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 June 30, 2023

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 July 31, 2023
Common Stock, No Par Value	37,487,680 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 Condensed Balance Sheets (Unaudited)	2
	Consolidated Condensed Statements of Income (Unaudited)	3
	Consolidated Condensed Statements of Comprehensive Income (Loss) (Unaudited)	4
	Consolidated Condensed Statements of Stockholders’ Equity (Unaudited)	5
	Consolidated Condensed Statements of Cash Flows (Unaudited)	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4	Controls and Procedures	47
PART II - OTHER INFORMATION		47
Item 1	Legal Proceedings	47
Item 1A	Risk Factors	47
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3	Defaults Upon Senior Securities	48
Item 4	Mine Safety Disclosures	48
Item 5	Other Information	48
Item 6	Exhibits	49
SIGNATURES		50
10-Q Certifications
Section 906 Certifications

1

CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)

FARMERS NATIONAL BANC CORP. AND SUBSIDIARIES

	(In Thousands of Dollars)
	June 30, 2023	December 31, 2022
ASSETS
Cash and due from banks	$29,800	$21,395
Federal funds sold and other	86,263	54,156
TOTAL CASH AND CASH EQUIVALENTS	116,063	75,551
Securities available for sale (Amortized cost $1,561,850 in 2023 and $1,534,512 in 2022)	1,316,878	1,268,025
Other investments	44,975	33,444
Loans held for sale, at fair value	2,197	858
Loans	3,155,200	2,404,750
Less allowance for credit losses	34,957	26,978
NET LOANS	3,120,243	2,377,772
Premises and equipment, net	53,696	39,173
Goodwill	167,907	94,640
Other intangibles, net	24,144	7,026
Bank owned life insurance	98,590	74,972
Other assets	128,761	110,739
TOTAL ASSETS	$5,073,454	$4,082,200
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing	$1,084,232	$896,957
Interest-bearing	3,165,381	2,526,760
Brokered time deposits	21,135	138,051
TOTAL DEPOSITS	4,270,748	3,561,768
Short-term borrowings	300,000	95,000
Long-term borrowings	88,437	88,211
Other liabilities	47,278	44,926
TOTAL LIABILITIES	4,706,463	3,789,905
Commitments and contingent liabilities
Stockholders' Equity:
Common Stock - Authorized 50,000,000 shares in 2023 and 2022; 39,321,709 shares issued in 2023 and 35,128,962 in 2022; 37,457,253 and 34,055,125 shares outstanding, respectively	364,644	305,340
Retained earnings	221,612	212,375
Accumulated other comprehensive (loss)	(193,528)	(210,490)
Treasury stock, at cost; 1,864,456 and 1,073,837 shares in 2023 and 2022, respectively	(25,737)	(14,930)
TOTAL STOCKHOLDERS' EQUITY	366,991	292,295
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$5,073,454	$4,082,200

See accompanying notes

2

CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)

FARMERS NATIONAL BANC CORP. AND SUBSIDIARIES

	(In Thousands except Per Share Data)
	For the Three Months Ended						For the Six Months Ended
	June 30, 2023			June 30, 2022			June 30, 2023		June 30, 2022
INTEREST AND DIVIDEND INCOME
Loans, including fees	$	42,331		$	25,714		$	83,187	$	51,276
Taxable securities		6,654			5,223			13,204		9,810
Tax exempt securities		2,674			3,038			5,515		5,990
Dividends		594			216			970		346
Federal funds sold and other interest income		551			95			1,161		143
TOTAL INTEREST AND DIVIDEND INCOME		52,804			34,286			104,037		67,565
INTEREST EXPENSE
Deposits		14,491			1,651			27,198		2,895
Short-term borrowings		2,727			97			3,648		98
Long-term borrowings		1,008			827			2,003		1,619
TOTAL INTEREST EXPENSE		18,226			2,575			32,849		4,612
NET INTEREST INCOME		34,578			31,711			71,188		62,953
Provision (credit) for credit losses		(255	)		482			8,050		(448	)
Provision for unfunded loans		280			134			574		706
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		34,553			31,095			62,564		62,695
NONINTEREST INCOME
Service charges on deposit accounts		1,501			1,139			2,933		2,284
Bank owned life insurance income		584			405			1,131		814
Trust fees		2,248			2,376			4,835		4,895
Insurance agency commissions		1,332			1,086			2,788		2,133
Security gains (losses), including fair value changes for equity securities		13			(60	)		134		(71	)
Retirement plan consulting fees		382			323			689		720
Investment commissions		476			557			869		1,251
Net gains on sale of loans		406			365			716		1,494
Other mortgage banking income, net		234			39			387		99
Debit card and EFT fees		1,810			1,528			3,599		2,944
Legal settlement		0			0			0		8,375
Other operating income		463			1,719			1,793		2,237
TOTAL NONINTEREST INCOME		9,449			9,477			19,874		27,175
NONINTEREST EXPENSES
Salaries and employee benefits		13,625			11,073			28,270		22,904
Occupancy and equipment		3,859			2,918			7,728		5,598
FDIC insurance and state and local taxes		1,494			979			2,716		1,924
Professional fees		1,190			1,056			2,304		4,191
Merger related costs		442			674			4,755		2,614
Advertising		478			487			887		879
Intangible amortization		1,222			419			2,131		839
Core processing charges		1,144			1,123			2,308		1,868
Charitable donation		0			0			0		6,000
Other operating expenses		2,932			2,732			6,009		5,100
TOTAL NONINTEREST EXPENSES		26,386			21,461			57,108		51,917
INCOME BEFORE INCOME TAXES		17,616			19,111			25,330		37,953
INCOME TAXES		2,650			3,160			3,289		6,158
NET INCOME	$	14,966		$	15,951		$	22,041	$	31,795
EARNINGS PER SHARE - basic	$	0.40		$	0.47		$	0.59	$	0.94
EARNINGS PER SHARE - diluted	$	0.40		$	0.47		$	0.59	$	0.94

See accompanying notes

3

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

FARMERS NATIONAL BANC CORP. AND SUBSIDIARIES

	(In Thousands of Dollars)
	For the Three Months Ended						For the Six Months Ended
	June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022
NET INCOME	$	14,966		$	15,951		$	22,041		$	31,795
Other comprehensive income (loss):
Net unrealized holding (losses) gains on available for sale securities		(21,309	)		(105,497	)		21,591			(217,894	)
Reclassification adjustment for losses (gains) realized in income		0			31			(120	)		31
Net unrealized holding (losses) gains		(21,309	)		(105,466	)		21,471			(217,863	)
Income tax effect		4,475			22,148			(4,509	)		45,751
Unrealized holding (losses) gains, net of reclassification and tax		(16,834	)		(83,318	)		16,962			(172,112	)
Change in funded status of post-retirement plan, net of tax		0			(2	)		0			(3	)
Other comprehensive (loss) income, net of tax		(16,834	)		(83,320	)		16,962			(172,115	)
TOTAL COMPREHENSIVE (LOSS) INCOME	$	(1,868	)	$	(67,369	)	$	39,003		$	(140,320	)

See accompanying notes

4

CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

FARMERS NATIONAL BANC CORP. AND SUBSIDIARIES

(Table Dollar Amounts in Thousands except Per Share Data)

							Accumulated
							Other
	Common			Retained			Comprehensive			Treasury
	Stock			Earnings			Income (Loss)			Stock			Total
Balance December 31, 2022	$	305,340		$	212,375		$	(210,490	)	$	(14,930	)	$	292,295
Net income					7,075									7,075
Other comprehensive income								33,796						33,796
Share issuance as part of a business combination		59,202												59,202
Restricted share issuance		(432	)								437			5
Restricted share forfeitures		21									(21	)		0
Stock based compensation expense		615												615
Vesting of Long Term Incentive Plan		(428	)								431			3
Share forfeitures for taxes											(252	)		(252	)
Treasury share purchases											(11,660	)		(11,660	)
Dividends paid at $0.17 per share					(6,437	)								(6,437	)
Balance March 31, 2023	$	364,318		$	213,013		$	(176,694	)	$	(25,995	)	$	374,642
Net income					14,966									14,966
Other comprehensive (loss)								(16,834	)					(16,834	)
Restricted share issuance		(323	)								326			3
Stock based compensation expense		649												649
Share forfeitures for taxes											(68	)		(68	)
Dividends paid at $0.17 per share					(6,367	)								(6,367	)
Balance June 30, 2023	$	364,644		$	221,612		$	(193,528	)	$	(25,737	)	$	366,991
							Accumulated
							Other
	Common			Retained			Comprehensive			Treasury
	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

See accompanying notes.

5

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

FARMERS NATIONAL BANC CORP. AND SUBSIDIARIES

	(In Thousands of Dollars)
	Six Months Ended
	June 30, 2023			June 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	22,041		$	31,795
Adjustments to reconcile net income to net cash from operating activities:
Provision (credit) for credit losses		8,050			(448	)
Provision for unfunded loans		574			706
Depreciation and amortization		4,101			2,341
Net amortization of securities		450			2,708
Available for sale security (gains) losses		(120	)		31
Realized (gains) losses on equity securities		(14	)		40
Loss on premises and equipment sales and disposals, net		0			20
Stock compensation expense		1,264			803
Earnings on bank owned life insurance		(1,131	)		(814	)
Origination of loans held for sale		(19,634	)		(65,892	)
Proceeds from loans held for sale		21,945			69,128
Net gains on sale of loans		(716	)		(1,494	)
Net change in other assets and liabilities		(7,935	)		1,309
NET CASH FROM OPERATING ACTIVITIES		28,875			40,233
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and repayments of securities available for sale		30,034			45,241
Proceeds from sales of securities available for sale		69,918			1,670
Purchases of securities available for sale		(650	)		(201,518	)
Proceeds from sales of equity securities		24			35
Purchase of equity securities		(31	)		(38	)
Proceeds from maturities and repayments of SBIC funds		543			1,013
Purchases of SBIC funds		(531	)		(1,475	)
Proceeds from redemption of regulatory stock		13,951			5
Purchase of regulatory stock		(17,679	)		(3,572	)
Loan originations and payments, net		(10,436	)		(45,593	)
Proceeds from land and building sales		0			1,067
Additions to premises and equipment		779			(1,872	)
Net cash paid in business combinations		(13,175	)		0
NET CASH FROM INVESTING ACTIVITIES		72,747			(205,037	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits		(166,833	)		78,303
Net change in short-term borrowings		130,000			50,000
Cash dividends paid		(12,733	)		(10,831	)
Repurchase of common shares		(11,544	)		0
NET CASH FROM FINANCING ACTIVITIES		(61,110	)		117,472
NET CHANGE IN CASH AND CASH EQUIVALENTS		40,512			(47,332	)
Beginning cash and cash equivalents		75,551			112,790
Ending cash and cash equivalents	$	116,063		$	65,458
Supplemental cash flow information:
Interest paid	$	34,161		$	4,803
Supplemental noncash disclosures:
Issuance of stock awards	$	1,194		$	1,760
Issuance of stock for business combinations	$	59,202		$	0

See accompanying notes

6

NOTES TO UNAUDITED CONSOLIDATED CONDENSED 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 consolidated condensed 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 2022 Annual Report to Shareholders included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 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 June 30, 2023. Outstanding shares at June 30, 2023 were 37,457,253.

Comprehensive Income:

Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) 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. The Company adopted ASU 2022-02 on January 1, 2023. The adoption of this standard did not have a material effect on the Company’s operating results or financial condition.

On October 28, 2021, FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU requires contract assets and contract liabilities to be accounted for as if they (the acquirer) entered into the original contract at the same time and same date as the acquiree. This is a shift from existing guidance, which required the acquirer to recognize contract assets and contract liabilities at their fair value as of the acquisition date. The amendments in this Update were effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption of this standard did not have a material effect on the Company’s operating results or financial condition. Management determined that Emclaire had an immaterial amount of contracts with customers.

On March 12, 2020, the FASB issued ASU 2020-04 and amended by ASU 2021-01, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, to ease the burden of accounting for contract modifications related to reference rate reform. The amendments in ASU 2020-04 create a new Topic in the Codification, ASC 848, Reference Rate Reform, which contains guidance that is designed to simplify how entities account for contracts that are modified to replace LIBOR or other benchmark interest rates with new rates. The amendments in ASU 2020-04 give entities the option to apply expedients and exceptions to contract modifications that are made until December 31, 2022, if certain criteria are met. If adopted, these amendments and exceptions should be applied to all eligible modifications to contracts that are accounted for under an ASC Topic or industry Subtopic. The guidance in ASC 848 does not apply to any contract modifications that was made after December 31, 2022. In December 2022, the FASB issued ASU 2022-06 that defers the sunset date from December 31, 2022 to December 31, 2024. 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 January 1, 2023, the Company completed its previously announced merger with Emclaire Financial Corp., a Pennsylvania corporation and registered financial holding company (“Emclaire”), pursuant to the Agreement and Plan of Merger dated as of March 23, 2022. The Farmers National Bank of Emlenton, the banking subsidiary of Emclaire, merged with and into The Farmers National Bank of Canfield, the national banking subsidiary of the Company, with Farmers Bank as the surviving bank. Pursuant to the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”) Emclaire 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 The Farmers National Bank of Emlenton, the banking subsidiary of Emclaire, merged with and into The Farmers National Bank of Canfield, the national banking subsidiary of the Company, with Farmers Bank as the surviving bank. Pursuant to the terms of the Merger Agreement, at the effective time of the merger, each common share, without par value, of Emclaire common shares issued and outstanding was converted into the right to receive, without interest, $40.00 in cash or 2.15 common shares, without par value, of the Company's common shares, subject to an overall limitation of 70% of the Emclaire common shares being exchanged and the remaining 30% of Emclaire common shares being exchanged for the cash. The transaction created expansion for the Company in Pennsylvania and into the Pittsburgh market. The Company issued 4.2 million shares of its common stock along with cash of $33.4 million, which represented a transaction value of approximately $92.6 million based on its closing stock price of $14.12 on December 31, 2022.

In accordance with ASC 805, the Company expensed approximately $4.8 million of merger related costs, for the Emclaire acquisition, during the six month period ended June 30, 2023, in addition to $2.0 million expensed for the entire year of 2022. The Company recorded goodwill of $73.4 million as a result of the 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 Pennsylvania. 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 fair value estimates included in these financial statements are based on preliminary valuations; certain loan, deferred tax, and premises and equipment measurements have not been finalized and are subject to change. The Company does

8

not expect material variances from these estimates and expects that final valuation estimates will be completed prior to December 31, 2023.

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

(In Thousands of Dollars)
Consideration
Cash	$	33,440
Stock		59,202
Fair value of total consideration transferred	$	92,642
Fair value of assets acquired
Cash and cash equivalents	$	20,265
Securities available for sale		126,970
Other investments		7,795
Loans, net		740,659
Premises and equipment		16,103
Bank owned life insurance		22,485
Core deposit intangible		19,249
Current and deferred taxes		17,246
Other assets		6,387
Total assets acquired		977,159
Fair value of liabilities assumed
Deposits		875,813
Short-term borrowings		75,000
Accrued interest payable and other liabilities		7,104
Total liabilities		957,917
Net assets acquired	$	19,242
Goodwill created		73,400
Total net assets acquired	$	92,642

The fair value of net assets acquired includes fair value adjustments to certain receivables that were considered performing as of the acquisition date. The fair value adjustments were determined using the income method, discounted cash flow approach. However, the Company believes that all contractual cash flows related to these financial instruments will be collected. As such, these receivables were not considered purchase credit deteriorated ("PCD") at the acquisition date and were not subject to the guidance relating to PCD loans. Receivables acquired that were not subject to these requirements had a fair value and gross contractual amounts receivable of $714.4 million and $764.8 million on the date of acquisition.

The fair value of purchased financial assets that were classified as PCD loans are discussed in the loan footnote.

The following table presents unaudited pro forma information as if the Emclaire acquisition that occurred on January 1, 2023 actually took place on January 1, 2022. The unaudited pro forma information for the period ended June 30, 2022 includes adjustments of interest income on loans, amortization of core deposit intangibles arising from the transaction, interest expense on deposits and borrowings acquired. The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transaction been effective on the assumed date.

(In thousands of dollars except per share results)	For Three Months  Ended June 30, 2022		For Six Months  Ended June 30, 2022
Net interest income	$	43,126	$	85,127
Provision for credit losses		991		8,246
Noninterest income		10,427		29,133
Noninterest expense		28,253		69,426
Income before income taxes		24,309		36,588
Income tax expense		4,237		5,796
Net income	$	20,072	$	30,792
Basic earnings per share	$	0.53	$	0.81
Diluted earnings per share	$	0.53	$	0.81

9

On July 1, 2022, Farmers National Insurance, LLC acquired substantially all of the assets of Randy L. Jones Agency, Inc., doing business as Champion Insurance for $900 thousand. Intangible assets of $633 thousand were recorded along with goodwill of $267 thousand.

Securities:

The following table summarizes the amortized cost and fair value of the available for sale investment securities portfolio at June 30, 2023 and December 31, 2022 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
June 30, 2023
U.S. Treasury and U.S. government sponsored entities	$	155,169	$	99	$	(20,103	)	$	135,165
State and political subdivisions		648,030		951		(105,919	)		543,062
Corporate bonds		18,329		25		(722	)		17,632
Mortgage-backed securities		653,898		9		(112,783	)		541,124
Collateralized mortgage obligations		82,965		117		(6,286	)		76,796
Small Business Administration		3,459		0		(360	)		3,099
Totals	$	1,561,850	$	1,201	$	(246,173	)	$	1,316,878

			Gross		Gross
	Amortized		Unrealized		Unrealized
(In Thousands of Dollars)	Cost		Gains		Losses			Fair Value
December 31, 2022
U.S. Treasury and U.S. government sponsored    entities	$	149,712	$	0	$	(21,616	)	$	128,096
State and political subdivisions		651,705		266		(121,891	)		530,080
Corporate bonds		4,181		0		(302	)		3,879
Mortgage-backed securities - residential		672,784		12		(117,654	)		555,142
Collateralized mortgage obligations		52,291		0		(4,937	)		47,354
Small Business Administration		3,839		0		(365	)		3,474
Totals	$	1,534,512	$	278	$	(266,765	)	$	1,268,025

There were no sales of available for sale securities in the three month period ended June 30, 2023. Proceeds from the sale of available for sale securities were $69.9 million for the six month period ended June 30, 2023. Gross gains of $441 thousand and gross losses of $321 thousand were realized on these sales for the six month period ended June 30, 2023. In addition, realized gains on equity securities of $13 thousand and $14 thousand were recognized in the income statement during the three and six month periods as of June 30, 2023, respectively.

Proceeds from the sale of available for sale securities were $1.7 million for both the three and six month periods ended June 30, 2022. Gross losses of $31 thousand were realized on these sales for both the three and six month periods ended June 30, 2022. Realized losses on equity securities of $29 thousand and $40 thousand were recognized in the income statement during the three and six month periods as of June 30, 2022, respectively.

10

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.

	June 30, 2023
(In Thousands of Dollars)	Amortized Cost		Fair Value
Maturity
Within one year	$	716	$	706
One to five years		39,851		37,153
Five to ten years		180,584		159,597
Beyond ten years		600,377		498,403
Mortgage-backed, collateralized mortgage obligations and Small Business Administration securities		740,322		621,019
Total	$	1,561,850	$	1,316,878

The following table summarizes the available for sale investment securities with unrealized losses at June 30, 2023 and December 31, 2022, 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
June 30, 2023
U.S. Treasury and U.S. government sponsored entities	$	14,652	$	(692	)	$	115,535	$	(19,411	)	$	130,187	$	(20,103	)
State and political subdivisions		73,802		(2,835	)		432,373		(103,084	)		506,175		(105,919	)
Corporate bonds		11,011		(411	)		3,561		(311	)		14,572		(722	)
Mortgage-backed securities		4,678		(44	)		535,644		(112,739	)		540,322		(112,783	)
Collateralized mortgage obligations		28,977		(930	)		40,852		(5,356	)		69,829		(6,286	)
Small Business Administration		0		0			3,099		(360	)		3,099		(360	)
Total temporarily impaired	$	133,120	$	(4,912	)	$	1,131,064	$	(241,261	)	$	1,264,184	$	(246,173	)

	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, 2022
U.S. Treasury and U.S. government sponsored entities	$	52,311	$	(5,835	)	$	75,685	$	(15,781	)	$	127,996	$	(21,616	)
State and political subdivisions		306,709		(56,650	)		191,584		(65,241	)		498,293		(121,891	)
Corporate bonds		2,893		(122	)		986		(180	)		3,879		(302	)
Mortgage-backed securities - residential		101,476		(13,545	)		453,233		(104,109	)		554,709		(117,654	)
Collateralized mortgage obligations		42,140		(4,137	)		5,214		(800	)		47,354		(4,937	)
Small Business Administration		1,295		(122	)		2,179		(243	)		3,474		(365	)
Total temporarily impaired	$	506,824	$	(80,411	)	$	728,881	$	(186,354	)	$	1,235,705	$	(266,765	)

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 June 30, 2023, the Company’s security portfolio consisted of 988 securities, 899 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

11

subsequent to purchase, not credit deterioration. In addition, management has the ability and the intent to hold the securities for a period of time sufficient to allow for any recovery in fair value. As of June 30, 2023 the Company has not recorded an allowance for credit losses on AFS securities.

Loans:

Loan balances were as follows:

(In Thousands of Dollars)	June 30, 2023			December 31, 2022
Commercial real estate
Owner occupied	$	357,329		$	330,768
Non-owner occupied		697,486			563,652
Farmland		192,182			188,850
Other		230,160			133,630
Commercial
Commercial and industrial		362,664			293,643
Agricultural		58,625			58,087
Residential real estate
1-4 family residential		849,533			475,791
Home equity lines of credit		138,535			132,179
Consumer
Indirect		226,187			197,125
Direct		25,980			16,421
Other		8,159			7,714
Total loans	$	3,146,840		$	2,397,860
Net deferred loan costs		8,360			6,890
Allowance for credit losses		(34,957	)		(26,978	)
Net loans	$	3,120,243		$	2,377,772

Allowance for credit loss activity

The following tables present the activity in the allowance for credit losses by portfolio segment for the three and six month periods ended June 30, 2023 and 2022:

Three Months Ended June 30, 2023

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	19,819		$	5,230		$	6,732		$	4,230		$	36,011
PCD ACL on loans acquired		0			0			0			0			0
(Credit) Provision for credit losses		(1,125	)		639			131			100			(255	)
Loans charged off		(157	)		(591	)		(11	)		(212	)		(971	)
Recoveries		0			17			14			141			172
Total ending allowance balance	$	18,537		$	5,295		$	6,866		$	4,259		$	34,957

Six Months Ended June 30, 2023

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	14,840		$	4,186		$	4,374		$	3,578		$	26,978
PCD ACL on loans acquired		850			138			11			0			999
Provision for credit losses		3,003			1,683			2,529			835			8,050
Loans charged off		(157	)		(734	)		(94	)		(455	)		(1,440	)
Recoveries		1			22			46			301			370
Total ending allowance balance	$	18,537		$	5,295		$	6,866		$	4,259		$	34,957

12

Three Months Ended June 30, 2022

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate		Consumer			Total
Allowance for credit losses
Beginning balance	$	15,207		$	3,867		$	4,702	$	3,239		$	27,015
(Credit) Provision for credit losses		(349	)		70			197		564			482
Loans charged off		0			(46	)		0		(132	)		(178	)
Recoveries		1			2			16		116			135
Total ending allowance balance	$	14,859		$	3,893		$	4,915	$	3,787		$	27,454

Six Months Ended June 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		(1,021	)		341			51			181			(448	)
Loans charged off		0			(1,405	)		(34	)		(329	)		(1,768	)
Recoveries		1			8			28			247			284
Total ending allowance balance	$	14,859		$	3,893		$	4,915		$	3,787		$	27,454

The cumulative loss rate used as the basis for the estimate of credit losses is comprised of the Company's historical loss experience from December 31, 2011 to June 30, 2023. As of June 30, 2023, the Company expects that the markets in which it operates will experience minimal changes to economic conditions, stable trend in unemployment rate, and a level trend of delinquencies. Management adjusted historical loss experience for these expectations. No reversion adjustments were necessary, as the starting point for the Company's estimate was a cumulative loss rate covering the expected contractual term of the portfolio. While there are many factors that go into the calculation of the allowance for credit losses, the change in the balances from June 30, 2022 to June 30, 2023 is largely attributed to the Emlenton merger.

The following tables present the amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing as of June 30, 2023:

(In Thousands of Dollars)	Nonaccrual with no allowance for credit loss		Nonaccrual with an allowance for credit loss		Loans past due over 89 days still accruing
June 30, 2023
Commercial real estate
Owner occupied	$	679	$	486	$	0
Non-owner occupied		1,891		6,285		0
Farmland		2,059		113		0
Other		0		19		0
Commercial
Commercial and industrial		117		1,780		0
Agricultural		224		198		0
Residential real estate
1-4 family residential		269		2,096		594
Home equity lines of credit		274		242		112
Consumer
Indirect		10		296		57
Direct		65		86		1
Other		0		3		0
Total loans	$	5,588	$	11,604	$	764

13

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 December 31, 2022:

	December 31, 2022
(In Thousands of Dollars)	Nonaccrual		Loans Past Due 90 Days or More Still Accruing
Commercial real estate
Owner occupied	$	993	$	0
Non-owner occupied		3,031		0
Farmland		2,183		0
Other		33		0
Commercial
Commercial and industrial		3,840		50
Agricultural		299		0
Residential real estate
1-4 family residential		2,703		310
Home equity lines of credit		735		58
Consumer
Indirect		313		62
Direct		179		12
Other		2		0
Total loans	$	14,311	$	492

The following tables present the amortized cost basis of collateral-dependent loans by class of loans as of June 30, 2023:

(In Thousands of Dollars)	Real Estate		Business Assets		Vehicles		Cash
June 30, 2023
Commercial real estate
Owner occupied	$	801	$	0	$	0	$	0
Non-owner occupied		5,080		0		0		0
Farmland		2,059		0		0		0
Other		0		0		0		0
Commercial
Commercial and industrial		0		1,170		0		0
Agricultural		0		224		0		0
Residential real estate
1-4 family residential		1,576		0		0		0
Home equity lines of credit		331		0		0		0
Consumer
Indirect		0		0		48		0
Direct		0		0		24		66
Other		0		0		0		0
Total loans	$	9,847	$	1,394	$	72	$	66

14

The following tables present the aging of the recorded investment in past due loans as of June 30, 2023 and December 31, 2022 by class of loans.

(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
June 30, 2023
Commercial real estate
Owner occupied	$	345	$	0	$	1,165	$	1,510	$	355,556	$	357,066
Non-owner occupied		0		0		8,176		8,176		688,768		696,944
Farmland		321		0		2,172		2,493		189,452		191,945
Other		80		0		19		99		229,719		229,818
Commercial
Commercial and industrial		378		239		1,897		2,514		361,437		363,951
Agricultural		227		166		422		815		58,511		59,326
Residential real estate
1-4 family residential		8,256		979		2,959		12,194		837,014		849,208
Home equity lines of credit		214		108		628		950		137,617		138,567
Consumer
Indirect		822		79		363		1,264		232,945		234,209
Direct		81		16		152		249		25,758		26,007
Other		6		4		3		13		8,146		8,159
Total loans	$	10,730	$	1,591	$	17,956	$	30,277	$	3,124,923	$	3,155,200

(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, 2022
Commercial real estate
Owner occupied	$	159	$	0	$	993	$	1,152	$	329,305	$	330,457
Non-owner occupied		0		0		3,031		3,031		560,013		563,044
Farmland		0		0		2,183		2,183		186,399		188,582
Other		0		0		33		33		133,288		133,321
Commercial
Commercial and industrial		1,034		185		3,890		5,109		289,297		294,406
Agricultural		104		20		299		423		58,166		58,589
Residential real estate
1-4 family residential		4,247		1,775		3,013		9,035		466,313		475,348
Home equity lines of credit		115		92		793		1,000		131,209		132,209
Consumer
Indirect		1,267		298		375		1,940		202,683		204,623
Direct		234		70		191		495		15,962		16,457
Other		0		5		2		7		7,707		7,714
Total loans	$	7,160	$	2,445	$	14,803	$	24,408	$	2,380,342	$	2,404,750

Loan Restructurings

The Company adopted the accounting guidance in ASU No. 2022-02, effective as of January 1, 2023, which eliminates the recognition and measurement of troubled debt restructurings ("TDRs"). Due to the removal of the TDR designation, the Company evaluates all loan restructurings according to the accounting guidance for loan modifications to determine if the restructuring results in a new loan or a continuation of the existing loan. Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows include situations where there is principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and combinations of the listed modifications. Therefore, the disclosures related to loan restructurings are only for modifications that directly affect cash flows.

15

Any restructuring of a loan in which the borrower has experienced financial difficulty and the terms of the loan are more favorable than would generally be considered for borrowers with the same credit characteristics would be individually evaluated. Otherwise, the restructured loan remains in the appropriate segment in the ACL model.

The following table shows the amortized cost basis for the loans restructured during the three and six months ended June 30, 2023 to borrowers experiencing financial difficulty, disaggregrated by class of financing receivables:

Three Months Ended June 30, 2023	Restructured Loans
(In Thousands of Dollars)	Number of Contracts		Amortized Cost Basis		% of Total class of Financing receivable
Total accruing restructured loans		0	$	0		0.00	%
Nonaccrual restructured loans
Total nonaccrual restructured loans		0	$	0		0.00	%
Total restructured loans		0	$	0		0.00	%

Six Months Ended June 30, 2023	Restructured Loans
(In Thousands of Dollars)	Number of Contracts		Amortized Cost Basis		% of Total class of Financing receivable
Commercial
Commercial and industrial		1	$	50		0.01	%
Total accruing restructured loans		1	$	50		0.01	%
Nonaccrual restructured loans
Total nonaccrual restructured loans		0	$	0		0.00	%
Total restructured loans		1	$	50		0.01	%

During the first quarter of 2023 the Company modified a commercial line of credit as a restructured loan. This nonperforming loan was extended with payments deferred until maturity to allow the borrower to complete the remediation process needed to obtain a "No Further Action" letter from the EPA that is needed to finalize the sale of the real estate securing the loan. This loan is included as an individually evaluated loan with no specific reserve due to the anticipated sale of the real estate which will sufficiently retire the debt.

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that have been modified in the three and six months ended June 30, 2023:

Three Months Ended June 30, 2023	Payment status (Amortized cost Basis)
(In Thousands of Dollars)	Current		30-89 Days past due		90+ Days past due
Total accruing restructured loans	$	0	$	0	$	0
Nonaccrual restructured loans
Total nonaccrual restructured loans	$	0	$	0	$	0
Total restructured loans	$	0	$	0	$	0

Six Months Ended June 30, 2023	Payment status (Amortized cost Basis)
(In Thousands of Dollars)	Current		30-89 Days past due		90+ Days past due
Commercial
Commercial and industrial	$	50	$	0	$	0
Total accruing restructured loans	$	50	$	0	$	0
Nonaccrual restructured loans
Total nonaccrual restructured loans	$	0	$	0	$	0
Total restructured loans	$	50	$	0	$	0

As of June 30, 2023, the Company had no commitments to lend any additional funds on restructured loans. As of June 30, 2023, the Company had no loans that defaulted during the period and had been modified preceding the payment default when the borrower was experiencing financially difficulty at the time of modification. For purposes of this disclosure a default occurs when, within 12 months of the original modification, a loan is 30 days contractually past due under the modified terms.

16

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 June 30, 2023 and December 31, 2022, 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
June 30, 2023
Commercial real estate
Owner occupied	$	347,171	$	5,326	$	4,569	$	357,066
Non-owner occupied		646,559		22,362		28,023		696,944
Farmland		189,238		0		2,707		191,945
Other		222,049		7,550		219		229,818
Commercial
Commercial and industrial		347,795		7,142		9,014		363,951
Agricultural		58,869		0		457		59,326
Total loans	$	1,811,681	$	42,380	$	44,989	$	1,899,050

(In Thousands of Dollars)	Pass		Special Mention		Sub standard		Total
December 31, 2022
Commercial real estate
Owner occupied	$	324,979	$	1,193	$	4,285	$	330,457
Non-owner occupied		527,267		25,541		10,236		563,044
Farmland		186,057		0		2,525		188,582
Other		133,218		0		103		133,321
Commercial
Commercial and industrial		282,412		777		11,217		294,406
Agricultural		58,002		250		337		58,589
Total loans	$	1,511,935	$	27,761	$	28,703	$	1,568,399

17

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 June 30, 2023, other real estate owned and foreclosure properties were $34 thousand and $178 thousand, respectively. At December 31, 2022, other real estate owned and foreclosure properties were $0 and $129 thousand, respectively.

