10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

OR

☐       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Commission File No.      0-28190

CAMDEN NATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

Maine			01-0413282
(State or other jurisdiction of			(I.R.S. Employer
incorporation or organization)			Identification No.)
2 ELM STREET	CAMDEN	ME	04843
(Address of principal executive offices)			(Zip Code)

Registrant's telephone number, including area code:  (207) 236-8821

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, without par value	CAC	The NASDAQ Stock Market LLC

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 periods 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 ¨

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 ¨

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	☐	Accelerated filer	☒
Non-accelerated filer	☐	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 accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐          No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date:

Outstanding at April 28, 2023: Common stock (no par value) 14,592,804 shares.

CAMDEN NATIONAL CORPORATION

 FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2023

TABLE OF CONTENTS OF INFORMATION REQUIRED IN REPORT

		PAGE
PART I.  FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS
	Consolidated Statements of Condition (unaudited) - March 31, 2023 and December 31, 2022	3
	Consolidated Statements of Income (unaudited) - Three Months Ended March 31, 2023 and 2022	4
	Consolidated Statements of Comprehensive Income (Loss) (unaudited) - Three Months Ended March 31, 2023 and 2022	5
	Consolidated Statements of Changes in Shareholders’ Equity (unaudited) - Three Months Ended March 31, 2023 and 2022	6
	Consolidated Statements of Cash Flows (unaudited) - Three Months Ended March 31, 2023 and 2022	7
	Notes to the Unaudited Consolidated Financial Statements	8
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	43
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	70
ITEM 4.	CONTROLS AND PROCEDURES	71
PART II. OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	72
ITEM 1A.	RISK FACTORS	72
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	72
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	72
ITEM 4.	MINE SAFETY DISCLOSURES	72
ITEM 5.	OTHER INFORMATION	72
ITEM 6.	EXHIBITS	73
SIGNATURES		74

2

PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF CONDITION

(unaudited)

(In thousands, except number of shares)	March 31,  2023		December 31,  2022
ASSETS
Cash and due from banks	$	53,867	$	50,566
Interest-bearing deposits in other banks (including restricted cash)	21,874		24,861
Total cash, cash equivalents and restricted cash	75,741		75,427
Investments:
Trading securities	3,971		3,990
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	686,423		695,875
Held-to-maturity securities, at amortized cost (fair value of $510,999 and $506,193, respectively)	540,074		546,583
Other investments	19,414		12,713
Total investments	1,249,882		1,259,161
Loans held for sale, at fair value (book value of $4,539 and $5,259, respectively)	4,562		5,197
Loans	4,073,108		4,010,353
Less: allowance for credit losses on loans	(37,134)		(36,922)
Net loans	4,035,974		3,973,431
Goodwill	94,697		94,697
Core deposit intangible assets	1,415		1,563
Bank-owned life insurance	99,734		99,142
Premises and equipment, net	35,688		36,022
Deferred tax assets	47,281		50,217
Other assets	71,631		76,993
Total assets	$	5,716,605	$	5,671,850
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits:
Non-interest checking	$	1,047,491	$	1,141,753
Interest checking	1,609,330		1,763,850
Savings and money market	1,409,861		1,439,622
Certificates of deposit	360,103		300,451
Brokered deposits	215,949		181,253
Total deposits	4,642,734		4,826,929
Short-term borrowings	486,318		265,176
Junior subordinated debentures	44,331		44,331
Accrued interest and other liabilities	78,348		84,136
Total liabilities	5,251,731		5,220,572
Commitments and Contingencies (Note 7)
Shareholders’ Equity
Common stock, no par value: authorized 40,000,000 shares, issued and outstanding 14,587,906 and 14,567,325 on March 31, 2023 and December 31, 2022, respectively	115,590		115,069
Retained earnings	468,755		462,164
Accumulated other comprehensive loss	(119,471)		(125,955)
Total shareholders’ equity	464,874		451,278
Total liabilities and shareholders’ equity	$	5,716,605	$	5,671,850

The accompanying notes are an integral part of these consolidated financial statements.

3

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

	Three Months Ended March 31,
(In thousands, except number of shares and per share data)	2023		2022
Interest Income
Interest and fees on loans	$	45,332	$	32,035
Taxable interest on investments	5,963		5,789
Nontaxable interest on investments	763		764
Dividend income	219		106
Other interest income	448		164
Total interest income	52,725		38,858
Interest Expense
Interest on deposits	15,832		1,833
Interest on borrowings	2,085		131
Interest on junior subordinated debentures	528		529
Total interest expense	18,445		2,493
Net interest income	34,280		36,365
Provision (credit) for credit losses	2,002		(1,075)
Net interest income after provision (credit) for credit losses	32,278		37,440
Non-Interest Income
Debit card income	2,938		2,924
Service charges on deposit accounts	1,762		1,833
Income from fiduciary services	1,600		1,631
Brokerage and insurance commissions	1,093		994
Mortgage banking income, net	716		1,034
Bank-owned life insurance	592		576
Other income	1,165		833
Total non-interest income	9,866		9,825
Non-Interest Expense
Salaries and employee benefits	14,573		15,506
Furniture, equipment and data processing	3,211		3,132
Net occupancy costs	2,079		2,144
Debit card expense	1,201		1,066
Consulting and professional fees	1,055		1,007
Regulatory assessments	845		655
Amortization of core deposit intangible assets	148		156
Other expenses	3,053		2,543
Total non-interest expense	26,165		26,209
Income before income tax expense	15,979		21,056
Income Tax Expense	3,252		4,261
Net Income	$	12,727	$	16,795
Per Share Data
Basic earnings per share	$	0.87	$	1.14
Diluted earnings per share	$	0.87	$	1.13
Cash dividends declared per share	$	0.42	$	0.40
Weighted average number of common shares outstanding	14,573,122		14,741,271
Diluted weighted average number of common shares outstanding	14,631,542		14,822,332

The accompanying notes are an integral part of these consolidated financial statements.  

4

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited)

	Three Months Ended March 31,
(In thousands)	2023		2022
Net Income	$	12,727	$	16,795
Other comprehensive income (loss):
Net change in unrealized loss on debt securities, net of tax	9,094		(72,811)
Net change in unrealized gain on cash flow hedging derivatives, net of tax	(2,605)		2,945
Net change in other comprehensive income for supplemental executive retirement plan and other postretirement benefit plan, net of tax	(5)		182
Other comprehensive income (loss)	6,484		(69,684)
Comprehensive Income (Loss)	$	19,211	$	(52,889)

The accompanying notes are an integral part of these consolidated financial statements.

5

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(unaudited)

	Three Months Ended
	Common Stock			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
(In thousands, except number of shares and per share data)	Shares Outstanding	Amount
Balance at December 31, 2021	14,739,956	$	123,111	$	424,412	$	(6,229)	$	541,294
Net income	—	—		16,795		—		16,795
Other comprehensive loss, net of tax	—	—		—		(69,684)		(69,684)
Stock-based compensation expense	—	624		—		—		624
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings	19,540	(114)		—		—		(114)
Common stock repurchased	(13,086)	(609)		—		—		(609)
Cash dividends declared ($0.40 per share)	—	—		(5,860)		—		(5,860)
Balance at March 31, 2022	14,746,410	$	123,012	$	435,347	$	(75,913)	$	482,446
Balance at December 31, 2022	14,567,325	$	115,069	$	462,164	$	(125,955)	$	451,278
Net income	—	—		12,727		—		12,727
Other comprehensive loss, net of tax	—	—		—		6,484		6,484
Stock-based compensation expense	—	459		—		—		459
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings	20,581	62		—		—		62
Cash dividends declared ($0.42 per share)	—	—		(6,136)		—		(6,136)
Balance at March 31, 2023	14,587,906	$	115,590	$	468,755	$	(119,471)	$	464,874

The accompanying notes are an integral part of these consolidated financial statements.

6

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Three Months Ended March 31,
(In thousands)	2023		2022
Operating Activities
Net Income	$	12,727	$	16,795
Adjustments to reconcile net income to net cash provided by operating activities:
Originations of mortgage loans held for sale	(34,397)		(47,671)
Proceeds from the sale of mortgage loans	35,501		47,771
Gain on sale of mortgage loans, net of origination costs	(384)		(1,132)
Provision (credit) for credit losses	2,002		(1,075)
Depreciation and amortization expense	815		899
Investment securities amortization and accretion, net	605		1,217
Stock-based compensation expense	459		624
Amortization of core deposit intangible assets	148		156
Purchase accounting accretion, net	(34)		(80)
Net (increase) decrease in derivative collateral posted	(1,370)		24,070
(Increase) decrease in other assets	(189)		998
(Decrease) increase in other liabilities	(1,367)		178
Net cash provided by operating activities	14,516		42,750
Investing Activities
Proceeds from available-for-sale debt securities	18,888		69,572
Proceeds from sales, calls and maturities of available-for-sale debt securities	—		(77,865)
Proceeds from maturities of held-to-maturity securities	6,216		—
Net increase in loans	(63,055)		(102,976)
Purchase of Federal Home Loan Bank stock	(13,591)		(1,799)
Proceeds from sale of Federal Home Loan Bank stock	6,890		1,892
Purchase of premises and equipment	(495)		(393)
Recoveries of previously charged-off loans	107		62
Proceeds from the sale of other real estate owned	—		287
Net cash used in investing activities	(45,040)		(111,220)
Financing Activities
Net decrease in deposits	(184,195)		(32,225)
Net proceeds from borrowings less than 90 days	221,142		26,060
Common stock repurchases	—		(542)
Exercise of stock options and issuance of restricted stock, net of repurchase for tax withholdings	62		(114)
Cash dividends paid on common stock	(6,135)		(5,911)
Finance lease payments	(36)		(40)
Net cash provided (used in) by financing activities	30,838		(12,772)
Net increase (decrease) in cash, cash equivalents and restricted cash	314		(81,242)
Cash, cash equivalents, and restricted cash at beginning of period	75,427		220,625
Cash, cash equivalents and restricted cash at end of period	$	75,741	$	139,383
Supplemental information
Interest paid	17,840		2,470
Income taxes paid	146		150
Cash dividends declared, not paid	6,135		5,908
Unsettled common stock repurchase	—		67

The accompanying notes are an integral part of these consolidated financial statements.

7

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited consolidated interim financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include all disclosures required by accounting principles generally accepted in the United States of America for complete presentation of financial statements. In the opinion of management, the consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the consolidated statements of condition of Camden National Corporation (the "Company") as of March 31, 2023 and December 31, 2022, the consolidated statements of income for the three months ended March 31, 2023 and 2022, the consolidated statements of comprehensive (loss) income for the three months ended March 31, 2023 and 2022, the consolidated statements of changes in shareholders' equity for the three months ended March 31, 2023 and 2022, and the consolidated statements of cash flows for the three months ended March 31, 2023 and 2022. The consolidated financial statements include the accounts of the Company and Camden National Bank (the "Bank"), a wholly-owned subsidiary of the Company (which includes the consolidated accounts of Healthcare Professional Funding Corporation ("HPFC") and Property A, Inc.). All intercompany accounts and transactions have been eliminated in consolidation. Assets held by the Bank in a fiduciary capacity, through Camden National Wealth Management, a division of the Bank, are not assets of the Company and, therefore, are not included in the consolidated statements of condition. The Company also owns 100% of the common stock of Camden Capital Trust A and Union Bankshares Capital Trust I. These entities are unconsolidated subsidiaries of the Company. Certain reclassifications may have been made to prior period amounts to conform to the current period presentation. Any such reclassifications did not impact net income or shareholders' equity as previously reported. Net income reported for the three months ended March 31, 2023, is not necessarily indicative of the results that may be expected for the full year. The information in this report should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

8

The acronyms, abbreviations and definitions identified below are used throughout this Form 10-Q, including Part I. "Financial Information" and Part II. "Management's Discussion and Analysis of Financial Condition and Results of Operations." The following is provided to aid the reader and provide a reference page when reviewing these sections of the Form 10-Q.

Acronym	Description	Acronym	Description
AFS:	Available-for-sale	FRBB:	Federal Reserve Bank of Boston
ALCO:	Asset/Liability Committee	GAAP:	Generally accepted accounting principles in the United States
ACL:	Allowance for credit losses	GDP:	Gross domestic product
AOCI:	Accumulated other comprehensive income (loss)	HPFC:	Healthcare Professional Funding Corporation, a wholly-owned subsidiary of Camden National Bank
ASC:	Accounting Standards Codification	HTM:	Held-to-maturity
ASU:	Accounting Standards Update	IRS:	Internal Revenue Service
Bank:	Camden National Bank, a wholly-owned subsidiary of Camden National Corporation	LGD:	Loss given default
BOLI:	Bank-owned life insurance	LIBOR:	London Interbank Offered Rate
Board ALCO:	Board of Directors' Asset/Liability Committee	LTIP:	Long-Term Performance Share Plan
CARES Act:	Coronavirus Aid, Relief, and Economic Security Act, signed into law in March 2020 in response to COVID-19	Management ALCO:	Management Asset/Liability Committee
CCTA:	Camden Capital Trust A, an unconsolidated entity formed by Camden National Corporation	MBS:	Mortgage-backed security
CDs:	Certificate of deposits	MSPP:	Management Stock Purchase Plan
CECL:	Current Expected Credit Losses	N/A:	Not applicable
Company:	Camden National Corporation	N.M.:	Not meaningful
CMO:	Collateralized mortgage obligation	OCC:	Office of the Comptroller of the Currency
CUSIP:	Committee on Uniform Securities Identification Procedures	OCI:	Other comprehensive income (loss)
DCRP:	Defined Contribution Retirement Plan	OREO:	Other real estate owned
EPS:	Earnings per share	PD:	Probability of default
FASB:	Financial Accounting Standards Board	SBA:	U.S. Small Business Administration
FDIC:	Federal Deposit Insurance Corporation	SBA PPP:	U.S. Small Business Administration Paycheck Protection Program
FHLB:	Federal Home Loan Bank	SERP:	Supplemental executive retirement plans
FHLBB:	Federal Home Loan Bank of Boston	SOFR:	Secured Overnight Financing Rate
FHLMC:	Federal Home Loan Mortgage Corporation	TDR:	Troubled-debt restructured loan
FNMA:	Federal National Mortgage Association	UBCT:	Union Bankshares Capital Trust I, an unconsolidated entity formed by Union Bankshares Company that was subsequently acquired by Camden National Corporation
FOMC:	Federal Open Market Committee	U.S.:	United States of America
FRB:	Federal Reserve System Board of Governors

9

NOTE 2 – RECENT ACCOUNTING PRONOUNCEMENTS

The Company adopted and updated its accounting policies for the following accounting standards that have been applied to the Company's interim consolidated financial statements for the three months ended March 31, 2023:

ASU No. 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method ("ASU 2022-01"). The FASB issued ASU 2022-01 to amend ASU 2017-12, which was adopted by the Company in 2018. This amendment renames the "last-of-layer" method to the "portfolio layer" method, permits non-repayable financial assets to be included in a closed portfolio hedged using the portfolio layer method, and provides additional guidance for entities that apply the portfolio layer method of hedge accounting in accordance with Topic 815. The Company adopted ASU 2022-01, as amended, effective January 1, 2023 and leveraged the "portfolio layer" method to enter into interest rate swaps to hedge fixed-rate residential mortgages during the three months ended March 31, 2023. There was no impact to the Company's consolidated financial statements upon adoption. Refer to Note 8 of the consolidated financial statements for further details.

ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02"). The FASB issued ASU 2022-02 to provide new guidance on TDRs and charge-offs for entities that have adopted ASU 2016-13. The Company adopted ASU 2022-02 effective January 1, 2023 on a prospective basis, and upon adoption there was no impact to the consolidated financial statements. The adoption of ASU 2022-02 eliminates the accounting and disclosure requirements for TDRs, including the requirement to measure the allowance using a discounted cash flow ("DCF") methodology. Beginning January 1, 2023, the Company no longer establishes a specific reserve for newly modified loans to borrowers experiencing financial difficulty. Instead, these modifications are included in their respective segments, and the ACL is calculated utilizing models that consider the borrowers' probability of default, loss given default and exposure at default.

ASU 2022-02 also requires disclosure of modifications of loans to borrowers experiencing financial difficulty if the modification involves principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, a term extension, or a combination of any of these types of modifications. Additionally, ASU 2022-02 requires the disclosure of current period gross charge-offs by year of loss origination (vintage) which are required to be applied prospectively as of January 1, 2023, the Company's date of adoption. Refer to Note 4 of the consolidated financial statements for further details.

The following provides a brief description of recently issued accounting pronouncements that have yet to be adopted by the Company:

ASU No. 2023-02, Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method ("ASU 2023-02"). The FASB issued ASU 2023-02 to permit reporting entities to elect to account for 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. Under the proportional amortization method, the initial cost of the investment is amortized in proportion to the income tax credits or other tax benefits received. ASU 2023-02 is effective for interim and annual periods beginning after December 15, 2023. While the Company is currently evaluating, it does not expect the adoption of ASU 2023-02 to have a material impact on its consolidated financial statements.

NOTE 3 – INVESTMENTS

Trading Securities

Trading securities are reported on the Company's consolidated statements of condition at fair value. As of March 31, 2023 and December 31, 2022, the fair value of the Company's trading securities were $4.0 million. These securities are held in a rabbi trust account and invested in mutual funds. The trading securities will be used for future payments associated with the Company's deferred compensation plan for eligible employees and directors.

10

AFS Debt Securities

AFS debt securities are reported on the Company's consolidated statements of condition at fair value. The following table summarizes the amortized cost, estimated fair value, and unrealized gains (losses) of AFS debt securities, as of the dates indicated:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
March 31, 2023
Obligations of states and political subdivisions	$	49,142	$	41	$	(132)	$	49,051
MBS issued or guaranteed by U.S. government-sponsored enterprises	585,249		214		(77,632)		507,831
CMO issued or guaranteed by U.S. government-sponsored enterprises	117,552		—		(11,319)		106,233
Subordinated corporate bonds	25,678		—		(2,370)		23,308
Total AFS debt securities	$	777,621	$	255	$	(91,453)	$	686,423
December 31, 2022
Obligations of states and political subdivisions	$	49,678	$	11	$	(463)	$	49,226
MBS issued or guaranteed by U.S. government-sponsored enterprises	598,845		131		(84,957)		514,019
CMO issued or guaranteed by U.S. government-sponsored enterprises	122,760		—		(13,413)		109,347
Subordinated corporate bonds	25,677		3		(2,397)		23,283
Total AFS debt securities	$	796,960	$	145	$	(101,230)	$	695,875

As of March 31, 2023 and December 31, 2022, there was no allowance carried on AFS debt securities.

In June of 2022, the Company transferred securities with a fair value of $520.3 million from AFS to HTM. The unrealized losses on the AFS debt securities at the time of transfer were $72.1 million, pre-tax, and were reported within AOCI. These unrealized losses are being amortized over the remaining life of the securities from AOCI into interest income on the consolidated statements of income. At March 31, 2023 the net unrealized losses on the transferred securities reported within AOCI were $50.9 million, net of a deferred tax asset of $13.9 million and at December 31, 2022 were $52.2 million, net of a deferred tax asset of $14.3 million.

The net unrealized losses on AFS debt securities reported within AOCI (excluding the aforementioned securities transferred from AFS to HTM) at March 31, 2023, were $71.6 million, net of a deferred tax asset of $19.6 million and at December 31, 2022 were $79.4 million, net of a deferred tax asset of $21.7 million.

For the three months ended March 31, 2023 and 2022, the Company did not sell any AFS debt securities.

11

The following table presents the Company's AFS debt securities with gross unrealized losses, for which an ACL has not been recorded, segregated by the length of time the securities have been in a continuous loss position, as of the dates indicated:  

		Less Than 12 Months				12 Months or More				Total
(In thousands, except number of holdings)	Number of Holdings	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
March 31, 2023
Obligations of states and political subdivisions	54	$	19,151	$	(48)	$	10,384	$	(84)	$	29,535	$	(132)
MBS issued or guaranteed by U.S. government-sponsored enterprises	172	3,310		(80)		488,861		(77,552)		492,171		(77,632)
CMO issued or guaranteed by U.S. government-sponsored enterprises	62	2,506		(56)		103,727		(11,263)		106,233		(11,319)
Subordinated corporate bonds	14	6,179		(412)		17,129		(1,958)		23,308		(2,370)
Total AFS debt securities	302	$	31,146	$	(596)	$	620,101	$	(90,857)	$	651,247	$	(91,453)
December 31, 2022
Obligations of states and political subdivisions	83	42,276		(463)		—		—		42,276		(463)
MBS issued or guaranteed by U.S. government-sponsored enterprises	175	118,290		(11,521)		381,355		(73,436)		499,645		(84,957)
CMO issued or guaranteed by U.S. government-sponsored enterprises	64	47,340		(4,589)		62,007		(8,824)		109,347		(13,413)
Subordinated corporate bonds	13	7,687		(384)		14,593		(2,013)		22,280		(2,397)
Total AFS debt securities	335	$	215,593	$	(16,957)	$	457,955	$	(84,273)	$	673,548	$	(101,230)

For the three months ended March 31, 2023 and 2022, the unrealized losses on the Company's AFS debt securities have not been recognized into income because management does not intend to sell and it is not more-likely-than-not it will be required to sell any of the AFS debt securities before recovery of its amortized cost basis. Furthermore, the unrealized losses were due to changes in interest rates and other market conditions and were not reflective of credit events. Agency-backed and government-sponsored enterprise securities have a long history with no credit losses, including during times of severe stress. The principal and interest payments on agency guaranteed debt is backed by the U.S. government. Government-sponsored enterprises similarly guarantee principal and interest payments and carry an implicit guarantee from the U.S. Department of the Treasury. Additionally, government-sponsored enterprise securities are exceptionally liquid, readily marketable, and provide a substantial amount of price transparency and price parity, indicating a perception of zero credit losses. AFS municipal debt holdings are comprised solely of high credit quality (rated A- or higher) state and municipal obligations. High credit quality state and municipal obligations have a history of zero to near-zero credit loss. Subordinated corporate bonds are primarily comprised of investment grade senior notes and senior subordinated notes of other financial institutions.

At March 31, 2023 and December 31, 2022, total accrued interest receivable on AFS debt securities, which has been excluded from reported amortized cost basis on AFS debt securities, was $2.0 million and $1.9 million, respectively, and was reported within other assets on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date.

The amortized cost and estimated fair values of the Company's AFS debt securities by contractual maturity at March 31, 2023, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-related securities are shown in total, as their maturities are highly variable.

12

(In thousands)	Amortized Cost		Fair Value
Due in one year or less	$	1,002	$	1,003
Due after one year through five years	13,612		12,323
Due after five years through ten years	60,206		59,032
Due after ten years	—		—
Subtotal	74,820		72,358
Mortgage-related securities	702,801		614,065
Total	$	777,621	$	686,423

HTM Debt Securities

HTM debt securities are reported on the Company's consolidated statements of condition at amortized cost. The following table summarizes the amortized cost, estimated fair value and unrealized gains (losses) of HTM debt securities as of the dates indicated:

(In thousands)	Amortized Cost(1)		Unrealized Gains		Unrealized Losses		Fair Value
March 31, 2023
Obligations of U.S. government-sponsored enterprises	$	7,491	$	—	$	(507)	$	6,984
Obligations of states and political subdivisions	56,049		1,683		(760)		56,972
MBS issued or guaranteed by U.S. government-sponsored enterprises	314,589		—		(18,932)		295,657
CMO issued or guaranteed by U.S. government-sponsored enterprises	143,030		—		(10,628)		132,402
Subordinated corporate bonds	18,915		607		(538)		18,984
Total HTM debt securities	$	540,074	$	2,290	$	(31,365)	$	510,999
December 31, 2022
Obligations of U.S. government-sponsored enterprises	$	7,457	$	—	$	(777)	$	6,680
Obligations of states and political subdivisions	55,978		431		(1,610)		54,799
MBS issued or guaranteed by U.S. government-sponsored enterprises	317,406		—		(24,766)		292,640
CMO issued or guaranteed by U.S. government-sponsored enterprises	145,069		—		(13,724)		131,345
Subordinated corporate bonds	20,673		332		(276)		20,729
Total HTM debt securities	$	546,583	$	763	$	(41,153)	$	506,193

(1) Amortized cost presented above includes unamortized unrealized losses for March 31, 2023 and December 31, 2022: $1.1 million in obligations of U.S. government-sponsored enterprises for both periods, $6.0 million and $6.1 million in obligations of state and political subdivisions, $37.4 million and $38.4 million in mortgage-backed securities, $20.1 million and $20.7 million in collateralized mortgage obligations and $108,000 and $117,000 in subordinated corporate bonds.

13

Agency-backed and government-sponsored enterprise securities have a long history with no credit losses, including during times of severe stress. The principal and interest payments on agency-guaranteed debt is backed by the U.S. government. Government-sponsored enterprises similarly guarantee principal and interest payments and carry an implicit guarantee from the U.S. Department of the Treasury. Additionally, government-sponsored enterprise securities are exceptionally liquid, readily marketable, and provide a substantial amount of price transparency and price parity, indicating a perception of zero credit losses. HTM municipal debt holdings are comprised solely of high credit quality (rated A- or higher) state and municipal obligations. High credit quality state and municipal obligations have a history of zero to near-zero credit loss. Subordinated corporate bonds are primarily comprised of investment grade senior notes and senior subordinated notes of other financial institutions. For the three months ended March 31, 2023 and 2022, the Company recorded a provision for credit losses on its HTM debt securities portfolio of $1.8 million and $0, respectively. The provision for credit losses recorded during the three months ended March 31, 2023 was due to the write-off of a Signature Bank subordinated corporate bond, which was designated as HTM and previously carried no ACL, as the bank failed during the quarter. Additionally, the Company wrote-off accrued interest receivable due from the Signature Bank subordinated corporate bond of $8,000 during the three months ended March 31, 2023, and it was recorded as a reversal of interest income on the consolidated statements of income. The Company did not write-off any accrued interest for the three months ended March 31, 2022.

The Company evaluated its HTM debt securities with an amortized cost as of March 31, 2023 and December 31, 2022, and determined that the expected credit loss on its HTM portfolio was immaterial, and therefore it did not carry an ACL at either date.

As of March 31, 2023 and December 31, 2022, none of the Company's HTM debt securities were past due or on non-accrual status. For the three months ended March 31, 2023 and 2022, the Company did not recognize any interest income on non-accrual HTM debt securities. At March 31, 2023 and December 31, 2022, total accrued interest receivable on HTM debt securities, which has been excluded from reported amortized cost basis on HTM debt securities, was $1.5 million and $1.7 million, respectively, and was reported within other assets on the consolidated statements of condition. An allowance was not carried on the HTM debt securities accrued interest receivable at either date.

The amortized cost and estimated fair values of HTM debt securities by contractual maturity at March 31, 2023 are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-related securities are shown in total, as their maturities are highly variable.

(In thousands)	Amortized Cost		Fair Value
Due in one year or less	$	—	$	—
Due after one year through five years	1,285		1,272
Due after five years through ten years	20,527		19,720
Due after ten years	60,643		61,947
Subtotal	82,455		82,939
Mortgage-related securities	457,619		428,060
Total	$	540,074	$	510,999

AFS and HTM Debt Securities Pledged

At March 31, 2023 and December 31, 2022, AFS and HTM debt securities with an amortized cost of $630.2 million and $821.9 million and estimated fair values of $560.3 million and $726.5 million, respectively, were pledged to secure FHLBB advances, public deposits, and securities sold under agreements to repurchase and for other purposes required or permitted by law.

14

Other Investments

The Company's FHLBB and FRB common stock are reported at cost within other investments on the consolidated statements of condition. The Company evaluates these investments for impairment based on the ultimate recoverability of the par value. The Company did not record any impairment on its FHLBB and FRB stock for the three months ended March 31, 2023 and 2022.

The following table summarizes the Company's investment in FHLBB stock and FRBB stock as presented within other investments on the consolidated statements of condition, as of the dates indicated:

(In thousands)	March 31, 2023		December 31, 2022
FHLBB	$	14,040	$	7,339
FRB	5,374		5,374
Total other investments	$	19,414	$	12,713

NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS

Loans

The composition of the Company’s loan portfolio, excluding residential loans held for sale, was as follows for the dates indicated:

(In thousands)	March 31, 2023		December 31, 2022
Commercial Loans:
Commercial real estate - non-owner-occupied	$	1,328,793	$	1,292,443
Commercial real estate - owner-occupied	337,824		332,494
Commercial	421,099		430,131
Total commercial loans	2,087,716		2,055,068
Retail Loans:
Residential real estate	1,733,147		1,700,266
Home equity	232,512		234,428
Consumer	19,733		20,591
Total retail loans	1,985,392		1,955,285
Total loans	$	4,073,108	$	4,010,353

The loan balances for each portfolio segment presented above are net of their respective unamortized fair value mark discount on acquired loans and net of unamortized loan origination costs for the dates indicated:

(In thousands)	March 31, 2023		December 31, 2022
Net unamortized fair value mark discount on acquired loans	$	(279)	$	(313)
Net unamortized loan origination costs	6,944		6,890
Total	$	6,665	$	6,577

The Company's lending activities are primarily conducted in Maine, but also include loan production offices in Massachusetts and New Hampshire. The Company originates single- and multi-family residential loans, commercial real estate loans, business loans, municipal loans and a variety of consumer loans. In addition, the Company makes loans for the construction of residential homes, multi-family properties and commercial real estate properties. The ability and willingness of borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the geographic area and the general economy.

15

SBA PPP Loans. Beginning in April 2020, the Company originated SBA PPP loans issued to qualifying businesses as part of the federal stimulus packages issued due to the COVID-19 pandemic. This program provided qualifying businesses a specialized, low-interest-rate loan by the U.S. Treasury Department and was administered by the SBA. SBA PPP loans provided borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilized the loan proceeds to cover employee compensation-related business operating costs, as well as certain other costs up to pre-established limits. Effective May 31, 2021, the SBA PPP loan program ended and the Company ceased originating loans under this program. At March 31, 2023 and December 31, 2022, five loans with a total principal balance of $583,000 and $648,000, respectively, remain outstanding and were presented in commercial loans.

Related Party Loans. In the normal course of business, the Bank makes loans to certain officers, directors and their associated companies, under terms that are consistent with the Company's lending policies and regulatory requirements and that do not involve more than the normal risk of collectability or present other unfavorable features. At March 31, 2023 and December 31, 2022, outstanding loans to certain officers, directors and their associated companies were less than 5% of the Company's shareholders' equity.

16

Loan Sales

For the three months ended March 31, 2023 and 2022, the Company sold $35.1 million and $46.6 million, respectively, of residential mortgage loans on the secondary market, which resulted in gains on the sale of loans (net of costs) of $384,000 and $1.1 million, respectively.

At March 31, 2023 and December 31, 2022, the Company had certain residential mortgage loans with a principal balance of $4.5 million and $5.3 million, respectively, designated as held for sale. The Company has elected the fair value option of accounting for its loans held for sale, and at March 31, 2023 and December 31, 2022, recorded an unrealized gain (loss) of $23,000 and ($62,000), respectively. For the three months ended March 31, 2023 and 2022, the Company recorded unrealized gains on loans held for sale recorded within mortgage banking income, net, on the Company's consolidated statements of income of $85,000 and $142,000, respectively.

The Company has forward delivery commitments with a secondary market investor on each of its loans held for sale at March 31, 2023 and December 31, 2022. Refer to Note 8 for further discussion of the Company's forward delivery commitments.

ACL on Loans

The Company manages its loan portfolio proactively to effectively identify problem credits and assess trends early, implement effective work-out strategies, and take charge-offs as promptly as practical. In addition, the Company continuously reassesses its underwriting standards in response to credit risk posed by changes in economic conditions. The Company monitors and manages credit risk through the following governance structure:

•The Credit Risk and Special Assets team and the Credit Risk Policy Committee, which is an internal management committee comprised of various executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Credit Risk and Special Assets, Compliance, and Commercial and Retail Banking, oversee the Company's systems and procedures to monitor the credit quality of its loan portfolio, conduct a loan review program, and maintain the integrity of the loan rating system.

•The adequacy of the ACL is overseen by the Management Provision Committee, which is an internal management committee comprised of various Company executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Credit Risk and Special Assets, Compliance, and Commercial and Retail Banking. The Management Provision Committee supports the oversight efforts of the Audit Committee of the Board of Directors.

•The Directors' Credit Committee of the Board of Directors reviews large credit exposures, monitors external loan review reports, reviews the lending authority for individual loan officers when required, and has approval authority and responsibility for all matters regarding the loan policy and other credit-related policies, including reviewing and monitoring asset quality trends, and concentration levels.

•The Audit Committee of the Board of Directors has approval authority and oversight responsibility for the ACL adequacy and methodology.

Segmentation. For purposes of determining the ACL on loans, the Company disaggregates its loans into portfolio segments. Each portfolio segment possesses unique risk characteristics that are considered when determining the appropriate level of allowance. As of March 31, 2023 and December 31, 2022, the Company's loan portfolio segments, as determined based on the unique risk characteristics of each, include the following:

Commercial Real Estate - Non-Owner-Occupied. Non-owner-occupied commercial real estate loans are, in substance, all commercial real estate loans that are not categorized by the Company as owner-occupied commercial real estate loans. Non-owner-occupied commercial estate loans are investment properties in which the primary source for repayment of the loan by the borrower is derived from rental income associated with the property or the proceeds of the sale, refinancing, or permanent refinancing of the property. Non-owner-occupied commercial real estate loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, multi-family residential, commercial/retail office space, industrial/warehouse space, hotels, assisted living facilities and other specific use properties. Also included within the non-owner-occupied commercial real estate loan segment are construction projects until they are completed. Commercial real estate loans are typically written with amortizing payment structures. Collateral values are determined based upon appraisals and evaluations in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines.

17

Commercial Real Estate - Owner-Occupied. Generally, owner-occupied commercial real estate loans are properties that are owned and operated by the borrower, and the primary source for repayment is the cash flow from the ongoing operations and activities conducted by the borrower's business. Owner-occupied commercial real estate loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, commercial/retail office space, restaurants, educational and medical practice facilities and other specific use properties. Commercial real estate loans are typically written with amortizing payment structures. Collateral values are determined based upon appraisals and evaluations in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines.

Commercial. Commercial loans consist of revolving and term loan obligations extended to business and corporate enterprises for the purpose of financing working capital and/or capital investment. Collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, and/or real estate, if applicable. Commercial loans are primarily paid by the operating cash flow of the borrower. Commercial loans may be secured or unsecured.

Residential Real Estate.  Residential real estate loans held in the Company's loan portfolio are made to borrowers who demonstrate the ability to make scheduled payments with full consideration to underwriting factors. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines. Collateral consists of mortgage liens on one- to four-family residences, including for investment purposes.

Home Equity. Home equity loans and lines of credit are made to qualified individuals and are secured by senior or junior mortgage liens on owner-occupied one- to four-family homes, condominiums, or vacation homes. Each home equity loan has a fixed rate and is billed as equal payments comprised of principal and interest. Each home equity line of credit has a variable rate and is billed as interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the principal balance plus all accrued interest. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines.

Consumer. Consumer loan products include personal lines of credit and amortizing loans made to qualified individuals for various purposes such as education, auto loans, debt consolidation, personal expenses or overdraft protection. Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines, as applicable. Consumer loans may be secured or unsecured.

18

The following table presents the activity in the ACL on loans for the periods indicated:

	Commercial Real Estate
(In thousands)	Non-Owner-Occupied		Owner- Occupied		Commercial		Residential Real Estate		Home Equity		Consumer		Total
At or For The Three Months Ended March 31, 2023
Beginning balance, December 31, 2022	$	17,296	$	2,362	$	5,446	$	9,089	$	2,225	$	504	$	36,922
Charge-offs	—		—		(312)		(18)		—		(4)		(334)
Recoveries	1		—		99		4		—		3		107
(Credit) provision for loan losses	(973)		108		(652)		1,737		215		4		439
Ending balance, March 31, 2023	$	16,324	$	2,470	$	4,581	$	10,812	$	2,440	$	507	$	37,134
At or For The Three Months Ended March 31, 2022
Beginning balance, December 31, 2021	$	18,834	$	2,539	$	4,202	$	6,133	$	1,469	$	79	$	33,256
Charge-offs	—		—		(245)		—		—		(67)		(312)
Recoveries	1		2		57		—		—		2		62
(Credit) provision for loan losses	(2,263)		(202)		843		343		(34)		92		(1,221)
Ending balance, March 31, 2022	$	16,572	$	2,339	$	4,857	$	6,476	$	1,435	$	106	$	31,785
At or For The Year Ended December 31, 2022
Beginning balance, December 31, 2021	$	18,834	$	2,539	$	4,202	$	6,133	$	1,469	$	79	$	33,256
Charge-offs	—		—		(1,042)		(66)		—		(134)		(1,242)
Recoveries	3		2		379		—		87		7		478
(Credit) provision for loan losses	(1,541)		(179)		1,907		3,022		669		552		4,430
Ending balance, December 31, 2022	$	17,296	$	2,362	$	5,446	$	9,089	$	2,225	$	504	$	36,922

The ACL on loans increased $200,000 during the three months ended March 31, 2023, to $37.1 million. The net increase was driven by: an overall softening economy and the increasing likelihood of a recession and 2% loan growth during this period, which was primarily driven by residential real estate and commercial real estate - non-owner-occupied.

Credit Concentrations

The Company focuses on maintaining a well-balanced and diversified loan portfolio. Despite such efforts, it is recognized that credit concentrations may occasionally emerge as a result of economic conditions, changes in local demand, natural loan growth and runoff. To identify credit concentrations effectively, all commercial and commercial real estate loans are assigned Standard Industrial Classification codes, North American Industry Classification System codes, and state and county codes. Shifts in portfolio concentrations are monitored. As of March 31, 2023, the Company's total exposure to the lessors of nonresidential buildings' industry and lessors of residential buildings' industry were 13% and 12% of total loans and 32% and 28% of total commercial real estate loans, respectively. There were no other industry exposures exceeding 10% of the Company's total loan portfolio as of March 31, 2023.

Credit Quality Indicators

To further identify loans with similar risk profiles, the Company categorizes each portfolio segment into classes by credit risk characteristic and applies a credit quality indicator to each portfolio segment. The indicators for commercial real estate - non-owner-occupied and owner-occupied, commercial and residential real estate portfolio segments are represented by Grades 1 through 10 as outlined below. In general, risk ratings are adjusted periodically throughout the year as updated analysis and review warrants. This process may include, but is not limited to, annual credit and loan reviews, periodic reviews of loan performance metrics, such as delinquency rates, and quarterly reviews of adversely risk rated loans. The Company uses the following definitions when assessing grades for the purpose of evaluating the risk and adequacy of the ACL on loans:

•Grade 1 through 6 — Grades 1 through 6 represent groups of loans that are not subject to adverse criticism as defined in regulatory guidance. Loans in these groups exhibit characteristics that represent low to moderate risks, which is measured using a variety of credit risk criteria, such as cash flow coverage, debt service coverage, balance sheet leverage, liquidity, management experience, industry position, prevailing economic conditions, support from secondary sources of repayment and other credit factors that may be relevant to a specific loan. In general, these loans are supported by properly margined collateral and guarantees of principal parties.

19

•Grade 7 — Loans with potential weakness (Special Mention). Loans in this category are currently protected based on collateral and repayment capacity and do not constitute undesirable credit risk, but have potential weakness that may result in deterioration of the repayment process at some future date. This classification is used if a negative trend is evident in the obligor’s financial situation. Special mention loans do not sufficiently expose the Company to warrant adverse classification.

•Grade 8 — Loans with definite weakness (Substandard). Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or by collateral pledged. Borrowers experience difficulty in meeting debt repayment requirements. Deterioration is sufficient to cause the Company to look to the sale of collateral.

•Grade 9 — Loans with potential loss (Doubtful). Loans classified as doubtful have all the weaknesses inherent in the substandard grade with the added characteristic that the weaknesses make collection or liquidation of the loan in full highly questionable and improbable. The possibility of some loss is extremely high, but because of specific pending factors that may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined.

•Grade 10 — Loans with definite loss (Loss). Loans classified as loss are considered uncollectible. The loss classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the asset because recovery and collection time may be protracted.

The Company periodically reassesses asset quality indicators to reflect appropriately the risk composition of the Company’s loan portfolio. Home equity and consumer loans are not individually risk rated, but rather analyzed as groups taking into account delinquency rates and other economic conditions which may affect the ability of borrowers to meet debt service requirements, including interest rates and energy costs. Performing loans include loans that are current and loans that are past due less than 90 days. Loans that are past due over 90 days and non-accrual loans, including TDRs prior to adoption of ASU 2022-02, are considered non-performing.

Based on the most recent analysis performed, the risk category of loans by portfolio segment by vintage was as follows as of the dates indicated:

20

(In thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of and for the period ended March 31, 2023
Commercial real estate - non-owner-occupied
Risk rating
Pass (Grades 1-6)	$	32,495	$	348,906	$	292,459	$	158,884	$	123,148	$	343,942	$	—	$	—	$	1,299,834
Special mention (Grade 7)	—		—		166		356		252		388		—		—		1,162
Substandard (Grade 8)	—		177		123		1,255		200		26,042		—		—		27,797
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - non-owner-occupied	$	32,495	$	349,083	$	292,748	$	160,495	$	123,600	$	370,372	$	—	$	—	$	1,328,793
Gross charge-offs for the three months ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate - owner-occupied
Risk rating
Pass (Grades 1-6)	$	17,730	$	54,516	$	79,464	$	27,889	$	21,962	$	106,937	$	—	$	—	$	308,498
Special mention (Grade 7)	—		—		—		—		—		404		—		—		404
Substandard (Grade 8)	—		8		2,228		—		19,993		6,693		—		—		28,922
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - owner occupied	$	17,730	$	54,524	$	81,692	$	27,889	$	41,955	$	114,034	$	—	$	—	$	337,824
Gross charge-offs for the three months ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial
Risk rating
Pass (Grades 1-6)	$	13,993	$	68,567	$	66,044	$	30,359	$	31,455	$	45,211	$	130,278	$	30,254	$	416,161
Special mention (Grade 7)	—		—		—		87		114		180		200		10		591
Substandard (Grade 8)	192		229		88		134		267		1,906		692		839		4,347
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial	$	14,185	$	68,796	$	66,132	$	30,580	$	31,836	$	47,297	$	131,170	$	31,103	$	421,099
Gross charge-offs for the three months ended	$	—	$	—	$	51	$	9	$	—	$	172	$	20	$	60	$	312
Residential Real Estate
Risk rating
Pass (Grades 1-6)	$	47,241	$	544,518	$	572,505	$	236,212	$	77,364	$	252,040	$	347	$	—	$	1,730,227
Special mention (Grade 7)	—		—		—		—		—		—		—		—		—
Substandard (Grade 8)	—		—		—		—		92		2,828		—		—		2,920
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total residential real estate	$	47,241	$	544,518	$	572,505	$	236,212	$	77,456	$	254,868	$	347	$	—	$	1,733,147
Gross charge-offs for the three months ended	$	—	$	—	$	—	$	—	$	—	$	18	$	—	$	—	$	18
Home equity
Risk rating
Performing	$	3,926	$	25,674	$	564	$	338	$	4,655	$	15,125	$	170,075	$	11,717	$	232,074
Non-performing	—		—		—		—		—		12		347		79		438
Total home equity	$	3,926	$	25,674	$	564	$	338	$	4,655	$	15,137	$	170,422	$	11,796	$	232,512
Gross charge-offs for the three months ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer
Risk rating
Performing	$	1,441	$	7,204	$	3,359	$	1,455	$	826	$	2,662	$	2,786	$	—	$	19,733
Non-performing	—		—		—		—		—		—		—		—		—
Total consumer	$	1,441	$	7,204	$	3,359	$	1,455	$	826	$	2,662	$	2,786	$	—	$	19,733
Gross charge-offs for the three months ended	$	—	$	—	$	—	$	—	$	—	$	4	$	—	$	—	$	4

21

(In thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2022
Commercial real estate - non-owner-occupied
Risk rating
Pass (Grades 1-6)	$	339,171	$	287,749	$	160,621	$	125,029	$	108,823	$	242,024	$	—	$	—	$	1,263,417
Special mention (Grade 7)	—		167		364		259		75		321		—		—		1,186
Substandard (Grade 8)	—		127		1,306		203		7,798		18,406		—		—		27,840
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - non-owner-occupied	$	339,171	$	288,043	$	162,291	$	125,491	$	116,696	$	260,751	$	—	$	—	$	1,292,443
Commercial real estate - owner-occupied
Risk rating
Pass (Grades 1-6)	$	60,127	$	80,781	$	28,378	$	23,381	$	39,554	$	70,568	$	—	$	—	$	302,789
Special mention (Grade 7)	—		2,053		—		19,992		—		411		—		—		22,456
Substandard (Grade 8)	17		—		—		—		3,266		3,966		—		—		7,249
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - owner occupied	$	60,144	$	82,834	$	28,378	$	43,373	$	42,820	$	74,945	$	—	$	—	$	332,494
Commercial
Risk rating
Pass (Grades 1-6)	$	73,537	$	70,110	$	32,272	$	33,491	$	22,271	$	26,245	$	135,157	$	30,191	$	423,274
Special mention (Grade 7)	—		—		93		141		70		189		1,196		12		1,701
Substandard (Grade 8)	149		52		133		216		846		1,524		50		2,186		5,156
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial	$	73,686	$	70,162	$	32,498	$	33,848	$	23,187	$	27,958	$	136,403	$	32,389	$	430,131
Residential Real Estate
Risk rating
Pass (Grades 1-6)	$	533,035	$	579,216	$	244,691	$	79,492	$	50,214	$	210,262	$	340	$	—	$	1,697,250
Special mention (Grade 7)	—		—		—		—		—		23		—		—		23
Substandard (Grade 8)	—		—		—		—		163		2,830		—		—		2,993
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total residential real estate	$	533,035	$	579,216	$	244,691	$	79,492	$	50,377	$	213,115	$	340	$	—	$	1,700,266
Home equity
Risk rating
Performing	$	26,712	$	693	$	341	$	4,842	$	7,730	$	8,551	$	173,338	$	11,735	$	233,942
Non-performing	—		—		—		—		—		27		377		82		486
Total home equity	$	26,712	$	693	$	341	$	4,842	$	7,730	$	8,578	$	173,715	$	11,817	$	234,428
Consumer
Risk rating
Performing	$	8,009	$	3,816	$	1,702	$	1,188	$	345	$	2,462	$	3,069	$	—	$	20,591
Non-performing	—		—		—		—		—		—		—		—		—
Total consumer	$	8,009	$	3,816	$	1,702	$	1,188	$	345	$	2,462	$	3,069	$	—	$	20,591

22

Past Due and Non-Accrual Loans

The Company closely monitors the performance of its loan portfolio. A loan is placed on non-accrual status when the financial condition of the borrower is deteriorating, payment in full of both principal and interest is not expected as scheduled, or principal or interest has been in default for 90 days or more. Exceptions may be made if the asset is secured by collateral sufficient to satisfy both the principal and accrued interest in full and collection is reasonably assured. When one loan to a borrower is placed on non-accrual status, all other loans to the borrower are re-evaluated to determine if they should also be placed on non-accrual status. All previously accrued and unpaid interest is reversed at this time. A loan will return to accrual status when collection of principal and interest is assured and the borrower has demonstrated timely payments of principal and interest for a reasonable period, generally at least six months. Unsecured loans, however, are not normally placed on non-accrual status because they are generally charged-off once their collectability is in doubt.

The following is a loan aging analysis by portfolio segment (including loans past due over 90 days and non-accrual loans) and loans past due over 90 days and accruing as of the following dates:

(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans Outstanding		Loans > 90 Days Past Due and Accruing
March 31, 2023
Commercial real estate - non-owner-occupied	$	34	$	—	$	10	$	44	$	1,328,749	$	1,328,793	$	—
Commercial real estate - owner-occupied	77		—		47		124		337,700		337,824
Commercial	965		79		465		1,509		419,590		421,099		—
Residential real estate	283		194		459		936		1,732,211		1,733,147		—
Home equity	552		106		151		809		231,703		232,512		—
Consumer	32		29		—		61		19,672		19,733		—
Total	$	1,943	$	408	$	1,132	$	3,483	$	4,069,625	$	4,073,108	$	—
December 31, 2022
Commercial real estate - non-owner-occupied	$	267	$	—	$	11	$	278	$	1,292,165	$	1,292,443	$	—
Commercial real estate - owner-occupied	55		—		47		102		332,392		332,494		—
Commercial	667		134		640		1,441		428,690		430,131		—
Residential real estate	852		186		524		1,562		1,698,704		1,700,266		—
Home equity	357		—		171		528		233,900		234,428		—
Consumer	23		11		—		34		20,557		20,591		—
Total	$	2,221	$	331	$	1,393	$	3,945	$	4,006,408	$	4,010,353	$	—

The following table presents the amortized cost basis of loans on non-accrual status (including non-accruing TDRs prior to adoption of ASU 2022-02) by portfolio segment as of the dates indicated:

	March 31, 2023						December 31, 2022
(In thousands)	Non-Accrual Loans With an Allowance		Non-Accrual Loans Without an Allowance		Total Non-Accrual Loans		Non-Accrual Loans With an Allowance		Non-Accrual Loans Without an Allowance		Total Non-Accrual Loans
Commercial real estate - non-owner-occupied	$	—	$	10	$	10	$	—	$	11	$	11
Commercial real estate - owner-occupied	—		47		47		—		46		46
Commercial	606		142		748		415		300		715
Residential real estate	1,359		356		1,715		1,314		419		1,733
Home equity	377		61		438		421		65		486
Consumer	—		—		—		—		—		—
Total	$	2,342	$	616	$	2,958	$	2,150	$	841	$	2,991

23

The following table presents the amortized cost basis of collateral-dependent non-accrual loans (including non-accruing TDRs prior to adoption of ASU 2022-02) by portfolio segment and collateral type, as of the dates indicated:

	March 31, 2023						December 31, 2022
	Collateral Type				Total Collateral -Dependent Non-Accrual Loans		Collateral Type				Total Collateral -Dependent Non-Accrual Loans
(In thousands)	Real Estate		General Business Assets				Real Estate		General Business Assets
Residential real estate	$	325	$	—	$	325	$	387	$	—	$	387
Home equity	—		—		—		—		—		—
Total	$	325	$	—	$	325	$	387	$	—	$	387

Collateral-dependent loans are loans for which repayment is expected to be provided substantially by the underlying collateral and there are no other available and reliable sources of repayment.

Interest income that would have been recognized if loans on non-accrual status had been current in accordance with their original terms is estimated to have been $25,000 and $46,000 for the three months ended March 31, 2023 and 2022, respectively.

