Cover - USD ($)	12 Months Ended
Cover - USD ($)	Dec. 31, 2022	Mar. 02, 2023	Jun. 30, 2022
Document Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-39472
Entity Registrant Name	CNB FINANCIAL CORP/PA
Entity Incorporation, State or Country Code	PA
Entity Tax Identification Number	25-1450605
Entity Address, Address Line One	1 South Second Street
Entity Address, Address Line Two	P.O. Box 42
Entity Address, City or Town	Clearfield
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	16830
City Area Code	814
Local Phone Number	765-9621
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 382,432,095
Entity Common Stock, Shares Outstanding (in shares)		21,116,970
Documents Incorporated by Reference	Portions of the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders to be held on April 18, 2023 are incorporated by reference into Part III of this report.
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Entity Central Index Key	0000736772
Common Stock
Document Information [Line Items]
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	CCNE
Security Exchange Name	NASDAQ
Series A Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	Depositary Shares (each representing a 1/40th interest in a share of 7.125% Series A Non-Cumulative, perpetual preferred stock)
Trading Symbol	CCNEP
Security Exchange Name	NASDAQ

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Audit Information [Abstract]
Auditor Name	FORVIS, LLP	Crowe LLP	Crowe LLP
Auditor Location	Indianapolis, IN	Columbus, OH	Columbus, OH
Auditor Firm ID	686	173	173

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
ASSETS
Cash and due from banks	$ 58,884	$ 42,440
Interest-bearing deposits with Federal Reserve	43,401	684,306
Interest-bearing deposits with other financial institutions	4,000	5,452
Total cash and cash equivalents	106,285	732,198
Debt securities available-for-sale, at fair value (amortized cost of $432,992 as of December 31, 2022 and $698,085 as of December 31, 2021)	371,409	697,191
Debt securities held-to-maturity, at amortized cost (fair value $367,388 as of December 31, 2022 and $—, as of December 31, 2021)	404,765	0
Equity securities	9,615	10,366
Loans held for sale	231	849
Loans receivable	4,275,178	3,634,792
Less: allowance for credit losses	(43,436)	(37,588)
Net loans receivable	4,231,742	3,597,204
FHLB and other restricted stock holdings and investments	30,715	23,276
Premises and equipment, net	68,535	61,659
Operating lease right-of-use assets	32,307	19,928
Bank owned life insurance	111,523	99,719
Mortgage servicing rights	1,804	1,664
Goodwill	43,749	43,749
Core deposit intangible	364	460
Accrued interest receivable and other assets	62,135	40,676
Total Assets	5,475,179	5,328,939
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing demand deposits	898,437	792,086
Interest-bearing demand deposits	1,007,202	1,079,336
Savings	2,270,337	2,457,745
Certificates of deposit	446,461	386,452
Total deposits	4,622,437	4,715,619
Short-term borrowings	132,396	0
Subordinated debentures	20,620	20,620
Subordinated notes, net of unamortized issuance costs	83,964	83,661
Operating lease liabilities	33,726	21,159
Accrued interest payable and other liabilities	51,274	45,033
Total liabilities	4,944,417	4,886,092
Commitments and contingent liabilities
Preferred stock, Series A non-cumulative perpetual, No par value; $1,000 liquidation preference; shares authorized 60,375; Shares issued 60,375 at December 31, 2022 and 60,375 at December 31, 2021	57,785	57,785
Common stock, no par value; 50,000,000 shares authorized; Shares issued 21,121,346 shares at December 31, 2022 and 16,978,057 at December 31, 2021	0	0
Additional paid in capital	221,553	127,351
Retained earnings	306,911	260,582
Treasury stock, at cost (114,157 shares at December 31, 2022 and 122,995 shares at December 31, 2021)	(2,967)	(2,477)
Accumulated other comprehensive loss	(52,520)	(394)
Total shareholders’ equity	530,762	442,847
Total Liabilities and Shareholders’ Equity	5,475,179	5,328,939
PPP loans, net of deferred processing fees
ASSETS
Loans receivable	159	45,203
Syndicated loans
ASSETS
Loans receivable	156,649	125,761
Loans
ASSETS
Loans receivable	$ 4,118,370	$ 3,463,828

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Debt securities, available-for-sale, amortized cost	$ 432,992,000	$ 698,085,000
Debt securities held-to-maturity	$ 367,388,000	$ 0
Preferred Stock, par value (in dollars per share)	$ 0	$ 0
Preferred stock, liquidation preference	$ 1,000	$ 1,000
Preferred stock, shares authorized (in shares)	60,375	60,375
Preferred stock, shares issued (in shares)	60,375	60,375
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	21,121,346	16,978,057
Treasury stock, shares (in shares)	114,157	122,995

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans	$ 194,149	$ 157,799	$ 147,547
Processing fees on PPP loans	1,889	8,737	5,140
Securities and cash and cash equivalents:
Taxable	16,672	11,680	12,362
Tax-exempt	871	1,125	1,441
Dividends	157	259	677
Total interest and dividend income	213,738	179,600	167,167
INTEREST EXPENSE:
Deposits	19,833	15,062	24,142
Borrowed funds and finance lease liabilities	389	23	4,534
Subordinated debentures (includes $127, $276, and $224 accumulated other comprehensive income reclassification for change in fair value of interest rate swap agreements, respectively)	3,857	4,735	3,780
Total interest expense	24,079	19,820	32,456
NET INTEREST INCOME	189,659	159,780	134,711
PROVISION FOR CREDIT LOSS EXPENSE	8,589	6,003	15,354
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSS EXPENSE	181,070	153,777	119,357
NON-INTEREST INCOME:
Service charges on deposit accounts	7,206	6,195	5,095
Other service charges and fees	3,196	2,436	2,548
Wealth and asset management fees	7,172	6,740	5,497
Net realized gains on available-for-sale securities (includes $651, $783, and $2,190 accumulated other comprehensive income reclassifications for net realized gains on available-for-sale securities, respectively)	651	783	2,190
Net realized gains on equity securities	0	0	75
Net unrealized gains on equity securities	(1,149)	790	253
Mortgage banking	1,237	3,147	3,354
Bank owned life insurance	3,433	2,638	1,747
Card processing and interchange income	7,797	7,796	5,727
Other non-interest income	5,223	2,909	1,573
Total non-interest income	34,766	33,434	28,059
NON-INTEREST EXPENSES:
Compensation and benefits (includes $(113), $(43), and $— accumulated other comprehensive income reclassifications for net amortization of actuarial (gains) losses, respectively)	71,460	61,175	48,723
Net occupancy expense	13,298	12,381	12,333
Technology expense	17,041	11,723	7,153
State and local taxes	4,078	4,057	3,340
Legal, professional and examination fees	4,173	3,517	2,990
Advertising	2,887	2,081	1,993
FDIC insurance	2,796	2,509	2,414
Card processing and interchange expenses	4,801	3,836	3,135
Other non-interest expenses	17,088	15,154	12,603
Merger costs, prepayment penalties and branch closure costs	0	0	12,642
Total non-interest expenses	137,622	116,433	107,326
INCOME BEFORE INCOME TAXES	78,214	70,778	40,090
INCOME TAX EXPENSE (includes $134, $116, and $413 income tax expense reclassification items, respectively)	15,026	13,071	7,347
NET INCOME	63,188	57,707	32,743
PREFERRED STOCK DIVIDENDS	4,302	4,302	1,147
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$ 58,886	$ 53,405	$ 31,596
PER COMMON SHARE DATA:
Basic Earnings Per Common Share (in dollars per share)	$ 3.26	$ 3.16	$ 1.97
Diluted Earnings Per Common Share (in dollars per share)	3.26	3.16	1.97
Cash Dividends Declared (in dollars per share)	$ 0.700	$ 0.685	$ 0.680
OTHER COMPREHENSIVE INCOME (LOSS):
Net change in unrealized gains (losses) on available-for-sale securities, net of reclassification and tax	$ (53,576)	$ (16,044)	$ 8,140
Amortization of unrealized gains from held-to-maturity securities, net of tax	875	0	0
Change in actuarial gain, for post-employment health care plan, net of amortization and tax	150	275	219
Change in fair value of interest rate swap agreements designated as a cash flow hedge, net of interest and tax	425	301	(224)
Total other comprehensive income (loss)	(52,126)	(15,468)	8,135
COMPREHENSIVE INCOME	$ 11,062	$ 42,239	$ 40,878

