Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-36094 | |
Entity Registrant Name | THE COMMUNITY FINANCIAL CORPORATION | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 52-1652138 | |
Entity Address, Address Line One | 3035 Leonardtown Road | |
Entity Address, City or Town | Waldorf | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 20601 | |
City Area Code | (301) | |
Local Phone Number | 645-5601 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | TCFC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 5,645,749 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0000855874 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and due from banks | $ 18,008 | $ 108,990 |
Federal funds sold | 20,325 | 0 |
Interest-bearing deposits with banks | 14,970 | 30,664 |
Securities available for sale ("AFS"), at fair value | 464,502 | 497,839 |
Equity securities carried at fair value through income | 4,254 | 4,772 |
Non-marketable equity securities held in other financial institutions | 207 | 207 |
Federal Home Loan Bank ("FHLB") stock - at cost | 1,226 | 1,472 |
Net loans | 1,722,461 | 1,586,791 |
Goodwill | 10,835 | 10,835 |
Premises and equipment, net | 21,626 | 21,427 |
Accrued interest receivable | 6,791 | 5,588 |
Investment in bank owned life insurance | 39,583 | 38,932 |
Core deposit intangible | 725 | 1,032 |
Net deferred tax assets | 24,755 | 9,033 |
Right of use assets - operating leases | 6,022 | 6,124 |
Other assets | 3,331 | 3,600 |
Total Assets | 2,359,621 | 2,327,306 |
Liabilities and Stockholders’ Equity | ||
Non-interest-bearing deposits | 647,432 | 445,778 |
Interest-bearing deposits | 1,479,125 | 1,610,386 |
Total Deposits | 2,126,557 | 2,056,164 |
Long-term debt | 0 | 12,231 |
Guaranteed preferred beneficial interest in junior subordinated debentures ("TRUPs") | 12,000 | 12,000 |
Subordinated notes net of debt issuance costs - 4.75% | 19,552 | 19,510 |
Lease liabilities - operating leases | 6,288 | 6,343 |
Accrued expenses and other liabilities | 16,070 | 12,925 |
Total Liabilities | 2,180,467 | 2,119,173 |
Stockholders’ Equity | ||
Common stock - par value $0.01; authorized - 15,000,000 shares; issued 5,644,186 and 5,718,528 shares, respectively | 56 | 57 |
Additional paid in capital | 97,712 | 96,896 |
Retained earnings | 125,608 | 113,448 |
Accumulated other comprehensive losses | (43,906) | (1,952) |
Unearned ESOP shares | (316) | (316) |
Total Stockholders’ Equity | 179,154 | 208,133 |
Total Liabilities and Stockholders’ Equity | 2,359,621 | 2,327,306 |
U.S. SBA PPP | ||
Assets | ||
Net loans | 1,211 | 26,398 |
Portfolio Loans | ||
Assets | ||
Net loans | $ 1,721,250 | $ 1,560,393 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Statement of Financial Position [Abstract] | ||
Allowance for loan losses | $ 22,027 | $ 18,417 |
Subordinated notes interest rate | 4.75% | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 15,000,000 | 15,000,000 |
Common stock, issued (in shares) | 5,644,186 | 5,718,528 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Interest and Dividend Income | ||||
Loans, including fees | $ 18,735 | $ 16,342 | $ 51,117 | $ 49,254 |
Interest and dividends on investment securities | 2,454 | 1,296 | 6,044 | 3,461 |
Interest on deposits with banks | 156 | 21 | 294 | 66 |
Total Interest and Dividend Income | 21,345 | 17,659 | 57,455 | 52,781 |
Interest Expense | ||||
Deposits | 1,850 | 594 | 3,182 | 2,036 |
Short-term borrowings | 52 | 0 | 68 | 0 |
Long-term debt | 386 | 456 | 1,111 | 1,192 |
Total Interest Expense | 2,288 | 1,050 | 4,361 | 3,228 |
Net Interest Income | 19,057 | 16,609 | 53,094 | 49,553 |
Provision for credit losses | 694 | 0 | 1,569 | 586 |
Provision for unfunded commitments | 6 | 0 | 1 | 0 |
Net Interest Income After Provision For Credit Losses | 18,357 | 16,609 | 51,524 | 48,967 |
Noninterest Income | ||||
Gain on sale of assets | 0 | 0 | 68 | |
Net gains on sale of investment securities | 0 | 0 | 0 | 586 |
Unrealized losses on equity securities | (187) | (22) | (564) | (94) |
Income from bank owned life insurance | 220 | 220 | 651 | 652 |
Net losses (gains) on sale of loans held for sale | 1 | 30 | (2) | 30 |
Gains (losses) on sale of loans | 0 | 0 | 209 | (191) |
Total Noninterest Income | 1,229 | 1,400 | 4,104 | 5,616 |
Noninterest Expense | ||||
Compensation and benefits | 5,116 | 5,650 | 15,222 | 15,770 |
Occupancy expense | 826 | 731 | 2,378 | 2,180 |
Advertising | 149 | 145 | 372 | 372 |
Data processing expense | 1,062 | 840 | 3,077 | 2,766 |
Professional fees | 923 | 676 | 2,499 | 1,920 |
Depreciation of premises and equipment | 177 | 137 | 476 | 419 |
FDIC Insurance | 160 | 120 | 516 | 512 |
OREO valuation allowance and expenses | 0 | 20 | 6 | 689 |
Core deposit intangible amortization | 97 | 121 | 308 | 380 |
Fraud losses | 37 | 132 | 107 | 1,243 |
Other expenses | 1,079 | 875 | 3,083 | 2,722 |
Total Noninterest Expense | 9,626 | 9,447 | 28,044 | 28,973 |
Income before income taxes | 9,960 | 8,562 | 27,584 | 25,610 |
Income tax expense | 2,380 | 2,158 | 6,882 | 6,475 |
Net Income | $ 7,580 | $ 6,404 | $ 20,702 | $ 19,135 |
Earnings Per Common Share | ||||
Basic (in dollars per share) | $ 1.34 | $ 1.12 | $ 3.66 | $ 3.29 |
Diluted (in dollars per share) | 1.34 | 1.12 | 3.65 | 3.29 |
Cash dividends paid per common share (in dollars per share) | $ 0.175 | $ 0.150 | $ 0.525 | $ 0.425 |
Loan appraisal, credit, and miscellaneous charges | ||||
Noninterest Income | ||||
Noninterest Income | $ 65 | $ 29 | $ 285 | $ 271 |
Service charges | ||||
Noninterest Income | ||||
Noninterest Income | 1,130 | 987 | 3,164 | 3,066 |
Referral fee income | ||||
Noninterest Income | ||||
Noninterest Income | $ 0 | $ 176 | $ 361 | $ 1,248 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 7,580 | $ 6,404 | $ 20,702 | $ 19,135 |
Net unrealized holding losses arising during period, net of tax benefits of $(4,250) and $(1,083), and $(14,787) and $(1,744), respectively. | (12,059) | (3,072) | (41,954) | (4,946) |
Reclassification adjustment for gains included in net income, net of tax expense of $0 and $0, and $0 and $153, respectively. | 0 | 0 | 0 | 433 |
Comprehensive (Loss) Income | $ (4,479) | $ 3,332 | $ (21,252) | $ 14,622 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Net unrealized holding (loss) gains arising during period, Tax Effect | $ (4,250) | $ (1,083) | $ (14,787) | $ (1,744) |
Reclassification adjustment, Tax Effect | $ 0 | $ 0 | $ 0 | $ 153 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' 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 Income (Loss) | Unearned ESOP Shares |
Beginning Balance at Dec. 31, 2020 | $ 198,013 | $ 59 | $ 95,965 | $ 97,944 | $ 4,504 | $ (459) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Income | 19,135 | 19,135 | ||||||
Unrealized holding loss on investment securities, net of tax | (4,513) | (4,513) | ||||||
Cash dividends | (2,355) | (2,355) | ||||||
Dividend reinvestment | 0 | 125 | (125) | |||||
Net change in fair market value below cost of leveraged ESOP shares released | (2) | (2) | ||||||
Repurchase of common stock | (6,711) | (2) | (6,709) | |||||
Stock based compensation | 561 | 561 | ||||||
Ending Balance at Sep. 30, 2021 | 204,128 | 57 | 96,649 | 107,890 | (9) | (459) | ||
Beginning Balance at Jun. 30, 2021 | 203,962 | 58 | 96,411 | 104,889 | 3,063 | (459) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Income | 6,404 | 6,404 | ||||||
Unrealized holding loss on investment securities, net of tax | (3,072) | (3,072) | ||||||
Cash dividends | (812) | (812) | ||||||
Dividend reinvestment | 0 | 45 | (45) | |||||
Net change in fair market value below cost of leveraged ESOP shares released | 2 | 2 | ||||||
Repurchase of common stock | (2,547) | (1) | (2,546) | |||||
Stock based compensation | 191 | 191 | ||||||
Ending Balance at Sep. 30, 2021 | 204,128 | 57 | 96,649 | 107,890 | (9) | (459) | ||
Beginning Balance at Dec. 31, 2021 | 208,133 | $ (2,006) | 57 | 96,896 | 113,448 | $ (2,006) | (1,952) | (316) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Income | 20,702 | 20,702 | ||||||
Unrealized holding loss on investment securities, net of tax | (41,954) | (41,954) | ||||||
Cash dividends | (2,823) | (2,823) | ||||||
Dividend reinvestment | 0 | 159 | (159) | |||||
Net change in fair market value below cost of leveraged ESOP shares released | 11 | 11 | ||||||
Repurchase of common stock | (3,555) | (1) | (3,554) | |||||
Stock based compensation | 646 | 646 | ||||||
Ending Balance at Sep. 30, 2022 | $ 179,154 | 56 | 97,712 | 125,608 | (43,906) | (316) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2019-11 | |||||||
Beginning Balance at Jun. 30, 2022 | $ 184,871 | 56 | 97,455 | 119,523 | (31,847) | (316) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Income | 7,580 | 7,580 | ||||||
Unrealized holding loss on investment securities, net of tax | (12,059) | (12,059) | ||||||
Cash dividends | (935) | (935) | ||||||
Dividend reinvestment | 0 | 54 | (54) | |||||
Net change in fair market value below cost of leveraged ESOP shares released | 2 | 2 | ||||||
Repurchase of common stock | (506) | (506) | ||||||
Stock based compensation | 201 | 201 | ||||||
Ending Balance at Sep. 30, 2022 | $ 179,154 | $ 56 | $ 97,712 | $ 125,608 | $ (43,906) | $ (316) |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Net unrealized holding gains (losses) arising during period, tax effect | $ (4,250) | $ (1,083) | $ (14,787) | $ (1,591) |
Cash dividends (in dollars per share) | $ 0.175 | $ 0.150 | $ 0.525 | $ 0.425 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash Flows from Operating Activities | ||
Net income | $ 20,702 | $ 19,135 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Provision for credit losses | 1,569 | 586 |
Provision for unfunded commitments | 1 | 0 |
Depreciation and amortization | 1,165 | 1,150 |
Provision for loss on premises held for sale | 0 | 20 |
Loans originated for resale | (1,800) | (1,479) |
Proceeds from sale of loans originated for sale | 1,838 | 1,514 |
Net losses (gains) on sale of loans held for sale | 2 | (30) |
(Gains) losses on sale of loans | (209) | 191 |
Net gains on the sale of OREO | 0 | (16) |
Gains on sales of investment securities | 0 | (586) |
Unrealized losses on equity securities | 564 | 94 |
Gains on sale of assets | 0 | (68) |
Net amortization of premium/discount on investment securities | 2,148 | 636 |
Net accretion of merger accounting adjustments | (168) | (256) |
Net amortization of debt issuance costs | 42 | (30) |
Amortization of core deposit intangible | 308 | 380 |
Amortization of right of use asset | 288 | 304 |
Net change in right of use assets and lease liabilities | (241) | (302) |
Increase in OREO valuation allowance | 0 | 641 |
Increase in cash surrender value of bank owned life insurance | (651) | (652) |
(Decrease) increase in deferred income tax benefit | (237) | 710 |
(Increase) decrease in accrued interest receivable | (1,203) | 2,672 |
Stock based compensation | 646 | 561 |
Net change in fair market value above (below) cost of leveraged ESOP shares released | 11 | (2) |
(Increase) decrease in net deferred loan costs | (441) | 2,324 |
Increase in accrued expenses and other liabilities | 2,927 | 3,886 |
Decrease (increase) in other assets | 269 | (917) |
Net Cash Provided by Operating Activities | 27,530 | 30,466 |
Cash Flows from Investing Activities | ||
Purchase of AFS investment securities | (69,078) | (265,704) |
Proceeds from redemption or principal payments of AFS investment securities | 43,480 | 36,408 |
Proceeds from sale of AFS investment securities | 0 | 12,540 |
Net decrease of FHLB stock | 246 | 1,305 |
Net change in loans | (142,537) | 9,617 |
Purchase of premises and equipment | (1,364) | (2,264) |
Proceeds from sale of OREO | 0 | 947 |
Proceeds from sale of loans | 3,588 | 11,965 |
Proceeds from disposal of asset | 0 | 12 |
Net Cash Used in Investing Activities | (165,665) | (195,174) |
Cash Flows from Financing Activities | ||
Net increase in deposits | 70,393 | 259,005 |
Payments of long-term debt | (12,231) | (15,053) |
Dividends paid | (2,823) | (2,355) |
Repurchase of common stock | (3,555) | (6,711) |
Net Cash Provided by Financing Activities | 51,784 | 234,886 |
(Decrease) increase in Cash and Cash Equivalents | (86,351) | 70,178 |
Cash and Cash Equivalents - January 1 | 139,654 | 77,065 |
Cash and Cash Equivalents - September 30 | 53,303 | 147,243 |
Cash paid during the period for | ||
Interest | 4,138 | 3,205 |
Income taxes | 6,239 | 6,278 |
Supplemental Schedule of Non-Cash Operating Activities | ||
Issuance of common stock for payment of compensation | 355 | 164 |
Supplemental Schedule of Non-Cash Investing and Financing Activities | ||
Cumulative effect adjustment for adoption of ASU 2016-13 | $ 2,006 | $ 0 |
BASIS OF PRESENTATION AND NATUR
BASIS OF PRESENTATION AND NATURE OF OPERATIONS | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Nature of Operations | BASIS OF PRESENTATION AND NATURE OF OPERATIONS Basis of Presentation The Consolidated Financial Statements include the accounts of The Community Financial Corporation and its wholly-owned subsidiary, Community Bank of the Chesapeake (the “Bank”), (collectively, the “Company”), included herein are unaudited. The Consolidated Financial Statements reflect all adjustments consisting only of normal recurring accruals that, in the opinion of management, are necessary to present fairly the Company’s financial condition, results of operations, and cash flows for the periods presented. Certain information and note disclosures normally included in Consolidated Financial Statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to the rules and regulations of the SEC. Management believes that the included disclosures are adequate to make the information presented not misleading. The balances as of December 31, 2021 have been derived from audited Consolidated Financial Statements. The Company’s accounting policies are disclosed in Note 1 to the 2021 Consolidated Financial Statements. The adoption on January 1, 2022 of the new Current Expected Credit Loss ("CECL") accounting standard is described below. The results of operations for the nine months September 30, 2022 are not necessarily indicative of the results of operations to be expected for the remainder of the year or any other period. These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes included in the Company’s 2021 Annual Report on Form 10-K. Reclassification Certain items in prior Consolidated Financial Statements have been reclassified to conform to the current presentation. Nature of Operations The Company provides financial services to individuals and businesses through its offices in Southern Maryland and Fredericksburg, Virginia. Its primary deposit products are demand, savings and time deposits, and its primary lending products are commercial and residential mortgage loans, commercial loans, construction and land development loans, home equity and second mortgages and commercial equipment loans. Use of Estimates The preparation of Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements and the reported amount of income and expenses during the reporting periods. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses ("ACL"), real estate acquired in the settlement of loans ("OREO"), fair value of financial instruments, fair value of assets acquired, and liabilities assumed in a business combination, evaluating potential credit losses of investment securities and valuation of deferred tax assets. New Accounting Policy Allowance for Credit Losses On January 1, 2022, the Company adopted ASU 2016-13 Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments , which replaced the incurred loss methodology for determining the provision for credit losses and ACL with the CECL methodology. The measurement of expected credit losses under the CECL methodology applies to financial assets subject to credit losses and measured at amortized cost, and certain off-balance sheet credit exposures. This includes, but is not limited to, loans, leases, held-to-maturity securities, loan commitments, and financial guarantees. In addition, ASU 2016-13 made changes to the accounting for available-for-sale ("AFS") debt securities. Credit-related impairments of AFS debt securities are now recognized through an allowance for credit loss rather than a write-down of the securities' amortized cost basis when management does not intend to sell or believes that it is not likely that they will be required to sell the securities prior to recovery of the securities amortized cost basis. We adopted ASU 2016-13 using the modified retrospective method. Results for reporting periods beginning after January 1, 2022 are presented under ASU 2016-13 while prior period amounts continue to be reported in accordance with previously applicable GAAP. At adoption, the Company did not hold Held to Maturity ("HTM") investment debt securities. The following table shows the impact of the Company's adoption of ASC 326: January 1, 2022 (dollars in thousands) As Reported Under ASC 326 Pre-ASC 326 Adoption Impact of ASC 326 Adoption Portfolio Loans: Commercial real estate $ 1,113,793 $ 1,115,485 (1,692) Residential first mortgages 92,710 91,120 1,590 Residential rentals 194,911 195,035 (124) Construction and land development 35,502 35,590 (88) Home equity and second mortgages 25,661 25,638 23 Commercial loans 50,512 50,574 (62) Consumer loans 3,015 3,002 13 Commercial equipment 62,706 62,499 207 Gross Portfolio Loans 1,578,810 1,578,943 (133) Adjustments: Net deferred costs — (133) 133 Allowance for credit losses (20,913) (18,417) (2,496) Net Portfolio Loans 1,557,897 1,560,393 (2,496) U.S. Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans 26,398 27,276 (878) Net deferred fees — (878) 878 Net U.S. SBA PPP Loans 26,398 26,398 — Total Net Loans $ 1,584,295 $ 1,586,791 $ (2,496) Liabilities: Reserve for Unfunded Commitments $ 268 $ 51 $ 217 Loans that the Company has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are reported at their outstanding unpaid principal balances, adjusted for the allowance for credit losses and any deferred fees or premiums. Interest income is accrued on the unpaid principal balance. Loan origination fees and premiums, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method. Loans purchased with evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected are considered credit deteriorated. Evidence of credit quality deterioration as of the purchase date may include statistics such as internal risk grade, past due and nonaccrual status, recent borrower credit scores and recent loan-to-value (“LTV”) percentages. At December 31, 2021, the Bank had purchased credit-deteriorated (“PCD”) loans from the County First acquisition with unpaid principal balances of $1.4 million and carrying values of $1.1 million. At the adoption of ASC 326, management evaluated the remaining unamortized discount on the PCD loans and determined that approximately $8,000 of the discount was credit related and reclassified into the ACL. The non-credit component of the discount will be recognized in interest income over the remaining life of the loans. The Company considers a loan to be past due or delinquent when the terms of the contractual obligation are not met by the borrower. Loans are reviewed on a regular basis and are placed on non-accrual status when, in the opinion of management, the collection of additional interest is doubtful. The accrual of interest on mortgage and commercial loans is discontinued at the time the loan is 90 days delinquent unless the credit is well secured and in the process of collection. Non-accrual loans include certain loans that are current with all loan payments and are placed on non-accrual status due to customer operating results and cash flows. Non-accrual loans are evaluated for impairment on a loan-by-loan basis in accordance with the Company’s impairment methodology. Consumer loans, excluding credit card loans, are typically charged-off no later than 90 days past due. Credit card loans are typically charged-off no later than 180 days past due. Mortgage and commercial loans are fully or partially charged-off when in management’s judgment all reasonable efforts to return a loan to performing status have occurred. In all cases, loans are placed on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not collected from loans that are placed on non-accrual or charged-off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual status. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured. TDRs are loans that have been modified to provide for a reduction or a delay in the payment of either interest or principal because of deterioration in the financial condition of the borrower. A loan extended or renewed at a stated interest rate equal to the current interest rate for new debt with similar risk is not considered a TDR. Once an obligation has been classified as a TDR it continues to be considered a TDR until paid in full or until the debt is refinanced and considered unimpaired. All TDRs are assessed on a loan-by-loan basis. The Company does not participate in any specific government or Company-sponsored loan modification programs. All restructured loan agreements are individual contracts negotiated with a borrower. Allowance for Credit Losses - Loans The ACL is an estimate of the expected credit losses for loans held for investment and off-balance sheet exposures. ASU 2016-13 replaced the incurred loss model that recognized a loss when it became probable that a credit loss had occurred, with a model that immediately recognizes the credit loss expected to occur over the lifetime of a financial asset whether originated or purchased. Charge-offs are recorded to the ACL when management believes the loan is uncollectible. Subsequent recoveries, if any, are credited to the ACL. Management believes the ACL is in accordance with U.S. GAAP and in compliance with appropriate regulatory guidelines. The ACL includes quantitative estimates of losses for collectively and individually evaluated loans. As more fully described below, the model-based quantitative estimate for collectively evaluated loans is determined using the probability of default (PD) and loss given default (LGD) at the segment level and applied at the loan level against the expected exposure at default (EAD). Qualitative adjustments to the quantitative estimate may be made using information not considered in the quantitative model. The Bank uses a range of data to estimate expected credit losses under CECL, including information about past events, current conditions, and reasonable and supportable forecasts relevant to assessing the collectability of the cash flows of the loans. Historical loss experience serves as the foundation for our estimated credit losses. Adjustments to our historical loss experience are made for differences in current loan portfolio segment credit risk characteristics such as the impact of changing unemployment rates, changes in U.S. Treasury yields, portfolio concentrations, the volume of classified loans, inflation, and other prevailing economic conditions and factors that may affect the borrower’s ability to repay, or reduce the estimated value of underlying collateral. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. The ACL is measured on a collective basis when similar risk characteristics exist. Generally, collectively assessed loans are grouped by loan type code or product type codes and assigned to a corresponding portfolio segment. Portfolio segments may be further subdivided into similar risk profile groupings based on interest rate structure, types of collateral or other terms and characteristics. The probability of default (“PD”) calculation analyzes the historical loan portfolio over the given look back period to identify, by segment, loans that have defaulted. A default is defined as a loan that has moved to past due 90 days and greater, nonaccrual status, or experienced a charge-off during the period. The model observes loans over a 12-month window, detecting any events previously defined. This information is then used by the model to calculate annual iterative count-based PD rates for each segment. This process is then repeated for all dates within the historical data range. These averaged PD’s are used for a 12-month straight-line reversion to the historical mean. The historical data used was from mid-2006 through the most recent quarter end. The Company utilizes reasonable and supportable forecasts of future economic conditions when estimating the ACL on loans. The model’s calculation also includes a 12-month forecasted PD based on a regression model that compares the Company’s historical loan data to various national economic metrics during the same periods. The results show the Company’s past losses having a high rate of correlation to national unemployment rates for fixed rate loans and the 10-Year U.S. Treasury for adjustable-rate loans. The model uses this information, along with the most recently published Wall Street Journal survey of sixty economists’ forecasts predicting unemployment rates out over the next four quarters to estimate the PD for the forward-looking 12-month period. These data are also used to predict credit losses at different levels of stress, including a baseline, low, high and adverse economic conditions. After the forecast period, PD rates revert to the historical mean straight line over a 12-month period for the entire data set. The loss given default (“LGD”) calculation is based on actual losses (charge-offs, net of recoveries) at a loan level over the entire look-back period aggregated for each loan segment. The aggregate loss is divided by the exposure at default to determine an LGD rate. Defaults occurring during the look-back period are included in the denominator, whether or not a loss occurred and exposure at default is determined by the loan balance immediately preceding the default event. When the Company's data are insufficient. an industry index is used. The exposure at default (“EAD”) calculation projects future expected balances from monthly cash flow schedules to apply PD and LGD assumptions. These are derived based on current contractual terms (balance, interest rate, payment structure), adjusted for expected voluntary prepayments. The contractual terms exclude expected extensions, renewals and modifications unless either of the following applies: management has the reasonable expectation that a loan will be restructured, or the extension or renewal option are included in the borrower contract. On a quarterly basis, the Company uses internal portfolio credit data, such as levels of non-accrual loans, classified assets and concentrations of credit along with other external information not used in the quantitative calculation to determine qualitative adjustments. Loans that do not share the same common risk characteristics with other loans are individually assessed. Such loans include non-accrual loans, TDRs, loans classified as substandard or worse, loans that are greater than 89 days delinquent and any other loan identified by management for individual assessment. Reserves on individually assessed loans are measured on a loan-by-loan basis. Generally, consumer loans, including credit cards, are not individually assessed as the Bank's policy is to charge-off credit card loans when they become 180 days delinquent and other consumer loans when they are more than 90 days delinquent. The methodology used to estimate the ACL is designed to be responsive to changes in portfolio credit quality and forecasted economic conditions. Changes due to new information are reflected in the pool-based allowance and in reserves assigned on an individual basis. Executive management closely monitors loss ratios, reviews the appropriateness of the ACL and presents conclusions to the Credit Risk Committee and the Audit Committee. The committees report to the Board as part of Board's quarterly review of our regulatory reporting and consolidated financial statements. The calculation of the ACL excludes accrued interest receivable balances because these balances are reversed in a timely manner against previously recognized interest income when a loan is placed on non-accrual status. Allowance for Credit Losses - AFS Debt securities As described above, the Company does not presently hold any HTM debt securities and therefore is not presently required to apply a CECL methodology for an HTM investment portfolio. The impairment model for AFS debt securities measures fair value. Although ASU No. 2016-13 replaced the legacy other-than-temporary impairment (“OTTI”) model with a credit loss model, it retained the fundamental nature of the legacy OTTI model for AFS securities. One notable change from the legacy OTTI model is when evaluating whether credit loss exists, an entity may no longer consider the length of time fair value has been less than amortized cost. For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either criterion is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and a corresponding allowance for credit losses is recorded. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit losses. Losses are charged against the allowance when management believes the uncollectibility of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Any impairment not recorded through an allowance for credit loss is recognized in other comprehensive income as a noncredit-related impairment. As of September 30, 2022, the Company determined that the unrealized loss positions in AFS securities were not the result of credit losses, and therefore, an allowance for credit losses was not recorded. See Note 2 Investment Securities for more information. The Bank elected as allowed under ASU No. 2016-13 to exclude accrued interest from the amortized cost basis of AFS debt securities and report accrued interest separately in accrued interest and other assets in the consolidated balance sheets. AFS debt securities are placed on non-accrual status when management no longer expects to receive all contractual amounts due, which is generally at 90 days past due. Accrued interest receivable is reversed against interest income when a security is placed on non-accrual status. Accordingly, the Company does not recognize an allowance for credit loss against accrued interest receivable. The majority of AFS debt securities as of September 30, 2022 and December 31, 2021 were issued by Government Sponsored Enterprises (“GSEs”) and U.S. agencies. As such, an allowance for credit losses is not considered necessary. Collateral Dependent Financial Assets Loans that do not share risk characteristics are evaluated on an individual basis. For collateral dependent financial assets where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the Net Present Value ("NPV") from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized costs basis of the financial asset exceeds the fair value of the underlying collateral less estimated cost to sell. The ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the financial asset. Subsequent changes to the fair value of collateral, for which an ACL was previously recognized, will be reported as a provision (recovery) for credit losses. The Bank generally uses the practical expedient of the fair value of the collateral, net of estimated selling costs, to determine the expected credit loss for individually assessed collateral dependent loans. Loan Commitments and Allowance for Credit Losses on Off-Balance Sheet Credit Exposure Financial instruments include off-balance sheet credit instruments such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded. The Company records a reserve for unfunded commitments (“RUC”) on off-balance sheet credit exposures through a charge to provision for credit loss expense in the Company’s consolidated statements of operations. The RUC on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the CECL model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur, and is included in Other Liabilities on the Company’s consolidated balance sheets. See Note 1 – Summary of Significant Accounting Policies included in the Company’s 2021 Annual Report on Form 10-K for a list of policies in effect as of December 31, 2021. Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) Adopted New Accounting Standard ASU 2016-13 – Financial Instruments – Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments. ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard replaced the existing “incurred loss” approach with an “expected loss” model. The new model, referred to as the current expected credit loss (“CECL”) model, applies to (1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures. This includes, but is not limited to, loans, leases, HTM securities, loan commitments, and financial guarantees. Credit losses relating to AFS debt securities will be recorded through an allowance for credit losses. The ASU also simplifies the accounting model for Purchased Credit Impaired (“PCI”) debt securities and loans. ASU 2016-13 also expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for loan and lease losses. In addition, entities will need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., modified retrospective approach). In December 2019, the FASB issued ASU No 2019-10, Financial Instruments - Credit Losses (Topic 326). This update amends the effective date of ASU 2016-13 for certain entities, including smaller reporting companies until fiscal years beginning after December 15, 2022, including interim periods within those fiscal periods. Early adoption was permitted. The FASB has issued other ASUs that clarify items related to ASU 2016-13. The Company adopted this guidance effective January 1, 2022. The Company's estimates are derived using one-year reasonable and supportable economic forecasts with subsequent one-year reversion to the historical mean loss rates. For loans that share similar risk characteristics and are collectively assessed, the Company uses a probability of default/loss given default cash flow method to determine the expected losses at the loan level. Loans that do not share similar risk characteristics are evaluated on an individual basis. Based on forecasted economic conditions and portfolio balances as of January 1, 2022, we recognized an increase to the opening allowance for credit losses of $2.5 million. The increase is primarily related to the change in methodology from estimating losses incurred as of the balance sheet date to estimating lifetime credit losses required by the CECL standard. The impact of adoption was not significant to the Bank's regulatory capital. The Bank did not elect to phase-in, over a three-year period, the standard's initial impact on regulatory capital as permitted by the regulatory transition rules. ASU 2019-05 – Financial Instruments-Credit Losses (Topic 326). In May 2019, the FASB issued ASU No. 2019-05. This ASU allows entities to irrevocably elect, upon adoption of ASU 2016-13, the fair value option for financial instruments that (1) were previously recorded at amortized cost and (2) are within the scope of ASC 326-20 if the instruments are eligible for the fair value option under ASC 825-10. The fair value option election does not apply to HTM debt securities. Entities are required to make this election on an instrument-by-instrument basis. The Company adopted ASU 2019-05 concurrently upon adoption of ASU 2016-13. The adoption of CECL did not have a material effect on available-for-sale securities, which are predominantly composed of mortgage-backed securities issued by government sponsored entities and U.S. agencies and U.S. government obligations. Pending adoption ASU 2020-04 – Reference Rate Reform (Topic 848 ). In March 2020, the FASB issued guidance to provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The amendments are effective as of March 12, 2020 through December 31, 2022. The Company does not expect these amendments to have a material effect on its Consolidated Financial Statements. ASU Update 2022-02 – Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 9 Months Ended |
Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | INVESTMENT SECURITIES Amortized cost and fair values of investment securities at September 30, 2022 and December 31, 2021 are summarized as follows: September 30, 2022 (dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value AFS Securities Asset-backed securities issued by GSEs and U.S. Agencies Residential Mortgage Backed Securities ("MBS") $ 128,493 $ 13 $ 13,770 $ 114,736 Residential Collateralized Mortgage Obligations ("CMOs") 181,433 13 16,579 164,867 U.S. Agency 14,601 — 2,375 12,226 Asset-backed securities ("ABSs") issued by Others: Residential CMOs 9,363 — 260 9,103 Student Loan Trust ABSs 50,315 103 1,879 48,539 Municipal bonds 99,846 — 20,982 78,864 Corporate bonds 3,000 — 391 2,609 U.S. government obligations 36,831 — 3,273 33,558 Total AFS Securities $ 523,882 $ 129 $ 59,509 $ 464,502 Equity securities carried at fair value through income CRA investment fund $ 4,254 $ — $ — $ 4,254 Non-marketable equity securities Other equity securities $ 207 $ — $ — $ 207 Total Investment Securities $ 528,343 $ 129 $ 59,509 $ 468,963 December 31, 2021 (dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value AFS Securities Asset-backed securities issued by GSEs and U.S. Agencies Residential MBS $ 121,125 $ 1,057 $ 2,266 $ 119,916 Residential CMOs 198,780 710 2,367 197,123 U.S. Agency 14,433 11 140 14,304 Asset-backed securities issued by Others: Residential CMOs 220 5 4 221 Student Loan Trust ABSs 56,422 438 286 56,574 Municipal bonds 92,556 1,169 884 92,841 U.S. government obligations 16,942 — 82 16,860 Total AFS Securities $ 500,478 $ 3,390 $ 6,029 $ 497,839 Equity securities carried at fair value through income CRA investment fund $ 4,772 $ — $ — $ 4,772 Non-marketable equity securities Other equity securities $ 207 $ — $ — $ 207 Total Investment Securities $ 505,457 $ 3,390 $ 6,029 $ 502,818 The Company elected to exclude accrued interest receivable (“AIR”) from the amortized cost basis of debt securities disclosed throughout this footnote. AFS debt securities, AIR totaled $1.6 million and $1.1 million as of September 30, 2022, and December 31, 2021, respectively. AIR is included in the “accrued interest receivable” line item on the Company’s consolidated balance sheets. At September 30, 2022 and December 31, 2021, securities with an amortized cost of $55.6 million and $50.9 million were pledged to secure certain customer deposits. During the quarter ended September 30, 2022, the Company did not sell any securities. During the year ended December 31, 2021, the Company recognized net gains of $0.6 million on the sale of AFS securities with aggregate carrying values of $11.9 million. Management does not believe that the AFS debt securities in an unrealized loss position as of September 30, 2022 have credit loss impairment. As of September 30, 2022, and December 31, 2021, the gross unrealized loss positions were primarily related to mortgage-backed securities issued by U.S. government agencies or U.S. government sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government, are widely recognized as “risk free,” and have a long history of zero credit loss. The Company also performed credit reviews on municipal bonds issued by States and Political Subdivisions and asset backed securities issued by Student Loan Trust. Total gross unrealized losses were primarily attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. The Company does not intend to sell the investment securities that were in an unrealized loss position, and it is not more likely than not that the Company will be required to sell the investment securities before recovery of their amortized cost basis, which may be at maturity. Management believes that the securities will either recover in market value or be paid off as agreed. AFS Securities Gross unrealized losses and estimated fair value by length of time that individual AFS securities have been in a continuous unrealized loss position at September 30, 2022, and December 31, 2021 were as follows: September 30, 2022 Less Than 12 Months More Than 12 Months Total (dollars in thousands) Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Losses Asset-backed securities issued by GSEs and U.S. Agencies $ 69,403 $ 6,302 $ 220,175 $ 26,422 $ 289,578 $ 32,724 Asset-backed securities issued by Others 5,937 244 149 16 6,086 260 Student Loan Trust ABSs 6,536 1,000 34,823 879 41,359 1,879 Municipal bonds 38,786 8,927 40,078 12,055 78,864 20,982 Corporate bonds 2,609 391 — — 2,609 391 U.S. government obligations 18,656 1,232 14,902 2,041 33,558 3,273 $ 141,927 $ 18,096 $ 310,127 $ 41,413 $ 452,054 $ 59,509 December 31, 2021 Less Than 12 Months More Than 12 Months Total (dollars in thousands) Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Losses Asset-backed securities issued by GSEs and U.S. Agencies $ 205,891 $ 3,997 $ 41,327 $ 776 $ 247,218 $ 4,773 Asset-backed securities issued by Others — — 57 4 57 4 Student Loan Trust ABSs 21,640 281 2,226 5 23,866 286 Municipal bonds 47,314 776 6,696 108 54,010 884 U.S. government obligations 14,860 82 1,999 — 16,859 82 $ 289,705 $ 5,136 $ 52,305 $ 893 $ 342,010 $ 6,029 Maturities The amortized cost and estimated fair value of debt securities at September 30, 2022, and December 31, 2021 by contractual maturity, are shown below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call premiums or prepayment penalties. September 30, 2022 December 31, 2021 (dollars in thousands) Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Within one year $ 35,730 $ 31,680 $ 36,859 $ 36,665 Over one year through five years 137,433 121,856 121,308 120,668 Over five years through ten years 219,912 194,986 191,166 190,158 After ten years 130,807 115,980 151,145 150,348 Total AFS securities $ 523,882 $ 464,502 $ 500,478 $ 497,839 |
LOANS
LOANS | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Loans | LOANS Portfolio loans, net of deferred costs and fees, are summarized by type as follows at September 30, 2022: September 30, 2022 (dollars in thousands) Total % of Total Loans Portfolio Loans: Commercial real estate $ 1,202,660 68.98 % Residential first mortgages 83,081 4.77 % Residential rentals 282,365 16.20 % Construction and land development 23,197 1.33 % Home equity and second mortgages 26,054 1.49 % Commercial loans 41,615 2.39 % Consumer loans 5,754 0.33 % Commercial equipment 78,551 4.51 % Total portfolio loans (1) 1,743,277 100.00 % Less: Allowance for Credit Losses (22,027) (1.26) % Total net portfolio loans 1,721,250 U.S. SBA PPP loans (1) 1,211 Total net loans $ 1,722,461 Portfolio loans are summarized by type as follows at December 31, 2021: Portfolio Loans: December 31, 2021 Commercial real estate $ 1,115,485 70.66 % Residential first mortgages 91,120 5.77 % Residential rentals 195,035 12.35 % Construction and land development 35,590 2.25 % Home equity and second mortgages 25,638 1.62 % Commercial loans 50,574 3.20 % Consumer loans 3,002 0.19 % Commercial equipment 62,499 3.96 % Gross portfolio loans (1) 1,578,943 100.00 % Adjustments: Net deferred costs (133) (0.01) % Allowance for loan losses (18,417) (1.17) % (18,550) Net portfolio loans 1,560,393 Gross U.S. SBA PPP loans (1) 27,276 Net deferred fees (878) Net U.S. SBA PPP Loans 26,398 Total net loans $ 1,586,791 Total gross loans $ 1,606,219 (1) Excludes accrued interest receivable of $5.2 million and $4.5 million, at September 30, 2022 and December 31, 2021, respectively. The Company has segregated its loans into portfolio loans and U.S. SBA PPP loans at December 31, 2021. Deferred Costs/Fees Portfolio net deferred fees of $1.4 million at September 30, 2022 included deferred fees paid by customers of $5.6 million offset by deferred costs of $4.2 million. Deferred loan costs include premiums paid for the purchase of residential first mortgages and deferred loan origination costs in accordance with ASC 310-20. Net deferred loan fees of $0.1 million at December 31, 2021 included deferred fees paid by customers of $4.1 million offset by deferred costs of $4.0 million. U.S. SBA PPP loan net deferred fees of $41,000 at September 30, 2022 included deferred fees paid by the U.S. SBA of $44,000 partially offset by deferred costs of $3,000. U.S. SBA PPP net deferred loan fees of $0.2 million at December 31, 2021 included deferred fees paid by the SBA of $0.2 million offset by deferred costs of $18,000. The net deferred fees are being amortized as a component of interest income through the contractual maturity date of each U.S. SBA PPP loan. Net deferred fees include fees received by participant banks for each U.S. SBA PPP loan underwritten and funded net of costs incurred to underwrite the loans. Net deferred fees will be recognized in income when the U.S. SBA PPP loan is forgiven or paid. Risk Characteristics of Portfolio Segments Concentrations of Credit - Loans are primarily made within the Company’s operating footprint of Southern Maryland and the greater Fredericksburg area of Virginia. Real estate loans can be affected by the condition of the local real estate market. Commercial and industrial loans can be affected by the local economic conditions. The commercial loan portfolio has business loans secured by real estate and real estate development loans. At September 30, 2022 and December 31, 2021, the Company had no loans outstanding with foreign entities. The Company manages its credit products and exposure to credit losses (credit risk) by the following specific portfolio segments (classes), which are levels at which the Company develops and documents its allowance for loan loss methodology. These segments are: Commercial Real Estate (“CRE”) Commercial and other real estate projects include office, medical and professional buildings, retail locations, churches, other special purpose buildings and commercial construction. Commercial construction balances were 7.5% and 6.5% of the CRE portfolio at September 30, 2022 and December 31, 2021, respectively. The Bank offers both fixed-rate and adjustable-rate loans under these product lines. The primary security on a commercial real estate loan is the real property and the leases that produce income for the real property. Loans secured by commercial real estate are generally limited to 80% of the lower of the appraised value or sales price at origination and have an initial contractual loan payment period ranging from three Because payments on loans secured by such properties are often dependent on the successful operation or management of the properties, repayment of such loans may be subject to adverse conditions in the real estate market or the economy. Residential First Mortgages Residential first mortgage loans are generally long-term (10 to 30 years) amortizing loans. The Bank’s residential portfolio has both fixed-rate and adjustable-rate residential first mortgages. The annual and lifetime limitations on interest rate adjustments may constrain interest rate increases on these loans. There are also credit risks resulting from potential increased costs to the borrower as a result of repricing of adjustable-rate mortgage loans. During periods of rising interest rates, the risk of default on adjustable-rate mortgage loans may increase due to the upward adjustment of interest cost to the borrower. The Bank’s adjustable rate residential first mortgage portfolio was $13.4 million or 0.8% of total portfolio loans of $1.7 billion at September 30, 2022 compared to $18.9 million or 1.2% of total gross portfolio loans of $1.6 billion at December 31, 2021. The Bank generally retains the right to service loans sold for a payment based upon a percentage (generally 0.25% of the outstanding loan balance). As of September 30, 2022 and December 31, 2021, the Bank serviced $20.0 million and $20.9 million, respectively, in residential mortgage loans for others. Residential Rentals Residential rental mortgage loans are amortizing long-term loans. Loans secured by residential rental properties are generally limited to 80% of the lower of the appraised value or sales price at origination and have an initial contractual loan payment period ranging from three Loans secured by residential rental properties involve greater risks than 1-4 family residential mortgage loans. Although, there are similar risk characteristics shared with commercial real estate loans, the balances for the loans secured by residential rental properties are generally smaller. Payments on loans secured by residential rental properties are dependent on the successful operation of the properties; and repayment of these loans may be subject to adverse conditions in the rental real estate market or the economy than similar owner-occupied properties. Construction and Land Development The Bank offers loans for the construction of residential dwellings. These loans are secured by the real estate under construction as well as by guarantees of the principals involved. In addition, the Bank offers loans to acquire and develop land. Construction and Land Development loans are dependent on the successful completion of the underlying project, or the borrowers guarantee to repay the loan. As such, they are subject to the risks of the project including the borrower’s ability to successfully manage construction and development activities. The repayment of these loans is also subject to economic risks such as changing prices and interest rates. Home Equity and Second Mortgage Loans The Bank maintains a portfolio of home equity and second mortgage loans. These products contain a higher risk of default than residential first mortgages as in the event of foreclosure, the first mortgage would need to be paid off prior to collection of the second mortgage. Commercial Loans Commercial loans including lines of credit are short-term loans (5 years or less) that are secured by the equipment financed, the guarantees of the borrower, and other collateral. These loans are dependent on the success of the underlying business or the strength of the guarantor. Consumer Loans Consumer loans consist of loans secured by automobiles, boats, recreational vehicles and trucks. The Bank also makes home improvement loans and offers both secured and unsecured personal lines of credit and credit card loans. The repayment of these loans is dependent on the continued financial stability of the customer. Commercial Equipment Loans These loans consist primarily of fixed-rate, short-term loans collateralized by a commercial customer’s equipment or secured by real property, accounts receivable, or other security as determined by the Bank. Commercial loans are dependent on the success of the underlying business or the strength of the guarantor. U.S. SBA PPP Loans U.S. SBA PPP loans are fully guaranteed by the Small Business Administration and the Bank's ACL does not include an allowance for U.S. SBA PPP loans. Management believes all U.S. SBA PPP loans were underwritten in accordance with the program's guidelines. Loans Non-accrual loans as of September 30, 2022 and December 31, 2021 were as follows: September 30, 2022 (dollars in thousands) Nonaccrual with No Allowance for Credit Losses Nonaccrual with Total Nonaccrual Loans Commercial real estate $ 4,577 $ 84 $ 4,661 Residential rentals 1,153 — 1,153 Home equity and second mortgages 240 — 240 Commercial loans — 25 25 Commercial equipment 211 — 211 Total $ 6,181 $ 109 $ 6,290 Interest Income on Nonaccrual Loans $ 63 $ — $ 63 September 30, 2022 (dollars in thousands) Non-accrual Delinquent Loans Non-accrual Current Loans Total Non-accrual Loans Commercial real estate $ — $ 4,661 $ 4,661 Residential rentals 454 699 1,153 Home equity and second mortgages 124 116 240 Commercial loans — 25 25 Commercial equipment — 211 211 $ 578 $ 5,712 $ 6,290 December 31, 2021 (dollars in thousands) Non-accrual Delinquent Loans Non-accrual Current Loans Total Non-accrual Loans Commercial real estate $ — $ 4,890 $ 4,890 Residential first mortgages 450 — 450 Residential rentals 252 690 942 Home equity and second mortgages 202 399 601 Commercial equipment — 691 691 U.S. SBA PPP loans 57 — 57 $ 961 $ 6,670 $ 7,631 Non-accrual loans decreased $1.3 million from $7.6 million or 0.48% of total loans at December 31, 2021 to $6.3 million or 0.36% of total loans at September 30, 2022. Loans can be current but classified as non-accrual due to customer operating results or payment history. All interest accrued but not collected from loans that are placed on non-accrual or charged-off is reversed against interest income. In accordance with the Company’s policy, such interest income is recognized on a cash basis or cost-recovery method, until qualifying for return to accrual status. At December 31, 2021, there were $6.7 million (87%) of non-accrual loans were current with all payments of principal and interest with no impairment and $1.0 million (13%) of non-accrual loans were delinquent with specific valuation reserves of $0.3 million. Non-accrual loans at September 30, 2022 and December 31, 2021 included no delinquent TDRs. Non-accrual loans on which the recognition of interest has been discontinued, which did not have a specific allowance for impairment, amounted to $6.2 million and $7.4 million at September 30, 2022 and December 31, 2021, respectively. Interest due but not recognized on these balances at September 30, 2022 and December 31, 2021 was $36,000 and $0.1 million, respectively. Non-accrual loans with a specific allowance for impairment amounted to $0.1 million and $0.3 million at September 30, 2022 and December 31, 2021, respectively. Interest due but not recognized on these balances at September 30, 2022 and December 31, 2021 was $1,000 and $1,000, respectively. The Company considers a loan to be past due or delinquent when the terms of the contractual obligation are not met by the borrower. Regardless of payment status, as long as cash flows can be reasonably estimated, the associated discount on these loan pools results in income recognition. An analysis of days past due ("DPD") loans as of September 30, 2022 follows: September 30, 2022 (dollars in thousands) 31-60 DPD 61-89 DPD 90 DPD and 90 DPD and Not Accruing Total Past Due Current Non-Accrual Loans Current Accrual Loans Total Loans Commercial real estate $ — $ — $ — $ — $ — $ 4,661 $ 1,197,999 $ 1,202,660 Residential first mortgages — — — — — — 83,081 83,081 Residential rentals 32 181 — 273 486 699 281,180 282,365 Construction and land development — — — — — — 23,197 23,197 Home equity and second mortgages 204 — — 124 328 116 25,610 26,054 Commercial loans — — — — — 25 41,590 41,615 Consumer loans 19 5 31 — 55 — 5,699 5,754 Commercial equipment — — — — — 211 78,340 78,551 U.S. SBA PPP 272 — — — 272 — 939 1,211 Total Loans $ 527 $ 186 $ 31 $ 397 $ 1,141 $ 5,712 $ 1,737,635 $ 1,744,488 Loan delinquency (total past due) decreased $0.3 million from $1.4 million, or 0.09% of loans, at December 31, 2021 to $1.1 million, or 0.07% of loans, at September 30, 2022. PCI loans are included as a single category in the table below as management believes there is a lower likelihood of aggregate loss related to these loan pools. Additionally, PCI loans are discounted to allow for the accretion of income on a level yield basis over the life of the loan based on expected cash flows. An analysis of days past due loans as of December 31, 2021 follows: December 31, 2021 (dollars in thousands) 31-60 Days 61-89 Days 90 or Greater Days Total Past Due PCI Loans Current Total Loan Receivables Commercial real estate $ — $ — $ — $ — $ 1,116 $ 1,114,369 $ 1,115,485 Residential first mortgages — 277 450 727 — 90,393 91,120 Residential rentals — 42 252 294 — 194,741 195,035 Construction and land development — — — — — 35,590 35,590 Home equity and second mortgages 200 — 202 402 — 25,236 25,638 Commercial loans — — — — — 50,574 50,574 Consumer loans — — — — — 3,002 3,002 Commercial equipment — — — — — 62,499 62,499 Total portfolio loans $ 200 $ 319 $ 904 $ 1,423 $ 1,116 $ 1,576,404 $ 1,578,943 U.S. SBA PPP loans $ 9 $ 40 $ 57 $ 106 $ — $ 27,170 $ 27,276 There were no loans that were past due 90 days or greater accruing interest at December 31, 2021. Allowance for Credit Losses ("ACL") The following tables detail activity in the ACL at and for the three and nine months ended September 30, 2022 and 2021. An allocation of the allowance to one category of loans does not prevent the Company from using that allowance to absorb losses in a different category. Three Months Ended September 30, 2022 (dollars in thousands) Beginning Balance Charge-offs Recoveries Provisions Ending Balance Commercial real estate $ 16,833 $ — $ — $ 203 $ 17,036 Residential first mortgages 255 — 14 (32) 237 Residential rentals 1,660 — — 885 2,545 Construction and land development 166 — — 31 197 Home equity and second mortgages 143 — — (1) 142 Commercial loans 238 (49) 1 64 254 Consumer loans 132 (14) — 24 142 Commercial equipment 1,977 (29) 6 (480) 1,474 $ 21,404 $ (92) $ 21 $ 694 $ 22,027 Three Months Ended September 30, 2021 (dollars in thousands) Beginning Balance Charge-offs Recoveries Provisions Ending Balance Commercial real estate $ 13,918 $ (491) $ 4 $ (12) $ 13,419 Residential first mortgages 847 — — 65 912 Residential rentals 1,186 — — 614 1,800 Construction and land development 332 — — 36 368 Home equity and second mortgages 242 — 1 6 249 Commercial loans 1,113 — 529 (733) 909 Consumer loans 28 — — 14 42 Commercial equipment 798 — 20 10 828 $ 18,464 $ (491) $ 554 $ — $ 18,527 Purchase Credit Impaired** $ 52 $ — $ — $ — $ 52 Nine Months Ended September 30, 2022 (dollars in thousands) Beginning Balance Impact of ASC Charge-offs Recoveries Provisions Ending Balance Commercial real estate $ 13,095 $ 3,734 $ (280) $ — $ 487 $ 17,036 Residential first mortgages 1,002 (679) (111) 14 11 237 Residential rentals 2,175 (586) — — 956 2,545 Construction and land development 260 (82) — — 19 197 Home equity and second mortgages 274 (86) — 1 (47) 142 Commercial loans 582 (290) (99) 2 59 254 Consumer loans 58 2 (20) — 102 142 Commercial equipment 971 483 (29) 67 (18) 1,474 $ 18,417 $ 2,496 $ (539) $ 84 $ 1,569 $ 22,027 _______________________________________ ** There is no allowance for credit loss on the SBA PPP portfolios. A more detailed roll forward schedule will be presented if an allowance is required. Nine Months Ended September 30, 2021 (dollars in thousands) Beginning Balance Charge-offs Recoveries Provisions Ending Balance Commercial real estate $ 13,744 $ (1,739) $ 6 $ 1,408 $ 13,419 Residential first mortgages 1,305 (142) — (251) 912 Residential rentals 1,413 (46) — 433 1,800 Construction and land development 401 — — (33) 368 Home equity and second mortgages 261 — 4 (16) 249 Commercial loans 1,222 (76) 539 (776) 909 Consumer loans 20 — — 22 42 Commercial equipment 1,058 (34) 57 (253) 828 $ 19,424 $ (2,037) $ 606 $ 534 $ 18,527 Purchase Credit Impaired** $ — $ — $ — $ 52 $ 52 _______________________________________ ** There is no allowance for loan loss on the PCI or the SBA PPP portfolios. A more detailed roll forward schedule will be presented if an allowance is required. The following table presents the amortized cost basis of collateral-dependent loans by class of loans. September 30, 2022 (dollars in thousands) Business/Other Assets Real Estate Commercial real estate $ — $ 4,660 Residential first mortgages — — Residential rentals — 972 Home equity and second mortgages — 240 Commercial loans 25 — Commercial equipment 645 — Total $ 670 $ 5,872 Credit Quality Indicators Credit quality indicators as of September 30, 2022 were as follows: Credit Risk Profile by Internally Assigned Grade The risk category of loans by class of loans is as follows: Term Loans by Origination Year (dollars in thousands) Prior 2018 2019 2020 2021 2022 Revolving Loans Total Commercial Real Estate Pass $ 335,465 $ 74,482 $ 107,720 $ 188,070 $ 282,781 $ 187,151 $ — $ 1,175,669 Watch 5,588 4,216 — 5,567 — 6,960 — 22,331 Special Mention — — — — — — — — Substandard 808 — 2,999 — 853 — — 4,660 Total $ 341,861 $ 78,698 $ 110,719 $ 193,637 $ 283,634 $ 194,111 $ — $ 1,202,660 Residential Rentals Pass $ 45,188 $ 4,495 $ 21,141 $ 42,263 $ 65,468 $ 102,838 $ — $ 281,393 Watch — — — — — — — — Special Mention — — — — — — — — Substandard 972 — — — — — — 972 Total $ 46,160 $ 4,495 $ 21,141 $ 42,263 $ 65,468 $ 102,838 $ — $ 282,365 Construction and Land Development Pass $ 4,550 $ 8,987 $ 5,094 $ 1,399 $ 2,529 $ 638 $ — $ 23,197 Watch — — — — — — — — Special Mention — — — — — — — — Substandard — — — — — — — — Total $ 4,550 $ 8,987 $ 5,094 $ 1,399 $ 2,529 $ 638 $ — $ 23,197 Commercial Loans Pass $ 23,516 $ 2,628 $ 2,708 $ 1,868 $ 7,792 $ 3,078 $ — $ 41,590 Watch — — — — — — — — Special Mention — — — — — — — — Substandard — — — 25 — — — 25 Total $ 23,516 $ 2,628 $ 2,708 $ 1,893 $ 7,792 $ 3,078 $ — $ 41,615 Commercial Equipment Pass $ 8,737 $ 5,363 $ 15,519 $ 7,995 $ 13,290 $ 27,100 $ — $ 78,004 Watch — 175 — — — — — 175 Special Mention — — 160 — — — — 160 Substandard — — 212 — — — — 212 Total $ 8,737 $ 5,538 $ 15,891 $ 7,995 $ 13,290 $ 27,100 $ — $ 78,551 Total loans by risk category $ 424,824 $ 100,346 $ 155,553 $ 247,187 $ 372,713 $ 327,765 $ — $ 1,628,388 Loans evaluated by performance category are as follows: Term Loans by Origination Year (dollars in thousands) Prior 2018 2019 2020 2021 2022 Revolving Loans Total Residential First Mortgages Performing $ 39,498 $ 3,891 $ 19,542 $ 8,577 $ 5,279 $ 6,294 $ — $ 83,081 Non-performing — — — — — — — — Total $ 39,498 $ 3,891 $ 19,542 $ 8,577 $ 5,279 $ 6,294 $ — $ 83,081 Home Equity and Second Mortgages Performing $ 15,900 $ 1,383 $ 933 $ 1,384 $ 3,881 $ 2,474 $ — $ 25,955 Non-performing 99 — — — — — — 99 Total $ 15,999 $ 1,383 $ 933 $ 1,384 $ 3,881 $ 2,474 $ — $ 26,054 Consumer Loans Performing $ 42 $ 3 $ 108 $ 139 $ 678 $ 850 $ 3,903 $ 5,723 Non-performing — — 31 31 Total $ 42 $ 3 $ 108 $ 139 $ 678 $ 850 $ 3,934 $ 5,754 U.S. SBA PPP Loans Performing $ — $ — $ — $ — $ 1,211 $ — $ — $ 1,211 Non-performing — — — — — — — — Total $ — $ — $ — $ — $ 1,211 $ — $ — $ 1,211 Total loans evaluated by performing status $ 55,539 $ 5,277 $ 20,583 $ 10,100 $ 11,049 $ 9,618 $ 3,934 $ 116,100 Total Recorded Investment $ 480,363 $ 105,623 $ 176,136 $ 257,287 $ 383,762 $ 337,383 $ 3,934 $ 1,744,488 Credit quality indicators as of December 31, 2021 were as follows: Commercial Real Estate Construction and Land Development Residential Rentals (dollars in thousands) 12/31/2021 12/31/2021 12/31/2021 Unrated $ — $ — $ — Pass 1,111,857 35,590 194,093 Special mention — — — Substandard 3,628 — 942 Doubtful — — — Loss — — — Total $ 1,115,485 $ 35,590 $ 195,035 Commercial Loans Commercial Equipment Total Commercial Portfolios (dollars in thousands) 12/31/2021 12/31/2021 12/31/2021 Unrated $ — $ — $ — Pass 50,574 62,326 1,454,440 Special mention — — — Substandard — 173 4,743 Doubtful — — — Loss — — — Total $ 50,574 $ 62,499 $ 1,459,183 Non-Commercial Portfolios ** U.S. SBA PPP Loans Total Loans Portfolios (dollars in thousands) 12/31/2021 12/31/2021 12/31/2021 Unrated $ 100,403 $ 27,276 $ 127,679 Pass 18,889 — 1,473,329 Special mention — — — Substandard 468 — 5,211 Doubtful — — — Loss — — — Total $ 119,760 $ 27,276 $ 1,606,219 _______________________________________ ** Non-commercial portfolios are generally evaluated based on payment activity but may be risk graded if part of a larger commercial relationship or are credit impaired (e.g. non-accrual loans, TDRs). Credit Risk Profile Based on Payment Activity Residential First Mortgages Home Equity and Second Mortgages Consumer Loans (dollars in thousands) 12/31/2021 12/31/2021 12/31/2021 Performing $ 90,670 $ 25,436 $ 3,002 Nonperforming 450 202 — Total $ 91,120 $ 25,638 $ 3,002 A risk-grading scale is used to assign grades to commercial relationships, which include commercial real estate, residential rentals, construction and land development, commercial loans and commercial equipment loans. Loans are graded at inception, annually thereafter when financial statements are received and at other times when there is an indication that a credit may have weakened or improved. At December 31, 2020 and prior, only commercial loan relationships with an aggregate exposure to the Bank of $1,000,000 or greater were subject to being risk rated. During the quarter ended March 31, 2021, the Bank's policy was amended to risk rate all commercial loan relationships. Home equity and second mortgages and consumer loans are evaluated for creditworthiness in underwriting and are monitored based on borrower payment history. Residential first mortgages are evaluated for creditworthiness during credit due diligence before being purchased. Residential first mortgages, home equity and second mortgages and consumer loans are classified as unrated unless they are part of a larger commercial relationship that requires grading or are TDRs or nonperforming loans with an Other Assets Especially Mentioned ("OAEM") or higher risk rating due to a delinquency payment history. The overall quality of the Bank’s loan portfolio is assessed using the Bank’s risk-grading scale, the level and trends of net charge-offs, nonperforming loans and delinquencies, the performance of TDRs and the general economic conditions in the Company’s geographical market. This review process is assisted by frequent internal reporting of loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming and potential problem loans. Credit quality indicators and allowance factors are adjusted based on management’s judgment during the monthly and quarterly review process. Loans subject to risk ratings are graded on a scale of one to ten. The Company considers loans rated substandard, doubtful and loss as classified assets for regulatory and financial reporting. Ratings 1 thru 6 - Pass Ratings 1 thru 6 have asset risks ranging from excellent-low to adequate. The specific rating assigned considers customer history of earnings, cash flows, liquidity, leverage, capitalization, consistency of debt service coverage, the nature and extent of