(State of incorporation) | (I.R.S. Employer Identification No.) |
(Title of class) | (Trading symbol) | (Name of each exchange on which registered) |
☒ | Accelerated filer [ ] | Non-accelerated filer [ ] | Smaller reporting company | Emerging growth company |
Page Number | ||||||||
2021 | 2020 | ||||||||||||||||||||||||||||||||||
High* | Low* | Cash Dividend | High* | Low* | Cash Dividend | ||||||||||||||||||||||||||||||
Fourth quarter | $ | 80.77 | $ | 69.51 | $ | 0.34 | $ | 56.28 | $ | 40.57 | $ | 0.30 | |||||||||||||||||||||||
Third quarter | $ | 73.04 | $ | 56.06 | $ | 0.34 | $ | 53.00 | $ | 39.38 | $ | 0.30 | |||||||||||||||||||||||
Second quarter | $ | 70.25 | $ | 57.02 | $ | 0.34 | $ | 47.49 | $ | 33.92 | $ | 0.30 | |||||||||||||||||||||||
First quarter | $ | 77.05 | $ | 53.02 | $ | 0.34 | $ | 49.85 | $ | 30.49 | $ | 0.30 |
Plan category | Number of securities to be issued upon exercise of outstanding options | Weighted-average exercise price of outstanding options | Number of securities remaining available for future issuance under equity compensation plans | ||||||||||||||
Equity compensation plans approved by security holders(1) | 0 | $ | 0 | 454,308 | |||||||||||||
Equity compensation plans not approved by security holders | 0 | 0 | 0 | ||||||||||||||
Total | 0 | $ | 0 | 454,308 |
Lakeland Financial Corporation |
Period Ending | |||||||||||||||||||||||||||||||||||
Index | 12/31/16 | 12/31/17 | 12/31/18 | 12/31/19 | 12/31/20 | 12/31/21 | |||||||||||||||||||||||||||||
Lakeland Financial Corporation | 100.00 | 104.31 | 88.23 | 110.29 | 124.13 | 189.58 | |||||||||||||||||||||||||||||
NASDAQ Composite Index | 100.00 | 129.34 | 125.96 | 172.18 | 249.51 | 304.85 | |||||||||||||||||||||||||||||
SNL U.S. Bank NASDAQ Index | 100.00 | 118.59 | 97.58 | 132.84 | 119.14 | 164.80 | |||||||||||||||||||||||||||||
S&P U.S. BMI Banks Index | 100.00 | 118.21 | 98.75 | 135.64 | 118.33 | 160.89 |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Appropriate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs | |||||||||||||||||||
10/01/21 - 10/31/21 | 0 | $ | 0.00 | 0 | $ | 30,000,000 | |||||||||||||||||
11/01/21 - 11/30/21 | 861 | 73.76 | 0 | 30,000,000 | |||||||||||||||||||
12/01/21 - 12/31/21 | 0 | 0.00 | 0 | 30,000,000 | |||||||||||||||||||
Total | 861 | $ | 73.76 | 0 | $ | 30,000,000 |
(dollars in thousands) | 2021 | 2020 | 2019 | ||||||||||||||
Income Statement Summary: | |||||||||||||||||
Net interest income | $ | 178,088 | $ | 163,008 | $ | 155,047 | |||||||||||
Provision for credit losses | 1,077 | 14,770 | 3,235 | ||||||||||||||
Noninterest income | 44,720 | 46,843 | 44,997 | ||||||||||||||
Noninterest expense | 104,287 | 91,205 | 89,424 | ||||||||||||||
Other Data: | |||||||||||||||||
Efficiency ratio (1) | 46.81 | % | 43.46 | % | 44.70 | % | |||||||||||
Dilutive EPS | $ | 3.74 | $ | 3.30 | $ | 3.38 | |||||||||||
Total equity | $ | 704,906 | $ | 657,184 | $ | 598,100 | |||||||||||
Tangible capital ratio (2) | 10.70 | % | 11.21 | % | 12.02 | % | |||||||||||
Net charge-offs (recoveries) to average loans | 0.09 | % | 0.09 | % | 0.03 | % | |||||||||||
Net interest margin | 3.07 | % | 3.19 | % | 3.38 | % | |||||||||||
Net interest margin excluding PPP loans (3) | 2.95 | % | 3.19 | % | 3.38 | % | |||||||||||
Noninterest income to total revenue | 20.07 | % | 22.32 | % | 22.49 | % | |||||||||||
Pretax Pre-Provision Earnings (4) | $ | 118,521 | $ | 118,646 | $ | 110,620 |
Year Ended | |||||||||||||||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |||||||||||||||
Total Equity | $ | 704,906 | $ | 657,184 | $ | 598,100 | |||||||||||
Less: Goodwill | (4,970) | (4,970) | (4,970) | ||||||||||||||
Plus: Deferred tax assets related to goodwill | 1,176 | 1,176 | 1,181 | ||||||||||||||
Tangible Common Equity | 701,112 | 653,390 | 594,311 | ||||||||||||||
Assets | $ | 6,557,323 | $ | 5,830,435 | $ | 4,946,745 | |||||||||||
Less: Goodwill | (4,970) | (4,970) | (4,970) | ||||||||||||||
Plus: Deferred tax assets related to goodwill | 1,176 | 1,176 | 1,181 | ||||||||||||||
Tangible Assets | 6,553,529 | 5,826,641 | 4,942,956 | ||||||||||||||
Ending Common Shares Issued | 25,488,508 | 25,424,307 | 25,623,016 | ||||||||||||||
Tangible Book Value Per Common Share | $ | 27.50 | $ | 25.70 | $ | 23.19 | |||||||||||
Tangible Capital Ratio | 10.70 | % | 11.21 | % | 12.02 | % | |||||||||||
Net Interest Income | $ | 178,088 | $ | 163,008 | $ | 155,047 | |||||||||||
Plus: Noninterest income | 44,720 | 46,843 | 44,997 | ||||||||||||||
Minus: Noninterest expense | (104,287) | (91,205) | (89,424) | ||||||||||||||
Pretax Pre-Provision Earnings | $ | 118,521 | $ | 118,646 | $ | 110,620 |
Year Ended | |||||||||||||||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |||||||||||||||
Total Average Earnings Assets | $ | 5,906,640 | $ | 5,184,836 | $ | 4,656,707 | |||||||||||
Less: Average Balance of PPP Loans | (237,951) | (376,785) | 0 | ||||||||||||||
Total Adjusted Earning Assets | 5,668,689 | 4,808,051 | 4,656,707 | ||||||||||||||
Total Interest Income FTE | $ | 196,806 | $ | 195,549 | $ | 217,339 | |||||||||||
Less: PPP Loan Income | (14,945) | (12,832) | 0 | ||||||||||||||
Total Adjusted Interest Income FTE | 181,861 | 182,717 | 217,339 | ||||||||||||||
Adjusted Earning Asset Yield, net of PPP Impact | 3.21 | % | 3.80 | % | 4.67 | % | |||||||||||
Total Average Interest Bearing Liabilities | $ | 3,761,520 | $ | 3,437,338 | $ | 3,390,512 | |||||||||||
Less: Average Balance of PPP Loans | (237,951) | (376,785) | 0 | ||||||||||||||
Total Adjusted Interest Bearing Liabilities | 3,523,569 | $ | 3,060,553 | $ | 3,390,512 | ||||||||||||
Total Interest Expense FTE | $ | 15,131 | $ | 30,095 | $ | 60,163 | |||||||||||
Less: PPP Cost of Funds | (595) | (956) | 0 | ||||||||||||||
Total Adjusted Interest Expense FTE | 14,536 | 29,139 | 60,163 | ||||||||||||||
Adjusted Cost of Funds, net of PPP Impact | 0.26 | % | 0.61 | % | 1.29 | % | |||||||||||
Net Interest Margin FTE, net of PPP Impact | 2.95 | % | 3.19 | % | 3.38 | % |
2021 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||
(fully tax equivalent basis, dollars in thousands) | Average Balance | Interest Income | Yield (1)/ Rate | Average Balance | Interest Income | Yield (1)/ Rate | Average Balance | Interest Income | Yield (1)/ Rate | ||||||||||||||||||||||||||||||||||||||||||||
Earning Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Taxable (1)(2) | $ | 4,406,456 | $ | 170,081 | 3.86 | % | $ | 4,405,994 | $ | 176,538 | 4.01 | % | $ | 3,950,130 | $ | 196,733 | 4.98 | % | |||||||||||||||||||||||||||||||||||
Tax exempt (3) | 14,638 | 594 | 4.06 | 18,478 | 813 | 4.40 | 24,402 | 1,186 | 4.86 | ||||||||||||||||||||||||||||||||||||||||||||
Investments: (3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale | 1,068,325 | 25,582 | 2.39 | 633,956 | 17,830 | 2.81 | 603,580 | 17,930 | 2.97 | ||||||||||||||||||||||||||||||||||||||||||||
Short-term investments | 2,254 | 2 | 0.09 | 25,046 | 67 | 0.27 | 18,771 | 339 | 1.81 | ||||||||||||||||||||||||||||||||||||||||||||
Interest bearing deposits | 414,967 | 547 | 0.13 | 101,362 | 301 | 0.30 | 59,824 | 1,151 | 1.92 | ||||||||||||||||||||||||||||||||||||||||||||
Total earning assets | $ | 5,906,640 | $ | 196,806 | 3.33 | % | $ | 5,184,836 | $ | 195,549 | 3.77 | % | $ | 4,656,707 | $ | 217,339 | 4.67 | % | |||||||||||||||||||||||||||||||||||
Less: Allowance for credit losses | (72,083) | (56,824) | (50,062) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Nonearning Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and due from banks | 70,035 | 62,242 | 119,450 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Premises and equipment | 59,667 | 60,492 | 59,147 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other nonearning assets | 189,521 | 174,050 | 156,662 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 6,153,780 | $ | 5,424,796 | $ | 4,941,904 | |||||||||||||||||||||||||||||||||||||||||||||||
Interest Bearing Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Savings deposits | $ | 360,915 | $ | 278 | 0.08 | % | $ | 270,010 | $ | 219 | 0.08 | % | $ | 240,293 | $ | 260 | 0.11 | % | |||||||||||||||||||||||||||||||||||
Interest bearing checking accounts | 2,392,220 | 6,759 | 0.28 | 1,862,077 | 9,268 | 0.50 | 1,669,045 | 26,006 | 1.56 | ||||||||||||||||||||||||||||||||||||||||||||
Time deposits: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
In denominations under $100,000 | 218,624 | 2,038 | 0.93 | 262,040 | 4,361 | 1.66 | 277,896 | 5,337 | 1.92 | ||||||||||||||||||||||||||||||||||||||||||||
In denominations over $100,000 | 714,353 | 5,752 | 0.81 | 946,569 | 15,494 | 1.64 | 1,111,172 | 25,545 | 2.30 | ||||||||||||||||||||||||||||||||||||||||||||
Miscellaneous short-term borrowings | 408 | 7 | 1.72 | 34,347 | 506 | 1.47 | 61,347 | 1,311 | 2.14 | ||||||||||||||||||||||||||||||||||||||||||||
Long-term borrowings and subordinated debentures | 75,000 | 297 | 0.40 | 62,295 | 247 | 0.40 | 30,759 | 1,704 | 5.54 | ||||||||||||||||||||||||||||||||||||||||||||
Total interest bearing liabilities | $ | 3,761,520 | $ | 15,131 | 0.40 | % | $ | 3,437,338 | $ | 30,095 | 0.88 | % | $ | 3,390,512 | $ | 60,163 | 1.77 | % | |||||||||||||||||||||||||||||||||||
Noninterest Bearing Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Demand deposits | 1,671,172 | 1,309,901 | 944,118 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other liabilities | 46,451 | 53,384 | 44,673 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | 674,637 | 624,173 | 562,601 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 6,153,780 | $ | 5,424,796 | $ | 4,941,904 | |||||||||||||||||||||||||||||||||||||||||||||||
Interest Margin Recap | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest income/average earning assets | 196,806 | 3.33 | 195,549 | 3.77 | 217,339 | 4.67 | |||||||||||||||||||||||||||||||||||||||||||||||
Interest expense/average earning assets | 15,131 | 0.26 | 30,095 | 0.58 | 60,163 | 1.29 | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest income and margin | $ | 181,675 | 3.07 | % | $ | 165,454 | 3.19 | % | $ | 157,176 | 3.38 | % |
2021 Over (Under) 2020 (1) | 2020 Over (Under) 2019 (1) | ||||||||||||||||||||||||||||||||||
Attributable to | Total Change | Attributable to | Total Change | ||||||||||||||||||||||||||||||||
Volume | Rate | Volume | Rate | ||||||||||||||||||||||||||||||||
Interest Income (2) | |||||||||||||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||
Taxable | $ | 18 | $ | (6,475) | $ | (6,457) | $ | 21,056 | $ | (41,251) | $ | (20,195) | |||||||||||||||||||||||
Tax exempt | (158) | (61) | (219) | (268) | (105) | (373) | |||||||||||||||||||||||||||||
Investments: | |||||||||||||||||||||||||||||||||||
Available-for-sale | 10,724 | (2,972) | 7,752 | 879 | (979) | (100) | |||||||||||||||||||||||||||||
Short-term investments | (37) | (28) | (65) | 86 | (358) | (272) | |||||||||||||||||||||||||||||
Interest bearing deposits | 493 | (247) | 246 | 494 | (1,344) | (850) | |||||||||||||||||||||||||||||
Total interest income | 11,040 | (9,783) | 1,257 | 22,247 | (44,037) | (21,790) | |||||||||||||||||||||||||||||
Interest Expense | |||||||||||||||||||||||||||||||||||
Savings deposits | 71 | (12) | 59 | 29 | (70) | (41) | |||||||||||||||||||||||||||||
Interest bearing checking accounts | 2,186 | (4,695) | (2,509) | 2,710 | (19,448) | (16,738) | |||||||||||||||||||||||||||||
Time deposits: | |||||||||||||||||||||||||||||||||||
In denominations under $100,000 | (636) | (1,687) | (2,323) | (292) | (684) | (976) | |||||||||||||||||||||||||||||
In denominations over $100,000 | (3,172) | (6,570) | (9,742) | (3,414) | (6,637) | (10,051) | |||||||||||||||||||||||||||||
Miscellaneous short-term borrowings | (571) | 72 | (499) | (472) | (333) | (805) | |||||||||||||||||||||||||||||
Long-term borrowings and | |||||||||||||||||||||||||||||||||||
subordinated debentures | 50 | 0 | 50 | 896 | (2,353) | (1,457) | |||||||||||||||||||||||||||||
Total interest expense | (2,072) | (12,892) | (14,964) | (543) | (29,525) | (30,068) | |||||||||||||||||||||||||||||
Net Interest Income (tax equivalent) | $ | 13,112 | $ | 3,109 | $ | 16,221 | $ | 22,790 | $ | (14,512) | $ | 8,278 |
% Change From Prior Year | |||||||||||||||||||||||||||||
(dollars in thousands) | 2021 | 2020 | 2019 | 2021 | 2020 | ||||||||||||||||||||||||
Wealth advisory fees | $ | 8,750 | $ | 7,468 | $ | 6,835 | 17.2 | % | 9.3 | % | |||||||||||||||||||
Investment brokerage fees | 1,975 | 1,670 | 1,687 | 18.3 | % | (1.0) | % | ||||||||||||||||||||||
Service charges on deposit accounts | 10,608 | 10,110 | 15,717 | 4.9 | % | (35.7) | % | ||||||||||||||||||||||
Loan and service fees | 11,922 | 10,085 | 9,911 | 18.2 | % | 1.8 | % | ||||||||||||||||||||||
Merchant and interchange fee income | 3,023 | 2,408 | 2,641 | 25.5 | % | (8.8) | % | ||||||||||||||||||||||
Bank owned life insurance income | 2,467 | 2,105 | 1,890 | 17.2 | % | 11.4 | % | ||||||||||||||||||||||
Interest rate swap fee income | 1,035 | 5,089 | 1,691 | (79.7) | % | 200.9 | % | ||||||||||||||||||||||
Mortgage banking income | 1,418 | 3,911 | 1,626 | (63.7) | % | 140.5 | % | ||||||||||||||||||||||
Net securities gains | 797 | 433 | 142 | 84.1 | % | 204.9 | % | ||||||||||||||||||||||
Other income | 2,725 | 3,564 | 2,857 | (23.5) | % | 24.7 | % | ||||||||||||||||||||||
Total noninterest income | $ | 44,720 | $ | 46,843 | $ | 44,997 | (4.5) | % | 4.1 | % | |||||||||||||||||||
Noninterest income to total revenue | 20.1 | % | 22.3 | % | 22.5 | % |
% Change From Prior Year | |||||||||||||||||||||||||||||
(dollars in thousands) | 2021 | 2020 | 2019 | 2021 | 2020 | ||||||||||||||||||||||||
Salaries and employee benefits | $ | 57,882 | $ | 49,413 | $ | 48,742 | 17.1 | % | 1.4 | % | |||||||||||||||||||
Net occupancy expense | 5,728 | 5,851 | 5,295 | (2.1) | % | 10.5 | % | ||||||||||||||||||||||
Equipment costs | 5,530 | 5,766 | 5,521 | (4.1) | % | 4.4 | % | ||||||||||||||||||||||
Data processing fees and supplies | 12,674 | 11,864 | 10,407 | 6.8 | % | 14.0 | % | ||||||||||||||||||||||
Corporate and business development | 4,262 | 3,093 | 4,371 | 37.8 | % | (29.2) | % | ||||||||||||||||||||||
FDIC insurance and other regulatory fees | 2,242 | 1,707 | 638 | 31.3 | % | 167.6 | % | ||||||||||||||||||||||
Professional fees | 7,064 | 5,314 | 4,644 | 32.9 | % | 14.4 | % | ||||||||||||||||||||||
Other expense | 8,905 | 8,197 | 9,806 | 8.6 | % | (16.4) | % | ||||||||||||||||||||||
Total noninterest expense | $ | 104,287 | $ | 91,205 | $ | 89,424 | 14.3 | % | 2.0 | % |
Year ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Return on average assets | 1.56 | % | 1.55 | % | 1.76 | % | |||||||||||
Return on equity | 14.19 | % | 13.51 | % | 15.47 | % | |||||||||||
Average equity to average assets | 10.96 | % | 11.51 | % | 11.38 | % | |||||||||||
Dividend payout ratio | 36.36 | % | 36.36 | % | 34.32 | % |
Within One Year | After One Within Five Years | After Five Years Within Ten years | After Ten Years | ||||||||||||||||||||||||||||||||||||||||||||
(fully tax equivalent basis, dollars in thousands) | Fair Value | Yield | Fair Value | Yield | Fair Value | Yield | Fair Value | Yield | |||||||||||||||||||||||||||||||||||||||
U.S. Treasury securities | $ | 900 | 0.03 | % | $ | 0 | 0.00 | % | $ | 0 | 0.00 | % | $ | 0 | 0.00 | % | |||||||||||||||||||||||||||||||
U.S. government sponsor agency | 0 | 0.00 | % | 0 | 0.00 | % | 4,859 | 1.00 | % | 138,593 | 1.47 | % | |||||||||||||||||||||||||||||||||||
Mortgage-backed securities: residential | 6,491 | 6.53 | % | 21,729 | 3.19 | % | 34,393 | 2.68 | % | 424,063 | 2.03 | % | |||||||||||||||||||||||||||||||||||
Mortgage-backed securities: commercial | 523 | 2.48 | % | 0 | 0.00 | % | 0 | 0.00 | % | 0 | 0.00 | % | |||||||||||||||||||||||||||||||||||
State and municipal securities | 2,804 | 3.38 | % | 9,823 | 4.40 | % | 50,033 | 3.65 | % | 704,347 | 3.16 | % | |||||||||||||||||||||||||||||||||||
Total Securities | $ | 10,718 | 4.96 | % | $ | 31,552 | 3.56 | % | $ | 89,285 | 3.13 | % | $ | 1,267,003 | 2.60 | % |
(dollars in thousands) | 2021 | 2020 | 2019 | ||||||||||||||
Commercial and industrial loans: | |||||||||||||||||
Working capital lines of credit loans | $ | 652,861 | $ | 626,023 | $ | 709,849 | |||||||||||
Non-working capital loans | 736,608 | 1,165,355 | 717,019 | ||||||||||||||
Total commercial and industrial loans | 1,389,469 | 1,791,378 | 1,426,868 | ||||||||||||||
Commercial real estate and multi-family residential loans: | |||||||||||||||||
Construction and land development loans | 379,813 | 362,653 | 287,641 | ||||||||||||||
Owner occupied loans | 739,371 | 648,019 | 573,665 | ||||||||||||||
Nonowner occupied loans | 588,458 | 579,625 | 571,364 | ||||||||||||||
Multi-family loans | 247,204 | 304,717 | 240,652 | ||||||||||||||
Total commercial real estate and multi-family residential loans | 1,954,846 | 1,895,014 | 1,673,322 | ||||||||||||||
Agri-business and agricultural loans: | |||||||||||||||||
Loans secured by farmland | 206,331 | 195,410 | 174,380 | ||||||||||||||
Loans for agricultural production | 239,494 | 234,234 | 205,151 | ||||||||||||||
Total agri-business and agricultural loans | 445,825 | 429,644 | 379,531 | ||||||||||||||
Other commercial loans | 73,490 | 94,013 | 112,302 | ||||||||||||||
Total commercial loans | 3,863,630 | 4,210,049 | 3,592,023 | ||||||||||||||
Consumer 1-4 family mortgage loans: | |||||||||||||||||
Closed end first mortgage loans | 176,561 | 167,847 | 177,227 | ||||||||||||||
Open end and junior lien loans | 156,238 | 163,664 | 186,552 | ||||||||||||||
Residential construction and land development loans | 11,921 | 12,007 | 12,966 | ||||||||||||||
Total consumer 1-4 family mortgage loans | 344,720 | 343,518 | 376,745 | ||||||||||||||
Other consumer loans | 82,755 | 103,616 | 98,617 | ||||||||||||||
Total consumer loans | 427,475 | 447,134 | 475,362 | ||||||||||||||
Gross loans | 4,291,105 | 4,657,183 | 4,067,385 | ||||||||||||||
Less: Allowance for credit losses | (67,773) | (61,408) | (50,652) | ||||||||||||||
Net deferred loan fees | (3,264) | (8,027) | (1,557) | ||||||||||||||
Loans, net | $ | 4,220,068 | $ | 4,587,748 | $ | 4,015,176 |
2021 | 2020 | 2019 | |||||||||||||||
Commercial and industrial loans | 32.38 | % | 38.46 | % | 35.08 | % | |||||||||||
Commercial real estate and multi-family residential loans | 45.56 | % | 40.69 | % | 41.14 | % | |||||||||||
Agri-business and agricultural loans | 10.39 | % | 9.23 | % | 9.33 | % | |||||||||||
Other commercial loans | 1.71 | % | 2.02 | % | 2.76 | % | |||||||||||
Consumer 1-4 family mortgage loans | 8.03 | % | 7.38 | % | 9.26 | % | |||||||||||
Other consumer loans | 1.93 | % | 2.22 | % | 2.43 | % | |||||||||||
Total Loans | 100.00 | % | 100.00 | % | 100.00 | % |
(dollars in thousands) | Commercial and Industrial | Commercial Real Estate and Multi-family Residential | Agri-business and Agricultural | Other Commercial | Consumer 1-4 Family Mortgage | Other Consumer | Total | Percent | |||||||||||||||||||||||||||||||||||||||
Within one year | $ | 684,523 | $ | 321,456 | $ | 161,999 | $ | 16,916 | $ | 10,383 | $ | 16,176 | $ | 1,211,453 | 28.23 | % | |||||||||||||||||||||||||||||||
After one year, within five years | 562,309 | 991,600 | 163,406 | 25,429 | 60,723 | 35,949 | 1,839,416 | 42.87 | % | ||||||||||||||||||||||||||||||||||||||
Over five years | 132,075 | 638,156 | 120,085 | 31,145 | 273,461 | 30,341 | 1,225,263 | 28.55 | % | ||||||||||||||||||||||||||||||||||||||
Nonaccrual loans | 10,562 | 3,634 | 335 | 0 | 153 | 289 | 14,973 | 0.35 | % | ||||||||||||||||||||||||||||||||||||||
Total loans | $ | 1,389,469 | $ | 1,954,846 | $ | 445,825 | $ | 73,490 | $ | 344,720 | $ | 82,755 | $ | 4,291,105 | 100.00 | % |
December 31, 2021 | |||||||||||||||||||||||||||||||||||
Originated | Forgiven / Repaid | Outstanding (1) | |||||||||||||||||||||||||||||||||
Number | Amount | Number | Amount | Number | Amount | ||||||||||||||||||||||||||||||
PPP Round 1 | 2,409 | $ | 570,500 | 2,390 | $ | 566,682 | 19 | $ | 3,818 | ||||||||||||||||||||||||||
PPP Round 2 | 1,192 | 165,142 | 1,117 | 142,809 | 75 | 22,333 | |||||||||||||||||||||||||||||
Total | 3,601 | $ | 735,642 | 3,507 | $ | 709,491 | 94 | $ | 26,151 |
2021 | 2020 | 2019 | % Balance Change From Prior Year | ||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Balance | Rate | Balance | Rate | Balance | Rate | 2021 | 2020 | |||||||||||||||||||||||||||||||||||||||
Noninterest bearing demand deposits | $ | 1,671,172 | 0.00 | % | $ | 1,309,901 | 0.00 | % | $ | 944,118 | 0.00 | % | 27.58 | % | 38.74 | % | |||||||||||||||||||||||||||||||
Savings and transaction accounts: | |||||||||||||||||||||||||||||||||||||||||||||||
Savings deposits | 360,915 | 0.08 | 270,010 | 0.08 | 240,293 | 0.11 | 33.67 | 12.37 | |||||||||||||||||||||||||||||||||||||||
Interest bearing demand deposits | 2,392,220 | 0.28 | 1,862,077 | 0.50 | 1,669,045 | 1.56 | 28.47 | 11.57 | |||||||||||||||||||||||||||||||||||||||
Time deposits: | |||||||||||||||||||||||||||||||||||||||||||||||
Deposits of $100,000 or more | 218,624 | 0.93 | 946,569 | 1.64 | 1,111,172 | 2.30 | (76.90) | (14.81) | |||||||||||||||||||||||||||||||||||||||
Other time deposits | 714,353 | 0.81 | 262,040 | 1.66 | 277,896 | 1.92 | 172.61 | (5.71) | |||||||||||||||||||||||||||||||||||||||
Total deposits | $ | 5,357,284 | 0.28 | % | $ | 4,650,597 | 0.63 | % | $ | 4,242,524 | 1.35 | % | 15.20 | % | 9.62 | % | |||||||||||||||||||||||||||||||
FHLB advances and other borrowings | 75,408 | 0.40 | 96,642 | 0.78 | 92,106 | 3.27 | (21.97) | 4.92 | |||||||||||||||||||||||||||||||||||||||
Total funding sources | $ | 5,432,692 | 0.28 | % | $ | 4,747,239 | 0.63 | % | $ | 4,334,630 | 1.39 | % | 14.44 | % | 9.52 | % |
(dollars in thousands) | $100,000 or more | $100,000 or less | Total | % of Total | |||||||||||||||||||
Within three months | $ | 118,876 | $ | 38,804 | $ | 157,680 | 19.01 | % | |||||||||||||||
Over three months, within six months | 118,658 | 37,383 | 156,041 | 18.81 | |||||||||||||||||||
Over six months, within twelve months | 218,642 | 59,377 | 278,019 | 33.52 | |||||||||||||||||||
Over twelve months | 170,947 | 66,831 | 237,778 | 28.66 | |||||||||||||||||||
Total time certificates of deposit | $ | 627,123 | $ | 202,395 | $ | 829,518 | 100.00 | % |
(dollars in thousands) | 2021 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Commercial | $ | 2,262,229 | 39.4 | % | $ | 1,940,306 | 38.5 | % | $ | 1,276,047 | 30.9 | % | |||||||||||||||||||||||
Retail | 2,178,534 | 38.0 | 1,919,040 | 38.1 | 1,617,133 | 39.1 | |||||||||||||||||||||||||||||
Public funds | 1,284,641 | 22.3 | 1,162,457 | 23.0 | 1,127,111 | 27.2 | |||||||||||||||||||||||||||||
Core deposits | $ | 5,725,404 | 99.7 | % | $ | 5,021,803 | 99.6 | % | $ | 4,020,291 | 97.2 | % | |||||||||||||||||||||||
Brokered deposits | 10,003 | 0.3 | 15,002 | 0.4 | 113,528 | 2.8 | |||||||||||||||||||||||||||||
Total deposits | $ | 5,735,407 | 100.0 | % | $ | 5,036,805 | 100.0 | % | $ | 4,133,819 | 100.0 | % |
(dollars in thousands) | 2021 | 2020 | |||||||||
Amount of loans outstanding, net of deferred fees, December 31, | $ | 4,287,841 | $ | 4,649,156 | |||||||
Commercial and industrial loans | |||||||||||
Past due accruing loans (90 days or more) | 0 | 0 | |||||||||
Nonaccrual loans(1) | 10,562 | 5,893 | |||||||||
Subtotal nonperforming loans | 10,562 | 5,893 | |||||||||
Commercial real estate and multi-family residential loans | |||||||||||
Past due accruing loans (90 days or more) | 0 | 0 | |||||||||
Nonaccrual loans(1) | 3,634 | 5,047 | |||||||||
Subtotal nonperforming loans | 3,634 | 5,047 | |||||||||
Agri-business and agricultural loans | |||||||||||
Past due accruing loans (90 days or more) | 0 | 0 | |||||||||
Nonaccrual loans(1) | 335 | 428 | |||||||||
Subtotal nonperforming loans | 335 | 428 | |||||||||
Other commercial loans | |||||||||||
Past due accruing loans (90 days or more) | 0 | 0 | |||||||||
Nonaccrual loans(1) | 0 | 0 | |||||||||
Subtotal nonperforming loans | 0 | 0 | |||||||||
Consumer 1-4 family mortgage loans | |||||||||||
Past due accruing loans (90 days or more) | 117 | 116 | |||||||||
Nonaccrual loans(1) | 153 | 618 | |||||||||
Subtotal nonperforming loans | 270 | 734 | |||||||||
Other consumer loans | |||||||||||
Past due accruing loans (90 days or more) | 0 | 0 | |||||||||
Nonaccrual loans(1) | 289 | 0 | |||||||||
Subtotal nonperforming loans | 289 | 0 | |||||||||
Total nonperforming loans | $ | 15,090 | $ | 12,102 | |||||||
Ratio: | |||||||||||
Nonperforming loans to total loans | 0.35 | % | 0.26 | % |
(dollars in thousands) | 2021 | 2020 | 2019 | ||||||||||||||
Amount of loans outstanding, net of deferred fees, December 31, | $ | 4,287,841 | $ | 4,649,156 | $ | 4,065,828 | |||||||||||
Average daily loans outstanding during the year ended December 31, | $ | 4,421,094 | $ | 4,424,472 | $ | 3,974,532 | |||||||||||
Allowance for credit losses, January 1, | $ | 61,408 | $ | 50,652 | $ | 48,453 | |||||||||||
Impact of adopting ASC 326 | 9,050 | 0 | 0 | ||||||||||||||
Loans charged-off: | |||||||||||||||||
Commercial and industrial loans | 5,575 | 4,524 | 1,447 | ||||||||||||||
Commercial real estate and multi-family residential loans | 70 | 72 | 17 | ||||||||||||||
Agri-business and agricultural loans | 0 | 0 | 0 | ||||||||||||||
Other commercial loans | 0 | 0 | 0 | ||||||||||||||
Consumer 1-4 family mortgage loans | 51 | 141 | 110 | ||||||||||||||
Other consumer loans | 287 | 516 | 336 | ||||||||||||||
Total loans charged-off | 5,983 | 5,253 | 1,910 | ||||||||||||||
Recoveries of loans previously charged-off: | |||||||||||||||||
Commercial and industrial loans | 1,559 | 428 | 459 | ||||||||||||||
Commercial real estate and multi-family residential loans | 14 | 315 | 161 | ||||||||||||||
Agri-business and agricultural loans | 320 | 0 | 8 | ||||||||||||||
Other commercial loans | 0 | 0 | 0 | ||||||||||||||
Consumer 1-4 family mortgage loans | 122 | 333 | 123 | ||||||||||||||
Other consumer loans | 206 | 163 | 123 | ||||||||||||||
Total recoveries | 2,221 | 1,239 | 874 | ||||||||||||||
Net loans charged-off (recovered) | 3,762 | 4,014 | 1,036 | ||||||||||||||
Provision for credit loss charged to expense | 1,077 | 14,770 | 3,235 | ||||||||||||||
Balance, December 31, | $ | 67,773 | $ | 61,408 | $ | 50,652 | |||||||||||
Ratios: | |||||||||||||||||
Net charge-offs to average daily loans outstanding: | |||||||||||||||||
Commercial and industrial loans | 0.09 | % | 0.09 | % | 0.02 | % | |||||||||||
Commercial real estate and multi-family residential loans | 0.00 | 0.00 | 0.00 | ||||||||||||||
Agri-business and agricultural loans | 0.00 | 0.00 | 0.00 | ||||||||||||||
Other commercial loans | 0.00 | 0.00 | 0.00 | ||||||||||||||
Consumer 1-4 family mortgage loans | 0.00 | 0.00 | 0.00 | ||||||||||||||
Other consumer loans | 0.00 | 0.00 | 0.01 | ||||||||||||||
Total ratio of net charge-offs (recoveries) | 0.09 | % | 0.09 | % | 0.03 | % | |||||||||||
Allowance for credit losses on loans to: | |||||||||||||||||
Total loans | 1.58 | % | 1.32 | % | 1.25 | % | |||||||||||
Total loans (excluding PPP loans) | 1.59 | % | 1.45 | % | 1.25 | % | |||||||||||
Nonperforming loans | 449.13 | % | 507.42 | % | 270.58 | % |
(dollars in thousands) | 2021 | 2020 | |||||||||
Allocated allowance for credit losses: | |||||||||||
Commercial and industrial loans | $ | 30,595 | $ | 28,333 | |||||||
Commercial real estate and multi-family residential loans | 26,535 | 22,907 | |||||||||
Agri-business and agricultural loans | 5,034 | 3,043 | |||||||||
Other commercial loans | 1,146 | 416 | |||||||||
Consumer 1-4 family mortgage loans | 2,866 | 2,619 | |||||||||
Other consumer loans | 1,147 | 951 | |||||||||
Total allocated allowance for credit losses | 67,323 | 58,269 | |||||||||
Unallocated allowance for credit losses | 450 | 3,139 | |||||||||
Total allowance for credit losses | $ | 67,773 | $ | 61,408 |
Payments Due by Period | |||||||||||||||||||||||||||||
(dollars in thousands) | Total | One year or less | 1-3 years | 3-5 years | After 5 years | ||||||||||||||||||||||||
Operating leases | $ | 4,696 | $ | 595 | $ | 1,228 | $ | 1,257 | $ | 1,616 | |||||||||||||||||||
Pension and SERP plans | 2,529 | 323 | 629 | 580 | 997 | ||||||||||||||||||||||||
Total contractual long-term cash obligations | $ | 7,225 | $ | 918 | $ | 1,857 | $ | 1,837 | $ | 2,613 |
Amount of Commitment Expiration Per Period | |||||||||||||||||
(dollars in thousands) | Total Amount Committed | One year or less | Over one year | ||||||||||||||
Unused loan commitments | $ | 2,287,659 | $ | 1,290,509 | $ | 997,150 | |||||||||||
Standby letters of credit | 55,336 | 53,009 | 2,327 | ||||||||||||||
Total commitments and letters of credit | $ | 2,342,995 | $ | 1,343,518 | $ | 999,477 |
2021 | |||||||||||||||||||||||||||||||||||||||||||||||
Principal/Notional Amount Maturing in: | |||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Thereafter | Total | Fair Value 12/31/2021 | |||||||||||||||||||||||||||||||||||||||
Rate sensitive assets: | |||||||||||||||||||||||||||||||||||||||||||||||
Fixed interest rate loans | $ | 592,512 | $ | 330,646 | $ | 211,989 | $ | 111,048 | $ | 80,375 | $ | 55,605 | $ | 1,382,175 | $ | 1,345,499 | |||||||||||||||||||||||||||||||
Average interest rate | 4.03 | % | 4.16 | % | 4.03 | % | 4.04 | % | 3.46 | % | 4.20 | % | |||||||||||||||||||||||||||||||||||
Variable interest rate loans | $ | 1,416,485 | $ | 522,053 | $ | 248,960 | $ | 164,309 | $ | 179,165 | $ | 374,694 | $ | 2,905,666 | $ | 2,896,218 | |||||||||||||||||||||||||||||||
Average interest rate | 3.33 | % | 3.36 | % | 3.31 | % | 3.22 | % | 2.90 | % | 3.19 | % | |||||||||||||||||||||||||||||||||||
Total loans | $ | 2,008,997 | $ | 852,699 | $ | 460,949 | $ | 275,357 | $ | 259,540 | $ | 430,299 | $ | 4,287,841 | $ | 4,241,717 | |||||||||||||||||||||||||||||||
Average interest rate | 3.54 | % | 3.67 | % | 3.64 | % | 3.55 | % | 3.08 | % | 3.32 | % | |||||||||||||||||||||||||||||||||||
Fixed interest rate securities | $ | 170,849 | $ | 107,061 | $ | 88,326 | $ | 87,234 | $ | 98,408 | $ | 824,969 | $ | 1,376,847 | $ | 1,398,458 | |||||||||||||||||||||||||||||||
Average interest rate | 2.16 | % | 1.86 | % | 1.75 | % | 2.02 | % | 2.26 | % | 2.10 | % | |||||||||||||||||||||||||||||||||||
Variable interest rate securities | $ | 28 | $ | 20 | $ | 15 | $ | 11 | $ | 8 | $ | 18 | $ | 100 | $ | 100 | |||||||||||||||||||||||||||||||
Average interest rate | 4.27 | % | 4.27 | % | 4.27 | % | 4.27 | % | 4.27 | % | 4.27 | % | |||||||||||||||||||||||||||||||||||
Other interest-bearing assets | $ | 631,410 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 631,410 | $ | 631,410 | |||||||||||||||||||||||||||||||
Average interest rate | 0.16 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | |||||||||||||||||||||||||||||||||||
Total earning assets | $ | 2,811,284 | $ | 959,780 | $ | 549,290 | $ | 362,602 | $ | 357,956 | $ | 1,255,286 | $ | 6,296,198 | $ | 6,271,685 | |||||||||||||||||||||||||||||||
Average interest rate | 2.69 | % | 3.47 | % | 3.33 | % | 3.18 | % | 2.85 | % | 2.52 | % | |||||||||||||||||||||||||||||||||||
Rate sensitive liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
Noninterest bearing checking | $ | 370,382 | $ | 171,055 | $ | 151,923 | $ | 134,874 | $ | 119,720 | $ | 947,527 | $ | 1,895,481 | $ | 1,895,481 | |||||||||||||||||||||||||||||||
Average interest rate | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | |||||||||||||||||||||||||||||||||||
Savings & interest bearing checking | $ | 609,882 | $ | 228,064 | $ | 201,375 | $ | 178,402 | $ | 158,659 | $ | 1,634,026 | $ | 3,010,408 | $ | 3,010,408 | |||||||||||||||||||||||||||||||
Average interest rate | 0.26 | % | 0.24 | % | 0.24 | % | 0.24 | % | 0.24 | % | 0.26 | % | |||||||||||||||||||||||||||||||||||
Time deposits | $ | 591,740 | $ | 174,035 | $ | 37,600 | $ | 13,704 | $ | 12,091 | $ | 348 | $ | 829,518 | $ | 833,617 | |||||||||||||||||||||||||||||||
Average interest rate | 0.46 | % | 68.00 | % | 2.21 | % | 0.96 | % | 0.63 | % | 0.49 | % | |||||||||||||||||||||||||||||||||||
Total deposits | $ | 1,572,004 | $ | 573,154 | $ | 390,898 | $ | 326,980 | $ | 290,470 | $ | 2,581,901 | $ | 5,735,407 | $ | 5,739,506 | |||||||||||||||||||||||||||||||
Average interest rate | 0.27 | % | 0.30 | % | 0.34 | % | 0.17 | % | 0.16 | % | 0.16 | % | |||||||||||||||||||||||||||||||||||
Fixed interest rate borrowings | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 75,000 | $ | 75,000 | $ | 66,118 | |||||||||||||||||||||||||||||||
Average interest rate | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.39 | % | |||||||||||||||||||||||||||||||||||
Variable interest rate borrowings | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||||||||||||||||||||
Average interest rate | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | |||||||||||||||||||||||||||||||||||
Total funds | $ | 1,572,004 | $ | 573,154 | $ | 390,898 | $ | 326,980 | $ | 290,470 | $ | 2,656,901 | $ | 5,810,407 | $ | 5,805,624 | |||||||||||||||||||||||||||||||
Average interest rate | 0.27 | % | 0.30 | % | 0.34 | % | 0.17 | % | 0.16 | % | 0.16 | % | |||||||||||||||||||||||||||||||||||
Interest rate sensitivity gap by period | $ | 1,239,280 | $ | 386,626 | $ | 158,392 | $ | 35,622 | $ | 67,486 | $ | (1,401,615) | |||||||||||||||||||||||||||||||||||
Cumulative rate sensitivity gap | $ | 1,239,280 | $ | 1,625,906 | $ | 1,784,298 | $ | 1,819,920 | $ | 1,887,406 | $ | 485,791 | |||||||||||||||||||||||||||||||||||
Cumulative rate sensitivity ratio | |||||||||||||||||||||||||||||||||||||||||||||||
at December 31, 2021 | 178.8 | % | 167.5 | % | 140.5 | % | 110.9 | % | 123.2 | % | 47.2 | % | |||||||||||||||||||||||||||||||||||
at December 31, 2020 | 155.5 | % | 220.8 | % | 163.6 | % | 95.4 | % | 84.5 | % | 33.9 | % |
(dollars in thousands) | Base | Falling (25 Basis Points) | Rising (25 Basis Points) | Rising (50 Basis Points) | Rising (100 Basis Points) | Rising (200 Basis Points) | Rising (300 Basis Points) | ||||||||||||||||||||||||||||||||||
Net interest income | $ | 176,889 | $ | 174,020 | $ | 179,790 | $ | 182,865 | $ | 189,032 | $ | 202,781 | $ | 216,499 | |||||||||||||||||||||||||||
Variance from Base | $ | (2,869) | $ | 2,901 | $ | 5,976 | $ | 12,143 | $ | 25,892 | $ | 39,610 | |||||||||||||||||||||||||||||
Percent of change from Base | (1.62) | % | 1.64 | % | 3.38 | % | 6.86 | % | 14.64 | % | 22.39 | % |
December 31 | 2021 | 2020 | |||||||||
ASSETS | |||||||||||
Cash and due from banks | $ | $ | |||||||||
Short-term investments | |||||||||||
Total cash and cash equivalents | |||||||||||
Securities available-for-sale (carried at fair value) | |||||||||||
Real estate mortgage loans held-for-sale | |||||||||||
