale [Line Items] | ||||||
Investment securities pledged to secure public funds, fair value | $ 480,700,000 | $ 480,700,000 | $ 439,700,000 | |||
Equity Securities | ||||||
Debt Securities, Available-for-sale [Line Items] | ||||||
Gains (losses) on investments | $ (12,000) |
INVESTMENT SECURITIES - Schedul
INVESTMENT SECURITIES - Schedule of Amortized Cost and Fair Values of AFS Securities by Contractual Maturity (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Amortized Cost | |
Due in one year or less | $ 0 |
Due after one year through five years | 36,406 |
Due after five years through ten years | 58,620 |
Due after ten years | 149,981 |
CMOs and MBSs | 222,028 |
Asset-backed | 99,386 |
Amortized Cost | 566,421 |
Fair Value | |
Due in one year or less | 0 |
Due after one year through five years | 32,567 |
Due after five years through ten years | 53,071 |
Due after ten years | 136,203 |
CMOs and MBSs | 208,583 |
Asset-backed | 98,658 |
Total Fair Value | $ 529,082 |
INVESTMENT SECURITIES - Proceed
INVESTMENT SECURITIES - Proceeds from Sales of AFS Securities and Gross Gains and Gross Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds from sale of investment securities | $ 0 | $ 0 | $ 0 | $ 0 |
Gross gains | 0 | 0 | 0 | 0 |
Gross losses | $ 12 | $ 2 | $ 17 | $ 10 |
LOANS AND ALLOWANCE FOR CREDI_3
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Narrative (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 USD ($) loan | Dec. 31, 2023 USD ($) loan | |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Loans | $ 2,347,603,000 | $ 2,298,313,000 |
SBA, loan guarantee, percentage | 100% | 100% |
Amount of loan on which review have been made annually | $ 1,000,000 | |
Amount of loan on which reviews require approval | $ 500,000 | |
Loans that are deemed impaired, number of days past due (more than) | 90 days | |
Appraisals, required period interval | 18 months | |
Minimum amount on which annual updated appraisals for classified loans is required | $ 250,000 | |
Total nonaccrual loans | $ 8,363,000 | $ 25,527,000 |
Maximum | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Percentage of loan-to-value ratio upon loan origination | 80% | |
Percentage of loan-to-value ratios of the value of the real estate taken as collateral | 85% | |
Percentage of strong loan-to-value (or lower) | 70% | |
Commercial | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Total nonaccrual loans | $ 1,600,000 | 13,400,000 |
Commercial and industrial | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Loans | 374,976,000 | 367,085,000 |
Total nonaccrual loans | 29,000 | $ 672,000 |
Commercial and industrial | Commercial | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Collateral dependent loans, appraised collateral values is below amortized cost basis | loan | 1 | |
Installment and other loans | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Loans | 8,713,000 | $ 9,774,000 |
Total nonaccrual loans | $ 18,000 | $ 39,000 |
Installment and other loans | Consumer | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Collateral dependent loans, appraised collateral values is below amortized cost basis | loan | 1 | 1 |
Acquisition and development | Commercial and land development | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Loans | $ 129,883,000 | $ 115,249,000 |
Total nonaccrual loans | 0 | 1,361,000 |
Proceeds from collection of finance receivables | 1,300,000 | |
SBA | Commercial | 2021 Payment Deferrals | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
PPP Loan processing fee income | 43,000 | |
PPP loans, allowance | 0 | 0 |
SBA | Commercial and industrial | SBA PPP Loans | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Loans | $ 5,200,000 | $ 5,700,000 |
LOANS AND ALLOWANCE FOR CREDI_4
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Summary of Loan Portfolio, Excluding Residential Loans Held for Sale (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | $ 2,347,603 | $ 2,298,313 |
Commercial real estate | Owner occupied | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 371,301 | 373,757 |
Commercial real estate | Non-owner occupied | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 710,477 | 694,638 |
Commercial real estate | Multi-family | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 151,542 | 150,675 |
Commercial real estate | Non-owner occupied residential | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 89,156 | 95,040 |
Acquisition and development | 1-4 family residential construction | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 32,439 | 24,516 |
Acquisition and development | Commercial and land development | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 129,883 | 115,249 |
Commercial and industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 374,976 | 367,085 |
Municipal | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 10,594 | 9,812 |
Residential mortgage | First lien | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 271,153 | 266,239 |
Residential mortgage | Home equity - term | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 4,633 | 5,078 |
Residential mortgage | Home equity - lines of credit | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 192,736 | 186,450 |
Installment and other loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | $ 8,713 | $ 9,774 |
LOANS AND ALLOWANCE FOR CREDI_5
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Amortized Cost of the Loan Portfolio, by Year of Origination, Loan Class, and Credit Quality (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Total | $ 2,347,603 | $ 2,298,313 |
Commercial real estate | Owner occupied | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 16,172 | 50,829 |
Year two | 55,025 | 113,115 |
Year three | 109,774 | 72,405 |
Year four | 73,936 | 41,849 |
Year five | 27,516 | 21,251 |
Prior | 83,100 | 69,055 |
Revolving Loans Amortized Basis | 5,778 | 5,253 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 371,301 | 373,757 |
Current Period Gross Charge-offs | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 12 | 0 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 12 | 0 |
Commercial real estate | Non-owner occupied | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 38,792 | 82,879 |
Year two | 79,834 | 102,212 |
Year three | 99,324 | 235,031 |
Year four | 227,409 | 84,176 |
Year five | 82,064 | 63,176 |
Prior | 181,549 | 125,787 |
Revolving Loans Amortized Basis | 643 | 509 |
Revolving Loans Converted to Term | 862 | 868 |
Total | 710,477 | 694,638 |
Current Period Gross Charge-offs | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 0 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 0 |
Commercial real estate | Multi-family | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 5,844 | 2,701 |
Year two | 2,823 | 61,805 |
Year three | 62,959 | 28,541 |
Year four | 28,489 | 12,694 |
Year five | 12,511 | 7,681 |
Prior | 38,570 | 37,136 |
Revolving Loans Amortized Basis | 346 | 117 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 151,542 | 150,675 |
Current Period Gross Charge-offs | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 0 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 0 |
Commercial real estate | Non-owner occupied residential | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 2,901 | 10,077 |
Year two | 10,158 | 20,473 |
Year three | 20,153 | 17,139 |
Year four | 16,492 | 9,435 |
Year five | 6,810 | 6,444 |
Prior | 32,243 | 30,342 |
Revolving Loans Amortized Basis | 399 | 1,130 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 89,156 | 95,040 |
Current Period Gross Charge-offs | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 12 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 12 |
Acquisition and development | 1-4 family residential construction | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 14,045 | 19,042 |
Year two | 17,400 | 5,400 |
Year three | 865 | 74 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 0 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 129 | 0 |
Total | 32,439 | 24,516 |
Current Period Gross Charge-offs | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 0 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 0 |
Acquisition and development | Commercial and land development | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 15,213 | 28,829 |
Year two | 39,209 | 48,453 |
Year three | 43,482 | 9,847 |
Year four | 5,455 | 10,928 |
Year five | 10,606 | 110 |
Prior | 1,567 | 3,572 |
Revolving Loans Amortized Basis | 5,533 | 6,574 |
Revolving Loans Converted to Term | 8,818 | 6,936 |
Total | 129,883 | 115,249 |
Current Period Gross Charge-offs | ||
Year one | 0 | 0 |
Year two | 23 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 0 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 23 | 0 |
Commercial and Industrial | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 30,700 | 67,735 |
Year two | 60,746 | 73,990 |
Year three | 63,069 | 76,163 |
Year four | 63,094 | 24,598 |
Year five | 21,762 | 11,310 |
Prior | 27,752 | 21,811 |
Revolving Loans Amortized Basis | 104,604 | 89,956 |
Revolving Loans Converted to Term | 3,249 | 1,522 |
Total | 374,976 | 367,085 |
Current Period Gross Charge-offs | ||
Year one | 0 | 0 |
Year two | 0 | 161 |
Year three | 54 | 106 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 6 | 8 |
Revolving Loans Amortized Basis | 0 | 473 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 60 | 748 |
Municipal | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 1,577 | 0 |
Year two | 0 | 0 |
Year three | 0 | 3,403 |
Year four | 3,124 | 0 |
Year five | 0 | 0 |
Prior | 5,893 | 6,409 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 10,594 | 9,812 |
Current Period Gross Charge-offs | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 0 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 0 |
Residential mortgage | First lien | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 18,111 | 43,641 |
Year two | 44,351 | 71,311 |
Year three | 65,727 | 34,704 |
Year four | 33,399 | 8,056 |
Year five | 7,856 | 7,585 |
Prior | 101,079 | 100,304 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 630 | 638 |
Total | 271,153 | 266,239 |
Current Period Gross Charge-offs | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 58 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 58 |
Residential mortgage | First lien | Performing | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 18,111 | 43,641 |
Year two | 44,351 | 71,311 |
Year three | 65,479 | 34,704 |
Year four | 33,167 | 8,056 |
Year five | 7,856 | 7,465 |
Prior | 98,520 | 97,943 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 630 | 638 |
Total | 268,114 | 263,758 |
Residential mortgage | First lien | Nonperforming | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 248 | 0 |
Year four | 232 | 0 |
Year five | 0 | 120 |
Prior | 2,559 | 2,361 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 3,039 | 2,481 |
Residential mortgage | Home equity - term | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 183 | 607 |
Year two | 473 | 732 |
Year three | 674 | 90 |
Year four | 71 | 426 |
Year five | 390 | 115 |
Prior | 2,842 | 3,108 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 4,633 | 5,078 |