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Statement [Abstract]
Accumulated other comprehensive income reclassification for change in fair value of interest rate swap agreements	$ 127	$ 276	$ 224
Accumulated other comprehensive income reclassifications for net realized gains on available-for-sale securities	651	783	2,190
Accumulated other comprehensive income reclassifications on employee benefits	(113)	(43)	0
Income tax expense	$ 134	$ 116	$ 413

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY - USD ($) $ in Thousands	Total	Impact of CECL Adoption	Preferred Stock	Additional Paid-In Capital	Retained Earnings	Retained Earnings Impact of CECL Adoption	Treasury Stock	Accumulated Other Comprehensive Income (Loss)	Restricted Stock	Restricted Stock Treasury Stock	Performance Based Restricted Stock Awards	Performance Based Restricted Stock Awards Treasury Stock
Beginning balance at Dec. 31, 2019	$ 304,966	$ (3,391)	$ 0	$ 99,335	$ 201,503	$ (3,391)	$ (2,811)	$ 6,939
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	32,743				32,743
Other comprehensive income (loss)	8,135							8,135
Restricted stock award grants	0			(934)			934
Performance based restricted stock award grants	0			(217)			217
Stock-based compensation expense	1,410			1,410
Issuance of common stock, net of issuance costs	3,257			3,257
Purchase of treasury stock	(981)						(981)
Purchase of treasury stock for the purpose of tax withholding									$ (213)	$ (213)	$ (113)	$ (113)
Issuance of preferred equity, net of issuance costs	57,785		57,785
Acquisition of Bank of Akron	24,667			24,667
Preferred cash dividend declared	(1,147)				(1,147)
Common cash dividends declared	(10,981)				(10,981)
Ending balance at Dec. 31, 2020	416,137		57,785	127,518	218,727		(2,967)	15,074
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	57,707				57,707
Other comprehensive income (loss)	(15,468)							(15,468)
Forfeiture of restricted stock award grants	0			64			(64)
Restricted stock award grants	0			(1,374)			1,374
Performance based restricted stock award grants	0			(262)			262
Stock-based compensation expense	1,411			1,411
Contribution of stock from treasury stock	0			(81)			81
Stock-based contribution expense	75			75
Purchase of treasury stock	(1,000)						(1,000)
Purchase of treasury stock for the purpose of tax withholding									(143)	(143)	(20)	(20)
Preferred cash dividend declared	(4,302)				(4,302)
Common cash dividends declared	(11,550)				(11,550)
Ending balance at Dec. 31, 2021	442,847		57,785	127,351	260,582		(2,477)	(394)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	63,188				63,188
Other comprehensive income (loss)	(52,126)							(52,126)
Forfeiture of restricted stock award grants	0			36			(36)
Restricted stock award grants	0			(1,000)			1,000
Performance based restricted stock award grants	0			(173)			173
Stock-based compensation expense	1,248			1,248
Contribution of stock from treasury stock	0			(44)			44
Stock-based contribution expense	84			84
Issuance of common stock, net of issuance costs	94,051			94,051
Purchase of treasury stock	(1,342)						(1,342)
Purchase of treasury stock for the purpose of tax withholding									$ (203)	$ (203)	$ (126)	$ (126)
Preferred cash dividend declared	(4,302)				(4,302)
Common cash dividends declared	(12,557)				(12,557)
Ending balance at Dec. 31, 2022	$ 530,762		$ 57,785	$ 221,553	$ 306,911		$ (2,967)	$ (52,520)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Forfeiture of restricted stock award grants (in shares)	1,440	2,669
Restricted stock award grants (in shares)	57,823	55,218	36,968
Performance based restricted stock award grants (in shares)	11,895	10,587	8,351
Contribution of treasury stock (in shares)	3,000	3,000
Issuance of common stock, net of issuance costs (in shares)	4,257,446		115,790
Purchase of treasury stock (in shares)	50,166	36,359	66,600
Cash dividends declared (in dollars per share)	$ 0.70	$ 685	$ 0.68
Impact of CECL Adoption
Accounting Standards Update [Extensible Enumeration]				ASU No. 2016-13
Restricted Stock
Purchase of treasury stock (in shares)	7,568	6,782	7,349
Performance Based Restricted Stock Awards
Purchase of treasury stock (in shares)	4,706	941	3,458

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 63,188	$ 57,707	$ 32,743
Adjustments to reconcile net income to net cash provided by operations:
Provision for credit loss expense	8,589	6,003	15,354
Depreciation and amortization of premises and equipment, operating leases assets, core deposit intangible, and mortgage servicing rights	6,573	6,241	6,082
Accretion of securities, deferred loan fees and costs, net yield and credit mark on acquired loans, and unearned income	(3,316)	(2,127)	(1,955)
Net amortization of deferred costs on borrowings	303	177	0
Accretion of deferred PPP processing fees	(1,889)	(8,737)	(5,140)
Deferred tax (benefit) expense	(1,814)	(1,691)	1,390
Net realized gains on sales of available-for-sale securities	(651)	(783)	(2,190)
Net realized and unrealized losses (gains) on equity securities	1,149	(790)	(328)
Gain on sale of loans held for sale	(1,285)	(2,737)	(2,961)
Net (gains) losses on dispositions of premises and equipment and foreclosed assets	(170)	230	1,097
Proceeds from sale of loans receivable	29,151	95,258	82,619
Origination of loans held for sale	(34,181)	(95,411)	(87,528)
Income on bank owned life insurance	(2,550)	(2,184)	(1,747)
Gain on bank owned life insurance (death benefit proceeds in excess of cash surrender value)	(883)	(454)	0
Restricted stock compensation expense	1,248	1,411	1,410
Stock-based contribution expense	84	75	0
Changes in:
Accrued interest receivable and other assets	(19,065)	(1,056)	(6,242)
Accrued interest payable, lease liabilities, and other liabilities	19,572	7,788	(3,846)
NET CASH PROVIDED BY OPERATING ACTIVITIES	64,053	58,920	28,758
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities, prepayments and calls of available-for-sale securities	70,033	170,962	164,488
Proceeds from sales of available-for-sale securities	22,164	33,553	57,185
Proceeds from sale of equity securities	0	0	5,935
Purchase of available-for-sale securities	(48,433)	(341,140)	(224,080)
Proceeds from maturities, prepayments and calls of held-to-maturity securities	23,995	0	0
Purchases of held-to-maturity securities	(213,853)	0	0
Purchase of equity securities	(398)	(407)	(2,447)
Proceeds from loans held for sale previously classified as portfolio loans	0	1,921	0
Net increase in loans receivable	(630,605)	(246,043)	(244,903)
Purchase of bank owned life insurance	(11,644)	(22,000)	0
Proceeds from death benefit of bank owned life insurance policies	3,273	1,390	0
Net cash from business combinations	0	0	72,852
Redemption (purchase) of FHLB, other equity, and restricted equity interests	(7,439)	(2,258)	7,268
Purchase of premises and equipment	(12,290)	(6,484)	(5,644)
Proceeds from the sale of premises and equipment and foreclosed assets	496	746	666
NET CASH USED BY INVESTING ACTIVITIES	(804,701)	(409,760)	(168,680)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in checking, money market and savings accounts	(153,191)	623,967	702,452
Net increase (decrease) in certificates of deposit	60,009	(90,092)	(42,510)
Purchase of treasury stock	(1,671)	(1,163)	(1,307)
Proceeds from common stock offering, net of issuance costs	94,051	0	3,257
Proceeds from preferred stock offering, net of issuance costs	0	0	57,785
Cash dividends paid, common stock	(12,557)	(11,550)	(10,981)
Cash dividends paid, preferred stock	(4,302)	(4,302)	(1,147)
Proceeds from issuance of subordinated notes, net of issuance costs	0	83,484	0
Proceeds from long-term borrowings	0	0	231,985
Repayments on long-term borrowings	0	(50,000)	(459,892)
Net change in short-term borrowings	132,396	0	0
NET CASH PROVIDED BY FINANCING ACTIVITIES	114,735	550,344	479,642
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(625,913)	199,504	339,720
CASH AND CASH EQUIVALENTS, Beginning	732,198	532,694	192,974
CASH AND CASH EQUIVALENTS, Ending	106,285	732,198	532,694
Cash paid during the period for:
Interest	26,804	20,030	32,957
Income taxes	17,423	11,788	9,524
SUPPLEMENTAL NONCASH DISCLOSURES:
Transfers to other real estate owned	785	1,470	241
Transfers from loans held for sale to loans held for investment	6,448	9,965	0
Transfers from loans held for investment to loans held for sale	0	1,921	0
Transfer of securities from available-for-sale to held-to-maturity	220,757	0	0
Grant of restricted stock awards from treasury stock	1,000	1,374	934
Grant of performance based restricted stock awards from treasury stock	173	262	217
Restricted stock forfeiture	36	64	0
Contribution of stock from treasury stock	44	81	0
Lease liabilities arising from obtaining right-of-use assets	$ 13,371	$ 2,643	$ 1,386