The Company's policy is to reverse previously recorded interest income when a loan is placed on non-accrual. As a result, the Company did not record any interest income on its non-accruals for the three months ended March 31, 2023 and 2022. At March 31, 2023 and December 31, 2022, total accrued interest receivable on loans, which has been excluded from reported amortized cost basis on loans, was $11.0 million and $10.3 million, respectively, and reported within other assets on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date.

Loan Modifications for Borrowers Experiencing Financial Difficulty

Effective January 1, 2023, the Company adopted prospectively ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02"). ASU 2022-02 provided guidance that eliminated the recognition and measurement of TDRs. Following the adoption of this guidance, the Company evaluates all loan modifications made to borrowers experiencing financial difficulty, according to the accounting guidance for loan refinancing and restructuring to determine whether such loan modification should be accounted for as a new loan or a continuation of the existing loan. Our loan modifications for borrowers experiencing financial difficulty are generally accounted for as a continuation of the existing loan.

We offer several types of loans and receivables modification programs to borrowers experiencing financial difficulty, primarily interest rate reductions and term extensions. In such instances, we may modify loans and receivables with the intention to minimize future losses and improve collectability, while providing customers with temporary or permanent financial relief. There were no modified loans that required disclosure for the three months ended March 31, 2023.

Troubled Debt Restructuring Disclosures Prior to Adoption of ASU 2022-02

Prior to the Company's adoption of ASU 2022-02, which became effective for the Company on January 1, 2023, TDRs consisted of loans where the Company, for economic or legal reasons related to the borrower’s financial difficulties, granted a concession to the borrower that it would not otherwise consider. TDRs typically involved term modifications or a reduction of either interest or principal. Once such an obligation has been restructured, it will remain a TDR until paid in full, or until the loan is again restructured at current market rates and no concessions are granted.

24

The specific reserve allowance was determined by discounting the total expected future cash flows from the borrower at the original loan interest rate, or if the loan is currently collateral-dependent, using net realizable value, which was obtained through independent appraisals and internal evaluations. The following is a summary of TDRs prior to adoption of ASU 2022-02, by portfolio segment, and the associated specific reserve included within the ACL as of December 31, 2022:

	Number of Contracts	Recorded Investment		Specific Reserve
(In thousands, except number of contracts)	December 31, 2022	December 31, 2022		December 31, 2022
Commercial real estate - owner-occupied	1	$	113	$	50
Commercial	—	—		—
Residential real estate	18	2,208		$	307
Consumer and home equity	3	245		9
Total	22	$	2,566	$	366

At December 31, 2022, the Company had performing and non-performing TDRs with a recorded investment balance of $2.1 million and $452,000, respectively.

The following represents loan modifications that qualify as TDRs as of December 31, 2022 that occurred during the period indicated:

	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Specific Reserve
(In thousands, except number of contracts)	December 31, 2022	December 31, 2022		December 31, 2022		December 31, 2022
Home equity:
Interest rate concession and payment deferral	—	$	—	$	—	$	—
Maturity concession	1	69		96		—
Total	1	$	69	$	96	$	—

For the year ended December 31, 2022, no loans were modified as TDRs within the previous 12 months for which the borrower subsequently defaulted.

In-Process Foreclosure Proceedings

At March 31, 2023 and December 31, 2022, the Company had $450,000 and $481,000, respectively, of consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings were in process.

FHLB Advances

FHLB advances are those borrowings from the FHLBB greater than 90 days. FHLB advances are collateralized by a blanket lien on qualified collateral consisting primarily of loans with first mortgages secured by one- to four-family properties, certain commercial real estate loans, certain pledged investment securities and other qualified assets. The carrying value of residential real estate and commercial loans pledged as collateral was $1.8 billion at March 31, 2023 and December 31, 2022, respectively.

Refer to Notes 3 and 6 of the consolidated financial statements for discussion of securities pledged as collateral.

25

NOTE 5 – BORROWINGS

The following summarizes the Company's short-term borrowed funds as presented on the consolidated statements of condition as of the dates indicated. The Company did not have any long-term borrowings as of the dates indicated.

(In thousands)	March 31, 2023		December 31, 2022
Short-Term Borrowings:
Customer repurchase agreements	$	196,918	$	196,451
Overnight borrowings	189,400		18,725
FHLBB borrowings	100,000		50,000
Total short-term borrowings	$	486,318	$	265,176

The Company has two tranches of junior subordinated debentures in the amount of $44.3 million as of March 31, 2023 and December 31, 2022. Refer to Note 10 of the consolidated financial statements for further details.

NOTE 6 – REPURCHASE AGREEMENTS

The Company can raise additional liquidity by entering into repurchase agreements at its discretion. In a security repurchase agreement transaction, the Company will generally sell a security, agreeing to repurchase either the same or a substantially identical security on a specified later date, at a greater price than the original sales price. The difference between the sale price and purchase price is the cost of the proceeds, which is recorded within interest on borrowings on the consolidated statements of income. The securities underlying the agreements are delivered to counterparties as collateral for the repurchase obligations. Because the securities are treated as collateral and the agreement does not qualify for a full transfer of effective control, the transactions do not meet the criteria to be classified as sales, and are therefore considered secured borrowing transactions for accounting purposes. Payments on such borrowings are interest only until the scheduled repurchase date. In a repurchase agreement the Company is subject to the risk that the purchaser may default at maturity and not return the securities underlying the agreements. In order to minimize this potential risk, the Company either deals with established firms when entering into these transactions, or with customers whose agreements stipulate that the securities underlying the agreement are not delivered to the customer and instead are held in segregated safekeeping accounts by the Company's safekeeping agents.

The table below sets forth information regarding the Company’s repurchase agreements accounted for as secured borrowings and types of collateral as of the dates indicated:

(In thousands)	March 31, 2023		December 31, 2022
Customer Repurchase Agreements(1)(2):
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	$	174,276	$	99,105
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	22,642		94,328
Obligations of states and political subdivisions	—		3,018
Total	$	196,918	$	196,451

(1)    Presented within short-term borrowings on the consolidated statements of condition.

(2)    All customer repurchase agreements mature continuously or overnight for the dates indicated.

At March 31, 2023 and December 31, 2022, certain customers held CDs totaling $617,000 and $616,000, respectively, that were collateralized by CMO and MBS securities that were overnight repurchase agreements.

Certain counterparties monitor collateral, and may request additional collateral to be posted from time to time.

26

NOTE 7 – COMMITMENTS AND CONTINGENCIES

Commitments

In the normal course of business, the Company is a party to both on- and off-balance sheet financial instruments involving, to varying degrees, elements of credit risk and interest rate risk in addition to the amounts recognized in the consolidated statements of condition.

The following is a summary of the Company's contractual off-balance sheet commitments as of the dates indicated:

(In thousands)	March 31, 2023		December 31, 2022
Commitments to extend credit	$	779,402	$	817,772
Standby letters of credit	6,769		6,801
Total	$	786,171	$	824,573

The Company’s commitments to extend credit from its lending activities do not necessarily represent future cash requirements since certain of these instruments may expire without being funded and others may not be fully drawn upon. These commitments are subject to the Company’s credit approval process, including an evaluation of the customer’s creditworthiness and related collateral requirements. Commitments generally have fixed expiration dates or other termination clauses.

Standby letters of credit are conditional commitments issued to guarantee the performance of a borrower to a third party. In the event of nonperformance by the borrower, the Company would be required to fund the commitment and would be entitled to the underlying collateral, if applicable, which generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, and/or real estate. The maximum potential future payments are limited to the contractual amount of the commitment.

The Company establishes an ACL on off-balance sheet credit exposures on its contractual off-balance sheet commitments, except those that are unconditionally cancellable by the Company. As of March 31, 2023 and December 31, 2022, the ACL on off-balance sheet credit exposures was $3.0 million and $3.3 million, respectively. The ACL on off-balance sheet credit exposure was presented within accrued interest and other liabilities on the consolidated statements of condition.

For the three months ended March 31, 2023 and 2022, the (credit) provision for credit losses on off-balance sheet credit exposures was ($275,000) and $161,000, respectively.

Legal Contingencies

In the normal course of business, the Company and its subsidiaries are subject to pending and threatened litigation, claims investigations and legal and administrative cases and proceedings. Although the Company is not able to predict the outcome of such actions, after reviewing pending and threatened actions with counsel, management believes that, based on the information currently available, the outcome of such actions, individually or in the aggregate, will not have a material adverse effect on the Company’s consolidated financial statements.

Reserves are established for legal claims only when losses associated with the claims are judged to be probable, and the loss can be reasonably estimated. Assessments of litigation exposure are difficult because they involve inherently unpredictable factors including, but not limited to: whether the proceeding is in the early stages; whether damages are unspecified, unsupported, or uncertain; whether there is a potential for punitive or other pecuniary damages; whether the matter involves legal uncertainties, including novel issues of law; whether the matter involves multiple parties and/or jurisdictions; whether discovery has begun or is not complete; whether meaningful settlement discussions have commenced; and whether the lawsuit involves class allegations. In many lawsuits and arbitrations, it is not possible to determine whether a liability has been incurred or to estimate the ultimate or minimum amount of that liability until the case is close to resolution, in which case a reserve will not be recognized until that time. Assessments of class action litigation, which is generally more complex than other types of litigation, are particularly difficult, especially in the early stages of the proceeding when it is not known whether a class will be certified or how a potential class, if certified, will be defined. As a result, the Company may be unable to estimate reasonably possible losses with respect to every litigation matter it faces.

27

The Company did not have any material loss contingencies that were provided for and/or that are required to be disclosed as of March 31, 2023 and December 31, 2022, respectively.

NOTE 8 – DERIVATIVES AND HEDGING

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s credit derivatives result from loan participation arrangements, and therefore are not used to manage interest rate risk in the Company’s assets or liabilities.

Derivatives Designated as Hedging Instruments - Hedges of Interest Rate Risk

Interest Rate Contracts - Cash Flow Hedges. The Company’s objectives in using interest rate derivatives are to add stability to interest income and expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed rate payments or the receipt of fixed rate amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. For the three months ended March 31, 2023 and 2022, such derivatives were used to hedge the variable cash flows associated with existing variable-rate assets or liabilities or forecasted issuances of debt.

For derivatives designated, and that qualify as, cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCI and subsequently is reclassified into interest expense or interest income in the same period(s) during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense or interest income as interest payments are made or received on the Company’s variable-rate liabilities or assets. The Company estimates that an additional $2.5 million will be reclassified as a decrease to interest expense and an additional $3.0 million will be reclassified as a decrease to interest income over the next 12 months.

Interest Rate Contracts - Fair Value Hedges. Derivatives designated as fair value hedges are utilized to mitigate the risk of changes in the fair values of recognized assets and liabilities. The Company uses interest rate contracts in this manner to manage its exposure to changes in the fair value of hedged items caused by changes in interest rates.

Changes in the fair value of the derivatives and changes in the fair value of the hedged item due to changes in the hedged risk are recognized in earnings in the same line item. If a hedge is terminated, but the hedged item was not derecognized, all remaining adjustments to the carrying amount of the hedged item are amortized over a period that is consistent with the amortization of other discounts or premiums associated with the hedged item.

Derivatives not Designated as Hedges

Customer Loan Swaps. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions.

28

As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings.

Fixed Rate Mortgage Interest Rate Lock Commitments. As part of the origination process of a residential loan, the Company may enter into rate lock agreements with its borrower, which is considered an interest rate lock commitment. If the Company intends to sell the loan upon origination, it will account for the interest rate lock commitment as a derivative.

Forward Delivery Commitments. The Company typically enters into a forward delivery commitment with a secondary market investor, which has been approved by the Company within its normal governance process, at the onset of the loan origination process. The Company may enter into these arrangements with the secondary market investors on a "best effort" or "mandatory delivery" basis. The Company's normal practice is typically to enter into these arrangements on a "best effort" basis. The Company enters into these arrangements with the secondary market investors to manage its interest rate exposure. The Company accounts for the forward delivery commitment as a derivative upon origination of a loan identified as held for sale.

Risk Participation Agreements. The Company’s existing credit derivatives result from participations in or out of interest rate swaps provided by or to external lenders as part of loan participation arrangements, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain lenders which participate in loans.

29

The following table presents the fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition as of the dates indicated:

	Derivative Assets					Derivative Liabilities
(Dollars in thousands)	Notional Amount		Location	Fair Value		Notional Amount		Location	Fair Value
March 31, 2023
Derivatives designated as hedging instruments:
Interest rate contracts(1)	$	60,000	Other assets	$	10,996	$	433,000	Accrued interest and other liabilities	$	6,859
Total derivatives designated as hedging instruments				$	10,996				$	6,859
Derivatives not designated as hedging instruments:
Customer loan swaps(1)	$	288,076	Other assets	$	11,479	$	288,076	Accrued interest and other liabilities	$	11,554
Risk participation agreements	21,696		Other assets	—		44,127		Accrued interest and other liabilities	—
Fixed rate mortgage interest rate lock commitments	6,883		Other assets	71		5,843		Accrued interest and other liabilities	43
Forward delivery commitments	2,887		Other assets	32		1,651		Accrued interest and other liabilities	14
Total derivatives not designated as hedging instruments				$	11,582				$	11,611
December 31, 2022
Derivatives designated as hedging instruments:
Interest rate contracts(1)	$	110,000	Other assets	$	13,051	$	133,000	Accrued interest and other liabilities	$	5,515
Total derivatives designated as hedging instruments				$	13,051				$	5,515
Derivatives not designated as hedging instruments:
Customer loan swaps(1)	$	260,130	Other assets	$	14,802	$	345,545	Accrued interest and other liabilities	$	14,850
Risk participation agreements	21,818		Other assets	—		53,704		Accrued interest and other liabilities	—
Fixed rate mortgage interest rate lock commitments	4,493		Other assets	31		9,597		Accrued interest and other liabilities	87
Forward delivery commitments	5,259		Other assets	114		—		Accrued interest and other liabilities	—
Total derivatives not designated as hedging instruments				$	14,947				$	14,937

(1)    Reported fair values include accrued interest receivable and payable.

The following table shows the carrying amount and associated cumulative basis adjustments related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships:

Location in Consolidated Statements of Condition	Carrying Amount of Hedged Assets/(Liabilities)				Cumulative Fair Value Hedging Adjustment in the Carrying Amount of the Hedged Assets/(Liabilities)
(Dollars in thousands)	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
Loans(1)	$	301,552	$	—	$	(1,552)	$	—
Total	$	301,552	$	—	$	(1,552)	$	—

(1)     These amounts include the amortized cost basis of closed portfolios of fixed rate assets used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolio anticipated to be outstanding for the designated hedged period. At March 31, 2023, the amortized cost basis of the closed portfolios used in these hedging relationships was $853.7 million and the amounts of the designated hedged items were $300.0 million.

30

The table below presents the effect of cash flow hedge accounting, before tax, on AOCI for the periods indicated:

(Dollars in thousands)	Amount of Gain (Loss) Recognized in OCI on Derivative		Amount of Gain (Loss) Recognized in OCI Included Component		Amount of Gain (Loss) Recognized in OCI Excluded Component		Location of Gain (Loss) Recognized from AOCI into Income	Amount of Gain (Loss) Reclassified from AOCI into Income		Amount of Gain (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain (Loss) Reclassified from AOCI into Income Excluded Component
For the Three Months Ended March 31, 2023
Interest rate contracts	$	182	$	182	$	—	Interest and fees on loans	$	(717)	$	(717)	$	—
Interest rate contracts	(1)		(1)		—		Interest on deposits	306		306		—
Interest rate contracts	(796)		(796)		—		Interest on borrowings	487		487		—
Interest rate contracts	(934)		(934)		—		Interest on junior subordinated debentures	133		133		—
Total	$	(1,549)	$	(1,549)	$	—		$	209	$	209	$	—
For the Three Months Ended March 31, 2022
Interest rate contracts	$	(3,011)	$	(3,011)	$	—	Interest and fees on loans	$	382	$	382	$	—
Interest rate contracts	3,488		3,488		—		Interest on deposits	(149)		(149)		—
Interest rate contracts	3,158		3,158				Interest on junior subordinated debentures	(351)		(351)
Total	$	3,635	$	3,635	$	—		$	(118)	$	(118)	$	—

The table below presents the effect of fair value and cash flow hedge accounting on the consolidated statements of income for the periods indicated:

	Location and Amount of Gain (Loss) Recognized in Income
	Three Months Ended March 31,
	2023								2022
(Dollars in thousands)	Interest and fees on loans		Interest on deposits		Interest on borrowings		Interest on junior subordinated debentures		Interest and fees on loans		Interest on deposits		Interest on junior subordinated debentures
Total presented on the consolidated statements of income in which the effects of cash flow hedges are recorded	$	45,332	$	15,832	$	2,085	$	528	$	32,035	$	1,833	$	529
Gain (loss) on fair value hedging relationships
Interest rate contracts:
Hedged items	$	1,552	$	—	$	—	$	—	$	—	$	—	$	—
Derivatives designated as hedging instruments	$	(1,077)	$	—	$	—	$	—	$	—	$	—	$	—
Gain (loss) on cash flow hedging relationships
Interest rate contracts:
Amount of gain (loss) reclassified from AOCI into income	$	(717)	$	306	$	487	$	133	$	382	$	(149)	$	(351)
Amount of gain (loss) reclassified from AOCI into income - included component	$	(717)	$	306	$	487	$	133	$	382	$	(149)	$	(351)
Amount of gain (loss) reclassified from AOCI into income - excluded component	$	—	$	—	$	—	$	—	$	—	$	—	$	—

31

The table below presents the effect of the Company's derivative financial instruments that are not designated as hedging instruments on the consolidated statements of income for the periods indicated:

	Location of Gain (Loss) Recognized in Income	Amount of Gain (Loss) Recognized in Income
		Three Months Ended March 31,
(Dollars in thousands)		2023		2022
Customer loan swaps	Other expense	$	(27)	$	94
Fixed rate mortgage interest rate lock commitments	Mortgage banking income, net	84		(459)
Forward delivery commitments	Mortgage banking income, net	(96)		166
Total		$	(39)	$	(199)

Credit Risk-Related Contingent Features    

By using derivatives, the Company is exposed to credit risk to the extent that counterparties to the derivative contracts do not perform as required. Should a counterparty fail to perform under the terms of a derivative contract, the Company’s credit exposure on interest rate swaps is limited to the net positive fair value and accrued interest of all swaps with each counterparty. The Company seeks to minimize counterparty credit risk through credit approvals, limits, monitoring procedures, and obtaining collateral, where appropriate. As such, management believes the risk of incurring credit losses on derivative contracts with institutional counterparties is remote.

The Company has agreements with its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. In addition, the Company also has agreements with certain of its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well- capitalized institution, then the counterparty could terminate the derivative position(s) and the Company could be required to settle its obligations under the agreements.

As of March 31, 2023 and December 31, 2022, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for non-performance risk, related to these agreements was $11.6 million and $14.8 million, respectively. As of March 31, 2023 and December 31, 2022, the Company has minimum collateral posting thresholds with certain of its derivative counterparties and has posted cash collateral of $0 and $0, respectively. If the Company had breached any of these provisions at March 31, 2023 or December 31, 2022, it could have been required to settle its obligations under the agreements at their termination value of $11.6 million and $14.8 million, respectively.

NOTE 9 – BALANCE SHEET OFFSETTING

The Company does not offset the carrying value for derivative instruments or repurchase agreements on the consolidated statements of condition. The Company nets the amount recognized for the right to reclaim cash collateral against the obligation to return cash collateral arising from instruments executed with the same counterparty under a master netting arrangement. Collateral legally required to be pledged or received is monitored and adjusted as necessary. Refer to Note 6 for further discussion of repurchase agreements and Note 8 for further discussion of derivative instruments.

32

The following table presents the Company's derivative positions and repurchase agreements, and the potential effect of netting arrangements on its financial position, as of the dates indicated:

							Gross Amount Not Offset in the Consolidated Statements of Condition
(Dollars in thousands)	Gross Amount Recognized in the Consolidated Statements of Condition		Gross Amount Offset in the Consolidated Statements of Condition		Net Amount Presented in the Consolidated Statements of Condition		Financial Instruments Pledged (Received)(1)		Cash Collateral Pledged (Received)(1)		Net Amount
March 31, 2023
Derivative assets:
Customer loan swaps - commercial customer(2)	$	11,479	$	—	$	11,479	$	—	$	—	$	11,479
Interest rate contracts(3)	10,996		—		10,996		—		(10,889)		107
Total	$	22,475	$	—	$	22,475	$	—	$	(10,889)	$	11,586
Derivative liabilities:
Customer loan swaps - dealer bank(3)	$	11,554	$	—	$	11,554	$	—	$	—	$	11,554
Interest rate contracts(3)	6,859		—		6,859		—		6,859		—
Total	$	18,413	$	—	$	18,413	$	—	$	6,859	$	11,554
Customer repurchase agreements	$	196,918	$	—	$	196,918	$	196,918	$	—	$	—
December 31, 2022
Derivative assets:
Customer loan swaps - dealer bank(3)	$	14,802	$	—	$	14,802	$	—	$	—	$	14,802
Interest rate contracts(3)	13,051		—		13,051		—		(10,915)		2,136
Total	$	27,853	$	—	$	27,853	$	—	$	(10,915)	$	16,938
Derivative liabilities:
Customer loan swaps - commercial customer(2)	$	14,850	$	—	14,850		$	—	$	—	$	14,850
Interest rate contracts(3)	5,515		—		5,515		—		5,515		—
Total	$	20,365	$	—	$	20,365	$	—	$	5,515	$	14,850
Customer repurchase agreements	$	196,451	$	—	$	196,451	$	196,451	$	—	$	—

(1)    The amount presented was the lesser of the amount pledged (received) or the net amount presented in the consolidated statements of condition.

(2)    The Company manages its net exposure on its commercial customer loan swaps by obtaining collateral as part of the normal loan policy and underwriting practices. The Company does not post collateral to its commercial customers as part of its contract..

(3)    Interest rate swap contracts were completed with the same dealer bank. The Company maintains a master netting arrangement with each counterparty and settles collateral on a net basis for all contracts

NOTE 10 – REGULATORY CAPITAL REQUIREMENTS

The Company and Bank are subject to various regulatory capital requirements administered by the FRB and the OCC. Failure to meet minimum capital requirements can result in mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements.

The Company and Bank are required to maintain certain levels of capital based on risk-adjusted assets. These capital requirements represent quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company and Bank's capital classification is also subject to qualitative judgments by our regulators about components, risk weightings and other factors. The quantitative measures established to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios of total capital, Tier 1 capital, and common equity Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets, or the leverage ratio. These requirements apply to the Company on a consolidated basis.

Under the current requirements, banking organizations must have a minimum total risk-based capital ratio of 8.0%, a minimum Tier 1 risk-based capital ratio of 6.0%, a minimum common equity Tier 1 risk-based capital ratio of 4.5%, and a minimum leverage ratio of 4.0% in order to be "adequately capitalized." In addition to these requirements, banking organizations must maintain a capital conservation buffer consisting of common Tier 1 equity in an amount above the minimum

33

risk-based capital requirements for "adequately capitalized" institutions equal to 2.5% of total risk-weighted assets, resulting in a requirement for the Company and the Bank effectively to maintain common equity Tier 1, Tier 1 and total capital ratios of 7.0%, 8.5% and 10.5%, respectively. The Company and the Bank must maintain the capital conservation buffer to avoid restrictions on the ability to pay dividends, pay discretionary bonuses and to engage in share repurchases based on the amount of the shortfall and the institution's "eligible retained income" (that is, the greater of (i) net income for the preceding four quarters, net of distributions and associated tax effects not reflected in net income and (ii) average net income over the preceding four quarters).

The Company and Bank's risk-based capital ratios exceeded regulatory requirements, including the capital conservation buffer, at March 31, 2023 and December 31, 2022, and the Bank's capital ratios met the requirements for it to be considered "well capitalized" under prompt corrective action provisions for each period. There were no changes to the Company or Bank's capital ratios that occurred subsequent to March 31, 2023 that would change the Company or Bank's regulatory capital categorization. The following table presents the Company and Bank's regulatory capital ratios at the periods indicated:

	March 31, 2023				Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer		Minimum Regulatory Provision to Be "Well Capitalized"		December 31, 2022				Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer		Minimum Regulatory Provision to Be "Well Capitalized"
(Dollars in thousands)	Amount		Ratio						Amount		Ratio
Camden National Corporation:
Total risk-based capital ratio	$	564,967	13.95	%	10.50	%	10.00	%	$	557,571	13.80	%	10.50	%	10.00	%
Tier 1 risk-based capital ratio	524,843		12.96	%	8.50	%	6.00	%	517,385		12.81	%	8.50	%	6.00	%
Common equity Tier 1 risk-based capital ratio(1)	481,843		11.90	%	7.00	%	N/A		474,385		11.74	%	7.00	%	N/A
Tier 1 leverage capital ratio(1)	524,843		9.24	%	4.00	%	N/A		517,385		9.22	%	4.00	%	N/A
Camden National Bank:
Total risk-based capital ratio	$	532,658	13.18	%	10.50	%	10.00	%	$	525,346	13.03	%	10.50	%	10.00	%
Tier 1 risk-based capital ratio	492,534		12.19	%	8.50	%	8.00	%	485,160		12.03	%	8.50	%	8.00	%
Common equity Tier 1 risk-based capital ratio	492,534		12.19	%	7.00	%	6.50	%	485,160		12.03	%	7.00	%	6.50	%
Tier 1 leverage capital ratio	492,534		8.68	%	4.00	%	5.00	%	485,160		8.65	%	4.00	%	5.00	%

(1)    “Minimum Regulatory Provisions to Be ‘Well Capitalized’” are not formally defined under applicable banking regulations for bank holding companies.

In 2006 and 2008, the Company issued $43.0 million of junior subordinated debentures in connection with the issuance of trust preferred securities. Although the junior subordinated debentures are recorded as liabilities on the Company's consolidated statements of condition, the Company is permitted, in accordance with applicable regulation, to include the debentures within its calculation of risk-based capital, subject to certain limits. At March 31, 2023 and December 31, 2022, $43.0 million of the junior subordinated debentures were included in Tier 1 and Tier 2 capital for the Company.

The Company and Bank's regulatory capital and risk-weighted assets fluctuate due to normal business, including profits and losses generated by the Company and Bank as well as changes to their asset mix. Of particular significance are changes within the Company and Bank's loan portfolio mix due to the differences in regulatory risk-weighting between retail and commercial loans. Furthermore, the Company and Bank's regulatory capital and risk-weighted assets are subject to change due to changes in GAAP and regulatory capital standards. The Company and Bank proactively monitor their regulatory capital and risk-weighted assets, and the impact of changes to their asset mix, and the impact of proposed and pending changes as a result of new and/or amended GAAP standards and regulatory changes.

34

NOTE 11 – OTHER COMPREHENSIVE INCOME (LOSS)

The following tables present a reconciliation of the changes in the components of other comprehensive income and loss for the periods indicated, including the amount of tax (expense) benefit allocated to each component:

	For the Three Months Ended
	March 31, 2023						March 31, 2022
(In thousands)	Pre-Tax Amount		Tax (Expense) Benefit		After-Tax Amount		Pre-Tax Amount		Tax (Expense) Benefit		After-Tax Amount
Debt Securities:
Change in fair value	$	9,885	$	(2,125)	$	7,760	$	(92,753)	$	19,942	$	(72,811)
Less: reclassification adjustment for amortization of securities transferred from AFS to HTM(1)	(1,699)		365		(1,334)		—		—		—
Net change in fair value	11,584		(2,490)		9,094		(92,753)		19,942		(72,811)
Cash Flow Hedges:
Change in fair value	(3,109)		668		(2,441)		3,635		(782)		2,853
Less: reclassified AOCI gain (loss) into interest expense(2)	926		(199)		727		(500)		108		(392)
Less: reclassified AOCI (loss) gain into interest income(3)	(717)		154		(563)		382		(82)		300
Net change in fair value	(3,318)		713		(2,605)		3,753		(808)		2,945
Postretirement Plans:
Amortization of settlement recognition of net loss and prior service credit(4)	(6)		1		(5)		232		(50)		182
Other comprehensive income (loss)	$	8,260	$	(1,776)	$	6,484	$	(88,768)	$	19,084	$	(69,684)

(1)    Reclassified into taxable interest on investments and/or nontaxable interest on investments in the consolidated statements of income. Refer to Note 3 of the consolidated financial statements for further details.

(2)    Reclassified into interest on deposits, borrowings and/or subordinated debentures on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.

(3)    Reclassified into interest and fees on loans on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.

(4)    Reclassified into other expenses on the consolidated statements of income. Refer to Note 13 of the consolidated financial statements for further details.

35

The following table presents the changes in each component of AOCI, after tax, for the periods indicated:

(In thousands)	Net Unrealized Gains (Losses) on Debt Securities(1)		Net Unrealized (Losses) Gains on Cash Flow Hedges(1)		Defined Benefit Postretirement Plans(1)		AOCI(1)
Balance at December 31, 2022	$	(131,539)	$	5,891	$	(307)	$	(125,955)
Other comprehensive income (loss) before reclassifications	7,760		(2,441)		—		5,319
Less: Amounts reclassified from AOCI	(1,334)		164		5		(1,165)
Other comprehensive income (loss)	9,094		(2,605)		(5)		6,484
Balance at March 31, 2023	$	(122,445)	$	3,286	$	(312)	$	(119,471)
Balance at December 31, 2021	$	(1,173)	$	(1,779)	$	(3,277)	$	(6,229)
Other comprehensive (loss) income before reclassifications	(72,811)		2,853		—		(69,958)
Less: Amounts reclassified from AOCI	—		(92)		(182)		(274)
Other comprehensive (loss) income	(72,811)		2,945		182		(69,684)
Balance at March 31, 2022	$	(73,984)	$	1,166	$	(3,095)	$	(75,913)

(1)    All amounts are net of tax

NOTE 12 – REVENUE FROM CONTRACTS WITH CUSTOMERS

A portion of the Company's non-interest income is derived from contracts with customers, and, as such, the revenue recognized depicts the transfer of promised goods or services to its customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company considers the terms of the contract and all relevant facts and circumstances when applying this guidance.

The Company has disaggregated its revenue from contracts with customers into categories based on the nature of the revenue. The categorization of revenues from contracts with customers that are within the scope of ASC 606 closely aligns with the presentation of revenue categories presented within non-interest income on the consolidated statements of income. The following table presents the revenue streams within the scope of ASC 606 for the periods indicated:

	Location on Consolidated Statements of Income	Three Months Ended March 31,
(In thousands)		2023		2022
Debit card interchange income	Debit card income	$	2,938	$	2,924
Services charges on deposit accounts	Service charges on deposit accounts	1,762		1,833
Fiduciary services income	Income from fiduciary services	1,600		1,631
Investment program income	Brokerage and insurance commissions	1,093		994
Other non-interest income	Other income	422		400
Total non-interest income within the scope of ASC 606		7,815		7,782
Total non-interest income not in scope of ASC 606		2,051		2,043
Total non-interest income		$	9,866	$	9,825

In each of the revenue streams identified above, there were no significant judgments made in determining or allocating the transaction price, as the consideration and services are generally explicitly identified in the associated contracts.

36

NOTE 13 – EMPLOYEE BENEFIT PLANS

The Company sponsors unfunded, non-qualified SERPs for certain officers and provides medical and life insurance to certain eligible retired employees.

The components of net periodic pension and postretirement benefit costs were as follows for the following periods:

Supplemental Executive Retirement Plan:

(In thousands)	Location on Consolidated Statements of Income	Three Months Ended March 31,
Net periodic pension cost		2023		2022
Service cost	Salaries and employee benefits	$	70	$	133
Interest cost	Other expenses	189		115
Recognized net actuarial loss	Other expenses	—		216
Total		$	259	$	464

Other Postretirement Benefit Plan:

(In thousands)	Location on Consolidated Statements of Income	Three Months Ended March 31,
Net periodic postretirement benefit cost		2023		2022
Service cost	Salaries and employee benefits	$	3	$	5
Interest cost	Other expenses	40		28
Recognized net actuarial (gain) loss	Other expenses	(1)		22
Amortization of prior service credit	Other expenses	(6)		(6)
Total		$	36	$	49

NOTE 14 – EPS

The following is an analysis of basic and diluted EPS, reflecting the application of the two-class method, as described below:

	Three Months Ended March 31,
(In thousands, except number of shares and per share data)	2023		2022
Net income	$	12,727	$	16,795
Dividends and undistributed earnings allocated to participating securities(1)	(25)		(43)
Net income available to common shareholders	$	12,702	$	16,752
Weighted-average common shares outstanding for basic EPS	14,573,122		14,741,271
Dilutive effect of stock-based awards(2)	58,420		81,061
Weighted-average common and potential common shares for diluted EPS	14,631,542		14,822,332
Earnings per common share:
Basic EPS	$	0.87	$	1.14
Diluted EPS	$	0.87	$	1.13
Awards excluded from the calculation of diluted EPS(3):
Performance-based awards	1,141		1,027

(1)    Represents dividends paid and undistributed earnings allocated to non-vested stock-based awards that contain non-forfeitable rights to dividends.

(2)    Represents the assumed dilutive effect of unexercised and/or unvested stock options, restricted shares, restricted share units and contingently issuable performance-based awards utilizing the treasury stock method.

(3)    Represents stock-based awards not included in the computation of potential common shares for purposes of calculating diluted EPS as the exercise prices were greater than the average market price of the Company's common stock, and, therefore, are considered anti-dilutive.

37

Non-vested stock-based payment awards that contain non-forfeitable rights to dividends are participating securities and are included in the computation of EPS pursuant to the two-class method. The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Certain of the Company’s non-vested stock-based awards qualify as participating securities. 

Net income is allocated between the common stock and participating securities pursuant to the two-class method. Basic EPS is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period, excluding participating non-vested stock-based awards. Diluted EPS is computed in a similar manner, except that the denominator includes the number of additional common shares that would have been outstanding if potentially dilutive common shares were issued using the treasury stock method.

NOTE 15 – FAIR VALUE MEASUREMENT AND DISCLOSURE

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined using quoted market prices. However, in many instances, quoted market prices are not available. In such instances, fair values are determined using various valuation techniques. Various assumptions and observable inputs must be relied upon in applying these techniques. GAAP 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.

GAAP permits an entity to choose to measure eligible financial instruments and other items at fair value. The Company has elected the fair value option for its loans held for sale. Electing the fair value option for loans held for sale enables the Company’s financial position to align more clearly with the economic value of the actively traded asset.

The fair value hierarchy for valuation of an asset or liability is as follows:

Level 1:   Valuation is based upon unadjusted quoted prices in active markets for identical assets and liabilities that the entity has the ability to access as of the measurement date.

Level 2:   Valuation is determined from quoted prices for similar assets or liabilities in active markets, from quoted prices for identical or similar instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market.

Level 3:   Valuation is derived from model-based and other techniques in which at least one significant input is unobservable and which may be based on the Company’s own estimates about the assumptions that market participants would use to value the asset or liability.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon model-based techniques incorporating various assumptions including interest rates, prepayment speeds and credit losses. Assets and liabilities valued using model-based techniques are classified as either Level 2 or Level 3, depending on the lowest level classification of an input that is considered significant to the overall valuation. A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

Financial Instruments Recorded at Fair Value on a Recurring Basis

Trading Securities and Deferred Compensation: The fair value of trading securities and deferred compensation is reported using market quoted prices and has been classified as Level 1 as such securities and underlying securities are actively traded and no valuation adjustments have been applied.

Debt Securities:  The fair value of investments in debt securities is reported utilizing prices provided by an independent pricing service based on recent trading activity and other observable information including, but not limited to, dealer quotes, market spreads, cash flows, market interest rate curves, market consensus prepayment speeds, credit information, and the bond’s terms and conditions. The fair value of debt securities is classified as Level 2.

38

Loans Held For Sale: The fair value of loans held for sale is determined on an individual loan basis using quoted secondary market prices and is classified as Level 2.

Derivatives:  The fair value of interest rate swaps is determined using inputs that are observable in the market place obtained from third parties including yield curves, publicly available volatilities, and floating indexes and, accordingly, are classified as Level 2 inputs. The credit value adjustments associated with derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default. As of March 31, 2023 and December 31, 2022, the credit valuation adjustment on the overall valuation of its derivative positions and was not significant to the overall valuation of its derivatives, and, thus, the Company's interest rate swaps were classified as Level 2.

The fair value of the Company's fixed rate interest rate lock commitments were determined using secondary market pricing for loans with similar structures, including term, rate and borrower credit quality, adjusted for the Company's pull-through rate estimate (i.e. estimate of loans within its loan pipeline that will ultimately complete the origination process and be funded). The Company has classified its fixed rate interest rate lock commitments as Level 2, as the quoted secondary market prices are the more significant input, and, although the Company's internal pull-through rate estimate is a Level 3 estimate, it is less significant to the ultimate valuation.

The fair value of the Company's forward delivery commitments is determined using secondary market pricing for loans with similar structures, including term, rate and borrower credit quality, and the locked and agreed to price with the secondary market investor. The Company has classified its fixed rate interest rate lock commitments as Level 2.

39

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, for the dates indicated:

(In thousands)	Fair Value		Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)
March 31, 2023
Financial assets:
Trading securities	$	3,971	$	3,971	$	—	$	—
AFS debt securities:
Obligations of states and political subdivisions	49,051		—		49,051		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	507,831		—		507,831		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	106,233		—		106,233		—
Subordinated corporate bonds	23,308		—		23,308		—
Loans held for sale	4,562		—		4,562		—
Customer loan swaps	11,479		—		11,479		—
Interest rate contracts	10,996		—		10,996		—
Fixed rate mortgage interest rate lock commitments	71		—		71		—
Forward delivery commitments	32		—		32		—
Financial liabilities:
Deferred compensation	$	3,971	$	3,971	$	—	$	—
Customer loan swaps	11,554		—		11,554		—
Interest rate contracts	6,859		—		6,859		—
Fixed rate mortgage interest rate lock commitments	43		—		43		—
Forward delivery commitments	14		—		14		—
December 31, 2022
Financial assets:
Trading securities	$	3,990	$	3,990	$	—	$	—
AFS debt securities:
Obligations of states and political subdivisions	49,226		—		49,226		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	514,019		—		514,019		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	109,347		—		109,347		—
Subordinated corporate bonds	23,283		—		23,283		—
Loans held for sale	5,197		—		5,197		—
Customer loan swaps	14,802		—		14,802		—
Interest rate contracts	13,051		—		13,051		—
Fixed rate mortgage interest rate lock commitments	31		—		31		—
Forward delivery commitments	114		—		114		—
Financial liabilities:
Deferred compensation	$	3,990	$	3,990	$	—	$	—
Customer loan swaps	14,850		—		14,850		—
Interest rate contracts	5,515		—		5,515		—
Fixed rate mortgage interest rate lock commitments	87		—		87		—

 The Company did not have any transfers between Level 1 and Level 2 of the fair value hierarchy during the three months ended March 31, 2023. The Company’s policy for determining transfers between levels occurs at the end of the reporting period when circumstances in the underlying valuation criteria change and result in transfer between levels.

40

Financial Instruments Recorded at Fair Value on a Nonrecurring Basis

The Company may be required, from time to time, to measure certain financial assets and financial liabilities at fair value on a nonrecurring basis in accordance with GAAP, which may consist of collateral-dependent loans and servicing assets. These include assets that are measured at the lower of cost or market value that were recognized at fair value below cost at the end of the period. As of March 31, 2023 and March 31, 2022, the Company did not have any material financial instruments measured and reported at fair value.

Collateral-Dependent Loans:  Expected credit losses on individually assessed loans deemed to be collateral dependent are valued based upon the lower of amortized cost or fair value of the underlying collateral less costs to sell. Management estimates the fair values of these assets using Level 2 inputs, such as the fair value of collateral based on independent third-party market approach appraisals for collateral-dependent loans, and Level 3 inputs where circumstances warrant an adjustment to the appraised value based on the age of the appraisal and/or comparable sales, condition of the collateral, and market conditions.

Servicing Assets:  The Company accounts for mortgage servicing assets at cost, subject to impairment testing. When the carrying value of a tranche exceeds fair value, a valuation allowance is established to reduce the carrying cost to fair value. Fair value is based on a valuation model that calculates the present value of estimated net servicing income. The Company obtains a third-party valuation based upon loan level data including note rate, type and term of the underlying loans. The model utilizes two significant unobservable inputs, namely loan prepayment assumptions and the discount rate used, to calculate the fair value of each tranche, and, as such, the Company has classified the model within Level 3 of the fair value hierarchy.

Non-Financial Instruments Recorded at Fair Value on a Non-Recurring Basis

The Company had no non-financial assets or non-financial liabilities measured at fair value on a non-recurring basis as of March 31, 2023 and March 31, 2022. Non-financial assets measured at fair value on a non-recurring basis consist of OREO, goodwill and core deposit intangible assets. 

OREO: OREO properties acquired through foreclosure or deed in lieu of foreclosure are recorded at net realizable value, which is the fair value of the real estate, less estimated costs to sell. Any write-down of the recorded investment in the related loan is charged to the ACL upon transfer to OREO. Upon acquisition of a property, a current appraisal is used or an internal valuation is prepared to substantiate fair value of the property. After foreclosure, management periodically, but at least annually, obtains updated valuations of the OREO properties and, if additional impairments are deemed necessary, the subsequent write-downs for declines in value are recorded through a valuation allowance and a provision for credit losses charged to other non-interest expense within the consolidated statements of income. As management considers appropriate, adjustments are made to the appraisal obtained for the OREO property to account for recent sales activity of comparable properties, changes in the condition of the property, and changes in market conditions. These adjustments are not observable in an active market and are classified as Level 3. At March 31, 2023 and December 31, 2022, the Company did not have any OREO properties.

Goodwill: Goodwill represents the excess cost of an acquisition over the fair value of the net assets acquired. The fair value of goodwill is estimated by utilizing several standard valuation techniques, including discounted cash flow analyses, bank merger multiples, and/or an estimation of the impact of business conditions and investor activities on the long-term value of the goodwill. Should an impairment occur, the associated goodwill is written-down to fair value and the impairment charge is recorded within non-interest expense in the consolidated statements of income. The Company conducts an annual impairment test of goodwill in the fourth quarter each year, or more frequently as necessary. There have been no indications or triggering events during the three months ended March 31, 2023, for which management believes it is more likely than not that goodwill is impaired.

Core Deposit Intangible Assets: The Company's core deposit intangible assets represent the estimated value of acquired customer relationships and are amortized over the estimated life of those relationships. Core deposit intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. There were no events or changes in circumstances for the three months ended March 31, 2023, that indicated the carrying amount may not be recoverable.

41

The estimated fair values and related carrying amounts for assets and liabilities for which fair value is only disclosed are shown below as of the dates indicated:

	Carrying Amount		Fair Value		Readily Available Market Prices (Level 1)		Observable Market Prices (Level 2)		Company Determined Market Prices (Level 3)
March 31, 2023
Financial assets:
HTM debt securities	$	540,074	$	510,999	$	—	$	510,999	$	—
Commercial real estate loans(1)(2)	1,647,823		1,586,974		—		—		1,586,974
Commercial loans(2)	416,518		405,429		—		—		404,847
Residential real estate loans(2)	1,722,335		1,509,387		—		—		1,509,387
Home equity loans(2)	230,072		228,821		—		—		228,821
Consumer loans(2)	19,226		16,993		—		—		16,993
Servicing assets	2,413		4,187		—		—		4,187
Financial liabilities:
Time deposits	$	360,103	$	351,795	$	—	$	351,795	$	—
Short-term borrowings	486,318		485,505		—		485,505		—
Subordinated debentures	44,331		31,918		—		31,918		—
December 31, 2022
Financial assets:
HTM debt securities	$	546,583	$	506,193	$	—	$	506,193	$	—
Commercial real estate loans(1)(2)	1,605,279		1,550,379		—		—		1,550,379
Commercial loans(2)	424,685		414,353		—		—		414,353
Residential real estate loans(2)	1,691,177		1,494,707		—		—		1,494,707
Home equity loans(2)	232,203		237,967		—		—		237,967
Consumer loans(2)	20,087		17,853		—		—		17,853
Servicing assets	2,458		4,412		—		—		4,412
Financial liabilities:
Time deposits	$	300,451	$	291,568	$	—	$	291,568	$	—
Short-term borrowings	265,176		264,779		—		264,779		—
Subordinated debentures	44,331		31,032		—		31,032		—

(1)    Commercial real estate loan includes non-owner-occupied and owner-occupied properties.

(2)    The presented carrying amount is net of the allocated ACL on loans.

Excluded from the summary were financial instruments measured at fair value on a recurring and nonrecurring basis, as previously described.

The Company considers its financial instruments' current use to be the highest and best use of the instruments.

42

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

The discussions set forth below and in the documents we incorporate by reference herein contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including certain plans, exceptions, goals, projections, and statements, which are subject to numerous risks, assumptions, and uncertainties. Forward-looking statements can be identified by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “plan,” “target,” “potential” or “goal” or future or conditional verbs such as “will,” “may,” “might,” “should,” “could” and other expressions which predict or indicate future events or trends and which do not relate to historical matters. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult for the Company to predict. The actual results, performance or achievements of the Company may differ materially from what is reflected in such forward-looking statements

Forward-looking statements should not be relied on, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of the Company. These risks, uncertainties and other factors may cause the actual results, performance or achievements of the Company to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.

The following factors, among others, could cause the Company’s financial performance to differ materially from the Company’s goals, plans, objectives, intentions, expectations and other forward-looking statements:

•the impact of the COVID-19 pandemic;

•the impact of the war in Ukraine;

•weakness in the United States economy in general and the regional and local economies within the New England region and Maine, which could result in a deterioration of credit quality, an increase in the allowance for credit losses or a reduced demand for the Company’s credit or fee-based products and services;

•changes in trade, monetary, and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System;

•inflation, interest rate, market, and monetary fluctuations;

•ongoing competition in the labor markets and increased employee turnover;

•competitive pressures, including continued industry consolidation and the increased financial services provided by non-banks;

•deterioration in the value of the Company's investment securities;

•volatility in the securities markets that could adversely affect the value or credit quality of the Company’s assets, impairment of goodwill, or the availability and terms of funding necessary to meet the Company’s liquidity needs;

•changes in information technology and other operational risks, including cybersecurity, that require increased capital spending;

•changes in consumer spending and savings habits;

•changes in tax, banking, securities and insurance laws and regulations;

•the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters;

•changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Financial Accounting Standards Board ("FASB"), and other accounting standard setters;

•the effects of climate change on the Company and its customers, borrowers or service providers;

•the effects of civil unrest, international hostilities or other geopolitical events;

•turmoil and volatility in the financial services industry, including failures or rumors of failures of other depository institutions, which could affect the ability of depository institutions, including Camden National Bank, to attract and retain depositors, and could affect the ability of financial services providers, including the Company, to borrow or raise capital;

43

•actions taken by governmental agencies to stabilize the financial system and the effectiveness of such actions;

•increases in deposit insurance assessments due to bank failures;

•changes to regulatory capital requirements in response to recent development affecting the banking sector; and

•questions about the soundness of one or more financial institutions with which the Company does business.

In addition, statements regarding the potential effects of the war in Ukraine, the COVID-19 pandemic and other notable national and global current events on the Company’s business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond the Company's control.

You should carefully review all of these factors, and be aware that there may be other factors that could cause differences, including the risk factors listed in our Annual Report on Form 10-K for the year ended December 31, 2022, as updated by the Company's quarterly reports on Form 10-Q, including this report, and other filings with the Securities and Exchange Commission. Readers should carefully review the risk factors described therein and should not place undue reliance on our forward-looking statements.

These forward-looking statements were based on information, plans and estimates at the date of this report, and we undertake no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except to the extent required by applicable law or regulation.

44

NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP

In addition to evaluating the Company’s results of operations in accordance with GAAP, management supplements this evaluation with an analysis of certain non-GAAP financial measures, return on average tangible equity; the efficiency ratio; net interest income (fully-taxable equivalent); earnings before income taxes and provision; earnings before income taxes, provision, and SBA PPP loan income; adjusted yield on interest-earning assets and adjusted net interest margin (fully-taxable equivalent); tangible book value per share; tangible common equity ratio; and core deposits and average core deposits. We utilize these non-GAAP financial measures for purposes of measuring performance against the Company's peer group and other financial institutions, as well as for analyzing its internal performance. The Company also believes these non-GAAP financial measures help investors better understand the Company's operating performance and trends and allows for better performance comparisons to other banks. In addition, these non-GAAP financial measures remove the impact of unusual items that may obscure trends in the Company’s underlying performance. These disclosures should not be viewed as a substitute for GAAP operating results, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other financial institutions.

Return on Average Tangible Equity. Return on average tangible equity is the ratio of (i) net income, adjusted for (a) tax effected amortization of core deposit intangible assets and (b) goodwill impairment, as necessary, to (ii) average shareholders' equity, adjusted for average goodwill and core deposit intangible assets. This adjusted financial ratio reflects a shareholder's return on tangible capital deployed in our business and is a common measure within the financial services industry.

	Three Months Ended March 31,
(Dollars in thousands)	2023			2022
Net income, as presented	$	12,727		$	16,795
Add: amortization of core deposit intangible assets, net of tax(1)	117			123
Net income, adjusted for amortization of core deposit intangible assets	$	12,844		$	16,918
Average equity, as presented	$	462,651		$	525,438
Less: average goodwill and core deposit intangible assets	(96,191)			(96,815)
Average tangible equity	$	366,460		$	428,623
Return on average equity	11.16		%	12.96		%
Return on average tangible equity	14.21		%	16.01		%

(1)    Assumed a 21% tax rate.

Efficiency Ratio.  The efficiency ratio represents an approximate measure of the cost required for the Company to generate a dollar of revenue. This is a common measure within the financial services industry and is a key ratio for evaluating Company performance. The efficiency ratio is calculated as the ratio of (i) total non-interest expense, adjusted for certain operating expenses, as necessary, to (ii) net interest income on a tax equivalent basis plus total non-interest income, adjusted for certain other income items, as necessary.

	Three Months Ended March 31,
(Dollars in thousands)	2023			2022
Non-interest expense, as presented	$	26,165		$	26,209
Net interest income, as presented	$	34,280		$	36,365
Add: effect of tax-exempt income(1)	229			226
Non-interest income, as presented	9,866			9,825
Adjusted net interest income plus non-interest income	$	44,375		$	46,416
Ratio of non-interest expense to total revenues(2)	59.27		%	56.74		%
Efficiency ratio	58.96		%	56.47		%

(1)    Assumed a 21% tax rate.

(2)    Revenue is the sum of net interest income and non-interest income.

45

Net Interest Income (Fully-Taxable Equivalent). Net interest income on a fully-taxable equivalent basis is net interest income plus the taxes that would have been paid had tax-exempt securities been taxable. This number attempts to enhance the comparability of the performance of assets that have different tax liabilities. This is a common measure within the financial services industry and is used within the calculation of net interest margin on a fully-taxable equivalent basis.

