10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2023.

OR

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

For the transition period from ________ to ________.

COMMISSION FILE NUMBER 0-14703

NBT BANCORP INC.

(Exact name of registrant as specified in its charter)

Delaware	16-1268674
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

52 South Broad Street, Norwich, New York 13815

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (607) 337-2265

None

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

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	NBTB	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 period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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

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

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

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

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

As of October 31, 2023, there were 47,087,868 shares outstanding of the Registrant’s Common Stock, $0.01 par value per share.

NBT BANCORP INC.

FORM 10-Q - Quarter Ended September 30, 2023

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS (unaudited)
	Consolidated Balance Sheets at September 30, 2023 and December 31, 2022	3
	Consolidated Statements of Income for the three and nine month periods ended September 30, 2023 and 2022	4
	Consolidated Statements of Comprehensive Income (Loss) for the three and nine month periods ended September 30, 2023 and 2022	5
	Consolidated Statements of Stockholders’ Equity for the three and nine month periods ended September 30, 2023 and 2022	6
	Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2023 and 2022	7
	Notes to Unaudited Interim Consolidated Financial Statements	9
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	33
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	50
ITEM 4.	CONTROLS AND PROCEDURES	50
PART II	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	51
ITEM 1A.	RISK FACTORS	51
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	51
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	51
ITEM 4.	MINE SAFETY DISCLOSURES	51
ITEM 5.	OTHER INFORMATION	51
ITEM 6.	EXHIBITS	52
SIGNATURES		53

ITEM 1. FINANCIAL STATEMENTS

NBT Bancorp Inc. and Subsidiaries

Consolidated Balance Sheets (unaudited)

	September 30,			December 31,
(In thousands, except share and per share data)	2023			2022
Assets
Cash and due from banks	$	213,358		$	166,488
Short-term interest-bearing accounts		459,296			30,862
Equity securities, at fair value		35,600			30,784
Securities available for sale, at fair value		1,399,032			1,527,225
Securities held to maturity (fair value of $783,986 and $812,647, respectively)		914,520			919,517
Federal Reserve and Federal Home Loan Bank stock		50,333			44,713
Loans held for sale		4,113			562
Loans		9,667,375			8,150,147
Less allowance for loan losses		114,601			100,800
Net loans	$	9,552,774		$	8,049,347
Premises and equipment, net		82,837			69,047
Goodwill		360,171			281,204
Intangible assets, net		42,574			7,341
Bank owned life insurance		264,537			232,409
Other assets		448,483			379,797
Total assets	$	13,827,628		$	11,739,296
Liabilities
Demand (noninterest bearing)	$	3,716,309		$	3,617,324
Savings, NOW and money market		6,340,944			5,444,837
Time		1,344,199			433,772
Total deposits	$	11,401,452		$	9,495,933
Short-term borrowings		490,180			585,012
Long-term debt		29,834			4,815
Subordinated debt, net		119,393			96,927
Junior subordinated debt		101,196			101,196
Other liabilities		322,752			281,859
Total liabilities	$	12,464,807		$	10,565,742
Stockholders’ equity
Preferred stock, $0.01 par value, 2,500,000 shares authorized	$	-		$	-
Common stock, $0.01 par value, 100,000,000 shares authorized; 53,974,492 and 49,651,493 shares issued, respectively		540			497
Additional paid-in-capital		740,577			577,853
Retained earnings		1,006,459			958,433
Accumulated other comprehensive loss		(207,579	)		(190,034	)
Common stock in treasury, at cost, 6,886,895 and 6,793,670 shares, respectively		(177,176	)		(173,195	)
Total stockholders’ equity	$	1,362,821		$	1,173,554
Total liabilities and stockholders’ equity	$	13,827,628		$	11,739,296

See accompanying notes to unaudited interim consolidated financial statements.

3

NBT Bancorp Inc. and Subsidiaries

Consolidated Statements of Income (unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per share data)	2023			2022			2023			2022
Interest, fee and dividend income
Interest and fees on loans	$	122,097		$	85,266		$	329,931		$	237,148
Securities available for sale		7,495			7,665			22,604			21,822
Securities held to maturity		5,281			4,854			15,307			12,532
Other		2,221			1,429			4,033			3,396
Total interest, fee and dividend income	$	137,094		$	99,214		$	371,875		$	274,898
Interest expense
Deposits	$	30,758		$	2,233		$	61,888		$	5,831
Short-term borrowings		7,612			84			20,657			113
Long-term debt		294			20			631			140
Subordinated debt		1,612			1,360			4,281			4,078
Junior subordinated debt		1,923			1,039			5,372			2,325
Total interest expense	$	42,199		$	4,736		$	92,829		$	12,487
Net interest income	$	94,895		$	94,478		$	279,046		$	262,411
Provision for loan losses		12,633			4,484			20,148			9,470
Net interest income after provision for loan losses	$	82,262		$	89,994		$	258,898		$	252,941
Noninterest income
Service charges on deposit accounts	$	3,979		$	3,581		$	11,260		$	11,032
Card services income		5,503			5,654			15,469			24,100
Retirement plan administration fees		12,798			11,496			35,995			37,451
Wealth management		9,297			8,402			25,611			25,294
Insurance services		4,361			3,892			12,008			11,258
Bank owned life insurance income		1,568			1,560			4,974			4,625
Net securities (losses)		(183	)		(148	)		(9,822	)		(914	)
Other		2,913			2,735			8,195			8,641
Total noninterest income	$	40,236		$	37,172		$	103,690		$	121,487
Noninterest expense
Salaries and employee benefits	$	49,248		$	48,371		$	144,237		$	140,595
Technology and data services		9,677			9,096			27,989			26,588
Occupancy		7,090			6,481			21,233			19,761
Professional fees and outside services		4,149			3,817			12,486			11,999
Office supplies and postage		1,700			1,469			5,004			4,441
FDIC assessment		1,657			787			4,397			2,399
Advertising		667			559			1,841			1,943
Amortization of intangible assets		1,609			544			2,603			1,725
Loan collection and other real estate owned, net		569			549			2,115			1,690
Acquisition expenses		7,917			-			9,724			-
Other		6,514			5,021			17,284			13,815
Total noninterest expense	$	90,797		$	76,694		$	248,913		$	224,956
Income before income tax expense	$	31,701		$	50,472		$	113,675		$	149,472
Income tax expense		7,095			11,499			25,339			33,598
Net income	$	24,606		$	38,973		$	88,336		$	115,874
Earnings per share
Basic	$	0.54		$	0.91		$	2.02		$	2.70
Diluted	$	0.54		$	0.90		$	2.01		$	2.68

See accompanying notes to unaudited interim consolidated financial statements.

4

NBT Bancorp Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss) (unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2023			2022			2023			2022
Net income	$	24,606		$	38,973		$	88,336		$	115,874
Other comprehensive income (loss), net of tax:
Securities available for sale:
Unrealized net holding (losses) arising during the period, gross	$	(24,059	)	$	(78,653	)	$	(35,117	)	$	(214,543	)
Tax effect		6,015			19,663			8,780			53,636
Unrealized net holding (losses) arising during the period, net	$	(18,044	)	$	(58,990	)	$	(26,337	)	$	(160,907	)
Reclassification adjustment for net losses in net income, gross	$	-		$	-		$	9,450		$	-
Tax effect		-			-			(2,363	)		-
Reclassification adjustment for net losses in net income, net	$	-		$	-		$	7,087		$	-
Amortization of unrealized net gains for the reclassification of available for sale securities to held to maturity, gross	$	105		$	125		$	328		$	393
Tax effect		(26	)		(31	)		(82	)		(98	)
Amortization of unrealized net gains for the reclassification of available for sale securities to held to maturity, net	$	79		$	94		$	246		$	295
Total securities available for sale, net	$	(17,965	)	$	(58,896	)	$	(19,004	)	$	(160,612	)
Pension and other benefits:
Amortization of prior service cost and actuarial losses, gross	$	648		$	185		$	1,946		$	557
Tax effect		(162	)		(47	)		(487	)		(140	)
Amortization of prior service cost and actuarial losses, net	$	486		$	138		$	1,459		$	417
Total pension and other benefits, net	$	486		$	138		$	1,459		$	417
Total other comprehensive (loss)	$	(17,479	)	$	(58,758	)	$	(17,545	)	$	(160,195	)
Comprehensive income (loss)	$	7,127		$	(19,785	)	$	70,791		$	(44,321	)

See accompanying notes to unaudited interim consolidated financial statements.

5

NBT Bancorp Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity (unaudited)

(In thousands, except share and per share data)	Common Stock		Additional Paid-in- Capital			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Common Stock in Treasury			Total
Balance at June 30, 2023	$	497	$	578,322		$	996,920		$	(190,100	)	$	(175,146	)	$	1,210,493
Net income		-		-			24,606			-			-			24,606
Cash dividends - $0.32 per share		-		-			(15,067	)		-			-			(15,067	)
Issuance of 4,322,999 shares of common stock for acquisition		43		161,680			-			-			-			161,723
Purchase of 68,500 treasury shares		-		-			-			-			(2,166	)		(2,166	)
Net issuance of 6,334 shares to employee and other stock plans		-		(250	)		-			-			136			(114	)
Stock-based compensation		-		825			-			-			-			825
Other comprehensive (loss)		-		-			-			(17,479	)		-			(17,479	)
Balance at September 30, 2023	$	540	$	740,577		$	1,006,459		$	(207,579	)	$	(177,176	)	$	1,362,821
Balance at June 30, 2022	$	497	$	577,345		$	909,029		$	(124,781	)	$	(173,534	)	$	1,188,556
Net income		-		-			38,973			-			-			38,973
Cash dividends - $0.30 per share		-		-			(12,832	)		-			-			(12,832	)
Net issuance of 2,849 shares to employee and other stock plans		-		(116	)		-			-			53			(63	)
Stock-based compensation		-		670			-			-			-			670
Other comprehensive (loss)		-		-			-			(58,758	)		-			(58,758	)
Balance at September 30, 2022	$	497	$	577,899		$	935,170		$	(183,539	)	$	(173,481	)	$	1,156,546

(In thousands, except share and per share data)	Common Stock		Additional Paid-in- Capital			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Common Stock in Treasury			Total
Balance at December 31, 2022	$	497	$	577,853		$	958,433		$	(190,034	)	$	(173,195	)	$	1,173,554
Cumulative effect adjustment for ASU 2022-02 implementation as of January 1, 2023		-		-			502			-			-			502
Net income		-		-			88,336			-			-			88,336
Cash dividends - $0.92 per share		-		-			(40,812	)		-			-			(40,812	)
Issuance of 4,322,999 shares of common stock for acquisition		43		161,680			-			-			-			161,723
Purchase of 155,500 treasury shares		-		-			-			-			(4,944	)		(4,944	)
Net issuance of 62,275 shares to employee and other stock plans		-		(3,093	)		-			-			963			(2,130	)
Stock-based compensation		-		4,137			-			-			-			4,137
Other comprehensive (loss)		-		-			-			(17,545	)		-			(17,545	)
Balance at September 30, 2023	$	540	$	740,577		$	1,006,459		$	(207,579	)	$	(177,176	)	$	1,362,821
Balance at December 31, 2021	$	497	$	576,976		$	856,203		$	(23,344	)	$	(159,879	)	$	1,250,453
Net income		-		-			115,874			-			-			115,874
Cash dividends - $0.86 per share		-		-			(36,907	)		-			-			(36,907	)
Purchase of 400,000 treasury shares		-		-			-			-			(14,713	)		(14,713	)
Net issuance of 71,243 shares to employee and other stock plans		-		(3,026	)		-			-			1,111			(1,915	)
Stock-based compensation		-		3,949			-			-			-			3,949
Other comprehensive (loss)		-		-			-			(160,195	)		-			(160,195	)
Balance at September 30, 2022	$	497	$	577,899		$	935,170		$	(183,539	)	$	(173,481	)	$	1,156,546

See accompanying notes to unaudited interim consolidated financial statements.

6

NBT Bancorp Inc. and Subsidiaries

Consolidated Statements of Cash Flows (unaudited)

	Nine Months Ended September 30,
(In thousands)	2023			2022
Operating activities
Net income	$	88,336		$	115,874
Adjustments to reconcile net income to net cash provided by operating activities
Provision for loan losses		20,148			9,470
Depreciation and amortization of premises and equipment		7,808			7,581
Net amortization on securities		2,057			2,736
Amortization of intangible assets		2,603			1,725
Amortization of operating lease right-of-use assets		5,029			4,989
Excess tax benefit on stock-based compensation		(239	)		(183	)
Stock-based compensation expense		4,137			3,949
Bank owned life insurance income		(4,974	)		(4,625	)
Amortization of subordinated debt issuance costs		328			327
Proceeds from sale of loans held for sale		26,108			4,238
Originations of loans held for sale		(29,167	)		(3,573	)
Net gain on sale of loans held for sale		(88	)		(112	)
Net securities losses		9,822			914
Net gains on sale of other real estate owned		(50	)		(259	)
Net change in other assets and other liabilities		(10,054	)		10,470
Net cash provided by operating activities	$	121,804		$	153,521
Investing activities
Net cash provided by (used in) acquisitions	$	44,564		$	(2,534	)
Securities available for sale:
Proceeds from maturities, calls and principal paydowns		90,415			177,704
Proceeds from sales		124,577			-
Purchases		-			(262,861	)
Securities held to maturity:
Proceeds from maturities, calls and principal paydowns		81,949			154,194
Purchases		(77,930	)		(351,390	)
Equity securities:
Purchases		(4	)		(1,000	)
Other:
Net increase in loans		(349,168	)		(410,805	)
Proceeds from Federal Home Loan Bank stock redemption		84,378			6,491
Purchases of Federal Reserve and Federal Home Loan Bank stock		(88,260	)		(6,285	)
Proceeds from settlement of bank owned life insurance		3,185			1,873
Purchases of premises and equipment, net		(6,333	)		(4,749	)
Proceeds from sales of other real estate owned		229			426
Net cash used in investing activities	$	(92,398	)	$	(698,936	)
Financing activities
Net increase (decrease) in deposits	$	596,543		$	(315,718	)
Net decrease in short-term borrowings		(128,214	)		(23,241	)
Proceeds from long-term debt		25,000			-
Repayments of long-term debt		(80	)		(10,673	)
Cash paid by employer for tax-withholding on stock issuance		(1,595	)		(1,346	)
Purchase of treasury stock		(4,944	)		(14,713	)
Cash dividends		(40,812	)		(36,907	)
Net cash provided by (used in) financing activities	$	445,898		$	(402,598	)
Net increase (decrease) in cash and cash equivalents	$	475,304		$	(948,013	)
Cash and cash equivalents at beginning of period		197,350			1,269,071
Cash and cash equivalents at end of period	$	672,654		$	321,058

7

NBT Bancorp Inc. and Subsidiaries

Consolidated Statements of Cash Flows (unaudited) (continued)

	Nine Months Ended September 30,
	2023		2022
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest expense	$	78,130	$	14,456
Income taxes paid, net of refund		26,663		41,903
Noncash investing activities:
Loans transferred to other real estate owned	$	74	$	-
Acquisitions:
Fair value of assets acquired, excluding acquired cash and goodwill	$	1,417,392	$	705
Fair value of liabilities assumed		1,380,386		-

See accompanying notes to unaudited interim consolidated financial statements.

8

NBT Bancorp Inc. and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

September 30, 2023

1. Description of Business

NBT Bancorp Inc. is a registered financial holding company incorporated in the state of Delaware in 1986, with its principal headquarters located in Norwich, New York. The principal assets of NBT Bancorp Inc. consist of all of the outstanding shares of common stock of its subsidiaries, including: NBT Bank, National Association (the “Bank”), NBT Financial Services, Inc. (“NBT Financial”), NBT Holdings, Inc. (“NBT Holdings”), CNBF Capital Trust I, NBT Statutory Trust I, NBT Statutory Trust II, Alliance Financial Capital Trust I and Alliance Financial Capital Trust II. The principal sources of revenue for NBT Bancorp Inc. are the management fees and dividends it receives from the Bank, NBT Financial and NBT Holdings. Collectively, NBT Bancorp Inc. and its subsidiaries are referred to herein as (the “Company”).

The Company’s business, primarily conducted through the Bank, consists of providing commercial banking, retail banking and wealth management services primarily to customers in its market area, which includes upstate New York, northeastern Pennsylvania, southern New Hampshire, western Massachusetts, Vermont, southern Maine and central and northwestern Connecticut. The Company has been, and intends to continue to be, a community-oriented financial institution offering a variety of financial services. The Company’s business philosophy is to operate as a community bank with local decision-making, providing a broad array of banking and financial services to retail, commercial and municipal customers.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim consolidated financial statements include the accounts of NBT Bancorp Inc. and its wholly-owned subsidiaries: the Bank, NBT Financial and NBT Holdings. In the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and in accordance with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, the consolidated financial statements do not include all of the information and notes necessary for complete financial statements in conformity with GAAP. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2022 Annual Report on Form 10-K. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. All material intercompany transactions have been eliminated in consolidation. Amounts previously reported in the consolidated financial statements are reclassified whenever necessary to conform to current period presentation. The Company has evaluated subsequent events for potential recognition and/or disclosure and there were none identified.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results may differ from those estimates and such differences could be material to the financial statements.

3. Recent Accounting Pronouncements

Recently Adopted Accounting Standards

In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) 2022-02, Financial Instruments - CECL Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”). The ASU eliminates the guidance on Troubled Debt Restructurings (“TDRs”) and requires an evaluation on all loan modifications to determine if they result in a new loan or a continuation of the existing loan. The ASU also requires that entities disclose current-period gross charge-offs by year of origination. The elimination of the TDR guidance may be adopted prospectively for loan modifications after adoption or on a modified retrospective basis, which would also apply to loans previously modified, resulting in a cumulative effect adjustment to retained earnings in the period of adoption for changes in the allowance for credit losses. The amendments in this ASU were effective for the Company on January 1, 2023, with early adoption permitted. The Company adopted ASU 2022-02 on January 1, 2023 (“Day 1”) using the modified retrospective method and recorded a net increase to retained earnings of $0.5 million. The transition adjustment includes a $0.6 million impact to the allowance for credit losses on loans and a $0.1 million impact to the deferred tax asset.

9

Accounting Standards Issued Not Yet Adopted

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements, which amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification. The ASU was issued in response to the SEC’s August 2018 final rule that updated and simplified disclosure requirements that the SEC believed were redundant, duplicative, overlapping, outdated, or superseded. The new guidance is intended to align GAAP requirements with those of the SEC. The ASU will become effective on the earlier of the date on which the SEC removes its disclosure requirements for the related disclosure or June 30, 2027. Early adoption is not permitted. The adoption is not expected to have a material impact on the consolidated financial statements.

4. Acquisitions

Salisbury Bancorp, Inc.

On August 11, 2023, the Company completed the acquisition of Salisbury Bancorp, Inc. (“Salisbury”) through the merger of Salisbury with and into the Company, with the Company surviving the merger, for $161.7 million in stock. Salisbury was a Connecticut-chartered commercial bank headquartered in Lakeville, Connecticut with 13 banking offices. The acquisition enhances the Company’s presence in Massachusetts’ Berkshire county, as well as extends its footprint into New York’s Dutchess, Orange and Ulster counties and in Connecticut’s Litchfield county. In connection with the acquisition, the Company issued 4.32 million shares and acquired approximately $1.46 billion of identifiable assets. Preliminary goodwill of $78.1 million was recognized as a result of the merger and is not amortizable or deductible for tax purposes. The effects of the acquired assets and liabilities have been included in the consolidated financial statements since that date. As a result of the full integration of the operations of Salisbury, it is not practicable to determine all revenue or net income included in the Company’s operating results relating to Salisbury since the date of acquisition as Salisbury results cannot be separately identified.

The Company determined that this acquisition constitutes a business combination and therefore was accounted for using the acquisition method of accounting. Accordingly, as of the date of the acquisition, the Company recorded the assets acquired, liabilities assumed and consideration paid at fair value based on management’s best estimates using information available at the date of the acquisition and these estimates are subject to adjustment based on updated information not available at the time of the acquisition. The amount of goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of the Company with Salisbury. Accrued income taxes, deferred taxes, and certain fixed assets associated with the Salisbury acquisition were recorded on a provisional basis and could vary from the actual recorded balance once market-based appraisals and tax provisions and returns are finalized.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed:

	August 11, 2023
(In thousands)	Salisbury Bancorp, Inc.
Consideration:
Cash paid to shareholders (fractional shares)	$	15
Common stock issuance		161,723
Total net consideration	$	161,738
Recognized amounts of identifiable assets acquired and (liabilities) assumed:
Cash and cash equivalents	$	48,665
Securities available for sale		122,667
Loans, net of allowance for credit losses on purchased credit deteriorated loans		1,174,237
Premises and equipment, net		15,254
Core deposit intangibles		31,188
Wealth management customer intangible		4,654
Bank owned life insurance		30,315
Other assets		37,083
Total identifiable assets acquired	$	1,464,063
Deposits	$	(1,308,976	)
Borrowings		(55,461	)
Other liabilities		(15,949	)
Total liabilities assumed	$	(1,380,386	)
Total identifiable assets, net	$	83,677
Goodwill	$	78,061

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The following is a description of the valuation methodologies used to estimate the fair values of major categories of assets acquired and liabilities assumed. The Company used an independent valuation specialist to assist with the determination of fair values for certain acquired assets and assumed liabilities.

Cash and due from banks - The estimated fair value was determined to approximate the carrying amount of these assets.

Securities available for sale - The estimated fair value of the investment portfolio was based on quoted market prices and dealer quotes. The investment securities were sold immediately after the merger and no gains or losses were recorded.

Loans - The estimated fair value of loans were based on a discounted cash flow methodology applied on a pooled basis for non-purchased credit deteriorated (“non-PCD”) loans and for purchased credit deteriorated (“PCD”) loans. The valuation considered underlying characteristics including loan type, term, rate, payment schedule and credit rating. Other factors included assumptions related to prepayments, probability of default and loss given default. The discount rates applied were based on a build-up approach considering the funding mix, servicing costs, liquidity premium and factors related to performance risk.

Core deposit intangible - The core deposit intangible was valued utilizing the cost savings method approach, which recognizes the cost savings represented by the expense of maintaining the core deposit base versus the cost of an alternative funding source. The valuation incorporates assumptions related to account retention, discount rates, deposit interest rates, deposit maintenance costs and alternative funding rates.

Wealth management customer intangible - The wealth management customer intangible was valued utilizing the income approach, which employs a present value analysis, which calculates the expected after-tax cash flow benefits of the net revenues generated by the acquired customers over the expected lives of the acquired customers, discounted at a long-term market-oriented after-tax rate of return on investment. The value assigned to the acquired customers represents the future economic benefit from acquiring the customers (net of operating expenses).

Deposits - The fair value of noninterest bearing demand deposits, interest checking, money market and savings deposit accounts from Salisbury were assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. Certificate of deposit (time deposit accounts) were valued at the present value of the certificates’ expected contractual payments discounted at market rates for similar certificates.

Borrowings - The estimated fair value of short-term borrowings was determined to approximate stated value. Subordinated debt was valued using a discounted cash flow approach incorporating a discount rate that incorporated similar terms, maturity and credit rating.

Accounting for Acquired Loans

Acquired loans are classified into two categories PCD loans and non-PCD loans. PCD loans are defined as a loan or group of loans that have experienced more than insignificant credit deterioration since origination. Non-PCD loans will have an allowance established on acquisition date, which is recognized as an expense through the provision for credit losses. For PCD loans, an allowance is recognized on day 1 by adding it to the fair value of the loan, which is the “Day 1 amortized cost”. There is no provision for credit loss expense recognized on PCD loans because the initial allowance is established by grossing-up the amortized cost of the PCD loan. A day 1 allowance for credit losses on non-PCD loans of $8.8 million was recorded through the provision for loan losses within the unaudited interim consolidated statements of income. The following table provides details related to the fair value of acquired PCD loans.

(In thousands)	PCD Loans
Par value of PCD loans at acquisition	$	219,076
Allowance for credit losses at acquisition		5,772
Discount at acquisition		(24,512	)
Fair value of PCD loans at acquisition	$	200,336

Direct costs related to the acquisition were expensed as incurred. Merger and acquisition integration-related expenses were $7.9 million and $9.7 million during the three and nine months ended September 30, 2023, respectively. These amounts have been separately stated in the unaudited interim consolidated statements of income.

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Supplemental Pro Forma Financial Information (Unaudited)

The following table presents certain unaudited pro forma financial information for illustrative purposes only, for the three and nine months ended September 30, 2023 and 2022, as if Salisbury had been acquired on January 1, 2023. This unaudited pro forma information combines the historical results of Salisbury with the Company’s consolidated historical results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the respective periods. The pro forma information is not indicative of what would have occurred had the acquisition occurred as of the beginning of the year prior to the acquisition. The unaudited pro forma information does not consider any changes to the provision expense resulting from recording loan assets at fair value, cost savings or business synergies. As a result, actual amounts would have differed from the unaudited pro forma information presented and the differences could be significant.

	Pro Forma (Unaudited)				Pro Forma (Unaudited)
	Three Months Ended				Nine Months Ended
(In thousands)	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Total revenue, net of interest expense	$	130,881	$	147,621	$	404,580	$	427,440
Net income		12,182		43,374		81,859		127,209

5. Securities

The amortized cost, estimated fair value and unrealized gains (losses) of available for sale (“AFS”) securities are as follows:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
As of September 30, 2023
U.S. treasury	$	133,160	$	-	$	(11,565	)	$	121,595
Federal agency		248,392		-		(44,636	)		203,756
State & municipal		96,449		-		(13,164	)		83,285
Mortgage-backed:
Government-sponsored enterprises		412,257		-		(61,231	)		351,026
U.S. government agency securities		74,812		6		(10,076	)		64,742
Collateralized mortgage obligations:
Government-sponsored enterprises		463,436		2		(63,389	)		400,049
U.S. government agency securities		164,418		-		(31,056	)		133,362
Corporate		48,432		-		(7,215	)		41,217
Total AFS securities	$	1,641,356	$	8	$	(242,332	)	$	1,399,032
As of December 31, 2022
U.S. treasury	$	132,891	$	-	$	(11,233	)	$	121,658
Federal agency		248,419		-		(42,000	)		206,419
State & municipal		97,036		5		(14,190	)		82,851
Mortgage-backed:
Government-sponsored enterprises		454,177		9		(54,675	)		399,511
U.S. government agency securities		81,844		15		(7,676	)		74,183
Collateralized mortgage obligations:
Government-sponsored enterprises		498,021		9		(59,473	)		438,557
U.S. government agency securities		171,090		-		(21,284	)		149,806
Corporate		60,404		-		(6,164	)		54,240
Total AFS securities	$	1,743,882	$	38	$	(216,695	)	$	1,527,225

There was no allowance for credit losses on AFS securities as of September 30, 2023 and December 31, 2022.

During the three months ended September 30, 2023, there were no gains or losses reclassified out of accumulated other comprehensive income (loss) (“AOCI”) and into earnings. During the nine months ended September 30, 2023, there were $4.5 million of gross realized losses reclassified out of AOCI and into earnings and the Company incurred a $5.0 million loss on the write-off of an AFS corporate debt security from a subordinated debt investment of a financial institution that failed. These losses were reclassified out of AOCI and into earnings in net securities losses in the consolidated statements of income. During the three and nine months ended September 30, 2022 there were no gains or losses reclassified out of AOCI and into earnings.

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The amortized cost, estimated fair value and unrealized gains (losses) of held to maturity (“HTM”) securities are as follows:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
As of September 30, 2023
Federal agency	$	100,000	$	-	$	(23,003	)	$	76,997
Mortgage-backed:
Government-sponsored enterprises		233,580		-		(45,066	)		188,514
U.S. government agency securities		17,094		-		(1,328	)		15,766
Collateralized mortgage obligations:
Government-sponsored enterprises		192,243		-		(18,562	)		173,681
U.S. government agency securities		64,537		-		(13,259	)		51,278
State & municipal		307,066		-		(29,316	)		277,750
Total HTM securities	$	914,520	$	-	$	(130,534	)	$	783,986
As of December 31, 2022
Federal agency	$	100,000	$	-	$	(20,678	)	$	79,322
Mortgage-backed:
Government-sponsored enterprises		249,511		-		(36,819	)		212,692
U.S. government agency securities		18,396		4		(619	)		17,781
Collateralized mortgage obligations:
Government-sponsored enterprises		207,738		200		(14,876	)		193,062
U.S. government agency securities		66,628		-		(9,842	)		56,786
State & municipal		277,244		5		(24,245	)		253,004
Total HTM securities	$	919,517	$	209	$	(107,079	)	$	812,647

At September 30, 2023 and December 31, 2022, all of the mortgaged-backed HTM securities were comprised of U.S. government agency and government-sponsored enterprises securities. There was no allowance for credit losses on HTM securities as of September 30, 2023 and December 31, 2022 because the expectation of nonrepayment of the amortized cost was zero, except for state & municipal securities, which such expected losses from nonrepayment were immaterial.

The Company recorded no gains from calls on HTM securities for the three months ended September 30, 2023 and 2022. The Company recorded no gains from calls on HTM securities for the nine months ended September 30, 2023. Included in net realized gains (losses), the Company recorded gains from calls on HTM securities of approximately $4 thousand for the nine months ended September 30, 2022.

AFS and HTM securities with amortized costs totaling $1.99 billion at September 30, 2023 and $1.73 billion at December 31, 2022 were pledged to secure public deposits and for other purposes required or permitted by law. Additionally, at September 30, 2023 and December 31, 2022, AFS and HTM securities with an amortized cost totaling $157.4 million and $149.5 million, respectively, were pledged as collateral for securities sold under repurchase agreements.

The following tables set forth information with regard to gains and (losses) on equity securities:

	Three Months Ended September 30,
(In thousands)	2023			2022
Net (losses) recognized on equity securities	$	(183	)	$	(148	)
Less: Net (losses) recognized on equity securities sold during the period		-			-
Unrealized (losses) recognized on equity securities still held	$	(183	)	$	(148	)

	Nine Months Ended September 30,
(In thousands)	2023			2022
Net (losses) recognized on equity securities	$	(372	)	$	(918	)
Less: Net (losses) recognized on equity securities sold during the period		-			-
Unrealized (losses) recognized on equity securities still held	$	(372	)	$	(918	)

As of September 30, 2023 and December 31, 2022, the carrying value of equity securities without readily determinable fair values was $1.0 million. The Company performed a qualitative assessment to determine whether the investments were impaired and identified no areas of concern as of September 30, 2023 and 2022. There were no impairments, or downward or upward adjustments recognized for equity securities without readily determinable fair values during the three and nine months ended September 30, 2023 and 2022.

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The following table sets forth information with regard to contractual maturities of debt securities at September 30, 2023:

(In thousands)	Amortized Cost		Estimated Fair Value
AFS debt securities:
Within one year	$	16,971	$	16,676
From one to five years		509,520		447,316
From five to ten years		423,813		359,342
After ten years		691,052		575,698
Total AFS debt securities	$	1,641,356	$	1,399,032
HTM debt securities:
Within one year	$	88,319	$	88,240
From one to five years		100,237		95,052
From five to ten years		279,872		234,309
After ten years		446,092		366,385
Total HTM debt securities	$	914,520	$	783,986

Maturities of mortgage-backed, collateralized mortgage obligations and asset-backed securities are stated based on their estimated average lives. Actual maturities may differ from estimated average lives or contractual maturities because, in certain cases, borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Except for U.S. government securities and government-sponsored enterprises securities, there were no holdings, when taken in the aggregate, of any single issuer that exceeded 10% of consolidated stockholders’ equity at September 30, 2023 and December 31, 2022.

The following table sets forth information with regard to investment securities with unrealized losses, for which an allowance for credit losses has not been recorded, segregated according to the length of time the securities had been in a continuous unrealized loss position:

	Less Than 12 Months							12 Months or Longer							Total
(In thousands)	Fair Value		Unrealized Losses			Number of Positions		Fair Value		Unrealized Losses			Number of Positions		Fair Value		Unrealized Losses			Number of Positions
As of September 30, 2023
AFS securities:
U.S. treasury	$	-	$	-			-	$	121,595	$	(11,565	)		8	$	121,595	$	(11,565	)		8
Federal agency		-		-			-		203,756		(44,636	)		16		203,756		(44,636	)		16
State & municipal		747		(21	)		1		82,538		(13,143	)		66		83,285		(13,164	)		67
Mortgage-backed		463		(7	)		25		414,686		(71,300	)		157		415,149		(71,307	)		182
Collateralized mortgage obligations		3,825		(31	)		6		528,324		(94,414	)		118		532,149		(94,445	)		124
Corporate		1,344		(101	)		1		39,873		(7,114	)		14		41,217		(7,215	)		15
Total securities with unrealized losses	$	6,379	$	(160	)		33	$	1,390,772	$	(242,172	)		379	$	1,397,151	$	(242,332	)		412
HTM securities:
Federal agency	$	-	$	-			-	$	76,997	$	(23,003	)		4	$	76,997	$	(23,003	)		4
Mortgage-backed		11,610		(975	)		1		192,576		(45,419	)		33		204,186		(46,394	)		34
Collateralized mortgage obligation		8,834		(134	)		2		216,125		(31,687	)		53		224,959		(31,821	)		55
State & municipal		24,593		(1,080	)		31		164,058		(28,236	)		193		188,651		(29,316	)		224
Total securities with unrealized losses	$	45,037	$	(2,189	)		34	$	649,756	$	(128,345	)		283	$	694,793	$	(130,534	)		317
As of December 31, 2022
AFS securities:
U.S. treasury	$	55,616	$	(3,864	)		5	$	66,042	$	(7,369	)		3	$	121,658	$	(11,233	)		8
Federal agency		-		-			-		206,419		(42,000	)		16		206,419		(42,000	)		16
State & municipal		3,679		(341	)		2		78,395		(13,849	)		64		82,074		(14,190	)		66
Mortgage-backed		204,447		(15,048	)		149		267,926		(47,303	)		32		472,373		(62,351	)		181
Collateralized mortgage obligations		211,612		(14,458	)		77		374,376		(66,299	)		49		585,988		(80,757	)		126
Corporate		34,434		(2,970	)		12		19,806		(3,194	)		6		54,240		(6,164	)		18
Total securities with unrealized losses	$	509,788	$	(36,681	)		245	$	1,012,964	$	(180,014	)		170	$	1,522,752	$	(216,695	)		415
HTM securities:
Federal agency	$	-	$	-			-	$	79,322	$	(20,678	)		4	$	79,322	$	(20,678	)		4
Mortgage-backed		91,417		(9,096	)		21		138,936		(28,342	)		13		230,353		(37,438	)		34
Collateralized mortgage obligations		191,644		(13,863	)		47		48,289		(10,855	)		8		239,933		(24,718	)		55
State & municipal		110,727		(4,930	)		149		82,949		(19,315	)		76		193,676		(24,245	)		225
Total securities with unrealized losses	$	393,788	$	(27,889	)		217	$	349,496	$	(79,190	)		101	$	743,284	$	(107,079	)		318

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The Company does not believe the AFS securities that were in an unrealized loss position as of September 30, 2023 and December 31, 2022, which consisted of 412 and 415 individual securities, respectively, represented a credit loss impairment. AFS debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. As of September 30, 2023 and December 31, 2022, the majority of the AFS securities in an unrealized loss position consisted of debt securities issued by U.S. government agencies or U.S. government-sponsored enterprises that carry the explicit and/or implicit guarantee of the U.S. government, which are widely recognized as “risk- free” and have a long history of zero credit losses. Total gross unrealized losses were primarily attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. The Company does not intend to sell, nor is it more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, which may be at maturity. The Company elected to exclude accrued interest receivable (“AIR”) from the amortized cost basis of debt securities. AIR on AFS debt securities totaled $3.9 million at September 30, 2023 and $4.2 million at December 31, 2022 and is excluded from the estimate of credit losses and reported in the other assets financial statement line.

None of the Bank’s HTM debt securities were past due or on nonaccrual status as of September 30, 2023 and December 31, 2022. There was no accrued interest reversed against interest income for the three and nine months ended September 30, 2023 or the year ended December 31, 2022 as all securities remained on accrual status. In addition, there were no collateral-dependent HTM debt securities as of September 30, 2023 and December 31, 2022. As of September 30, 2023 and December 31, 2022, 66% and 70%, respectively, of the Company’s HTM debt securities were issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government, which are widely recognized as “risk-free,” and have a long history of zero credit losses. Therefore, the Company did not record an allowance for credit losses for these securities as of September 30, 2023 and December 31, 2022. The remaining HTM debt securities at September 30, 2023 and December 31, 2022 were comprised of state and municipal obligations with bond ratings of A to AAA. Utilizing the Current Expected Credit Losses (“CECL”) approach, the Company determined that the expected credit loss on its HTM municipal bond portfolio was immaterial and therefore no allowance for credit loss was recorded as of September 30, 2023 and December 31, 2022. AIR on HTM debt securities totaled $3.8 million at September 30, 2023 and December 31, 2022 and is excluded from the estimate of credit losses and reported in the other assets financial statement line.

6. Allowance for Credit Losses and Credit Quality of Loans

As described in Note 3 Recent Accounting Pronouncements, the Company’s adoption of ASU 2022-02 resulted in an insignificant change to its methodology for estimating the allowance for credit losses on TDRs. The Day 1 decrease in allowance for credit loss on TDR loans relating to adoption of ASU 2022-02 was $0.6 million.

The allowance for credit losses totaled $114.6 million at September 30, 2023, compared to $100.8 million at December 31, 2022. The allowance for credit losses as a percentage of loans was 1.19% at September 30, 2023, compared to 1.24% at December 31, 2022.

During the first quarter of 2023, the Company made adjustments to the class segments within the portfolios to better align risk characteristics and reflect the monitoring and assessment of risks as the portfolios continue to evolve. Paycheck Protection Program was consolidated with Commercial & Industrial, as the portfolio had decreased to less than $1 million and no longer warranted a material class segment. The Other Consumer class segment was further separated into Residential Solar and Other Consumer. The growth in our Residential Solar loans warranted evaluation of this class separately from the Other Consumer class segments. The change to the class segments was applied retrospectively and did not have a significant impact on the allowance for loan losses. The following table illustrates the portfolio and class segments for the Company’s loan portfolio:

Portfolio Segment	Class
Commercial Loans	Commercial & Industrial
	Commercial Real Estate
Consumer Loans	Auto
	Residential Solar
	Other Consumer
Residential Loans

The allowance for credit losses calculation incorporated a 6-quarter forecast period to account for forecast economic conditions under each scenario utilized in the measurement. For periods beyond the 6-quarter forecast, the model reverts to long-term economic conditions over a 4-quarter reversion period on a straight-line basis. The Company considers a baseline, upside and downside economic forecast in measuring the allowance.

The quantitative model as of September 30, 2023 incorporated a baseline economic outlook along with an alternative downside scenario sourced from a reputable third-party to accommodate other potential economic conditions in the model, particularly significant unknowns relating to downside risks as of the measurement date. The baseline outlook projected a relatively low unemployment rate of 3.7%, rising modestly to 4.13% by the end of the forecast period. Northeast GDP’s annualized growth (on a quarterly basis) was expected to start the fourth quarter of 2023 at 3.5%, decreasing slightly to 2.9%, and then increasing to 3.8% by the end of the forecast period. Other utilized economic variables remained stable overall, with outlooks for annualized growth in retail sales improving, business output slightly deteriorating, and housing starts staying relatively unchanged. Key assumptions in the baseline economic outlook include the economy being at full employment in the coming quarters, recent bank failures not being symptomatic of broader issues in the financial system, and the reduction in the Federal Reserve’s balance sheet remaining on autopilot. The alternative downside scenario assumes deteriorated economic conditions from the baseline outlook. Under this scenario, northeast unemployment increases to 5.1% in the fourth quarter of 2023 and rises to a peak of 6.9% in the fourth quarter of 2024. These scenarios and their respective weightings are evaluated at each measurement date and reflect management’s expectations as of September 30, 2023. At September 30, 2023, the weightings were 70%, 0%, and 30% for the baseline, upside and downside economic forecasts, respectively. Qualitative adjustments were made for isolated model limitations related to modeled inputs given abnormally high historical retail sales and business output growth rates in prior quarters along with low unemployment. Additionally, a qualitative adjustment for inflation is applied to adjust for potential model limitations arising from the use of a macroeconomic variable denominated in nominal dollar terms as well as a qualitative adjustment for potential weakness in auto and commercial real estate collateral values. These factors were considered through separate quantitative processes and incorporated into the estimate of current expected credit losses at September 30, 2023.

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The quantitative model as of June 30, 2023 incorporated a baseline economic outlook along with an alternative downside scenario sourced from a reputable third-party to accommodate other potential economic conditions in the model, particularly significant unknowns relating to downside risks as of the measurement date. The baseline outlook reflected an unemployment rate environment at pre-coronavirus (“COVID-19”) pandemic levels of 3.8% and increasing gradually to 4.2% by the end of the forecast period. Northeast GDP’s annualized growth (on a quarterly basis) was expected to start the third quarter of 2023 at about 3.6% and reach 4.1% by the end of the forecast period. Other utilized economic variables worsened overall, with outlooks for annualized growth in retail sales and business output declining from the prior quarter and housing starts staying relatively unchanged. Key assumptions in the baseline economic outlook include the economy being at full employment in the coming quarters, recent bank failures not being symptomatic of broader issues in the financial system, and the reduction in the Federal Reserve’s balance sheet remaining on autopilot. The alternative downside scenario assumes deteriorated economic conditions from the baseline outlook. Under this scenario, northeast unemployment increases to 5.2% in the third quarter of 2023 and rises to a peak of 7.0% in the third quarter of 2024. These scenarios and their respective weightings are evaluated at each measurement date and reflect management’s expectations as of June 30, 2023. At June 30, 2023, the weightings were 60%, 0% and 40% for the baseline, upside and downside economic forecasts, respectively. Qualitative adjustments were made for isolated model limitations related to modeled inputs given abnormally high retail sales and business output growth rates in prior quarters along with low unemployment. Additionally, a qualitative adjustment for inflation is applied to adjust for potential model limitations arising from the use of a macroeconomic variable denominated in nominal dollar terms as well as a qualitative adjustment for potential weakness in auto collateral values. These factors were considered through separate quantitative processes and incorporated into the estimate of current expected credit losses at June 30, 2023.

The quantitative model as of December 31, 2022 incorporated a baseline economic outlook along with an alternative downside scenario sourced from a reputable third-party to accommodate other potential economic conditions in the model. At December 31, 2022, the weightings were 50%, 0% and 50% for the baseline, upside and downside economic forecasts, respectively. The baseline outlook reflected an unemployment rate environment initially around pre-COVID-19 levels at 3.9% that increases slightly during the forecast period to 4.0%. Northeast GDP’s annualized growth (on a quarterly basis) was expected to start the first quarter of 2023 at approximately 3.9% and hovering around 4.6% by the end of the forecast period. Other utilized economic variables have generally deteriorated in their respective forecasts, with retail sales and housing starts forecasts declining from the prior year. Key assumptions in the baseline economic outlook included a full employment economy being realized in the near future, continued tapering of the Federal Reserve balance sheet, an increasing yield on ten-year treasury securities, and a gradual decline in global oil prices. The alternative downside scenario assumed deteriorated economic and pandemic related conditions from the baseline outlook. Under this scenario, northeast unemployment rises from 3.9% in the fourth quarter of 2022 to a peak of 6.9% in the first quarter of 2024. These scenarios and their respective weightings are evaluated at each measurement date and reflect management’s expectations as of December 31, 2022. Additional adjustments were made for factors not incorporated in the forecasts or the model, such as loss rate expectations for certain loan pools, considerations for inflation, and recent trends in asset value indices. Additional monitoring for industry concentrations, loan growth, and policy exceptions was also conducted. All these factors were considered through separate quantitative processes and incorporated when applicable into the estimate of current expected credit losses at December 31, 2022.