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Unless otherwise indicated, dollar amounts in tables are stated in thousands, except for per share amounts.

Business and Organization

CNB Financial Corporation (the "Corporation") is headquartered in Clearfield, Pennsylvania, and provides a full range of banking and related services through its wholly owned subsidiary, CNB Bank (the "Bank"). In addition, the Bank provides wealth and asset management services, including the administration of trusts and estates, retirement plans, and other employee benefit plans as well as a full range of wealth management services. The Bank serves individual and corporate customers and is subject to competition from other financial institutions and intermediaries with respect to these services. In addition to the Bank, the Corporation also operates a consumer discount loan and finance business through its wholly owned subsidiary, Holiday Financial Services Corporation ("Holiday"). The Corporation and its other subsidiaries are subject to examination by federal and state regulators. The Corporation’s market area is primarily concentrated in the Central and Northwest regions of the Commonwealth of Pennsylvania, the Central and Northeast regions of the state of Ohio, Western New York, and Southwest Virginia.

Basis of Financial Presentation

The financial statements are consolidated to include the accounts of the Corporation, the Bank, CNB Securities Corporation, Holiday, CNB Risk Management, Inc. and CNB Insurance Agency. All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements.

Use of Estimates

To prepare financial statements in conformity with U.S. generally accepted accounting principles ("GAAP"), management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. The allowance for credit losses on loans receivable and off-balance-sheet credit exposures, the fair values of financial instruments, goodwill and the status of contingencies are particularly subject to change.

Operating Segments

While the Corporation's chief operating decision makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Corporation-wide basis, and operating divisions are aggregated into one as operating results for all divisions are similar. Accordingly, all of the financial service operations are considered to be aggregated in one reportable operating segment.

Cash and Cash Equivalents

For purposes of the consolidated statement of cash flows, the Corporation defines cash and cash equivalents as cash and due from banks and interest bearing deposits with the Federal Reserve and other financial institutions. Net cash flows are reported for customer loan and deposit transactions, interest bearing time deposits with other financial institutions and borrowings with original maturities of 90 days or less.

Interest-Bearing Deposits in Other Financial Institutions

Interest-bearing deposits in other financial institutions are carried at cost.

Restrictions on Cash

Note 19, "Interest Rate Swaps," to the consolidated financial statements discloses the cash collateral balances required to be maintained in connection with the Corporation’s interest rate swaps.

Debt Securities

Debt securities are classified as held-to-maturity ("HTM") and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available-for-sale ("AFS") when they might be sold before maturity. Securities AFS are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax.

Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Premiums on callable debt securities are amortized to their earliest call date. Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

The Corporation has made a policy election to exclude accrued interest from the amortized cost basis of debt securities and report accrued interest separately in accrued interest receivable and other assets in the consolidated balance sheets. A debt security is placed on nonaccrual status at the time any principal or interest payments become more than 90 days delinquent or if full collection of interest or principal becomes uncertain. Accrued interest for a security placed on nonaccrual is reversed against interest income. There was no accrued interest related to debt securities reversed against interest income for the years ended December 31, 2022 and 2021, respectively.

Allowance for Credit Losses (Debt Securities AFS)

For AFS debt securities in an unrealized loss position, the Corporation first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security's amortized cost basis is written down to fair value through income. For debt securities AFS that do not meet the aforementioned criteria, the Corporation evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management confirms that an AFS security is uncollectable or when either of the criteria regarding intent or requirement to sell is met. As of December 31, 2022 and December 31, 2021, the Corporation determined that the unrealized loss positions in AFS debt securities were not the result of credit losses, and therefore, an allowance for credit losses was not recorded. See Note 3, "Debt Securities," and Note 6, "Fair Value Measurements," for more information about AFS debt securities.

Accrued interest receivable on AFS debt securities totaled $1.5 million and $2.2 million at December 31, 2022 and December 31, 2021, respectively, and was reported in accrued interest receivable and other assets on the consolidated balance sheets.

Allowance for Credit Losses (Debt Securities HTM)

Management measures expected credit losses on HTM debt securities on a collective basis by major security type.

Accrued interest receivable on HTM debt securities totaled $1.3 million and zero at December 31, 2022 and 2021, respectively, and was reported in accrued interest receivable and other assets on the consolidated balance sheets and is excluded from the estimate of credit losses.

Management classifies the HTM portfolio into the following major security types: U.S. government sponsored entities and residential & multi-family mortgages. All of the residential & multi-family mortgages held by the Corporation are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses.

Equity Securities

Equity securities are carried at fair value, with changes in fair value reported in net income. Equity securities without readily determinable fair values are carried at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment.

Loans Held for Sale

Loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings.

Mortgage loans held for sale are generally sold with servicing rights retained. The carrying value of the mortgage loan sold is reduced by the amount allocated to the servicing right. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold.

Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost. Amortized cost is the principal balance outstanding, net of purchase premiums and discounts, deferred loan fees and costs. Accrued interest receivable totaled $17.3 million and $13.3 million at December 31, 2022 and December 31, 2021, respectively, and was reported in accrued interest receivable and other assets on the consolidated balance sheets and is excluded from the estimate of credit losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments.

Interest income on mortgage, consumer and commercial loans is discontinued and placed on nonaccrual status at the time the loan is 90 days delinquent unless the loan is well secured and in process of collection. Past-due status is based on the contractual terms of the loan. Loans, including loans modified in a troubled debt restructuring, are placed on nonaccrual or recorded as charge-offs at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not received on loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Under the cash-basis method, interest income is recorded when the payment is received in cash. For all portfolio segments, loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Purchased Credit Deteriorated ("PCD") Loans

The Corporation has purchased loans, some of which have experienced more than insignificant credit deterioration since origination.

PCD loans are recorded at the amount paid. An allowance for credit losses is determined using the same methodology as other loans held for investment. The initial allowance for credit losses determined on a collective basis is allocated to individual loans. The sum of the loan's purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through provision expense.

Troubled Debt Restructurings ("TDRs")

Loans are classified as TDRs when a borrower is experiencing financial difficulty and the Corporation has granted a concession that would not have otherwise been made for a borrower with similar credit characteristics. Prior to granting a modification, the borrower's ability to repay the loan is evaluated, including: current income levels and debt to income ratio, credit score, payment history and an evaluation of secondary repayment sources, if any is updated. The Corporation's policy is to modify loans typically through a payment reduction or through an interest rate reduction for a specified period of time, usually six to twelve months. Interest-only payments may also be approved during the modification period. Principal forgiveness is generally not an option for modification. The allowance for credit loss on a TDR is measured using the same method as all other loans held for investment, except the original interest rate is used to discount the expected cash flows, not the rate specified within the restructuring. When there is a reasonable expectation, at the reporting date, that a TDR will be executed with a borrower the estimated life of the TDR reflects the extension or renewal. The Corporation also modifies some loans that are not classified as TDRs as the modification is due to a restructuring where the effective interest rate on the debt is reduced to reflect a decrease in market interest rates.

