10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

For the Quarterly period ended September 30, 2022

Commission file number 001-35296

FARMERS NATIONAL BANC CORP.

(Exact name of registrant as specified in its charter)

Ohio	34-1371693
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No)
20 South Broad Street Canfield, OH	44406
(Address of principal executive offices)	(Zip Code)

(330) 533-3341

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act.

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, No Par Value	FMNB	The NASDAQ Stock Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Small reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at October 31, 2022
Common Stock, No Par Value	34,059,657 shares

		Page Number
PART I - FINANCIAL INFORMATION
Item 1	Financial Statements (Unaudited)
	Included in Part I of this report:
	Farmers National Banc Corp. and Subsidiaries
	Consolidated Balance Sheets	2
	Consolidated Statements of Income	3
	Consolidated Statements of Comprehensive Income	4
	Consolidated Statements of Stockholders’ Equity	5
	Consolidated Statements of Cash Flows	6
	Notes to Unaudited Consolidated Financial Statements	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4	Controls and Procedures	43
PART II - OTHER INFORMATION		44
Item 1	Legal Proceedings	44
Item 1A	Risk Factors	44
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3	Defaults Upon Senior Securities	44
Item 4	Mine Safety Disclosures	44
Item 5	Other Information	44
Item 6	Exhibits	45
SIGNATURES		46
10-Q Certifications
Section 906 Certifications

1

CONSOLIDATED BALANCE SHEETS

FARMERS NATIONAL BANC CORP. AND SUBSIDIARIES

	(In Thousands of Dollars)
(September 30, 2022 balance sheet is unaudited)	September 30, 2022			December 31, 2021
ASSETS
Cash and due from banks	$	20,814		$	29,150
Federal funds sold and other		59,167			83,640
TOTAL CASH AND CASH EQUIVALENTS		79,981			112,790
Securities available for sale		1,295,133			1,427,677
Other investments		34,399			30,459
Loans held for sale		2,142			4,545
Loans		2,399,981			2,331,082
Less allowance for credit losses		27,282			29,386
NET LOANS		2,372,699			2,301,696
Premises and equipment, net		39,327			37,520
Goodwill		94,640			94,240
Other intangibles, net		7,728			8,366
Bank owned life insurance		75,075			73,855
Other assets		118,898			51,601
TOTAL ASSETS	$	4,120,022		$	4,142,749
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing	$	934,638		$	916,237
Interest-bearing		2,590,054			2,630,998
Brokered time deposits		42,459			0
TOTAL DEPOSITS		3,567,151			3,547,235
Short-term borrowings		155,000			0
Long-term borrowings		88,098			87,758
Other liabilities		44,154			35,324
TOTAL LIABILITIES		3,854,403			3,670,317
Commitments and contingent liabilities
Stockholders' Equity:
Common Stock - Authorized 50,000,000 shares in 2022 and 2021; 35,128,962 shares issued in 2022 and 2021 and 34,059,657 and 33,898,237 shares outstanding in 2022 and 2021, respectively		304,838			306,123
Retained earnings		204,808			173,896
Accumulated other comprehensive income (loss)		(229,162	)		9,295
Treasury stock, at cost; 1,069,305 and 1,230,725 shares in 2022 and 2021, respectively		(14,865	)		(16,882	)
TOTAL STOCKHOLDERS' EQUITY		265,619			472,432
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	4,120,022		$	4,142,749

See accompanying notes

2

CONSOLIDATED STATEMENTS OF INCOME

FARMERS NATIONAL BANC CORP. AND SUBSIDIARIES

	(In Thousands except Per Share Data)
	For the Three Months Ended						For the Nine Months Ended
(Unaudited)	September 30, 2022			September 30, 2021			September 30, 2022			September 30, 2021
INTEREST AND DIVIDEND INCOME
Loans, including fees	$	27,494		$	22,578		$	78,770		$	69,960
Taxable securities		5,477			3,222			15,287			7,452
Tax exempt securities		3,035			2,430			9,025			6,846
Dividends		199			113			545			355
Federal funds sold and other interest income		205			32			348			161
TOTAL INTEREST AND DIVIDEND INCOME		36,410			28,375			103,975			84,774
INTEREST EXPENSE
Deposits		3,210			1,346			6,105			5,401
Short-term borrowings		533			0			631			7
Long-term borrowings		886			495			2,505			1,075
TOTAL INTEREST EXPENSE		4,629			1,841			9,241			6,483
NET INTEREST INCOME		31,781			26,534			94,734			78,291
Provision (credit) for credit losses		433			(947	)		(15	)		(472	)
Provision (credit) for unfunded loans		15			(1	)		721			(1	)
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		31,333			27,482			94,028			78,764
NONINTEREST INCOME
Service charges on deposit accounts		1,229			924			3,513			2,522
Bank owned life insurance income		406			340			1,220			924
Trust fees		2,370			2,335			7,265			6,930
Insurance agency commissions		1,136			799			3,269			2,750
Security (losses) gains, including fair value changes for equity securities		(17	)		459			(88	)		979
Retirement plan consulting fees		332			334			1,052			1,043
Investment commissions		424			638			1,675			1,665
Net gains on sale of loans		326			1,466			1,820			6,557
Other mortgage banking income (loss), net		94			32			193			(138	)
Debit card and EFT fees		1,463			1,227			4,407			3,720
Legal settlement		0			0			8,375			0
Other operating income		1,064			461			3,301			1,703
TOTAL NONINTEREST INCOME		8,827			9,015			36,002			28,655
NONINTEREST EXPENSES
Salaries and employee benefits		10,724			9,321			33,628			29,163
Occupancy and equipment		3,028			1,899			8,626			6,065
FDIC insurance and state and local taxes		1,017			692			2,942			2,086
Professional fees		985			1,009			5,176			2,895
Merger related costs		872			472			3,486			588
Advertising		596			466			1,474			1,083
Intangible amortization		432			316			1,271			948
Core processing charges		738			860			2,606			2,318
Charitable donation		0			0			6,000			0
Other operating expenses		3,007			2,093			8,107			6,369
TOTAL NONINTEREST EXPENSES		21,399			17,128			73,316			51,515
INCOME BEFORE INCOME TAXES		18,761			19,369			56,714			55,904
INCOME TAXES		3,315			3,358			9,473			9,762
NET INCOME	$	15,446		$	16,011		$	47,241		$	46,142
EARNINGS PER SHARE - basic	$	0.46		$	0.57		$	1.40		$	1.63
EARNINGS PER SHARE - fully diluted	$	0.46		$	0.56		$	1.39		$	1.63

See accompanying notes

3

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FARMERS NATIONAL BANC CORP. AND SUBSIDIARIES

	(In Thousands of Dollars)
	For the Three Months Ended						For the Nine Months Ended
(Unaudited)	September 30, 2022			September 30, 2021			September 30, 2022			September 30, 2021
NET INCOME	$	15,446		$	16,011		$	47,241		$	46,142
Other comprehensive (loss) income:
Net unrealized holding losses on available for sale securities		(83,980	)		(2,754	)		(301,874	)		(8,990	)
Reclassification adjustment for losses (gains) realized in income		5			(464	)		36			(848	)
Net unrealized holding losses		(83,975	)		(3,218	)		(301,838	)		(9,838	)
Income tax effect		17,635			674			63,386			2,066
Unrealized holding losses, net of reclassification and tax		(66,340	)		(2,544	)		(238,452	)		(7,772	)
Change in funded status of post-retirement plan, net of tax		(2	)		0			(5	)		0
Other comprehensive loss, net of tax		(66,342	)		(2,544	)		(238,457	)		(7,772	)
TOTAL COMPREHENSIVE (LOSS) INCOME	$	(50,896	)	$	13,467		$	(191,216	)	$	38,370

See accompanying notes

4

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FARMERS NATIONAL BANC CORP. AND SUBSIDIARIES

(Table Dollar Amounts in Thousands except Per Share Data)

							Accumulated
							Other
	Common			Retained			Comprehensive			Treasury
(Unaudited)	Stock			Earnings			Income (Loss)			Stock			Total
Balance December 31, 2021	$	306,123		$	173,896		$	9,295		$	(16,882	)	$	472,432
Net income					15,844									15,844
Other comprehensive loss								(88,795	)					(88,795	)
Restricted share issuance		(1,030	)								1,030			0
Stock based compensation expense		365												365
Vesting of Long Term Incentive Plan		(788	)								368			(420	)
Share forfeitures for taxes											(102	)		(102	)
Dividends paid at $0.16 per share					(5,438	)								(5,438	)
Balance March 31, 2022	$	304,670		$	184,302		$	(79,500	)	$	(15,586	)	$	393,886
Net income					15,951									15,951
Other comprehensive loss								(83,320	)					(83,320	)
Restricted share issuance		(362	)								362			0
Stock based compensation expense		438												438
Vesting of Long Term Incentive Plan		(39	)											(39	)
Share forfeitures for taxes											(23	)		(23	)
Dividends paid at $0.16 per share					(5,444	)								(5,444	)
Balance June 30, 2022	$	304,707		$	194,809		$	(162,820	)	$	(15,247	)	$	321,449
Net income					15,446									15,446
Other comprehensive loss								(66,342	)					(66,342	)
Restricted share issuance		(424	)								424			0
Restricted share forfeitures		42									(42	)		0
Stock based compensation expense		513												513
Dividends paid at $0.16 per share					(5,447	)								(5,447	)
Balance September 30, 2022	$	304,838		$	204,808		$	(229,162	)	$	(14,865	)	$	265,619
							Accumulated
							Other
	Common			Retained			Comprehensive			Treasury
	Stock			Earnings			Income (Loss)			Stock			Total
Balance December 31, 2020	$	208,763		$	138,073		$	22,032		$	(18,771	)	$	350,097
Net income					14,556									14,556
Other comprehensive loss								(12,100	)					(12,100	)
Stock based compensation expense		330												330
Vesting of Long Term Incentive Plan		(894	)								894			0
Share forfeitures for taxes											(366	)		(366	)
Cumulative impact of ASU 2016-13 adoption (CECL)					(1,936	)								(1,936	)
Dividends paid at $0.11 per share					(3,110	)								(3,110	)
Treasury share purchases											(116	)		(116	)
Balance March 31, 2021	$	208,199		$	147,583		$	9,932		$	(18,359	)	$	347,355
Net income					15,575									15,575
Other comprehensive income								6,872						6,872
Stock based compensation expense		257												257
Restricted share issuance		(144	)								144			0
Share forfeitures for taxes											(35	)		(35	)
Dividends paid at $0.11 per share					(3,116	)								(3,116	)
Balance June 30, 2021	$	208,312		$	160,042		$	16,804		$	(18,250	)	$	366,908
Net income					16,011									16,011
Other comprehensive loss								(2,544	)					(2,544	)
Stock based compensation expense		278												278
Restricted share issuance		(51	)								51			0
Share forfeitures for taxes											(15	)		(15	)
Dividends paid at $0.11 per share					(3,114	)								(3,114	)
Balance September 30, 2021	$	208,539		$	172,939		$	14,260		$	(18,214	)	$	377,524

See accompanying notes.

5

CONSOLIDATED STATEMENTS OF CASH FLOWS

FARMERS NATIONAL BANC CORP. AND SUBSIDIARIES

	(In Thousands of Dollars)
	Nine Months Ended
(Unaudited)	September 30, 2022			September 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	47,241		$	46,142
Adjustments to reconcile net income to net cash from operating activities:
Credit for credit losses		(15	)		(472	)
Provision (credit) for unfunded loans		721			(1	)
Depreciation and amortization		3,475			2,429
Net amortization of securities		3,846			2,254
Available for sale security losses (gains)		36			(848	)
Realized losses (gains) on equity securities		52			(141	)
Loss on premises and equipment sales and disposals, net		20			52
Stock compensation expense		1,316			865
Earnings on bank owned life insurance		(1,220	)		(884	)
Income recognized from death benefit on bank owned life insurance		0			(40	)
Origination of loans held for sale		(86,710	)		(236,319	)
Proceeds from loans held for sale		90,794			244,876
Net gains on sale of loans		(1,820	)		(6,557	)
Net change in other assets and liabilities		4,387			(11,399	)
NET CASH FROM OPERATING ACTIVITIES		62,123			39,957
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and repayments of securities available for sale		63,340			48,681
Proceeds from sales of securities available for sale		2,624			35,176
Purchases of securities available for sale		(239,140	)		(702,871	)
Proceeds from sales of equity securities		60			87
Purchase of equity securities		(65	)		(48	)
Proceeds from maturities and repayments of SBIC funds		2,052			1,103
Purchases of SBIC funds		(1,911	)		(784	)
Proceeds from redemption of regulatory stock		1,705			2,145
Purchase of regulatory stock		(5,833	)		(22	)
Loan originations and payments, net		(71,709	)		185,293
Proceeds from BOLI death benefit		0			352
Proceeds from land and building sales		1,067			0
Additions to premises and equipment		(4,757	)		(460	)
Net cash paid in business combinations		(1,033	)		0
NET CASH FROM INVESTING ACTIVITIES		(253,600	)		(431,348	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits		19,916			255,535
Net change in short-term borrowings		155,000			(2,521	)
Repayment of long-term borrowings		0			(26,980	)
Cash dividends paid		(16,248	)		(9,340	)
Repurchase of common shares		0			(116	)
NET CASH FROM FINANCING ACTIVITIES		158,668			216,578
NET CHANGE IN CASH AND CASH EQUIVALENTS		(32,809	)		(174,813	)
Beginning cash and cash equivalents		112,790			254,621
Ending cash and cash equivalents	$	79,981		$	79,808
Supplemental cash flow information:
Interest paid	$	8,799		$	6,782
Supplemental noncash disclosures:
Issuance of stock awards	$	2,184		$	1,089

See accompanying notes

6

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Principles of Consolidation:

Farmers National Banc Corp. (“Company” or "Farmers") is a Financial Holding Company registered under the Bank Holding Company Act of 1956, as amended. The Company provides full banking services through its nationally chartered subsidiary, The Farmers National Bank of Canfield (“Bank”). The consolidated financial statements also include the accounts of the Bank’s subsidiaries; Farmers National Insurance, LLC (“Insurance”) and Farmers of Canfield Investment Co. (“Investments”). The Company provides trust and retirement consulting services through its subsidiary, Farmers Trust Company (“Trust”), and insurance services through the Bank’s subsidiary, Insurance. Farmers National Captive, Inc. (“Captive”) is a wholly-owned insurance subsidiary of the Company that provides property and casualty insurance coverage to the Company and its subsidiaries. The Captive pools resources with eleven similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves and to provide insurance where not currently available or economically feasible in today’s insurance market place. The consolidated financial statements include the accounts of the Company, the Bank and its subsidiaries, along with the Trust and Captive. All significant intercompany balances and transactions have been eliminated in the consolidation.

Basis of Presentation:

The unaudited condensed consolidated financial statements have been prepared in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2021 Annual Report to Shareholders included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K”). The interim consolidated financial statements include all adjustments (consisting of only normal recurring items) that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods presented. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year. Certain items included in the prior period financial statements were reclassified to conform to the current period presentation. There was no effect on net income or total stockholders’ equity.

Estimates:

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Segments:

The Company provides a broad range of financial services to individuals and companies in northeastern Ohio and western Pennsylvania. Operations are managed and financial performance is primarily aggregated and reported in two lines of business, the Bank segment and the Trust segment.

Equity:

There are 50,000,000 shares authorized and available for issuance as of September 30, 2022. Outstanding shares at September 30, 2022 were 34,059,657.

Comprehensive Income:

Comprehensive income consists of net income and other comprehensive income. Other comprehensive income consists of unrealized gains and losses on securities available for sale and changes in the funded status of the post-retirement plan, which are recognized as components of stockholders’ equity, net of tax effect.

7

Updates to Significant Accounting Policies:

New Accounting Standard:

On March 31, 2022, FASB issued ASU 2022-02, which eliminates the troubled debt restructuring (“TDR”), accounting model for creditors that have adopted Topic 326, Financial Instruments – Credit Losses. Due to the removal of the TDR accounting model, all loan modifications now will be accounted for under the general loan modification guidance in Subtopic 310-20. In addition, on a prospective basis, entities will be subject to new disclosure requirements covering modifications of receivables to borrowers experiencing financial difficulty. Public business entities within the scope of the Topic 326 vintage disclosure requirements also will be required to prospectively disclose current-period gross write-off information by vintage, or year of origination. For entities that have adopted Topic 326, ASU 2022-02 takes effect in reporting periods beginning after December 15, 2022. Early adoption is permitted. The Company has elected not to early adopt ASU 2022-02 at this time. The adoption of this standard is not expected to have a material effect on the Company’s operating results or financial condition.

Business Combinations:

On March 23, 2022, Farmers entered into an agreement and plan of merger with Emclaire Financial (“Emclaire”), the parent company of The Farmers National Bank of Emlenton (“Emlenton”). The transaction has received Emclaire shareholder approval but is still subject to customary regulatory approvals and is expected to close in the last quarter of 2022. The transaction will create a large expansion for the Company in Pennsylvania and into the Pittsburgh market. Emclaire operates 19 branches in ten counties throughout western Pennsylvania. As of September 30, 2022, Emclaire had total assets of $1.0 billion, gross loans of $810.1 million, deposits of $926.7 million and equity of $71.0 million.

On November 1, 2021, the Company completed the merger with Cortland Bancorp (“Cortland”), the parent company of The Cortland Savings and Banking Company (“Cortland Bank”), pursuant to the Agreement and Plan of Merger, dated as of June 22, 2021, as amended by that certain Amendment to Agreement and Plan of Merger, dated October 12, 2021 (collectively, the “Merger Agreement”), by and among the Company, Cortland, and FMNB Merger Subsidiary IV, LLC, a wholly-owned subsidiary of the Company (“Merger Sub”). Pursuant to the terms of the Merger Agreement, on November 1, 2021, Cortland merged with and into Merger Sub (the “Merger”), with Merger Sub as the surviving entity in the Merger. Promptly following the consummation of the Merger, Merger Sub was dissolved and liquidated and Cortland Bank merged with and into the Bank (the “Bank Merger”), with the Bank as the surviving bank in the Bank Merger. The transaction received the approval of Cortland’s shareholders and all customary regulatory approvals. Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each common share, without par value, of Cortland issued and outstanding immediately prior to the effective time (except for certain Cortland common shares held directly by Cortland or the Company) was converted into the right to receive, without interest, $28.00 per share in cash or 1.75 shares of the Company’s common stock, subject to an overall limitation of 75% of the Cortland shares being exchanged for the Company’s shares and the remaining 25% being exchanged for cash. The Company issued 5.6 million shares of its common stock along with cash of $29.6 million, which represented a transaction value of approximately $128.5 million based on its closing stock price of $17.82 on October 31, 2021, the closing of the Merger.

In accordance with ASC 805, the Company expensed approximately $3.5 million of merger related costs during the nine month period ended September 30, 2022, in addition to $7.1 million expensed for the entire year of 2021. The Company recorded goodwill of $48.5 million as a result of the Cortland combination. Goodwill represents the future economic benefits arising from net assets acquired that are not individually identified and separately recognized and is attributable to synergies, including the reduction of personnel and overlapping contracts, expected to be derived from the Company’s strategy to enhance and expand its presence in northeast Ohio. The merger offers the Company the opportunity to increase profitability by introducing existing products and services to the acquired customer base as well as add new customers in the expanded market area. The goodwill was determined not to be deductible for income tax purposes.

8

The following table summarizes the consideration paid for Cortland and the amounts of the assets acquired and liabilities assumed on the closing date of the acquisition.

(In Thousands of Dollars)
Consideration
Cash	$	29,618
Stock		98,921
Fair value of total consideration transferred	$	128,539
Fair value of assets acquired
Cash and cash equivalents	$	113,391
Securities available for sale		130,574
Other investments		16,092
Loans		482,168
Premises and equipment		12,644
Bank owned life insurance		21,547
Core deposit intangible		5,886
Current and deferred taxes		3,135
Other assets		7,805
Total assets acquired		793,242
Fair value of liabilities assumed
Deposits		695,274
Short-term borrowings		4,246
Long-term borrowings		4,262
Accrued interest payable and other liabilities		9,386
Total liabilities		713,168
Net assets acquired	$	80,074
Goodwill created		48,465
Total net assets acquired	$	128,539

Securities:

The following table summarizes the amortized cost and fair value of the available for sale investment securities portfolio at September 30, 2022 and December 31, 2021 and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive income (loss):

			Gross		Gross
	Amortized		Unrealized		Unrealized
(In Thousands of Dollars)	Cost		Gains		Losses			Fair Value
September 30, 2022
U.S. Treasury and U.S. government sponsored entities	$	149,549	$	0	$	(21,733	)	$	127,816
State and political subdivisions		686,456		100		(137,528	)		549,028
Corporate bonds		4,386		0		(303	)		4,083
Mortgage-backed securities - residential		687,352		56		(126,126	)		561,282
Collateralized mortgage obligations - residential		53,390		0		(4,178	)		49,212
Small Business Administration		4,120		0		(408	)		3,712
Totals	$	1,585,253	$	156	$	(290,276	)	$	1,295,133

9

			Gross		Gross
	Amortized		Unrealized		Unrealized
(In Thousands of Dollars)	Cost		Gains		Losses			Fair Value
December 31, 2021
U.S. Treasury and U.S. government sponsored entities	$	93,137	$	32	$	(2,338	)	$	90,831
State and political subdivisions		636,724		23,296		(1,205	)		658,815
Corporate bonds		4,009		50		(29	)		4,030
Mortgage-backed securities - residential		663,405		1,875		(10,094	)		655,186
Collateralized mortgage obligations - residential		13,303		153		(71	)		13,385
Small Business Administration		5,381		49		0			5,430
Totals	$	1,415,959	$	25,455	$	(13,737	)	$	1,427,677

Proceeds from the sale of portfolio securities were $1.0 million and $2.6 million, respectively, for the three and nine month periods ended September 30, 2022. Gross losses of $5 thousand and $36 thousand, respectively, were realized on these sales for the three and nine month periods ended September 30, 2022. Realized losses on equity securities of $12 thousand and $52 thousand were recognized in the income statement during the three and nine month periods as of September 30, 2022, respectively.

Proceeds from the sale of portfolio securities were $8.2 million and $35.2 million during the three and nine month periods ended September 30, 2021, respectively. Gross gains of $458 thousand and $1.4 million along with gross losses of $1 thousand and $515 thousand were realized on these sales during the three and nine month periods ended September 30, 2021, respectively. Realized gains on equity securities of $5 thousand and $141 thousand were recognized in the income statement during the three and nine month periods as of September 30, 2021, respectively.

The amortized cost and fair value of the debt securities portfolio are shown in the table below by expected maturity. Expected maturities may differ from contractual maturities if issuers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

	September 30, 2022
(In Thousands of Dollars)	Amortized Cost		Fair Value
Maturity
Within one year	$	776	$	770
One to five years		30,842		29,791
Five to ten years		178,232		154,700
Beyond ten years		630,541		495,666
Mortgage-backed, collateralized mortgage obligations and Small Business Administration securities		744,862		614,206
Total	$	1,585,253	$	1,295,133

The following table summarizes the available for sale investment securities with unrealized losses at September 30, 2022 and December 31, 2021, aggregated by major security type and length of time in a continuous unrealized loss position.

	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(In Thousands of Dollars)	Value		Loss			Value		Loss			Value		Loss
September 30, 2022
U.S. Treasury and U.S. government sponsored entities	$	56,522	$	(6,430	)	$	71,294	$	(15,303	)	$	127,816	$	(21,733	)
State and political subdivisions		485,654		(121,150	)		42,427		(16,378	)		528,081		(137,528	)
Corporate bonds		3,292		(145	)		791		(158	)		4,083		(303	)
Mortgage-backed securities - residential		183,962		(32,556	)		375,623		(93,570	)		559,585		(126,126	)
Collateralized mortgage obligations - residential		45,785		(3,715	)		3,427		(463	)		49,212		(4,178	)
Small Business Administration		3,712		(408	)		0		0			3,712		(408	)
Total temporarily impaired	$	778,927	$	(164,404	)	$	493,562	$	(125,872	)	$	1,272,489	$	(290,276	)

10

	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(In Thousands of Dollars)	Value		Loss			Value		Loss			Value		Loss
December 31, 2021
U.S. Treasury and U.S. government sponsored entities	$	81,236	$	(1,960	)	$	8,271	$	(378	)	$	89,507	$	(2,338	)
State and political subdivisions		103,651		(1,020	)		10,020		(185	)		113,671		(1,205	)
Corporate bonds		418		(2	)		715		(27	)		1,133		(29	)
Mortgage-backed securities - residential		525,792		(7,872	)		55,569		(2,222	)		581,361		(10,094	)
Collateralized mortgage obligations - residential		7,270		(71	)		0		0			7,270		(71	)
Total temporarily impaired	$	718,367	$	(10,925	)	$	74,575	$	(2,812	)	$	792,942	$	(13,737	)

Allowance for Credit Losses

Management evaluates securities available for sale for credit losses. During the evaluation process, management considers the extent to which the fair value has been less than cost, the financial condition and near term prospects of the issuer, and the intent and ability of the Company to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value.

If the Company determines that a credit loss exists, the credit portion of the allowance will be measured using a discounted cash flow analysis using the effective interest rate as of the security’s purchase date. As of September 30, 2022, the Company’s security portfolio consisted of 886 securities, 857 of which were in an unrealized loss position. The majority of the unrealized losses on the Company’s securities are related to its holdings of mortgage-backed securities and state and political subdivisions. The Company does not consider its available for sale ("AFS") securities with unrealized losses to be attributable to credit-related factors, as the unrealized losses have occurred as a result of changes in noncredit related factors such as changes in interest rates, market spreads and market conditions subsequent to purchase, not credit deterioration. As of September 30, 2022 the Company has not recorded an allowance for credit losses on AFS securities.

Loans:

Loan balances were as follows:

(In Thousands of Dollars)	September 30, 2022			December 31, 2021
Commercial real estate
Owner occupied	$	331,804		$	340,369
Non-owner occupied		568,277			533,240
Farmland		184,958			177,706
Other		128,403			138,282
Commercial
Commercial and industrial		296,932			313,836
Agricultural		54,123			54,659
Residential real estate
1-4 family residential		474,014			453,635
Home equity lines of credit		132,267			127,433
Consumer
Indirect		197,206			159,006
Direct		17,020			21,121
Other		8,480			9,395
Total loans	$	2,393,484		$	2,328,682
Net deferred loan costs		6,497			2,400
Allowance for credit losses		(27,282	)		(29,386	)
Net loans	$	2,372,699		$	2,301,696

11

Allowance for credit loss activity

The following tables present the activity in the allowance for credit losses by portfolio segment for the three and nine month periods ended September 30, 2022 and 2021:

Three Months Ended September 30, 2022

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	14,859		$	3,893		$	4,915		$	3,787		$	27,454
(Credit) Provision for credit losses		(47	)		260			2			218			433
Loans charged off		0			(473	)		(9	)		(301	)		(783	)
Recoveries		1			2			41			134			178
Total ending allowance balance	$	14,813		$	3,682		$	4,949		$	3,838		$	27,282

Nine Months Ended September 30, 2022

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	15,879		$	4,949		$	4,870		$	3,688		$	29,386
(Credit) Provision for credit losses		(1,068	)		601			53			399			(15	)
Loans charged off		0			(1,878	)		(43	)		(630	)		(2,551	)
Recoveries		2			10			69			381			462
Total ending allowance balance	$	14,813		$	3,682		$	4,949		$	3,838		$	27,282

Three Months Ended September 30, 2021

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	12,290		$	4,600		$	4,130		$	3,786		$	24,806
Adjustment related to reserve for unfunded loan reclass		(245	)		(104	)		(73	)		(15	)		(437	)
(Credit) Provision for credit losses		(454	)		(655	)		75			87			(947	)
Loans charged off		(31	)		(126	)		(55	)		(199	)		(411	)
Recoveries		1			15			41			68			125
Total ending allowance balance	$	11,561		$	3,730		$	4,118		$	3,727		$	23,136

Nine Months Ended September 30, 2021

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	10,824		$	5,073		$	3,643		$	2,604		$	22,144
Adjustment related to reserve for unfunded loan reclass		(245	)		(104	)		(73	)		(15	)		(437	)
Impact of CECL adoption		(2,076	)		429			237			3,860			2,450
(Credit) Provision for credit losses		3,077			(1,668	)		411			(2,292	)		(472	)
Loans charged off		(51	)		(198	)		(221	)		(727	)		(1,197	)
Recoveries		32			198			121			297			648
Total ending allowance balance	$	11,561		$	3,730		$	4,118		$	3,727		$	23,136

12

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

	September 30, 2022				December 31, 2021
(In Thousands of Dollars)	Nonaccrual		Loans Past Due 90 Days or More Still Accruing		Nonaccrual		Loans Past Due 90 Days or More Still Accruing
Commercial real estate
Owner occupied	$	1,049	$	0	$	433	$	0
Non-owner occupied		3,398		0		2,511		0
Farmland		42		0		274		0
Other		39		0		60		0
Commercial
Commercial and industrial		3,392		0		7,190		54
Agricultural		29		0		40		0
Residential real estate
1-4 family residential		2,859		735		3,363		459
Home equity lines of credit		851		25		917		36
Consumer
Indirect		311		41		455		123
Direct		187		18		227		53
Other		0		0		0		0
Total loans	$	12,157	$	819	$	15,470	$	725

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. Note that loans on a modification to defer payments under the CARES Act are included in loans not past due for the period ending December 31, 2021. There were no loans on deferred payments at September 30, 2022.

(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
September 30, 2022
Commercial real estate
Owner occupied	$	0	$	0	$	1,049	$	1,049	$	330,415	$	331,464
Non-owner occupied		28		0		3,398		3,426		564,205		567,631
Farmland		127		41		42		210		184,458		184,668
Other		137		0		39		176		128,009		128,185
Commercial
Commercial and industrial		260		471		3,392		4,123		293,299		297,422
Agricultural		81		59		29		169		54,350		54,519
Residential real estate
1-4 family residential		3,331		767		3,594		7,692		465,795		473,487
Home equity lines of credit		246		71		876		1,193		131,103		132,296
Consumer
Indirect		734		161		352		1,247		203,520		204,767
Direct		97		40		205		342		16,720		17,062
Other		4		4		0		8		8,472		8,480
Total loans	$	5,045	$	1,614	$	12,976	$	19,635	$	2,380,346	$	2,399,981

13

(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
December 31, 2021
Commercial real estate
Owner occupied	$	70	$	591	$	433	$	1,094	$	338,880	$	339,974
Non-owner occupied		394		311		2,511		3,216		529,490		532,706
Farmland		0		0		274		274		177,143		177,417
Other		56		0		60		116		137,878		137,994
Commercial
Commercial and industrial		256		100		7,244		7,600		304,932		312,532
Agricultural		100		28		40		168		54,706		54,874
Residential real estate
1-4 family residential		4,452		1,077		3,822		9,351		443,441		452,792
Home equity lines of credit		80		12		953		1,045		126,405		127,450
Consumer
Indirect		795		275		578		1,648		163,112		164,760
Direct		203		91		280		574		20,614		21,188
Other		0		0		0		0		9,395		9,395
Total loans	$	6,406	$	2,485	$	16,195	$	25,086	$	2,305,996	$	2,331,082

Troubled Debt Restructurings

Total troubled debt restructurings were $3.8 million and $3.9 million at September 30, 2022, and December 31, 2021, respectively. The Company has allocated $108 thousand and $109 thousand of specific reserves to loans whose terms have been modified in troubled debt restructurings at September 30, 2022, and December 31, 2021, respectively. There were no commitments to lend additional amounts to borrowers with loans that were classified as troubled debt restructurings at September 30, 2022, and at December 31, 2021.

During the three and nine month periods ended September 30, 2022 and 2021, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a deferral of principal, interest and/or escrow; a forgiveness of principal and/or interest; or a legal concession. During the three month period ended September 30, 2022, the terms of such loans included a reduction of the stated interest rate of the loans in the range from 1.000% and 3.750% and an extension of maturity date in the range of 5 to 120 months. During the same three month period in 2021, the terms of such loans included a reduction of the stated interest rate of the loan of 0.250% and an extension of the maturity date of 193 months. During the nine month period ended September 30, 2022, the terms of such loans included a reduction of the stated interest rate of the loans in the range from 1.000% and 3.750% and an extension of the maturity date in the range of 5 to 183 months. During the same nine month period in 2021, the terms of such loans included a reduction of the stated interest rate of the loans in the range of 0.250% and 4.075% and extensions of the maturity dates on these and other troubled debt restructurings in the range of 22 days to 361 months.

The following table presents loans by class modified as troubled debt restructurings that occurred during the three and nine month periods ended September 30, 2022 and 2021:

			Pre- Modification		Post- Modification
Three Months Ended September 30, 2022	Number of		Outstanding Recorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Commercial		1	$	15	$	11
Residential real estate
1-4 family residential		4		200		205
Home equity lines of credit		2		19		19
Consumer
Indirect		3		7		7
Direct		2		86		86
Total loans		12	$	327	$	328

14

			Pre- Modification		Post- Modification
Nine Months Ended September 30, 2022	Number of		Outstanding Recorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Commercial real estate
Owner occupied		1	$	140	$	140
Commercial		1		15		11
Residential real estate
1-4 family residential		8		392		402
Home equity lines of credit		3		33		33
Consumer
Indirect		7		41		41
Direct		2		86		86
Total loans		22	$	707	$	713

			Pre- Modification		Post- Modification
Three Months Ended September 30, 2021	Number of		Outstanding Recorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Residential real estate
1-4 family residential		2	$	215	$	233
Home equity lines of credit		1		103		103
Consumer
Indirect		5		30		30
Direct		1		10		10
Total loans		9	$	358	$	376

			Pre- Modification		Post- Modification
Nine Months Ended September 30, 2021	Number of		Outstanding Recorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Commercial		4	$	22	$	22
Residential real estate
1-4 family residential		6		426		414
Home equity lines of credit		5		201		201
Consumer
Indirect		12		121		121
Other		3		16		16
Total loans		30	$	786	$	774

There were $36 thousand in charge offs and a $36 thousand increase to the provision for credit losses during the three and nine month periods ended September 30, 2022, respectively, as a result of the outstanding troubled debt restructurings. There were $15 thousand and $91 thousand in charge offs during the three and nine month periods ended September 30, 2021, respectively. There was a $15 thousand and $90 thousand increase to the provision for credit losses during the three and nine month periods ended September 30, 2021, respectively, as a result of outstanding troubled debt restructurings.

There were three residential real estate loans for which there was a payment default within twelve months following the modification of the troubled debt restructuring during the three and nine month periods ended September 30, 2022. Two of the loans were past due at September 30, 2022. There was no provision recorded as a result of the defaults during 2022. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

15

There were two commercial loans, one residential loan, and one indirect loan for which there was a payment default within twelve months following the modification of the troubled debt restructuring during the three and nine month periods ended September 30, 2021. There was one commercial loan past due at September 30, 2021. There was no provision recorded as a result of the defaults during 2021. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

The Company offered three month deferrals upon request by the borrowers. For those borrowers in industries that were greatly impacted by COVID-19, additional deferrals were considered and granted beyond the initial three month period throughout 2021. The range of deferred months for subsequent requests were three to twelve months. The decline in deferred loans and balances was due to borrowers not requesting additional deferments and most continued to pay under the original terms of their loan. As of September 30, 2022 there are no longer borrowers on deferment due to COVID-19 related issues.

Farmers is also a preferred U.S. Small Business Administration (“SBA”) lender and dedicated significant additional staff and other resources to help our customers complete and submit their applications and supporting documentation for loans offered under the Paycheck Protection Program (“PPP”) under the CARES Act, so they could obtain SBA approval and receive funding as quickly as possible. During the period of the PPP program, the Company facilitated PPP assistance to 2,134 business customers totaling $256.4 million. The Company, on behalf of its customers, began processing borrower applications for PPP forgiveness at the beginning of September 2020. The SBA has up to ninety days to review an application for PPP forgiveness and provide a decision at the end of that review. Once forgiveness of the PPP loan has been communicated and payment is received from the SBA, the Company will record the cash received from the SBA, pay-off the loans based on the amount of forgiveness provided and accelerate the amount of net deferred loan fees/costs recognized for the portion of the PPP loans that are forgiven. As of September 30, 2022, the Company has received life to date payments from the SBA for forgiveness of loans totaling $256.4 million, or approximately 99.99% of the PPP loans originated in 2020. The Company processed $107.9 million in new loans for PPP loan funding during 2021. The Company has also received payments from the SBA for forgiveness of loans totaling $107.3 million, or approximately 99.42%, of the PPP loans originated in 2021.

Credit Quality Indicators

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 establishes a risk rating at origination for all commercial loan and commercial real estate relationships. For relationships over $1 million, management monitors the loans on an ongoing basis for any changes in the borrower’s ability to service their debt. Management also affirms the risk ratings for the loans in their respective portfolios 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 of the institution’s credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

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. Substandard loans 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.

16

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

(In Thousands of Dollars)	Pass		Special Mention		Sub standard		Total
September 30, 2022
Commercial real estate
Owner occupied	$	325,189	$	1,218	$	5,057	$	331,464
Non-owner occupied		527,305		21,273		19,053		567,631
Farmland		182,106		0		2,562		184,668
Other		127,834		0		351		128,185
Commercial
Commercial and industrial		291,988		879		4,555		297,422
Agricultural		53,956		250		313		54,519
Total loans	$	1,508,378	$	23,620	$	31,891	$	1,563,889

(In Thousands of Dollars)	Pass		Special Mention		Sub standard		Total
December 31, 2021
Commercial real estate
Owner occupied	$	330,754	$	5,006	$	4,214	$	339,974
Non-owner occupied		495,170		19,366		18,170		532,706
Farmland		174,580		2,160		677		177,417
Other		137,063		784		147		137,994
Commercial
Commercial and industrial		301,879		1,190		9,463		312,532
Agricultural		54,394		397		83		54,874
Total loans	$	1,493,840	$	28,903	$	32,754	$	1,555,497

The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. For residential, consumer indirect and direct loan classes, the Company evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. In the 1-4 family residential real estate portfolio at September 30, 2022, other real estate owned and foreclosure properties were $0 and $33 thousand, respectively. At December 31, 2021, other real estate owned and foreclosure properties were $0 and $93 thousand, respectively.