Current Period Gross Charge-offs | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 0 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 0 |
Residential mortgage | Home equity - term | Performing | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 183 | 607 |
Year two | 473 | 732 |
Year three | 674 | 90 |
Year four | 71 | 426 |
Year five | 390 | 115 |
Prior | 2,840 | 3,105 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 4,631 | 5,075 |
Residential mortgage | Home equity - term | Nonperforming | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 2 | 3 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 2 | 3 |
Residential mortgage | Home equity - lines of credit | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 0 |
Revolving Loans Amortized Basis | 191,985 | 109,263 |
Revolving Loans Converted to Term | 751 | 77,187 |
Total | 192,736 | 186,450 |
Current Period Gross Charge-offs | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 0 |
Revolving Loans Amortized Basis | 50 | 40 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 50 | 40 |
Residential mortgage | Home equity - lines of credit | Performing | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 0 |
Revolving Loans Amortized Basis | 190,786 | 107,967 |
Revolving Loans Converted to Term | 535 | 77,171 |
Total | 191,321 | 185,138 |
Residential mortgage | Home equity - lines of credit | Nonperforming | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 0 |
Revolving Loans Amortized Basis | 1,199 | 1,296 |
Revolving Loans Converted to Term | 216 | 16 |
Total | 1,415 | 1,312 |
Installment and other loans | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 593 | 761 |
Year two | 571 | 413 |
Year three | 316 | 332 |
Year four | 281 | 106 |
Year five | 78 | 703 |
Prior | 863 | 959 |
Revolving Loans Amortized Basis | 6,011 | 6,500 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 8,713 | 9,774 |
Current Period Gross Charge-offs | ||
Year one | 74 | 181 |
Year two | 12 | 24 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 4 |
Prior | 18 | 10 |
Revolving Loans Amortized Basis | 14 | 28 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 118 | 247 |
Installment and other loans | Performing | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 593 | 758 |
Year two | 568 | 413 |
Year three | 316 | 332 |
Year four | 281 | 106 |
Year five | 78 | 670 |
Prior | 848 | 947 |
Revolving Loans Amortized Basis | 6,011 | 6,500 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 8,695 | 9,726 |
Installment and other loans | Nonperforming | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 3 |
Year two | 3 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 33 |
Prior | 15 | 12 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 18 | 48 |
Pass | Commercial real estate | Owner occupied | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 16,172 | 50,829 |
Year two | 54,321 | 103,192 |
Year three | 99,774 | 69,888 |
Year four | 68,370 | 21,232 |
Year five | 20,368 | 21,251 |
Prior | 78,843 | 62,634 |
Revolving Loans Amortized Basis | 5,518 | 4,941 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 343,366 | 333,967 |
Pass | Commercial real estate | Non-owner occupied | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 38,792 | 82,879 |
Year two | 79,834 | 102,212 |
Year three | 99,324 | 235,031 |
Year four | 227,068 | 83,652 |
Year five | 82,064 | 63,176 |
Prior | 176,728 | 120,696 |
Revolving Loans Amortized Basis | 643 | 509 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 704,453 | 688,155 |
Pass | Commercial real estate | Multi-family | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 5,844 | 2,701 |
Year two | 2,823 | 61,805 |
Year three | 61,840 | 28,541 |
Year four | 28,489 | 12,694 |
Year five | 12,511 | 7,437 |
Prior | 38,021 | 33,895 |
Revolving Loans Amortized Basis | 346 | 117 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 149,874 | 147,190 |
Pass | Commercial real estate | Non-owner occupied residential | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 2,901 | 10,075 |
Year two | 10,156 | 20,473 |
Year three | 20,153 | 16,947 |
Year four | 16,307 | 7,974 |
Year five | 6,810 | 6,444 |
Prior | 31,235 | 28,319 |
Revolving Loans Amortized Basis | 399 | 1,130 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 87,961 | 91,362 |
Pass | Acquisition and development | 1-4 family residential construction | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 13,971 | 18,820 |
Year two | 17,179 | 5,400 |
Year three | 865 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 0 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 129 | 0 |
Total | 32,144 | 24,220 |
Pass | Acquisition and development | Commercial and land development | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 15,213 | 28,829 |
Year two | 39,209 | 48,453 |
Year three | 43,482 | 9,847 |
Year four | 5,455 | 9,927 |
Year five | 9,826 | 110 |
Prior | 1,567 | 1,774 |
Revolving Loans Amortized Basis | 5,533 | 6,574 |
Revolving Loans Converted to Term | 8,818 | 6,936 |
Total | 129,103 | 112,450 |
Pass | Commercial and Industrial | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 30,700 | 67,735 |
Year two | 60,734 | 69,670 |
Year three | 63,069 | 67,117 |
Year four | 57,202 | 24,580 |
Year five | 21,753 | 10,753 |
Prior | 26,589 | 20,775 |
Revolving Loans Amortized Basis | 95,701 | 86,475 |
Revolving Loans Converted to Term | 3,249 | 1,522 |
Total | 358,997 | 348,627 |
Pass | Municipal | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 1,577 | 0 |
Year two | 0 | 0 |
Year three | 0 | 3,403 |
Year four | 3,124 | 0 |
Year five | 0 | 0 |
Prior | 5,893 | 6,409 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 10,594 | 9,812 |
Special mention | Commercial real estate | Owner occupied | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 2,517 |
Year four | 1,370 | 1,176 |
Year five | 1,154 | 0 |
Prior | 508 | 1,314 |
Revolving Loans Amortized Basis | 165 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 3,197 | 5,007 |
Special mention | Commercial real estate | Non-owner occupied | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 341 | 524 |
Year five | 0 | 0 |
Prior | 2,124 | 2,112 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 2,465 | 2,636 |
Special mention | Commercial real estate | Multi-family | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 1,119 | 0 |
Year four | 0 | 0 |
Year five | 0 | 244 |
Prior | 237 | 2,008 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 1,356 | 2,252 |
Special mention | Commercial real estate | Non-owner occupied residential | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 504 | 731 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 504 | 731 |
Special mention | Acquisition and development | 1-4 family residential construction | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 74 | 222 |
Year two | 221 | 0 |
Year three | 0 | 74 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 0 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 295 | 296 |
Special mention | Acquisition and development | Commercial and land development | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 1,001 |
Year five | 780 | 0 |
Prior | 0 | 437 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 780 | 1,438 |
Special mention | Commercial and Industrial | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 4,251 |
Year three | 0 | 4,364 |
Year four | 31 | 11 |
Year five | 7 | 552 |
Prior | 946 | 356 |
Revolving Loans Amortized Basis | 320 | 2,258 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 1,304 | 11,792 |
Substandard - Non-IEL | Commercial real estate | Owner occupied | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 704 | 9,923 |
Year three | 10,000 | 0 |
Year four | 2,957 | 6,075 |
Year five | 5,994 | 0 |
Prior | 1,538 | 2,687 |
Revolving Loans Amortized Basis | 95 | 312 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 21,288 | 18,997 |
Substandard - Non-IEL | Commercial real estate | Non-owner occupied | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 2,697 | 2,739 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 862 | 868 |
Total | 3,559 | 3,607 |
Substandard - Non-IEL | Commercial real estate | Multi-family | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 0 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 0 |
Substandard - Non-IEL | Commercial real estate | Non-owner occupied residential | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 425 | 375 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 425 | 375 |
Substandard - Non-IEL | Acquisition and development | 1-4 family residential construction | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 0 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 0 |
Substandard - Non-IEL | Acquisition and development | Commercial and land development | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 0 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 0 |
Substandard - Non-IEL | Commercial and Industrial | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 4,682 |
Year four | 5,861 | 0 |
Year five | 0 | 5 |
Prior | 217 | 225 |
Revolving Loans Amortized Basis | 8,568 | 1,082 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 14,646 | 5,994 |
Substandard - IEL | Commercial real estate | Owner occupied | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 1,239 | 13,366 |
Year five | 0 | 0 |
Prior | 2,211 | 2,420 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 3,450 | 15,786 |
Substandard - IEL | Commercial real estate | Non-owner occupied | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 240 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 240 |
Substandard - IEL | Commercial real estate | Multi-family | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 312 | 1,233 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 312 | 1,233 |
Substandard - IEL | Commercial real estate | Non-owner occupied residential | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 2 |
Year two | 2 | 0 |
Year three | 0 | 192 |
Year four | 185 | 1,461 |
Year five | 0 | 0 |
Prior | 79 | 917 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 266 | 2,572 |
Substandard - IEL | Acquisition and development | 1-4 family residential construction | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 0 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 0 |
Substandard - IEL | Acquisition and development | Commercial and land development | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Year five | 0 | 0 |
Prior | 0 | 1,361 |
Revolving Loans Amortized Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 1,361 |
Substandard - IEL | Commercial and Industrial | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Year one | 0 | 0 |
Year two | 12 | 69 |
Year three | 0 | 0 |
Year four | 0 | 7 |
Year five | 2 | 0 |
Prior | 0 | 455 |
Revolving Loans Amortized Basis | 15 | 141 |
Revolving Loans Converted to Term | 0 | 0 |
Total | $ 29 | $ 672 |
LOANS AND ALLOWANCE FOR CREDI_6
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Amortized Cost of Nonaccrual Loans By Class, With And Without Loan Reserves (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual loans with a related ACL | $ 3 | $ 71 |
