10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to _____________

Commission file number 0-11733

CITY HOLDING COMPANY

(Exact name of registrant as specified in its charter)

West Virginia			55-0619957
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
25 Gatewater Road,	Charleston,	West Virginia	25313
(Address of Principal Executive Offices)			(Zip Code)

(304) 769-1100

Registrant's telephone number, including area code

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

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $2.50 par value	CHCO	NASDAQ Global Select Market

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

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

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

Large Accelerated Filer	x	Accelerated filer	o
Non accelerated filer	o	Smaller reporting company	☐
		Emerging growth company	☐

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

o

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

The registrant had outstanding 15,006,655 shares of common stock as of August 1, 2023.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements express only management's beliefs regarding future results or events and are subject to inherent uncertainty, risks, and changes in circumstances, many of which are outside of management's control. Uncertainty, risks, changes in circumstances and other factors could cause the Company's (as hereinafter defined) actual results to differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ from those discussed in such forward-looking statements include, but are not limited to, those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 under “ITEM 1A Risk Factors” and the following: (1) general economic conditions, especially in the communities and markets in which we conduct our business; (2) credit risk, including risk that negative credit quality trends may lead to a deterioration of asset quality, risk that our allowance for credit losses may not be sufficient to absorb actual losses in our loan portfolio, and risk from concentrations in our loan portfolio; (3) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (4) changes in the interest rate environment; (5) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (6) changes in technology and increased competition, including competition from non-bank financial institutions; (7) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers' performance and creditworthiness; (8) difficulty growing loan and deposit balances; (9) our ability to effectively execute our business plan, including with respect to future acquisitions; (10) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries, including changes in deposit insurance premium levels; (11) deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions; (12) regulatory enforcement actions and adverse legal actions; (13) difficulty attracting and retaining key employees; and (14) other economic, competitive, technological, operational, governmental, regulatory, and market factors affecting our operations.  Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made.

City Holding Company and Subsidiaries

PART I	Financial Information	Pages
Item 1.	Financial Statements (Unaudited)	1
	Consolidated Balance Sheets	2
	Consolidated Statements of Income	3
	Consolidated Statements of Comprehensive Income (Loss)	5
	Consolidated Statements of Changes in Shareholders’ Equity	7
	Consolidated Statements of Cash Flows	8
	Notes to Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	59
Item 4.	Controls and Procedures	59
PART II	Other Information
Item 1.	Legal Proceedings	59
Item 1A.	Risk Factors	59
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 3.	Defaults Upon Senior Securities	60
Item 4.	Mine Safety Disclosures	60
Item 5.	Other Information	60
Item 6.	Exhibits	61
Signatures		62

Part I - FINANCIAL INFORMATION

Item 1 - Financial Statements

1

Consolidated Balance Sheets

City Holding Company and Subsidiaries

(in thousands)

	(Unaudited)
	June 30, 2023		December 31, 2022
Assets
Cash and due from banks	$	66,350	$	68,333
Interest-bearing deposits in depository institutions	164,931		131,667
Cash and Cash Equivalents	231,281		200,000
Investment securities available for sale, at fair value (amortized cost $1,586,870 and $1,673,864, net of allowance for credit losses of $0 at June 30, 2023 and December 31, 2022, respectively)	1,419,933		1,505,520
Other securities	29,262		23,807
Total Investment Securities	1,449,195		1,529,327
Gross loans	3,922,142		3,646,258
Allowance for credit losses	(22,751)		(17,108)
Net Loans	3,899,391		3,629,150
Bank owned life insurance	117,173		120,674
Premises and equipment, net	73,118		70,786
Accrued interest receivable	17,973		18,287
Deferred tax assets, net	46,944		44,884
Goodwill and other intangible assets, net	163,426		115,735
Other assets	148,333		149,263
Total Assets	$	6,146,834	$	5,878,106
Liabilities
Deposits:
Noninterest-bearing	$	1,373,106	$	1,351,415
Interest-bearing:
Demand deposits	1,337,445		1,233,482
Savings deposits	1,343,571		1,396,869
Time deposits	960,941		888,100
Total Deposits	5,015,063		4,869,866
Customer repurchase agreements	271,714		290,964
FHLB long-term advances	100,000		—
Other liabilities	123,865		139,424
Total Liabilities	5,510,642		5,300,254
Commitments and contingencies - see Note I
Shareholders’ Equity
Preferred stock, par value $25 per share: 500,000 shares authorized; none issued	—		—
Common stock, par value $2.50 per share: 50,000,000 shares authorized; 19,047,548 shares issued at June 30, 2023 and December 31, 2022, less 4,040,493 and 4,259,399 shares in treasury, respectively	47,619		47,619
Capital surplus	176,746		170,980
Retained earnings	744,248		706,696
Cost of common stock in treasury	(201,973)		(215,955)
Accumulated other comprehensive (loss) income:
Unrealized (loss) on securities available-for-sale	(127,026)		(128,066)
Underfunded pension liability	(3,422)		(3,422)
Total Accumulated Other Comprehensive (Loss) Income	(130,448)		(131,488)
Total Shareholders’ Equity	636,192		577,852
Total Liabilities and Shareholders’ Equity	$	6,146,834	$	5,878,106

To be read with the attached notes to consolidated financial statements.

2

Consolidated Statements of Income (Unaudited)

City Holding Company and Subsidiaries

(in thousands, except earnings per share data)

Interest Income	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Interest and fees on loans	$	52,352	$	33,208	$	99,356	$	65,082
Interest and dividends on investment securities:
Taxable	11,794		7,547		23,567		13,770
Tax-exempt	950		1,205		2,112		2,421
Interest on deposits in depository institutions	2,585		782		4,176		1,020
Total Interest Income	67,681		42,742		129,211		82,293
Interest Expense
Interest on deposits	8,567		1,328		14,257		2,849
Interest on customer repurchase agreements	2,963		124		5,344		238
Interest on FHLB long-term advances	649		—		649		—
Total Interest Expense	12,179		1,452		20,250		3,087
Net Interest Income	55,502		41,290		108,961		79,206
Provision for (recovery of) credit losses	425		—		3,343		(756)
Net Interest Income After Provision for (Recovery of) Credit Losses	55,077		41,290		105,618		79,962
Non-Interest Income
Gains on sale of investment securities, net	—		—		773		—
Unrealized gains (losses) recognized on equity securities still held, net	(294)		(601)		67		(1,324)
Service charges	6,906		7,067		13,469		13,792
Bankcard revenue	7,190		7,062		13,793		13,506
Trust and investment management fee income	2,339		2,100		4,591		4,297
Bank owned  life insurance	3,208		978		4,012		2,992
Other income	952		1,243		2,278		2,034
Total Non-Interest Income	20,301		17,849		38,983		35,297
Non-Interest Expense
Salaries and employee benefits	18,429		16,413		36,102		31,990
Occupancy related expense	2,811		2,620		5,451		5,329
Equipment and software related expense	2,883		2,732		5,975		5,501
FDIC insurance expense	690		409		1,135		844
Advertising	974		951		1,734		1,749
Bankcard expenses	1,736		1,665		3,245		3,271
Postage, delivery, and statement mailings	596		551		1,243		1,187
Office supplies	591		427		1,011		837
Legal and professional fees	558		525		1,028		1,052
Telecommunications	623		754		1,229		1,338
Repossessed asset losses (gains), net of expenses	22		(32)		38		8
Merger related expenses	—		—		5,645		—
Other expenses	4,848		3,674		9,548		7,110
Total Non-Interest Expense	34,761		30,689		73,384		60,216
Income Before Income Taxes	40,617		28,450		71,217		55,043

3

Income tax expense	7,884		5,767		14,143		11,018
Net Income Available to Common Shareholders	$	32,733	$	22,683	$	57,074	$	44,025
Average shares outstanding, basic	14,994		14,888		14,897		14,930
Effect of dilutive securities	18		21		22		24
Average shares outstanding, diluted	15,012		14,909		14,919		14,954
Basic earnings per common share	$	2.16	$	1.51	$	3.80	$	2.92
Diluted earnings per common share	$	2.16	$	1.51	$	3.79	$	2.92

To be read with the attached notes to consolidated financial statements.

4

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

City Holding Company and Subsidiaries

(in thousands)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Net income available to common shareholders	$	32,733	$	22,683	$	57,074	$	44,025
Available-for-Sale Securities
Unrealized (losses) gains on available-for-sale securities arising during the period	(18,492)		(51,806)		2,140		(129,608)
Reclassification adjustment for gains	—		—		(773)		—
Other comprehensive (loss) income before income taxes	(18,492)		(51,806)		1,367		(129,608)
Tax effect	4,433		12,537		(327)		31,365
Other comprehensive (loss) income, net of tax	(14,059)		(39,269)		1,040		(98,243)
Comprehensive Income (Loss), Net of Tax	$	18,674	$	(16,586)	$	58,114	$	(54,218)

To be read with the attached notes to consolidated financial statements.

5

Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)

City Holding Company and Subsidiaries

Three Months Ended June 30, 2023 and 2022

(in thousands, except share amounts)

	Common Stock		Capital Surplus		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
Balance at March 31, 2022	$	47,619	$	170,206	$	654,138	$	(194,819)	$	(44,714)	$	632,430
Net income	—		—		22,683		—		—		22,683
Other comprehensive loss	—		—		—		—		(39,269)		(39,269)
Cash dividends declared ($0.60 per share)	—		—		(8,888)		—		—		(8,888)
Stock-based compensation expense	—		687		—		—		—		687
Restricted awards granted	—		(951)		—		951		—		—
Exercise of 13,078 stock options	—		(385)		—		1,046		—		661
Purchase of 208,243 treasury shares	—		—		—		(16,311)		—		(16,311)
Balance at June 30, 2022	$	47,619	$	169,557	$	667,933	$	(209,133)	$	(83,983)	$	591,993

	Common Stock		Capital Surplus		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
Balance at March 31, 2023	$	47,619	$	177,529	$	721,727	$	(179,436)	$	(116,389)	$	651,050
Net income	—		—		32,733		—		—		32,733
Other comprehensive loss	—		—		—		—		(14,059)		(14,059)
Cash dividends declared ($0.65 per share)	—		—		(10,212)		—		—		(10,212)
Stock-based compensation expense	—		633		—		—		—		633
Restricted awards granted	—		(1,416)		—		1,416		—		—
Purchase of 269,338 treasury shares	—		—		—		(23,953)		—		(23,953)
Balance at June 30, 2023	$	47,619	$	176,746	$	744,248	$	(201,973)	$	(130,448)	$	636,192

To be read with the attached notes to consolidated financial statements

6

Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)

City Holding Company and Subsidiaries

Six Months Ended June 30, 2023 and 2022

(in thousands, except share amounts)

	Common Stock		Capital Surplus		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
Balance at December 31, 2021	$	47,619	$	170,942	$	641,826	$	(193,542)	$	14,260	$	681,105
Net income	—		—		44,025		—		—		44,025
Other comprehensive loss	—		—		—		—		(98,243)		(98,243)
Cash dividends declared ($1.20 per share)	—		—		(17,918)		—		—		(17,918)
Stock-based compensation expense	—		1,658		—		—		—		1,658
Restricted awards granted	—		(2,658)		—		2,658		—		—
Exercise of 13,078 stock options	—		(385)		—		1,046		—		661
Purchase of 246,450 treasury shares	—		—		—		(19,295)		—		(19,295)
Balance at June 30, 2022	$	47,619	$	169,557	$	667,933	$	(209,133)	$	(83,983)	$	591,993

	Common Stock		Capital Surplus		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
Balance at December 31, 2022	$	47,619	$	170,980	$	706,696	$	(215,955)	$	(131,488)	$	577,852
Adoption of ASU No. 2022-02	—		—		175		—		—		175
Balances at January 1, 2023	47,619		170,980		706,871		(215,955)		(131,488)		578,027
Net income	—		—		57,074		—		—		57,074
Other comprehensive income	—		—		—		—		1,040		1,040
Cash dividends declared ($1.30 per share)	—		—		(19,697)		—		—		(19,697)
Stock-based compensation expense	—		1,726		—		—		—		1,726
Restricted awards granted	—		(3,534)		—		3,534		—		—
Purchase of 487,587 treasury shares	—		—		—		(44,056)		—		(44,056)
Acquisition of Citizens Commerce Bancshares, Inc.	—		7,574		—		54,504		—		62,078
Balance at June 30, 2023	$	47,619	$	176,746	$	744,248	$	(201,973)	$	(130,448)	$	636,192

To be read with the attached notes to consolidated financial statements.

7

Consolidated Statements of Cash Flows (Unaudited)

City Holding Company and Subsidiaries

(in thousands)

	Six months ended June 30,
	2023		2022
Net income	$	57,074	$	44,025
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and (accretion), net	4,711		6,213
Provision for (recovery of) credit losses	3,343		(756)
Depreciation of premises and equipment	2,349		2,716
Deferred income tax (benefit) expense	(864)		634
Net periodic employee benefit cost	26		128
Unrealized and realized investment securities (gains) losses, net	(840)		1,324
Stock-compensation expense	1,726		1,658
Excess tax expense (benefit) from stock-compensation	203		(91)
Increase in value of bank-owned life insurance	(4,012)		(2,992)
Loans held for sale
Loans originated for sale	(6,397)		(23,467)
Proceeds from the sale of loans originated for sale	6,499		23,512
Gain on sale of loans	(102)		(224)
Change in accrued interest receivable	1,181		(715)
Change in other assets	9,764		(11,350)
Change in other liabilities	(7,350)		4,781
Net Cash Provided by Operating Activities	67,311		45,396
Net decrease (increase) in loans	(23,077)		(22,554)
Securities available-for-sale
Purchases	(21,781)		(362,820)
Proceeds from sales of securities available-for-sale	85,559		—
Proceeds from maturities and calls	63,728		131,306
Other investments
Purchases	(5,950)		(258)
Proceeds from sales	66		83
Proceeds from maturities and calls	498		—
Purchases of premises and equipment	(1,727)		(1,050)
Proceeds from the disposals of premises and equipment	282		64
Proceeds from bank-owned life insurance policies	206		3,624
Payments for low income housing tax credits	(4,144)		(832)
Acquisition of Citizens Commerce Bancshares, Inc.	14,013		—
Net Cash Provided by (Used in) Investing Activities	107,673		(252,437)
Net (decrease) increase in non-interest-bearing deposits	(38,604)		158,535
Net (decrease) increase in interest-bearing deposits	(115,286)		58,098
Net (decrease) increase in short-term borrowings	(25,750)		89,910
Proceeds from long-term debt	100,000		—
Purchases of treasury stock	(44,056)		(19,295)
Proceeds from exercise of stock options	—		661
Lease payments	(405)		(382)
Dividends paid	(19,602)		(18,138)
Net Cash (Used in) Provided by Financing Activities	(143,703)		269,389
Increase in Cash and Cash Equivalents	31,281		62,348
Cash and cash equivalents at beginning of period	200,000		634,631
Cash and Cash Equivalents at End of Period	$	231,281	$	696,979

8

Supplemental Cash Flow Information:
Cash paid for interest	$	18,509	$	3,257
Cash paid for income taxes	17,309		10,828
Acquisition
Identifiable assets acquired (net of purchase consideration)	$	320,453	$	—
Liabilities assumed	(307,111)		—
Goodwill	40,458		—
Core deposit intangible	8,278		—

To be read with the attached notes to consolidated financial statements.

9

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2023

Note A -        Background and Basis of Presentation

City Holding Company ("City Holding"), a West Virginia corporation headquartered in Charleston, West Virginia, is a registered financial holding company under the Bank Holding Company Act and conducts its principal activities through its wholly-owned subsidiary, City National Bank of West Virginia ("City National"). City National is a retail and consumer-oriented community bank with 99 banking offices in West Virginia (58), Kentucky (24), Virginia (13) and southeastern Ohio (4). City National provides credit, deposit, and trust and investment management services to its customers in a broad geographical area that includes many rural and small community markets in addition to larger cities including Charleston (WV), Huntington (WV), Martinsburg (WV), Ashland (KY), Lexington (KY), Winchester (VA) and Staunton (VA). In addition to its branch network, City National's delivery channels include automated-teller-machines ("ATMs"), interactive-teller machines ("ITMs"), mobile banking, debit cards, interactive voice response systems, and Internet technology. The Company’s business activities are currently limited to one reportable business segment, which is community banking.

On March 10, 2023, the Company acquired 100% of the outstanding common shares of Citizens Commerce Bancshares, Inc. ("Citizens") and its principal banking subsidiary, Citizens Commerce Bank of Versailles, Kentucky. See Note C for additional information on the acquisition.

The accompanying consolidated financial statements, which are unaudited, include all of the accounts of City Holding and its wholly-owned subsidiaries (collectively, the "Company"). All material intercompany transactions have been eliminated. The consolidated financial statements include all adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations and financial condition for each of the periods presented. Such adjustments are of a normal recurring nature. The results of operations for the six months ended June 30, 2023 are not necessarily indicative of the results of operations that can be expected for the year ending December 31, 2023. The Company’s accounting and reporting policies conform with generally accepted accounting principles for interim financial information, with the instructions to Form 10-Q and Article 10 of Regulation S-X, and with Industry Guide 3, Statistical Disclosure by Bank Holding Companies. Such policies require management to make estimates and develop assumptions that affect the amounts reported in the consolidated financial statements and related footnotes. Actual results could differ from management’s estimates.

The consolidated balance sheet as of December 31, 2022 has been derived from audited financial statements included in the Company’s 2022 Annual Report to Shareholders.  Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted.  These financial statements should be read in conjunction with the financial statements and notes thereto included in the 2022 Annual Report of the Company.

Note B -        Recent Accounting Pronouncements    

Recently Adopted

In October 2018, the FASB issued ASU No. 2018-16, "Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes." This amendment permits the use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the UST, the LIBOR swap rate, the OIS rate based on the Federal Funds Effective Rate, and the SIFMA Municipal Swap Rate. This ASU became effective for the Company on January 1, 2019 with anticipation the LIBOR index would be phased out by the end of 2021. In March 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This amendment provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform and is effective as of March 12, 2020 through December 31, 2022. In January 2021, the FASB issued ASU No. 2021-01, "Reference Rate Reform (Topic 848): Scope," which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. In December 2022, the FASB issued ASU No. 2022-06, "Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848," which defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The adoption of ASU No. 2020-04 did not have a material impact on the Company's financial statements.

In March 2022, the FASB issued ASU No. 2022-01, "Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method." The amendments in this update allow nonprepayable financial assets to be included in a closed

10

portfolio hedged using the portfolio layer method. This expanded scope permits an entity to apply the same portfolio hedging method to both prepayable and nonprepayable financial assets, thereby allowing consistent accounting for similar hedges. This ASU became effective for the Company on January 1, 2023. The adoption of ASU No. 2022-01 did not have a material impact on the Company's financial statements.

In March 2022, the FASB issued ASU No. 2022-02, "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures." The amendments in this update eliminate the accounting guidance for TDRs by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The amendments in this update also require that an entity disclose current-period gross writeoffs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. This ASU became effective for the Company on January 1, 2023. The Company adopted ASU No. 2022-02 using the modified retrospective method, which resulted in a $0.2 million adjustment to shareholders' equity and the allowance for credit losses. See Note F for additional information.

Pending Adoption

In March 2023, the FASB issued ASU No. 2023-02, "Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures using the Proportional Amortization Method." The amendments in this update permit reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. This ASU will become effective for the Company on January 1, 2024. The adoption of ASU No. 2023-02 is not expected to have a material impact on the Company's financial statements.

Note C -        Acquisition and Preliminary Purchase Price Allocation

On March 10, 2023, the Company acquired 100% of the outstanding common shares of Citizens Commerce Bancshares, Inc. ("Citizens") and its principal banking subsidiary, Citizens Commerce Bank of Versailles, Kentucky, in order to strengthen the Company's market presence in the Lexington, Kentucky area. The acquisition of Citizens was structured as a stock transaction in which the Company issued approximately 0.7 million shares, valued at approximately $62.1 million.

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The following table summarizes the consideration paid for Citizens and the amounts of the assets acquired and liabilities assumed as of the date of acquisition (in thousands):

Consideration:
Common stock	$	61,570
Stock option buyout	495
Cash	13
	62,078
Identifiable assets:
Cash and cash equivalents	14,013
Investment securities	41,008
FHLB stock	620
Loans	251,406
Fixed assets	3,237
Bank owned life insurance	2,966
Deferred tax assets, net	1,481
Other assets	5,722
Total identifiable assets	320,453
Identifiable liabilities:
Deposits	299,250
Short-term borrowings	6,500
Other liabilities	1,361
Total identifiable liabilities	307,111
Net identifiable assets (liabilities)	13,342
Goodwill	40,458
Core deposit intangible	8,278
	$	62,078

Investment Securities

The gain on the sale of investment securities recognized in the first six months of 2023 was primarily due to the sale of Citizens investment portfolio of approximately $41 million shortly after the acquisition date.

Acquired Loans

The fair value of net assets acquired includes fair value adjustments to certain receivables that were not considered impaired as of the acquisition date. The fair value adjustments were determined using discounted contractual cash flows. However, the Company believes that there was not deterioration of credit at the date of acquisition. As such, these receivables were not considered impaired at the acquisition date and were not subject to the guidance relating to purchased credit deteriorated loans, which have shown evidence of credit deterioration since origination. Receivables acquired that were not subject to these requirements include non-impaired loans with a fair value of $246.4 million on the date of acquisition.

In connection with the completion of the acquisition of Citizens during the six months ended June 30, 2023, the Company recorded $2.0 million of credit loss expense associated with loans acquired from Citizens in its total provision for credit losses.

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The fair value of purchased financial assets with credit deterioration ("PCD") was $4.9 million on the date of acquisition. The gross contractual amounts receivable relating to the purchased financial asset with credit deterioration was $8.5 million. The Company estimates, on the date of acquisition, that $3.6 million of the contractual cash flows specific to the purchased financial assets with credit deterioration will not be collected.

Acquired Deposits

The fair values of non-time deposits approximated their carrying value at the acquisition date. For time deposits, the fair values were estimated based on discounted cash flows, using interest rates that were being offered at the time of acquisition compared to the contractual interest rates. Based on this analysis, management recorded a premium on time deposits acquired of $0.6 million which is being amortized over 5 years.

Core Deposit Intangible

The Company believes that the customer relationships with the deposits acquired have an intangible value. In connection with the acquisition, the Company recorded a core deposit intangible asset of $8.3 million. The core deposit intangible asset represents the value that the acquiree had with their deposit customers. The fair value was estimated based on a discounted cash flow methodology that considered the type of deposit, deposit retention and the cost of the deposit base. The core deposit intangible is being amortized over 10 years.

Goodwill

Under GAAP, management has up to twelve months following the date of the acquisition to finalize the fair value of acquired assets and liabilities. The measurement period ends as soon as the Company receives information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable. Any subsequent adjustments to the fair value of the acquired assets and liabilities, intangible assets or other purchase accounting adjustments will result in adjustments to the goodwill recorded. Among the items that are still preliminary at June 30, 2023 is the finalization of the final tax return, which management anticipates completing during 2023. Given the form of the transaction, the $40.5 million goodwill preliminarily recorded in conjunction with the Citizens acquisition is not expected to be deductible for tax purposes. The following table summarizes adjustments to goodwill subsequent to December 31, 2022 (in thousands):

	Goodwill
Balance at December 31, 2022	$	108,941
Adjustment to goodwill acquired in conjunction with the acquisition of Citizens	40,458
Balance at June 30, 2023	$	149,399

Merger Related Costs

During the six months ended June, 2023, the Company incurred $5.6 million of merger-related costs in connection with the acquisition of Citizens, primarily for professional fees ($1.6 million), severance ($1.4 million), and data processing costs ($1.3 million).

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Note D -     Investments

The aggregate carrying and approximate fair values of investment securities follow (in thousands).  Fair values are based on quoted market prices, where available.  If quoted market prices are not available, fair values are based on quoted market prices of comparable financial instruments.

	June 30, 2023								December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Securities available-for-sale:
Obligations of states and
political subdivisions	$	245,922	$	160	$	20,481	$	225,601	$	292,293	$	346	$	24,324	$	268,315
Mortgage-backed securities:
U.S. government agencies	1,300,980		214		142,736		1,158,458		1,342,666		299		140,686		1,202,279
Private label	7,288		—		498		6,790		7,695		—		464		7,231
Trust preferred securities	4,595		—		403		4,192		4,590		—		762		3,828
Corporate securities	28,085		—		3,193		24,892		26,620		—		2,753		23,867
Total Securities Available-for-Sale	$	1,586,870	$	374	$	167,311	$	1,419,933	$	1,673,864	$	645	$	168,989	$	1,505,520

The Company's other investment securities include marketable equity securities, non-marketable equity securities and certificates of deposits held for investment. At June 30, 2023 and December 31, 2022, the Company held $7.6 million in marketable equity securities. Changes in the fair value of the marketable equity securities are recorded in "unrealized gains (losses) recognized on equity securities still held" in the consolidated statements of income. The Company's non-marketable securities consist of securities with limited marketability, such as stock in the Federal Reserve Bank ("FRB") or the Federal Home Loan Bank ("FHLB"). At June 30, 2023 and December 31, 2022, the Company held $21.4 million and $15.5 million, respectively, in non-marketable equity securities. These securities are carried at cost due to the restrictions placed on their transferability. At June 30, 2023 and December 31, 2022, the Company held $0.2 million and $0.7 million in certificates of deposits held for investment, respectively.

The Company's mortgage-backed U.S. government agency securities consist of both residential and commercial securities, all of which are guaranteed by Fannie Mae ("FNMA"), Freddie Mac ("FHLMC"), or Ginnie Mae ("GNMA"). At June 30, 2023 and December 31, 2022 there were no securities of any non-governmental issuer whose aggregate carrying value or estimated fair value exceeded 10% of shareholders' equity.

Certain investment securities owned by the Company were in an unrealized loss position (i.e., amortized cost basis exceeded the estimated fair value of the securities) as of June 30, 2023 and December 31, 2022.  The following table shows the gross unrealized losses and fair value of the Company’s investments aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

	June 30, 2023
	Less Than Twelve Months				Twelve Months or Greater				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Securities available-for-sale:
Obligations of states and political subdivisions	$	43,264	$	1,102	$	169,087	$	19,379	$	212,351	$	20,481
Mortgage-backed securities:
U.S. Government agencies	105,588		16,261		746,989		126,475		852,577		142,736
Private label	—		—		6,690		498		6,690		498
Trust preferred securities	—		—		4,192		403		4,192		403
Corporate securities	11,204		1,359		13,688		1,834		24,892		3,193
Total available-for-sale	$	160,056	$	18,722	$	940,646	$	148,589	$	1,100,702	$	167,311

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	December 31, 2022
	Less Than Twelve Months				Twelve Months or Greater				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Securities available-for-sale:
Obligations of states and political subdivisions	$	203,173	$	21,929	$	13,359	$	2,395	$	216,532	$	24,324
Mortgage-backed securities:
U.S. Government agencies	533,611		50,268		376,778		90,418		910,389		140,686
Private label	7,126		464		—		—		7,126		464
Trust preferred securities	—		—		3,828		762		3,828		762
Corporate securities	22,972		2,648		895		105		23,867		2,753
Total available-for-sale	$	766,882	$	75,309	$	394,860	$	93,680	$	1,161,742	$	168,989

As of June 30, 2023, management does not intend to sell any impaired security and it is not more than likely that it will be required to sell any impaired security before the recovery of its amortized cost basis. The unrealized losses on debt securities are primarily the result of interest rate changes, credit spread fluctuations on agency-issued mortgage-related securities, general financial market uncertainty and market volatility. These conditions should not prohibit the Company from receiving its contractual principal and interest payments on its debt securities. The fair value is expected to recover as the securities approach their maturity date or repricing date. As of June 30, 2023, management believes the unrealized losses detailed in the table above are temporary and therefore no allowance for credit losses has been recognized on the Company’s securities. Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss will be recognized in net income in the period the other-than-temporary impairment is identified, while any noncredit loss will be recognized in other comprehensive income. During the three months ended June 30, 2023 and 2022, the Company had no credit-related net investment impairment losses.

The amortized cost and estimated fair value of debt securities at June 30, 2023, by contractual maturity, is shown in the following table (in thousands).  Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.  Mortgage-backed securities have been allocated to their respective maturity groupings based on their contractual maturity.

	Amortized Cost		Estimated Fair Value
Available-for-Sale Debt Securities
Due in one year or less	$	1,814	$	1,796
Due after one year through five years	51,378		47,776
Due after five years through ten years	511,736		472,381
Due after ten years	1,021,942		897,980
Total	$	1,586,870	$	1,419,933

Gross gains and gross losses recognized by the Company from investment security transactions are summarized in the table below (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Gross realized gains on securities sold	$	—	$	—	$	975	$	—
Gross realized losses on securities sold	—		—		(202)		—
Net investment security gains	$	—	$	—	$	773	$	—
Gross unrealized gains recognized on equity securities still held	$	8	$	2	$	368	$	42
Gross unrealized losses recognized on equity securities still held	(302)		(603)		(301)		(1,366)
Net unrealized gains recognized on equity securities still held	$	(294)	$	(601)	$	67	$	(1,324)

The carrying value of securities pledged to secure public deposits and for other purposes as required or permitted by law approximated $759 million and $886 million at June 30, 2023 and December 31, 2022, respectively.

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Note E -        Loans

The following table summarizes the Company’s major classifications for loans (in thousands):

	June 30, 2023		December 31, 2022
Commercial and industrial	$	417,847	$	373,890
1-4 Family	123,701		116,192
Hotels	324,745		340,404
Multi-family	191,483		174,786
Non Residential Non-Owner Occupied	673,921		585,964
Non Residential Owner Occupied	222,852		174,961
Commercial real estate	1,536,702		1,392,307
Residential real estate	1,746,618		1,693,523
Home equity	151,012		134,317
Consumer	65,201		48,806
Demand deposit account (DDA) overdrafts	4,762		3,415
Gross loans	3,922,142		3,646,258
Allowance for credit losses	(22,751)		(17,108)
Net loans	$	3,899,391	$	3,629,150
Construction loans included in:
Commercial real estate	$	3,361	$	4,130
Residential real estate	20,470		21,122

The Company’s commercial and residential real estate construction loans are primarily secured by real estate within the Company’s principal markets.  These loans were originated under the Company’s loan policies, which are focused on the risk characteristics of the loan portfolio, including construction loans. In the judgment of the Company's management, adequate consideration has been given to these loans in establishing the Company's allowance for credit losses.

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Note F -      Allowance For Credit Losses

The following table summarizes the activity in the allowance for credit losses, by portfolio loan classification, for the six months ended June 30, 2023 and 2022 (in thousands).  The allocation of a portion of the allowance in one portfolio segment does not preclude its availability to absorb losses in other portfolio segments.

	Beginning Balance		Impact of Adopting ASU 2022-02		PCD Loan Reserves		Charge-offs		Recoveries		Provision for (recovery of) credit losses		Ending Balance
Six months ended June 30, 2023
Commercial and industrial	$	3,568	12		—		(69)		$	169	$	650	$	4,330
1-4 Family	566		(1)		—		(80)		30		83		598
Hotels	2,332		—		—		(40)		—		(159)		2,133
Multi-family	380		—		500		—		—		129		1,009
Non Residential Non-Owner Occupied	2,019		—		1,536		—		156		1,075		4,786
Non Residential Owner Occupied	1,315		—		775		—		—		288		2,378
Commercial real estate	6,612		(1)		2,811		(120)		186		1,416		10,904
Residential real estate	5,427		(138)		—		(52)		15		321		5,573
Home equity	290		(46)		—		(267)		16		415		408
Consumer	110		(2)		—		(171)		51		346		334
DDA overdrafts	1,101		—		—		(807)		713		195		1,202
	$	17,108	$	(175)	$	2,811	$	(1,486)	$	1,150	$	3,343	$	22,751
Six months ended June 30, 2022
Commercial and industrial	$	3,480	—		—		(34)		$	91	$	(18)	$	3,519
1-4 Family	598		—		—		(24)		34		(34)		574
Hotels	2,426		—		—		—		—		82		2,508
Multi-family	483		—		—		—		—		(23)		460
Non Residential Non-Owner Occupied	2,319		—		—		—		44		(267)		2,096
Non Residential Owner Occupied	1,485		—		—		—		—		(90)		1,395
Commercial real estate	7,311		—		—		(24)		78		(332)		7,033
Residential real estate	5,716		—		—		(106)		49		(665)		4,994
Home equity	517		—		—		(19)		20		(180)		338
Consumer	106		—		—		(32)		47		(43)		78
DDA Overdrafts	1,036		—		—		(1,235)		770		482		1,053
	$	18,166	$	—	$	—	$	(1,450)	$	1,055	$	(756)	$	17,015

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	Beginning Balance		Impact of Adopting ASU 2022-02		PCD Loan Reserves		Charge-offs		Recoveries		Provision for (recovery of) credit losses		Ending Balance
Three months ended June 30, 2023
Commercial and industrial	$	4,289	—		—		(69)		$	86	$	24	$	4,330
1-4 Family	613		—		—		(77)		16		46		598
Hotels	2,184		—		—		(40)		—		(11)		2,133
Multi-family	1,027		—		—		—		—		(18)		1,009
Non Residential Non-Owner Occupied	4,924		—		—		—		12		(150)		4,786
Non Residential Owner Occupied	2,437		—		—		—		—		(59)		2,378
Commercial real estate	11,185		—		—		(117)		28		(192)		10,904
Residential real estate	5,481		—		—		(20)		5		107		5,573
Home equity	400		—		—		(200)		12		196		408
Consumer	371		—		—		(109)		28		44		334
DDA overdrafts	998		—		—		(357)		315		246		1,202
	$	22,724	$	—	$	—	$	(872)	$	474	$	425	$	22,751
Three months ended June 30, 2022
Commercial and industrial	$	3,458	—		—		—		$	32	$	29	$	3,519
1-4 Family	574		—		—		(24)		5		19		574
Hotels	2,545		—		—		—		—		(37)		2,508
Multi-family	477		—		—		—		—		(17)		460
Non Residential Non-Owner Occupied	2,281		—		—		—		20		(205)		2,096
Non Residential Owner Occupied	1,382		—		—		—		—		13		1,395
Commercial real estate	7,259		—		—		(24)		25		(227)		7,033
Residential real estate	5,039		—		—		(56)		4		7		4,994
Home equity	410		—		—		(19)		3		(56)		338
Consumer	86		—		—		(9)		19		(18)		78
DDA Overdrafts	1,028		—		—		(604)		364		265		1,053
	$	17,280	$	—	$	—	$	(712)	$	447	$	—	$	17,015

During the six months ended June 30, 2023, the Company recorded $2.8 million of allowance for credit losses due to acquired Citizens PCD loans. Further, in connection with the completion of the acquisition of Citizens during the six months ended June 30, 2023, the Company recorded $2.0 million of provision for credit losses associated with loans acquired from Citizens. In addition, the provision for credit losses for the six months ended June 30, 2023 included $0.9 million that was primarily related to the downgrade of two commercial loans.

Management systematically monitors the loan portfolio and the appropriateness of the allowance for credit losses on a quarterly basis to provide for expected losses inherent in the portfolio. Management assesses the risk in each loan type based on historical trends, the general economic environment of its local markets, individual loan performance and other relevant

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factors. The Company's estimate of future economic conditions utilized in its provision estimate is primarily dependent on expected unemployment ranges over a two-year period. Beyond two years, a straight line reversion to historical average loss rates is applied over the life of the loan pool in the migration methodology. The vintage methodology applies future average loss rates based on net losses in historical periods where the unemployment rate was within the forecasted range.

Individual credits in excess of $1 million are selected at least annually for detailed loan reviews, which are utilized by management to assess the risk in the portfolio and the appropriateness of the allowance.