The following tables present the recorded investment in residential, consumer indirect and direct auto loans based on payment activity as of September 30, 2022 and December 31, 2021. Nonperforming loans are loans past due 90 days or more and still accruing interest and nonaccrual loans.

	Residential Real Estate				Consumer
(In Thousands of Dollars)	1-4 Family Residential		Home Equity Lines of Credit		Indirect		Direct		Other
September 30, 2022
Performing	$	469,893	$	131,420	$	204,415	$	16,857	$	8,480
Nonperforming		3,594		876		352		205		0
Total loans	$	473,487	$	132,296	$	204,767	$	17,062	$	8,480

	Residential Real Estate				Consumer
(In Thousands of Dollars)	1-4 Family Residential		Home Equity Lines of Credit		Indirect		Direct		Other
December 31, 2021
Performing	$	448,970	$	126,497	$	164,182	$	20,908	$	9,395
Nonperforming		3,822		953		578		280		6
Total loans	$	452,792	$	127,450	$	164,760	$	21,188	$	9,401

17

The following table presents total loans by risk categories and year of origination.

	Term Loans Amortized Cost Basis by Origination Year
													Revolving
As of September 30, 2022	2022		2021		2020		2019		2018		Prior		Loans		Total
Commercial real estate
Risk Rating
Pass	$	140,403	$	171,271	$	131,878	$	150,987	$	103,825	$	264,766	$	17,198	$	980,328
Special mention		0		749		1,877		5,340		2,604		11,413		508		22,491
Substandard		0		0		270		2,447		0		21,077		667		24,461
Total commercial real estate loans	$	140,403	$	172,020	$	134,025	$	158,774	$	106,429	$	297,256	$	18,373	$	1,027,280
Commercial and industrial
Risk Rating
Pass	$	85,050	$	50,425	$	37,834	$	19,152	$	15,502	$	16,006	$	68,019	$	291,988
Special mention		0		333		0		116		0		1		429		879
Substandard		0		1,377		676		124		201		1,492		685		4,555
Total commercial loans	$	85,050	$	52,135	$	38,510	$	19,392	$	15,703	$	17,499	$	69,133	$	297,422
Agricultural
Risk Rating
Pass	$	39,434	$	38,169	$	45,529	$	24,802	$	24,672	$	46,716	$	16,740	$	236,062
Special mention		0		0		0		0		0		0		250		250
Substandard		0		355		236		78		0		2,076		130		2,875
Total agricultural loans	$	39,434	$	38,524	$	45,765	$	24,880	$	24,672	$	48,792	$	17,120	$	239,187
Residential real estate
Risk Rating
Pass	$	69,471	$	111,389	$	77,984	$	33,196	$	23,947	$	144,706	$	3,984	$	464,677
Special mention		0		0		71		121		77		129		0		398
Substandard		0		42		251		125		19		7,975		0		8,412
Total residential real estate loans	$	69,471	$	111,431	$	78,306	$	33,442	$	24,043	$	152,810	$	3,984	$	473,487
Home equity lines of credit
Risk Rating
Pass	$	0	$	0	$	0	$	0	$	17	$	1,532	$	128,345	$	129,894
Special mention		0		0		0		0		0		0		48		48
Substandard		0		13		137		49		64		1,990		101		2,354
Total home equity lines of credit	$	0	$	13	$	137	$	49	$	81	$	3,522	$	128,494	$	132,296
Consumer
Risk Rating
Pass	$	86,710	$	50,580	$	35,022	$	23,530	$	12,791	$	12,744	$	7,987	$	229,364
Substandard		61		138		269		177		84		216		0		945
Total consumer loans	$	86,771	$	50,718	$	35,291	$	23,707	$	12,875	$	12,960	$	7,987	$	230,309

18

Purchased Loans

As a result of the Cortland Merger, the Company acquired $478.2 million in loans, excluding $4.0 million of loans held for sale.

Under ASU Topic 326, when loans are purchased with evidence of more than significant deterioration of credit, they are accounted for as purchase credit deteriorated (“PCD”). PCD loans acquired in a transaction are marked to fair value and a mark on yield is recorded. In addition, an adjustment is made to the ACL for the expected loss on the acquisition date. These loans are assessed on a regular basis and subsequent adjustments to the ACL are recorded on the income statement. During 2021, the Company acquired PCD loans with a fair value of $34.3 million, credit discount of $1.3 million and a noncredit discount of $1.1 million. The outstanding balance at September 30, 2022 and related allowance on these loans is as follows:

	Loan Balance		ACL Balance
Commercial real estate
Owner Occupied	$	1,601	$	17
Non-owner Occupied		19,518		545
Other		254		18
		21,373		580
Commercial
Commercial and industrial		1,655		107
Residential real estate
1-4 family residential		470		3
Total	$	23,498	$	690

Revenue from Contracts with Customers:

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

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Three Months Ended September 30, 2022
Service charges on deposit accounts	$	0	$	1,229	$	1,229
Debit card and EFT fees		0		1,463		1,463
Trust fees		2,370		0		2,370
Insurance agency commissions		0		1,136		1,136
Retirement plan consulting fees		332		0		332
Investment commissions		0		424		424
Other (outside the scope of ASC 606)		0		1,873		1,873
Total noninterest income	$	2,702	$	6,125	$	8,827

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Three Months Ended September 30, 2021
Service charges on deposit accounts	$	0	$	924	$	924
Debit card and EFT fees		0		1,227		1,227
Trust fees		2,335		0		2,335
Insurance agency commissions		0		799		799
Retirement plan consulting fees		334		0		334
Investment commissions		0		638		638
Other (outside the scope of ASC 606)		0		2,758		2,758
Total noninterest income	$	2,669	$	6,346	$	9,015

19

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Nine Months Ended September 30, 2022
Service charges on deposit accounts	$	0	$	3,513	$	3,513
Debit card and EFT fees		0		4,407		4,407
Trust fees		7,265		0		7,265
Insurance agency commissions		0		3,269		3,269
Retirement plan consulting fees		1,052		0		1,052
Investment commissions		0		1,675		1,675
Other (outside the scope of ASC 606)		8,375		6,446		14,821
Total noninterest income	$	16,692	$	19,310	$	36,002

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Nine Months Ended September 30, 2021
Service charges on deposit accounts	$	0	$	2,522	$	2,522
Debit card and EFT fees		0		3,720		3,720
Trust fees		6,930		0		6,930
Insurance agency commissions		0		2,750		2,750
Retirement plan consulting fees		1,043		0		1,043
Investment commissions		0		1,665		1,665
Other (outside the scope of ASC 606)		0		10,025		10,025
Total noninterest income	$	7,973	$	20,682	$	28,655

A description of the Company’s revenue streams under ASC 606 follows:

Service charges on deposit accounts – The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Management reviewed the deposit account agreements, and determined that the agreements can be terminated at any time by either the Bank or the account holder. Transaction fees, such as balance transfers, wires and overdraft charges are settled the day the performance obligation is satisfied. The Bank’s monthly service charges and maintenance fees are for services provided to the customer on a monthly basis and are considered a series of services that have the same pattern of transfer each month. The review of service charges assessed on deposit accounts included the amount of variable consideration that is a part of the monthly charges. It was found that the waiver of service charges due to insufficient funds and dormant account fees is immaterial and would not require a change in the accounting treatment for these fees under the new revenue standards.

Debit Card Interchange Fees – Customers and the Bank have an account agreement and maintain deposit balances with the Bank. Customers use a bank issued debit card to purchase goods and services, and the Bank earns interchange fees on those transactions, typically a percentage of the sale amount of the transaction. The Bank records the amount due when it receives the settlement from the payment network. Payments from the payment network are received and recorded into income on a daily basis. There are no contingent debit card interchange fees recorded by the Company that could be subject to a clawback in future periods.

Trust fees – Services provided to Trust customers are a series of distinct services that have the same pattern of transfer each month. Fees for trust accounts are billed and drafted from trust accounts monthly. The Company records these fees on the income statement on a monthly basis. Fees are assessed based on the total investable assets of the customer’s trust account. A signed contract between the Company and the customer is maintained for all customer trust accounts with payment terms identified. It is probable that the fees will be collectible as funds being managed are accessible by the asset manager. Past history of trust fee income recorded by the Company indicates that it is highly unlikely that a significant reversal could occur. There are no contingent incentive fees recorded by the Company that could be subject to a clawback in future periods.

Insurance Agency Commissions – Insurance agency commissions are received from insurance carriers for the agency’s share of commissions from customer premium payments. These commissions are recorded into income when checks are received from the insurance carriers, and there is no contingent portion associated with these commission checks. There may be a short time-lag in recording revenue when cash is received instead of recording the revenue when the policy is signed by the customer, but the time lag is insignificant and does not impact the revenue recognition process.

20

Insurance also receives incentive checks from the insurance carriers for achieving specified levels of production with particular carriers. These amounts are recorded into income when a check is received, and there are no contingent amounts associated with these payments that may be clawed back by the carrier in the future. Similar to the monthly commissions explained in the preceding paragraph, there may be a short time-lag in recording incentive revenue on a cash basis as opposed to estimating the amount of incentive revenue expected to be earned, this does not materially impact the recognition of Insurance revenue. If there were any amounts that would need to be refunded for one specific Insurance customer, management believes the reversal would not be significant.

Other potential situations surrounding the recognition of Insurance revenue include the estimating potential refunds due to the likely cancellation of a percentage of customers cancelling their policies and recording revenue at the time of policy renewals. Management concluded that since Insurance agency commissions represent only 2.3% of the Company’s total revenue, adjusting the current practice of recording insurance revenue for these situations would not have a material impact on the reporting of total revenue.

Retirement Plan Consulting Fees – Revenue is recognized based on the level of work performed for the client. Any payments that are received for work to be performed in the future are recorded in a deferred revenue account, and recorded into income when the fees are earned. Retirement plan consulting fees represent only 0.8% of the Company’s total revenue, and therefore management has concluded that any adjustment of revenue for one particular customer for a refund or any other reason would be insignificant and would not materially impact the Company’s total revenue.

Investment Commissions – Investment commissions are earned through the sales of non-deposit investment products to customers of the Company. The sales are conducted through a third-party broker-dealer. When the commissions are received and recorded into income on the Bank’s income statement, there is no contingent portion that may need to be refunded back to the third party broker dealer. Investment commissions represent only 1.2% of the Company’s total revenue, and therefore management has concluded that any adjustment of revenue for a particular customer for a refund or any other reason would be insignificant and would not materially impact the Company’s total revenue.

Other – Income items included in “Other” are Bank owned life insurance income, security gains, net gains on the sale of loans and other operating income. There is also a one-time legal settlement of $8.4 million for the nine month period ended September 30, 2022. Any amounts within the scope of ASC 606 are deemed immaterial.

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 reporting entity’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 the fair value of each type of financial instrument:

Investment Securities: The Company uses a third party service to estimate fair value on available for sale securities on a monthly basis. The Company’s service provider is considered a leading evaluation pricing service for U.S. domestic fixed income securities and values securities using exit pricing requirements. They subscribe to multiple third-party pricing vendors, and supplement that information with matrix pricing methods. The fair values for investment securities, which consist of equity securities that are recorded at fair market value to comply with exit pricing, are determined by quoted market prices in active markets, if available (Level 1). The equity securities change in fair market value is recorded in the income statements. For securities where quoted prices are not available, fair values are calculated based on quoted prices for similar assets in active markets, quoted prices for similar assets in markets that are not active or inputs other than quoted prices, which provide a reasonable basis for fair value determination. Such inputs may include interest rates and yield curves, volatilities, prepayment speeds, credit risks and default rates. Inputs used are derived principally from observable market data (Level 2). 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). The fair values of Level 3 investment securities are determined by using unobservable inputs to measure fair value of assets for which there is little, if any, market activity at the measurement date, using reasonable inputs and assumptions based on the best information at the time, to the extent that inputs are available without undue cost and effort. For the period ended September 30, 2022 and for the year ended December 31, 2021, the fair value of Level 3 investment securities was immaterial.

21

Derivative Instruments: The fair values of derivative instruments are based on valuation models using observable market data as of the measurement date (Level 2).

Collateral Dependent Loans: Fair value estimates of collateral dependent loans that are individually reviewed are based on the fair value of the collateral, less estimated costs to sell. Non-collateral dependent loans are valued based on discounted cash flows. Loans carried at fair value generally receive specific allocations of the allowance for credit losses in the current period and allowance for loan losses in prior periods. For collateral dependent loans, fair value is commonly 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. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result 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. These loans are evaluated on a quarterly basis and adjusted accordingly.

Other Real Estate Owned: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair values are commonly based on recent real estate appraisals. These appraisals may use a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers (for commercial and commercial real estate properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the Appraisal Department reviews 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. On an annual basis, the Company compares the actual selling price of collateral that has been sold to the most recent appraised value to determine what adjustments should be made to appraisals to arrive at fair value.

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

			Fair Value Measurements at September 30, 2022 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government sponsored entities	$	127,816	$	0	$	127,816	$	0
State and political subdivisions		549,028		0		549,028		0
Corporate bonds		4,083		0		4,083		0
Mortgage-backed securities-residential		561,282		0		561,280		2
Collateralized mortgage obligations		49,212		0		49,212		0
Small Business Administration		3,712		0		3,712		0
Equity securities
Equity securities at fair value		181		181		0		0
Other investments measured at net asset value		14,581	n/a		n/a		n/a
Total investment securities	$	1,309,895	$	181	$	1,295,131	$	2
Interest rate swaps	$	5,805	$	0	$	5,805	$	0
Financial Liabilities
Interest rate swaps	$	5,805	$	0	$	5,805	$	0
Mortgage banking derivative - liability	$	203	$	0	$	203	$	0

22

			Fair Value Measurements at December 31, 2021 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government sponsored entities	$	90,831	$	0	$	90,831	$	0
State and political subdivisions		658,815		0		658,815		0
Corporate bonds		4,030		0		4,030		0
Mortgage-backed securities-residential		655,186		0		655,183		3
Collateralized mortgage obligations		13,385		0		13,385		0
Small Business Administration		5,430		0		5,430		0
Equity securities
Equity securities at fair value		228		228		0		0
Other investments measured at net asset value		14,721	n/a		n/a		n/a
Total investment securities	$	1,442,626	$	228	$	1,427,674	$	3
Interest rate swaps	$	4,261	$	0	$	4,261	$	0
Financial Liabilities
Interest rate swaps	$	4,261	$	0	$	4,261	$	0

There were no significant transfers between Level 1 and Level 2 during the three and nine month periods ended September 30, 2022 and 2021.

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Investment Securities Available-for-sale (Level 3)
	Three Months ended September 30,				Nine Months ended September 30,
(In Thousands of Dollars)	2022		2021		2022			2021
Beginning Balance	$	2	$	3	$	3		$	4
Transfers from level 2		0		0		0			0
Repayments, calls and maturities		0		0		(1	)		(1	)
Ending Balance	$	2	$	3	$	2		$	3

Assets measured at fair value on a non-recurring basis are summarized below:

			Fair Value Measurements at September 30, 2022 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Individually evaluated loans
Commercial real estate
Non-owner occupied	$	906	$	0	$	0	$	906
1–4 family residential		56		0		0		56

23

			Fair Value Measurements at December 31, 2021 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Individually Evaluated loans
Commercial	$	1,654	$	0	$	0	$	1,654
1–4 family residential		82		0		0		82

Collateral dependent loans were individually evaluated under ASC 326 for the periods ending September 30, 2022 and December 31, 2021. Collateral dependent loans had a principal balance of $1.2 million with a valuation allowance of $214 thousand at September 30, 2022. Collateral dependent loans had a principal balance of $3.2 million with a valuation allowance of $1.5 million at December 31, 2021. Excluded from the above tables at September 30, 2022 and December 31, 2021, are $846 thousand and $792 thousand of loans classified as troubled debt restructurings and measured using the present value of cash flows, which is not considered an exit price.

Collateral dependent commercial real estate loans, both owner-occupied and non-owner occupied are valued by independent external appraisals. These external appraisals are prepared using the sales comparison approach and income approach valuation techniques. Management makes subsequent unobservable adjustments to the collateral dependent loan appraisals. Collateral dependent loans other than commercial real estate and other real estate owned are not considered material.

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the periods ended September 30, 2022 and December 31, 2021:

September 30, 2022	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually evaluated loans
Commercial real estate	$	906	Sales Comparison	Adjustment for differences between comparable sales	(6.13%) - 17.37% .20%
Residential		56	Sales comparison	Adjustment for differences between comparable sales	(13.77%) - (5.68%) (13.77%)

December 31, 2021	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually evaluated loans
Commercial	$	1,654	Sales comparison	Adjustment for differences between comparable sales	(40.24%) - 56.83% (12.43%)
Residential		82	Sales comparison	Adjustment for differences between comparable sales	(3.84%) - 3.22% (0.12%)

24

The carrying amounts and estimated fair values of financial instruments not previously disclosed at September 30, 2022 and December 31, 2021 are as follows:

			Fair Value Measurements at September 30, 2022 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	79,981	$	20,814	$	59,167	$	0	$	79,981
Regulatory stock		19,637	n/a		n/a		n/a		n/a
Loans held for sale		2,142		0		2,142		0		2,142
Loans, net		2,372,699		0		0		2,309,191		2,309,191
Financial liabilities
Deposits		3,567,151		3,187,580		362,980		0		3,550,560
Short-term borrowings		155,000		0		155,000		0		155,000
Long-term borrowings		88,098		0		73,109		0		73,109

			Fair Value Measurements at December 31, 2021 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	112,790	$	29,150	$	83,640	$	0	$	112,790
Regulatory stock		15,510	n/a		n/a		n/a		n/a
Loans held for sale		4,545		0		4,681		0		4,681
Loans, net		2,301,696		0		0		2,285,554		2,285,554
Financial liabilities
Deposits		3,547,235		3,158,967		384,263		0		3,543,230
Long-term borrowings		87,758		0		92,433		0		92,433

The methods and assumptions used to estimate fair value, not previously described, are described as follows:

Cash and Cash Equivalents: The carrying amounts of cash and other non-interest bearing short-term instruments approximate fair values and are classified as Level 1. Federal funds sold and other interest bearing cash deposits are classified as Level 2.

Regulatory Stock: It is not practical to determine the fair value of regulatory stock due to restrictions placed on its transferability.

Loans: Fair values of loans, excluding loans held for sale, are estimated as follows: The Company uses a third party firm that uses cash flow analysis and current market interest rates along with adjustments for credit, liquidity and option risk to conform to the ASU 2016-01 exit price requirement. Loans in the tables above consist of impaired credits held for investment. Fair value for collateral dependent loans is based upon appraised values adjusted for trends observed in the market, less estimated cost to sell. The cash flow method is used for estimating fair value for noncollateral dependent loans. A valuation allowance was recorded for the excess of the loan’s recorded investment over the amounts determined by the collateral value method. This valuation is a component of the allowance for credit losses. The Company considers these fair values Level 3.

Loans held for sale: The fair value of loans held for sale is estimated based upon binding contracts and quotes from third party investors resulting in a Level 2 classification.

Deposits: The fair values disclosed for demand deposits – interest and non-interest checking, passbook savings, and money market accounts – are, by definition, equal to the amount payable on demand at the reporting date resulting in a Level 1 classification. The carrying amounts of variable rate certificates of deposit approximate their fair values at the reporting date resulting in a Level 2 classification. Fair value for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

Short-term Borrowings: The carrying amounts of federal funds purchased, borrowings under repurchase agreements, and other short-term borrowings, generally maturing within ninety days, approximate their fair values resulting in a Level 2 classification.

Long-term Borrowings: The fair values of the Company’s long-term borrowings are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

25

Off-balance Sheet Instruments: The fair value of commitments is not considered material.

Goodwill and Intangible Assets:

Goodwill associated with the Company’s acquisition of Cortland and other acquisitions totaled $94.6 million at September 30, 2022 and $94.2 million at December 31, 2021. Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value, which is determined through an impairment test. Management performs goodwill impairment testing on an annual basis as of September 30. The fair value of the reporting units is determined using a combination of a discounted cash flow method and a guideline public company method. The current year impairment testing is in progress. Results of the assessment as of September 30, 2021, indicated no goodwill impairment. The Company will continue to monitor its goodwill for possible impairment.

Acquired Intangible Assets

Acquired intangible assets were as follows:

	September 30, 2022					December 31, 2021
(In Thousands of Dollars)	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer relationship intangibles	$	7,210	$	(6,755	)	$	7,210	$	(6,641	)
Non-compete contracts		457		(398	)		430		(392	)
Trade name		1,126		(391	)		520		(356	)
Core deposit intangible		12,866		(6,387	)		12,866		(5,271	)
Total	$	21,659	$	(13,931	)	$	21,026	$	(12,660	)

Aggregate amortization expense was $432 thousand and $1.3 million for the three and nine month periods ended September 30, 2022. Amortization expense was $316 thousand and $948 thousand for the three and nine month periods ended September 30, 2021.

Estimated amortization expense for each of the next five periods and thereafter:

2022 (3 months)	$	424
2023		1,247
2024		943
2025		878
2026		781
Thereafter		3,455
Total	$	7,728

Leases:

The Company has operating leases for branch office locations, vehicles and certain office equipment such as printers, copiers and faxes. The leases have remaining lease terms of up to 17.6 years, some of which include options to extend the lease for up to 15 years and some of which include options to terminate the lease in 7 months.

The right of use asset and lease liability were $8.5 million and $8.8 million as of September 30, 2022 and $6.4 million and $6.6 million at December 31, 2021.

Lease payments made for the three and nine month periods ended September 30, 2022, were $252 thousand and $706 thousand, while lease payments made for the three and nine month periods ended September 30, 2021, were $206 thousand and $610 thousand, respectively. Interest expense and amortization expense on finance leases for the three month period ended September 30, 2022, was $51 thousand and $202 thousand, and $127 thousand and $534 thousand for the nine month period ended September 30, 2022. Interest expense and amortization expense on finance leases for the three month period ended September 30, 2021, was $44 thousand and $124 thousand, and $116 thousand and $366 thousand for the nine month period ended September 30, 2021. The average remaining lease term for all leases was 6.83 years as of September 30, 2022 and the weighted-average discount rate was 2.81%.

26

Maturities of lease liabilities are as follows as of September 30, 2022:

2022 (3 months)	$	264
2023		1,060
2024		892
2025		851
2026		817
Thereafter		6,659
Total Payments		10,543
Less: Imputed Interest		(1,766	)
Total	$	8,777

Derivative Financial Instruments:

Interest Rate Swaps

The Company maintains an interest rate protection program for commercial loan customers. Under this program, the Company provides a variable rate loan while creating a fixed rate loan for the customer by the customer entering into an interest rate swap with terms that match the loan. The Company offsets its risk exposure by entering into an offsetting interest rate swap with an unaffiliated institution. The Company had interest rate swaps associated with commercial loans with a notional value of $72.9 million and fair value of $5.8 million in other assets and $5.8 million in other liabilities at September 30, 2022. At December 31, 2021 the Company had interest rate swaps associated with commercial loans with and a notional value of $86.1 million and fair value of $4.0 million in other assets and $4.0 million in other liabilities. The interest rate swaps with both the customers and third parties are not designated as hedges under FASB ASC 815 and are not marked to market through earnings. As the interest rate swaps are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by FASB ASC 820.

There were no net gains or losses for interest rate swaps for the three and nine month periods ended September 30, 2022 and 2021.

Mortgage Banking Derivatives

Commitments to fund certain mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of mortgage loans to third-party investors are considered derivatives. Effective May 2022, the Company began the practice of entering into forward commitments for the future delivery of residential mortgage loans when the interest rate lock commitments are entered into in order to economically hedge the effect of changes in interest rates resulting from its commitments to fund the loans. These mortgage banking derivatives are not designated as hedge instruments. The Company had approximately $11.6 million of interest rate lock commitments at September 30, 2022 and $25.7 million of interest rate lock commitments at December 31, 2021. There were $8.0 million of forward sales of mortgage backed securities and $600 thousand of forward commitments for the future delivery of residential mortgage loans at September 30, 2022.

The net gains and losses on derivative instruments not designated as hedging instruments are included in mortgage banking income. For the three and nine month periods ended September 30, 2022, losses of $283 thousand and $535 thousand, respectively, were included in mortgage banking income for the interest rate lock commitments. Gains of $363 thousand and $386 thousand respectively, were included in mortgage banking income for both the three and nine month periods ended September 30, 2022 for the forward sales of mortgage backed securities.

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Earnings Per Share:

The computation of basic and diluted earnings per share is shown in the following table:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Basic EPS
Net income (In thousands of dollars)	$	15,446	$	16,011	$	47,241	$	46,142
Weighted average shares outstanding		33,851,596		28,246,206		33,840,958		28,235,732
Basic earnings per share	$	0.46	$	0.57	$	1.40	$	1.63
Diluted EPS
Net income (In thousands of dollars)	$	15,446	$	16,011	$	47,241	$	46,142
Weighted average shares outstanding for basic earnings per share		33,851,596		28,246,206		33,840,958		28,235,732
Dilutive effect of restricted stock awards		80,286		114,355		84,473		102,813
Weighted average shares for diluted earnings per share		33,931,882		28,360,561		33,925,431		28,338,545
Diluted earnings per share	$	0.46	$	0.56	$	1.39	$	1.63

There were 124,492 and 188,992 restricted stock awards that were considered anti-dilutive for the three and nine month periods ended September 30, 2022, respectively. There were 17,495 and 91,247 restricted stock awards that were considered anti-dilutive for the three and nine month periods ended September 30, 2021, respectively.

Stock Based Compensation:

In April of 2022, the Company, with the approval of shareholders, created the 2022 Equity Incentive Plan (the “2022 Plan”). The 2022 Plan permits the award of up to one million shares to the Company’s directors and employees to attract and retain exceptional personnel, motivate performance and, most importantly, to help align the interests of the Company’s executives with those of the Company’s shareholders. The 2022 Plan has replaced the 2017 Plan. There were 56,500 service time based share awards granted under the 2022 Plan, and 75,768 service time based share awards and 56,724 performance based share awards granted under the 2017 Plan during the nine month period ended September 30, 2022, as shown in the table below. The actual number of performance based shares issued will depend on the relative performance of the Company’s average return on equity compared to a group of peer companies over a three year vesting period, ending December 31, 2024. As of September 30, 2022, 943,500 shares are still available to be awarded from the 2022 Plan. The 2017 Plan has been sunset.

The restricted stock awards were granted with a fair value price equal to the market price of the Company’s common stock at the date of the grant. Expense recognized was $513 thousand and $1.3 million for the three and nine month periods ended September 30, 2022, respectively. During the prior periods, the expense recognized was $278 thousand and $865 thousand for the three and nine month periods ended September 30, 2021, respectively. As of September 30, 2022, there was $3.6 million of total unrecognized compensation expense related to the nonvested shares granted under the Plan. The remaining cost is expected to be recognized over 2.4 years.

The following is the activity under the Plans during the nine month period ended September 30, 2022.

	Maximum Awarded Service Units			Weighted Average Grant Date Fair Value		Maximum Awarded Performance Units			Weighted Average Grant Date Fair Value
Beginning balance - non-vested shares		99,564		$	16.13		158,988		$	14.40
Granted		132,268			16.63		56,724			17.25
Vested		(20,771	)		16.81		(65,481	)		17.48
Forfeited		(3,000	)		13.68		(12,862	)		14.74
Ending balance - non-vested shares		208,061		$	16.72		137,369		$	15.85

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The following is the activity under the Plans during the nine month period ended September 30, 2021.

	Maximum Awarded Service Units			Weighted Average Grant Date Fair Value		Maximum Awarded Performance Units			Weighted Average Grant Date Fair Value
Beginning balance - non-vested shares		67,765		$	14.32		153,070		$	14.46
Granted		38,061			15.45		58,245			14.21
Vested		(26,621	)		14.41		(52,327	)		14.34
Forfeited		(4,758	)		14.15		0			0
Ending balance - non-vested shares		74,447		$	14.94		158,988		$	14.40

The 86,252 shares that vested during the nine month period ended September 30, 2022 had a weighted average fair value of $17.32 per share.

Other Comprehensive Income (Loss):

The following tables represent the details of other comprehensive loss for the three and nine month periods ended September 30, 2022 and 2021.

	Three Months Ended September 30, 2022
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during the period	$	(83,980	)	$	17,636		$	(66,344	)
Reclassification adjustment for losses included in net income (1)		5			(1	)		4
Net unrealized losses on available-for-sale securities	$	(83,975	)	$	17,635		$	(66,340	)
Change in funded status of post-retirement health plan		(2	)		0			(2	)
Net other comprehensive (loss)	$	(83,977	)	$	17,635		$	(66,342	)
	Three Months Ended September 30, 2021
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during the period	$	(2,754	)	$	578		$	(2,176	)
Reclassification adjustment for gains included in net income (1)		(464	)		96			(368	)
Net other comprehensive (loss)	$	(3,218	)	$	674		$	(2,544	)
	Nine Months Ended September 30, 2022
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during the period	$	(301,874	)	$	63,394		$	(238,480	)
Reclassification adjustment for losses included in net income (1)		36			(8	)		28
Net unrealized losses on available-for-sale securities	$	(301,838	)	$	63,386		$	(238,452	)
Change in funded status of post-retirement health plan		(6	)		1			(5	)
Net other comprehensive (loss)	$	(301,844	)	$	63,387		$	(238,457	)
	Nine Months Ended September 30, 2021
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding (losses) on available-for-sale securities during the period	$	(8,990	)	$	1,888		$	(7,102	)
Reclassification adjustment for gains included in net income (1)		(848	)		178			(670	)
Net other comprehensive (loss)	$	(9,838	)	$	2,066		$	(7,772	)

(1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in security gains and the tax impact is included in income tax expense on the consolidated statements of income.

Regulatory Capital Matters:

Banks and bank holding companies are subject to various regulatory capital requirements administered by the federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action by regulators that, if undertaken, could have a direct material effect on the financial statements. Management believes that as of September 30, 2022, the Company and the Bank meet all capital adequacy requirements to which they are subject.

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The FDIC and other federal banking regulators revised the risk-based capital requirements applicable to financial holding companies and insured depository institutions, including the Company and the Bank, to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision (“Basel III”).

The common equity tier 1 capital, tier 1 capital and total capital ratios are calculated by dividing the respective capital amounts by risk-weighted assets. The leverage ratio is calculated by dividing tier 1 capital by adjusted average total assets.

Basel III limits capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” consisting of 2.5% of common equity tier 1 capital, tier 1 capital and total capital to risk-weighted assets in addition to the amount necessary to meet minimum risk-based capital requirements. Excluding the additional buffer, Basel III requires the Company and the Bank to maintain (i) a minimum ratio of common equity tier 1 capital to risk-weighted assets of at least 4.5%, (ii) a minimum ratio of tier 1 capital to risk-weighted assets of at least 6.0%, (iii) a minimum ratio of total capital to risk-weighted assets of at least 8.0% and (iv) a minimum leverage ratio of at least 4.0%.

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 only adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At September 30, 2022 and December 31, 2021, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.

Actual and required capital amounts and ratios, which do not include the capital conservation buffer, are presented below at September 30, 2022 and December 31, 2021:

	Actual					Requirement For Capital Adequacy Purposes:					To be Well Capitalized Under Prompt Corrective Action Provisions:
	Amount		Ratio			Amount		Ratio			Amount		Ratio
September 30, 2022
Common equity tier 1 capital ratio
Consolidated	$	394,738		13.36	%	$	132,921		4.5	%	N/A		N/A
Bank		358,723		12.18	%		132,490		4.5	%		191,374		6.5	%
Total risk based capital ratio
Consolidated		515,020		17.44	%		236,303		8.0	%	N/A		N/A
Bank		386,005		13.11	%		235,537		8.0	%		294,421		10.0	%
Tier 1 risk based capital ratio
Consolidated		412,738		13.97	%		177,228		6.0	%	N/A		N/A
Bank		358,723		12.18	%		176,653		6.0	%		235,537		8.0	%
Tier 1 leverage ratio
Consolidated		412,738		10.24	%		161,179		4.0	%	N/A		N/A
Bank		358,723		8.44	%		169,940		4.0	%		212,425		5.0	%
December 31, 2021
Common equity tier 1 capital ratio
Consolidated	$	362,950		13.16	%	$	124,066		4.5	%	N/A		N/A
Bank		345,065		12.55	%		123,712		4.5	%	$	178,695		6.5	%
Total risk based capital ratio
Consolidated		485,336		17.60	%		220,562		8.0	%	N/A		N/A
Bank		374,451		13.62	%		219,933		8.0	%		274,916		10.0	%
Tier 1 risk based capital ratio
Consolidated		380,950		13.82	%		165,422		6.0	%	N/A		N/A
Bank		345,065		12.55	%		164,950		6.0	%		219,933		8.0	%
Tier 1 leverage ratio
Consolidated		380,950		10.12	%		150,629		4.0	%	N/A		N/A
Bank		345,065		9.19	%		150,217		4.0	%		187,772		5.0	%

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Segment Information:

The reportable segments are determined by the products and services offered, primarily distinguished between banking and trust. These segments are also distinguished by the level of information provided to the chief operating decision makers in the Company, who use such information to review performance of various components of the business, which are then aggregated. Loans, investments, and deposits provide the revenues in the banking operation. All operations are domestic. Significant segment totals are reconciled to the financial statements as follows:

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
September 30, 2022
Goodwill and other intangibles	$	5,758	$	100,873	$	(4,263	)	$	102,368
Total assets	$	13,338	$	4,100,421	$	6,263		$	4,120,022

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
December 31, 2021
Goodwill and other intangibles	$	5,814	$	101,055	$	(4,263	)	$	102,606
Total assets	$	14,365	$	4,124,530	$	3,854		$	4,142,749

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
For Three Months Ended September 30, 2022
Net interest income	$	54	$	32,602	$	(875	)	$	31,781
Provision for credit losses and unfunded loans		0		448		0			448
Service fees, security gains and other noninterest income		2,731		6,248		(152	)		8,827
Noninterest expense		1,666		17,942		657			20,265
Amortization and depreciation expense		27		994		113			1,134
Income before taxes		1,092		19,466		(1,797	)		18,761
Income taxes		229		3,438		(352	)		3,315
Net income	$	863	$	16,028	$	(1,445	)	$	15,446

(In Thousands of Dollars)	Trust Segment		Bank Segment			Eliminations and Others			Consolidated Totals
For Three Months Ended September 30, 2021
Net interest income	$	31	$	26,798		$	(295	)	$	26,534
Provision for credit losses and unfunded loans		0		(948	)		0			(948	)
Service fees, security gains and other noninterest income		2,707		6,385			(77	)		9,015
Noninterest expense		1,726		14,586			(12	)		16,300
Amortization and depreciation expense		67		653			108			828
Income before taxes		945		18,892			(468	)		19,369
Income taxes		198		3,310			(150	)		3,358
Net income	$	747	$	15,582		$	(318	)	$	16,011

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
For Nine Months Ended September 30, 2022
Net interest income	$	126	$	97,081	$	(2,473	)	$	94,734
Provision for credit losses and unfunded loans		0		706		0			706
Service fees, security gains and other noninterest income		16,768		19,595		(361	)		36,002
Noninterest expense		7,049		61,558		1,234			69,841
Amortization and depreciation expense		83		3,052		340			3,475
Income before taxes		9,762		51,360		(4,408	)		56,714
Income taxes		2,049		8,438		(1,014	)		9,473
Net income	$	7,713	$	42,922	$	(3,394	)	$	47,241

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(In Thousands of Dollars)	Trust Segment		Bank Segment			Eliminations and Others			Consolidated Totals
For Nine Months Ended September 30, 2021
Net interest income	$	94	$	78,597		$	(400	)	$	78,291
Provision for credit losses and unfunded loans		0		(473	)		0			(473	)
Service fees, security gains and other noninterest income		8,108		20,675			(128	)		28,655
Noninterest expense		4,818		44,676			(409	)		49,085
Amortization and depreciation expense		194		1,992			244			2,430
Income before taxes		3,190		53,077			(363	)		55,904
Income taxes		669		9,379			(286	)		9,762
Net income	$	2,521	$	43,698		$	(77	)	$	46,142

The Bank segment includes Farmers National Insurance and Farmers of Canfield Investment Co.

Short-term borrowings:

The Bank had short-term advances from the Federal Home Loan Bank ("FHLB") at September 30, 2022 of $155 million. The interest rate on these borrowings was 3.02% at September 30, 2022. The Bank had no short-term advances from the FHLB at December 31, 2021.

The Bank has access to lines of credit amounting to $35 million at two major domestic banks that are below prime rate. The lines and terms are periodically reviewed by the lending banks and are generally subject to withdrawal at their discretion. There were no borrowings under these lines at September 30, 2022 or at December 31, 2021.

Farmers has two unsecured revolving lines of credit for $6.5 million. These lines can be renewed annually. The lines have interest rates of prime with floors of 3.5% and 4.5%. There were no outstanding balances on either of these two lines at September 30, 2022 or at December 31, 2021.

Long-term borrowings:

There were no long-term advances from the FHLB at September 30, 2022 or at December 31, 2021.

The Bank’s long-term and short-term FHLB advances are secured by a blanket pledge of residential mortgage, commercial real estate, and multi-family loans totaling $1.3 billion and $1.2 billion at September 30, 2022 and December 31, 2021, respectively. Based on this collateral, the Bank is eligible to borrow an additional $550.8 million at September 30, 2022.

In November 2021, the Company completed the issuance of $75.0 million aggregate principal amount, fixed-to-floating rate subordinated notes due December 15, 2031, in a private offering exempt from the registration requirements under the Securities Act of 1933, as amended. The notes carry a fixed rate of 3.125% for five years at which time they will convert to a floating rate based on the three-month term secured overnight funding rate, plus a spread of 220 basis points. The Company may, at its option, beginning December 15, 2026, redeem the notes, in whole or in part, from time to time, subject to certain conditions. The net proceeds from the sale were approximately $73.8 million, after deducting the offering expenses. The Company’s intent was to use the proceeds from the sale for general corporate purposes, which may include, without limitation, providing capital to support its growth organically or through acquisitions, in financing investments, capital expenditures, repurchasing its common shares and for investments in the Bank as regulatory capital. The subordinated debentures are included in Total Capital under current regulatory guidelines and interpretations.