Nonaccrual loans with no related ACL | 8,360 | 25,456 |
Loans Past Due 90+ Accruing | 187 | 66 |
Total nonaccrual loans | 8,363 | 25,527 |
Commercial real estate | Owner occupied | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual loans with a related ACL | 0 | 0 |
Nonaccrual loans with no related ACL | 3,450 | 15,786 |
Loans Past Due 90+ Accruing | 0 | 0 |
Total nonaccrual loans | 3,450 | 15,786 |
Commercial real estate | Non-owner occupied | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual loans with a related ACL | 0 | 0 |
Nonaccrual loans with no related ACL | 0 | 240 |
Loans Past Due 90+ Accruing | 0 | 0 |
Total nonaccrual loans | 0 | 240 |
Commercial real estate | Multi-family | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual loans with a related ACL | 0 | 0 |
Nonaccrual loans with no related ACL | 312 | 1,233 |
Loans Past Due 90+ Accruing | 0 | 0 |
Total nonaccrual loans | 312 | 1,233 |
Commercial real estate | Non-owner occupied residential | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual loans with a related ACL | 0 | 0 |
Nonaccrual loans with no related ACL | 266 | 2,572 |
Loans Past Due 90+ Accruing | 0 | 0 |
Total nonaccrual loans | 266 | 2,572 |
Acquisition and development | Commercial and land development | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual loans with a related ACL | 0 | 0 |
Nonaccrual loans with no related ACL | 0 | 1,361 |
Loans Past Due 90+ Accruing | 0 | 0 |
Total nonaccrual loans | 0 | 1,361 |
Commercial and industrial | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual loans with a related ACL | 0 | 68 |
Nonaccrual loans with no related ACL | 29 | 604 |
Loans Past Due 90+ Accruing | 0 | 0 |
Total nonaccrual loans | 29 | 672 |
Residential mortgage | First lien | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual loans with a related ACL | 0 | 0 |
Nonaccrual loans with no related ACL | 2,871 | 2,309 |
Loans Past Due 90+ Accruing | 187 | 66 |
Total nonaccrual loans | 2,871 | 2,309 |
Residential mortgage | Home equity - term | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual loans with a related ACL | 0 | 0 |
Nonaccrual loans with no related ACL | 2 | 3 |
Loans Past Due 90+ Accruing | 0 | 0 |
Total nonaccrual loans | 2 | 3 |
Residential mortgage | Home equity - lines of credit | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual loans with a related ACL | 0 | 0 |
Nonaccrual loans with no related ACL | 1,415 | 1,312 |
Loans Past Due 90+ Accruing | 0 | 0 |
Total nonaccrual loans | 1,415 | 1,312 |
Installment and other loans | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual loans with a related ACL | 3 | 3 |
Nonaccrual loans with no related ACL | 15 | 36 |
Loans Past Due 90+ Accruing | 0 | 0 |
Total nonaccrual loans | $ 18 | $ 39 |
LOANS AND ALLOWANCE FOR CREDI_7
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Amortized Cost Basis of Collateral Dependent Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | $ 2,347,603 | $ 2,298,313 |
Business Assets | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 15 | 2 |
Commercial Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 4,027 | 19,907 |
Equipment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 20 | 612 |
Land | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 1,361 |
Residential Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 4,214 | 3,546 |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Total Collateral | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 8,276 | 25,428 |
Commercial real estate | Owner occupied | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 371,301 | 373,757 |
Commercial real estate | Owner occupied | Business Assets | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Owner occupied | Commercial Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 3,449 | 15,786 |
Commercial real estate | Owner occupied | Equipment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Owner occupied | Land | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Owner occupied | Residential Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Owner occupied | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Owner occupied | Total Collateral | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 3,449 | 15,786 |
Commercial real estate | Non-owner occupied | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 710,477 | 694,638 |
Commercial real estate | Non-owner occupied | Business Assets | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Non-owner occupied | Commercial Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 240 |
Commercial real estate | Non-owner occupied | Equipment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Non-owner occupied | Land | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Non-owner occupied | Residential Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Non-owner occupied | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Non-owner occupied | Total Collateral | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 240 |
Commercial real estate | Multi-family | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 151,542 | 150,675 |
Commercial real estate | Multi-family | Business Assets | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Multi-family | Commercial Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 312 | 1,233 |
Commercial real estate | Multi-family | Equipment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Multi-family | Land | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Multi-family | Residential Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Multi-family | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Multi-family | Total Collateral | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 312 | 1,233 |
Commercial real estate | Non-owner occupied residential | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 89,156 | 95,040 |
Commercial real estate | Non-owner occupied residential | Business Assets | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Non-owner occupied residential | Commercial Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 266 | 2,572 |
Commercial real estate | Non-owner occupied residential | Equipment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Non-owner occupied residential | Land | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Non-owner occupied residential | Residential Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Non-owner occupied residential | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Non-owner occupied residential | Total Collateral | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 266 | 2,572 |
Acquisition and development | Commercial and land development | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 129,883 | 115,249 |
Acquisition and development | Commercial and land development | Business Assets | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Acquisition and development | Commercial and land development | Commercial Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Acquisition and development | Commercial and land development | Equipment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Acquisition and development | Commercial and land development | Land | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 1,361 |
Acquisition and development | Commercial and land development | Residential Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Acquisition and development | Commercial and land development | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Acquisition and development | Commercial and land development | Total Collateral | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 1,361 |
Commercial and industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 374,976 | 367,085 |
Commercial and industrial | Business Assets | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 15 | 2 |
Commercial and industrial | Commercial Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 76 |
Commercial and industrial | Equipment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 17 | 594 |
Commercial and industrial | Land | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial and industrial | Residential Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial and industrial | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Commercial and industrial | Total Collateral | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 32 | 672 |
Residential mortgage | First lien | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 271,153 | 266,239 |
Residential mortgage | First lien | Business Assets | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | First lien | Commercial Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | First lien | Equipment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | First lien | Land | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | First lien | Residential Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 2,797 | 2,231 |
Residential mortgage | First lien | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | First lien | Total Collateral | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 2,797 | 2,231 |
Residential mortgage | Home equity - term | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 4,633 | 5,078 |
Residential mortgage | Home equity - term | Business Assets | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | Home equity - term | Commercial Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | Home equity - term | Equipment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | Home equity - term | Land | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | Home equity - term | Residential Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 2 | 3 |
Residential mortgage | Home equity - term | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | Home equity - term | Total Collateral | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 2 | 3 |
Residential mortgage | Home equity - lines of credit | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 192,736 | 186,450 |
Residential mortgage | Home equity - lines of credit | Business Assets | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | Home equity - lines of credit | Commercial Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | Home equity - lines of credit | Equipment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | Home equity - lines of credit | Land | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | Home equity - lines of credit | Residential Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 1,415 | 1,312 |
Residential mortgage | Home equity - lines of credit | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | Home equity - lines of credit | Total Collateral | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 1,415 | 1,312 |
Installment and other loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 8,713 | 9,774 |
Installment and other loans | Business Assets | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Installment and other loans | Commercial Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Installment and other loans | Equipment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 3 | 18 |