The following tables present the recorded investment in residential, consumer indirect and direct auto loans based on payment activity as of June 30, 2023 and December 31, 2022. 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
June 30, 2023
Performing	$	846,249	$	137,939	$	233,846	$	25,855	$	8,156
Nonperforming		2,959		628		363		152		3
Total loans	$	849,208	$	138,567	$	234,209	$	26,007	$	8,159

	Residential Real Estate				Consumer
(In Thousands of Dollars)	1-4 Family Residential		Home Equity Lines of Credit		Indirect		Direct		Other
December 31, 2022
Performing	$	472,335	$	131,416	$	204,248	$	16,266	$	7,712
Nonperforming		3,013		793		375		191		2
Total loans	$	475,348	$	132,209	$	204,623	$	16,457	$	7,714

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

	Term Loans Amortized Cost Basis by Origination Year
As of June 30, 2023	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total
Commercial real estate
Risk Rating
Pass	$	54,049	$	254,672	$	225,147	$	143,875	$	151,048	$	373,002	$	13,986	$	1,215,779
Special mention		0		0		4,496		12,838		8,515		9,389		0		35,238
Substandard		0		0		1,650		3,841		2,063		24,149		1,108		32,811
Total commercial real estate loans	$	54,049	$	254,672	$	231,293	$	160,554	$	161,626	$	406,540	$	15,094	$	1,283,828
Commercial real estate current period gross write-offs	$	0	$	0	$	0	$	0	$	1	$	156	$	0	$	157
Commercial and industrial
Risk Rating
Pass	$	63,363	$	97,102	$	48,716	$	29,047	$	13,470	$	29,190	$	66,907	$	347,795
Special mention		0		174		616		75		1,038		10		5,229		7,142
Substandard		228		3,408		333		783		294		1,006		2,962		9,014
Total commercial loans	$	63,591	$	100,684	$	49,665	$	29,905	$	14,802	$	30,206	$	75,098	$	363,951
Commercial and industrial current period gross write-offs	$	0	$	95	$	377	$	11	$	16	$	172	$	0	$	671
Agricultural
Risk Rating
Pass	$	18,279	$	53,234	$	32,543	$	41,069	$	21,627	$	64,050	$	17,305	$	248,107
Special mention		0		0		0		0		0		0		0		0
Substandard		0		0		369		216		61		2,390		128		3,164
Total agricultural loans	$	18,279	$	53,234	$	32,912	$	41,285	$	21,688	$	66,440	$	17,433	$	251,271
Agricultural current period gross write-offs	$	0	$	15	$	44	$	0	$	0	$	4	$	0	$	63
Residential real estate
Risk Rating
Pass	$	26,642	$	177,294	$	169,952	$	141,482	$	51,291	$	268,622	$	3,699	$	838,982
Special mention		0		0		0		68		113		159		0		340
Substandard		0		31		455		440		378		8,582		0		9,886
Total residential real estate loans	$	26,642	$	177,325	$	170,407	$	141,990	$	51,782	$	277,363	$	3,699	$	849,208
Residential real estate current period gross write-offs	$	0	$	0	$	0	$	0	$	0	$	82	$	0	$	82
Home equity lines of credit
Risk Rating
Pass	$	0	$	19	$	10	$	47	$	67	$	2,066	$	134,014	$	136,223
Special mention		0		0		0		0		0		0		38		38
Substandard		0		27		50		82		20		2,028		99		2,306
Total home equity lines of credit	$	0	$	46	$	60	$	129	$	87	$	4,094	$	134,151	$	138,567
Home equity lines of credit current period gross write-offs	$	0	$	0	$	0	$	8	$	0	$	4	$	0	$	12
Consumer
Risk Rating
Pass	$	44,887	$	87,410	$	40,831	$	27,009	$	16,462	$	43,017	$	7,843	$	267,459
Substandard		0		168		65		245		176		262		0		916
Total consumer loans	$	44,887	$	87,578	$	40,896	$	27,254	$	16,638	$	43,279	$	7,843	$	268,375
Consumer current period gross write-offs	$	0	$	113	$	46	$	76	$	30	$	157	$	33	$	455

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	Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2022	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total
Commercial real estate
Risk Rating
Pass	$	188,240	$	174,841	$	120,883	$	138,342	$	89,769	$	256,103	$	17,286	$	985,464
Special mention		0		711		1,861		5,286		624		18,252		0		26,734
Substandard		0		18		256		1,968		267		10,952		1,163		14,624
Total commercial real estate loans	$	188,240	$	175,570	$	123,000	$	145,596	$	90,660	$	285,307	$	18,449	$	1,026,822
Commercial
Risk Rating
Pass	$	100,368	$	45,872	$	34,110	$	16,854	$	13,574	$	14,664	$	56,970	$	282,412
Special mention		0		197		0		0		0		0		580		777
Substandard		3,642		1,331		356		152		110		1,761		3,865		11,217
Total commercial loans	$	104,010	$	47,400	$	34,466	$	17,006	$	13,684	$	16,425	$	61,415	$	294,406
Agricultural
Risk Rating
Pass	$	51,096	$	36,376	$	44,133	$	23,661	$	24,003	$	45,490	$	19,300	$	244,059
Special mention		0		0		0		0		0		0		250		250
Substandard		0		379		235		72		0		2,146		30		2,862
Total agricultural loans	$	51,096	$	36,755	$	44,368	$	23,733	$	24,003	$	47,636	$	19,580	$	247,171
Residential real estate
Risk Rating
Pass	$	83,951	$	112,463	$	76,095	$	31,404	$	22,918	$	135,757	$	3,956	$	466,544
Special mention		0		0		70		118		76		93		0		357
Substandard		0		136		249		121		9		7,932		0		8,447
Total residential real estate loans	$	83,951	$	112,599	$	76,414	$	31,643	$	23,003	$	143,782	$	3,956	$	475,348
Home equity lines of credit
Risk Rating
Pass	$	0	$	10	$	0	$	0	$	16	$	1,394	$	128,622	$	130,042
Special mention		0		0		0		0		0		0		49		49
Substandard		0		13		137		20		0		1,848		100		2,118
Total home equity lines of credit	$	0	$	23	$	137	$	20	$	16	$	3,242	$	128,771	$	132,209
Consumer
Risk Rating
Pass	$	98,530	$	46,945	$	32,284	$	20,849	$	10,918	$	10,942	$	7,302	$	227,770
Special mention		0		0		0		0		0		0		0		0
Substandard		102		113		267		230		109		202		1		1,024
Total consumer loans	$	98,632	$	47,058	$	32,551	$	21,079	$	11,027	$	11,144	$	7,303	$	228,794

The Company follows ASU 2016-13 to calculate the allowance for credit losses which requires projecting credit losses over the lifetime of the credits. The ACL is adjusted through the provision for credit losses and reduced by net charge offs of loans. Although the Company has a diversified loan portfolio, the credit risk in the loan portfolio is largely influenced by general economic conditions and trends of the counties and markets in which the debtors operate, and the resulting impact on the operations of borrowers or on the value of any underlying collateral.

The credit loss estimation process involves procedures that consider the unique characteristics of the Company’s loan portfolio segments. These segments are disaggregated into the loan pools for monitoring. A model of risk characteristics, such as loss history and delinquency experience, trends in past due and non-performing loans, as well as existing economic conditions and supportable forecasts are used to determine credit loss assumptions.

The Company uses two methodologies to analyze loan pools. The cohort method and the PD/LGD. Cohort relies on the creation of cohorts to capture loans that qualify for a particular segment, as of a point in time. Those loans are then tracked over their remaining lives to determine their loss experience. The Company aggregates financial assets on the basis of similar risk characteristics when evaluating loans on a collective basis. Those characteristics include, but aren’t limited to, internal or external credit score, risk ratings, financial asset, loan type, collateral type, size, effective interest rate, term, or geographical location. The Company uses cohort primarily for consumer loan portfolios.

The probability of default portion of PD/LGD is defined by the Company as 90 days past due, placed on non-accrual, loan restructuring for borrowers experiencing financial difficulty or is partially, or wholly, charged-off. Typically, a one-year time period is used to asses

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PD. PD can be measured and applied using various risk criteria. Risk rating is one common way to apply PDs. Loss given default LGD is to determine the percentage of loss by facility or collateral type. LGD estimates can sometimes be driven, or influenced, by product type, industry or geography. The Company uses PD/LGD primarily for commercial loan portfolios.

The following table presents the loan pools and the associated methodology used during the calculation of the allowance for credit losses in 2023.

Portfolio Segments	Loan Pool	Methodology	Loss Drivers
Residential real estate	1-4 Family Residential Real Estate - 1st Liens	Cohort	Credit Loss History
	1-4 Family Residential Real Estate - 2nd Liens	Cohort	Credit Loss History
Home Equity Lines of Credit	Home Equity Lines of Credit	Cohort	Credit Loss History
Consumer Finance	Cash Reserves	Cohort	Credit Loss History
	Direct	Cohort	Credit Loss History
	Indirect	Cohort	Credit Loss History
Commercial	Commercial and Industrial	PD/LGD	Credit Loss History
	Agricultural	PD/LGD	Credit Loss History
	Municipal	PD/LGD	Credit Loss History
Commercial real estate	Owner Occupied	PD/LGD	Credit Loss History
	Non-Owner Occupied	PD/LGD	Credit Loss History
	Multifamily	PD/LGD	Credit Loss History
	Farmland	PD/LGD	Credit Loss History
	Construction	PD/LGD	Credit Loss History

According to the accounting standard an entity may make an accounting policy election not to measure an allowance for credit losses for accrued interest receivable if the entity writes off the applicable accrued interest receivable balance in a timely manner. The Company has made the accounting policy election not to measure an allowance for credit losses for accrued interest receivables for all loan segments. Current policy dictates that a loan will be placed on nonaccrual status, with the current accrued interest receivable balance being written off, upon the loan being 90 days delinquent or when the loan is deemed to be collateral dependent and the collateral analysis shows insufficient collateral coverage based on a current assessment of the value of the collateral.

In addition, ASC Topic 326 requires the Company to establish a liability for anticipated credit losses for unfunded commitments. To accomplish this, the Company must first establish a loss expectation for extended (funded) commitments. This loss expectation, expressed as a ratio to the amortized cost basis, is then applied to the portion of unfunded commitments not considered unilaterally cancelable, and considered by the company’s management as likely to fund over the life of the instrument. At June 30, 2023, the Company had $741 million in unfunded commitments and set aside $1.98 million in anticipated credit losses. This reserve is recorded in other liabilities as opposed to the ACL.

The determination of the ACL is complex and the Company makes decisions on the effects of factors that are inherently uncertain. Evaluations of the loan portfolio and individual credits require certain estimates, assumptions and judgments as to the facts and circumstances related to particular situations or credits. For the three months ended June 30, 2023, the allowance for credit losses decreased from March 31, 2023 due to the improvement in the Company's maximum loss rates that anchor the qualitative factor adjustments and a reclassification of construction loan balances that were placed into their permanent loan pool. These factors were partially offset by adjustments to the Portfolio Composition and Growth qualitative factor for the Company's residential and consumer loan portfolios to account for a more defined qualitative methodology.

Purchased Loans

As a result of the Emlenton Merger, the Company acquired $740.7 million in loans.

	2023
Par value of acquired loans at acquisition	$	797,616
Net purchase discount		(55,958	)
Allowance for credit losses of PCD loans		(999	)
Purchase price of loans at acquisition	$	740,659

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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 2023, the Company acquired PCD loans with a fair value of $25.9 million, credit discount of $999 thousand and a noncredit discount of $5.5 million. The outstanding balance at June 30, 2023 and related allowance on PCD loans is as follows:

	Loan Balance		ACL Balance
Commercial real estate
Owner Occupied	$	1,739	$	33
Non-owner Occupied		35,694		1,222
Farmland		13		0
Commercial
Commercial and industrial		2,655		160
Agricultural		149		10
Residential real estate
1-4 family residential		3,512		21
Home equity lines of credit		3		0
Total	$	43,765	$	1,446

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 six months ended June 30, 2023 and 2022.

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Three Months Ended June 30, 2023
Service charges on deposit accounts	$	0	$	1,501	$	1,501
Debit card and EFT fees		0		1,810		1,810
Trust fees		2,248		0		2,248
Insurance agency commissions		0		1,332		1,332
Retirement plan consulting fees		382		0		382
Investment commissions		0		476		476
Other (outside the scope of ASC 606)		0		1,700		1,700
Total noninterest income	$	2,630	$	6,819	$	9,449

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Three Months Ended June 30, 2022
Service charges on deposit accounts	$	0	$	1,139	$	1,139
Debit card and EFT fees		0		1,528		1,528
Trust fees		2,376		0		2,376
Insurance agency commissions		0		1,086		1,086
Retirement plan consulting fees		323		0		323
Investment commissions		0		557		557
Other (outside the scope of ASC 606)		0		2,468		2,468
Total noninterest income	$	2,699	$	6,778	$	9,477

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(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Six Months Ended June 30, 2023
Service charges on deposit accounts	$	0	$	2,933	$	2,933
Debit card and EFT fees		0		3,599		3,599
Trust fees		4,835		0		4,835
Insurance agency commissions		0		2,788		2,788
Retirement plan consulting fees		689		0		689
Investment commissions		0		869		869
Other (outside the scope of ASC 606)		0		4,161		4,161
Total noninterest income	$	5,524	$	14,350	$	19,874

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Six Months Ended June 30, 2022
Service charges on deposit accounts	$	0	$	2,284	$	2,284
Debit card and EFT fees		0		2,944		2,944
Trust fees		4,895		0		4,895
Insurance agency commissions		0		2,133		2,133
Retirement plan consulting fees		720		0		720
Investment commissions		0		1,251		1,251
Other (outside the scope of ASC 606)		8,375		4,573		12,948
Total noninterest income	$	13,990	$	13,185	$	27,175

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 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

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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 estimating potential refunds due to the likely cancellation of a percentage of customers canceling 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 0.5% 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 0.7% 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 six month period ended June 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 uses a leading evaluation pricing service for U.S. domestic fixed income securities and values securities using exit pricing requirements. The Company independently corroborates the fair value received through this pricing service by obtaining the pricing through a second source. 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, 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.

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Mortgage Banking Derivatives: The fair value of mortgage banking derivatives are calculated using derivative valuation models that utilize quoted prices for similar assets adjusted for the specific attributes of the commitments and other observable market data at the valuation date. (Level 2).

Interest Rate Swaps: The fair value of interest rate swap derivative instruments are based on valuation models using observable market data as of the measurement date. The loan agreement containing a two-way yield maintenance provision if invoked is expected to exactly offset the fair value of unwinding the swap. The yield maintenance provision represents an embedded derivative which is bifurcated from the host loan contract and, as such, the swaps and embedded derivatives are not designated as hedges (Level 2).

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.

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. Loans carried at fair value generally receive specific allocations of the allowance for credit losses in the current period, 2023 and 2022. For collateral dependent loans, fair value is commonly based on recent real estate appraisals or in quoted sales prices in certain instances. 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. Adjustments to quoted price are routinely made to factor in data that affect the marketability of the collateral. Such adjustments, in both instances, 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 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.

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

			Fair Value Measurements at June 30, 2023 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	$	135,165	$	0	$	135,165	$	0
State and political subdivisions		543,062		0		543,062		0
Corporate bonds		17,632		0		16,409		1,223
Mortgage-backed securities-residential		541,124		0		541,123		1
Collateralized mortgage obligations		76,796		0		76,796		0
Small Business Administration		3,099		0		3,099		0
Equity securities
Equity securities at fair value		218		218		0		0
Other investments measured at net asset value		15,034	n/a		n/a		n/a
Total investment securities	$	1,332,130	$	218	$	1,315,654	$	1,224
Loans held for sale	$	2,197	$	0	$	1,703	$	0
Interest rate swaps		5,494	$	0		5,494		0
Mortgage banking derivative		14		0		14		0
Financial Liabilities
Interest rate swaps	$	5,494	$	0	$	5,494	$	0

			Fair Value Measurements at December 31, 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	$	128,096	$	0	$	128,096	$	0
State and political subdivisions		530,080		0		530,080		0
Corporate bonds		3,879		0		3,879		0
Mortgage-backed securities-residential		555,142		0		555,141		1
Collateralized mortgage obligations		47,354		0		47,354		0
Small Business Administration		3,474		0		3,474		0
Equity securities
Equity securities at fair value		196		196		0		0
Other investments measured at net asset value		15,048	n/a		n/a		n/a
Total investment securities	$	1,283,269	$	196	$	1,268,024	$	1
Loans held for sale	$	858	$	0	$	858	$	0
Interest rate swaps		5,503		0		5,503		0
Mortgage banking derivative -asset		31		0		31		0
Financial Liabilities
Interest rate swaps	$	5,503	$	0	$	5,503	$	0

There were no significant transfers between Level 1 and Level 2 during the periods presented above.

26

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

	Three Months ended June 30,					Six Months ended June 30,
(In Thousands of Dollars)	2023			2022		2023			2022
Beginning Balance	$	1,616		$	2	$	1		$	3
Transfers between levels		0			0		0			0
Acquired and/or purchased		0			0		1,615			0
Repayments, calls and maturities		(392	)		0		(392	)		(1	)
Ending Balance	$	1,224		$	2	$	1,224		$	2

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

			Fair Value Measurements at June 30, 2023 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	$	2,920	$	0	$	0	$	2,920
Commercial
Commercial and industrial	$	395	$	0	$	0	$	395

			Fair Value Measurements at December 31, 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	$	746		0		0	$	746
Commercial		395		0		0		395
1–4 family residential		74		0		0		74

Collateral dependent loans were individually evaluated under ASC 326 for the periods ending June 30, 2023 and December 31, 2022. Collateral dependent loans had a principal balance of $4.2 million with a valuation allowance of $878 thousand at June 30, 2023. Collateral dependent loans had a principal balance of $1.6 million with a valuation allowance of $372 thousand at December 31, 2022.

For the period ending June 30, 2023, the fair value of the collateral dependent commercial real estate relationships are valued by independent external appraisals. These external appraisals are prepared using the sales comparison approach and income approach valuation techniques. The commercial relationships are valued by the quoted price of the collateral. Management makes subsequent unobservable adjustments on both the appraisals for the commercial real estate and the quoted price for the commercial collateral dependent loans. For the year ending December 31, 2022, the fair value of the collateral dependent commercial real estate and commercial relationships are valued by the quoted price of the collateral. Management makes subsequent unobservable adjustments on the quoted price of collateral dependent loans. Collateral dependent loans other than commercial real estate and other real estate owned are not considered material.

27

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 June 30, 2023 and December 31, 2022:

June 30, 2023	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually evaluated loans
Commercial real estate	$	2,920	Sales Comparison	Adjustment for differences between comparable sales	(66.12%) - 40.28% 15.88%
Commercial		395	Quoted price for collateral	Offer Price	50.55%

December 31, 2022	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually evaluated loans
Commercial real estate	$	746	Quoted price for collateral	Offer Price	7.45%
Commercial		395	Quoted price for collateral	Offer Price	43.00%
Residential		74	Sales comparison	Adjustment for differences between comparable sales	(13.77%) - (5.68%) (13.77%)

The carrying amounts and estimated fair values of financial instruments not previously disclosed at June 30, 2023 and December 31, 2022 are as follows:

			Fair Value Measurements at June 30, 2023 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	116,063	$	29,800	$	86,263	$	0	$	116,063
Regulatory stock		29,723	n/a		n/a		n/a		n/a
Loans, net		3,120,243		0		0		2,985,702		2,985,702
Financial liabilities
Deposits		4,270,748		3,589,251		679,516		0		4,268,767
Short-term borrowings		300,000		0		300,000		0		300,000
Long-term borrowings		88,437		0		68,480		0		68,480

			Fair Value Measurements at December 31, 2022 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	75,551	$	21,395	$	54,156	$	0	$	75,551
Regulatory stock		18,200	n/a		n/a		n/a		n/a
Loans, net		2,377,772		0		0		2,330,164		2,330,164
Financial liabilities
Deposits		3,561,768		2,999,188		561,292		0		3,560,480
Short-term borrowings		95,000		0		95,000		0		95,000
Long-term borrowings		88,211		0		73,566		0		73,566

Goodwill and Intangible Assets:

Goodwill associated with the Company’s purchases of Emlenton in January 2023, Champion Insurance in July 2022 and other past acquisitions totaled $167.9 million at June 30, 2023 and $94.6 million at December 31, 2022. 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 market approach method. Results of the assessment as of September 30, 2022, indicated no goodwill impairment. The Company will continue to monitor its goodwill for possible impairment.

28

Acquired Intangible Assets

Acquired intangible assets were as follows:

	June 30, 2023					December 31, 2022
(In Thousands of Dollars)	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer relationship intangibles	$	7,210	$	(6,873	)	$	7,210	$	(6,793	)
Non-compete contracts		457		(407	)		457		(401	)
Trade name		1,126		(425	)		1,126		(409	)
Core deposit intangible		32,115		(9,059	)		12,866		(7,030	)
Total	$	40,908	$	(16,764	)	$	21,659	$	(14,633	)

Aggregate amortization expense was $1.2 million and $2.1 million for the three and six month periods ended June 30, 2023. Amortization expense was $419 thousand and $839 thousand for the three and six month periods ended June 30, 2022.

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

2023 (6 months)	$	1,450
2024		2,872
2025		2,806
2026		2,710
2027		2,596
Thereafter		11,710
Total	$	24,144

Leases:

The Company has leases for branch office locations, vehicles and certain office equipment such as printers, copiers and faxes. These leases are categorized as either operating or financing. A majority of the leases are categorized as financing leases while a non material portion are categorized as operating. The leases have remaining lease terms of up to 18.1 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 December of 2023.

The right of use asset and lease liability were $9.1 million and $9.5 million as of June 30, 2023, respectively, and $8.4 million and $8.8 million at December 31, 2022, respectively. The right of use asset is included in premises and equipment, net and the lease liability is included in other liabilities on the balance sheet.

Lease payments made for the three and six month periods ended June 30, 2023, were $541 thousand and $922 thousand, while lease payments made for the three and six month periods ended June 30, 2022 were $217 thousand and $454 thousand, respectively. Interest expense and amortization expense on finance leases for the three month period ended June 30, 2023, was $69 thousand and $270 thousand, and $139 thousand and $540 thousand for the six month period ended June 30, 2023 respectively. Interest expense and amortization expense on finance leases for the three month period ended June 30, 2022, was $37 thousand and $166 thousand, and $76 thousand and $332 thousand for the six month period ended June 30, 2022, respectively. The weighted average remaining lease term for all financing leases was 11.9 years and 7.8 years for all operating leases as of June 30, 2023. The weighted-average discount rate for financing leases was 3.11% and 2.41% for operating leases as of June 30, 2023.

On January 1, 2023, the Company performed a valuation of Emlenton's leases to determine an initial right of use asset (ROU asset) and lease liability in connection with the Merger. The Company recorded an initial ROU asset and lease liability of $1.3 million for these leases.

29

Maturities of lease liabilities are as follows as of June 30, 2023:

2023 (6 months)	$	686
2024		1,176
2025		1,092
2026		975
2027		898
Thereafter		6,575
Total Payments		11,402
Less: Imputed Interest		(1,879	)
Total	$	9,523

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 $68.5 million and fair value of $5.5 million in other assets and $5.5 million in other liabilities at June 30, 2023. At December 31, 2022, the Company had interest rate swaps associated with commercial loans with and a notional value of $71.9 million and fair value of $5.5 million in other assets and $5.5 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 six month period ended June 30, 2023 and 2022, respectively.

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. The Company had $5.9 million of interest rate lock commitments at June 30, 2023 and $4.9 million of interest rate lock commitments at December 31, 2022. Effective May 2022, the Company began the practice of entering into commitments to sell mortgage backed securities 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. There were $7.0 million of forward sales of mortgage backed securities at June 30, 2023 and $4.3 million of forward sales of mortgage backed securities at December 31, 2022. There were $139 thousand of forward commitments for the future delivery of residential mortgages at June 30, 2023 and no forward commitments for the future delivery of residential mortgage loans at December 31, 2022.

The net gains and losses on derivative instruments not designated as hedging instruments are included in mortgage banking income. For the quarters ended June 30, 2023 and June 30, 2022, losses of $52 thousand and gains of $34 thousand, respectively, were included in mortgage banking income for the interest rate lock commitments. For the six month periods ended June 30, 2023 and June 30, 2022, gains of $57 thousand and losses of $252 thousand, respectively, were included in mortgage banking income for the interest rate lock commitments. Gains of $71 thousand and losses of $16 thousand were included in mortgage banking income for the three and six month periods ended June 30, 2023 for the forward sales of mortgage backed securities. Losses of $5 thousand were included in mortgage banking income for both the three and six month periods ended June 30, 2022 for the forward sales of mortgage backed securities.

30

Earnings Per Share:

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Basic EPS
Net income (In thousands of dollars)	$	14,966	$	15,951	$	22,041	$	31,795
Weighted average shares outstanding		37,233,732		33,850,449		37,527,050		33,835,550
Basic earnings per share	$	0.40	$	0.47	$	0.59	$	0.94
Diluted EPS
Net income (In thousands of dollars)	$	14,966	$	15,951	$	22,041	$	31,795
Weighted average shares outstanding for basic earnings per share		37,233,732		33,850,449		37,527,050		33,835,550
Dilutive effect of restricted stock awards		86,721		72,395		96,822		91,796
Weighted average shares for diluted earnings per share		37,320,453		33,922,844		37,623,872		33,927,346
Diluted earnings per share	$	0.40	$	0.47	$	0.59	$	0.94

There were 174,309 and 170,809 restricted stock awards that were considered anti-dilutive for the three and six month periods ended June 30, 2023, respectively. There were 188,626 and 158,492 restricted stock awards that were considered anti-dilutive for the three and six month periods ended June 30, 2022, 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 replaced the 2017 Plan. There were 54,095 service time based share awards and 102,750 performance based share awards granted under the 2022 Plan during the six month period ended June 30, 2023, 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, 2025. As of June 30, 2023, 786,655 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 $649 thousand and $1.3 million for the three and six month periods ended June 30, 2023, respectively. During the prior periods, the expense recognized was $438 thousand and $803 thousand for the three and six month periods ended June 30, 2022, respectively. As of June 30, 2023, there was $4.0 million of total unrecognized compensation expense related to the nonvested shares granted under the Plan. The remaining cost is expected to be recognized over 2.7 years.

The following is the activity under the Plans during the six month period ended June 30, 2023.

	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		193,015		$	16.69		137,369		$	15.85
Granted		54,095			13.12		102,750			14.16
Vested		(27,740	)		12.96		(30,635	)		14.35
Forfeited		(1,541	)		17.64		0			0.00
Ending balance - non-vested shares		217,829		$	15.84		209,484		$	15.01

31

The following is the activity under the Plans during the six month period ended June 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		101,768			17.05		56,724			17.25
Vested		(20,771	)		16.81		(65,481	)		17.48
Forfeited		0			0.00		(12,862	)		14.74
Ending balance - non-vested shares		180,561		$	16.92		137,369		$	15.85

The 58,375 shares that vested during the six month period ended June 30, 2023 had a weighted average fair value of $13.69 per share.

The following tables represent the details of other comprehensive loss for the three and six month periods ended June 30, 2023 and 2022.

Other Comprehensive Income (Loss):

	Three Months Ended June 30, 2023
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding gains on available-for-sale securities during the period	$	(21,309	)	$	4,475		$	(16,834	)
Reclassification adjustment for gains included in net income (1)		0			0			0
Net other comprehensive (loss)	$	(21,309	)	$	4,475		$	(16,834	)
	Three Months Ended June 30, 2022
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during the period	$	(105,497	)	$	22,154		$	(83,343	)
Reclassification adjustment for gains included in net income (1)		31			(6	)		25
Net unrealized gains on available-for-sale securities	$	(105,466	)	$	22,148		$	(83,318	)
Change in funded status of post-retirement health plan		(2	)		0			(2	)
Net other comprehensive (loss)	$	(105,468	)	$	22,148		$	(83,320	)
	Six Months Ended June 30, 2023
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding gains on available-for-sale securities during the period	$	21,591		$	(4,534	)	$	17,057
Reclassification adjustment for losses included in net income (1)		(120	)		25			(95	)
Net other comprehensive income	$	21,471		$	(4,509	)	$	16,962
	Six Months Ended June 30, 2022
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during the period	$	(217,894	)	$	45,758		$	(172,136	)
Reclassification adjustment for losses included in net income (1)		31			(7	)		24
Net unrealized gains on available-for-sale securities	$	(217,863	)	$	45,751		$	(172,112	)
Change in funded status of post-retirement health plan		(3	)		0			(3	)
Net other comprehensive (loss)	$	(217,866	)	$	45,751		$	(172,115	)

(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 June 30, 2023, the Company and the Bank meet all capital adequacy requirements to which they are subject.

32

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 June 30, 2023 and December 31, 2022, 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 June 30, 2023 and December 31, 2022:

	Actual					Requirement For Capital Adequacy Purposes:					To be Well Capitalized Under Prompt Corrective Action Provisions:
	Amount		Ratio			Amount		Ratio			Amount		Ratio
June 30, 2023
Common equity tier 1 capital ratio
Consolidated	$	374,278		10.25	%	$	164,288		4.5	%	N/A		N/A
Bank		391,584		10.75	%		163,977		4.5	%		236,855		6.5	%
Total risk based capital ratio
Consolidated		502,235		13.76	%		292,068		8.0	%	N/A		N/A
Bank		426,541		11.71	%		291,514		8.0	%		364,393		10.0	%
Tier 1 risk based capital ratio
Consolidated		392,278		10.74	%		219,051		6.0	%	N/A		N/A
Bank		391,584		10.75	%		218,636		6.0	%		291,514		8.0	%
Tier 1 leverage ratio
Consolidated		392,278		7.68	%		204,281		4.0	%	N/A		N/A
Bank		391,584		7.70	%		203,408		4.0	%		254,261		5.0	%
December 31, 2022
Common equity tier 1 capital ratio
Consolidated	$	403,307		13.71	%	$	132,349		4.5	%	N/A		N/A
Bank		372,679		12.71	%		131,968		4.5	%	$	190,620		6.5	%
Total risk based capital ratio
Consolidated		523,285		17.79	%		235,288		8.0	%	N/A		N/A
Bank		399,657		13.62	%		234,609		8.0	%		293,262		10.0	%
Tier 1 risk based capital ratio
Consolidated		421,307		14.32	%		176,466		6.0	%	N/A		N/A
Bank		372,679		12.71	%		175,957		6.0	%		234,609		8.0	%
Tier 1 leverage ratio
Consolidated		421,307		9.84	%		171,233		4.0	%	N/A		N/A
Bank		372,679		8.76	%		170,245		4.0	%		212,807		5.0	%

33

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
June 30, 2023
Goodwill and other intangibles	$	5,709	$	190,605	$	(4,263	)	$	192,051
Total assets	$	17,610	$	5,050,547	$	5,297		$	5,073,454

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
December 31, 2022
Goodwill and other intangibles	$	5,739	$	100,190	$	(4,263	)	$	101,666
Total assets	$	14,383	$	4,064,112	$	3,705		$	4,082,200

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
For Three Months Ended June 30, 2023
Net interest income	$	57	$	35,476	$	(955	)	$	34,578
Provision for credit losses and unfunded loans		0		25		0			25
Service fees, security gains and other noninterest income		2,668		7,167		(386	)		9,449
Noninterest expense		1,654		22,056		475			24,185
Amortization and depreciation expense		23		2,066		112			2,201
Income before taxes		1,048		18,496		(1,928	)		17,616
Income taxes		221		2,859		(430	)		2,650
Net income	$	827	$	15,637	$	(1,498	)	$	14,966

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
For Six Months Ended June 30, 2023
Net interest income	$	114	$	72,984	$	(1,910	)	$	71,188
Provision for credit losses and unfunded loans		0		8,624		0			8,624
Service fees, security gains and other noninterest income		5,568		14,923		(617	)		19,874
Noninterest expense		3,297		48,591		1,120			53,008
Amortization and depreciation expense		46		3,828		226			4,100
Income before taxes		2,339		26,864		(3,873	)		25,330
Income taxes		492		3,706		(909	)		3,289
Net income	$	1,847	$	23,158	$	(2,964	)	$	22,041

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
For Three Months Ended June 30, 2022
Net interest income	$	38	$	32,486	$	(813	)	$	31,711
Provision for credit losses and unfunded loans		0		616		0			616
Service fees, security gains and other noninterest income		4,839		4,606		32			9,477
Noninterest expense		3,614		16,174		494			20,282
Amortization and depreciation expense		28		1,038		113			1,179
Income before taxes		1,235		19,264		(1,388	)		19,111
Income taxes		258		3,266		(364	)		3,160
Net income	$	977	$	15,998	$	(1,024	)	$	15,951

34

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
For Six Months Ended June 30, 2022
Net interest income	$	72	$	64,479	$	(1,598	)	$	62,953
Provision for credit losses and unfunded loans		0		258		0			258
Service fees, security gains and other noninterest income		14,037		13,347		(209	)		27,175
Noninterest expense		5,383		43,616		577			49,576
Amortization and depreciation expense		56		2,058		227			2,341
Income before taxes		8,670		31,894		(2,611	)		37,953
Income taxes		1,820		5,000		(662	)		6,158
Net income	$	6,850	$	26,894	$	(1,949	)	$	31,795

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 June 30, 2023 of $300.0 million. The interest rate on these borrowings was 5.17% at June 30, 2023. The Bank had $95.0 million of short-term advances from the FHLB at December 31, 2022, and the interest rate on these borrowings was 4.38%.

The Bank has access to lines of credit amounting to $35.0 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 June 30, 2023 or at December 31, 2022.

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 June 30, 2023 or at December 31, 2022.

Long-term borrowings:

There were no long-term advances from the FHLB at June 30, 2023 or at December 31, 2022.

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 $1.7 billion at June 30, 2023 and $1.2 billion at December 31, 2022, respectively. Based on this collateral, the Bank is eligible to borrow an additional $707.8 million at June 30, 2023.

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 ("SOFR"), 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 (transitioning to the three-month term SOFR beginning September 15, 2023) . The rate at June 30, 2023 was 7.00% and at December 31, 2022 was 6.22%.

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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 (transitioning to the three-month term SOFR beginning September 15, 2023). The rate at June 30, 2023 was 7.35% and at December 31, 2022 was 6.57%.

In 2015, the Company completed its acquisition of National Bancshares Corporation, 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, TSEO Statutory Trust I. 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 (transitioning to the three-month term SOFR beginning September 15, 2023). The rate at June 30, 2023 was 7.25% and at December 31, 2022 was 6.47%.

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.

	June 30, 2023		December 31, 2022
	Amount		Amount
TSEO Statutory Trust I	$	2,497	$	2,472
Maple Leaf Financial Statutory Trust II		7,629		7,517
Cortland Statutory Trust I		4,354		4,327
Total junior subordinated debentures owed to unconsolidated subsidiary trusts	$	14,480	$	14,316
Subordinated Debentures	$	73,957	$	73,895
Total long-term borrowings	$	88,437	$	88,211

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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 2022 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.

Results of Operations. The results of operation, and comparisons to results from the prior periods of 2022, are materially impacted by the acquisition of Emlenton which closed on January 1, 2023.

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The following is a comparison of selected financial ratios and other results at or for the three and six month periods ended June 30, 2023 and 2022:

	At or for the Three Months Ended June 30,						At or for the Six Months Ended June 30,
(In Thousands, except Per Share Data)	2023			2022			2023			2022
Total assets	$	5,073,454		$	4,114,364		$	5,073,454		$	4,114,364
Net income	$	14,966		$	15,951		$	22,041		$	31,795
Diluted earnings per share	$	0.40		$	0.47		$	0.59		$	0.94
Return on average assets (annualized)		1.18	%		1.54	%		0.87	%		1.53	%
Return on average equity (annualized)		16.12	%		17.97	%		11.94	%		15.67	%
Equity to asset ratio		7.23	%		7.81	%		7.23	%		7.81	%
Dividends to net income		42.30	%		33.95	%		57.77	%		34.07	%
Net loans to assets		61.50	%		57.04	%		61.50	%		57.04	%
Loans to deposits		73.88	%		65.49	%		73.88	%		65.49	%

Net Income. The Company's net income for the quarter ended June 30, 2023 totaled $15.0 million, or $0.40 per diluted share, compared to $16.0 million, or $0.47 per diluted share, for the three months ended June 30, 2022. The acquisition of Emlenton had a positive impact on the earnings of the Company but net interest margin compression due to high rates and an inverted yield curve continues to act as a headwind to overall earnings in 2023 as compared to 2022.

Net income for the first six months of 2023 was $22.0 million compared to $31.8 million for the first six months of 2022. The change in net income during the first six months of 2023, compared with the first six months of 2022, was impacted by acquisition-related expenses for the Emclaire transaction that closed on January 1, 2023. The first six months of 2023 included merger-related expenses of $4.8 million compared to merger related costs of $2.6 million for the first six months of 2022. The first half of 2023 also included Day 1 provision for credit losses and provision for unfunded loans under the CECL model of $7.7 million. The net interest margin compression discussed above also has a negative impact on the first half of 2023 results compared to the first half of 2022.