On November 1, 2021, the Company completed its acquisition of Cortland, which included the assumption of Floating Rate Junior Subordinated Debt Securities due in September 15, 2037 (the "junior subordinated debt securities") at an acquisition-date fair value of $4.3 million, held in a wholly-owned statutory trust whose common securities were wholly-owned by Cortland. The sole assets of the statutory trust are the junior subordinated debt securities and related payments. The junior subordinated debt securities and the back-up obligations, in the aggregate, constitute a full and unconditional guarantee of the obligations of the statutory trust under the capital securities held by third-party investors. The securities bear interest at a rate of 1.45% over the 3-month LIBOR rate. The rate at September 30, 2022 was 4.74% and at December 31, 2021 was 1.65%.

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On January 7, 2020, the Company completed its acquisition of Maple Leaf, which included the assumption of Floating Rate Junior Subordinated Debt Securities due December 15, 2036 (the "junior subordinated debt securities") held in a wholly-owned statutory trust whose common securities were wholly-owned by Maple Leaf. The sole assets of the statutory trust are the junior subordinated debt securities and related payments. The junior subordinated debt securities and the back-up obligations, in the aggregate, constitute a full and unconditional guarantee of the obligations of the statutory trust under the capital securities held by third-party investors. The securities bear interest at a rate of 1.80% over the 3-month LIBOR rate. The rate at September 30, 2022 was 5.09% and at December 31, 2021 was 1.90%.

In 2015, the Company completed its acquisition of National Bancshares Corporation (“NBOH”), which included the assumption of Floating Rate Junior Subordinated Debt Securities due June 15, 2035 (the "junior subordinated debt securities") held in a wholly-owned statutory trust whose common securities were wholly-owned by NBOH. The sole assets of the statutory trust are the junior subordinated debt securities and related payments. The junior subordinated debt securities and the back-up obligations, in the aggregate, constitute a full and unconditional guarantee of the obligations of the statutory trust under the capital securities held by third-party investors. The securities bear interest at a rate of 1.70% over the 3-month LIBOR rate. The rate at September 30, 2022 was 4.99% and at December 31, 2021 was 2.00%.

In all three instances, the Company may redeem the junior subordinated debentures at any quarter-end, in whole, or in part, at par. This type of subordinated debenture qualifies as Tier 1 capital for regulatory purposes in determining and evaluating the Company’s capital adequacy.

A summary of all junior subordinated debentures issued by the Company to affiliates and subordinated debentures follows. For the junior subordinated debentures, these amounts represent the par value of the obligations owed to these affiliates, including the Company’s equity interest in the trusts along with any unamortized fair value marks. For the subordinated debentures, these amounts represent the par value less the remaining deferred offering expense associated with the issuance of the debentures.

	September 30, 2022	December 31, 2021
	Amount	Amount
TSEO Statutory Trust I	$2,460	$2,424
Maple Leaf Financial Statutory Trust II	7,461	7,293
Cortland Statutory Trust I	4,313	4,271
Total junior subordinated debentures owed to unconsolidated subsidiary trusts	$14,234	$13,988
Subordinated debentures	$73,864	$73,770

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are not statements of historical fact, but rather statements based on the Company’s current expectations, beliefs and assumptions regarding the future of Farmers’ business, future plans and strategies, projections, anticipated events and trends, its intended results and future performance, the economy and other future conditions. Forward-looking statements are preceded by terms such as “will,” “would,” “should,” “could,” “may,” “expect,” “estimate,” “believe,” “anticipate,” “intend,” “plan,” “project,” or variations of these words, or similar expressions. Forward-looking statements are not a guarantee of future performance and actual future results could differ materially from those contained in forward-looking information. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Numerous uncertainties, risks, and changes could cause or contribute to Farmers’ actual results, performance, and achievements to be materially different from those expressed or implied by the forward-looking statements.

Factors that could cause or contribute to such differences include, without limitation, risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission (the “Commission”), including without limitation, the risk factors disclosed in Item 1A, “Risk Factors,” in the Company’s 2021 Form 10-K, as updated in Item 1A, “Risk Factors,” in this Quarterly Report on Form 10-Q.

Many of these factors are beyond the Company’s ability to control or predict, and readers are cautioned not to put undue reliance on those forward-looking statements. The following, which is not intended to be an all-encompassing list, summarizes several factors that could cause the Company’s actual results to differ materially from those anticipated or expected in any forward-looking statement:

•general economic conditions in markets where the Company conducts business, which could materially impact credit quality trends;

•the length and extent of the economic impacts of the COVID-19 pandemic;

•actions by the Federal Reserve Board, U.S. Treasury and other government agencies, including those that impact money supply, market interest rates and inflation;

•disruptions in the mortgage and lending markets and significant or unexpected fluctuations in interest rates related to governmental responses to inflation, including financial stimulus packages and interest rate changes;

•general business conditions in the banking industry;

•the regulatory environment;

•general fluctuations in interest rates;

•demand for loans in the market areas where the Company conducts business;

•rapidly changing technology and evolving banking industry standards;

•competitive factors, including increased competition with regional and national financial institutions;

•Farmers' ability to attract, recruit and retain skilled employees; and

•new service and product offerings by competitors and price pressures.

Other factors not currently anticipated may also materially and adversely affect the Company’s results of operations, cash flows and financial position. There can be no assurance that future results will meet expectations. While the Company believes that the forward-looking statements in the presentation are reasonable, you should not place undue reliance on any forward-looking statement. In addition, these statements speak only as of the date made. The Company does not undertake, and expressly disclaims, any obligation to update or alter any statements whether as a result of new information, future events or otherwise, except as may be required by applicable law.

34

Overview

The Company’s results of operations for the quarter ended September 30, 2022 are discussed below. However, the Company’s past results of operations may not reflect its future operating trends.

The Company’s net income for the three months ended September 30, 2022, was $15.4 million, or $0.46 per diluted share, which compares to $16.0 million, or $0.56 per diluted share, for the three months ended September 30, 2021. Diluted earnings per share decreased due to the increased share count as a result of the Cortland acquisition. Annualized return on average assets and annualized return on average equity were 1.48% and 18.71%, respectively, for the three month period ended September 30, 2022, compared to 1.92% and 16.93% for the same three month period in 2021.

Net income for the nine months ended September 30, 2022 was $47.2 million, or $1.39 per diluted share, compared to $46.1 million, or $1.63 per diluted share, for the same nine month period in 2021. The decline in diluted earnings per share for the year-over-year comparison is due to the same reasons discussed above. The annualized return on average assets and annualized return on average equity were 1.51% and 16.55%, respectively, for the nine month period ended September 30, 2022, compared to 1.90% and 17.05% for the same nine month period in 2021.

On March 23, 2022, Farmers entered into an agreement and plan of merger (the “Merger Agreement”) with Emclaire Financial Corp. (NASDAQ: EMCF), a Pennsylvania corporation (“Emclaire”), and the parent company of The Farmers National Bank of Emlenton (“Emlenton”). On July 20, 2022, the transaction received the approval of Emclaire’s shareholders. The transaction is expected to be completed after the satisfaction or waiver of the remaining closing conditions set forth in the Merger Agreement, including the receipt of all required regulatory approvals. Emclaire operates 19 branches in ten counties throughout western Pennsylvania. As of September 30, 2022, Emclaire had total assets of $1.0 billion, gross loans of $810.1 million, deposits of $926.7 million and equity of $71.0 million.

Total gross loans were $2.40 billion at September 30, 2022 compared to $2.33 billion at December 31, 2021. The year exhibited broad based strength as the Company saw growth across every loan category, exclusive of PPP loans, with loan pipelines still showing solid volume. At September 30, 2022, the Company’s PPP loans had declined to a minimal $637 thousand before deferred fees still to be forgiven, and $13 thousand in net deferred fees associated with these loans yet to be recognized into income.

Non-performing assets to total assets remain at a low level, currently at 0.32%. Early stage delinquencies, which are loans 30 - 89 days delinquent, also continue to remain at low levels, at $6.7 million, or 0.28% of total loans, at September 30, 2022. Net charge-offs for the current quarter were $605 thousand, compared to $286 thousand in the same quarter in 2021 and net charge-offs as a percentage of average net loans outstanding was 0.10% for the quarter ended September 30, 2022, compared to 0.06% in the same quarter in 2021.

The Company recorded a provision for credit losses and unfunded commitments of $448 thousand for the third quarter of 2022 compared to a credit for credit losses of $948 thousand for the third quarter of 2021. The current quarter's growth in loans was the primary reason for the increase in the provision expense. The allowance for credit losses to total loans declined to 1.14% at September 30, 2022, compared to 1.22% at September 31, 2021, respectively. The low level of charge-off activity over the last several years continues to result in less allowance for credit losses being required.

The net interest margin for the three months ended September 30, 2022, was 3.21%, a 28 basis point decrease from the quarter ended September 30, 2021. In comparing the third quarter of 2022 to the same period in 2021, asset yields decreased 6 basis points, while the cost of interest-bearing liabilities increased 32 basis points. The decline in net interest margin in the third quarter of 2022 compared to the third quarter of 2021 was driven by the lower PPP income in 2022 compared to 2021 and a greater percentage of earning assets invested in securities rather than loans.

The net interest margin for the nine months ended September 30, 2022, was 3.24%, a 25 basis point decrease from the nine months ended September 30, 2021. In comparing the nine month period ended September 30, 2022 to the same nine month period in 2021, asset yields decreased 22 basis points, while the cost of interest-bearing liabilities increased 5 basis points.

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Results of Operations. The following is a comparison of selected financial ratios and other results at or for the three and nine month periods ended September 30, 2022 and 2021:

	At or for the Three Months Ended September 30,						At or for the Nine Months Ended September 30,
(In Thousands, except Per Share Data)	2022			2021			2022			2021
Total assets	$	4,120,022		$	3,317,047		$	4,120,022		$	3,317,047
Net income	$	15,446		$	16,011		$	47,241		$	46,142
Diluted earnings per share	$	0.46		$	0.56		$	1.39		$	1.63
Return on average assets (annualized)		1.48	%		1.92	%		1.51	%		1.90	%
Return on average equity (annualized)		18.71	%		16.93	%		16.55	%		17.05	%
Efficiency ratio (tax equivalent basis) (1)		50.55	%		46.04	%		54.00	%		46.49	%
Equity to asset ratio		6.45	%		11.38	%		6.45	%		11.38	%
Dividends to net income		35.06	%		19.41	%		34.39	%		20.20	%
Net loans to assets		57.59	%		56.41	%		57.59	%		56.41	%
Loans to deposits		67.28	%		66.08	%		67.28	%		66.08	%

(1)The ratio is calculated by dividing noninterest expenses, less intangible amortization and FHLB prepayment penalties, by the sum of net interest income and noninterest income, less gain or loss on securities. The Company strives for a lower efficiency ratio. This efficiency ratio measure (non-GAAP) is not required by any regulatory agency but provides meaningful information to management and investors since a lower ratio indicates the Company is using their assets more effectively to generate profits.

Efficiency ratio excluding intangible amortization, (gain) loss on securities and FHLB prepayment penalties
	For Three Months Ended September 30,						For Nine Months Ended September 30,
	2022			2021			2022			2021
Net interest income, after tax	$	32,636		$	27,256		$	97,319		$	80,349
Noninterest income		8,827			9,015			36,002			28,655
Security losses (gains)		17			(459	)		88			(927	)
Net interest income and noninterest income adjusted		41,480			35,812			133,409			108,077
Noninterest expense less intangible amortization		20,967			16,813			72,045			50,570
FHLB prepayment penalties		0			325			0			325
Noninterest expense adjusted	$	20,967		$	16,488		$	72,045		$	50,245
Efficiency ratio excluding amortization, (gains) losses on securities and FHLB prepayment penalties		50.55	%		46.04	%		54.00	%		46.49	%

Net Interest Income. The following schedule details the various components of net interest income for the periods indicated. All asset yields are calculated on a tax-equivalent basis where applicable. Security yields are based on amortized cost.

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Average Balance Sheets and Related Yields and Rates

(Dollar Amounts in Thousands)

	Three Months Ended								Three Months Ended
	September 30, 2022								September 30, 2021
	AVERAGE								AVERAGE
	BALANCE			INTEREST		RATE (1)			BALANCE			INTEREST		RATE (1)
EARNING ASSETS
Loans (3) (4)	$	2,386,184		$	27,570		4.62	%	$	1,917,443		$	22,665		4.73	%
Taxable securities (2)		1,112,411			5,477		1.97			727,271			3,222		1.77
Tax-exempt securities (2) (4)		473,677			3,814		3.22			360,371			3,065		3.40
Other investments		33,524			199		2.37			19,380			113		2.33
Federal funds sold and other		59,289			205		1.38			95,871			32		0.13
TOTAL EARNING ASSETS		4,065,085			37,265		3.67			3,120,336			29,097		3.73
NONEARNING ASSETS
Cash and due from banks		22,061								23,134
Premises and equipment		38,773								24,890
Allowance for credit losses		(27,490	)							(24,758	)
Unrealized gains (losses) on securities		(202,807	)							25,851
Other assets		269,233								135,255
TOTAL ASSETS	$	4,164,855							$	3,304,708
INTEREST-BEARING LIABILITIES
Time deposits	$	338,794		$	586		0.69	%	$	361,566		$	692		0.77	%
Brokered time deposits		50,494			142		1.12			0			0		0.00
Savings deposits		832,828			165		0.08			525,560			152		0.12
Demand deposits		1,426,801			2,317		0.65			1,278,099			502		0.16
Short term borrowings		90,978			533		2.34			5,671			0		0.00
Long term borrowings		88,031			886		4.03			51,767			495		3.82
TOTAL INTEREST-BEARING LIABILITIES		2,827,926			4,629		0.65			2,222,663			1,841		0.33
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits		969,700								684,419
Other liabilities		36,929								22,418
Stockholders' equity		330,300								375,208
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	4,164,855							$	3,304,708
Net interest income and interest rate spread				$	32,636		3.02	%				$	27,256		3.40	%
Net interest margin							3.21	%							3.49	%

(1) Rates are calculated on an annualized basis.

(2) Includes unamortized discounts and premiums. Average balance and yield are computed using the average historical amortized cost.

(3) Interest on loans includes fee income of $1.0 million and $2.8 million for 2022 and 2021, respectively, and is reduced by amortization of $786 thousand and $664 thousand for 2022 and 2021, respectively.

(4) For 2022, adjustments of $76 thousand and $779 thousand, respectively, are made to tax equate income on tax exempt loans and tax exempt securities. For 2021, adjustments of $87 thousand and $635 thousand, respectively, are made to tax equate income on tax exempt loans and tax exempt securities. These adjustments are based on a marginal federal income tax rate of 21%, less disallowances.

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Average Balance Sheets and Related Yields and Rates

(Dollar Amounts in Thousands)

	Nine Months Ended  September 30, 2022								Nine Months Ended  September 30, 2021
	AVERAGE BALANCE			INTEREST		RATE (1)			AVERAGE BALANCE			INTEREST		RATE (1)
EARNING ASSETS
Loans (3) (4)	$	2,346,542		$	79,008		4.49	%	$	1,994,687		$	70,234		4.69	%
Taxable securities (2)		1,074,020			15,287		1.90			524,774			7,452		1.89
Tax-exempt securities (2) (4)		469,878			11,372		3.23			327,938			8,630		3.51
Other investments		32,901			545		2.21			20,372			355		2.32
Federal funds sold and other		82,031			348		0.57			204,037			161		0.11
TOTAL EARNING ASSETS		4,005,372			106,560		3.55			3,071,808			86,832		3.77
NONEARNING ASSETS
Cash and due from banks		27,642								34,297
Premises and equipment		37,871								25,220
Allowance for credit losses		(27,887	)							(25,055	)
Unrealized gains (losses) on securities		(127,082	)							22,668
Other assets		250,431								132,228
TOTAL ASSETS	$	4,166,347							$	3,261,166
INTEREST-BEARING LIABILITIES
Time deposits	$	357,241		$	1,782		0.67	%	$	393,704		$	2,955		1.00	%
Brokered time deposits		37,400			206		0.73			15,692			75		0.64
Savings deposits		837,937			473		0.07			512,716			510		0.13
Demand deposits		1,422,583			3,644		0.34			1,200,584			1,861		0.21
Short term borrowings		45,568			631		1.85			3,155			7		0.30
Long term borrowings		87,915			2,505		3.80			68,306			1,075		2.10
TOTAL INTEREST-BEARING LIABILITIES		2,788,644			9,241		0.44			2,194,157			6,483		0.39
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits		966,173								682,584
Other liabilities		30,904								22,026
Stockholders' equity		380,626								362,399
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	4,166,347							$	3,261,166
Net interest income and interest rate spread				$	97,319		3.11	%				$	80,349		3.38	%
Net interest margin							3.24	%							3.49	%

(1) Rates are calculated on an annualized basis.

(2) Includes unamortized discounts and premiums. Average balance and yield are computed using the average historical amortized cost.

(3) Interest on loans includes fee income of $3.9 million and $8.5 million for 2022 and 2021, respectively, and is reduced by amortization of $2.2 million and $2.0 million for 2022 and 2021, respectively.

(4) For 2022, adjustments of $238 thousand and $2.3 million, respectively, are made to tax equate income on tax exempt loans and tax exempt securities. For 2021, adjustments of $274 thousand and $1.8 million, respectively, are made to tax equate income on tax exempt loans and tax exempt securities. These adjustments are based on a marginal federal income tax rate of 21%, less disallowances.

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Net Interest Income. Net interest income for the three month period ended September 30, 2022, was $31.8 million compared to $26.5 million for the same period in 2021. The increase in net interest income was driven by an increase in interest earning assets, including the acquisition of Cortland, offset by a reduction in PPP interest and fees. Interest and fees associated with PPP loans totaled $1.4 million in the third quarter of 2021 compared to $62 thousand in the third quarter of 2022. The net interest margin was 3.21% in the third quarter of 2022 compared to 3.49% for the third quarter of 2021. The decline in net interest margin in the third quarter of 2022 compared to the third quarter of 2021 was driven by the lower PPP income in 2022 compared to 2021 and a greater percentage of earning assets invested in securities rather than loans.

Net interest income for the nine month period ended September 30, 2022, was $94.7 million compared to $78.3 million for the same period in 2021. The increase in net interest income was driven by many of the same factors as the third quarter increase. The net interest margin was 3.24% for the nine month period ended September 30, 2022 compared to 3.49% for the same period in 2021. The decline in net interest margin for the nine month period ended September 30, 2022 was also driven by many of the same factors as the third quarter decrease.

Noninterest Income. Noninterest income decreased $188 thousand, to $8.8 million for the third quarter of 2022 compared to the third quarter of 2021. Service charges on deposit accounts increased $305 thousand to $1.2 million in the third quarter of 2022 compared to $924 thousand for the third quarter of 2021. The increase was primarily due to the acquisition of Cortland and growth. Insurance commissions increased to $1.1 million in the third quarter of 2022 compared to $799 thousand in the third quarter of 2021. This business line continues to exhibit good growth. Net gains on the sale of loans decreased to $326 thousand in the third quarter of 2022 compared to $1.5 million in the third quarter of 2021. This drop was caused by lower mortgage production compared to the prior year, compressed margins and a lower saleable mix due to the dramatic increase in interest rates in 2022. Security losses for the third quarter of 2022 totaled $17 thousand compared to security gains of $459 thousand for the same period in 2021. Debit card and EFT fees increased to $1.5 million in the third quarter of 2022 compared to $1.2 million in the third quarter of 2021. This increase was due to the Cortland acquisition and increased volumes. Other noninterest income increased to $1.1 million in the third quarter of 2022 compared to $461 thousand in the second quarter of 2021. This increase was due to the acquisition of Cortland and increased income related to investments in SBIC and SBA funds.

Noninterest income for the nine month period ended September 30, 2022, was $36.0 million compared to $28.7 million for the same period in 2021. The increase in noninterest income for the nine month period ended September 30, 2022 was primarily due to $8.4 million in legal settlement income that occurred in the first quarter of 2022.

Noninterest Expense. Total noninterest expense was $21.4 million in the third quarter of 2022 compared with $17.1 million for the third quarter ended September 30, 2021. The year-over-year increase was primarily due to the acquisition of Cortland, continued higher healthcare benefit costs and higher merger related costs in the third quarter of 2022 compared to the same quarter in 2021.

Total noninterest expense was $73.3 million for the nine month period ended September 30, 2022 compared with $51.5 million for the same nine month period in 2021. The increase is mostly due to the same factors as the quarterly increase, but also increased due to a $6.0 million charitable contribution to the Farmers Charitable Foundation and $2.1 million in legal expense associated with the legal settlement in the first quarter of 2022.

Income Taxes. Income tax expense totaled $3.3 million for the quarter ended September 30, 2022, and $3.4 million for the quarter ended September 30, 2021. The effective tax rate for the three month period ended September 30, 2022 and 2021 was 17.7% and 17.3%, respectively.

Income tax expense totaled $9.5 million for the nine month period ended September 30, 2022, and $9.8 million for the same nine month period ended September 30, 2021. The effective tax rate for the nine month period ended September 30, 2022 and 2021 was 16.7% and 17.5%, respectively.

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Financial Condition

Cash and Cash Equivalents. Cash and cash equivalents decreased $32.8 million during the first nine months of 2022 from $112.8 million to $80.0 million. The decrease in the cash balance is part of normal fluctuations on the Company's $4.1 billion balance sheet as well as cash being used to fund growth in the Company's loans and securities.

Securities. Securities available-for-sale decreased by $132.5 million since December 31, 2021 as the gross unrealized gain of $11.7 million on available for sale securities at December 31, 2021 declined to a gross unrealized loss of $290.1 million at September 30, 2022 due to the rise in U.S. treasury rates during the first nine months. The Company also purchased securities totaling $239.1 million during the nine months ended September 30, 2022 offset by the proceeds from maturities, repayments and sales of securities totaling $66.0 million.

Loans. Gross loans (excluding loans held for sale) were $2.40 billion at September 30, 2022, compared to $2.33 billion at December 31, 2021. Gross loans increased $68.9 million during the first nine months of 2022 as the third quarter exhibited broad based strength as the Company saw growth across every major loan category exclusive of PPP loans.

Allowance for Credit Losses. The following table indicates key asset quality ratios that management evaluates on an ongoing basis. The recorded investment balances were used in the calculations.

Asset Quality History

(In Thousands of Dollars)

	9/30/2022			6/30/2022			3/31/2022			12/31/2021			9/30/2021
Nonperforming loans	$	12,976		$	14,107		$	14,046		$	16,195		$	14,744
Nonperforming loans as a % of total loans		0.54	%		0.59	%		0.61	%		0.69	%		0.78	%
Loans delinquent 30-89 days	$	6,659		$	8,716		$	7,304		$	8,891		$	6,944
Loans delinquent 30-89 days as a % of total loans		0.28	%		0.37	%		0.32	%		0.38	%		0.37	%
Allowance for credit losses	$	27,282		$	27,454		$	27,015		$	29,386		$	23,136
Allowance for credit losses as a % of loans		1.14	%		1.16	%		1.17	%		1.26	%		1.22	%
Allowance for credit losses as a % of nonperforming loans		210.25	%		194.61	%		192.33	%		181.45	%		156.92	%
Annualized net charge-offs to average net loans outstanding		0.10	%		0.01	%		0.25	%		0.06	%		0.06	%
Non-performing assets	$	13,042		$	14,107		$	14,046		$	16,195		$	14,744
Non-performing assets as a % of total assets		0.32	%		0.34	%		0.33	%		0.39	%		0.44	%
Net charge-offs for the quarter	$	605		$	42		$	1,441		$	313		$	286

Due to a decrease in a specific reserve on one loan, and a continued decline in historical loss ratios, the Company recorded a credit provision for credit losses of $15 thousand for the nine month period ended September 30, 2022, compared to the $472 thousand recorded in the same period of 2021. The Company also recorded a $15 thousand and $721 thousand provision for unfunded loans for the three and nine month periods ended September 30, 2022, respectively. The Company estimates the ACL based on the amortized cost basis of the underlying loan and has made an accounting policy election to exclude accrued interest from the loan’s amortized cost basis and the related measurement of the ACL. Estimating the amount of the ACL is a function of a number of factors, including but not limited to changes in the loan portfolio, net charge-offs, trends in past due and nonaccrual loans, and the level of potential problem loans, all of which may be susceptible to significant change. The allowance for credit losses as a percentage of the total loan portfolio was 1.14% at September 30, 2022 and 1.26% at December 31, 2021. Early stage delinquencies, which are loans 30 - 89 days delinquent, as a percentage of total loans decreased from 0.38% at December 31, 2021, to 0.28% at September 30, 2022, and non-performing loans as a percentage of total loans decreased from 0.69% at December 31, 2021, to 0.54% at September 30, 2022. The allowance for credit losses to non-performing loans increased from 181.45% at December 31, 2021, to 210.25% at September 30, 2022.

Based on the evaluation of the adequacy of the allowance for credit losses, management believes that the allowance for credit losses at September 30, 2022, is adequate. The provision for credit losses is based on management’s judgment after taking into consideration all factors connected with the collectability of the existing loan portfolio. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Specific factors considered by management in determining the amounts charged to operating expenses include previous credit loss experience, the status of past due interest and principal payments, the quality of financial information supplied by loan customers and the general condition of the industries in the community to which loans have been made.

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Deposits. Total deposits increased $20.0 million from December 31, 2021, to September 30, 2022, to a balance of $3.57 billion. The increase of $20.0 million since December 31, 2021 is due to seasonality in public fund balances and continued growth in business and consumer deposits. In addition, the Company added $42.5 million in brokered deposits during the first nine months of 2022.

Borrowings. Total borrowing balances increased from $87.8 million at December 31, 2021 to $243.1 million at September 30, 2022, due to a $155 million FHLB advance.

Capital Resources. Total stockholders’ equity decreased $206.8 million, or 43.8%, during the nine month period ended September 30, 2022. The decrease in stockholders’ equity was primarily due to an $238.5 million decline in accumulated other comprehensive income and dividends paid to shareholders offset by net income for the nine month period ended September 30, 2022. The rapid increase in U.S. treasury rates has had a negative effect on the value of the Company’s available for sale securities, and in turn, the dollar amount that flows through accumulated other comprehensive income. Shareholders received $0.16 per share, per quarter, in cash dividends in the first three quarters of 2022. Book value per share decreased from $13.94 per share at December 31, 2021 to $7.80 per share at September 30, 2022.

The capital management function is a regular process that consists of providing capital for both the current financial position and the anticipated future growth of the Company. At September 30, 2022 the Company is required to maintain 4.5% common equity tier 1 to risk weighted assets excluding the conservation buffer to be adequately capitalized. The Company’s common equity tier 1 to risk weighted assets was 13.36%, total risk-based capital ratio stood at 17.44%, and the Tier 1 risk-based capital ratio and Tier 1 leverage ratio were at 13.97% and 10.24%, respectively, at September 30, 2022. The Company opted not to phase in, over 3 years, the effects of the initial CECL entry to equity for the implementation of ACS 326, recorded on January 1, 2021. Management believes that the Company and the Bank meet all capital adequacy requirements to which they are subject, as of September 30, 2022.

Federal bank regulatory agencies finalized a rule that simplifies capital requirements for community banks by allowing them to adopt a simple leverage ratio to measure capital adequacy. The community bank leverage ratio framework removes requirements for calculating and reporting risk-based capital ratios for a qualifying community bank that opts into the framework. The Company has not elected to adopt this framework.

Critical Accounting Policies

The Company follows financial accounting and reporting policies that are in accordance with U.S. GAAP. These policies are presented in Note 1 of the consolidated audited financial statements in the Company’s Annual Report to Shareholders included in the Company’s 2021 Form 10-K. Critical accounting policies are those policies that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The Company has identified three accounting policies that are critical accounting policies and an understanding of these policies is necessary to understand the Company’s financial statements. These policies relate to determining the adequacy of the allowance for credit losses, for both the investment and loan portfolios and if there is any impairment of goodwill or other intangible. Additional information regarding these policies is included in the notes to the aforementioned 2021 consolidated financial statements, Note 1 (Summary of Significant Accounting Policies), Note 2 (Business Combinations), Note 4 (Loans), and the sections captioned “Loan Portfolio.”

Securities classified as AFS are those securities that the Company intends to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as AFS would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors.

The Company evaluates securities AFS in unrealized loss positions on a quarterly basis to determine whether the decline in fair value below the amortized costs basis (impairment) is due to credit-related factors or noncredit-related factors. In making this evaluation, management considers the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. Any impairment that is not credit-related is recognized in other comprehensive income, net of related deferred income taxes. Credit-related impairment is recognized as an allowance for credit losses (“ACL”) on the balance sheet based on the amount by which the amortized cost basis exceeds the fair value, with a corresponding charge to net income. Both the ACL and the charge to net income may be reversed if conditions change. However, if the Company intends to sell an impaired AFS security or more likely than not will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount must be recognized in net income with a corresponding adjustment to the security’s amortized cost basis rather than through the establishment of an ACL. The Company has recorded no ACL related to the investment portfolio as of September 30, 2022.

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The ACL represents management’s estimate of expected credit losses in the Company’s loan portfolio at the balance sheet date. The Company estimates the ACL based on the amortized cost basis of the underlying loan and has made an accounting policy election to exclude accrued interest from the loan’s amortized cost basis and the related measurement of the ACL. Estimating the amount of the ACL is a function of a number of factors, including but not limited to changes in the loan portfolio, net charge-offs, trends in past due and nonaccrual loans, and the level of potential problem loans, all of which may be susceptible to significant change.

Liquidity

The Company maintains, in the opinion of management, liquidity sufficient to satisfy depositors’ requirements and meet the credit needs of customers. The Company depends on its ability to maintain its market share of deposits as well as acquiring new funds. The Company’s ability to attract deposits and borrow funds depends in large measure on its profitability, capitalization and overall financial condition. The Company’s objective in liquidity management is to maintain the ability to meet loan commitments, purchase securities or to repay deposits and other liabilities in accordance with their terms without an adverse impact on current or future earnings. Principal sources of liquidity for the Company include assets considered relatively liquid, such as federal funds sold, cash-due from banks, as well as cash flows from maturities and repayments of loans, and to a lesser extent securities.

Along with its liquid assets, the Bank has additional sources of liquidity available which help to ensure that adequate funds are available as needed. These other sources include, but are not limited to, access to funds in the wholesale arena, the ability to obtain deposits through the adjustment of interest rates and the purchasing of federal funds and borrowings on approved lines of credit at major domestic banks. At September 30, 2022, this line of credit totaled $35 million of which the Bank had not borrowed against. In addition, the Company has two revolving lines of credit with correspondent banks totaling $6.5 million. There was no balance on these lines at September 30, 2022 and December 31, 2021. Management feels that its liquidity position is adequate and will continue to monitor the position on a monthly basis. As of September 30, 2022, the Bank had outstanding balances with the FHLB of $155.0 million with additional borrowing capacity of approximately $550.8 million, as well as access to the Federal Reserve Discount Window, which provides an additional source of funds with the posting of collateral. The Bank views its membership in the FHLB as a solid source of liquidity.

Off-Balance Sheet Arrangements

In the normal course of business, to meet the financial needs of our customers, we are a party to financial instruments with off-balance sheet risk. These financial instruments generally include commitments to originate mortgage, commercial and consumer loans, and involve to varying degrees, elements of credit and interest rate risk in excess of amounts recognized in the Consolidated Balance Sheets. The Bank’s maximum exposure to credit loss in the event of nonperformance by the borrower is represented by the contractual amount of those instruments. Because some commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The same credit policies are used in making commitments as are used for on-balance sheet instruments. Collateral is required in instances where deemed necessary. Undisbursed balances of loans closed include funds not disbursed but committed for construction projects. Unused lines of credit include funds not disbursed, but committed for, home equity, commercial and consumer lines of credit. Financial standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Those guarantees are primarily used to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. Total unused commitments were $630.0 million at September 30, 2022, and $606.8 million at December 31, 2021. Additionally, the Company committed up to $17.2 million in subscriptions in Small Business Investment Company investment funds. At September 30, 2022, the Company has invested $15.4 million in these funds.

Recent Market and Regulatory Developments

Various and significant legislation affecting financial institutions and the financial industry is from time to time introduced in the U.S. Congress and state legislatures, as well as by regulatory agencies. Such initiatives may include proposals to expand or contract the powers of bank holding companies and depository institutions or proposals to substantially change the financial institution regulatory system.

Also, such statutes, regulations and policies are continually under review by Congress, state legislatures and federal and state regulatory agencies and are subject to change at any time, particularly in the current economic and regulatory environment. Any such change in statutes, regulations or regulatory policies applicable to the Company could have a material effect on the business of the Company.

42

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company’s ability to maximize net income is dependent, in part, on management’s ability to plan and control net interest income through management of the pricing and mix of assets and liabilities. Because a large portion of assets and liabilities of the Company are monetary in nature, changes in interest rates and monetary or fiscal policy affect its financial condition and can have significant impact on the net income of the Company.

The Company considers the primary market exposure to be interest rate risk. Simulation analysis is used to monitor the Company’s exposure to changes in interest rates, and the effect of the change to net interest income. The following table shows the effect on net interest income and the net present value of equity in the event of sudden and sustained interest rate increases and sudden and sustained interest rate decreases.

Changes In Interest Rate (basis points)	September 30, 2022 Result			December 31, 2021 Result			ALCO Guidelines
Net Interest Income Change
+300		0.8	%		4.5	%		-10.0	%
+200		0.7	%		3.2	%		-7.5	%
+100		0.4	%		1.5	%		-5.0	%
-100		-3.7	%		-4.1	%		-5.0	%
-200		-8.7	%	*				-10.0	%
-300		-13.3	%	*				-15.0	%
Net Present Value Of Equity Change
+300		-8.8	%		6.2	%		-10.0	%
+200		-5.1	%		7.6	%		-7.5	%
+100		-2.1	%		6.1	%		-5.0	%
-100		-2.4	%		-12.4	%		-10.0	%
-200		-8.6	%	*				-15.0	%
-300		-19.7	%	*				-20.0	%

* Not calculated for December 31, 2021.

The results of the simulations indicate that interest rate change results fall within internal limits established by the Company at September 30, 2022. The change in the net present value of equity exceeded internal guidelines at December 31, 2021, when the simulation model assumed a sudden decrease in rates of 100 basis points (1%). This was primarily due to the positive impact on the fair value of assets not being as great as the negative impact on the fair value of certain liabilities. Specifically, because core deposits typically bear relatively low interest rates, their fair value would be negatively impacted as the rates could not be adjusted by the full extent of the sudden decrease in rates. Management will continue to monitor any policy exceptions and may consider changes to the asset/liability position in the future. A report on interest rate risk is presented to the Board of Directors and the Asset/Liability Committee on a quarterly basis. It is management’s opinion that hedging instruments currently available are not a cost effective means of controlling interest rate risk for the Company. Accordingly, the Company does not currently use financial derivatives, such as interest rate options, swaps, caps, floors or other similar instruments, but does utilize swaps to accommodate large commercial borrowers that desire longer term fixed rates and mortgage banking derivatives that are not designated as hedge instruments.

Item 4. Controls and Procedures

Based on their evaluation, as of the end of the period covered by this Quarterly Report on Form 10-Q, the Company’s Chief Executive Officer and Chief Financial Officer have concluded the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) are effective. There were no changes in the Company’s internal controls over financial reporting (as defined in Rule 13a–15(f) under the Exchange Act) that occurred during the fiscal quarter ended September 30, 2022, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

43

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company is a defendant in lawsuits and other adversary proceedings arising in the ordinary course of business. Legal costs incurred in connection with the resolution of claims and lawsuits are generally expensed as incurred, although the Company establishes accruals where losses are deemed probable and reasonably estimable. The Company’s assessment of the current exposure with respect to adverse claims in legal matters could change in the event of the discovery of additional facts in such matters or upon determinations by judges, juries, administrative agencies or other finders of fact that are inconsistent with the Company’s evaluation of claims. It is possible that the ultimate resolution of matters, if unfavorable, may be material to the results of operations in a particular future period as the time and amount of any resolution of such actions and its relationship to the future results of operations are not known.

The Company is a defendant in a matter styled Kirt Banister v. Farmers National Bank of Canfield, Case No. 2022-cv-00214, pending in the Court of Common Pleas of Mahoning County, Ohio. The complaint, purportedly brought on behalf of a class consisting of all account holders within the six years preceding the filing of the complaint who were charged more than one NSF fee per item, alleges breach of contract and breach of the duty of good faith and fair dealing and seeks damages in the form of all allegedly unauthorized NSF fees paid by the class. On July 22, 2022, the court denied the Company’s motion to dismiss the claims. The matter remains pending and Farmers intends to defend the matter vigorously. The Company is not able at this time to determine whether an adverse result in the matter is reasonably possible or the amount of such loss were it to occur.

Item 1A. Risk Factors

For a discussion of risk factors related to the Company, refer to Part 1, Item 1A, “Risk Factors,” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of equity securities by the issuer.

