0001558370-22-017331 | 10-Q | XBRL Viewer | Orange County Bancorp INC DE

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2022	Oct. 31, 2022
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2022
Entity File Number	001-40711
Entity Registrant Name	Orange County Bancorp, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	26-1135778
Entity Address, Address Line One	212 Dolson Avenue
Entity Address, City or Town	Middletown
Entity Address State Or Province	NY
Entity Address, Postal Zip Code	10940
City Area Code	845
Local Phone Number	341-5000
Title of 12(b) Security	Common Stock, par value $0.50 per share
Trading Symbol	OBT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		5,642,621
Entity Central Index Key	0001754226
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
ASSETS
Cash and due from banks	$ 180,249	$ 306,179
Investment securities - available-for-sale	547,272	464,797
Restricted investment in bank stocks	3,382	2,217
Loans	1,547,704	1,291,428
Allowance for loan losses	(22,888)	(17,661)
Loans, net	1,524,816	1,273,767
Premises and equipment, net	14,596	14,601
Accrued interest receivable	5,554	6,643
Bank owned life insurance	40,222	39,513
Goodwill	5,359	5,359
Intangible assets	1,464	1,678
Other assets	45,456	27,829
TOTAL ASSETS	2,368,370	2,142,583
Deposits:
Noninterest bearing	788,106	701,645
Interest bearing	1,399,447	1,212,739
Total deposits	2,187,553	1,914,384
Note payable	3,000	3,000
Subordinated notes, net of issuance costs	19,431	19,376
Accrued expenses and other liabilities	22,196	22,987
TOTAL LIABILITIES	2,232,180	1,959,747
STOCKHOLDERS' EQUITY
Common stock, $0.50 par value; 15,000,000 shares authorized; 5,683,304 issued; 5,642,121 and 5,637,376 outstanding, at September 30, 2022 and December 31, 2021, respectively	2,842	2,842
Surplus	120,068	119,825
Retained Earnings	76,860	64,941
Accumulated other comprehensive income (loss), net of taxes	(62,315)	(3,443)
Treasury stock, at cost; 41,183 and 45,928 shares at September 30, 2022 and December 31, 2021, respectively	(1,265)	(1,329)
TOTAL STOCKHOLDERS' EQUITY	136,190	182,836
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 2,368,370	$ 2,142,583

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
Common stock, Par value (in dollars per share)	$ 0.50	$ 0.50
Common stock, Authorized (in shares)	15,000,000	15,000,000
Common stock, Issued (in shares)	5,683,304	5,683,304
Common stock, Outstanding (in shares)	5,642,121	5,637,376
Treasury stock (in shares)	41,183	45,928

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
INTEREST INCOME
Interest and fees on loans	$ 18,113	$ 15,104	$ 48,319	$ 42,364
Interest on investment securities:
Taxable	2,848	1,213	6,735	3,497
Tax exempt	621	417	1,655	1,189
Interest on Federal funds sold and other	1,259	126	1,886	230
TOTAL INTEREST INCOME	22,841	16,860	58,595	47,280
INTEREST EXPENSE
Savings and NOW accounts	1,099	591	2,320	1,801
Time deposits	55	117	194	412
Note payable	42	42	126	126
Subordinated notes	230	230	692	689
TOTAL INTEREST EXPENSE	1,426	980	3,332	3,028
NET INTEREST INCOME	21,415	15,880	55,263	44,252
Provision for loan losses	2,084	1,008	8,517	1,883
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	19,331	14,872	46,746	42,369
NONINTEREST INCOME
Service charges on deposit accounts	182	166	511	499
Trust income	1,176	1,230	3,569	3,537
Investment advisory income	1,085	1,176	3,385	3,588
Earnings on bank owned life insurance	240	209	709	554
Other	250	247	741	770
TOTAL NONINTEREST INCOME	2,933	3,028	8,915	8,948
NONINTEREST EXPENSE
Salaries	5,863	4,970	16,631	14,243
Employee benefits	1,483	958	4,258	2,960
Occupancy expense	1,063	1,024	3,391	2,956
Professional fees	766	880	2,885	2,810
Directors' fees and expenses	249	251	754	745
Computer software expense	1,276	1,120	3,629	3,209
FDIC assessment	384	333	1,006	889
Advertising expenses	372	297	1,127	865
Advisor expenses related to trust income	28	134	186	395
Telephone expenses	192	150	505	420
Intangible amortization	71	71	214	214
Other	808	785	2,322	2,050
TOTAL NONINTEREST EXPENSE	12,555	10,973	36,908	31,756
Income before income taxes	9,709	6,927	18,753	19,561
Provision for income taxes	1,856	1,351	3,460	3,767
NET INCOME	$ 7,853	$ 5,576	$ 15,293	$ 15,794
Basic earnings per share (in dollars per share)	$ 1.40	$ 1.06	$ 2.72	$ 3.33
Diluted earnings per share (in dollars per share)	$ 1.40	$ 1.06	$ 2.72	$ 3.33
Weighted average shares outstanding, Basic (in shares)	5,623,172	5,249,876	5,619,897	4,743,348
Weighted average shares outstanding, Diluted (in shares)	5,623,172	5,249,876	5,619,897	4,743,348

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
Net Income	$ 7,853	$ 5,576	$ 15,293	$ 15,794
Unrealized gains/losses on securities:
Unrealized holding gains/(losses) arising during the period	(21,201)	(134)	(75,262)	(3,856)
Tax effect	(4,452)	(28)	(15,805)	(810)
Net of tax	(16,749)	(106)	(59,457)	(3,046)
Defined benefit pension plans:
Net gain arising during the period	240	6	720	20
Reclassification adjustment for amortization of prior service cost and net gains included in net periodic pension cost	(7)		(21)
Tax effect	49	1	147	4
Net of tax	198	5	594	16
Deferred compensation liability:
Unrealized loss	(4)	(4)	(11)	(12)
Tax effect	(1)	(1)	(2)	(3)
Net of tax	(3)	(3)	(9)	(9)
Total other comprehensive income/(loss)	(16,554)	(104)	(58,872)	(3,039)
Total comprehensive income/(loss)	$ (8,701)	$ 5,472	$ (43,579)	$ 12,755

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Surplus	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Total
Beginning balance at Dec. 31, 2020	$ 2,266	$ 85,111	$ 47,683	$ 1,819	$ (1,456)	$ 135,423
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income			15,794			15,794
Other comprehensive loss, net of taxes				(3,039)		(3,039)
Cash dividends declared			(2,907)			(2,907)
Issue of restricted stock		(436)			436
Treasury stock purchased					(379)	(379)
Restricted stock expense		390				390
Stock-based compensation		(1)			70	69
Issuance of stock offering, net of costs	576	34,676				35,252
Ending balance at Sep. 30, 2021	2,842	119,740	60,570	(1,220)	(1,329)	180,603
Beginning balance at Jun. 30, 2021	2,266	84,936	56,118	(1,116)	(1,293)	140,911
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income			5,576			5,576
Other comprehensive loss, net of taxes				(104)		(104)
Cash dividends declared			(1,124)			(1,124)
Treasury stock purchased					(36)	(36)
Restricted stock expense		128				128
Issuance of stock offering, net of costs	576	34,676				35,252
Ending balance at Sep. 30, 2021	2,842	119,740	60,570	(1,220)	(1,329)	180,603
Beginning balance at Dec. 31, 2021	2,842	119,825	64,941	(3,443)	(1,329)	182,836
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income			15,293			15,293
Other comprehensive loss, net of taxes				(58,872)		(58,872)
Cash dividends declared			(3,374)			(3,374)
Treasury stock purchased					(308)	(308)
Restricted stock expense		133				133
Stock-based compensation		110			372	482
Ending balance at Sep. 30, 2022	2,842	120,068	76,860	(62,315)	(1,265)	136,190
Beginning balance at Jun. 30, 2022	2,842	119,946	70,131	(45,761)	(1,435)	145,723
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income			7,853			7,853
Other comprehensive loss, net of taxes				(16,554)		(16,554)
Cash dividends declared			(1,124)			(1,124)
Treasury stock purchased					(119)	(119)
Restricted stock expense		33				33
Stock-based compensation		89			289	378
Ending balance at Sep. 30, 2022	$ 2,842	$ 120,068	$ 76,860	$ (62,315)	$ (1,265)	$ 136,190

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
CONDENSED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Cash dividends declared per share	$ 0.20	$ 0.20	$ 0.60	$ 0.60
Restricted stock issued (in shares)				15,162
Treasury stock purchased (in shares)	3,035	1,061	7,652	13,292
Stock-based compensation (in shares)	9,637		12,397	2,404
Stock issuance costs		$ 1,150,000		$ 1,150,000

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities
Net income	$ 15,293	$ 15,794
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	8,517	1,883
Depreciation	1,150	1,002
Accretion on loans	(2,298)	(4,321)
Amortization of intangibles	214	214
Amortization of subordinated notes issuance costs	55	52
Restricted stock expense	133	390
Stock-based compensation	482	69
Net amortization of investment premiums	1,339	1,583
Earnings on bank owned life insurance	(709)	(554)
Net change in:
Accrued interest receivable	1,089	(618)
Other assets	(1,230)	(3,379)
Other liabilities	(799)	2,438
Net cash from operating activities	23,236	14,553
Cash flows from investing activities
Purchases of investment securities available-for-sale	(210,589)	(193,490)
Proceeds from sales and paydowns of investment securities available-for-sale	46,360	68,051
Proceeds from maturities and calls of investment securities available-for-sale	5,154	28,013
(Purchase) proceeds of restricted investment in bank stocks	(1,189)	(783)
Proceeds from redemptions of restricted investment in bank stocks	24	15
Loans purchased		(8,232)
Net increase in loans	(257,268)	(122,301)
Additions to premises and equipment	(1,145)	(1,367)
Purchase of bank owned life insurance		(10,200)
Net cash used by investing activities	(418,653)	(240,294)
Cash flows from financing activities
Net increase in deposits	273,169	462,614
Proceeds of issuance of stock offering , net of costs		35,252
Cash dividends paid	(3,374)	(2,907)
Purchases of treasury stock	(308)	(379)
Net cash from financing activities	269,487	494,580
Net change in cash and cash equivalents	(125,930)	268,839
Beginning cash and cash equivalents	306,179	121,232
Ending cash and cash equivalents	180,249	390,071
Supplemental cash flow information:
Interest paid	3,550	3,289
Income taxes paid	4,596	2,763
Supplemental noncash disclosures:
Lease liabilities arising from obtaining right-of-use assets	$ 2,537	$ 3,198

Nature of Operations and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations and Summary of Significant Accounting Policies

Note 1 — Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations and Principles of Consolidation: The unaudited consolidated financial statements include Orange County Bancorp, Inc., a Delaware bank holding company (“Orange County Bancorp”) and its wholly owned subsidiaries: Orange Bank & Trust Company, a New York trust company (the “Bank”) and Hudson Valley Investment Advisors (“HVIA”), a Registered Investment Advisor, together referred to as the “Company.” Intercompany transactions and balances are eliminated in consolidation.

The Company provides commercial and consumer banking services to individuals, small businesses and local municipal governments as well as trust and investment services through the Bank and HVIA. The Company is headquartered in Middletown, New York, with eight locations in Orange County, New York, seven in Westchester County, New York, two in Rockland County, New York, and one in Bronx County, New York. Its primary deposit products are checking, savings, and term certificate accounts, and its primary lending products are commercial real estate, commercial and residential mortgage loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. There are no significant concentrations of loans to any one industry or customer. However, the customers’ ability to repay their loans is dependent on the real estate and general economic conditions in the areas in which they operate.

Assets held by the Company in an agency or fiduciary capacity for its customers are excluded from the consolidated financial statements since they do not constitute assets of the Company. Assets held by the Company in an agency or fiduciary capacity for its customers amounted to $1,157,837 and $1,325,894 at September 30, 2022 and December 31, 2021, respectively.

Certain information and footnote disclosures normally included in the audited consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2021 for Orange County Bancorp, Inc. contained in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 30, 2022. In the opinion of the management of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting solely of normal and recurring accruals) necessary to present fairly the financial position as of September 30, 2022, the results of operations, comprehensive income/(loss), changes in stockholders’ equity for the three and nine months ended September 30, 2022 and 2021 and cash flow statements for the nine months ended September 30, 2022 and 2021. The results of operations for any interim period are not necessarily indicative of the results that may be expected for the full year or for any future period. Certain reclassifications have been made to the financial statements to conform with prior period presentations.

Use of Estimates: To prepare financial statements in conformity with U.S. generally accepted accounting principles, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ.

Recent Accounting Pronouncements: In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The ASU made certain targeted amendments specific to troubled debt restructurings (TDRs) by creditors and vintage disclosure related to gross write-offs. Upon adoption, the Corporation will be required to apply the loan and refinancing and restructuring guidance to determine whether a modification results in a new loan or a continuation of an existing loan, rather than applying the recognition and measurement guidance for TDRs. The ASU also requires companies to disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases within scope of Subtopic 326-20. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022 for entities that have adopted ASU 2016-13, otherwise effective date is the same as ASU 2016-13. The Corporation will adopt ASU 2016-13 effective January 1, 2023 and will simultaneously implement ASU 2022-02.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments — Credit Losses Topic 326: Measurement of Credit Losses on Financial Instruments. The objective of the ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date by replacing the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to form credit loss estimates. In November 2019, the FASB adopted changes to delay the effective date of ASU 2016-13 to January 2023 for certain entities, including certain Securities and Exchange Commission filers, public business entities, and private companies. As a result, the Company is eligible for the delay and will adopt the ASU effective January 1, 2023. The Company has been working with a third-party vendor in the development of certain methodologies and modeling techniques that will be implemented to accommodate this adoption. The modeling contemplates projected loss drivers derived from a cross-section of as many 30 peer institutions with similar geographic, loan concentration, and charge-off history to that of the Company. Correlation studies were conducted to determine the predictive strength of certain macroeconomic factors with those observed loss histories. The Company will be using a discounted cash flow analysis, in conjunction with macroeconomic forecasts to establish probability of default and loss given default parameters; which will ultimately support the derivation of projected losses based on the amortized cost of the segmented loan portfolio. At this time, the Company is modeling projected losses in parallel with the current incurred loss methodology. Further, the Company is currently working with a third-party analytics consulting firm for the purposes of validating the underlying modeling assumptions, loss drivers, data mapping, and governance documentation.