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
	June 30, 2023							June 30, 2022
	AVERAGE BALANCE		INTEREST		RATE (1)			AVERAGE BALANCE		INTEREST		RATE (1)
EARNING ASSETS
Loans (2) (3)	$	3,144,461	$	42,422		5.40	%	$	2,337,251	$	25,792		4.41	%
Taxable securities (2)		1,157,284		6,654		2.30			1,100,538		5,223		1.90
Tax-exempt securities (2) (3)		415,003		3,278		3.16			474,034		3,832		3.23
Other investments		41,361		594		5.74			34,030		216		2.54
Federal funds sold and other		72,801		551		3.03			69,532		95		0.55
TOTAL EARNING ASSETS		4,830,910		53,499		4.43			4,015,385		35,158		3.50
Nonearning assets		225,131							140,334
TOTAL ASSETS	$	5,056,041						$	4,155,719
INTEREST-BEARING LIABILITIES
Time deposits	$	646,782	$	4,525		2.80	%	$	354,692	$	552		0.62	%
Brokered time deposits		59,402		686		4.62			45,767		49		0.43
Savings deposits		1,133,371		2,402		0.85			837,726		141		0.07
Demand deposits - interest bearing		1,428,409		6,878		1.93			1,430,273		909		0.25
Short term borrowings		213,549		2,727		5.11			42,527		97		0.91
Long term borrowings		88,382		1,008		4.56			87,914		827		3.76
TOTAL INTEREST-BEARING LIABILITIES		3,569,895		18,226		2.04			2,798,899		2,575		0.37
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits - noninterest bearing		1,067,605							972,174
Other liabilities		47,120							29,665
Stockholders' equity		371,421							354,981
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	5,056,041						$	4,155,719
Net interest income and interest rate spread			$	35,273		2.39	%			$	32,583		3.13	%
Net interest margin						2.92	%						3.25	%

(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)For 2023, adjustments of $91 thousand and $604 thousand, respectively, are made to tax equate income on tax exempt loans and tax exempt securities. For 2022, adjustments of $78 thousand and $794 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)

	Six Months Ended  June 30, 2023							Six Months Ended  June 30, 2022
	AVERAGE BALANCE		INTEREST		RATE (1)			AVERAGE BALANCE		INTEREST		RATE (1)
EARNING ASSETS
Loans (2) (3)	$	3,140,500	$	83,365		5.31	%	$	2,326,392	$	51,438		4.42	%
Taxable securities (2)		1,164,400		13,204		2.27			1,054,506		9,810		1.86
Tax-exempt securities (2) (3)		426,743		6,797		3.19			467,947		7,559		3.23
Other investments		38,976		970		4.98			32,584		346		2.12
Federal funds sold and other		77,870		1,161		2.98			93,591		143		0.31
TOTAL EARNING ASSETS		4,848,489		105,497		4.35			3,975,020		69,296		3.49
Nonearning assets		221,955							192,085
TOTAL ASSETS	$	5,070,444						$	4,167,105
INTEREST-BEARING LIABILITIES
Time deposits	$	618,637	$	7,864		2.54	%	$	366,617	$	1,196		0.65	%
Brokered time deposits		144,747		3,007		4.15			30,745		64		0.42
Savings deposits		1,143,539		4,356		0.76			840,533		308		0.07
Demand deposits		1,423,211		11,971		1.68			1,420,957		1,327		0.19
Short term borrowings		147,436		3,648		4.95			22,486		98		0.87
Long term borrowings		88,326		2,003		4.54			87,856		1,619		3.69
TOTAL INTEREST-BEARING LIABILITIES		3,565,896		32,849		1.84			2,769,194		4,612		0.33
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits		1,087,403							964,380
Other liabilities		47,996							27,842
Stockholders' equity		369,149							405,689
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	5,070,444						$	4,167,105
Net interest income and interest rate spread			$	72,648		2.51	%			$	64,684		3.16	%
Net interest margin						3.00	%						3.25	%

(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)For 2023, adjustments of $178 thousand and $1.3 million, respectively, are made to tax equate income on tax exempt loans and tax exempt securities. For 2022, adjustments of $162 thousand and $1.6 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 June 30, 2023, was $34.6 million compared to $31.7 million for the same period in 2022. A larger earning asset base due to the acquisition of Emlenton was the primary driver of this increase offset by a 33 basis point decline in the net interest margin.

The net interest margin for the three months ended June 30, 2023, was 2.92%, a 33 basis point decrease from the quarter ended June 30, 2022. In comparing the second quarter of 2023 to the same period in 2022, interest-earning asset yields increased 93 basis points, while the cost of interest-bearing liabilities increased 167 basis points. This increase in funding costs has been due to the rapid increase in deposit rates due to intense competition for deposits, the continued Federal Reserve rate hiking cycle and runoff of deposit balances which are being replaced by much costlier wholesale funding. This increase in funding costs continues to outstrip the increases in yield on interest-earning assets pushing the net interest margin lower.

Net interest income for the six month period ended June 30, 2022, was $71.2 million compared to $63.0 million for the same period in 2022. The increase in net interest income was driven by the same factors as the second quarter increase. The net interest margin was 3.00% for the six month period ended June 30, 2022 compared to 3.25% for the same period in 2022. The decline in net interest margin for the six month period ended June 30, 2022, was also driven by the same factors.

Provision for Credit Losses and Provision for Unfunded Loans. The Company recorded a provision for credit losses and unfunded loans of $25,000 during the second quarter of 2023 compared to a provision for credit losses and unfunded loans of $616 thousand for the second quarter of 2022. The allowance for credit losses to total loans was 1.11% at June 30, 2023, compared to 1.12% at December 31, 2022.

The provision for credit losses and unfunded loans was $8.6 million for the first six months of 2023 compared to a provision for credit losses and unfunded loans of $258 thousand for the first six months of 2022. Included in the $8.6 million figure is a Day 1 provision for credit losses and provision for unfunded loans under the CECL model of $7.7 million related to the acquisition of Emlenton. There was no Day 1 provision recorded in the first six months of 2022.

Noninterest Income. Noninterest income totaled $9.4 million for the three months ended June 30, 2023, compared to $9.5 million for the three months ended June 30, 2022. Service charges on deposit accounts have increased by $362,000 in the second quarter of 2023 compared to the second quarter of 2022. The increase is primarily due to the acquisition of Emclaire. Bank owned life insurance income, other mortgage banking fee income and debit card income have also increased in the second quarter of 2023 compared to the second quarter of 2022 due to the Emclaire acquisition. Insurance agency commissions are up $246,000 in the second quarter of 2023 compared to the second quarter of 2022 as growth in the insurance business and increased annuity sales have bolstered income. Investment commissions are down slightly for the quarter ended June 30, 2023 compared to the quarter ended June 30, 2022, as customers have been more interested in the annuities mentioned above as opposed to traditional investment products. Net gains on the sale of loans have increased but are still sluggish due to the high level of interest rates and lack of loan volume. Other noninterest income has declined by $1.3 million for the quarter ending June 30, 2023 compared to the second quarter of 2022. This decrease is primarily due to a decline in the income associated with the Company’s investments in SBA/SBIC funds. The performance of these funds in 2022 was much better than had been experienced historically and 2023 has returned to more normal levels of profitability.

Noninterest income for the six month period ended June 30, 2023, was $19.9 million compared to $27.2 million for the same period in 2022. The decline in noninterest income for the six months ended June 30, 2023, compared to the six months ended June 30, 2022, was primarily due to $8.4 million in income from a legal settlement received in 2022. The decline was partially offset by increases in noninterest income categories due to the acquisition of Emlenton.

Noninterest Expense. Noninterest expense was $26.4 million for the three months ended June 30, 2023, compared to $21.5 million for the three months ended June 30, 2022. The increase in expense is primarily due to the acquisition of Emclaire. Salaries and employee benefits increased $2.6 million to $13.6 million in the second quarter of 2023 compared to the same period in 2022. The acquisition of Emclaire along with normal raise activity were the primary reasons for the increase. Occupancy and equipment expense increased primarily due to the acquisition. FDIC and state and local taxes increased due to the acquisition and the increase in the rate paid for FDIC insurance in 2023. Intangible amortization expense increased due to the acquisition and due to some acceleration of the core deposit intangible recorded in the Cortland Bancorp acquisition in 2021. The Company recorded an additional $359,000 of intangible amortization in the second quarter of 2023 related to the Cortland acquisition. Merger related costs were $442,000 for the second quarter of 2023 compared to $674,000 in the second quarter of 2022.

Total noninterest expense was $57.1 million for the six month period ended June 30, 2023, compare with $51.9 million for the same six month period in 2022. The increase is primarily due to the acquisition of Emlenton offset by a charitable contribution of $6.0 million to the Farmers Charitable Foundation and $2.1 million in legal costs associated with the legal settlement discussed previously. Both of these charges were incurred in the first six months of 2022 and were not repeated in 2023.

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Income Taxes. Income tax expense totaled $2.7 million for the quarter ended June 30, 2023 compared to $3.2 million for the quarter ended June 30, 2022. The decrease was due to the decline in income before income taxes.

Income tax expense totaled $3.3 million for the six month period ended June 30, 2023, and $6.2 million for the six month period ended June 30, 2022. This decline is also due to the decline in income before income taxes.

Financial Condition

Cash and Cash Equivalents. Cash and cash equivalents increased $40.5 million during the first six months of 2023 from $75.6 million at December 31, 2022 to $116.1 million at June 30, 2023. The increase in the cash balances was primarily due to the Company intentionally holding more cash on its balance sheet and due to the acquisition of Emlenton.

Securities. Securities available-for-sale increased by $48.9 million to $1.32 billion at June 30, 2023, compared to $1.27 billion at December 31, 2022. The increase was driven by the addition of $127.0 million in available for sale securities from Emlenton and a reduction in the gross amount of unrealized losses of $21.5 million. Offsetting these increases, the Company also had sales and runoff from the portfolio that totaled approximately $100.0 million in the first six months of 2023.

Loans. Gross loans (excluding loans held for sale) increased to $3.16 billion at June 30, 2023 from $2.40 billion at December 31, 2022. The increase of $750.5 million for the year was primarily driven by the loans acquired from Emlenton which totaled $741.7 million.

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)

	6/30/2023			3/31/2023			12/31/2022			9/30/2022			6/30/2022
Nonperforming loans	$	17,956		$	17,959		$	14,803		$	12,976		$	14,107
Nonperforming loans as a % of total loans		0.57	%		0.57	%		0.62	%		0.54	%		0.59	%
Loans delinquent 30-89 days	$	12,321		$	10,219		$	9,605		$	6,659		$	8,716
Loans delinquent 30-89 days as a % of total loans		0.39	%		0.32	%		0.40	%		0.28	%		0.37	%
Allowance for credit losses	$	34,957		$	36,011		$	26,978		$	27,282		$	27,454
Allowance for credit losses as a % of total loans		1.11	%		1.14	%		1.12	%		1.14	%		1.16	%
Allowance for credit losses as a % of nonperforming loans		194.68	%		200.52	%		182.25	%		210.25	%		194.61	%
Net charge-offs for the quarter	$	799		$	271		$	570		$	605		$	42
Annualized net charge-offs to average net loans outstanding		0.10	%		0.03	%		0.10	%		0.10	%		0.01	%
Non-performing assets	$	18,167		$	18,053		$	14,876		$	13,042		$	14,107
Non-performing assets as a % of total assets		0.36	%		0.35	%		0.36	%		0.32	%		0.34	%

ASU 2022-02 was adopted on January 1, 2023 and such, non-performing loans balances include prior period TDRs and current period loans that had modifications due to financial difficulty.

The Company's allowance for credit losses increased to $35.0 million for the period ended June 30, 2023 from $27.0 million for the period ended December 31, 2022. This increase was primarily driven by the Day 1 provision for credit losses associated with the acquisition of Emlenton that added $7.5 million to the allowance for credit losses. In addition, the Company also recorded a $1.0 million increase to the allowance for credit losses for the Day 1 reserve for purchase credit deteriorated loans from Emlenton. 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.

Based on the evaluation of the adequacy of the allowance for credit losses, management believes that the allowance for credit losses at June 30, 2023, 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

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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.

Non-performing loans to total loans at June 30, 2023 was 0.57% compared to 0.62% at December 31, 2022 and 0.59% at June 30, 2022. Early stage delinquencies, which are loans 30 - 89 days delinquent, also continue to remain at low levels, at 0.39% of total loans, at June 30, 2023 compared to 0.40% at December 31, 2022 and 0.37% at June 30, 2022. Annualized net charge-offs to average net loans outstanding for the current quarter were 0.10% compared to 0.01% for the same quarter in 2022.

Deposits. Total deposits increased to $4.30 billion at June 30, 2023, compared to $3.56 billion at December 31, 2022. This increase was primarily due to the $875.8 million in deposits assumed in the acquisition of Emlenton. The increase was offset somewhat by a decline of $116.9 million in brokered time deposits. The Company has begun using more FHLB advances in 2023 as they have become less expensive than brokered time deposits.

Short-term Borrowings. Total short-term borrowing balances increased from $95.0 million at December 31, 2022 to $300.0 million at June 30, 2023, due to a $205.0 million increase in FHLB advances. This increase was due to the Company paying down brokered time deposits with FHLB advances during 2023.

Total Stockholders' Equity. Total stockholders’ equity increased to $367.0 million at June 30, 2023 from $292.3 million at December 31, 2022. The increase was primarily due to a $59.2 million increase from the share issuance for the acquisition of Emclaire and a reduction of $17.0 million in the accumulated other comprehensive loss. Offsetting these increases, was an increase of $10.8 million in treasury stock balances as the Company repurchased 850,799 of its outstanding shares during the first six months of 2023. Shareholders received $0.17 per share, per quarter, in cash dividends in the first two quarter of 2023 while net income was $22.0 million for the first six months of 2023.

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 June 30, 2023 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 10.25%, total risk-based capital ratio stood at 13.76%, and the Tier 1 risk-based capital ratio and Tier 1 leverage ratio were at 10.74% and 7.68%, respectively, at June 30, 2023. 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 June 30, 2023.

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 2022 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 2022 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.

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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 June 30, 2023.

The current expected credit loss model (“CECL”) is used for calculating the allowance for credit losses which considers the possibility of loss over the life of the loan. It also considers historical loss rates and other qualitative adjustments, as well as a new forward-looking component that considers reasonable and supportable forecasts over the expected life of each loan. To develop the ACL estimate under the current expected loss model, the Company segments the loan portfolio into loan pools based on loan type and similar credit risk elements. The Company uses the cohort (“cohort”) and the probability of default/loss given default (“PD/LGD”) methodologies as described in the Credit Quality Indicators section of the loan footnote. Under ASC 326, if a loan does not share similar risk characteristics with loans in that pool, expected credit losses for that loan are evaluated individually. The Company has established specific thresholds for the loan portfolio that trigger when loans need to be evaluated individually. In addition, ASC 326 requires the Company to establish a separate liability for anticipated credit losses for unfunded commitments.

Under CECL the credit loss estimation process involves procedures that consider the unique characteristics of the Company’s loan portfolio segments. These segments are disaggregated into the loan pools for monitoring. A model of risk characteristics, such as loss history and delinquency experience, trends in past due and non-performing loans, as well as existing economic conditions and supportable forecasts used to determine credit loss assumptions.

The Company uses two methodologies, the cohort and the PD/LGD, to analyze loan pools. Cohort relies on the creation of cohorts to capture loans that qualify for a particular segment, as of a point in time. Those loans are then tracked over their remaining lives to determine their loss experience. The Company aggregates financial assets on the basis of similar risk characteristics when evaluating loans on a collective basis. Those characteristics include, but aren't limited to, internal or external credit score, risk ratings, financial asset, loan type, collateral type, size, effective interest rate, term, or geographical location. The Company uses cohort primarily for consumer loan portfolios.

The probability of default (“PD”) portion of PD/LGD is defined by the Company as 90 days past due, placed on non-accrual or is partially, or wholly, charged-off. Typically, a one-year time period is used to asses PD. PD can be measured and applied using various risk criteria. Risk rating is one common way to apply PDs. Loss given default (“LGD”) is to determine the percentage of loss by facility or collateral type. LGD estimates can sometimes be driven, or influenced, by product type, industry or geography. The Company uses PD/LGD primarily for commercial loan portfolios.

To the extent that any purchased loan is not specifically reviewed, such loan is assumed to have characteristics similar to the characteristics of the originated risk pools. The grade for each purchased loan without evidence of credit deterioration is reviewed subsequent to the date of acquisition any time a loan is renewed or extended or at any time information becomes available to the Company that provides material insight regarding the loan’s performance, the status of the borrower or the quality or value of the underlying collateral. To the extent that current information indicates it is probable that the Company will collect all amounts according to the contractual terms thereof, such loan is not individually considered in the determination of the required allowance for credit losses. To the extent that current information indicates it is probable that the Company will not be able to collect all amounts according to the contractual terms thereof, such loan is considered in the determination of the required level of allowance.

In determining the day one fair values of purchased loans without evidence of credit deterioration at the date of acquisition, management includes (i) no carry-over of any previously recorded allowance for loan losses and (ii) an adjustment of the unpaid principal balance to reflect an appropriate market rate of interest and credit risk, given the risk profile and grade assigned to each loan. This adjustment is accreted into earnings as a yield adjustment, using the effective yield method, over the remaining life of each loan.

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. While management

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uses the best information available to establish the allowance, future adjustments to the allowance may be necessary, which may be material, if economic conditions differ substantially from the assumptions used in estimating the allowance. If additions to the original estimate of the allowance for credit losses are deemed necessary, they will be reported in earnings in the period in which they become reasonably estimable and probable. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off.

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 June 30, 2023, this line of credit totaled $35.0 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 June 30, 2023 and December 31, 2022. Management feels that its liquidity position is adequate and will continue to monitor the position on a monthly basis. As of June 30, 2023, the Bank had outstanding balances with the FHLB of $300.0 million with additional borrowing capacity of approximately $707.8 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 $793.1 million at June 30, 2023, and $634.3 million at December 31, 2022. Additionally, the Company committed up to $19.7 million in subscriptions in Small Business Investment Company investments funds. At June 30, 2023, the Company has invested $16.4 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.

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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)	June 30, 2023 Result			December 31, 2022 Result			ALCO Guidelines
Net Interest Income Change
+400		-10.8	%	*				-12.5	%
+300		-8.4	%		-5.4	%		-10.0	%
+200		-5.6	%		-3.6	%		-7.5	%
+100		-2.9	%		-1.8	%		-5.0	%
-100		2.4	%		1.1	%		-5.0	%
-200		4.1	%		1.5	%		-10.0	%
-300		5.8	%		1.6	%		-15.0	%
-400		6.8	%	*				-20.0	%
Net Present Value Of Equity Change
+400		-30.0	%	*				-12.5	%
+300		-21.7	%		-20.9	%		-10.0	%
+200		-14.1	%		-13.4	%		-7.5	%
+100		-6.8	%		-6.4	%		-5.0	%
-100		4.8	%		3.9	%		-10.0	%
-200		7.6	%		5.5	%		-15.0	%
-300		7.9	%		4.4	%		-20.0	%
-400		9.4	%	*				-25.0	%

* Not calculated for December 31, 2022

The yield curve at June 30, 2023 is dramatically different than that of a year ago. The Federal Open Market Committee, in its intense efforts to diffuse inflation, has raised the discount rate 5% throughout the past six quarters, the fastest pace on record. These movements have inverted the yield curve whereby the two-year treasury yield exceeds the ten-year treasury yield by 106 basis points, versus the year ago ten-year exceeding the two-year by 6 basis points. With the entire curve highly elevated, asset valuation has declined substantially as evidenced by the 16% valuation reserve on the investment portfolio. For interest rate risk modeling purposes, although further rate increases are probable, movement beyond 50 more basis points is doubtful. However, the elevated rates do bring back into play the 400 basis point scenarios, which have not been modeled in recent years. The above table presents results in the up rate scenarios that exceed policy limits for the Economic Value of Equity (“EVE”). This unprecedented outcome was created by the events occurring over the past two years, namely, the massive influx of liquidity in the form of deposits in 2020 and 2021 from government assistance while interest rates were at their lowest; the deployment of those funds at those low rates; and now the usage of those deposits as consumers drain their accounts in this highly inflationary economy and prevent the Company from investing in the higher rates now available. With the EVE model moving rates even higher, it further exacerbates the differential between market rates and book rates, thereby creating the out of policy consequence. To mitigate these results, the Company has prioritized loan growth, while shrinking the investment portfolio, thereby closing the gap between the book rates and market rates. The Company has also utilized wholesale funding in response to deposit shrinkage so as not to incur cost increases on its core deposits.

The remaining results of the simulations indicate that interest rate change results fall within internal limits established by the Company at June 30, 2023 and December 31, 2022. A report on interest rate risk is presented to the Board of Directors and the Asset/Liability Committee on a quarterly basis. The Company has no market risk sensitive instruments held for trading purposes, nor does it hold derivative financial instruments, and does not plan to purchase these instruments in the near future.

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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 June 30, 2023, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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 or who were charged an NSF fee on a debit card transaction that was authorized while the account held a positive balance, 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 continues to defend the matter vigorously. The Company believes that an adverse result in the matter is reasonably possible in an amount up to $600,000.

Item 1A. Risk Factors

The Company is exposed to risk when other financial institutions experience financial difficulties which could have an adverse impact on the banking industry environment in which the Company operates. The collapses of Silicon Valley Bank, Signature Bank and First Republic Bank have caused uncertainty in the investor community and banking customers. While the Company does not believe that the circumstances of these three bank failures are indicators of broader issues within the banking system, the failures may reduce customer confidence, affect sources of funding and liquidity, increase regulatory requirements and costs, adversely affect financial markets and/or have a negative reputational ramification for the financial services industry, including the Company. The Company will continue to monitor the ongoing events concerning these three banks as well as any future potential bank failures and volatility within the financial services industry generally, together with any responsive measures taken by the banking regulators to mitigate or manage potential turmoil in the financial services industry.

For further 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, 2022.

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

Purchases of equity securities by the issuer.

On March 1, 2023, the Company announced that its Board of Directors authorized the purchase of up to 1,000,000 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. This 2023 Repurchase Program supersedes the Company's 2019 share repurchase program. The 2023 Repurchase Program may be modified, suspended or terminated by the Company at any time.

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Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program		Maximum Number of Shares that May Yet be Purchased Under the Program
Beginning balance								497,047
April 1-30		693	$	11.51		0		497,047
May 1-31		1,432		11.24		0		497,047
June 1-30		3,424		12.70		0		497,047
Ending balance		5,549		12.18		0		497,047

There was no treasury stock activity under the program during the three month period ended June 30, 2023. The Company did repurchase 850,799 shares during the first quarter of 2023.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Securities Trading Plans of Directors and Executive Officers

During the three months ended June 30, 2023, none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

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Item 6. Exhibits

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

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 June 30, 2023, 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 June 30, 2023, has been formatted in Inline XBRL.

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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: August 8, 2023

/s/ Kevin J. Helmick

Kevin J. Helmick

President and Chief Executive Officer

Dated: August 8, 2023

/s/ A. Troy Adair

A. Troy Adair

Senior Executive Vice President, Chief Financial Officer and Secretary

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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.

/s/ Kevin J. Helmick

Kevin J. Helmick

Chief Executive Officer

August 8, 2023

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.

/s/ A. Troy Adair

A. Troy Adair

Chief Financial Officer

August 8, 2023

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 June 30, 2023 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

August 8, 2023

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 June 30, 2023 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

August 8, 2023

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2023	Jul. 31, 2023
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	Jun. 30, 2023
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
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		37,487,680
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	Jun. 30, 2023	Dec. 31, 2022
ASSETS
Cash and due from banks	$ 29,800	$ 21,395
Federal funds sold and other	86,263	54,156
TOTAL CASH AND CASH EQUIVALENTS	116,063	75,551
Securities available for sale (Amortized cost $1,561,850 in 2023 and $1,534,512 in 2022)	1,316,878	1,268,025
Other investments	44,975	33,444
Loans held for sale	2,197	858
Loans	3,155,200	2,404,750
Less allowance for credit losses	34,957	26,978
NET LOANS	3,120,243	2,377,772
Premises and equipment, net	53,696	39,173
Goodwill	167,907	94,640
Other intangibles, net	24,144	7,026
Bank owned life insurance	98,590	74,972
Other assets	128,761	110,739
TOTAL ASSETS	5,073,454	4,082,200
Deposits:
Noninterest-bearing	1,084,232	896,957
Interest-bearing	3,165,381	2,526,760
Brokered time deposits	21,135	138,051
TOTAL DEPOSITS	4,270,748	3,561,768
Short-term borrowings	300,000	95,000
Long-term borrowings	88,437	88,211
Other liabilities	47,278	44,926
TOTAL LIABILITIES	4,706,463	3,789,905
Commitments and contingent liabilities
Stockholders' Equity:
Common Stock - Authorized 50,000,000 shares in 2023 and 2022; 39,321,709 shares issued in 2023 and 35,128,962 in 2022; 37,457,253 and 34,055,125 shares outstanding, respectively	364,644	305,340
Retained earnings	221,612	212,375
Accumulated other comprehensive (loss)	(193,528)	(210,490)
Treasury stock, at cost; 1,864,456 and 1,073,837 shares in 2023 and 2022, respectively	(25,737)	(14,930)
TOTAL STOCKHOLDERS' EQUITY	366,991	292,295
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 5,073,454	$ 4,082,200

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Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Securities available for sale, amortized cost	$ 1,561,850	$ 1,534,512
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	39,321,709	35,128,962
Common Stock, Shares, Outstanding	37,457,253	34,055,125
Treasury stock, shares	1,864,456	1,073,837

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Consolidated Condensed Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
INTEREST AND DIVIDEND INCOME
Loans, including fees	$ 42,331	$ 25,714	$ 83,187	$ 51,276
Taxable securities	6,654	5,223	13,204	9,810
Tax exempt securities	2,674	3,038	5,515	5,990
Dividends	594	216	970	346
Federal funds sold and other interest income	551	95	1,161	143
TOTAL INTEREST AND DIVIDEND INCOME	52,804	34,286	104,037	67,565
INTEREST EXPENSE
Deposits	14,491	1,651	27,198	2,895
Short-term borrowings	2,727	97	3,648	98
Long-term borrowings	1,008	827	2,003	1,619
TOTAL INTEREST EXPENSE	18,226	2,575	32,849	4,612
NET INTEREST INCOME	34,578	31,711	71,188	62,953
Provision (credit) for credit losses	(255)	482	8,050	(448)
Provision for unfunded loans	280	134	574	706
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	34,553	31,095	62,564	62,695
NONINTEREST INCOME
Bank owned life insurance income	584	405	1,131	814
Security gains (losses), including fair value changes for equity securities	13	(60)	134	(71)
Net gains on sale of loans	406	365	716	1,494
Other mortgage banking income, net	234	39	387	99
Legal settlement	0	0	0	8,375
Other operating income	463	1,719	1,793	2,237
TOTAL NONINTEREST INCOME	9,449	9,477	19,874	27,175
NONINTEREST EXPENSES
Salaries and employee benefits	13,625	11,073	28,270	22,904
Occupancy and equipment	3,859	2,918	7,728	5,598
FDIC insurance and state and local taxes	1,494	979	2,716	1,924
Professional fees	1,190	1,056	2,304	4,191
Merger related costs	442	674	4,755	2,614
Advertising	478	487	887	879
Intangible amortization	1,222	419	2,131	839
Core processing charges	1,144	1,123	2,308	1,868
Charitable donation	0	0	0	6,000
Other operating expenses	2,932	2,732	6,009	5,100
TOTAL NONINTEREST EXPENSES	26,386	21,461	57,108	51,917
INCOME BEFORE INCOME TAXES	17,616	19,111	25,330	37,953
INCOME TAXES	2,650	3,160	3,289	6,158
NET INCOME	$ 14,966	$ 15,951	$ 22,041	$ 31,795
EARNINGS PER SHARE - basic	$ 0.4	$ 0.47	$ 0.59	$ 0.94
EARNINGS PER SHARE - diluted	$ 0.4	$ 0.47	$ 0.59	$ 0.94
Service Charges on Deposit Accounts
NONINTEREST INCOME
Noninterest income	$ 1,501	$ 1,139	$ 2,933	$ 2,284
Trust Fees
NONINTEREST INCOME
Noninterest income	2,248	2,376	4,835	4,895
Insurance Agency Commissions
NONINTEREST INCOME
Noninterest income	1,332	1,086	2,788	2,133
Retirement Plan Consulting Fees
NONINTEREST INCOME
Noninterest income	382	323	689	720
Investment Commissions
NONINTEREST INCOME
Noninterest income	476	557	869	1,251
Debit Card and EFT Fees
NONINTEREST INCOME
Noninterest income	$ 1,810	$ 1,528	$ 3,599	$ 2,944

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Consolidated Condensed Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Comprehensive Income [Abstract]
Net Income (Loss)		$ 14,966	$ 15,951	$ 22,041	$ 31,795
Other comprehensive income (loss):
Net unrealized holding (losses) gains on available for sale securities		(21,309)	(105,497)	21,591	(217,894)
Reclassification adjustment for losses (gains) realized in income	[1]	0	31	(120)	31
Net unrealized holding (losses) gains		(21,309)	(105,466)	21,471	(217,863)
Income tax effect		4,475	22,148	(4,509)	45,751
Unrealized holding (losses) gains, net of reclassification and tax		(16,834)	(83,318)	16,962	(172,112)
Change in funded status of post-retirement plan, net of tax		0	(2)	0	(3)
Other comprehensive (loss) income, net of tax		(16,834)	(83,320)	16,962	(172,115)
TOTAL COMPREHENSIVE (LOSS) INCOME		$ (1,868)	$ (67,369)	$ 39,003	$ (140,320)

[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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Consolidated Condensed Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock
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	31,795
Other comprehensive income (loss)	(172,115)
Balance at Jun. 30, 2022	321,449	304,707	194,809	(162,820)	(15,247)
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)
Balance at Dec. 31, 2022	292,295	305,340	212,375	(210,490)	(14,930)
Net income	7,075		7,075
Other comprehensive income (loss)	33,796			33,796
Share issuance as part of a business combination	59,202	59,202
Restricted share issuance	5	(432)			437
Restricted share forfeitures	0	21			(21)
Stock based compensation expense	615	615
Vesting of Long Term Incentive Plan	3	(428)			431
Share forfeitures for taxes	(252)				(252)
Dividends paid	(6,437)		(6,437)
Treasury share purchases	(11,660)				(11,660)
Balance at Mar. 31, 2023	374,642	364,318	213,013	(176,694)	(25,995)
Balance at Dec. 31, 2022	292,295	305,340	212,375	(210,490)	(14,930)
Net income	22,041
Other comprehensive income (loss)	16,962
Balance at Jun. 30, 2023	366,991	364,644	221,612	(193,528)	(25,737)
Balance at Mar. 31, 2023	374,642	364,318	213,013	(176,694)	(25,995)
Net income	14,966		14,966
Other comprehensive income (loss)	(16,834)			(16,834)
Restricted share issuance	3	(323)			326
Stock based compensation expense	649	649
Share forfeitures for taxes	(68)				(68)
Dividends paid	(6,367)		6,367
Balance at Jun. 30, 2023	$ 366,991	$ 364,644	$ 221,612	$ (193,528)	$ (25,737)

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Consolidated Condensed Statements of Stockholders' Equity (Parenthetical) Unaudited - $ / shares	3 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022
Retained Earnings
Cash dividend declared per share of common stock	$ 0.17	$ 0.17	$ 0.16	$ 0.16

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Consolidated Condensed Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 22,041,000	$ 31,795,000
Adjustments to reconcile net income to net cash from operating activities:
Provision (credit) for credit losses	8,050,000	(448,000)
Provision for unfunded loans	574,000	706,000
Depreciation and amortization	4,101,000	2,341,000
Net amortization of securities	450,000	2,708,000
Available for sale security (gains) losses	(120,000)	31,000
Realized (gains) losses on equity securities	(14,000)	40,000
Loss on premises and equipment sales and disposals, net	0	20,000
Stock compensation expense	1,264,000	803,000
Earnings on bank owned life insurance	(1,131,000)	(814,000)
Origination of loans held for sale	(19,634,000)	(65,892,000)
Proceeds from loans held for sale	21,945,000	69,128,000
Net gains on sale of loans	(716,000)	(1,494,000)
Net change in other assets and liabilities	(7,935,000)	1,309,000
NET CASH FROM OPERATING ACTIVITIES	28,875,000	40,233,000
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and repayments of securities available for sale	30,034,000	45,241,000
Proceeds from sales of securities available for sale	69,918,000	1,670,000
Purchases of securities available for sale	(650,000)	(201,518,000)
Proceeds from sales of equity securities	24,000	35,000
Purchase of equity securities	(31,000)	(38,000)
Proceeds from maturities and repayments of SBIC funds	543,000	1,013,000
Purchases of SBIC funds	(531,000)	(1,475,000)
Proceeds from redemption of regulatory stock	13,951,000	5,000
Purchase of regulatory stock	(17,679,000)	(3,572,000)
Loan originations and payments, net	(10,436,000)	(45,593,000)
Proceeds from land and building sales	0	1,067,000
Additions to premises and equipment	779,000	(1,872,000)
Net cash paid in business combinations	(13,175,000)	0
NET CASH FROM INVESTING ACTIVITIES	72,747,000	(205,037,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits	(166,833,000)	78,303,000
Net change in short-term borrowings	130,000,000	50,000,000
Cash dividends paid	(12,733,000)	(10,831,000)
Repurchase of common shares	(11,544,000)	0
NET CASH FROM FINANCING ACTIVITIES	(61,110,000)	117,472,000
NET CHANGE IN CASH AND CASH EQUIVALENTS	40,512,000	(47,332,000)
Beginning cash and cash equivalents	75,551,000	112,790,000
Ending cash and cash equivalents	116,063,000	65,458,000
Supplemental cash flow information:
Interest paid	34,161,000	4,803,000
Supplemental noncash disclosures:
Issuance of stock awards	1,194,000	1,760,000
Issuance of stock for business combinations	$ 59,202,000	$ 0

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ 14,966	$ 7,075	$ 15,951	$ 15,844	$ 22,041	$ 31,795

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Insider Trading Arrangements	6 Months Ended
	Jun. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTES TO UNAUDITED CONSOLIDATED CONDENSED 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 consolidated condensed 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 2022 Annual Report to Shareholders included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 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 June 30, 2023. Outstanding shares at June 30, 2023 were 37,457,253.

Comprehensive Income:

Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) 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. The Company adopted ASU 2022-02 on January 1, 2023. The adoption of this standard did not have a material effect on the Company’s operating results or financial condition.

On October 28, 2021, FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU requires contract assets and contract liabilities to be accounted for as if they (the acquirer) entered into the original contract at the same time and same date as the acquiree. This is a shift from existing guidance, which required the acquirer to recognize contract assets and contract liabilities at their fair value as of the acquisition date. The amendments in this Update were effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption of this standard did not have a material effect on the Company’s operating results or financial condition. Management determined that Emclaire had an immaterial amount of contracts with customers.

