Alerus Financial (ALRS) 10-Q3 Nov 222022 Q3 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2022	Oct. 31, 2022
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 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		19,987,274
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Entity Central Index Key	0000903419
Amendment Flag	false

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Assets
Cash and cash equivalents	$ 54,167	$ 242,311
Available-for-sale, at fair value	729,110	853,649
Held-to-maturity, at carrying value	326,410	352,061
Fed funds sold	14,124
Loans held for sale	26,129	46,490
Loans	2,318,231	1,758,020
Allowance for loan losses	(30,968)	(31,572)
Net loans	2,287,263	1,726,448
Land, premises and equipment, net	17,067	18,370
Operating lease right-of-use assets	3,481	3,727
Accrued interest receivable	11,256	8,537
Bank-owned life insurance	33,777	33,156
Goodwill	46,060	31,490
Other intangible assets	23,779	20,250
Servicing rights	2,780	1,880
Deferred income taxes, net	45,889	11,614
Other assets	69,961	42,708
Total assets	3,691,253	3,392,691
Deposits
Noninterest-bearing	905,228	938,840
Interest-bearing	2,056,583	1,981,711
Total deposits	2,961,811	2,920,551
Short-term borrowings	253,830
Long-term debt	58,836	58,933
Operating lease liabilities	3,802	4,275
Accrued expenses and other liabilities	68,135	49,529
Total liabilities	3,346,414	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: 19,987,274 and 17,212,588 issued and outstanding	19,987	17,213
Additional paid-in capital	154,629	92,878
Retained earnings	273,132	253,567
Accumulated other comprehensive income (loss)	(102,909)	(4,255)
Total stockholders' equity	344,839	359,403
Total liabilities and stockholders' equity	$ 3,691,253	$ 3,392,691

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 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	19,987,274	17,212,588
Common stock, shares outstanding	19,987,274	17,212,588

Consolidated Statements of Inco

Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Interest Income
Loans, including fees	$ 25,379	$ 18,888	$ 60,659	$ 58,779
Taxable	5,939	3,249	17,447	8,547
Exempt from federal income taxes	209	225	638	694
Other	748	185	1,021	432
Total interest income	32,275	22,547	79,765	68,452
Interest Expense
Deposits	1,852	880	3,494	2,781
Short-term borrowings	1,516		1,794
Long-term debt	591	535	1,712	1,361
Total interest expense	3,959	1,415	7,000	4,142
Net interest income	28,316	21,132	72,765	64,310
Provision for loan losses		(2,000)		(2,000)
Net interest income after provision for loan losses	28,316	23,132	72,765	66,310
Noninterest Income
Mortgage banking	3,782	11,116	14,751	40,535
Net gains (losses) on investment securities		11		125
Other	1,402	1,230	3,541	3,408
Total noninterest income	27,010	36,040	85,706	113,669
Noninterest Expense
Compensation	21,168	23,291	61,467	71,298
Employee taxes and benefits	5,079	5,058	17,028	16,443
Occupancy and equipment expense	1,925	2,063	5,713	6,212
Business services, software and technology expense	5,373	5,332	15,082	15,266
Intangible amortization expense	1,324	1,088	3,430	3,327
Professional fees and assessments	3,126	1,503	6,913	4,484
Marketing and business development	890	865	2,304	2,310
Supplies and postage	588	549	1,806	1,583
Travel	291	174	826	236
Mortgage and lending expenses	409	1,231	1,577	3,762
Other	2,594	887	4,676	2,712
Total noninterest expense	42,767	42,041	120,822	127,633
Income before income taxes	12,559	17,131	37,649	52,346
Income tax expense	2,940	4,064	8,553	12,370
Net income	$ 9,619	$ 13,067	$ 29,096	$ 39,976
Per Common Share Data
Basic earnings per common share	$ 0.48	$ 0.75	$ 1.58	$ 2.29
Diluted earnings per common share	0.47	0.74	1.56	2.26
Dividends declared per common share	$ 0.18	$ 0.16	$ 0.52	$ 0.47
Average common shares outstanding	19,987	17,205	18,186	17,182
Diluted average common shares outstanding	20,230	17,499	18,431	17,488
Retirement and Benefit Services
Noninterest Income
Revenue	$ 16,597	$ 18,031	$ 50,536	$ 53,157
Wealth Management
Noninterest Income
Revenue	4,852	5,295	15,726	15,419
Deposit Account
Noninterest Income
Revenue	$ 377	$ 357	$ 1,152	$ 1,025

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Consolidated Statements of Comprehensive Income (Unaudited)
Net Income	$ 9,619	$ 13,067	$ 29,096	$ 39,976
Other Comprehensive Income (Loss), Net of Tax
Unrealized gains (losses) on available-for-sale securities	(43,305)	(2,496)	(131,424)	(13,101)
Accretion of (gains) losses on debt securities reclassified to held-to-maturity	(91)	(106)	(290)	(221)
Reclassification adjustment for losses (gains) realized in income		(11)		(125)
Total other comprehensive income (loss), before tax	(43,396)	(2,613)	(131,714)	(13,447)
Income tax expense (benefit) related to items of other comprehensive income	(10,892)	(656)	(33,060)	(3,375)
Other comprehensive income (loss), net of tax	(32,504)	(1,957)	(98,654)	(10,072)
Total comprehensive income (loss)	$ (22,885)	$ 11,110	$ (69,558)	$ 29,904

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			39,976		39,976
Other comprehensive income (loss)				(10,072)	(10,072)
Common stock repurchased	(18)	(157)	(346)		(521)
Common stock dividends			(8,155)		(8,155)
Share-based compensation expense	8	1,796			1,804
Vesting of restricted stock	93	(93)
Ending balance at Sep. 30, 2021	17,208	91,783	243,638	566	353,195
Beginning balance at Jun. 30, 2021	17,198	91,273	233,397	2,523	344,391
Net income			13,067		13,067
Other comprehensive income (loss)				(1,957)	(1,957)
Common stock repurchased	(2)	(23)	(50)		(75)
Common stock dividends			(2,776)		(2,776)
Share-based compensation expense		545			545
Vesting of restricted stock	12	(12)
Ending balance at Sep. 30, 2021	17,208	91,783	243,638	566	353,195
Beginning balance at Dec. 31, 2021	17,213	92,878	253,567	(4,255)	359,403
Net income			29,096		29,096
Other comprehensive income (loss)				(98,654)	(98,654)
Common stock repurchased	(24)	(673)			(697)
Common stock dividends			(9,531)		(9,531)
Stock issuance from the acquisition of Metro Phoenix Bank	2,681	61,149			63,830
Share-based compensation expense	10	1,382			1,392
Vesting of restricted stock	107	(107)
Ending balance at Sep. 30, 2022	19,987	154,629	273,132	(102,909)	344,839
Beginning balance at Jun. 30, 2022	17,306	93,129	267,128	(70,405)	307,158
Net income			9,619		9,619
Other comprehensive income (loss)				(32,504)	(32,504)
Common stock dividends			(3,615)		(3,615)
Stock issuance from the acquisition of Metro Phoenix Bank	2,681	61,149			63,830
Share-based compensation expense		351			351
Ending balance at Sep. 30, 2022	$ 19,987	$ 154,629	$ 273,132	$ (102,909)	$ 344,839

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Operating Activities
Net income	$ 29,096	$ 39,976
Adjustments to reconcile net income to net cash provided (used) by operating activities
Deferred income taxes	(1,215)	1,176
Provision for loan losses		(2,000)
Depreciation and amortization	6,116	6,726
Amortization and accretion of premiums/discounts on investment securities	2,778	2,506
Amortization of operating lease right-of-use assets	(65)	(40)
Stock-based compensation	1,392	1,804
Increase in value of bank-owned life insurance	(621)	(591)
Realized loss (gain) on sale of fixed assets	(33)	(62)
Realized loss (gain) on derivative instruments	1,031	6,612
Realized loss (gain) on loans sold	(10,062)	(39,940)
Realized loss (gain) on sale of foreclosed assets	(9)	(203)
Realized loss (gain) on sale of investment securities		(125)
Realized loss (gain) on servicing rights	(683)	(369)
Net change in:
Loans held for sale	30,193	101,482
Accrued interest receivable	(1,628)	826
Other assets	(13,903)	(1,951)
Accrued expenses and other liabilities	12,348	1,913
Net cash provided (used) by operating activities	54,735	117,740
Investing Activities
Proceeds from sales or calls of investment securities available-for-sale		13,189
Proceeds from maturities of investment securities available-for-sale	88,417	91,240
Purchases of investment securities available-for-sale	(96,968)	(331,785)
Proceeds from sales or calls of investment securities held-to-maturity	827	1,763
Proceeds from maturities of investment securities held-to-maturity	23,422	2,681
Purchases of investment securities held-to-maturity		(218,443)
Net (increase) decrease in loans	(290,565)	177,675
Net cash received for business combinations	101,585
Purchases of premises and equipment	(1,081)	(845)
Proceeds from sales of foreclosed assets	143	539
Net cash provided (used) by investing activities	(174,220)	(263,986)
Financing Activities
Net increase (decrease) in deposits	(312,425)	141,095
Net increase (decrease) in short-term borrowings	253,830
Repayments of long-term debt	(182)	(49,861)
Proceeds from the issuance of subordinated debt		50,000
Cash dividends paid on common stock	(9,185)	(7,975)
Repurchase of common stock	(697)	(521)
Net cash provided (used) by financing activities	(68,659)	132,738
Net change in cash and cash equivalents	(188,144)	(13,508)
Cash and cash equivalents at beginning of period	242,311	172,962
Cash and cash equivalents at end of period	54,167	159,454
Cash paid for:
Interest	7,269	3,498
Income taxes	8,713	12,075
Non-cash information
Loan collateral transferred to foreclosed assets	153	1,135
Unrealized gain (loss) on investment securities available-for-sale	(98,364)	(9,851)
Accretion of unrealized (gain) loss on investment securities held-to-maturity	(290)	(221)
Investment securities transferred to held-to-maturity		$ 149,191
Right-of-use assets obtained in exchange for new operating leases	1,452
Noncash assets acquired	297,667
Liabilities assumed	(354,358)
Issuance of stock for the acquisition of Metro Phoenix Bank	(64,019)
Net noncash acquired	$ (120,710)

Significant Accounting Policies

Significant Accounting Policies	9 Months Ended
Significant Accounting Policies	Sep. 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. 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	9 Months Ended
Recent Accounting Pronouncements	Sep. 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 September 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.

Business Combinations

Business Combinations	9 Months Ended
Business Combinations	Sep. 30, 2022
Business Combinations
Business Combinations	NOTE 3 Business Combinations On July 1, 2022, the Company acquired MPB BHC, Inc, the bank holding company for Metro Phoenix Bank located in Phoenix, Arizona, for a total purchase price of $64.0 million in a stock-for-stock transaction. As part of the transaction, $7.6 million was allocated to a customer deposit intangible and $14.7 million to goodwill. The purchase consisted of $270.4 million in loans and $353.7 million in deposits. The purchased assets and assumed liabilities were recorded at their respective acquisition date estimate fair values indicated in the following table: As recorded by Preliminary Fair Value As recorded by (dollars in thousands) Metro Phoenix Bank Adjustments the Company Assets Cash and cash equivalents $ 101,819 $ (45) $ 101,774 Fed funds sold 18,936 — 18,936 Core deposit intangible — 7,592 7,592 Loans 273,843 (3,440) 270,403 Accrued interest receivable 1,091 — 1,091 Other assets 3,342 517 3,859 Total assets 399,031 4,624 403,655 Liabilities Deposits 354,529 (844) 353,685 Other liabilities 673 — 673 Total liabilities 355,202 (844) 354,358 Excess assets over liabilities $ 43,829 $ 5,468 49,297 Stock issued for MPB 64,019 Total goodwill recorded $ 14,722