There were $219.5 million of PCD loans acquired from Salisbury during the three and nine months ended September 30, 2023 which resulted in an allowance for credit losses at acquisition of $5.8 million. There were no loans purchased with credit deterioration during the year ended December 31, 2022. During 2023, the Company purchased $2.4 million of residential loans at a 7.01% premium with a $17 thousand allowance for credit losses recorded for these loans. During 2022, the Company purchased $11.5 million of residential loans at a 1.53% premium and $50.1 million in consumer loans at par with an allowance for credit losses recorded on the purchase date of $3.2 million.

The Company made a policy election to report AIR in the other assets line item on the balance sheet. AIR on loans totaled $32.5 million at September 30, 2023 and $25.0 million at December 31, 2022 and there was no estimated allowance for credit losses related to AIR as of September 30, 2023 and December 31, 2022.

16

The following tables present the activity in the allowance for credit losses by our portfolio segments:

(In thousands)	Commercial Loans			Consumer Loans			Residential			Total
Balance as of June 30, 2023	$	36,963		$	47,883		$	15,554		$	100,400
Allowance for credit loss on PCD acquired loans		5,300			19			453			5,772
Charge-offs		(138	)		(6,167	)		(16	)		(6,321	)
Recoveries		474			1,549			94			2,117
Provision		4,121			3,990			4,522			12,633
Ending balance as of September 30, 2023	$	46,720		$	47,274		$	20,607		$	114,601
Balance as of June 30, 2022	$	32,358		$	44,940		$	16,302		$	93,600
Charge-offs		(624	)		(3,951	)		(118	)		(4,693	)
Recoveries		1,282			1,924			203			3,409
Provision		(60	)		5,397			(853	)		4,484
Ending balance as of September 30, 2022	$	32,956		$	48,310		$	15,534		$	96,800

(In thousands)	Commercial Loans			Consumer Loans			Residential			Total
Balance as of January 1, 2023 (after adoption of ASU 2022-02)	$	34,662		$	50,951		$	14,539		$	100,152
Allowance for credit loss on PCD acquired loans		5,300			19			453			5,772
Charge-offs		(514	)		(16,346	)		(460	)		(17,320	)
Recoveries		1,112			4,367			370			5,849
Provision		6,160			8,283			5,705			20,148
Ending balance as of September 30, 2023	$	46,720		$	47,274		$	20,607		$	114,601
Balance as of December 31, 2021	$	28,941		$	44,253		$	18,806		$	92,000
Charge-offs		(1,659	)		(11,051	)		(520	)		(13,230	)
Recoveries		2,212			5,693			655			8,560
Provision		3,462			9,415			(3,407	)		9,470
Ending balance as of September 30, 2022	$	32,956		$	48,310		$	15,534		$	96,800

The allowance for credit losses as of September 30, 2023 increased compared to the allowance estimates as of December 31, 2022 and June 30, 2023 due to the day 1 $14.5 million of allowance for acquired Salisbury loans which included both the $8.8 million of non-PCD allowance recognized through the provision for loan losses and the $5.8 million of PCD allowance reclassified from loans. The increase in the allowance for credit losses from December 31, 2022 and June 30, 2023 to September 30, 2023 was due to an increase in loan balances and a modest deterioration in the economic forecast. The provision expense for the three and nine months ended September 30, 2023 includes the $8.8 million of acquisition-related provision for credit losses.

17

Individually Evaluated Loans

As of September 30, 2023, there was one relationship identified to be evaluated for loss on an individual basis which had an amortized cost basis of $1.9 million, with no allowance for credit loss. As of December 31, 2022, two different relationships were identified to be evaluated for loss on an individual basis, which in aggregate, had an amortized cost basis of $2.4 million, with no allowance for credit loss.

The following table sets forth information with regard to past due and nonperforming loans by loan segment:

(In thousands)	31-60 Days Past Due Accruing		61-90 Days Past Due Accruing		Greater Than 90 Days Past Due Accruing		Total Past Due Accruing		Nonaccrual		Current		Recorded Total Loans
As of September 30, 2023
Commercial loans:
C&I	$	737	$	99	$	-	$	836	$	3,753	$	1,456,241	$	1,460,830
CRE		19,661		18		-		19,679		4,660		3,375,132		3,399,471
Total commercial loans	$	20,398	$	117	$	-	$	20,515	$	8,413	$	4,831,373	$	4,860,301
Consumer loans:
Auto	$	8,974	$	1,402	$	514	$	10,890	$	1,652	$	1,056,554	$	1,069,096
Residential solar		3,449		938		506		4,893		373		928,816		934,082
Other consumer		2,594		1,498		1,496		5,588		402		186,214		192,204
Total consumer loans	$	15,017	$	3,838	$	2,516	$	21,371	$	2,427	$	2,171,584	$	2,195,382
Residential	$	4,075	$	326	$	1,012	$	5,413	$	9,896	$	2,596,383	$	2,611,692
Total loans	$	39,490	$	4,281	$	3,528	$	47,299	$	20,736	$	9,599,340	$	9,667,375

(In thousands)	31-60 Days Past Due Accruing		61-90 Days Past Due Accruing		Greater Than 90 Days Past Due Accruing		Total Past Due Accruing		Nonaccrual		Current		Recorded Total Loans
As of December 31, 2022
Commercial loans:
C&I	$	342	$	99	$	4	$	445	$	2,244	$	1,238,468	$	1,241,157
CRE		336		96		-		432		5,780		2,689,196		2,695,408
Total commercial loans	$	678	$	195	$	4	$	877	$	8,024	$	3,927,664	$	3,936,565
Consumer loans:
Auto	$	8,640	$	1,393	$	785	$	10,818	$	1,494	$	950,389	$	962,701
Residential solar		2,858		731		474		4,063		79		852,656		856,798
Other consumer		3,483		1,838		1,789		7,110		94		272,384		279,588
Total consumer loans	$	14,981	$	3,962	$	3,048	$	21,991	$	1,667	$	2,075,429	$	2,099,087
Residential	$	2,496	$	555	$	771	$	3,822	$	7,542	$	2,103,131	$	2,114,495
Total loans	$	18,155	$	4,712	$	3,823	$	26,690	$	17,233	$	8,106,224	$	8,150,147

As of September 30, 2023 and December 31, 2022, there were $1.9 million and $1.1 million, respectively, of loans in nonaccrual that were specifically evaluated for individual expected credit loss without an allowance for credit losses.

18

Credit Quality Indicators

The Company has developed an internal loan grading system to evaluate and quantify the Company’s loan portfolio with respect to quality and risk. The system focuses on, among other things, financial strength of borrowers, experience and depth of borrower’s management, primary and secondary sources of repayment, payment history, nature of the business and outlook on particular industries. The internal grading system enables the Company to monitor the quality of the entire loan portfolio on a consistent basis and provide management with an early warning system, enabling timely recognition and response to problem loans and potential problem loans.

Commercial Grading System

For Commercial and Industrial (“C&I”) and Commercial Real Estate (“CRE”) loans, the Company uses a grading system that relies on quantifiable and measurable characteristics when available. This includes comparison of financial strength to available industry averages, comparison of transaction factors (loan terms and conditions) to loan policy and comparison of credit history to stated repayment terms and industry averages. Some grading factors are necessarily more subjective such as economic and industry factors, regulatory environment and management. C&I and CRE loans are graded Doubtful, Substandard, Special Mention and Pass.

Doubtful

A Doubtful loan has a high probability of total or substantial loss, but because of specific pending events that may strengthen the asset, its classification as a loss is deferred. Doubtful borrowers are usually in default, lack adequate liquidity or capital and lack the resources necessary to remain an operating entity. Pending events can include mergers, acquisitions, liquidations, capital injections, the perfection of liens on additional collateral, the valuation of collateral and refinancing. Generally, pending events should be resolved within a relatively short period and the ratings will be adjusted based on the new information. Nonaccrual treatment is required for Doubtful assets because of the high probability of loss.

Substandard

Substandard loans have a high probability of payment default or they have other well-defined weaknesses. They require more intensive supervision by bank management. Substandard loans are generally characterized by current or expected unprofitable operations, inadequate debt service coverage, inadequate liquidity or marginal capitalization. Repayment may depend on collateral or other credit risk mitigants. For some Substandard loans, the likelihood of full collection of interest and principal may be in doubt and those loans should be placed on nonaccrual. Although Substandard assets in the aggregate will have a distinct potential for loss, an individual asset’s loss potential does not have to be distinct for the asset to be rated Substandard.

Special Mention

Special Mention loans have potential weaknesses that may, if not checked or corrected, weaken the asset or inadequately protect the Company’s position at some future date. These loans pose elevated risk, but their weakness does not yet justify a Substandard classification. Borrowers may be experiencing adverse operating trends (i.e., declining revenues or margins) or may be struggling with an ill-proportioned balance sheet (i.e., increasing inventory without an increase in sales, high leverage, and/or tight liquidity). Adverse economic or market conditions, such as interest rate increases or the entry of a new competitor, may also support a Special Mention rating. Although a Special Mention loan has a higher probability of default than a Pass asset, its default is not imminent.

Pass

Loans graded as Pass encompass all loans not graded as Doubtful, Substandard or Special Mention. Pass loans are in compliance with loan covenants and payments are generally made as agreed. Pass loans range from superior quality to fair quality. Pass loans also include any portion of a government guaranteed loan, including Paycheck Protection Program loans.

19

Consumer and Residential Grading System

Consumer and Residential loans are graded as either Nonperforming or Performing.

Nonperforming

Nonperforming loans are loans that are (1) over 90 days past due and interest is still accruing or (2) on nonaccrual status.

Performing

All loans not meeting any of the above criteria are considered Performing.

The following tables illustrate the Company’s credit quality by loan class by vintage and, beginning in 2023 with the Company’s January 1, 2023 adoption of ASU 2022-02, also includes gross charge-offs by loan class by vintage for the nine months ended September 30, 2023. Included in other consumer gross charge-offs, the Company recorded $0.2 million in overdrawn deposit accounts reported as 2022 originations and $0.5 million in overdrawn deposit accounts reported as 2023 originations, for the nine months ended September 30, 2023.

(In thousands)	2023			2022			2021			2020			2019			Prior			Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of September 30, 2023
C&I
By internally assigned grade:
Pass	$	171,431		$	302,023		$	257,555		$	164,254		$	83,519		$	75,504		$	351,672	$	2,666	$	1,408,624
Special mention		-			3,110			415			3,494			655			11,151			10,676		-		29,501
Substandard		1,521			8			705			312			2,285			4,317			13,413		14		22,575
Doubtful		-			1			66			58			4			1			-		-		130
Total C&I	$	172,952		$	305,142		$	258,741		$	168,118		$	86,463		$	90,973		$	375,761	$	2,680	$	1,460,830
Current-period gross charge-offs	$	-		$	(1	)	$	(5	)	$	(65	)	$	-		$	(329	)	$	-	$	-	$	(400	)
CRE
By internally assigned grade:
Pass	$	278,517		$	510,690		$	549,056		$	470,616		$	329,634		$	775,502		$	276,477	$	67,162	$	3,257,654
Special mention		3,678			2,236			9,041			8,082			13,915			21,829			8,250		-		67,031
Substandard		384			191			6,887			3,202			3,093			44,750			1,549		14,730		74,786
Total CRE	$	282,579		$	513,117		$	564,984		$	481,900		$	346,642		$	842,081		$	286,276	$	81,892	$	3,399,471
Current-period gross charge-offs	$	-		$	-		$	-		$	-		$	(114	)		-		$	-	$	-	$	(114	)
Auto
By payment activity:
Performing	$	369,178		$	395,362		$	176,026		$	49,917		$	56,455		$	19,979		$	13	$	-	$	1,066,930
Nonperforming		143			812			674			237			192			108			-		-		2,166
Total auto	$	369,321		$	396,174		$	176,700		$	50,154		$	56,647		$	20,087		$	13	$	-	$	1,069,096
Current-period gross charge-offs	$	(75	)	$	(827	)	$	(865	)	$	(283	)	$	(219	)	$	(243	)	$	-	$	-	$	(2,512	)
Residential solar
By payment activity:
Performing	$	155,132		$	438,855		$	182,153		$	67,562		$	48,362		$	41,139		$	-	$	-	$	933,203
Nonperforming		-			594			59			56			72			98			-		-		879
Total residential solar	$	155,132		$	439,449		$	182,212		$	67,618		$	48,434		$	41,237		$	-	$	-	$	934,082
Current-period gross charge-offs	$	(121)		$	(1,244	)	$	(696	)	$	(45	)	$	(447	)	$	(193	)	$	-	$	-	$	(2,746	)
Other consumer
By payment activity:
Performing	$	11,221		$	31,813		$	68,732		$	24,152		$	17,234		$	18,599		$	18,552	$	3	$	190,306
Nonperforming		-			490			742			147			139			347			1		32		1,898
Total other consumer	$	11,221		$	32,303		$	69,474		$	24,299		$	17,373		$	18,946		$	18,553	$	35	$	192,204
Current-period gross charge-offs	$	(561	)	$	(2,788	)	$	(5,742	)	$	(1,099	)	$	(595	)	$	(303	)	$	-	$	-	$	(11,088	)
Residential
By payment activity:
Performing	$	149,700		$	363,044		$	457,105		$	272,533		$	171,854		$	904,002		$	265,049	$	17,497	$	2,600,784
Nonperforming		144			442			1,226			314			462			8,320			-		-		10,908
Total residential	$	149,844		$	363,486		$	458,331		$	272,847		$	172,316		$	912,322		$	265,049	$	17,497	$	2,611,692
Current-period gross charge-offs	$	-		$	-		$	(81	)	$	-		$	-		$	(379	)	$	-	$	-	$	(460	)
Total loans	$	1,141,049		$	2,049,671		$	1,710,442		$	1,064,936		$	727,875		$	1,925,646		$	945,652	$	102,104	$	9,667,375
Current-period gross charge-offs	$	(757	)	$	(4,860	)	$	(7,389	)	$	(1,492	)	$	(1,375	)	$	(1,447	)	$	-	$	-	$	(17,320	)

20

(In thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2022
C&I
By internally assigned grade:
Pass	$	296,562	$	252,480	$	164,976	$	91,497	$	39,394	$	32,413	$	327,166	$	3,133	$	1,207,621
Special mention		1,044		524		4,531		194		1,108		417		5,234		-		13,052
Substandard		76		459		231		3,098		91		3,969		12,348		163		20,435
Doubtful		-		20		-		28		-		1		-		-		49
Total C&I	$	297,682	$	253,483	$	169,738	$	94,817	$	40,593	$	36,800	$	344,748	$	3,296	$	1,241,157
CRE
By internally assigned grade:
Pass	$	374,313	$	465,990	$	439,012	$	333,568	$	217,141	$	566,783	$	201,563	$	24,735	$	2,623,105
Special mention		605		764		868		2,641		4,649		24,023		850		-		34,400
Substandard		309		-		2,316		3,937		1,822		23,819		713		4,987		37,903
Total CRE	$	375,227	$	466,754	$	442,196	$	340,146	$	223,612	$	614,625	$	203,126	$	29,722	$	2,695,408
Auto
By payment activity:
Performing	$	488,776	$	239,090	$	75,853	$	99,615	$	44,061	$	13,027	$	-	$	-	$	960,422
Nonperforming		590		655		404		385		216		29		-		-		2,279
Total auto	$	489,366	$	239,745	$	76,257	$	100,000	$	44,277	$	13,056	$	-	$	-	$	962,701
Residential solar
By Payment Activity:
Performing	$	485,942	$	193,971	$	74,532	$	54,662	$	36,119	$	11,019	$	-	$	-	$	856,245
Nonperforming		320		98		50		25		16		44		-		-		553
Total residential solar	$	486,262	$	194,069	$	74,582	$	54,687	$	36,135	$	11,063	$	-	$	-	$	856,798
Other consumer
By payment activity:
Performing	$	52,545	$	110,624	$	36,412	$	27,383	$	15,536	$	15,735	$	19,218	$	250	$	277,703
Nonperforming		238		838		395		247		57		87		8		15		1,885
Total other consumer	$	52,783	$	111,462	$	36,807	$	27,630	$	15,593	$	15,822	$	19,226	$	265	$	279,588
Residential
By payment activity:
Performing	$	251,012	$	349,498	$	212,161	$	156,957	$	157,755	$	717,621	$	233,056	$	28,122	$	2,106,182
Nonperforming		267		384		408		555		1,028		5,651		-		20		8,313
Total residential	$	251,279	$	349,882	$	212,569	$	157,512	$	158,783	$	723,272	$	233,056	$	28,142	$	2,114,495
Total loans	$	1,952,599	$	1,615,395	$	1,012,149	$	774,792	$	518,993	$	1,414,638	$	800,156	$	61,425	$	8,150,147

21

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

The allowance for losses on unfunded commitments totaled $4.8 million as of September 30, 2023, which included $0.8 million of acquisition-related provision for unfunded loan commitments, compared to $5.1 million as of December 31, 2022.

Loan Modifications to Borrowers Experiencing Financial Difficulties

As discussed in Note 3 Recent Accounting Pronouncements, the Company’s January 1, 2023 adoption of ASU 2022-02 eliminates the recognition and measurement of TDRs. Upon adoption of this guidance, the Company no longer recognizes an allowance for credit losses for the economic concession granted to a borrower for changes in the timing and amount of contractual cash flows when a loan is restructured. The adoption of ASU 2022-02 resulted in a change to reporting for loan modifications to borrowers experiencing financial difficulties. With the adoption of ASU 2022-02 these modifications required enhanced reporting on the type of modifications granted and the financial magnitude of the concessions granted.

When the Company modifies a loan with financial difficulty, such modifications generally include one or a combination of the following: an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a change in scheduled payment amount; or principal forgiveness.

The following table shows the amortized cost basis at the end of the reporting period of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted:

	Three Months Ended September 30, 2023
	Interest Rate Reduction					Term Extension					Combination - Term Extension and Interest Rate Reduction
(Dollars in thousands)	Amortized Cost		% of Total Class of Financing Receivables			Amortized Cost		% of Total Class of Financing Receivables			Amortized Cost		% of Total Class of Financing Receivables
Residential	$	31		0.001	%	$	145		0.006	%	$	-		-
Total	$	31				$	145				$	-

	Nine Months Ended September 30, 2023
	Interest Rate Reduction					Term Extension					Combination - Term Extension and Interest Rate Reduction
(Dollars in thousands)	Amortized Cost		% of Total Class of Financing Receivables			Amortized Cost		% of Total Class of Financing Receivables			Amortized Cost		% of Total Class of Financing Receivables
Residential	$	31		0.001	%	$	386		0.015	%	$	165		0.006	%
Total	$	31				$	386				$	165

22

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulties:

	Three Months Ended September 30, 2023
Loan Type	Term Extension	Interest Rate Reduction
Residential	Added a weighted-average 17 years to the life of loans, which reduced monthly payment amounts for the borrowers.	Interest rates were reduced by an average of one percent

	Nine Months Ended September 30, 2023
Loan Type	Term Extension	Interest Rate Reduction
Residential	Added a weighted-average 15 years to the life of loans, which reduced monthly payment amounts for the borrowers.	Interest rates were reduced by an average of two and a quarter percent

The following table depicts the financing receivables that had a payment default that were modified to borrowers experiencing financial difficulty since the adoption of ASU 2022-02 effective January 1, 2023:

	Three Months Ended September 30, 2023
	Amortized Cost Basis of Modified Financing Receivables that Subsequently Defaulted
(In thousands)	Interest Rate Reduction
Residential		$	31
Total		$	31

	Nine Months Ended September 30, 2023
	Amortized Cost Basis of Modified Financing Receivables that Subsequently Defaulted
(In thousands)	Interest Rate Reduction
Residential		$	31
Total		$	31

The following table depicts the performance of loans that have been modified since the adoption of ASU 2022-02 effective January 1, 2023:

	Payment Status (Amortized Cost Basis)
(In thousands)	Current		31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due
Three Months Ended September 30, 2023
Residential	$	145	$	31	$	-	$	-
Total	$	145	$	31	$	-	$	-

	Payment Status (Amortized Cost Basis)
(In thousands)	Current		31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due
Nine Months Ended September 30, 2023
Residential	$	549	$	31	$	-	$	-
Total	$	549	$	31	$	-	$	-

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Troubled Debt Restructuring

Prior to the adoption of ASU 2022-02 on January 1, 2023, the Company accounted for loan modifications to borrowers experiencing financial difficulty when concessions were granted as TDRs. The following tables are disclosures related to TDRs in prior periods.

The following table illustrates the recorded investments and number of modifications designated as TDRs, including the recorded investment in the loans prior to a modification and the recorded investment in the loans after restructuring:

	Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
(Dollars in thousands)	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Residential		6	$	613	$	682		10	$	829	$	928
Total TDRs		6	$	613	$	682		10	$	829	$	928

The following table illustrates the recorded investment and number of modifications for TDRs where a concession has been made and subsequently defaulted during the period:

	Three Months Ended September 30, 2022				Nine Months Ended September 30, 2022
(Dollars in thousands)	Number of Contracts		Recorded Investment		Number of Contracts		Recorded Investment
Commercial loans:
C&I		1	$	320		1	$	320
Total commercial loans		1	$	320		1	$	320
Consumer loans:
Auto		-	$	-		1	$	11
Total consumer loans		-	$	-		1	$	11
Residential		18	$	869		44	$	2,320
Total TDRs		19	$	1,189		46	$	2,651

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7. Defined Benefit Post-Retirement Plans

The Company has a qualified, noncontributory, defined benefit pension plan (the “Plan”) covering substantially all of its employees at September 30, 2023. Benefits paid from the Plan are based on age, years of service, compensation and social security benefits and are determined in accordance with defined formulas. The Company’s policy is to fund the Plan in accordance with Employee Retirement Income Security Act of 1974 standards. Assets of the Plan are invested in publicly traded stocks, bonds and mutual funds. In addition to the Plan, the Company provides supplemental employee retirement plans to certain current and former executives. The Company also assumed supplemental retirement plans for former executives of Alliance Financial Corporation (“Alliance”) when the Company acquired Alliance. These supplemental employee retirement plans and the Plan are collectively referred to herein as “Pension Benefits.”

In addition, the Company provides certain health care benefits for retired employees. Benefits were accrued over the employees’ active service period. Only employees that were employed by the Company on or before January 1, 2000 are eligible to receive post-retirement health care benefits. In addition, the Company assumed post-retirement medical life insurance benefits for certain Alliance employees, retirees and their spouses, if applicable, in the Alliance acquisition. These post-retirement benefits are referred to herein as “Other Benefits.”

Accounting standards require an employer to: (1) recognize the overfunded or underfunded status of defined benefit post-retirement plans, which is measured as the difference between plan assets at fair value and the benefit obligation, as an asset or liability in its balance sheet; (2) recognize changes in that funded status in the year in which the changes occur through comprehensive income; and (3) measure the defined benefit plan assets and obligations as of the date of its year-end balance sheet.

The Company made no voluntary contributions to the pension and other benefits plans during the three and nine months ended September 30, 2023 and 2022.

The components of expense for Pension Benefits and Other Benefits are set forth below:

	Pension Benefits						Other Benefits
	Three Months Ended September 30,						Three Months Ended September 30,
(In thousands)	2023			2022			2023			2022
Components of net periodic cost (benefit):
Service cost	$	476		$	506		$	1		$	2
Interest cost		999			690			56			42
Expected return on plan assets		(1,844	)		(2,220	)		-			-
Net amortization		669			183			(21	)		2
Total net periodic cost (benefit)	$	300		$	(841	)	$	36		$	46

	Pension Benefits						Other Benefits
	Nine Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2023			2022			2023			2022
Components of net periodic cost (benefit):
Service cost	$	1,440		$	1,574		$	3		$	6
Interest cost		3,019			2,078			168			124
Expected return on plan assets		(5,550	)		(6,676	)		-			-
Net amortization		2,009			553			(63	)		4
Total net periodic cost (benefit)	$	918		$	(2,471	)	$	108		$	134

The service cost component of the net periodic cost (benefit) is included in Salaries and Employee Benefits and the interest cost, expected return on plan assets and net amortization components are included in Other Noninterest Expense on the unaudited interim consolidated statements of income.

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8. Earnings Per Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity (such as the Company’s dilutive stock options and restricted stock units).

The following is a reconciliation of basic and diluted EPS and the anti-dilutive stock options and restricted stock outstanding for the periods presented in the unaudited interim consolidated statements of income:

	Three Months Ended September 30,
(In thousands, except per share data)	2023		2022
Basic EPS:
Weighted average common shares outstanding		45,163		42,838
Net income available to common stockholders	$	24,606	$	38,973
Basic EPS	$	0.54	$	0.91
Diluted EPS:
Weighted average common shares outstanding		45,163		42,838
Dilutive effect of common stock options and restricted stock		236		273
Weighted average common shares and common share equivalents		45,399		43,111
Net income available to common stockholders	$	24,606	$	38,973
Diluted EPS	$	0.54	$	0.90
Anti-dilutive stock options and restricted stock outstanding		27		2

	Nine Months Ended September 30,
(In thousands, except per share data)	2023		2022
Basic EPS:
Weighted average common shares outstanding		43,662		42,940
Net income available to common stockholders	$	88,336	$	115,874
Basic EPS	$	2.02	$	2.70
Diluted EPS:
Weighted average common shares outstanding		43,662		42,940
Dilutive effect of common stock options and restricted stock		234		254
Weighted average common shares and common share equivalents		43,896		43,194
Net income available to common stockholders	$	88,336	$	115,874
Diluted EPS	$	2.01	$	2.68
Anti-dilutive stock options and restricted stock outstanding		25		2

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9. Reclassification Adjustments Out of Other Comprehensive Income (Loss)

The following table summarizes the reclassification adjustments out of AOCI:

Detail About AOCI Components	Amount Reclassified from AOCI						Affected Line Item in the Consolidated Statements of Comprehensive Income (Loss)
	Three Months Ended
(In thousands)	September 30, 2023			September 30, 2022
AFS securities:
Amortization of unrealized gains related to securities transfer	$	105		$	125		Interest income
Tax effect	$	(26	)	$	(31	)	Income tax (benefit)
Net of tax	$	79		$	94
Pension and other benefits:
Amortization of net losses	$	638		$	156		Other noninterest expense
Amortization of prior service costs		10			29		Other noninterest expense
Tax effect	$	(162	)	$	(47	)	Income tax (benefit)
Net of tax	$	486		$	138
Total reclassifications, net of tax	$	565		$	232

Detail About AOCI Components	Amount Reclassified from AOCI						Affected Line item in the Consolidated Statements of  Comprehensive Income (Loss)
	Nine Months Ended
(In thousands)	September 30, 2023			September 30, 2022
AFS securities:
Losses on AFS securities	$	9,450		$	-		Net securities (gains) losses
Amortization of unrealized gains related to securities transfer		328			393		Interest income
Tax effect	$	(2,445	)	$	(98	)	Income tax (benefit)
Net of tax	$	7,333		$	295
Pension and other benefits:
Amortization of net losses	$	1,918		$	470		Other noninterest expense
Amortization of prior service costs		28			87		Other noninterest expense
Tax effect	$	(487	)	$	(140	)	Income tax (benefit)
Net of tax	$	1,459		$	417
Total reclassifications, net of tax	$	8,792		$	712

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10. Derivative Instruments and Hedging Activities

The Company is exposed to certain risks 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, primarily by managing the amount, sources and duration of its assets and liabilities and through the use of derivative instruments. Specifically, the Company may enter 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. Generally, the Company may use derivative financial instruments to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments. Currently, the Company has interest rate derivatives that result from a service provided to certain qualifying customers and, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. The Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions.

Derivatives Not Designated as Hedging Instruments

The Company enters into interest rate swaps to facilitate customer transactions and meet their financing needs. These swaps are considered derivatives, but are not designated in hedging relationships. These instruments have interest rate and credit risk associated with them. To mitigate the interest rate risk, the Company enters into offsetting interest rate swaps with counterparties. The counterparty swaps are also considered derivatives and are also not designated in hedging relationships. Interest rate swaps are recorded within other assets or other liabilities on the consolidated balance sheet at their estimated fair value. Changes to the fair value of assets and liabilities arising from these derivatives are included, net, in other operating income in the consolidated statements of income.

The Company is subject to over-the-counter derivative clearing requirements, which require certain derivatives to be cleared through central clearing houses. Accordingly, the Company clears certain derivative transactions through the Chicago Mercantile Exchange Clearing House (“CME”). The CME requires the Company to post initial and variation margin payments to mitigate the risk of non-payment, the latter of which is received or paid daily based on the net asset or liability position of the contracts. A daily settlement occurs through the CME for changes in the fair value of centrally cleared derivatives. Not all of the derivatives are required to be cleared through the daily clearing agent. As a result, the total fair values of loan level derivative assets and liabilities recognized on the Company’s financial statements are not equal and offsetting.

In 2017, the U.K. Financial Conduct Authority announced its intention to stop compelling banks to submit rates for the calculation of London Interbank Offered Rate (“LIBOR”) after 2021. In 2022, the Federal Reserve adopted a final rule implementing the Adjustable Interest Rate (LIBOR) Act by identifying benchmark rates based on the Secured Overnight Financing Rate (“SOFR”) that replaced LIBOR in certain financial contracts after June 30, 2023. As of September 30, 2023, the Company has transitioned all of its financial instruments to an alternative benchmark rate.

As of September 30, 2023 and December 31, 2022, the Company had twelve and fifteen risk participation agreements, respectively, with financial institution counterparties for interest rate swaps related to participated loans. Risk participation agreements provide credit protection to the financial institution that originated the swap transaction should the borrower fail to perform on its obligation. The Company enters into both risk participation agreements in which it purchases credit protection from other financial institutions and those in which it provides credit protection to other financial institutions.

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The following table summarizes the derivatives outstanding:

(In thousands)	Notional Amount		Balance Sheet Location	Fair Value		Notional Amount		Balance Sheet Location	Fair Value
As of September 30, 2023
Derivatives not designated as hedging instruments
Interest rate derivatives	$	1,304,523	Other assets	$	143,716	$	1,304,523	Other liabilities	$	143,596
Risk participation agreements		62,467	Other assets		7		16,716	Other liabilities		3
Total derivatives not designated as hedging instruments				$	143,723				$	143,599
Netting adjustments(1)					30,583					-
Net derivatives in the balance sheet				$	113,140				$	143,599
Derivatives not offset on the balance sheet				$	143				$	143
Cash collateral(2)					-					-
Net derivative amounts				$	112,997				$	143,456
As of December 31, 2022
Derivatives not designated as hedging instruments
Interest rate derivatives	$	1,275,708	Other assets	$	117,247	$	1,275,708	Other liabilities	$	117,247
Risk participation agreements		88,963	Other assets		47		18,421	Other liabilities		10
Total derivatives not designated as hedging instruments				$	117,294				$	117,257
Netting adjustments(1)					24,109					-
Net derivatives in the balance sheet				$	93,185				$	117,257
Derivatives not offset on the balance sheet				$	352				$	352
Cash collateral(2)					-					-
Net derivative amounts				$	92,833				$	116,905

(1) Netting adjustments represents the amounts recorded to convert derivatives assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance on the settle to market rules for cleared derivatives. The CME legally characterizes the variation margin posted between counterparties as settlements of the outstanding derivative contracts instead of cash collateral.

(2) Cash collateral represents the amount that cannot be used to offset our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The other collateral consists of securities and is exchanged under bilateral collateral and master netting agreements that allow us to offset the net derivative position with the related collateral. The application of the other collateral cannot reduce the net derivative position below zero. Therefore, excess other collateral, if any, is not reflected above.

The following table indicates the gain or loss recognized in income on derivatives not designated as a hedging relationship:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2023			2022			2023			2022
Derivatives not designated as hedging instruments:
(Decrease) in other income	$	(65	)	$	(33	)	$	(65	)	$	(152	)

11. Fair Value Measurements and Fair Value of Financial Instruments

GAAP states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value measurements are not adjusted for transaction costs. A fair value hierarchy exists within GAAP that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

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A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The types of instruments valued based on quoted market prices in active markets include most U.S. government and agency securities, many other sovereign government obligations, liquid mortgage products, active listed equities and most money market securities. Such instruments are generally classified within Level 1 or Level 2 of the fair value hierarchy. The Company does not adjust the quoted prices for such instruments.

The types of instruments valued based on quoted prices in markets that are not active, broker or dealer quotations or quote from alternative pricing sources with reasonable levels of price transparency include most investment-grade and high-yield corporate bonds, less liquid mortgage products, less liquid agency securities, less liquid listed equities, state, municipal and provincial obligations and certain physical commodities. Such instruments are generally classified within Level 2 of the fair value hierarchy. Certain common equity securities are reported at fair value utilizing Level 1 inputs (exchange quoted prices). Other investment securities are reported at fair value utilizing Level 1 and Level 2 inputs. The prices for Level 2 instruments are obtained through an independent pricing service or dealer market participants with whom the Company has historically transacted both purchases and sales of investment securities. Prices obtained from these sources include prices derived from market quotations and matrix pricing. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. Management reviews the methodologies used by its third-party providers in pricing the securities.

Level 3 is for positions that are not traded in active markets or are subject to transfer restrictions. Valuations are adjusted to reflect illiquidity and/or non-transferability and such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate will be used. Management’s best estimate consists of both internal and external support on certain Level 3 investments. Subsequent to inception, management only changes Level 3 inputs and assumptions when corroborated by evidence such as transactions in similar instruments, completed or pending third-party transactions in the underlying investment or comparable entities, subsequent rounds of financing, recapitalizations and other transactions across the capital structure, offerings in the equity or debt markets and changes in financial ratios or cash flows.

The following tables set forth the Company’s financial assets and liabilities measured on a recurring basis that were accounted for at fair value. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

(In thousands)	Level 1		Level 2		Level 3		September 30, 2023
Assets:
AFS securities
U.S. treasury	$	121,595	$	-	$	-	$	121,595
Federal agency		-		203,756		-		203,756
State & municipal		-		83,285		-		83,285
Mortgage-backed		-		415,768		-		415,768
Collateralized mortgage obligations		-		533,411		-		533,411
Corporate		-		41,217		-		41,217
Total AFS securities	$	121,595	$	1,277,437	$	-	$	1,399,032
Equity securities		34,600		1,000		-		35,600
Derivatives		-		113,140		-		113,140
Total	$	156,195	$	1,391,577	$	-	$	1,547,772
Liabilities:
Derivatives	$	-	$	143,599	$	-	$	143,599
Total	$	-	$	143,599	$	-	$	143,599

(In thousands)	Level 1		Level 2		Level 3		December 31, 2022
Assets:
AFS securities
U.S. treasury	$	121,658	$	-	$	-	$	121,658
Federal agency		-		206,419		-		206,419
State & municipal		-		82,851		-		82,851
Mortgage-backed		-		473,694		-		473,694
Collateralized mortgage obligations		-		588,363		-		588,363
Corporate		-		54,240		-		54,240
Total AFS securities	$	121,658	$	1,405,567	$	-	$	1,527,225
Equity securities		29,784		1,000		-		30,784
Derivatives		-		93,185		-		93,185
Total	$	151,442	$	1,499,752	$	-	$	1,651,194
Liabilities:
Derivatives	$	-	$	117,257	$	-	$	117,257
Total	$	-	$	117,257	$	-	$	117,257

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GAAP requires disclosure of assets and liabilities measured and recorded at fair value on a non-recurring basis such as goodwill, loans held for sale, other real estate owned, collateral-dependent loans individually evaluated for expected credit losses and HTM securities. The non-recurring fair value measurements recorded during the nine month period ended September 30, 2023 and the year ended December 31, 2022 were related to loans individually evaluated for expected credit losses with fair value of $1.9 million and $1.1 million as of September 30, 2023 and December 31, 2022, respectively. The Company uses the fair value of underlying collateral, less costs to sell, to estimate the allowance for credit losses for individually evaluated collateral dependent loans. The appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses ranging from 10% to 50%. Based on the valuation techniques used, the fair value measurements for collateral dependent individually evaluated loans are classified as Level 3.

The following table sets forth information with regard to estimated fair values of financial instruments. This table excludes financial instruments for which the carrying amount approximates fair value. Financial instruments for which the fair value approximates carrying value include cash and cash equivalents, AFS securities, equity securities, accrued interest receivable, non-maturity deposits, short-term borrowings, accrued interest payable and derivatives.

			September 30, 2023				December 31, 2022
(In thousands)	Fair Value Hierarchy		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets:
HTM securities		2	$	914,520	$	783,986	$	919,517	$	812,647
Net loans		3		9,556,887		9,097,545		8,049,909		7,840,350
Financial liabilities:
Time deposits		2	$	1,344,199	$	1,301,989	$	433,772	$	413,868
Long-term debt		2		29,834		29,114		4,815		4,539
Subordinated debt		1		120,061		110,057		98,000		92,883
Junior subordinated debt		2		101,196		99,259		101,196		98,372

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For example, the Company has a substantial wealth operation that contributes net fee income annually. The wealth management operation is not considered a financial instrument and its value has not been incorporated into the fair value estimates. Other significant assets and liabilities include the benefits resulting from the low-cost funding of deposit liabilities as compared to the cost of borrowing funds in the market and premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimate of fair value.

HTM Securities

The fair value of the Company’s HTM securities is primarily measured using information from a third-party pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things.

Net Loans

Net loans include portfolio loans and loans held for sale. Loans were first segregated by type and then further segmented into fixed and variable rate and loan quality categories. Expected future cash flows were projected based on contractual cash flows, adjusted for estimated prepayments, and those expected future cash flows also includes credit risk, illiquidity risk and other market factors to calculate the exit price fair value in accordance with ASC 820.

Time Deposits

The fair value of time deposits was estimated using a discounted cash flow approach that applies prevailing market interest rates for similar maturity instruments. The fair values of the Company’s time deposit liabilities do not take into consideration the value of the Company’s long-term relationships with depositors, which may have significant value.

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Long-Term Debt

The fair value of long-term debt was estimated using a discounted cash flow approach that applies prevailing market interest rates for similar maturity instruments.

Subordinated Debt

The fair value of subordinated debt has been measured using the observable market price as of the period reported.

Junior Subordinated Debt

The fair value of junior subordinated debt has been estimated using a discounted cash flow analysis.

12. Commitments and Contingencies

The Company is a party to certain financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, unused lines of credit, standby letters of credit and certain agricultural real estate loans sold to investors with recourse, with the sold portion having a government guarantee that is assignable back to the Company upon repurchase of the loan in the event of default. The Company’s exposure to credit loss in the event of nonperformance by the other party to the commitments to extend credit, unused lines of credit, standby letters of credit and loans sold with recourse is represented by the contractual amount of those investments. The credit risk associated with commitments to extend credit and standby and commercial letters of credit is essentially the same as that involved with extending loans to customers and is subject to normal credit policies. Collateral may be obtained based on management’s assessment of the customer’s creditworthiness. Commitments to extend credit and unused lines of credit totaled $2.71 billion at September 30, 2023 and $2.42 billion at December 31, 2022.

Since many loan commitments, standby letters of credit and guarantees and indemnification contracts expire without being funded in whole or in part, the contract amounts are not necessarily indicative of future cash flows. The Company does not issue any guarantees that would require liability-recognition or disclosure, other than its standby letters of credit.

The Company guarantees the obligations or performance of customers by issuing standby letters of credit to third-parties. These standby letters of credit are generally issued in support of third-party debt, such as corporate debt issuances, industrial revenue bonds and municipal securities. The risk involved in issuing standby letters of credit is essentially the same as the credit risk involved in extending loan facilities to customers and letters of credit are subject to the same credit origination, portfolio maintenance and management procedures in effect to monitor other credit and off-balance sheet products. Typically, these instruments have one year expirations with an option to renew upon annual review; therefore, the total amounts do not necessarily represent future cash requirements. Standby letters of credit totaled $40.5 million at September 30, 2023 and $53.3 million at December 31, 2022. As of September 30, 2023 and December 31, 2022, the fair value of the Company’s standby letters of credit was not significant.

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NBT BANCORP INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The purpose of this discussion and analysis is to provide a concise description of the consolidated financial condition and results of operations of NBT Bancorp Inc. (“NBT”) and its wholly-owned subsidiaries, including NBT Bank, National Association (the “Bank”), NBT Financial Services, Inc. (“NBT Financial”) and NBT Holdings, Inc. (“NBT Holdings”) (collectively referred to herein as the “Company”). This discussion will focus on results of operations, financial condition, capital resources and asset/liability management. Reference should be made to the Company’s consolidated financial statements and footnotes thereto included in this Form 10‑Q as well as to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2022 for an understanding of the following discussion and analysis. Operating results for the three and nine month periods ending September 30, 2023 are not necessarily indicative of the results of the full year ending December 31, 2023 or any future period.

Forward-Looking Statements

Certain statements in this filing and future filings by the Company with the Securities and Exchange Commission (“SEC”), in the Company’s press releases or other public or stockholder communications or in oral statements made with the approval of an authorized executive officer, contain forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of phrases such as “anticipate,” “believe,” “expect,” “forecasts,” “projects,” “will,” “can,” “would,” “should,” “could,” “may,” or other similar terms. There are a number of factors, many of which are beyond the Company’s control, that could cause actual results to differ materially from those contemplated by the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) local, regional, national and international economic conditions, including actual or potential stress in the banking industry, and the impact they may have on the Company and its customers and the Company’s assessment of that impact; (2) changes in the level of nonperforming assets and charge-offs; (3) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (4) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board (“FRB”); (5) inflation, interest rate, securities market and monetary fluctuations; (6) political instability; (7) acts of war, including international military conflicts, or terrorism; (8) the timely development and acceptance of new products and services and the perceived overall value of these products and services by users; (9) changes in consumer spending, borrowing and saving habits; (10) changes in the financial performance and/or condition of the Company’s borrowers; (11) technological changes; (12) acquisition and integration of acquired businesses; (13) the possibility that NBT and Salisbury Bancorp, Inc. (“Salisbury”) may be unable to achieve expected synergies and operating efficiencies in the merger within the expected timeframes; (14) the ability to increase market share and control expenses; (15) changes in the competitive environment among financial holding companies; (16) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which the Company and its subsidiaries must comply, including those under the Dodd-Frank Act, and the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018; (17) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; (18) changes in the Company’s organization, compensation and benefit plans; (19) the costs and effects of legal and regulatory developments, including the resolution of legal proceedings or regulatory or other governmental inquiries, and the results of regulatory examinations or reviews; (20) greater than expected costs or difficulties related to the integration of new products and lines of business; and (21) the Company’s success at managing the risks involved in the foregoing items.

The Company cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date made, and advises readers that various factors, including, but not limited to, those described above and other factors discussed in the Company’s annual and quarterly reports previously filed with the SEC, could affect the Company’s financial performance and could cause the Company’s actual results or circumstances for future periods to differ materially from those anticipated or projected.

Unless required by law, the Company does not undertake, and specifically disclaims any obligations to, publicly release any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Non-GAAP Measures

This Quarterly Report on Form 10-Q contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Where non-GAAP disclosures are used in this Form 10-Q, the comparable GAAP measure, as well as a reconciliation to the comparable GAAP measure, is provided in the accompanying tables. Management believes that these non-GAAP measures provide useful information that is important to an understanding of the results of the Company’s core business as well as provide information standard in the financial institution industry. Non-GAAP measures should not be considered a substitute for financial measures determined in accordance with GAAP and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Amounts previously reported in the consolidated financial statements are reclassified whenever necessary to conform to current period presentation.

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Critical Accounting Estimates

SEC guidance requires disclosure of “critical accounting estimates.” The SEC defines “critical accounting estimates” as those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant. The Company follows financial accounting and reporting policies that are in accordance with GAAP. The more significant of these policies are summarized in Note 1 to the consolidated financial statements presented in our 2022 Annual Report on Form 10-K. Refer to Note 3 in this Quarterly Report on Form 10-Q for recently adopted accounting standards. Not all significant accounting policies require management to make difficult, subjective or complex judgments. The allowance for credit losses and the allowance for unfunded commitments policies noted below are deemed to meet the SEC’s definition of a critical accounting estimate.