customer relationship and other relevant specific business factors such as the stability of the industry or market area, changes to management, litigation or unexpected events that could have an impact on risks. Rating 7 - OAEM (Other Assets Especially Mentioned) – Special Mention These credits, while protected by the financial strength of the borrowers, guarantors or collateral, have reduced quality due to economic conditions, less than adequate earnings performance or other factors which require the lending officer to direct more than normal attention to the credit. Financing alternatives may be limited and/or command higher risk interest rates. OAEM loans relationships are reviewed at least quarterly. Rating 8 - Substandard Substandard assets are assets that are inadequately protected by the sound worth or paying capacity of the borrower or of the collateral pledged. Substandard loans are the first adversely classified loans on the Bank's watchlist. These assets have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the possibility that the Bank will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified substandard. The loans may have a delinquent history or combination of weak collateral, weak guarantor strength or operating losses. When a loan is assigned to this category the Bank may estimate a specific reserve in the loan loss allowance analysis. These assets listed may include assets with histories of repossessions or some that are non-performing bankruptcies. These relationships will be reviewed at least quarterly. Rating 9 - Doubtful Doubtful assets have many of the same characteristics of Substandard with the exception that the Bank has determined that loss is not only possible but is probable and the risk is close to certain that loss will occur. When a loan is assigned to this category the Bank will identify the probable loss and the loan will receive a specific reserve in the loan loss allowance analysis. These relationships will be reviewed at least quarterly. Rating 10 – Loss Once an asset is identified as a definite loss to the Bank, it will receive the classification of “loss.” There may be some future potential recovery; however, it is more practical to write off the loan at the time of classification. Losses will be taken in the period in which they are determined to be non-collectable. TDRs included in the impaired loan schedules above, as of September 30, 2022 and December 31, 2021 were as follows: September 30, 2022 December 31, 2021 (dollars in thousands) Number of Loans Recorded Investments Number of Loans Recorded Investments Commercial equipment 1 $ 433 1 $ 447 Total TDRs 1 $ 433 1 $ 447 Less: TDRs included in non-accrual loans — — — — Total accrual TDR loans 1 $ 433 1 $ 447 The Company had no specific reserves on TDRs at September 30, 2022 and at December 31, 2021. During the year ended December 31, 2021, TDR disposals, which included payoffs and refinancing, included three loans totaling $0.1 million. TDR loan principal curtailments were $5,000 and $12,000 for the three and nine months ended September 30, 2022, respectively and $19,000 for the year ended December 31, 2021. There were no TDRs added during the three months ended September 30, 2022 or the year ended December 31, 2021. Prior to adoption of CECL Impaired Loans and Troubled Debt Restructures (“TDRs”) Impaired loans, including TDRs at December 31, 2021 and September 30, 2021, were as follows: December 31, 2021 (dollars in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance YTD Average Recorded Investment YTD Interest Income Recognized Commercial real estate $ 4,994 $ 4,797 $ 93 $ 4,890 $ 93 $ 4,866 $ 254 Residential first mortgages 879 866 — 866 — 874 32 Residential rentals 982 942 — 942 — 959 48 Home equity and second mortgages 626 601 — 601 — 604 14 Commercial equipment 1,200 1,022 173 1,195 173 2,184 99 Total $ 8,681 $ 8,228 $ 266 $ 8,494 $ 266 $ 9,487 $ 447 September 30, 2021 (dollars in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance Quarter Average Recorded Investment Quarter Interest Income Recognized YTD Average Recorded Investment YTD Interest Income Recognized Commercial real estate $ 3,205 $ 2,377 $ 759 $ 3,136 $ 291 $ 3,146 $ 25 $ 3,177 $ 80 Residential first mortgages 884 872 — 872 — 873 7 878 25 Residential rentals 990 961 — 961 — 961 13 956 38 Home equity and second mortgages 602 580 — 580 — 581 3 583 10 Commercial equipment 490 455 32 487 32 489 5 493 16 Total $ 6,171 $ 5,245 $ 791 $ 6,036 $ 323 $ 6,050 $ 53 $ 6,087 $ 169 The following tables detail loan receivable and allowance balances disaggregated on the basis of the Company’s impairment methodology at September 30, 2021 and December 31, 2021. December 31, 2021 September 30, 2021 (dollars in thousands) Ending balance: individually evaluated for impairment Ending balance: collectively evaluated for impairment Purchased Credit Impaired Total Ending balance: individually evaluated for impairment Ending balance: collectively evaluated for impairment Purchased Credit Impaired Total Loan Receivables: Commercial real estate $ 4,890 $ 1,109,479 $ 1,116 $ 1,115,485 $ 3,136 $ 1,084,356 $ 1,144 $ 1,088,636 Residential first mortgages 866 90,254 — 91,120 872 95,963 — 96,835 Residential rentals 942 194,093 — 195,035 961 171,121 — 172,082 Construction and land development — 35,590 — 35,590 — 37,139 — 37,139 Home equity and second mortgages 601 25,037 — 25,638 580 25,938 — 26,518 Commercial loans — 50,574 — 50,574 — 48,327 — 48,327 Consumer loans — 3,002 — 3,002 — 2,168 — 2,168 Commercial equipment 1,195 61,304 — 62,499 487 60,859 — 61,346 $ 8,494 $ 1,569,333 $ 1,116 $ 1,578,943 $ 6,036 $ 1,525,871 $ 1,144 $ 1,533,051 Allowance for credit losses: Commercial real estate $ 93 $ 13,002 $ — $ 13,095 $ 291 $ 13,128 $ 52 $ 13,471 Residential first mortgages — 1,002 — 1,002 — 912 — 912 Residential rentals — 2,175 — 2,175 — 1,800 — 1,800 Construction and land development — 260 — 260 — 368 — 368 Home equity and second mortgages — 274 — 274 — 249 — 249 Commercial loans — 582 — 582 — 909 — 909 Consumer loans — 58 — 58 — 42 — 42 Commercial equipment 173 798 — 971 32 796 — 828 $ 266 $ 18,151 $ — $ 18,417 $ 323 $ 18,204 $ 52 $ 18,579 Purchased Credit-Impaired Loans and Acquired Loans ("PCI") Determining the fair value of the PCI loans at the time of acquisition required the Company to estimate cash flows expected to result from those loans considering prepayment assumptions and to discount those cash flows at appropriate rates of interest. For such loans, the excess of cash flows expected at acquisition over the estimated fair value is recognized as interest income over the remaining lives of the loans and is called accretable yield. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition reflects the impact of estimated credit losses and is called the nonaccretable difference. In accordance with GAAP upon the adoption of CECL, there was no carryover of a previously established allowance for credit losses from acquisition. A summary of changes in the accretable yield for PCI loans for the three and nine months ended September 30, 2021 and the year ended December 31, 2021 follows: Three Months Ended September 30, Nine Months Ended September 30, Year Ended (dollars in thousands) 2021 2021 December 31, 2021 Accretable yield, beginning of period $ 324 $ 342 $ 342 Additions — — — Accretion (31) (92) (117) Reclassification from nonaccretable difference 15 29 43 Other changes, net (15) 14 55 Accretable yield, end of period $ 293 $ 293 $ 323 At December 31, 2021 acquired performing loans, which totaled $41.1 million, included a $0.8 million net acquisition accounting fair market value adjustment, representing a 1.25% discount; and PCI loans which totaled $1.1 million, included a $0.3 million adjustment, representing a 14.95% discount. During the three months ended September 30, 2021 there was $0.1 million of accretion interest. Accounting standards require a periodic recast of the expected cash flows on the PCI loan portfolio. The recast was performed during th |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill and other intangible assets are presented in the tables below. (dollars in thousands) As of September 30, 2022 As of December 31, 2021 Goodwill $ 10,835 $ 10,835 As of September 30, 2022 As of December 31, 2021 (dollars in thousands) Gross Carrying Amount Accumulated Amortization Net Intangible Assets Gross Carrying Amount Accumulated Amortization Net Intangible Assets Core deposit intangible ("CDI") $ 3,590 $ (2,865) $ 725 $ 3,590 $ (2,558) $ 1,032 The estimated aggregate future amortization expense for intangible assets remaining as of September 30, 2022 is as follows: (dollars in thousands) Remainder of 2022 $ 91 2023 302 2024 205 2025 109 2026 18 $ 725 At September 30, 2022 the Company had goodwill of $10.8 million or 6.05% of equity and CDI of $0.7 million or 0.40% of equity. |
OTHER REAL ESTATE OWNED ("OREO"
OTHER REAL ESTATE OWNED ("OREO") | 9 Months Ended |
Sep. 30, 2022 | |
Real Estate [Abstract] | |
Other Real Estate Owned ("OREO") | OTHER REAL ESTATE OWNED (“OREO”) OREO assets are presented net of the valuation allowance. The Company considers OREO as classified assets for regulatory and financial reporting. OREO carrying amounts reflect management’s estimate of the realizable value of these properties incorporating current appraised values, local real estate market conditions and related costs. An analysis of activity follows. Nine Months Ended September 30, Years Ended December 31, (dollars in thousands) 2022 2021 2021 Balance at beginning of year $ — $ 3,109 $ 3,109 Additions of underlying property — — — Disposals of underlying property — (932) (1,722) Valuation allowance — (641) (1,387) Balance at end of period $ — $ 1,536 $ — Expenses applicable to OREO assets included the following. Nine Months Ended September 30, (dollars in thousands) 2022 2021 Valuation allowance $ — $ 641 Losses (gains) on dispositions — (16) Operating expenses 6 64 $ 6 $ 689 The Company had $0.1 million in loans secured by residential real estate for which formal foreclosure proceedings were in process as of September 30, 2022. There were no loans secured by residential real estate for which formal foreclosure proceedings were in the process as of December 31, 2021. |
DEPOSITS
DEPOSITS | 9 Months Ended |
Sep. 30, 2022 | |
Deposits, by Type [Abstract] | |
Deposits | DEPOSITS Deposits consist of the following: September 30, 2022 December 31, 2021 (dollars in thousands) Balance % Balance % Noninterest-bearing demand $ 647,432 30.45 % $ 445,778 21.68 % Interest-bearing: Demand 691,987 32.54 % 790,481 38.45 % Money market deposits 371,175 17.45 % 372,717 18.13 % Savings 123,564 5.81 % 119,767 5.82 % Certificates of deposit 292,399 13.75 % 327,421 15.92 % Total interest-bearing 1,479,125 69.55 % 1,610,386 78.32 % Total Deposits $ 2,126,557 100.00 % $ 2,056,164 100.00 % The aggregate amount of certificates of deposit that exceed the FDIC insurance limit of $250,000 at September 30, 2022 and December 31, 2021 was $55.1 million and $57.6 million, respectively. |
LEASE COMMITMENTS & CONTINGENCI
LEASE COMMITMENTS & CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEASE COMMITMENTS & CONTINGENCIES | LEASE COMMITMENTS & CONTINGENCIES Operating Leases The Company's, operating lease agreements are primarily for leases of branches and office space. Topic 842 requires operating lease agreements to be recognized on the consolidated balance sheet as a right-of-use-asset with a corresponding lease liability. The table below details the Right of Use asset (net of accumulated amortization), lease liability and other information related to the Company's operating leases: (dollars in thousands) September 30, 2022 December 31, 2021 Operating Leases Operating lease right of use asset, net $ 6,022 $ 6,124 Operating lease liability $ 6,288 $ 6,343 Weighted average remaining lease term 15.84 years 17.21 years Weighted average discount rate 3.50 % 3.51 % Remaining lease term - min 4.8 years 6.3 years Remaining lease term - max 22.0 years 23.0 years The table below details the Company's lease cost, which is included in occupancy expense in the Unaudited Consolidated Statements of Income. Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2022 2021 2022 2021 Operating lease cost $ 157 $ 146 $ 454 $ 489 Cash paid for lease liability $ 140 $ 150 $ 406 $ 485 A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liability is as follows: (dollars in thousands) As of September 30, 2022 Lease payments due: Within one year $ 569 After one but within two years 584 After two but within three years 611 After three but within four years 637 After four but within five years 629 After five years 5,375 Total undiscounted cash flows $ 8,405 Discount on cash flows 2,117 Total lease liability $ 6,288 |
LEASE COMMITMENTS & CONTINGENCIES | LEASE COMMITMENTS & CONTINGENCIES Operating Leases The Company's, operating lease agreements are primarily for leases of branches and office space. Topic 842 requires operating lease agreements to be recognized on the consolidated balance sheet as a right-of-use-asset with a corresponding lease liability. The table below details the Right of Use asset (net of accumulated amortization), lease liability and other information related to the Company's operating leases: (dollars in thousands) September 30, 2022 December 31, 2021 Operating Leases Operating lease right of use asset, net $ 6,022 $ 6,124 Operating lease liability $ 6,288 $ 6,343 Weighted average remaining lease term 15.84 years 17.21 years Weighted average discount rate 3.50 % 3.51 % Remaining lease term - min 4.8 years 6.3 years Remaining lease term - max 22.0 years 23.0 years The table below details the Company's lease cost, which is included in occupancy expense in the Unaudited Consolidated Statements of Income. Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2022 2021 2022 2021 Operating lease cost $ 157 $ 146 $ 454 $ 489 Cash paid for lease liability $ 140 $ 150 $ 406 $ 485 A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liability is as follows: (dollars in thousands) As of September 30, 2022 Lease payments due: Within one year $ 569 After one but within two years 584 After two but within three years 611 After three but within four years 637 After four but within five years 629 After five years 5,375 Total undiscounted cash flows $ 8,405 Discount on cash flows 2,117 Total lease liability $ 6,288 |
GUARANTEED PREFERRED BENEFICIAL
GUARANTEED PREFERRED BENEFICIAL INTEREST IN JUNIOR SUBORDINATED DEBENTURES (“TRUPs”) | 9 Months Ended |
Sep. 30, 2022 | |
Guaranteed Preferred Beneficial Interest in Junior Subordinated Debentures (TRUPs) [Abstract] | |
Guaranteed Preferred Beneficial Interest in Junior Subordinated Debentures ("TRUPs") | GUARANTEED PREFERRED BENEFICIAL INTEREST IN JUNIOR SUBORDINATED DEBENTURES (“TRUPs”) On June 15, 2005, Tri-County Capital Trust II (“Capital Trust II”), a Delaware business trust formed, funded and wholly-owned by the Company, issued $5.0 million of variable-rate capital securities in a private pooled transaction. The variable rate is based on the 90-day LIBOR rate plus 1.70%. The Trust used the proceeds from this issuance, along with the $0.2 million for Capital Trust II’s common securities, to purchase $5.2 million of the Company’s junior subordinated debentures. The interest rate on the debentures and the trust preferred securities is variable and adjusts quarterly. These capital securities qualify as Tier I capital and are presented in the Consolidated Balance Sheets as “Guaranteed Preferred Beneficial Interests in Junior Subordinated Debentures.” Both the capital securities of Capital Trust II and the junior subordinated debentures are scheduled to mature on June 15, 2035, unless called by the Company. On July 22, 2004, Tri-County Capital Trust I (“Capital Trust I”), a Delaware business trust formed, funded and wholly owned by the Company, issued $7.0 million of variable-rate capital securities in a private pooled transaction. The variable rate is based on the 90-day LIBOR rate plus 2.60%. The Trust used the proceeds from this issuance, along with the Company’s $0.2 million capital contribution for Capital Trust I’s common securities, to purchase $7.2 million of the Company’s junior subordinated debentures. The interest rate on the debentures and the trust preferred securities is variable and adjusts quarterly. These debentures qualify as Tier I capital and are presented in the Consolidated Balance Sheets as “Guaranteed Preferred Beneficial Interests in Junior Subordinated Debentures.” Both the capital securities of Capital Trust I and the junior subordinated debentures are scheduled to mature on July 22, 2034, unless called by the Company. |
SUBORDINATED NOTES
SUBORDINATED NOTES | 9 Months Ended |
Sep. 30, 2022 | |
Subordinated Borrowings [Abstract] | |
Subordinated Notes | SUBORDINATED NOTESOn October 14, 2020, the Company issued and sold $20.0 million in aggregate principal amount of its 4.75% Fixed to Floating Rate Subordinated Notes due 2030 (the "Notes"). The Notes were sold by the Company in a private offering. The Notes mature on October 15, 2030 and bear interest at a fixed rate of 4.75% to October 14, 2025. From October 15, 2025 to the maturity date or early redemption date, the interest rate will reset quarterly to the three-month Secured Overnight Financing Rate ("SOFR") plus 458 basis points. The Company may redeem the Notes at any time after October 14, 2025, and at any time in whole, but not in part, upon the occurrence of certain events. Any redemption of the Notes will be subject to prior regulatory approval. The Company incurred debt issuance costs for placement fees, legal and other out-of-pocket expenses of approximately $0.6 million, which are being amortized over the life of the Notes. The Company recognized amortization expense of $42,000 and $42,000 for the nine months ended September 30, 2022 and 2021, respectively. |
REGULATORY CAPITAL
REGULATORY CAPITAL | 9 Months Ended |
Sep. 30, 2022 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
Regulatory Capital | REGULATORY CAPITAL The Bank’s primary regulator is the Federal Deposit Insurance Corporation (“FDIC”). The Bank is subject to regulation, supervision and regular examination by the Maryland Commissioner of Financial Regulation (the “Commissioner”) and the FDIC. The Company is subject to regulation, examination and supervision by the Federal Reserve Board under the Bank Holding Company Act of 1956, as amended (the “BHCA”). The Company and Bank are subject to the Basel III Capital Rules which establish a comprehensive capital framework for U.S. banking organizations. The rules implement the Basel Committee’s “Basel III” framework for strengthening international capital standards as well as certain provisions of the Dodd-Frank Act. The Basel III Capital Rules define the components of capital and address other issues affecting the numerator in banking institutions’ regulatory capital ratios. The Basel III Capital Rules also address risk weights and other issues affecting the denominator in banking institutions’ regulatory capital ratios. The rules include a common equity Tier 1 capital to risk-weighted assets minimum ratio of 4.50%, a minimum ratio of Tier 1 capital to risk-weighted assets of 6.0%, require a minimum ratio (“Min. Ratio”) of Total Capital to risk-weighted assets of 8.0%, and require a minimum Tier 1 leverage ratio of 4.0%. A capital conservation buffer (“CCB”) is also established above the regulatory minimum capital requirements. The rules revised the definition and calculation of Tier 1 capital, Total Capital, and risk-weighted assets. As of September 30, 2022 and December 31, 2021, the Company and Bank were well-capitalized under the regulatory framework for prompt corrective action ("PCA") under the new Basel III Capital Rules. Management believes, as of September 30, 2022 and December 31, 2021, that the Company and the Bank met all capital adequacy requirements to which they were subject. The Company’s and the Bank’s actual regulatory capital amounts and ratios are presented in the following table. Regulatory Capital and Ratios Regulatory Minimum Ratio + CCB (1) The Company The Bank (dollars in thousands) September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Common equity $ 179,154 $ 208,133 $ 207,146 $ 236,561 Goodwill (10,835) (10,835) (10,835) (10,835) Core deposit intangible (net of deferred tax liability) (537) (766) (537) (766) AOCI losses 43,906 1,952 43,906 1,952 Common Equity Tier 1 Capital 211,688 198,484 239,680 226,912 TRUPs 12,000 12,000 — — Tier 1 Capital 223,688 210,484 239,680 226,912 Allowable reserve for credit losses and other Tier 2 adjustments 22,295 18,468 22,295 18,468 Subordinated notes 19,552 19,510 — — Tier 2 Capital $ 265,535 $ 248,462 $ 261,975 $ 245,380 Risk-Weighted Assets ("RWA") $ 1,856,827 $ 1,665,296 $ 1,855,483 $ 1,663,831 Average Assets ("AA") $ 2,340,703 $ 2,281,210 $ 2,338,751 $ 2,279,835 Common Tier 1 Capital to RWA 7.00% 11.40 % 11.92 % 12.92 % 13.64 % Tier 1 Capital to RWA 8.50% 12.05 12.64 12.92 13.64 Tier 2 Capital to RWA 10.50% 14.30 14.92 14.12 14.75 Tier 1 Capital to AA (Leverage) (2) n/a 9.56 9.23 10.25 9.95 ____________________________________ (1) The regulatory minimum capital ratio ("Min. Ratio") + the capital conservation buffer ("CCB"). (2) Tier 1 Capital to AA (Leverage) has no capital conservation buffer defined. The PCA well capitalized is defined as 5.00%. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The Company adopted FASB ASC Topic 820, “Fair Value Measurements” and FASB ASC Topic 825, “The Fair Value Option for Financial Assets and Financial Liabilities” , which provides a framework for measuring and disclosing fair value under U.S. GAAP. FASB ASC Topic 820 requires disclosures about the fair value of assets and liabilities recognized in the balance sheet in periods subsequent to initial recognition, whether the measurements are made on a recurring basis (for example, AFS investment securities) or on a nonrecurring basis (for example, impaired loans). FASB ASC Topic 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an 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. FASB ASC Topic 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company utilizes fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. AFS securities are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis such as loans held for investment and certain other assets. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets. Under FASB ASC Topic 820, the Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to determine the fair value. These hierarchy levels are: Level 1 inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date. Level 2 inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with the Company’s quarterly valuation process. Intra-quarter transfers in and out of level 3 assets and liabilities recorded at fair value on a recurring basis are disclosed. There were no such transfers during the quarter ended September 30, 2022 or the year ended December 31, 2021. Following is a description of valuation methodologies used for assets and liabilities recorded at fair value: Securities Available for Sale AFS investment securities are recorded at fair value on a recurring basis. Standard inputs include quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include mortgage-backed securities issued by government sponsored entities (“GSEs”), municipal bonds and corporate debt securities. Securities classified as Level 3 include asset-backed securities in less liquid markets. Equity Securities Carried at Fair Value Through Income Equity securities carried at fair value through income are recorded at fair value on a recurring basis. Standard inputs include quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 equity securities include those traded on an active exchange, such as the New York Stock Exchange. Level 2 equity securities include mutual funds with asset-backed securities issued by government sponsored entities (“GSEs”) as the underlying investment supporting the fund. Equity securities classified as Level 3 include mutual funds with asset-backed securities in less liquid markets. Loans held for sale The Company has elected to carry loans held for sale at fair value. This election reduces certain timing differences in the Consolidated Statement of Income and better aligns with the management of the portfolio from a business perspective. Fair value is derived from secondary market quotations for similar instruments. Gains and losses on sales of residential mortgage loans are recorded as a component of noninterest income in the Consolidated Statements of Income. As such, loans subjected to fair value adjustments are classified as Level 2 valuation. Loans Receivable The Company does not record loans at fair value on a recurring basis; however, from time to time, a loan is individually evaluated and an ACL is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan are segregated individually. Management estimates the fair value of individually evaluated loans using one of several methods, including the collateral value, market value of similar debt, or discounted cash flows. Individually evaluated loans not requiring an allowance are those for which the fair value of expected repayments or collateral exceed the recorded investment in such loans. At September 30, 2022 and December 31, 2021, substantially all of the individually evaluated loans were based upon the fair value of the collateral. In accordance with FASB ASC 820, loans where an allowance is established based on the fair value of collateral (loans with impairment) require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price (e.g., contracted sales price), the Company records the loan as nonrecurring Level 2. When the fair value of the impaired loan is derived from an appraisal, the Company records the loan as nonrecurring Level 3. Fair value is re-assessed at least quarterly or more frequently when circumstances occur that indicate a change in the fair value. The fair values of impaired loans that are not measured based on collateral values are measured using discounted cash flows and considered to be Level 3 inputs. Other Real Estate Owned ("OREO") OREO is adjusted for fair value upon transfer of the loans to foreclosed assets. Subsequently, OREO is reported at the lower of carrying value or fair value. Fair value is based on independent market prices, appraised value of the collateral or management’s estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price (e.g., contracted sales price), the Company records the foreclosed asset as nonrecurring Level 2. When the fair value is derived from an appraisal, the Company records the foreclosed asset at nonrecurring Level 3. Mortgage Banking Derivatives The mortgage banking derivative comprises interest rate lock commitments for residential loans to be sold on a best-efforts basis. The significant unobservable input used in the fair value measurement of the Bank's interest rate lock commitments is the pull-through rate, which represents the percentage of loans currently in a lock position which management estimates will ultimately close. The pull-through rate is estimated based on mortgage banking activity in 2021. All interest rate lock commitments are considered to be Level 3. Assets and Liabilities Recorded at Fair Value on a Recurring Basis The tables below present the recorded amount of assets as of September 30, 2022 and December 31, 2021 measured at fair value on a recurring basis. (dollars in thousands) September 30, 2022 Description of Asset Fair Value Level 1 Level 2 Level 3 AFS securities Asset-backed securities issued by GSEs and U.S. Agencies MBS $ 114,736 $ — $ 114,736 $ — CMOs 164,867 — 164,867 — U.S. Agency 12,226 — 12,226 — Asset-backed securities issued by Others: Residential CMOs 9,103 — 9,103 — Student Loan Trust ABSs 48,539 — 48,539 — Municipal bonds 78,864 — 78,864 — Corporate bonds 2,609 — 2,609 — U.S. government obligations 33,558 — 33,558 — Total AFS securities $ 464,502 $ — $ 464,502 $ — Equity securities carried at fair value through income CRA investment fund $ 4,254 $ — $ 4,254 $ — Non-marketable equity securities Other equity securities $ 207 $ — $ 207 $ — (dollars in thousands) December 31, 2021 Description of Asset Fair Value Level 1 Level 2 Level 3 AFS securities Asset-backed securities issued by GSEs and U.S. Agencies MBS $ 119,916 $ — $ 119,916 $ — CMOs 197,123 — 197,123 — U.S. Agency 14,304 — 14,304 — Asset-backed securities issued by others: Residential CMOs 221 — 221 — Student Loan Trust ABSs 56,574 — 56,574 — Municipal bonds 92,841 — 92,841 — U.S. government obligations 16,860 — 16,860 — Total AFS securities $ 497,839 $ — $ 497,839 $ — Equity securities carried at fair value through income CRA investment fund $ 4,772 $ — $ 4,772 $ — Non-marketable equity securities Other equity securities $ 207 $ — $ 207 $ — Mortgage banking derivative Interest rate lock commitments $ 28 $ — $ — $ 28 Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis The Company may be required to measure certain assets at fair value on a nonrecurring basis in accordance with U.S. GAAP. These include assets that are measured at the lower of cost or market that were recognized at fair value below cost at the end of the period. Loans with an allowance had unpaid principal balances of $0.1 million and $0.3 million at September 30, 2022 and December 31, 2021, respectively. The fair values of these loans were zero for both periods. There were no other assets measured at fair value on a nonrecurring basis as of September 30, 2022 and December 31, 2021. The following tables provide information describing the unobservable inputs used in Level 3 fair value measurements at September 30, 2022 and December 31, 2021. September 30, 2022 Fair Value Valuation Technique Unobservable Inputs Range (Weighted Average) (dollars in thousands) Description of Asset Loans with individually assessed loans $ — Third party appraisals and in-house equipment evaluations of fair value Management discount for equipment type and current market conditions 0% - 50% - 100% December 31, 2021 Fair Value Valuation Technique Unobservable Inputs Range (Weighted Average) (dollars in thousands) Description of Asset Interest rate lock commitments $ 28 Freddie Mac pricing of loans with comparable terms Pull-through rate 0% - 100% - 75% |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Investments, All Other Investments [Abstract] | |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS Financial instruments require disclosure of fair value information, whether or not recognized in the consolidated balance sheets, when it is practical to estimate the fair value. A financial instrument is defined as cash, evidence of an ownership interest in an entity or a contractual obligation which requires the exchange of cash. Certain items are specifically excluded from the financial instrument fair value disclosure requirements, including the Company’s common stock, OREO, premises and equipment and other assets and liabilities. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Therefore, any aggregate unrealized gains or losses should not be interpreted as a forecast of future earnings or cash flows. Furthermore, the fair values disclosed should not be interpreted as the aggregate current value of the Company. The Company’s estimated fair values of financial instruments are presented in the following tables. September 30, 2022 Carrying Amount Fair Value Fair Value Measurements Description of Asset (dollars in thousands) Level 1 Level 2 Level 3 Assets Investment securities - AFS $ 464,502 $ 464,502 $ — $ 464,502 $ — Equity securities carried at fair value through income 4,254 4,254 — 4,254 — Non-marketable equity securities in other financial institutions 207 207 — 207 — FHLB Stock 1,226 1,226 — 1,226 — Net loans receivable 1,722,461 1,654,640 — — 1,654,640 Accrued interest receivable 6,791 6,791 — 6,791 — Investment in BOLI 39,583 39,583 — 39,583 — Liabilities Savings, NOW and money market accounts $ 1,834,158 $ 1,834,158 $ — $ 1,834,158 $ — Time deposits 292,399 292,034 — 292,034 — TRUPs 12,000 10,159 — 10,159 — Subordinated notes 19,552 18,610 — 18,610 — See the Company’s methodologies disclosed in Note 21 of the Company’s 2021 Form 10-K for the fair value methodologies used as of December 31, 2021: December 31, 2021 Carrying Amount Fair Value Fair Value Measurements Description of Asset (dollars in thousands) Level 1 Level 2 Level 3 Assets Investment securities - AFS $ 497,839 $ 497,839 $ — $ 497,839 $ — Equity securities carried at fair value through income 4,772 4,772 — 4,772 — Non-marketable equity securities in other financial institutions 207 207 — 207 — FHLB Stock 1,472 1,472 — 1,472 — Net loans receivable 1,586,791 1,578,032 — — 1,578,032 Accrued interest receivable 5,588 5,588 — 5,588 — Investment in BOLI 38,932 38,932 — 38,932 — Mortgage ranking derivatives 28 28 — — 28 Liabilities Savings, NOW and money market accounts $ 1,728,743 $ 1,728,743 $ — $ 1,728,743 $ — Time deposits 327,421 328,083 — 328,083 — Long-term debt 12,231 12,391 — 12,391 — TRUPs 12,000 11,589 — 11,589 — Subordinated notes 19,510 20,979 — 20,979 — At September 30, 2022 and December 31, 2021, the Company had outstanding loan commitments and standby letters of credit with customers of $59.1 million and $64.4 million, respectively, and $23.0 million and $22.0 million, respectively. Additionally, at September 30, 2022 and December 31, 2021, customers had $261.1 million and $241.7 million, respectively, available and unused on lines of credit, which include lines of credit for commercial customers, home equity loans as well as builder and construction lines. Based on the short-term lives of these instruments, the Company does not believe that the fair value of these instruments differs significantly from their carrying values. The fair value estimates presented herein are based on pertinent information available to management as of September 30, 2022 and December 31, 2021. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these Consolidated Financial Statements since that date and, therefore, current estimates of fair value may differ significantly from the amounts presented herein. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME/LOSS ("AOCI"/"AOCL") | 9 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME/LOSS ("AOCI"/"AOCL") | ACCUMULATED OTHER COMPREHENSIVE INCOME/LOSS ("AOCI"/"AOCL") The following table presents the changes in each component of accumulated other comprehensive gain, net of tax, for the three and nine months ended September 30, 2022 and 2021. Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 (dollars in thousands) Net Unrealized Gains And Losses Net Unrealized Gains And Losses Net Unrealized Gains And Losses Net Unrealized Gains And Losses Beginning of period $ (31,847) $ 3,063 $ (1,952) $ 4,504 Other comprehensive losses, net of tax before reclassifications (12,059) (3,072) (41,954) (4,946) Amounts reclassified from accumulated other comprehensive gain — — — 433 Net other comprehensive losses (12,059) (3,072) (41,954) (4,513) End of period $ (43,906) $ (9) $ (43,906) $ (9) As of the nine months ended September 30, 2021, reclassification adjustment was due to the gain on sale of AFS investment securities of $0.6 million. |