Non-Performing Loans

Interest income on loans is accrued and credited to operations based upon the principal amount outstanding, using methods that generally result in level rates of return.  Loan origination fees, and certain direct costs, are deferred and amortized as an adjustment to the yield over the term of the loan.  The accrual of interest generally is discontinued when a loan becomes 90 days past due as to principal or interest for all loan types.  However, any loan may be placed on non-accrual status if the Company receives information that indicates a borrower is unable to meet the contractual terms of its respective loan agreement. Other indicators considered for placing a loan on non-accrual status include the borrower’s involvement in bankruptcies, foreclosures, repossessions, litigation and any other situation resulting in doubt as to whether full collection of contractual principal and interest is attainable.  When interest accruals are discontinued, unpaid interest recognized in income in the current year is reversed, and interest accrued in prior years is charged to the allowance for credit losses.  Management may elect to continue the accrual of interest when the net realizable value of collateral exceeds the principal balance and related accrued interest, and the loan is in the process of collection.

Generally for all loan classes, interest income during the period the loan is non-performing is recorded on a cash basis after recovery of principal is reasonably assured.  Cash payments received on nonperforming loans are typically applied directly against the outstanding principal balance until the loan is fully repaid.  Generally, loans are restored to accrual status when the obligation is brought current, the borrower has performed in accordance with the contractual terms for a reasonable period of time, and the ultimate collectability of the total contractual principal and interest is no longer in doubt.

The following table presents the amortized cost basis of loans on non-accrual status and loans past due over 90 days still accruing as of June 30, 2023 (in thousands):

	Non-accrual With No		Non-accrual With		Loans Past Due
	Allowance for		Allowance for		Over 90 Days
	Credit Losses		Credit Losses		Still Accruing
Commercial & Industrial	$	—	$	741	$	—
1-4 Family	—		742		—
Hotels	—		—		—
Multi-family	—		—		—
Non Residential Non-Owner Occupied	—		753		—
Non Residential Owner Occupied	—		326		—
Commercial Real Estate	—		1,821		—
Residential Real Estate	—		2,774		208
Home Equity	—		24		7
Consumer	—		35		—
Total	$	—	$	5,395	$	215

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The following table presents the amortized cost basis of loans on non-accrual status and loans past due over 90 days still accruing as of December 31, 2022 (in thousands):

	Non-accrual With No		Non-accrual With		Loans Past Due
	Allowance for		Allowance for		Over 90 Days
	Credit Losses		Credit Losses		Still Accruing
Commercial & Industrial	$	—	$	1,015	$	—
1-4 Family	—		937		—
Hotels	—		115		—
Multi-family	—		—		—
Non Residential Non-Owner Occupied	—		816		—
Non Residential Owner Occupied	—		298		—
Commercial Real Estate	—		2,166		—
Residential Real Estate	228		1,741		164
Home Equity	—		55		—
Consumer	—		—		23
Total	$	228	$	4,977	$	187

The Company recognized no interest income on non-accrual loans during each of the three and six months ended June 30, 2023 and 2022.

There were no individually evaluated impaired collateral-dependent loans as of June 30, 2023 or December 31, 2022. Changes in the fair value of the collateral for collateral-dependent loans are reported as a provision for credit loss or a recovery of credit loss in the period of change.

There were no significant commitments to provide additional funds on non-accrual or individually evaluated loans at June 30, 2023.

Generally, all loan types are considered past due when the contractual terms of a loan are not met and the borrower is 30 days or more past due on a payment.  Furthermore, residential and home equity loans are generally subject to charge-off when the loan becomes 120 days past due, depending on the estimated fair value of the collateral less cost to dispose, versus the outstanding loan balance.  Commercial loans are generally charged off when the loan becomes 120 days past due.  Open-end consumer loans are generally charged off when the loan becomes 180 days past due.

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The following tables present the aging of the amortized cost basis in past-due loans as of June 30, 2023 and December 31, 2022 by class of loan (in thousands):

	June 30, 2023
	30-59		60-89		90+		Total		Current		Non-		Total
	Past Due		Past Due		Past Due		Past Due		Loans		accrual		Loans
Commercial and industrial	$	117	$	25	$	—	$	142	$	416,964	$	741	$	417,847
1-4 Family	105		—		—		105		122,854		742		123,701
Hotels	—		—		—		—		324,745		—		324,745
Multi-family	—		—		—		—		191,483		—		191,483
Non Residential Non-Owner Occupied	131		1		—		132		673,036		753		673,921
Non Residential Owner Occupied	—		—		—		—		222,526		326		222,852
Commercial real estate	236		1		—		237		1,534,644		1,821		1,536,702
Residential real estate	5,330		346		208		5,884		1,737,960		2,774		1,746,618
Home Equity	688		90		7		785		150,203		24		151,012
Consumer	57		—		—		57		65,109		35		65,201
Overdrafts	332		9		—		341		4,421		—		4,762
Total	$	6,760	$	471	$	215	$	7,446	$	3,909,301	$	5,395	$	3,922,142

	December 31, 2022
	30-59		60-89		90+		Total		Current		Non-		Total
	Past Due		Past Due		Past Due		Past Due		Loans		accrual		Loans
Commercial and industrial	$	201	$	33	$	—	$	234	$	372,641	$	1,015	$	373,890
1-4 Family	17		—		—		17		115,238		937		116,192
Hotels	—		—		—		—		340,289		115		340,404
Multi-family	—		—		—		—		174,786		—		174,786
Non Residential Non-Owner Occupied	—		—		—		—		585,148		816		585,964
Non Residential Owner Occupied	505		188		—		693		173,970		298		174,961
Commercial real estate	522		188		—		710		1,389,431		2,166		1,392,307
Residential real estate	6,843		84		164		7,091		1,684,463		1,969		1,693,523
Home Equity	622		28		—		650		133,612		55		134,317
Consumer	52		25		23		100		48,706		—		48,806
Overdrafts	386		5		—		391		3,024		—		3,415
Total	$	8,626	$	363	$	187	$	9,176	$	3,631,877	$	5,205	$	3,646,258

Loan Restructurings

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

22

modifications that directly affect cash flows. During the three and six months ended June 30, 2023, the Company had no loan modifications that were considered restructured loans.

A loan that is considered a restructured loan may be subject to the individually evaluated loan analysis, otherwise, the restructured loan will remain in the appropriate segment in the Allowance for Credit Losses model and associated reserves will be adjusted based on changes in the discounted cash flows resulting from the modification of the restructured loan.

Credit Quality Indicators

All commercial loans within the portfolio are subject to internal risk rating.  All non-commercial loans are evaluated based on payment history.  The Company’s internal risk ratings for commercial loans are:  Exceptional, Good, Acceptable, Pass/Watch, Special Mention, Substandard and Doubtful.  Each internal risk rating is defined in the loan policy using the following criteria:  balance sheet yields; ratios and leverage; cash flow spread and coverage; prior history; capability of management; market position/industry; potential impact of changing economic, legal, regulatory or environmental conditions; purpose; structure; collateral support; and guarantor support.  Risk grades are generally assigned by the primary lending officer and are periodically evaluated by the Company’s internal loan review process.  Based on an individual loan’s risk grade, estimated loss percentages are applied to the outstanding balance of the loan to determine the amount of expected loss.

The Company categorizes loans into risk categories based on relevant information regarding the customer’s debt service ability, capacity and overall collateral position, along with other economic trends and historical payment performance.  The risk rating for each credit is updated when the Company receives current financial information, the loan is reviewed by the Company’s internal loan review and credit administration departments, or the loan becomes delinquent or impaired.  The risk grades are updated a minimum of annually for loans rated Exceptional, Good, Acceptable, or Pass/Watch.  Loans rated Special Mention, Substandard or Doubtful are reviewed at least quarterly.  The Company uses the following definitions for its risk ratings:

Risk Rating	Description
Pass Ratings:
(a) Exceptional	Loans classified as exceptional are secured with liquid collateral conforming to the internal loan policy.  Loans rated within this category pose minimal risk of loss to the bank.
(b) Good	Loans classified as good have similar characteristics that include a strong balance sheet, satisfactory debt service coverage ratios, strong management and/or guarantors, and little exposure to economic cycles. Loans in this category generally have a low chance of loss to the bank.
(c) Acceptable	Loans classified as acceptable have acceptable liquidity levels, adequate debt service coverage ratios, experienced management, and have average exposure to economic cycles.  Loans within this category generally have a low risk of loss to the bank.
(d) Pass/watch	Loans classified as pass/watch have erratic levels of leverage and/or liquidity, cash flow is volatile and the borrower is subject to moderate economic risk.  A borrower in this category poses a low to moderate risk of loss to the bank.
Special mention	Loans classified as special mention have a potential weakness(es) that deserves management’s close attention.  The potential weakness could result in deterioration of the loan repayment or the bank’s credit position at some future date.  A loan rated in this category poses a moderate loss risk to the bank.
Substandard	Loans classified as substandard reflect a customer with a well-defined weakness that jeopardizes the liquidation of the debt.  Loans in this category have the possibility that the bank will sustain some loss if the deficiencies are not corrected and the bank’s collateral value is weakened by the financial deterioration of the borrower.
Doubtful	Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristics that make collection of the full contract amount highly improbable.  Loans rated in this category are most likely to cause the bank to have a loss due to a collateral shortfall or a negative capital position.

23

Based on the most recent analysis performed, the risk category of loans by class of loans at June 30, 2023 and December 31, 2022 is as follows (in thousands), with the loans acquired from Citizens categorized by their origination date:

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial and industrial
Pass	$	42,882	$	51,976	$	89,094	$	57,019	$	24,315	$	20,250	$	100,274	$	385,810
Special mention	369		1,566		785		2,770		—		—		21,849		27,339
Substandard	—		946		146		849		1,078		1,636		43		4,698
Total	$	43,251	$	54,488	$	90,025	$	60,638	$	25,393	$	21,886	$	122,166	$	417,847
YTD Gross Charge-offs	$	—	$	—	$	33	$	—	$	—	$	—	$	36	$	69

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial and industrial
Pass	$	51,268	$	91,097	$	60,251	$	26,356	$	19,497	$	6,917	$	109,645	$	365,031
Special mention	—		—		392		9		—		19		3,245		3,665
Substandard	955		203		1,025		1,175		224		1,533		79		5,194
Total	$	52,223	$	91,300	$	61,668	$	27,540	$	19,721	$	8,469	$	112,969	$	373,890

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
1-4 Family
Pass	$	14,116	$	32,420	$	19,138	$	11,962	$	8,249	$	25,096	$	9,840	$	120,821
Special mention	—		223		—		111		—		777		—		1,111
Substandard	—		79		—		257		48		1,385		—		1,769
Total	$	14,116	$	32,722	$	19,138	$	12,330	$	8,297	$	27,258	$	9,840	$	123,701
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	80	$	—	$	80

24

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
1-4 Family
Pass	$	31,331	$	21,640	$	12,565	$	8,609	$	4,826	$	22,949	$	11,107	$	113,027
Special mention	228		—		115		—		—		836		—		1,179
Substandard	83		—		264		56		—		1,583		—		1,986
Total	$	31,642	$	21,640	$	12,944	$	8,665	$	4,826	$	25,368	$	11,107	$	116,192

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
Hotels
Pass	$	8,517	$	83,971	$	34,707	$	3,568	$	59,410	$	99,832	$	310	$	290,315
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		4,075		23,919		6,436		—		34,430
Total	$	8,517	$	83,971	$	34,707	$	7,643	$	83,329	$	106,268	$	310	$	324,745
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	40	$	—	$	40

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Hotels
Pass	$	85,590	$	35,849	$	12,275	$	60,429	$	14,921	$	90,686	$	323	$	300,073
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		3,593		24,229		—		12,509		—		40,331
Total	$	85,590	$	35,849	$	15,868	$	84,658	$	14,921	$	103,195	$	323	$	340,404

25

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
Multi-family
Pass	$	2,893	$	21,103	$	28,583	$	65,180	$	39,785	$	32,616	$	1,323	$	191,483
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Total	$	2,893	$	21,103	$	28,583	$	65,180	$	39,785	$	32,616	$	1,323	$	191,483
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Multi-family
Pass	$	13,761	$	21,312	$	65,542	$	37,698	$	2,189	$	33,560	$	724	$	174,786
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Total	$	13,761	$	21,312	$	65,542	$	37,698	$	2,189	$	33,560	$	724	$	174,786

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
Non Residential Non-Owner Occupied
Pass	$	30,872	$	146,949	$	123,450	$	76,398	$	72,911	$	179,771	$	8,213	$	638,564
Special mention	—		—		106		1,821		170		25,094		76		27,267
Substandard	1,254		—		579		2,451		1,404		2,402		—		8,090
Total	$	32,126	$	146,949	$	124,135	$	80,670	$	74,485	$	207,267	$	8,289	$	673,921
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

26

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Non Residential Non-Owner Occupied
Pass	$	110,501	$	108,290	$	89,943	$	68,027	$	87,413	$	113,287	$	2,781	$	580,242
Special mention	—		110		170		176		—		—		—		456
Substandard	—		601		—		1,330		2,089		1,244		2		5,266
Total	$	110,501	$	109,001	$	90,113	$	69,533	$	89,502	$	114,531	$	2,783	$	585,964

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
Non Residential Owner Occupied
Pass	$	19,237	$	31,842	$	44,475	$	17,755	$	23,595	$	60,487	$	3,722	$	201,113
Special mention	—		—		2,709		1,115		2,078		465		—		6,367
Substandard	—		929		387		108		1,795		11,039		1,114		15,372
Total	$	19,237	$	32,771	$	47,571	$	18,978	$	27,468	$	71,991	$	4,836	$	222,852
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Non Residential Owner Occupied
Pass	$	21,782	$	36,186	$	17,216	$	22,274	$	17,622	$	39,861	$	3,238	$	158,179
Special mention	—		—		—		329		—		493		113		935
Substandard	943		193		110		2,479		772		10,350		1,000		15,847
Total	$	22,725	$	36,379	$	17,326	$	25,082	$	18,394	$	50,704	$	4,351	$	174,961

27

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
Total
Pass	$	75,635	$	316,284	$	250,353	$	174,863	$	203,949	$	397,803	$	23,409	$	1,442,296
Special mention	—		223		2,815		3,047		2,248		26,336		76		34,745
Substandard	1,254		1,008		966		6,891		27,166		21,262		1,114		59,661
Total	$	76,889	$	317,515	$	254,134	$	184,801	$	233,363	$	445,401	$	24,599	$	1,536,702
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	120	$	—	$	120
													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Total
Pass	$	262,965	$	223,277	$	197,541	$	197,037	$	126,971	$	300,343	$	18,173	$	1,326,307
Special mention	228		110		285		505		—		1,329		113		2,570
Substandard	1,026		794		3,967		28,094		2,861		25,686		1,002		63,430
Total	$	264,219	$	224,181	$	201,793	$	225,636	$	129,832	$	327,358	$	19,288	$	1,392,307
													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Residential real estate
Performing	$	104,691	$	414,599	$	328,118	$	263,028	$	116,507	$	438,035	$	78,866	$	1,743,844
Non-performing	—		—		722		92		726		899		335		2,774
Total	$	104,691	$	414,599	$	328,840	$	263,120	$	117,233	$	438,934	$	79,201	$	1,746,618
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	52	$	—	$	52
													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Residential real estate
Performing	$	405,059	$	336,462	$	270,197	$	122,559	$	86,317	$	382,652	$	88,308	$	1,691,554
Non-performing	—		207		—		755		79		738		190		1,969
Total	$	405,059	$	336,669	$	270,197	$	123,314	$	86,396	$	383,390	$	88,498	$	1,693,523

28

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Home equity
Performing	$	11,868	$	15,532	$	6,744	$	4,316	$	2,700	$	4,981	$	104,847	$	150,988
Non-performing	—		—		—		—		—		—		24		24
Total	$	11,868	$	15,532	$	6,744	$	4,316	$	2,700	$	4,981	$	104,871	$	151,012
YTD Gross Charge-offs	$	—	$	32	$	—	$	—	$	—	$	35	$	200	$	267

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Home equity
Performing	$	16,670	$	7,394	$	5,000	$	3,035	$	1,823	$	5,116	$	95,224	$	134,262
Non-performing	—		—		—		—		—		—		55		55
Total	$	16,670	$	7,394	$	5,000	$	3,035	$	1,823	$	5,116	$	95,279	$	134,317

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Consumer
Performing	$	24,255	$	23,235	$	6,204	$	4,174	$	3,282	$	2,471	$	1,544	$	65,165
Non-performing	—		—		—		—		—		36		—		36
Total	$	24,255	$	23,235	$	6,204	$	4,174	$	3,282	$	2,507	$	1,544	$	65,201
YTD Gross Charge-offs	$	—	$	—	$	36	$	—	$	3	$	127	$	5	$	171

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Consumer
Performing	$	25,296	$	7,954	$	5,482	$	4,299	$	2,246	$	2,064	$	1,465	$	48,806
Non-performing	—		—		—		—		—		—		—		—
Total	$	25,296	$	7,954	$	5,482	$	4,299	$	2,246	$	2,064	$	1,465	$	48,806

29

Note G -    Derivative Instruments

As of June 30, 2023 and December 31, 2022, the Company primarily utilizes non-hedging derivative financial instruments with commercial banking customers to facilitate their interest rate management strategies. For these instruments, the Company acts as an intermediary for its customers and has offsetting contracts with financial institution counterparties. Changes in the fair value of these underlying derivative contracts generally offset each other and do not significantly impact the Company's results of operations.

The following table summarizes the notional and fair value of these derivative instruments (in thousands):

	June 30, 2023				December 31, 2022
	Notional Amount		Fair Value		Notional Amount		Fair Value
Non-hedging interest rate derivatives:
Customer counterparties:
Loan interest rate swap - assets	$	27,463	$	1,458	$	28,238	$	1,298
Loan interest rate swap - liabilities	586,928		57,812		619,150		63,758
Non-hedging interest rate derivatives:
Financial institution counterparties:
Loan interest rate swap - assets	604,928		59,204		637,150		65,217
Loan interest rate swap - liabilities	27,463		1,458		28,238		1,298

The following table summarizes the change in fair value of these derivative instruments (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Change in Fair Value Non-Hedging Interest Rate Derivatives:
Other income (expense) - derivative assets	$	10,653	$	15,448	$	(5,477)	$	18,524
Other (expense) income - derivative liabilities	(10,653)		(15,448)		5,477		(18,524)
Other income (expense) - derivative liabilities	131		311		(67)		888

Certain financial instruments, including derivatives, may be eligible for offset in the consolidated balance sheet and/or subject to master netting arrangements. The Company's derivative transactions with financial institution counterparties are generally executed under International Swaps and Derivative Association ("ISDA") master agreements which include "right of setoff" provisions. In such cases there is generally a legally enforceable right to offset recognized amounts and there may be an intention to settle such amounts on a net basis. Nonetheless, the Company does not generally offset financial instruments for financial reporting purposes.

Pursuant to the Company's agreements with certain of its derivative financial institution counterparties, the Company may receive collateral or post collateral, which may be in the form of cash or securities, based upon mark-to-mark positions. The Company has received collateral with a value of $75.7 million and $83.0 million as of June 30, 2023 and December 31, 2022, respectively.

Loans associated with a customer counterparty loan interest rate swap agreement may be subject to a make whole penalty upon termination of the agreement. The dollar amount of the make whole penalty varies based on the remaining term of the agreement and market rates at that time. The make whole penalty is secured by equity in the specific collateral securing the loan. The Company estimates the make whole penalty when determining if there is sufficient collateral to pay off both the potential make whole penalty and the outstanding loan balance at the origination of the loan. In the event of a customer default, the make whole penalty is capitalized into the existing loan balance; however, no guarantees can be made that the collateral will be sufficient to cover both the make whole provision and the outstanding loan balance at the time of foreclosure.

Fair Value Hedges

During the year ended December 31, 2020, the Company entered into a series of fair value hedge agreements to reduce the interest rate risk associated with the change in fair value of certain securities. The total notional amount of these agreements was $150 million and the amortized cost of the hedged assets was $313.7 million and $330.0 million as of June 30, 2023 and

30

December 31, 2022, respectively. During the six months ended June 30, 2023 and 2022, the fair value hedge agreements were effective. The gains or losses on these hedges are recognized in current earnings as fair value changes.

The following table summarizes the financial statement impact of these derivative instruments (in thousands):

	June 30, 2023		December 31, 2022
Investment securities available for sale, at fair value	$	(14,429)	$	(15,394)
Other assets	14,384		15,262
Cumulative adjustment to Interest and dividends on investment securities	45		132

During the six months ended June 30, 2023, the Company entered into a fair value hedge agreement to reduce the interest rate risk associated with the change in fair value of certain loans. The total notional amount of these agreements was $100 million. During the six months ended June 30, 2023, the fair value hedge agreements were effective. The gains or losses on these hedges are recognized in current earnings as fair value changes.

The following table summarizes the financial statement impact of these derivative instruments (in thousands):

	June 30, 2023
Gross loans	$	(2,066)
Other assets	2,050
Cumulative adjustment to Interest and fees on loans	16

Note H -     Employee Benefit Plans

Restricted Shares, Restricted Stock Units, Performance Share Units

The Company records compensation expense with respect to restricted shares, restricted stock units and performance share units in an amount equal to the fair value of the common stock covered by each award on the date of grant. These awards become fully vested after various periods of continued employment from the respective dates of grant. The Company is entitled to an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted shares when the restrictions are released and the shares are issued. Compensation is being charged to expense over the respective vesting periods.

Restricted shares are forfeited if the awarded officer or employee terminates his employment with the Company prior to the lapsing of restrictions. The Company records forfeitures of restricted stock as treasury share repurchases and any compensation cost previously recognized is reversed in the period of forfeiture.  Recipients of restricted shares do not pay any cash consideration to the Company for the shares, and, except for restricted stock units and performance share units, have the right to vote all shares subject to such grant and receive all dividends with respect to such shares, whether or not the shares have vested.  For restricted shares and performance share units that have performance-based criteria, management has evaluated those criteria and has determined that, as of June 30, 2023, the criteria were probable of being met.

A summary of the Company’s restricted shares activity and related information is presented below:

	Six months ended June 30,
	2023			2022
	Restricted Awards	Average Market Price at Grant		Restricted Awards	Average Market Price at Grant
Outstanding at January 1	140,606	$	73.87	146,755	$	72.16
Granted	35,663	91.90		33,159	77.54
Vested	(43,417)	73.02		(41,635)	72.54
Outstanding at June 30	132,852	$	78.06	138,279	$	73.58

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Information regarding stock-based compensation associated with restricted shares is provided in the following table (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Stock-based compensation expense associated with restricted shares	$	633	$	683	$	1,341	$	1,345
At period-end:					June 30, 2023
Unrecognized stock-based compensation expense associated with restricted shares					$	5,759
Weighted average period (in years) in which the above amount is expected to be recognized					3.15

Shares issued in conjunction with restricted stock awards are issued from available treasury shares. If no treasury shares are available, new shares would be issued from available authorized shares. During the six months ended June 30, 2023 and 2022, all shares issued in connection with restricted stock awards were issued from available treasury stock.

Benefit Plans

The Company provides retirement benefits to its employees through the City Holding Company 401(k) Plan and Trust (the “401(k) Plan”), which is intended to be compliant with Employee Retirement Income Security Act (ERISA) section 404(c). The Company also maintains a frozen defined benefit pension plan (the “Defined Benefit Plan”), which was inherited from the Company's acquisition of the plan sponsor (Horizon Bancorp, Inc.).

The following table presents the components of the Company's net periodic benefit cost, which is included in the line item "other expenses" in the consolidated statements of income (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Components of net periodic cost:
Interest cost	$	137	$	90	$	274	$	180
Expected return on plan assets	(210)		(221)		(420)		(442)
Net amortization and deferral	86		195		172		390
Net Periodic Pension Cost	$	13	$	64	$	26	$	128

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Note I -         Commitments and Contingencies

Credit-Related Financial Instruments

The Company is a party to certain financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers.  The Company has entered into agreements with certain customers to extend credit or provide a conditional commitment to provide payment on drafts presented in accordance with the terms of the underlying credit documents. The Company also provides overdraft protection to certain demand deposit customers that represent an unfunded commitment.  Overdraft protection commitments, which are included with other commitments below, are uncollateralized and are paid at the Company’s discretion.  Conditional commitments generally include standby and commercial letters of credit. Standby letters of credit represent an obligation of the Company to a designated third party contingent upon the failure of a customer of the Company to perform under the terms of the underlying contract between the customer and the third party. Commercial letters of credit are issued specifically to facilitate trade or commerce. Under the terms of a commercial letter of credit, drafts will be drawn when the underlying transaction is consummated, as intended, between the customer and a third party. The majority of the Company's commitments have variable interest rates. The funded portion of these financial instruments is reflected in the Company’s balance sheet, while the unfunded portion of these commitments is not reflected in the balance sheet.  

The table below presents a summary of the contractual obligations of the Company resulting from significant commitments (in thousands):

	June 30, 2023		December 31, 2022
Commitments to extend credit:
Home equity lines	$	249,262	$	232,295
Commercial real estate	58,494		53,226
Other commitments	304,940		257,222
Standby letters of credit	5,279		5,205
Commercial letters of credit	2,026		2,006

Loan commitments and standby and commercial letters of credit have credit risks essentially the same as those involved in extending loans to customers and are subject to the Company’s standard credit policies. Collateral is obtained based on management’s credit assessment of the customer. Management does not anticipate any material losses as a result of these commitments.

Litigation

In addition, the Company is engaged in various legal actions that it deems to be in the ordinary course of business. As these legal actions are resolved, the Company could realize positive and/or negative impact to its financial performance in the period in which these legal actions are ultimately resolved. There can be no assurance that current legal actions will have an immaterial impact on financial results, either positive or negative, or that no material legal actions may be presented in the future.

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Note J -         Accumulated Other Comprehensive (Loss) Income

The activity in accumulated other comprehensive (loss) income is presented in the tables below (in thousands). All amounts are shown net of tax, which is calculated using a combined federal and state income tax rate approximating 24%.

	Three months ended June 30,						Six months ended June 30,
	Defined						Defined
	Benefit		Securities				Benefit		Securities
	Pension		Available-				Pension		Available-
	Plan		-for-Sale		Total		Plan		-for-Sale		Total
2023
Beginning Balance	$	(3,422)	$	(112,967)	$	(116,389)	$	(3,422)	$	(128,066)	$	(131,488)
Other comprehensive (loss) income before reclassifications	—		(14,059)		(14,059)		—		1,628		1,628
Amounts reclassified from other comprehensive income	—		—		—		—		(588)		(588)
	—		(14,059)		(14,059)		—		1,040		1,040
Ending Balance	$	(3,422)	$	(127,026)	$	(130,448)	$	(3,422)	$	(127,026)	$	(130,448)
2022
Beginning Balance	$	(3,485)	$	(41,229)	$	(44,714)	$	(3,485)	$	17,745	$	14,260
Other comprehensive loss	—		(39,269)		(39,269)		—		(98,243)		(98,243)
	—		(39,269)		(39,269)		—		(98,243)		(98,243)
Ending Balance	$	(3,485)	$	(80,498)	$	(83,983)	$	(3,485)	$	(80,498)	$	(83,983)

	Amounts reclassified from Other Comprehensive (Loss) Income
	Three months ended				Six months ended				Affected line item
	June 30,				June 30,				in the Consolidated Statements
	2023		2022		2023		2022		of Income
Securities available-for-sale:
Net securities gains reclassified into earnings	$	—	$	—	$	773	$	—	Gains on sale of investment securities, net
Related income tax expense	—		—		(185)		—		Income tax expense
Net effect on accumulated other comprehensive (loss) income	$	—	$	—	$	588	$	—

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Note K - Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share using the two class method (in thousands, except per share data): 

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Net income available to common shareholders	$	32,733	$	22,683	$	57,074	$	44,025
Less: earnings allocated to participating securities	(291)		(203)		(505)		(403)
Net earnings allocated to common shareholders	$	32,442	$	22,480	$	56,569	$	43,622
Distributed earnings allocated to common stock	$	9,668	$	8,837	$	19,336	$	17,671
Undistributed earnings allocated to common stock	22,774		13,643		37,233		25,951
Net earnings allocated to common shareholders	$	32,442	$	22,480	$	56,569	$	43,622
Average shares outstanding	14,994		14,888		14,897		14,930
Effect of dilutive securities:
Employee stock awards	18		21		22		24
Shares for diluted earnings per share	15,012		14,909		14,919		14,954
Basic earnings per share	$	2.16	$	1.51	$	3.80	$	2.92
Diluted earnings per share	$	2.16	$	1.51	$	3.79	$	2.92

Anti-dilutive options are not included in the computation of diluted earnings per share because the options’ exercise price was greater than the average market price of the common shares and therefore, the effect would have been anti-dilutive. Anti-dilutive options were not significant for any of the periods shown above.

Note L -     Fair Value Measurements

Fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability (an 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.  ASC Topic 820 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company 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, and 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 bases fair value of assets and liabilities on quoted market prices, prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.  If such information is not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters.  Valuation adjustments may be made to ensure that financial instruments are recorded at fair value.  These adjustments may include amounts to reflect counterparty creditworthiness, as well as unobservable parameters.  Any such valuation adjustments are applied consistently over time.  The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.  While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.  Furthermore, the reported fair value amounts have not been comprehensively revalued since the presentation dates, and therefore, estimates of fair value after the balance sheet date may differ significantly from the amounts presented herein.  A more detailed description of the valuation methodologies used for assets and liabilities

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measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

Financial Assets and Liabilities

The Company used the following methods and significant assumptions to estimate fair value for financial assets and liabilities measured on a recurring basis.

Securities Available for Sale.  Securities available for sale are reported at fair value utilizing Level 1, Level 2, and Level 3 inputs.  The fair value of securities available for sale is determined by utilizing a market approach by obtaining quoted prices on nationally recognized securities exchanges (other than forced or distressed transactions) that occur in sufficient volume or matrix pricing, which is a mathematical technique used widely 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.  If such measurements are unavailable, the security is classified as Level 3.  Significant judgment is required to make this determination.

The Company utilizes a third party pricing service provider to value its Level 1 and Level 2 investment securities.  Annually, the Company obtains an independent auditor’s report from its third party pricing service provider regarding its controls over investment securities. On a quarterly basis, the Company reprices its debt securities with a third party that is independent of the primary pricing service provider to verify the reasonableness of the fair values.

Derivatives. Derivatives are reported at fair value utilizing Level 2 inputs.  The Company utilizes a market approach by obtaining dealer quotations to value its customer interest rate swaps.  The Company’s derivatives are included within "other assets" and "other liabilities" in the accompanying consolidated balance sheets. Derivative assets are typically secured through securities with financial counterparties or cross collateralization with a borrowing customer. Derivative liabilities are typically secured by the Company pledging securities to financial counterparties or, in the case of a borrowing customer, by the right of setoff. The Company considers factors such as the likelihood of default by itself and its counterparties, right of setoff, and remaining maturities in determining the appropriate fair value adjustments. All derivative counterparties approved by the Company's Asset and Liability Committee ("ALCO") are regularly reviewed, and appropriate business action is taken to adjust the exposure to certain counterparties, if necessary. Counterparty exposure is evaluated by netting positions that are subject to master netting agreements, as well as considering the amount of marketable collateral securing the position. This approach used to estimate impacted exposures to counterparties is also used by the Company to estimate its own credit risk in derivative liability positions. To date, no material losses have been incurred due to a counterparty's inability to pay any undercollateralized position. There was no significant change in the value of derivative assets and liabilities attributed to credit risk that would have resulted in a derivative credit risk valuation adjustment at June 30, 2023.

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The Company may be required, from time to time, to measure certain financial assets and financial liabilities at fair value on a nonrecurring basis.  Financial assets measured at fair value on a nonrecurring basis include individually evaluated loans reported at the fair value of the underlying collateral if repayment is expected solely from the collateral.  Collateral values are estimated using Level 3 inputs based on observable market data for both real estate collateral and non-real estate collateral.  The following table presents assets and liabilities measured at fair value (in thousands):

	Total		Level 1		Level 2		Level 3		Total Gains (Losses)
June 30, 2023
Recurring fair value measurements
Financial Assets
Obligations of states and political subdivisions	$	225,601	$	—	$	225,601	$	—
Mortgage-backed securities:
U.S. Government agencies	1,158,458		—		1,158,458		—
Private label	6,790		—		4,712		2,078
Trust preferred securities	4,192		—		4,192		—
Corporate securities	24,892		—		24,892		—
Marketable equity securities	7,637		3,551		4,086		—
Certificates of deposit held for investment	249		—		249		—
Derivative assets	77,148		—		77,148		—
Financial Liabilities
Derivative liabilities	59,270		—		59,270		—
Nonrecurring fair value measurements
Non-Financial Assets
Other real estate owned	874		—		—		874		29
December 31, 2022
Recurring fair value measurements
Financial Assets
Obligations of states and political subdivisions	$	268,315	$	—	$	268,315	$	—
Mortgage-backed securities:
U.S. Government agencies	1,202,279		—		1,202,279		—
Private label	7,231		—		4,772		2,459
Trust preferred securities	3,828		—		3,828		—
Corporate securities	23,867		—		23,867		—
Marketable equity securities	7,569		3,851		3,718		—
Certificates of deposit held for investment	747		—		747		—
Derivative assets	81,838		—		81,838		—
Financial Liabilities
Derivative liabilities	65,056		—		65,056		—
Nonrecurring fair value measurements
Non-Financial Assets
Other real estate owned	909		—		—		909		(90)

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The Company's financial assets and liabilities measured at fair value on a nonrecurring basis using significant unobservable inputs (Level 3) include individually evaluated loans that were remeasured and reported at fair value through a specific valuation allowance allocation of the allowance for credit losses based upon the fair value of the underlying collateral (in thousands).  The fair value of individually evaluated loans is estimated using one of several methods, including collateral value, liquidation value and discounted cash flows.  The significant unobservable inputs used in the fair value measurement of collateral for collateral-dependent individually evaluated loans primarily relate to discounts applied to the customers’ reported amount of collateral.  The amount of collateral discount depends upon the marketability of the underlying collateral.  During the six months ended June 30, 2023 and 2022, collateral discounts ranged from 10% to 30%. During the six months ended June 30, 2023 and 2022, the Company had no Level 2 financial assets and liabilities that were measured on a nonrecurring basis.

Non-Financial Assets and Liabilities

The Company has no non-financial assets or liabilities measured at fair value on a recurring basis.  Certain non-financial assets measured at fair value on a non-recurring basis include other real estate owned (“OREO”), which is measured at the lower of cost or fair value.

Fair Value of Financial Instruments

ASC Topic 825 “Financial Instruments,” as amended, requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value.  In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques.  Those techniques are significantly affected by the assumptions used, including discount rates and estimate of future cash flows.  In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. ASC Topic 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

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The following table represents the estimates of fair value of financial instruments (in thousands). For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. For financial liabilities such as noninterest-bearing demand, interest-bearing demand and savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity.

