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Shareholders' Equity
 12 Months Ended
Dec. 31, 2022
Stockholders' Equity Note [Abstract]  
Shareholders' Equity Shareholders’ Equity
Banks and bank holding companies are subject to regulatory capital requirements administered by 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. The current risk-based capital rules, as adopted by federal banking regulators, are based upon guidelines developed by the Basel Committee on Banking Supervision and reflect various requirements of the Dodd-Frank Act (the “Basel III Rules”). The Basel III Rules require banking organizations to, among other things, maintain a minimum ratio of Total Capital to risk-weighted assets, a minimum ratio of Tier 1 Capital to risk-weighted assets, a minimum ratio of “Common Equity

Tier 1 Capital” to risk-weighted assets, and a minimum leverage ratio (calculated as the ratio of Tier 1 Capital to adjusted average consolidated assets). In addition, under the Basel III Rules, in order to avoid limitations on capital distributions, including dividend payments, the Company is required to maintain a 2.5% capital conservation buffer above the adequately capitalized regulatory capital ratios. The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital. At December 31, 2022, the Company and Bank meet all capital adequacy requirements to which they are subject.

Prompt corrective action regulations provide five classifications, including well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At year end 2022 and 2021, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.
At December 31, 2022, consolidated and bank actual capital and minimum required levels are presented below:
 Actual:Minimum Required For Capital Adequacy Purposes:Minimum Required To Be Well-Capitalized Under Prompt Corrective Action Regulations:
 AmountRatioAmountRatio ⁽¹⁾AmountRatio
Total Capital (to Risk Weighted Assets)      
Consolidated$747,542 15.45 %$387,024 8.00 %N/AN/A
Bank680,695 14.07 386,959 8.00 $483,698 10.00 %
Tier 1 (Core) Capital (to Risk Weighted Assets)
Consolidated$676,068 13.97 %$290,268 6.00 %N/AN/A
Bank649,221 13.42 290,219 6.00 $386,959 8.00 %
Common Tier 1 (CET 1) Capital Ratio (to Risk Weighted Assets)
Consolidated$641,690 13.26 %$217,701 4.50 %N/AN/A
Bank649,221 13.42 217,664 4.50 $314,404 6.50 %
Tier 1 (Core) Capital (to Average Assets)
Consolidated$676,068 10.50 %$257,622 4.00 %N/AN/A
Bank649,221 10.09 257,341 4.00 $321,677 5.00 %
(1) Excludes 2.5% capital conservation buffer.

At December 31, 2021, consolidated and bank actual capital and minimum required levels are presented below:
 Actual:Minimum Required For Capital Adequacy Purposes:Minimum Required To Be Well-Capitalized Under Prompt Corrective Action Regulations:
 AmountRatioAmountRatio ⁽¹⁾AmountRatio
Total Capital (to Risk Weighted Assets)      
Consolidated$611,624 16.20 %$302,060 8.00 %N/AN/A
Bank503,549 13.36 301,495 8.00 $376,868 10.00 %
Tier 1 (Core) Capital (to Risk Weighted Assets)
Consolidated$551,532 14.61 %$226,545 6.00 %N/AN/A
Bank483,457 12.83 226,121 6.00 $301,495 8.00 %
Common Tier 1 (CET 1) Capital Ratio (to Risk Weighted Assets)
Consolidated$535,451 14.18 %$169,909 4.50 %N/AN/A
Bank483,457 12.83 169,591 4.50 $244,964 6.50 %
Tier 1 (Core) Capital (to Average Assets)
Consolidated$551,532 10.10 %$218,352 4.00 %N/AN/A
Bank483,457 8.88 217,839 4.00 $272,299 5.00 %
(1) Excludes 2.5% capital conservation buffer.

