Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Jul. 31, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-39036 | |
Entity Registrant Name | ALERUS FINANCIAL CORPORATION | |
Entity Incorporation, State | DE | |
Entity Tax Identification Number | 45-0375407 | |
Entity Address, Address Line One | 401 Demers Avenue | |
Entity Address, City or Town | Grand Forks | |
Entity Address, State or Province | ND | |
Entity Address, Postal Zip Code | 58201 | |
City Area Code | 701 | |
Local Phone Number | 795-3200 | |
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Trading Symbol | ALRS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 19,987,017 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0000903419 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 37,043 | $ 242,311 |
Available-for-sale, at fair value | 798,797 | 853,649 |
Held-to-maturity, at carrying value | 331,741 | 352,061 |
Loans held for sale | 54,363 | 46,490 |
Loans | 1,890,243 | 1,758,020 |
Allowance for loan losses | (31,373) | (31,572) |
Net loans | 1,858,870 | 1,726,448 |
Land, premises and equipment, net | 17,180 | 18,370 |
Operating lease right-of-use assets | 3,439 | 3,727 |
Accrued interest receivable | 9,155 | 8,537 |
Bank-owned life insurance | 33,564 | 33,156 |
Goodwill | 31,337 | 31,490 |
Other intangible assets | 17,511 | 20,250 |
Servicing rights | 2,064 | 1,880 |
Deferred income taxes, net | 32,814 | 11,614 |
Other assets | 67,187 | 42,708 |
Total assets | 3,295,065 | 3,392,691 |
Deposits | ||
Noninterest-bearing | 764,808 | 938,840 |
Interest-bearing | 1,854,742 | 1,981,711 |
Total deposits | 2,619,550 | 2,920,551 |
Short-term borrowings | 242,350 | |
Long-term debt | 58,870 | 58,933 |
Operating lease liabilities | 3,856 | 4,275 |
Accrued expenses and other liabilities | 63,281 | 49,529 |
Total liabilities | 2,987,907 | 3,033,288 |
Stockholders' equity | ||
Preferred stock, $1 par value, 2,000,000 shares authorized: 0 issued and outstanding | ||
Common stock, $1 par value, 30,000,000 shares authorized: 17,306,237 and 17,212,588 issued and outstanding | 17,306 | 17,213 |
Additional paid-in capital | 93,129 | 92,878 |
Retained earnings | 267,128 | 253,567 |
Accumulated other comprehensive income (loss) | (70,405) | (4,255) |
Total stockholders' equity | 307,158 | 359,403 |
Total liabilities and stockholders' equity | $ 3,295,065 | $ 3,392,691 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Consolidated Balance Sheets | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred Stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 17,306,237 | 17,212,588 |
Common stock, shares outstanding | 17,306,237 | 17,212,588 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Interest Income | ||||
Loans, including fees | $ 17,988 | $ 19,324 | $ 35,280 | $ 39,891 |
Taxable | 6,068 | 2,897 | 11,508 | 5,298 |
Exempt from federal income taxes | 213 | 233 | 429 | 469 |
Other | 157 | 130 | 273 | 247 |
Total interest income | 24,426 | 22,584 | 47,490 | 45,905 |
Interest Expense | ||||
Deposits | 813 | 906 | 1,642 | 1,901 |
Short-term borrowings | 278 | 278 | ||
Long-term debt | 559 | 538 | 1,121 | 826 |
Total interest expense | 1,650 | 1,444 | 3,041 | 2,727 |
Net interest income | 22,776 | 21,140 | 44,449 | 43,178 |
Net interest income after provision for loan losses | 22,776 | 21,140 | 44,449 | 43,178 |
Noninterest Income | ||||
Mortgage banking | 6,038 | 12,287 | 10,969 | 29,419 |
Net gains (losses) on investment securities | 114 | |||
Other | 935 | 1,122 | 2,139 | 2,178 |
Total noninterest income | 29,226 | 36,748 | 58,696 | 77,629 |
Noninterest Expense | ||||
Compensation | 21,248 | 24,309 | 40,299 | 48,007 |
Employee taxes and benefits | 5,787 | 5,572 | 11,949 | 11,385 |
Occupancy and equipment expense | 1,737 | 1,918 | 3,788 | 4,149 |
Business services, software and technology expense | 4,785 | 4,958 | 9,709 | 9,934 |
Intangible amortization expense | 1,053 | 1,088 | 2,106 | 2,239 |
Professional fees and assessments | 2,246 | 1,509 | 3,787 | 2,981 |
Marketing and business development | 814 | 769 | 1,414 | 1,445 |
Supplies and postage | 572 | 503 | 1,218 | 1,034 |
Travel | 356 | 36 | 535 | 62 |
Mortgage and lending expenses | 482 | 1,199 | 1,168 | 2,531 |
Other | 904 | 689 | 2,082 | 1,825 |
Total noninterest expense | 39,984 | 42,550 | 78,055 | 85,592 |
Income before income taxes | 12,018 | 15,338 | 25,090 | 35,215 |
Income tax expense | 2,725 | 3,644 | 5,613 | 8,306 |
Net income | $ 9,293 | $ 11,694 | $ 19,477 | $ 26,909 |
Per Common Share Data | ||||
Basic earnings per common share | $ 0.53 | $ 0.67 | $ 1.11 | $ 1.54 |
Diluted earnings per common share | 0.52 | 0.66 | 1.10 | 1.52 |
Dividends declared per common share | $ 0.18 | $ 0.16 | $ 0.34 | $ 0.31 |
Average common shares outstanding | 17,297 | 17,194 | 17,271 | 17,170 |
Diluted average common shares outstanding | 17,532 | 17,497 | 17,517 | 17,482 |
Retirement and Benefit Services | ||||
Noninterest Income | ||||
Revenue | $ 16,293 | $ 17,871 | $ 33,939 | $ 35,126 |
Wealth Management | ||||
Noninterest Income | ||||
Revenue | 5,548 | 5,138 | 10,874 | 10,124 |
Deposit Account | ||||
Noninterest Income | ||||
Revenue | $ 412 | $ 330 | $ 775 | $ 668 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Consolidated Statements of Comprehensive Income (Unaudited) | ||||
Net Income | $ 9,293 | $ 11,694 | $ 19,477 | $ 26,909 |
Other Comprehensive Income (Loss), Net of Tax | ||||
Unrealized gains (losses) on available-for-sale securities | (37,394) | 7,430 | (88,119) | (10,606) |
Accretion of (gains) losses on debt securities reclassified to held-to-maturity | (97) | (115) | (199) | (115) |
Reclassification adjustment for losses (gains) realized in income | (114) | |||
Total other comprehensive income (loss), before tax | (37,491) | 7,315 | (88,318) | (10,835) |
Income tax expense (benefit) related to items of other comprehensive income | (9,410) | 1,836 | (22,168) | (2,720) |
Other comprehensive income (loss), net of tax | (28,081) | 5,479 | (66,150) | (8,115) |
Total comprehensive income (loss) | $ (18,788) | $ 17,173 | $ (46,673) | $ 18,794 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders Equity (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid in Capital. | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Beginning balance at Dec. 31, 2020 | $ 17,125 | $ 90,237 | $ 212,163 | $ 10,638 | $ 330,163 |
Net income | 26,909 | 26,909 | |||
Other comprehensive income (loss) | (8,115) | (8,115) | |||
Common stock repurchased | (16) | (134) | (296) | (446) | |
Common stock dividends | (5,379) | (5,379) | |||
Share-based compensation expense | 8 | 1,251 | 1,259 | ||
Vesting of restricted stock | 81 | (81) | |||
Ending balance at Jun. 30, 2021 | 17,198 | 91,273 | 233,397 | 2,523 | 344,391 |
Beginning balance at Mar. 31, 2021 | 17,190 | 90,520 | 224,480 | (2,956) | 329,234 |
Net income | 11,694 | 11,694 | |||
Other comprehensive income (loss) | 5,479 | 5,479 | |||
Common stock dividends | (2,777) | (2,777) | |||
Share-based compensation expense | 8 | 753 | 761 | ||
Ending balance at Jun. 30, 2021 | 17,198 | 91,273 | 233,397 | 2,523 | 344,391 |
Beginning balance at Dec. 31, 2021 | 17,213 | 92,878 | 253,567 | (4,255) | 359,403 |
Net income | 19,477 | 19,477 | |||
Other comprehensive income (loss) | (66,150) | (66,150) | |||
Common stock repurchased | (24) | (673) | (697) | ||
Common stock dividends | (5,916) | (5,916) | |||
Share-based compensation expense | 10 | 1,031 | 1,041 | ||
Vesting of restricted stock | 107 | (107) | |||
Ending balance at Jun. 30, 2022 | 17,306 | 93,129 | 267,128 | (70,405) | 307,158 |
Beginning balance at Mar. 31, 2022 | 17,289 | 92,573 | 260,967 | (42,324) | 328,505 |
Net income | 9,293 | 9,293 | |||
Other comprehensive income (loss) | (28,081) | (28,081) | |||
Common stock repurchased | (4) | (86) | (90) | ||
Common stock dividends | (3,132) | (3,132) | |||
Share-based compensation expense | 10 | 653 | 663 | ||
Vesting of restricted stock | 11 | (11) | |||
Ending balance at Jun. 30, 2022 | $ 17,306 | $ 93,129 | $ 267,128 | $ (70,405) | $ 307,158 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating Activities | ||
Net income | $ 19,477 | $ 26,909 |
Adjustments to reconcile net income to net cash provided (used) by operating activities | ||
Deferred income taxes | 968 | 606 |
Depreciation and amortization | 3,999 | 4,555 |
Amortization and accretion of premiums/discounts on investment securities | 1,829 | 1,674 |
Amortization of operating lease right-of-use assets | (51) | (22) |
Stock-based compensation | 1,041 | 1,259 |
Increase in value of bank-owned life insurance | (408) | (389) |
Realized loss (gain) on sale of fixed assets | (62) | |
Realized loss (gain) on derivative instruments | (215) | 4,803 |
Realized loss (gain) on loans sold | (6,037) | (27,206) |
Realized loss (gain) on sale of foreclosed assets | (11) | (204) |
Realized loss (gain) on sale of investment securities | (114) | |
Realized loss (gain) on servicing rights | (441) | (361) |
Net change in: | ||
Loans held for sale | (1,922) | 82,713 |
Accrued interest receivable | (618) | 1,199 |
Other assets | (19,936) | (5,632) |
Accrued expenses and other liabilities | 9,924 | (5,404) |
Net cash provided (used) by operating activities | 7,599 | 84,324 |
Investing Activities | ||
Proceeds from sales or calls of investment securities available-for-sale | 13,189 | |
Proceeds from maturities of investment securities available-for-sale | 61,313 | 57,661 |
Purchases of investment securities available-for-sale | (95,600) | (291,361) |
Proceeds from sales or calls of investment securities held-to-maturity | 726 | 1,415 |
Proceeds from maturities of investment securities held-to-maturity | 18,588 | 1,180 |
Net (increase) decrease in loans | (132,503) | 142,510 |
Purchases of premises and equipment | (471) | (429) |
Proceeds from sales of foreclosed assets | 117 | 481 |
Net cash provided (used) by investing activities | (147,830) | (75,354) |
Financing Activities | ||
Net increase (decrease) in deposits | (301,001) | 138,947 |
Net increase (decrease) in short-term borrowings | 242,350 | |
Repayments of long-term debt | (119) | (49,804) |
Proceeds from the issuance of subordinated debt | 50,000 | |
Cash dividends paid on common stock | (5,570) | (5,199) |
Repurchase of common stock | (697) | (446) |
Net cash provided (used) by financing activities | (65,037) | 133,498 |
Net change in cash and cash equivalents | (205,268) | 142,468 |
Cash and cash equivalents at beginning of period | 242,311 | 172,962 |
Cash and cash equivalents at end of period | 37,043 | 315,430 |
Cash paid for: | ||
Interest | 3,913 | 2,521 |
Income taxes | 4,677 | 9,072 |
Non-cash information | ||
Loan collateral transferred to foreclosed assets | 81 | 1,072 |
Unrealized gain (loss) on investment securities available-for-sale | (65,951) | (8,000) |
Accretion of unrealized (gain) loss on investment securities held-to-maturity | $ (199) | (115) |
Investment securities transferred to held-to-maturity | $ 149,191 |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Significant Accounting Policies | |
Significant Accounting Policies | NOTE 1 Significant Accounting Policies Organization Alerus Financial Corporation, or the Company, is a financial holding company organized under the laws of the state of Delaware. The Company and its subsidiaries operate as a diversified financial services company headquartered in Grand Forks, North Dakota. Through its subsidiary, Alerus Financial, National Association, or the Bank, the Company provides financial solutions to businesses and consumers through four distinct business lines—banking, retirement and benefit services, wealth management, and mortgage. Basis of Presentation The accompanying unaudited consolidated financial statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC, and conform to practices within the banking industry and include all of the information and disclosures required by generally accepted accounting principles in the United States of America, or GAAP, for interim financial reporting. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of financial results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results for the full year or any other period. The Company has also evaluated all subsequent events for potential recognition and disclosure through the date of the filing of this Quarterly Report on Form 10-Q. These interim unaudited financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 11, 2022. Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. The Company’s principal operating subsidiary is the Bank. In the normal course of business, the Company may enter into a transaction with a variable interest entity, or VIE. VIE’s are legal entities whose investors lack the ability to make decisions about the entity’s activities, or whose equity investors do not have the right to receive the residual returns of the entity. The applicable accounting guidance requires the Company to perform ongoing quantitative and qualitative analysis to determine whether it must consolidate any VIE. The Company does not have any ownership interest in, or exert any control, over any VIE, and thus no VIE’s are included in the consolidated financial statements. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the valuation of investment securities, determination of the allowance for loan losses, valuation of reporting units for the purpose of testing goodwill and other intangible assets for impairment, valuation of deferred tax assets, and fair values of financial instruments. Reclassifications Certain items previously reported have been reclassified to conform to the current period’s reporting format. Such reclassifications did not affect net income or stockholders’ equity. Other Information As of June 30, 2022, the Coronavirus Disease, or COVID-19, pandemic was ongoing. During 2020, the COVID-19 pandemic created disruption in global supply chains, increased rates of unemployment and adversely impacted many industries, including industries related to the collateral underlying certain of our loans, and many of these effects are continuing. Beginning in 2021 and continuing into 2022, the U.S. economy, with certain setbacks, started reopening and wider distribution of vaccines encouraged greater economic activity. Nonetheless, the economic recovery could remain uneven, particularly given uncertainty with respect to the continued distribution and acceptance of the vaccines and their effectiveness with respect to new variants of the virus. Management believes the Company is taking appropriate actions to mitigate, to the extent possible, the negative impact. However, the full, long-term impact of COVID-19 is currently unknown and cannot be reasonably estimated as the events are continuing to unfold. Emerging Growth Company The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In addition, even if the Company complies with the greater obligations of public companies that are not emerging growth companies, the Company may avail itself of the reduced requirements applicable to emerging growth companies from time to time in the future, so long as the Company is an emerging growth company. The Company will continue to be an emerging growth company until the earliest to occur of: (1) the end of the fiscal year following the fifth anniversary of the date of the first sale of common equity securities under the Company’s Registration Statement on Form S-1, which was declared effective by the SEC on September 12, 2019; (2) the last day of the fiscal year in which the Company has $1.07 billion or more in annual revenues; (3) the date on which the Company is deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the Exchange Act; or (4) the date on which the Company has, during the previous three-year period, issued publicly or privately, more than $1.0 billion in non-convertible debt securities. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 for complying with new or revised accounting standards. As an emerging growth company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company elected to take advantage of the benefits of this extended transition period. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2022 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | NOTE 2 Recent Accounting Pronouncements The following FASB Accounting Standards Updates, or ASUs, are divided into pronouncements which have been adopted by the Company since January 1, 2022, and those which are not yet effective and have been evaluated or are currently being evaluated by management as of June 30, 2022. Adopted Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), which simplifies accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for the areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2020, for public business entities. For private companies and smaller reporting companies, this guidance is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2021. The Company adopted ASU 2019-12, as of January 2022. The new guidance did not have an impact on the Company’s consolidated financial statements. Pronouncements Not Yet Effective In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU requires a new impairment model known as the current expected credit loss, or CECL, which significantly changes the way impairment of financial instruments is recognized by requiring immediate recognition of estimated credit losses expected to occur over the remaining life of financial instruments. The main provisions of ASU 2016-13 include (1) replacing the “incurred cost” approach under GAAP with an “expected loss” model for instruments measured at amortized cost, (2) requiring entities to record an allowance for credit losses related to available-for-sale debt securities rather than a direct write-down of the carrying amount of the investments, as is required by the other-than-temporary impairment model under current GAAP, and (3) a simplified accounting model for purchase credit-impaired debt securities and loans. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments – Credit Losses (Topic 326). This update amends the effective date of ASU No. 2016-13 for certain entities, including private companies and smaller reporting companies, until fiscal years beginning after December 15, 2022, including interim periods within those fiscal periods. Early adoption is permitted. As an emerging growth company, the Company can take advantage of this delay and plans to adopt the standard with the amended effective date. The Company does not plan to early adopt this standard but continues to work on its implementation. The Company continues collecting and retaining loan and credit data and evaluating various loss estimation models. While we currently cannot reasonably estimate the impact of adopting this standard, we expect the impact will be influenced by the composition, characteristics, and quality of our loan portfolio, as well as the general economic conditions and forecasts as of the adoption date. In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures to provide resources to monitor and assist stakeholders with the implementation of Topic 326. Post-Implementation Review (PIR) activities have included forming a Credit Losses Transition Resource group conducting outreach with stakeholders of all types, developing educational materials and staff question-and-answer guidance, conducting education workshops and performing an archival review of financial reports. As we move forward with the implementation of this standard, we are reviewing these resources for additional guidance. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which affects a variety of topics in the Codification and applies to all reporting entities within the scope of the affected accounting guidance. The Company will consider these clarifications and improvements in determining the appropriate adoption of ASU 2019-04. In May 2019, the FASB issued ASU 2019-05, Targeted Transition Relief, to provide entities with an option to irrevocably elect the fair value option applied on an instrument-by-instrument basis for eligible instruments. In November 2019, the FASB Issued ASU 2019-10, which amends the effective date of this ASU for certain entities, including private companies and smaller reporting companies, until after December 15, 2022, including interim periods within those fiscal years. As an emerging growth company, the Company can take advantage of this delay and plans to adopt the standard with the amended effective date. This update is not expected to have a significant impact on the Company’s consolidated financial statements In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments. This ASU represents changes to clarify or improve the Accounting Standards Codification, or ASC, related to seven topics. The amendments make the ASC easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. Issues 1, 2, 3, 4, and 5 are conforming amendments and for public business entities effective upon the issuance of the standard. Issues 6 and 7 are amendments that affect the guidance in ASU 2016-13. The Company will consider these clarifications and improvements in determining the appropriate adoption of ASU 2016-13. |
Investment Securities
Investment Securities | 6 Months Ended |
Jun. 30, 2022 | |
Investment Securities | |