Concentration of Credit Risk

Most of the Corporation’s business activity is with customers located within the Commonwealth of Pennsylvania and the states of Ohio, New York and Virginia. Therefore, the Corporation’s exposure to credit risk is significantly affected by changes in the economies of Pennsylvania, Ohio, New York and Virginia. At December 31, 2022 no industry concentration existed which exceeded 10% of the total loan portfolio.

Allowance for Credit Losses - Loans

The allowance for credit losses on loans represents management’s estimate of expected credit losses over the estimated life of our existing portfolio of loans. The allowance for credit losses is a valuation account that is deducted from the loan's amortized cost basis to present the net amount expected to be collected on the loans.

The expense for credit loss recorded through earnings is the amount necessary to maintain the allowance for credit losses on loans at the amount of expected credit losses inherent within the loan portfolio. Loans are recorded as charge-offs against the allowance when management confirms a loan balance is uncollectable. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts, and other significant qualitative and quantitative factors. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, changes in environmental conditions, delinquency level, segment growth rates and changes in duration within new markets, or other relevant factors. For further information on the allowance for credit losses on loans, see Note 4, "Loans," for additional detail.

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. The Corporation has segregated its portfolio segments based on federal call report codes which classify loans based on the primary collateral supporting the loan. The following are the Corporation's segmented portfolios:

1-4 Family Construction: The Bank originates construction loans to finance 1-4 family residential buildings. Construction loans include not only construction of new structures, but also additions or alterations to existing structures and the demolition of existing structures to make way for new structures. Construction loans are generally secured by real estate. The primary risk characteristics are specific to the uncertainty on whether the construction will be completed according to the specifications and schedules. Factors that may influence the completion of construction may be customer specific, or related to changes in general economic conditions.

Other construction loans and all land development and other land loans: The Bank originates construction loans to finance land development preparatory to erecting new structures or the on-site construction of industrial, commercial, or multi-family buildings. Construction loans include not only construction of new structures, but also additions or alterations to existing structures and the demolition of existing structures to make way for new structures. Construction loans are generally secured by real estate. The primary risk characteristics are specific to the uncertainty on whether the construction will be completed according to the specifications and schedules. Factors that may influence the completion of construction may be customer specific, such as the quality and depth of property management, or related to changes in general economic conditions.

Farmland (including farm residential and other improvements): The Bank originates loans secured by farmland and improvements thereon, secured by mortgages. Farmland includes all land known to be used or usable for agricultural purposes, such as crop and livestock production. Farmland also includes grazing or pasture land, whether tillable or not and whether wooded or not. The primary risk characteristics are specific to the uncertainty on production, market, financial, environmental and human resources.

Home equity lines of credit: The primary risk characteristics associated with home equity lines of credit typically involve changes to the borrower, including unemployment or other loss of income; unexpected significant expenses, such as major medical expenses, catastrophic events, divorce and death. Home equity lines of credit are typically originated with variable or floating interest rates, which could expose the borrower to higher payments in a rising interest rate environment. Real estate values could decrease and cause the value of the underlying property to fall below the loan amount, creating additional potential loss exposure for the Bank.

Residential Mortgages secured by first liens: The Bank originates one-to-four family residential mortgage loans primarily within central and northwest Pennsylvania, central and northeast Ohio, western New York and the Roanoke, Virginia market. These loans are secured by first liens on a primary residence or investment property. The primary risk characteristics associated with residential mortgage loans typically involve major changes to the borrower, including unemployment or other loss of income; unexpected significant expenses, such as major medical expenses, catastrophic events, divorce or death. Residential mortgage loans that have adjustable rates could expose the borrower to higher payments in a rising interest rate environment. Real estate values could decrease and cause the value of the underlying property to fall below the loan amount, creating additional potential loss exposure for the Bank.

Residential Mortgages secured by junior liens: The Bank originates loans secured by junior liens against one to four family properties primarily within central and northwest Pennsylvania, central and northeast Ohio, western New York and the Roanoke, Virginia market. Loans secured by junior liens are primarily in the form of an amortizing home equity loan. These loans are subordinate to a first mortgage which may be from another lending institution. The primary risk characteristics associated with loans secured by junior liens typically involve major changes to the borrower, including unemployment or other loss of income, unexpected significant expenses, such as for major medical expenses, catastrophic events, divorce or death. Real estate values could decrease and cause the value of the property to fall below the loan amount, creating additional potential loss exposure for the Bank.

Multifamily (5 or more) residential properties: The Bank originates mortgage loans for multifamily properties primarily within central and northwest Pennsylvania, central and northeast Ohio, western New York and the Roanoke, Virginia market. Multifamily loans are expected to be repaid from the cash flows of the underlying property so the collective amount of rents must be sufficient to cover all operating expenses, property management and maintenance, taxes and debt service. Increases in vacancy rates, interest rates or other changes in general economic conditions can have an impact on the borrower and its ability to repay the loan.

Owner-occupied, nonfarm nonresidential properties: The Bank originates mortgage loans to operating companies primarily within central and northwest Pennsylvania, central and northeast Ohio, western New York and the Roanoke, Virginia market. Owner-occupied real estate properties primarily include retail buildings, medical buildings and industrial/warehouse space. Owner-occupied loans are typically repaid first by the cash flows generated by the borrower’s business operations. The primary risk characteristics are specific to the underlying business and its ability to generate sustainable profitability and positive cash flow. Factors that may influence a borrower's ability to repay their loan include demand for the business’ products or services, the quality and depth of management, the degree of competition, regulatory changes, and general economic conditions.

Non-owner occupied, nonfarm nonresidential properties: The Bank originates mortgage loans for commercial real estate that is managed as an investment property primarily within central and northwest Pennsylvania, central and northeast Ohio, western New York and the Roanoke, Virginia market. Commercial real estate properties primarily include retail buildings/shopping centers, hotels, office/medical buildings and industrial/warehouse space. Increases in vacancy rates, interest rates or other changes in general economic conditions can have an impact on the borrower and its ability to repay the loan. Commercial real estate loans are generally considered to have a higher degree of credit risk as they may be dependent on the ongoing success and operating viability of a fewer number of tenants who are occupying the property and who may have a greater degree of exposure to economic conditions.

Agricultural production and other loans to farmers: The Bank originates loans secured or unsecured to farm owners and operators (including tenants) or to nonfarmers for the purpose of financing agricultural production, including the growing and storing of crops, the marketing or carrying of agricultural products by the growers thereof, and the breeding, raising, fattening, or marketing of livestock, and for purchases of farm machinery, equipment, and implements. The primary risk characteristics are specific to the uncertainty on production, market, financial, environmental and human resources.

Commercial and Industrial: The Bank originates lines of credit and term loans to operating companies for business purposes. The loans are generally secured by business assets such as accounts receivable, inventory, business vehicles and equipment as well as the stock of a company, if privately held. Commercial and Industrial loans are typically repaid first by the cash flows generated by the borrower’s business operations. The primary risk characteristics are specific to the underlying business and its ability to generate sustainable profitability and positive cash flow. Factors that may influence a borrower's ability to repay their loan include demand for the business’ products or services, the quality and depth of management, the degree of competition, regulatory changes, and general economic conditions. The ability of the Bank to foreclose and realize sufficient value from business assets securing these loans is often uncertain. To mitigate the risk characteristics of commercial and industrial loans, commercial real estate may be included as a secondary source of collateral. The Bank will often require more frequent reporting requirements from the borrower in order to better monitor its business performance.

Credit cards: The Bank originates credit cards offered to individuals and businesses for household, family, other personal and business expenditures. Credit cards generally are floating rate loans and include both unsecured and secured lines. Credit card loans generally do not have stated maturities and are unconditionally cancellable. The primary risk characteristics associated with credit cards typically involve major changes to the borrower, including unemployment or other loss of income, unexpected significant expenses, such as for major medical expenses, catastrophic events, divorce or death.