Investment Securities

9 Months Ended

Sep. 30, 2022

Investment Securities

Investment Securities

Note 2 — Investment Securities

The amortized cost and fair value of investment securities at September 30, 2022 and December 31, 2021:


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Available-for-sale September 30, 2022
U.S. government agencies	$	107,694	$	34	$	(10,467)	$	97,261
Mortgage-backed securities		374,372		—		(46,047)		328,325
Corporate Securities		28,565		—		(1,998)		26,567
Obligations of states and political subdivisions		113,258		41		(18,180)		95,119
Total debt securities	$	623,889	$	75	$	(76,692)	$	547,272


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Available-for-sale December 31, 2021
U.S. government agencies	$	80,596	$	440	$	(1,330)	$	79,706
Mortgage-backed securities		272,931		1,285		(3,784)		270,432
Corporate Securities		20,081		278		(148)		20,211
Obligations of states and political subdivisions		92,545		2,149		(246)		94,448
Total debt securities	$	466,153	$	4,152	$	(5,508)	$	464,797

There were no proceeds from sales of securities and associated gains and losses for the three and nine months ended September 30, 2022 and 2021.

The amortized cost and fair value of debt securities as of September 30, 2022 are shown below by contractual maturity. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	Available-for-sale
	Amortized		Fair
	Cost		Value
Due in one year or less	$	4,067	$	4,083
Due after one through five years		26,077		25,102
Due after five through ten years		73,571		65,873
Due after ten years		145,802		123,889
		249,517		218,947
Mortgage-backed securities		374,372		328,325
Total debt securities	$	623,889	$	547,272

Securities pledged at September 30, 2022 and December 31, 2021 had a carrying amount of $424,196 and $233,907 and were pledged to secure public deposits.

At September 30, 2022 and December 31, 2021, there were no holdings of securities of any one issuer, other than the US Government and its agencies, in an amount greater than 10% of stockholders’ equity.

The following tables summarize securities with unrealized losses at September 30, 2022 and December 31, 2021, aggregated by major security types and length of time in continuous loss position:


	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Available-for-sale September 30, 2022
U.S. government agencies	$	58,924	$	(4,207)	$	32,962	$	(6,260)	$	91,886	$	(10,467)
Mortgage-backed securities		196,565		(20,462)		121,896		(25,585)		318,461		(46,047)
Corporate Securities		14,203		(859)		8,363		(1,139)		22,566		(1,998)
Obligations of states and political subdivisions		78,099		(14,952)		10,985		(3,228)		89,084		(18,180)
Total debt securities	$	347,791	$	(40,480)	$	174,206	$	(36,212)	$	521,997	$	(76,692)


	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Available-for-sale December 31, 2021
U.S. government agencies	$	10,337	$	(121)	$	32,210	$	(1,209)	$	42,547	$	(1,330)
Mortgage-backed securities		177,506		(3,273)		14,134		(511)		191,640		(3,784)
Corporate Securities		9,354		(148)		—		—		9,354		(148)
Obligations of states and political subdivisions		13,349		(138)		3,298		(108)		16,647		(246)
Total debt securities	$	210,546	$	(3,680)	$	49,642	$	(1,828)	$	260,188	$	(5,508)

There was no other than temporary impairment loss recognized on any securities at September 30, 2022 or December 31, 2021.

As of September 30, 2022, the Company’s securities portfolio consisted of 293 securities, 260 of which were in an unrealized loss position. As of December 31, 2021, the Company’s securities portfolio consisted of 252 securities, 78 of which were in an unrealized loss position. Unrealized losses are primarily related to the Company’s mortgage backed securities, U.S. government agency securities, and investments in obligations of states and political subdivisions as discussed below.

At September 30, 2022, mortgage-backed securities held by the Company were issued by U.S. government sponsored entities and agencies. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these securities, and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other than temporarily impaired at September 30, 2022.

The Company’s unrealized losses on U.S. government agency securities relate primarily to its investment in Small Business Administration (“SBA”) issued securities. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these securities, and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other than temporarily impaired at September 30, 2022.

At September 30, 2022, the Company’s unrealized loss on obligations of state and political subdivisions was related to the decline in fair value. The fair value decline is driven by interest rate impact and not credit quality. The Company does not have the intent to sell these securities and it is likely that the Company will not be required to sell the securities before their anticipated recovery. Accordingly, the Company does not consider these securities to be other than temporarily impaired at September 30, 2022.

Loans

9 Months Ended

Sep. 30, 2022

Loans

Loans

Note 3 — Loans

Loans at September 30, 2022 and December 31, 2021 were as follows:


		September 30, 2022		December 31, 2021
Commercial and industrial	$	251,293	$	268,508
Commercial real estate		1,059,821		852,707
Commercial real estate construction		132,945		72,250
Residential real estate		73,552		65,248
Home equity		12,750		13,638
Consumer		17,343		19,077
Total	$	1,547,704	$	1,291,428

Included in commercial and industrial loans as of September 30, 2022 and December 31, 2021 were loans issued under the SBA’s Paycheck Protection Program (“PPP”) of $1,897 and $38,114, respectively.

The following tables present the activity in the allowance for loan losses by portfolio segment for each of the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended September 30, 2022
	Commercial				Commercial
	and		Commercial		Real Estate		Residential		Home
	Industrial		Real Estate		Construction		Real Estate		Equity		Consumer		Total
Allowance for loan losses:
Beginning balance	$	9,332	$	12,303	$	1,318	$	299	$	68	$	322	$	23,642
Provision for loan losses		573		1,110		279		60		1		61		2,084
Charge-offs		(2,817)		—		—		—		—		(70)		(2,887)
Recoveries		22		26		—		—		—		1		49
Ending balance	$	7,110	$	13,439	$	1,597	$	359	$	69	$	314	$	22,888


	Nine Months Ended September 30, 2022
	Commercial				Commercial
	and		Commercial		Real Estate		Residential		Home
	Industrial		Real Estate		Construction		Real Estate		Equity		Consumer		Total
Allowance for loan losses:
Beginning balance	$	4,901	$	11,183	$	964	$	272	$	80	$	261	$	17,661
Provision for loan losses		5,066		2,230		633		138		(11)		461		8,517
Charge-offs		(2,894)		—		—		(51)		—		(449)		(3,394)
Recoveries		37		26		—		—		—		41		104
Ending balance	$	7,110	$	13,439	$	1,597	$	359	$	69	$	314	$	22,888


	Three Months Ended September 30, 2021
	Commercial				Commercial
	and		Commercial		Real Estate		Residential		Home
	Industrial		Real Estate		Construction		Real Estate		Equity		Consumer		Total
Allowance for loan losses:
Beginning balance	$	4,946		10,536		948		301		60		258	$	17,049
Provision for loan losses		819		428		(149)		(70)		20		(40)		1,008
Charge-offs		(71)		(7)		—		—		—		(1)		(79)
Recoveries		3		59		—				—		—		62
Ending balance	$	5,697	$	11,017	$	799	$	231	$	80	$	217	$	18,041


	Nine Months Ended September 30, 2021
	Commercial				Commercial
	and		Commercial		Real Estate		Residential		Home
	Industrial		Real Estate		Construction		Real Estate		Equity		Consumer		Total
Allowance for loan losses:
Beginning balance	$	4,795	$	9,782	$	801	$	381	$	77	$	336	$	16,172
Provision for loan losses		896		1,272		(2)		(150)		3		(136)		1,883
Charge-offs		(176)		(110)		—		—		—		(8)		(294)
Recoveries		182		73		—		—		—		25		280
Ending balance	$	5,697	$	11,017	$	799	$	231	$	80	$	217	$	18,041

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2022 and December 31, 2021:


	Commercial				Commercial
	and		Commercial		Real Estate		Residential		Home
	Industrial		Real Estate		Construction		Real Estate		Equity		Consumer		Total
September 30, 2022
Allowance for loan losses:
Ending balance:
individually evaluated for impairment	$	2,721	$	390	$	—	$	—	$	—	$	—	$	3,111
collectively evaluated for impairment		4,389		13,049		1,597		359		69		314		19,777
Total ending allowance balance	$	7,110	$	13,439	$	1,597	$	359	$	69	$	314	$	22,888
Loans:
Ending balance:
individually evaluated for impairment	$	4,170	$	23,165	$	—	$	1,804	$	53	$	107	$	29,299
collectively evaluated for impairment		247,123		1,036,656		132,945		71,748		12,697		17,236		1,518,405
Total ending loans balance	$	251,293	$	1,059,821	$	132,945	$	73,552	$	12,750	$	17,343	$	1,547,704


	Commercial				Commercial
	and		Commercial		Real Estate		Residential		Home
	Industrial		Real Estate		Construction		Real Estate		Equity		Consumer		Total
December 31, 2021
Allowance for loan losses:
Ending balance:
individually evaluated for impairment	$	137	$	1,272	$	—	$	—	$	—	$	24	$	1,433
collectively evaluated for impairment		4,764		9,911		964		272		80		237		16,228
Total ending allowance balance	$	4,901	$	11,183	$	964	$	272	$	80	$	261	$	17,661
Loans:
Ending balance:
individually evaluated for impairment	$	952	$	23,523	$	—	$	1,227	$	50	$	114	$	25,866
collectively evaluated for impairment		267,556		829,184		72,250		64,021		13,588		18,963		1,265,562
Total ending loans balance	$	268,508	$	852,707	$	72,250	$	65,248	$	13,638	$	19,077	$	1,291,428

Included in the commercial and industrial loans collectively evaluated for impairment are PPP loans of $1,897 and $38,114 as of September 30, 2022 and December 31, 2021, respectively. PPP loans receivable are guaranteed by the SBA and have no allocation in the allowance for loan losses.

The following tables present loans individually evaluated for impairment recognized by class of loans as of September 30, 2022 and December 31, 2021:


	Unpaid				Allowance for
	Principal		Recorded		Loan Losses
	Balance		Investment		Allocated
September 30, 2022
With no related allowance recorded
Commercial and industrial	$	—	$	—	$	—
Commercial real estate		17,991		17,464		—
Commercial real estate construction		—		—		—
Residential real estate		1,816		1,804		—
Home equity		56		53		—
Consumer		—		—		—
Total	$	19,863	$	19,321	$	—
With an allowance recorded:
Commercial and industrial	$	4,172	$	4,170	$	2,721
Commercial real estate		5,721		5,701		390
Commercial real estate construction		—		—		—
Residential real estate		—		—		—
Home equity		—		—		—
Consumer		107		107		—
Total	$	10,000	$	9,978	$	3,111


	Unpaid				Allowance for
	Principal		Recorded		Loan Losses
	Balance		Investment		Allocated
December 31, 2021
With no related allowance recorded
Commercial and industrial	$	1	$	1	$	—
Commercial real estate		14,291		13,953		—
Commercial real estate construction		—		—		—
Residential real estate		1,155		1,155		—
Home equity		50		50		—
Consumer		—		—		—
Total	$	15,497	$	15,159	$	—
With an allowance recorded:
Commercial and industrial	$	951	$	951	$	137
Commercial real estate		9,593		9,570		1,272
Commercial real estate construction		—		—		—
Residential real estate		84		72		—
Home equity		—		—		—
Consumer		114		114		24
Total	$	10,742	$	10,707	$	1,433

The following tables present the average recorded investment and interest income of loans individually evaluated for impairment recognized by class of loans for the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended				Three Months Ended
	September 30, 2022				September 30, 2021
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized⁽¹⁾		Investment		Recognized⁽¹⁾
With no related allowance recorded
Commercial and industrial	$	—	$	—	$	15	$	—
Commercial real estate		17,553		158		13,614		147
Commercial real estate construction		578		—		578		—
Residential real estate		1,283		6		588		8
Home equity		—		—		25		—
Consumer		—		—		—		—
Total	$	19,414	$	164	$	14,820	$	155
With an allowance recorded:
Commercial and industrial	$	18,599	$	52	$	2,363	$	33
Commercial real estate		2,259		30		10,335		134
Commercial real estate construction		—		—		—		—
Residential real estate		—		—		74		1
Home equity		—		—		—		—
Consumer		108		1		118		1
Total	$	20,966	$	83	$	12,890	$	169

(1) Cash basis interest income approximates interest income recognized.


	Nine Months Ended				Nine Months Ended
	September 30, 2022				September 30, 2021
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized⁽¹⁾		Investment		Recognized⁽¹⁾
With no related allowance recorded
Commercial and industrial	$	—	$	—	$	32	$	1
Commercial real estate		17,549		476		13,620		442
Commercial real estate construction		578		—		578		—
Residential real estate		983		18		593		23
Home equity		—		—		25		1
Consumer		—		—		—		—
Total	$	19,110	$	494	$	14,848	$	467
With an allowance recorded:
Commercial and industrial	$	9,264	$	157	$	2,892	$	118
Commercial real estate		2,292		90		10,390		405
Commercial real estate construction		—		—		—		—
Residential real estate		—		—		77		2
Home equity		—		—		—		—
Consumer		110		4		120		5
Total	$	11,666	$	251	$	13,479	$	530

(1)

Cash basis interest income approximates interest income recognized.

The following table presents the recorded investment in non-accrual and loans past due over 90 days still on accrual by class of loans as of September 30, 2022 and December 31, 2021:


					Loans Past Due Over 90 Days
	Non-accrual				Still Accruing
	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Commercial and industrial	$	4,170	$	—	$	409	$	720
Commercial real estate		3,958		3,928		—		465
Commercial real estate construction		—		—		—		—
Residential real estate		1,146		578		—		—
Home equity		53		50		—		—
Consumer		—		4		456		208
Total	$	9,327	$	4,560	$	865	$	1,393

The following tables present the aging of the recorded investment in past-due loans as of September 30, 2022 and December 31, 2021 by class of loans:


	30-59 Days		60-89 Days		Greater Than		Total		Loans
	Past Due		Past Due		90 Days		Past Due		Not Past Due
September 30, 2022
Commercial and industrial	$	461	$	492	$	1,500	$	2,453	$	248,840
Commercial real estate		281		—		684		965		1,058,856
Commercial real estate construction		—		—		—		—		132,945
Residential real estate		—		591		1,146		1,737		71,815
Home equity		—		—		—		—		12,750
Consumer		92		28		456		576		16,767
Total	$	834	$	1,111	$	3,786	$	5,731	$	1,541,973


	30-59 Days		60-89 Days		Greater Than		Total		Loans
	Past Due		Past Due		90 Days		Past Due		Not Past Due
December 31, 2021
Commercial and industrial	$	541	$	1,519	$	720	$	2,780	$	265,728
Commercial real estate		—		2,873		1,161		4,034		848,673
Commercial real estate construction		—		—		—		—		72,250
Residential real estate		26		—		578		604		64,644
Home equity		—		58		50		108		13,530
Consumer		1,134		292		212		1,638		17,439
Total	$	1,701	$	4,742	$	2,721	$	9,164	$	1,282,264

As of September 30, 2022 and December 31, 2021, loans in the process of foreclosure were $2,064 and $2,024 respectively, of which $1,125 and $578 were secured by residential real estate.