Installment and other loans | Land | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Installment and other loans | Residential Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Installment and other loans | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 0 | 0 |
Installment and other loans | Total Collateral | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | $ 3 | $ 18 |
LOANS AND ALLOWANCE FOR CREDI_8
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Loan Portfolio Summarized by Aging Categories (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | $ 2,347,603 | $ 2,298,313 |
30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 2,325 | 21,385 |
60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 5,191 | 1,257 |
90+ Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 3,388 | 2,513 |
Total Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 10,904 | 25,155 |
Loans Not Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 2,336,699 | 2,273,158 |
Commercial real estate | Owner occupied | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 371,301 | 373,757 |
Commercial real estate | Owner occupied | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 371,301 | 373,757 |
Commercial real estate | Owner occupied | 30-59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 328 | 13,852 |
Commercial real estate | Owner occupied | 60-89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Owner occupied | 90+ Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 1,327 | 117 |
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 | 1,655 | 13,969 |
Commercial real estate | Owner occupied | Loans Not Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 369,646 | 359,788 |
Commercial real estate | Non-owner occupied | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 710,477 | 694,638 |
Commercial real estate | Non-owner occupied | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 710,477 | 694,638 |
Commercial real estate | Non-owner occupied | 30-59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 0 | 152 |
Commercial real estate | Non-owner occupied | 60-89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Non-owner occupied | 90+ Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 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 | 0 | 152 |
Commercial real estate | Non-owner occupied | Loans Not Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 710,477 | 694,486 |
Commercial real estate | Multi-family | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 151,542 | 150,675 |
Commercial real estate | Multi-family | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 151,542 | 150,675 |
Commercial real estate | Multi-family | 30-59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Multi-family | 60-89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate | Multi-family | 90+ Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 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 | 0 | 0 |
Commercial real estate | Multi-family | Loans Not Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 151,542 | 150,675 |
Commercial real estate | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 89,156 | 95,040 |
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] | ||
Loans | 89,156 | 95,040 |
Commercial real estate | Non-owner occupied residential | 30-59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 79 | 0 |
Commercial real estate | Non-owner occupied residential | 60-89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 69 | 0 |
Commercial real estate | Non-owner occupied residential | 90+ Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 185 | 192 |
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 | 333 | 192 |
Commercial real estate | Non-owner occupied residential | Loans Not Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 88,823 | 94,848 |
Acquisition and development | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 32,439 | 24,516 |
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] | ||
Loans | 32,439 | 24,516 |
Acquisition and development | 1-4 family residential construction | 30-59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 0 | 0 |
Acquisition and development | 1-4 family residential construction | 60-89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 0 | 0 |
Acquisition and development | 1-4 family residential construction | 90+ Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 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 | 0 | 0 |
Acquisition and development | 1-4 family residential construction | Loans Not Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 32,439 | 24,516 |
Acquisition and development | Commercial and land development | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 129,883 | 115,249 |
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] | ||
Loans | 129,883 | 115,249 |
Acquisition and development | Commercial and land development | 30-59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 0 | 16 |
Acquisition and development | Commercial and land development | 60-89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 0 | 0 |
Acquisition and development | Commercial and land development | 90+ Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 0 | 0 |
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 | 0 | 16 |
Acquisition and development | Commercial and land development | Loans Not Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 129,883 | 115,233 |
Commercial and industrial | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 374,976 | 367,085 |
Commercial and industrial | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 374,976 | 367,085 |
Commercial and industrial | 30-59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 168 | 27 |
Commercial and industrial | 60-89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 3,022 | 69 |
Commercial and industrial | 90+ Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 33 | 625 |
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 | 3,223 | 721 |
Commercial and industrial | Loans Not Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 371,753 | 366,364 |
Municipal | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 10,594 | 9,812 |
Municipal | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 10,594 | 9,812 |
Municipal | 30-59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 0 | 0 |
Municipal | 60-89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 0 | 0 |
Municipal | 90+ Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 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 | 0 | 0 |
Municipal | Loans Not Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 10,594 | 9,812 |
Residential mortgage | First lien | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 271,153 | 266,239 |
Residential mortgage | First lien | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 271,153 | 266,239 |
Residential mortgage | First lien | 30-59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 976 | 5,433 |
Residential mortgage | First lien | 60-89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 935 | 1,058 |
Residential mortgage | First lien | 90+ Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 1,078 | 721 |
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 | 2,989 | 7,212 |
Residential mortgage | First lien | Loans Not Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 268,164 | 259,027 |
Residential mortgage | Home equity - term | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 4,633 | 5,078 |
Residential mortgage | Home equity - term | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 4,633 | 5,078 |
Residential mortgage | Home equity - term | 30-59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 0 | 20 |
Residential mortgage | Home equity - term | 60-89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 0 | 2 |
Residential mortgage | Home equity - term | 90+ Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 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 | 0 | 22 |
Residential mortgage | Home equity - term | Loans Not Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 4,633 | 5,056 |
Residential mortgage | Home equity - lines of credit | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 192,736 | 186,450 |
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] | ||
Loans | 192,736 | 186,450 |
Residential mortgage | Home equity - lines of credit | 30-59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 683 | 1,801 |
Residential mortgage | Home equity - lines of credit | 60-89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 1,120 | 100 |
Residential mortgage | Home equity - lines of credit | 90+ Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 762 | 839 |
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 | 2,565 | 2,740 |
Residential mortgage | Home equity - lines of credit | Loans Not Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 190,171 | 183,710 |
Installment and other loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 8,713 | 9,774 |
Installment and other loans | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 8,713 | 9,774 |
Installment and other loans | 30-59 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 91 | 84 |
Installment and other loans | 60-89 Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 45 | 28 |
Installment and other loans | 90+ Days Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 3 | 19 |
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 | 139 | 131 |
Installment and other loans | Loans Not Past Due | Financial Asset, Other than Financial Asset Acquired with Credit Deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | $ 8,574 | $ 9,643 |
LOANS AND ALLOWANCE FOR CREDI_9
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Activity in Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jan. 01, 2023 | |
Activity in allowance for loan losses | |||||
Balance, beginning of period | $ 29,165 | $ 28,702 | |||
Balance, beginning of period | $ 28,364 | $ 25,178 | |||
Impact of adopting ASC 326 | 29,864 | 29,864 | |||
Provision for credit losses | 812 | 399 | 1,110 | 1,128 | |
Provision for credit losses | 1,233 | ||||
Provision for loan losses | 399 | 1,110 | 1,128 | ||
Charge-offs | (164) | (572) | (263) | (714) | |
Recoveries | 51 | 192 | 192 | 368 | |
Balance end of period | 29,864 | 29,864 | |||
Balance, end of period | 28,383 | 28,383 | |||
Cumulative Effect, Period of Adoption, Adjustment | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | 2,423 | ||||
Impact of adopting ASC 326 | $ 2,400 | ||||
Unallocated | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | 0 | 0 | |||
Balance, beginning of period | 0 | 245 | |||
Impact of adopting ASC 326 | 0 | 0 | |||
Provision for credit losses | 0 | ||||
Provision for credit losses | 0 | ||||
Provision for loan losses | 0 | 0 | |||
Charge-offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Balance end of period | 0 | 0 | |||
Balance, end of period | 0 | 0 | |||
Unallocated | Cumulative Effect, Period of Adoption, Adjustment | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | (245) | ||||
Impact of adopting ASC 326 | |||||