Investment Securities

Investment Securities	9 Months Ended
Investment Securities	Sep. 30, 2022
Investment Securities
Investment Securities	NOTE 4 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 September 30, 2022 and December 31, 2021: September 30, 2022 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value Available-for-sale U.S. Treasury and agencies $ 3,826 $ 26 $ (19) $ 3,833 Mortgage backed securities Residential agency 721,170 6 (124,187) 596,989 Commercial 72,584 — (7,301) 65,283 Asset backed securities 35 — — 35 Corporate bonds 69,528 — (6,558) 62,970 Total available-for-sale investment securities 867,143 32 (138,065) 729,110 Held-to-maturity Obligations of state and political agencies 138,664 — (18,836) 119,828 Mortgage backed securities Residential agency 187,746 — (34,268) 153,478 Total held-to-maturity investment securities 326,410 — (53,104) 273,306 Total investment securities $ 1,193,553 $ 32 $ (191,169) $ 1,002,416 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 September 30, 2022 and December 31, 2021, were as follows: September 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 $ (19) $ 529 $ — $ — $ (19) $ 529 Mortgage backed securities Residential agency (60,983) 325,016 (63,204) 271,347 (124,187) 596,363 Commercial (5,425) 54,666 (1,876) 10,618 (7,301) 65,284 Asset backed securities — 22 — 2 — 24 Corporate bonds (6,558) 62,945 — — (6,558) 62,945 Total available-for-sale investment securities (72,985) 443,178 (65,080) 281,967 (138,065) 725,145 Held-to-maturity Obligations of state and political agencies (16,300) 94,902 (2,536) 24,926 (18,836) 119,828 Mortgage backed securities Residential agency — — (34,268) 153,478 (34,268) 153,478 Total held-to-maturity investment securities (16,300) 94,902 (36,804) 178,404 (53,104) 273,306 Total investment securities $ (89,285) $ 538,080 $ (101,884) $ 460,371 $ (191,169) $ 998,451 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 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 nine months ended September 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 September 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 $ 6,808 $ 6,742 $ 11 $ 11 Due after one year through five years 40,702 37,102 21,421 19,957 Due after five years through ten years 69,679 58,557 89,695 81,580 Due after 10 years 209,221 170,905 756,016 627,562 Total investment securities $ 326,410 $ 273,306 $ 867,143 $ 729,110 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 $264.1 million and $192.8 million were pledged as of September 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 nine months ended September 30, 2022 and 2021, are displayed in the table below: Three months ended Nine months ended September 30, September 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 nine months ended September 30, 2022 and 2021, are displayed in the table below: Three months ended Nine months ended September 30, September 30, (dollars in thousands) 2022 2021 2022 2021 Proceeds $ 101 $ 348 $ 827 $ 1,763 Realized gains — 11 — 11 Realized losses — — — — As of September 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: September 30, December 31, (dollars in thousands) 2022 2021 Federal Reserve $ 4,616 $ 2,675 FHLB 15,554 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 September 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 September 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	9 Months Ended
Loans and Allowance for Loan Losses	Sep. 30, 2022
Loans and Allowance for Loan Losses
Loans and Allowance for Loan Losses	NOTE 5 Loans and Allowance for Loan Losses The following table presents total loans outstanding, by portfolio segment, as of September 30, 2022 and December 31, 2021: September 30, December 31, (dollars in thousands) 2022 2021 Commercial Commercial and industrial (1) $ 564,655 $ 436,761 Real estate construction 89,215 40,619 Commercial real estate 819,068 598,893 Total commercial 1,472,938 1,076,273 Consumer Residential real estate first mortgage 649,818 510,716 Residential real estate junior lien 143,681 125,668 Other revolving and installment 51,794 45,363 Total consumer 845,293 681,747 Total loans $ 2,318,231 $ 1,758,020 (1) Included Paycheck Protection Program, or PPP, loans of $2.9 million at September 30, 2022 and $33.6 million at December 31, 2021. Total loans included net deferred loan fees and costs of $851 thousand and $231 thousand at September 30, 2022 and December 31, 2021, respectively. Deferred loan fees on PPP loans were $22 thousand at September 30, 2022 and $881 thousand at December 31, 2021. Unearned discounts associated with the acquisition of Metro Phoenix Bank totaled $8.0 million as of September 30, 2022. 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 September 30, 2022 and December 31, 2021: September 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 $ 561,865 $ 311 $ 1,000 $ 1,479 $ 564,655 Real estate construction 89,215 — — — 89,215 Commercial real estate 818,439 — — 629 819,068 Total commercial 1,469,519 311 1,000 2,108 1,472,938 Consumer Residential real estate first mortgage 645,896 1,923 — 1,999 649,818 Residential real estate junior lien 143,491 2 — 188 143,681 Other revolving and installment 51,601 185 — 8 51,794 Total consumer 840,988 2,110 — 2,195 845,293 Total loans $ 2,310,507 $ 2,421 $ 1,000 $ 4,303 $ 2,318,231 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 September 30, 2022 and December 31, 2021: September 30, 2022 Criticized Special (dollars in thousands) Pass Mention Substandard Doubtful Total Commercial Commercial and industrial $ 559,647 $ — $ 5,008 $ — $ 564,655 Real estate construction 89,215 — — — 89,215 Commercial real estate 809,910 3,840 5,318 — 819,068 Total commercial 1,458,772 3,840 10,326 — 1,472,938 Consumer Residential real estate first mortgage 647,517 64 2,237 — 649,818 Residential real estate junior lien 143,006 — 675 — 143,681 Other revolving and installment 51,786 — 8 — 51,794 Total consumer 842,309 64 2,920 — 845,293 Total loans $ 2,301,081 $ 3,904 $ 13,246 $ — $ 2,318,231 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 nine months ended September 30, 2022 and 2021: Three months ended September 30, 2022 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 10,333 $ (845) $ (672) $ 105 $ 8,921 Real estate construction 878 378 — 76 1,332 Commercial real estate 10,834 1,335 — 101 12,270 Total commercial 22,045 868 (672) 282 22,523 Consumer Residential real estate first mortgage 6,175 (584) — — 5,591 Residential real estate junior lien 1,467 (109) — 7 1,365 Other revolving and installment 634 (75) (75) 53 537 Total consumer 8,276 (768) (75) 60 7,493 Unallocated 1,052 (100) — — 952 Total $ 31,373 $ — $ (747) $ 342 $ 30,968 Nine months ended September 30, 2022 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 8,925 $ 1,011 $ (1,336) $ 321 $ 8,921 Real estate construction 783 473 — 76 1,332 Commercial real estate 12,376 (229) — 123 12,270 Total commercial 22,084 1,255 (1,336) 520 22,523 Consumer Residential real estate first mortgage 6,532 (941) — — 5,591 Residential real estate junior lien 1,295 (151) — 221 1,365 Other revolving and installment 481 65 (130) 121 537 Total consumer 8,308 (1,027) (130) 342 7,493 Unallocated 1,180 (228) — — 952 Total $ 31,572 $ — $ (1,466) $ 862 $ 30,968 Three months ended September 30, 2021 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 9,620 $ (825) $ (747) $ 1,052 $ 9,100 Real estate construction 587 92 — — 679 Commercial real estate 12,937 (413) — — 12,524 Total commercial 23,144 (1,146) (747) 1,052 22,303 Consumer Residential real estate first mortgage 6,176 625 — — 6,801 Residential real estate junior lien 1,401 6 — 16 1,423 Other revolving and installment 574 (32) (46) 27 523 Total consumer 8,151 599 (46) 43 8,747 Unallocated 2,469 (1,453) — — 1,016 Total $ 33,764 $ (2,000) $ (793) $ 1,095 $ 32,066 Nine months ended September 30, 2021 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 10,205 $ (1,378) $ (1,224) $ 1,497 $ 9,100 Real estate construction 658 21 — — 679 Commercial real estate 14,105 (1,049) (536) 4 12,524 Total commercial 24,968 (2,406) (1,760) 1,501 22,303 Consumer Residential real estate first mortgage 5,774 1,027 — — 6,801 Residential real estate junior lien 1,373 (63) — 113 1,423 Other revolving and installment 753 (196) (139) 105 523 Total consumer 7,900 768 (139) 218 8,747 Unallocated 1,378 (362) — — 1,016 Total $ 34,246 $ (2,000) $ (1,899) $ 1,719 $ 32,066 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 September 30, 2022 and December 31, 2021: September 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 $ 2,083 $ 562,572 $ 564,655 $ 264 $ 8,657 $ 8,921 Real estate construction — 89,215 89,215 — 1,332 1,332 Commercial real estate 800 818,268 819,068 — 12,270 12,270 Total commercial 2,883 1,470,055 1,472,938 264 22,259 22,523 Consumer Residential real estate first mortgage 1,998 647,820 649,818 — 5,591 5,591 Residential real estate junior lien 188 143,493 143,681 — 1,365 1,365 Other revolving and installment 8 51,786 51,794 — 537 537 Total consumer 2,194 843,099 845,293 — 7,493 7,493 Unallocated — — — — — 952 Total loans $ 5,077 $ 2,313,154 $ 2,318,231 $ 264 $ 29,752 $ 30,968 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 table below summarizes key information on impaired loans. These impaired loans may have estimated losses which are included in the allowance for loan losses: September 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 $ 712 $ 744 $ 264 $ 445 $ 464 $ 278 Commercial real estate — — — 180 203 5 Residential real estate junior lien — — — — — — Other revolving and installment — — — — — — Total impaired loans with a valuation allowance 712 744 264 625 667 283 Impaired loans without a valuation allowance Commercial and industrial 1,371 1,476 — 1,386 1,575 — Commercial real estate 800 855 — 629 684 — Residential real estate first mortgage 1,998 2,077 — 21 24 — Residential real estate junior lien 188 211 — 91 120 — Other revolving and installment 8 8 — — — — Total impaired loans without a valuation allowance 4,365 4,627 — 2,127 2,403 — Total impaired loans Commercial and industrial 2,083 2,220 264 1,831 2,039 278 Commercial real estate 800 855 — 809 887 5 Residential real estate first mortgage 1,998 2,077 — 21 24 — Residential real estate junior lien 188 211 — 91 120 — Other revolving and installment 8 8 — — — — Total impaired loans $ 5,077 $ 5,371 $ 264 $ 2,752 $ 3,070 $ 283 The table below presents the average recorded investment in impaired loans and interest income for the three and nine months ended September 30, 2022 and 2021: Three months ended September 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 $ 722 $ 3 $ 719 $ 3 Commercial real estate — — 779 2 Residential real estate first mortgage — — — — Residential real estate junior lien — — 8 — Other revolving and installment — — 4 — Total impaired loans with a valuation allowance 722 3 1,510 5 Impaired loans without a valuation allowance Commercial and industrial 1,371 7 2,016 5 Commercial real estate 801 2 3,793 — Residential real estate first mortgage 2,032 — 121 — Residential real estate junior lien 189 — 166 — Other revolving and installment 8 — — — Total impaired loans without a valuation allowance 4,401 9 6,096 5 Total impaired loans Commercial and industrial 2,093 10 2,735 8 Commercial real estate 801 2 4,572 2 Residential real estate first mortgage 2,032 — 121 — Residential real estate junior lien 189 — 174 — Other revolving and installment 8 — 4 — Total impaired loans $ 5,123 $ 12 $ 7,606 $ 10 Nine Months Ended September 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 $ 833 $ 8 $ 818 $ 10 Commercial real estate — — 782 6 Residential real estate junior lien — — 11 — Other revolving and installment — — 3 — Total impaired loans with a valuation allowance 833 8 1,614 16 Impaired loans without a valuation allowance Commercial and industrial 1,291 21 2,061 15 Commercial real estate 805 5 3,980 — Residential real estate first mortgage 2,108 — 114 — Residential real estate junior lien 193 — 190 — Other revolving and installment 11 — — — Total impaired loans without a valuation allowance 4,408 26 6,345 15 Total impaired loans Commercial and industrial 2,124 29 2,879 25 Commercial real estate 805 5 4,762 6 Residential real estate first mortgage 2,108 — 114 — Residential real estate junior lien 193 — 201 — Other revolving and installment 11 — 3 — Total impaired loans $ 5,241 $ 34 $ 7,959 $ 31 Loans with a carrying value of $1.4 billion as of September 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 third quarter of 2022 and 2021, there were no loans modified as a TDR. 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	9 Months Ended
Goodwill and Other Intangible Assets	Sep. 30, 2022
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets	NOTE 6 Goodwill and Other Intangible Assets The following table summarizes the carrying amount of goodwill, by segment, as of September 30, 2022 and December 31, 2021: September 30, December 31, (dollars in thousands) 2022 2021 Banking $ 34,854 $ 20,131 Retirement and benefit services 11,206 11,359 Total goodwill $ 46,060 $ 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 September 30, 2022. The gross carrying amount and accumulated amortization for each type of identifiable intangible asset are as follows: September 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 $ (24,920) $ 16,503 $ 42,057 $ (21,807) $ 20,250 Core deposit intangible assets 7,592 (316) 7,276 — — — Total intangible assets $ 49,015 $ (25,236) $ 23,779 $ 42,057 $ (21,807) $ 20,250 Amortization of intangible assets was $1.3 million and $1.1 million for the three months ended September 30, 2022, and 2021, respectively. Amortization of intangible assets was $3.4 million and $3.3 million for the nine months ended September 30, 2022, and 2021, respectively.

Loan Servicing

Loan Servicing	9 Months Ended
Loan Servicing	Sep. 30, 2022
Loan Servicing
Loan Servicing	NOTE 7 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 $372.5 million and $345.8 million as of September 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 nine months ended September 30, 2022 and 2021: Three months ended Nine months ended September 30, September 30, (dollars in thousands) 2022 2021 2022 2021 Balance, beginning of period $ 2,064 $ 1,964 $ 1,880 $ 1,987 Additions 604 84 622 195 Amortization (110) (195) (367) (580) (Impairment)/Recovery 222 (77) 645 174 Balance, end of period $ 2,780 $ 1,776 $ 2,780 $ 1,776 The following is a summary of key data and assumptions used in the valuation of servicing rights as of September 30, 2022 and December 31, 2021. Increases or decreases in any one of these assumptions would result in lower or higher fair value measurements: September 30, December 31, (dollars in thousands) 2022 2021 Fair value of servicing rights $ 2,780 $ 1,880 Weighted-average remaining term, years 20.6 20.3 Prepayment speeds 6.7 % 14.2 % Discount rate 10.0 % 9.5 %

Leases

Leases	9 Months Ended
Leases	Sep. 30, 2022
Leases
Leases	NOTE 8 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: September 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 $ 3,481 $ 3,727 Finance lease right-of-use assets Land, premises and equipment, net — 87 Total lease right-of-use assets $ 3,481 $ 3,814 Lease Liabilities Operating lease liabilities Operating lease liabilities $ 3,802 $ 4,275 Finance lease liabilities Long-term debt 21 203 Total lease liabilities $ 3,823 $ 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. September 30, December 31, 2022 2021 Weighted-average remaining lease term, years Operating leases 4.4 3.4 Finance leases — 0.8 Weighted-average discount rate Operating leases 2.7 % 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 nine months ended September 30, 2022 and 2021: Three months ended Nine months ended September 30, September 30, (dollars in thousands) 2022 2021 2022 2021 Lease costs Operating lease cost $ 425 $ 429 $ 1,250 $ 1,417 Variable lease cost 187 192 550 583 Short-term lease cost 188 89 276 172 Finance lease cost Interest on lease liabilities 2 7 7 22 Amortization of right-of-use assets 29 29 87 87 Sublease income (63) (51) (179) (163) Net lease cost $ 768 $ 695 $ 1,991 $ 2,118 Other information Cash paid for amounts included in the measurement of lease liabilities operating cash flows from operating leases $ 400 $ 411 $ 1,184 $ 1,372 Right-of-use assets obtained in exchange for new operating lease liabilities 1,065 — 1,452 — Future minimum payments for finance and operating leases with initial or remaining terms of one year or more as of September 30, 2022 were as follows: Finance Operating (dollars in thousands) Leases Leases Twelve months ended September 30, 2023 $ 21 $ 1,582 September 30, 2024 — 827 September 30, 2025 — 541 September 30, 2026 — 402 September 30, 2027 — 309 Thereafter — 441 Total future minimum lease payments $ 21 $ 4,102 Amounts representing interest — (300) Total operating lease liabilities $ 21 $ 3,802

Deposits

Deposits	9 Months Ended
Deposits	Sep. 30, 2022
Deposits.
Deposits	NOTE 9 Deposits The components of deposits in the consolidated balance sheets as of September 30, 2022 and December 31, 2021 were as follows: September 30, December 31, (dollars in thousands) 2022 2021 Noninterest-bearing $ 905,228 $ 938,840 Interest-bearing Interest-bearing demand 653,216 714,669 Savings accounts 101,820 96,825 Money market savings 1,079,520 937,305 Time deposits 222,027 232,912 Total interest-bearing 2,056,583 1,981,711 Total deposits $ 2,961,811 $ 2,920,551

Short-Term Borrowings

Short-Term Borrowings	9 Months Ended
Short-Term Borrowings	Sep. 30, 2022
Short-Term Borrowings
Short-Term Borrowings	NOTE 10 Short-Term Borrowings Short-term borrowings at September 30, 2022 and December 31, 2021 consisted of the following: September 30, December 31, (dollars in thousands) 2022 2021 Fed funds purchased $ 53,830 $ — FHLB Short-term advances 200,000 — Total $ 253,830 $ — The following table presents information related to short-term borrowings for the three and nine months ended September 30, 2022 and 2021: Three months ended September 30, (dollars in thousands) 2022 2021 Fed funds purchased Balance as of end of period $ 53,830 $ — Average daily balance 84,149 10 Maximum month-end balance 78,015 — Weighted-average rate During period 3.71 % — % End of period 3.25 % — % FHLB Short-term advances Balance as of end of period $ 200,000 $ — Average daily balance 168,750 — Maximum month-end balance 200,000 — Weighted-average rate During period 1.71 % — % End of period 3.20 % — % Nine months ended September 30, (dollars in thousands) 2022 2021 Fed funds purchased Balance as of end of period $ 53,830 $ — Average daily balance 55,527 3 Maximum month-end balance 117,350 — Weighted-average rate During period 2.47 % — % End of period 3.25 % — % FHLB Short-term advances Balance as of end of period $ 200,000 $ — Average daily balance 60,073 — Maximum month-end balance 200,000 — Weighted-average rate During period 1.71 % — % End of period 3.20 % — %

Long-Term Debt

Long-Term Debt	9 Months Ended
Long-Term Debt	Sep. 30, 2022
Long-Term Debt.
Long-Term Debt	NOTE 11 Long-Term Debt Long-term debt as of September 30, 2022 and December 31, 2021 consisted of the following: September 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 3,526 Three-month LIBOR + 3.10% 6.74 % 6/26/2033 6/26/2008 Junior subordinated debenture (Trust II) 6,186 5,289 Three-month LIBOR + 1.80% 5.09 % 9/15/2036 9/15/2011 Finance lease liability 2,700 21 Fixed 7.81 % 10/31/2022 N/A Total long-term debt $ 63,010 $ 58,836 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	9 Months Ended
Financial Instruments with Off-Balance Sheet Risk	Sep. 30, 2022
Financial Instruments with Off-Balance Sheet Risk
Financial Instruments with Off-Balance Sheet Risk	NOTE 12 Financial Instruments with Off-Balance Sheet Risk In the normal course of business, the Bank has outstanding commitments 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 September 30, 2022 and December 31, 2021, respectively, was as follows: September 30, December 31, (dollars in thousands) 2022 2021 Commitments to extend credit $ 785,745 $ 668,115 Standby letters of credit 11,414 10,529 Total $ 797,159 $ 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 no letters of credit outstanding with the FHLB as of September 30, 2022. The Company had a $150 thousand letter of credit outstanding with the FHLB as of December 31, 2021. With the Bank of North Dakota, the Company had no letters of credit outstanding as of September 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 $224.0 million and $229.7 million as of September 30, 2022 and December 31, 2021, respectively.