The allowance for credit losses consists of the allowance for credit losses and the allowance for losses on unfunded commitments. The measurement of Current Expensed Credit Losses (“CECL”) on financial instruments requires an estimate of the credit losses expected over the life of an exposure (or pool of exposures). The estimate of expected credit losses under the CECL approach is based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. Historical loss experience is generally the starting point for estimating expected credit losses. The Company then considers whether the historical loss experience should be adjusted for asset-specific risk characteristics or current conditions at the reporting date that did not exist over the period from which historical experience was used. Finally, the Company considers forecasts about future economic conditions that are reasonable and supportable. The allowance for credit losses for loans, as reported in our consolidated statements of financial condition, is adjusted by an expense for credit losses, which is recognized in earnings, and reduced by the charge-off of loan amounts, net of recoveries. The allowance for losses on unfunded commitments represents the expected credit losses on off-balance sheet commitments such as unfunded commitments to extend credit and standby letters of credit. However, a liability is not recognized for commitments unconditionally cancellable by the Company. The allowance for losses on unfunded commitments is determined by estimating future draws and applying the expected loss rates on those draws.

Management of the Company considers the accounting policy relating to the allowance for credit losses to be a critical accounting estimate given the uncertainty in evaluating the level of the allowance required to cover management’s estimate of all expected credit losses over the expected contractual life of our loan portfolio. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. Subsequent evaluations of the then-existing loan portfolio, in light of the factors then prevailing, may result in significant changes in the allowance for credit losses in those future periods. While management’s current evaluation of the allowance for credit losses indicates that the allowance is appropriate, the allowance may need to be increased under adversely different conditions or assumptions. Going forward, the impact of utilizing the CECL approach to calculate the reserve for credit losses will be significantly influenced by the composition, characteristics and quality of our loan portfolio, as well as the prevailing economic conditions and forecasts utilized. Material changes to these and other relevant factors may result in greater volatility to the reserve for credit losses, and therefore, greater volatility to our reported earnings.

One of the most significant judgments involved in estimating the Company’s allowance for credit losses relates to the macroeconomic forecasts used to estimate expected credit losses over the forecast period. The quantitative model as of September 30, 2023, incorporated a baseline economic outlook along with an alternative downside scenario sourced from a reputable third-party to accommodate other potential economic conditions in the model, particularly significant unknowns relating to downside risks as of the measurement date. The baseline outlook projected a relatively low unemployment rate of 3.7% rising modestly to 4.13% by the end of the forecast period. Northeast GDP’s annualized growth (on a quarterly basis) was expected to start the fourth quarter of 2023 at 3.5%, decreasing slightly to 2.9%, and then increasing to 3.8% by the end of the forecast period. The alternative downside scenario assumes deteriorated economic conditions from the baseline outlook. Under this scenario, northeast unemployment increases to 5.1% in the fourth quarter of 2023 and rises to a peak of 6.9% in the fourth quarter of 2024. These scenarios and their respective weightings are evaluated at each measurement date and reflect management’s expectations as of September 30, 2023. All else held equal, the changes in the weightings of our forecasted scenarios would impact the amount of estimated allowance for credit losses through changes in the quantitative reserve and scenario-specific qualitative adjustments. To demonstrate the sensitivity of the allowance for credit losses estimate to macroeconomic forecast weightings assumptions as of September 30, 2023, the Company attributed the change in scenario weightings to the change in the allowance for credit losses, with a 10% decrease to the downside scenario and a 10% increase to the baseline scenario causing a 3.9% decrease in the overall estimated allowance for credit losses. To further demonstrate the sensitivity of the allowance for credit losses estimate to macroeconomic forecast weightings assumptions as of September 30, 2023, the Company increased the downside scenario to 100% which resulted in a 25% increase in the overall estimated allowance for credit losses.

The Company’s policies on the CECL method for allowance for credit losses are disclosed in Note 1 to the consolidated financial statements presented in our 2022 Annual Report on Form 10-K. All accounting policies are important and as such, the Company encourages the reader to review each of the policies included in Note 1 to the consolidated financial statements presented in our 2022 Annual Report on Form 10-K to obtain a better understanding of how the Company’s financial performance is reported. Refer to Note 3 to the unaudited interim consolidated financial statements in this Quarterly Report on Form 10-Q for recently adopted accounting standards.

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Overview

Significant factors management reviews to evaluate the Company’s operating results and financial condition include, but are not limited to: net income and earnings per share, return on average assets and equity, net interest margin, noninterest income, operating expenses, asset quality indicators, loan and deposit growth, capital management, liquidity and interest rate sensitivity, enhancements to customer products and services, technology advancements, market share and peer comparisons. The following information should be considered in connection with the Company’s results for the three and nine months ended September 30, 2023:

● the acquisition of Salisbury by the merger of Salisbury with and into the Company was completed on August 11, 2023;

● net income for the three months ended September 30, 2023 was $24.6 million, down $14.4 million from the third quarter of 2022 and down $5.5 million from the second quarter of 2023;

● diluted earnings per share of $0.54 for the three months ended September 30, 2023, down $0.36 from the third quarter of 2022 and down $0.16 from the second quarter of 2023;

● excluding acquisition expenses, acquisition-related provision for credit losses and securities gains (losses), net income and diluted earnings per share for the three months ended September 30, 2023 were $38.3 million and $0.84, respectively;

● excluding securities gains (losses), noninterest income represents 30% of total revenues and was $40.4 million for the three months ended September 30, 2023, up $3.1 million, or 8.3%, from the third quarter of 2022 and up $3.7 million, or 10.2%, from the second quarter of 2023;

● noninterest expense, excluding $7.9 million of acquisition expenses in the third quarter of 2023 and $1.2 million in the second quarter of 2023, respectively, was up $6.2 million, or 8.1%, from the third quarter of 2022 and up $5.3 million, or 6.8%, from the second quarter of 2023;

● period end total loans were $9.67 billion, up $1.52 billion from December 31, 2022, excluding the $1.18 billion of loans acquired from Salisbury, loans grew $337.2 million, or 5.5% annualized, since December 31, 2022;

● period end total deposits were $11.40 billion, up $1.91 billion from December 31, 2022, excluding the $1.31 billion of deposits acquired from Salisbury, deposits increased $596.5 million, since December 31, 2022;

● book value per share of $28.94 at September 30, 2023; tangible book value per share⁽¹⁾ was $20.39 at September 30, 2023, $21.55 at June 30, 2023 and $20.25 at September 30, 2022.

(1) Non-GAAP measure - Refer to non-GAAP reconciliation below.

Salisbury Bancorp, Inc. Merger

On August 11, 2023, NBT completed its acquisition of Salisbury. Salisbury was a Connecticut-chartered commercial bank with 13 banking offices in northwestern Connecticut, the Hudson Valley region of New York, and southwestern Massachusetts. In connection with the acquisition, the Company issued 4.32 million shares and acquired approximately $1.46 billion of identifiable assets, including $1.18 billion of loans, $122.7 million in investment securities which were sold immediately after the merger, $31.2 million of core deposit intangibles and $4.7 million in a wealth management customer intangible, as well as $1.31 billion in deposits. As of the acquisition date, the fair value discount was $78.7 million for loans, net of the reclassification of the purchase credit deteriorated allowance, and was $3.0 million for subordinated debt, respectively.

Results of Operations

Net income for the three months ended September 30, 2023 was $24.6 million, or $0.54 per diluted common share, down $5.5 million from $30.1 million, or $0.70 per diluted common share for the three months ended June 30, 2023 and down $14.4 million from $39.0 million, or $0.90 per diluted common share for the third quarter of 2022.

● Excluding the impact of acquisition expenses, acquisition-related provision for credit losses and securities gains (losses), the Company generated $0.84 per diluted share of earnings in the third quarter of 2023, compared to $0.91 per diluted share in the third quarter of 2022 and $0.80 per diluted share in the second quarter of 2023.

● The Company incurred acquisition expenses of $7.9 million ($0.14 per diluted share) and $1.2 million ($0.02 per diluted share) related to the merger with Salisbury in the third quarter of 2023 and the second quarter of 2023, respectively.

35

Net income for the nine months ended September 30, 2023 was $88.3 million, or $2.01 per diluted common share, down $27.5 million from $115.9 million, or $2.68 per diluted common share for the nine months ended September 30, 2022.

● Excluding the impact of acquisition expenses, acquisition-related provision for credit losses and securities gains (losses), the Company generated $2.53 per diluted share of earnings for the nine months ended September 30, 2023, compared to $2.70 per diluted share for the nine months ended September 30, 2022.

● In the nine months ended September 30, 2023, the Company incurred a $4.5 million ($0.08 per diluted share) securities loss on the sale of two subordinated debt securities held in the available for sale (“AFS”) portfolio and a $5.0 million ($0.09 per diluted share) securities loss on the write-off of a subordinated debt security of a failed financial institution.

● The Company incurred acquisition expenses of $9.7 million ($0.17 per diluted share) related to the merger with Salisbury in the nine months ended September 30, 2023.

The following table sets forth certain financial highlights:

	Three Months Ended									Nine Months Ended
	September 30, 2023			June 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
Performance:
Diluted earnings per share	$	0.54		$	0.70		$	0.90		$	2.01		$	2.68
Return on average assets(2)		0.76	%		1.02	%		1.33	%		0.97	%		1.31	%
Return on average equity(2)		7.48	%		9.91	%		12.87	%		9.54	%		12.79	%
Return on average tangible common equity(2)		10.73	%		13.13	%		17.12	%		13.00	%		17.00	%
Net interest margin, fully taxable equivalent (“FTE”)(2)		3.21	%		3.27	%		3.51	%		3.34	%		3.22	%
Capital:
Equity to assets		9.86	%		10.18	%		9.94	%		9.86	%		9.94	%
Tangible equity ratio		7.15	%		7.95	%		7.64	%		7.15	%		7.64	%
Book value per share	$	28.94		$	28.26		$	27.00		$	28.94		$	27.00
Tangible book value per share	$	20.39		$	21.55		$	20.25		$	20.39		$	20.25
Leverage ratio		10.23	%		10.51	%		10.21	%		10.23	%		10.21	%
Common equity tier 1 capital ratio		11.31	%		12.29	%		12.17	%		11.31	%		12.17	%
Tier 1 capital ratio		12.23	%		13.35	%		13.27	%		12.23	%		13.27	%
Total risk-based capital ratio		14.45	%		15.50	%		15.50	%		14.45	%		15.50	%

The following table provides non-GAAP reconciliations:

	Three Months Ended									Nine Months Ended
(In thousands, except per share data)	September 30, 2023			June 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
Return on average tangible common equity:
Net income	$	24,606		$	30,072		$	38,973		$	88,336		$	115,874
Amortization of intangible assets (net of tax)		1,206			344			408			1,952			1,294
Net income, excluding intangible amortization	$	25,812		$	30,416		$	39,381		$	90,288		$	117,168
Average stockholders’ equity	$	1,305,686		$	1,217,306		$	1,201,656		$	1,238,192		$	1,210,998
Less: average goodwill and other intangibles		350,912			287,974			289,296			309,309			289,366
Average tangible common equity	$	954,774		$	929,332		$	912,360		$	928,883		$	921,632
Return on average tangible common equity(2)		10.73	%		13.13	%		17.12	%		13.00	%		17.00	%
Tangible equity ratio:
Stockholders’ equity	$	1,362,821		$	1,210,493		$	1,156,546		$	1,362,821		$	1,156,546
Intangibles		402,745			287,701			289,083			402,745			289,083
Assets	$	13,827,628		$	11,890,497		$	11,640,742		$	13,827,628		$	11,640,742
Tangible equity ratio		7.15	%		7.95	%		7.64	%		7.15	%		7.64	%
Tangible book value per share:
Stockholders’ equity	$	1,362,821		$	1,210,493		$	1,156,546		$	1,362,821		$	1,156,546
Intangibles		402,745			287,701			289,083			402,745			289,083
Tangible equity	$	960,076		$	922,792		$	867,463		$	960,076		$	867,463
Diluted common shares outstanding		47,088			42,827			42,839			47,088			42,839
Tangible book value per share	$	20.39		$	21.55		$	20.25		$	20.39		$	20.25

(2) Annualized.

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Net Interest Income

Net interest income is the difference between interest income on earning assets, primarily loans and securities and interest expense on interest-bearing liabilities, primarily deposits and borrowings. Net interest income is affected by the interest rate spread, the difference between the yield on interest-earning assets and cost of interest-bearing liabilities, as well as the volumes of such assets and liabilities. Net interest income is one of the key determining factors in a financial institution’s performance as it is the principal source of earnings.

Net interest income was $94.9 million for the third quarter of 2023, up $5.8 million, or 6.5%, from the previous quarter. The FTE net interest margin was 3.21% for the three months ended September 30, 2023, a decrease of 6 basis points (“bps”) from the previous quarter. Interest income increased $16.5 million, or 13.7%, as the yield on average interest-earning assets increased 21 bps from the prior quarter to 4.63%, while average interest-earning assets of $11.80 billion increased $819.7 million from the prior quarter, primarily due to the Salisbury acquisition and organic loan growth. Interest expense was up $10.7 million, or 33.9%, as the cost of interest-bearing liabilities increased 38 bps to 2.18% for the quarter ended September 30, 2023, driven by interest-bearing deposit costs increasing 49 bps. Included in net interest income was $1.4 million of acquisition-related net accretion which positively impacted net interest margin by 5 bps.

Net interest income was $94.9 million for the third quarter of 2023, up $0.4 million, or 0.4%, from the third quarter of 2022. The FTE net interest margin was 3.21% for the three months ended September 30, 2023, a decrease of 30 bps from the third quarter of 2022. Interest income increased $37.9 million, or 38.2%, as the yield on average interest-earning assets increased 95 bps from the same period in 2022 to 4.63%, while average interest-earning assets of $11.80 billion increased $1.08 billion from the third quarter of 2022 primarily due to the Salisbury acquisition and organic loan growth. Interest expense increased $37.5 million, or 791.0%, as the cost of interest-bearing liabilities increased 189 bps to 2.18% for the quarter ended September 30, 2023, driven by interest-bearing deposit costs increasing 165 bps, as well as a $533.9 million increase in the average balances of short-term borrowings and a 534 bps rate paid on those borrowings. Included in net interest income was $1.4 million of acquisition-related net accretion which positively impacted net interest margin by 5 bps.

Net interest income for the first nine months of 2023 was $279.0 million, up $16.6 million, or 6.3%, from the same period in 2022. FTE net interest margin was 3.34% for the nine months ended September 30, 2023, an increase of 12 bps from the same period in 2022. Interest income increased $97.0 million, or 35.3%, as the yield on average interest-earning assets increased 107 bps from the same period in 2022 to 4.44%, while average interest-earning assets of $11.24 billion increased $303.6 million primarily due to the Salisbury acquisition and organic loan growth partially offset by the decrease in short-term interest-bearing accounts (“excess liquidity”). Interest expense was up $80.3 million, or 643.4%, for the nine months ended September 30, 2023 as compared to the same period in 2022 driven by interest-bearing deposit costs increasing 118 bps, as well as a $483.6 million increase in the average balances of short-term borrowings and a 522 bps rate paid on those borrowings. Included in net interest income was $1.4 million of acquisition-related net accretion which positively impacted net interest margin by 2 bps.

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Average Balances and Net Interest Income

The following tables include the condensed consolidated average balance sheet, an analysis of interest income/expense and average yield/rate for each major category of earning assets and interest-bearing liabilities on a taxable equivalent basis.

Three Months Ended	September 30, 2023							September 30, 2022
(Dollars in thousands)	Average Balance		Interest		Yield/ Rates			Average Balance		Interest		Yield/ Rates
Assets:
Short-term interest-bearing accounts	$	121,384	$	1,304		4.26	%	$	191,463	$	1,209		2.51	%
Securities taxable(1)		2,364,809		11,314		1.90	%		2,491,315		11,478		1.83	%
Securities tax-exempt(1)(3)		219,427		1,850		3.34	%		211,306		1,318		2.47	%
Federal Reserve Bank and FHLB stock		53,841		917		6.76	%		25,182		220		3.47	%
Loans(2)(3)		9,043,582		122,277		5.36	%		7,808,025		85,326		4.34	%
Total interest-earning assets	$	11,803,043	$	137,662		4.63	%	$	10,727,291	$	99,551		3.68	%
Other assets		968,220							887,378
Total assets	$	12,771,263						$	11,614,669
Liabilities and stockholders’ equity:
Money market deposit accounts	$	2,422,451	$	17,739		2.91	%	$	2,332,341	$	877		0.15	%
NOW deposit accounts		1,513,420		2,165		0.57	%		1,548,115		800		0.21	%
Savings deposits		1,707,094		176		0.04	%		1,854,122		149		0.03	%
Time deposits		1,178,352		10,678		3.60	%		455,168		407		0.35	%
Total interest-bearing deposits	$	6,821,317	$	30,758		1.79	%	$	6,189,746	$	2,233		0.14	%
Federal funds purchased		6,033		82		5.39	%		1,522		13		3.39	%
Repurchase agreements		71,516		253		1.40	%		69,048		17		0.10	%
Short-term borrowings		540,380		7,277		5.34	%		6,440		54		3.33	%
Long-term debt		29,800		294		3.91	%		3,331		20		2.38	%
Subordinated debt, net		109,160		1,612		5.86	%		98,748		1,360		5.46	%
Junior subordinated debt		101,196		1,923		7.54	%		101,196		1,039		4.07	%
Total interest-bearing liabilities	$	7,679,402	$	42,199		2.18	%	$	6,470,031	$	4,736		0.29	%
Demand deposits	$	3,498,424						$	3,708,131
Other liabilities		287,751							234,851
Stockholders’ equity		1,305,686							1,201,656
Total liabilities and stockholders’ equity	$	12,771,263						$	11,614,669
Net interest income (FTE)			$	95,463						$	94,815
Interest rate spread						2.45	%						3.39	%
Net interest margin (FTE)						3.21	%						3.51	%
Taxable equivalent adjustment			$	568						$	337
Net interest income			$	94,895						$	94,478

(1) Securities are shown at average amortized cost.

(2) For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding.

(3) Interest income for tax-exempt securities and loans have been adjusted to a FTE basis using the statutory Federal income tax rate of 21%.

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Nine Months Ended	September 30, 2023							September 30, 2022
(Dollars in thousands)	Average Balance		Interest		Yield/ Rates			Average Balance		Interest		Yield/ Rates
Assets:
Short-term interest-bearing accounts	$	61,677	$	1,751		3.80	%	$	575,517	$	2,742		0.64	%
Securities taxable(1)		2,400,237		34,218		1.91	%		2,406,042		31,460		1.75	%
Securities tax-exempt(1)(3)		207,812		4,675		3.01	%		242,033		3,664		2.02	%
Federal Reserve Bank and FHLB stock		48,860		2,282		6.24	%		25,064		654		3.49	%
Loans(2)(3)		8,516,793		330,314		5.19	%		7,683,159		237,290		4.13	%
Total interest-earning assets	$	11,235,379	$	373,240		4.44	%	$	10,931,815	$	275,810		3.37	%
Other assets		880,655							905,931
Total assets	$	12,116,034						$	11,837,746
Liabilities and stockholders’ equity:
Money market deposit accounts	$	2,207,126	$	36,107		2.19	%	$	2,541,927	$	2,801		0.15	%
NOW deposit accounts		1,525,089		4,989		0.44	%		1,570,318		1,260		0.11	%
Savings deposits		1,732,205		462		0.04	%		1,831,485		442		0.03	%
Time deposits		893,407		20,330		3.04	%		475,966		1,328		0.37	%
Total interest-bearing deposits	$	6,357,827	$	61,888		1.30	%	$	6,419,696	$	5,831		0.12	%
Federal funds purchased		32,784		1,266		5.16	%		513		13		3.39	%
Repurchase agreements		66,162		416		0.84	%		67,279		46		0.09	%
Short-term borrowings		485,804		18,975		5.22	%		2,170		54		3.33	%
Long-term debt		22,373		631		3.77	%		7,509		140		2.49	%
Subordinated debt, net		101,114		4,281		5.66	%		98,641		4,078		5.53	%
Junior subordinated debt		101,196		5,372		7.10	%		101,196		2,325		3.07	%
Total interest-bearing liabilities	$	7,167,260	$	92,829		1.73	%	$	6,697,004	$	12,487		0.25	%
Demand deposits	$	3,439,275						$	3,709,761
Other liabilities		271,307							219,983
Stockholders’ equity		1,238,192							1,210,998
Total liabilities and stockholders’ equity	$	12,116,034						$	11,837,746
Net interest income (FTE)			$	280,411						$	263,323
Interest rate spread						2.71	%						3.12	%
Net interest margin (FTE)						3.34	%						3.22	%
Taxable equivalent adjustment			$	1,365						$	912
Net interest income			$	279,046						$	262,411

(1) Securities are shown at average amortized cost.

(2) For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding.

(3) Interest income for tax-exempt securities and loans have been adjusted to a FTE basis using the statutory Federal income tax rate of 21%.

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The following table presents changes in interest income and interest expense attributable to changes in volume (change in average balance multiplied by prior year rate), changes in rate (change in rate multiplied by prior year volume) and the net change in net interest income. The net change attributable to the combined impact of volume and rate has been allocated to each in proportion to the absolute dollar amounts of change.

Three Months Ended September 30,	Increase (Decrease) 2023 over 2022
(In thousands)	Volume			Rate			Total
Short-term interest-bearing accounts	$	(549	)	$	644		$	95
Securities taxable		(596	)		432			(164	)
Securities tax-exempt		52			480			532
Federal Reserve Bank and FHLB stock		380			317			697
Loans		14,784			22,167			36,951
Total FTE interest income	$	14,072		$	24,039		$	38,111
Money market deposit accounts	$	35		$	16,827		$	16,862
NOW deposit accounts		(18	)		1,383			1,365
Savings deposits		(13	)		40			27
Time deposits		1,522			8,749			10,271
Federal funds purchased		58			11			69
Repurchase agreements		1			235			236
Short-term borrowings		7,171			52			7,223
Long-term debt		253			21			274
Subordinated debt, net		150			102			252
Junior subordinated debt		-			884			884
Total FTE interest expense	$	9,158		$	28,305		$	37,463
Change in FTE net interest income	$	4,914		$	(4,266	)	$	648

Nine Months Ended September 30,	Increase (Decrease) 2023 over 2022
(In thousands)	Volume			Rate		Total
Short-term interest-bearing accounts	$	(4,300	)	$	3,309	$	(991	)
Securities taxable		(76	)		2,834		2,758
Securities tax-exempt		(575	)		1,586		1,011
Federal Reserve Bank and FHLB stock		889			739		1,628
Loans		27,708			65,316		93,024
Total FTE interest income	$	23,645		$	73,785	$	97,430
Money market deposit accounts	$	(417	)	$	33,723	$	33,306
NOW deposit accounts		(37	)		3,766		3,729
Savings deposits		(25	)		45		20
Time deposits		2,075			16,927		19,002
Federal funds purchased		1,243			10		1,253
Repurchase agreements		(1	)		371		370
Short-term borrowings		18,873			48		18,921
Long-term debt		390			101		491
Subordinated debt, net		103			100		203
Junior subordinated debt		-			3,047		3,047
Total FTE interest expense	$	22,204		$	58,138	$	80,342
Change in net FTE interest income	$	1,442		$	15,646	$	17,088

40

Noninterest Income

Noninterest income is a significant source of revenue for the Company and an important factor in the Company’s results of operations. The following table sets forth information by category of noninterest income for the periods indicated:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2023			2022			2023			2022
Service charges on deposit accounts	$	3,979		$	3,581		$	11,260		$	11,032
Card services income		5,503			5,654			15,469			24,100
Retirement plan administration fees		12,798			11,496			35,995			37,451
Wealth management		9,297			8,402			25,611			25,294
Insurance services		4,361			3,892			12,008			11,258
Bank owned life insurance income		1,568			1,560			4,974			4,625
Net securities (losses)		(183	)		(148	)		(9,822	)		(914	)
Other		2,913			2,735			8,195			8,641
Total noninterest income	$	40,236		$	37,172		$	103,690		$	121,487

Noninterest income for the three months ended September 30, 2023 was $40.2 million, up $8.2 million, or 25.6%, from the prior quarter and up $3.1 million, or 8.2%, from the third quarter of 2022. Excluding net securities gains (losses), noninterest income for the three months ended September 30, 2023 was $40.4 million, up $3.7 million, or 10.2%, from the prior quarter and up $3.1 million, or 8.3%, from the third quarter of 2022. The increase from the prior quarter was primarily driven by an increase in card services income, retirement plan administration, wealth management fees and insurance services. The increase from the third quarter of 2022 was driven by an increase in retirement plan administration, wealth management and insurance services fees. The increase in retirement plan administration from both the prior quarter and the third quarter of 2022 was due primarily to seasonal activity-based fees in the quarter, favorable market conditions, new account growth and the acquisition of Retirement Direct, LLC on July 1, 2023. Wealth management fees increased from both the prior quarter and the third quarter of 2022 due primarily to the Salisbury acquisition and seasonal activity-based fees.

Noninterest income for the nine months ended September 30, 2023 was $103.7 million, down $17.8 million, or 14.6%, from the same period in 2022. During the nine months ended September 30, 2023, the Company incurred a $4.5 million securities loss on the sale of two subordinated debt securities held in the AFS portfolio and a $5.0 million securities loss on the write-off of a subordinated debt security of a failed financial institution. Excluding net securities gains (losses), noninterest income for the nine months ended September 30, 2023 was $113.5 million, down $8.9 million, or 7.3%, from the same period in 2022. The decrease from the prior year was primarily due to lower card services income from the impact of the statutory price cap provisions of the Durbin Amendment of approximately $8.0 million and lower retirement plan administration fees driven by a decrease in certain activity-based fees.

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Noninterest Expense

Noninterest expenses are also an important factor in the Company’s results of operations. The following table sets forth the major components of noninterest expense for the periods indicated:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Salaries and employee benefits	$	49,248	$	48,371	$	144,237	$	140,595
Technology and data services		9,677		9,096		27,989		26,588
Occupancy		7,090		6,481		21,233		19,761
Professional fees and outside services		4,149		3,817		12,486		11,999
Office supplies and postage		1,700		1,469		5,004		4,441
FDIC assessment		1,657		787		4,397		2,399
Advertising		667		559		1,841		1,943
Amortization of intangible assets		1,609		544		2,603		1,725
Loan collection and other real estate owned, net		569		549		2,115		1,690
Acquisition expenses		7,917		-		9,724		-
Other		6,514		5,021		17,284		13,815
Total noninterest expense	$	90,797	$	76,694	$	248,913	$	224,956

Noninterest expense for the three months ended September 30, 2023 was $90.8 million, up $12.0 million, or 15.2%, from the prior quarter and up $14.1 million, or 18.4%, from the third quarter of 2022. The Company incurred acquisition expenses of $7.9 million and $1.2 million, related to the merger with Salisbury in the third and second quarter of 2023, respectively. Excluding acquisition expenses, noninterest expense for the three months ended September 30, 2023 was $82.9 million, up $5.3 million, or 6.8%, from the prior quarter and up $6.2 million, or 8.1%, from the third quarter of 2022. The increase from the prior quarter was primarily driven by the Salisbury acquisition and merit increases for employees. The increase from the third quarter of 2022 was driven by the Salisbury acquisition and merit increases, the increase in Federal Deposit Insurance Corporation (“FDIC”) assessment expense was driven by the statutory increase in the FDIC assessment rate and the increase in amortization of intangible assets was due to the amortization of intangible assets related to the Salisbury acquisition. The Company recorded a core deposit intangible of $31.2 million and a wealth management customer list intangible of $4.7 million related to the Salisbury acquisition.

Noninterest expense for the nine months ended September 30, 2023 was $248.9 million, up $24.0 million, or 10.6%, from the same period in 2022. The Company incurred acquisition expenses of $9.7 million for the nine months ended September 30, 2023. Excluding acquisition expenses, noninterest expense for the nine months ended September 30, 2023 was $239.2 million, up $14.2 million, or 6.3%, from the same period in 2022. The increase from the prior year was driven by higher salaries and employee benefits due to the Salisbury acquisition, increased salaries and wages including merit pay increases and higher health and welfare benefits, which were partially offset by lower levels of incentive compensation. In addition, the increase in technology and data services was due to continued investment in digital platform solutions, the increase in FDIC assessment expense was driven by the statutory increase in the FDIC assessment rate, increased occupancy costs were driven by the addition of Salisbury locations and other expenses were higher due to the increase in actuarially determined expenses related to the Company’s retirement plans.

Income Taxes

Income tax expense for the three months ended September 30, 2023 was $7.1 million, down $1.6 million from the prior quarter and down $4.4 million from the third quarter of 2022 due to a decrease in pre-tax net income. The effective tax rate was 22.4% for the third quarter of 2023, consistent with the prior quarter and compared to 22.8% for the third quarter of 2022.

Income tax expense for the nine months ended September 30, 2023 was $25.3 million, down $8.3 million from the same period of 2022 due to a decrease in pre-tax net income. The effective tax rate was 22.3% for the nine months ended September 30, 2023, compared to 22.5% for the nine months ended September 30, 2022.

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ANALYSIS OF FINANCIAL CONDITION

Securities

Total securities decreased $128.4 million, or 5.2%, from December 31, 2022 to September 30, 2023. The securities portfolio represented 17.0% of total assets as of September 30, 2023 as compared to 21.1% of total assets as of December 31, 2022.

The following table details the composition of securities available for sale, securities held to maturity and equity securities for the periods indicated:

	September 30, 2023			December 31, 2022
Mortgage-backed securities:
With maturities 15 years or less		12	%		13	%
With maturities greater than 15 years		10	%		11	%
Collateral mortgage obligations		36	%		37	%
Municipal securities		17	%		15	%
U.S. agency notes		21	%		21	%
Corporate		2	%		2	%
Equity securities		2	%		1	%
Total		100	%		100	%

The Company’s mortgage-backed securities, U.S. agency notes and collateralized mortgage obligations are all guaranteed by Fannie Mae, Freddie Mac, the Federal Home Loan Bank, Federal Farm Credit Banks or Ginnie Mae (“GNMA”). GNMA securities are considered similar in credit quality to U.S. Treasury securities, as they are backed by the full faith and credit of the U.S. government. Currently, there are no subprime mortgages in our investment portfolio.

Loans

A summary of the loan portfolio by major categories⁽¹⁾, net of deferred fees and origination costs, for the periods indicated follows:

(In thousands)	September 30, 2023		December 31, 2022
Commercial & industrial	$	1,424,579	$	1,266,031
Commercial real estate		3,575,595		2,807,941
Residential real estate		2,111,670		1,649,870
Indirect auto		1,099,558		989,587
Residential solar		934,082		856,798
Home equity		340,777		314,124
Other consumer		181,114		265,796
Total loans	$	9,667,375	$	8,150,147

(1) Loans are summarized by business line which does not align to how the Company assesses credit risk in the estimate for credit losses under CECL.

Total loans increased by $1.52 billion, or 24.9% annualized, from December 31, 2022 to September 30, 2023, which included $1.18 billion of loans acquired from Salisbury. Commercial and industrial loans increased $158.5 million to $1.42 billion; commercial real estate loans increased $767.7 million to $3.58 billion; and total consumer loans increased $591.0 million to $4.67 billion. Excluding loans acquired from Salisbury, loans grew $337.2 million, or 5.5% annualized, since December 31, 2022. Total loans represent approximately 69.9% of total assets as of September 30, 2023, as compared to 69.4% as of December 31, 2022.

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Allowance for Credit Losses, Provision for Loan Losses and Nonperforming Assets

Beginning January 1, 2023, the Company adopted Accounting Standards Updates (“ASU”) 2022-02 Financial Instruments - CECL Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) which resulted in an insignificant change to the Company’s methodology for estimating the allowance for credit losses on Troubled Debt Restructurings (“TDRs”) since December 31, 2022. The January 1, 2023 decrease in allowance for credit loss on TDR loans relating to adoption of ASU 2022-02 was $0.6 million, which increased retained earnings by $0.5 million and decreased the deferred tax asset by $0.1 million.

Management considers the accounting policy relating to the allowance for credit losses to be a critical estimate given the degree of judgment exercised in evaluating the level of the allowance required to estimate expected credit losses over the expected contractual life of our loan portfolio and the material effect that such judgments can have on the consolidated results of operations.

The CECL approach requires an estimate of the credit losses expected over the life of a loan (or pool of loans). The allowance for credit losses is a valuation account that is deducted from, or added to, the loans’ amortized cost basis to present the net, lifetime amount expected to be collected on the loans. Loan losses are charged off against the allowance when management believes a loan balance is confirmed to be uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

Required additions or reductions to the allowance for credit losses are made periodically by charges or credits to the provision for loan losses. These are necessary to maintain the allowance at a level which management believes is reasonably reflective of the overall loss expected over the contractual life of the loan portfolio. While management uses available information to recognize losses on loans, additions or reductions to the allowance may fluctuate from one reporting period to another. These fluctuations are reflective of changes in risk associated with portfolio content and/or changes in management’s assessment of any or all of the determining factors discussed above. Management considers the allowance for credit losses to be appropriate based on evaluation and analysis of the loan portfolio.

Management estimates the allowance balance for credit losses using relevant available information, from internal and external sources, related to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Company historical loss experience was supplemented with peer information when there was insufficient loss data for the Company. Significant management judgment is required at each point in the measurement process.

The allowance for credit losses is measured on a collective (pool) basis, with both a quantitative and qualitative analysis that is applied on a quarterly basis, when similar risk characteristics exist. The respective quantitative allowance for each segment is measured using an econometric, discounted probability of default and loss given default modeling methodology in which distinct, segment-specific multi-variate regression models are applied to multiple, probabilistically weighted external economic forecasts. Under the discounted cash flows methodology, expected credit losses are estimated over the effective life of the loans by measuring the difference between the net present value of modeled cash flows and amortized cost basis. After quantitative considerations, management applies additional qualitative adjustments so that the allowance for credit loss is reflective of the estimate of lifetime losses that exist in the loan portfolio at the balance sheet date.

Portfolio segment is defined as the level at which an entity develops and documents a systematic methodology to determine its allowance for credit losses. Upon adoption of CECL, management revised the manner in which loans were pooled for similar risk characteristics. Management developed segments for estimating loss based on type of borrower and collateral which is generally based upon federal call report segmentation and have been combined or subsegmented as needed to ensure loans of similar risk profiles are appropriately pooled.

Additional information about our Allowance for Loan Losses is included in Note 6 to the consolidated financial statements. The Company’s management considers the allowance for credit losses to be appropriate based on evaluation and analysis of the loan portfolio.

The allowance for credit losses totaled $114.6 million at September 30, 2023, compared to $100.4 million at June 30, 2023 and $96.8 million at September 30, 2022. The allowance for credit losses as a percentage of loans was 1.19% at September 30, 2023, compared to 1.20% at June 30, 2023 and 1.22% at September 30, 2022. The allowance for credit losses was 472.31% of nonperforming loans at September 30, 2023, compared to 510.01% at June 30, 2023 and 443.43% at September 30, 2022. The allowance for credit losses was 552.67% of nonaccrual loans at September 30, 2023, compared to 593.00% of nonaccrual loans at June 30, 2023 and compared to 506.86% at September 30, 2022. The increase in allowance for credit losses from June 30, 2023 to September 30, 2023 was due to the $14.5 million of allowance for acquired Salisbury loans which included both the $5.8 million allowance for purchase credit deteriorated (“PCD”) loans reclassified from loans and the $8.8 million allowance for non-PCD loans recognized through the provision for loan losses. The increase in the allowance for credit losses from September 30, 2022 to September 30, 2023 was primarily due to the Salisbury acquisition and organic loan growth.

44

The provision for loan losses was $12.6 million for three months ended September 30, 2023, compared to $3.6 million in the prior quarter and $4.5 million for the same period in the prior year. Included in the provision expense for the three months ended September 30, 2023 was $8.8 million of acquisition-related provision for loan losses due to the Salisbury acquisition. Net charge-offs totaled $4.2 million during the three months ended September 30, 2023, compared to net charge-offs of $3.5 million during the second quarter of 2023 and $1.3 million in the third quarter of 2022. Net charge-offs to average loans was 18 bps for the three months ended September 30, 2023, compared to 17 bps for the second quarter of 2023 and 7 bps for the three months ended September 30, 2022.

The provision for loan losses was $20.1 million for the nine months ended September 30, 2023, compared to $9.5 million for the nine months ended September 30, 2022. Provision expense increased from the same period in the prior year due primarily to the $8.8 million of acquisition-related provision for loan losses due to the Salisbury acquisition and an increase in net charge-offs during the nine months ended September 30, 2023. Net charge-offs totaled $11.5 million during the nine months ended September 30, 2023, compared to net charge-offs of $4.7 million during the nine months ended September 30, 2022. Net charge-offs to average loans was 18 bps for the nine months ended September 30, 2023, compared to 8 bps for the nine months ended September 30, 2022. The increase in net charge-offs was due to an increase in charge-offs in the Company’s other consumer portfolio, which is in a run-off status.

As of September 30, 2023, the unfunded commitment reserve totaled $4.8 million, which included $0.8 million of acquisition-related provision for unfunded commitment due to the Salisbury acquisition, compared to $4.4 million as of June 30, 2023 and $5.3 million as of September 30, 2022.

Nonperforming assets consist of nonaccrual loans, loans over 90 days past due and still accruing, troubled loans modifications, other real estate owned (“OREO”) and nonperforming securities. Loans are generally placed on nonaccrual when principal or interest payments become 90 days past due, unless the loan is well secured and in the process of collection. Loans may also be placed on nonaccrual when circumstances indicate that the borrower may be unable to meet the contractual principal or interest payments. The threshold for evaluating classified and nonperforming loans specifically evaluated for individual credit loss is $1.0 million. OREO represents property acquired through foreclosure and is valued at the lower of the carrying amount or fair value, less any estimated disposal costs.

	September 30, 2023						December 31, 2022
(Dollars in thousands)	Amount			%			Amount			%
Nonaccrual loans:
Commercial	$	8,413			41	%	$	7,664			44	%
Residential		9,514			46	%		4,835			28	%
Consumer		2,427			12	%		1,667			10	%
Troubled loan modifications(1)		382			1	%		3,067			18	%
Total nonaccrual loans	$	20,736			100	%	$	17,233			100	%
Loans over 90 days past due and still accruing:
Commercial	$	-			-		$	4			-
Residential		1,012			29	%		771			20	%
Consumer		2,516			71	%		3,048			80	%
Total loans over 90 days past due and still accruing	$	3,528			100	%	$	3,823			100	%
Total nonperforming loans	$	24,264					$	21,056
OREO		-						105
Total nonperforming assets	$	24,264					$	21,161
Total nonaccrual loans to total loans		0.21	%					0.21	%
Total nonperforming loans to total loans		0.25	%					0.26	%
Total nonperforming assets to total assets		0.18	%					0.18	%
Total allowance for loan losses to total nonperforming loans		472.31	%					478.72	%
Total allowance for loan losses to nonaccrual loans		552.67	%					584.92	%

(1) TDRs prior to adoption of ASU 2022-02.

45

Total nonperforming assets were $24.3 million at September 30, 2023, compared to $21.2 million at December 31, 2022 and $21.8 million at September 30, 2022. Nonperforming loans at September 30, 2023 were $24.3 million, or 0.25% of total loans, compared with $21.1 million, or 0.26% of total loans at December 31, 2022 and $21.8 million, or 0.28% of total loans at September 30, 2022. The increase in nonperforming loans from September 30, 2022 primarily resulted from an increase in residential nonaccrual loans driven by the Salisbury acquisition partially offset by a decrease in commercial nonaccrual loans. Total nonaccrual loans were $20.7 million or 0.21% of total loans at September 30, 2023, compared to $17.2 million or 0.21% of total loans at December 31, 2022 and compared to $19.1 million or 0.24% of total loans at September 30, 2022. Past due loans as a percentage of total loans was 0.49% at September 30, 2023, up from 0.33% at December 31, 2022 and up from 0.30% at September 30, 2022.

In addition to nonperforming loans discussed above, the Company has also identified approximately $92.4 million in potential problem loans at September 30, 2023 as compared to $52.0 million at December 31, 2022 and $58.4 million at September 30, 2022. Potential problem loans are loans that are currently performing, with a possibility of loss if weaknesses are not corrected. Such loans may need to be disclosed as nonperforming at some time in the future. Potential problem loans are classified by the Company’s loan rating system as “substandard.” The increase in potential problem loans from December 31, 2022 and September 30, 2022 is primarily due to the migration of commercial loan balances of $40.3 million and $32.8 million, respectively, to substandard, the bulk of which is adequately secured by real estate collateral. Management cannot predict the extent to which economic conditions may worsen or other factors, which may impact borrowers and the potential problem loans. Accordingly, there can be no assurance that other loans will not become over 90 days past due, be placed on nonaccrual, become troubled loans modifications or require increased allowance coverage and provision for loan losses. To mitigate this risk the Company maintains a diversified loan portfolio, has no significant concentration in any particular industry and originates loans primarily within its footprint.

Deposits

Total deposits were $11.40 billion at September 30, 2023, up $1.91 billion, or 20.1%, from December 31, 2022, which included $1.31 billion in deposits acquired from Salisbury. Excluding deposits acquired from Salisbury, deposits increased $596.5 million since December 31, 2022. As of September 30, 2023 there were $296.6 million of brokered time deposits, up from $19.4 million as of December 31, 2022. The Company continues to experience the migration from no interest and low interest checking and savings accounts into higher cost money market and time deposit instruments. Total average deposits decreased $0.3 million, or 3.3%, from the same period last year. The decrease was driven primarily by a decrease of $270.5 million, or 7.3%, in demand deposits, combined with a decrease in interest-bearing deposits of $61.9 million, or 1.0%, primarily due to decreases in money market accounts and savings accounts partially offset by an increase in time accounts. The decrease in average balances was due primarily to larger commercial customers taking advantage of higher yielding investment opportunities in both the Company’s wealth management solutions as well as other offerings in the market. As of September 30, 2023 and December 31, 2022 the estimated amounts of uninsured deposits based on the methodologies and assumptions used for the bank regulatory reporting were $4.3 billion and $3.6 billion, respectively.

Borrowed Funds

The Company’s borrowed funds consist of short-term borrowings and long-term debt. Short-term borrowings totaled $490.2 million at September 30, 2023 compared to $585.0 million at December 31, 2022. Long-term debt was $29.8 million at September 30, 2023 compared to $4.8 million at December 31, 2022.

For more information about the Company’s borrowing capacity and liquidity position, see “Liquidity Risk” below.

Subordinated Debt

On June 23, 2020, the Company issued $100.0 million of 5.00% fixed-to-floating rate subordinated notes due 2030. The subordinated notes, which qualify as Tier 2 capital, bear interest at an annual rate of 5.00%, payable semi-annually in arrears commencing on January 1, 2021, and a floating rate of interest equivalent to the three-month Secured Overnight Financing Rate (“SOFR”) plus a spread of 4.85%, payable quarterly in arrears commencing on October 1, 2025. The subordinated debt issuance cost of $2.2 million is being amortized on a straight-line basis into interest expense over five years.

Subordinated debt assumed with the Salisbury acquisition included $25.0 million of 3.50% fixed-to-floating rate subordinated notes due 2031. The subordinated notes, which qualify as Tier 2 capital, bear interest at an annual rate of 3.50%, payable quarterly in arrears commencing on June 30, 2021, and a floating rate of interest equivalent to the three-month SOFR plus a spread of 2.80%, payable quarterly in arrears commencing on June 30, 2026. As of the acquisition date, the fair value discount was $3.0 million for the acquired subordinated debt.

As of September 30, 2023 and December 31, 2022 the subordinated debt net of unamortized issuance costs was $119.4 million and $96.9 million, respectively.