In 2019, the Company announced that its Board of Directors authorized the purchase of up to 1,500,000 shares of its common stock in the open market or in privately negotiated transactions, from time to time and subject to market and other conditions. At September 30, 2022, the Company had 546,182 shares remaining to be repurchased under this program. There were no shares repurchased under the program during the three and nine month periods ended September 30, 2022.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

44

Item 6. Exhibits

The following exhibits are filed or incorporated by reference as part of this report:

2.1*	Agreement and Plan of Merger by and among Farmers National Banc Corp., Emclaire Financial Corp., and FMNB Merger Subsidiary V, LLC, dated as of March 23, 2022 (incorporated by reference from Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 24, 2022).
3.1	Articles of Incorporation of Farmers National Banc Corp., as amended (incorporated by reference from Exhibit 4.1 to the Company’s Registration Statement on Form S-3 filed with the Commission on October 3, 2001 (File No. 333-70806)).
3.2	Amendment to Articles of Incorporation of Farmers National Banc Corp., as amended (incorporated by reference from Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 1, 2013).
3.3	Amendment to Articles of Incorporation of Farmers National Banc Corp., as amended (incorporated by reference from Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on April 20, 2018).
3.4	Amended Code of Regulations of Farmers National Banc Corp. (incorporated by reference from Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on April 17, 2020).
31.1	Rule 13a-14(a)/15d-14(a) Certification of Kevin J. Helmick, President and Chief Executive Officer of the Company (principal executive officer) (filed herewith).
31.2	Rule 13a-14(a)/15d-14(a) Certification of A. Troy Adair, Executive Vice President, Chief Financial Officer and Secretary of the Company (principal financial officer) (filed herewith).
32.1	Certification pursuant to 18 U.S.C. Section 1350 of Kevin J. Helmick, President and Chief Executive Officer of the Company (principal executive officer) (filed herewith).
32.2	Certification pursuant to 18 U.S.C. Section 1350 of A. Troy Adair, Executive Vice President, Chief Financial Officer and Secretary of the Company (principal financial officer) (filed herewith).
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, formatted in iXBRL (Inline Extensible Business Reporting Language), filed herewith: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows; and (vi) Notes to Unaudited Consolidated Financial Statements.
104	The cover page from the Company’s Quarterly report on Form 10-Q for the quarter ended September 30, 2022, has been formatted in Inline XBRL.

* Pursuant to Item 601(a)(5) of Regulation S-K, certain schedules and similar attachments have been omitted. The registrant hereby agrees to furnish a copy of any omitted schedule or similar attachment to the SEC upon request.

45

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FARMERS NATIONAL BANC CORP.

Dated: November 8, 2022

/s/ Kevin J. Helmick

Kevin J. Helmick

President and Chief Executive Officer

Dated: November 8, 2022

/s/ A. Troy Adair

A. Troy Adair

Executive Vice President, Chief Financial Officer and Secretary

46

EX-31.1

Exhibit 31.1

CERTIFICATIONS

Certification of Chief Executive Officer

CERTIFICATION FOR QUARTERLY REPORT ON FORM 10-Q

I, Kevin J. Helmick certify that:

1) I have reviewed this quarterly report on Form 10-Q of Farmers National Banc Corp.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 8, 2022

/s/ Kevin J. Helmick

Kevin J. Helmick

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

Certification of Chief Financial Officer

CERTIFICATION FOR QUARTERLY REPORT ON FORM 10-Q

I, A. Troy Adair certify that:

1) I have reviewed this quarterly report on Form 10-Q of Farmers National Banc Corp.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 8, 2022

/s/ A. Troy Adair

A. Troy Adair

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Farmers National Banc Corp. (the “Corporation”) on Form 10-Q for the period ended September 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I Kevin J. Helmick, Chief Executive Officer of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ Kevin J. Helmick

Kevin J. Helmick

Chief Executive Officer

November 8, 2022

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Farmers National Banc Corp. (the “Corporation”) on Form 10-Q for the period ended September 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I A. Troy Adair, Chief Financial Officer of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ A. Troy Adair

A. Troy Adair

Chief Financial Officer

November 8, 2022

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2022	Oct. 31, 2022
Cover [Abstract]
Entity Registrant Name	FARMERS NATIONAL BANC CORP.
Entity Central Index Key	0000709337
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Document Type	10-Q
Document Period End Date	Sep. 30, 2022
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		34,059,657
Entity Shell Company	false
Title of 12(b) Security	Common Stock, No Par Value
Trading Symbol	FMNB
Security Exchange Name	NASDAQ
Entity File Number	001-35296
Entity Incorporation, State or Country Code	OH
Entity Tax Identification Number	34-1371693
Entity Address, Address Line One	20 South Broad Street
Entity Address, City or Town	Canfield
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	44406
City Area Code	330
Local Phone Number	533-3341
Document Quarterly Report	true
Document Transition Report	false

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
ASSETS
Cash and due from banks	$ 20,814	$ 29,150
Federal funds sold and other	59,167	83,640
TOTAL CASH AND CASH EQUIVALENTS	79,981	112,790
Securities available for sale	1,295,133	1,427,677
Other investments	34,399	30,459
Loans held for sale	2,142	4,545
Loans	2,399,981	2,331,082
Less allowance for credit losses	27,282	29,386
NET LOANS	2,372,699	2,301,696
Premises and equipment, net	39,327	37,520
Goodwill	94,640	94,240
Other intangibles, net	7,728	8,366
Bank owned life insurance	75,075	73,855
Other assets	118,898	51,601
TOTAL ASSETS	4,120,022	4,142,749
Deposits:
Noninterest-bearing	934,638	916,237
Interest-bearing	2,590,054	2,630,998
Brokered time deposits	42,459	0
TOTAL DEPOSITS	3,567,151	3,547,235
Short-term borrowings	155,000	0
Long-term borrowings	88,098	87,758
Other liabilities	44,154	35,324
TOTAL LIABILITIES	3,854,403	3,670,317
Commitments and contingent liabilities
Stockholders' Equity:
Common Stock - Authorized 50,000,000 shares in 2022 and 2021; 35,128,962 shares issued in 2022 and 2021 and 34,059,657 and 33,898,237 shares outstanding in 2022 and 2021, respectively	304,838	306,123
Retained earnings	204,808	173,896
Accumulated other comprehensive income (loss)	(229,162)	9,295
Treasury stock, at cost; 1,069,305 and 1,230,725 shares in 2022 and 2021, respectively	(14,865)	(16,882)
TOTAL STOCKHOLDERS' EQUITY	265,619	472,432
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 4,120,022	$ 4,142,749

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) - shares	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	35,128,962	35,128,962
Common Stock, Shares, Outstanding	34,059,657	33,898,237
Treasury stock, shares	1,069,305	1,230,725

XML

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
INTEREST AND DIVIDEND INCOME
Loans, including fees	$ 27,494	$ 22,578	$ 78,770	$ 69,960
Taxable securities	5,477	3,222	15,287	7,452
Tax exempt securities	3,035	2,430	9,025	6,846
Dividends	199	113	545	355
Federal funds sold and other interest income	205	32	348	161
TOTAL INTEREST AND DIVIDEND INCOME	36,410	28,375	103,975	84,774
INTEREST EXPENSE
Deposits	3,210	1,346	6,105	5,401
Short-term borrowings	533	0	631	7
Long-term borrowings	886	495	2,505	1,075
TOTAL INTEREST EXPENSE	4,629	1,841	9,241	6,483
NET INTEREST INCOME	31,781	26,534	94,734	78,291
Provision (credit) for credit losses	433	(947)	(15)	(472)
Provision (credit) for unfunded loans	15	(1)	721	(1)
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	31,333	27,482	94,028	78,764
NONINTEREST INCOME
Bank owned life insurance income	406	340	1,220	924
Security (losses) gains, including fair value changes for equity securities	(17)	459	(88)	979
Net gains on sale of loans	326	1,466	1,820	6,557
Other mortgage banking income (loss), net	94	32	193	(138)
Legal settlement	0	0	8,375	0
Other operating income	1,064	461	3,301	1,703
TOTAL NONINTEREST INCOME	8,827	9,015	36,002	28,655
NONINTEREST EXPENSES
Salaries and employee benefits	10,724	9,321	33,628	29,163
Occupancy and equipment	3,028	1,899	8,626	6,065
FDIC insurance and state and local taxes	1,017	692	2,942	2,086
Professional fees	985	1,009	5,176	2,895
Merger related costs	872	472	3,486	588
Advertising	596	466	1,474	1,083
Intangible amortization	432	316	1,271	948
Core processing charges	738	860	2,606	2,318
Charitable donation	0	0	6,000	0
Other operating expenses	3,007	2,093	8,107	6,369
TOTAL NONINTEREST EXPENSES	21,399	17,128	73,316	51,515
INCOME BEFORE INCOME TAXES	18,761	19,369	56,714	55,904
INCOME TAXES	3,315	3,358	9,473	9,762
NET INCOME	$ 15,446	$ 16,011	$ 47,241	$ 46,142
EARNINGS PER SHARE - basic	$ 0.46	$ 0.57	$ 1.40	$ 1.63
EARNINGS PER SHARE - fully diluted	$ 0.46	$ 0.56	$ 1.39	$ 1.63
Service Charges on Deposit Accounts
NONINTEREST INCOME
Noninterest income	$ 1,229	$ 924	$ 3,513	$ 2,522
Trust Fees
NONINTEREST INCOME
Noninterest income	2,370	2,335	7,265	6,930
Insurance Agency Commissions
NONINTEREST INCOME
Noninterest income	1,136	799	3,269	2,750
Retirement Plan Consulting Fees
NONINTEREST INCOME
Noninterest income	332	334	1,052	1,043
Investment Commissions
NONINTEREST INCOME
Noninterest income	424	638	1,675	1,665
Debit Card and EFT Fees
NONINTEREST INCOME
Noninterest income	$ 1,463	$ 1,227	$ 4,407	$ 3,720

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Statement of Comprehensive Income [Abstract]
NET INCOME		$ 15,446	$ 16,011	$ 47,241	$ 46,142
Other comprehensive (loss) income:
Net unrealized holding losses on available for sale securities		(83,980)	(2,754)	(301,874)	(8,990)
Reclassification adjustment for losses (gains) realized in income	[1]	5	(464)	36	(848)
Net unrealized holding losses		(83,975)	(3,218)	(301,838)	(9,838)
Income tax effect		17,635	674	63,386	2,066
Unrealized holding losses, net of reclassification and tax		(66,340)	(2,544)	(238,452)	(7,772)
Change in funded status of post-retirement plan, net of tax		(2)	0	(5)	0
Other comprehensive loss, net of tax		(66,342)	(2,544)	(238,457)	(7,772)
TOTAL COMPREHENSIVE (LOSS) INCOME		$ (50,896)	$ 13,467	$ (191,216)	$ 38,370

[1] Pre-tax reclassification adjustments relating to available-for-sale securities are reported in security gains and the tax impact is included in income tax expense on the consolidated statements of income.

XML

Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Cumulative Impact of ASU 2016-13 Adoption (CECL)	Common Stock	Retained Earnings	Retained Earnings Cumulative Impact of ASU 2016-13 Adoption (CECL)	Accumulated Other Comprehensive Income (Loss)	Treasury Stock
Balance at Dec. 31, 2020	$ 350,097	$ (1,936)	$ 208,763	$ 138,073	$ (1,936)	$ 22,032	$ (18,771)
Net income	14,556			14,556
Other comprehensive income (loss)	(12,100)					(12,100)
Stock based compensation expense	330		330
Vesting of Long Term Incentive Plan	0		(894)				894
Share forfeitures for taxes	(366)						(366)
Dividends paid	(3,110)			(3,110)
Treasury share purchases	(116)						(116)
Balance at Mar. 31, 2021	347,355		208,199	147,583		9,932	(18,359)
Balance at Dec. 31, 2020	350,097	$ (1,936)	208,763	138,073	$ (1,936)	22,032	(18,771)
Net income	46,142
Other comprehensive income (loss)	(7,772)
Balance at Sep. 30, 2021	377,524		208,539	172,939		14,260	(18,214)
Balance at Mar. 31, 2021	347,355		208,199	147,583		9,932	(18,359)
Net income	15,575			15,575
Other comprehensive income (loss)	6,872					6,872
Restricted share issuance	0		(144)				144
Stock based compensation expense	257		257
Share forfeitures for taxes	(35)						(35)
Dividends paid	(3,116)			(3,116)
Balance at Jun. 30, 2021	366,908		208,312	160,042		16,804	(18,250)
Net income	16,011			16,011
Other comprehensive income (loss)	(2,544)					(2,544)
Restricted share issuance	0		(51)				51
Stock based compensation expense	278		278
Share forfeitures for taxes	(15)						(15)
Dividends paid	(3,114)			(3,114)
Balance at Sep. 30, 2021	377,524		208,539	172,939		14,260	(18,214)
Balance at Dec. 31, 2021	472,432		306,123	173,896		9,295	(16,882)
Net income	15,844			15,844
Other comprehensive income (loss)	(88,795)					(88,795)
Restricted share issuance	0		(1,030)				1,030
Stock based compensation expense	365		365
Vesting of Long Term Incentive Plan	(420)		(788)				368
Share forfeitures for taxes	(102)						(102)
Dividends paid	(5,438)			(5,438)
Balance at Mar. 31, 2022	393,886		304,670	184,302		(79,500)	(15,586)
Balance at Dec. 31, 2021	472,432		306,123	173,896		9,295	(16,882)
Net income	47,241
Other comprehensive income (loss)	(238,457)
Balance at Sep. 30, 2022	265,619		304,838	204,808		(229,162)	(14,865)
Balance at Mar. 31, 2022	393,886		304,670	184,302		(79,500)	(15,586)
Net income	15,951			15,951
Other comprehensive income (loss)	(83,320)					(83,320)
Restricted share issuance	0		(362)				362
Stock based compensation expense	438		438
Vesting of Long Term Incentive Plan	(39)		(39)
Share forfeitures for taxes	(23)						(23)
Dividends paid	(5,444)			(5,444)
Balance at Jun. 30, 2022	321,449		304,707	194,809		(162,820)	(15,247)
Net income	15,446			15,446
Other comprehensive income (loss)	(66,342)					(66,342)
Restricted share issuance	0		(424)				424
Restricted share forfeitures	0		42				(42)
Stock based compensation expense	513		513
Dividends paid	(5,447)			(5,447)
Balance at Sep. 30, 2022	$ 265,619		$ 304,838	$ 204,808		$ (229,162)	$ (14,865)

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Consolidated Statements of Stockholders' Equity (Parenthetical) Unaudited - $ / shares	3 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021
Retained Earnings
Cash dividend declared per share of common stock	$ 0.16	$ 0.16	$ 0.16	$ 0.11	$ 0.11	$ 0.11

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 47,241	$ 46,142
Adjustments to reconcile net income to net cash from operating activities:
Credit for credit losses	(15)	(472)
Provision (credit) for unfunded loans	721	(1)
Depreciation and amortization	3,475	2,429
Net amortization of securities	3,846	2,254
Available for sale security losses (gains)	36	(848)
Realized losses (gains) on equity securities	52	(141)
Loss on premises and equipment sales and disposals, net	20	52
Stock compensation expense	1,316	865
Earnings on bank owned life insurance	(1,220)	(884)
Income recognized from death benefit on bank owned life insurance	0	(40)
Origination of loans held for sale	(86,710)	(236,319)
Proceeds from loans held for sale	90,794	244,876
Net gains on sale of loans	(1,820)	(6,557)
Net change in other assets and liabilities	4,387	(11,399)
NET CASH FROM OPERATING ACTIVITIES	62,123	39,957
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and repayments of securities available for sale	63,340	48,681
Proceeds from sales of securities available for sale	2,624	35,176
Purchases of securities available for sale	(239,140)	(702,871)
Proceeds from sales of equity securities	60	87
Purchase of equity securities	(65)	(48)
Proceeds from maturities and repayments of SBIC funds	2,052	1,103
Purchases of SBIC funds	(1,911)	(784)
Proceeds from redemption of regulatory stock	1,705	2,145
Purchase of regulatory stock	(5,833)	(22)
Loan originations and payments, net	(71,709)	185,293
Proceeds from BOLI death benefit	0	352
Proceeds from land and building sales	1,067	0
Additions to premises and equipment	(4,757)	(460)
Net cash paid in business combinations	(1,033)	0
NET CASH FROM INVESTING ACTIVITIES	(253,600)	(431,348)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits	19,916	255,535
Net change in short-term borrowings	155,000	(2,521)
Repayment of long-term borrowings	0	(26,980)
Cash dividends paid	(16,248)	(9,340)
Repurchase of common shares	0	(116)
NET CASH FROM FINANCING ACTIVITIES	158,668	216,578
NET CHANGE IN CASH AND CASH EQUIVALENTS	(32,809)	(174,813)
Beginning cash and cash equivalents	112,790	254,621
Ending cash and cash equivalents	79,981	79,808
Supplemental cash flow information:
Interest paid	8,799	6,782
Supplemental noncash disclosures:
Issuance of stock awards	$ 2,184	$ 1,089

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Principles of Consolidation:

Farmers National Banc Corp. (“Company” or "Farmers") is a Financial Holding Company registered under the Bank Holding Company Act of 1956, as amended. The Company provides full banking services through its nationally chartered subsidiary, The Farmers National Bank of Canfield (“Bank”). The consolidated financial statements also include the accounts of the Bank’s subsidiaries; Farmers National Insurance, LLC (“Insurance”) and Farmers of Canfield Investment Co. (“Investments”). The Company provides trust and retirement consulting services through its subsidiary, Farmers Trust Company (“Trust”), and insurance services through the Bank’s subsidiary, Insurance. Farmers National Captive, Inc. (“Captive”) is a wholly-owned insurance subsidiary of the Company that provides property and casualty insurance coverage to the Company and its subsidiaries. The Captive pools resources with eleven similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves and to provide insurance where not currently available or economically feasible in today’s insurance market place. The consolidated financial statements include the accounts of the Company, the Bank and its subsidiaries, along with the Trust and Captive. All significant intercompany balances and transactions have been eliminated in the consolidation.

Basis of Presentation:

The unaudited condensed consolidated financial statements have been prepared in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2021 Annual Report to Shareholders included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K”). The interim consolidated financial statements include all adjustments (consisting of only normal recurring items) that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods presented. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year. Certain items included in the prior period financial statements were reclassified to conform to the current period presentation. There was no effect on net income or total stockholders’ equity.

Estimates:

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Segments:

The Company provides a broad range of financial services to individuals and companies in northeastern Ohio and western Pennsylvania. Operations are managed and financial performance is primarily aggregated and reported in two lines of business, the Bank segment and the Trust segment.

Equity:

There are 50,000,000 shares authorized and available for issuance as of September 30, 2022. Outstanding shares at September 30, 2022 were 34,059,657.

Comprehensive Income:

Comprehensive income consists of net income and other comprehensive income. Other comprehensive income consists of unrealized gains and losses on securities available for sale and changes in the funded status of the post-retirement plan, which are recognized as components of stockholders’ equity, net of tax effect.

Updates to Significant Accounting Policies:

New Accounting Standard:

On March 31, 2022, FASB issued ASU 2022-02, which eliminates the troubled debt restructuring (“TDR”), accounting model for creditors that have adopted Topic 326, Financial Instruments – Credit Losses. Due to the removal of the TDR accounting model, all loan modifications now will be accounted for under the general loan modification guidance in Subtopic 310-20. In addition, on a prospective basis, entities will be subject to new disclosure requirements covering modifications of receivables to borrowers experiencing financial difficulty. Public business entities within the scope of the Topic 326 vintage disclosure requirements also will be required to prospectively disclose current-period gross write-off information by vintage, or year of origination. For entities that have adopted Topic 326, ASU 2022-02 takes effect in reporting periods beginning after December 15, 2022. Early adoption is permitted. The Company has elected not to early adopt ASU 2022-02 at this time. The adoption of this standard is not expected to have a material effect on the Company’s operating results or financial condition.

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Business Combinations

9 Months Ended

Sep. 30, 2022

Business Combinations [Abstract]

Business Combinations

Business Combinations:

On March 23, 2022, Farmers entered into an agreement and plan of merger with Emclaire Financial (“Emclaire”), the parent company of The Farmers National Bank of Emlenton (“Emlenton”). The transaction has received Emclaire shareholder approval but is still subject to customary regulatory approvals and is expected to close in the last quarter of 2022. The transaction will create a large expansion for the Company in Pennsylvania and into the Pittsburgh market. Emclaire operates 19 branches in ten counties throughout western Pennsylvania. As of September 30, 2022, Emclaire had total assets of $1.0 billion, gross loans of $810.1 million, deposits of $926.7 million and equity of $71.0 million.

On November 1, 2021, the Company completed the merger with Cortland Bancorp (“Cortland”), the parent company of The Cortland Savings and Banking Company (“Cortland Bank”), pursuant to the Agreement and Plan of Merger, dated as of June 22, 2021, as amended by that certain Amendment to Agreement and Plan of Merger, dated October 12, 2021 (collectively, the “Merger Agreement”), by and among the Company, Cortland, and FMNB Merger Subsidiary IV, LLC, a wholly-owned subsidiary of the Company (“Merger Sub”). Pursuant to the terms of the Merger Agreement, on November 1, 2021, Cortland merged with and into Merger Sub (the “Merger”), with Merger Sub as the surviving entity in the Merger. Promptly following the consummation of the Merger, Merger Sub was dissolved and liquidated and Cortland Bank merged with and into the Bank (the “Bank Merger”), with the Bank as the surviving bank in the Bank Merger. The transaction received the approval of Cortland’s shareholders and all customary regulatory approvals. Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each common share, without par value, of Cortland issued and outstanding immediately prior to the effective time (except for certain Cortland common shares held directly by Cortland or the Company) was converted into the right to receive, without interest, $28.00 per share in cash or 1.75 shares of the Company’s common stock, subject to an overall limitation of 75% of the Cortland shares being exchanged for the Company’s shares and the remaining 25% being exchanged for cash. The Company issued 5.6 million shares of its common stock along with cash of $29.6 million, which represented a transaction value of approximately $128.5 million based on its closing stock price of $17.82 on October 31, 2021, the closing of the Merger.

In accordance with ASC 805, the Company expensed approximately $3.5 million of merger related costs during the nine month period ended September 30, 2022, in addition to $7.1 million expensed for the entire year of 2021. The Company recorded goodwill of $48.5 million as a result of the Cortland combination. Goodwill represents the future economic benefits arising from net assets acquired that are not individually identified and separately recognized and is attributable to synergies, including the reduction of personnel and overlapping contracts, expected to be derived from the Company’s strategy to enhance and expand its presence in northeast Ohio. The merger offers the Company the opportunity to increase profitability by introducing existing products and services to the acquired customer base as well as add new customers in the expanded market area. The goodwill was determined not to be deductible for income tax purposes.

The following table summarizes the consideration paid for Cortland and the amounts of the assets acquired and liabilities assumed on the closing date of the acquisition.

(In Thousands of Dollars)
Consideration
Cash	$	29,618
Stock		98,921
Fair value of total consideration transferred	$	128,539
Fair value of assets acquired
Cash and cash equivalents	$	113,391
Securities available for sale		130,574
Other investments		16,092
Loans		482,168
Premises and equipment		12,644
Bank owned life insurance		21,547
Core deposit intangible		5,886
Current and deferred taxes		3,135
Other assets		7,805
Total assets acquired		793,242
Fair value of liabilities assumed
Deposits		695,274
Short-term borrowings		4,246
Long-term borrowings		4,262
Accrued interest payable and other liabilities		9,386
Total liabilities		713,168
Net assets acquired	$	80,074
Goodwill created		48,465
Total net assets acquired	$	128,539

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Securities

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Securities

Securities:

The following table summarizes the amortized cost and fair value of the available for sale investment securities portfolio at September 30, 2022 and December 31, 2021 and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive income (loss):

			Gross		Gross
	Amortized		Unrealized		Unrealized
(In Thousands of Dollars)	Cost		Gains		Losses			Fair Value
September 30, 2022
U.S. Treasury and U.S. government sponsored entities	$	149,549	$	0	$	(21,733	)	$	127,816
State and political subdivisions		686,456		100		(137,528	)		549,028
Corporate bonds		4,386		0		(303	)		4,083
Mortgage-backed securities - residential		687,352		56		(126,126	)		561,282
Collateralized mortgage obligations - residential		53,390		0		(4,178	)		49,212
Small Business Administration		4,120		0		(408	)		3,712
Totals	$	1,585,253	$	156	$	(290,276	)	$	1,295,133

			Gross		Gross
	Amortized		Unrealized		Unrealized
(In Thousands of Dollars)	Cost		Gains		Losses			Fair Value
December 31, 2021
U.S. Treasury and U.S. government sponsored entities	$	93,137	$	32	$	(2,338	)	$	90,831
State and political subdivisions		636,724		23,296		(1,205	)		658,815
Corporate bonds		4,009		50		(29	)		4,030
Mortgage-backed securities - residential		663,405		1,875		(10,094	)		655,186
Collateralized mortgage obligations - residential		13,303		153		(71	)		13,385
Small Business Administration		5,381		49		0			5,430
Totals	$	1,415,959	$	25,455	$	(13,737	)	$	1,427,677

Proceeds from the sale of portfolio securities were $1.0 million and $2.6 million, respectively, for the three and nine month periods ended September 30, 2022. Gross losses of $5 thousand and $36 thousand, respectively, were realized on these sales for the three and nine month periods ended September 30, 2022. Realized losses on equity securities of $12 thousand and $52 thousand were recognized in the income statement during the three and nine month periods as of September 30, 2022, respectively.

Proceeds from the sale of portfolio securities were $8.2 million and $35.2 million during the three and nine month periods ended September 30, 2021, respectively. Gross gains of $458 thousand and $1.4 million along with gross losses of $1 thousand and $515 thousand were realized on these sales during the three and nine month periods ended September 30, 2021, respectively. Realized gains on equity securities of $5 thousand and $141 thousand were recognized in the income statement during the three and nine month periods as of September 30, 2021, respectively.

The amortized cost and fair value of the debt securities portfolio are shown in the table below by expected maturity. Expected maturities may differ from contractual maturities if issuers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

	September 30, 2022
(In Thousands of Dollars)	Amortized Cost		Fair Value
Maturity
Within one year	$	776	$	770
One to five years		30,842		29,791
Five to ten years		178,232		154,700
Beyond ten years		630,541		495,666
Mortgage-backed, collateralized mortgage obligations and Small Business Administration securities		744,862		614,206
Total	$	1,585,253	$	1,295,133

The following table summarizes the available for sale investment securities with unrealized losses at September 30, 2022 and December 31, 2021, aggregated by major security type and length of time in a continuous unrealized loss position.

	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(In Thousands of Dollars)	Value		Loss			Value		Loss			Value		Loss
September 30, 2022
U.S. Treasury and U.S. government sponsored entities	$	56,522	$	(6,430	)	$	71,294	$	(15,303	)	$	127,816	$	(21,733	)
State and political subdivisions		485,654		(121,150	)		42,427		(16,378	)		528,081		(137,528	)
Corporate bonds		3,292		(145	)		791		(158	)		4,083		(303	)
Mortgage-backed securities - residential		183,962		(32,556	)		375,623		(93,570	)		559,585		(126,126	)
Collateralized mortgage obligations - residential		45,785		(3,715	)		3,427		(463	)		49,212		(4,178	)
Small Business Administration		3,712		(408	)		0		0			3,712		(408	)
Total temporarily impaired	$	778,927	$	(164,404	)	$	493,562	$	(125,872	)	$	1,272,489	$	(290,276	)

	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(In Thousands of Dollars)	Value		Loss			Value		Loss			Value		Loss
December 31, 2021
U.S. Treasury and U.S. government sponsored entities	$	81,236	$	(1,960	)	$	8,271	$	(378	)	$	89,507	$	(2,338	)
State and political subdivisions		103,651		(1,020	)		10,020		(185	)		113,671		(1,205	)
Corporate bonds		418		(2	)		715		(27	)		1,133		(29	)
Mortgage-backed securities - residential		525,792		(7,872	)		55,569		(2,222	)		581,361		(10,094	)
Collateralized mortgage obligations - residential		7,270		(71	)		0		0			7,270		(71	)
Total temporarily impaired	$	718,367	$	(10,925	)	$	74,575	$	(2,812	)	$	792,942	$	(13,737	)

Allowance for Credit Losses

Management evaluates securities available for sale for credit losses. During the evaluation process, management considers the extent to which the fair value has been less than cost, the financial condition and near term prospects of the issuer, and the intent and ability of the Company to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value.

If the Company determines that a credit loss exists, the credit portion of the allowance will be measured using a discounted cash flow analysis using the effective interest rate as of the security’s purchase date. As of September 30, 2022, the Company’s security portfolio consisted of 886 securities, 857 of which were in an unrealized loss position. The majority of the unrealized losses on the Company’s securities are related to its holdings of mortgage-backed securities and state and political subdivisions. The Company does not consider its available for sale ("AFS") securities with unrealized losses to be attributable to credit-related factors, as the unrealized losses have occurred as a result of changes in noncredit related factors such as changes in interest rates, market spreads and market conditions subsequent to purchase, not credit deterioration. As of September 30, 2022 the Company has not recorded an allowance for credit losses on AFS securities.

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Loans

9 Months Ended

Sep. 30, 2022

Receivables [Abstract]

Loans

Loans:

Loan balances were as follows:

(In Thousands of Dollars)	September 30, 2022			December 31, 2021
Commercial real estate
Owner occupied	$	331,804		$	340,369
Non-owner occupied		568,277			533,240
Farmland		184,958			177,706
Other		128,403			138,282
Commercial
Commercial and industrial		296,932			313,836
Agricultural		54,123			54,659
Residential real estate
1-4 family residential		474,014			453,635
Home equity lines of credit		132,267			127,433
Consumer
Indirect		197,206			159,006
Direct		17,020			21,121
Other		8,480			9,395
Total loans	$	2,393,484		$	2,328,682
Net deferred loan costs		6,497			2,400
Allowance for credit losses		(27,282	)		(29,386	)
Net loans	$	2,372,699		$	2,301,696

Allowance for credit loss activity

The following tables present the activity in the allowance for credit losses by portfolio segment for the three and nine month periods ended September 30, 2022 and 2021:

Three Months Ended September 30, 2022

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	14,859		$	3,893		$	4,915		$	3,787		$	27,454
(Credit) Provision for credit losses		(47	)		260			2			218			433
Loans charged off		0			(473	)		(9	)		(301	)		(783	)
Recoveries		1			2			41			134			178
Total ending allowance balance	$	14,813		$	3,682		$	4,949		$	3,838		$	27,282

Nine Months Ended September 30, 2022

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	15,879		$	4,949		$	4,870		$	3,688		$	29,386
(Credit) Provision for credit losses		(1,068	)		601			53			399			(15	)
Loans charged off		0			(1,878	)		(43	)		(630	)		(2,551	)
Recoveries		2			10			69			381			462
Total ending allowance balance	$	14,813		$	3,682		$	4,949		$	3,838		$	27,282

Three Months Ended September 30, 2021

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	12,290		$	4,600		$	4,130		$	3,786		$	24,806
Adjustment related to reserve for unfunded loan reclass		(245	)		(104	)		(73	)		(15	)		(437	)
(Credit) Provision for credit losses		(454	)		(655	)		75			87			(947	)
Loans charged off		(31	)		(126	)		(55	)		(199	)		(411	)
Recoveries		1			15			41			68			125
Total ending allowance balance	$	11,561		$	3,730		$	4,118		$	3,727		$	23,136

Nine Months Ended September 30, 2021

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	10,824		$	5,073		$	3,643		$	2,604		$	22,144
Adjustment related to reserve for unfunded loan reclass		(245	)		(104	)		(73	)		(15	)		(437	)
Impact of CECL adoption		(2,076	)		429			237			3,860			2,450
(Credit) Provision for credit losses		3,077			(1,668	)		411			(2,292	)		(472	)
Loans charged off		(51	)		(198	)		(221	)		(727	)		(1,197	)
Recoveries		32			198			121			297			648
Total ending allowance balance	$	11,561		$	3,730		$	4,118		$	3,727		$	23,136

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

	September 30, 2022				December 31, 2021
(In Thousands of Dollars)	Nonaccrual		Loans Past Due 90 Days or More Still Accruing		Nonaccrual		Loans Past Due 90 Days or More Still Accruing
Commercial real estate
Owner occupied	$	1,049	$	0	$	433	$	0
Non-owner occupied		3,398		0		2,511		0
Farmland		42		0		274		0
Other		39		0		60		0
Commercial
Commercial and industrial		3,392		0		7,190		54
Agricultural		29		0		40		0
Residential real estate
1-4 family residential		2,859		735		3,363		459
Home equity lines of credit		851		25		917		36
Consumer
Indirect		311		41		455		123
Direct		187		18		227		53
Other		0		0		0		0
Total loans	$	12,157	$	819	$	15,470	$	725

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. Note that loans on a modification to defer payments under the CARES Act are included in loans not past due for the period ending December 31, 2021. There were no loans on deferred payments at September 30, 2022.

(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
September 30, 2022
Commercial real estate
Owner occupied	$	0	$	0	$	1,049	$	1,049	$	330,415	$	331,464
Non-owner occupied		28		0		3,398		3,426		564,205		567,631
Farmland		127		41		42		210		184,458		184,668
Other		137		0		39		176		128,009		128,185
Commercial
Commercial and industrial		260		471		3,392		4,123		293,299		297,422
Agricultural		81		59		29		169		54,350		54,519
Residential real estate
1-4 family residential		3,331		767		3,594		7,692		465,795		473,487
Home equity lines of credit		246		71		876		1,193		131,103		132,296
Consumer
Indirect		734		161		352		1,247		203,520		204,767
Direct		97		40		205		342		16,720		17,062
Other		4		4		0		8		8,472		8,480
Total loans	$	5,045	$	1,614	$	12,976	$	19,635	$	2,380,346	$	2,399,981

(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
December 31, 2021
Commercial real estate
Owner occupied	$	70	$	591	$	433	$	1,094	$	338,880	$	339,974
Non-owner occupied		394		311		2,511		3,216		529,490		532,706
Farmland		0		0		274		274		177,143		177,417
Other		56		0		60		116		137,878		137,994
Commercial
Commercial and industrial		256		100		7,244		7,600		304,932		312,532
Agricultural		100		28		40		168		54,706		54,874
Residential real estate
1-4 family residential		4,452		1,077		3,822		9,351		443,441		452,792
Home equity lines of credit		80		12		953		1,045		126,405		127,450
Consumer
Indirect		795		275		578		1,648		163,112		164,760
Direct		203		91		280		574		20,614		21,188
Other		0		0		0		0		9,395		9,395
Total loans	$	6,406	$	2,485	$	16,195	$	25,086	$	2,305,996	$	2,331,082

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Troubled Debt Restructurings

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Troubled Debt Restructurings

Troubled Debt Restructurings

Total troubled debt restructurings were $3.8 million and $3.9 million at September 30, 2022, and December 31, 2021, respectively. The Company has allocated $108 thousand and $109 thousand of specific reserves to loans whose terms have been modified in troubled debt restructurings at September 30, 2022, and December 31, 2021, respectively. There were no commitments to lend additional amounts to borrowers with loans that were classified as troubled debt restructurings at September 30, 2022, and at December 31, 2021.

During the three and nine month periods ended September 30, 2022 and 2021, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a deferral of principal, interest and/or escrow; a forgiveness of principal and/or interest; or a legal concession. During the three month period ended September 30, 2022, the terms of such loans included a reduction of the stated interest rate of the loans in the range from 1.000% and 3.750% and an extension of maturity date in the range of 5 to 120 months. During the same three month period in 2021, the terms of such loans included a reduction of the stated interest rate of the loan of 0.250% and an extension of the maturity date of 193 months. During the nine month period ended September 30, 2022, the terms of such loans included a reduction of the stated interest rate of the loans in the range from 1.000% and 3.750% and an extension of the maturity date in the range of 5 to 183 months. During the same nine month period in 2021, the terms of such loans included a reduction of the stated interest rate of the loans in the range of 0.250% and 4.075% and extensions of the maturity dates on these and other troubled debt restructurings in the range of 22 days to 361 months.

The following table presents loans by class modified as troubled debt restructurings that occurred during the three and nine month periods ended September 30, 2022 and 2021:

			Pre- Modification		Post- Modification
Three Months Ended September 30, 2022	Number of		Outstanding Recorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Commercial		1	$	15	$	11
Residential real estate
1-4 family residential		4		200		205
Home equity lines of credit		2		19		19
Consumer
Indirect		3		7		7
Direct		2		86		86
Total loans		12	$	327	$	328

			Pre- Modification		Post- Modification
Nine Months Ended September 30, 2022	Number of		Outstanding Recorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Commercial real estate
Owner occupied		1	$	140	$	140
Commercial		1		15		11
Residential real estate
1-4 family residential		8		392		402
Home equity lines of credit		3		33		33
Consumer
Indirect		7		41		41
Direct		2		86		86
Total loans		22	$	707	$	713

			Pre- Modification		Post- Modification
Three Months Ended September 30, 2021	Number of		Outstanding Recorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Residential real estate
1-4 family residential		2	$	215	$	233
Home equity lines of credit		1		103		103
Consumer
Indirect		5		30		30
Direct		1		10		10
Total loans		9	$	358	$	376

			Pre- Modification		Post- Modification
Nine Months Ended September 30, 2021	Number of		Outstanding Recorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Commercial		4	$	22	$	22
Residential real estate
1-4 family residential		6		426		414
Home equity lines of credit		5		201		201
Consumer
Indirect		12		121		121
Other		3		16		16
Total loans		30	$	786	$	774

There were $36 thousand in charge offs and a $36 thousand increase to the provision for credit losses during the three and nine month periods ended September 30, 2022, respectively, as a result of the outstanding troubled debt restructurings. There were $15 thousand and $91 thousand in charge offs during the three and nine month periods ended September 30, 2021, respectively. There was a $15 thousand and $90 thousand increase to the provision for credit losses during the three and nine month periods ended September 30, 2021, respectively, as a result of outstanding troubled debt restructurings.

There were three residential real estate loans for which there was a payment default within twelve months following the modification of the troubled debt restructuring during the three and nine month periods ended September 30, 2022. Two of the loans were past due at September 30, 2022. There was no provision recorded as a result of the defaults during 2022. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

There were two commercial loans, one residential loan, and one indirect loan for which there was a payment default within twelve months following the modification of the troubled debt restructuring during the three and nine month periods ended September 30, 2021. There was one commercial loan past due at September 30, 2021. There was no provision recorded as a result of the defaults during 2021. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

The Company offered three month deferrals upon request by the borrowers. For those borrowers in industries that were greatly impacted by COVID-19, additional deferrals were considered and granted beyond the initial three month period throughout 2021. The range of deferred months for subsequent requests were three to twelve months. The decline in deferred loans and balances was due to borrowers not requesting additional deferments and most continued to pay under the original terms of their loan. As of September 30, 2022 there are no longer borrowers on deferment due to COVID-19 related issues.