Other revolving credit plans: The Bank originates lines of credit to individuals for household, family, and other personal expenditures. Consumer loans generally have higher interest rates and shorter terms than residential loans but tend to have higher credit risk due to the type of collateral securing the loan or in some cases the absence of collateral. The primary risk characteristics associated with other revolving loans typically involve major changes to the borrower, including unemployment or other loss of income, unexpected significant expenses, such as for major medical expenses, catastrophic events, divorce or death.

Automobile: The Bank originates consumer loans extended for the purpose of purchasing new and used passenger cars and other vehicles such as minivans, vans, sport-utility vehicles, pickup trucks, and similar light trucks for personal use. The primary risk characteristics associated with automobile loans typically involve major changes to the borrower, including unemployment or other loss of income, unexpected significant expenses, such as for major medical expenses, catastrophic events, divorce or death.

Other consumer: The Bank originates loans to individuals for household, family, and other personal expenditures. This also represents all other loans that cannot be categorized in any of the previous mentioned consumer loan segments. Consumer loans generally have higher interest rates and shorter terms than residential loans but tend to have higher credit risk due to the type of collateral securing the loan or in some cases the absence of collateral. The primary risk characteristics associated with other consumer loans typically involve major changes to the borrower, including unemployment or other loss of income, unexpected significant expenses, such as for major medical expenses, catastrophic events, divorce or death.

Obligations (other than securities and leases) of states and political subdivisions: The Bank originates various types of loans made directly to municipalities. These loans are repaid through general cash flows or through specific revenue streams, such as water and sewer fees. The primary risk characteristics associated with municipal loans are the municipality's ability to manage cash flow, balance the fiscal budget, fixed asset and infrastructure requirements. Additional risks include changes in demographics, as well as social and political conditions.

Other loans: The Bank originates other loans, such as loans to nonprofit organizations, including churches, hospitals, educational and charitable institutions, clubs, and similar associations. The primary risk characteristics associated with these types of loans are repayment, demographic, social, political and reputation risks.

Overdrafts: The Bank reports overdrawn customer deposit balances as loans.

Methods utilized by management to estimate expected credit losses include a discounted cash flow ("DCF") model that discounts instrument-level contractual cash flows, adjusted for prepayments and curtailments, incorporating loss expectations, and a weighted average remaining maturity ("WARM") model which contemplates expected losses at a pool-level, utilizing historic loss information.

Under both models, management estimates the allowance for credit losses on loans using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. After the end of the reasonable and supportable forecast period, the loss rates revert to the mean loss rate over a period of eight quarters.

Historical credit loss experience, including examination of loss experience at representative peer institutions when the Corporation’s loss history does not result in estimations that are meaningful to users of the Corporation’s Consolidated Financial Statements, provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, changes in environmental conditions, delinquency level, segment growth rates and changes in duration within new markets, or other relevant factors.

The DCF model uses inputs of current and forecasted macroeconomic indicators to predict future loss rates. The current macroeconomic indicator utilized by the Corporation is the Federal unemployment rate and the S&P/Case-Shiller U.S. National Home Price Index for select collective residential related pools. In building the CECL methodology utilized in the DCF model, a correlation between this indicator and historic loss levels was developed, enabling a prediction of future loss rates related to future Federal unemployment rates and S&P/Case-Shiller U.S. National Home Price Index.

The portfolio segments utilizing the DCF methodology comprised 86.0% and 88.4% of the amortized cost of loans as of December 31, 2022 and December 31, 2021, respectively, and included:

•Farmland

•Home equity lines of credit

•Residential Mortgages secured by first liens

•Residential Mortgages secured by junior liens

•Multifamily (5 or more) residential properties

•Owner-occupied, nonfarm nonresidential properties

•Non-owner occupied, nonfarm nonresidential properties

•Agricultural production and other loans to farmers

•Commercial and Industrial

•Automobile

•Obligations (other than securities and leases) of states and political subdivisions

•Other loans

The WARM model uses combined historic loss rates for the Corporation and peer institutions, if necessary, gathered from call report filings. The selected period for which historic loss rates are used is dependent on management's evaluation of current conditions and expectations of future loss conditions.

The portfolio segments utilizing the WARM methodology comprised 14.0% and 11.6% of the amortized cost of loans as of December 31, 2022 and December 31, 2021, respectively, and included:

•1-4 Family Construction

•Other construction loans and all land development and other land loans

•Credit cards

•Other revolving credit plans

•Other consumer

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation and typically represent collateral dependent loans but may also include other nonperforming loans or TDRs. The Corporation uses the practical expedient to measure individually evaluated loans as collateral dependent and/or when repayment is expected to be provided substantially through the operation or sale of the collateral. Expected credit losses are based on the fair value at the reporting date, adjusted for selling costs as appropriate. For collateral dependent loans, credit loss is measured as the difference between the amortized cost basis in the loan and the fair value of the underlying collateral. The fair value of the collateral is adjusted for the estimated cost to sell if repayment or satisfaction of a loan is dependent on the sale (rather than only on the operation) of the collateral.

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

Management estimates expected credit losses over the contractual period in which the Corporation is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Corporation. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. Management estimates the amount of expected losses by calculating a commitment usage factor over the contractual period for exposures that are not unconditionally cancellable by the Bank and applying the loss factors used in the allowance for credit losses on loans methodology to the results of the usage calculation to estimate the liability for credit losses related to unfunded commitments for each loan segment. The estimate of credit losses on OBS credit exposures is $603 thousand and zero at December 31, 2022 and 2021, respectively, and was reported in accrued interest payable and other liabilities on the consolidated balance sheets .

Mortgage Servicing Rights

When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in mortgage banking income. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds and default rates and losses. The Corporation compares the valuation model inputs and results to published industry data in order to validate the model results and assumptions. All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into non-interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans.

Servicing rights are evaluated for impairment based upon the fair value of the rights as compared to carrying amount. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics, such as interest rate, loan type and investor type. Impairment is recognized through a valuation allowance, to the extent that fair value is less than the carrying amount. If the Corporation later determines that all or a portion of the impairment no longer exists, a reduction of the allowance may be recorded as an increase to income. Changes in valuation allowances are reported with mortgage banking income on the income statement. The fair values of servicing rights are subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and losses.

Servicing fee income, which is reported on the income statement as mortgage banking income, is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned. The amortization of mortgage servicing rights is netted against loan servicing fee income. Late fees and ancillary fees related to loan servicing are not material.

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets.

Foreclosed Assets

Foreclosed assets are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. Physical possession of residential real estate property collateralizing a consumer mortgage loan occurs when legal title is obtained upon completion of foreclosure or when the borrower conveys all interest in the property to satisfy the loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed.

Premises and Equipment

Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation of premises and equipment is computed principally by the straight line method. In general, useful lives range from 3 to 39 years with lives for furniture, fixtures and equipment ranging from 3 to 10 years and lives of buildings and building improvements ranging from 15 to 39 years. Amortization of leasehold improvements is computed using the straight-line method over useful lives of the leasehold improvements or the term of the lease, whichever is shorter. Maintenance, repairs and minor renewals are charged to expense as incurred.

Leases

The Corporation leases real estate property for branches and certain equipment. The Corporation determines if an arrangement is a lease at inception and if the lease is an operating lease or a finance lease.

Operating lease right-of-use assets represent the Corporation's right to use an underlying asset during the lease term and operating lease liabilities represent the Corporation's obligation to make lease payments arising from the lease. The period over which the right-of-use asset is amortized is generally the lesser of the expected remaining term or the remaining useful life of the leased asset. The lease liability is decreased as periodic lease payments are made. The Corporation performs impairment assessments for right-of-use assets when events or changes in circumstances indicate that their carrying values may not be recoverable.