EARNINGS PER SHARE (_EPS_)
EARNINGS PER SHARE (“EPS”) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share ("EPS") | EARNINGS PER SHARE (“EPS”) Basic earnings per common share represent income available to common shareholders, divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued. Potential common shares that may have been issued by the Company related to outstanding unvested restricted stock unit and performance stock unit awards were determined using the treasury stock method and included in the calculation of dilutive common stock equivalents. The Company has not granted any stock options since 2007 and all outstanding options expired on July 17, 2017. As of three and nine months ended September 30, 2022, there were 1,034 and 587, respectively of unvested restricted stock and performance stock unit awards which were excluded from the calculation as their effect would be anti-dilutive. There were 40 and 3,355 antidilutive awards that were excluded from the calculation for the three and nine months ended September 30, 2021. Basic and diluted earnings per share have been computed based on weighted-average common and common equivalent shares outstanding as follows: (dollars in thousands, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net Income $ 7,580 $ 6,404 $ 20,702 $ 19,135 Average number of common shares outstanding 5,636,640 5,709,814 5,656,950 5,813,704 Dilutive effect of common stock equivalents 8,182 10,187 9,000 9,514 Average number of shares used to calculate diluted EPS 5,644,822 5,720,001 5,665,950 5,823,218 Anti-dilutive shares 1,034 40 587 3,355 Earnings Per Common Share Basic $ 1.34 $ 1.12 $ 3.66 $ 3.29 Diluted $ 1.34 $ 1.12 $ 3.65 $ 3.29 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company files a consolidated federal income tax return with its subsidiaries. Deferred tax assets and liabilities are determined using the liability (or balance sheet) method which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. If it is more likely than not that some portion or the entire deferred tax asset will not be realized, deferred tax assets will be reduced by a valuation allowance. It is the Company’s policy to recognize accrued interest and penalties related to unrecognized tax benefits as a component of tax expense. (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Current income tax expense $ 2,572 $ 1,448 $ 7,119 $ 6,048 Deferred income tax (benefit) expense (192) 710 (237) 427 Income tax expense as reported $ 2,380 $ 2,158 $ 6,882 $ 6,475 Effective tax rate 23.9 % 25.2 % 24.9 % 25.3 % Net deferred tax assets totaled $24.8 million at September 30, 2022 and $9.0 million at December 31, 2021. No valuation allowance for deferred tax assets was recorded at September 30, 2022 as management believes it is more likely than not that deferred tax assets will be realized against deferred tax liabilities and projected future taxable income. The effective tax rate differed from the statutory federal and state income rates during 2022 and 2021 primarily due to the effect of tax-exempt loans, life insurance policies, the income tax effects associated with stock-based compensation and certain non-deductible expenses for state income taxes. The Company’s consolidated effective tax rate is expected to be between 25.00% and 26.06% in 2022. |
BASIS OF PRESENTATION AND NAT_2
BASIS OF PRESENTATION AND NATURE OF OPERATIONS (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The Consolidated Financial Statements include the accounts of The Community Financial Corporation and its wholly-owned subsidiary, Community Bank of the Chesapeake (the “Bank”), (collectively, the “Company”), included herein are unaudited. The Consolidated Financial Statements reflect all adjustments consisting only of normal recurring accruals that, in the opinion of management, are necessary to present fairly the Company’s financial condition, results of operations, and cash flows for the periods presented. Certain information and note disclosures normally included in Consolidated Financial Statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to the rules and regulations of the SEC. Management believes that the included disclosures are adequate to make the information presented not misleading. The balances as of December 31, 2021 have been derived from audited Consolidated Financial Statements. The Company’s accounting policies are disclosed in Note 1 to the 2021 Consolidated Financial Statements. The adoption on January 1, 2022 of the new Current Expected Credit Loss ("CECL") accounting standard is described below. The results of operations for the nine months September 30, 2022 are not necessarily indicative of the results of operations to be expected for the remainder of the year or any other period. These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes included in the Company’s 2021 Annual Report on Form 10-K. |
Reclassification | ReclassificationCertain items in prior Consolidated Financial Statements have been reclassified to conform to the current presentation. |
Nature of Operations | Nature of Operations The Company provides financial services to individuals and businesses through its offices in Southern Maryland and Fredericksburg, Virginia. Its primary deposit products are demand, savings and time deposits, and its primary lending products are commercial and residential mortgage loans, commercial loans, construction and land development loans, home equity and second mortgages and commercial equipment loans. |
Use of Estimates | Use of EstimatesThe preparation of Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements and the reported amount of income and expenses during the reporting periods. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses ("ACL"), real estate acquired in the settlement of loans ("OREO"), fair value of financial instruments, fair value of assets acquired, and liabilities assumed in a business combination, evaluating potential credit losses of investment securities and valuation of deferred tax assets. |
New Accounting Policy | New Accounting Policy Allowance for Credit Losses On January 1, 2022, the Company adopted ASU 2016-13 Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments , which replaced the incurred loss methodology for determining the provision for credit losses and ACL with the CECL methodology. The measurement of expected credit losses under the CECL methodology applies to financial assets subject to credit losses and measured at amortized cost, and certain off-balance sheet credit exposures. This includes, but is not limited to, loans, leases, held-to-maturity securities, loan commitments, and financial guarantees. In addition, ASU 2016-13 made changes to the accounting for available-for-sale ("AFS") debt securities. Credit-related impairments of AFS debt securities are now recognized through an allowance for credit loss rather than a write-down of the securities' amortized cost basis when management does not intend to sell or believes that it is not likely that they will be required to sell the securities prior to recovery of the securities amortized cost basis. We adopted ASU 2016-13 using the modified retrospective method. Results for reporting periods beginning after January 1, 2022 are presented under ASU 2016-13 while prior period amounts continue to be reported in accordance with previously applicable GAAP. At adoption, the Company did not hold Held to Maturity ("HTM") investment debt securities. The following table shows the impact of the Company's adoption of ASC 326: January 1, 2022 (dollars in thousands) As Reported Under ASC 326 Pre-ASC 326 Adoption Impact of ASC 326 Adoption Portfolio Loans: Commercial real estate $ 1,113,793 $ 1,115,485 (1,692) Residential first mortgages 92,710 91,120 1,590 Residential rentals 194,911 195,035 (124) Construction and land development 35,502 35,590 (88) Home equity and second mortgages 25,661 25,638 23 Commercial loans 50,512 50,574 (62) Consumer loans 3,015 3,002 13 Commercial equipment 62,706 62,499 207 Gross Portfolio Loans 1,578,810 1,578,943 (133) Adjustments: Net deferred costs — (133) 133 Allowance for credit losses (20,913) (18,417) (2,496) Net Portfolio Loans 1,557,897 1,560,393 (2,496) U.S. Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans 26,398 27,276 (878) Net deferred fees — (878) 878 Net U.S. SBA PPP Loans 26,398 26,398 — Total Net Loans $ 1,584,295 $ 1,586,791 $ (2,496) Liabilities: Reserve for Unfunded Commitments $ 268 $ 51 $ 217 Loans that the Company has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are reported at their outstanding unpaid principal balances, adjusted for the allowance for credit losses and any deferred fees or premiums. Interest income is accrued on the unpaid principal balance. Loan origination fees and premiums, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method. Loans purchased with evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected are considered credit deteriorated. Evidence of credit quality deterioration as of the purchase date may include statistics such as internal risk grade, past due and nonaccrual status, recent borrower credit scores and recent loan-to-value (“LTV”) percentages. At December 31, 2021, the Bank had purchased credit-deteriorated (“PCD”) loans from the County First acquisition with unpaid principal balances of $1.4 million and carrying values of $1.1 million. At the adoption of ASC 326, management evaluated the remaining unamortized discount on the PCD loans and determined that approximately $8,000 of the discount was credit related and reclassified into the ACL. The non-credit component of the discount will be recognized in interest income over the remaining life of the loans. The Company considers a loan to be past due or delinquent when the terms of the contractual obligation are not met by the borrower. Loans are reviewed on a regular basis and are placed on non-accrual status when, in the opinion of management, the collection of additional interest is doubtful. The accrual of interest on mortgage and commercial loans is discontinued at the time the loan is 90 days delinquent unless the credit is well secured and in the process of collection. Non-accrual loans include certain loans that are current with all loan payments and are placed on non-accrual status due to customer operating results and cash flows. Non-accrual loans are evaluated for impairment on a loan-by-loan basis in accordance with the Company’s impairment methodology. Consumer loans, excluding credit card loans, are typically charged-off no later than 90 days past due. Credit card loans are typically charged-off no later than 180 days past due. Mortgage and commercial loans are fully or partially charged-off when in management’s judgment all reasonable efforts to return a loan to performing status have occurred. In all cases, loans are placed on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not collected from loans that are placed on non-accrual or charged-off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual status. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured. TDRs are loans that have been modified to provide for a reduction or a delay in the payment of either interest or principal because of deterioration in the financial condition of the borrower. A loan extended or renewed at a stated interest rate equal to the current interest rate for new debt with similar risk is not considered a TDR. Once an obligation has been classified as a TDR it continues to be considered a TDR until paid in full or until the debt is refinanced and considered unimpaired. All TDRs are assessed on a loan-by-loan basis. The Company does not participate in any specific government or Company-sponsored loan modification programs. All restructured loan agreements are individual contracts negotiated with a borrower. Allowance for Credit Losses - Loans The ACL is an estimate of the expected credit losses for loans held for investment and off-balance sheet exposures. ASU 2016-13 replaced the incurred loss model that recognized a loss when it became probable that a credit loss had occurred, with a model that immediately recognizes the credit loss expected to occur over the lifetime of a financial asset whether originated or purchased. Charge-offs are recorded to the ACL when management believes the loan is uncollectible. Subsequent recoveries, if any, are credited to the ACL. Management believes the ACL is in accordance with U.S. GAAP and in compliance with appropriate regulatory guidelines. The ACL includes quantitative estimates of losses for collectively and individually evaluated loans. As more fully described below, the model-based quantitative estimate for collectively evaluated loans is determined using the probability of default (PD) and loss given default (LGD) at the segment level and applied at the loan level against the expected exposure at default (EAD). Qualitative adjustments to the quantitative estimate may be made using information not considered in the quantitative model. The Bank uses a range of data to estimate expected credit losses under CECL, including information about past events, current conditions, and reasonable and supportable forecasts relevant to assessing the collectability of the cash flows of the loans. Historical loss experience serves as the foundation for our estimated credit losses. Adjustments to our historical loss experience are made for differences in current loan portfolio segment credit risk characteristics such as the impact of changing unemployment rates, changes in U.S. Treasury yields, portfolio concentrations, the volume of classified loans, inflation, and other prevailing economic conditions and factors that may affect the borrower’s ability to repay, or reduce the estimated value of underlying collateral. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. The ACL is measured on a collective basis when similar risk characteristics exist. Generally, collectively assessed loans are grouped by loan type code or product type codes and assigned to a corresponding portfolio segment. Portfolio segments may be further subdivided into similar risk profile groupings based on interest rate structure, types of collateral or other terms and characteristics. The probability of default (“PD”) calculation analyzes the historical loan portfolio over the given look back period to identify, by segment, loans that have defaulted. A default is defined as a loan that has moved to past due 90 days and greater, nonaccrual status, or experienced a charge-off during the period. The model observes loans over a 12-month window, detecting any events previously defined. This information is then used by the model to calculate annual iterative count-based PD rates for each segment. This process is then repeated for all dates within the historical data range. These averaged PD’s are used for a 12-month straight-line reversion to the historical mean. The historical data used was from mid-2006 through the most recent quarter end. The Company utilizes reasonable and supportable forecasts of future economic conditions when estimating the ACL on loans. The model’s calculation also includes a 12-month forecasted PD based on a regression model that compares the Company’s historical loan data to various national economic metrics during the same periods. The results show the Company’s past losses having a high rate of correlation to national unemployment rates for fixed rate loans and the 10-Year U.S. Treasury for adjustable-rate loans. The model uses this information, along with the most recently published Wall Street Journal survey of sixty economists’ forecasts predicting unemployment rates out over the next four quarters to estimate the PD for the forward-looking 12-month period. These data are also used to predict credit losses at different levels of stress, including a baseline, low, high and adverse economic conditions. After the forecast period, PD rates revert to the historical mean straight line over a 12-month period for the entire data set. The loss given default (“LGD”) calculation is based on actual losses (charge-offs, net of recoveries) at a loan level over the entire look-back period aggregated for each loan segment. The aggregate loss is divided by the exposure at default to determine an LGD rate. Defaults occurring during the look-back period are included in the denominator, whether or not a loss occurred and exposure at default is determined by the loan balance immediately preceding the default event. When the Company's data are insufficient. an industry index is used. The exposure at default (“EAD”) calculation projects future expected balances from monthly cash flow schedules to apply PD and LGD assumptions. These are derived based on current contractual terms (balance, interest rate, payment structure), adjusted for expected voluntary prepayments. The contractual terms exclude expected extensions, renewals and modifications unless either of the following applies: management has the reasonable expectation that a loan will be restructured, or the extension or renewal option are included in the borrower contract. On a quarterly basis, the Company uses internal portfolio credit data, such as levels of non-accrual loans, classified assets and concentrations of credit along with other external information not used in the quantitative calculation to determine qualitative adjustments. Loans that do not share the same common risk characteristics with other loans are individually assessed. Such loans include non-accrual loans, TDRs, loans classified as substandard or worse, loans that are greater than 89 days delinquent and any other loan identified by management for individual assessment. Reserves on individually assessed loans are measured on a loan-by-loan basis. Generally, consumer loans, including credit cards, are not individually assessed as the Bank's policy is to charge-off credit card loans when they become 180 days delinquent and other consumer loans when they are more than 90 days delinquent. The methodology used to estimate the ACL is designed to be responsive to changes in portfolio credit quality and forecasted economic conditions. Changes due to new information are reflected in the pool-based allowance and in reserves assigned on an individual basis. Executive management closely monitors loss ratios, reviews the appropriateness of the ACL and presents conclusions to the Credit Risk Committee and the Audit Committee. The committees report to the Board as part of Board's quarterly review of our regulatory reporting and consolidated financial statements. The calculation of the ACL excludes accrued interest receivable balances because these balances are reversed in a timely manner against previously recognized interest income when a loan is placed on non-accrual status. Allowance for Credit Losses - AFS Debt securities As described above, the Company does not presently hold any HTM debt securities and therefore is not presently required to apply a CECL methodology for an HTM investment portfolio. The impairment model for AFS debt securities measures fair value. Although ASU No. 2016-13 replaced the legacy other-than-temporary impairment (“OTTI”) model with a credit loss model, it retained the fundamental nature of the legacy OTTI model for AFS securities. One notable change from the legacy OTTI model is when evaluating whether credit loss exists, an entity may no longer consider the length of time fair value has been less than amortized cost. For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either criterion is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and a corresponding allowance for credit losses is recorded. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit losses. Losses are charged against the allowance when management believes the uncollectibility of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Any impairment not recorded through an allowance for credit loss is recognized in other comprehensive income as a noncredit-related impairment. As of September 30, 2022, the Company determined that the unrealized loss positions in AFS securities were not the result of credit losses, and therefore, an allowance for credit losses was not recorded. See Note 2 Investment Securities for more information. The Bank elected as allowed under ASU No. 2016-13 to exclude accrued interest from the amortized cost basis of AFS debt securities and report accrued interest separately in accrued interest and other assets in the consolidated balance sheets. AFS debt securities are placed on non-accrual status when management no longer expects to receive all contractual amounts due, which is generally at 90 days past due. Accrued interest receivable is reversed against interest income when a security is placed on non-accrual status. Accordingly, the Company does not recognize an allowance for credit loss against accrued interest receivable. The majority of AFS debt securities as of September 30, 2022 and December 31, 2021 were issued by Government Sponsored Enterprises (“GSEs”) and U.S. agencies. As such, an allowance for credit losses is not considered necessary. Collateral Dependent Financial Assets Loans that do not share risk characteristics are evaluated on an individual basis. For collateral dependent financial assets where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the Net Present Value ("NPV") from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized costs basis of the financial asset exceeds the fair value of the underlying collateral less estimated cost to sell. The ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the financial asset. Subsequent changes to the fair value of collateral, for which an ACL was previously recognized, will be reported as a provision (recovery) for credit losses. The Bank generally uses the practical expedient of the fair value of the collateral, net of estimated selling costs, to determine the expected credit loss for individually assessed collateral dependent loans. Loan Commitments and Allowance for Credit Losses on Off-Balance Sheet Credit Exposure Financial instruments include off-balance sheet credit instruments such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded. The Company records a reserve for unfunded commitments (“RUC”) on off-balance sheet credit exposures through a charge to provision for credit loss expense in the Company’s consolidated statements of operations. The RUC on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the CECL model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur, and is included in Other Liabilities on the Company’s consolidated balance sheets. See Note 1 – Summary of Significant Accounting Policies included in the Company’s 2021 Annual Report on Form 10-K for a list of policies in effect as of December 31, 2021. Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) Adopted New Accounting Standard ASU 2016-13 – Financial Instruments – Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments. ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard replaced the existing “incurred loss” approach with an “expected loss” model. The new model, referred to as the current expected credit loss (“CECL”) model, applies to (1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures. This includes, but is not limited to, loans, leases, HTM securities, loan commitments, and financial guarantees. Credit losses relating to AFS debt securities will be recorded through an allowance for credit losses. The ASU also simplifies the accounting model for Purchased Credit Impaired (“PCI”) debt securities and loans. ASU 2016-13 also expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for loan and lease losses. In addition, entities will need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., modified retrospective approach). In December 2019, the FASB issued ASU No 2019-10, Financial Instruments - Credit Losses (Topic 326). This update amends the effective date of ASU 2016-13 for certain entities, including smaller reporting companies until fiscal years beginning after December 15, 2022, including interim periods within those fiscal periods. Early adoption was permitted. The FASB has issued other ASUs that clarify items related to ASU 2016-13. The Company adopted this guidance effective January 1, 2022. The Company's estimates are derived using one-year reasonable and supportable economic forecasts with subsequent one-year reversion to the historical mean loss rates. For loans that share similar risk characteristics and are collectively assessed, the Company uses a probability of default/loss given default cash flow method to determine the expected losses at the loan level. Loans that do not share similar risk characteristics are evaluated on an individual basis. Based on forecasted economic conditions and portfolio balances as of January 1, 2022, we recognized an increase to the opening allowance for credit losses of $2.5 million. The increase is primarily related to the change in methodology from estimating losses incurred as of the balance sheet date to estimating lifetime credit losses required by the CECL standard. The impact of adoption was not significant to the Bank's regulatory capital. The Bank did not elect to phase-in, over a three-year period, the standard's initial impact on regulatory capital as permitted by the regulatory transition rules. ASU 2019-05 – Financial Instruments-Credit Losses (Topic 326). In May 2019, the FASB issued ASU No. 2019-05. This ASU allows entities to irrevocably elect, upon adoption of ASU 2016-13, the fair value option for financial instruments that (1) were previously recorded at amortized cost and (2) are within the scope of ASC 326-20 if the instruments are eligible for the fair value option under ASC 825-10. The fair value option election does not apply to HTM debt securities. Entities are required to make this election on an instrument-by-instrument basis. The Company adopted ASU 2019-05 concurrently upon adoption of ASU 2016-13. The adoption of CECL did not have a material effect on available-for-sale securities, which are predominantly composed of mortgage-backed securities issued by government sponsored entities and U.S. agencies and U.S. government obligations. Pending adoption ASU 2020-04 – Reference Rate Reform (Topic 848 ). In March 2020, the FASB issued guidance to provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The amendments are effective as of March 12, 2020 through December 31, 2022. The Company does not expect these amendments to have a material effect on its Consolidated Financial Statements. ASU Update 2022-02 – Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. |
BASIS OF PRESENTATION AND NAT_3
BASIS OF PRESENTATION AND NATURE OF OPERATIONS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Impact of the Adoption of Accounting Standards Update | The following table shows the impact of the Company's adoption of ASC 326: January 1, 2022 (dollars in thousands) As Reported Under ASC 326 Pre-ASC 326 Adoption Impact of ASC 326 Adoption Portfolio Loans: Commercial real estate $ 1,113,793 $ 1,115,485 (1,692) Residential first mortgages 92,710 91,120 1,590 Residential rentals 194,911 195,035 (124) Construction and land development 35,502 35,590 (88) Home equity and second mortgages 25,661 25,638 23 Commercial loans 50,512 50,574 (62) Consumer loans 3,015 3,002 13 Commercial equipment 62,706 62,499 207 Gross Portfolio Loans 1,578,810 1,578,943 (133) Adjustments: Net deferred costs — (133) 133 Allowance for credit losses (20,913) (18,417) (2,496) Net Portfolio Loans 1,557,897 1,560,393 (2,496) U.S. Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans 26,398 27,276 (878) Net deferred fees — (878) 878 Net U.S. SBA PPP Loans 26,398 26,398 — Total Net Loans $ 1,584,295 $ 1,586,791 $ (2,496) Liabilities: Reserve for Unfunded Commitments $ 268 $ 51 $ 217 |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Amortized Cost and Fair Values of Investment Securities | Amortized cost and fair values of investment securities at September 30, 2022 and December 31, 2021 are summarized as follows: September 30, 2022 (dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value AFS Securities Asset-backed securities issued by GSEs and U.S. Agencies Residential Mortgage Backed Securities ("MBS") $ 128,493 $ 13 $ 13,770 $ 114,736 Residential Collateralized Mortgage Obligations ("CMOs") 181,433 13 16,579 164,867 U.S. Agency 14,601 — 2,375 12,226 Asset-backed securities ("ABSs") issued by Others: Residential CMOs 9,363 — 260 9,103 Student Loan Trust ABSs 50,315 103 1,879 48,539 Municipal bonds 99,846 — 20,982 78,864 Corporate bonds 3,000 — 391 2,609 U.S. government obligations 36,831 — 3,273 33,558 Total AFS Securities $ 523,882 $ 129 $ 59,509 $ 464,502 Equity securities carried at fair value through income CRA investment fund $ 4,254 $ — $ — $ 4,254 Non-marketable equity securities Other equity securities $ 207 $ — $ — $ 207 Total Investment Securities $ 528,343 $ 129 $ 59,509 $ 468,963 December 31, 2021 (dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value AFS Securities Asset-backed securities issued by GSEs and U.S. Agencies Residential MBS $ 121,125 $ 1,057 $ 2,266 $ 119,916 Residential CMOs 198,780 710 2,367 197,123 U.S. Agency 14,433 11 140 14,304 Asset-backed securities issued by Others: Residential CMOs 220 5 4 221 Student Loan Trust ABSs 56,422 438 286 56,574 Municipal bonds 92,556 1,169 884 92,841 U.S. government obligations 16,942 — 82 16,860 Total AFS Securities $ 500,478 $ 3,390 $ 6,029 $ 497,839 Equity securities carried at fair value through income CRA investment fund $ 4,772 $ — $ — $ 4,772 Non-marketable equity securities Other equity securities $ 207 $ — $ — $ 207 Total Investment Securities $ 505,457 $ 3,390 $ 6,029 $ 502,818 |
Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value | AFS Securities Gross unrealized losses and estimated fair value by length of time that individual AFS securities have been in a continuous unrealized loss position at September 30, 2022, and December 31, 2021 were as follows: September 30, 2022 Less Than 12 Months More Than 12 Months Total (dollars in thousands) Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Losses Asset-backed securities issued by GSEs and U.S. Agencies $ 69,403 $ 6,302 $ 220,175 $ 26,422 $ 289,578 $ 32,724 Asset-backed securities issued by Others 5,937 244 149 16 6,086 260 Student Loan Trust ABSs 6,536 1,000 34,823 879 41,359 1,879 Municipal bonds 38,786 8,927 40,078 12,055 78,864 20,982 Corporate bonds 2,609 391 — — 2,609 391 U.S. government obligations 18,656 1,232 14,902 2,041 33,558 3,273 $ 141,927 $ 18,096 $ 310,127 $ 41,413 $ 452,054 $ 59,509 December 31, 2021 Less Than 12 Months More Than 12 Months Total (dollars in thousands) Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Losses Asset-backed securities issued by GSEs and U.S. Agencies $ 205,891 $ 3,997 $ 41,327 $ 776 $ 247,218 $ 4,773 Asset-backed securities issued by Others — — 57 4 57 4 Student Loan Trust ABSs 21,640 281 2,226 5 23,866 286 Municipal bonds 47,314 776 6,696 108 54,010 884 U.S. government obligations 14,860 82 1,999 — 16,859 82 $ 289,705 $ 5,136 $ 52,305 $ 893 $ 342,010 $ 6,029 |