	Three Months Ended March 31,
(In thousands)	2023		2022
Net interest income, as presented	$	34,280	$	36,365
Add: effect of tax-exempt income(1)	229		226
Net interest income (fully-taxable equivalent)	$	34,509	$	36,591

(1)     Assumed a 21% tax rate.

Earnings before Income Taxes and Provision, and Earnings before Income Taxes, Provision and SBA PPP Loan Income. Earnings before income taxes and provision, and earnings before income taxes, provision and SBA PPP loan income are each a supplemental measure of operating earnings and performance. Earnings before income taxes and provision is calculated as net income before provision for credit losses and income tax expense, and earnings before income taxes, provision and SBA PPP loan income is calculated as net income before provision for credit losses, income tax expense and SBA PPP loan income. These supplemental measures have become more widely used by financial institutions as a measure of financial performance for comparability across financial institutions due to the impact of the COVID-19 pandemic on the provision for credit losses, as well as the origination of SBA PPP loans in response to the COVID-19 pandemic that are not a recurring and sustainable source of revenues for financial institutions.

	Three Months Ended March 31,
(In thousands)	2023		2022
Net income, as presented	$	12,727	$	16,795
Add: income tax expense, as presented	3,252		4,261
Add: provision (credit) for credit losses, as presented	2,002		(1,075)
Earnings before income taxes and provision for credit losses	17,981		19,981
Less: SBA PPP loan income	(4)		(1,033)
Earnings before income taxes, provision for credit losses and SBA PPP Loan income	$	17,977	$	18,948

46

Tangible Book Value per Share.  Tangible book value per share is the ratio of (i) shareholders’ equity less goodwill and other intangibles to (ii) total common shares outstanding at period end. Tangible book value per share is a common measure within the financial services industry to assess the value of a company, as it removes goodwill and other intangible assets generated within purchase accounting upon a business combination.

Tangible Common Equity Ratio. Tangible common equity is the ratio of (i) shareholders’ equity less goodwill and other intangible assets to (ii) total assets less goodwill and other intangible assets. This ratio is a measure used within the financial services industry to assess a company's capital adequacy.

(In thousands, except number of shares, per share data and ratios)	March 31, 2023			December 31, 2022
Tangible Book Value Per Share:
Shareholders’ equity, as presented	$	464,874		$	451,278
Less: goodwill and core deposit intangible assets	(96,112)			(96,260)
Tangible shareholders’ equity	$	368,762		$	355,018
Shares outstanding at period end	14,587,906			14,567,325
Book value per share	$	31.87		$	30.98
Tangible book value per share	$	25.28		$	24.37
Tangible Common Equity Ratio:
Total assets	$	5,716,605		$	5,671,850
Less: goodwill and core deposit intangible assets	(96,112)			(96,260)
Tangible assets	$	5,620,493		$	5,575,590
Common equity ratio	8.13		%	7.96		%
Tangible common equity ratio	6.56		%	6.37		%

Core Deposits. Core deposits are used by management to measure the portion of the Company's total deposits that management believes to be more stable and at a lower interest rate cost. The Company calculates core deposits as total deposits (as reported on the consolidated statements of condition) less certificates of deposit and brokered deposits. Management believes core deposits is a useful measure to assess the Company's deposit base, including its potential volatility.

(In thousands)	March 31, 2023		December 31, 2022
Total deposits	$	4,642,734	$	4,826,929
Less: certificates of deposit	(360,103)		(300,451)
Less: brokered deposits	(215,949)		(181,253)
Core deposits	$	4,066,682	$	4,345,225

Average Core Deposits. Average core deposits are used by management to measure the portion of the Company's total deposits that management believes to be more stable and at a lower interest rate cost. The Company calculates average core deposits as total average deposits (excluding average brokered deposits, as disclosed on the Average Balance, Interest and Yield/Rate Analysis tables) less average certificates of deposit. Management believes core deposits is a useful measure to assess the Company's deposit base, including its potential volatility.

	Three Months Ended March 31,
(In thousands)	2023		2022
Total average deposits(1)	$	4,520,424	$	4,380,035
Less: average certificates of deposit	(320,209)		(304,720)
Average core deposits	$	4,200,215	$	4,075,315

(1)    Brokered deposits excluded from total average deposits, as presented on the Average Balance, Interest and Yield/Rate analysis table.

47

CRITICAL ACCOUNTING POLICIES

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and could potentially result in materially different results under different assumptions and conditions. In preparing the Company’s consolidated financial statements, management is required to make significant estimates and assumptions that affect assets, liabilities, revenues, and expenses reported. Actual results could differ materially from our current estimates as a result of changing conditions and future events. Several estimates are particularly critical and are susceptible to significant near-term change, including (i) the ACL, including the ACL on loans, off-balance sheet credit exposures and investments; (ii) accounting for acquisitions and the subsequent review of goodwill and intangible assets generated in an acquisition for impairment; (iii) income taxes; and (iv) accounting for defined benefit and postretirement plans.

There have been no material changes to the Company's critical accounting policies from those disclosed within its Annual Report on Form 10-K for the year ended December 31, 2022. Refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2022, for discussion of the Company's critical accounting policies.

Refer to Note 2 of the consolidated financial statements for discussion of accounting pronouncements issued but yet to be adopted and implemented.

GENERAL OVERVIEW

Camden National Corporation (hereafter referred to as “we,” “our,” “us,” or the “Company”) is a publicly-held bank holding company, with approximately $5.7 billion in assets at March 31, 2023, incorporated under the laws of the State of Maine and headquartered in Camden, Maine. Camden National Bank (the "Bank"), a wholly-owned subsidiary of the Company, was founded in 1875. The Company was founded in 1984, went public in 1997 and is now registered with NASDAQ Global Market (“NASDAQ”) under the ticker symbol "CAC."

The primary business of the Company and the Bank is to attract deposits from, and to extend loans to, consumer, institutional, municipal, non-profit and commercial customers. The Company, through the Bank, provides a broad array of banking and other financial services, including wealth management and trust services, brokerage, investment advisory and insurance services, to consumer, business, non-profit and municipal customers.

The Company operates throughout Maine, with its primary markets and presence being throughout coastal and central Maine, and select areas of New Hampshire and Massachusetts. The Company and the Bank generally have effectively competed with other financial institutions by emphasizing customer service, highlighted by local decision-making, establishing long-term customer relationships, building customer loyalty and providing products and services designed to meet the needs of customers.

EXECUTIVE OVERVIEW

First Quarter Update. Throughout the first quarter of 2023, the interest rate environment remained volatile, highlighted by the 10-year U.S Treasury ranging from 3.37% to 4.08% and averaging 3.65% for the quarter. The yield curve continues to be inverted, and for the first quarter of 2023 the average 3-month U.S. Treasury was 114 basis points higher than the average 10-year U.S. Treasury. The volatility in interest rates and prolonged inverted yield curve continues to be the result of rising interest rates in response to inflationary pressures in the U.S., but were amplified further by the failing of two regional banks in March 2023, and concerns that additional banks could fail, which did subsequently occur on May 1, 2023. As a result of the turbulence in the banking industry in the first quarter of 2023, the focus across much of the industry quickly transitioned from earnings to financial position.

The Company's financial footing is strong based on firm fundamentals that are supported by a diverse deposit base, a strong liquidity position, excellent asset quality and regulatory capital that is well in excess of all required levels. The following are a few metrics that highlight the Company's financial strength as of March 31, 2023:

•Uninsured and uncollateralized1 deposits were 15% of total deposits, compared to 16% as of December 31, 2022, which speaks to the diversification of our depositor base.

1 Uncollateralized deposits are customer deposit balances for which the Company has not pledged any of its assets, including investment securities, or provided any other type of guarantee.

48

•Primary liquidity sources, which consists of cash, investment securities and FHLBB and FRB borrowing capacity, totaled $1.3 billion, which was approximately 1.9 times total uninsured and uncollateralized deposits.

•Annualized net charge-offs for the first quarter of 2023 were 0.02%, compared to 0.03% for the fourth quarter of 2022 and 0.02% for the first quarter of 2022.

•Non-performing assets were 0.09% of total assets and past due loans were 0.05% of total loans, compared to 0.09% and 0.06%, respectively, as of December 31, 2022.

•Equity to assets ratio was 8.13% and tangible common equity ratio (non-GAAP) was 6.56%, compared to 7.96% and 6.37%, respectively, as of December 31, 2022.

•Common Equity Tier 1 risk-based capital ratio was 11.90%, which exceeded the minimum regulatory capital required for capital adequacy plus the capital conservation buffer by 4.90%.

Like many others across the banking industry, the Company's earnings have been affected by the inverted yield curve, as deposit and funding costs have risen at a faster pace than our assets have repriced, which in turn has resulted in continued compression of our net interest margin. Our net interest margin for the first quarter of 2023 was 2.54%, compared to 2.76% for the fourth quarter of 2022 and 2.87% for the first quarter of 2022. We have taken, and continue to take, actions to manage net interest margin closely, including, but not limited to, disciplined loan and deposit pricing, as well as the utilization of interest rate swaps and brokered and retail CDs to reduce our exposure to rising short-term interest rates. The results of these actions can be seen in our interest rate risk position as of March 31, 2023, which is detailed in our interest rate risk modeling within "—Risk Management—Interest Rate Risk," as the Company's net interest income at risk over a 12-month period improved in an up 200 basis points scenario (based on our model as described). As of March 31, 2023, net interest income would decrease 2.24% in an up 200 basis point scenario, as compared to a decrease of 3.93% as of December 31, 2022.

The Company's investment portfolio continues to be a primary source of liquidity through investment cash flows, as well as the ability to pledge securities as collateral for funding. As of March 31, 2023, the fair value of the Company's bond portfolio was $1.2 billion and was in a net unrealized loss position of $122.0 million. We did not purchase any investments during the first quarter of 2023, as we used investment cash flows to fund incremental loan growth. The investment portfolio continues to be primarily made up of agency-backed MBS and CMO, but also contains subordinated corporate bonds and municipal securities as further described within "—Financial Condition—Investments." While the investment portfolio consists primarily of highly-rated securities, the Company did fully charge-off of a $1.8 million Signature Bank bond due to Signature Bank's failure in March 2023. As of March 31, 2023, we did not have any other exposures to failed banks. The weighted-average life and duration of our bond portfolio as of March 31, 2023, was 8.2 years and 5.7 years, respectively, compared to 7.8 years and 5.8 years, respectively, as of December 31, 2022.

Discussed below is further information on the Company's financial performance for the first quarter of 2023 and its current financial position.

Operating Results. Net income for the first quarter of 2023 was $12.7 million, a decrease of $4.1 million or 24%, compared to the first quarter of 2022, and diluted EPS decreased $0.26, or 23%, to $0.87 for the first quarter of 2023 compared to the same period last year. Earnings before income taxes, provision expense and SBA PPP loan income (non-GAAP) for the first quarter of 2023 were $18.0 million, a decrease of $971,000, or 5%, between periods.

The key drivers of the decrease in net income between the quarter ended March 31, 2023 and 2022 included:

•A decrease in net interest income of $2.1 million, or 6%, driven by a decrease in net interest margin between periods of 33 basis points, which more than offset the increase in average interest-earnings assets between periods of 6%.

•An increase in provision for credit losses of $3.1 million between periods. For the first quarter of 2023, the Company recorded a provision of $2.0 million that was primarily driven by the full charge-off of a $1.8 million Signature Bank bond due to Signature Bank's failure in March 2023. For the first quarter of 2022, the Company recorded negative provision expense (or a credit) of $1.1 million as it released a portion of its ACL on loans it established in 2020 at the onset of the COVID-19 pandemic.

49

Other key financial metrics for the periods indicated were as follows:

	Three Months Ended March 31,
	2023		2022
Return on average assets (annualized)	0.91	%	1.26	%
Return on average equity (annualized)	11.16	%	12.96	%
Return on average tangible equity (annualized) (non-GAAP)	14.21	%	16.01	%
Ratio of non-interest expense to total revenues	59.27	%	56.74	%
Efficiency ratio (non-GAAP)	58.96	%	56.47	%
Overhead ratio (non-interest expense divided by average assets) (annualized)	1.84	%	1.93	%

Asset Quality. As of March 31, 2023 and December 31, 2022, the Company's credit quality metrics remained strong with non-performing loans totaling 0.13%. We continue to monitor the Company's loan portfolio closely for any leading indicators of potential stress.

As previously noted, in the first quarter of 2023, we fully wrote-off a $1.8 million investment in a Signature Bank bond. Our corporate and municipal bond portfolio continues to be of high credit quality, and we have since re-evaluated these portfolios and do not see any further credit risk at this time. As of March 31, 2023, there was no allowance or impairments recorded on the Company's investment portfolio.

Shareholders' Equity. As of March 31, 2023, the Company's regulatory capital ratios were each well in excess of regulatory capital requirements.

The Company announced a cash dividend of $0.42 per share, payable on April 28, 2023, to shareholders of record on April 14, 2023, representing an annualized dividend yield of 4.64%, based on the Company's closing share price of $36.19, as reported by NASDAQ on March 31, 2023.

In January 2023, we announced a new share repurchase program was approved by the Company’s Board of Directors for up to 750,000 shares, or approximately 5% of total shares outstanding as of December 31, 2022, and the termination of our share repurchase program that was opened in 2022.

RESULTS OF OPERATIONS

Net Interest Income and Net Interest Margin

Net interest income is the interest earned on loans, securities, and other interest-earning assets, adjusted for net loan fees, origination costs, and accretion or amortization of fair value marks on loans and/or CDs created in purchase accounting, less the interest paid on interest-bearing deposits and borrowings. Net interest income is our largest source of revenue ("revenue" is defined as the sum of net interest income and non-interest income). For the quarter ended March 31, 2023, net interest income was 78% of total revenues, compared to 79% for the quarter ended March 31, 2022. Net interest income is affected by several factors including, but not limited to, changes in interest rates, loan and deposit pricing strategies and competitive conditions, the volume and mix of interest-earning assets and liabilities, and the level of non-performing assets.

Net interest margin is calculated as net interest income on a fully-taxable equivalent basis (non-GAAP) as a percentage of average interest-earning assets.

50

Net Interest Income and Net Interest Margin. Net interest income on a fully-taxable equivalent basis for the quarter ended March 31, 2023 was $34.5 million, a decrease of $2.1 million, or 6%, compared to the same period in 2022. The decrease consisted of a $16.0 million increase in interest expense, which reflects the change in short-term interest rates between periods, partially offset by an increase in interest income on a fully-taxable equivalent basis of $13.9 million, or 36%, between periods.

Our net interest margin on a fully-taxable equivalent basis for the quarters ended March 31, 2023 and 2022 was 2.54% and 2.87%, respectively.

•The increase in interest expense between periods was primarily the result of a 124 basis points increase in our average cost of funds. The Federal Funds Target Rate range at March 31, 2023 was 4.75% - 5.00%, compared to 0.25% - 0.50% at March 31, 2022. From the start of the rising interest rate cycle (December 31, 2021), the Company has actively managed its funding costs and, in doing so, has held its total funding beta2 to 28% through March 31, 2023. More recently, the Company has seen its total funding cost beta rise at an accelerated pace due to the FOMC increasing interest rates 125 basis points in the fourth quarter of 2022 and another 50 basis points in the first quarter of 2023. The Company's total funding beta for the first quarter of 2023 was 56%.

The Company’s funding costs grew to 1.45% for first quarter of 2023, compared to 0.21% for the first quarter of 2022 as deposits costs increased 107 basis points over this period to 1.22% for the first quarter of 2023 and borrowing costs increased 228 basis points over this period to 3.13% for the first quarter of 2023. As short-term interest rates continued to rise, depositors became more interest rate sensitive and deposit balances shifted from lower cost deposits, such as non-interest checking and savings, to higher cost deposits, such as interest checking and CDs.

•The increase in interest income between periods was driven by both interest-earning assets yield expansion and average interest-earning asset growth of $311.7 million, or 6%. Between periods, our yield on interest-earning assets grew 85 basis points to 3.92% for the first quarter of 2023, driven by loan yield expansion of 80 basis points to 4.50% for the first quarter of 2023 and investment yield expansion of 35 basis points to 2.19% for the first quarter of 2023. over this same period. This increased yield reflects the increase in interest rates between periods.

Furthermore, in the first quarter of 2023, the Company executed four pay-fixed, receive-floating interest rate swaps, totaling $300.0 million of notional value on a designated pool of fixed rate residential real estate loans. The derivative transaction was designated as a “fair value hedge” under ASC 815, and was completed to reduce its near-term interest rate risk exposure to rising interest rates. For the first quarter of 2023, the Company paid a weighted-average rate on these interest swaps of 3.65% and received Fed Funds Overnight Index Swap ("OIS") Rate, which generated $479,000 of interest income.

The following table presents, for the periods noted, average balances, interest income, interest expense, and the corresponding average yields earned and rates paid, as well as net interest income, net interest rate spread and net interest margin:

2 The total funding beta measures the change in total funding costs for the Company as compared to the change in the average Federal Funds Rate over the same period.

51

Quarterly Average Balance, Interest and Yield/Rate Analysis

	Three Months Ended
	March 31, 2023						March 31, 2022
(Dollars in thousands)	Average Balance		Interest		Yield/Rate		Average Balance		Interest		Yield/Rate
Assets
Interest-earning assets:
Interest-bearing deposits in other banks and other interest-earning assets	$	26,018	$	253	3.89	%	$	100,002	$	33	0.13	%
Investments - taxable	1,237,351		6,377		2.06	%	1,409,567		6,026		1.71	%
Investments - nontaxable(1)	105,502		966		3.66	%	115,021		967		3.36	%
Loans(2):
Commercial real estate	1,646,005		18,959		4.61	%	1,489,304		13,559		3.64	%
Commercial(1)	409,112		5,615		5.49	%	372,910		3,302		3.54	%
SBA PPP	594		4		2.55	%	21,687		1,033		19.05	%
Municipal(1)	15,997		140		3.56	%	15,221		130		3.46	%
Residential real estate	1,715,192		16,200		3.78	%	1,347,427		11,652		3.46	%
Consumer and home equity	253,760		4,440		7.10	%	226,731		2,382		4.26	%
Total loans	4,040,660		45,358		4.50	%	3,473,280		32,058		3.70	%
Total interest-earning assets	5,409,531		52,954		3.92	%	5,097,870		39,084		3.07	%
Cash and due from banks	46,713						47,820
Other assets	268,550						308,524
Less: ACL	(37,127)						(33,111)
Total assets	$	5,687,667					$	5,421,103
Liabilities & Shareholders' Equity
Deposits:
Non-interest checking	$	1,076,469	$	—	—	%	$	1,199,456	$	—	—	%
Interest checking	1,689,862		8,341		2.00	%	1,414,704		664		0.19	%
Savings	734,804		137		0.08	%	750,899		76		0.04	%
Money market	699,080		3,785		2.20	%	710,256		518		0.30	%
Certificates of deposit	320,209		1,368		1.73	%	304,720		338		0.45	%
Total deposits	4,520,424		13,631		1.22	%	4,380,035		1,596		0.15	%
Borrowings:
Brokered deposits	220,559		2,201		4.05	%	176,399		237		0.55	%
Customer repurchase agreements	182,754		481		1.07	%	208,147		129		0.25	%
Subordinated debentures	44,331		528		4.83	%	44,331		529		4.84	%
Other borrowings	175,223		1,604		3.71	%	1,613		2		0.39	%
Total borrowings	622,867		4,814		3.13	%	430,490		897		0.85	%
Total funding liabilities	5,143,291		18,445		1.45	%	4,810,525		2,493		0.21	%
Other liabilities	81,725						85,140
Shareholders' equity	462,651						525,438
Total liabilities & shareholders' equity	$	5,687,667					$	5,421,103
Net interest income (fully-taxable equivalent)			34,509						36,591
Less: fully-taxable equivalent adjustment			(229)						(226)
Net interest income			$	34,280					$	36,365
Net interest rate spread (fully-taxable equivalent)					2.47	%					2.86	%
Net interest margin (fully-taxable equivalent)					2.54	%					2.87	%

(1)    Reported on tax-equivalent basis calculated using a 21% tax rate, including certain commercial loans.

(2)    Non-accrual loans and loans held for sale are included in total average loans.

52

The following table presents certain information on a fully-taxable equivalent basis regarding changes in interest income and interest expense for the periods indicated. For each category of interest-earning assets and interest-bearing liabilities, information is provided with respect to changes attributable to rate and volume. The (a) changes in volume (change in volume multiplied by prior period's rate), (b) changes in rates (change in rate multiplied prior period's volume), and (c) changes in rate/volume (change in rate multiplied by the change in volume), which is allocated to the change due to rate column.

	Three Months Ended March 31, 2023 vs. March 31, 2022
	Increase (Decrease) Due to:				Net Increase (Decrease)
(In thousands)	Volume		Rate
Interest-earning assets:
Interest-bearing deposits in other banks and other interest-earning assets	$	(24)	$	244	$	220
Investments – taxable	(736)		1,087		351
Investments – nontaxable	(80)		79		(1)
Commercial real estate	1,469		3,546		5,015
Commercial	397		1,922		2,319
SBA PPP	(1,005)		(24)		(1,029)
Municipal	7		3		10
Residential real estate	3,080		1,847		4,927
Consumer and home equity	284		1,774		2,058
Total interest income (fully-taxable equivalent)	3,392		10,478		13,870
Interest-bearing liabilities:
Interest checking	129		7,548		7,677
Savings	(2)		63		61
Money market	(8)		3,275		3,267
Certificates of deposit	17		1,013		1,030
Brokered deposits	60		1,904		1,964
Customer repurchase agreements	(16)		368		352
Junior subordinated debentures	—		(1)		(1)
Other borrowings	191		1,411		1,602
Total interest expense	371		15,581		15,952
Net interest income (fully-taxable equivalent)	$	3,021	$	(5,103)	$	(2,082)

Net interest income on a fully-taxable equivalent basis included the following for the periods indicated:

	Income Statement Location	Three Months Ended March 31,
(In thousands)		2023		2022
Loan (cost) fees	Interest income	$	(467)	$	1,081
Net fair value mark accretion from purchase accounting	Interest income and Interest expense	34		81
Recoveries on previously charged-off acquired loans	Interest income	26		145
Total		$	(407)	$	1,307

53

Provision (Credit) for Credit Losses

The provision (credit) for credit losses was made up of the following components for the periods indicated:

	Three Months Ended March 31,				Change
(Dollars in thousands)	2023		2022		$		%
Provision (credit) for loan losses	$	439	$	(1,236)	$	1,675	(136)	%
(Credit) provision for credit losses on off-balance sheet credit exposures	(276)		161		(437)		(271)	%
Provision for HTM debt securities	1,839		—		1,839		—	%
Provision (credit) for credit losses	$	2,002	$	(1,075)	$	3,077	(286)	%

Provision for loan losses. For the quarter ended March 31, 2023, we recorded provision for loan losses of $439,000 due to the continued future uncertain macroeconomic conditions and outlook as a fear of a recession in the near term continues to grow. Partially offsetting the need for provisions was continued strong asset quality across the Company’s loan portfolios with no immediate signs of deterioration, as highlighted by the following credit quality metrics: (i) net charge-offs of 0.02% of average loans (annualized) for the quarter ended March 31, 2023, (ii) non-performing assets of 0.09% of total assets as of March 31, 2023, and (iii) and past due loans (30-89 days) of 0.05% of total loans as of March 31, 2023. The release of $1.2 million in provision for the first quarter of 2022 was driven by the release of qualitative reserves for certain commercial real estate loans that were established at the onset of the COVID-19 pandemic.

(Credit) provision for credit losses on off-balance credit exposures. At March 31, 2023, the ACL on off-balance sheet credit exposures was $3.0 million, as compared to $3.4 million as of March 31, 2022. The decrease was driven by the decrease in unfunded commitments of $110.1 million between periods.

Provision for HTM debt securities. The provision for HTM debt securities was driven by the full write-off of one corporate bond invested in Signature Bank due to its failure in the first quarter of 2023.

Non-Interest Income

The following table presents the components of non-interest income for the periods indicated:

	Three Months Ended March 31,						Change
(Dollars in thousands)	2023			2022			$		%
Debit card income	$	2,938		$	2,924		$	14	—	%
Service charges on deposit accounts	1,762			1,833			(71)		(4)	%
Income from fiduciary services	1,600			1,631			(31)		(2)	%
Brokerage and insurance commissions	1,093			994			99		10	%
Mortgage banking income, net(1)	716			1,034			(318)		(31)	%
Bank-owned life insurance	592			576			16		3	%
Other income(2)	1,165			833			332		40	%
Total non-interest income	$	9,866		$	9,825		$	41	—	%
Non-interest income as a percentage of total revenues	22		%	21		%

(1)    Mortgage banking income, net: The decrease for the three months ended March 31, 2023, compared to the same period of 2022, was driven by the change in the housing market between periods, highlighted by the shift in the interest rate environment between periods that drove the decrease in mortgage production of 58% compared to the first quarter of 2022. During the first quarter of 2023, the Company sold $35.1 million, or 40%, of its residential mortgage loan production compared to $46.6 million, or 24%, of its residential mortgage loan production for the first quarter of 2022. As of March 31, 2023, the Company's residential mortgage loan pipeline stood at $45.5 million, compared to the $121.4 million at March 31, 2022, a decrease of 62%.

(2)    Other income: The increase in other income for the first quarter of 2023, compared to the same period last year, was driven by an increase in customer loan swap fees of $299,000.

54

Non-Interest Expense

The following table presents the components of non-interest expense for the periods indicated:

	Three Months Ended March 31,						Change
(Dollars in thousands)	2023			2022			$		%
Salaries and employee benefits(1)	$	14,573		$	15,506		$	(933)	(6)	%
Furniture, equipment and data processing	3,211			3,132			79		3	%
Net occupancy costs	2,079			2,144			(65)		(3)	%
Debit card expense(2)	1,201			1,066			135		13	%
Consulting and professional fees	1,055			1,007			48		5	%
Regulatory assessments(3)	845			655			190		29	%
Amortization of core deposit intangible assets	148			156			(8)		(5)	%
Other expenses(4)	3,053			2,543			510		20	%
Total non-interest expense	$	26,165		$	26,209		$	(44)	—	%
Ratio of non-interest expense to total revenues	59.27		%	56.74		%
Efficiency ratio (non-GAAP)	58.96		%	56.47		%

(1)    Salaries and employee benefits: The decrease between periods was primarily driven by lower incentive accruals.

(2)    Debit card expense: The increase between periods was driven by higher per unit costs.

(3)    Regulatory assessments: The increase between periods was driven by the increase in FDIC assessments rates, effective January 1, 2023.

(4)    Other expenses: The increase between periods was driven by an increase in external hiring costs of $234,000, and a change in the credit valuation adjustment on the Company's back-to-back loan swaps with its commercial customers of $123,000.

FINANCIAL CONDITION

Cash and Cash Equivalents

Total cash and cash equivalents at March, 31 2023, were $75.7 million, compared to $75.4 million at December 31, 2022. We continually monitor our cash levels as part of our liquidity risk management practices. Refer to the "—Liquidity" section for additional details.

Investments

The Company utilizes the investment portfolio to manage liquidity, interest rate risk, and regulatory capital, as well as to take advantage of market conditions to generate returns without undue risk. At March 31, 2023 and December 31, 2022, the Company’s investment portfolio consisted of MBS, CMO, municipal and corporate debt securities, FHLBB and FRB common stock, and mutual funds held in a rabbi trust for its executive and director nonqualified retirement plans. We designate our debt securities as AFS or HTM based on our intent and investment strategy and they are carried at fair value or amortized cost, respectively. Our FHLBB and FRB common stock is carried at cost, and our mutual funds are designated as trading securities and are carried at fair value.

In the second quarter of 2022, we transferred securities from AFS to HTM to help manage our capital position in a rising interest rate environment. The securities were reclassified at fair value at the time of the transfer, which was a non-cash transaction. At March 31, 2023, the net unrealized losses on the transferred securities reported within AOCI were $50.9 million, net of a deferred tax asset of $13.9 million, and the weighted-average life on these securities was 8.8 years. At December 31, 2022, the net unrealized losses on the transferred securities reported within AOCI were $52.2 million, net of a deferred tax asset of $14.3 million.

At March 31, 2023, the reported value of Company's total investments portfolio was $1.2 billion, a decrease of $9.3 million, or 0.7%, since December 31, 2022. This was driven by changes within our debt securities portfolio, including:

•Paydowns, calls and maturities of $25.1 million;

55

•A net increase in the fair value of the AFS debt securities portfolio of $9.9 million due to interest rate movements during the quarter. The 2-year U.S. Treasury decreased 35 basis points and the 10-year U.S. Treasury fell 40 basis points during the first three months of 2023 to 4.06% and 3.48%, respectively, at March 31, 2023, causing bond prices to rise.

•An increase of $6.7 million in FHLBB common stock due to increased borrowing levels during the first quarter of 2023.

•At March 31, 2023, the Company wrote-off a $1.8 million Signature Bank bond as the bank failed during the first quarter of 2023.

Our AFS debt securities portfolio, which comprised 55% of our investment portfolio at March 31, 2023 and December 31, 2022, was carried at fair value using Level 2 valuation techniques. Refer to Note 15 of the consolidated financial statements for further details on the Company's fair value techniques. Our HTM debt securities portfolio comprised 43% of our investment portfolio at March 31, 2023 and at December 31, 2022.

The book value of our debt securities as of March 31, 2023 and December 31, 2022, was $1.3 billion. Our debt securities portfolio has limited credit risk due to its composition, which includes securities backed by the U.S. government and government-sponsored agencies, and highly rated corporate and municipal bonds by nationally recognized rating agencies. The following table provides the make-up of the Company's investment portfolio as of March 31, 2023, based on the book value of each security type as a percentage of total book value of the Company's debt securities:

(Dollars in thousands)	Three Months Ended March 31, 2023		Percentage of Total
MBS - Agency Backed	$	877,688	66	%
CMO - Agency Backed	260,582		19	%
Municipal	105,191		8	%
Corporate Bonds	44,593		3	%
Other - Agency Backed	53,026		4	%
Total	$	1,341,080	100	%

We continually monitor and evaluate our investment portfolio to identify and assess risks within our portfolio, including but not limited to, the impact of the current interest rate environment and the related prepayment risk, and the review of credit ratings. The overall mix of debt securities at March 31, 2023, compared to December 31, 2022, remains relatively unchanged and the Company expects it will continue to be well positioned to provide a stable source of cash flow. At March 31, 2023 and December 31, 2022, the duration of our debt investment securities portfolio, adjusting for calls when appropriate and consensus prepayment speeds, was 5.7 years and 5.8 years, respectively.

In the first quarter of 2023, we wrote-off a $1.8 million Signature Bank corporate bond as that bank failed during the quarter. This corporate bond was designated as HTM and previously carried no ACL. We completed a review of our HTM and AFS investment portfolio as of March 31, 2023, and concluded that no ACL was warranted on any of the remaining bonds at this time. The fair value and book value of the Company's corporate bonds and municipal securities as of March 31, 2023 and December 31, 2022 was as follows:

	March 31, 2023						December 31, 2022
(Dollars in thousands)	Fair Value		Book Value		Net Unrealized (Loss) Gain		Fair Value		Book Value		Net Unrealized Loss
Corporate bonds	$	42,292	$	44,593	$	(2,301)	$	44,013	$	46,350	$	(2,337)
Municipal bonds	106,023		105,191		832		104,024		105,656		(1,632)
Total	$	148,315	$	149,784	$	(1,469)	$	148,037	$	152,006	$	(3,969)

At March 31, 2023, corporate bonds were approximately 3% of the book value of the total bond portfolio. At March 31, 2023, corporate bonds with a book value of $35.1 million, or 79% of the corporate bond portfolio, carried an investment-grade credit rating and the remaining $9.5 million of book value, or 21% of the corporate bond portfolio, were non-rated corporate

56

bonds of community banks within our markets. As of March 31, 2023, the corporate bond portfolio was made up of 20 different companies, which included 17 different banks. The banks in the portfolio range from the largest U.S. banks to community banks, with the largest exposure being to a global systemically important bank, or "G-SIB", with a book value of $6.7 million as of March 31, 2023. Since March 31, 2023, a limited number of the rated corporate bonds in the portfolio have been downgraded as a result of stress in the banking system, although all remain investment-grade. We will continue to monitor this portfolio.

At March 31, 2023, municipal bonds were approximately 8% of the book value of the total bond portfolio. At March 31, 2023, all municipal bonds carried an investment-grade credit rating.

At March 31, 2023 and December 31, 202, the Company did not carry an ACL on any of its corporate or municipal bonds.

Our other investments on the consolidated statements of condition consist of FHLBB and FRB common stock. These investments are carried at cost. We are required to maintain a certain level of investment in FHLBB stock based on our level of FHLBB advances, and maintain a certain level of investment in FRB common stock based on the Bank's capital levels. As of March 31, 2023 and December 31, 2022, our investment in FHLBB stock totaled $14.0 million and $7.3 million, respectively, and our investment in FRB stock was $5.4 million at each date.

Our investments in mutual funds are designated as trading securities and carried at fair value. These investments are held within a rabbi trust and will be used for future payments associated with the Company’s Executive and Director Deferred Compensation Plan. These investments are carried at fair value using Level 1 valuation techniques. Refer to Note 15 of the consolidated financial statements for further details on fair value.

Loans

The Company provides loans primarily to customers located within our geographic market area. Our primary market continues to be Maine, making up 69% and 70% of the loan portfolio as of March 31, 2023 and December 31, 2022, respectively. Massachusetts and New Hampshire are our second and third largest markets that we serve, making up 15% and 9%, of our total loan portfolio as of March 31, 2023, respectively, and 15% and 9% as of December 31, 2022. As of March 31, 2023, our distribution channels included 57 branches within Maine, two locations in New Hampshire, including a branch in Portsmouth and a commercial loan production office in Manchester, a mortgage loan production office in Braintree, Massachusetts, and an online residential mortgage and small business digital loan platform.

The following table sets forth the composition of our loan portfolio as of the dates indicated:

							Change
(Dollars in thousands)	March 31, 2023			December 31, 2022			($)		(%)
Commercial real estate - non-owner-occupied	$	1,328,793		$	1,292,443		$	36,350	3	%
Commercial real estate - owner-occupied	337,824			332,494			5,330		2	%
Commercial	421,099			430,131			(9,032)		(2)	%
Residential real estate	1,733,147			1,700,266			32,881		2	%
Consumer and home equity	252,245			255,019			(2,774)		(1)	%
Total loans	$	4,073,108		$	4,010,353		$	62,755	2	%
Commercial Loan Portfolio	$	2,087,716		$	2,055,068		$	32,648	2	%
Retail Loan Portfolio	$	1,985,392		$	1,955,285		$	30,107	2	%
Commercial Portfolio Mix	51		%	51		%
Retail Portfolio Mix	49		%	49		%

For the first quarter of 2023, the Company held 60% of its funded residential mortgage production, which decreased from 84% in the fourth quarter of 2022. The Company anticipates over the next several quarters it will continue to sell more residential mortgage production as a percentage of total production in comparison to more recent periods in order to manage the Company's balance sheet in the current interest rate environment.

57

At March 31, 2023 and December 31, 2022, the non-residential building operators' industry (operators of commercial and industrial buildings, retail establishments, theaters, banks and insurance buildings) and lessors of residential buildings industry (lessors of buildings used as residences, such as single-family homes, apartments and town houses) concentrations were 32% and 28% of our total commercial real estate portfolio and 13% and 12% of total loans, respectively. At March 31, 2023, there were no other industry concentrations within our loan portfolio that exceeded 10% of total loans.

During the first quarter of 2023, the banking industry faced a heightened focus on commercial real estate and the office space sector specifically given the increase in vacant properties. As of March 31, 2023, the Company's commercial portfolio, including commercial real estate and commercial loans, totaled $2.1 billion, of which office space totaled $207.2 million, or 5% of total loans and 20% of the commercial real estate investment portfolio. The Company's office space loans as of March 31, 2023, were located in its primary markets — Maine, Massachusetts and New Hampshire. As of March 31, 2023, the Company was not aware of any troubled credits within its office space portfolio, and it had no office space loans that were non-performing or 30-89 days past due.

Asset Quality

Our practice is to manage the Company's loan portfolio proactively so that we are able to effectively identify problem credits and trends early, assess and implement effective work-out strategies, and take charge-offs as promptly as practical. In addition, the Company continually reassesses its underwriting standards in response to credit risk posed by changes in economic conditions. The Company continues to dedicate significant resources to monitor and manage credit risk throughout our loan portfolio and includes management and board-level oversight as follows:

•The Credit Risk and Special Assets team and the Credit Risk Policy Committee, which is an internal management committee comprised of various executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Credit Risk and Special Assets, Risk, and Commercial and Retail Banking, oversee the Company's systems and procedures to monitor the credit quality of its loan portfolio, conduct a loan review program, and maintain the integrity of the loan ratings system.

•The adequacy of the ACL is overseen by the Management Provision Committee, which is an internal management committee comprised of various Company executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Credit Risk and Special Assets, Compliance, and Commercial and Retail Banking. The Management Provision Committee supports the oversight efforts of the Audit Committee of the Board of Directors.

•The Directors Credit Committee of the Board of Directors reviews large credit exposures, monitors external loan review reports, reviews the lending authority for individual loan officers when required, and has approval authority and responsibility for all matters regarding the loan policy and other credit-related policies, including reviewing and monitoring asset quality trends, and concentration levels.

•The Audit Committee of the Board of Directors has approval authority and oversight responsibility for the ACL adequacy and methodology.

Non-Performing Assets. Non-performing assets include non-accrual loans, accruing loans 90 days or more past due, accruing TDRs prior to the Company's adoption ASU 2022-02, and property acquired through foreclosure or repossession. The following table sets forth the composition and amounts of our non-performing loans as of the dates indicated: 

58

(Dollars in thousands)	March 31, 2023			December 31, 2022
Non-accrual loans:
Commercial real estate - non-owner-occupied	$	10		$	11
Commercial real estate - owner-occupied	47			46
Commercial	748			715
Residential real estate	1,715			1,733
Consumer and home equity	438			486
Total non-accrual loans	2,958			2,991
Accruing TDRs prior to ASU 2022-02 adoption not included above	2,154			2,114
Total non-performing loans	5,112			5,105
Other real estate owned	—			—
Total non-performing assets	$	5,112		$	5,105
Total loans, excluding loans held for sale	$	4,073,108		$	4,010,353
Total assets	$	5,716,605		$	5,671,850
ACL on loans	$	37,134		$	36,922
ACL on loans to non-accrual loans	1,255.38		%	1,234.44		%
Non-accrual loans to total loans	0.07		%	0.07		%
Non-performing loans to total loans	0.13		%	0.13		%
Non-performing assets to total assets	0.09		%	0.09		%

Potential Problem Loans. Potential problem loans consist of classified accruing commercial and commercial real estate loans that were 30-89 days past due. Such loans are characterized by weaknesses in the financial condition of borrowers or collateral deficiencies. Based on historical experience, the credit quality of some of these loans may improve due to changes in collateral values or the financial condition of the borrowers, while the credit quality of other loans may deteriorate, resulting in a loss. These loans are not included in the above analysis of non-accrual loans. At March 31, 2023, loans classified as potential problem loans totaled $65,000.

Past Due Loans. Past due loans consist of accruing loans that were 30-89 days past due. The following table presents the recorded investment of past due loans as of the dates indicated:

(Dollars in thousands)	March 31, 2023			December 31, 2022
Accruing loans 30-89 days past due:
Commercial real estate - non-owner-occupied	$	34		$	267
Commercial real estate - owner-occupied	77			55
Commercial	1,030			801
Residential real estate	313			1,038
Consumer and home equity	684			391
Total	$	2,138		$	2,552
Total loans	$	4,073,108		$	4,010,353
Accruing loans 30-89 days past due to total loans	0.05		%	0.06		%

ACL. The following table sets forth information concerning the components of our ACL for the periods indicated:

59

	At or For The Three Months Ended March 31,						At or For The Year Ended December 31, 2022
(Dollars in thousands)	2023			2022
ACL on loans at the beginning of the period	$	36,922		$	33,256		$	33,256
Provision (credit) for loan losses	439			(1,236)			4,430
Net charge-offs (recoveries)1
Commercial real estate	(1)			(2)			(5)
Commercial	213			189			663
Residential real estate	14			—			66
Consumer and home equity	1			63			40
ACL on loans at the end of the period	$	37,134		$	31,770		$	36,922
Components of ACL:
ACL on loans	$	37,134		$	31,770		$	36,922
ACL on off-balance sheet credit exposures	2,990			3,355			3,265
ACL at end of the period	$	40,124		$	35,125		$	40,187
Total loans, excluding loans held for sale	$	4,073,108		$	3,534,218		$	4,010,353
Average Loans	$	4,040,660		$	3,473,280		$	3,710,415
Net charge-offs to average loans (annualized)	0.02		%	0.03		%	0.02		%
Provision (credit) for loan losses (annualized) to average loans	0.04		%	(0.14)		%	0.12		%
ACL on loans to total loans	0.91		%	0.90		%	0.92		%

(1)    Additional information related to net charge-offs (recoveries) is presented in the following table for the periods indicated:

	For The Three Months Ended March 31,
(Dollars in thousands)	Total Charge-offs		Total Recoveries		Net Charge-Offs (Recoveries)		Average Loans		Ratio of Net Charge-Offs (Recoveries) to Average Loans (Annualized)
2023:
Commercial real estate	$	—	$	1	$	(1)	$	1,646,005	—	%
Commercial	312		99		213		425,703		0.20	%
Residential real estate	18		4		14		1,715,192		—	%
Consumer and home equity	4		3		1		253,760		—	%
Total	$	334	$	107	$	227	$	4,040,660	0.02	%
2022:
Commercial real estate	$	—	$	2	$	(2)	$	1,489,304	—	%
Commercial	246		57		189		394,597		0.19	%
Residential real estate	—		—		—		1,347,427		—	%
Consumer and home equity	66		3		63		226,731		0.11	%
Total	$	312	$	62	$	250	$	3,458,059	0.03	%
	For the Year Ended December 31, 2022
Commercial real estate	$	—	$	5	$	(5)	$	1,532,225	—	%
Commercial	1,042		379		663		422,304		0.16	%
Residential real estate	66		—		66		1,511,985		—	%
Consumer and home equity	134		94		40		243,901		0.02	%
Total	$	1,242	$	478	$	764	$	3,710,415	0.02	%

60

ACL on Loans. There were no significant changes in our modeling methodology to determine the ACL on loans during the three months ended March 31, 2023. The significant key assumptions used with the ACL on loans calculation at March 31, 2023 and December 31, 2022, included: (i) Company-specific macroeconomic factors (i.e. loss drivers), (ii) our forecast period and reversion speed, (iii) prepayment speeds, and (iv) various qualitative factors.

As of March 31, 2023 and December 31, 2022, the recorded ACL on loans was $37.1 million and $36.9 million, respectively, and represented our best estimate. The increase in the ACL on loans between periods was primarily driven by economic outlook of a softening economy over the coming quarters.

The overall global and national markets continue to be volatile and carry a high degree of uncertainty, and any changes to our forecast or qualitative factors subject our ACL estimate to a higher risk of fluctuation between periods.

We may adjust our assumptions to account for differences between expected and actual losses from period to period. A future change of our assumptions likely will alter the level of allowance required and may have a material impact on future results of operations and financial condition. The ACL on loans is reviewed periodically within a calendar quarter to assess trends in CECL key assumptions and asset quality, and their effects on the Company's financial condition.

ACL on Off-Balance Sheet Credit Exposures. There were no significant changes in our modeling methodology to determine the ACL on off-balance sheet credit exposures during the three months ended March 31, 2023. The model uses the credit loss factors for each segment calculated within the ACL on loans model described above. The ACL on off-balance sheet credit exposures as of March 31, 2023 and December 31, 2022, was $3.0 million and $3.3 million, respectively.

The ACL on off-balance sheet credit exposures was presented within accrued interest and other liabilities on the consolidated statements of condition. Increases (decreases) to the ACL on off-balance sheet credit exposures were presented within provision (credit) for credit losses on the consolidated statements of income.

We may adjust our assumptions to account for differences between expected and actual losses from period to period. A future change to our assumptions will likely alter the level of allowance required and may have a material impact on future results of operations and financial condition.

ACL on HTM Securities. Each quarter the Company evaluates its investment portfolio for potential credit risk, and, in the first quarter of 2023, the Company fully wrote-off one $1.8 million Signature Bank HTM corporate bond. Through our evaluation of our HTM security holdings there were no other credit concerns identified within our investment portfolio. As of March 31, 2023 and December 31, 2022, there was no ACL recorded on HTM investments. Refer to "—Investments" and Note 3 of the consolidated financial statements for further discussion.

Liabilities

Deposits. At March 31, 2023, deposits totaled $4.6 billion, a decrease of $184.2 million, or 4%, since December 31, 2022. The decrease in deposits during the first quarter of 2023 was driven primarily by one large municipal deposit relationship decreasing its interest checking balance by $122.4 million during the first quarter of 2023. The Company has the ability to move funds in and out of this deposit relationship when it is cost advantageous compared to other funding sources, such as FHLBB borrowings. Excluding the impact of this one large municipal deposit relationship, the Company's total deposits decreased $61.8 million, or 1%, during the first quarter of 2023.

Core deposits (non-GAAP) totaled $4.1 billion as of March 31, 2023, a decrease of $278.5 million, or 6%, since December 31, 2022. However, excluding the impact of the one large municipal deposit relationship discussed above, core deposits decreased $156.1 million, or 4%, during the first quarter of 2023. The decrease in core deposits was primarily the result of normal seasonal outflows combined with pricing pressures as depositors look for alternative products with higher interest rates in the current environment, such as certificates of deposit ("CD"), which increased $59.7 million, or 20%, during the first quarter of 2023.

The Company's loan-to-deposit ratio was 88% at March 31, 2023, compared to 82% at December 31, 2022.

At March 31, 2023, the Company had no customer relationships that exceeded 10% of total deposits.

61

Uninsured and Uncollateralized Deposits. Total deposits that exceeded the FDIC deposit insurance limit of $250,000 was $1.1 billion, or 24% of total deposits, as of March 31, 2023 and $1.4 billion, or 29% of total deposits, as of December 31, 2022.

Total uninsured and uncollateralized deposits that exceeded the FDIC deposit insurance limit of $250,000 and were not secured by pledged assets or any other guarantee of the Company totaled $691.5 million, or 15% of total deposits, as of March 31, 2023 and $754.9 million, or 16% of total deposits, as of December 31, 2022.

The portion of CDs that exceeded the FDIC deposit insurance limit of $250,000 was $72.9 million, or 20% of CD balances, as of March 31, 2023 and $62.5 million, or 21% of CD balances, as of December 31, 2022.

Borrowings. At March 31, 2023, total borrowings were $530.6 million, an increase of $221.1 million, or 71%, since December 31, 2022. The increase reflects the need for additional funding to support asset growth of 1% and a decrease in deposits of 4% during the first quarter of 2023. FHLBB overnight advances increased $170.7 million during the first quarter of 2023 to $189.4 million at March 31, 2023, and short-term FHLBB advances increased $50.0 million during the first quarter of 2023 to $100.0 million at March 31, 2023.

Shareholders' Equity

Shareholders' equity at March 31, 2023, totaled $464.9 million, an increase of $13.6 million, or 3%, since December 31, 2022. The increase was driven by net income of $12.7 million for the first quarter of 2023, net of regular quarterly cash dividends of $6.1 million, and an increase AOCI of $6.5 million driven by a decrease in long-term interest rates between periods resulting in an improvement in valuation of the AFS bond portfolio.

On March 28, 2023, the Company announced a quarterly cash dividend to shareholders of $0.42 per share, payable on April 28, 2023 to shareholders of record as of April 14, 2023. As of March 31, 2023, the Company's annualized dividend yield was 4.64% based on Camden National's closing share price of $36.19, as reported by NASDAQ on March 31, 2023.

In January 2023, the Company's Board of Directors authorized the repurchase of up to 750,000 shares of the Company's common stock, representing approximately 5% of the Company's issued and outstanding shares of common stock as of December 31, 2022. During the first quarter ended March 31, 2023, the Company did not repurchase any shares.

The following table presents certain information regarding shareholders’ equity as of and for the periods indicated:

	At or For The Three Months Ended March 31,						At or For The Year Ended December 31, 2022
	2023			2022
Financial Ratios
Average equity to average assets	8.13		%	9.69		%	8.51		%
Common equity ratio	8.13		%	8.90		%	7.96		%
Tangible common equity ratio (non-GAAP)	6.56		%	7.25		%	6.37		%
Dividend payout ratio	48.28		%	35.09		%	38.76		%
Per Share Data
Book value per share	$	31.87		$	32.72		$	30.98
Tangible book value per share (non-GAAP)	$	25.28		$	26.16		$	24.37
Dividends declared per share	$	0.42		$	0.40		$	1.62

Refer to "—Capital Resources" and Note 10 of the consolidated financial statements for further discussion of the Company and Bank's capital resources and regulatory capital requirements.

62

LIQUIDITY

Our liquidity needs require the availability of cash to meet the withdrawal demands of depositors and credit commitments to borrowers. Liquidity is defined as our ability to maintain availability of funds to meet customer needs, as well as to support our asset base. The primary objective of liquidity management is to maintain a balance between sources and uses of funds to meet our cash flow needs in the most economical and expedient manner. Due to the potential for unexpected fluctuations in both deposits and loans, active management of liquidity is necessary. We maintain various sources of funding and levels of liquid assets and monitor liquidity in accordance with internal guidelines and all applicable regulatory requirements. Sources of funds that we utilize consist of deposits; borrowings from the FHLBB and other sources; cash flows from loans and investments; and cash flows from operations, including other contractual obligations and commitments.

During the first quarter of 2023, the banking industry experienced two high-profile bank failures, followed by another on May 1, 2023, which led to an industry-wide increase in concerns related to liquidity, deposit outflows and eroding customer confidence in the banking system. Despite these developments and related recent volatility in the banking industry, our liquidity position continued to exceed our target levels and we believe we currently have appropriate liquidity available to respond to demands.

As of March 31, 2023, our primary liquidity sources available were as follows:

(In thousands)	Amount
Available primary liquidity:
Excess cash1	$	17,259
Unpledged investment securities	475,225
Unpledged municipal securities	94,967
Over collateralized securities pledging position	150,687
FHLBB borrowing capacity	446,478
Current Fed Discount Window availability	43,502
Unsecured borrowing lines	69,872
Total available primary liquidity	$	1,297,990

(1)     Excess Cash represents cash held at the FRB that is above the minimum reserve requirement. At March 31, 2023 the minimum reserve requirement remains at zero.

Total available primary liquidity of $1.3 billion was 1.9 times uninsured and uncollateralized deposits as of March 31, 2023. Refer to "—Financial Condition—Liabilities—Uninsured and Uncollateralized Deposits" for further details.