Investment Securities | NOTE 3 Investment Securities The following tables present amortized cost, gross unrealized gain and losses, and fair value of the available-for-sale investment securities and the amortized cost, net unrealized gains, carrying value, gross unrealized gains and losses and fair value of for held-to-maturity as of June 30, 2022 and December 31, 2021: June 30, 2022 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value Available-for-sale U.S. Treasury and agencies $ 3,643 $ 66 $ — $ 3,709 Mortgage backed securities Residential agency 740,734 27 (88,254) 652,507 Commercial 80,077 — (3,947) 76,130 Asset backed securities 40 — — 40 Corporate bonds 69,031 130 (2,750) 66,411 Total available-for-sale investment securities 893,525 223 (94,951) 798,797 Held-to-maturity Obligations of state and political agencies 139,102 2 (12,927) 126,177 Mortgage backed securities Residential agency 192,639 — (24,867) 167,772 Total held-to-maturity investment securities 331,741 2 (37,794) 293,949 Total investment securities $ 1,225,266 $ 225 $ (132,745) $ 1,092,746 December 31, 2021 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value Available-for-sale U.S. Treasury and agencies $ 5,028 $ 75 $ — $ 5,103 Mortgage backed securities Residential agency 717,781 1,213 (11,837) 707,157 Commercial 88,362 2,674 (123) 90,913 Asset backed securities 52 2 — 54 Corporate bonds 49,035 1,398 (11) 50,422 Total available-for-sale investment securities 860,258 5,362 (11,971) 853,649 Held-to-maturity Obligations of state and political agencies 144,543 1,110 (349) 145,304 Mortgage backed securities Residential agency 207,518 — (3,145) 204,373 Total held-to-maturity investment securities 352,061 1,110 (3,494) 349,677 Total investment securities $ 1,212,319 $ 6,472 $ (15,465) $ 1,203,326 Gross unrealized losses on investment securities and the fair value of the related securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2022 and December 31, 2021, were as follows: June 30, 2022 Less than 12 Months Over 12 Months Total Unrealized Fair Unrealized Fair Unrealized Fair (dollars in thousands) Losses Value Losses Value Losses Value Available-for-sale U.S. Treasury and agencies $ — $ — $ — $ — $ — $ — Mortgage backed securities Residential agency (51,859) 436,234 (36,395) 214,079 (88,254) 650,313 Commercial (3,947) 76,130 — — (3,947) 76,130 Asset backed securities — — — 2 — 2 Corporate bonds (2,750) 56,780 — — (2,750) 56,780 Total available-for-sale investment securities (58,556) 569,144 (36,395) 214,081 (94,951) 783,225 Held-to-maturity Obligations of state and political agencies (12,927) 122,734 — — (12,927) 122,734 Mortgage backed securities Residential agency (24,867) 167,772 — — (24,867) 167,772 Total held-to-maturity investment securities (37,794) 290,506 — — (37,794) 290,506 Total investment securities $ (96,350) $ 859,650 $ (36,395) $ 214,081 $ (132,745) $ 1,073,731 December 31, 2021 Less than 12 Months Over 12 Months Total Unrealized Fair Unrealized Fair Unrealized Fair (dollars in thousands) Losses Value Losses Value Losses Value Available-for-sale U.S. Treasury and agencies $ — $ — $ — $ — $ — $ — Mortgage backed securities Residential agency (10,156) 554,811 (1,681) 55,082 (11,837) 609,893 Commercial (123) 17,470 — — (123) 17,470 Asset backed securities — — — 2 — 2 Corporate bonds (11) 5,989 — — (11) 5,989 Total available-for-sale investment securities (10,290) 578,270 (1,681) 55,084 (11,971) 633,354 Held-to-maturity Obligations of state and political agencies (349) 53,210 — — (349) 53,210 Mortgage backed securities Residential agency (3,145) 204,373 — — (3,145) 204,373 Total held-to-maturity investment securities (3,494) 257,583 — — (3,494) 257,583 Total investment securities $ (13,784) $ 835,853 $ (1,681) $ 55,084 $ (15,465) $ 890,937 For all of the above investment securities, the unrealized losses were generally due to changes in interest rates, and unrealized losses were considered to be temporary as the fair value is expected to recover as the securities approach their maturity dates. The Company expects that it could see a continued increase in unrealized losses if the Federal Reserve continues to raise interest rates. The Company evaluates securities for other-than-temporary impairment, or OTTI, on a quarterly basis, at a minimum, and more frequently when economic or market concerns warrant such evaluation. In estimating OTTI losses, consideration is given to the severity and duration of the impairment; the financial condition and near-term prospects of the issuer, which for debt securities, considers external credit ratings and recent downgrades; and the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value. For the three and six months ended June 30, 2022 and 2021, the Company did not recognize OTTI losses on its investment securities. The following table presents amortized cost and fair value of available-for-sale and carrying value and fair value of held-to-maturity investment securities as of June 30, 2022, by contractual maturity: Held-to-maturity Available-for-sale Carrying Fair Amortized Fair (dollars in thousands) Value Value Cost Value Due within one year or less $ 6,831 $ 6,794 $ 20 $ 21 Due after one year through five years 36,025 33,922 21,599 21,017 Due after five years through ten years 72,720 65,003 94,957 91,522 Due after 10 years 216,165 188,230 776,949 686,237 Total investment securities $ 331,741 $ 293,949 $ 893,525 $ 798,797 Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Investment securities with a total carrying value of $267.3 million and $192.8 million were pledged as of June 30, 2022 and December 31, 2021, respectively, to secure public deposits and for other purposes required or permitted by law. Proceeds from the sale or call of available-for-sale investment securities, for the three and six months ended June 30, 2022 and 2021, are displayed in the table below: Three months ended Six months ended June 30, June 30, (dollars in thousands) 2022 2021 2022 2021 Proceeds $ — $ — $ — $ 13,189 Realized gains — — — 114 Realized losses — — — — Proceeds from the call of held-to-maturity investment securities, for the three and six months ended June 30, 2022 and 2021, are displayed in the table below: Three months ended Six months ended June 30, June 30, (dollars in thousands) 2022 2021 2022 2021 Proceeds $ 211 $ — $ 726 $ 1,415 Realized gains — — — — Realized losses — — — — As of June 30, 2022 and December 31, 2021, the carrying value of the Company’s Federal Reserve stock and Federal Home Loan Bank of Des Moines, or FHLB, stock was as follows: June 30, December 31, (dollars in thousands) 2022 2021 Federal Reserve $ 2,675 $ 2,675 FHLB 13,938 3,806 These securities can only be redeemed or sold at their par value and only to the respective issuing institution or to another member institution. The Company records these non-marketable equity securities as a component of other assets and periodically evaluates these securities for impairment. Management considers these non-marketable equity securities to be long-term investments. Accordingly, when evaluating these securities for impairment, management considers the ultimate recoverability of the par value rather than recognizing temporary declines in value. Visa Class B Restricted Shares In 2008, the Company received Visa Class B restricted shares as part of Visa’s initial public offering. These shares are transferable only under limited circumstances until they can be converted into the publicly traded Class A common shares. This conversion will not occur until the settlement of certain litigation which will be indemnified by Visa members, including the Company. Visa funded an escrow account from its initial public offering to settle these litigation claims. Should this escrow account be insufficient to cover these litigation claims, Visa is entitled to fund additional amounts to the escrow account by reducing each member bank’s Class B conversion ratio to unrestricted Class A shares. As of June 30, 2022, the conversion ratio was 1.6059. Based on the existing transfer restriction and the uncertainty of the outcome of the Visa litigation mentioned above, the 6,924 Class B shares (11,119 Class A equivalents) that the Company owned as of June 30, 2022 and December 31, 2021, were carried at a zero cost basis. |
Loans and Allowance for Loan Lo
Loans and Allowance for Loan Losses | 6 Months Ended |
Jun. 30, 2022 | |
Loans and Allowance for Loan Losses | |
Loans and Allowance for Loan Losses | NOTE 4 Loans and Allowance for Loan Losses The following table presents total loans outstanding, by portfolio segment, as of June 30, 2022 and December 31, 2021: June 30, December 31, (dollars in thousands) 2022 2021 Commercial Commercial and industrial (1) $ 484,426 $ 436,761 Real estate construction 48,870 40,619 Commercial real estate 599,737 598,893 Total commercial 1,133,033 1,076,273 Consumer Residential real estate first mortgage 568,571 510,716 Residential real estate junior lien 135,255 125,668 Other revolving and installment 53,384 45,363 Total consumer 757,210 681,747 Total loans $ 1,890,243 $ 1,758,020 (1) Included Paycheck Protection Program, or PPP, loans of $6.9 million at June 30, 2022 and $33.6 million at December 31, 2021. Total loans included net deferred loan fees and costs of $928 thousand and $231 thousand at June 30, 2022 and December 31, 2021, respectively. Deferred loan fees on PPP loans were $106 thousand at June 30, 2022 and $881 thousand at December 31, 2021. Management monitors the credit quality of its loan portfolio on an ongoing basis. Measurements of delinquency and past due status are based on the contractual terms of each loan. Past due loans are reviewed regularly to identify loans for nonaccrual status. Loan modifications made in accordance with the Interagency Statement on Loan Modifications and Reporting for Financial Institutions, as issued on April 7, 2020, are included as accruing current. The following tables present a past due aging analysis of total loans outstanding, by portfolio segment, as of June 30, 2022 and December 31, 2021: June 30, 2022 90 Days Accruing 30 - 89 Days or More Total (dollars in thousands) Current Past Due Past Due Nonaccrual Loans Commercial Commercial and industrial $ 482,743 $ 82 $ — $ 1,601 $ 484,426 Real estate construction 48,833 37 — — 48,870 Commercial real estate 599,108 — — 629 599,737 Total commercial 1,130,684 119 — 2,230 1,133,033 Consumer Residential real estate first mortgage 565,443 1,255 — 1,873 568,571 Residential real estate junior lien 134,636 426 — 193 135,255 Other revolving and installment 53,123 187 — 74 53,384 Total consumer 753,202 1,868 — 2,140 757,210 Total loans $ 1,883,886 $ 1,987 $ — $ 4,370 $ 1,890,243 December 31, 2021 90 Days Accruing 30 - 89 Days or More Total (dollars in thousands) Current Past Due Past Due Nonaccrual Loans Commercial Commercial and industrial $ 435,135 $ 168 $ 121 $ 1,337 $ 436,761 Real estate construction 40,619 — — — 40,619 Commercial real estate 598,264 — — 629 598,893 Total commercial 1,074,018 168 121 1,966 1,076,273 Consumer Residential real estate first mortgage 508,925 1,770 — 21 510,716 Residential real estate junior lien 125,412 167 — 89 125,668 Other revolving and installment 45,242 121 — — 45,363 Total consumer 679,579 2,058 — 110 681,747 Total loans $ 1,753,597 $ 2,226 $ 121 $ 2,076 $ 1,758,020 The Company’s consumer loan portfolio is primarily comprised of secured loans that are evaluated at origination on a centralized basis against standardized underwriting criteria. The Company generally does not risk rate consumer loans unless a default event such as bankruptcy or extended nonperformance takes place. Credit quality for the consumer loan portfolio is measured by delinquency rates, nonaccrual amounts and actual losses incurred. The Company assigns a risk rating to all commercial loans, except pools of homogeneous loans, and periodically performs detailed internal and external reviews of risk rated loans over a certain threshold to identify credit risks and to assess the overall collectability of the portfolio. These risk ratings are also subject to examination by the Company’s regulators. During the internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which the borrowers operate and the estimated fair values of collateral securing the loans. These credit quality indicators are used to assign a risk rating to each individual loan. The Company’s ratings are aligned to pass and criticized categories. The criticized category includes special mention, substandard, and doubtful risk ratings. The risk ratings are defined as follows: Pass: Special Mention: Substandard: Doubtful: Loss: The tables below present total loans outstanding, by loan portfolio segment, and risk category as of June 30, 2022 and December 31, 2021: June 30, 2022 Criticized Special (dollars in thousands) Pass Mention Substandard Doubtful Total Commercial Commercial and industrial $ 479,586 $ 1,204 $ 3,636 $ — $ 484,426 Real estate construction 48,870 — — — 48,870 Commercial real estate 589,552 4,689 5,496 — 599,737 Total commercial 1,118,008 5,893 9,132 — 1,133,033 Consumer Residential real estate first mortgage 566,368 65 2,138 — 568,571 Residential real estate junior lien 134,537 — 718 — 135,255 Other revolving and installment 53,310 — 74 — 53,384 Total consumer 754,215 65 2,930 — 757,210 Total loans $ 1,872,223 $ 5,958 $ 12,062 $ — $ 1,890,243 December 31, 2021 Criticized Special (dollars in thousands) Pass Mention Substandard Doubtful Total Commercial Commercial and industrial $ 430,235 $ 480 $ 6,046 $ — $ 436,761 Real estate construction 40,619 — — — 40,619 Commercial real estate 585,291 — 13,602 — 598,893 Total commercial 1,056,145 480 19,648 — 1,076,273 Consumer Residential real estate first mortgage 510,375 — 341 — 510,716 Residential real estate junior lien 124,898 — 770 — 125,668 Other revolving and installment 45,363 — — — 45,363 Total consumer 680,636 — 1,111 — 681,747 Total loans $ 1,736,781 $ 480 $ 20,759 $ — $ 1,758,020 The adequacy of the allowance for loan losses is assessed at the end of each quarter. The allowance for loan losses includes a specific component related to loans that are individually evaluated for impairment and a general component related to loans that are segregated into homogeneous pools and collectively evaluated for impairment. The factors applied to these pools are an estimate of probable incurred losses based on management’s evaluation of historical net losses from loans with similar characteristics, which are adjusted by management to reflect current events, trends, and conditions. The adjustments include consideration of the following: changes in lending policies and procedures, economic conditions, nature and volume of the portfolio, experience of lending management, volume and severity of past due loans, quality of the loan review system, value of underlying collateral for collateral dependent loans, concentrations, and other external factors. The following tables present, by loan portfolio segment, a summary of the changes in the allowance for loan losses for the three and six months ended June 30, 2022 and 2021: Three months ended June 30, 2022 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 9,795 $ 1,085 $ (637) $ 90 $ 10,333 Real estate construction 810 68 — — 878 Commercial real estate 11,946 (1,123) — 11 10,834 Total commercial 22,551 30 (637) 101 22,045 Consumer Residential real estate first mortgage 6,661 (486) — — 6,175 Residential real estate junior lien 1,400 (134) — 201 1,467 Other revolving and installment 644 (5) (37) 32 634 Total consumer 8,705 (625) (37) 233 8,276 Unallocated 457 595 — — 1,052 Total $ 31,713 $ — $ (674) $ 334 $ 31,373 Six months ended June 30, 2022 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 8,925 $ 1,856 $ (664) $ 216 $ 10,333 Real estate construction 783 95 — — 878 Commercial real estate 12,376 (1,564) — 22 10,834 Total commercial 22,084 387 (664) 238 22,045 Consumer Residential real estate first mortgage 6,532 (357) — — 6,175 Residential real estate junior lien 1,295 (42) — 214 1,467 Other revolving and installment 481 140 (55) 68 634 Total consumer 8,308 (259) (55) 282 8,276 Unallocated 1,180 (128) — — 1,052 Total $ 31,572 $ — $ (719) $ 520 $ 31,373 Three months ended June 30, 2021 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 10,487 $ (869) $ (273) $ 275 $ 9,620 Real estate construction 598 (11) — — 587 Commercial real estate 13,849 (913) — 1 12,937 Total commercial 24,934 (1,793) (273) 276 23,144 Consumer Residential real estate first mortgage 6,047 129 — — 6,176 Residential real estate junior lien 1,288 99 — 14 1,401 Other revolving and installment 666 (81) (49) 38 574 Total consumer 8,001 147 (49) 52 8,151 Unallocated 823 1,646 — — 2,469 Total $ 33,758 $ — $ (322) $ 328 $ 33,764 Six months ended June 30, 2021 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 10,205 $ (553) $ (477) $ 445 $ 9,620 Real estate construction 658 (71) — — 587 Commercial real estate 14,105 (636) (536) 4 12,937 Total commercial 24,968 (1,260) (1,013) 449 23,144 Consumer Residential real estate first mortgage 5,774 402 — — 6,176 Residential real estate junior lien 1,373 (69) — 97 1,401 Other revolving and installment 753 (164) (93) 78 574 Total consumer 7,900 169 (93) 175 8,151 Unallocated 1,378 1,091 — — 2,469 Total $ 34,246 $ — $ (1,106) $ 624 $ 33,764 The following tables present the recorded investment in loans and related allowance for loan losses, by loan portfolio segment, disaggregated on the basis of the Company’s impairment methodology, as of June 30, 2022 and December 31, 2021: June 30, 2022 Recorded Investment Allowance for Loan Losses Individually Collectively Individually Collectively (dollars in thousands) Evaluated Evaluated Total Evaluated Evaluated Total Commercial Commercial and industrial $ 1,769 $ 482,657 $ 484,426 $ 828 $ 9,505 $ 10,333 Real estate construction — 48,870 48,870 — 878 878 Commercial real estate 803 598,934 599,737 3 10,831 10,834 Total commercial 2,572 1,130,461 1,133,033 831 21,214 22,045 Consumer Residential real estate first mortgage 1,873 566,698 568,571 — 6,175 6,175 Residential real estate junior lien 193 135,062 135,255 — 1,467 1,467 Other revolving and installment 74 53,310 53,384 27 607 634 Total consumer 2,140 755,070 757,210 27 8,249 8,276 Unallocated — — — — — 1,052 Total loans $ 4,712 $ 1,885,531 $ 1,890,243 $ 858 $ 29,463 $ 31,373 December 31, 2021 Recorded Investment Allowance for Loan Losses Individually Collectively Individually Collectively (dollars in thousands) Evaluated Evaluated Total Evaluated Evaluated Total Commercial Commercial and industrial $ 1,831 $ 434,930 $ 436,761 $ 278 $ 8,647 $ 8,925 Real estate construction — 40,619 40,619 — 783 783 Commercial real estate 809 598,084 598,893 5 12,371 12,376 Total commercial 2,640 1,073,633 1,076,273 283 21,801 22,084 Consumer Residential real estate first mortgage 21 510,695 510,716 — 6,532 6,532 Residential real estate junior lien 91 125,577 125,668 — 1,295 1,295 Other revolving and installment — 45,363 45,363 — 481 481 Total consumer 112 681,635 681,747 — 8,308 8,308 Unallocated — — — — — 1,180 Total loans $ 2,752 $ 1,755,268 $ 1,758,020 $ 283 $ 30,109 $ 31,572 The tables below summarize key information on impaired loans. These impaired loans may have estimated losses which are included in the allowance for loan losses. June 30, 2022 December 31, 2021 Recorded Unpaid Related Recorded Unpaid Related (dollars in thousands) Investment Principal Allowance Investment Principal Allowance Impaired loans with a valuation allowance Commercial and industrial $ 1,008 $ 1,036 $ 828 $ 445 $ 464 $ 278 Commercial real estate 174 195 3 180 203 5 Residential real estate junior lien — — — — — — Other revolving and installment 74 74 27 — — — Total impaired loans with a valuation allowance 1,256 1,305 858 625 667 283 Impaired loans without a valuation allowance Commercial and industrial 761 873 — 1,386 1,575 — Commercial real estate 629 684 — 629 684 — Residential real estate first mortgage 1,873 1,910 — 21 24 — Residential real estate junior lien 193 226 — 91 120 — Other revolving and installment — — — — — — Total impaired loans without a valuation allowance 3,456 3,693 — 2,127 2,403 — Total impaired loans Commercial and industrial 1,769 1,909 828 1,831 2,039 278 Commercial real estate 803 879 3 809 887 5 Residential real estate first mortgage 1,873 1,910 — 21 24 — Residential real estate junior lien 193 226 — 91 120 — Other revolving and installment 74 74 27 — — — Total impaired loans $ 4,712 $ 4,998 $ 858 $ 2,752 $ 3,070 $ 283 The table below presents the average recorded investment in impaired loans and interest income for the three and six months ended June 30, 2022 and 2021: Three months ended June 30, 2022 2021 Average Average Recorded Interest Recorded Interest (dollars in thousands) Investment Income Investment Income Impaired loans with a valuation allowance Commercial and industrial $ 1,018 $ 2 $ 1,548 $ 3 Commercial real estate 176 2 188 2 Residential real estate first mortgage — — — — Residential real estate junior lien — — 27 — Other revolving and installment 75 — 13 — Total impaired loans with a valuation allowance 1,269 4 1,776 5 Impaired loans without a valuation allowance Commercial and industrial 761 — 1,174 5 Commercial real estate 629 — 4,472 — Residential real estate first mortgage 1,962 — 23 — Residential real estate junior lien 196 — 302 — Other revolving and installment — — — — Total impaired loans without a valuation allowance 3,548 — 5,971 5 Total impaired loans Commercial and industrial 1,779 2 2,722 8 Commercial real estate 805 2 4,660 2 Residential real estate first mortgage 1,962 — 23 — Residential real estate junior lien 196 — 329 — Other revolving and installment 75 — 13 — Total impaired loans $ 4,817 $ 4 $ 7,747 $ 10 Six Months Ended June 30, 2022 2021 Average Average Recorded Interest Recorded Interest (dollars in thousands) Investment Income Investment Income Impaired loans with a valuation allowance Commercial and industrial $ 1,156 $ 6 $ 1,637 $ 6 Commercial real estate 177 3 190 4 Residential real estate junior lien — — 30 — Other revolving and installment 157 — 14 — Total impaired loans with a valuation allowance 1,490 9 1,871 10 Impaired loans without a valuation allowance Commercial and industrial 761 — 1,187 11 Commercial real estate 629 — 4,662 — Residential real estate first mortgage 1,953 — 24 — Residential real estate junior lien 198 — 303 — Other revolving and installment — — — — Total impaired loans without a valuation allowance 3,541 — 6,176 11 Total impaired loans Commercial and industrial 1,917 6 2,824 17 Commercial real estate 806 3 4,852 4 Residential real estate first mortgage 1,953 — 24 — Residential real estate junior lien 198 — 333 — Other revolving and installment 157 — 14 — Total impaired loans $ 5,031 $ 9 $ 8,047 $ 21 Loans with a carrying value of $1.3 billion as of June 30, 2022 and $1.2 billion as of December 31, 2021, were pledged to secure public deposits, and for other purposes required or permitted by law. Under certain circumstances, the Company will provide borrowers relief through loan restructurings. A restructuring of debt constitutes a troubled debt restructuring, or TDR, if the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. TDR concessions can include a reduction of interest rates, an extension of maturity dates, forgiveness of principal or interest due, or acceptance of other assets in full or partial satisfaction of the debt. During the second quarter of 2022, there were no loans modified as a TDR. During the second quarter of 2021, there were 3 loans modified as TDRs as a result of changing the terms allowing for the interest rate reductions and an extension of the maturity dates. As of June 30, 2021, the carrying value of the restructured loans was $795 thousand. The loans are not currently performing in compliance with the modified terms and were placed on nonaccrual. There was no specific reserve for loan losses allocated to the loans modified as TDRs. The Company does not have material commitments to lend additional funds to borrowers with loans whose terms have been modified in TDRs or whose loans are on nonaccrual |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | NOTE 5 Goodwill and Other Intangible Assets The following table summarizes the carrying amount of goodwill, by segment, as of June 30, 2022 and December 31, 2021: June 30, December 31, (dollars in thousands) 2022 2021 Banking $ 20,131 $ 20,131 Retirement and benefit services 11,206 11,359 Total goodwill $ 31,337 $ 31,490 Goodwill is evaluated for impairment on an annual basis, at a minimum, and more frequently when the economic environment warrants. The Company determined that there was no goodwill impairment as of June 30, 2022. The gross carrying amount and accumulated amortization for each type of identifiable intangible asset are as follows: June 30, 2022 December 31, 2021 (dollars in thousands) Gross Carrying Amount Accumulated Amortization Total Gross Carrying Amount Accumulated Amortization Total Identifiable customer intangibles $ 41,423 $ (23,912) $ 17,511 $ 42,057 $ (21,807) $ 20,250 Total intangible assets $ 41,423 $ (23,912) $ 17,511 $ 42,057 $ (21,807) $ 20,250 Amortization of intangible assets was $1.0 million and $1.1 million for the three months ended June 30, 2022, and 2021, respectively. Amortization of intangible assets was $2.1 million and $2.2 million for the six months ended June 30, 2022, and 2021, respectively. |