	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
June 30, 2023
Assets:
Cash and cash equivalents	$	231,281	$	231,281	$	231,281	$	—	$	—
Securities available-for-sale	1,419,933		1,419,933		—		1,417,855		2,078
Marketable equity securities	7,637		7,637		3,551		4,086		—
Net loans	3,899,391		3,754,410		—		—		3,754,410
Accrued interest receivable	17,973		17,973		17,973		—		—
Derivative assets	77,148		77,148		—		77,148		—
Liabilities:
Deposits	5,015,063		4,577,560		3,641,957		935,603		—
Customer repurchase agreements	271,714		271,714		—		271,714		—
Long-term debt	100,000		100,000		—		100,000		—
Accrued interest payable	2,781		2,781		2,781		—		—
Derivative liabilities	59,270		59,270		—		59,270		—
December 31, 2022
Assets:
Cash and cash equivalents	$	200,000	$	200,000	$	200,000	$	—	$	—
Securities available-for-sale	1,505,520		1,505,520		—		1,503,061		2,459
Marketable equity securities	7,569		7,569		3,851		3,718		—
Net loans	3,629,150		3,491,318		—		—		3,491,318
Accrued interest receivable	18,287		18,287		18,287		—		—
Derivative assets	81,838		81,838		—		81,838		—
Liabilities:
Deposits	4,869,866		4,867,883		3,981,766		886,117		—
Short-term debt	290,964		290,964		—		290,964		—
Accrued interest payable	953		953		953		—		—
Derivative liabilities	65,057		65,057		—		65,057		—

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

Critical Accounting Policies and Estimates

The accounting policies of the Company conform with U.S. generally accepted accounting principles and require management to make estimates and develop assumptions that affect the amounts reported in the financial statements and related footnotes. These estimates and assumptions are based on information available to management as of the date of the financial statements. Actual results could differ significantly from management’s estimates. As this information changes, management’s estimates and assumptions used to prepare the Company’s financial statements and related disclosures may also change. The most significant accounting policies followed by the Company are presented in Note One to the audited financial statements included in the Company’s 2022 Annual Report to Shareholders. The information included in this Quarterly Report on Form 10-Q, including the Consolidated Financial Statements, Notes to Consolidated Financial Statements, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, should be read in conjunction with the financial statements and notes thereto included in the 2022 Annual Report of the Company.  Based on the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, management has identified the determination of the allowance for credit losses and income taxes to be the accounting areas that require the most subjective or complex judgments and, as such, could be most subject to revision as new information becomes available.

Allowance for Credit Losses

The allowance for credit losses is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off in the future. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics, such as differences in underwriting standards, portfolio mix, delinquency level, or term, as well as for changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors. These evaluations are conducted at least quarterly and more frequently if deemed necessary. Additionally, all commercial loans within the portfolio are subject to internal risk grading. Risk grades are generally assigned by the primary lending officer and are periodically evaluated by the Company’s internal loan review process.

In evaluating the appropriateness of its allowance for credit losses, the Company stratifies the loan portfolio into six major groupings. The Company has identified the following portfolio segments and measures the allowance for credit losses using the following methods:

Portfolio Segment	Measurement Method
Commercial and industrial	Migration
Commercial real estate:
1-4 family	Migration
Hotels	Migration
Multi-family	Migration
Non Residential Non-Owner Occupied	Migration
Non Residential Owner Occupied	Migration
Residential real estate	Vintage
Home equity	Vintage
Consumer	Vintage

Migration is an analysis that tracks a closed pool of loans for a configurable period of time and calculates a loss ratio on only those loans in the pool at the start date based on outstanding balance. Vintage is a predictive loss model that includes a reasonable approximation of probable and estimable future losses by tracking each loan's net losses over the life of the loan as compared to its original balance. For demand deposit overdrafts, the allowance for credit losses is measured using the historical loss rate. Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation. When management determines that foreclosure is probable, the expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.

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Expected credit losses are estimated over the contractual term of the loan, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a restructured loan will be executed with an individual borrower or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Company.

The Company uses a number of economic variables in its scenarios to estimate the Allowance for credit losses (ACL), with the most significant drivers being an unemployment rate forecast and qualitative adjustments. In the June 30, 2023 estimate, the Company assumed a 2-year unemployment forecast range of 3.7% to 4.9%, changed from 3.6% to 4.9% at March 31, 2023. Historical loss rates from periods where the average unemployment rate matches the forecast range are considered when calculating the forecast period loss rate. Based on sensitivity of the portfolio, the change had no material impact on the reserve.

Based on sensitivity analysis of all portfolios, a 0.0050% change (slight improvement or decline on bank's scale) in all 11 qualitative risk factors (where assigned) would have a $2.0 million impact on the reserve allocation. Changing each factor by 0.01% (moderate improvement or decline) would have a $4.1 million, impact. Management recognizes that these are extreme scenarios and it is very unlikely that all risk factors would change by 0.005% or 0.01% simultaneously. For the June 30, 2023 estimate, management maintained all qualitative factor adjustments assigned in the previous quarter.

Income Taxes

The Company is subject to federal and state income taxes in the jurisdictions in which it conducts business.  In computing the provision for income taxes, management must make judgments regarding interpretation of laws in those jurisdictions.  Because the application of tax laws and regulations for many types of transactions is susceptible to varying interpretations, amounts reported in the financial statements could be changed at a later date upon final determinations by taxing authorities.  On a quarterly basis, the Company estimates its annual effective tax rate for the year and uses that rate to provide for income taxes on a year-to-date basis.  The amount of unrecognized tax benefits could change over the next twelve months as a result of various factors.  However, management cannot currently estimate the range of possible change.  The Company is currently open to audit under the statute of limitations by the Internal Revenue Service and various state taxing authorities for the years ended December 31, 2019 and forward.

The effective tax rate is calculated by taking the statutory rate and adjusting for permanent and discrete items. The discrete items can vary between periods but historically have remained consistent.

Acquisition and Preliminary Purchase Price Allocation

The calculation of the Company's acquisition and preliminary purchase price allocation is considered a critical accounting estimate as it involves a significant level of estimation and uncertainty, particularly in relation to the fair value and goodwill calculations. Under GAAP, management has up to twelve months following the date of the acquisition to finalize the fair value of acquired assets and liabilities. The measurement period ends as soon as the Company receives information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable. Any subsequent adjustments to the fair value of the acquired assets and liabilities, intangible assets or other purchase accounting adjustments will result in adjustments to the goodwill recorded.

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Financial Summary

Six months ended June 30, 2023 vs. 2022

The Company's financial performance is summarized in the following table:

	Six months ended June 30,
	2023			2022
Net income available to common shareholders (in thousands)	$	57,074		$	44,025
Earnings per common share, basic	$	3.80		$	2.92
Earnings per common share, diluted	$	3.79		$	2.92
Dividend payout ratio	34.3		%	41.1		%
ROA*	1.89		%	1.47		%
ROE*	18.3		%	13.6		%
ROATCE*	23.7		%	16.6		%
Average equity to average assets ratio	10.4		%	10.8		%

*ROA (Return on Average Assets) is a measure of the effectiveness of asset utilization. ROE (Return on Average Equity) is a measure of the return on shareholders' investment. ROATCE (Return on Average Tangible Common Equity) is a measure of the return on shareholders' equity, less intangible assets.

The Company's net interest income for the six months ended June 30, 2023 increased $29.8 million compared to the six months ended June 30, 2022 (see Net Interest Income). The Company recorded a provision for credit losses of $3.3 million for the six months ended June 30, 2023 compared to a recovery of credit losses of $0.8 million for the six months ended June 30, 2022 (see Allowance for Credit Losses). As further discussed under the caption Non-Interest Income and Non-Interest Expense, non-interest income increased $3.6 million and non-interest expense increased $13.2 million for the six months ended June 30, 2023 from the six months ended June 30, 2022.

Financial Summary

Three months ended June 30, 2023 vs. 2022

The Company's financial performance is summarized in the following table:

	Three months ended June 30,
	2023			2022
Net income available to common shareholders (in thousands)	$	32,733		$	22,683
Earnings per common share, basic	$	2.16		$	1.51
Earnings per common share, diluted	$	2.16		$	1.51
Dividend payout ratio	30.0		%	39.8		%
ROA*	2.12		%	1.51		%
ROE*	20.4		%	14.7		%
ROATCE*	27.4		%	18.1		%
Average equity to average assets ratio	10.4		%	10.3		%

*ROA (Return on Average Assets) is a measure of the effectiveness of asset utilization. ROE (Return on Average Equity) is a measure of the return on shareholders' investment. ROATCE (Return on Average Tangible Common Equity) is a measure of the return on shareholders' equity, less intangible assets.

The Company's net interest income for the three months ended June 30, 2023 increased $14.2 million compared to the three months ended June 30, 2022 (see Net Interest Income). The Company recorded a $0.4 provision for credit losses for the three months ended June 30, 2023 compared to no provision for credit losses for the three months ended June 30, 2022 (see Allowance for Credit Losses). As further discussed under the caption Non-Interest Income and Non-Interest Expense, non-

42

interest income increased $2.5 million and non-interest expense increased $4.1 million for the three months ended June 30, 2023 from the three months ended June 30, 2022.

Balance Sheet Analysis

Selected balance sheet fluctuations from the year ended December 31, 2022 are summarized in the following table (in millions):

	June 30,	December 31,
	2023	2022	$ Change		% Change
Cash and cash equivalents	231.3	200.0	$	31.3	15.7	%
Total investment securities	1,449.2	1,529.3	$	(80.1)	(5.2)	%
Gross loans	3,922.1	3,646.3	275.8		7.6	%
Goodwill and other intangible assets, net	163.4	115.7	47.7		41.2	%
Total deposits	5,015.1	4,869.9	145.2		3.0	%
FHLB long-term advances	100.0	—	100.0		N/A

Cash and cash equivalents increased $31.3 million (15.7%) from December 31, 2022 to $231.3 million at June 30, 2023, due to cash acquired from Citizens, decrease in investment balances, increase in deposit balances and increase in FHLB long-term advances which are partially offset by an increase in gross loans.

Total investment securities decreased $80.1 million (5.2%) from December 31, 2022 to $1.45 billion at June 30, 2023, due to maturities and calls.

Gross loans increased $275.8 million (7.6%) from December 31, 2022 to $3.92 billion at June 30, 2023 primarily due to the Company’s acquisition of Citizens ($254.7 million). Excluding the acquisition, total loans increased $21.2 million, (0.6%), from December 31, 2022 to $3.67 billion at June 30, 2023. Commercial and industrial loans increased $29.3 million (7.8%), consumer loans increased $13.3 million (27.3%), and residential real estate loans increased $9.7 million (0.6%). These increases were partially offset by a decrease in commercial real estate loans of $35.4 million.

Goodwill and other intangible assets, net, increased $47.7 million (41.2%) from December 31, 2022 to $163.4 million at June 30, 2023, due to the acquisition of Citizens.

Total deposits increased $145.2 million (3.0%) from December 31, 2022 to $5.0 billion at June 30, 2023 due to the Company's acquisition of Citizens ($298.7 million). Excluding the acquisition, depository balances declined $153.5 million, or 3.2% from the quarter ended December 31, 2022. Savings deposit balances decreased $123.9 million and noninterest-bearing demand deposit balances decreased $36.2 million. These decreases were partially offset by an increase in time deposit balances of $5.7 million and interest-bearing demand deposit balances of $0.9 million.

FHLB long-term advances increased $100.0 million from December 31, 2022 to June 30, 2023. During the second quarter of 2023, the Company borrowed $100.0 million from the Federal Home Loan Bank at a weighted average rate of 4.01%.

Net Interest Income

Six months ended June 30, 2023 vs. 2022

The Company’s net interest income increased from $79.2 million for the six months ended June 30, 2022 to $109.0 million for the six months ended June 30, 2023. The Company’s tax equivalent net interest income increased $29.7 million for the six months ended June 30, 2023. An increase in average investment securities ($38.7 million) resulted in $9.4 million in additional interest income. The acquisition of Citizens added $3.9 million of net interest income during the six months ended June 30, 2023. Due to increases in the Federal Funds rate, net interest income increased by $26.8 million due to an increase in loan yields (net of loan fees and accretion) of 150 basis points and by $9.1 million due to an increase in investment yields of 120 basis points. In addition, an increase of 396 basis points in the yield on deposits in depository institutions increased net interest income by $3.8 million and an increase in average loans ($94.7 million) added $2.0 million to interest income These increases were partially offset by an increase in the cost of interest bearing liabilities (86 basis points)

43

which decreased net interest income by $16.2 million. The Company’s reported net interest margin increased from 2.93% for the six months ended June 30, 2022 to 4.02% for the six months ended June 30, 2023.

44

Table One

Average Balance Sheets and Net Interest Income

(in thousands)

Assets	Six months ended June 30,
	2023						2022
	Average Balance		Interest		Yield/ Rate		Average Balance		Interest		Yield/ Rate
Loan portfolio(1):
Residential real estate(2)	$	1,869,375	$	41,707	4.50	%	$	1,697,727	$	31,892	3.79	%
Commercial, financial, and agriculture(2)	1,866,177		56,001		6.05		1,801,999		31,952		3.58
Installment loans to individuals(2),(3)	63,229		1,648		5.26		43,916		1,238		5.68
Total loans	3,798,781		99,356		5.27		3,543,642		65,082		3.70
Securities:
Taxable	1,312,118		23,567		3.62		1,238,361		13,770		2.24
Tax-exempt(4)	188,984		2,674		2.85		223,992		3,065		2.76
Total securities	1,501,102		26,241		3.53		1,462,353		16,835		2.32
Deposits in depository institutions	192,266		4,176		4.38		490,445		1,020		0.42
Total interest-earning assets	5,492,149		129,773		4.76		5,496,440		82,937		3.04
Cash and due from banks	69,931						102,171
Bank premises and equipment	72,441						73,354
Goodwill and intangible assets	144,305						116,818
Other assets	320,646						237,115
Less: allowance for credit losses	(20,608)						(18,103)
Total assets	$	6,078,864					$	6,007,795
Liabilities
Interest-bearing demand deposits	$	1,282,009	$	4,514	0.71	%	$	1,149,277	$	278	0.05	%
Savings deposits	1,371,077		3,290		0.48		1,407,416		357		0.05
Time deposits(2)	932,606		6,453		1.40		1,026,149		2,214		0.44
Customer repurchase agreements	288,092		5,344		3.74		282,228		238		0.17
FHLB long-term advances	33,149		649		3.95		—		—		—
Total interest-bearing liabilities	3,906,933		20,250		1.05		3,865,070		3,087		0.16
Noninterest-bearing demand deposits	1,420,221						1,417,060
Other liabilities	122,709						79,610
Stockholders’ equity	629,001						646,055
Total liabilities and stockholders’ equity	$	6,078,864					$	6,007,795
Net interest income			$	109,524					$	79,850
Net yield on earning assets					4.02	%					2.93	%

45

(1)	For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of net loan fees have been included in interest income:
	Loan fees, net	$	911	$	301
(2)	Included in the above table are the following amounts (in thousands) for the accretion of the fair value adjustments related to the Company's acquisitions:
		2023		2022
	Residential real estate	$	117	167
	Commercial, financial and agriculture	855		404
	Installment loans to individuals	11		34
	Time deposits	164		41
		$	1,147	$	646
(3)	Includes the Company’s consumer and DDA overdrafts loan categories.
(4)	Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%.

Table Two

Rate/Volume Analysis of Changes in Interest Income and Interest Expense

(in thousands)

	Six months ended June 30, 2023 vs. 2022
Interest-earning assets:	Increase (Decrease) Due to Change In:
	Volume		Rate		Net
Loan portfolio
Residential real estate	$	3,224	$	6,591	$	9,815
Commercial, financial, and agriculture	1,138		22,911		24,049
Installment loans to individuals	544		(134)		410
Total loans	4,906		29,368		34,274
Securities:
Taxable	820		8,977		9,797
Tax-exempt(1)	(479)		88		(391)
Total securities	341		9,065		9,406
Deposits in depository institutions	(620)		3,776		3,156
Total interest-earning assets	$	4,627	$	42,209	$	46,836
Interest-bearing liabilities:
Interest-bearing demand deposits	$	32	$	4,203	$	4,235
Savings deposits	(9)		2,942		2,933
Time deposits	(202)		4,441		4,239
Customer repurchase agreements	5		5,101		5,106
FHLB long-term advances	649		—		649
Total interest-bearing liabilities	475		16,687		17,162
Net Interest Income	$	4,152	$	25,522	$	29,674

(1)Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%.

Net Interest Income

46

Three months ended June 30, 2023 vs. 2022

The Company’s net interest income increased from $41.3 million for the three months ended June 30, 2022 to $55.5 million for the three months ended June 30, 2023. The Company’s tax equivalent net interest income increased $14.1 million, or 34.0%, from $41.6 million for the second quarter of 2022 to $55.8 million for the second quarter of 2023. The acquisition of Citizens added $2.9 million of net interest income during the quarter ended June 30, 2023. Due to increases in the Federal Funds rate, net interest income increased by $13.5 million due to an increase in loan yields (net of loan fees and accretion) of 149 basis points and by $4.0 million due to an increase in investment yields of 108 basis points. In addition, an increase of 392 basis points in the yield on deposits in depository institutions increased net interest income by $2.2 million and an increase in average loans ($81.9 million) added $0.8 million to interest income These increases were partially offset by an increase in the cost of interest bearing liabilities (106 basis points) which decreased net interest income by $9.9 million. The Company’s reported net interest margin increased from 3.04% for the second quarter of 2022 to 4.00% for the second quarter of 2023.

47

Table One

Average Balance Sheets and Net Interest Income

(in thousands)

Assets	Three months ended June 30,
	2023						2022
	Average Balance		Interest		Yield/ Rate		Average Balance		Interest		Yield/ Rate
Loan portfolio(1):
Residential real estate(2)	$	1,894,269	$	21,702	4.60	%	$	1,730,617	$	16,156	3.74	%
Commercial, financial, and agriculture(2)	1,933,238		29,754		6.17		1,785,511		16,421		3.69
Installment loans to individuals(2),(3)	68,777		898		5.24		43,585		631		5.81
Total loans	3,896,284		52,354		5.39		3,559,713		33,208		3.74
Securities:
Taxable	1,301,063		11,794		3.64		1,269,049		7,548		2.39
Tax-exempt(4)	174,410		1,203		2.77		215,603		1,526		2.84
Total securities	1,475,473		12,997		3.53		1,484,652		9,074		2.45
Deposits in depository institutions	224,064		2,585		4.63		441,239		781		0.71
Total interest-earning assets	5,595,821		67,936		4.87		5,485,604		43,063		3.15
Cash and due from banks	71,949						102,532
Bank premises and equipment	73,450						72,887
Goodwill and intangible assets	163,847						116,645
Other assets	313,925						256,354
Less: allowance for credit losses	(23,046)						(17,755)
Total assets	$	6,195,946					$	6,016,267
Liabilities
Interest-bearing demand deposits	$	1,328,520	$	2,773	0.84	%	$	1,156,200	$	148	0.05	%
Savings deposits	1,365,894		1,942		0.57		1,430,121		182		0.05
Time deposits(2)	962,299		3,852		1.61		1,004,356		999		0.40
Customer repurchase agreements	294,255		2,963		4.04		288,031		123		0.17
FHLB long-term advances	65,934		649		3.95		—		—		—
Total interest-bearing liabilities	4,016,902		12,179		1.22		3,878,708		1,452		0.15
Noninterest-bearing demand deposits	1,419,771						1,435,256
Other liabilities	116,083						85,075
Shareholders’ equity	643,190						617,228
Total liabilities and shareholders’ equity	$	6,195,946					$	6,016,267
Net interest income			$	55,757					$	41,611
Net yield on earning assets					4.00	%					3.04	%

48

(1)	For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of net loan fees have been included in interest income:
		2023		2022
	Loan fees, net	$	393	$	3
(2)	Included in the above table are the following amounts (in thousands) for the accretion of the fair value adjustments related to the Company's acquisitions:
		2023		2022
	Residential real estate	$	78	$	77
	Commercial, financial and agriculture	709		118
	Installment loans to individuals	8		15
	Time deposits	154		21
		$	949	$	231
(3)	Includes the Company’s consumer and DDA overdrafts loan categories.
(4)	Computed on a fully federal tax-equivalent basis assuming a tax rate of 21%.

Table Two

Rate/Volume Analysis of Changes in Interest Income and Interest Expense

(in thousands)

	Three months ended June 30, 2023 vs. 2022
Interest-earning assets:	Increase (Decrease) Due to Change In:
	Volume		Rate		Net
Loan portfolio
Residential real estate	$	1,528	$	4,018	$	5,546
Commercial, financial, and agriculture	1,359		11,974		13,333
Installment loans to individuals	365		(98)		267
Total loans	3,252		15,894		19,146
Securities:
Taxable	190		4,056		4,246
Tax-exempt(1)	(292)		(31)		(323)
Total securities	(102)		4,025		3,923
Deposits in depository institutions	(384)		2,188		1,804
Total interest-earning assets	$	2,766	$	22,107	$	24,873
Interest-bearing liabilities:
Interest-bearing demand deposits	$	22	$	2,603	$	2,625
Savings deposits	(8)		1,768		1,760
Time deposits	(42)		2,895		2,853
Customer repurchase agreements	3		2,837		2,840
Long-term debt	649		0		649
Total interest-bearing liabilities	$	624	$	10,103	$	10,727
Net Interest Income	$	2,142	$	12,004	$	14,146

(1) Computed on a fully federal taxable equivalent using a tax rate of 21%.

49

Non-GAAP Financial Measures

Management of the Company uses measures in its analysis of the Company's performance other than those in accordance with generally accepted accounting principles in the United States of America ("GAAP"). These measures are useful when evaluating the underlying performance of the Company's operations. The Company's management believes that these non-GAAP measures enhance comparability of results with prior periods and demonstrate the effects of significant gains and charges in the current period. The Company's management believes that investors may use these non-GAAP financial measures to evaluate the Company's financial performance without the impact of those items that may obscure trends in the Company's performance. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they comparable to non-GAAP financial measures that may be presented by other companies. The following table reconciles fully taxable equivalent net interest income with net interest income as derived from the Company's financial statements, as well as other non-GAAP measures (dollars in thousands):

	Three months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022
Net interest income ("GAAP")	$	55,502		$	41,290		$	108,961		$	79,206
Taxable equivalent adjustment	255			321			563			644
Net interest income, fully taxable equivalent	$	55,757		$	41,611		$	109,524		$	79,850
Equity to assets ("GAAP")	10.35		%	9.48		%
Effect of goodwill and other intangibles, net	(2.45)			(1.72)
Tangible common equity to tangible assets	7.90		%	7.76		%
Return on average tangible equity ("GAAP")	27.4		%	18.1		%	23.7		%	16.6		%
Impact of merger related expenses	—			—			1.8			—
Impact of merger related provision	—			—			0.7			—
Return on tangible equity, excluding merger related expenses and provision	27.4		%	18.1		%	26.2		%	16.6		%
Return on assets ("GAAP")	2.12		%	1.51		%	1.89		%	1.47		%
Impact of merger related expenses	—			—			0.15			—
Impact of merger related provision	—			—			0.05			—
Return on assets, excluding merger related expenses and provision	2.12		%	1.51		%	2.09		%	1.47		%
Efficiency ratio	44.6		%	50.5		%	49.0		%	51.1		%
Impact of merger expenses	—			—			3.8			—
Efficiency ratio, net of merger expenses	44.6		%	50.5		%	45.2		%	51.1		%

50

Loans

Table Three

Loan Portfolio

The composition of the Company's loan portfolio as of the dates indicated follows (in thousands):

	June 30, 2023		December 31, 2022		June 30, 2022
Commercial and industrial	$	417,847	$	373,890	$	360,481
1-4 Family	123,701		116,192		108,765
Hotels	324,745		340,404		337,910
Multi-family	191,483		174,786		203,856
Non Residential Non-Owner Occupied	673,921		585,964		551,240
Non Residential Owner Occupied	222,852		174,961		180,188
Commercial real estate	1,536,702		1,392,307		1,381,959
Residential real estate	1,746,618		1,693,523		1,651,005
Home equity	151,012		134,317		125,742
Consumer	65,201		48,806		44,580
DDA overdrafts	4,762		3,415		2,991
Total loans	$	3,922,142	$	3,646,258	$	3,566,758

Loan balances increased $21.2 million from December 31, 2022 to June 30, 2023, excluding $254.7 million of loans acquired from Citizens.

The commercial and industrial ("C&I") loan portfolio consists of loans to corporate borrowers that are primarily in small to mid-size industrial and commercial companies. Collateral securing these loans includes equipment, machinery, inventory, receivables and vehicles. C&I loans are considered to contain a higher level of risk than other loan types, although care is taken to minimize these risks. Numerous risk factors impact this portfolio, including industry specific risks such as the economy, new technology, labor rates and cyclicality, as well as customer specific factors, such as cash flow, financial structure, operating controls and asset quality. C&I loans increased $29.3 million from December 31, 2022 to June 30, 2023, excluding $14.7 million of C&I loans acquired from Citizens.

Commercial real estate loans consist of commercial mortgages, which generally are secured by nonresidential and multi-family residential properties, including hotel/motel and apartment lending. Commercial real estate loans are to many of the same customers and carry similar industry risks as C&I loans. Commercial real estate loans decreased $35.4 million from December 31, 2022 to June 30, 2023, excluding $179.8 million of commercial real estate loans acquired from Citizens. At June 30, 2023, $3.4 million of the commercial real estate loans were for commercial properties under construction.

In order to group loans with similar risk characteristics, the portfolio is further segmented by product types:

◦Commercial 1-4 Family loans increased $1.2 million from December 31, 2022 to June 30, 2023, excluding $6.3 million of commercial 1-4 family loans acquired from Citizens. Commercial 1-4 Family loans consist of residential single-family, duplex, triplex, and fourplex rental properties and totaled $123.7 million at of June 30, 2023. Risk characteristics are driven by rental housing demand as well as economic and employment conditions. These properties exhibit greater risk than multi-family properties due to fewer income sources.

◦Hotel loans decreased $15.7 million from December 31, 2022 to June 30, 2023. The Hotel portfolio is comprised of all lodging establishments and totaled $324.7 million as of June 30, 2023. Risk characteristics relate to the demand for travel.

◦Multi-family loans increased $0.4 million from December 31, 2022 to June 30, 2023, excluding $16.3 million of multi-family loans acquired from Citizens. Multi-family consists of 5 or more family residential apartment lending. The portfolio totaled $191.5 million as of June 30, 2023. Risk characteristics are driven by rental housing demand as well as economic and employment conditions.

◦Non-residential commercial real estate includes properties such as retail, office, warehouse, storage, healthcare, entertainment, religious, and other nonresidential commercial properties. The non-residential product type is further

51

segmented into owner- and non-owner occupied properties. Nonresidential non-owner occupied commercial real estate totaled $673.9 million at June 30, 2023 and decreased $22.1 million from December 31, 2022 to June 30, 2023, excluding $110.1 million nonresidential owner-occupied loans acquired from Citizens. Nonresidential owner-occupied commercial real estate totaled $222.9 million at June 30, 2023 and increased $0.7 million from December 31, 2022, excluding $47.2 million of nonresidential owner-occupied loans acquired from Citizens. Risk characteristics relate to levels of consumer spending and overall economic conditions.

Residential real estate loans increased $9.7 million from December 31, 2022 to June 30, 2023, excluding $43.4 million of residential real estate loans acquired from Citizens. Residential real estate loans represent loans to consumers that are secured by a first lien on residential property. Residential real estate loans provide for the purchase or refinance of a residence and first-lien home equity loans allow consumers to borrow against the equity in their home. These loans primarily consist of single family 3, 5 and 7 year adjustable rate mortgages with terms that amortize up to 30 years. The Company also offers fixed-rate residential real estate loans that are sold in the secondary market that are not included on the Company's balance sheet; the Company does not retain the servicing rights to these loans. Residential mortgage loans are generally underwritten to comply with Fannie Mae guidelines, while the home equity loans are underwritten with typically less documentation, but with lower loan-to-value ratios and shorter maturities.  At June 30, 2023, $20.5 million of the residential real estate loans were for properties under construction.

Home equity loans increased $3.0 million during the first six months of 2023, excluding $13.7 million of home equity loans acquired from Citizens. The Company's home equity loans represent loans to consumers that are secured by a second (or junior) lien on a residential property. Home equity loans allow consumers to borrow against the equity in their home without paying off an existing first lien. These loans consist of home equity lines of credit ("HELOC") and amortized home equity loans that require monthly installment payments. Home equity loans are underwritten with less documentation, lower loan-to-value ratios and for shorter terms than residential mortgage loans. The amount of credit extended is directly related to the value of the real estate at the time the loan is made.

Consumer loans may be secured by automobiles, boats, recreational vehicles and other personal property or they may be unsecured. The Company monitors the risk associated with these types of loans by monitoring such factors as portfolio growth, lending policies and economic conditions. Underwriting standards are continually evaluated and modified based upon these factors. Consumer loans increased $13.3 million during the first six months of 2023, excluding $3.0 million of consumer loans acquired from Citizens.

Allowance for Credit Losses

Management systematically monitors the loan portfolio and the appropriateness of the allowance for credit losses on a quarterly basis to provide for expected losses inherent in the portfolio. Management assesses the risk in each loan type based on historical trends, the general economic environment of its local markets, individual loan performance and other relevant factors. The Company's estimate of future economic conditions utilized in its provision estimate is primarily dependent on expected unemployment ranges over a two-year period. Beyond two years, a straight line reversion to historical average loss rates is applied over the life of the loan pool in the migration methodology. The vintage methodology applies future average loss rates based on net losses in historical periods where the unemployment rate was within the forecasted range. As a result of the Company’s quarterly analysis of the adequacy of the Allowance for Credit Losses, the Company recorded a $0.4 million provision for credit losses in the second quarter of 2023. The company did not record a provision for credit losses in the second quarter of 2022.

Individual credits in excess of $1 million are selected at least annually for detailed loan reviews, which are utilized by management to assess the risk in the portfolio and the appropriateness of the allowance.

Determination of the Allowance for Credit Losses is subjective in nature and requires management to periodically reassess the validity of its assumptions. Differences between actual losses and estimated losses are assessed such that management can timely modify its evaluation model to ensure that adequate provision has been made for risk in the total loan portfolio.

Based on the Company’s analysis of the adequacy of the allowance for credit losses and in consideration of the known factors utilized in computing the allowance, management believes that the allowance for credit losses as of June 30, 2023 is adequate to provide for expected losses inherent in the Company’s loan portfolio. Future provisions for credit losses will be dependent upon trends in loan balances including the composition of the loan portfolio, changes in loan quality and loss experience trends, and recoveries of previously charged-off loans, among other factors.

52

Table Four

Allocation of the Allowance for Credit Losses

The allocation of the allowance for credit losses is shown in the table below (in thousands). The allocation of a portion of the allowance in one portfolio loan classification does not preclude its availability to absorb losses in other portfolio segments.

	As of June 30,				As of December 31,
	2023		2022		2022
Commercial and industrial	$	4,330	$	3,519	$	3,568
1-4 Family	598		574		566
Hotels	2,133		2,508		2,332
Multi-family	1,009		460		380
Non Residential Non-Owner Occupied	4,786		2,096		2,019
Non Residential Owner Occupied	2,378		1,395		1,315
Commercial real estate	10,904		7,033		6,612
Residential real estate	5,573		4,994		5,427
Home equity	408		338		290
Consumer	334		78		110
DDA overdrafts	1,202		1,053		1,101
Allowance for Credit Losses	$	22,751	$	17,015	$	17,108

The Allowance for Credit Losses increased from $17.1 million at December 31, 2022 to $22.8 million at June 30, 2023, due to the following factors. The Company recorded $2.8 million associated with acquired Citizens PCD loans. Further, in connection with the completion of the acquisition of Citizens during the six month ended J, 2023, the Company recorded $2.0 million of provision for credit losses associated with loans acquired from Citizens. In addition, the provision for credit losses for the six months ended June 30, 2023, included $0.9 million that was primarily related to the downgrade of two commercial loans.

Non-Interest Income and Non-Interest Expense

Six months ended June 30, 2023 vs. 2022

(in millions)

	Six months ended June 30,
	2023		2022		$ Change		% Change
Net investment securities gains (losses)	$	0.8	$	(1.3)	$	2.1	161.5	%
Non-interest income, excluding net investment securities (losses) gains	38.1		36.6		1.5		4.1
Non-interest expense, less merger-related expenses	67.7		60.2		7.5		12.5

Non-Interest Income: Non-interest income was $38.9 million for the six months ended June 30, 2023, as compared to $35.3 million for the six months ended June 30, 2022. During the six months ended June 30, 2023, the Company reported $0.8 million of unrealized fair value gains compared to $1.3 million unrealized fair value losses on the Company's equity securities and gains on sale of the Company's equity securities during the six months ended June 30, 2022. Excluding these items, non-interest income increased from $36.6 million for the six months ended June 30, 2022 to $38.1 million for the six months ended June 30, 2023. This increase was largely attributable to an increase in bank owned life insurance ($1.0 million, or 34.1%), trust and investment management fee income ($0.3 million, or 6.8%), and bankcard revenue ($0.3 million, or 2.1%), partially offset by a decrease in service charges ($0.3 million, or 2.3%).

Non-Interest Expense: Non-interest expenses, less merger related expenses increased $7.5 million (12.5%), from $60.2 million in the first six months of 2022 to $67.7 million in the first six months of 2023 mainly due to an increase in salaries and employee benefits ($4.1 million) as a result of increased health insurance, increased incentive compensation and

53

higher salary adjustments during 2023 and other expenses ($2.4 million) as a result of increased amortization of core deposit intangibles ($1.0 million) due to to acquisition of Citizens in March 2023

Income Tax Expense: The Company’s effective income tax rate for the six months ended June 30, 2023 was 19.9% compared to 20.0% for the six months ended June 30, 2022.

Non-Interest Income and Non-Interest Expense

Three months ended June 30, 2023 vs. 2022

(in millions)

	Three months ended June 30,
	2023		2022		$ Change		% Change
Net investment securities gains (losses)	$	(0.3)	$	(0.6)	0.3		50.0	%
Non-interest income, excluding net investment securities gains (losses)	20.6		18.5		$	2.1	11.4	%
Non-interest expense, less merger-related expenses	34.8		30.7		4.1		13.4	%

Non-Interest Income: Non-interest income was $20.3 million during the quarter ended June 30, 2023, as compared to $17.9 million during the quarter ended June 30, 2022. During the second quarter of 2023, the Company reported $0.3 million of unrealized fair value losses on the Company’s equity securities as compared to $0.6 million of unrealized fair value losses on the Company’s equity securities during the second quarter of 2022.

Exclusive of these items, non-interest income increased $2.1 million, or 11.4%, from $18.5 million for the second quarter of 2022 to $20.6 million for the second quarter of 2023. This increase was largely attributable to an increase of $2.2 million in bank owned life insurance due to higher death benefit proceeds and an increase of $0.2 million, or 11.4%, in trust and investment management fee income. These increases were partially offset by a decrease in other income of $0.3 million and a decrease in service fees of $0.2 million, or 2.3%. Citizens’ contribution to non-interest income for the quarter ended June 30, 2023 was less than $0.1 million.

Non-Interest Expense: Non-interest expenses increased $4.1 million, or 13.3%, from $30.7 million in the second quarter of 2022 to $34.8 million in the second quarter of 2023. This increase was largely due to an increase in salaries and employee benefits of $2.0 million due to the acquisition of Citizens ($0.6 million), salary adjustments, and increased health insurance cost. In addition, other expenses increased $1.2 million, and FDIC insurance expenses increased $0.3 million.

Income Tax Expense: The Company's effective income tax rate for the three months ended June 30, 2023 and June 30, 2022 was 19.4%, and 20.3%, respectively.

Risk Management

Market risk is the risk of loss due to adverse changes in current and future cash flows, fair values, earnings or capital due to adverse movements in interest rates and other factors, including foreign exchange rates, underlying credit risk and commodity prices. Because the Company has no significant foreign exchange activities and holds no commodities, interest rate risk represents the primary market risk factor affecting the Company’s balance sheet and net interest margin. Significant changes in interest rates by the Federal Reserve could result in similar changes in SOFR interest rates, prime rates, and other benchmark interest rates that could affect the estimated fair value of the Company’s investment securities portfolio, interest paid on the Company’s short-term and long-term borrowings, interest earned on the Company’s loan portfolio and interest paid on its deposit accounts. The Company utilizes derivative instruments, primarily in the form of interest rate swaps, to help manage its interest rate risk on commercial loans.

The Company’s ALCO has been delegated the responsibility of managing the Company’s interest-sensitive balance sheet accounts to maximize earnings while managing interest rate risk. ALCO, comprised of various members of executive and senior management, is also responsible for establishing policies to monitor and limit the Company’s exposure to interest rate risk and to manage the Company’s liquidity position. ALCO satisfies its responsibilities through at least quarterly meetings during which product pricing issues, liquidity measures, and interest sensitivity positions are monitored.