Loans, net of allowance for credit losses of $ | |||||||||||
Land, premises and equipment, net | |||||||||||
Bank owned life insurance | |||||||||||
Federal Reserve and Federal Home Loan Bank Stock | |||||||||||
Accrued interest receivable | |||||||||||
Goodwill | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
LIABILITIES | |||||||||||
Noninterest bearing deposits | $ | $ | |||||||||
Interest bearing deposits | |||||||||||
Total deposits | |||||||||||
Borrowings | |||||||||||
Federal Home Loan Bank advances | |||||||||||
Miscellaneous borrowings | |||||||||||
Total borrowings | |||||||||||
Accrued interest payable | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments, off-balance sheet risks and contingencies (Notes 1 and 18) | |||||||||||
STOCKHOLDERS’ EQUITY | |||||||||||
Common stock: | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive income | |||||||||||
Treasury stock, at cost ( | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Noncontrolling interest | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Years Ended December 31 | 2021 | 2020 | 2019 | ||||||||||||||
NET INTEREST INCOME | |||||||||||||||||
Interest and fees on loans | |||||||||||||||||
Taxable | $ | $ | $ | ||||||||||||||
Tax exempt | |||||||||||||||||
Interest and dividends on securities | |||||||||||||||||
Taxable | |||||||||||||||||
Tax exempt | |||||||||||||||||
Interest on short-term investments | |||||||||||||||||
Total interest income | |||||||||||||||||
Interest on deposits | |||||||||||||||||
Interest on borrowings | |||||||||||||||||
Short-term | |||||||||||||||||
Long-term | |||||||||||||||||
Total interest expense | |||||||||||||||||
NET INTEREST INCOME | |||||||||||||||||
Provision for credit losses | |||||||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR | |||||||||||||||||
CREDIT LOSSES | |||||||||||||||||
NONINTEREST INCOME | |||||||||||||||||
Wealth advisory fees | |||||||||||||||||
Investment brokerage fees | |||||||||||||||||
Service charges on deposit accounts | |||||||||||||||||
Loan and service fees | |||||||||||||||||
Merchant and interchange fee income | |||||||||||||||||
Bank owned life insurance income | |||||||||||||||||
Interest rate swap fee income | |||||||||||||||||
Mortgage banking income | |||||||||||||||||
Net securities gains | |||||||||||||||||
Other income | |||||||||||||||||
Total noninterest income | |||||||||||||||||
NONINTEREST EXPENSE | |||||||||||||||||
Salaries and employee benefits | |||||||||||||||||
Net occupancy expense | |||||||||||||||||
Equipment costs | |||||||||||||||||
Data processing fees and supplies | |||||||||||||||||
Corporate and business development | |||||||||||||||||
FDIC insurance and other regulatory fees | |||||||||||||||||
Professional fees | |||||||||||||||||
Other expense | |||||||||||||||||
Total noninterest expense | |||||||||||||||||
INCOME BEFORE INCOME TAX EXPENSE | |||||||||||||||||
Income tax expense | |||||||||||||||||
NET INCOME | $ | $ | $ | ||||||||||||||
BASIC WEIGHTED AVERAGE COMMON SHARES | |||||||||||||||||
BASIC EARNINGS PER COMMON SHARE | $ | $ | $ | ||||||||||||||
DILUTED WEIGHTED AVERAGE COMMON SHARES | |||||||||||||||||
DILUTED EARNINGS PER COMMON SHARE | $ | $ | $ |
Years Ended December 31 | 2021 | 2020 | 2019 | ||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||
Change in securities available -for-sale: | |||||||||||||||||
Unrealized holding gain (loss) on securities available-for-sale arising during the period | ( | ||||||||||||||||
Reclassification adjustment for (gains) losses included in net income | ( | ( | ( | ||||||||||||||
Net securities gain (loss) activity during the period | ( | ||||||||||||||||
Tax effect | ( | ( | |||||||||||||||
Net of tax amount | ( | ||||||||||||||||
Defined benefit pension plans: | |||||||||||||||||
Net gain (loss) on defined benefit pension plans | ( | ( | |||||||||||||||
Amortization of net actuarial loss | |||||||||||||||||
Net gain (loss) on activity during the period | ( | ||||||||||||||||
Tax effect | ( | ( | |||||||||||||||
Net of tax amount | ( | ||||||||||||||||
Total other comprehensive income (loss), net of tax | ( | ||||||||||||||||
Comprehensive income | $ | $ | $ |
Accumulated | |||||||||||||||||||||||||||||||||||||||||||||||
Other | Total | ||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Retained | Comprehensive | Treasury | Stockholders’ | Noncontrolling | Total | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Earnings | Income (Loss) | Stock | Equity | Interest | Equity | ||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2019 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | |||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared, $ | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Cashless exercise of warrants | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||
Treasury shares purchased under deferred | |||||||||||||||||||||||||||||||||||||||||||||||
directors’ plan | ( | ( | 0 | ||||||||||||||||||||||||||||||||||||||||||||
Treasury shares sold and distributed under deferred | |||||||||||||||||||||||||||||||||||||||||||||||
directors’ plan | ( | 0 | |||||||||||||||||||||||||||||||||||||||||||||
Stock activity under equity incentive plans | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Stock based compensation expense | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | |||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared, $ | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Treasury shares purchased under share repurchase plan | ( | 0 | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Treasury shares purchased under deferred | |||||||||||||||||||||||||||||||||||||||||||||||
directors’ plan | ( | ( | 0 | ||||||||||||||||||||||||||||||||||||||||||||
Treasury shares sold and distributed under deferred | |||||||||||||||||||||||||||||||||||||||||||||||
directors’ plan | ( | 0 | |||||||||||||||||||||||||||||||||||||||||||||
Stock activity under equity incentive plans | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Stock based compensation expense | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared, $ | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Treasury shares purchased under deferred | |||||||||||||||||||||||||||||||||||||||||||||||
directors’ plan | ( | ( | 0 | ||||||||||||||||||||||||||||||||||||||||||||
Treasury shares sold and distributed under deferred | |||||||||||||||||||||||||||||||||||||||||||||||
directors’ plan | ( | 0 | |||||||||||||||||||||||||||||||||||||||||||||
Stock activity under equity incentive plans | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Stock based compensation expense | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | ( | $ | $ | $ |
Years Ended December 31 | 2021 | 2020 | 2019 | ||||||||||||||
Cash flows from operating activities: | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Adjustments to reconcile net income to net cash from operating activities: | |||||||||||||||||
Depreciation | |||||||||||||||||
Provision for credit losses | |||||||||||||||||
Net loss on sale and write down of other real estate owned | |||||||||||||||||
Amortization of loan servicing rights | |||||||||||||||||
Net change in loan servicing rights valuation allowance | |||||||||||||||||
Loans originated for sale | ( | ( | ( | ||||||||||||||
Net gain on sales of loans | ( | ( | ( | ||||||||||||||
Proceeds from sale of loans | |||||||||||||||||
Net (gain) loss on sale of premises and equipment | ( | ||||||||||||||||
Net (gain) loss on sales and calls of securities available-for-sale | ( | ( | ( | ||||||||||||||
Net amortization of available -for-sale securities | |||||||||||||||||
Stock based compensation expense | |||||||||||||||||
Earnings on life insurance | ( | ( | ( | ||||||||||||||
Gain on life insurance | ( | ( | ( | ||||||||||||||
Tax benefit of stock award issuances | ( | ( | ( | ||||||||||||||
Net change: | |||||||||||||||||
Interest receivable and other assets | ( | ( | ( | ||||||||||||||
Interest payable and other liabilities | ( | ( | |||||||||||||||
Total adjustments | |||||||||||||||||
Net cash from operating activities | |||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||
Proceeds from sale of securities available- for-sale | |||||||||||||||||
Proceeds from maturities, calls and principal paydowns of securities available-for-sale | |||||||||||||||||
Purchases of securities available-for-sale | ( | ( | ( | ||||||||||||||
Purchase of life insurance | ( | ( | ( | ||||||||||||||
Net increase in total loans | ( | ( | |||||||||||||||
Proceeds from sales of land, premises and equipment | |||||||||||||||||
Purchases of land, premises and equipment | ( | ( | ( | ||||||||||||||
Proceeds from sales of other real estate owned | |||||||||||||||||
Proceeds from life insurance | |||||||||||||||||
Net cash from investing activities | ( | ( | ( | ||||||||||||||
Cash flows from financing activities: | |||||||||||||||||
Net increase in total deposits | |||||||||||||||||
Net increase (decrease) in short-term borrowings | ( | ( | |||||||||||||||
Payments on short-term FHLB borrowings | ( | ||||||||||||||||
Payments on long-term FHLB borrowings | |||||||||||||||||
Proceeds from long-term FHLB borrowings | |||||||||||||||||
Payments on subordinated debentures | ( | ||||||||||||||||
Common dividends paid | ( | ( | ( | ||||||||||||||
Preferred dividends paid | ( | ( | ( | ||||||||||||||
Payments related to equity incentive plan | ( | ( | ( | ||||||||||||||
Purchase of treasury stock | ( | ( | ( | ||||||||||||||
Sales of treasury stock | |||||||||||||||||
Net cash from financing activities | ( | ||||||||||||||||
Net change in cash and cash equivalents | ( | ||||||||||||||||
Cash and cash equivalents at beginning of the year | |||||||||||||||||
Cash and cash equivalents at end of the year | $ | $ | $ | ||||||||||||||
Cash paid during the year for: | |||||||||||||||||
Interest | $ | $ | $ | ||||||||||||||
Income taxes | |||||||||||||||||
Supplemental non-cash disclosures: | |||||||||||||||||
Loans transferred to other real estate owned | |||||||||||||||||
Property transferred to held for sale | |||||||||||||||||
Right-of-use assets obtained in exchange for lease liabilities |
January 1, 2021 | ||||||||||||||||||||
(dollars in thousands) | As Reported Under ASC 326 | Pre-ASC 326 Adoption | Impact of ASC 326 Adoption | |||||||||||||||||
Loans | ||||||||||||||||||||
Commercial and industrial loans | $ | $ | $ | |||||||||||||||||
Commercial real estate and multi-family residential loans | ||||||||||||||||||||
Agri-business and agricultural loans | ||||||||||||||||||||
Other commercial loans | ||||||||||||||||||||
Consumer 1-4 family loans | ||||||||||||||||||||
Other consumer loans | ||||||||||||||||||||
Unallocated | ( | |||||||||||||||||||
Allowance for credit losses | $ | $ | $ |
(dollars in thousands) | Amortized Cost | Gross Unrealized Gain | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
2021 | |||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | |||||||||||||||||||
U.S. government sponsored agencies | ( | ||||||||||||||||||||||
Mortgage-backed securities: residential | ( | ||||||||||||||||||||||
Mortgage-backed securities: commercial | |||||||||||||||||||||||
State and municipal securities | ( | ||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | ||||||||||||||||||
2020 | |||||||||||||||||||||||
U.S. government sponsored agencies | $ | $ | $ | ( | $ | ||||||||||||||||||
Mortgage-backed securities: residential | ( | ||||||||||||||||||||||
Mortgage-backed securities: commercial | |||||||||||||||||||||||
State and municipal securities | ( | ||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
(dollars in thousands) | Amortized Cost | Fair Value | |||||||||
Due in one year or less | $ | $ | |||||||||
Due after one year through five years | |||||||||||
Due after five years through ten years | |||||||||||
Due after ten years | |||||||||||
Mortgage-backed securities | |||||||||||
Total debt securities | $ | $ |
(dollars in thousands) | 2021 | 2020 | 2019 | ||||||||||||||
Sales of securities available-for-sale | |||||||||||||||||
Proceeds | $ | $ | $ | ||||||||||||||
Gross gains | |||||||||||||||||
Gross losses | ( | ||||||||||||||||
Number of securities |
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||||||
(dollars in thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||||||||||||
2021 | |||||||||||||||||||||||||||||||||||
U.S. government sponsored agencies | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Mortgage-backed securities: residential | |||||||||||||||||||||||||||||||||||
State and municipal securities | |||||||||||||||||||||||||||||||||||
Total temporarily impaired | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
2020 | |||||||||||||||||||||||||||||||||||
U.S. government sponsored agencies | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Mortgage-backed securities: residential | |||||||||||||||||||||||||||||||||||
State and municipal securities | |||||||||||||||||||||||||||||||||||
Total temporarily impaired | $ | $ | $ | $ | $ | $ |
Less than 12 months | 12 months or more | Total | |||||||||||||||
2021 | |||||||||||||||||
U.S. government sponsored agencies | |||||||||||||||||
Mortgage-backed securities: residential | |||||||||||||||||
State and municipal securities | |||||||||||||||||
Total temporarily impaired | |||||||||||||||||
2020 | |||||||||||||||||
U.S. government sponsored agencies | |||||||||||||||||
Mortgage-backed securities: residential | |||||||||||||||||
State and municipal securities | |||||||||||||||||
Total temporarily impaired |
(dollars in thousands) | 2021 | 2020 | |||||||||
Commercial and industrial loans: | |||||||||||
Working capital lines of credit loans | $ | $ | |||||||||
Non-working capital loans | |||||||||||
Total commercial and industrial loans | |||||||||||
Commercial real estate and multi-family residential loans: | |||||||||||
Construction and land development loans | |||||||||||
Owner occupied loans | |||||||||||
Nonowner occupied loans | |||||||||||
Multi-family loans | |||||||||||
Total commercial real estate and multi-family residential loans | |||||||||||
Agri-business and agricultural loans: | |||||||||||
Loans secured by farmland | |||||||||||
Loans for agricultural production | |||||||||||
Total agri-business and agricultural loans | |||||||||||
Other commercial loans | |||||||||||
Total commercial loans | |||||||||||
Consumer 1-4 family mortgage loans: | |||||||||||
Closed end first mortgage loans | |||||||||||
Open end and junior lien loans | |||||||||||
Residential construction and land development loans | |||||||||||
Total consumer 1-4 family mortgage loans | |||||||||||
Other consumer loans | |||||||||||
Total consumer loans | |||||||||||
Gross loans | |||||||||||
Less: Allowance for credit losses | ( | ( | |||||||||
Net deferred loan fees | ( | ( | |||||||||
Loans, net | $ | $ |
(dollars in thousands) | Commercial and Industrial | Commercial Real Estate and Multi-family Residential | Agri-business and Agricultural | Other Commercial | Consumer 1-4 Family Mortgage | Other Consumer | Unallocated | Total | |||||||||||||||||||||||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Impact of adopting ASC 326 | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Provision for credit losses | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Loans charged-off | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
Net loans (charged-off) recovered | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | $ |
(dollars in thousands) | 2021 | 2020 | 2019 | 2018 | 2017 | Prior | Term Total | Revolving | Total | ||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial loans: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Working capital lines of credit loans: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-working capital loans: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate and multi-family residential loans: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction and land development loans: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Owner occupied loans: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Nonowner occupied loans: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Multi-family loans: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Agri-business and agricultural loans: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans secured by farmland: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans for agricultural production: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other commercial loans: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer 1-4 family mortgage loans: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Closed end first mortgage loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Open end and junior lien loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential construction loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other consumer loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
TOTAL | $ | $ | $ | $ | $ | $ | $ | $ | $ |
(dollars in thousands) | Loans Not Past Due | 30-89 Days Past Due | Greater than 89 Days Past Due and Accruing | Total Accruing | Total Nonaccrual | Nonaccrual With No Allowance For Credit Loss | Total | |||||||||||||||||||||||||||||||||||||
Commercial and industrial loans: | ||||||||||||||||||||||||||||||||||||||||||||
Working capital lines of credit loans | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Non-working capital loans | ||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate and multi-family residential loans: | ||||||||||||||||||||||||||||||||||||||||||||
Construction and land development loans | ||||||||||||||||||||||||||||||||||||||||||||
Owner occupied loans | ||||||||||||||||||||||||||||||||||||||||||||
Nonowner occupied loans | ||||||||||||||||||||||||||||||||||||||||||||
Multi-family loans | ||||||||||||||||||||||||||||||||||||||||||||
Agri-business and agricultural loans: | ||||||||||||||||||||||||||||||||||||||||||||
Loans secured by farmland | ||||||||||||||||||||||||||||||||||||||||||||
Loans for agricultural production | ||||||||||||||||||||||||||||||||||||||||||||
Other commercial loans | ||||||||||||||||||||||||||||||||||||||||||||
Consumer 1‑4 family mortgage loans: | ||||||||||||||||||||||||||||||||||||||||||||
Closed end first mortgage loans | ||||||||||||||||||||||||||||||||||||||||||||
Open end and junior lien loans | ||||||||||||||||||||||||||||||||||||||||||||
Residential construction loans | ||||||||||||||||||||||||||||||||||||||||||||
Other consumer loans | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ |
(dollars in thousands) | Real Estate | General Business Assets | Other | Total | ||||||||||||||||||||||
Commercial and industrial loans: | ||||||||||||||||||||||||||
Working capital lines of credit loans | $ | $ | $ | $ | ||||||||||||||||||||||
Non-working capital loans | ||||||||||||||||||||||||||
Commercial real estate and multi-family residential loans: | ||||||||||||||||||||||||||
Owner occupied loans | ||||||||||||||||||||||||||
Nonowner occupied loans | ||||||||||||||||||||||||||
Agri-business and agricultural loans: | ||||||||||||||||||||||||||
Loans secured by farmland | ||||||||||||||||||||||||||
Consumer 1-4 family mortgage loans: | ||||||||||||||||||||||||||
Closed end first mortgage loans | ||||||||||||||||||||||||||
Open end and junior lien loans | ||||||||||||||||||||||||||
Other consumer loans | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
(dollars in thousands) | December 31, 2021 | December 31, 2020 | ||||||||||||
Accruing troubled debt restructured loans | $ | $ | ||||||||||||
Nonaccrual troubled debt restructured loans | ||||||||||||||
Total troubled debt restructured loans | $ | $ |
Modified Repayment Terms | ||||||||||||||||||||||||||||||||
(dollars in thousands) | Number of Loans | Pre-Modification Outstanding Recorded Investment | Post-Modification Outstanding Recorded Investment | Number of Loans | Extension Period or Range (in months) | |||||||||||||||||||||||||||
Troubled Debt Restructurings | ||||||||||||||||||||||||||||||||
Consumer 1-4 family loans: | ||||||||||||||||||||||||||||||||
Closed end first mortgage loans | $ | $ | ||||||||||||||||||||||||||||||
Total | $ | $ |
Modified Repayment Terms | ||||||||||||||||||||||||||||||||
(dollars in thousands) | Number of Loans | Pre-Modification Outstanding Recorded Investment | Post-Modification Outstanding Recorded Investment | Number of Loans | Extension Period or Range (in months) | |||||||||||||||||||||||||||
Troubled Debt Restructurings | ||||||||||||||||||||||||||||||||
Commercial and industrial loans: | ||||||||||||||||||||||||||||||||
Working capital lines of credit loans | $ | $ | ||||||||||||||||||||||||||||||
Non-working capital lines of credit loans | ||||||||||||||||||||||||||||||||
Commercial real estate and multi-family residential loans: | ||||||||||||||||||||||||||||||||
Owner occupied loans | ||||||||||||||||||||||||||||||||
Total | $ | $ |
Modified Repayment Terms | ||||||||||||||||||||||||||||||||
(dollars in thousands) | Number of Loans | Pre-Modification Outstanding Recorded Investment | Post-Modification Outstanding Recorded Investment | Number of Loans | Extension Period or Range (in months) | |||||||||||||||||||||||||||
Troubled Debt Restructurings | ||||||||||||||||||||||||||||||||
Commercial and industrial loans: | ||||||||||||||||||||||||||||||||
Working capital lines of credit loans | $ | $ | ||||||||||||||||||||||||||||||
Total | $ | $ |
2021 | 2020 | 2019 | |||||||||||||||||||||||||||||||||
(dollars in thousands) | Number of Loans | Recorded Investment | Number of Loans | Recorded Investment | Number of Loans | Recorded Investment | |||||||||||||||||||||||||||||
Troubled Debt Restructurings that Subsequently Defaulted Commercial and industrial loans: | |||||||||||||||||||||||||||||||||||
Non-working capital loans | $ | $ | $ | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ |
(dollars in thousands) | Commercial and Industrial | Commercial Real Estate and Multi-family Residential | Agri-business and Agricultural | Other Commercial | Consumer 1-4 Family Mortgage | Other Consumer | Unallocated | Total | |||||||||||||||||||||||||||||||||||||||
December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Provision for loan losses | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Loans charged-off | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
Net loans (charged-off) recovered | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | $ |
(dollars in thousands) | Commercial and Industrial | Commercial Real Estate and Multi-family Residential | Agri-business and Agricultural | Other Commercial | Consumer 1-4 Family Mortgage | Other Consumer | Unallocated | Total | |||||||||||||||||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Provision for loan losses | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Loans charged-off | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
Net loans (charged-off) recovered | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | $ |
(dollars in thousands) | Commercial and Industrial | Commercial Real Estate and Multi-family Residential | Agri-business and Agricultural | Other Commercial | Consumer 1-4 Family Mortgage | Other Consumer | Unallocated | Total | |||||||||||||||||||||||||||||||||||||||
December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans: | |||||||||||||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Collectively evaluated for impairment | |||||||||||||||||||||||||||||||||||||||||||||||
Total ending allowance balance | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Loans collectively evaluated for impairment | |||||||||||||||||||||||||||||||||||||||||||||||
Total ending loans balance | $ | $ | $ | $ | $ | $ | $ | $ |
(dollars in thousands) | Unpaid Principal Balance | Recorded Investment | Allowance for Loan Losses Allocated | ||||||||||||||
With no related allowance recorded: | |||||||||||||||||
Commercial and industrial loans: | |||||||||||||||||
Working capital lines of credit loans | $ | $ | $ | ||||||||||||||
Non-working capital loans | |||||||||||||||||
Commercial real estate and multi-family residential loans: | |||||||||||||||||
Owner occupied loans | |||||||||||||||||
Agri-business and agricultural loans: | |||||||||||||||||
Loans secured by farmland | |||||||||||||||||
Consumer 1‑4 family loans: | |||||||||||||||||
Closed end first mortgage loans | |||||||||||||||||
Open end and junior lien loans | |||||||||||||||||
With an allowance recorded: | |||||||||||||||||
Commercial and industrial loans: | |||||||||||||||||
Working capital lines of credit loans | |||||||||||||||||
Non-working capital loans | |||||||||||||||||
Commercial real estate and multi-family residential loans: | |||||||||||||||||
Owner occupied loans | |||||||||||||||||
Agri-business and agricultural loans: | |||||||||||||||||
Loans secured by farmland | |||||||||||||||||
Consumer 1‑4 family mortgage loans: | |||||||||||||||||
Closed end first mortgage loans | |||||||||||||||||
Total | $ | $ | $ |
(dollars in thousands) | Average Recorded Investment | Interest Income Recognized | Cash Basis Interest Income Recognized | ||||||||||||||
With no related allowance recorded: | |||||||||||||||||
Commercial and industrial loans: | |||||||||||||||||
Working capital lines of credit loans | $ | $ | $ | ||||||||||||||
Non-working capital loans | |||||||||||||||||
Commercial real estate and multi-family residential loans: | |||||||||||||||||
Owner occupied loans | |||||||||||||||||
Agri-business and agricultural loans: | |||||||||||||||||
Loans secured by farmland | |||||||||||||||||
Loans for agricultural production | |||||||||||||||||
Consumer 1-4 family loans: | |||||||||||||||||
Closed end first mortgage loans | |||||||||||||||||
Open end and junior lien loans | |||||||||||||||||
With an allowance recorded: | |||||||||||||||||
Commercial and industrial loans: | |||||||||||||||||
Working capital lines of credit loans | |||||||||||||||||
Non-working capital loans | |||||||||||||||||
Commercial real estate and multi-family residential loans: | |||||||||||||||||
Construction and land development loans | |||||||||||||||||
Owner occupied loans | |||||||||||||||||
Agri-business and agricultural loans: | |||||||||||||||||
Loans secured by farmland | |||||||||||||||||
Consumer 1-4 family mortgage loans: | |||||||||||||||||
Closed end first mortgage loans | |||||||||||||||||
Open end and junior lien loans | |||||||||||||||||
Residential construction loans | |||||||||||||||||
Other consumer loans | |||||||||||||||||
Total | $ | $ | $ |
(dollars in thousands) | Average Recorded Investment | Interest Income Recognized | Cash Basis Interest Income Recognized | ||||||||||||||
With no related allowance recorded: | |||||||||||||||||
Commercial and industrial loans: | |||||||||||||||||
Working capital lines of credit loans | $ | $ | $ | ||||||||||||||
Non-working capital loans | |||||||||||||||||
Commercial real estate and multi-family residential loans: | |||||||||||||||||
Owner occupied loans | |||||||||||||||||
Loans for ag production | |||||||||||||||||
Agri-business and agricultural loans: | |||||||||||||||||
Loans secured by farmland | |||||||||||||||||
Consumer 1‑4 family loans: | |||||||||||||||||
Closed end first mortgage loans | |||||||||||||||||
Open end and junior lien loans | |||||||||||||||||
With an allowance recorded: | |||||||||||||||||
Commercial and industrial loans: | |||||||||||||||||
Working capital lines of credit loans | |||||||||||||||||
Non-working capital loans | |||||||||||||||||
Commercial real estate and multi-family residential loans: | |||||||||||||||||
Construction and land development loans | |||||||||||||||||
Owner occupied loans | |||||||||||||||||
Agri-business and agricultural loans: | |||||||||||||||||
Loans secured by farmland | |||||||||||||||||
Consumer 1‑4 family mortgage loans: | |||||||||||||||||
Closed end first mortgage loans | |||||||||||||||||
Open end and junior lien loans | |||||||||||||||||
Residential constructions loans | |||||||||||||||||
Other consumer loans | |||||||||||||||||
Total | $ | $ | $ |
(dollars in thousands) | Loans Not Past Due | 30-89 Days Past Due | Greater than 90 Days Past Due and Still Accruing | Nonaccrual | Total Past Due and Nonaccrual | Total | |||||||||||||||||||||||||||||
Commercial and industrial loans: | |||||||||||||||||||||||||||||||||||
Working capital lines of credit loans | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Non-working capital loans | |||||||||||||||||||||||||||||||||||
Commercial real estate and multi-family residential loans: | |||||||||||||||||||||||||||||||||||
Construction and land development loans | |||||||||||||||||||||||||||||||||||
Owner occupied loans | |||||||||||||||||||||||||||||||||||
Nonowner occupied loans | |||||||||||||||||||||||||||||||||||
Multi-family loans | |||||||||||||||||||||||||||||||||||
Agri-business and agricultural loans: | |||||||||||||||||||||||||||||||||||
Loans secured by farmland | |||||||||||||||||||||||||||||||||||
Loans for agricultural production | |||||||||||||||||||||||||||||||||||
Other commercial loans | |||||||||||||||||||||||||||||||||||
Consumer 1‑4 family mortgage loans: | |||||||||||||||||||||||||||||||||||
Closed end first mortgage loans | |||||||||||||||||||||||||||||||||||
Open end and junior lien loans | |||||||||||||||||||||||||||||||||||
Residential construction loans | |||||||||||||||||||||||||||||||||||
Other consumer loans | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
(dollars in thousands) | Pass | Special Mention | Substandard | Doubtful | Not Rated | Total | ||||||||||||||||||||||||||||||||
Commercial and industrial loans: | ||||||||||||||||||||||||||||||||||||||
Working capital lines of credit loans | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Non-working capital loans | ||||||||||||||||||||||||||||||||||||||
Commercial real estate and multi-family residential loans: | ||||||||||||||||||||||||||||||||||||||
Construction and land development loans | ||||||||||||||||||||||||||||||||||||||
Owner occupied loans | ||||||||||||||||||||||||||||||||||||||
Nonowner occupied loans | ||||||||||||||||||||||||||||||||||||||
Multi-family loans | ||||||||||||||||||||||||||||||||||||||
Agri-business and agricultural loans: | ||||||||||||||||||||||||||||||||||||||
Loans secured by farmland | ||||||||||||||||||||||||||||||||||||||
Loans for agricultural production | ||||||||||||||||||||||||||||||||||||||
Other commercial loans | ||||||||||||||||||||||||||||||||||||||
Consumer 1‑4 family mortgage loans: | ||||||||||||||||||||||||||||||||||||||
Closed end first mortgage loans | ||||||||||||||||||||||||||||||||||||||
Open end and junior lien loans | ||||||||||||||||||||||||||||||||||||||
Residential construction loans | ||||||||||||||||||||||||||||||||||||||
Other consumer loans | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
December 31, 2021 | |||||||||||||||||||||||
Fair Value Measurements Using | Assets | ||||||||||||||||||||||
(dollars in thousands) | Level 1 | Level 2 | Level 3 | at Fair Value | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | |||||||||||||||||||
U.S. government sponsored agency securities | |||||||||||||||||||||||
Mortgage-backed securities: residential | |||||||||||||||||||||||
Mortgage-backed securities: commercial | |||||||||||||||||||||||
State and municipal securities | |||||||||||||||||||||||
Total Securities | |||||||||||||||||||||||
Mortgage banking derivative | |||||||||||||||||||||||
Interest rate swap derivative | |||||||||||||||||||||||
Total assets | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Mortgage banking derivative | $ | $ | $ | $ | |||||||||||||||||||
Interest rate swap derivative | |||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
December 31, 2020 | |||||||||||||||||||||||
Fair Value Measurements Using | Assets | ||||||||||||||||||||||
(dollars in thousands) | Level 1 | Level 2 | Level 3 | at Fair Value | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
U.S. government sponsored agency securities | $ | $ | $ | $ | |||||||||||||||||||
Mortgage-backed securities: residential | |||||||||||||||||||||||
Mortgage-backed securities: commercial | |||||||||||||||||||||||
State and municipal securities | |||||||||||||||||||||||
Total Securities | |||||||||||||||||||||||
Mortgage banking derivative | |||||||||||||||||||||||
Interest rate swap derivative | |||||||||||||||||||||||
Total assets | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Mortgage banking derivative | $ | $ | $ | $ | |||||||||||||||||||
Interest rate swap derivative | |||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
December 31, 2021 | |||||||||||||||||||||||
Fair Value Measurements Using | Assets | ||||||||||||||||||||||
(dollars in thousands) | Level 1 | Level 2 | Level 3 | at Fair Value | |||||||||||||||||||
Assets | |||||||||||||||||||||||
Collateral dependent loans: | |||||||||||||||||||||||
Commercial and industrial loans: | |||||||||||||||||||||||
Working capital lines of credit loans | $ | $ | $ | $ | |||||||||||||||||||
Non-working capital loans | |||||||||||||||||||||||
Commercial real estate and multi-family residential loans: | |||||||||||||||||||||||
Owner occupied loans | |||||||||||||||||||||||
Agri-business and agricultural loans: | |||||||||||||||||||||||
Loans secured by farmland | |||||||||||||||||||||||
Total collateral dependent loans | $ | $ | $ | $ | |||||||||||||||||||
Other real estate owned | |||||||||||||||||||||||
Total assets | $ | $ | $ | $ |
December 31, 2020 | |||||||||||||||||||||||
Fair Value Measurements Using | Assets | ||||||||||||||||||||||
(dollars in thousands) | Level 1 | Level 2 | Level 3 | at Fair Value | |||||||||||||||||||
Assets | |||||||||||||||||||||||
Collateral dependent loans: | |||||||||||||||||||||||
Commercial and industrial loans: | |||||||||||||||||||||||
Working capital lines of credit loans | $ | $ | $ | $ | |||||||||||||||||||
Non-working capital loans | |||||||||||||||||||||||
Commercial real estate and multi-family residential loans: | |||||||||||||||||||||||
Owner occupied loans | |||||||||||||||||||||||
Agri-business and agricultural loans: | |||||||||||||||||||||||
Loans secured by farmland | |||||||||||||||||||||||
Consumer 1‑4 family mortgage loans: | |||||||||||||||||||||||
Closed end first mortgage loans | |||||||||||||||||||||||
Total collateral dependent loans | $ | $ | $ | $ | |||||||||||||||||||
Other real estate owned | |||||||||||||||||||||||
Total assets | $ | $ | $ | $ |