The Company and the Bank at year end 2022 and 2021 were categorized as well-capitalized. There have been no conditions or events that management believes has changed the classification of the Bank under the prompt corrective action regulations since the last notification from regulators. Regulations require the maintenance of certain capital levels at the Bank, and may limit the
dividends payable by the affiliate to the holding company, or by the holding company to its shareholders. At December 31, 2022 the Bank had approximately $125,000 in retained earnings available for payment of dividends to the parent company without prior regulatory approval.
 
In December 2018, federal banking regulators approved a final rule to address changes to credit loss accounting under GAAP, including banking organizations’ implementation of CECL. The final rule provides banking organizations the option to phase in over a three-year period the day-one adverse effects on regulatory capital that may result from the adoption of the new accounting standard. On March 27, 2020, in an action related to the CARES Act, the federal banking regulators announced an interim final rule to delay the estimated impact on regulatory capital stemming from the implementation of CECL. The interim final rule, which was finalized effective September 30, 2020, maintained the three-year transition option in the previous rule and provided banks the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period (five-year transition option). The Company has taken advantage of the capital transition relief over the permissible five-year period and began the three-year phase-in of the regulatory impact effective January 1, 2022.

Equity Plans and Equity Based Compensation
 
During the periods presented, the Company maintained two equity incentive plans under which stock options, restricted stock, and other equity incentive awards could be granted. Those plans include (i) the Company’s 2009 Long-Term Equity Incentive Plan, under which no new grants may be made, and (ii) the Company’s 2019 Long-Term Equity Incentive Plan (the “2019 LTI Plan”). The 2019 LTI Plan, which authorizes a maximum aggregate issuance of 1,000,000 shares of common stock (subject to certain permitted adjustments), became effective on May 16, 2019, following approval of the Company’s shareholders. It will remain in effect until May 16, 2029, or until all shares of common stock subject to the 2019 LTI Plan are distributed, all awards have expired or terminated, or the plan is terminated pursuant to its terms, whichever occurs first.

Stock Options

Options may be designated as incentive stock options or as nonqualified stock options. While the date after which options are first exercisable is determined by the appropriate committee of the Board of Directors of the Company or, in the case of options granted to directors, by the Board of Directors, no stock option may be exercised after ten years from the date of grant (twenty years in the case of nonqualified stock options). The exercise price of stock options granted pursuant to the plans must be no less than the market value of the Common Stock on the date of the grant.
 
The plans authorize an optionee to pay the exercise price of options in cash or in common shares of the Company or in some combination of cash and common shares. An optionee may tender already-owned common shares to the Company in exercise of an option. Certain of these plans authorize an optionee to surrender the value of an unexercised option in payment of an equivalent amount of the exercise price of the option. The Company typically issues authorized but unissued common shares upon the exercise of options.
 
The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the market price of common stock as of the reporting date. 

During 2022, 2021 and 2020, the Company granted no options, and recorded no stock compensation expense related to option grants. The Company recorded no other stock compensation expense applicable to options during the years ended December 31, 2022, 2021 and 2020.
Restricted Stock

During the periods presented, awards of long-term incentives were granted in the form of restricted stock. In 2019 and prior, awards that were granted to management and selected other employees under the Company’s management incentive plan were granted in tandem with cash credit entitlements in the form of 60% restricted stock grants and 40% cash credit entitlements. In 2020, awards granted under the management incentive plan were granted in tandem with cash credit entitlements in the form of 66.67% restricted stock grants and 33.33% cash credit entitlements. In 2019 and prior, the restricted stock grants and tandem cash credit entitlements, generally, vested in three annual installments of 33.3% each. In 2020, 100% of the cash portion of an award vests towards the end of the year in which the grant was made, followed by the restricted stock grants vesting 50% in each of the 2nd and 3rd years. Beginning in 2021, for named executive officers, awards are granted in the form of 100% restricted stock grants which will vest in one-third installments on the first, second and third anniversaries of the award date. Awards that are granted to directors as additional retainers for their services do not include any cash credit entitlement. These director restricted stock grants are subject to forfeiture in the event that the recipient of the grant does not continue in service as a director of the Company through December 31 of the year after grant or does not satisfy certain meeting attendance requirements, at which time they generally vest 100 percent. For measuring compensation costs, restricted stock awards are valued based upon the market value of the common shares on the date of grant.