On March 12, 2020, the FASB issued ASU 2020-04 and amended by ASU 2021-01, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, to ease the burden of accounting for contract modifications related to reference rate reform. The amendments in ASU 2020-04 create a new Topic in the Codification, ASC 848, Reference Rate Reform, which contains guidance that is designed to simplify how entities account for contracts that are modified to replace LIBOR or other benchmark interest rates with new rates. The amendments in ASU 2020-04 give entities the option to apply expedients and exceptions to contract modifications that are made until December 31, 2022, if certain criteria are met. If adopted, these amendments and exceptions should be applied to all eligible modifications to contracts that are accounted for under an ASC Topic or industry Subtopic. The guidance in ASC 848 does not apply to any contract modifications that was made after December 31, 2022. In December 2022, the FASB issued ASU 2022-06 that defers the sunset date from December 31, 2022 to December 31, 2024. 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

6 Months Ended

Jun. 30, 2023

Business Combinations [Abstract]

Business Combinations

Business Combinations:

On January 1, 2023, the Company completed its previously announced merger with Emclaire Financial Corp., a Pennsylvania corporation and registered financial holding company (“Emclaire”), pursuant to the Agreement and Plan of Merger dated as of March 23, 2022. The Farmers National Bank of Emlenton, the banking subsidiary of Emclaire, merged with and into The Farmers National Bank of Canfield, the national banking subsidiary of the Company, with Farmers Bank as the surviving bank. Pursuant to the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”) Emclaire 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 The Farmers National Bank of Emlenton, the banking subsidiary of Emclaire, merged with and into The Farmers National Bank of Canfield, the national banking subsidiary of the Company, with Farmers Bank as the surviving bank. Pursuant to the terms of the Merger Agreement, at the effective time of the merger, each common share, without par value, of Emclaire common shares issued and outstanding was converted into the right to receive, without interest, $40.00 in cash or 2.15 common shares, without par value, of the Company's common shares, subject to an overall limitation of 70% of the Emclaire common shares being exchanged and the remaining 30% of Emclaire common shares being exchanged for the cash. The transaction created expansion for the Company in Pennsylvania and into the Pittsburgh market. The Company issued 4.2 million shares of its common stock along with cash of $33.4 million, which represented a transaction value of approximately $92.6 million based on its closing stock price of $14.12 on December 31, 2022.

In accordance with ASC 805, the Company expensed approximately $4.8 million of merger related costs, for the Emclaire acquisition, during the six month period ended June 30, 2023, in addition to $2.0 million expensed for the entire year of 2022. The Company recorded goodwill of $73.4 million as a result of the 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 Pennsylvania. 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 fair value estimates included in these financial statements are based on preliminary valuations; certain loan, deferred tax, and premises and equipment measurements have not been finalized and are subject to change. The Company does

not expect material variances from these estimates and expects that final valuation estimates will be completed prior to December 31, 2023.

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

(In Thousands of Dollars)
Consideration
Cash	$	33,440
Stock		59,202
Fair value of total consideration transferred	$	92,642
Fair value of assets acquired
Cash and cash equivalents	$	20,265
Securities available for sale		126,970
Other investments		7,795
Loans, net		740,659
Premises and equipment		16,103
Bank owned life insurance		22,485
Core deposit intangible		19,249
Current and deferred taxes		17,246
Other assets		6,387
Total assets acquired		977,159
Fair value of liabilities assumed
Deposits		875,813
Short-term borrowings		75,000
Accrued interest payable and other liabilities		7,104
Total liabilities		957,917
Net assets acquired	$	19,242
Goodwill created		73,400
Total net assets acquired	$	92,642

The fair value of net assets acquired includes fair value adjustments to certain receivables that were considered performing as of the acquisition date. The fair value adjustments were determined using the income method, discounted cash flow approach. However, the Company believes that all contractual cash flows related to these financial instruments will be collected. As such, these receivables were not considered purchase credit deteriorated ("PCD") at the acquisition date and were not subject to the guidance relating to PCD loans. Receivables acquired that were not subject to these requirements had a fair value and gross contractual amounts receivable of $714.4 million and $764.8 million on the date of acquisition.

The fair value of purchased financial assets that were classified as PCD loans are discussed in the loan footnote.

The following table presents unaudited pro forma information as if the Emclaire acquisition that occurred on January 1, 2023 actually took place on January 1, 2022. The unaudited pro forma information for the period ended June 30, 2022 includes adjustments of interest income on loans, amortization of core deposit intangibles arising from the transaction, interest expense on deposits and borrowings acquired. The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transaction been effective on the assumed date.

(In thousands of dollars except per share results)	For Three Months  Ended June 30, 2022		For Six Months  Ended June 30, 2022
Net interest income	$	43,126	$	85,127
Provision for credit losses		991		8,246
Noninterest income		10,427		29,133
Noninterest expense		28,253		69,426
Income before income taxes		24,309		36,588
Income tax expense		4,237		5,796
Net income	$	20,072	$	30,792
Basic earnings per share	$	0.53	$	0.81
Diluted earnings per share	$	0.53	$	0.81

On July 1, 2022, Farmers National Insurance, LLC acquired substantially all of the assets of Randy L. Jones Agency, Inc., doing business as Champion Insurance for $900 thousand. Intangible assets of $633 thousand were recorded along with goodwill of $267 thousand.

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Securities

6 Months Ended

Jun. 30, 2023

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 June 30, 2023 and December 31, 2022 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
June 30, 2023
U.S. Treasury and U.S. government sponsored entities	$	155,169	$	99	$	(20,103	)	$	135,165
State and political subdivisions		648,030		951		(105,919	)		543,062
Corporate bonds		18,329		25		(722	)		17,632
Mortgage-backed securities		653,898		9		(112,783	)		541,124
Collateralized mortgage obligations		82,965		117		(6,286	)		76,796
Small Business Administration		3,459		0		(360	)		3,099
Totals	$	1,561,850	$	1,201	$	(246,173	)	$	1,316,878

			Gross		Gross
	Amortized		Unrealized		Unrealized
(In Thousands of Dollars)	Cost		Gains		Losses			Fair Value
December 31, 2022
U.S. Treasury and U.S. government sponsored    entities	$	149,712	$	0	$	(21,616	)	$	128,096
State and political subdivisions		651,705		266		(121,891	)		530,080
Corporate bonds		4,181		0		(302	)		3,879
Mortgage-backed securities - residential		672,784		12		(117,654	)		555,142
Collateralized mortgage obligations		52,291		0		(4,937	)		47,354
Small Business Administration		3,839		0		(365	)		3,474
Totals	$	1,534,512	$	278	$	(266,765	)	$	1,268,025

There were no sales of available for sale securities in the three month period ended June 30, 2023. Proceeds from the sale of available for sale securities were $69.9 million for the six month period ended June 30, 2023. Gross gains of $441 thousand and gross losses of $321 thousand were realized on these sales for the six month period ended June 30, 2023. In addition, realized gains on equity securities of $13 thousand and $14 thousand were recognized in the income statement during the three and six month periods as of June 30, 2023, respectively.

Proceeds from the sale of available for sale securities were $1.7 million for both the three and six month periods ended June 30, 2022. Gross losses of $31 thousand were realized on these sales for both the three and six month periods ended June 30, 2022. Realized losses on equity securities of $29 thousand and $40 thousand were recognized in the income statement during the three and six month periods as of June 30, 2022, 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.

	June 30, 2023
(In Thousands of Dollars)	Amortized Cost		Fair Value
Maturity
Within one year	$	716	$	706
One to five years		39,851		37,153
Five to ten years		180,584		159,597
Beyond ten years		600,377		498,403
Mortgage-backed, collateralized mortgage obligations and Small Business Administration securities		740,322		621,019
Total	$	1,561,850	$	1,316,878

The following table summarizes the available for sale investment securities with unrealized losses at June 30, 2023 and December 31, 2022, 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
June 30, 2023
U.S. Treasury and U.S. government sponsored entities	$	14,652	$	(692	)	$	115,535	$	(19,411	)	$	130,187	$	(20,103	)
State and political subdivisions		73,802		(2,835	)		432,373		(103,084	)		506,175		(105,919	)
Corporate bonds		11,011		(411	)		3,561		(311	)		14,572		(722	)
Mortgage-backed securities		4,678		(44	)		535,644		(112,739	)		540,322		(112,783	)
Collateralized mortgage obligations		28,977		(930	)		40,852		(5,356	)		69,829		(6,286	)
Small Business Administration		0		0			3,099		(360	)		3,099		(360	)
Total temporarily impaired	$	133,120	$	(4,912	)	$	1,131,064	$	(241,261	)	$	1,264,184	$	(246,173	)

	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, 2022
U.S. Treasury and U.S. government sponsored entities	$	52,311	$	(5,835	)	$	75,685	$	(15,781	)	$	127,996	$	(21,616	)
State and political subdivisions		306,709		(56,650	)		191,584		(65,241	)		498,293		(121,891	)
Corporate bonds		2,893		(122	)		986		(180	)		3,879		(302	)
Mortgage-backed securities - residential		101,476		(13,545	)		453,233		(104,109	)		554,709		(117,654	)
Collateralized mortgage obligations		42,140		(4,137	)		5,214		(800	)		47,354		(4,937	)
Small Business Administration		1,295		(122	)		2,179		(243	)		3,474		(365	)
Total temporarily impaired	$	506,824	$	(80,411	)	$	728,881	$	(186,354	)	$	1,235,705	$	(266,765	)

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 June 30, 2023, the Company’s security portfolio consisted of 988 securities, 899 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. In addition, management has the ability and the intent to hold the securities for a period of time sufficient to allow for any recovery in fair value. As of June 30, 2023 the Company has not recorded an allowance for credit losses on AFS securities.

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Loans

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

Loans

Loans:

Loan balances were as follows:

(In Thousands of Dollars)	June 30, 2023			December 31, 2022
Commercial real estate
Owner occupied	$	357,329		$	330,768
Non-owner occupied		697,486			563,652
Farmland		192,182			188,850
Other		230,160			133,630
Commercial
Commercial and industrial		362,664			293,643
Agricultural		58,625			58,087
Residential real estate
1-4 family residential		849,533			475,791
Home equity lines of credit		138,535			132,179
Consumer
Indirect		226,187			197,125
Direct		25,980			16,421
Other		8,159			7,714
Total loans	$	3,146,840		$	2,397,860
Net deferred loan costs		8,360			6,890
Allowance for credit losses		(34,957	)		(26,978	)
Net loans	$	3,120,243		$	2,377,772

Allowance for credit loss activity

The following tables present the activity in the allowance for credit losses by portfolio segment for the three and six month periods ended June 30, 2023 and 2022:

Three Months Ended June 30, 2023

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	19,819		$	5,230		$	6,732		$	4,230		$	36,011
PCD ACL on loans acquired		0			0			0			0			0
(Credit) Provision for credit losses		(1,125	)		639			131			100			(255	)
Loans charged off		(157	)		(591	)		(11	)		(212	)		(971	)
Recoveries		0			17			14			141			172
Total ending allowance balance	$	18,537		$	5,295		$	6,866		$	4,259		$	34,957

Six Months Ended June 30, 2023

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	14,840		$	4,186		$	4,374		$	3,578		$	26,978
PCD ACL on loans acquired		850			138			11			0			999
Provision for credit losses		3,003			1,683			2,529			835			8,050
Loans charged off		(157	)		(734	)		(94	)		(455	)		(1,440	)
Recoveries		1			22			46			301			370
Total ending allowance balance	$	18,537		$	5,295		$	6,866		$	4,259		$	34,957

Three Months Ended June 30, 2022

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate		Consumer			Total
Allowance for credit losses
Beginning balance	$	15,207		$	3,867		$	4,702	$	3,239		$	27,015
(Credit) Provision for credit losses		(349	)		70			197		564			482
Loans charged off		0			(46	)		0		(132	)		(178	)
Recoveries		1			2			16		116			135
Total ending allowance balance	$	14,859		$	3,893		$	4,915	$	3,787		$	27,454

Six Months Ended June 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		(1,021	)		341			51			181			(448	)
Loans charged off		0			(1,405	)		(34	)		(329	)		(1,768	)
Recoveries		1			8			28			247			284
Total ending allowance balance	$	14,859		$	3,893		$	4,915		$	3,787		$	27,454

The cumulative loss rate used as the basis for the estimate of credit losses is comprised of the Company's historical loss experience from December 31, 2011 to June 30, 2023. As of June 30, 2023, the Company expects that the markets in which it operates will experience minimal changes to economic conditions, stable trend in unemployment rate, and a level trend of delinquencies. Management adjusted historical loss experience for these expectations. No reversion adjustments were necessary, as the starting point for the Company's estimate was a cumulative loss rate covering the expected contractual term of the portfolio. While there are many factors that go into the calculation of the allowance for credit losses, the change in the balances from June 30, 2022 to June 30, 2023 is largely attributed to the Emlenton merger.

The following tables present the amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing as of June 30, 2023:

(In Thousands of Dollars)	Nonaccrual with no allowance for credit loss		Nonaccrual with an allowance for credit loss		Loans past due over 89 days still accruing
June 30, 2023
Commercial real estate
Owner occupied	$	679	$	486	$	0
Non-owner occupied		1,891		6,285		0
Farmland		2,059		113		0
Other		0		19		0
Commercial
Commercial and industrial		117		1,780		0
Agricultural		224		198		0
Residential real estate
1-4 family residential		269		2,096		594
Home equity lines of credit		274		242		112
Consumer
Indirect		10		296		57
Direct		65		86		1
Other		0		3		0
Total loans	$	5,588	$	11,604	$	764

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 December 31, 2022:

	December 31, 2022
(In Thousands of Dollars)	Nonaccrual		Loans Past Due 90 Days or More Still Accruing
Commercial real estate
Owner occupied	$	993	$	0
Non-owner occupied		3,031		0
Farmland		2,183		0
Other		33		0
Commercial
Commercial and industrial		3,840		50
Agricultural		299		0
Residential real estate
1-4 family residential		2,703		310
Home equity lines of credit		735		58
Consumer
Indirect		313		62
Direct		179		12
Other		2		0
Total loans	$	14,311	$	492

The following tables present the amortized cost basis of collateral-dependent loans by class of loans as of June 30, 2023:

(In Thousands of Dollars)	Real Estate		Business Assets		Vehicles		Cash
June 30, 2023
Commercial real estate
Owner occupied	$	801	$	0	$	0	$	0
Non-owner occupied		5,080		0		0		0
Farmland		2,059		0		0		0
Other		0		0		0		0
Commercial
Commercial and industrial		0		1,170		0		0
Agricultural		0		224		0		0
Residential real estate
1-4 family residential		1,576		0		0		0
Home equity lines of credit		331		0		0		0
Consumer
Indirect		0		0		48		0
Direct		0		0		24		66
Other		0		0		0		0
Total loans	$	9,847	$	1,394	$	72	$	66

The following tables present the aging of the recorded investment in past due loans as of June 30, 2023 and December 31, 2022 by class of loans.

(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
June 30, 2023
Commercial real estate
Owner occupied	$	345	$	0	$	1,165	$	1,510	$	355,556	$	357,066
Non-owner occupied		0		0		8,176		8,176		688,768		696,944
Farmland		321		0		2,172		2,493		189,452		191,945
Other		80		0		19		99		229,719		229,818
Commercial
Commercial and industrial		378		239		1,897		2,514		361,437		363,951
Agricultural		227		166		422		815		58,511		59,326
Residential real estate
1-4 family residential		8,256		979		2,959		12,194		837,014		849,208
Home equity lines of credit		214		108		628		950		137,617		138,567
Consumer
Indirect		822		79		363		1,264		232,945		234,209
Direct		81		16		152		249		25,758		26,007
Other		6		4		3		13		8,146		8,159
Total loans	$	10,730	$	1,591	$	17,956	$	30,277	$	3,124,923	$	3,155,200

(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, 2022
Commercial real estate
Owner occupied	$	159	$	0	$	993	$	1,152	$	329,305	$	330,457
Non-owner occupied		0		0		3,031		3,031		560,013		563,044
Farmland		0		0		2,183		2,183		186,399		188,582
Other		0		0		33		33		133,288		133,321
Commercial
Commercial and industrial		1,034		185		3,890		5,109		289,297		294,406
Agricultural		104		20		299		423		58,166		58,589
Residential real estate
1-4 family residential		4,247		1,775		3,013		9,035		466,313		475,348
Home equity lines of credit		115		92		793		1,000		131,209		132,209
Consumer
Indirect		1,267		298		375		1,940		202,683		204,623
Direct		234		70		191		495		15,962		16,457
Other		0		5		2		7		7,707		7,714
Total loans	$	7,160	$	2,445	$	14,803	$	24,408	$	2,380,342	$	2,404,750

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Loan Restructurings

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Loan Restructurings

Loan Restructurings

The Company adopted the accounting guidance in ASU No. 2022-02, effective as of January 1, 2023, which eliminates the recognition and measurement of troubled debt restructurings ("TDRs"). Due to the removal of the TDR designation, the Company evaluates all loan restructurings according to the accounting guidance for loan modifications to determine if the restructuring results in a new loan or a continuation of the existing loan. Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows include situations where there is principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and combinations of the listed modifications. Therefore, the disclosures related to loan restructurings are only for modifications that directly affect cash flows.

Any restructuring of a loan in which the borrower has experienced financial difficulty and the terms of the loan are more favorable than would generally be considered for borrowers with the same credit characteristics would be individually evaluated. Otherwise, the restructured loan remains in the appropriate segment in the ACL model.

The following table shows the amortized cost basis for the loans restructured during the three and six months ended June 30, 2023 to borrowers experiencing financial difficulty, disaggregrated by class of financing receivables:

Three Months Ended June 30, 2023	Restructured Loans
(In Thousands of Dollars)	Number of Contracts		Amortized Cost Basis		% of Total class of Financing receivable
Total accruing restructured loans		0	$	0		0.00	%
Nonaccrual restructured loans
Total nonaccrual restructured loans		0	$	0		0.00	%
Total restructured loans		0	$	0		0.00	%

Six Months Ended June 30, 2023	Restructured Loans
(In Thousands of Dollars)	Number of Contracts		Amortized Cost Basis		% of Total class of Financing receivable
Commercial
Commercial and industrial		1	$	50		0.01	%
Total accruing restructured loans		1	$	50		0.01	%
Nonaccrual restructured loans
Total nonaccrual restructured loans		0	$	0		0.00	%
Total restructured loans		1	$	50		0.01	%

During the first quarter of 2023 the Company modified a commercial line of credit as a restructured loan. This nonperforming loan was extended with payments deferred until maturity to allow the borrower to complete the remediation process needed to obtain a "No Further Action" letter from the EPA that is needed to finalize the sale of the real estate securing the loan. This loan is included as an individually evaluated loan with no specific reserve due to the anticipated sale of the real estate which will sufficiently retire the debt.

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that have been modified in the three and six months ended June 30, 2023:

Three Months Ended June 30, 2023	Payment status (Amortized cost Basis)
(In Thousands of Dollars)	Current		30-89 Days past due		90+ Days past due
Total accruing restructured loans	$	0	$	0	$	0
Nonaccrual restructured loans
Total nonaccrual restructured loans	$	0	$	0	$	0
Total restructured loans	$	0	$	0	$	0

Six Months Ended June 30, 2023	Payment status (Amortized cost Basis)
(In Thousands of Dollars)	Current		30-89 Days past due		90+ Days past due
Commercial
Commercial and industrial	$	50	$	0	$	0
Total accruing restructured loans	$	50	$	0	$	0
Nonaccrual restructured loans
Total nonaccrual restructured loans	$	0	$	0	$	0
Total restructured loans	$	50	$	0	$	0

As of June 30, 2023, the Company had no commitments to lend any additional funds on restructured loans. As of June 30, 2023, the Company had no loans that defaulted during the period and had been modified preceding the payment default when the borrower was experiencing financially difficulty at the time of modification. For purposes of this disclosure a default occurs when, within 12 months of the original modification, a loan is 30 days contractually past due under the modified terms.

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Credit Quality Indicators

6 Months Ended

Jun. 30, 2023

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 June 30, 2023 and December 31, 2022, 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
June 30, 2023
Commercial real estate
Owner occupied	$	347,171	$	5,326	$	4,569	$	357,066
Non-owner occupied		646,559		22,362		28,023		696,944
Farmland		189,238		0		2,707		191,945
Other		222,049		7,550		219		229,818
Commercial
Commercial and industrial		347,795		7,142		9,014		363,951
Agricultural		58,869		0		457		59,326
Total loans	$	1,811,681	$	42,380	$	44,989	$	1,899,050

(In Thousands of Dollars)	Pass		Special Mention		Sub standard		Total
December 31, 2022
Commercial real estate
Owner occupied	$	324,979	$	1,193	$	4,285	$	330,457
Non-owner occupied		527,267		25,541		10,236		563,044
Farmland		186,057		0		2,525		188,582
Other		133,218		0		103		133,321
Commercial
Commercial and industrial		282,412		777		11,217		294,406
Agricultural		58,002		250		337		58,589
Total loans	$	1,511,935	$	27,761	$	28,703	$	1,568,399

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 June 30, 2023, other real estate owned and foreclosure properties were $34 thousand and $178 thousand, respectively. At December 31, 2022, other real estate owned and foreclosure properties were $0 and $129 thousand, respectively.

The following tables present the recorded investment in residential, consumer indirect and direct auto loans based on payment activity as of June 30, 2023 and December 31, 2022. 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
June 30, 2023
Performing	$	846,249	$	137,939	$	233,846	$	25,855	$	8,156
Nonperforming		2,959		628		363		152		3
Total loans	$	849,208	$	138,567	$	234,209	$	26,007	$	8,159

	Residential Real Estate				Consumer
(In Thousands of Dollars)	1-4 Family Residential		Home Equity Lines of Credit		Indirect		Direct		Other
December 31, 2022
Performing	$	472,335	$	131,416	$	204,248	$	16,266	$	7,712
Nonperforming		3,013		793		375		191		2
Total loans	$	475,348	$	132,209	$	204,623	$	16,457	$	7,714

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

	Term Loans Amortized Cost Basis by Origination Year
As of June 30, 2023	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total
Commercial real estate
Risk Rating
Pass	$	54,049	$	254,672	$	225,147	$	143,875	$	151,048	$	373,002	$	13,986	$	1,215,779
Special mention		0		0		4,496		12,838		8,515		9,389		0		35,238
Substandard		0		0		1,650		3,841		2,063		24,149		1,108		32,811
Total commercial real estate loans	$	54,049	$	254,672	$	231,293	$	160,554	$	161,626	$	406,540	$	15,094	$	1,283,828
Commercial real estate current period gross write-offs	$	0	$	0	$	0	$	0	$	1	$	156	$	0	$	157
Commercial and industrial
Risk Rating
Pass	$	63,363	$	97,102	$	48,716	$	29,047	$	13,470	$	29,190	$	66,907	$	347,795
Special mention		0		174		616		75		1,038		10		5,229		7,142
Substandard		228		3,408		333		783		294		1,006		2,962		9,014
Total commercial loans	$	63,591	$	100,684	$	49,665	$	29,905	$	14,802	$	30,206	$	75,098	$	363,951
Commercial and industrial current period gross write-offs	$	0	$	95	$	377	$	11	$	16	$	172	$	0	$	671
Agricultural
Risk Rating
Pass	$	18,279	$	53,234	$	32,543	$	41,069	$	21,627	$	64,050	$	17,305	$	248,107
Special mention		0		0		0		0		0		0		0		0
Substandard		0		0		369		216		61		2,390		128		3,164
Total agricultural loans	$	18,279	$	53,234	$	32,912	$	41,285	$	21,688	$	66,440	$	17,433	$	251,271
Agricultural current period gross write-offs	$	0	$	15	$	44	$	0	$	0	$	4	$	0	$	63
Residential real estate
Risk Rating
Pass	$	26,642	$	177,294	$	169,952	$	141,482	$	51,291	$	268,622	$	3,699	$	838,982
Special mention		0		0		0		68		113		159		0		340
Substandard		0		31		455		440		378		8,582		0		9,886
Total residential real estate loans	$	26,642	$	177,325	$	170,407	$	141,990	$	51,782	$	277,363	$	3,699	$	849,208
Residential real estate current period gross write-offs	$	0	$	0	$	0	$	0	$	0	$	82	$	0	$	82
Home equity lines of credit
Risk Rating
Pass	$	0	$	19	$	10	$	47	$	67	$	2,066	$	134,014	$	136,223
Special mention		0		0		0		0		0		0		38		38
Substandard		0		27		50		82		20		2,028		99		2,306
Total home equity lines of credit	$	0	$	46	$	60	$	129	$	87	$	4,094	$	134,151	$	138,567
Home equity lines of credit current period gross write-offs	$	0	$	0	$	0	$	8	$	0	$	4	$	0	$	12
Consumer
Risk Rating
Pass	$	44,887	$	87,410	$	40,831	$	27,009	$	16,462	$	43,017	$	7,843	$	267,459
Substandard		0		168		65		245		176		262		0		916
Total consumer loans	$	44,887	$	87,578	$	40,896	$	27,254	$	16,638	$	43,279	$	7,843	$	268,375
Consumer current period gross write-offs	$	0	$	113	$	46	$	76	$	30	$	157	$	33	$	455

	Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2022	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total
Commercial real estate
Risk Rating
Pass	$	188,240	$	174,841	$	120,883	$	138,342	$	89,769	$	256,103	$	17,286	$	985,464
Special mention		0		711		1,861		5,286		624		18,252		0		26,734
Substandard		0		18		256		1,968		267		10,952		1,163		14,624
Total commercial real estate loans	$	188,240	$	175,570	$	123,000	$	145,596	$	90,660	$	285,307	$	18,449	$	1,026,822
Commercial
Risk Rating
Pass	$	100,368	$	45,872	$	34,110	$	16,854	$	13,574	$	14,664	$	56,970	$	282,412
Special mention		0		197		0		0		0		0		580		777
Substandard		3,642		1,331		356		152		110		1,761		3,865		11,217
Total commercial loans	$	104,010	$	47,400	$	34,466	$	17,006	$	13,684	$	16,425	$	61,415	$	294,406
Agricultural
Risk Rating
Pass	$	51,096	$	36,376	$	44,133	$	23,661	$	24,003	$	45,490	$	19,300	$	244,059
Special mention		0		0		0		0		0		0		250		250
Substandard		0		379		235		72		0		2,146		30		2,862
Total agricultural loans	$	51,096	$	36,755	$	44,368	$	23,733	$	24,003	$	47,636	$	19,580	$	247,171
Residential real estate
Risk Rating
Pass	$	83,951	$	112,463	$	76,095	$	31,404	$	22,918	$	135,757	$	3,956	$	466,544
Special mention		0		0		70		118		76		93		0		357
Substandard		0		136		249		121		9		7,932		0		8,447
Total residential real estate loans	$	83,951	$	112,599	$	76,414	$	31,643	$	23,003	$	143,782	$	3,956	$	475,348
Home equity lines of credit
Risk Rating
Pass	$	0	$	10	$	0	$	0	$	16	$	1,394	$	128,622	$	130,042
Special mention		0		0		0		0		0		0		49		49
Substandard		0		13		137		20		0		1,848		100		2,118
Total home equity lines of credit	$	0	$	23	$	137	$	20	$	16	$	3,242	$	128,771	$	132,209
Consumer
Risk Rating
Pass	$	98,530	$	46,945	$	32,284	$	20,849	$	10,918	$	10,942	$	7,302	$	227,770
Special mention		0		0		0		0		0		0		0		0
Substandard		102		113		267		230		109		202		1		1,024
Total consumer loans	$	98,632	$	47,058	$	32,551	$	21,079	$	11,027	$	11,144	$	7,303	$	228,794

The Company follows ASU 2016-13 to calculate the allowance for credit losses which requires projecting credit losses over the lifetime of the credits. The ACL is adjusted through the provision for credit losses and reduced by net charge offs of loans. Although the Company has a diversified loan portfolio, the credit risk in the loan portfolio is largely influenced by general economic conditions and trends of the counties and markets in which the debtors operate, and the resulting impact on the operations of borrowers or on the value of any underlying collateral.

The credit loss estimation process involves procedures that consider the unique characteristics of the Company’s loan portfolio segments. These segments are disaggregated into the loan pools for monitoring. A model of risk characteristics, such as loss history and delinquency experience, trends in past due and non-performing loans, as well as existing economic conditions and supportable forecasts are used to determine credit loss assumptions.

The Company uses two methodologies to analyze loan pools. The cohort method and the PD/LGD. Cohort relies on the creation of cohorts to capture loans that qualify for a particular segment, as of a point in time. Those loans are then tracked over their remaining lives to determine their loss experience. The Company aggregates financial assets on the basis of similar risk characteristics when evaluating loans on a collective basis. Those characteristics include, but aren’t limited to, internal or external credit score, risk ratings, financial asset, loan type, collateral type, size, effective interest rate, term, or geographical location. The Company uses cohort primarily for consumer loan portfolios.

The probability of default portion of PD/LGD is defined by the Company as 90 days past due, placed on non-accrual, loan restructuring for borrowers experiencing financial difficulty or is partially, or wholly, charged-off. Typically, a one-year time period is used to asses

PD. PD can be measured and applied using various risk criteria. Risk rating is one common way to apply PDs. Loss given default LGD is to determine the percentage of loss by facility or collateral type. LGD estimates can sometimes be driven, or influenced, by product type, industry or geography. The Company uses PD/LGD primarily for commercial loan portfolios.

The following table presents the loan pools and the associated methodology used during the calculation of the allowance for credit losses in 2023.

Portfolio Segments	Loan Pool	Methodology	Loss Drivers
Residential real estate	1-4 Family Residential Real Estate - 1st Liens	Cohort	Credit Loss History
	1-4 Family Residential Real Estate - 2nd Liens	Cohort	Credit Loss History
Home Equity Lines of Credit	Home Equity Lines of Credit	Cohort	Credit Loss History
Consumer Finance	Cash Reserves	Cohort	Credit Loss History
	Direct	Cohort	Credit Loss History
	Indirect	Cohort	Credit Loss History
Commercial	Commercial and Industrial	PD/LGD	Credit Loss History
	Agricultural	PD/LGD	Credit Loss History
	Municipal	PD/LGD	Credit Loss History
Commercial real estate	Owner Occupied	PD/LGD	Credit Loss History
	Non-Owner Occupied	PD/LGD	Credit Loss History
	Multifamily	PD/LGD	Credit Loss History
	Farmland	PD/LGD	Credit Loss History
	Construction	PD/LGD	Credit Loss History

According to the accounting standard an entity may make an accounting policy election not to measure an allowance for credit losses for accrued interest receivable if the entity writes off the applicable accrued interest receivable balance in a timely manner. The Company has made the accounting policy election not to measure an allowance for credit losses for accrued interest receivables for all loan segments. Current policy dictates that a loan will be placed on nonaccrual status, with the current accrued interest receivable balance being written off, upon the loan being 90 days delinquent or when the loan is deemed to be collateral dependent and the collateral analysis shows insufficient collateral coverage based on a current assessment of the value of the collateral.

In addition, ASC Topic 326 requires the Company to establish a liability for anticipated credit losses for unfunded commitments. To accomplish this, the Company must first establish a loss expectation for extended (funded) commitments. This loss expectation, expressed as a ratio to the amortized cost basis, is then applied to the portion of unfunded commitments not considered unilaterally cancelable, and considered by the company’s management as likely to fund over the life of the instrument. At June 30, 2023, the Company had $741 million in unfunded commitments and set aside $1.98 million in anticipated credit losses. This reserve is recorded in other liabilities as opposed to the ACL.

The determination of the ACL is complex and the Company makes decisions on the effects of factors that are inherently uncertain. Evaluations of the loan portfolio and individual credits require certain estimates, assumptions and judgments as to the facts and circumstances related to particular situations or credits. For the three months ended June 30, 2023, the allowance for credit losses decreased from March 31, 2023 due to the improvement in the Company's maximum loss rates that anchor the qualitative factor adjustments and a reclassification of construction loan balances that were placed into their permanent loan pool. These factors were partially offset by adjustments to the Portfolio Composition and Growth qualitative factor for the Company's residential and consumer loan portfolios to account for a more defined qualitative methodology.

Purchased Loans

As a result of the Emlenton Merger, the Company acquired $740.7 million in loans.

	2023
Par value of acquired loans at acquisition	$	797,616
Net purchase discount		(55,958	)
Allowance for credit losses of PCD loans		(999	)
Purchase price of loans at acquisition	$	740,659

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 2023, the Company acquired PCD loans with a fair value of $25.9 million, credit discount of $999 thousand and a noncredit discount of $5.5 million. The outstanding balance at June 30, 2023 and related allowance on PCD loans is as follows:

	Loan Balance		ACL Balance
Commercial real estate
Owner Occupied	$	1,739	$	33
Non-owner Occupied		35,694		1,222
Farmland		13		0
Commercial
Commercial and industrial		2,655		160
Agricultural		149		10
Residential real estate
1-4 family residential		3,512		21
Home equity lines of credit		3		0
Total	$	43,765	$	1,446

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Revenue from Contracts with Customers

6 Months Ended

Jun. 30, 2023

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 six months ended June 30, 2023 and 2022.

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Three Months Ended June 30, 2023
Service charges on deposit accounts	$	0	$	1,501	$	1,501
Debit card and EFT fees		0		1,810		1,810
Trust fees		2,248		0		2,248
Insurance agency commissions		0		1,332		1,332
Retirement plan consulting fees		382		0		382
Investment commissions		0		476		476
Other (outside the scope of ASC 606)		0		1,700		1,700
Total noninterest income	$	2,630	$	6,819	$	9,449

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Three Months Ended June 30, 2022
Service charges on deposit accounts	$	0	$	1,139	$	1,139
Debit card and EFT fees		0		1,528		1,528
Trust fees		2,376		0		2,376
Insurance agency commissions		0		1,086		1,086
Retirement plan consulting fees		323		0		323
Investment commissions		0		557		557
Other (outside the scope of ASC 606)		0		2,468		2,468
Total noninterest income	$	2,699	$	6,778	$	9,477

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Six Months Ended June 30, 2023
Service charges on deposit accounts	$	0	$	2,933	$	2,933
Debit card and EFT fees		0		3,599		3,599
Trust fees		4,835		0		4,835
Insurance agency commissions		0		2,788		2,788
Retirement plan consulting fees		689		0		689
Investment commissions		0		869		869
Other (outside the scope of ASC 606)		0		4,161		4,161
Total noninterest income	$	5,524	$	14,350	$	19,874

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Six Months Ended June 30, 2022
Service charges on deposit accounts	$	0	$	2,284	$	2,284
Debit card and EFT fees		0		2,944		2,944
Trust fees		4,895		0		4,895
Insurance agency commissions		0		2,133		2,133
Retirement plan consulting fees		720		0		720
Investment commissions		0		1,251		1,251
Other (outside the scope of ASC 606)		8,375		4,573		12,948
Total noninterest income	$	13,990	$	13,185	$	27,175

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 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 estimating potential refunds due to the likely cancellation of a percentage of customers canceling 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 0.5% 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 0.7% 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 six month period ended June 30, 2022. Any amounts within the scope of ASC 606 are deemed immaterial.

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Fair Value

6 Months Ended

Jun. 30, 2023

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 uses a leading evaluation pricing service for U.S. domestic fixed income securities and values securities using exit pricing requirements. The Company independently corroborates the fair value received through this pricing service by obtaining the pricing through a second source. 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, 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.

Mortgage Banking Derivatives: The fair value of mortgage banking derivatives are calculated using derivative valuation models that utilize quoted prices for similar assets adjusted for the specific attributes of the commitments and other observable market data at the valuation date. (Level 2).