(dollars in thousands) | Fair Value | Valuation Methodology | Unobservable Inputs | Average | Range of Inputs | ||||||||||||||||||||||||
Collateral dependent loans: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | ||||||||||||||||||||||||||||
Collateral dependent loans: | |||||||||||||||||||||||||||||
Commercial real estate and multi-family residential loans | |||||||||||||||||||||||||||||
Collateral dependent loans: | |||||||||||||||||||||||||||||
Agri-business and agricultural | |||||||||||||||||||||||||||||
Other real estate owned | |||||||||||||||||||||||||||||
(dollars in thousands) | Fair Value | Valuation Methodology | Unobservable Inputs | Average | Range of Inputs | ||||||||||||||||||||||||
Collateral dependent loans: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | ||||||||||||||||||||||||||||
Collateral dependent loans: | |||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||
Collateral dependent loans: | |||||||||||||||||||||||||||||
Agri-business and agricultural | |||||||||||||||||||||||||||||
Collateral dependent loans: | |||||||||||||||||||||||||||||
Consumer 1-4 family mortgage |
December 31, 2021 | |||||||||||||||||||||||||||||
Carrying | Estimated Fair Value | ||||||||||||||||||||||||||||
(dollars in thousands) | Value | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Securities available-for-sale | |||||||||||||||||||||||||||||
Real estate mortgages held-for-sale | |||||||||||||||||||||||||||||
Loans, net | |||||||||||||||||||||||||||||
Mortgage banking derivative | |||||||||||||||||||||||||||||
Interest rate swap derivative | |||||||||||||||||||||||||||||
Federal Reserve and Federal Home Loan Bank Stock | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||
Accrued interest receivable | |||||||||||||||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||||||||
Certificates of deposit | ( | ( | ( | ||||||||||||||||||||||||||
All other deposits | ( | ( | ( | ||||||||||||||||||||||||||
Federal Home Loan Bank advances | ( | ( | ( | ||||||||||||||||||||||||||
Mortgage banking derivative | ( | ( | ( | ||||||||||||||||||||||||||
Interest rate swap derivative | ( | ( | ( | ||||||||||||||||||||||||||
Standby letters of credit | ( | ( | ( | ||||||||||||||||||||||||||
Accrued interest payable | ( | ( | ( | ( |
December 31, 2020 | |||||||||||||||||||||||||||||
Carrying | Estimated Fair Value | ||||||||||||||||||||||||||||
(dollars in thousands) | Value | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Securities available-for-sale | |||||||||||||||||||||||||||||
Real estate mortgages held-for-sale | |||||||||||||||||||||||||||||
Loans, net | |||||||||||||||||||||||||||||
Mortgage banking derivative | |||||||||||||||||||||||||||||
Interest rate swap derivative | |||||||||||||||||||||||||||||
Federal Reserve and Federal Home Loan Bank Stock | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||
Accrued interest receivable | |||||||||||||||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||||||||
Certificates of deposit | ( | ( | ( | ||||||||||||||||||||||||||
All other deposits | ( | ( | ( | ||||||||||||||||||||||||||
Miscellaneous borrowings | ( | ( | ( | ||||||||||||||||||||||||||
Federal Home Loan Bank advances | ( | ( | ( | ||||||||||||||||||||||||||
Mortgage banking derivative | ( | ( | ( | ||||||||||||||||||||||||||
Interest rate swap derivative | ( | ( | ( | ||||||||||||||||||||||||||
Standby letters of credit | ( | ( | ( | ||||||||||||||||||||||||||
Accrued interest payable | ( | ( | ( | ( |
(dollars in thousands) | 2021 | 2020 | |||||||||
Land | $ | $ | |||||||||
Premises and improvements | |||||||||||
Equipment and furniture | |||||||||||
Total cost | |||||||||||
Less accumulated depreciation | |||||||||||
Land, premises and equipment, net | $ | $ |
(dollars in thousands) | 2021 | 2020 | |||||||||
Non-interest bearing demand deposits | $ | $ | |||||||||
Savings and transaction accounts: | |||||||||||
Savings deposits | |||||||||||
Interest bearing demand deposits | |||||||||||
Time deposits: | |||||||||||
Other time deposits | |||||||||||
Deposits of $100,000 to $250,000 | |||||||||||
Deposits of $250,000 or more | |||||||||||
Total deposits | $ | $ |
(dollars in thousands) | Amount | ||||
Maturing in 2022 | $ | ||||
Maturing in 2023 | |||||
Maturing in 2024 | |||||
Maturing in 2025 | |||||
Maturing in 2026 | |||||
Thereafter | |||||
Total time deposits | $ |
(dollars in thousands) | 2021 | 2020 | |||||||||
Federal Home Loan Bank of Indianapolis Putable Advance, | $ | $ | |||||||||
Pension Benefits | SERP Benefits | ||||||||||||||||||||||
(dollars in thousands) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Change in benefit obligation: | |||||||||||||||||||||||
Beginning benefit obligation | $ | $ | $ | $ | |||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Actuarial (gain) loss | ( | ||||||||||||||||||||||
Benefits paid | ( | ( | ( | ( | |||||||||||||||||||
Ending benefit obligation | |||||||||||||||||||||||
Change in plan assets (primarily equity and fixed income investments and money market funds), at fair value: | |||||||||||||||||||||||
Beginning plan assets | |||||||||||||||||||||||
Actual return | |||||||||||||||||||||||
Employer contribution | |||||||||||||||||||||||
Benefits paid | ( | ( | ( | ( | |||||||||||||||||||
Ending plan assets | |||||||||||||||||||||||
Funded status at end of year | $ | $ | ( | $ | ( | $ | ( |
Pension Benefits | SERP Benefits | ||||||||||||||||||||||
(dollars in thousands) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Funded status included in other liabilities | $ | $ | ( | $ | ( | $ | ( |
Pension Benefits | SERP Benefits | ||||||||||||||||||||||
(dollars in thousands) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Net actuarial loss | $ | $ | $ | $ |
Pension Benefits | SERP Benefits | ||||||||||||||||||||||||||||||||||
(dollars in thousands) | 2021 | 2020 | 2019 | 2021 | 2020 | 2019 | |||||||||||||||||||||||||||||
Net pension expense: | |||||||||||||||||||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Interest cost | |||||||||||||||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Recognized net actuarial (gain) loss | |||||||||||||||||||||||||||||||||||
Settlement cost | |||||||||||||||||||||||||||||||||||
Net pension expense | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Net (gain) loss | $ | ( | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||
Amortization of net loss | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Total recognized in other comprehensive income (loss) | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
Total recognized in net pension expense and other comprehensive income (loss) | $ | ( | $ | $ | $ | ( | $ | $ |
Pension Benefits | SERP Benefits | ||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2021 | 2020 | 2019 | ||||||||||||||||||||||||||||||
The following assumptions were used in calculating the net benefit obligation: | |||||||||||||||||||||||||||||||||||
Weighted average discount rate | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Rate of increase in future compensation | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||
Lump sum assumed interest rates First 5 years | % | % | % | N/A | N/A | N/A | |||||||||||||||||||||||||||||
Next 15 years | % | % | % | N/A | N/A | N/A | |||||||||||||||||||||||||||||
All future years | % | % | % | N/A | N/A | N/A | |||||||||||||||||||||||||||||
The following assumptions were used in calculating the net pension expense: | |||||||||||||||||||||||||||||||||||
Weighted average discount rate | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Rate of increase in future compensation | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||
Expected long-term rate of return | % | % | % | % | % | % |
Target Allocation | Percentage of Plan Assets at Year End | Weighted Average Expected Long-Term Rate of Return | |||||||||||||||||||||||||||
Asset Category | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||
Equity securities | - | % | % | % | % | ||||||||||||||||||||||||
Debt securities | - | % | % | % | % | ||||||||||||||||||||||||
Other | - | % | % | % | % | ||||||||||||||||||||||||
Total | % | % | % |
Target Allocation | Percentage of Plan Assets at Year End | Weighted Average Expected Long-Term Rate of Return | |||||||||||||||||||||||||||
Asset Category | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||
Equity securities | - | % | % | % | % | ||||||||||||||||||||||||
Debt securities | - | % | % | % | % | ||||||||||||||||||||||||
Other | - | % | % | % | % | ||||||||||||||||||||||||
Total | % | % | % |
Asset Category | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Equity securities - US large cap common stocks | $ | $ | $ | $ | |||||||||||||||||||
Equity securities - US mid cap stock mutual funds | |||||||||||||||||||||||
Equity securities - US small cap stock mutual funds | |||||||||||||||||||||||
Equity securities - international stock mutual funds | |||||||||||||||||||||||
Equity securities - emerging markets stock mutual funds | |||||||||||||||||||||||
Debt securities - intermediate term bond mutual funds | |||||||||||||||||||||||
Debt securities - short term bond mutual funds | |||||||||||||||||||||||
Cash - money market account | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Asset Category | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2 ) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Equity securities - US large cap common stocks | $ | $ | $ | $ | |||||||||||||||||||
Equity securities - US mid cap stock mutual funds | |||||||||||||||||||||||
Equity securities - US small cap stock mutual funds | |||||||||||||||||||||||
Equity securities - international stock mutual funds | |||||||||||||||||||||||
Equity securities - emerging markets stock mutual funds | |||||||||||||||||||||||
Debt securities - intermediate term bond mutual funds | |||||||||||||||||||||||
Debt securities - short term bond mutual funds | |||||||||||||||||||||||
Cash - money market account | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Asset Category | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Equity securities - US large cap common stocks | $ | $ | $ | $ | |||||||||||||||||||
Equity securities - US mid cap stock mutual funds | |||||||||||||||||||||||
Equity securities - US small cap stock mutual funds | |||||||||||||||||||||||
Equity securities - emerging markets stock mutual funds | |||||||||||||||||||||||
Equity securities - international stock mutual funds | |||||||||||||||||||||||
Debt securities - intermediate term bond mutual funds | |||||||||||||||||||||||
Debt securities - short term bond mutual funds | |||||||||||||||||||||||
Cash - money market account | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Asset Category | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Equity securities - US large cap common stocks | $ | $ | $ | $ | |||||||||||||||||||
Equity securities - US mid cap stock mutual funds | |||||||||||||||||||||||
Equity securities - US small cap stock mutual funds | |||||||||||||||||||||||
Equity securities - emerging markets stock mutual funds | |||||||||||||||||||||||
Equity securities - international stock mutual funds | |||||||||||||||||||||||
Debt securities - intermediate term bond mutual funds | |||||||||||||||||||||||
Debt securities - short term bond mutual funds | |||||||||||||||||||||||
Cash - money market account | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Plan Year | Pension Benefits | SERP Benefits | |||||||||
(dollars in thousands) | |||||||||||
2022 | $ | $ | |||||||||
2023 | |||||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
2027-2031 |
(dollars in thousands) | 2021 | 2020 | 2019 | ||||||||||||||
Current federal | $ | $ | $ | ||||||||||||||
Deferred federal | ( | ( | ( | ||||||||||||||
Current state | |||||||||||||||||
Deferred state | ( | ( | ( | ||||||||||||||
Total income tax expense | $ | $ | $ |
(dollars in thousands) | 2021 | 2020 | 2019 | ||||||||||||||
Income taxes at statutory federal rate of 21% | $ | $ | $ | ||||||||||||||
Increase (decrease) in taxes resulting from: | |||||||||||||||||
Tax exempt income | ( | ( | ( | ||||||||||||||
Nondeductible expense | |||||||||||||||||
State income tax, net of federal tax effect | |||||||||||||||||
Captive insurance premium income | ( | ( | ( | ||||||||||||||
Tax credits | ( | ( | ( | ||||||||||||||
Bank owned life insurance | ( | ( | ( | ||||||||||||||
Long-term incentive plan | ( | ( | ( | ||||||||||||||
Nondeductible compensation expense | |||||||||||||||||
Other | |||||||||||||||||
Total income tax expense | $ | $ | $ |
(dollars in thousands) | 2021 | 2020 | |||||||||
Deferred tax assets: | |||||||||||
Bad debts | $ | $ | |||||||||
Pension and deferred compensation liability | |||||||||||
Nonaccrual loan interest | |||||||||||
Long-term incentive plan | |||||||||||
Lease liability | |||||||||||
Deferred loan fees | |||||||||||
Other | |||||||||||
Deferred tax liabilities: | |||||||||||
Depreciation | |||||||||||
Loan servicing rights | |||||||||||
State taxes | |||||||||||
Intangible assets | |||||||||||
REIT spillover dividend | |||||||||||
Prepaid expenses | |||||||||||
Lease right of use | |||||||||||
Other | |||||||||||
Valuation allowance | |||||||||||
Net deferred tax asset | $ | $ |
(dollars in thousands) | 2021 | 2020 | |||||||||
Beginning balance | $ | $ | |||||||||
New loans and advances | |||||||||||
Effect of changes in related parties | ( | ||||||||||
Repayments and renewals | ( | ( | |||||||||
Ending balance | $ | $ |
Nonvested Shares | Shares | Weighted-Average Grant-Date Fair Value | |||||||||
Nonvested at January 1, 2021 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Nonvested at December 31, 2021 | $ |
Nonvested Shares | Shares | Weighted-Average Grant-Date Fair Value | |||||||||
Nonvested at January 1, 2021 | $ | ||||||||||
Granted, net | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Nonvested at December 31, 2021 | $ |
Actual | Minimum Required For Capital Adequacy Purposes | For Capital Adequacy Purposes Plus Capital Conservation Buffer | Minimum "Required" to Be "Well" Capitalized Under "Prompt" Corrective Action Regulations | ||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||||||||||||||||||||||
As of December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
Total Capital (to Risk Weighted Assets) | |||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | $ | $ | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||
Bank | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Tier I Capital (to Risk Weighted Assets) | |||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | $ | $ | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||
Bank | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Common Equity Tier 1 (CET1) | |||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | $ | $ | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||
Bank | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Tier I Capital (to Average Assets) | |||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | $ | $ | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||
Bank | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
As of December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
Total Capital (to Risk Weighted Assets) | |||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | $ | $ | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||
Bank | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Tier I Capital (to Risk Weighted Assets) | |||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | $ | $ | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||
Bank | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Common Equity Tier 1 (CET1) | |||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | $ | $ | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||
Bank | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Tier I Capital (to Average Assets) | |||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | $ | $ | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||
Bank | $ | $ | $ | $ |
December 31, 2021 | |||||||||||||||||||||||||||||||||||
Gross Amounts of Recognized Assets/ Liabilities | Gross Amounts Offset in the Statement of Financial Position | Net Amounts presented in the Statement of Financial Position | Gross Amounts Not Offset in the Statement of Financial Position | ||||||||||||||||||||||||||||||||
(dollars in thousands) | Financial Instruments | Cash Collateral Position | Net Amount | ||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||
Interest Rate Swap Derivatives | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Total Assets | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
Interest Rate Swap Derivatives | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Total Liabilities | $ | $ | $ | $ | $ | ( | $ |
December 31, 2020 | |||||||||||||||||||||||||||||||||||
Gross Amounts of Recognized Assets/ Liabilities | Gross Amounts Offset in the Statement of Financial Position | Net Amounts presented in the Statement of Financial Position | Gross Amounts Not Offset in the Statement of Financial Position | ||||||||||||||||||||||||||||||||
(dollars in thousands) | Financial Instruments | Cash Collateral Position | Net Amount | ||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||
Interest Rate Swap Derivatives | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Total Assets | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
Interest Rate Swap Derivatives | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Total Liabilities | $ | $ | $ | $ | $ | ( | $ |
2021 | 2020 | ||||||||||||||||||||||
(dollars in thousands) | Fixed Rate | Variable Rate | Fixed Rate | Variable Rate | |||||||||||||||||||
Commercial loan lines of credit | $ | $ | $ | $ | |||||||||||||||||||
Standby letters of credit | |||||||||||||||||||||||
Real estate mortgage loans | |||||||||||||||||||||||
Real estate construction mortgage loans | |||||||||||||||||||||||
Home equity mortgage open-ended revolving lines | |||||||||||||||||||||||
Consumer loan open-ended revolving lines | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
2021 | 2020 | ||||||||||||||||||||||
Fixed Rate | Variable Rate | Fixed Rate | Variable Rate | ||||||||||||||||||||
Commercial loan | |||||||||||||||||||||||
Real estate mortgage loan | |||||||||||||||||||||||
Consumer loan open-ended revolving line |
December 31, | |||||||||||
(dollars in thousands) | 2021 | 2020 | |||||||||
ASSETS | |||||||||||
Deposits with Lake City Bank | $ | $ | |||||||||
Deposits with other depository institutions | |||||||||||
Cash | |||||||||||
Investments in banking subsidiary | |||||||||||
Investments in other subsidiaries | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES | |||||||||||
Dividends payable and other liabilities | $ | $ | |||||||||
Borrowings | |||||||||||
STOCKHOLDERS’ EQUITY | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Years Ended December 31, | |||||||||||||||||
(dollars in thousands) | 2021 | 2020 | 2019 | ||||||||||||||
Dividends from Lake City Bank | $ | $ | $ | ||||||||||||||
Dividends from non-bank subsidiaries | |||||||||||||||||
Other income | |||||||||||||||||
Interest expense | ( | ( | |||||||||||||||
Miscellaneous expense | ( | ( | ( | ||||||||||||||
INCOME BEFORE INCOME TAXES AND EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES | |||||||||||||||||
Income tax benefit | |||||||||||||||||
INCOME BEFORE EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES | |||||||||||||||||
Equity in undistributed income of subsidiaries | |||||||||||||||||
NET INCOME | $ | $ | $ | ||||||||||||||
COMPREHENSIVE INCOME | $ | $ | $ |
Years Ended December 31, | |||||||||||||||||
(dollars in thousands) | 2021 | 2020 | 2019 | ||||||||||||||
Cash flows from operating activities: | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Adjustments to net cash from operating activities: | |||||||||||||||||
Equity in undistributed income of subsidiaries | ( | ( | ( | ||||||||||||||
Other changes | |||||||||||||||||
Net cash from operating activities | |||||||||||||||||
Cash flows from financing activities | |||||||||||||||||
Repayment of long-term debt | ( | ||||||||||||||||
Proceeds from (payments on) short-term borrowings | ( | ||||||||||||||||
Payments related to equity incentive plans | ( | ( | ( | ||||||||||||||
Purchase of treasury stock | ( | ( | ( | ||||||||||||||
Sales of treasury stock | |||||||||||||||||
Dividends paid | ( | ( | ( | ||||||||||||||
Cash flows from financing activities | ( | ( | ( | ||||||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ( | |||||||||||||||
Cash and cash equivalents at beginning of the year | |||||||||||||||||
Cash and cash equivalents at end of the year | $ | $ | $ |
(dollars in thousand except share and per share data) | 2021 | 2020 | 2019 | ||||||||||||||
Basic earnings per common share: | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Weighted-average common shares outstanding | |||||||||||||||||
Basic earnings per common share | $ | $ | $ | ||||||||||||||
Diluted earnings per common share: | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Weighted-average common shares outstanding for basic earnings per common share | |||||||||||||||||
Add: Dilutive effect of assumed exercises of stock options and awards | |||||||||||||||||
Average shares and dilutive potential common shares | |||||||||||||||||
Diluted earnings per common share | $ | $ | $ |
(dollars in thousands) | Unrealized Gains and (Losses) on Available-for-Sales Securities | Defined Benefit Pension Items | Total | ||||||||||||||
Balance at January 1, 2021 | $ | $ | ( | $ | |||||||||||||
Other comprehensive income (loss) before reclassification | ( | ( | |||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | ( | ( | |||||||||||||||
Net current period other comprehensive income (loss) | ( | ( | |||||||||||||||
Balance at December 31, 2021 | $ | $ | ( | $ |
(dollars in thousands) | Unrealized Gains and (Losses) on Available-for-Sales Securities | Defined Benefit Pension Items | Total | ||||||||||||||
Balance at January 1, 2020 | $ | $ | ( | $ | |||||||||||||
Other comprehensive income (loss) before reclassification | ( | ||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | ( | ( | |||||||||||||||
Net current period other comprehensive income (loss) | |||||||||||||||||
Balance at December 31, 2020 | $ | $ | ( | $ |
Details about Accumulated Other Comprehensive Income Components | Amount Reclassified From Accumulated Other Comprehensive Income | Affected Line Item in the Statement Where Net Income is Presented | |||||||||
2021 | |||||||||||
(dollars in thousands) | |||||||||||
Realized gains and (losses) on available-for-sale securities | $ | Net securities gains | |||||||||
Tax effect | ( | Income tax expense | |||||||||
Subtotal | Net of tax | ||||||||||
Amortization of defined benefit pension items(1) | ( | Salaries and employee benefits | |||||||||
Tax effect | Income tax expense | ||||||||||
Subtotal | ( | Net of tax | |||||||||
Total reclassifications for the period | $ | Net income | |||||||||
2020 | |||||||||||
(dollars in thousands) | |||||||||||
Realized gains and (losses) on available-for-sale securities | $ | Net securities gains | |||||||||
Tax effect | ( | Income tax expense | |||||||||
Subtotal | Net of tax | ||||||||||
Amortization of defined benefit pension items(1) | ( | Salaries and employee benefits | |||||||||
Tax effect | Income tax expense | ||||||||||
Subtotal | ( | Net of tax | |||||||||
Total reclassifications for the period | $ | Net income | |||||||||
2019 | |||||||||||
(dollars in thousands) | |||||||||||
Realized gains and (losses) on available-for-sale securities | $ | Net securities gains | |||||||||
Tax effect | ( | Income tax expense | |||||||||
Subtotal | Net of tax | ||||||||||
Amortization of defined benefit pension items(1) | ( | Salaries and employee benefits | |||||||||
Tax effect | Income tax expense | ||||||||||
Subtotal | ( | Net of tax | |||||||||
Total reclassifications for the period | $ | ( | Net income |
2021 | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | |||||||||||||||||||
Interest income | $ | $ | $ | $ | |||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Net interest income | |||||||||||||||||||||||
Provision for credit losses | ( | ||||||||||||||||||||||
Net interest income after provision | |||||||||||||||||||||||
Noninterest income | |||||||||||||||||||||||
Noninterest expense | |||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per common share | $ | $ | $ | $ |
2020 | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | |||||||||||||||||||
Interest income | $ | $ | $ | $ | |||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Net interest income | |||||||||||||||||||||||
Provision for credit losses | |||||||||||||||||||||||
Net interest income after provision | |||||||||||||||||||||||
Noninterest income | |||||||||||||||||||||||
Noninterest expense | |||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per common share | $ | $ | $ | $ |
Years ending December 31, (in thousands) | Operating Lease Obligation | ||||
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 and thereafter | |||||
Total undiscounted lease payments | |||||
Less imputed interest | ( | ||||
$ | |||||
$ |
Year Ended | Year Ended | Year Ended | |||||||||||||||
December 31, 2021 | December 31, 2020 | December 31, 2019 | |||||||||||||||
Lease cost | |||||||||||||||||
Operating lease cost | $ | $ | $ | ||||||||||||||
Short-term lease cost | |||||||||||||||||
Total lease cost | $ | $ | $ |
Other information | |||||||||||||||||
Operating cash outflows from operating leases | $ | $ | $ | ||||||||||||||
Weighted-average remaining lease term - operating leases | |||||||||||||||||
Weighted average discount rate - operating leases | % | % | % |
Exhibit No. | Document | Location | ||||||||||||
3.1 | Exhibit 3.1 to the Company’s Form 8-K filed on March 2, 2009 | |||||||||||||
3.2 | Exhibit 3.2 to the Company’s Form 10-K for the fiscal year ended December 31, 2012 | |||||||||||||
3.3 | Exhibit 3.2 to the Company’s Form 10-K For the fiscal year ended December 31, 2011 | |||||||||||||
4.1 | Exhibit 4.1 to the Company’s Form 10-K for the fiscal year ended December 31, 2003 | |||||||||||||
4.2 | Exhibit 4.4 to the Company's Form 10-K for the fiscal year ended December 31, 2019 | |||||||||||||
10.1* | Exhibit 10.1 to the Company’s Form S-8 filed on May 14, 2008 | |||||||||||||
10.2* | Exhibit 10.4 to the Company’s Form 10-K for the fiscal year ended December 31, 2008 | |||||||||||||
10.3* | Exhibit 10.1 of the Company’s Form 8-K filed on March 2, 2016 | |||||||||||||
10.4* | Exhibit 10.7 to the Company’s Form 10-K for the fiscal year ended December 31, 2008 | |||||||||||||
10.5* | Exhibit 10.6 to the Company's Form 10-K for the fiscal year ended December 31, 2020 | |||||||||||||
10.6* | Exhibit 10.11 to the Company’s Form 10-K for the fiscal year ended December 31, 2004 | |||||||||||||
10.7* | Exhibit 10.1 to the Company’s Form10-Q for the quarter ended September 30, 2009 | |||||||||||||
10.8* | Appendix A to the Definitive Proxy Statement on Form DEF-14A filed on March 4, 2013 | |||||||||||||
10.9* | Exhibit 4.3 to the Company’s Form S-8 filed on July 9, 2013 | |||||||||||||
10.10* | Exhibit 4.4 to the Company’s Form S-8 filed on July 9, 2013 | |||||||||||||
10.11* | Exhibit 4.5 to the Company’s Form S-8 filed on July 9, 2013 | |||||||||||||
10.12* | Exhibit 4.5 to the Company’s Form S-8 filed on April 13, 2017 | |||||||||||||
10.13* | Exhibit 4.6 to the Company’s Form S-8 filed on April 13, 2017 | |||||||||||||
10.14* | Exhibit 4.7 to the Company’s Form S-8 filed on April 13, 2017 | |||||||||||||
10.15* | Exhibit 4.8 to the Company’s Form S-8 filed on April 13, 2017 | |||||||||||||
10.16* | Exhibit 4.9 to the Company’s Form S-8 filed on April 13, 2017 | |||||||||||||
10.17* | Exhibit 10.1 to the Company's Form 10-Q for the quarter ended September 30, 2021 | |||||||||||||
21.0 | Attached hereto | |||||||||||||
23.1 | Attached hereto | |||||||||||||
31.1 | Attached hereto | |||||||||||||
31.2 | Attached hereto | |||||||||||||
32.1 | Attached hereto | |||||||||||||
32.2 | Attached hereto |
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document | |||||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | |||||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||||||
104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document contained in Exhibit 101 |
LAKELAND FINANCIAL CORPORATION | ||||||||
Date: February 23, 2022 | By | /s/ David M. Findlay | ||||||
David M. Findlay, Chief Executive Officer |
Name | Title | Date | ||||||||||||
/s/ David M. Findlay | President, Chief Executive Officer and Director | |||||||||||||
David M. Findlay | (principal executive officer) | February 23, 2022 | ||||||||||||
/s/ Lisa M. O’Neill | Executive Vice President, Chief Financial Officer | |||||||||||||
Lisa M. O’Neill | (principal financial officer) | February 23, 2022 | ||||||||||||
/s/ Brok A. Lahrman | Senior Vice President, Finance and Chief Accounting Officer | |||||||||||||
Brok A. Lahrman | (principal accounting officer) | February 23, 2022 | ||||||||||||
/s/ A. Faraz Abbasi | ||||||||||||||
A. Faraz Abbasi | Director | February 23, 2022 | ||||||||||||
/s/ Blake W. Augsburger | ||||||||||||||
Blake W. Augsburger | Director | February 23, 2022 | ||||||||||||
/s/ Robert E. Bartels, Jr. | ||||||||||||||
Robert E. Bartels, Jr. | Director | February 23, 2022 | ||||||||||||
/s/Darrianne P. Christian | ||||||||||||||
Darrianne P. Christian | Director | February 23, 2022 | ||||||||||||
/s/ Daniel F. Evans, Jr. | ||||||||||||||
Daniel F. Evans, Jr. | Director | February 23, 2022 | ||||||||||||
/s/ Michael L. Kubacki | ||||||||||||||
Michael L. Kubacki | Chairman and Director | February 23, 2022 |
/s/ Emily E. Pichon | ||||||||||||||
Emily E. Pichon | Director | February 23, 2022 | ||||||||||||
/s/ Steven D. Ross | ||||||||||||||
Steven D. Ross | Director | February 23, 2022 | ||||||||||||
/s/ Brian J. Smith | ||||||||||||||
Brian J. Smith | Director | February 23, 2022 | ||||||||||||
/s/ Bradley J. Toothaker | ||||||||||||||
Bradley J. Toothaker | Director | February 23, 2022 | ||||||||||||
/s/ Ronald D. Truex | ||||||||||||||
Ronald D. Truex | Director | February 23, 2022 | ||||||||||||
/s/ M. Scott Welch | ||||||||||||||
M. Scott Welch | Director | February 23, 2022 |
Date: February 23, 2022 | /s/David M. Findlay | ||||
David M. Findlay | |||||
Chief Executive Officer |
Date: February 23, 2022 | /s/Lisa M. O’Neill | ||||
Lisa M. O’Neill | |||||
Chief Financial Officer |
/s/David M. Findlay | |||||
David M. Findlay | |||||
Chief Executive Officer | |||||
February 23, 2022 |
/s/Lisa M. O’Neill | |||||
Lisa M. O’Neill | |||||
Chief Financial Officer | |||||
February 23, 2022 |
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Audit Information |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | Crowe LLP |
Auditor Location | South Bend, Indiana |
Auditor Firm ID | 173 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Total ending allowance balance | $ 67,773 | $ 61,408 |
Common stock, shares authorized (in shares) | 90,000,000 | 90,000,000 |
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares issued (in shares) | 25,777,609 | 25,713,408 |
Common stock, shares outstanding (in shares) | 25,300,793 | 25,239,748 |
Treasury stock, at cost (in shares) | 476,816 | 473,660 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 95,733 | $ 84,337 | $ 87,047 |
Change in securities available -for-sale: | |||
Unrealized holding gain (loss) on securities available-for-sale arising during the period | (14,553) | 20,148 | 23,438 |
Reclassification adjustment for (gains) losses included in net income | (797) | (433) | (142) |
Net securities gain (loss) activity during the period | (15,350) | 19,715 | 23,296 |
Tax effect | 3,224 | (4,140) | (4,893) |
Net of tax amount | (12,126) | 15,575 | 18,403 |
Defined benefit pension plans: | |||
Net gain (loss) on defined benefit pension plans | 390 | (105) | (409) |
Amortization of net actuarial loss | 242 | 251 | 205 |
Net gain (loss) on activity during the period | 632 | 146 | (204) |
Tax effect | (157) | (36) | 51 |
Net of tax amount | 475 | 110 | (153) |
Total other comprehensive income (loss), net of tax | (11,651) | 15,685 | 18,250 |