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In order to measure and manage its interest rate risk, the Company uses an asset/liability management and simulation software model to periodically update the interest sensitivity position of the Company’s balance sheet. The model is also used to perform analyses that measure the impact on net interest income and capital as a result of various changes in the interest rate environment. Such analyses quantify the effects of various interest rate scenarios on projected net interest income.

The Company’s policy objective is to avoid negative fluctuations in net income or the economic value of equity of more than 15% within a 12-month period, assuming an immediate parallel increase or decrease of 100 to 300 basis points. The Company measures the long-term risk associated with sustained increases and decreases in rates through analysis of the impact to changes in rates on the economic value of equity.

The following table summarizes the sensitivity of the Company’s net income to various interest rate scenarios. The results of the sensitivity analyses presented below differ from the results used internally by ALCO in that, in the analyses below, interest rates are assumed to have an immediate and sustained parallel shock. The Company recognizes that rates are volatile, but rarely move with immediate and parallel effects. Internally, the Company considers a variety of interest rate scenarios that are deemed possible while considering the level of risk it is willing to assume in “worst-case” scenarios such as shown by the following:

Immediate Basis Point Change in Interest Rates	Implied Federal Funds Rate Associated with Change in Interest Rates		Estimated Increase or Decrease in Net Income Over 12 Months
June 30, 2023
+300	8.25	%	-2.5	%
+200	7.25		-1.1
+100	6.25		—
-100	4.25		-4.4
-200	3.25		-11.2
-300	2.25		-18.2
December 31, 2022
+300	7.50	%	-4.5	%
+200	6.50		-2.6
+100	5.50		-1.2
-100	3.50		-5.5
-200	2.50		-14.4
-300	1.50		-19.3

These estimates are highly dependent upon assumptions made by management, including, but not limited to, assumptions regarding the manner in which interest-bearing demand deposit and savings deposit accounts reprice in different interest rate scenarios, changes in the composition of deposit balances, pricing behavior of competitors, prepayments of loans and deposits under alternative rate environments, and new business volumes and pricing. As a result, there can be no assurance that the estimates above will be achieved in the event that interest rates increase or decrease during the remainder of 2023 and beyond.  The estimates above do not necessarily imply that the Company will experience increases in net income if market interest rates rise.  The table above indicates how the Company’s net income behaves relative to an increase in rates compared to what would otherwise occur if rates remain stable.

Liquidity and Capital Resources

Liquidity

The Company evaluates the adequacy of liquidity at both the City Holding level and at the City National level. At the City Holding level, the principal source of cash is dividends from City National. Dividends paid by City National to City Holding are subject to certain legal and regulatory limitations. Generally, any dividends in amounts that exceed the earnings retained by City National in the current year plus retained net profits for the preceding two years must be approved by regulatory authorities. At June 30, 2023, City National could pay dividends up to $83.8 million plus net profits for the remainder of 2023, as defined by statute, up to the dividend declaration date without prior regulatory permission.

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Additionally, City Holding anticipates continuing the payment of dividends on its common stock, which are expected to approximate $39.0 million on an annualized basis over the next 12 months based on common shares outstanding at June 30, 2023.  However, dividends to shareholders can, if necessary, be suspended. In addition to these anticipated cash needs, City Holding has operating expenses and other contractual obligations, which are estimated to require $1.5 million of additional cash over the next 12 months. As of June 30, 2023, City Holding reported a cash balance of $13.2 million and management believes that City Holding’s available cash balance, together with cash dividends from City National, will be adequate to satisfy its funding and cash needs over the next 12 months.

As illustrated in the consolidated statements of cash flows, the Company generated $67.3 million of cash from operating activities during the first six months of 2023, primarily from interest income received on loans and investments, net of interest expense paid on deposits and borrowings.  The Company generated $107.7 million of cash in investing activities during the first six months of 2023, primarily due to proceeds from sales of securities available-for-sale of $85.6 million, proceeds from maturities and calls of $63.7 million and the acquisition of Citizens of $14.0 million. These increases were partially offset by a increase in loans of $23.1 million and purchases of available-for-sale securities of $21.8 million. The Company used $143.7 million of cash in financing activities during the first six months of 2023, principally as a result of a decrease in interest-bearing deposits of $115.3 million, purchases of treasury stock of $44.1 million, and a decrease in non-interest-bearing deposits of $38.6 million. These decreases were partially offset by an increase in proceeds from FHLB long-term advances of $100.0 million.

City National manages its liquidity position in an effort to effectively and economically satisfy the funding needs of its customers and to accommodate the scheduled repayment of borrowings. Funds are available to City National from a number of sources, including depository relationships, sales and maturities within the investment securities portfolio, and borrowings from the Federal Reserve Bank and the FHLB. As of June 30, 2023, City National’s assets are significantly funded by deposits and capital. Additionally, City National maintains borrowing facilities with the Federal Reserve Bank and the FHLB that are accessed as necessary to fund operations and to provide contingency funding mechanisms. As of June 30, 2023, City National had outstanding borrowings totaling $100 million from these facilities and had the capacity to borrow an additional $2.4 billion from these existing borrowing facilities. Also, although it has no current intention to do so, City National could liquidate its unpledged securities, if necessary, to provide an additional funding source. Approximately $0.8 billion of City National’s investment securities were unpledged at June 30, 2023. City National also segregates certain mortgage loans, mortgage-backed securities, and other investment securities in a separate subsidiary so that it can separately monitor the asset quality of these primarily mortgage-related assets, which could be used to raise cash through securitization transactions or obtain additional equity or debt financing if necessary.

The Company manages its asset and liability mix to balance its desire to maximize net interest income against its desire to minimize risks associated with capitalization, interest rate volatility, and liquidity. With respect to liquidity, the Company has chosen a conservative posture and believes that its liquidity position is strong. The Company’s net loan to asset ratio is 63.4% as of June 30, 2023 and deposit balances fund 81.6% of total assets. The Company has obligations to extend credit, but these obligations are primarily associated with existing home equity loans that have predictable borrowing patterns across the portfolio. The Company has investment security balances with carrying values that totaled $1.4 billion at June 30, 2023, and that exceeded the Company’s non-deposit sources of borrowing, which totaled $371.7 million.  Further, the Company’s deposit mix has a high proportion of transaction and savings accounts that fund 66.0% of the Company’s total assets. As interest rates increase, deposit balances may decline or the composition of the deposit portfolio may shift to higher yielding deposit products, such as money market accounts or time deposits.

As the following table reflects, less than 15% (estimated) of the Company's deposits were uninsured (either with balances above $250,000 or not collateralized by investment securities) as of June 30, 2023.

Estimated Uninsured Deposits by Deposit Type

	June 30, 2023		December 31, 2022
Noninterest-Bearing Demand Deposits	17	%	20	%
Interest-Bearing Deposits
Demand Deposits	7	%	10	%
Savings Deposits	11	%	14	%
Time Deposits	14	%	13	%
Total Deposits	12	%	14	%

The amounts listed above represent management's best estimate as of the respective period shown.

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Capital Resources

Shareholders' equity increased $58.3 million for the six months ended June 30, 2023, primarily due to the common stock issued in connection with acquisition of Citizens of $62.1 million, net income of $57.1 million, and stock based compensation expense of $1.7 million. These increases were partially offset by the repurchase of 487,587 common shares at a weighted average price of $90.35 per share ($44.1 million) as part of a one million share repurchase plan authorized by the Board of Directors in May 2022, and cash dividends declared of $19.6 million.

The Basel III Capital Rules require City Holding and City National to maintain minimum CET 1, Tier 1 and Total Capital ratios, along with a capital conservation buffer, effectively resulting in new minimum capital ratios (which are shown in the table below). The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of CET 1 capital to risk-weighted assets above the minimum but below the conservation buffer (or below the combined capital conservation buffer and countercyclical capital buffer, when the latter is applied) will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall. The Basel III Capital Rules also provide for a “countercyclical capital buffer” that is applicable to only certain covered institutions and does not have any current applicability to City Holding Company or City National Bank.

57

The Company’s regulatory capital ratios for both City Holding and City National are illustrated in the following tables

(in thousands):

June 30, 2023	Actual				Minimum Required - Basel III				Required to be Considered Well Capitalized
	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
CET I Capital
City Holding Company	$	605,661	15.5	%	$	273,971	7.0	%	$	254,402	6.5	%
City National Bank	577,578		14.8	%	272,878		7.0	%	253,387		6.5	%
Tier I Capital
City Holding Company	605,661		15.5	%	332,679		8.5	%	313,110		8.0	%
City National Bank	577,578		14.8	%	331,352		8.5	%	311,861		8.0	%
Total Capital
City Holding Company	626,730		16.0	%	410,956		10.5	%	391,387		10.0	%
City National Bank	598,648		15.4	%	409,317		10.5	%	389,826		10.0	%
Tier I Leverage Ratio
City Holding Company	605,661		9.8	%	247,250		4.0	%	309,062		5.0	%
City National Bank	577,578		9.4	%	246,929		4.0	%	308,661		5.0	%

December 31, 2022	Actual				Minimum Required - Basel III				Required to be Considered Well Capitalized
	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
CET I Capital
City Holding Company	$	598,068	16.2	%	$	257,965	7.0	%	$	239,538	6.5	%
City National Bank	508,586		13.9	%	256,520		7.0	%	238,197		6.5	%
Tier I Capital
City Holding Company	598,068		16.2	%	313,243		8.5	%	294,817		8.0	%
City National Bank	508,586		13.9	%	311,488		8.5	%	293,166		8.0	%
Total Capital
City Holding Company	612,654		16.6	%	386,947		10.5	%	368,521		10.0	%
City National Bank	523,172		14.3	%	384,780		10.5	%	366,457		10.0	%
Tier I Leverage Ratio
City Holding Company	598,068		10.0	%	238,954		4.0	%	298,692		5.0	%
City National Bank	508,586		8.6	%	237,973		4.0	%	297,466		5.0	%

As of June 30, 2023, management believes that City Holding Company and its banking subsidiary, City National, were “well capitalized.”  City Holding is subject to regulatory capital requirements administered by the Federal Reserve, while City National is subject to regulatory capital requirements administered by the Office of the Comptroller of the Currency (“OCC”) and the Federal Deposit Insurance Corporation (“FDIC”).  Regulatory agencies can initiate certain mandatory actions if either City Holding or City National fails to meet the minimum capital requirements, as shown above.  As of June 30, 2023, management believes that City Holding and City National have met all capital adequacy requirements.

Depository institutions and depository institution holding companies that have less than $10 billion in total consolidated assets and meet other qualifying criteria, including a leverage ratio of greater than 9%, off–balance–sheet exposures of 25% or less of total consolidated assets and trading assets plus trading liabilities of 5% or less of total consolidated

58

assets, are deemed “qualifying community banking organizations” and are eligible to opt into the “community bank leverage ratio framework.” A qualifying community banking organization that elects to use the community bank leverage ratio framework and that maintains a leverage ratio of greater than 9% is considered to have satisfied the generally applicable risk–based and leverage capital requirements under the Basel III Rules and, if applicable, is considered to have met the “well capitalized” ratio requirements for purposes of its primary federal regulator’s prompt corrective action rules. The Company and its subsidiary bank do not have any immediate plans to elect to use the community bank leverage ratio framework but may make such an election in the future.

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

The information called for by this item is provided under the caption “Risk Management” under Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 4 - Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Company’s periodic SEC filings.  There has been no change in the Company’s internal control over financial reporting during the quarter ended June 30, 2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II - OTHER INFORMATION

Item 1.Legal Proceedings

The Company is engaged in various legal actions that it deems to be in the ordinary course of business. As these legal actions are resolved, the Company could realize positive and/or negative impact to its financial performance in the period in which these legal actions are ultimately resolved. There can be no assurance that current actions will have immaterial results, either positive or negative, or that no material actions may be presented in the future.

Item 1A. Risk Factors

Readers should carefully consider the risk factors previously disclosed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2022 as well as the following additional risk factor.

Risks Related to Recent Events Impacting the Financial Services Industry

Recent events impacting the financial services industry, including the failures of Silicon Valley Bank, Signature Bank and First Republic Bank, have decreased confidence in banks among consumer and commercial depositors, other counterparties and investors, as well as caused significant disruption, volatility and reduced valuations of equity and other securities of banks and bank holding companies in the capital markets. These events are occurring during a period of continued interest rate increases by the Federal Reserve which, among other things, have resulted in unrealized losses in longer-duration securities held by banks, increased competition for bank deposits and the possibility of an increase in the risk of a potential recession. These recent events have, and could continue to, adversely impact the market price and volatility of the Company's common stock.

These recent events may also result in potentially adverse changes to laws and/or regulations governing banks and bank holding companies or result in the imposition of restrictions through supervisory or enforcement activities, including higher capital requirements, which could have a material impact on the Company's business. Inability to access short-term funding or loss of client deposits could increase the cost of funding, limit access to capital markets or negatively impact the Company's overall liquidity, capitalization, and overall economic outcomes. The Company may be impacted by concerns by depositors, investors and other counterparties regarding the soundness or creditworthiness of other financial institutions, which could cause substantial and cascading disruption within the financial markets and increase Company expenses. The cost of resolving the recent bank failures may prompt the FDIC to increase its premiums above the recently increased levels or to issue additional special assessments.

59

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

On May 25, 2022, the Board of Directors of the Company authorized the Company to buy back up to 1,000,000 shares of its common stock (approximately 7% of outstanding shares) in open market transactions at prices that are accretive to the earnings per share of continuing shareholders. No time limit was placed on the duration of the share repurchase program. As part of this authorization, the Company terminated its previous repurchase program that was approved in March 2021. The following table sets forth information regarding the Company's common stock repurchases transacted during the quarter ended June 30, 2023:

			Total Number	Maximum Number
			of Shares Purchased	of Shares that May
			as Part of Publicly	Yet Be Purchased
	Total Number of	Average Price	Announced Plans	Under the Plans
Period	Shares Purchased	Paid per Share	or Programs	or Programs
April 1 - April 30, 2023	190,039	89.74	1,417,724	408,606
May 1 - May 31, 2023*	79,299	87.00	1,497,023	329,307

*There were no common stock repurchases in June 2023.

Item 3.Defaults Upon Senior Securities

None.

Item 4.Mine Safety Disclosures

None.

Item 5.Other Information

During the three months ended June 30, 2023, none of our directors or officers informed us of the adoption, modification or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as those terms are defined in Regulation S-K, Item 408.

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Item 6.Exhibits

The exhibits required to be filed or furnished with this Form 10-Q are attached hereto or incorporated herein by reference as shown in the following "Exhibit Index."

Exhibit Index

The following exhibits are filed herewith or are incorporated herein by reference.

2(a)	Agreement and Plan of Merger, dated October 18, 2022, by and among City Holding Company and Citizens Commerce Bancshares, Inc. (attached to, and incorporated by reference from, City Holding Company’s Form 8-K dated October 18, 2022, and filed with the Securities and Exchange Commission on October 18, 2022).
2(b)	Agreement and Plan of Merger, dated July 11, 2018, by and among Poage Bankshares, Inc., Town Square Bank, City Holding Company and City National Bank of West Virginia (attached to, and incorporated by reference from, City Holding Company’s Form 8-K dated July 11, 2018, and filed with the Securities and Exchange Commission on July 12, 2018).
2(c)	Agreement and Plan of Merger, dated July 11, 2018, by and among Farmers Deposit Bancorp, Inc., Farmers Deposit Bank, City Holding Company and City National Bank of West Virginia (attached to, and incorporated by reference from, City Holding Company’s Form 8-K dated July 11, 2018, and filed with the Securities and Exchange Commission on July 12, 2018).
3(a)	Amended and Restated Articles of Incorporation of City Holding Company (attached to, and incorporated by reference from City Holding Company's Form 10-Q Quarterly Report for the quarter ending September 30, 2021, filed November 4, 2021 with the Securities Exchange Commission).
3(b)	Amended and Restated Bylaws of City Holding Company, revised December 18, 2019 (attached to, and incorporated by reference from, City Holding Company’s Current Report on Form 8-K filed December 20, 2019 with the Securities and Exchange Commission).
4(a)	Rights Agreement dated as of June 13, 2001 (attached to, and incorporated by reference from, City Holding Company's Form 8–A, filed June 22, 2001, with the Securities and Exchange Commission).
4(b)	Amendment No. 1 to the Rights Agreement dated as of November 30, 2005 (attached to, and incorporated by reference from, City Holding Company’s Amendment No. 1 on Form 8-A, filed December 21, 2005, with the Securities and Exchange Commission).
10(a)	Change in Control Agreement for David L. Bumgarner, effective as of May 4, 2022.
10(b)	Change in Control Agreement for Jeffrey D. Legge, effective as of May 4, 2022.
10(c)	Change in Control Agreement for Michael T. Quinlan, Jr., effective as of May 4, 2022.
31(a)	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Charles R. Hageboeck.
31(b)	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for David L. Bumgarner.
32(a)	Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Charles R. Hageboeck.
32(b)	Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for David L. Bumgarner.
101	Interactive Data File - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase*
101.DEF	XBRL Taxonomy Extension Definition Linkbase*
101.LAB	XBRL Taxonomy Extension Label Linkbase*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase*
104	Cover Page Interactive Data file (formatted as inline XBRL and contained in Exhibit 101).
* Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

61

SIGNATURES

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

City Holding Company

(Registrant)

/s/ Charles R. Hageboeck

Charles R. Hageboeck

President and Chief Executive Officer

(Principal Executive Officer)

/s/ David L. Bumgarner

David L. Bumgarner

Executive Vice President, Chief Financial Officer and Principal Accounting Officer

(Principal Financial Officer)

Date: August 3, 2023

62

EX-31.A

Exhibit 31(a)

CERTIFICATION

I, Charles R. Hageboeck, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 of City Holding Company;

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

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

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

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

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

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

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

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

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

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

Date: August 3, 2023

/s/ Charles R. Hageboeck

Charles R. Hageboeck

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.B

Exhibit 31(b)

CERTIFICATION

I, David L. Bumgarner, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 of City Holding Company;

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

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

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

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

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

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

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

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

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

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

Date: August 3, 2023

/s/ David L. Bumgarner

David L. Bumgarner

Executive Vice President, Chief Financial Officer and Principal Accounting Officer

(Principal Financial Officer)

EX-32.A

Exhibit 32(a)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of City Holding Company (the “Company”) for the period ending June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Charles R. Hageboeck, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

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

/s/ Charles R. Hageboeck

Charles R. Hageboeck

President and Chief Executive Officer

(Principal Executive Officer)

Date: August 3, 2023

This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended (the“Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

EX-32.B

Exhibit 32(b)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of City Holding Company (the “Company”) for the period ending June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David L. Bumgarner, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

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

/s/ David L. Bumgarner

David L. Bumgarner

Executive Vice President, Chief Financial Officer and Principal Accounting Officer

(Principal Financial Officer)

Date: August 3, 2023

This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2023	Aug. 01, 2023
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	0-11733
Entity Registrant Name	CITY HOLDING COMPANY
Entity Incorporation, State or Country Code	WV
Entity Tax Identification Number	55-0619957
Entity Address, Address Line One	25 Gatewater Road,
Entity Address, City or Town	Charleston,
Entity Address, State or Province	WV
Entity Address, Postal Zip Code	25313
City Area Code	304
Local Phone Number	769-1100
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		15,006,655
Entity Central Index Key	0000726854
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false
NASDAQ/NGS (GLOBAL SELECT MARKET) [Member]
Entity Information [Line Items]
Title of 12(b) Security	Common Stock, $2.50 par value
Trading Symbol	CHCO
Security Exchange Name	NASDAQ

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Assets
Cash and due from banks	$ 66,350	$ 68,333
Interest-bearing deposits in depository institutions	164,931	131,667
Cash and Cash Equivalents	231,281	200,000
Investment securities available for sale, at fair value (amortized cost $1,586,870 and $1,673,864, net of allowance for credit losses of $0 at June 30, 2023 and December 31, 2022, respectively)	1,419,933	1,505,520
Other securities	29,262	23,807
Total Investment Securities	1,449,195	1,529,327
Gross loans	3,922,142	3,646,258
Allowance for credit losses	(22,751)	(17,108)
Net Loans	3,899,391	3,629,150
Bank owned life insurance	117,173	120,674
Premises and equipment, net	73,118	70,786
Accrued interest receivable	17,973	18,287
Deferred tax assets, net	46,944	44,884
Goodwill and other intangible assets, net	163,426	115,735
Other assets	148,333	149,263
Total Assets	6,146,834	5,878,106
Deposits:
Noninterest-bearing	1,373,106	1,351,415
Interest-bearing:
Demand deposits	1,337,445	1,233,482
Savings deposits	1,343,571	1,396,869
Time deposits	960,941	888,100
Total Deposits	5,015,063	4,869,866
Customer repurchase agreements	271,714	290,964
FHLB long-term advances	100,000	0
Other liabilities	123,865	139,424
Total Liabilities	5,510,642	5,300,254
Commitments and contingencies - see Note I
Shareholders’ Equity
Preferred stock, par value $25 per share: 500,000 shares authorized; none issued	0	0
Common stock, par value $2.50 per share: 50,000,000 shares authorized; 19,047,548 shares issued at June 30, 2023 and December 31, 2022, less 4,040,493 and 4,259,399 shares in treasury, respectively	47,619	47,619
Capital surplus	176,746	170,980
Retained earnings	744,248	706,696
Cost of common stock in treasury	(201,973)	(215,955)
Accumulated other comprehensive (loss) income:
Unrealized (loss) on securities available-for-sale	(127,026)	(128,066)
Underfunded pension liability	(3,422)	(3,422)
Total Accumulated Other Comprehensive (Loss) Income	(130,448)	(131,488)
Total Shareholders’ Equity	636,192	578,027
Total Liabilities and Shareholders’ Equity	$ 6,146,834	$ 5,878,106

XML

Consolidated Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Preferred stock, par value (in dollars per share)	$ 25	$ 25
Preferred stock, shares authorized (in shares)	500,000	500,000
Preferred stock, shares issued (in shares)	0	0
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Common stock, par value (in dollars per share)	$ 2.50	$ 2.50
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	19,047,548	19,047,548
Common stock, treasury shares (in shares)	4,040,493	4,259,399
Debt Securities, Available-for-Sale, Allowance for Credit Loss	$ 0	$ 0

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Consolidated Statements Of Income (Unaudited) - USD ($) shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Interest Income
Interest and fees on loans	$ 52,352,000	$ 33,208,000	$ 99,356,000	$ 65,082,000
Interest and dividends on investment securities:
Taxable	11,794,000	7,547,000	23,567,000	13,770,000
Tax-exempt	950,000	1,205,000	2,112,000	2,421,000
Interest on deposits in depository institutions	2,585,000	782,000	4,176,000	1,020,000
Total Interest Income	67,681,000	42,742,000	129,211,000	82,293,000
Interest Expense
Interest on deposits	8,567,000	1,328,000	14,257,000	2,849,000
Interest on customer repurchase agreements	2,963,000	124,000	5,344,000	238,000
Interest on FHLB long-term advances	649,000	0	649,000	0
Total Interest Expense	12,179,000	1,452,000	20,250,000	3,087,000
Net Interest Income	55,502,000	41,290,000	108,961,000	79,206,000
Provision for (recovery of) credit losses	425,000	0	3,343,000	(756,000)
Net Interest Income After Provision for (Recovery of) Credit Losses	55,077,000	41,290,000	105,618,000	79,962,000
Non-Interest Income
Gains on sale of investment securities, net	0	0	773,000	0
Unrealized gains (losses) recognized on equity securities still held, net	(294,000)	(601,000)	67,000	(1,324,000)
Bank owned  life insurance	3,208,000	978,000	4,012,000	2,992,000
Other income	952,000	1,243,000	2,278,000	2,034,000
Total Non-Interest Income	20,301,000	17,849,000	38,983,000	35,297,000
Non-Interest Expense
Salaries and employee benefits	18,429,000	16,413,000	36,102,000	31,990,000
Occupancy related expense	2,811,000	2,620,000	5,451,000	5,329,000
Equipment and software related expense	2,883,000	2,732,000	5,975,000	5,501,000
FDIC insurance expense	690,000	409,000	1,135,000	844,000
Advertising	974,000	951,000	1,734,000	1,749,000
Bankcard expenses	1,736,000	1,665,000	3,245,000	3,271,000
Postage, delivery, and statement mailings	596,000	551,000	1,243,000	1,187,000
Office supplies	591,000	427,000	1,011,000	837,000
Legal and professional fees	558,000	525,000	1,028,000	1,052,000
Telecommunications	623,000	754,000	1,229,000	1,338,000
Repossessed asset losses (gains), net of expenses	22,000	(32,000)	38,000	8,000
Merger related expenses	0	0	5,645,000	0
Other expenses	4,848,000	3,674,000	9,548,000	7,110,000
Total Non-Interest Expense	34,761,000	30,689,000	73,384,000	60,216,000
Income Before Income Taxes	40,617,000	28,450,000	71,217,000	55,043,000
Income tax expense	7,884,000	5,767,000	14,143,000	11,018,000
Net Income Available to Common Shareholders	$ 32,733,000	$ 22,683,000	$ 57,074,000	$ 44,025,000
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]
Average shares outstanding, basic (in shares)	14,994	14,888	14,897	14,930
Effect of dilutive securities (in shares)	18	21	22	24
Average shares outstanding, diluted (in shares)	15,012	14,909	14,919	14,954
Earnings Per Share [Abstract]
Basic earnings per common share (in dollars per share)	$ 2.16	$ 1.51	$ 3.80	$ 2.92
Diluted earnings per common share (in dollars per share)	$ 2.16	$ 1.51	$ 3.79	$ 2.92
Service charges
Non-Interest Income
Revenue from contract with customer	$ 6,906,000	$ 7,067,000	$ 13,469,000	$ 13,792,000
Bankcard revenue
Non-Interest Income
Revenue from contract with customer	7,190,000	7,062,000	13,793,000	13,506,000
Trust and investment management fee income
Non-Interest Income
Revenue from contract with customer	$ 2,339,000	$ 2,100,000	$ 4,591,000	$ 4,297,000

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Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income available to common shareholders	$ 32,733	$ 22,683	$ 57,074	$ 44,025
Available-for-Sale Securities
Unrealized (losses) gains on available-for-sale securities arising during the period	(18,492)	(51,806)	2,140	(129,608)
Reclassification adjustment for gains	0	0	(773)	0
Other comprehensive (loss) income before income taxes	(18,492)	(51,806)	1,367	(129,608)
Tax effect	4,433	12,537	(327)	31,365
Other comprehensive (loss) income, net of tax	(14,059)	(39,269)	1,040	(98,243)
Comprehensive Income (Loss), Net of Tax	$ 18,674	$ (16,586)	$ 58,114	$ (54,218)

XML

Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Revision of Prior Period, Accounting Standards Update, Adjustment	Previously Reported	Common Stock	Common Stock Previously Reported	Capital Surplus	Capital Surplus Previously Reported	Retained Earnings	Retained Earnings Revision of Prior Period, Accounting Standards Update, Adjustment	Retained Earnings Previously Reported	Treasury Stock	Treasury Stock Previously Reported	Accumulated Other Comprehensive Income (Loss)	Accumulated Other Comprehensive Income (Loss) Previously Reported
Beginning Balance at Dec. 31, 2021	$ 681,105			$ 47,619		$ 170,942		$ 641,826			$ (193,542)		$ 14,260
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	44,025							44,025
Other comprehensive income (loss)	(98,243)												(98,243)
Cash dividends declared	(17,918)							(17,918)
Stock-based compensation expense	1,658					1,658
Restricted awards granted	0					(2,658)					2,658
Purchase of treasury shares	(19,295)										(19,295)
Ending balance at Jun. 30, 2022	591,993			47,619		169,557		667,933			(209,133)		(83,983)
Beginning Balance at Mar. 31, 2022	632,430			47,619		170,206		654,138			(194,819)		(44,714)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	22,683							22,683
Other comprehensive income (loss)	(39,269)												(39,269)
Cash dividends declared	(8,888)							(8,888)
Stock-based compensation expense	687					687
Restricted awards granted	0					(951)					951
Exercise of stock options	661					(385)					1,046
Purchase of treasury shares	(16,311)										(16,311)
Ending balance at Jun. 30, 2022	591,993			47,619		169,557		667,933			(209,133)		(83,983)
Beginning Balance at Dec. 31, 2022	578,027	$ 175	$ 577,852	47,619	$ 47,619	170,980	$ 170,980	706,871	$ 175	$ 706,696	(215,955)	$ (215,955)	(131,488)	$ (131,488)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	57,074							57,074
Other comprehensive income (loss)	1,040												1,040
Cash dividends declared	(19,697)							(19,697)
Stock-based compensation expense	1,726					1,726
Restricted awards granted	0					(3,534)					3,534
Purchase of treasury shares	(44,056)										(44,056)
Acquisition of Citizens Commerce Bancshares, Inc.	62,078					7,574					54,504
Ending balance at Jun. 30, 2023	636,192			47,619		176,746		744,248			(201,973)		(130,448)
Beginning Balance at Mar. 31, 2023	651,050			47,619		177,529		721,727			(179,436)		(116,389)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	32,733							32,733
Other comprehensive income (loss)	(14,059)												(14,059)
Cash dividends declared	(10,212)							(10,212)
Stock-based compensation expense	633					633
Restricted awards granted	0					(1,416)					1,416
Purchase of treasury shares	(23,953)										(23,953)
Ending balance at Jun. 30, 2023	$ 636,192			$ 47,619		$ 176,746		$ 744,248			$ (201,973)		$ (130,448)

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Consolidated Statements Of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Operating Activities
Net income	$ 57,074,000	$ 44,025,000
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and (accretion), net	4,711,000	6,213,000
Provision for (recovery of) credit losses	3,343,000	(756,000)
Depreciation of premises and equipment	2,349,000	2,716,000
Deferred income tax (benefit) expense	(864,000)	634,000
Net periodic employee benefit cost	26,000	128,000
Gains on sale of investment securities, net	840,000	(1,324,000)
Stock-compensation expense	1,726,000	1,658,000
Share-Based Payment Arrangement, Exercise of Option, Tax Benefit	(203,000)	91,000
Increase in value of bank-owned life insurance	(4,012,000)	(2,992,000)
Loans originated for sale	(6,397,000)	(23,467,000)
Proceeds from the sale of loans originated for sale	6,499,000	23,512,000
Gain on sale of loans	(102,000)	(224,000)
Change in accrued interest receivable	1,181,000	(715,000)
Change in other assets	9,764,000	(11,350,000)
Change in other liabilities	(7,350,000)	4,781,000
Net Cash Provided by Operating Activities	67,311,000	45,396,000
Investing Activities
Net decrease (increase) in loans	(23,077,000)	(22,554,000)
Purchases	21,781,000	362,820,000
Proceeds from sales of securities available-for-sale	85,559,000	0
Proceeds from maturities and calls	63,728,000	131,306,000
Purchases	(5,950,000)	(258,000)
Proceeds from sales	66,000	83,000
Proceeds from maturities and calls	498,000	0
Purchases of premises and equipment	(1,727,000)	(1,050,000)
Proceeds from the disposals of premises and equipment	282,000	64,000
Proceeds from bank-owned life insurance policies	206,000	3,624,000
Payments for low income housing tax credits	(4,144,000)	(832,000)
Acquisition of Citizens Commerce Bancshares, Inc.	14,013,000	0
Net Cash Provided by (Used in) Investing Activities	107,673,000	(252,437,000)
Financing Activities
Net (decrease) increase in non-interest-bearing deposits	(38,604,000)	158,535,000
Net (decrease) increase in interest-bearing deposits	(115,286,000)	58,098,000
Net (decrease) increase in short-term borrowings	(25,750,000)	89,910,000
Proceeds from long-term debt	100,000,000	0
Purchases of treasury stock	(44,056,000)	(19,295,000)
Proceeds from exercise of stock options	0	661,000
Repayments of Debt and Lease Obligation	(405,000)	(382,000)
Dividends paid	(19,602,000)	(18,138,000)
Net Cash (Used in) Provided by Financing Activities	(143,703,000)	269,389,000
Increase in Cash and Cash Equivalents	31,281,000	62,348,000
Cash and cash equivalents at beginning of period	200,000,000	634,631,000
Cash and Cash Equivalents at End of Period	231,281,000	696,979,000
Supplemental Cash Flow Information:
Cash paid for interest	18,509,000	3,257,000
Cash paid for income taxes	17,309,000	10,828,000
Citizens Commerce Bancshares, Inc.
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets Acquired	320,453,000	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities Assumed	(307,111,000)	0
Goodwill	40,458,000	0
Citizens Commerce Bancshares, Inc. | Core Deposits
Core deposit intangible	$ 8,278,000	$ 0

XML

Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Stockholders' Equity [Abstract]
Cash dividends declared (in dollars per share)	$ 0.65	$ 0.60	$ 1.30	$ 1.20
Exercise of stock options (in shares)		13,078		13,078
Purchase of treasury shares (in shares)	269,338	208,243	487,587	246,450

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Background and Basis of Presentation

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Background and Basis of Presentation

Background and Basis of Presentation

City Holding Company ("City Holding"), a West Virginia corporation headquartered in Charleston, West Virginia, is a registered financial holding company under the Bank Holding Company Act and conducts its principal activities through its wholly-owned subsidiary, City National Bank of West Virginia ("City National"). City National is a retail and consumer-oriented community bank with 99 banking offices in West Virginia (58), Kentucky (24), Virginia (13) and southeastern Ohio (4). City National provides credit, deposit, and trust and investment management services to its customers in a broad geographical area that includes many rural and small community markets in addition to larger cities including Charleston (WV), Huntington (WV), Martinsburg (WV), Ashland (KY), Lexington (KY), Winchester (VA) and Staunton (VA). In addition to its branch network, City National's delivery channels include automated-teller-machines ("ATMs"), interactive-teller machines ("ITMs"), mobile banking, debit cards, interactive voice response systems, and Internet technology. The Company’s business activities are currently limited to one reportable business segment, which is community banking.

On March 10, 2023, the Company acquired 100% of the outstanding common shares of Citizens Commerce Bancshares, Inc. ("Citizens") and its principal banking subsidiary, Citizens Commerce Bank of Versailles, Kentucky. See Note C for additional information on the acquisition.

The accompanying consolidated financial statements, which are unaudited, include all of the accounts of City Holding and its wholly-owned subsidiaries (collectively, the "Company"). All material intercompany transactions have been eliminated. The consolidated financial statements include all adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations and financial condition for each of the periods presented. Such adjustments are of a normal recurring nature. The results of operations for the six months ended June 30, 2023 are not necessarily indicative of the results of operations that can be expected for the year ending December 31, 2023. The Company’s accounting and reporting policies conform with generally accepted accounting principles for interim financial information, with the instructions to Form 10-Q and Article 10 of Regulation S-X, and with Industry Guide 3, Statistical Disclosure by Bank Holding Companies. Such policies require management to make estimates and develop assumptions that affect the amounts reported in the consolidated financial statements and related footnotes. Actual results could differ from management’s estimates.

The consolidated balance sheet as of December 31, 2022 has been derived from audited financial statements included in the Company’s 2022 Annual Report to Shareholders.  Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted.  These financial statements should be read in conjunction with the financial statements and notes thereto included in the 2022 Annual Report of the Company.

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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2023

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements    

Recently Adopted

In October 2018, the FASB issued ASU No. 2018-16, "Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes." This amendment permits the use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the UST, the LIBOR swap rate, the OIS rate based on the Federal Funds Effective Rate, and the SIFMA Municipal Swap Rate. This ASU became effective for the Company on January 1, 2019 with anticipation the LIBOR index would be phased out by the end of 2021. In March 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This amendment provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform and is effective as of March 12, 2020 through December 31, 2022. In January 2021, the FASB issued ASU No. 2021-01, "Reference Rate Reform (Topic 848): Scope," which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. In December 2022, the FASB issued ASU No. 2022-06, "Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848," which defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The adoption of ASU No. 2020-04 did not have a material impact on the Company's financial statements.