Interest Rate Swaps: The fair value of interest rate swap derivative instruments are based on valuation models using observable market data as of the measurement date. The loan agreement containing a two-way yield maintenance provision if invoked is expected to exactly offset the fair value of unwinding the swap. The yield maintenance provision represents an embedded derivative which is bifurcated from the host loan contract and, as such, the swaps and embedded derivatives are not designated as hedges (Level 2).

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.

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. Loans carried at fair value generally receive specific allocations of the allowance for credit losses in the current period, 2023 and 2022. For collateral dependent loans, fair value is commonly based on recent real estate appraisals or in quoted sales prices in certain instances. 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. Adjustments to quoted price are routinely made to factor in data that affect the marketability of the collateral. Such adjustments, in both instances, 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 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 June 30, 2023 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	$	135,165	$	0	$	135,165	$	0
State and political subdivisions		543,062		0		543,062		0
Corporate bonds		17,632		0		16,409		1,223
Mortgage-backed securities-residential		541,124		0		541,123		1
Collateralized mortgage obligations		76,796		0		76,796		0
Small Business Administration		3,099		0		3,099		0
Equity securities
Equity securities at fair value		218		218		0		0
Other investments measured at net asset value		15,034	n/a		n/a		n/a
Total investment securities	$	1,332,130	$	218	$	1,315,654	$	1,224
Loans held for sale	$	2,197	$	0	$	1,703	$	0
Interest rate swaps		5,494	$	0		5,494		0
Mortgage banking derivative		14		0		14		0
Financial Liabilities
Interest rate swaps	$	5,494	$	0	$	5,494	$	0

			Fair Value Measurements at December 31, 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	$	128,096	$	0	$	128,096	$	0
State and political subdivisions		530,080		0		530,080		0
Corporate bonds		3,879		0		3,879		0
Mortgage-backed securities-residential		555,142		0		555,141		1
Collateralized mortgage obligations		47,354		0		47,354		0
Small Business Administration		3,474		0		3,474		0
Equity securities
Equity securities at fair value		196		196		0		0
Other investments measured at net asset value		15,048	n/a		n/a		n/a
Total investment securities	$	1,283,269	$	196	$	1,268,024	$	1
Loans held for sale	$	858	$	0	$	858	$	0
Interest rate swaps		5,503		0		5,503		0
Mortgage banking derivative -asset		31		0		31		0
Financial Liabilities
Interest rate swaps	$	5,503	$	0	$	5,503	$	0

There were no significant transfers between Level 1 and Level 2 during the periods presented above.

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

	Three Months ended June 30,					Six Months ended June 30,
(In Thousands of Dollars)	2023			2022		2023			2022
Beginning Balance	$	1,616		$	2	$	1		$	3
Transfers between levels		0			0		0			0
Acquired and/or purchased		0			0		1,615			0
Repayments, calls and maturities		(392	)		0		(392	)		(1	)
Ending Balance	$	1,224		$	2	$	1,224		$	2

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

			Fair Value Measurements at June 30, 2023 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	$	2,920	$	0	$	0	$	2,920
Commercial
Commercial and industrial	$	395	$	0	$	0	$	395

			Fair Value Measurements at December 31, 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	$	746		0		0	$	746
Commercial		395		0		0		395
1–4 family residential		74		0		0		74

Collateral dependent loans were individually evaluated under ASC 326 for the periods ending June 30, 2023 and December 31, 2022. Collateral dependent loans had a principal balance of $4.2 million with a valuation allowance of $878 thousand at June 30, 2023. Collateral dependent loans had a principal balance of $1.6 million with a valuation allowance of $372 thousand at December 31, 2022.

For the period ending June 30, 2023, the fair value of the collateral dependent commercial real estate relationships are valued by independent external appraisals. These external appraisals are prepared using the sales comparison approach and income approach valuation techniques. The commercial relationships are valued by the quoted price of the collateral. Management makes subsequent unobservable adjustments on both the appraisals for the commercial real estate and the quoted price for the commercial collateral dependent loans. For the year ending December 31, 2022, the fair value of the collateral dependent commercial real estate and commercial relationships are valued by the quoted price of the collateral. Management makes subsequent unobservable adjustments on the quoted price of collateral dependent loans. 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 June 30, 2023 and December 31, 2022:

June 30, 2023	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually evaluated loans
Commercial real estate	$	2,920	Sales Comparison	Adjustment for differences between comparable sales	(66.12%) - 40.28% 15.88%
Commercial		395	Quoted price for collateral	Offer Price	50.55%

December 31, 2022	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually evaluated loans
Commercial real estate	$	746	Quoted price for collateral	Offer Price	7.45%
Commercial		395	Quoted price for collateral	Offer Price	43.00%
Residential		74	Sales comparison	Adjustment for differences between comparable sales	(13.77%) - (5.68%) (13.77%)

The carrying amounts and estimated fair values of financial instruments not previously disclosed at June 30, 2023 and December 31, 2022 are as follows:

			Fair Value Measurements at June 30, 2023 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	116,063	$	29,800	$	86,263	$	0	$	116,063
Regulatory stock		29,723	n/a		n/a		n/a		n/a
Loans, net		3,120,243		0		0		2,985,702		2,985,702
Financial liabilities
Deposits		4,270,748		3,589,251		679,516		0		4,268,767
Short-term borrowings		300,000		0		300,000		0		300,000
Long-term borrowings		88,437		0		68,480		0		68,480

			Fair Value Measurements at December 31, 2022 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	75,551	$	21,395	$	54,156	$	0	$	75,551
Regulatory stock		18,200	n/a		n/a		n/a		n/a
Loans, net		2,377,772		0		0		2,330,164		2,330,164
Financial liabilities
Deposits		3,561,768		2,999,188		561,292		0		3,560,480
Short-term borrowings		95,000		0		95,000		0		95,000
Long-term borrowings		88,211		0		73,566		0		73,566

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Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets:

Goodwill associated with the Company’s purchases of Emlenton in January 2023, Champion Insurance in July 2022 and other past acquisitions totaled $167.9 million at June 30, 2023 and $94.6 million at December 31, 2022. 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 market approach method. Results of the assessment as of September 30, 2022, indicated no goodwill impairment. The Company will continue to monitor its goodwill for possible impairment.

Acquired Intangible Assets

Acquired intangible assets were as follows:

	June 30, 2023					December 31, 2022
(In Thousands of Dollars)	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer relationship intangibles	$	7,210	$	(6,873	)	$	7,210	$	(6,793	)
Non-compete contracts		457		(407	)		457		(401	)
Trade name		1,126		(425	)		1,126		(409	)
Core deposit intangible		32,115		(9,059	)		12,866		(7,030	)
Total	$	40,908	$	(16,764	)	$	21,659	$	(14,633	)

Aggregate amortization expense was $1.2 million and $2.1 million for the three and six month periods ended June 30, 2023. Amortization expense was $419 thousand and $839 thousand for the three and six month periods ended June 30, 2022.

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

2023 (6 months)	$	1,450
2024		2,872
2025		2,806
2026		2,710
2027		2,596
Thereafter		11,710
Total	$	24,144

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Leases

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Leases

Leases:

The Company has leases for branch office locations, vehicles and certain office equipment such as printers, copiers and faxes. These leases are categorized as either operating or financing. A majority of the leases are categorized as financing leases while a non material portion are categorized as operating. The leases have remaining lease terms of up to 18.1 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 December of 2023.

The right of use asset and lease liability were $9.1 million and $9.5 million as of June 30, 2023, respectively, and $8.4 million and $8.8 million at December 31, 2022, respectively. The right of use asset is included in premises and equipment, net and the lease liability is included in other liabilities on the balance sheet.

Lease payments made for the three and six month periods ended June 30, 2023, were $541 thousand and $922 thousand, while lease payments made for the three and six month periods ended June 30, 2022 were $217 thousand and $454 thousand, respectively. Interest expense and amortization expense on finance leases for the three month period ended June 30, 2023, was $69 thousand and $270 thousand, and $139 thousand and $540 thousand for the six month period ended June 30, 2023 respectively. Interest expense and amortization expense on finance leases for the three month period ended June 30, 2022, was $37 thousand and $166 thousand, and $76 thousand and $332 thousand for the six month period ended June 30, 2022, respectively. The weighted average remaining lease term for all financing leases was 11.9 years and 7.8 years for all operating leases as of June 30, 2023. The weighted-average discount rate for financing leases was 3.11% and 2.41% for operating leases as of June 30, 2023.

On January 1, 2023, the Company performed a valuation of Emlenton's leases to determine an initial right of use asset (ROU asset) and lease liability in connection with the Merger. The Company recorded an initial ROU asset and lease liability of $1.3 million for these leases.

Maturities of lease liabilities are as follows as of June 30, 2023:

2023 (6 months)	$	686
2024		1,176
2025		1,092
2026		975
2027		898
Thereafter		6,575
Total Payments		11,402
Less: Imputed Interest		(1,879	)
Total	$	9,523

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2023

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 $68.5 million and fair value of $5.5 million in other assets and $5.5 million in other liabilities at June 30, 2023. At December 31, 2022, the Company had interest rate swaps associated with commercial loans with and a notional value of $71.9 million and fair value of $5.5 million in other assets and $5.5 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 six month period ended June 30, 2023 and 2022, respectively.

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. The Company had $5.9 million of interest rate lock commitments at June 30, 2023 and $4.9 million of interest rate lock commitments at December 31, 2022. Effective May 2022, the Company began the practice of entering into commitments to sell mortgage backed securities 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. There were $7.0 million of forward sales of mortgage backed securities at June 30, 2023 and $4.3 million of forward sales of mortgage backed securities at December 31, 2022. There were $139 thousand of forward commitments for the future delivery of residential mortgages at June 30, 2023 and no forward commitments for the future delivery of residential mortgage loans at December 31, 2022.

The net gains and losses on derivative instruments not designated as hedging instruments are included in mortgage banking income. For the quarters ended June 30, 2023 and June 30, 2022, losses of $52 thousand and gains of $34 thousand, respectively, were included in mortgage banking income for the interest rate lock commitments. For the six month periods ended June 30, 2023 and June 30, 2022, gains of $57 thousand and losses of $252 thousand, respectively, were included in mortgage banking income for the interest rate lock commitments. Gains of $71 thousand and losses of $16 thousand were included in mortgage banking income for the three and six month periods ended June 30, 2023 for the forward sales of mortgage backed securities. Losses of $5 thousand were included in mortgage banking income for both the three and six month periods ended June 30, 2022 for the forward sales of mortgage backed securities.

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Earnings Per Share

6 Months Ended

Jun. 30, 2023

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 June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Basic EPS
Net income (In thousands of dollars)	$	14,966	$	15,951	$	22,041	$	31,795
Weighted average shares outstanding		37,233,732		33,850,449		37,527,050		33,835,550
Basic earnings per share	$	0.40	$	0.47	$	0.59	$	0.94
Diluted EPS
Net income (In thousands of dollars)	$	14,966	$	15,951	$	22,041	$	31,795
Weighted average shares outstanding for basic earnings per share		37,233,732		33,850,449		37,527,050		33,835,550
Dilutive effect of restricted stock awards		86,721		72,395		96,822		91,796
Weighted average shares for diluted earnings per share		37,320,453		33,922,844		37,623,872		33,927,346
Diluted earnings per share	$	0.40	$	0.47	$	0.59	$	0.94

There were 174,309 and 170,809 restricted stock awards that were considered anti-dilutive for the three and six month periods ended June 30, 2023, respectively. There were 188,626 and 158,492 restricted stock awards that were considered anti-dilutive for the three and six month periods ended June 30, 2022, respectively.

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Stock Based Compensation

6 Months Ended

Jun. 30, 2023

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 replaced the 2017 Plan. There were 54,095 service time based share awards and 102,750 performance based share awards granted under the 2022 Plan during the six month period ended June 30, 2023, 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, 2025. As of June 30, 2023, 786,655 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 $649 thousand and $1.3 million for the three and six month periods ended June 30, 2023, respectively. During the prior periods, the expense recognized was $438 thousand and $803 thousand for the three and six month periods ended June 30, 2022, respectively. As of June 30, 2023, there was $4.0 million of total unrecognized compensation expense related to the nonvested shares granted under the Plan. The remaining cost is expected to be recognized over 2.7 years.

The following is the activity under the Plans during the six month period ended June 30, 2023.

	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		193,015		$	16.69		137,369		$	15.85
Granted		54,095			13.12		102,750			14.16
Vested		(27,740	)		12.96		(30,635	)		14.35
Forfeited		(1,541	)		17.64		0			0.00
Ending balance - non-vested shares		217,829		$	15.84		209,484		$	15.01

The following is the activity under the Plans during the six month period ended June 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		101,768			17.05		56,724			17.25
Vested		(20,771	)		16.81		(65,481	)		17.48
Forfeited		0			0.00		(12,862	)		14.74
Ending balance - non-vested shares		180,561		$	16.92		137,369		$	15.85

The 58,375 shares that vested during the six month period ended June 30, 2023 had a weighted average fair value of $13.69 per share.

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Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2023

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

Other Comprehensive Income (Loss)

The following tables represent the details of other comprehensive loss for the three and six month periods ended June 30, 2023 and 2022.

Other Comprehensive Income (Loss):

	Three Months Ended June 30, 2023
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding gains on available-for-sale securities during the period	$	(21,309	)	$	4,475		$	(16,834	)
Reclassification adjustment for gains included in net income (1)		0			0			0
Net other comprehensive (loss)	$	(21,309	)	$	4,475		$	(16,834	)
	Three Months Ended June 30, 2022
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during the period	$	(105,497	)	$	22,154		$	(83,343	)
Reclassification adjustment for gains included in net income (1)		31			(6	)		25
Net unrealized gains on available-for-sale securities	$	(105,466	)	$	22,148		$	(83,318	)
Change in funded status of post-retirement health plan		(2	)		0			(2	)
Net other comprehensive (loss)	$	(105,468	)	$	22,148		$	(83,320	)
	Six Months Ended June 30, 2023
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding gains on available-for-sale securities during the period	$	21,591		$	(4,534	)	$	17,057
Reclassification adjustment for losses included in net income (1)		(120	)		25			(95	)
Net other comprehensive income	$	21,471		$	(4,509	)	$	16,962
	Six Months Ended June 30, 2022
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during the period	$	(217,894	)	$	45,758		$	(172,136	)
Reclassification adjustment for losses included in net income (1)		31			(7	)		24
Net unrealized gains on available-for-sale securities	$	(217,863	)	$	45,751		$	(172,112	)
Change in funded status of post-retirement health plan		(3	)		0			(3	)
Net other comprehensive (loss)	$	(217,866	)	$	45,751		$	(172,115	)

(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

6 Months Ended

Jun. 30, 2023

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 June 30, 2023, 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 June 30, 2023 and December 31, 2022, 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 June 30, 2023 and December 31, 2022:

	Actual					Requirement For Capital Adequacy Purposes:					To be Well Capitalized Under Prompt Corrective Action Provisions:
	Amount		Ratio			Amount		Ratio			Amount		Ratio
June 30, 2023
Common equity tier 1 capital ratio
Consolidated	$	374,278		10.25	%	$	164,288		4.5	%	N/A		N/A
Bank		391,584		10.75	%		163,977		4.5	%		236,855		6.5	%
Total risk based capital ratio
Consolidated		502,235		13.76	%		292,068		8.0	%	N/A		N/A
Bank		426,541		11.71	%		291,514		8.0	%		364,393		10.0	%
Tier 1 risk based capital ratio
Consolidated		392,278		10.74	%		219,051		6.0	%	N/A		N/A
Bank		391,584		10.75	%		218,636		6.0	%		291,514		8.0	%
Tier 1 leverage ratio
Consolidated		392,278		7.68	%		204,281		4.0	%	N/A		N/A
Bank		391,584		7.70	%		203,408		4.0	%		254,261		5.0	%
December 31, 2022
Common equity tier 1 capital ratio
Consolidated	$	403,307		13.71	%	$	132,349		4.5	%	N/A		N/A
Bank		372,679		12.71	%		131,968		4.5	%	$	190,620		6.5	%
Total risk based capital ratio
Consolidated		523,285		17.79	%		235,288		8.0	%	N/A		N/A
Bank		399,657		13.62	%		234,609		8.0	%		293,262		10.0	%
Tier 1 risk based capital ratio
Consolidated		421,307		14.32	%		176,466		6.0	%	N/A		N/A
Bank		372,679		12.71	%		175,957		6.0	%		234,609		8.0	%
Tier 1 leverage ratio
Consolidated		421,307		9.84	%		171,233		4.0	%	N/A		N/A
Bank		372,679		8.76	%		170,245		4.0	%		212,807		5.0	%

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Segment Information

6 Months Ended

Jun. 30, 2023

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
June 30, 2023
Goodwill and other intangibles	$	5,709	$	190,605	$	(4,263	)	$	192,051
Total assets	$	17,610	$	5,050,547	$	5,297		$	5,073,454

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
December 31, 2022
Goodwill and other intangibles	$	5,739	$	100,190	$	(4,263	)	$	101,666
Total assets	$	14,383	$	4,064,112	$	3,705		$	4,082,200

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
For Three Months Ended June 30, 2023
Net interest income	$	57	$	35,476	$	(955	)	$	34,578
Provision for credit losses and unfunded loans		0		25		0			25
Service fees, security gains and other noninterest income		2,668		7,167		(386	)		9,449
Noninterest expense		1,654		22,056		475			24,185
Amortization and depreciation expense		23		2,066		112			2,201
Income before taxes		1,048		18,496		(1,928	)		17,616
Income taxes		221		2,859		(430	)		2,650
Net income	$	827	$	15,637	$	(1,498	)	$	14,966

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
For Six Months Ended June 30, 2023
Net interest income	$	114	$	72,984	$	(1,910	)	$	71,188
Provision for credit losses and unfunded loans		0		8,624		0			8,624
Service fees, security gains and other noninterest income		5,568		14,923		(617	)		19,874
Noninterest expense		3,297		48,591		1,120			53,008
Amortization and depreciation expense		46		3,828		226			4,100
Income before taxes		2,339		26,864		(3,873	)		25,330
Income taxes		492		3,706		(909	)		3,289
Net income	$	1,847	$	23,158	$	(2,964	)	$	22,041

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
For Three Months Ended June 30, 2022
Net interest income	$	38	$	32,486	$	(813	)	$	31,711
Provision for credit losses and unfunded loans		0		616		0			616
Service fees, security gains and other noninterest income		4,839		4,606		32			9,477
Noninterest expense		3,614		16,174		494			20,282
Amortization and depreciation expense		28		1,038		113			1,179
Income before taxes		1,235		19,264		(1,388	)		19,111
Income taxes		258		3,266		(364	)		3,160
Net income	$	977	$	15,998	$	(1,024	)	$	15,951

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
For Six Months Ended June 30, 2022
Net interest income	$	72	$	64,479	$	(1,598	)	$	62,953
Provision for credit losses and unfunded loans		0		258		0			258
Service fees, security gains and other noninterest income		14,037		13,347		(209	)		27,175
Noninterest expense		5,383		43,616		577			49,576
Amortization and depreciation expense		56		2,058		227			2,341
Income before taxes		8,670		31,894		(2,611	)		37,953
Income taxes		1,820		5,000		(662	)		6,158
Net income	$	6,850	$	26,894	$	(1,949	)	$	31,795

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

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Short-term Borrowings

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Short-term Borrowings

Short-term borrowings:

The Bank had short-term advances from the Federal Home Loan Bank ("FHLB") at June 30, 2023 of $300.0 million. The interest rate on these borrowings was 5.17% at June 30, 2023. The Bank had $95.0 million of short-term advances from the FHLB at December 31, 2022, and the interest rate on these borrowings was 4.38%.

The Bank has access to lines of credit amounting to $35.0 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 June 30, 2023 or at December 31, 2022.

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 June 30, 2023 or at December 31, 2022.

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Long-Term Borrowings

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Long-term Borrowings

Long-term borrowings:

There were no long-term advances from the FHLB at June 30, 2023 or at December 31, 2022.

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 $1.7 billion at June 30, 2023 and $1.2 billion at December 31, 2022, respectively. Based on this collateral, the Bank is eligible to borrow an additional $707.8 million at June 30, 2023.

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 ("SOFR"), 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 (transitioning to the three-month term SOFR beginning September 15, 2023) . The rate at June 30, 2023 was 7.00% and at December 31, 2022 was 6.22%.

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 (transitioning to the three-month term SOFR beginning September 15, 2023). The rate at June 30, 2023 was 7.35% and at December 31, 2022 was 6.57%.

In 2015, the Company completed its acquisition of National Bancshares Corporation, 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, TSEO Statutory Trust I. 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 (transitioning to the three-month term SOFR beginning September 15, 2023). The rate at June 30, 2023 was 7.25% and at December 31, 2022 was 6.47%.

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.

	June 30, 2023		December 31, 2022
	Amount		Amount
TSEO Statutory Trust I	$	2,497	$	2,472
Maple Leaf Financial Statutory Trust II		7,629		7,517
Cortland Statutory Trust I		4,354		4,327
Total junior subordinated debentures owed to unconsolidated subsidiary trusts	$	14,480	$	14,316
Subordinated Debentures	$	73,957	$	73,895
Total long-term borrowings	$	88,437	$	88,211

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2023

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 consolidated condensed 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 2022 Annual Report to Shareholders included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 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 June 30, 2023. Outstanding shares at June 30, 2023 were 37,457,253.

Comprehensive Income

Comprehensive Income:

Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) 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. The Company adopted ASU 2022-02 on January 1, 2023. The adoption of this standard did not have a material effect on the Company’s operating results or financial condition.

On October 28, 2021, FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU requires contract assets and contract liabilities to be accounted for as if they (the acquirer) entered into the original contract at the same time and same date as the acquiree. This is a shift from existing guidance, which required the acquirer to recognize contract assets and contract liabilities at their fair value as of the acquisition date. The amendments in this Update were effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption of this standard did not have a material effect on the Company’s operating results or financial condition. Management determined that Emclaire had an immaterial amount of contracts with customers.

On March 12, 2020, the FASB issued ASU 2020-04 and amended by ASU 2021-01, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, to ease the burden of accounting for contract modifications related to reference rate reform. The amendments in ASU 2020-04 create a new Topic in the Codification, ASC 848, Reference Rate Reform, which contains guidance that is designed to simplify how entities account for contracts that are modified to replace LIBOR or other benchmark interest rates with new rates. The amendments in ASU 2020-04 give entities the option to apply expedients and exceptions to contract modifications that are made until December 31, 2022, if certain criteria are met. If adopted, these amendments and exceptions should be applied to all eligible modifications to contracts that are accounted for under an ASC Topic or industry Subtopic. The guidance in ASC 848 does not apply to any contract modifications that was made after December 31, 2022. In December 2022, the FASB issued ASU 2022-06 that defers the sunset date from December 31, 2022 to December 31, 2024. 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)

6 Months Ended

Jun. 30, 2023

Pro Forma Information

The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transaction been effective on the assumed date.

(In thousands of dollars except per share results)	For Three Months  Ended June 30, 2022		For Six Months  Ended June 30, 2022
Net interest income	$	43,126	$	85,127
Provision for credit losses		991		8,246
Noninterest income		10,427		29,133
Noninterest expense		28,253		69,426
Income before income taxes		24,309		36,588
Income tax expense		4,237		5,796
Net income	$	20,072	$	30,792
Basic earnings per share	$	0.53	$	0.81
Diluted earnings per share	$	0.53	$	0.81

Emclaire Financial Corp

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

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

(In Thousands of Dollars)
Consideration
Cash	$	33,440
Stock		59,202
Fair value of total consideration transferred	$	92,642
Fair value of assets acquired
Cash and cash equivalents	$	20,265
Securities available for sale		126,970
Other investments		7,795
Loans, net		740,659
Premises and equipment		16,103
Bank owned life insurance		22,485
Core deposit intangible		19,249
Current and deferred taxes		17,246
Other assets		6,387
Total assets acquired		977,159
Fair value of liabilities assumed
Deposits		875,813
Short-term borrowings		75,000
Accrued interest payable and other liabilities		7,104
Total liabilities		957,917
Net assets acquired	$	19,242
Goodwill created		73,400
Total net assets acquired	$	92,642

The fair value of net assets acquired includes fair value adjustments to certain receivables that were considered performing as of the acquisition date. The fair value adjustments were determined using the income method, discounted cash flow approach. However, the Company believes that all contractual cash flows related to these financial instruments will be collected. As such, these receivables were not considered purchase credit deteriorated ("PCD") at the acquisition date and were not subject to the guidance relating to PCD loans. Receivables acquired that were not subject to these requirements had a fair value and gross contractual amounts receivable of $714.4 million and $764.8 million on the date of acquisition.

The fair value of purchased financial assets that were classified as PCD loans are discussed in the loan footnote.

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Securities (Tables)

6 Months Ended

Jun. 30, 2023

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 June 30, 2023 and December 31, 2022 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
June 30, 2023
U.S. Treasury and U.S. government sponsored entities	$	155,169	$	99	$	(20,103	)	$	135,165
State and political subdivisions		648,030		951		(105,919	)		543,062
Corporate bonds		18,329		25		(722	)		17,632
Mortgage-backed securities		653,898		9		(112,783	)		541,124
Collateralized mortgage obligations		82,965		117		(6,286	)		76,796
Small Business Administration		3,459		0		(360	)		3,099
Totals	$	1,561,850	$	1,201	$	(246,173	)	$	1,316,878

			Gross		Gross
	Amortized		Unrealized		Unrealized
(In Thousands of Dollars)	Cost		Gains		Losses			Fair Value
December 31, 2022
U.S. Treasury and U.S. government sponsored    entities	$	149,712	$	0	$	(21,616	)	$	128,096
State and political subdivisions		651,705		266		(121,891	)		530,080
Corporate bonds		4,181		0		(302	)		3,879
Mortgage-backed securities - residential		672,784		12		(117,654	)		555,142
Collateralized mortgage obligations		52,291		0		(4,937	)		47,354
Small Business Administration		3,839		0		(365	)		3,474
Totals	$	1,534,512	$	278	$	(266,765	)	$	1,268,025

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.

	June 30, 2023
(In Thousands of Dollars)	Amortized Cost		Fair Value
Maturity
Within one year	$	716	$	706
One to five years		39,851		37,153
Five to ten years		180,584		159,597
Beyond ten years		600,377		498,403
Mortgage-backed, collateralized mortgage obligations and Small Business Administration securities		740,322		621,019
Total	$	1,561,850	$	1,316,878

Available for Sale Investment Securities with Unrealized Losses

The following table summarizes the available for sale investment securities with unrealized losses at June 30, 2023 and December 31, 2022, 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
June 30, 2023
U.S. Treasury and U.S. government sponsored entities	$	14,652	$	(692	)	$	115,535	$	(19,411	)	$	130,187	$	(20,103	)
State and political subdivisions		73,802		(2,835	)		432,373		(103,084	)		506,175		(105,919	)
Corporate bonds		11,011		(411	)		3,561		(311	)		14,572		(722	)
Mortgage-backed securities		4,678		(44	)		535,644		(112,739	)		540,322		(112,783	)
Collateralized mortgage obligations		28,977		(930	)		40,852		(5,356	)		69,829		(6,286	)
Small Business Administration		0		0			3,099		(360	)		3,099		(360	)
Total temporarily impaired	$	133,120	$	(4,912	)	$	1,131,064	$	(241,261	)	$	1,264,184	$	(246,173	)

	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, 2022
U.S. Treasury and U.S. government sponsored entities	$	52,311	$	(5,835	)	$	75,685	$	(15,781	)	$	127,996	$	(21,616	)
State and political subdivisions		306,709		(56,650	)		191,584		(65,241	)		498,293		(121,891	)
Corporate bonds		2,893		(122	)		986		(180	)		3,879		(302	)
Mortgage-backed securities - residential		101,476		(13,545	)		453,233		(104,109	)		554,709		(117,654	)
Collateralized mortgage obligations		42,140		(4,137	)		5,214		(800	)		47,354		(4,937	)
Small Business Administration		1,295		(122	)		2,179		(243	)		3,474		(365	)
Total temporarily impaired	$	506,824	$	(80,411	)	$	728,881	$	(186,354	)	$	1,235,705	$	(266,765	)

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Loans (Tables)

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

Schedule of Loan Balances

Loan balances were as follows:

(In Thousands of Dollars)	June 30, 2023			December 31, 2022
Commercial real estate
Owner occupied	$	357,329		$	330,768
Non-owner occupied		697,486			563,652
Farmland		192,182			188,850
Other		230,160			133,630
Commercial
Commercial and industrial		362,664			293,643
Agricultural		58,625			58,087
Residential real estate
1-4 family residential		849,533			475,791
Home equity lines of credit		138,535			132,179
Consumer
Indirect		226,187			197,125
Direct		25,980			16,421
Other		8,159			7,714
Total loans	$	3,146,840		$	2,397,860
Net deferred loan costs		8,360			6,890
Allowance for credit losses		(34,957	)		(26,978	)
Net loans	$	3,120,243		$	2,377,772

Activity in the Allowance for Loan Losses by Portfolio Segment

The following tables present the activity in the allowance for credit losses by portfolio segment for the three and six month periods ended June 30, 2023 and 2022:

Three Months Ended June 30, 2023

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	19,819		$	5,230		$	6,732		$	4,230		$	36,011
PCD ACL on loans acquired		0			0			0			0			0
(Credit) Provision for credit losses		(1,125	)		639			131			100			(255	)
Loans charged off		(157	)		(591	)		(11	)		(212	)		(971	)
Recoveries		0			17			14			141			172
Total ending allowance balance	$	18,537		$	5,295		$	6,866		$	4,259		$	34,957

Six Months Ended June 30, 2023

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	14,840		$	4,186		$	4,374		$	3,578		$	26,978
PCD ACL on loans acquired		850			138			11			0			999
Provision for credit losses		3,003			1,683			2,529			835			8,050
Loans charged off		(157	)		(734	)		(94	)		(455	)		(1,440	)
Recoveries		1			22			46			301			370
Total ending allowance balance	$	18,537		$	5,295		$	6,866		$	4,259		$	34,957

Three Months Ended June 30, 2022

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate		Consumer			Total
Allowance for credit losses
Beginning balance	$	15,207		$	3,867		$	4,702	$	3,239		$	27,015
(Credit) Provision for credit losses		(349	)		70			197		564			482
Loans charged off		0			(46	)		0		(132	)		(178	)
Recoveries		1			2			16		116			135
Total ending allowance balance	$	14,859		$	3,893		$	4,915	$	3,787		$	27,454

Six Months Ended June 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		(1,021	)		341			51			181			(448	)
Loans charged off		0			(1,405	)		(34	)		(329	)		(1,768	)
Recoveries		1			8			28			247			284
Total ending allowance balance	$	14,859		$	3,893		$	4,915		$	3,787		$	27,454

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

The following tables present the amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing as of June 30, 2023:

(In Thousands of Dollars)	Nonaccrual with no allowance for credit loss		Nonaccrual with an allowance for credit loss		Loans past due over 89 days still accruing
June 30, 2023
Commercial real estate
Owner occupied	$	679	$	486	$	0
Non-owner occupied		1,891		6,285		0
Farmland		2,059		113		0
Other		0		19		0
Commercial
Commercial and industrial		117		1,780		0
Agricultural		224		198		0
Residential real estate
1-4 family residential		269		2,096		594
Home equity lines of credit		274		242		112
Consumer
Indirect		10		296		57
Direct		65		86		1
Other		0		3		0
Total loans	$	5,588	$	11,604	$	764

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 December 31, 2022:

	December 31, 2022
(In Thousands of Dollars)	Nonaccrual		Loans Past Due 90 Days or More Still Accruing
Commercial real estate
Owner occupied	$	993	$	0
Non-owner occupied		3,031		0
Farmland		2,183		0
Other		33		0
Commercial
Commercial and industrial		3,840		50
Agricultural		299		0
Residential real estate
1-4 family residential		2,703		310
Home equity lines of credit		735		58
Consumer
Indirect		313		62
Direct		179		12
Other		2		0
Total loans	$	14,311	$	492

Schedule of Investment in Past Due Loans

The following tables present the amortized cost basis of collateral-dependent loans by class of loans as of June 30, 2023:

(In Thousands of Dollars)	Real Estate		Business Assets		Vehicles		Cash
June 30, 2023
Commercial real estate
Owner occupied	$	801	$	0	$	0	$	0
Non-owner occupied		5,080		0		0		0
Farmland		2,059		0		0		0
Other		0		0		0		0
Commercial
Commercial and industrial		0		1,170		0		0
Agricultural		0		224		0		0
Residential real estate
1-4 family residential		1,576		0		0		0
Home equity lines of credit		331		0		0		0
Consumer
Indirect		0		0		48		0
Direct		0		0		24		66
Other		0		0		0		0
Total loans	$	9,847	$	1,394	$	72	$	66

The following tables present the aging of the recorded investment in past due loans as of June 30, 2023 and December 31, 2022 by class of loans.