As of September 30, 2022 and December 31, 2021, the Company has a recorded investment in troubled debt restructurings (“TDRs”) of $14,168 and $14,500 respectively. The Company has allocated $173 and $687 of specific allowance for these loans at September 30, 2022 and December 31, 2021, respectively, and there were no commitments to lend additional funds to borrowers whose loans were classified as TDRs. There were no restructured loans that defaulted within the three or nine months ended September 30, 2022 and September 30, 2021.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy.

There were no loans whose terms were modified resulting in TDRs during the three and nine months ended September 30, 2022 and September 30, 2021.

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes loans with an outstanding balance greater than $350 thousand and non-homogeneous loans, such as commercial and commercial real estate loans. This analysis is performed on an annual basis. The Company uses the following definitions for risk ratings:

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the institution’s credit position at some future date.

Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well- defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass-rated loans.

Based on the analysis performed as of September 30, 2022 and December 31, 2021, the risk category of loans by class of loans is as follows:


			Special
	Pass		Mention		Substandard		Doubtful		Loss		Total
September 30, 2022
Commercial and industrial	$	246,129	$	609	$	1,716	$	2,839	$	—	$	251,293
Commercial real estate		1,038,272		5,641		15,908		—		—		1,059,821
Commercial real estate construction		132,945		—		—		—		—		132,945
Residential real estate		71,815		—		1,737		—		—		73,552
Home equity		12,697		—		53		—		—		12,750
Consumer		17,236		—		107		—		—		17,343
Total	$	1,519,094	$	6,250	$	19,521	$	2,839	$	—	$	1,547,704


			Special
	Pass		Mention		Substandard		Doubtful		Loss		Total
December 31, 2021
Commercial and industrial	$	252,268	$	4,156	$	12,084	$	—	$	—	$	268,508
Commercial real estate		835,787		679		16,241		—		—		852,707
Commercial real estate construction		72,250		—		—		—		—		72,250
Residential real estate		64,094		—		1,154		—		—		65,248
Home equity		13,588		50		—		—		—		13,638
Consumer		18,963		—		114		—		—		19,077
Total	$	1,256,950	$	4,885	$	29,593	$	—	$	—	$	1,291,428

Loans to certain directors and principal officers of the Company, including their immediate families and companies in which they are affiliated, amounted to $11,922 and $5,076 at September 30, 2022 and December 31, 2021, respectively.

Fair Value

9 Months Ended

Sep. 30, 2022

Fair Value

Fair Value

Note 4 — Fair Value

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate fair value:

Investment Securities: The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2), using matrix pricing. Matrix pricing is a mathematical technique commonly used to price debt securities that are not actively traded, values debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3).

Impaired Loans and Other Real Estate Owned: The fair value of collateral dependent loans that are individually evaluated for impairment is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach and resulted in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted in accordance with the allowance policy.

Appraisals are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by a third-party appraisal management company that the Company has engaged in accordance with internal vendor management policies and approval of the Company’s Board of Directors. Once received, the appraisal review function is conducted by the appraisal management company and consists of a review of the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Through this review, the appraisal management company evaluates the validity of the appraised value and the strength of the conclusions; which are subsequently confirmed by a member of the Credit Department. Discounts to the appraised value are then applied to recognize the carrying costs incurred until disposition, realtor fees, deterioration in the quality of the asset, and the age of the appraisal. The net effect of these adjustments were included in the charge-off to the allowance upon acquisition of the foreclosed property and/or upon partial charge-off of the impaired loan. The most recent analysis of property appraisals including the appropriate discount rates are incorporated into the allowance methodology for the respective loan portfolio segments.

Assets and liabilities measured at fair value on a recurring basis are summarized below:


			Fair Value Measurements Using:
			Quoted Prices in
			Active Markets		Significant Other		Significant
	Total at		for Identical		Observable		Unobservable
	September 30,		Assets		Inputs		Inputs
	2022		(Level 1)		(Level 2)		(Level 3)
U.S. government agencies	$	97,261	$	—	$	97,261	$	—
Mortgage-backed securities		328,325		—		328,325		—
Corporate securities		26,567		—		26,567		—
Obligations of states and political subdivisions		95,119		—		95,119		—
Total securities available-for-sale	$	547,272	$	—	$	547,272	$	—

There were no transfers between Level 1 and Level 2 during the nine months ended September 30, 2022.


			Fair Value Measurements Using:
			Quoted Prices in
			Active Markets		Significant Other		Significant
	Total at		for Identical		Observable		Unobservable
	December 31,		Assets		Inputs		Inputs
	2021		(Level 1)		(Level 2)		(Level 3)
U.S. government agencies		79,706	$	—	$	79,706	$	—
Mortgage-backed securities		270,432		—		270,432		—
Corporate securities		20,211		—		20,211		—
Obligations of states and political subdivisions		94,448		—		94,448		—
Total securities available-for-sale	$	464,797	$	—	$	464,797	$	—

There were no transfers between Level 1 and Level 2 during 2021.

Assets measured at fair value on a non-recurring basis as of September 30, 2022 and December 31, 2021 are summarized below:

Fair Value Measurements Using:

Quoted Prices

Significant

in Active

Other

Significant

Total at

Markets for

Observable

Unobservable

September 30, 2022

Identical Assets

Inputs

(Level 1)

(Level 2)

(Level 3)

Impaired loans

1,174

—

1,174

Fair Value Measurements Using:

Quoted Prices

Significant

in Active

Other

Significant

Total at

Markets for

Observable

Unobservable

December 31, 2021

Identical Assets

Inputs

(Level 1)

(Level 2)

(Level 3)

Impaired loans

6,689

—

6,689

The fair value amounts shown in the above table are impaired loans net of reserves allocated to said loans. The total reserves allocated to these impaired loans were $1,988 and $409 at September 30, 2022 and December 31, 2021, respectively.

The following table presents additional quantitative information about level 3 fair value measured at fair value on a non-recurring basis at September 30, 2022 and December 31, 2021:


	Fair Value				Range
September 30, 2022	Value		Valuation Technique	Unobservable Input	(Weighted Average)
Impaired loans	$	1,174	Appraisal of collateral (1)	Appraisal and liquidation	20%-66%
				adjustments (2)	(62%)

(1) Fair value is generally determined through independent appraisals of the underlying collateral that generally include various level 3 inputs which are not identifiable.

(2) Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.


	Fair Value				Range
December 31, 2021	Value		Valuation Technique	Unobservable Input	(Weighted Average)
Impaired loans - Primarily Commercial Real Estate	$	6,689	Appraisal of collateral (1)	Appraisal and liquidation	20%-56%
				adjustments (2)	(39%)

(1) Fair value is generally determined through independent appraisals of the underlying collateral that generally include various level 3 inputs which are not identifiable.

There were no material collateral dependent, non-TDR impaired loans with a specific reserve as of December 31, 2021.

The carrying amounts and estimated fair values of the Company’s financial instruments not carried at fair value are as follows at September 30, 2022 and December 31, 2021:


	September 30, 2022
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial assets:
Cash and due from banks	$	180,249	$	180,249	$	180,249	$	—	$	—
Loans, net		1,524,816		1,504,301		—		—		1,504,301
Accrued interest receivable		5,554		5,554		—		2,766		2,788
Restricted investment in bank stocks		3,382		NA		—		—		—
Financial liabilities:
Deposits		2,187,553		2,187,553		2,119,769		67,784		—
Note payable		3,000		2,994		—		2,994		—
Subordinated notes, net of issuance costs		19,431		17,906		—		17,906		—
Accrued interest payable		32		32		—		32		—


	December 31, 2021
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial assets:
Cash and due from banks	$	306,179	$	306,179	$	306,179	$	—	$	—
Loans, net		1,273,767		1,260,146		—		—		1,260,146
Accrued interest receivable		6,643		6,643		—		1,603		5,040
Restricted investment in bank stocks		2,217		NA		—		—		—
Financial liabilities:
Deposits		1,914,384		1,914,271		1,831,944		82,327		—
Note payable		3,000		3,030		—		3,030		—
Subordinated notes, net of issuance costs		19,376		18,867		—		18,867		—
Accrued interest payable		250		250		—		250		—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Deposits

9 Months Ended

Sep. 30, 2022

Deposits

Deposits

Note 5 — Deposits

A summarized analysis of the Bank’s deposits at September 30, 2022 and December 31, 2021:


	September 30, 2022		December 31, 2021
Non-interest bearing demand accounts	$	788,106	$	701,645
Interest-bearing demand accounts		349,755		301,596
Money market accounts		743,581		615,111
Savings accounts		236,061		213,592
Certificates of Deposit		70,050		82,440
Total deposits	$	2,187,553	$	1,914,384

Time deposits that meet or exceed the FDIC insurance limit of $250 at September 30, 2022 and December 31, 2021 were $18,948 and $23,859, respectively.

Scheduled maturities of time deposits for the next five years as of September 30, are as follows:


2022	$	16,683
2023		41,691
2024		6,835
2025		4,841
	$	70,050

Deposits of executive officers, directors and principal officers of the Company, including their immediate families and companies in which they are affiliated, amounted to $11,230 and $6,109 at September 30, 2022 and December 31, 2021, respectively.

Pension Plan and Stock Compensation

9 Months Ended

Sep. 30, 2022

Pension Plan and Stock Compensation

Pension Plan and Stock Compensation

Note 6 — Pension Plan and Stock Compensation

The Bank has a funded noncontributory defined benefit pension plan that covers substantially all employees meeting certain eligibility requirements. The pension plan was closed to new participants and benefit accruals were frozen as of December 31, 2015. The plan provides defined benefits based on years of service and final average salary.

The components of net periodic benefit cost for the Company’s noncontributory defined benefit pension plan for the three and nine months ended September 30, 2022 and 2021 are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Service cost	$	—	$	47	$	—	$	142
Interest cost		202		190		606		570
Expected return on plan assets		(496)		(514)		(1,489)		(1,544)
Amortization of transition cost		(7)		(12)		(21)		(36)
Amortization of net loss		—		5		—		16
Net periodic benefit cost/(income)	$	(301)	$	(284)	$	(904)	$	(852)

The Company has a time based restricted stock plan. For the three months ended September 30, 2022 and 2021, the Company’s recognized stock-based compensation costs were $33 and $128, respectively. For the nine months ended September 30, 2022 and 2021 the Company’s recognized stock-based compensation costs were $133 and $390, respectively. The Company uses the fair value of the common stock on the date of award to measure compensation cost for restricted stock awards. Compensation cost is recognized over the vesting period of the award using the straight line method. There were no restricted stock grants made during the nine months ended September 30, 2022 and 15,162 restricted stock awards granted for the nine months ended September 30, 2021. The grants generally vest at the rate of 33% per year with full vesting on the third anniversary date of the grant. Unamortized expense at September 30, 2022 was $90.

A summary of the Company’s restricted stock awards activity for the nine months ended September 30, 2022 is presented below:


		Weighted
		Average Fair
	Shares	Value
Non-vested at beginning of period	22,922	$	28.92
Granted	—	$
Vested	(11,245)	$	28.59
Forfeited	—	$
Non-vested at end of period	11,677	$	29.24

On September 22, 2021 restricted stock units (RSUs) were granted in the amount of 48,004 from the Company’s 2019 Equity Incentive Plan to officers of the Bank and HVIA and directors of the Company in connection with the successful completion of the Company’s initial public stock offering, listing on the NASDAQ Capital Market and the recent past years’ success experienced by the Bank. Non-employee directors received 16,500 restricted stock units while officers received 31,504 restricted stock units. The restricted stock units granted to officers will vest over three years in approximately 33% increments on the first, second and third anniversary of the date of grant. The restricted stock units granted to nonemployee directors are 100% vested as of the date of grant and are settled in shares of Company common stock upon separation from service. In addition, the Company made a discretionary contribution of $200,000 to the Company’s KSOP Trust and purchased shares of the Company’s common stock in the open market for the benefit of all eligible non-highly compensated employees who remain employed by the Company, Bank or HVIA as of December 31, 2021.

The following table summarizes the activity of RSUs during the nine months ended September 30, 2022:


		Restricted Stock Units
Non-vested RSUs at beginning of period		48,004
Granted		18,555
Vested		(9,637)
Issued		(2,000)
Forfeited		(2,733)
Non-vested RSUs at end of period		52,189

Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2022

Accumulated Other Comprehensive Income (Loss).

Accumulated Other Comprehensive Income (Loss)

Note 7 — Accumulated Other Comprehensive Income (Loss)

The following is a summary of changes in accumulated other comprehensive income (loss) by component, net of tax, for the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended September 30, 2022
	Unrealized
	Gains and
	Losses on				Deferred
	Available-for-		Defined Benefit		Compensation
	Sale Securities		Pension Items		Liability		Total
Beginning balance	$	(43,780)	$	(2,110)	$	129	$	(45,761)
Other comprehensive income/(loss) before reclassification		(16,749)		206		(3)		(16,546)
Less amounts reclassified from accumulated other comprehensive income		—		8		—		8
Net current period other comprehensive income/(loss)		(16,749)		198		(3)		(16,554)
Ending balance	$	(60,529)	$	(1,912)	$	126	$	(62,315)


	Nine Months Ended September 30, 2022
	Unrealized
	Gains and
	Losses on				Deferred
	Available-for-		Defined Benefit		Compensation
	Sale Securities		Pension Items		Liability		Total
Beginning balance	$	(1,072)	$	(2,506)	$	135	$	(3,443)
Other comprehensive income/(loss) before reclassification		(59,457)		618		(9)		(58,848)
Less amounts reclassified from accumulated other comprehensive income		—		24		—		24
Net current period other comprehensive income/(loss)		(59,457)		594		(9)		(58,872)
Ending balance	$	(60,529)	$	(1,912)	$	126	$	(62,315)


	Three Months Ended September 30, 2021
	Unrealized
	Gains and
	Losses on				Deferred
	Available-for-		Defined Benefit		Compensation
	Sale Securities		Pension Items		Liability		Total
Beginning balance	$	2,009	$	(3,266)	$	141	$	(1,116)
Other comprehensive income/(loss) before reclassification		(106)		—		(3)		(109)
Less amounts reclassified from accumulated other comprehensive income		—		5		—		5
Net current period other comprehensive income/(loss)		(106)		5		(3)		(104)
Ending balance	$	1,903	$	(3,261)	$	138	$	(1,220)


	Nine Months Ended September 30, 2021
	Unrealized
	Gains and
	Losses on				Deferred
	Available-for-		Defined Benefit		Compensation
	Sale Securities		Pension Items		Liability		Total
Beginning balance	$	4,949	$	(3,277)	$	147	$	1,819
Other comprehensive income/(loss) before reclassification		(3,046)		—		(9)		(3,055)
Less amounts reclassified from accumulated other comprehensive income		—		16		—		16
Net current period other comprehensive income/(loss)		(3,046)		16		(9)		(3,039)
Ending balance	$	1,903	$	(3,261)	$	138	$	(1,220)

The following reflects significant amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2022 and 2021:


	Amount Reclassified from Accumulated Other Comprehensive Income								Affected Line Item in the Statement where
									Net Income is Presented
	Three Months Ended September 30,				Nine Months Ended September 30,
Details about Accumulated Other Comprehensive Income Components	2022		2021		2022		2021
Unrealized gains and losses on available-for-sale securities
Realized (losses) gains on securities available-for-sale	$	—	$	—	$	—	$	—	Investment security gains (losses)
Total before tax		—		—		—		—
Tax effect		—		—		—		—	Provision for income taxes
Net of tax	$	—	$	—	$	—	$	—

Amortization of defined benefit pension items
Transition asset	$	(7)	$	(11)	$	(21)	$	(36)	Other expense
Actuarial gains (losses)		-		5		—		16	Other expense
Total before tax		(7)		(6)		(21)		(20)
Tax effect		(1)		(1)		(3)		(4)	Provision for income taxes
Net of tax	$	(8)	$	(5)	$	(24)	$	(16)

Total reclassifications for the period, net of tax	$	(8)	$	(5)	$	(24)	$	(16)

Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2022

Revenue from Contracts with Customers

Revenue from Contracts with Customers

Note 8 — Revenue from Contracts with Customers

All of the Company’s revenue from contracts with customers in the scope of ASC 606 is recognized within noninterest income. The following table presents the Company’s gross sources of noninterest income for the three and nine months ended September 30, 2022 and 2021.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Noninterest Income
Service charges on deposit accounts	$	182	$	166	$	511	$	499
Trust income		1,176		1,230		3,569		3,537
Investment advisory income		1,085		1,176		3,385		3,588
Earnings on bank owned life insurance^(a)		240		209		709		554
Other^(b)		250		247		741		770
Total Noninterest Income	$	2,933	$	3,028	$	8,915	$	8,948

(a)	Not within the scope of ASC 606.