In addition to the available primarily liquidity noted above, as of March 31, 2023, we may access additional funding through the brokered markets.

Subsequent to March 31, 2023, we are also now eligible to borrow up to $146.0 million from the Federal Reserve's Bank Term Funding Program ("BTFP"), which provides additional contingent liquidity through the pledging of certain qualifying securities and other assets. Advances can be requested under the BTFP until at least March 11, 2024, and may have a term of up to one year. The Company can borrow any time during the term and can repay the obligation at any time without penalty.

Although we believe that our level of liquidity is sufficient to meet current and future funding requirements, changes in current economic conditions, including consumer saving habits and the availability or access to the brokered deposit and wholesale repurchase markets, could significantly affect our liquidity position.

Deposits. Deposits continue to represent our primary source of funds. As of March 31, 2023 and December 31, 2022, total deposits, including brokered deposits, were $4.6 billion, which included money market deposits of $72.6 million and $73.5 million, respectively, from Camden National Wealth Management, which represent client funds. These funds fluctuate with changes in the portfolios of the clients of Camden National Wealth Management. Time deposits are generally considered to be more interest rate sensitive than other deposits and, therefore, more likely to be withdrawn to obtain higher yields elsewhere if available.

63

The following is a summary of the scheduled maturities of CDs as of March 31, 2023:

(In thousands)	CDs
1 year or less	$	133,263
> 1 year	226,840
Total	$	360,103

Brokered deposits totaled $215.9 million at March 31, 2023, and consisted of $143.4 million of brokered CDs and $72.5 million of brokered money market accounts. As of March 31, 2023, all brokered CDs are schedule to mature within the next 12 months. At March 31, 2023, we also have access to additional brokered deposits.

Borrowings. Borrowings are used to supplement deposits as a source of liquidity, which may include borrowings and advances from the FHLBB, federal funds and repurchase agreements. As of March 31, 2023, total borrowings were $530.6 million, compared to $309.5 million as of December 31, 2022. We secure borrowings from the FHLBB with qualified residential real estate loans, certain investment securities and certain other assets available to be pledged. As of March 31, 2023, the Company had $446.5 million in this borrowing capacity from the FHLBB. Customer repurchase agreements are secured by mortgage-backed securities and government-sponsored enterprises. Through the Bank, we have available lines of credit with the FHLBB of $9.9 million, with correspondent banks of $50.0 million and $10.0 million, and with the FRB Discount Window of $43.5 million as of March 31, 2023. We also believe we have additional untapped access to the brokered deposit market and wholesale reverse repurchase transactions market. These sources are considered as liquidity alternatives in our contingent liquidity plan.

As previously noted, subsequent to March 31, 2023, we added $146.0 million of borrowing capacity under the BTFP, which has not been utilized to date. The Company pledged securities to obtain such level of borrowing capacity.

The following is a summary of the scheduled maturities of borrowings as of March 31, 2023:

(In thousands)	FHLBB Advances		Customer Repurchase Agreements		Subordinated Debentures		Total
1 year or less	$	289,400	$	196,918	$	—	$	486,318
> 1 year	—		—		44,331		44,331
Total	$	289,400	$	196,918	$	44,331	$	530,649

64

Loans. Contractual loan repayments also affect our liquidity position. Actual speed and timing of repayment may differ materially from contract terms due to prepayments or nonpayment.

The Company's unpledged residential mortgage loan portfolio is also a source of contingent liquidity as it could be sold in a reasonable time period, at fair value, on the secondary market. As of March 31, 2023, qualifying residential mortgage loans with a book value of $1.6 billion were pledged as collateral to the FHLBB.

The following table presents the contractual maturities of loans at the date indicated:

	March 31, 2023
(Dollars in thousands)	Due in 1 Year or Less		Due after 1 Year Through 5 Years		Due After 5 Years Through 15 Years		Due in More than 15 Years		Total		Percent of Total Loans
Maturity Distribution(1):
Fixed Rate:
Commercial real estate(2)	$	17,884	$	184,365	$	597,129	$	2,070	$	801,448	20	%
Commercial	8,192		95,643		88,544		436		192,815		5	%
Residential real estate	251		10,106		168,556		1,174,591		1,353,504		33	%
Consumer and home equity	2,677		11,633		22,592		165,353		202,255		5	%
Total fixed rate	29,004		301,747		876,821		1,342,450		2,550,022		63	%
Adjustable Rate(3):
Commercial real estate(2)	6,070		188,060		410,220		260,819		865,169		21	%
Commercial	65,251		96,499		56,268		10,266		228,284		6	%
Residential real estate	28		957		39,009		339,649		379,643		9	%
Consumer and home equity	143		2,148		11,220		36,479		49,990		1	%
Total variable rate	71,492		287,664		516,717		647,213		1,523,086		37	%
Total loans	$	100,496	$	589,411	$	1,393,538	$	1,989,663	$	4,073,108	100	%

(1)    Scheduled repayments are reported in the maturity category in which payment is due. Demand loans, loans having no stated schedule of repayments and no stated maturity, and overdrafts are reported as due in one year or less

(2)    Commercial real estate loans includes non-owner-occupied and owner-occupied properties.

(3)    Includes floating rate loans.

Additionally, we have active relationships with various secondary market investors that purchase residential mortgage loans we originate. In addition to managing our interest rate risk position and earnings through the sale of these loans, we are also able to manage our liquidity position through timely sales of residential mortgage loans to the secondary market.

Investments. We generally invest in amortizing MBS and CMO debt securities that return cash flow at an accelerated rate in comparison to other types of debt securities that are of a bullet structure. MBS and CMO debt security cash flow will vary

depending on the interest rate environment because borrowers may have the right to call or prepay obligations with or without

prepayment penalties. The rise in interest rates during 2022 resulted in slowing cash flows. As of March 31, 2023 and December 31, 2022, the Company's MBS and CMO debt securities portfolio totaled 88% of book value for both periods, respectively, of the Company's investment portfolio.

The Company's unpledged AFS investment portfolio is also a source of contingent liquidity as it could be sold in a reasonable time period, at fair value, on the secondary market, which was $338.2 million at March 31, 2023.

65

The following is a summary of the scheduled cash flows from our debt securities portfolio, including investments designated as AFS and HTM, as of March 31, 2023:

(In thousands)	Contractual Cash Flows(1)
1 year or less	$	90,747
> 1 year	1,135,745
Total	$	1,226,492

(1)    Expected contractual cash flows could differ as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Other Liquidity Requirements. The Company generates cash flows from earnings through its normal course of business from earnings and, although not contractual, the Company has a history of paying a quarterly cash dividend to its shareholders and repurchasing its shares of common stock. For the first quarter ended March 31, 2023, the Company reported $12.7 million of net income and paid cash dividends of $6.1 million to shareholders.

Also through its normal operations, the Company is party to several other contractual obligations not previously discussed, such as various lease agreements on a number of its branches. Renewal options within the various lease contracts, as applicable, were considered to determine the lease term and estimate the contractual obligation and commitment for the Company's operating and finance leases. Furthermore, certain lease contracts of the Company contain language that subject its rent payment to variability, such as those tied to an index or change in an index. As a result, the future contractual obligation and commitment may materially differ from that estimated and disclosed within the table below. At March 31, 2023, we had the following lease and other contractual obligations to make future payments under each of these contracts as follows:

(In thousands)	Total Amount		Payments Due per Period
Contractual obligations and commitments	Committed		<1 Year		1 – 3 Years
Operating leases	$	3,659	$	1,360	$	2,299
Finance leases	945		312		633
Other contractual obligations	6,390		6,390		—
Total	$	10,994	$	8,062	$	2,932

The Company's estimated lease liability for its various operating and finance leases was reported within other liabilities on our consolidated statements of condition.

In the normal course of business, we are a party to credit related financial instruments with off-balance sheet risk, which are not reflected in the consolidated statements of condition. These financial instruments include commitments to extend credit and standby letters of credit. Many of the commitments will expire without being drawn upon, and thus, the total amount does not necessarily represent future cash requirements. Refer to Note 7 of the consolidated financial statements for additional details.

We use derivative financial instruments for risk management purposes (primarily interest rate risk) and not for trading or speculative purposes. These contracts with our various counterparties may subject the Company to various cash flow requirements, which may include posting of cash as collateral (or other assets) for arrangements that the Company is in a liability position (i.e. “underwater”). Refer to Note 8 of the consolidated financial statements for further discussion of our derivatives and hedge instruments.

66

CAPITAL RESOURCES

As part of our goal to operate a safe, sound and profitable financial organization, we are committed to maintaining a strong capital base. Shareholders’ equity totaled $464.9 million and $451.3 million at March 31, 2023 and December 31, 2022, respectively, which amounted to 8% of total assets for both periods. Refer to "—Financial Condition—Shareholders' Equity" for discussion regarding the driver for the increase in shareholders' equity for the three months ended March 31, 2023.

Our principal cash requirement is the payment of dividends on our common stock, as and when declared by the Company's Board of Directors. We declared dividends to shareholders in the aggregate amount of $6.1 million and $5.9 million for the three months ended March 31, 2023 and 2022, respectively. The Company's Board of Directors approves cash dividends on a quarterly basis after careful analysis and consideration of various factors, including the following: (i) capital position relative to total assets, (ii) risk-based assets, (iii) total classified assets, (iv) economic conditions, (v) growth rates for total assets and total liabilities, (vi) earnings performance and projections and (vii) strategic initiatives and related capital requirements. All dividends declared and distributed by the Company will be in compliance with applicable state corporate law and regulatory requirements.

We are primarily dependent upon the payment of cash dividends by the Bank, our wholly-owned subsidiary, to service our commitments. We, as the sole shareholder of the Bank, are entitled to dividends, when and as declared by the Bank's Board of Directors from legally available funds. For the three months ended March 31, 2023 and 2022, the Bank declared dividends payable to the Company in the amount of $6.3 million and $8.1 million, respectively. Under regulations prescribed by the OCC, the Bank may not declare dividends in excess of the Bank’s net income for the current year plus its retained net income for the prior two years without prior approval from the OCC. If we are required to use dividends from the Bank to service unforeseen commitments in the future, we may be required to reduce the dividends paid to our shareholders going forward.

Please refer to Note 10 of the consolidated financial statements for discussion and details of the Company and Bank's regulatory capital requirements. At March 31, 2023 and December 31, 2022, the Company and Bank exceeded all regulatory capital requirements, and the Bank continues to meet the capital requirements to be classified as "well capitalized" under applicable prompt corrective action provisions.

RISK MANAGEMENT

The Company’s Board of Directors and management have identified significant risk categories which affect the Company. The risk categories include: credit; liquidity; market; interest rate; capital; operational and technology, including cybersecurity; vendor and third party; people and compensation; compliance and legal; strategic alignment; and reputation. The Board of Directors has approved an Enterprise Risk Management ("ERM") Policy that addresses each category of risk. The direct oversight and responsibility for the Company's risk management program has been delegated to the Company's Executive Vice President, Enterprise Risk Management and Chief Risk Officer, who is a member of the Executive Committee and reports directly to the Chief Executive Officer.

During 2020 and 2021, the spread of the COVID-19 pandemic increased many of the risks that we faced, including our credit, operational, vendor and third party, and technology risks. Over the course of 2022, the Company largely experienced a return to a pre-pandemic environment, and experienced minimal business or operational disruption related to the pandemic. During 2022, the Company reevaluated its “return-to-office” strategy that was implemented late in 2021 and determined to continue to operate under such strategy, which requires certain employees to work from the Company’s offices full-time, and permits others employees to work through a hybrid model (i.e., work from home part-time and from one of the Company's physical locations part-time) or to work remotely full-time. As of March 31, 2023, a majority of the Company’s non-branch employees were working under a hybrid or remote arrangement. The Company continues to monitor, evaluate and address risks that may arise in connection with hybrid and remote work arrangements, such as potential cybersecurity risks.

There have been no material changes to the Company's risk categories and risk management policies as described in Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2022. Please refer to Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2022 for further details regarding the Company's risk management.

Interest rate risk

Interest rate risk represents the sensitivity of earnings to changes in market interest rates. As interest rates change, the interest income and expense streams associated with our financial instruments also change, thereby impacting net interest income, the primary component of our earnings. Board ALCO and Management ALCO utilize the results of a detailed and

67

dynamic simulation model to quantify the estimated exposure of net interest income to sustained interest rate changes. While Board ALCO and Management ALCO routinely monitor simulated net interest income sensitivity over a rolling two-year horizon, they also utilize additional tools to monitor potential longer-term interest rate risk.

The simulation model captures the impact of changing interest rates on the interest income received and interest expense paid on all interest-earning assets and interest-bearing liabilities reflected on our consolidated statements of condition, as well as for derivative financial instruments. This sensitivity analysis is compared to ALCO policy limits, which specify a maximum tolerance level for net interest income exposure over a one- and two-year horizon, assuming a static balance sheet, given a 200 basis point upward and downward shift in interest rates. Although our policy specifies a downward shift of 200 basis points, this would have resulted in negative rates as of March 31, 2022, as many deposit and funding rates were below 2.00%. In this case, a downward shift of 100 basis points was the only down scenario performed. A parallel and pro rata shift in rates over a 12-month period is assumed. Using this approach, we are able to produce simulation results that illustrate the effect that both a gradual change of rates and a “rate shock” have on earnings expectations. In the down 100 and 200 basis points scenarios, Federal Funds and Treasury yields are floored at 0.01% while Prime is floored at 3.00%. All other market rates are floored at the lesser of current levels or 0.25%.

The sensitivity analysis below does not represent a forecast and should not be relied upon as being indicative of expected operating results. These hypothetical estimates are based upon numerous assumptions including, among others, the nature and timing of interest rate levels, yield curve shape, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits and reinvestment/replacement of asset and liability cash flows. While assumptions are developed based upon current economic and local market conditions, we cannot make any assurances as to the predictive nature of these assumptions, including how customer preferences or competitor influences might change.

As of March 31, 2023 and 2022, our net interest income sensitivity analysis reflected the following changes to net interest income, as compared to our modeled Year 1 Base net interest income, assuming no balance sheet growth and a parallel shift in interest rates. All rate changes were “ramped” over the first 12-month period and then maintained at those levels over the remainder of the ALCO simulation horizon.

	Estimated Changes In  Net Interest Income
Rate Change from Year 1 — Base	March 31, 2023		March 31, 2022
Year 1
+200 basis points	(2.24)	%	(0.79)	%
-100 basis points	N/A		(0.24)	%
-200 basis points	1.87	%	N/A
Year 2
+200 basis points	13.52	%	6.04	%
-100 basis points	N/A		(1.91)	%
-200 basis points	10.96	%	N/A

If rates remain at or near current levels, net interest income is projected to increase in year two of the simulation. Asset cash flows reprice and replace into the current higher rate environment at rates above current portfolio averages while funding costs remain largely unchanged, causing balance sheet spread to expand.

If rates increase 200 basis points, net interest income is projected to decrease in the first year of the simulation as the funding base adjusts into the higher rate environment to a greater degree than asset yields increase. In the second year, net interest income is projected to increase as loan and investment yields continue to reprice/reset into higher yields and funding cost increases continually slow.

If rates decrease 200 basis points, net interest income is projected to increase slightly in the first year of the simulation as reductions in funding costs are able to more than offset near-term asset yield deterioration. In the second year, net interest income is projected to increase, however to a lesser degree than the up 200 basis points scenario discussed above, as asset yields are supported by fixed rates and floors while cost of funds reductions continue at a slowing pace and begin to reach assumed floors.

68

In addition to using our investments portfolio to manage liquidity risk, we also use it to manage our interest rate risk and provide a natural hedge to our interest risk exposure created by loans, deposits and borrowings. Refer to "—Financial Condition—Investments" for further details of the Company's investment portfolio, including the duration of the bond portfolio as of March 31, 2023 and December 31, 2022.

Periodically, if deemed appropriate, we use back-to-back loan swaps, interest rate swaps, floors and caps, which are common derivative financial instruments, to hedge our interest rate risk position. The Board of Directors has approved hedging policy statements governing the use of these instruments. The Board and Management ALCO monitor derivative activities relative to their expectations and our hedging policies. Refer Note 8 of the consolidated financial statements for further discussion of these derivative instruments.

LIBOR is a benchmark interest rate for certain floating rate loans, deposits and borrowings, and off-balance sheet exposures of the Company. The administrator of LIBOR has announced that the publication of the most commonly used U.S. Dollar LIBOR settings will cease to be provided or will cease to be representative after June 30, 2023. The publication of all other LIBOR settings ceased to be provided or ceased to be representative as of December 31, 2021. As such, the Company has an internal project team that is focused on an orderly transition from LIBOR to alternative reference rates. The Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”), and its implementing regulations, were finalized in December 2022. The LIBOR Act and its implementing regulations establish a process for replacing LIBOR on existing LIBOR contracts that do not provide for the use of a clearly defined or practicable replacement benchmark rate with a benchmark replacement based on SOFR. As of March 31, 2023, the Company has no LIBOR-based deposits.

69

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Information required by this Item 3 is included in Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations - Risk Management" and such information is incorporated into this Item 3 by reference.

70

ITEM 4.  CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company’s management conducted an evaluation with the participation of the Company’s Chief Executive Officer and Chief Operating Officer and Chief Financial Officer & Principal Financial and Accounting Officer, regarding the effectiveness of the Company’s disclosure controls and procedures, as of the end of the last fiscal year. In designing and evaluating the Company’s disclosure controls and procedures, the Company and its management recognize that any controls and procedures, no matter how well designed and operated, can provide only a reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating and implementing possible controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Operating Officer and Chief Financial Officer & Principal Financial and Accounting Officer concluded that they believe the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. We intend to continue to review and document our disclosure controls and procedures, including our internal controls and procedures for financial reporting, and we may from time to time make changes to the disclosure controls and procedures to enhance their effectiveness and to ensure that our systems evolve with our business.

There was no change in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

71

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

 In the normal course of business, the Company and its subsidiaries are subject to pending and threatened legal actions. Although the Company is not able to predict the outcome of such actions, after reviewing pending and threatened actions with counsel, management believes that based on the information currently available the outcome of such actions, individually or in the aggregate, will not have a material adverse effect on the Company’s consolidated financial position as a whole.

ITEM 1A.  RISK FACTORS

There are a number of factors that may adversely affect the Company’s business, financial results or stock price. Refer to “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, for discussion of these risks.

ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) None.

(b) None.

(c) None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

 None.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION

None.

72

ITEM 6.  EXHIBITS

Exhibit No.	Definition
10.1†*	Camden National Corporation Third Amended and Restated Long-Term Incentive Program, effective as of March 31, 2023.
10.2†	Camden National Corporation Third Amended and Restated Management Stock Purchase Program, effective as of February 28, 2023 (incorporated herein by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K filed with the Commission on March 10, 2023).
10.3†*	Camden National Corporation Third Amended and Restated Defined Contribution Retirement Program, effective as of April 26, 2023.
10.4†	Form of Restricted Stock Award Agreement Under the Third Amended and Restated Management Stock Purchase Program (incorporated herein by reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-K filed with the Commission on March 10, 2023).
10.5†	Form of Restricted Stock Unit Award Agreement for Company Employees Under the 2022 Equity and Incentive Plan (incorporated herein by reference to Exhibit 10.25 to the Company's Annual Report on Form 10-K filed with the Commission on March 10, 2023).
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
31.2*	Certification of Chief Financial Officer, Principal Financial & Accounting Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
32.1**	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Chief Financial Officer, Principal Financial & Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	iXBRL (Inline eXtensible Business Reporting Language). The following materials from Camden National Corporation’s Quarterly Report on Form 10-Q for the period ended March 31, 2023, formatted in iXBRL: (i) Consolidated Statements of Condition - March 31, 2023 and December 31, 2022; (ii) Consolidated Statements of Income - Three Months Ended March 31, 2023 and 2022; (iii) Consolidated Statements of Comprehensive (Loss) Income - Three Months Ended March 31, 2023 and 2022; (iv) Consolidated Statements of Changes in Shareholders’ Equity - Three Months Ended March 31, 2023 and 2022; (v) Consolidated Statements of Cash Flows - Three Months Ended March 31, 2023 and 2022; and (vi) Notes to the Unaudited Consolidated Financial Statements.
104*	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
*	Filed herewith.
**	Furnished herewith.
†	Management contract or a compensatory plan or arrangement.

73

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.

CAMDEN NATIONAL CORPORATION
(Registrant)
/s/ Gregory A. Dufour	May 9, 2023
Gregory A. Dufour	Date
President and Chief Executive Officer (Principal Executive Officer)
/s/ Michael R. Archer	May 9, 2023
Michael R. Archer	Date
Chief Financial Officer and Principal Financial & Accounting Officer

74

EX-10.1

CAMDEN NATIONAL CORPORATION
THIRD AMENDED AND RESTATEDLONG-TERM INCENTIVE PROGRAM
Effective March 31, 2023

1.Purpose. This Program is intended to create incentives for certain executive officers of Camden National Corporation (the “Company”) and to attract and retain executive officers who will contribute to the future success of the Company. It is further the intent of the Company that Awards under this Program will support the goals of (i) aligning executive incentive compensation with increases in stockholder value and (ii) using equity compensation to retain key employees. This Program shall be a component program of the Camden National Corporation 2022 Equity and Incentive Plan (the “2022 Plan”), and any shares of Stock delivered under this Program shall reduce the number of shares of Stock available for use under the 2022 Plan. Except as explicitly provided herein, this Program shall be subject to and governed by all the terms and conditions of the 2022 Plan. Capitalized terms used and not otherwise defined in this Program shall have the meaning specified in the 2022 Plan.

2.Definitions.

1.1“Disability” shall have the same meaning as set forth in the Participant’s written employment agreement (or other similar written agreement) with the Company or a Subsidiary. In the absence of such a definition, “Disability” means any mental or physical condition with respect to which the Participant qualified for and receives benefits under a long-term disability plan of the Company or Subsidiary, or in the absence of such a long-term disability plan or coverage under such plan, “Disability” shall mean a physical or mental condition which, in the sole discretion of the Committee, is reasonably expected to be of indefinite duration and to substantially prevent the Participant from fulfilling the Participant’s duties or responsibilities to the Company or a Subsidiary. If an Award is determined to be subject to Code Section 409A, then notwithstanding anything else herein to the contrary, “Disability” or “Disabled” shall mean that the Participant: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering the Company’s Employees, or (iii) is determined to be totally disabled by the Social Security Administration. Except to the extent prohibited under Code Section 409A, if applicable, the Committee shall have discretion to determine if a termination of Service due to Disability has occurred.

1.2“Fiscal Year”shall mean the fiscal year of the Company, which is the twelve (12)-month period ending December 31 of each year.

1.3“Long-Term Performance Period” shall mean a period of three (3) consecutive Fiscal Years beginning on January 1 of the first year of such Long-Term Performance Period. A Long-Term Performance Period shall terminate prior to the expiration of three (3) consecutive Fiscal Years to the extent required pursuant to Section 7.4 hereof.

1.4“Participant”shall mean an executive officer of the Company designated by the Committee pursuant to Section 4 to participate in the Program with respect to a Long-Term Performance Period.

1.5“Performance-based Award” shall mean an Award under the Program that is subject to Performance Measures.

1.6“Performance Measures” shall mean, for Long-Term Performance Periods beginning on or after January 1, 2022, the performance measures determined by the Committee and set forth in a Participant’s Award Agreement.

1.7“Program”shall mean the Camden National Corporation Long-Term Incentive Program, as amended or amended and restated from time to time. Prior to this Third Amendment and Restatement, the Program was entitled the Long-Term Performance Share Program.

1.8“Retirement”shall mean a Participant’s bona fide retirement from the Company provided that at the time of such retirement (a) such Participant is in good standing, (b) has attained age fifty-five (55) with at least ten (10) years of employment with the Company or has attained age sixty-five (65) with at least five (5) years of

4875-5751-9184 v.6

employment with the Company, and (c) the Participant has provided the Company with at least six (6) months’ prior written notice of the Participant’s intent to retire; provided that the Committee may waive such notice requirement in its sole discretion.

1.9“Target Award Opportunity”shall mean, for any Participant, a percentage of the Participant’s base salary on the grant date.

1.10“Time-vested Award”shall mean an Award under the Program that is not a Performance-based Award.

3.Administration. The Committee shall have sole discretionary power to interpret the provisions of this Program, to administer and make all decisions and exercise all rights of the Company with respect to this Program. The Committee shall have final authority to apply the provisions of the Program and determine, in its sole discretion, the Awards granted to Participants under the Program and the number of shares of Stock to be delivered in respect of an Award granted to a Participant hereunder and shall also have the exclusive discretionary authority to make all other determinations (including, without limitation, the interpretation and construction of the Program and the determination of relevant facts) regarding the entitlement to benefits hereunder and the amount of benefits to be paid pursuant to the Program. The Committee’s exercise of this discretionary authority shall at all times be in accordance with the terms of the Program and the 2022 Plan, shall be entitled to deference upon review by any court, agency or other entity empowered to review its decision, and shall be enforced, provided that it is not arbitrary, capricious or fraudulent.

4.Eligibility. For each Long-Term Performance Period, the Committee in its discretion shall select those executive officers who shall be Participants. The selection of an individual to be a Participant in any one Long-Term Performance Period does not entitle the individual to be a Participant in any other Long-Term Performance Period. The Committee may permit an executive, including a newly hired or promoted executive, to become a Participant after the Long-Term Performance Period has begun. Such Participant shall be granted Awards under the Program at the discretion of the Committee.

5.Awards Under the Program.

1.1Granting of Awards. The Committee shall grant any combination of Performance-based Awards and Time-vested Awards with an aggregate grant date fair value equal to the Participant’s Target Award Opportunity, as determined in the Committee’s discretion, for the Long-Term Performance Period. The conversion of dollar amounts into Performance-based Awards and Time-vested Awards, as applicable, will be based on the Fair Market Value of a share of Stock on the grant date.

1.2Nature of Awards. The Target Award Opportunity under this Program shall be used solely to calculate Awards that may potentially be granted to each Participant as provided herein. Awards shall not constitute or be treated as property or as a trust fund of any kind or as capital stock of the Company, stock options or other form of equity or security until shares of Stock are distributed to Participants in accordance with the terms of the Program and the Award Agreement.

6.Determination of Performance for Performance-based Awards.

1.1Performance Measures. Within the first 180 days of a Long-Term Performance Period, the Committee shall establish the performance share matrix with the Performance Measures for the Long-Term Performance Period. The established matrix shall be set forth in a Participant’s Award Agreement for Performance-based Awards.

1.2Committee Certification. No Participant shall receive any shares of Stock in respect of a Performance-based Award under this Program unless the Committee has certified, by resolution or other appropriate action in writing, that the Performance Measures with respect to the Long-Term Performance Period have been satisfied. No shares of Stock shall be distributed in respect of a Performance-based Award if the Performance Measures have not been met for the Long-Term Performance Period. If each of the Performance Measures has been met, shares of Stock shall be delivered in respect of such Performance-based Awards pursuant to the provisions of Section 6.3.

1.3Delivery of Stock to Participants at the End of a Long-Term Performance Period. At the end of each Long-Term Performance Period, if each Performance Measure equals or exceeds the related threshold, then each Participant shall receive the number of shares of Stock in respect of each vested Performance-based Award in

    -2-

4875-5751-9184 v.6

accordance with the matrix set forth in the Participant’s Award Agreement. Shares of Stock shall be distributed in respect of such vested Performance-based Awards as soon as practicable following the Committee’s certification described in Section 6.2 for such Long-Term Performance Period (but in no event later than two and one half months after the Committee’s certification). Shares of Stock will be issued from the 2022 Plan.

7.Effect of Termination of Service; Change in Control.

1.1Forfeiture. Unless otherwise determined by the Committee, a Participant who experiences a termination of Service for any reason (other than Retirement, with respect to Performance-based Awards, death or Disability), any unvested portion of an Award shall be forfeited.

1.2Retirement. Unless otherwise determined by the Committee, in the case of a Participant whose employment with the Company terminates due to such Participant’s Retirement, such Participant’s Performance-based Awards shall vest pro rata based on the portion of the relevant vesting period set forth in the applicable Award Agreement during which such Participant was an employee of the Company. Any such pro rata vesting of a Performance-based Award shall be paid following the end of such Long-Term Performance Period as described in Section 6.3. In the case of a Participant whose employment with the Company terminates due to such Participant’s Retirement, such Participant’s Time-vested Awards shall be forfeited, unless otherwise determined by the Committee.

1.3Death or Disability. Unless otherwise determined by the Committee, in the case of a Participant whose employment with the Company terminates due to such Participant’s death or Disability, such Participant’s Performance-based Awards will be deemed earned at the target level, and such Participant’s Awards shall vest at such termination of employment and be distributed in shares of Stock as soon as practicable following such termination of employment (but in no event later than two and one half months after such termination of employment).

1.4Change of Control. Notwithstanding anything to the contrary elsewhere herein, if a Change of Control shall occur, (a) each Long-Term Performance Period that has not yet ended shall end as of the date the Change of Control occurs and each Participant’s Performance-based Awards will be deemed earned at the target level and will cease to be subject to any further performance conditions but will continue to be subject to Service-based vesting following the Change in Control in accordance with the original Long-Term Performance Period and (b) if a Participant’s Service is terminated by the Company or any successor entity thereto without Cause, or the Participant resigns the Participant’s Service for Good Reason, in either case, on or within two (2) years after a Change of Control, any unvested portion of the Participant’s Performance-based Awards and Time-vested Awards will become fully vested (including the lapsing of all restrictions and conditions) and any shares of Stock deliverable pursuant to such Awards will be delivered promptly (but no later than fifteen (15) days) following the Participant’s termination of Service.

8.Additional Provisions.

1.1Withholding of Tax. Anything to the contrary notwithstanding, all payments in respect of Awards hereunder shall be subject to the withholding of such amounts as the Company reasonably may determine that it is required to withhold pursuant to applicable federal, state or local law or regulation. Withholding will be made in the form of Shares unless expressly indicated otherwise by the Participant in accordance with the terms of the 2022 Plan.

1.2Amendment or Termination of Program. The Company may amend or terminate this Program at any time or from time to time; provided, however, that such amendment or termination shall comply with Section 15 of the 2022 Plan.

1.3Non-Exclusivity. The Program does not limit the authority of the Company, the Committee, or any subsidiary of the Company, to grant Awards or authorize any other compensation under any other plan, program or authority, including, without limitation, awards or other compensation based on the same Performance Measures used under the Program.

    -3-

4875-5751-9184 v.6

EX-10.3

CAMDEN NATIONAL CORPORATIONTHIRD AMENDED AND RESTATED
DEFINED CONTRIBUTION RETIREMENT PROGRAM
Effective April 26, 2023

This Camden National Corporation Third Amended and Restated Defined Contribution Retirement Program (the “Program”), effective as of April 26, 2023 is an amendment and restatement of the Camden National Corporation Second Amended and Restated Defined Contribution Retirement Plan, effective as of January 30, 2018. The Program is maintained for the benefit of a select group of management employees of the Company and its participating Subsidiaries, in order to provide such employees with certain deferred compensation benefits. The Program is an unfunded deferred compensation plan that is intended to qualify for the exemptions provided in Sections 201, 301, and 401 of ERISA and is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended. This Program is a component program of the Camden National Corporation 2022 Equity and Incentive Plan (the “2022 Plan”). Except as specifically provided herein, this Program shall be subject to and governed by all the terms and conditions of the 2022 Plan, including the powers of the Committee set forth in Section 2(b) of the 2022 Plan. Capitalized terms in this Program shall have the meaning specified in the 2022 Plan, unless a different meaning is specified herein.

SECTION 1: DEFINITIONS

These words and phrases shall have these meanings unless a different meaning is plainly required by the context:

1.1“Administrator” shall mean the Chief Human Resources Officer of the Company.

1.2“Beneficiary” shall mean the person or persons entitled to receive the balance credited to a Participant’s Account under the Program upon the death of the Participant, as provided in Section 5.2.

1.3“Bonus” shall mean the performance-based compensation paid to participants under the Executive Annual Incentive Program in the Program Year in which the Grant Date occurs or as otherwise determined by the Administrator.

1.4“Disability” shall have the same meaning as set forth in the Participant’s written employment agreement (or other similar written agreement) with the Company or a Subsidiary. In the absence of such a definition, “Disability” shall mean any mental or physical condition with respect to which the Participant qualified for and receives benefits under a long-term disability plan of the Company or Subsidiary, or in the absence of such a long-term disability plan or coverage under such plan, “Disability” shall mean a physical or mental condition which, in the sole discretion of the Committee, is reasonably expected to be of indefinite duration and to substantially prevent the Participant from fulfilling the Participant’s duties or responsibilities to the Company or a Subsidiary. If an amount credited to an Account is determined to be subject to Code Section 409A, then notwithstanding anything else herein to the contrary, “Disability” or “Disabled” shall mean that a Participant: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering the Company’s employees, or (iii) is determined to be totally disabled by the Social Security Administration. Except to the extent prohibited under Code Section 409A, if applicable, the Committee shall have discretion to determine if a termination of employment due to Disability has occurred.

1.5“Eligible Earnings” shall mean regular earnings paid to the Participant during the Program Year preceding the Grant Date, excluding incentive compensation and other benefits, as determined by the Administrator.

1.6“Employer” shall mean the Company and each participating Subsidiary. At such times and under such conditions as the Board may direct, one or more other Subsidiary may become a participating Subsidiary or a participating Subsidiary may be withdrawn from the Program.

4863-9723-2644 v.10

1.7“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended. Reference to a specific section of ERISA shall include such section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section.

1.8“Participant” shall mean an Employee who has become a Participant in the Program pursuant to Section 2.1 and has not ceased to be a Participant pursuant to Section 2.2.

1.9“Participant’s Account” or “Account” shall mean, for any Participant, the separate account maintained on the books of the Company in order to reflect the Participant’s interest under the Program.

1.10“ProgramYear” shall mean the calendar year.

1.11“Termination of Employment” shall mean a reduction in the services provided by the Participant to the Employer to a level that is 20% or less than the level of services so provided for the 36 months immediately preceding such reduction.

1.12“Vested Amount” shall mean the portion of an Account equal to the Restricted Stock Units credited to such Account multiplied by the applicable vested percentage specified in the Participant’s vesting schedule.

SECTION 2: PARTICIPATION

1.1Participation. Participation in the Program by an Employee must be approved by the Committee and will begin as of January 1 of the Program Year following approval by the Committee.

1.2Termination of Participation. An Employee who has become a Participant shall remain a Participant until the Participant’s entire Vested Amount is distributed or forfeited, as applicable.

SECTION 3: PARTICIPANT’S ACCOUNT

1.1At the direction of the Committee, there shall be established and maintained an Account on the books of the Company for each Participant.

1.2Annually, on March 15 (or the next business day following March 15), beginning during the first year of the Participant’s participation in the Program, the Committee will credit each Participant’s Account with an amount equal to ten percent (10%) of the sum of the Participant’s Eligible Earnings and Bonus. This date will be referenced as the Grant Date. A pro rata credit will be made with respect to a Participant’s first year of employment based on Eligible Earnings for the time that the employee is a Participant.

1.3Annual credits to a Participant’s Account, based on the amount in Section 3.2, shall be denominated in Restricted Stock Units (rounded down to the nearest whole share) based on the Fair Market Value of a share of Stock on the Grant Date.

1.4Each Participant shall be furnished with periodic statements of the Participant’s Account, at least annually, reflecting the status of the Participant’s interest in the Program.

SECTION 4: VESTING AND FORFEITURE

1.1Each Participant’s vesting schedule shall be determined by the Committee in its sole discretion. Each Participant will be furnished with a copy of such Participant’s vesting schedule, with each year’s vested percentage, following approval for participation by the Committee. Notwithstanding the foregoing, for any employee who was an active Participant as of January 30, 2018, vesting shall occur annually on the Grant Date (rounded to the nearest percent) over the period from the first day of participation until the Participant reaches age 65, at which time the Participant shall be one hundred percent (100%) vested, unless otherwise provided by the Committee in its sole discretion.

1.2Anything to the contrary in this Program notwithstanding, the balance in the Account will be immediately forfeited, and all rights of the Participant and the Participant’s beneficiaries hereunder shall become null and void, if the Participant’s employment with the Company is terminated for Cause.

-2-

4863-9723-2644 v.10

SECTION 5: DISTRIBUTIONS

1.1No distributions shall be made from the Account of a Participant until the Participant Terminates Employment with the Company, except as provided in Section 10 below. The Vested Amount will be reduced by the amount required to be withheld for income taxes, and the net Vested Amount will be distributed in shares of Stock. Amounts credited to Participants’ accounts prior to 2014 shall be distributed in one lump sum distribution within ninety (90) days of the Termination of Employment, except as provided in Section 5.5 below. For amounts credited to Participants’ accounts in 2014 and thereafter, a Participant may elect to have the amounts distributed in one lump sum distribution or in annual installments over 5, 10 or 15 years. Such election shall be irrevocably made no later than December 31, 2013, except that, with respect to the first year in which an individual becomes a Participant in this Program, that Participant shall make the Participant’s election, with respect to future compensation only, within thirty (30) days of becoming a Participant.

a.For a Participant who elects to receive distributions in annual installments as described in this Section 5.1, such installment payments shall commence following the Participant’s Termination of Employment, or such time as permitted under Section 5.4, on the earlier of January 15th or July 15th.

b.In the event the total amount remaining due under the installment payments described in this Section 5.1 becomes less than $50,000 for the year in which the next installment payment is due, the Company may, in its sole discretion, pay to the Participant the entire amount remaining due in a lump sum on or before the due date of the next installment payment. Notwithstanding the foregoing, for any employee who was an active Participant prior to April 26, 2022, in the event the total amount remaining due under the installment payments described in this Section 5.1 becomes less than the IRS limit under Section 402(g) of the Code for the year in which the next installment payment is due, the Company may, in its sole discretion, pay to the Participant the entire amount remaining due in a lump sum on or before the due date of the next installment payment.

1.2If the Participant terminates employment due to death or Disability, the Account will be one hundred percent (100%) vested regardless of the actual years of participation in the Program. The Participant may designate in writing a Beneficiary to receive any distribution which may become payable as the result of the Participant’s death. If no Beneficiary designation is in effect upon the Participant’s death, the Beneficiary shall be the Participant’s estate.

1.3Effect of a Change of Control. If there is a Change of Control, notwithstanding any other provision of this Program, the following shall occur:

a.If the Participant incurs a Termination of Employment either (i) by the Company without Cause, or (ii) by the Participant with Good Reason, in each case within two (2) years following a Change of Control, the Participant shall be one hundred percent (100%) vested in the Participant’s Account. Notwithstanding the foregoing, for amounts credited to a Participant’s Account prior to April 26, 2022, if such Participant incurs a Termination of Employment within three (3) months prior to such Change of Control, provided a definitive agreement with respect to such Change of Control has been entered into by the parties thereto as of the date of such Termination of Employment, such amounts shall vest effective as of such Termination of Employment.

b.The Change of Control itself shall not constitute a distributable event, except with respect to a special Program termination under Section 10.4.

1.4Distribution to Specified Employees. If a Participant under the Program qualifies as a “Specified Employee” as defined in Code Section 409A, and the stock of the Company or any affiliate is publicly traded, no distribution may be made hereunder until six (6) months after the Participant’s separation from service as defined under Code Section 409A (or, if earlier, the date of death of the Participant).

1.5Notwithstanding any other provision in this Program to the contrary, no distributions may be made under this Program prior to the occurrence of a distribution event as defined in Code Section 409A(a)(2), except and to the extent that the Program may currently allow or hereafter be amended to allow an acceleration of payment under one of the applicable exceptions contained in Treasury Regulation Section 1.409A-3(j) (4).

-3-

4863-9723-2644 v.10

SECTION 6: BENEFIT CLAIM AND APPEAL PROCEDURES

1.1Claim for Benefits. The following Claim and Appeal Procedures are intended to satisfy the minimum standards of Section 503 of ERISA pursuant to which individuals or estates may claim Program benefits and appeal denials of such claims. Any claim for benefits or other rights under the Program shall be made in writing to the Administrator. If such claim is wholly or partially denied by the Administrator, the Administrator shall, within a reasonable period of time, but not later than sixty (60) days after receipt of the claim, notify the claimant of the denial of the claim. Such notice of denial shall be in writing and shall contain:

a.The specific reason or reasons for the denial of the claim;

b.A reference to the relevant Program provisions upon which the denial is based;

c.A description of any additional material or information necessary for the claimant to perfect the claim, together with an explanation of why such material or information is necessary; and

d.An explanation of the Program’s claim review procedure.

1.2Requests for Review of a Denial of a Claim. Upon the receipt by the claimant of written notice of the denial of a claim, the claimant may within ninety (90) days file a written request to the Administrator requesting a review of the denial of the claim. Such review shall include a hearing if deemed necessary by the Administrator. In connection with the claimant’s appeal of the denial of the claimant’s claim, the claimant may review relevant documents and may submit issues and comments in writing. To provide for fair review and a full record, the claimant must submit in writing all facts, reasons and arguments in support of the claimant’s position within the time allowed for filing a written request for review. All issues and matters not raised for review will be deemed waived by the claimant.

1.3Decision upon Review of a Denial of a Claim. The Administrator shall render a decision on the claim review promptly, but no more than sixty (60) days after the receipt of the claimant’s request for review, unless special circumstances (such as the need to hold a hearing) require an extension of time, in which case the sixty (60) day period shall be extended to one hundred-twenty (120) days. Such decision shall:

a.Include specific reasons for the decision;

b.Be written in a manner calculated to be understood by the claimant; and

c.Contain specific references to the relevant Program provisions upon which the decision is based.

The decision of the Administrator shall be final and binding in all respects on the Company, the claimant and any other person claiming an interest in the Program through or on behalf of the claimant.

1.4Mediation and Litigation of Disputes.

a.Mediation. If a claimant is not satisfied with the denial of the claimant’s claim under the review procedures of Section 6.3, the claimant and the Company may try to settle the claim in good faith through mediation administered by the American Arbitration Association under its Commercial Mediation Procedures. The parties shall share equally the mediator’s costs and fees, and bear separately their own respective costs of mediation. All mediation shall be conducted at a mutually agreeable convenient location within the State of Maine. Mediation records shall not be admissible in any subsequent litigation and the positions of the parties taken in mediation shall not be binding or taken as any concession, representation or waiver, outside of the mediation process.

b.Litigation. No litigation may be commenced by or on behalf of a claimant with respect to this Program until after the claim review and mediation process described in this Section 6 has been exhausted. Judicial review of Administrator action shall be limited to whether the Administrator acted in an arbitrary and capricious manner.

-4-

4863-9723-2644 v.10

SECTION 7: FUNDING

1.1Unfunded Program. All amounts credited to a Participant’s Account under the Program shall continue for all purposes to be a part of the general assets of the Company. The interest of the Participant in the Participant’s Account, including the Participant’s right to distribution thereof, shall be an unsecured claim against the general assets of the Company. Although the Company may choose to invest a portion of its general assets for purposes of enabling it to make distributions under the Program, nothing contained in the Program shall give any Participant or Beneficiary any interest in or claim against any specific assets of the Company.

SECTION 8: MODIFICATION OR TERMINATION OF PROGRAM

1.1Right to Amend or Terminate. The Program may be amended in whole or in part by a written instrument adopted by the Board or the Committee (or any other designee of the Board) at any time. Notice of any material amendment shall be given in writing to each Participant. No amendment shall retroactively decrease either the balance of a Participant’s Account or a Participant’s interest in the Participant’s Account as existing immediately prior to the later of the effective date or adoption date of such amendment. No amendment shall change the time or form of any payment due hereunder unless such change conforms to the requirements of Code Section 409A.

1.2Company’s Right to Terminate. The Company reserves the sole right to terminate the Program, in whole or in part, by action of its Board at any time. In the event of any such termination, each affected Participant shall maintain the Participant’s vesting percentage in the Participant’s Program Accounts determined as of the Program termination date, and shall be entitled to receive a distribution upon the occurrence of the first Code Section 409A distributable event thereafter. Consequently, the Account of each affected Participant shall be distributed in the manner provided in Section 5 to the extent such Program termination may be treated as a distributable event under Code Section 409A. Notwithstanding the foregoing, any distributions upon a Program termination hereunder shall be made in such time and manner, and subject to such other conditions (if any are applicable), as will comply with the termination rules under Treasury Regulation 1.409A-3(j)(4)(ix).

1.3Special Termination. Notwithstanding any other provisions of the Program to the contrary, the Program shall terminate if:

a.It is determined to the satisfaction of the Committee that the Program no longer qualifies as a “top hat” plan (that is, an unfunded deferred compensation plan designed solely to benefit a select group of management or highly compensated employees) so as to minimize ERISA regulation; or

b.A Change of Control occurs and any resulting successor to the Company does not assume the Program.

In such event, the Program shall terminate as of the date of such Committee determination or Change of Control, in which case the Account of each Participant that has not incurred a Termination of Employment prior to such Change of Control shall be one hundred percent (100%) vested immediately prior to such termination of the Program.

If the Program termination is due to a Change of Control that qualifies as a distributable event under Code Section 409A, then all Participants’ Accounts shall be distributed upon such Change of Control in accordance with Section 5 above as if the Participant had incurred a Termination of Employment on the date of such Change of Control.

For any other special Program termination under this Section 8.3, no further credits shall be made under the Program after the date of such Program termination, and distribution of each Participant’s Account shall be made as of the earliest possible distributable event applicable thereafter under Section 5, except with respect to any Participant whose Account is assumed by or transferred to another top hat plan established or maintained by the Company or any successor or affiliate of the Company.

Notwithstanding the foregoing, any distributions upon a Program termination hereunder shall be made only at such time and in such manner, and subject to such other conditions (if any are applicable), as will comply with Code Section 409A and regulations thereunder.

-5-

4863-9723-2644 v.10

SECTION 9: CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICIATION

1.1As a condition of this Agreement, the Participant hereby covenants and agrees that the Participant will abide by the terms of the separately executed Confidentiality, Non-Competition and Non-Solicitation Agreement (the “Non-Competition Agreement”). If the Participant breaches the Non-Competition Agreement in any way, any and all benefits and amounts due to the Participant under the terms of this Agreement shall be void and forfeited. Any benefits previously distributed to the Participant under this Agreement (“Prior Payments”) shall be subject to automatic recoupment, and the Participant shall immediately return Prior Payments to the Company.

SECTION 10: GENERAL PROVISIONS

1.1Inalienability. In no event may either a Participant, a former Participant or the Participant’s Beneficiary, spouse or estate sell, transfer, anticipate, assign, hypothecate, or otherwise dispose of any right or interest under the Program; and such rights and interests shall not at any time be subject to the claims of creditors nor be liable to attachment, execution or other legal process. Accordingly, for example, a Participant’s interest in the Program is not transferable pursuant to a domestic relations order.

1.2Rights and Duties. Neither the Employer nor the Committee shall be subject to any liability or duty under the Program except as expressly provided in the Program, or for any action taken, omitted or suffered in good faith.

1.3No Enlargement of Employment Rights. Neither the establishment or maintenance of the Program, nor any action of the Employer or the Committee, shall be held or construed to confer upon any individual any right to be continued as an Employee nor, upon dismissal, any right or interest in any specific assets of the Employer other than as provided in the Program. The Employer expressly reserves the right to discharge any Employee at any time.

1.4Apportionment of Costs and Duties. All acts required of the Employer under the Program may be performed by the Company for itself and its Subsidiaries, and the costs of the Program may be equitably apportioned by the Committee among the Company and the other participating Subsidiaries. Whenever the Employer is permitted or required under the terms of the Program to do or perform any act, matter or thing, it shall be done and performed by any officer or employee of the Employer who is thereunto duly authorized by the Board.

1.5Applicable Law. The provisions of the Program with the laws of the State of Maine, to the extent not preempted by federal law.

1.6Severability. If any provision of the Program is held invalid or unenforceable, its invalidity or unenforceability shall not affect any other provisions of the Program, and in lieu of each provision which is held invalid or unenforceable, there shall be added as part of the Program a provision that shall be as similar in terms to such invalid or unenforceable provision as may be possible and be valid, legal, and enforceable.

1.7Captions. The captions contained in, and the table of contents prefixed to, the Program are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge or describe the scope or intent of the Program, nor in any way shall affect the construction of any provision of the Program.

1.8Compliance with Code Section 409A. This Program constitutes a so-called non-qualified deferred compensation plan as defined in Code Section 409A and will be interpreted, administered and construed to comply with Code Section 409A, as provided in the 2022 Plan.

SECTION 11: EXECUTION

IN WITNESS WHEREOF, this Program, having been first duly adopted by the Board, is hereby executed below by a duly authorized officer of the Company on this date, to take effect as of April 26, 2023.