Schedule of Amortized Cost and Fair Values of Debt Securities | The amortized cost and estimated fair value of debt securities at September 30, 2022, and December 31, 2021 by contractual maturity, are shown below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call premiums or prepayment penalties. September 30, 2022 December 31, 2021 (dollars in thousands) Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Within one year $ 35,730 $ 31,680 $ 36,859 $ 36,665 Over one year through five years 137,433 121,856 121,308 120,668 Over five years through ten years 219,912 194,986 191,166 190,158 After ten years 130,807 115,980 151,145 150,348 Total AFS securities $ 523,882 $ 464,502 $ 500,478 $ 497,839 |
LOANS (Tables)
LOANS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Schedule of Loans Receivable | Portfolio loans, net of deferred costs and fees, are summarized by type as follows at September 30, 2022: September 30, 2022 (dollars in thousands) Total % of Total Loans Portfolio Loans: Commercial real estate $ 1,202,660 68.98 % Residential first mortgages 83,081 4.77 % Residential rentals 282,365 16.20 % Construction and land development 23,197 1.33 % Home equity and second mortgages 26,054 1.49 % Commercial loans 41,615 2.39 % Consumer loans 5,754 0.33 % Commercial equipment 78,551 4.51 % Total portfolio loans (1) 1,743,277 100.00 % Less: Allowance for Credit Losses (22,027) (1.26) % Total net portfolio loans 1,721,250 U.S. SBA PPP loans (1) 1,211 Total net loans $ 1,722,461 Portfolio loans are summarized by type as follows at December 31, 2021: Portfolio Loans: December 31, 2021 Commercial real estate $ 1,115,485 70.66 % Residential first mortgages 91,120 5.77 % Residential rentals 195,035 12.35 % Construction and land development 35,590 2.25 % Home equity and second mortgages 25,638 1.62 % Commercial loans 50,574 3.20 % Consumer loans 3,002 0.19 % Commercial equipment 62,499 3.96 % Gross portfolio loans (1) 1,578,943 100.00 % Adjustments: Net deferred costs (133) (0.01) % Allowance for loan losses (18,417) (1.17) % (18,550) Net portfolio loans 1,560,393 Gross U.S. SBA PPP loans (1) 27,276 Net deferred fees (878) Net U.S. SBA PPP Loans 26,398 Total net loans $ 1,586,791 Total gross loans $ 1,606,219 |
Non-accrual Loans | Non-accrual loans as of September 30, 2022 and December 31, 2021 were as follows: September 30, 2022 (dollars in thousands) Nonaccrual with No Allowance for Credit Losses Nonaccrual with Total Nonaccrual Loans Commercial real estate $ 4,577 $ 84 $ 4,661 Residential rentals 1,153 — 1,153 Home equity and second mortgages 240 — 240 Commercial loans — 25 25 Commercial equipment 211 — 211 Total $ 6,181 $ 109 $ 6,290 Interest Income on Nonaccrual Loans $ 63 $ — $ 63 September 30, 2022 (dollars in thousands) Non-accrual Delinquent Loans Non-accrual Current Loans Total Non-accrual Loans Commercial real estate $ — $ 4,661 $ 4,661 Residential rentals 454 699 1,153 Home equity and second mortgages 124 116 240 Commercial loans — 25 25 Commercial equipment — 211 211 $ 578 $ 5,712 $ 6,290 December 31, 2021 (dollars in thousands) Non-accrual Delinquent Loans Non-accrual Current Loans Total Non-accrual Loans Commercial real estate $ — $ 4,890 $ 4,890 Residential first mortgages 450 — 450 Residential rentals 252 690 942 Home equity and second mortgages 202 399 601 Commercial equipment — 691 691 U.S. SBA PPP loans 57 — 57 $ 961 $ 6,670 $ 7,631 The following table presents the amortized cost basis of collateral-dependent loans by class of loans. September 30, 2022 (dollars in thousands) Business/Other Assets Real Estate Commercial real estate $ — $ 4,660 Residential first mortgages — — Residential rentals — 972 Home equity and second mortgages — 240 Commercial loans 25 — Commercial equipment 645 — Total $ 670 $ 5,872 |
Past Due Financing Receivables | An analysis of days past due ("DPD") loans as of September 30, 2022 follows: September 30, 2022 (dollars in thousands) 31-60 DPD 61-89 DPD 90 DPD and 90 DPD and Not Accruing Total Past Due Current Non-Accrual Loans Current Accrual Loans Total Loans Commercial real estate $ — $ — $ — $ — $ — $ 4,661 $ 1,197,999 $ 1,202,660 Residential first mortgages — — — — — — 83,081 83,081 Residential rentals 32 181 — 273 486 699 281,180 282,365 Construction and land development — — — — — — 23,197 23,197 Home equity and second mortgages 204 — — 124 328 116 25,610 26,054 Commercial loans — — — — — 25 41,590 41,615 Consumer loans 19 5 31 — 55 — 5,699 5,754 Commercial equipment — — — — — 211 78,340 78,551 U.S. SBA PPP 272 — — — 272 — 939 1,211 Total Loans $ 527 $ 186 $ 31 $ 397 $ 1,141 $ 5,712 $ 1,737,635 $ 1,744,488 Loan delinquency (total past due) decreased $0.3 million from $1.4 million, or 0.09% of loans, at December 31, 2021 to $1.1 million, or 0.07% of loans, at September 30, 2022. PCI loans are included as a single category in the table below as management believes there is a lower likelihood of aggregate loss related to these loan pools. Additionally, PCI loans are discounted to allow for the accretion of income on a level yield basis over the life of the loan based on expected cash flows. An analysis of days past due loans as of December 31, 2021 follows: December 31, 2021 (dollars in thousands) 31-60 Days 61-89 Days 90 or Greater Days Total Past Due PCI Loans Current Total Loan Receivables Commercial real estate $ — $ — $ — $ — $ 1,116 $ 1,114,369 $ 1,115,485 Residential first mortgages — 277 450 727 — 90,393 91,120 Residential rentals — 42 252 294 — 194,741 195,035 Construction and land development — — — — — 35,590 35,590 Home equity and second mortgages 200 — 202 402 — 25,236 25,638 Commercial loans — — — — — 50,574 50,574 Consumer loans — — — — — 3,002 3,002 Commercial equipment — — — — — 62,499 62,499 Total portfolio loans $ 200 $ 319 $ 904 $ 1,423 $ 1,116 $ 1,576,404 $ 1,578,943 U.S. SBA PPP loans $ 9 $ 40 $ 57 $ 106 $ — $ 27,170 $ 27,276 |
Allowance for Credit Losses on Financing Receivables | The following tables detail activity in the ACL at and for the three and nine months ended September 30, 2022 and 2021. An allocation of the allowance to one category of loans does not prevent the Company from using that allowance to absorb losses in a different category. Three Months Ended September 30, 2022 (dollars in thousands) Beginning Balance Charge-offs Recoveries Provisions Ending Balance Commercial real estate $ 16,833 $ — $ — $ 203 $ 17,036 Residential first mortgages 255 — 14 (32) 237 Residential rentals 1,660 — — 885 2,545 Construction and land development 166 — — 31 197 Home equity and second mortgages 143 — — (1) 142 Commercial loans 238 (49) 1 64 254 Consumer loans 132 (14) — 24 142 Commercial equipment 1,977 (29) 6 (480) 1,474 $ 21,404 $ (92) $ 21 $ 694 $ 22,027 Three Months Ended September 30, 2021 (dollars in thousands) Beginning Balance Charge-offs Recoveries Provisions Ending Balance Commercial real estate $ 13,918 $ (491) $ 4 $ (12) $ 13,419 Residential first mortgages 847 — — 65 912 Residential rentals 1,186 — — 614 1,800 Construction and land development 332 — — 36 368 Home equity and second mortgages 242 — 1 6 249 Commercial loans 1,113 — 529 (733) 909 Consumer loans 28 — — 14 42 Commercial equipment 798 — 20 10 828 $ 18,464 $ (491) $ 554 $ — $ 18,527 Purchase Credit Impaired** $ 52 $ — $ — $ — $ 52 Nine Months Ended September 30, 2022 (dollars in thousands) Beginning Balance Impact of ASC Charge-offs Recoveries Provisions Ending Balance Commercial real estate $ 13,095 $ 3,734 $ (280) $ — $ 487 $ 17,036 Residential first mortgages 1,002 (679) (111) 14 11 237 Residential rentals 2,175 (586) — — 956 2,545 Construction and land development 260 (82) — — 19 197 Home equity and second mortgages 274 (86) — 1 (47) 142 Commercial loans 582 (290) (99) 2 59 254 Consumer loans 58 2 (20) — 102 142 Commercial equipment 971 483 (29) 67 (18) 1,474 $ 18,417 $ 2,496 $ (539) $ 84 $ 1,569 $ 22,027 _______________________________________ ** There is no allowance for credit loss on the SBA PPP portfolios. A more detailed roll forward schedule will be presented if an allowance is required. Nine Months Ended September 30, 2021 (dollars in thousands) Beginning Balance Charge-offs Recoveries Provisions Ending Balance Commercial real estate $ 13,744 $ (1,739) $ 6 $ 1,408 $ 13,419 Residential first mortgages 1,305 (142) — (251) 912 Residential rentals 1,413 (46) — 433 1,800 Construction and land development 401 — — (33) 368 Home equity and second mortgages 261 — 4 (16) 249 Commercial loans 1,222 (76) 539 (776) 909 Consumer loans 20 — — 22 42 Commercial equipment 1,058 (34) 57 (253) 828 $ 19,424 $ (2,037) $ 606 $ 534 $ 18,527 Purchase Credit Impaired** $ — $ — $ — $ 52 $ 52 _______________________________________ |
Credit Quality Indicators | Credit quality indicators as of September 30, 2022 were as follows: Credit Risk Profile by Internally Assigned Grade The risk category of loans by class of loans is as follows: Term Loans by Origination Year (dollars in thousands) Prior 2018 2019 2020 2021 2022 Revolving Loans Total Commercial Real Estate Pass $ 335,465 $ 74,482 $ 107,720 $ 188,070 $ 282,781 $ 187,151 $ — $ 1,175,669 Watch 5,588 4,216 — 5,567 — 6,960 — 22,331 Special Mention — — — — — — — — Substandard 808 — 2,999 — 853 — — 4,660 Total $ 341,861 $ 78,698 $ 110,719 $ 193,637 $ 283,634 $ 194,111 $ — $ 1,202,660 Residential Rentals Pass $ 45,188 $ 4,495 $ 21,141 $ 42,263 $ 65,468 $ 102,838 $ — $ 281,393 Watch — — — — — — — — Special Mention — — — — — — — — Substandard 972 — — — — — — 972 Total $ 46,160 $ 4,495 $ 21,141 $ 42,263 $ 65,468 $ 102,838 $ — $ 282,365 Construction and Land Development Pass $ 4,550 $ 8,987 $ 5,094 $ 1,399 $ 2,529 $ 638 $ — $ 23,197 Watch — — — — — — — — Special Mention — — — — — — — — Substandard — — — — — — — — Total $ 4,550 $ 8,987 $ 5,094 $ 1,399 $ 2,529 $ 638 $ — $ 23,197 Commercial Loans Pass $ 23,516 $ 2,628 $ 2,708 $ 1,868 $ 7,792 $ 3,078 $ — $ 41,590 Watch — — — — — — — — Special Mention — — — — — — — — Substandard — — — 25 — — — 25 Total $ 23,516 $ 2,628 $ 2,708 $ 1,893 $ 7,792 $ 3,078 $ — $ 41,615 Commercial Equipment Pass $ 8,737 $ 5,363 $ 15,519 $ 7,995 $ 13,290 $ 27,100 $ — $ 78,004 Watch — 175 — — — — — 175 Special Mention — — 160 — — — — 160 Substandard — — 212 — — — — 212 Total $ 8,737 $ 5,538 $ 15,891 $ 7,995 $ 13,290 $ 27,100 $ — $ 78,551 Total loans by risk category $ 424,824 $ 100,346 $ 155,553 $ 247,187 $ 372,713 $ 327,765 $ — $ 1,628,388 Loans evaluated by performance category are as follows: Term Loans by Origination Year (dollars in thousands) Prior 2018 2019 2020 2021 2022 Revolving Loans Total Residential First Mortgages Performing $ 39,498 $ 3,891 $ 19,542 $ 8,577 $ 5,279 $ 6,294 $ — $ 83,081 Non-performing — — — — — — — — Total $ 39,498 $ 3,891 $ 19,542 $ 8,577 $ 5,279 $ 6,294 $ — $ 83,081 Home Equity and Second Mortgages Performing $ 15,900 $ 1,383 $ 933 $ 1,384 $ 3,881 $ 2,474 $ — $ 25,955 Non-performing 99 — — — — — — 99 Total $ 15,999 $ 1,383 $ 933 $ 1,384 $ 3,881 $ 2,474 $ — $ 26,054 Consumer Loans Performing $ 42 $ 3 $ 108 $ 139 $ 678 $ 850 $ 3,903 $ 5,723 Non-performing — — 31 31 Total $ 42 $ 3 $ 108 $ 139 $ 678 $ 850 $ 3,934 $ 5,754 U.S. SBA PPP Loans Performing $ — $ — $ — $ — $ 1,211 $ — $ — $ 1,211 Non-performing — — — — — — — — Total $ — $ — $ — $ — $ 1,211 $ — $ — $ 1,211 Total loans evaluated by performing status $ 55,539 $ 5,277 $ 20,583 $ 10,100 $ 11,049 $ 9,618 $ 3,934 $ 116,100 Total Recorded Investment $ 480,363 $ 105,623 $ 176,136 $ 257,287 $ 383,762 $ 337,383 $ 3,934 $ 1,744,488 Credit quality indicators as of December 31, 2021 were as follows: Commercial Real Estate Construction and Land Development Residential Rentals (dollars in thousands) 12/31/2021 12/31/2021 12/31/2021 Unrated $ — $ — $ — Pass 1,111,857 35,590 194,093 Special mention — — — Substandard 3,628 — 942 Doubtful — — — Loss — — — Total $ 1,115,485 $ 35,590 $ 195,035 Commercial Loans Commercial Equipment Total Commercial Portfolios (dollars in thousands) 12/31/2021 12/31/2021 12/31/2021 Unrated $ — $ — $ — Pass 50,574 62,326 1,454,440 Special mention — — — Substandard — 173 4,743 Doubtful — — — Loss — — — Total $ 50,574 $ 62,499 $ 1,459,183 Non-Commercial Portfolios ** U.S. SBA PPP Loans Total Loans Portfolios (dollars in thousands) 12/31/2021 12/31/2021 12/31/2021 Unrated $ 100,403 $ 27,276 $ 127,679 Pass 18,889 — 1,473,329 Special mention — — — Substandard 468 — 5,211 Doubtful — — — Loss — — — Total $ 119,760 $ 27,276 $ 1,606,219 _______________________________________ ** Non-commercial portfolios are generally evaluated based on payment activity but may be risk graded if part of a larger commercial relationship or are credit impaired (e.g. non-accrual loans, TDRs). Credit Risk Profile Based on Payment Activity Residential First Mortgages Home Equity and Second Mortgages Consumer Loans (dollars in thousands) 12/31/2021 12/31/2021 12/31/2021 Performing $ 90,670 $ 25,436 $ 3,002 Nonperforming 450 202 — Total $ 91,120 $ 25,638 $ 3,002 |
TDRs, Included in Impaired Loans Schedule | TDRs included in the impaired loan schedules above, as of September 30, 2022 and December 31, 2021 were as follows: September 30, 2022 December 31, 2021 (dollars in thousands) Number of Loans Recorded Investments Number of Loans Recorded Investments Commercial equipment 1 $ 433 1 $ 447 Total TDRs 1 $ 433 1 $ 447 Less: TDRs included in non-accrual loans — — — — Total accrual TDR loans 1 $ 433 1 $ 447 |
Impaired Loans, Including TDRs | Impaired loans, including TDRs at December 31, 2021 and September 30, 2021, were as follows: December 31, 2021 (dollars in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance YTD Average Recorded Investment YTD Interest Income Recognized Commercial real estate $ 4,994 $ 4,797 $ 93 $ 4,890 $ 93 $ 4,866 $ 254 Residential first mortgages 879 866 — 866 — 874 32 Residential rentals 982 942 — 942 — 959 48 Home equity and second mortgages 626 601 — 601 — 604 14 Commercial equipment 1,200 1,022 173 1,195 173 2,184 99 Total $ 8,681 $ 8,228 $ 266 $ 8,494 $ 266 $ 9,487 $ 447 September 30, 2021 (dollars in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance Quarter Average Recorded Investment Quarter Interest Income Recognized YTD Average Recorded Investment YTD Interest Income Recognized Commercial real estate $ 3,205 $ 2,377 $ 759 $ 3,136 $ 291 $ 3,146 $ 25 $ 3,177 $ 80 Residential first mortgages 884 872 — 872 — 873 7 878 25 Residential rentals 990 961 — 961 — 961 13 956 38 Home equity and second mortgages 602 580 — 580 — 581 3 583 10 Commercial equipment 490 455 32 487 32 489 5 493 16 Total $ 6,171 $ 5,245 $ 791 $ 6,036 $ 323 $ 6,050 $ 53 $ 6,087 $ 169 |
Loan Receivable And Allowance Balances Disaggregated On Basis Of Company's Impairment Methodology | The following tables detail loan receivable and allowance balances disaggregated on the basis of the Company’s impairment methodology at September 30, 2021 and December 31, 2021. December 31, 2021 September 30, 2021 (dollars in thousands) Ending balance: individually evaluated for impairment Ending balance: collectively evaluated for impairment Purchased Credit Impaired Total Ending balance: individually evaluated for impairment Ending balance: collectively evaluated for impairment Purchased Credit Impaired Total Loan Receivables: Commercial real estate $ 4,890 $ 1,109,479 $ 1,116 $ 1,115,485 $ 3,136 $ 1,084,356 $ 1,144 $ 1,088,636 Residential first mortgages 866 90,254 — 91,120 872 95,963 — 96,835 Residential rentals 942 194,093 — 195,035 961 171,121 — 172,082 Construction and land development — 35,590 — 35,590 — 37,139 — 37,139 Home equity and second mortgages 601 25,037 — 25,638 580 25,938 — 26,518 Commercial loans — 50,574 — 50,574 — 48,327 — 48,327 Consumer loans — 3,002 — 3,002 — 2,168 — 2,168 Commercial equipment 1,195 61,304 — 62,499 487 60,859 — 61,346 $ 8,494 $ 1,569,333 $ 1,116 $ 1,578,943 $ 6,036 $ 1,525,871 $ 1,144 $ 1,533,051 Allowance for credit losses: Commercial real estate $ 93 $ 13,002 $ — $ 13,095 $ 291 $ 13,128 $ 52 $ 13,471 Residential first mortgages — 1,002 — 1,002 — 912 — 912 Residential rentals — 2,175 — 2,175 — 1,800 — 1,800 Construction and land development — 260 — 260 — 368 — 368 Home equity and second mortgages — 274 — 274 — 249 — 249 Commercial loans — 582 — 582 — 909 — 909 Consumer loans — 58 — 58 — 42 — 42 Commercial equipment 173 798 — 971 32 796 — 828 $ 266 $ 18,151 $ — $ 18,417 $ 323 $ 18,204 $ 52 $ 18,579 |
Summary Of Acquired And Non Acquired Loans Table | A summary of changes in the accretable yield for PCI loans for the three and nine months ended September 30, 2021 and the year ended December 31, 2021 follows: Three Months Ended September 30, Nine Months Ended September 30, Year Ended (dollars in thousands) 2021 2021 December 31, 2021 Accretable yield, beginning of period $ 324 $ 342 $ 342 Additions — — — Accretion (31) (92) (117) Reclassification from nonaccretable difference 15 29 43 Other changes, net (15) 14 55 Accretable yield, end of period $ 293 $ 293 $ 323 The following is a summary of acquired and non-acquired loans as of December 31, 2021: BY ACQUIRED AND NON-ACQUIRED December 31, 2021 % Acquired loans - performing $ 41,066 2.56 % Acquired loans - purchase credit impaired ("PCI") 1,116 0.07 % Total acquired loans 42,182 2.63 % U.S. SBA PPP loans 27,276 1.70 % Non-acquired loans** 1,536,761 95.68 % Gross loans 1,606,219 Net deferred fees (1,011) (0.06) % Total loans, net of deferred fees $ 1,605,208 ______________________________ |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Other Intangible Assets | Goodwill and other intangible assets are presented in the tables below. (dollars in thousands) As of September 30, 2022 As of December 31, 2021 Goodwill $ 10,835 $ 10,835 As of September 30, 2022 As of December 31, 2021 (dollars in thousands) Gross Carrying Amount Accumulated Amortization Net Intangible Assets Gross Carrying Amount Accumulated Amortization Net Intangible Assets Core deposit intangible ("CDI") $ 3,590 $ (2,865) $ 725 $ 3,590 $ (2,558) $ 1,032 |
Schedule of Estimated Amortization Expense | The estimated aggregate future amortization expense for intangible assets remaining as of September 30, 2022 is as follows: (dollars in thousands) Remainder of 2022 $ 91 2023 302 2024 205 2025 109 2026 18 $ 725 |
OTHER REAL ESTATE OWNED ("ORE_2
OTHER REAL ESTATE OWNED ("OREO") (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Real Estate [Abstract] | |
Analysis of OREO Activity | An analysis of activity follows. Nine Months Ended September 30, Years Ended December 31, (dollars in thousands) 2022 2021 2021 Balance at beginning of year $ — $ 3,109 $ 3,109 Additions of underlying property — — — Disposals of underlying property — (932) (1,722) Valuation allowance — (641) (1,387) Balance at end of period $ — $ 1,536 $ — |
Expenses Applicable to OREO Assets | Expenses applicable to OREO assets included the following. Nine Months Ended September 30, (dollars in thousands) 2022 2021 Valuation allowance $ — $ 641 Losses (gains) on dispositions — (16) Operating expenses 6 64 $ 6 $ 689 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Deposits, by Type [Abstract] | |
Schedule of Deposits | Deposits consist of the following: September 30, 2022 December 31, 2021 (dollars in thousands) Balance % Balance % Noninterest-bearing demand $ 647,432 30.45 % $ 445,778 21.68 % Interest-bearing: Demand 691,987 32.54 % 790,481 38.45 % Money market deposits 371,175 17.45 % 372,717 18.13 % Savings 123,564 5.81 % 119,767 5.82 % Certificates of deposit 292,399 13.75 % 327,421 15.92 % Total interest-bearing 1,479,125 69.55 % 1,610,386 78.32 % Total Deposits $ 2,126,557 100.00 % $ 2,056,164 100.00 % |
LEASE COMMITMENTS & CONTINGEN_2
LEASE COMMITMENTS & CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Maturities of Operating Lease Liabilities | The table below details the Right of Use asset (net of accumulated amortization), lease liability and other information related to the Company's operating leases: (dollars in thousands) September 30, 2022 December 31, 2021 Operating Leases Operating lease right of use asset, net $ 6,022 $ 6,124 Operating lease liability $ 6,288 $ 6,343 Weighted average remaining lease term 15.84 years 17.21 years Weighted average discount rate 3.50 % 3.51 % Remaining lease term - min 4.8 years 6.3 years Remaining lease term - max 22.0 years 23.0 years A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liability is as follows: (dollars in thousands) As of September 30, 2022 Lease payments due: Within one year $ 569 After one but within two years 584 After two but within three years 611 After three but within four years 637 After four but within five years 629 After five years 5,375 Total undiscounted cash flows $ 8,405 Discount on cash flows 2,117 Total lease liability $ 6,288 |
Lease Cost | The table below details the Company's lease cost, which is included in occupancy expense in the Unaudited Consolidated Statements of Income. Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2022 2021 2022 2021 Operating lease cost $ 157 $ 146 $ 454 $ 489 Cash paid for lease liability $ 140 $ 150 $ 406 $ 485 |
REGULATORY CAPITAL (Tables)
REGULATORY CAPITAL (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
Regulatory Capital Amounts and Ratios | The Company’s and the Bank’s actual regulatory capital amounts and ratios are presented in the following table. Regulatory Capital and Ratios Regulatory Minimum Ratio + CCB (1) The Company The Bank (dollars in thousands) September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Common equity $ 179,154 $ 208,133 $ 207,146 $ 236,561 Goodwill (10,835) (10,835) (10,835) (10,835) Core deposit intangible (net of deferred tax liability) (537) (766) (537) (766) AOCI losses 43,906 1,952 43,906 1,952 Common Equity Tier 1 Capital 211,688 198,484 239,680 226,912 TRUPs 12,000 12,000 — — Tier 1 Capital 223,688 210,484 239,680 226,912 Allowable reserve for credit losses and other Tier 2 adjustments 22,295 18,468 22,295 18,468 Subordinated notes 19,552 19,510 — — Tier 2 Capital $ 265,535 $ 248,462 $ 261,975 $ 245,380 Risk-Weighted Assets ("RWA") $ 1,856,827 $ 1,665,296 $ 1,855,483 $ 1,663,831 Average Assets ("AA") $ 2,340,703 $ 2,281,210 $ 2,338,751 $ 2,279,835 Common Tier 1 Capital to RWA 7.00% 11.40 % 11.92 % 12.92 % 13.64 % Tier 1 Capital to RWA 8.50% 12.05 12.64 12.92 13.64 Tier 2 Capital to RWA 10.50% 14.30 14.92 14.12 14.75 Tier 1 Capital to AA (Leverage) (2) n/a 9.56 9.23 10.25 9.95 ____________________________________ (1) The regulatory minimum capital ratio ("Min. Ratio") + the capital conservation buffer ("CCB"). (2) Tier 1 Capital to AA (Leverage) has no capital conservation buffer defined. The PCA well capitalized is defined as 5.00%. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | The tables below present the recorded amount of assets as of September 30, 2022 and December 31, 2021 measured at fair value on a recurring basis. (dollars in thousands) September 30, 2022 Description of Asset Fair Value Level 1 Level 2 Level 3 AFS securities Asset-backed securities issued by GSEs and U.S. Agencies MBS $ 114,736 $ — $ 114,736 $ — CMOs 164,867 — 164,867 — U.S. Agency 12,226 — 12,226 — Asset-backed securities issued by Others: Residential CMOs 9,103 — 9,103 — Student Loan Trust ABSs 48,539 — 48,539 — Municipal bonds 78,864 — 78,864 — Corporate bonds 2,609 — 2,609 — U.S. government obligations 33,558 — 33,558 — Total AFS securities $ 464,502 $ — $ 464,502 $ — Equity securities carried at fair value through income CRA investment fund $ 4,254 $ — $ 4,254 $ — Non-marketable equity securities Other equity securities $ 207 $ — $ 207 $ — (dollars in thousands) December 31, 2021 Description of Asset Fair Value Level 1 Level 2 Level 3 AFS securities Asset-backed securities issued by GSEs and U.S. Agencies MBS $ 119,916 $ — $ 119,916 $ — CMOs 197,123 — 197,123 — U.S. Agency 14,304 — 14,304 — Asset-backed securities issued by others: Residential CMOs 221 — 221 — Student Loan Trust ABSs 56,574 — 56,574 — Municipal bonds 92,841 — 92,841 — U.S. government obligations 16,860 — 16,860 — Total AFS securities $ 497,839 $ — $ 497,839 $ — Equity securities carried at fair value through income CRA investment fund $ 4,772 $ — $ 4,772 $ — Non-marketable equity securities Other equity securities $ 207 $ — $ 207 $ — Mortgage banking derivative Interest rate lock commitments $ 28 $ — $ — $ 28 |
Schedule of unobservable inputs used in Level 3 fair value measurements | The following tables provide information describing the unobservable inputs used in Level 3 fair value measurements at September 30, 2022 and December 31, 2021. September 30, 2022 Fair Value Valuation Technique Unobservable Inputs Range (Weighted Average) (dollars in thousands) Description of Asset Loans with individually assessed loans $ — Third party appraisals and in-house equipment evaluations of fair value Management discount for equipment type and current market conditions 0% - 50% - 100% December 31, 2021 Fair Value Valuation Technique Unobservable Inputs Range (Weighted Average) (dollars in thousands) Description of Asset Interest rate lock commitments $ 28 Freddie Mac pricing of loans with comparable terms Pull-through rate 0% - 100% - 75% |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Investments, All Other Investments [Abstract] | |
Fair Value, by Balance Sheet Grouping | The Company’s estimated fair values of financial instruments are presented in the following tables. September 30, 2022 Carrying Amount Fair Value Fair Value Measurements Description of Asset (dollars in thousands) Level 1 Level 2 Level 3 Assets Investment securities - AFS $ 464,502 $ 464,502 $ — $ 464,502 $ — Equity securities carried at fair value through income 4,254 4,254 — 4,254 — Non-marketable equity securities in other financial institutions 207 207 — 207 — FHLB Stock 1,226 1,226 — 1,226 — Net loans receivable 1,722,461 1,654,640 — — 1,654,640 Accrued interest receivable 6,791 6,791 — 6,791 — Investment in BOLI 39,583 39,583 — 39,583 — Liabilities Savings, NOW and money market accounts $ 1,834,158 $ 1,834,158 $ — $ 1,834,158 $ — Time deposits 292,399 292,034 — 292,034 — TRUPs 12,000 10,159 — 10,159 — Subordinated notes 19,552 18,610 — 18,610 — See the Company’s methodologies disclosed in Note 21 of the Company’s 2021 Form 10-K for the fair value methodologies used as of December 31, 2021: December 31, 2021 Carrying Amount Fair Value Fair Value Measurements Description of Asset (dollars in thousands) Level 1 Level 2 Level 3 Assets Investment securities - AFS $ 497,839 $ 497,839 $ — $ 497,839 $ — Equity securities carried at fair value through income 4,772 4,772 — 4,772 — Non-marketable equity securities in other financial institutions 207 207 — 207 — FHLB Stock 1,472 1,472 — 1,472 — Net loans receivable 1,586,791 1,578,032 — — 1,578,032 Accrued interest receivable 5,588 5,588 — 5,588 — Investment in BOLI 38,932 38,932 — 38,932 — Mortgage ranking derivatives 28 28 — — 28 Liabilities Savings, NOW and money market accounts $ 1,728,743 $ 1,728,743 $ — $ 1,728,743 $ — Time deposits 327,421 328,083 — 328,083 — Long-term debt 12,231 12,391 — 12,391 — TRUPs 12,000 11,589 — 11,589 — Subordinated notes 19,510 20,979 — 20,979 — |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME/LOSS ("AOCI"/"AOCL") (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Gain | The following table presents the changes in each component of accumulated other comprehensive gain, net of tax, for the three and nine months ended September 30, 2022 and 2021. Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 (dollars in thousands) Net Unrealized Gains And Losses Net Unrealized Gains And Losses Net Unrealized Gains And Losses Net Unrealized Gains And Losses Beginning of period $ (31,847) $ 3,063 $ (1,952) $ 4,504 Other comprehensive losses, net of tax before reclassifications (12,059) (3,072) (41,954) (4,946) Amounts reclassified from accumulated other comprehensive gain — — — 433 Net other comprehensive losses (12,059) (3,072) (41,954) (4,513) End of period $ (43,906) $ (9) $ (43,906) $ (9) |
EARNINGS PER SHARE (_EPS_) (Tab
EARNINGS PER SHARE (“EPS”) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | Basic and diluted earnings per share have been computed based on weighted-average common and common equivalent shares outstanding as follows: (dollars in thousands, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net Income $ 7,580 $ 6,404 $ 20,702 $ 19,135 Average number of common shares outstanding 5,636,640 5,709,814 5,656,950 5,813,704 Dilutive effect of common stock equivalents 8,182 10,187 9,000 9,514 Average number of shares used to calculate diluted EPS 5,644,822 5,720,001 5,665,950 5,823,218 Anti-dilutive shares 1,034 40 587 3,355 Earnings Per Common Share Basic $ 1.34 $ 1.12 $ 3.66 $ 3.29 Diluted $ 1.34 $ 1.12 $ 3.65 $ 3.29 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Current and Deferred Income Tax Expense (Benefit) | (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Current income tax expense $ 2,572 $ 1,448 $ 7,119 $ 6,048 Deferred income tax (benefit) expense (192) 710 (237) 427 Income tax expense as reported $ 2,380 $ 2,158 $ 6,882 $ 6,475 Effective tax rate 23.9 % 25.2 % 24.9 % 25.3 % |
BASIS OF PRESENTATION AND NAT_4
BASIS OF PRESENTATION AND NATURE OF OPERATIONS (Schedule of Adjustments for ASC 326) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | $ 1,606,219 | ||||||
Net deferred costs | (1,011) | ||||||
Allowance for loan losses | $ (22,027) | $ (21,404) | (18,417) | $ (18,527) | $ (18,464) | $ (19,424) | |
Net portfolio loans | 1,722,461 | $ 1,584,295 | 1,586,791 | ||||
Unfunded Loan Commitment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 268 | ||||||
Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Allowance for loan losses | (2,496) | ||||||
Cumulative Effect, Period of Adoption, Adjusted Balance | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Net portfolio loans | (2,496) | ||||||
Cumulative Effect, Period of Adoption, Adjusted Balance | Unfunded Loan Commitment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 217 | ||||||
Portfolio Loans | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 1,744,488 | 1,578,810 | 1,578,943 | ||||
Net deferred costs | 0 | (133) | |||||
Allowance for loan losses | (22,027) | (20,913) | (18,417) | ||||
Net portfolio loans | 1,721,250 | 1,557,897 | 1,560,393 | ||||
Portfolio Loans | Cumulative Effect, Period of Adoption, Adjusted Balance | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | (133) | ||||||
Net deferred costs | 133 | ||||||
Allowance for loan losses | (2,496) | ||||||
Net portfolio loans | (2,496) | ||||||
Commercial real estate | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 1,202,660 | 1,115,485 | |||||
Allowance for loan losses | (17,036) | (16,833) | (13,095) | (13,419) | (13,918) | (13,744) | |
Commercial real estate | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Allowance for loan losses | (3,734) | ||||||
Commercial real estate | Portfolio Loans | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 1,202,660 | 1,113,793 | 1,115,485 | ||||
Commercial real estate | Portfolio Loans | Cumulative Effect, Period of Adoption, Adjusted Balance | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | (1,692) | ||||||
Residential first mortgages | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 83,081 | 91,120 | |||||
Allowance for loan losses | (237) | (255) | (1,002) | (912) | (847) | (1,305) | |
Residential first mortgages | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Allowance for loan losses | 679 | ||||||
Residential first mortgages | Portfolio Loans | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 83,081 | 92,710 | 91,120 | ||||
Residential first mortgages | Portfolio Loans | Cumulative Effect, Period of Adoption, Adjusted Balance | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 1,590 | ||||||
Residential rentals | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 282,365 | 195,035 | |||||
Allowance for loan losses | (2,545) | (1,660) | (2,175) | (1,800) | (1,186) | (1,413) | |
Residential rentals | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Allowance for loan losses | 586 | ||||||
Residential rentals | Portfolio Loans | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 282,365 | 194,911 | 195,035 | ||||
Residential rentals | Portfolio Loans | Cumulative Effect, Period of Adoption, Adjusted Balance | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | (124) | ||||||
Construction and land development | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 23,197 | 35,590 | |||||
Allowance for loan losses | (197) | (166) | (260) | (368) | (332) | (401) | |