(b)

The Other category includes safe deposit income, checkbook fees, and debit card fee income, totaling $231 and $195 for the three months ended September 30, 2022 and 2021, respectively, and $644 and $588 for the nine months ended September 30, 2022 and 2021, that are within the scope of ASC 606 and loan related fee income and miscellaneous income, totaling $19 and $52 for the three months ended September 30, 2022 and 2021, respectively, and $97 and $182 for the nine months ended September 30, 2022 and 2021 which are outside the scope of ASC 606.

The Company earns wealth management fees, which includes trust income and investment advisory income, from its contracts with trust and brokerage customers to manage assets for investment, and/or to transact on their accounts. These fees are primarily earned over time as the Company provides the contracted services and are generally assessed based on a tiered scale of the market value of the assets under management at month-end or quarter-end.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Segment Information

9 Months Ended

Sep. 30, 2022

Segment Information

Segment Information

Note 9 — Segment Information

The reportable segments are determined by the products and services offered by the Company, primarily distinguished between banking and wealth management. Loans, investments, and deposits provide the revenues in the banking operation, and trust fees and investment management fees provide the revenues in wealth management. All operations are domestic.

Significant segment totals are reconciled to the financial statements as follows:


	For the three months ended September 30, 2022						For the nine months ended September 30, 2022
	Banking		Wealth Management		Total Segments		Banking		Wealth Management		Total Segments
Net interest income	$	21,415	$	—	$	21,415	$	55,263	$	—	$	55,263
Noninterest income		672		2,261		2,933		1,961		6,954		8,915
Provision for loan loss		(2,084)		—		(2,084)		(8,517)		—		(8,517)
Noninterest expenses		(10,893)		(1,662)		(12,555)		(31,532)		(5,376)		(36,908)
Income tax expense		(1,730)		(126)		(1,856)		(3,129)		(331)		(3,460)
Net income	$	7,380	$	473	$	7,853	$	14,046	$	1,247	$	15,293
Total assets	$	2,360,897	$	7,473	$	2,368,370	$	2,360,897	$	7,473	$	2,368,370


	For the three months ended September 30, 2021						For the nine months ended September 30, 2021
	Banking		Wealth Management		Total Segments		Banking		Wealth Management		Total Segments
Net interest income	$	15,880	$	—	$	15,880	$	44,252	$	—	$	44,252
Noninterest income		622		2,406		3,028		1,823		7,125		8,948
Provision for loan loss		(1,008)		—		(1,008)		(1,883)		—		(1,883)
Noninterest expenses		(9,279)		(1,694)		(10,973)		(26,741)		(5,015)		(31,756)
Income tax expense		(1,201)		(150)		(1,351)		(3,324)		(443)		(3,767)
Net income	$	5,014	$	562	$	5,576	$	14,127	$	1,667	$	15,794
Total assets	$	2,166,521	$	8,708	$	2,175,229	$	2,166,521		8,708	$	2,175,229

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
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+ Details

Regulatory Capital Matters

9 Months Ended

Sep. 30, 2022

Regulatory Capital Matters

Regulatory Capital Matters

Note 10 — Regulatory Capital Matters

The Bank is subject to regulatory capital requirements administered by the federal banking agencies. Capital adequacy guidelines and prompt corrective regulations involve quantitative measures of assets, liabilities and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgements by regulators. Failure to meet the minimum capital requirements can initiate regulatory action. The final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. banks, (Basel III rules), became effective for the Bank on January 1, 2015 with full compliance with all of the requirements being phased in over a multi-year schedule, and fully phased in by January 1, 2019. Under the Basel III rules, the Bank must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer is 2.5%. The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion and capital restoration plans are required. Capital levels at September 30, 2022 and at December 31, 2021 exceeded the regulatory minimum levels to be considered well capitalized under the prompt corrective action regulations.

Actual and required capital amounts and ratios are presented below at September 30, 2022 and December 31, 2021 for the Bank.


													To be Well Capitalized
					For Capital Adequacy				For Capital Adequacy				under Prompt
	Actual				Purposes				Purposes with Capital Buffer				Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
September 30, 2022
Total capital to risk weighted assets	$	226,991	13.60	%	$	133,517	8.00	%	$	164,810	9.875	%	$	166,896	10.00	%
Tier 1 (Core) capital to risk weighted assets		206,102	12.35	%		100,138	6.00	%		131,431	7.875	%		133,517	8.00	%
Common Tier 1 (CET1) to risk weighted assets		206,102	12.35	%		75,103	4.50	%		106,396	6.375	%		108,482	6.50	%
Tier 1 (Core) Capital to average assets		206,102	8.48	%		97,267	4.00	%		N/A	N/A			121,584	5.00	%
December 31, 2021
Total capital to risk weighted assets	$	192,359	14.12	%	$	109,000	8.00	%	$	134,546	9.875	%	$	136,250	10.00	%
Tier 1 (Core) capital to risk weighted assets		175,318	12.87	%		81,750	6.00	%		107,296	7.875	%		109,000	8.00	%
Common Tier 1 (CET1) to risk weighted assets		175,318	12.87	%		61,312	4.50	%		86,859	6.375	%		88,562	6.50	%
Tier 1 (Core) Capital to average assets		175,318	8.15	%		86,093	4.00	%		N/A	N/A			107,616	5.00	%

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

+ References + Details

Nature of Operations and Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2022
Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations and Principles of Consolidation	Nature of Operations and Principles of Consolidation: The unaudited consolidated financial statements include Orange County Bancorp, Inc., a Delaware bank holding company (“Orange County Bancorp”) and its wholly owned subsidiaries: Orange Bank & Trust Company, a New York trust company (the “Bank”) and Hudson Valley Investment Advisors (“HVIA”), a Registered Investment Advisor, together referred to as the “Company.” Intercompany transactions and balances are eliminated in consolidation. The Company provides commercial and consumer banking services to individuals, small businesses and local municipal governments as well as trust and investment services through the Bank and HVIA. The Company is headquartered in Middletown, New York, with eight locations in Orange County, New York, seven in Westchester County, New York, two in Rockland County, New York, and one in Bronx County, New York. Its primary deposit products are checking, savings, and term certificate accounts, and its primary lending products are commercial real estate, commercial and residential mortgage loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. There are no significant concentrations of loans to any one industry or customer. However, the customers’ ability to repay their loans is dependent on the real estate and general economic conditions in the areas in which they operate. Assets held by the Company in an agency or fiduciary capacity for its customers are excluded from the consolidated financial statements since they do not constitute assets of the Company. Assets held by the Company in an agency or fiduciary capacity for its customers amounted to $1,157,837 and $1,325,894 at September 30, 2022 and December 31, 2021, respectively. Certain information and footnote disclosures normally included in the audited consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2021 for Orange County Bancorp, Inc. contained in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 30, 2022. In the opinion of the management of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting solely of normal and recurring accruals) necessary to present fairly the financial position as of September 30, 2022, the results of operations, comprehensive income/(loss), changes in stockholders’ equity for the three and nine months ended September 30, 2022 and 2021 and cash flow statements for the nine months ended September 30, 2022 and 2021. The results of operations for any interim period are not necessarily indicative of the results that may be expected for the full year or for any future period. Certain reclassifications have been made to the financial statements to conform with prior period presentations.
Use of Estimates	Use of Estimates: To prepare financial statements in conformity with U.S. generally accepted accounting principles, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ.
Recent Accounting Pronouncements	Recent Accounting Pronouncements: In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The ASU made certain targeted amendments specific to troubled debt restructurings (TDRs) by creditors and vintage disclosure related to gross write-offs. Upon adoption, the Corporation will be required to apply the loan and refinancing and restructuring guidance to determine whether a modification results in a new loan or a continuation of an existing loan, rather than applying the recognition and measurement guidance for TDRs. The ASU also requires companies to disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases within scope of Subtopic 326-20. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022 for entities that have adopted ASU 2016-13, otherwise effective date is the same as ASU 2016-13. The Corporation will adopt ASU 2016-13 effective January 1, 2023 and will simultaneously implement ASU 2022-02. In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments — Credit Losses Topic 326: Measurement of Credit Losses on Financial Instruments. The objective of the ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date by replacing the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to form credit loss estimates. In November 2019, the FASB adopted changes to delay the effective date of ASU 2016-13 to January 2023 for certain entities, including certain Securities and Exchange Commission filers, public business entities, and private companies. As a result, the Company is eligible for the delay and will adopt the ASU effective January 1, 2023. The Company has been working with a third-party vendor in the development of certain methodologies and modeling techniques that will be implemented to accommodate this adoption. The modeling contemplates projected loss drivers derived from a cross-section of as many 30 peer institutions with similar geographic, loan concentration, and charge-off history to that of the Company. Correlation studies were conducted to determine the predictive strength of certain macroeconomic factors with those observed loss histories. The Company will be using a discounted cash flow analysis, in conjunction with macroeconomic forecasts to establish probability of default and loss given default parameters; which will ultimately support the derivation of projected losses based on the amortized cost of the segmented loan portfolio. At this time, the Company is modeling projected losses in parallel with the current incurred loss methodology. Further, the Company is currently working with a third-party analytics consulting firm for the purposes of validating the underlying modeling assumptions, loss drivers, data mapping, and governance documentation.

Investment Securities (Tables)

9 Months Ended

Sep. 30, 2022

Investment Securities

Schedule of amortized cost and fair value of investment securities


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Available-for-sale September 30, 2022
U.S. government agencies	$	107,694	$	34	$	(10,467)	$	97,261
Mortgage-backed securities		374,372		—		(46,047)		328,325
Corporate Securities		28,565		—		(1,998)		26,567
Obligations of states and political subdivisions		113,258		41		(18,180)		95,119
Total debt securities	$	623,889	$	75	$	(76,692)	$	547,272


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Available-for-sale December 31, 2021
U.S. government agencies	$	80,596	$	440	$	(1,330)	$	79,706
Mortgage-backed securities		272,931		1,285		(3,784)		270,432
Corporate Securities		20,081		278		(148)		20,211
Obligations of states and political subdivisions		92,545		2,149		(246)		94,448
Total debt securities	$	466,153	$	4,152	$	(5,508)	$	464,797

Schedule of contractual maturities of debt securities


	Available-for-sale
	Amortized		Fair
	Cost		Value
Due in one year or less	$	4,067	$	4,083
Due after one through five years		26,077		25,102
Due after five through ten years		73,571		65,873
Due after ten years		145,802		123,889
		249,517		218,947
Mortgage-backed securities		374,372		328,325
Total debt securities	$	623,889	$	547,272

Schedule of securities with unrealized and unrecognized losses


	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Available-for-sale September 30, 2022
U.S. government agencies	$	58,924	$	(4,207)	$	32,962	$	(6,260)	$	91,886	$	(10,467)
Mortgage-backed securities		196,565		(20,462)		121,896		(25,585)		318,461		(46,047)
Corporate Securities		14,203		(859)		8,363		(1,139)		22,566		(1,998)
Obligations of states and political subdivisions		78,099		(14,952)		10,985		(3,228)		89,084		(18,180)
Total debt securities	$	347,791	$	(40,480)	$	174,206	$	(36,212)	$	521,997	$	(76,692)


	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Available-for-sale December 31, 2021
U.S. government agencies	$	10,337	$	(121)	$	32,210	$	(1,209)	$	42,547	$	(1,330)
Mortgage-backed securities		177,506		(3,273)		14,134		(511)		191,640		(3,784)
Corporate Securities		9,354		(148)		—		—		9,354		(148)
Obligations of states and political subdivisions		13,349		(138)		3,298		(108)		16,647		(246)
Total debt securities	$	210,546	$	(3,680)	$	49,642	$	(1,828)	$	260,188	$	(5,508)

Loans (Tables)

9 Months Ended

Sep. 30, 2022

Loans

Schedule of loans


		September 30, 2022		December 31, 2021
Commercial and industrial	$	251,293	$	268,508
Commercial real estate		1,059,821		852,707
Commercial real estate construction		132,945		72,250
Residential real estate		73,552		65,248
Home equity		12,750		13,638
Consumer		17,343		19,077
Total	$	1,547,704	$	1,291,428

Schedule of activity in the allowance for loan losses and recorded investment in loans by portfolio segment and based on impairment method

The following tables present the activity in the allowance for loan losses by portfolio segment for each of the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended September 30, 2022
	Commercial				Commercial
	and		Commercial		Real Estate		Residential		Home
	Industrial		Real Estate		Construction		Real Estate		Equity		Consumer		Total
Allowance for loan losses:
Beginning balance	$	9,332	$	12,303	$	1,318	$	299	$	68	$	322	$	23,642
Provision for loan losses		573		1,110		279		60		1		61		2,084
Charge-offs		(2,817)		—		—		—		—		(70)		(2,887)
Recoveries		22		26		—		—		—		1		49
Ending balance	$	7,110	$	13,439	$	1,597	$	359	$	69	$	314	$	22,888