CAMDEN NATIONAL CORPORATION

-6-

4863-9723-2644 v.10

Dated: April 26, 2023 By:

SEEN AND AGREED TO:

____________________________________________________
Gregory A. Dufour

Date:

-7-

4863-9723-2644 v.10

EX-31.1

Exhibit #31.1

CERTIFICATION

I, Gregory A. Dufour, certify that:

I have reviewed this quarterly report on Form 10-Q of Camden National Corporation;

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;

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;

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

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

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

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

Date: May 9, 2023

/s/ Gregory A. Dufour

Gregory A. Dufour

President and Chief Executive Officer

EX-31.2

Exhibit #31.2

CERTIFICATION

I, Michael R. Archer, certify that: 

I have reviewed this quarterly report on Form 10-Q of Camden National Corporation;

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;

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;

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

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

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

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

Date: May 9, 2023

/s/ Michael R. Archer

Michael R. Archer

Chief Financial Officer and Principal Financial & Accounting Officer

EX-32.1

Exhibit #32.1

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

The undersigned officer of Camden National Corporation (the “Company”) hereby certifies that the Company's quarterly report on Form 10-Q for the period ended March 31, 2023 to which this certification is being furnished as an exhibit (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.  This certification is provided pursuant to 18 U.S.C. Section 1350 and Item 601(b)(32) of Regulation S-K (“Item 601(b)(32)”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), and the Exchange Act. In accordance with clause (ii) of Item 601(b)(32), this certification (a) shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to liability of this section, and (b) shall not be deemed to be incorporated by reference into any filing under the Securities Act of the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

/s/ Gregory A. Dufour	May 9, 2023
Gregory A. Dufour	Date
President and Chief Executive Officer

EX-32.2

Exhibit #32.2

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

The undersigned officer of Camden National Corporation (the “Company”) hereby certifies that the Company's quarterly report on Form 10-Q for the period ended March 31, 2023 to which this certification is being furnished as an exhibit (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.  This certification is provided pursuant to 18 U.S.C. Section 1350 and Item 601(b)(32) of Regulation S-K (“Item 601(b)(32)”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), and the Exchange Act. In accordance with clause (ii) of Item 601(b)(32), this certification (a) shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to liability of this section, and (b) shall not be deemed to be incorporated by reference into any filing under the Securities Act of the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

/s/ Michael R. Archer	May 9, 2023
Michael R. Archer	Date
Chief Financial Officer and Principal Financial & Accounting Officer

XML

Cover - shares	3 Months Ended
	Mar. 31, 2023	Apr. 28, 2023
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	0-28190
Entity Registrant Name	CAMDEN NATIONAL CORP
Entity Central Index Key	0000750686
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Incorporation, State or Country Code	ME
Entity Tax Identification Number	01-0413282
Entity Address, Address Line One	2 ELM STREET
Entity Address, City or Town	CAMDEN
Entity Address, State or Province	ME
Entity Address, Postal Zip Code	04843
City Area Code	207
Local Phone Number	236-8821
Title of 12(b) Security	Common Stock, without par value
Trading Symbol	CAC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		14,592,804

XML

CONSOLIDATED STATEMENTS OF CONDITION (CURRENT PERIOD UNAUDITED) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
ASSETS
Cash and due from banks	$ 53,867	$ 50,566
Interest-bearing deposits in other banks (including restricted cash)	21,874	24,861
Total cash, cash equivalents and restricted cash	75,741	75,427
Investments:
Trading securities	3,971	3,990
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	686,423	695,875
Held-to-maturity securities, at amortized cost (fair value of $510,999 and $506,193, respectively)	540,074	546,583
Other investments	19,414	12,713
Total investments	1,249,882	1,259,161
Loans held for sale, at fair value (book value of $4,539 and $5,259, respectively)	4,562	5,197
Loans	4,073,108	4,010,353
Less: allowance for credit losses on loans	(37,134)	(36,922)
Net loans	4,035,974	3,973,431
Goodwill	94,697	94,697
Core deposit intangible assets	1,415	1,563
Bank-owned life insurance	99,734	99,142
Premises and equipment, net	35,688	36,022
Deferred tax assets	47,281	50,217
Other assets	71,631	76,993
Total assets	5,716,605	5,671,850
Deposits:
Non-interest checking	1,047,491	1,141,753
Interest checking	1,609,330	1,763,850
Savings and money market	1,409,861	1,439,622
Certificates of deposit	360,103	300,451
Brokered deposits	215,949	181,253
Total deposits	4,642,734	4,826,929
Short-term borrowings	486,318	265,176
Junior subordinated debentures	44,331	44,331
Accrued interest and other liabilities	78,348	84,136
Total liabilities	5,251,731	5,220,572
Commitments and Contingencies (Note 7)
Shareholders’ Equity
Common stock, no par value: authorized 40,000,000 shares, issued and outstanding 14,587,906 and 14,567,325 on March 31, 2023 and December 31, 2022, respectively	115,590	115,069
Retained earnings	468,755	462,164
Accumulated other comprehensive loss	(119,471)	(125,955)
Total shareholders’ equity	464,874	451,278
Total liabilities and shareholders’ equity	$ 5,716,605	$ 5,671,850

XML

CONSOLIDATED STATEMENTS OF CONDITION (CURRENT PERIOD UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Available-for-sale securities, book value	$ 777,621	$ 796,960
Held-to-maturity securities, fair value	510,999	506,193
Loans held for sale	$ 4,539	$ 5,259
Common stock, no par value (dollars per share)	$ 0	$ 0
Common stock, authorized (in shares)	40,000,000	40,000,000
Common stock, issued (in shares)	14,587,906	14,567,325
Common stock, outstanding (in shares)	14,587,906	14,567,325

XML

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Interest Income
Interest and fees on loans	$ 45,332	$ 32,035
Taxable interest on investments	5,963	5,789
Nontaxable interest on investments	763	764
Dividend income	219	106
Other interest income	448	164
Total interest income	52,725	38,858
Interest Expense
Interest on deposits	15,832	1,833
Interest on borrowings	2,085	131
Interest on junior subordinated debentures	528	529
Total interest expense	18,445	2,493
Net interest income	34,280	36,365
Provision (credit) for credit losses	2,002	(1,075)
Net interest income after provision (credit) for credit losses	32,278	37,440
Non-Interest Income
Brokerage and insurance commissions	1,093	994
Mortgage banking income, net	716	1,034
Bank-owned life insurance	592	576
Other income	1,165	833
Total non-interest income	9,866	9,825
Non-Interest Expense
Salaries and employee benefits	14,573	15,506
Furniture, equipment and data processing	3,211	3,132
Net occupancy costs	2,079	2,144
Debit card expense	1,201	1,066
Consulting and professional fees	1,055	1,007
Regulatory assessments	845	655
Amortization of core deposit intangible assets	148	156
Other expenses	3,053	2,543
Total non-interest expense	26,165	26,209
Income before income tax expense	15,979	21,056
Income Tax Expense	3,252	4,261
Net Income	$ 12,727	$ 16,795
Per Share Data
Basic earnings per share	$ 0.87	$ 1.14
Diluted earnings per share	0.87	1.13
Cash dividends declared per share	$ 0.42	$ 0.40
Weighted average number of common shares outstanding	14,573,122	14,741,271
Diluted weighted average number of common shares outstanding	14,631,542	14,822,332
Debit card income
Non-Interest Income
Revenue	$ 2,938	$ 2,924
Service charges on deposit accounts
Non-Interest Income
Revenue	1,762	1,833
Income from fiduciary services
Non-Interest Income
Revenue	$ 1,600	$ 1,631

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Net Income	$ 12,727	$ 16,795
Other comprehensive income (loss):
Net change in unrealized gains on available-for-sale securities, net of tax	9,094	(72,811)
Net decrease in fair value, tax (expense) benefit	(2,605)	2,945
Net gain on postretirement plans, net of tax	(5)	182
Other comprehensive income (loss)	6,484	(69,684)
Comprehensive Income (Loss)	$ 19,211	$ (52,889)

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Total	Common Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning Balance (in shares) at Dec. 31, 2021		14,739,956
Beginning Balance at Dec. 31, 2021	$ 541,294	$ 123,111	$ 424,412	$ (6,229)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	16,795		16,795
Other comprehensive loss, net of tax	(69,684)			(69,684)
Shares Issued, Value, Share-Based Payment Arrangement, after Forfeiture	624	$ 624
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings and tax benefit (shares)		19,540
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings	(114)	$ (114)
Common stock repurchased (in shares)		(13,086)
Common stock repurchased	(609)	$ (609)
Cash dividends declared	(5,860)		(5,860)
Ending Balance (in shares) at Mar. 31, 2022		14,746,410
Ending Balance at Mar. 31, 2022	482,446	$ 123,012	435,347	(75,913)
Beginning Balance (in shares) at Dec. 31, 2022		14,567,325
Beginning Balance at Dec. 31, 2022	451,278	$ 115,069	462,164	(125,955)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	12,727		12,727
Other comprehensive loss, net of tax	6,484			6,484
Shares Issued, Value, Share-Based Payment Arrangement, after Forfeiture	459	$ 459
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings and tax benefit (shares)		20,581
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings	62	$ 62
Cash dividends declared	(6,136)		(6,136)
Ending Balance (in shares) at Mar. 31, 2023		14,587,906
Ending Balance at Mar. 31, 2023	$ 464,874	$ 115,590	$ 468,755	$ (119,471)

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Stockholders' Equity [Abstract]
Cash dividends declared, per share (in dollars per share)	$ 0.42	$ 0.40

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating Activities
Net Income	$ 12,727	$ 16,795
Adjustments to reconcile net income to net cash provided by operating activities:
Originations of mortgage loans held for sale	(34,397)	(47,671)
Proceeds from the sale of mortgage loans	35,501	47,771
Gain on sale of mortgage loans, net of origination costs	(384)	(1,132)
Provision (credit) for credit losses	2,002	(1,075)
Depreciation and amortization expense	815	899
Investment securities amortization and accretion, net	605	1,217
Stock-based compensation expense	459	624
Amortization of core deposit intangible assets	148	156
Purchase accounting accretion, net	(34)	(80)
Net (increase) decrease in derivative collateral posted	(1,370)	24,070
(Increase) decrease in other assets	(189)	998
(Decrease) increase in other liabilities	(1,367)	178
Net cash provided by operating activities	14,516	42,750
Investing Activities
Proceeds from available-for-sale debt securities	18,888	69,572
Proceeds from sales, calls and maturities of available-for-sale debt securities	0	77,865
Proceeds from maturities of held-to-maturity securities	6,216	0
Net increase in loans	(63,055)	(102,976)
Purchase of Federal Home Loan Bank stock	(13,591)	(1,799)
Proceeds from sale of Federal Home Loan Bank stock	6,890	1,892
Purchase of premises and equipment	495	393
Recoveries of previously charged-off loans	107	62
Proceeds from the sale of other real estate owned	0	287
Net cash used in investing activities	(45,040)	(111,220)
Financing Activities
Net decrease in deposits	(184,195)	(32,225)
Net proceeds from borrowings less than 90 days	221,142	26,060
Common stock repurchases	0	(542)
Exercise of stock options and issuance of restricted stock, net of repurchase for tax withholdings	62	(114)
Cash dividends paid on common stock	6,135	5,911
Finance lease payments	(36)	(40)
Net cash provided (used in) by financing activities	30,838	(12,772)
Net increase (decrease) in cash, cash equivalents and restricted cash	314	(81,242)
Cash, cash equivalents, and restricted cash at beginning of period	75,427	220,625
Cash, cash equivalents and restricted cash at end of period	75,741	139,383
Supplemental information
Interest paid	17,840	2,470
Income taxes paid	146	150
Dividends Payable	6,135	5,908
Unsettled common stock repurchase	$ 0	$ 67

XML

BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

The accompanying unaudited consolidated interim financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include all disclosures required by accounting principles generally accepted in the United States of America for complete presentation of financial statements. In the opinion of management, the consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the consolidated statements of condition of Camden National Corporation (the "Company") as of March 31, 2023 and December 31, 2022, the consolidated statements of income for the three months ended March 31, 2023 and 2022, the consolidated statements of comprehensive (loss) income for the three months ended March 31, 2023 and 2022, the consolidated statements of changes in shareholders' equity for the three months ended March 31, 2023 and 2022, and the consolidated statements of cash flows for the three months ended March 31, 2023 and 2022. The consolidated financial statements include the accounts of the Company and Camden National Bank (the "Bank"), a wholly-owned subsidiary of the Company (which includes the consolidated accounts of Healthcare Professional Funding Corporation ("HPFC") and Property A, Inc.). All intercompany accounts and transactions have been eliminated in consolidation. Assets held by the Bank in a fiduciary capacity, through Camden National Wealth Management, a division of the Bank, are not assets of the Company and, therefore, are not included in the consolidated statements of condition. The Company also owns 100% of the common stock of Camden Capital Trust A and Union Bankshares Capital Trust I. These entities are unconsolidated subsidiaries of the Company. Certain reclassifications may have been made to prior period amounts to conform to the current period presentation. Any such reclassifications did not impact net income or shareholders' equity as previously reported. Net income reported for the three months ended March 31, 2023, is not necessarily indicative of the results that may be expected for the full year. The information in this report should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

The acronyms, abbreviations and definitions identified below are used throughout this Form 10-Q, including Part I. "Financial Information" and Part II. "Management's Discussion and Analysis of Financial Condition and Results of Operations." The following is provided to aid the reader and provide a reference page when reviewing these sections of the Form 10-Q.

Acronym	Description	Acronym	Description
AFS:	Available-for-sale	FRBB:	Federal Reserve Bank of Boston
ALCO:	Asset/Liability Committee	GAAP:	Generally accepted accounting principles in the United States
ACL:	Allowance for credit losses	GDP:	Gross domestic product
AOCI:	Accumulated other comprehensive income (loss)	HPFC:	Healthcare Professional Funding Corporation, a wholly-owned subsidiary of Camden National Bank
ASC:	Accounting Standards Codification	HTM:	Held-to-maturity
ASU:	Accounting Standards Update	IRS:	Internal Revenue Service
Bank:	Camden National Bank, a wholly-owned subsidiary of Camden National Corporation	LGD:	Loss given default
BOLI:	Bank-owned life insurance	LIBOR:	London Interbank Offered Rate
Board ALCO:	Board of Directors' Asset/Liability Committee	LTIP:	Long-Term Performance Share Plan
CARES Act:	Coronavirus Aid, Relief, and Economic Security Act, signed into law in March 2020 in response to COVID-19	Management ALCO:	Management Asset/Liability Committee
CCTA:	Camden Capital Trust A, an unconsolidated entity formed by Camden National Corporation	MBS:	Mortgage-backed security
CDs:	Certificate of deposits	MSPP:	Management Stock Purchase Plan
CECL:	Current Expected Credit Losses	N/A:	Not applicable
Company:	Camden National Corporation	N.M.:	Not meaningful
CMO:	Collateralized mortgage obligation	OCC:	Office of the Comptroller of the Currency
CUSIP:	Committee on Uniform Securities Identification Procedures	OCI:	Other comprehensive income (loss)
DCRP:	Defined Contribution Retirement Plan	OREO:	Other real estate owned
EPS:	Earnings per share	PD:	Probability of default
FASB:	Financial Accounting Standards Board	SBA:	U.S. Small Business Administration
FDIC:	Federal Deposit Insurance Corporation	SBA PPP:	U.S. Small Business Administration Paycheck Protection Program
FHLB:	Federal Home Loan Bank	SERP:	Supplemental executive retirement plans
FHLBB:	Federal Home Loan Bank of Boston	SOFR:	Secured Overnight Financing Rate
FHLMC:	Federal Home Loan Mortgage Corporation	TDR:	Troubled-debt restructured loan
FNMA:	Federal National Mortgage Association	UBCT:	Union Bankshares Capital Trust I, an unconsolidated entity formed by Union Bankshares Company that was subsequently acquired by Camden National Corporation
FOMC:	Federal Open Market Committee	U.S.:	United States of America
FRB:	Federal Reserve System Board of Governors

XML

RECENT ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Mar. 31, 2023

Accounting Standards Update and Change in Accounting Principle [Abstract]

RECENT ACCOUNTING PRONOUNCEMENTS

RECENT ACCOUNTING PRONOUNCEMENTS

The Company adopted and updated its accounting policies for the following accounting standards that have been applied to the Company's interim consolidated financial statements for the three months ended March 31, 2023:

ASU No. 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method ("ASU 2022-01"). The FASB issued ASU 2022-01 to amend ASU 2017-12, which was adopted by the Company in 2018. This amendment renames the "last-of-layer" method to the "portfolio layer" method, permits non-repayable financial assets to be included in a closed portfolio hedged using the portfolio layer method, and provides additional guidance for entities that apply the portfolio layer method of hedge accounting in accordance with Topic 815. The Company adopted ASU 2022-01, as amended, effective January 1, 2023 and leveraged the "portfolio layer" method to enter into interest rate swaps to hedge fixed-rate residential mortgages during the three months ended March 31, 2023. There was no impact to the Company's consolidated financial statements upon adoption. Refer to Note 8 of the consolidated financial statements for further details.

ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02"). The FASB issued ASU 2022-02 to provide new guidance on TDRs and charge-offs for entities that have adopted ASU 2016-13. The Company adopted ASU 2022-02 effective January 1, 2023 on a prospective basis, and upon adoption there was no impact to the consolidated financial statements. The adoption of ASU 2022-02 eliminates the accounting and disclosure requirements for TDRs, including the requirement to measure the allowance using a discounted cash flow ("DCF") methodology. Beginning January 1, 2023, the Company no longer establishes a specific reserve for newly modified loans to borrowers experiencing financial difficulty. Instead, these modifications are included in their respective segments, and the ACL is calculated utilizing models that consider the borrowers' probability of default, loss given default and exposure at default.

ASU 2022-02 also requires disclosure of modifications of loans to borrowers experiencing financial difficulty if the modification involves principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, a term extension, or a combination of any of these types of modifications. Additionally, ASU 2022-02 requires the disclosure of current period gross charge-offs by year of loss origination (vintage) which are required to be applied prospectively as of January 1, 2023, the Company's date of adoption. Refer to Note 4 of the consolidated financial statements for further details.

The following provides a brief description of recently issued accounting pronouncements that have yet to be adopted by the Company:

ASU No. 2023-02, Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method ("ASU 2023-02"). The FASB issued ASU 2023-02 to permit reporting entities to elect to account for 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. Under the proportional amortization method, the initial cost of the investment is amortized in proportion to the income tax credits or other tax benefits received. ASU 2023-02 is effective for interim and annual periods beginning after December 15, 2023. While the Company is currently evaluating, it does not expect the adoption of ASU 2023-02 to have a material impact on its consolidated financial statements.

XML

INVESTMENTS

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

INVESTMENTS

Trading Securities

Trading securities are reported on the Company's consolidated statements of condition at fair value. As of March 31, 2023 and December 31, 2022, the fair value of the Company's trading securities were $4.0 million. These securities are held in a rabbi trust account and invested in mutual funds. The trading securities will be used for future payments associated with the Company's deferred compensation plan for eligible employees and directors.

AFS Debt Securities

AFS debt securities are reported on the Company's consolidated statements of condition at fair value. The following table summarizes the amortized cost, estimated fair value, and unrealized gains (losses) of AFS debt securities, as of the dates indicated:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
March 31, 2023
Obligations of states and political subdivisions	$	49,142	$	41	$	(132)	$	49,051
MBS issued or guaranteed by U.S. government-sponsored enterprises	585,249		214		(77,632)		507,831
CMO issued or guaranteed by U.S. government-sponsored enterprises	117,552		—		(11,319)		106,233
Subordinated corporate bonds	25,678		—		(2,370)		23,308
Total AFS debt securities	$	777,621	$	255	$	(91,453)	$	686,423
December 31, 2022
Obligations of states and political subdivisions	$	49,678	$	11	$	(463)	$	49,226
MBS issued or guaranteed by U.S. government-sponsored enterprises	598,845		131		(84,957)		514,019
CMO issued or guaranteed by U.S. government-sponsored enterprises	122,760		—		(13,413)		109,347
Subordinated corporate bonds	25,677		3		(2,397)		23,283
Total AFS debt securities	$	796,960	$	145	$	(101,230)	$	695,875

As of March 31, 2023 and December 31, 2022, there was no allowance carried on AFS debt securities.

In June of 2022, the Company transferred securities with a fair value of $520.3 million from AFS to HTM. The unrealized losses on the AFS debt securities at the time of transfer were $72.1 million, pre-tax, and were reported within AOCI. These unrealized losses are being amortized over the remaining life of the securities from AOCI into interest income on the consolidated statements of income. At March 31, 2023 the net unrealized losses on the transferred securities reported within AOCI were $50.9 million, net of a deferred tax asset of $13.9 million and at December 31, 2022 were $52.2 million, net of a deferred tax asset of $14.3 million.

The net unrealized losses on AFS debt securities reported within AOCI (excluding the aforementioned securities transferred from AFS to HTM) at March 31, 2023, were $71.6 million, net of a deferred tax asset of $19.6 million and at December 31, 2022 were $79.4 million, net of a deferred tax asset of $21.7 million.

For the three months ended March 31, 2023 and 2022, the Company did not sell any AFS debt securities.

The following table presents the Company's AFS debt securities with gross unrealized losses, for which an ACL has not been recorded, segregated by the length of time the securities have been in a continuous loss position, as of the dates indicated:  

		Less Than 12 Months				12 Months or More				Total
(In thousands, except number of holdings)	Number of Holdings	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
March 31, 2023
Obligations of states and political subdivisions	54	$	19,151	$	(48)	$	10,384	$	(84)	$	29,535	$	(132)
MBS issued or guaranteed by U.S. government-sponsored enterprises	172	3,310		(80)		488,861		(77,552)		492,171		(77,632)
CMO issued or guaranteed by U.S. government-sponsored enterprises	62	2,506		(56)		103,727		(11,263)		106,233		(11,319)
Subordinated corporate bonds	14	6,179		(412)		17,129		(1,958)		23,308		(2,370)
Total AFS debt securities	302	$	31,146	$	(596)	$	620,101	$	(90,857)	$	651,247	$	(91,453)
December 31, 2022
Obligations of states and political subdivisions	83	42,276		(463)		—		—		42,276		(463)
MBS issued or guaranteed by U.S. government-sponsored enterprises	175	118,290		(11,521)		381,355		(73,436)		499,645		(84,957)
CMO issued or guaranteed by U.S. government-sponsored enterprises	64	47,340		(4,589)		62,007		(8,824)		109,347		(13,413)
Subordinated corporate bonds	13	7,687		(384)		14,593		(2,013)		22,280		(2,397)
Total AFS debt securities	335	$	215,593	$	(16,957)	$	457,955	$	(84,273)	$	673,548	$	(101,230)

For the three months ended March 31, 2023 and 2022, the unrealized losses on the Company's AFS debt securities have not been recognized into income because management does not intend to sell and it is not more-likely-than-not it will be required to sell any of the AFS debt securities before recovery of its amortized cost basis. Furthermore, the unrealized losses were due to changes in interest rates and other market conditions and were not reflective of credit events. Agency-backed and government-sponsored enterprise securities have a long history with no credit losses, including during times of severe stress. The principal and interest payments on agency guaranteed debt is backed by the U.S. government. Government-sponsored enterprises similarly guarantee principal and interest payments and carry an implicit guarantee from the U.S. Department of the Treasury. Additionally, government-sponsored enterprise securities are exceptionally liquid, readily marketable, and provide a substantial amount of price transparency and price parity, indicating a perception of zero credit losses. AFS municipal debt holdings are comprised solely of high credit quality (rated A- or higher) state and municipal obligations. High credit quality state and municipal obligations have a history of zero to near-zero credit loss. Subordinated corporate bonds are primarily comprised of investment grade senior notes and senior subordinated notes of other financial institutions.

At March 31, 2023 and December 31, 2022, total accrued interest receivable on AFS debt securities, which has been excluded from reported amortized cost basis on AFS debt securities, was $2.0 million and $1.9 million, respectively, and was reported within other assets on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date.

The amortized cost and estimated fair values of the Company's AFS debt securities by contractual maturity at March 31, 2023, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-related securities are shown in total, as their maturities are highly variable.

(In thousands)	Amortized Cost		Fair Value
Due in one year or less	$	1,002	$	1,003
Due after one year through five years	13,612		12,323
Due after five years through ten years	60,206		59,032
Due after ten years	—		—
Subtotal	74,820		72,358
Mortgage-related securities	702,801		614,065
Total	$	777,621	$	686,423

HTM Debt Securities

HTM debt securities are reported on the Company's consolidated statements of condition at amortized cost. The following table summarizes the amortized cost, estimated fair value and unrealized gains (losses) of HTM debt securities as of the dates indicated:

(In thousands)	Amortized Cost(1)		Unrealized Gains		Unrealized Losses		Fair Value
March 31, 2023
Obligations of U.S. government-sponsored enterprises	$	7,491	$	—	$	(507)	$	6,984
Obligations of states and political subdivisions	56,049		1,683		(760)		56,972
MBS issued or guaranteed by U.S. government-sponsored enterprises	314,589		—		(18,932)		295,657
CMO issued or guaranteed by U.S. government-sponsored enterprises	143,030		—		(10,628)		132,402
Subordinated corporate bonds	18,915		607		(538)		18,984
Total HTM debt securities	$	540,074	$	2,290	$	(31,365)	$	510,999
December 31, 2022
Obligations of U.S. government-sponsored enterprises	$	7,457	$	—	$	(777)	$	6,680
Obligations of states and political subdivisions	55,978		431		(1,610)		54,799
MBS issued or guaranteed by U.S. government-sponsored enterprises	317,406		—		(24,766)		292,640
CMO issued or guaranteed by U.S. government-sponsored enterprises	145,069		—		(13,724)		131,345
Subordinated corporate bonds	20,673		332		(276)		20,729
Total HTM debt securities	$	546,583	$	763	$	(41,153)	$	506,193

(1) Amortized cost presented above includes unamortized unrealized losses for March 31, 2023 and December 31, 2022: $1.1 million in obligations of U.S. government-sponsored enterprises for both periods, $6.0 million and $6.1 million in obligations of state and political subdivisions, $37.4 million and $38.4 million in mortgage-backed securities, $20.1 million and $20.7 million in collateralized mortgage obligations and $108,000 and $117,000 in subordinated corporate bonds.

Agency-backed and government-sponsored enterprise securities have a long history with no credit losses, including during times of severe stress. The principal and interest payments on agency-guaranteed debt is backed by the U.S. government. Government-sponsored enterprises similarly guarantee principal and interest payments and carry an implicit guarantee from the U.S. Department of the Treasury. Additionally, government-sponsored enterprise securities are exceptionally liquid, readily marketable, and provide a substantial amount of price transparency and price parity, indicating a perception of zero credit losses. HTM municipal debt holdings are comprised solely of high credit quality (rated A- or higher) state and municipal obligations. High credit quality state and municipal obligations have a history of zero to near-zero credit loss. Subordinated corporate bonds are primarily comprised of investment grade senior notes and senior subordinated notes of other financial institutions. For the three months ended March 31, 2023 and 2022, the Company recorded a provision for credit losses on its HTM debt securities portfolio of $1.8 million and $0, respectively. The provision for credit losses recorded during the three months ended March 31, 2023 was due to the write-off of a Signature Bank subordinated corporate bond, which was designated as HTM and previously carried no ACL, as the bank failed during the quarter. Additionally, the Company wrote-off accrued interest receivable due from the Signature Bank subordinated corporate bond of $8,000 during the three months ended March 31, 2023, and it was recorded as a reversal of interest income on the consolidated statements of income. The Company did not write-off any accrued interest for the three months ended March 31, 2022.

The Company evaluated its HTM debt securities with an amortized cost as of March 31, 2023 and December 31, 2022, and determined that the expected credit loss on its HTM portfolio was immaterial, and therefore it did not carry an ACL at either date.

As of March 31, 2023 and December 31, 2022, none of the Company's HTM debt securities were past due or on non-accrual status. For the three months ended March 31, 2023 and 2022, the Company did not recognize any interest income on non-accrual HTM debt securities. At March 31, 2023 and December 31, 2022, total accrued interest receivable on HTM debt securities, which has been excluded from reported amortized cost basis on HTM debt securities, was $1.5 million and $1.7 million, respectively, and was reported within other assets on the consolidated statements of condition. An allowance was not carried on the HTM debt securities accrued interest receivable at either date.

The amortized cost and estimated fair values of HTM debt securities by contractual maturity at March 31, 2023 are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-related securities are shown in total, as their maturities are highly variable.

(In thousands)	Amortized Cost		Fair Value
Due in one year or less	$	—	$	—
Due after one year through five years	1,285		1,272
Due after five years through ten years	20,527		19,720
Due after ten years	60,643		61,947
Subtotal	82,455		82,939
Mortgage-related securities	457,619		428,060
Total	$	540,074	$	510,999

AFS and HTM Debt Securities Pledged

At March 31, 2023 and December 31, 2022, AFS and HTM debt securities with an amortized cost of $630.2 million and $821.9 million and estimated fair values of $560.3 million and $726.5 million, respectively, were pledged to secure FHLBB advances, public deposits, and securities sold under agreements to repurchase and for other purposes required or permitted by law.

Other Investments

The Company's FHLBB and FRB common stock are reported at cost within other investments on the consolidated statements of condition. The Company evaluates these investments for impairment based on the ultimate recoverability of the par value. The Company did not record any impairment on its FHLBB and FRB stock for the three months ended March 31, 2023 and 2022.

The following table summarizes the Company's investment in FHLBB stock and FRBB stock as presented within other investments on the consolidated statements of condition, as of the dates indicated:

(In thousands)	March 31, 2023		December 31, 2022
FHLBB	$	14,040	$	7,339
FRB	5,374		5,374
Total other investments	$	19,414	$	12,713

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS

3 Months Ended

Mar. 31, 2023

Loans and Leases Receivable Disclosure [Abstract]

LOANS AND ALLOWANCE FOR LOAN LOSSES

LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS

Loans

The composition of the Company’s loan portfolio, excluding residential loans held for sale, was as follows for the dates indicated:

(In thousands)	March 31, 2023		December 31, 2022
Commercial Loans:
Commercial real estate - non-owner-occupied	$	1,328,793	$	1,292,443
Commercial real estate - owner-occupied	337,824		332,494
Commercial	421,099		430,131
Total commercial loans	2,087,716		2,055,068
Retail Loans:
Residential real estate	1,733,147		1,700,266
Home equity	232,512		234,428
Consumer	19,733		20,591
Total retail loans	1,985,392		1,955,285
Total loans	$	4,073,108	$	4,010,353

The loan balances for each portfolio segment presented above are net of their respective unamortized fair value mark discount on acquired loans and net of unamortized loan origination costs for the dates indicated:

(In thousands)	March 31, 2023		December 31, 2022
Net unamortized fair value mark discount on acquired loans	$	(279)	$	(313)
Net unamortized loan origination costs	6,944		6,890
Total	$	6,665	$	6,577

The Company's lending activities are primarily conducted in Maine, but also include loan production offices in Massachusetts and New Hampshire. The Company originates single- and multi-family residential loans, commercial real estate loans, business loans, municipal loans and a variety of consumer loans. In addition, the Company makes loans for the construction of residential homes, multi-family properties and commercial real estate properties. The ability and willingness of borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the geographic area and the general economy.

SBA PPP Loans. Beginning in April 2020, the Company originated SBA PPP loans issued to qualifying businesses as part of the federal stimulus packages issued due to the COVID-19 pandemic. This program provided qualifying businesses a specialized, low-interest-rate loan by the U.S. Treasury Department and was administered by the SBA. SBA PPP loans provided borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilized the loan proceeds to cover employee compensation-related business operating costs, as well as certain other costs up to pre-established limits. Effective May 31, 2021, the SBA PPP loan program ended and the Company ceased originating loans under this program. At March 31, 2023 and December 31, 2022, five loans with a total principal balance of $583,000 and $648,000, respectively, remain outstanding and were presented in commercial loans.

Related Party Loans. In the normal course of business, the Bank makes loans to certain officers, directors and their associated companies, under terms that are consistent with the Company's lending policies and regulatory requirements and that do not involve more than the normal risk of collectability or present other unfavorable features. At March 31, 2023 and December 31, 2022, outstanding loans to certain officers, directors and their associated companies were less than 5% of the Company's shareholders' equity.

Loan Sales

For the three months ended March 31, 2023 and 2022, the Company sold $35.1 million and $46.6 million, respectively, of residential mortgage loans on the secondary market, which resulted in gains on the sale of loans (net of costs) of $384,000 and $1.1 million, respectively.

At March 31, 2023 and December 31, 2022, the Company had certain residential mortgage loans with a principal balance of $4.5 million and $5.3 million, respectively, designated as held for sale. The Company has elected the fair value option of accounting for its loans held for sale, and at March 31, 2023 and December 31, 2022, recorded an unrealized gain (loss) of $23,000 and ($62,000), respectively. For the three months ended March 31, 2023 and 2022, the Company recorded unrealized gains on loans held for sale recorded within mortgage banking income, net, on the Company's consolidated statements of income of $85,000 and $142,000, respectively.

The Company has forward delivery commitments with a secondary market investor on each of its loans held for sale at March 31, 2023 and December 31, 2022. Refer to Note 8 for further discussion of the Company's forward delivery commitments.

ACL on Loans

The Company manages its loan portfolio proactively to effectively identify problem credits and assess trends early, implement effective work-out strategies, and take charge-offs as promptly as practical. In addition, the Company continuously reassesses its underwriting standards in response to credit risk posed by changes in economic conditions. The Company monitors and manages credit risk through the following governance structure:

•The Credit Risk and Special Assets team and the Credit Risk Policy Committee, which is an internal management committee comprised of various executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Credit Risk and Special Assets, Compliance, and Commercial and Retail Banking, oversee the Company's systems and procedures to monitor the credit quality of its loan portfolio, conduct a loan review program, and maintain the integrity of the loan rating system.

•The adequacy of the ACL is overseen by the Management Provision Committee, which is an internal management committee comprised of various Company executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Credit Risk and Special Assets, Compliance, and Commercial and Retail Banking. The Management Provision Committee supports the oversight efforts of the Audit Committee of the Board of Directors.

•The Directors' Credit Committee of the Board of Directors reviews large credit exposures, monitors external loan review reports, reviews the lending authority for individual loan officers when required, and has approval authority and responsibility for all matters regarding the loan policy and other credit-related policies, including reviewing and monitoring asset quality trends, and concentration levels.

•The Audit Committee of the Board of Directors has approval authority and oversight responsibility for the ACL adequacy and methodology.

Segmentation. For purposes of determining the ACL on loans, the Company disaggregates its loans into portfolio segments. Each portfolio segment possesses unique risk characteristics that are considered when determining the appropriate level of allowance. As of March 31, 2023 and December 31, 2022, the Company's loan portfolio segments, as determined based on the unique risk characteristics of each, include the following:

Commercial Real Estate - Non-Owner-Occupied. Non-owner-occupied commercial real estate loans are, in substance, all commercial real estate loans that are not categorized by the Company as owner-occupied commercial real estate loans. Non-owner-occupied commercial estate loans are investment properties in which the primary source for repayment of the loan by the borrower is derived from rental income associated with the property or the proceeds of the sale, refinancing, or permanent refinancing of the property. Non-owner-occupied commercial real estate loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, multi-family residential, commercial/retail office space, industrial/warehouse space, hotels, assisted living facilities and other specific use properties. Also included within the non-owner-occupied commercial real estate loan segment are construction projects until they are completed. Commercial real estate loans are typically written with amortizing payment structures. Collateral values are determined based upon appraisals and evaluations in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines.

Commercial Real Estate - Owner-Occupied. Generally, owner-occupied commercial real estate loans are properties that are owned and operated by the borrower, and the primary source for repayment is the cash flow from the ongoing operations and activities conducted by the borrower's business. Owner-occupied commercial real estate loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, commercial/retail office space, restaurants, educational and medical practice facilities and other specific use properties. Commercial real estate loans are typically written with amortizing payment structures. Collateral values are determined based upon appraisals and evaluations in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines.

Commercial. Commercial loans consist of revolving and term loan obligations extended to business and corporate enterprises for the purpose of financing working capital and/or capital investment. Collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, and/or real estate, if applicable. Commercial loans are primarily paid by the operating cash flow of the borrower. Commercial loans may be secured or unsecured.

Residential Real Estate.  Residential real estate loans held in the Company's loan portfolio are made to borrowers who demonstrate the ability to make scheduled payments with full consideration to underwriting factors. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines. Collateral consists of mortgage liens on one- to four-family residences, including for investment purposes.

Home Equity. Home equity loans and lines of credit are made to qualified individuals and are secured by senior or junior mortgage liens on owner-occupied one- to four-family homes, condominiums, or vacation homes. Each home equity loan has a fixed rate and is billed as equal payments comprised of principal and interest. Each home equity line of credit has a variable rate and is billed as interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the principal balance plus all accrued interest. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines.

Consumer. Consumer loan products include personal lines of credit and amortizing loans made to qualified individuals for various purposes such as education, auto loans, debt consolidation, personal expenses or overdraft protection. Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines, as applicable. Consumer loans may be secured or unsecured.

The following table presents the activity in the ACL on loans for the periods indicated:

	Commercial Real Estate
(In thousands)	Non-Owner-Occupied		Owner- Occupied		Commercial		Residential Real Estate		Home Equity		Consumer		Total
At or For The Three Months Ended March 31, 2023
Beginning balance, December 31, 2022	$	17,296	$	2,362	$	5,446	$	9,089	$	2,225	$	504	$	36,922
Charge-offs	—		—		(312)		(18)		—		(4)		(334)
Recoveries	1		—		99		4		—		3		107
(Credit) provision for loan losses	(973)		108		(652)		1,737		215		4		439
Ending balance, March 31, 2023	$	16,324	$	2,470	$	4,581	$	10,812	$	2,440	$	507	$	37,134
At or For The Three Months Ended March 31, 2022
Beginning balance, December 31, 2021	$	18,834	$	2,539	$	4,202	$	6,133	$	1,469	$	79	$	33,256
Charge-offs	—		—		(245)		—		—		(67)		(312)
Recoveries	1		2		57		—		—		2		62
(Credit) provision for loan losses	(2,263)		(202)		843		343		(34)		92		(1,221)
Ending balance, March 31, 2022	$	16,572	$	2,339	$	4,857	$	6,476	$	1,435	$	106	$	31,785
At or For The Year Ended December 31, 2022
Beginning balance, December 31, 2021	$	18,834	$	2,539	$	4,202	$	6,133	$	1,469	$	79	$	33,256
Charge-offs	—		—		(1,042)		(66)		—		(134)		(1,242)
Recoveries	3		2		379		—		87		7		478
(Credit) provision for loan losses	(1,541)		(179)		1,907		3,022		669		552		4,430
Ending balance, December 31, 2022	$	17,296	$	2,362	$	5,446	$	9,089	$	2,225	$	504	$	36,922

The ACL on loans increased $200,000 during the three months ended March 31, 2023, to $37.1 million. The net increase was driven by: an overall softening economy and the increasing likelihood of a recession and 2% loan growth during this period, which was primarily driven by residential real estate and commercial real estate - non-owner-occupied.

Credit Concentrations

The Company focuses on maintaining a well-balanced and diversified loan portfolio. Despite such efforts, it is recognized that credit concentrations may occasionally emerge as a result of economic conditions, changes in local demand, natural loan growth and runoff. To identify credit concentrations effectively, all commercial and commercial real estate loans are assigned Standard Industrial Classification codes, North American Industry Classification System codes, and state and county codes. Shifts in portfolio concentrations are monitored. As of March 31, 2023, the Company's total exposure to the lessors of nonresidential buildings' industry and lessors of residential buildings' industry were 13% and 12% of total loans and 32% and 28% of total commercial real estate loans, respectively. There were no other industry exposures exceeding 10% of the Company's total loan portfolio as of March 31, 2023.

Credit Quality Indicators

To further identify loans with similar risk profiles, the Company categorizes each portfolio segment into classes by credit risk characteristic and applies a credit quality indicator to each portfolio segment. The indicators for commercial real estate - non-owner-occupied and owner-occupied, commercial and residential real estate portfolio segments are represented by Grades 1 through 10 as outlined below. In general, risk ratings are adjusted periodically throughout the year as updated analysis and review warrants. This process may include, but is not limited to, annual credit and loan reviews, periodic reviews of loan performance metrics, such as delinquency rates, and quarterly reviews of adversely risk rated loans. The Company uses the following definitions when assessing grades for the purpose of evaluating the risk and adequacy of the ACL on loans:

•Grade 1 through 6 — Grades 1 through 6 represent groups of loans that are not subject to adverse criticism as defined in regulatory guidance. Loans in these groups exhibit characteristics that represent low to moderate risks, which is measured using a variety of credit risk criteria, such as cash flow coverage, debt service coverage, balance sheet leverage, liquidity, management experience, industry position, prevailing economic conditions, support from secondary sources of repayment and other credit factors that may be relevant to a specific loan. In general, these loans are supported by properly margined collateral and guarantees of principal parties.

•Grade 7 — Loans with potential weakness (Special Mention). Loans in this category are currently protected based on collateral and repayment capacity and do not constitute undesirable credit risk, but have potential weakness that may result in deterioration of the repayment process at some future date. This classification is used if a negative trend is evident in the obligor’s financial situation. Special mention loans do not sufficiently expose the Company to warrant adverse classification.

•Grade 8 — Loans with definite weakness (Substandard). Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or by collateral pledged. Borrowers experience difficulty in meeting debt repayment requirements. Deterioration is sufficient to cause the Company to look to the sale of collateral.

•Grade 9 — Loans with potential loss (Doubtful). Loans classified as doubtful have all the weaknesses inherent in the substandard grade with the added characteristic that the weaknesses make collection or liquidation of the loan in full highly questionable and improbable. The possibility of some loss is extremely high, but because of specific pending factors that may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined.

•Grade 10 — Loans with definite loss (Loss). Loans classified as loss are considered uncollectible. The loss classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the asset because recovery and collection time may be protracted.

The Company periodically reassesses asset quality indicators to reflect appropriately the risk composition of the Company’s loan portfolio. Home equity and consumer loans are not individually risk rated, but rather analyzed as groups taking into account delinquency rates and other economic conditions which may affect the ability of borrowers to meet debt service requirements, including interest rates and energy costs. Performing loans include loans that are current and loans that are past due less than 90 days. Loans that are past due over 90 days and non-accrual loans, including TDRs prior to adoption of ASU 2022-02, are considered non-performing.

Based on the most recent analysis performed, the risk category of loans by portfolio segment by vintage was as follows as of the dates indicated:

(In thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of and for the period ended March 31, 2023
Commercial real estate - non-owner-occupied
Risk rating
Pass (Grades 1-6)	$	32,495	$	348,906	$	292,459	$	158,884	$	123,148	$	343,942	$	—	$	—	$	1,299,834
Special mention (Grade 7)	—		—		166		356		252		388		—		—		1,162
Substandard (Grade 8)	—		177		123		1,255		200		26,042		—		—		27,797
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - non-owner-occupied	$	32,495	$	349,083	$	292,748	$	160,495	$	123,600	$	370,372	$	—	$	—	$	1,328,793
Gross charge-offs for the three months ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate - owner-occupied
Risk rating
Pass (Grades 1-6)	$	17,730	$	54,516	$	79,464	$	27,889	$	21,962	$	106,937	$	—	$	—	$	308,498
Special mention (Grade 7)	—		—		—		—		—		404		—		—		404
Substandard (Grade 8)	—		8		2,228		—		19,993		6,693		—		—		28,922
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - owner occupied	$	17,730	$	54,524	$	81,692	$	27,889	$	41,955	$	114,034	$	—	$	—	$	337,824
Gross charge-offs for the three months ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial
Risk rating
Pass (Grades 1-6)	$	13,993	$	68,567	$	66,044	$	30,359	$	31,455	$	45,211	$	130,278	$	30,254	$	416,161
Special mention (Grade 7)	—		—		—		87		114		180		200		10		591
Substandard (Grade 8)	192		229		88		134		267		1,906		692		839		4,347
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial	$	14,185	$	68,796	$	66,132	$	30,580	$	31,836	$	47,297	$	131,170	$	31,103	$	421,099
Gross charge-offs for the three months ended	$	—	$	—	$	51	$	9	$	—	$	172	$	20	$	60	$	312
Residential Real Estate
Risk rating
Pass (Grades 1-6)	$	47,241	$	544,518	$	572,505	$	236,212	$	77,364	$	252,040	$	347	$	—	$	1,730,227
Special mention (Grade 7)	—		—		—		—		—		—		—		—		—
Substandard (Grade 8)	—		—		—		—		92		2,828		—		—		2,920
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total residential real estate	$	47,241	$	544,518	$	572,505	$	236,212	$	77,456	$	254,868	$	347	$	—	$	1,733,147
Gross charge-offs for the three months ended	$	—	$	—	$	—	$	—	$	—	$	18	$	—	$	—	$	18
Home equity
Risk rating
Performing	$	3,926	$	25,674	$	564	$	338	$	4,655	$	15,125	$	170,075	$	11,717	$	232,074
Non-performing	—		—		—		—		—		12		347		79		438
Total home equity	$	3,926	$	25,674	$	564	$	338	$	4,655	$	15,137	$	170,422	$	11,796	$	232,512
Gross charge-offs for the three months ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer
Risk rating
Performing	$	1,441	$	7,204	$	3,359	$	1,455	$	826	$	2,662	$	2,786	$	—	$	19,733
Non-performing	—		—		—		—		—		—		—		—		—
Total consumer	$	1,441	$	7,204	$	3,359	$	1,455	$	826	$	2,662	$	2,786	$	—	$	19,733
Gross charge-offs for the three months ended	$	—	$	—	$	—	$	—	$	—	$	4	$	—	$	—	$	4

(In thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2022
Commercial real estate - non-owner-occupied
Risk rating
Pass (Grades 1-6)	$	339,171	$	287,749	$	160,621	$	125,029	$	108,823	$	242,024	$	—	$	—	$	1,263,417
Special mention (Grade 7)	—		167		364		259		75		321		—		—		1,186
Substandard (Grade 8)	—		127		1,306		203		7,798		18,406		—		—		27,840
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - non-owner-occupied	$	339,171	$	288,043	$	162,291	$	125,491	$	116,696	$	260,751	$	—	$	—	$	1,292,443
Commercial real estate - owner-occupied
Risk rating
Pass (Grades 1-6)	$	60,127	$	80,781	$	28,378	$	23,381	$	39,554	$	70,568	$	—	$	—	$	302,789
Special mention (Grade 7)	—		2,053		—		19,992		—		411		—		—		22,456
Substandard (Grade 8)	17		—		—		—		3,266		3,966		—		—		7,249
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - owner occupied	$	60,144	$	82,834	$	28,378	$	43,373	$	42,820	$	74,945	$	—	$	—	$	332,494
Commercial
Risk rating
Pass (Grades 1-6)	$	73,537	$	70,110	$	32,272	$	33,491	$	22,271	$	26,245	$	135,157	$	30,191	$	423,274
Special mention (Grade 7)	—		—		93		141		70		189		1,196		12		1,701
Substandard (Grade 8)	149		52		133		216		846		1,524		50		2,186		5,156
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial	$	73,686	$	70,162	$	32,498	$	33,848	$	23,187	$	27,958	$	136,403	$	32,389	$	430,131
Residential Real Estate
Risk rating
Pass (Grades 1-6)	$	533,035	$	579,216	$	244,691	$	79,492	$	50,214	$	210,262	$	340	$	—	$	1,697,250
Special mention (Grade 7)	—		—		—		—		—		23		—		—		23
Substandard (Grade 8)	—		—		—		—		163		2,830		—		—		2,993
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total residential real estate	$	533,035	$	579,216	$	244,691	$	79,492	$	50,377	$	213,115	$	340	$	—	$	1,700,266
Home equity
Risk rating
Performing	$	26,712	$	693	$	341	$	4,842	$	7,730	$	8,551	$	173,338	$	11,735	$	233,942
Non-performing	—		—		—		—		—		27		377		82		486
Total home equity	$	26,712	$	693	$	341	$	4,842	$	7,730	$	8,578	$	173,715	$	11,817	$	234,428
Consumer
Risk rating
Performing	$	8,009	$	3,816	$	1,702	$	1,188	$	345	$	2,462	$	3,069	$	—	$	20,591
Non-performing	—		—		—		—		—		—		—		—		—
Total consumer	$	8,009	$	3,816	$	1,702	$	1,188	$	345	$	2,462	$	3,069	$	—	$	20,591

Past Due and Non-Accrual Loans

The Company closely monitors the performance of its loan portfolio. A loan is placed on non-accrual status when the financial condition of the borrower is deteriorating, payment in full of both principal and interest is not expected as scheduled, or principal or interest has been in default for 90 days or more. Exceptions may be made if the asset is secured by collateral sufficient to satisfy both the principal and accrued interest in full and collection is reasonably assured. When one loan to a borrower is placed on non-accrual status, all other loans to the borrower are re-evaluated to determine if they should also be placed on non-accrual status. All previously accrued and unpaid interest is reversed at this time. A loan will return to accrual status when collection of principal and interest is assured and the borrower has demonstrated timely payments of principal and interest for a reasonable period, generally at least six months. Unsecured loans, however, are not normally placed on non-accrual status because they are generally charged-off once their collectability is in doubt.

The following is a loan aging analysis by portfolio segment (including loans past due over 90 days and non-accrual loans) and loans past due over 90 days and accruing as of the following dates:

(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans Outstanding		Loans > 90 Days Past Due and Accruing
March 31, 2023
Commercial real estate - non-owner-occupied	$	34	$	—	$	10	$	44	$	1,328,749	$	1,328,793	$	—
Commercial real estate - owner-occupied	77		—		47		124		337,700		337,824
Commercial	965		79		465		1,509		419,590		421,099		—
Residential real estate	283		194		459		936		1,732,211		1,733,147		—
Home equity	552		106		151		809		231,703		232,512		—
Consumer	32		29		—		61		19,672		19,733		—
Total	$	1,943	$	408	$	1,132	$	3,483	$	4,069,625	$	4,073,108	$	—
December 31, 2022
Commercial real estate - non-owner-occupied	$	267	$	—	$	11	$	278	$	1,292,165	$	1,292,443	$	—
Commercial real estate - owner-occupied	55		—		47		102		332,392		332,494		—
Commercial	667		134		640		1,441		428,690		430,131		—
Residential real estate	852		186		524		1,562		1,698,704		1,700,266		—
Home equity	357		—		171		528		233,900		234,428		—
Consumer	23		11		—		34		20,557		20,591		—
Total	$	2,221	$	331	$	1,393	$	3,945	$	4,006,408	$	4,010,353	$	—

The following table presents the amortized cost basis of loans on non-accrual status (including non-accruing TDRs prior to adoption of ASU 2022-02) by portfolio segment as of the dates indicated:

	March 31, 2023						December 31, 2022
(In thousands)	Non-Accrual Loans With an Allowance		Non-Accrual Loans Without an Allowance		Total Non-Accrual Loans		Non-Accrual Loans With an Allowance		Non-Accrual Loans Without an Allowance		Total Non-Accrual Loans
Commercial real estate - non-owner-occupied	$	—	$	10	$	10	$	—	$	11	$	11
Commercial real estate - owner-occupied	—		47		47		—		46		46
Commercial	606		142		748		415		300		715
Residential real estate	1,359		356		1,715		1,314		419		1,733
Home equity	377		61		438		421		65		486
Consumer	—		—		—		—		—		—
Total	$	2,342	$	616	$	2,958	$	2,150	$	841	$	2,991

The following table presents the amortized cost basis of collateral-dependent non-accrual loans (including non-accruing TDRs prior to adoption of ASU 2022-02) by portfolio segment and collateral type, as of the dates indicated:

	March 31, 2023						December 31, 2022
	Collateral Type				Total Collateral -Dependent Non-Accrual Loans		Collateral Type				Total Collateral -Dependent Non-Accrual Loans
(In thousands)	Real Estate		General Business Assets				Real Estate		General Business Assets
Residential real estate	$	325	$	—	$	325	$	387	$	—	$	387
Home equity	—		—		—		—		—		—
Total	$	325	$	—	$	325	$	387	$	—	$	387

Collateral-dependent loans are loans for which repayment is expected to be provided substantially by the underlying collateral and there are no other available and reliable sources of repayment.

Interest income that would have been recognized if loans on non-accrual status had been current in accordance with their original terms is estimated to have been $25,000 and $46,000 for the three months ended March 31, 2023 and 2022, respectively.

The Company's policy is to reverse previously recorded interest income when a loan is placed on non-accrual. As a result, the Company did not record any interest income on its non-accruals for the three months ended March 31, 2023 and 2022. At March 31, 2023 and December 31, 2022, total accrued interest receivable on loans, which has been excluded from reported amortized cost basis on loans, was $11.0 million and $10.3 million, respectively, and reported within other assets on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date.