Commercial | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | 25,761 | 26,077 | |||
Balance, beginning of period | 25,878 | 21,301 | |||
Impact of adopting ASC 326 | 26,650 | 26,650 | |||
Provision for credit losses | 923 | ||||
Provision for credit losses | 538 | ||||
Provision for loan losses | 225 | 1,098 | |||
Charge-offs | (49) | (407) | (95) | (493) | |
Recoveries | 15 | 88 | 130 | 138 | |
Balance end of period | 26,650 | 26,650 | |||
Balance, end of period | 25,784 | 25,784 | |||
Commercial | Cumulative Effect, Period of Adoption, Adjustment | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | 3,740 | ||||
Impact of adopting ASC 326 | |||||
Commercial | Commercial Real Estate | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | 17,975 | 17,873 | |||
Balance, beginning of period | 16,697 | 13,558 | |||
Impact of adopting ASC 326 | 18,203 | 18,203 | |||
Provision for credit losses | 236 | ||||
Provision for credit losses | 314 | ||||
Provision for loan losses | 246 | 508 | |||
Charge-offs | (12) | (12) | (12) | (12) | |
Recoveries | 4 | 65 | 28 | 85 | |
Balance end of period | 18,203 | 18,203 | |||
Balance, end of period | 16,996 | 16,996 | |||
Commercial | Commercial Real Estate | Cumulative Effect, Period of Adoption, Adjustment | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | 2,857 | ||||
Impact of adopting ASC 326 | |||||
Commercial | Acquisition and Development | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | 2,233 | 2,241 | |||
Balance, beginning of period | 3,217 | 3,214 | |||
Impact of adopting ASC 326 | 2,634 | 2,634 | |||
Provision for credit losses | 423 | ||||
Provision for credit losses | 414 | ||||
Provision for loan losses | (451) | (236) | |||
Charge-offs | (23) | 0 | (23) | 0 | |
Recoveries | 1 | 1 | 2 | 3 | |
Balance end of period | 2,634 | 2,634 | |||
Balance, end of period | 2,767 | 2,767 | |||
Commercial | Acquisition and Development | Cumulative Effect, Period of Adoption, Adjustment | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | (214) | ||||
Impact of adopting ASC 326 | |||||
Commercial | Commercial and Industrial | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | 5,389 | 5,806 | |||
Balance, beginning of period | 5,787 | 4,505 | |||
Impact of adopting ASC 326 | 5,652 | 5,652 | |||
Provision for credit losses | 267 | ||||
Provision for credit losses | (194) | ||||
Provision for loan losses | 440 | 852 | |||
Charge-offs | (14) | (395) | (60) | (481) | |
Recoveries | 10 | 22 | 100 | 50 | |
Balance end of period | 5,652 | 5,652 | |||
Balance, end of period | 5,854 | 5,854 | |||
Commercial | Commercial and Industrial | Cumulative Effect, Period of Adoption, Adjustment | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | 928 | ||||
Impact of adopting ASC 326 | |||||
Commercial | Municipal | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | 164 | 157 | |||
Balance, beginning of period | 177 | 24 | |||
Impact of adopting ASC 326 | 161 | 161 | |||
Provision for credit losses | (3) | ||||
Provision for credit losses | 4 | ||||
Provision for loan losses | (10) | (26) | |||
Charge-offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Balance end of period | 161 | 161 | |||
Balance, end of period | 167 | 167 | |||
Commercial | Municipal | Cumulative Effect, Period of Adoption, Adjustment | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | 169 | ||||
Impact of adopting ASC 326 | |||||
Consumer | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | 3,404 | 2,625 | |||
Balance, beginning of period | 2,486 | 3,632 | |||
Impact of adopting ASC 326 | 3,214 | 3,214 | |||
Provision for credit losses | (111) | ||||
Provision for credit losses | 695 | ||||
Provision for loan losses | 174 | 30 | |||
Charge-offs | (115) | (165) | (168) | (221) | |
Recoveries | 36 | 104 | 62 | 230 | |
Balance end of period | 3,214 | 3,214 | |||
Balance, end of period | 2,599 | 2,599 | |||
Consumer | Cumulative Effect, Period of Adoption, Adjustment | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | (1,072) | ||||
Impact of adopting ASC 326 | |||||
Consumer | Residential Mortgage | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | 3,193 | 2,424 | |||
Balance, beginning of period | 2,278 | 3,444 | |||
Impact of adopting ASC 326 | 3,023 | 3,023 | |||
Provision for credit losses | (126) | ||||
Provision for credit losses | 637 | ||||
Provision for loan losses | 64 | (76) | |||
Charge-offs | (50) | (98) | (50) | (98) | |
Recoveries | 6 | 63 | 12 | 158 | |
Balance end of period | 3,023 | 3,023 | |||
Balance, end of period | 2,307 | 2,307 | |||
Consumer | Residential Mortgage | Cumulative Effect, Period of Adoption, Adjustment | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | (1,121) | ||||
Impact of adopting ASC 326 | |||||
Consumer | Installment and Other | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | 211 | 201 | |||
Balance, beginning of period | 208 | 188 | |||
Impact of adopting ASC 326 | 191 | 191 | |||
Provision for credit losses | 15 | ||||
Provision for credit losses | 58 | ||||
Provision for loan losses | 110 | 106 | |||
Charge-offs | (65) | (67) | (118) | (123) | |
Recoveries | 30 | 41 | 50 | 72 | |
Balance end of period | $ 191 | $ 191 | |||
Balance, end of period | $ 292 | 292 | |||
Consumer | Installment and Other | Cumulative Effect, Period of Adoption, Adjustment | |||||
Activity in allowance for loan losses | |||||
Balance, beginning of period | $ 49 | ||||
Impact of adopting ASC 326 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | Jun. 30, 2024 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease terms | 4 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lease terms | 29 years |
LEASES - Summary of Information
LEASES - Summary of Information Related to Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Leases [Abstract] | |||||
Operating lease ROU assets | $ 10,360 | $ 10,360 | $ 10,824 | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets | Other assets | Other assets | ||
Operating lease ROU liabilities | $ 11,189 | $ 11,189 | $ 11,614 | ||
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Other Liabilities | Other Liabilities | Other Liabilities | ||
Weighted-average remaining lease term (in years) | 14 years 10 months 24 days | 14 years 10 months 24 days | 15 years 1 month 6 days | ||
Weighted-average discount rate | 4.40% | 4.40% | 4.40% | ||
Cash paid for operating lease liabilities | $ 336 | $ 287 | $ 671 | $ 571 | |
Operating lease expense | $ 355 | $ 302 | $ 711 | $ 611 |
LEASES - Schedule of Maturities
LEASES - Schedule of Maturities of Leases Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
2024 | $ 678 | |
2025 | 1,371 | |
2026 | 1,403 | |
2027 | 1,437 | |
2028 | 1,194 | |
Thereafter | 10,187 | |
Total | 16,270 | |
Less: imputed interest | 5,081 | |
Total lease liabilities | $ 11,189 | $ 11,614 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Nov. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Goodwill | $ 18,724,000 | $ 18,724,000 | $ 18,724,000 | |||
Impairments | $ 0 | 0 | $ 0 | 0 | $ 0 | |
Impairment of intangibles | $ 0 | $ 0 | $ 0 | $ 0 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Finite-lived Intangible Assets [Roll Forward] | ||||
Beginning of period | $ 2,189 | $ 2,828 | $ 2,414 | $ 3,078 |
Amortization expense | (215) | (239) | (440) | (489) |
Balance, end of period | $ 1,974 | $ 2,589 | $ 1,974 | $ 2,589 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Components of Other Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 8,679 | $ 8,679 |
Accumulated Amortization | 6,705 | 6,265 |
Core deposit intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 8,390 | 8,390 |
Accumulated Amortization | 6,651 | 6,247 |
Other customer relationship intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 289 | 289 |
Accumulated Amortization | $ 54 | $ 18 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Estimated Aggregate Amortization Expense for Other Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||||||
2024 | $ 396 | |||||
2025 | 656 | |||||
2026 | 476 | |||||
2027 | 297 | |||||
2028 | 120 | |||||
Thereafter | 29 | |||||
Total | $ 1,974 | $ 2,189 | $ 2,414 | $ 2,589 | $ 2,828 | $ 3,078 |
SHARE-BASED COMPENSATION PLAN_2
SHARE-BASED COMPENSATION PLANS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jul. 01, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares reserved to be issued (in shares) | 1,045,000 | 1,045,000 | ||||
Number of shares available to be issued under employee stock purchase plan (in shares) | 665,000 | 665,000 | ||||
Unrecognized compensation expense, recognition period | 8 months 12 days | |||||
Restricted Stock | Subsequent Event | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Accelerated vesting number | 198,462 | |||||
Restricted share award expense | $ 4,000 | |||||
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) | 1,281,920 | 1,281,920 | ||||
Number of shares available to be issued under employee stock purchase plan (in shares) | 267,885 | 267,885 | ||||
Orrstown 2011 Incentive Stock Plan | Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation expense | $ 5,900 | $ 5,900 | $ 3,400 | |||
Restricted share award expense | $ 864 | $ 534 | $ 1,809 | $ 1,150 | ||
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 | 350,000 | ||||
Number of shares available to be issued under employee stock purchase plan (in shares) | 135,296 | 135,296 | ||||
Maximum shares that can be purchased, as percentage of annual salary | 10% | 10% | ||||
Percentage of value of the shares on the semi-annual offering | 95% |
SHARE-BASED COMPENSATION PLAN_3
SHARE-BASED COMPENSATION PLANS - Summary of Nonvested Restricted Shares Activity (Details) - Orrstown 2011 Incentive Stock Plan - Restricted Stock | 6 Months Ended |
Jun. 30, 2024 $ / shares shares | |
Shares | |
Nonvested shares, beginning of year (in shares) | shares | 291,231 |
Granted (in shares) | shares | 158,684 |
Forfeited (in shares) | shares | (3,330) |
Vested (in shares) | shares | (128,574) |
Nonvested shares, at period end (in shares) | shares | 318,011 |
Weighted Average Grant Date Fair Value | |
Nonvested shares, beginning of year (in usd per share) | $ / shares | $ 22.85 |
Granted (in usd per share) | $ / shares | 27.48 |
Forfeited (in usd per share) | $ / shares | 23.62 |
Vested (in usd per share) | $ / shares | 21.02 |
Nonvested shares, at period end (in usd per share) | $ / shares | $ 25.89 |
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 | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted share award expense | $ 864 | $ 534 | $ 1,809 | $ 1,150 |
Restricted share award tax benefit | 181 | 112 | 380 | 242 |
Fair value of shares vested | $ 578 | $ 423 | $ 3,466 | $ 2,460 |
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 | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | ||||
Shares purchased (in shares) | 0 | 0 | 3,850 | 3,003 |
Weighted average price of shares purchased (in usd per share) | $ 0 | $ 0 | $ 20.67 | $ 21.85 |
Compensation expense recognized | $ 0 | $ 0 | $ 22 | $ 3 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 USD ($) swap riskParticipationAgreement customer broker | Jun. 30, 2023 USD ($) swap | Jun. 30, 2024 USD ($) swap riskParticipationAgreement customer broker | Jun. 30, 2023 USD ($) riskParticipationAgreement swap | Dec. 31, 2023 USD ($) riskParticipationAgreement swap | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Swap fee income | $ 375 | $ 196 | $ 574 | $ 196 | |