Comprehensive income | $ 84,082 | $ 100,022 | $ 105,297 |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends declared, per share (in USD per share) | $ 1.36 | $ 1.20 | $ 1.16 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations and Principles of Consolidation: The consolidated financial statements include Lakeland Financial Corporation (the “Holding Company”) and its wholly owned subsidiaries, Lake City Bank (the “Bank”) and LCB Risk Management, Inc., together referred to as (the “Company”). On December 18, 2006, LCB Investments II, Inc. was formed as a wholly owned subsidiary of the Bank incorporated in Nevada to manage a portion of the Bank’s investment portfolio beginning in 2007. On December 21, 2006, LCB Funding, Inc., a real estate investment trust incorporated in Maryland, was formed as a wholly owned subsidiary of LCB Investments II, Inc. On December 28, 2012, LCB Risk Management, Inc., a captive insurance company incorporated in Nevada, was formed as a wholly owned subsidiary of the Holding Company. All intercompany transactions and balances are eliminated in consolidation. The Company provides financial services through the Bank, a full-service commercial bank with 51 branch offices in fifteen counties in Northern and Central Indiana. The Company provides commercial, retail, trust and investment services to its customers. Commercial products include commercial loans and technology-driven solutions to meet commercial customers’ treasury management needs such as mobile business banking and online treasury management services. Retail banking clients are provided a wide array of traditional retail banking services, including lending, deposit and investment services. Retail lending programs are focused on mortgage loans, home equity lines of credit and traditional retail installment loans. The Company provides credit card services to retail and commercial customers through its retail card program and merchant processing activity. The Company provides wealth advisory and trust clients with traditional personal and corporate trust services. The Company also provides retail brokerage services, including an array of financial and investment products such as annuities and life insurance. Other financial instruments, which represent potential concentrations of credit risk, include deposit accounts in other financial institutions. Use of Estimates: To prepare financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”), management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided and future results could differ. Cash Flows: Cash and cash equivalents include cash, demand deposits in other financial institutions and short-term investments and certificates of deposit with maturities of 90 days or less. Cash flows are reported net for customer loan and deposit transactions, and certain short-term borrowings. Securities: Securities are classified as available-for-sale when they might be sold before maturity. Securities available-for-sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income (loss), net of tax. Securities are classified as held-to-maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Purchase premiums or discounts are recognized in interest income using the interest method over the terms of the securities or over estimated lives for mortgage-backed securities. Gains and losses on sales are based on the amortized cost of the security sold and recorded on the trade date. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, nature of the security, the underlying collateral, and the financial condition of the issuer, among other factors. If this assessment indicates a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for available-for-sale securities losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for available-for-sale securities losses is recognized in other comprehensive income (loss). NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Changes in the allowance for available-for-sale securities are recorded as a component of credit loss expense. Losses are charged against the allowance for available-for-sale securities losses when management believes the uncollectibility of available-for-sale security is confirmed or when either criteria regarding intent or requirement to sell is met. Real Estate Mortgage Loans Held-for-Sale: Loans held for sale are reported at the lower of cost or fair value on an aggregate basis. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. Loan sales occur on the delivery date agreed to in the relevant commitment agreement. The Company retains servicing on the majority of loans sold. The carrying value of loans sold is reduced by the amount allocated to the servicing right. The gain or loss on the sale of loans is the difference between the carrying value of the loans sold and the funds received from the sale. Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unearned interest, deferred loan fees and costs, and an allowance for credit losses. Interest income is reported on the interest method and includes amortization of net deferred loan fees and costs over the loan term. All classes of commercial and industrial, commercial real estate and multi-family residential, agri-business and agricultural, other commercial and consumer 1-4 family mortgage loans for which collateral is insufficient to cover all principal and accrued interest are reclassified as nonaccrual loans, on or before the date when the loan becomes 90 days delinquent. When a loan is classified as a nonaccrual loan, interest on the loan is no longer accrued, all unpaid accrued interest is reversed and interest income is subsequently recorded on the cash-basis or cost-recovery method. Accrual status is resumed when all contractually due payments are brought current and future payments are reasonably assured. Other consumer loans are not placed on a nonaccrual status since these loans are charged-off when they have been delinquent from 90 to 180 days, and when the related collateral, if any, is not sufficient to offset the indebtedness. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated and individually analyzed loans. The recorded investment in loans is the loan balance net of unamortized deferred loan fees and costs. The total amount of accrued interest on loans as of December 31, 2021 and 2020 was $10.0 million and $14.6 million. Allowance for Credit Losses: The allowance for credit losses is a valuation allowance to provide for expected credit losses. Losses are charged against the allowance when management believes that the principal is uncollectible. Subsequent recoveries, if any, are credited to the allowance. Allocations of the allowance are made for specific loans and for pools of similar types of loans, although the entire allowance is available for any loan that, in management's judgment, should be charged against the allowance. A provision for credit losses is taken based on management's ongoing evaluation of the appropriate allowance balance. A formal evaluation of the adequacy of the credit loss allowance is conducted monthly. The ultimate recovery of all loans is susceptible to future market factors beyond the Company's control. The determination of the appropriate allowance is inherently subjective, as it requires significant estimates by management. The Company has an established process to determine the adequacy of the allowance for credit losses that generally includes consideration of changes in the nature and volume of the loan portfolio and overall portfolio quality, along with current and forecasted economic conditions that may affect borrowers' ability to repay. Consideration is not limited to these factors although they represent the most commonly cited factors. To determine the specific allocation levels for individual credits, management considers the current valuation of collateral and the amounts and timing of expected future cash flows as the primary measures. Management also considers trends in adversely classified loans based upon an ongoing review of those credits. With respect to pools of similar loans, an appropriate level of general allowance is determined by portfolio segment using a probability of default-loss given default ("PD/LGD") model, subject to a floor. A default can be triggered by one of several different asset quality factors, including past due status, nonaccrual status, TDR status or if the loan has had a charge-off. This PD is then combined with a LGD derived from historical charge-off data to construct a loss rate. This loss rate is then supplemented with adjustments for reasonable and supportable forecasts of relevant economic indicators, particularly the unemployment rate forecast from the Federal Open Market Committee's Summary of Economic Projections, as well as portfolio trends based on the risks present for each portfolio segment. These environmental factors include consideration NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) of portfolio trends and conditions; industry conditions; and effects of changes in credit concentrations. It is also possible that these factors could include social, political, economic, and terrorist events or activities. All of these factors are susceptible to change, which may be significant. As a result of this detailed process, the allowance results in two forms of allocations, specific and general. These two components represent the total allowance for credit losses deemed adequate to cover expected losses within the loan portfolio. Commercial loans are subject to a dual standardized grading process administered by the credit administration function. These grade assignments are performed independent of each other and a consensus is reached by credit administration and the loan review officer. Specific allowances are established in cases where management has identified significant conditions or circumstances related to an individual credit that indicate it should be evaluated on an individual basis. Considerations with respect to specific allocations for these individual credits include, but are not limited to, the following: (a) the sufficiency of the customer's cash flow or net worth to repay the loan; (b) the adequacy of the discounted value of collateral relative to the loan balance; (c) whether the loan has been criticized in a regulatory examination; (d) whether the loan is nonperforming; (e) any other reasons the ultimate collectability of the loan may be in question; or (f) any unique loan characteristics that require special monitoring. Allocations are also applied to categories of loans considered not to be individually analyzed, but for which the rate of loss is expected to be consistent with or greater than historical averages. Such allocations are based on past loss experience and information about specific borrower situations and estimated collateral values. These general pooled loan allocations are performed for portfolio segments of commercial and industrial; commercial real estate, multi-family, and construction; agri-business and agricultural; other commercial loans; and consumer 1-4 family mortgage and other consumer loans. General allocations of the allowance are determined by a historical loss rate based on the calculation of each pool's probability of default-loss given default, subject to a floor. The length of the historical period for each pool is based on the average life of the pool. The historical loss rates are all supplemented with consideration of economic conditions and portfolio trends. The risk characteristics of each of the identified portfolio segments are as follows: Commercial and Industrial - Borrowers may be subject to industry conditions including decreases in product demand; increase in material or other production costs that cannot be immediately recaptured in the sales or distribution cycle; interest rate increases that could have an adverse impact on profitability; non-payment of credit that has been extended under normal vendor terms for goods sold or services; and interruption related to the importing or exporting of production materials or sold products. Commercial Real Estate and Multi-Family Residential - Borrowers may be subject to potential adverse market conditions that cause a decrease in market value or lease rates; the potential for environmental impairment from events occurring on subject or neighboring properties; and obsolescence in location or function. Multi-Family Residential is also subject to adverse market conditions associated with a change in governmental or personal funding sources for tenants; over supply of units in a specific region; a shift in population; and reputational risks. Construction and Land Development risks include slower absorption than anticipated on speculative projects; deterioration in market conditions that may impact a project's value; unforeseen costs not considered in the original construction budget; or any other factors that may impact the completion or success of the project. Agri-business and Agricultural - Borrower may be subject to adverse market or weather conditions including changes in local or foreign demand; lower yields than anticipated; political or other impact on storage, distribution or use; foreign trade policies including tariffs; and exposure to increasing commodity prices which result in higher production, distribution or exporting costs. Other Commercial - Borrowers may be subject to the uninterrupted flow of funds to states and other political subdivisions for the purpose of debt repayments on loans held by the Bank. Consumer 1-4 Family Mortgage - Borrowers may be subject to adverse employment conditions in the local economy leading to increased default rates; decreased market values from oversupply in a geographic area; and impact to the borrowers' ability to maintain payments in the event of incremental rate increases on adjustable rate mortgages. Other Consumer - Borrowers may be subject to adverse employment conditions in the local economy which may lead to higher default rates; and decreases in the value of underlying collateral. A loan is individually analyzed for specific allocation when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans, for which the terms have been modified and a concession has been granted for borrowers experiencing financial difficulties, are considered troubled debt restructurings and classified as individually evaluated and may be either accruing or non-accruing. Nonaccrual troubled debt restructurings follow the same policy as described above for other loans. Individual evaluation for NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) troubled debt restructurings is measured at the present value of estimated future cash flows using the loan’s effective rate at inception or at discounted collateral value for collateral dependent loans. Allocations are analyzed individually or in total for smaller-balance loans of similar nature such as all classes of consumer 1-4 family and other consumer loans, and individually for all classes of commercial and industrial, commercial real estate and multi-family, agribusiness and agricultural and other commercial loans. The Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis for Special Mention, Substandard and Doubtful grade loans and annually on Pass grade loans over $250,000. Factors considered by management in determining individual evaluation include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as individually evaluated. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. If a loan is individually evaluated, a portion of the allowance may be allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral less anticipated costs to sell. All classes of commercial and industrial, commercial real estate and multifamily residential, agribusiness and agricultural, other commercial and consumer 1-4 family mortgage loans that become delinquent beyond 90 days are analyzed and a charge-off is taken when it is determined that the underlying collateral, if any, is not sufficient to offset the indebtedness. Troubled debt restructured loans are considered for removal from troubled debt restructuring status in the year following modification or at time of subsequent restructuring for loans with cumulative principal forgiveness if the interest rate is considered a market rate at the time of modification and it has been performing according to the terms of the modification for a reasonable period of time long enough to observe an ability to repay under the modified terms. If removed from troubled debt restructuring status, the loan continues to be individually evaluated for specific allocation with either the present value of estimated future cash flows using the loan’s effective rate at inception or at discounted collateral value for collateral dependent loans. In addition, troubled debt restructured loans with subsequent modifications that do not have cumulative principal forgiveness are considered for removal from troubled debt restructuring status at the time of the subsequent modification if the following circumstances exist: (1) at the time of the subsequent restructuring, the borrower is not experiencing financial difficulties; (2) under the terms of the subsequent restructuring agreement no concession has been granted to the borrower; and (3)the subsequent restructuring agreement includes market terms that are no less favorable than those that would be offered for comparable new debt. Upon meeting these criteria, the loan is no longer individually evaluated and is no longer disclosed as a troubled debt restructuring. Due to the imprecise nature of estimating the allowance for credit losses, the Company's allowance for credit losses includes an unallocated component. The unallocated component of the allowance for credit losses incorporates the Company's judgmental determination of potential expected losses that may not be fully reflected in other allocations, including factors such as the level of classified credits, economic uncertainties, industry trends impacting specific portfolio segments, broad portfolio quality trends, and trends in the composition of the Company's large commercial loan portfolio and related large dollar exposures to individual borrowers. As a practical expedient, the Company has elected to disclose accrued interest separately from loan principal balances on the consolidated balance sheet. Additionally, when a loan is placed on non-accrual, interest payments are reversed through interest income. For off balance sheet credit exposures outlined in the ASU at 326-20-30-11, it is the Company's position that nearly all of the unfunded amounts on lines of credit are unconditionally cancellable, and therefore not subject to having a liability set up, which matches the current accounting conclusion in the incurred loss environment. Investments in Limited Partnerships: The Company enters into and invests in limited partnerships in order to invest in affordable housing projects to support Community Reinvestment Act activities and secondarily to obtain available tax benefits. The Company is a limited partner in these investments and, as such, the Company is not involved in the management or operation of such investments. These investments are accounted for using the equity method of accounting. Under the equity method of accounting, the Company records its share of the partnership’s earnings or losses in its income statement and adjusts the carrying amount of the investments on the consolidated balance sheet. These investments are evaluated for impairment when events indicate the carrying amount may not be recoverable. The investments recorded at December 31, 2021 and 2020 were $9.4 million and $9.2 million, respectively and are included with other assets in the consolidated balance sheet. The Company also has a commitment to fund an additional $2.2 million at December 31, 2021 in four of the limited partnerships compared to $2.6 million at December 31, 2020, which is included with other liabilities in the consolidated balance sheet. NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Foreclosed Assets: Assets acquired through 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. If fair value declines, a valuation allowance is recorded through expense. Costs incurred after acquisition are expensed. At December 31, 2021 and 2020, the balance of other real estate owned was $196,000 and $316,000, respectively, and is included with other assets on the consolidated balance sheet. Land, Premises and Equipment, Net: Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed on the straight-line method over the useful lives of the assets. Premises and improvements assets have useful lives between 5 and 40 years. Equipment and furniture assets have useful lives between 3 and 7 years. Loan Servicing Rights: Servicing rights are recognized separately when they are acquired through sales of loans. When mortgage loans are sold, servicing rights are initially recorded at fair value with the income statement effect recorded in mortgage banking income. Fair value is based on a valuation model that calculates the present value of estimated future net servicing income. All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. The amortization of servicing rights is netted against mortgage banking income. Servicing fees totaled $1.2 million, $1.2 million and $1.1 million for the years ended December 31, 2021, 2020 and 2019, respectively. Late fees and ancillary fees related to loan servicing are not material. Servicing rights are evaluated for impairment based upon the fair value of the rights as compared to carrying amount. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics, such as loan type, term and interest rate. Any impairment of a grouping is reported as a valuation allowance, to the extent that fair value is less than the carrying amount. If the Company later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income. Changes in the valuation allowance are reported with mortgage banking income on the income statement. The fair values of servicing rights are subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and losses. The carrying value of mortgage servicing rights, which is included with other assets in the consolidated balance sheet, was $2.4 million and $3.5 million as of December 31, 2021 and 2020, respectively. Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of these loans were $375.4 million and $351.0 million at December 31, 2021 and 2020, respectively. Custodial escrow balances maintained in connection with serviced loans were $1.7 million at year end 2021 and 2020. Servicing fee income (loss), which is included in loan and service fees on the income statement, is recorded for fees earned for servicing loans. Fees earned for servicing loans are based on a contractual percentage of the outstanding principal amount of the loan and are recorded as income when earned. Transfers of Financial Assets: Transfers of financial assets are accounted for as sales, when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Mortgage Banking Derivatives: Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as free-standing derivatives. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The Company enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into, in order to hedge the change in interest rates resulting from its commitments to fund the loans. Changes in fair values of these derivatives are included in mortgage banking income. Interest Rate Swap Derivatives: The Company offers a derivative product to certain creditworthy commercial banking customers. This product allows the commercial banking customers to enter into an agreement with the Company to swap a variable rate loan to a fixed rate. These derivative products are designed to reduce, eliminate or modify the borrower’s interest rate exposure. The extension of credit incurred in connection with these derivative products is subject to the same approval and underwriting standards as traditional credit products. The Company limits its risk exposure by simultaneously entering into a similar, offsetting swap agreement with a separate, well-capitalized and highly rated counterparty previously approved by the Company’s Asset Liability Committee. By using these interest rate swap arrangements, the Company is also better insulated from the interest rate risk associated with underwriting fixed-rate loans and is better able to meet customer demand for fixed rate loans. These derivative contracts are not designated against specific assets or liabilities and, therefore, do not qualify for hedge accounting. The derivatives are recorded as assets and liabilities on the balance sheet at fair value with changes in fair value recorded in non-interest income for both the commercial banking customer swaps and the related offsetting swaps. The fair value of the derivative instruments incorporates a consideration of credit risk (in accordance with ASC 820), resulting in some potential volatility in earnings each period. The notional amount of the combined interest rate swaps with customers and counterparties at December 31, 2021 and 2020 was $796.0 million and $819.1 million, respectively. The fair value of the interest rate swap asset was $14.3 million and $21.8 million and the fair value of the interest rate swap liability was $14.3 million and $21.8 million at December 31, 2021 and 2020, respectively. The Company is a party in risk participation transactions of interest rate swaps, which had a total notional amount of $4.6 million and 5.0 million at December 31, 2021 and 2020, respectively. Bank Owned Life Insurance: At December 31, 2021 and 2020, the Company owned $91.1 million and $90.4 million, respectively, of life insurance policies on certain officers to provide a life insurance benefit for these officers. At December 31, 2021 and 2020, the Company also owned $6.6 million and $4.8 million, respectively, of variable life insurance on certain officers related to a deferred compensation plan. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, i.e., the cash surrender value adjusted for other changes or other amounts due that are probable at settlement. Goodwill and Other Intangible Assets: All goodwill on the Company’s consolidated balance sheet resulted from business combinations prior to January 1, 2009 and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is not amortized, but assessed at least annually for impairment and any such impairment will be recognized in the period identified. FHLB and Federal Reserve Bank Stock: FHLB and Federal Reserve Bank stock are carried at cost in other assets, classified as a restricted security and are periodically evaluated for impairment based on ultimate recoverability of par value. Both cash and stock dividends are reported as income. Repurchase Agreements: Substantially all repurchase agreement liabilities represent amounts advanced by various customers. Securities are pledged to cover these liabilities, which are not covered by federal deposit insurance. This product was discontinued during 2019. Long-term Assets: Premises and equipment, and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value. NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Benefit Plans: The Company has a noncontributory defined benefit pension plan, which covered substantially all employees until the plan was frozen effective April 1, 2000. Funding of the plan equals or exceeds the minimum funding requirement determined by the actuary. Pension expense is the net of interest cost, return on plan assets and amortization of gains and losses not immediately recognized. Benefits are based on years of service and compensation levels. The Company maintains a 401(k) profit sharing plan for all employees meeting certain age and service requirements. The Company contributions are based upon the percentage of budgeted net income earned during the year. An employee deferred compensation plan is available to certain employees with returns based on investments in mutual funds. The Company maintains a directors’ deferred compensation plan. Effective January 1, 2003, the directors’ deferred compensation plan was amended to restrict the deferral to be in stock only and deferred directors’ fees are included in equity. The Company acquires shares on the open market and records such shares as treasury stock. Revenue Recognition: All of the Company’s revenue from contracts with customers in the scope of ASC 606 is recognized within noninterest income. The following is a description of principal activities from which we generate revenue. Revenues are recognized as the Company satisfies its obligations with our customers, in an amount that reflects the consideration that we expect to receive in exchange for those services. Wealth advisory fees The Company provides wealth advisory services to its customers and earns fees from its contracts with trust customers to manage assets for investment and/or to transact on their accounts. These fees are primarily earned over time as the Company provides the contracted monthly, quarterly, or annual services and are generally assessed based on a tiered scale of the market value of assets under management (AUM) at month-end. Fees that are transaction based, including trade execution services, are recognized at the point in time that the transaction is executed. Other related services, such as escrow accounts that are based on a fixed schedule, are recognized when the services are rendered. Investment brokerage services The Company provides investment brokerage services through a full service brokerage and investment and advisory firm, Cetera Investment Services LLC (“Cetera”). The Company receives commissions from Cetera on a monthly basis based upon customer activity for the month. The fees are recognized monthly and a receivable is recorded until commissions are generally paid by the 5th business day of the following month. Because the Company (i) acts as an agent in arranging the relationship between the customer and the Cetera and (ii) does not control the services to the customers, investment brokerage service fees are presented net of Cetera’s related costs. Service charges on deposit accounts The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer’s balance. Interchange income The Company provides the ability to transact on certain deposit accounts through the use of debit cards by outsourcing the services through third party service providers. Performance obligations are met on a transactional basis and income is recognized monthly based on transaction type and volume. Under the accounting standards in effect in the prior period, revenue was previously recognized net of the third party’s costs. Under ASC 606, fees from interchange income related to its customers use of debit cards will be reported gross in loan and service fees under noninterest income. The cost of using third party providers for these interchange services are reported in data processing fees and supplies under noninterest expense. NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Gain on sale of other real estate (OREO) owned financed by seller On occasion, the Company underwrites a loan to purchase property owned by the Company. Under ASC 606, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain (loss) on sale if a significant financing component is present. Debit card incentive rebates The Company receives incentive rebates based on debit card transaction volume. Performance obligations are met on a transactional basis and income is recognized monthly based on transaction volume. Under the accounting standards in effect in the prior period, revenue was previously recognized in other income under noninterest income. Under ASC 606, these rebates related to debit card transaction volume are reported as a contra expense in data processing fees and supplies under noninterest expense. Stock Based Compensation: Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant adjusted for the present value of expected dividends is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. Certain of the restricted stock awards are performance based, as more fully discussed in Note 15 – Stock Based Compensation. Income Taxes: Annual consolidated federal and state income tax returns are filed by the Company. Deferred income tax assets and liabilities are determined using the liability (or balance sheet) method. Income tax expense is recorded based on the amount of taxes due on its tax return plus net deferred taxes computed based upon the expected future tax consequences of temporary differences between carrying amounts and tax basis of assets and liabilities, using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is more likely of being realized on examination than not. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. Off-Balance Sheet Financial Instruments: Financial instruments include credit instruments, such as commitments to make loans and standby letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. The fair value of standby letters of credit is recorded as a liability during the commitment period. Earnings Per Common Share: Basic earnings per common share is net income divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock options, restricted stock awards and warrants. Earnings and dividends per share are restated for all stock splits and dividends through the date of issue of the financial statements. The common shares included in treasury stock for 2021 and 2020 were 476,816 and 473,660 shares, respectively. Common stock that has been purchased under the directors’ deferred compensation plan, described above, is included in the treasury stock total and represented 187,715 and 184,559 shares of treasury stock as of December 31, 2021 and 2020, respectively. Because these shares are held in trust for the participants, NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) they are treated as outstanding when computing the weighted-average common shares outstanding for the calculation of both basic and diluted earnings per share. During the year ended December 31, 2020, the Company repurchased 289,101 of its common shares at a weighted average price of $34.63 per share. Treasury stock is carried at cost. Comprehensive Income: Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on securities available-for-sale and changes in the funded status of the pension plan, which are also recognized as separate components of equity. Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. The Bank discovered potentially fraudulent activity by a former treasury management client involving multiple banks. The former client subsequently filed several related bankruptcy cases, captioned In re Interlogic Outsourcing, Inc., et al., which are pending in the United States Bankruptcy Court for the Western District of Michigan. On April 27, 2021, the bankruptcy court entered an order approving an amended plan of liquidation, which was filed by the former client, other debtors and bankruptcy plan proponents, and approving the consolidation of the assets in the aforementioned cases under the Khan IOI Consolidated Estate Trust. On August 9, 2021, the liquidating trustee for the bankruptcy estates filed a complaint against the Bank and the Company, and has agreed to stay prosecution of the action through March 31, 2022. The action is focused on a series of business transactions among the client, related entities, and the Bank, which the liquidating trustee alleges are voidable under applicable federal bankruptcy and state law. The complaint also addresses treatment of the Bank’s claims filed in the bankruptcy cases. Based on current information, we have determined that a material loss is neither probable nor estimable at this time, and the Bank and the Company intend to vigorously defend themselves against all allegations asserted in the complaint. Management does not believe there currently are matters that will have a material effect on the financial statements. Restrictions on Cash: The Federal Reserve Bank eliminated the reserve requirement for all depository institutions in March of 2020. Therefore, the Company was not required to have cash on hand or on deposit with the Federal Reserve Bank to meet regulatory reserve and clearing requirements at December 31, 2021 and 2020. Dividend Restriction: Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the Company or by the Company to its stockholders. These restrictions currently pose no practical limit on the ability of the Bank or Company to pay dividends at historical levels. Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 5 - Fair Value. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. Operating Segments: The Company’s chief decision-makers monitor and evaluate financial performance on a Company-wide basis. All of the Company’s financial service operations are similar and considered by management to be aggregated into one reportable operating segment. While the Company has assigned certain management responsibilities by region and business-line, the Company’s chief decision-makers monitor and evaluate financial performance on a Company-wide basis. The majority of the Company’s revenue is from the business of banking and the Company’s assigned regions have similar economic characteristics, NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) products, services and customers. Accordingly, all of the Company’s operations are considered by management to be aggregated in one reportable operating segment. Adoption of New Accounting Standards: In June 2016, the FASB issued ASU 2016-13 "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." This update, commonly referred to as the current expected credit losses methodology (“CECL”), changes the accounting for credit losses on loans and debt securities. Under the new guidance, the Company’s measurement of expected credit losses is based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. For loans, this measurement takes place at the time the financial asset is first added to the balance sheet and periodically thereafter. This differs significantly from the “incurred loss” model previously required, but still permitted, under GAAP, which delays recognition until it is probable a loss has been incurred. In addition, the guidance modifies the other-than-temporary impairment model for available-for-sale debt securities to require an allowance for credit impairment instead of a direct write-down, which allows for reversal of credit impairments in future periods. This guidance was effective, subject to optional delay discussed below, for the Company for fiscal years beginning after December 15, 2019, including interim periods in those fiscal years. As previously disclosed, the Company implemented the CECL methodology and ran it concurrently with the historical incurred method. Under a provision provided by the CARES Act, the Company elected to delay the adoption of FASB’s new rule covering the CECL standard. On December 27, 2020, then-President Trump signed into law the Consolidated Appropriations Act, 2021. This law extended relief for troubled debt restructurings and provided for further delay of the current expected credit losses adoption under the CARES Act to January 1, 2022, with early adoption permitted. The Company elected to remain on the incurred loan loss methodology for 2020. The Company adopted ASU 2016-13 during the first quarter of 2021, effective January 1, 2021. Upon adoption, the Company recognized a $9.1 million increase in the allowance for credit losses. This resulted in a one-time cumulative effect adjustment decreasing retained earnings as of January 1, 2021 by $7.0 million, net of deferred taxes of $2.1 million. The Company did not recognize an allowance for credit impairment for available-for-sale securities. The following table illustrates the impact of adoption of the ASU:
The Company’s loan segmentation, as disclosed in “Note 3 – Loans”, did not change as a result of adopting this ASU. In December 2018, the OCC, the Board of Governors of the Federal Reserve System, and the FDIC 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. In March 2020, the OCC, the Board of Governors of the Federal Reserve System, and the FDIC published an interim final rule to delay the estimated impact on regulatory capital stemming from the implementation of CECL. The interim final rule maintains the three-year transition option in the previous rule and provides 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 did not adopt the capital transition relief over the permissible three-year or five-year periods. NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) In August 2018, the FASB issued ASU 2018-14 “Compensation — Retirement Benefits — Defined Benefit Plans— General (Topic 715-20): Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans.” The ASU updated the annual disclosure requirements for employers that sponsor defined benefit pension or other postretirement benefit plans by adding, clarifying and removing certain disclosures. These amendments are effective for fiscal years ending after December 15, 2020, for public business entities, and are to be applied on a retrospective basis to all periods presented. The Company adopted this new accounting standard on January 1, 2021, and the adoption did not have a material impact on its financial statements. In December 2019, the FASB issued ASU 2019-12 “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” These amendments remove specific exceptions to the general principles in Topic 740 in GAAP. It eliminates the need for an organization to analyze whether the following apply in a given period: exception to the incremental approach for intraperiod tax allocation; exceptions to accounting for basis differences where there are ownership changes in foreign investments; and exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. It also improves financial statement preparers’ application of income tax-related guidance and simplifies GAAP for: franchise taxes that are partially based on income; transactions with a government that result in a step up in the tax basis of goodwill; separate financial statements of legal entities that are not subject to tax. It also enacts changes in tax laws in interim periods. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted this new accounting standard on January 1, 2021, and the adoption did not have a material impact on its financial statements. In January 2020, the FASB issued ASU No. 2020-1 “Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.” These amendments, among other things, clarify that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments-Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. The amendments also clarify that, when determining the accounting for certain forward contracts and purchased options a company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early application is permitted, including early adoption in an interim period. An entity should apply ASU 2020-1 prospectively at the beginning of the interim period that includes the adoption date. The Company adopted ASU 2020-1 on January 1, 2021 and it did not have a material impact on its financial statements. In October 2020, the FASB issued ASU No. 2020-8, "Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs," to clarify that an entity should reevaluate whether a callable debt security is within the scope of ASC paragraph 310-20-35-33 for each reporting period. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, and early application is not permitted. The Company adopted this new accounting standard on January 1, 2021, and the adoption did not have a material impact on its financial statements. Newly Issued But Not Yet Effective Accounting Standards: On March 12, 2020, the FASB issued Accounting Standards Update (ASU) 2020-4, "Reference Rate Reform (“ASC 848”): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." ASC 848 contains optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The Company has formed a cross-functional project team to lead the transition from LIBOR to adoption of alternative reference rates which include Secured Overnight Financing Rate (“SOFR”), American Interbank Offered Rate ("Ameribor"), and Bloomberg Short-Term Bank Yield Index ("BSBY"). The Company identified loans that renewed prior to 2021 and obtained updated reference rate language at the time of renewal. Additionally, management is utilizing the timeline guidance published by the Alternative Reference Rates Committee to develop and achieve internal milestones during this transitional period. Additionally, the Company has adhered to the International Swaps and Derivatives Association 2020 IBOR Fallbacks Protocol that was released on October 23, 2020. The Company discontinued the use of new LIBOR-based loans by December 31, 2021, according to regulatory guidelines. Legacy LIBOR-based loans will be transitioned to an alternative reference rate on or before June 30, 2023. The NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) guidance under ASC-848 will be available for a limited time, generally through December 31, 2022. The Company expects to adopt the LIBOR transition relief allowed under this standard. In August 2021, the FASB issued ASU 2021-6, "Presentation of Financial Statements (Topic 205), Financial Services - Depository and Lending (Topic 942) and Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants." The guidance is effective upon its addition to the FASB codification and will not have a material impact on the consolidated financial statements. Reclassifications: Certain amounts appearing in the financial statements and notes thereto for prior periods have been reclassified to conform with the current presentation. The reclassifications had no effect on net income or stockholders’ equity as previously reported.
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SECURITIES | SECURITIES Information related to the amortized cost, fair value and allowance for credit losses of securities available-for-sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income at December 31, 2021 is provided in the tables below.
Information regarding the fair value and amortized cost of available-for-sale debt securities by maturity as of December 31, 2021 is presented below. Maturity information is based on contractual maturity for all securities other than mortgage-backed securities. Actual maturities of securities may differ from contractual maturities because borrowers may have the right to prepay the obligation without prepayment penalty. NOTE 2 – SECURITIES (continued)
Security proceeds, gross gains and gross losses for 2021, 2020 and 2019 were as follows:
In accordance with ASU No. 2017-8, purchase premiums for callable securities are amortized to the earliest call date and premiums on non-callable securities as well as discounts are recognized in interest income using the interest method over the terms of the securities or over the estimated lives of mortgage-backed securities. Gains and losses on sales are based on the amortized cost of the security sold and recorded on the trade date. Securities with carrying values of $300.8 million and $382.7 million were pledged as of December 31, 2021 and 2020, respectively, as collateral for borrowings from the FHLB and Federal Reserve Bank and for other purposes as permitted or required by law. Information regarding securities with unrealized losses as of December 31, 2021 and 2020 is presented below. The tables distribute the securities between those with unrealized losses for less than twelve months and those with unrealized losses for twelve months or more.
NOTE 2 – SECURITIES (continued) The number of securities with unrealized losses as of December 31, 2021 and 2020 is presented below.
Available-for-sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. For available-for sale debt securities in an unrealized loss position, management first assesses whether it intends to sell, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through the consolidated income statement. For available-for sale debt securities that do not meet the criteria, management evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security and the issuer, among other factors. If this assessment indicates that a credit loss exists, management compares the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of applicable taxes. No allowance for credit losses for available-for-sale debt securities was needed at December 31, 2021. Accrued interest receivable on available-for-sale debt securities totaled $7.4 million at December 31, 2021 and is excluded from the estimate of credit losses. Ninety-nine percent of the securities are backed by the U.S. government, government agencies, government sponsored agencies or are rated above investment grade, except for certain non-local or local municipal securities, which are not rated. The Company does not have a history of actively trading securities, but keeps the securities available-for-sale should liquidity for interest rate risk management or other needs develop that would warrant the sale of securities. While these securities are held in the available-for-sale portfolio, it is management’s current intent and ability to hold them until a recovery in fair value or maturity.
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LOANS | – LOANS Total loans outstanding as of the years ended December 31, 2021 and 2020 consisted of the following:
The recorded investment in loans does not include accrued interest, which totaled $10.0 million at December 31, 2021. The Company had $350,000 and $19,000 in residential real estate loans in process of foreclosure as of December 31, 2021 and 2020, respectively.
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ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY | ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY The Company adopted ASC 326 using the modified retrospective for all financial assets measured at amortized cost. Results for reporting periods after January 1, 2021 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The following table presents the activity in the allowance for credit losses by portfolio segment for the year ended December 31, 2021:
Credit Quality Indicators: The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis for Special Mention, Substandard and Doubtful grade loans and annually on Pass grade loans over $250,000. 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. Substandard. Loans classified as Substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized as 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 characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loans are considered to be "Pass" rated when they are reviewed as part of the previously described process and do not meet the criteria above with the exception of consumer troubled debt restructurings, which are evaluated and listed with Substandard commercial grade loans and consumer nonaccrual loans which are evaluated individually and listed with “Not Rated” loans. Loans listed as Not Rated are consumer loans or commercial loans with consumer characteristics included in groups of homogenous loans which are analyzed for credit quality indicators utilizing delinquency status. NOTE 4 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (continued) The following table summarizes the risk category of loans by loan segment and origination date as of December 31, 2021:
NOTE 4 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (continued) As of December 31, 2021, $26.2 million in PPP loans were included in the "Pass" category of non-working capital commercial and industrial loans. These loans were included in this risk rating category because they are fully guaranteed by the Small Business Administration ("SBA"). Nonaccrual and Past Due Loans: The Company does not record interest on nonaccrual loans until principal is recovered. For all loan classes, a loan is generally placed on nonaccrual status when principal or interest becomes 90 days past due unless it is well secured and in process of collection, or earlier when concern exists as to the ultimate collectability of principal or interest. Interest accrued but not received is reversed against earnings. Cash interest received on these loans is applied to the principal balance until the principal is recovered or until the loan returns to accrual status. Loans may be returned to accrual status when all the principal and interest amounts contractually due are brought current, remain current for a prescribed period, and the payments are reasonably assured. The following table presents the aging of the amortized cost basis in past due loans as of December 31, 2021 by class of loans and loans past due 90 days or more and still accruing by class of loan:
As of December 31, 2021, there were an insignificant number of loans 30-89 days past due or greater than 89 days past due on nonaccrual. Additionally, interest income recognized on nonaccrual loans was insignificant during the year ended December 31, 2021. ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (continued)When management determines that foreclosure is probable, expected credit losses for collateral dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. A loan is considered collateral dependent when the borrower is experiencing financial difficulty and the loan is expected to be repaid substantially through the operation or sale of the collateral. The class of loan represents the primary collateral type associated with the loan. Significant year over year changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value. The following table presents the amortized cost basis of collateral dependent loans by class of loan as of December 31, 2021:
Troubled Debt Restructurings: Troubled debt restructured loans are included in the totals for individually analyzed loans. The Company has allocated $5.8 million and $5.5 million of specific allocations to customers whose loan terms have been modified in troubled debt restructurings as of December 31, 2021 and December 31, 2020, respectively. The Company is not committed to lend additional funds to debtors whose loans have been modified in a troubled debt restructuring.
During the year ending December 31, 2021, certain loans were modified as troubled debt restructurings. The modified terms of these loans include one or a combination of the following: inadequate compensation for the terms of the restructure or renewal; a modification of the repayment terms which delays principal payment for some period; terms offered to borrowers in financial distress where no additional credit enhancements were obtained at the time of renewal. Additional concessions were granted to borrowers during 2021 with previously identified troubled debt restructured loans. There were 8 loans with recorded investments totaling $2.2 million where collateral values or cash flows were insufficient to support the loans. These troubled debt restructured loans with additional concessions decreased the allowance by $423,000 and resulted in no charge-offs for the year ending December 31, 2021. These concessions are not included in the table below. NOTE 4 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (continued) The following table presents loans by class modified as new troubled debt restructurings that occurred during the year ending December 31, 2021:
For the period ending December 31, 2021, the troubled debt restructurings described above had no impact to the allowance and no charge-offs were recorded. As of December 31, 2021, one retail loan in the amount of $11,000 had a COVID-19 related deferral. In accordance with Section 4013 of the CARES Act, this deferral was not considered to be a troubled debt restructuring. This provision was effective through January 1, 2022 under the Consolidated Appropriations Act, 2021. During the year ended December 31, 2020, certain loans were modified as troubled debt restructurings. The modified terms of these loans include one or a combination of the following: inadequate compensation for the terms of the restructure or renewal; a modification of the repayment terms which delays principal repayment for some period; or renewal terms offered to borrowers in financial distress where no additional credit enhancements were obtained at the time of renewal. The following table presents loans by class modified as new troubled debt restructurings that occurred during the year ending December 31, 2020:
For the period ending December 31, 2020, the troubled debt restructurings described above had no impact to the allowance and no charge-offs were recorded. As of December 31, 2020, total deferrals attributed to COVID-19 were $100.7 million representing 49 borrowers. This represented 2.2% of the total loan portfolio. Of that 22 were commercial loan borrowers representing $98.2 million in loans, or 2.3% of commercial loans, and 27 were retail loan borrowers representing $2.5 million, or 0.7% of total retail loans. The majority of all loan deferrals were for a period of 90 days. Of the total commercial deferrals attributed to COVID-19, $11.9 million represented a first deferral action, $22.8 million represented a second deferral action, $41.9 million represented a third deferral action and $24.1 million represented a fourth deferral action. Two borrowers represented 90% of the fourth deferral population and were commercial real estate nonowner occupied loans supported by adequate collateral and personal guarantors and consist of loans to the hotel and accommodation industry. All COVID-19 related loan deferrals remain on accrual status, as each deferral is individually analyzed, and management has determined that all contractual cashflows are collectable at this NOTE 4 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (continued) time. In accordance with Section 4013 of the CARES Act, these were not considered to be troubled debt restructurings and were excluded from the table above. During the year ending December 31, 2019, certain loans were modified as troubled debt restructurings. The modified terms of these loans include one or a combination of the following: inadequate compensation for the terms of the restructure or renewal; a modification of the repayment terms which delays principal repayment for some period; or renewal terms offered to borrowers in financial distress where no additional credit enhancements were obtained at the time of renewal. Additional concessions were granted to borrowers during 2019 with previously identified troubled debt restructured loans. There were three commercial real estate loans with recorded investments totaling $1.9 million and five commercial and industrial loans with recorded investments totaling $2.4 million where the collateral values or cash flows were insufficient to support the loans. These troubled debt restructured loans with additional concessions decreased the allowance by $484,000 and resulted in no charge-offs for year ending December 31, 2019. These concessions are not included in the table below. The following table presents loans by class modified as new troubled debt restructurings that occurred during the year ending December 31, 2019:
For the period ending December 31, 2019, the working capital line of credit troubled debt restructuring described above had no impact to the allowance and no charge-offs were recorded. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms. The following table presents loans modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the period ending December 31, 2021, 2020 and 2019.
NOTE 4 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (continued) Allowance for Loan Losses (Prior to January 1, 2021) Prior to the adoption of ASC 326 on January 1, 2021 the Company calculated the allowance for loan losses using the incurred losses methodology. The following tables are disclosures related to the allowance for loan losses in prior periods. The following tables present the activity and balance in the allowance for loan losses by portfolio segment for the year ended December 31, 2020 and 2019. PPP loans are fully guaranteed by the SBA and have not been allocated for within the allowance for loan losses.
NOTE 4 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (continued) The following tables present balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2020:
NOTE 4 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (continued) The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2020:
NOTE 4 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (continued) The following table presents loans individually evaluated for impairment by class of loans for the year ended December 31, 2020:
NOTE 4 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (continued) The following table presents loans individually evaluated for impairment by class of loans for the year ended December 31, 2019:
Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. NOTE 4 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (continued) The following table presents the aging of the recorded investment in past due loans as of December 31, 2020 by class of loans:
NOTE 4 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (continued) As of December 31, 2020, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:
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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 company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument: Securities: Securities available-for-sale are valued primarily by a third party pricing service. The fair values of securities available-for-sale are determined on a recurring basis by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or pricing models which utilize significant observable inputs such as matrix pricing. This is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). These models utilize the market approach with standard inputs that include, but are not limited to benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. For certain municipal securities that are not rated and observable inputs about the specific issuer are not available, fair values are estimated using observable data from other municipal securities presumed to be similar or other market data on other non-rated municipal securities (Level 3 inputs). The Company’s Finance Department, which is responsible for all accounting and SEC compliance, and the Company’s Treasury Department, which is responsible for investment portfolio management and asset/liability modeling, are the two areas that determine the Company’s valuation policies and procedures. Both of these areas report directly to the Executive Vice President and Chief Financial Officer of the Company. For assets or liabilities that may be considered for Level 3 fair value measurement on a recurring basis, these two departments and the Executive Vice President and Chief Financial Officer determine the appropriate level of the assets or liabilities under consideration. If there are assets or liabilities that are determined to be Level 3 by this group, the Risk Management Committee of the Company and the Audit Committee of the board of directors (the “Board”) are made aware of such assets at their next scheduled meeting. Securities pricing is obtained on securities from a third party pricing service and all security prices are tested annually against prices from another third party provider and reviewed with a market value price tolerance variance that varies by sector: municipal securities +/- 5%, government agency/mbs/cmo +/-3% and U.S. treasuries +/-1%. If any securities fall outside the tolerance threshold and have a variance of $100,000 or more, a determination of materiality is made for the amount over the threshold. Any security that would have a material threshold difference would be further investigated to determine why the variance exists and if any action is needed concerning the security pricing for that individual security. Changes in market value are reviewed monthly in aggregate by security type and any material differences are reviewed to determine why they exist. At least annually, the pricing methodology of the pricing service is received and reviewed to support the fair value levels used by the Company. A detailed pricing evaluation is requested and reviewed on any security determined to be fair valued using unobservable inputs by the pricing service. Mortgage banking derivative: The fair values of mortgage banking derivatives are based on observable market data as of the measurement date (Level 2). Interest rate swap derivatives: Our derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing NOTE 5 – FAIR VALUE (continued) services. The fair value of interest rate swap derivatives is determined by pricing or valuation models using observable market data as of the measurement date (Level 2). Collateral dependent loans: Collateral dependent loans with specific allocations of the allowance for credit losses generally based on the fair value of the underlying collateral when repayment is expected solely from the collateral. Fair value is determined using several methods. Generally, the fair value of real estate is based on appraisals by qualified third party appraisers. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and result in a Level 3 classification of the inputs for determining fair value. In addition, the Company’s management routinely applies internal discount factors to the value of appraisals used in the fair value evaluation of collateral dependent loans. The deductions to the appraisals take into account changing business factors and market conditions, as well as value impairment in cases where the appraisal date predates a likely change in market conditions. Commercial real estate is generally discounted from its appraised value by 0-50% with the higher discounts applied to real estate that is determined to have a thin trading market or to be specialized collateral. In addition to real estate, the Company’s management evaluates other types of collateral as follows: (a) raw and finished inventory is discounted from its cost or book value by 35-65%, depending on the marketability of the goods (b) finished goods are generally discounted by 30-60%, depending on the ease of marketability, cost of transportation or scope of use of the finished good (c) work in process inventory is typically discounted by 50%-100%, depending on the length of manufacturing time, types of components used in the completion process, and the breadth of the user base (d) equipment is valued at a percentage of depreciated book value or recent appraised value, if available, and is typically discounted at 30-70% after various considerations including age and condition of the equipment, marketability, breadth of use, and whether the equipment includes unique components or add-ons; and (e) marketable securities are discounted by 10%-30%, depending on the type of investment, age of valuation report and general market conditions. This methodology is based on a market approach and typically results in a Level 3 classification of the inputs for determining fair value. Mortgage servicing rights: As of December 31, 2021, the fair value of the Company’s Level 3 servicing assets for residential mortgage loans (“MSRs”) was $3.1 million, carried at amortized cost less $715,000 in a valuation reserve, or $2.4 million. These residential mortgage loans have a weighted average interest rate of 3.4%, a weighted average maturity of 20 years and are secured by homes generally within the Company’s market area of Northern Indiana and Indianapolis. A valuation model is used to estimate fair value by stratifying the portfolios on the basis of certain risk characteristics, including loan type and interest rate. Impairment is estimated based on an income approach. The inputs used include estimates of prepayment speeds, discount rate, cost to service, escrow account earnings, contractual servicing fee income, ancillary income, late fees, and float income. The most significant assumption used to value MSRs is prepayment rate. Prepayment rates are estimated based on published industry consensus prepayment rates. The most significant unobservable assumption is the discount rate. At December 31, 2021, the constant prepayment speed (“PSA”) used was 249 and discount rate used was 9.5%. At December 31, 2020, the PSA used was 204 and the discount rate used was 9.4%. Other real estate owned: Nonrecurring adjustments to certain commercial and residential real estate properties classified as other real estate owned are measured at the lower of carrying amount or fair value less costs to sell. Fair values are generally based on third party appraisals of the property and are reviewed by the Company’s internal appraisal officer. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable properties used to determine value. Such adjustments are usually significant and result in a Level 3 classification. In addition, the Company’s management may apply discount factors to the appraisals to take into account changing business factors and market conditions, as well as value impairment in cases where the appraisal date predates a likely change in market conditions. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized. Real estate mortgage loans held-for-sale: Real estate mortgage loans held for sale are carried at the lower of cost or fair value, as determined by outstanding commitments, from third party investors, and result in a Level 2 classification. NOTE 5 – FAIR VALUE (continued) The table below presents the balances of assets and liabilities measured at fair value on a recurring basis:
The fair value of Level 3 available-for-sale securities was immaterial to warrant additional recurring fair value disclosures as of December 31, 2021 and 2020. NOTE 5 – FAIR VALUE (continued) The tables below present the amount of assets measured at fair value on a nonrecurring basis:
NOTE 5 – FAIR VALUE (continued) The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at December 31, 2021:
NOTE 5 – FAIR VALUE (continued) The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at December 31, 2020:
NOTE 5 – FAIR VALUE (continued) The following table contains the estimated fair values and the related carrying values of the Company’s financial instruments at December 31, 2021. Items which are not financial instruments are not included.
NOTE 5 – FAIR VALUE (continued) The following table contains the estimated fair values and the related carrying values of the Company’s financial instruments at December 31, 2020. Items which are not financial instruments are not included.
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LAND, PREMISES AND EQUIPMENT, NET | LAND, PREMISES AND EQUIPMENT, NET Land, premises and equipment and related accumulated depreciation were as follows at December 31, 2021 and 2020:
The Company had land, premises and equipment of $0 and $100,000 held for sale and included in other assets as of December 31, 2021 and 2020.