Construction and land development | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Allowance for loan losses | 82 | ||||||
Construction and land development | Portfolio Loans | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 23,197 | 35,502 | 35,590 | ||||
Construction and land development | Portfolio Loans | Cumulative Effect, Period of Adoption, Adjusted Balance | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | (88) | ||||||
Home equity and second mortgages | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 25,638 | ||||||
Allowance for loan losses | (142) | (143) | (274) | (249) | (242) | (261) | |
Home equity and second mortgages | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Allowance for loan losses | 86 | ||||||
Home equity and second mortgages | Portfolio Loans | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 25,661 | ||||||
Home equity and second mortgages | Portfolio Loans | Cumulative Effect, Period of Adoption, Adjusted Balance | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 23 | ||||||
Commercial loans | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 41,615 | 50,574 | |||||
Allowance for loan losses | (254) | (238) | (582) | (909) | (1,113) | (1,222) | |
Commercial loans | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Allowance for loan losses | 290 | ||||||
Commercial loans | Portfolio Loans | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 41,615 | 50,512 | 50,574 | ||||
Commercial loans | Portfolio Loans | Cumulative Effect, Period of Adoption, Adjusted Balance | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | (62) | ||||||
Consumer loans | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 5,754 | 3,002 | |||||
Allowance for loan losses | (142) | (132) | (58) | (42) | (28) | (20) | |
Consumer loans | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Allowance for loan losses | (2) | ||||||
Consumer loans | Portfolio Loans | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 5,754 | 3,015 | 3,002 | ||||
Consumer loans | Portfolio Loans | Cumulative Effect, Period of Adoption, Adjusted Balance | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 13 | ||||||
Commercial equipment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 78,551 | 62,499 | |||||
Allowance for loan losses | (1,474) | $ (1,977) | (971) | $ (828) | $ (798) | $ (1,058) | |
Commercial equipment | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Allowance for loan losses | (483) | ||||||
Commercial equipment | Portfolio Loans | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 78,551 | 62,706 | 62,499 | ||||
Commercial equipment | Portfolio Loans | Cumulative Effect, Period of Adoption, Adjusted Balance | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 207 | ||||||
U.S. SBA PPP | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 27,276 | ||||||
U.S. SBA PPP | Non Portfolio Loans | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 1,211 | 26,398 | 27,276 | ||||
Net deferred costs | 0 | (878) | |||||
Net portfolio loans | $ 1,211 | 26,398 | $ 26,398 | ||||
U.S. SBA PPP | Non Portfolio Loans | Cumulative Effect, Period of Adoption, Adjusted Balance | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | (878) | ||||||
Net deferred costs | 878 | ||||||
Net portfolio loans | 0 | ||||||
Accounting Standards Update 2019-11 | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Net portfolio loans | 1,586,791 | ||||||
Accounting Standards Update 2019-11 | Cumulative Effect, Period of Adoption, Adjustment | Unfunded Loan Commitment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 51 | ||||||
Accounting Standards Update 2019-11 | Portfolio Loans | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 1,578,943 | ||||||
Net deferred costs | (133) | ||||||
Allowance for loan losses | (18,417) | ||||||
Net portfolio loans | 1,560,393 | ||||||
Accounting Standards Update 2019-11 | Commercial real estate | Portfolio Loans | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 1,115,485 | ||||||
Accounting Standards Update 2019-11 | Residential first mortgages | Portfolio Loans | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 91,120 | ||||||
Accounting Standards Update 2019-11 | Residential rentals | Portfolio Loans | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 195,035 | ||||||
Accounting Standards Update 2019-11 | Construction and land development | Portfolio Loans | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 35,590 | ||||||
Accounting Standards Update 2019-11 | Home equity and second mortgages | Portfolio Loans | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 25,638 | ||||||
Accounting Standards Update 2019-11 | Commercial loans | Portfolio Loans | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 50,574 | ||||||
Accounting Standards Update 2019-11 | Consumer loans | Portfolio Loans | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 3,002 | ||||||
Accounting Standards Update 2019-11 | Commercial equipment | Portfolio Loans | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 62,499 | ||||||
Accounting Standards Update 2019-11 | U.S. SBA PPP | Non Portfolio Loans | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||||
Gross loans | 27,276 | ||||||
Net deferred costs | (878) | ||||||
Net portfolio loans | $ 26,398 |
BASIS OF PRESENTATION AND NAT_5
BASIS OF PRESENTATION AND NATURE OF OPERATIONS (Narrative) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | Jan. 01, 2022 | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
PCD loans unpaid principal balance | $ 1,400 | ||
PCD loans purchased, carrying amount | 1,100 | ||
PCD loans discount | $ 8 | ||
Estimates for economic forecast, period (in years) | 1 year | ||
Reversion to historical mean loss rates, period (in years) | 1 year | ||
Minimum | Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Adjustment to opening allowance for credit losses | $ (2,500) |
INVESTMENT SECURITIES (Fair Val
INVESTMENT SECURITIES (Fair Value to Amortized Cost Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | $ 523,882 | $ 500,478 |
Gross Unrealized Gains | 129 | 3,390 |
Gross Unrealized Losses | 59,509 | 6,029 |
Estimated Fair Value | 464,502 | 497,839 |
CRA investment fund | 4,254 | 4,772 |
Other equity securities | 207 | 207 |
Total Investment Securities, Amortized Cost | 528,343 | 505,457 |
Total Investment Securities, Gross Unrealized Gains | 129 | 3,390 |
Total Investment Securities, Gross Unrealized Losses | 59,509 | 6,029 |
Total Investment Securities, Estimated Fair Value | 468,963 | 502,818 |
Residential Mortgage Backed Securities ("MBS") | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | 128,493 | 121,125 |
Gross Unrealized Gains | 13 | 1,057 |
Gross Unrealized Losses | 13,770 | 2,266 |
Estimated Fair Value | 114,736 | 119,916 |
Residential Collateralized Mortgage Obligations ("CMOs") | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | 181,433 | 198,780 |
Gross Unrealized Gains | 13 | 710 |
Gross Unrealized Losses | 16,579 | 2,367 |
Estimated Fair Value | 164,867 | 197,123 |
U.S. Agency | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | 14,601 | 14,433 |
Gross Unrealized Gains | 0 | 11 |
Gross Unrealized Losses | 2,375 | 140 |
Estimated Fair Value | 12,226 | 14,304 |
Residential CMOs | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | 9,363 | 220 |
Gross Unrealized Gains | 0 | 5 |
Gross Unrealized Losses | 260 | 4 |
Estimated Fair Value | 9,103 | 221 |
Student Loan Trust ABSs | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | 50,315 | 56,422 |
Gross Unrealized Gains | 103 | 438 |
Gross Unrealized Losses | 1,879 | 286 |
Estimated Fair Value | 48,539 | 56,574 |
Municipal bonds | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | 99,846 | 92,556 |
Gross Unrealized Gains | 0 | 1,169 |
Gross Unrealized Losses | 20,982 | 884 |
Estimated Fair Value | 78,864 | 92,841 |
Corporate bonds | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | 3,000 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 391 | |
Estimated Fair Value | 2,609 | |
U.S. government obligations | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | 36,831 | 16,942 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 3,273 | 82 |
Estimated Fair Value | 33,558 | 16,860 |
CRA investment fund | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
CRA investment fund | 4,254 | 4,772 |
Other equity securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Other equity securities | $ 207 | $ 207 |
INVESTMENT SECURITIES (Narrativ
INVESTMENT SECURITIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Sep. 30, 2022 | |
Debt and Equity Securities, FV-NI [Line Items] | ||
Accrued interest receivable ("AIR") | $ 1,100 | $ 1,600 |
Asset backed securities pledged to secure certain deposits | 50,900 | 55,600 |
Recognized net gains | 600 | |
Securities available for sale ("AFS"), at fair value | 497,839 | $ 464,502 |
Available for Sale Securities Sold | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Securities available for sale ("AFS"), at fair value | $ 11,900 |
INVESTMENT SECURITIES (Schedule
INVESTMENT SECURITIES (Schedule of Unrealized Loss on Investments, AFS) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value | ||
Less than 12 months, fair value | $ 141,927 | $ 289,705 |
More than 12 months, fair value | 310,127 | 52,305 |
Fair value | 452,054 | 342,010 |
Unrealized Loss | ||
Less than 12 months, unrealized loss | 18,096 | 5,136 |
More than 12 months, unrealized loss | 41,413 | 893 |
Unrealized loss | 59,509 | 6,029 |
Asset-backed securities issued by GSEs and U.S. Agencies | ||
Fair Value | ||
Less than 12 months, fair value | 69,403 | 205,891 |
More than 12 months, fair value | 220,175 | 41,327 |
Fair value | 289,578 | 247,218 |
Unrealized Loss | ||
Less than 12 months, unrealized loss | 6,302 | 3,997 |
More than 12 months, unrealized loss | 26,422 | 776 |
Unrealized loss | 32,724 | 4,773 |
Asset-backed securities issued by Others | ||
Fair Value | ||
Less than 12 months, fair value | 5,937 | 0 |
More than 12 months, fair value | 149 | 57 |
Fair value | 6,086 | 57 |
Unrealized Loss | ||
Less than 12 months, unrealized loss | 244 | 0 |
More than 12 months, unrealized loss | 16 | 4 |
Unrealized loss | 260 | 4 |
Student Loan Trust ABSs | ||
Fair Value | ||
Less than 12 months, fair value | 6,536 | 21,640 |
More than 12 months, fair value | 34,823 | 2,226 |
Fair value | 41,359 | 23,866 |
Unrealized Loss | ||
Less than 12 months, unrealized loss | 1,000 | 281 |
More than 12 months, unrealized loss | 879 | 5 |
Unrealized loss | 1,879 | 286 |
Municipal bonds | ||
Fair Value | ||
Less than 12 months, fair value | 38,786 | 47,314 |
More than 12 months, fair value | 40,078 | 6,696 |
Fair value | 78,864 | 54,010 |
Unrealized Loss | ||
Less than 12 months, unrealized loss | 8,927 | 776 |
More than 12 months, unrealized loss | 12,055 | 108 |
Unrealized loss | 20,982 | 884 |
Corporate bonds | ||
Fair Value | ||
Less than 12 months, fair value | 2,609 | |
More than 12 months, fair value | 0 | |
Fair value | 2,609 | |
Unrealized Loss | ||
Less than 12 months, unrealized loss | 391 | |
More than 12 months, unrealized loss | 0 | |
Unrealized loss | 391 | |
U.S. government obligations | ||
Fair Value | ||
Less than 12 months, fair value | 18,656 | 14,860 |
More than 12 months, fair value | 14,902 | 1,999 |
Fair value | 33,558 | 16,859 |
Unrealized Loss | ||
Less than 12 months, unrealized loss | 1,232 | 82 |
More than 12 months, unrealized loss | 2,041 | 0 |
Unrealized loss | $ 3,273 | $ 82 |
INVESTMENT SECURITIES (Maturiti
INVESTMENT SECURITIES (Maturities Schedule) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Amortized Cost | ||
Within one year | $ 35,730 | $ 36,859 |
Over one year through five years | 137,433 | 121,308 |
Over five years through ten years | 219,912 | 191,166 |
After ten years | 130,807 | 151,145 |
Amortized Cost | 523,882 | 500,478 |
Estimated Fair Value | ||
Within one year | 31,680 | 36,665 |
Over one year through five years | 121,856 | 120,668 |
Over five years through ten years | 194,986 | 190,158 |
After ten years | 115,980 | 150,348 |
Securities available for sale ("AFS"), at fair value | $ 464,502 | $ 497,839 |
LOANS (Schedule of Accounts, No
LOANS (Schedule of Accounts, Notes, Loans and Financing Receivable) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | $ 1,606,219 | ||||||
Less | |||||||
Net deferred costs | $ (1,011) | ||||||
Net deferred costs (fees), percentage | (0.06%) | ||||||
Allowance for loan losses | $ (22,027) | $ (21,404) | $ (18,417) | $ (18,527) | $ (18,464) | $ (19,424) | |
Net portfolio loans | 1,722,461 | $ 1,584,295 | 1,586,791 | ||||
Accrued interest receivable | 5,200 | 4,500 | |||||
Portfolio Loans, Excluding US SBA PPP Loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | $ 1,743,277 | $ 1,578,943 | |||||
Percentage status of loan in portfolio | 100% | 100% | |||||
Portfolio Loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | $ 1,744,488 | 1,578,810 | $ 1,578,943 | ||||
Less | |||||||
Net deferred costs | 0 | $ (133) | |||||
Net deferred costs (fees), percentage | (0.01%) | ||||||
Allowance for loan losses | $ (22,027) | (20,913) | $ (18,417) | ||||
Allowance for loan losses, percentage | (1.26%) | (1.17%) | |||||
Subtotal loans | $ (18,550) | ||||||
Net portfolio loans | $ 1,721,250 | 1,557,897 | 1,560,393 | ||||
Commercial real estate | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | $ 1,202,660 | 1,115,485 | |||||
Percentage status of loan in portfolio | 68.98% | ||||||
Less | |||||||
Allowance for loan losses | $ (17,036) | (16,833) | (13,095) | (13,419) | (13,918) | (13,744) | |
Commercial real estate | Portfolio Loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | 1,202,660 | 1,113,793 | $ 1,115,485 | ||||
Percentage status of loan in portfolio | 70.66% | ||||||
Residential first mortgages | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | $ 83,081 | $ 91,120 | |||||
Percentage status of loan in portfolio | 4.77% | ||||||
Less | |||||||
Allowance for loan losses | $ (237) | (255) | (1,002) | (912) | (847) | (1,305) | |
Residential first mortgages | Portfolio Loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | 83,081 | 92,710 | $ 91,120 | ||||
Percentage status of loan in portfolio | 5.77% | ||||||
Residential rentals | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | $ 282,365 | $ 195,035 | |||||
Percentage status of loan in portfolio | 16.20% | ||||||
Less | |||||||
Allowance for loan losses | $ (2,545) | (1,660) | (2,175) | (1,800) | (1,186) | (1,413) | |
Residential rentals | Portfolio Loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | 282,365 | 194,911 | $ 195,035 | ||||
Percentage status of loan in portfolio | 12.35% | ||||||
Construction and land development | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | $ 23,197 | $ 35,590 | |||||
Percentage status of loan in portfolio | 1.33% | ||||||
Less | |||||||
Allowance for loan losses | $ (197) | (166) | (260) | (368) | (332) | (401) | |
Construction and land development | Portfolio Loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | 23,197 | 35,502 | $ 35,590 | ||||
Percentage status of loan in portfolio | 2.25% | ||||||
Home equity and second mortgages | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | $ 26,054 | ||||||
Percentage status of loan in portfolio | 1.49% | ||||||
Home equity and second mortgages | Portfolio Loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | $ 26,054 | $ 25,638 | |||||
Percentage status of loan in portfolio | 1.62% | ||||||
Commercial loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | $ 41,615 | $ 50,574 | |||||
Percentage status of loan in portfolio | 2.39% | ||||||
Less | |||||||
Allowance for loan losses | $ (254) | (238) | (582) | (909) | (1,113) | (1,222) | |
Commercial loans | Portfolio Loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | 41,615 | 50,512 | $ 50,574 | ||||
Percentage status of loan in portfolio | 3.20% | ||||||
Consumer loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | $ 5,754 | $ 3,002 | |||||
Percentage status of loan in portfolio | 0.33% | ||||||
Less | |||||||
Allowance for loan losses | $ (142) | (132) | (58) | (42) | (28) | (20) | |
Consumer loans | Portfolio Loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | 5,754 | 3,015 | $ 3,002 | ||||
Percentage status of loan in portfolio | 0.19% | ||||||
Commercial equipment | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | $ 78,551 | $ 62,499 | |||||
Percentage status of loan in portfolio | 4.51% | ||||||
Less | |||||||
Allowance for loan losses | $ (1,474) | $ (1,977) | (971) | $ (828) | $ (798) | $ (1,058) | |
Commercial equipment | Portfolio Loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | 78,551 | 62,706 | $ 62,499 | ||||
Percentage status of loan in portfolio | 3.96% | ||||||
U.S. SBA PPP | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | $ 27,276 | ||||||
U.S. SBA PPP | Non Portfolio Loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross loans | 1,211 | 26,398 | 27,276 | ||||
Less | |||||||
Net deferred costs | 0 | (878) | |||||
Net portfolio loans | $ 1,211 | $ 26,398 | $ 26,398 |
LOANS (Narrative) (Details)
LOANS (Narrative) (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) loan tDR_Loan | Dec. 31, 2021 USD ($) tDR_Loan loan | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Deferred loan fee and premiums, net | $ (1,400,000) | $ (100,000) | |||
Deferred loan fee and premium, paid by customers | 5,600,000 | $ 5,600,000 | |||
Total Deferred Fee and Premiums | $ 4,200,000 | $ 4,000,000 | $ 4,200,000 | 4,000,000 | |
Deferred loan fees and premiums include net deferred fees paid by customers | 4,100,000 | 4,100,000 | |||
Net deferred costs | 1,011,000 | 1,011,000 | |||
Gross loans | 1,606,219,000 | 1,606,219,000 | |||
Service rights retained, percent of outstanding balance | 0.25% | 0.25% | |||
Service rights retained, amount | $ 20,000,000 | 20,900,000 | $ 20,000,000 | 20,900,000 | |
Number of non-accrual delinquent loans | 578,000 | 961,000 | $ 578,000 | 961,000 | |
Delinquent non-accrual loans, impairment | 0 | 0 | |||
Reserve for delinquent non accrual loans | 300,000 | $ 300,000 | |||
Number of non-accrual loans, number of delinquent TDRs. | loan | 0 | 0 | |||
Nonaccrual | 6,290,000 | 7,631,000 | $ 6,290,000 | $ 7,631,000 | |
Number of TDR loans | tDR_Loan | 1 | 1 | |||
Specific reserves for TDR loans | $ 0 | 0 | $ 0 | $ 0 | |
Loans added to troubled debt restructuring | loan | 0 | 0 | |||
Purchased with credit deterioration, allowance for credit loss at acquisition | $ 0 | ||||
Impaired financing receivable, recorded investment | 8,494,000 | $ 6,036,000 | $ 8,494,000 | ||
PCI Loans, accretion interest | 100,000 | ||||
Reclassification to nonaccretable difference | $ 500,000 | ||||
County First Acquisition | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Percentage status of loan in portfolio | 2.63% | 2.63% | |||
Gross loans | $ 42,182,000 | $ 42,182,000 | |||
Purchased credit impaired | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Impaired financing receivable, recorded investment | $ 1,100,000 | $ 1,100,000 | |||
Purchased credit impaired | County First Acquisition | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Percentage status of loan in portfolio | 0.07% | 0.07% | |||
Gross loans | $ 1,116,000 | $ 1,116,000 | |||
Purchased credit impaired | County First Bank Acquisition | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
New acquisition accounting for fair market value adjustment | $ 300,000 | $ 300,000 | |||
Net acquisition accounting fair market value adjustment, mark | 14.95% | 14.95% | |||
All Other Loans | County First Acquisition | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Percentage status of loan in portfolio | 2.56% | 2.56% | |||
Gross loans | $ 41,066,000 | $ 41,066,000 | |||
All Other Loans | County First Bank Acquisition | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
New acquisition accounting for fair market value adjustment | $ 800,000 | $ 800,000 | |||
Net acquisition accounting fair market value adjustment, mark | 1.25% | 1.25% | |||
Loan Delinquency | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Percentage status of loan in portfolio | 0.07% | 0.09% | 0.07% | 0.09% | |
Nonaccrual | $ 1,100,000 | $ 1,400,000 | $ 1,100,000 | $ 1,400,000 | |
Increase (decrease) In loan delinquency | $ (300,000) | ||||
Nonaccrual Loans | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Percentage status of loan in portfolio | 0.36% | 0.48% | 0.36% | 0.48% | |
Increase (decrease) in finance receivables | $ (1,300,000) | ||||
Number of non-accrual delinquent loans | $ 6,300,000 | $ 7,600,000 | 6,300,000 | $ 7,600,000 | |
Nonaccrual Loans With No Impairment | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Number of non-accrual delinquent loans | 6,700,000 | $ 6,700,000 | |||
Percentage of current loans on total non accrual loans | 87% | ||||
Nonaccrual | 6,200,000 | 7,400,000 | 6,200,000 | $ 7,400,000 | |
Interest due to debt | 36,000 | 100,000 | |||
Nonaccrual Loans With Impairment | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Number of non-accrual delinquent loans | 1,000,000 | $ 1,000,000 | |||
Percentage of delinquent loans on total non accrual loans | 13% | ||||
Nonaccrual | 100,000 | 300,000 | 100,000 | $ 300,000 | |
Interest due to debt | $ 1,000 | 1,000 | |||
Residential rentals | Minimum | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Debt maturity period (in years) | 3 years | ||||
Residential rentals | Maximum | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Debt maturity period (in years) | 20 years | ||||
U.S. SBA PPP | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Net deferred costs | (41,000) | (200,000) | $ (41,000) | (200,000) | |
Offset by net deferred premiums paid to purchase loans | 3,000 | 18,000 | 3,000 | 18,000 | |
Deferred loan fees and premiums included in deferred fees paid by SBA | 44,000 | 200,000 | 44,000 | 200,000 | |
Adjustable Rate Residential First Mortgage | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Gross loans | 1,700,000,000 | 1,600,000,000 | 1,700,000,000 | $ 1,600,000,000 | |
One Troubled Debt Restructuring Loans | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Number of TDR loans | loan | 0 | ||||
Financing Receivable Troubled Debt Restructuring | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
TDR loan principal curtailment | $ 5,000 | 12,000 | $ 19,000 | ||
Seven Trouble Debt Restructuring Loans | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loans removed from troubled debt restructuring | loan | 3 | ||||
Amount of loans removed from troubled debt restructuring | $ 100,000 | ||||
Commercial loans | Minimum | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Bank exposure, threshold limit for credit rating (or greater) | $ 1,000,000 | ||||
Commercial real estate | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Percentage status of loan in portfolio | 68.98% | 68.98% | |||
Gross loans | $ 1,202,660,000 | 1,115,485,000 | $ 1,202,660,000 | 1,115,485,000 | |
Number of non-accrual delinquent loans | 0 | 0 | 0 | 0 | |
Nonaccrual | $ 4,661,000 | 4,890,000 | $ 4,661,000 | 4,890,000 | |
Impaired financing receivable, recorded investment | $ 4,890,000 | 3,136,000 | $ 4,890,000 | ||
Commercial real estate | Commercial Construction Loans | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Percentage status of loan in portfolio | 7.50% | 6.50% | 7.50% | 6.50% | |
Percent of appraised value or sales price | 80% | ||||
Residential first mortgages | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Percentage status of loan in portfolio | 4.77% | 4.77% | |||
Gross loans | $ 83,081,000 | $ 91,120,000 | $ 83,081,000 | $ 91,120,000 | |
Number of non-accrual delinquent loans | 450,000 | 450,000 | |||
Nonaccrual | 450,000 | 450,000 | |||
Impaired financing receivable, recorded investment | $ 866,000 | 872,000 | $ 866,000 | ||
Residential first mortgages | Minimum | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Debt maturity period (in years) | 10 years | ||||
Residential first mortgages | Maximum | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Debt maturity period (in years) | 30 years | ||||
Residential first mortgages | Adjustable Rate Residential First Mortgage | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Percentage status of loan in portfolio | 0.80% | 1.20% | 0.80% | 1.20% | |
Gross loans | $ 13,400,000 | $ 18,900,000 | $ 13,400,000 | $ 18,900,000 | |
Residential rentals | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Percentage status of loan in portfolio | 16.20% | 16.20% | |||
Gross loans | $ 282,365,000 | 195,035,000 | $ 282,365,000 | 195,035,000 | |
Number of non-accrual delinquent loans | 454,000 | 252,000 | 454,000 | 252,000 | |
Nonaccrual | $ 1,153,000 | 942,000 | $ 1,153,000 | 942,000 | |
Impaired financing receivable, recorded investment | $ 942,000 | $ 961,000 | $ 942,000 | ||
Residential rentals | Minimum | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Debt maturity period (in years) | 3 years | ||||
Residential rentals | Maximum | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Debt maturity period (in years) | 20 years | ||||
Residential rentals | Apartment Buildings Rentals | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Percent of appraised value or sales price | 80% |
LOANS (Schedule of Financing Re
LOANS (Schedule of Financing Receivables, Non-Accrual Status) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual with No Allowance for Credit Losses | $ 6,181 | |
Nonaccrual with Allowance for Credit Losses | 109 | |
Number of non-accrual delinquent loans | 578 | $ 961 |
Non-accrual current loans | 5,712 | 6,670 |
Nonaccrual | 6,290 | 7,631 |
Interest Income on Nonaccrual Loans | 0 | |
Interest Income on Nonaccrual Loans | 63 | |
Commercial real estate | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual with No Allowance for Credit Losses | 4,577 | |
Nonaccrual with Allowance for Credit Losses | 84 | |
Number of non-accrual delinquent loans | 0 | 0 |
Non-accrual current loans | 4,661 | 4,890 |
Nonaccrual | 4,661 | 4,890 |
Residential first mortgages | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Number of non-accrual delinquent loans | 450 | |
Non-accrual current loans | 0 | |
Nonaccrual | 450 | |
Residential rentals | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual with No Allowance for Credit Losses | 1,153 | |
Nonaccrual with Allowance for Credit Losses | 0 | |
Number of non-accrual delinquent loans | 454 | 252 |
Non-accrual current loans | 699 | 690 |
Nonaccrual | 1,153 | 942 |
Home equity and second mortgages | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual with No Allowance for Credit Losses | 240 | |
Nonaccrual with Allowance for Credit Losses | 0 | |
Number of non-accrual delinquent loans | 124 | 202 |
Non-accrual current loans | 116 | 399 |
Nonaccrual | 240 | 601 |
Commercial loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual with No Allowance for Credit Losses | 0 | |
Nonaccrual with Allowance for Credit Losses | 25 | |
Number of non-accrual delinquent loans | 0 | |
Non-accrual current loans | 25 | |
Nonaccrual | 25 | |
Commercial equipment | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual with No Allowance for Credit Losses | 211 | |
Nonaccrual with Allowance for Credit Losses | 0 | |
Number of non-accrual delinquent loans | 0 | 0 |
Non-accrual current loans | 211 | 691 |
Nonaccrual | $ 211 | 691 |
U.S. SBA PPP | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Number of non-accrual delinquent loans | 57 | |
Non-accrual current loans | 0 | |
Nonaccrual | $ 57 |
LOANS (Past Due Financing Recei
LOANS (Past Due Financing Receivables) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jan. 01, 2022 | Dec. 31, 2021 |
Financing Receivable, Impaired [Line Items] | |||
Gross loans | $ 1,606,219 | ||
Nonaccrual | $ 6,290 | 7,631 | |
Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 1,744,488 | $ 1,578,810 | 1,578,943 |
31-60 DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 527 | 200 | |
61-89 DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 186 | 319 | |
90 or Greater DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 31 | 904 | |
Nonaccrual | 397 | ||
Total Past Due | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 1,141 | 1,423 | |
Commercial real estate | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 1,202,660 | 1,115,485 | |
Nonaccrual | 4,661 | 4,890 | |
Commercial real estate | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 1,202,660 | 1,113,793 | 1,115,485 |
Commercial real estate | 31-60 DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 0 | |
Commercial real estate | 61-89 DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 0 | |
Commercial real estate | 90 or Greater DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 0 | |
Nonaccrual | 0 | ||
Commercial real estate | Total Past Due | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 0 | |
Residential first mortgages | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 83,081 | 91,120 | |
Nonaccrual | 450 | ||
Residential first mortgages | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 83,081 | 92,710 | 91,120 |
Residential first mortgages | 31-60 DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 0 | |
Residential first mortgages | 61-89 DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 277 | |
Residential first mortgages | 90 or Greater DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 450 | |
Nonaccrual | 0 | ||
Residential first mortgages | Total Past Due | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 727 | |
Residential rentals | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 282,365 | 195,035 | |
Nonaccrual | 1,153 | 942 | |
Residential rentals | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 282,365 | 194,911 | 195,035 |
Residential rentals | 31-60 DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 32 | 0 | |
Residential rentals | 61-89 DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 181 | 42 | |
Residential rentals | 90 or Greater DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 252 | |
Nonaccrual | 273 | ||
Residential rentals | Total Past Due | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 486 | 294 | |
Construction and land development | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 23,197 | 35,590 | |
Construction and land development | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 23,197 | 35,502 | 35,590 |
Construction and land development | 31-60 DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 0 | |
Construction and land development | 61-89 DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 0 | |
Construction and land development | 90 or Greater DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 0 | |
Nonaccrual | 0 | ||
Construction and land development | Total Past Due | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 0 | |
Home equity and second mortgages | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 26,054 | ||
Home equity and second mortgages | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 26,054 | 25,638 | |
Home equity and second mortgages | 31-60 DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 204 | 200 | |
Home equity and second mortgages | 61-89 DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 0 | |
Home equity and second mortgages | 90 or Greater DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 202 | |
Nonaccrual | 124 | ||
Home equity and second mortgages | Total Past Due | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 328 | 402 | |
Commercial loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 41,615 | 50,574 | |
Commercial loans | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 41,615 | 50,512 | 50,574 |
Commercial loans | 31-60 DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 0 | |
Commercial loans | 61-89 DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 0 | |
Commercial loans | 90 or Greater DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 0 | |
Nonaccrual | 0 | ||
Commercial loans | Total Past Due | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 0 | |
Consumer loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 5,754 | 3,002 | |
Consumer loans | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 5,754 | 3,015 | 3,002 |
Consumer loans | 31-60 DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 19 | 0 | |
Consumer loans | 61-89 DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 5 | 0 | |
Consumer loans | 90 or Greater DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 31 | 0 | |
Nonaccrual | 0 | ||
Consumer loans | Total Past Due | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 55 | 0 | |
Commercial equipment | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 78,551 | 62,499 | |
Nonaccrual | 211 | 691 | |
Commercial equipment | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 78,551 | 62,706 | 62,499 |
Commercial equipment | 31-60 DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 0 | |