The calculated amounts of the right-of-use assets and lease liabilities are impacted by the length of the lease term and the discount rate used to calculate the present value of the minimum remaining lease payments. The Corporation's lease agreements often include one or more options to renew at the Corporation's discretion. If, at lease inception, the Corporation considers the exercising of a renewal option to be reasonably certain, the Corporation includes the extended term in the calculation of the right-of-use asset and lease liability. Generally, the Corporation cannot practically determine the interest rate implicit in the lease so the Corporation's incremental borrowing rate is used as the discount rate for the lease. The Corporation uses Federal Home Loan Bank ("FHLB") of Pittsburgh advance interest rates, which have been deemed as the Corporation's incremental borrowing rate, at lease inception based upon the term of the lease. The Corporation's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Lease expense, variable lease expense and short-term lease expense are included in occupancy expense in the Corporation's consolidated statements of income. For facility-related leases, the Corporation elected, by lease class, to not separate lease and non-lease components. Lease expense is recognized on a straight-line basis over the lease term. Variable lease expense primarily represents payments such as common area maintenance, real estate taxes, and utilities and are recognized as expense in the period when those payments are incurred. Short-term lease expense relates to leases with an initial term of 12 months or less. The Corporation has elected to not record a right-of-use asset or lease liability for short-term leases.

Federal Home Loan Bank Stock

As a member of the FHLB of Pittsburgh, the Corporation is required to purchase and hold stock in the FHLB to satisfy membership and borrowing requirements. This stock is restricted in that it can only be sold to the FHLB or to another member institution, and all sales of FHLB stock must be at par. As a result of these restrictions, FHLB stock is unlike other investment securities insofar as there is no trading market for FHLB stock and the transfer price is determined by FHLB membership rules and not by market participants.

FHLB stock is held as a long-term investment, is valued at its cost basis and is analyzed for impairment based on the ultimate recoverability of the par value. The Corporation evaluates impairment quarterly. The decision of whether impairment exists is a matter of judgment that reflects our view of the FHLB’s long-term performance, which includes factors such as the following:

•its operating performance;

•the severity and duration of declines in the fair value of its net assets related to its capital stock amount;

•its commitment to make payments required by law or regulation and the level of such payments in relation to its operating performance;

•the impact of legislative and regulatory changes on the FHLB, and accordingly, on the members of FHLB; and

•its liquidity and funding position.

Both cash and stock dividends are reported as income.

Qualified Affordable Housing Project Investments

The Corporation has investments in various real estate limited partnerships that acquire, develop, own and operate low and moderate-income housing. These investments are made directly in Low Income Housing Tax Credit ("LIHTC") partnerships formed by third parties. As a limited partner in these operating partnerships, the Corporation receives tax credits and tax deductions for losses incurred by the underlying properties. The Corporation accounts for its ownership interest in LIHTC partnerships in accordance with Accounting Standards Update ("ASU") 2014-01, "Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects." The standard permits an entity to amortize the initial cost of the investment in proportion to the amount of the tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense. There were no impairment losses during the year resulting from the forfeiture or ineligibility of tax credits related to qualified affordable housing project investments.

Bank Owned Life Insurance

The Corporation has purchased life insurance policies on certain key employees. Bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

Goodwill and Other Intangible Assets

Goodwill resulting from business combinations prior to January 1, 2009 represents the excess of the purchase price over the fair value of the net assets of businesses acquired. Goodwill resulting from business combinations after January 1, 2009 is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interest in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. The Corporation has no intangible assets with an indefinite useful life.

The Corporation has selected December 31 as the date to perform the annual impairment test. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on the Corporation’s balance sheet.

Other intangible assets consist of core deposit intangible assets arising from the acquisition of FC Banc Corp. in 2013, Lake National Bank in 2016 and Bank of Akron in 2020. The core deposit intangible assets from these acquisitions are amortized using an accelerated method over their estimated useful lives, which range from four years to ten years, respectively.

Loan Commitments and Related Financial Instruments

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

Derivatives

Derivative financial instruments are recognized as assets or liabilities at fair value. The Corporation has interest rate swap agreements which are used as part of its asset liability management to help manage interest rate risk. The Corporation does not use derivatives for trading purposes.

At the inception of a derivative contract, the Corporation designates the derivative as one of three types based on the Corporation's intentions and belief as to likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment ("fair value hedge"), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability ("cash flow hedge"), or (3) an instrument with no hedging designation ("stand-alone derivative"). For a fair value hedge, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in current earnings as fair values change. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income (loss) and is reclassified into earnings in the same periods during which the hedged transaction affects earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings, as non-interest income.

Accrued settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged. Accrued settlements on derivatives not designated or that do not qualify for hedge accounting are reported in non-interest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged.

The Corporation formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions, at the inception of the hedging relationship. This documentation includes linking fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Corporation also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in fair values or cash flows of the hedged items. The Corporation discontinues hedge accounting when it determines that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative is settled or terminates, a hedged forecasted transaction is no longer probable, a hedged firm commitment is no longer firm, or treatment of the derivative as a hedge is no longer appropriate or intended.

When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as non-interest income. When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transactions are still expected to occur, gains or losses that were accumulated in other comprehensive income are amortized into earnings over the same periods which the hedged transactions will affect earnings.

The Corporation is exposed to losses if a counterparty fails to make its payments under a contract in which the Corporation is in the net receiving position. The Corporation anticipates that the counterparties will be able to fully satisfy their obligations under the agreements. All the contracts to which the Corporation is a party settle monthly or quarterly. In addition, the Corporation obtains collateral above certain thresholds of the fair value of its hedges for each counterparty based upon their credit standing and the Corporation has netting agreements with the dealers with which it does business.

Stock-Based Compensation

Compensation cost is recognized for restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. The market price of the Corporation’s common stock at the date of grant is used for restricted stock awards.

Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. Certain of the restricted stock awards are performance based and costs are recognized based upon certain performance conditions. The Corporation's accounting policy is to recognize forfeitures as they occur

Income Taxes

Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

A tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded.

The Corporation recognizes interest and/or penalties, if any, related to income tax matters in income tax expense.

Retirement Plans

Post retirement obligation expense is the net of service and interest cost, return on plan assets and amortization of gains and losses not immediately recognized. The Corporation’s expense associated with its 401(k) plan is determined under the provisions of the plan document and includes both matching and profit sharing components. Deferred compensation and supplemental retirement plan expenses allocate the benefits over years of service.

Earnings Per Common Share

Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the applicable period, excluding outstanding participating securities. Diluted earnings per common share is computed using the weighted average number of common shares determined for the basic computation plus the dilutive effect of potential common shares issuable under certain stock compensation plans. Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per share pursuant to the two-class method. The Corporation has determined that its outstanding non-vested time-based restricted stock awards are participating securities.

Comprehensive Income

The Corporation presents comprehensive income as part of the Consolidated Statements of Income and Comprehensive Income. Other comprehensive income and loss consists of unrealized holding gains and losses on the AFS securities portfolio, amortization of AFS securities transferred to HTM, changes in the unrecognized actuarial gain and transition obligation related to the Corporation’s post retirement benefits plans, and changes in the fair value of the Corporation’s interest rate swaps, net of tax.

Loss Contingencies

Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements.

Treasury Stock

The purchase of the Corporation’s common stock is recorded at cost. Purchases of the stock are made in the open market based on market prices. At the date of subsequent reissue, the treasury stock account is reduced by the cost of such stock on a first-in-first-out basis.

Fair Value of Financial Instruments

Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.

Reclassifications

Certain amounts appearing in the financial statements and notes thereto for prior periods have been reclassified to conform with the current presentation. The reclassifications had no effect on net income or shareholders’ equity as previously reported.

Adoption of New Accounting Standards

Accounting Standards Adopted in 2020

On January 1, 2020, the Corporation adopted ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the CECL methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and HTM debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments. standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with Topic 842 on leases. In addition, ASC 326 made changes to the accounting for AFS debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on AFS debt securities management does not intend to sell or believes that it is more likely than not they will be required to sell.