Loan Servicing
Loan Servicing | 6 Months Ended |
Jun. 30, 2022 | |
Loan Servicing | |
Loan Servicing | NOTE 6 Loan Servicing Loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of loans serviced for others totaled $317.7 million and $345.8 million as of June 30, 2022 and December 31, 2021, respectively. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and collection and foreclosure processing. Loan servicing income is recorded on an accrual basis and includes servicing fees from investors and certain charges collected from borrowers, such as late payment fees, and is net of fair value adjustments to capitalized mortgage servicing rights. The following table summarizes the Company’s activity related to servicing rights for the three and six months ended June 30, 2022 and 2021: Three months ended Six months ended June 30, June 30, (dollars in thousands) 2022 2021 2022 2021 Balance, beginning of period $ 1,771 $ 1,952 $ 1,880 $ 1,987 Additions 13 62 17 111 Amortization (96) (185) (256) (385) (Impairment)/Recovery 376 135 423 251 Balance, end of period $ 2,064 $ 1,964 $ 2,064 $ 1,964 The following is a summary of key data and assumptions used in the valuation of servicing rights as of June 30, 2022 and December 31, 2021. Increases or decreases in any one of these assumptions would result in lower or higher fair value measurements: June 30, December 31, (dollars in thousands) 2022 2021 Fair value of servicing rights $ 2,064 $ 1,880 Weighted-average remaining term, years 20.6 20.3 Prepayment speeds 7.1 % 14.2 % Discount rate 10.0 % 9.5 % |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases | |
Leases | NOTE 7 Leases Substantially all of the leases in which the Company is the lessee are comprised of real estate property for offices and office equipment rentals with terms extending through 2027. Portions of certain properties are subleased for terms extending through 2024. Substantially all of the Company’s leases are classified as operating leases. The Company has one existing finance lease for the Company’s headquarters building with a lease term through October 31, 2022. The Company elected not to include short-term leases (i.e., leases with initial terms of twelve months or less), or equipment leases (deemed immaterial) on the consolidated financial statements. The following table presents the classification of the Company’s right-of-use, or ROU, assets and lease liabilities on the consolidated financial statements: June 30, December 31, (dollars in thousands) 2022 2021 Lease Right-of-Use Assets Classification Operating lease right-of-use assets Operating lease right-of-use assets $ 3,439 $ 3,727 Finance lease right-of-use assets Land, premises and equipment, net 29 87 Total lease right-of-use assets $ 3,468 $ 3,814 Lease Liabilities Operating lease liabilities Operating lease liabilities $ 3,856 $ 4,275 Finance lease liabilities Long-term debt 83 203 Total lease liabilities $ 3,939 $ 4,478 The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. For the Company’s only finance lease, the Company utilized its incremental borrowing rate at lease inception. June 30, December 31, 2022 2021 Weighted-average remaining lease term, years Operating leases 4.3 3.4 Finance leases 0.3 0.8 Weighted-average discount rate Operating leases 2.8 % 2.5 % Finance leases 7.8 % 7.8 % As the Company elected, for all classes of underlying assets, not to separate lease and non-lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as common area maintenance and utilities. Variable lease cost also includes payments for usage or maintenance of those capitalized equipment operating leases. The following table presents lease costs and other lease information for the three and six months ending June 30, 2022 and 2021: Three months ended Six months ended June 30, June 30, (dollars in thousands) 2022 2021 2022 2021 Lease costs Operating lease cost $ 414 $ 492 $ 825 $ 988 Variable lease cost 150 158 363 391 Short-term lease cost 43 46 88 83 Finance lease cost Interest on lease liabilities 1 7 5 15 Amortization of right-of-use assets 29 29 58 58 Sublease income (59) (52) (116) (112) Net lease cost $ 578 $ 680 $ 1,223 $ 1,423 Other information Cash paid for amounts included in the measurement of lease liabilities operating cash flows from operating leases $ 393 $ 474 $ 784 $ 961 Right-of-use assets obtained in exchange for new operating lease liabilities — — $ — $ — Future minimum payments for finance and operating leases with initial or remaining terms of one year or more as of June 30, 2022 were as follows: Finance Operating (dollars in thousands) Leases Leases Twelve months ended June 30, 2023 $ 84 $ 1,644 June 30, 2024 — 932 June 30, 2025 — 467 June 30, 2026 — 375 June 30, 2027 — 252 Thereafter — 511 Total future minimum lease payments $ 84 $ 4,181 Amounts representing interest (1) (325) Total operating lease liabilities $ 83 $ 3,856 |
Deposits
Deposits | 6 Months Ended |
Jun. 30, 2022 | |
Deposits. | |
Deposits | NOTE 8 Deposits The components of deposits in the consolidated balance sheets as of June 30, 2022 and December 31, 2021 were as follows: June 30, December 31, (dollars in thousands) 2022 2021 Noninterest-bearing $ 764,808 $ 938,840 Interest-bearing Interest-bearing demand 642,641 714,669 Savings accounts 97,227 96,825 Money market savings 914,423 937,305 Time deposits 200,451 232,912 Total interest-bearing 1,854,742 1,981,711 Total deposits $ 2,619,550 $ 2,920,551 |
Short-Term Borrowings
Short-Term Borrowings | 6 Months Ended |
Jun. 30, 2022 | |
Short-Term Borrowings | |
Short-Term Borrowings | NOTE 9 Short-Term Borrowings Short-term borrowings at June 30, 2022 and December 31, 2021 consisted of the following: June 30, December 31, (dollars in thousands) 2022 2021 Fed funds purchased $ 117,350 $ — FHLB Short-term advances 125,000 — Total $ 242,350 $ — The following table presents information related to short-term borrowings for the three and six months ending June 30, 2022 and 2021: Three months ended June 30, (dollars in thousands) 2022 2021 Fed funds purchased Balance as of end of period $ 117,350 $ — Average daily balance 81,506 — Maximum month-end balance 117,350 — Weighted-average rate During period 1.18 % — % End of period 1.44 % — % FHLB Short-term advances Balance as of end of period $ 125,000 $ — Average daily balance 9,615 — Maximum month-end balance 125,000 — Weighted-average rate During period 1.59 % — % End of period 1.80 % — % Six months ended June 30, (dollars in thousands) 2022 2021 Fed funds purchased Balance as of end of period $ 117,350 $ — Average daily balance 40,978 — Maximum month-end balance 117,350 — Weighted-average rate During period 1.18 % — % End of period 1.44 % — % FHLB Short-term advances Balance as of end of period $ 125,000 $ — Average daily balance 4,834 — Maximum month-end balance 125,000 — Weighted-average rate During period 1.59 % — % End of period 1.80 % — % |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2022 | |
Long-Term Debt. | |
Long-Term Debt | NOTE 10 Long-Term Debt Long-term debt as of June 30, 2022 and December 31, 2021 consisted of the following: June 30, 2022 Period End Face Carrying Interest Maturity (dollars in thousands) Value Value Interest Rate Rate Date Call Date Subordinated notes payable $ 50,000 $ 50,000 Fixed 3.50 % 3/30/2031 3/31/2026 Junior subordinated debenture (Trust I) 4,124 3,515 Three-month LIBOR + 3.10% 5.30 % 6/26/2033 6/26/2008 Junior subordinated debenture (Trust II) 6,186 5,272 Three-month LIBOR + 1.80% 3.63 % 9/15/2036 9/15/2011 Finance lease liability 2,700 83 Fixed 7.81 % 10/31/2022 N/A Total long-term debt $ 63,010 $ 58,870 December 31, 2021 Period End Face Carrying Interest Maturity (dollars in thousands) Value Value Interest Rate Rate Date Call Date Subordinated notes payable $ 50,000 $ 50,000 Fixed 3.50 % 3/30/2031 3/31/2026 Junior subordinated debenture (Trust I) 4,124 3,492 Three-month LIBOR + 3.10% 3.32 % 6/26/2033 6/26/2008 Junior subordinated debenture (Trust II) 6,186 5,238 Three-month LIBOR + 1.80% 2.00 % 9/15/2036 9/15/2011 Finance lease liability 2,700 203 Fixed 7.81 % 10/31/2022 N/A Total long-term debt $ 63,010 $ 58,933 |
Financial Instruments with Off-
Financial Instruments with Off-Balance Sheet Risk | 6 Months Ended |
Jun. 30, 2022 | |
Financial Instruments with Off-Balance Sheet Risk | |
Financial Instruments with Off-Balance Sheet Risk | NOTE 11 Financial Instruments with Off-Balance Sheet Risk In the normal course of business, the Bank has outstanding commitment and contingent liabilities, such as commitments to extend credit and standby letters of credit, which are not included in the accompanying consolidated financial statements. The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. The Bank uses the same credit policies in making such commitments as it does for instruments that are included in the statements of financial condition. A summary of the contractual amounts of the Company’s exposure to off-balance sheet risk as of June 30, 2022 and December 31, 2021, respectively, was as follows: June 30, December 31, (dollars in thousands) 2022 2021 Commitments to extend credit $ 635,320 $ 668,115 Standby letters of credit 11,412 10,529 Total $ 646,732 $ 678,644 Commitments to extend credit are agreements to lend to a client as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each client’s creditworthiness on a case by case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation. Collateral held varies but may include accounts receivable, inventory, property and equipment, and income producing commercial properties. The Company was not required to perform on any financial guarantees and did not incur any losses on its commitments during the past two years. The Company utilizes standby letters of credit issued by either the FHLB or the Bank of North Dakota to secure public unit deposits. The Company had a $150 thousand letter of credit outstanding with the FHLB as of June 30, 2022 and December 31, 2021. With the Bank of North Dakota, the Company had no letters of credit outstanding as of June 30, 2022 and December 31, 2021. Bank of North Dakota potential letters of credit were collateralized by loans pledged to the Bank of North Dakota in the amount of $237.6 million and $229.7 million as of June 30, 2022 and December 31, 2021, respectively. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Compensation | |
Share-Based Compensation | NOTE 12 Share-Based Compensation On May 6, 2019, the Company’s stockholders approved the Alerus Financial Corporation 2019 Equity Incentive Plan. This plan gives the compensation committee the ability to grant a wide variety of equity awards, including stock options, stock appreciation rights, restricted stock, restricted stock units and cash incentive awards in such forms and amounts as it deems appropriate to accomplish the goals of the plan. Any shares subject to an award that is cancelled, forfeited, or expires prior to exercise or realization, either in full or in part, shall again become available for issuance under the plan. However, shares subject to an award shall not again be made available for issuance or delivery under the plan if such shares are (a) tendered in payment of the exercise price of a stock option, (b) delivered to, or withheld by, the Company to satisfy any tax withholding obligation, or (c) covered by a stock-settled stock appreciation right or other awards and were not issued upon the settlement of the award. Shares vest, become exercisable and contain such other terms and conditions as determined by the compensation committee and set forth in individual agreements with the participant receiving the award. The plan authorizes the issuance of up to 1,100,000 shares of common stock. As of June 30, 2022, 948,428 shares of common stock are still available for issuance under the plan. The compensation expense relating to awards under these plans was $662 thousand and $761 thousand for the three months ended June 30, 2022 and 2021, respectively. The compensation expense relating to awards under these plans was $1.0 million and $1.3 million for the six months ended June 30, 2022 and 2021, respectively. The following table presents the activity in the stock plans for the six months ended June 30, 2022 and 2021: Six months ended June 30, 2022 2021 Weighted- Weighted- Average Grant Average Grant Awards Date Fair Value Awards Date Fair Value Restricted Stock and Restricted Stock Unit Awards Outstanding at beginning of period 260,850 $ 21.04 325,030 $ 19.48 Granted 94,592 19.01 66,664 26.63 Vested (107,113) 19.19 (88,382) 21.38 Forfeited or cancelled (10,624) 23.71 — — Outstanding at end of period 237,705 $ 20.95 303,312 $ 20.49 As of June 30, 2022, there was $3.1 million of unrecognized compensation expense related to non-vested awards granted under the plans. The expense is expected to be recognized over a weighted-average period of 2.9 years. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Taxes | |
Income Taxes | NOTE 13 Income Taxes The components of income tax expense (benefit) for the three and six months ended June 30, 2022 and 2021 were as follows: Three months ended June 30, 2022 2021 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 2,524 21.0 % $ 3,221 21.0 % Tax effect of: Tax exempt income (122) (1.0) % (148) (1.0) % State income taxes, net of federal benefits 531 4.4 % 663 4.3 % Nondeductible items and other (208) (1.7) % (92) (0.6) % Applicable income taxes $ 2,725 22.7 % $ 3,644 23.7 % Six months ended June 30, 2022 2021 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 5,269 21.0 % $ 7,395 21.0 % Tax effect of: Tax exempt income (239) (1.0) % (301) (0.9) % State income taxes, net of federal benefits 1,109 4.4 % 1,516 4.3 % Nondeductible items and other (526) (2.1) % (304) (0.9) % Applicable income taxes $ 5,613 22.3 % $ 8,306 23.5 % It is the opinion of management that the Company has no significant uncertain tax positions that would be subject to change upon examination. |
Tax Credit Investments
Tax Credit Investments | 6 Months Ended |
Jun. 30, 2022 | |
Tax Credit Investments. | |
Tax Credit Investments | NOTE 14 Tax Credit Investments The Company invests in qualified affordable housing projects for the purpose of community reinvestment and obtaining tax credits. The Company’s tax credit investments are limited to existing lending relationships with well-known developers and projects within the Company’s market area. The following table presents a summary of the Company’s investments in qualified affordable housing project tax credits as of June 30, 2022 and December 31, 2021: June 30, 2022 December 31, 2021 (dollars in thousands) Investment Unfunded Commitment Investment Unfunded Commitment Investment Accounting Method Low income housing tax credit Proportional amortization $ 17,906 $ 16,402 $ 7,906 $ 6,999 Total $ 17,906 $ 16,402 $ 7,906 $ 6,999 The following table presents a summary of the amortization expense and tax benefit recognized for the Company’s qualified affordable housing projects for the three and six months ended June 30, 2022 and 2021. Three months ended June 30, 2022 2021 Amortization Tax Benefit Amortization Tax Benefit (dollars in thousands) Expense (1) Recognized (2) Expense (1) Recognized (2) Low income housing tax credit $ 111 $ (156) $ — $ — Total $ 111 $ (156) $ — $ — (1) The amortization expense for low income housing tax credit investments were included in income tax expense. (2) All of the tax benefits recognized were included in income tax expense. Six months ended June 30, 2022 2021 Amortization Tax Benefit Amortization Tax Benefit (dollars in thousands) Expense (1) Recognized (2) Expense (1) Recognized (2) Low income housing tax credit $ 111 $ (156) $ — $ — Total $ 111 $ (156) $ — $ — (1) The amortization expense for low income housing tax credits were included in income tax expense. (2) All of the tax benefits recognized were included in income tax expense. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting | |
Segment Reporting | NOTE 15 Segment Reporting The Company determines reportable segments based on the services offered, the significance of the services offered, the significance of those services to the Company’s financial statements, and management’s regular review of the operating results of those services. The Company operates through four operating segments: Banking, Retirement and Benefit Services, Wealth Management, and Mortgage. The financial information presented for each segment includes net interest income, provision for loan losses, direct noninterest income, and direct noninterest expense, before indirect allocations. Corporate Administration includes the indirect overhead and is set forth in the table below. The segment net income before taxes represents direct revenue and expense before indirect allocations and income taxes. The following table presents key metrics related to the Company’s segments for the periods presented: Three months ended June 30, 2022 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 22,779 $ — $ — $ 558 $ (561) $ 22,776 Provision for loan losses — — — — — — Noninterest income 1,341 16,293 5,548 6,038 6 29,226 Noninterest expense 15,619 6,598 1,630 5,209 10,928 39,984 Net income before taxes $ 8,501 $ 9,695 $ 3,918 $ 1,387 $ (11,483) $ 12,018 Six months ended June 30, 2022 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 44,304 $ — $ — $ 1,267 $ (1,122) $ 44,449 Provision for loan losses — — — — — — Noninterest income 2,879 33,939 10,874 10,969 35 58,696 Noninterest expense 28,313 15,030 3,468 10,229 21,015 78,055 Net income before taxes $ 18,870 $ 18,909 $ 7,406 $ 2,007 $ (22,102) $ 25,090 Three months ended June 30, 2021 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 21,188 $ — $ — $ 490 $ (538) $ 21,140 Provision for loan losses — — — — — — Noninterest income 1,466 17,871 5,138 12,287 (14) 36,748 Noninterest expense 10,914 9,988 2,128 10,661 8,859 42,550 Net income before taxes $ 11,740 $ 7,883 $ 3,010 $ 2,116 $ (9,411) $ 15,338 Six months ended June 30, 2021 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 43,068 $ — $ — $ 936 $ (826) $ 43,178 Provision for loan losses — — — — — — Noninterest income 2,988 35,126 10,124 29,419 (28) 77,629 Noninterest expense 21,998 20,100 4,463 21,514 17,517 85,592 Net income before taxes $ 24,058 $ 15,026 $ 5,661 $ 8,841 $ (18,371) $ 35,215 Banking The Banking division offers a complete line of loan, deposit, cash management, and treasury services through fourteen offices in North Dakota, Minnesota, and Arizona. These products and services are supported through web and mobile based applications. The majority of the Company’s assets and liabilities are in the Banking segment’s balance sheet. Retirement and Benefit Services Retirement and Benefit Services provides the following services nationally: recordkeeping and administration services to qualified retirement plans; ESOP trustee, recordkeeping, and administration; investment fiduciary services to retirement plans; health savings accounts, flex spending accounts, COBRA recordkeeping and administration services, and payroll to employers; and payroll and HRIS services for employers. In addition, the division operates within each of the banking markets, as well as in Lansing, Michigan and Littleton, Colorado. Wealth Management The Wealth Management division provides advisory and planning services, investment management, and trust and fiduciary services to clients across the Company’s footprint. Mortgage The Mortgage division offers first and second mortgage loans through a centralized mortgage unit in Minneapolis, Minnesota, as well as through the Banking office locations. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share | |
Earnings Per Share | NOTE 16 Earnings Per Share The calculation of basic and diluted earnings per share using the two-class method for the three and six months ending June 30, 2022 and 2021 are presented below: Three months ended Six months ended June 30, June 30, (dollars and shares in thousands, except per share data) 2022 2021 2022 2021 Net income $ 9,293 $ 11,694 $ 19,477 $ 26,909 Dividends and undistributed earnings allocated to participating securities 101 179 225 432 Net income available to common shareholders $ 9,192 $ 11,515 $ 19,252 $ 26,477 Weighted-average common shares outstanding for basic earnings per share 17,297 17,194 17,271 17,170 Dilutive effect of stock-based awards 235 303 246 312 Weighted-average common shares outstanding for diluted earnings per share 17,532 17,497 17,517 17,482 Earnings per common share: Basic earnings per common share $ 0.53 $ 0.67 $ 1.11 $ 1.54 Diluted earnings per common share $ 0.52 $ 0.66 $ 1.10 $ 1.52 |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2022 | |
Derivative Instruments | |