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Capital Resources

Stockholders’ equity of $1.36 billion represented 9.86% of total assets at September 30, 2023 compared with $1.17 billion, or 10.00% of total assets, as of December 31, 2022. Stockholders’ equity increased $189.3 million from December 31, 2022 driven by the Salisbury acquisition adding $161.7 million of capital and net income generation of $88.3 million for the nine months ended September 30, 2023, partially offset by dividends declared of $40.8 million, the repurchase of common stock of $4.9 million and a $17.5 million decrease in accumulated other comprehensive income due primarily to the change in market value of securities available for sale.

The Company purchased 68,500 shares of its common stock during the third quarter of 2023 at an average price of $31.61 per share under its previously announced share repurchase program. The Company may repurchase shares of its common stock from time to time to mitigate the potential dilutive effects of stock-based incentive plans and other potential uses of common stock for corporate purposes. As of September 30, 2023, there were 1,444,500 shares available for repurchase under this plan authorized on December 20, 2021 and set to expire on December 31, 2023.

As the capital ratios in the following table indicate, the Company remained “well capitalized” at September 30, 2023 under applicable bank regulatory requirements. Capital measurements are well in excess of regulatory minimum guidelines and meet the requirements to be considered well capitalized for all periods presented. To be considered well capitalized, tier 1 leverage, common equity tier 1 capital, tier 1 capital and total risk-based capital ratios must be 5%, 6.5%, 8% and 10%, respectively.

Capital Measurements	September 30, 2023			December 31, 2022
Tier 1 leverage ratio		10.23	%		10.32	%
Common equity tier 1 capital ratio		11.31	%		12.12	%
Tier 1 capital ratio		12.23	%		13.19	%
Total risk-based capital ratio		14.45	%		15.38	%
Cash dividends as a percentage of net income		46.20	%		32.74	%
Per common share:
Book value	$	28.94		$	27.38
Tangible book value(1)	$	20.39		$	20.65
Tangible equity ratio(2)		7.15	%		7.73	%

(1) Stockholders’ equity less goodwill and intangible assets divided by common shares outstanding.

(2) Non-GAAP measure - Stockholders’ equity less goodwill and intangible assets divided by total assets less goodwill and intangible assets.

In March 2020, the Office of Comptroller of the Currency (“OCC”), the Board of Governors of the Federal Reserve System and the FDIC announced an interim final rule to delay the estimated impact on regulatory capital stemming from the implementation of CECL. Under the modified CECL transition provision, the regulatory capital impact of the January 1, 2020 CECL adoption date adjustment to the allowance for credit losses (after-tax) was deferred and was phased into regulatory capital at 25% per year commencing January 1, 2022. For the ongoing impact of CECL, the Company was allowed to defer the regulatory capital impact of the allowance for credit losses in an amount equal to 25% of the change in the allowance for credit losses (pre-tax) recognized through earnings for each period between January 1, 2020 and December 31, 2021. The cumulative adjustment to the allowance for credit losses between January 1, 2020 and December 31, 2021, was also phased into regulatory capital at 25% per year commencing January 1, 2022. The Company adopted the capital transition relief over the permissible five-year period.

47

Liquidity and Interest Rate Sensitivity Management

Market Risk

Interest rate risk is the most significant market risk affecting the Company. Other types of market risk, such as foreign currency exchange rate risk and commodity price risk, do not arise in the normal course of the Company’s business activities or are immaterial to the results of operations.

Interest rate risk is defined as an exposure to a movement in interest rates that could have an adverse effect on the Company’s net interest income. Net interest income is susceptible to interest rate risk to the degree that interest-bearing liabilities mature or reprice on a different basis than earning assets. When interest-bearing liabilities mature or reprice more quickly than earning assets in a given period, a significant increase in market rates of interest could adversely affect net interest income. Similarly, when earning assets mature or reprice more quickly than interest-bearing liabilities, falling interest rates could result in a decrease in net interest income.

To manage the Company’s exposure to changes in interest rates, management monitors the Company’s interest rate risk. Management’s Asset Liability Committee (“ALCO”) meets monthly to review the Company’s interest rate risk position and profitability and to recommend strategies for consideration by the Board of Directors. Management also reviews loan and deposit pricing and the Company’s securities portfolio, formulates investment and funding strategies and oversees the timing and implementation of transactions to assure attainment of the Board’s objectives in the most effective manner. Notwithstanding the Company’s interest rate risk management activities, the potential for changing interest rates is an uncertainty that can have an adverse effect on net income.

In managing the Company’s asset/liability position, the Board and management aim to regulate the Company’s interest rate risk while minimizing net interest margin compression. At times, depending on the level of general interest rates, the relationship between long and short-term interest rates, market conditions and competitive factors, the Board and management may determine to increase the Company’s interest rate risk position somewhat in order to increase its net interest margin. The Company’s results of operations and net portfolio values remain vulnerable to changes in interest rates and fluctuations in the difference between long and short-term interest rates.

The primary tool utilized by the ALCO to manage interest rate risk is earnings at risk modeling (interest rate sensitivity analysis). Information, such as principal balance, interest rate, maturity date, cash flows, next repricing date (if needed) and current rates are uploaded into the model to create an ending balance sheet. In addition, the ALCO makes certain assumptions regarding prepayment speeds for loans and mortgage related investment securities along with any optionality within the deposits and borrowings. The model is first run under an assumption of a flat rate scenario (i.e. no change in current interest rates) with a static balance sheet. Three additional models are run in which a gradual increase of 200 bps, a gradual increase of 100 bps and a gradual decrease of 200 bps takes place over a 12-month period with a static balance sheet. Under these scenarios, assets subject to prepayments are adjusted to account for faster or slower prepayment assumptions. Any investment securities or borrowings that have callable options embedded in them are handled accordingly based on the interest rate scenario. The resulting changes in net interest income are then measured against the flat rate scenario. The Company also runs other interest rate scenarios to highlight potential interest rate risk.

In the declining rate scenario, net interest income is projected to decrease when compared to the forecasted net interest income in the flat rate scenario through the simulation period. The decrease in net interest income is a result of earning assets repricing and rolling over at lower yields at a faster pace than interest-bearing liabilities decline and/or reach their floors. In the rising rate scenarios, net interest income is projected to experience an increase from the flat rate scenario; however, the potential impact on earnings may be affected by the ability to lag deposit repricing on NOW, savings, money market deposit accounts and time accounts. Net interest income for the next twelve months in the +200/+100/-200 bp scenarios, as described above, is within the internal policy risk limits of not more than a 7.5% reduction in net interest income. The following table summarizes the percentage change in net interest income in the rising and declining rate scenarios over a 12-month period from the forecasted net interest income in the flat rate scenario using the September 30, 2023 balance sheet position:

Interest Rate Sensitivity Analysis Change in interest rates (in bps)		Percent change in net interest income
	+200		1.17	%
	+100		0.86	%
	-200		(1.60	%)

The Company anticipates that the trajectory of net interest income will continue to depend significantly on the timing and path of short to mid-term interest rates which are heavily driven by inflationary pressures and Federal Open Market Committee monetary policy. In response to the economic impact of the pandemic, the federal funds rate was reduced to near zero in March 2020, term interest rates fell sharply across the yield curve and the Company reduced deposit rates. Post-pandemic, inflationary pressures have resulted in a higher overall yield curve with Federal Funds increases of 425 bps in 2022 and an additional 100 bps in 2023. Current expectations are for short-term interest rates to normalize at current levels in the near-term as inflation levels have moderated. While deposit rates have increased meaningfully in 2023 in conjunction with the increase to short term interest rates, the Company continues to focus on managing deposit expense and overall deposit levels in an environment with elevated demand for liquidity.

48

Liquidity Risk

Liquidity risk arises from the possibility that the Company may not be able to satisfy current or future financial commitments or may become unduly reliant on alternate funding sources. The objective of liquidity management is to ensure the Company can fund balance sheet growth, meet the cash flow requirements of depositors wanting to withdraw funds or borrowers needing assurance that sufficient funds will be available to meet their credit needs. ALCO is responsible for liquidity management and has developed guidelines, which cover all assets and liabilities, as well as off-balance sheet items that are potential sources or uses of liquidity. Liquidity policies must also provide the flexibility to implement appropriate strategies, along with regular monitoring of liquidity and testing of the contingent liquidity plan. Requirements change as loans grow, deposits and securities mature and payments on borrowings are made. Liquidity management includes a focus on interest rate sensitivity management with a goal of avoiding widely fluctuating net interest margins through periods of changing economic conditions. Loan repayments and maturing investment securities are a relatively predictable source of funds. However, deposit flows, calls of investment securities and prepayments of loans and mortgage-related securities are strongly influenced by interest rates, the housing market, general and local economic conditions, and competition in the marketplace. Management continually monitors marketplace trends to identify patterns that might improve the predictability of the timing of deposit flows or asset prepayments.

The primary liquidity measurement the Company utilizes is called “Basic Surplus,” which captures the adequacy of its access to reliable sources of cash relative to the stability of its funding mix of average liabilities. This approach recognizes the importance of balancing levels of cash flow liquidity from short and long-term securities with the availability of dependable borrowing sources, which can be accessed when necessary. At September 30, 2023, the Company’s Basic Surplus measurement was 12.1% of total assets, or $1.67 billion, as compared to the December 31, 2022 Basic Surplus of 13.2%, or $1.55 billion, and was above the Company’s minimum of 5% (calculated at $691.4 million and $587.0 million of period end total assets as September 30, 2023 and December 31, 2022, respectively) set forth in its liquidity policies.

At September 30, 2023 and December 31, 2022, Federal Home Loan Bank (“FHLB”) advances outstanding totaled $429.7 million and $443.8 million, respectively. At September 30, 2023 and December 31, 2022, the Bank had $71.0 million and $8.0 million, respectively, of collateral encumbered by municipal letters of credit. The Bank is a member of the FHLB system and had additional borrowing capacity from the FHLB of approximately $1.04 billion at September 30, 2023 and $1.17 billion at December 31, 2022. In addition, unpledged securities could have been used to increase borrowing capacity at the FHLB by an additional $536.8 million and $898.1 million at September 30, 2023 and December 31, 2022, respectively, or used to collateralize other borrowings, such as repurchase agreements. The Company also has the ability to issue brokered time deposits and to borrow against established borrowing facilities with other banks (federal funds), which could provide additional liquidity of $1.96 billion at September 30, 2023 and $1.92 billion at December 31, 2022. In addition, the Bank has a “Borrower-in-Custody” program with the FRB with the addition of the ability to pledge automobile and residential solar loans as collateral. At September 30, 2023 and December 31, 2022, the Bank had the capacity to borrow $982.3 million and $622.7 million, respectively, from this program. The Company’s internal policy authorizes borrowing up to 25% of assets. Under this policy, remaining available borrowing capacity totaled $2.94 billion at September 30, 2023 and $2.41 billion at December 31, 2022.

This Basic Surplus approach enables the Company to appropriately manage liquidity from both operational and contingency perspectives. By tempering the need for cash flow liquidity with reliable borrowing facilities, the Company is able to operate with a more fully invested and, therefore, higher interest income generating securities portfolio. The makeup and term structure of the securities portfolio is, in part, impacted by the overall interest rate sensitivity of the balance sheet. Investment decisions and deposit pricing strategies are impacted by the liquidity position. The Company considers its Basic Surplus position to be strong. However, certain events may adversely impact the Company’s liquidity position in 2023. Continued increases to interest rates could result in deposit declines as depositors have alternative opportunities for yield on their excess funds. In the current economic environment, draws against lines of credit could drive asset growth higher. Disruptions in wholesale funding markets could spark increased competition for deposits. These scenarios could lead to a decrease in the Company’s Basic Surplus measure below the minimum policy level of 5%. Note, enhanced liquidity monitoring was put in place to quickly respond to the changing environment during the coronavirus pandemic including increasing the frequency of monitoring and adding additional sources of liquidity. While, the pandemic has come to an end, this enhanced monitoring continues as rising interest rates and the recent bank failures have led to a deposit decline in the banking system and increased volatility to liquidity risk.

At September 30, 2023, a portion of the Company’s loans and securities were pledged as collateral on borrowings. Therefore, once on-balance-sheet liquidity is reduced, future growth of earning assets will depend upon the Company’s ability to obtain additional funding, through growth of core deposits and collateral management and may require further use of brokered time deposits or other higher cost borrowing arrangements.

The Company’s primary source of funds is the Bank. Certain restrictions exist regarding the ability of the subsidiary bank to transfer funds to the Company in the form of cash dividends. The approval of the OCC is required to pay dividends when a bank fails to meet certain minimum regulatory capital standards or when such dividends are in excess of a subsidiary bank’s earnings retained in the current year plus retained net profits for the preceding two years as specified in applicable OCC regulations. At September 30, 2023, approximately $95.0 million of the total stockholders’ equity of the Bank was available for payment of dividends to the Company without approval by the OCC. The Bank’s ability to pay dividends is also subject to the Bank being in compliance with regulatory capital requirements. The Bank is currently in compliance with these requirements. Under the State of Delaware General Corporation Law, the Company may declare and pay dividends either out of accumulated net retained earnings or capital surplus.

49

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information called for by Item 3 is contained in the Liquidity and Interest Rate Sensitivity Management section of the Management’s Discussion and Analysis of Financial Condition and Results of Operations.

ITEM 4. CONTROLS AND PROCEDURES

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2023, the Company’s disclosure controls and procedures were effective.

50

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are no material legal proceedings, other than ordinary routine litigation incidental to the business, to which the Company or any of its subsidiaries is a party or of which any of their property is subject.

ITEM 1A. RISK FACTORS

There are no material changes to the risk factors as previously discussed in Part II, Item 1A. of our March 31, 2023 Quarterly Report on Form 10-Q and in Part I, Item 1A. of our 2022 Annual Report on Form 10-K.

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

The table below sets forth the information with respect to purchases made by the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a) (3) under the Securities Exchange Act of 1934) of our common stock during the quarter ended September 30, 2023:

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan		Maximum Number of Shares That May Yet be Purchased Under the Plans(1)
7/1/23 - 7/31/23		68,500	$	-		68,500		1,444,500
8/1/23 - 8/31/23		-		-		-		1,444,500
9/1/23 - 9/30/23		-		-		-		1,444,500
Total		68,500	$	31.61		68,500		1,444,500

(1) The Company purchased 68,500 shares of its common stock during the third quarter of 2023 at an average price of $31.61 per share under its previously announced share repurchase program. The Company may repurchase shares of its common stock from time to time to mitigate the potential dilutive effects of stock-based incentive plans and other potential uses of common stock for corporate purposes. As of September 30, 2023, there were 1,444,500 shares available for repurchase under this plan announced on December 20, 2021, and set to expire on December 31, 2023.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

None

ITEM 5. OTHER INFORMATION

During the three months ended September 30, 2023, there were no Rule 10b5-1 plans or non-Rule 10b5-1 trading arrangements adopted, modified or terminated by any director or officer of the Company.

51

ITEM 6. EXHIBITS

2.1	First Amendment to Agreement and Plan of Merger, dated as of August 9, 2023, by and among NBT Bancorp Inc., NBT Bank, National Association, Salisbury Bancorp, Inc. and Salisbury Bank and Trust Company (filed as Exhibit 2.2 to Registrant’s Form 8-K, filed on August 14, 2023 and incorporated herein by reference).
3.1	Restated Certificate of Incorporation of NBT Bancorp Inc. as amended through July 1, 2015 (filed as Exhibit 3.1 to Registrant’s Form 10-Q, filed on August 10, 2015 and incorporated herein by reference).
3.2	Amended and Restated Bylaws of NBT Bancorp Inc. effective May 22, 2018 (filed as Exhibit 3.1 to Registrant’s Form 8-K, filed on May 23, 2018 and incorporated herein by reference).
3.3	Certificate of Designation of the Series A Junior Participating Preferred Stock (filed as Exhibit A to Exhibit 4.1 of the Registrant’s Form 8-K, filed on November 18, 2004 and incorporated herein by reference).
31.1	Certification by the Chief Executive Officer pursuant to Rules 13(a)-14(a)/15(d)-14(e) of the Securities and Exchange Act of 1934.
31.2	Certification by the Chief Financial Officer pursuant to Rules 13(a)-14(a)/15(d)-14(e) of the Securities and Exchange Act of 1934.
32.1	Certification by the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

52

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, this 9th day of November 2023.

	NBT BANCORP INC.
By:	/s/ Scott A. Kingsley
	Scott A. Kingsley
	Chief Financial Officer

53

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John H. Watt, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of NBT Bancorp Inc.

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

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

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

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

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

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

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

5. The registrant’s other certifying officer(s) 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: November 9, 2023
By:	/s/ John H. Watt, Jr.
	John H. Watt, Jr.
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Scott A. Kingsley, certify that:

1. I have reviewed this quarterly report on Form 10-Q of NBT Bancorp Inc.

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

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

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

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

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

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

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

5. The registrant’s other certifying officer(s) 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: November 9, 2023
By:	/s/ Scott A. Kingsley
	Scott A. Kingsley
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Written Statement of the Chief Executive Officer Pursuant to Section 906 of the SARBANES-OXLEY ACT OF 2002

The undersigned, the Chief Executive Officer of NBT Bancorp Inc. (the “Company”), hereby certifies that to his knowledge on the date hereof:

(a) the Form 10-Q of the Company for the Quarterly Period Ended September 30, 2023, filed on the date hereof with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

/s/ John H. Watt, Jr.

John H. Watt, Jr.

Chief Executive Officer

November 9, 2023

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to NBT Bancorp Inc. and will be retained by NBT Bancorp Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

Written Statement of the Chief Financial Officer Pursuant to Section 906 of the SARBANES-OXLEY ACT OF 2002

The undersigned, the Chief Financial Officer of NBT Bancorp Inc. (the “Company”), hereby certifies that to his knowledge on the date hereof:

(a) the Form 10-Q of the Company for the Quarterly Period Ended September 30, 2023, filed on the date hereof with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

/s/ Scott A. Kingsley

Scott A. Kingsley

Chief Financial Officer

November 9, 2023

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to NBT Bancorp Inc. and will be retained by NBT Bancorp Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2023	Oct. 31, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Document Transition Report	false
Entity File Number	0-14703
Entity Registrant Name	NBT BANCORP INC
Entity Central Index Key	0000790359
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	16-1268674
Entity Address, Address Line One	52 South Broad Street
Entity Address, City or Town	Norwich
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	13815
City Area Code	607
Local Phone Number	337-2265
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	NBTB
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		47,087,868

XML

Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Assets
Cash and due from banks	$ 213,358	$ 166,488
Short-term interest-bearing accounts	459,296	30,862
Equity securities, at fair value	35,600	30,784
Securities available for sale, at fair value	1,399,032	1,527,225
Securities held to maturity (fair value of $783,986 and $812,647, respectively)	914,520	919,517
Federal Reserve and Federal Home Loan Bank stock	50,333	44,713
Loans held for sale	4,113	562
Loans	9,667,375	8,150,147
Less allowance for loan losses	114,601	100,800
Net loans	9,552,774	8,049,347
Premises and equipment, net	82,837	69,047
Goodwill	360,171	281,204
Intangible assets, net	42,574	7,341
Bank owned life insurance	264,537	232,409
Other assets	448,483	379,797
Total assets	13,827,628	11,739,296
Liabilities
Demand (noninterest bearing)	3,716,309	3,617,324
Savings, NOW and money market	6,340,944	5,444,837
Time	1,344,199	433,772
Total deposits	11,401,452	9,495,933
Short-term borrowings	490,180	585,012
Long-term debt	29,834	4,815
Subordinated debt, net	119,393	96,927
Junior subordinated debt	101,196	101,196
Other liabilities	322,752	281,859
Total liabilities	12,464,807	10,565,742
Stockholders' equity
Preferred stock, $0.01 par value, 2,500,000 shares authorized	0	0
Common stock, $0.01 par value, 100,000,000 shares authorized; 53,974,492 and 49,651,493 shares issued, respectively	540	497
Additional paid-in-capital	740,577	577,853
Retained earnings	1,006,459	958,433
Accumulated other comprehensive loss	(207,579)	(190,034)
Common stock in treasury, at cost, 6,886,895 and 6,793,670 shares, respectively	(177,176)	(173,195)
Total stockholders' equity	1,362,821	1,173,554
Total liabilities and stockholders' equity	$ 13,827,628	$ 11,739,296

XML

Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Assets
Securities held to maturity fair value	$ 783,986	$ 812,647
Stockholders' equity
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	2,500,000	2,500,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	53,974,492	49,651,493
Common stock in treasury, at cost (in shares)	6,886,895	6,793,670

XML

Consolidated Statements of Income (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Interest, fee and dividend income
Interest and fees on loans	$ 122,097	$ 85,266	$ 329,931	$ 237,148
Securities available for sale	7,495	7,665	22,604	21,822
Securities held to maturity	5,281	4,854	15,307	12,532
Other	2,221	1,429	4,033	3,396
Total interest, fee and dividend income	137,094	99,214	371,875	274,898
Interest expense
Deposits	30,758	2,233	61,888	5,831
Short-term borrowings	7,612	84	20,657	113
Long-term debt	294	20	631	140
Subordinated debt	1,612	1,360	4,281	4,078
Junior subordinated debt	1,923	1,039	5,372	2,325
Total interest expense	42,199	4,736	92,829	12,487
Net interest income	94,895	94,478	279,046	262,411
Provision for loan losses	12,633	4,484	20,148	9,470
Net interest income after provision for loan losses	82,262	89,994	258,898	252,941
Noninterest income
Service charges on deposit accounts	3,979	3,581	11,260	11,032
Card services income	5,503	5,654	15,469	24,100
Retirement plan administration fees	12,798	11,496	35,995	37,451
Wealth management	9,297	8,402	25,611	25,294
Insurance services	4,361	3,892	12,008	11,258
Bank owned life insurance income	1,568	1,560	4,974	4,625
Net securities (losses)	(183)	(148)	(9,822)	(914)
Other	2,913	2,735	8,195	8,641
Total noninterest income	40,236	37,172	103,690	121,487
Noninterest expense
Salaries and employee benefits	49,248	48,371	144,237	140,595
Technology and data services	9,677	9,096	27,989	26,588
Occupancy	7,090	6,481	21,233	19,761
Professional fees and outside services	4,149	3,817	12,486	11,999
Office supplies and postage	1,700	1,469	5,004	4,441
FDIC assessment	1,657	787	4,397	2,399
Advertising	667	559	1,841	1,943
Amortization of intangible assets	1,609	544	2,603	1,725
Loan collection and other real estate owned, net	569	549	2,115	1,690
Acquisition expenses	7,917	0	9,724	0
Other	6,514	5,021	17,284	13,815
Total noninterest expense	90,797	76,694	248,913	224,956
Income before income tax expense	31,701	50,472	113,675	149,472
Income tax expense	7,095	11,499	25,339	33,598
Net income	$ 24,606	$ 38,973	$ 88,336	$ 115,874
Earnings per share
Basic (in dollars per share)	$ 0.54	$ 0.91	$ 2.02	$ 2.7
Diluted (in dollars per share)	$ 0.54	$ 0.9	$ 2.01	$ 2.68

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Consolidated Statements of Comprehensive Income (Loss) (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Consolidated Statements of Comprehensive Income (Loss) (unaudited) [Abstract]
Net income	$ 24,606	$ 38,973	$ 88,336	$ 115,874
Securities available for sale:
Unrealized net holding (losses) arising during the period, gross	(24,059)	(78,653)	(35,117)	(214,543)
Tax effect	6,015	19,663	8,780	53,636
Unrealized net holding (losses) arising during the period, net	(18,044)	(58,990)	(26,337)	(160,907)
Reclassification adjustment for net losses in net income, gross	0	0	9,450	0
Tax effect	0	0	(2,363)	0
Reclassification adjustment for net losses in net income, net	0	0	7,087	0
Amortization of unrealized net gains for the reclassification of available for sale securities to held to maturity, gross	105	125	328	393
Tax effect	(26)	(31)	(82)	(98)
Amortization of unrealized net gains for the reclassification of available for sale securities to held to maturity, net	79	94	246	295
Total securities available for sale, net	(17,965)	(58,896)	(19,004)	(160,612)
Pension and other benefits:
Amortization of prior service cost and actuarial losses, gross	648	185	1,946	557
Tax effect	(162)	(47)	(487)	(140)
Amortization of prior service cost and actuarial losses, net	486	138	1,459	417
Total pension and other benefits, net	486	138	1,459	417
Total other comprehensive (loss)	(17,479)	(58,758)	(17,545)	(160,195)
Comprehensive income (loss)	$ 7,127	$ (19,785)	$ 70,791	$ (44,321)

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Consolidated Statements of Changes in Stockholders' Equity (unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in-Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive (Loss) Income [Member]	Common Stock in Treasury [Member]	Total	Cumulative Effect Adjustment for ASU Implementation [Member] Common Stock [Member]	Cumulative Effect Adjustment for ASU Implementation [Member] Additional Paid-in-Capital [Member]	Cumulative Effect Adjustment for ASU Implementation [Member] Retained Earnings [Member]	Cumulative Effect Adjustment for ASU Implementation [Member] Accumulated Other Comprehensive (Loss) Income [Member]	Cumulative Effect Adjustment for ASU Implementation [Member] Common Stock in Treasury [Member]	Cumulative Effect Adjustment for ASU Implementation [Member]
Balance at Dec. 31, 2021	$ 497	$ 576,976	$ 856,203	$ (23,344)	$ (159,879)	$ 1,250,453
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	0	115,874	0	0	115,874
Cash dividends	0	0	(36,907)	0	0	(36,907)
Purchase of treasury shares	0	0	0	0	(14,713)	(14,713)
Net issuance of shares to employee and other stock plans	0	(3,026)	0	0	1,111	(1,915)
Stock-based compensation	0	3,949	0	0	0	3,949
Other comprehensive (loss)	0	0	0	(160,195)	0	(160,195)
Balance at Sep. 30, 2022	497	577,899	935,170	(183,539)	(173,481)	1,156,546
Balance at Jun. 30, 2022	497	577,345	909,029	(124,781)	(173,534)	1,188,556
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	0	38,973	0	0	38,973
Cash dividends	0	0	(12,832)	0	0	(12,832)
Net issuance of shares to employee and other stock plans	0	(116)	0	0	53	(63)
Stock-based compensation	0	670	0	0	0	670
Other comprehensive (loss)	0	0	0	(58,758)	0	(58,758)
Balance at Sep. 30, 2022	497	577,899	935,170	(183,539)	(173,481)	1,156,546
Balance at Dec. 31, 2022	497	577,853	958,433	(190,034)	(173,195)	1,173,554
Balance (ASU 2022-02 [Member]) at Dec. 31, 2022							$ 0	$ 0	$ 502	$ 0	$ 0	$ 502
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	0	88,336	0	0	88,336
Cash dividends	0	0	(40,812)	0	0	(40,812)
Issuance of common stock for acquisition	43	161,680	0	0	0	161,723
Purchase of treasury shares	0	0	0	0	(4,944)	(4,944)
Net issuance of shares to employee and other stock plans	0	(3,093)	0	0	963	(2,130)
Stock-based compensation	0	4,137	0	0	0	4,137
Other comprehensive (loss)	0	0	0	(17,545)	0	(17,545)
Balance at Sep. 30, 2023	540	740,577	1,006,459	(207,579)	(177,176)	1,362,821
Balance at Jun. 30, 2023	497	578,322	996,920	(190,100)	(175,146)	1,210,493
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	0	24,606	0	0	24,606
Cash dividends	0	0	(15,067)	0	0	(15,067)
Issuance of common stock for acquisition	43	161,680	0	0	0	161,723
Purchase of treasury shares	0	0	0	0	(2,166)	(2,166)
Net issuance of shares to employee and other stock plans	0	(250)	0	0	136	(114)
Stock-based compensation	0	825	0	0	0	825
Other comprehensive (loss)	0	0	0	(17,479)	0	(17,479)
Balance at Sep. 30, 2023	$ 540	$ 740,577	$ 1,006,459	$ (207,579)	$ (177,176)	$ 1,362,821

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Consolidated Statements of Changes in Stockholders' Equity (unaudited) (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Consolidated Statements of Changes in Stockholders' Equity (unaudited) [Abstract]
Cash dividends - per share (in dollars per share)	$ 0.32	$ 0.3	$ 0.92	$ 0.86
Issuance of common stock for acquisition (in shares)	4,322,999		4,322,999
Purchase of treasury shares (in shares)	68,500		155,500	400,000
Net issuance of shares to employee benefit plans and other stock plans (in shares)	6,334	2,849	62,275	71,243

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Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Operating activities
Net income	$ 88,336	$ 115,874
Adjustments to reconcile net income to net cash provided by operating activities
Provision for loan losses	20,148	9,470
Depreciation and amortization of premises and equipment	7,808	7,581
Net amortization on securities	2,057	2,736
Amortization of intangible assets	2,603	1,725
Amortization of operating lease right-of-use assets	5,029	4,989
Excess tax benefit on stock-based compensation	(239)	(183)
Stock-based compensation expense	4,137	3,949
Bank owned life insurance income	(4,974)	(4,625)
Amortization of subordinated debt issuance costs	328	327
Proceeds from sale of loans held for sale	26,108	4,238
Originations of loans held for sale	(29,167)	(3,573)
Net gain on sale of loans held for sale	(88)	(112)
Net securities losses	9,822	914
Net gains on sale of other real estate owned	(50)	(259)
Net change in other assets and other liabilities	(10,054)	10,470
Net cash provided by operating activities	121,804	153,521
Investing activities
Net cash provided by (used in) acquisitions	44,564	(2,534)
Securities available for sale:
Proceeds from maturities, calls and principal paydowns	90,415	177,704
Proceeds from sales	124,577	0
Purchases	0	(262,861)
Securities held to maturity:
Proceeds from maturities, calls and principal paydowns	81,949	154,194
Purchases	(77,930)	(351,390)
Equity securities:
Purchases	(4)	(1,000)
Other:
Net increase in loans	(349,168)	(410,805)
Proceeds from Federal Home Loan Bank stock redemption	84,378	6,491
Purchases of Federal Reserve and Federal Home Loan Bank stock	(88,260)	(6,285)
Proceeds from settlement of bank owned life insurance	3,185	1,873
Purchases of premises and equipment, net	(6,333)	(4,749)
Proceeds from sales of other real estate owned	229	426
Net cash used in investing activities	(92,398)	(698,936)
Financing activities
Net increase (decrease) in deposits	596,543	(315,718)
Net decrease in short-term borrowings	(128,214)	(23,241)
Proceeds from long-term debt	25,000	0
Repayments of long-term debt	(80)	(10,673)
Cash paid by employer for tax-withholding on stock issuance	(1,595)	(1,346)
Purchase of treasury stock	(4,944)	(14,713)
Cash dividends	(40,812)	(36,907)
Net cash provided by (used in) financing activities	445,898	(402,598)
Net increase (decrease) in cash and cash equivalents	475,304	(948,013)
Cash and cash equivalents at beginning of period	197,350	1,269,071
Cash and cash equivalents at end of period	672,654	321,058
Cash paid during the period for:
Interest expense	78,130	14,456
Income taxes paid, net of refund	26,663	41,903
Noncash investing activities:
Loans transferred to other real estate owned	74	0
Acquisitions:
Fair value of assets acquired, excluding acquired cash and goodwill	1,417,392	705
Fair value of liabilities assumed	$ 1,380,386	$ 0

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Description of Business

9 Months Ended

Sep. 30, 2023

Description of Business [Abstract]

Description of Business

1. Description of Business

NBT Bancorp Inc. is a registered financial holding company incorporated in the state of Delaware in 1986, with its principal headquarters located in Norwich, New York. The principal assets of NBT Bancorp Inc. consist of all of the outstanding shares of common stock of its subsidiaries, including: NBT Bank, National Association (the “Bank”), NBT Financial Services, Inc. (“NBT Financial”), NBT Holdings, Inc. (“NBT Holdings”), CNBF Capital Trust I, NBT Statutory Trust I, NBT Statutory Trust II, Alliance Financial Capital Trust I and Alliance Financial Capital Trust II. The principal sources of revenue for NBT Bancorp Inc. are the management fees and dividends it receives from the Bank, NBT Financial and NBT Holdings. Collectively, NBT Bancorp Inc. and its subsidiaries are referred to herein as (the “Company”).

The Company’s business, primarily conducted through the Bank, consists of providing commercial banking, retail banking and wealth management services primarily to customers in its market area, which includes upstate New York, northeastern Pennsylvania, southern New Hampshire, western Massachusetts, Vermont, southern Maine and central and northwestern Connecticut. The Company has been, and intends to continue to be, a community-oriented financial institution offering a variety of financial services. The Company’s business philosophy is to operate as a community bank with local decision-making, providing a broad array of banking and financial services to retail, commercial and municipal customers.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim consolidated financial statements include the accounts of NBT Bancorp Inc. and its wholly-owned subsidiaries: the Bank, NBT Financial and NBT Holdings. In the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and in accordance with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, the consolidated financial statements do not include all of the information and notes necessary for complete financial statements in conformity with GAAP. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2022 Annual Report on Form 10-K. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. All material intercompany transactions have been eliminated in consolidation. Amounts previously reported in the consolidated financial statements are reclassified whenever necessary to conform to current period presentation. The Company has evaluated subsequent events for potential recognition and/or disclosure and there were none identified.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results may differ from those estimates and such differences could be material to the financial statements.

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2023

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

3. Recent Accounting Pronouncements

Recently Adopted Accounting Standards

In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) 2022-02, Financial Instruments - CECL Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”). The ASU eliminates the guidance on Troubled Debt Restructurings (“TDRs”) and requires an evaluation on all loan modifications to determine if they result in a new loan or a continuation of the existing loan. The ASU also requires that entities disclose current-period gross charge-offs by year of origination. The elimination of the TDR guidance may be adopted prospectively for loan modifications after adoption or on a modified retrospective basis, which would also apply to loans previously modified, resulting in a cumulative effect adjustment to retained earnings in the period of adoption for changes in the allowance for credit losses. The amendments in this ASU were effective for the Company on January 1, 2023, with early adoption permitted. The Company adopted ASU 2022-02 on January 1, 2023 (“Day 1”) using the modified retrospective method and recorded a net increase to retained earnings of $0.5 million. The transition adjustment includes a $0.6 million impact to the allowance for credit losses on loans and a $0.1 million impact to the deferred tax asset.

Accounting Standards Issued Not Yet Adopted

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements, which amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification. The ASU was issued in response to the SEC’s August 2018 final rule that updated and simplified disclosure requirements that the SEC believed were redundant, duplicative, overlapping, outdated, or superseded. The new guidance is intended to align GAAP requirements with those of the SEC. The ASU will become effective on the earlier of the date on which the SEC removes its disclosure requirements for the related disclosure or June 30, 2027. Early adoption is not permitted. The adoption is not expected to have a material impact on the consolidated financial statements.

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Acquisitions

9 Months Ended

Sep. 30, 2023

Acquisitions [Abstract]

Acquisitions

4. Acquisitions

Salisbury Bancorp, Inc.

On August 11, 2023, the Company completed the acquisition of Salisbury Bancorp, Inc. (“Salisbury”) through the merger of Salisbury with and into the Company, with the Company surviving the merger, for $161.7 million in stock. Salisbury was a Connecticut-chartered commercial bank headquartered in Lakeville, Connecticut with 13 banking offices. The acquisition enhances the Company’s presence in Massachusetts’ Berkshire county, as well as extends its footprint into New York’s Dutchess, Orange and Ulster counties and in Connecticut’s Litchfield county. In connection with the acquisition, the Company issued 4.32 million shares and acquired approximately $1.46 billion of identifiable assets. Preliminary goodwill of $78.1 million was recognized as a result of the merger and is not amortizable or deductible for tax purposes. The effects of the acquired assets and liabilities have been included in the consolidated financial statements since that date. As a result of the full integration of the operations of Salisbury, it is not practicable to determine all revenue or net income included in the Company’s operating results relating to Salisbury since the date of acquisition as Salisbury results cannot be separately identified.

The Company determined that this acquisition constitutes a business combination and therefore was accounted for using the acquisition method of accounting. Accordingly, as of the date of the acquisition, the Company recorded the assets acquired, liabilities assumed and consideration paid at fair value based on management’s best estimates using information available at the date of the acquisition and these estimates are subject to adjustment based on updated information not available at the time of the acquisition. The amount of goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of the Company with Salisbury. Accrued income taxes, deferred taxes, and certain fixed assets associated with the Salisbury acquisition were recorded on a provisional basis and could vary from the actual recorded balance once market-based appraisals and tax provisions and returns are finalized.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed:

	August 11, 2023
(In thousands)	Salisbury Bancorp, Inc.
Consideration:
Cash paid to shareholders (fractional shares)	$	15
Common stock issuance		161,723
Total net consideration	$	161,738
Recognized amounts of identifiable assets acquired and (liabilities) assumed:
Cash and cash equivalents	$	48,665
Securities available for sale		122,667
Loans, net of allowance for credit losses on purchased credit deteriorated loans		1,174,237
Premises and equipment, net		15,254
Core deposit intangibles		31,188
Wealth management customer intangible		4,654
Bank owned life insurance		30,315
Other assets		37,083
Total identifiable assets acquired	$	1,464,063
Deposits	$	(1,308,976	)
Borrowings		(55,461	)
Other liabilities		(15,949	)
Total liabilities assumed	$	(1,380,386	)
Total identifiable assets, net	$	83,677
Goodwill	$	78,061

The following is a description of the valuation methodologies used to estimate the fair values of major categories of assets acquired and liabilities assumed. The Company used an independent valuation specialist to assist with the determination of fair values for certain acquired assets and assumed liabilities.

Cash and due from banks - The estimated fair value was determined to approximate the carrying amount of these assets.

Securities available for sale - The estimated fair value of the investment portfolio was based on quoted market prices and dealer quotes. The investment securities were sold immediately after the merger and no gains or losses were recorded.

Loans - The estimated fair value of loans were based on a discounted cash flow methodology applied on a pooled basis for non-purchased credit deteriorated (“non-PCD”) loans and for purchased credit deteriorated (“PCD”) loans. The valuation considered underlying characteristics including loan type, term, rate, payment schedule and credit rating. Other factors included assumptions related to prepayments, probability of default and loss given default. The discount rates applied were based on a build-up approach considering the funding mix, servicing costs, liquidity premium and factors related to performance risk.

Core deposit intangible - The core deposit intangible was valued utilizing the cost savings method approach, which recognizes the cost savings represented by the expense of maintaining the core deposit base versus the cost of an alternative funding source. The valuation incorporates assumptions related to account retention, discount rates, deposit interest rates, deposit maintenance costs and alternative funding rates.

Wealth management customer intangible - The wealth management customer intangible was valued utilizing the income approach, which employs a present value analysis, which calculates the expected after-tax cash flow benefits of the net revenues generated by the acquired customers over the expected lives of the acquired customers, discounted at a long-term market-oriented after-tax rate of return on investment. The value assigned to the acquired customers represents the future economic benefit from acquiring the customers (net of operating expenses).

Deposits - The fair value of noninterest bearing demand deposits, interest checking, money market and savings deposit accounts from Salisbury were assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. Certificate of deposit (time deposit accounts) were valued at the present value of the certificates’ expected contractual payments discounted at market rates for similar certificates.

Borrowings - The estimated fair value of short-term borrowings was determined to approximate stated value. Subordinated debt was valued using a discounted cash flow approach incorporating a discount rate that incorporated similar terms, maturity and credit rating.

Accounting for Acquired Loans

Acquired loans are classified into two categories PCD loans and non-PCD loans. PCD loans are defined as a loan or group of loans that have experienced more than insignificant credit deterioration since origination. Non-PCD loans will have an allowance established on acquisition date, which is recognized as an expense through the provision for credit losses. For PCD loans, an allowance is recognized on day 1 by adding it to the fair value of the loan, which is the “Day 1 amortized cost”. There is no provision for credit loss expense recognized on PCD loans because the initial allowance is established by grossing-up the amortized cost of the PCD loan. A day 1 allowance for credit losses on non-PCD loans of $8.8 million was recorded through the provision for loan losses within the unaudited interim consolidated statements of income. The following table provides details related to the fair value of acquired PCD loans.

(In thousands)	PCD Loans
Par value of PCD loans at acquisition	$	219,076
Allowance for credit losses at acquisition		5,772
Discount at acquisition		(24,512	)
Fair value of PCD loans at acquisition	$	200,336

Direct costs related to the acquisition were expensed as incurred. Merger and acquisition integration-related expenses were $7.9 million and $9.7 million during the three and nine months ended September 30, 2023, respectively. These amounts have been separately stated in the unaudited interim consolidated statements of income.

Supplemental Pro Forma Financial Information (Unaudited)

The following table presents certain unaudited pro forma financial information for illustrative purposes only, for the three and nine months ended September 30, 2023 and 2022, as if Salisbury had been acquired on January 1, 2023. This unaudited pro forma information combines the historical results of Salisbury with the Company’s consolidated historical results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the respective periods. The pro forma information is not indicative of what would have occurred had the acquisition occurred as of the beginning of the year prior to the acquisition. The unaudited pro forma information does not consider any changes to the provision expense resulting from recording loan assets at fair value, cost savings or business synergies. As a result, actual amounts would have differed from the unaudited pro forma information presented and the differences could be significant.

	Pro Forma (Unaudited)				Pro Forma (Unaudited)
	Three Months Ended				Nine Months Ended
(In thousands)	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Total revenue, net of interest expense	$	130,881	$	147,621	$	404,580	$	427,440
Net income		12,182		43,374		81,859		127,209

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Securities

9 Months Ended

Sep. 30, 2023

Securities [Abstract]

Securities

5. Securities

The amortized cost, estimated fair value and unrealized gains (losses) of available for sale (“AFS”) securities are as follows:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
As of September 30, 2023
U.S. treasury	$	133,160	$	-	$	(11,565	)	$	121,595
Federal agency		248,392		-		(44,636	)		203,756
State & municipal		96,449		-		(13,164	)		83,285
Mortgage-backed:
Government-sponsored enterprises		412,257		-		(61,231	)		351,026
U.S. government agency securities		74,812		6		(10,076	)		64,742
Collateralized mortgage obligations:
Government-sponsored enterprises		463,436		2		(63,389	)		400,049
U.S. government agency securities		164,418		-		(31,056	)		133,362
Corporate		48,432		-		(7,215	)		41,217
Total AFS securities	$	1,641,356	$	8	$	(242,332	)	$	1,399,032
As of December 31, 2022
U.S. treasury	$	132,891	$	-	$	(11,233	)	$	121,658
Federal agency		248,419		-		(42,000	)		206,419
State & municipal		97,036		5		(14,190	)		82,851
Mortgage-backed:
Government-sponsored enterprises		454,177		9		(54,675	)		399,511
U.S. government agency securities		81,844		15		(7,676	)		74,183
Collateralized mortgage obligations:
Government-sponsored enterprises		498,021		9		(59,473	)		438,557
U.S. government agency securities		171,090		-		(21,284	)		149,806
Corporate		60,404		-		(6,164	)		54,240
Total AFS securities	$	1,743,882	$	38	$	(216,695	)	$	1,527,225

There was no allowance for credit losses on AFS securities as of September 30, 2023 and December 31, 2022.

During the three months ended September 30, 2023, there were no gains or losses reclassified out of accumulated other comprehensive income (loss) (“AOCI”) and into earnings. During the nine months ended September 30, 2023, there were $4.5 million of gross realized losses reclassified out of AOCI and into earnings and the Company incurred a $5.0 million loss on the write-off of an AFS corporate debt security from a subordinated debt investment of a financial institution that failed. These losses were reclassified out of AOCI and into earnings in net securities losses in the consolidated statements of income. During the three and nine months ended September 30, 2022 there were no gains or losses reclassified out of AOCI and into earnings.