In March 2022, the FASB issued ASU No. 2022-01, "Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method." The amendments in this update allow nonprepayable financial assets to be included in a closed

portfolio hedged using the portfolio layer method. This expanded scope permits an entity to apply the same portfolio hedging method to both prepayable and nonprepayable financial assets, thereby allowing consistent accounting for similar hedges. This ASU became effective for the Company on January 1, 2023. The adoption of ASU No. 2022-01 did not have a material impact on the Company's financial statements.

In March 2022, the FASB issued ASU No. 2022-02, "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures." The amendments in this update eliminate the accounting guidance for TDRs by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The amendments in this update also require that an entity disclose current-period gross writeoffs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. This ASU became effective for the Company on January 1, 2023. The Company adopted ASU No. 2022-02 using the modified retrospective method, which resulted in a $0.2 million adjustment to shareholders' equity and the allowance for credit losses. See Note F for additional information.

Pending Adoption

In March 2023, the FASB issued ASU No. 2023-02, "Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures using the Proportional Amortization Method." The amendments in this update permit reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. This ASU will become effective for the Company on January 1, 2024. The adoption of ASU No. 2023-02 is not expected to have a material impact on the Company's financial statements.

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Acquisition and Preliminary Purchase Price Allocation

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisition and Preliminary Purchase Price Allocation

Acquisition and Preliminary Purchase Price AllocationOn March 10, 2023, the Company acquired 100% of the outstanding common shares of Citizens Commerce Bancshares, Inc. ("Citizens") and its principal banking subsidiary, Citizens Commerce Bank of Versailles, Kentucky, in order to strengthen the Company's market presence in the Lexington, Kentucky area. The acquisition of Citizens was structured as a stock transaction in which the Company issued approximately 0.7 million shares, valued at approximately $62.1 million.

The following table summarizes the consideration paid for Citizens and the amounts of the assets acquired and liabilities assumed as of the date of acquisition (in thousands):

Consideration:
Common stock	$	61,570
Stock option buyout	495
Cash	13
	62,078
Identifiable assets:
Cash and cash equivalents	14,013
Investment securities	41,008
FHLB stock	620
Loans	251,406
Fixed assets	3,237
Bank owned life insurance	2,966
Deferred tax assets, net	1,481
Other assets	5,722
Total identifiable assets	320,453
Identifiable liabilities:
Deposits	299,250
Short-term borrowings	6,500
Other liabilities	1,361
Total identifiable liabilities	307,111
Net identifiable assets (liabilities)	13,342
Goodwill	40,458
Core deposit intangible	8,278
	$	62,078

Investment Securities

The gain on the sale of investment securities recognized in the first six months of 2023 was primarily due to the sale of Citizens investment portfolio of approximately $41 million shortly after the acquisition date.

Acquired Loans

The fair value of net assets acquired includes fair value adjustments to certain receivables that were not considered impaired as of the acquisition date. The fair value adjustments were determined using discounted contractual cash flows. However, the Company believes that there was not deterioration of credit at the date of acquisition. As such, these receivables were not considered impaired at the acquisition date and were not subject to the guidance relating to purchased credit deteriorated loans, which have shown evidence of credit deterioration since origination. Receivables acquired that were not subject to these requirements include non-impaired loans with a fair value of $246.4 million on the date of acquisition.

In connection with the completion of the acquisition of Citizens during the six months ended June 30, 2023, the Company recorded $2.0 million of credit loss expense associated with loans acquired from Citizens in its total provision for credit losses.

The fair value of purchased financial assets with credit deterioration ("PCD") was $4.9 million on the date of acquisition. The gross contractual amounts receivable relating to the purchased financial asset with credit deterioration was $8.5 million. The Company estimates, on the date of acquisition, that $3.6 million of the contractual cash flows specific to the purchased financial assets with credit deterioration will not be collected.

Acquired Deposits

The fair values of non-time deposits approximated their carrying value at the acquisition date. For time deposits, the fair values were estimated based on discounted cash flows, using interest rates that were being offered at the time of acquisition compared to the contractual interest rates. Based on this analysis, management recorded a premium on time deposits acquired of $0.6 million which is being amortized over 5 years.

Core Deposit Intangible

The Company believes that the customer relationships with the deposits acquired have an intangible value. In connection with the acquisition, the Company recorded a core deposit intangible asset of $8.3 million. The core deposit intangible asset represents the value that the acquiree had with their deposit customers. The fair value was estimated based on a discounted cash flow methodology that considered the type of deposit, deposit retention and the cost of the deposit base. The core deposit intangible is being amortized over 10 years.

Goodwill

Under GAAP, management has up to twelve months following the date of the acquisition to finalize the fair value of acquired assets and liabilities. The measurement period ends as soon as the Company receives information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable. Any subsequent adjustments to the fair value of the acquired assets and liabilities, intangible assets or other purchase accounting adjustments will result in adjustments to the goodwill recorded. Among the items that are still preliminary at June 30, 2023 is the finalization of the final tax return, which management anticipates completing during 2023. Given the form of the transaction, the $40.5 million goodwill preliminarily recorded in conjunction with the Citizens acquisition is not expected to be deductible for tax purposes. The following table summarizes adjustments to goodwill subsequent to December 31, 2022 (in thousands):

	Goodwill
Balance at December 31, 2022	$	108,941
Adjustment to goodwill acquired in conjunction with the acquisition of Citizens	40,458
Balance at June 30, 2023	$	149,399

Merger Related Costs

During the six months ended June, 2023, the Company incurred $5.6 million of merger-related costs in connection with the acquisition of Citizens, primarily for professional fees ($1.6 million), severance ($1.4 million), and data processing costs ($1.3 million).

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Investments

6 Months Ended

Jun. 30, 2023

Investments [Abstract]

Investments

Investments

The aggregate carrying and approximate fair values of investment securities follow (in thousands).  Fair values are based on quoted market prices, where available.  If quoted market prices are not available, fair values are based on quoted market prices of comparable financial instruments.

	June 30, 2023								December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Securities available-for-sale:
Obligations of states and
political subdivisions	$	245,922	$	160	$	20,481	$	225,601	$	292,293	$	346	$	24,324	$	268,315
Mortgage-backed securities:
U.S. government agencies	1,300,980		214		142,736		1,158,458		1,342,666		299		140,686		1,202,279
Private label	7,288		—		498		6,790		7,695		—		464		7,231
Trust preferred securities	4,595		—		403		4,192		4,590		—		762		3,828
Corporate securities	28,085		—		3,193		24,892		26,620		—		2,753		23,867
Total Securities Available-for-Sale	$	1,586,870	$	374	$	167,311	$	1,419,933	$	1,673,864	$	645	$	168,989	$	1,505,520

The Company's other investment securities include marketable equity securities, non-marketable equity securities and certificates of deposits held for investment. At June 30, 2023 and December 31, 2022, the Company held $7.6 million in marketable equity securities. Changes in the fair value of the marketable equity securities are recorded in "unrealized gains (losses) recognized on equity securities still held" in the consolidated statements of income. The Company's non-marketable securities consist of securities with limited marketability, such as stock in the Federal Reserve Bank ("FRB") or the Federal Home Loan Bank ("FHLB"). At June 30, 2023 and December 31, 2022, the Company held $21.4 million and $15.5 million, respectively, in non-marketable equity securities. These securities are carried at cost due to the restrictions placed on their transferability. At June 30, 2023 and December 31, 2022, the Company held $0.2 million and $0.7 million in certificates of deposits held for investment, respectively.

The Company's mortgage-backed U.S. government agency securities consist of both residential and commercial securities, all of which are guaranteed by Fannie Mae ("FNMA"), Freddie Mac ("FHLMC"), or Ginnie Mae ("GNMA"). At June 30, 2023 and December 31, 2022 there were no securities of any non-governmental issuer whose aggregate carrying value or estimated fair value exceeded 10% of shareholders' equity.

Certain investment securities owned by the Company were in an unrealized loss position (i.e., amortized cost basis exceeded the estimated fair value of the securities) as of June 30, 2023 and December 31, 2022.  The following table shows the gross unrealized losses and fair value of the Company’s investments aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

	June 30, 2023
	Less Than Twelve Months				Twelve Months or Greater				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Securities available-for-sale:
Obligations of states and political subdivisions	$	43,264	$	1,102	$	169,087	$	19,379	$	212,351	$	20,481
Mortgage-backed securities:
U.S. Government agencies	105,588		16,261		746,989		126,475		852,577		142,736
Private label	—		—		6,690		498		6,690		498
Trust preferred securities	—		—		4,192		403		4,192		403
Corporate securities	11,204		1,359		13,688		1,834		24,892		3,193
Total available-for-sale	$	160,056	$	18,722	$	940,646	$	148,589	$	1,100,702	$	167,311

	December 31, 2022
	Less Than Twelve Months				Twelve Months or Greater				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Securities available-for-sale:
Obligations of states and political subdivisions	$	203,173	$	21,929	$	13,359	$	2,395	$	216,532	$	24,324
Mortgage-backed securities:
U.S. Government agencies	533,611		50,268		376,778		90,418		910,389		140,686
Private label	7,126		464		—		—		7,126		464
Trust preferred securities	—		—		3,828		762		3,828		762
Corporate securities	22,972		2,648		895		105		23,867		2,753
Total available-for-sale	$	766,882	$	75,309	$	394,860	$	93,680	$	1,161,742	$	168,989

As of June 30, 2023, management does not intend to sell any impaired security and it is not more than likely that it will be required to sell any impaired security before the recovery of its amortized cost basis. The unrealized losses on debt securities are primarily the result of interest rate changes, credit spread fluctuations on agency-issued mortgage-related securities, general financial market uncertainty and market volatility. These conditions should not prohibit the Company from receiving its contractual principal and interest payments on its debt securities. The fair value is expected to recover as the securities approach their maturity date or repricing date. As of June 30, 2023, management believes the unrealized losses detailed in the table above are temporary and therefore no allowance for credit losses has been recognized on the Company’s securities. Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss will be recognized in net income in the period the other-than-temporary impairment is identified, while any noncredit loss will be recognized in other comprehensive income. During the three months ended June 30, 2023 and 2022, the Company had no credit-related net investment impairment losses.

The amortized cost and estimated fair value of debt securities at June 30, 2023, by contractual maturity, is shown in the following table (in thousands).  Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.  Mortgage-backed securities have been allocated to their respective maturity groupings based on their contractual maturity.

	Amortized Cost		Estimated Fair Value
Available-for-Sale Debt Securities
Due in one year or less	$	1,814	$	1,796
Due after one year through five years	51,378		47,776
Due after five years through ten years	511,736		472,381
Due after ten years	1,021,942		897,980
Total	$	1,586,870	$	1,419,933

Gross gains and gross losses recognized by the Company from investment security transactions are summarized in the table below (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Gross realized gains on securities sold	$	—	$	—	$	975	$	—
Gross realized losses on securities sold	—		—		(202)		—
Net investment security gains	$	—	$	—	$	773	$	—
Gross unrealized gains recognized on equity securities still held	$	8	$	2	$	368	$	42
Gross unrealized losses recognized on equity securities still held	(302)		(603)		(301)		(1,366)
Net unrealized gains recognized on equity securities still held	$	(294)	$	(601)	$	67	$	(1,324)

The carrying value of securities pledged to secure public deposits and for other purposes as required or permitted by law approximated $759 million and $886 million at June 30, 2023 and December 31, 2022, respectively.

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Loans

6 Months Ended

Jun. 30, 2023

Loans and Leases Receivable, Net Amount [Abstract]

Loans

Loans

The following table summarizes the Company’s major classifications for loans (in thousands):

	June 30, 2023		December 31, 2022
Commercial and industrial	$	417,847	$	373,890
1-4 Family	123,701		116,192
Hotels	324,745		340,404
Multi-family	191,483		174,786
Non Residential Non-Owner Occupied	673,921		585,964
Non Residential Owner Occupied	222,852		174,961
Commercial real estate	1,536,702		1,392,307
Residential real estate	1,746,618		1,693,523
Home equity	151,012		134,317
Consumer	65,201		48,806
Demand deposit account (DDA) overdrafts	4,762		3,415
Gross loans	3,922,142		3,646,258
Allowance for credit losses	(22,751)		(17,108)
Net loans	$	3,899,391	$	3,629,150
Construction loans included in:
Commercial real estate	$	3,361	$	4,130
Residential real estate	20,470		21,122

The Company’s commercial and residential real estate construction loans are primarily secured by real estate within the Company’s principal markets.  These loans were originated under the Company’s loan policies, which are focused on the risk characteristics of the loan portfolio, including construction loans. In the judgment of the Company's management, adequate consideration has been given to these loans in establishing the Company's allowance for credit losses.

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Allowance For Credit Losses

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

Allowance For Credit Losses

The following table summarizes the activity in the allowance for credit losses, by portfolio loan classification, for the six months ended June 30, 2023 and 2022 (in thousands).  The allocation of a portion of the allowance in one portfolio segment does not preclude its availability to absorb losses in other portfolio segments.

	Beginning Balance		Impact of Adopting ASU 2022-02		PCD Loan Reserves		Charge-offs		Recoveries		Provision for (recovery of) credit losses		Ending Balance
Six months ended June 30, 2023
Commercial and industrial	$	3,568	12		—		(69)		$	169	$	650	$	4,330
1-4 Family	566		(1)		—		(80)		30		83		598
Hotels	2,332		—		—		(40)		—		(159)		2,133
Multi-family	380		—		500		—		—		129		1,009
Non Residential Non-Owner Occupied	2,019		—		1,536		—		156		1,075		4,786
Non Residential Owner Occupied	1,315		—		775		—		—		288		2,378
Commercial real estate	6,612		(1)		2,811		(120)		186		1,416		10,904
Residential real estate	5,427		(138)		—		(52)		15		321		5,573
Home equity	290		(46)		—		(267)		16		415		408
Consumer	110		(2)		—		(171)		51		346		334
DDA overdrafts	1,101		—		—		(807)		713		195		1,202
	$	17,108	$	(175)	$	2,811	$	(1,486)	$	1,150	$	3,343	$	22,751
Six months ended June 30, 2022
Commercial and industrial	$	3,480	—		—		(34)		$	91	$	(18)	$	3,519
1-4 Family	598		—		—		(24)		34		(34)		574
Hotels	2,426		—		—		—		—		82		2,508
Multi-family	483		—		—		—		—		(23)		460
Non Residential Non-Owner Occupied	2,319		—		—		—		44		(267)		2,096
Non Residential Owner Occupied	1,485		—		—		—		—		(90)		1,395
Commercial real estate	7,311		—		—		(24)		78		(332)		7,033
Residential real estate	5,716		—		—		(106)		49		(665)		4,994
Home equity	517		—		—		(19)		20		(180)		338
Consumer	106		—		—		(32)		47		(43)		78
DDA Overdrafts	1,036		—		—		(1,235)		770		482		1,053
	$	18,166	$	—	$	—	$	(1,450)	$	1,055	$	(756)	$	17,015

	Beginning Balance		Impact of Adopting ASU 2022-02		PCD Loan Reserves		Charge-offs		Recoveries		Provision for (recovery of) credit losses		Ending Balance
Three months ended June 30, 2023
Commercial and industrial	$	4,289	—		—		(69)		$	86	$	24	$	4,330
1-4 Family	613		—		—		(77)		16		46		598
Hotels	2,184		—		—		(40)		—		(11)		2,133
Multi-family	1,027		—		—		—		—		(18)		1,009
Non Residential Non-Owner Occupied	4,924		—		—		—		12		(150)		4,786
Non Residential Owner Occupied	2,437		—		—		—		—		(59)		2,378
Commercial real estate	11,185		—		—		(117)		28		(192)		10,904
Residential real estate	5,481		—		—		(20)		5		107		5,573
Home equity	400		—		—		(200)		12		196		408
Consumer	371		—		—		(109)		28		44		334
DDA overdrafts	998		—		—		(357)		315		246		1,202
	$	22,724	$	—	$	—	$	(872)	$	474	$	425	$	22,751
Three months ended June 30, 2022
Commercial and industrial	$	3,458	—		—		—		$	32	$	29	$	3,519
1-4 Family	574		—		—		(24)		5		19		574
Hotels	2,545		—		—		—		—		(37)		2,508
Multi-family	477		—		—		—		—		(17)		460
Non Residential Non-Owner Occupied	2,281		—		—		—		20		(205)		2,096
Non Residential Owner Occupied	1,382		—		—		—		—		13		1,395
Commercial real estate	7,259		—		—		(24)		25		(227)		7,033
Residential real estate	5,039		—		—		(56)		4		7		4,994
Home equity	410		—		—		(19)		3		(56)		338
Consumer	86		—		—		(9)		19		(18)		78
DDA Overdrafts	1,028		—		—		(604)		364		265		1,053
	$	17,280	$	—	$	—	$	(712)	$	447	$	—	$	17,015

During the six months ended June 30, 2023, the Company recorded $2.8 million of allowance for credit losses due to acquired Citizens PCD loans. Further, in connection with the completion of the acquisition of Citizens during the six months ended June 30, 2023, the Company recorded $2.0 million of provision for credit losses associated with loans acquired from Citizens. In addition, the provision for credit losses for the six months ended June 30, 2023 included $0.9 million that was primarily related to the downgrade of two commercial loans.

Management systematically monitors the loan portfolio and the appropriateness of the allowance for credit losses on a quarterly basis to provide for expected losses inherent in the portfolio. Management assesses the risk in each loan type based on historical trends, the general economic environment of its local markets, individual loan performance and other relevant

factors. The Company's estimate of future economic conditions utilized in its provision estimate is primarily dependent on expected unemployment ranges over a two-year period. Beyond two years, a straight line reversion to historical average loss rates is applied over the life of the loan pool in the migration methodology. The vintage methodology applies future average loss rates based on net losses in historical periods where the unemployment rate was within the forecasted range.

Individual credits in excess of $1 million are selected at least annually for detailed loan reviews, which are utilized by management to assess the risk in the portfolio and the appropriateness of the allowance.

Non-Performing Loans

Interest income on loans is accrued and credited to operations based upon the principal amount outstanding, using methods that generally result in level rates of return.  Loan origination fees, and certain direct costs, are deferred and amortized as an adjustment to the yield over the term of the loan.  The accrual of interest generally is discontinued when a loan becomes 90 days past due as to principal or interest for all loan types.  However, any loan may be placed on non-accrual status if the Company receives information that indicates a borrower is unable to meet the contractual terms of its respective loan agreement. Other indicators considered for placing a loan on non-accrual status include the borrower’s involvement in bankruptcies, foreclosures, repossessions, litigation and any other situation resulting in doubt as to whether full collection of contractual principal and interest is attainable.  When interest accruals are discontinued, unpaid interest recognized in income in the current year is reversed, and interest accrued in prior years is charged to the allowance for credit losses.  Management may elect to continue the accrual of interest when the net realizable value of collateral exceeds the principal balance and related accrued interest, and the loan is in the process of collection.

Generally for all loan classes, interest income during the period the loan is non-performing is recorded on a cash basis after recovery of principal is reasonably assured.  Cash payments received on nonperforming loans are typically applied directly against the outstanding principal balance until the loan is fully repaid.  Generally, loans are restored to accrual status when the obligation is brought current, the borrower has performed in accordance with the contractual terms for a reasonable period of time, and the ultimate collectability of the total contractual principal and interest is no longer in doubt.

The following table presents the amortized cost basis of loans on non-accrual status and loans past due over 90 days still accruing as of June 30, 2023 (in thousands):

	Non-accrual With No		Non-accrual With		Loans Past Due
	Allowance for		Allowance for		Over 90 Days
	Credit Losses		Credit Losses		Still Accruing
Commercial & Industrial	$	—	$	741	$	—
1-4 Family	—		742		—
Hotels	—		—		—
Multi-family	—		—		—
Non Residential Non-Owner Occupied	—		753		—
Non Residential Owner Occupied	—		326		—
Commercial Real Estate	—		1,821		—
Residential Real Estate	—		2,774		208
Home Equity	—		24		7
Consumer	—		35		—
Total	$	—	$	5,395	$	215

The following table presents the amortized cost basis of loans on non-accrual status and loans past due over 90 days still accruing as of December 31, 2022 (in thousands):

	Non-accrual With No		Non-accrual With		Loans Past Due
	Allowance for		Allowance for		Over 90 Days
	Credit Losses		Credit Losses		Still Accruing
Commercial & Industrial	$	—	$	1,015	$	—
1-4 Family	—		937		—
Hotels	—		115		—
Multi-family	—		—		—
Non Residential Non-Owner Occupied	—		816		—
Non Residential Owner Occupied	—		298		—
Commercial Real Estate	—		2,166		—
Residential Real Estate	228		1,741		164
Home Equity	—		55		—
Consumer	—		—		23
Total	$	228	$	4,977	$	187

The Company recognized no interest income on non-accrual loans during each of the three and six months ended June 30, 2023 and 2022.

There were no individually evaluated impaired collateral-dependent loans as of June 30, 2023 or December 31, 2022. Changes in the fair value of the collateral for collateral-dependent loans are reported as a provision for credit loss or a recovery of credit loss in the period of change.

There were no significant commitments to provide additional funds on non-accrual or individually evaluated loans at June 30, 2023.

Generally, all loan types are considered past due when the contractual terms of a loan are not met and the borrower is 30 days or more past due on a payment.  Furthermore, residential and home equity loans are generally subject to charge-off when the loan becomes 120 days past due, depending on the estimated fair value of the collateral less cost to dispose, versus the outstanding loan balance.  Commercial loans are generally charged off when the loan becomes 120 days past due.  Open-end consumer loans are generally charged off when the loan becomes 180 days past due.

The following tables present the aging of the amortized cost basis in past-due loans as of June 30, 2023 and December 31, 2022 by class of loan (in thousands):

	June 30, 2023
	30-59		60-89		90+		Total		Current		Non-		Total
	Past Due		Past Due		Past Due		Past Due		Loans		accrual		Loans
Commercial and industrial	$	117	$	25	$	—	$	142	$	416,964	$	741	$	417,847
1-4 Family	105		—		—		105		122,854		742		123,701
Hotels	—		—		—		—		324,745		—		324,745
Multi-family	—		—		—		—		191,483		—		191,483
Non Residential Non-Owner Occupied	131		1		—		132		673,036		753		673,921
Non Residential Owner Occupied	—		—		—		—		222,526		326		222,852
Commercial real estate	236		1		—		237		1,534,644		1,821		1,536,702
Residential real estate	5,330		346		208		5,884		1,737,960		2,774		1,746,618
Home Equity	688		90		7		785		150,203		24		151,012
Consumer	57		—		—		57		65,109		35		65,201
Overdrafts	332		9		—		341		4,421		—		4,762
Total	$	6,760	$	471	$	215	$	7,446	$	3,909,301	$	5,395	$	3,922,142

	December 31, 2022
	30-59		60-89		90+		Total		Current		Non-		Total
	Past Due		Past Due		Past Due		Past Due		Loans		accrual		Loans
Commercial and industrial	$	201	$	33	$	—	$	234	$	372,641	$	1,015	$	373,890
1-4 Family	17		—		—		17		115,238		937		116,192
Hotels	—		—		—		—		340,289		115		340,404
Multi-family	—		—		—		—		174,786		—		174,786
Non Residential Non-Owner Occupied	—		—		—		—		585,148		816		585,964
Non Residential Owner Occupied	505		188		—		693		173,970		298		174,961
Commercial real estate	522		188		—		710		1,389,431		2,166		1,392,307
Residential real estate	6,843		84		164		7,091		1,684,463		1,969		1,693,523
Home Equity	622		28		—		650		133,612		55		134,317
Consumer	52		25		23		100		48,706		—		48,806
Overdrafts	386		5		—		391		3,024		—		3,415
Total	$	8,626	$	363	$	187	$	9,176	$	3,631,877	$	5,205	$	3,646,258

Loan Restructurings

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

modifications that directly affect cash flows. During the three and six months ended June 30, 2023, the Company had no loan modifications that were considered restructured loans.

A loan that is considered a restructured loan may be subject to the individually evaluated loan analysis, otherwise, the restructured loan will remain in the appropriate segment in the Allowance for Credit Losses model and associated reserves will be adjusted based on changes in the discounted cash flows resulting from the modification of the restructured loan.

Credit Quality Indicators

All commercial loans within the portfolio are subject to internal risk rating.  All non-commercial loans are evaluated based on payment history.  The Company’s internal risk ratings for commercial loans are:  Exceptional, Good, Acceptable, Pass/Watch, Special Mention, Substandard and Doubtful.  Each internal risk rating is defined in the loan policy using the following criteria:  balance sheet yields; ratios and leverage; cash flow spread and coverage; prior history; capability of management; market position/industry; potential impact of changing economic, legal, regulatory or environmental conditions; purpose; structure; collateral support; and guarantor support.  Risk grades are generally assigned by the primary lending officer and are periodically evaluated by the Company’s internal loan review process.  Based on an individual loan’s risk grade, estimated loss percentages are applied to the outstanding balance of the loan to determine the amount of expected loss.

The Company categorizes loans into risk categories based on relevant information regarding the customer’s debt service ability, capacity and overall collateral position, along with other economic trends and historical payment performance.  The risk rating for each credit is updated when the Company receives current financial information, the loan is reviewed by the Company’s internal loan review and credit administration departments, or the loan becomes delinquent or impaired.  The risk grades are updated a minimum of annually for loans rated Exceptional, Good, Acceptable, or Pass/Watch.  Loans rated Special Mention, Substandard or Doubtful are reviewed at least quarterly.  The Company uses the following definitions for its risk ratings:

Risk Rating	Description
Pass Ratings:
(a) Exceptional	Loans classified as exceptional are secured with liquid collateral conforming to the internal loan policy.  Loans rated within this category pose minimal risk of loss to the bank.
(b) Good	Loans classified as good have similar characteristics that include a strong balance sheet, satisfactory debt service coverage ratios, strong management and/or guarantors, and little exposure to economic cycles. Loans in this category generally have a low chance of loss to the bank.
(c) Acceptable	Loans classified as acceptable have acceptable liquidity levels, adequate debt service coverage ratios, experienced management, and have average exposure to economic cycles.  Loans within this category generally have a low risk of loss to the bank.
(d) Pass/watch	Loans classified as pass/watch have erratic levels of leverage and/or liquidity, cash flow is volatile and the borrower is subject to moderate economic risk.  A borrower in this category poses a low to moderate risk of loss to the bank.
Special mention	Loans classified as special mention have a potential weakness(es) that deserves management’s close attention.  The potential weakness could result in deterioration of the loan repayment or the bank’s credit position at some future date.  A loan rated in this category poses a moderate loss risk to the bank.
Substandard	Loans classified as substandard reflect a customer with a well-defined weakness that jeopardizes the liquidation of the debt.  Loans in this category have the possibility that the bank will sustain some loss if the deficiencies are not corrected and the bank’s collateral value is weakened by the financial deterioration of the borrower.
Doubtful	Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristics that make collection of the full contract amount highly improbable.  Loans rated in this category are most likely to cause the bank to have a loss due to a collateral shortfall or a negative capital position.

Based on the most recent analysis performed, the risk category of loans by class of loans at June 30, 2023 and December 31, 2022 is as follows (in thousands), with the loans acquired from Citizens categorized by their origination date:

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial and industrial
Pass	$	42,882	$	51,976	$	89,094	$	57,019	$	24,315	$	20,250	$	100,274	$	385,810
Special mention	369		1,566		785		2,770		—		—		21,849		27,339
Substandard	—		946		146		849		1,078		1,636		43		4,698
Total	$	43,251	$	54,488	$	90,025	$	60,638	$	25,393	$	21,886	$	122,166	$	417,847
YTD Gross Charge-offs	$	—	$	—	$	33	$	—	$	—	$	—	$	36	$	69

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial and industrial
Pass	$	51,268	$	91,097	$	60,251	$	26,356	$	19,497	$	6,917	$	109,645	$	365,031
Special mention	—		—		392		9		—		19		3,245		3,665
Substandard	955		203		1,025		1,175		224		1,533		79		5,194
Total	$	52,223	$	91,300	$	61,668	$	27,540	$	19,721	$	8,469	$	112,969	$	373,890

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
1-4 Family
Pass	$	14,116	$	32,420	$	19,138	$	11,962	$	8,249	$	25,096	$	9,840	$	120,821
Special mention	—		223		—		111		—		777		—		1,111
Substandard	—		79		—		257		48		1,385		—		1,769
Total	$	14,116	$	32,722	$	19,138	$	12,330	$	8,297	$	27,258	$	9,840	$	123,701
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	80	$	—	$	80

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
1-4 Family
Pass	$	31,331	$	21,640	$	12,565	$	8,609	$	4,826	$	22,949	$	11,107	$	113,027
Special mention	228		—		115		—		—		836		—		1,179
Substandard	83		—		264		56		—		1,583		—		1,986
Total	$	31,642	$	21,640	$	12,944	$	8,665	$	4,826	$	25,368	$	11,107	$	116,192

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
Hotels
Pass	$	8,517	$	83,971	$	34,707	$	3,568	$	59,410	$	99,832	$	310	$	290,315
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		4,075		23,919		6,436		—		34,430
Total	$	8,517	$	83,971	$	34,707	$	7,643	$	83,329	$	106,268	$	310	$	324,745
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	40	$	—	$	40

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Hotels
Pass	$	85,590	$	35,849	$	12,275	$	60,429	$	14,921	$	90,686	$	323	$	300,073
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		3,593		24,229		—		12,509		—		40,331
Total	$	85,590	$	35,849	$	15,868	$	84,658	$	14,921	$	103,195	$	323	$	340,404

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
Multi-family
Pass	$	2,893	$	21,103	$	28,583	$	65,180	$	39,785	$	32,616	$	1,323	$	191,483
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Total	$	2,893	$	21,103	$	28,583	$	65,180	$	39,785	$	32,616	$	1,323	$	191,483
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Multi-family
Pass	$	13,761	$	21,312	$	65,542	$	37,698	$	2,189	$	33,560	$	724	$	174,786
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Total	$	13,761	$	21,312	$	65,542	$	37,698	$	2,189	$	33,560	$	724	$	174,786

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
Non Residential Non-Owner Occupied
Pass	$	30,872	$	146,949	$	123,450	$	76,398	$	72,911	$	179,771	$	8,213	$	638,564
Special mention	—		—		106		1,821		170		25,094		76		27,267
Substandard	1,254		—		579		2,451		1,404		2,402		—		8,090
Total	$	32,126	$	146,949	$	124,135	$	80,670	$	74,485	$	207,267	$	8,289	$	673,921
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Non Residential Non-Owner Occupied
Pass	$	110,501	$	108,290	$	89,943	$	68,027	$	87,413	$	113,287	$	2,781	$	580,242
Special mention	—		110		170		176		—		—		—		456
Substandard	—		601		—		1,330		2,089		1,244		2		5,266
Total	$	110,501	$	109,001	$	90,113	$	69,533	$	89,502	$	114,531	$	2,783	$	585,964

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
Non Residential Owner Occupied
Pass	$	19,237	$	31,842	$	44,475	$	17,755	$	23,595	$	60,487	$	3,722	$	201,113
Special mention	—		—		2,709		1,115		2,078		465		—		6,367
Substandard	—		929		387		108		1,795		11,039		1,114		15,372
Total	$	19,237	$	32,771	$	47,571	$	18,978	$	27,468	$	71,991	$	4,836	$	222,852
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Non Residential Owner Occupied
Pass	$	21,782	$	36,186	$	17,216	$	22,274	$	17,622	$	39,861	$	3,238	$	158,179
Special mention	—		—		—		329		—		493		113		935
Substandard	943		193		110		2,479		772		10,350		1,000		15,847
Total	$	22,725	$	36,379	$	17,326	$	25,082	$	18,394	$	50,704	$	4,351	$	174,961

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
Total
Pass	$	75,635	$	316,284	$	250,353	$	174,863	$	203,949	$	397,803	$	23,409	$	1,442,296
Special mention	—		223		2,815		3,047		2,248		26,336		76		34,745
Substandard	1,254		1,008		966		6,891		27,166		21,262		1,114		59,661
Total	$	76,889	$	317,515	$	254,134	$	184,801	$	233,363	$	445,401	$	24,599	$	1,536,702
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	120	$	—	$	120
													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Total
Pass	$	262,965	$	223,277	$	197,541	$	197,037	$	126,971	$	300,343	$	18,173	$	1,326,307
Special mention	228		110		285		505		—		1,329		113		2,570
Substandard	1,026		794		3,967		28,094		2,861		25,686		1,002		63,430
Total	$	264,219	$	224,181	$	201,793	$	225,636	$	129,832	$	327,358	$	19,288	$	1,392,307
													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Residential real estate
Performing	$	104,691	$	414,599	$	328,118	$	263,028	$	116,507	$	438,035	$	78,866	$	1,743,844
Non-performing	—		—		722		92		726		899		335		2,774
Total	$	104,691	$	414,599	$	328,840	$	263,120	$	117,233	$	438,934	$	79,201	$	1,746,618
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	52	$	—	$	52
													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Residential real estate
Performing	$	405,059	$	336,462	$	270,197	$	122,559	$	86,317	$	382,652	$	88,308	$	1,691,554
Non-performing	—		207		—		755		79		738		190		1,969
Total	$	405,059	$	336,669	$	270,197	$	123,314	$	86,396	$	383,390	$	88,498	$	1,693,523

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Home equity
Performing	$	11,868	$	15,532	$	6,744	$	4,316	$	2,700	$	4,981	$	104,847	$	150,988
Non-performing	—		—		—		—		—		—		24		24
Total	$	11,868	$	15,532	$	6,744	$	4,316	$	2,700	$	4,981	$	104,871	$	151,012
YTD Gross Charge-offs	$	—	$	32	$	—	$	—	$	—	$	35	$	200	$	267

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Home equity
Performing	$	16,670	$	7,394	$	5,000	$	3,035	$	1,823	$	5,116	$	95,224	$	134,262
Non-performing	—		—		—		—		—		—		55		55
Total	$	16,670	$	7,394	$	5,000	$	3,035	$	1,823	$	5,116	$	95,279	$	134,317

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Consumer
Performing	$	24,255	$	23,235	$	6,204	$	4,174	$	3,282	$	2,471	$	1,544	$	65,165
Non-performing	—		—		—		—		—		36		—		36
Total	$	24,255	$	23,235	$	6,204	$	4,174	$	3,282	$	2,507	$	1,544	$	65,201
YTD Gross Charge-offs	$	—	$	—	$	36	$	—	$	3	$	127	$	5	$	171

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Consumer
Performing	$	25,296	$	7,954	$	5,482	$	4,299	$	2,246	$	2,064	$	1,465	$	48,806
Non-performing	—		—		—		—		—		—		—		—
Total	$	25,296	$	7,954	$	5,482	$	4,299	$	2,246	$	2,064	$	1,465	$	48,806

XML

Derivative Instruments

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

As of June 30, 2023 and December 31, 2022, the Company primarily utilizes non-hedging derivative financial instruments with commercial banking customers to facilitate their interest rate management strategies. For these instruments, the Company acts as an intermediary for its customers and has offsetting contracts with financial institution counterparties. Changes in the fair value of these underlying derivative contracts generally offset each other and do not significantly impact the Company's results of operations.