Derivative Instruments | NOTE 17 Derivative Instruments The Company enters into interest rate swaps to facilitate client transactions and meet their financing needs. Upon entering into these instruments to meet client needs, the Company enters into offsetting positions with U.S. financial institutions in order to minimize risk to the Company. These swaps are derivatives but are not designated as hedging instruments. The Company did not have any derivatives designated as hedging instruments as of June 30, 2022 and December 31, 2021. The following table presents the amounts recorded in the Company’s consolidated balance sheets, for derivatives not designated as hedging instruments, as of June 30, 2022 and December 31, 2021: June 30, 2022 December 31, 2021 Fair Notional Fair Notional (dollars in thousands) Value Amount Value Amount Asset Derivatives Consolidated Balance Sheet Location Interest rate swaps Other assets $ 4,850 $ 44,133 $ 1,366 $ 44,826 Interest rate lock commitments Other assets 1,445 53,871 1,507 52,316 Forward loan sales commitments Other assets 542 16,560 490 13,418 TBA mortgage backed securities Other assets 343 113,000 34 97,000 Total asset derivatives $ 7,180 $ 227,564 $ 3,397 $ 207,560 Liability Derivatives Interest rate swaps Accrued expenses and other liabilities $ 4,851 $ 44,133 $ 1,368 $ 44,826 TBA mortgage backed securities Accrued expenses and other liabilities — — — — Total liability derivatives $ 4,851 $ 44,133 $ 1,368 $ 44,826 The gain (loss) recognized on derivative instruments for the three and six months ended June 30, 2022 and 2021 was as follows: Three months ended Six months ended Consolidated Statements June 30, June 30, June 30, June 30, (dollars in thousands) of Income Location 2022 2021 2022 2021 Interest rate swaps Other noninterest income $ 1 $ (1) $ 1 $ 1 Interest rate lock commitments Mortgage banking 563 740 (147) (5,505) Forward loan sales commitments Mortgage banking 542 73 52 (1,562) TBA mortgage backed securities Mortgage banking 1,246 (3,405) 3,749 5,556 Total gain/(loss) from derivative instruments $ 2,352 $ (2,593) $ 3,655 $ (1,510) The Company has third party agreements that require a minimum dollar transfer amount upon a margin call. This requirement is dependent on certain specified credit measures. The amount of collateral posted with third parties was $19 thousand at June 30, 2022 and December 31, 2021. The amount of collateral posted with third parties was deemed to be sufficient as of those dates to collateralize both the fair market value change as well as any additional amounts that may be required as a result of a change in the specified credit measures. |
Regulatory Matters
Regulatory Matters | 6 Months Ended |
Jun. 30, 2022 | |
Regulatory Matters | |
Regulatory Matters | NOTE 18 Regulatory Matters The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the following table) of common equity tier 1, tier 1, and total capital (as defined in the regulations) to risk weighted assets (as defined) and of tier 1 capital (as defined) to average assets (as defined). Management believes at June 30, 2022 and December 31, 2021, each of the Company and the Bank had met all of the capital adequacy requirements to which it was subject. The following table presents the Company’s and the Bank’s actual capital amounts and ratios as of June 30, 2022 and December 31, 2021: June 30, 2022 Minimum to be Requirements Well Capitalized for Capital Under Prompt Actual Adequacy Purposes Corrective Action (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Common equity tier 1 capital to risk weighted assets Consolidated $ 331,692 14.19 % $ 105,214 4.50 % $ N/A N/A Bank 318,704 13.64 % 105,115 4.50 % 151,833 6.50 % Tier 1 capital to risk weighted assets . Consolidated 340,479 14.56 % 140,285 6.00 % N/A N/A Bank 318,704 13.64 % 140,154 6.00 % 186,872 8.00 % Total capital to risk weighted assets Consolidated 419,279 17.95 % 187,047 8.00 % N/A N/A Bank 347,929 14.89 % 186,872 8.00 % 233,590 10.00 % Tier 1 capital to average assets Consolidated 340,479 10.80 % 126,051 4.00 % N/A N/A Bank 318,704 10.12 % 125,962 4.00 % 157,453 5.00 % December 31, 2021 Minimum to be Requirements Well Capitalized for Capital Under Prompt Actual Adequacy Purposes Corrective Action (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Common equity tier 1 capital to risk weighted assets Consolidated $ 314,628 14.65 % $ 96,647 4.50 % $ N/A N/A Bank 297,453 13.87 % 96,538 4.50 % 139,444 6.50 % Tier 1 capital to risk weighted assets . Consolidated 323,358 15.06 % 128,862 6.00 % N/A N/A Bank 297,453 13.87 % 128,718 6.00 % 171,624 8.00 % Total capital to risk weighted assets Consolidated 400,263 18.64 % 171,816 8.00 % N/A N/A Bank 324,328 15.12 % 171,624 8.00 % 214,530 10.00 % Tier 1 capital to average assets Consolidated 323,358 9.79 % 132,112 4.00 % N/A N/A Bank 297,453 9.01 % 132,039 4.00 % 165,049 5.00 % The Bank is subject to certain restrictions on the amount of dividends that it may pay without prior regulatory approval. The Company and the Bank are subject to the rules of the Basel III regulatory capital framework and related Dodd-Frank Wall Street Reform and Consumer Protection Act rules. The rules include a 2.5 percent capital conservation buffer that is added to the minimum requirements for capital adequacy purposes. A banking organization with a conservation buffer of less than the required amount will be subject to the limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers. As of June 30, 2022, the capital ratios for the Company and the Bank were sufficient to meet the conservation buffer. In addition, the Company must adhere to various U.S. Department of Housing and Urban Development, or HUD, regulatory guidelines including required minimum capital and liquidity to maintain their Federal Housing Administration approval status. Failure to comply with the HUD guidelines could result in withdrawal of this certification. As of June 30, 2022, and December 31, 2021, the Company was in compliance with the aforementioned guidelines. |
Stock Repurchase Program
Stock Repurchase Program | 6 Months Ended |
Jun. 30, 2022 | |
Stock Repurchase Program | |
Stock Repurchase Program | NOTE 19 Stock Repurchase Program On February 18, 2021, the Board of Directors of the Company approved a stock repurchase program, or the Program, which authorizes the Company to repurchase up to 770,000 shares of its common stock subject to certain limitations and conditions. The Program was effective immediately and will continue for a period of 36 months. The Program does not obligate the Company to repurchase any shares of its common stock and there is no assurance that the Company will do so. For the six months ended June 30, 2022, there were no shares repurchased under the Program. The Company also repurchases shares to pay withholding taxes on the vesting of restricted stock awards and units. |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value of Assets and Liabilities | |
Fair Value of Assets and Liabilities | NOTE 20 Fair Value of Assets and Liabilities The Company categorizes its assets and liabilities measured at estimated fair value into a three level hierarchy based on the priority of the inputs to the valuation technique used to determine estimated fair value. The estimated fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used in the determination of the estimated fair value measurement fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the estimated fair value measurement. Assets and liabilities valued at estimated fair value are categorized based on the following inputs to the valuation techniques as follows: Level 1— Level 2— Level 3— Professional standards allow entities the irrevocable option to elect to measure certain financial instruments and other items at estimated fair value for the initial and subsequent measurement on an instrument-by-instrument basis. The Company adopted the policy to value certain financial instruments at estimated fair value. The Company has not elected to measure any existing financial instruments at estimated fair value; however, it may elect to measure newly acquired financial instruments at estimated fair value in the future. Recurring Basis The Company uses estimated fair value measurements to record estimated fair value adjustments to certain assets and liabilities and to determine estimated fair value disclosures. The following tables present the balances of the assets and liabilities measured at estimated fair value on a recurring basis as of June 30, 2022 and December 31, 2021: June 30, 2022 (dollars in thousands) Level 1 Level 2 Level 3 Total Available-for-sale U.S. treasury and government agencies $ — $ 3,709 $ — $ 3,709 Mortgage backed securities Residential agency — 652,507 — 652,507 Commercial — 76,130 — 76,130 Asset backed securities — 40 — 40 Corporate bonds — 66,411 — 66,411 Total available-for-sale investment securities $ — $ 798,797 $ — $ 798,797 Other assets Derivatives $ — $ 7,180 $ — $ 7,180 Other liabilities Derivatives $ — $ 4,851 $ — $ 4,851 December 31, 2021 (dollars in thousands) Level 1 Level 2 Level 3 Total Available-for-sale U.S. treasury and government agencies $ — $ 5,103 $ — $ 5,103 Mortgage backed securities Residential agency — 707,157 — 707,157 Commercial — 90,913 — 90,913 Asset backed securities — 54 — 54 Corporate bonds — 50,422 — 50,422 Total available-for-sale investment securities $ — $ 853,649 $ — $ 853,649 Other assets Derivatives $ — $ 3,397 $ — $ 3,397 Other liabilities Derivatives $ — $ 1,368 $ — $ 1,368 The following is a description of the valuation methodologies used for instruments measured at estimated fair value on a recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy. Investment Securities, Available-for-Sale Generally, debt securities are valued using pricing for similar securities, recently executed transactions, and other pricing models utilizing observable inputs and therefore are classified as Level 2. Derivatives All of the Company’s derivatives are traded in over-the-counter markets where quoted market prices are not readily available. For these derivatives, estimated fair value is measured using internally developed models that use primarily market observable inputs, such as yield curves and option volatilities, and accordingly, classify as Level 2. Examples of Level 2 derivatives are basic interest rate swaps and forward contracts. Nonrecurring Basis Certain assets are measured at estimated fair value on a nonrecurring basis. These assets are not measured at estimated fair value on an ongoing basis; however, they are subject to estimated fair value adjustments in certain circumstances, such as when there is evidence of impairment or a change in the amount of previously recognized impairment. Net impairment related to nonrecurring estimated fair value measurements of certain assets as of June 30, 2022 and December 31, 2021 consisted of the following: June 30, 2022 (dollars in thousands) Level 2 Level 3 Total Impairment Loans held for sale $ 54,363 $ — $ 54,363 $ — Impaired loans — 3,854 3,854 858 Foreclosed assets — 860 860 — Servicing rights — 2,064 2,064 — December 31, 2021 (dollars in thousands) Level 2 Level 3 Total Impairment Loans held for sale $ 46,490 $ — $ 46,490 $ — Impaired loans — 2,469 2,469 283 Foreclosed assets — 885 885 — Servicing rights — 1,880 1,880 — Loans Held for Sale Loans originated and held for sale are carried at the lower of cost or estimated fair value. The Company obtains quotes or bids on these loans directly from purchasing financial institutions. Typically, these quotes include a premium on the sale and thus these quotes indicate estimated fair value of the held for sale loans is greater than cost. Impairment losses for loans held for sale that are carried at the lower of cost or estimated fair value, represent additional net write-downs during the period to record these loans at the lower of cost or estimated fair value, subsequent to their initial classification as loans held for sale. The valuation techniques and significant unobservable inputs used to measure Level 3 estimated fair values as of June 30, 2022, and December 31, 2021, were as follows: June 30, 2022 (dollars in thousands) Weighted Asset Type Valuation Technique Unobservable Input Fair Value Range Average Impaired loans Appraisal value Property specific adjustment $ 3,854 N/A N/A Foreclosed assets Appraisal value Property specific adjustment 860 N/A N/A Servicing rights Discounted cash flows Prepayment speed assumptions 2,064 109-155 119 Discount rate 10.0 % 10.0 % December 31, 2021 (dollars in thousands) Weighted Asset Type Valuation Technique Unobservable Input Fair Value Range Average Impaired loans Appraisal value Property specific adjustment $ 2,469 N/A N/A Foreclosed assets Appraisal value Property specific adjustment 885 N/A N/A Servicing rights Discounted cash flows Prepayment speed assumptions 1,880 161-327 237 Discount rate 9.5 % 9.5 % Disclosure of estimated fair value information about financial instruments, for which it is practicable to estimate that value, is required whether or not recognized in the consolidated balance sheets. In cases in which quoted market prices are not available, estimated fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimate of future cash flows. In that regard, the derived estimated fair value estimates cannot be substantiated by comparison to independent markets and, in many cases could not be realized in immediate settlement of the instruments. Certain financial instruments, with an estimated fair value that is not practicable to estimate and all non-financial instruments, are excluded from the disclosure requirements. Accordingly, the aggregate estimated fair value amounts presented do not necessarily represent the underlying value of the Company. The following disclosures represent financial instruments in which the ending balances, as of June 30, 2022 and December 31, 2021, were not carried at estimated fair value in their entirety on the consolidated balance sheets. Cash and Cash Equivalents and Accrued Interest The carrying amounts reported in the consolidated balance sheets approximate those assets’ and liabilities’ estimated fair values. Investment Securities, Held-to-Maturity The fair values of debt securities held-to-maturity are based on quoted market prices for the same or similar securities, recently executed transactions and pricing models. Loans For variable-rate loans that reprice frequently and with no significant change in credit risk, estimated fair values are based on carrying values. The estimated fair values of other loans are estimated using discounted cash flow analysis, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Bank-Owned Life Insurance Bank-owned life insurance is carried at the amount due upon surrender of the policy, which is also the estimated fair value. This amount was provided by the insurance companies based on the terms of the underlying insurance contract. Deposits The estimated fair values of demand deposits are, by definition, equal to the amount payable on demand at the consolidated balance sheet date. The estimated fair values of fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies current incremental interest rates being offered on certificates of deposit to a schedule of aggregated expected monthly maturities of the outstanding certificates of deposit. Short-Term Borrowings and Long-Term Debt For variable-rate borrowings that reprice frequently, estimated fair values are based on carrying values. The estimated fair value of fixed-rate borrowings are estimated using discounted cash flow analysis, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. Off-Balance Sheet Credit-Related Commitments Off-balance sheet credit related commitments are generally of short-term nature. The contract amount of such commitments approximates their estimated fair value since the commitments are comprised primarily of unfunded loan commitments which are generally priced at market at the time of funding. The estimated fair values, and related carrying or notional amounts, of the Company’s financial instruments at the dates indicated are as follows: June 30, 2022 Carrying Estimated Fair Value (dollars in thousands) Amount Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents $ 37,043 $ 37,043 $ — $ — $ 37,043 Investment securities held-to-maturity 331,741 — 293,949 — 293,949 Loans, net 1,858,870 — — 1,848,251 1,848,251 Accrued interest receivable 9,155 9,155 — — 9,155 Bank-owned life insurance 33,564 — 33,564 — 33,564 Financial Liabilities Noninterest-bearing deposits $ 764,808 $ — $ 764,808 $ — $ 764,808 Interest-bearing deposits 1,654,291 — 1,654,291 — 1,654,291 Time deposits 200,451 — — 198,278 198,278 Short-term borrowings 242,350 242,350 — — 242,350 Long-term debt 58,870 — 86,271 — 86,271 Accrued interest payable 802 802 — — 802 December 31, 2021 Carrying Estimated Fair Value (dollars in thousands) Amount Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents $ 242,311 $ 242,311 $ — $ — $ 242,311 Investment securities held-to-maturity 352,061 — 349,677 — 349,677 Loans, net 1,726,448 — — 1,760,784 1,760,784 Accrued interest receivable 8,537 8,537 — — 8,537 Bank-owned life insurance 33,156 — 33,156 — 33,156 Financial Liabilities Noninterest-bearing deposits $ 938,840 $ — $ 938,840 $ — $ 938,840 Interest-bearing deposits 1,748,799 — 1,748,799 — 1,748,799 Time deposits 232,912 — — 232,970 232,970 Long-term debt 58,933 — 57,772 — 57,772 Accrued interest payable 1,674 1,674 — — 1,674 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events. | |
Subsequent Events | NOTE 21 Subsequent Events On July 1, 2022, the Company completed the merger with MPB BHC, Inc. (“MPHX”) (OTCPK: MPHX), the banking holding company for Metro Phoenix Bank (the “Merger”), pursuant to the Agreement of Plan of Merger, dated December 8, 2021, by and between the Company and MPHX. On July 1, 2022, MPHX merged with and into the Company, with the Company as the surviving entity in the merger. Pursuant to the terms of the Merger, at the effective time of the Merger, each common share of MPHX issued and outstanding immediately prior to the effective time, was converted into the right to receive 0.74 shares of the Company’s common stock. As of June 30, 2022, MPHX, had total assets of $399.0 million which included $277.6 million in gross loans, $354.5 million in total deposits, and $43.8 million in total equity. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Significant Accounting Policies | |
Organization | Organization Alerus Financial Corporation, or the Company, is a financial holding company organized under the laws of the state of Delaware. The Company and its subsidiaries operate as a diversified financial services company headquartered in Grand Forks, North Dakota. Through its subsidiary, Alerus Financial, National Association, or the Bank, the Company provides financial solutions to businesses and consumers through four distinct business lines—banking, retirement and benefit services, wealth management, and mortgage. |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC, and conform to practices within the banking industry and include all of the information and disclosures required by generally accepted accounting principles in the United States of America, or GAAP, for interim financial reporting. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of financial results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results for the full year or any other period. The Company has also evaluated all subsequent events for potential recognition and disclosure through the date of the filing of this Quarterly Report on Form 10-Q. These interim unaudited financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 11, 2022. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. The Company’s principal operating subsidiary is the Bank. In the normal course of business, the Company may enter into a transaction with a variable interest entity, or VIE. VIE’s are legal entities whose investors lack the ability to make decisions about the entity’s activities, or whose equity investors do not have the right to receive the residual returns of the entity. The applicable accounting guidance requires the Company to perform ongoing quantitative and qualitative analysis to determine whether it must consolidate any VIE. The Company does not have any ownership interest in, or exert any control, over any VIE, and thus no VIE’s are included in the consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the valuation of investment securities, determination of the allowance for loan losses, valuation of reporting units for the purpose of testing goodwill and other intangible assets for impairment, valuation of deferred tax assets, and fair values of financial instruments. |
Reclassifications | Reclassifications Certain items previously reported have been reclassified to conform to the current period’s reporting format. Such reclassifications did not affect net income or stockholders’ equity. |
Other Information | Other Information As of June 30, 2022, the Coronavirus Disease, or COVID-19, pandemic was ongoing. During 2020, the COVID-19 pandemic created disruption in global supply chains, increased rates of unemployment and adversely impacted many industries, including industries related to the collateral underlying certain of our loans, and many of these effects are continuing. Beginning in 2021 and continuing into 2022, the U.S. economy, with certain setbacks, started reopening and wider distribution of vaccines encouraged greater economic activity. Nonetheless, the economic recovery could remain uneven, particularly given uncertainty with respect to the continued distribution and acceptance of the vaccines and their effectiveness with respect to new variants of the virus. Management believes the Company is taking appropriate actions to mitigate, to the extent possible, the negative impact. However, the full, long-term impact of COVID-19 is currently unknown and cannot be reasonably estimated as the events are continuing to unfold. |
Emerging Growth Company | Emerging Growth Company The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In addition, even if the Company complies with the greater obligations of public companies that are not emerging growth companies, the Company may avail itself of the reduced requirements applicable to emerging growth companies from time to time in the future, so long as the Company is an emerging growth company. The Company will continue to be an emerging growth company until the earliest to occur of: (1) the end of the fiscal year following the fifth anniversary of the date of the first sale of common equity securities under the Company’s Registration Statement on Form S-1, which was declared effective by the SEC on September 12, 2019; (2) the last day of the fiscal year in which the Company has $1.07 billion or more in annual revenues; (3) the date on which the Company is deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the Exchange Act; or (4) the date on which the Company has, during the previous three-year period, issued publicly or privately, more than $1.0 billion in non-convertible debt securities. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 for complying with new or revised accounting standards. As an emerging growth company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company elected to take advantage of the benefits of this extended transition period. |
Investment Securities (Tables)
Investment Securities (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Investment Securities | |