The Corporation adopted ASC 326 using the modified retrospective approach method for all financial assets measured at amortized cost and OBS credit exposures. Results for reporting periods beginning after January 1, 2020 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. In conjunction with the adoption of CECL, the Corporation has revised its segmentation to align with the methodology applied in determining the ACL for loans under CECL, which is based on federal call report codes which classify loans based on the primary collateral supporting the loan. Segmentation prior to the adoption of CECL was based on product type or purpose.

Upon adoption, the Corporation's total allowance for credit losses increased by $5.0 million, or 25.5%. The increase in the total allowance for credit losses resulted in a $3.4 million decrease to retained earnings, net of deferred taxes. The overall change in total allowance for credit losses upon adoption was primarily due to the move to a life of loan reserve estimate as well as methodology changes required under CECL.

The Corporation adopted ASC 326 using the prospective transition approach for financial assets purchased with credit deterioration that were previously classified as purchased credit impaired ("PCI") and accounted for under ASC 310-30. In accordance with the standard, management did not reassess whether PCI assets met the criteria of PCD assets as of the date of adoption. On January 1, 2020, the amortized cost basis of the PCD assets were adjusted to reflect the addition of $670 thousand of the allowance for credit losses. The remaining noncredit discount (based on the adjusted amortized cost basis) will be accreted into interest income at the effective interest rate as of January 1, 2020.

The following tables illustrates the impact of ASC 326.


	January 1, 2020
	Pre-CECL Adoption		Reclassification to CECL Portfolio Segmentation		Pre-CECL Adoption Portfolio Segmentation		Post-CECL Adoption Portfolio Segmentation		Impact of CECL Adoption
Assets:
Loans:
Commercial, industrial and agricultural	$	1,046,665	$	(1,046,665)	$	—	$	—	$	—
Farmland	—		27,199		27,199		27,199		—
Owner-occupied, nonfarm nonresidential properties	—		333,117		333,117		333,117		—
Agricultural production and other loans to farmers	—		3,407		3,407		3,407		—
Commercial and Industrial	—		474,614		474,614		474,614		—
Obligations (other than securities and leases) of states and political subdivisions	—		139,052		139,052		139,052		—
Other loans	—		5,740		5,740		5,740		—
Commercial mortgages	814,002		(814,002)		—		—		—
Other construction loans and all land development and other land loans	—		277,412		277,412		277,412		—
Multifamily (5 or more) residential properties	—		124,390		124,390		124,390		—
Non-owner occupied, nonfarm nonresidential properties	—		467,852		467,852		468,522		670
Residential real estate	814,030		(814,030)		—		—		—
1-4 Family Construction	—		22,427		22,427		22,427		—
Home equity lines of credit	—		95,089		95,089		95,089		—
Residential Mortgages secured by first liens	—		646,199		646,199		646,199		—
Residential Mortgages secured by junior liens	—		57,965		57,965		57,965		—
Consumer, net of unearned discount	119,623		(119,623)		—		—		—
Other revolving credit plans	—		52,353		52,353		52,353		—
Automobile	—		27,807		27,807		27,807		—
Other consumer	—		39,697		39,697		39,697		—
Credit cards	7,569		—		7,569		7,569		—
Overdrafts	2,146		—		2,146		2,146		—
Total loans	$	2,804,035	$	—	$	2,804,035	$	2,804,705	$	670


	January 1, 2020
	Pre-CECL Adoption		Reclassification to CECL Portfolio Segmentation		Pre-CECL Adoption Portfolio Segmentation		Post-CECL Adoption Portfolio Segmentation		Impact of CECL Adoption
Assets:
Allowance for credit losses on loans:
Commercial, industrial and agricultural	$	8,287	$	(8,287)	$	—	$	—	$	—
Farmland	—		190		190		251		61
Owner-occupied, nonfarm nonresidential properties	—		2,390		2,390		1,636		(754)
Agricultural production and other loans to farmers	—		25		25		30		5
Commercial and Industrial	—		4,105		4,105		3,474		(631)
Obligations (other than securities and leases) of states and political subdivisions	—		1,022		1,022		791		(231)
Other loans	—		41		41		49		8
Commercial mortgages	6,952		(6,952)		—		—		—
Other construction loans and all land development and other land loans	—		2,327		2,327		3,107		780
Multifamily (5 or more) residential properties	—		1,087		1,087		1,399		312
Non-owner occupied, nonfarm nonresidential properties	—		3,980		3,980		6,527		2,547
Residential real estate	1,499		(1,499)		—		—		—
1-4 Family Construction	—		56		56		21		(35)
Home equity lines of credit	—		180		180		601		421
Residential Mortgages secured by first liens	—		1,220		1,220		2,320		1,100
Residential Mortgages secured by junior liens	—		114		114		249		135
Consumer	2,411		(2,411)		—		—		—
Other revolving credit plans	—		296		296		674		378
Automobile	—		156		156		60		(96)
Other consumer	—		1,960		1,960		2,981		1,021
Credit cards	84		—		84		26		(58)
Overdrafts	240		—		240		240		—
Total allowance for credit losses on loans	$	19,473	$	—	$	19,473	$	24,436	$	4,963

Retained earnings:
Total increase in allowance for credit losses on loans									$	4,963
Balance sheet reclassification									(670)
Total pre-tax impact									4,293
Tax effect									(902)
Decrease in retained earnings									$	3,391

In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment" ("ASU 2017-04"). ASU 2017-04 simplifies the accounting for goodwill impairment for all entities by requiring impairment charges to be based on the first step in the previous two-step impairment test. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard eliminates the prior requirement to calculate a goodwill impairment charge using Step 2, which requires an entity to calculate any impairment charge by comparing the implied fair value of goodwill with its carrying amount. ASU 2017-04 was effective for the Corporation on January 1, 2020 and did not have a material impact on the Corporation's financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." ASU 2018-13 modifies disclosure requirements on fair value measurements based on the concepts in the Concepts Statement, including the consideration of costs and benefits. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. ASU 2018-13 was effective for the Corporation on January 1, 2020 and did not have a material impact on the Corporation's financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" ("ASU 2018-15"). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by these amendments. ASU 2018-15 was effective for the Corporation on January 1, 2020 and did not have a material impact on the Corporation's financial statements and related disclosures.

In March 2020, the FASB issued ASU 2020-04, - Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional expedients and exceptions for accounting related to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. ASU 2020-04 applies only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform and do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2024, except for hedging relationships existing as of December 31, 2024, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The amendments in this update are effective for all entities as of March 12, 2020, and based upon the amendments provided in ASU 2022-06 discussed below, can generally be applied through December 31, 2024. The adoption of ASU 2020-04 did not significantly impact the Corporation's financial statements and related disclosures.

Accounting Standards Adopted in 2021

In August 2018, the FASB issued ASU 2018-14, "Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." ASU 2018-14 amends ASC 715-20, "Compensation - Retirement Benefits - Defined Benefit Plans - General." The amended guidance modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans by removing and adding certain disclosures for these plans. The eliminated disclosures include (a) the amounts in accumulated Other Comprehensive Income expected to be recognized in net periodic benefit costs over the next fiscal year, and (b) the effects of a one percentage point change in assumed health care cost trend rates on the net periodic benefit costs and the benefit obligation for post-retirement health care benefits. Additional disclosures include descriptions of significant gains and losses affecting the benefit obligation for the period. ASU 2018-14 was effective for the Corporation on January 1, 2021 and did not have a material impact on the Corporation's financial statements and related disclosures.

In December 2019, the FASB issued ASU 2019-12 "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." These amendments remove specific exceptions to the general principles in Topic 740 in GAAP. It eliminates the need for an organization to analyze whether the following apply in a given period: exception to the incremental approach for intraperiod tax allocation; exceptions to accounting for basis differences where there are ownership changes in foreign investments; and exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. It also improves financial statement preparers' application of income tax- related guidance and simplifies GAAP for: franchise taxes that are partially based on income; transactions with a government that result in a step up in the tax basis of goodwill; separate financial statements of legal entities that are not subject to tax; and enacts changes in tax laws in interim periods. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. ASU 2019-12 was effective for the Corporation on January 1, 2021 and did not have a material impact on the Corporation's financial statements and related disclosures.