The following table summarizes the notional and fair value of these derivative instruments (in thousands):

	June 30, 2023				December 31, 2022
	Notional Amount		Fair Value		Notional Amount		Fair Value
Non-hedging interest rate derivatives:
Customer counterparties:
Loan interest rate swap - assets	$	27,463	$	1,458	$	28,238	$	1,298
Loan interest rate swap - liabilities	586,928		57,812		619,150		63,758
Non-hedging interest rate derivatives:
Financial institution counterparties:
Loan interest rate swap - assets	604,928		59,204		637,150		65,217
Loan interest rate swap - liabilities	27,463		1,458		28,238		1,298

The following table summarizes the change in fair value of these derivative instruments (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Change in Fair Value Non-Hedging Interest Rate Derivatives:
Other income (expense) - derivative assets	$	10,653	$	15,448	$	(5,477)	$	18,524
Other (expense) income - derivative liabilities	(10,653)		(15,448)		5,477		(18,524)
Other income (expense) - derivative liabilities	131		311		(67)		888

Certain financial instruments, including derivatives, may be eligible for offset in the consolidated balance sheet and/or subject to master netting arrangements. The Company's derivative transactions with financial institution counterparties are generally executed under International Swaps and Derivative Association ("ISDA") master agreements which include "right of setoff" provisions. In such cases there is generally a legally enforceable right to offset recognized amounts and there may be an intention to settle such amounts on a net basis. Nonetheless, the Company does not generally offset financial instruments for financial reporting purposes.

Pursuant to the Company's agreements with certain of its derivative financial institution counterparties, the Company may receive collateral or post collateral, which may be in the form of cash or securities, based upon mark-to-mark positions. The Company has received collateral with a value of $75.7 million and $83.0 million as of June 30, 2023 and December 31, 2022, respectively.

Loans associated with a customer counterparty loan interest rate swap agreement may be subject to a make whole penalty upon termination of the agreement. The dollar amount of the make whole penalty varies based on the remaining term of the agreement and market rates at that time. The make whole penalty is secured by equity in the specific collateral securing the loan. The Company estimates the make whole penalty when determining if there is sufficient collateral to pay off both the potential make whole penalty and the outstanding loan balance at the origination of the loan. In the event of a customer default, the make whole penalty is capitalized into the existing loan balance; however, no guarantees can be made that the collateral will be sufficient to cover both the make whole provision and the outstanding loan balance at the time of foreclosure.

Fair Value Hedges

During the year ended December 31, 2020, the Company entered into a series of fair value hedge agreements to reduce the interest rate risk associated with the change in fair value of certain securities. The total notional amount of these agreements was $150 million and the amortized cost of the hedged assets was $313.7 million and $330.0 million as of June 30, 2023 and

December 31, 2022, respectively. During the six months ended June 30, 2023 and 2022, the fair value hedge agreements were effective. The gains or losses on these hedges are recognized in current earnings as fair value changes.

The following table summarizes the financial statement impact of these derivative instruments (in thousands):

	June 30, 2023		December 31, 2022
Investment securities available for sale, at fair value	$	(14,429)	$	(15,394)
Other assets	14,384		15,262
Cumulative adjustment to Interest and dividends on investment securities	45		132

During the six months ended June 30, 2023, the Company entered into a fair value hedge agreement to reduce the interest rate risk associated with the change in fair value of certain loans. The total notional amount of these agreements was $100 million. During the six months ended June 30, 2023, the fair value hedge agreements were effective. The gains or losses on these hedges are recognized in current earnings as fair value changes.

The following table summarizes the financial statement impact of these derivative instruments (in thousands):

	June 30, 2023
Gross loans	$	(2,066)
Other assets	2,050
Cumulative adjustment to Interest and fees on loans	16

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Employee Benefit Plans

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement, Noncash Expense [Abstract]

Employee Benefit Plans

Employee Benefit Plans

Restricted Shares, Restricted Stock Units, Performance Share Units

The Company records compensation expense with respect to restricted shares, restricted stock units and performance share units in an amount equal to the fair value of the common stock covered by each award on the date of grant. These awards become fully vested after various periods of continued employment from the respective dates of grant. The Company is entitled to an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted shares when the restrictions are released and the shares are issued. Compensation is being charged to expense over the respective vesting periods.

Restricted shares are forfeited if the awarded officer or employee terminates his employment with the Company prior to the lapsing of restrictions. The Company records forfeitures of restricted stock as treasury share repurchases and any compensation cost previously recognized is reversed in the period of forfeiture.  Recipients of restricted shares do not pay any cash consideration to the Company for the shares, and, except for restricted stock units and performance share units, have the right to vote all shares subject to such grant and receive all dividends with respect to such shares, whether or not the shares have vested.  For restricted shares and performance share units that have performance-based criteria, management has evaluated those criteria and has determined that, as of June 30, 2023, the criteria were probable of being met.

A summary of the Company’s restricted shares activity and related information is presented below:

	Six months ended June 30,
	2023			2022
	Restricted Awards	Average Market Price at Grant		Restricted Awards	Average Market Price at Grant
Outstanding at January 1	140,606	$	73.87	146,755	$	72.16
Granted	35,663	91.90		33,159	77.54
Vested	(43,417)	73.02		(41,635)	72.54
Outstanding at June 30	132,852	$	78.06	138,279	$	73.58

Information regarding stock-based compensation associated with restricted shares is provided in the following table (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Stock-based compensation expense associated with restricted shares	$	633	$	683	$	1,341	$	1,345
At period-end:					June 30, 2023
Unrecognized stock-based compensation expense associated with restricted shares					$	5,759
Weighted average period (in years) in which the above amount is expected to be recognized					3.15

Shares issued in conjunction with restricted stock awards are issued from available treasury shares. If no treasury shares are available, new shares would be issued from available authorized shares. During the six months ended June 30, 2023 and 2022, all shares issued in connection with restricted stock awards were issued from available treasury stock.

Benefit Plans

The Company provides retirement benefits to its employees through the City Holding Company 401(k) Plan and Trust (the “401(k) Plan”), which is intended to be compliant with Employee Retirement Income Security Act (ERISA) section 404(c). The Company also maintains a frozen defined benefit pension plan (the “Defined Benefit Plan”), which was inherited from the Company's acquisition of the plan sponsor (Horizon Bancorp, Inc.).

The following table presents the components of the Company's net periodic benefit cost, which is included in the line item "other expenses" in the consolidated statements of income (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Components of net periodic cost:
Interest cost	$	137	$	90	$	274	$	180
Expected return on plan assets	(210)		(221)		(420)		(442)
Net amortization and deferral	86		195		172		390
Net Periodic Pension Cost	$	13	$	64	$	26	$	128

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Credit-Related Financial Instruments

The Company is a party to certain financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers.  The Company has entered into agreements with certain customers to extend credit or provide a conditional commitment to provide payment on drafts presented in accordance with the terms of the underlying credit documents. The Company also provides overdraft protection to certain demand deposit customers that represent an unfunded commitment.  Overdraft protection commitments, which are included with other commitments below, are uncollateralized and are paid at the Company’s discretion.  Conditional commitments generally include standby and commercial letters of credit. Standby letters of credit represent an obligation of the Company to a designated third party contingent upon the failure of a customer of the Company to perform under the terms of the underlying contract between the customer and the third party. Commercial letters of credit are issued specifically to facilitate trade or commerce. Under the terms of a commercial letter of credit, drafts will be drawn when the underlying transaction is consummated, as intended, between the customer and a third party. The majority of the Company's commitments have variable interest rates. The funded portion of these financial instruments is reflected in the Company’s balance sheet, while the unfunded portion of these commitments is not reflected in the balance sheet.  

The table below presents a summary of the contractual obligations of the Company resulting from significant commitments (in thousands):

	June 30, 2023		December 31, 2022
Commitments to extend credit:
Home equity lines	$	249,262	$	232,295
Commercial real estate	58,494		53,226
Other commitments	304,940		257,222
Standby letters of credit	5,279		5,205
Commercial letters of credit	2,026		2,006

Loan commitments and standby and commercial letters of credit have credit risks essentially the same as those involved in extending loans to customers and are subject to the Company’s standard credit policies. Collateral is obtained based on management’s credit assessment of the customer. Management does not anticipate any material losses as a result of these commitments.

Litigation

In addition, the Company is engaged in various legal actions that it deems to be in the ordinary course of business. As these legal actions are resolved, the Company could realize positive and/or negative impact to its financial performance in the period in which these legal actions are ultimately resolved. There can be no assurance that current legal actions will have an immaterial impact on financial results, either positive or negative, or that no material legal actions may be presented in the future.

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Accumulated Other Comprehensive (Loss) Income

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Accumulated Other Comprehensive (Loss) Income

Accumulated Other Comprehensive (Loss) Income

The activity in accumulated other comprehensive (loss) income is presented in the tables below (in thousands). All amounts are shown net of tax, which is calculated using a combined federal and state income tax rate approximating 24%.

	Three months ended June 30,						Six months ended June 30,
	Defined						Defined
	Benefit		Securities				Benefit		Securities
	Pension		Available-				Pension		Available-
	Plan		-for-Sale		Total		Plan		-for-Sale		Total
2023
Beginning Balance	$	(3,422)	$	(112,967)	$	(116,389)	$	(3,422)	$	(128,066)	$	(131,488)
Other comprehensive (loss) income before reclassifications	—		(14,059)		(14,059)		—		1,628		1,628
Amounts reclassified from other comprehensive income	—		—		—		—		(588)		(588)
	—		(14,059)		(14,059)		—		1,040		1,040
Ending Balance	$	(3,422)	$	(127,026)	$	(130,448)	$	(3,422)	$	(127,026)	$	(130,448)
2022
Beginning Balance	$	(3,485)	$	(41,229)	$	(44,714)	$	(3,485)	$	17,745	$	14,260
Other comprehensive loss	—		(39,269)		(39,269)		—		(98,243)		(98,243)
	—		(39,269)		(39,269)		—		(98,243)		(98,243)
Ending Balance	$	(3,485)	$	(80,498)	$	(83,983)	$	(3,485)	$	(80,498)	$	(83,983)

	Amounts reclassified from Other Comprehensive (Loss) Income
	Three months ended				Six months ended				Affected line item
	June 30,				June 30,				in the Consolidated Statements
	2023		2022		2023		2022		of Income
Securities available-for-sale:
Net securities gains reclassified into earnings	$	—	$	—	$	773	$	—	Gains on sale of investment securities, net
Related income tax expense	—		—		(185)		—		Income tax expense
Net effect on accumulated other comprehensive (loss) income	$	—	$	—	$	588	$	—

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Earnings per Share

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Earnings per Share

Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share using the two class method (in thousands, except per share data): 

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Net income available to common shareholders	$	32,733	$	22,683	$	57,074	$	44,025
Less: earnings allocated to participating securities	(291)		(203)		(505)		(403)
Net earnings allocated to common shareholders	$	32,442	$	22,480	$	56,569	$	43,622
Distributed earnings allocated to common stock	$	9,668	$	8,837	$	19,336	$	17,671
Undistributed earnings allocated to common stock	22,774		13,643		37,233		25,951
Net earnings allocated to common shareholders	$	32,442	$	22,480	$	56,569	$	43,622
Average shares outstanding	14,994		14,888		14,897		14,930
Effect of dilutive securities:
Employee stock awards	18		21		22		24
Shares for diluted earnings per share	15,012		14,909		14,919		14,954
Basic earnings per share	$	2.16	$	1.51	$	3.80	$	2.92
Diluted earnings per share	$	2.16	$	1.51	$	3.79	$	2.92

Anti-dilutive options are not included in the computation of diluted earnings per share because the options’ exercise price was greater than the average market price of the common shares and therefore, the effect would have been anti-dilutive. Anti-dilutive options were not significant for any of the periods shown above.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability (an 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.  ASC Topic 820 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company 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, and 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 bases fair value of assets and liabilities on quoted market prices, prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.  If such information is not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters.  Valuation adjustments may be made to ensure that financial instruments are recorded at fair value.  These adjustments may include amounts to reflect counterparty creditworthiness, as well as unobservable parameters.  Any such valuation adjustments are applied consistently over time.  The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.  While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.  Furthermore, the reported fair value amounts have not been comprehensively revalued since the presentation dates, and therefore, estimates of fair value after the balance sheet date may differ significantly from the amounts presented herein.  A more detailed description of the valuation methodologies used for assets and liabilities

measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

Financial Assets and Liabilities

The Company used the following methods and significant assumptions to estimate fair value for financial assets and liabilities measured on a recurring basis.

Securities Available for Sale.  Securities available for sale are reported at fair value utilizing Level 1, Level 2, and Level 3 inputs.  The fair value of securities available for sale is determined by utilizing a market approach by obtaining quoted prices on nationally recognized securities exchanges (other than forced or distressed transactions) that occur in sufficient volume or matrix pricing, which is a mathematical technique used widely 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.  If such measurements are unavailable, the security is classified as Level 3.  Significant judgment is required to make this determination.

The Company utilizes a third party pricing service provider to value its Level 1 and Level 2 investment securities.  Annually, the Company obtains an independent auditor’s report from its third party pricing service provider regarding its controls over investment securities. On a quarterly basis, the Company reprices its debt securities with a third party that is independent of the primary pricing service provider to verify the reasonableness of the fair values.

Derivatives. Derivatives are reported at fair value utilizing Level 2 inputs.  The Company utilizes a market approach by obtaining dealer quotations to value its customer interest rate swaps.  The Company’s derivatives are included within "other assets" and "other liabilities" in the accompanying consolidated balance sheets. Derivative assets are typically secured through securities with financial counterparties or cross collateralization with a borrowing customer. Derivative liabilities are typically secured by the Company pledging securities to financial counterparties or, in the case of a borrowing customer, by the right of setoff. The Company considers factors such as the likelihood of default by itself and its counterparties, right of setoff, and remaining maturities in determining the appropriate fair value adjustments. All derivative counterparties approved by the Company's Asset and Liability Committee ("ALCO") are regularly reviewed, and appropriate business action is taken to adjust the exposure to certain counterparties, if necessary. Counterparty exposure is evaluated by netting positions that are subject to master netting agreements, as well as considering the amount of marketable collateral securing the position. This approach used to estimate impacted exposures to counterparties is also used by the Company to estimate its own credit risk in derivative liability positions. To date, no material losses have been incurred due to a counterparty's inability to pay any undercollateralized position. There was no significant change in the value of derivative assets and liabilities attributed to credit risk that would have resulted in a derivative credit risk valuation adjustment at June 30, 2023.

The Company may be required, from time to time, to measure certain financial assets and financial liabilities at fair value on a nonrecurring basis.  Financial assets measured at fair value on a nonrecurring basis include individually evaluated loans reported at the fair value of the underlying collateral if repayment is expected solely from the collateral.  Collateral values are estimated using Level 3 inputs based on observable market data for both real estate collateral and non-real estate collateral.  The following table presents assets and liabilities measured at fair value (in thousands):

	Total		Level 1		Level 2		Level 3		Total Gains (Losses)
June 30, 2023
Recurring fair value measurements
Financial Assets
Obligations of states and political subdivisions	$	225,601	$	—	$	225,601	$	—
Mortgage-backed securities:
U.S. Government agencies	1,158,458		—		1,158,458		—
Private label	6,790		—		4,712		2,078
Trust preferred securities	4,192		—		4,192		—
Corporate securities	24,892		—		24,892		—
Marketable equity securities	7,637		3,551		4,086		—
Certificates of deposit held for investment	249		—		249		—
Derivative assets	77,148		—		77,148		—
Financial Liabilities
Derivative liabilities	59,270		—		59,270		—
Nonrecurring fair value measurements
Non-Financial Assets
Other real estate owned	874		—		—		874		29
December 31, 2022
Recurring fair value measurements
Financial Assets
Obligations of states and political subdivisions	$	268,315	$	—	$	268,315	$	—
Mortgage-backed securities:
U.S. Government agencies	1,202,279		—		1,202,279		—
Private label	7,231		—		4,772		2,459
Trust preferred securities	3,828		—		3,828		—
Corporate securities	23,867		—		23,867		—
Marketable equity securities	7,569		3,851		3,718		—
Certificates of deposit held for investment	747		—		747		—
Derivative assets	81,838		—		81,838		—
Financial Liabilities
Derivative liabilities	65,056		—		65,056		—
Nonrecurring fair value measurements
Non-Financial Assets
Other real estate owned	909		—		—		909		(90)

The Company's financial assets and liabilities measured at fair value on a nonrecurring basis using significant unobservable inputs (Level 3) include individually evaluated loans that were remeasured and reported at fair value through a specific valuation allowance allocation of the allowance for credit losses based upon the fair value of the underlying collateral (in thousands).  The fair value of individually evaluated loans is estimated using one of several methods, including collateral value, liquidation value and discounted cash flows.  The significant unobservable inputs used in the fair value measurement of collateral for collateral-dependent individually evaluated loans primarily relate to discounts applied to the customers’ reported amount of collateral.  The amount of collateral discount depends upon the marketability of the underlying collateral.  During the six months ended June 30, 2023 and 2022, collateral discounts ranged from 10% to 30%. During the six months ended June 30, 2023 and 2022, the Company had no Level 2 financial assets and liabilities that were measured on a nonrecurring basis.

Non-Financial Assets and Liabilities

The Company has no non-financial assets or liabilities measured at fair value on a recurring basis.  Certain non-financial assets measured at fair value on a non-recurring basis include other real estate owned (“OREO”), which is measured at the lower of cost or fair value.

Fair Value of Financial Instruments

ASC Topic 825 “Financial Instruments,” as amended, requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value.  In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques.  Those techniques are significantly affected by the assumptions used, including discount rates and estimate of future cash flows.  In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. ASC Topic 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

The following table represents the estimates of fair value of financial instruments (in thousands). For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. For financial liabilities such as noninterest-bearing demand, interest-bearing demand and savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity.

	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
June 30, 2023
Assets:
Cash and cash equivalents	$	231,281	$	231,281	$	231,281	$	—	$	—
Securities available-for-sale	1,419,933		1,419,933		—		1,417,855		2,078
Marketable equity securities	7,637		7,637		3,551		4,086		—
Net loans	3,899,391		3,754,410		—		—		3,754,410
Accrued interest receivable	17,973		17,973		17,973		—		—
Derivative assets	77,148		77,148		—		77,148		—
Liabilities:
Deposits	5,015,063		4,577,560		3,641,957		935,603		—
Customer repurchase agreements	271,714		271,714		—		271,714		—
Long-term debt	100,000		100,000		—		100,000		—
Accrued interest payable	2,781		2,781		2,781		—		—
Derivative liabilities	59,270		59,270		—		59,270		—
December 31, 2022
Assets:
Cash and cash equivalents	$	200,000	$	200,000	$	200,000	$	—	$	—
Securities available-for-sale	1,505,520		1,505,520		—		1,503,061		2,459
Marketable equity securities	7,569		7,569		3,851		3,718		—
Net loans	3,629,150		3,491,318		—		—		3,491,318
Accrued interest receivable	18,287		18,287		18,287		—		—
Derivative assets	81,838		81,838		—		81,838		—
Liabilities:
Deposits	4,869,866		4,867,883		3,981,766		886,117		—
Short-term debt	290,964		290,964		—		290,964		—
Accrued interest payable	953		953		953		—		—
Derivative liabilities	65,057		65,057		—		65,057		—

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Pay vs Performance Disclosure
Net income available to common shareholders	$ 32,733	$ 22,683	$ 57,074	$ 44,025

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Insider Trading Arrangements	3 Months Ended
	Jun. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Acquisition and Preliminary Purchase Price Allocation (Tables)

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Asset Acquisition

The following table summarizes the consideration paid for Citizens and the amounts of the assets acquired and liabilities assumed as of the date of acquisition (in thousands):

Consideration:
Common stock	$	61,570
Stock option buyout	495
Cash	13
	62,078
Identifiable assets:
Cash and cash equivalents	14,013
Investment securities	41,008
FHLB stock	620
Loans	251,406
Fixed assets	3,237
Bank owned life insurance	2,966
Deferred tax assets, net	1,481
Other assets	5,722
Total identifiable assets	320,453
Identifiable liabilities:
Deposits	299,250
Short-term borrowings	6,500
Other liabilities	1,361
Total identifiable liabilities	307,111
Net identifiable assets (liabilities)	13,342
Goodwill	40,458
Core deposit intangible	8,278
	$	62,078

Schedule of Goodwill

The following table summarizes adjustments to goodwill subsequent to December 31, 2022 (in thousands):

	Goodwill
Balance at December 31, 2022	$	108,941
Adjustment to goodwill acquired in conjunction with the acquisition of Citizens	40,458
Balance at June 30, 2023	$	149,399

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Investments (Tables)

6 Months Ended

Jun. 30, 2023

Investments [Abstract]

Debt Securities, Available-for-sale

	June 30, 2023								December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Securities available-for-sale:
Obligations of states and
political subdivisions	$	245,922	$	160	$	20,481	$	225,601	$	292,293	$	346	$	24,324	$	268,315
Mortgage-backed securities:
U.S. government agencies	1,300,980		214		142,736		1,158,458		1,342,666		299		140,686		1,202,279
Private label	7,288		—		498		6,790		7,695		—		464		7,231
Trust preferred securities	4,595		—		403		4,192		4,590		—		762		3,828
Corporate securities	28,085		—		3,193		24,892		26,620		—		2,753		23,867
Total Securities Available-for-Sale	$	1,586,870	$	374	$	167,311	$	1,419,933	$	1,673,864	$	645	$	168,989	$	1,505,520

Gross Unrealized Losses And Fair Value Of Investments

The following table shows the gross unrealized losses and fair value of the Company’s investments aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

	June 30, 2023
	Less Than Twelve Months				Twelve Months or Greater				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Securities available-for-sale:
Obligations of states and political subdivisions	$	43,264	$	1,102	$	169,087	$	19,379	$	212,351	$	20,481
Mortgage-backed securities:
U.S. Government agencies	105,588		16,261		746,989		126,475		852,577		142,736
Private label	—		—		6,690		498		6,690		498
Trust preferred securities	—		—		4,192		403		4,192		403
Corporate securities	11,204		1,359		13,688		1,834		24,892		3,193
Total available-for-sale	$	160,056	$	18,722	$	940,646	$	148,589	$	1,100,702	$	167,311

	December 31, 2022
	Less Than Twelve Months				Twelve Months or Greater				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Securities available-for-sale:
Obligations of states and political subdivisions	$	203,173	$	21,929	$	13,359	$	2,395	$	216,532	$	24,324
Mortgage-backed securities:
U.S. Government agencies	533,611		50,268		376,778		90,418		910,389		140,686
Private label	7,126		464		—		—		7,126		464
Trust preferred securities	—		—		3,828		762		3,828		762
Corporate securities	22,972		2,648		895		105		23,867		2,753
Total available-for-sale	$	766,882	$	75,309	$	394,860	$	93,680	$	1,161,742	$	168,989

Amortized Cost And Estimated Fair Value Of Debt Securities By Contractual Maturity

The amortized cost and estimated fair value of debt securities at June 30, 2023, by contractual maturity, is shown in the following table (in thousands).  Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.  Mortgage-backed securities have been allocated to their respective maturity groupings based on their contractual maturity.

	Amortized Cost		Estimated Fair Value
Available-for-Sale Debt Securities
Due in one year or less	$	1,814	$	1,796
Due after one year through five years	51,378		47,776
Due after five years through ten years	511,736		472,381
Due after ten years	1,021,942		897,980
Total	$	1,586,870	$	1,419,933

Gross Gains And Losses Realized

Gross gains and gross losses recognized by the Company from investment security transactions are summarized in the table below (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Gross realized gains on securities sold	$	—	$	—	$	975	$	—
Gross realized losses on securities sold	—		—		(202)		—
Net investment security gains	$	—	$	—	$	773	$	—
Gross unrealized gains recognized on equity securities still held	$	8	$	2	$	368	$	42
Gross unrealized losses recognized on equity securities still held	(302)		(603)		(301)		(1,366)
Net unrealized gains recognized on equity securities still held	$	(294)	$	(601)	$	67	$	(1,324)

XML

Loans (Tables)

6 Months Ended

Jun. 30, 2023

Loans and Leases Receivable, Net Amount [Abstract]

Summary of Major Classifications for Loans

The following table summarizes the Company’s major classifications for loans (in thousands):

	June 30, 2023		December 31, 2022
Commercial and industrial	$	417,847	$	373,890
1-4 Family	123,701		116,192
Hotels	324,745		340,404
Multi-family	191,483		174,786
Non Residential Non-Owner Occupied	673,921		585,964
Non Residential Owner Occupied	222,852		174,961
Commercial real estate	1,536,702		1,392,307
Residential real estate	1,746,618		1,693,523
Home equity	151,012		134,317
Consumer	65,201		48,806
Demand deposit account (DDA) overdrafts	4,762		3,415
Gross loans	3,922,142		3,646,258
Allowance for credit losses	(22,751)		(17,108)
Net loans	$	3,899,391	$	3,629,150
Construction loans included in:
Commercial real estate	$	3,361	$	4,130
Residential real estate	20,470		21,122

XML

Allowance For Credit Losses (Tables)

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

Financing Receivable, Allowance for Credit Loss

	Beginning Balance		Impact of Adopting ASU 2022-02		PCD Loan Reserves		Charge-offs		Recoveries		Provision for (recovery of) credit losses		Ending Balance
Six months ended June 30, 2023
Commercial and industrial	$	3,568	12		—		(69)		$	169	$	650	$	4,330
1-4 Family	566		(1)		—		(80)		30		83		598
Hotels	2,332		—		—		(40)		—		(159)		2,133
Multi-family	380		—		500		—		—		129		1,009
Non Residential Non-Owner Occupied	2,019		—		1,536		—		156		1,075		4,786
Non Residential Owner Occupied	1,315		—		775		—		—		288		2,378
Commercial real estate	6,612		(1)		2,811		(120)		186		1,416		10,904
Residential real estate	5,427		(138)		—		(52)		15		321		5,573
Home equity	290		(46)		—		(267)		16		415		408
Consumer	110		(2)		—		(171)		51		346		334
DDA overdrafts	1,101		—		—		(807)		713		195		1,202
	$	17,108	$	(175)	$	2,811	$	(1,486)	$	1,150	$	3,343	$	22,751
Six months ended June 30, 2022
Commercial and industrial	$	3,480	—		—		(34)		$	91	$	(18)	$	3,519
1-4 Family	598		—		—		(24)		34		(34)		574
Hotels	2,426		—		—		—		—		82		2,508
Multi-family	483		—		—		—		—		(23)		460
Non Residential Non-Owner Occupied	2,319		—		—		—		44		(267)		2,096
Non Residential Owner Occupied	1,485		—		—		—		—		(90)		1,395
Commercial real estate	7,311		—		—		(24)		78		(332)		7,033
Residential real estate	5,716		—		—		(106)		49		(665)		4,994
Home equity	517		—		—		(19)		20		(180)		338
Consumer	106		—		—		(32)		47		(43)		78
DDA Overdrafts	1,036		—		—		(1,235)		770		482		1,053
	$	18,166	$	—	$	—	$	(1,450)	$	1,055	$	(756)	$	17,015

	Beginning Balance		Impact of Adopting ASU 2022-02		PCD Loan Reserves		Charge-offs		Recoveries		Provision for (recovery of) credit losses		Ending Balance
Three months ended June 30, 2023
Commercial and industrial	$	4,289	—		—		(69)		$	86	$	24	$	4,330
1-4 Family	613		—		—		(77)		16		46		598
Hotels	2,184		—		—		(40)		—		(11)		2,133
Multi-family	1,027		—		—		—		—		(18)		1,009
Non Residential Non-Owner Occupied	4,924		—		—		—		12		(150)		4,786
Non Residential Owner Occupied	2,437		—		—		—		—		(59)		2,378
Commercial real estate	11,185		—		—		(117)		28		(192)		10,904
Residential real estate	5,481		—		—		(20)		5		107		5,573
Home equity	400		—		—		(200)		12		196		408
Consumer	371		—		—		(109)		28		44		334
DDA overdrafts	998		—		—		(357)		315		246		1,202
	$	22,724	$	—	$	—	$	(872)	$	474	$	425	$	22,751
Three months ended June 30, 2022
Commercial and industrial	$	3,458	—		—		—		$	32	$	29	$	3,519
1-4 Family	574		—		—		(24)		5		19		574
Hotels	2,545		—		—		—		—		(37)		2,508
Multi-family	477		—		—		—		—		(17)		460
Non Residential Non-Owner Occupied	2,281		—		—		—		20		(205)		2,096
Non Residential Owner Occupied	1,382		—		—		—		—		13		1,395
Commercial real estate	7,259		—		—		(24)		25		(227)		7,033
Residential real estate	5,039		—		—		(56)		4		7		4,994
Home equity	410		—		—		(19)		3		(56)		338
Consumer	86		—		—		(9)		19		(18)		78
DDA Overdrafts	1,028		—		—		(604)		364		265		1,053
	$	17,280	$	—	$	—	$	(712)	$	447	$	—	$	17,015

Financing Receivable, Nonaccrual

The following table presents the amortized cost basis of loans on non-accrual status and loans past due over 90 days still accruing as of June 30, 2023 (in thousands):

	Non-accrual With No		Non-accrual With		Loans Past Due
	Allowance for		Allowance for		Over 90 Days
	Credit Losses		Credit Losses		Still Accruing
Commercial & Industrial	$	—	$	741	$	—
1-4 Family	—		742		—
Hotels	—		—		—
Multi-family	—		—		—
Non Residential Non-Owner Occupied	—		753		—
Non Residential Owner Occupied	—		326		—
Commercial Real Estate	—		1,821		—
Residential Real Estate	—		2,774		208
Home Equity	—		24		7
Consumer	—		35		—
Total	$	—	$	5,395	$	215

The following table presents the amortized cost basis of loans on non-accrual status and loans past due over 90 days still accruing as of December 31, 2022 (in thousands):

	Non-accrual With No		Non-accrual With		Loans Past Due
	Allowance for		Allowance for		Over 90 Days
	Credit Losses		Credit Losses		Still Accruing
Commercial & Industrial	$	—	$	1,015	$	—
1-4 Family	—		937		—
Hotels	—		115		—
Multi-family	—		—		—
Non Residential Non-Owner Occupied	—		816		—
Non Residential Owner Occupied	—		298		—
Commercial Real Estate	—		2,166		—
Residential Real Estate	228		1,741		164
Home Equity	—		55		—
Consumer	—		—		23
Total	$	228	$	4,977	$	187

Financing Receivable, Past Due

The following tables present the aging of the amortized cost basis in past-due loans as of June 30, 2023 and December 31, 2022 by class of loan (in thousands):

	June 30, 2023
	30-59		60-89		90+		Total		Current		Non-		Total
	Past Due		Past Due		Past Due		Past Due		Loans		accrual		Loans
Commercial and industrial	$	117	$	25	$	—	$	142	$	416,964	$	741	$	417,847
1-4 Family	105		—		—		105		122,854		742		123,701
Hotels	—		—		—		—		324,745		—		324,745
Multi-family	—		—		—		—		191,483		—		191,483
Non Residential Non-Owner Occupied	131		1		—		132		673,036		753		673,921
Non Residential Owner Occupied	—		—		—		—		222,526		326		222,852
Commercial real estate	236		1		—		237		1,534,644		1,821		1,536,702
Residential real estate	5,330		346		208		5,884		1,737,960		2,774		1,746,618
Home Equity	688		90		7		785		150,203		24		151,012
Consumer	57		—		—		57		65,109		35		65,201
Overdrafts	332		9		—		341		4,421		—		4,762
Total	$	6,760	$	471	$	215	$	7,446	$	3,909,301	$	5,395	$	3,922,142

	December 31, 2022
	30-59		60-89		90+		Total		Current		Non-		Total
	Past Due		Past Due		Past Due		Past Due		Loans		accrual		Loans
Commercial and industrial	$	201	$	33	$	—	$	234	$	372,641	$	1,015	$	373,890
1-4 Family	17		—		—		17		115,238		937		116,192
Hotels	—		—		—		—		340,289		115		340,404
Multi-family	—		—		—		—		174,786		—		174,786
Non Residential Non-Owner Occupied	—		—		—		—		585,148		816		585,964
Non Residential Owner Occupied	505		188		—		693		173,970		298		174,961
Commercial real estate	522		188		—		710		1,389,431		2,166		1,392,307
Residential real estate	6,843		84		164		7,091		1,684,463		1,969		1,693,523
Home Equity	622		28		—		650		133,612		55		134,317
Consumer	52		25		23		100		48,706		—		48,806
Overdrafts	386		5		—		391		3,024		—		3,415
Total	$	8,626	$	363	$	187	$	9,176	$	3,631,877	$	5,205	$	3,646,258

Financing Receivable, Credit Quality Indicators

Based on the most recent analysis performed, the risk category of loans by class of loans at June 30, 2023 and December 31, 2022 is as follows (in thousands), with the loans acquired from Citizens categorized by their origination date:

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial and industrial
Pass	$	42,882	$	51,976	$	89,094	$	57,019	$	24,315	$	20,250	$	100,274	$	385,810
Special mention	369		1,566		785		2,770		—		—		21,849		27,339
Substandard	—		946		146		849		1,078		1,636		43		4,698
Total	$	43,251	$	54,488	$	90,025	$	60,638	$	25,393	$	21,886	$	122,166	$	417,847
YTD Gross Charge-offs	$	—	$	—	$	33	$	—	$	—	$	—	$	36	$	69

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial and industrial
Pass	$	51,268	$	91,097	$	60,251	$	26,356	$	19,497	$	6,917	$	109,645	$	365,031
Special mention	—		—		392		9		—		19		3,245		3,665
Substandard	955		203		1,025		1,175		224		1,533		79		5,194
Total	$	52,223	$	91,300	$	61,668	$	27,540	$	19,721	$	8,469	$	112,969	$	373,890

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
1-4 Family
Pass	$	14,116	$	32,420	$	19,138	$	11,962	$	8,249	$	25,096	$	9,840	$	120,821
Special mention	—		223		—		111		—		777		—		1,111
Substandard	—		79		—		257		48		1,385		—		1,769
Total	$	14,116	$	32,722	$	19,138	$	12,330	$	8,297	$	27,258	$	9,840	$	123,701
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	80	$	—	$	80

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
1-4 Family
Pass	$	31,331	$	21,640	$	12,565	$	8,609	$	4,826	$	22,949	$	11,107	$	113,027
Special mention	228		—		115		—		—		836		—		1,179
Substandard	83		—		264		56		—		1,583		—		1,986
Total	$	31,642	$	21,640	$	12,944	$	8,665	$	4,826	$	25,368	$	11,107	$	116,192

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
Hotels
Pass	$	8,517	$	83,971	$	34,707	$	3,568	$	59,410	$	99,832	$	310	$	290,315
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		4,075		23,919		6,436		—		34,430
Total	$	8,517	$	83,971	$	34,707	$	7,643	$	83,329	$	106,268	$	310	$	324,745
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	40	$	—	$	40

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Hotels
Pass	$	85,590	$	35,849	$	12,275	$	60,429	$	14,921	$	90,686	$	323	$	300,073
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		3,593		24,229		—		12,509		—		40,331
Total	$	85,590	$	35,849	$	15,868	$	84,658	$	14,921	$	103,195	$	323	$	340,404

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
Multi-family
Pass	$	2,893	$	21,103	$	28,583	$	65,180	$	39,785	$	32,616	$	1,323	$	191,483
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Total	$	2,893	$	21,103	$	28,583	$	65,180	$	39,785	$	32,616	$	1,323	$	191,483
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Multi-family
Pass	$	13,761	$	21,312	$	65,542	$	37,698	$	2,189	$	33,560	$	724	$	174,786
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Total	$	13,761	$	21,312	$	65,542	$	37,698	$	2,189	$	33,560	$	724	$	174,786

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
Non Residential Non-Owner Occupied
Pass	$	30,872	$	146,949	$	123,450	$	76,398	$	72,911	$	179,771	$	8,213	$	638,564
Special mention	—		—		106		1,821		170		25,094		76		27,267
Substandard	1,254		—		579		2,451		1,404		2,402		—		8,090
Total	$	32,126	$	146,949	$	124,135	$	80,670	$	74,485	$	207,267	$	8,289	$	673,921
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Non Residential Non-Owner Occupied
Pass	$	110,501	$	108,290	$	89,943	$	68,027	$	87,413	$	113,287	$	2,781	$	580,242
Special mention	—		110		170		176		—		—		—		456
Substandard	—		601		—		1,330		2,089		1,244		2		5,266
Total	$	110,501	$	109,001	$	90,113	$	69,533	$	89,502	$	114,531	$	2,783	$	585,964