Cash collateral held by counterparty for derivatives | 6,800 | 6,800 | $ 6,600 | ||
Cash collateral held from counterparties | $ 9,800 | $ 9,800 | $ 4,400 | ||
New risk participation agreements | riskParticipationAgreement | 0 | ||||
Interest rate derivative | Derivatives designated as hedging instruments: | Cash Flow Hedging | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Number of derivatives | swap | 2 | 2 | 2 | ||
Derivative, notional amount | $ 125,000 | $ 125,000 | $ 125,000 | ||
Interest rate derivative | Derivatives designated as hedging instruments: | Other liabilities | Cash Flow Hedging | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative liability | 50,000 | 50,000 | 50,000 | ||
Interest rate derivative | Derivatives designated as hedging instruments: | Other assets | Cash Flow Hedging | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative asset | 75,000 | 75,000 | 75,000 | ||
Interest rate derivative | Derivatives not designated as hedging instruments: | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, notional amount | $ 593,400 | $ 593,400 | 444,800 | ||
Number of customers | customer | 39 | 39 | |||
Third-party broker | broker | 39 | 39 | |||
Interest rate derivative | Derivatives not designated as hedging instruments: | Other liabilities | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative liability | $ 262,458 | $ 262,458 | 216,485 | ||
Interest rate derivative | Derivatives not designated as hedging instruments: | Other assets | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative asset | $ 262,458 | $ 262,458 | $ 216,485 | ||
Interest rate swap-fixed rate | Derivatives designated as hedging instruments: | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Number of derivatives | swap | 3 | 3 | 3 | ||
Derivative, notional amount | $ 100,000 | $ 100,000 | $ 100,000 | ||
Interest rate swap-fixed rate | Derivatives designated as hedging instruments: | Cash Flow Hedging | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, notional amount | 75,000 | ||||
Interest rate swap- pay floating | Derivatives designated as hedging instruments: | Cash Flow Hedging | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, notional amount | 50,000 | ||||
Interest rate swap | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Number of new interest rate swaps | swap | 4 | 2 | 5 | 2 | |
Swap fee income | $ 375 | $ 196 | $ 574 | $ 196 | |
Risk participations - sold credit protection | Derivatives not designated as hedging instruments: | Other liabilities | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Risk participation agreements with sold protection | riskParticipationAgreement | 4 | 4 | |||
Derivative liability | $ 32,952 | $ 32,952 | $ 32,722 | ||
New risk participation agreements | riskParticipationAgreement | 1 | ||||
Risk participations - purchased credit protection | Derivatives not designated as hedging instruments: | Other assets | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Risk participation agreements with sold protection | riskParticipationAgreement | 3 | ||||
Risk participation agreements with purchase protection | riskParticipationAgreement | 5 | 5 | |||
Derivative asset | $ 23,832 | $ 23,832 | $ 11,035 | ||
New risk participation agreements | riskParticipationAgreement | 2 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Summary of Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Derivatives designated as hedging instruments: | ||
Fair Value | ||
Total derivatives | $ 1,985 | $ (2,009) |
Derivatives designated as hedging instruments: | Other assets | Interest rate swap | ||
Fair Value | ||
Derivative asset | 1,746 | |
Derivatives designated as hedging instruments: | Other assets | Interest rate swap | Cash Flow Hedging | ||
Notional Amount | ||
Derivative asset | 75,000 | 75,000 |
Fair Value | ||
Derivative asset | 135 | |
Derivatives designated as hedging instruments: | Other assets | Interest rate swaps - commercial loans | Fair Value Hedging | ||
Notional Amount | ||
Derivative asset | 100,000 | 0 |
Fair Value | ||
Derivative asset | 414 | 0 |
Derivatives designated as hedging instruments: | Other liabilities | Interest rate swap | ||
Fair Value | ||
Derivative liabilities | (175) | |
Derivatives designated as hedging instruments: | Other liabilities | Interest rate swap | Cash Flow Hedging | ||
Notional Amount | ||
Derivative liabilities | 50,000 | 50,000 |
Fair Value | ||
Derivative liabilities | (426) | |
Derivatives designated as hedging instruments: | Other liabilities | Interest rate swaps - commercial loans | Fair Value Hedging | ||
Notional Amount | ||
Derivative liabilities | 0 | 100,000 |
Fair Value | ||
Derivative liabilities | 0 | (1,718) |
Derivatives not designated as hedging instruments: | ||
Fair Value | ||
Total derivatives | 92 | (76) |
Derivatives not designated as hedging instruments: | Other assets | Interest rate swap | ||
Notional Amount | ||
Derivative asset | 262,458 | 216,485 |
Fair Value | ||
Derivative asset | 11,803 | 11,157 |
Derivatives not designated as hedging instruments: | Other assets | Purchased options – rate cap | ||
Notional Amount | ||
Derivative asset | 5,861 | 5,909 |
Fair Value | ||
Derivative asset | 7 | 8 |
Derivatives not designated as hedging instruments: | Other assets | Risk participations - purchased credit protection | ||
Notional Amount | ||
Derivative asset | 23,832 | 11,035 |
Fair Value | ||
Derivative asset | 72 | 28 |
Derivatives not designated as hedging instruments: | Other assets | Interest rate lock commitments with customers | ||
Notional Amount | ||
Derivative asset | 3,133 | 2,181 |
Fair Value | ||
Derivative asset | 71 | 55 |
Derivatives not designated as hedging instruments: | Other assets | Forward sale commitments | ||
Notional Amount | ||
Derivative asset | 1,538 | 688 |
Fair Value | ||
Derivative asset | 4 | (4) |
Derivatives not designated as hedging instruments: | Other liabilities | Interest rate swap | ||
Notional Amount | ||
Derivative liabilities | 262,458 | 216,485 |
Fair Value | ||
Derivative liabilities | (11,828) | (11,253) |
Derivatives not designated as hedging instruments: | Other liabilities | Written options – rate cap | ||
Notional Amount | ||
Derivative liabilities | 5,861 | 5,909 |
Fair Value | ||
Derivative liabilities | (7) | (8) |
Derivatives not designated as hedging instruments: | Other liabilities | Risk participations - sold credit protection | ||
Notional Amount | ||
Derivative liabilities | 32,952 | 32,722 |
Fair Value | ||
Derivative liabilities | $ (30) | $ (59) |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS - Carrying Amount and Cumulative Adjustment (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Jun. 30, 2023 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Carrying Amounts of Hedged Assets | $ 100,000 | $ 0 |
Cumulative Amounts of Fair Value Hedging Adjustments Included in the Carrying Amounts of the Hedged Assets | $ (415) | $ 0 |
Hedged Asset, Statement of Financial Position [Extensible Enumeration] | Other liabilities | Other liabilities |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS - Effect of Derivative Financial Instruments on OCI and Net Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Gain Recognized in OCI on Derivative | $ 434 | $ 1,073 | $ 1,862 | $ 1,392 |
Amount of Loss Reclassified from AOCI into Income | 0 | 0 | 0 | 0 |
Amount of Gain Recognized in Income | 39 | 80 | 168 | (199) |
Interest income | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Loss Reclassified from AOCI into Income | 0 | 0 | 0 | 0 |
Interest rate products | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Gain Recognized in OCI on Derivative | 434 | 1,073 | 1,862 | 1,392 |
Interest rate products | Interest income | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Loss Reclassified from AOCI into Income | 0 | 0 | 0 | 0 |
Interest rate products | Other operating expense | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Gain Recognized in Income | 27 | 40 | 71 | (119) |
Interest rate swap | Interest income | Commercial Loan | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Gain Recognized in Income | 5 | 8 | ||
Risk participation agreements | Other operating expense | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Gain Recognized in Income | (8) | 37 | 73 | 27 |
Interest rate lock commitments with customers | Mortgage banking activities | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Gain Recognized in Income | 15 | 10 | 17 | 32 |
Forward sale commitments | Mortgage banking activities | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Gain Recognized in Income | $ 5 | $ (7) | $ 7 | $ (139) |
DERIVATIVE FINANCIAL INSTRUME_7
DERIVATIVE FINANCIAL INSTRUMENTS - Summary of Components of Interest Rate Swaps (Details) - Derivatives | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Interest rate swaps - FHLB advances | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Weighted Average Pay Rate | 3.49% | 3.49% |
Weighted Average Receive Rate | 5.34% | 5.34% |
Weighted Average Maturity in Years | 3 years 9 months 18 days | 4 years 3 months 18 days |
Interest rate swaps - AFS securities | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Weighted Average Pay Rate | 5.33% | 5.34% |
Weighted Average Receive Rate | 3.73% | 3.73% |
Weighted Average Maturity in Years | 2 months 12 days | 8 months 12 days |
Interest rate swaps - commercial loans | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Weighted Average Pay Rate | 4.12% | 4.12% |
Weighted Average Receive Rate | 5.34% | 5.34% |
Weighted Average Maturity in Years | 3 years 2 months 12 days | 3 years 8 months 12 days |
SHORT-TERM BORROWINGS - Summary
SHORT-TERM BORROWINGS - Summary of the Use of Short-Term Borrowings (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Debt Disclosure [Abstract] | ||
Balance at period-end | $ 75,000 | $ 97,500 |
Weighted average interest rate during the period | 5.67% | 5.68% |
Average balance during the period | $ 75,000 | $ 87,370 |
Average interest rate during the period | 5.77% | 5.46% |
Maximum month-end balance during the period | $ 105,000 | $ 120,984 |
SHORT-TERM BORROWINGS - Narrati
SHORT-TERM BORROWINGS - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Line of Credit Facility [Line Items] | ||
Available unsecured lines of credit | $ 20 | $ 20 |
Federal Home Loan Bank Program | Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Available unsecured lines of credit | $ 75 | $ 52.5 |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Amount | ||
Total FHLB Advances | $ 40,000 | $ 40,000 |
Weighted Average Rate | ||
Total FHLB Advances | 4.20% | 4.20% |
FHLB fixed rate advances maturing | ||
Amount | ||
2025 | $ 15,000 | $ 15,000 |
2028 | $ 25,000 | $ 25,000 |
Weighted Average Rate | ||
2025 | 4.57% | 4.57% |
2028 | 3.98% | 3.98% |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) | Jun. 30, 2024 USD ($) bank | Dec. 31, 2023 USD ($) bank |
Debt Disclosure [Abstract] | ||
Collateral for all outstanding loans | $ 1,100,000,000 | $ 1,100,000,000 |