The amortized cost, estimated fair value and unrealized gains (losses) of held to maturity (“HTM”) securities are as follows:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
As of September 30, 2023
Federal agency	$	100,000	$	-	$	(23,003	)	$	76,997
Mortgage-backed:
Government-sponsored enterprises		233,580		-		(45,066	)		188,514
U.S. government agency securities		17,094		-		(1,328	)		15,766
Collateralized mortgage obligations:
Government-sponsored enterprises		192,243		-		(18,562	)		173,681
U.S. government agency securities		64,537		-		(13,259	)		51,278
State & municipal		307,066		-		(29,316	)		277,750
Total HTM securities	$	914,520	$	-	$	(130,534	)	$	783,986
As of December 31, 2022
Federal agency	$	100,000	$	-	$	(20,678	)	$	79,322
Mortgage-backed:
Government-sponsored enterprises		249,511		-		(36,819	)		212,692
U.S. government agency securities		18,396		4		(619	)		17,781
Collateralized mortgage obligations:
Government-sponsored enterprises		207,738		200		(14,876	)		193,062
U.S. government agency securities		66,628		-		(9,842	)		56,786
State & municipal		277,244		5		(24,245	)		253,004
Total HTM securities	$	919,517	$	209	$	(107,079	)	$	812,647

At September 30, 2023 and December 31, 2022, all of the mortgaged-backed HTM securities were comprised of U.S. government agency and government-sponsored enterprises securities. There was no allowance for credit losses on HTM securities as of September 30, 2023 and December 31, 2022 because the expectation of nonrepayment of the amortized cost was zero, except for state & municipal securities, which such expected losses from nonrepayment were immaterial.

The Company recorded no gains from calls on HTM securities for the three months ended September 30, 2023 and 2022. The Company recorded no gains from calls on HTM securities for the nine months ended September 30, 2023. Included in net realized gains (losses), the Company recorded gains from calls on HTM securities of approximately $4 thousand for the nine months ended September 30, 2022.

AFS and HTM securities with amortized costs totaling $1.99 billion at September 30, 2023 and $1.73 billion at December 31, 2022 were pledged to secure public deposits and for other purposes required or permitted by law. Additionally, at September 30, 2023 and December 31, 2022, AFS and HTM securities with an amortized cost totaling $157.4 million and $149.5 million, respectively, were pledged as collateral for securities sold under repurchase agreements.

The following tables set forth information with regard to gains and (losses) on equity securities:

	Three Months Ended September 30,
(In thousands)	2023			2022
Net (losses) recognized on equity securities	$	(183	)	$	(148	)
Less: Net (losses) recognized on equity securities sold during the period		-			-
Unrealized (losses) recognized on equity securities still held	$	(183	)	$	(148	)

	Nine Months Ended September 30,
(In thousands)	2023			2022
Net (losses) recognized on equity securities	$	(372	)	$	(918	)
Less: Net (losses) recognized on equity securities sold during the period		-			-
Unrealized (losses) recognized on equity securities still held	$	(372	)	$	(918	)

As of September 30, 2023 and December 31, 2022, the carrying value of equity securities without readily determinable fair values was $1.0 million. The Company performed a qualitative assessment to determine whether the investments were impaired and identified no areas of concern as of September 30, 2023 and 2022. There were no impairments, or downward or upward adjustments recognized for equity securities without readily determinable fair values during the three and nine months ended September 30, 2023 and 2022.

The following table sets forth information with regard to contractual maturities of debt securities at September 30, 2023:

(In thousands)	Amortized Cost		Estimated Fair Value
AFS debt securities:
Within one year	$	16,971	$	16,676
From one to five years		509,520		447,316
From five to ten years		423,813		359,342
After ten years		691,052		575,698
Total AFS debt securities	$	1,641,356	$	1,399,032
HTM debt securities:
Within one year	$	88,319	$	88,240
From one to five years		100,237		95,052
From five to ten years		279,872		234,309
After ten years		446,092		366,385
Total HTM debt securities	$	914,520	$	783,986

Maturities of mortgage-backed, collateralized mortgage obligations and asset-backed securities are stated based on their estimated average lives. Actual maturities may differ from estimated average lives or contractual maturities because, in certain cases, borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Except for U.S. government securities and government-sponsored enterprises securities, there were no holdings, when taken in the aggregate, of any single issuer that exceeded 10% of consolidated stockholders’ equity at September 30, 2023 and December 31, 2022.

The following table sets forth information with regard to investment securities with unrealized losses, for which an allowance for credit losses has not been recorded, segregated according to the length of time the securities had been in a continuous unrealized loss position:

	Less Than 12 Months							12 Months or Longer							Total
(In thousands)	Fair Value		Unrealized Losses			Number of Positions		Fair Value		Unrealized Losses			Number of Positions		Fair Value		Unrealized Losses			Number of Positions
As of September 30, 2023
AFS securities:
U.S. treasury	$	-	$	-			-	$	121,595	$	(11,565	)		8	$	121,595	$	(11,565	)		8
Federal agency		-		-			-		203,756		(44,636	)		16		203,756		(44,636	)		16
State & municipal		747		(21	)		1		82,538		(13,143	)		66		83,285		(13,164	)		67
Mortgage-backed		463		(7	)		25		414,686		(71,300	)		157		415,149		(71,307	)		182
Collateralized mortgage obligations		3,825		(31	)		6		528,324		(94,414	)		118		532,149		(94,445	)		124
Corporate		1,344		(101	)		1		39,873		(7,114	)		14		41,217		(7,215	)		15
Total securities with unrealized losses	$	6,379	$	(160	)		33	$	1,390,772	$	(242,172	)		379	$	1,397,151	$	(242,332	)		412
HTM securities:
Federal agency	$	-	$	-			-	$	76,997	$	(23,003	)		4	$	76,997	$	(23,003	)		4
Mortgage-backed		11,610		(975	)		1		192,576		(45,419	)		33		204,186		(46,394	)		34
Collateralized mortgage obligation		8,834		(134	)		2		216,125		(31,687	)		53		224,959		(31,821	)		55
State & municipal		24,593		(1,080	)		31		164,058		(28,236	)		193		188,651		(29,316	)		224
Total securities with unrealized losses	$	45,037	$	(2,189	)		34	$	649,756	$	(128,345	)		283	$	694,793	$	(130,534	)		317
As of December 31, 2022
AFS securities:
U.S. treasury	$	55,616	$	(3,864	)		5	$	66,042	$	(7,369	)		3	$	121,658	$	(11,233	)		8
Federal agency		-		-			-		206,419		(42,000	)		16		206,419		(42,000	)		16
State & municipal		3,679		(341	)		2		78,395		(13,849	)		64		82,074		(14,190	)		66
Mortgage-backed		204,447		(15,048	)		149		267,926		(47,303	)		32		472,373		(62,351	)		181
Collateralized mortgage obligations		211,612		(14,458	)		77		374,376		(66,299	)		49		585,988		(80,757	)		126
Corporate		34,434		(2,970	)		12		19,806		(3,194	)		6		54,240		(6,164	)		18
Total securities with unrealized losses	$	509,788	$	(36,681	)		245	$	1,012,964	$	(180,014	)		170	$	1,522,752	$	(216,695	)		415
HTM securities:
Federal agency	$	-	$	-			-	$	79,322	$	(20,678	)		4	$	79,322	$	(20,678	)		4
Mortgage-backed		91,417		(9,096	)		21		138,936		(28,342	)		13		230,353		(37,438	)		34
Collateralized mortgage obligations		191,644		(13,863	)		47		48,289		(10,855	)		8		239,933		(24,718	)		55
State & municipal		110,727		(4,930	)		149		82,949		(19,315	)		76		193,676		(24,245	)		225
Total securities with unrealized losses	$	393,788	$	(27,889	)		217	$	349,496	$	(79,190	)		101	$	743,284	$	(107,079	)		318

The Company does not believe the AFS securities that were in an unrealized loss position as of September 30, 2023 and December 31, 2022, which consisted of 412 and 415 individual securities, respectively, represented a credit loss impairment. AFS debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. As of September 30, 2023 and December 31, 2022, the majority of the AFS securities in an unrealized loss position consisted of debt securities issued by U.S. government agencies or U.S. government-sponsored enterprises that carry the explicit and/or implicit guarantee of the U.S. government, which are widely recognized as “risk- free” and have a long history of zero credit losses. Total gross unrealized losses were primarily attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. The Company does not intend to sell, nor is it more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, which may be at maturity. The Company elected to exclude accrued interest receivable (“AIR”) from the amortized cost basis of debt securities. AIR on AFS debt securities totaled $3.9 million at September 30, 2023 and $4.2 million at December 31, 2022 and is excluded from the estimate of credit losses and reported in the other assets financial statement line.

None of the Bank’s HTM debt securities were past due or on nonaccrual status as of September 30, 2023 and December 31, 2022. There was no accrued interest reversed against interest income for the three and nine months ended September 30, 2023 or the year ended December 31, 2022 as all securities remained on accrual status. In addition, there were no collateral-dependent HTM debt securities as of September 30, 2023 and December 31, 2022. As of September 30, 2023 and December 31, 2022, 66% and 70%, respectively, of the Company’s HTM debt securities were issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government, which are widely recognized as “risk-free,” and have a long history of zero credit losses. Therefore, the Company did not record an allowance for credit losses for these securities as of September 30, 2023 and December 31, 2022. The remaining HTM debt securities at September 30, 2023 and December 31, 2022 were comprised of state and municipal obligations with bond ratings of A to AAA. Utilizing the Current Expected Credit Losses (“CECL”) approach, the Company determined that the expected credit loss on its HTM municipal bond portfolio was immaterial and therefore no allowance for credit loss was recorded as of September 30, 2023 and December 31, 2022. AIR on HTM debt securities totaled $3.8 million at September 30, 2023 and December 31, 2022 and is excluded from the estimate of credit losses and reported in the other assets financial statement line.

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Allowance for Credit Losses and Credit Quality of Loans

9 Months Ended

Sep. 30, 2023

Allowance for Credit Losses and Credit Quality of Loans [Abstract]

Allowance for Credit Losses and Credit Quality of Loans

6. Allowance for Credit Losses and Credit Quality of Loans

As described in Note 3 Recent Accounting Pronouncements, the Company’s adoption of ASU 2022-02 resulted in an insignificant change to its methodology for estimating the allowance for credit losses on TDRs. The Day 1 decrease in allowance for credit loss on TDR loans relating to adoption of ASU 2022-02 was $0.6 million.

The allowance for credit losses totaled $114.6 million at September 30, 2023, compared to $100.8 million at December 31, 2022. The allowance for credit losses as a percentage of loans was 1.19% at September 30, 2023, compared to 1.24% at December 31, 2022.

During the first quarter of 2023, the Company made adjustments to the class segments within the portfolios to better align risk characteristics and reflect the monitoring and assessment of risks as the portfolios continue to evolve. Paycheck Protection Program was consolidated with Commercial & Industrial, as the portfolio had decreased to less than $1 million and no longer warranted a material class segment. The Other Consumer class segment was further separated into Residential Solar and Other Consumer. The growth in our Residential Solar loans warranted evaluation of this class separately from the Other Consumer class segments. The change to the class segments was applied retrospectively and did not have a significant impact on the allowance for loan losses. The following table illustrates the portfolio and class segments for the Company’s loan portfolio:

Portfolio Segment	Class
Commercial Loans	Commercial & Industrial
	Commercial Real Estate
Consumer Loans	Auto
	Residential Solar
	Other Consumer
Residential Loans

The allowance for credit losses calculation incorporated a 6-quarter forecast period to account for forecast economic conditions under each scenario utilized in the measurement. For periods beyond the 6-quarter forecast, the model reverts to long-term economic conditions over a 4-quarter reversion period on a straight-line basis. The Company considers a baseline, upside and downside economic forecast in measuring the allowance.

The quantitative model as of September 30, 2023 incorporated a baseline economic outlook along with an alternative downside scenario sourced from a reputable third-party to accommodate other potential economic conditions in the model, particularly significant unknowns relating to downside risks as of the measurement date. The baseline outlook projected a relatively low unemployment rate of 3.7%, rising modestly to 4.13% by the end of the forecast period. Northeast GDP’s annualized growth (on a quarterly basis) was expected to start the fourth quarter of 2023 at 3.5%, decreasing slightly to 2.9%, and then increasing to 3.8% by the end of the forecast period. Other utilized economic variables remained stable overall, with outlooks for annualized growth in retail sales improving, business output slightly deteriorating, and housing starts staying relatively unchanged. Key assumptions in the baseline economic outlook include the economy being at full employment in the coming quarters, recent bank failures not being symptomatic of broader issues in the financial system, and the reduction in the Federal Reserve’s balance sheet remaining on autopilot. The alternative downside scenario assumes deteriorated economic conditions from the baseline outlook. Under this scenario, northeast unemployment increases to 5.1% in the fourth quarter of 2023 and rises to a peak of 6.9% in the fourth quarter of 2024. These scenarios and their respective weightings are evaluated at each measurement date and reflect management’s expectations as of September 30, 2023. At September 30, 2023, the weightings were 70%, 0%, and 30% for the baseline, upside and downside economic forecasts, respectively. Qualitative adjustments were made for isolated model limitations related to modeled inputs given abnormally high historical retail sales and business output growth rates in prior quarters along with low unemployment. Additionally, a qualitative adjustment for inflation is applied to adjust for potential model limitations arising from the use of a macroeconomic variable denominated in nominal dollar terms as well as a qualitative adjustment for potential weakness in auto and commercial real estate collateral values. These factors were considered through separate quantitative processes and incorporated into the estimate of current expected credit losses at September 30, 2023.

The quantitative model as of June 30, 2023 incorporated a baseline economic outlook along with an alternative downside scenario sourced from a reputable third-party to accommodate other potential economic conditions in the model, particularly significant unknowns relating to downside risks as of the measurement date. The baseline outlook reflected an unemployment rate environment at pre-coronavirus (“COVID-19”) pandemic levels of 3.8% and increasing gradually to 4.2% by the end of the forecast period. Northeast GDP’s annualized growth (on a quarterly basis) was expected to start the third quarter of 2023 at about 3.6% and reach 4.1% by the end of the forecast period. Other utilized economic variables worsened overall, with outlooks for annualized growth in retail sales and business output declining from the prior quarter and housing starts staying relatively unchanged. Key assumptions in the baseline economic outlook include the economy being at full employment in the coming quarters, recent bank failures not being symptomatic of broader issues in the financial system, and the reduction in the Federal Reserve’s balance sheet remaining on autopilot. The alternative downside scenario assumes deteriorated economic conditions from the baseline outlook. Under this scenario, northeast unemployment increases to 5.2% in the third quarter of 2023 and rises to a peak of 7.0% in the third quarter of 2024. These scenarios and their respective weightings are evaluated at each measurement date and reflect management’s expectations as of June 30, 2023. At June 30, 2023, the weightings were 60%, 0% and 40% for the baseline, upside and downside economic forecasts, respectively. Qualitative adjustments were made for isolated model limitations related to modeled inputs given abnormally high retail sales and business output growth rates in prior quarters along with low unemployment. Additionally, a qualitative adjustment for inflation is applied to adjust for potential model limitations arising from the use of a macroeconomic variable denominated in nominal dollar terms as well as a qualitative adjustment for potential weakness in auto collateral values. These factors were considered through separate quantitative processes and incorporated into the estimate of current expected credit losses at June 30, 2023.

The quantitative model as of December 31, 2022 incorporated a baseline economic outlook along with an alternative downside scenario sourced from a reputable third-party to accommodate other potential economic conditions in the model. At December 31, 2022, the weightings were 50%, 0% and 50% for the baseline, upside and downside economic forecasts, respectively. The baseline outlook reflected an unemployment rate environment initially around pre-COVID-19 levels at 3.9% that increases slightly during the forecast period to 4.0%. Northeast GDP’s annualized growth (on a quarterly basis) was expected to start the first quarter of 2023 at approximately 3.9% and hovering around 4.6% by the end of the forecast period. Other utilized economic variables have generally deteriorated in their respective forecasts, with retail sales and housing starts forecasts declining from the prior year. Key assumptions in the baseline economic outlook included a full employment economy being realized in the near future, continued tapering of the Federal Reserve balance sheet, an increasing yield on ten-year treasury securities, and a gradual decline in global oil prices. The alternative downside scenario assumed deteriorated economic and pandemic related conditions from the baseline outlook. Under this scenario, northeast unemployment rises from 3.9% in the fourth quarter of 2022 to a peak of 6.9% in the first quarter of 2024. These scenarios and their respective weightings are evaluated at each measurement date and reflect management’s expectations as of December 31, 2022. Additional adjustments were made for factors not incorporated in the forecasts or the model, such as loss rate expectations for certain loan pools, considerations for inflation, and recent trends in asset value indices. Additional monitoring for industry concentrations, loan growth, and policy exceptions was also conducted. All these factors were considered through separate quantitative processes and incorporated when applicable into the estimate of current expected credit losses at December 31, 2022.

There were $219.5 million of PCD loans acquired from Salisbury during the three and nine months ended September 30, 2023 which resulted in an allowance for credit losses at acquisition of $5.8 million. There were no loans purchased with credit deterioration during the year ended December 31, 2022. During 2023, the Company purchased $2.4 million of residential loans at a 7.01% premium with a $17 thousand allowance for credit losses recorded for these loans. During 2022, the Company purchased $11.5 million of residential loans at a 1.53% premium and $50.1 million in consumer loans at par with an allowance for credit losses recorded on the purchase date of $3.2 million.

The Company made a policy election to report AIR in the other assets line item on the balance sheet. AIR on loans totaled $32.5 million at September 30, 2023 and $25.0 million at December 31, 2022 and there was no estimated allowance for credit losses related to AIR as of September 30, 2023 and December 31, 2022.

The following tables present the activity in the allowance for credit losses by our portfolio segments:

(In thousands)	Commercial Loans			Consumer Loans			Residential			Total
Balance as of June 30, 2023	$	36,963		$	47,883		$	15,554		$	100,400
Allowance for credit loss on PCD acquired loans		5,300			19			453			5,772
Charge-offs		(138	)		(6,167	)		(16	)		(6,321	)
Recoveries		474			1,549			94			2,117
Provision		4,121			3,990			4,522			12,633
Ending balance as of September 30, 2023	$	46,720		$	47,274		$	20,607		$	114,601
Balance as of June 30, 2022	$	32,358		$	44,940		$	16,302		$	93,600
Charge-offs		(624	)		(3,951	)		(118	)		(4,693	)
Recoveries		1,282			1,924			203			3,409
Provision		(60	)		5,397			(853	)		4,484
Ending balance as of September 30, 2022	$	32,956		$	48,310		$	15,534		$	96,800

(In thousands)	Commercial Loans			Consumer Loans			Residential			Total
Balance as of January 1, 2023 (after adoption of ASU 2022-02)	$	34,662		$	50,951		$	14,539		$	100,152
Allowance for credit loss on PCD acquired loans		5,300			19			453			5,772
Charge-offs		(514	)		(16,346	)		(460	)		(17,320	)
Recoveries		1,112			4,367			370			5,849
Provision		6,160			8,283			5,705			20,148
Ending balance as of September 30, 2023	$	46,720		$	47,274		$	20,607		$	114,601
Balance as of December 31, 2021	$	28,941		$	44,253		$	18,806		$	92,000
Charge-offs		(1,659	)		(11,051	)		(520	)		(13,230	)
Recoveries		2,212			5,693			655			8,560
Provision		3,462			9,415			(3,407	)		9,470
Ending balance as of September 30, 2022	$	32,956		$	48,310		$	15,534		$	96,800

The allowance for credit losses as of September 30, 2023 increased compared to the allowance estimates as of December 31, 2022 and June 30, 2023 due to the day 1 $14.5 million of allowance for acquired Salisbury loans which included both the $8.8 million of non-PCD allowance recognized through the provision for loan losses and the $5.8 million of PCD allowance reclassified from loans. The increase in the allowance for credit losses from December 31, 2022 and June 30, 2023 to September 30, 2023 was due to an increase in loan balances and a modest deterioration in the economic forecast. The provision expense for the three and nine months ended September 30, 2023 includes the $8.8 million of acquisition-related provision for credit losses.

Individually Evaluated Loans

As of September 30, 2023, there was one relationship identified to be evaluated for loss on an individual basis which had an amortized cost basis of $1.9 million, with no allowance for credit loss. As of December 31, 2022, two different relationships were identified to be evaluated for loss on an individual basis, which in aggregate, had an amortized cost basis of $2.4 million, with no allowance for credit loss.

The following table sets forth information with regard to past due and nonperforming loans by loan segment:

(In thousands)	31-60 Days Past Due Accruing		61-90 Days Past Due Accruing		Greater Than 90 Days Past Due Accruing		Total Past Due Accruing		Nonaccrual		Current		Recorded Total Loans
As of September 30, 2023
Commercial loans:
C&I	$	737	$	99	$	-	$	836	$	3,753	$	1,456,241	$	1,460,830
CRE		19,661		18		-		19,679		4,660		3,375,132		3,399,471
Total commercial loans	$	20,398	$	117	$	-	$	20,515	$	8,413	$	4,831,373	$	4,860,301
Consumer loans:
Auto	$	8,974	$	1,402	$	514	$	10,890	$	1,652	$	1,056,554	$	1,069,096
Residential solar		3,449		938		506		4,893		373		928,816		934,082
Other consumer		2,594		1,498		1,496		5,588		402		186,214		192,204
Total consumer loans	$	15,017	$	3,838	$	2,516	$	21,371	$	2,427	$	2,171,584	$	2,195,382
Residential	$	4,075	$	326	$	1,012	$	5,413	$	9,896	$	2,596,383	$	2,611,692
Total loans	$	39,490	$	4,281	$	3,528	$	47,299	$	20,736	$	9,599,340	$	9,667,375

(In thousands)	31-60 Days Past Due Accruing		61-90 Days Past Due Accruing		Greater Than 90 Days Past Due Accruing		Total Past Due Accruing		Nonaccrual		Current		Recorded Total Loans
As of December 31, 2022
Commercial loans:
C&I	$	342	$	99	$	4	$	445	$	2,244	$	1,238,468	$	1,241,157
CRE		336		96		-		432		5,780		2,689,196		2,695,408
Total commercial loans	$	678	$	195	$	4	$	877	$	8,024	$	3,927,664	$	3,936,565
Consumer loans:
Auto	$	8,640	$	1,393	$	785	$	10,818	$	1,494	$	950,389	$	962,701
Residential solar		2,858		731		474		4,063		79		852,656		856,798
Other consumer		3,483		1,838		1,789		7,110		94		272,384		279,588
Total consumer loans	$	14,981	$	3,962	$	3,048	$	21,991	$	1,667	$	2,075,429	$	2,099,087
Residential	$	2,496	$	555	$	771	$	3,822	$	7,542	$	2,103,131	$	2,114,495
Total loans	$	18,155	$	4,712	$	3,823	$	26,690	$	17,233	$	8,106,224	$	8,150,147

As of September 30, 2023 and December 31, 2022, there were $1.9 million and $1.1 million, respectively, of loans in nonaccrual that were specifically evaluated for individual expected credit loss without an allowance for credit losses.

Credit Quality Indicators

The Company has developed an internal loan grading system to evaluate and quantify the Company’s loan portfolio with respect to quality and risk. The system focuses on, among other things, financial strength of borrowers, experience and depth of borrower’s management, primary and secondary sources of repayment, payment history, nature of the business and outlook on particular industries. The internal grading system enables the Company to monitor the quality of the entire loan portfolio on a consistent basis and provide management with an early warning system, enabling timely recognition and response to problem loans and potential problem loans.

Commercial Grading System

For Commercial and Industrial (“C&I”) and Commercial Real Estate (“CRE”) loans, the Company uses a grading system that relies on quantifiable and measurable characteristics when available. This includes comparison of financial strength to available industry averages, comparison of transaction factors (loan terms and conditions) to loan policy and comparison of credit history to stated repayment terms and industry averages. Some grading factors are necessarily more subjective such as economic and industry factors, regulatory environment and management. C&I and CRE loans are graded Doubtful, Substandard, Special Mention and Pass.

Doubtful

A Doubtful loan has a high probability of total or substantial loss, but because of specific pending events that may strengthen the asset, its classification as a loss is deferred. Doubtful borrowers are usually in default, lack adequate liquidity or capital and lack the resources necessary to remain an operating entity. Pending events can include mergers, acquisitions, liquidations, capital injections, the perfection of liens on additional collateral, the valuation of collateral and refinancing. Generally, pending events should be resolved within a relatively short period and the ratings will be adjusted based on the new information. Nonaccrual treatment is required for Doubtful assets because of the high probability of loss.

Substandard

Substandard loans have a high probability of payment default or they have other well-defined weaknesses. They require more intensive supervision by bank management. Substandard loans are generally characterized by current or expected unprofitable operations, inadequate debt service coverage, inadequate liquidity or marginal capitalization. Repayment may depend on collateral or other credit risk mitigants. For some Substandard loans, the likelihood of full collection of interest and principal may be in doubt and those loans should be placed on nonaccrual. Although Substandard assets in the aggregate will have a distinct potential for loss, an individual asset’s loss potential does not have to be distinct for the asset to be rated Substandard.

Special Mention

Special Mention loans have potential weaknesses that may, if not checked or corrected, weaken the asset or inadequately protect the Company’s position at some future date. These loans pose elevated risk, but their weakness does not yet justify a Substandard classification. Borrowers may be experiencing adverse operating trends (i.e., declining revenues or margins) or may be struggling with an ill-proportioned balance sheet (i.e., increasing inventory without an increase in sales, high leverage, and/or tight liquidity). Adverse economic or market conditions, such as interest rate increases or the entry of a new competitor, may also support a Special Mention rating. Although a Special Mention loan has a higher probability of default than a Pass asset, its default is not imminent.

Pass

Loans graded as Pass encompass all loans not graded as Doubtful, Substandard or Special Mention. Pass loans are in compliance with loan covenants and payments are generally made as agreed. Pass loans range from superior quality to fair quality. Pass loans also include any portion of a government guaranteed loan, including Paycheck Protection Program loans.

Consumer and Residential Grading System

Consumer and Residential loans are graded as either Nonperforming or Performing.

Nonperforming

Nonperforming loans are loans that are (1) over 90 days past due and interest is still accruing or (2) on nonaccrual status.

Performing

All loans not meeting any of the above criteria are considered Performing.

The following tables illustrate the Company’s credit quality by loan class by vintage and, beginning in 2023 with the Company’s January 1, 2023 adoption of ASU 2022-02, also includes gross charge-offs by loan class by vintage for the nine months ended September 30, 2023. Included in other consumer gross charge-offs, the Company recorded $0.2 million in overdrawn deposit accounts reported as 2022 originations and $0.5 million in overdrawn deposit accounts reported as 2023 originations, for the nine months ended September 30, 2023.

(In thousands)	2023			2022			2021			2020			2019			Prior			Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of September 30, 2023
C&I
By internally assigned grade:
Pass	$	171,431		$	302,023		$	257,555		$	164,254		$	83,519		$	75,504		$	351,672	$	2,666	$	1,408,624
Special mention		-			3,110			415			3,494			655			11,151			10,676		-		29,501
Substandard		1,521			8			705			312			2,285			4,317			13,413		14		22,575
Doubtful		-			1			66			58			4			1			-		-		130
Total C&I	$	172,952		$	305,142		$	258,741		$	168,118		$	86,463		$	90,973		$	375,761	$	2,680	$	1,460,830
Current-period gross charge-offs	$	-		$	(1	)	$	(5	)	$	(65	)	$	-		$	(329	)	$	-	$	-	$	(400	)
CRE
By internally assigned grade:
Pass	$	278,517		$	510,690		$	549,056		$	470,616		$	329,634		$	775,502		$	276,477	$	67,162	$	3,257,654
Special mention		3,678			2,236			9,041			8,082			13,915			21,829			8,250		-		67,031
Substandard		384			191			6,887			3,202			3,093			44,750			1,549		14,730		74,786
Total CRE	$	282,579		$	513,117		$	564,984		$	481,900		$	346,642		$	842,081		$	286,276	$	81,892	$	3,399,471
Current-period gross charge-offs	$	-		$	-		$	-		$	-		$	(114	)		-		$	-	$	-	$	(114	)
Auto
By payment activity:
Performing	$	369,178		$	395,362		$	176,026		$	49,917		$	56,455		$	19,979		$	13	$	-	$	1,066,930
Nonperforming		143			812			674			237			192			108			-		-		2,166
Total auto	$	369,321		$	396,174		$	176,700		$	50,154		$	56,647		$	20,087		$	13	$	-	$	1,069,096
Current-period gross charge-offs	$	(75	)	$	(827	)	$	(865	)	$	(283	)	$	(219	)	$	(243	)	$	-	$	-	$	(2,512	)
Residential solar
By payment activity:
Performing	$	155,132		$	438,855		$	182,153		$	67,562		$	48,362		$	41,139		$	-	$	-	$	933,203
Nonperforming		-			594			59			56			72			98			-		-		879
Total residential solar	$	155,132		$	439,449		$	182,212		$	67,618		$	48,434		$	41,237		$	-	$	-	$	934,082
Current-period gross charge-offs	$	(121)		$	(1,244	)	$	(696	)	$	(45	)	$	(447	)	$	(193	)	$	-	$	-	$	(2,746	)
Other consumer
By payment activity:
Performing	$	11,221		$	31,813		$	68,732		$	24,152		$	17,234		$	18,599		$	18,552	$	3	$	190,306
Nonperforming		-			490			742			147			139			347			1		32		1,898
Total other consumer	$	11,221		$	32,303		$	69,474		$	24,299		$	17,373		$	18,946		$	18,553	$	35	$	192,204
Current-period gross charge-offs	$	(561	)	$	(2,788	)	$	(5,742	)	$	(1,099	)	$	(595	)	$	(303	)	$	-	$	-	$	(11,088	)
Residential
By payment activity:
Performing	$	149,700		$	363,044		$	457,105		$	272,533		$	171,854		$	904,002		$	265,049	$	17,497	$	2,600,784
Nonperforming		144			442			1,226			314			462			8,320			-		-		10,908
Total residential	$	149,844		$	363,486		$	458,331		$	272,847		$	172,316		$	912,322		$	265,049	$	17,497	$	2,611,692
Current-period gross charge-offs	$	-		$	-		$	(81	)	$	-		$	-		$	(379	)	$	-	$	-	$	(460	)
Total loans	$	1,141,049		$	2,049,671		$	1,710,442		$	1,064,936		$	727,875		$	1,925,646		$	945,652	$	102,104	$	9,667,375
Current-period gross charge-offs	$	(757	)	$	(4,860	)	$	(7,389	)	$	(1,492	)	$	(1,375	)	$	(1,447	)	$	-	$	-	$	(17,320	)

(In thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2022
C&I
By internally assigned grade:
Pass	$	296,562	$	252,480	$	164,976	$	91,497	$	39,394	$	32,413	$	327,166	$	3,133	$	1,207,621
Special mention		1,044		524		4,531		194		1,108		417		5,234		-		13,052
Substandard		76		459		231		3,098		91		3,969		12,348		163		20,435
Doubtful		-		20		-		28		-		1		-		-		49
Total C&I	$	297,682	$	253,483	$	169,738	$	94,817	$	40,593	$	36,800	$	344,748	$	3,296	$	1,241,157
CRE
By internally assigned grade:
Pass	$	374,313	$	465,990	$	439,012	$	333,568	$	217,141	$	566,783	$	201,563	$	24,735	$	2,623,105
Special mention		605		764		868		2,641		4,649		24,023		850		-		34,400
Substandard		309		-		2,316		3,937		1,822		23,819		713		4,987		37,903
Total CRE	$	375,227	$	466,754	$	442,196	$	340,146	$	223,612	$	614,625	$	203,126	$	29,722	$	2,695,408
Auto
By payment activity:
Performing	$	488,776	$	239,090	$	75,853	$	99,615	$	44,061	$	13,027	$	-	$	-	$	960,422
Nonperforming		590		655		404		385		216		29		-		-		2,279
Total auto	$	489,366	$	239,745	$	76,257	$	100,000	$	44,277	$	13,056	$	-	$	-	$	962,701
Residential solar
By Payment Activity:
Performing	$	485,942	$	193,971	$	74,532	$	54,662	$	36,119	$	11,019	$	-	$	-	$	856,245
Nonperforming		320		98		50		25		16		44		-		-		553
Total residential solar	$	486,262	$	194,069	$	74,582	$	54,687	$	36,135	$	11,063	$	-	$	-	$	856,798
Other consumer
By payment activity:
Performing	$	52,545	$	110,624	$	36,412	$	27,383	$	15,536	$	15,735	$	19,218	$	250	$	277,703
Nonperforming		238		838		395		247		57		87		8		15		1,885
Total other consumer	$	52,783	$	111,462	$	36,807	$	27,630	$	15,593	$	15,822	$	19,226	$	265	$	279,588
Residential
By payment activity:
Performing	$	251,012	$	349,498	$	212,161	$	156,957	$	157,755	$	717,621	$	233,056	$	28,122	$	2,106,182
Nonperforming		267		384		408		555		1,028		5,651		-		20		8,313
Total residential	$	251,279	$	349,882	$	212,569	$	157,512	$	158,783	$	723,272	$	233,056	$	28,142	$	2,114,495
Total loans	$	1,952,599	$	1,615,395	$	1,012,149	$	774,792	$	518,993	$	1,414,638	$	800,156	$	61,425	$	8,150,147

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

The allowance for losses on unfunded commitments totaled $4.8 million as of September 30, 2023, which included $0.8 million of acquisition-related provision for unfunded loan commitments, compared to $5.1 million as of December 31, 2022.

Loan Modifications to Borrowers Experiencing Financial Difficulties

As discussed in Note 3 Recent Accounting Pronouncements, the Company’s January 1, 2023 adoption of ASU 2022-02 eliminates the recognition and measurement of TDRs. Upon adoption of this guidance, the Company no longer recognizes an allowance for credit losses for the economic concession granted to a borrower for changes in the timing and amount of contractual cash flows when a loan is restructured. The adoption of ASU 2022-02 resulted in a change to reporting for loan modifications to borrowers experiencing financial difficulties. With the adoption of ASU 2022-02 these modifications required enhanced reporting on the type of modifications granted and the financial magnitude of the concessions granted.

When the Company modifies a loan with financial difficulty, such modifications generally include one or a combination of the following: an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a change in scheduled payment amount; or principal forgiveness.

The following table shows the amortized cost basis at the end of the reporting period of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted:

	Three Months Ended September 30, 2023
	Interest Rate Reduction					Term Extension					Combination - Term Extension and Interest Rate Reduction
(Dollars in thousands)	Amortized Cost		% of Total Class of Financing Receivables			Amortized Cost		% of Total Class of Financing Receivables			Amortized Cost		% of Total Class of Financing Receivables
Residential	$	31		0.001	%	$	145		0.006	%	$	-		-
Total	$	31				$	145				$	-

	Nine Months Ended September 30, 2023
	Interest Rate Reduction					Term Extension					Combination - Term Extension and Interest Rate Reduction
(Dollars in thousands)	Amortized Cost		% of Total Class of Financing Receivables			Amortized Cost		% of Total Class of Financing Receivables			Amortized Cost		% of Total Class of Financing Receivables
Residential	$	31		0.001	%	$	386		0.015	%	$	165		0.006	%
Total	$	31				$	386				$	165

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulties:

	Three Months Ended September 30, 2023
Loan Type	Term Extension	Interest Rate Reduction
Residential	Added a weighted-average 17 years to the life of loans, which reduced monthly payment amounts for the borrowers.	Interest rates were reduced by an average of one percent

	Nine Months Ended September 30, 2023
Loan Type	Term Extension	Interest Rate Reduction
Residential	Added a weighted-average 15 years to the life of loans, which reduced monthly payment amounts for the borrowers.	Interest rates were reduced by an average of two and a quarter percent

The following table depicts the financing receivables that had a payment default that were modified to borrowers experiencing financial difficulty since the adoption of ASU 2022-02 effective January 1, 2023:

	Three Months Ended September 30, 2023
	Amortized Cost Basis of Modified Financing Receivables that Subsequently Defaulted
(In thousands)	Interest Rate Reduction
Residential		$	31
Total		$	31

	Nine Months Ended September 30, 2023
	Amortized Cost Basis of Modified Financing Receivables that Subsequently Defaulted
(In thousands)	Interest Rate Reduction
Residential		$	31
Total		$	31

The following table depicts the performance of loans that have been modified since the adoption of ASU 2022-02 effective January 1, 2023:

	Payment Status (Amortized Cost Basis)
(In thousands)	Current		31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due
Three Months Ended September 30, 2023
Residential	$	145	$	31	$	-	$	-
Total	$	145	$	31	$	-	$	-

	Payment Status (Amortized Cost Basis)
(In thousands)	Current		31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due
Nine Months Ended September 30, 2023
Residential	$	549	$	31	$	-	$	-
Total	$	549	$	31	$	-	$	-

Troubled Debt Restructuring

Prior to the adoption of ASU 2022-02 on January 1, 2023, the Company accounted for loan modifications to borrowers experiencing financial difficulty when concessions were granted as TDRs. The following tables are disclosures related to TDRs in prior periods.

The following table illustrates the recorded investments and number of modifications designated as TDRs, including the recorded investment in the loans prior to a modification and the recorded investment in the loans after restructuring:

	Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
(Dollars in thousands)	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Residential		6	$	613	$	682		10	$	829	$	928
Total TDRs		6	$	613	$	682		10	$	829	$	928

The following table illustrates the recorded investment and number of modifications for TDRs where a concession has been made and subsequently defaulted during the period:

	Three Months Ended September 30, 2022				Nine Months Ended September 30, 2022
(Dollars in thousands)	Number of Contracts		Recorded Investment		Number of Contracts		Recorded Investment
Commercial loans:
C&I		1	$	320		1	$	320
Total commercial loans		1	$	320		1	$	320
Consumer loans:
Auto		-	$	-		1	$	11
Total consumer loans		-	$	-		1	$	11
Residential		18	$	869		44	$	2,320
Total TDRs		19	$	1,189		46	$	2,651

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Defined Benefit Post-Retirement Plans

9 Months Ended

Sep. 30, 2023

Defined Benefit Post-Retirement Plans [Abstract]

Defined Benefit Post-Retirement Plans

7. Defined Benefit Post-Retirement Plans

The Company has a qualified, noncontributory, defined benefit pension plan (the “Plan”) covering substantially all of its employees at September 30, 2023. Benefits paid from the Plan are based on age, years of service, compensation and social security benefits and are determined in accordance with defined formulas. The Company’s policy is to fund the Plan in accordance with Employee Retirement Income Security Act of 1974 standards. Assets of the Plan are invested in publicly traded stocks, bonds and mutual funds. In addition to the Plan, the Company provides supplemental employee retirement plans to certain current and former executives. The Company also assumed supplemental retirement plans for former executives of Alliance Financial Corporation (“Alliance”) when the Company acquired Alliance. These supplemental employee retirement plans and the Plan are collectively referred to herein as “Pension Benefits.”

In addition, the Company provides certain health care benefits for retired employees. Benefits were accrued over the employees’ active service period. Only employees that were employed by the Company on or before January 1, 2000 are eligible to receive post-retirement health care benefits. In addition, the Company assumed post-retirement medical life insurance benefits for certain Alliance employees, retirees and their spouses, if applicable, in the Alliance acquisition. These post-retirement benefits are referred to herein as “Other Benefits.”

Accounting standards require an employer to: (1) recognize the overfunded or underfunded status of defined benefit post-retirement plans, which is measured as the difference between plan assets at fair value and the benefit obligation, as an asset or liability in its balance sheet; (2) recognize changes in that funded status in the year in which the changes occur through comprehensive income; and (3) measure the defined benefit plan assets and obligations as of the date of its year-end balance sheet.

The Company made no voluntary contributions to the pension and other benefits plans during the three and nine months ended September 30, 2023 and 2022.

The components of expense for Pension Benefits and Other Benefits are set forth below:

	Pension Benefits						Other Benefits
	Three Months Ended September 30,						Three Months Ended September 30,
(In thousands)	2023			2022			2023			2022
Components of net periodic cost (benefit):
Service cost	$	476		$	506		$	1		$	2
Interest cost		999			690			56			42
Expected return on plan assets		(1,844	)		(2,220	)		-			-
Net amortization		669			183			(21	)		2
Total net periodic cost (benefit)	$	300		$	(841	)	$	36		$	46

	Pension Benefits						Other Benefits
	Nine Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2023			2022			2023			2022
Components of net periodic cost (benefit):
Service cost	$	1,440		$	1,574		$	3		$	6
Interest cost		3,019			2,078			168			124
Expected return on plan assets		(5,550	)		(6,676	)		-			-
Net amortization		2,009			553			(63	)		4
Total net periodic cost (benefit)	$	918		$	(2,471	)	$	108		$	134

The service cost component of the net periodic cost (benefit) is included in Salaries and Employee Benefits and the interest cost, expected return on plan assets and net amortization components are included in Other Noninterest Expense on the unaudited interim consolidated statements of income.

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Earnings Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share

8. Earnings Per Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity (such as the Company’s dilutive stock options and restricted stock units).

The following is a reconciliation of basic and diluted EPS and the anti-dilutive stock options and restricted stock outstanding for the periods presented in the unaudited interim consolidated statements of income:

	Three Months Ended September 30,
(In thousands, except per share data)	2023		2022
Basic EPS:
Weighted average common shares outstanding		45,163		42,838
Net income available to common stockholders	$	24,606	$	38,973
Basic EPS	$	0.54	$	0.91
Diluted EPS:
Weighted average common shares outstanding		45,163		42,838
Dilutive effect of common stock options and restricted stock		236		273
Weighted average common shares and common share equivalents		45,399		43,111
Net income available to common stockholders	$	24,606	$	38,973
Diluted EPS	$	0.54	$	0.90
Anti-dilutive stock options and restricted stock outstanding		27		2

	Nine Months Ended September 30,
(In thousands, except per share data)	2023		2022
Basic EPS:
Weighted average common shares outstanding		43,662		42,940
Net income available to common stockholders	$	88,336	$	115,874
Basic EPS	$	2.02	$	2.70
Diluted EPS:
Weighted average common shares outstanding		43,662		42,940
Dilutive effect of common stock options and restricted stock		234		254
Weighted average common shares and common share equivalents		43,896		43,194
Net income available to common stockholders	$	88,336	$	115,874
Diluted EPS	$	2.01	$	2.68
Anti-dilutive stock options and restricted stock outstanding		25		2

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Reclassification Adjustments Out of Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2023

Reclassification Adjustments Out of Other Comprehensive Income (Loss) [Abstract]

Reclassification Adjustments Out of Other Comprehensive Income (Loss)

9. Reclassification Adjustments Out of Other Comprehensive Income (Loss)

The following table summarizes the reclassification adjustments out of AOCI:

Detail About AOCI Components	Amount Reclassified from AOCI						Affected Line Item in the Consolidated Statements of Comprehensive Income (Loss)
	Three Months Ended
(In thousands)	September 30, 2023			September 30, 2022
AFS securities:
Amortization of unrealized gains related to securities transfer	$	105		$	125		Interest income
Tax effect	$	(26	)	$	(31	)	Income tax (benefit)
Net of tax	$	79		$	94
Pension and other benefits:
Amortization of net losses	$	638		$	156		Other noninterest expense
Amortization of prior service costs		10			29		Other noninterest expense
Tax effect	$	(162	)	$	(47	)	Income tax (benefit)
Net of tax	$	486		$	138
Total reclassifications, net of tax	$	565		$	232

Detail About AOCI Components	Amount Reclassified from AOCI						Affected Line item in the Consolidated Statements of  Comprehensive Income (Loss)
	Nine Months Ended
(In thousands)	September 30, 2023			September 30, 2022
AFS securities:
Losses on AFS securities	$	9,450		$	-		Net securities (gains) losses
Amortization of unrealized gains related to securities transfer		328			393		Interest income
Tax effect	$	(2,445	)	$	(98	)	Income tax (benefit)
Net of tax	$	7,333		$	295
Pension and other benefits:
Amortization of net losses	$	1,918		$	470		Other noninterest expense
Amortization of prior service costs		28			87		Other noninterest expense
Tax effect	$	(487	)	$	(140	)	Income tax (benefit)
Net of tax	$	1,459		$	417
Total reclassifications, net of tax	$	8,792		$	712

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Derivative Instruments and Hedging Activities

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities [Abstract]

Derivative Instruments and Hedging Activities

10. Derivative Instruments and Hedging Activities

The Company is exposed to certain risks 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, primarily by managing the amount, sources and duration of its assets and liabilities and through the use of derivative instruments. Specifically, the Company may enter 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. Generally, the Company may use derivative financial instruments to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments. Currently, the Company has interest rate derivatives that result from a service provided to certain qualifying customers and, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. The Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions.