Loan Modifications for Borrowers Experiencing Financial Difficulty

Effective January 1, 2023, the Company adopted prospectively ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02"). ASU 2022-02 provided guidance that eliminated the recognition and measurement of TDRs. Following the adoption of this guidance, the Company evaluates all loan modifications made to borrowers experiencing financial difficulty, according to the accounting guidance for loan refinancing and restructuring to determine whether such loan modification should be accounted for as a new loan or a continuation of the existing loan. Our loan modifications for borrowers experiencing financial difficulty are generally accounted for as a continuation of the existing loan.

We offer several types of loans and receivables modification programs to borrowers experiencing financial difficulty, primarily interest rate reductions and term extensions. In such instances, we may modify loans and receivables with the intention to minimize future losses and improve collectability, while providing customers with temporary or permanent financial relief. There were no modified loans that required disclosure for the three months ended March 31, 2023.

Troubled Debt Restructuring Disclosures Prior to Adoption of ASU 2022-02

Prior to the Company's adoption of ASU 2022-02, which became effective for the Company on January 1, 2023, TDRs consisted of loans where the Company, for economic or legal reasons related to the borrower’s financial difficulties, granted a concession to the borrower that it would not otherwise consider. TDRs typically involved term modifications or a reduction of either interest or principal. Once such an obligation has been restructured, it will remain a TDR until paid in full, or until the loan is again restructured at current market rates and no concessions are granted.

The specific reserve allowance was determined by discounting the total expected future cash flows from the borrower at the original loan interest rate, or if the loan is currently collateral-dependent, using net realizable value, which was obtained through independent appraisals and internal evaluations. The following is a summary of TDRs prior to adoption of ASU 2022-02, by portfolio segment, and the associated specific reserve included within the ACL as of December 31, 2022:

	Number of Contracts	Recorded Investment		Specific Reserve
(In thousands, except number of contracts)	December 31, 2022	December 31, 2022		December 31, 2022
Commercial real estate - owner-occupied	1	$	113	$	50
Commercial	—	—		—
Residential real estate	18	2,208		$	307
Consumer and home equity	3	245		9
Total	22	$	2,566	$	366

At December 31, 2022, the Company had performing and non-performing TDRs with a recorded investment balance of $2.1 million and $452,000, respectively.

The following represents loan modifications that qualify as TDRs as of December 31, 2022 that occurred during the period indicated:

	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Specific Reserve
(In thousands, except number of contracts)	December 31, 2022	December 31, 2022		December 31, 2022		December 31, 2022
Home equity:
Interest rate concession and payment deferral	—	$	—	$	—	$	—
Maturity concession	1	69		96		—
Total	1	$	69	$	96	$	—

For the year ended December 31, 2022, no loans were modified as TDRs within the previous 12 months for which the borrower subsequently defaulted.

In-Process Foreclosure Proceedings

At March 31, 2023 and December 31, 2022, the Company had $450,000 and $481,000, respectively, of consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings were in process.

FHLB Advances

FHLB advances are those borrowings from the FHLBB greater than 90 days. FHLB advances are collateralized by a blanket lien on qualified collateral consisting primarily of loans with first mortgages secured by one- to four-family properties, certain commercial real estate loans, certain pledged investment securities and other qualified assets. The carrying value of residential real estate and commercial loans pledged as collateral was $1.8 billion at March 31, 2023 and December 31, 2022, respectively.

Refer to Notes 3 and 6 of the consolidated financial statements for discussion of securities pledged as collateral.

XML

BORROWINGS

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

BORROWINGS

BORROWINGS

The following summarizes the Company's short-term borrowed funds as presented on the consolidated statements of condition as of the dates indicated. The Company did not have any long-term borrowings as of the dates indicated.

(In thousands)	March 31, 2023		December 31, 2022
Short-Term Borrowings:
Customer repurchase agreements	$	196,918	$	196,451
Overnight borrowings	189,400		18,725
FHLBB borrowings	100,000		50,000
Total short-term borrowings	$	486,318	$	265,176

The Company has two tranches of junior subordinated debentures in the amount of $44.3 million as of March 31, 2023 and December 31, 2022. Refer to Note 10 of the consolidated financial statements for further details.

XML

REPURCHASE AGREEMENTS

3 Months Ended

Mar. 31, 2023

Banking and Thrift, Other Disclosure [Abstract]

REPURCHASE AGREEMENTS

REPURCHASE AGREEMENTS

The Company can raise additional liquidity by entering into repurchase agreements at its discretion. In a security repurchase agreement transaction, the Company will generally sell a security, agreeing to repurchase either the same or a substantially identical security on a specified later date, at a greater price than the original sales price. The difference between the sale price and purchase price is the cost of the proceeds, which is recorded within interest on borrowings on the consolidated statements of income. The securities underlying the agreements are delivered to counterparties as collateral for the repurchase obligations. Because the securities are treated as collateral and the agreement does not qualify for a full transfer of effective control, the transactions do not meet the criteria to be classified as sales, and are therefore considered secured borrowing transactions for accounting purposes. Payments on such borrowings are interest only until the scheduled repurchase date. In a repurchase agreement the Company is subject to the risk that the purchaser may default at maturity and not return the securities underlying the agreements. In order to minimize this potential risk, the Company either deals with established firms when entering into these transactions, or with customers whose agreements stipulate that the securities underlying the agreement are not delivered to the customer and instead are held in segregated safekeeping accounts by the Company's safekeeping agents.

The table below sets forth information regarding the Company’s repurchase agreements accounted for as secured borrowings and types of collateral as of the dates indicated:

(In thousands)	March 31, 2023		December 31, 2022
Customer Repurchase Agreements(1)(2):
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	$	174,276	$	99,105
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	22,642		94,328
Obligations of states and political subdivisions	—		3,018
Total	$	196,918	$	196,451

(1)    Presented within short-term borrowings on the consolidated statements of condition.

(2)    All customer repurchase agreements mature continuously or overnight for the dates indicated.

At March 31, 2023 and December 31, 2022, certain customers held CDs totaling $617,000 and $616,000, respectively, that were collateralized by CMO and MBS securities that were overnight repurchase agreements.

Certain counterparties monitor collateral, and may request additional collateral to be posted from time to time.

XML

COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Commitments

In the normal course of business, the Company is a party to both on- and off-balance sheet financial instruments involving, to varying degrees, elements of credit risk and interest rate risk in addition to the amounts recognized in the consolidated statements of condition.

The following is a summary of the Company's contractual off-balance sheet commitments as of the dates indicated:

(In thousands)	March 31, 2023		December 31, 2022
Commitments to extend credit	$	779,402	$	817,772
Standby letters of credit	6,769		6,801
Total	$	786,171	$	824,573

The Company’s commitments to extend credit from its lending activities do not necessarily represent future cash requirements since certain of these instruments may expire without being funded and others may not be fully drawn upon. These commitments are subject to the Company’s credit approval process, including an evaluation of the customer’s creditworthiness and related collateral requirements. Commitments generally have fixed expiration dates or other termination clauses.

Standby letters of credit are conditional commitments issued to guarantee the performance of a borrower to a third party. In the event of nonperformance by the borrower, the Company would be required to fund the commitment and would be entitled to the underlying collateral, if applicable, which generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, and/or real estate. The maximum potential future payments are limited to the contractual amount of the commitment.

The Company establishes an ACL on off-balance sheet credit exposures on its contractual off-balance sheet commitments, except those that are unconditionally cancellable by the Company. As of March 31, 2023 and December 31, 2022, the ACL on off-balance sheet credit exposures was $3.0 million and $3.3 million, respectively. The ACL on off-balance sheet credit exposure was presented within accrued interest and other liabilities on the consolidated statements of condition.

For the three months ended March 31, 2023 and 2022, the (credit) provision for credit losses on off-balance sheet credit exposures was ($275,000) and $161,000, respectively.

Legal Contingencies

In the normal course of business, the Company and its subsidiaries are subject to pending and threatened litigation, claims investigations and legal and administrative cases and proceedings. Although the Company is not able to predict the outcome of such actions, after reviewing pending and threatened actions with counsel, management believes that, based on the information currently available, the outcome of such actions, individually or in the aggregate, will not have a material adverse effect on the Company’s consolidated financial statements.

Reserves are established for legal claims only when losses associated with the claims are judged to be probable, and the loss can be reasonably estimated. Assessments of litigation exposure are difficult because they involve inherently unpredictable factors including, but not limited to: whether the proceeding is in the early stages; whether damages are unspecified, unsupported, or uncertain; whether there is a potential for punitive or other pecuniary damages; whether the matter involves legal uncertainties, including novel issues of law; whether the matter involves multiple parties and/or jurisdictions; whether discovery has begun or is not complete; whether meaningful settlement discussions have commenced; and whether the lawsuit involves class allegations. In many lawsuits and arbitrations, it is not possible to determine whether a liability has been incurred or to estimate the ultimate or minimum amount of that liability until the case is close to resolution, in which case a reserve will not be recognized until that time. Assessments of class action litigation, which is generally more complex than other types of litigation, are particularly difficult, especially in the early stages of the proceeding when it is not known whether a class will be certified or how a potential class, if certified, will be defined. As a result, the Company may be unable to estimate reasonably possible losses with respect to every litigation matter it faces.

The Company did not have any material loss contingencies that were provided for and/or that are required to be disclosed as of March 31, 2023 and December 31, 2022, respectively.

XML

DERIVATIVES AND HEDGING

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES AND HEDGING

DERIVATIVES AND HEDGING

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s credit derivatives result from loan participation arrangements, and therefore are not used to manage interest rate risk in the Company’s assets or liabilities.

Derivatives Designated as Hedging Instruments - Hedges of Interest Rate Risk

Interest Rate Contracts - Cash Flow Hedges. The Company’s objectives in using interest rate derivatives are to add stability to interest income and expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed rate payments or the receipt of fixed rate amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. For the three months ended March 31, 2023 and 2022, such derivatives were used to hedge the variable cash flows associated with existing variable-rate assets or liabilities or forecasted issuances of debt.

For derivatives designated, and that qualify as, cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCI and subsequently is reclassified into interest expense or interest income in the same period(s) during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense or interest income as interest payments are made or received on the Company’s variable-rate liabilities or assets. The Company estimates that an additional $2.5 million will be reclassified as a decrease to interest expense and an additional $3.0 million will be reclassified as a decrease to interest income over the next 12 months.

Interest Rate Contracts - Fair Value Hedges. Derivatives designated as fair value hedges are utilized to mitigate the risk of changes in the fair values of recognized assets and liabilities. The Company uses interest rate contracts in this manner to manage its exposure to changes in the fair value of hedged items caused by changes in interest rates.

Changes in the fair value of the derivatives and changes in the fair value of the hedged item due to changes in the hedged risk are recognized in earnings in the same line item. If a hedge is terminated, but the hedged item was not derecognized, all remaining adjustments to the carrying amount of the hedged item are amortized over a period that is consistent with the amortization of other discounts or premiums associated with the hedged item.

Derivatives not Designated as Hedges

Customer Loan Swaps. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions.

As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings.

Fixed Rate Mortgage Interest Rate Lock Commitments. As part of the origination process of a residential loan, the Company may enter into rate lock agreements with its borrower, which is considered an interest rate lock commitment. If the Company intends to sell the loan upon origination, it will account for the interest rate lock commitment as a derivative.

Forward Delivery Commitments. The Company typically enters into a forward delivery commitment with a secondary market investor, which has been approved by the Company within its normal governance process, at the onset of the loan origination process. The Company may enter into these arrangements with the secondary market investors on a "best effort" or "mandatory delivery" basis. The Company's normal practice is typically to enter into these arrangements on a "best effort" basis. The Company enters into these arrangements with the secondary market investors to manage its interest rate exposure. The Company accounts for the forward delivery commitment as a derivative upon origination of a loan identified as held for sale.

Risk Participation Agreements. The Company’s existing credit derivatives result from participations in or out of interest rate swaps provided by or to external lenders as part of loan participation arrangements, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain lenders which participate in loans.

The following table presents the fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition as of the dates indicated:

	Derivative Assets					Derivative Liabilities
(Dollars in thousands)	Notional Amount		Location	Fair Value		Notional Amount		Location	Fair Value
March 31, 2023
Derivatives designated as hedging instruments:
Interest rate contracts(1)	$	60,000	Other assets	$	10,996	$	433,000	Accrued interest and other liabilities	$	6,859
Total derivatives designated as hedging instruments				$	10,996				$	6,859
Derivatives not designated as hedging instruments:
Customer loan swaps(1)	$	288,076	Other assets	$	11,479	$	288,076	Accrued interest and other liabilities	$	11,554
Risk participation agreements	21,696		Other assets	—		44,127		Accrued interest and other liabilities	—
Fixed rate mortgage interest rate lock commitments	6,883		Other assets	71		5,843		Accrued interest and other liabilities	43
Forward delivery commitments	2,887		Other assets	32		1,651		Accrued interest and other liabilities	14
Total derivatives not designated as hedging instruments				$	11,582				$	11,611
December 31, 2022
Derivatives designated as hedging instruments:
Interest rate contracts(1)	$	110,000	Other assets	$	13,051	$	133,000	Accrued interest and other liabilities	$	5,515
Total derivatives designated as hedging instruments				$	13,051				$	5,515
Derivatives not designated as hedging instruments:
Customer loan swaps(1)	$	260,130	Other assets	$	14,802	$	345,545	Accrued interest and other liabilities	$	14,850
Risk participation agreements	21,818		Other assets	—		53,704		Accrued interest and other liabilities	—
Fixed rate mortgage interest rate lock commitments	4,493		Other assets	31		9,597		Accrued interest and other liabilities	87
Forward delivery commitments	5,259		Other assets	114		—		Accrued interest and other liabilities	—
Total derivatives not designated as hedging instruments				$	14,947				$	14,937

(1)    Reported fair values include accrued interest receivable and payable.

The following table shows the carrying amount and associated cumulative basis adjustments related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships:

Location in Consolidated Statements of Condition	Carrying Amount of Hedged Assets/(Liabilities)				Cumulative Fair Value Hedging Adjustment in the Carrying Amount of the Hedged Assets/(Liabilities)
(Dollars in thousands)	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
Loans(1)	$	301,552	$	—	$	(1,552)	$	—
Total	$	301,552	$	—	$	(1,552)	$	—

(1)     These amounts include the amortized cost basis of closed portfolios of fixed rate assets used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolio anticipated to be outstanding for the designated hedged period. At March 31, 2023, the amortized cost basis of the closed portfolios used in these hedging relationships was $853.7 million and the amounts of the designated hedged items were $300.0 million.

The table below presents the effect of cash flow hedge accounting, before tax, on AOCI for the periods indicated:

(Dollars in thousands)	Amount of Gain (Loss) Recognized in OCI on Derivative		Amount of Gain (Loss) Recognized in OCI Included Component		Amount of Gain (Loss) Recognized in OCI Excluded Component		Location of Gain (Loss) Recognized from AOCI into Income	Amount of Gain (Loss) Reclassified from AOCI into Income		Amount of Gain (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain (Loss) Reclassified from AOCI into Income Excluded Component
For the Three Months Ended March 31, 2023
Interest rate contracts	$	182	$	182	$	—	Interest and fees on loans	$	(717)	$	(717)	$	—
Interest rate contracts	(1)		(1)		—		Interest on deposits	306		306		—
Interest rate contracts	(796)		(796)		—		Interest on borrowings	487		487		—
Interest rate contracts	(934)		(934)		—		Interest on junior subordinated debentures	133		133		—
Total	$	(1,549)	$	(1,549)	$	—		$	209	$	209	$	—
For the Three Months Ended March 31, 2022
Interest rate contracts	$	(3,011)	$	(3,011)	$	—	Interest and fees on loans	$	382	$	382	$	—
Interest rate contracts	3,488		3,488		—		Interest on deposits	(149)		(149)		—
Interest rate contracts	3,158		3,158				Interest on junior subordinated debentures	(351)		(351)
Total	$	3,635	$	3,635	$	—		$	(118)	$	(118)	$	—

The table below presents the effect of fair value and cash flow hedge accounting on the consolidated statements of income for the periods indicated:

	Location and Amount of Gain (Loss) Recognized in Income
	Three Months Ended March 31,
	2023								2022
(Dollars in thousands)	Interest and fees on loans		Interest on deposits		Interest on borrowings		Interest on junior subordinated debentures		Interest and fees on loans		Interest on deposits		Interest on junior subordinated debentures
Total presented on the consolidated statements of income in which the effects of cash flow hedges are recorded	$	45,332	$	15,832	$	2,085	$	528	$	32,035	$	1,833	$	529
Gain (loss) on fair value hedging relationships
Interest rate contracts:
Hedged items	$	1,552	$	—	$	—	$	—	$	—	$	—	$	—
Derivatives designated as hedging instruments	$	(1,077)	$	—	$	—	$	—	$	—	$	—	$	—
Gain (loss) on cash flow hedging relationships
Interest rate contracts:
Amount of gain (loss) reclassified from AOCI into income	$	(717)	$	306	$	487	$	133	$	382	$	(149)	$	(351)
Amount of gain (loss) reclassified from AOCI into income - included component	$	(717)	$	306	$	487	$	133	$	382	$	(149)	$	(351)
Amount of gain (loss) reclassified from AOCI into income - excluded component	$	—	$	—	$	—	$	—	$	—	$	—	$	—

The table below presents the effect of the Company's derivative financial instruments that are not designated as hedging instruments on the consolidated statements of income for the periods indicated:

	Location of Gain (Loss) Recognized in Income	Amount of Gain (Loss) Recognized in Income
		Three Months Ended March 31,
(Dollars in thousands)		2023		2022
Customer loan swaps	Other expense	$	(27)	$	94
Fixed rate mortgage interest rate lock commitments	Mortgage banking income, net	84		(459)
Forward delivery commitments	Mortgage banking income, net	(96)		166
Total		$	(39)	$	(199)

Credit Risk-Related Contingent Features    

By using derivatives, the Company is exposed to credit risk to the extent that counterparties to the derivative contracts do not perform as required. Should a counterparty fail to perform under the terms of a derivative contract, the Company’s credit exposure on interest rate swaps is limited to the net positive fair value and accrued interest of all swaps with each counterparty. The Company seeks to minimize counterparty credit risk through credit approvals, limits, monitoring procedures, and obtaining collateral, where appropriate. As such, management believes the risk of incurring credit losses on derivative contracts with institutional counterparties is remote.

The Company has agreements with its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. In addition, the Company also has agreements with certain of its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well- capitalized institution, then the counterparty could terminate the derivative position(s) and the Company could be required to settle its obligations under the agreements.

As of March 31, 2023 and December 31, 2022, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for non-performance risk, related to these agreements was $11.6 million and $14.8 million, respectively. As of March 31, 2023 and December 31, 2022, the Company has minimum collateral posting thresholds with certain of its derivative counterparties and has posted cash collateral of $0 and $0, respectively. If the Company had breached any of these provisions at March 31, 2023 or December 31, 2022, it could have been required to settle its obligations under the agreements at their termination value of $11.6 million and $14.8 million, respectively.

XML

BALANCE SHEET OFFSETTING

3 Months Ended

Mar. 31, 2023

Offsetting [Abstract]

BALANCE SHEET OFFSETTING

BALANCE SHEET OFFSETTINGThe Company does not offset the carrying value for derivative instruments or repurchase agreements on the consolidated statements of condition. The Company nets the amount recognized for the right to reclaim cash collateral against the obligation to return cash collateral arising from instruments executed with the same counterparty under a master netting arrangement. Collateral legally required to be pledged or received is monitored and adjusted as necessary. Refer to Note 6 for further discussion of repurchase agreements and Note 8 for further discussion of derivative instruments.

The following table presents the Company's derivative positions and repurchase agreements, and the potential effect of netting arrangements on its financial position, as of the dates indicated:

							Gross Amount Not Offset in the Consolidated Statements of Condition
(Dollars in thousands)	Gross Amount Recognized in the Consolidated Statements of Condition		Gross Amount Offset in the Consolidated Statements of Condition		Net Amount Presented in the Consolidated Statements of Condition		Financial Instruments Pledged (Received)(1)		Cash Collateral Pledged (Received)(1)		Net Amount
March 31, 2023
Derivative assets:
Customer loan swaps - commercial customer(2)	$	11,479	$	—	$	11,479	$	—	$	—	$	11,479
Interest rate contracts(3)	10,996		—		10,996		—		(10,889)		107
Total	$	22,475	$	—	$	22,475	$	—	$	(10,889)	$	11,586
Derivative liabilities:
Customer loan swaps - dealer bank(3)	$	11,554	$	—	$	11,554	$	—	$	—	$	11,554
Interest rate contracts(3)	6,859		—		6,859		—		6,859		—
Total	$	18,413	$	—	$	18,413	$	—	$	6,859	$	11,554
Customer repurchase agreements	$	196,918	$	—	$	196,918	$	196,918	$	—	$	—
December 31, 2022
Derivative assets:
Customer loan swaps - dealer bank(3)	$	14,802	$	—	$	14,802	$	—	$	—	$	14,802
Interest rate contracts(3)	13,051		—		13,051		—		(10,915)		2,136
Total	$	27,853	$	—	$	27,853	$	—	$	(10,915)	$	16,938
Derivative liabilities:
Customer loan swaps - commercial customer(2)	$	14,850	$	—	14,850		$	—	$	—	$	14,850
Interest rate contracts(3)	5,515		—		5,515		—		5,515		—
Total	$	20,365	$	—	$	20,365	$	—	$	5,515	$	14,850
Customer repurchase agreements	$	196,451	$	—	$	196,451	$	196,451	$	—	$	—

(1)    The amount presented was the lesser of the amount pledged (received) or the net amount presented in the consolidated statements of condition.

(2)    The Company manages its net exposure on its commercial customer loan swaps by obtaining collateral as part of the normal loan policy and underwriting practices. The Company does not post collateral to its commercial customers as part of its contract..

(3)    Interest rate swap contracts were completed with the same dealer bank. The Company maintains a master netting arrangement with each counterparty and settles collateral on a net basis for all contracts

XML

REGULATORY CAPITAL REQUIREMENTS

3 Months Ended

Mar. 31, 2023

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

REGULATORY CAPITAL REQUIREMENTS

REGULATORY CAPITAL REQUIREMENTS

The Company and Bank are subject to various regulatory capital requirements administered by the FRB and the OCC. Failure to meet minimum capital requirements can result in mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements.

The Company and Bank are required to maintain certain levels of capital based on risk-adjusted assets. These capital requirements represent quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company and Bank's capital classification is also subject to qualitative judgments by our regulators about components, risk weightings and other factors. The quantitative measures established to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios of total capital, Tier 1 capital, and common equity Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets, or the leverage ratio. These requirements apply to the Company on a consolidated basis.

Under the current requirements, banking organizations must have a minimum total risk-based capital ratio of 8.0%, a minimum Tier 1 risk-based capital ratio of 6.0%, a minimum common equity Tier 1 risk-based capital ratio of 4.5%, and a minimum leverage ratio of 4.0% in order to be "adequately capitalized." In addition to these requirements, banking organizations must maintain a capital conservation buffer consisting of common Tier 1 equity in an amount above the minimum

risk-based capital requirements for "adequately capitalized" institutions equal to 2.5% of total risk-weighted assets, resulting in a requirement for the Company and the Bank effectively to maintain common equity Tier 1, Tier 1 and total capital ratios of 7.0%, 8.5% and 10.5%, respectively. The Company and the Bank must maintain the capital conservation buffer to avoid restrictions on the ability to pay dividends, pay discretionary bonuses and to engage in share repurchases based on the amount of the shortfall and the institution's "eligible retained income" (that is, the greater of (i) net income for the preceding four quarters, net of distributions and associated tax effects not reflected in net income and (ii) average net income over the preceding four quarters).

The Company and Bank's risk-based capital ratios exceeded regulatory requirements, including the capital conservation buffer, at March 31, 2023 and December 31, 2022, and the Bank's capital ratios met the requirements for it to be considered "well capitalized" under prompt corrective action provisions for each period. There were no changes to the Company or Bank's capital ratios that occurred subsequent to March 31, 2023 that would change the Company or Bank's regulatory capital categorization. The following table presents the Company and Bank's regulatory capital ratios at the periods indicated:

	March 31, 2023				Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer		Minimum Regulatory Provision to Be "Well Capitalized"		December 31, 2022				Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer		Minimum Regulatory Provision to Be "Well Capitalized"
(Dollars in thousands)	Amount		Ratio						Amount		Ratio
Camden National Corporation:
Total risk-based capital ratio	$	564,967	13.95	%	10.50	%	10.00	%	$	557,571	13.80	%	10.50	%	10.00	%
Tier 1 risk-based capital ratio	524,843		12.96	%	8.50	%	6.00	%	517,385		12.81	%	8.50	%	6.00	%
Common equity Tier 1 risk-based capital ratio(1)	481,843		11.90	%	7.00	%	N/A		474,385		11.74	%	7.00	%	N/A
Tier 1 leverage capital ratio(1)	524,843		9.24	%	4.00	%	N/A		517,385		9.22	%	4.00	%	N/A
Camden National Bank:
Total risk-based capital ratio	$	532,658	13.18	%	10.50	%	10.00	%	$	525,346	13.03	%	10.50	%	10.00	%
Tier 1 risk-based capital ratio	492,534		12.19	%	8.50	%	8.00	%	485,160		12.03	%	8.50	%	8.00	%
Common equity Tier 1 risk-based capital ratio	492,534		12.19	%	7.00	%	6.50	%	485,160		12.03	%	7.00	%	6.50	%
Tier 1 leverage capital ratio	492,534		8.68	%	4.00	%	5.00	%	485,160		8.65	%	4.00	%	5.00	%

(1)    “Minimum Regulatory Provisions to Be ‘Well Capitalized’” are not formally defined under applicable banking regulations for bank holding companies.

In 2006 and 2008, the Company issued $43.0 million of junior subordinated debentures in connection with the issuance of trust preferred securities. Although the junior subordinated debentures are recorded as liabilities on the Company's consolidated statements of condition, the Company is permitted, in accordance with applicable regulation, to include the debentures within its calculation of risk-based capital, subject to certain limits. At March 31, 2023 and December 31, 2022, $43.0 million of the junior subordinated debentures were included in Tier 1 and Tier 2 capital for the Company.

The Company and Bank's regulatory capital and risk-weighted assets fluctuate due to normal business, including profits and losses generated by the Company and Bank as well as changes to their asset mix. Of particular significance are changes within the Company and Bank's loan portfolio mix due to the differences in regulatory risk-weighting between retail and commercial loans. Furthermore, the Company and Bank's regulatory capital and risk-weighted assets are subject to change due to changes in GAAP and regulatory capital standards. The Company and Bank proactively monitor their regulatory capital and risk-weighted assets, and the impact of changes to their asset mix, and the impact of proposed and pending changes as a result of new and/or amended GAAP standards and regulatory changes.

XML

OTHER COMPREHENSIVE INCOME (LOSS) OTHER COMPREHENSIVE INCOME (LOSS)

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

OTHER COMPREHENSIVE INCOME (LOSS)

OTHER COMPREHENSIVE INCOME (LOSS)

The following tables present a reconciliation of the changes in the components of other comprehensive income and loss for the periods indicated, including the amount of tax (expense) benefit allocated to each component:

	For the Three Months Ended
	March 31, 2023						March 31, 2022
(In thousands)	Pre-Tax Amount		Tax (Expense) Benefit		After-Tax Amount		Pre-Tax Amount		Tax (Expense) Benefit		After-Tax Amount
Debt Securities:
Change in fair value	$	9,885	$	(2,125)	$	7,760	$	(92,753)	$	19,942	$	(72,811)
Less: reclassification adjustment for amortization of securities transferred from AFS to HTM(1)	(1,699)		365		(1,334)		—		—		—
Net change in fair value	11,584		(2,490)		9,094		(92,753)		19,942		(72,811)
Cash Flow Hedges:
Change in fair value	(3,109)		668		(2,441)		3,635		(782)		2,853
Less: reclassified AOCI gain (loss) into interest expense(2)	926		(199)		727		(500)		108		(392)
Less: reclassified AOCI (loss) gain into interest income(3)	(717)		154		(563)		382		(82)		300
Net change in fair value	(3,318)		713		(2,605)		3,753		(808)		2,945
Postretirement Plans:
Amortization of settlement recognition of net loss and prior service credit(4)	(6)		1		(5)		232		(50)		182
Other comprehensive income (loss)	$	8,260	$	(1,776)	$	6,484	$	(88,768)	$	19,084	$	(69,684)

(1)    Reclassified into taxable interest on investments and/or nontaxable interest on investments in the consolidated statements of income. Refer to Note 3 of the consolidated financial statements for further details.

(2)    Reclassified into interest on deposits, borrowings and/or subordinated debentures on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.

(3)    Reclassified into interest and fees on loans on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.

(4)    Reclassified into other expenses on the consolidated statements of income. Refer to Note 13 of the consolidated financial statements for further details.

The following table presents the changes in each component of AOCI, after tax, for the periods indicated:

(In thousands)	Net Unrealized Gains (Losses) on Debt Securities(1)		Net Unrealized (Losses) Gains on Cash Flow Hedges(1)		Defined Benefit Postretirement Plans(1)		AOCI(1)
Balance at December 31, 2022	$	(131,539)	$	5,891	$	(307)	$	(125,955)
Other comprehensive income (loss) before reclassifications	7,760		(2,441)		—		5,319
Less: Amounts reclassified from AOCI	(1,334)		164		5		(1,165)
Other comprehensive income (loss)	9,094		(2,605)		(5)		6,484
Balance at March 31, 2023	$	(122,445)	$	3,286	$	(312)	$	(119,471)
Balance at December 31, 2021	$	(1,173)	$	(1,779)	$	(3,277)	$	(6,229)
Other comprehensive (loss) income before reclassifications	(72,811)		2,853		—		(69,958)
Less: Amounts reclassified from AOCI	—		(92)		(182)		(274)
Other comprehensive (loss) income	(72,811)		2,945		182		(69,684)
Balance at March 31, 2022	$	(73,984)	$	1,166	$	(3,095)	$	(75,913)

(1)    All amounts are net of tax

XML

REVENUE FROM CONTRACTS WITH CUSTOMERS REVENUE FROM CONTRACS WITH CUSTOMERS

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

REVENUE FROM CONTRACTS WITH CUSTOMERS

A portion of the Company's non-interest income is derived from contracts with customers, and, as such, the revenue recognized depicts the transfer of promised goods or services to its customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company considers the terms of the contract and all relevant facts and circumstances when applying this guidance.

The Company has disaggregated its revenue from contracts with customers into categories based on the nature of the revenue. The categorization of revenues from contracts with customers that are within the scope of ASC 606 closely aligns with the presentation of revenue categories presented within non-interest income on the consolidated statements of income. The following table presents the revenue streams within the scope of ASC 606 for the periods indicated:

	Location on Consolidated Statements of Income	Three Months Ended March 31,
(In thousands)		2023		2022
Debit card interchange income	Debit card income	$	2,938	$	2,924
Services charges on deposit accounts	Service charges on deposit accounts	1,762		1,833
Fiduciary services income	Income from fiduciary services	1,600		1,631
Investment program income	Brokerage and insurance commissions	1,093		994
Other non-interest income	Other income	422		400
Total non-interest income within the scope of ASC 606		7,815		7,782
Total non-interest income not in scope of ASC 606		2,051		2,043
Total non-interest income		$	9,866	$	9,825

In each of the revenue streams identified above, there were no significant judgments made in determining or allocating the transaction price, as the consideration and services are generally explicitly identified in the associated contracts.

XML

EMPLOYEE BENEFIT PLANS

3 Months Ended

Mar. 31, 2023

Retirement Benefits [Abstract]

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS

The Company sponsors unfunded, non-qualified SERPs for certain officers and provides medical and life insurance to certain eligible retired employees.

The components of net periodic pension and postretirement benefit costs were as follows for the following periods:

Supplemental Executive Retirement Plan:

(In thousands)	Location on Consolidated Statements of Income	Three Months Ended March 31,
Net periodic pension cost		2023		2022
Service cost	Salaries and employee benefits	$	70	$	133
Interest cost	Other expenses	189		115
Recognized net actuarial loss	Other expenses	—		216
Total		$	259	$	464

Other Postretirement Benefit Plan:

(In thousands)	Location on Consolidated Statements of Income	Three Months Ended March 31,
Net periodic postretirement benefit cost		2023		2022
Service cost	Salaries and employee benefits	$	3	$	5
Interest cost	Other expenses	40		28
Recognized net actuarial (gain) loss	Other expenses	(1)		22
Amortization of prior service credit	Other expenses	(6)		(6)
Total		$	36	$	49

XML

EPS

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

EPS

EPS

The following is an analysis of basic and diluted EPS, reflecting the application of the two-class method, as described below:

	Three Months Ended March 31,
(In thousands, except number of shares and per share data)	2023		2022
Net income	$	12,727	$	16,795
Dividends and undistributed earnings allocated to participating securities(1)	(25)		(43)
Net income available to common shareholders	$	12,702	$	16,752
Weighted-average common shares outstanding for basic EPS	14,573,122		14,741,271
Dilutive effect of stock-based awards(2)	58,420		81,061
Weighted-average common and potential common shares for diluted EPS	14,631,542		14,822,332
Earnings per common share:
Basic EPS	$	0.87	$	1.14
Diluted EPS	$	0.87	$	1.13
Awards excluded from the calculation of diluted EPS(3):
Performance-based awards	1,141		1,027

(1)    Represents dividends paid and undistributed earnings allocated to non-vested stock-based awards that contain non-forfeitable rights to dividends.

(2)    Represents the assumed dilutive effect of unexercised and/or unvested stock options, restricted shares, restricted share units and contingently issuable performance-based awards utilizing the treasury stock method.

(3)    Represents stock-based awards not included in the computation of potential common shares for purposes of calculating diluted EPS as the exercise prices were greater than the average market price of the Company's common stock, and, therefore, are considered anti-dilutive.

Non-vested stock-based payment awards that contain non-forfeitable rights to dividends are participating securities and are included in the computation of EPS pursuant to the two-class method. The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Certain of the Company’s non-vested stock-based awards qualify as participating securities. 

Net income is allocated between the common stock and participating securities pursuant to the two-class method. Basic EPS is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period, excluding participating non-vested stock-based awards. Diluted EPS is computed in a similar manner, except that the denominator includes the number of additional common shares that would have been outstanding if potentially dilutive common shares were issued using the treasury stock method.

XML

FAIR VALUE MEASUREMENT AND DISCLOSURE

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENT AND DISCLOSURE

FAIR VALUE MEASUREMENT AND DISCLOSURE

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined using quoted market prices. However, in many instances, quoted market prices are not available. In such instances, fair values are determined using various valuation techniques. Various assumptions and observable inputs must be relied upon in applying these techniques. GAAP 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.

GAAP permits an entity to choose to measure eligible financial instruments and other items at fair value. The Company has elected the fair value option for its loans held for sale. Electing the fair value option for loans held for sale enables the Company’s financial position to align more clearly with the economic value of the actively traded asset.

The fair value hierarchy for valuation of an asset or liability is as follows:

Level 1:   Valuation is based upon unadjusted quoted prices in active markets for identical assets and liabilities that the entity has the ability to access as of the measurement date.

Level 2:   Valuation is determined from quoted prices for similar assets or liabilities in active markets, from quoted prices for identical or similar instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market.

Level 3:   Valuation is derived from model-based and other techniques in which at least one significant input is unobservable and which may be based on the Company’s own estimates about the assumptions that market participants would use to value the asset or liability.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon model-based techniques incorporating various assumptions including interest rates, prepayment speeds and credit losses. Assets and liabilities valued using model-based techniques are classified as either Level 2 or Level 3, depending on the lowest level classification of an input that is considered significant to the overall valuation. A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

Financial Instruments Recorded at Fair Value on a Recurring Basis

Trading Securities and Deferred Compensation: The fair value of trading securities and deferred compensation is reported using market quoted prices and has been classified as Level 1 as such securities and underlying securities are actively traded and no valuation adjustments have been applied.

Debt Securities:  The fair value of investments in debt securities is reported utilizing prices provided by an independent pricing service based on recent trading activity and other observable information including, but not limited to, dealer quotes, market spreads, cash flows, market interest rate curves, market consensus prepayment speeds, credit information, and the bond’s terms and conditions. The fair value of debt securities is classified as Level 2.

Loans Held For Sale: The fair value of loans held for sale is determined on an individual loan basis using quoted secondary market prices and is classified as Level 2.

Derivatives:  The fair value of interest rate swaps is determined using inputs that are observable in the market place obtained from third parties including yield curves, publicly available volatilities, and floating indexes and, accordingly, are classified as Level 2 inputs. The credit value adjustments associated with derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default. As of March 31, 2023 and December 31, 2022, the credit valuation adjustment on the overall valuation of its derivative positions and was not significant to the overall valuation of its derivatives, and, thus, the Company's interest rate swaps were classified as Level 2.

The fair value of the Company's fixed rate interest rate lock commitments were determined using secondary market pricing for loans with similar structures, including term, rate and borrower credit quality, adjusted for the Company's pull-through rate estimate (i.e. estimate of loans within its loan pipeline that will ultimately complete the origination process and be funded). The Company has classified its fixed rate interest rate lock commitments as Level 2, as the quoted secondary market prices are the more significant input, and, although the Company's internal pull-through rate estimate is a Level 3 estimate, it is less significant to the ultimate valuation.

The fair value of the Company's forward delivery commitments is determined using secondary market pricing for loans with similar structures, including term, rate and borrower credit quality, and the locked and agreed to price with the secondary market investor. The Company has classified its fixed rate interest rate lock commitments as Level 2.

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, for the dates indicated:

(In thousands)	Fair Value		Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)
March 31, 2023
Financial assets:
Trading securities	$	3,971	$	3,971	$	—	$	—
AFS debt securities:
Obligations of states and political subdivisions	49,051		—		49,051		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	507,831		—		507,831		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	106,233		—		106,233		—
Subordinated corporate bonds	23,308		—		23,308		—
Loans held for sale	4,562		—		4,562		—
Customer loan swaps	11,479		—		11,479		—
Interest rate contracts	10,996		—		10,996		—
Fixed rate mortgage interest rate lock commitments	71		—		71		—
Forward delivery commitments	32		—		32		—
Financial liabilities:
Deferred compensation	$	3,971	$	3,971	$	—	$	—
Customer loan swaps	11,554		—		11,554		—
Interest rate contracts	6,859		—		6,859		—
Fixed rate mortgage interest rate lock commitments	43		—		43		—
Forward delivery commitments	14		—		14		—
December 31, 2022
Financial assets:
Trading securities	$	3,990	$	3,990	$	—	$	—
AFS debt securities:
Obligations of states and political subdivisions	49,226		—		49,226		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	514,019		—		514,019		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	109,347		—		109,347		—
Subordinated corporate bonds	23,283		—		23,283		—
Loans held for sale	5,197		—		5,197		—
Customer loan swaps	14,802		—		14,802		—
Interest rate contracts	13,051		—		13,051		—
Fixed rate mortgage interest rate lock commitments	31		—		31		—
Forward delivery commitments	114		—		114		—
Financial liabilities:
Deferred compensation	$	3,990	$	3,990	$	—	$	—
Customer loan swaps	14,850		—		14,850		—
Interest rate contracts	5,515		—		5,515		—
Fixed rate mortgage interest rate lock commitments	87		—		87		—

 The Company did not have any transfers between Level 1 and Level 2 of the fair value hierarchy during the three months ended March 31, 2023. The Company’s policy for determining transfers between levels occurs at the end of the reporting period when circumstances in the underlying valuation criteria change and result in transfer between levels.

Financial Instruments Recorded at Fair Value on a Nonrecurring Basis

The Company may be required, from time to time, to measure certain financial assets and financial liabilities at fair value on a nonrecurring basis in accordance with GAAP, which may consist of collateral-dependent loans and servicing assets. These include assets that are measured at the lower of cost or market value that were recognized at fair value below cost at the end of the period. As of March 31, 2023 and March 31, 2022, the Company did not have any material financial instruments measured and reported at fair value.

Collateral-Dependent Loans:  Expected credit losses on individually assessed loans deemed to be collateral dependent are valued based upon the lower of amortized cost or fair value of the underlying collateral less costs to sell. Management estimates the fair values of these assets using Level 2 inputs, such as the fair value of collateral based on independent third-party market approach appraisals for collateral-dependent loans, and Level 3 inputs where circumstances warrant an adjustment to the appraised value based on the age of the appraisal and/or comparable sales, condition of the collateral, and market conditions.

Servicing Assets:  The Company accounts for mortgage servicing assets at cost, subject to impairment testing. When the carrying value of a tranche exceeds fair value, a valuation allowance is established to reduce the carrying cost to fair value. Fair value is based on a valuation model that calculates the present value of estimated net servicing income. The Company obtains a third-party valuation based upon loan level data including note rate, type and term of the underlying loans. The model utilizes two significant unobservable inputs, namely loan prepayment assumptions and the discount rate used, to calculate the fair value of each tranche, and, as such, the Company has classified the model within Level 3 of the fair value hierarchy.

Non-Financial Instruments Recorded at Fair Value on a Non-Recurring Basis

The Company had no non-financial assets or non-financial liabilities measured at fair value on a non-recurring basis as of March 31, 2023 and March 31, 2022. Non-financial assets measured at fair value on a non-recurring basis consist of OREO, goodwill and core deposit intangible assets. 

OREO: OREO properties acquired through foreclosure or deed in lieu of foreclosure are recorded at net realizable value, which is the fair value of the real estate, less estimated costs to sell. Any write-down of the recorded investment in the related loan is charged to the ACL upon transfer to OREO. Upon acquisition of a property, a current appraisal is used or an internal valuation is prepared to substantiate fair value of the property. After foreclosure, management periodically, but at least annually, obtains updated valuations of the OREO properties and, if additional impairments are deemed necessary, the subsequent write-downs for declines in value are recorded through a valuation allowance and a provision for credit losses charged to other non-interest expense within the consolidated statements of income. As management considers appropriate, adjustments are made to the appraisal obtained for the OREO property to account for recent sales activity of comparable properties, changes in the condition of the property, and changes in market conditions. These adjustments are not observable in an active market and are classified as Level 3. At March 31, 2023 and December 31, 2022, the Company did not have any OREO properties.

Goodwill: Goodwill represents the excess cost of an acquisition over the fair value of the net assets acquired. The fair value of goodwill is estimated by utilizing several standard valuation techniques, including discounted cash flow analyses, bank merger multiples, and/or an estimation of the impact of business conditions and investor activities on the long-term value of the goodwill. Should an impairment occur, the associated goodwill is written-down to fair value and the impairment charge is recorded within non-interest expense in the consolidated statements of income. The Company conducts an annual impairment test of goodwill in the fourth quarter each year, or more frequently as necessary. There have been no indications or triggering events during the three months ended March 31, 2023, for which management believes it is more likely than not that goodwill is impaired.

Core Deposit Intangible Assets: The Company's core deposit intangible assets represent the estimated value of acquired customer relationships and are amortized over the estimated life of those relationships. Core deposit intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. There were no events or changes in circumstances for the three months ended March 31, 2023, that indicated the carrying amount may not be recoverable.

The estimated fair values and related carrying amounts for assets and liabilities for which fair value is only disclosed are shown below as of the dates indicated:

	Carrying Amount		Fair Value		Readily Available Market Prices (Level 1)		Observable Market Prices (Level 2)		Company Determined Market Prices (Level 3)
March 31, 2023
Financial assets:
HTM debt securities	$	540,074	$	510,999	$	—	$	510,999	$	—
Commercial real estate loans(1)(2)	1,647,823		1,586,974		—		—		1,586,974
Commercial loans(2)	416,518		405,429		—		—		404,847
Residential real estate loans(2)	1,722,335		1,509,387		—		—		1,509,387
Home equity loans(2)	230,072		228,821		—		—		228,821
Consumer loans(2)	19,226		16,993		—		—		16,993
Servicing assets	2,413		4,187		—		—		4,187
Financial liabilities:
Time deposits	$	360,103	$	351,795	$	—	$	351,795	$	—
Short-term borrowings	486,318		485,505		—		485,505		—
Subordinated debentures	44,331		31,918		—		31,918		—
December 31, 2022
Financial assets:
HTM debt securities	$	546,583	$	506,193	$	—	$	506,193	$	—
Commercial real estate loans(1)(2)	1,605,279		1,550,379		—		—		1,550,379
Commercial loans(2)	424,685		414,353		—		—		414,353
Residential real estate loans(2)	1,691,177		1,494,707		—		—		1,494,707
Home equity loans(2)	232,203		237,967		—		—		237,967
Consumer loans(2)	20,087		17,853		—		—		17,853
Servicing assets	2,458		4,412		—		—		4,412
Financial liabilities:
Time deposits	$	300,451	$	291,568	$	—	$	291,568	$	—
Short-term borrowings	265,176		264,779		—		264,779		—
Subordinated debentures	44,331		31,032		—		31,032		—

(1)    Commercial real estate loan includes non-owner-occupied and owner-occupied properties.

(2)    The presented carrying amount is net of the allocated ACL on loans.

Excluded from the summary were financial instruments measured at fair value on a recurring and nonrecurring basis, as previously described.

The Company considers its financial instruments' current use to be the highest and best use of the instruments.

XML

RECENT ACCOUNTING PRONOUNCEMENTS (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Standards Update and Change in Accounting Principle [Abstract]

Accounting Standards Adopted in 2021

The Company adopted and updated its accounting policies for the following accounting standards that have been applied to the Company's interim consolidated financial statements for the three months ended March 31, 2023:

ASU No. 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method ("ASU 2022-01"). The FASB issued ASU 2022-01 to amend ASU 2017-12, which was adopted by the Company in 2018. This amendment renames the "last-of-layer" method to the "portfolio layer" method, permits non-repayable financial assets to be included in a closed portfolio hedged using the portfolio layer method, and provides additional guidance for entities that apply the portfolio layer method of hedge accounting in accordance with Topic 815. The Company adopted ASU 2022-01, as amended, effective January 1, 2023 and leveraged the "portfolio layer" method to enter into interest rate swaps to hedge fixed-rate residential mortgages during the three months ended March 31, 2023. There was no impact to the Company's consolidated financial statements upon adoption. Refer to Note 8 of the consolidated financial statements for further details.

ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02"). The FASB issued ASU 2022-02 to provide new guidance on TDRs and charge-offs for entities that have adopted ASU 2016-13. The Company adopted ASU 2022-02 effective January 1, 2023 on a prospective basis, and upon adoption there was no impact to the consolidated financial statements. The adoption of ASU 2022-02 eliminates the accounting and disclosure requirements for TDRs, including the requirement to measure the allowance using a discounted cash flow ("DCF") methodology. Beginning January 1, 2023, the Company no longer establishes a specific reserve for newly modified loans to borrowers experiencing financial difficulty. Instead, these modifications are included in their respective segments, and the ACL is calculated utilizing models that consider the borrowers' probability of default, loss given default and exposure at default.

ASU 2022-02 also requires disclosure of modifications of loans to borrowers experiencing financial difficulty if the modification involves principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, a term extension, or a combination of any of these types of modifications. Additionally, ASU 2022-02 requires the disclosure of current period gross charge-offs by year of loss origination (vintage) which are required to be applied prospectively as of January 1, 2023, the Company's date of adoption. Refer to Note 4 of the consolidated financial statements for further details.

The following provides a brief description of recently issued accounting pronouncements that have yet to be adopted by the Company:

ASU No. 2023-02, Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method ("ASU 2023-02"). The FASB issued ASU 2023-02 to permit reporting entities to elect to account for 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. Under the proportional amortization method, the initial cost of the investment is amortized in proportion to the income tax credits or other tax benefits received. ASU 2023-02 is effective for interim and annual periods beginning after December 15, 2023. While the Company is currently evaluating, it does not expect the adoption of ASU 2023-02 to have a material impact on its consolidated financial statements.

XML

INVESTMENTS (Tables)

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Summary of Amortized Costs and Estimated Fair Values of Available-For-Sale Securities

The following table summarizes the amortized cost, estimated fair value, and unrealized gains (losses) of AFS debt securities, as of the dates indicated:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
March 31, 2023
Obligations of states and political subdivisions	$	49,142	$	41	$	(132)	$	49,051
MBS issued or guaranteed by U.S. government-sponsored enterprises	585,249		214		(77,632)		507,831
CMO issued or guaranteed by U.S. government-sponsored enterprises	117,552		—		(11,319)		106,233
Subordinated corporate bonds	25,678		—		(2,370)		23,308
Total AFS debt securities	$	777,621	$	255	$	(91,453)	$	686,423
December 31, 2022
Obligations of states and political subdivisions	$	49,678	$	11	$	(463)	$	49,226
MBS issued or guaranteed by U.S. government-sponsored enterprises	598,845		131		(84,957)		514,019
CMO issued or guaranteed by U.S. government-sponsored enterprises	122,760		—		(13,413)		109,347
Subordinated corporate bonds	25,677		3		(2,397)		23,283
Total AFS debt securities	$	796,960	$	145	$	(101,230)	$	695,875

The following table summarizes the Company's investment in FHLBB stock and FRBB stock as presented within other investments on the consolidated statements of condition, as of the dates indicated:

(In thousands)	March 31, 2023		December 31, 2022
FHLBB	$	14,040	$	7,339
FRB	5,374		5,374
Total other investments	$	19,414	$	12,713

Unrealized Gross Losses and Estimated Fair Values of Investment Securities by Length of Time that Individual Securities in Each Category in Continuous Loss Position

The following table presents the Company's AFS debt securities with gross unrealized losses, for which an ACL has not been recorded, segregated by the length of time the securities have been in a continuous loss position, as of the dates indicated:  

		Less Than 12 Months				12 Months or More				Total
(In thousands, except number of holdings)	Number of Holdings	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
March 31, 2023
Obligations of states and political subdivisions	54	$	19,151	$	(48)	$	10,384	$	(84)	$	29,535	$	(132)
MBS issued or guaranteed by U.S. government-sponsored enterprises	172	3,310		(80)		488,861		(77,552)		492,171		(77,632)
CMO issued or guaranteed by U.S. government-sponsored enterprises	62	2,506		(56)		103,727		(11,263)		106,233		(11,319)
Subordinated corporate bonds	14	6,179		(412)		17,129		(1,958)		23,308		(2,370)
Total AFS debt securities	302	$	31,146	$	(596)	$	620,101	$	(90,857)	$	651,247	$	(91,453)
December 31, 2022
Obligations of states and political subdivisions	83	42,276		(463)		—		—		42,276		(463)
MBS issued or guaranteed by U.S. government-sponsored enterprises	175	118,290		(11,521)		381,355		(73,436)		499,645		(84,957)
CMO issued or guaranteed by U.S. government-sponsored enterprises	64	47,340		(4,589)		62,007		(8,824)		109,347		(13,413)
Subordinated corporate bonds	13	7,687		(384)		14,593		(2,013)		22,280		(2,397)
Total AFS debt securities	335	$	215,593	$	(16,957)	$	457,955	$	(84,273)	$	673,548	$	(101,230)

Contractual Obligation, Fiscal Year Maturity

The amortized cost and estimated fair values of the Company's AFS debt securities by contractual maturity at March 31, 2023, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-related securities are shown in total, as their maturities are highly variable.