Schedule of amortized cost of investment securities to estimated fair values | June 30, 2022 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value Available-for-sale U.S. Treasury and agencies $ 3,643 $ 66 $ — $ 3,709 Mortgage backed securities Residential agency 740,734 27 (88,254) 652,507 Commercial 80,077 — (3,947) 76,130 Asset backed securities 40 — — 40 Corporate bonds 69,031 130 (2,750) 66,411 Total available-for-sale investment securities 893,525 223 (94,951) 798,797 Held-to-maturity Obligations of state and political agencies 139,102 2 (12,927) 126,177 Mortgage backed securities Residential agency 192,639 — (24,867) 167,772 Total held-to-maturity investment securities 331,741 2 (37,794) 293,949 Total investment securities $ 1,225,266 $ 225 $ (132,745) $ 1,092,746 December 31, 2021 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value Available-for-sale U.S. Treasury and agencies $ 5,028 $ 75 $ — $ 5,103 Mortgage backed securities Residential agency 717,781 1,213 (11,837) 707,157 Commercial 88,362 2,674 (123) 90,913 Asset backed securities 52 2 — 54 Corporate bonds 49,035 1,398 (11) 50,422 Total available-for-sale investment securities 860,258 5,362 (11,971) 853,649 Held-to-maturity Obligations of state and political agencies 144,543 1,110 (349) 145,304 Mortgage backed securities Residential agency 207,518 — (3,145) 204,373 Total held-to-maturity investment securities 352,061 1,110 (3,494) 349,677 Total investment securities $ 1,212,319 $ 6,472 $ (15,465) $ 1,203,326 |
Schedule of investment securities with gross unrealized losses | June 30, 2022 Less than 12 Months Over 12 Months Total Unrealized Fair Unrealized Fair Unrealized Fair (dollars in thousands) Losses Value Losses Value Losses Value Available-for-sale U.S. Treasury and agencies $ — $ — $ — $ — $ — $ — Mortgage backed securities Residential agency (51,859) 436,234 (36,395) 214,079 (88,254) 650,313 Commercial (3,947) 76,130 — — (3,947) 76,130 Asset backed securities — — — 2 — 2 Corporate bonds (2,750) 56,780 — — (2,750) 56,780 Total available-for-sale investment securities (58,556) 569,144 (36,395) 214,081 (94,951) 783,225 Held-to-maturity Obligations of state and political agencies (12,927) 122,734 — — (12,927) 122,734 Mortgage backed securities Residential agency (24,867) 167,772 — — (24,867) 167,772 Total held-to-maturity investment securities (37,794) 290,506 — — (37,794) 290,506 Total investment securities $ (96,350) $ 859,650 $ (36,395) $ 214,081 $ (132,745) $ 1,073,731 December 31, 2021 Less than 12 Months Over 12 Months Total Unrealized Fair Unrealized Fair Unrealized Fair (dollars in thousands) Losses Value Losses Value Losses Value Available-for-sale U.S. Treasury and agencies $ — $ — $ — $ — $ — $ — Mortgage backed securities Residential agency (10,156) 554,811 (1,681) 55,082 (11,837) 609,893 Commercial (123) 17,470 — — (123) 17,470 Asset backed securities — — — 2 — 2 Corporate bonds (11) 5,989 — — (11) 5,989 Total available-for-sale investment securities (10,290) 578,270 (1,681) 55,084 (11,971) 633,354 Held-to-maturity Obligations of state and political agencies (349) 53,210 — — (349) 53,210 Mortgage backed securities Residential agency (3,145) 204,373 — — (3,145) 204,373 Total held-to-maturity investment securities (3,494) 257,583 — — (3,494) 257,583 Total investment securities $ (13,784) $ 835,853 $ (1,681) $ 55,084 $ (15,465) $ 890,937 |
Schedule of contractual maturity of amortized cost and estimated fair value | Held-to-maturity Available-for-sale Carrying Fair Amortized Fair (dollars in thousands) Value Value Cost Value Due within one year or less $ 6,831 $ 6,794 $ 20 $ 21 Due after one year through five years 36,025 33,922 21,599 21,017 Due after five years through ten years 72,720 65,003 94,957 91,522 Due after 10 years 216,165 188,230 776,949 686,237 Total investment securities $ 331,741 $ 293,949 $ 893,525 $ 798,797 |
Schedule of proceeds from the sale of available for sale securities | Three months ended Six months ended June 30, June 30, (dollars in thousands) 2022 2021 2022 2021 Proceeds $ — $ — $ — $ 13,189 Realized gains — — — 114 Realized losses — — — — |
Schedule of proceeds from the call of held-to-maturity investment securities | Three months ended Six months ended June 30, June 30, (dollars in thousands) 2022 2021 2022 2021 Proceeds $ 211 $ — $ 726 $ 1,415 Realized gains — — — — Realized losses — — — — |
Schedule of federal home loan bank | June 30, December 31, (dollars in thousands) 2022 2021 Federal Reserve $ 2,675 $ 2,675 FHLB 13,938 3,806 |
Loans and Allowance for Loan _2
Loans and Allowance for Loan Losses (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Loans and Allowance for Loan Losses | |
Schedule of total loans outstanding by portfolio segment | June 30, December 31, (dollars in thousands) 2022 2021 Commercial Commercial and industrial (1) $ 484,426 $ 436,761 Real estate construction 48,870 40,619 Commercial real estate 599,737 598,893 Total commercial 1,133,033 1,076,273 Consumer Residential real estate first mortgage 568,571 510,716 Residential real estate junior lien 135,255 125,668 Other revolving and installment 53,384 45,363 Total consumer 757,210 681,747 Total loans $ 1,890,243 $ 1,758,020 (1) Included Paycheck Protection Program, or PPP, loans of $6.9 million at June 30, 2022 and $33.6 million at December 31, 2021. |
Schedule of past due aging analysis of the loan portfolio | June 30, 2022 90 Days Accruing 30 - 89 Days or More Total (dollars in thousands) Current Past Due Past Due Nonaccrual Loans Commercial Commercial and industrial $ 482,743 $ 82 $ — $ 1,601 $ 484,426 Real estate construction 48,833 37 — — 48,870 Commercial real estate 599,108 — — 629 599,737 Total commercial 1,130,684 119 — 2,230 1,133,033 Consumer Residential real estate first mortgage 565,443 1,255 — 1,873 568,571 Residential real estate junior lien 134,636 426 — 193 135,255 Other revolving and installment 53,123 187 — 74 53,384 Total consumer 753,202 1,868 — 2,140 757,210 Total loans $ 1,883,886 $ 1,987 $ — $ 4,370 $ 1,890,243 December 31, 2021 90 Days Accruing 30 - 89 Days or More Total (dollars in thousands) Current Past Due Past Due Nonaccrual Loans Commercial Commercial and industrial $ 435,135 $ 168 $ 121 $ 1,337 $ 436,761 Real estate construction 40,619 — — — 40,619 Commercial real estate 598,264 — — 629 598,893 Total commercial 1,074,018 168 121 1,966 1,076,273 Consumer Residential real estate first mortgage 508,925 1,770 — 21 510,716 Residential real estate junior lien 125,412 167 — 89 125,668 Other revolving and installment 45,242 121 — — 45,363 Total consumer 679,579 2,058 — 110 681,747 Total loans $ 1,753,597 $ 2,226 $ 121 $ 2,076 $ 1,758,020 |
Schedule of loans outstanding, by portfolio segment and risk category | June 30, 2022 Criticized Special (dollars in thousands) Pass Mention Substandard Doubtful Total Commercial Commercial and industrial $ 479,586 $ 1,204 $ 3,636 $ — $ 484,426 Real estate construction 48,870 — — — 48,870 Commercial real estate 589,552 4,689 5,496 — 599,737 Total commercial 1,118,008 5,893 9,132 — 1,133,033 Consumer Residential real estate first mortgage 566,368 65 2,138 — 568,571 Residential real estate junior lien 134,537 — 718 — 135,255 Other revolving and installment 53,310 — 74 — 53,384 Total consumer 754,215 65 2,930 — 757,210 Total loans $ 1,872,223 $ 5,958 $ 12,062 $ — $ 1,890,243 December 31, 2021 Criticized Special (dollars in thousands) Pass Mention Substandard Doubtful Total Commercial Commercial and industrial $ 430,235 $ 480 $ 6,046 $ — $ 436,761 Real estate construction 40,619 — — — 40,619 Commercial real estate 585,291 — 13,602 — 598,893 Total commercial 1,056,145 480 19,648 — 1,076,273 Consumer Residential real estate first mortgage 510,375 — 341 — 510,716 Residential real estate junior lien 124,898 — 770 — 125,668 Other revolving and installment 45,363 — — — 45,363 Total consumer 680,636 — 1,111 — 681,747 Total loans $ 1,736,781 $ 480 $ 20,759 $ — $ 1,758,020 |
Summary of changes in allowances | Three months ended June 30, 2022 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 9,795 $ 1,085 $ (637) $ 90 $ 10,333 Real estate construction 810 68 — — 878 Commercial real estate 11,946 (1,123) — 11 10,834 Total commercial 22,551 30 (637) 101 22,045 Consumer Residential real estate first mortgage 6,661 (486) — — 6,175 Residential real estate junior lien 1,400 (134) — 201 1,467 Other revolving and installment 644 (5) (37) 32 634 Total consumer 8,705 (625) (37) 233 8,276 Unallocated 457 595 — — 1,052 Total $ 31,713 $ — $ (674) $ 334 $ 31,373 Six months ended June 30, 2022 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 8,925 $ 1,856 $ (664) $ 216 $ 10,333 Real estate construction 783 95 — — 878 Commercial real estate 12,376 (1,564) — 22 10,834 Total commercial 22,084 387 (664) 238 22,045 Consumer Residential real estate first mortgage 6,532 (357) — — 6,175 Residential real estate junior lien 1,295 (42) — 214 1,467 Other revolving and installment 481 140 (55) 68 634 Total consumer 8,308 (259) (55) 282 8,276 Unallocated 1,180 (128) — — 1,052 Total $ 31,572 $ — $ (719) $ 520 $ 31,373 Three months ended June 30, 2021 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 10,487 $ (869) $ (273) $ 275 $ 9,620 Real estate construction 598 (11) — — 587 Commercial real estate 13,849 (913) — 1 12,937 Total commercial 24,934 (1,793) (273) 276 23,144 Consumer Residential real estate first mortgage 6,047 129 — — 6,176 Residential real estate junior lien 1,288 99 — 14 1,401 Other revolving and installment 666 (81) (49) 38 574 Total consumer 8,001 147 (49) 52 8,151 Unallocated 823 1,646 — — 2,469 Total $ 33,758 $ — $ (322) $ 328 $ 33,764 Six months ended June 30, 2021 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 10,205 $ (553) $ (477) $ 445 $ 9,620 Real estate construction 658 (71) — — 587 Commercial real estate 14,105 (636) (536) 4 12,937 Total commercial 24,968 (1,260) (1,013) 449 23,144 Consumer Residential real estate first mortgage 5,774 402 — — 6,176 Residential real estate junior lien 1,373 (69) — 97 1,401 Other revolving and installment 753 (164) (93) 78 574 Total consumer 7,900 169 (93) 175 8,151 Unallocated 1,378 1,091 — — 2,469 Total $ 34,246 $ — $ (1,106) $ 624 $ 33,764 |
Schedule of loans distributed by portfolio segment and impairment methodology | June 30, 2022 Recorded Investment Allowance for Loan Losses Individually Collectively Individually Collectively (dollars in thousands) Evaluated Evaluated Total Evaluated Evaluated Total Commercial Commercial and industrial $ 1,769 $ 482,657 $ 484,426 $ 828 $ 9,505 $ 10,333 Real estate construction — 48,870 48,870 — 878 878 Commercial real estate 803 598,934 599,737 3 10,831 10,834 Total commercial 2,572 1,130,461 1,133,033 831 21,214 22,045 Consumer Residential real estate first mortgage 1,873 566,698 568,571 — 6,175 6,175 Residential real estate junior lien 193 135,062 135,255 — 1,467 1,467 Other revolving and installment 74 53,310 53,384 27 607 634 Total consumer 2,140 755,070 757,210 27 8,249 8,276 Unallocated — — — — — 1,052 Total loans $ 4,712 $ 1,885,531 $ 1,890,243 $ 858 $ 29,463 $ 31,373 December 31, 2021 Recorded Investment Allowance for Loan Losses Individually Collectively Individually Collectively (dollars in thousands) Evaluated Evaluated Total Evaluated Evaluated Total Commercial Commercial and industrial $ 1,831 $ 434,930 $ 436,761 $ 278 $ 8,647 $ 8,925 Real estate construction — 40,619 40,619 — 783 783 Commercial real estate 809 598,084 598,893 5 12,371 12,376 Total commercial 2,640 1,073,633 1,076,273 283 21,801 22,084 Consumer Residential real estate first mortgage 21 510,695 510,716 — 6,532 6,532 Residential real estate junior lien 91 125,577 125,668 — 1,295 1,295 Other revolving and installment — 45,363 45,363 — 481 481 Total consumer 112 681,635 681,747 — 8,308 8,308 Unallocated — — — — — 1,180 Total loans $ 2,752 $ 1,755,268 $ 1,758,020 $ 283 $ 30,109 $ 31,572 |
Schedule of impaired loans | June 30, 2022 December 31, 2021 Recorded Unpaid Related Recorded Unpaid Related (dollars in thousands) Investment Principal Allowance Investment Principal Allowance Impaired loans with a valuation allowance Commercial and industrial $ 1,008 $ 1,036 $ 828 $ 445 $ 464 $ 278 Commercial real estate 174 195 3 180 203 5 Residential real estate junior lien — — — — — — Other revolving and installment 74 74 27 — — — Total impaired loans with a valuation allowance 1,256 1,305 858 625 667 283 Impaired loans without a valuation allowance Commercial and industrial 761 873 — 1,386 1,575 — Commercial real estate 629 684 — 629 684 — Residential real estate first mortgage 1,873 1,910 — 21 24 — Residential real estate junior lien 193 226 — 91 120 — Other revolving and installment — — — — — — Total impaired loans without a valuation allowance 3,456 3,693 — 2,127 2,403 — Total impaired loans Commercial and industrial 1,769 1,909 828 1,831 2,039 278 Commercial real estate 803 879 3 809 887 5 Residential real estate first mortgage 1,873 1,910 — 21 24 — Residential real estate junior lien 193 226 — 91 120 — Other revolving and installment 74 74 27 — — — Total impaired loans $ 4,712 $ 4,998 $ 858 $ 2,752 $ 3,070 $ 283 The table below presents the average recorded investment in impaired loans and interest income for the three and six months ended June 30, 2022 and 2021: Three months ended June 30, 2022 2021 Average Average Recorded Interest Recorded Interest (dollars in thousands) Investment Income Investment Income Impaired loans with a valuation allowance Commercial and industrial $ 1,018 $ 2 $ 1,548 $ 3 Commercial real estate 176 2 188 2 Residential real estate first mortgage — — — — Residential real estate junior lien — — 27 — Other revolving and installment 75 — 13 — Total impaired loans with a valuation allowance 1,269 4 1,776 5 Impaired loans without a valuation allowance Commercial and industrial 761 — 1,174 5 Commercial real estate 629 — 4,472 — Residential real estate first mortgage 1,962 — 23 — Residential real estate junior lien 196 — 302 — Other revolving and installment — — — — Total impaired loans without a valuation allowance 3,548 — 5,971 5 Total impaired loans Commercial and industrial 1,779 2 2,722 8 Commercial real estate 805 2 4,660 2 Residential real estate first mortgage 1,962 — 23 — Residential real estate junior lien 196 — 329 — Other revolving and installment 75 — 13 — Total impaired loans $ 4,817 $ 4 $ 7,747 $ 10 Six Months Ended June 30, 2022 2021 Average Average Recorded Interest Recorded Interest (dollars in thousands) Investment Income Investment Income Impaired loans with a valuation allowance Commercial and industrial $ 1,156 $ 6 $ 1,637 $ 6 Commercial real estate 177 3 190 4 Residential real estate junior lien — — 30 — Other revolving and installment 157 — 14 — Total impaired loans with a valuation allowance 1,490 9 1,871 10 Impaired loans without a valuation allowance Commercial and industrial 761 — 1,187 11 Commercial real estate 629 — 4,662 — Residential real estate first mortgage 1,953 — 24 — Residential real estate junior lien 198 — 303 — Other revolving and installment — — — — Total impaired loans without a valuation allowance 3,541 — 6,176 11 Total impaired loans Commercial and industrial 1,917 6 2,824 17 Commercial real estate 806 3 4,852 4 Residential real estate first mortgage 1,953 — 24 — Residential real estate junior lien 198 — 333 — Other revolving and installment 157 — 14 — Total impaired loans $ 5,031 $ 9 $ 8,047 $ 21 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Other Intangible Assets | |
Schedule of goodwill by segment | June 30, December 31, (dollars in thousands) 2022 2021 Banking $ 20,131 $ 20,131 Retirement and benefit services 11,206 11,359 Total goodwill $ 31,337 $ 31,490 |
Schedule of identifiable intangible assets | June 30, 2022 December 31, 2021 (dollars in thousands) Gross Carrying Amount Accumulated Amortization Total Gross Carrying Amount Accumulated Amortization Total Identifiable customer intangibles $ 41,423 $ (23,912) $ 17,511 $ 42,057 $ (21,807) $ 20,250 Total intangible assets $ 41,423 $ (23,912) $ 17,511 $ 42,057 $ (21,807) $ 20,250 |
Loan Servicing (Tables)
Loan Servicing (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Loan Servicing | |
Summary of activity related to loan servicing | Three months ended Six months ended June 30, June 30, (dollars in thousands) 2022 2021 2022 2021 Balance, beginning of period $ 1,771 $ 1,952 $ 1,880 $ 1,987 Additions 13 62 17 111 Amortization (96) (185) (256) (385) (Impairment)/Recovery 376 135 423 251 Balance, end of period $ 2,064 $ 1,964 $ 2,064 $ 1,964 |
Summary of key economic assumptions | June 30, December 31, (dollars in thousands) 2022 2021 Fair value of servicing rights $ 2,064 $ 1,880 Weighted-average remaining term, years 20.6 20.3 Prepayment speeds 7.1 % 14.2 % Discount rate 10.0 % 9.5 % |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases | |
Schedule of right-of-use assets and lease liabilities | June 30, December 31, (dollars in thousands) 2022 2021 Lease Right-of-Use Assets Classification Operating lease right-of-use assets Operating lease right-of-use assets $ 3,439 $ 3,727 Finance lease right-of-use assets Land, premises and equipment, net 29 87 Total lease right-of-use assets $ 3,468 $ 3,814 Lease Liabilities Operating lease liabilities Operating lease liabilities $ 3,856 $ 4,275 Finance lease liabilities Long-term debt 83 203 Total lease liabilities $ 3,939 $ 4,478 |
Schedule of weighted average remaining lease term and average discount rate | June 30, December 31, 2022 2021 Weighted-average remaining lease term, years Operating leases 4.3 3.4 Finance leases 0.3 0.8 Weighted-average discount rate Operating leases 2.8 % 2.5 % Finance leases 7.8 % 7.8 % |
Schedule of lease costs and other lease information | Three months ended Six months ended June 30, June 30, (dollars in thousands) 2022 2021 2022 2021 Lease costs Operating lease cost $ 414 $ 492 $ 825 $ 988 Variable lease cost 150 158 363 391 Short-term lease cost 43 46 88 83 Finance lease cost Interest on lease liabilities 1 7 5 15 Amortization of right-of-use assets 29 29 58 58 Sublease income (59) (52) (116) (112) Net lease cost $ 578 $ 680 $ 1,223 $ 1,423 Other information Cash paid for amounts included in the measurement of lease liabilities operating cash flows from operating leases $ 393 $ 474 $ 784 $ 961 Right-of-use assets obtained in exchange for new operating lease liabilities — — $ — $ — |
Schedule of future minimum payments for finance leases | Future minimum payments for finance and operating leases with initial or remaining terms of one year or more as of June 30, 2022 were as follows: Finance Operating (dollars in thousands) Leases Leases Twelve months ended June 30, 2023 $ 84 $ 1,644 June 30, 2024 — 932 June 30, 2025 — 467 June 30, 2026 — 375 June 30, 2027 — 252 Thereafter — 511 Total future minimum lease payments $ 84 $ 4,181 Amounts representing interest (1) (325) Total operating lease liabilities $ 83 $ 3,856 |
Schedule of future minimum payments for operating leases | Finance Operating (dollars in thousands) Leases Leases Twelve months ended June 30, 2023 $ 84 $ 1,644 June 30, 2024 — 932 June 30, 2025 — 467 June 30, 2026 — 375 June 30, 2027 — 252 Thereafter — 511 Total future minimum lease payments $ 84 $ 4,181 Amounts representing interest (1) (325) Total operating lease liabilities $ 83 $ 3,856 |
Deposits (Tables)
Deposits (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Deposits. | |
Schedule of components of deposits | June 30, December 31, (dollars in thousands) 2022 2021 Noninterest-bearing $ 764,808 $ 938,840 Interest-bearing Interest-bearing demand 642,641 714,669 Savings accounts 97,227 96,825 Money market savings 914,423 937,305 Time deposits 200,451 232,912 Total interest-bearing 1,854,742 1,981,711 Total deposits $ 2,619,550 $ 2,920,551 |
Short-Term Borrowings (Tables)
Short-Term Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Short-Term Borrowings | |
Schedule of short-term borrowings | June 30, December 31, (dollars in thousands) 2022 2021 Fed funds purchased $ 117,350 $ — FHLB Short-term advances 125,000 — Total $ 242,350 $ — |
Schedule of additional information related to short term borrowings | Three months ended June 30, (dollars in thousands) 2022 2021 Fed funds purchased Balance as of end of period $ 117,350 $ — Average daily balance 81,506 — Maximum month-end balance 117,350 — Weighted-average rate During period 1.18 % — % End of period 1.44 % — % FHLB Short-term advances Balance as of end of period $ 125,000 $ — Average daily balance 9,615 — Maximum month-end balance 125,000 — Weighted-average rate During period 1.59 % — % End of period 1.80 % — % Six months ended June 30, (dollars in thousands) 2022 2021 Fed funds purchased Balance as of end of period $ 117,350 $ — Average daily balance 40,978 — Maximum month-end balance 117,350 — Weighted-average rate During period 1.18 % — % End of period 1.44 % — % FHLB Short-term advances Balance as of end of period $ 125,000 $ — Average daily balance 4,834 — Maximum month-end balance 125,000 — Weighted-average rate During period 1.59 % — % End of period 1.80 % — % |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Long-Term Debt. | |
Schedule of long-term debt | June 30, 2022 Period End Face Carrying Interest Maturity (dollars in thousands) Value Value Interest Rate Rate Date Call Date Subordinated notes payable $ 50,000 $ 50,000 Fixed 3.50 % 3/30/2031 3/31/2026 Junior subordinated debenture (Trust I) 4,124 3,515 Three-month LIBOR + 3.10% 5.30 % 6/26/2033 6/26/2008 Junior subordinated debenture (Trust II) 6,186 5,272 Three-month LIBOR + 1.80% 3.63 % 9/15/2036 9/15/2011 Finance lease liability 2,700 83 Fixed 7.81 % 10/31/2022 N/A Total long-term debt $ 63,010 $ 58,870 December 31, 2021 Period End Face Carrying Interest Maturity (dollars in thousands) Value Value Interest Rate Rate Date Call Date Subordinated notes payable $ 50,000 $ 50,000 Fixed 3.50 % 3/30/2031 3/31/2026 Junior subordinated debenture (Trust I) 4,124 3,492 Three-month LIBOR + 3.10% 3.32 % 6/26/2033 6/26/2008 Junior subordinated debenture (Trust II) 6,186 5,238 Three-month LIBOR + 1.80% 2.00 % 9/15/2036 9/15/2011 Finance lease liability 2,700 203 Fixed 7.81 % 10/31/2022 N/A Total long-term debt $ 63,010 $ 58,933 |
Financial Instruments with Of_2
Financial Instruments with Off-Balance Sheet Risk (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Financial Instruments with Off-Balance Sheet Risk | |
Schedule of financial instruments whose contract amount represents credit risk | June 30, December 31, (dollars in thousands) 2022 2021 Commitments to extend credit $ 635,320 $ 668,115 Standby letters of credit 11,412 10,529 Total $ 646,732 $ 678,644 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Compensation | |
Schedule of stock plan activity | Six months ended June 30, 2022 2021 Weighted- Weighted- Average Grant Average Grant Awards Date Fair Value Awards Date Fair Value Restricted Stock and Restricted Stock Unit Awards Outstanding at beginning of period 260,850 $ 21.04 325,030 $ 19.48 Granted 94,592 19.01 66,664 26.63 Vested (107,113) 19.19 (88,382) 21.38 Forfeited or cancelled (10,624) 23.71 — — Outstanding at end of period 237,705 $ 20.95 303,312 $ 20.49 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Income Taxes | |