(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
June 30, 2023
Commercial real estate
Owner occupied	$	345	$	0	$	1,165	$	1,510	$	355,556	$	357,066
Non-owner occupied		0		0		8,176		8,176		688,768		696,944
Farmland		321		0		2,172		2,493		189,452		191,945
Other		80		0		19		99		229,719		229,818
Commercial
Commercial and industrial		378		239		1,897		2,514		361,437		363,951
Agricultural		227		166		422		815		58,511		59,326
Residential real estate
1-4 family residential		8,256		979		2,959		12,194		837,014		849,208
Home equity lines of credit		214		108		628		950		137,617		138,567
Consumer
Indirect		822		79		363		1,264		232,945		234,209
Direct		81		16		152		249		25,758		26,007
Other		6		4		3		13		8,146		8,159
Total loans	$	10,730	$	1,591	$	17,956	$	30,277	$	3,124,923	$	3,155,200

(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, 2022
Commercial real estate
Owner occupied	$	159	$	0	$	993	$	1,152	$	329,305	$	330,457
Non-owner occupied		0		0		3,031		3,031		560,013		563,044
Farmland		0		0		2,183		2,183		186,399		188,582
Other		0		0		33		33		133,288		133,321
Commercial
Commercial and industrial		1,034		185		3,890		5,109		289,297		294,406
Agricultural		104		20		299		423		58,166		58,589
Residential real estate
1-4 family residential		4,247		1,775		3,013		9,035		466,313		475,348
Home equity lines of credit		115		92		793		1,000		131,209		132,209
Consumer
Indirect		1,267		298		375		1,940		202,683		204,623
Direct		234		70		191		495		15,962		16,457
Other		0		5		2		7		7,707		7,714
Total loans	$	7,160	$	2,445	$	14,803	$	24,408	$	2,380,342	$	2,404,750

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Loan Restructurings (Tables)

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Schedule of Amortized Cost Basis for Loans Restructured

The following table shows the amortized cost basis for the loans restructured during the three and six months ended June 30, 2023 to borrowers experiencing financial difficulty, disaggregrated by class of financing receivables:

Three Months Ended June 30, 2023	Restructured Loans
(In Thousands of Dollars)	Number of Contracts		Amortized Cost Basis		% of Total class of Financing receivable
Total accruing restructured loans		0	$	0		0.00	%
Nonaccrual restructured loans
Total nonaccrual restructured loans		0	$	0		0.00	%
Total restructured loans		0	$	0		0.00	%

Six Months Ended June 30, 2023	Restructured Loans
(In Thousands of Dollars)	Number of Contracts		Amortized Cost Basis		% of Total class of Financing receivable
Commercial
Commercial and industrial		1	$	50		0.01	%
Total accruing restructured loans		1	$	50		0.01	%
Nonaccrual restructured loans
Total nonaccrual restructured loans		0	$	0		0.00	%
Total restructured loans		1	$	50		0.01	%

Schedule of Performance of Loans that Modified

The following table depicts the performance of loans that have been modified in the three and six months ended June 30, 2023:

Three Months Ended June 30, 2023	Payment status (Amortized cost Basis)
(In Thousands of Dollars)	Current		30-89 Days past due		90+ Days past due
Total accruing restructured loans	$	0	$	0	$	0
Nonaccrual restructured loans
Total nonaccrual restructured loans	$	0	$	0	$	0
Total restructured loans	$	0	$	0	$	0

Six Months Ended June 30, 2023	Payment status (Amortized cost Basis)
(In Thousands of Dollars)	Current		30-89 Days past due		90+ Days past due
Commercial
Commercial and industrial	$	50	$	0	$	0
Total accruing restructured loans	$	50	$	0	$	0
Nonaccrual restructured loans
Total nonaccrual restructured loans	$	0	$	0	$	0
Total restructured loans	$	50	$	0	$	0

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Credit Quality Indicators (Tables)

6 Months Ended

Jun. 30, 2023

Risks and Uncertainties [Abstract]

Risk Category of Loans by Class of Loans

As of June 30, 2023 and December 31, 2022, 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
June 30, 2023
Commercial real estate
Owner occupied	$	347,171	$	5,326	$	4,569	$	357,066
Non-owner occupied		646,559		22,362		28,023		696,944
Farmland		189,238		0		2,707		191,945
Other		222,049		7,550		219		229,818
Commercial
Commercial and industrial		347,795		7,142		9,014		363,951
Agricultural		58,869		0		457		59,326
Total loans	$	1,811,681	$	42,380	$	44,989	$	1,899,050

(In Thousands of Dollars)	Pass		Special Mention		Sub standard		Total
December 31, 2022
Commercial real estate
Owner occupied	$	324,979	$	1,193	$	4,285	$	330,457
Non-owner occupied		527,267		25,541		10,236		563,044
Farmland		186,057		0		2,525		188,582
Other		133,218		0		103		133,321
Commercial
Commercial and industrial		282,412		777		11,217		294,406
Agricultural		58,002		250		337		58,589
Total loans	$	1,511,935	$	27,761	$	28,703	$	1,568,399

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 June 30, 2023 and December 31, 2022. 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
June 30, 2023
Performing	$	846,249	$	137,939	$	233,846	$	25,855	$	8,156
Nonperforming		2,959		628		363		152		3
Total loans	$	849,208	$	138,567	$	234,209	$	26,007	$	8,159

	Residential Real Estate				Consumer
(In Thousands of Dollars)	1-4 Family Residential		Home Equity Lines of Credit		Indirect		Direct		Other
December 31, 2022
Performing	$	472,335	$	131,416	$	204,248	$	16,266	$	7,712
Nonperforming		3,013		793		375		191		2
Total loans	$	475,348	$	132,209	$	204,623	$	16,457	$	7,714

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
As of June 30, 2023	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total
Commercial real estate
Risk Rating
Pass	$	54,049	$	254,672	$	225,147	$	143,875	$	151,048	$	373,002	$	13,986	$	1,215,779
Special mention		0		0		4,496		12,838		8,515		9,389		0		35,238
Substandard		0		0		1,650		3,841		2,063		24,149		1,108		32,811
Total commercial real estate loans	$	54,049	$	254,672	$	231,293	$	160,554	$	161,626	$	406,540	$	15,094	$	1,283,828
Commercial real estate current period gross write-offs	$	0	$	0	$	0	$	0	$	1	$	156	$	0	$	157
Commercial and industrial
Risk Rating
Pass	$	63,363	$	97,102	$	48,716	$	29,047	$	13,470	$	29,190	$	66,907	$	347,795
Special mention		0		174		616		75		1,038		10		5,229		7,142
Substandard		228		3,408		333		783		294		1,006		2,962		9,014
Total commercial loans	$	63,591	$	100,684	$	49,665	$	29,905	$	14,802	$	30,206	$	75,098	$	363,951
Commercial and industrial current period gross write-offs	$	0	$	95	$	377	$	11	$	16	$	172	$	0	$	671
Agricultural
Risk Rating
Pass	$	18,279	$	53,234	$	32,543	$	41,069	$	21,627	$	64,050	$	17,305	$	248,107
Special mention		0		0		0		0		0		0		0		0
Substandard		0		0		369		216		61		2,390		128		3,164
Total agricultural loans	$	18,279	$	53,234	$	32,912	$	41,285	$	21,688	$	66,440	$	17,433	$	251,271
Agricultural current period gross write-offs	$	0	$	15	$	44	$	0	$	0	$	4	$	0	$	63
Residential real estate
Risk Rating
Pass	$	26,642	$	177,294	$	169,952	$	141,482	$	51,291	$	268,622	$	3,699	$	838,982
Special mention		0		0		0		68		113		159		0		340
Substandard		0		31		455		440		378		8,582		0		9,886
Total residential real estate loans	$	26,642	$	177,325	$	170,407	$	141,990	$	51,782	$	277,363	$	3,699	$	849,208
Residential real estate current period gross write-offs	$	0	$	0	$	0	$	0	$	0	$	82	$	0	$	82
Home equity lines of credit
Risk Rating
Pass	$	0	$	19	$	10	$	47	$	67	$	2,066	$	134,014	$	136,223
Special mention		0		0		0		0		0		0		38		38
Substandard		0		27		50		82		20		2,028		99		2,306
Total home equity lines of credit	$	0	$	46	$	60	$	129	$	87	$	4,094	$	134,151	$	138,567
Home equity lines of credit current period gross write-offs	$	0	$	0	$	0	$	8	$	0	$	4	$	0	$	12
Consumer
Risk Rating
Pass	$	44,887	$	87,410	$	40,831	$	27,009	$	16,462	$	43,017	$	7,843	$	267,459
Substandard		0		168		65		245		176		262		0		916
Total consumer loans	$	44,887	$	87,578	$	40,896	$	27,254	$	16,638	$	43,279	$	7,843	$	268,375
Consumer current period gross write-offs	$	0	$	113	$	46	$	76	$	30	$	157	$	33	$	455

	Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2022	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total
Commercial real estate
Risk Rating
Pass	$	188,240	$	174,841	$	120,883	$	138,342	$	89,769	$	256,103	$	17,286	$	985,464
Special mention		0		711		1,861		5,286		624		18,252		0		26,734
Substandard		0		18		256		1,968		267		10,952		1,163		14,624
Total commercial real estate loans	$	188,240	$	175,570	$	123,000	$	145,596	$	90,660	$	285,307	$	18,449	$	1,026,822
Commercial
Risk Rating
Pass	$	100,368	$	45,872	$	34,110	$	16,854	$	13,574	$	14,664	$	56,970	$	282,412
Special mention		0		197		0		0		0		0		580		777
Substandard		3,642		1,331		356		152		110		1,761		3,865		11,217
Total commercial loans	$	104,010	$	47,400	$	34,466	$	17,006	$	13,684	$	16,425	$	61,415	$	294,406
Agricultural
Risk Rating
Pass	$	51,096	$	36,376	$	44,133	$	23,661	$	24,003	$	45,490	$	19,300	$	244,059
Special mention		0		0		0		0		0		0		250		250
Substandard		0		379		235		72		0		2,146		30		2,862
Total agricultural loans	$	51,096	$	36,755	$	44,368	$	23,733	$	24,003	$	47,636	$	19,580	$	247,171
Residential real estate
Risk Rating
Pass	$	83,951	$	112,463	$	76,095	$	31,404	$	22,918	$	135,757	$	3,956	$	466,544
Special mention		0		0		70		118		76		93		0		357
Substandard		0		136		249		121		9		7,932		0		8,447
Total residential real estate loans	$	83,951	$	112,599	$	76,414	$	31,643	$	23,003	$	143,782	$	3,956	$	475,348
Home equity lines of credit
Risk Rating
Pass	$	0	$	10	$	0	$	0	$	16	$	1,394	$	128,622	$	130,042
Special mention		0		0		0		0		0		0		49		49
Substandard		0		13		137		20		0		1,848		100		2,118
Total home equity lines of credit	$	0	$	23	$	137	$	20	$	16	$	3,242	$	128,771	$	132,209
Consumer
Risk Rating
Pass	$	98,530	$	46,945	$	32,284	$	20,849	$	10,918	$	10,942	$	7,302	$	227,770
Special mention		0		0		0		0		0		0		0		0
Substandard		102		113		267		230		109		202		1		1,024
Total consumer loans	$	98,632	$	47,058	$	32,551	$	21,079	$	11,027	$	11,144	$	7,303	$	228,794

Summary of Loan Pools and Methodology Used in Calculation of Allowance for Credit Losses

The following table presents the loan pools and the associated methodology used during the calculation of the allowance for credit losses in 2023.

Portfolio Segments	Loan Pool	Methodology	Loss Drivers
Residential real estate	1-4 Family Residential Real Estate - 1st Liens	Cohort	Credit Loss History
	1-4 Family Residential Real Estate - 2nd Liens	Cohort	Credit Loss History
Home Equity Lines of Credit	Home Equity Lines of Credit	Cohort	Credit Loss History
Consumer Finance	Cash Reserves	Cohort	Credit Loss History
	Direct	Cohort	Credit Loss History
	Indirect	Cohort	Credit Loss History
Commercial	Commercial and Industrial	PD/LGD	Credit Loss History
	Agricultural	PD/LGD	Credit Loss History
	Municipal	PD/LGD	Credit Loss History
Commercial real estate	Owner Occupied	PD/LGD	Credit Loss History
	Non-Owner Occupied	PD/LGD	Credit Loss History
	Multifamily	PD/LGD	Credit Loss History
	Farmland	PD/LGD	Credit Loss History
	Construction	PD/LGD	Credit Loss History

Schedule of Par Value of Purchased Loans

	2023
Par value of acquired loans at acquisition	$	797,616
Net purchase discount		(55,958	)
Allowance for credit losses of PCD loans		(999	)
Purchase price of loans at acquisition	$	740,659

Schedule of Outstanding Balance and Related Allowance on Loans

The outstanding balance at June 30, 2023 and related allowance on PCD loans is as follows:

	Loan Balance		ACL Balance
Commercial real estate
Owner Occupied	$	1,739	$	33
Non-owner Occupied		35,694		1,222
Farmland		13		0
Commercial
Commercial and industrial		2,655		160
Agricultural		149		10
Residential real estate
1-4 family residential		3,512		21
Home equity lines of credit		3		0
Total	$	43,765	$	1,446

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Revenue from Contracts with Customers (Tables)

6 Months Ended

Jun. 30, 2023

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 six months ended June 30, 2023 and 2022.

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Three Months Ended June 30, 2023
Service charges on deposit accounts	$	0	$	1,501	$	1,501
Debit card and EFT fees		0		1,810		1,810
Trust fees		2,248		0		2,248
Insurance agency commissions		0		1,332		1,332
Retirement plan consulting fees		382		0		382
Investment commissions		0		476		476
Other (outside the scope of ASC 606)		0		1,700		1,700
Total noninterest income	$	2,630	$	6,819	$	9,449

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Three Months Ended June 30, 2022
Service charges on deposit accounts	$	0	$	1,139	$	1,139
Debit card and EFT fees		0		1,528		1,528
Trust fees		2,376		0		2,376
Insurance agency commissions		0		1,086		1,086
Retirement plan consulting fees		323		0		323
Investment commissions		0		557		557
Other (outside the scope of ASC 606)		0		2,468		2,468
Total noninterest income	$	2,699	$	6,778	$	9,477

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Six Months Ended June 30, 2023
Service charges on deposit accounts	$	0	$	2,933	$	2,933
Debit card and EFT fees		0		3,599		3,599
Trust fees		4,835		0		4,835
Insurance agency commissions		0		2,788		2,788
Retirement plan consulting fees		689		0		689
Investment commissions		0		869		869
Other (outside the scope of ASC 606)		0		4,161		4,161
Total noninterest income	$	5,524	$	14,350	$	19,874

(In Thousands of Dollars)	Trust Segment		Bank Segment		Totals
For Six Months Ended June 30, 2022
Service charges on deposit accounts	$	0	$	2,284	$	2,284
Debit card and EFT fees		0		2,944		2,944
Trust fees		4,895		0		4,895
Insurance agency commissions		0		2,133		2,133
Retirement plan consulting fees		720		0		720
Investment commissions		0		1,251		1,251
Other (outside the scope of ASC 606)		8,375		4,573		12,948
Total noninterest income	$	13,990	$	13,185	$	27,175

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Fair Value (Tables)

6 Months Ended

Jun. 30, 2023

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 June 30, 2023 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	$	135,165	$	0	$	135,165	$	0
State and political subdivisions		543,062		0		543,062		0
Corporate bonds		17,632		0		16,409		1,223
Mortgage-backed securities-residential		541,124		0		541,123		1
Collateralized mortgage obligations		76,796		0		76,796		0
Small Business Administration		3,099		0		3,099		0
Equity securities
Equity securities at fair value		218		218		0		0
Other investments measured at net asset value		15,034	n/a		n/a		n/a
Total investment securities	$	1,332,130	$	218	$	1,315,654	$	1,224
Loans held for sale	$	2,197	$	0	$	1,703	$	0
Interest rate swaps		5,494	$	0		5,494		0
Mortgage banking derivative		14		0		14		0
Financial Liabilities
Interest rate swaps	$	5,494	$	0	$	5,494	$	0

			Fair Value Measurements at December 31, 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	$	128,096	$	0	$	128,096	$	0
State and political subdivisions		530,080		0		530,080		0
Corporate bonds		3,879		0		3,879		0
Mortgage-backed securities-residential		555,142		0		555,141		1
Collateralized mortgage obligations		47,354		0		47,354		0
Small Business Administration		3,474		0		3,474		0
Equity securities
Equity securities at fair value		196		196		0		0
Other investments measured at net asset value		15,048	n/a		n/a		n/a
Total investment securities	$	1,283,269	$	196	$	1,268,024	$	1
Loans held for sale	$	858	$	0	$	858	$	0
Interest rate swaps		5,503		0		5,503		0
Mortgage banking derivative -asset		31		0		31		0
Financial Liabilities
Interest rate swaps	$	5,503	$	0	$	5,503	$	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):

	Three Months ended June 30,					Six Months ended June 30,
(In Thousands of Dollars)	2023			2022		2023			2022
Beginning Balance	$	1,616		$	2	$	1		$	3
Transfers between levels		0			0		0			0
Acquired and/or purchased		0			0		1,615			0
Repayments, calls and maturities		(392	)		0		(392	)		(1	)
Ending Balance	$	1,224		$	2	$	1,224		$	2

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 June 30, 2023 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	$	2,920	$	0	$	0	$	2,920
Commercial
Commercial and industrial	$	395	$	0	$	0	$	395

			Fair Value Measurements at December 31, 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	$	746		0		0	$	746
Commercial		395		0		0		395
1–4 family residential		74		0		0		74

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 June 30, 2023 and December 31, 2022:

June 30, 2023	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually evaluated loans
Commercial real estate	$	2,920	Sales Comparison	Adjustment for differences between comparable sales	(66.12%) - 40.28% 15.88%
Commercial		395	Quoted price for collateral	Offer Price	50.55%

December 31, 2022	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually evaluated loans
Commercial real estate	$	746	Quoted price for collateral	Offer Price	7.45%
Commercial		395	Quoted price for collateral	Offer Price	43.00%
Residential		74	Sales comparison	Adjustment for differences between comparable sales	(13.77%) - (5.68%) (13.77%)

Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments not previously disclosed at June 30, 2023 and December 31, 2022 are as follows:

			Fair Value Measurements at June 30, 2023 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	116,063	$	29,800	$	86,263	$	0	$	116,063
Regulatory stock		29,723	n/a		n/a		n/a		n/a
Loans, net		3,120,243		0		0		2,985,702		2,985,702
Financial liabilities
Deposits		4,270,748		3,589,251		679,516		0		4,268,767
Short-term borrowings		300,000		0		300,000		0		300,000
Long-term borrowings		88,437		0		68,480		0		68,480

			Fair Value Measurements at December 31, 2022 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	75,551	$	21,395	$	54,156	$	0	$	75,551
Regulatory stock		18,200	n/a		n/a		n/a		n/a
Loans, net		2,377,772		0		0		2,330,164		2,330,164
Financial liabilities
Deposits		3,561,768		2,999,188		561,292		0		3,560,480
Short-term borrowings		95,000		0		95,000		0		95,000
Long-term borrowings		88,211		0		73,566		0		73,566

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Acquired Intangible Assets

Acquired Intangible Assets

Acquired intangible assets were as follows:

	June 30, 2023					December 31, 2022
(In Thousands of Dollars)	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer relationship intangibles	$	7,210	$	(6,873	)	$	7,210	$	(6,793	)
Non-compete contracts		457		(407	)		457		(401	)
Trade name		1,126		(425	)		1,126		(409	)
Core deposit intangible		32,115		(9,059	)		12,866		(7,030	)
Total	$	40,908	$	(16,764	)	$	21,659	$	(14,633	)

Estimated Amortization Expense

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

2023 (6 months)	$	1,450
2024		2,872
2025		2,806
2026		2,710
2027		2,596
Thereafter		11,710
Total	$	24,144

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Leases (Tables)

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Maturities of Lease Liabilities

Maturities of lease liabilities are as follows as of June 30, 2023:

2023 (6 months)	$	686
2024		1,176
2025		1,092
2026		975
2027		898
Thereafter		6,575
Total Payments		11,402
Less: Imputed Interest		(1,879	)
Total	$	9,523

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2023

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 June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Basic EPS
Net income (In thousands of dollars)	$	14,966	$	15,951	$	22,041	$	31,795
Weighted average shares outstanding		37,233,732		33,850,449		37,527,050		33,835,550
Basic earnings per share	$	0.40	$	0.47	$	0.59	$	0.94
Diluted EPS
Net income (In thousands of dollars)	$	14,966	$	15,951	$	22,041	$	31,795
Weighted average shares outstanding for basic earnings per share		37,233,732		33,850,449		37,527,050		33,835,550
Dilutive effect of restricted stock awards		86,721		72,395		96,822		91,796
Weighted average shares for diluted earnings per share		37,320,453		33,922,844		37,623,872		33,927,346
Diluted earnings per share	$	0.40	$	0.47	$	0.59	$	0.94

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Stock Based Compensation (Tables)

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Award Activity under Plans

The following is the activity under the Plans during the six month period ended June 30, 2023.

	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		193,015		$	16.69		137,369		$	15.85
Granted		54,095			13.12		102,750			14.16
Vested		(27,740	)		12.96		(30,635	)		14.35
Forfeited		(1,541	)		17.64		0			0.00
Ending balance - non-vested shares		217,829		$	15.84		209,484		$	15.01

The following is the activity under the Plans during the six month period ended June 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		101,768			17.05		56,724			17.25
Vested		(20,771	)		16.81		(65,481	)		17.48
Forfeited		0			0.00		(12,862	)		14.74
Ending balance - non-vested shares		180,561		$	16.92		137,369		$	15.85

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Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2023

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 six month periods ended June 30, 2023 and 2022.

Other Comprehensive Income (Loss):

	Three Months Ended June 30, 2023
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding gains on available-for-sale securities during the period	$	(21,309	)	$	4,475		$	(16,834	)
Reclassification adjustment for gains included in net income (1)		0			0			0
Net other comprehensive (loss)	$	(21,309	)	$	4,475		$	(16,834	)
	Three Months Ended June 30, 2022
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during the period	$	(105,497	)	$	22,154		$	(83,343	)
Reclassification adjustment for gains included in net income (1)		31			(6	)		25
Net unrealized gains on available-for-sale securities	$	(105,466	)	$	22,148		$	(83,318	)
Change in funded status of post-retirement health plan		(2	)		0			(2	)
Net other comprehensive (loss)	$	(105,468	)	$	22,148		$	(83,320	)
	Six Months Ended June 30, 2023
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding gains on available-for-sale securities during the period	$	21,591		$	(4,534	)	$	17,057
Reclassification adjustment for losses included in net income (1)		(120	)		25			(95	)
Net other comprehensive income	$	21,471		$	(4,509	)	$	16,962
	Six Months Ended June 30, 2022
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during the period	$	(217,894	)	$	45,758		$	(172,136	)
Reclassification adjustment for losses included in net income (1)		31			(7	)		24
Net unrealized gains on available-for-sale securities	$	(217,863	)	$	45,751		$	(172,112	)
Change in funded status of post-retirement health plan		(3	)		0			(3	)
Net other comprehensive (loss)	$	(217,866	)	$	45,751		$	(172,115	)

(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)

6 Months Ended

Jun. 30, 2023

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 June 30, 2023 and December 31, 2022:

	Actual					Requirement For Capital Adequacy Purposes:					To be Well Capitalized Under Prompt Corrective Action Provisions:
	Amount		Ratio			Amount		Ratio			Amount		Ratio
June 30, 2023
Common equity tier 1 capital ratio
Consolidated	$	374,278		10.25	%	$	164,288		4.5	%	N/A		N/A
Bank		391,584		10.75	%		163,977		4.5	%		236,855		6.5	%
Total risk based capital ratio
Consolidated		502,235		13.76	%		292,068		8.0	%	N/A		N/A
Bank		426,541		11.71	%		291,514		8.0	%		364,393		10.0	%
Tier 1 risk based capital ratio
Consolidated		392,278		10.74	%		219,051		6.0	%	N/A		N/A
Bank		391,584		10.75	%		218,636		6.0	%		291,514		8.0	%
Tier 1 leverage ratio
Consolidated		392,278		7.68	%		204,281		4.0	%	N/A		N/A
Bank		391,584		7.70	%		203,408		4.0	%		254,261		5.0	%
December 31, 2022
Common equity tier 1 capital ratio
Consolidated	$	403,307		13.71	%	$	132,349		4.5	%	N/A		N/A
Bank		372,679		12.71	%		131,968		4.5	%	$	190,620		6.5	%
Total risk based capital ratio
Consolidated		523,285		17.79	%		235,288		8.0	%	N/A		N/A
Bank		399,657		13.62	%		234,609		8.0	%		293,262		10.0	%
Tier 1 risk based capital ratio
Consolidated		421,307		14.32	%		176,466		6.0	%	N/A		N/A
Bank		372,679		12.71	%		175,957		6.0	%		234,609		8.0	%
Tier 1 leverage ratio
Consolidated		421,307		9.84	%		171,233		4.0	%	N/A		N/A
Bank		372,679		8.76	%		170,245		4.0	%		212,807		5.0	%

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2023

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
June 30, 2023
Goodwill and other intangibles	$	5,709	$	190,605	$	(4,263	)	$	192,051
Total assets	$	17,610	$	5,050,547	$	5,297		$	5,073,454

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
December 31, 2022
Goodwill and other intangibles	$	5,739	$	100,190	$	(4,263	)	$	101,666
Total assets	$	14,383	$	4,064,112	$	3,705		$	4,082,200

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
For Three Months Ended June 30, 2023
Net interest income	$	57	$	35,476	$	(955	)	$	34,578
Provision for credit losses and unfunded loans		0		25		0			25
Service fees, security gains and other noninterest income		2,668		7,167		(386	)		9,449
Noninterest expense		1,654		22,056		475			24,185
Amortization and depreciation expense		23		2,066		112			2,201
Income before taxes		1,048		18,496		(1,928	)		17,616
Income taxes		221		2,859		(430	)		2,650
Net income	$	827	$	15,637	$	(1,498	)	$	14,966

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
For Six Months Ended June 30, 2023
Net interest income	$	114	$	72,984	$	(1,910	)	$	71,188
Provision for credit losses and unfunded loans		0		8,624		0			8,624
Service fees, security gains and other noninterest income		5,568		14,923		(617	)		19,874
Noninterest expense		3,297		48,591		1,120			53,008
Amortization and depreciation expense		46		3,828		226			4,100
Income before taxes		2,339		26,864		(3,873	)		25,330
Income taxes		492		3,706		(909	)		3,289
Net income	$	1,847	$	23,158	$	(2,964	)	$	22,041

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
For Three Months Ended June 30, 2022
Net interest income	$	38	$	32,486	$	(813	)	$	31,711
Provision for credit losses and unfunded loans		0		616		0			616
Service fees, security gains and other noninterest income		4,839		4,606		32			9,477
Noninterest expense		3,614		16,174		494			20,282
Amortization and depreciation expense		28		1,038		113			1,179
Income before taxes		1,235		19,264		(1,388	)		19,111
Income taxes		258		3,266		(364	)		3,160
Net income	$	977	$	15,998	$	(1,024	)	$	15,951

(In Thousands of Dollars)	Trust Segment		Bank Segment		Eliminations and Others			Consolidated Totals
For Six Months Ended June 30, 2022
Net interest income	$	72	$	64,479	$	(1,598	)	$	62,953
Provision for credit losses and unfunded loans		0		258		0			258
Service fees, security gains and other noninterest income		14,037		13,347		(209	)		27,175
Noninterest expense		5,383		43,616		577			49,576
Amortization and depreciation expense		56		2,058		227			2,341
Income before taxes		8,670		31,894		(2,611	)		37,953
Income taxes		1,820		5,000		(662	)		6,158
Net income	$	6,850	$	26,894	$	(1,949	)	$	31,795

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Long-Term Borrowings (Tables)

6 Months Ended

Jun. 30, 2023

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.

	June 30, 2023		December 31, 2022
	Amount		Amount
TSEO Statutory Trust I	$	2,497	$	2,472
Maple Leaf Financial Statutory Trust II		7,629		7,517
Cortland Statutory Trust I		4,354		4,327
Total junior subordinated debentures owed to unconsolidated subsidiary trusts	$	14,480	$	14,316
Subordinated Debentures	$	73,957	$	73,895
Total long-term borrowings	$	88,437	$	88,211

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Summary of Significant Accounting Policies (Details Textual)	6 Months Ended
	Jun. 30, 2023 Segment shares	Dec. 31, 2022 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	37,457,253	34,055,125
ASU 2022-02
Summary of Significant Accounting Policies (Additional Textual) [Abstract]
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	true
Change in Accounting Principle, Accounting Standards Update, Adoption Date	Jan. 01, 2023
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false]	true
ASU 2021-08
Summary of Significant Accounting Policies (Additional Textual) [Abstract]
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	true
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false]	true

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Business Combinations (Details Textual) - USD ($) $ / shares in Units, $ in Thousands			6 Months Ended	12 Months Ended
	Jan. 01, 2023	Jul. 01, 2022	Jun. 30, 2023	Dec. 31, 2022	Nov. 01, 2021
Business Acquisition [Line Items]
Goodwill			$ 167,907	$ 94,640
Emclaire Financial Corp
Business Acquisition [Line Items]
Business acquisition, date of merger agreement	Jan. 01, 2023
Cash consideration per share | $ / shares				$ 14.12
Maximum percentage of common shares exchanged for company's shares under merger agreement	70.00%
Remaining percentage of common shares exchanged for company cash under merger agreement	30.00%
Value of stock issued for acquisition	$ 33,440
Fair value of total consideration transferred	92,642			$ 92,600
Merger related costs			4,800	$ 2,000
Goodwill	73,400				$ 73,400
Business combination, assets acquired	$ 977,159
Emclaire Financial Corp | Common Stock
Business Acquisition [Line Items]
Cash consideration per share | $ / shares	$ 40
Shares of stock issued for acquisition	2.15			4,200,000
Value of stock issued for acquisition				$ 33,400
Randy L. Jones Agency, Inc.
Business Acquisition [Line Items]
Goodwill		$ 267
Business combination, date of acquisition		Jul. 01, 2022
Business combination, assets acquired		$ 900
Business combination, intangible assets acquired		$ 633
PCD Loans
Business Acquisition [Line Items]
Business combination acquired loans with fair value			$ 25,900
Business combination acquired receivables with fair value	$ 714,400
Business combination acquired loans with gross contractual amounts receivable	$ 764,800

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Business Combinations (Details) - USD ($) $ in Thousands		12 Months Ended
	Jan. 01, 2023	Dec. 31, 2022	Jun. 30, 2023	Nov. 01, 2021
Fair value of liabilities assumed
Goodwill created		$ 94,640	$ 167,907
Emclaire Financial Corp
Consideration
Cash	$ 33,440
Stock	59,202
Fair value of total consideration transferred	92,642	$ 92,600
Fair value of assets acquired
Cash and cash equivalents	20,265
Securities available for sale	126,970
Other investments	7,795
Loans	740,659
Premises and equipment	16,103
Bank owned life insurance	22,485
Core deposit intangible	19,249
Current and deferred taxes	17,246
Other assets	6,387
Total assets acquired	977,159
Fair value of liabilities assumed
Deposits	875,813
Short-term borrowings	75,000
Accrued interest payable and other liabilities	7,104
Total liabilities	957,917
Net assets acquired	19,242
Goodwill created	73,400			$ 73,400
Total net assets acquired	$ 92,642

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Business Combinations - (Details 1) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2022
Business Combinations [Abstract]
Net interest income	$ 43,126	$ 85,127
Provision for credit losses	991	8,246
Noninterest income	10,427	29,133
Noninterest expense	28,253	69,426
Income before income taxes	24,309	36,588
Income tax expense	4,237	5,796
Net income	$ 20,072	$ 30,792
Basic earnings per share	$ 0.53	$ 0.81
Diluted earnings per share	$ 0.53	$ 0.81

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Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	$ 1,561,850	$ 1,534,512
Gross Unrealized Gains	1,201	278
Gross Unrealized Losses	(246,173)	(266,765)
Fair Value	1,316,878	1,268,025
U.S. Treasury and U.S. government sponsored entities
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	155,169	149,712
Gross Unrealized Gains	99	0
Gross Unrealized Losses	(20,103)	(21,616)
Fair Value	135,165	128,096
State and political subdivisions
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	648,030	651,705
Gross Unrealized Gains	951	266
Gross Unrealized Losses	(105,919)	(121,891)
Fair Value	543,062	530,080
Corporate bonds
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	18,329	4,181
Gross Unrealized Gains	25	0
Gross Unrealized Losses	(722)	(302)
Fair Value	17,632	3,879
Mortgage-backed securities - residential
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	653,898	672,784
Gross Unrealized Gains	9	12
Gross Unrealized Losses	(112,783)	(117,654)
Fair Value	541,124	555,142
Collateralized mortgage obligations
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	82,965	52,291
Gross Unrealized Gains	117	0
Gross Unrealized Losses	(6,286)	(4,937)
Fair Value	76,796	47,354
Small Business Administration
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	3,459	3,839
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(360)	(365)
Fair Value	$ 3,099	$ 3,474

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Securities (Details Textual)	3 Months Ended		6 Months Ended
	Jun. 30, 2023 USD ($) Securities	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) Securities	Jun. 30, 2022 USD ($)
Debt Securities, Available-for-Sale [Line Items]
Proceeds from sale of available for sale securities	$ 0	$ 1,700,000	$ 69,918,000	$ 1,670,000
Gross gains realized			441,000
Gross losses realized		31,000	$ 321,000	31,000
Number of securities | Securities	988		988
Number of securities on unrealized loss position | Securities	899		899
Allowance for credit losses on available-for-sale securities	$ 0		$ 0
ASU 2016-01 | Equity securities
Debt Securities, Available-for-Sale [Line Items]
Realized gains recognized in income statement for securities	$ 13,000		$ 14,000
Realized loss recognized in income statement for securities		$ 29,000		$ 40,000

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Securities (Details 1) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Amortized cost and fair value of the debt securities maturity
Amortized Cost, Within one year	$ 716
Amortized Cost, One to five years	39,851
Amortized Cost, Five to ten years	180,584
Amortized Cost, Beyond ten years	600,377
Amortized Cost, Mortgage-backed, collateralized mortgage obligations and Small Business Administration securities	740,322
Amortized Cost	1,561,850	$ 1,534,512
Fair Value, Within one year	706
Fair Value, One to five years	37,153
Fair Value, Five to ten years	159,597
Fair Value, Beyond ten years	498,403
Fair Value, Mortgage-backed, collateralized mortgage obligations and Small Business Administration securities	621,019
Fair Value, Total	$ 1,316,878	$ 1,268,025

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Securities (Details 2) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	$ 133,120	$ 506,824
Unrealized Losses, Less Than 12 Months	(4,912)	(80,411)
Fair Value, 12 Months or Longer	1,131,064	728,881
Unrealized Losses, 12 Months or Longer	(241,261)	(186,354)
Fair Value, Total	1,264,184	1,235,705
Unrealized Losses, Total	(246,173)	(266,765)
U.S. Treasury and U.S. government sponsored entities
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	14,652	52,311
Unrealized Losses, Less Than 12 Months	(692)	(5,835)
Fair Value, 12 Months or Longer	115,535	75,685
Unrealized Losses, 12 Months or Longer	(19,411)	(15,781)
Fair Value, Total	130,187	127,996
Unrealized Losses, Total	(20,103)	(21,616)
State and political subdivisions
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	73,802	306,709
Unrealized Losses, Less Than 12 Months	(2,835)	(56,650)
Fair Value, 12 Months or Longer	432,373	191,584
Unrealized Losses, 12 Months or Longer	(103,084)	(65,241)
Fair Value, Total	506,175	498,293
Unrealized Losses, Total	(105,919)	(121,891)
Corporate bonds
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	11,011	2,893
Unrealized Losses, Less Than 12 Months	(411)	(122)
Fair Value, 12 Months or Longer	3,561	986
Unrealized Losses, 12 Months or Longer	(311)	(180)
Fair Value, Total	14,572	3,879
Unrealized Losses, Total	(722)	(302)
Mortgage-backed securities - residential
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	4,678	101,476
Unrealized Losses, Less Than 12 Months	(44)	(13,545)
Fair Value, 12 Months or Longer	535,644	453,233
Unrealized Losses, 12 Months or Longer	(112,739)	(104,109)
Fair Value, Total	540,322	554,709
Unrealized Losses, Total	(112,783)	(117,654)
Collateralized mortgage obligations
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	28,977	42,140
Unrealized Losses, Less Than 12 Months	(930)	(4,137)
Fair Value, 12 Months or Longer	40,852	5,214
Unrealized Losses, 12 Months or Longer	(5,356)	(800)
Fair Value, Total	69,829	47,354
Unrealized Losses, Total	(6,286)	(4,937)
Small Business Administration
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	0	1,295
Unrealized Losses, Less Than 12 Months	0	(122)
Fair Value, 12 Months or Longer	3,099	2,179
Unrealized Losses, 12 Months or Longer	(360)	(243)
Fair Value, Total	3,099	3,474
Unrealized Losses, Total	$ (360)	$ (365)