Farmers is also a preferred U.S. Small Business Administration (“SBA”) lender and dedicated significant additional staff and other resources to help our customers complete and submit their applications and supporting documentation for loans offered under the Paycheck Protection Program (“PPP”) under the CARES Act, so they could obtain SBA approval and receive funding as quickly as possible. During the period of the PPP program, the Company facilitated PPP assistance to 2,134 business customers totaling $256.4 million. The Company, on behalf of its customers, began processing borrower applications for PPP forgiveness at the beginning of September 2020. The SBA has up to ninety days to review an application for PPP forgiveness and provide a decision at the end of that review. Once forgiveness of the PPP loan has been communicated and payment is received from the SBA, the Company will record the cash received from the SBA, pay-off the loans based on the amount of forgiveness provided and accelerate the amount of net deferred loan fees/costs recognized for the portion of the PPP loans that are forgiven. As of September 30, 2022, the Company has received life to date payments from the SBA for forgiveness of loans totaling $256.4 million, or approximately 99.99% of the PPP loans originated in 2020. The Company processed $107.9 million in new loans for PPP loan funding during 2021. The Company has also received payments from the SBA for forgiveness of loans totaling $107.3 million, or approximately 99.42%, of the PPP loans originated in 2021.

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Credit Quality Indicators

9 Months Ended

Sep. 30, 2022

Risks and Uncertainties [Abstract]

Credit Quality Indicators

Credit Quality Indicators

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 establishes a risk rating at origination for all commercial loan and commercial real estate relationships. For relationships over $1 million, management monitors the loans on an ongoing basis for any changes in the borrower’s ability to service their debt. Management also affirms the risk ratings for the loans in their respective portfolios 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 of the institution’s credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

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. Substandard loans 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.

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

(In Thousands of Dollars)	Pass		Special Mention		Sub standard		Total
September 30, 2022
Commercial real estate
Owner occupied	$	325,189	$	1,218	$	5,057	$	331,464
Non-owner occupied		527,305		21,273		19,053		567,631
Farmland		182,106		0		2,562		184,668
Other		127,834		0		351		128,185
Commercial
Commercial and industrial		291,988		879		4,555		297,422
Agricultural		53,956		250		313		54,519
Total loans	$	1,508,378	$	23,620	$	31,891	$	1,563,889

(In Thousands of Dollars)	Pass		Special Mention		Sub standard		Total
December 31, 2021
Commercial real estate
Owner occupied	$	330,754	$	5,006	$	4,214	$	339,974
Non-owner occupied		495,170		19,366		18,170		532,706
Farmland		174,580		2,160		677		177,417
Other		137,063		784		147		137,994
Commercial
Commercial and industrial		301,879		1,190		9,463		312,532
Agricultural		54,394		397		83		54,874
Total loans	$	1,493,840	$	28,903	$	32,754	$	1,555,497

The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. For residential, consumer indirect and direct loan classes, the Company evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. In the 1-4 family residential real estate portfolio at September 30, 2022, other real estate owned and foreclosure properties were $0 and $33 thousand, respectively. At December 31, 2021, other real estate owned and foreclosure properties were $0 and $93 thousand, respectively.

The following tables present the recorded investment in residential, consumer indirect and direct auto loans based on payment activity as of September 30, 2022 and December 31, 2021. Nonperforming loans are loans past due 90 days or more and still accruing interest and nonaccrual loans.

	Residential Real Estate				Consumer
(In Thousands of Dollars)	1-4 Family Residential		Home Equity Lines of Credit		Indirect		Direct		Other
September 30, 2022
Performing	$	469,893	$	131,420	$	204,415	$	16,857	$	8,480
Nonperforming		3,594		876		352		205		0
Total loans	$	473,487	$	132,296	$	204,767	$	17,062	$	8,480

	Residential Real Estate				Consumer
(In Thousands of Dollars)	1-4 Family Residential		Home Equity Lines of Credit		Indirect		Direct		Other
December 31, 2021
Performing	$	448,970	$	126,497	$	164,182	$	20,908	$	9,395
Nonperforming		3,822		953		578		280		6
Total loans	$	452,792	$	127,450	$	164,760	$	21,188	$	9,401

The following table presents total loans by risk categories and year of origination.

	Term Loans Amortized Cost Basis by Origination Year
													Revolving
As of September 30, 2022	2022		2021		2020		2019		2018		Prior		Loans		Total
Commercial real estate
Risk Rating
Pass	$	140,403	$	171,271	$	131,878	$	150,987	$	103,825	$	264,766	$	17,198	$	980,328
Special mention		0		749		1,877		5,340		2,604		11,413		508		22,491
Substandard		0		0		270		2,447		0		21,077		667		24,461
Total commercial real estate loans	$	140,403	$	172,020	$	134,025	$	158,774	$	106,429	$	297,256	$	18,373	$	1,027,280
Commercial and industrial
Risk Rating
Pass	$	85,050	$	50,425	$	37,834	$	19,152	$	15,502	$	16,006	$	68,019	$	291,988
Special mention		0		333		0		116		0		1		429		879
Substandard		0		1,377		676		124		201		1,492		685		4,555
Total commercial loans	$	85,050	$	52,135	$	38,510	$	19,392	$	15,703	$	17,499	$	69,133	$	297,422
Agricultural
Risk Rating
Pass	$	39,434	$	38,169	$	45,529	$	24,802	$	24,672	$	46,716	$	16,740	$	236,062
Special mention		0		0		0		0		0		0		250		250
Substandard		0		355		236		78		0		2,076		130		2,875
Total agricultural loans	$	39,434	$	38,524	$	45,765	$	24,880	$	24,672	$	48,792	$	17,120	$	239,187
Residential real estate
Risk Rating
Pass	$	69,471	$	111,389	$	77,984	$	33,196	$	23,947	$	144,706	$	3,984	$	464,677
Special mention		0		0		71		121		77		129		0		398
Substandard		0		42		251		125		19		7,975		0		8,412
Total residential real estate loans	$	69,471	$	111,431	$	78,306	$	33,442	$	24,043	$	152,810	$	3,984	$	473,487
Home equity lines of credit
Risk Rating
Pass	$	0	$	0	$	0	$	0	$	17	$	1,532	$	128,345	$	129,894
Special mention		0		0		0		0		0		0		48		48
Substandard		0		13		137		49		64		1,990		101		2,354
Total home equity lines of credit	$	0	$	13	$	137	$	49	$	81	$	3,522	$	128,494	$	132,296
Consumer
Risk Rating
Pass	$	86,710	$	50,580	$	35,022	$	23,530	$	12,791	$	12,744	$	7,987	$	229,364
Substandard		61		138		269		177		84		216		0		945
Total consumer loans	$	86,771	$	50,718	$	35,291	$	23,707	$	12,875	$	12,960	$	7,987	$	230,309

Purchased Loans

As a result of the Cortland Merger, the Company acquired $478.2 million in loans, excluding $4.0 million of loans held for sale.

Under ASU Topic 326, when loans are purchased with evidence of more than significant deterioration of credit, they are accounted for as purchase credit deteriorated (“PCD”). PCD loans acquired in a transaction are marked to fair value and a mark on yield is recorded. In addition, an adjustment is made to the ACL for the expected loss on the acquisition date. These loans are assessed on a regular basis and subsequent adjustments to the ACL are recorded on the income statement. During 2021, the Company acquired PCD loans with a fair value of $34.3 million, credit discount of $1.3 million and a noncredit discount of $1.1 million. The outstanding balance at September 30, 2022 and related allowance on these loans is as follows:

	Loan Balance		ACL Balance
Commercial real estate
Owner Occupied	$	1,601	$	17
Non-owner Occupied		19,518		545
Other		254		18
		21,373		580
Commercial
Commercial and industrial		1,655		107
Residential real estate
1-4 family residential		470		3
Total	$	23,498	$	690

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Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Revenue from Contracts with Customers:

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

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Three Months Ended September 30, 2022
Service charges on deposit accounts	$	0	$	1,229	$	1,229
Debit card and EFT fees		0		1,463		1,463
Trust fees		2,370		0		2,370
Insurance agency commissions		0		1,136		1,136
Retirement plan consulting fees		332		0		332
Investment commissions		0		424		424
Other (outside the scope of ASC 606)		0		1,873		1,873
Total noninterest income	$	2,702	$	6,125	$	8,827

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Three Months Ended September 30, 2021
Service charges on deposit accounts	$	0	$	924	$	924
Debit card and EFT fees		0		1,227		1,227
Trust fees		2,335		0		2,335
Insurance agency commissions		0		799		799
Retirement plan consulting fees		334		0		334
Investment commissions		0		638		638
Other (outside the scope of ASC 606)		0		2,758		2,758
Total noninterest income	$	2,669	$	6,346	$	9,015

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Nine Months Ended September 30, 2022
Service charges on deposit accounts	$	0	$	3,513	$	3,513
Debit card and EFT fees		0		4,407		4,407
Trust fees		7,265		0		7,265
Insurance agency commissions		0		3,269		3,269
Retirement plan consulting fees		1,052		0		1,052
Investment commissions		0		1,675		1,675
Other (outside the scope of ASC 606)		8,375		6,446		14,821
Total noninterest income	$	16,692	$	19,310	$	36,002

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Nine Months Ended September 30, 2021
Service charges on deposit accounts	$	0	$	2,522	$	2,522
Debit card and EFT fees		0		3,720		3,720
Trust fees		6,930		0		6,930
Insurance agency commissions		0		2,750		2,750
Retirement plan consulting fees		1,043		0		1,043
Investment commissions		0		1,665		1,665
Other (outside the scope of ASC 606)		0		10,025		10,025
Total noninterest income	$	7,973	$	20,682	$	28,655

A description of the Company’s revenue streams under ASC 606 follows:

Service charges on deposit accounts – The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Management reviewed the deposit account agreements, and determined that the agreements can be terminated at any time by either the Bank or the account holder. Transaction fees, such as balance transfers, wires and overdraft charges are settled the day the performance obligation is satisfied. The Bank’s monthly service charges and maintenance fees are for services provided to the customer on a monthly basis and are considered a series of services that have the same pattern of transfer each month. The review of service charges assessed on deposit accounts included the amount of variable consideration that is a part of the monthly charges. It was found that the waiver of service charges due to insufficient funds and dormant account fees is immaterial and would not require a change in the accounting treatment for these fees under the new revenue standards.

Debit Card Interchange Fees – Customers and the Bank have an account agreement and maintain deposit balances with the Bank. Customers use a bank issued debit card to purchase goods and services, and the Bank earns interchange fees on those transactions, typically a percentage of the sale amount of the transaction. The Bank records the amount due when it receives the settlement from the payment network. Payments from the payment network are received and recorded into income on a daily basis. There are no contingent debit card interchange fees recorded by the Company that could be subject to a clawback in future periods.

Trust fees – Services provided to Trust customers are a series of distinct services that have the same pattern of transfer each month. Fees for trust accounts are billed and drafted from trust accounts monthly. The Company records these fees on the income statement on a monthly basis. Fees are assessed based on the total investable assets of the customer’s trust account. A signed contract between the Company and the customer is maintained for all customer trust accounts with payment terms identified. It is probable that the fees will be collectible as funds being managed are accessible by the asset manager. Past history of trust fee income recorded by the Company indicates that it is highly unlikely that a significant reversal could occur. There are no contingent incentive fees recorded by the Company that could be subject to a clawback in future periods.

Insurance Agency Commissions – Insurance agency commissions are received from insurance carriers for the agency’s share of commissions from customer premium payments. These commissions are recorded into income when checks are received from the insurance carriers, and there is no contingent portion associated with these commission checks. There may be a short time-lag in recording revenue when cash is received instead of recording the revenue when the policy is signed by the customer, but the time lag is insignificant and does not impact the revenue recognition process.

Insurance also receives incentive checks from the insurance carriers for achieving specified levels of production with particular carriers. These amounts are recorded into income when a check is received, and there are no contingent amounts associated with these payments that may be clawed back by the carrier in the future. Similar to the monthly commissions explained in the preceding paragraph, there may be a short time-lag in recording incentive revenue on a cash basis as opposed to estimating the amount of incentive revenue expected to be earned, this does not materially impact the recognition of Insurance revenue. If there were any amounts that would need to be refunded for one specific Insurance customer, management believes the reversal would not be significant.

Other potential situations surrounding the recognition of Insurance revenue include the estimating potential refunds due to the likely cancellation of a percentage of customers cancelling their policies and recording revenue at the time of policy renewals. Management concluded that since Insurance agency commissions represent only 2.3% of the Company’s total revenue, adjusting the current practice of recording insurance revenue for these situations would not have a material impact on the reporting of total revenue.

Retirement Plan Consulting Fees – Revenue is recognized based on the level of work performed for the client. Any payments that are received for work to be performed in the future are recorded in a deferred revenue account, and recorded into income when the fees are earned. Retirement plan consulting fees represent only 0.8% of the Company’s total revenue, and therefore management has concluded that any adjustment of revenue for one particular customer for a refund or any other reason would be insignificant and would not materially impact the Company’s total revenue.

Investment Commissions – Investment commissions are earned through the sales of non-deposit investment products to customers of the Company. The sales are conducted through a third-party broker-dealer. When the commissions are received and recorded into income on the Bank’s income statement, there is no contingent portion that may need to be refunded back to the third party broker dealer. Investment commissions represent only 1.2% of the Company’s total revenue, and therefore management has concluded that any adjustment of revenue for a particular customer for a refund or any other reason would be insignificant and would not materially impact the Company’s total revenue.

Other – Income items included in “Other” are Bank owned life insurance income, security gains, net gains on the sale of loans and other operating income. There is also a one-time legal settlement of $8.4 million for the nine month period ended September 30, 2022. Any amounts within the scope of ASC 606 are deemed immaterial.

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Fair Value

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value

Fair Value:

Fair value is the exchange price that would be received for an asset, or paid to transfer a liability (exit price), in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. 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 reporting entity’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 the fair value of each type of financial instrument:

Investment Securities: The Company uses a third party service to estimate fair value on available for sale securities on a monthly basis. The Company’s service provider is considered a leading evaluation pricing service for U.S. domestic fixed income securities and values securities using exit pricing requirements. They subscribe to multiple third-party pricing vendors, and supplement that information with matrix pricing methods. The fair values for investment securities, which consist of equity securities that are recorded at fair market value to comply with exit pricing, are determined by quoted market prices in active markets, if available (Level 1). The equity securities change in fair market value is recorded in the income statements. For securities where quoted prices are not available, fair values are calculated based on quoted prices for similar assets in active markets, quoted prices for similar assets in markets that are not active or inputs other than quoted prices, which provide a reasonable basis for fair value determination. Such inputs may include interest rates and yield curves, volatilities, prepayment speeds, credit risks and default rates. Inputs used are derived principally from observable market data (Level 2). 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). The fair values of Level 3 investment securities are determined by using unobservable inputs to measure fair value of assets for which there is little, if any, market activity at the measurement date, using reasonable inputs and assumptions based on the best information at the time, to the extent that inputs are available without undue cost and effort. For the period ended September 30, 2022 and for the year ended December 31, 2021, the fair value of Level 3 investment securities was immaterial.

Derivative Instruments: The fair values of derivative instruments are based on valuation models using observable market data as of the measurement date (Level 2).

Collateral Dependent Loans: Fair value estimates of collateral dependent loans that are individually reviewed are based on the fair value of the collateral, less estimated costs to sell. Non-collateral dependent loans are valued based on discounted cash flows. Loans carried at fair value generally receive specific allocations of the allowance for credit losses in the current period and allowance for loan losses in prior periods. For collateral dependent loans, fair value is commonly 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. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result 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. These loans are evaluated on a quarterly basis and adjusted accordingly.

Other Real Estate Owned: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair values are commonly based on recent real estate appraisals. These appraisals may use a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers (for commercial and commercial real estate properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the Appraisal Department reviews 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. On an annual basis, the Company compares the actual selling price of collateral that has been sold to the most recent appraised value to determine what adjustments should be made to appraisals to arrive at fair value.

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

			Fair Value Measurements at September 30, 2022 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government sponsored entities	$	127,816	$	0	$	127,816	$	0
State and political subdivisions		549,028		0		549,028		0
Corporate bonds		4,083		0		4,083		0
Mortgage-backed securities-residential		561,282		0		561,280		2
Collateralized mortgage obligations		49,212		0		49,212		0
Small Business Administration		3,712		0		3,712		0
Equity securities
Equity securities at fair value		181		181		0		0
Other investments measured at net asset value		14,581	n/a		n/a		n/a
Total investment securities	$	1,309,895	$	181	$	1,295,131	$	2
Interest rate swaps	$	5,805	$	0	$	5,805	$	0
Financial Liabilities
Interest rate swaps	$	5,805	$	0	$	5,805	$	0
Mortgage banking derivative - liability	$	203	$	0	$	203	$	0

			Fair Value Measurements at December 31, 2021 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government sponsored entities	$	90,831	$	0	$	90,831	$	0
State and political subdivisions		658,815		0		658,815		0
Corporate bonds		4,030		0		4,030		0
Mortgage-backed securities-residential		655,186		0		655,183		3
Collateralized mortgage obligations		13,385		0		13,385		0
Small Business Administration		5,430		0		5,430		0
Equity securities
Equity securities at fair value		228		228		0		0
Other investments measured at net asset value		14,721	n/a		n/a		n/a
Total investment securities	$	1,442,626	$	228	$	1,427,674	$	3
Interest rate swaps	$	4,261	$	0	$	4,261	$	0
Financial Liabilities
Interest rate swaps	$	4,261	$	0	$	4,261	$	0

There were no significant transfers between Level 1 and Level 2 during the three and nine month periods ended September 30, 2022 and 2021.

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Investment Securities Available-for-sale (Level 3)
	Three Months ended September 30,				Nine Months ended September 30,
(In Thousands of Dollars)	2022		2021		2022			2021
Beginning Balance	$	2	$	3	$	3		$	4
Transfers from level 2		0		0		0			0
Repayments, calls and maturities		0		0		(1	)		(1	)
Ending Balance	$	2	$	3	$	2		$	3

Assets measured at fair value on a non-recurring basis are summarized below:

			Fair Value Measurements at September 30, 2022 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Individually evaluated loans
Commercial real estate
Non-owner occupied	$	906	$	0	$	0	$	906
1–4 family residential		56		0		0		56

			Fair Value Measurements at December 31, 2021 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Individually Evaluated loans
Commercial	$	1,654	$	0	$	0	$	1,654
1–4 family residential		82		0		0		82

Collateral dependent loans were individually evaluated under ASC 326 for the periods ending September 30, 2022 and December 31, 2021. Collateral dependent loans had a principal balance of $1.2 million with a valuation allowance of $214 thousand at September 30, 2022. Collateral dependent loans had a principal balance of $3.2 million with a valuation allowance of $1.5 million at December 31, 2021. Excluded from the above tables at September 30, 2022 and December 31, 2021, are $846 thousand and $792 thousand of loans classified as troubled debt restructurings and measured using the present value of cash flows, which is not considered an exit price.

Collateral dependent commercial real estate loans, both owner-occupied and non-owner occupied are valued by independent external appraisals. These external appraisals are prepared using the sales comparison approach and income approach valuation techniques. Management makes subsequent unobservable adjustments to the collateral dependent loan appraisals. Collateral dependent loans other than commercial real estate and other real estate owned are not considered material.

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the periods ended September 30, 2022 and December 31, 2021:

September 30, 2022	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually evaluated loans
Commercial real estate	$	906	Sales Comparison	Adjustment for differences between comparable sales	(6.13%) - 17.37% .20%
Residential		56	Sales comparison	Adjustment for differences between comparable sales	(13.77%) - (5.68%) (13.77%)

December 31, 2021	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually evaluated loans
Commercial	$	1,654	Sales comparison	Adjustment for differences between comparable sales	(40.24%) - 56.83% (12.43%)
Residential		82	Sales comparison	Adjustment for differences between comparable sales	(3.84%) - 3.22% (0.12%)

The carrying amounts and estimated fair values of financial instruments not previously disclosed at September 30, 2022 and December 31, 2021 are as follows:

			Fair Value Measurements at September 30, 2022 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	79,981	$	20,814	$	59,167	$	0	$	79,981
Regulatory stock		19,637	n/a		n/a		n/a		n/a
Loans held for sale		2,142		0		2,142		0		2,142
Loans, net		2,372,699		0		0		2,309,191		2,309,191
Financial liabilities
Deposits		3,567,151		3,187,580		362,980		0		3,550,560
Short-term borrowings		155,000		0		155,000		0		155,000
Long-term borrowings		88,098		0		73,109		0		73,109

			Fair Value Measurements at December 31, 2021 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	112,790	$	29,150	$	83,640	$	0	$	112,790
Regulatory stock		15,510	n/a		n/a		n/a		n/a
Loans held for sale		4,545		0		4,681		0		4,681
Loans, net		2,301,696		0		0		2,285,554		2,285,554
Financial liabilities
Deposits		3,547,235		3,158,967		384,263		0		3,543,230
Long-term borrowings		87,758		0		92,433		0		92,433

The methods and assumptions used to estimate fair value, not previously described, are described as follows:

Cash and Cash Equivalents: The carrying amounts of cash and other non-interest bearing short-term instruments approximate fair values and are classified as Level 1. Federal funds sold and other interest bearing cash deposits are classified as Level 2.

Regulatory Stock: It is not practical to determine the fair value of regulatory stock due to restrictions placed on its transferability.

Loans: Fair values of loans, excluding loans held for sale, are estimated as follows: The Company uses a third party firm that uses cash flow analysis and current market interest rates along with adjustments for credit, liquidity and option risk to conform to the ASU 2016-01 exit price requirement. Loans in the tables above consist of impaired credits held for investment. Fair value for collateral dependent loans is based upon appraised values adjusted for trends observed in the market, less estimated cost to sell. The cash flow method is used for estimating fair value for noncollateral dependent loans. A valuation allowance was recorded for the excess of the loan’s recorded investment over the amounts determined by the collateral value method. This valuation is a component of the allowance for credit losses. The Company considers these fair values Level 3.

Loans held for sale: The fair value of loans held for sale is estimated based upon binding contracts and quotes from third party investors resulting in a Level 2 classification.

Deposits: The fair values disclosed for demand deposits – interest and non-interest checking, passbook savings, and money market accounts – are, by definition, equal to the amount payable on demand at the reporting date resulting in a Level 1 classification. The carrying amounts of variable rate certificates of deposit approximate their fair values at the reporting date resulting in a Level 2 classification. Fair value for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

Short-term Borrowings: The carrying amounts of federal funds purchased, borrowings under repurchase agreements, and other short-term borrowings, generally maturing within ninety days, approximate their fair values resulting in a Level 2 classification.

Long-term Borrowings: The fair values of the Company’s long-term borrowings are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

Off-balance Sheet Instruments: The fair value of commitments is not considered material.

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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets:

Goodwill associated with the Company’s acquisition of Cortland and other acquisitions totaled $94.6 million at September 30, 2022 and $94.2 million at December 31, 2021. Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value, which is determined through an impairment test. Management performs goodwill impairment testing on an annual basis as of September 30. The fair value of the reporting units is determined using a combination of a discounted cash flow method and a guideline public company method. The current year impairment testing is in progress. Results of the assessment as of September 30, 2021, indicated no goodwill impairment. The Company will continue to monitor its goodwill for possible impairment.

Acquired Intangible Assets

Acquired intangible assets were as follows:

	September 30, 2022					December 31, 2021
(In Thousands of Dollars)	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer relationship intangibles	$	7,210	$	(6,755	)	$	7,210	$	(6,641	)
Non-compete contracts		457		(398	)		430		(392	)
Trade name		1,126		(391	)		520		(356	)
Core deposit intangible		12,866		(6,387	)		12,866		(5,271	)
Total	$	21,659	$	(13,931	)	$	21,026	$	(12,660	)

Aggregate amortization expense was $432 thousand and $1.3 million for the three and nine month periods ended September 30, 2022. Amortization expense was $316 thousand and $948 thousand for the three and nine month periods ended September 30, 2021.

Estimated amortization expense for each of the next five periods and thereafter:

2022 (3 months)	$	424
2023		1,247
2024		943
2025		878
2026		781
Thereafter		3,455
Total	$	7,728

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Leases

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Leases

Leases:

The Company has operating leases for branch office locations, vehicles and certain office equipment such as printers, copiers and faxes. The leases have remaining lease terms of up to 17.6 years, some of which include options to extend the lease for up to 15 years and some of which include options to terminate the lease in 7 months.

The right of use asset and lease liability were $8.5 million and $8.8 million as of September 30, 2022 and $6.4 million and $6.6 million at December 31, 2021.

Lease payments made for the three and nine month periods ended September 30, 2022, were $252 thousand and $706 thousand, while lease payments made for the three and nine month periods ended September 30, 2021, were $206 thousand and $610 thousand, respectively. Interest expense and amortization expense on finance leases for the three month period ended September 30, 2022, was $51 thousand and $202 thousand, and $127 thousand and $534 thousand for the nine month period ended September 30, 2022. Interest expense and amortization expense on finance leases for the three month period ended September 30, 2021, was $44 thousand and $124 thousand, and $116 thousand and $366 thousand for the nine month period ended September 30, 2021. The average remaining lease term for all leases was 6.83 years as of September 30, 2022 and the weighted-average discount rate was 2.81%.

Maturities of lease liabilities are as follows as of September 30, 2022:

2022 (3 months)	$	264
2023		1,060
2024		892
2025		851
2026		817
Thereafter		6,659
Total Payments		10,543
Less: Imputed Interest		(1,766	)
Total	$	8,777

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Derivative Financial Instruments

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments:

Interest Rate Swaps

The Company maintains an interest rate protection program for commercial loan customers. Under this program, the Company provides a variable rate loan while creating a fixed rate loan for the customer by the customer entering into an interest rate swap with terms that match the loan. The Company offsets its risk exposure by entering into an offsetting interest rate swap with an unaffiliated institution. The Company had interest rate swaps associated with commercial loans with a notional value of $72.9 million and fair value of $5.8 million in other assets and $5.8 million in other liabilities at September 30, 2022. At December 31, 2021 the Company had interest rate swaps associated with commercial loans with and a notional value of $86.1 million and fair value of $4.0 million in other assets and $4.0 million in other liabilities. The interest rate swaps with both the customers and third parties are not designated as hedges under FASB ASC 815 and are not marked to market through earnings. As the interest rate swaps are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by FASB ASC 820.

There were no net gains or losses for interest rate swaps for the three and nine month periods ended September 30, 2022 and 2021.

Mortgage Banking Derivatives

Commitments to fund certain mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of mortgage loans to third-party investors are considered derivatives. Effective May 2022, the Company began the practice of entering into forward commitments for the future delivery of residential mortgage loans when the interest rate lock commitments are entered into in order to economically hedge the effect of changes in interest rates resulting from its commitments to fund the loans. These mortgage banking derivatives are not designated as hedge instruments. The Company had approximately $11.6 million of interest rate lock commitments at September 30, 2022 and $25.7 million of interest rate lock commitments at December 31, 2021. There were $8.0 million of forward sales of mortgage backed securities and $600 thousand of forward commitments for the future delivery of residential mortgage loans at September 30, 2022.

The net gains and losses on derivative instruments not designated as hedging instruments are included in mortgage banking income. For the three and nine month periods ended September 30, 2022, losses of $283 thousand and $535 thousand, respectively, were included in mortgage banking income for the interest rate lock commitments. Gains of $363 thousand and $386 thousand respectively, were included in mortgage banking income for both the three and nine month periods ended September 30, 2022 for the forward sales of mortgage backed securities.

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Earnings Per Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share:

The computation of basic and diluted earnings per share is shown in the following table:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Basic EPS
Net income (In thousands of dollars)	$	15,446	$	16,011	$	47,241	$	46,142
Weighted average shares outstanding		33,851,596		28,246,206		33,840,958		28,235,732
Basic earnings per share	$	0.46	$	0.57	$	1.40	$	1.63
Diluted EPS
Net income (In thousands of dollars)	$	15,446	$	16,011	$	47,241	$	46,142
Weighted average shares outstanding for basic earnings per share		33,851,596		28,246,206		33,840,958		28,235,732
Dilutive effect of restricted stock awards		80,286		114,355		84,473		102,813
Weighted average shares for diluted earnings per share		33,931,882		28,360,561		33,925,431		28,338,545
Diluted earnings per share	$	0.46	$	0.56	$	1.39	$	1.63

There were 124,492 and 188,992 restricted stock awards that were considered anti-dilutive for the three and nine month periods ended September 30, 2022, respectively. There were 17,495 and 91,247 restricted stock awards that were considered anti-dilutive for the three and nine month periods ended September 30, 2021, respectively.

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Stock Based Compensation

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Stock Based Compensation

Stock Based Compensation:

In April of 2022, the Company, with the approval of shareholders, created the 2022 Equity Incentive Plan (the “2022 Plan”). The 2022 Plan permits the award of up to one million shares to the Company’s directors and employees to attract and retain exceptional personnel, motivate performance and, most importantly, to help align the interests of the Company’s executives with those of the Company’s shareholders. The 2022 Plan has replaced the 2017 Plan. There were 56,500 service time based share awards granted under the 2022 Plan, and 75,768 service time based share awards and 56,724 performance based share awards granted under the 2017 Plan during the nine month period ended September 30, 2022, as shown in the table below. The actual number of performance based shares issued will depend on the relative performance of the Company’s average return on equity compared to a group of peer companies over a three year vesting period, ending December 31, 2024. As of September 30, 2022, 943,500 shares are still available to be awarded from the 2022 Plan. The 2017 Plan has been sunset.

The restricted stock awards were granted with a fair value price equal to the market price of the Company’s common stock at the date of the grant. Expense recognized was $513 thousand and $1.3 million for the three and nine month periods ended September 30, 2022, respectively. During the prior periods, the expense recognized was $278 thousand and $865 thousand for the three and nine month periods ended September 30, 2021, respectively. As of September 30, 2022, there was $3.6 million of total unrecognized compensation expense related to the nonvested shares granted under the Plan. The remaining cost is expected to be recognized over 2.4 years.

The following is the activity under the Plans during the nine month period ended September 30, 2022.

	Maximum Awarded Service Units			Weighted Average Grant Date Fair Value		Maximum Awarded Performance Units			Weighted Average Grant Date Fair Value
Beginning balance - non-vested shares		99,564		$	16.13		158,988		$	14.40
Granted		132,268			16.63		56,724			17.25
Vested		(20,771	)		16.81		(65,481	)		17.48
Forfeited		(3,000	)		13.68		(12,862	)		14.74
Ending balance - non-vested shares		208,061		$	16.72		137,369		$	15.85

The following is the activity under the Plans during the nine month period ended September 30, 2021.

	Maximum Awarded Service Units			Weighted Average Grant Date Fair Value		Maximum Awarded Performance Units			Weighted Average Grant Date Fair Value
Beginning balance - non-vested shares		67,765		$	14.32		153,070		$	14.46
Granted		38,061			15.45		58,245			14.21
Vested		(26,621	)		14.41		(52,327	)		14.34
Forfeited		(4,758	)		14.15		0			0
Ending balance - non-vested shares		74,447		$	14.94		158,988		$	14.40

The 86,252 shares that vested during the nine month period ended September 30, 2022 had a weighted average fair value of $17.32 per share.

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Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2022

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss):

The following tables represent the details of other comprehensive loss for the three and nine month periods ended September 30, 2022 and 2021.

	Three Months Ended September 30, 2022
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during the period	$	(83,980	)	$	17,636		$	(66,344	)
Reclassification adjustment for losses included in net income (1)		5			(1	)		4
Net unrealized losses on available-for-sale securities	$	(83,975	)	$	17,635		$	(66,340	)
Change in funded status of post-retirement health plan		(2	)		0			(2	)
Net other comprehensive (loss)	$	(83,977	)	$	17,635		$	(66,342	)
	Three Months Ended September 30, 2021
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during the period	$	(2,754	)	$	578		$	(2,176	)
Reclassification adjustment for gains included in net income (1)		(464	)		96			(368	)
Net other comprehensive (loss)	$	(3,218	)	$	674		$	(2,544	)
	Nine Months Ended September 30, 2022
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during the period	$	(301,874	)	$	63,394		$	(238,480	)
Reclassification adjustment for losses included in net income (1)		36			(8	)		28
Net unrealized losses on available-for-sale securities	$	(301,838	)	$	63,386		$	(238,452	)
Change in funded status of post-retirement health plan		(6	)		1			(5	)
Net other comprehensive (loss)	$	(301,844	)	$	63,387		$	(238,457	)
	Nine Months Ended September 30, 2021
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding (losses) on available-for-sale securities during the period	$	(8,990	)	$	1,888		$	(7,102	)
Reclassification adjustment for gains included in net income (1)		(848	)		178			(670	)
Net other comprehensive (loss)	$	(9,838	)	$	2,066		$	(7,772	)

(1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in security gains and the tax impact is included in income tax expense on the consolidated statements of income.

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Regulatory Capital Matters

9 Months Ended

Sep. 30, 2022

Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]

Regulatory Capital Matters

Regulatory Capital Matters:

Banks and bank holding companies are subject to various regulatory capital requirements administered by the federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action by regulators that, if undertaken, could have a direct material effect on the financial statements. Management believes that as of September 30, 2022, the Company and the Bank meet all capital adequacy requirements to which they are subject.

The FDIC and other federal banking regulators revised the risk-based capital requirements applicable to financial holding companies and insured depository institutions, including the Company and the Bank, to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision (“Basel III”).

The common equity tier 1 capital, tier 1 capital and total capital ratios are calculated by dividing the respective capital amounts by risk-weighted assets. The leverage ratio is calculated by dividing tier 1 capital by adjusted average total assets.

Basel III limits capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” consisting of 2.5% of common equity tier 1 capital, tier 1 capital and total capital to risk-weighted assets in addition to the amount necessary to meet minimum risk-based capital requirements. Excluding the additional buffer, Basel III requires the Company and the Bank to maintain (i) a minimum ratio of common equity tier 1 capital to risk-weighted assets of at least 4.5%, (ii) a minimum ratio of tier 1 capital to risk-weighted assets of at least 6.0%, (iii) a minimum ratio of total capital to risk-weighted assets of at least 8.0% and (iv) a minimum leverage ratio of at least 4.0%.

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 only adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At September 30, 2022 and December 31, 2021, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.

Actual and required capital amounts and ratios, which do not include the capital conservation buffer, are presented below at September 30, 2022 and December 31, 2021:

	Actual					Requirement For Capital Adequacy Purposes:					To be Well Capitalized Under Prompt Corrective Action Provisions:
	Amount		Ratio			Amount		Ratio			Amount		Ratio
September 30, 2022
Common equity tier 1 capital ratio
Consolidated	$	394,738		13.36	%	$	132,921		4.5	%	N/A		N/A
Bank		358,723		12.18	%		132,490		4.5	%		191,374		6.5	%
Total risk based capital ratio
Consolidated		515,020		17.44	%		236,303		8.0	%	N/A		N/A
Bank		386,005		13.11	%		235,537		8.0	%		294,421		10.0	%
Tier 1 risk based capital ratio
Consolidated		412,738		13.97	%		177,228		6.0	%	N/A		N/A
Bank		358,723		12.18	%		176,653		6.0	%		235,537		8.0	%
Tier 1 leverage ratio
Consolidated		412,738		10.24	%		161,179		4.0	%	N/A		N/A
Bank		358,723		8.44	%		169,940		4.0	%		212,425		5.0	%
December 31, 2021
Common equity tier 1 capital ratio
Consolidated	$	362,950		13.16	%	$	124,066		4.5	%	N/A		N/A
Bank		345,065		12.55	%		123,712		4.5	%	$	178,695		6.5	%
Total risk based capital ratio
Consolidated		485,336		17.60	%		220,562		8.0	%	N/A		N/A
Bank		374,451		13.62	%		219,933		8.0	%		274,916		10.0	%
Tier 1 risk based capital ratio
Consolidated		380,950		13.82	%		165,422		6.0	%	N/A		N/A
Bank		345,065		12.55	%		164,950		6.0	%		219,933		8.0	%
Tier 1 leverage ratio
Consolidated		380,950		10.12	%		150,629		4.0	%	N/A		N/A
Bank		345,065		9.19	%		150,217		4.0	%		187,772		5.0	%

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Segment Information

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segment Information

Segment Information:

The reportable segments are determined by the products and services offered, primarily distinguished between banking and trust. These segments are also distinguished by the level of information provided to the chief operating decision makers in the Company, who use such information to review performance of various components of the business, which are then aggregated. Loans, investments, and deposits provide the revenues in the banking operation. All operations are domestic. Significant segment totals are reconciled to the financial statements as follows:

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
September 30, 2022
Goodwill and other intangibles	$	5,758	$	100,873	$	(4,263	)	$	102,368
Total assets	$	13,338	$	4,100,421	$	6,263		$	4,120,022

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
December 31, 2021
Goodwill and other intangibles	$	5,814	$	101,055	$	(4,263	)	$	102,606
Total assets	$	14,365	$	4,124,530	$	3,854		$	4,142,749

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
For Three Months Ended September 30, 2022
Net interest income	$	54	$	32,602	$	(875	)	$	31,781
Provision for credit losses and unfunded loans		0		448		0			448
Service fees, security gains and other noninterest income		2,731		6,248		(152	)		8,827
Noninterest expense		1,666		17,942		657			20,265
Amortization and depreciation expense		27		994		113			1,134
Income before taxes		1,092		19,466		(1,797	)		18,761
Income taxes		229		3,438		(352	)		3,315
Net income	$	863	$	16,028	$	(1,445	)	$	15,446

(In Thousands of Dollars)	Trust Segment		Bank Segment			Eliminations and Others			Consolidated Totals
For Three Months Ended September 30, 2021
Net interest income	$	31	$	26,798		$	(295	)	$	26,534
Provision for credit losses and unfunded loans		0		(948	)		0			(948	)
Service fees, security gains and other noninterest income		2,707		6,385			(77	)		9,015
Noninterest expense		1,726		14,586			(12	)		16,300
Amortization and depreciation expense		67		653			108			828
Income before taxes		945		18,892			(468	)		19,369
Income taxes		198		3,310			(150	)		3,358
Net income	$	747	$	15,582		$	(318	)	$	16,011

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
For Nine Months Ended September 30, 2022
Net interest income	$	126	$	97,081	$	(2,473	)	$	94,734
Provision for credit losses and unfunded loans		0		706		0			706
Service fees, security gains and other noninterest income		16,768		19,595		(361	)		36,002
Noninterest expense		7,049		61,558		1,234			69,841
Amortization and depreciation expense		83		3,052		340			3,475
Income before taxes		9,762		51,360		(4,408	)		56,714
Income taxes		2,049		8,438		(1,014	)		9,473
Net income	$	7,713	$	42,922	$	(3,394	)	$	47,241

(In Thousands of Dollars)	Trust Segment		Bank Segment			Eliminations and Others			Consolidated Totals
For Nine Months Ended September 30, 2021
Net interest income	$	94	$	78,597		$	(400	)	$	78,291
Provision for credit losses and unfunded loans		0		(473	)		0			(473	)
Service fees, security gains and other noninterest income		8,108		20,675			(128	)		28,655
Noninterest expense		4,818		44,676			(409	)		49,085
Amortization and depreciation expense		194		1,992			244			2,430
Income before taxes		3,190		53,077			(363	)		55,904
Income taxes		669		9,379			(286	)		9,762
Net income	$	2,521	$	43,698		$	(77	)	$	46,142

The Bank segment includes Farmers National Insurance and Farmers of Canfield Investment Co.