Derivatives Not Designated as Hedging Instruments

The Company enters into interest rate swaps to facilitate customer transactions and meet their financing needs. These swaps are considered derivatives, but are not designated in hedging relationships. These instruments have interest rate and credit risk associated with them. To mitigate the interest rate risk, the Company enters into offsetting interest rate swaps with counterparties. The counterparty swaps are also considered derivatives and are also not designated in hedging relationships. Interest rate swaps are recorded within other assets or other liabilities on the consolidated balance sheet at their estimated fair value. Changes to the fair value of assets and liabilities arising from these derivatives are included, net, in other operating income in the consolidated statements of income.

The Company is subject to over-the-counter derivative clearing requirements, which require certain derivatives to be cleared through central clearing houses. Accordingly, the Company clears certain derivative transactions through the Chicago Mercantile Exchange Clearing House (“CME”). The CME requires the Company to post initial and variation margin payments to mitigate the risk of non-payment, the latter of which is received or paid daily based on the net asset or liability position of the contracts. A daily settlement occurs through the CME for changes in the fair value of centrally cleared derivatives. Not all of the derivatives are required to be cleared through the daily clearing agent. As a result, the total fair values of loan level derivative assets and liabilities recognized on the Company’s financial statements are not equal and offsetting.

In 2017, the U.K. Financial Conduct Authority announced its intention to stop compelling banks to submit rates for the calculation of London Interbank Offered Rate (“LIBOR”) after 2021. In 2022, the Federal Reserve adopted a final rule implementing the Adjustable Interest Rate (LIBOR) Act by identifying benchmark rates based on the Secured Overnight Financing Rate (“SOFR”) that replaced LIBOR in certain financial contracts after June 30, 2023. As of September 30, 2023, the Company has transitioned all of its financial instruments to an alternative benchmark rate.

As of September 30, 2023 and December 31, 2022, the Company had twelve and fifteen risk participation agreements, respectively, with financial institution counterparties for interest rate swaps related to participated loans. Risk participation agreements provide credit protection to the financial institution that originated the swap transaction should the borrower fail to perform on its obligation. The Company enters into both risk participation agreements in which it purchases credit protection from other financial institutions and those in which it provides credit protection to other financial institutions.

The following table summarizes the derivatives outstanding:

(In thousands)	Notional Amount		Balance Sheet Location	Fair Value		Notional Amount		Balance Sheet Location	Fair Value
As of September 30, 2023
Derivatives not designated as hedging instruments
Interest rate derivatives	$	1,304,523	Other assets	$	143,716	$	1,304,523	Other liabilities	$	143,596
Risk participation agreements		62,467	Other assets		7		16,716	Other liabilities		3
Total derivatives not designated as hedging instruments				$	143,723				$	143,599
Netting adjustments(1)					30,583					-
Net derivatives in the balance sheet				$	113,140				$	143,599
Derivatives not offset on the balance sheet				$	143				$	143
Cash collateral(2)					-					-
Net derivative amounts				$	112,997				$	143,456
As of December 31, 2022
Derivatives not designated as hedging instruments
Interest rate derivatives	$	1,275,708	Other assets	$	117,247	$	1,275,708	Other liabilities	$	117,247
Risk participation agreements		88,963	Other assets		47		18,421	Other liabilities		10
Total derivatives not designated as hedging instruments				$	117,294				$	117,257
Netting adjustments(1)					24,109					-
Net derivatives in the balance sheet				$	93,185				$	117,257
Derivatives not offset on the balance sheet				$	352				$	352
Cash collateral(2)					-					-
Net derivative amounts				$	92,833				$	116,905

(1) Netting adjustments represents the amounts recorded to convert derivatives assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance on the settle to market rules for cleared derivatives. The CME legally characterizes the variation margin posted between counterparties as settlements of the outstanding derivative contracts instead of cash collateral.

(2) Cash collateral represents the amount that cannot be used to offset our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The other collateral consists of securities and is exchanged under bilateral collateral and master netting agreements that allow us to offset the net derivative position with the related collateral. The application of the other collateral cannot reduce the net derivative position below zero. Therefore, excess other collateral, if any, is not reflected above.

The following table indicates the gain or loss recognized in income on derivatives not designated as a hedging relationship:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2023			2022			2023			2022
Derivatives not designated as hedging instruments:
(Decrease) in other income	$	(65	)	$	(33	)	$	(65	)	$	(152	)

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Fair Value Measurements and Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2023

Fair Value Measurements and Fair Value of Financial Instruments [Abstract]

Fair Value Measurements and Fair Value of Financial Instruments

11. Fair Value Measurements and Fair Value of Financial Instruments

GAAP states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value measurements are not adjusted for transaction costs. A fair value hierarchy exists within GAAP that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The types of instruments valued based on quoted market prices in active markets include most U.S. government and agency securities, many other sovereign government obligations, liquid mortgage products, active listed equities and most money market securities. Such instruments are generally classified within Level 1 or Level 2 of the fair value hierarchy. The Company does not adjust the quoted prices for such instruments.

The types of instruments valued based on quoted prices in markets that are not active, broker or dealer quotations or quote from alternative pricing sources with reasonable levels of price transparency include most investment-grade and high-yield corporate bonds, less liquid mortgage products, less liquid agency securities, less liquid listed equities, state, municipal and provincial obligations and certain physical commodities. Such instruments are generally classified within Level 2 of the fair value hierarchy. Certain common equity securities are reported at fair value utilizing Level 1 inputs (exchange quoted prices). Other investment securities are reported at fair value utilizing Level 1 and Level 2 inputs. The prices for Level 2 instruments are obtained through an independent pricing service or dealer market participants with whom the Company has historically transacted both purchases and sales of investment securities. Prices obtained from these sources include prices derived from market quotations and matrix pricing. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. Management reviews the methodologies used by its third-party providers in pricing the securities.

Level 3 is for positions that are not traded in active markets or are subject to transfer restrictions. Valuations are adjusted to reflect illiquidity and/or non-transferability and such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate will be used. Management’s best estimate consists of both internal and external support on certain Level 3 investments. Subsequent to inception, management only changes Level 3 inputs and assumptions when corroborated by evidence such as transactions in similar instruments, completed or pending third-party transactions in the underlying investment or comparable entities, subsequent rounds of financing, recapitalizations and other transactions across the capital structure, offerings in the equity or debt markets and changes in financial ratios or cash flows.

The following tables set forth the Company’s financial assets and liabilities measured on a recurring basis that were accounted for at fair value. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

(In thousands)	Level 1		Level 2		Level 3		September 30, 2023
Assets:
AFS securities
U.S. treasury	$	121,595	$	-	$	-	$	121,595
Federal agency		-		203,756		-		203,756
State & municipal		-		83,285		-		83,285
Mortgage-backed		-		415,768		-		415,768
Collateralized mortgage obligations		-		533,411		-		533,411
Corporate		-		41,217		-		41,217
Total AFS securities	$	121,595	$	1,277,437	$	-	$	1,399,032
Equity securities		34,600		1,000		-		35,600
Derivatives		-		113,140		-		113,140
Total	$	156,195	$	1,391,577	$	-	$	1,547,772
Liabilities:
Derivatives	$	-	$	143,599	$	-	$	143,599
Total	$	-	$	143,599	$	-	$	143,599

(In thousands)	Level 1		Level 2		Level 3		December 31, 2022
Assets:
AFS securities
U.S. treasury	$	121,658	$	-	$	-	$	121,658
Federal agency		-		206,419		-		206,419
State & municipal		-		82,851		-		82,851
Mortgage-backed		-		473,694		-		473,694
Collateralized mortgage obligations		-		588,363		-		588,363
Corporate		-		54,240		-		54,240
Total AFS securities	$	121,658	$	1,405,567	$	-	$	1,527,225
Equity securities		29,784		1,000		-		30,784
Derivatives		-		93,185		-		93,185
Total	$	151,442	$	1,499,752	$	-	$	1,651,194
Liabilities:
Derivatives	$	-	$	117,257	$	-	$	117,257
Total	$	-	$	117,257	$	-	$	117,257

GAAP requires disclosure of assets and liabilities measured and recorded at fair value on a non-recurring basis such as goodwill, loans held for sale, other real estate owned, collateral-dependent loans individually evaluated for expected credit losses and HTM securities. The non-recurring fair value measurements recorded during the nine month period ended September 30, 2023 and the year ended December 31, 2022 were related to loans individually evaluated for expected credit losses with fair value of $1.9 million and $1.1 million as of September 30, 2023 and December 31, 2022, respectively. The Company uses the fair value of underlying collateral, less costs to sell, to estimate the allowance for credit losses for individually evaluated collateral dependent loans. The appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses ranging from 10% to 50%. Based on the valuation techniques used, the fair value measurements for collateral dependent individually evaluated loans are classified as Level 3.

The following table sets forth information with regard to estimated fair values of financial instruments. This table excludes financial instruments for which the carrying amount approximates fair value. Financial instruments for which the fair value approximates carrying value include cash and cash equivalents, AFS securities, equity securities, accrued interest receivable, non-maturity deposits, short-term borrowings, accrued interest payable and derivatives.

			September 30, 2023				December 31, 2022
(In thousands)	Fair Value Hierarchy		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets:
HTM securities		2	$	914,520	$	783,986	$	919,517	$	812,647
Net loans		3		9,556,887		9,097,545		8,049,909		7,840,350
Financial liabilities:
Time deposits		2	$	1,344,199	$	1,301,989	$	433,772	$	413,868
Long-term debt		2		29,834		29,114		4,815		4,539
Subordinated debt		1		120,061		110,057		98,000		92,883
Junior subordinated debt		2		101,196		99,259		101,196		98,372

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For example, the Company has a substantial wealth operation that contributes net fee income annually. The wealth management operation is not considered a financial instrument and its value has not been incorporated into the fair value estimates. Other significant assets and liabilities include the benefits resulting from the low-cost funding of deposit liabilities as compared to the cost of borrowing funds in the market and premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimate of fair value.

HTM Securities

The fair value of the Company’s HTM securities is primarily measured using information from a third-party pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things.

Net Loans

Net loans include portfolio loans and loans held for sale. Loans were first segregated by type and then further segmented into fixed and variable rate and loan quality categories. Expected future cash flows were projected based on contractual cash flows, adjusted for estimated prepayments, and those expected future cash flows also includes credit risk, illiquidity risk and other market factors to calculate the exit price fair value in accordance with ASC 820.

Time Deposits

The fair value of time deposits was estimated using a discounted cash flow approach that applies prevailing market interest rates for similar maturity instruments. The fair values of the Company’s time deposit liabilities do not take into consideration the value of the Company’s long-term relationships with depositors, which may have significant value.

Long-Term Debt

The fair value of long-term debt was estimated using a discounted cash flow approach that applies prevailing market interest rates for similar maturity instruments.

Subordinated Debt

The fair value of subordinated debt has been measured using the observable market price as of the period reported.

Junior Subordinated Debt

The fair value of junior subordinated debt has been estimated using a discounted cash flow analysis.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies [Abstract]

Commitments and Contingencies

12. Commitments and Contingencies

The Company is a party to certain financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, unused lines of credit, standby letters of credit and certain agricultural real estate loans sold to investors with recourse, with the sold portion having a government guarantee that is assignable back to the Company upon repurchase of the loan in the event of default. The Company’s exposure to credit loss in the event of nonperformance by the other party to the commitments to extend credit, unused lines of credit, standby letters of credit and loans sold with recourse is represented by the contractual amount of those investments. The credit risk associated with commitments to extend credit and standby and commercial letters of credit is essentially the same as that involved with extending loans to customers and is subject to normal credit policies. Collateral may be obtained based on management’s assessment of the customer’s creditworthiness. Commitments to extend credit and unused lines of credit totaled $2.71 billion at September 30, 2023 and $2.42 billion at December 31, 2022.

Since many loan commitments, standby letters of credit and guarantees and indemnification contracts expire without being funded in whole or in part, the contract amounts are not necessarily indicative of future cash flows. The Company does not issue any guarantees that would require liability-recognition or disclosure, other than its standby letters of credit.

The Company guarantees the obligations or performance of customers by issuing standby letters of credit to third-parties. These standby letters of credit are generally issued in support of third-party debt, such as corporate debt issuances, industrial revenue bonds and municipal securities. The risk involved in issuing standby letters of credit is essentially the same as the credit risk involved in extending loan facilities to customers and letters of credit are subject to the same credit origination, portfolio maintenance and management procedures in effect to monitor other credit and off-balance sheet products. Typically, these instruments have one year expirations with an option to renew upon annual review; therefore, the total amounts do not necessarily represent future cash requirements. Standby letters of credit totaled $40.5 million at September 30, 2023 and $53.3 million at December 31, 2022. As of September 30, 2023 and December 31, 2022, the fair value of the Company’s standby letters of credit was not significant.

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

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Description of Business (Policies)

9 Months Ended

Sep. 30, 2023

Description of Business [Abstract]

Nature of Operations

NBT Bancorp Inc. is a registered financial holding company incorporated in the state of Delaware in 1986, with its principal headquarters located in Norwich, New York. The principal assets of NBT Bancorp Inc. consist of all of the outstanding shares of common stock of its subsidiaries, including: NBT Bank, National Association (the “Bank”), NBT Financial Services, Inc. (“NBT Financial”), NBT Holdings, Inc. (“NBT Holdings”), CNBF Capital Trust I, NBT Statutory Trust I, NBT Statutory Trust II, Alliance Financial Capital Trust I and Alliance Financial Capital Trust II. The principal sources of revenue for NBT Bancorp Inc. are the management fees and dividends it receives from the Bank, NBT Financial and NBT Holdings. Collectively, NBT Bancorp Inc. and its subsidiaries are referred to herein as (the “Company”).

The Company’s business, primarily conducted through the Bank, consists of providing commercial banking, retail banking and wealth management services primarily to customers in its market area, which includes upstate New York, northeastern Pennsylvania, southern New Hampshire, western Massachusetts, Vermont, southern Maine and central and northwestern Connecticut. The Company has been, and intends to continue to be, a community-oriented financial institution offering a variety of financial services. The Company’s business philosophy is to operate as a community bank with local decision-making, providing a broad array of banking and financial services to retail, commercial and municipal customers.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited interim consolidated financial statements include the accounts of NBT Bancorp Inc. and its wholly-owned subsidiaries: the Bank, NBT Financial and NBT Holdings. In the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and in accordance with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, the consolidated financial statements do not include all of the information and notes necessary for complete financial statements in conformity with GAAP. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2022 Annual Report on Form 10-K. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. All material intercompany transactions have been eliminated in consolidation. Amounts previously reported in the consolidated financial statements are reclassified whenever necessary to conform to current period presentation. The Company has evaluated subsequent events for potential recognition and/or disclosure and there were none identified.

Use of Estimates in the Preparation of Financial Statements

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results may differ from those estimates and such differences could be material to the financial statements.

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Recent Accounting Pronouncements (Policies)

9 Months Ended

Sep. 30, 2023

Recent Accounting Pronouncements [Abstract]

Recently Adopted Accounting Standards and Accounting Standards Issued Not Yet Adopted

Recently Adopted Accounting Standards

In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) 2022-02, Financial Instruments - CECL Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”). The ASU eliminates the guidance on Troubled Debt Restructurings (“TDRs”) and requires an evaluation on all loan modifications to determine if they result in a new loan or a continuation of the existing loan. The ASU also requires that entities disclose current-period gross charge-offs by year of origination. The elimination of the TDR guidance may be adopted prospectively for loan modifications after adoption or on a modified retrospective basis, which would also apply to loans previously modified, resulting in a cumulative effect adjustment to retained earnings in the period of adoption for changes in the allowance for credit losses. The amendments in this ASU were effective for the Company on January 1, 2023, with early adoption permitted. The Company adopted ASU 2022-02 on January 1, 2023 (“Day 1”) using the modified retrospective method and recorded a net increase to retained earnings of $0.5 million. The transition adjustment includes a $0.6 million impact to the allowance for credit losses on loans and a $0.1 million impact to the deferred tax asset.

Accounting Standards Issued Not Yet Adopted

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements, which amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification. The ASU was issued in response to the SEC’s August 2018 final rule that updated and simplified disclosure requirements that the SEC believed were redundant, duplicative, overlapping, outdated, or superseded. The new guidance is intended to align GAAP requirements with those of the SEC. The ASU will become effective on the earlier of the date on which the SEC removes its disclosure requirements for the related disclosure or June 30, 2027. Early adoption is not permitted. The adoption is not expected to have a material impact on the consolidated financial statements.

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Securities (Policies)

9 Months Ended

Sep. 30, 2023

Securities [Abstract]

Investment, Policy

The Company does not believe the AFS securities that were in an unrealized loss position as of September 30, 2023 and December 31, 2022, which consisted of 412 and 415 individual securities, respectively, represented a credit loss impairment. AFS debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. As of September 30, 2023 and December 31, 2022, the majority of the AFS securities in an unrealized loss position consisted of debt securities issued by U.S. government agencies or U.S. government-sponsored enterprises that carry the explicit and/or implicit guarantee of the U.S. government, which are widely recognized as “risk- free” and have a long history of zero credit losses. Total gross unrealized losses were primarily attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. The Company does not intend to sell, nor is it more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, which may be at maturity. The Company elected to exclude accrued interest receivable (“AIR”) from the amortized cost basis of debt securities. AIR on AFS debt securities totaled $3.9 million at September 30, 2023 and $4.2 million at December 31, 2022 and is excluded from the estimate of credit losses and reported in the other assets financial statement line.

None of the Bank’s HTM debt securities were past due or on nonaccrual status as of September 30, 2023 and December 31, 2022. There was no accrued interest reversed against interest income for the three and nine months ended September 30, 2023 or the year ended December 31, 2022 as all securities remained on accrual status. In addition, there were no collateral-dependent HTM debt securities as of September 30, 2023 and December 31, 2022. As of September 30, 2023 and December 31, 2022, 66% and 70%, respectively, of the Company’s HTM debt securities were issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government, which are widely recognized as “risk-free,” and have a long history of zero credit losses. Therefore, the Company did not record an allowance for credit losses for these securities as of September 30, 2023 and December 31, 2022. The remaining HTM debt securities at September 30, 2023 and December 31, 2022 were comprised of state and municipal obligations with bond ratings of A to AAA. Utilizing the Current Expected Credit Losses (“CECL”) approach, the Company determined that the expected credit loss on its HTM municipal bond portfolio was immaterial and therefore no allowance for credit loss was recorded as of September 30, 2023 and December 31, 2022. AIR on HTM debt securities totaled $3.8 million at September 30, 2023 and December 31, 2022 and is excluded from the estimate of credit losses and reported in the other assets financial statement line.

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Allowance for Credit Losses and Credit Quality of Loans (Policies)

9 Months Ended

Sep. 30, 2023

Allowance for Credit Losses and Credit Quality of Loans [Abstract]

Allowance for Credit Losses

As described in Note 3 Recent Accounting Pronouncements, the Company’s adoption of ASU 2022-02 resulted in an insignificant change to its methodology for estimating the allowance for credit losses on TDRs. The Day 1 decrease in allowance for credit loss on TDR loans relating to adoption of ASU 2022-02 was $0.6 million.

The allowance for credit losses totaled $114.6 million at September 30, 2023, compared to $100.8 million at December 31, 2022. The allowance for credit losses as a percentage of loans was 1.19% at September 30, 2023, compared to 1.24% at December 31, 2022.

During the first quarter of 2023, the Company made adjustments to the class segments within the portfolios to better align risk characteristics and reflect the monitoring and assessment of risks as the portfolios continue to evolve. Paycheck Protection Program was consolidated with Commercial & Industrial, as the portfolio had decreased to less than $1 million and no longer warranted a material class segment. The Other Consumer class segment was further separated into Residential Solar and Other Consumer. The growth in our Residential Solar loans warranted evaluation of this class separately from the Other Consumer class segments. The change to the class segments was applied retrospectively and did not have a significant impact on the allowance for loan losses. The following table illustrates the portfolio and class segments for the Company’s loan portfolio:

Portfolio Segment	Class
Commercial Loans	Commercial & Industrial
	Commercial Real Estate
Consumer Loans	Auto
	Residential Solar
	Other Consumer
Residential Loans

The allowance for credit losses calculation incorporated a 6-quarter forecast period to account for forecast economic conditions under each scenario utilized in the measurement. For periods beyond the 6-quarter forecast, the model reverts to long-term economic conditions over a 4-quarter reversion period on a straight-line basis. The Company considers a baseline, upside and downside economic forecast in measuring the allowance.

The quantitative model as of September 30, 2023 incorporated a baseline economic outlook along with an alternative downside scenario sourced from a reputable third-party to accommodate other potential economic conditions in the model, particularly significant unknowns relating to downside risks as of the measurement date. The baseline outlook projected a relatively low unemployment rate of 3.7%, rising modestly to 4.13% by the end of the forecast period. Northeast GDP’s annualized growth (on a quarterly basis) was expected to start the fourth quarter of 2023 at 3.5%, decreasing slightly to 2.9%, and then increasing to 3.8% by the end of the forecast period. Other utilized economic variables remained stable overall, with outlooks for annualized growth in retail sales improving, business output slightly deteriorating, and housing starts staying relatively unchanged. Key assumptions in the baseline economic outlook include the economy being at full employment in the coming quarters, recent bank failures not being symptomatic of broader issues in the financial system, and the reduction in the Federal Reserve’s balance sheet remaining on autopilot. The alternative downside scenario assumes deteriorated economic conditions from the baseline outlook. Under this scenario, northeast unemployment increases to 5.1% in the fourth quarter of 2023 and rises to a peak of 6.9% in the fourth quarter of 2024. These scenarios and their respective weightings are evaluated at each measurement date and reflect management’s expectations as of September 30, 2023. At September 30, 2023, the weightings were 70%, 0%, and 30% for the baseline, upside and downside economic forecasts, respectively. Qualitative adjustments were made for isolated model limitations related to modeled inputs given abnormally high historical retail sales and business output growth rates in prior quarters along with low unemployment. Additionally, a qualitative adjustment for inflation is applied to adjust for potential model limitations arising from the use of a macroeconomic variable denominated in nominal dollar terms as well as a qualitative adjustment for potential weakness in auto and commercial real estate collateral values. These factors were considered through separate quantitative processes and incorporated into the estimate of current expected credit losses at September 30, 2023.

The quantitative model as of June 30, 2023 incorporated a baseline economic outlook along with an alternative downside scenario sourced from a reputable third-party to accommodate other potential economic conditions in the model, particularly significant unknowns relating to downside risks as of the measurement date. The baseline outlook reflected an unemployment rate environment at pre-coronavirus (“COVID-19”) pandemic levels of 3.8% and increasing gradually to 4.2% by the end of the forecast period. Northeast GDP’s annualized growth (on a quarterly basis) was expected to start the third quarter of 2023 at about 3.6% and reach 4.1% by the end of the forecast period. Other utilized economic variables worsened overall, with outlooks for annualized growth in retail sales and business output declining from the prior quarter and housing starts staying relatively unchanged. Key assumptions in the baseline economic outlook include the economy being at full employment in the coming quarters, recent bank failures not being symptomatic of broader issues in the financial system, and the reduction in the Federal Reserve’s balance sheet remaining on autopilot. The alternative downside scenario assumes deteriorated economic conditions from the baseline outlook. Under this scenario, northeast unemployment increases to 5.2% in the third quarter of 2023 and rises to a peak of 7.0% in the third quarter of 2024. These scenarios and their respective weightings are evaluated at each measurement date and reflect management’s expectations as of June 30, 2023. At June 30, 2023, the weightings were 60%, 0% and 40% for the baseline, upside and downside economic forecasts, respectively. Qualitative adjustments were made for isolated model limitations related to modeled inputs given abnormally high retail sales and business output growth rates in prior quarters along with low unemployment. Additionally, a qualitative adjustment for inflation is applied to adjust for potential model limitations arising from the use of a macroeconomic variable denominated in nominal dollar terms as well as a qualitative adjustment for potential weakness in auto collateral values. These factors were considered through separate quantitative processes and incorporated into the estimate of current expected credit losses at June 30, 2023.

The quantitative model as of December 31, 2022 incorporated a baseline economic outlook along with an alternative downside scenario sourced from a reputable third-party to accommodate other potential economic conditions in the model. At December 31, 2022, the weightings were 50%, 0% and 50% for the baseline, upside and downside economic forecasts, respectively. The baseline outlook reflected an unemployment rate environment initially around pre-COVID-19 levels at 3.9% that increases slightly during the forecast period to 4.0%. Northeast GDP’s annualized growth (on a quarterly basis) was expected to start the first quarter of 2023 at approximately 3.9% and hovering around 4.6% by the end of the forecast period. Other utilized economic variables have generally deteriorated in their respective forecasts, with retail sales and housing starts forecasts declining from the prior year. Key assumptions in the baseline economic outlook included a full employment economy being realized in the near future, continued tapering of the Federal Reserve balance sheet, an increasing yield on ten-year treasury securities, and a gradual decline in global oil prices. The alternative downside scenario assumed deteriorated economic and pandemic related conditions from the baseline outlook. Under this scenario, northeast unemployment rises from 3.9% in the fourth quarter of 2022 to a peak of 6.9% in the first quarter of 2024. These scenarios and their respective weightings are evaluated at each measurement date and reflect management’s expectations as of December 31, 2022. Additional adjustments were made for factors not incorporated in the forecasts or the model, such as loss rate expectations for certain loan pools, considerations for inflation, and recent trends in asset value indices. Additional monitoring for industry concentrations, loan growth, and policy exceptions was also conducted. All these factors were considered through separate quantitative processes and incorporated when applicable into the estimate of current expected credit losses at December 31, 2022.

There were $219.5 million of PCD loans acquired from Salisbury during the three and nine months ended September 30, 2023 which resulted in an allowance for credit losses at acquisition of $5.8 million. There were no loans purchased with credit deterioration during the year ended December 31, 2022. During 2023, the Company purchased $2.4 million of residential loans at a 7.01% premium with a $17 thousand allowance for credit losses recorded for these loans. During 2022, the Company purchased $11.5 million of residential loans at a 1.53% premium and $50.1 million in consumer loans at par with an allowance for credit losses recorded on the purchase date of $3.2 million.

The Company made a policy election to report AIR in the other assets line item on the balance sheet. AIR on loans totaled $32.5 million at September 30, 2023 and $25.0 million at December 31, 2022 and there was no estimated allowance for credit losses related to AIR as of September 30, 2023 and December 31, 2022.

Individually Evaluated Loans

As of September 30, 2023, there was one relationship identified to be evaluated for loss on an individual basis which had an amortized cost basis of $1.9 million, with no allowance for credit loss. As of December 31, 2022, two different relationships were identified to be evaluated for loss on an individual basis, which in aggregate, had an amortized cost basis of $2.4 million, with no allowance for credit loss.

Credit Quality Indicators

The Company has developed an internal loan grading system to evaluate and quantify the Company’s loan portfolio with respect to quality and risk. The system focuses on, among other things, financial strength of borrowers, experience and depth of borrower’s management, primary and secondary sources of repayment, payment history, nature of the business and outlook on particular industries. The internal grading system enables the Company to monitor the quality of the entire loan portfolio on a consistent basis and provide management with an early warning system, enabling timely recognition and response to problem loans and potential problem loans.

Commercial Grading System

For Commercial and Industrial (“C&I”) and Commercial Real Estate (“CRE”) loans, the Company uses a grading system that relies on quantifiable and measurable characteristics when available. This includes comparison of financial strength to available industry averages, comparison of transaction factors (loan terms and conditions) to loan policy and comparison of credit history to stated repayment terms and industry averages. Some grading factors are necessarily more subjective such as economic and industry factors, regulatory environment and management. C&I and CRE loans are graded Doubtful, Substandard, Special Mention and Pass.

Doubtful

A Doubtful loan has a high probability of total or substantial loss, but because of specific pending events that may strengthen the asset, its classification as a loss is deferred. Doubtful borrowers are usually in default, lack adequate liquidity or capital and lack the resources necessary to remain an operating entity. Pending events can include mergers, acquisitions, liquidations, capital injections, the perfection of liens on additional collateral, the valuation of collateral and refinancing. Generally, pending events should be resolved within a relatively short period and the ratings will be adjusted based on the new information. Nonaccrual treatment is required for Doubtful assets because of the high probability of loss.

Substandard

Substandard loans have a high probability of payment default or they have other well-defined weaknesses. They require more intensive supervision by bank management. Substandard loans are generally characterized by current or expected unprofitable operations, inadequate debt service coverage, inadequate liquidity or marginal capitalization. Repayment may depend on collateral or other credit risk mitigants. For some Substandard loans, the likelihood of full collection of interest and principal may be in doubt and those loans should be placed on nonaccrual. Although Substandard assets in the aggregate will have a distinct potential for loss, an individual asset’s loss potential does not have to be distinct for the asset to be rated Substandard.

Special Mention

Special Mention loans have potential weaknesses that may, if not checked or corrected, weaken the asset or inadequately protect the Company’s position at some future date. These loans pose elevated risk, but their weakness does not yet justify a Substandard classification. Borrowers may be experiencing adverse operating trends (i.e., declining revenues or margins) or may be struggling with an ill-proportioned balance sheet (i.e., increasing inventory without an increase in sales, high leverage, and/or tight liquidity). Adverse economic or market conditions, such as interest rate increases or the entry of a new competitor, may also support a Special Mention rating. Although a Special Mention loan has a higher probability of default than a Pass asset, its default is not imminent.

Pass

Loans graded as Pass encompass all loans not graded as Doubtful, Substandard or Special Mention. Pass loans are in compliance with loan covenants and payments are generally made as agreed. Pass loans range from superior quality to fair quality. Pass loans also include any portion of a government guaranteed loan, including Paycheck Protection Program loans.

Consumer and Residential Grading System

Consumer and Residential loans are graded as either Nonperforming or Performing.

Nonperforming

Nonperforming loans are loans that are (1) over 90 days past due and interest is still accruing or (2) on nonaccrual status.

Performing

All loans not meeting any of the above criteria are considered Performing.

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

The allowance for losses on unfunded commitments totaled $4.8 million as of September 30, 2023, which included $0.8 million of acquisition-related provision for unfunded loan commitments, compared to $5.1 million as of December 31, 2022.

Loan Modifications to Borrowers Experiencing Financial Difficulties

Loan Modifications to Borrowers Experiencing Financial Difficulties

As discussed in Note 3 Recent Accounting Pronouncements, the Company’s January 1, 2023 adoption of ASU 2022-02 eliminates the recognition and measurement of TDRs. Upon adoption of this guidance, the Company no longer recognizes an allowance for credit losses for the economic concession granted to a borrower for changes in the timing and amount of contractual cash flows when a loan is restructured. The adoption of ASU 2022-02 resulted in a change to reporting for loan modifications to borrowers experiencing financial difficulties. With the adoption of ASU 2022-02 these modifications required enhanced reporting on the type of modifications granted and the financial magnitude of the concessions granted.

When the Company modifies a loan with financial difficulty, such modifications generally include one or a combination of the following: an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a change in scheduled payment amount; or principal forgiveness.

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Defined Benefit Post-Retirement Plans (Policies)

9 Months Ended

Sep. 30, 2023

Defined Benefit Post-Retirement Plans [Abstract]

Postemployment Benefit Plans, Policy

The Company has a qualified, noncontributory, defined benefit pension plan (the “Plan”) covering substantially all of its employees at September 30, 2023. Benefits paid from the Plan are based on age, years of service, compensation and social security benefits and are determined in accordance with defined formulas. The Company’s policy is to fund the Plan in accordance with Employee Retirement Income Security Act of 1974 standards. Assets of the Plan are invested in publicly traded stocks, bonds and mutual funds. In addition to the Plan, the Company provides supplemental employee retirement plans to certain current and former executives. The Company also assumed supplemental retirement plans for former executives of Alliance Financial Corporation (“Alliance”) when the Company acquired Alliance. These supplemental employee retirement plans and the Plan are collectively referred to herein as “Pension Benefits.”

In addition, the Company provides certain health care benefits for retired employees. Benefits were accrued over the employees’ active service period. Only employees that were employed by the Company on or before January 1, 2000 are eligible to receive post-retirement health care benefits. In addition, the Company assumed post-retirement medical life insurance benefits for certain Alliance employees, retirees and their spouses, if applicable, in the Alliance acquisition. These post-retirement benefits are referred to herein as “Other Benefits.”

Accounting standards require an employer to: (1) recognize the overfunded or underfunded status of defined benefit post-retirement plans, which is measured as the difference between plan assets at fair value and the benefit obligation, as an asset or liability in its balance sheet; (2) recognize changes in that funded status in the year in which the changes occur through comprehensive income; and (3) measure the defined benefit plan assets and obligations as of the date of its year-end balance sheet.

The Company made no voluntary contributions to the pension and other benefits plans during the three and nine months ended September 30, 2023 and 2022.

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Earnings Per Share (Policies)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity (such as the Company’s dilutive stock options and restricted stock units).

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Fair Value Measurements and Fair Value of Financial Instruments (Policies)

9 Months Ended

Sep. 30, 2023

Fair Value Measurements and Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments, Policy

GAAP states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value measurements are not adjusted for transaction costs. A fair value hierarchy exists within GAAP that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The types of instruments valued based on quoted market prices in active markets include most U.S. government and agency securities, many other sovereign government obligations, liquid mortgage products, active listed equities and most money market securities. Such instruments are generally classified within Level 1 or Level 2 of the fair value hierarchy. The Company does not adjust the quoted prices for such instruments.

The types of instruments valued based on quoted prices in markets that are not active, broker or dealer quotations or quote from alternative pricing sources with reasonable levels of price transparency include most investment-grade and high-yield corporate bonds, less liquid mortgage products, less liquid agency securities, less liquid listed equities, state, municipal and provincial obligations and certain physical commodities. Such instruments are generally classified within Level 2 of the fair value hierarchy. Certain common equity securities are reported at fair value utilizing Level 1 inputs (exchange quoted prices). Other investment securities are reported at fair value utilizing Level 1 and Level 2 inputs. The prices for Level 2 instruments are obtained through an independent pricing service or dealer market participants with whom the Company has historically transacted both purchases and sales of investment securities. Prices obtained from these sources include prices derived from market quotations and matrix pricing. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. Management reviews the methodologies used by its third-party providers in pricing the securities.

Level 3 is for positions that are not traded in active markets or are subject to transfer restrictions. Valuations are adjusted to reflect illiquidity and/or non-transferability and such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate will be used. Management’s best estimate consists of both internal and external support on certain Level 3 investments. Subsequent to inception, management only changes Level 3 inputs and assumptions when corroborated by evidence such as transactions in similar instruments, completed or pending third-party transactions in the underlying investment or comparable entities, subsequent rounds of financing, recapitalizations and other transactions across the capital structure, offerings in the equity or debt markets and changes in financial ratios or cash flows.

GAAP requires disclosure of assets and liabilities measured and recorded at fair value on a non-recurring basis such as goodwill, loans held for sale, other real estate owned, collateral-dependent loans individually evaluated for expected credit losses and HTM securities. The non-recurring fair value measurements recorded during the nine month period ended September 30, 2023 and the year ended December 31, 2022 were related to loans individually evaluated for expected credit losses with fair value of $1.9 million and $1.1 million as of September 30, 2023 and December 31, 2022, respectively. The Company uses the fair value of underlying collateral, less costs to sell, to estimate the allowance for credit losses for individually evaluated collateral dependent loans. The appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses ranging from 10% to 50%. Based on the valuation techniques used, the fair value measurements for collateral dependent individually evaluated loans are classified as Level 3.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For example, the Company has a substantial wealth operation that contributes net fee income annually. The wealth management operation is not considered a financial instrument and its value has not been incorporated into the fair value estimates. Other significant assets and liabilities include the benefits resulting from the low-cost funding of deposit liabilities as compared to the cost of borrowing funds in the market and premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimate of fair value.

HTM Securities

The fair value of the Company’s HTM securities is primarily measured using information from a third-party pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things.

Net Loans

Net loans include portfolio loans and loans held for sale. Loans were first segregated by type and then further segmented into fixed and variable rate and loan quality categories. Expected future cash flows were projected based on contractual cash flows, adjusted for estimated prepayments, and those expected future cash flows also includes credit risk, illiquidity risk and other market factors to calculate the exit price fair value in accordance with ASC 820.

Time Deposits

The fair value of time deposits was estimated using a discounted cash flow approach that applies prevailing market interest rates for similar maturity instruments. The fair values of the Company’s time deposit liabilities do not take into consideration the value of the Company’s long-term relationships with depositors, which may have significant value.

Long-Term Debt

The fair value of long-term debt was estimated using a discounted cash flow approach that applies prevailing market interest rates for similar maturity instruments.

Subordinated Debt

The fair value of subordinated debt has been measured using the observable market price as of the period reported.

Junior Subordinated Debt

The fair value of junior subordinated debt has been estimated using a discounted cash flow analysis.

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Acquisitions (Tables)

9 Months Ended

Sep. 30, 2023

Acquisitions [Abstract]

Summary of Estimated Fair Value of Assets Acquired and Liabilities Assumed

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed:

	August 11, 2023
(In thousands)	Salisbury Bancorp, Inc.
Consideration:
Cash paid to shareholders (fractional shares)	$	15
Common stock issuance		161,723
Total net consideration	$	161,738
Recognized amounts of identifiable assets acquired and (liabilities) assumed:
Cash and cash equivalents	$	48,665
Securities available for sale		122,667
Loans, net of allowance for credit losses on purchased credit deteriorated loans		1,174,237
Premises and equipment, net		15,254
Core deposit intangibles		31,188
Wealth management customer intangible		4,654
Bank owned life insurance		30,315
Other assets		37,083
Total identifiable assets acquired	$	1,464,063
Deposits	$	(1,308,976	)
Borrowings		(55,461	)
Other liabilities		(15,949	)
Total liabilities assumed	$	(1,380,386	)
Total identifiable assets, net	$	83,677
Goodwill	$	78,061

Fair Value of Acquired PCD Loans

The following table provides details related to the fair value of acquired PCD loans.

(In thousands)	PCD Loans
Par value of PCD loans at acquisition	$	219,076
Allowance for credit losses at acquisition		5,772
Discount at acquisition		(24,512	)
Fair value of PCD loans at acquisition	$	200,336

Unaudited Pro Forma Information

The following table presents certain unaudited pro forma financial information for illustrative purposes only, for the three and nine months ended September 30, 2023 and 2022, as if Salisbury had been acquired on January 1, 2023. This unaudited pro forma information combines the historical results of Salisbury with the Company’s consolidated historical results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the respective periods. The pro forma information is not indicative of what would have occurred had the acquisition occurred as of the beginning of the year prior to the acquisition. The unaudited pro forma information does not consider any changes to the provision expense resulting from recording loan assets at fair value, cost savings or business synergies. As a result, actual amounts would have differed from the unaudited pro forma information presented and the differences could be significant.