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GOODWILL AND OTHER INTANGIBLE ASSETS |
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Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill There have been no changes in the $5.0 million carrying amount of goodwill since 2002. Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. At December 31, 2021, the Company’s reporting unit had positive equity and the Company elected to perform a qualitative assessment to determine if it was more likely than not that the fair value of the reporting unit exceeded its carrying value, including goodwill. The qualitative assessment indicated that it was more likely than not that the fair value of the reporting unit exceeded its carrying value, resulting in no impairment. The Company’s annual impairment analysis was performed as of May 31, 2021. Circumstances did not substantially change during the second half of the year such that the Company did not believe it was necessary to do an additional impairment analysis.
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DEPOSITS |
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Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEPOSITS | DEPOSITS The following table details total deposits as of December 31, 2021 and 2020:
NOTE 8 – DEPOSITS (continued) At December 31, 2021, the scheduled maturities of time deposits were as follows:
During 2021 and 2020 the Bank entered into agreements with IntraFi Network relative to their Insured Cash Sweep One-Way Buy program. As of December 31, 2021, the total amount available to the Bank via this program was $100.0 million, of which, $10.0 million was drawn compared to availability of $100.0 million and $10.0 million usage as of December 31, 2020.
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BORROWINGS |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
BORROWINGS | BORROWINGS For the years ending December 31, there was one outstanding advance from the FHLB as follows:
The outstanding advance is a fixed-rate putable advance and may not be prepaid by the Company without penalty. The note requires monthly interest payments and is secured by residential real estate loans and securities with a carrying value of $478.4 million and $611.2 million at December 31, 2021 and 2020, respectively. At December 31, 2021 and 2020, the Company owned $10.4 million of FHLB stock, which also secures debts owed to the FHLB. The Company is authorized by the Board to borrow up to $800.0 million at the FHLB, but availability is limited to $227.8 million based on collateral and outstanding borrowings. Federal Reserve Discount Window borrowings were secured by commercial loans and investment securities with a carrying value of $804.4 million and $557.2 million as of December 31, 2021 and 2020. The Company had a borrowing capacity of $616.5 million and $490.4 million at the Federal Reserve Bank as of December 31, 2021 and 2020, respectively. There were no borrowings outstanding at the Federal Reserve Bank at December 31, 2021 and 2020. The Company had $350.0 million of availability in federal funds lines with eleven correspondent banks as of December 31, 2021 and 2020; no amounts were drawn on as of either year end. The Bank is also a member of the American Financial Exchange (AFX) where overnight fed funds purchased can be obtained from other banks on the Exchange that have approved the Bank for an unsecured, overnight line. These funds are only available if the approving banks have an ‘offer’ out to sell that day. As of December 31, 2021 and 2020, the total amount approved for the Bank via AFX banks was $319.0 million and $394.0 million, respectively. There were no amounts drawn as of December 31, 2021 and 2020. On August 2, 2019 the Company entered into an unsecured revolving credit agreement with another financial institution allowing the Company to borrow up to $30.0 million; this credit agreement was subsequently amended and renewed on July 30, 2021. Funds provided under the agreement may be used to repurchase shares of the Company’s common stock under the share repurchase program, which was reauthorized by the Company’s board of directors on April 13, 2021. The credit agreement includes a negative pledge agreement whereby the Company agrees not to pledge or otherwise encumber the stock of the Bank. The credit agreement has a one year term which may be amended, extended, modified or renewed. Outstanding borrowings on the credit agreement were $0.00 million and $10.5 million at December 31, 2021 and 2020, respectively.
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SUBORDINATED DEBENTURES |
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Dec. 31, 2021 | |
SUBORDINATED DEBENTURES | |
SUBORDINATED DEBENTURES | SUBORDINATED DEBENTURES Lakeland Statutory Trust II, a trust formed by the Company (the “Trust”), issued $30.0 million of floating rate trust preferred securities on October 1, 2003 as part of a privately placed offering of such securities. The Company issued $30.9 million of subordinated debentures to the Trust in exchange for the proceeds of the Trust. The Company held a controlling interest in the Trust, but did not have a majority of voting rights; therefore the Trust was considered a variable interest entity. The Company was not considered the primary beneficiary of this Trust; therefore, the Trust was not consolidated in the Company’s financial statements, but rather the subordinated debentures was shown as a liability prior to being redeemed. Subject to the Company having received prior approval of the Federal Reserve, the Company was able to redeem the subordinated debentures, in whole or in part, but in all cases in a principal amount with integral multiples of $1,000, on any interest payment date on or after October 1, 2008 at 100% of the principal amount, plus accrued and unpaid interest. The subordinated debentures were required to be redeemed no later than 2033. These securities were considered Tier I capital (with certain limitations applicable) under current regulatory guidelines and, subject to certain limitations, were also considered Tier 1 capital under Basel III. On December 31, 2019, the Company redeemed $30.0 million of trust preferred securities of the Trust. The trust preferred securities were redeemed, along with $928,000 in common securities issued by the Trust and held by the Company, as a result of the concurrent redemption of 100% of the Company’s junior subordinated debentures due 2033 and held by the Trust, which underlie the trust preferred securities. The redemption price for the junior subordinated debentures was equal to 100% of the principal amount plus accrued interest up to, but not including, the redemption date. The proceeds from the redemption of the junior subordinated debentures were simultaneously applied to redeem all of the outstanding common securities and the outstanding trust preferred securities at a price of 100% of the aggregate liquidation amount of the trust preferred securities plus accumulated but unpaid distributions up to, but not including, the redemption date. The redemption was pursuant to the optional redemption provisions of the underlying indenture.
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PENSION AND OTHER POSTRETIREMENT PLANS |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PENSION AND OTHER POSTRETIREMENT PLANS | PENSION AND OTHER POSTRETIREMENT PLANS In April 2000, the Lakeland Financial Corporation Pension Plan was frozen. The Company also maintains a Supplemental Executive Retirement Plan (“SERP”) for select officers that was established as a funded, non-qualified deferred compensation plan. Currently, six retired officers are the only participants in the SERP. The measurement date for both the pension plan and SERP is December 31, 2021 and 2020. Information as to the Company’s employee benefit plans at December 31, 2021 and 2020 is as follows:
Amounts recognized in the consolidated balance sheets consist of:
Amounts recognized in accumulated other comprehensive income consist of:
The accumulated benefit obligation for the pension plan was $2.3 million and $2.7 million for December 31, 2021 and 2020, respectively. The accumulated benefit obligation for the SERP was $0.9 million and $1.0 million for December 31, 2021 and 2020, respectively. NOTE 11 – PENSION AND OTHER POSTRETIREMENT PLANS (continued) Net period benefit cost and other amounts recognized in other comprehensive income (loss) include the following:
The estimated net loss (gain) for the defined benefit pension plan and SERP that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the next fiscal year is $99,000 for the pension plan and $44,000 for the SERP. The settlement costs in 2021 and 2020 were related to participants taking lump sum distributions from the pension plan during those years. For 2021, 2020 and 2019, the assumed form of payment elected by active participants upon retirement was a lump sum to reflect participant trends. The lump sum assumed interest rates, below, for December 31, 2021, 2020 and 2019 reflect the mortality table in effect for 2021, 2020 and 2019, respectively. For 2021, the mortality assumption was changed to the PRI-2012 White Collar Mortality Table, with full generational Projection Scale MP-2021 as of December 31, 2021, to reflect improved mortality expectations. For 2020, the mortality assumption was the PRI-2012 White Collar Mortality Table, with full generational Projection Scale MP-2020 as of December 31, 2020. For 2019, the mortality assumption was the PRI-2012 White Collar Mortality Table, with full generational Projection Scale MP-2019 as of December 31, 2019. NOTE 11 – PENSION AND OTHER POSTRETIREMENT PLANS (continued)
Pension Plan and SERP Assets The Company’s investment strategies are to invest in a prudent manner for the purpose of providing benefits to participants in the pension plan and the SERP. The investment strategies are targeted to maximize the total return of the portfolio net of inflation, spending and expenses. Risk is controlled through diversification of asset types and investments in domestic and international equities and fixed income securities. The target allocations for plan assets are shown in the tables below. Equity securities primarily include investments in common stocks. Debt securities include government agency and commercial bonds. Other investments consist of money market mutual funds. The weighted average expected long-term rate of return on pension plan and SERP assets is developed in consultation with the plans actuary. It is primarily based upon industry trends and consensus rates of return which are then adjusted to reflect the specific asset allocations and historical rates of return of the Company’s plan assets. The following assumptions were used in determining the total long-term rate of return: equity securities were assumed to have a long-term rate of return of approximately 8.85% and debt securities were assumed to have a long-term rate of return of approximately 3.00%. These rates of return were adjusted to reflect an approximate target allocation of 60% equity securities and 40% debt securities with a small downward adjustment due to investments in the “Other” category, which consist of low yielding money market mutual funds. Certain asset types and investment strategies are prohibited including, the investment in commodities, options, futures, short sales, margin transactions and non-marketable securities. The Company’s pension plan asset allocation at year end 2021 and 2020, target allocation for 2021, and expected long-term rate of return by asset category are as follows: NOTE 11 – PENSION AND OTHER POSTRETIREMENT PLANS (continued)
The Company’s SERP plan asset allocation at year end 2021 and 2020, target allocation for 2021, and expected long-term rate of return by asset category are as follows:
Fair Value of Pension Plan and SERP Assets Fair value is the exchange price that would be received for an asset in the principal or most advantageous market for the asset in an orderly transaction between market participants on the measurement date. Also, a fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument: Equity and debt securities: The fair values of securities are determined on a recurring basis by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or pricing models, which utilize significant observable inputs such as matrix pricing. This is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). NOTE 11 – PENSION AND OTHER POSTRETIREMENT PLANS (continued) The fair values of the Company’s pension plan assets at December 31, 2021, by asset category are as follows:
The fair values of the Company’s pension plan assets at December 31, 2020, by asset category are as follows:
Total pension plan assets available for benefits also include $3,000 in accrued interest and dividend income. There were no Level 2 or 3 securities during either year. NOTE 11 – PENSION AND OTHER POSTRETIREMENT PLANS (continued) The fair values of the Company’s SERP assets at December 31, 2021, by asset category are as follows:
The fair values of the Company’s SERP assets at December 31, 2020, by asset category are as follows:
Total SERP plan assets available for benefits also include $1,000 in accrued interest and dividend income. There were no Level 2 or 3 securities during either year. Contributions The Company does not expect to contribute to its pension or SERP plans in 2021. NOTE 11 – PENSION AND OTHER POSTRETIREMENT PLANS (continued) Estimated Future Benefit Payments The following benefit payments are expected to be paid over the next ten years:
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OTHER BENEFIT PLANS |
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OTHER BENEFIT PLANS | |
OTHER BENEFIT PLANS | OTHER BENEFIT PLANS 401(k) Plan The Company maintains a 401(k) profit sharing plan for all employees meeting certain age and service requirements. The 401(k) plan allows employees to contribute up to the maximum amount allowable under the Internal Revenue Code, which are matched based upon the percentage of budgeted net income earned during the year on the first 6% of the compensation contributed. The expense recognized from matching was $2.3 million, $1.9 million and $1.8 million in 2021, 2020 and 2019, respectively. Deferred Compensation Plan Effective January 1, 2004, the Company adopted the Lake City Bank Deferred Compensation Plan. The purpose of the deferred compensation plan is to extend full 401(k) type retirement benefits to certain individuals without regard to statutory limitations under tax qualified plans. A liability is accrued by the Company for its obligation under this plan. The expense recognized was $1.2 million, $1.0 million and $461,000 during the years ended December 31, 2021, 2020 and 2019, respectively. This resulted in a deferred compensation liability of $7.0 million and $5.7 million as of year end 2021 and 2020, respectively. The deferred compensation plan is funded solely by participant contributions and does not receive a Company match. Employee Agreements Under employment agreements with certain executives, certain events leading to separation from the Company could result in cash payments totaling $5.3 million as of December 31, 2021. On December 31, 2021, no amounts were accrued on these contingent obligations. Directors’ Deferred Compensation and Cash Plans The Company maintains a directors’ deferred compensation plan and a cash plan. The amount owed to directors for fees under the deferred directors’ compensation and cash plans as of December 31, 2021 and 2020 was $5.2 million and $4.8 million, respectively. The related expense for the deferred directors’ compensation and cash plans for the years ended December 31, 2021, 2020 and 2019 was $482,000, $505,000 and $515,000, respectively.
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES Income tax expense for the years ended December 31, 2021, 2020 and 2019 consisted of the following:
The differences between financial statement tax expense and amounts computed by applying the statutory federal income tax rate of 21% to income before income taxes were as follows:
NOTE 13 – INCOME TAXES (continued) The net deferred tax asset recorded in the consolidated balance sheets at December 31, 2021 and 2020 consisted of the following:
In addition to the net deferred tax assets included above, the deferred income tax liability allocated to the unrealized net gain on securities available-for-sale included in equity was ($4.5 million) and ($7.8 million) for 2021 and 2020, respectively. The deferred income tax asset allocated to the pension plan and SERP included in equity was $319,000 and $476,000 for 2021 and 2020, respectively. The Company evaluated its deferred tax asset at year end 2021 and has concluded that it is more likely than not that it will be realized. The Company expects to have taxable income in the future such that the deferred tax asset will be realized. Therefore, no valuation allowance is required. Unrecognized Tax Benefits The Company did not have any unrecognized tax benefits at December 31, 2021 or 2020. The Company does not expect the total amount of unrecognized tax benefits to significantly increase or decrease in the next twelve months. No interest or penalties were recorded in the income statement and no amount was accrued for interest and penalties for the periods ending December 31, 2021, 2020 and 2019. Should the accrual of any interest or penalties relative to unrecognized tax benefits be necessary, it is the Company’s policy to record such accruals in its income taxes accounts. The Company and its subsidiaries file a consolidated U.S. federal tax return and a combined unitary return in the States of Indiana and Michigan. These returns are subject to examinations by authorities for all years after 2017.
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RELATED PARTY TRANSACTIONS |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Loans to principal officers, directors, and their affiliates as of December 31, 2021 and 2020 were as follows:
Deposits from principal officers, directors, and their affiliates at year end 2021 and 2020 were $30.2 million and $36.8 million, respectively.
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STOCK BASED COMPENSATION |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK BASED COMPENSATION | STOCK BASED COMPENSATION Effective April 8, 2008, the Company adopted the Lakeland Financial Corporation 2008 Equity Incentive Plan (the “2008 Plan”), which was approved by the Company’s stockholders. At its inception there were 1,125,000 shares of common stock reserved for grants of stock options, stock appreciation rights, stock awards and cash incentive awards to employees of the Company, its subsidiaries and Board. Effective April 9, 2013, the Company adopted the Lakeland Financial Corporation 2013 Equity Incentive Plan (the “2013 Plan”), which was also approved by the Company’s stockholders. At its inception the remaining shares of common stock available to grant under the 2008 Plan of 435,867 were transferred to the 2013 Plan and reserved for grants of stock options, stock appreciation rights, stock awards and cash incentive awards to employees of the Company, its subsidiaries and Board. Non-vested shares from the 2008 Plan that were unused at vesting were added to the shares available to grant of the 2013 Plan. Effective April 12, 2017, the Company adopted the Lakeland Financial Corporation 2017 Equity Incentive Plan (the “2017 Plan”), which was also approved by the Company’s stockholders and does not permit share recycling. At its inception there were 1,000,000 shares of common stock reserved for grants of stock options, stock appreciation rights, stock awards and cash incentive awards to employees of the Company, its subsidiaries and Board. As of December 31, 2021, 454,308 shares were available for future grants in the 2017 Plan, which is the only active plan. Certain stock awards provide for accelerated vesting if there is a change in control. The Company has a policy of issuing new shares to satisfy exercises of stock awards. Included in net income for the years ended December 31, 2021, 2020 and 2019 was employee stock compensation expense of $7.2 million, $1.8 million and $4.2 million, and a related tax benefit of $1.8 million, $0.5 million and $1.1 million, respectively. Stock Options The equity incentive plan requires that the exercise price for options be the market price on the date the options are granted. The maximum option term is ten years and the awards usually vest over three years. The fair value of each stock option is estimated with the Black-Scholes pricing model, using the following weighted-average assumptions as of the grant date for stock options granted during the years presented. Expected volatilities are based on historical volatility of the Company’s stock over the immediately preceding expected life period, as well as other factors known on the grant date that would have a significant effect on the stock price during the expected life period. The expected stock option life used is the historical option life of the similar employee base or Board. The turnover rate is based on historical data of the similar employee base as a group and the Board as a group. The risk-free interest rate is the Treasury rate on the date of grant corresponding to the expected life period of the stock option. There were no stock option grants or modifications in 2021, 2020 or 2019. As of December 31, 2021, there was no unrecognized compensation cost related to non-vested stock options granted under the plan. There were no options exercised during the years ended December 31, 2021, 2020 or 2019. NOTE 15 – STOCK BASED COMPENSATION (continued) Restricted Stock Awards and Units The fair value of restricted stock awards and units is the closing price of the Company’s common stock on the date of grant adjusted for the present value of expected dividends. The restricted stock awards fully vest after one year or more of service, determined at the grant date, with the exception of 14,950 shares granted to non-employee directors of the Board included as vested, below, which vested on the grant date. A summary of the changes in the Company’s non-vested shares for the year follows:
As of December 31, 2021, there was no unrecognized compensation cost related to non-vested shares granted under the plan. The total fair value of shares vested during the years ended December 31, 2021, 2020 and 2019 was $1.1 million, $0.7 million and $0.7 million, respectively. Performance Stock Units The fair value of stock awards is the closing price of the Company’s common stock on the date of grant adjusted for the present value of expected dividends. The expected dividend rate is assumed to be the most recent dividend rate declared by the Board on the grant date. The grant date fair value of stock awards is assumed at the target payout rate. The stock awards fully vest on the third anniversary of the grant date. The 2021-2023, 2020-2022 and 2019-2021 Long-Term Incentive Plans must be paid in stock and have performance conditions which include revenue growth, diluted earnings per share growth and average return on beginning equity. Shares granted below include the number of shares assumed granted based on actual performance criteria of the 2021-2023, 2020-2022 and 2019-2021 Long-Term Incentive Plans at December 31, 2021.
As of December 31, 2021, there was $6.4 million of total unrecognized compensation cost related to non-vested shares granted under the Plan. The cost is expected to be recognized over a weighted period of 1.77 years. The total fair value of shares vested during the year ended December 31, 2021, 2020 and 2019 was $5.2 million, $5.7 million and $5.7 million, respectively. During the years ended December 31, 2021, 2020 and 2019, 83,216, 120,204 and 126,672 shares vested, respectively.
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CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS |
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Capital Requirements and Restrictions On Retained Earnings [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS | CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS The Company became a financial holding company effective May 30, 2012 and is now required to be well capitalized under the applicable regulatory guidelines. The Company and the Bank are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet certain heightened minimum capital requirements can initiate certain mandatory, and possibly discretionary actions by regulators that, if undertaken, could have a direct material effect on the financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weighting and other factors. The capital adequacy requirements were heightened by the Basel III Rule, previously defined, which went into effect on January 1, 2015 with a phase-in period for certain aspects of the rule through 2019. Under the Basel III rule, the Company must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer was phased in from 0.00% for 2015 to 2.50% by 2019. The capital conservation buffer for 2021 and 2020 was 2.50%. The net unrealized gain or loss on available-for-sale securities is not included in computing regulatory capital. .The quantitative measures established by regulation to ensure capital adequacy that were in effect on December 31, 2021 and 2020, require the Company and the Bank to maintain minimum capital amounts and ratios (set forth in the following table) of Total, Tier I and Common Equity Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined in the regulation), and of Tier I capital (as defined in the regulation) to average assets (as defined). Management believes, as of the years ended December 31, 2021 and 2020, that the Company and the Bank met all capital adequacy requirements to which they are subject. NOTE 16 – CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS (continued) As of December 31, 2021, the most recent notification from the federal regulators categorized the Company and the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Company and the Bank must maintain minimum Total risk-based capital ratios, Tier I risk-based capital ratios and Tier I leverage capital ratios as set forth in the table. There have been no conditions or events since that notification that management believes have changed the Company and the Bank’s category.
The Bank is required to obtain the approval of the Indiana Department of Financial Institutions for the payment of any dividend if the total amount of all dividends declared by the Bank during the calendar year, including the proposed dividend, would exceed the sum of the retained net income for the year-to-date combined with the retained net income for the previous two years. Indiana law defines “retained net income” to mean the net income of a specified period, calculated under the consolidated report of income instructions, less the total amount of all dividends declared for the specified period. As of December 31, 2021, approximately $106.9 million was available to be paid as dividends to the Company by the Bank. The payment of dividends by any financial institution or its holding company is affected by the requirement to maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations, and a financial institution generally is prohibited from paying any dividends if, following payment thereof, the institution would be undercapitalized. As described above, the Bank exceeded its minimum capital requirements under applicable guidelines as of December 31, 2021. Notwithstanding the availability of funds for dividends, however, the FDIC may prohibit the payment of any dividends by the Bank if the FDIC determines such payment would constitute an unsafe or unsound practice.
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OFFSETTING ASSETS AND LIABILITIES |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OFFSETTING ASSETS AND LIABILITIES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OFFSETTING ASSETS AND LIABILITIES | OFFSETTING ASSETS AND LIABILITIES The following tables summarize gross and net information about financial instruments and derivative instruments that are offset in the statement of financial position or that are subject to an enforceable master netting arrangement at December 31, 2021 and 2020.
If an event of default occurs causing an early termination of an interest rate swap derivative, any early termination amount payable to one party by the other party may be reduced by set-off against any other amount payable by the one party to the other party. If a default in performance of any obligation of a repurchase agreement occurs, each party will set-off property held in respect of transactions against obligations owing in respect of any other transactions.
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COMMITMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES | COMMITMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES During the normal course of business, the Company becomes a party to financial instruments with off-balance sheet risk in order to meet the financing needs of its customers. These financial instruments include commitments to make loans and open-ended revolving lines of credit. Amounts as of the years ended December 31, 2021 and 2020, were as follows:
The index on variable rate commercial loan commitments is principally the national prime rate. Interest rate ranges on commitments and open-ended revolving lines of credit for years ended December 31, 2021 and 2020, were as follows:
Commitments, excluding open-ended revolving lines, generally have fixed expiration dates of one year or less. Open-ended revolving lines are monitored for proper performance and compliance on a monthly basis. Since many commitments expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The Company follows the same credit policy (including requiring collateral, if deemed appropriate) to make such commitments as it follows for those loans that are recorded in its financial statements. The Company’s exposure to credit losses in the event of nonperformance is represented by the contractual amount of the commitments. Management does not expect any significant losses as a result of these commitments.
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PARENT COMPANY STATEMENTS |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PARENT COMPANY STATEMENTS | PARENT COMPANY STATEMENTS The Company operates primarily in the banking industry, which accounts for substantially all of its revenues, operating income and assets. Presented below are parent only financial statements: CONDENSED BALANCE SHEETS
CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
NOTE 19 – PARENT COMPANY STATEMENTS (continued) CONDENSED STATEMENTS OF CASH FLOWS
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EARNINGS PER SHARE |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE Following are the factors used in the earnings per share computations:
There were no antidilutive stock options for 2021, 2020 and 2019.
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OCI, Debt Securities, Available-for-Sale, Gain (Loss), after Adjustment and Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following tables summarize the changes within each classification of accumulated other comprehensive income (loss) for December 31, 2021 and 2020, all shown net of tax:
NOTE 21 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (continued) Reclassifications out of accumulated comprehensive income for the years ended December 31, 2021, 2020 and 2019 are as follows:
(1)Included in the computation of net pension plan expense as more fully discussed in Note 11 – Pension and Other Postretirement Plans.
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SELECTED QUARTERLY DATA (UNAUDITED) |
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Selected Quarterly Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SELECTED QUARTERLY DATA (UNAUDITED) | SELECTED QUARTERLY DATA (UNAUDITED) (in thousands except per share data)
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WARRANT |
12 Months Ended |
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Dec. 31, 2021 | |
Warrants and Rights Note Disclosure [Abstract] | |
WARRANT | WARRANT On February 27, 2009, the Company entered into a Letter Agreement with the Treasury, pursuant to which the Company issued (i) 56,044 shares of the Company’s Series A Preferred Stock and (ii) the Warrant to purchase 396,538 shares of the Company’s common stock, no par value, for an aggregate purchase price of $56,044,000 in cash. This transaction was conducted in accordance with the CPP. On June 9, 2010, the Company redeemed the Series A Preferred Stock and accreted the remaining unamortized discount on these shares. The Company did not repurchase the Warrant, and the Warrant was sold by Treasury to an independent, third party. The Warrant had a 10-year term and was immediately exercisable upon its issuance, with an exercise price, subject to anti-dilution adjustments, equal to $21.20 per share of the common stock (trailing 20-day Lakeland average closing price as of December 17, 2008, which was the last trading day prior to date of receipt of Treasury’s preliminary approval for our participation in the CPP). The Warrant was valued using the Black-Scholes model with the following assumptions: market price of $17.45; exercise price of $21.20; risk-free interest rate of 3.02%; expected life of 10 years; expected dividend rate on common stock of 4.5759% and volatility of common stock price of 41.8046%. This resulted in a value of $4.4433 per share of common stock underlying the Warrant. NOTE 23 – WARRANT (continued) On December 3, 2009, the Company was notified by Treasury that, as a result of the Company’s completion of our November 18, 2009 Qualified Equity Offering, the amount of the Warrant was reduced by 50% to 198,269 shares. In accordance with the terms of the Warrant, the number of shares issuable upon exercise and the exercise price were adjusted each time the Company paid a dividend to its stockholders in excess of the dividend paid at the time the warrant was issued. Based on the formula set forth in the warrant, at December 31, 2018, the number of shares issuable upon exercise of the Warrant were 314,846 and the exercise price was $13.3503. On February 4, 2019, the Company was notified that the holder of the Warrant was initiating the exercise on a cashless basis. At the time of exercise, the holder was entitled to 315,961 shares of common stock. The cost to exercise the Warrant was approximately $4.2 million, which was the equivalent of 91,894 shares of common stock with a fair value of $45.74 per share. On February 8, 2019, the Company issued 224,066 shares to the Warrant holder as a cashless exercise and the Warrant was retired. The issuance of the shares was exempt from registration pursuant to Section 3(a)(9) under the Securities Act of 1933.
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LEASES |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASES The Company leases certain office facilities under long-term operating lease agreements. The leases expire at various dates through 2029 and some include renewal options. Many of these leases require the payment of property taxes, insurance premiums, maintenance, utilities and other costs. In many cases, rentals are subject to increase in relation to a cost-of-living index. The Company accounts for lease and non-lease components together as a single lease component. The Company determines if an arrangement is a lease at inception. Operating leases are recorded as a right-of-use (“ROU”) lease assets and are included in other assets on the consolidated balance sheet. The Company’s corresponding lease obligations are included in other liabilities on the consolidated balance sheet. ROU lease assets represent the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligation to make lease payments arising from the lease. Operating ROU lease assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The ROU lease asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases, as allowed as practical expedient of the standard. The following is a maturity analysis of the operating lease liabilities as of December 31, 2021:
NOTE 24 – LEASES (continued)
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COVID-19 AND CURRENT ECONOMIC CONDITIONS |
12 Months Ended |
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Dec. 31, 2021 | |
Unusual or Infrequent Items, or Both [Abstract] | |
COVID-19 AND CURRENT ECONOMIC CONDITIONS | COVID-19 and CURRENT ECONOMIC CONDITIONS On March 11, 2020, the World Health Organization announced that the COVID-19 outbreak was deemed a pandemic, and on March 13, 2020, the President declared the ongoing COVID-19 pandemic of sufficient magnitude to warrant an emergency declaration. The extent of COVID-19’s effect on the Company’s operational and financial performance will depend on future developments. As a result, it is not currently possible to ascertain the overall impact of COVID-19 on the Company’s business. However, if the pandemic continues to evolve into a prolonged worldwide health crisis, the disease could have a material adverse effect on the Company’s business, results of operations, financial condition, liquidity and cash flows. The fair value of certain assets could be impacted by the effects of COVID-19. The carrying value of loans, goodwill, right-of-use lease assets, other real estate owned and mortgage servicing rights could decrease resulting in future impairment losses. Management will continue to evaluate current economic conditions to determine if a triggering event would impact the current valuations for these assets.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature of Operations and Principles of Consolidation | Nature of Operations and Principles of Consolidation: The consolidated financial statements include Lakeland Financial Corporation (the “Holding Company”) and its wholly owned subsidiaries, Lake City Bank (the “Bank”) and LCB Risk Management, Inc., together referred to as (the “Company”). On December 18, 2006, LCB Investments II, Inc. was formed as a wholly owned subsidiary of the Bank incorporated in Nevada to manage a portion of the Bank’s investment portfolio beginning in 2007. On December 21, 2006, LCB Funding, Inc., a real estate investment trust incorporated in Maryland, was formed as a wholly owned subsidiary of LCB Investments II, Inc. On December 28, 2012, LCB Risk Management, Inc., a captive insurance company incorporated in Nevada, was formed as a wholly owned subsidiary of the Holding Company. All intercompany transactions and balances are eliminated in consolidation. The Company provides financial services through the Bank, a full-service commercial bank with 51 branch offices in fifteen counties in Northern and Central Indiana. The Company provides commercial, retail, trust and investment services to its customers. Commercial products include commercial loans and technology-driven solutions to meet commercial customers’ treasury management needs such as mobile business banking and online treasury management services. Retail banking clients are provided a wide array of traditional retail banking services, including lending, deposit and investment services. Retail lending programs are focused on mortgage loans, home equity lines of credit and traditional retail installment loans. The Company provides credit card services to retail and commercial customers through its retail card program and merchant processing activity. The Company provides wealth advisory and trust clients with traditional personal and corporate trust services. The Company also provides retail brokerage services, including an array of financial and investment products such as annuities and life insurance. Other financial instruments, which represent potential concentrations of credit risk, include deposit accounts in other financial institutions.
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Use of Estimates | Use of Estimates: To prepare financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”), management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided and future results could differ.
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Cash Flows | Cash Flows: Cash and cash equivalents include cash, demand deposits in other financial institutions and short-term investments and certificates of deposit with maturities of 90 days or less. Cash flows are reported net for customer loan and deposit transactions, and certain short-term borrowings.
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Securities | Securities: Securities are classified as available-for-sale when they might be sold before maturity. Securities available-for-sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income (loss), net of tax. Securities are classified as held-to-maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Purchase premiums or discounts are recognized in interest income using the interest method over the terms of the securities or over estimated lives for mortgage-backed securities. Gains and losses on sales are based on the amortized cost of the security sold and recorded on the trade date. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, nature of the security, the underlying collateral, and the financial condition of the issuer, among other factors. If this assessment indicates a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for available-for-sale securities losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for available-for-sale securities losses is recognized in other comprehensive income (loss). NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Changes in the allowance for available-for-sale securities are recorded as a component of credit loss expense. Losses are charged against the allowance for available-for-sale securities losses when management believes the uncollectibility of available-for-sale security is confirmed or when either criteria regarding intent or requirement to sell is met.