Share-Based Compensation

Share-Based Compensation	9 Months Ended
Share-Based Compensation	Sep. 30, 2022
Share-Based Compensation
Share-Based Compensation	NOTE 13 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 September 30, 2022, 922,010 shares of common stock are still available for issuance under the plan. The compensation expense relating to awards under these plans was $351 thousand and $545 thousand for the three months ended September 30, 2022 and 2021, respectively. The compensation expense relating to awards under these plans was $1.4 million and $1.8 million for the nine months ended September 30, 2022 and 2021, respectively. The following table presents the activity in the stock plans for the nine months ended September 30, 2022 and 2021: Nine months ended September 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 102,265 25.44 66,664 26.63 Vested (107,370) 19.19 (101,108) 20.46 Forfeited or cancelled (10,624) 23.71 — — Outstanding at end of period 245,121 $ 23.57 290,586 $ 20.77 As of September 30, 2022, there was $3.0 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 2.8 years.

Income Taxes

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2022
Income Taxes
Income Taxes	NOTE 14 Income Taxes The components of income tax expense (benefit) for the three and nine months ended September 30, 2022 and 2021 were as follows: Three months ended September 30, 2022 2021 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 2,637 21.0 % $ 3,598 21.0 % Tax effect of: Tax exempt income (133) (1.1) % (134) (0.8) % State income taxes, net of federal benefits 406 3.2 % 756 4.4 % Nondeductible items and other 30 0.2 % (156) (0.9) % Applicable income taxes $ 2,940 23.3 % $ 4,064 23.7 % Nine months ended September 30, 2022 2021 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 7,906 21.0 % $ 10,993 21.0 % Tax effect of: Tax exempt income (372) (1.0) % (434) (0.8) % State income taxes, net of federal benefits 1,515 4.0 % 2,407 4.6 % Nondeductible items and other (496) (1.3) % (596) (1.1) % Applicable income taxes $ 8,553 22.7 % $ 12,370 23.7 % 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	9 Months Ended
Tax Credit Investments	Sep. 30, 2022
Tax Credit Investments.
Tax Credit Investments	NOTE 15 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 September 30, 2022 and December 31, 2021: September 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 $ 15,559 $ 7,906 $ 6,999 Total $ 17,906 $ 15,559 $ 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 nine months ended three and nine months ended September 30, 2022 and 2021: Three months ended September 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 $ 109 $ (146) $ — $ — Total $ 109 $ (146) $ — $ — (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. Nine months ended September 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 $ 220 $ (303) $ — $ — Total $ 220 $ (303) $ — $ — (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	9 Months Ended
Segment Reporting	Sep. 30, 2022
Segment Reporting
Segment Reporting	NOTE 16 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 September 30, 2022 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 28,512 $ — $ — $ 393 $ (589) $ 28,316 Provision for loan losses — — — — — — Noninterest income 1,723 16,597 4,852 3,782 56 27,010 Noninterest expense 19,990 6,130 1,576 4,483 10,588 42,767 Net income before taxes $ 10,245 $ 10,467 $ 3,276 $ (308) $ (11,121) $ 12,559 Nine months ended September 30, 2022 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 72,816 $ — $ — $ 1,660 $ (1,711) $ 72,765 Provision for loan losses — — — — — — Noninterest income 4,602 50,536 15,726 14,751 91 85,706 Noninterest expense 48,303 21,160 5,062 14,712 31,585 120,822 Net income before taxes $ 29,115 $ 29,376 $ 10,664 $ 1,699 $ (33,205) $ 37,649 Three months ended September 30, 2021 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 21,168 $ — $ — $ 499 $ (535) $ 21,132 Provision for loan losses (2,000) — — — — (2,000) Noninterest income 1,576 18,031 5,295 11,116 22 36,040 Noninterest expense 11,403 10,320 2,219 8,464 9,635 42,041 Net income before taxes $ 13,341 $ 7,711 $ 3,076 $ 3,151 $ (10,148) $ 17,131 Nine months ended September 30, 2021 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 64,236 $ — $ — $ 1,435 $ (1,361) $ 64,310 Provision for loan losses (2,000) — — — — (2,000) Noninterest income 4,564 53,157 15,419 40,535 (6) 113,669 Noninterest expense 33,401 30,420 6,682 29,978 27,152 127,633 Net income before taxes $ 37,399 $ 22,737 $ 8,737 $ 11,992 $ (28,519) $ 52,346 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, and COBRA recordkeeping and administration services. 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	9 Months Ended
Earnings Per Share	Sep. 30, 2022
Earnings Per Share
Earnings Per Share	NOTE 17 Earnings Per Share The calculation of basic and diluted earnings per share using the two-class method for the three and nine months ended September 30, 2022 and 2021 are presented below: Three months ended Nine months ended September 30, September 30, (dollars and shares in thousands, except per share data) 2022 2021 2022 2021 Net income $ 9,619 $ 13,067 $ 29,096 $ 39,976 Dividends and undistributed earnings allocated to participating securities 90 196 312 628 Net income available to common shareholders $ 9,529 $ 12,871 $ 28,784 $ 39,348 Weighted-average common shares outstanding for basic earnings per share 19,987 17,205 18,186 17,182 Dilutive effect of stock-based awards 243 294 245 306 Weighted-average common shares outstanding for diluted earnings per share 20,230 17,499 18,431 17,488 Earnings per common share: Basic earnings per common share $ 0.48 $ 0.75 $ 1.58 $ 2.29 Diluted earnings per common share $ 0.47 $ 0.74 $ 1.56 $ 2.26

Derivative Instruments

Derivative Instruments	9 Months Ended
Derivative Instruments	Sep. 30, 2022
Derivative Instruments
Derivative Instruments	NOTE 18 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 September 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 September 30, 2022 and December 31, 2021: September 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 $ 6,608 $ 43,784 $ 1,366 $ 44,826 Interest rate lock commitments Other assets — — 1,507 52,316 Forward loan sales commitments Other assets 10 333 490 13,418 TBA mortgage backed securities Other assets 1,352 53,000 34 97,000 Total asset derivatives $ 7,970 $ 97,117 $ 3,397 $ 207,560 Liability Derivatives Interest rate swaps Accrued expenses and other liabilities $ 6,608 $ 43,784 $ 1,368 $ 44,826 Interest rate lock commitments Accrued expenses and other liabilities 134 22,636 — — Total liability derivatives $ 6,742 $ 66,420 $ 1,368 $ 44,826 The gain (loss) recognized on derivative instruments for the three and nine months ended September 30, 2022 and 2021 was as follows: Three months ended Nine months ended Consolidated Statements September 30, September 30, September 30, September 30, (dollars in thousands) of Income Location 2022 2021 2022 2021 Interest rate swaps Other noninterest income $ 1 $ 1 $ 2 $ 2 Interest rate lock commitments Mortgage banking (1,724) (1,793) (1,871) (7,298) Forward loan sales commitments Mortgage banking (532) (499) (480) (2,061) TBA mortgage backed securities Mortgage banking 1,317 (690) 5,066 4,865 Total gain/(loss) from derivative instruments $ (938) $ (2,981) $ 2,717 $ (4,492) 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 zero at September 30, 2022 and $15 thousand at 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	9 Months Ended
Regulatory Matters	Sep. 30, 2022
Regulatory Matters
Regulatory Matters	NOTE 19 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 September 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 September 30, 2022 and December 31, 2021: September 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 $ 381,019 13.63 % $ 125,839 4.50 % $ N/A N/A Bank 363,457 13.01 % 125,754 4.50 % 181,645 6.50 % Tier 1 capital to risk weighted assets . Consolidated 389,834 13.94 % 167,785 6.00 % N/A N/A Bank 363,457 13.01 % 167,672 6.00 % 223,563 8.00 % Total capital to risk weighted assets Consolidated 470,802 16.84 % 223,713 8.00 % N/A N/A Bank 394,425 14.11 % 223,562 8.00 % 279,454 10.00 % Tier 1 capital to average assets Consolidated 389,834 10.82 % 144,131 4.00 % N/A N/A Bank 363,457 11.12 % 130,728 4.00 % 163,410 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 September 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 September 30, 2022, and December 31, 2021, the Company was in compliance with the aforementioned guidelines.

Stock Repurchase Program

Stock Repurchase Program	9 Months Ended
Stock Repurchase Program	Sep. 30, 2022
Stock Repurchase Program
Stock Repurchase Program	NOTE 20 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 nine months ended September 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	9 Months Ended
Fair Value of Assets and Liabilities	Sep. 30, 2022
Fair Value of Assets and Liabilities
Fair Value of Assets and Liabilities	NOTE 21 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 September 30, 2022 and December 31, 2021: September 30, 2022 (dollars in thousands) Level 1 Level 2 Level 3 Total Available-for-sale U.S. treasury and government agencies $ — $ 3,833 $ — $ 3,833 Mortgage backed securities Residential agency — 596,989 — 596,989 Commercial — 65,283 — 65,283 Asset backed securities — 35 — 35 Corporate bonds — 62,970 — 62,970 Total available-for-sale investment securities $ — $ 729,110 $ — $ 729,110 Other assets Derivatives $ — $ 7,970 $ — $ 7,970 Other liabilities Derivatives $ — $ 6,742 $ — $ 6,742 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 September 30, 2022 and December 31, 2021 consisted of the following: September 30, 2022 (dollars in thousands) Level 2 Level 3 Total Impairment Loans held for sale $ 26,129 $ — $ 26,129 $ — Impaired loans — 4,813 4,813 264 Foreclosed assets — 904 904 — Servicing rights — 2,780 2,780 — 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 September 30, 2022, and December 31, 2021, were as follows: September 30, 2022 (dollars in thousands) Weighted Asset Type Valuation Technique Unobservable Input Fair Value Range Average Impaired loans Appraisal value Property specific adjustment $ 4,813 N/A N/A Foreclosed assets Appraisal value Property specific adjustment 904 N/A N/A Servicing rights Discounted cash flows Prepayment speed assumptions 2,780 100-136 112 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 September 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: September 30, 2022 Carrying Estimated Fair Value (dollars in thousands) Amount Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents $ 54,167 $ 54,167 $ — $ — $ 54,167 Investment securities held-to-maturity 326,410 — 273,306 — 273,306 Loans, net 2,287,263 — — 2,256,887 2,256,887 Accrued interest receivable 11,256 11,256 — — 11,256 Bank-owned life insurance 33,777 — 33,777 — 33,777 Financial Liabilities Noninterest-bearing deposits $ 905,228 $ — $ 905,228 $ — $ 905,228 Interest-bearing deposits 1,834,556 — 1,834,556 — 1,834,556 Time deposits 222,027 — — 217,974 217,974 Short-term borrowings 253,830 253,830 — — 253,830 Long-term debt 58,836 — 55,480 — 55,480 Accrued interest payable 1,405 1,405 — — 1,405 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_2

Significant Accounting Policies (Policies)	9 Months Ended
Significant Accounting Policies (Policies)	Sep. 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.
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.

Business Combinations (Tables)

Business Combinations (Tables)	9 Months Ended
Business Combinations (Tables)	Sep. 30, 2022
Business Combinations
Schedule of purchased assets and assumed liabilities recorded at their respective acquisition date estimate fair values	As recorded by Preliminary Fair Value As recorded by (dollars in thousands) Metro Phoenix Bank Adjustments the Company Assets Cash and cash equivalents $ 101,819 $ (45) $ 101,774 Fed funds sold 18,936 — 18,936 Core deposit intangible — 7,592 7,592 Loans 273,843 (3,440) 270,403 Accrued interest receivable 1,091 — 1,091 Other assets 3,342 517 3,859 Total assets 399,031 4,624 403,655 Liabilities Deposits 354,529 (844) 353,685 Other liabilities 673 — 673 Total liabilities 355,202 (844) 354,358 Excess assets over liabilities $ 43,829 $ 5,468 49,297 Stock issued for MPB 64,019 Total goodwill recorded $ 14,722

Investment Securities (Tables)

Investment Securities (Tables)	9 Months Ended
Investment Securities (Tables)	Sep. 30, 2022
Investment Securities
Schedule of amortized cost of investment securities to estimated fair values	September 30, 2022 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value Available-for-sale U.S. Treasury and agencies $ 3,826 $ 26 $ (19) $ 3,833 Mortgage backed securities Residential agency 721,170 6 (124,187) 596,989 Commercial 72,584 — (7,301) 65,283 Asset backed securities 35 — — 35 Corporate bonds 69,528 — (6,558) 62,970 Total available-for-sale investment securities 867,143 32 (138,065) 729,110 Held-to-maturity Obligations of state and political agencies 138,664 — (18,836) 119,828 Mortgage backed securities Residential agency 187,746 — (34,268) 153,478 Total held-to-maturity investment securities 326,410 — (53,104) 273,306 Total investment securities $ 1,193,553 $ 32 $ (191,169) $ 1,002,416 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	September 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 $ (19) $ 529 $ — $ — $ (19) $ 529 Mortgage backed securities Residential agency (60,983) 325,016 (63,204) 271,347 (124,187) 596,363 Commercial (5,425) 54,666 (1,876) 10,618 (7,301) 65,284 Asset backed securities — 22 — 2 — 24 Corporate bonds (6,558) 62,945 — — (6,558) 62,945 Total available-for-sale investment securities (72,985) 443,178 (65,080) 281,967 (138,065) 725,145 Held-to-maturity Obligations of state and political agencies (16,300) 94,902 (2,536) 24,926 (18,836) 119,828 Mortgage backed securities Residential agency — — (34,268) 153,478 (34,268) 153,478 Total held-to-maturity investment securities (16,300) 94,902 (36,804) 178,404 (53,104) 273,306 Total investment securities $ (89,285) $ 538,080 $ (101,884) $ 460,371 $ (191,169) $ 998,451 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 $ 6,808 $ 6,742 $ 11 $ 11 Due after one year through five years 40,702 37,102 21,421 19,957 Due after five years through ten years 69,679 58,557 89,695 81,580 Due after 10 years 209,221 170,905 756,016 627,562 Total investment securities $ 326,410 $ 273,306 $ 867,143 $ 729,110
Schedule of proceeds from the sale of available for sale securities	Three months ended Nine months ended September 30, September 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 Nine months ended September 30, September 30, (dollars in thousands) 2022 2021 2022 2021 Proceeds $ 101 $ 348 $ 827 $ 1,763 Realized gains — 11 — 11 Realized losses — — — —
Schedule of federal home loan bank	September 30, December 31, (dollars in thousands) 2022 2021 Federal Reserve $ 4,616 $ 2,675 FHLB 15,554 3,806