	Pro Forma (Unaudited)				Pro Forma (Unaudited)
	Three Months Ended				Nine Months Ended
(In thousands)	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Total revenue, net of interest expense	$	130,881	$	147,621	$	404,580	$	427,440
Net income		12,182		43,374		81,859		127,209

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Securities (Tables)

9 Months Ended

Sep. 30, 2023

Securities [Abstract]

Amortized Cost, Estimated Fair Value and Unrealized Gains (Losses) of Available for Sale ("AFS") Securities

The amortized cost, estimated fair value and unrealized gains (losses) of available for sale (“AFS”) securities are as follows:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
As of September 30, 2023
U.S. treasury	$	133,160	$	-	$	(11,565	)	$	121,595
Federal agency		248,392		-		(44,636	)		203,756
State & municipal		96,449		-		(13,164	)		83,285
Mortgage-backed:
Government-sponsored enterprises		412,257		-		(61,231	)		351,026
U.S. government agency securities		74,812		6		(10,076	)		64,742
Collateralized mortgage obligations:
Government-sponsored enterprises		463,436		2		(63,389	)		400,049
U.S. government agency securities		164,418		-		(31,056	)		133,362
Corporate		48,432		-		(7,215	)		41,217
Total AFS securities	$	1,641,356	$	8	$	(242,332	)	$	1,399,032
As of December 31, 2022
U.S. treasury	$	132,891	$	-	$	(11,233	)	$	121,658
Federal agency		248,419		-		(42,000	)		206,419
State & municipal		97,036		5		(14,190	)		82,851
Mortgage-backed:
Government-sponsored enterprises		454,177		9		(54,675	)		399,511
U.S. government agency securities		81,844		15		(7,676	)		74,183
Collateralized mortgage obligations:
Government-sponsored enterprises		498,021		9		(59,473	)		438,557
U.S. government agency securities		171,090		-		(21,284	)		149,806
Corporate		60,404		-		(6,164	)		54,240
Total AFS securities	$	1,743,882	$	38	$	(216,695	)	$	1,527,225

Amortized Cost, Estimated Fair Value and Unrealized Gains (Losses) of Held to Maturity ("HTM") Securities

The amortized cost, estimated fair value and unrealized gains (losses) of held to maturity (“HTM”) securities are as follows:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
As of September 30, 2023
Federal agency	$	100,000	$	-	$	(23,003	)	$	76,997
Mortgage-backed:
Government-sponsored enterprises		233,580		-		(45,066	)		188,514
U.S. government agency securities		17,094		-		(1,328	)		15,766
Collateralized mortgage obligations:
Government-sponsored enterprises		192,243		-		(18,562	)		173,681
U.S. government agency securities		64,537		-		(13,259	)		51,278
State & municipal		307,066		-		(29,316	)		277,750
Total HTM securities	$	914,520	$	-	$	(130,534	)	$	783,986
As of December 31, 2022
Federal agency	$	100,000	$	-	$	(20,678	)	$	79,322
Mortgage-backed:
Government-sponsored enterprises		249,511		-		(36,819	)		212,692
U.S. government agency securities		18,396		4		(619	)		17,781
Collateralized mortgage obligations:
Government-sponsored enterprises		207,738		200		(14,876	)		193,062
U.S. government agency securities		66,628		-		(9,842	)		56,786
State & municipal		277,244		5		(24,245	)		253,004
Total HTM securities	$	919,517	$	209	$	(107,079	)	$	812,647

Gains and (Losses) on Equity Securities

The following tables set forth information with regard to gains and (losses) on equity securities:

	Three Months Ended September 30,
(In thousands)	2023			2022
Net (losses) recognized on equity securities	$	(183	)	$	(148	)
Less: Net (losses) recognized on equity securities sold during the period		-			-
Unrealized (losses) recognized on equity securities still held	$	(183	)	$	(148	)

	Nine Months Ended September 30,
(In thousands)	2023			2022
Net (losses) recognized on equity securities	$	(372	)	$	(918	)
Less: Net (losses) recognized on equity securities sold during the period		-			-
Unrealized (losses) recognized on equity securities still held	$	(372	)	$	(918	)

Contractual Maturities of Debt Securities

The following table sets forth information with regard to contractual maturities of debt securities at September 30, 2023:

(In thousands)	Amortized Cost		Estimated Fair Value
AFS debt securities:
Within one year	$	16,971	$	16,676
From one to five years		509,520		447,316
From five to ten years		423,813		359,342
After ten years		691,052		575,698
Total AFS debt securities	$	1,641,356	$	1,399,032
HTM debt securities:
Within one year	$	88,319	$	88,240
From one to five years		100,237		95,052
From five to ten years		279,872		234,309
After ten years		446,092		366,385
Total HTM debt securities	$	914,520	$	783,986

Investment Securities with Unrealized Losses

The following table sets forth information with regard to investment securities with unrealized losses, for which an allowance for credit losses has not been recorded, segregated according to the length of time the securities had been in a continuous unrealized loss position:

	Less Than 12 Months							12 Months or Longer							Total
(In thousands)	Fair Value		Unrealized Losses			Number of Positions		Fair Value		Unrealized Losses			Number of Positions		Fair Value		Unrealized Losses			Number of Positions
As of September 30, 2023
AFS securities:
U.S. treasury	$	-	$	-			-	$	121,595	$	(11,565	)		8	$	121,595	$	(11,565	)		8
Federal agency		-		-			-		203,756		(44,636	)		16		203,756		(44,636	)		16
State & municipal		747		(21	)		1		82,538		(13,143	)		66		83,285		(13,164	)		67
Mortgage-backed		463		(7	)		25		414,686		(71,300	)		157		415,149		(71,307	)		182
Collateralized mortgage obligations		3,825		(31	)		6		528,324		(94,414	)		118		532,149		(94,445	)		124
Corporate		1,344		(101	)		1		39,873		(7,114	)		14		41,217		(7,215	)		15
Total securities with unrealized losses	$	6,379	$	(160	)		33	$	1,390,772	$	(242,172	)		379	$	1,397,151	$	(242,332	)		412
HTM securities:
Federal agency	$	-	$	-			-	$	76,997	$	(23,003	)		4	$	76,997	$	(23,003	)		4
Mortgage-backed		11,610		(975	)		1		192,576		(45,419	)		33		204,186		(46,394	)		34
Collateralized mortgage obligation		8,834		(134	)		2		216,125		(31,687	)		53		224,959		(31,821	)		55
State & municipal		24,593		(1,080	)		31		164,058		(28,236	)		193		188,651		(29,316	)		224
Total securities with unrealized losses	$	45,037	$	(2,189	)		34	$	649,756	$	(128,345	)		283	$	694,793	$	(130,534	)		317
As of December 31, 2022
AFS securities:
U.S. treasury	$	55,616	$	(3,864	)		5	$	66,042	$	(7,369	)		3	$	121,658	$	(11,233	)		8
Federal agency		-		-			-		206,419		(42,000	)		16		206,419		(42,000	)		16
State & municipal		3,679		(341	)		2		78,395		(13,849	)		64		82,074		(14,190	)		66
Mortgage-backed		204,447		(15,048	)		149		267,926		(47,303	)		32		472,373		(62,351	)		181
Collateralized mortgage obligations		211,612		(14,458	)		77		374,376		(66,299	)		49		585,988		(80,757	)		126
Corporate		34,434		(2,970	)		12		19,806		(3,194	)		6		54,240		(6,164	)		18
Total securities with unrealized losses	$	509,788	$	(36,681	)		245	$	1,012,964	$	(180,014	)		170	$	1,522,752	$	(216,695	)		415
HTM securities:
Federal agency	$	-	$	-			-	$	79,322	$	(20,678	)		4	$	79,322	$	(20,678	)		4
Mortgage-backed		91,417		(9,096	)		21		138,936		(28,342	)		13		230,353		(37,438	)		34
Collateralized mortgage obligations		191,644		(13,863	)		47		48,289		(10,855	)		8		239,933		(24,718	)		55
State & municipal		110,727		(4,930	)		149		82,949		(19,315	)		76		193,676		(24,245	)		225
Total securities with unrealized losses	$	393,788	$	(27,889	)		217	$	349,496	$	(79,190	)		101	$	743,284	$	(107,079	)		318

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Allowance for Credit Losses and Credit Quality of Loans (Tables)

9 Months Ended

Sep. 30, 2023

Allowance for Credit Losses and Credit Quality of Loans [Abstract]

Allowance for Loan Losses by Portfolio

The following tables present the activity in the allowance for credit losses by our portfolio segments:

(In thousands)	Commercial Loans			Consumer Loans			Residential			Total
Balance as of June 30, 2023	$	36,963		$	47,883		$	15,554		$	100,400
Allowance for credit loss on PCD acquired loans		5,300			19			453			5,772
Charge-offs		(138	)		(6,167	)		(16	)		(6,321	)
Recoveries		474			1,549			94			2,117
Provision		4,121			3,990			4,522			12,633
Ending balance as of September 30, 2023	$	46,720		$	47,274		$	20,607		$	114,601
Balance as of June 30, 2022	$	32,358		$	44,940		$	16,302		$	93,600
Charge-offs		(624	)		(3,951	)		(118	)		(4,693	)
Recoveries		1,282			1,924			203			3,409
Provision		(60	)		5,397			(853	)		4,484
Ending balance as of September 30, 2022	$	32,956		$	48,310		$	15,534		$	96,800

(In thousands)	Commercial Loans			Consumer Loans			Residential			Total
Balance as of January 1, 2023 (after adoption of ASU 2022-02)	$	34,662		$	50,951		$	14,539		$	100,152
Allowance for credit loss on PCD acquired loans		5,300			19			453			5,772
Charge-offs		(514	)		(16,346	)		(460	)		(17,320	)
Recoveries		1,112			4,367			370			5,849
Provision		6,160			8,283			5,705			20,148
Ending balance as of September 30, 2023	$	46,720		$	47,274		$	20,607		$	114,601
Balance as of December 31, 2021	$	28,941		$	44,253		$	18,806		$	92,000
Charge-offs		(1,659	)		(11,051	)		(520	)		(13,230	)
Recoveries		2,212			5,693			655			8,560
Provision		3,462			9,415			(3,407	)		9,470
Ending balance as of September 30, 2022	$	32,956		$	48,310		$	15,534		$	96,800

Past due and Nonperforming Loans by Loan Class

The following table sets forth information with regard to past due and nonperforming loans by loan segment:

(In thousands)	31-60 Days Past Due Accruing		61-90 Days Past Due Accruing		Greater Than 90 Days Past Due Accruing		Total Past Due Accruing		Nonaccrual		Current		Recorded Total Loans
As of September 30, 2023
Commercial loans:
C&I	$	737	$	99	$	-	$	836	$	3,753	$	1,456,241	$	1,460,830
CRE		19,661		18		-		19,679		4,660		3,375,132		3,399,471
Total commercial loans	$	20,398	$	117	$	-	$	20,515	$	8,413	$	4,831,373	$	4,860,301
Consumer loans:
Auto	$	8,974	$	1,402	$	514	$	10,890	$	1,652	$	1,056,554	$	1,069,096
Residential solar		3,449		938		506		4,893		373		928,816		934,082
Other consumer		2,594		1,498		1,496		5,588		402		186,214		192,204
Total consumer loans	$	15,017	$	3,838	$	2,516	$	21,371	$	2,427	$	2,171,584	$	2,195,382
Residential	$	4,075	$	326	$	1,012	$	5,413	$	9,896	$	2,596,383	$	2,611,692
Total loans	$	39,490	$	4,281	$	3,528	$	47,299	$	20,736	$	9,599,340	$	9,667,375

(In thousands)	31-60 Days Past Due Accruing		61-90 Days Past Due Accruing		Greater Than 90 Days Past Due Accruing		Total Past Due Accruing		Nonaccrual		Current		Recorded Total Loans
As of December 31, 2022
Commercial loans:
C&I	$	342	$	99	$	4	$	445	$	2,244	$	1,238,468	$	1,241,157
CRE		336		96		-		432		5,780		2,689,196		2,695,408
Total commercial loans	$	678	$	195	$	4	$	877	$	8,024	$	3,927,664	$	3,936,565
Consumer loans:
Auto	$	8,640	$	1,393	$	785	$	10,818	$	1,494	$	950,389	$	962,701
Residential solar		2,858		731		474		4,063		79		852,656		856,798
Other consumer		3,483		1,838		1,789		7,110		94		272,384		279,588
Total consumer loans	$	14,981	$	3,962	$	3,048	$	21,991	$	1,667	$	2,075,429	$	2,099,087
Residential	$	2,496	$	555	$	771	$	3,822	$	7,542	$	2,103,131	$	2,114,495
Total loans	$	18,155	$	4,712	$	3,823	$	26,690	$	17,233	$	8,106,224	$	8,150,147

Credit Quality by Loan Class by Year of Origination (Vintage)

The following tables illustrate the Company’s credit quality by loan class by vintage and, beginning in 2023 with the Company’s January 1, 2023 adoption of ASU 2022-02, also includes gross charge-offs by loan class by vintage for the nine months ended September 30, 2023. Included in other consumer gross charge-offs, the Company recorded $0.2 million in overdrawn deposit accounts reported as 2022 originations and $0.5 million in overdrawn deposit accounts reported as 2023 originations, for the nine months ended September 30, 2023.

(In thousands)	2023			2022			2021			2020			2019			Prior			Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of September 30, 2023
C&I
By internally assigned grade:
Pass	$	171,431		$	302,023		$	257,555		$	164,254		$	83,519		$	75,504		$	351,672	$	2,666	$	1,408,624
Special mention		-			3,110			415			3,494			655			11,151			10,676		-		29,501
Substandard		1,521			8			705			312			2,285			4,317			13,413		14		22,575
Doubtful		-			1			66			58			4			1			-		-		130
Total C&I	$	172,952		$	305,142		$	258,741		$	168,118		$	86,463		$	90,973		$	375,761	$	2,680	$	1,460,830
Current-period gross charge-offs	$	-		$	(1	)	$	(5	)	$	(65	)	$	-		$	(329	)	$	-	$	-	$	(400	)
CRE
By internally assigned grade:
Pass	$	278,517		$	510,690		$	549,056		$	470,616		$	329,634		$	775,502		$	276,477	$	67,162	$	3,257,654
Special mention		3,678			2,236			9,041			8,082			13,915			21,829			8,250		-		67,031
Substandard		384			191			6,887			3,202			3,093			44,750			1,549		14,730		74,786
Total CRE	$	282,579		$	513,117		$	564,984		$	481,900		$	346,642		$	842,081		$	286,276	$	81,892	$	3,399,471
Current-period gross charge-offs	$	-		$	-		$	-		$	-		$	(114	)		-		$	-	$	-	$	(114	)
Auto
By payment activity:
Performing	$	369,178		$	395,362		$	176,026		$	49,917		$	56,455		$	19,979		$	13	$	-	$	1,066,930
Nonperforming		143			812			674			237			192			108			-		-		2,166
Total auto	$	369,321		$	396,174		$	176,700		$	50,154		$	56,647		$	20,087		$	13	$	-	$	1,069,096
Current-period gross charge-offs	$	(75	)	$	(827	)	$	(865	)	$	(283	)	$	(219	)	$	(243	)	$	-	$	-	$	(2,512	)
Residential solar
By payment activity:
Performing	$	155,132		$	438,855		$	182,153		$	67,562		$	48,362		$	41,139		$	-	$	-	$	933,203
Nonperforming		-			594			59			56			72			98			-		-		879
Total residential solar	$	155,132		$	439,449		$	182,212		$	67,618		$	48,434		$	41,237		$	-	$	-	$	934,082
Current-period gross charge-offs	$	(121)		$	(1,244	)	$	(696	)	$	(45	)	$	(447	)	$	(193	)	$	-	$	-	$	(2,746	)
Other consumer
By payment activity:
Performing	$	11,221		$	31,813		$	68,732		$	24,152		$	17,234		$	18,599		$	18,552	$	3	$	190,306
Nonperforming		-			490			742			147			139			347			1		32		1,898
Total other consumer	$	11,221		$	32,303		$	69,474		$	24,299		$	17,373		$	18,946		$	18,553	$	35	$	192,204
Current-period gross charge-offs	$	(561	)	$	(2,788	)	$	(5,742	)	$	(1,099	)	$	(595	)	$	(303	)	$	-	$	-	$	(11,088	)
Residential
By payment activity:
Performing	$	149,700		$	363,044		$	457,105		$	272,533		$	171,854		$	904,002		$	265,049	$	17,497	$	2,600,784
Nonperforming		144			442			1,226			314			462			8,320			-		-		10,908
Total residential	$	149,844		$	363,486		$	458,331		$	272,847		$	172,316		$	912,322		$	265,049	$	17,497	$	2,611,692
Current-period gross charge-offs	$	-		$	-		$	(81	)	$	-		$	-		$	(379	)	$	-	$	-	$	(460	)
Total loans	$	1,141,049		$	2,049,671		$	1,710,442		$	1,064,936		$	727,875		$	1,925,646		$	945,652	$	102,104	$	9,667,375
Current-period gross charge-offs	$	(757	)	$	(4,860	)	$	(7,389	)	$	(1,492	)	$	(1,375	)	$	(1,447	)	$	-	$	-	$	(17,320	)

(In thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2022
C&I
By internally assigned grade:
Pass	$	296,562	$	252,480	$	164,976	$	91,497	$	39,394	$	32,413	$	327,166	$	3,133	$	1,207,621
Special mention		1,044		524		4,531		194		1,108		417		5,234		-		13,052
Substandard		76		459		231		3,098		91		3,969		12,348		163		20,435
Doubtful		-		20		-		28		-		1		-		-		49
Total C&I	$	297,682	$	253,483	$	169,738	$	94,817	$	40,593	$	36,800	$	344,748	$	3,296	$	1,241,157
CRE
By internally assigned grade:
Pass	$	374,313	$	465,990	$	439,012	$	333,568	$	217,141	$	566,783	$	201,563	$	24,735	$	2,623,105
Special mention		605		764		868		2,641		4,649		24,023		850		-		34,400
Substandard		309		-		2,316		3,937		1,822		23,819		713		4,987		37,903
Total CRE	$	375,227	$	466,754	$	442,196	$	340,146	$	223,612	$	614,625	$	203,126	$	29,722	$	2,695,408
Auto
By payment activity:
Performing	$	488,776	$	239,090	$	75,853	$	99,615	$	44,061	$	13,027	$	-	$	-	$	960,422
Nonperforming		590		655		404		385		216		29		-		-		2,279
Total auto	$	489,366	$	239,745	$	76,257	$	100,000	$	44,277	$	13,056	$	-	$	-	$	962,701
Residential solar
By Payment Activity:
Performing	$	485,942	$	193,971	$	74,532	$	54,662	$	36,119	$	11,019	$	-	$	-	$	856,245
Nonperforming		320		98		50		25		16		44		-		-		553
Total residential solar	$	486,262	$	194,069	$	74,582	$	54,687	$	36,135	$	11,063	$	-	$	-	$	856,798
Other consumer
By payment activity:
Performing	$	52,545	$	110,624	$	36,412	$	27,383	$	15,536	$	15,735	$	19,218	$	250	$	277,703
Nonperforming		238		838		395		247		57		87		8		15		1,885
Total other consumer	$	52,783	$	111,462	$	36,807	$	27,630	$	15,593	$	15,822	$	19,226	$	265	$	279,588
Residential
By payment activity:
Performing	$	251,012	$	349,498	$	212,161	$	156,957	$	157,755	$	717,621	$	233,056	$	28,122	$	2,106,182
Nonperforming		267		384		408		555		1,028		5,651		-		20		8,313
Total residential	$	251,279	$	349,882	$	212,569	$	157,512	$	158,783	$	723,272	$	233,056	$	28,142	$	2,114,495
Total loans	$	1,952,599	$	1,615,395	$	1,012,149	$	774,792	$	518,993	$	1,414,638	$	800,156	$	61,425	$	8,150,147

Amortized Cost Basis of Loans Modified to Borrowers Experiencing Financial Difficulty

The following table shows the amortized cost basis at the end of the reporting period of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted:

	Three Months Ended September 30, 2023
	Interest Rate Reduction					Term Extension					Combination - Term Extension and Interest Rate Reduction
(Dollars in thousands)	Amortized Cost		% of Total Class of Financing Receivables			Amortized Cost		% of Total Class of Financing Receivables			Amortized Cost		% of Total Class of Financing Receivables
Residential	$	31		0.001	%	$	145		0.006	%	$	-		-
Total	$	31				$	145				$	-

	Nine Months Ended September 30, 2023
	Interest Rate Reduction					Term Extension					Combination - Term Extension and Interest Rate Reduction
(Dollars in thousands)	Amortized Cost		% of Total Class of Financing Receivables			Amortized Cost		% of Total Class of Financing Receivables			Amortized Cost		% of Total Class of Financing Receivables
Residential	$	31		0.001	%	$	386		0.015	%	$	165		0.006	%
Total	$	31				$	386				$	165

Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulties:

	Three Months Ended September 30, 2023
Loan Type	Term Extension	Interest Rate Reduction
Residential	Added a weighted-average 17 years to the life of loans, which reduced monthly payment amounts for the borrowers.	Interest rates were reduced by an average of one percent

	Nine Months Ended September 30, 2023
Loan Type	Term Extension	Interest Rate Reduction
Residential	Added a weighted-average 15 years to the life of loans, which reduced monthly payment amounts for the borrowers.	Interest rates were reduced by an average of two and a quarter percent

Financing Receivables with Payment Default that Were Modified to Borrowers Experiencing Financial Difficulty

The following table depicts the financing receivables that had a payment default that were modified to borrowers experiencing financial difficulty since the adoption of ASU 2022-02 effective January 1, 2023:

	Three Months Ended September 30, 2023
	Amortized Cost Basis of Modified Financing Receivables that Subsequently Defaulted
(In thousands)	Interest Rate Reduction
Residential		$	31
Total		$	31

	Nine Months Ended September 30, 2023
	Amortized Cost Basis of Modified Financing Receivables that Subsequently Defaulted
(In thousands)	Interest Rate Reduction
Residential		$	31
Total		$	31

Performance of Modified Loans

The following table depicts the performance of loans that have been modified since the adoption of ASU 2022-02 effective January 1, 2023:

	Payment Status (Amortized Cost Basis)
(In thousands)	Current		31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due
Three Months Ended September 30, 2023
Residential	$	145	$	31	$	-	$	-
Total	$	145	$	31	$	-	$	-

	Payment Status (Amortized Cost Basis)
(In thousands)	Current		31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due
Nine Months Ended September 30, 2023
Residential	$	549	$	31	$	-	$	-
Total	$	549	$	31	$	-	$	-

Troubled Debt Restructurings on Financing Receivables

The following table illustrates the recorded investments and number of modifications designated as TDRs, including the recorded investment in the loans prior to a modification and the recorded investment in the loans after restructuring:

	Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
(Dollars in thousands)	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Residential		6	$	613	$	682		10	$	829	$	928
Total TDRs		6	$	613	$	682		10	$	829	$	928

The following table illustrates the recorded investment and number of modifications for TDRs where a concession has been made and subsequently defaulted during the period:

	Three Months Ended September 30, 2022				Nine Months Ended September 30, 2022
(Dollars in thousands)	Number of Contracts		Recorded Investment		Number of Contracts		Recorded Investment
Commercial loans:
C&I		1	$	320		1	$	320
Total commercial loans		1	$	320		1	$	320
Consumer loans:
Auto		-	$	-		1	$	11
Total consumer loans		-	$	-		1	$	11
Residential		18	$	869		44	$	2,320
Total TDRs		19	$	1,189		46	$	2,651

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Defined Benefit Post-Retirement Plans (Tables)

9 Months Ended

Sep. 30, 2023

Defined Benefit Post-Retirement Plans [Abstract]

Net Periodic Pension Benefits and Other Benefit Costs

The components of expense for Pension Benefits and Other Benefits are set forth below:

	Pension Benefits						Other Benefits
	Three Months Ended September 30,						Three Months Ended September 30,
(In thousands)	2023			2022			2023			2022
Components of net periodic cost (benefit):
Service cost	$	476		$	506		$	1		$	2
Interest cost		999			690			56			42
Expected return on plan assets		(1,844	)		(2,220	)		-			-
Net amortization		669			183			(21	)		2
Total net periodic cost (benefit)	$	300		$	(841	)	$	36		$	46

	Pension Benefits						Other Benefits
	Nine Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2023			2022			2023			2022
Components of net periodic cost (benefit):
Service cost	$	1,440		$	1,574		$	3		$	6
Interest cost		3,019			2,078			168			124
Expected return on plan assets		(5,550	)		(6,676	)		-			-
Net amortization		2,009			553			(63	)		4
Total net periodic cost (benefit)	$	918		$	(2,471	)	$	108		$	134

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Reconciliation of Basic and Diluted Earnings Per Share and Anti-Dilutive Stock Options and Restricted Stock Outstanding

The following is a reconciliation of basic and diluted EPS and the anti-dilutive stock options and restricted stock outstanding for the periods presented in the unaudited interim consolidated statements of income:

	Three Months Ended September 30,
(In thousands, except per share data)	2023		2022
Basic EPS:
Weighted average common shares outstanding		45,163		42,838
Net income available to common stockholders	$	24,606	$	38,973
Basic EPS	$	0.54	$	0.91
Diluted EPS:
Weighted average common shares outstanding		45,163		42,838
Dilutive effect of common stock options and restricted stock		236		273
Weighted average common shares and common share equivalents		45,399		43,111
Net income available to common stockholders	$	24,606	$	38,973
Diluted EPS	$	0.54	$	0.90
Anti-dilutive stock options and restricted stock outstanding		27		2

	Nine Months Ended September 30,
(In thousands, except per share data)	2023		2022
Basic EPS:
Weighted average common shares outstanding		43,662		42,940
Net income available to common stockholders	$	88,336	$	115,874
Basic EPS	$	2.02	$	2.70
Diluted EPS:
Weighted average common shares outstanding		43,662		42,940
Dilutive effect of common stock options and restricted stock		234		254
Weighted average common shares and common share equivalents		43,896		43,194
Net income available to common stockholders	$	88,336	$	115,874
Diluted EPS	$	2.01	$	2.68
Anti-dilutive stock options and restricted stock outstanding		25		2

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Reclassification Adjustments Out of Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2023

Reclassification Adjustments Out of Other Comprehensive Income (Loss) [Abstract]

Reclassification Adjustments out of AOCI

The following table summarizes the reclassification adjustments out of AOCI:

Detail About AOCI Components	Amount Reclassified from AOCI						Affected Line Item in the Consolidated Statements of Comprehensive Income (Loss)
	Three Months Ended
(In thousands)	September 30, 2023			September 30, 2022
AFS securities:
Amortization of unrealized gains related to securities transfer	$	105		$	125		Interest income
Tax effect	$	(26	)	$	(31	)	Income tax (benefit)
Net of tax	$	79		$	94
Pension and other benefits:
Amortization of net losses	$	638		$	156		Other noninterest expense
Amortization of prior service costs		10			29		Other noninterest expense
Tax effect	$	(162	)	$	(47	)	Income tax (benefit)
Net of tax	$	486		$	138
Total reclassifications, net of tax	$	565		$	232

Detail About AOCI Components	Amount Reclassified from AOCI						Affected Line item in the Consolidated Statements of  Comprehensive Income (Loss)
	Nine Months Ended
(In thousands)	September 30, 2023			September 30, 2022
AFS securities:
Losses on AFS securities	$	9,450		$	-		Net securities (gains) losses
Amortization of unrealized gains related to securities transfer		328			393		Interest income
Tax effect	$	(2,445	)	$	(98	)	Income tax (benefit)
Net of tax	$	7,333		$	295
Pension and other benefits:
Amortization of net losses	$	1,918		$	470		Other noninterest expense
Amortization of prior service costs		28			87		Other noninterest expense
Tax effect	$	(487	)	$	(140	)	Income tax (benefit)
Net of tax	$	1,459		$	417
Total reclassifications, net of tax	$	8,792		$	712

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Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosures [Line Items]

Summary of Derivatives Outstanding

The following table summarizes the derivatives outstanding:

(In thousands)	Notional Amount		Balance Sheet Location	Fair Value		Notional Amount		Balance Sheet Location	Fair Value
As of September 30, 2023
Derivatives not designated as hedging instruments
Interest rate derivatives	$	1,304,523	Other assets	$	143,716	$	1,304,523	Other liabilities	$	143,596
Risk participation agreements		62,467	Other assets		7		16,716	Other liabilities		3
Total derivatives not designated as hedging instruments				$	143,723				$	143,599
Netting adjustments(1)					30,583					-
Net derivatives in the balance sheet				$	113,140				$	143,599
Derivatives not offset on the balance sheet				$	143				$	143
Cash collateral(2)					-					-
Net derivative amounts				$	112,997				$	143,456
As of December 31, 2022
Derivatives not designated as hedging instruments
Interest rate derivatives	$	1,275,708	Other assets	$	117,247	$	1,275,708	Other liabilities	$	117,247
Risk participation agreements		88,963	Other assets		47		18,421	Other liabilities		10
Total derivatives not designated as hedging instruments				$	117,294				$	117,257
Netting adjustments(1)					24,109					-
Net derivatives in the balance sheet				$	93,185				$	117,257
Derivatives not offset on the balance sheet				$	352				$	352
Cash collateral(2)					-					-
Net derivative amounts				$	92,833				$	116,905

(1) Netting adjustments represents the amounts recorded to convert derivatives assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance on the settle to market rules for cleared derivatives. The CME legally characterizes the variation margin posted between counterparties as settlements of the outstanding derivative contracts instead of cash collateral.

(2) Cash collateral represents the amount that cannot be used to offset our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The other collateral consists of securities and is exchanged under bilateral collateral and master netting agreements that allow us to offset the net derivative position with the related collateral. The application of the other collateral cannot reduce the net derivative position below zero. Therefore, excess other collateral, if any, is not reflected above.

Not Designated as Hedging Instrument [Member]

Derivative Instruments and Hedging Activities Disclosures [Line Items]

Effect of Derivatives on AOCI and on Consolidated Statement of Income

The following table indicates the gain or loss recognized in income on derivatives not designated as a hedging relationship:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2023			2022			2023			2022
Derivatives not designated as hedging instruments:
(Decrease) in other income	$	(65	)	$	(33	)	$	(65	)	$	(152	)

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Fair Value Measurements and Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Measurements and Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis

The following tables set forth the Company’s financial assets and liabilities measured on a recurring basis that were accounted for at fair value. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

(In thousands)	Level 1		Level 2		Level 3		September 30, 2023
Assets:
AFS securities
U.S. treasury	$	121,595	$	-	$	-	$	121,595
Federal agency		-		203,756		-		203,756
State & municipal		-		83,285		-		83,285
Mortgage-backed		-		415,768		-		415,768
Collateralized mortgage obligations		-		533,411		-		533,411
Corporate		-		41,217		-		41,217
Total AFS securities	$	121,595	$	1,277,437	$	-	$	1,399,032
Equity securities		34,600		1,000		-		35,600
Derivatives		-		113,140		-		113,140
Total	$	156,195	$	1,391,577	$	-	$	1,547,772
Liabilities:
Derivatives	$	-	$	143,599	$	-	$	143,599
Total	$	-	$	143,599	$	-	$	143,599

(In thousands)	Level 1		Level 2		Level 3		December 31, 2022
Assets:
AFS securities
U.S. treasury	$	121,658	$	-	$	-	$	121,658
Federal agency		-		206,419		-		206,419
State & municipal		-		82,851		-		82,851
Mortgage-backed		-		473,694		-		473,694
Collateralized mortgage obligations		-		588,363		-		588,363
Corporate		-		54,240		-		54,240
Total AFS securities	$	121,658	$	1,405,567	$	-	$	1,527,225
Equity securities		29,784		1,000		-		30,784
Derivatives		-		93,185		-		93,185
Total	$	151,442	$	1,499,752	$	-	$	1,651,194
Liabilities:
Derivatives	$	-	$	117,257	$	-	$	117,257
Total	$	-	$	117,257	$	-	$	117,257

Information with Regard to Estimated Fair Values of Financial Instruments

The following table sets forth information with regard to estimated fair values of financial instruments. This table excludes financial instruments for which the carrying amount approximates fair value. Financial instruments for which the fair value approximates carrying value include cash and cash equivalents, AFS securities, equity securities, accrued interest receivable, non-maturity deposits, short-term borrowings, accrued interest payable and derivatives.

			September 30, 2023				December 31, 2022
(In thousands)	Fair Value Hierarchy		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets:
HTM securities		2	$	914,520	$	783,986	$	919,517	$	812,647
Net loans		3		9,556,887		9,097,545		8,049,909		7,840,350
Financial liabilities:
Time deposits		2	$	1,344,199	$	1,301,989	$	433,772	$	413,868
Long-term debt		2		29,834		29,114		4,815		4,539
Subordinated debt		1		120,061		110,057		98,000		92,883
Junior subordinated debt		2		101,196		99,259		101,196		98,372

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Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Recently Adopted Accounting Standards [Abstract]
Retained earnings	$ 1,006,459		$ 958,433
Allowance for credit losses	114,601	$ 100,400	100,800	$ 96,800	$ 93,600	$ 92,000
ASU 2022-02 [Member]
Recently Adopted Accounting Standards [Abstract]
Allowance for credit losses	$ 114,601		100,152
Cumulative Effect, Period of Adoption, Adjustment [Member] | ASU 2022-02 [Member]
Recently Adopted Accounting Standards [Abstract]
Retained earnings			500
Deferred tax asset			100
Cumulative Effect, Period of Adoption, Adjustment [Member] | ASU 2022-02 [Member] | Loans [Member]
Recently Adopted Accounting Standards [Abstract]
Allowance for credit losses			$ (600)

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Acquisitions, Salisbury Bancorp, Inc. (Details) shares in Thousands, $ in Thousands	Aug. 11, 2023 USD ($) Office shares	Sep. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Recognized amounts of identifiable assets acquired and (liabilities) assumed [Abstract]
Goodwill		$ 360,171	$ 281,204
Salisbury Bancorp, Inc [Member]
Acquisition of Salisbury Bancorp, Inc. [Abstract]
Number of banking offices | Office	13
Stock issued (in shares) | shares	4,320
Consideration [Abstract]
Cash paid to shareholders (fractional shares)	$ 15
Common stock issuance	161,723
Total net consideration	161,738
Recognized amounts of identifiable assets acquired and (liabilities) assumed [Abstract]
Cash and cash equivalents	48,665
Securities available for sale	122,667
Loans, net of allowance for credit losses on purchased credit deteriorated loans	1,174,237
Premises and equipment, net	15,254
Bank owned life insurance	30,315
Other assets	37,083
Total identifiable assets acquired	1,464,063
Deposits	(1,308,976)
Borrowings	(55,461)
Other liabilities	(15,949)
Total liabilities assumed	(1,380,386)
Total identifiable assets, net	83,677
Goodwill	78,061
Salisbury Bancorp, Inc [Member] | Core Deposits [Member]
Recognized amounts of identifiable assets acquired and (liabilities) assumed [Abstract]
Intangibles	31,188
Salisbury Bancorp, Inc [Member] | Wealth Management Customer [Member]
Recognized amounts of identifiable assets acquired and (liabilities) assumed [Abstract]
Intangibles	$ 4,654

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Acquisitions, Accounting for Acquired Loans (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Aug. 11, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Merger and Acquisition [Abstract]
Merger and acquisition integration related expenses		$ 7,917	$ 0	$ 9,724	$ 0
Salisbury Bancorp, Inc [Member]
Accounting for Acquired Loans [Abstract]
Allowance for credit losses on non-PCD loans	$ 8,800
Par value of PCD loans at acquisition	219,076
Allowance for credit losses at acquisition	5,772
Discount at acquisition	(24,512)
Fair value of PCD loans at acquisition	$ 200,336
Merger and Acquisition [Abstract]
Merger and acquisition integration related expenses		$ 7,900		$ 9,700

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Acquisitions, Supplemental Pro Forma Financial Information (Unaudited) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Business Acquisition, Pro Forma Information [Abstract]
Total revenue, net of interest expense	$ 130,881	$ 147,621	$ 404,580	$ 427,440
Net income	$ 12,182	$ 43,374	$ 81,859	$ 127,209

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Securities, Available for Sale (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Debt securities, available-for-sale [Abstract]
Amortized cost	$ 1,641,356		$ 1,641,356		$ 1,743,882
Unrealized gains	8		8		38
Unrealized losses	(242,332)		(242,332)		(216,695)
Estimated fair value	1,399,032		1,399,032		1,527,225
Allowance for credit losses on AFS securities	0		0		0
Gross realized gains	0	$ 0		$ 0
Gross realized losses	0	$ 0	4,500	$ 0
U.S. Treasury [Member]
Debt securities, available-for-sale [Abstract]
Amortized cost	133,160		133,160		132,891
Unrealized gains	0		0		0
Unrealized losses	(11,565)		(11,565)		(11,233)
Estimated fair value	121,595		121,595		121,658
Federal Agency [Member]
Debt securities, available-for-sale [Abstract]
Amortized cost	248,392		248,392		248,419
Unrealized gains	0		0		0
Unrealized losses	(44,636)		(44,636)		(42,000)
Estimated fair value	203,756		203,756		206,419
State & Municipal [Member]
Debt securities, available-for-sale [Abstract]
Amortized cost	96,449		96,449		97,036
Unrealized gains	0		0		5
Unrealized losses	(13,164)		(13,164)		(14,190)
Estimated fair value	83,285		83,285		82,851
Mortgage-Backed, Government Sponsored Enterprises [Member]
Debt securities, available-for-sale [Abstract]
Amortized cost	412,257		412,257		454,177
Unrealized gains	0		0		9
Unrealized losses	(61,231)		(61,231)		(54,675)
Estimated fair value	351,026		351,026		399,511
Mortgage-Backed, U.S. Government Agency Securities [Member]
Debt securities, available-for-sale [Abstract]
Amortized cost	74,812		74,812		81,844
Unrealized gains	6		6		15
Unrealized losses	(10,076)		(10,076)		(7,676)
Estimated fair value	64,742		64,742		74,183
Collateralized Mortgage Obligations, Government-Sponsored Enterprises [Member]
Debt securities, available-for-sale [Abstract]
Amortized cost	463,436		463,436		498,021
Unrealized gains	2		2		9
Unrealized losses	(63,389)		(63,389)		(59,473)
Estimated fair value	400,049		400,049		438,557
Collateralized Mortgage Obligations, U.S. Government Agency Securities [Member]
Debt securities, available-for-sale [Abstract]
Amortized cost	164,418		164,418		171,090
Unrealized gains	0		0		0
Unrealized losses	(31,056)		(31,056)		(21,284)
Estimated fair value	133,362		133,362		149,806
Corporate [Member]
Debt securities, available-for-sale [Abstract]
Amortized cost	48,432		48,432		60,404
Unrealized gains	0		0		0
Unrealized losses	(7,215)		(7,215)		(6,164)
Estimated fair value	$ 41,217		41,217		$ 54,240
Loss on the write-off of an AFS debt security			$ 5,000

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Securities, Held to Maturity (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Held-to-maturity securities, fair value to amortized cost [Abstract]
Amortized cost	$ 914,520		$ 914,520		$ 919,517
Unrealized gains	0		0		209
Unrealized losses	(130,534)		(130,534)		(107,079)
Estimated fair value	783,986		783,986		812,647
Allowance for credit losses on HTM securities	0		0		0
Transactions of HTM securities [Abstract]
Gains from calls on HTM securities	0	$ 0	0	$ 4
Asset Pledged as Collateral [Member] | Public Deposits or Other Purposes [Member]
Securities pledged [Abstract]
AFS and HTM securities	1,990,000		1,990,000		1,730,000
Asset Pledged as Collateral [Member] | Securities Sold under Repurchase Agreements [Member]
Securities pledged [Abstract]
AFS and HTM securities	157,400		157,400		149,500
Federal Agency [Member]
Held-to-maturity securities, fair value to amortized cost [Abstract]
Amortized cost	100,000		100,000		100,000
Unrealized gains	0		0		0
Unrealized losses	(23,003)		(23,003)		(20,678)
Estimated fair value	76,997		76,997		79,322
Mortgage-Backed, Government Sponsored Enterprises [Member]
Held-to-maturity securities, fair value to amortized cost [Abstract]
Amortized cost	233,580		233,580		249,511
Unrealized gains	0		0		0
Unrealized losses	(45,066)		(45,066)		(36,819)
Estimated fair value	188,514		188,514		212,692
Mortgage-Backed, U.S. Government Agency Securities [Member]
Held-to-maturity securities, fair value to amortized cost [Abstract]
Amortized cost	17,094		17,094		18,396
Unrealized gains	0		0		4
Unrealized losses	(1,328)		(1,328)		(619)
Estimated fair value	15,766		15,766		17,781
Collateralized Mortgage Obligations, Government-Sponsored Enterprises [Member]
Held-to-maturity securities, fair value to amortized cost [Abstract]
Amortized cost	192,243		192,243		207,738
Unrealized gains	0		0		200
Unrealized losses	(18,562)		(18,562)		(14,876)
Estimated fair value	173,681		173,681		193,062
Collateralized Mortgage Obligations, U.S. Government Agency Securities [Member]
Held-to-maturity securities, fair value to amortized cost [Abstract]
Amortized cost	64,537		64,537		66,628
Unrealized gains	0		0		0
Unrealized losses	(13,259)		(13,259)		(9,842)
Estimated fair value	51,278		51,278		56,786
State & Municipal [Member]
Held-to-maturity securities, fair value to amortized cost [Abstract]
Amortized cost	307,066		307,066		277,244
Unrealized gains	0		0		5
Unrealized losses	(29,316)		(29,316)		(24,245)
Estimated fair value	$ 277,750		$ 277,750		$ 253,004

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Securities, Gains and (Losses) on Equity Securities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Gains (losses) on equity securities [Abstract]
Net (losses) recognized on equity securities	$ (183)	$ (148)	$ (372)	$ (918)
Less: Net (losses) recognized on equity securities sold during the period	0	0	0	0
Unrealized (losses) recognized on equity securities still held	(183)	(148)	(372)	(918)
Equity Securities without Readily Determinable Fair Value, Annual Amount [Abstract]
Carrying amount of equity securities without readily determinable fair values	1,000		1,000		$ 1,000
Impairment adjustments of equity securities without readily determinable fair values	0	0	0	0
Downward adjustments of equity securities without readily determinable fair values	0	0	0	0
Upward adjustments of equity securities without readily determinable fair values	$ 0	$ 0	$ 0	$ 0

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Securities, AFS Debt Securities, Contractual Maturities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Available-for-sale Securities, Debt Maturities, Amortized Cost [Abstract]
Within one year	$ 16,971
From one to five years	509,520
From five to ten years	423,813
After ten years	691,052
Amortized cost	1,641,356	$ 1,743,882
Available-for-sale Securities, Debt Maturities, Estimated Fair Value [Abstract]
Within one year	16,676
From one to five years	447,316
From five to ten years	359,342
After ten years	575,698
Fair value	$ 1,399,032	$ 1,527,225

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Securities, HTM Debt Securities, Contractual Maturities (Details) $ in Thousands	Sep. 30, 2023 USD ($) Issuer	Dec. 31, 2022 USD ($) Issuer
Held-to-maturity Securities, Debt Maturities, Amortized Cost [Abstract]
Within one year	$ 88,319
From one to five years	100,237
From five to ten years	279,872
After ten years	446,092
Amortized cost	914,520	$ 919,517
Held-to-maturity Securities, Debt Maturities, Estimated Fair Value [Abstract]
Within one year	88,240
From one to five years	95,052
From five to ten years	234,309
After ten years	366,385
Fair value	$ 783,986	$ 812,647
Number of issuers whose holdings exceeded 10% of consolidated stockholders' equity, excluding U.S. Government securities and Government-sponsored enterprises securities | Issuer	0	0

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Securities, AFS Securities in Continuous Unrealized Loss Position (Details) $ in Thousands	Sep. 30, 2023 USD ($) Position	Dec. 31, 2022 USD ($) Position
Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months	$ 6,379	$ 509,788
12 months or longer	1,390,772	1,012,964
Total	1,397,151	1,522,752
Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months	(160)	(36,681)
12 months or longer	(242,172)	(180,014)
Total	$ (242,332)	$ (216,695)
Unrealized Loss Position, Number of Positions [Abstract]
Less than 12 months | Position	33	245
12 months or longer | Position	379	170
Total | Position	412	415
AIR on AFS debt securities	$ 3,900	$ 4,200
Debt Securities, Available-for-Sale, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration]	Other Assets	Other Assets
U.S. Treasury [Member]
Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months	$ 0	$ 55,616
12 months or longer	121,595	66,042
Total	121,595	121,658
Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months	0	(3,864)
12 months or longer	(11,565)	(7,369)
Total	$ (11,565)	$ (11,233)
Unrealized Loss Position, Number of Positions [Abstract]
Less than 12 months | Position	0	5
12 months or longer | Position	8	3
Total | Position	8	8
Federal Agency [Member]
Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months	$ 0	$ 0
12 months or longer	203,756	206,419
Total	203,756	206,419
Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months	0	0
12 months or longer	(44,636)	(42,000)
Total	$ (44,636)	$ (42,000)
Unrealized Loss Position, Number of Positions [Abstract]
Less than 12 months | Position	0	0
12 months or longer | Position	16	16
Total | Position	16	16
State & Municipal [Member]
Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months	$ 747	$ 3,679
12 months or longer	82,538	78,395
Total	83,285	82,074
Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months	(21)	(341)
12 months or longer	(13,143)	(13,849)
Total	$ (13,164)	$ (14,190)
Unrealized Loss Position, Number of Positions [Abstract]
Less than 12 months | Position	1	2
12 months or longer | Position	66	64
Total | Position	67	66
Mortgage-Backed [Member]
Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months	$ 463	$ 204,447
12 months or longer	414,686	267,926
Total	415,149	472,373
Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months	(7)	(15,048)
12 months or longer	(71,300)	(47,303)
Total	$ (71,307)	$ (62,351)
Unrealized Loss Position, Number of Positions [Abstract]
Less than 12 months | Position	25	149
12 months or longer | Position	157	32
Total | Position	182	181
Collateralized Mortgage Obligations [Member]
Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months	$ 3,825	$ 211,612
12 months or longer	528,324	374,376
Total	532,149	585,988
Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months	(31)	(14,458)
12 months or longer	(94,414)	(66,299)
Total	$ (94,445)	$ (80,757)
Unrealized Loss Position, Number of Positions [Abstract]
Less than 12 months | Position	6	77
12 months or longer | Position	118	49
Total | Position	124	126
Corporate [Member]
Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months	$ 1,344	$ 34,434
12 months or longer	39,873	19,806
Total	41,217	54,240
Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months	(101)	(2,970)
12 months or longer	(7,114)	(3,194)
Total	$ (7,215)	$ (6,164)
Unrealized Loss Position, Number of Positions [Abstract]
Less than 12 months | Position	1	12
12 months or longer | Position	14	6
Total | Position	15	18