The following table presents expense recorded for restricted stock and cash entitlements as well as the related tax effect for the years ended 2022, 2021, and 2020:
 202220212020
Restricted Stock Expense$2,308 $1,692 $1,051 
Cash Entitlement Expense646 732 995 
Tax Effect(766)(629)(531)
Net of Tax$2,188 $1,795 $1,515 
Unrecognized expense associated with the restricted stock grants and cash entitlements totaled $2,781, $2,497, and $2,046 as of December 31, 2022, 2021, and 2020, respectively.

The following table presents information on restricted stock grants outstanding for the period shown:
Year Ended
December 31, 2022
Restricted
Shares		Weighted
Average Market
Price at Grant
Outstanding at Beginning of Period67,160 $41.06 
Granted74,020 39.27 
Issued and Vested(60,997)39.03 
Forfeited(5,310)39.52 
Outstanding at End of Period74,873 41.05 
 
Employee Stock Purchase Plan
 
The Company’s shareholders approved the Company’s 2019 Employee Stock Purchase Plan on May 16, 2019, as well as an Amended and Restated 2019 Employee Stock Purchase Plan on May 21, 2020, which was amended and restated to reflect certain clarifying changes (the “2019 ESPP”). The 2019 ESPP replaced the Company’s 2009 Employee Stock Purchase Plan, which expired by its own terms on August 16, 2019. The 2019 ESPP provides for a series of 3-month offering periods, commencing on the first day and ending on the last trading day of each calendar quarter, for the purchase of the Company’s common stock by participating employees. The purchase price of the shares has been set at 95% of the fair market value of the Company’s common stock on the last trading day of the offering period. A total of 750,000 common shares has been reserved for issuance under the 2019 ESPP. The 2019 ESPP will continue until September 30, 2029, or, if earlier, until all of the shares of common stock allocated to the 2019 ESPP have been purchased. Funding for the purchase of common stock is from employee and Company contributions.
 
In 2022, the Company recorded $53 of expense, $39 net of tax, for the employee stock purchase plan. In 2021, the Company recorded $45 of expense, $34 net of tax, for the employee stock purchase plan. In 2020, the Company recorded $40 of expense,
$30 net of tax, for the employee stock purchase plan. There was no unrecognized compensation expense as of December 31, 2022, 2021 and 2020 for the Employee Stock Purchase Plans.
 
Stock Repurchase Plan

On January 25, 2021, the Company’s Board of Directors approved a plan to repurchase up to one million shares of the Company’s outstanding common stock. On a share basis, the amount of common stock subject to the repurchase plan represented approximately 4% of the Company’s outstanding shares at the time it was adopted. During 2021, the Company did not repurchase any of its outstanding common stock. The 2021 plan replaced a similar share repurchase plan approved by the Company’s Board of Directors on January 27, 2020. At the time of its termination in 2021, the Company had repurchased 221,912 shares of common stock under the 2020 plan.

On January 31, 2022, the Company’s Board of Directors terminated the 2021 repurchase plan and approved a new plan to repurchase up to one million shares of the Company’s outstanding common stock. On a share basis, the amount of common stock subject to the new repurchase plan represented approximately 3% of the Company’s outstanding shares on the date it was approved. The Company is not obligated to purchase shares under the plan, and the plan may be discontinued at any time. The actual timing, number and share price of shares purchased under the repurchase plan will be determined by the Company at its discretion and will depend upon such factors as the market price of the stock, general market and economic conditions and applicable legal requirements.

In August 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted. Among other things, the IRA imposes a new 1% excise tax on the fair market value of stock repurchased after December 31, 2022 by publicly traded U.S. corporations, like the Company. With certain exceptions, the value of stock repurchased is determined net of stock issued in the year, including shares issued pursuant to compensatory arrangements.