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
Non Residential Owner Occupied
Pass	$	19,237	$	31,842	$	44,475	$	17,755	$	23,595	$	60,487	$	3,722	$	201,113
Special mention	—		—		2,709		1,115		2,078		465		—		6,367
Substandard	—		929		387		108		1,795		11,039		1,114		15,372
Total	$	19,237	$	32,771	$	47,571	$	18,978	$	27,468	$	71,991	$	4,836	$	222,852
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Non Residential Owner Occupied
Pass	$	21,782	$	36,186	$	17,216	$	22,274	$	17,622	$	39,861	$	3,238	$	158,179
Special mention	—		—		—		329		—		493		113		935
Substandard	943		193		110		2,479		772		10,350		1,000		15,847
Total	$	22,725	$	36,379	$	17,326	$	25,082	$	18,394	$	50,704	$	4,351	$	174,961

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
Total
Pass	$	75,635	$	316,284	$	250,353	$	174,863	$	203,949	$	397,803	$	23,409	$	1,442,296
Special mention	—		223		2,815		3,047		2,248		26,336		76		34,745
Substandard	1,254		1,008		966		6,891		27,166		21,262		1,114		59,661
Total	$	76,889	$	317,515	$	254,134	$	184,801	$	233,363	$	445,401	$	24,599	$	1,536,702
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	120	$	—	$	120
													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Total
Pass	$	262,965	$	223,277	$	197,541	$	197,037	$	126,971	$	300,343	$	18,173	$	1,326,307
Special mention	228		110		285		505		—		1,329		113		2,570
Substandard	1,026		794		3,967		28,094		2,861		25,686		1,002		63,430
Total	$	264,219	$	224,181	$	201,793	$	225,636	$	129,832	$	327,358	$	19,288	$	1,392,307
													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Residential real estate
Performing	$	104,691	$	414,599	$	328,118	$	263,028	$	116,507	$	438,035	$	78,866	$	1,743,844
Non-performing	—		—		722		92		726		899		335		2,774
Total	$	104,691	$	414,599	$	328,840	$	263,120	$	117,233	$	438,934	$	79,201	$	1,746,618
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	52	$	—	$	52
													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Residential real estate
Performing	$	405,059	$	336,462	$	270,197	$	122,559	$	86,317	$	382,652	$	88,308	$	1,691,554
Non-performing	—		207		—		755		79		738		190		1,969
Total	$	405,059	$	336,669	$	270,197	$	123,314	$	86,396	$	383,390	$	88,498	$	1,693,523

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Home equity
Performing	$	11,868	$	15,532	$	6,744	$	4,316	$	2,700	$	4,981	$	104,847	$	150,988
Non-performing	—		—		—		—		—		—		24		24
Total	$	11,868	$	15,532	$	6,744	$	4,316	$	2,700	$	4,981	$	104,871	$	151,012
YTD Gross Charge-offs	$	—	$	32	$	—	$	—	$	—	$	35	$	200	$	267

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Home equity
Performing	$	16,670	$	7,394	$	5,000	$	3,035	$	1,823	$	5,116	$	95,224	$	134,262
Non-performing	—		—		—		—		—		—		55		55
Total	$	16,670	$	7,394	$	5,000	$	3,035	$	1,823	$	5,116	$	95,279	$	134,317

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Consumer
Performing	$	24,255	$	23,235	$	6,204	$	4,174	$	3,282	$	2,471	$	1,544	$	65,165
Non-performing	—		—		—		—		—		36		—		36
Total	$	24,255	$	23,235	$	6,204	$	4,174	$	3,282	$	2,507	$	1,544	$	65,201
YTD Gross Charge-offs	$	—	$	—	$	36	$	—	$	3	$	127	$	5	$	171

													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
December 31, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Consumer
Performing	$	25,296	$	7,954	$	5,482	$	4,299	$	2,246	$	2,064	$	1,465	$	48,806
Non-performing	—		—		—		—		—		—		—		—
Total	$	25,296	$	7,954	$	5,482	$	4,299	$	2,246	$	2,064	$	1,465	$	48,806

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Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value Of Derivative Instruments

The following table summarizes the notional and fair value of these derivative instruments (in thousands):

	June 30, 2023				December 31, 2022
	Notional Amount		Fair Value		Notional Amount		Fair Value
Non-hedging interest rate derivatives:
Customer counterparties:
Loan interest rate swap - assets	$	27,463	$	1,458	$	28,238	$	1,298
Loan interest rate swap - liabilities	586,928		57,812		619,150		63,758
Non-hedging interest rate derivatives:
Financial institution counterparties:
Loan interest rate swap - assets	604,928		59,204		637,150		65,217
Loan interest rate swap - liabilities	27,463		1,458		28,238		1,298

Change In Fair Value Of Derivative Instruments

The following table summarizes the change in fair value of these derivative instruments (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Change in Fair Value Non-Hedging Interest Rate Derivatives:
Other income (expense) - derivative assets	$	10,653	$	15,448	$	(5,477)	$	18,524
Other (expense) income - derivative liabilities	(10,653)		(15,448)		5,477		(18,524)
Other income (expense) - derivative liabilities	131		311		(67)		888

Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location

The following table summarizes the financial statement impact of these derivative instruments (in thousands):

	June 30, 2023		December 31, 2022
Investment securities available for sale, at fair value	$	(14,429)	$	(15,394)
Other assets	14,384		15,262
Cumulative adjustment to Interest and dividends on investment securities	45		132

Schedule of Derivative Assets at Fair Value

The following table summarizes the financial statement impact of these derivative instruments (in thousands):

	June 30, 2023
Gross loans	$	(2,066)
Other assets	2,050
Cumulative adjustment to Interest and fees on loans	16

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Employee Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement, Noncash Expense [Abstract]

Restricted Shares Activity And Related Information

A summary of the Company’s restricted shares activity and related information is presented below:

	Six months ended June 30,
	2023			2022
	Restricted Awards	Average Market Price at Grant		Restricted Awards	Average Market Price at Grant
Outstanding at January 1	140,606	$	73.87	146,755	$	72.16
Granted	35,663	91.90		33,159	77.54
Vested	(43,417)	73.02		(41,635)	72.54
Outstanding at June 30	132,852	$	78.06	138,279	$	73.58

Information regarding stock-based compensation associated with restricted shares is provided in the following table (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Stock-based compensation expense associated with restricted shares	$	633	$	683	$	1,341	$	1,345
At period-end:					June 30, 2023
Unrecognized stock-based compensation expense associated with restricted shares					$	5,759
Weighted average period (in years) in which the above amount is expected to be recognized					3.15

Pension and Other Postretirement Benefits

The following table presents the components of the Company's net periodic benefit cost, which is included in the line item "other expenses" in the consolidated statements of income (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Components of net periodic cost:
Interest cost	$	137	$	90	$	274	$	180
Expected return on plan assets	(210)		(221)		(420)		(442)
Net amortization and deferral	86		195		172		390
Net Periodic Pension Cost	$	13	$	64	$	26	$	128

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule Of Contractual Obligations From Significant Commitments

The table below presents a summary of the contractual obligations of the Company resulting from significant commitments (in thousands):

	June 30, 2023		December 31, 2022
Commitments to extend credit:
Home equity lines	$	249,262	$	232,295
Commercial real estate	58,494		53,226
Other commitments	304,940		257,222
Standby letters of credit	5,279		5,205
Commercial letters of credit	2,026		2,006

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Accumulated Other Comprehensive (Loss) Income (Tables)

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Schedule of Changes In Each Component of Accumulated Other Comprehensive Income

The activity in accumulated other comprehensive (loss) income is presented in the tables below (in thousands). All amounts are shown net of tax, which is calculated using a combined federal and state income tax rate approximating 24%.

	Three months ended June 30,						Six months ended June 30,
	Defined						Defined
	Benefit		Securities				Benefit		Securities
	Pension		Available-				Pension		Available-
	Plan		-for-Sale		Total		Plan		-for-Sale		Total
2023
Beginning Balance	$	(3,422)	$	(112,967)	$	(116,389)	$	(3,422)	$	(128,066)	$	(131,488)
Other comprehensive (loss) income before reclassifications	—		(14,059)		(14,059)		—		1,628		1,628
Amounts reclassified from other comprehensive income	—		—		—		—		(588)		(588)
	—		(14,059)		(14,059)		—		1,040		1,040
Ending Balance	$	(3,422)	$	(127,026)	$	(130,448)	$	(3,422)	$	(127,026)	$	(130,448)
2022
Beginning Balance	$	(3,485)	$	(41,229)	$	(44,714)	$	(3,485)	$	17,745	$	14,260
Other comprehensive loss	—		(39,269)		(39,269)		—		(98,243)		(98,243)
	—		(39,269)		(39,269)		—		(98,243)		(98,243)
Ending Balance	$	(3,485)	$	(80,498)	$	(83,983)	$	(3,485)	$	(80,498)	$	(83,983)

Schedule of Amounts Reclassified Out Of Accumulated Other Comprehensive Income

	Amounts reclassified from Other Comprehensive (Loss) Income
	Three months ended				Six months ended				Affected line item
	June 30,				June 30,				in the Consolidated Statements
	2023		2022		2023		2022		of Income
Securities available-for-sale:
Net securities gains reclassified into earnings	$	—	$	—	$	773	$	—	Gains on sale of investment securities, net
Related income tax expense	—		—		(185)		—		Income tax expense
Net effect on accumulated other comprehensive (loss) income	$	—	$	—	$	588	$	—

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Earnings per Share (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Schedule Of Computation Of Basic And Diluted Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share using the two class method (in thousands, except per share data): 

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Net income available to common shareholders	$	32,733	$	22,683	$	57,074	$	44,025
Less: earnings allocated to participating securities	(291)		(203)		(505)		(403)
Net earnings allocated to common shareholders	$	32,442	$	22,480	$	56,569	$	43,622
Distributed earnings allocated to common stock	$	9,668	$	8,837	$	19,336	$	17,671
Undistributed earnings allocated to common stock	22,774		13,643		37,233		25,951
Net earnings allocated to common shareholders	$	32,442	$	22,480	$	56,569	$	43,622
Average shares outstanding	14,994		14,888		14,897		14,930
Effect of dilutive securities:
Employee stock awards	18		21		22		24
Shares for diluted earnings per share	15,012		14,909		14,919		14,954
Basic earnings per share	$	2.16	$	1.51	$	3.80	$	2.92
Diluted earnings per share	$	2.16	$	1.51	$	3.79	$	2.92

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Schedule Of Assets And Liabilities Measured At Fair Value On A Recurring And Nonrecurring Basis

The following table presents assets and liabilities measured at fair value (in thousands):

	Total		Level 1		Level 2		Level 3		Total Gains (Losses)
June 30, 2023
Recurring fair value measurements
Financial Assets
Obligations of states and political subdivisions	$	225,601	$	—	$	225,601	$	—
Mortgage-backed securities:
U.S. Government agencies	1,158,458		—		1,158,458		—
Private label	6,790		—		4,712		2,078
Trust preferred securities	4,192		—		4,192		—
Corporate securities	24,892		—		24,892		—
Marketable equity securities	7,637		3,551		4,086		—
Certificates of deposit held for investment	249		—		249		—
Derivative assets	77,148		—		77,148		—
Financial Liabilities
Derivative liabilities	59,270		—		59,270		—
Nonrecurring fair value measurements
Non-Financial Assets
Other real estate owned	874		—		—		874		29
December 31, 2022
Recurring fair value measurements
Financial Assets
Obligations of states and political subdivisions	$	268,315	$	—	$	268,315	$	—
Mortgage-backed securities:
U.S. Government agencies	1,202,279		—		1,202,279		—
Private label	7,231		—		4,772		2,459
Trust preferred securities	3,828		—		3,828		—
Corporate securities	23,867		—		23,867		—
Marketable equity securities	7,569		3,851		3,718		—
Certificates of deposit held for investment	747		—		747		—
Derivative assets	81,838		—		81,838		—
Financial Liabilities
Derivative liabilities	65,056		—		65,056		—
Nonrecurring fair value measurements
Non-Financial Assets
Other real estate owned	909		—		—		909		(90)

Schedule Of Estimates Of Fair Value Of Financial Instruments

The following table represents the estimates of fair value of financial instruments (in thousands). For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. For financial liabilities such as noninterest-bearing demand, interest-bearing demand and savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity.

	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
June 30, 2023
Assets:
Cash and cash equivalents	$	231,281	$	231,281	$	231,281	$	—	$	—
Securities available-for-sale	1,419,933		1,419,933		—		1,417,855		2,078
Marketable equity securities	7,637		7,637		3,551		4,086		—
Net loans	3,899,391		3,754,410		—		—		3,754,410
Accrued interest receivable	17,973		17,973		17,973		—		—
Derivative assets	77,148		77,148		—		77,148		—
Liabilities:
Deposits	5,015,063		4,577,560		3,641,957		935,603		—
Customer repurchase agreements	271,714		271,714		—		271,714		—
Long-term debt	100,000		100,000		—		100,000		—
Accrued interest payable	2,781		2,781		2,781		—		—
Derivative liabilities	59,270		59,270		—		59,270		—
December 31, 2022
Assets:
Cash and cash equivalents	$	200,000	$	200,000	$	200,000	$	—	$	—
Securities available-for-sale	1,505,520		1,505,520		—		1,503,061		2,459
Marketable equity securities	7,569		7,569		3,851		3,718		—
Net loans	3,629,150		3,491,318		—		—		3,491,318
Accrued interest receivable	18,287		18,287		18,287		—		—
Derivative assets	81,838		81,838		—		81,838		—
Liabilities:
Deposits	4,869,866		4,867,883		3,981,766		886,117		—
Short-term debt	290,964		290,964		—		290,964		—
Accrued interest payable	953		953		953		—		—
Derivative liabilities	65,057		65,057		—		65,057		—

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Background and Basis of Presentation (Details)	6 Months Ended
	Jun. 30, 2023 store segment	Mar. 10, 2023
Entity Location [Line Items]
Number of reportable segments (in segments) | segment	1
Citizens Commerce Bancshares, Inc.
Entity Location [Line Items]
Business Acquisition, Percentage of Voting Interests Acquired		100.00%
City National
Entity Location [Line Items]
Number of stores (in stores)	99
WEST VIRGINIA | City National
Entity Location [Line Items]
Number of stores (in stores)	58
KENTUCKY | City National
Entity Location [Line Items]
Number of stores (in stores)	24
VIRGINIA | City National
Entity Location [Line Items]
Number of stores (in stores)	13
OHIO | City National
Entity Location [Line Items]
Number of stores (in stores)	4

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Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Accounting Changes and Error Corrections [Abstract]
Equity, Attributable to Parent	$ 636,192	$ 651,050	$ 578,027	$ 591,993	$ 632,430	$ 681,105

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Acquisition and Preliminary Purchase Price Allocation - Additional Information (Details) - USD ($) $ in Thousands, shares in Millions		3 Months Ended		6 Months Ended
	Mar. 10, 2023	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Asset Acquisition [Line Items]
Acquisition of Citizens Commerce Bancshares, Inc.				$ 62,078
Non-Impaired Loans	$ 246,400
Merger related expenses		$ 0	$ 0	5,645	$ 0
Citizens Commerce Bancshares, Inc.
Asset Acquisition [Line Items]
Stock Issued During Period, Shares, Acquisitions	0.7
Acquisition of Citizens Commerce Bancshares, Inc.	$ 62,100
Business Combination, Assets Acquired With Credit Deterioration	4,900
Business Combination, Acquired Receivables, Gross Contractual Amount	8,500
Accounts Receivable, Allowance for Credit Loss	3,600
Time Deposits, Premium (Discount)	$ 600
Amortization Period Of Time Deposits Premium	5 years
Allowance for credit losses acquired	$ 2,000
Merger related expenses				5,600
Professional Fees				1,600
Severance Costs				1,400
Data Processing Costs				1,300
Citizens Commerce Bancshares, Inc. | Core Deposits
Asset Acquisition [Line Items]
Core deposit intangible	$ 8,278	8,278	$ 0	$ 8,278	$ 0
Finite-Lived Intangible Assets, Remaining Amortization Period	10 years
Gains on sale of investment securities, net		$ 41,000
Citizens Commerce Bancshares, Inc. | Citizens Commerce Bancshares, Inc.
Asset Acquisition [Line Items]
Equity ownership positions in the community bank holding companies (percent)	100.00%

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Acquisition and Preliminary Purchase Price Allocation - Acquisition And Preliminary Purchase Price Allocation (Details) - USD ($) $ in Thousands	Mar. 10, 2023	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Asset Acquisition [Line Items]
Cash and cash equivalents		$ 231,281	$ 200,000
Bank owned life insurance		117,173	120,674
Other assets		148,333	149,263
Deposits		5,015,063	4,869,866
Other liabilities		123,865	$ 139,424
Citizens Commerce Bancshares, Inc.
Asset Acquisition [Line Items]
Common stock	$ 61,570
Stock option buyout	495
Acquisition of Citizens Commerce Bancshares, Inc.	13
Consideration	62,078
Cash and cash equivalents	14,013
Investment securities	41,008
FHLB stock	620
Loans	251,406
Fixed assets	3,237
Bank owned life insurance	2,966
Deferred tax assets, net	1,481
Other assets	5,722
Total identifiable assets	320,453	320,453		$ 0
Deposits	299,250
Short-term borrowings	6,500
Other liabilities	1,361
Total identifiable liabilities	307,111	(307,111)		0
Net identifiable assets (liabilities)	13,342
Goodwill	40,458	40,458		0
Total	62,078
Citizens Commerce Bancshares, Inc. | Core Deposits
Asset Acquisition [Line Items]
Core deposit intangible	$ 8,278	$ 8,278		$ 0

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Acquisition and Preliminary Purchase Price Allocation - Goodwill (Details)	6 Months Ended
	Jun. 30, 2023 USD ($)
Goodwill [Roll Forward]
Balance at December 31, 2022	$ 108,941
Goodwill, Acquired During Period	40,458
Balance at June 30, 2023	$ 149,399

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Investments (Narrative) (Details) - USD ($)	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Schedule of Investments [Line Items]
Federal Home Loan Bank Stock and Federal Reserve Bank Stock	$ 15,500,000		$ 21,400,000
Certificates of deposit, at carrying value	200,000		700,000
Non-governmental issues exceeding 10% shareholders equity threshold	0		0
Credit-related investment impairment losses	0	$ 0
Asset Pledged as Collateral
Schedule of Investments [Line Items]
Carrying value of securities pledged	759,000,000		$ 886,000,000
Marketable equity securities
Schedule of Investments [Line Items]
Investment securities	$ 7,600,000

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Investments (Aggregate Carrying And Approximate Market Values Of Available-For-Sale Securities) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Total	$ 1,586,870	$ 1,673,864
Gross Unrealized Gains	374	645
Gross Unrealized Losses	167,311	168,989
Estimated Fair Value	1,419,933	1,505,520
Certificates of deposit, at carrying value	200	700
Obligations of states and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Total	245,922	292,293
Gross Unrealized Gains	160	346
Gross Unrealized Losses	20,481	24,324
Estimated Fair Value	225,601	268,315
U.S. government agencies
Debt Securities, Available-for-sale [Line Items]
Total	1,300,980	1,342,666
Gross Unrealized Gains	214	299
Gross Unrealized Losses	142,736	140,686
Estimated Fair Value	1,158,458	1,202,279
Private label
Debt Securities, Available-for-sale [Line Items]
Total	7,288	7,695
Gross Unrealized Gains	0	0
Gross Unrealized Losses	498	464
Estimated Fair Value	6,790	7,231
Trust preferred securities
Debt Securities, Available-for-sale [Line Items]
Total	4,595	4,590
Gross Unrealized Gains	0	0
Gross Unrealized Losses	403	762
Estimated Fair Value	4,192	3,828
Corporate securities
Debt Securities, Available-for-sale [Line Items]
Total	28,085	26,620
Gross Unrealized Gains	0	0
Gross Unrealized Losses	3,193	2,753
Estimated Fair Value	$ 24,892	$ 23,867

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Investments (Gross Unrealized Losses And Fair Value Of Investments) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Less Than Twelve Months
Estimated Fair Value	$ 160,056	$ 766,882
Unrealized Loss	18,722	75,309
Estimated Fair Value	940,646	394,860
Twelve Months or Greater
Unrealized Loss	148,589	93,680
Estimated Fair Value	1,100,702	1,161,742
Unrealized Loss	167,311	168,989
Obligations of states and political subdivisions
Less Than Twelve Months
Estimated Fair Value	43,264	203,173
Unrealized Loss	1,102	21,929
Estimated Fair Value	169,087	13,359
Twelve Months or Greater
Unrealized Loss	19,379	2,395
Estimated Fair Value	212,351	216,532
Unrealized Loss	20,481	24,324
U.S. Government agencies
Less Than Twelve Months
Estimated Fair Value	105,588	533,611
Unrealized Loss	16,261	50,268
Estimated Fair Value	746,989	376,778
Twelve Months or Greater
Unrealized Loss	126,475	90,418
Estimated Fair Value	852,577	910,389
Unrealized Loss	142,736	140,686
Trust preferred securities
Less Than Twelve Months
Estimated Fair Value	0	0
Unrealized Loss	0	0
Estimated Fair Value	4,192	3,828
Twelve Months or Greater
Unrealized Loss	403	762
Estimated Fair Value	4,192	3,828
Unrealized Loss	403	762
Corporate securities
Less Than Twelve Months
Estimated Fair Value	11,204	22,972
Unrealized Loss	1,359	2,648
Estimated Fair Value	13,688	895
Twelve Months or Greater
Unrealized Loss	1,834	105
Estimated Fair Value	24,892	23,867
Unrealized Loss	3,193	2,753
Private label
Less Than Twelve Months
Estimated Fair Value	0	7,126
Unrealized Loss	0	464
Estimated Fair Value	6,690	0
Twelve Months or Greater
Unrealized Loss	498	0
Estimated Fair Value	6,690	7,126
Unrealized Loss	$ 498	$ 464

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Investments (Amortized Cost And Estimated Fair Value Of Debt Securities By Contractual Maturity) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Amortized Cost
Due in one year or less	$ 1,814
Due after one year through five years	51,378
Due after five years through ten years	511,736
Due after ten years	1,021,942
Total	1,586,870	$ 1,673,864
Estimated Fair Value
Due in one year or less	1,796
Due after one year through five years	47,776
Due after five years through ten years	472,381
Due after ten years	897,980
Total	$ 1,419,933	$ 1,505,520

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Investments (Gross Gains And Losses Realized) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Investments [Abstract]
Gross realized gains on securities sold	$ 0	$ 0	$ 975	$ 0
Gross realized losses on securities sold	0	0	(202)	0
Net investment security gains	0	0	773	0
Gross unrealized gains recognized on equity securities still held	8	2	368	42
Gross unrealized losses recognized on equity securities still held	(302)	(603)	(301)	(1,366)
Net unrealized gains recognized on equity securities still held	$ (294)	$ (601)	$ 67	$ (1,324)

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Loans (Summary Of Major Classifications For Loans) (Details) - USD ($)	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 3,922,142,000		$ 3,646,258,000
Allowance for credit losses	(22,751,000)	$ (22,724,000)	(17,108,000)	$ (17,015,000)	$ (17,280,000)	$ (18,166,000)
Net loans	3,899,391,000		3,629,150,000
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	417,847,000		373,890,000
Allowance for credit losses	(4,330,000)	(4,289,000)	(3,568,000)	(3,519,000)	(3,458,000)	(3,480,000)
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	1,536,702,000		1,392,307,000
Allowance for credit losses	(10,904,000)	(11,185,000)	(6,612,000)	(7,033,000)	(7,259,000)	(7,311,000)
Construction loan	3,361,000		4,130,000
1-4 Family
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	123,701,000		116,192,000
Allowance for credit losses	(598,000)	(613,000)	(566,000)	(574,000)	(574,000)	(598,000)
Hotels
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	324,745,000		340,404,000
Allowance for credit losses	(2,133,000)	(2,184,000)	(2,332,000)	(2,508,000)	(2,545,000)	(2,426,000)
Multi-family
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	191,483,000		174,786,000
Allowance for credit losses	(1,009,000)	(1,027,000)	(380,000)	(460,000)	(477,000)	(483,000)
Non Residential Non-Owner Occupied
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	673,921,000		585,964,000
Allowance for credit losses	(4,786,000)	(4,924,000)	(2,019,000)	(2,096,000)	(2,281,000)	(2,319,000)
Non Residential Owner Occupied
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	222,852,000		174,961,000
Allowance for credit losses	(2,378,000)	(2,437,000)	(1,315,000)	(1,395,000)	(1,382,000)	(1,485,000)
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	1,746,618,000		1,693,523,000
Allowance for credit losses	(5,573,000)	(5,481,000)	(5,427,000)	(4,994,000)	(5,039,000)	(5,716,000)
Construction loan	20,470,000		21,122,000
Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	151,012,000		134,317,000
Allowance for credit losses	(408,000)	(400,000)	(290,000)	(338,000)	(410,000)	(517,000)
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	65,201,000		48,806,000
Allowance for credit losses	(334,000)	(371,000)	(110,000)	(78,000)	(86,000)	(106,000)
Demand deposit account (DDA) overdrafts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	4,762,000		3,415,000
Allowance for credit losses	$ (1,202,000)	$ (998,000)	$ (1,101,000)	$ (1,053,000)	$ (1,028,000)	$ (1,036,000)

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Allowance For Credit Losses (Narrative) (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2023 USD ($) contract	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Mar. 10, 2023 USD ($)	Dec. 31, 2022 USD ($)
Financing Receivable, Impaired [Line Items]
Threshold period for discontinuance of interest accrual			90 days
Financing receivable, nonaccrual, interest income			$ 0	$ 0
Collateral dependent loans	$ 0		$ 0			$ 0
Financing receivable, threshold period past due	30 days		30 days
Loans, Evaluated for impairment, Individually	$ 1,000,000		$ 1,000,000
Provision for (recovery of) credit losses	425,000	$ 0	$ 3,343,000	(756,000)
Citizens Commerce Bancshares, Inc.
Financing Receivable, Impaired [Line Items]
Allowance for credit losses acquired					$ 2,000,000
Allowance for credit losses					$ 2,800,000
Commercial Borrower
Financing Receivable, Impaired [Line Items]
Provision for (recovery of) credit losses	$ 900,000
Number of loans downgraded | contract	2
Residential real estate
Financing Receivable, Impaired [Line Items]
Threshold period past due for write-off of financing receivable	120 days		120 days
Provision for (recovery of) credit losses	$ 107,000	7,000	$ 321,000	(665,000)
Commercial Industrial Loans And Commercial Real Estate
Financing Receivable, Impaired [Line Items]
Threshold period past due for write-off of financing receivable	120 days		120 days
Consumer
Financing Receivable, Impaired [Line Items]
Threshold period past due for write-off of financing receivable	180 days		180 days
Provision for (recovery of) credit losses	$ 44,000	$ (18,000)	$ 346,000	$ (43,000)

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Allowance For Credit Losses (Financing Receivable, Allowance for Credit Loss) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss, Beginning Balance	$ 22,724,000	$ 17,280,000	$ 17,108,000	$ 18,166,000
Impact of Adopting ASU 2022-02			(175,000)
PCD Loan Reserves			2,811,000
Financing Receivable, Allowance for Credit Loss, Writeoff	(872,000)	(712,000)	(1,486,000)	(1,450,000)
Financing Receivable, Allowance for Credit Loss, Recovery	474,000	447,000	1,150,000	1,055,000
Provision for (recovery of) credit losses	425,000	0	3,343,000	(756,000)
Financing Receivable, Allowance for Credit Loss, Ending Balance	22,751,000	17,015,000	22,751,000	17,015,000
Commercial and industrial
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss, Beginning Balance	4,289,000	3,458,000	3,568,000	3,480,000
Impact of Adopting ASU 2022-02			12,000
PCD Loan Reserves			0
Financing Receivable, Allowance for Credit Loss, Writeoff	(69,000)	0	(69,000)	(34,000)
Financing Receivable, Allowance for Credit Loss, Recovery	86,000	32,000	169,000	91,000
Provision for (recovery of) credit losses	24,000	29,000	650,000	(18,000)
Financing Receivable, Allowance for Credit Loss, Ending Balance	4,330,000	3,519,000	4,330,000	3,519,000
Commercial real estate
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss, Beginning Balance	11,185,000	7,259,000	6,612,000	7,311,000
Impact of Adopting ASU 2022-02			(1,000)
PCD Loan Reserves			2,811,000
Financing Receivable, Allowance for Credit Loss, Writeoff	(117,000)	(24,000)	(120,000)	(24,000)
Provision for Loan, Lease, and Other Losses	28,000	25,000	186,000	78,000
Provision for (recovery of) credit losses	(192,000)	(227,000)	1,416,000	(332,000)
Financing Receivable, Allowance for Credit Loss, Ending Balance	10,904,000	7,033,000	10,904,000	7,033,000
Residential real estate
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss, Beginning Balance	5,481,000	5,039,000	5,427,000	5,716,000
Impact of Adopting ASU 2022-02			(138,000)
PCD Loan Reserves			0
Financing Receivable, Allowance for Credit Loss, Writeoff	(20,000)	(56,000)	(52,000)	(106,000)
Financing Receivable, Allowance for Credit Loss, Recovery	5,000	4,000	15,000	49,000
Provision for (recovery of) credit losses	107,000	7,000	321,000	(665,000)
Financing Receivable, Allowance for Credit Loss, Ending Balance	5,573,000	4,994,000	5,573,000	4,994,000
Home equity
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss, Beginning Balance	400,000	410,000	290,000	517,000
Impact of Adopting ASU 2022-02			(46,000)
PCD Loan Reserves			0
Financing Receivable, Allowance for Credit Loss, Writeoff	(200,000)	(19,000)	(267,000)	(19,000)
Financing Receivable, Allowance for Credit Loss, Recovery	12,000	3,000	16,000	20,000
Provision for (recovery of) credit losses	196,000	(56,000)	415,000	(180,000)
Financing Receivable, Allowance for Credit Loss, Ending Balance	408,000	338,000	408,000	338,000
Consumer
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss, Beginning Balance	371,000	86,000	110,000	106,000
Impact of Adopting ASU 2022-02			(2,000)
PCD Loan Reserves			0
Financing Receivable, Allowance for Credit Loss, Writeoff	(109,000)	(9,000)	(171,000)	(32,000)
Financing Receivable, Allowance for Credit Loss, Recovery	28,000	19,000	51,000	47,000
Provision for (recovery of) credit losses	44,000	(18,000)	346,000	(43,000)
Financing Receivable, Allowance for Credit Loss, Ending Balance	334,000	78,000	334,000	78,000
Demand deposit account (DDA) overdrafts
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss, Beginning Balance	998,000	1,028,000	1,101,000	1,036,000
Impact of Adopting ASU 2022-02			0
PCD Loan Reserves			0
Financing Receivable, Allowance for Credit Loss, Writeoff	(357,000)	(604,000)	(807,000)	(1,235,000)
Financing Receivable, Allowance for Credit Loss, Recovery	315,000	364,000	713,000	770,000
Provision for (recovery of) credit losses	246,000	265,000	195,000	482,000
Financing Receivable, Allowance for Credit Loss, Ending Balance	1,202,000	1,053,000	1,202,000	1,053,000
1-4 Family
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss, Beginning Balance	613,000	574,000	566,000	598,000
Impact of Adopting ASU 2022-02			(1,000)
PCD Loan Reserves			0
Financing Receivable, Allowance for Credit Loss, Writeoff	(77,000)	(24,000)	(80,000)	(24,000)
Financing Receivable, Allowance for Credit Loss, Recovery	16,000	5,000	30,000	34,000
Provision for (recovery of) credit losses	46,000	19,000	83,000	(34,000)
Financing Receivable, Allowance for Credit Loss, Ending Balance	598,000	574,000	598,000	574,000
Hotels
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss, Beginning Balance	2,184,000	2,545,000	2,332,000	2,426,000
Impact of Adopting ASU 2022-02			0
PCD Loan Reserves			0
Financing Receivable, Allowance for Credit Loss, Writeoff	(40,000)	0	(40,000)	0
Financing Receivable, Allowance for Credit Loss, Recovery	0	0	0	0
Provision for (recovery of) credit losses	(11,000)	(37,000)	(159,000)	82,000
Financing Receivable, Allowance for Credit Loss, Ending Balance	2,133,000	2,508,000	2,133,000	2,508,000
Multi-family
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss, Beginning Balance	1,027,000	477,000	380,000	483,000
Impact of Adopting ASU 2022-02			0
PCD Loan Reserves			500,000
Financing Receivable, Allowance for Credit Loss, Writeoff	0	0	0	0
Financing Receivable, Allowance for Credit Loss, Recovery	0	0	0	0
Provision for (recovery of) credit losses	(18,000)	(17,000)	129,000	(23,000)
Financing Receivable, Allowance for Credit Loss, Ending Balance	1,009,000	460,000	1,009,000	460,000
Non Residential Non-Owner Occupied
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss, Beginning Balance	4,924,000	2,281,000	2,019,000	2,319,000
Impact of Adopting ASU 2022-02			0
PCD Loan Reserves			1,536,000
Financing Receivable, Allowance for Credit Loss, Writeoff	0	0	0	0
Financing Receivable, Allowance for Credit Loss, Recovery	12,000	20,000	156,000	44,000
Provision for (recovery of) credit losses	(150,000)	(205,000)	1,075,000	(267,000)
Financing Receivable, Allowance for Credit Loss, Ending Balance	4,786,000	2,096,000	4,786,000	2,096,000
Non Residential Owner Occupied
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss, Beginning Balance	2,437,000	1,382,000	1,315,000	1,485,000
Impact of Adopting ASU 2022-02			0
PCD Loan Reserves			775,000
Financing Receivable, Allowance for Credit Loss, Writeoff	0	0	0	0
Financing Receivable, Allowance for Credit Loss, Recovery	0	0	0	0
Provision for (recovery of) credit losses	(59,000)	13,000	288,000	(90,000)
Financing Receivable, Allowance for Credit Loss, Ending Balance	$ 2,378,000	$ 1,395,000	$ 2,378,000	$ 1,395,000

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Allowance for Credit Losses (Financing Receivable, Nonaccrual) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable, Impaired [Line Items]
Non-accrual with no allowance for credit losses	$ 0	$ 228
Non-accrual with allowance for credit losses	5,395	4,977
Loans past due over 90 days, still accruing	215	187
Commercial and industrial
Financing Receivable, Impaired [Line Items]
Non-accrual with no allowance for credit losses	0	0
Non-accrual with allowance for credit losses	741	1,015
Loans past due over 90 days, still accruing	0	0
Commercial real estate
Financing Receivable, Impaired [Line Items]
Non-accrual with no allowance for credit losses	0	0
Non-accrual with allowance for credit losses	1,821	2,166
Loans past due over 90 days, still accruing	0	0
1-4 Family
Financing Receivable, Impaired [Line Items]
Non-accrual with no allowance for credit losses	0	0
Non-accrual with allowance for credit losses	742	937
Loans past due over 90 days, still accruing	0	0
Hotels
Financing Receivable, Impaired [Line Items]
Non-accrual with no allowance for credit losses	0	0
Non-accrual with allowance for credit losses	0	115
Loans past due over 90 days, still accruing	0	0
Multi-family
Financing Receivable, Impaired [Line Items]
Non-accrual with no allowance for credit losses	0	0
Non-accrual with allowance for credit losses	0	0
Loans past due over 90 days, still accruing	0	0
Non Residential Non-Owner Occupied
Financing Receivable, Impaired [Line Items]
Non-accrual with no allowance for credit losses	0	0
Non-accrual with allowance for credit losses	753	816
Loans past due over 90 days, still accruing	0	0
Non Residential Owner Occupied
Financing Receivable, Impaired [Line Items]
Non-accrual with no allowance for credit losses	0	0
Non-accrual with allowance for credit losses	326	298
Loans past due over 90 days, still accruing	0	0
Residential real estate
Financing Receivable, Impaired [Line Items]
Non-accrual with no allowance for credit losses	0	228
Non-accrual with allowance for credit losses	2,774	1,741
Loans past due over 90 days, still accruing	208	164
Home equity
Financing Receivable, Impaired [Line Items]
Non-accrual with no allowance for credit losses	0	0
Non-accrual with allowance for credit losses	24	55
Loans past due over 90 days, still accruing	7	0
Consumer
Financing Receivable, Impaired [Line Items]
Non-accrual with no allowance for credit losses	0	0
Non-accrual with allowance for credit losses	35	0
Loans past due over 90 days, still accruing	$ 0	$ 23