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Short-term Borrowings

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Short-term Borrowings

Short-term borrowings:

The Bank had short-term advances from the Federal Home Loan Bank ("FHLB") at September 30, 2022 of $155 million. The interest rate on these borrowings was 3.02% at September 30, 2022. The Bank had no short-term advances from the FHLB at December 31, 2021.

The Bank has access to lines of credit amounting to $35 million at two major domestic banks that are below prime rate. The lines and terms are periodically reviewed by the lending banks and are generally subject to withdrawal at their discretion. There were no borrowings under these lines at September 30, 2022 or at December 31, 2021.

Farmers has two unsecured revolving lines of credit for $6.5 million. These lines can be renewed annually. The lines have interest rates of prime with floors of 3.5% and 4.5%. There were no outstanding balances on either of these two lines at September 30, 2022 or at December 31, 2021.

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Long-Term Borrowings

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Long-term Borrowings

Long-term borrowings:

There were no long-term advances from the FHLB at September 30, 2022 or at December 31, 2021.

The Bank’s long-term and short-term FHLB advances are secured by a blanket pledge of residential mortgage, commercial real estate, and multi-family loans totaling $1.3 billion and $1.2 billion at September 30, 2022 and December 31, 2021, respectively. Based on this collateral, the Bank is eligible to borrow an additional $550.8 million at September 30, 2022.

In November 2021, the Company completed the issuance of $75.0 million aggregate principal amount, fixed-to-floating rate subordinated notes due December 15, 2031, in a private offering exempt from the registration requirements under the Securities Act of 1933, as amended. The notes carry a fixed rate of 3.125% for five years at which time they will convert to a floating rate based on the three-month term secured overnight funding rate, plus a spread of 220 basis points. The Company may, at its option, beginning December 15, 2026, redeem the notes, in whole or in part, from time to time, subject to certain conditions. The net proceeds from the sale were approximately $73.8 million, after deducting the offering expenses. The Company’s intent was to use the proceeds from the sale for general corporate purposes, which may include, without limitation, providing capital to support its growth organically or through acquisitions, in financing investments, capital expenditures, repurchasing its common shares and for investments in the Bank as regulatory capital. The subordinated debentures are included in Total Capital under current regulatory guidelines and interpretations.

On November 1, 2021, the Company completed its acquisition of Cortland, which included the assumption of Floating Rate Junior Subordinated Debt Securities due in September 15, 2037 (the "junior subordinated debt securities") at an acquisition-date fair value of $4.3 million, held in a wholly-owned statutory trust whose common securities were wholly-owned by Cortland. The sole assets of the statutory trust are the junior subordinated debt securities and related payments. The junior subordinated debt securities and the back-up obligations, in the aggregate, constitute a full and unconditional guarantee of the obligations of the statutory trust under the capital securities held by third-party investors. The securities bear interest at a rate of 1.45% over the 3-month LIBOR rate. The rate at September 30, 2022 was 4.74% and at December 31, 2021 was 1.65%.

On January 7, 2020, the Company completed its acquisition of Maple Leaf, which included the assumption of Floating Rate Junior Subordinated Debt Securities due December 15, 2036 (the "junior subordinated debt securities") held in a wholly-owned statutory trust whose common securities were wholly-owned by Maple Leaf. The sole assets of the statutory trust are the junior subordinated debt securities and related payments. The junior subordinated debt securities and the back-up obligations, in the aggregate, constitute a full and unconditional guarantee of the obligations of the statutory trust under the capital securities held by third-party investors. The securities bear interest at a rate of 1.80% over the 3-month LIBOR rate. The rate at September 30, 2022 was 5.09% and at December 31, 2021 was 1.90%.

In 2015, the Company completed its acquisition of National Bancshares Corporation (“NBOH”), which included the assumption of Floating Rate Junior Subordinated Debt Securities due June 15, 2035 (the "junior subordinated debt securities") held in a wholly-owned statutory trust whose common securities were wholly-owned by NBOH. The sole assets of the statutory trust are the junior subordinated debt securities and related payments. The junior subordinated debt securities and the back-up obligations, in the aggregate, constitute a full and unconditional guarantee of the obligations of the statutory trust under the capital securities held by third-party investors. The securities bear interest at a rate of 1.70% over the 3-month LIBOR rate. The rate at September 30, 2022 was 4.99% and at December 31, 2021 was 2.00%.

In all three instances, the Company may redeem the junior subordinated debentures at any quarter-end, in whole, or in part, at par. This type of subordinated debenture qualifies as Tier 1 capital for regulatory purposes in determining and evaluating the Company’s capital adequacy.

A summary of all junior subordinated debentures issued by the Company to affiliates and subordinated debentures follows. For the junior subordinated debentures, these amounts represent the par value of the obligations owed to these affiliates, including the Company’s equity interest in the trusts along with any unamortized fair value marks. For the subordinated debentures, these amounts represent the par value less the remaining deferred offering expense associated with the issuance of the debentures.

	September 30, 2022	December 31, 2021
	Amount	Amount
TSEO Statutory Trust I	$2,460	$2,424
Maple Leaf Financial Statutory Trust II	7,461	7,293
Cortland Statutory Trust I	4,313	4,271
Total junior subordinated debentures owed to unconsolidated subsidiary trusts	$14,234	$13,988
Subordinated debentures	$73,864	$73,770

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation:

Farmers National Banc Corp. (“Company” or "Farmers") is a Financial Holding Company registered under the Bank Holding Company Act of 1956, as amended. The Company provides full banking services through its nationally chartered subsidiary, The Farmers National Bank of Canfield (“Bank”). The consolidated financial statements also include the accounts of the Bank’s subsidiaries; Farmers National Insurance, LLC (“Insurance”) and Farmers of Canfield Investment Co. (“Investments”). The Company provides trust and retirement consulting services through its subsidiary, Farmers Trust Company (“Trust”), and insurance services through the Bank’s subsidiary, Insurance. Farmers National Captive, Inc. (“Captive”) is a wholly-owned insurance subsidiary of the Company that provides property and casualty insurance coverage to the Company and its subsidiaries. The Captive pools resources with eleven similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves and to provide insurance where not currently available or economically feasible in today’s insurance market place. The consolidated financial statements include the accounts of the Company, the Bank and its subsidiaries, along with the Trust and Captive. All significant intercompany balances and transactions have been eliminated in the consolidation.

Basis of Presentation

Basis of Presentation:

The unaudited condensed consolidated financial statements have been prepared in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2021 Annual Report to Shareholders included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K”). The interim consolidated financial statements include all adjustments (consisting of only normal recurring items) that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods presented. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year. Certain items included in the prior period financial statements were reclassified to conform to the current period presentation. There was no effect on net income or total stockholders’ equity.

Estimates

Estimates:

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Segments

Segments:

The Company provides a broad range of financial services to individuals and companies in northeastern Ohio and western Pennsylvania. Operations are managed and financial performance is primarily aggregated and reported in two lines of business, the Bank segment and the Trust segment.

Equity

Equity:

There are 50,000,000 shares authorized and available for issuance as of September 30, 2022. Outstanding shares at September 30, 2022 were 34,059,657.

Comprehensive Income

Comprehensive Income:

Comprehensive income consists of net income and other comprehensive income. Other comprehensive income consists of unrealized gains and losses on securities available for sale and changes in the funded status of the post-retirement plan, which are recognized as components of stockholders’ equity, net of tax effect.

New Accounting Standard

New Accounting Standard:

On March 31, 2022, FASB issued ASU 2022-02, which eliminates the troubled debt restructuring (“TDR”), accounting model for creditors that have adopted Topic 326, Financial Instruments – Credit Losses. Due to the removal of the TDR accounting model, all loan modifications now will be accounted for under the general loan modification guidance in Subtopic 310-20. In addition, on a prospective basis, entities will be subject to new disclosure requirements covering modifications of receivables to borrowers experiencing financial difficulty. Public business entities within the scope of the Topic 326 vintage disclosure requirements also will be required to prospectively disclose current-period gross write-off information by vintage, or year of origination. For entities that have adopted Topic 326, ASU 2022-02 takes effect in reporting periods beginning after December 15, 2022. Early adoption is permitted. The Company has elected not to early adopt ASU 2022-02 at this time. The adoption of this standard is not expected to have a material effect on the Company’s operating results or financial condition.

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Business Combinations (Tables)

9 Months Ended

Sep. 30, 2022

Cortland Bank

Summary of Consideration Paid and Amounts of Assets Acquired and Liabilities Assumed

(In Thousands of Dollars)
Consideration
Cash	$	29,618
Stock		98,921
Fair value of total consideration transferred	$	128,539
Fair value of assets acquired
Cash and cash equivalents	$	113,391
Securities available for sale		130,574
Other investments		16,092
Loans		482,168
Premises and equipment		12,644
Bank owned life insurance		21,547
Core deposit intangible		5,886
Current and deferred taxes		3,135
Other assets		7,805
Total assets acquired		793,242
Fair value of liabilities assumed
Deposits		695,274
Short-term borrowings		4,246
Long-term borrowings		4,262
Accrued interest payable and other liabilities		9,386
Total liabilities		713,168
Net assets acquired	$	80,074
Goodwill created		48,465
Total net assets acquired	$	128,539

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Securities (Tables)

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Summary of the Amortized Cost and Fair Value of Available-for-Sale Investment Securities Corresponding Amounts of Unrealized Gains and Losses

The following table summarizes the amortized cost and fair value of the available for sale investment securities portfolio at September 30, 2022 and December 31, 2021 and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive income (loss):

			Gross		Gross
	Amortized		Unrealized		Unrealized
(In Thousands of Dollars)	Cost		Gains		Losses			Fair Value
September 30, 2022
U.S. Treasury and U.S. government sponsored entities	$	149,549	$	0	$	(21,733	)	$	127,816
State and political subdivisions		686,456		100		(137,528	)		549,028
Corporate bonds		4,386		0		(303	)		4,083
Mortgage-backed securities - residential		687,352		56		(126,126	)		561,282
Collateralized mortgage obligations - residential		53,390		0		(4,178	)		49,212
Small Business Administration		4,120		0		(408	)		3,712
Totals	$	1,585,253	$	156	$	(290,276	)	$	1,295,133

			Gross		Gross
	Amortized		Unrealized		Unrealized
(In Thousands of Dollars)	Cost		Gains		Losses			Fair Value
December 31, 2021
U.S. Treasury and U.S. government sponsored entities	$	93,137	$	32	$	(2,338	)	$	90,831
State and political subdivisions		636,724		23,296		(1,205	)		658,815
Corporate bonds		4,009		50		(29	)		4,030
Mortgage-backed securities - residential		663,405		1,875		(10,094	)		655,186
Collateralized mortgage obligations - residential		13,303		153		(71	)		13,385
Small Business Administration		5,381		49		0			5,430
Totals	$	1,415,959	$	25,455	$	(13,737	)	$	1,427,677

Amortized Cost and Fair Value of the Debt Securities Maturity

The amortized cost and fair value of the debt securities portfolio are shown in the table below by expected maturity. Expected maturities may differ from contractual maturities if issuers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

	September 30, 2022
(In Thousands of Dollars)	Amortized Cost		Fair Value
Maturity
Within one year	$	776	$	770
One to five years		30,842		29,791
Five to ten years		178,232		154,700
Beyond ten years		630,541		495,666
Mortgage-backed, collateralized mortgage obligations and Small Business Administration securities		744,862		614,206
Total	$	1,585,253	$	1,295,133

Available for Sale Investment Securities with Unrealized Losses

The following table summarizes the available for sale investment securities with unrealized losses at September 30, 2022 and December 31, 2021, aggregated by major security type and length of time in a continuous unrealized loss position.

	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(In Thousands of Dollars)	Value		Loss			Value		Loss			Value		Loss
September 30, 2022
U.S. Treasury and U.S. government sponsored entities	$	56,522	$	(6,430	)	$	71,294	$	(15,303	)	$	127,816	$	(21,733	)
State and political subdivisions		485,654		(121,150	)		42,427		(16,378	)		528,081		(137,528	)
Corporate bonds		3,292		(145	)		791		(158	)		4,083		(303	)
Mortgage-backed securities - residential		183,962		(32,556	)		375,623		(93,570	)		559,585		(126,126	)
Collateralized mortgage obligations - residential		45,785		(3,715	)		3,427		(463	)		49,212		(4,178	)
Small Business Administration		3,712		(408	)		0		0			3,712		(408	)
Total temporarily impaired	$	778,927	$	(164,404	)	$	493,562	$	(125,872	)	$	1,272,489	$	(290,276	)

	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(In Thousands of Dollars)	Value		Loss			Value		Loss			Value		Loss
December 31, 2021
U.S. Treasury and U.S. government sponsored entities	$	81,236	$	(1,960	)	$	8,271	$	(378	)	$	89,507	$	(2,338	)
State and political subdivisions		103,651		(1,020	)		10,020		(185	)		113,671		(1,205	)
Corporate bonds		418		(2	)		715		(27	)		1,133		(29	)
Mortgage-backed securities - residential		525,792		(7,872	)		55,569		(2,222	)		581,361		(10,094	)
Collateralized mortgage obligations - residential		7,270		(71	)		0		0			7,270		(71	)
Total temporarily impaired	$	718,367	$	(10,925	)	$	74,575	$	(2,812	)	$	792,942	$	(13,737	)

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Loans (Tables)

9 Months Ended

Sep. 30, 2022

Receivables [Abstract]

Schedule of Loan Balances

Loan balances were as follows:

(In Thousands of Dollars)	September 30, 2022			December 31, 2021
Commercial real estate
Owner occupied	$	331,804		$	340,369
Non-owner occupied		568,277			533,240
Farmland		184,958			177,706
Other		128,403			138,282
Commercial
Commercial and industrial		296,932			313,836
Agricultural		54,123			54,659
Residential real estate
1-4 family residential		474,014			453,635
Home equity lines of credit		132,267			127,433
Consumer
Indirect		197,206			159,006
Direct		17,020			21,121
Other		8,480			9,395
Total loans	$	2,393,484		$	2,328,682
Net deferred loan costs		6,497			2,400
Allowance for credit losses		(27,282	)		(29,386	)
Net loans	$	2,372,699		$	2,301,696

Activity in the Allowance for Loan Losses by Portfolio Segment

Allowance for credit loss activity

The following tables present the activity in the allowance for credit losses by portfolio segment for the three and nine month periods ended September 30, 2022 and 2021:

Three Months Ended September 30, 2022

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	14,859		$	3,893		$	4,915		$	3,787		$	27,454
(Credit) Provision for credit losses		(47	)		260			2			218			433
Loans charged off		0			(473	)		(9	)		(301	)		(783	)
Recoveries		1			2			41			134			178
Total ending allowance balance	$	14,813		$	3,682		$	4,949		$	3,838		$	27,282

Nine Months Ended September 30, 2022

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	15,879		$	4,949		$	4,870		$	3,688		$	29,386
(Credit) Provision for credit losses		(1,068	)		601			53			399			(15	)
Loans charged off		0			(1,878	)		(43	)		(630	)		(2,551	)
Recoveries		2			10			69			381			462
Total ending allowance balance	$	14,813		$	3,682		$	4,949		$	3,838		$	27,282

Three Months Ended September 30, 2021

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	12,290		$	4,600		$	4,130		$	3,786		$	24,806
Adjustment related to reserve for unfunded loan reclass		(245	)		(104	)		(73	)		(15	)		(437	)
(Credit) Provision for credit losses		(454	)		(655	)		75			87			(947	)
Loans charged off		(31	)		(126	)		(55	)		(199	)		(411	)
Recoveries		1			15			41			68			125
Total ending allowance balance	$	11,561		$	3,730		$	4,118		$	3,727		$	23,136

Nine Months Ended September 30, 2021

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	10,824		$	5,073		$	3,643		$	2,604		$	22,144
Adjustment related to reserve for unfunded loan reclass		(245	)		(104	)		(73	)		(15	)		(437	)
Impact of CECL adoption		(2,076	)		429			237			3,860			2,450
(Credit) Provision for credit losses		3,077			(1,668	)		411			(2,292	)		(472	)
Loans charged off		(51	)		(198	)		(221	)		(727	)		(1,197	)
Recoveries		32			198			121			297			648
Total ending allowance balance	$	11,561		$	3,730		$	4,118		$	3,727		$	23,136

Schedule of Investment in Nonaccrual and Loans Past Due 90 Days or More Still on Accrual by Class of Loans

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

	September 30, 2022				December 31, 2021
(In Thousands of Dollars)	Nonaccrual		Loans Past Due 90 Days or More Still Accruing		Nonaccrual		Loans Past Due 90 Days or More Still Accruing
Commercial real estate
Owner occupied	$	1,049	$	0	$	433	$	0
Non-owner occupied		3,398		0		2,511		0
Farmland		42		0		274		0
Other		39		0		60		0
Commercial
Commercial and industrial		3,392		0		7,190		54
Agricultural		29		0		40		0
Residential real estate
1-4 family residential		2,859		735		3,363		459
Home equity lines of credit		851		25		917		36
Consumer
Indirect		311		41		455		123
Direct		187		18		227		53
Other		0		0		0		0
Total loans	$	12,157	$	819	$	15,470	$	725

Schedule of Investment in Past Due Loans

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. Note that loans on a modification to defer payments under the CARES Act are included in loans not past due for the period ending December 31, 2021. There were no loans on deferred payments at September 30, 2022.

(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
September 30, 2022
Commercial real estate
Owner occupied	$	0	$	0	$	1,049	$	1,049	$	330,415	$	331,464
Non-owner occupied		28		0		3,398		3,426		564,205		567,631
Farmland		127		41		42		210		184,458		184,668
Other		137		0		39		176		128,009		128,185
Commercial
Commercial and industrial		260		471		3,392		4,123		293,299		297,422
Agricultural		81		59		29		169		54,350		54,519
Residential real estate
1-4 family residential		3,331		767		3,594		7,692		465,795		473,487
Home equity lines of credit		246		71		876		1,193		131,103		132,296
Consumer
Indirect		734		161		352		1,247		203,520		204,767
Direct		97		40		205		342		16,720		17,062
Other		4		4		0		8		8,472		8,480
Total loans	$	5,045	$	1,614	$	12,976	$	19,635	$	2,380,346	$	2,399,981

(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
December 31, 2021
Commercial real estate
Owner occupied	$	70	$	591	$	433	$	1,094	$	338,880	$	339,974
Non-owner occupied		394		311		2,511		3,216		529,490		532,706
Farmland		0		0		274		274		177,143		177,417
Other		56		0		60		116		137,878		137,994
Commercial
Commercial and industrial		256		100		7,244		7,600		304,932		312,532
Agricultural		100		28		40		168		54,706		54,874
Residential real estate
1-4 family residential		4,452		1,077		3,822		9,351		443,441		452,792
Home equity lines of credit		80		12		953		1,045		126,405		127,450
Consumer
Indirect		795		275		578		1,648		163,112		164,760
Direct		203		91		280		574		20,614		21,188
Other		0		0		0		0		9,395		9,395
Total loans	$	6,406	$	2,485	$	16,195	$	25,086	$	2,305,996	$	2,331,082

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Troubled Debt Restructurings (Tables)

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Schedule of Loans By Class Modified as Troubled Debt Restructurings

The following table presents loans by class modified as troubled debt restructurings that occurred during the three and nine month periods ended September 30, 2022 and 2021:

			Pre- Modification		Post- Modification
Three Months Ended September 30, 2022	Number of		Outstanding Recorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Commercial		1	$	15	$	11
Residential real estate
1-4 family residential		4		200		205
Home equity lines of credit		2		19		19
Consumer
Indirect		3		7		7
Direct		2		86		86
Total loans		12	$	327	$	328

			Pre- Modification		Post- Modification
Nine Months Ended September 30, 2022	Number of		Outstanding Recorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Commercial real estate
Owner occupied		1	$	140	$	140
Commercial		1		15		11
Residential real estate
1-4 family residential		8		392		402
Home equity lines of credit		3		33		33
Consumer
Indirect		7		41		41
Direct		2		86		86
Total loans		22	$	707	$	713

			Pre- Modification		Post- Modification
Three Months Ended September 30, 2021	Number of		Outstanding Recorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Residential real estate
1-4 family residential		2	$	215	$	233
Home equity lines of credit		1		103		103
Consumer
Indirect		5		30		30
Direct		1		10		10
Total loans		9	$	358	$	376

			Pre- Modification		Post- Modification
Nine Months Ended September 30, 2021	Number of		Outstanding Recorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Commercial		4	$	22	$	22
Residential real estate
1-4 family residential		6		426		414
Home equity lines of credit		5		201		201
Consumer
Indirect		12		121		121
Other		3		16		16
Total loans		30	$	786	$	774

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Credit Quality Indicators (Tables)

9 Months Ended

Sep. 30, 2022

Risks and Uncertainties [Abstract]

Risk Category of Loans by Class of Loans

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

(In Thousands of Dollars)	Pass		Special Mention		Sub standard		Total
September 30, 2022
Commercial real estate
Owner occupied	$	325,189	$	1,218	$	5,057	$	331,464
Non-owner occupied		527,305		21,273		19,053		567,631
Farmland		182,106		0		2,562		184,668
Other		127,834		0		351		128,185
Commercial
Commercial and industrial		291,988		879		4,555		297,422
Agricultural		53,956		250		313		54,519
Total loans	$	1,508,378	$	23,620	$	31,891	$	1,563,889

(In Thousands of Dollars)	Pass		Special Mention		Sub standard		Total
December 31, 2021
Commercial real estate
Owner occupied	$	330,754	$	5,006	$	4,214	$	339,974
Non-owner occupied		495,170		19,366		18,170		532,706
Farmland		174,580		2,160		677		177,417
Other		137,063		784		147		137,994
Commercial
Commercial and industrial		301,879		1,190		9,463		312,532
Agricultural		54,394		397		83		54,874
Total loans	$	1,493,840	$	28,903	$	32,754	$	1,555,497

Investment in Residential, Consumer and Indirect Auto Loans Based on Payment Activity

The following tables present the recorded investment in residential, consumer indirect and direct auto loans based on payment activity as of September 30, 2022 and December 31, 2021. Nonperforming loans are loans past due 90 days or more and still accruing interest and nonaccrual loans.

	Residential Real Estate				Consumer
(In Thousands of Dollars)	1-4 Family Residential		Home Equity Lines of Credit		Indirect		Direct		Other
September 30, 2022
Performing	$	469,893	$	131,420	$	204,415	$	16,857	$	8,480
Nonperforming		3,594		876		352		205		0
Total loans	$	473,487	$	132,296	$	204,767	$	17,062	$	8,480

	Residential Real Estate				Consumer
(In Thousands of Dollars)	1-4 Family Residential		Home Equity Lines of Credit		Indirect		Direct		Other
December 31, 2021
Performing	$	448,970	$	126,497	$	164,182	$	20,908	$	9,395
Nonperforming		3,822		953		578		280		6
Total loans	$	452,792	$	127,450	$	164,760	$	21,188	$	9,401

Risk Categories and Year of Origination

The following table presents total loans by risk categories and year of origination.

	Term Loans Amortized Cost Basis by Origination Year
													Revolving
As of September 30, 2022	2022		2021		2020		2019		2018		Prior		Loans		Total
Commercial real estate
Risk Rating
Pass	$	140,403	$	171,271	$	131,878	$	150,987	$	103,825	$	264,766	$	17,198	$	980,328
Special mention		0		749		1,877		5,340		2,604		11,413		508		22,491
Substandard		0		0		270		2,447		0		21,077		667		24,461
Total commercial real estate loans	$	140,403	$	172,020	$	134,025	$	158,774	$	106,429	$	297,256	$	18,373	$	1,027,280
Commercial and industrial
Risk Rating
Pass	$	85,050	$	50,425	$	37,834	$	19,152	$	15,502	$	16,006	$	68,019	$	291,988
Special mention		0		333		0		116		0		1		429		879
Substandard		0		1,377		676		124		201		1,492		685		4,555
Total commercial loans	$	85,050	$	52,135	$	38,510	$	19,392	$	15,703	$	17,499	$	69,133	$	297,422
Agricultural
Risk Rating
Pass	$	39,434	$	38,169	$	45,529	$	24,802	$	24,672	$	46,716	$	16,740	$	236,062
Special mention		0		0		0		0		0		0		250		250
Substandard		0		355		236		78		0		2,076		130		2,875
Total agricultural loans	$	39,434	$	38,524	$	45,765	$	24,880	$	24,672	$	48,792	$	17,120	$	239,187
Residential real estate
Risk Rating
Pass	$	69,471	$	111,389	$	77,984	$	33,196	$	23,947	$	144,706	$	3,984	$	464,677
Special mention		0		0		71		121		77		129		0		398
Substandard		0		42		251		125		19		7,975		0		8,412
Total residential real estate loans	$	69,471	$	111,431	$	78,306	$	33,442	$	24,043	$	152,810	$	3,984	$	473,487
Home equity lines of credit
Risk Rating
Pass	$	0	$	0	$	0	$	0	$	17	$	1,532	$	128,345	$	129,894
Special mention		0		0		0		0		0		0		48		48
Substandard		0		13		137		49		64		1,990		101		2,354
Total home equity lines of credit	$	0	$	13	$	137	$	49	$	81	$	3,522	$	128,494	$	132,296
Consumer
Risk Rating
Pass	$	86,710	$	50,580	$	35,022	$	23,530	$	12,791	$	12,744	$	7,987	$	229,364
Substandard		61		138		269		177		84		216		0		945
Total consumer loans	$	86,771	$	50,718	$	35,291	$	23,707	$	12,875	$	12,960	$	7,987	$	230,309

Schedule of Outstanding Balance and Related Allowance on Loans

The outstanding balance at September 30, 2022 and related allowance on these loans is as follows:

	Loan Balance		ACL Balance
Commercial real estate
Owner Occupied	$	1,601	$	17
Non-owner Occupied		19,518		545
Other		254		18
		21,373		580
Commercial
Commercial and industrial		1,655		107
Residential real estate
1-4 family residential		470		3
Total	$	23,498	$	690

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Revenue from Contracts with Customers (Tables)

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Summary of Noninterest Income by Revenue Stream and Reportable Segment, Net of Eliminations

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

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Three Months Ended September 30, 2022
Service charges on deposit accounts	$	0	$	1,229	$	1,229
Debit card and EFT fees		0		1,463		1,463
Trust fees		2,370		0		2,370
Insurance agency commissions		0		1,136		1,136
Retirement plan consulting fees		332		0		332
Investment commissions		0		424		424
Other (outside the scope of ASC 606)		0		1,873		1,873
Total noninterest income	$	2,702	$	6,125	$	8,827

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Three Months Ended September 30, 2021
Service charges on deposit accounts	$	0	$	924	$	924
Debit card and EFT fees		0		1,227		1,227
Trust fees		2,335		0		2,335
Insurance agency commissions		0		799		799
Retirement plan consulting fees		334		0		334
Investment commissions		0		638		638
Other (outside the scope of ASC 606)		0		2,758		2,758
Total noninterest income	$	2,669	$	6,346	$	9,015

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Nine Months Ended September 30, 2022
Service charges on deposit accounts	$	0	$	3,513	$	3,513
Debit card and EFT fees		0		4,407		4,407
Trust fees		7,265		0		7,265
Insurance agency commissions		0		3,269		3,269
Retirement plan consulting fees		1,052		0		1,052
Investment commissions		0		1,675		1,675
Other (outside the scope of ASC 606)		8,375		6,446		14,821
Total noninterest income	$	16,692	$	19,310	$	36,002

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Nine Months Ended September 30, 2021
Service charges on deposit accounts	$	0	$	2,522	$	2,522
Debit card and EFT fees		0		3,720		3,720
Trust fees		6,930		0		6,930
Insurance agency commissions		0		2,750		2,750
Retirement plan consulting fees		1,043		0		1,043
Investment commissions		0		1,665		1,665
Other (outside the scope of ASC 606)		0		10,025		10,025
Total noninterest income	$	7,973	$	20,682	$	28,655

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Fair Value (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value on Recurring Basis

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

			Fair Value Measurements at September 30, 2022 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government sponsored entities	$	127,816	$	0	$	127,816	$	0
State and political subdivisions		549,028		0		549,028		0
Corporate bonds		4,083		0		4,083		0
Mortgage-backed securities-residential		561,282		0		561,280		2
Collateralized mortgage obligations		49,212		0		49,212		0
Small Business Administration		3,712		0		3,712		0
Equity securities
Equity securities at fair value		181		181		0		0
Other investments measured at net asset value		14,581	n/a		n/a		n/a
Total investment securities	$	1,309,895	$	181	$	1,295,131	$	2
Interest rate swaps	$	5,805	$	0	$	5,805	$	0
Financial Liabilities
Interest rate swaps	$	5,805	$	0	$	5,805	$	0
Mortgage banking derivative - liability	$	203	$	0	$	203	$	0

			Fair Value Measurements at December 31, 2021 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government sponsored entities	$	90,831	$	0	$	90,831	$	0
State and political subdivisions		658,815		0		658,815		0
Corporate bonds		4,030		0		4,030		0
Mortgage-backed securities-residential		655,186		0		655,183		3
Collateralized mortgage obligations		13,385		0		13,385		0
Small Business Administration		5,430		0		5,430		0
Equity securities
Equity securities at fair value		228		228		0		0
Other investments measured at net asset value		14,721	n/a		n/a		n/a
Total investment securities	$	1,442,626	$	228	$	1,427,674	$	3
Interest rate swaps	$	4,261	$	0	$	4,261	$	0
Financial Liabilities
Interest rate swaps	$	4,261	$	0	$	4,261	$	0

Reconciliation of All Assets Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Investment Securities Available-for-sale (Level 3)
	Three Months ended September 30,				Nine Months ended September 30,
(In Thousands of Dollars)	2022		2021		2022			2021
Beginning Balance	$	2	$	3	$	3		$	4
Transfers from level 2		0		0		0			0
Repayments, calls and maturities		0		0		(1	)		(1	)
Ending Balance	$	2	$	3	$	2		$	3

Assets Measured at Fair Value on Non-Recurring Basis

Assets measured at fair value on a non-recurring basis are summarized below:

			Fair Value Measurements at September 30, 2022 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Individually evaluated loans
Commercial real estate
Non-owner occupied	$	906	$	0	$	0	$	906
1–4 family residential		56		0		0		56

			Fair Value Measurements at December 31, 2021 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Individually Evaluated loans
Commercial	$	1,654	$	0	$	0	$	1,654
1–4 family residential		82		0		0		82

Fair Value Measurements for Financial Instruments

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the periods ended September 30, 2022 and December 31, 2021:

September 30, 2022	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually evaluated loans
Commercial real estate	$	906	Sales Comparison	Adjustment for differences between comparable sales	(6.13%) - 17.37% .20%
Residential		56	Sales comparison	Adjustment for differences between comparable sales	(13.77%) - (5.68%) (13.77%)

December 31, 2021	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually evaluated loans
Commercial	$	1,654	Sales comparison	Adjustment for differences between comparable sales	(40.24%) - 56.83% (12.43%)
Residential		82	Sales comparison	Adjustment for differences between comparable sales	(3.84%) - 3.22% (0.12%)

Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments not previously disclosed at September 30, 2022 and December 31, 2021 are as follows:

			Fair Value Measurements at September 30, 2022 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	79,981	$	20,814	$	59,167	$	0	$	79,981
Regulatory stock		19,637	n/a		n/a		n/a		n/a
Loans held for sale		2,142		0		2,142		0		2,142
Loans, net		2,372,699		0		0		2,309,191		2,309,191
Financial liabilities
Deposits		3,567,151		3,187,580		362,980		0		3,550,560
Short-term borrowings		155,000		0		155,000		0		155,000
Long-term borrowings		88,098		0		73,109		0		73,109

			Fair Value Measurements at December 31, 2021 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	112,790	$	29,150	$	83,640	$	0	$	112,790
Regulatory stock		15,510	n/a		n/a		n/a		n/a
Loans held for sale		4,545		0		4,681		0		4,681
Loans, net		2,301,696		0		0		2,285,554		2,285,554
Financial liabilities
Deposits		3,547,235		3,158,967		384,263		0		3,543,230
Long-term borrowings		87,758		0		92,433		0		92,433

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Acquired Intangible Assets

Acquired Intangible Assets

Acquired intangible assets were as follows:

	September 30, 2022					December 31, 2021
(In Thousands of Dollars)	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer relationship intangibles	$	7,210	$	(6,755	)	$	7,210	$	(6,641	)
Non-compete contracts		457		(398	)		430		(392	)
Trade name		1,126		(391	)		520		(356	)
Core deposit intangible		12,866		(6,387	)		12,866		(5,271	)
Total	$	21,659	$	(13,931	)	$	21,026	$	(12,660	)

Estimated Amortization Expense

Estimated amortization expense for each of the next five periods and thereafter:

2022 (3 months)	$	424
2023		1,247
2024		943
2025		878
2026		781
Thereafter		3,455
Total	$	7,728

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Leases (Tables)

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Maturities of Lease Liabilities

Maturities of lease liabilities are as follows as of September 30, 2022:

2022 (3 months)	$	264
2023		1,060
2024		892
2025		851
2026		817
Thereafter		6,659
Total Payments		10,543
Less: Imputed Interest		(1,766	)
Total	$	8,777

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings Per Share

The computation of basic and diluted earnings per share is shown in the following table:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Basic EPS
Net income (In thousands of dollars)	$	15,446	$	16,011	$	47,241	$	46,142
Weighted average shares outstanding		33,851,596		28,246,206		33,840,958		28,235,732
Basic earnings per share	$	0.46	$	0.57	$	1.40	$	1.63
Diluted EPS
Net income (In thousands of dollars)	$	15,446	$	16,011	$	47,241	$	46,142
Weighted average shares outstanding for basic earnings per share		33,851,596		28,246,206		33,840,958		28,235,732
Dilutive effect of restricted stock awards		80,286		114,355		84,473		102,813
Weighted average shares for diluted earnings per share		33,931,882		28,360,561		33,925,431		28,338,545
Diluted earnings per share	$	0.46	$	0.56	$	1.39	$	1.63

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Stock Based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Summary of Award Activity under Plans

The following is the activity under the Plans during the nine month period ended September 30, 2022.

	Maximum Awarded Service Units			Weighted Average Grant Date Fair Value		Maximum Awarded Performance Units			Weighted Average Grant Date Fair Value
Beginning balance - non-vested shares		99,564		$	16.13		158,988		$	14.40
Granted		132,268			16.63		56,724			17.25
Vested		(20,771	)		16.81		(65,481	)		17.48
Forfeited		(3,000	)		13.68		(12,862	)		14.74
Ending balance - non-vested shares		208,061		$	16.72		137,369		$	15.85

The following is the activity under the Plans during the nine month period ended September 30, 2021.

	Maximum Awarded Service Units			Weighted Average Grant Date Fair Value		Maximum Awarded Performance Units			Weighted Average Grant Date Fair Value
Beginning balance - non-vested shares		67,765		$	14.32		153,070		$	14.46
Granted		38,061			15.45		58,245			14.21
Vested		(26,621	)		14.41		(52,327	)		14.34
Forfeited		(4,758	)		14.15		0			0
Ending balance - non-vested shares		74,447		$	14.94		158,988		$	14.40

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Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2022

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Schedule of Other Comprehensive Loss

The following tables represent the details of other comprehensive loss for the three and nine month periods ended September 30, 2022 and 2021.

	Three Months Ended September 30, 2022
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during the period	$	(83,980	)	$	17,636		$	(66,344	)
Reclassification adjustment for losses included in net income (1)		5			(1	)		4
Net unrealized losses on available-for-sale securities	$	(83,975	)	$	17,635		$	(66,340	)
Change in funded status of post-retirement health plan		(2	)		0			(2	)
Net other comprehensive (loss)	$	(83,977	)	$	17,635		$	(66,342	)
	Three Months Ended September 30, 2021
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during the period	$	(2,754	)	$	578		$	(2,176	)
Reclassification adjustment for gains included in net income (1)		(464	)		96			(368	)
Net other comprehensive (loss)	$	(3,218	)	$	674		$	(2,544	)
	Nine Months Ended September 30, 2022
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during the period	$	(301,874	)	$	63,394		$	(238,480	)
Reclassification adjustment for losses included in net income (1)		36			(8	)		28
Net unrealized losses on available-for-sale securities	$	(301,838	)	$	63,386		$	(238,452	)
Change in funded status of post-retirement health plan		(6	)		1			(5	)
Net other comprehensive (loss)	$	(301,844	)	$	63,387		$	(238,457	)
	Nine Months Ended September 30, 2021
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding (losses) on available-for-sale securities during the period	$	(8,990	)	$	1,888		$	(7,102	)
Reclassification adjustment for gains included in net income (1)		(848	)		178			(670	)
Net other comprehensive (loss)	$	(9,838	)	$	2,066		$	(7,772	)

(1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in security gains and the tax impact is included in income tax expense on the consolidated statements of income.