Loans and Allowance for Loan _2

Loans and Allowance for Loan Losses (Tables)	9 Months Ended
Loans and Allowance for Loan Losses (Tables)	Sep. 30, 2022
Loans and Allowance for Loan Losses
Schedule of total loans outstanding by portfolio segment	September 30, December 31, (dollars in thousands) 2022 2021 Commercial Commercial and industrial (1) $ 564,655 $ 436,761 Real estate construction 89,215 40,619 Commercial real estate 819,068 598,893 Total commercial 1,472,938 1,076,273 Consumer Residential real estate first mortgage 649,818 510,716 Residential real estate junior lien 143,681 125,668 Other revolving and installment 51,794 45,363 Total consumer 845,293 681,747 Total loans $ 2,318,231 $ 1,758,020 (1) Included Paycheck Protection Program, or PPP, loans of $2.9 million at September 30, 2022 and $33.6 million at December 31, 2021.
Schedule of past due aging analysis of the loan portfolio	September 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 $ 561,865 $ 311 $ 1,000 $ 1,479 $ 564,655 Real estate construction 89,215 — — — 89,215 Commercial real estate 818,439 — — 629 819,068 Total commercial 1,469,519 311 1,000 2,108 1,472,938 Consumer Residential real estate first mortgage 645,896 1,923 — 1,999 649,818 Residential real estate junior lien 143,491 2 — 188 143,681 Other revolving and installment 51,601 185 — 8 51,794 Total consumer 840,988 2,110 — 2,195 845,293 Total loans $ 2,310,507 $ 2,421 $ 1,000 $ 4,303 $ 2,318,231 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	September 30, 2022 Criticized Special (dollars in thousands) Pass Mention Substandard Doubtful Total Commercial Commercial and industrial $ 559,647 $ — $ 5,008 $ — $ 564,655 Real estate construction 89,215 — — — 89,215 Commercial real estate 809,910 3,840 5,318 — 819,068 Total commercial 1,458,772 3,840 10,326 — 1,472,938 Consumer Residential real estate first mortgage 647,517 64 2,237 — 649,818 Residential real estate junior lien 143,006 — 675 — 143,681 Other revolving and installment 51,786 — 8 — 51,794 Total consumer 842,309 64 2,920 — 845,293 Total loans $ 2,301,081 $ 3,904 $ 13,246 $ — $ 2,318,231 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 September 30, 2022 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 10,333 $ (845) $ (672) $ 105 $ 8,921 Real estate construction 878 378 — 76 1,332 Commercial real estate 10,834 1,335 — 101 12,270 Total commercial 22,045 868 (672) 282 22,523 Consumer Residential real estate first mortgage 6,175 (584) — — 5,591 Residential real estate junior lien 1,467 (109) — 7 1,365 Other revolving and installment 634 (75) (75) 53 537 Total consumer 8,276 (768) (75) 60 7,493 Unallocated 1,052 (100) — — 952 Total $ 31,373 $ — $ (747) $ 342 $ 30,968 Nine months ended September 30, 2022 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 8,925 $ 1,011 $ (1,336) $ 321 $ 8,921 Real estate construction 783 473 — 76 1,332 Commercial real estate 12,376 (229) — 123 12,270 Total commercial 22,084 1,255 (1,336) 520 22,523 Consumer Residential real estate first mortgage 6,532 (941) — — 5,591 Residential real estate junior lien 1,295 (151) — 221 1,365 Other revolving and installment 481 65 (130) 121 537 Total consumer 8,308 (1,027) (130) 342 7,493 Unallocated 1,180 (228) — — 952 Total $ 31,572 $ — $ (1,466) $ 862 $ 30,968 Three months ended September 30, 2021 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 9,620 $ (825) $ (747) $ 1,052 $ 9,100 Real estate construction 587 92 — — 679 Commercial real estate 12,937 (413) — — 12,524 Total commercial 23,144 (1,146) (747) 1,052 22,303 Consumer Residential real estate first mortgage 6,176 625 — — 6,801 Residential real estate junior lien 1,401 6 — 16 1,423 Other revolving and installment 574 (32) (46) 27 523 Total consumer 8,151 599 (46) 43 8,747 Unallocated 2,469 (1,453) — — 1,016 Total $ 33,764 $ (2,000) $ (793) $ 1,095 $ 32,066 Nine months ended September 30, 2021 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 10,205 $ (1,378) $ (1,224) $ 1,497 $ 9,100 Real estate construction 658 21 — — 679 Commercial real estate 14,105 (1,049) (536) 4 12,524 Total commercial 24,968 (2,406) (1,760) 1,501 22,303 Consumer Residential real estate first mortgage 5,774 1,027 — — 6,801 Residential real estate junior lien 1,373 (63) — 113 1,423 Other revolving and installment 753 (196) (139) 105 523 Total consumer 7,900 768 (139) 218 8,747 Unallocated 1,378 (362) — — 1,016 Total $ 34,246 $ (2,000) $ (1,899) $ 1,719 $ 32,066
Schedule of loans distributed by portfolio segment and impairment methodology	September 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 $ 2,083 $ 562,572 $ 564,655 $ 264 $ 8,657 $ 8,921 Real estate construction — 89,215 89,215 — 1,332 1,332 Commercial real estate 800 818,268 819,068 — 12,270 12,270 Total commercial 2,883 1,470,055 1,472,938 264 22,259 22,523 Consumer Residential real estate first mortgage 1,998 647,820 649,818 — 5,591 5,591 Residential real estate junior lien 188 143,493 143,681 — 1,365 1,365 Other revolving and installment 8 51,786 51,794 — 537 537 Total consumer 2,194 843,099 845,293 — 7,493 7,493 Unallocated — — — — — 952 Total loans $ 5,077 $ 2,313,154 $ 2,318,231 $ 264 $ 29,752 $ 30,968 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	September 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 $ 712 $ 744 $ 264 $ 445 $ 464 $ 278 Commercial real estate — — — 180 203 5 Residential real estate junior lien — — — — — — Other revolving and installment — — — — — — Total impaired loans with a valuation allowance 712 744 264 625 667 283 Impaired loans without a valuation allowance Commercial and industrial 1,371 1,476 — 1,386 1,575 — Commercial real estate 800 855 — 629 684 — Residential real estate first mortgage 1,998 2,077 — 21 24 — Residential real estate junior lien 188 211 — 91 120 — Other revolving and installment 8 8 — — — — Total impaired loans without a valuation allowance 4,365 4,627 — 2,127 2,403 — Total impaired loans Commercial and industrial 2,083 2,220 264 1,831 2,039 278 Commercial real estate 800 855 — 809 887 5 Residential real estate first mortgage 1,998 2,077 — 21 24 — Residential real estate junior lien 188 211 — 91 120 — Other revolving and installment 8 8 — — — — Total impaired loans $ 5,077 $ 5,371 $ 264 $ 2,752 $ 3,070 $ 283 The table below presents the average recorded investment in impaired loans and interest income for the three and nine months ended September 30, 2022 and 2021: Three months ended September 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 $ 722 $ 3 $ 719 $ 3 Commercial real estate — — 779 2 Residential real estate first mortgage — — — — Residential real estate junior lien — — 8 — Other revolving and installment — — 4 — Total impaired loans with a valuation allowance 722 3 1,510 5 Impaired loans without a valuation allowance Commercial and industrial 1,371 7 2,016 5 Commercial real estate 801 2 3,793 — Residential real estate first mortgage 2,032 — 121 — Residential real estate junior lien 189 — 166 — Other revolving and installment 8 — — — Total impaired loans without a valuation allowance 4,401 9 6,096 5 Total impaired loans Commercial and industrial 2,093 10 2,735 8 Commercial real estate 801 2 4,572 2 Residential real estate first mortgage 2,032 — 121 — Residential real estate junior lien 189 — 174 — Other revolving and installment 8 — 4 — Total impaired loans $ 5,123 $ 12 $ 7,606 $ 10 Nine Months Ended September 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 $ 833 $ 8 $ 818 $ 10 Commercial real estate — — 782 6 Residential real estate junior lien — — 11 — Other revolving and installment — — 3 — Total impaired loans with a valuation allowance 833 8 1,614 16 Impaired loans without a valuation allowance Commercial and industrial 1,291 21 2,061 15 Commercial real estate 805 5 3,980 — Residential real estate first mortgage 2,108 — 114 — Residential real estate junior lien 193 — 190 — Other revolving and installment 11 — — — Total impaired loans without a valuation allowance 4,408 26 6,345 15 Total impaired loans Commercial and industrial 2,124 29 2,879 25 Commercial real estate 805 5 4,762 6 Residential real estate first mortgage 2,108 — 114 — Residential real estate junior lien 193 — 201 — Other revolving and installment 11 — 3 — Total impaired loans $ 5,241 $ 34 $ 7,959 $ 31

Goodwill and Other Intangible_2

Goodwill and Other Intangible Assets (Tables)	9 Months Ended
Goodwill and Other Intangible Assets (Tables)	Sep. 30, 2022
Goodwill and Other Intangible Assets
Schedule of goodwill by segment	September 30, December 31, (dollars in thousands) 2022 2021 Banking $ 34,854 $ 20,131 Retirement and benefit services 11,206 11,359 Total goodwill $ 46,060 $ 31,490
Schedule of identifiable intangible assets	September 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 $ (24,920) $ 16,503 $ 42,057 $ (21,807) $ 20,250 Core deposit intangible assets 7,592 (316) 7,276 — — — Total intangible assets $ 49,015 $ (25,236) $ 23,779 $ 42,057 $ (21,807) $ 20,250

Loan Servicing (Tables)

Loan Servicing (Tables)	9 Months Ended
Loan Servicing (Tables)	Sep. 30, 2022
Loan Servicing
Summary of activity related to loan servicing	Three months ended Nine months ended September 30, September 30, (dollars in thousands) 2022 2021 2022 2021 Balance, beginning of period $ 2,064 $ 1,964 $ 1,880 $ 1,987 Additions 604 84 622 195 Amortization (110) (195) (367) (580) (Impairment)/Recovery 222 (77) 645 174 Balance, end of period $ 2,780 $ 1,776 $ 2,780 $ 1,776
Summary of key economic assumptions	September 30, December 31, (dollars in thousands) 2022 2021 Fair value of servicing rights $ 2,780 $ 1,880 Weighted-average remaining term, years 20.6 20.3 Prepayment speeds 6.7 % 14.2 % Discount rate 10.0 % 9.5 %

Leases (Tables)

Leases (Tables)	9 Months Ended
Leases (Tables)	Sep. 30, 2022
Leases
Schedule of right-of-use assets and lease liabilities	September 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 $ 3,481 $ 3,727 Finance lease right-of-use assets Land, premises and equipment, net — 87 Total lease right-of-use assets $ 3,481 $ 3,814 Lease Liabilities Operating lease liabilities Operating lease liabilities $ 3,802 $ 4,275 Finance lease liabilities Long-term debt 21 203 Total lease liabilities $ 3,823 $ 4,478
Schedule of weighted average remaining lease term and average discount rate	September 30, December 31, 2022 2021 Weighted-average remaining lease term, years Operating leases 4.4 3.4 Finance leases — 0.8 Weighted-average discount rate Operating leases 2.7 % 2.5 % Finance leases 7.8 % 7.8 %
Schedule of lease costs and other lease information	Three months ended Nine months ended September 30, September 30, (dollars in thousands) 2022 2021 2022 2021 Lease costs Operating lease cost $ 425 $ 429 $ 1,250 $ 1,417 Variable lease cost 187 192 550 583 Short-term lease cost 188 89 276 172 Finance lease cost Interest on lease liabilities 2 7 7 22 Amortization of right-of-use assets 29 29 87 87 Sublease income (63) (51) (179) (163) Net lease cost $ 768 $ 695 $ 1,991 $ 2,118 Other information Cash paid for amounts included in the measurement of lease liabilities operating cash flows from operating leases $ 400 $ 411 $ 1,184 $ 1,372 Right-of-use assets obtained in exchange for new operating lease liabilities 1,065 — 1,452 —
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 September 30, 2022 were as follows: Finance Operating (dollars in thousands) Leases Leases Twelve months ended September 30, 2023 $ 21 $ 1,582 September 30, 2024 — 827 September 30, 2025 — 541 September 30, 2026 — 402 September 30, 2027 — 309 Thereafter — 441 Total future minimum lease payments $ 21 $ 4,102 Amounts representing interest — (300) Total operating lease liabilities $ 21 $ 3,802
Schedule of future minimum payments for operating leases	Finance Operating (dollars in thousands) Leases Leases Twelve months ended September 30, 2023 $ 21 $ 1,582 September 30, 2024 — 827 September 30, 2025 — 541 September 30, 2026 — 402 September 30, 2027 — 309 Thereafter — 441 Total future minimum lease payments $ 21 $ 4,102 Amounts representing interest — (300) Total operating lease liabilities $ 21 $ 3,802

Deposits (Tables)

Deposits (Tables)	9 Months Ended
Deposits (Tables)	Sep. 30, 2022
Deposits.
Schedule of components of deposits	September 30, December 31, (dollars in thousands) 2022 2021 Noninterest-bearing $ 905,228 $ 938,840 Interest-bearing Interest-bearing demand 653,216 714,669 Savings accounts 101,820 96,825 Money market savings 1,079,520 937,305 Time deposits 222,027 232,912 Total interest-bearing 2,056,583 1,981,711 Total deposits $ 2,961,811 $ 2,920,551

Short-Term Borrowings (Tables)

Short-Term Borrowings (Tables)	9 Months Ended
Short-Term Borrowings (Tables)	Sep. 30, 2022
Short-Term Borrowings
Schedule of short-term borrowings	September 30, December 31, (dollars in thousands) 2022 2021 Fed funds purchased $ 53,830 $ — FHLB Short-term advances 200,000 — Total $ 253,830 $ —
Schedule of additional information related to short term borrowings	Three months ended September 30, (dollars in thousands) 2022 2021 Fed funds purchased Balance as of end of period $ 53,830 $ — Average daily balance 84,149 10 Maximum month-end balance 78,015 — Weighted-average rate During period 3.71 % — % End of period 3.25 % — % FHLB Short-term advances Balance as of end of period $ 200,000 $ — Average daily balance 168,750 — Maximum month-end balance 200,000 — Weighted-average rate During period 1.71 % — % End of period 3.20 % — % Nine months ended September 30, (dollars in thousands) 2022 2021 Fed funds purchased Balance as of end of period $ 53,830 $ — Average daily balance 55,527 3 Maximum month-end balance 117,350 — Weighted-average rate During period 2.47 % — % End of period 3.25 % — % FHLB Short-term advances Balance as of end of period $ 200,000 $ — Average daily balance 60,073 — Maximum month-end balance 200,000 — Weighted-average rate During period 1.71 % — % End of period 3.20 % — %