	Nine Months Ended September 30, 2022
	Commercial				Commercial
	and		Commercial		Real Estate		Residential		Home
	Industrial		Real Estate		Construction		Real Estate		Equity		Consumer		Total
Allowance for loan losses:
Beginning balance	$	4,901	$	11,183	$	964	$	272	$	80	$	261	$	17,661
Provision for loan losses		5,066		2,230		633		138		(11)		461		8,517
Charge-offs		(2,894)		—		—		(51)		—		(449)		(3,394)
Recoveries		37		26		—		—		—		41		104
Ending balance	$	7,110	$	13,439	$	1,597	$	359	$	69	$	314	$	22,888


	Three Months Ended September 30, 2021
	Commercial				Commercial
	and		Commercial		Real Estate		Residential		Home
	Industrial		Real Estate		Construction		Real Estate		Equity		Consumer		Total
Allowance for loan losses:
Beginning balance	$	4,946		10,536		948		301		60		258	$	17,049
Provision for loan losses		819		428		(149)		(70)		20		(40)		1,008
Charge-offs		(71)		(7)		—		—		—		(1)		(79)
Recoveries		3		59		—				—		—		62
Ending balance	$	5,697	$	11,017	$	799	$	231	$	80	$	217	$	18,041


	Nine Months Ended September 30, 2021
	Commercial				Commercial
	and		Commercial		Real Estate		Residential		Home
	Industrial		Real Estate		Construction		Real Estate		Equity		Consumer		Total
Allowance for loan losses:
Beginning balance	$	4,795	$	9,782	$	801	$	381	$	77	$	336	$	16,172
Provision for loan losses		896		1,272		(2)		(150)		3		(136)		1,883
Charge-offs		(176)		(110)		—		—		—		(8)		(294)
Recoveries		182		73		—		—		—		25		280
Ending balance	$	5,697	$	11,017	$	799	$	231	$	80	$	217	$	18,041


	Commercial				Commercial
	and		Commercial		Real Estate		Residential		Home
	Industrial		Real Estate		Construction		Real Estate		Equity		Consumer		Total
September 30, 2022
Allowance for loan losses:
Ending balance:
individually evaluated for impairment	$	2,721	$	390	$	—	$	—	$	—	$	—	$	3,111
collectively evaluated for impairment		4,389		13,049		1,597		359		69		314		19,777
Total ending allowance balance	$	7,110	$	13,439	$	1,597	$	359	$	69	$	314	$	22,888
Loans:
Ending balance:
individually evaluated for impairment	$	4,170	$	23,165	$	—	$	1,804	$	53	$	107	$	29,299
collectively evaluated for impairment		247,123		1,036,656		132,945		71,748		12,697		17,236		1,518,405
Total ending loans balance	$	251,293	$	1,059,821	$	132,945	$	73,552	$	12,750	$	17,343	$	1,547,704


	Commercial				Commercial
	and		Commercial		Real Estate		Residential		Home
	Industrial		Real Estate		Construction		Real Estate		Equity		Consumer		Total
December 31, 2021
Allowance for loan losses:
Ending balance:
individually evaluated for impairment	$	137	$	1,272	$	—	$	—	$	—	$	24	$	1,433
collectively evaluated for impairment		4,764		9,911		964		272		80		237		16,228
Total ending allowance balance	$	4,901	$	11,183	$	964	$	272	$	80	$	261	$	17,661
Loans:
Ending balance:
individually evaluated for impairment	$	952	$	23,523	$	—	$	1,227	$	50	$	114	$	25,866
collectively evaluated for impairment		267,556		829,184		72,250		64,021		13,588		18,963		1,265,562
Total ending loans balance	$	268,508	$	852,707	$	72,250	$	65,248	$	13,638	$	19,077	$	1,291,428

Schedule of average recorded investment and interest income of loans individually evaluated for impairment recognized by class of loans

The following tables present loans individually evaluated for impairment recognized by class of loans as of September 30, 2022 and December 31, 2021:


	Unpaid				Allowance for
	Principal		Recorded		Loan Losses
	Balance		Investment		Allocated
September 30, 2022
With no related allowance recorded
Commercial and industrial	$	—	$	—	$	—
Commercial real estate		17,991		17,464		—
Commercial real estate construction		—		—		—
Residential real estate		1,816		1,804		—
Home equity		56		53		—
Consumer		—		—		—
Total	$	19,863	$	19,321	$	—
With an allowance recorded:
Commercial and industrial	$	4,172	$	4,170	$	2,721
Commercial real estate		5,721		5,701		390
Commercial real estate construction		—		—		—
Residential real estate		—		—		—
Home equity		—		—		—
Consumer		107		107		—
Total	$	10,000	$	9,978	$	3,111


	Unpaid				Allowance for
	Principal		Recorded		Loan Losses
	Balance		Investment		Allocated
December 31, 2021
With no related allowance recorded
Commercial and industrial	$	1	$	1	$	—
Commercial real estate		14,291		13,953		—
Commercial real estate construction		—		—		—
Residential real estate		1,155		1,155		—
Home equity		50		50		—
Consumer		—		—		—
Total	$	15,497	$	15,159	$	—
With an allowance recorded:
Commercial and industrial	$	951	$	951	$	137
Commercial real estate		9,593		9,570		1,272
Commercial real estate construction		—		—		—
Residential real estate		84		72		—
Home equity		—		—		—
Consumer		114		114		24
Total	$	10,742	$	10,707	$	1,433


	Three Months Ended				Three Months Ended
	September 30, 2022				September 30, 2021
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized⁽¹⁾		Investment		Recognized⁽¹⁾
With no related allowance recorded
Commercial and industrial	$	—	$	—	$	15	$	—
Commercial real estate		17,553		158		13,614		147
Commercial real estate construction		578		—		578		—
Residential real estate		1,283		6		588		8
Home equity		—		—		25		—
Consumer		—		—		—		—
Total	$	19,414	$	164	$	14,820	$	155
With an allowance recorded:
Commercial and industrial	$	18,599	$	52	$	2,363	$	33
Commercial real estate		2,259		30		10,335		134
Commercial real estate construction		—		—		—		—
Residential real estate		—		—		74		1
Home equity		—		—		—		—
Consumer		108		1		118		1
Total	$	20,966	$	83	$	12,890	$	169

(1) Cash basis interest income approximates interest income recognized.


	Nine Months Ended				Nine Months Ended
	September 30, 2022				September 30, 2021
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized⁽¹⁾		Investment		Recognized⁽¹⁾
With no related allowance recorded
Commercial and industrial	$	—	$	—	$	32	$	1
Commercial real estate		17,549		476		13,620		442
Commercial real estate construction		578		—		578		—
Residential real estate		983		18		593		23
Home equity		—		—		25		1
Consumer		—		—		—		—
Total	$	19,110	$	494	$	14,848	$	467
With an allowance recorded:
Commercial and industrial	$	9,264	$	157	$	2,892	$	118
Commercial real estate		2,292		90		10,390		405
Commercial real estate construction		—		—		—		—
Residential real estate		—		—		77		2
Home equity		—		—		—		—
Consumer		110		4		120		5
Total	$	11,666	$	251	$	13,479	$	530

(1)

Cash basis interest income approximates interest income recognized.

Schedule of recorded investment in non-accrual and loans past due over 90 days still on accrual by class of loans


					Loans Past Due Over 90 Days
	Non-accrual				Still Accruing
	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Commercial and industrial	$	4,170	$	—	$	409	$	720
Commercial real estate		3,958		3,928		—		465
Commercial real estate construction		—		—		—		—
Residential real estate		1,146		578		—		—
Home equity		53		50		—		—
Consumer		—		4		456		208
Total	$	9,327	$	4,560	$	865	$	1,393

Schedule of aging of the recorded investment in past-due loans


	30-59 Days		60-89 Days		Greater Than		Total		Loans
	Past Due		Past Due		90 Days		Past Due		Not Past Due
September 30, 2022
Commercial and industrial	$	461	$	492	$	1,500	$	2,453	$	248,840
Commercial real estate		281		—		684		965		1,058,856
Commercial real estate construction		—		—		—		—		132,945
Residential real estate		—		591		1,146		1,737		71,815
Home equity		—		—		—		—		12,750
Consumer		92		28		456		576		16,767
Total	$	834	$	1,111	$	3,786	$	5,731	$	1,541,973


	30-59 Days		60-89 Days		Greater Than		Total		Loans
	Past Due		Past Due		90 Days		Past Due		Not Past Due
December 31, 2021
Commercial and industrial	$	541	$	1,519	$	720	$	2,780	$	265,728
Commercial real estate		—		2,873		1,161		4,034		848,673
Commercial real estate construction		—		—		—		—		72,250
Residential real estate		26		—		578		604		64,644
Home equity		—		58		50		108		13,530
Consumer		1,134		292		212		1,638		17,439
Total	$	1,701	$	4,742	$	2,721	$	9,164	$	1,282,264

Schedule of risk category of loans by class of loans


			Special
	Pass		Mention		Substandard		Doubtful		Loss		Total
September 30, 2022
Commercial and industrial	$	246,129	$	609	$	1,716	$	2,839	$	—	$	251,293
Commercial real estate		1,038,272		5,641		15,908		—		—		1,059,821
Commercial real estate construction		132,945		—		—		—		—		132,945
Residential real estate		71,815		—		1,737		—		—		73,552
Home equity		12,697		—		53		—		—		12,750
Consumer		17,236		—		107		—		—		17,343
Total	$	1,519,094	$	6,250	$	19,521	$	2,839	$	—	$	1,547,704


			Special
	Pass		Mention		Substandard		Doubtful		Loss		Total
December 31, 2021
Commercial and industrial	$	252,268	$	4,156	$	12,084	$	—	$	—	$	268,508
Commercial real estate		835,787		679		16,241		—		—		852,707
Commercial real estate construction		72,250		—		—		—		—		72,250
Residential real estate		64,094		—		1,154		—		—		65,248
Home equity		13,588		50		—		—		—		13,638
Consumer		18,963		—		114		—		—		19,077
Total	$	1,256,950	$	4,885	$	29,593	$	—	$	—	$	1,291,428

Fair Value (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value

Summary of assets and liabilities measured at fair value


			Fair Value Measurements Using:
			Quoted Prices in
			Active Markets		Significant Other		Significant
	Total at		for Identical		Observable		Unobservable
	September 30,		Assets		Inputs		Inputs
	2022		(Level 1)		(Level 2)		(Level 3)
U.S. government agencies	$	97,261	$	—	$	97,261	$	—
Mortgage-backed securities		328,325		—		328,325		—
Corporate securities		26,567		—		26,567		—
Obligations of states and political subdivisions		95,119		—		95,119		—
Total securities available-for-sale	$	547,272	$	—	$	547,272	$	—


			Fair Value Measurements Using:
			Quoted Prices in
			Active Markets		Significant Other		Significant
	Total at		for Identical		Observable		Unobservable
	December 31,		Assets		Inputs		Inputs
	2021		(Level 1)		(Level 2)		(Level 3)
U.S. government agencies		79,706	$	—	$	79,706	$	—
Mortgage-backed securities		270,432		—		270,432		—
Corporate securities		20,211		—		20,211		—
Obligations of states and political subdivisions		94,448		—		94,448		—
Total securities available-for-sale	$	464,797	$	—	$	464,797	$	—

Schedule of assets measured at fair value on a non-recurring

Fair Value Measurements Using:

Quoted Prices

Significant

in Active

Other

Significant

Total at

Markets for

Observable

Unobservable

September 30, 2022

Identical Assets

Inputs

(Level 1)

(Level 2)

(Level 3)

Impaired loans

1,174

—

1,174

Fair Value Measurements Using:

Quoted Prices

Significant

in Active

Other

Significant

Total at

Markets for

Observable

Unobservable

December 31, 2021

Identical Assets

Inputs

(Level 1)

(Level 2)

(Level 3)

Impaired loans

6,689

—

6,689

Schedule of level 3 fair value measured at fair value on a non-recurring


	Fair Value				Range
September 30, 2022	Value		Valuation Technique	Unobservable Input	(Weighted Average)
Impaired loans	$	1,174	Appraisal of collateral (1)	Appraisal and liquidation	20%-66%
				adjustments (2)	(62%)

(1) Fair value is generally determined through independent appraisals of the underlying collateral that generally include various level 3 inputs which are not identifiable.


	Fair Value				Range
December 31, 2021	Value		Valuation Technique	Unobservable Input	(Weighted Average)
Impaired loans - Primarily Commercial Real Estate	$	6,689	Appraisal of collateral (1)	Appraisal and liquidation	20%-56%
				adjustments (2)	(39%)

(1) Fair value is generally determined through independent appraisals of the underlying collateral that generally include various level 3 inputs which are not identifiable.

Summary of carrying amounts and estimated fair values of financial instruments


	September 30, 2022
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial assets:
Cash and due from banks	$	180,249	$	180,249	$	180,249	$	—	$	—
Loans, net		1,524,816		1,504,301		—		—		1,504,301
Accrued interest receivable		5,554		5,554		—		2,766		2,788
Restricted investment in bank stocks		3,382		NA		—		—		—
Financial liabilities:
Deposits		2,187,553		2,187,553		2,119,769		67,784		—
Note payable		3,000		2,994		—		2,994		—
Subordinated notes, net of issuance costs		19,431		17,906		—		17,906		—
Accrued interest payable		32		32		—		32		—


	December 31, 2021
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial assets:
Cash and due from banks	$	306,179	$	306,179	$	306,179	$	—	$	—
Loans, net		1,273,767		1,260,146		—		—		1,260,146
Accrued interest receivable		6,643		6,643		—		1,603		5,040
Restricted investment in bank stocks		2,217		NA		—		—		—
Financial liabilities:
Deposits		1,914,384		1,914,271		1,831,944		82,327		—
Note payable		3,000		3,030		—		3,030		—
Subordinated notes, net of issuance costs		19,376		18,867		—		18,867		—
Accrued interest payable		250		250		—		250		—

Deposits (Tables)

9 Months Ended

Sep. 30, 2022

Deposits

Summary of analysis of deposits


	September 30, 2022		December 31, 2021
Non-interest bearing demand accounts	$	788,106	$	701,645
Interest-bearing demand accounts		349,755		301,596
Money market accounts		743,581		615,111
Savings accounts		236,061		213,592
Certificates of Deposit		70,050		82,440
Total deposits	$	2,187,553	$	1,914,384

Schedule of maturities of time deposits


2022	$	16,683
2023		41,691
2024		6,835
2025		4,841
	$	70,050

- Definition

Tabular disclosure of type of deposit liability.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (e)

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(ii)

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (1)

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (1)

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (d)

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(iv)

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (5)

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(iii)

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (4)

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (c)

Reference 13: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (2)

Reference 14: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (3)

Reference 15: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)

+ Details

Pension Plan and Stock Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of components of net periodic benefit cost


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Service cost	$	—	$	47	$	—	$	142
Interest cost		202		190		606		570
Expected return on plan assets		(496)		(514)		(1,489)		(1,544)
Amortization of transition cost		(7)		(12)		(21)		(36)
Amortization of net loss		—		5		—		16
Net periodic benefit cost/(income)	$	(301)	$	(284)	$	(904)	$	(852)

Restricted Stock Awards

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary of restricted stock awards activity


		Weighted
		Average Fair
	Shares	Value
Non-vested at beginning of period	22,922	$	28.92
Granted	—	$
Vested	(11,245)	$	28.59
Forfeited	—	$
Non-vested at end of period	11,677	$	29.24

Restricted Stock Units (RSUs)

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary of restricted stock awards activity


		Restricted Stock Units
Non-vested RSUs at beginning of period		48,004
Granted		18,555
Vested		(9,637)
Issued		(2,000)
Forfeited		(2,733)
Non-vested RSUs at end of period		52,189

Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2022

Accumulated Other Comprehensive Income (Loss).