(In thousands)	Amortized Cost		Fair Value
Due in one year or less	$	1,002	$	1,003
Due after one year through five years	13,612		12,323
Due after five years through ten years	60,206		59,032
Due after ten years	—		—
Subtotal	74,820		72,358
Mortgage-related securities	702,801		614,065
Total	$	777,621	$	686,423

Debt Securities, Held-to-maturity

The following table summarizes the amortized cost, estimated fair value and unrealized gains (losses) of HTM debt securities as of the dates indicated:

(In thousands)	Amortized Cost(1)		Unrealized Gains		Unrealized Losses		Fair Value
March 31, 2023
Obligations of U.S. government-sponsored enterprises	$	7,491	$	—	$	(507)	$	6,984
Obligations of states and political subdivisions	56,049		1,683		(760)		56,972
MBS issued or guaranteed by U.S. government-sponsored enterprises	314,589		—		(18,932)		295,657
CMO issued or guaranteed by U.S. government-sponsored enterprises	143,030		—		(10,628)		132,402
Subordinated corporate bonds	18,915		607		(538)		18,984
Total HTM debt securities	$	540,074	$	2,290	$	(31,365)	$	510,999
December 31, 2022
Obligations of U.S. government-sponsored enterprises	$	7,457	$	—	$	(777)	$	6,680
Obligations of states and political subdivisions	55,978		431		(1,610)		54,799
MBS issued or guaranteed by U.S. government-sponsored enterprises	317,406		—		(24,766)		292,640
CMO issued or guaranteed by U.S. government-sponsored enterprises	145,069		—		(13,724)		131,345
Subordinated corporate bonds	20,673		332		(276)		20,729
Total HTM debt securities	$	546,583	$	763	$	(41,153)	$	506,193

(1) Amortized cost presented above includes unamortized unrealized losses for March 31, 2023 and December 31, 2022: $1.1 million in obligations of U.S. government-sponsored enterprises for both periods, $6.0 million and $6.1 million in obligations of state and political subdivisions, $37.4 million and $38.4 million in mortgage-backed securities, $20.1 million and $20.7 million in collateralized mortgage obligations and $108,000 and $117,000 in subordinated corporate bonds.

Amortized Cost and Estimated Fair Values of Debt Securities by Contractual Maturity

The amortized cost and estimated fair values of HTM debt securities by contractual maturity at March 31, 2023 are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-related securities are shown in total, as their maturities are highly variable.

(In thousands)	Amortized Cost		Fair Value
Due in one year or less	$	—	$	—
Due after one year through five years	1,285		1,272
Due after five years through ten years	20,527		19,720
Due after ten years	60,643		61,947
Subtotal	82,455		82,939
Mortgage-related securities	457,619		428,060
Total	$	540,074	$	510,999

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Tables)

3 Months Ended

Mar. 31, 2023

Loans and Leases Receivable Disclosure [Abstract]

Composition of Loan Portfolio, Excluding Residential Loans Held for Sale

The composition of the Company’s loan portfolio, excluding residential loans held for sale, was as follows for the dates indicated:

(In thousands)	March 31, 2023		December 31, 2022
Commercial Loans:
Commercial real estate - non-owner-occupied	$	1,328,793	$	1,292,443
Commercial real estate - owner-occupied	337,824		332,494
Commercial	421,099		430,131
Total commercial loans	2,087,716		2,055,068
Retail Loans:
Residential real estate	1,733,147		1,700,266
Home equity	232,512		234,428
Consumer	19,733		20,591
Total retail loans	1,985,392		1,955,285
Total loans	$	4,073,108	$	4,010,353

Schedule of Loan Balances by Portfolio Segment

The loan balances for each portfolio segment presented above are net of their respective unamortized fair value mark discount on acquired loans and net of unamortized loan origination costs for the dates indicated:

(In thousands)	March 31, 2023		December 31, 2022
Net unamortized fair value mark discount on acquired loans	$	(279)	$	(313)
Net unamortized loan origination costs	6,944		6,890
Total	$	6,665	$	6,577

Summary of Activity in Allowance for Loan Losses

The following table presents the activity in the ACL on loans for the periods indicated:

	Commercial Real Estate
(In thousands)	Non-Owner-Occupied		Owner- Occupied		Commercial		Residential Real Estate		Home Equity		Consumer		Total
At or For The Three Months Ended March 31, 2023
Beginning balance, December 31, 2022	$	17,296	$	2,362	$	5,446	$	9,089	$	2,225	$	504	$	36,922
Charge-offs	—		—		(312)		(18)		—		(4)		(334)
Recoveries	1		—		99		4		—		3		107
(Credit) provision for loan losses	(973)		108		(652)		1,737		215		4		439
Ending balance, March 31, 2023	$	16,324	$	2,470	$	4,581	$	10,812	$	2,440	$	507	$	37,134
At or For The Three Months Ended March 31, 2022
Beginning balance, December 31, 2021	$	18,834	$	2,539	$	4,202	$	6,133	$	1,469	$	79	$	33,256
Charge-offs	—		—		(245)		—		—		(67)		(312)
Recoveries	1		2		57		—		—		2		62
(Credit) provision for loan losses	(2,263)		(202)		843		343		(34)		92		(1,221)
Ending balance, March 31, 2022	$	16,572	$	2,339	$	4,857	$	6,476	$	1,435	$	106	$	31,785
At or For The Year Ended December 31, 2022
Beginning balance, December 31, 2021	$	18,834	$	2,539	$	4,202	$	6,133	$	1,469	$	79	$	33,256
Charge-offs	—		—		(1,042)		(66)		—		(134)		(1,242)
Recoveries	3		2		379		—		87		7		478
(Credit) provision for loan losses	(1,541)		(179)		1,907		3,022		669		552		4,430
Ending balance, December 31, 2022	$	17,296	$	2,362	$	5,446	$	9,089	$	2,225	$	504	$	36,922

Credit Risk Exposure Indicators by Portfolio Segment

Based on the most recent analysis performed, the risk category of loans by portfolio segment by vintage was as follows as of the dates indicated:

(In thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of and for the period ended March 31, 2023
Commercial real estate - non-owner-occupied
Risk rating
Pass (Grades 1-6)	$	32,495	$	348,906	$	292,459	$	158,884	$	123,148	$	343,942	$	—	$	—	$	1,299,834
Special mention (Grade 7)	—		—		166		356		252		388		—		—		1,162
Substandard (Grade 8)	—		177		123		1,255		200		26,042		—		—		27,797
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - non-owner-occupied	$	32,495	$	349,083	$	292,748	$	160,495	$	123,600	$	370,372	$	—	$	—	$	1,328,793
Gross charge-offs for the three months ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate - owner-occupied
Risk rating
Pass (Grades 1-6)	$	17,730	$	54,516	$	79,464	$	27,889	$	21,962	$	106,937	$	—	$	—	$	308,498
Special mention (Grade 7)	—		—		—		—		—		404		—		—		404
Substandard (Grade 8)	—		8		2,228		—		19,993		6,693		—		—		28,922
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - owner occupied	$	17,730	$	54,524	$	81,692	$	27,889	$	41,955	$	114,034	$	—	$	—	$	337,824
Gross charge-offs for the three months ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial
Risk rating
Pass (Grades 1-6)	$	13,993	$	68,567	$	66,044	$	30,359	$	31,455	$	45,211	$	130,278	$	30,254	$	416,161
Special mention (Grade 7)	—		—		—		87		114		180		200		10		591
Substandard (Grade 8)	192		229		88		134		267		1,906		692		839		4,347
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial	$	14,185	$	68,796	$	66,132	$	30,580	$	31,836	$	47,297	$	131,170	$	31,103	$	421,099
Gross charge-offs for the three months ended	$	—	$	—	$	51	$	9	$	—	$	172	$	20	$	60	$	312
Residential Real Estate
Risk rating
Pass (Grades 1-6)	$	47,241	$	544,518	$	572,505	$	236,212	$	77,364	$	252,040	$	347	$	—	$	1,730,227
Special mention (Grade 7)	—		—		—		—		—		—		—		—		—
Substandard (Grade 8)	—		—		—		—		92		2,828		—		—		2,920
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total residential real estate	$	47,241	$	544,518	$	572,505	$	236,212	$	77,456	$	254,868	$	347	$	—	$	1,733,147
Gross charge-offs for the three months ended	$	—	$	—	$	—	$	—	$	—	$	18	$	—	$	—	$	18
Home equity
Risk rating
Performing	$	3,926	$	25,674	$	564	$	338	$	4,655	$	15,125	$	170,075	$	11,717	$	232,074
Non-performing	—		—		—		—		—		12		347		79		438
Total home equity	$	3,926	$	25,674	$	564	$	338	$	4,655	$	15,137	$	170,422	$	11,796	$	232,512
Gross charge-offs for the three months ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer
Risk rating
Performing	$	1,441	$	7,204	$	3,359	$	1,455	$	826	$	2,662	$	2,786	$	—	$	19,733
Non-performing	—		—		—		—		—		—		—		—		—
Total consumer	$	1,441	$	7,204	$	3,359	$	1,455	$	826	$	2,662	$	2,786	$	—	$	19,733
Gross charge-offs for the three months ended	$	—	$	—	$	—	$	—	$	—	$	4	$	—	$	—	$	4

(In thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2022
Commercial real estate - non-owner-occupied
Risk rating
Pass (Grades 1-6)	$	339,171	$	287,749	$	160,621	$	125,029	$	108,823	$	242,024	$	—	$	—	$	1,263,417
Special mention (Grade 7)	—		167		364		259		75		321		—		—		1,186
Substandard (Grade 8)	—		127		1,306		203		7,798		18,406		—		—		27,840
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - non-owner-occupied	$	339,171	$	288,043	$	162,291	$	125,491	$	116,696	$	260,751	$	—	$	—	$	1,292,443
Commercial real estate - owner-occupied
Risk rating
Pass (Grades 1-6)	$	60,127	$	80,781	$	28,378	$	23,381	$	39,554	$	70,568	$	—	$	—	$	302,789
Special mention (Grade 7)	—		2,053		—		19,992		—		411		—		—		22,456
Substandard (Grade 8)	17		—		—		—		3,266		3,966		—		—		7,249
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - owner occupied	$	60,144	$	82,834	$	28,378	$	43,373	$	42,820	$	74,945	$	—	$	—	$	332,494
Commercial
Risk rating
Pass (Grades 1-6)	$	73,537	$	70,110	$	32,272	$	33,491	$	22,271	$	26,245	$	135,157	$	30,191	$	423,274
Special mention (Grade 7)	—		—		93		141		70		189		1,196		12		1,701
Substandard (Grade 8)	149		52		133		216		846		1,524		50		2,186		5,156
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial	$	73,686	$	70,162	$	32,498	$	33,848	$	23,187	$	27,958	$	136,403	$	32,389	$	430,131
Residential Real Estate
Risk rating
Pass (Grades 1-6)	$	533,035	$	579,216	$	244,691	$	79,492	$	50,214	$	210,262	$	340	$	—	$	1,697,250
Special mention (Grade 7)	—		—		—		—		—		23		—		—		23
Substandard (Grade 8)	—		—		—		—		163		2,830		—		—		2,993
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total residential real estate	$	533,035	$	579,216	$	244,691	$	79,492	$	50,377	$	213,115	$	340	$	—	$	1,700,266
Home equity
Risk rating
Performing	$	26,712	$	693	$	341	$	4,842	$	7,730	$	8,551	$	173,338	$	11,735	$	233,942
Non-performing	—		—		—		—		—		27		377		82		486
Total home equity	$	26,712	$	693	$	341	$	4,842	$	7,730	$	8,578	$	173,715	$	11,817	$	234,428
Consumer
Risk rating
Performing	$	8,009	$	3,816	$	1,702	$	1,188	$	345	$	2,462	$	3,069	$	—	$	20,591
Non-performing	—		—		—		—		—		—		—		—		—
Total consumer	$	8,009	$	3,816	$	1,702	$	1,188	$	345	$	2,462	$	3,069	$	—	$	20,591

Loan Aging Analysis by Portfolio Segment

The following is a loan aging analysis by portfolio segment (including loans past due over 90 days and non-accrual loans) and loans past due over 90 days and accruing as of the following dates:

(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans Outstanding		Loans > 90 Days Past Due and Accruing
March 31, 2023
Commercial real estate - non-owner-occupied	$	34	$	—	$	10	$	44	$	1,328,749	$	1,328,793	$	—
Commercial real estate - owner-occupied	77		—		47		124		337,700		337,824
Commercial	965		79		465		1,509		419,590		421,099		—
Residential real estate	283		194		459		936		1,732,211		1,733,147		—
Home equity	552		106		151		809		231,703		232,512		—
Consumer	32		29		—		61		19,672		19,733		—
Total	$	1,943	$	408	$	1,132	$	3,483	$	4,069,625	$	4,073,108	$	—
December 31, 2022
Commercial real estate - non-owner-occupied	$	267	$	—	$	11	$	278	$	1,292,165	$	1,292,443	$	—
Commercial real estate - owner-occupied	55		—		47		102		332,392		332,494		—
Commercial	667		134		640		1,441		428,690		430,131		—
Residential real estate	852		186		524		1,562		1,698,704		1,700,266		—
Home equity	357		—		171		528		233,900		234,428		—
Consumer	23		11		—		34		20,557		20,591		—
Total	$	2,221	$	331	$	1,393	$	3,945	$	4,006,408	$	4,010,353	$	—

Financing Receivable, Nonaccrual

The following table presents the amortized cost basis of loans on non-accrual status (including non-accruing TDRs prior to adoption of ASU 2022-02) by portfolio segment as of the dates indicated:

	March 31, 2023						December 31, 2022
(In thousands)	Non-Accrual Loans With an Allowance		Non-Accrual Loans Without an Allowance		Total Non-Accrual Loans		Non-Accrual Loans With an Allowance		Non-Accrual Loans Without an Allowance		Total Non-Accrual Loans
Commercial real estate - non-owner-occupied	$	—	$	10	$	10	$	—	$	11	$	11
Commercial real estate - owner-occupied	—		47		47		—		46		46
Commercial	606		142		748		415		300		715
Residential real estate	1,359		356		1,715		1,314		419		1,733
Home equity	377		61		438		421		65		486
Consumer	—		—		—		—		—		—
Total	$	2,342	$	616	$	2,958	$	2,150	$	841	$	2,991

The following table presents the amortized cost basis of collateral-dependent non-accrual loans (including non-accruing TDRs prior to adoption of ASU 2022-02) by portfolio segment and collateral type, as of the dates indicated:

	March 31, 2023						December 31, 2022
	Collateral Type				Total Collateral -Dependent Non-Accrual Loans		Collateral Type				Total Collateral -Dependent Non-Accrual Loans
(In thousands)	Real Estate		General Business Assets				Real Estate		General Business Assets
Residential real estate	$	325	$	—	$	325	$	387	$	—	$	387
Home equity	—		—		—		—		—		—
Total	$	325	$	—	$	325	$	387	$	—	$	387

Troubled Debt Restructuring and Specific Reserve Related to TDRs

The following is a summary of TDRs prior to adoption of ASU 2022-02, by portfolio segment, and the associated specific reserve included within the ACL as of December 31, 2022:

	Number of Contracts	Recorded Investment		Specific Reserve
(In thousands, except number of contracts)	December 31, 2022	December 31, 2022		December 31, 2022
Commercial real estate - owner-occupied	1	$	113	$	50
Commercial	—	—		—
Residential real estate	18	2,208		$	307
Consumer and home equity	3	245		9
Total	22	$	2,566	$	366

Troubled Debt Restructuring

The following represents loan modifications that qualify as TDRs as of December 31, 2022 that occurred during the period indicated:

	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Specific Reserve
(In thousands, except number of contracts)	December 31, 2022	December 31, 2022		December 31, 2022		December 31, 2022
Home equity:
Interest rate concession and payment deferral	—	$	—	$	—	$	—
Maturity concession	1	69		96		—
Total	1	$	69	$	96	$	—

XML

BORROWINGS (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Borrowed Funds Outstanding

The following summarizes the Company's short-term borrowed funds as presented on the consolidated statements of condition as of the dates indicated. The Company did not have any long-term borrowings as of the dates indicated.

(In thousands)	March 31, 2023		December 31, 2022
Short-Term Borrowings:
Customer repurchase agreements	$	196,918	$	196,451
Overnight borrowings	189,400		18,725
FHLBB borrowings	100,000		50,000
Total short-term borrowings	$	486,318	$	265,176

XML

REPURCHASE AGREEMENTS (Tables)

3 Months Ended

Mar. 31, 2023

Banking and Thrift, Other Disclosure [Abstract]

Schedule of Underlying Assets of Repurchase Agreements when Amount of Repurchase Agreements Exceeds 10 Percent of Assets

The table below sets forth information regarding the Company’s repurchase agreements accounted for as secured borrowings and types of collateral as of the dates indicated:

(In thousands)	March 31, 2023		December 31, 2022
Customer Repurchase Agreements(1)(2):
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	$	174,276	$	99,105
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	22,642		94,328
Obligations of states and political subdivisions	—		3,018
Total	$	196,918	$	196,451

(1)    Presented within short-term borrowings on the consolidated statements of condition.

(2)    All customer repurchase agreements mature continuously or overnight for the dates indicated.

XML

COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule Of Contractual And Notional Amounts Of Financial Instruments Table

The following is a summary of the Company's contractual off-balance sheet commitments as of the dates indicated:

(In thousands)	March 31, 2023		December 31, 2022
Commitments to extend credit	$	779,402	$	817,772
Standby letters of credit	6,769		6,801
Total	$	786,171	$	824,573

XML

DERIVATIVES AND HEDGING (Tables)

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Derivative Financial Instruments

The following table presents the fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition as of the dates indicated:

	Derivative Assets					Derivative Liabilities
(Dollars in thousands)	Notional Amount		Location	Fair Value		Notional Amount		Location	Fair Value
March 31, 2023
Derivatives designated as hedging instruments:
Interest rate contracts(1)	$	60,000	Other assets	$	10,996	$	433,000	Accrued interest and other liabilities	$	6,859
Total derivatives designated as hedging instruments				$	10,996				$	6,859
Derivatives not designated as hedging instruments:
Customer loan swaps(1)	$	288,076	Other assets	$	11,479	$	288,076	Accrued interest and other liabilities	$	11,554
Risk participation agreements	21,696		Other assets	—		44,127		Accrued interest and other liabilities	—
Fixed rate mortgage interest rate lock commitments	6,883		Other assets	71		5,843		Accrued interest and other liabilities	43
Forward delivery commitments	2,887		Other assets	32		1,651		Accrued interest and other liabilities	14
Total derivatives not designated as hedging instruments				$	11,582				$	11,611
December 31, 2022
Derivatives designated as hedging instruments:
Interest rate contracts(1)	$	110,000	Other assets	$	13,051	$	133,000	Accrued interest and other liabilities	$	5,515
Total derivatives designated as hedging instruments				$	13,051				$	5,515
Derivatives not designated as hedging instruments:
Customer loan swaps(1)	$	260,130	Other assets	$	14,802	$	345,545	Accrued interest and other liabilities	$	14,850
Risk participation agreements	21,818		Other assets	—		53,704		Accrued interest and other liabilities	—
Fixed rate mortgage interest rate lock commitments	4,493		Other assets	31		9,597		Accrued interest and other liabilities	87
Forward delivery commitments	5,259		Other assets	114		—		Accrued interest and other liabilities	—
Total derivatives not designated as hedging instruments				$	14,947				$	14,937

(1)    Reported fair values include accrued interest receivable and payable.

The following table shows the carrying amount and associated cumulative basis adjustments related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships:

Location in Consolidated Statements of Condition	Carrying Amount of Hedged Assets/(Liabilities)				Cumulative Fair Value Hedging Adjustment in the Carrying Amount of the Hedged Assets/(Liabilities)
(Dollars in thousands)	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
Loans(1)	$	301,552	$	—	$	(1,552)	$	—
Total	$	301,552	$	—	$	(1,552)	$	—

(1)     These amounts include the amortized cost basis of closed portfolios of fixed rate assets used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolio anticipated to be outstanding for the designated hedged period. At March 31, 2023, the amortized cost basis of the closed portfolios used in these hedging relationships was $853.7 million and the amounts of the designated hedged items were $300.0 million.

Schedule of Cash Flow Hedging Instruments, Location

The table below presents the effect of cash flow hedge accounting, before tax, on AOCI for the periods indicated:

(Dollars in thousands)	Amount of Gain (Loss) Recognized in OCI on Derivative		Amount of Gain (Loss) Recognized in OCI Included Component		Amount of Gain (Loss) Recognized in OCI Excluded Component		Location of Gain (Loss) Recognized from AOCI into Income	Amount of Gain (Loss) Reclassified from AOCI into Income		Amount of Gain (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain (Loss) Reclassified from AOCI into Income Excluded Component
For the Three Months Ended March 31, 2023
Interest rate contracts	$	182	$	182	$	—	Interest and fees on loans	$	(717)	$	(717)	$	—
Interest rate contracts	(1)		(1)		—		Interest on deposits	306		306		—
Interest rate contracts	(796)		(796)		—		Interest on borrowings	487		487		—
Interest rate contracts	(934)		(934)		—		Interest on junior subordinated debentures	133		133		—
Total	$	(1,549)	$	(1,549)	$	—		$	209	$	209	$	—
For the Three Months Ended March 31, 2022
Interest rate contracts	$	(3,011)	$	(3,011)	$	—	Interest and fees on loans	$	382	$	382	$	—
Interest rate contracts	3,488		3,488		—		Interest on deposits	(149)		(149)		—
Interest rate contracts	3,158		3,158				Interest on junior subordinated debentures	(351)		(351)
Total	$	3,635	$	3,635	$	—		$	(118)	$	(118)	$	—

The table below presents the effect of fair value and cash flow hedge accounting on the consolidated statements of income for the periods indicated:

	Location and Amount of Gain (Loss) Recognized in Income
	Three Months Ended March 31,
	2023								2022
(Dollars in thousands)	Interest and fees on loans		Interest on deposits		Interest on borrowings		Interest on junior subordinated debentures		Interest and fees on loans		Interest on deposits		Interest on junior subordinated debentures
Total presented on the consolidated statements of income in which the effects of cash flow hedges are recorded	$	45,332	$	15,832	$	2,085	$	528	$	32,035	$	1,833	$	529
Gain (loss) on fair value hedging relationships
Interest rate contracts:
Hedged items	$	1,552	$	—	$	—	$	—	$	—	$	—	$	—
Derivatives designated as hedging instruments	$	(1,077)	$	—	$	—	$	—	$	—	$	—	$	—
Gain (loss) on cash flow hedging relationships
Interest rate contracts:
Amount of gain (loss) reclassified from AOCI into income	$	(717)	$	306	$	487	$	133	$	382	$	(149)	$	(351)
Amount of gain (loss) reclassified from AOCI into income - included component	$	(717)	$	306	$	487	$	133	$	382	$	(149)	$	(351)
Amount of gain (loss) reclassified from AOCI into income - excluded component	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Schedule of Derivatives Not Designated as Hedging Instruments

The table below presents the effect of the Company's derivative financial instruments that are not designated as hedging instruments on the consolidated statements of income for the periods indicated:

	Location of Gain (Loss) Recognized in Income	Amount of Gain (Loss) Recognized in Income
		Three Months Ended March 31,
(Dollars in thousands)		2023		2022
Customer loan swaps	Other expense	$	(27)	$	94
Fixed rate mortgage interest rate lock commitments	Mortgage banking income, net	84		(459)
Forward delivery commitments	Mortgage banking income, net	(96)		166
Total		$	(39)	$	(199)

XML

BALANCE SHEET OFFSETTING (Tables)

3 Months Ended

Mar. 31, 2023

Offsetting [Abstract]

Offsetting Assets

The following table presents the Company's derivative positions and repurchase agreements, and the potential effect of netting arrangements on its financial position, as of the dates indicated:

							Gross Amount Not Offset in the Consolidated Statements of Condition
(Dollars in thousands)	Gross Amount Recognized in the Consolidated Statements of Condition		Gross Amount Offset in the Consolidated Statements of Condition		Net Amount Presented in the Consolidated Statements of Condition		Financial Instruments Pledged (Received)(1)		Cash Collateral Pledged (Received)(1)		Net Amount
March 31, 2023
Derivative assets:
Customer loan swaps - commercial customer(2)	$	11,479	$	—	$	11,479	$	—	$	—	$	11,479
Interest rate contracts(3)	10,996		—		10,996		—		(10,889)		107
Total	$	22,475	$	—	$	22,475	$	—	$	(10,889)	$	11,586
Derivative liabilities:
Customer loan swaps - dealer bank(3)	$	11,554	$	—	$	11,554	$	—	$	—	$	11,554
Interest rate contracts(3)	6,859		—		6,859		—		6,859		—
Total	$	18,413	$	—	$	18,413	$	—	$	6,859	$	11,554
Customer repurchase agreements	$	196,918	$	—	$	196,918	$	196,918	$	—	$	—
December 31, 2022
Derivative assets:
Customer loan swaps - dealer bank(3)	$	14,802	$	—	$	14,802	$	—	$	—	$	14,802
Interest rate contracts(3)	13,051		—		13,051		—		(10,915)		2,136
Total	$	27,853	$	—	$	27,853	$	—	$	(10,915)	$	16,938
Derivative liabilities:
Customer loan swaps - commercial customer(2)	$	14,850	$	—	14,850		$	—	$	—	$	14,850
Interest rate contracts(3)	5,515		—		5,515		—		5,515		—
Total	$	20,365	$	—	$	20,365	$	—	$	5,515	$	14,850
Customer repurchase agreements	$	196,451	$	—	$	196,451	$	196,451	$	—	$	—

(1)    The amount presented was the lesser of the amount pledged (received) or the net amount presented in the consolidated statements of condition.

(2)    The Company manages its net exposure on its commercial customer loan swaps by obtaining collateral as part of the normal loan policy and underwriting practices. The Company does not post collateral to its commercial customers as part of its contract..

(3)    Interest rate swap contracts were completed with the same dealer bank. The Company maintains a master netting arrangement with each counterparty and settles collateral on a net basis for all contracts

Offsetting Liabilities

The following table presents the Company's derivative positions and repurchase agreements, and the potential effect of netting arrangements on its financial position, as of the dates indicated:

							Gross Amount Not Offset in the Consolidated Statements of Condition
(Dollars in thousands)	Gross Amount Recognized in the Consolidated Statements of Condition		Gross Amount Offset in the Consolidated Statements of Condition		Net Amount Presented in the Consolidated Statements of Condition		Financial Instruments Pledged (Received)(1)		Cash Collateral Pledged (Received)(1)		Net Amount
March 31, 2023
Derivative assets:
Customer loan swaps - commercial customer(2)	$	11,479	$	—	$	11,479	$	—	$	—	$	11,479
Interest rate contracts(3)	10,996		—		10,996		—		(10,889)		107
Total	$	22,475	$	—	$	22,475	$	—	$	(10,889)	$	11,586
Derivative liabilities:
Customer loan swaps - dealer bank(3)	$	11,554	$	—	$	11,554	$	—	$	—	$	11,554
Interest rate contracts(3)	6,859		—		6,859		—		6,859		—
Total	$	18,413	$	—	$	18,413	$	—	$	6,859	$	11,554
Customer repurchase agreements	$	196,918	$	—	$	196,918	$	196,918	$	—	$	—
December 31, 2022
Derivative assets:
Customer loan swaps - dealer bank(3)	$	14,802	$	—	$	14,802	$	—	$	—	$	14,802
Interest rate contracts(3)	13,051		—		13,051		—		(10,915)		2,136
Total	$	27,853	$	—	$	27,853	$	—	$	(10,915)	$	16,938
Derivative liabilities:
Customer loan swaps - commercial customer(2)	$	14,850	$	—	14,850		$	—	$	—	$	14,850
Interest rate contracts(3)	5,515		—		5,515		—		5,515		—
Total	$	20,365	$	—	$	20,365	$	—	$	5,515	$	14,850
Customer repurchase agreements	$	196,451	$	—	$	196,451	$	196,451	$	—	$	—

(1)    The amount presented was the lesser of the amount pledged (received) or the net amount presented in the consolidated statements of condition.

(2)    The Company manages its net exposure on its commercial customer loan swaps by obtaining collateral as part of the normal loan policy and underwriting practices. The Company does not post collateral to its commercial customers as part of its contract..

(3)    Interest rate swap contracts were completed with the same dealer bank. The Company maintains a master netting arrangement with each counterparty and settles collateral on a net basis for all contracts

XML

REGULATORY CAPITAL REQUIREMENTS (Tables)

3 Months Ended

Mar. 31, 2023

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

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations

The following table presents the Company and Bank's regulatory capital ratios at the periods indicated:

	March 31, 2023				Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer		Minimum Regulatory Provision to Be "Well Capitalized"		December 31, 2022				Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer		Minimum Regulatory Provision to Be "Well Capitalized"
(Dollars in thousands)	Amount		Ratio						Amount		Ratio
Camden National Corporation:
Total risk-based capital ratio	$	564,967	13.95	%	10.50	%	10.00	%	$	557,571	13.80	%	10.50	%	10.00	%
Tier 1 risk-based capital ratio	524,843		12.96	%	8.50	%	6.00	%	517,385		12.81	%	8.50	%	6.00	%
Common equity Tier 1 risk-based capital ratio(1)	481,843		11.90	%	7.00	%	N/A		474,385		11.74	%	7.00	%	N/A
Tier 1 leverage capital ratio(1)	524,843		9.24	%	4.00	%	N/A		517,385		9.22	%	4.00	%	N/A
Camden National Bank:
Total risk-based capital ratio	$	532,658	13.18	%	10.50	%	10.00	%	$	525,346	13.03	%	10.50	%	10.00	%
Tier 1 risk-based capital ratio	492,534		12.19	%	8.50	%	8.00	%	485,160		12.03	%	8.50	%	8.00	%
Common equity Tier 1 risk-based capital ratio	492,534		12.19	%	7.00	%	6.50	%	485,160		12.03	%	7.00	%	6.50	%
Tier 1 leverage capital ratio	492,534		8.68	%	4.00	%	5.00	%	485,160		8.65	%	4.00	%	5.00	%

(1)    “Minimum Regulatory Provisions to Be ‘Well Capitalized’” are not formally defined under applicable banking regulations for bank holding companies.

XML

OTHER COMPREHENSIVE INCOME (LOSS) OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

Schedule of of Comprehensive Income (Loss)

The following tables present a reconciliation of the changes in the components of other comprehensive income and loss for the periods indicated, including the amount of tax (expense) benefit allocated to each component:

	For the Three Months Ended
	March 31, 2023						March 31, 2022
(In thousands)	Pre-Tax Amount		Tax (Expense) Benefit		After-Tax Amount		Pre-Tax Amount		Tax (Expense) Benefit		After-Tax Amount
Debt Securities:
Change in fair value	$	9,885	$	(2,125)	$	7,760	$	(92,753)	$	19,942	$	(72,811)
Less: reclassification adjustment for amortization of securities transferred from AFS to HTM(1)	(1,699)		365		(1,334)		—		—		—
Net change in fair value	11,584		(2,490)		9,094		(92,753)		19,942		(72,811)
Cash Flow Hedges:
Change in fair value	(3,109)		668		(2,441)		3,635		(782)		2,853
Less: reclassified AOCI gain (loss) into interest expense(2)	926		(199)		727		(500)		108		(392)
Less: reclassified AOCI (loss) gain into interest income(3)	(717)		154		(563)		382		(82)		300
Net change in fair value	(3,318)		713		(2,605)		3,753		(808)		2,945
Postretirement Plans:
Amortization of settlement recognition of net loss and prior service credit(4)	(6)		1		(5)		232		(50)		182
Other comprehensive income (loss)	$	8,260	$	(1,776)	$	6,484	$	(88,768)	$	19,084	$	(69,684)

(1)    Reclassified into taxable interest on investments and/or nontaxable interest on investments in the consolidated statements of income. Refer to Note 3 of the consolidated financial statements for further details.

(2)    Reclassified into interest on deposits, borrowings and/or subordinated debentures on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.

(3)    Reclassified into interest and fees on loans on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.

(4)    Reclassified into other expenses on the consolidated statements of income. Refer to Note 13 of the consolidated financial statements for further details.

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table presents the changes in each component of AOCI, after tax, for the periods indicated:

(In thousands)	Net Unrealized Gains (Losses) on Debt Securities(1)		Net Unrealized (Losses) Gains on Cash Flow Hedges(1)		Defined Benefit Postretirement Plans(1)		AOCI(1)
Balance at December 31, 2022	$	(131,539)	$	5,891	$	(307)	$	(125,955)
Other comprehensive income (loss) before reclassifications	7,760		(2,441)		—		5,319
Less: Amounts reclassified from AOCI	(1,334)		164		5		(1,165)
Other comprehensive income (loss)	9,094		(2,605)		(5)		6,484
Balance at March 31, 2023	$	(122,445)	$	3,286	$	(312)	$	(119,471)
Balance at December 31, 2021	$	(1,173)	$	(1,779)	$	(3,277)	$	(6,229)
Other comprehensive (loss) income before reclassifications	(72,811)		2,853		—		(69,958)
Less: Amounts reclassified from AOCI	—		(92)		(182)		(274)
Other comprehensive (loss) income	(72,811)		2,945		182		(69,684)
Balance at March 31, 2022	$	(73,984)	$	1,166	$	(3,095)	$	(75,913)

(1)    All amounts are net of tax

XML

REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table presents the revenue streams within the scope of ASC 606 for the periods indicated:

	Location on Consolidated Statements of Income	Three Months Ended March 31,
(In thousands)		2023		2022
Debit card interchange income	Debit card income	$	2,938	$	2,924
Services charges on deposit accounts	Service charges on deposit accounts	1,762		1,833
Fiduciary services income	Income from fiduciary services	1,600		1,631
Investment program income	Brokerage and insurance commissions	1,093		994
Other non-interest income	Other income	422		400
Total non-interest income within the scope of ASC 606		7,815		7,782
Total non-interest income not in scope of ASC 606		2,051		2,043
Total non-interest income		$	9,866	$	9,825

XML

EMPLOYEE BENEFIT PLANS (Tables)

3 Months Ended

Mar. 31, 2023

Retirement Benefits [Abstract]

Components of Net Period Benefit Cost

The components of net periodic pension and postretirement benefit costs were as follows for the following periods:

Supplemental Executive Retirement Plan:

(In thousands)	Location on Consolidated Statements of Income	Three Months Ended March 31,
Net periodic pension cost		2023		2022
Service cost	Salaries and employee benefits	$	70	$	133
Interest cost	Other expenses	189		115
Recognized net actuarial loss	Other expenses	—		216
Total		$	259	$	464

Other Postretirement Benefit Plan:

(In thousands)	Location on Consolidated Statements of Income	Three Months Ended March 31,
Net periodic postretirement benefit cost		2023		2022
Service cost	Salaries and employee benefits	$	3	$	5
Interest cost	Other expenses	40		28
Recognized net actuarial (gain) loss	Other expenses	(1)		22
Amortization of prior service credit	Other expenses	(6)		(6)
Total		$	36	$	49

XML

EPS (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Analysis of Basic and Diluted Earnings Per Share

The following is an analysis of basic and diluted EPS, reflecting the application of the two-class method, as described below:

	Three Months Ended March 31,
(In thousands, except number of shares and per share data)	2023		2022
Net income	$	12,727	$	16,795
Dividends and undistributed earnings allocated to participating securities(1)	(25)		(43)
Net income available to common shareholders	$	12,702	$	16,752
Weighted-average common shares outstanding for basic EPS	14,573,122		14,741,271
Dilutive effect of stock-based awards(2)	58,420		81,061
Weighted-average common and potential common shares for diluted EPS	14,631,542		14,822,332
Earnings per common share:
Basic EPS	$	0.87	$	1.14
Diluted EPS	$	0.87	$	1.13
Awards excluded from the calculation of diluted EPS(3):
Performance-based awards	1,141		1,027

(1)    Represents dividends paid and undistributed earnings allocated to non-vested stock-based awards that contain non-forfeitable rights to dividends.

(2)    Represents the assumed dilutive effect of unexercised and/or unvested stock options, restricted shares, restricted share units and contingently issuable performance-based awards utilizing the treasury stock method.

(3)    Represents stock-based awards not included in the computation of potential common shares for purposes of calculating diluted EPS as the exercise prices were greater than the average market price of the Company's common stock, and, therefore, are considered anti-dilutive.

XML

FAIR VALUE MEASUREMENT AND DISCLOSURE (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, for the dates indicated:

(In thousands)	Fair Value		Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)
March 31, 2023
Financial assets:
Trading securities	$	3,971	$	3,971	$	—	$	—
AFS debt securities:
Obligations of states and political subdivisions	49,051		—		49,051		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	507,831		—		507,831		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	106,233		—		106,233		—
Subordinated corporate bonds	23,308		—		23,308		—
Loans held for sale	4,562		—		4,562		—
Customer loan swaps	11,479		—		11,479		—
Interest rate contracts	10,996		—		10,996		—
Fixed rate mortgage interest rate lock commitments	71		—		71		—
Forward delivery commitments	32		—		32		—
Financial liabilities:
Deferred compensation	$	3,971	$	3,971	$	—	$	—
Customer loan swaps	11,554		—		11,554		—
Interest rate contracts	6,859		—		6,859		—
Fixed rate mortgage interest rate lock commitments	43		—		43		—
Forward delivery commitments	14		—		14		—
December 31, 2022
Financial assets:
Trading securities	$	3,990	$	3,990	$	—	$	—
AFS debt securities:
Obligations of states and political subdivisions	49,226		—		49,226		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	514,019		—		514,019		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	109,347		—		109,347		—
Subordinated corporate bonds	23,283		—		23,283		—
Loans held for sale	5,197		—		5,197		—
Customer loan swaps	14,802		—		14,802		—
Interest rate contracts	13,051		—		13,051		—
Fixed rate mortgage interest rate lock commitments	31		—		31		—
Forward delivery commitments	114		—		114		—
Financial liabilities:
Deferred compensation	$	3,990	$	3,990	$	—	$	—
Customer loan swaps	14,850		—		14,850		—
Interest rate contracts	5,515		—		5,515		—
Fixed rate mortgage interest rate lock commitments	87		—		87		—

Valuation Methodology and Unobservable Inputs for Level Three Assets Measured at Fair Value on Non Recurring Basis

Carrying Amounts and Estimated Fair Value for Financial Instrument Assets and Liabilities

The estimated fair values and related carrying amounts for assets and liabilities for which fair value is only disclosed are shown below as of the dates indicated:

	Carrying Amount		Fair Value		Readily Available Market Prices (Level 1)		Observable Market Prices (Level 2)		Company Determined Market Prices (Level 3)
March 31, 2023
Financial assets:
HTM debt securities	$	540,074	$	510,999	$	—	$	510,999	$	—
Commercial real estate loans(1)(2)	1,647,823		1,586,974		—		—		1,586,974
Commercial loans(2)	416,518		405,429		—		—		404,847
Residential real estate loans(2)	1,722,335		1,509,387		—		—		1,509,387
Home equity loans(2)	230,072		228,821		—		—		228,821
Consumer loans(2)	19,226		16,993		—		—		16,993
Servicing assets	2,413		4,187		—		—		4,187
Financial liabilities:
Time deposits	$	360,103	$	351,795	$	—	$	351,795	$	—
Short-term borrowings	486,318		485,505		—		485,505		—
Subordinated debentures	44,331		31,918		—		31,918		—
December 31, 2022
Financial assets:
HTM debt securities	$	546,583	$	506,193	$	—	$	506,193	$	—
Commercial real estate loans(1)(2)	1,605,279		1,550,379		—		—		1,550,379
Commercial loans(2)	424,685		414,353		—		—		414,353
Residential real estate loans(2)	1,691,177		1,494,707		—		—		1,494,707
Home equity loans(2)	232,203		237,967		—		—		237,967
Consumer loans(2)	20,087		17,853		—		—		17,853
Servicing assets	2,458		4,412		—		—		4,412
Financial liabilities:
Time deposits	$	300,451	$	291,568	$	—	$	291,568	$	—
Short-term borrowings	265,176		264,779		—		264,779		—
Subordinated debentures	44,331		31,032		—		31,032		—

(1)    Commercial real estate loan includes non-owner-occupied and owner-occupied properties.

(2)    The presented carrying amount is net of the allocated ACL on loans.

XML

INVESTMENTS (Narrative) (Detail) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Jun. 30, 2022	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Schedule of Investments [Line Items]
Trading securities		$ 3,971		$ 3,990
AFS debt securities, allowance		0		0
Net unrealized loss on debt securities, net of tax		71,600		79,400
Deferred tax assets, unrealized losses on available for sale securities		19,600		21,700
Provision for credit losses, HTM debt securities		1,800	$ 0
Write off, accrued interest, HTM debt securities		8
HTM debt securities, allowance		0		0
HTM debt securities, excluding accrued interest from amortized cost		1,500		1,700
Asset Pledged as Collateral
Schedule of Investments [Line Items]
AFS and HTM debt securities, amortized cost		630,200		821,900
AFS and HTM debt securities, fair value		560,300		726,500
Available-for-sale Securities
Schedule of Investments [Line Items]
Interest receivable		2,000		1,900
Transferred Securities
Schedule of Investments [Line Items]
AFS debt securities transferred to HTM, fair value	$ 520,300
AFS debt securities, transfer, unrealized loss	$ 72,100
Net unrealized loss on debt securities, net of tax		(50,900)		(52,200)
Deferred tax assets, unrealized losses on available for sale securities		$ 13,900		$ 14,300

XML

INVESTMENTS (Summary of Amortized Costs and Estimated Fair Values of Available-For-Sale Securities) (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Abstract]
Amortized Cost, Total	$ 777,621	$ 796,960
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	686,423	695,875
Obligations of states and political subdivisions
Debt Securities, Available-for-sale [Abstract]
Amortized Cost, Total	49,142	49,678
Unrealized Gains	41	11
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax	132	463
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	49,051	49,226
MBS issued or guaranteed by U.S. government-sponsored enterprises
Debt Securities, Available-for-sale [Abstract]
Amortized Cost, Total	585,249	598,845
Unrealized Gains	214	131
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax	77,632	84,957
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	507,831	514,019
CMO issued or guaranteed by U.S. government-sponsored enterprises
Debt Securities, Available-for-sale [Abstract]
Amortized Cost, Total	117,552	122,760
Unrealized Gains	0	0
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax	11,319	13,413
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	106,233	109,347
Subordinated corporate bonds
Debt Securities, Available-for-sale [Abstract]
Amortized Cost, Total	25,678	25,677
Unrealized Gains	0	3
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax	2,370	2,397
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	23,308	23,283
Total AFS debt securities
Debt Securities, Available-for-sale [Abstract]
Amortized Cost, Total	777,621	796,960
Unrealized Gains	255	145
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax	91,453	101,230
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	$ 686,423	$ 695,875

XML

INVESTMENTS (Schedule of Unrealized Gross Losses and Estimated Fair values of Investment Securities) (Details) $ in Thousands	Mar. 31, 2023 USD ($) security	Dec. 31, 2022 USD ($) security
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions | security	302	335
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ 31,146	$ 215,593
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	596	16,957
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	620,101	457,955
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	(90,857)	(84,273)
Debt Securities, Available-for-sale, Unrealized Loss Position, Total	651,247	673,548
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss	$ 91,453	$ 101,230
Obligations of states and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions | security	54	83
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ 19,151	$ 42,276
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	48	463
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	10,384	0
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	(84)	0
Debt Securities, Available-for-sale, Unrealized Loss Position, Total	29,535	42,276
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss	$ 132	$ 463
MBS issued or guaranteed by U.S. government-sponsored enterprises
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions | security	172	175
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ 3,310	$ 118,290
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	80	11,521
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	488,861	381,355
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	(77,552)	(73,436)
Debt Securities, Available-for-sale, Unrealized Loss Position, Total	492,171	499,645
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss	$ 77,632	$ 84,957
CMO issued or guaranteed by U.S. government-sponsored enterprises
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions | security	62	64
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ 2,506	$ 47,340
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	56	4,589
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	103,727	62,007
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	(11,263)	(8,824)
Debt Securities, Available-for-sale, Unrealized Loss Position, Total	106,233	109,347
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss	$ 11,319	$ 13,413
Subordinated corporate bonds
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions | security	14	13
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ 6,179	$ 7,687
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	412	384
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	17,129	14,593
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	(1,958)	(2,013)
Debt Securities, Available-for-sale, Unrealized Loss Position, Total	23,308	22,280
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss	$ 2,370	$ 2,397

XML

INVESTMENTS (Schedule of Amortized Cost and Estimated Fair Values of Debt Securities by Contractual Maturity) (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Available-for-sale, Amortized Cost
Due in one year or less	$ 1,002
Due after one year through five years	13,612
Due after five years through ten years	60,206
Due after ten years	0
Subtotal	74,820
Mortgage-related securities	702,801
Available-for-sale securities, book value	777,621	$ 796,960
Available-for-sale, Fair Value
Due in one year or less	1,003
Due after one year through five years	12,323
Due after five years through ten years	59,032
Due after ten years	0
Subtotal	72,358
Mortgage-related securities	614,065
Fair value, total	$ 686,423	$ 695,875

XML

INVESTMENTS (Summary of Amortized Cost and Fair Value of Held to Maturity Securities) (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Schedule of Investments [Line Items]
Held-to-maturity securities, at amortized cost	$ 540,074	$ 546,583
Unrealized Gains	2,290	763
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss	(31,365)	(41,153)
Held-to-maturity securities, fair value	510,999	506,193
Obligations of U.S. government-sponsored enterprises
Schedule of Investments [Line Items]
Held-to-maturity securities, at amortized cost	7,491	7,457
Unrealized Gains	0	0
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss	(507)	(777)
Held-to-maturity securities, fair value	6,984	6,680
Debt Securities, Held-to-Maturity, Amortized Cost, Unamortized Unrealized Loss	1,100	1,100
Obligations of states and political subdivisions
Schedule of Investments [Line Items]
Held-to-maturity securities, at amortized cost	56,049	55,978
Unrealized Gains	1,683	431
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss	(760)	(1,610)
Held-to-maturity securities, fair value	56,972	54,799
Debt Securities, Held-to-Maturity, Amortized Cost, Unamortized Unrealized Loss	6,000	6,100
MBS issued or guaranteed by U.S. government-sponsored enterprises
Schedule of Investments [Line Items]
Held-to-maturity securities, at amortized cost	314,589	317,406
Unrealized Gains	0	0
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss	(18,932)	(24,766)
Held-to-maturity securities, fair value	295,657	292,640
Debt Securities, Held-to-Maturity, Amortized Cost, Unamortized Unrealized Loss	37,400	38,400
CMO issued or guaranteed by U.S. government-sponsored enterprises
Schedule of Investments [Line Items]
Held-to-maturity securities, at amortized cost	143,030	145,069
Unrealized Gains	0	0
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss	(10,628)	(13,724)
Held-to-maturity securities, fair value	132,402	131,345
Debt Securities, Held-to-Maturity, Amortized Cost, Unamortized Unrealized Loss	20,100	20,700
Subordinated corporate bonds
Schedule of Investments [Line Items]
Held-to-maturity securities, at amortized cost	18,915	20,673
Unrealized Gains	607	332
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss	(538)	(276)
Held-to-maturity securities, fair value	18,984	20,729
Debt Securities, Held-to-Maturity, Amortized Cost, Unamortized Unrealized Loss	$ 108	$ 117

XML

INVESTMENTS (Amortized Cost and Fair Values of HTM Securities by Contractual Maturity) (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Held-to-maturity, Amortized Cost
Due in one year or less	$ 0
Due after one year through five years	1,285
Due after five years through ten years	20,527
Due after ten years	60,643
Due in one year or less	82,939
Debt Securities, Held-to-Maturity, Amortized Cost, after Allowance for Credit Loss, Maturity, Allocated and Single Maturity Date	82,455
Debt Securities, Held-to-Maturity, Amortized Cost, after Allowance for Credit Loss, Maturity, without Single Maturity Date	457,619
Debt Securities, Held-to-maturity, Maturity, without Single Maturity Date, Fair Value	428,060
Amortized Cost	540,074	$ 546,583
Held-to-maturity, Fair Value
Due in one year or less	0
Due after one year through five years	1,272
Due after five years through ten years	19,720
Due after ten years	61,947
Fair value, total	$ 510,999	$ 506,193

XML

INVESTMENTS (Schedule of Amortized Cost and Fair Value of Other Investments) (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]
FHLBB	$ 14,040	$ 7,339
FRB	5,374	5,374
Other Investments, Amortized Cost	$ 19,414	$ 12,713