XML

Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Schedule of loan balances
Total loans	$ 3,120,243		$ 2,377,772
Net deferred loan costs	8,360		6,890
Allowance for credit losses	(34,957)	$ (36,011)	(26,978)	$ (27,454)	$ (27,015)	$ (29,386)
Commercial real estate
Schedule of loan balances
Allowance for credit losses	(18,537)	(19,819)	(14,840)	(14,859)	(15,207)	(15,879)
Commercial
Schedule of loan balances
Allowance for credit losses	(5,295)	(5,230)	(4,186)	(3,893)	(3,867)	(4,949)
Residential real estate
Schedule of loan balances
Allowance for credit losses	(6,866)	(6,732)	(4,374)	(4,915)	(4,702)	(4,870)
Consumer
Schedule of loan balances
Allowance for credit losses	(4,259)	$ (4,230)	(3,578)	$ (3,787)	$ (3,239)	$ (3,688)
Loans
Schedule of loan balances
Total loans	3,146,840		2,397,860
Loans | Commercial real estate, Owner occupied | Commercial real estate
Schedule of loan balances
Loan balances	357,329		330,768
Loans | Commercial real estate, Non-owner occupied | Commercial real estate
Schedule of loan balances
Loan balances	697,486		563,652
Loans | Commercial real estate, Farmland | Commercial real estate
Schedule of loan balances
Loan balances	192,182		188,850
Loans | Commercial real estate, Other | Commercial real estate
Schedule of loan balances
Loan balances	230,160		133,630
Loans | Commercial, Commercial and industrial | Commercial
Schedule of loan balances
Loan balances	362,664		293,643
Loans | Commercial, Agricultural | Commercial
Schedule of loan balances
Loan balances	58,625		58,087
Loans | Residential real estate, 1-4 family residential | Residential real estate
Schedule of loan balances
Loan balances	849,533		475,791
Loans | Residential real estate, Home equity lines of credit | Residential real estate
Schedule of loan balances
Loan balances	138,535		132,179
Loans | Consumer, Indirect | Consumer
Schedule of loan balances
Loan balances	226,187		197,125
Loans | Consumer, Direct | Consumer
Schedule of loan balances
Loan balances	25,980		16,421
Loans | Consumer, Other | Consumer
Schedule of loan balances
Loan balances	$ 8,159		$ 7,714

XML

Loans (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning balance	$ 36,011	$ 27,015	$ 26,978	$ 29,386
PCD ACL on loans acquired	0		999
(Credit) Provision for credit losses	(255)	482	8,050	(448)
Loans charged off	(971)	(178)	(1,440)	(1,768)
Recoveries	172	135	370	284
Ending balance	34,957	27,454	34,957	27,454
Commercial real estate
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning balance	19,819	15,207	14,840	15,879
PCD ACL on loans acquired	0		850
(Credit) Provision for credit losses	(1,125)	(349)	3,003	(1,021)
Loans charged off	(157)	0	(157)	0
Recoveries	0	1	1	1
Ending balance	18,537	14,859	18,537	14,859
Commercial
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning balance	5,230	3,867	4,186	4,949
PCD ACL on loans acquired	0		138
(Credit) Provision for credit losses	639	70	1,683	341
Loans charged off	(591)	(46)	(734)	(1,405)
Recoveries	17	2	22	8
Ending balance	5,295	3,893	5,295	3,893
Residential real estate
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning balance	6,732	4,702	4,374	4,870
PCD ACL on loans acquired	0		11
(Credit) Provision for credit losses	131	197	2,529	51
Loans charged off	(11)	0	(94)	(34)
Recoveries	14	16	46	28
Ending balance	6,866	4,915	6,866	4,915
Consumer
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning balance	4,230	3,239	3,578	3,688
PCD ACL on loans acquired	0		0
(Credit) Provision for credit losses	100	564	835	181
Loans charged off	(212)	(132)	(455)	(329)
Recoveries	141	116	301	247
Ending balance	$ 4,259	$ 3,787	$ 4,259	$ 3,787

XML

Loans (Details 2) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual with no allowance for credit loss	$ 5,588
Nonaccrual with an allowance for credit loss	11,604	$ 14,311
Loans Past Due 90 Days or More Still Accruing	764	492
Originated Loans | Commercial real estate, Owner occupied | Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual with no allowance for credit loss	679
Nonaccrual with an allowance for credit loss	486	993
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 with no allowance for credit loss	1,891
Nonaccrual with an allowance for credit loss	6,285	3,031
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 with no allowance for credit loss	0
Nonaccrual with an allowance for credit loss	19	33
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 with no allowance for credit loss	2,059
Nonaccrual with an allowance for credit loss	113	2,183
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 with no allowance for credit loss	117
Nonaccrual with an allowance for credit loss	1,780	3,840
Loans Past Due 90 Days or More Still Accruing	0	50
Originated Loans | Commercial, Agricultural | Commercial
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual with no allowance for credit loss	224
Nonaccrual with an allowance for credit loss	198	299
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 with no allowance for credit loss	269
Nonaccrual with an allowance for credit loss	2,096	2,703
Loans Past Due 90 Days or More Still Accruing	594	310
Originated Loans | Residential real estate, Home equity lines of credit | Residential real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual with no allowance for credit loss	274
Nonaccrual with an allowance for credit loss	242	735
Loans Past Due 90 Days or More Still Accruing	112	58
Originated Loans | Consumer, Indirect | Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual with no allowance for credit loss	10
Nonaccrual with an allowance for credit loss	296	313
Loans Past Due 90 Days or More Still Accruing	57	62
Originated Loans | Consumer, Direct | Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual with no allowance for credit loss	65
Nonaccrual with an allowance for credit loss	86	179
Loans Past Due 90 Days or More Still Accruing	1	12
Originated Loans | Consumer, Other | Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual with an allowance for credit loss		$ 2
Originated Loans | Consumer, Other | Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual with no allowance for credit loss	0
Nonaccrual with an allowance for credit loss	3
Loans Past Due 90 Days or More Still Accruing	$ 0

XML

Loans (Details 3) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Loans	$ 3,155,200	$ 2,404,750
Real Estate
Financing Receivable, Past Due [Line Items]
Loans	9,847
Business Assets
Financing Receivable, Past Due [Line Items]
Loans	1,394
Vehicles
Financing Receivable, Past Due [Line Items]
Loans	72
Cash
Financing Receivable, Past Due [Line Items]
Loans	66
Commercial real estate
Financing Receivable, Past Due [Line Items]
Loans	1,283,828	1,026,822
Commercial
Financing Receivable, Past Due [Line Items]
Loans		294,406
Residential real estate
Financing Receivable, Past Due [Line Items]
Loans	849,208	475,348
Consumer
Financing Receivable, Past Due [Line Items]
Loans	268,375	228,794
Commercial real estate, Owner occupied | Commercial real estate
Financing Receivable, Past Due [Line Items]
Loans	357,066	330,457
Commercial real estate, Owner occupied | Commercial real estate | Real Estate
Financing Receivable, Past Due [Line Items]
Loans	801
Commercial real estate, Owner occupied | Commercial real estate | Business Assets
Financing Receivable, Past Due [Line Items]
Loans	0
Commercial real estate, Owner occupied | Commercial real estate | Vehicles
Financing Receivable, Past Due [Line Items]
Loans	0
Commercial real estate, Owner occupied | Commercial real estate | Cash
Financing Receivable, Past Due [Line Items]
Loans	0
Commercial real estate, Owner occupied | Commercial | Real Estate
Financing Receivable, Past Due [Line Items]
Loans	0
Commercial real estate, Non-owner occupied | Commercial real estate
Financing Receivable, Past Due [Line Items]
Loans	696,944	563,044
Commercial real estate, Non-owner occupied | Commercial real estate | Real Estate
Financing Receivable, Past Due [Line Items]
Loans	5,080
Commercial real estate, Non-owner occupied | Commercial real estate | Business Assets
Financing Receivable, Past Due [Line Items]
Loans	0
Commercial real estate, Non-owner occupied | Commercial real estate | Vehicles
Financing Receivable, Past Due [Line Items]
Loans	0
Commercial real estate, Non-owner occupied | Commercial real estate | Cash
Financing Receivable, Past Due [Line Items]
Loans	0
Commercial real estate, Farmland | Commercial real estate
Financing Receivable, Past Due [Line Items]
Loans	191,945	188,582
Commercial real estate, Farmland | Commercial real estate | Real Estate
Financing Receivable, Past Due [Line Items]
Loans	2,059
Commercial real estate, Farmland | Commercial real estate | Business Assets
Financing Receivable, Past Due [Line Items]
Loans	0
Commercial real estate, Farmland | Commercial real estate | Vehicles
Financing Receivable, Past Due [Line Items]
Loans	0
Commercial real estate, Farmland | Commercial real estate | Cash
Financing Receivable, Past Due [Line Items]
Loans	0
Commercial real estate, Other | Commercial real estate
Financing Receivable, Past Due [Line Items]
Loans	229,818	133,321
Commercial real estate, Other | Commercial real estate | Real Estate
Financing Receivable, Past Due [Line Items]
Loans	0
Commercial real estate, Other | Commercial real estate | Business Assets
Financing Receivable, Past Due [Line Items]
Loans	0
Commercial real estate, Other | Commercial real estate | Vehicles
Financing Receivable, Past Due [Line Items]
Loans	0
Commercial real estate, Other | Commercial real estate | Cash
Financing Receivable, Past Due [Line Items]
Loans	0
Commercial, Commercial and industrial | Commercial
Financing Receivable, Past Due [Line Items]
Loans	363,951	294,406
Commercial, Commercial and industrial | Commercial | Business Assets
Financing Receivable, Past Due [Line Items]
Loans	1,170
Commercial, Commercial and industrial | Commercial | Vehicles
Financing Receivable, Past Due [Line Items]
Loans	0
Commercial, Commercial and industrial | Commercial | Cash
Financing Receivable, Past Due [Line Items]
Loans	0
Commercial, Agricultural | Commercial
Financing Receivable, Past Due [Line Items]
Loans	59,326	58,589
Commercial, Agricultural | Commercial | Business Assets
Financing Receivable, Past Due [Line Items]
Loans	224
Commercial, Agricultural | Commercial | Vehicles
Financing Receivable, Past Due [Line Items]
Loans	0
Commercial, Agricultural | Commercial | Cash
Financing Receivable, Past Due [Line Items]
Loans	0
Residential real estate, 1-4 family residential | Residential real estate
Financing Receivable, Past Due [Line Items]
Loans	849,208	475,348
Residential real estate, 1-4 family residential | Residential real estate | Real Estate
Financing Receivable, Past Due [Line Items]
Loans	1,576
Residential real estate, 1-4 family residential | Residential real estate | Business Assets
Financing Receivable, Past Due [Line Items]
Loans	0
Residential real estate, 1-4 family residential | Residential real estate | Vehicles
Financing Receivable, Past Due [Line Items]
Loans	0
Residential real estate, 1-4 family residential | Residential real estate | Cash
Financing Receivable, Past Due [Line Items]
Loans	0
Residential real estate, Home equity lines of credit | Residential real estate
Financing Receivable, Past Due [Line Items]
Loans	138,567	132,209
Residential real estate, Home equity lines of credit | Residential real estate | Real Estate
Financing Receivable, Past Due [Line Items]
Loans	331
Residential real estate, Home equity lines of credit | Residential real estate | Business Assets
Financing Receivable, Past Due [Line Items]
Loans	0
Residential real estate, Home equity lines of credit | Residential real estate | Vehicles
Financing Receivable, Past Due [Line Items]
Loans	0
Residential real estate, Home equity lines of credit | Residential real estate | Cash
Financing Receivable, Past Due [Line Items]
Loans	0
Consumer, Indirect | Consumer
Financing Receivable, Past Due [Line Items]
Loans	234,209	204,623
Consumer, Indirect | Consumer | Real Estate
Financing Receivable, Past Due [Line Items]
Loans	0
Consumer, Indirect | Consumer | Business Assets
Financing Receivable, Past Due [Line Items]
Loans	0
Consumer, Indirect | Consumer | Vehicles
Financing Receivable, Past Due [Line Items]
Loans	48
Consumer, Indirect | Consumer | Cash
Financing Receivable, Past Due [Line Items]
Loans	0
Consumer, Direct | Consumer
Financing Receivable, Past Due [Line Items]
Loans	26,007	16,457
Consumer, Direct | Consumer | Real Estate
Financing Receivable, Past Due [Line Items]
Loans	0
Consumer, Direct | Consumer | Business Assets
Financing Receivable, Past Due [Line Items]
Loans	0
Consumer, Direct | Consumer | Vehicles
Financing Receivable, Past Due [Line Items]
Loans	24
Consumer, Direct | Consumer | Cash
Financing Receivable, Past Due [Line Items]
Loans	66
Consumer, Other | Consumer
Financing Receivable, Past Due [Line Items]
Loans	8,159	$ 7,714
Consumer, Other | Consumer | Real Estate
Financing Receivable, Past Due [Line Items]
Loans	0
Consumer, Other | Consumer | Business Assets
Financing Receivable, Past Due [Line Items]
Loans	0
Consumer, Other | Consumer | Vehicles
Financing Receivable, Past Due [Line Items]
Loans	0
Consumer, Other | Consumer | Cash
Financing Receivable, Past Due [Line Items]
Loans	$ 0

XML

Loans (Details 4) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	$ 3,155,200	$ 2,404,750
Real Estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	9,847
Business Assets
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	1,394
Vehicles
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	72
Cash
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	66
Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	10,730	7,160
Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	1,591	2,445
Financing Receivables, Equal to Greater than 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	17,956	14,803
Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	30,277	24,408
Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	3,124,923	2,380,342
Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	1,283,828	1,026,822
Commercial
Financing Receivable Recorded Investment Past Due [Line Items]
Loans		294,406
Residential real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	849,208	475,348
Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	268,375	228,794
Commercial real estate, Owner occupied | Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	357,066	330,457
Commercial real estate, Owner occupied | Commercial real estate | Real Estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	801
Commercial real estate, Owner occupied | Commercial real estate | Business Assets
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Commercial real estate, Owner occupied | Commercial real estate | Vehicles
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Commercial real estate, Owner occupied | Commercial real estate | Cash
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
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	345	159
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	0
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	1,165	993
Commercial real estate, Owner occupied | Commercial real estate | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	1,510	1,152
Commercial real estate, Owner occupied | Commercial real estate | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	355,556	329,305
Commercial real estate, Owner occupied | Commercial | Real Estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Commercial real estate, Non-owner occupied | Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	696,944	563,044
Commercial real estate, Non-owner occupied | Commercial real estate | Real Estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	5,080
Commercial real estate, Non-owner occupied | Commercial real estate | Business Assets
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Commercial real estate, Non-owner occupied | Commercial real estate | Vehicles
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Commercial real estate, Non-owner occupied | Commercial real estate | Cash
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
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	0	0
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	0
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	8,176	3,031
Commercial real estate, Non-owner occupied | Commercial real estate | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	8,176	3,031
Commercial real estate, Non-owner occupied | Commercial real estate | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	688,768	560,013
Commercial real estate, Farmland | Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	191,945	188,582
Commercial real estate, Farmland | Commercial real estate | Real Estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	2,059
Commercial real estate, Farmland | Commercial real estate | Business Assets
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Commercial real estate, Farmland | Commercial real estate | Vehicles
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Commercial real estate, Farmland | Commercial real estate | Cash
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Commercial real estate, Farmland | Commercial real estate | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	321	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	0	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	2,172	2,183
Commercial real estate, Farmland | Commercial real estate | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	2,493	2,183
Commercial real estate, Farmland | Commercial real estate | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	189,452	186,399
Commercial real estate, Other | Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	229,818	133,321
Commercial real estate, Other | Commercial real estate | Real Estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Commercial real estate, Other | Commercial real estate | Business Assets
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Commercial real estate, Other | Commercial real estate | Vehicles
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Commercial real estate, Other | Commercial real estate | Cash
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Commercial real estate, Other | Commercial real estate | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	80	0
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	19	33
Commercial real estate, Other | Commercial real estate | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	99	33
Commercial real estate, Other | Commercial real estate | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	229,719	133,288
Commercial, Commercial and industrial | Commercial
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	363,951	294,406
Commercial, Commercial and industrial | Commercial | Business Assets
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	1,170
Commercial, Commercial and industrial | Commercial | Vehicles
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Commercial, Commercial and industrial | Commercial | Cash
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Commercial, Commercial and industrial | Commercial | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	378	1,034
Commercial, Commercial and industrial | Commercial | Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	239	185
Commercial, Commercial and industrial | Commercial | Financing Receivables, Equal to Greater than 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	1,897	3,890
Commercial, Commercial and industrial | Commercial | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	2,514	5,109
Commercial, Commercial and industrial | Commercial | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	361,437	289,297
Commercial, Agricultural | Commercial
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	59,326	58,589
Commercial, Agricultural | Commercial | Business Assets
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	224
Commercial, Agricultural | Commercial | Vehicles
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Commercial, Agricultural | Commercial | Cash
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Commercial, Agricultural | Commercial | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	227	104
Commercial, Agricultural | Commercial | Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	166	20
Commercial, Agricultural | Commercial | Financing Receivables, Equal to Greater than 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	422	299
Commercial, Agricultural | Commercial | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	815	423
Commercial, Agricultural | Commercial | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	58,511	58,166
Residential real estate, 1-4 family residential | Residential real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	849,208	475,348
Residential real estate, 1-4 family residential | Residential real estate | Real Estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	1,576
Residential real estate, 1-4 family residential | Residential real estate | Business Assets
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Residential real estate, 1-4 family residential | Residential real estate | Vehicles
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Residential real estate, 1-4 family residential | Residential real estate | Cash
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
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	8,256	4,247
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	979	1,775
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	2,959	3,013
Residential real estate, 1-4 family residential | Residential real estate | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	12,194	9,035
Residential real estate, 1-4 family residential | Residential real estate | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	837,014	466,313
Residential real estate, Home equity lines of credit | Residential real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	138,567	132,209
Residential real estate, Home equity lines of credit | Residential real estate | Real Estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	331
Residential real estate, Home equity lines of credit | Residential real estate | Business Assets
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Residential real estate, Home equity lines of credit | Residential real estate | Vehicles
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Residential real estate, Home equity lines of credit | Residential real estate | Cash
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
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	214	115
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	108	92
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	628	793
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	950	1,000
Residential real estate, Home equity lines of credit | Residential real estate | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	137,617	131,209
Consumer, Indirect | Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	234,209	204,623
Consumer, Indirect | Consumer | Real Estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Consumer, Indirect | Consumer | Business Assets
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Consumer, Indirect | Consumer | Vehicles
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	48
Consumer, Indirect | Consumer | Cash
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Consumer, Indirect | Consumer | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	822	1,267
Consumer, Indirect | Consumer | Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	79	298
Consumer, Indirect | Consumer | Financing Receivables, Equal to Greater than 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	363	375
Consumer, Indirect | Consumer | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	1,264	1,940
Consumer, Indirect | Consumer | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	232,945	202,683
Consumer, Direct | Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	26,007	16,457
Consumer, Direct | Consumer | Real Estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Consumer, Direct | Consumer | Business Assets
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Consumer, Direct | Consumer | Vehicles
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	24
Consumer, Direct | Consumer | Cash
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	66
Consumer, Direct | Consumer | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	81	234
Consumer, Direct | Consumer | Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	16	70
Consumer, Direct | Consumer | Financing Receivables, Equal to Greater than 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	152	191
Consumer, Direct | Consumer | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	249	495
Consumer, Direct | Consumer | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	25,758	15,962
Consumer, Other | Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	8,159	7,714
Consumer, Other | Consumer | Real Estate
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Consumer, Other | Consumer | Business Assets
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Consumer, Other | Consumer | Vehicles
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Consumer, Other | Consumer | Cash
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	0
Consumer, Other | Consumer | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	6	0
Consumer, Other | Consumer | Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	4	5
Consumer, Other | Consumer | Financing Receivables, Equal to Greater than 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	3	2
Consumer, Other | Consumer | Financing Receivables, Total Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	13	7
Consumer, Other | Consumer | Loans Not Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Loans	$ 8,146	$ 7,707

XML

Loan Restructurings (Details) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2023 USD ($) Loan	Jun. 30, 2023 USD ($) Loan
Financing Receivable Modifications [Line Items]
Number of Contracts | Loan	0	1
Amortized Cost Basis | $	$ 0	$ 50
% of Total class of Financing receivable	0.00%	0.01%
Accruing restructured loans
Financing Receivable Modifications [Line Items]
Number of Contracts | Loan	0	1
Amortized Cost Basis | $	$ 0	$ 50
% of Total class of Financing receivable	0.00%	0.01%
Accruing restructured loans | Commercial | Commercial, Commercial and industrial
Financing Receivable Modifications [Line Items]
Number of Contracts | Loan		1
Amortized Cost Basis | $		$ 50
% of Total class of Financing receivable		0.01%
Nonaccrual restructured loans
Financing Receivable Modifications [Line Items]
Number of Contracts | Loan	0	0
Amortized Cost Basis | $	$ 0	$ 0
% of Total class of Financing receivable	0.00%	0.00%

XML

Loan Restructurings (Details 1) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023
Financing Receivable Modifications [Line Items]
Payment status (Amortized cost Basis)	$ 0	$ 50
Current
Financing Receivable Modifications [Line Items]
Payment status (Amortized cost Basis)	0	50
30-89 Days Past due
Financing Receivable Modifications [Line Items]
Payment status (Amortized cost Basis)	0	0
90+ Days Past due
Financing Receivable Modifications [Line Items]
Payment status (Amortized cost Basis)	0	0
Accruing restructured loans
Financing Receivable Modifications [Line Items]
Payment status (Amortized cost Basis)	0	50
Accruing restructured loans | Current
Financing Receivable Modifications [Line Items]
Payment status (Amortized cost Basis)	0	50
Accruing restructured loans | 30-89 Days Past due
Financing Receivable Modifications [Line Items]
Payment status (Amortized cost Basis)	0	0
Accruing restructured loans | 90+ Days Past due
Financing Receivable Modifications [Line Items]
Payment status (Amortized cost Basis)	0	0
Accruing restructured loans | Commercial | Commercial, Commercial and industrial
Financing Receivable Modifications [Line Items]
Payment status (Amortized cost Basis)		50
Accruing restructured loans | Commercial | Commercial, Commercial and industrial | Current
Financing Receivable Modifications [Line Items]
Payment status (Amortized cost Basis)		50
Accruing restructured loans | Commercial | Commercial, Commercial and industrial | 30-89 Days Past due
Financing Receivable Modifications [Line Items]
Payment status (Amortized cost Basis)		0
Accruing restructured loans | Commercial | Commercial, Commercial and industrial | 90+ Days Past due
Financing Receivable Modifications [Line Items]
Payment status (Amortized cost Basis)		0
Nonaccrual restructured loans
Financing Receivable Modifications [Line Items]
Payment status (Amortized cost Basis)	0	0
Nonaccrual restructured loans | Current
Financing Receivable Modifications [Line Items]
Payment status (Amortized cost Basis)	0	0
Nonaccrual restructured loans | 30-89 Days Past due
Financing Receivable Modifications [Line Items]
Payment status (Amortized cost Basis)	0	0
Nonaccrual restructured loans | 90+ Days Past due
Financing Receivable Modifications [Line Items]
Payment status (Amortized cost Basis)	$ 0	$ 0

XML

Loan Restructurings (Details Textual)	6 Months Ended
	Jun. 30, 2023 USD ($)
Financing Receivable Modifications [Line Items]
Commitments to lend any additional funds on restructured loans	$ 0
Loans modified as default	$ 0
ASU 2022-02
Financing Receivable Modifications [Line Items]
Change in accounting principle, accounting standards update, adopted [true false]	true
Change in accounting principle, accounting standards update, adoption date	Jan. 01, 2023

XML

Credit Quality Indicators (Details Textual) - USD ($)	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable Recorded Investment [Line Items]
Maximum commercial loan and commercial real estate relationships	$ 1,000,000
Unfunded commitments	741,000,000
Anticipated credit losses	1,980,000
Payments to Acquire Loans Receivable	740,659,000
PCD Loans
Financing Receivable Recorded Investment [Line Items]
Business combination acquired loans with fair value	25,900,000
Credit discount	999,000
Noncredit discount	$ 5,500,000
ASU 2016-13
Financing Receivable Recorded Investment [Line Items]
Change in accounting principle, accounting standards update, adopted [true false]	true
Residential real estate, 1-4 family residential
Financing Receivable Recorded Investment [Line Items]
Other real estate owned properties	$ 34,000	$ 0
Other real estate properties in foreclosure	$ 178,000	$ 129,000

XML

Credit Quality Indicators (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	$ 1,899,050	$ 1,568,399
Pass
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	1,811,681	1,511,935
Special Mention
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	42,380	27,761
Substandard
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	44,989	28,703
Commercial real estate | Commercial real estate, Owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	357,066	330,457
Commercial real estate | Commercial real estate, Owner occupied | Pass
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	347,171	324,979
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	5,326	1,193
Commercial real estate | Commercial real estate, Owner occupied | Substandard
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	4,569	4,285
Commercial real estate | Commercial real estate, Non-owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	696,944	563,044
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	646,559	527,267
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	22,362	25,541
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	28,023	10,236
Commercial real estate | Commercial farmland
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	191,945	188,582
Commercial real estate | Commercial farmland | Pass
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	189,238	186,057
Commercial real estate | Commercial farmland | Special Mention
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	0	0
Commercial real estate | Commercial farmland | Substandard
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	2,707	2,525
Commercial real estate | Commercial real estate, Other
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	229,818	133,321
Commercial real estate | Commercial real estate, Other | Pass
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	222,049	133,218
Commercial real estate | Commercial real estate, Other | Special Mention
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	7,550	0
Commercial real estate | Commercial real estate, Other | Substandard
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	219	103
Commercial | Commercial and industrial
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	363,951	294,406
Commercial | Commercial and industrial | Pass
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	347,795	282,412
Commercial | Commercial and industrial | Special Mention
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	7,142	777
Commercial | Commercial and industrial | Substandard
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	9,014	11,217
Commercial | Commercial, Agricultural
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	59,326	58,589
Commercial | Commercial, Agricultural | Pass
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	58,869	58,002
Commercial | Commercial, Agricultural | Special Mention
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	0	250
Commercial | Commercial, Agricultural | Substandard
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	$ 457	$ 337

XML

Credit Quality Indicators (Details 1) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable Recorded Investment [Line Items]
Loans	$ 3,155,200	$ 2,404,750
Residential real estate | Residential real estate, 1-4 family residential
Financing Receivable Recorded Investment [Line Items]
Loans	849,208	475,348
Residential real estate | Residential real estate, 1-4 family residential | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	846,249	472,335
Residential real estate | Residential real estate, 1-4 family residential | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	2,959	3,013
Residential real estate | Residential real estate, Home equity lines of credit
Financing Receivable Recorded Investment [Line Items]
Loans	138,567	132,209
Residential real estate | Residential real estate, Home equity lines of credit | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	137,939	131,416
Residential real estate | Residential real estate, Home equity lines of credit | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	628	793
Consumer | Consumer, Indirect
Financing Receivable Recorded Investment [Line Items]
Loans	234,209	204,623
Consumer | Consumer, Indirect | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	233,846	204,248
Consumer | Consumer, Indirect | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	363	375
Consumer | Consumer, Direct
Financing Receivable Recorded Investment [Line Items]
Loans	26,007	16,457
Consumer | Consumer, Direct | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	25,855	16,266
Consumer | Consumer, Direct | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	152	191
Consumer | Consumer, Other
Financing Receivable Recorded Investment [Line Items]
Loans	8,159	7,714
Consumer | Consumer, Other | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	8,156	7,712
Consumer | Consumer, Other | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	$ 3	$ 2

XML

Credit Quality Indicators (Details 2) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable Recorded Investment [Line Items]
Total	$ 3,155,200	$ 2,404,750
Commercial real estate
Financing Receivable Recorded Investment [Line Items]
2023	54,049	188,240
2022	254,672	175,570
2021	231,293	123,000
2020	160,554	145,596
2019	161,626	90,660
Prior	406,540	285,307
Revolving Loans	15,094	18,449
Total	1,283,828	1,026,822
Gross write-offs, 2023	0
Gross write-offs, 2022	0
Gross write-offs, 2021	0
Gross write-offs, 2020	0
Gross write-offs, 2019	1
Gross write-offs, Prior	156
Gross write-offs, Revolving Loans	0
Gross write-offs	157
Commercial real estate | Pass
Financing Receivable Recorded Investment [Line Items]
2023	54,049	188,240
2022	254,672	174,841
2021	225,147	120,883
2020	143,875	138,342
2019	151,048	89,769
Prior	373,002	256,103
Revolving Loans	13,986	17,286
Total	1,215,779	985,464
Commercial real estate | Special Mention
Financing Receivable Recorded Investment [Line Items]
2023	0	0
2022	0	711
2021	4,496	1,861
2020	12,838	5,286
2019	8,515	624
Prior	9,389	18,252
Revolving Loans	0	0
Total	35,238	26,734
Commercial real estate | Substandard
Financing Receivable Recorded Investment [Line Items]
2023	0	0
2022	0	18
2021	1,650	256
2020	3,841	1,968
2019	2,063	267
Prior	24,149	10,952
Revolving Loans	1,108	1,163
Total	32,811	14,624
Commercial and industrial
Financing Receivable Recorded Investment [Line Items]
2023	63,591
2022	100,684
2021	49,665
2020	29,905
2019	14,802
Prior	30,206
Revolving Loans	75,098
Total	363,951
Gross write-offs, 2023	0
Gross write-offs, 2022	95
Gross write-offs, 2021	377
Gross write-offs, 2020	11
Gross write-offs, 2019	16
Gross write-offs, Prior	172
Gross write-offs, Revolving Loans	0
Gross write-offs	671
Commercial and industrial | Pass
Financing Receivable Recorded Investment [Line Items]
2023	63,363
2022	97,102
2021	48,716
2020	29,047
2019	13,470
Prior	29,190
Revolving Loans	66,907
Total	347,795
Commercial and industrial | Special Mention
Financing Receivable Recorded Investment [Line Items]
2023	0
2022	174
2021	616
2020	75
2019	1,038
Prior	10
Revolving Loans	5,229
Total	7,142
Commercial and industrial | Substandard
Financing Receivable Recorded Investment [Line Items]
2023	228
2022	3,408
2021	333
2020	783
2019	294
Prior	1,006
Revolving Loans	2,962
Total	9,014
Commercial
Financing Receivable Recorded Investment [Line Items]
2023		104,010
2022		47,400
2021		34,466
2020		17,006
2019		13,684
Prior		16,425
Revolving Loans		61,415
Total		294,406
Commercial | Pass
Financing Receivable Recorded Investment [Line Items]
2023		100,368
2022		45,872
2021		34,110
2020		16,854
2019		13,574
Prior		14,664
Revolving Loans		56,970
Total		282,412
Commercial | Special Mention
Financing Receivable Recorded Investment [Line Items]
2023		0
2022		197
2021		0
2020		0
2019		0
Prior		0
Revolving Loans		580
Total		777
Commercial | Substandard
Financing Receivable Recorded Investment [Line Items]
2023		3,642
2022		1,331
2021		356
2020		152
2019		110
Prior		1,761
Revolving Loans		3,865
Total		11,217
Agricultural Portfolio Segment
Financing Receivable Recorded Investment [Line Items]
2023	18,279	51,096
2022	53,234	36,755
2021	32,912	44,368
2020	41,285	23,733
2019	21,688	24,003
Prior	66,440	47,636
Revolving Loans	17,433	19,580
Total	251,271	247,171
Gross write-offs, 2023	0
Gross write-offs, 2022	15
Gross write-offs, 2021	44
Gross write-offs, 2020	0
Gross write-offs, 2019	0
Gross write-offs, Prior	4
Gross write-offs, Revolving Loans	0
Gross write-offs	63
Agricultural Portfolio Segment | Pass
Financing Receivable Recorded Investment [Line Items]
2023	18,279	51,096
2022	53,234	36,376
2021	32,543	44,133
2020	41,069	23,661
2019	21,627	24,003
Prior	64,050	45,490
Revolving Loans	17,305	19,300
Total	248,107	244,059
Agricultural Portfolio Segment | Special Mention
Financing Receivable Recorded Investment [Line Items]
2023	0	0
2022	0	0
2021	0	0
2020	0	0
2019	0	0
Prior	0	0
Revolving Loans	0	250
Total	0	250
Agricultural Portfolio Segment | Substandard
Financing Receivable Recorded Investment [Line Items]
2023	0	0
2022	0	379
2021	369	235
2020	216	72
2019	61	0
Prior	2,390	2,146
Revolving Loans	128	30
Total	3,164	2,862
Residential real estate
Financing Receivable Recorded Investment [Line Items]
2023	26,642	83,951
2022	177,325	112,599
2021	170,407	76,414
2020	141,990	31,643
2019	51,782	23,003
Prior	277,363	143,782
Revolving Loans	3,699	3,956
Total	849,208	475,348
Gross write-offs, 2023	0
Gross write-offs, 2022	0
Gross write-offs, 2021	0
Gross write-offs, 2020	0
Gross write-offs, 2019	0
Gross write-offs, Prior	82
Gross write-offs, Revolving Loans	0
Gross write-offs	82
Residential real estate | Pass
Financing Receivable Recorded Investment [Line Items]
2023	26,642	83,951
2022	177,294	112,463
2021	169,952	76,095
2020	141,482	31,404
2019	51,291	22,918
Prior	268,622	135,757
Revolving Loans	3,699	3,956
Total	838,982	466,544
Residential real estate | Special Mention
Financing Receivable Recorded Investment [Line Items]
2023	0	0
2022	0	0
2021	0	70
2020	68	118
2019	113	76
Prior	159	93
Revolving Loans	0	0
Total	340	357
Residential real estate | Substandard
Financing Receivable Recorded Investment [Line Items]
2023	0	0
2022	31	136
2021	455	249
2020	440	121
2019	378	9
Prior	8,582	7,932
Revolving Loans	0	0
Total	9,886	8,447
Home equity lines of credit
Financing Receivable Recorded Investment [Line Items]
2023	0	0
2022	46	23
2021	60	137
2020	129	20
2019	87	16
Prior	4,094	3,242
Revolving Loans	134,151	128,771
Total	138,567	132,209
Gross write-offs, 2023	0
Gross write-offs, 2022	0
Gross write-offs, 2021	0
Gross write-offs, 2020	8
Gross write-offs, 2019	0
Gross write-offs, Prior	4
Gross write-offs, Revolving Loans	0
Gross write-offs	12
Home equity lines of credit | Pass
Financing Receivable Recorded Investment [Line Items]
2023	0	0
2022	19	10
2021	10	0
2020	47	0
2019	67	16
Prior	2,066	1,394
Revolving Loans	134,014	128,622
Total	136,223	130,042
Home equity lines of credit | Special Mention
Financing Receivable Recorded Investment [Line Items]
2023	0	0
2022	0	0
2021	0	0
2020	0	0
2019	0	0
Prior	0	0
Revolving Loans	38	49
Total	38	49
Home equity lines of credit | Substandard
Financing Receivable Recorded Investment [Line Items]
2023	0	0
2022	27	13
2021	50	137
2020	82	20
2019	20	0
Prior	2,028	1,848
Revolving Loans	99	100
Total	2,306	2,118
Consumer
Financing Receivable Recorded Investment [Line Items]
2023	44,887	98,632
2022	87,578	47,058
2021	40,896	32,551
2020	27,254	21,079
2019	16,638	11,027
Prior	43,279	11,144
Revolving Loans	7,843	7,303
Total	268,375	228,794
Gross write-offs, 2023	0
Gross write-offs, 2022	113
Gross write-offs, 2021	46
Gross write-offs, 2020	76
Gross write-offs, 2019	30
Gross write-offs, Prior	157
Gross write-offs, Revolving Loans	33
Gross write-offs	455
Consumer | Pass
Financing Receivable Recorded Investment [Line Items]
2023	44,887	98,530
2022	87,410	46,945
2021	40,831	32,284
2020	27,009	20,849
2019	16,462	10,918
Prior	43,017	10,942
Revolving Loans	7,843	7,302
Total	267,459	227,770
Consumer | Special Mention
Financing Receivable Recorded Investment [Line Items]
2023		0
2022		0
2021		0
2020		0
2019		0
Prior		0
Revolving Loans		0
Total		0
Consumer | Substandard
Financing Receivable Recorded Investment [Line Items]
2023	0	102
2022	168	113
2021	65	267
2020	245	230
2019	176	109
Prior	262	202
Revolving Loans	0	1
Total	$ 916	$ 1,024