Long-Term Debt (Tables)

Long-Term Debt (Tables)	9 Months Ended
Long-Term Debt (Tables)	Sep. 30, 2022
Long-Term Debt.
Schedule of long-term debt	September 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 3,526 Three-month LIBOR + 3.10% 6.74 % 6/26/2033 6/26/2008 Junior subordinated debenture (Trust II) 6,186 5,289 Three-month LIBOR + 1.80% 5.09 % 9/15/2036 9/15/2011 Finance lease liability 2,700 21 Fixed 7.81 % 10/31/2022 N/A Total long-term debt $ 63,010 $ 58,836 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)	9 Months Ended
Financial Instruments with Off-Balance Sheet Risk (Tables)	Sep. 30, 2022
Financial Instruments with Off-Balance Sheet Risk
Schedule of financial instruments whose contract amount represents credit risk	September 30, December 31, (dollars in thousands) 2022 2021 Commitments to extend credit $ 785,745 $ 668,115 Standby letters of credit 11,414 10,529 Total $ 797,159 $ 678,644

Share-Based Compensation (Table

Share-Based Compensation (Tables)	9 Months Ended
Share-Based Compensation (Tables)	Sep. 30, 2022
Share-Based Compensation
Schedule of stock plan activity	Nine months ended September 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 102,265 25.44 66,664 26.63 Vested (107,370) 19.19 (101,108) 20.46 Forfeited or cancelled (10,624) 23.71 — — Outstanding at end of period 245,121 $ 23.57 290,586 $ 20.77

Income Taxes (Tables)

Income Taxes (Tables)	9 Months Ended
Income Taxes (Tables)	Sep. 30, 2022
Income Taxes
Schedule of components of income tax expense	Three months ended September 30, 2022 2021 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 2,637 21.0 % $ 3,598 21.0 % Tax effect of: Tax exempt income (133) (1.1) % (134) (0.8) % State income taxes, net of federal benefits 406 3.2 % 756 4.4 % Nondeductible items and other 30 0.2 % (156) (0.9) % Applicable income taxes $ 2,940 23.3 % $ 4,064 23.7 % Nine months ended September 30, 2022 2021 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 7,906 21.0 % $ 10,993 21.0 % Tax effect of: Tax exempt income (372) (1.0) % (434) (0.8) % State income taxes, net of federal benefits 1,515 4.0 % 2,407 4.6 % Nondeductible items and other (496) (1.3) % (596) (1.1) % Applicable income taxes $ 8,553 22.7 % $ 12,370 23.7 %

Tax Credit Investments (Tables)

Tax Credit Investments (Tables)	9 Months Ended
Tax Credit Investments (Tables)	Sep. 30, 2022
Tax Credit Investments.
Schedule of tax credits	September 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 $ 15,559 $ 7,906 $ 6,999 Total $ 17,906 $ 15,559 $ 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 nine months ended three and nine months ended September 30, 2022 and 2021: Three months ended September 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 $ 109 $ (146) $ — $ — Total $ 109 $ (146) $ — $ — (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. Nine months ended September 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 $ 220 $ (303) $ — $ — Total $ 220 $ (303) $ — $ — (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)	9 Months Ended
Segment Reporting (Tables)	Sep. 30, 2022
Segment Reporting
Schedule of key metrics related to segments	Three months ended September 30, 2022 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 28,512 $ — $ — $ 393 $ (589) $ 28,316 Provision for loan losses — — — — — — Noninterest income 1,723 16,597 4,852 3,782 56 27,010 Noninterest expense 19,990 6,130 1,576 4,483 10,588 42,767 Net income before taxes $ 10,245 $ 10,467 $ 3,276 $ (308) $ (11,121) $ 12,559 Nine months ended September 30, 2022 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 72,816 $ — $ — $ 1,660 $ (1,711) $ 72,765 Provision for loan losses — — — — — — Noninterest income 4,602 50,536 15,726 14,751 91 85,706 Noninterest expense 48,303 21,160 5,062 14,712 31,585 120,822 Net income before taxes $ 29,115 $ 29,376 $ 10,664 $ 1,699 $ (33,205) $ 37,649 Three months ended September 30, 2021 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 21,168 $ — $ — $ 499 $ (535) $ 21,132 Provision for loan losses (2,000) — — — — (2,000) Noninterest income 1,576 18,031 5,295 11,116 22 36,040 Noninterest expense 11,403 10,320 2,219 8,464 9,635 42,041 Net income before taxes $ 13,341 $ 7,711 $ 3,076 $ 3,151 $ (10,148) $ 17,131 Nine months ended September 30, 2021 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 64,236 $ — $ — $ 1,435 $ (1,361) $ 64,310 Provision for loan losses (2,000) — — — — (2,000) Noninterest income 4,564 53,157 15,419 40,535 (6) 113,669 Noninterest expense 33,401 30,420 6,682 29,978 27,152 127,633 Net income before taxes $ 37,399 $ 22,737 $ 8,737 $ 11,992 $ (28,519) $ 52,346

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
Earnings Per Share (Tables)	Sep. 30, 2022
Earnings Per Share
Schedule of basic and diluted earnings per share	Three months ended Nine months ended September 30, September 30, (dollars and shares in thousands, except per share data) 2022 2021 2022 2021 Net income $ 9,619 $ 13,067 $ 29,096 $ 39,976 Dividends and undistributed earnings allocated to participating securities 90 196 312 628 Net income available to common shareholders $ 9,529 $ 12,871 $ 28,784 $ 39,348 Weighted-average common shares outstanding for basic earnings per share 19,987 17,205 18,186 17,182 Dilutive effect of stock-based awards 243 294 245 306 Weighted-average common shares outstanding for diluted earnings per share 20,230 17,499 18,431 17,488 Earnings per common share: Basic earnings per common share $ 0.48 $ 0.75 $ 1.58 $ 2.29 Diluted earnings per common share $ 0.47 $ 0.74 $ 1.56 $ 2.26

Derivative Instruments (Tables)

Derivative Instruments (Tables)	9 Months Ended
Derivative Instruments (Tables)	Sep. 30, 2022
Derivative Instruments
Schedule of amounts recorded in the Company's consolidated balance sheets for derivatives not designated as hedging instruments	September 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 $ 6,608 $ 43,784 $ 1,366 $ 44,826 Interest rate lock commitments Other assets — — 1,507 52,316 Forward loan sales commitments Other assets 10 333 490 13,418 TBA mortgage backed securities Other assets 1,352 53,000 34 97,000 Total asset derivatives $ 7,970 $ 97,117 $ 3,397 $ 207,560 Liability Derivatives Interest rate swaps Accrued expenses and other liabilities $ 6,608 $ 43,784 $ 1,368 $ 44,826 Interest rate lock commitments Accrued expenses and other liabilities 134 22,636 — — Total liability derivatives $ 6,742 $ 66,420 $ 1,368 $ 44,826
Schedule of gain (loss) recognized on derivatives instruments	Three months ended Nine months ended Consolidated Statements September 30, September 30, September 30, September 30, (dollars in thousands) of Income Location 2022 2021 2022 2021 Interest rate swaps Other noninterest income $ 1 $ 1 $ 2 $ 2 Interest rate lock commitments Mortgage banking (1,724) (1,793) (1,871) (7,298) Forward loan sales commitments Mortgage banking (532) (499) (480) (2,061) TBA mortgage backed securities Mortgage banking 1,317 (690) 5,066 4,865 Total gain/(loss) from derivative instruments $ (938) $ (2,981) $ 2,717 $ (4,492)

Regulatory Matters (Tables)

Regulatory Matters (Tables)	9 Months Ended
Regulatory Matters (Tables)	Sep. 30, 2022
Regulatory Matters
Schedule of Bank's actual capital amounts and ratios	September 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 $ 381,019 13.63 % $ 125,839 4.50 % $ N/A N/A Bank 363,457 13.01 % 125,754 4.50 % 181,645 6.50 % Tier 1 capital to risk weighted assets . Consolidated 389,834 13.94 % 167,785 6.00 % N/A N/A Bank 363,457 13.01 % 167,672 6.00 % 223,563 8.00 % Total capital to risk weighted assets Consolidated 470,802 16.84 % 223,713 8.00 % N/A N/A Bank 394,425 14.11 % 223,562 8.00 % 279,454 10.00 % Tier 1 capital to average assets Consolidated 389,834 10.82 % 144,131 4.00 % N/A N/A Bank 363,457 11.12 % 130,728 4.00 % 163,410 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)	9 Months Ended
Fair Value of Assets and Liabilities (Tables)	Sep. 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	September 30, 2022 (dollars in thousands) Level 1 Level 2 Level 3 Total Available-for-sale U.S. treasury and government agencies $ — $ 3,833 $ — $ 3,833 Mortgage backed securities Residential agency — 596,989 — 596,989 Commercial — 65,283 — 65,283 Asset backed securities — 35 — 35 Corporate bonds — 62,970 — 62,970 Total available-for-sale investment securities $ — $ 729,110 $ — $ 729,110 Other assets Derivatives $ — $ 7,970 $ — $ 7,970 Other liabilities Derivatives $ — $ 6,742 $ — $ 6,742 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	September 30, 2022 (dollars in thousands) Level 2 Level 3 Total Impairment Loans held for sale $ 26,129 $ — $ 26,129 $ — Impaired loans — 4,813 4,813 264 Foreclosed assets — 904 904 — Servicing rights — 2,780 2,780 — 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	September 30, 2022 (dollars in thousands) Weighted Asset Type Valuation Technique Unobservable Input Fair Value Range Average Impaired loans Appraisal value Property specific adjustment $ 4,813 N/A N/A Foreclosed assets Appraisal value Property specific adjustment 904 N/A N/A Servicing rights Discounted cash flows Prepayment speed assumptions 2,780 100-136 112 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	September 30, 2022 Carrying Estimated Fair Value (dollars in thousands) Amount Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents $ 54,167 $ 54,167 $ — $ — $ 54,167 Investment securities held-to-maturity 326,410 — 273,306 — 273,306 Loans, net 2,287,263 — — 2,256,887 2,256,887 Accrued interest receivable 11,256 11,256 — — 11,256 Bank-owned life insurance 33,777 — 33,777 — 33,777 Financial Liabilities Noninterest-bearing deposits $ 905,228 $ — $ 905,228 $ — $ 905,228 Interest-bearing deposits 1,834,556 — 1,834,556 — 1,834,556 Time deposits 222,027 — — 217,974 217,974 Short-term borrowings 253,830 253,830 — — 253,830 Long-term debt 58,836 — 55,480 — 55,480 Accrued interest payable 1,405 1,405 — — 1,405 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)	9 Months Ended
Significant Accounting Policies (Details)	Sep. 30, 2022 segment
Significant Accounting Policies
Number of operating segments	4

Business Combinations (Details)

Business Combinations (Details) - USD ($) $ in Thousands	Jul. 01, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Business Combinations
Goodwill		$ 46,060		$ 31,490
MPB
Business Combinations
Total purchase price	$ 64,000
Customer deposit intangible	7,592
Goodwill	14,722
Loans	270,403		$ 273,843
Deposits	$ 353,685		$ 354,529

Business Combinations - Purchas

Business Combinations - Purchased assets and assumed liabilities at fair value (Details) - USD ($) $ in Thousands	Jul. 01, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Liabilities
Goodwill		$ 46,060		$ 31,490
MPB
Assets
Cash and cash equivalents acquired	$ 101,774		$ 101,819
Fed funds sold	18,936		18,936
Customer deposit intangible	7,592
Loans	270,403		273,843
Accrued interest receivable	1,091		1,091
Other assets	3,859		3,342
Total assets	403,655		399,031
Liabilities
Deposits	353,685		354,529
Other liabilities	673		673
Total liabilities	354,358		355,202
Excess assets over liabilities	49,297		$ 43,829
Stock issued for MPB	64,019
Goodwill	14,722
Assets
Cash and cash equivalents	(45)
Core deposit intangible	7,592
Loans	(3,440)
Other assets	517
Total assets	4,624
Liabilities
Deposits	(844)
Total liabilities	(844)
Excess assets over liabilities	$ 5,468

Investment Securities (Details)

Investment Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Investment securities available-for-sale
Amortized Cost	$ 867,143	$ 860,258
Unrealized Gains	32	5,362
Unrealized Losses	(138,065)	(11,971)
Fair Value	729,110	853,649
Amortized Cost	326,410	352,061
Unrealized Gains		1,110
Unrealized Losses	(53,104)	(3,494)
Fair Value	273,306	349,677
Amortized Cost	1,193,553	1,212,319
Unrealized Gains	32	6,472
Unrealized Losses	(191,169)	(15,465)
Fair Value	1,002,416	1,203,326
U. S. Treasury and agencies
Investment securities available-for-sale
Amortized Cost	3,826	5,028
Unrealized Gains	26	75
Unrealized Losses	(19)
Fair Value	3,833	5,103
Mortgage backed securities - Residential agency
Investment securities available-for-sale
Amortized Cost	721,170	717,781
Unrealized Gains	6	1,213
Unrealized Losses	(124,187)	(11,837)
Fair Value	596,989	707,157
Amortized Cost	187,746	207,518
Unrealized Losses	(34,268)	(3,145)
Fair Value	153,478	204,373
Mortgage backed securities - Commercial
Investment securities available-for-sale
Amortized Cost	72,584	88,362
Unrealized Gains		2,674
Unrealized Losses	(7,301)	(123)
Fair Value	65,283	90,913
Asset backed securities
Investment securities available-for-sale
Amortized Cost	35	52
Unrealized Gains		2
Fair Value	35	54
Corporate bonds
Investment securities available-for-sale
Amortized Cost	69,528	49,035
Unrealized Gains		1,398
Unrealized Losses	(6,558)	(11)
Fair Value	62,970	50,422
Obligations of state and political agencies.
Investment securities available-for-sale
Amortized Cost	138,664	144,543
Unrealized Gains		1,110
Unrealized Losses	(18,836)	(349)
Fair Value	$ 119,828	$ 145,304