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Narrative) (Details) $ in Thousands	3 Months Ended		6 Months Ended	12 Months Ended
	Mar. 31, 2023 USD ($) loan	Mar. 31, 2022 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($) loan	Dec. 31, 2021 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
SBA PPP Loans, Originations, Number of Contracts Outstanding | loan	5			5
Loans and Leases Receivable, Related Parties, Description	At March 31, 2023 and December 31, 2022, outstanding loans to certain officers, directors and their associated companies were less than 5% of the Company's shareholders' equity.			At March 31, 2023 and December 31, 2022, outstanding loans to certain officers, directors and their associated companies were less than 5% of the Company's shareholders' equity.
Proceeds from the sale of mortgage loans	$ 35,501	$ 47,771
Gain on sale of mortgage loans	(384)	(1,132)
Loans held for sale, at fair value (book value of $4,539 and $5,259, respectively)	4,562			$ 5,197
Allowance for Loan and Lease Losses, Period Increase (Decrease)	200
Allowance for credit losses	37,134	31,785		36,922	$ 33,256
(Credit) provision for loan losses	$ 439	(1,221)	$ 4,430
Other industry exposures	0
Non-Accrual Loans	$ 2,958			2,991
Loans outstanding	4,073,108			4,010,353
Interest lost on nonaccrual loans	25	46
Loans and Leases Receivable, Excluded Accrued Interest from Amortized Cost	11,000			10,300
Recorded Investment				$ 2,566
Loans modified | loan				0
FHLB advances, general debt obligations, pledged collateral	1,800,000			$ 1,800,000
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	1,733,147			1,700,266
Allowance for credit losses	10,812	6,476		9,089	6,133
(Credit) provision for loan losses	1,737	343	3,022
Non-Accrual Loans	1,715			1,733
Loans outstanding	1,733,147			1,700,266
Mortgage Loans in Process of Foreclosure, Amount	450			481
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	421,099			430,131
Allowance for credit losses	4,581	4,857		5,446	4,202
(Credit) provision for loan losses	(652)	843	1,907
Non-Accrual Loans	748			715
Loans outstanding	421,099			430,131
Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	232,512			234,428
Allowance for credit losses	2,440	1,435		2,225	1,469
(Credit) provision for loan losses	215	(34)	669
Non-Accrual Loans	438			486
Loans outstanding	232,512			234,428
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	19,733			20,591
Allowance for credit losses	507	106		504	$ 79
(Credit) provision for loan losses	4	92	$ 552
Non-Accrual Loans	0			0
Loans outstanding	19,733			20,591
Fixed Rate Residential Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Proceeds from the sale of mortgage loans	35,100	46,600
Gain on sale of mortgage loans	(384)	(1,100)
Loans held for sale, at fair value (book value of $4,539 and $5,259, respectively)	4,500			5,300
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	421,099			430,131
Recorded Investment				0
Financing Receivable, Year One, Originated, Current Fiscal Year	14,185			73,686
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	68,796			70,162
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	66,132			32,498
SBA PPP Portfolio
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	583			648
Nonoperating Income (Expense) | Fixed Rate Residential Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gain on sale of mortgage loans	85	142
Unrealized gain (loss) on loans held for sale	$ 23	$ (62)
Non-Residential Building Operators Industry Sector | Loan Concentration Risk | Total Loan Portfolio
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration risk (percentage)	13.00%
Non-Residential Building Operators Industry Sector | Loan Concentration Risk | Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration risk (percentage)	32.00%
Residential Building Operators Industry Sector | Loan Concentration Risk | Total Loan Portfolio
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration risk (percentage)	12.00%
Residential Building Operators Industry Sector | Loan Concentration Risk | Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration risk (percentage)	28.00%
Substandard [Member] | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 4,347			5,156
Financing Receivable, Year One, Originated, Current Fiscal Year	192			149
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	229			52
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	88			133
Pass [Member] | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	416,161			423,274
Financing Receivable, Year One, Originated, Current Fiscal Year	13,993			73,537
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	68,567			70,110
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	$ 66,044			32,272
Performing Financial Instruments [Member] | Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment				2,100
Nonperforming Financial Instruments [Member] | Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment				$ 452

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Composition of Loan Portfolio) (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Net of Deferred Income	$ 4,073,108	$ 4,010,353
Commercial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	2,087,716	2,055,068
Commercial real estate - non-owner-occupied
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	1,328,793	1,292,443
Commercial real estate - owner-occupied
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	337,824	332,494
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	421,099	430,131
Retail Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	1,985,392	1,955,285
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	1,733,147	1,700,266
Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	232,512	234,428
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 19,733	$ 20,591

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Unamortized fair value mark and costs) (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Receivables [Abstract]
Net Unamortized fair Value Mark (Discount) on Loans	$ (279)	$ (313)
Loans and Leases Receivable, Deferred Income	6,944	6,890
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums	$ 6,665	$ 6,577

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Activity in Allowance for Credit Losses on Loans by Portfolio Segment) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Jun. 30, 2022
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning Balance	$ 36,922	$ 33,256	$ 33,256
Charge-offs	(334)	(312)	(1,242)
Recoveries	107	62	478
(Credit) provision for loan losses	439	(1,221)	4,430
Ending Balance	37,134	31,785
Commercial real estate - non-owner-occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning Balance	17,296	18,834	18,834
Charge-offs	0	0	0
Recoveries	1	1	3
(Credit) provision for loan losses	(973)	(2,263)	(1,541)
Ending Balance	16,324	16,572
Commercial real estate - owner-occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning Balance	2,362	2,539	2,539
Charge-offs	0	0	0
Recoveries	0	2	2
(Credit) provision for loan losses	108	(202)	(179)
Ending Balance	2,470	2,339
Commercial
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning Balance	5,446	4,202	4,202
Charge-offs	(312)	(245)	(1,042)
Recoveries	99	57	379
(Credit) provision for loan losses	(652)	843	1,907
Ending Balance	4,581	4,857
Residential real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning Balance	9,089	6,133	6,133
Charge-offs	(18)	0	(66)
Recoveries	4	0	0
(Credit) provision for loan losses	1,737	343	3,022
Ending Balance	10,812	6,476
Home equity
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning Balance	2,225	1,469	1,469
Charge-offs	0	0	0
Recoveries	0	0	87
(Credit) provision for loan losses	215	(34)	669
Ending Balance	2,440	1,435
Consumer
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning Balance	504	79	79
Charge-offs	(4)	(67)	(134)
Recoveries	3	2	7
(Credit) provision for loan losses	4	92	$ 552
Ending Balance	$ 507	$ 106

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Credit Quality and Origination by Portfolio Segment Analysis) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Jun. 30, 2022	Dec. 31, 2022
Gross charge-offs for the three months ended
Charge-offs	$ 334	$ 312	$ 1,242
Commercial real estate - non-owner-occupied
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	32,495			$ 339,171
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	349,083			288,043
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	292,748			162,291
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	160,495			125,491
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	123,600			116,696
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	370,372			260,751
Financing Receivable, Revolving	0			0
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	1,328,793			1,292,443
Gross charge-offs for the three months ended
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff	0
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff	0
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Revolving, Writeoff	0
Financing Receivable, Revolving, Converted to Term Loan, Writeoff	0
Charge-offs	0
Commercial real estate - non-owner-occupied | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	32,495			339,171
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	348,906			287,749
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	292,459			160,621
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	158,884			125,029
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	123,148			108,823
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	343,942			242,024
Financing Receivable, Revolving	0			0
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	1,299,834			1,263,417
Commercial real estate - non-owner-occupied | Special Mention [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0			167
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	166			364
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	356			259
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	252			75
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	388			321
Financing Receivable, Revolving	0			0
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	1,162			1,186
Commercial real estate - non-owner-occupied | Substandard [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	177			127
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	123			1,306
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	1,255			203
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	200			7,798
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	26,042			18,406
Financing Receivable, Revolving	0			0
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	27,797			27,840
Commercial real estate - non-owner-occupied | Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0			0
Financing Receivable, Revolving	0			0
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	0			0
Commercial real estate - owner-occupied
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	17,730			60,144
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	54,524			82,834
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	81,692			28,378
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	27,889			43,373
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	41,955			42,820
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	114,034			74,945
Financing Receivable, Revolving	0			0
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	337,824			332,494
Gross charge-offs for the three months ended
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff	0
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff	0
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Revolving, Writeoff	0
Financing Receivable, Revolving, Converted to Term Loan, Writeoff	0
Charge-offs	0
Commercial real estate - owner-occupied | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	17,730			60,127
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	54,516			80,781
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	79,464			28,378
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	27,889			23,381
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	21,962			39,554
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	106,937			70,568
Financing Receivable, Revolving	0			0
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	308,498			302,789
Commercial real estate - owner-occupied | Special Mention [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0			2,053
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0			19,992
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	404			411
Financing Receivable, Revolving	0			0
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	404			22,456
Commercial real estate - owner-occupied | Substandard [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0			17
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	8			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	2,228			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	19,993			3,266
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	6,693			3,966
Financing Receivable, Revolving	0			0
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	28,922			7,249
Commercial real estate - owner-occupied | Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0			0
Financing Receivable, Revolving	0			0
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	0			0
Commercial
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	14,185			73,686
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	68,796			70,162
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	66,132			32,498
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	30,580			33,848
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	31,836			23,187
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	47,297			27,958
Financing Receivable, Revolving	131,170			136,403
Financing Receivable, Revolving, Converted to Term Loan	31,103			32,389
Gross loans	421,099			430,131
Gross charge-offs for the three months ended
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff	0
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff	0
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff	51
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff	9
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff	172
Financing Receivable, Revolving, Writeoff	20
Financing Receivable, Revolving, Converted to Term Loan, Writeoff	60
Charge-offs	312
Commercial | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	13,993			73,537
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	68,567			70,110
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	66,044			32,272
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	30,359			33,491
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	31,455			22,271
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	45,211			26,245
Financing Receivable, Revolving	130,278			135,157
Financing Receivable, Revolving, Converted to Term Loan	30,254			30,191
Gross loans	416,161			423,274
Commercial | Special Mention [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0			93
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	87			141
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	114			70
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	180			189
Financing Receivable, Revolving	200			1,196
Financing Receivable, Revolving, Converted to Term Loan	10			12
Gross loans	591			1,701
Commercial | Substandard [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	192			149
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	229			52
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	88			133
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	134			216
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	267			846
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	1,906			1,524
Financing Receivable, Revolving	692			50
Financing Receivable, Revolving, Converted to Term Loan	839			2,186
Gross loans	4,347			5,156
Commercial | Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0			0
Financing Receivable, Revolving	0			0
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	0			0
Residential real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	47,241			533,035
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	544,518			579,216
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	572,505			244,691
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	236,212			79,492
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	77,456			50,377
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	254,868			213,115
Financing Receivable, Revolving	347			340
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	1,733,147			1,700,266
Gross charge-offs for the three months ended
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff	0
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff	0
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff	18
Financing Receivable, Revolving, Writeoff	0
Financing Receivable, Revolving, Converted to Term Loan, Writeoff	0
Charge-offs	18
Residential real estate | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	47,241			533,035
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	544,518			579,216
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	572,505			244,691
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	236,212			79,492
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	77,364			50,214
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	252,040			210,262
Financing Receivable, Revolving	347			340
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	1,730,227			1,697,250
Residential real estate | Special Mention [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0			23
Financing Receivable, Revolving	0			0
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	0			23
Residential real estate | Substandard [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	92			163
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	2,828			2,830
Financing Receivable, Revolving	0			0
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	2,920			2,993
Residential real estate | Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0			0
Financing Receivable, Revolving	0			0
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	0			0
Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	3,926			26,712
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	25,674			693
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	564			341
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	338			4,842
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	4,655			7,730
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	15,137			8,578
Financing Receivable, Revolving	170,422			173,715
Financing Receivable, Revolving, Converted to Term Loan	11,796			11,817
Gross loans	232,512			234,428
Gross charge-offs for the three months ended
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff	0
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff	0
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Revolving, Writeoff	0
Financing Receivable, Revolving, Converted to Term Loan, Writeoff	0
Charge-offs	0
Home equity | Performing Financial Instruments [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	3,926			26,712
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	25,674			693
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	564			341
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	338			4,842
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	4,655			7,730
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	15,125			8,551
Financing Receivable, Revolving	170,075			173,338
Financing Receivable, Revolving, Converted to Term Loan	11,717			11,735
Gross loans	232,074			233,942
Home equity | Nonperforming Financial Instruments [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	12			27
Financing Receivable, Revolving	347			377
Financing Receivable, Revolving, Converted to Term Loan	79			82
Gross loans	438			486
Consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	1,441			8,009
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	7,204			3,816
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	3,359			1,702
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	1,455			1,188
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	826			345
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	2,662			2,462
Financing Receivable, Revolving	2,786			3,069
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	19,733			20,591
Gross charge-offs for the three months ended
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff	0
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff	0
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff	4
Financing Receivable, Revolving, Writeoff	0
Financing Receivable, Revolving, Converted to Term Loan, Writeoff	0
Charge-offs	4
Consumer | Performing Financial Instruments [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	1,441			8,009
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	7,204			3,816
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	3,359			1,702
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	1,455			1,188
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	826			345
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	2,662			2,462
Financing Receivable, Revolving	2,786			3,069
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	19,733			20,591
Consumer | Nonperforming Financial Instruments [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0			0
Financing Receivable, Revolving	0			0
Financing Receivable, Revolving, Converted to Term Loan	0			0
Gross loans	$ 0			$ 0

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Loan Aging Analysis by Portfolio Segment) (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Loans outstanding	$ 4,073,108	$ 4,010,353
Loans 90 Days Past Due and Accruing	0	0
Commercial real estate - non-owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	1,328,793	1,292,443
Loans 90 Days Past Due and Accruing	0	0
Gross loans	1,328,793	1,292,443
Commercial real estate - owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	337,824	332,494
Loans 90 Days Past Due and Accruing		0
Gross loans	337,824	332,494
Commercial
Financing Receivable, Past Due [Line Items]
Loans outstanding	421,099	430,131
Loans 90 Days Past Due and Accruing	0	0
Gross loans	421,099	430,131
Residential real estate
Financing Receivable, Past Due [Line Items]
Loans outstanding	1,733,147	1,700,266
Loans 90 Days Past Due and Accruing	0	0
Gross loans	1,733,147	1,700,266
Home equity
Financing Receivable, Past Due [Line Items]
Loans outstanding	232,512	234,428
Loans 90 Days Past Due and Accruing	0	0
Gross loans	232,512	234,428
Consumer
Financing Receivable, Past Due [Line Items]
Loans outstanding	19,733	20,591
Loans 90 Days Past Due and Accruing	0	0
Gross loans	19,733	20,591
Total Past Due
Financing Receivable, Past Due [Line Items]
Loans outstanding	3,483	3,945
Total Past Due | Commercial real estate - non-owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	44	278
Total Past Due | Commercial real estate - owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	124	102
Total Past Due | Commercial
Financing Receivable, Past Due [Line Items]
Loans outstanding	1,509	1,441
Total Past Due | Residential real estate
Financing Receivable, Past Due [Line Items]
Loans outstanding	936	1,562
Total Past Due | Home equity
Financing Receivable, Past Due [Line Items]
Loans outstanding	809	528
Total Past Due | Consumer
Financing Receivable, Past Due [Line Items]
Loans outstanding	61	34
30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans outstanding	1,943	2,221
30-59 Days Past Due | Commercial real estate - non-owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	34	267
30-59 Days Past Due | Commercial real estate - owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	77	55
30-59 Days Past Due | Commercial
Financing Receivable, Past Due [Line Items]
Loans outstanding	965	667
30-59 Days Past Due | Residential real estate
Financing Receivable, Past Due [Line Items]
Loans outstanding	283	852
30-59 Days Past Due | Home equity
Financing Receivable, Past Due [Line Items]
Loans outstanding	552	357
30-59 Days Past Due | Consumer
Financing Receivable, Past Due [Line Items]
Loans outstanding	32	23
60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans outstanding	408	331
60-89 Days Past Due | Commercial real estate - non-owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	0	0
60-89 Days Past Due | Commercial real estate - owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	0	0
60-89 Days Past Due | Commercial
Financing Receivable, Past Due [Line Items]
Loans outstanding	79	134
60-89 Days Past Due | Residential real estate
Financing Receivable, Past Due [Line Items]
Loans outstanding	194	186
60-89 Days Past Due | Home equity
Financing Receivable, Past Due [Line Items]
Loans outstanding	106	0
60-89 Days Past Due | Consumer
Financing Receivable, Past Due [Line Items]
Loans outstanding	29	11
90 Days or Greater Past Due
Financing Receivable, Past Due [Line Items]
Loans outstanding	1,132	1,393
90 Days or Greater Past Due | Commercial real estate - non-owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	10	11
90 Days or Greater Past Due | Commercial real estate - owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	47	47
90 Days or Greater Past Due | Commercial
Financing Receivable, Past Due [Line Items]
Loans outstanding	465	640
90 Days or Greater Past Due | Residential real estate
Financing Receivable, Past Due [Line Items]
Loans outstanding	459	524
90 Days or Greater Past Due | Home equity
Financing Receivable, Past Due [Line Items]
Loans outstanding	151	171
90 Days or Greater Past Due | Consumer
Financing Receivable, Past Due [Line Items]
Loans outstanding	0	0
Current
Financing Receivable, Past Due [Line Items]
Loans outstanding	4,069,625	4,006,408
Current | Commercial real estate - non-owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	1,328,749	1,292,165
Current | Commercial real estate - owner-occupied
Financing Receivable, Past Due [Line Items]
Loans outstanding	337,700	332,392
Current | Commercial
Financing Receivable, Past Due [Line Items]
Loans outstanding	419,590	428,690
Current | Residential real estate
Financing Receivable, Past Due [Line Items]
Loans outstanding	1,732,211	1,698,704
Current | Home equity
Financing Receivable, Past Due [Line Items]
Loans outstanding	231,703	233,900
Current | Consumer
Financing Receivable, Past Due [Line Items]
Loans outstanding	19,672	20,557
Commercial
Financing Receivable, Past Due [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	14,185	73,686
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	68,796	70,162
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	66,132	32,498
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	30,580	33,848
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	31,836	23,187
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	47,297	27,958
Financing Receivable, Revolving	131,170	136,403
Financing Receivable, Revolving, Converted to Term Loan	31,103	32,389
Gross loans	421,099	430,131
Commercial | Doubtful
Financing Receivable, Past Due [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0	0
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	0	0
Residential real estate
Financing Receivable, Past Due [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	47,241	533,035
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	544,518	579,216
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	572,505	244,691
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	236,212	79,492
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	77,456	50,377
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	254,868	213,115
Financing Receivable, Revolving	347	340
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	1,733,147	1,700,266
Residential real estate | Doubtful
Financing Receivable, Past Due [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0	0
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	0	0
Commercial real estate - non-owner-occupied
Financing Receivable, Past Due [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	32,495	339,171
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	349,083	288,043
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	292,748	162,291
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	160,495	125,491
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	123,600	116,696
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	370,372	260,751
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	1,328,793	1,292,443
Commercial real estate - non-owner-occupied | Doubtful
Financing Receivable, Past Due [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0	0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0	0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0	0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0	0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0	0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0	0
Financing Receivable, Revolving	0	0
Financing Receivable, Revolving, Converted to Term Loan	0	0
Gross loans	$ 0	$ 0

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Financing Receivable, Nonaccrual) (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual, With Allowance	$ 2,342	$ 2,150
Financing Receivable, Nonaccrual, No Allowance	616	841
Financing Receivable, Nonaccrual	2,958	2,991
Real Estate
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual	325	387
General Business Assets
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual	0	0
Total Collateral -Dependent Non-Accrual Loans
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual	325	387
Commercial real estate - non-owner-occupied
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual, With Allowance	0	0
Financing Receivable, Nonaccrual, No Allowance	10	11
Financing Receivable, Nonaccrual	10	11
Commercial real estate - owner-occupied
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual, With Allowance	0	0
Financing Receivable, Nonaccrual, No Allowance	47	46
Financing Receivable, Nonaccrual	47	46
Commercial
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual, With Allowance	606	415
Financing Receivable, Nonaccrual, No Allowance	142	300
Financing Receivable, Nonaccrual	748	715
Residential real estate
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual, With Allowance	1,359	1,314
Financing Receivable, Nonaccrual, No Allowance	356	419
Financing Receivable, Nonaccrual	1,715	1,733
Residential real estate | Real Estate
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual	325	387
Residential real estate | General Business Assets
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual	0	0
Residential real estate | Total Collateral -Dependent Non-Accrual Loans
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual	325	387
Home equity
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual, With Allowance	377	421
Financing Receivable, Nonaccrual, No Allowance	61	65
Financing Receivable, Nonaccrual	438	486
Home equity | Real Estate
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual	0	0
Home equity | General Business Assets
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual	0	0
Home equity | Total Collateral -Dependent Non-Accrual Loans
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual	0	0
Consumer
Financing Receivable, Nonaccrual [Line Items]
Financing Receivable, Nonaccrual, With Allowance	0	0
Financing Receivable, Nonaccrual, No Allowance	0	0
Financing Receivable, Nonaccrual	$ 0	$ 0

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Troubled Debt Restructuring Loans) (Details) $ in Thousands	Dec. 31, 2022 USD ($) loan
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts | loan	22
Recorded Investment	$ 2,566
Specific Reserve	$ 366
Residential real estate
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts | loan	18
Recorded Investment	$ 2,208
Specific Reserve	$ 307
Commercial
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts | loan	0
Recorded Investment	$ 0
Specific Reserve	$ 0
Consumer
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts | loan	3
Recorded Investment	$ 245
Specific Reserve	$ 9
Commercial real estate - owner-occupied
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts | loan	1
Recorded Investment	$ 113
Specific Reserve	$ 50

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Troubled Debt Restructuring by Portfolio Segment) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) loan
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts | loan	1
Financing Receivable, Troubled Debt Restructuring, Premodification	$ 69
Financing Receivable, Troubled Debt Restructuring, Postmodification	96
Allowance Related to Troubled Debt Restructurings assigned during period	$ 0
Home equity | Interest Rate Concession and Payment Deferral
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts | loan	0
Financing Receivable, Troubled Debt Restructuring, Premodification	$ 0
Financing Receivable, Troubled Debt Restructuring, Postmodification	0
Allowance Related to Troubled Debt Restructurings assigned during period	$ 0
Home equity | Extended Maturity
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts | loan	1
Financing Receivable, Troubled Debt Restructuring, Premodification	$ 69
Financing Receivable, Troubled Debt Restructuring, Postmodification	96
Allowance Related to Troubled Debt Restructurings assigned during period	$ 0

XML

BORROWINGS (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Repurchase Agreements	$ 196,918	$ 196,451
Total short-term borrowings	486,318	265,176
Subordinated Debt	44,331	44,331
Short-term Debt [Member]
Debt Instrument [Line Items]
Repurchase Agreements	196,918	196,451
Federal Home Loan Bank, Advance, Maturity, Year One	100,000	50,000
FHLBB and Correspondent Bank Overnight Borrowings	$ 189,400	$ 18,725

XML

REPURCHASE AGREEMENTS (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	$ 196,918	$ 196,451
45016
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	196,918	196,451
MBS issued or guaranteed by U.S. government-sponsored enterprises | 45016
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	174,276	99,105
CMO issued or guaranteed by U.S. government-sponsored enterprises | 45016
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	22,642	94,328
Obligations of states and political subdivisions | 45016
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	0	3,018
Total Collateral -Dependent Non-Accrual Loans | 45016
Assets Sold under Agreements to Repurchase [Line Items]
Certificates of Deposit, at Carrying Value	$ 617	$ 616

XML

COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Legal Proceedings [Line Items]
Off-Balance Sheet, Credit Loss, Liability	$ 3,000,000		$ 3,300,000
Off-Balance Sheet, Credit Loss, Liability, Credit Loss Expense (Reversal)	(275,000)	$ 161,000
Loss Contingency Accrual	$ 0		$ 0

XML

COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES (Summary of Contractual and Notional Amounts of FInancial Instruments) (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Financial Instruments [Line Items]
Contractual Amounts Of Financial Instrument	$ 786,171	$ 824,573
Commitments to Extend Credit [Member]
Financial Instruments [Line Items]
Contractual Amounts Of Financial Instrument	779,402	817,772
Standby Letters of Credit [Member]
Financial Instruments [Line Items]
Contractual Amounts Of Financial Instrument	$ 6,769	$ 6,801

XML

DERIVATIVES AND HEDGING (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Other Commitments [Line Items]
Estimated amount to be reclassified as an increase to interest expense	$ 2,500
Estimated amount to be reclassified as an increase to interest income	3,000
Derivative liability, fair value, net	11,600	$ 14,800
Cash collateral	0	0
Termination value	$ 11,600	$ 14,800

XML

DERIVATIVES AND HEDGING (Schedule of derivative financial instruments) (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Derivative [Line Items]
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Other assets	Other assets
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Accrued interest and other liabilities	Accrued interest and other liabilities
Interest rate contracts
Derivative [Line Items]
Fair Value	$ 10,996	$ 13,051
Fair Value	6,859	5,515
Designated as Hedging Instrument
Derivative [Line Items]
Fair Value	10,996	13,051
Fair Value	6,859	5,515
Designated as Hedging Instrument | Interest rate contracts
Derivative [Line Items]
Notional Amount	60,000	110,000
Fair Value	10,996	13,051
Notional Amount	433,000	133,000
Fair Value	6,859	5,515
Not Designated as Hedging Instrument
Derivative [Line Items]
Fair Value	11,582	14,947
Fair Value	11,611	14,937
Not Designated as Hedging Instrument | Customer loan swaps
Derivative [Line Items]
Notional Amount	288,076	260,130
Fair Value	11,479	14,802
Notional Amount	288,076	345,545
Fair Value	11,554	14,850
Not Designated as Hedging Instrument | Risk participation agreements
Derivative [Line Items]
Notional Amount	21,696	21,818
Fair Value	0	0
Notional Amount	44,127	53,704
Fair Value	0	0
Not Designated as Hedging Instrument | Fixed rate mortgage interest rate lock commitments
Derivative [Line Items]
Notional Amount	6,883	4,493
Fair Value	71	31
Notional Amount	5,843	9,597
Fair Value	43	87
Not Designated as Hedging Instrument | Forward delivery commitments
Derivative [Line Items]
Notional Amount	2,887	5,259
Fair Value	32	114
Notional Amount	1,651	0
Fair Value	$ 14	$ 0

XML

DERIVATIVES AND HEDGING (Schedule of fair value hedge) (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Derivative [Line Items]
Carrying Amount of Hedged Assets/(Liabilities)	$ 301,552	$ 0
Cumulative Fair Value Hedging Adjustment in the Carrying Amount of the Hedged Assets/(Liabilities)	(1,552)	0
Loans
Derivative [Line Items]
Carrying Amount of Hedged Assets/(Liabilities)	301,552	0
Cumulative Fair Value Hedging Adjustment in the Carrying Amount of the Hedged Assets/(Liabilities)	(1,552)	$ 0
Financial Asset, Closed Portfolio, Portfolio Layer Method, Amortized Cost	853,700
Beneficial Interest, Portfolio Layer Method, Amortized Cost	$ 300,000

XML

DERIVATIVES AND HEDGING (Schedule of cash flow hedging instruments, location) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	$ (668)	$ 782
Amount of gain (loss) reclassified from AOCI into income	(713)	808
Net interest income	34,280	36,365
Cash Flow Hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	(1,549)	3,635
Amount of gain (loss) reclassified from AOCI into income	209	(118)
Cash Flow Hedging | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	182	(3,011)
Cash Flow Hedging | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	(1)	3,488
Cash Flow Hedging | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	(796)
Cash Flow Hedging | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	(934)	3,158
Cash Flow Hedging | Interest and fees on loans
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	(717)	382
Cash Flow Hedging | Interest and fees on loans | Reclassification out of Accumulated Other Comprehensive Income
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net interest income	45,332	32,035
Cash Flow Hedging | Interest and fees on loans | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	(717)	382
Cash Flow Hedging | Interest on deposits
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	306	(149)
Cash Flow Hedging | Interest on deposits | Reclassification out of Accumulated Other Comprehensive Income
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net interest income	15,832	1,833
Cash Flow Hedging | Interest on deposits | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	306	(149)
Cash Flow Hedging | Interest on borrowings
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	487
Cash Flow Hedging | Interest on borrowings | Reclassification out of Accumulated Other Comprehensive Income
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net interest income	2,085
Cash Flow Hedging | Interest on borrowings | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	487
Cash Flow Hedging | Interest on subordinated debentures
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	133	(351)
Cash Flow Hedging | Interest on subordinated debentures | Reclassification out of Accumulated Other Comprehensive Income
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net interest income	528	529
Cash Flow Hedging | Interest on subordinated debentures | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	133	(351)
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	(1,549)	3,635
Amount of gain (loss) reclassified from AOCI into income	209	(118)
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	182	(3,011)
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	(1)	3,488
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	(796)
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	(934)	3,158
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest and fees on loans
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	(717)	382
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest and fees on loans | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	(717)	382
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest on deposits
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	306	(149)
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest on deposits | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	306	(149)
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest on borrowings
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	487
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest on borrowings | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	487
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest on subordinated debentures
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	133	(351)
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Included Component | Interest on subordinated debentures | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	133	(351)
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	0	0
Amount of gain (loss) reclassified from AOCI into income	0	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	0	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	0	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) recognized in OCI on derivative	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest and fees on loans
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	0	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest and fees on loans | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	0	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest on deposits
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	0	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest on deposits | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	0	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest on borrowings
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest on borrowings | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest on subordinated debentures
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	0
Cash Flow Hedging | AOCI, Derivative Qualifying as Hedge, Excluded Component | Interest on subordinated debentures | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain (loss) reclassified from AOCI into income	0	0
Fair Value Hedging | Interest and fees on loans | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Hedged items	1,552	0
Derivatives designated as hedging instruments	(1,077)	0
Fair Value Hedging | Interest on deposits | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Hedged items	0	0
Derivatives designated as hedging instruments	0	0
Fair Value Hedging | Interest on borrowings | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Hedged items	0
Derivatives designated as hedging instruments	0
Fair Value Hedging | Interest on subordinated debentures | Interest rate contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Hedged items	0	0
Derivatives designated as hedging instruments	$ 0	$ 0

XML

DERIVATIVES AND HEDGING (Schedule of derivatives effect on OCI) (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Derivative, Gain (Loss) on Derivative, Net	$ (39)	$ (199)
Customer loan swaps
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Derivative, Gain (Loss) on Derivative, Net	(27)	94
Fixed rate mortgage interest rate lock commitments
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Derivative, Gain (Loss) on Derivative, Net	84	(459)
Forward delivery commitments
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Derivative, Gain (Loss) on Derivative, Net	$ (96)	$ 166

XML

BALANCE SHEET OFFSETTING (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Offsetting Assets [Line Items]
Derivative Asset, Securities Purchased under Agreements to Resell, Securities Borrowed, Gross	$ 22,475	$ 27,853
Derivative Asset, Securities Purchased under Agreements to Resell, Securities Borrowed, Liability	0	0
Derivative Asset, Securities Purchased under Agreements to Resell, Securities Borrowed	22,475	27,853
Derivative Asset, Securities Purchased under Agreements to Resell, Securities Borrowed, Not Offset, Policy Election Deduction	0	0
Derivative Asset, Securities Purchased under Agreements to Resell, Securities Borrowed, Collateral, Obligation to Return Cash	(10,889)	(10,915)
Derivative Asset, Securities Purchased under Agreements to Resell, Securities Borrowed, Amount Offset Against Collateral	11,586	16,938
Derivative Liability, Securities Sold under Agreements to Repurchase, Securities Loaned, Gross	18,413	20,365
Derivative Liability, Securities Sold under Agreements to Repurchase, Securities Loaned, Asset	0	0
Derivative Liability, Securities Sold under Agreements to Repurchase, Securities Loaned	18,413	20,365
Derivative Liability, Securities Sold under Agreements to Repurchase, Securities Loaned, Not Offset, Policy Election Deduction	0	0
Derivative Liability, Securities Sold under Agreements to Repurchase, Securities Loaned, Collateral, Right to Reclaim Cash	6,859	5,515
Derivative Liability, Securities Sold under Agreements to Repurchase, Securities Loaned, Amount Offset Against Collateral	11,554	14,850
Securities Sold under Agreements to Repurchase, Gross	196,918	196,451
Securities Sold under Agreements to Repurchase, Asset	0	0
Securities Sold under Agreements to Repurchase	196,918	196,451
Derivative Liability, Securities Sold under Agreements to Repurchase, Securities Loaned, Collateral, Right to Reclaim Securities	196,918	196,451
Securities Sold under Agreements to Repurchase, Collateral, Right to Reclaim Cash	0	0
Securities Sold under Agreements to Repurchase, Amount Offset Against Collateral	0	0
Customer Loan Swap Dealer Bank [Member]
Offsetting Assets [Line Items]
Derivative Asset, Fair Value, Gross Asset	11,479
Derivative Asset, Fair Value, Gross Liability	0
Fair Value	11,479
Derivative Asset, Not Offset, Policy Election Deduction	0
Derivative, Collateral, Obligation to Return Cash	0
Derivative Asset, Fair Value, Amount Offset Against Collateral	11,479
Derivative Liability, Fair Value, Gross Liability		14,850
Derivative Liability, Fair Value, Gross Asset		0
Fair Value		14,850
Derivative Liability, Not Offset, Policy Election Deduction		0
Derivative, Collateral, Right to Reclaim Cash		0
Derivative Liability, Fair Value, Amount Offset Against Collateral		14,850
Customer Loan Swaps Commercial Customer [Member]
Offsetting Assets [Line Items]
Derivative Asset, Fair Value, Gross Asset		14,802
Derivative Asset, Fair Value, Gross Liability		0
Fair Value		14,802
Derivative Asset, Not Offset, Policy Election Deduction		0
Derivative, Collateral, Obligation to Return Cash		0
Derivative Asset, Fair Value, Amount Offset Against Collateral		14,802
Derivative Liability, Fair Value, Gross Liability	11,554
Derivative Liability, Fair Value, Gross Asset	0
Fair Value	11,554
Derivative Liability, Not Offset, Policy Election Deduction	0
Derivative, Collateral, Right to Reclaim Cash	0
Derivative Liability, Fair Value, Amount Offset Against Collateral	11,554
Interest rate contracts
Offsetting Assets [Line Items]
Derivative Asset, Fair Value, Gross Asset	10,996	13,051
Derivative Asset, Fair Value, Gross Liability	0	0
Fair Value	10,996	13,051
Derivative Asset, Not Offset, Policy Election Deduction	0	0
Derivative, Collateral, Obligation to Return Cash	(10,889)	(10,915)
Derivative Asset, Fair Value, Amount Offset Against Collateral	107	2,136
Derivative Liability, Fair Value, Gross Liability	6,859	5,515
Derivative Liability, Fair Value, Gross Asset	0	0
Fair Value	6,859	5,515
Derivative Liability, Not Offset, Policy Election Deduction	0	0
Derivative, Collateral, Right to Reclaim Cash	6,859	5,515
Derivative Liability, Fair Value, Amount Offset Against Collateral	$ 0	$ 0

XML

REGULATORY CAPITAL REQUIREMENTS Regulatory Capital Requirements (Narrative) (Details) $ in Thousands	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Banking Regulation, Total Risk-Based Capital Ratio, Capital Adequacy, Minimum	0.1050	0.1050
Common Equity Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	7.00%	7.00%
Banking Regulation, Tier One Leverage Capital Ratio, Capital Adequacy, Minimum	0.0400	0.0400
Value Of Trust Preferred Securities Included In Tier One Capital	$ 43,000	$ 43,000
Subordinated Debt	$ 44,331	$ 44,331
Minimum
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Banking Regulation, Total Risk-Based Capital Ratio, Capital Adequacy, Minimum	0.080
Banking Regulation, Tier One Risk-Based Capital Ratio, Capital Adequacy, Minimum	0.060
Common Equity Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	4.50%
Banking Regulation, Tier One Leverage Capital Ratio, Capital Adequacy, Minimum	0.040

XML

REGULATORY CAPITAL REQUIREMENTS (Details) $ in Thousands	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Banking Regulation, Total Capital, Actual	$ 564,967	$ 557,571
Banking Regulation, Total Risk-Based Capital Ratio, Actual	0.1395	0.1380
Banking Regulation, Total Risk-Based Capital Ratio, Capital Adequacy, Minimum	0.1050	0.1050
Banking Regulation, Total Risk-Based Capital Ratio, Well Capitalized, Minimum	0.1000	0.1000
Banking Regulation, Tier One Risk-Based Capital, Actual	$ 524,843	$ 517,385
Banking Regulation, Tier One Risk-Based Capital Ratio, Actual	0.1296	0.1281
Banking Regulation, Tier One Risk-Based Capital Ratio, Capital Adequacy, Minimum	0.0850	0.0850
Banking Regulation, Tier One Risk-Based Capital Ratio, Well Capitalized, Minimum	0.0600	0.0600
Common equity tier I capital	$ 481,843	$ 474,385
Common Equity Tier I Risk Based Capital Ratio	11.90%	11.74%
Common Equity Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	7.00%	7.00%
Banking Regulation, Tier One Leverage Capital, Actual	$ 524,843	$ 517,385
Banking Regulation, Excess Tier One Leverage Capital Ratio, Actual	0.0924	0.0922
Banking Regulation, Tier One Leverage Capital Ratio, Capital Adequacy, Minimum	0.0400	0.0400
Subsidiaries
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Banking Regulation, Total Capital, Actual	$ 532,658	$ 525,346
Banking Regulation, Total Risk-Based Capital Ratio, Actual	0.1318	0.1303
Banking Regulation, Total Risk-Based Capital Ratio, Capital Adequacy, Minimum	0.1050	0.1050
Banking Regulation, Total Risk-Based Capital Ratio, Well Capitalized, Minimum	0.1000	0.1000
Banking Regulation, Tier One Risk-Based Capital, Actual	$ 492,534	$ 485,160
Banking Regulation, Tier One Risk-Based Capital Ratio, Actual	0.1219	0.1203
Banking Regulation, Tier One Risk-Based Capital Ratio, Capital Adequacy, Minimum	0.0850	0.0850
Banking Regulation, Tier One Risk-Based Capital Ratio, Well Capitalized, Minimum	0.0800	0.0800
Common equity tier I capital	$ 492,534	$ 485,160
Common Equity Tier I Risk Based Capital Ratio	12.19%	12.03%
Common Equity Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	7.00%	7.00%
Common Equity Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	6.50%	6.50%
Banking Regulation, Tier One Leverage Capital, Actual	$ 492,534	$ 485,160
Banking Regulation, Excess Tier One Leverage Capital Ratio, Actual	0.0868	0.0865
Banking Regulation, Tier One Leverage Capital Ratio, Capital Adequacy, Minimum	0.0400	0.0400
Banking Regulation, Tier One Leverage Capital Ratio, Well Capitalized, Minimum	0.0500	0.0500

XML

OTHER COMPREHENSIVE INCOME (LOSS) Components of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
AFS Debt Securities:
Unrealized holding gains, pre-tax amount	$ 9,885	$ (92,753)
Unrealized holdings gains, tax (expense) benefit	(2,125)	19,942
Unrealized holdings gains, after-tax amount	7,760	(72,811)
Less: reclassification adjustment for amortization of securities transferred from AFS to HTM, pre-tax amount	(1,699)	0
Less: reclassification adjustment for amortization of securities transferred from AFS to HTM, tax (expense) benefit	365	0
Less: reclassification adjustment for amortization of securities transferred from AFS to HTM, after-tax amount	(1,334)	0
Net unrealized gains, pre-tax amount	11,584	(92,753)
Net unrealized gains, tax (expense) benefit	(2,490)	19,942
Net unrealized gains, after-tax amount	9,094	(72,811)
Cash Flow Hedges:
Net decrease in fair value, pre-tax amount	(3,109)	3,635
Net decrease in fair value, tax (expense) benefit	668	(782)
Net decrease in fair value, after-tax amount	(2,441)	2,853
Net decrease in fair value, pre-tax amount	(3,318)	3,753
Net decrease in fair value, tax (expense) benefit	713	(808)
Net decrease in fair value, after-tax amount	(2,605)	2,945
Postretirement Plans:
Net gain on postretirement plans, pre-tax amount	(6)	232
Net gain on postretirement plans, tax (expense) benefit	1	(50)
Net gain on postretirement plans, net of tax	(5)	182
Other comprehensive income, pre-tax amount	8,260	(88,768)
Other comprehensive income, tax (expense) benefit	(1,776)	19,084
Other comprehensive income (loss)	6,484	(69,684)
Interest Expense, Borrowings
Cash Flow Hedges:
Less: effective portion reclassified into interest expense, pre-tax amount	926	(500)
Less: effective portion reclassified into interest expense, tax (expense) benefit	(199)	108
Less: effective portion reclassified into interest expense, after-tax amount	727	(392)
Interest Income, Interest and Fees on Loans
Cash Flow Hedges:
Less: effective portion reclassified into interest expense, pre-tax amount	(717)	382
Less: effective portion reclassified into interest expense, tax (expense) benefit	154	(82)
Less: effective portion reclassified into interest expense, after-tax amount	$ (563)	$ 300

XML

OTHER COMPREHENSIVE INCOME (LOSS) Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	$ 451,278	$ 541,294
Other comprehensive income (loss) before reclassifications	5,319	(69,958)
Less: Amounts reclassified from AOCI	(1,165)	(274)
Other comprehensive income (loss)	6,484	(69,684)
Ending Balance	464,874	482,446
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(125,955)	(6,229)
Ending Balance	(119,471)	(75,913)
Net Unrealized Gains (Losses) on Debt Securities(1)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(131,539)	(1,173)
Other comprehensive income (loss) before reclassifications	7,760	(72,811)
Less: Amounts reclassified from AOCI	(1,334)	0
Other comprehensive income (loss)	9,094	(72,811)
Ending Balance	(122,445)	(73,984)
Net Unrealized (Losses) Gains on Cash Flow Hedges(1)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	5,891	(1,779)
Other comprehensive income (loss) before reclassifications	(2,441)	2,853
Less: Amounts reclassified from AOCI	164	(92)
Other comprehensive income (loss)	(2,605)	2,945
Ending Balance	3,286	1,166
Defined Benefit Postretirement Plans(1)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(307)	(3,277)
Other comprehensive income (loss) before reclassifications	0	0
Less: Amounts reclassified from AOCI	5	(182)
Other comprehensive income (loss)	(5)	182
Ending Balance	$ (312)	$ (3,095)

XML

REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 7,815	$ 7,782
Revenue Not from Contract with Customer	2,051	2,043
Noninterest Income	9,866	9,825
Products And Services, Debt Card Income [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	2,938	2,924
Products And Services, Deposit Accounts Service Charges [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	1,762	1,833
Products And Services, Fiduciary Services Income [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	1,600	1,631
Products And Services, Brokerage and Insurance Commissions [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	1,093	994
Products And Services, Other Income [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 422	$ 400

XML

EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Supplemental Employee Retirement Plan [Member]
Net periodic pension cost
Service cost	$ 70	$ 133
Interest cost	189	115
Recognized net actuarial loss	0	216
Net period benefit cost	259	464
Other Postretirement Benefit Plan
Net periodic pension cost
Service cost	3	5
Interest cost	40	28
Recognized net actuarial loss	(1)	22
Amortization of prior service credit	(6)	(6)
Net period benefit cost	$ 36	$ 49

XML

EPS (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Net income	$ 12,727	$ 16,795
Dividends and undistributed earnings allocated to participating securities	(25)	(43)
Net income available to common shareholders	$ 12,702	$ 16,752
Weighted-average common shares outstanding for basic EPS	14,573,122	14,741,271
Dilutive effect of stock-based awards (shares)	58,420	81,061
Weighted-average common and potential common shares for diluted EPS (shares)	14,631,542	14,822,332
Basic EPS (in dollars per share)	$ 0.87	$ 1.14
Diluted EPS (in dollars per share)	$ 0.87	$ 1.13

XML

EPS (Additional Information) (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Performance Shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Stock options (shares)	1,141	1,027

XML

FAIR VALUE MEASUREMENT AND DISCLOSURE (Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Financial assets:
Trading securities	$ 3,971	$ 3,990
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	686,423	695,875
Loans held for sale	4,539	5,259
Financial liabilities:
Debt Securities, Trading	3,971	3,990
Obligations of states and political subdivisions
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	49,051	49,226
MBS issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	507,831	514,019
CMO issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	106,233	109,347
Fair Value, Measurements, Recurring
Financial assets:
Trading securities	3,971	3,990
Loans held for sale	4,562	5,197
Financial liabilities:
Debt Securities, Trading	3,971	3,990
Fair Value, Measurements, Recurring | Obligations of states and political subdivisions
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	49,051	49,226
Fair Value, Measurements, Recurring | MBS issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	507,831	514,019
Fair Value, Measurements, Recurring | CMO issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	106,233	109,347
Fair Value, Measurements, Recurring | Corporate Bond Securities [Member]
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	23,308	23,283
Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring
Financial assets:
Trading securities	3,971	3,990
Loans held for sale	0	0
Financial liabilities:
Debt Securities, Trading	3,971	3,990
Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring | Obligations of states and political subdivisions
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	0	0
Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring | MBS issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	0	0
Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring | CMO issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	0	0
Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring | Corporate Bond Securities [Member]
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	0	0
Observable Market Data (Level 2) | Fair Value, Measurements, Recurring
Financial assets:
Trading securities	0	0
Loans held for sale	4,562	5,197
Financial liabilities:
Debt Securities, Trading	0	0
Observable Market Data (Level 2) | Fair Value, Measurements, Recurring | Obligations of states and political subdivisions
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	49,051	49,226
Observable Market Data (Level 2) | Fair Value, Measurements, Recurring | MBS issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	507,831	514,019
Observable Market Data (Level 2) | Fair Value, Measurements, Recurring | CMO issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	106,233	109,347
Observable Market Data (Level 2) | Fair Value, Measurements, Recurring | Corporate Bond Securities [Member]
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	23,308	23,283
Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring
Financial assets:
Trading securities	0	0
Loans held for sale	0	0
Financial liabilities:
Debt Securities, Trading	0	0
Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring | Obligations of states and political subdivisions
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	0	0
Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring | MBS issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	0	0
Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring | CMO issued or guaranteed by U.S. government-sponsored enterprises
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	0	0
Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring | Corporate Bond Securities [Member]
Financial assets:
Available-for-sale securities, at fair value (amortized cost of $777,621 and $796,960, respectively)	0	0
Interest Rate Lock Commitments [Member] | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	71	31
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value	43	87
Interest Rate Lock Commitments [Member] | Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	0	0
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value		0
Interest Rate Lock Commitments [Member] | Observable Market Data (Level 2) | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	71	31
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value	43	87
Interest Rate Lock Commitments [Member] | Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	0	0
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value	0	0
Forward delivery commitments | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	32	114
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value	14
Forward delivery commitments | Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	0	0
Forward delivery commitments | Observable Market Data (Level 2) | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	32	114
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value	14
Forward delivery commitments | Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	0	0
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value	0
Customer loan swaps | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	11,479	14,802
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value	11,554	14,850
Customer loan swaps | Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	0	0
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value	0	0
Customer loan swaps | Observable Market Data (Level 2) | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	11,479	14,802
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value	11,554	14,850
Customer loan swaps | Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring
Financial assets:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value	0	0
Financial liabilities:
Interest Rate Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value	0	0
Interest rate contracts
Financial assets:
Fair Value	10,996	13,051
Financial liabilities:
Derivative Liability	6,859	5,515
Interest rate contracts | Fair Value, Measurements, Recurring
Financial assets:
Fair Value	10,996	13,051
Financial liabilities:
Derivative Liability	6,859	5,515
Interest rate contracts | Readily Available Market Prices (Level 1) | Fair Value, Measurements, Recurring
Financial assets:
Fair Value	0	0
Financial liabilities:
Derivative Liability		0
Interest rate contracts | Observable Market Data (Level 2) | Fair Value, Measurements, Recurring
Financial assets:
Fair Value	10,996	13,051
Financial liabilities:
Derivative Liability	6,859	5,515
Interest rate contracts | Company Determined Fair Value (Level 3) | Fair Value, Measurements, Recurring
Financial assets:
Fair Value	0	0
Financial liabilities:
Derivative Liability	$ 0	$ 0

XML

FAIR VALUE MEASUREMENT AND DISCLOSURE (Schedule of Carrying Amounts and Estimated Fair Value for Financial Instrument Assets and Liabilities) (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Financial assets:
Held-to-maturity securities, at amortized cost	$ 540,074	$ 546,583
Held-to-maturity securities, fair value	510,999	506,193
Mortgage servicing rights	4,187	4,412
Financial liabilities:
Time deposits	351,795	291,568
Short-term Debt, Fair Value	485,505	264,779
Subordinated debentures	31,918	31,032
Commercial Real Estate
Financial assets:
Loans receivable, net of allowance	1,586,974	1,550,379
Commercial
Financial assets:
Loans receivable, net of allowance	405,429	414,353
Residential real estate
Financial assets:
Loans receivable, net of allowance	1,509,387	1,494,707
Home equity
Financial assets:
Loans receivable, net of allowance	228,821	237,967
Consumer
Financial assets:
Loans receivable, net of allowance	16,993	17,853
Readily Available Market Prices (Level 1)
Financial assets:
Held-to-maturity securities, fair value	0	0
Mortgage servicing rights	0	0
Financial liabilities:
Time deposits	0	0
Short-term Debt, Fair Value	0	0
Subordinated debentures	0	0
Readily Available Market Prices (Level 1) | Commercial Real Estate
Financial assets:
Loans receivable, net of allowance	0	0
Readily Available Market Prices (Level 1) | Commercial
Financial assets:
Loans receivable, net of allowance	0	0
Readily Available Market Prices (Level 1) | Residential real estate
Financial assets:
Loans receivable, net of allowance	0	0
Readily Available Market Prices (Level 1) | Home equity
Financial assets:
Loans receivable, net of allowance	0	0
Readily Available Market Prices (Level 1) | Consumer
Financial assets:
Loans receivable, net of allowance	0	0
Observable Market Data (Level 2)
Financial assets:
Held-to-maturity securities, fair value	510,999	506,193
Mortgage servicing rights	0	0
Financial liabilities:
Time deposits	351,795	291,568
Short-term Debt, Fair Value	485,505	264,779
Subordinated debentures	31,918	31,032
Observable Market Data (Level 2) | Commercial Real Estate
Financial assets:
Loans receivable, net of allowance	0	0
Observable Market Data (Level 2) | Commercial
Financial assets:
Loans receivable, net of allowance	0	0
Observable Market Data (Level 2) | Residential real estate
Financial assets:
Loans receivable, net of allowance	0	0
Observable Market Data (Level 2) | Home equity
Financial assets:
Loans receivable, net of allowance	0	0
Observable Market Data (Level 2) | Consumer
Financial assets:
Loans receivable, net of allowance	0	0
Company Determined Fair Value (Level 3)
Financial assets:
Held-to-maturity securities, fair value	0	0
Mortgage servicing rights	4,187	4,412
Financial liabilities:
Time deposits	0	0
Short-term Debt, Fair Value	0	0
Subordinated debentures	0	0
Company Determined Fair Value (Level 3) | Commercial Real Estate
Financial assets:
Loans receivable, net of allowance	1,586,974	1,550,379
Company Determined Fair Value (Level 3) | Commercial
Financial assets:
Loans receivable, net of allowance	404,847	414,353
Company Determined Fair Value (Level 3) | Residential real estate
Financial assets:
Loans receivable, net of allowance	1,509,387	1,494,707
Company Determined Fair Value (Level 3) | Home equity
Financial assets:
Loans receivable, net of allowance	228,821	237,967
Company Determined Fair Value (Level 3) | Consumer
Financial assets:
Loans receivable, net of allowance	16,993	17,853
Carrying Amount
Financial assets:
Held-to-maturity securities, at amortized cost	540,074	546,583
Mortgage servicing rights	2,413	2,458
Financial liabilities:
Time deposits	360,103	300,451
Short-term Debt, Fair Value	486,318	265,176
Subordinated debentures	44,331	44,331
Carrying Amount | Commercial Real Estate
Financial assets:
Loans receivable, net of allowance	1,647,823	1,605,279
Carrying Amount | Commercial
Financial assets:
Loans receivable, net of allowance	416,518	424,685
Carrying Amount | Residential real estate
Financial assets:
Loans receivable, net of allowance	1,722,335	1,691,177
Carrying Amount | Home equity
Financial assets:
Loans receivable, net of allowance	230,072	232,203
Carrying Amount | Consumer
Financial assets:
Loans receivable, net of allowance	$ 19,226	$ 20,087