Summary of changes in accumulated other comprehensive income (loss)

The following is a summary of changes in accumulated other comprehensive income (loss) by component, net of tax, for the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended September 30, 2022
	Unrealized
	Gains and
	Losses on				Deferred
	Available-for-		Defined Benefit		Compensation
	Sale Securities		Pension Items		Liability		Total
Beginning balance	$	(43,780)	$	(2,110)	$	129	$	(45,761)
Other comprehensive income/(loss) before reclassification		(16,749)		206		(3)		(16,546)
Less amounts reclassified from accumulated other comprehensive income		—		8		—		8
Net current period other comprehensive income/(loss)		(16,749)		198		(3)		(16,554)
Ending balance	$	(60,529)	$	(1,912)	$	126	$	(62,315)


	Nine Months Ended September 30, 2022
	Unrealized
	Gains and
	Losses on				Deferred
	Available-for-		Defined Benefit		Compensation
	Sale Securities		Pension Items		Liability		Total
Beginning balance	$	(1,072)	$	(2,506)	$	135	$	(3,443)
Other comprehensive income/(loss) before reclassification		(59,457)		618		(9)		(58,848)
Less amounts reclassified from accumulated other comprehensive income		—		24		—		24
Net current period other comprehensive income/(loss)		(59,457)		594		(9)		(58,872)
Ending balance	$	(60,529)	$	(1,912)	$	126	$	(62,315)


	Three Months Ended September 30, 2021
	Unrealized
	Gains and
	Losses on				Deferred
	Available-for-		Defined Benefit		Compensation
	Sale Securities		Pension Items		Liability		Total
Beginning balance	$	2,009	$	(3,266)	$	141	$	(1,116)
Other comprehensive income/(loss) before reclassification		(106)		—		(3)		(109)
Less amounts reclassified from accumulated other comprehensive income		—		5		—		5
Net current period other comprehensive income/(loss)		(106)		5		(3)		(104)
Ending balance	$	1,903	$	(3,261)	$	138	$	(1,220)


	Nine Months Ended September 30, 2021
	Unrealized
	Gains and
	Losses on				Deferred
	Available-for-		Defined Benefit		Compensation
	Sale Securities		Pension Items		Liability		Total
Beginning balance	$	4,949	$	(3,277)	$	147	$	1,819
Other comprehensive income/(loss) before reclassification		(3,046)		—		(9)		(3,055)
Less amounts reclassified from accumulated other comprehensive income		—		16		—		16
Net current period other comprehensive income/(loss)		(3,046)		16		(9)		(3,039)
Ending balance	$	1,903	$	(3,261)	$	138	$	(1,220)

Summary of significant amounts reclassified out of each component of accumulated other comprehensive income (loss)


	Amount Reclassified from Accumulated Other Comprehensive Income								Affected Line Item in the Statement where
									Net Income is Presented
	Three Months Ended September 30,				Nine Months Ended September 30,
Details about Accumulated Other Comprehensive Income Components	2022		2021		2022		2021
Unrealized gains and losses on available-for-sale securities
Realized (losses) gains on securities available-for-sale	$	—	$	—	$	—	$	—	Investment security gains (losses)
Total before tax		—		—		—		—
Tax effect		—		—		—		—	Provision for income taxes
Net of tax	$	—	$	—	$	—	$	—

Amortization of defined benefit pension items
Transition asset	$	(7)	$	(11)	$	(21)	$	(36)	Other expense
Actuarial gains (losses)		-		5		—		16	Other expense
Total before tax		(7)		(6)		(21)		(20)
Tax effect		(1)		(1)		(3)		(4)	Provision for income taxes
Net of tax	$	(8)	$	(5)	$	(24)	$	(16)

Total reclassifications for the period, net of tax	$	(8)	$	(5)	$	(24)	$	(16)

Revenue from Contracts with Customers (Tables)

9 Months Ended

Sep. 30, 2022

Revenue from Contracts with Customers

Schedule of noninterest income


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Noninterest Income
Service charges on deposit accounts	$	182	$	166	$	511	$	499
Trust income		1,176		1,230		3,569		3,537
Investment advisory income		1,085		1,176		3,385		3,588
Earnings on bank owned life insurance^(a)		240		209		709		554
Other^(b)		250		247		741		770
Total Noninterest Income	$	2,933	$	3,028	$	8,915	$	8,948

(a)	Not within the scope of ASC 606.

(b)

Segment Information (Tables)

9 Months Ended

Sep. 30, 2022

Segment Information

Schedule of segment information


	For the three months ended September 30, 2022						For the nine months ended September 30, 2022
	Banking		Wealth Management		Total Segments		Banking		Wealth Management		Total Segments
Net interest income	$	21,415	$	—	$	21,415	$	55,263	$	—	$	55,263
Noninterest income		672		2,261		2,933		1,961		6,954		8,915
Provision for loan loss		(2,084)		—		(2,084)		(8,517)		—		(8,517)
Noninterest expenses		(10,893)		(1,662)		(12,555)		(31,532)		(5,376)		(36,908)
Income tax expense		(1,730)		(126)		(1,856)		(3,129)		(331)		(3,460)
Net income	$	7,380	$	473	$	7,853	$	14,046	$	1,247	$	15,293
Total assets	$	2,360,897	$	7,473	$	2,368,370	$	2,360,897	$	7,473	$	2,368,370


	For the three months ended September 30, 2021						For the nine months ended September 30, 2021
	Banking		Wealth Management		Total Segments		Banking		Wealth Management		Total Segments
Net interest income	$	15,880	$	—	$	15,880	$	44,252	$	—	$	44,252
Noninterest income		622		2,406		3,028		1,823		7,125		8,948
Provision for loan loss		(1,008)		—		(1,008)		(1,883)		—		(1,883)
Noninterest expenses		(9,279)		(1,694)		(10,973)		(26,741)		(5,015)		(31,756)
Income tax expense		(1,201)		(150)		(1,351)		(3,324)		(443)		(3,767)
Net income	$	5,014	$	562	$	5,576	$	14,127	$	1,667	$	15,794
Total assets	$	2,166,521	$	8,708	$	2,175,229	$	2,166,521		8,708	$	2,175,229

Regulatory Capital Matters (Tables)

9 Months Ended

Sep. 30, 2022

Regulatory Capital Matters

Schedule of actual and required capital amounts and ratios

Actual and required capital amounts and ratios are presented below at September 30, 2022 and December 31, 2021 for the Bank.


													To be Well Capitalized
					For Capital Adequacy				For Capital Adequacy				under Prompt
	Actual				Purposes				Purposes with Capital Buffer				Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
September 30, 2022
Total capital to risk weighted assets	$	226,991	13.60	%	$	133,517	8.00	%	$	164,810	9.875	%	$	166,896	10.00	%
Tier 1 (Core) capital to risk weighted assets		206,102	12.35	%		100,138	6.00	%		131,431	7.875	%		133,517	8.00	%
Common Tier 1 (CET1) to risk weighted assets		206,102	12.35	%		75,103	4.50	%		106,396	6.375	%		108,482	6.50	%
Tier 1 (Core) Capital to average assets		206,102	8.48	%		97,267	4.00	%		N/A	N/A			121,584	5.00	%
December 31, 2021
Total capital to risk weighted assets	$	192,359	14.12	%	$	109,000	8.00	%	$	134,546	9.875	%	$	136,250	10.00	%
Tier 1 (Core) capital to risk weighted assets		175,318	12.87	%		81,750	6.00	%		107,296	7.875	%		109,000	8.00	%
Common Tier 1 (CET1) to risk weighted assets		175,318	12.87	%		61,312	4.50	%		86,859	6.375	%		88,562	6.50	%
Tier 1 (Core) Capital to average assets		175,318	8.15	%		86,093	4.00	%		N/A	N/A			107,616	5.00	%

Nature of Operations and Summary of Significant Accounting Policies - Nature of Operations and Principles of Consolidation (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($) location Institution	Dec. 31, 2021 USD ($)
Loans
Assets held in an agency or fiduciary capacity \| $	$ 1,157,837	$ 1,325,894
Number of peer institutions \| Institution	30
Orange County
Loans
Number of offices in New York	8
Westchester County
Loans
Number of offices in New York	7
Rockland County
Loans
Number of offices in New York	2
Bronx County
Loans
Number of offices in New York	1

Investment Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Investment securities
Amortized Cost	$ 623,889	$ 466,153
Unrealized Gains	75	4,152
Unrealized Losses	(76,692)	(5,508)
Fair Value	547,272	464,797
U.S. government agencies
Investment securities
Amortized Cost	107,694	80,596
Unrealized Gains	34	440
Unrealized Losses	(10,467)	(1,330)
Fair Value	97,261	79,706
Mortgage-backed securities
Investment securities
Amortized Cost	374,372	272,931
Unrealized Gains		1,285
Unrealized Losses	(46,047)	(3,784)
Fair Value	328,325	270,432
Corporate Bonds
Investment securities
Amortized Cost	28,565	20,081
Unrealized Gains		278
Unrealized Losses	(1,998)	(148)
Fair Value	26,567	20,211
Obligations of states and political subdivisions
Investment securities
Amortized Cost	113,258	92,545
Unrealized Gains	41	2,149
Unrealized Losses	(18,180)	(246)
Fair Value	$ 95,119	$ 94,448

Investment Securities - Gains and Losses (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	$ 0	$ 0	$ 0	$ 0
Gross gains	0	0	0	0
Gross losses	$ 0	$ 0	$ 0	$ 0

Investment Securities - Contractual Maturities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Amortized Cost
Due in one year or less, Amortized Cost	$ 4,067
Due after one through five years, Amortized Cost	26,077
Due after five through ten years, Amortized Cost	73,571
Due after ten years, Amortized Cost	145,802
Total, Amortized Cost	249,517
Mortgage-backed securities	374,372
Amortized Cost	623,889	$ 466,153
Fair Value
Due in one year or less, Fair Value	4,083
Due after one through five years, Fair Value	25,102
Due after five through ten years, Fair Value	65,873
Due after ten years, Fair Value	123,889
Total, Fair Value	218,947
Mortgage-backed securities	328,325
Total debt securities, Fair Value	547,272	464,797
Mortgage-backed securities
Amortized Cost
Amortized Cost	374,372	272,931
Fair Value
Total debt securities, Fair Value	328,325	270,432
Debt securities pledged as collateral	$ 424,196	$ 233,907

Investment Securities - Securities with unrealized and unrecognized losses (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Investment securities
Fair Value, Less than 12 Months	$ 347,791	$ 210,546
Fair Value, 12 Months or More	174,206	49,642
Fair Value, Total	521,997	260,188
Unrealized Losses, Less than 12 Months	(40,480)	(3,680)
Unrealized Losses, 12 Months or More	(36,212)	(1,828)
Unrealized Losses, Total	(76,692)	(5,508)
U.S. government agencies
Investment securities
Fair Value, Less than 12 Months	58,924	10,337
Fair Value, 12 Months or More	32,962	32,210
Fair Value, Total	91,886	42,547
Unrealized Losses, Less than 12 Months	(4,207)	(121)
Unrealized Losses, 12 Months or More	(6,260)	(1,209)
Unrealized Losses, Total	(10,467)	(1,330)
Mortgage-backed securities
Investment securities
Fair Value, Less than 12 Months	196,565	177,506
Fair Value, 12 Months or More	121,896	14,134
Fair Value, Total	318,461	191,640
Unrealized Losses, Less than 12 Months	(20,462)	(3,273)
Unrealized Losses, 12 Months or More	(25,585)	(511)
Unrealized Losses, Total	(46,047)	(3,784)
Corporate Bonds
Investment securities
Fair Value, Less than 12 Months	14,203	9,354
Fair Value, 12 Months or More	8,363
Fair Value, Total	22,566	9,354
Unrealized Losses, Less than 12 Months	(859)	(148)
Unrealized Losses, 12 Months or More	(1,139)
Unrealized Losses, Total	(1,998)	(148)
Obligations of states and political subdivisions
Investment securities
Fair Value, Less than 12 Months	78,099	13,349
Fair Value, 12 Months or More	10,985	3,298
Fair Value, Total	89,084	16,647
Unrealized Losses, Less than 12 Months	(14,952)	(138)
Unrealized Losses, 12 Months or More	(3,228)	(108)
Unrealized Losses, Total	$ (18,180)	$ (246)

Investment Securities - Narrative (Details) $ in Thousands	9 Months Ended	12 Months Ended
Investment Securities - Narrative (Details) $ in Thousands	Sep. 30, 2022 USD ($) security	Dec. 31, 2021 USD ($) security
Investment Securities
Other than temporary impairment loss recognized \| $	$ 0	$ 0
Number of securities in portfolio	293	252
Number of unrealized loss positions	260	78

Loans (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Loans
Total loans	$ 1,547,704	$ 1,291,428
Commercial and industrial. \| Commercial and industrial
Loans
Total loans	251,293	268,508
Commercial and industrial. \| Paycheck Protection Program
Loans
Total loans	1,897	38,114
Commercial real estate. \| Commercial real estate
Loans
Total loans	1,059,821	852,707
Commercial real estate. \| Commercial real estate construction
Loans
Total loans	132,945	72,250
Residential real estate. \| Residential real estate
Loans
Total loans	73,552	65,248
Residential real estate. \| Home equity
Loans
Total loans	12,750	13,638
Consumer
Loans
Total loans	$ 17,343	$ 19,077