Schedule of components of income tax expense | Three months ended June 30, 2022 2021 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 2,524 21.0 % $ 3,221 21.0 % Tax effect of: Tax exempt income (122) (1.0) % (148) (1.0) % State income taxes, net of federal benefits 531 4.4 % 663 4.3 % Nondeductible items and other (208) (1.7) % (92) (0.6) % Applicable income taxes $ 2,725 22.7 % $ 3,644 23.7 % Six months ended June 30, 2022 2021 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 5,269 21.0 % $ 7,395 21.0 % Tax effect of: Tax exempt income (239) (1.0) % (301) (0.9) % State income taxes, net of federal benefits 1,109 4.4 % 1,516 4.3 % Nondeductible items and other (526) (2.1) % (304) (0.9) % Applicable income taxes $ 5,613 22.3 % $ 8,306 23.5 % |
Tax Credit Investments (Tables)
Tax Credit Investments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Tax Credit Investments. | |
Schedule of tax credits | June 30, 2022 December 31, 2021 (dollars in thousands) Investment Unfunded Commitment Investment Unfunded Commitment Investment Accounting Method Low income housing tax credit Proportional amortization $ 17,906 $ 16,402 $ 7,906 $ 6,999 Total $ 17,906 $ 16,402 $ 7,906 $ 6,999 |
Summary of amortization expense and tax benefit | The following table presents a summary of the amortization expense and tax benefit recognized for the Company’s qualified affordable housing projects for the three and six months ended June 30, 2022 and 2021. Three months ended June 30, 2022 2021 Amortization Tax Benefit Amortization Tax Benefit (dollars in thousands) Expense (1) Recognized (2) Expense (1) Recognized (2) Low income housing tax credit $ 111 $ (156) $ — $ — Total $ 111 $ (156) $ — $ — (1) The amortization expense for low income housing tax credit investments were included in income tax expense. (2) All of the tax benefits recognized were included in income tax expense. Six months ended June 30, 2022 2021 Amortization Tax Benefit Amortization Tax Benefit (dollars in thousands) Expense (1) Recognized (2) Expense (1) Recognized (2) Low income housing tax credit $ 111 $ (156) $ — $ — Total $ 111 $ (156) $ — $ — (1) The amortization expense for low income housing tax credits were included in income tax expense. (2) All of the tax benefits recognized were included in income tax expense. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting | |
Schedule of key metrics related to segments | Three months ended June 30, 2022 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 22,779 $ — $ — $ 558 $ (561) $ 22,776 Provision for loan losses — — — — — — Noninterest income 1,341 16,293 5,548 6,038 6 29,226 Noninterest expense 15,619 6,598 1,630 5,209 10,928 39,984 Net income before taxes $ 8,501 $ 9,695 $ 3,918 $ 1,387 $ (11,483) $ 12,018 Six months ended June 30, 2022 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 44,304 $ — $ — $ 1,267 $ (1,122) $ 44,449 Provision for loan losses — — — — — — Noninterest income 2,879 33,939 10,874 10,969 35 58,696 Noninterest expense 28,313 15,030 3,468 10,229 21,015 78,055 Net income before taxes $ 18,870 $ 18,909 $ 7,406 $ 2,007 $ (22,102) $ 25,090 Three months ended June 30, 2021 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 21,188 $ — $ — $ 490 $ (538) $ 21,140 Provision for loan losses — — — — — — Noninterest income 1,466 17,871 5,138 12,287 (14) 36,748 Noninterest expense 10,914 9,988 2,128 10,661 8,859 42,550 Net income before taxes $ 11,740 $ 7,883 $ 3,010 $ 2,116 $ (9,411) $ 15,338 Six months ended June 30, 2021 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 43,068 $ — $ — $ 936 $ (826) $ 43,178 Provision for loan losses — — — — — — Noninterest income 2,988 35,126 10,124 29,419 (28) 77,629 Noninterest expense 21,998 20,100 4,463 21,514 17,517 85,592 Net income before taxes $ 24,058 $ 15,026 $ 5,661 $ 8,841 $ (18,371) $ 35,215 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share | |
Schedule of basic and diluted earnings per share | Three months ended Six months ended June 30, June 30, (dollars and shares in thousands, except per share data) 2022 2021 2022 2021 Net income $ 9,293 $ 11,694 $ 19,477 $ 26,909 Dividends and undistributed earnings allocated to participating securities 101 179 225 432 Net income available to common shareholders $ 9,192 $ 11,515 $ 19,252 $ 26,477 Weighted-average common shares outstanding for basic earnings per share 17,297 17,194 17,271 17,170 Dilutive effect of stock-based awards 235 303 246 312 Weighted-average common shares outstanding for diluted earnings per share 17,532 17,497 17,517 17,482 Earnings per common share: Basic earnings per common share $ 0.53 $ 0.67 $ 1.11 $ 1.54 Diluted earnings per common share $ 0.52 $ 0.66 $ 1.10 $ 1.52 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Derivative Instruments | |
Schedule of amounts recorded in the Company's consolidated balance sheets for derivatives not designated as hedging instruments | June 30, 2022 December 31, 2021 Fair Notional Fair Notional (dollars in thousands) Value Amount Value Amount Asset Derivatives Consolidated Balance Sheet Location Interest rate swaps Other assets $ 4,850 $ 44,133 $ 1,366 $ 44,826 Interest rate lock commitments Other assets 1,445 53,871 1,507 52,316 Forward loan sales commitments Other assets 542 16,560 490 13,418 TBA mortgage backed securities Other assets 343 113,000 34 97,000 Total asset derivatives $ 7,180 $ 227,564 $ 3,397 $ 207,560 Liability Derivatives Interest rate swaps Accrued expenses and other liabilities $ 4,851 $ 44,133 $ 1,368 $ 44,826 TBA mortgage backed securities Accrued expenses and other liabilities — — — — Total liability derivatives $ 4,851 $ 44,133 $ 1,368 $ 44,826 |
Schedule of gain (loss) recognized on derivatives instruments | Three months ended Six months ended Consolidated Statements June 30, June 30, June 30, June 30, (dollars in thousands) of Income Location 2022 2021 2022 2021 Interest rate swaps Other noninterest income $ 1 $ (1) $ 1 $ 1 Interest rate lock commitments Mortgage banking 563 740 (147) (5,505) Forward loan sales commitments Mortgage banking 542 73 52 (1,562) TBA mortgage backed securities Mortgage banking 1,246 (3,405) 3,749 5,556 Total gain/(loss) from derivative instruments $ 2,352 $ (2,593) $ 3,655 $ (1,510) |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Regulatory Matters | |
Schedule of Bank's actual capital amounts and ratios | June 30, 2022 Minimum to be Requirements Well Capitalized for Capital Under Prompt Actual Adequacy Purposes Corrective Action (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Common equity tier 1 capital to risk weighted assets Consolidated $ 331,692 14.19 % $ 105,214 4.50 % $ N/A N/A Bank 318,704 13.64 % 105,115 4.50 % 151,833 6.50 % Tier 1 capital to risk weighted assets . Consolidated 340,479 14.56 % 140,285 6.00 % N/A N/A Bank 318,704 13.64 % 140,154 6.00 % 186,872 8.00 % Total capital to risk weighted assets Consolidated 419,279 17.95 % 187,047 8.00 % N/A N/A Bank 347,929 14.89 % 186,872 8.00 % 233,590 10.00 % Tier 1 capital to average assets Consolidated 340,479 10.80 % 126,051 4.00 % N/A N/A Bank 318,704 10.12 % 125,962 4.00 % 157,453 5.00 % December 31, 2021 Minimum to be Requirements Well Capitalized for Capital Under Prompt Actual Adequacy Purposes Corrective Action (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Common equity tier 1 capital to risk weighted assets Consolidated $ 314,628 14.65 % $ 96,647 4.50 % $ N/A N/A Bank 297,453 13.87 % 96,538 4.50 % 139,444 6.50 % Tier 1 capital to risk weighted assets . Consolidated 323,358 15.06 % 128,862 6.00 % N/A N/A Bank 297,453 13.87 % 128,718 6.00 % 171,624 8.00 % Total capital to risk weighted assets Consolidated 400,263 18.64 % 171,816 8.00 % N/A N/A Bank 324,328 15.12 % 171,624 8.00 % 214,530 10.00 % Tier 1 capital to average assets Consolidated 323,358 9.79 % 132,112 4.00 % N/A N/A Bank 297,453 9.01 % 132,039 4.00 % 165,049 5.00 % |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value of Assets and Liabilities | |
Summary of balances of the assets and liabilities measured at estimated fair value on a recurring basis | June 30, 2022 (dollars in thousands) Level 1 Level 2 Level 3 Total Available-for-sale U.S. treasury and government agencies $ — $ 3,709 $ — $ 3,709 Mortgage backed securities Residential agency — 652,507 — 652,507 Commercial — 76,130 — 76,130 Asset backed securities — 40 — 40 Corporate bonds — 66,411 — 66,411 Total available-for-sale investment securities $ — $ 798,797 $ — $ 798,797 Other assets Derivatives $ — $ 7,180 $ — $ 7,180 Other liabilities Derivatives $ — $ 4,851 $ — $ 4,851 December 31, 2021 (dollars in thousands) Level 1 Level 2 Level 3 Total Available-for-sale U.S. treasury and government agencies $ — $ 5,103 $ — $ 5,103 Mortgage backed securities Residential agency — 707,157 — 707,157 Commercial — 90,913 — 90,913 Asset backed securities — 54 — 54 Corporate bonds — 50,422 — 50,422 Total available-for-sale investment securities $ — $ 853,649 $ — $ 853,649 Other assets Derivatives $ — $ 3,397 $ — $ 3,397 Other liabilities Derivatives $ — $ 1,368 $ — $ 1,368 |
Schedule of net impairment losses related to nonrecurring estimated fair value measurements of certain assets | June 30, 2022 (dollars in thousands) Level 2 Level 3 Total Impairment Loans held for sale $ 54,363 $ — $ 54,363 $ — Impaired loans — 3,854 3,854 858 Foreclosed assets — 860 860 — Servicing rights — 2,064 2,064 — December 31, 2021 (dollars in thousands) Level 2 Level 3 Total Impairment Loans held for sale $ 46,490 $ — $ 46,490 $ — Impaired loans — 2,469 2,469 283 Foreclosed assets — 885 885 — Servicing rights — 1,880 1,880 — |
Schedule of valuation techniques and significant unobservable inputs used to measure Level 3 estimated fair values | June 30, 2022 (dollars in thousands) Weighted Asset Type Valuation Technique Unobservable Input Fair Value Range Average Impaired loans Appraisal value Property specific adjustment $ 3,854 N/A N/A Foreclosed assets Appraisal value Property specific adjustment 860 N/A N/A Servicing rights Discounted cash flows Prepayment speed assumptions 2,064 109-155 119 Discount rate 10.0 % 10.0 % December 31, 2021 (dollars in thousands) Weighted Asset Type Valuation Technique Unobservable Input Fair Value Range Average Impaired loans Appraisal value Property specific adjustment $ 2,469 N/A N/A Foreclosed assets Appraisal value Property specific adjustment 885 N/A N/A Servicing rights Discounted cash flows Prepayment speed assumptions 1,880 161-327 237 Discount rate 9.5 % 9.5 % |
Summary of estimated fair values and related carrying or notional amounts, of the Company's financial instruments | June 30, 2022 Carrying Estimated Fair Value (dollars in thousands) Amount Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents $ 37,043 $ 37,043 $ — $ — $ 37,043 Investment securities held-to-maturity 331,741 — 293,949 — 293,949 Loans, net 1,858,870 — — 1,848,251 1,848,251 Accrued interest receivable 9,155 9,155 — — 9,155 Bank-owned life insurance 33,564 — 33,564 — 33,564 Financial Liabilities Noninterest-bearing deposits $ 764,808 $ — $ 764,808 $ — $ 764,808 Interest-bearing deposits 1,654,291 — 1,654,291 — 1,654,291 Time deposits 200,451 — — 198,278 198,278 Short-term borrowings 242,350 242,350 — — 242,350 Long-term debt 58,870 — 86,271 — 86,271 Accrued interest payable 802 802 — — 802 December 31, 2021 Carrying Estimated Fair Value (dollars in thousands) Amount Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents $ 242,311 $ 242,311 $ — $ — $ 242,311 Investment securities held-to-maturity 352,061 — 349,677 — 349,677 Loans, net 1,726,448 — — 1,760,784 1,760,784 Accrued interest receivable 8,537 8,537 — — 8,537 Bank-owned life insurance 33,156 — 33,156 — 33,156 Financial Liabilities Noninterest-bearing deposits $ 938,840 $ — $ 938,840 $ — $ 938,840 Interest-bearing deposits 1,748,799 — 1,748,799 — 1,748,799 Time deposits 232,912 — — 232,970 232,970 Long-term debt 58,933 — 57,772 — 57,772 Accrued interest payable 1,674 1,674 — — 1,674 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) | 6 Months Ended |
Jun. 30, 2022 segment | |
Significant Accounting Policies | |
Number of operating segments | 4 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Investment securities available-for-sale | ||
Amortized Cost | $ 893,525 | $ 860,258 |
Unrealized Gains | 223 | 5,362 |
Unrealized Losses | (94,951) | (11,971) |
Fair Value | 798,797 | 853,649 |
Amortized Cost | 331,741 | 352,061 |
Unrealized Gains | 2 | 1,110 |
Unrealized Losses | (37,794) | (3,494) |
Fair Value | 293,949 | 349,677 |
Amortized Cost | 1,225,266 | 1,212,319 |
Unrealized Gains | 225 | 6,472 |
Unrealized Losses | (132,745) | (15,465) |
Fair Value | 1,092,746 | 1,203,326 |
U. S. Treasury and agencies | ||
Investment securities available-for-sale | ||
Amortized Cost | 3,643 | 5,028 |
Unrealized Gains | 66 | 75 |
Fair Value | 3,709 | 5,103 |
Obligations of state and political agencies. | ||
Investment securities available-for-sale | ||
Amortized Cost | 139,102 | 144,543 |
Unrealized Gains | 2 | 1,110 |
Unrealized Losses | (12,927) | (349) |
Fair Value | 126,177 | 145,304 |
Mortgage backed securities - Residential agency | ||
Investment securities available-for-sale | ||
Amortized Cost | 740,734 | 717,781 |
Unrealized Gains | 27 | 1,213 |
Unrealized Losses | (88,254) | (11,837) |
Fair Value | 652,507 | 707,157 |
Amortized Cost | 192,639 | 207,518 |
Unrealized Losses | (24,867) | (3,145) |
Fair Value | 167,772 | 204,373 |
Mortgage backed securities - Commercial | ||
Investment securities available-for-sale | ||
Amortized Cost | 80,077 | 88,362 |
Unrealized Gains | 2,674 | |
Unrealized Losses | (3,947) | (123) |
Fair Value | 76,130 | 90,913 |
Asset backed securities | ||
Investment securities available-for-sale | ||
Amortized Cost | 40 | 52 |
Unrealized Gains | 2 | |
Fair Value | 40 | 54 |
Corporate bonds | ||
Investment securities available-for-sale | ||
Amortized Cost | 69,031 | 49,035 |
Unrealized Gains | 130 | 1,398 |
Unrealized Losses | (2,750) | (11) |
Fair Value | $ 66,411 | $ 50,422 |
Investment Securities - Gross u
Investment Securities - Gross unrealized losses (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Investment securities available-for-sale | ||
Unrealized losses less than 12 months | $ (58,556) | $ (10,290) |
Fair value less than 12 months | 569,144 | 578,270 |
Unrealized losses over 12 months | (36,395) | (1,681) |
Fair value over 12 months | 214,081 | 55,084 |
Total Unrealized losses | (94,951) | (11,971) |
Total Fair value | 783,225 | 633,354 |
Held-to-maturity investment securities | ||
Unrealized losses less than 12 months | (37,794) | (3,494) |
Fair value less than 12 months | 290,506 | 257,583 |
Total Unrealized losses | (37,794) | (3,494) |
Total Fair value | 290,506 | 257,583 |
Unrealized losses less than 12 months | (96,350) | (13,784) |
Fair value less than 12 months | 859,650 | 835,853 |
Unrealized losses over 12 months | (36,395) | (1,681) |
Fair value over 12 months | 214,081 | 55,084 |
Total Unrealized losses | (132,745) | (15,465) |
Total Fair value | 1,073,731 | 890,937 |
Obligations of state and political agencies. | ||
Held-to-maturity investment securities | ||
Unrealized losses less than 12 months | (12,927) | (349) |
Fair value less than 12 months | 122,734 | 53,210 |
Total Unrealized losses | (12,927) | (349) |
Total Fair value | 122,734 | 53,210 |
Mortgage backed securities - Residential agency | ||
Investment securities available-for-sale | ||
Unrealized losses less than 12 months | (51,859) | (10,156) |
Fair value less than 12 months | 436,234 | 554,811 |
Unrealized losses over 12 months | (36,395) | (1,681) |
Fair value over 12 months | 214,079 | 55,082 |
Total Unrealized losses | (88,254) | (11,837) |
Total Fair value | 650,313 | 609,893 |
Held-to-maturity investment securities | ||
Unrealized losses less than 12 months | (24,867) | (3,145) |
Fair value less than 12 months | 167,772 | 204,373 |
Total Unrealized losses | (24,867) | (3,145) |
Total Fair value | 167,772 | 204,373 |
Mortgage backed securities - Commercial | ||
Investment securities available-for-sale | ||
Unrealized losses less than 12 months | (3,947) | (123) |
Fair value less than 12 months | 76,130 | 17,470 |
Total Unrealized losses | (3,947) | (123) |
Total Fair value | 76,130 | 17,470 |
Asset backed securities | ||
Investment securities available-for-sale | ||
Fair value over 12 months | 2 | 2 |
Total Fair value | 2 | 2 |
Corporate bonds | ||
Investment securities available-for-sale | ||
Unrealized losses less than 12 months | (2,750) | (11) |
Fair value less than 12 months | 56,780 | 5,989 |
Total Unrealized losses | (2,750) | (11) |
Total Fair value | $ 56,780 | $ 5,989 |
Investment Securities - Amortiz
Investment Securities - Amortized cost and estimated fair value (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Carrying Value | |
Due within one year or less | $ 6,831 |
Due after one year through five years | 36,025 |
Due after five years through ten years | 72,720 |
Due after 10 years | 216,165 |
Total investment securities | 331,741 |
Estimated Fair Value | |
Due within one year or less | 6,794 |
Due after one year through five years | 33,922 |
Due after five years through ten years | 65,003 |
Due after 10 years | 188,230 |
Total investment securities | 293,949 |
Amortized Cost | |
Due within one year or less | 20 |
Due after one year through five years | 21,599 |
Due after five years through ten years | 94,957 |
Due after 10 years | 776,949 |
Total investment securities available-for-sale | 893,525 |
Fair Value | |
Due within one year or less | 21 |
Due after one year through five years | 21,017 |
Due after five years through ten years | 91,522 |
Due after 10 years | 686,237 |
Total investment securities available-for-sale | $ 798,797 |
Investment Securities - Pledged
Investment Securities - Pledged (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Investment Securities | ||
Investment securities with carrying value | $ 267.3 | $ 192.8 |
Investment Securities - Proceed
Investment Securities - Proceeds from sale of available for sale securities (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2021 USD ($) | |
Investment Securities | |
Proceeds | $ 13,189 |
Realized gains | $ 114 |
Investment Securities - Proce_2
Investment Securities - Proceeds from the call of held-to-maturity investment securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | |
Investment Securities | |||
Proceeds | $ 211 | $ 726 | $ 1,415 |
Investment Securities - Carryin
Investment Securities - Carrying value (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Investment Securities | ||
Federal Reserve | $ 2,675 | $ 2,675 |
FHLB | $ 13,938 | $ 3,806 |
Investment Securities - Visa Cl
Investment Securities - Visa Class B Restricted Shares (Details) - Visa $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 USD ($) shares | Dec. 31, 2021 USD ($) | |
Common Class A | ||
Securities | ||
Investment shares owned, if converted | 11,119 | |
Common Class B | ||
Securities | ||
Conversion ratio | 1.6059 | |
Investment shares owned | 6,924 | |
Cost basis | $ | $ 0 | $ 0 |
Loans and Allowance for Loan _3
Loans and Allowance for Loan Losses - Loans outstanding by portfolio segment (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Loans and Allowance for Loan Losses | ||
Total loans | $ 1,890,243 | $ 1,758,020 |
Deferred loan fees and costs | 928 | 231 |
Commercial | ||
Loans and Allowance for Loan Losses | ||
Total loans | 1,133,033 | 1,076,273 |
Consumer | ||
Loans and Allowance for Loan Losses | ||
Total loans | 757,210 | 681,747 |
Commercial and industrial | Commercial | ||
Loans and Allowance for Loan Losses | ||
Total loans | 484,426 | 436,761 |
Commercial and industrial | Commercial | PPP Loans | ||
Loans and Allowance for Loan Losses | ||
Total loans | 6,900 | 33,600 |
Deferred loan fees and costs | 106 | 881 |
Real estate construction | Commercial | ||
Loans and Allowance for Loan Losses | ||
Total loans | 48,870 | 40,619 |
Residential | Consumer | Real estate first mortgage | ||
Loans and Allowance for Loan Losses | ||
Total loans | 568,571 | 510,716 |
Residential | Consumer | Real estate junior lien | ||
Loans and Allowance for Loan Losses | ||
Total loans | 135,255 | 125,668 |
Commercial real estate | Commercial | ||
Loans and Allowance for Loan Losses | ||
Total loans | 599,737 | 598,893 |
Other revolving and installment | Consumer | ||
Loans and Allowance for Loan Losses | ||
Total loans | $ 53,384 | $ 45,363 |
Loans and Allowance for Loan _4
Loans and Allowance for Loan Losses - Past due aging analysis (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Past due aging analysis of loans | ||
Nonaccrual | $ 4,370 | $ 2,076 |
Loans and Leases Receivable, Gross, Total | 1,890,243 | 1,758,020 |
30 - 89 Days Past Due | ||
Past due aging analysis of loans | ||
Loans | 1,987 | 2,226 |
90 Days or More Past Due | ||
Past due aging analysis of loans | ||
Loans | 121 | |
Current | ||
Past due aging analysis of loans | ||
Loans | 1,883,886 | 1,753,597 |
Commercial | ||
Past due aging analysis of loans | ||
Nonaccrual | 2,230 | 1,966 |
Loans and Leases Receivable, Gross, Total | 1,133,033 | 1,076,273 |
Commercial | 30 - 89 Days Past Due | ||
Past due aging analysis of loans | ||
Loans | 119 | 168 |
Commercial | 90 Days or More Past Due | ||
Past due aging analysis of loans | ||
Loans | 121 | |
Commercial | Current | ||
Past due aging analysis of loans | ||
Loans | 1,130,684 | 1,074,018 |
Commercial | Commercial and industrial | ||
Past due aging analysis of loans | ||
Nonaccrual | 1,601 | 1,337 |
Loans and Leases Receivable, Gross, Total | 484,426 | 436,761 |
Commercial | Commercial and industrial | 30 - 89 Days Past Due | ||
Past due aging analysis of loans | ||
Loans | 82 | 168 |
Commercial | Commercial and industrial | 90 Days or More Past Due | ||
Past due aging analysis of loans | ||
Loans | 121 | |
Commercial | Commercial and industrial | Current | ||
Past due aging analysis of loans | ||
Loans | 482,743 | 435,135 |
Commercial | Real estate construction | ||
Past due aging analysis of loans | ||
Loans and Leases Receivable, Gross, Total | 48,870 | 40,619 |
Commercial | Real estate construction | 30 - 89 Days Past Due | ||
Past due aging analysis of loans | ||
Loans | 37 | |
Commercial | Real estate construction | Current | ||
Past due aging analysis of loans | ||
Loans | 48,833 | 40,619 |
Commercial | Commercial real estate | ||
Past due aging analysis of loans | ||
Nonaccrual | 629 | 629 |
Loans and Leases Receivable, Gross, Total | 599,737 | 598,893 |
Commercial | Commercial real estate | Current | ||
Past due aging analysis of loans | ||
Loans | 599,108 | 598,264 |
Consumer | ||
Past due aging analysis of loans | ||
Nonaccrual | 2,140 | 110 |