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Regulatory Capital Matters (Tables)

9 Months Ended

Sep. 30, 2022

Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]

Schedule of Actual and Required Capital Amounts and Ratios, Not Include Capital Conservation Buffer

Actual and required capital amounts and ratios, which do not include the capital conservation buffer, are presented below at September 30, 2022 and December 31, 2021:

	Actual					Requirement For Capital Adequacy Purposes:					To be Well Capitalized Under Prompt Corrective Action Provisions:
	Amount		Ratio			Amount		Ratio			Amount		Ratio
September 30, 2022
Common equity tier 1 capital ratio
Consolidated	$	394,738		13.36	%	$	132,921		4.5	%	N/A		N/A
Bank		358,723		12.18	%		132,490		4.5	%		191,374		6.5	%
Total risk based capital ratio
Consolidated		515,020		17.44	%		236,303		8.0	%	N/A		N/A
Bank		386,005		13.11	%		235,537		8.0	%		294,421		10.0	%
Tier 1 risk based capital ratio
Consolidated		412,738		13.97	%		177,228		6.0	%	N/A		N/A
Bank		358,723		12.18	%		176,653		6.0	%		235,537		8.0	%
Tier 1 leverage ratio
Consolidated		412,738		10.24	%		161,179		4.0	%	N/A		N/A
Bank		358,723		8.44	%		169,940		4.0	%		212,425		5.0	%
December 31, 2021
Common equity tier 1 capital ratio
Consolidated	$	362,950		13.16	%	$	124,066		4.5	%	N/A		N/A
Bank		345,065		12.55	%		123,712		4.5	%	$	178,695		6.5	%
Total risk based capital ratio
Consolidated		485,336		17.60	%		220,562		8.0	%	N/A		N/A
Bank		374,451		13.62	%		219,933		8.0	%		274,916		10.0	%
Tier 1 risk based capital ratio
Consolidated		380,950		13.82	%		165,422		6.0	%	N/A		N/A
Bank		345,065		12.55	%		164,950		6.0	%		219,933		8.0	%
Tier 1 leverage ratio
Consolidated		380,950		10.12	%		150,629		4.0	%	N/A		N/A
Bank		345,065		9.19	%		150,217		4.0	%		187,772		5.0	%

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

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

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
September 30, 2022
Goodwill and other intangibles	$	5,758	$	100,873	$	(4,263	)	$	102,368
Total assets	$	13,338	$	4,100,421	$	6,263		$	4,120,022

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
December 31, 2021
Goodwill and other intangibles	$	5,814	$	101,055	$	(4,263	)	$	102,606
Total assets	$	14,365	$	4,124,530	$	3,854		$	4,142,749

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
For Three Months Ended September 30, 2022
Net interest income	$	54	$	32,602	$	(875	)	$	31,781
Provision for credit losses and unfunded loans		0		448		0			448
Service fees, security gains and other noninterest income		2,731		6,248		(152	)		8,827
Noninterest expense		1,666		17,942		657			20,265
Amortization and depreciation expense		27		994		113			1,134
Income before taxes		1,092		19,466		(1,797	)		18,761
Income taxes		229		3,438		(352	)		3,315
Net income	$	863	$	16,028	$	(1,445	)	$	15,446

(In Thousands of Dollars)	Trust Segment		Bank Segment			Eliminations and Others			Consolidated Totals
For Three Months Ended September 30, 2021
Net interest income	$	31	$	26,798		$	(295	)	$	26,534
Provision for credit losses and unfunded loans		0		(948	)		0			(948	)
Service fees, security gains and other noninterest income		2,707		6,385			(77	)		9,015
Noninterest expense		1,726		14,586			(12	)		16,300
Amortization and depreciation expense		67		653			108			828
Income before taxes		945		18,892			(468	)		19,369
Income taxes		198		3,310			(150	)		3,358
Net income	$	747	$	15,582		$	(318	)	$	16,011

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
For Nine Months Ended September 30, 2022
Net interest income	$	126	$	97,081	$	(2,473	)	$	94,734
Provision for credit losses and unfunded loans		0		706		0			706
Service fees, security gains and other noninterest income		16,768		19,595		(361	)		36,002
Noninterest expense		7,049		61,558		1,234			69,841
Amortization and depreciation expense		83		3,052		340			3,475
Income before taxes		9,762		51,360		(4,408	)		56,714
Income taxes		2,049		8,438		(1,014	)		9,473
Net income	$	7,713	$	42,922	$	(3,394	)	$	47,241

(In Thousands of Dollars)	Trust Segment		Bank Segment			Eliminations and Others			Consolidated Totals
For Nine Months Ended September 30, 2021
Net interest income	$	94	$	78,597		$	(400	)	$	78,291
Provision for credit losses and unfunded loans		0		(473	)		0			(473	)
Service fees, security gains and other noninterest income		8,108		20,675			(128	)		28,655
Noninterest expense		4,818		44,676			(409	)		49,085
Amortization and depreciation expense		194		1,992			244			2,430
Income before taxes		3,190		53,077			(363	)		55,904
Income taxes		669		9,379			(286	)		9,762
Net income	$	2,521	$	43,698		$	(77	)	$	46,142

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Long-Term Borrowings (Tables)

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Summary of All Junior Subordinated Debentures and Subordinated Debentures

A summary of all junior subordinated debentures issued by the Company to affiliates and subordinated debentures follows. For the junior subordinated debentures, these amounts represent the par value of the obligations owed to these affiliates, including the Company’s equity interest in the trusts along with any unamortized fair value marks. For the subordinated debentures, these amounts represent the par value less the remaining deferred offering expense associated with the issuance of the debentures.

	September 30, 2022	December 31, 2021
	Amount	Amount
TSEO Statutory Trust I	$2,460	$2,424
Maple Leaf Financial Statutory Trust II	7,461	7,293
Cortland Statutory Trust I	4,313	4,271
Total junior subordinated debentures owed to unconsolidated subsidiary trusts	$14,234	$13,988
Subordinated debentures	$73,864	$73,770

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Summary of Significant Accounting Policies (Details Textual)	9 Months Ended
	Sep. 30, 2022 Segment shares	Dec. 31, 2021 shares
Summary of Significant Accounting Policies (Additional Textual) [Abstract]
Operating segments of business | Segment	2
Common stock, shares authorized and available for issuance	50,000,000	50,000,000
Common stock, shares outstanding	34,059,657	33,898,237

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Business Combinations (Details Textual) $ / shares in Units, $ in Thousands				9 Months Ended	12 Months Ended
	Mar. 23, 2022 Branch	Nov. 01, 2021 USD ($) $ / shares shares	Oct. 31, 2021 USD ($) $ / shares shares	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)	Jun. 30, 2022 USD ($)	Mar. 31, 2022 USD ($)	Sep. 30, 2021 USD ($)	Jun. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Business Acquisition [Line Items]
Total assets				$ 4,120,022	$ 4,142,749
Deposits				3,567,151	3,547,235
Equity				265,619	472,432	$ 321,449	$ 393,886	$ 377,524	$ 366,908	$ 347,355	$ 350,097
Goodwill				94,640	94,240
Common Stock
Business Acquisition [Line Items]
Equity				304,838	306,123	$ 304,707	$ 304,670	$ 208,539	$ 208,312	$ 208,199	$ 208,763
Emclaire Financial
Business Acquisition [Line Items]
Business acquisition, date of merger agreement	Mar. 23, 2022
Number of operating branches | Branch	19
Total assets				1,000,000
Gross loans				810,100
Deposits				926,700
Equity				71,000
Cortland Bank
Business Acquisition [Line Items]
Business acquisition, date of merger agreement		Nov. 01, 2021
Cash consideration per share | $ / shares | $ / shares			$ 17.82
Maximum percentage of common shares exchanged for company's shares under merger agreement		75.00%
Percentage of common shares exchanged for company's cash under merger agreement		25.00%
Value of stock issued for acquisition		$ 29,618
Fair value of total consideration transferred		128,539	$ 128,500
Merger related costs				$ 3,500	$ 7,100
Goodwill		$ 48,465
Cortland Bank | Common Stock
Business Acquisition [Line Items]
Cash consideration per share | $ / shares | $ / shares		$ 28.00
Shares of stock issued for acquisition | shares		1.75	5,600,000
Value of stock issued for acquisition			$ 29,600

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Business Combinations (Details) - USD ($) $ in Thousands	Nov. 01, 2021	Oct. 31, 2021	Sep. 30, 2022	Dec. 31, 2021
Fair value of liabilities assumed
Goodwill created			$ 94,640	$ 94,240
Cortland Bank
Consideration
Cash	$ 29,618
Stock	98,921
Fair value of total consideration transferred	128,539	$ 128,500
Fair value of assets acquired
Cash and cash equivalents	113,391
Securities available for sale	130,574
Other investments	16,092
Loans	482,168
Premises and equipment	12,644
Bank owned life insurance	21,547
Core deposit intangible	5,886
Current and deferred taxes	3,135
Other assets	7,805
Total assets acquired	793,242
Fair value of liabilities assumed
Deposits	695,274
Short-term borrowings	4,246
Long-term borrowings	4,262
Accrued interest payable and other liabilities	9,386
Total liabilities	713,168
Net assets acquired	80,074
Goodwill created	48,465
Total net assets acquired	$ 128,539

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Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	$ 1,585,253	$ 1,415,959
Gross Unrealized Gains	156	25,455
Gross Unrealized Losses	(290,276)	(13,737)
Fair Value	1,295,133	1,427,677
U.S. Treasury and U.S. government sponsored entities
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	149,549	93,137
Gross Unrealized Gains	0	32
Gross Unrealized Losses	(21,733)	(2,338)
Fair Value	127,816	90,831
State and political subdivisions
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	686,456	636,724
Gross Unrealized Gains	100	23,296
Gross Unrealized Losses	(137,528)	(1,205)
Fair Value	549,028	658,815
Corporate bonds
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	4,386	4,009
Gross Unrealized Gains	0	50
Gross Unrealized Losses	(303)	(29)
Fair Value	4,083	4,030
Mortgage-backed securities - residential
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	687,352	663,405
Gross Unrealized Gains	56	1,875
Gross Unrealized Losses	(126,126)	(10,094)
Fair Value	561,282	655,186
Collateralized mortgage obligations - residential
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	53,390	13,303
Gross Unrealized Gains	0	153
Gross Unrealized Losses	(4,178)	(71)
Fair Value	49,212	13,385
Small Business Administration
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	4,120	5,381
Gross Unrealized Gains	0	49
Gross Unrealized Losses	(408)	0
Fair Value	$ 3,712	$ 5,430

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Securities (Details Textual)	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($) Securities	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) Securities	Sep. 30, 2021 USD ($)
Schedule Of Available For Sale Securities [Line Items]
Proceeds from the sale of portfolio securities	$ 1,000,000.0	$ 8,200,000	$ 2,600,000	$ 35,200,000
Gross gains realized		458,000		1,400,000
Gross losses realized	$ 5,000	1,000	$ 36,000	515,000
Number of securities | Securities	886		886
Number of securities on unrealized loss position | Securities	857		857
Allowance for credit losses on available-for-sale securities	$ 0		$ 0
ASU 2016-01 | Equity securities
Schedule Of Available For Sale Securities [Line Items]
Realized gains recognized in income statement for securities		$ 5,000		$ 141,000
Realized loss recognized in income statement for securities	$ 12,000		$ 52,000

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Securities (Details 1) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Amortized cost and fair value of the debt securities maturity
Amortized Cost, Within one year	$ 776
Amortized Cost, One to five years	30,842
Amortized Cost, Five to ten years	178,232
Amortized Cost, Beyond ten years	630,541
Amortized Cost, Mortgage-backed, collateralized mortgage obligations and Small Business Administration securities	744,862
Amortized Cost	1,585,253	$ 1,415,959
Fair Value, Within one year	770
Fair Value, One to five years	29,791
Fair Value, Five to ten years	154,700
Fair Value, Beyond ten years	495,666
Fair Value, Mortgage-backed, collateralized mortgage obligations and Small Business Administration securities	614,206
Fair Value, Total	$ 1,295,133	$ 1,427,677

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Securities (Details 2) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	$ 778,927	$ 718,367
Unrealized Losses, Less Than 12 Months	(164,404)	(10,925)
Fair Value, 12 Months or Longer	493,562	74,575
Unrealized Losses, 12 Months or Longer	(125,872)	(2,812)
Fair Value, Total	1,272,489	792,942
Unrealized Losses, Total	(290,276)	(13,737)
U.S. Treasury and U.S. government sponsored entities
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	56,522	81,236
Unrealized Losses, Less Than 12 Months	(6,430)	(1,960)
Fair Value, 12 Months or Longer	71,294	8,271
Unrealized Losses, 12 Months or Longer	(15,303)	(378)
Fair Value, Total	127,816	89,507
Unrealized Losses, Total	(21,733)	(2,338)
State and political subdivisions
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	485,654	103,651
Unrealized Losses, Less Than 12 Months	(121,150)	(1,020)
Fair Value, 12 Months or Longer	42,427	10,020
Unrealized Losses, 12 Months or Longer	(16,378)	(185)
Fair Value, Total	528,081	113,671
Unrealized Losses, Total	(137,528)	(1,205)
Mortgage-backed securities - residential
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	183,962	525,792
Unrealized Losses, Less Than 12 Months	(32,556)	(7,872)
Fair Value, 12 Months or Longer	375,623	55,569
Unrealized Losses, 12 Months or Longer	(93,570)	(2,222)
Fair Value, Total	559,585	581,361
Unrealized Losses, Total	(126,126)	(10,094)
Collateralized mortgage obligations - residential
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	45,785	7,270
Unrealized Losses, Less Than 12 Months	(3,715)	(71)
Fair Value, 12 Months or Longer	3,427	0
Unrealized Losses, 12 Months or Longer	(463)	0
Fair Value, Total	49,212	7,270
Unrealized Losses, Total	(4,178)	(71)
Corporate bonds
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	3,292	418
Unrealized Losses, Less Than 12 Months	(145)	(2)
Fair Value, 12 Months or Longer	791	715
Unrealized Losses, 12 Months or Longer	(158)	(27)
Fair Value, Total	4,083	1,133
Unrealized Losses, Total	(303)	$ (29)
Small Business Administration
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	3,712
Unrealized Losses, Less Than 12 Months	(408)
Fair Value, 12 Months or Longer	0
Unrealized Losses, 12 Months or Longer	0
Fair Value, Total	3,712
Unrealized Losses, Total	$ (408)

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Loans (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020
Schedule of loan balances
Total loans	$ 2,372,699		$ 2,301,696
Net deferred loan costs	6,497		2,400
Allowance for credit losses	(27,282)	$ (27,454)	(29,386)	$ (23,136)	$ (24,806)	$ (22,144)
Commercial real estate
Schedule of loan balances
Allowance for credit losses	(14,813)	(14,859)	(15,879)	(11,561)	(12,290)	(10,824)
Commercial
Schedule of loan balances
Allowance for credit losses	(3,682)	(3,893)	(4,949)	(3,730)	(4,600)	(5,073)
Residential real estate
Schedule of loan balances
Allowance for credit losses	(4,949)	(4,915)	(4,870)	(4,118)	(4,130)	(3,643)
Consumer
Schedule of loan balances
Allowance for credit losses	(3,838)	$ (3,787)	(3,688)	$ (3,727)	$ (3,786)	$ (2,604)
Loans
Schedule of loan balances
Total loans	2,393,484		2,328,682
Loans | Commercial real estate, Owner occupied | Commercial real estate
Schedule of loan balances
Loan balances	331,804		340,369
Loans | Commercial real estate, Non-owner occupied | Commercial real estate
Schedule of loan balances
Loan balances	568,277		533,240
Loans | Commercial real estate, Farmland | Commercial real estate
Schedule of loan balances
Loan balances	184,958		177,706
Loans | Commercial real estate, Other | Commercial real estate
Schedule of loan balances
Loan balances	128,403		138,282
Loans | Commercial, Commercial and industrial | Commercial
Schedule of loan balances
Loan balances	296,932		313,836
Loans | Commercial, Agricultural | Commercial
Schedule of loan balances
Loan balances	54,123		54,659
Loans | Residential real estate, 1-4 family residential | Residential real estate
Schedule of loan balances
Loan balances	474,014		453,635
Loans | Residential real estate, Home equity lines of credit | Residential real estate
Schedule of loan balances
Loan balances	132,267		127,433
Loans | Consumer, Indirect | Consumer
Schedule of loan balances
Loan balances	197,206		159,006
Loans | Consumer, Direct | Consumer
Schedule of loan balances
Loan balances	17,020		21,121
Loans | Consumer, Other | Consumer
Schedule of loan balances
Loan balances	$ 8,480		$ 9,395

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Loans (Details 1) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning balance	$ 27,454	$ 24,806	$ 29,386	$ 22,144
Adjustment related to reserve for unfunded loan reclass		(437)		(437)
Impact of CECL adoption				2,450
(Credit) Provision for credit losses	433	(947)	(15)	(472)
Loans charged off	(783)	(411)	(2,551)	(1,197)
Recoveries	178	125	462	648
Ending balance	27,282	23,136	27,282	23,136
Commercial real estate
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning balance	14,859	12,290	15,879	10,824
Adjustment related to reserve for unfunded loan reclass		(245)		(245)
Impact of CECL adoption				(2,076)
(Credit) Provision for credit losses	(47)	(454)	(1,068)	3,077
Loans charged off	0	(31)	0	(51)
Recoveries	1	1	2	32
Ending balance	14,813	11,561	14,813	11,561
Commercial
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning balance	3,893	4,600	4,949	5,073
Adjustment related to reserve for unfunded loan reclass		(104)		(104)
Impact of CECL adoption				429
(Credit) Provision for credit losses	260	(655)	601	(1,668)
Loans charged off	(473)	(126)	(1,878)	(198)
Recoveries	2	15	10	198
Ending balance	3,682	3,730	3,682	3,730
Residential real estate
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning balance	4,915	4,130	4,870	3,643
Adjustment related to reserve for unfunded loan reclass		(73)		(73)
Impact of CECL adoption				237
(Credit) Provision for credit losses	2	75	53	411
Loans charged off	(9)	(55)	(43)	(221)
Recoveries	41	41	69	121
Ending balance	4,949	4,118	4,949	4,118
Consumer
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning balance	3,787	3,786	3,688	2,604
Adjustment related to reserve for unfunded loan reclass		(15)		(15)
Impact of CECL adoption				3,860
(Credit) Provision for credit losses	218	87	399	(2,292)
Loans charged off	(301)	(199)	(630)	(727)
Recoveries	134	68	381	297
Ending balance	$ 3,838	$ 3,727	$ 3,838	$ 3,727

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Loans (Details 2) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual	$ 12,157	$ 15,470
Loans Past Due 90 Days or More Still Accruing	819	725
Originated Loans | Commercial real estate, Owner occupied | Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual	1,049	433
Loans Past Due 90 Days or More Still Accruing	0	0
Originated Loans | Commercial real estate, Non-owner occupied | Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual	3,398	2,511
Loans Past Due 90 Days or More Still Accruing	0	0
Originated Loans | Commercial real estate, Other | Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual	39	60
Loans Past Due 90 Days or More Still Accruing	0	0
Originated Loans | Commercial real estate, Farmland | Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual	42	274
Loans Past Due 90 Days or More Still Accruing	0	0
Originated Loans | Commercial, Commercial and industrial | Commercial
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual	3,392	7,190
Loans Past Due 90 Days or More Still Accruing	0	54
Originated Loans | Commercial, Agricultural | Commercial
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual	29	40
Loans Past Due 90 Days or More Still Accruing	0	0
Originated Loans | Residential real estate, 1-4 family residential | Residential real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual	2,859	3,363
Loans Past Due 90 Days or More Still Accruing	735	459
Originated Loans | Residential real estate, Home equity lines of credit | Residential real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual	851	917
Loans Past Due 90 Days or More Still Accruing	25	36
Originated Loans | Consumer, Indirect | Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual	311	455
Loans Past Due 90 Days or More Still Accruing	41	123
Originated Loans | Consumer, Direct | Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual	187	227
Loans Past Due 90 Days or More Still Accruing	18	53
Originated Loans | Consumer, Other | Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual	0	0
Loans Past Due 90 Days or More Still Accruing	$ 0	$ 0

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Loans (Details Textual)	9 Months Ended
	Sep. 30, 2022 USD ($)
Receivables [Abstract]
Deferred loan payments	$ 0

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Loans (Details 3) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	$ 2,399,981	$ 2,331,082
Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	5,045	6,406
Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	1,614	2,485
Financing Receivables, Equal to Greater than 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	12,976	16,195
Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	19,635	25,086
Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	2,380,346	2,305,996
Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	1,027,280
Commercial
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	297,422
Residential real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	473,487
Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	230,309
Commercial real estate, Owner occupied | Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	331,464	339,974
Commercial real estate, Owner occupied | Commercial real estate | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0	70
Commercial real estate, Owner occupied | Commercial real estate | Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0	591
Commercial real estate, Owner occupied | Commercial real estate | Financing Receivables, Equal to Greater than 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	1,049	433
Commercial real estate, Owner occupied | Commercial real estate | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	1,049	1,094
Commercial real estate, Owner occupied | Commercial real estate | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	330,415	338,880
Commercial real estate, Non-owner occupied | Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	567,631	532,706
Commercial real estate, Non-owner occupied | Commercial real estate | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	28	394
Commercial real estate, Non-owner occupied | Commercial real estate | Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0	311
Commercial real estate, Non-owner occupied | Commercial real estate | Financing Receivables, Equal to Greater than 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	3,398	2,511
Commercial real estate, Non-owner occupied | Commercial real estate | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	3,426	3,216
Commercial real estate, Non-owner occupied | Commercial real estate | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	564,205	529,490
Commercial real estate, Farmland | Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	184,668	177,417
Commercial real estate, Farmland | Commercial real estate | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	127	0
Commercial real estate, Farmland | Commercial real estate | Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	41	0
Commercial real estate, Farmland | Commercial real estate | Financing Receivables, Equal to Greater than 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	42	274
Commercial real estate, Farmland | Commercial real estate | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	210	274
Commercial real estate, Farmland | Commercial real estate | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	184,458	177,143
Commercial real estate, Other | Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	128,185	137,994
Commercial real estate, Other | Commercial real estate | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	137	56
Commercial real estate, Other | Commercial real estate | Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0	0
Commercial real estate, Other | Commercial real estate | Financing Receivables, Equal to Greater than 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	39	60
Commercial real estate, Other | Commercial real estate | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	176	116
Commercial real estate, Other | Commercial real estate | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	128,009	137,878
Commercial, Commercial and industrial | Commercial
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	297,422	312,532
Commercial, Commercial and industrial | Commercial | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	260	256
Commercial, Commercial and industrial | Commercial | Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	471	100
Commercial, Commercial and industrial | Commercial | Financing Receivables, Equal to Greater than 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	3,392	7,244
Commercial, Commercial and industrial | Commercial | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	4,123	7,600
Commercial, Commercial and industrial | Commercial | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	293,299	304,932
Commercial, Agricultural | Commercial
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	54,519	54,874
Commercial, Agricultural | Commercial | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	81	100
Commercial, Agricultural | Commercial | Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	59	28
Commercial, Agricultural | Commercial | Financing Receivables, Equal to Greater than 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	29	40
Commercial, Agricultural | Commercial | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	169	168
Commercial, Agricultural | Commercial | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	54,350	54,706
Residential real estate, 1-4 family residential | Residential real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	473,487	452,792
Residential real estate, 1-4 family residential | Residential real estate | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	3,331	4,452
Residential real estate, 1-4 family residential | Residential real estate | Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	767	1,077
Residential real estate, 1-4 family residential | Residential real estate | Financing Receivables, Equal to Greater than 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	3,594	3,822
Residential real estate, 1-4 family residential | Residential real estate | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	7,692	9,351
Residential real estate, 1-4 family residential | Residential real estate | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	465,795	443,441
Residential real estate, Home equity lines of credit | Residential real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	132,296	127,450
Residential real estate, Home equity lines of credit | Residential real estate | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	246	80
Residential real estate, Home equity lines of credit | Residential real estate | Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	71	12
Residential real estate, Home equity lines of credit | Residential real estate | Financing Receivables, Equal to Greater than 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	876	953
Residential real estate, Home equity lines of credit | Residential real estate | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	1,193	1,045
Residential real estate, Home equity lines of credit | Residential real estate | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	131,103	126,405
Consumer, Indirect | Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	204,767	164,760
Consumer, Indirect | Consumer | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	734	795
Consumer, Indirect | Consumer | Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	161	275
Consumer, Indirect | Consumer | Financing Receivables, Equal to Greater than 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	352	578
Consumer, Indirect | Consumer | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	1,247	1,648
Consumer, Indirect | Consumer | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	203,520	163,112
Consumer, Direct | Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	17,062	21,188
Consumer, Direct | Consumer | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	97	203
Consumer, Direct | Consumer | Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	40	91
Consumer, Direct | Consumer | Financing Receivables, Equal to Greater than 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	205	280
Consumer, Direct | Consumer | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	342	574
Consumer, Direct | Consumer | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	16,720	20,614
Consumer, Other | Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	8,480	9,395
Consumer, Other | Consumer | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	4	0
Consumer, Other | Consumer | Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	4	0
Consumer, Other | Consumer | Financing Receivables, Equal to Greater than 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0	0
Consumer, Other | Consumer | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	8	0
Consumer, Other | Consumer | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	$ 8,472	$ 9,395

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Troubled Debt Restructurings (Details Textual)	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2022 USD ($) Loans Customer	Sep. 30, 2021 USD ($) Loans	Jun. 30, 2022	Sep. 30, 2022 USD ($) Loans Customer	Sep. 30, 2021 USD ($) Loans	Dec. 31, 2021 USD ($)
Financing Receivable Modifications [Line Items]
Total troubled debt restructurings	$ 3,800,000			$ 3,800,000		$ 3,900,000
Commitments to lend additional amounts to borrowers classified as troubled debt restructurings	0			0		0
Reduction of the notes stated interest rate		0.25%
Allowance adjustment charge offs	36,000	$ 15,000		36,000	$ 91,000
Provision for credit losses	433,000	$ (947,000)		(15,000)	(472,000)
Small Business Administration (SBA), CARES Act, Paycheck Protection Program
Financing Receivable Modifications [Line Items]
Total troubled debt restructurings	$ 256,400,000			$ 256,400,000
Number of business customers facilitated assistance | Customer	2,134			2,134
Payments received from forgiveness of loans					107,900,000
Small Business Administration (SBA), CARES Act, Paycheck Protection Program | PPP Loan Originated In 2020
Financing Receivable Modifications [Line Items]
Payments received from forgiveness of loans				$ 256,400,000
Percentage of payments received from forgiveness of loans				99.99%
Small Business Administration (SBA), CARES Act, Paycheck Protection Program | PPP Loan Originated In 2021
Financing Receivable Modifications [Line Items]
Payments received from forgiveness of loans					$ 107,300,000
Percentage of payments received from forgiveness of loans					99.42%
Payment Deferral
Financing Receivable Modifications [Line Items]
Number of months offered, deferrals				3 months
Payment Deferral | Minimum
Financing Receivable Modifications [Line Items]
Number of months offered, deferrals				3 months
Payment Deferral | Maximum
Financing Receivable Modifications [Line Items]
Number of months offered, deferrals				12 months
Consumer, Indirect
Financing Receivable Modifications [Line Items]
Troubled debt restructured loans with subsequent payment defaults | Loans | Loans		1			1
Residential Mortgage
Financing Receivable Modifications [Line Items]
Troubled debt restructured loans with subsequent payment defaults | Loans | Loans	3	1		3	1
Provision for loan losses				$ 0
Loans default payment past due period				30 days
Commercial Loans
Financing Receivable Modifications [Line Items]
Troubled debt restructured loans with subsequent payment defaults | Loans | Loans		2			2
Provision for loan losses					$ 0
Loans default payment past due period					30 days
Troubled debt restructurings
Financing Receivable Modifications [Line Items]
Specific reserves to loans	$ 108,000			$ 108,000		$ 109,000
Provision for credit losses	$ 36,000	$ 15,000		$ 36,000	$ 90,000
Contractual Interest Rate Reduction | Minimum
Financing Receivable Modifications [Line Items]
Reduction of the notes stated interest rate	1.00%			1.00%	0.25%
Contractual Interest Rate Reduction | Maximum
Financing Receivable Modifications [Line Items]
Reduction of the notes stated interest rate	3.75%		3.75%		4.075%
Extended Maturity
Financing Receivable Modifications [Line Items]
Maturity period loans		193 months
Extended Maturity | Minimum
Financing Receivable Modifications [Line Items]
Maturity period loans				5 months	22 days
Extended Maturity | Maximum
Financing Receivable Modifications [Line Items]
Maturity period loans	120 months		183 months		361 months

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Troubled Debt Restructurings (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($) Loan	Sep. 30, 2021 USD ($) Loan	Sep. 30, 2022 USD ($) Loan	Sep. 30, 2021 USD ($) Loan
Financing Receivable Modifications [Line Items]
Number of Loans | Loan	12	9	22	30
Pre-Modification Outstanding Recorded Investment	$ 327,000	$ 358,000	$ 707,000	$ 786,000
Post-Modification Outstanding Recorded Investment	$ 328,000	$ 376,000	$ 713,000	$ 774,000
Commercial
Financing Receivable Modifications [Line Items]
Number of Loans | Loan	1		1	4
Pre-Modification Outstanding Recorded Investment	$ 15		$ 15	$ 22,000
Post-Modification Outstanding Recorded Investment	$ 11		$ 11	$ 22,000
Commercial real estate, Owner occupied
Financing Receivable Modifications [Line Items]
Number of Loans | Loan			1
Pre-Modification Outstanding Recorded Investment			$ 140,000
Post-Modification Outstanding Recorded Investment			$ 140,000
Residential real estate, 1-4 family residential
Financing Receivable Modifications [Line Items]
Number of Loans | Loan	4	2	8	6
Pre-Modification Outstanding Recorded Investment	$ 200,000	$ 215,000	$ 392,000	$ 426,000
Post-Modification Outstanding Recorded Investment	$ 205,000	$ 233,000	$ 402,000	$ 414,000
Residential real estate, Home equity lines of credit
Financing Receivable Modifications [Line Items]
Number of Loans | Loan	2	1	3	5
Pre-Modification Outstanding Recorded Investment	$ 19	$ 103	$ 33,000	$ 201,000
Post-Modification Outstanding Recorded Investment	$ 19	$ 103	$ 33,000	$ 201,000
Consumer, Indirect
Financing Receivable Modifications [Line Items]
Number of Loans | Loan	3	5	7	12
Pre-Modification Outstanding Recorded Investment	$ 7,000	$ 30,000	$ 41,000	$ 121,000
Post-Modification Outstanding Recorded Investment	$ 7,000	$ 30,000	$ 41,000	$ 121,000
Consumer, Direct
Financing Receivable Modifications [Line Items]
Number of Loans | Loan	2	1	2
Pre-Modification Outstanding Recorded Investment	$ 86	$ 10	$ 86,000
Post-Modification Outstanding Recorded Investment	$ 86	$ 10	$ 86,000
Consumer, Other
Financing Receivable Modifications [Line Items]
Number of Loans | Loan				3
Pre-Modification Outstanding Recorded Investment				$ 16,000
Post-Modification Outstanding Recorded Investment				$ 16,000

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Credit Quality Indicators (Details Textual) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Financing Receivable Recorded Investment [Line Items]
Maximum commercial loan and commercial real estate relationships	$ 1,000,000
Payments to Acquire Loans Receivable	478,200,000
Loans held for sale	$ 4,000,000.0
PCD Loans
Financing Receivable Recorded Investment [Line Items]
Business combination acquired loans with fair value		$ 34,300,000
Credit discount		1,300,000
Noncredit discount		1,100,000
ASU 2016-13
Financing Receivable Recorded Investment [Line Items]
Change In Accounting Principle Accounting Standards Update Adopted	true
Residential real estate, 1-4 family residential
Financing Receivable Recorded Investment [Line Items]
Other real estate owned properties	$ 0	0
Other real estate properties in foreclosure	$ 33,000	$ 93,000

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Credit Quality Indicators (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	$ 1,563,889	$ 1,555,497
Pass
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	1,508,378	1,493,840
Special Mention
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	23,620	28,903
Substandard
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	31,891	32,754
Commercial real estate | Commercial real estate, Owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	331,464	339,974
Commercial real estate | Commercial real estate, Owner occupied | Pass
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	325,189	330,754
Commercial real estate | Commercial real estate, Owner occupied | Special Mention
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	1,218	5,006
Commercial real estate | Commercial real estate, Owner occupied | Substandard
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	5,057	4,214
Commercial real estate | Commercial real estate, Non-owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	567,631	532,706
Commercial real estate | Commercial real estate, Non-owner occupied | Pass
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	527,305	495,170
Commercial real estate | Commercial real estate, Non-owner occupied | Special Mention
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	21,273	19,366
Commercial real estate | Commercial real estate, Non-owner occupied | Substandard
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	19,053	18,170
Commercial real estate | Commercial farmland
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	184,668	177,417
Commercial real estate | Commercial farmland | Pass
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	182,106	174,580
Commercial real estate | Commercial farmland | Special Mention
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	0	2,160
Commercial real estate | Commercial farmland | Substandard
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	2,562	677
Commercial real estate | Commercial real estate, Other
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	128,185	137,994
Commercial real estate | Commercial real estate, Other | Pass
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	127,834	137,063
Commercial real estate | Commercial real estate, Other | Special Mention
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	0	784
Commercial real estate | Commercial real estate, Other | Substandard
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	351	147
Commercial | Commercial and industrial
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	297,422	312,532
Commercial | Commercial and industrial | Pass
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	291,988	301,879
Commercial | Commercial and industrial | Special Mention
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	879	1,190
Commercial | Commercial and industrial | Substandard
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	4,555	9,463
Commercial | Commercial, Agricultural
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	54,519	54,874
Commercial | Commercial, Agricultural | Pass
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	53,956	54,394
Commercial | Commercial, Agricultural | Special Mention
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	250	397
Commercial | Commercial, Agricultural | Substandard
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	$ 313	$ 83

XML

Credit Quality Indicators (Details 1) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financing Receivable Recorded Investment [Line Items]
Loans	$ 2,399,981	$ 2,331,082
Residential real estate | Residential real estate, 1-4 family residential
Financing Receivable Recorded Investment [Line Items]
Loans	473,487	452,792
Residential real estate | Residential real estate, 1-4 family residential | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	469,893	448,970
Residential real estate | Residential real estate, 1-4 family residential | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	3,594	3,822
Residential real estate | Residential real estate, Home equity lines of credit
Financing Receivable Recorded Investment [Line Items]
Loans	132,296	127,450
Residential real estate | Residential real estate, Home equity lines of credit | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	131,420	126,497
Residential real estate | Residential real estate, Home equity lines of credit | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	876	953
Consumer | Consumer, Indirect
Financing Receivable Recorded Investment [Line Items]
Loans	204,767	164,760
Consumer | Consumer, Indirect | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	204,415	164,182
Consumer | Consumer, Indirect | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	352	578
Consumer | Consumer, Direct
Financing Receivable Recorded Investment [Line Items]
Loans	17,062	21,188
Consumer | Consumer, Direct | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	16,857	20,908
Consumer | Consumer, Direct | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	205	280
Consumer | Consumer, Other
Financing Receivable Recorded Investment [Line Items]
Loans	8,480	9,401
Consumer | Consumer, Other | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	8,480	9,395
Consumer | Consumer, Other | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	$ 0	$ 6

XML

Credit Quality Indicators (Details 2) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financing Receivable Recorded Investment [Line Items]
Total	$ 2,399,981	$ 2,331,082
Commercial real estate
Financing Receivable Recorded Investment [Line Items]
2022	140,403
2021	172,020
2020	134,025
2019	158,774
2018	106,429
Prior	297,256
Revolving Loans	18,373
Total	1,027,280
Commercial real estate | Pass
Financing Receivable Recorded Investment [Line Items]
2022	140,403
2021	171,271
2020	131,878
2019	150,987
2018	103,825
Prior	264,766
Revolving Loans	17,198
Total	980,328
Commercial real estate | Special Mention
Financing Receivable Recorded Investment [Line Items]
2022	0
2021	749
2020	1,877
2019	5,340
2018	2,604
Prior	11,413
Revolving Loans	508
Total	22,491
Commercial real estate | Substandard
Financing Receivable Recorded Investment [Line Items]
2022	0
2021	0
2020	270
2019	2,447
2018	0
Prior	21,077
Revolving Loans	667
Total	24,461
Commercial
Financing Receivable Recorded Investment [Line Items]
2022	85,050
2021	52,135
2020	38,510
2019	19,392
2018	15,703
Prior	17,499
Revolving Loans	69,133
Total	297,422
Commercial | Pass
Financing Receivable Recorded Investment [Line Items]
2022	85,050
2021	50,425
2020	37,834
2019	19,152
2018	15,502
Prior	16,006
Revolving Loans	68,019
Total	291,988
Commercial | Special Mention
Financing Receivable Recorded Investment [Line Items]
2022	0
2021	333
2020	0
2019	116
2018	0
Prior	1
Revolving Loans	429
Total	879
Commercial | Substandard
Financing Receivable Recorded Investment [Line Items]
2022	0
2021	1,377
2020	676
2019	124
2018	201
Prior	1,492
Revolving Loans	685
Total	4,555
Agricultural Portfolio Segment
Financing Receivable Recorded Investment [Line Items]
2022	39,434
2021	38,524
2020	45,765
2019	24,880
2018	24,672
Prior	48,792
Revolving Loans	17,120
Total	239,187
Agricultural Portfolio Segment | Pass
Financing Receivable Recorded Investment [Line Items]
2022	39,434
2021	38,169
2020	45,529
2019	24,802
2018	24,672
Prior	46,716
Revolving Loans	16,740
Total	236,062
Agricultural Portfolio Segment | Special Mention
Financing Receivable Recorded Investment [Line Items]
2022	0
2021	0
2020	0
2019	0
2018	0
Prior	0
Revolving Loans	250
Total	250
Agricultural Portfolio Segment | Substandard
Financing Receivable Recorded Investment [Line Items]
2022	0
2021	355
2020	236
2019	78
2018	0
Prior	2,076
Revolving Loans	130
Total	2,875
Residential real estate
Financing Receivable Recorded Investment [Line Items]
2022	69,471
2021	111,431
2020	78,306
2019	33,442
2018	24,043
Prior	152,810
Revolving Loans	3,984
Total	473,487
Residential real estate | Pass
Financing Receivable Recorded Investment [Line Items]
2022	69,471
2021	111,389
2020	77,984
2019	33,196
2018	23,947
Prior	144,706
Revolving Loans	3,984
Total	464,677
Residential real estate | Special Mention
Financing Receivable Recorded Investment [Line Items]
2022	0
2021	0
2020	71
2019	121
2018	77
Prior	129
Revolving Loans	0
Total	398
Residential real estate | Substandard
Financing Receivable Recorded Investment [Line Items]
2022	0
2021	42
2020	251
2019	125
2018	19
Prior	7,975
Revolving Loans	0
Total	8,412
Home Equity Lines Of Credit
Financing Receivable Recorded Investment [Line Items]
2022	0
2021	13
2020	137
2019	49
2018	81
Prior	3,522
Revolving Loans	128,494
Total	132,296
Home Equity Lines Of Credit | Pass
Financing Receivable Recorded Investment [Line Items]
2022	0
2021	0
2020	0
2019	0
2018	17
Prior	1,532
Revolving Loans	128,345
Total	129,894
Home Equity Lines Of Credit | Special Mention
Financing Receivable Recorded Investment [Line Items]
2022	0
2021	0
2020	0
2019	0
2018	0
Prior	0
Revolving Loans	48
Total	48
Home Equity Lines Of Credit | Substandard
Financing Receivable Recorded Investment [Line Items]
2022	0
2021	13
2020	137
2019	49
2018	64
Prior	1,990
Revolving Loans	101
Total	2,354
Consumer
Financing Receivable Recorded Investment [Line Items]
2022	86,771
2021	50,718
2020	35,291
2019	23,707
2018	12,875
Prior	12,960
Revolving Loans	7,987
Total	230,309
Consumer | Pass
Financing Receivable Recorded Investment [Line Items]
2022	86,710
2021	50,580
2020	35,022
2019	23,530
2018	12,791
Prior	12,744
Revolving Loans	7,987
Total	229,364
Consumer | Substandard
Financing Receivable Recorded Investment [Line Items]
2022	61
2021	138
2020	269
2019	177
2018	84
Prior	216
Revolving Loans	0
Total	$ 945