Loans - Allowance for loan losses by portfolio segment (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
Allowance for loan losses:
Beginning balance	$ 23,642	$ 17,049	$ 17,661	$ 16,172
Provision for loan losses	2,084	1,008	8,517	1,883
Charge-offs	(2,887)	(79)	(3,394)	(294)
Recoveries	49	62	104	280
Ending balance	22,888	18,041	22,888	18,041
Allowance for loan losses:
individually evaluated for impairment	3,111		3,111		$ 1,433
collectively evaluated for impairment	19,777		19,777		16,228
Total ending allowance balance	22,888	18,041	22,888	18,041	17,661
Loans:
individually evaluated for impairment	29,299		29,299		25,866
collectively evaluated for impairment	1,518,405		1,518,405		1,265,562
Total ending loans balance	1,547,704		1,547,704		1,291,428
Commercial and industrial. \| Commercial and industrial
Allowance for loan losses:
Beginning balance	9,332	4,946	4,901	4,795
Provision for loan losses	573	819	5,066	896
Charge-offs	(2,817)	(71)	(2,894)	(176)
Recoveries	22	3	37	182
Ending balance	7,110	5,697	7,110	5,697
Allowance for loan losses:
individually evaluated for impairment	2,721		2,721		137
collectively evaluated for impairment	4,389		4,389		4,764
Total ending allowance balance	7,110	5,697	7,110	5,697	4,901
Loans:
individually evaluated for impairment	4,170		4,170		952
collectively evaluated for impairment	247,123		247,123		267,556
Total ending loans balance	251,293		251,293		268,508
Commercial and industrial. \| Paycheck Protection Program
Loans:
Total ending loans balance	1,897		1,897		38,114
Commercial real estate. \| Commercial real estate
Allowance for loan losses:
Beginning balance	12,303	10,536	11,183	9,782
Provision for loan losses	1,110	428	2,230	1,272
Charge-offs		(7)		(110)
Recoveries	26	59	26	73
Ending balance	13,439	11,017	13,439	11,017
Allowance for loan losses:
individually evaluated for impairment	390		390		1,272
collectively evaluated for impairment	13,049		13,049		9,911
Total ending allowance balance	13,439	11,017	13,439	11,017	11,183
Loans:
individually evaluated for impairment	23,165		23,165		23,523
collectively evaluated for impairment	1,036,656		1,036,656		829,184
Total ending loans balance	1,059,821		1,059,821		852,707
Commercial real estate. \| Commercial real estate construction
Allowance for loan losses:
Beginning balance	1,318	948	964	801
Provision for loan losses	279	(149)	633	(2)
Ending balance	1,597	799	1,597	799
Allowance for loan losses:
collectively evaluated for impairment	1,597		1,597		964
Total ending allowance balance	1,597	799	1,597	799	964
Loans:
collectively evaluated for impairment	132,945		132,945		72,250
Total ending loans balance	132,945		132,945		72,250
Residential real estate. \| Residential real estate
Allowance for loan losses:
Beginning balance	299	301	272	381
Provision for loan losses	60	(70)	138	(150)
Charge-offs			(51)
Ending balance	359	231	359	231
Allowance for loan losses:
collectively evaluated for impairment	359		359		272
Total ending allowance balance	359	231	359	231	272
Loans:
individually evaluated for impairment	1,804		1,804		1,227
collectively evaluated for impairment	71,748		71,748		64,021
Total ending loans balance	73,552		73,552		65,248
Residential real estate. \| Home equity
Allowance for loan losses:
Beginning balance	68	60	80	77
Provision for loan losses	1	20	(11)	3
Ending balance	69	80	69	80
Allowance for loan losses:
collectively evaluated for impairment	69		69		80
Total ending allowance balance	69	80	69	80	80
Loans:
individually evaluated for impairment	53		53		50
collectively evaluated for impairment	12,697		12,697		13,588
Total ending loans balance	12,750		12,750		13,638
Consumer
Allowance for loan losses:
Beginning balance	322	258	261	336
Provision for loan losses	61	(40)	461	(136)
Charge-offs	(70)	(1)	(449)	(8)
Recoveries	1		41	25
Ending balance	314	217	314	217
Allowance for loan losses:
individually evaluated for impairment					24
collectively evaluated for impairment	314		314		237
Total ending allowance balance	314	$ 217	314	$ 217	261
Loans:
individually evaluated for impairment	107		107		114
collectively evaluated for impairment	17,236		17,236		18,963
Total ending loans balance	$ 17,343		$ 17,343		$ 19,077

Loans - Loans individually evaluated (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
Unpaid Principal Balance
With no related allowance recorded	$ 19,863		$ 19,863		$ 15,497
With an allowance recorded	10,000		10,000		10,742
Recorded Investment
With no related allowance recorded	19,321		19,321		15,159
With an allowance recorded	9,978		9,978		10,707
Allowance for Loan Losses Allocated	3,111		3,111		1,433
Average Recorded Investment
With no related allowance recorded	19,414	$ 14,820	19,110	$ 14,848
With an allowance recorded	20,966	12,890	11,666	13,479
Interest Income Recognized
With no related allowance recorded			494	467
With an allowance recorded			251	530
Cash Basis Interest Recognized
With no related allowance recorded	164	155
With an allowance recorded	83	169
Commercial and industrial.
Unpaid Principal Balance
With an allowance recorded					951
Recorded Investment
With an allowance recorded					951
Allowance for Loan Losses Allocated					137
Commercial and industrial. \| Commercial and industrial
Unpaid Principal Balance
With no related allowance recorded					1
With an allowance recorded	4,172		4,172
Recorded Investment
With no related allowance recorded					1
With an allowance recorded	4,170		4,170
Allowance for Loan Losses Allocated	2,721		2,721
Average Recorded Investment
With no related allowance recorded		15		32
With an allowance recorded	18,599	2,363	9,264	2,892
Interest Income Recognized
With no related allowance recorded				1
With an allowance recorded			157	118
Cash Basis Interest Recognized
With an allowance recorded	52	33
Commercial real estate.
Unpaid Principal Balance
With an allowance recorded					9,593
Recorded Investment
With an allowance recorded					9,570
Allowance for Loan Losses Allocated					1,272
Commercial real estate. \| Commercial real estate
Unpaid Principal Balance
With no related allowance recorded	17,991		17,991		14,291
With an allowance recorded	5,721		5,721
Recorded Investment
With no related allowance recorded	17,464		17,464		13,953
With an allowance recorded	5,701		5,701
Allowance for Loan Losses Allocated	390		390
Average Recorded Investment
With no related allowance recorded	17,553	13,614	17,549	13,620
With an allowance recorded	2,259	10,335	2,292	10,390
Interest Income Recognized
With no related allowance recorded			476	442
With an allowance recorded			90	405
Cash Basis Interest Recognized
With no related allowance recorded	158	147
With an allowance recorded	30	134
Commercial real estate. \| Commercial real estate construction
Average Recorded Investment
With no related allowance recorded	578	578	578	578
Residential real estate.
Unpaid Principal Balance
With an allowance recorded					84
Recorded Investment
With an allowance recorded					72
Residential real estate. \| Residential real estate
Unpaid Principal Balance
With no related allowance recorded	1,816		1,816		1,155
Recorded Investment
With no related allowance recorded	1,804		1,804		1,155
Average Recorded Investment
With no related allowance recorded	1,283	588	983	593
With an allowance recorded		74		77
Interest Income Recognized
With no related allowance recorded			18	23
With an allowance recorded				2
Cash Basis Interest Recognized
With no related allowance recorded	6	8
With an allowance recorded		1
Residential real estate. \| Home equity
Unpaid Principal Balance
With no related allowance recorded	56		56		50
Recorded Investment
With no related allowance recorded	53		53		50
Average Recorded Investment
With no related allowance recorded		25		25
Interest Income Recognized
With no related allowance recorded				1
Consumer
Unpaid Principal Balance
With an allowance recorded	107		107		114
Recorded Investment
With an allowance recorded	107		107		114
Allowance for Loan Losses Allocated					$ 24
Average Recorded Investment
With an allowance recorded	108	118	110	120
Interest Income Recognized
With an allowance recorded			$ 4	$ 5
Cash Basis Interest Recognized
With an allowance recorded	$ 1	$ 1

Loans - Recorded investment in non-accrual and loans (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Loans
Non-accrual	$ 9,327	$ 4,560
Loans Past Due Over 90 Days Non-accrual Still Accruing	865	1,393
Commercial and industrial. \| Commercial and industrial
Loans
Non-accrual	4,170
Loans Past Due Over 90 Days Non-accrual Still Accruing	409	720
Commercial real estate. \| Commercial real estate
Loans
Non-accrual	3,958	3,928
Loans Past Due Over 90 Days Non-accrual Still Accruing		465
Residential real estate. \| Residential real estate
Loans
Non-accrual	1,146	578
Residential real estate. \| Home equity
Loans
Non-accrual	53	50
Consumer
Loans
Non-accrual		4
Loans Past Due Over 90 Days Non-accrual Still Accruing	$ 456	$ 208

Loans - Aging of the recorded investment (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
30 - 59 Days Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	$ 834	$ 1,701
60 - 89 Days Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	1,111	4,742
Greater Than 90 Days
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	3,786	2,721
Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	5,731	9,164
Not Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	1,541,973	1,282,264
Commercial and industrial. \| Commercial and industrial \| 30 - 59 Days Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	461	541
Commercial and industrial. \| Commercial and industrial \| 60 - 89 Days Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	492	1,519
Commercial and industrial. \| Commercial and industrial \| Greater Than 90 Days
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	1,500	720
Commercial and industrial. \| Commercial and industrial \| Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	2,453	2,780
Commercial and industrial. \| Commercial and industrial \| Not Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	248,840	265,728
Commercial real estate. \| Commercial real estate \| 30 - 59 Days Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	281
Commercial real estate. \| Commercial real estate \| 60 - 89 Days Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans		2,873
Commercial real estate. \| Commercial real estate \| Greater Than 90 Days
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	684	1,161
Commercial real estate. \| Commercial real estate \| Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	965	4,034
Commercial real estate. \| Commercial real estate \| Not Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	1,058,856	848,673
Commercial real estate. \| Commercial real estate construction \| Not Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	132,945	72,250
Residential real estate. \| Residential real estate \| 30 - 59 Days Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans		26
Residential real estate. \| Residential real estate \| 60 - 89 Days Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	591
Residential real estate. \| Residential real estate \| Greater Than 90 Days
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	1,146	578
Residential real estate. \| Residential real estate \| Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	1,737	604
Residential real estate. \| Residential real estate \| Not Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	71,815	64,644
Residential real estate. \| Home equity \| 60 - 89 Days Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans		58
Residential real estate. \| Home equity \| Greater Than 90 Days
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans		50
Residential real estate. \| Home equity \| Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans		108
Residential real estate. \| Home equity \| Not Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	12,750	13,530
Consumer \| 30 - 59 Days Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	92	1,134
Consumer \| 60 - 89 Days Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	28	292
Consumer \| Greater Than 90 Days
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	456	212
Consumer \| Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	576	1,638
Consumer \| Not Past Due
Financing Receivable, Recorded Investments, Aging [Abstract]
Loans	$ 16,767	$ 17,439

Loans - Troubled debt restructurings (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
Loans
Loans in process of foreclosure	$ 2,064		$ 2,064		$ 2,024
Recorded investment in troubled debt restructurings	14,168		14,168		14,500
Allocated specific allowance	173		173		687
Commitments to lend additional funds	0		0		0
Loans restructured loans that defaulted	$ 0	$ 0	$ 0	$ 0
Loans modified resulting in TDRs	0	0	0	0
Residential real estate. \| Residential real estate
Loans
Loans in process of foreclosure	$ 1,125		$ 1,125		$ 578

Loans - Risk category of loans by class of loans (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Loans
Loans	$ 1,547,704	$ 1,291,428
Pass
Loans
Loans	1,519,094	1,256,950
Special Mention
Loans
Loans	6,250	4,885
Substandard
Loans
Loans	19,521	29,593
Doubtful
Loans
Loans	2,839
Commercial and industrial. \| Commercial and industrial
Loans
Loans	251,293	268,508
Commercial and industrial. \| Commercial and industrial \| Pass
Loans
Loans	246,129	252,268
Commercial and industrial. \| Commercial and industrial \| Special Mention
Loans
Loans	609	4,156
Commercial and industrial. \| Commercial and industrial \| Substandard
Loans
Loans	1,716	12,084
Commercial and industrial. \| Commercial and industrial \| Doubtful
Loans
Loans	2,839
Commercial real estate. \| Commercial real estate
Loans
Loans	1,059,821	852,707
Commercial real estate. \| Commercial real estate \| Pass
Loans
Loans	1,038,272	835,787
Commercial real estate. \| Commercial real estate \| Special Mention
Loans
Loans	5,641	679
Commercial real estate. \| Commercial real estate \| Substandard
Loans
Loans	15,908	16,241
Commercial real estate. \| Commercial real estate construction
Loans
Loans	132,945	72,250
Commercial real estate. \| Commercial real estate construction \| Pass
Loans
Loans	132,945	72,250
Residential real estate. \| Residential real estate
Loans
Loans	73,552	65,248
Residential real estate. \| Residential real estate \| Pass
Loans
Loans	71,815	64,094
Residential real estate. \| Residential real estate \| Substandard
Loans
Loans	1,737	1,154
Residential real estate. \| Home equity
Loans
Loans	12,750	13,638
Residential real estate. \| Home equity \| Pass
Loans
Loans	12,697	13,588
Residential real estate. \| Home equity \| Special Mention
Loans
Loans		50
Residential real estate. \| Home equity \| Substandard
Loans
Loans	53
Consumer
Loans
Loans	17,343	19,077
Consumer \| Pass
Loans
Loans	17,236	18,963
Consumer \| Substandard
Loans
Loans	$ 107	$ 114

Loans - Narrative (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Loans
Loans	$ 1,547,704	$ 1,291,428
Directors and principal officers of the Company, including their immediate families
Loans
Loans	$ 11,922	$ 5,076

Fair Value - Assets and liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair Value
Transfer of assets, Level 1 to level 2	$ 0	$ 0
Transfer of assets, Level 2 to level 1	0	0
Transfer of liabilities, Level 1 to level 2	0	0
Transfer of liabilities, Level 2 to level 1	0	0
Recurring
Fair Value
Total securities available for sale	547,272	464,797
Recurring \| U.S. government agencies
Fair Value
Total securities available for sale	97,261	79,706
Recurring \| Mortgage-backed securities
Fair Value
Total securities available for sale	328,325	270,432
Recurring \| Corporate Bonds
Fair Value
Total securities available for sale	26,567	20,211
Recurring \| Obligations of states and political subdivisions
Fair Value
Total securities available for sale	95,119	94,448
Recurring \| Level 2
Fair Value
Total securities available for sale	547,272	464,797
Recurring \| Level 2 \| U.S. government agencies
Fair Value
Total securities available for sale	97,261	79,706
Recurring \| Level 2 \| Mortgage-backed securities
Fair Value
Total securities available for sale	328,325	270,432
Recurring \| Level 2 \| Corporate Bonds
Fair Value
Total securities available for sale	26,567	20,211
Recurring \| Level 2 \| Obligations of states and political subdivisions
Fair Value
Total securities available for sale	$ 95,119	$ 94,448