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Allowance For Credit Losses (Financing Receivable, Past Due) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Non-accrual	$ 5,395	$ 5,205
Gross loans	3,922,142	3,646,258
Commercial and industrial
Financing Receivable, Past Due [Line Items]
Non-accrual	741	1,015
Gross loans	417,847	373,890
Commercial real estate
Financing Receivable, Past Due [Line Items]
Non-accrual	1,821	2,166
Gross loans	1,536,702	1,392,307
1-4 Family
Financing Receivable, Past Due [Line Items]
Non-accrual	742	937
Gross loans	123,701	116,192
Hotels
Financing Receivable, Past Due [Line Items]
Non-accrual	0	115
Gross loans	324,745	340,404
Multi-family
Financing Receivable, Past Due [Line Items]
Non-accrual	0	0
Gross loans	191,483	174,786
Non Residential Non-Owner Occupied
Financing Receivable, Past Due [Line Items]
Non-accrual	753	816
Gross loans	673,921	585,964
Non Residential Owner Occupied
Financing Receivable, Past Due [Line Items]
Non-accrual	326	298
Gross loans	222,852	174,961
Residential real estate
Financing Receivable, Past Due [Line Items]
Non-accrual	2,774	1,969
Gross loans	1,746,618	1,693,523
Home equity
Financing Receivable, Past Due [Line Items]
Non-accrual	24	55
Gross loans	151,012	134,317
Consumer
Financing Receivable, Past Due [Line Items]
Non-accrual	35	0
Gross loans	65,201	48,806
Demand deposit account (DDA) overdrafts
Financing Receivable, Past Due [Line Items]
Non-accrual	0	0
Gross loans	4,762	3,415
30-59 Past Due
Financing Receivable, Past Due [Line Items]
Gross loans	6,760	8,626
30-59 Past Due | Commercial and industrial
Financing Receivable, Past Due [Line Items]
Gross loans	117	201
30-59 Past Due | Commercial real estate
Financing Receivable, Past Due [Line Items]
Gross loans	236	522
30-59 Past Due | 1-4 Family
Financing Receivable, Past Due [Line Items]
Gross loans	105	17
30-59 Past Due | Hotels
Financing Receivable, Past Due [Line Items]
Gross loans	0	0
30-59 Past Due | Multi-family
Financing Receivable, Past Due [Line Items]
Gross loans	0	0
30-59 Past Due | Non Residential Non-Owner Occupied
Financing Receivable, Past Due [Line Items]
Gross loans	131	0
30-59 Past Due | Non Residential Owner Occupied
Financing Receivable, Past Due [Line Items]
Gross loans	0	505
30-59 Past Due | Residential real estate
Financing Receivable, Past Due [Line Items]
Gross loans	5,330	6,843
30-59 Past Due | Home equity
Financing Receivable, Past Due [Line Items]
Gross loans	688	622
30-59 Past Due | Consumer
Financing Receivable, Past Due [Line Items]
Gross loans	57	52
30-59 Past Due | Demand deposit account (DDA) overdrafts
Financing Receivable, Past Due [Line Items]
Gross loans	332	386
60-89 Past Due
Financing Receivable, Past Due [Line Items]
Gross loans	471	363
60-89 Past Due | Commercial and industrial
Financing Receivable, Past Due [Line Items]
Gross loans	25	33
60-89 Past Due | Commercial real estate
Financing Receivable, Past Due [Line Items]
Gross loans	1	188
60-89 Past Due | 1-4 Family
Financing Receivable, Past Due [Line Items]
Gross loans	0	0
60-89 Past Due | Hotels
Financing Receivable, Past Due [Line Items]
Gross loans	0	0
60-89 Past Due | Multi-family
Financing Receivable, Past Due [Line Items]
Gross loans	0	0
60-89 Past Due | Non Residential Non-Owner Occupied
Financing Receivable, Past Due [Line Items]
Gross loans	1	0
60-89 Past Due | Non Residential Owner Occupied
Financing Receivable, Past Due [Line Items]
Gross loans	0	188
60-89 Past Due | Residential real estate
Financing Receivable, Past Due [Line Items]
Gross loans	346	84
60-89 Past Due | Home equity
Financing Receivable, Past Due [Line Items]
Gross loans	90	28
60-89 Past Due | Consumer
Financing Receivable, Past Due [Line Items]
Gross loans	0	25
60-89 Past Due | Demand deposit account (DDA) overdrafts
Financing Receivable, Past Due [Line Items]
Gross loans	9	5
90+ Past Due
Financing Receivable, Past Due [Line Items]
Gross loans	215	187
90+ Past Due | Commercial and industrial
Financing Receivable, Past Due [Line Items]
Gross loans	0	0
90+ Past Due | Commercial real estate
Financing Receivable, Past Due [Line Items]
Gross loans	0	0
90+ Past Due | 1-4 Family
Financing Receivable, Past Due [Line Items]
Gross loans	0	0
90+ Past Due | Hotels
Financing Receivable, Past Due [Line Items]
Gross loans	0	0
90+ Past Due | Multi-family
Financing Receivable, Past Due [Line Items]
Gross loans	0	0
90+ Past Due | Non Residential Non-Owner Occupied
Financing Receivable, Past Due [Line Items]
Gross loans	0	0
90+ Past Due | Non Residential Owner Occupied
Financing Receivable, Past Due [Line Items]
Gross loans	0	0
90+ Past Due | Residential real estate
Financing Receivable, Past Due [Line Items]
Gross loans	208	164
90+ Past Due | Home equity
Financing Receivable, Past Due [Line Items]
Gross loans	7	0
90+ Past Due | Consumer
Financing Receivable, Past Due [Line Items]
Gross loans	0	23
90+ Past Due | Demand deposit account (DDA) overdrafts
Financing Receivable, Past Due [Line Items]
Gross loans	0	0
Total Past Due
Financing Receivable, Past Due [Line Items]
Gross loans	7,446	9,176
Total Past Due | Commercial and industrial
Financing Receivable, Past Due [Line Items]
Gross loans	142	234
Total Past Due | Commercial real estate
Financing Receivable, Past Due [Line Items]
Gross loans	237	710
Total Past Due | 1-4 Family
Financing Receivable, Past Due [Line Items]
Gross loans	105	17
Total Past Due | Hotels
Financing Receivable, Past Due [Line Items]
Gross loans	0	0
Total Past Due | Multi-family
Financing Receivable, Past Due [Line Items]
Gross loans	0	0
Total Past Due | Non Residential Non-Owner Occupied
Financing Receivable, Past Due [Line Items]
Gross loans	132	0
Total Past Due | Non Residential Owner Occupied
Financing Receivable, Past Due [Line Items]
Gross loans	0	693
Total Past Due | Residential real estate
Financing Receivable, Past Due [Line Items]
Gross loans	5,884	7,091
Total Past Due | Home equity
Financing Receivable, Past Due [Line Items]
Gross loans	785	650
Total Past Due | Consumer
Financing Receivable, Past Due [Line Items]
Gross loans	57	100
Total Past Due | Demand deposit account (DDA) overdrafts
Financing Receivable, Past Due [Line Items]
Gross loans	341	391
Current Loans
Financing Receivable, Past Due [Line Items]
Gross loans	3,909,301	3,631,877
Current Loans | Commercial and industrial
Financing Receivable, Past Due [Line Items]
Gross loans	416,964	372,641
Current Loans | Commercial real estate
Financing Receivable, Past Due [Line Items]
Gross loans	1,534,644	1,389,431
Current Loans | 1-4 Family
Financing Receivable, Past Due [Line Items]
Gross loans	122,854	115,238
Current Loans | Hotels
Financing Receivable, Past Due [Line Items]
Gross loans	324,745	340,289
Current Loans | Multi-family
Financing Receivable, Past Due [Line Items]
Gross loans	191,483	174,786
Current Loans | Non Residential Non-Owner Occupied
Financing Receivable, Past Due [Line Items]
Gross loans	673,036	585,148
Current Loans | Non Residential Owner Occupied
Financing Receivable, Past Due [Line Items]
Gross loans	222,526	173,970
Current Loans | Residential real estate
Financing Receivable, Past Due [Line Items]
Gross loans	1,737,960	1,684,463
Current Loans | Home equity
Financing Receivable, Past Due [Line Items]
Gross loans	150,203	133,612
Current Loans | Consumer
Financing Receivable, Past Due [Line Items]
Gross loans	65,109	48,706
Current Loans | Demand deposit account (DDA) overdrafts
Financing Receivable, Past Due [Line Items]
Gross loans	$ 4,421	$ 3,024

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Allowance For Credit Losses (Financing Receivable, Credit Quality Indicators) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	$ 3,922,142	$ 3,646,258
Commercial and industrial
Financing Receivable, Credit Quality Indicator [Line Items]
2022	43,251	52,223
2021	54,488	91,300
2020	90,025	61,668
2019	60,638	27,540
2018	25,393	19,721
Prior	21,886	8,469
Revolving Loans, Amortized Cost Basis	122,166	112,969
Gross loans	417,847	373,890
Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
2022	76,889	264,219
2021	317,515	224,181
2020	254,134	201,793
2019	184,801	225,636
2018	233,363	129,832
Prior	445,401	327,358
Revolving Loans, Amortized Cost Basis	24,599	19,288
Gross loans	1,536,702	1,392,307
1-4 Family
Financing Receivable, Credit Quality Indicator [Line Items]
2022	14,116	31,642
2021	32,722	21,640
2020	19,138	12,944
2019	12,330	8,665
2018	8,297	4,826
Prior	27,258	25,368
Revolving Loans, Amortized Cost Basis	9,840	11,107
Gross loans	123,701	116,192
Hotels
Financing Receivable, Credit Quality Indicator [Line Items]
2022	8,517	85,590
2021	83,971	35,849
2020	34,707	15,868
2019	7,643	84,658
2018	83,329	14,921
Prior	106,268	103,195
Revolving Loans, Amortized Cost Basis	310	323
Gross loans	324,745	340,404
Multi-family
Financing Receivable, Credit Quality Indicator [Line Items]
2022	2,893	13,761
2021	21,103	21,312
2020	28,583	65,542
2019	65,180	37,698
2018	39,785	2,189
Prior	32,616	33,560
Revolving Loans, Amortized Cost Basis	1,323	724
Gross loans	191,483	174,786
Non Residential Non-Owner Occupied
Financing Receivable, Credit Quality Indicator [Line Items]
2022	32,126	110,501
2021	146,949	109,001
2020	124,135	90,113
2019	80,670	69,533
2018	74,485	89,502
Prior	207,267	114,531
Revolving Loans, Amortized Cost Basis	8,289	2,783
Gross loans	673,921	585,964
Non Residential Owner Occupied
Financing Receivable, Credit Quality Indicator [Line Items]
2022	19,237	22,725
2021	32,771	36,379
2020	47,571	17,326
2019	18,978	25,082
2018	27,468	18,394
Prior	71,991	50,704
Revolving Loans, Amortized Cost Basis	4,836	4,351
Gross loans	222,852	174,961
Residential real estate
Financing Receivable, Credit Quality Indicator [Line Items]
2022	104,691	405,059
2021	414,599	336,669
2020	328,840	270,197
2019	263,120	123,314
2018	117,233	86,396
Prior	438,934	383,390
Revolving Loans, Amortized Cost Basis	79,201	88,498
Gross loans	1,746,618	1,693,523
Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
2022	11,868	16,670
2021	15,532	7,394
2020	6,744	5,000
2019	4,316	3,035
2018	2,700	1,823
Prior	4,981	5,116
Revolving Loans, Amortized Cost Basis	104,871	95,279
Gross loans	151,012	134,317
Consumer
Financing Receivable, Credit Quality Indicator [Line Items]
2022	24,255	25,296
2021	23,235	7,954
2020	6,204	5,482
2019	4,174	4,299
2018	3,282	2,246
Prior	2,507	2,064
Revolving Loans, Amortized Cost Basis	1,544	1,465
Gross loans	65,201	48,806
Performing | Residential real estate
Financing Receivable, Credit Quality Indicator [Line Items]
2022	104,691	405,059
2021	414,599	336,462
2020	328,118	270,197
2019	263,028	122,559
2018	116,507	86,317
Prior	438,035	382,652
Revolving Loans, Amortized Cost Basis	78,866	88,308
Gross loans	1,743,844	1,691,554
Performing | Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
2022	11,868	16,670
2021	15,532	7,394
2020	6,744	5,000
2019	4,316	3,035
2018	2,700	1,823
Prior	4,981	5,116
Revolving Loans, Amortized Cost Basis	104,847	95,224
Gross loans	150,988	134,262
Performing | Consumer
Financing Receivable, Credit Quality Indicator [Line Items]
2022	24,255	25,296
2021	23,235	7,954
2020	6,204	5,482
2019	4,174	4,299
2018	3,282	2,246
Prior	2,471	2,064
Revolving Loans, Amortized Cost Basis	1,544	1,465
Gross loans	65,165	48,806
Non-performing | Residential real estate
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0	0
2021	0	207
2020	722	0
2019	92	755
2018	726	79
Prior	899	738
Revolving Loans, Amortized Cost Basis	335	190
Gross loans	2,774	1,969
Non-performing | Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0	0
2021	0	0
2020	0	0
2019	0	0
2018	0	0
Prior	0	0
Revolving Loans, Amortized Cost Basis	24	55
Gross loans	24	55
Non-performing | Consumer
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0	0
2021	0	0
2020	0	0
2019	0	0
2018	0	0
Prior	36	0
Revolving Loans, Amortized Cost Basis	0	0
Gross loans	36	0
Pass | Commercial and industrial
Financing Receivable, Credit Quality Indicator [Line Items]
2022	42,882	51,268
2021	51,976	91,097
2020	89,094	60,251
2019	57,019	26,356
2018	24,315	19,497
Prior	20,250	6,917
Revolving Loans, Amortized Cost Basis	100,274	109,645
Gross loans	385,810	365,031
Pass | Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
2022	75,635	262,965
2021	316,284	223,277
2020	250,353	197,541
2019	174,863	197,037
2018	203,949	126,971
Prior	397,803	300,343
Revolving Loans, Amortized Cost Basis	23,409	18,173
Gross loans	1,442,296	1,326,307
Pass | 1-4 Family
Financing Receivable, Credit Quality Indicator [Line Items]
2022	14,116	31,331
2021	32,420	21,640
2020	19,138	12,565
2019	11,962	8,609
2018	8,249	4,826
Prior	25,096	22,949
Revolving Loans, Amortized Cost Basis	9,840	11,107
Gross loans	120,821	113,027
Pass | Hotels
Financing Receivable, Credit Quality Indicator [Line Items]
2022	8,517	85,590
2021	83,971	35,849
2020	34,707	12,275
2019	3,568	60,429
2018	59,410	14,921
Prior	99,832	90,686
Revolving Loans, Amortized Cost Basis	310	323
Gross loans	290,315	300,073
Pass | Multi-family
Financing Receivable, Credit Quality Indicator [Line Items]
2022	2,893	13,761
2021	21,103	21,312
2020	28,583	65,542
2019	65,180	37,698
2018	39,785	2,189
Prior	32,616	33,560
Revolving Loans, Amortized Cost Basis	1,323	724
Gross loans	191,483	174,786
Pass | Non Residential Non-Owner Occupied
Financing Receivable, Credit Quality Indicator [Line Items]
2022	30,872	110,501
2021	146,949	108,290
2020	123,450	89,943
2019	76,398	68,027
2018	72,911	87,413
Prior	179,771	113,287
Revolving Loans, Amortized Cost Basis	8,213	2,781
Gross loans	638,564	580,242
Pass | Non Residential Owner Occupied
Financing Receivable, Credit Quality Indicator [Line Items]
2022	19,237	21,782
2021	31,842	36,186
2020	44,475	17,216
2019	17,755	22,274
2018	23,595	17,622
Prior	60,487	39,861
Revolving Loans, Amortized Cost Basis	3,722	3,238
Gross loans	201,113	158,179
Special mention | Commercial and industrial
Financing Receivable, Credit Quality Indicator [Line Items]
2022	369	0
2021	1,566	0
2020	785	392
2019	2,770	9
2018	0	0
Prior	0	19
Revolving Loans, Amortized Cost Basis	21,849	3,245
Gross loans	27,339	3,665
Special mention | Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0	228
2021	223	110
2020	2,815	285
2019	3,047	505
2018	2,248	0
Prior	26,336	1,329
Revolving Loans, Amortized Cost Basis	76	113
Gross loans	34,745	2,570
Special mention | 1-4 Family
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0	228
2021	223	0
2020	0	115
2019	111	0
2018	0	0
Prior	777	836
Revolving Loans, Amortized Cost Basis	0	0
Gross loans	1,111	1,179
Special mention | Hotels
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0	0
2021	0	0
2020	0	0
2019	0	0
2018	0	0
Prior	0	0
Revolving Loans, Amortized Cost Basis	0	0
Gross loans	0	0
Special mention | Multi-family
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0	0
2021	0	0
2020	0	0
2019	0	0
2018	0	0
Prior	0	0
Revolving Loans, Amortized Cost Basis	0	0
Gross loans	0	0
Special mention | Non Residential Non-Owner Occupied
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0	0
2021	0	110
2020	106	170
2019	1,821	176
2018	170	0
Prior	25,094	0
Revolving Loans, Amortized Cost Basis	76	0
Gross loans	27,267	456
Special mention | Non Residential Owner Occupied
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0	0
2021	0	0
2020	2,709	0
2019	1,115	329
2018	2,078	0
Prior	465	493
Revolving Loans, Amortized Cost Basis	0	113
Gross loans	6,367	935
Substandard | Commercial and industrial
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0	955
2021	946	203
2020	146	1,025
2019	849	1,175
2018	1,078	224
Prior	1,636	1,533
Revolving Loans, Amortized Cost Basis	43	79
Gross loans	4,698	5,194
Substandard | Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
2022	1,254	1,026
2021	1,008	794
2020	966	3,967
2019	6,891	28,094
2018	27,166	2,861
Prior	21,262	25,686
Revolving Loans, Amortized Cost Basis	1,114	1,002
Gross loans	59,661	63,430
Substandard | 1-4 Family
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0	83
2021	79	0
2020	0	264
2019	257	56
2018	48	0
Prior	1,385	1,583
Revolving Loans, Amortized Cost Basis	0	0
Gross loans	1,769	1,986
Substandard | Hotels
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0	0
2021	0	0
2020	0	3,593
2019	4,075	24,229
2018	23,919	0
Prior	6,436	12,509
Revolving Loans, Amortized Cost Basis	0	0
Gross loans	34,430	40,331
Substandard | Multi-family
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0	0
2021	0	0
2020	0	0
2019	0	0
2018	0	0
Prior	0	0
Revolving Loans, Amortized Cost Basis	0	0
Gross loans	0	0
Substandard | Non Residential Non-Owner Occupied
Financing Receivable, Credit Quality Indicator [Line Items]
2022	1,254	0
2021	0	601
2020	579	0
2019	2,451	1,330
2018	1,404	2,089
Prior	2,402	1,244
Revolving Loans, Amortized Cost Basis	0	2
Gross loans	8,090	5,266
Substandard | Non Residential Owner Occupied
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0	943
2021	929	193
2020	387	110
2019	108	2,479
2018	1,795	772
Prior	11,039	10,350
Revolving Loans, Amortized Cost Basis	1,114	1,000
Gross loans	15,372	$ 15,847
Gross Charge-Offs | Commercial and industrial
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0
2021	0
2020	33
2019	0
2018	0
Prior	0
Revolving Loans, Amortized Cost Basis	36
Gross loans	69
Gross Charge-Offs | Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0
2021	0
2020	0
2019	0
2018	0
Prior	120
Revolving Loans, Amortized Cost Basis	0
Gross loans	120
Gross Charge-Offs | 1-4 Family
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0
2021	0
2020	0
2019	0
2018	0
Prior	80
Revolving Loans, Amortized Cost Basis	0
Gross loans	80
Gross Charge-Offs | Hotels
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0
2021	0
2020	0
2019	0
2018	0
Prior	40
Revolving Loans, Amortized Cost Basis	0
Gross loans	40
Gross Charge-Offs | Multi-family
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0
2021	0
2020	0
2019	0
2018	0
Prior	0
Revolving Loans, Amortized Cost Basis	0
Gross loans	0
Gross Charge-Offs | Non Residential Non-Owner Occupied
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0
2021	0
2020	0
2019	0
2018	0
Prior	0
Revolving Loans, Amortized Cost Basis	0
Gross loans	0
Gross Charge-Offs | Non Residential Owner Occupied
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0
2021	0
2020	0
2019	0
2018	0
Prior	0
Revolving Loans, Amortized Cost Basis	0
Gross loans	0
Gross Charge-Offs | Residential real estate
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0
2021	0
2020	0
2019	0
2018	0
Prior	52
Revolving Loans, Amortized Cost Basis	0
Gross loans	52
Gross Charge-Offs | Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0
2021	32
2020	0
2019	0
2018	0
Prior	35
Revolving Loans, Amortized Cost Basis	200
Gross loans	267
Gross Charge-Offs | Consumer
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0
2021	0
2020	36
2019	0
2018	3
Prior	127
Revolving Loans, Amortized Cost Basis	5
Gross loans	$ 171

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Derivative Instruments (Narrative) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Derivatives, Fair Value [Line Items]
Collateral already posted, aggregate fair value	$ 75,700	$ 83,000
Hedged Asset, Fair Value Hedge, Last-of-Layer, Cumulative Increase (Decrease)	45	132
Hedged Asset, Fair Value Hedge, Last-of-Layer, Amount	313,700	330,000
Fair Value Hedge Agreement, Notional Amount	100,000
Interest Rate Swap | Non-hedging interest rate derivatives:
Derivatives, Fair Value [Line Items]
Derivative, notional amount	$ 150,000	$ 150,000

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Derivative Instruments (Fair Value Of Derivative Instruments) (Details) - Non-hedging interest rate derivatives: - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Loan interest rate swap - assets | Other Assets
Derivatives, Fair Value [Line Items]
Notional Amount	$ 27,463	$ 28,238
Fair Value	1,458	1,298
Loan interest rate swap - liabilities | Other Liabilities
Derivatives, Fair Value [Line Items]
Notional Amount	586,928	619,150
Fair Value	57,812	63,758
Loan interest rate swap - assets | Other Assets
Derivatives, Fair Value [Line Items]
Notional Amount	604,928	637,150
Fair Value	59,204	65,217
Loan interest rate swap - liabilities | Other Liabilities
Derivatives, Fair Value [Line Items]
Notional Amount	27,463	28,238
Fair Value	$ 1,458	$ 1,298

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Derivative Instruments (Change In Fair Value Of Derivative Instruments) (Details) - Non-hedging interest rate derivatives: - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Other Assets | Other Income | Customer Back-to-Back Swap Program
Derivatives, Fair Value [Line Items]
Change in Fair Value Non-Hedging Interest Rate Derivatives:	$ 10,653	$ 15,448	$ (5,477)	$ 18,524
Other Liabilities | Other Income | Customer Back-to-Back Swap Program
Derivatives, Fair Value [Line Items]
Change in Fair Value Non-Hedging Interest Rate Derivatives:	(10,653)	(15,448)	5,477	(18,524)
Other Liabilities | Other Expense
Derivatives, Fair Value [Line Items]
Change in Fair Value Non-Hedging Interest Rate Derivatives:	$ 131	$ 311	$ (67)	$ 888

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Derivative Instruments (Fair Value of Fair Value Hedges) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Derivatives, Fair Value [Line Items]
Hedged Asset, Fair Value Hedge, Last-of-Layer, Cumulative Increase (Decrease)	$ 45	$ 132
Available-for-sale Securities
Derivatives, Fair Value [Line Items]
Fair Value Hedges, Net	(14,429)	(15,394)
Other Assets
Derivatives, Fair Value [Line Items]
Fair Value Hedges, Net	$ 14,384	$ 15,262

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Derivative Instruments - Derivative Instruments (Details)	Jun. 30, 2023 USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Gross loans	$ (2,066,000)
Derivative assets	2,050,000
Cumulative adjustment to Interest and fees on loans	$ (16,000)

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Employee Benefit Plans (Restricted Shares Activity And Related Information) (Details) - Restricted Stock - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Restricted Awards Activity
Beginning Balance (in shares)			140,606	146,755
Granted (in shares)			35,663	33,159
Vested (in shares)			(43,417)	(41,635)
Ending Balance (in shares)	132,852	138,279	132,852	138,279
Average Market Price at Grant
Outstanding at period start (in dollars per share)			$ 73.87	$ 72.16
Granted (in dollars per share)			91.90	77.54
Vested (in dollars per share)			73.02	72.54
Outstanding at period end (in dollars per share)	$ 78.06	$ 73.58	$ 78.06	$ 73.58
Stock-based compensation expense associated with restricted shares	$ 633	$ 683	$ 1,341	$ 1,345
Unrecognized stock-based compensation expense associated with restricted shares	$ 5,759		$ 5,759
Weighted average period (in years) in which the above amount is expected to be recognized			3 years 1 month 24 days

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Employee Benefit Plans (Pension and Other Postretirement Benefits) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Components of net periodic cost:
Interest cost	$ 137	$ 90	$ 274	$ 180
Expected return on plan assets	(210)	(221)	(420)	(442)
Net amortization and deferral	86	195	172	390
Net Periodic Pension Cost	$ 13	$ 64	$ 26	$ 128

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Commitments and Contingencies (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Other Commitments [Line Items]
Commitments and contingencies
Commitments to extend credit: | Home equity
Other Commitments [Line Items]
Commitments and contingencies	249,262	232,295
Commitments to extend credit: | Commercial real estate
Other Commitments [Line Items]
Commitments and contingencies	58,494	53,226
Commitments to extend credit: | Other commitments
Other Commitments [Line Items]
Commitments and contingencies	304,940	257,222
Standby letters of credit
Other Commitments [Line Items]
Commitments and contingencies	5,279	5,205
Commercial letters of credit
Other Commitments [Line Items]
Commitments and contingencies	$ 2,026	$ 2,006

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Accumulated Other Comprehensive (Loss) Income (Narrative) (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Equity [Abstract]
Combined Federal and State income tax rate (percent)	24.00%	24.00%	24.00%	24.00%

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Accumulated Other Comprehensive (Loss) Income (Schedule of Changes In Each Component of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	$ 651,050	$ 632,430	$ 578,027	$ 681,105
Other comprehensive loss	(14,059)	(39,269)
Amounts reclassified from other comprehensive income	0		(588)
Other comprehensive (loss) income, net of tax	(14,059)	(39,269)	1,040	(98,243)
Ending balance	636,192	591,993	636,192	591,993
Defined Benefit Pension Plans
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(3,422)	(3,485)	(3,422)	(3,485)
Other comprehensive loss	0	0	0	0
Amounts reclassified from other comprehensive income	0		0
Other comprehensive (loss) income, net of tax	0	0		0
Ending balance	(3,422)	(3,485)	(3,422)	(3,485)
Securities available-for-sale:
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(112,967)	(41,229)	(128,066)	17,745
Other comprehensive loss	(14,059)	(39,269)	1,628	(98,243)
Amounts reclassified from other comprehensive income	0		(588)
Other comprehensive (loss) income, net of tax	(14,059)	(39,269)	1,040	(98,243)
Ending balance	(127,026)	(80,498)	(127,026)	(80,498)
Total
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(116,389)	(44,714)	(131,488)	14,260
Other comprehensive loss			1,628	(98,243)
Other comprehensive (loss) income, net of tax	(14,059)	(39,269)	1,040	(98,243)
Ending balance	$ (130,448)	$ (83,983)	$ (130,448)	$ (83,983)

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Accumulated Other Comprehensive (Loss) Income (Schedule Of Amounts Reclassified Out of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net securities gains reclassified into earnings	$ 0	$ 0	$ 773	$ 0
Related income tax expense	(7,884)	(5,767)	(14,143)	(11,018)
Net income available to common shareholders	32,733	22,683	57,074	44,025
Securities available-for-sale: | Amounts reclassified from Other Comprehensive (Loss) Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net securities gains reclassified into earnings	0	0	773	0
Related income tax expense	0	0	(185)	0
Net income available to common shareholders	$ 0	$ 0	$ 588	$ 0

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Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings Per Share [Abstract]
Net income available to common shareholders	$ 32,733	$ 22,683	$ 57,074	$ 44,025
Less: earnings allocated to participating securities	(291)	(203)	(505)	(403)
Net earnings allocated to common shareholders	32,442	22,480	56,569	43,622
Distributed earnings allocated to common stock	9,668	8,837	19,336	17,671
Undistributed earnings allocated to common stock	$ 22,774	$ 13,643	$ 37,233	$ 25,951
Average shares outstanding (in shares)	14,994	14,888	14,897	14,930
Effect of dilutive securities:
Employee stock awards (in shares)	18	21	22	24
Average shares outstanding, diluted (in shares)	15,012	14,909	14,919	14,954
Basic earnings per common share (in dollars per share)	$ 2.16	$ 1.51	$ 3.80	$ 2.92
Diluted earnings per share (in dollars per share)	$ 2.16	$ 1.51	$ 3.79	$ 2.92

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Fair Value Measurements (Narrative) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Material losses related to counterparty's inability to pay undercollateralized position	$ 0
Significant change in the value of derivative assets and liabilities attributed to credit risk	$ 0
Minimum
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Collateral discount	10.00%	10.00%
Maximum
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Collateral discount	30.00%	30.00%

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Fair Value Measurements (Schedule Of Assets And Liabilities Measured At Fair Value On A Recurring And Nonrecurring Basis) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2023	Dec. 31, 2022
Other real estate owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Write-downs included in other non-interest expense	$ (90)	$ 29
Recurring fair value measurements | Obligations of states and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		225,601	$ 268,315
Recurring fair value measurements | Obligations of states and political subdivisions | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		0	0
Recurring fair value measurements | Obligations of states and political subdivisions | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		225,601	268,315
Recurring fair value measurements | Obligations of states and political subdivisions | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		0	0
Recurring fair value measurements | U.S. Government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		1,158,458	1,202,279
Recurring fair value measurements | U.S. Government agencies | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		0	0
Recurring fair value measurements | U.S. Government agencies | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		1,158,458	1,202,279
Recurring fair value measurements | U.S. Government agencies | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		0	0
Recurring fair value measurements | Private label
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		6,790	7,231
Recurring fair value measurements | Private label | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		0	0
Recurring fair value measurements | Private label | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		4,712	4,772
Recurring fair value measurements | Private label | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		2,078	2,459
Recurring fair value measurements | Trust preferred securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		4,192	3,828
Recurring fair value measurements | Trust preferred securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		0	0
Recurring fair value measurements | Trust preferred securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		4,192	3,828
Recurring fair value measurements | Trust preferred securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		0	0
Recurring fair value measurements | Corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		24,892	23,867
Recurring fair value measurements | Corporate securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		0	0
Recurring fair value measurements | Corporate securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		24,892	23,867
Recurring fair value measurements | Corporate securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		0	0
Recurring fair value measurements | Marketable equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		7,637	7,569
Recurring fair value measurements | Marketable equity securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		3,551	3,851
Recurring fair value measurements | Marketable equity securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		4,086	3,718
Recurring fair value measurements | Marketable equity securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		0	0
Recurring fair value measurements | Certificates of deposit held for investment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		249	747
Recurring fair value measurements | Certificates of deposit held for investment | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		0	0
Recurring fair value measurements | Certificates of deposit held for investment | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		249	747
Recurring fair value measurements | Certificates of deposit held for investment | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		0	0
Recurring fair value measurements | Derivative assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		77,148	81,838
Recurring fair value measurements | Derivative assets | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		0	0
Recurring fair value measurements | Derivative assets | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		77,148	81,838
Recurring fair value measurements | Derivative assets | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		0	0
Recurring fair value measurements | Derivative liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, fair value		59,270	65,056
Recurring fair value measurements | Derivative liabilities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, fair value		0	0
Recurring fair value measurements | Derivative liabilities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, fair value		59,270	65,056
Recurring fair value measurements | Derivative liabilities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, fair value		0	0
Nonrecurring fair value measurements | Other real estate owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		874	909
Nonrecurring fair value measurements | Other real estate owned | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		0	0
Nonrecurring fair value measurements | Other real estate owned | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		0	0
Nonrecurring fair value measurements | Other real estate owned | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		$ 874	$ 909

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Fair Value Measurements (Schedule Of Estimates Of Fair Value Of Financial Instruments) (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Assets:
Estimated Fair Value	$ 1,419,933,000	$ 1,505,520,000
Marketable equity securities	29,262,000	23,807,000
Net loans	3,899,391,000	3,629,150,000
Accrued interest receivable	17,973,000	18,287,000
Derivative assets	2,050,000
Liabilities:
Deposits	5,015,063,000	4,869,866,000
Carrying Amount
Assets:
Cash and cash equivalents	231,281,000	200,000,000
Estimated Fair Value	1,419,933,000	1,505,520,000
Marketable equity securities	7,637,000	7,569,000
Net loans	3,899,391,000	3,629,150,000
Accrued interest receivable	17,973,000	18,287,000
Derivative assets	77,148,000	81,838,000
Liabilities:
Deposits	5,015,063,000	4,869,866,000
Customer repurchase agreements	271,714,000	290,964,000
Accrued interest payable	2,781,000	953,000
Derivative liabilities	59,270,000	65,057,000
Fair Value
Assets:
Cash and cash equivalents	231,281,000	200,000,000
Estimated Fair Value	1,419,933,000	1,505,520,000
Marketable equity securities	7,637,000	7,569,000
Net loans	3,754,410,000	3,491,318,000
Accrued interest receivable	17,973,000	18,287,000
Derivative assets	77,148,000	81,838,000
Liabilities:
Deposits	4,577,560,000	4,867,883,000
Customer repurchase agreements	271,714,000	290,964,000
Accrued interest payable	2,781,000	953,000
Derivative liabilities	59,270,000	65,057,000
Level 1
Assets:
Cash and cash equivalents	231,281,000	200,000,000
Estimated Fair Value	0	0
Marketable equity securities	3,551,000	3,851,000
Net loans	0	0
Accrued interest receivable	17,973,000	18,287,000
Derivative assets	0	0
Liabilities:
Deposits	3,641,957,000	3,981,766,000
Customer repurchase agreements	0	0
Accrued interest payable	2,781,000	953,000
Derivative liabilities	0	0
Level 2
Assets:
Cash and cash equivalents	0	0
Estimated Fair Value	1,417,855,000	1,503,061,000
Marketable equity securities	4,086,000	3,718,000
Net loans	0	0
Accrued interest receivable	0	0
Derivative assets	77,148,000	81,838,000
Liabilities:
Deposits	935,603,000	886,117,000
Customer repurchase agreements	271,714,000	290,964,000
Accrued interest payable	0	0
Derivative liabilities	59,270,000	65,057,000
Level 3
Assets:
Cash and cash equivalents	0	0
Estimated Fair Value	2,078,000	2,459,000
Marketable equity securities	0	0
Net loans	3,754,410,000	3,491,318,000
Accrued interest receivable	0	0
Derivative assets	0	0
Liabilities:
Deposits	0	0
Customer repurchase agreements	0	0
Accrued interest payable	0	0
Derivative liabilities	$ 0	$ 0