Investment Securities - Gross u

Investment Securities - Gross unrealized losses (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Investment securities available-for-sale
Unrealized losses less than 12 months	$ (72,985)	$ (10,290)
Fair value less than 12 months	443,178	578,270
Unrealized losses over 12 months	(65,080)	(1,681)
Fair value over 12 months	281,967	55,084
Total Unrealized losses	(138,065)	(11,971)
Total Fair value	725,145	633,354
Held-to-maturity investment securities
Unrealized losses less than 12 months	(16,300)	(3,494)
Fair value less than 12 months	94,902	257,583
Unrealized losses over 12 months	(36,804)
Fair value over 12 months	178,404
Total Unrealized losses	(53,104)	(3,494)
Total Fair value	273,306	257,583
Unrealized losses less than 12 months	(89,285)	(13,784)
Fair value less than 12 months	538,080	835,853
Unrealized losses over 12 months	(101,884)	(1,681)
Fair value over 12 months	460,371	55,084
Total Unrealized losses	(191,169)	(15,465)
Total Fair value	998,451	890,937
U. S. Treasury and agencies
Investment securities available-for-sale
Unrealized losses less than 12 months	(19)
Fair value less than 12 months	529
Total Unrealized losses	(19)
Total Fair value	529
Mortgage backed securities - Residential agency
Investment securities available-for-sale
Unrealized losses less than 12 months	(60,983)	(10,156)
Fair value less than 12 months	325,016	554,811
Unrealized losses over 12 months	(63,204)	(1,681)
Fair value over 12 months	271,347	55,082
Total Unrealized losses	(124,187)	(11,837)
Total Fair value	596,363	609,893
Held-to-maturity investment securities
Unrealized losses less than 12 months		(3,145)
Fair value less than 12 months		204,373
Unrealized losses over 12 months	(34,268)
Fair value over 12 months	153,478
Total Unrealized losses	(34,268)	(3,145)
Total Fair value	153,478	204,373
Mortgage backed securities - Commercial
Investment securities available-for-sale
Unrealized losses less than 12 months	(5,425)	(123)
Fair value less than 12 months	54,666	17,470
Unrealized losses over 12 months	(1,876)
Fair value over 12 months	10,618
Total Unrealized losses	(7,301)	(123)
Total Fair value	65,284	17,470
Asset backed securities
Investment securities available-for-sale
Fair value less than 12 months	22
Fair value over 12 months	2	2
Total Fair value	24	2
Corporate bonds
Investment securities available-for-sale
Unrealized losses less than 12 months	(6,558)	(11)
Fair value less than 12 months	62,945	5,989
Total Unrealized losses	(6,558)	(11)
Total Fair value	62,945	5,989
Obligations of state and political agencies.
Held-to-maturity investment securities
Unrealized losses less than 12 months	(16,300)	(349)
Fair value less than 12 months	94,902	53,210
Unrealized losses over 12 months	(2,536)
Fair value over 12 months	24,926
Total Unrealized losses	(18,836)	(349)
Total Fair value	$ 119,828	$ 53,210

Investment Securities - Amortiz

Investment Securities - Amortized cost and estimated fair value (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Carrying Value
Due within one year or less	$ 6,808
Due after one year through five years	40,702
Due after five years through ten years	69,679
Due after 10 years	209,221
Total investment securities	326,410
Estimated Fair Value
Due within one year or less	6,742
Due after one year through five years	37,102
Due after five years through ten years	58,557
Due after 10 years	170,905
Total investment securities	273,306
Amortized Cost
Due within one year or less	11
Due after one year through five years	21,421
Due after five years through ten years	89,695
Due after 10 years	756,016
Total investment securities available-for-sale	867,143
Fair Value
Due within one year or less	11
Due after one year through five years	19,957
Due after five years through ten years	81,580
Due after 10 years	627,562
Total investment securities available-for-sale	$ 729,110

Investment Securities - Pledged

Investment Securities - Pledged (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Investment Securities
Investment securities with carrying value	$ 264.1	$ 192.8

Investment Securities - Proceed

Investment Securities - Proceeds from sale of available for sale securities (Details) $ in Thousands	9 Months Ended
	Sep. 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		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Investment Securities
Proceeds	$ 101	$ 348	$ 827	$ 1,763
Realized gains		$ 11		$ 11

Investment Securities - Carryin

Investment Securities - Carrying value (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Investment Securities
Federal Reserve	$ 4,616	$ 2,675
FHLB	$ 15,554	$ 3,806

Investment Securities - Visa Cl

Investment Securities - Visa Class B Restricted Shares (Details) - Visa $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($) shares	Dec. 31, 2021 USD ($) shares
Common Class A
Securities
Investment shares owned, if converted	11,119	11,119
Common Class B
Securities
Conversion ratio	1.6059
Investment shares owned	6,924	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	Sep. 30, 2022	Dec. 31, 2021
Loans and Allowance for Loan Losses
Total loans	$ 2,318,231	$ 1,758,020
Deferred loan fees and costs	851	231
MPB
Loans and Allowance for Loan Losses
Unearned discount	8,000
Commercial
Loans and Allowance for Loan Losses
Total loans	1,472,938	1,076,273
Consumer
Loans and Allowance for Loan Losses
Total loans	845,293	681,747
Commercial and industrial \| Commercial
Loans and Allowance for Loan Losses
Total loans	564,655	436,761
Commercial and industrial \| Commercial \| PPP Loans
Loans and Allowance for Loan Losses
Total loans	2,900	33,600
Deferred loan fees and costs	22	881
Real estate construction \| Commercial
Loans and Allowance for Loan Losses
Total loans	89,215	40,619
Residential \| Consumer \| Real estate first mortgage
Loans and Allowance for Loan Losses
Total loans	649,818	510,716
Residential \| Consumer \| Real estate junior lien
Loans and Allowance for Loan Losses
Total loans	143,681	125,668
Commercial real estate \| Commercial
Loans and Allowance for Loan Losses
Total loans	819,068	598,893
Other revolving and installment \| Consumer
Loans and Allowance for Loan Losses
Total loans	$ 51,794	$ 45,363

Loans and Allowance for Loan _4

Loans and Allowance for Loan Losses - Past due aging analysis (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Past due aging analysis of loans
Nonaccrual	$ 4,303	$ 2,076
Loans and Leases Receivable, Gross, Total	2,318,231	1,758,020
30 - 89 Days Past Due
Past due aging analysis of loans
Loans	2,421	2,226
90 Days or More Past Due
Past due aging analysis of loans
Loans	1,000	121
Current
Past due aging analysis of loans
Loans	2,310,507	1,753,597
Commercial
Past due aging analysis of loans
Nonaccrual	2,108	1,966
Loans and Leases Receivable, Gross, Total	1,472,938	1,076,273
Commercial \| 30 - 89 Days Past Due
Past due aging analysis of loans
Loans	311	168
Commercial \| 90 Days or More Past Due
Past due aging analysis of loans
Loans	1,000	121
Commercial \| Current
Past due aging analysis of loans
Loans	1,469,519	1,074,018
Commercial \| Commercial and industrial
Past due aging analysis of loans
Nonaccrual	1,479	1,337
Loans and Leases Receivable, Gross, Total	564,655	436,761
Commercial \| Commercial and industrial \| 30 - 89 Days Past Due
Past due aging analysis of loans
Loans	311	168
Commercial \| Commercial and industrial \| 90 Days or More Past Due
Past due aging analysis of loans
Loans	1,000	121
Commercial \| Commercial and industrial \| Current
Past due aging analysis of loans
Loans	561,865	435,135
Commercial \| Real estate construction
Past due aging analysis of loans
Loans and Leases Receivable, Gross, Total	89,215	40,619
Commercial \| Real estate construction \| Current
Past due aging analysis of loans
Loans	89,215	40,619
Commercial \| Commercial real estate
Past due aging analysis of loans
Nonaccrual	629	629
Loans and Leases Receivable, Gross, Total	819,068	598,893
Commercial \| Commercial real estate \| Current
Past due aging analysis of loans
Loans	818,439	598,264
Consumer
Past due aging analysis of loans
Nonaccrual	2,195	110
Loans and Leases Receivable, Gross, Total	845,293	681,747
Consumer \| 30 - 89 Days Past Due
Past due aging analysis of loans
Loans	2,110	2,058
Consumer \| Current
Past due aging analysis of loans
Loans	840,988	679,579
Consumer \| Residential \| Real estate first mortgage
Past due aging analysis of loans
Nonaccrual	1,999	21
Loans and Leases Receivable, Gross, Total	649,818	510,716
Consumer \| Residential \| Real estate first mortgage \| 30 - 89 Days Past Due
Past due aging analysis of loans
Loans	1,923	1,770
Consumer \| Residential \| Real estate first mortgage \| Current
Past due aging analysis of loans
Loans	645,896	508,925
Consumer \| Residential \| Real estate junior lien
Past due aging analysis of loans
Nonaccrual	188	89
Loans and Leases Receivable, Gross, Total	143,681	125,668
Consumer \| Residential \| Real estate junior lien \| 30 - 89 Days Past Due
Past due aging analysis of loans
Loans	2	167
Consumer \| Residential \| Real estate junior lien \| Current
Past due aging analysis of loans
Loans	143,491	125,412
Consumer \| Other revolving and installment
Past due aging analysis of loans
Nonaccrual	8
Loans and Leases Receivable, Gross, Total	51,794	45,363
Consumer \| Other revolving and installment \| 30 - 89 Days Past Due
Past due aging analysis of loans
Loans	185	121
Consumer \| Other revolving and installment \| Current
Past due aging analysis of loans
Loans	$ 51,601	$ 45,242

Loans and Allowance for Loan _5

Loans and Allowance for Loan Losses - Loans by risk category (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Loans outstanding by loan portfolio segment and risk category
Loans	$ 2,318,231	$ 1,758,020
Pass
Loans outstanding by loan portfolio segment and risk category
Loans	2,301,081	1,736,781
Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	3,904	480
Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	13,246	20,759
Commercial
Loans outstanding by loan portfolio segment and risk category
Loans	1,472,938	1,076,273
Commercial \| Pass
Loans outstanding by loan portfolio segment and risk category
Loans	1,458,772	1,056,145
Commercial \| Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	3,840	480
Commercial \| Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	10,326	19,648
Commercial \| Commercial and industrial
Loans outstanding by loan portfolio segment and risk category
Loans	564,655	436,761
Commercial \| Commercial and industrial \| Pass
Loans outstanding by loan portfolio segment and risk category
Loans	559,647	430,235
Commercial \| Commercial and industrial \| Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans		480
Commercial \| Commercial and industrial \| Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	5,008	6,046
Commercial \| Real estate construction
Loans outstanding by loan portfolio segment and risk category
Loans	89,215	40,619
Commercial \| Real estate construction \| Pass
Loans outstanding by loan portfolio segment and risk category
Loans	89,215	40,619
Commercial \| Commercial real estate
Loans outstanding by loan portfolio segment and risk category
Loans	819,068	598,893
Commercial \| Commercial real estate \| Pass
Loans outstanding by loan portfolio segment and risk category
Loans	809,910	585,291
Commercial \| Commercial real estate \| Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	3,840
Commercial \| Commercial real estate \| Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	5,318	13,602
Consumer
Loans outstanding by loan portfolio segment and risk category
Loans	845,293	681,747
Consumer \| Pass
Loans outstanding by loan portfolio segment and risk category
Loans	842,309	680,636
Consumer \| Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	64
Consumer \| Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	2,920	1,111
Consumer \| Residential \| Real estate first mortgage
Loans outstanding by loan portfolio segment and risk category
Loans	649,818	510,716
Consumer \| Residential \| Real estate first mortgage \| Pass
Loans outstanding by loan portfolio segment and risk category
Loans	647,517	510,375
Consumer \| Residential \| Real estate first mortgage \| Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	64
Consumer \| Residential \| Real estate first mortgage \| Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	2,237	341
Consumer \| Residential \| Real estate junior lien
Loans outstanding by loan portfolio segment and risk category
Loans	143,681	125,668
Consumer \| Residential \| Real estate junior lien \| Pass
Loans outstanding by loan portfolio segment and risk category
Loans	143,006	124,898
Consumer \| Residential \| Real estate junior lien \| Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	675	770
Consumer \| Other revolving and installment
Loans outstanding by loan portfolio segment and risk category
Loans	51,794	45,363
Consumer \| Other revolving and installment \| Pass
Loans outstanding by loan portfolio segment and risk category
Loans	51,786	$ 45,363
Consumer \| Other revolving and installment \| Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	$ 8

Loans and Allowance for Loan _6

Loans and Allowance for Loan Losses - Changes in allowance (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Changes in the allowance
Beginning Balance	$ 31,373	$ 33,764	$ 31,572	$ 34,246
Provision for loan losses		(2,000)		(2,000)
Loan charge-offs	(747)	(793)	(1,466)	(1,899)
Loan recoveries	342	1,095	862	1,719
Ending Balance	30,968	32,066	30,968	32,066
Unallocated
Changes in the allowance
Beginning Balance	1,052	2,469	1,180	1,378
Provision for loan losses	(100)	(1,453)	(228)	(362)
Ending Balance	952	1,016	952	1,016
Commercial
Changes in the allowance
Beginning Balance	22,045	23,144	22,084	24,968
Provision for loan losses	868	(1,146)	1,255	(2,406)
Loan charge-offs	(672)	(747)	(1,336)	(1,760)
Loan recoveries	282	1,052	520	1,501
Ending Balance	22,523	22,303	22,523	22,303
Commercial \| Commercial and industrial
Changes in the allowance
Beginning Balance	10,333	9,620	8,925	10,205
Provision for loan losses	(845)	(825)	1,011	(1,378)
Loan charge-offs	(672)	(747)	(1,336)	(1,224)
Loan recoveries	105	1,052	321	1,497
Ending Balance	8,921	9,100	8,921	9,100
Commercial \| Real estate construction
Changes in the allowance
Beginning Balance	878	587	783	658
Provision for loan losses	378	92	473	21
Loan recoveries	76		76
Ending Balance	1,332	679	1,332	679
Commercial \| Commercial real estate
Changes in the allowance
Beginning Balance	10,834	12,937	12,376	14,105
Provision for loan losses	1,335	(413)	(229)	(1,049)
Loan charge-offs				(536)
Loan recoveries	101		123	4
Ending Balance	12,270	12,524	12,270	12,524
Consumer
Changes in the allowance
Beginning Balance	8,276	8,151	8,308	7,900
Provision for loan losses	(768)	599	(1,027)	768
Loan charge-offs	(75)	(46)	(130)	(139)
Loan recoveries	60	43	342	218
Ending Balance	7,493	8,747	7,493	8,747
Consumer \| Residential \| Real estate first mortgage
Changes in the allowance
Beginning Balance	6,175	6,176	6,532	5,774
Provision for loan losses	(584)	625	(941)	1,027
Ending Balance	5,591	6,801	5,591	6,801
Consumer \| Residential \| Real estate junior lien
Changes in the allowance
Beginning Balance	1,467	1,401	1,295	1,373
Provision for loan losses	(109)	6	(151)	(63)
Loan recoveries	7	16	221	113
Ending Balance	1,365	1,423	1,365	1,423
Consumer \| Other revolving and installment
Changes in the allowance
Beginning Balance	634	574	481	753
Provision for loan losses	(75)	(32)	65	(196)
Loan charge-offs	(75)	(46)	(130)	(139)
Loan recoveries	53	27	121	105
Ending Balance	$ 537	$ 523	$ 537	$ 523