Additional availability at the FHLB based on qualifying collateral | 1,000,000,000 | 973,300,000 |
Letters of credit | 1,000,000 | 0 |
Letters of credit non-deposit | $ 609,000 | $ 609,000 |
Number of correspondent banks | bank | 2 | 2 |
Available unsecured lines of credit | $ 20,000,000 | $ 20,000,000 |
Borrowings under lines of credit | $ 0 | $ 0 |
SHAREHOLDERS' EQUITY AND REGU_3
SHAREHOLDERS' EQUITY AND REGULATORY CAPITAL - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 38 Months Ended | |||||||||
Jul. 17, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Jan. 01, 2023 | Dec. 31, 2022 | Apr. 19, 2021 | Sep. 30, 2015 | |
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Allowance for credit loss impact of adoption | $ 29,864 | $ 29,864 | $ 29,864 | $ 29,165 | $ 28,702 | |||||||
Off-balance-sheet, credit risk exposure liability | $ 1,600 | $ 1,600 | $ 1,600 | $ 1,700 | ||||||||
Number of shares reserved to be issued (in shares) | 1,045,000 | 1,045,000 | 1,045,000 | |||||||||
Number of shares available to be issued under employee stock purchase plan (in shares) | 665,000 | 665,000 | 665,000 | |||||||||
Number of shares authorized to be repurchased (in shares) | 978,000 | 416,000 | ||||||||||
Stock repurchase program, additional number of shares authorized to be repurchased | 562,000 | |||||||||||
Treasury stock, shares acquired (in shares) | 17,100 | 65,830 | 111,165 | 38,826 | 949,533 | |||||||
Acquisition of treasury stock | $ 21,200 | |||||||||||
Acquisition of treasury stock (in usd per share) | $ 22.36 | |||||||||||
Stock repurchase program, shares available for future repurchase | 28,467 | 28,467 | 28,467 | |||||||||
Stock repurchase program percentage of outstanding shares of common stock available for future purchase | 0.30% | 0.30% | 0.30% | |||||||||
Subsequent Event | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Dividends declared per share (in usd per share) | $ 0.23 | |||||||||||
Common Stock | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Treasury stock, shares acquired (in shares) | 0 | 0 | ||||||||||
Cumulative Effect, Period of Adoption, Adjustment | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Allowance for credit loss impact of adoption | $ 2,400 | $ 2,423 | ||||||||||
Off-balance-sheet, credit risk exposure liability | 100 | |||||||||||
Allowance for credit losses on loans and off-balance sheet credit risk liability | $ 2,500 |
SHAREHOLDERS_ EQUITY AND REGULA
SHAREHOLDERS’ EQUITY AND REGULATORY CAPITAL - Schedule of Actual and Required Capital Amounts and Ratios (Details) $ in Thousands | Jun. 30, 2024 USD ($) | Dec. 31, 2023 USD ($) |
Orrstown Financial Services, Inc. | ||
Total risk-based capital: | ||
Actual, Amount | $ 341,909 | $ 326,878 |
Actual, Ratio | 0.133 | 0.130 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 269,335 | $ 264,019 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 0.105 | 0.105 |
Tier 1 risk-based capital: | ||
Actual, Amount | $ 286,005 | $ 272,677 |
Actual, Ratio | 0.111 | 0.108 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 218,033 | $ 213,730 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 0.085 | 0.085 |
Tier 1 common equity risk-based capital: | ||
Actual, Amount | $ 286,005 | $ 272,677 |
Actual, Ratio | 11.10% | 10.80% |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 179,557 | $ 176,013 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 7% | 7% |
Tier 1 leverage capital: | ||
Actual, Amount | $ 286,005 | $ 272,677 |
Actual, Ratio | 0.089 | 0.089 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 129,255 | $ 122,907 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 0.040 | 0.040 |
Orrstown Bank | ||
Total risk-based capital: | ||
Actual, Amount | $ 337,000 | $ 320,687 |
Actual, Ratio | 0.131 | 0.128 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 269,264 | $ 263,942 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 0.105 | 0.105 |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 256,442 | $ 251,373 |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 0.100 | 0.100 |
Tier 1 risk-based capital: | ||
Actual, Amount | $ 306,798 | $ 292,160 |
Actual, Ratio | 0.120 | 0.116 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 217,976 | $ 213,667 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 0.085 | 0.085 |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 205,154 | $ 201,099 |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 0.080 | 0.080 |
Tier 1 common equity risk-based capital: | ||
Actual, Amount | $ 306,798 | $ 292,160 |
Actual, Ratio | 12% | 11.60% |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 179,509 | $ 175,961 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 7% | 7% |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 166,687 | $ 163,393 |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 6.50% | 6.50% |
Tier 1 leverage capital: | ||
Actual, Amount | $ 306,798 | $ 292,160 |
Actual, Ratio | 0.095 | 0.095 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 129,231 | $ 122,907 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 0.040 | 0.040 |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 161,539 | $ 153,634 |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 0.050 | 0.050 |
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 | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 7,738 | $ 9,838 | $ 16,269 | $ 18,994 |
Weighted average shares outstanding - basic (in shares) | 10,393 | 10,336 | 10,371 | 10,360 |
Dilutive effect of share-based compensation (in shares) | 160 | 85 | 146 | 98 |
Weighted average shares outstanding - diluted (in shares) | 10,553 | 10,421 | 10,517 | 10,458 |
Per share information: | ||||
Basic earnings per share (in usd per share) | $ 0.74 | $ 0.95 | $ 1.57 | $ 1.83 |
Diluted earnings per share (in usd per share) | $ 0.73 | $ 0.94 | $ 1.55 | $ 1.82 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Earnings Per Share [Abstract] | ||||
Average outstanding options excluded from diluted earnings per share (in shares) | 2 | 14,268 | 775 | 9,891 |
FINANCIAL INSTRUMENTS WITH OF_3
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK - Contractual or Notional Amounts, Commitments to Fund (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Home equity lines of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments to fund | $ 343,976 | $ 337,460 |
1-4 family residential construction loans | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments to fund | 49,901 | 40,330 |
Commercial real estate, construction and land development loans | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments to fund | 150,073 | 132,607 |
Commercial, industrial and other loans | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments to fund | 357,150 | 357,099 |
Standby letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments to fund | $ 30,653 | $ 24,529 |
FINANCIAL INSTRUMENTS WITH OF_4
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Jan. 01, 2023 | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||||||
Off-balance-sheet, credit risk exposure liability | $ 1,600,000 | $ 1,600,000 | $ 1,700,000 | |||
Provision for off-balance-sheet, credit risk | $ 0 | $ 0 | $ (123,000) | $ 0 | ||
Cumulative Effect, Period of Adoption, Adjustment | ||||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||||||
Off-balance-sheet, credit risk exposure liability | $ 100,000 |
FAIR VALUE - Summary of Assets
FAIR VALUE - Summary of Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Financial Assets | ||
Investment securities | $ 529,082 | $ 513,519 |
U.S. Treasury securities | ||
Financial Assets | ||
Investment securities | 17,713 | 17,840 |
U.S. Government Agencies | ||
Financial Assets | ||
Investment securities | 3,573 | 4,151 |
States and political subdivisions | ||
Financial Assets | ||
Investment securities | 200,446 | 203,122 |
GSE residential MBSs | ||
Financial Assets | ||
Investment securities | 56,843 | 57,632 |
GSE commercial MBSs | ||
Financial Assets | ||
Investment securities | 4,089 | 4,743 |
Non-agency CMOs | ||
Financial Assets | ||
Investment securities | 31,408 | 44,669 |
Asset-backed | ||
Financial Assets | ||
Investment securities | 98,658 | 108,134 |
Other | ||
Financial Assets | ||
Investment securities | 109 | 126 |
Fair Value, Measurements, Recurring | ||
Financial Assets | ||
Loans held for sale | 1,562 | 5,816 |
Totals | 544,757 | 530,718 |
Financial Liabilities | ||
Derivatives | 12,040 | 13,464 |
Fair Value, Measurements, Recurring | Derivatives | ||
Financial Assets | ||
Derivatives | 14,113 | 11,383 |
Fair Value, Measurements, Recurring | U.S. Treasury securities | ||
Financial Assets | ||
Investment securities | 17,713 | 17,840 |
Fair Value, Measurements, Recurring | U.S. Government Agencies | ||
Financial Assets | ||
Investment securities | 3,573 | 4,151 |
Fair Value, Measurements, Recurring | States and political subdivisions | ||
Financial Assets | ||
Investment securities | 200,446 | 203,122 |
Fair Value, Measurements, Recurring | GSE residential MBSs | ||
Financial Assets | ||
Investment securities | 56,843 | 57,632 |
Fair Value, Measurements, Recurring | GSE commercial MBSs | ||
Financial Assets | ||
Investment securities | 4,089 | 4,743 |
Fair Value, Measurements, Recurring | GSE residential CMOs | ||
Financial Assets | ||
Investment securities | 116,243 | 73,102 |
Fair Value, Measurements, Recurring | Non-agency CMOs | ||
Financial Assets | ||
Investment securities | 31,408 | 44,669 |
Fair Value, Measurements, Recurring | Asset-backed | ||
Financial Assets | ||
Investment securities | 98,658 | 108,134 |
Fair Value, Measurements, Recurring | Other | ||
Financial Assets | ||
Investment securities | 109 | 126 |
Fair Value, Measurements, Recurring | Level 1 | ||
Financial Assets | ||
Loans held for sale | 0 | 0 |
Totals | 17,822 | 17,966 |
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 | 17,713 | 17,840 |
Fair Value, Measurements, Recurring | Level 1 | U.S. Government Agencies | ||
Financial Assets | ||
Investment securities | 0 | 0 |
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 commercial 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 | Asset-backed | ||
Financial Assets | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Other | ||
Financial Assets | ||
Investment securities | 109 | 126 |
Fair Value, Measurements, Recurring | Level 2 | ||
Financial Assets | ||
Loans held for sale | 1,562 | 5,816 |
Totals | 509,297 | 484,844 |
Financial Liabilities | ||
Derivatives | 12,040 | 13,464 |
Fair Value, Measurements, Recurring | Level 2 | Derivatives | ||
Financial Assets | ||
Derivatives | 14,042 | 11,328 |
Fair Value, Measurements, Recurring | Level 2 | U.S. Treasury securities | ||
Financial Assets | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | U.S. Government Agencies | ||
Financial Assets | ||
Investment securities | 3,573 | 4,151 |
Fair Value, Measurements, Recurring | Level 2 | States and political subdivisions | ||
Financial Assets | ||
Investment securities | 194,114 | 197,060 |
Fair Value, Measurements, Recurring | Level 2 | GSE residential MBSs | ||
Financial Assets | ||
Investment securities | 56,843 | 57,632 |
Fair Value, Measurements, Recurring | Level 2 | GSE commercial MBSs | ||