XML

Credit Quality Indicators (Details 3)	6 Months Ended
	Jun. 30, 2023
Home equity lines of credit
Financing Receivable Recorded Investment [Line Items]
Methodology	Cohort
Loss Drivers	Credit Loss History
Residential real estate | Residential real estate, 1-4 family residential | 1st Liens
Financing Receivable Recorded Investment [Line Items]
Methodology	Cohort
Loss Drivers	Credit Loss History
Residential real estate | Residential real estate, 1-4 family residential | 2nd Liens
Financing Receivable Recorded Investment [Line Items]
Methodology	Cohort
Loss Drivers	Credit Loss History
Consumer | Consumer Finance Cash Reserve Loan
Financing Receivable Recorded Investment [Line Items]
Methodology	Cohort
Loss Drivers	Credit Loss History
Consumer | Consumer, Direct
Financing Receivable Recorded Investment [Line Items]
Methodology	Cohort
Loss Drivers	Credit Loss History
Consumer | Consumer, Indirect
Financing Receivable Recorded Investment [Line Items]
Methodology	Cohort
Loss Drivers	Credit Loss History
Commercial | Commercial, Commercial and industrial
Financing Receivable Recorded Investment [Line Items]
Methodology	PD/LGD
Loss Drivers	Credit Loss History
Commercial | Commercial, Agricultural
Financing Receivable Recorded Investment [Line Items]
Methodology	PD/LGD
Loss Drivers	Credit Loss History
Commercial | Commercial, municipal
Financing Receivable Recorded Investment [Line Items]
Methodology	PD/LGD
Loss Drivers	Credit Loss History
Commercial real estate | Commercial real estate, multifamily
Financing Receivable Recorded Investment [Line Items]
Methodology	PD/LGD
Loss Drivers	Credit Loss History
Commercial real estate | Commercial real estate, Owner occupied
Financing Receivable Recorded Investment [Line Items]
Methodology	PD/LGD
Loss Drivers	Credit Loss History
Commercial real estate | Commercial real estate, Non-owner occupied
Financing Receivable Recorded Investment [Line Items]
Methodology	PD/LGD
Loss Drivers	Credit Loss History
Commercial real estate | Commercial real estate, Farmland
Financing Receivable Recorded Investment [Line Items]
Methodology	PD/LGD
Loss Drivers	Credit Loss History
Commercial real estate | Commercial real estate, construction
Financing Receivable Recorded Investment [Line Items]
Methodology	PD/LGD
Loss Drivers	Credit Loss History

XML

Credit Quality Indicators (Details 4) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
Risks and Uncertainties [Abstract]
Par value of acquired loans at acquisition	$ 797,616
Net purchase discount	(55,958)
Allowance for credit losses of PCD loans	(999)
Purchase price of loans at acqisition	$ 740,659

XML

Credit Quality Indicators (Details 5) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Loans And Leases Receivable Disclosure [Line Items]
ACL Balance	$ 34,957	$ 36,011	$ 26,978	$ 27,454	$ 27,015	$ 29,386
PCD Loans
Loans And Leases Receivable Disclosure [Line Items]
Loan balances	43,765
ACL Balance	1,446
Commercial real estate
Loans And Leases Receivable Disclosure [Line Items]
ACL Balance	18,537	19,819	14,840	14,859	15,207	15,879
Commercial real estate | Commercial real estate, Owner occupied | PCD Loans
Loans And Leases Receivable Disclosure [Line Items]
Loan balances	1,739
ACL Balance	33
Commercial real estate | Commercial real estate, Non-owner occupied | PCD Loans
Loans And Leases Receivable Disclosure [Line Items]
Loan balances	35,694
ACL Balance	1,222
Commercial real estate | Commercial real estate, Farmland | PCD Loans
Loans And Leases Receivable Disclosure [Line Items]
Loan balances	13
ACL Balance	0
Commercial
Loans And Leases Receivable Disclosure [Line Items]
ACL Balance	5,295	5,230	4,186	3,893	3,867	4,949
Commercial | Commercial, Commercial and industrial | PCD Loans
Loans And Leases Receivable Disclosure [Line Items]
Loan balances	2,655
ACL Balance	160
Commercial | Commercial, Agricultural | PCD Loans
Loans And Leases Receivable Disclosure [Line Items]
Loan balances	149
ACL Balance	10
Residential real estate
Loans And Leases Receivable Disclosure [Line Items]
ACL Balance	6,866	$ 6,732	$ 4,374	$ 4,915	$ 4,702	$ 4,870
Residential real estate | Residential real estate, 1-4 family residential | PCD Loans
Loans And Leases Receivable Disclosure [Line Items]
Loan balances	3,512
ACL Balance	21
Residential real estate | Residential real estate, Home equity lines of credit | PCD Loans
Loans And Leases Receivable Disclosure [Line Items]
Loan balances	3
ACL Balance	$ 0

XML

Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation Of Revenue [Line Items]
TOTAL NONINTEREST INCOME	$ 9,449	$ 9,477	$ 19,874	$ 27,175
Service Charges on Deposit Accounts
Disaggregation Of Revenue [Line Items]
Noninterest income	1,501	1,139	2,933	2,284
Debit Card and EFT Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	1,810	1,528	3,599	2,944
Trust Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	2,248	2,376	4,835	4,895
Insurance Agency Commissions
Disaggregation Of Revenue [Line Items]
Noninterest income	1,332	1,086	2,788	2,133
Retirement Plan Consulting Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	382	323	689	720
Investment Commissions
Disaggregation Of Revenue [Line Items]
Noninterest income	476	557	869	1,251
Operating Segments
Disaggregation Of Revenue [Line Items]
TOTAL NONINTEREST INCOME	9,449	9,477	19,874	27,175
Operating Segments | Service Charges on Deposit Accounts
Disaggregation Of Revenue [Line Items]
Noninterest income	1,501	1,139	2,933	2,284
Operating Segments | Debit Card and EFT Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	1,810	1,528	3,599	2,944
Operating Segments | Trust Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	2,248	2,376	4,835	4,895
Operating Segments | Insurance Agency Commissions
Disaggregation Of Revenue [Line Items]
Noninterest income	1,332	1,086	2,788	2,133
Operating Segments | Retirement Plan Consulting Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	382	323	689	720
Operating Segments | Investment Commissions
Disaggregation Of Revenue [Line Items]
Noninterest income	476	557	869	1,251
Operating Segments | Other
Disaggregation Of Revenue [Line Items]
Other (outside the scope of ASC 606)	1,700	2,468	4,161	12,948
Operating Segments | Trust Segment
Disaggregation Of Revenue [Line Items]
TOTAL NONINTEREST INCOME	2,630	2,699	5,524	13,990
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	2,248	2,376	4,835	4,895
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	382	323	689	720
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	0	8,375
Operating Segments | Bank Segment
Disaggregation Of Revenue [Line Items]
TOTAL NONINTEREST INCOME	6,819	6,778	14,350	13,185
Operating Segments | Bank Segment | Service Charges on Deposit Accounts
Disaggregation Of Revenue [Line Items]
Noninterest income	1,501	1,139	2,933	2,284
Operating Segments | Bank Segment | Debit Card and EFT Fees
Disaggregation Of Revenue [Line Items]
Noninterest income	1,810	1,528	3,599	2,944
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	1,332	1,086	2,788	2,133
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	476	557	869	1,251
Operating Segments | Bank Segment | Other
Disaggregation Of Revenue [Line Items]
Other (outside the scope of ASC 606)	$ 1,700	$ 2,468	$ 4,161	$ 4,573

XML

Revenue from Contracts with Customers (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenue From Contract With Customer [Line Items]
Legal settlement	$ 0	$ 0	$ 0	$ 8,375,000
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			0.50%
Percentage of investment commissions representing total revenue			0.70%
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	Jun. 30, 2023	Dec. 31, 2022
Financial Assets
Securities available for sale	$ 1,316,878	$ 1,268,025
Fair Value, Measurements, Recurring
Financial Assets
Total investment securities	1,332,130	1,283,269
U.S. Treasury and U.S. government sponsored entities
Financial Assets
Securities available for sale	135,165	128,096
U.S. Treasury and U.S. government sponsored entities | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	135,165	128,096
State and political subdivisions
Financial Assets
Securities available for sale	543,062	530,080
State and political subdivisions | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	543,062	530,080
Corporate bonds
Financial Assets
Securities available for sale	17,632	3,879
Corporate bonds | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	17,632	3,879
Mortgage-backed securities - residential
Financial Assets
Securities available for sale	541,124	555,142
Mortgage-backed securities - residential | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	541,124	555,142
Collateralized mortgage obligations
Financial Assets
Securities available for sale	76,796	47,354
Collateralized mortgage obligations | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	76,796	47,354
Small Business Administration
Financial Assets
Securities available for sale	3,099	3,474
Small Business Administration | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	3,099	3,474
Equity securities at fair value | Fair Value, Measurements, Recurring
Financial Assets
Equity securities	218	196
Other investments measured at net asset value | Fair Value, Measurements, Recurring
Financial Assets
Equity securities	15,034	15,048
Mortgage banking derivative - asset | Fair Value, Measurements, Recurring
Financial Assets
Derivative Assets	14	31
Interest rate swaps | Fair Value, Measurements, Recurring
Financial Assets
Derivative Assets	$ 5,494	$ 5,503
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Other assets	Other assets
Financial Liabilities
Derivative liabilities	$ 5,494	$ 5,503
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Other liabilities	Other liabilities
Loans held for sale | Fair Value, Measurements, Recurring
Financial Assets
Derivative Assets	$ 2,197	$ 858
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring
Financial Assets
Total investment securities	218	196
Fair Value, Inputs, Level 1 [Member] | U.S. Treasury and U.S. government sponsored entities | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Fair Value, Inputs, Level 1 [Member] | State and political subdivisions | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Fair Value, Inputs, Level 1 [Member] | Corporate bonds | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Fair Value, Inputs, Level 1 [Member] | Mortgage-backed securities - residential | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Fair Value, Inputs, Level 1 [Member] | Collateralized mortgage obligations | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Fair Value, Inputs, Level 1 [Member] | Small Business Administration | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Fair Value, Inputs, Level 1 [Member] | Equity securities at fair value | Fair Value, Measurements, Recurring
Financial Assets
Equity securities	218	196
Fair Value, Inputs, Level 1 [Member] | Mortgage banking derivative - asset | Fair Value, Measurements, Recurring
Financial Assets
Derivative Assets	0	0
Fair Value, Inputs, Level 1 [Member] | Interest rate swaps | Fair Value, Measurements, Recurring
Financial Assets
Derivative Assets	0	0
Financial Liabilities
Derivative liabilities	0	0
Fair Value, Inputs, Level 1 [Member] | Loans held for sale | Fair Value, Measurements, Recurring
Financial Assets
Derivative Assets	0	0
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring
Financial Assets
Total investment securities	1,315,654	1,268,024
Fair Value, Inputs, Level 2 [Member] | U.S. Treasury and U.S. government sponsored entities | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	135,165	128,096
Fair Value, Inputs, Level 2 [Member] | State and political subdivisions | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	543,062	530,080
Fair Value, Inputs, Level 2 [Member] | Corporate bonds | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	16,409	3,879
Fair Value, Inputs, Level 2 [Member] | Mortgage-backed securities - residential | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	541,123	555,141
Fair Value, Inputs, Level 2 [Member] | Collateralized mortgage obligations | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	76,796	47,354
Fair Value, Inputs, Level 2 [Member] | Small Business Administration | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	3,099	3,474
Fair Value, Inputs, Level 2 [Member] | Equity securities at fair value | Fair Value, Measurements, Recurring
Financial Assets
Equity securities	0	0
Fair Value, Inputs, Level 2 [Member] | Mortgage banking derivative - asset | Fair Value, Measurements, Recurring
Financial Assets
Derivative Assets	14	31
Fair Value, Inputs, Level 2 [Member] | Interest rate swaps | Fair Value, Measurements, Recurring
Financial Assets
Derivative Assets	5,494	5,503
Financial Liabilities
Derivative liabilities	5,494	5,503
Fair Value, Inputs, Level 2 [Member] | Loans held for sale | Fair Value, Measurements, Recurring
Financial Assets
Derivative Assets	1,703	858
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring
Financial Assets
Total investment securities	1,224	1
Fair Value, Inputs, Level 3 [Member] | U.S. Treasury and U.S. government sponsored entities | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member] | State and political subdivisions | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member] | Corporate bonds | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	1,223	0
Fair Value, Inputs, Level 3 [Member] | Mortgage-backed securities - residential | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	1	1
Fair Value, Inputs, Level 3 [Member] | Collateralized mortgage obligations | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member] | Small Business Administration | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member] | Equity securities at fair value | Fair Value, Measurements, Recurring
Financial Assets
Equity securities	0	0
Fair Value, Inputs, Level 3 [Member] | Mortgage banking derivative - asset | Fair Value, Measurements, Recurring
Financial Assets
Derivative Assets	0	0
Fair Value, Inputs, Level 3 [Member] | Interest rate swaps | Fair Value, Measurements, Recurring
Financial Assets
Derivative Assets	0	0
Financial Liabilities
Derivative liabilities	0	0
Fair Value, Inputs, Level 3 [Member] | Loans held for sale | Fair Value, Measurements, Recurring
Financial Assets
Derivative Assets	$ 0	$ 0

XML

Fair Value (Details Textual) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
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
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	4,200	1,600
Collateral dependent loans, allowance	$ 878	$ 372

XML

Fair Value (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs
Beginning Balance	$ 1,616	$ 2	$ 1	$ 3
Transfers between levels	0	0	0	0
Acquired and/or purchased	0	0	1,615	0
Repayments, calls and maturities	(392)	0	(392)	(1)
Ending Balance	$ 1,224	$ 2	$ 1,224	$ 2

XML

Fair Value (Details 2) - Fair Value, Nonrecurring - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Commercial
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		$ 395
Commercial and industrial
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	$ 395
Residential Real Estate
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		74
Commercial real estate, Non-owner occupied
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	2,920	746
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) | Commercial and industrial
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
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	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) | Commercial and industrial
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
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	0
Significant Unobservable Inputs (Level 3) | Commercial
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		395
Significant Unobservable Inputs (Level 3) | Commercial and industrial
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	395
Significant Unobservable Inputs (Level 3) | Residential Real Estate
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		74
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	$ 2,920	$ 746

XML

Fair Value (Details 3) - Fair Value, Nonrecurring $ in Thousands	Jun. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Residential Real Estate
Fair value measurements for financial instruments
Recorded Investment		$ 74
Commercial
Fair value measurements for financial instruments
Recorded Investment		395
Sales Comparison Valuation | Commercial real estate
Fair value measurements for financial instruments
Recorded Investment	$ 2,920	$ 746
Sales Comparison Valuation | Commercial real estate | Minimum | Measurement Input, Comparability Adjustment
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	(0.6612)
Sales Comparison Valuation | Commercial real estate | Maximum | Measurement Input, Comparability Adjustment
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	0.4028
Sales Comparison Valuation | Commercial real estate | Weighted Average | Measurement Input, Comparability Adjustment
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	0.1588	0.0745
Sales Comparison Valuation | Residential Real Estate
Fair value measurements for financial instruments
Recorded Investment		$ 74
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		(0.1377)
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		(0.0568)
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		(0.1377)
Sales Comparison Valuation | Commercial
Fair value measurements for financial instruments
Recorded Investment	$ 395	$ 395
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	0.5055	0.4300

XML

Fair Value (Details 4) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financial assets
Cash and cash equivalents, Carrying Amount	$ 116,063	$ 75,551
Regulatory stock, Carrying Amount	29,723	18,200
Loans held for sale, Carrying Amount	2,197	858
Loans, net, Carrying Amount	3,120,243	2,377,772
Financial liabilities
Deposits, Carrying Amount	4,270,748	3,561,768
Short-term borrowings	300,000	95,000
Long-term borrowings	88,437	88,211
Fair Value, Measurements, Recurring
Financial assets
Cash and cash equivalents, Fair Value	116,063	75,551
Loans, net, Fair Value	2,985,702	2,330,164
Financial liabilities
Deposits, Fair Value	4,268,767	3,560,480
Short-term borrowings, Fair Value	300,000	95,000
Long-term borrowings, Fair Value	68,480	73,566
Fair Value, Measurements, Recurring | Level 1
Financial assets
Cash and cash equivalents, Fair Value	29,800	21,395
Loans, net, Fair Value	0	0
Financial liabilities
Deposits, Fair Value	3,589,251	2,999,188
Short-term borrowings, Fair Value	0	0
Long-term borrowings, Fair Value	0	0
Fair Value, Measurements, Recurring | Level 2
Financial assets
Cash and cash equivalents, Fair Value	86,263	54,156
Loans, net, Fair Value	0	0
Financial liabilities
Deposits, Fair Value	679,516	561,292
Short-term borrowings, Fair Value	300,000	95,000
Long-term borrowings, Fair Value	68,480	73,566
Fair Value, Measurements, Recurring | Level 3
Financial assets
Cash and cash equivalents, Fair Value	0	0
Loans, net, Fair Value	2,985,702	2,330,164
Financial liabilities
Deposits, Fair Value	0	0
Short-term borrowings, Fair Value	0	0
Long-term borrowings, Fair Value	$ 0	$ 0

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Goodwill and Intangible Assets (Details Textual) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill associated with the Company's purchases and other past acquisitions	$ 167,907		$ 167,907			$ 94,640
Goodwill impairment					$ 0
Aggregate amortization expense	$ 1,222	$ 419	$ 2,131	$ 839

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Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Acquired intangible assets
Gross Carrying Amount	$ 40,908	$ 21,659
Accumulated Amortization	(16,764)	(14,633)
Customer Relationships
Acquired intangible assets
Gross Carrying Amount	7,210	7,210
Accumulated Amortization	(6,873)	(6,793)
Non-compete contracts
Acquired intangible assets
Gross Carrying Amount	457	457
Accumulated Amortization	(407)	(401)
Trade Name
Acquired intangible assets
Gross Carrying Amount	1,126	1,126
Accumulated Amortization	(425)	(409)
Core Deposits
Acquired intangible assets
Gross Carrying Amount	32,115	12,866
Accumulated Amortization	$ (9,059)	$ (7,030)

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Goodwill and Intangible Assets (Details 1) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Finite Lived Intangible Assets Future Amortization Expense [Abstract]
2023 (6 months)	$ 1,450
2024	2,872
2025	2,806
2026	2,710
2027	2,596
Thereafter	11,710
Total	$ 24,144	$ 7,026

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Leases (Details Textual) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Jan. 01, 2023	Dec. 31, 2022
Lessee Lease Description [Line Items]
Financing leases options to extend [true false]			true
Financing leases options to terminate the lease			December of 2023
Financing lease, description			The Company has leases for branch office locations, vehicles and certain office equipment such as printers, copiers and faxes. These leases are categorized as either operating or financing. A majority of the leases are categorized as financing leases while a non material portion are categorized as operating. The leases have remaining lease terms of up to 18.1 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 December of 2023.
Finance lease, right-of-use asset	$ 9,100		$ 9,100		$ 1,300	$ 8,400
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Property, Plant and Equipment, Net		Property, Plant and Equipment, Net		Other Assets	Property, Plant and Equipment, Net
Finance lease, liability	$ 9,523		$ 9,523		$ 1,300	$ 8,800
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Other Liabilities		Other Liabilities		Other Liabilities	Other Liabilities
Finance lease, payments	$ 541	$ 217	$ 922	$ 454
Finance leases, interest expense	69	37	139	76
Finance leases, amortization expense	$ 270	$ 166	$ 540	$ 332
Weighted-average remaining lease term - finance leases	11 years 10 months 24 days		11 years 10 months 24 days
Weighted-average remaining lease term - operating leases	7 years 9 months 18 days		7 years 9 months 18 days
Weighted-average discount rate - finance leases	3.11%		3.11%
Weighted-average discount rate - operating leases	2.41%		2.41%
Maximum
Lessee Lease Description [Line Items]
Financing leases remaining lease terms	18 years 1 month 6 days		18 years 1 month 6 days
Financing leases options to extend			15 years

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Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Jan. 01, 2023	Dec. 31, 2022
Maturities of Finance Lease Liabilities
2023 (6 months)	$ 686
2024	1,176
2025	1,092
2026	975
2027	898
Thereafter	6,575
Total Payments	11,402
Less: Imputed Interest	(1,879)
Total	$ 9,523	$ 1,300	$ 8,800

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Derivative Financial Instruments (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Not Designated as Hedging Instrument | Interest Rate Lock Commitments
Derivative [Line Items]
Net Gain or Loss recognized in earnings	$ (52,000)	$ 34,000	$ 57,000	$ (252,000)
Derivative Assets	$ 5,900,000		$ 5,900,000		$ 4,900,000
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Other Mortgage Banking Income Loss Net	Other Mortgage Banking Income Loss Net	Other Mortgage Banking Income Loss Net	Other Mortgage Banking Income Loss Net
Not Designated as Hedging Instrument | Forward Sales of Mortgage Backed Securities
Derivative [Line Items]
Net Gain or Loss recognized in earnings	$ 71,000	$ (5,000)	$ (16,000)	$ (5,000)
Derivative Assets	7,000,000		7,000,000		4,300,000
Not Designated as Hedging Instrument | Forward Commitments for Future Residential Mortgage Loans
Derivative [Line Items]
Derivative Assets	139,000		139,000		0
Interest rate swaps
Derivative [Line Items]
Derivative notional amount	68,500,000		68,500,000		71,900,000
Fair value, other assets	5,500,000		5,500,000		5,500,000
Fair value, other liabilities	5,500,000		5,500,000		$ 5,500,000
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				6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Basic EPS
Net income	$ 14,966	$ 7,075	$ 15,951	$ 15,844	$ 22,041	$ 31,795
Weighted average shares outstanding	37,233,732		33,850,449		37,527,050	33,835,550
Basic earnings per share	$ 0.4		$ 0.47		$ 0.59	$ 0.94
Diluted EPS
Net income	$ 14,966	$ 7,075	$ 15,951	$ 15,844	$ 22,041	$ 31,795
Weighted average shares outstanding	37,233,732		33,850,449		37,527,050	33,835,550
Dilutive effect of restricted stock awards	86,721		72,395		96,822	91,796
Weighted average shares for diluted earnings per share	37,320,453		33,922,844		37,623,872	33,927,346
Diluted earnings per share	$ 0.4		$ 0.47		$ 0.59	$ 0.94

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Earnings Per Share (Details Textual) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Restricted Stock Awards
Earnings Per Share Basic [Line Items]
Anti-dilutive securities excluded from computation of earnings per share	174,309	188,626	170,809	158,492

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Stock Based Compensation (Details Textual) - 2022 Incentive Plan - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Apr. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares vested				58,375
Number of shares vested, weighted average fair value				$ 13.69
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		786,655		786,655
Stock based compensation expense		$ 649	$ 438	$ 1,300	$ 803
Unrecognized compensation expense		$ 4,000		$ 4,000
Compensation cost not yet recognized, period for recognition				2 years 8 months 12 days
Time Based Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share awards granted under equity incentive plan	54,095			54,095	101,768
Number of shares vested				27,740	20,771
Number of shares vested, weighted average fair value				$ 12.96	$ 16.81
Performance Based Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share awards granted under equity incentive plan				102,750	56,724
Number of shares vested				30,635	65,481
Number of shares vested, weighted average fair value				$ 14.35	$ 17.48

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Stock Based Compensation (Details) - 2022 Incentive Plan - $ / shares	1 Months Ended	6 Months Ended
	Apr. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vested, Maximum Awarded Units		(58,375)
Vested, Weighted Average Grant Date Fair Value		$ 13.69
Time Based Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Beginning balance - non-vested shares, Maximum Awarded Unit		193,015	99,564
Granted, Maximum Awarded Units	54,095	54,095	101,768
Vested, Maximum Awarded Units		(27,740)	(20,771)
Forfeited, Maximum Awarded Units		(1,541)	0
Ending balance - non-vested shares, Maximum Awarded Unit		217,829	180,561
Beginning balance - non-vested shares, Weighted Average Grant Date Fair Value		$ 16.69	$ 16.13
Granted, Weighted Average Grant Date Fair Value		13.12	17.05
Vested, Weighted Average Grant Date Fair Value		12.96	16.81
Forfeited, Weighted Average Grant Date Fair Value		17.64	0
Ending balance - non-vested shares, Weighted Average Grant Date Fair Value		$ 15.84	$ 16.92
Performance Based Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Beginning balance - non-vested shares, Maximum Awarded Unit		137,369	158,988
Granted, Maximum Awarded Units		102,750	56,724
Vested, Maximum Awarded Units		(30,635)	(65,481)
Forfeited, Maximum Awarded Units		0	(12,862)
Ending balance - non-vested shares, Maximum Awarded Unit		209,484	137,369
Beginning balance - non-vested shares, Weighted Average Grant Date Fair Value		$ 15.85	$ 14.4
Granted, Weighted Average Grant Date Fair Value		14.16	17.25
Vested, Weighted Average Grant Date Fair Value		14.35	17.48
Forfeited, Weighted Average Grant Date Fair Value		0	14.74
Ending balance - non-vested shares, Weighted Average Grant Date Fair Value		$ 15.01	$ 15.85

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Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands		3 Months Ended				6 Months Ended
		Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Unrealized holding gains (losses) on available-for-sale securities during the period, pre-tax		$ (21,309)		$ (105,497)		$ 21,591	$ (217,894)
Reclassification adjustment for gains (losses) included in net income, pre-tax	[1]	0		31		(120)	31
Net unrealized holding (losses) gains		(21,309)		(105,466)		21,471	(217,863)
Change in funded status of post-retirement health plan, pre-tax				(2)			(3)
Net other comprehensive income (loss), pre-tax		(21,309)		(105,468)		21,471	(217,866)
Unrealized holding gains (losses) on available-for-sale securities during the period, tax		4,475		22,154		(4,534)	45,758
Reclassification adjustment for gains (losses) included in net income, tax	[1]	0		(6)		25	(7)
Net unrealized gains on available-for-sale securities, tax		4,475		22,148		(4,509)	45,751
Change in funded status of post-retirement health plan, tax				0			0
Net other comprehensive income (loss), tax		4,475		22,148		(4,509)	45,751
Unrealized holding gains (losses) on available-for-sale securities during the period, after-tax		(16,834)		(83,343)		17,057	(172,136)
Reclassification adjustment for gains (losses) included in net income, after-tax	[1]	0		25		(95)	24
Unrealized holding (losses) gains, net of reclassification and tax		(16,834)		(83,318)		16,962	(172,112)
Change in funded status of post-retirement plan, net of tax		0		(2)		0	(3)
Other comprehensive (loss) income, net of tax		$ (16,834)	$ 33,796	$ (83,320)	$ (88,795)	$ 16,962	$ (172,115)

[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)	Jun. 30, 2023	Dec. 31, 2022
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	Jun. 30, 2023	Dec. 31, 2022
Common equity tier 1 capital ratio
Actual, Amount	$ 374,278	$ 403,307
Actual, Ratio	10.25%	13.71%
Requirement for Capital Adequacy Purposes, Amount	$ 164,288	$ 132,349
Requirement for Capital Adequacy Purposes, Ratio	4.50%	4.50%
Total risk based capital ratio
Actual, Amount	$ 502,235	$ 523,285
Actual, Ratio	0.1376	0.1779
Requirement for Capital Adequacy Purposes, Amount	$ 292,068	$ 235,288
Requirement for Capital Adequacy Purposes, Ratio	0.080	0.080
Tier 1 risk based capital ratio
Actual, Amount	$ 392,278	$ 421,307
Actual, Ratio	0.1074	0.1432
Requirement for Capital Adequacy Purposes, Amount	$ 219,051	$ 176,466
Requirement for Capital Adequacy Purposes, Ratio	0.060	0.060
Tier 1 leverage ratio
Actual, Amount	$ 392,278	$ 421,307
Actual, Ratio	0.0768	0.0984
Requirement for Capital Adequacy Purposes, Amount	$ 204,281	$ 171,233
Requirement for Capital Adequacy Purposes, Ratio	0.040	0.040
Farmers National Banc Corp
Common equity tier 1 capital ratio
Actual, Amount	$ 391,584	$ 372,679
Actual, Ratio	10.75%	12.71%
Requirement for Capital Adequacy Purposes, Amount	$ 163,977	$ 131,968
Requirement for Capital Adequacy Purposes, Ratio	4.50%	4.50%
To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 236,855	$ 190,620
To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	6.50%	6.50%
Total risk based capital ratio
Actual, Amount	$ 426,541	$ 399,657
Actual, Ratio	0.1171	0.1362
Requirement for Capital Adequacy Purposes, Amount	$ 291,514	$ 234,609
Requirement for Capital Adequacy Purposes, Ratio	0.080	0.080
To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 364,393	$ 293,262
To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	0.10	0.100
Tier 1 risk based capital ratio
Actual, Amount	$ 391,584	$ 372,679
Actual, Ratio	0.1075	0.1271
Requirement for Capital Adequacy Purposes, Amount	$ 218,636	$ 175,957
Requirement for Capital Adequacy Purposes, Ratio	0.060	0.060
To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 291,514	$ 234,609
To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	0.08	0.080
Tier 1 leverage ratio
Actual, Amount	$ 391,584	$ 372,679
Actual, Ratio	0.077	0.0876
Requirement for Capital Adequacy Purposes, Amount	$ 203,408	$ 170,245
Requirement for Capital Adequacy Purposes, Ratio	0.040	0.040
To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 254,261	$ 212,807
To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	0.05	0.05

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Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Segment Reporting Information [Line Items]
Goodwill and other intangibles	$ 192,051				$ 192,051		$ 101,666
Total assets	5,073,454				5,073,454		4,082,200
Net interest income	34,578		$ 31,711		71,188	$ 62,953
Provision for credit losses and unfunded loans	25		616		8,624	258
Service fees, security gains and other noninterest income	9,449		9,477		19,874	27,175
Noninterest expense	24,185		20,282		53,008	49,576
Amortization and depreciation expense	2,201		1,179		4,100	2,341
INCOME BEFORE INCOME TAXES	17,616		19,111		25,330	37,953
Income taxes	2,650		3,160		3,289	6,158
NET INCOME	14,966	$ 7,075	15,951	$ 15,844	22,041	31,795
Eliminations And Others
Segment Reporting Information [Line Items]
Goodwill and other intangibles	(4,263)				(4,263)		(4,263)
Total assets	5,297				5,297		3,705
Net interest income	(955)		(813)		(1,910)	(1,598)
Provision for credit losses and unfunded loans	0		0		0	0
Service fees, security gains and other noninterest income	(386)		32		(617)	(209)
Noninterest expense	475		494		1,120	577
Amortization and depreciation expense	112		113		226	227
INCOME BEFORE INCOME TAXES	(1,928)		(1,388)		(3,873)	(2,611)
Income taxes	(430)		(364)		(909)	(662)
NET INCOME	(1,498)		(1,024)		(2,964)	(1,949)
Trust Segment | Operating Segments
Segment Reporting Information [Line Items]
Goodwill and other intangibles	5,709				5,709		5,739
Total assets	17,610				17,610		14,383
Net interest income	57		38		114	72
Provision for credit losses and unfunded loans	0		0		0	0
Service fees, security gains and other noninterest income	2,668		4,839		5,568	14,037
Noninterest expense	1,654		3,614		3,297	5,383
Amortization and depreciation expense	23		28		46	56
INCOME BEFORE INCOME TAXES	1,048		1,235		2,339	8,670
Income taxes	221		258		492	1,820
NET INCOME	827		977		1,847	6,850
Bank Segment | Operating Segments
Segment Reporting Information [Line Items]
Goodwill and other intangibles	190,605				190,605		100,190
Total assets	5,050,547				5,050,547		$ 4,064,112
Net interest income	35,476		32,486		72,984	64,479
Provision for credit losses and unfunded loans	25		616		8,624	258
Service fees, security gains and other noninterest income	7,167		4,606		14,923	13,347
Noninterest expense	22,056		16,174		48,591	43,616
Amortization and depreciation expense	2,066		1,038		3,828	2,058
INCOME BEFORE INCOME TAXES	18,496		19,264		26,864	31,894
Income taxes	2,859		3,266		3,706	5,000
NET INCOME	$ 15,637		$ 15,998		$ 23,158	$ 26,894

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Short-term borrowings (Details Textual)	6 Months Ended
	Jun. 30, 2023 USD ($) Bank	Dec. 31, 2022 USD ($)
Domestic Line of Credit
Short Term Debt [Line Items]
Access to lines of credit at domestic banks	$ 35,000,000.0
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	$ 300,000,000	$ 95,000,000
Interest rate on borrowings	5.17%	4.38%

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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	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Long-rem advances from FHLB					$ 0	$ 0
Residential mortgage, commercial real estate, and multi-family loans					1,700,000,000	$ 1,200,000,000
Additional borrowing limit					$ 707,800,000
Subordinated Notes
Debt Instrument [Line Items]
Aggregate principal amount				$ 75,000,000
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
Acquisition-date fair value	$ 4,300,000
Interest rate, effective percentage					7.00%	6.22%
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					7.35%	6.57%
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					7.25%	6.47%
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	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Total junior subordinated debentures owed to unconsolidated subsidiary trusts	$ 14,480	$ 14,316
Subordinated Debentures	73,957	73,895
Total long-term borrowings	88,437	88,211
TSEO Statutory Trust I
Debt Instrument [Line Items]
Total junior subordinated debentures owed to unconsolidated subsidiary trusts	2,497	2,472
Maple Leaf Financial Statutory Trust II
Debt Instrument [Line Items]
Total junior subordinated debentures owed to unconsolidated subsidiary trusts	7,629	7,517
Cortland Statutory Trust I
Debt Instrument [Line Items]
Total junior subordinated debentures owed to unconsolidated subsidiary trusts	$ 4,354	$ 4,327