Loans and Leases Receivable, Gross, Total | 757,210 | 681,747 |
Consumer | 30 - 89 Days Past Due | ||
Past due aging analysis of loans | ||
Loans | 1,868 | 2,058 |
Consumer | Current | ||
Past due aging analysis of loans | ||
Loans | 753,202 | 679,579 |
Consumer | Residential | Real estate first mortgage | ||
Past due aging analysis of loans | ||
Nonaccrual | 1,873 | 21 |
Loans and Leases Receivable, Gross, Total | 568,571 | 510,716 |
Consumer | Residential | Real estate first mortgage | 30 - 89 Days Past Due | ||
Past due aging analysis of loans | ||
Loans | 1,255 | 1,770 |
Consumer | Residential | Real estate first mortgage | Current | ||
Past due aging analysis of loans | ||
Loans | 565,443 | 508,925 |
Consumer | Residential | Real estate junior lien | ||
Past due aging analysis of loans | ||
Nonaccrual | 193 | 89 |
Loans and Leases Receivable, Gross, Total | 135,255 | 125,668 |
Consumer | Residential | Real estate junior lien | 30 - 89 Days Past Due | ||
Past due aging analysis of loans | ||
Loans | 426 | 167 |
Consumer | Residential | Real estate junior lien | Current | ||
Past due aging analysis of loans | ||
Loans | 134,636 | 125,412 |
Consumer | Other revolving and installment | ||
Past due aging analysis of loans | ||
Nonaccrual | 74 | |
Loans and Leases Receivable, Gross, Total | 53,384 | 45,363 |
Consumer | Other revolving and installment | 30 - 89 Days Past Due | ||
Past due aging analysis of loans | ||
Loans | 187 | 121 |
Consumer | Other revolving and installment | Current | ||
Past due aging analysis of loans | ||
Loans | $ 53,123 | $ 45,242 |
Loans and Allowance for Loan _5
Loans and Allowance for Loan Losses - Loans by risk category (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Loans outstanding by loan portfolio segment and risk category | ||
Loans | $ 1,890,243 | $ 1,758,020 |
Pass | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 1,872,223 | 1,736,781 |
Special Mention | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 5,958 | 480 |
Substandard | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 12,062 | 20,759 |
Commercial | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 1,133,033 | 1,076,273 |
Commercial | Pass | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 1,118,008 | 1,056,145 |
Commercial | Special Mention | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 5,893 | 480 |
Commercial | Substandard | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 9,132 | 19,648 |
Commercial | Commercial and industrial | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 484,426 | 436,761 |
Commercial | Commercial and industrial | Pass | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 479,586 | 430,235 |
Commercial | Commercial and industrial | Special Mention | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 1,204 | 480 |
Commercial | Commercial and industrial | Substandard | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 3,636 | 6,046 |
Commercial | Real estate construction | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 48,870 | 40,619 |
Commercial | Real estate construction | Pass | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 48,870 | 40,619 |
Commercial | Commercial real estate | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 599,737 | 598,893 |
Commercial | Commercial real estate | Pass | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 589,552 | 585,291 |
Commercial | Commercial real estate | Special Mention | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 4,689 | |
Commercial | Commercial real estate | Substandard | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 5,496 | 13,602 |
Consumer | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 757,210 | 681,747 |
Consumer | Pass | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 754,215 | 680,636 |
Consumer | Special Mention | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 65 | |
Consumer | Substandard | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 2,930 | 1,111 |
Consumer | Residential | Real estate first mortgage | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 568,571 | 510,716 |
Consumer | Residential | Real estate first mortgage | Pass | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 566,368 | 510,375 |
Consumer | Residential | Real estate first mortgage | Special Mention | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 65 | |
Consumer | Residential | Real estate first mortgage | Substandard | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 2,138 | 341 |
Consumer | Residential | Real estate junior lien | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 135,255 | 125,668 |
Consumer | Residential | Real estate junior lien | Pass | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 134,537 | 124,898 |
Consumer | Residential | Real estate junior lien | Substandard | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 718 | 770 |
Consumer | Other revolving and installment | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 53,384 | 45,363 |
Consumer | Other revolving and installment | Pass | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 53,310 | $ 45,363 |
Consumer | Other revolving and installment | Substandard | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | $ 74 |
Loans and Allowance for Loan _6
Loans and Allowance for Loan Losses - Changes in allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Changes in the allowance | ||||
Beginning Balance | $ 31,713 | $ 33,758 | $ 31,572 | $ 34,246 |
Loan charge-offs | (674) | (322) | (719) | (1,106) |
Loan recoveries | 334 | 328 | 520 | 624 |
Ending Balance | 31,373 | 33,764 | 31,373 | 33,764 |
Unallocated | ||||
Changes in the allowance | ||||
Beginning Balance | 457 | 823 | 1,180 | 1,378 |
Provision for loan losses | 595 | 1,646 | (128) | 1,091 |
Ending Balance | 1,052 | 2,469 | 1,052 | 2,469 |
Commercial | ||||
Changes in the allowance | ||||
Beginning Balance | 22,551 | 24,934 | 22,084 | 24,968 |
Provision for loan losses | 30 | (1,793) | 387 | (1,260) |
Loan charge-offs | (637) | (273) | (664) | (1,013) |
Loan recoveries | 101 | 276 | 238 | 449 |
Ending Balance | 22,045 | 23,144 | 22,045 | 23,144 |
Commercial | Commercial and industrial | ||||
Changes in the allowance | ||||
Beginning Balance | 9,795 | 10,487 | 8,925 | 10,205 |
Provision for loan losses | 1,085 | (869) | 1,856 | (553) |
Loan charge-offs | (637) | (273) | (664) | (477) |
Loan recoveries | 90 | 275 | 216 | 445 |
Ending Balance | 10,333 | 9,620 | 10,333 | 9,620 |
Commercial | Real estate construction | ||||
Changes in the allowance | ||||
Beginning Balance | 810 | 598 | 783 | 658 |
Provision for loan losses | 68 | (11) | 95 | (71) |
Ending Balance | 878 | 587 | 878 | 587 |
Commercial | Commercial real estate | ||||
Changes in the allowance | ||||
Beginning Balance | 11,946 | 13,849 | 12,376 | 14,105 |
Provision for loan losses | (1,123) | (913) | (1,564) | (636) |
Loan charge-offs | (536) | |||
Loan recoveries | 11 | 1 | 22 | 4 |
Ending Balance | 10,834 | 12,937 | 10,834 | 12,937 |
Consumer | ||||
Changes in the allowance | ||||
Beginning Balance | 8,705 | 8,001 | 8,308 | 7,900 |
Provision for loan losses | (625) | 147 | (259) | 169 |
Loan charge-offs | (37) | (49) | (55) | (93) |
Loan recoveries | 233 | 52 | 282 | 175 |
Ending Balance | 8,276 | 8,151 | 8,276 | 8,151 |
Consumer | Residential | Real estate first mortgage | ||||
Changes in the allowance | ||||
Beginning Balance | 6,661 | 6,047 | 6,532 | 5,774 |
Provision for loan losses | (486) | 129 | (357) | 402 |
Ending Balance | 6,175 | 6,176 | 6,175 | 6,176 |
Consumer | Residential | Real estate junior lien | ||||
Changes in the allowance | ||||
Beginning Balance | 1,400 | 1,288 | 1,295 | 1,373 |
Provision for loan losses | (134) | 99 | (42) | (69) |
Loan recoveries | 201 | 14 | 214 | 97 |
Ending Balance | 1,467 | 1,401 | 1,467 | 1,401 |
Consumer | Other revolving and installment | ||||
Changes in the allowance | ||||
Beginning Balance | 644 | 666 | 481 | 753 |
Provision for loan losses | (5) | (81) | 140 | (164) |
Loan charge-offs | (37) | (49) | (55) | (93) |
Loan recoveries | 32 | 38 | 68 | 78 |
Ending Balance | $ 634 | $ 574 | $ 634 | $ 574 |
Loans and Allowance for Loan _7
Loans and Allowance for Loan Losses - Components of loans and associated allowance (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Loans and Allowance for Loan Losses | ||||||
Recorded Investment, Individually Evaluated | $ 4,712 | $ 2,752 | ||||
Recorded Investment, Collectively Evaluated | 1,885,531 | 1,755,268 | ||||
Loans and Leases Receivable, Gross, Total | 1,890,243 | 1,758,020 | ||||
Allowance for Loan Losses, Individually Evaluated | 858 | 283 | ||||
Allowance for Loan Losses, Collectively Evaluated | 29,463 | 30,109 | ||||
Loans and Leases Receivable, Allowance, Total | 31,373 | $ 31,713 | 31,572 | $ 33,764 | $ 33,758 | $ 34,246 |
Unallocated | ||||||
Loans and Allowance for Loan Losses | ||||||
Loans and Leases Receivable, Allowance, Total | 1,052 | 457 | 1,180 | 2,469 | 823 | 1,378 |
Commercial | ||||||
Loans and Allowance for Loan Losses | ||||||
Recorded Investment, Individually Evaluated | 2,572 | 2,640 | ||||
Recorded Investment, Collectively Evaluated | 1,130,461 | 1,073,633 | ||||
Loans and Leases Receivable, Gross, Total | 1,133,033 | 1,076,273 | ||||
Allowance for Loan Losses, Individually Evaluated | 831 | 283 | ||||
Allowance for Loan Losses, Collectively Evaluated | 21,214 | 21,801 | ||||
Loans and Leases Receivable, Allowance, Total | 22,045 | 22,551 | 22,084 | 23,144 | 24,934 | 24,968 |
Commercial | Commercial and industrial | ||||||
Loans and Allowance for Loan Losses | ||||||
Recorded Investment, Individually Evaluated | 1,769 | 1,831 | ||||
Recorded Investment, Collectively Evaluated | 482,657 | 434,930 | ||||
Loans and Leases Receivable, Gross, Total | 484,426 | 436,761 | ||||
Allowance for Loan Losses, Individually Evaluated | 828 | 278 | ||||
Allowance for Loan Losses, Collectively Evaluated | 9,505 | 8,647 | ||||
Loans and Leases Receivable, Allowance, Total | 10,333 | 9,795 | 8,925 | 9,620 | 10,487 | 10,205 |
Commercial | Real estate construction | ||||||
Loans and Allowance for Loan Losses | ||||||
Recorded Investment, Collectively Evaluated | 48,870 | 40,619 | ||||
Loans and Leases Receivable, Gross, Total | 48,870 | 40,619 | ||||
Allowance for Loan Losses, Collectively Evaluated | 878 | 783 | ||||
Loans and Leases Receivable, Allowance, Total | 878 | 810 | 783 | 587 | 598 | 658 |
Commercial | Commercial real estate | ||||||
Loans and Allowance for Loan Losses | ||||||
Recorded Investment, Individually Evaluated | 803 | 809 | ||||
Recorded Investment, Collectively Evaluated | 598,934 | 598,084 | ||||
Loans and Leases Receivable, Gross, Total | 599,737 | 598,893 | ||||
Allowance for Loan Losses, Individually Evaluated | 3 | 5 | ||||
Allowance for Loan Losses, Collectively Evaluated | 10,831 | 12,371 | ||||
Loans and Leases Receivable, Allowance, Total | 10,834 | 11,946 | 12,376 | 12,937 | 13,849 | 14,105 |
Consumer | ||||||
Loans and Allowance for Loan Losses | ||||||
Recorded Investment, Individually Evaluated | 2,140 | 112 | ||||
Recorded Investment, Collectively Evaluated | 755,070 | 681,635 | ||||
Loans and Leases Receivable, Gross, Total | 757,210 | 681,747 | ||||
Allowance for Loan Losses, Individually Evaluated | 27 | |||||
Allowance for Loan Losses, Collectively Evaluated | 8,249 | 8,308 | ||||
Loans and Leases Receivable, Allowance, Total | 8,276 | 8,705 | 8,308 | 8,151 | 8,001 | 7,900 |
Consumer | Residential | Real estate first mortgage | ||||||
Loans and Allowance for Loan Losses | ||||||
Recorded Investment, Individually Evaluated | 1,873 | 21 | ||||
Recorded Investment, Collectively Evaluated | 566,698 | 510,695 | ||||
Loans and Leases Receivable, Gross, Total | 568,571 | 510,716 | ||||
Allowance for Loan Losses, Collectively Evaluated | 6,175 | 6,532 | ||||
Loans and Leases Receivable, Allowance, Total | 6,175 | 6,661 | 6,532 | 6,176 | 6,047 | 5,774 |
Consumer | Residential | Real estate junior lien | ||||||
Loans and Allowance for Loan Losses | ||||||
Recorded Investment, Individually Evaluated | 193 | 91 | ||||
Recorded Investment, Collectively Evaluated | 135,062 | 125,577 | ||||
Loans and Leases Receivable, Gross, Total | 135,255 | 125,668 | ||||
Allowance for Loan Losses, Collectively Evaluated | 1,467 | 1,295 | ||||
Loans and Leases Receivable, Allowance, Total | 1,467 | 1,400 | 1,295 | 1,401 | 1,288 | 1,373 |
Consumer | Other revolving and installment | ||||||
Loans and Allowance for Loan Losses | ||||||
Recorded Investment, Individually Evaluated | 74 | |||||
Recorded Investment, Collectively Evaluated | 53,310 | 45,363 | ||||
Loans and Leases Receivable, Gross, Total | 53,384 | 45,363 | ||||
Allowance for Loan Losses, Individually Evaluated | 27 | |||||
Allowance for Loan Losses, Collectively Evaluated | 607 | 481 | ||||
Loans and Leases Receivable, Allowance, Total | $ 634 | $ 644 | $ 481 | $ 574 | $ 666 | $ 753 |
Loans and Allowance for Loan _8
Loans and Allowance for Loan Losses - Impaired loans (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Impaired | ||
Loans with related allowance for loan losses, Recorded investment | $ 1,256 | $ 625 |
Loans with related allowance for loan losses, unpaid principal | 1,305 | 667 |
Loans with related allowance for loan losses, Related Allowance | 858 | 283 |
Loans with no related allowance for loan losses, Recorded investment | 3,456 | 2,127 |
Loans with no related allowance for loan losses, unpaid principal | 3,693 | 2,403 |
Recorded investment | 4,712 | 2,752 |
Unpaid principal balance | 4,998 | 3,070 |
Commercial | Commercial and industrial | ||
Impaired | ||
Loans with related allowance for loan losses, Recorded investment | 1,008 | 445 |
Loans with related allowance for loan losses, unpaid principal | 1,036 | 464 |
Loans with related allowance for loan losses, Related Allowance | 828 | 278 |
Loans with no related allowance for loan losses, Recorded investment | 761 | 1,386 |
Loans with no related allowance for loan losses, unpaid principal | 873 | 1,575 |
Recorded investment | 1,769 | 1,831 |
Unpaid principal balance | 1,909 | 2,039 |
Commercial | Commercial real estate | ||
Impaired | ||
Loans with related allowance for loan losses, Recorded investment | 174 | 180 |
Loans with related allowance for loan losses, unpaid principal | 195 | 203 |
Loans with related allowance for loan losses, Related Allowance | 3 | 5 |
Loans with no related allowance for loan losses, Recorded investment | 629 | 629 |
Loans with no related allowance for loan losses, unpaid principal | 684 | 684 |
Recorded investment | 803 | 809 |
Unpaid principal balance | 879 | 887 |
Consumer | Residential | Real estate first mortgage | ||
Impaired | ||
Loans with no related allowance for loan losses, Recorded investment | 1,873 | 21 |
Loans with no related allowance for loan losses, unpaid principal | 1,910 | 24 |
Recorded investment | 1,873 | 21 |
Unpaid principal balance | 1,910 | 24 |
Consumer | Residential | Real estate junior lien | ||
Impaired | ||
Loans with no related allowance for loan losses, Recorded investment | 193 | 91 |
Loans with no related allowance for loan losses, unpaid principal | 226 | 120 |
Recorded investment | 193 | 91 |
Unpaid principal balance | 226 | $ 120 |
Consumer | Other revolving and installment | ||
Impaired | ||
Loans with related allowance for loan losses, Recorded investment | 74 | |
Loans with related allowance for loan losses, unpaid principal | 74 | |
Loans with related allowance for loan losses, Related Allowance | 27 | |
Recorded investment | 74 | |
Unpaid principal balance | $ 74 |
Loans and Allowance for Loan _9
Loans and Allowance for Loan Losses - Interest Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Impaired | ||||
Loans with related allowance for loan losses, Average recorded investment | $ 1,269 | $ 1,776 | $ 1,490 | $ 1,871 |
Loans with no related allowance for loan losses, Average recorded investment | 3,548 | 5,971 | 3,541 | 6,176 |
Loans, Average recorded investment | 4,817 | 7,747 | 5,031 | 8,047 |
Loans with related allowance for loan losses, Interest income | 4 | 5 | 9 | 10 |
Loans with no related allowance for loan losses, Interest income | 5 | 11 | ||
Loans, Interest income | 4 | 10 | 9 | 21 |
Commercial | Commercial and industrial | ||||
Impaired | ||||
Loans with related allowance for loan losses, Average recorded investment | 1,018 | 1,548 | 1,156 | 1,637 |
Loans with no related allowance for loan losses, Average recorded investment | 761 | 1,174 | 761 | 1,187 |
Loans, Average recorded investment | 1,779 | 2,722 | 1,917 | 2,824 |
Loans with related allowance for loan losses, Interest income | 2 | 3 | 6 | 6 |
Loans with no related allowance for loan losses, Interest income | 5 | 11 | ||
Loans, Interest income | 2 | 8 | 6 | 17 |
Commercial | Commercial real estate | ||||
Impaired | ||||
Loans with related allowance for loan losses, Average recorded investment | 176 | 188 | 177 | 190 |
Loans with no related allowance for loan losses, Average recorded investment | 629 | 4,472 | 629 | 4,662 |
Loans, Average recorded investment | 805 | 4,660 | 806 | 4,852 |
Loans with related allowance for loan losses, Interest income | 2 | 2 | 3 | 4 |
Loans, Interest income | 2 | 2 | 3 | 4 |
Consumer | Residential | Real estate first mortgage | ||||
Impaired | ||||
Loans with no related allowance for loan losses, Average recorded investment | 1,962 | 23 | 1,953 | 24 |
Loans, Average recorded investment | 1,962 | 23 | 1,953 | 24 |
Consumer | Residential | Real estate junior lien | ||||
Impaired | ||||
Loans with related allowance for loan losses, Average recorded investment | 27 | 30 | ||
Loans with no related allowance for loan losses, Average recorded investment | 196 | 302 | 198 | 303 |
Loans, Average recorded investment | 196 | 329 | 198 | 333 |
Consumer | Other revolving and installment | ||||
Impaired | ||||
Loans with related allowance for loan losses, Average recorded investment | 75 | 13 | 157 | 14 |
Loans, Average recorded investment | $ 75 | $ 13 | $ 157 | $ 14 |
Loans and Allowance for Loan_10
Loans and Allowance for Loan Losses - Pledged (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Loans and Allowance for Loan Losses | ||
Total loans | $ 1,890,243 | $ 1,758,020 |
Pledged | ||
Loans and Allowance for Loan Losses | ||
Total loans | $ 1,300,000 | $ 1,200,000 |
Loans and Allowance for Loan_11
Loans and Allowance for Loan Losses - Troubled Debt Restructurings (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 USD ($) loan | Jun. 30, 2021 loan | Jun. 30, 2021 USD ($) | |
Troubled debt restructuring | |||
Number of loans modified as a troubled debt restructuring | loan | 0 | 3 | |
Extending Maturity | |||
Troubled debt restructuring | |||
Carrying value of restructured loan | $ 795 | ||
Specific reserve for loan losses allocated | $ 0 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Goodwill | ||
Total goodwill | $ 31,337 | $ 31,490 |
Banking | ||
Goodwill | ||
Total goodwill | 20,131 | 20,131 |
Retirement and Benefit Services | ||
Goodwill | ||
Total goodwill | $ 11,206 | $ 11,359 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Goodwill | |||||
Gross Carrying Amount | $ 41,423 | $ 41,423 | $ 42,057 | ||
Accumulated Amortization | (23,912) | (23,912) | (21,807) | ||
Total | 17,511 | 17,511 | 20,250 | ||
Intangible amortization expense | 1,053 | $ 1,088 | 2,106 | $ 2,239 | |
Goodwill, Impairment Loss | 0 | ||||
Identifiable customer intangibles | |||||
Goodwill | |||||
Gross Carrying Amount | 41,423 | 41,423 | 42,057 | ||
Accumulated Amortization | (23,912) | (23,912) | (21,807) | ||
Total | $ 17,511 | $ 17,511 | $ 20,250 |
Loan Servicing (Details)
Loan Servicing (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Loan Servicing | |||||
Loans serviced for others | $ 317,700 | $ 317,700 | $ 345,800 | ||
Servicing Asset at Fair Value, Amount | |||||
Balance, beginning of period | 1,771 | $ 1,952 | 1,880 | $ 1,987 | |
Additions | 13 | 62 | 17 | 111 | |
Amortization | (96) | (185) | (256) | (385) | |
(Impairment)/Recovery | 376 | 135 | 423 | 251 | |
Balance, end of period | $ 2,064 | $ 1,964 | $ 2,064 | $ 1,964 |
Loan Servicing - Key economic a
Loan Servicing - Key economic assumptions (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Loan Servicing | ||
Fair value of servicing rights | $ 2,064 | $ 1,880 |
Weighted-average remaining term, years | 20 years 7 months 6 days | 20 years 3 months 18 days |
Prepayment speeds | 7.10% | 14.20% |
Discount rate | 10% | 9.50% |
Leases - Lease right-of-use ass
Leases - Lease right-of-use assets and liabilities (Details) $ in Thousands | Jun. 30, 2022 USD ($) item | Dec. 31, 2021 USD ($) |
Leases | ||
Number of finance leases | item | 1 | |
Lease Right-of-Use Assets | ||
Operating lease right-of-use assets | $ 3,439 | $ 3,727 |
Finance lease right-of-use assets | $ 29 | $ 87 |
Finance Lease, Right-of-Use Asset, balance sheet location | Land, premises and equipment, net | Land, premises and equipment, net |
Lease right-of-use assets | $ 3,468 | $ 3,814 |
Operating lease liabilities | 3,856 | 4,275 |
Finance lease liabilities | $ 83 | $ 203 |
Finance lease liabilities, balance sheet location | Long-term debt | Long-term debt |
Lease liabilities | $ 3,939 | $ 4,478 |
Leases - Weighted-average remai
Leases - Weighted-average remaining lease term and average discount rate (Details) - item | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Leases | ||
Minimum number of options to renew lease agreements | 1 | |
Weighted-average remaining lease term, Operating leases | 4 years 3 months 18 days | 3 years 4 months 24 days |
Weighted-average remaining lease term, Finance leases | 3 months 18 days | 9 months 18 days |
Weighted-average discount rate, Operating leases | 2.80% | 2.50% |
Weighted-average discount rate, Finance leases | 7.80% | 7.80% |
Leases - Lease costs and other
Leases - Lease costs and other lease information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Lease costs | ||||
Operating lease cost | $ 414 | $ 492 | $ 825 | $ 988 |
Variable lease cost | 150 | 158 | 363 | 391 |
Short-term lease cost | 43 | 46 | 88 | 83 |
Finance lease cost | ||||
Interest on lease liabilities | 1 | 7 | 5 | 15 |
Amortization of right-of-use assets | 29 | 29 | 58 | 58 |
Sublease Income | (59) | (52) | (116) | (112) |
Net lease cost | 578 | 680 | 1,223 | 1,423 |
Cash paid for amounts included in the measurement of lease liabilities operating cash flows from operating leases | $ 393 | $ 474 | $ 784 | $ 961 |
Leases - Future minimum payment
Leases - Future minimum payments for finance and operating leases (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Finance leases | ||
June 30, 2023 | $ 84 | |
Total future minimum lease payments | 84 | |
Amounts representing interest | (1) | |
Total finance lease liabilities | 83 | $ 203 |
Operating leases | ||
June 30, 2023 | 1,644 | |
June 30, 2024 | 932 | |