Financial Assets | ||
Investment securities | 4,089 | 4,743 |
Fair Value, Measurements, Recurring | Level 2 | GSE residential CMOs | ||
Financial Assets | ||
Investment securities | 116,243 | 73,102 |
Fair Value, Measurements, Recurring | Level 2 | Non-agency CMOs | ||
Financial Assets | ||
Investment securities | 20,173 | 22,878 |
Fair Value, Measurements, Recurring | Level 2 | Asset-backed | ||
Financial Assets | ||
Investment securities | 98,658 | 108,134 |
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 | 17,638 | 27,908 |
Financial Liabilities | ||
Derivatives | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Derivatives | ||
Financial Assets | ||
Derivatives | 71 | 55 |
Fair Value, Measurements, Recurring | Level 3 | U.S. Treasury securities | ||
Financial Assets | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | U.S. Government Agencies | ||
Financial Assets | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | States and political subdivisions | ||
Financial Assets | ||
Investment securities | 6,332 | 6,062 |
Fair Value, Measurements, Recurring | Level 3 | GSE residential MBSs | ||
Financial Assets | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | GSE commercial 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 | 11,235 | 21,791 |
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 - Narrative (Details
FAIR VALUE - Narrative (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 USD ($) security | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) security | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) security | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Investment securities | $ 529,082,000 | $ 529,082,000 | $ 513,519,000 | ||
Fair value option, aggregate fair value was greater than (below) principal amount | 31,000 | 31,000 | (1,500,000) | ||
Increase (decrease) in fair value | 16,472,000 | $ 9,829,000 | |||
Decrease (increase) loans evaluated for credit loss | (136,000) | $ 285,000 | (431,000) | $ 510,000 | |
Impairment reserve for mortgage servicing rights | 0 | $ 0 | $ 0 | ||
Impairment (reversal of) charges | 0 | $ 0 | |||
Non-agency CMO -Called | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Securities called by issuer | security | 1 | ||||
Investment securities | $ 2,900,000 | $ 2,900,000 | |||
Interest rate lock commitments on residential mortgages | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Increase (decrease) in fair value | $ 4,000 | ||||
Level 3 | Municipal bonds | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Number of investment securities | security | 1 | 1 | 1 | ||
Level 3 | Collateralized Mortgage Obligations | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Number of investment securities | security | 2 | 2 | 2 | ||
Level 3 | Interest rate lock commitments on residential mortgages | Measurement Input, Pull Through | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Asset, measurement input (percent) | 0.92 | 0.92 | |||
Level 3 | Interest rate lock commitments on residential mortgages | Measurement Input, Pull Through Increase (Decrease) | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Asset, measurement input (percent) | 0.05 | 0.05 |
FAIR VALUE - Level 3 Fair Value
FAIR VALUE - Level 3 Fair Value Measurement Activity (Details) - Level 3 - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Interest rate lock commitments on residential mortgages | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | $ 56 | $ 57 | $ 55 | $ 35 |
Total gains included in earnings | 15 | 10 | 16 | 32 |
Balance, end of period | 71 | 67 | 71 | 67 |
Collateralized Mortgage Obligations | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 17,734 | 28,190 | 27,853 | 27,193 |
Unrealized (losses) gains included in OCI | (14) | (84) | 82 | 136 |
Purchases | 0 | 0 | 0 | 871 |
Net discount accretion | 16 | 10 | 33 | 23 |
Principal payments and other | (169) | (122) | (294) | (229) |
Calls | 0 | 0 | (10,107) | 0 |
Balance, end of period | $ 17,567 | $ 27,994 | $ 17,567 | $ 27,994 |
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 | Jun. 30, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total individually evaluated loans | $ 297 | $ 514 |
Commercial real estate | Owner occupied | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total individually evaluated loans | 46 | 75 |
Commercial and industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total individually evaluated loans | 164 | |
Residential mortgage | First lien | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total individually evaluated loans | 206 | 219 |
Residential mortgage | Home equity - lines of credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total individually evaluated loans | 45 | 56 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total individually evaluated loans | 0 | 0 |
Level 1 | Commercial real estate | Owner occupied | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total individually evaluated loans | 0 | 0 |
Level 1 | Commercial and industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total individually evaluated loans | 0 | |
Level 1 | Residential mortgage | First lien | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total individually evaluated 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 individually evaluated loans | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total individually evaluated loans | 0 | 0 |
Level 2 | Commercial real estate | Owner occupied | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total individually evaluated loans | 0 | 0 |
Level 2 | Commercial and industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total individually evaluated loans | 0 | |
Level 2 | Residential mortgage | First lien | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total individually evaluated 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 individually evaluated loans | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total individually evaluated loans | 297 | 514 |
Level 3 | Commercial real estate | Owner occupied | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total individually evaluated loans | 46 | 75 |
Level 3 | Commercial and industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total individually evaluated loans | 164 | |
Level 3 | Residential mortgage | First lien | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total individually evaluated loans | 206 | 219 |
Level 3 | Residential mortgage | Home equity - lines of credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total individually evaluated loans | $ 45 | $ 56 |
FAIR VALUE - Summary of Additio
FAIR VALUE - Summary of Additional Qualitative Information (Details) - Fair Value, Measurements, Nonrecurring - Individually evaluated loans $ in Thousands | Jun. 30, 2024 USD ($) | Dec. 31, 2023 USD ($) |
Discount Rate | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.0678 | 0.0330 |
Discount Rate | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.1230 | 0.1230 |
Appraisal of collateral | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Estimate | $ 297 | $ 514 |
Appraisal of collateral | Discount Rate | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.10 | 0.10 |
Appraisal of collateral | Discount Rate | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.25 | 0.70 |
FAIR VALUE - Financial Instrume
FAIR VALUE - Financial Instruments at Carrying Amounts and Estimated Fair Values (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Financial Assets | ||
Interest-bearing deposits with banks | $ 96,558 | $ 32,575 |
Restricted investments in bank stock | 11,147 | 11,992 |
Investment securities | 529,082 | 513,519 |
Carrying Amount | ||
Financial Assets | ||
Cash and due from banks | 35,951 | 32,586 |
Interest-bearing deposits with banks | 96,558 | 32,575 |
Restricted investments in bank stock | 11,147 | 11,992 |
Investment securities | 529,082 | 513,519 |
Loans held for sale | 1,562 | 5,816 |
Loans, net of allowance for credit losses | 2,317,739 | 2,269,611 |
Accrued interest receivable | 14,120 | 13,630 |
Financial Liabilities | ||
Deposits | 2,702,884 | 2,558,814 |
Securities sold under agreements to repurchase and federal funds purchased | 14,625 | 9,785 |
FHLB advances and other borrowings | 115,000 | 137,500 |
Subordinated notes | 32,128 | 32,093 |
Accrued interest payable | 2,463 | 2,560 |
Off-balance sheet instruments | 0 | 0 |
Carrying Amount | Derivatives | ||
Financial Assets | ||
Derivatives | 14,113 | 11,383 |
Financial Liabilities | ||
Derivatives | 12,040 | 13,464 |
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 | 35,951 | 32,586 |
Interest-bearing deposits with banks | 96,558 | 32,575 |
Investment securities | 529,082 | 513,519 |
Loans held for sale | 1,562 | 5,816 |
Loans, net of allowance for credit losses | 2,215,206 | 2,159,745 |
Accrued interest receivable | 14,120 | 13,630 |
Financial Liabilities | ||
Deposits | 2,700,274 | 2,555,904 |
Securities sold under agreements to repurchase and federal funds purchased | 14,625 | 9,785 |
FHLB advances and other borrowings | 114,541 | 137,500 |
Subordinated notes | 30,631 | 29,887 |
Accrued interest payable | 2,463 | 2,560 |
Fair Value | Fair Value, Inputs, Level 1, 2 and 3 | Derivatives | ||
Financial Assets | ||
Derivatives | 14,113 | 11,383 |
Financial Liabilities | ||
Derivatives | 12,040 | 13,464 |
Fair Value | Level 1 | ||
Financial Assets | ||
Cash and due from banks | 35,951 | 32,586 |
Interest-bearing deposits with banks | 96,558 | 32,575 |
Investment securities | 17,822 | 17,966 |
Loans held for sale | 0 | 0 |
Loans, net of allowance for credit losses | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Financial Liabilities | ||
Deposits | 0 | 0 |
Securities sold under agreements to repurchase and federal funds purchased | 0 | 0 |
FHLB advances and other borrowings | 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 | 493,693 | 467,700 |
Loans held for sale | 1,562 | 5,816 |
Loans, net of allowance for credit losses | 0 | 0 |
Accrued interest receivable | 4,891 | 4,987 |
Financial Liabilities | ||
Deposits | 2,700,274 | 2,555,904 |
Securities sold under agreements to repurchase and federal funds purchased | 14,625 | 9,785 |
FHLB advances and other borrowings | 114,541 | 137,500 |
Subordinated notes | 30,631 | 29,887 |
Accrued interest payable | 2,463 | 2,560 |
Off-balance sheet instruments | 0 | 0 |
Fair Value | Level 2 | Derivatives | ||
Financial Assets | ||
Derivatives | 14,042 | 11,328 |
Financial Liabilities | ||
Derivatives | 12,040 | 13,464 |
Fair Value | Level 3 | ||
Financial Assets | ||
Cash and due from banks | 0 | 0 |
Interest-bearing deposits with banks | 0 | 0 |
Investment securities | 17,567 | 27,853 |
Loans held for sale | 0 | 0 |
Loans, net of allowance for credit losses | 2,215,206 | 2,159,745 |
Accrued interest receivable | 9,229 | 8,643 |
Financial Liabilities | ||
Deposits | 0 | 0 |
Securities sold under agreements to repurchase and federal funds purchased | 0 | 0 |
FHLB advances and other borrowings | 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 | 71 | 55 |
Financial Liabilities | ||
Derivatives | $ 0 | $ 0 |
Uncategorized Items - orrf-2024
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-13 [Member] |