Commercial equipment | 61-89 DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 0 | |
Commercial equipment | 90 or Greater DPD | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 0 | |
Nonaccrual | 0 | ||
Commercial equipment | Total Past Due | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 0 | |
U.S. SBA PPP | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 27,276 | ||
Nonaccrual | 57 | ||
U.S. SBA PPP | Non Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 1,211 | $ 26,398 | 27,276 |
PCI Loans | 0 | ||
U.S. SBA PPP | 31-60 DPD | Non Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 272 | 9 | |
U.S. SBA PPP | 61-89 DPD | Non Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 40 | |
U.S. SBA PPP | 90 or Greater DPD | Non Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 0 | 57 | |
Nonaccrual | 0 | ||
U.S. SBA PPP | Total Past Due | Non Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 272 | 106 | |
U.S. SBA PPP | Current | Non Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 939 | 27,170 | |
Nonaccrual | 0 | ||
Purchased credit impaired | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
PCI Loans | 1,116 | ||
Purchased credit impaired | Commercial real estate | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
PCI Loans | 1,116 | ||
Purchased credit impaired | Residential first mortgages | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
PCI Loans | 0 | ||
Purchased credit impaired | Residential rentals | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
PCI Loans | 0 | ||
Purchased credit impaired | Construction and land development | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
PCI Loans | 0 | ||
Purchased credit impaired | Home equity and second mortgages | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
PCI Loans | 0 | ||
Purchased credit impaired | Commercial loans | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
PCI Loans | 0 | ||
Purchased credit impaired | Consumer loans | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
PCI Loans | 0 | ||
Purchased credit impaired | Commercial equipment | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
PCI Loans | 0 | ||
All Other Loans | Current | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 1,737,635 | 1,576,404 | |
Nonaccrual | 5,712 | ||
All Other Loans | Commercial real estate | Current | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 1,197,999 | 1,114,369 | |
Nonaccrual | 4,661 | ||
All Other Loans | Residential first mortgages | Current | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 83,081 | 90,393 | |
Nonaccrual | 0 | ||
All Other Loans | Residential rentals | Current | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 281,180 | 194,741 | |
Nonaccrual | 699 | ||
All Other Loans | Construction and land development | Current | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 23,197 | 35,590 | |
Nonaccrual | 0 | ||
All Other Loans | Home equity and second mortgages | Current | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 25,610 | 25,236 | |
Nonaccrual | 116 | ||
All Other Loans | Commercial loans | Current | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 41,590 | 50,574 | |
Nonaccrual | 25 | ||
All Other Loans | Consumer loans | Current | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 5,699 | 3,002 | |
Nonaccrual | 0 | ||
All Other Loans | Commercial equipment | Current | Portfolio Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Gross loans | 78,340 | $ 62,499 | |
Nonaccrual | $ 211 |
LOANS (Allowance for Credit Los
LOANS (Allowance for Credit Losses "ACL" on Financing Receivables) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Allowance for credit losses: | ||||
Beginning Balance | $ 21,404 | $ 18,464 | $ 18,417 | $ 19,424 |
Charge-offs | (92) | (491) | (539) | (2,037) |
Recoveries | 21 | 554 | 84 | 606 |
Provisions | 694 | 0 | 1,569 | 534 |
Ending Balance | 22,027 | 18,527 | 22,027 | 18,527 |
Cumulative Effect, Period of Adoption, Adjustment | ||||
Allowance for credit losses: | ||||
Beginning Balance | 2,496 | |||
Commercial real estate | ||||
Allowance for credit losses: | ||||
Beginning Balance | 16,833 | 13,918 | 13,095 | 13,744 |
Charge-offs | 0 | (491) | (280) | (1,739) |
Recoveries | 0 | 4 | 0 | 6 |
Provisions | 203 | (12) | 487 | 1,408 |
Ending Balance | 17,036 | 13,419 | 17,036 | 13,419 |
Commercial real estate | Cumulative Effect, Period of Adoption, Adjustment | ||||
Allowance for credit losses: | ||||
Beginning Balance | 3,734 | |||
Residential first mortgages | ||||
Allowance for credit losses: | ||||
Beginning Balance | 255 | 847 | 1,002 | 1,305 |
Charge-offs | 0 | 0 | (111) | (142) |
Recoveries | 14 | 0 | 14 | 0 |
Provisions | (32) | 65 | 11 | (251) |
Ending Balance | 237 | 912 | 237 | 912 |
Residential first mortgages | Cumulative Effect, Period of Adoption, Adjustment | ||||
Allowance for credit losses: | ||||
Beginning Balance | (679) | |||
Residential rentals | ||||
Allowance for credit losses: | ||||
Beginning Balance | 1,660 | 1,186 | 2,175 | 1,413 |
Charge-offs | 0 | 0 | 0 | (46) |
Recoveries | 0 | 0 | 0 | 0 |
Provisions | 885 | 614 | 956 | 433 |
Ending Balance | 2,545 | 1,800 | 2,545 | 1,800 |
Residential rentals | Cumulative Effect, Period of Adoption, Adjustment | ||||
Allowance for credit losses: | ||||
Beginning Balance | (586) | |||
Construction and land development | ||||
Allowance for credit losses: | ||||
Beginning Balance | 166 | 332 | 260 | 401 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provisions | 31 | 36 | 19 | (33) |
Ending Balance | 197 | 368 | 197 | 368 |
Construction and land development | Cumulative Effect, Period of Adoption, Adjustment | ||||
Allowance for credit losses: | ||||
Beginning Balance | (82) | |||
Home equity and second mortgages | ||||
Allowance for credit losses: | ||||
Beginning Balance | 143 | 242 | 274 | 261 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 1 | 1 | 4 |
Provisions | (1) | 6 | (47) | (16) |
Ending Balance | 142 | 249 | 142 | 249 |
Home equity and second mortgages | Cumulative Effect, Period of Adoption, Adjustment | ||||
Allowance for credit losses: | ||||
Beginning Balance | (86) | |||
Commercial loans | ||||
Allowance for credit losses: | ||||
Beginning Balance | 238 | 1,113 | 582 | 1,222 |
Charge-offs | (49) | 0 | (99) | (76) |
Recoveries | 1 | 529 | 2 | 539 |
Provisions | 64 | (733) | 59 | (776) |
Ending Balance | 254 | 909 | 254 | 909 |
Commercial loans | Cumulative Effect, Period of Adoption, Adjustment | ||||
Allowance for credit losses: | ||||
Beginning Balance | (290) | |||
Consumer loans | ||||
Allowance for credit losses: | ||||
Beginning Balance | 132 | 28 | 58 | 20 |
Charge-offs | (14) | 0 | (20) | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provisions | 24 | 14 | 102 | 22 |
Ending Balance | 142 | 42 | 142 | 42 |
Consumer loans | Cumulative Effect, Period of Adoption, Adjustment | ||||
Allowance for credit losses: | ||||
Beginning Balance | 2 | |||
Commercial equipment | ||||
Allowance for credit losses: | ||||
Beginning Balance | 1,977 | 798 | 971 | 1,058 |
Charge-offs | (29) | 0 | (29) | (34) |
Recoveries | 6 | 20 | 67 | 57 |
Provisions | (480) | 10 | (18) | (253) |
Ending Balance | $ 1,474 | 828 | 1,474 | 828 |
Commercial equipment | Cumulative Effect, Period of Adoption, Adjustment | ||||
Allowance for credit losses: | ||||
Beginning Balance | $ 483 | |||
Purchased credit impaired | ||||
Allowance for credit losses: | ||||
Beginning Balance | 52 | 0 | ||
Charge-offs | 0 | 0 | ||
Recoveries | 0 | 0 | ||
Provisions | 0 | 52 | ||
Ending Balance | $ 52 | $ 52 |
LOANS (Amortized Cost for Colla
LOANS (Amortized Cost for Collateral-Dependent Loans by Class of Loans) (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | $ 6,181 |
Commercial real estate | |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | 4,577 |
Residential rentals | |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | 1,153 |
Home equity and second mortgages | |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | 240 |
Commercial equipment | |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | 211 |
Business/Other Assets | |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | 670 |
Business/Other Assets | Commercial real estate | |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | 0 |
Business/Other Assets | Residential first mortgages | |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | 0 |
Business/Other Assets | Residential rentals | |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | 0 |
Business/Other Assets | Home equity and second mortgages | |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | 0 |
Business/Other Assets | Commercial loans | |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | 25 |
Business/Other Assets | Commercial equipment | |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | 645 |
Real Estate | |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | 5,872 |
Real Estate | Commercial real estate | |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | 4,660 |
Real Estate | Residential first mortgages | |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | 0 |
Real Estate | Residential rentals | |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | 972 |
Real Estate | Home equity and second mortgages | |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | 240 |
Real Estate | Commercial loans | |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | 0 |
Real Estate | Commercial equipment | |
Financing Receivable, Nonaccrual [Line Items] | |
Nonaccrual with No Allowance for Credit Losses | $ 0 |
LOANS (Risk Category of Loans b
LOANS (Risk Category of Loans by Class of Loans) (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | $ 480,363 |
Originated, Four years before current fiscal year | 105,623 |
Originated, Three years before current fiscal year | 176,136 |
Originated, Two years before current fiscal year | 257,287 |
Originated, Fiscal year before current fiscal year | 383,762 |
Originated, Current fiscal year | 337,383 |
Revolving Loans | 3,934 |
Total | 1,744,488 |
Total loans by risk category | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 424,824 |
Originated, Four years before current fiscal year | 100,346 |
Originated, Three years before current fiscal year | 155,553 |
Originated, Two years before current fiscal year | 247,187 |
Originated, Fiscal year before current fiscal year | 372,713 |
Originated, Current fiscal year | 327,765 |
Revolving Loans | 0 |
Total | 1,628,388 |
Total loans evaluated by performing status | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 55,539 |
Originated, Four years before current fiscal year | 5,277 |
Originated, Three years before current fiscal year | 20,583 |
Originated, Two years before current fiscal year | 10,100 |
Originated, Fiscal year before current fiscal year | 11,049 |
Originated, Current fiscal year | 9,618 |
Revolving Loans | 3,934 |
Total | 116,100 |
Commercial real estate | Total loans by risk category | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 341,861 |
Originated, Four years before current fiscal year | 78,698 |
Originated, Three years before current fiscal year | 110,719 |
Originated, Two years before current fiscal year | 193,637 |
Originated, Fiscal year before current fiscal year | 283,634 |
Originated, Current fiscal year | 194,111 |
Revolving Loans | 0 |
Total | 1,202,660 |
Commercial real estate | Pass | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 335,465 |
Originated, Four years before current fiscal year | 74,482 |
Originated, Three years before current fiscal year | 107,720 |
Originated, Two years before current fiscal year | 188,070 |
Originated, Fiscal year before current fiscal year | 282,781 |
Originated, Current fiscal year | 187,151 |
Revolving Loans | 0 |
Total | 1,175,669 |
Commercial real estate | Watch | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 5,588 |
Originated, Four years before current fiscal year | 4,216 |
Originated, Three years before current fiscal year | 0 |
Originated, Two years before current fiscal year | 5,567 |
Originated, Fiscal year before current fiscal year | 0 |
Originated, Current fiscal year | 6,960 |
Revolving Loans | 0 |
Total | 22,331 |
Commercial real estate | Special mention | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 0 |
Originated, Four years before current fiscal year | 0 |
Originated, Three years before current fiscal year | 0 |
Originated, Two years before current fiscal year | 0 |
Originated, Fiscal year before current fiscal year | 0 |
Originated, Current fiscal year | 0 |
Revolving Loans | 0 |
Total | 0 |
Commercial real estate | Substandard | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 808 |
Originated, Four years before current fiscal year | 0 |
Originated, Three years before current fiscal year | 2,999 |
Originated, Two years before current fiscal year | 0 |
Originated, Fiscal year before current fiscal year | 853 |
Originated, Current fiscal year | 0 |
Revolving Loans | 0 |
Total | 4,660 |
Residential rentals | Total loans by risk category | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 46,160 |
Originated, Four years before current fiscal year | 4,495 |
Originated, Three years before current fiscal year | 21,141 |
Originated, Two years before current fiscal year | 42,263 |
Originated, Fiscal year before current fiscal year | 65,468 |
Originated, Current fiscal year | 102,838 |
Revolving Loans | 0 |
Total | 282,365 |
Residential rentals | Pass | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 45,188 |
Originated, Four years before current fiscal year | 4,495 |
Originated, Three years before current fiscal year | 21,141 |
Originated, Two years before current fiscal year | 42,263 |
Originated, Fiscal year before current fiscal year | 65,468 |
Originated, Current fiscal year | 102,838 |
Revolving Loans | 0 |
Total | 281,393 |
Residential rentals | Watch | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 0 |
Originated, Four years before current fiscal year | 0 |
Originated, Three years before current fiscal year | 0 |
Originated, Two years before current fiscal year | 0 |
Originated, Fiscal year before current fiscal year | 0 |
Originated, Current fiscal year | 0 |
Revolving Loans | 0 |
Total | 0 |
Residential rentals | Special mention | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 0 |
Originated, Four years before current fiscal year | 0 |
Originated, Three years before current fiscal year | 0 |
Originated, Two years before current fiscal year | 0 |
Originated, Fiscal year before current fiscal year | 0 |
Originated, Current fiscal year | 0 |
Revolving Loans | 0 |
Total | 0 |
Residential rentals | Substandard | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 972 |
Originated, Four years before current fiscal year | 0 |
Originated, Three years before current fiscal year | 0 |
Originated, Two years before current fiscal year | 0 |
Originated, Fiscal year before current fiscal year | 0 |
Originated, Current fiscal year | 0 |
Revolving Loans | 0 |
Total | 972 |
Construction and land development | Total loans by risk category | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 4,550 |
Originated, Four years before current fiscal year | 8,987 |
Originated, Three years before current fiscal year | 5,094 |
Originated, Two years before current fiscal year | 1,399 |
Originated, Fiscal year before current fiscal year | 2,529 |
Originated, Current fiscal year | 638 |
Revolving Loans | 0 |
Total | 23,197 |
Construction and land development | Pass | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 4,550 |
Originated, Four years before current fiscal year | 8,987 |
Originated, Three years before current fiscal year | 5,094 |
Originated, Two years before current fiscal year | 1,399 |
Originated, Fiscal year before current fiscal year | 2,529 |
Originated, Current fiscal year | 638 |
Revolving Loans | 0 |
Total | 23,197 |
Construction and land development | Watch | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 0 |
Originated, Four years before current fiscal year | 0 |
Originated, Three years before current fiscal year | 0 |
Originated, Two years before current fiscal year | 0 |
Originated, Fiscal year before current fiscal year | 0 |
Originated, Current fiscal year | 0 |
Revolving Loans | 0 |
Total | 0 |
Construction and land development | Special mention | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 0 |
Originated, Four years before current fiscal year | 0 |
Originated, Three years before current fiscal year | 0 |
Originated, Two years before current fiscal year | 0 |
Originated, Fiscal year before current fiscal year | 0 |
Originated, Current fiscal year | 0 |
Revolving Loans | 0 |
Total | 0 |
Construction and land development | Substandard | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 0 |
Originated, Four years before current fiscal year | 0 |
Originated, Three years before current fiscal year | 0 |
Originated, Two years before current fiscal year | 0 |
Originated, Fiscal year before current fiscal year | 0 |
Originated, Current fiscal year | 0 |
Revolving Loans | 0 |
Total | 0 |
Commercial loans | Total loans by risk category | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 23,516 |
Originated, Four years before current fiscal year | 2,628 |
Originated, Three years before current fiscal year | 2,708 |
Originated, Two years before current fiscal year | 1,893 |
Originated, Fiscal year before current fiscal year | 7,792 |
Originated, Current fiscal year | 3,078 |
Revolving Loans | 0 |
Total | 41,615 |
Commercial loans | Pass | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 23,516 |
Originated, Four years before current fiscal year | 2,628 |
Originated, Three years before current fiscal year | 2,708 |
Originated, Two years before current fiscal year | 1,868 |
Originated, Fiscal year before current fiscal year | 7,792 |
Originated, Current fiscal year | 3,078 |
Revolving Loans | 0 |
Total | 41,590 |
Commercial loans | Watch | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 0 |
Originated, Four years before current fiscal year | 0 |
Originated, Three years before current fiscal year | 0 |
Originated, Two years before current fiscal year | 0 |
Originated, Fiscal year before current fiscal year | 0 |
Originated, Current fiscal year | 0 |
Revolving Loans | 0 |
Total | 0 |
Commercial loans | Special mention | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 0 |
Originated, Four years before current fiscal year | 0 |
Originated, Three years before current fiscal year | 0 |
Originated, Two years before current fiscal year | 0 |
Originated, Fiscal year before current fiscal year | 0 |
Originated, Current fiscal year | 0 |
Revolving Loans | 0 |
Total | 0 |
Commercial loans | Substandard | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 0 |
Originated, Four years before current fiscal year | 0 |
Originated, Three years before current fiscal year | 0 |
Originated, Two years before current fiscal year | 25 |
Originated, Fiscal year before current fiscal year | 0 |
Originated, Current fiscal year | 0 |
Revolving Loans | 0 |
Total | 25 |
Commercial equipment | Total loans by risk category | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 8,737 |
Originated, Four years before current fiscal year | 5,538 |
Originated, Three years before current fiscal year | 15,891 |
Originated, Two years before current fiscal year | 7,995 |
Originated, Fiscal year before current fiscal year | 13,290 |
Originated, Current fiscal year | 27,100 |
Revolving Loans | 0 |
Total | 78,551 |
Commercial equipment | Pass | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 8,737 |
Originated, Four years before current fiscal year | 5,363 |
Originated, Three years before current fiscal year | 15,519 |
Originated, Two years before current fiscal year | 7,995 |
Originated, Fiscal year before current fiscal year | 13,290 |
Originated, Current fiscal year | 27,100 |
Revolving Loans | 0 |
Total | 78,004 |
Commercial equipment | Watch | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 0 |
Originated, Four years before current fiscal year | 175 |
Originated, Three years before current fiscal year | 0 |
Originated, Two years before current fiscal year | 0 |
Originated, Fiscal year before current fiscal year | 0 |
Originated, Current fiscal year | 0 |
Revolving Loans | 0 |
Total | 175 |
Commercial equipment | Special mention | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 0 |
Originated, Four years before current fiscal year | 0 |
Originated, Three years before current fiscal year | 160 |
Originated, Two years before current fiscal year | 0 |
Originated, Fiscal year before current fiscal year | 0 |
Originated, Current fiscal year | 0 |
Revolving Loans | 0 |
Total | 160 |
Commercial equipment | Substandard | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 0 |
Originated, Four years before current fiscal year | 0 |
Originated, Three years before current fiscal year | 212 |
Originated, Two years before current fiscal year | 0 |
Originated, Fiscal year before current fiscal year | 0 |
Originated, Current fiscal year | 0 |
Revolving Loans | 0 |
Total | 212 |
Residential first mortgages | Performing | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 39,498 |
Originated, Four years before current fiscal year | 3,891 |
Originated, Three years before current fiscal year | 19,542 |
Originated, Two years before current fiscal year | 8,577 |
Originated, Fiscal year before current fiscal year | 5,279 |
Originated, Current fiscal year | 6,294 |
Revolving Loans | 0 |
Total | 83,081 |
Residential first mortgages | Nonperforming | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 0 |
Originated, Four years before current fiscal year | 0 |
Originated, Three years before current fiscal year | 0 |
Originated, Two years before current fiscal year | 0 |
Originated, Fiscal year before current fiscal year | 0 |
Originated, Current fiscal year | 0 |
Total | 0 |
Residential first mortgages | Total loans evaluated by performing status | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 39,498 |
Originated, Four years before current fiscal year | 3,891 |
Originated, Three years before current fiscal year | 19,542 |
Originated, Two years before current fiscal year | 8,577 |
Originated, Fiscal year before current fiscal year | 5,279 |
Originated, Current fiscal year | 6,294 |
Total | 83,081 |
Residential first mortgages | Total loans evaluated by performing status | Performing | |
Loans and Leases Receivable Disclosure [Line Items] | |
Revolving Loans | 0 |
Home equity and second mortgages | Performing | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 15,900 |
Originated, Four years before current fiscal year | 1,383 |
Originated, Three years before current fiscal year | 933 |
Originated, Two years before current fiscal year | 1,384 |
Originated, Fiscal year before current fiscal year | 3,881 |
Originated, Current fiscal year | 2,474 |
Revolving Loans | 0 |
Total | 25,955 |
Home equity and second mortgages | Nonperforming | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 99 |
Originated, Four years before current fiscal year | 0 |
Originated, Three years before current fiscal year | 0 |
Originated, Two years before current fiscal year | 0 |
Originated, Fiscal year before current fiscal year | 0 |
Originated, Current fiscal year | 0 |
Revolving Loans | 0 |
Total | 99 |
Home equity and second mortgages | Total loans evaluated by performing status | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 15,999 |
Originated, Four years before current fiscal year | 1,383 |
Originated, Three years before current fiscal year | 933 |
Originated, Two years before current fiscal year | 1,384 |
Originated, Fiscal year before current fiscal year | 3,881 |
Originated, Current fiscal year | 2,474 |
Revolving Loans | 0 |
Total | 26,054 |
Consumer loans | Performing | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 42 |
Originated, Four years before current fiscal year | 3 |
Originated, Three years before current fiscal year | 108 |
Originated, Two years before current fiscal year | 139 |
Originated, Fiscal year before current fiscal year | 678 |
Originated, Current fiscal year | 850 |
Revolving Loans | 3,903 |
Total | 5,723 |
Consumer loans | Nonperforming | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 0 |
Originated, Four years before current fiscal year | |
Originated, Three years before current fiscal year | 0 |
Originated, Two years before current fiscal year | |
Originated, Fiscal year before current fiscal year | |
Originated, Current fiscal year | |
Revolving Loans | 31 |
Total | 31 |
Consumer loans | Total loans evaluated by performing status | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 42 |
Originated, Four years before current fiscal year | 3 |
Originated, Three years before current fiscal year | 108 |
Originated, Two years before current fiscal year | 139 |
Originated, Fiscal year before current fiscal year | 678 |
Originated, Current fiscal year | 850 |
Revolving Loans | 3,934 |
Total | 5,754 |
U.S. SBA PPP | Performing | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 0 |
Originated, Four years before current fiscal year | 0 |
Originated, Three years before current fiscal year | 0 |
Originated, Two years before current fiscal year | 0 |
Originated, Fiscal year before current fiscal year | 1,211 |
Originated, Current fiscal year | 0 |
Revolving Loans | 0 |
Total | 1,211 |
U.S. SBA PPP | Nonperforming | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 0 |
Originated, Four years before current fiscal year | 0 |
Originated, Three years before current fiscal year | 0 |
Originated, Two years before current fiscal year | 0 |
Originated, Fiscal year before current fiscal year | 0 |
Originated, Current fiscal year | 0 |
Revolving Loans | 0 |
Total | 0 |
U.S. SBA PPP | Total loans evaluated by performing status | |
Loans and Leases Receivable Disclosure [Line Items] | |
Prior | 0 |
Originated, Four years before current fiscal year | 0 |
Originated, Three years before current fiscal year | 0 |
Originated, Two years before current fiscal year | 0 |
Originated, Fiscal year before current fiscal year | 1,211 |
Originated, Current fiscal year | 0 |
Revolving Loans | 0 |
Total | $ 1,211 |
LOANS (Schedule of Financing _2
LOANS (Schedule of Financing Receivable Recorded Investment Credit Quality Indicator) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | $ 1,606,219 | |
Unrated | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 127,679 | |
Pass | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 1,473,329 | |
Special mention | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Substandard | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 5,211 | |
Doubtful | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Loss | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Commercial real estate | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | $ 1,202,660 | 1,115,485 |
Commercial real estate | Unrated | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Commercial real estate | Pass | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 1,111,857 | |
Commercial real estate | Special mention | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Commercial real estate | Substandard | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 3,628 | |
Commercial real estate | Doubtful | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Commercial real estate | Loss | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Construction and land development | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 23,197 | 35,590 |
Construction and land development | Unrated | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Construction and land development | Pass | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 35,590 | |
Construction and land development | Special mention | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Construction and land development | Substandard | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Construction and land development | Doubtful | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Construction and land development | Loss | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Residential rentals | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 282,365 | 195,035 |
Residential rentals | Unrated | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Residential rentals | Pass | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 194,093 | |
Residential rentals | Special mention | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Residential rentals | Substandard | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 942 | |
Residential rentals | Doubtful | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Residential rentals | Loss | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Commercial loans | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 41,615 | 50,574 |
Commercial loans | Unrated | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Commercial loans | Pass | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 50,574 | |
Commercial loans | Special mention | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Commercial loans | Substandard | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Commercial loans | Doubtful | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Commercial loans | Loss | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Commercial equipment | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 78,551 | 62,499 |
Commercial equipment | Unrated | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Commercial equipment | Pass | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 62,326 | |
Commercial equipment | Special mention | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Commercial equipment | Substandard | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 173 | |
Commercial equipment | Doubtful | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Commercial equipment | Loss | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Total Commercial Portfolios | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 1,459,183 | |
Total Commercial Portfolios | Unrated | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Total Commercial Portfolios | Pass | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 1,454,440 | |
Total Commercial Portfolios | Special mention | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Total Commercial Portfolios | Substandard | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 4,743 | |
Total Commercial Portfolios | Doubtful | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Total Commercial Portfolios | Loss | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Non-Commercial Portfolios | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 119,760 | |
Non-Commercial Portfolios | Unrated | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 100,403 | |
Non-Commercial Portfolios | Pass | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 18,889 | |
Non-Commercial Portfolios | Special mention | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Non-Commercial Portfolios | Substandard | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 468 | |
Non-Commercial Portfolios | Doubtful | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Non-Commercial Portfolios | Loss | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
U.S. SBA PPP | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 27,276 | |
U.S. SBA PPP | Unrated | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 27,276 | |
U.S. SBA PPP | Pass | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
U.S. SBA PPP | Special mention | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
U.S. SBA PPP | Substandard | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
U.S. SBA PPP | Doubtful | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
U.S. SBA PPP | Loss | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 0 | |
Residential first mortgages | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 83,081 | 91,120 |
Residential first mortgages | Performing | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 90,670 | |
Residential first mortgages | Nonperforming | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 450 | |
Home equity and second mortgages | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 25,638 | |
Home equity and second mortgages | Performing | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 25,436 | |
Home equity and second mortgages | Nonperforming | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 202 | |
Consumer loans | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | $ 5,754 | 3,002 |
Consumer loans | Performing | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | 3,002 | |
Consumer loans | Nonperforming | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Gross loans | $ 0 |
LOANS (Troubled Debt Restructur
LOANS (Troubled Debt Restructurings on Financing Receivables) (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 USD ($) tDR_Loan | Dec. 31, 2021 USD ($) tDR_Loan | |