Loans and Allowance for Loan _7

Loans and Allowance for Loan Losses - Components of loans and associated allowance (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	$ 5,077		$ 2,752
Recorded Investment, Collectively Evaluated	2,313,154		1,755,268
Loans and Leases Receivable, Gross, Total	2,318,231		1,758,020
Allowance for Loan Losses, Individually Evaluated	264		283
Allowance for Loan Losses, Collectively Evaluated	29,752		30,109
Loans and Leases Receivable, Allowance, Total	30,968	$ 31,373	31,572	$ 32,066	$ 33,764	$ 34,246
Unallocated
Loans and Allowance for Loan Losses
Loans and Leases Receivable, Allowance, Total	952	1,052	1,180	1,016	2,469	1,378
Commercial
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	2,883		2,640
Recorded Investment, Collectively Evaluated	1,470,055		1,073,633
Loans and Leases Receivable, Gross, Total	1,472,938		1,076,273
Allowance for Loan Losses, Individually Evaluated	264		283
Allowance for Loan Losses, Collectively Evaluated	22,259		21,801
Loans and Leases Receivable, Allowance, Total	22,523	22,045	22,084	22,303	23,144	24,968
Commercial \| Commercial and industrial
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	2,083		1,831
Recorded Investment, Collectively Evaluated	562,572		434,930
Loans and Leases Receivable, Gross, Total	564,655		436,761
Allowance for Loan Losses, Individually Evaluated	264		278
Allowance for Loan Losses, Collectively Evaluated	8,657		8,647
Loans and Leases Receivable, Allowance, Total	8,921	10,333	8,925	9,100	9,620	10,205
Commercial \| Real estate construction
Loans and Allowance for Loan Losses
Recorded Investment, Collectively Evaluated	89,215		40,619
Loans and Leases Receivable, Gross, Total	89,215		40,619
Allowance for Loan Losses, Collectively Evaluated	1,332		783
Loans and Leases Receivable, Allowance, Total	1,332	878	783	679	587	658
Commercial \| Commercial real estate
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	800		809
Recorded Investment, Collectively Evaluated	818,268		598,084
Loans and Leases Receivable, Gross, Total	819,068		598,893
Allowance for Loan Losses, Individually Evaluated			5
Allowance for Loan Losses, Collectively Evaluated	12,270		12,371
Loans and Leases Receivable, Allowance, Total	12,270	10,834	12,376	12,524	12,937	14,105
Consumer
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	2,194		112
Recorded Investment, Collectively Evaluated	843,099		681,635
Loans and Leases Receivable, Gross, Total	845,293		681,747
Allowance for Loan Losses, Collectively Evaluated	7,493		8,308
Loans and Leases Receivable, Allowance, Total	7,493	8,276	8,308	8,747	8,151	7,900
Consumer \| Residential \| Real estate first mortgage
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	1,998		21
Recorded Investment, Collectively Evaluated	647,820		510,695
Loans and Leases Receivable, Gross, Total	649,818		510,716
Allowance for Loan Losses, Collectively Evaluated	5,591		6,532
Loans and Leases Receivable, Allowance, Total	5,591	6,175	6,532	6,801	6,176	5,774
Consumer \| Residential \| Real estate junior lien
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	188		91
Recorded Investment, Collectively Evaluated	143,493		125,577
Loans and Leases Receivable, Gross, Total	143,681		125,668
Allowance for Loan Losses, Collectively Evaluated	1,365		1,295
Loans and Leases Receivable, Allowance, Total	1,365	1,467	1,295	1,423	1,401	1,373
Consumer \| Other revolving and installment
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	8
Recorded Investment, Collectively Evaluated	51,786		45,363
Loans and Leases Receivable, Gross, Total	51,794		45,363
Allowance for Loan Losses, Collectively Evaluated	537		481
Loans and Leases Receivable, Allowance, Total	$ 537	$ 634	$ 481	$ 523	$ 574	$ 753

Loans and Allowance for Loan _8

Loans and Allowance for Loan Losses - Impaired loans (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Impaired
Loans with related allowance for loan losses, Recorded investment	$ 712	$ 625
Loans with related allowance for loan losses, unpaid principal	744	667
Loans with related allowance for loan losses, Related Allowance	264	283
Loans with no related allowance for loan losses, Recorded investment	4,365	2,127
Loans with no related allowance for loan losses, unpaid principal	4,627	2,403
Recorded investment	5,077	2,752
Unpaid principal balance	5,371	3,070
Commercial \| Commercial and industrial
Impaired
Loans with related allowance for loan losses, Recorded investment	712	445
Loans with related allowance for loan losses, unpaid principal	744	464
Loans with related allowance for loan losses, Related Allowance	264	278
Loans with no related allowance for loan losses, Recorded investment	1,371	1,386
Loans with no related allowance for loan losses, unpaid principal	1,476	1,575
Recorded investment	2,083	1,831
Unpaid principal balance	2,220	2,039
Commercial \| Commercial real estate
Impaired
Loans with related allowance for loan losses, Recorded investment		180
Loans with related allowance for loan losses, unpaid principal		203
Loans with related allowance for loan losses, Related Allowance		5
Loans with no related allowance for loan losses, Recorded investment	800	629
Loans with no related allowance for loan losses, unpaid principal	855	684
Recorded investment	800	809
Unpaid principal balance	855	887
Consumer \| Residential \| Real estate first mortgage
Impaired
Loans with no related allowance for loan losses, Recorded investment	1,998	21
Loans with no related allowance for loan losses, unpaid principal	2,077	24
Recorded investment	1,998	21
Unpaid principal balance	2,077	24
Consumer \| Residential \| Real estate junior lien
Impaired
Loans with no related allowance for loan losses, Recorded investment	188	91
Loans with no related allowance for loan losses, unpaid principal	211	120
Recorded investment	188	91
Unpaid principal balance	211	$ 120
Consumer \| Other revolving and installment
Impaired
Loans with no related allowance for loan losses, Recorded investment	8
Loans with no related allowance for loan losses, unpaid principal	8
Recorded investment	8
Unpaid principal balance	$ 8

Loans and Allowance for Loan _9

Loans and Allowance for Loan Losses - Interest Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Impaired
Loans with related allowance for loan losses, Average recorded investment	$ 722	$ 1,510	$ 833	$ 1,614
Loans with no related allowance for loan losses, Average recorded investment	4,401	6,096	4,408	6,345
Loans, Average recorded investment	5,123	7,606	5,241	7,959
Loans with related allowance for loan losses, Interest income	3	5	8	16
Loans with no related allowance for loan losses, Interest income	9	5	26	15
Loans, Interest income	12	10	34	31
Commercial \| Commercial and industrial
Impaired
Loans with related allowance for loan losses, Average recorded investment	722	719	833	818
Loans with no related allowance for loan losses, Average recorded investment	1,371	2,016	1,291	2,061
Loans, Average recorded investment	2,093	2,735	2,124	2,879
Loans with related allowance for loan losses, Interest income	3	3	8	10
Loans with no related allowance for loan losses, Interest income	7	5	21	15
Loans, Interest income	10	8	29	25
Commercial \| Commercial real estate
Impaired
Loans with related allowance for loan losses, Average recorded investment		779		782
Loans with no related allowance for loan losses, Average recorded investment	801	3,793	805	3,980
Loans, Average recorded investment	801	4,572	805	4,762
Loans with related allowance for loan losses, Interest income		2		6
Loans with no related allowance for loan losses, Interest income	2		5
Loans, Interest income	2	2	5	6
Consumer \| Residential \| Real estate first mortgage
Impaired
Loans with no related allowance for loan losses, Average recorded investment	2,032	121	2,108	114
Loans, Average recorded investment	2,032	121	2,108	114
Consumer \| Residential \| Real estate junior lien
Impaired
Loans with related allowance for loan losses, Average recorded investment		8		11
Loans with no related allowance for loan losses, Average recorded investment	189	166	193	190
Loans, Average recorded investment	189	174	193	201
Consumer \| Other revolving and installment
Impaired
Loans with related allowance for loan losses, Average recorded investment		4		3
Loans with no related allowance for loan losses, Average recorded investment	8		11
Loans, Average recorded investment	$ 8	$ 4	$ 11	$ 3

Loans and Allowance for Loan_10

Loans and Allowance for Loan Losses - Pledged (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Loans and Allowance for Loan Losses
Total loans	$ 2,318,231	$ 1,758,020
Pledged
Loans and Allowance for Loan Losses
Total loans	$ 1,400,000	$ 1,200,000

Loans and Allowance for Loan_11

Loans and Allowance for Loan Losses - Troubled Debt Restructurings (Details) - loan	3 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Loans and Allowance for Loan Losses
Number of loans modified as a troubled debt restructuring	0	0

Goodwill and Other Intangible_3

Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Goodwill
Total goodwill	$ 46,060	$ 31,490
Banking
Goodwill
Total goodwill	34,854	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		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Goodwill
Gross Carrying Amount	$ 49,015		$ 49,015		$ 42,057
Accumulated Amortization	(25,236)		(25,236)		(21,807)
Total	23,779		23,779		20,250
Intangible amortization expense	1,324	$ 1,088	3,430	$ 3,327
Goodwill, Impairment Loss			0
Identifiable customer intangibles
Goodwill
Gross Carrying Amount	41,423		41,423		42,057
Accumulated Amortization	(24,920)		(24,920)		(21,807)
Total	16,503		16,503		$ 20,250
Core deposit intangible assets
Goodwill
Gross Carrying Amount	7,592		7,592
Accumulated Amortization	(316)		(316)
Total	$ 7,276		$ 7,276

Loan Servicing (Details)

Loan Servicing (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Loan Servicing (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Loan Servicing
Loans serviced for others	$ 372,500		$ 372,500		$ 345,800
Servicing Asset at Fair Value, Amount
Balance, beginning of period	2,064	$ 1,964	1,880	$ 1,987
Additions	604	84	622	195
Amortization	(110)	(195)	(367)	(580)
(Impairment)/Recovery	222	(77)	645	174
Balance, end of period	$ 2,780	$ 1,776	$ 2,780	$ 1,776

Loan Servicing - Key economic a

Loan Servicing - Key economic assumptions (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Loan Servicing
Fair value of servicing rights	$ 2,780	$ 1,880
Weighted-average remaining term, years	20 years 7 months 6 days	20 years 3 months 18 days
Prepayment speeds	6.70%	14.20%
Discount rate	10%	9.50%

Leases - Lease right-of-use ass

Leases - Lease right-of-use assets and liabilities (Details) $ in Thousands	Sep. 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	$ 3,481	$ 3,727
Finance lease right-of-use assets		$ 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	$ 3,481	$ 3,814
Operating lease liabilities	3,802	4,275
Finance lease liabilities	$ 21	$ 203
Finance lease liabilities, balance sheet location	Long-term debt	Long-term debt
Lease liabilities	$ 3,823	$ 4,478

Leases - Weighted-average remai

Leases - Weighted-average remaining lease term and average discount rate (Details) - item	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Leases
Minimum number of options to renew lease agreements	1
Weighted-average remaining lease term, Operating leases	4 years 4 months 24 days	3 years 4 months 24 days
Weighted-average remaining lease term, Finance leases		9 months 18 days
Weighted-average discount rate, Operating leases	2.70%	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		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Lease costs
Operating lease cost	$ 425	$ 429	$ 1,250	$ 1,417
Variable lease cost	187	192	550	583
Short-term lease cost	188	89	276	172
Finance lease cost
Interest on lease liabilities	2	7	7	22
Amortization of right-of-use assets	29	29	87	87
Sublease Income	(63)	(51)	(179)	(163)
Net lease cost	768	695	1,991	2,118
Cash paid for amounts included in the measurement of lease liabilities operating cash flows from operating leases	400	$ 411	1,184	$ 1,372
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 1,065		$ 1,452

Leases - Future minimum payment

Leases - Future minimum payments for finance and operating leases (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Finance leases
September 30, 2023	$ 21
Total future minimum lease payments	21
Total finance lease liabilities	21	$ 203
Operating leases
June 30, 2023	1,582
June 30, 2024	827
June 30, 2025	541
June 30, 2026	402
June 30, 2027	309
Thereafter	441
Total future minimum lease payments	4,102
Amounts representing interest	(300)
Total operating lease liabilities	$ 3,802	$ 4,275

Deposits (Details)

Deposits (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Deposits.
Noninterest-bearing	$ 905,228	$ 938,840
Interest-bearing demand	653,216	714,669
Savings accounts	101,820	96,825
Money market savings	1,079,520	937,305
Time deposits	222,027	232,912
Total interest-bearing	2,056,583	1,981,711
Total deposits	$ 2,961,811	$ 2,920,551

Short-Term Borrowings (Details)

Short-Term Borrowings (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Short-Term Borrowings (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Short-term borrowings
Balance as of end of period	$ 253,830		$ 253,830
Federal Funds Purchased
Short-term borrowings
Balance as of end of period	53,830		53,830
Average daily balance	84,149	$ 10	55,527	$ 3
Maximum month-end balance	$ 78,015		$ 117,350
During period	3.71%		2.47%
End of period	3.25%		3.25%
FHLB Short-term advances
Short-term borrowings
Balance as of end of period	$ 200,000		$ 200,000
Average daily balance	168,750		60,073
Maximum month-end balance	$ 200,000		$ 200,000
During period	1.71%		1.71%
End of period	3.20%		3.20%

Long-Term Debt (Details)

Long-Term Debt (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
Long-Term Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Long-Term Debt
Face Value	$ 63,010	$ 63,010
Carrying Amount	58,836	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	$ 3,526	$ 3,492
Period End Interest Rate	6.74%	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	$ 5,289	$ 5,238
Period End Interest Rate	5.09%	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	$ 21	$ 203
Fixed interest rate	7.81%	7.81%

Financial Instruments with Of_3

Financial Instruments with Off-Balance Sheet Risk (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financial Instruments with Off Balance Sheet Risk
Amount of credit risk	$ 797,159	$ 678,644
Commitments to extend credit
Financial Instruments with Off Balance Sheet Risk
Amount of credit risk	785,745	668,115
Standby letters of credit
Financial Instruments with Off Balance Sheet Risk
Amount of credit risk	$ 11,414	$ 10,529

Financial Instruments with Off

Financial Instruments with Off Balance Sheet Risk - Narrative (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Letter of credit with FHLB
Financial Instruments with Off Balance Sheet Risk
Outstanding letters of credit	$ 0	$ 150
Letter of credit with Bank of North Dakota
Financial Instruments with Off Balance Sheet Risk
Outstanding letters of credit	0	0
Collateralized loans	$ 224,000	$ 229,700

Share-Based Compensation - Plan

Share-Based Compensation - Plan Information (Details) - 2019 Equity Incentive Plan - shares	9 Months Ended
	Sep. 30, 2022	May 06, 2019
Share-Based Compensation
Awards authorized		1,100,000
Restricted stock awards
Share-Based Compensation
Awards issued	922,010

Share-Based Compensation - Acti

Share-Based Compensation - Activity in stock (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Additional disclosures
Compensation expense	$ 351	$ 545	$ 1,400	$ 1,800
Restricted Stock Awards and Units.
Restricted Stock Awards and Units
Outstanding at beginning of period			260,850	325,030
Granted			102,265	66,664
Vested			(107,370)	(101,108)
Forfeited or cancelled			(10,624)
Outstanding at end of period	245,121	290,586	245,121	290,586
Weighted Average Grant Date Fair Value
Outstanding at beginning of period			$ 21.04	$ 19.48
Granted			25.44	26.63
Vested			19.19	20.46
Forfeited or cancelled			23.71
Outstanding at end of period	$ 23.57	$ 20.77	$ 23.57	$ 20.77
Additional disclosures
Unrecognized compensation cost	$ 3,000		$ 3,000
Weighted average period			2 years 9 months 18 days