XML

Credit Quality Indicators (Details 3) - USD ($) $ in Thousands	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020
Financing Receivable Recorded Investment [Line Items]
ACL Balance	$ 27,282	$ 27,454	$ 29,386	$ 23,136	$ 24,806	$ 22,144
PCD Loans
Financing Receivable Recorded Investment [Line Items]
Loan balances	23,498
ACL Balance	690
Commercial real estate
Financing Receivable Recorded Investment [Line Items]
ACL Balance	14,813	14,859	15,879	11,561	12,290	10,824
Commercial real estate | PCD Loans
Financing Receivable Recorded Investment [Line Items]
Loan balances	21,373
ACL Balance	580
Commercial real estate | Commercial real estate, Owner occupied | PCD Loans
Financing Receivable Recorded Investment [Line Items]
Loan balances	1,601
ACL Balance	17
Commercial real estate | Commercial real estate, Non-owner occupied | PCD Loans
Financing Receivable Recorded Investment [Line Items]
Loan balances	19,518
ACL Balance	545
Commercial real estate | Commercial real estate, Other | PCD Loans
Financing Receivable Recorded Investment [Line Items]
Loan balances	254
ACL Balance	18
Commercial
Financing Receivable Recorded Investment [Line Items]
ACL Balance	3,682	3,893	4,949	3,730	4,600	5,073
Commercial | Commercial, Commercial and industrial | PCD Loans
Financing Receivable Recorded Investment [Line Items]
Loan balances	1,655
ACL Balance	107
Residential real estate
Financing Receivable Recorded Investment [Line Items]
ACL Balance	4,949	$ 4,915	$ 4,870	$ 4,118	$ 4,130	$ 3,643
Residential real estate | Residential real estate, 1-4 family residential | PCD Loans
Financing Receivable Recorded Investment [Line Items]
Loan balances	470
ACL Balance	$ 3

XML

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
Disaggregation Of Revenue [Line Items]
TOTAL NONINTEREST INCOME	$ 8,827	$ 9,015	$ 36,002	$ 28,655
Service Charges on Deposit Accounts
Disaggregation Of Revenue [Line Items]
Noninterest income	1,229	924	3,513	2,522
Debit Card and EFT Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	1,463	1,227	4,407	3,720
Trust Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	2,370	2,335	7,265	6,930
Insurance Agency Commissions
Disaggregation Of Revenue [Line Items]
Noninterest income	1,136	799	3,269	2,750
Retirement Plan Consulting Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	332	334	1,052	1,043
Investment Commissions
Disaggregation Of Revenue [Line Items]
Noninterest income	424	638	1,675	1,665
Operating Segments
Disaggregation Of Revenue [Line Items]
TOTAL NONINTEREST INCOME	8,827	9,015	36,002	28,655
Operating Segments | Service Charges on Deposit Accounts
Disaggregation Of Revenue [Line Items]
Noninterest income	1,229	924	3,513	2,522
Operating Segments | Debit Card and EFT Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	1,463	1,227	4,407	3,720
Operating Segments | Trust Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	2,370	2,335	7,265	6,930
Operating Segments | Insurance Agency Commissions
Disaggregation Of Revenue [Line Items]
Noninterest income	1,136	799	3,269	2,750
Operating Segments | Retirement Plan Consulting Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	332	334	1,052	1,043
Operating Segments | Investment Commissions
Disaggregation Of Revenue [Line Items]
Noninterest income	424	638	1,675	1,665
Operating Segments | Other
Disaggregation Of Revenue [Line Items]
Other (outside the scope of ASC 606)	1,873	2,758	14,821	10,025
Operating Segments | Trust Segment
Disaggregation Of Revenue [Line Items]
TOTAL NONINTEREST INCOME	2,702	2,669	16,692	7,973
Operating Segments | Trust Segment | Service Charges on Deposit Accounts
Disaggregation Of Revenue [Line Items]
Noninterest income	0	0	0	0
Operating Segments | Trust Segment | Debit Card and EFT Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	0	0	0	0
Operating Segments | Trust Segment | Trust Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	2,370	2,335	7,265	6,930
Operating Segments | Trust Segment | Insurance Agency Commissions
Disaggregation Of Revenue [Line Items]
Noninterest income	0	0	0	0
Operating Segments | Trust Segment | Retirement Plan Consulting Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	332	334	1,052	1,043
Operating Segments | Trust Segment | Investment Commissions
Disaggregation Of Revenue [Line Items]
Noninterest income	0	0	0	0
Operating Segments | Trust Segment | Other
Disaggregation Of Revenue [Line Items]
Other (outside the scope of ASC 606)	0	0	8,375	0
Operating Segments | Bank Segment
Disaggregation Of Revenue [Line Items]
TOTAL NONINTEREST INCOME	6,125	6,346	19,310	20,682
Operating Segments | Bank Segment | Service Charges on Deposit Accounts
Disaggregation Of Revenue [Line Items]
Noninterest income	1,229	924	3,513	2,522
Operating Segments | Bank Segment | Debit Card and EFT Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	1,463	1,227	4,407	3,720
Operating Segments | Bank Segment | Trust Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	0	0	0	0
Operating Segments | Bank Segment | Insurance Agency Commissions
Disaggregation Of Revenue [Line Items]
Noninterest income	1,136	799	3,269	2,750
Operating Segments | Bank Segment | Retirement Plan Consulting Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	0	0	0	0
Operating Segments | Bank Segment | Investment Commissions
Disaggregation Of Revenue [Line Items]
Noninterest income	424	638	1,675	1,665
Operating Segments | Bank Segment | Other
Disaggregation Of Revenue [Line Items]
Other (outside the scope of ASC 606)	$ 1,873	$ 2,758	$ 6,446	$ 10,025

XML

Revenue from Contracts with Customers (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue From Contract With Customer [Line Items]
Legal settlement	$ 0	$ 0	$ 8,375,000	$ 0
ASC 606
Revenue From Contract With Customer [Line Items]
Contingent debit card interchange fees	0		0
Contingent incentive fees	0		0
Contingent commission	0		$ 0
Percentage of insurance agency commissions representing total revenue			2.30%
Percentage of retirement plan consulting fees representing total revenue			0.80%
Percentage of investment commissions representing total revenue			1.20%
ASC 606 | Cetera
Revenue From Contract With Customer [Line Items]
Contingent investment commissions to be refunded	$ 0		$ 0

XML

Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financial Assets
Securities available for sale	$ 1,295,133	$ 1,427,677
Fair Value, Measurements, Recurring
Financial Assets
Total investment securities	1,309,895	1,442,626
U.S. Treasury and U.S. government sponsored entities
Financial Assets
Securities available for sale	127,816	90,831
U.S. Treasury and U.S. government sponsored entities | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	127,816	90,831
State and political subdivisions
Financial Assets
Securities available for sale	549,028	658,815
State and political subdivisions | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	549,028	658,815
Corporate bonds
Financial Assets
Securities available for sale	4,083	4,030
Corporate bonds | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	4,083	4,030
Mortgage-backed securities - residential
Financial Assets
Securities available for sale	561,282	655,186
Mortgage-backed securities - residential | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	561,282	655,186
Collateralized mortgage obligations | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	49,212	13,385
Small Business Administration
Financial Assets
Securities available for sale	3,712	5,430
Small Business Administration | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	3,712	5,430
Equity securities at fair value | Fair Value, Measurements, Recurring
Financial Assets
Equity securities	181	228
Other investments measured at net asset value | Fair Value, Measurements, Recurring
Financial Assets
Equity securities	14,581	14,721
Interest rate swaps | Fair Value, Measurements, Recurring
Financial Assets
Derivative Assets	5,805	4,261
Financial Liabilities
Derivative liabilities	5,805	4,261
Mortgage banking derivative - liability | Fair Value, Measurements, Recurring
Financial Liabilities
Derivative liabilities	203
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring
Financial Assets
Total investment securities	181	228
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury and U.S. government sponsored entities | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | State and political subdivisions | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate bonds | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Mortgage-backed securities - residential | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Collateralized mortgage obligations | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Small Business Administration | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity securities at fair value | Fair Value, Measurements, Recurring
Financial Assets
Equity securities	181	228
Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest rate swaps | Fair Value, Measurements, Recurring
Financial Assets
Derivative Assets	0	0
Financial Liabilities
Derivative liabilities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Mortgage banking derivative - liability | Fair Value, Measurements, Recurring
Financial Liabilities
Derivative liabilities	0
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring
Financial Assets
Total investment securities	1,295,131	1,427,674
Significant Other Observable Inputs (Level 2) | U.S. Treasury and U.S. government sponsored entities | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	127,816	90,831
Significant Other Observable Inputs (Level 2) | State and political subdivisions | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	549,028	658,815
Significant Other Observable Inputs (Level 2) | Corporate bonds | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	4,083	4,030
Significant Other Observable Inputs (Level 2) | Mortgage-backed securities - residential | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	561,280	655,183
Significant Other Observable Inputs (Level 2) | Collateralized mortgage obligations | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	49,212	13,385
Significant Other Observable Inputs (Level 2) | Small Business Administration | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	3,712	5,430
Significant Other Observable Inputs (Level 2) | Equity securities at fair value | Fair Value, Measurements, Recurring
Financial Assets
Equity securities	0	0
Significant Other Observable Inputs (Level 2) | Interest rate swaps | Fair Value, Measurements, Recurring
Financial Assets
Derivative Assets	5,805	4,261
Financial Liabilities
Derivative liabilities	5,805	4,261
Significant Other Observable Inputs (Level 2) | Mortgage banking derivative - liability | Fair Value, Measurements, Recurring
Financial Liabilities
Derivative liabilities	203
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring
Financial Assets
Total investment securities	2	3
Significant Unobservable Inputs (Level 3) | U.S. Treasury and U.S. government sponsored entities | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Significant Unobservable Inputs (Level 3) | State and political subdivisions | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Significant Unobservable Inputs (Level 3) | Corporate bonds | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Significant Unobservable Inputs (Level 3) | Mortgage-backed securities - residential | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	2	3
Significant Unobservable Inputs (Level 3) | Collateralized mortgage obligations | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Significant Unobservable Inputs (Level 3) | Small Business Administration | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Significant Unobservable Inputs (Level 3) | Equity securities at fair value | Fair Value, Measurements, Recurring
Financial Assets
Equity securities	0	0
Significant Unobservable Inputs (Level 3) | Interest rate swaps | Fair Value, Measurements, Recurring
Financial Assets
Derivative Assets	0	0
Financial Liabilities
Derivative liabilities	0	$ 0
Significant Unobservable Inputs (Level 3) | Mortgage banking derivative - liability | Fair Value, Measurements, Recurring
Financial Liabilities
Derivative liabilities	$ 0

XML

Fair Value (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value assets liabilities transfers amount between level 1 and level 2	$ 0	$ 0	$ 0	$ 0
Troubled debt restructurings	3,800		$ 3,800		$ 3,900
Maximum maturity period of short term borrowings			90 days
Measured Using Present Value of Cash Flows
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Troubled debt restructurings	846		$ 846		792
Collateral Dependent Loans
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Collateral dependent loans, unpaid principal balance with allowance recorded	1,200		1,200		3,200
Collateral dependent loans, allowance	$ 214		$ 214		$ 1,500

XML

Fair Value (Details 1) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs
Beginning Balance	$ 2	$ 3	$ 3	$ 4
Transfers from level 2	0	0	0	0
Repayments, calls and maturities	0	0	(1)	(1)
Ending Balance	$ 2	$ 3	$ 2	$ 3

XML

Fair Value (Details 2) - Fair Value, Nonrecurring - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Commercial
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		$ 1,654
Residential Real Estate
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	$ 56	82
Commercial real estate, Non-owner occupied
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	906
Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Residential Real Estate
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial real estate, Non-owner occupied
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	0
Significant Other Observable Inputs (Level 2) | Commercial
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		0
Significant Other Observable Inputs (Level 2) | Residential Real Estate
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	0	0
Significant Other Observable Inputs (Level 2) | Commercial real estate, Non-owner occupied
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	0
Significant Unobservable Inputs (Level 3) | Commercial
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		1,654
Significant Unobservable Inputs (Level 3) | Residential Real Estate
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	56	$ 82
Significant Unobservable Inputs (Level 3) | Commercial real estate, Non-owner occupied
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	$ 906

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Fair Value (Details 3) - Fair Value, Nonrecurring $ in Thousands	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Residential Real Estate
Fair value measurements for financial instruments
Recorded Investment	$ 56	$ 82
Commercial
Fair value measurements for financial instruments
Recorded Investment		1,654
Sales Comparison Valuation | Commercial real estate
Fair value measurements for financial instruments
Recorded Investment	$ 906
Sales Comparison Valuation | Commercial real estate | Minimum
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	(0.0613)
Sales Comparison Valuation | Commercial real estate | Maximum
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	0.1737
Sales Comparison Valuation | Commercial real estate | Weighted Average
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	0.20
Sales Comparison Valuation | Residential Real Estate
Fair value measurements for financial instruments
Recorded Investment	$ 56	$ 82
Sales Comparison Valuation | Residential Real Estate | Minimum
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	(0.1377)
Sales Comparison Valuation | Residential Real Estate | Minimum | Measurement Input, Comparability Adjustment
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent		(0.0384)
Sales Comparison Valuation | Residential Real Estate | Maximum
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	(0.0568)
Sales Comparison Valuation | Residential Real Estate | Maximum | Measurement Input, Comparability Adjustment
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent		0.0322
Sales Comparison Valuation | Residential Real Estate | Weighted Average
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	(0.1377)
Sales Comparison Valuation | Residential Real Estate | Weighted Average | Measurement Input, Comparability Adjustment
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent		(0.0012)
Sales Comparison Valuation | Commercial
Fair value measurements for financial instruments
Recorded Investment		$ 1,654
Sales Comparison Valuation | Commercial | Minimum | Measurement Input, Comparability Adjustment
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent		(0.4024)
Sales Comparison Valuation | Commercial | Maximum | Measurement Input, Comparability Adjustment
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent		0.5683
Sales Comparison Valuation | Commercial | Weighted Average | Measurement Input, Comparability Adjustment
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent		(0.1243)

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Fair Value (Details 4) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financial assets
Cash and cash equivalents, Carrying Amount	$ 79,981	$ 112,790
Regulatory stock, Carrying Amount	19,637	15,510
Loans held for sale, Carrying Amount	2,142	4,545
Loans, net, Carrying Amount	2,372,699	2,301,696
Financial liabilities
Deposits, Carrying Amount	3,567,151	3,547,235
Short-term borrowings	155,000	0
Long-term borrowings	88,098	87,758
Fair Value, Measurements, Recurring
Financial assets
Cash and cash equivalents, Fair Value	79,981	112,790
Loans held for sale, Fair Value	2,142	4,681
Loans, net, Fair Value	2,309,191	2,285,554
Financial liabilities
Deposits, Fair Value	3,550,560	3,543,230
Short-term borrowings, Fair Value	155,000
Long-term borrowings, Fair Value	73,109	92,433
Fair Value, Measurements, Recurring | Level 1
Financial assets
Cash and cash equivalents, Fair Value	20,814	29,150
Loans held for sale, Fair Value	0	0
Loans, net, Fair Value	0	0
Financial liabilities
Deposits, Fair Value	3,187,580	3,158,967
Short-term borrowings, Fair Value	0
Long-term borrowings, Fair Value	0	0
Fair Value, Measurements, Recurring | Level 2
Financial assets
Cash and cash equivalents, Fair Value	59,167	83,640
Loans held for sale, Fair Value	2,142	4,681
Loans, net, Fair Value	0	0
Financial liabilities
Deposits, Fair Value	362,980	384,263
Short-term borrowings, Fair Value	155,000
Long-term borrowings, Fair Value	73,109	92,433
Fair Value, Measurements, Recurring | Level 3
Financial assets
Cash and cash equivalents, Fair Value	0	0
Loans held for sale, Fair Value	0	0
Loans, net, Fair Value	2,309,191	2,285,554
Financial liabilities
Deposits, Fair Value	0	0
Short-term borrowings, Fair Value	0
Long-term borrowings, Fair Value	$ 0	$ 0

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Goodwill and Intangible Assets (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill associated with the Company's acquisition and other past acquisitions	$ 94,640		$ 94,640		$ 94,240
Goodwill impairment				$ 0
Aggregate amortization expense	$ 432	$ 316	$ 1,271	$ 948

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Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Acquired intangible assets
Gross Carrying Amount	$ 21,659	$ 21,026
Accumulated Amortization	(13,931)	(12,660)
Customer Relationships
Acquired intangible assets
Gross Carrying Amount	7,210	7,210
Accumulated Amortization	(6,755)	(6,641)
Non-compete contracts
Acquired intangible assets
Gross Carrying Amount	457	430
Accumulated Amortization	(398)	(392)
Trade Name
Acquired intangible assets
Gross Carrying Amount	1,126	520
Accumulated Amortization	(391)	(356)
Core Deposits
Acquired intangible assets
Gross Carrying Amount	12,866	12,866
Accumulated Amortization	$ (6,387)	$ (5,271)

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Goodwill and Intangible Assets (Details 1) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Finite Lived Intangible Assets Future Amortization Expense [Abstract]
2022 (3 months)	$ 424
2023	1,247
2024	943
2025	878
2026	781
Thereafter	3,455
Total	$ 7,728	$ 8,366

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Leases (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Lessee Lease Description [Line Items]
Operating leases options to extend [true false]			true
Operating leases options to terminate the lease			7 months
Operating lease, description			The Company has operating leases for branch office locations, vehicles and certain office equipment such as printers, copiers and faxes. The leases have remaining lease terms of up to 17.6 years, some of which include options to extend the lease for up to 15 years and some of which include options to terminate the lease in 7 months.
Operating lease, right-of-use asset	$ 8,500		$ 8,500		$ 6,400
Operating lease, liability	$ 8,777		$ 8,777		$ 6,600
Operating Lease, Liability, Statement of Financial Position [Extensible List]	Other liabilities		Other liabilities		Other liabilities
Operating lease, payments	$ 252	$ 206	$ 706	$ 610
Finance leases, interest expense	51	44	127	116
Finance leases, amortization expense	$ 202	$ 124	$ 534	$ 366
Average remaining lease term			6 years 9 months 29 days
Weighted-average discount rate	2.81%		2.81%
Maximum
Lessee Lease Description [Line Items]
Operating leases remaining lease terms	17 years 7 months 6 days		17 years 7 months 6 days
Operating leases options to extend			15 years

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Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Leases [Abstract]
2022 (3 months)	$ 264
2023	1,060
2024	892
2025	851
2026	817
Thereafter	6,659
Total Payments	10,543
Less: Imputed Interest	(1,766)
Total	$ 8,777	$ 6,600

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Derivative Financial Instruments (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Not Designated as Hedging Instrument | Interest Rate Lock Commitments
Derivative [Line Items]
Net Gain or Loss recognized in earnings	$ 283,000		$ 535,000
Derivative Assets	11,600,000		11,600,000		$ 25,700,000
Not Designated as Hedging Instrument | Forward Sales of Mortgage Backed Securities
Derivative [Line Items]
Net Gain or Loss recognized in earnings	363,000		386,000
Derivative Assets	8,000,000.0		8,000,000.0
Not Designated as Hedging Instrument | Forward Commitments for Future Residential Mortgage Loans
Derivative [Line Items]
Derivative Assets	600,000		600,000
Interest rate swaps
Derivative [Line Items]
Derivative notional amount	72,900,000		72,900,000		86,100,000
Fair value, other assets	5,800,000		5,800,000		4,000,000.0
Fair value, other liabilities	5,800,000		5,800,000		$ 4,000,000.0
Net Gain or Loss recognized in earnings	$ 0	$ 0	$ 0	$ 0

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Basic EPS
Net income	$ 15,446	$ 15,951	$ 15,844	$ 16,011	$ 15,575	$ 14,556	$ 47,241	$ 46,142
Weighted average shares outstanding	33,851,596			28,246,206			33,840,958	28,235,732
Basic earnings per share	$ 0.46			$ 0.57			$ 1.40	$ 1.63
Diluted EPS
Net income	$ 15,446	$ 15,951	$ 15,844	$ 16,011	$ 15,575	$ 14,556	$ 47,241	$ 46,142
Weighted average shares outstanding	33,851,596			28,246,206			33,840,958	28,235,732
Dilutive effect of restricted stock awards	80,286			114,355			84,473	102,813
Weighted average shares for diluted earnings per share	33,931,882			28,360,561			33,925,431	28,338,545
Diluted earnings per share	$ 0.46			$ 0.56			$ 1.39	$ 1.63

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Earnings Per Share (Details Textual) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Restricted Stock Awards
Earnings Per Share Basic [Line Items]
Anti-dilutive securities excluded from computation of earnings per share	124,492	17,495	188,992	91,247

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Stock Based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Apr. 30, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
2017 Incentive Plan | Time Based Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share awards granted under equity incentive plan				75,768
2017 Incentive Plan | Performance Based Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share awards granted under equity incentive plan				56,724
2022 Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares vested				86,252
Number of shares vested, weighted average fair value				$ 17.32
2022 Incentive Plan | Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum shares available under equity incentive plan	1,000,000
Number of shares available for grant		943,500		943,500
Stock based compensation expense		$ 513	$ 278	$ 1,300	$ 865
Unrecognized compensation expense		$ 3,600		$ 3,600
Compensation cost not yet recognized, period for recognition				2 years 4 months 24 days
2022 Incentive Plan | Time Based Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share awards granted under equity incentive plan	6,500			132,268	38,061
Number of shares vested				20,771	26,621
Number of shares vested, weighted average fair value				$ 16.81	$ 14.41
2022 Incentive Plan | Performance Based Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share awards granted under equity incentive plan				56,724	58,245
Number of shares vested				65,481	52,327
Number of shares vested, weighted average fair value				$ 17.48	$ 14.34

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Stock Based Compensation (Details) - $ / shares	1 Months Ended	9 Months Ended
	Apr. 30, 2022	Sep. 30, 2022	Sep. 30, 2021
2017 Incentive Plan | Time Based Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted, Maximum Awarded Units		75,768
2017 Incentive Plan | Performance Based Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted, Maximum Awarded Units		56,724
2022 Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vested, Maximum Awarded Units		(86,252)
Vested, Weighted Average Grant Date Fair Value		$ 17.32
2022 Incentive Plan | Time Based Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Beginning balance - non-vested shares, Maximum Awarded Unit		99,564	67,765
Granted, Maximum Awarded Units	6,500	132,268	38,061
Vested, Maximum Awarded Units		(20,771)	(26,621)
Forfeited, Maximum Awarded Units		(3,000)	(4,758)
Ending balance - non-vested shares, Maximum Awarded Unit		208,061	74,447
Beginning balance - non-vested shares, Weighted Average Grant Date Fair Value		$ 16.13	$ 14.32
Granted, Weighted Average Grant Date Fair Value		16.63	15.45
Vested, Weighted Average Grant Date Fair Value		16.81	14.41
Forfeited, Weighted Average Grant Date Fair Value		13.68	14.15
Ending balance - non-vested shares, Weighted Average Grant Date Fair Value		$ 16.72	$ 14.94
2022 Incentive Plan | Performance Based Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Beginning balance - non-vested shares, Maximum Awarded Unit		158,988	153,070
Granted, Maximum Awarded Units		56,724	58,245
Vested, Maximum Awarded Units		(65,481)	(52,327)
Forfeited, Maximum Awarded Units		(12,862)	0
Ending balance - non-vested shares, Maximum Awarded Unit		137,369	158,988
Beginning balance - non-vested shares, Weighted Average Grant Date Fair Value		$ 14.40	$ 14.46
Granted, Weighted Average Grant Date Fair Value		17.25	14.21
Vested, Weighted Average Grant Date Fair Value		17.48	14.34
Forfeited, Weighted Average Grant Date Fair Value		14.74	0
Ending balance - non-vested shares, Weighted Average Grant Date Fair Value		$ 15.85	$ 14.40

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Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands		3 Months Ended						9 Months Ended
		Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Unrealized holding losses on available-for-sale securities during the period		$ (83,980)			$ (2,754)			$ (301,874)	$ (8,990)
Reclassification adjustment for (gains) losses included in net income, pre-tax	[1]	5			(464)			36	(848)
Net unrealized holding losses		(83,975)			(3,218)			(301,838)	(9,838)
Change in funded status of post-retirement health plan, pre-tax		(2)						(6)
Net other comprehensive (loss), pre-tax		(83,977)			(3,218)			(301,844)	(9,838)
Unrealized holding (losses) on available-for-sale securities during the period		17,636			578			63,394	1,888
Tax provision related to net realized gain	[1]	(1)			96			(8)	178
Net unrealized losses on available-for-sale securities		17,635			674			63,386	2,066
Change in funded status of post-retirement health plan, tax		0						1
Net other comprehensive (loss), tax		17,635			674			63,387	2,066
Unrealized holding (losses) on available-for-sale securities during the period		(66,344)			(2,176)			(238,480)	(7,102)
Reclassification adjustment for (gains) losses included in net income, after-tax	[1]	4			(368)			28	(670)
Unrealized holding losses, net of reclassification and tax		(66,340)			(2,544)			(238,452)	(7,772)
Change in funded status of post-retirement plan, net of tax		(2)			0			(5)	0
Other comprehensive loss, net of tax		$ (66,342)	$ (83,320)	$ (88,795)	$ (2,544)	$ 6,872	$ (12,100)	$ (238,457)	$ (7,772)

[1] Pre-tax reclassification adjustments relating to available-for-sale securities are reported in security gains and the tax impact is included in income tax expense on the consolidated statements of income.

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Regulatory Capital Matters (Details Textual)	Sep. 30, 2022	Dec. 31, 2021
Regulatory Matters (Additional Textual) [Abstract]
Common equity tier 1 capital to risk-weighted assets, capital conservation buffer ratio	2.50%
Tier 1 capital to risk-weighted assets, capital conservation buffer ratio	2.50%
Total capital to risk-weighted assets, capital conservation buffer ratio	2.50%
Minimum ratio of common equity tier 1 capital to risk-weighted assets	4.50%	4.50%
Minimum ratio of tier 1 capital to risk-weighted assets	0.060	0.060
Minimum ratio of total capital to risk-weighted assets	0.080	0.080
Minimum leverage ratio	0.040	0.040
Farmers National Banc Corp
Regulatory Matters (Additional Textual) [Abstract]
Minimum ratio of common equity tier 1 capital to risk-weighted assets	4.50%	4.50%
Minimum ratio of tier 1 capital to risk-weighted assets	0.060	0.060
Minimum ratio of total capital to risk-weighted assets	0.080	0.080
Minimum leverage ratio	0.040	0.040

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Regulatory Capital Matters (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Common equity tier 1 capital ratio
Actual, Amount	$ 394,738	$ 362,950
Actual, Ratio	13.36%	13.16%
Requirement for Capital Adequacy Purposes, Amount	$ 132,921	$ 124,066
Requirement for Capital Adequacy Purposes, Ratio	4.50%	4.50%
Total risk based capital ratio
Actual, Amount	$ 515,020	$ 485,336
Actual, Ratio	0.1744	0.1760
Requirement for Capital Adequacy Purposes, Amount	$ 236,303	$ 220,562
Requirement for Capital Adequacy Purposes, Ratio	0.080	0.080
Tier 1 risk based capital ratio
Actual, Amount	$ 412,738	$ 380,950
Actual, Ratio	0.1397	0.1382
Requirement for Capital Adequacy Purposes, Amount	$ 177,228	$ 165,422
Requirement for Capital Adequacy Purposes, Ratio	0.060	0.060
Tier 1 leverage ratio
Actual, Amount	$ 412,738	$ 380,950
Actual, Ratio	0.1024	0.1012
Requirement for Capital Adequacy Purposes, Amount	$ 161,179	$ 150,629
Requirement for Capital Adequacy Purposes, Ratio	0.040	0.040
Farmers National Banc Corp
Common equity tier 1 capital ratio
Actual, Amount	$ 358,723	$ 345,065
Actual, Ratio	12.18%	12.55%
Requirement for Capital Adequacy Purposes, Amount	$ 132,490	$ 123,712
Requirement for Capital Adequacy Purposes, Ratio	4.50%	4.50%
To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 191,374	$ 178,695
To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	6.50%	6.50%
Total risk based capital ratio
Actual, Amount	$ 386,005	$ 374,451
Actual, Ratio	0.1311	0.1362
Requirement for Capital Adequacy Purposes, Amount	$ 235,537	$ 219,933
Requirement for Capital Adequacy Purposes, Ratio	0.080	0.080
To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 294,421	$ 274,916
To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	0.100	0.100
Tier 1 risk based capital ratio
Actual, Amount	$ 358,723	$ 345,065
Actual, Ratio	0.1218	0.1255
Requirement for Capital Adequacy Purposes, Amount	$ 176,653	$ 164,950
Requirement for Capital Adequacy Purposes, Ratio	0.060	0.060
To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 235,537	$ 219,933
To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	0.080	0.080
Tier 1 leverage ratio
Actual, Amount	$ 358,723	$ 345,065
Actual, Ratio	0.0844	0.0919
Requirement for Capital Adequacy Purposes, Amount	$ 169,940	$ 150,217
Requirement for Capital Adequacy Purposes, Ratio	0.040	0.040
To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 212,425	$ 187,772
To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	0.050	0.050

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Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Segment Reporting Information [Line Items]
Goodwill and other intangibles	$ 102,368						$ 102,368		$ 102,606
Total assets	4,120,022						4,120,022		4,142,749
Net interest income	31,781			$ 26,534			94,734	$ 78,291
Provision for credit losses and unfunded loans	448			(948)			706	(473)
Service fees, security gains and other noninterest income	8,827			9,015			36,002	28,655
Noninterest expense	20,265			16,300			69,841	49,085
Amortization and depreciation expense	1,134			828			3,475	2,430
INCOME BEFORE INCOME TAXES	18,761			19,369			56,714	55,904
Income taxes	3,315			3,358			9,473	9,762
NET INCOME	15,446	$ 15,951	$ 15,844	16,011	$ 15,575	$ 14,556	47,241	46,142
Eliminations And Others
Segment Reporting Information [Line Items]
Goodwill and other intangibles	(4,263)						(4,263)		(4,263)
Total assets	6,263						6,263		3,854
Net interest income	(875)			(295)			(2,473)	(400)
Provision for credit losses and unfunded loans	0			0			0	0
Service fees, security gains and other noninterest income	(152)			(77)			(361)	(128)
Noninterest expense	657			(12)			1,234	(409)
Amortization and depreciation expense	113			108			340	244
INCOME BEFORE INCOME TAXES	(1,797)			(468)			(4,408)	(363)
Income taxes	(352)			(150)			(1,014)	(286)
NET INCOME	(1,445)			(318)			(3,394)	(77)
Trust Segment | Operating Segments
Segment Reporting Information [Line Items]
Goodwill and other intangibles	5,758						5,758		5,814
Total assets	13,338						13,338		14,365
Net interest income	54			31			126	94
Provision for credit losses and unfunded loans	0			0			0	0
Service fees, security gains and other noninterest income	2,731			2,707			16,768	8,108
Noninterest expense	1,666			1,726			7,049	4,818
Amortization and depreciation expense	27			67			83	194
INCOME BEFORE INCOME TAXES	1,092			945			9,762	3,190
Income taxes	229			198			2,049	669
NET INCOME	863			747			7,713	2,521
Bank Segment | Operating Segments
Segment Reporting Information [Line Items]
Goodwill and other intangibles	100,873						100,873		101,055
Total assets	4,100,421						4,100,421		$ 4,124,530
Net interest income	32,602			26,798			97,081	78,597
Provision for credit losses and unfunded loans	448			(948)			706	(473)
Service fees, security gains and other noninterest income	6,248			6,385			19,595	20,675
Noninterest expense	17,942			14,586			61,558	44,676
Amortization and depreciation expense	994			653			3,052	1,992
INCOME BEFORE INCOME TAXES	19,466			18,892			51,360	53,077
Income taxes	3,438			3,310			8,438	9,379
NET INCOME	$ 16,028			$ 15,582			$ 42,922	$ 43,698

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Short-term borrowings (Details Textual)	9 Months Ended
	Sep. 30, 2022 USD ($) Bank	Dec. 31, 2021 USD ($)
Domestic Line of Credit
Short Term Debt [Line Items]
Access to lines of credit at domestic banks	$ 35,000,000
Number of domestic banks | Bank	2
Unsecured revolving line of credit, outstanding balance	$ 0	$ 0
Revolving Credit Facility
Short Term Debt [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.50%
Revolving Credit Facility | Farmers National Banc Corp | Unsecured Debt
Short Term Debt [Line Items]
Unsecured revolving line of credit, outstanding balance	$ 6,500,000
Letter of Credit
Short Term Debt [Line Items]
Unsecured revolving line of credit, outstanding balance	$ 0	0
Debt Instrument, Interest Rate, Stated Percentage	3.50%
Pledged
Short Term Debt [Line Items]
Short-term Federal Home Loan Banks advances	$ 155,000,000	$ 0
Interest rate on borrowings	3.02%

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Long-term borrowings (Details Textual) - USD ($)				1 Months Ended
	Nov. 01, 2021	Jan. 07, 2020	Dec. 31, 2015	Nov. 30, 2021	Sep. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Long-rem advances from FHLB					$ 0	$ 0
Residential mortgage, commercial real estate, and multi-family loans					1,300,000,000	$ 1,200,000,000
Additional borrowing limit					$ 550,800,000
Cortland Bank
Debt Instrument [Line Items]
Business acquisition, date of merger agreement	Nov. 01, 2021
Long-term borrowings	$ 4,262,000
Subordinated Notes
Debt Instrument [Line Items]
Aggregate principal amount				$ 75,000,000.0
Maturity date				Dec. 15, 2031
Fixed rate				3.125%
Notes maturity term				5 years
Basis spread on variable rate				220.00%
Net proceeds from sale				$ 73,800,000
Junior Subordinated Debt Securities | Cortland Bank
Debt Instrument [Line Items]
Maturity date	Sep. 15, 2037
Business acquisition, date of merger agreement	Nov. 01, 2021
Long-term borrowings	$ 4,300,000
Interest rate, effective percentage					4.74%	1.65%
Junior Subordinated Debt Securities | Cortland Bank | 3-month LIBOR Rate
Debt Instrument [Line Items]
Basis spread on variable rate	1.45%
Junior Subordinated Debt Securities | Maple Leaf
Debt Instrument [Line Items]
Maturity date		Dec. 15, 2036
Business acquisition, date of merger agreement		Jan. 07, 2020
Interest rate, effective percentage					5.09%	1.90%
Junior Subordinated Debt Securities | Maple Leaf | 3-month LIBOR Rate
Debt Instrument [Line Items]
Basis spread on variable rate		1.80%
Junior Subordinated Debt Securities | National Bancshares Corporation
Debt Instrument [Line Items]
Maturity date			Jun. 15, 2035
Interest rate, effective percentage					4.99%	2.00%
Junior Subordinated Debt Securities | National Bancshares Corporation | 3-month LIBOR Rate
Debt Instrument [Line Items]
Basis spread on variable rate			1.70%

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Long-term borrowings (Details 1) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Total junior subordinated debentures owed to unconsolidated subsidiary trusts	$ 14,234	$ 13,988
Subordinated debentures	73,864	73,770
TSEO Statutory Trust I
Debt Instrument [Line Items]
Total junior subordinated debentures owed to unconsolidated subsidiary trusts	2,460	2,424
Maple Leaf Financial Statutory Trust II
Debt Instrument [Line Items]
Total junior subordinated debentures owed to unconsolidated subsidiary trusts	7,461	7,293
Cortland Statutory Trust I
Debt Instrument [Line Items]
Total junior subordinated debentures owed to unconsolidated subsidiary trusts	$ 4,313	$ 4,271