Fair Value - Non-recurring (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair Value
Reserves allocated to impaired loans	$ 3,111	$ 1,433
Nonrecurring
Fair Value
Impaired loans	1,174	6,689
Level 3 \| Nonrecurring
Fair Value
Impaired loans	1,174	6,689
Reserves allocated to impaired loans	$ 1,988	$ 409

Fair Value - Level 3 (Details) - Nonrecurring $ in Thousands	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Fair Value
Impaired loans	$ 1,174	$ 6,689
Level 3
Fair Value
Impaired loans	1,174	6,689
Level 3 \| Appraisal of collateral \| Appraisal and liquidation adjustment
Fair Value
Impaired loans	$ 1,174
Level 3 \| Appraisal of collateral \| Appraisal and liquidation adjustment \| Minimum
Fair Value
Impaired loans, Measurement input	20
Level 3 \| Appraisal of collateral \| Appraisal and liquidation adjustment \| Maximum
Fair Value
Impaired loans, Measurement input	66
Level 3 \| Appraisal of collateral \| Appraisal and liquidation adjustment \| Weighted average
Fair Value
Impaired loans, Measurement input	62
Level 3 \| Commercial real estate. \| Appraisal of collateral \| Appraisal and liquidation adjustment
Fair Value
Impaired loans		$ 6,689
Level 3 \| Commercial real estate. \| Appraisal of collateral \| Appraisal and liquidation adjustment \| Minimum
Fair Value
Impaired loans, Measurement input		20
Level 3 \| Commercial real estate. \| Appraisal of collateral \| Appraisal and liquidation adjustment \| Maximum
Fair Value
Impaired loans, Measurement input		56
Level 3 \| Commercial real estate. \| Appraisal of collateral \| Appraisal and liquidation adjustment \| Weighted average
Fair Value
Impaired loans, Measurement input		(39)

Fair Value - Carrying amounts and estimated fair values (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Carrying Amount
Financial assets:
Cash and due from banks	$ 180,249	$ 306,179
Loans, net	1,524,816	1,273,767
Accrued interest receivable	5,554	6,643
Restricted investment in bank stocks	3,382	2,217
Financial liabilities:
Deposits	2,187,553	1,914,384
Note payable	3,000	3,000
Subordinated notes, net of issuance costs	19,431	19,376
Accrued interest payable	32	250
Fair Value.
Financial assets:
Cash and due from banks	180,249	306,179
Loans, net	1,504,301	1,260,146
Accrued interest receivable	5,554	6,643
Financial liabilities:
Deposits	2,187,553	1,914,271
Note payable	2,994	3,030
Subordinated notes, net of issuance costs	17,906	18,867
Accrued interest payable	32	250
Fair Value. \| Level 1
Financial assets:
Cash and due from banks	180,249	306,179
Financial liabilities:
Deposits	2,119,769	1,831,944
Fair Value. \| Level 2
Financial assets:
Accrued interest receivable	2,766	1,603
Financial liabilities:
Deposits	67,784	82,327
Note payable	2,994	3,030
Subordinated notes, net of issuance costs	17,906	18,867
Accrued interest payable	32	250
Fair Value. \| Level 3
Financial assets:
Loans, net	1,504,301	1,260,146
Accrued interest receivable	$ 2,788	$ 5,040

Deposits - Analysis of deposits (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Deposits
Non-interest bearing demand accounts	$ 788,106	$ 701,645
Interest-bearing demand accounts	349,755	301,596
Money market accounts	743,581	615,111
Savings accounts	236,061	213,592
Certificates of Deposit	70,050	82,440
Total deposits	2,187,553	1,914,384
Time deposits exceeding FDIC insurance limit of $250	$ 18,948	$ 23,859

Deposits - Scheduled maturities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Deposits
2022	$ 16,683
2023	41,691
2024	6,835
2025	4,841
Total	70,050
Deposits of executive officers, directors and principal officers	$ 11,230	$ 6,109

Pension Plan and Stock Compensation - Pension Plan (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Pension Plan and Stock Compensation
Service cost		$ 47		$ 142
Interest cost	$ 202	190	$ 606	570
Expected return on plan assets	(496)	(514)	(1,489)	(1,544)
Amortization of transition cost	(7)	(12)	(21)	(36)
Amortization of net loss		5		16
Net periodic benefit cost/(income)	$ (301)	$ (284)	$ (904)	$ (852)

Pension Plan and Stock Compensation - Stock Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Sep. 22, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Pension Plan and Stock Compensation
Stock-based compensation costs				$ 482	$ 69
Restricted stock expense				133	$ 390
Granted					15,162
Restricted Stock Awards
Pension Plan and Stock Compensation
Restricted stock expense		$ 33	$ 128	$ 133	$ 390
Granted				0
Vesting percentage				33.00%
Unamortized expense		$ 90		$ 90
Shares
Non-vested at beginning of period (in shares)				22,922
Vested (in shares)				(11,245)
Non-vested at end of period (in shares)		11,677		11,677
Weighted Average Fair Value
Non-vested at beginning of period (in dollars per share)				$ 28.92
Vested (in dollars per share)				28.59
Non-vested at end of period (in dollars per share)		$ 29.24		$ 29.24
Restricted Stock Units (RSUs)
Shares
Non-vested at beginning of period (in shares)				48,004
Granted (in shares)	48,004			18,555
Vested (in shares)				(9,637)
Issued (in shares)				(2,000)
Forfeited (in shares)				(2,733)
Non-vested at end of period (in shares)		52,189		52,189

Pension Plan and Stock Compensation - Restricted Stock Units (Details) - USD ($) $ in Thousands		9 Months Ended
	Sep. 22, 2021	Sep. 30, 2022
Pension Plan and Stock Compensation
Maximum discretionary contributions to a KSOP trust	$ 200,000
Restricted Stock Units (RSUs)
Pension Plan and Stock Compensation
Granted (in shares)	48,004	18,555
Restricted Stock Units (RSUs) \| Officers
Pension Plan and Stock Compensation
Granted (in shares)	31,504
Vesting period	3 years
Restricted Stock Units (RSUs) \| Officers \| First anniversary
Pension Plan and Stock Compensation
Vesting percentage	33.00%
Restricted Stock Units (RSUs) \| Officers \| Second anniversary
Pension Plan and Stock Compensation
Vesting percentage	33.00%
Restricted Stock Units (RSUs) \| Officers \| Third anniversary
Pension Plan and Stock Compensation
Vesting percentage	33.00%
Restricted Stock Units (RSUs) \| Non-employee directors
Pension Plan and Stock Compensation
Granted (in shares)	16,500
Vesting percentage	100.00%

Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ 145,723	$ 140,911	$ 182,836	$ 135,423
Net current period other comprehensive income/(loss)	(16,554)	(104)	(58,872)	(3,039)
Ending balance	136,190	180,603	136,190	180,603
Unrealized gains and losses on available-for-sale securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(43,780)	2,009	(1,072)	4,949
Other comprehensive income/(loss) before reclassification	(16,749)	(106)	(59,457)	(3,046)
Net current period other comprehensive income/(loss)	(16,749)	(106)	(59,457)	(3,046)
Ending balance	(60,529)	1,903	(60,529)	1,903
Amortization of defined benefit pension
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(2,110)	(3,266)	(2,506)	(3,277)
Other comprehensive income/(loss) before reclassification	206		618
Less amounts reclassified from accumulated other comprehensive income	8	5	24	16
Net current period other comprehensive income/(loss)	198	5	594	16
Ending balance	(1,912)	(3,261)	(1,912)	(3,261)
Deferred Compensation Liability
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	129	141	135	147
Other comprehensive income/(loss) before reclassification	(3)	(3)	(9)	(9)
Net current period other comprehensive income/(loss)	(3)	(3)	(9)	(9)
Ending balance	126	138	126	138
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(45,761)	(1,116)	(3,443)	1,819
Other comprehensive income/(loss) before reclassification	(16,546)	(109)	(58,848)	(3,055)
Less amounts reclassified from accumulated other comprehensive income	8	5	24	16
Net current period other comprehensive income/(loss)	(16,554)	(104)	(58,872)	(3,039)
Ending balance	$ (62,315)	$ (1,220)	$ (62,315)	$ (1,220)

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 852
-SubTopic 10
-Section 55
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=84165509&loc=d3e56426-112766

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+ Details

Accumulated Other Comprehensive Income (Loss) - Amount Reclassified from AOCI (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Accumulated Other Comprehensive Income (Loss)
Employee benefits transition asset	$ 808	$ 785	$ 2,322	$ 2,050
Employee benefits actuarial gains	250	247	741	770
Total before tax	9,709	6,927	18,753	19,561
Provision for income taxes	1,856	1,351	3,460	3,767
Net of tax	7,853	5,576	15,293	15,794
Reclassifications out of accumulated other comprehensive income (loss) \| Amortization of defined benefit pension
Accumulated Other Comprehensive Income (Loss)
Employee benefits transition asset	(7)	(11)	(21)	(36)
Employee benefits actuarial gains		5		16
Total before tax	(7)	(6)	(21)	(20)
Provision for income taxes	1	1	3	4
Net of tax	(8)	(5)	(24)	(16)
Reclassifications out of accumulated other comprehensive income (loss) \| Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)
Net of tax	$ (8)	$ (5)	$ (24)	$ (16)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

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- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Noninterest Income
Service charges on deposit accounts	$ 182	$ 166	$ 511	$ 499
Trust income	1,176	1,230	3,569	3,537
Investment advisory income	1,085	1,176	3,385	3,588
Earnings on bank owned life insurance	240	209	709	554
Other	250	247	741	770
TOTAL NONINTEREST INCOME	2,933	3,028	8,915	8,948
Other noninterest income within the scope of ASC 606	231	195	644	588
Other noninterest income outside the scope of ASC 606	$ 19	$ 52	$ 97	$ 182

Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Segment Information (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Segment Information
Net interest income	$ 21,415	$ 15,880	$ 55,263	$ 44,252
Noninterest income	2,933	3,028	8,915	8,948
Provision for loan loss	(2,084)	(1,008)	(8,517)	(1,883)
Noninterest expenses	(12,555)	(10,973)	(36,908)	(31,756)
Income tax expense	(1,856)	(1,351)	(3,460)	(3,767)
NET INCOME	7,853	5,576	15,293	15,794
Total assets	2,368,370	2,175,229	2,368,370	2,175,229	$ 2,142,583
Banking
Segment Information
Net interest income	21,415	15,880	55,263	44,252
Noninterest income	672	622	1,961	1,823
Provision for loan loss	(2,084)	(1,008)	(8,517)	(1,883)
Noninterest expenses	(10,893)	(9,279)	(31,532)	(26,741)
Income tax expense	(1,730)	(1,201)	(3,129)	(3,324)
NET INCOME	7,380	5,014	14,046	14,127
Total assets	2,360,897	2,166,521	2,360,897	2,166,521
Wealth Management
Segment Information
Noninterest income	2,261	2,406	6,954	7,125
Noninterest expenses	(1,662)	(1,694)	(5,376)	(5,015)
Income tax expense	(126)	(150)	(331)	(443)
NET INCOME	473	562	1,247	1,667
Total assets	$ 7,473	$ 8,708	$ 7,473	$ 8,708

Regulatory Capital Matters (Details) $ in Thousands	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Regulatory Capital Matters
Capital conservation buffer ratio	0.025
Total capital to risk weighted assets
Total capital to risk weighted assets, Actual amount	$ 226,991	$ 192,359
Total capital to risk weighted assets, Actual ratio	0.1360	0.1412
Total capital to risk weighted assets, For Capital Adequacy Purposes	$ 133,517	$ 109,000
Total capital to risk weighted assets, For Capital Adequacy Purposes Ratio	0.0800	0.0800
Total capital to risk weighted assets, For Capital Adequacy Purposes with Capital Buffer	$ 164,810	$ 134,546
Total capital to risk weighted assets, For Capital Adequacy Purposes with Capital Buffer Ratio	0.09875	0.09875
Total capital to risk weighted assets, To be Well Capitalized under Prompt Corrective Action Provisions	$ 166,896	$ 136,250
Total capital to risk weighted assets, To be Well Capitalized under Prompt Corrective Action Provisions Ratio	0.1000	0.1000
Tier 1 (Core) capital to risk weighted assets
Tier 1 (Core) capital to risk weighted assets, Actual amount	$ 206,102	$ 175,318
Tier 1 (Core) capital to risk weighted assets, Actual ratio	0.1235	0.1287
Tier 1 (Core) capital to risk weighted assets, For Capital Adequacy Purposes	$ 100,138	$ 81,750
Tier 1 (Core) capital to risk weighted assets, For Capital Adequacy Purposes Ratio	0.0600	0.0600
Tier 1 (Core) capital to risk weighted assets, For Capital Adequacy Purposes with Capital Buffer	$ 131,431	$ 107,296
Tier 1 (Core) capital to risk weighted assets, Actual amount	0.07875	0.07875
Tier 1 (Core) capital to risk weighted assets, To be Well Capitalized under Prompt Corrective Action Provisions	$ 133,517	$ 109,000
Tier 1 (Core) capital to risk weighted assets, To be Well Capitalized under Prompt Corrective Action Provisions Ratio	0.0800	0.0800
Common Tier 1 (CET1) to risk weighted assets
Common Tier 1 (CET1) to risk weighted assets, Actual amount	$ 206,102	$ 175,318
Common Tier 1 (CET1) to risk weighted assets, Actual ratio	0.1235	0.1287
Common Tier 1 (CET1) to risk weighted assets, For Capital Adequacy Purposes	$ 75,103	$ 61,312
Common Tier 1 (CET1) to risk weighted assets, For Capital Adequacy Purposes Ratio	0.0450	0.0450
Common Tier 1 (CET1) to risk weighted assets, For Capital Adequacy Purposes with Capital Buffer	$ 106,396	$ 86,859
Common Tier 1 (CET1) to risk weighted assets, For Capital Adequacy Purposes with Capital Buffer Ratio	0.06375	0.06375
Common Tier 1 (CET1) to risk weighted assets, To be Well Capitalized under Prompt Corrective Action Provisions	$ 108,482	$ 88,562
Common Tier 1 (CET1) to risk weighted assets, To be Well Capitalized under Prompt Corrective Action Provisions Ratio	0.0650	0.0650
Tier 1 (Core) Capital to average assets
Tier 1 (Core) Capital to average assets, Actual amount	$ 206,102	$ 175,318
Tier 1 (Core) Capital to average assets, Actual ratio	0.0848	0.0815
Tier 1 (Core) Capital to average assets, For Capital Adequacy Purposes	$ 97,267	$ 86,093
Tier 1 (Core) Capital to average assets, For Capital Adequacy Purposes Ratio	0.0400	0.0400
Tier 1 (Core) Capital to average assets, To be Well Capitalized under Prompt Corrective Action Provisions	$ 121,584	$ 107,616
Tier 1 (Core) Capital to average assets, To be Well Capitalized under Prompt Corrective Action Provisions Ratio	0.0500	0.0500