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Real Estate Mortgage Loans Held for Sale | Real Estate Mortgage Loans Held-for-Sale: Loans held for sale are reported at the lower of cost or fair value on an aggregate basis. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. Loan sales occur on the delivery date agreed to in the relevant commitment agreement. The Company retains servicing on the majority of loans sold. The carrying value of loans sold is reduced by the amount allocated to the servicing right. The gain or loss on the sale of loans is the difference between the carrying value of the loans sold and the funds received from the sale.
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Loans | Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unearned interest, deferred loan fees and costs, and an allowance for credit losses. Interest income is reported on the interest method and includes amortization of net deferred loan fees and costs over the loan term. All classes of commercial and industrial, commercial real estate and multi-family residential, agri-business and agricultural, other commercial and consumer 1-4 family mortgage loans for which collateral is insufficient to cover all principal and accrued interest are reclassified as nonaccrual loans, on or before the date when the loan becomes 90 days delinquent. When a loan is classified as a nonaccrual loan, interest on the loan is no longer accrued, all unpaid accrued interest is reversed and interest income is subsequently recorded on the cash-basis or cost-recovery method. Accrual status is resumed when all contractually due payments are brought current and future payments are reasonably assured. Other consumer loans are not placed on a nonaccrual status since these loans are charged-off when they have been delinquent from 90 to 180 days, and when the related collateral, if any, is not sufficient to offset the indebtedness. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated and individually analyzed loans. The recorded investment in loans is the loan balance net of unamortized deferred loan fees and costs. The total amount of accrued interest on loans as of December 31, 2021 and 2020 was $10.0 million and $14.6 million.
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Allowance for Credit Losses | Allowance for Credit Losses: The allowance for credit losses is a valuation allowance to provide for expected credit losses. Losses are charged against the allowance when management believes that the principal is uncollectible. Subsequent recoveries, if any, are credited to the allowance. Allocations of the allowance are made for specific loans and for pools of similar types of loans, although the entire allowance is available for any loan that, in management's judgment, should be charged against the allowance. A provision for credit losses is taken based on management's ongoing evaluation of the appropriate allowance balance. A formal evaluation of the adequacy of the credit loss allowance is conducted monthly. The ultimate recovery of all loans is susceptible to future market factors beyond the Company's control. The determination of the appropriate allowance is inherently subjective, as it requires significant estimates by management. The Company has an established process to determine the adequacy of the allowance for credit losses that generally includes consideration of changes in the nature and volume of the loan portfolio and overall portfolio quality, along with current and forecasted economic conditions that may affect borrowers' ability to repay. Consideration is not limited to these factors although they represent the most commonly cited factors. To determine the specific allocation levels for individual credits, management considers the current valuation of collateral and the amounts and timing of expected future cash flows as the primary measures. Management also considers trends in adversely classified loans based upon an ongoing review of those credits. With respect to pools of similar loans, an appropriate level of general allowance is determined by portfolio segment using a probability of default-loss given default ("PD/LGD") model, subject to a floor. A default can be triggered by one of several different asset quality factors, including past due status, nonaccrual status, TDR status or if the loan has had a charge-off. This PD is then combined with a LGD derived from historical charge-off data to construct a loss rate. This loss rate is then supplemented with adjustments for reasonable and supportable forecasts of relevant economic indicators, particularly the unemployment rate forecast from the Federal Open Market Committee's Summary of Economic Projections, as well as portfolio trends based on the risks present for each portfolio segment. These environmental factors include consideration NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) of portfolio trends and conditions; industry conditions; and effects of changes in credit concentrations. It is also possible that these factors could include social, political, economic, and terrorist events or activities. All of these factors are susceptible to change, which may be significant. As a result of this detailed process, the allowance results in two forms of allocations, specific and general. These two components represent the total allowance for credit losses deemed adequate to cover expected losses within the loan portfolio. Commercial loans are subject to a dual standardized grading process administered by the credit administration function. These grade assignments are performed independent of each other and a consensus is reached by credit administration and the loan review officer. Specific allowances are established in cases where management has identified significant conditions or circumstances related to an individual credit that indicate it should be evaluated on an individual basis. Considerations with respect to specific allocations for these individual credits include, but are not limited to, the following: (a) the sufficiency of the customer's cash flow or net worth to repay the loan; (b) the adequacy of the discounted value of collateral relative to the loan balance; (c) whether the loan has been criticized in a regulatory examination; (d) whether the loan is nonperforming; (e) any other reasons the ultimate collectability of the loan may be in question; or (f) any unique loan characteristics that require special monitoring. Allocations are also applied to categories of loans considered not to be individually analyzed, but for which the rate of loss is expected to be consistent with or greater than historical averages. Such allocations are based on past loss experience and information about specific borrower situations and estimated collateral values. These general pooled loan allocations are performed for portfolio segments of commercial and industrial; commercial real estate, multi-family, and construction; agri-business and agricultural; other commercial loans; and consumer 1-4 family mortgage and other consumer loans. General allocations of the allowance are determined by a historical loss rate based on the calculation of each pool's probability of default-loss given default, subject to a floor. The length of the historical period for each pool is based on the average life of the pool. The historical loss rates are all supplemented with consideration of economic conditions and portfolio trends. The risk characteristics of each of the identified portfolio segments are as follows: Commercial and Industrial - Borrowers may be subject to industry conditions including decreases in product demand; increase in material or other production costs that cannot be immediately recaptured in the sales or distribution cycle; interest rate increases that could have an adverse impact on profitability; non-payment of credit that has been extended under normal vendor terms for goods sold or services; and interruption related to the importing or exporting of production materials or sold products. Commercial Real Estate and Multi-Family Residential - Borrowers may be subject to potential adverse market conditions that cause a decrease in market value or lease rates; the potential for environmental impairment from events occurring on subject or neighboring properties; and obsolescence in location or function. Multi-Family Residential is also subject to adverse market conditions associated with a change in governmental or personal funding sources for tenants; over supply of units in a specific region; a shift in population; and reputational risks. Construction and Land Development risks include slower absorption than anticipated on speculative projects; deterioration in market conditions that may impact a project's value; unforeseen costs not considered in the original construction budget; or any other factors that may impact the completion or success of the project. Agri-business and Agricultural - Borrower may be subject to adverse market or weather conditions including changes in local or foreign demand; lower yields than anticipated; political or other impact on storage, distribution or use; foreign trade policies including tariffs; and exposure to increasing commodity prices which result in higher production, distribution or exporting costs. Other Commercial - Borrowers may be subject to the uninterrupted flow of funds to states and other political subdivisions for the purpose of debt repayments on loans held by the Bank. Consumer 1-4 Family Mortgage - Borrowers may be subject to adverse employment conditions in the local economy leading to increased default rates; decreased market values from oversupply in a geographic area; and impact to the borrowers' ability to maintain payments in the event of incremental rate increases on adjustable rate mortgages. Other Consumer - Borrowers may be subject to adverse employment conditions in the local economy which may lead to higher default rates; and decreases in the value of underlying collateral. A loan is individually analyzed for specific allocation when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans, for which the terms have been modified and a concession has been granted for borrowers experiencing financial difficulties, are considered troubled debt restructurings and classified as individually evaluated and may be either accruing or non-accruing. Nonaccrual troubled debt restructurings follow the same policy as described above for other loans. Individual evaluation for NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) troubled debt restructurings is measured at the present value of estimated future cash flows using the loan’s effective rate at inception or at discounted collateral value for collateral dependent loans. Allocations are analyzed individually or in total for smaller-balance loans of similar nature such as all classes of consumer 1-4 family and other consumer loans, and individually for all classes of commercial and industrial, commercial real estate and multi-family, agribusiness and agricultural and other commercial loans. The Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis for Special Mention, Substandard and Doubtful grade loans and annually on Pass grade loans over $250,000. Factors considered by management in determining individual evaluation include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as individually evaluated. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. If a loan is individually evaluated, a portion of the allowance may be allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral less anticipated costs to sell. All classes of commercial and industrial, commercial real estate and multifamily residential, agribusiness and agricultural, other commercial and consumer 1-4 family mortgage loans that become delinquent beyond 90 days are analyzed and a charge-off is taken when it is determined that the underlying collateral, if any, is not sufficient to offset the indebtedness. Troubled debt restructured loans are considered for removal from troubled debt restructuring status in the year following modification or at time of subsequent restructuring for loans with cumulative principal forgiveness if the interest rate is considered a market rate at the time of modification and it has been performing according to the terms of the modification for a reasonable period of time long enough to observe an ability to repay under the modified terms. If removed from troubled debt restructuring status, the loan continues to be individually evaluated for specific allocation with either the present value of estimated future cash flows using the loan’s effective rate at inception or at discounted collateral value for collateral dependent loans. In addition, troubled debt restructured loans with subsequent modifications that do not have cumulative principal forgiveness are considered for removal from troubled debt restructuring status at the time of the subsequent modification if the following circumstances exist: (1) at the time of the subsequent restructuring, the borrower is not experiencing financial difficulties; (2) under the terms of the subsequent restructuring agreement no concession has been granted to the borrower; and (3)the subsequent restructuring agreement includes market terms that are no less favorable than those that would be offered for comparable new debt. Upon meeting these criteria, the loan is no longer individually evaluated and is no longer disclosed as a troubled debt restructuring. Due to the imprecise nature of estimating the allowance for credit losses, the Company's allowance for credit losses includes an unallocated component. The unallocated component of the allowance for credit losses incorporates the Company's judgmental determination of potential expected losses that may not be fully reflected in other allocations, including factors such as the level of classified credits, economic uncertainties, industry trends impacting specific portfolio segments, broad portfolio quality trends, and trends in the composition of the Company's large commercial loan portfolio and related large dollar exposures to individual borrowers. As a practical expedient, the Company has elected to disclose accrued interest separately from loan principal balances on the consolidated balance sheet. Additionally, when a loan is placed on non-accrual, interest payments are reversed through interest income. For off balance sheet credit exposures outlined in the ASU at 326-20-30-11, it is the Company's position that nearly all of the unfunded amounts on lines of credit are unconditionally cancellable, and therefore not subject to having a liability set up, which matches the current accounting conclusion in the incurred loss environment. 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 analyzes commercial loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis for Special Mention, Substandard and Doubtful grade loans and annually on Pass grade loans over $250,000. 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. Substandard. Loans classified as Substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized as 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 characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loans are considered to be "Pass" rated when they are reviewed as part of the previously described process and do not meet the criteria above with the exception of consumer troubled debt restructurings, which are evaluated and listed with Substandard commercial grade loans and consumer nonaccrual loans which are evaluated individually and listed with “Not Rated” loans. Loans listed as Not Rated are consumer loans or commercial loans with consumer characteristics included in groups of homogenous loans which are analyzed for credit quality indicators utilizing delinquency status.
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Investments in Limited Partnerships | Investments in Limited Partnerships: The Company enters into and invests in limited partnerships in order to invest in affordable housing projects to support Community Reinvestment Act activities and secondarily to obtain available tax benefits. The Company is a limited partner in these investments and, as such, the Company is not involved in the management or operation of such investments. These investments are accounted for using the equity method of accounting. Under the equity method of accounting, the Company records its share of the partnership’s earnings or losses in its income statement and adjusts the carrying amount of the investments on the consolidated balance sheet. These investments are evaluated for impairment when events indicate the carrying amount may not be recoverable. The investments recorded at December 31, 2021 and 2020 were $9.4 million and $9.2 million, respectively and are included with other assets in the consolidated balance sheet. The Company also has a commitment to fund an additional $2.2 million at December 31, 2021 in four of the limited partnerships compared to $2.6 million at December 31, 2020, which is included with other liabilities in the consolidated balance sheet. NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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Foreclosed Assets | Foreclosed Assets: Assets acquired through 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. If fair value declines, a valuation allowance is recorded through expense. Costs incurred after acquisition are expensed. At December 31, 2021 and 2020, the balance of other real estate owned was $196,000 and $316,000, respectively, and is included with other assets on the consolidated balance sheet.
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Land, Premises and Equipment, Net | Land, Premises and Equipment, Net: Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed on the straight-line method over the useful lives of the assets. Premises and improvements assets have useful lives between 5 and 40 years. Equipment and furniture assets have useful lives between 3 and 7 years.
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Loan Servicing Rights | Loan Servicing Rights: Servicing rights are recognized separately when they are acquired through sales of loans. When mortgage loans are sold, servicing rights are initially recorded at fair value with the income statement effect recorded in mortgage banking income. Fair value is based on a valuation model that calculates the present value of estimated future net servicing income. All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. The amortization of servicing rights is netted against mortgage banking income. Servicing fees totaled $1.2 million, $1.2 million and $1.1 million for the years ended December 31, 2021, 2020 and 2019, respectively. Late fees and ancillary fees related to loan servicing are not material. Servicing rights are evaluated for impairment based upon the fair value of the rights as compared to carrying amount. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics, such as loan type, term and interest rate. Any impairment of a grouping is reported as a valuation allowance, to the extent that fair value is less than the carrying amount. If the Company later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income. Changes in the valuation allowance are reported with mortgage banking income on the income statement. The fair values of servicing rights are subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and losses. The carrying value of mortgage servicing rights, which is included with other assets in the consolidated balance sheet, was $2.4 million and $3.5 million as of December 31, 2021 and 2020, respectively. Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of these loans were $375.4 million and $351.0 million at December 31, 2021 and 2020, respectively. Custodial escrow balances maintained in connection with serviced loans were $1.7 million at year end 2021 and 2020. Servicing fee income (loss), which is included in loan and service fees on the income statement, is recorded for fees earned for servicing loans. Fees earned for servicing loans are based on a contractual percentage of the outstanding principal amount of the loan and are recorded as income when earned.
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Transfers of Financial Assets | Transfers of Financial Assets: Transfers of financial assets are accounted for as sales, when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.
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Mortgage Banking Derivatives | Mortgage Banking Derivatives: Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as free-standing derivatives. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The Company enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into, in order to hedge the change in interest rates resulting from its commitments to fund the loans. Changes in fair values of these derivatives are included in mortgage banking income.
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Interest Rate Swap Derivatives | Interest Rate Swap Derivatives: The Company offers a derivative product to certain creditworthy commercial banking customers. This product allows the commercial banking customers to enter into an agreement with the Company to swap a variable rate loan to a fixed rate. These derivative products are designed to reduce, eliminate or modify the borrower’s interest rate exposure. The extension of credit incurred in connection with these derivative products is subject to the same approval and underwriting standards as traditional credit products. The Company limits its risk exposure by simultaneously entering into a similar, offsetting swap agreement with a separate, well-capitalized and highly rated counterparty previously approved by the Company’s Asset Liability Committee. By using these interest rate swap arrangements, the Company is also better insulated from the interest rate risk associated with underwriting fixed-rate loans and is better able to meet customer demand for fixed rate loans. These derivative contracts are not designated against specific assets or liabilities and, therefore, do not qualify for hedge accounting. The derivatives are recorded as assets and liabilities on the balance sheet at fair value with changes in fair value recorded in non-interest income for both the commercial banking customer swaps and the related offsetting swaps. The fair value of the derivative instruments incorporates a consideration of credit risk (in accordance with ASC 820), resulting in some potential volatility in earnings each period. The notional amount of the combined interest rate swaps with customers and counterparties at December 31, 2021 and 2020 was $796.0 million and $819.1 million, respectively. The fair value of the interest rate swap asset was $14.3 million and $21.8 million and the fair value of the interest rate swap liability was $14.3 million and $21.8 million at December 31, 2021 and 2020, respectively. The Company is a party in risk participation transactions of interest rate swaps, which had a total notional amount of $4.6 million and 5.0 million at December 31, 2021 and 2020, respectively.
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Bank Owned Life Insurance | Bank Owned Life Insurance: At December 31, 2021 and 2020, the Company owned $91.1 million and $90.4 million, respectively, of life insurance policies on certain officers to provide a life insurance benefit for these officers. At December 31, 2021 and 2020, the Company also owned $6.6 million and $4.8 million, respectively, of variable life insurance on certain officers related to a deferred compensation plan. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, i.e., the cash surrender value adjusted for other changes or other amounts due that are probable at settlement.
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Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets: All goodwill on the Company’s consolidated balance sheet resulted from business combinations prior to January 1, 2009 and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is not amortized, but assessed at least annually for impairment and any such impairment will be recognized in the period identified.
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FHLB and Federal Reserve Bank Stock | FHLB and Federal Reserve Bank Stock: FHLB and Federal Reserve Bank stock are carried at cost in other assets, classified as a restricted security and are periodically evaluated for impairment based on ultimate recoverability of par value. Both cash and stock dividends are reported as income.
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Repurchase Agreements | Repurchase Agreements: Substantially all repurchase agreement liabilities represent amounts advanced by various customers. Securities are pledged to cover these liabilities, which are not covered by federal deposit insurance. This product was discontinued during 2019.
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Long-term Assets | Long-term Assets: Premises and equipment, and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.
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Benefit Plans | Benefit Plans: The Company has a noncontributory defined benefit pension plan, which covered substantially all employees until the plan was frozen effective April 1, 2000. Funding of the plan equals or exceeds the minimum funding requirement determined by the actuary. Pension expense is the net of interest cost, return on plan assets and amortization of gains and losses not immediately recognized. Benefits are based on years of service and compensation levels. The Company maintains a 401(k) profit sharing plan for all employees meeting certain age and service requirements. The Company contributions are based upon the percentage of budgeted net income earned during the year. An employee deferred compensation plan is available to certain employees with returns based on investments in mutual funds. The Company maintains a directors’ deferred compensation plan. Effective January 1, 2003, the directors’ deferred compensation plan was amended to restrict the deferral to be in stock only and deferred directors’ fees are included in equity. The Company acquires shares on the open market and records such shares as treasury stock.
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Revenue from Contract with Customer | Revenue Recognition: All of the Company’s revenue from contracts with customers in the scope of ASC 606 is recognized within noninterest income. The following is a description of principal activities from which we generate revenue. Revenues are recognized as the Company satisfies its obligations with our customers, in an amount that reflects the consideration that we expect to receive in exchange for those services. Wealth advisory fees The Company provides wealth advisory services to its customers and earns fees from its contracts with trust customers to manage assets for investment and/or to transact on their accounts. These fees are primarily earned over time as the Company provides the contracted monthly, quarterly, or annual services and are generally assessed based on a tiered scale of the market value of assets under management (AUM) at month-end. Fees that are transaction based, including trade execution services, are recognized at the point in time that the transaction is executed. Other related services, such as escrow accounts that are based on a fixed schedule, are recognized when the services are rendered. Investment brokerage services The Company provides investment brokerage services through a full service brokerage and investment and advisory firm, Cetera Investment Services LLC (“Cetera”). The Company receives commissions from Cetera on a monthly basis based upon customer activity for the month. The fees are recognized monthly and a receivable is recorded until commissions are generally paid by the 5th business day of the following month. Because the Company (i) acts as an agent in arranging the relationship between the customer and the Cetera and (ii) does not control the services to the customers, investment brokerage service fees are presented net of Cetera’s related costs. Service charges on deposit accounts The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer’s balance. Interchange income The Company provides the ability to transact on certain deposit accounts through the use of debit cards by outsourcing the services through third party service providers. Performance obligations are met on a transactional basis and income is recognized monthly based on transaction type and volume. Under the accounting standards in effect in the prior period, revenue was previously recognized net of the third party’s costs. Under ASC 606, fees from interchange income related to its customers use of debit cards will be reported gross in loan and service fees under noninterest income. The cost of using third party providers for these interchange services are reported in data processing fees and supplies under noninterest expense. NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Gain on sale of other real estate (OREO) owned financed by seller On occasion, the Company underwrites a loan to purchase property owned by the Company. Under ASC 606, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain (loss) on sale if a significant financing component is present. Debit card incentive rebates The Company receives incentive rebates based on debit card transaction volume. Performance obligations are met on a transactional basis and income is recognized monthly based on transaction volume. Under the accounting standards in effect in the prior period, revenue was previously recognized in other income under noninterest income. Under ASC 606, these rebates related to debit card transaction volume are reported as a contra expense in data processing fees and supplies under noninterest expense.
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Stock Based Compensation | Stock Based Compensation: Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant adjusted for the present value of expected dividends is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. Certain of the restricted stock awards are performance based, as more fully discussed in Note 15 – Stock Based Compensation.
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Income Taxes | Income Taxes: Annual consolidated federal and state income tax returns are filed by the Company. Deferred income tax assets and liabilities are determined using the liability (or balance sheet) method. Income tax expense is recorded based on the amount of taxes due on its tax return plus net deferred taxes computed based upon the expected future tax consequences of temporary differences between carrying amounts and tax basis of assets and liabilities, using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is more likely of being realized on examination than not. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters in income tax expense.
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Off-Balance Sheet Financial Instruments | Off-Balance Sheet Financial Instruments: Financial instruments include credit instruments, such as commitments to make loans and standby letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. The fair value of standby letters of credit is recorded as a liability during the commitment period.
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Earnings Per Common Share | Earnings Per Common Share: Basic earnings per common share is net income divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock options, restricted stock awards and warrants. Earnings and dividends per share are restated for all stock splits and dividends through the date of issue of the financial statements. The common shares included in treasury stock for 2021 and 2020 were 476,816 and 473,660 shares, respectively. Common stock that has been purchased under the directors’ deferred compensation plan, described above, is included in the treasury stock total and represented 187,715 and 184,559 shares of treasury stock as of December 31, 2021 and 2020, respectively. Because these shares are held in trust for the participants, NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) they are treated as outstanding when computing the weighted-average common shares outstanding for the calculation of both basic and diluted earnings per share. During the year ended December 31, 2020, the Company repurchased 289,101 of its common shares at a weighted average price of $34.63 per share. Treasury stock is carried at cost.
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Comprehensive Income | Comprehensive Income: Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on securities available-for-sale and changes in the funded status of the pension plan, which are also recognized as separate components of equity.
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Loss Contingencies | Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. The Bank discovered potentially fraudulent activity by a former treasury management client involving multiple banks. The former client subsequently filed several related bankruptcy cases, captioned In re Interlogic Outsourcing, Inc., et al., which are pending in the United States Bankruptcy Court for the Western District of Michigan. On April 27, 2021, the bankruptcy court entered an order approving an amended plan of liquidation, which was filed by the former client, other debtors and bankruptcy plan proponents, and approving the consolidation of the assets in the aforementioned cases under the Khan IOI Consolidated Estate Trust. On August 9, 2021, the liquidating trustee for the bankruptcy estates filed a complaint against the Bank and the Company, and has agreed to stay prosecution of the action through March 31, 2022. The action is focused on a series of business transactions among the client, related entities, and the Bank, which the liquidating trustee alleges are voidable under applicable federal bankruptcy and state law. The complaint also addresses treatment of the Bank’s claims filed in the bankruptcy cases. Based on current information, we have determined that a material loss is neither probable nor estimable at this time, and the Bank and the Company intend to vigorously defend themselves against all allegations asserted in the complaint. Management does not believe there currently are matters that will have a material effect on the financial statements.
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Restrictions on Cash | Restrictions on Cash: The Federal Reserve Bank eliminated the reserve requirement for all depository institutions in March of 2020. Therefore, the Company was not required to have cash on hand or on deposit with the Federal Reserve Bank to meet regulatory reserve and clearing requirements at December 31, 2021 and 2020.
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Dividend Restriction | Dividend Restriction: Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the Company or by the Company to its stockholders. These restrictions currently pose no practical limit on the ability of the Bank or Company to pay dividends at historical levels.
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Fair Value of Financial Instruments | Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 5 - Fair Value. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.
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Operating Segments | Operating Segments: The Company’s chief decision-makers monitor and evaluate financial performance on a Company-wide basis. All of the Company’s financial service operations are similar and considered by management to be aggregated into one reportable operating segment. While the Company has assigned certain management responsibilities by region and business-line, the Company’s chief decision-makers monitor and evaluate financial performance on a Company-wide basis. The majority of the Company’s revenue is from the business of banking and the Company’s assigned regions have similar economic characteristics, NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) products, services and customers. Accordingly, all of the Company’s operations are considered by management to be aggregated in one reportable operating segment.
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Adoption of New Accounting Standards | Adoption of New Accounting Standards: In June 2016, the FASB issued ASU 2016-13 "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." This update, commonly referred to as the current expected credit losses methodology (“CECL”), changes the accounting for credit losses on loans and debt securities. Under the new guidance, the Company’s measurement of expected credit losses is based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. For loans, this measurement takes place at the time the financial asset is first added to the balance sheet and periodically thereafter. This differs significantly from the “incurred loss” model previously required, but still permitted, under GAAP, which delays recognition until it is probable a loss has been incurred. In addition, the guidance modifies the other-than-temporary impairment model for available-for-sale debt securities to require an allowance for credit impairment instead of a direct write-down, which allows for reversal of credit impairments in future periods. This guidance was effective, subject to optional delay discussed below, for the Company for fiscal years beginning after December 15, 2019, including interim periods in those fiscal years. As previously disclosed, the Company implemented the CECL methodology and ran it concurrently with the historical incurred method. Under a provision provided by the CARES Act, the Company elected to delay the adoption of FASB’s new rule covering the CECL standard. On December 27, 2020, then-President Trump signed into law the Consolidated Appropriations Act, 2021. This law extended relief for troubled debt restructurings and provided for further delay of the current expected credit losses adoption under the CARES Act to January 1, 2022, with early adoption permitted. The Company elected to remain on the incurred loan loss methodology for 2020. The Company adopted ASU 2016-13 during the first quarter of 2021, effective January 1, 2021. Upon adoption, the Company recognized a $9.1 million increase in the allowance for credit losses. This resulted in a one-time cumulative effect adjustment decreasing retained earnings as of January 1, 2021 by $7.0 million, net of deferred taxes of $2.1 million. The Company did not recognize an allowance for credit impairment for available-for-sale securities. The following table illustrates the impact of adoption of the ASU:
The Company’s loan segmentation, as disclosed in “Note 3 – Loans”, did not change as a result of adopting this ASU. In December 2018, the OCC, the Board of Governors of the Federal Reserve System, and the FDIC 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. In March 2020, the OCC, the Board of Governors of the Federal Reserve System, and the FDIC published an interim final rule to delay the estimated impact on regulatory capital stemming from the implementation of CECL. The interim final rule maintains the three-year transition option in the previous rule and provides 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 did not adopt the capital transition relief over the permissible three-year or five-year periods. NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) In August 2018, the FASB issued ASU 2018-14 “Compensation — Retirement Benefits — Defined Benefit Plans— General (Topic 715-20): Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans.” The ASU updated the annual disclosure requirements for employers that sponsor defined benefit pension or other postretirement benefit plans by adding, clarifying and removing certain disclosures. These amendments are effective for fiscal years ending after December 15, 2020, for public business entities, and are to be applied on a retrospective basis to all periods presented. The Company adopted this new accounting standard on January 1, 2021, and the adoption did not have a material impact on its financial statements. In December 2019, the FASB issued ASU 2019-12 “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” These amendments remove specific exceptions to the general principles in Topic 740 in GAAP. It eliminates the need for an organization to analyze whether the following apply in a given period: exception to the incremental approach for intraperiod tax allocation; exceptions to accounting for basis differences where there are ownership changes in foreign investments; and exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. It also improves financial statement preparers’ application of income tax-related guidance and simplifies GAAP for: franchise taxes that are partially based on income; transactions with a government that result in a step up in the tax basis of goodwill; separate financial statements of legal entities that are not subject to tax. It also enacts changes in tax laws in interim periods. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted this new accounting standard on January 1, 2021, and the adoption did not have a material impact on its financial statements. In January 2020, the FASB issued ASU No. 2020-1 “Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.” These amendments, among other things, clarify that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments-Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. The amendments also clarify that, when determining the accounting for certain forward contracts and purchased options a company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early application is permitted, including early adoption in an interim period. An entity should apply ASU 2020-1 prospectively at the beginning of the interim period that includes the adoption date. The Company adopted ASU 2020-1 on January 1, 2021 and it did not have a material impact on its financial statements. In October 2020, the FASB issued ASU No. 2020-8, "Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs," to clarify that an entity should reevaluate whether a callable debt security is within the scope of ASC paragraph 310-20-35-33 for each reporting period. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, and early application is not permitted. The Company adopted this new accounting standard on January 1, 2021, and the adoption did not have a material impact on its financial statements.
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Newly Issued But Not Yet Effective Accounting Standards | Newly Issued But Not Yet Effective Accounting Standards: On March 12, 2020, the FASB issued Accounting Standards Update (ASU) 2020-4, "Reference Rate Reform (“ASC 848”): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." ASC 848 contains optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The Company has formed a cross-functional project team to lead the transition from LIBOR to adoption of alternative reference rates which include Secured Overnight Financing Rate (“SOFR”), American Interbank Offered Rate ("Ameribor"), and Bloomberg Short-Term Bank Yield Index ("BSBY"). The Company identified loans that renewed prior to 2021 and obtained updated reference rate language at the time of renewal. Additionally, management is utilizing the timeline guidance published by the Alternative Reference Rates Committee to develop and achieve internal milestones during this transitional period. Additionally, the Company has adhered to the International Swaps and Derivatives Association 2020 IBOR Fallbacks Protocol that was released on October 23, 2020. The Company discontinued the use of new LIBOR-based loans by December 31, 2021, according to regulatory guidelines. Legacy LIBOR-based loans will be transitioned to an alternative reference rate on or before June 30, 2023. The NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) guidance under ASC-848 will be available for a limited time, generally through December 31, 2022. The Company expects to adopt the LIBOR transition relief allowed under this standard. In August 2021, the FASB issued ASU 2021-6, "Presentation of Financial Statements (Topic 205), Financial Services - Depository and Lending (Topic 942) and Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants." The guidance is effective upon its addition to the FASB codification and will not have a material impact on the consolidated financial statements.
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Reclassifications | Reclassifications: Certain amounts appearing in the financial statements and notes thereto for prior periods have been reclassified to conform with the current presentation. The reclassifications had no effect on net income or stockholders’ equity as previously reported.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Impact of Adoption of the ASU | The following table illustrates the impact of adoption of the ASU:
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SECURITIES (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Available-For-Sale Securities | Information related to the amortized cost, fair value and allowance for credit losses of securities available-for-sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income at December 31, 2021 is provided in the tables below.
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Schedule of Available-For-Sale Securities By Maturity |
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Schedule of Sales of Securities Available For Sale | Security proceeds, gross gains and gross losses for 2021, 2020 and 2019 were as follows:
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Schedule of Available-For-Sale Securities Continuous Unrealized Loss Position | Information regarding securities with unrealized losses as of December 31, 2021 and 2020 is presented below. The tables distribute the securities between those with unrealized losses for less than twelve months and those with unrealized losses for twelve months or more.