Income Taxes - Reconciliation b

Income Taxes - Reconciliation between applicable income taxes and statutory federal tax rate (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Tax amount
Taxes at statutory federal income tax rate	$ 2,637	$ 3,598	$ 7,906	$ 10,993
Tax exempt income	(133)	(134)	(372)	(434)
State income taxes, net of federal benefits	406	756	1,515	2,407
Nondeductible items and other	30	(156)	(496)	(596)
Applicable income taxes	$ 2,940	$ 4,064	$ 8,553	$ 12,370
Percentage of pretax income
Taxes at statutory federal income tax rate (as percentage)	21%	21%	21%	21%
Tax exempt income (as percentage)	(1.10%)	(0.80%)	(1.00%)	(0.80%)
State income taxes, net of federal benefits (as percentage)	3.20%	4.40%	4%	4.60%
Nondeductible items and other (as percentage)	0.20%	(0.90%)	(1.30%)	(1.10%)
Applicable income taxes (as percentage)	23.30%	23.70%	22.70%	23.70%

Income Taxes - Uncertain Tax Po

Income Taxes - Uncertain Tax Positions (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Income Taxes
Unrecognized tax benefits	$ 0

Tax Credit Investments - Tax cr

Tax Credit Investments - Tax credits (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Tax Credit Investments [Line items]
Investment	$ 17,906	$ 7,906
Unfunded Commitment	15,559	6,999
Proportional amortization
Tax Credit Investments [Line items]
Investment	17,906	7,906
Unfunded Commitment	$ 15,559	$ 6,999

Tax Credit Investments - Amorti

Tax Credit Investments - Amortization expense and tax benefit recognized (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Tax Credit Investments [Line items]
Intangible amortization expense	$ 1,324	$ 1,088	$ 3,430	$ 3,327
Income tax benefit	2,940	$ 4,064	8,553	$ 12,370
Housing projects
Tax Credit Investments [Line items]
Intangible amortization expense	109		220
Income tax benefit	(146)		(303)
Low income housing tax credit \| Housing projects
Tax Credit Investments [Line items]
Intangible amortization expense	109		220
Income tax benefit	$ (146)		$ (303)

Segment Reporting (Details)

Segment Reporting (Details) $ in Thousands	3 Months Ended		9 Months Ended
Segment Reporting (Details) $ in Thousands	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) segment item	Sep. 30, 2021 USD ($)
Segment Reporting
Number of operating segments \| segment			4
Number of banking offices \| item			14
Key metrics related to segments
Net interest income	$ 28,316	$ 21,132	$ 72,765	$ 64,310
Provision for loan losses		(2,000)		(2,000)
Noninterest income	27,010	36,040	85,706	113,669
Noninterest expense	42,767	42,041	120,822	127,633
Net income before taxes	12,559	17,131	37,649	52,346
Corporate Administration
Key metrics related to segments
Net interest income	(589)	(535)	(1,711)	(1,361)
Noninterest income	56	22	91	(6)
Noninterest expense	10,588	9,635	31,585	27,152
Net income before taxes	(11,121)	(10,148)	(33,205)	(28,519)
Banking \| Operating Segments
Key metrics related to segments
Net interest income	28,512	21,168	72,816	64,236
Provision for loan losses		(2,000)		(2,000)
Noninterest income	1,723	1,576	4,602	4,564
Noninterest expense	19,990	11,403	48,303	33,401
Net income before taxes	10,245	13,341	29,115	37,399
Retirement and Benefit Services \| Operating Segments
Key metrics related to segments
Noninterest income	16,597	18,031	50,536	53,157
Noninterest expense	6,130	10,320	21,160	30,420
Net income before taxes	10,467	7,711	29,376	22,737
Wealth Management \| Operating Segments
Key metrics related to segments
Noninterest income	4,852	5,295	15,726	15,419
Noninterest expense	1,576	2,219	5,062	6,682
Net income before taxes	3,276	3,076	10,664	8,737
Mortgage \| Operating Segments
Key metrics related to segments
Net interest income	393	499	1,660	1,435
Noninterest income	3,782	11,116	14,751	40,535
Noninterest expense	4,483	8,464	14,712	29,978
Net income before taxes	$ (308)	$ 3,151	$ 1,699	$ 11,992

Earnings Per Share - Two-class

Earnings Per Share - Two-class method (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share
Net Income	$ 9,619	$ 13,067	$ 29,096	$ 39,976
Dividends and undistributed earnings allocated to participating securities	90	196	312	628
Net income available to common shareholders	$ 9,529	$ 12,871	$ 28,784	$ 39,348
Weighted-average common shares outstanding for basic earnings per share	19,987	17,205	18,186	17,182
Dilutive effect of stock-based awards	243	294	245	306
Weighted-average common shares outstanding for diluted earnings per share	20,230	17,499	18,431	17,488
Earnings per common share:
Basic earnings per common share	$ 0.48	$ 0.75	$ 1.58	$ 2.29
Diluted earnings per common share	$ 0.47	$ 0.74	$ 1.56	$ 2.26

Derivative Instruments (Details

Derivative Instruments (Details) - Not designated as hedging - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Derivative Instruments
Fair Value, Derivative Assets	$ 7,970	$ 3,397
Fair Value, Derivative Liabilities	6,742	1,368
Notional Amount, Derivative Assets	97,117	207,560
Notional Amount, Derivative Liabilities	66,420	44,826
Interest rate swaps \| Other assets
Derivative Instruments
Fair Value, Derivative Assets	6,608	1,366
Notional Amount, Derivative Assets	43,784	44,826
Interest rate swaps \| Accrued expenses and other liabilities
Derivative Instruments
Fair Value, Derivative Liabilities	6,608	1,368
Notional Amount, Derivative Liabilities	43,784	44,826
Interest rate lock commitments \| Other assets
Derivative Instruments
Fair Value, Derivative Assets		1,507
Notional Amount, Derivative Assets		52,316
Interest rate lock commitments \| Accrued expenses and other liabilities
Derivative Instruments
Fair Value, Derivative Liabilities	134
Notional Amount, Derivative Liabilities	22,636
Forward loan sales commitments \| Other assets
Derivative Instruments
Fair Value, Derivative Assets	10	490
Notional Amount, Derivative Assets	333	13,418
TBA mortgage backed securities \| Other assets
Derivative Instruments
Fair Value, Derivative Assets	1,352	34
Notional Amount, Derivative Assets	$ 53,000	$ 97,000

Derivative Instruments - Gain (

Derivative Instruments - Gain (loss) recognized on derivatives instruments (Details) - Not designated as hedging - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Gain (loss) recognized on derivative instruments
Total gain/(loss) from derivative instruments	$ (938)	$ (2,981)	$ 2,717	$ (4,492)
Interest rate swaps \| Other noninterest income
Gain (loss) recognized on derivative instruments
Total gain/(loss) from derivative instruments	1	1	2	2
Interest rate lock commitments \| Mortgage banking
Gain (loss) recognized on derivative instruments
Total gain/(loss) from derivative instruments	(1,724)	(1,793)	(1,871)	(7,298)
Forward loan sales commitments \| Mortgage banking
Gain (loss) recognized on derivative instruments
Total gain/(loss) from derivative instruments	(532)	(499)	(480)	(2,061)
TBA mortgage backed securities \| Mortgage banking
Gain (loss) recognized on derivative instruments
Total gain/(loss) from derivative instruments	$ 1,317	$ (690)	$ 5,066	$ 4,865

Derivative Instruments - Collat

Derivative Instruments - Collateral (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Derivative Instruments
Collateral held by third parties	$ 0	$ 15

Regulatory Matters (Details)

Regulatory Matters (Details) $ in Thousands	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Common equity tier 1 capital to risk weighted assets
Actual (Amount)	$ 381,019	$ 314,628
Requirements for Capital Adequacy Purposes (Amount)	$ 125,839	$ 96,647
Actual (Ratio)	0.1363	0.1465
Requirements for Capital Adequacy Purposes (Ratio)	0.0450	0.0450
Tier 1 capital to risk weighted assets
Actual (Amount)	$ 389,834	$ 323,358
Requirements for Capital Adequacy Purposes (Amount)	$ 167,785	$ 128,862
Actual (Ratio)	0.1394	0.1506
Requirements for Capital Adequacy Purposes (Ratio)	0.0600	0.0600
Total capital to risk weighted assets
Actual (Amount)	$ 470,802	$ 400,263
Requirements for Capital Adequacy Purposes (Amount)	$ 223,713	$ 171,816
Actual (Ratio)	0.1684	0.1864
Requirements for Capital Adequacy Purposes (Ratio)	0.0800	0.0800
Tier 1 capital to average assets
Actual (Amount)	$ 389,834	$ 323,358
Requirements for Capital Adequacy Purposes (Amount)	$ 144,131	$ 132,112
Actual (Ratio)	0.1082	0.0979
Requirements for Capital Adequacy Purposes (Ratio)	0.0400	0.0400
Bank
Common equity tier 1 capital to risk weighted assets
Actual (Amount)	$ 363,457	$ 297,453
Requirements for Capital Adequacy Purposes (Amount)	125,754	96,538
Minimum to be Well Capitalized Under Prompt Corrective Action (Amount)	$ 181,645	$ 139,444
Actual (Ratio)	0.1301	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)	$ 363,457	$ 297,453
Requirements for Capital Adequacy Purposes (Amount)	167,672	128,718
Minimum to be Well Capitalized Under Prompt Corrective Action (Amount)	$ 223,563	$ 171,624
Actual (Ratio)	0.1301	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)	$ 394,425	$ 324,328
Requirements for Capital Adequacy Purposes (Amount)	223,562	171,624
Minimum to be Well Capitalized Under Prompt Corrective Action (Amount)	$ 279,454	$ 214,530
Actual (Ratio)	0.1411	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)	$ 363,457	$ 297,453
Requirements for Capital Adequacy Purposes (Amount)	130,728	132,039
Minimum to be Well Capitalized Under Prompt Corrective Action (Amount)	$ 163,410	$ 165,049
Actual (Ratio)	0.1112	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		9 Months Ended
Stock Repurchase Program (Details) - shares	Feb. 18, 2021	Sep. 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	Sep. 30, 2022	Dec. 31, 2021
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale, at fair value	$ 729,110	$ 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	596,989	707,157
Mortgage backed securities - Commercial
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale, at fair value	65,283	90,913
Asset backed securities
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale, at fair value	35	54
Corporate bonds
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale, at fair value	62,970	50,422
Recurring
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale, at fair value	729,110	853,649
Derivative instruments	7,970	3,397
Derivative liabilities	6,742	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	3,833	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	596,989	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	65,283	90,913
Recurring \| Asset backed securities
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale, at fair value	35	54
Recurring \| Corporate bonds
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale, at fair value	62,970	50,422
Recurring \| Level 2
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale, at fair value	729,110	853,649
Derivative instruments	7,970	3,397
Derivative liabilities	6,742	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	3,833	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	596,989	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	65,283	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	35	54
Recurring \| Level 2 \| Corporate bonds
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale, at fair value	$ 62,970	$ 50,422

Fair Value of Assets and Liab_4

Fair Value of Assets and Liabilities - Nonrecurring Basis (Details) - Non recurring - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair value, assets and liabilities measured on recurring and non recurring basis
Impaired loans	$ 4,813	$ 2,469
Foreclosed assets	904	885
Servicing rights	2,780	1,880
Loans held for sale
Fair value, assets and liabilities measured on recurring and non recurring basis
Loans held for sale	26,129	46,490
Impaired loans
Fair value, assets and liabilities measured on recurring and non recurring basis
Net impairment	264	283
Level 2 \| Loans held for sale
Fair value, assets and liabilities measured on recurring and non recurring basis
Loans held for sale	26,129	46,490
Level 3
Fair value, assets and liabilities measured on recurring and non recurring basis
Impaired loans	4,813	2,469
Foreclosed assets	904	885
Servicing rights	$ 2,780	$ 1,880

Fair Value of Assets and Liab_5

Fair Value of Assets and Liabilities - Valuation Technique (Details) - Level 3 $ in Thousands	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Impaired loans \| Appraisal value \| Property specific adjustment
Valuation techniques and significant unobservable inputs
Impaired loans	$ 4,813	$ 2,469
Foreclosed assets \| Appraisal value \| Property specific adjustment
Valuation techniques and significant unobservable inputs
Foreclosed assets	$ 904	$ 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	$ 2,780	$ 1,880
Servicing rights \| Prepayment speed assumptions \| Minimum
Valuation techniques and significant unobservable inputs
Servicing Asset, Measurement Input	100	161
Servicing rights \| Prepayment speed assumptions \| Maximum
Valuation techniques and significant unobservable inputs
Servicing Asset, Measurement Input	136	327
Servicing rights \| Prepayment speed assumptions \| Weighted average
Valuation techniques and significant unobservable inputs
Servicing Asset, Measurement Input	112	237
Servicing rights \| Discount rate
Valuation techniques and significant unobservable inputs
Servicing Asset, Measurement Input	0.100	0.095
Servicing rights \| Discount rate \| Weighted average
Valuation techniques and significant unobservable inputs
Servicing Asset, Measurement Input	0.100	0.095

Fair Value of Assets and Liab_6

Fair Value of Assets and Liabilities - Off-Balance Sheet Credit-Related Commitments (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financial Assets
Investment securities held-to-maturity	$ 273,306	$ 349,677
Carrying Amount
Financial Assets
Cash and cash equivalents	54,167	242,311
Investment securities held-to-maturity	326,410	352,061
Loans, net	2,287,263	1,726,448
Accrued interest receivable	11,256	8,537
Bank-owned life insurance	33,777	33,156
Financial Liabilities
Noninterest-bearing deposits	905,228	938,840
Interest-bearing deposits	1,834,556	1,748,799
Time deposits	222,027	232,912
Short-term borrowings	253,830
Long-term debt	58,836	58,933
Accrued interest payable	1,405	1,674
Estimated Fair Value
Financial Assets
Cash and cash equivalents	54,167	242,311
Investment securities held-to-maturity	273,306	349,677
Loans, net	2,256,887	1,760,784
Accrued interest receivable	11,256	8,537
Bank-owned life insurance	33,777	33,156
Financial Liabilities
Noninterest-bearing deposits	905,228	938,840
Interest-bearing deposits	1,834,556	1,748,799
Time deposits	217,974	232,970
Short-term borrowings	253,830
Long-term debt	55,480	57,772
Accrued interest payable	1,405	1,674
Level 1 \| Estimated Fair Value
Financial Assets
Cash and cash equivalents	54,167	242,311
Accrued interest receivable	11,256	8,537
Financial Liabilities
Short-term borrowings	253,830
Accrued interest payable	1,405	1,674
Level 2 \| Estimated Fair Value
Financial Assets
Investment securities held-to-maturity	273,306	349,677
Bank-owned life insurance	33,777	33,156
Financial Liabilities
Noninterest-bearing deposits	905,228	938,840
Interest-bearing deposits	1,834,556	1,748,799
Long-term debt	55,480	57,772
Level 3 \| Estimated Fair Value
Financial Assets
Loans, net	2,256,887	1,760,784
Financial Liabilities
Time deposits	$ 217,974	$ 232,970