June 30, 2025 | 467 | |
June 30, 2026 | 375 | |
June 30, 2027 | 252 | |
Thereafter | 511 | |
Total future minimum lease payments | 4,181 | |
Amounts representing interest | (325) | |
Total operating lease liabilities | $ 3,856 | $ 4,275 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Deposits. | ||
Noninterest-bearing | $ 764,808 | $ 938,840 |
Interest-bearing demand | 642,641 | 714,669 |
Savings accounts | 97,227 | 96,825 |
Money market savings | 914,423 | 937,305 |
Time deposits | 200,451 | 232,912 |
Total interest-bearing | 1,854,742 | 1,981,711 |
Total deposits | $ 2,619,550 | $ 2,920,551 |
Short-Term Borrowings (Details)
Short-Term Borrowings (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | |
Short-term borrowings | ||
Balance as of end of period | $ 242,350 | $ 242,350 |
Federal Funds Purchased | ||
Short-term borrowings | ||
Balance as of end of period | 117,350 | 117,350 |
Average daily balance | 81,506 | 40,978 |
Maximum month-end balance | $ 117,350 | $ 117,350 |
During period | 1.18% | 1.18% |
End of period | 1.44% | 1.44% |
FHLB Short-term advances | ||
Short-term borrowings | ||
Balance as of end of period | $ 125,000 | $ 125,000 |
Average daily balance | 9,615 | 4,834 |
Maximum month-end balance | $ 125,000 | $ 125,000 |
During period | 1.59% | 1.59% |
End of period | 1.80% | 1.80% |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Long-Term Debt | ||
Face Value | $ 63,010 | $ 63,010 |
Carrying Amount | 58,870 | 58,933 |
Subordinated notes payable | ||
Long-Term Debt | ||
Face Value | 50,000 | 50,000 |
Carrying Amount | $ 50,000 | $ 50,000 |
Fixed interest rate | 3.50% | 3.50% |
Junior subordinated debenture (Trust I) | ||
Long-Term Debt | ||
Face Value | $ 4,124 | $ 4,124 |
Carrying Amount | $ 3,515 | $ 3,492 |
Period End Interest Rate | 5.30% | 3.32% |
Junior subordinated debenture (Trust I) | Three - month LIBOR | ||
Long-Term Debt | ||
Interest Rate | 3.10% | 3.10% |
Junior subordinated debenture (Trust II) | ||
Long-Term Debt | ||
Face Value | $ 6,186 | $ 6,186 |
Carrying Amount | $ 5,272 | $ 5,238 |
Period End Interest Rate | 3.63% | 2% |
Junior subordinated debenture (Trust II) | Three - month LIBOR | ||
Long-Term Debt | ||
Interest Rate | 1.80% | 1.80% |
Finance lease liability | ||
Long-Term Debt | ||
Face Value | $ 2,700 | $ 2,700 |
Carrying Amount | $ 83 | $ 203 |
Fixed interest rate | 7.81% | 7.81% |
Financial Instruments with Of_3
Financial Instruments with Off-Balance Sheet Risk (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Financial Instruments with Off Balance Sheet Risk | ||
Amount of credit risk | $ 646,732 | $ 678,644 |
Commitments to extend credit | ||
Financial Instruments with Off Balance Sheet Risk | ||
Amount of credit risk | 635,320 | 668,115 |
Standby letters of credit | ||
Financial Instruments with Off Balance Sheet Risk | ||
Amount of credit risk | $ 11,412 | $ 10,529 |
Financial Instruments with Off
Financial Instruments with Off Balance Sheet Risk - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Letter of credit with FHLB | ||
Financial Instruments with Off Balance Sheet Risk | ||
Outstanding letters of credit | $ 150 | $ 150 |
Letter of credit with Bank of North Dakota | ||
Financial Instruments with Off Balance Sheet Risk | ||
Outstanding letters of credit | 0 | 0 |
Collateralized loans | $ 237,600 | $ 229,700 |
Share-Based Compensation - Plan
Share-Based Compensation - Plan Information (Details) - 2019 Equity Incentive Plan - shares | 6 Months Ended | |
Jun. 30, 2022 | May 06, 2019 | |
Share-Based Compensation | ||
Awards authorized | 1,100,000 | |
Restricted stock awards | ||
Share-Based Compensation | ||
Awards issued | 948,428 |
Share-Based Compensation - Acti
Share-Based Compensation - Activity in stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Additional disclosures | ||||
Compensation expense | $ 662 | $ 761 | $ 1,000 | $ 1,300 |
Restricted Stock Awards and Units. | ||||
Restricted Stock Awards and Units | ||||
Outstanding at beginning of period | 260,850 | 325,030 | ||
Granted | 94,592 | 66,664 | ||
Vested | (107,113) | (88,382) | ||
Forfeited or cancelled | (10,624) | |||
Outstanding at end of period | 237,705 | 303,312 | 237,705 | 303,312 |
Weighted Average Grant Date Fair Value | ||||
Outstanding at beginning of period | $ 21.04 | $ 19.48 | ||
Granted | 19.01 | 26.63 | ||
Vested | 19.19 | 21.38 | ||
Forfeited or cancelled | 23.71 | |||
Outstanding at end of period | $ 20.95 | $ 20.49 | $ 20.95 | $ 20.49 |
Additional disclosures | ||||
Unrecognized compensation cost | $ 3,100 | $ 3,100 | ||
Weighted average period | 2 years 10 months 24 days |
Income Taxes - Reconciliation b
Income Taxes - Reconciliation between applicable income taxes and statutory federal tax rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Tax amount | ||||
Taxes at statutory federal income tax rate | $ 2,524 | $ 3,221 | $ 5,269 | $ 7,395 |
Tax exempt income | (122) | (148) | (239) | (301) |
State income taxes, net of federal benefits | 531 | 663 | 1,109 | 1,516 |
Nondeductible items and other | (208) | (92) | (526) | (304) |
Applicable income taxes | $ 2,725 | $ 3,644 | $ 5,613 | $ 8,306 |
Percentage of pretax income | ||||
Taxes at statutory federal income tax rate (as percentage) | 21% | 21% | 21% | 21% |
Tax exempt income (as percentage) | (1.00%) | (1.00%) | (1.00%) | (0.90%) |
State income taxes, net of federal benefits (as percentage) | 4.40% | 4.30% | 4.40% | 4.30% |
Nondeductible items and other (as percentage) | (1.70%) | (0.60%) | (2.10%) | (0.90%) |
Applicable income taxes (as percentage) | 22.70% | 23.70% | 22.30% | 23.50% |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Income Taxes | |
Unrecognized tax benefits | $ 0 |
Tax Credit Investments - Tax cr
Tax Credit Investments - Tax credits (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Tax Credit Investments [Line items] | ||
Investment | $ 17,906 | $ 7,906 |
Unfunded Commitment | 16,402 | 6,999 |
Proportional amortization | ||
Tax Credit Investments [Line items] | ||
Investment | 17,906 | 7,906 |
Unfunded Commitment | $ 16,402 | $ 6,999 |
Tax Credit Investments - Amorti
Tax Credit Investments - Amortization expense and tax benefit recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Tax Credit Investments [Line items] | ||||
Intangible amortization expense | $ 1,053 | $ 1,088 | $ 2,106 | $ 2,239 |
Income tax benefit | (2,725) | $ (3,644) | (5,613) | $ (8,306) |
Housing projects | ||||
Tax Credit Investments [Line items] | ||||
Intangible amortization expense | 111 | 111 | ||
Income tax benefit | (156) | (156) | ||
Low income housing tax credit | Housing projects | ||||
Tax Credit Investments [Line items] | ||||
Intangible amortization expense | 111 | 111 | ||
Income tax benefit | $ (156) | $ (156) |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) item segment | Jun. 30, 2021 USD ($) | |
Segment Reporting | ||||
Number of operating segments | segment | 4 | |||
Number of banking offices | item | 14 | |||
Key metrics related to segments | ||||
Net interest income | $ 22,776 | $ 21,140 | $ 44,449 | $ 43,178 |
Noninterest income | 29,226 | 36,748 | 58,696 | 77,629 |
Noninterest expense | 39,984 | 42,550 | 78,055 | 85,592 |
Net income before taxes | 12,018 | 15,338 | 25,090 | 35,215 |
Corporate Administration | ||||
Key metrics related to segments | ||||
Net interest income | (561) | (538) | (1,122) | (826) |
Noninterest income | 6 | (14) | 35 | (28) |
Noninterest expense | 10,928 | 8,859 | 21,015 | 17,517 |
Net income before taxes | (11,483) | (9,411) | (22,102) | (18,371) |
Banking | Operating Segments | ||||
Key metrics related to segments | ||||
Net interest income | 22,779 | 21,188 | 44,304 | 43,068 |
Noninterest income | 1,341 | 1,466 | 2,879 | 2,988 |
Noninterest expense | 15,619 | 10,914 | 28,313 | 21,998 |
Net income before taxes | 8,501 | 11,740 | 18,870 | 24,058 |
Retirement and Benefit Services | Operating Segments | ||||
Key metrics related to segments | ||||
Noninterest income | 16,293 | 17,871 | 33,939 | 35,126 |
Noninterest expense | 6,598 | 9,988 | 15,030 | 20,100 |
Net income before taxes | 9,695 | 7,883 | 18,909 | 15,026 |
Wealth Management | Operating Segments | ||||
Key metrics related to segments | ||||
Noninterest income | 5,548 | 5,138 | 10,874 | 10,124 |
Noninterest expense | 1,630 | 2,128 | 3,468 | 4,463 |
Net income before taxes | 3,918 | 3,010 | 7,406 | 5,661 |
Mortgage | Operating Segments | ||||
Key metrics related to segments | ||||
Net interest income | 558 | 490 | 1,267 | 936 |
Noninterest income | 6,038 | 12,287 | 10,969 | 29,419 |
Noninterest expense | 5,209 | 10,661 | 10,229 | 21,514 |
Net income before taxes | $ 1,387 | $ 2,116 | $ 2,007 | $ 8,841 |
Earnings Per Share - Two-class
Earnings Per Share - Two-class method (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Earnings Per Share | ||||
Net Income | $ 9,293 | $ 11,694 | $ 19,477 | $ 26,909 |
Dividends and undistributed earnings allocated to participating securities | 101 | 179 | 225 | 432 |
Net income available to common shareholders | $ 9,192 | $ 11,515 | $ 19,252 | $ 26,477 |
Weighted-average common shares outstanding for basic earnings per share | 17,297 | 17,194 | 17,271 | 17,170 |
Dilutive effect of stock-based awards | 235 | 303 | 246 | 312 |
Weighted-average common shares outstanding for diluted earnings per share | 17,532 | 17,497 | 17,517 | 17,482 |
Earnings per common share: | ||||
Basic earnings per common share | $ 0.53 | $ 0.67 | $ 1.11 | $ 1.54 |
Diluted earnings per common share | $ 0.52 | $ 0.66 | $ 1.10 | $ 1.52 |
Derivative Instruments (Details
Derivative Instruments (Details) - Not designated as hedging - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Derivative Instruments | ||
Fair Value, Derivative Assets | $ 7,180 | $ 3,397 |
Fair Value, Derivative Liabilities | 4,851 | 1,368 |
Notional Amount, Derivative Assets | 227,564 | 207,560 |
Notional Amount, Derivative Liabilities | 44,133 | 44,826 |
Interest rate swaps | Other assets | ||
Derivative Instruments | ||
Fair Value, Derivative Assets | 4,850 | 1,366 |
Notional Amount, Derivative Assets | 44,133 | 44,826 |
Interest rate swaps | Accrued expenses and other liabilities | ||
Derivative Instruments | ||
Fair Value, Derivative Liabilities | 4,851 | 1,368 |
Notional Amount, Derivative Liabilities | 44,133 | 44,826 |
Interest rate lock commitments | Other assets | ||
Derivative Instruments | ||
Fair Value, Derivative Assets | 1,445 | 1,507 |
Notional Amount, Derivative Assets | 53,871 | 52,316 |
Forward loan sales commitments | Other assets | ||
Derivative Instruments | ||
Fair Value, Derivative Assets | 542 | 490 |
Notional Amount, Derivative Assets | 16,560 | 13,418 |
TBA mortgage backed securities | Other assets | ||
Derivative Instruments | ||
Fair Value, Derivative Assets | 343 | 34 |
Notional Amount, Derivative Assets | $ 113,000 | $ 97,000 |
Derivative Instruments - Gain (
Derivative Instruments - Gain (loss) recognized on derivatives instruments (Details) - Not designated as hedging - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Gain (loss) recognized on derivative instruments | ||||
Total gain/(loss) from derivative instruments | $ 2,352 | $ (2,593) | $ 3,655 | $ (1,510) |
Interest rate swaps | Other noninterest income | ||||
Gain (loss) recognized on derivative instruments | ||||
Total gain/(loss) from derivative instruments | 1 | (1) | 1 | 1 |
Interest rate lock commitments | Mortgage banking | ||||
Gain (loss) recognized on derivative instruments | ||||
Total gain/(loss) from derivative instruments | 563 | 740 | (147) | (5,505) |
Forward loan sales commitments | Mortgage banking | ||||
Gain (loss) recognized on derivative instruments | ||||
Total gain/(loss) from derivative instruments | 542 | 73 | 52 | (1,562) |
TBA mortgage backed securities | Mortgage banking | ||||
Gain (loss) recognized on derivative instruments | ||||
Total gain/(loss) from derivative instruments | $ 1,246 | $ (3,405) | $ 3,749 | $ 5,556 |
Derivative Instruments - Collat
Derivative Instruments - Collateral (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Derivative Instruments | ||
Collateral held by third parties | $ 19 | $ 19 |
Regulatory Matters (Details)
Regulatory Matters (Details) $ in Thousands | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Common equity tier 1 capital to risk weighted assets | ||
Actual (Amount) | $ 331,692 | $ 314,628 |
Requirements for Capital Adequacy Purposes (Amount) | $ 105,214 | $ 96,647 |
Actual (Ratio) | 0.1419 | 0.1465 |
Requirements for Capital Adequacy Purposes (Ratio) | 0.0450 | 0.0450 |
Tier 1 capital to risk weighted assets | ||
Actual (Amount) | $ 340,479 | $ 323,358 |
Requirements for Capital Adequacy Purposes (Amount) | $ 140,285 | $ 128,862 |
Actual (Ratio) | 0.1456 | 0.1506 |
Requirements for Capital Adequacy Purposes (Ratio) | 0.0600 | 0.0600 |
Total capital to risk weighted assets | ||
Actual (Amount) | $ 419,279 | $ 400,263 |
Requirements for Capital Adequacy Purposes (Amount) | $ 187,047 | $ 171,816 |
Actual (Ratio) | 0.1795 | 0.1864 |
Requirements for Capital Adequacy Purposes (Ratio) | 0.0800 | 0.0800 |
Tier 1 capital to average assets | ||
Actual (Amount) | $ 340,479 | $ 323,358 |
Requirements for Capital Adequacy Purposes (Amount) | $ 126,051 | $ 132,112 |
Actual (Ratio) | 0.1080 | 0.0979 |
Requirements for Capital Adequacy Purposes (Ratio) | 0.0400 | 0.0400 |
Bank | ||
Common equity tier 1 capital to risk weighted assets | ||
Actual (Amount) | $ 318,704 | $ 297,453 |
Requirements for Capital Adequacy Purposes (Amount) | 105,115 | 96,538 |
Minimum to be Well Capitalized Under Prompt Corrective Action (Amount) | $ 151,833 | $ 139,444 |
Actual (Ratio) | 0.1364 | 0.1387 |
Requirements for Capital Adequacy Purposes (Ratio) | 0.0450 | 0.0450 |
Minimum to be Well Capitalized Under Prompt Corrective Action (Ratio) | 0.0650 | 0.0650 |
Tier 1 capital to risk weighted assets | ||
Actual (Amount) | $ 318,704 | $ 297,453 |
Requirements for Capital Adequacy Purposes (Amount) | 140,154 | 128,718 |
Minimum to be Well Capitalized Under Prompt Corrective Action (Amount) | $ 186,872 | $ 171,624 |
Actual (Ratio) | 0.1364 | 0.1387 |
Requirements for Capital Adequacy Purposes (Ratio) | 0.0600 | 0.0600 |
Minimum to be Well Capitalized Under Prompt Corrective Action (Ratio) | 0.0800 | 0.0800 |
Total capital to risk weighted assets | ||
Actual (Amount) | $ 347,929 | $ 324,328 |
Requirements for Capital Adequacy Purposes (Amount) | 186,872 | 171,624 |
Minimum to be Well Capitalized Under Prompt Corrective Action (Amount) | $ 233,590 | $ 214,530 |
Actual (Ratio) | 0.1489 | 0.1512 |
Requirements for Capital Adequacy Purposes (Ratio) | 0.0800 | 0.0800 |
Minimum to be Well Capitalized Under Prompt Corrective Action (Ratio) | 0.1000 | 0.1000 |
Tier 1 capital to average assets | ||
Actual (Amount) | $ 318,704 | $ 297,453 |
Requirements for Capital Adequacy Purposes (Amount) | 125,962 | 132,039 |
Minimum to be Well Capitalized Under Prompt Corrective Action (Amount) | $ 157,453 | $ 165,049 |
Actual (Ratio) | 0.1012 | 0.0901 |
Requirements for Capital Adequacy Purposes (Ratio) | 0.0400 | 0.0400 |
Minimum to be Well Capitalized Under Prompt Corrective Action (Ratio) | 0.0500 | 0.0500 |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - shares | 6 Months Ended | |
Feb. 18, 2021 | Jun. 30, 2022 | |
Stock Repurchase Program | ||
Number of shares authorized for repurchase | 770,000 | |
Repurchase program period | 36 months | |
Shares repurchased | 0 |
Fair Value of Assets and Liab_3
Fair Value of Assets and Liabilities - Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | $ 798,797 | $ 853,649 |
Mortgage backed securities - Residential agency | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 652,507 | 707,157 |
Mortgage backed securities - Commercial | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 76,130 | 90,913 |
Asset backed securities | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 40 | 54 |
Corporate bonds | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 66,411 | 50,422 |
Recurring | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 798,797 | 853,649 |
Derivative instruments | 7,180 | 3,397 |
Derivative liabilities | 4,851 | 1,368 |
Recurring | U.S. treasury and government agencies | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 3,709 | 5,103 |
Recurring | Mortgage backed securities - Residential agency | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 652,507 | 707,157 |
Recurring | Mortgage backed securities - Commercial | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 76,130 | 90,913 |
Recurring | Asset backed securities | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 40 | 54 |
Recurring | Corporate bonds | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 66,411 | 50,422 |
Recurring | Level 2 | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 798,797 | 853,649 |
Derivative instruments | 7,180 | 3,397 |
Derivative liabilities | 4,851 | 1,368 |
Recurring | Level 2 | U.S. treasury and government agencies | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 3,709 | 5,103 |
Recurring | Level 2 | Mortgage backed securities - Residential agency | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 652,507 | 707,157 |
Recurring | Level 2 | Mortgage backed securities - Commercial | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 76,130 | 90,913 |
Recurring | Level 2 | Asset backed securities | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 40 | 54 |
Recurring | Level 2 | Corporate bonds | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | $ 66,411 | $ 50,422 |
Fair Value of Assets and Liab_4
Fair Value of Assets and Liabilities - Nonrecurring Basis (Details) - Non recurring - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Impaired loans | $ 3,854 | $ 2,469 |
Foreclosed assets | 860 | 885 |
Servicing rights | 2,064 | 1,880 |
Loans held for sale | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Loans held for sale | 54,363 | 46,490 |
Impaired loans | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Net impairment | 858 | 283 |
Level 2 | Loans held for sale | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Loans held for sale | 54,363 | 46,490 |
Level 3 | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Impaired loans | 3,854 | 2,469 |
Foreclosed assets | 860 | 885 |
Servicing rights | $ 2,064 | $ 1,880 |
Fair Value of Assets and Liab_5
Fair Value of Assets and Liabilities - Valuation Technique (Details) - Level 3 $ in Thousands | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Impaired loans | Appraisal value | Property specific adjustment | ||
Valuation techniques and significant unobservable inputs | ||
Impaired loans | $ 3,854 | $ 2,469 |
Foreclosed assets | Appraisal value | Property specific adjustment | ||
Valuation techniques and significant unobservable inputs | ||
Foreclosed assets | $ 860 | $ 885 |
Servicing rights | ||
Valuation techniques and significant unobservable inputs | ||
Loans Held-for-sale, Valuation Technique [Extensible List] | us-gaap:ValuationTechniqueDiscountedCashFlowMember | us-gaap:ValuationTechniqueDiscountedCashFlowMember |
Servicing rights | Prepayment speed assumptions | ||
Valuation techniques and significant unobservable inputs | ||
Servicing rights | $ 2,064 | $ 1,880 |
Servicing rights | Prepayment speed assumptions | Minimum | ||
Valuation techniques and significant unobservable inputs | ||
Servicing Asset, Measurement Input | 109 | 161 |
Servicing rights | Prepayment speed assumptions | Maximum | ||
Valuation techniques and significant unobservable inputs | ||
Servicing Asset, Measurement Input | 155 | 327 |
Servicing rights | Prepayment speed assumptions | Weighted average | ||
Valuation techniques and significant unobservable inputs | ||
Servicing Asset, Measurement Input | 119 | 237 |
Servicing rights | Discount rate | ||
Valuation techniques and significant unobservable inputs | ||
Servicing Asset, Measurement Input | 10 | 9.5 |
Servicing rights | Discount rate | Weighted average | ||
Valuation techniques and significant unobservable inputs | ||
Servicing Asset, Measurement Input | 10 | 9.5 |
Fair Value of Assets and Liab_6
Fair Value of Assets and Liabilities - Off-Balance Sheet Credit-Related Commitments (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Financial Assets | ||
Investment securities held-to-maturity | $ 293,949 | $ 349,677 |
Carrying Amount | ||
Financial Assets | ||
Cash and cash equivalents | 37,043 | 242,311 |
Investment securities held-to-maturity | 331,741 | 352,061 |
Loans, net | 1,858,870 | 1,726,448 |
Accrued interest receivable | 9,155 | 8,537 |
Bank-owned life insurance | 33,564 | 33,156 |
Financial Liabilities | ||
Noninterest-bearing deposits | 764,808 | 938,840 |
Interest-bearing deposits | 1,654,291 | 1,748,799 |
Time deposits | 200,451 | 232,912 |
Short-term borrowings | 242,350 | |
Long-term debt | 58,870 | 58,933 |
Accrued interest payable | 802 | 1,674 |
Estimated Fair Value | ||
Financial Assets | ||
Cash and cash equivalents | 37,043 | 242,311 |
Investment securities held-to-maturity | 293,949 | 349,677 |
Loans, net | 1,848,251 | 1,760,784 |
Accrued interest receivable | 9,155 | 8,537 |
Bank-owned life insurance | 33,564 | 33,156 |
Financial Liabilities | ||
Noninterest-bearing deposits | 764,808 | 938,840 |
Interest-bearing deposits | 1,654,291 | 1,748,799 |
Time deposits | 198,278 | 232,970 |
Short-term borrowings | 242,350 | |
Long-term debt | 86,271 | 57,772 |
Accrued interest payable | 802 | 1,674 |
Level 1 | Estimated Fair Value | ||
Financial Assets | ||
Cash and cash equivalents | 37,043 | 242,311 |
Accrued interest receivable | 9,155 | 8,537 |
Financial Liabilities | ||
Short-term borrowings | 242,350 | |
Accrued interest payable | 802 | 1,674 |
Level 2 | Estimated Fair Value | ||
Financial Assets | ||
Investment securities held-to-maturity | 293,949 | 349,677 |
Bank-owned life insurance | 33,564 | 33,156 |
Financial Liabilities | ||
Noninterest-bearing deposits | 764,808 | 938,840 |
Interest-bearing deposits | 1,654,291 | 1,748,799 |
Long-term debt | 86,271 | 57,772 |
Level 3 | Estimated Fair Value | ||
Financial Assets | ||
Loans, net | 1,848,251 | 1,760,784 |
Financial Liabilities | ||
Time deposits | $ 198,278 | $ 232,970 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Thousands | Jul. 01, 2022 | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) |
Subsequent Events | |||||||
Total assets | $ 3,295,065 | $ 3,392,691 | |||||
Loans | 1,890,243 | 1,758,020 | |||||
Deposits | 2,619,550 | 2,920,551 | |||||
Total stockholders' equity | 307,158 | $ 328,505 | $ 359,403 | $ 344,391 | $ 329,234 | $ 330,163 | |
MPHX | |||||||
Subsequent Events | |||||||
Total assets | 399,000 | ||||||
Loans | 277,600 | ||||||
Deposits | 354,500 | ||||||
Total stockholders' equity | $ 43,800 | ||||||
Subsequent Events | MPHX | |||||||
Subsequent Events | |||||||
Merger common share exchange ratio | 0.74 |