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Schedule of Quantitative Disclosure of Available-For-Sale Securities | The number of securities with unrealized losses as of December 31, 2021 and 2020 is presented below.
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LOANS (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loans | Total loans outstanding as of the years ended December 31, 2021 and 2020 consisted of the following:
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ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In Allowance For Loan Losses and Recorded Investment In Loans By Portfolio Segment | The following table presents the activity in the allowance for credit losses by portfolio segment for the year ended December 31, 2021:
The following tables present the activity and balance in the allowance for loan losses by portfolio segment for the year ended December 31, 2020 and 2019. PPP loans are fully guaranteed by the SBA and have not been allocated for within the allowance for loan losses.
The following tables present balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2020:
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Risk category of loans by loan segment and origination | The following table summarizes the risk category of loans by loan segment and origination date as of December 31, 2021:
As of December 31, 2020, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:
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Aging of the Recorded Investment in Past Due Loans | The following table presents the aging of the amortized cost basis in past due loans as of December 31, 2021 by class of loans and loans past due 90 days or more and still accruing by class of loan:
The following table presents the aging of the recorded investment in past due loans as of December 31, 2020 by class of loans:
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Amortized Cost Basis of Collateral Dependent Loans | The following table presents the amortized cost basis of collateral dependent loans by class of loan as of December 31, 2021:
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Troubled Debt Restructuring |
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Loans by Class Modified as Troubled Debt Restructurings | The following table presents loans by class modified as new troubled debt restructurings that occurred during the year ending December 31, 2021:
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Loans individually evaluated for impairment | The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2020:
The following table presents loans individually evaluated for impairment by class of loans for the year ended December 31, 2020:
The following table presents loans individually evaluated for impairment by class of loans for the year ended December 31, 2019:
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FAIR VALUE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets Measured at Fair Value on a Recurring Basis | The table below presents the balances of assets and liabilities measured at fair value on a recurring basis:
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Schedule of Assets Measured at Fair Value on a Nonrecurring Basis | The tables below present the amount of assets measured at fair value on a nonrecurring basis:
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Schedule of Fair Value Measured on Nonrecurring Basis Valuation Techniques | The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at December 31, 2021:
NOTE 5 – FAIR VALUE (continued) The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at December 31, 2020:
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Schedule of Fair Values and the Related Carrying Values of Financial Instruments | NOTE 5 – FAIR VALUE (continued) The following table contains the estimated fair values and the related carrying values of the Company’s financial instruments at December 31, 2021. Items which are not financial instruments are not included.
NOTE 5 – FAIR VALUE (continued) The following table contains the estimated fair values and the related carrying values of the Company’s financial instruments at December 31, 2020. Items which are not financial instruments are not included.
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LAND, PREMISES AND EQUIPMENT, NET (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Land, Premises And Equipment | Land, premises and equipment and related accumulated depreciation were as follows at December 31, 2021 and 2020:
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DEPOSITS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Certain Deposits | The following table details total deposits as of December 31, 2021 and 2020:
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Deposit Maturities | At December 31, 2021, the scheduled maturities of time deposits were as follows:
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BORROWINGS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Short-Term Debt | For the years ending December 31, there was one outstanding advance from the FHLB as follows:
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PENSION AND OTHER POSTRETIREMENT PLANS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Projected Benefit Obligations and Plan Assets | Information as to the Company’s employee benefit plans at December 31, 2021 and 2020 is as follows:
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Schedule of Amounts Recognized in Balance Sheet | Amounts recognized in the consolidated balance sheets consist of:
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Amounts Recognized in Accumulated Other Comprehensive Income | Amounts recognized in accumulated other comprehensive income consist of:
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Schedule of Components of Net Periodic Benefit Cost | Net period benefit cost and other amounts recognized in other comprehensive income (loss) include the following:
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Schedule of Assumptions Used in Calculating the Net Benefit Obligation |
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Schedule of Allocation of Plan Assets | The Company’s pension plan asset allocation at year end 2021 and 2020, target allocation for 2021, and expected long-term rate of return by asset category are as follows: NOTE 11 – PENSION AND OTHER POSTRETIREMENT PLANS (continued)
The Company’s SERP plan asset allocation at year end 2021 and 2020, target allocation for 2021, and expected long-term rate of return by asset category are as follows:
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Schedule Of Fair Values Of Pension Plan and Postretirement Plan Assets By Asset Category | The fair values of the Company’s pension plan assets at December 31, 2021, by asset category are as follows:
The fair values of the Company’s pension plan assets at December 31, 2020, by asset category are as follows:
The fair values of the Company’s SERP assets at December 31, 2021, by asset category are as follows:
The fair values of the Company’s SERP assets at December 31, 2020, by asset category are as follows:
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Schedule of Expected Benefit Payments | The following benefit payments are expected to be paid over the next ten years:
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense | Income tax expense for the years ended December 31, 2021, 2020 and 2019 consisted of the following:
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Schedule of Differences In Taxes From Continuing Operations | The differences between financial statement tax expense and amounts computed by applying the statutory federal income tax rate of 21% to income before income taxes were as follows:
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Schedule of Deferred Tax Assets and Liabilities | The net deferred tax asset recorded in the consolidated balance sheets at December 31, 2021 and 2020 consisted of the following:
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RELATED PARTY TRANSACTIONS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of related party transactions | Loans to principal officers, directors, and their affiliates as of December 31, 2021 and 2020 were as follows:
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STOCK BASED COMPENSATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restricted Stock Awards and Units | A summary of the changes in the Company’s non-vested shares for the year follows:
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Schedule of Nonvested Performance-based Units | Shares granted below include the number of shares assumed granted based on actual performance criteria of the 2021-2023, 2020-2022 and 2019-2021 Long-Term Incentive Plans at December 31, 2021.
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CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Requirements and Restrictions On Retained Earnings [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | There have been no conditions or events since that notification that management believes have changed the Company and the Bank’s category.
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OFFSETTING ASSETS AND LIABILITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OFFSETTING ASSETS AND LIABILITIES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Offsetting Assets And Liability | The following tables summarize gross and net information about financial instruments and derivative instruments that are offset in the statement of financial position or that are subject to an enforceable master netting arrangement at December 31, 2021 and 2020.
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COMMITMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Instruments Commitments | These financial instruments include commitments to make loans and open-ended revolving lines of credit. Amounts as of the years ended December 31, 2021 and 2020, were as follows:
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Schedule Of Rate Of Interest Percentage Financial Instruments | The index on variable rate commercial loan commitments is principally the national prime rate. Interest rate ranges on commitments and open-ended revolving lines of credit for years ended December 31, 2021 and 2020, were as follows:
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PARENT COMPANY STATEMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Condensed Balance Sheet | CONDENSED BALANCE SHEETS
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Schedule of Condensed of income and comprehensive income statement | CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
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Schedule of Condensed cash flow statement | CONDENSED STATEMENTS OF CASH FLOWS
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EARNINGS PER SHARE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted Average Number of Shares | Following are the factors used in the earnings per share computations:
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OCI, Debt Securities, Available-for-Sale, Gain (Loss), after Adjustment and Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Accumulated Other Comprehensive Income | The following tables summarize the changes within each classification of accumulated other comprehensive income (loss) for December 31, 2021 and 2020, all shown net of tax:
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Schedule of Reclassification Out of Accumulated Other comprehensive income | Reclassifications out of accumulated comprehensive income for the years ended December 31, 2021, 2020 and 2019 are as follows:
(1)Included in the computation of net pension plan expense as more fully discussed in Note 11 – Pension and Other Postretirement Plans.
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SELECTED QUARTERLY DATA (UNAUDITED) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Quarterly Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information |
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LEASES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Maturity Analysis of the Operating Lease Liabilities | The following is a maturity analysis of the operating lease liabilities as of December 31, 2021:
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Schedule of Lease Cost |
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SECURITIES - Schedule of Available For Sale Securities By Maturity (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Amortized Cost | ||
Due in one year or less | $ 3,700 | |
Due after one year through five years | 9,534 | |
Due after five years through ten years | 52,232 | |
Due after ten years | 823,824 | |
Total debt securities, gross | 889,290 | |
Mortgage-backed securities | 487,679 | |
Amortized Cost | 1,376,969 | $ 697,906 |
Fair Value | ||
Due in one year or less | 3,704 | |
Due after one year through five years | 9,823 | |
Due after five years through ten years | 54,892 | |
Due after ten years | 842,940 | |
Total debt securities, gross | 911,359 | |
Mortgage-backed securities | 487,199 | |
Total debt securities | $ 1,398,558 | $ 734,845 |
SECURITIES - Schedule of Sales of Securities Available For Sale (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Sales of securities available-for-sale | |||
Proceeds | $ 13,964 | $ 8,018 | $ 57,114 |
Gross gains | 797 | 433 | 279 |
Gross losses | $ 0 | $ 0 | $ (137) |
Number of securities | 9 | 17 | 46 |
SECURITIES - Quantitative Disclosure of Available For Sale of Securities (Details) - position |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Number of securities with unrealized losses [Abstract] | ||
Less than 12 months | 117 | 7 |
12 months or more | 8 | 1 |
Total | 125 | 8 |
U.S. government sponsored agencies | ||
Number of securities with unrealized losses [Abstract] | ||
Less than 12 months | 8 | 3 |
12 months or more | 5 | 0 |
Total | 13 | 3 |
Mortgage-backed securities: residential | ||
Number of securities with unrealized losses [Abstract] | ||
Less than 12 months | 29 | 2 |
12 months or more | 3 | 1 |
Total | 32 | 3 |
State and municipal securities | ||
Number of securities with unrealized losses [Abstract] | ||
Less than 12 months | 80 | 2 |
12 months or more | 0 | 0 |
Total | 80 | 2 |
SECURITIES - Additional Information (Details) - USD ($) $ in Millions |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Information related to available for sale securities | ||
Available-for-sale Securities pledged as collateral | $ 300.8 | $ 382.7 |
Accrued interest receivable on available-for-sale debt securities | $ 7.4 | |
Securities backed by government or investment grade | 99.00% |
LOANS - Additional Information (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Receivables [Abstract] | ||
Investment loans excluding accrued interest | $ 10,000 | $ 14,600 |
Residential real estate loans in process of foreclosure | $ 350 | $ 19 |
ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY - Troubled Debt Restructuring (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY | ||
Accruing troubled debt restructured loans | $ 5,121 | $ 5,237 |
Nonaccrual troubled debt restructured loans | 6,218 | 6,476 |
Total troubled debt restructured loans | $ 11,339 | $ 11,713 |
ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY - Troubled Debt Restructurings Subsequently Defaulted (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021
USD ($)
loan
|
Dec. 31, 2020
USD ($)
loan
|
Dec. 31, 2019
USD ($)
loan
|
|
Troubled Debt Restructurings | |||
Number of Loans | loan | 0 | 0 | 1,000 |
Recorded Investment | $ | $ 0 | $ 0 | $ 601 |
Non-working capital loans | Commercial and Industrial | |||
Troubled Debt Restructurings | |||
Number of Loans | loan | 0 | 0 | 1,000 |
Recorded Investment | $ | $ 0 | $ 0 | $ 601 |
LAND, PREMISES AND EQUIPMENT, NET (Summary of Land, Premises And Equipment) (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Property, Plant and Equipment [Abstract] | ||
Land | $ 12,472 | $ 12,472 |
Premises and improvements | 58,716 | 55,682 |
Equipment and furniture | 39,278 | 38,133 |
Total cost | 110,466 | 106,287 |
Less accumulated depreciation | 51,157 | 46,989 |
Less accumulated depreciation | $ 59,309 | $ 59,298 |
LAND, PREMISES AND EQUIPMENT, NET (Additional Information) (Details) - USD ($) $ in Millions |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Land, premises and equipment held for sale | $ 0.0 | $ 0.1 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Additional Information (Details) $ in Millions |
Dec. 31, 2021
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Carrying amount of goodwill | $ 5.0 |
DEPOSITS - Summary of Certain Deposits (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Non-interest bearing demand deposits | $ 1,895,481 | $ 1,538,331 |
Savings and transaction accounts: | ||
Savings deposits | 409,343 | 312,702 |
Interest bearing demand deposits | 3,839,926 | 3,498,474 |
Time deposits: | ||
Other time deposits | 202,395 | 239,582 |
Deposits of $100,000 to $250,000 | 227,606 | 271,337 |
Deposits of $250,000 or more | 399,517 | 513,900 |
Total deposits | 5,735,407 | 5,036,805 |
Interest bearing demand deposits | ||
Savings and transaction accounts: | ||
Interest bearing demand deposits | $ 2,601,065 | $ 2,160,953 |
DEPOSITS - Scheduled Maturities of Time Deposits (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Deposits [Abstract] | |
2022 | $ 591,740 |
2023 | 174,035 |
2024 | 37,600 |
2025 | 13,704 |
2026 | 12,091 |
Thereafter | 348 |
Total time deposits | $ 829,518 |
DEPOSITS - Additional information (Details) - USD ($) $ in Millions |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Deposits [Abstract] | ||
Total amount available to the bank | $ 100.0 | $ 100.0 |
Total amount drawn | $ 10.0 | $ 10.0 |
BORROWINGS - Short-Term Borrowings (Details) - Federal Home Loan Bank of Indianapolis Putable Advance, 0.39%, Due March 4, 2030 - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Short-term Debt [Line Items] | ||
Federal Home Loan Bank of Indianapolis Putable Advance, 0.39%, Due March 4, 2030 | $ 75,000 | $ 75,000 |
Interest rate | 0.39% |
BORROWINGS - Additional Information (Details) |
Dec. 31, 2021
USD ($)
bank
|
Dec. 31, 2020
USD ($)
bank
|
Aug. 02, 2019
USD ($)
|
---|---|---|---|
Debt Instrument [Line Items] | |||
Residential real estate loans and securities pledged as collateral for FHLB advances, carrying value | $ 478,400,000 | $ 611,200,000 | |
FHLB stock | 10,400,000 | 10,400,000 | |
FHLB borrowing capacity, authorized | 800,000,000.0 | ||
Current borrowing capacity | 227,800,000 | ||
Commercial loans pledged as collateral for federal reserve discount window | 804,400,000 | 557,200,000 | |
Federal reserve borrowing capacity | 616,500,000 | 490,400,000 | |
Remaining borrowing capacity | $ 350,000,000.0 | $ 350,000,000.0 | |
Number of banks | bank | 11 | 11 | |
Outstanding borrowings | $ 0 | $ 10,500,000 | |
American Financial Exchange | |||
Debt Instrument [Line Items] | |||
Remaining borrowing capacity | 319,000,000.0 | 394,000,000.0 | |
Outstanding borrowings | 0 | 0 | |
Unsecured revolving credit agreement | |||
Debt Instrument [Line Items] | |||
Borrowing capacity | $ 30,000,000.0 | ||
Outstanding borrowings | $ 0 | $ 10,500,000 |
SUBORDINATED DEBENTURES - Additional Information (Details) - USD ($) |
9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2019 |
Oct. 01, 2003 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Subordinated Debentures Disclosure [Abstract] | |||||
Floating rate trust preferred securities issued | $ 30,000,000.0 | ||||
Subordinated debentures issued | $ 30,900,000 | ||||
Integral multiple subordinated debentures may be redeemed in | $ 1,000 | ||||
Percentage of principal amount subordinated debentures may be redeemed at | 100.00% | 100.00% | 100.00% | ||
Trust preferred securities redeemed | $ 30,000,000.0 | ||||
Payments for redemption of common securities | $ 559,000 | $ 10,547,000 | $ 515,000 | ||
Redemption price as a percentage of principal | 100.00% | ||||
Redemption price as a percentage of aggregate liquidation amount | 100.00% | ||||
Payments for Repurchase of Common Stock | $ 559,000 | $ 10,547,000 | $ 515,000 | ||
Trust Common Securities | |||||
Subordinated Debentures Disclosure [Abstract] | |||||
Payments for redemption of common securities | $ 928,000 | ||||
Payments for Repurchase of Common Stock | $ 928,000 |
PENSION AND OTHER POSTRETIREMENT PLANS (Schedule of Amounts Recognized in Balance Sheet) (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Pension Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Funded status included in other liabilities | $ 5 | $ 361 |
SERP Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Funded status included in other liabilities | $ 19 | $ 89 |
PENSION AND OTHER POSTRETIREMENT PLANS (Amounts Recognized in Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Net actuarial loss | $ (475) | $ (110) | $ 153 |
Pension Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net actuarial loss | 852 | 1,362 | |
SERP Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net actuarial loss | $ 431 | $ 553 |
PENSION AND OTHER POSTRETIREMENT PLANS (Schedule of Assumptions Used in Calculating the Net Benefit Obligation) (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Pension Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average discount rate | 2.49% | 2.08% | 2.98% |
Rate of increase in future compensation, lump sum assumed interest rates first 5 years | 0.87% | 0.53% | 2.01% |
Rate of increase in future compensation, lump sum assumed interest rates next 15 years | 2.74% | 2.31% | 3.06% |
Rate of increase in future compensation, lump sum assumed interest rates all future years | 3.16% | 3.09% | 3.65% |
Weighted average discount rate | 2.08% | 2.98% | 4.08% |
Expected long-term rate of return | 6.50% | 6.50% | 6.50% |
SERP Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average discount rate | 2.49% | 2.08% | 2.98% |
Weighted average discount rate | 2.08% | 2.98% | 4.08% |
Expected long-term rate of return | 6.50% | 6.50% | 6.50% |
PENSION AND OTHER POSTRETIREMENT PLANS (Schedule of Expected Benefit Payments) (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Pension Benefits | |
2022 | $ 193 |
2023 | 209 |
2024 | 182 |
2025 | 190 |
2026 | 191 |
2027-2031 | 703 |
SERP Benefits | |
2022 | 130 |
2023 | 123 |
2024 | 115 |
2025 | 105 |
2026 | 94 |
2027-2031 | $ 294 |
OTHER BENEFIT PLANS (Additional Information) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
401(K) Plan | |||
Summary of Other Benefit Plan [Line Items] | |||
Maximum employee contributions | 6.00% | ||
Plan expense | $ 2,300 | $ 1,900 | $ 1,800 |
Lake City Bank Deferred Compensation Plan | |||
Summary of Other Benefit Plan [Line Items] | |||
Plan expense | 1,200 | 1,000 | 461 |
Deferred compensation liability | 7,000 | 5,700 | |
Executive | |||
Summary of Other Benefit Plan [Line Items] | |||
Potential cash payment under employment agreements | 5,300 | ||
Director | |||
Summary of Other Benefit Plan [Line Items] | |||
Deferred compensation liability | 5,200 | 4,800 | |
Compensation expense | $ 482 | $ 505 | $ 515 |
INCOME TAXES - Summary of Income Tax Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | |||||||||||
Current federal | $ 21,329 | $ 20,032 | $ 19,430 | ||||||||
Deferred federal | (1,249) | (1,688) | (408) | ||||||||
Current state | 1,892 | 1,484 | 1,394 | ||||||||
Deferred state | (261) | (289) | (78) | ||||||||
Total income tax expense | $ 5,507 | $ 5,469 | $ 5,705 | $ 5,030 | $ 6,071 | $ 5,377 | $ 4,448 | $ 3,643 | $ 21,711 | $ 19,539 | $ 20,338 |
INCOME TAXES - Computation of Differences Between Financial Statement Tax Expense And Amounts (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | |||||||||||
Income taxes at statutory federal rate of 21% | $ 24,663 | $ 21,814 | $ 22,551 | ||||||||
Increase (decrease) in taxes resulting from: | |||||||||||
Tax exempt income | (2,822) | (1,925) | (1,682) | ||||||||
Nondeductible expense | 116 | 117 | 194 | ||||||||
State income tax, net of federal tax effect | 1,288 | 944 | 1,040 | ||||||||
Captive insurance premium income | (303) | (227) | (310) | ||||||||
Tax credits | (578) | (540) | (548) | ||||||||
Bank owned life insurance | (596) | (595) | (573) | ||||||||
Long-term incentive plan | (274) | (58) | (421) | ||||||||
Nondeductible compensation expense | 156 | 0 | 0 | ||||||||
Other | 61 | 9 | 87 | ||||||||
Total income tax expense | $ 5,507 | $ 5,469 | $ 5,705 | $ 5,030 | $ 6,071 | $ 5,377 | $ 4,448 | $ 3,643 | $ 21,711 | $ 19,539 | $ 20,338 |
INCOME TAXES - Summary of Net Deferred Tax Asset And Liability (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Deferred tax assets: | ||
Bad debts | $ 17,321 | $ 15,634 |
Pension and deferred compensation liability | 2,351 | 2,006 |
Nonaccrual loan interest | 600 | 892 |
Long-term incentive plan | 1,896 | 1,212 |
Lease liability | 1,078 | 1,190 |
Deferred loan fees | 771 | 0 |
Other | 191 | 745 |
Deferred tax asset | 24,208 | 21,679 |
Deferred tax liabilities: | ||
Depreciation | 4,279 | 4,718 |
Loan servicing rights | 717 | 1,162 |
State taxes | 679 | 524 |
Intangible assets | 1,270 | 1,265 |
REIT spillover dividend | 1,180 | 1,180 |
Prepaid expenses | 952 | 948 |
Lease right of use | 1,078 | 1,190 |
Other | 194 | 442 |
Deferred tax liability | 10,349 | 11,429 |
Valuation allowance | 0 | 0 |
Net deferred tax asset | $ 13,859 | $ 10,250 |
INCOME TAXES - Additional Information (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | |||
Statutory percentage rate of provision | 21.00% | ||
Deferred income tax asset (liability) allocated to unrealized net gain (loss) on securities available-for-sale | $ (4,500,000) | $ (7,800,000) | |
Deferred income tax asset allocated to pension plan and SERP | 319,000 | 476,000 | |
Unrecognized Tax Benefits | 0 | 0 | |
Interest and penalties related to unrecognized tax benefits | $ 0 | $ 0 | $ 0 |
RELATED PARTY TRANSACTIONS (Summary of Loans To Related Party) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Loans and Leases Receivable, Related Parties [Roll Forward] | ||
Beginning balance | $ 104,694 | $ 83,980 |
New loans and advances | 74,115 | 120,049 |
Effect of changes in related parties | (62) | 1,650 |
Repayments and renewals | (78,882) | (100,985) |
Ending balance | $ 99,865 | $ 104,694 |
RELATED PARTY TRANSACTIONS (Additional Information) (Details) - USD ($) $ in Millions |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Related Party Transactions [Abstract] | ||
Deposits from principal officers, directors and affiliates | $ 30.2 | $ 36.8 |
CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS - Additional Information (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Capital Requirements and Restrictions On Retained Earnings [Abstract] | |
Amount available for dividends | $ 106.9 |
Description of regulatory requirements, capital adequacy purposes | Under the Basel III rule, the Company must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer was phased in from 0.00% for 2015 to 2.50% by 2019. The capital conservation buffer for 2021 and 2020 was 2.50%. The net unrealized gain or loss on available-for-sale securities is not included in computing regulatory capital. |
PARENT COMPANY STATEMENTS - CONDENSED BALANCE SHEETS (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
ASSETS | ||
Other assets | $ 54,610 | $ 54,669 |
Total assets | 6,557,323 | 5,830,435 |
LIABILITIES | ||
STOCKHOLDERS’ EQUITY | 704,817 | 657,095 |
Total liabilities and equity | 6,557,323 | 5,830,435 |
Parent Company | Reportable Legal Entities | ||
ASSETS | ||
Deposits with Lake City Bank | 834 | 568 |
Deposits with other depository institutions | 2,459 | 2,433 |
Cash | 3,293 | 3,001 |
Investments in banking subsidiary | 686,487 | 652,407 |
Investments in other subsidiaries | 3,468 | 3,043 |
Other assets | 11,830 | 9,455 |
Total assets | 705,078 | 667,906 |
LIABILITIES | ||
Dividends payable and other liabilities | 261 | 311 |
Borrowings | 0 | 10,500 |
STOCKHOLDERS’ EQUITY | 704,817 | 657,095 |
Total liabilities and equity | $ 705,078 | $ 667,906 |
PARENT COMPANY STATEMENTS - CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Other income | $ 2,725 | $ 3,564 | $ 2,857 | ||||||||
Interest expense | $ (3,315) | $ (3,554) | $ (3,964) | $ (4,298) | $ (5,141) | $ (6,066) | $ (7,303) | $ (11,585) | (15,131) | (30,095) | (60,163) |
Income tax benefit | (5,507) | (5,469) | (5,705) | (5,030) | (6,071) | (5,377) | (4,448) | (3,643) | (21,711) | (19,539) | (20,338) |
NET INCOME | $ 24,283 | $ 24,119 | $ 24,348 | $ 22,983 | $ 24,592 | $ 22,776 | $ 19,670 | $ 17,299 | 95,733 | 84,337 | 87,047 |
COMPREHENSIVE INCOME | 84,082 | 100,022 | 105,297 | ||||||||
Reportable Legal Entities | Parent Company | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Other income | 3 | 0 | 155 | ||||||||
Interest expense | (7) | 0 | (1,720) | ||||||||
Miscellaneous expense | (8,133) | (3,935) | (5,321) | ||||||||
INCOME BEFORE INCOME TAXES AND EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES | 40,253 | 29,444 | 52,258 | ||||||||
Income tax benefit | 2,360 | 1,065 | 2,256 | ||||||||
INCOME BEFORE EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES | 42,613 | 30,509 | 54,514 | ||||||||
Equity in undistributed income of subsidiaries | 53,120 | 53,828 | 32,533 | ||||||||
NET INCOME | 95,733 | 84,337 | 87,047 | ||||||||
COMPREHENSIVE INCOME | 84,082 | 100,022 | 105,297 | ||||||||
Reportable Legal Entities | Parent Company | Lake City Bank | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Dividends from Lake City Bank, Lakeland Statutory Trust II | 47,355 | 32,079 | 57,842 | ||||||||
Reportable Legal Entities | Parent Company | Non-bank Subsidiaries | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Dividends from Lake City Bank, Lakeland Statutory Trust II | $ 1,035 | $ 1,300 | $ 1,302 |
EARNINGS PER SHARE - Earnings Per Share Computations (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 24,283 | $ 24,119 | $ 24,348 | $ 22,983 | $ 24,592 | $ 22,776 | $ 19,670 | $ 17,299 | $ 95,733 | $ 84,337 | $ 87,047 |
Weighted-average common shares outstanding (in shares) | 25,475,994 | 25,469,242 | 25,588,404 | ||||||||
Basic earnings per common share (in USD per share) | $ 0.95 | $ 0.95 | $ 0.96 | $ 0.90 | $ 0.97 | $ 0.89 | $ 0.77 | $ 0.68 | $ 3.76 | $ 3.31 | $ 3.40 |
Diluted earnings per common share: | |||||||||||
Net income | $ 24,283 | $ 24,119 | $ 24,348 | $ 22,983 | $ 24,592 | $ 22,776 | $ 19,670 | $ 17,299 | $ 95,733 | $ 84,337 | $ 87,047 |
Add: Dilutive effect of assumed exercises of stock options and awards (in shares) | 144,111 | 104,699 | 170,489 | ||||||||
Weighted Average Number of Shares Outstanding, Diluted, Total | 25,620,105 | 25,573,941 | 25,758,893 | ||||||||
Diluted earnings per common share (in USD per share) | $ 0.95 | $ 0.94 | $ 0.95 | $ 0.90 | $ 0.97 | $ 0.89 | $ 0.77 | $ 0.67 | $ 3.74 | $ 3.30 | $ 3.38 |
Number of antidilutive stock options | 0 | 0 | 0 |
SELECTED QUARTERLY DATA (UNAUDITED) (Summary Of Selected Quarterly Data) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Selected Quarterly Financial Information [Abstract] | |||||||||||
Interest income | $ 48,322 | $ 49,295 | $ 47,625 | $ 47,977 | $ 49,854 | $ 45,979 | $ 46,831 | $ 50,439 | $ 193,219 | $ 193,103 | $ 215,210 |
Interest expense | 3,315 | 3,554 | 3,964 | 4,298 | 5,141 | 6,066 | 7,303 | 11,585 | 15,131 | 30,095 | 60,163 |
NET INTEREST INCOME | 45,007 | 45,741 | 43,661 | 43,679 | 44,713 | 39,913 | 39,528 | 38,854 | 178,088 | 163,008 | 155,047 |
Provision for credit losses | 0 | 1,300 | (1,700) | 1,477 | 920 | 1,750 | 5,500 | 6,600 | 1,077 | 14,770 | 3,235 |
CREDIT LOSSES | 45,007 | 44,441 | 45,361 | 42,202 | 43,793 | 38,163 | 34,028 | 32,254 | 177,011 | 148,238 | 151,812 |
Noninterest income | 9,709 | 11,114 | 11,340 | 12,557 | 11,782 | 13,115 | 11,169 | 10,777 | |||
Noninterest expense | 24,926 | 25,967 | 26,648 | 26,746 | 24,912 | 23,125 | 21,079 | 22,089 | 104,287 | 91,205 | 89,424 |
Income tax expense | 5,507 | 5,469 | 5,705 | 5,030 | 6,071 | 5,377 | 4,448 | 3,643 | 21,711 | 19,539 | 20,338 |
NET INCOME | $ 24,283 | $ 24,119 | $ 24,348 | $ 22,983 | $ 24,592 | $ 22,776 | $ 19,670 | $ 17,299 | $ 95,733 | $ 84,337 | $ 87,047 |
Basic earnings per common share (in USD per share) | $ 0.95 | $ 0.95 | $ 0.96 | $ 0.90 | $ 0.97 | $ 0.89 | $ 0.77 | $ 0.68 | $ 3.76 | $ 3.31 | $ 3.40 |
Diluted earnings per common share (in USD per share) | $ 0.95 | $ 0.94 | $ 0.95 | $ 0.90 | $ 0.97 | $ 0.89 | $ 0.77 | $ 0.67 | $ 3.74 | $ 3.30 | $ 3.38 |
LEASES - Maturity Analysis (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2022 | $ 595 |
2023 | 606 |
2024 | 622 |
2025 | 640 |
2026 | 617 |
2027 and thereafter | 1,616 |
Total undiscounted lease payments | 4,696 |
Less imputed interest | (478) |
Lease liability | 4,218 |
Right-of-use asset | $ 4,218 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Other liabilities |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets |
LEASES - Lease Cost (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Leases [Abstract] | |||
Operating lease cost | $ 536 | $ 536 | $ 498 |
Short-term lease cost | 24 | 24 | 24 |
Total lease cost | $ 560 | $ 560 | $ 522 |
LEASES - Other Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Leases [Abstract] | |||
Operating cash outflows from operating leases | $ 536 | $ 536 | $ 498 |
Weighted-average remaining lease term - operating leases | 7 years 10 months 24 days | 8 years 9 months 18 days | 9 years 9 months 18 days |
Weighted average discount rate - operating leases | 2.80% | 2.80% | 2.80% |
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