Financing Receivable, Impaired [Line Items] | ||
Number of TDR loans | tDR_Loan | 1 | 1 |
Number of non-accrual TDR loans | tDR_Loan | 0 | 0 |
Number of accrual TDR loans | tDR_Loan | 1 | 1 |
Financing receivable post modification recorded investment | $ | $ 433 | $ 447 |
Less: TDRs included in non-accrual loans | $ | 0 | 0 |
Accrual TDR loans | $ | $ 433 | $ 447 |
Commercial equipment | ||
Financing Receivable, Impaired [Line Items] | ||
Number of TDR loans | tDR_Loan | 1 | 1 |
Financing receivable post modification recorded investment | $ | $ 433 | $ 447 |
LOANS (Impaired Financing Recei
LOANS (Impaired Financing Receivables) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | |
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | $ 6,171 | $ 6,171 | $ 8,681 |
Recorded Investment With No Allowance | 5,245 | 5,245 | 8,228 |
Recorded Investment With Allowance | 791 | 791 | 266 |
Total Recorded Investment | 6,036 | 6,036 | 8,494 |
Related Allowance | 323 | 323 | 266 |
Average Recorded Investment | 6,050 | 6,087 | 9,487 |
Interest Income Recognized | 53 | 169 | 447 |
Commercial real estate | |||
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 3,205 | 3,205 | 4,994 |
Recorded Investment With No Allowance | 2,377 | 2,377 | 4,797 |
Recorded Investment With Allowance | 759 | 759 | 93 |
Total Recorded Investment | 3,136 | 3,136 | 4,890 |
Related Allowance | 291 | 291 | 93 |
Average Recorded Investment | 3,146 | 3,177 | 4,866 |
Interest Income Recognized | 25 | 80 | 254 |
Residential first mortgages | |||
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 884 | 884 | 879 |
Recorded Investment With No Allowance | 872 | 872 | 866 |
Recorded Investment With Allowance | 0 | 0 | 0 |
Total Recorded Investment | 872 | 872 | 866 |
Related Allowance | 0 | 0 | 0 |
Average Recorded Investment | 873 | 878 | 874 |
Interest Income Recognized | 7 | 25 | 32 |
Residential rentals | |||
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 990 | 990 | 982 |
Recorded Investment With No Allowance | 961 | 961 | 942 |
Recorded Investment With Allowance | 0 | 0 | 0 |
Total Recorded Investment | 961 | 961 | 942 |
Related Allowance | 0 | 0 | 0 |
Average Recorded Investment | 961 | 956 | 959 |
Interest Income Recognized | 13 | 38 | 48 |
Home equity and second mortgages | |||
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 602 | 602 | 626 |
Recorded Investment With No Allowance | 580 | 580 | 601 |
Recorded Investment With Allowance | 0 | 0 | 0 |
Total Recorded Investment | 580 | 580 | 601 |
Related Allowance | 0 | 0 | 0 |
Average Recorded Investment | 581 | 583 | 604 |
Interest Income Recognized | 3 | 10 | 14 |
Commercial equipment | |||
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 490 | 490 | 1,200 |
Recorded Investment With No Allowance | 455 | 455 | 1,022 |
Recorded Investment With Allowance | 32 | 32 | 173 |
Total Recorded Investment | 487 | 487 | 1,195 |
Related Allowance | 32 | 32 | 173 |
Average Recorded Investment | 489 | 493 | 2,184 |
Interest Income Recognized | $ 5 | $ 16 | $ 99 |
LOANS (Loan Receivable and Allo
LOANS (Loan Receivable and Allowance Balances Disaggregated) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
Allowance for credit losses: | ||
Ending balance: individually evaluated for impairment | $ 266 | $ 323 |
Ending balance: collectively evaluated for impairment | 18,151 | 18,204 |
Total allowance for loan losses | 18,417 | 18,579 |
Portfolio Loans | ||
Loan Receivables: | ||
Ending balance: individually evaluated for impairment | 8,494 | 6,036 |
Ending balance: collectively evaluated for impairment | 1,569,333 | 1,525,871 |
Gross loans | 1,578,943 | 1,533,051 |
Purchased credit impaired | ||
Allowance for credit losses: | ||
Total allowance for loan losses | 0 | 52 |
Purchased credit impaired | Portfolio Loans | ||
Loan Receivables: | ||
Gross loans | 1,116 | 1,144 |
Commercial real estate | ||
Allowance for credit losses: | ||
Ending balance: individually evaluated for impairment | 93 | 291 |
Ending balance: collectively evaluated for impairment | 13,002 | 13,128 |
Total allowance for loan losses | 13,095 | 13,471 |
Commercial real estate | Portfolio Loans | ||
Loan Receivables: | ||
Ending balance: individually evaluated for impairment | 4,890 | 3,136 |
Ending balance: collectively evaluated for impairment | 1,109,479 | 1,084,356 |
Gross loans | 1,115,485 | 1,088,636 |
Commercial real estate | Purchased credit impaired | ||
Allowance for credit losses: | ||
Total allowance for loan losses | 0 | 52 |
Commercial real estate | Purchased credit impaired | Portfolio Loans | ||
Loan Receivables: | ||
Gross loans | 1,116 | 1,144 |
Residential first mortgages | ||
Allowance for credit losses: | ||
Ending balance: individually evaluated for impairment | 0 | |
Ending balance: collectively evaluated for impairment | 1,002 | 912 |
Total allowance for loan losses | 1,002 | 912 |
Residential first mortgages | Portfolio Loans | ||
Loan Receivables: | ||
Ending balance: individually evaluated for impairment | 866 | 872 |
Ending balance: collectively evaluated for impairment | 90,254 | 95,963 |
Gross loans | 91,120 | 96,835 |
Residential first mortgages | Purchased credit impaired | Portfolio Loans | ||
Loan Receivables: | ||
Gross loans | 0 | 0 |
Residential rentals | ||
Allowance for credit losses: | ||
Ending balance: collectively evaluated for impairment | 2,175 | 1,800 |
Total allowance for loan losses | 2,175 | 1,800 |
Residential rentals | Portfolio Loans | ||
Loan Receivables: | ||
Ending balance: individually evaluated for impairment | 942 | 961 |
Ending balance: collectively evaluated for impairment | 194,093 | 171,121 |
Gross loans | 195,035 | 172,082 |
Residential rentals | Purchased credit impaired | Portfolio Loans | ||
Loan Receivables: | ||
Gross loans | 0 | 0 |
Construction and land development | ||
Allowance for credit losses: | ||
Ending balance: collectively evaluated for impairment | 260 | 368 |
Total allowance for loan losses | 260 | 368 |
Construction and land development | Portfolio Loans | ||
Loan Receivables: | ||
Ending balance: individually evaluated for impairment | 0 | 0 |
Ending balance: collectively evaluated for impairment | 35,590 | 37,139 |
Gross loans | 35,590 | 37,139 |
Construction and land development | Purchased credit impaired | Portfolio Loans | ||
Loan Receivables: | ||
Gross loans | 0 | 0 |
Home equity and second mortgages | ||
Allowance for credit losses: | ||
Ending balance: collectively evaluated for impairment | 274 | 249 |
Total allowance for loan losses | 274 | 249 |
Home equity and second mortgages | Portfolio Loans | ||
Loan Receivables: | ||
Ending balance: individually evaluated for impairment | 601 | 580 |
Ending balance: collectively evaluated for impairment | 25,037 | 25,938 |
Gross loans | 25,638 | 26,518 |
Home equity and second mortgages | Purchased credit impaired | Portfolio Loans | ||
Loan Receivables: | ||
Gross loans | 0 | 0 |
Commercial loans | ||
Allowance for credit losses: | ||
Ending balance: individually evaluated for impairment | 0 | 0 |
Ending balance: collectively evaluated for impairment | 582 | 909 |
Total allowance for loan losses | 582 | 909 |
Commercial loans | Portfolio Loans | ||
Loan Receivables: | ||
Ending balance: individually evaluated for impairment | 0 | 0 |
Ending balance: collectively evaluated for impairment | 50,574 | 48,327 |
Gross loans | 50,574 | 48,327 |
Consumer loans | ||
Allowance for credit losses: | ||
Ending balance: individually evaluated for impairment | 0 | 0 |
Ending balance: collectively evaluated for impairment | 58 | 42 |
Total allowance for loan losses | 58 | 42 |
Consumer loans | Portfolio Loans | ||
Loan Receivables: | ||
Ending balance: individually evaluated for impairment | 0 | 0 |
Ending balance: collectively evaluated for impairment | 3,002 | 2,168 |
Gross loans | 3,002 | 2,168 |
Commercial equipment | ||
Allowance for credit losses: | ||
Ending balance: individually evaluated for impairment | 173 | 32 |
Ending balance: collectively evaluated for impairment | 798 | 796 |
Total allowance for loan losses | 971 | 828 |
Commercial equipment | Portfolio Loans | ||
Loan Receivables: | ||
Ending balance: individually evaluated for impairment | 1,195 | 487 |
Ending balance: collectively evaluated for impairment | 61,304 | 60,859 |
Gross loans | $ 62,499 | $ 61,346 |
LOANS (Changes in the Accretabl
LOANS (Changes in the Accretable Yield for PCI Loans) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | |
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | |||
Accretable yield, beginning of period | $ 324 | $ 342 | $ 342 |
Additions | 0 | 0 | 0 |
Accretion | (31) | (92) | (117) |
Reclassification from nonaccretable difference | 15 | 29 | 43 |
Other changes, net | (15) | 14 | 55 |
Accretable yield, end of period | $ 293 | $ 293 | $ 323 |
LOANS (Acquired and Non-Acquire
LOANS (Acquired and Non-Acquired Loans) (Details) $ in Thousands | Dec. 31, 2021 USD ($) |
Loans and Leases Receivable Disclosure [Line Items] | |
Gross loans | $ 1,606,219 |
Net deferred costs | $ (1,011) |
Net deferred costs (fees), percentage | (0.06%) |
Total loans, net of deferred fees | $ 1,605,208 |
County First Acquisition | |
Loans and Leases Receivable Disclosure [Line Items] | |
Gross loans | $ 42,182 |
Percentage status of loan in portfolio | 2.63% |
County First Acquisition | All Other Loans | |
Loans and Leases Receivable Disclosure [Line Items] | |
Gross loans | $ 41,066 |
Percentage status of loan in portfolio | 2.56% |
County First Acquisition | Purchased credit impaired | |
Loans and Leases Receivable Disclosure [Line Items] | |
Gross loans | $ 1,116 |
Percentage status of loan in portfolio | 0.07% |
U.S. SBA PPP | |
Loans and Leases Receivable Disclosure [Line Items] | |
Gross loans | $ 27,276 |
Percentage status of loan in portfolio | 1.70% |
Non-acquired loans | |
Loans and Leases Receivable Disclosure [Line Items] | |
Gross loans | $ 1,536,761 |
Percentage status of loan in portfolio | 95.68% |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Goodwill and Acquired Intangible Assets Subject to Amortization) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | $ 10,835 | $ 10,835 |
Net Intangible Assets | 725 | |
Core deposit intangible ("CDI") | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,590 | 3,590 |
Accumulated Amortization | (2,865) | (2,558) |
Net Intangible Assets | $ 725 | $ 1,032 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS (Estimated Amortization Expense) (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Estimated amortization expense | |
Remainder of 2022 | $ 91 |
2023 | 302 |
2024 | 205 |
2025 | 109 |
2026 | 18 |
Net Intangible Assets | $ 725 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Dec. 31, 2021 | Sep. 30, 2022 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | $ 10,835,000 | $ 10,835,000 |
Goodwill, percent of equity | 6.05% | |
Goodwill and core deposit intangibles | $ 0 | $ 0 |
Core deposit intangible ("CDI") | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Core deposit intangibles | $ 700,000 | |
Core deposit intangibles, percent of equity | 0.40% |
OTHER REAL ESTATE OWNED ("ORE_3
OTHER REAL ESTATE OWNED ("OREO") (Foreclosed Real Estate Roll Forward) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Repossessed Assets Rollforward [Roll Forward] | |||
Balance at beginning of year | $ 0 | $ 3,109 | $ 3,109 |
Additions of underlying property | 0 | 0 | 0 |
Disposals of underlying property | 0 | (932) | (1,722) |
Valuation allowance | 0 | (641) | (1,387) |
Balance at end of period | $ 0 | $ 1,536 | $ 0 |
OTHER REAL ESTATE OWNED ("ORE_4
OTHER REAL ESTATE OWNED ("OREO") (Foreclosed Real Estate Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Real Estate [Abstract] | |||||
Valuation allowance | $ 0 | $ 641 | $ 1,387 | ||
Losses (gains) on dispositions | 0 | (16) | |||
Operating expenses | 6 | 64 | |||
Expenses applicable to OREO assets | $ 0 | $ 20 | $ 6 | $ 689 |
OTHER REAL ESTATE OWNED ("ORE_5
OTHER REAL ESTATE OWNED ("OREO") (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Residential Lots | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Impaired loans secured by residential real estate | $ 0.1 | $ 0 |
DEPOSITS (Schedule Of Deposits)
DEPOSITS (Schedule Of Deposits) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Deposits, by Type [Abstract] | ||
Non-interest-bearing deposits | $ 647,432 | $ 445,778 |
Noninterest bearing deposit liabilities, percent | 30.45% | 21.68% |
Interest-bearing deposit, Amount | ||
Demand | $ 691,987 | $ 790,481 |
Money market deposits | 371,175 | 372,717 |
Savings | 123,564 | 119,767 |
Certificates of deposit | 292,399 | 327,421 |
Total interest-bearing | 1,479,125 | 1,610,386 |
Total deposits | $ 2,126,557 | $ 2,056,164 |
Interest-bearing deposit, percent | ||
Demand | 32.54% | 38.45% |
Money market deposits | 17.45% | 18.13% |
Savings | 5.81% | 5.82% |
Certificates of deposit | 13.75% | 15.92% |
Total interest-bearing | 69.55% | 78.32% |
Total Deposits | 100% | 100% |
DEPOSITS (Narrative) (Details)
DEPOSITS (Narrative) (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 USD ($) customer_relationship | Dec. 31, 2021 USD ($) customer_relationship | |
Deposit Liability [Line Items] | ||
Time deposits 250000 or more | $ 55,100 | $ 57,600 |
Total deposits | $ 2,126,557 | $ 2,056,164 |
Customer Concentration Risk | Sales Revenue, Net | ||
Deposit Liability [Line Items] | ||
Concentration risk, customer with deposits exceeding threshold | customer_relationship | 2 | 2 |
Total deposits | $ 427,700 | $ 335,600 |
Concentration risk percentage of total deposits | 20.10% | 16.30% |
Customer Concentration Risk | Sales Revenue, Net | Product | ||
Deposit Liability [Line Items] | ||
Concentration risk, percentage | 2% | 2% |
LEASE COMMITMENTS & CONTINGEN_3
LEASE COMMITMENTS & CONTINGENCIES (Right of Use Assets, Net of Accumulated Amortization) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Operating Leases | ||
Operating lease right of use asset, net | $ 6,022 | $ 6,124 |
Operating lease liability | $ 6,288 | $ 6,343 |
Weighted average remaining lease term (in years) | 15 years 10 months 2 days | 17 years 2 months 15 days |
Weighted average discount rate | 3.50% | 3.51% |
Minimum | ||
Operating Leases | ||
Remaining lease term (in years) | 4 years 9 months 18 days | 6 years 3 months 18 days |
Maximum | ||
Operating Leases | ||
Remaining lease term (in years) | 22 years | 23 years |
LEASE COMMITMENTS & CONTINGEN_4
LEASE COMMITMENTS & CONTINGENCIES (Lease Cost) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease cost | $ 157 | $ 146 | $ 454 | $ 489 |
Cash paid for lease liability | $ 140 | $ 150 | $ 406 | $ 485 |
LEASE COMMITMENTS & CONTINGEN_5
LEASE COMMITMENTS & CONTINGENCIES (Maturity Analysis of Operating Lease Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
Within one year | $ 569 | |
After one but within two years | 584 | |
After two but within three years | 611 | |
After three but within four years | 637 | |
After four but within five years | 629 | |
After five years | 5,375 | |
Total undiscounted cash flows | 8,405 | |
Discount on cash flows | 2,117 | |
Operating lease liability | $ 6,288 | $ 6,343 |
GUARANTEED PREFERRED BENEFICI_2
GUARANTEED PREFERRED BENEFICIAL INTEREST IN JUNIOR SUBORDINATED DEBENTURES (“TRUPs”) (Narrative) (Details) - USD ($) | 9 Months Ended | ||
Jun. 15, 2005 | Jul. 22, 2004 | Sep. 30, 2022 | |
Capital Trust I I | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 5,000,000 | ||
Basis spread on variable rate (as a percent) | 1.70% | ||
Additional amount contributed to purchase debt | 200,000 | ||
Junior subordinated notes purchased | $ 5,200,000 | ||
Capital Trust I | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 7,000,000 | ||
Basis spread on variable rate (as a percent) | 2.60% | ||
Additional amount contributed to purchase debt | $ 200,000 | ||
Junior subordinated notes purchased | $ 7,200,000 |
SUBORDINATED NOTES (Details)
SUBORDINATED NOTES (Details) - USD ($) $ in Thousands | Oct. 14, 2020 | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Debt Instrument [Line Items] | ||||
Subordinated notes | $ 19,552 | $ 19,510 | ||
Fixed 4.75% to Floating Rate Notes, Due 2030 | ||||
Debt Instrument [Line Items] | ||||
Subordinated notes | $ 20,000 | |||
Stated interest rate (as a percentage) | 4.75% | |||
Fixed 4.75% to Floating Rate Notes, Due 2030 | Minimum | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs | $ 600 | $ 42 | $ 42 | |
Fixed 4.75% to Floating Rate Notes, Due 2030 | Federal Home Loan Bank of New York | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 4.58% |
REGULATORY CAPITAL (Narrative)
REGULATORY CAPITAL (Narrative) (Details) - Minimum | Sep. 30, 2022 |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |
Common equity Tier 1 capital to risk-weighted assets minimum ratio | 4.50% |
Minimum ratio of Tier 1 capital to risk-weighted assets | 0.060 |
Total Capital to risk-weighted assets | 0.080 |
Tier 1 leverage ratio | 0.040 |
REGULATORY CAPITAL (Schedule of
REGULATORY CAPITAL (Schedule of Regulatory Capital Amounts and Ratios) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Regulatory Assets | ||
Common equity | $ 179,154 | $ 208,133 |
Goodwill | (10,835) | (10,835) |
Core deposit intangible (net of deferred tax liability) | (537) | (766) |
AOCI losses | 43,906 | 1,952 |
Common Equity Tier 1 Capital | 211,688 | 198,484 |
TRUPs | 12,000 | 12,000 |
Tier 1 Capital | 223,688 | 210,484 |
Allowable reserve for credit losses and other Tier 2 adjustments | 22,295 | 18,468 |
Subordinated notes | 19,552 | 19,510 |
Tier 2 Capital | 265,535 | 248,462 |
Risk-Weighted Assets ("RWA") | 1,856,827 | 1,665,296 |
Average Assets ("AA") | $ 2,340,703 | $ 2,281,210 |
Common Tier 1 Capital to RWA, Regulatory Min. Ratio + CCB | 7% | |
Tier 1 Capital to RWA, Regulatory Min. Ratio + CCB | 8.50% | |
Tier 2 Capital to RWA, Regulatory Min. Ratio + CCB | 10.50% | |
Common Tier 1 Capital to RWA | 11.40% | 11.92% |
Tier 1 Capital to RWA | 0.1205 | 0.1264 |
Tier 2 Capital to RWA | 14.30% | 14.92% |
Tier 1 Capital to AA (Leverage) | 0.0956 | 0.0923 |
PCA well capitalized (as a percent) | 0.0500 | |
Bank | ||
Regulatory Assets | ||
Common equity | $ 207,146 | $ 236,561 |
Goodwill | (10,835) | (10,835) |
Core deposit intangible (net of deferred tax liability) | (537) | (766) |
AOCI losses | 43,906 | 1,952 |
Common Equity Tier 1 Capital | 239,680 | 226,912 |
Tier 1 Capital | 239,680 | 226,912 |
Allowable reserve for credit losses and other Tier 2 adjustments | 22,295 | 18,468 |
Tier 2 Capital | 261,975 | 245,380 |
Risk-Weighted Assets ("RWA") | 1,855,483 | 1,663,831 |
Average Assets ("AA") | $ 2,338,751 | $ 2,279,835 |
Common Tier 1 Capital to RWA | 12.92% | 13.64% |
Tier 1 Capital to RWA | 0.1292 | 0.1364 |
Tier 2 Capital to RWA | 14.12% | 14.75% |
Tier 1 Capital to AA (Leverage) | 0.1025 | 0.0995 |
FAIR VALUE MEASUREMENTS (Fair V
FAIR VALUE MEASUREMENTS (Fair Value, Assets Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | $ 464,502 | $ 497,839 |
Equity securities carried at fair value through income | 4,254 | 4,772 |
Interest Rate Lock Commitments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate lock commitments | 28 | |
U.S. Agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 12,226 | 14,304 |
Residential CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 9,103 | 221 |
Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 78,864 | 92,841 |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 2,609 | |
U.S. government obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 33,558 | 16,860 |
CRA investment fund | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities carried at fair value through income | 4,254 | 4,772 |
Other equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities carried at fair value through income | 207 | 207 |
Interest Rate Lock Commitments | Interest Rate Lock Commitments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate lock commitments | 28 | |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 464,502 | 497,839 |
Fair Value, Measurements, Recurring | MBS | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 114,736 | 119,916 |
Fair Value, Measurements, Recurring | CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 164,867 | 197,123 |
Fair Value, Measurements, Recurring | U.S. Agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 12,226 | 14,304 |
Fair Value, Measurements, Recurring | Residential CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 9,103 | 221 |
Fair Value, Measurements, Recurring | Student Loan Trust ABSs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 48,539 | 56,574 |
Fair Value, Measurements, Recurring | Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 78,864 | 92,841 |
Fair Value, Measurements, Recurring | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 2,609 | |
Fair Value, Measurements, Recurring | U.S. government obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 33,558 | 16,860 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | 0 |
Level 1 | Interest Rate Lock Commitments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate lock commitments | 0 | |
Level 1 | CRA investment fund | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities carried at fair value through income | 0 | 0 |
Level 1 | Other equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities carried at fair value through income | 0 | 0 |
Level 1 | Interest Rate Lock Commitments | Interest Rate Lock Commitments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate lock commitments | 0 | |
Level 1 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | MBS | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | U.S. Agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | Residential CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | Student Loan Trust ABSs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | |
Level 1 | Fair Value, Measurements, Recurring | U.S. government obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 464,502 | 497,839 |
Level 2 | Interest Rate Lock Commitments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate lock commitments | 0 | |
Level 2 | CRA investment fund | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities carried at fair value through income | 4,254 | 4,772 |
Level 2 | Other equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities carried at fair value through income | 207 | 207 |
Level 2 | Interest Rate Lock Commitments | Interest Rate Lock Commitments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate lock commitments | 0 | |
Level 2 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 464,502 | 497,839 |
Level 2 | Fair Value, Measurements, Recurring | MBS | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 114,736 | 119,916 |
Level 2 | Fair Value, Measurements, Recurring | CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 164,867 | 197,123 |
Level 2 | Fair Value, Measurements, Recurring | U.S. Agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 12,226 | 14,304 |
Level 2 | Fair Value, Measurements, Recurring | Residential CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 9,103 | 221 |
Level 2 | Fair Value, Measurements, Recurring | Student Loan Trust ABSs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 48,539 | 56,574 |
Level 2 | Fair Value, Measurements, Recurring | Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 78,864 | 92,841 |
Level 2 | Fair Value, Measurements, Recurring | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 2,609 | |
Level 2 | Fair Value, Measurements, Recurring | U.S. government obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 33,558 | 16,860 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | 0 |
Level 3 | Interest Rate Lock Commitments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate lock commitments | 28 | |
Level 3 | CRA investment fund | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities carried at fair value through income | 0 | 0 |
Level 3 | Other equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities carried at fair value through income | 0 | 0 |
Level 3 | Interest Rate Lock Commitments | Interest Rate Lock Commitments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate lock commitments | 28 | |
Level 3 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | 0 |
Level 3 | Fair Value, Measurements, Recurring | MBS | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | 0 |
Level 3 | Fair Value, Measurements, Recurring | CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | 0 |
Level 3 | Fair Value, Measurements, Recurring | U.S. Agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | 0 |
Level 3 | Fair Value, Measurements, Recurring | Residential CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | 0 |
Level 3 | Fair Value, Measurements, Recurring | Student Loan Trust ABSs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | 0 |
Level 3 | Fair Value, Measurements, Recurring | Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | 0 |
Level 3 | Fair Value, Measurements, Recurring | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | 0 | |
Level 3 | Fair Value, Measurements, Recurring | U.S. government obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale ("AFS"), at fair value | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS (Narrat
FAIR VALUE MEASUREMENTS (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Loans with impairment, unpaid principal | $ 0.1 | $ 0.3 |
FAIR VALUE MEASUREMENTS (Unobse
FAIR VALUE MEASUREMENTS (Unobservable Inputs Used in Level 3 Fair Value Measurements) (Details) - Level 3 - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Individually assessed loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value disclosure of assets | $ 0 | |
Interest Rate Lock Commitments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value disclosure of assets | $ 28 | |
Minimum | Individually assessed loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of inputs discount rate | 0% | |
Minimum | Interest Rate Lock Commitments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of inputs discount rate | 0% | |
Maximum | Individually assessed loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of inputs discount rate | 50% | |
Maximum | Interest Rate Lock Commitments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of inputs discount rate | 100% | |
Weighted Average | Individually assessed loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of inputs discount rate | 100% | |
Weighted Average | Interest Rate Lock Commitments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of inputs discount rate | 75% |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Fair Value, by Balance Sheet Grouping) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Estimated Fair Value | $ 464,502 | $ 497,839 |
Equity securities carried at fair value through income | 4,254 | 4,772 |
Non-marketable equity securities in other financial institutions | 207 | 207 |
FHLB Stock | 1,226 | 1,472 |
Net loans receivable | 1,654,640 | 1,578,032 |
Accrued interest receivable | 6,791 | 5,588 |
Investment in BOLI | 39,583 | 38,932 |
Liabilities | ||
Savings, NOW and money market accounts | 1,834,158 | 1,728,743 |
Time deposits | 292,034 | 328,083 |
Long-term debt | 12,391 | |
TRUPs | 10,159 | 11,589 |
Subordinated notes | 18,610 | 20,979 |
Interest Rate Lock Commitments | ||
Assets | ||
Mortgage ranking derivatives | 28 | |
Carrying Amount | ||
Assets | ||
Estimated Fair Value | 464,502 | 497,839 |
Equity securities carried at fair value through income | 4,254 | 4,772 |
Non-marketable equity securities in other financial institutions | 207 | 207 |
FHLB Stock | 1,226 | 1,472 |
Net loans receivable | 1,722,461 | 1,586,791 |
Accrued interest receivable | 6,791 | 5,588 |
Investment in BOLI | 39,583 | 38,932 |
Liabilities | ||
Savings, NOW and money market accounts | 1,834,158 | 1,728,743 |
Time deposits | 292,399 | 327,421 |
Long-term debt | 12,231 | |
TRUPs | 12,000 | 12,000 |
Subordinated notes | 19,552 | 19,510 |
Carrying Amount | Interest Rate Lock Commitments | ||
Assets | ||
Mortgage ranking derivatives | 28 | |
Level 1 | ||
Assets | ||
Estimated Fair Value | 0 | 0 |
Equity securities carried at fair value through income | 0 | 0 |
Non-marketable equity securities in other financial institutions | 0 | 0 |
FHLB Stock | 0 | 0 |
Net loans receivable | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Investment in BOLI | 0 | 0 |
Liabilities | ||
Savings, NOW and money market accounts | 0 | 0 |
Time deposits | 0 | 0 |
Long-term debt | 0 | |
TRUPs | 0 | 0 |
Subordinated notes | 0 | 0 |
Level 1 | Interest Rate Lock Commitments | ||
Assets | ||
Mortgage ranking derivatives | 0 | |
Level 2 | ||
Assets | ||
Estimated Fair Value | 464,502 | 497,839 |
Equity securities carried at fair value through income | 4,254 | 4,772 |
Non-marketable equity securities in other financial institutions | 207 | 207 |
FHLB Stock | 1,226 | 1,472 |
Net loans receivable | 0 | 0 |
Accrued interest receivable | 6,791 | 5,588 |
Investment in BOLI | 39,583 | 38,932 |
Liabilities | ||
Savings, NOW and money market accounts | 1,834,158 | 1,728,743 |
Time deposits | 292,034 | 328,083 |
Long-term debt | 12,391 | |
TRUPs | 10,159 | 11,589 |
Subordinated notes | 18,610 | 20,979 |
Level 2 | Interest Rate Lock Commitments | ||
Assets | ||
Mortgage ranking derivatives | 0 | |
Level 3 | ||
Assets | ||
Estimated Fair Value | 0 | 0 |
Equity securities carried at fair value through income | 0 | 0 |
Non-marketable equity securities in other financial institutions | 0 | 0 |
FHLB Stock | 0 | 0 |
Net loans receivable | 1,654,640 | 1,578,032 |
Accrued interest receivable | 0 | 0 |
Investment in BOLI | 0 | 0 |
Liabilities | ||
Savings, NOW and money market accounts | 0 | 0 |
Time deposits | 0 | 0 |
Long-term debt | 0 | |
TRUPs | 0 | 0 |
Subordinated notes | $ 0 | 0 |
Level 3 | Interest Rate Lock Commitments | ||
Assets | ||
Mortgage ranking derivatives | $ 28 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Investments, All Other Investments [Abstract] | ||
Loans commitments outstanding | $ 59.1 | $ 64.4 |
Letters of credit outstanding, amount | 23 | 22 |
Line of credit facility, remaining borrowing capacity | $ 261.1 | $ 241.7 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME/LOSS ("AOCI"/"AOCL") (Schedule of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | $ 184,871 | $ 203,962 | $ 208,133 | $ 198,013 |
Ending Balance | 179,154 | 204,128 | 179,154 | 204,128 |
Net Unrealized Gains And Losses | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (31,847) | 3,063 | (1,952) | 4,504 |
Other comprehensive losses, net of tax before reclassifications | (12,059) | (3,072) | (41,954) | (4,946) |
Amounts reclassified from accumulated other comprehensive gain | 0 | 0 | 0 | 433 |
Net other comprehensive losses | (12,059) | (3,072) | (41,954) | (4,513) |
Ending Balance | $ (43,906) | $ (9) | $ (43,906) | $ (9) |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME/LOSS ("AOCI"/"AOCL") (Narrative) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2021 USD ($) | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Gain on sale of AFS securities | $ 0.6 |
EARNINGS PER SHARE ("EPS") (Nar
EARNINGS PER SHARE ("EPS") (Narrative) (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Shares excluded from diluted net income per share (in shares) | 1,034 | 40 | 587 | 3,355 |
EARNINGS PER SHARE (_EPS_) (Sch
EARNINGS PER SHARE (“EPS”) (Schedule of Earnings Per Share, Basic and Diluted) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Net Income | $ 7,580 | $ 6,404 | $ 20,702 | $ 19,135 |
Average number of common shares outstanding (in shares) | 5,636,640 | 5,709,814 | 5,656,950 | 5,813,704 |
Dilutive effect of common stock equivalents (in shares) | 8,182 | 10,187 | 9,000 | 9,514 |
Average number of shares used to calculate diluted EPS (in shares) | 5,644,822 | 5,720,001 | 5,665,950 | 5,823,218 |
Anti-dilutive shares (in shares) | 1,034 | 40 | 587 | 3,355 |
Earnings per common share, basic (in dollars per share) | $ 1.34 | $ 1.12 | $ 3.66 | $ 3.29 |
Earnings per common share, diluted (in dollars per share) | $ 1.34 | $ 1.12 | $ 3.65 | $ 3.29 |
INCOME TAXES (Schedule of Curre
INCOME TAXES (Schedule of Current and Deferred Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Current | ||||
Current income tax expense | $ 2,572 | $ 1,448 | $ 7,119 | $ 6,048 |
Deferred | ||||
Deferred income tax (benefit) expense | (192) | 710 | (237) | 427 |
Income tax expense as reported | $ 2,380 | $ 2,158 | $ 6,882 | $ 6,475 |
Effective tax rate | 23.90% | 25.20% | 24.90% | 25.30% |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Income Tax Contingency [Line Items] | |||||
Net deferred tax assets | $ 24.8 | $ 24.8 | $ 9 | ||
Valuation allowance for deferred tax assets | $ 0 | $ 0 | |||
Effective tax rate | 23.90% | 25.20% | 24.90% | 25.30% | |
Minimum | |||||
Income Tax Contingency [Line Items] | |||||
Effective tax rate | 25% | ||||
Maximum | |||||
Income Tax Contingency [Line Items] | |||||
Effective tax rate | 26.06% |