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Securities, HTM Securities in Continuous Unrealized Loss Position (Details) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2023 USD ($) Position	Sep. 30, 2023 USD ($) Position	Dec. 31, 2022 USD ($) Position
Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months	$ 45,037	$ 45,037	$ 393,788
12 months or longer	649,756	649,756	349,496
Total	694,793	694,793	743,284
Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months	(2,189)	(2,189)	(27,889)
12 months or longer	(128,345)	(128,345)	(79,190)
Total	$ (130,534)	$ (130,534)	$ (107,079)
Unrealized Loss Position, Number of Positions [Abstract]
Less than 12 months | Position	34	34	217
12 months or longer | Position	283	283	101
Total | Position	317	317	318
HTM debt securities, nonaccrual	$ 0	$ 0	$ 0
Accrued interest reversed against interest income	0	0	0
Collateral-dependent HTM debt securities	0	0	0
AIR on HTM debt securities	$ 3,800	$ 3,800	$ 3,800
Debt Securities, Held-to-Maturity, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration]	Other Assets	Other Assets	Other Assets
Past Due [Member]
Unrealized Loss Position, Number of Positions [Abstract]
HTM debt securities	$ 0	$ 0	$ 0
Federal Agency [Member]
Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months	0	0	0
12 months or longer	76,997	76,997	79,322
Total	76,997	76,997	79,322
Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months	0	0	0
12 months or longer	(23,003)	(23,003)	(20,678)
Total	$ (23,003)	$ (23,003)	$ (20,678)
Unrealized Loss Position, Number of Positions [Abstract]
Less than 12 months | Position	0	0	0
12 months or longer | Position	4	4	4
Total | Position	4	4	4
Mortgage-Backed [Member]
Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months	$ 11,610	$ 11,610	$ 91,417
12 months or longer	192,576	192,576	138,936
Total	204,186	204,186	230,353
Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months	(975)	(975)	(9,096)
12 months or longer	(45,419)	(45,419)	(28,342)
Total	$ (46,394)	$ (46,394)	$ (37,438)
Unrealized Loss Position, Number of Positions [Abstract]
Less than 12 months | Position	1	1	21
12 months or longer | Position	33	33	13
Total | Position	34	34	34
Collateralized Mortgage Obligations [Member]
Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months	$ 8,834	$ 8,834	$ 191,644
12 months or longer	216,125	216,125	48,289
Total	224,959	224,959	239,933
Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months	(134)	(134)	(13,863)
12 months or longer	(31,687)	(31,687)	(10,855)
Total	$ (31,821)	$ (31,821)	$ (24,718)
Unrealized Loss Position, Number of Positions [Abstract]
Less than 12 months | Position	2	2	47
12 months or longer | Position	53	53	8
Total | Position	55	55	55
State & Municipal [Member]
Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months	$ 24,593	$ 24,593	$ 110,727
12 months or longer	164,058	164,058	82,949
Total	188,651	188,651	193,676
Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months	(1,080)	(1,080)	(4,930)
12 months or longer	(28,236)	(28,236)	(19,315)
Total	$ (29,316)	$ (29,316)	$ (24,245)
Unrealized Loss Position, Number of Positions [Abstract]
Less than 12 months | Position	31	31	149
12 months or longer | Position	193	193	76
Total | Position	224	224	225
US Government Agencies Debt Securities and US Government-sponsored Enterprises Debt Securities [Member]
Unrealized Loss Position, Number of Positions [Abstract]
Held-to-maturity debt securities, percentage		66.00%	70.00%

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Allowance for Credit Losses and Credit Quality of Loans, Summary (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Dec. 31, 2022	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Allowance for Credit Losses [Abstract]
Allowance for credit losses	$ 114,601	$ 114,601	$ 100,800	$ 100,400		$ 96,800	$ 93,600	$ 92,000
Percentage of allowance of credit losses	1.19%	1.19%	1.24%
Recorded total loans	$ 9,667,375	$ 9,667,375	$ 8,150,147
Loans purchased with credit deterioration			0
Allowance for credit losses on loans purchased	17	17	3,200
Salisbury Bank [Member]
Allowance for Credit Losses [Abstract]
Loans purchased with credit deterioration	219,500	219,500
Allowance for credit losses on loans purchased	5,800	5,800
Allowance for credit losses at acquisition	14,500
Acquisition-related provision for credit losses	8,800	8,800
Salisbury Bank [Member] | PCD [Member]
Allowance for Credit Losses [Abstract]
Allowance for credit losses at acquisition	5,800
Salisbury Bank [Member] | Non-PCD [Member]
Allowance for Credit Losses [Abstract]
Allowance for credit losses at acquisition	8,800
ASU 2022-02 [Member]
Allowance for Credit Losses [Abstract]
Allowance for credit losses	114,601	114,601	100,152
Loans [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ASU 2022-02 [Member]
Allowance for Credit Losses [Abstract]
Allowance for credit losses			(600)
Accrued Interest Receivable [Member]
Allowance for Credit Losses [Abstract]
Allowance for credit losses	0	0	0
AIR on loans	$ 32,500	$ 32,500	$ 25,000
Financing Receivable, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration]	Other Assets	Other Assets	Other Assets
PPP [Member] | Maximum [Member]
Allowance for Credit Losses [Abstract]
Recorded total loans					$ 1,000
Residential [Member]
Allowance for Credit Losses [Abstract]
Allowance for credit losses	$ 20,607	$ 20,607		15,554		15,534	16,302	18,806
Recorded total loans	2,611,692	2,611,692	$ 2,114,495
Amount of loans purchased		$ 2,400	$ 11,500
Premium on loans purchased		7.01%	1.53%
Residential [Member] | ASU 2022-02 [Member]
Allowance for Credit Losses [Abstract]
Allowance for credit losses	20,607	$ 20,607	$ 14,539
Consumer Loans [Member]
Allowance for Credit Losses [Abstract]
Allowance for credit losses	47,274	47,274		$ 47,883		$ 48,310	$ 44,940	$ 44,253
Recorded total loans	2,195,382	2,195,382	2,099,087
Amount of loans purchased			50,100
Consumer Loans [Member] | ASU 2022-02 [Member]
Allowance for Credit Losses [Abstract]
Allowance for credit losses	$ 47,274	$ 47,274	$ 50,951

XML

Allowance for Credit Losses and Credit Quality of Loans, Allowance for Credit Losses by Portfolio Segments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Activity in allowance for credit losses by portfolio segment [Roll Forward]
Balance, beginning of period	$ 100,400	$ 93,600	$ 100,800	$ 92,000
Allowance for credit loss on PCD acquired loans	5,772
Charge-offs	(6,321)	(4,693)	(17,320)	(13,230)
Recoveries	2,117	3,409		8,560
Provision	12,633	4,484	20,148	9,470
Balance, end of period	114,601	96,800	114,601	96,800
ASU 2022-02 [Member]
Activity in allowance for credit losses by portfolio segment [Roll Forward]
Balance, beginning of period			100,152
Allowance for credit loss on PCD acquired loans			5,772
Charge-offs			(17,320)
Recoveries			5,849
Provision			20,148
Balance, end of period	114,601		114,601
Commercial Loans [Member]
Activity in allowance for credit losses by portfolio segment [Roll Forward]
Balance, beginning of period	36,963	32,358		28,941
Allowance for credit loss on PCD acquired loans	5,300
Charge-offs	(138)	(624)		(1,659)
Recoveries	474	1,282		2,212
Provision	4,121	(60)		3,462
Balance, end of period	46,720	32,956	46,720	32,956
Commercial Loans [Member] | ASU 2022-02 [Member]
Activity in allowance for credit losses by portfolio segment [Roll Forward]
Balance, beginning of period			34,662
Allowance for credit loss on PCD acquired loans			5,300
Charge-offs			(514)
Recoveries			1,112
Provision			6,160
Balance, end of period	46,720		46,720
Consumer Loans [Member]
Activity in allowance for credit losses by portfolio segment [Roll Forward]
Balance, beginning of period	47,883	44,940		44,253
Allowance for credit loss on PCD acquired loans	19
Charge-offs	(6,167)	(3,951)		(11,051)
Recoveries	1,549	1,924		5,693
Provision	3,990	5,397		9,415
Balance, end of period	47,274	48,310	47,274	48,310
Consumer Loans [Member] | ASU 2022-02 [Member]
Activity in allowance for credit losses by portfolio segment [Roll Forward]
Balance, beginning of period			50,951
Allowance for credit loss on PCD acquired loans			19
Charge-offs			(16,346)
Recoveries			4,367
Provision			8,283
Balance, end of period	47,274		47,274
Residential [Member]
Activity in allowance for credit losses by portfolio segment [Roll Forward]
Balance, beginning of period	15,554	16,302		18,806
Allowance for credit loss on PCD acquired loans	453
Charge-offs	(16)	(118)	(460)	(520)
Recoveries	94	203		655
Provision	4,522	(853)		(3,407)
Balance, end of period	20,607	$ 15,534	20,607	$ 15,534
Residential [Member] | ASU 2022-02 [Member]
Activity in allowance for credit losses by portfolio segment [Roll Forward]
Balance, beginning of period			14,539
Allowance for credit loss on PCD acquired loans			453
Charge-offs			(460)
Recoveries			370
Provision			5,705
Balance, end of period	$ 20,607		$ 20,607

XML

Allowance for Credit Losses and Credit Quality of Loans, Past Due Loans (Details) $ in Thousands	Sep. 30, 2023 USD ($) Relationship	Dec. 31, 2022 USD ($) Relationship
Allowance for Credit Losses and Credit Quality of Loans [Abstract]
Individually evaluated loans, number of relationships | Relationship	1	2
Individually evaluated loans, amortized cost	$ 1,900	$ 2,400
Individually evaluated loans, allowance for credit losses	0	0
Past Due and Nonperforming Loans [Abstract]
Nonaccrual	20,736	17,233
Recorded total loans	9,667,375	8,150,147
Loans in non-accrual without an allowance for credit losses	1,900	1,100
Past Due [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	47,299	26,690
31-60 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	39,490	18,155
61-90 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	4,281	4,712
Greater Than 90 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	3,528	3,823
Current [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	9,599,340	8,106,224
C&I [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	1,460,830	1,241,157
CRE [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	3,399,471	2,695,408
Auto [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	1,069,096	962,701
Residential Solar [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	934,082	856,798
Other Consumer [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	192,204	279,588
Commercial Loans [Member]
Past Due and Nonperforming Loans [Abstract]
Nonaccrual	8,413	8,024
Recorded total loans	4,860,301	3,936,565
Commercial Loans [Member] | Past Due [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	20,515	877
Commercial Loans [Member] | 31-60 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	20,398	678
Commercial Loans [Member] | 61-90 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	117	195
Commercial Loans [Member] | Greater Than 90 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	0	4
Commercial Loans [Member] | Current [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	4,831,373	3,927,664
Commercial Loans [Member] | C&I [Member]
Past Due and Nonperforming Loans [Abstract]
Nonaccrual	3,753	2,244
Recorded total loans	1,460,830	1,241,157
Commercial Loans [Member] | C&I [Member] | Past Due [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	836	445
Commercial Loans [Member] | C&I [Member] | 31-60 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	737	342
Commercial Loans [Member] | C&I [Member] | 61-90 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	99	99
Commercial Loans [Member] | C&I [Member] | Greater Than 90 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	0	4
Commercial Loans [Member] | C&I [Member] | Current [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	1,456,241	1,238,468
Commercial Loans [Member] | CRE [Member]
Past Due and Nonperforming Loans [Abstract]
Nonaccrual	4,660	5,780
Recorded total loans	3,399,471	2,695,408
Commercial Loans [Member] | CRE [Member] | Past Due [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	19,679	432
Commercial Loans [Member] | CRE [Member] | 31-60 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	19,661	336
Commercial Loans [Member] | CRE [Member] | 61-90 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	18	96
Commercial Loans [Member] | CRE [Member] | Greater Than 90 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	0	0
Commercial Loans [Member] | CRE [Member] | Current [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	3,375,132	2,689,196
Consumer Loans [Member]
Past Due and Nonperforming Loans [Abstract]
Nonaccrual	2,427	1,667
Recorded total loans	2,195,382	2,099,087
Consumer Loans [Member] | Past Due [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	21,371	21,991
Consumer Loans [Member] | 31-60 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	15,017	14,981
Consumer Loans [Member] | 61-90 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	3,838	3,962
Consumer Loans [Member] | Greater Than 90 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	2,516	3,048
Consumer Loans [Member] | Current [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	2,171,584	2,075,429
Consumer Loans [Member] | Auto [Member]
Past Due and Nonperforming Loans [Abstract]
Nonaccrual	1,652	1,494
Recorded total loans	1,069,096	962,701
Consumer Loans [Member] | Auto [Member] | Past Due [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	10,890	10,818
Consumer Loans [Member] | Auto [Member] | 31-60 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	8,974	8,640
Consumer Loans [Member] | Auto [Member] | 61-90 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	1,402	1,393
Consumer Loans [Member] | Auto [Member] | Greater Than 90 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	514	785
Consumer Loans [Member] | Auto [Member] | Current [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	1,056,554	950,389
Consumer Loans [Member] | Residential Solar [Member]
Past Due and Nonperforming Loans [Abstract]
Nonaccrual	373	79
Recorded total loans	934,082	856,798
Consumer Loans [Member] | Residential Solar [Member] | Past Due [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	4,893	4,063
Consumer Loans [Member] | Residential Solar [Member] | 31-60 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	3,449	2,858
Consumer Loans [Member] | Residential Solar [Member] | 61-90 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	938	731
Consumer Loans [Member] | Residential Solar [Member] | Greater Than 90 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	506	474
Consumer Loans [Member] | Residential Solar [Member] | Current [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	928,816	852,656
Consumer Loans [Member] | Other Consumer [Member]
Past Due and Nonperforming Loans [Abstract]
Nonaccrual	402	94
Recorded total loans	192,204	279,588
Consumer Loans [Member] | Other Consumer [Member] | Past Due [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	5,588	7,110
Consumer Loans [Member] | Other Consumer [Member] | 31-60 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	2,594	3,483
Consumer Loans [Member] | Other Consumer [Member] | 61-90 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	1,498	1,838
Consumer Loans [Member] | Other Consumer [Member] | Greater Than 90 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	1,496	1,789
Consumer Loans [Member] | Other Consumer [Member] | Current [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	186,214	272,384
Residential [Member]
Past Due and Nonperforming Loans [Abstract]
Nonaccrual	9,896	7,542
Recorded total loans	2,611,692	2,114,495
Residential [Member] | Past Due [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	5,413	3,822
Residential [Member] | 31-60 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	4,075	2,496
Residential [Member] | 61-90 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	326	555
Residential [Member] | Greater Than 90 Days Past Due Accruing [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	1,012	771
Residential [Member] | Current [Member]
Past Due and Nonperforming Loans [Abstract]
Recorded total loans	$ 2,596,383	$ 2,103,131

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Allowance for Credit Losses and Credit Quality of Loans, Credit Quality Indicators (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Financing Receivable, Credit Quality Indicator [Line Items]
Minimum number of days past due for loans to be considered nonperforming			90 days
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	$ 1,141,049		$ 1,141,049		$ 1,952,599
2022/2021	2,049,671		2,049,671		1,615,395
2021/2020	1,710,442		1,710,442		1,012,149
2020/2019	1,064,936		1,064,936		774,792
2019/2018	727,875		727,875		518,993
Prior	1,925,646		1,925,646		1,414,638
Revolving Loans Amortized Cost Basis	945,652		945,652		800,156
Revolving Loans Converted to Term	102,104		102,104		61,425
Total	9,667,375		9,667,375		8,150,147
Gross Charge-offs by Loan Class by Vintage [Abstract]
2023			(757)
2022			(4,860)
2021			(7,389)
2020			(1,492)
2019			(1,375)
Prior			(1,447)
Revolving Loans Amortized Cost Basis			0
Revolving Loans Converted to Term			0
Total	(6,321)	$ (4,693)	(17,320)	$ (13,230)
C&I [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	172,952		172,952		297,682
2022/2021	305,142		305,142		253,483
2021/2020	258,741		258,741		169,738
2020/2019	168,118		168,118		94,817
2019/2018	86,463		86,463		40,593
Prior	90,973		90,973		36,800
Revolving Loans Amortized Cost Basis	375,761		375,761		344,748
Revolving Loans Converted to Term	2,680		2,680		3,296
Total	1,460,830		1,460,830		1,241,157
Gross Charge-offs by Loan Class by Vintage [Abstract]
2023			0
2022			(1)
2021			(5)
2020			(65)
2019			0
Prior			(329)
Revolving Loans Amortized Cost Basis			0
Revolving Loans Converted to Term			0
Total			(400)
C&I [Member] | Pass [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	171,431		171,431		296,562
2022/2021	302,023		302,023		252,480
2021/2020	257,555		257,555		164,976
2020/2019	164,254		164,254		91,497
2019/2018	83,519		83,519		39,394
Prior	75,504		75,504		32,413
Revolving Loans Amortized Cost Basis	351,672		351,672		327,166
Revolving Loans Converted to Term	2,666		2,666		3,133
Total	1,408,624		1,408,624		1,207,621
C&I [Member] | Special Mention [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	0		0		1,044
2022/2021	3,110		3,110		524
2021/2020	415		415		4,531
2020/2019	3,494		3,494		194
2019/2018	655		655		1,108
Prior	11,151		11,151		417
Revolving Loans Amortized Cost Basis	10,676		10,676		5,234
Revolving Loans Converted to Term	0		0		0
Total	29,501		29,501		13,052
C&I [Member] | Substandard [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	1,521		1,521		76
2022/2021	8		8		459
2021/2020	705		705		231
2020/2019	312		312		3,098
2019/2018	2,285		2,285		91
Prior	4,317		4,317		3,969
Revolving Loans Amortized Cost Basis	13,413		13,413		12,348
Revolving Loans Converted to Term	14		14		163
Total	22,575		22,575		20,435
C&I [Member] | Doubtful [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	0		0		0
2022/2021	1		1		20
2021/2020	66		66		0
2020/2019	58		58		28
2019/2018	4		4		0
Prior	1		1		1
Revolving Loans Amortized Cost Basis	0		0		0
Revolving Loans Converted to Term	0		0		0
Total	130		130		49
CRE [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	282,579		282,579		375,227
2022/2021	513,117		513,117		466,754
2021/2020	564,984		564,984		442,196
2020/2019	481,900		481,900		340,146
2019/2018	346,642		346,642		223,612
Prior	842,081		842,081		614,625
Revolving Loans Amortized Cost Basis	286,276		286,276		203,126
Revolving Loans Converted to Term	81,892		81,892		29,722
Total	3,399,471		3,399,471		2,695,408
Gross Charge-offs by Loan Class by Vintage [Abstract]
2023			0
2022			0
2021			0
2020			0
2019			(114)
Prior			0
Revolving Loans Amortized Cost Basis			0
Revolving Loans Converted to Term			0
Total			(114)
CRE [Member] | Pass [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	278,517		278,517		374,313
2022/2021	510,690		510,690		465,990
2021/2020	549,056		549,056		439,012
2020/2019	470,616		470,616		333,568
2019/2018	329,634		329,634		217,141
Prior	775,502		775,502		566,783
Revolving Loans Amortized Cost Basis	276,477		276,477		201,563
Revolving Loans Converted to Term	67,162		67,162		24,735
Total	3,257,654		3,257,654		2,623,105
CRE [Member] | Special Mention [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	3,678		3,678		605
2022/2021	2,236		2,236		764
2021/2020	9,041		9,041		868
2020/2019	8,082		8,082		2,641
2019/2018	13,915		13,915		4,649
Prior	21,829		21,829		24,023
Revolving Loans Amortized Cost Basis	8,250		8,250		850
Revolving Loans Converted to Term	0		0		0
Total	67,031		67,031		34,400
CRE [Member] | Substandard [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	384		384		309
2022/2021	191		191		0
2021/2020	6,887		6,887		2,316
2020/2019	3,202		3,202		3,937
2019/2018	3,093		3,093		1,822
Prior	44,750		44,750		23,819
Revolving Loans Amortized Cost Basis	1,549		1,549		713
Revolving Loans Converted to Term	14,730		14,730		4,987
Total	74,786		74,786		37,903
Auto [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	369,321		369,321		489,366
2022/2021	396,174		396,174		239,745
2021/2020	176,700		176,700		76,257
2020/2019	50,154		50,154		100,000
2019/2018	56,647		56,647		44,277
Prior	20,087		20,087		13,056
Revolving Loans Amortized Cost Basis	13		13		0
Revolving Loans Converted to Term	0		0		0
Total	1,069,096		1,069,096		962,701
Gross Charge-offs by Loan Class by Vintage [Abstract]
2023			(75)
2022			(827)
2021			(865)
2020			(283)
2019			(219)
Prior			(243)
Revolving Loans Amortized Cost Basis			0
Revolving Loans Converted to Term			0
Total			(2,512)
Auto [Member] | Performing [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	369,178		369,178		488,776
2022/2021	395,362		395,362		239,090
2021/2020	176,026		176,026		75,853
2020/2019	49,917		49,917		99,615
2019/2018	56,455		56,455		44,061
Prior	19,979		19,979		13,027
Revolving Loans Amortized Cost Basis	13		13		0
Revolving Loans Converted to Term	0		0		0
Total	1,066,930		1,066,930		960,422
Auto [Member] | Nonperforming [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	143		143		590
2022/2021	812		812		655
2021/2020	674		674		404
2020/2019	237		237		385
2019/2018	192		192		216
Prior	108		108		29
Revolving Loans Amortized Cost Basis	0		0		0
Revolving Loans Converted to Term	0		0		0
Total	2,166		2,166		2,279
Residential Solar [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	155,132		155,132		486,262
2022/2021	439,449		439,449		194,069
2021/2020	182,212		182,212		74,582
2020/2019	67,618		67,618		54,687
2019/2018	48,434		48,434		36,135
Prior	41,237		41,237		11,063
Revolving Loans Amortized Cost Basis	0		0		0
Revolving Loans Converted to Term	0		0		0
Total	934,082		934,082		856,798
Gross Charge-offs by Loan Class by Vintage [Abstract]
2023			(121)
2022			(1,244)
2021			(696)
2020			(45)
2019			(447)
Prior			(193)
Revolving Loans Amortized Cost Basis			0
Revolving Loans Converted to Term			0
Total			(2,746)
Residential Solar [Member] | Performing [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	155,132		155,132		485,942
2022/2021	438,855		438,855		193,971
2021/2020	182,153		182,153		74,532
2020/2019	67,562		67,562		54,662
2019/2018	48,362		48,362		36,119
Prior	41,139		41,139		11,019
Revolving Loans Amortized Cost Basis	0		0		0
Revolving Loans Converted to Term	0		0		0
Total	933,203		933,203		856,245
Residential Solar [Member] | Nonperforming [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	0		0		320
2022/2021	594		594		98
2021/2020	59		59		50
2020/2019	56		56		25
2019/2018	72		72		16
Prior	98		98		44
Revolving Loans Amortized Cost Basis	0		0		0
Revolving Loans Converted to Term	0		0		0
Total	879		879		553
Other Consumer [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Overdrawn deposit related to gross charge-offs reported as 2022 originations			200
Overdrawn deposit related to gross charge-offs reported as 2023 originations			500
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	11,221		11,221		52,783
2022/2021	32,303		32,303		111,462
2021/2020	69,474		69,474		36,807
2020/2019	24,299		24,299		27,630
2019/2018	17,373		17,373		15,593
Prior	18,946		18,946		15,822
Revolving Loans Amortized Cost Basis	18,553		18,553		19,226
Revolving Loans Converted to Term	35		35		265
Total	192,204		192,204		279,588
Gross Charge-offs by Loan Class by Vintage [Abstract]
2023			(561)
2022			(2,788)
2021			(5,742)
2020			(1,099)
2019			(595)
Prior			(303)
Revolving Loans Amortized Cost Basis			0
Revolving Loans Converted to Term			0
Total			(11,088)
Other Consumer [Member] | Performing [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	11,221		11,221		52,545
2022/2021	31,813		31,813		110,624
2021/2020	68,732		68,732		36,412
2020/2019	24,152		24,152		27,383
2019/2018	17,234		17,234		15,536
Prior	18,599		18,599		15,735
Revolving Loans Amortized Cost Basis	18,552		18,552		19,218
Revolving Loans Converted to Term	3		3		250
Total	190,306		190,306		277,703
Other Consumer [Member] | Nonperforming [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	0		0		238
2022/2021	490		490		838
2021/2020	742		742		395
2020/2019	147		147		247
2019/2018	139		139		57
Prior	347		347		87
Revolving Loans Amortized Cost Basis	1		1		8
Revolving Loans Converted to Term	32		32		15
Total	1,898		1,898		1,885
Residential [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	149,844		149,844		251,279
2022/2021	363,486		363,486		349,882
2021/2020	458,331		458,331		212,569
2020/2019	272,847		272,847		157,512
2019/2018	172,316		172,316		158,783
Prior	912,322		912,322		723,272
Revolving Loans Amortized Cost Basis	265,049		265,049		233,056
Revolving Loans Converted to Term	17,497		17,497		28,142
Total	2,611,692		2,611,692		2,114,495
Gross Charge-offs by Loan Class by Vintage [Abstract]
2023			0
2022			0
2021			(81)
2020			0
2019			0
Prior			(379)
Revolving Loans Amortized Cost Basis			0
Revolving Loans Converted to Term			0
Total	(16)	$ (118)	(460)	$ (520)
Residential [Member] | Performing [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	149,700		149,700		251,012
2022/2021	363,044		363,044		349,498
2021/2020	457,105		457,105		212,161
2020/2019	272,533		272,533		156,957
2019/2018	171,854		171,854		157,755
Prior	904,002		904,002		717,621
Revolving Loans Amortized Cost Basis	265,049		265,049		233,056
Revolving Loans Converted to Term	17,497		17,497		28,122
Total	2,600,784		2,600,784		2,106,182
Residential [Member] | Nonperforming [Member]
Credit Quality by Loan Class by Vintage [Abstract]
2023/2022	144		144		267
2022/2021	442		442		384
2021/2020	1,226		1,226		408
2020/2019	314		314		555
2019/2018	462		462		1,028
Prior	8,320		8,320		5,651
Revolving Loans Amortized Cost Basis	0		0		0
Revolving Loans Converted to Term	0		0		20
Total	$ 10,908		$ 10,908		$ 8,313

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Allowance for Credit Losses and Credit Quality of Loans, Allowance for Credit Losses on Off-Balance Sheet Credit Exposures (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Allowance for Credit Losses and Credit Quality of Loans [Abstract]
Allowance for credit losses	$ 114,601	$ 100,400	$ 100,800	$ 96,800	$ 93,600	$ 92,000
Unfunded Commitment [Member]
Allowance for Credit Losses and Credit Quality of Loans [Abstract]
Allowance for credit losses	4,800		$ 5,100
Acquisition-related provision for credit losses	$ 800

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Allowance for Credit Losses and Credit Quality of Loans, Amortized Cost Basis of Loans Modified to Borrowers Experiencing Financial Difficulty (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Interest Rate Reduction [Member]
Modified Loans Disaggregated by Class of Financing Receivable and Type of Concession Granted [Abstract]
Amortized cost	$ 31	$ 31
Term Extension [Member]
Modified Loans Disaggregated by Class of Financing Receivable and Type of Concession Granted [Abstract]
Amortized cost	145	386
Combination - Term Extension and Interest Rate Reduction [Member]
Modified Loans Disaggregated by Class of Financing Receivable and Type of Concession Granted [Abstract]
Amortized cost	0	165
Residential [Member] | Interest Rate Reduction [Member]
Modified Loans Disaggregated by Class of Financing Receivable and Type of Concession Granted [Abstract]
Amortized cost	$ 31	$ 31
% of total class of financing receivables	0.001%	0.001%
Residential [Member] | Term Extension [Member]
Modified Loans Disaggregated by Class of Financing Receivable and Type of Concession Granted [Abstract]
Amortized cost	$ 145	$ 386
% of total class of financing receivables	0.006%	0.015%
Residential [Member] | Combination - Term Extension and Interest Rate Reduction [Member]
Modified Loans Disaggregated by Class of Financing Receivable and Type of Concession Granted [Abstract]
Amortized cost	$ 0	$ 165
% of total class of financing receivables	0.00%	0.006%

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Allowance for Credit Losses and Credit Quality of Loans, Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Term Extension [Member]
Financing Receivable Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty [Abstract]
Decrease in weighted average contractual interest rate	1.00%
Combination - Term Extension and Interest Rate Reduction [Member]
Financing Receivable Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty [Abstract]
Decrease in weighted average contractual interest rate		2.25%
Residential [Member] | Term Extension [Member]
Financing Receivable Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty [Abstract]
Period of increase in weighted-average maturity	17 years
Residential [Member] | Combination - Term Extension and Interest Rate Reduction [Member]
Financing Receivable Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty [Abstract]
Period of increase in weighted-average maturity		15 years

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Allowance for Credit Losses and Credit Quality of Loans, Financing Receivables with Payment Default that Were Modified to Borrowers Experiencing Financial Difficulty (Details) - Interest Rate Reduction [Member] - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Amortized Cost Basis of Modified Financing Receivables that Subsequently Defaulted [Abstract]
Total	$ 31	$ 31
Residential [Member]
Amortized Cost Basis of Modified Financing Receivables that Subsequently Defaulted [Abstract]
Total	$ 31	$ 31

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Allowance for Credit Losses and Credit Quality of Loans, Performance of Modified Loans (Details) - ASU 2022-02 [Member] - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Current [Member]
Performance of Modified Loans [Abstract]
Amortized cost	$ 145	$ 549
31-60 Days Past Due [Member]
Performance of Modified Loans [Abstract]
Amortized cost	31	31
61-90 Days Past Due [Member]
Performance of Modified Loans [Abstract]
Amortized cost	0	0
Greater Than 90 Days Past Due [Member]
Performance of Modified Loans [Abstract]
Amortized cost	0	0
Residential [Member] | Current [Member]
Performance of Modified Loans [Abstract]
Amortized cost	145	549
Residential [Member] | 31-60 Days Past Due [Member]
Performance of Modified Loans [Abstract]
Amortized cost	31	31
Residential [Member] | 61-90 Days Past Due [Member]
Performance of Modified Loans [Abstract]
Amortized cost	0	0
Residential [Member] | Greater Than 90 Days Past Due [Member]
Performance of Modified Loans [Abstract]
Amortized cost	$ 0	$ 0

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Allowance for Credit Losses and Credit Quality of Loans, Troubled Debt Restructuring (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022 USD ($) Contract	Sep. 30, 2022 USD ($) Contract
Recorded Investment and Number of Modifications Designated as TDRs [Abstract]
Number of contracts | Contract	6	10
Pre-modification outstanding recorded investment	$ 613	$ 829
Post-modification outstanding recorded investment	$ 682	$ 928
Recorded Investment and Number of Modifications for TDRs Where a Concession Has Been Made and Subsequently Defaulted [Abstract]
Number of contracts | Contract	19	46
Recorded investment	$ 1,189	$ 2,651
Commercial Loans [Member]
Recorded Investment and Number of Modifications for TDRs Where a Concession Has Been Made and Subsequently Defaulted [Abstract]
Number of contracts | Contract	1	1
Recorded investment	$ 320	$ 320
Commercial Loans [Member] | C&I [Member]
Recorded Investment and Number of Modifications for TDRs Where a Concession Has Been Made and Subsequently Defaulted [Abstract]
Number of contracts | Contract	1	1
Recorded investment	$ 320	$ 320
Consumer Loans [Member]
Recorded Investment and Number of Modifications for TDRs Where a Concession Has Been Made and Subsequently Defaulted [Abstract]
Number of contracts | Contract	0	1
Recorded investment	$ 0	$ 11
Consumer Loans [Member] | Auto [Member]
Recorded Investment and Number of Modifications for TDRs Where a Concession Has Been Made and Subsequently Defaulted [Abstract]
Number of contracts | Contract	0	1
Recorded investment	$ 0	$ 11
Residential [Member]
Recorded Investment and Number of Modifications Designated as TDRs [Abstract]
Number of contracts | Contract	6	10
Pre-modification outstanding recorded investment	$ 613	$ 829
Post-modification outstanding recorded investment	$ 682	$ 928
Recorded Investment and Number of Modifications for TDRs Where a Concession Has Been Made and Subsequently Defaulted [Abstract]
Number of contracts | Contract	18	44
Recorded investment	$ 869	$ 2,320

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Defined Benefit Post-Retirement Plans (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Defined Benefit Post-Retirement Plans [Abstract]
Employer contributions	$ 0	$ 0	$ 0	$ 0
Pension Benefits [Member]
Components of net periodic cost (benefit) [Abstract]
Service cost	476	506	1,440	1,574
Interest cost	999	690	3,019	2,078
Expected return on plan assets	(1,844)	(2,220)	(5,550)	(6,676)
Net amortization	669	183	2,009	553
Net periodic pension cost (benefit)	300	(841)	918	(2,471)
Other Benefits [Member]
Components of net periodic cost (benefit) [Abstract]
Service cost	1	2	3	6
Interest cost	56	42	168	124
Expected return on plan assets	0	0	0	0
Net amortization	(21)	2	(63)	4
Net periodic pension cost (benefit)	$ 36	$ 46	$ 108	$ 134

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Basic EPS [Abstract]
Weighted average common shares outstanding (in shares)	45,163	42,838	43,662	42,940
Net income available to common stockholders	$ 24,606	$ 38,973	$ 88,336	$ 115,874
Basic EPS (in dollars per share)	$ 0.54	$ 0.91	$ 2.02	$ 2.7
Diluted EPS [Abstract]
Weighted average common shares outstanding (in shares)	45,163	42,838	43,662	42,940
Dilutive effect of common stock options and restricted stock (in shares)	236	273	234	254
Weighted average common shares and common share equivalents (in shares)	45,399	43,111	43,896	43,194
Net income available to common stockholders	$ 24,606	$ 38,973	$ 88,336	$ 115,874
Diluted EPS (in dollars per share)	$ 0.54	$ 0.9	$ 2.01	$ 2.68
Anti-dilutive stock options and restricted stock outstanding (in shares)	27	2	25	2

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Reclassification Adjustments Out of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Reclassification Adjustment out of AOCI [Abstract]
Net securities (gains) losses	$ (183)	$ (148)	$ (9,822)	$ (914)
Interest income (expense)	94,895	94,478	279,046	262,411
Other noninterest expense	6,514	5,021	17,284	13,815
Income tax (benefit)	7,095	11,499	25,339	33,598
Net income	24,606	38,973	88,336	115,874
Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of AOCI [Abstract]
Total reclassifications during the period, net of tax	565	232	8,792	712
Accumulated Net Unrealized Investment Gain (Loss) [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of AOCI [Abstract]
Income tax (benefit)	(26)	(31)	(2,445)	(98)
Net income	79	94	7,333	295
Losses on AFS Securities [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of AOCI [Abstract]
Net securities (gains) losses			9,450	0
Amortization of Unrealized Gains Related to Securities Transfer [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of AOCI [Abstract]
Interest income (expense)	105	125	328	393
Accumulated Defined Benefit Plans Adjustment [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of AOCI [Abstract]
Income tax (benefit)	(162)	(47)	(487)	(140)
Net income	486	138	1,459	417
Amortization of Net Losses [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of AOCI [Abstract]
Other noninterest expense	638	156	1,918	470
Amortization of Prior Service Costs [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of AOCI [Abstract]
Other noninterest expense	$ 10	$ 29	$ 28	$ 87

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Derivative Instruments and Hedging Activities (Details) - Derivatives Not Designated as Hedging Instruments [Member] $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2023 USD ($) Agreement	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) Agreement	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($) Agreement
Derivative Asset [Abstract]
Derivatives, fair value		$ 143,723		$ 143,723		$ 117,294
Netting adjustments, fair value	[1]	30,583		30,583		24,109
Net derivatives in the balance sheet, fair value		113,140		113,140		93,185
Derivatives not offset on the balance sheet, fair value		143		143		352
Cash collateral, fair value	[2]	0		0		0
Net derivative amounts, fair value		112,997		112,997		92,833
Derivative Liability [Abstract]
Derivatives, fair value		143,599		143,599		117,257
Netting adjustments, fair value	[1]	0		0		0
Net derivatives in the balance sheet, fair value		143,599		143,599		117,257
Derivatives not offset on the balance sheet, fair value		143		143		352
Cash collateral, fair value	[2]	0		0		0
Net derivative amounts, fair value		143,456		143,456		$ 116,905
Other Income [Member]
Gain or loss recognized in income on derivatives not designating as a hedging relationship [Abstract]
Increase (decrease) in other income		$ (65)	$ (33)	$ (65)	$ (152)
Interest Rate Swaps [Member]
Interest rate derivatives [Abstract]
Number of risk participation agreements held | Agreement		12		12		15
Interest Rate Swaps [Member] | Other Assets [Member]
Derivative Asset [Abstract]
Derivatives, notional amount		$ 1,304,523		$ 1,304,523		$ 1,275,708
Derivatives, fair value		143,716		143,716		117,247
Interest Rate Swaps [Member] | Other Liabilities [Member]
Derivative Liability [Abstract]
Derivatives, notional amount		1,304,523		1,304,523		1,275,708
Derivatives, fair value		143,596		143,596		117,247
Risk Participation Agreements [Member] | Other Assets [Member]
Derivative Asset [Abstract]
Derivatives, notional amount		62,467		62,467		88,963
Derivatives, fair value		7		7		47
Risk Participation Agreements [Member] | Other Liabilities [Member]
Derivative Liability [Abstract]
Derivatives, notional amount		16,716		16,716		18,421
Derivatives, fair value		$ 3		$ 3		$ 10

[1] Netting adjustments represents the amounts recorded to convert derivatives assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance on the settle to market rules for cleared derivatives. The CME legally characterizes the variation margin posted between counterparties as settlements of the outstanding derivative contracts instead of cash collateral.

[2] Cash collateral represents the amount that cannot be used to offset our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The other collateral consists of securities and is exchanged under bilateral collateral and master netting agreements that allow us to offset the net derivative position with the related collateral. The application of the other collateral cannot reduce the net derivative position below zero. Therefore, excess other collateral, if any, is not reflected above.

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Fair Value Measurements and Fair Value of Financial Instruments, Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
AFS securities [Abstract]
AFS securities	$ 1,399,032	$ 1,527,225
Equity securities	$ 35,600	30,784
Minimum [Member]
Fair Value Measurements [Abstract]
Liquidation expense ratio on impaired collateral	10.00%
Maximum [Member]
Fair Value Measurements [Abstract]
Liquidation expense ratio on impaired collateral	50.00%
U.S. Treasury [Member]
AFS securities [Abstract]
AFS securities	$ 121,595	121,658
Federal Agency [Member]
AFS securities [Abstract]
AFS securities	203,756	206,419
State & Municipal [Member]
AFS securities [Abstract]
AFS securities	83,285	82,851
Corporate [Member]
AFS securities [Abstract]
AFS securities	41,217	54,240
Recurring Basis [Member]
AFS securities [Abstract]
AFS securities	1,399,032	1,527,225
Equity securities	35,600	30,784
Derivatives	$ 113,140	$ 93,185
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Other Assets	Other Assets
Total	$ 1,547,772	$ 1,651,194
Liabilities [Abstract]
Derivatives	$ 143,599	$ 117,257
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Other liabilities	Other liabilities
Total	$ 143,599	$ 117,257
Recurring Basis [Member] | Level 1 [Member]
AFS securities [Abstract]
AFS securities	121,595	121,658
Equity securities	34,600	29,784
Derivatives	0	0
Total	156,195	151,442
Liabilities [Abstract]
Derivatives	0	0
Total	0	0
Recurring Basis [Member] | Level 2 [Member]
AFS securities [Abstract]
AFS securities	1,277,437	1,405,567
Equity securities	1,000	1,000
Derivatives	113,140	93,185
Total	1,391,577	1,499,752
Liabilities [Abstract]
Derivatives	143,599	117,257
Total	143,599	117,257
Recurring Basis [Member] | Level 3 [Member]
AFS securities [Abstract]
AFS securities	0	0
Equity securities	0	0
Derivatives	0	0
Total	0	0
Liabilities [Abstract]
Derivatives	0	0
Total	0	0
Recurring Basis [Member] | U.S. Treasury [Member]
AFS securities [Abstract]
AFS securities	121,595	121,658
Recurring Basis [Member] | U.S. Treasury [Member] | Level 1 [Member]
AFS securities [Abstract]
AFS securities	121,595	121,658
Recurring Basis [Member] | U.S. Treasury [Member] | Level 2 [Member]
AFS securities [Abstract]
AFS securities	0	0
Recurring Basis [Member] | U.S. Treasury [Member] | Level 3 [Member]
AFS securities [Abstract]
AFS securities	0	0
Recurring Basis [Member] | Federal Agency [Member]
AFS securities [Abstract]
AFS securities	203,756	206,419
Recurring Basis [Member] | Federal Agency [Member] | Level 1 [Member]
AFS securities [Abstract]
AFS securities	0	0
Recurring Basis [Member] | Federal Agency [Member] | Level 2 [Member]
AFS securities [Abstract]
AFS securities	203,756	206,419
Recurring Basis [Member] | Federal Agency [Member] | Level 3 [Member]
AFS securities [Abstract]
AFS securities	0	0
Recurring Basis [Member] | State & Municipal [Member]
AFS securities [Abstract]
AFS securities	83,285	82,851
Recurring Basis [Member] | State & Municipal [Member] | Level 1 [Member]
AFS securities [Abstract]
AFS securities	0	0
Recurring Basis [Member] | State & Municipal [Member] | Level 2 [Member]
AFS securities [Abstract]
AFS securities	83,285	82,851
Recurring Basis [Member] | State & Municipal [Member] | Level 3 [Member]
AFS securities [Abstract]
AFS securities	0	0
Recurring Basis [Member] | Mortgage-Backed [Member]
AFS securities [Abstract]
AFS securities	415,768	473,694
Recurring Basis [Member] | Mortgage-Backed [Member] | Level 1 [Member]
AFS securities [Abstract]
AFS securities	0	0
Recurring Basis [Member] | Mortgage-Backed [Member] | Level 2 [Member]
AFS securities [Abstract]
AFS securities	415,768	473,694
Recurring Basis [Member] | Mortgage-Backed [Member] | Level 3 [Member]
AFS securities [Abstract]
AFS securities	0	0
Recurring Basis [Member] | Collateralized Mortgage Obligations [Member]
AFS securities [Abstract]
AFS securities	533,411	588,363
Recurring Basis [Member] | Collateralized Mortgage Obligations [Member] | Level 1 [Member]
AFS securities [Abstract]
AFS securities	0	0
Recurring Basis [Member] | Collateralized Mortgage Obligations [Member] | Level 2 [Member]
AFS securities [Abstract]
AFS securities	533,411	588,363
Recurring Basis [Member] | Collateralized Mortgage Obligations [Member] | Level 3 [Member]
AFS securities [Abstract]
AFS securities	0	0
Recurring Basis [Member] | Corporate [Member]
AFS securities [Abstract]
AFS securities	41,217	54,240
Recurring Basis [Member] | Corporate [Member] | Level 1 [Member]
AFS securities [Abstract]
AFS securities	0	0
Recurring Basis [Member] | Corporate [Member] | Level 2 [Member]
AFS securities [Abstract]
AFS securities	41,217	54,240
Recurring Basis [Member] | Corporate [Member] | Level 3 [Member]
AFS securities [Abstract]
AFS securities	0	0
Non-Recurring Basis [Member]
Fair Value Measurements [Abstract]
Loans individually evaluated for expected credit losses, fair value	$ 1,900	$ 1,100

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Fair Value Measurements and Fair Value of Financial Instruments, Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financial assets [Abstract]
HTM securities	$ 783,986	$ 812,647
Carrying Amount [Member] | Level 1 [Member]
Financial liabilities [Abstract]
Subordinated debt	120,061	98,000
Carrying Amount [Member] | Level 2 [Member]
Financial assets [Abstract]
HTM securities	914,520	919,517
Financial liabilities [Abstract]
Time deposits	1,344,199	433,772
Long-term debt	29,834	4,815
Junior subordinated debt	101,196	101,196
Carrying Amount [Member] | Level 3 [Member]
Financial assets [Abstract]
Net loans	9,556,887	8,049,909
Estimated Fair Value [Member] | Level 1 [Member]
Financial liabilities [Abstract]
Subordinated debt	110,057	92,883
Estimated Fair Value [Member] | Level 2 [Member]
Financial assets [Abstract]
HTM securities	783,986	812,647
Financial liabilities [Abstract]
Time deposits	1,301,989	413,868
Long-term debt	29,114	4,539
Junior subordinated debt	99,259	98,372
Estimated Fair Value [Member] | Level 3 [Member]
Financial assets [Abstract]
Net loans	$ 9,097,545	$ 7,840,350

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Commitments and Contingencies (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Guarantor Obligations [Abstract]
Obligation instrument term	1 year
Commitment to Extend Credits and Unused Lines of Credit [Member]
Guarantor Obligations [Abstract]
Commitments - maximum potential obligation	$ 2,710.0	$ 2,420.0
Standby Letters of Credit [Member]
Guarantor Obligations [Abstract]
Commitments - maximum potential obligation	$ 40.5	$ 53.3