In January 2020, the FASB issued ASU 2020-01 - Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. ASU 2020-01 represents changes to clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815. These amendments improve current U.S. GAAP by reducing diversity in practice and increasing comparability of the accounting for these transactions. ASU 2020-01 was effective for the Corporation on January 1, 2021 and did not have a material impact on the Corporation's financial statements and related disclosures.

In October 2020, the FASB issued ASU 2020-08 - Codification Improvements to Subtopic 310-20, Receivables - Nonrefundable Fees and Other Costs. ASU 2020-08 clarifies that an entity should reevaluate whether a callable debt security is within the scope of paragraph 310-20-35-33 for each reporting period. ASU 2020-08 was effective for the Corporation on January 1, 2021 and did not have a material impact on the Corporation's financial statements and related disclosures.

In January 2021, the FASB issued ASU 2021-01 - Reference Rate Reform (Topic 848). ASU 2021-01 expands and clarifies the scope of ASU No. 2020-04 to include derivatives affected by changes in interest rates used for margining, discounting, or contract price alignment, commonly referred to as the "discounting transaction." Derivatives impacted by the discounting transaction will be eligible for certain optional expedients and exceptions related to contract modifications and hedge accounting as defined in Topic 848. The amendments in this update are effective for all entities as of March 12, 2020, and based upon the amendments provided in ASU 2022-06 discussed below, can generally be applied through December 31, 2024. The adoption of ASU 2021-01 did not significantly impact the Corporation's financial statements and related disclosures.

In August 2021, FASB issued ASU 2021-06 - Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946). ASU 2021-06 updates the codification to align with SEC Final Rule Releases No. 33-10786 and No. 33-10835. Specific to financial institutions, these SEC releases updated required annual statistical disclosures. The amendments in ASU 2021-06 were effective immediately. The updates to the statistical disclosures are reflected in the Corporation's Annual Report on Form 10-K for the fiscal year ending December 31, 2021, to align with this guidance.

Effects of Newly Issued But Not Yet Effective Accounting Standards

In March 2022, the FASB issued ASU 2022-01, "Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method." Under prior guidance, entities can apply the last-of-layer hedging method to hedge the exposure of a closed portfolio of prepayable financial assets to fair value changes due to changes in interest rates for a portion of the portfolio that is not expected to be affected by prepayments, defaults, and other events affecting the timing and amount of cash flows. ASU 2022-01 expands the last-of-layer method, which permits only one hedge layer, to allow multiple hedged layers of a single closed portfolio. To reflect that expansion, the last-of-layer method is renamed the portfolio layer method. ASU 2022-01 also (i) expands the scope of the portfolio layer method to include non-prepayable financial assets, (ii) specifies eligible hedging instruments in a single-layer hedge, (iii) provides additional guidance on the accounting for and disclosure of hedge basis adjustments under the portfolio layer method and (iv) specifies how hedge basis adjustments should be considered when determining credit losses for the assets included in the closed portfolio. ASU 2022-01 will be effective for the Corporation on January 1, 2023. The Corporation is evaluating the effect that ASU 2022-01 will have on its consolidated financial statements and related disclosures.

In March 2022, the FASB issued ASU No. 2022-02, "Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures." This ASU eliminates the separate recognition and measurement guidance for TDRs by creditors. The elimination of the TDRs 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. This guidance is effective for the Corporation on January 1, 2023, with early adoption permitted. The Corporation is evaluating the effect that ASU 2022-02 will have on its consolidated financial statements and related disclosures.

In June 2022, FASB issued ASU No. 2022-03, "Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions." In this ASU, a contractual restriction on the sale of an equity security is not considered in measuring the security's fair value. The ASU also requires certain disclosures for equity securities that are subject to contractual restrictions. This guidance is effective for the Corporation on January 1, 2024, with early adoption permitted. The Corporation is evaluating the effect that ASU 2022-03 will have on its consolidated financial statements and related disclosures.

In December 2022, FASB issued ASU No. 2022-06 - Reference Rate Reform (Topic 848). ASU 2022-06 extends the period of time preparers can utilize the reference rate reform relief guidance provided by ASU 2020-04 and ASU 2021-01, which are discussed above. ASU 2022-06, which was effective upon issuance, defers the sunset date of this prior guidance from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief guidance in Topic 848. ASU 2022-06 did not have a material impact on the Corporation's financial statements and related disclosures.

Business Combinations	12 Months Ended
Business Combinations	Dec. 31, 2022
Business Combination and Asset Acquisition [Abstract]
Business Combinations	Business Combinations On July 17, 2020, the Corporation completed its previously announced acquisition of Bank of Akron for either (x) $215.00 in cash or (y) 6.6729 shares of the Corporation's common stock and also received cash in lieu of fractional shares. Based on the elections and proration procedures, the total consideration payable to Bank of Akron shareholders was approximately $40.8 million, comprised of approximately $16.1 million in cash and 1,501,321 shares of the Corporation's common stock, net of fractional shares, valued at approximately $24.7 million based on the July 17, 2020 closing price of $16.43 per share of the Corporation's common stock. Bank of Akron's results of operations were included in the Corporation's results of operations beginning July 17, 2020. The Corporation incurred no merger-related expenses during the years ended December 31, 2022 and 2021, respectively, and $4.0 million of merger-related expenses during the year ended December 31, 2020, consisting largely of professional services of attorneys, accountants, investment bankers and other advisors.

Securities

12 Months Ended

Dec. 31, 2022

Investments, Debt and Equity Securities [Abstract]

Securities

Securities AFS at December 31, 2022 and 2021 were as follows:


	December 31, 2022
	Amortized		Gross Unrealized				Allowance For		Fair
	Cost		Gains		Losses		Credit Losses		Value
U.S. Gov’t sponsored entities	$	3,213	$	—	$	(84)	$	—	$	3,129
State & political subdivisions	112,734		24		(17,095)		—		95,663
Residential & multi-family mortgage	256,111		—		(38,564)		—		217,547
Corporate notes & bonds	47,111		—		(4,720)		—		42,391

Pooled SBA	13,823		—		(1,144)		—		12,679

Total	$	432,992	$	24	$	(61,607)	$	—	$	371,409


	December 31, 2021
	Amortized		Gross Unrealized				Allowance For		Fair
	Cost		Gains		Losses		Credit Losses		Value
U.S. Gov’t sponsored entities	$	110,788	$	2,728	$	(1,768)	$	—	$	111,748
State & political subdivisions	103,232		2,162		(1,682)		—		103,712
Residential & multi-family mortgage	437,021		4,127		(6,513)		—		434,635
Corporate notes & bonds	28,257		250		(443)		—		28,064

Pooled SBA	18,787		283		(38)		—		19,032

Total	$	698,085	$	9,550	$	(10,444)	$	—	$	697,191

Debt securities HTM at December 31, 2022 and 2021 are as follows:


	December 31, 2022
	Amortized		Gross Unrealized				Allowance For		Fair
	Cost		Gains		Losses		Credit Losses		Value
U.S. Gov’t sponsored entities	$	307,711	$	—	$	(27,276)	$	—	$	280,435
Residential & multi-family mortgage	97,054		—		(10,101)		—		86,953
Total	$	404,765	$	—	$	(37,377)	$	—	$	367,388

December 31, 2021

Amortized

Gross Unrealized

Allowance For

Fair

Cost

Gains

Losses

Credit Losses

Value

U.S. Gov’t sponsored entities

$

—

$

—

$

—

$

—

$

—

Residential & multi-family mortgage

—

Total

$

—

$

—

$

—

$

—

$

—

The Corporation elected to transfer 23 AFS securities with an aggregate fair value of $101.1 million to a classification of HTM on January 1, 2022. In accordance with FASB ASC 320-10-55-24, the transfer from AFS to HTM must be recorded at the fair value of the AFS securities at the time of transfer. The net unrealized holding gain of $373 thousand, net of tax, at the date of transfer was retained in accumulated other comprehensive income (loss), with the associated pre-tax amount retained in the carrying value of the HTM securities. Such amounts will be amortized to comprehensive income over the remaining life of the securities.

The Corporation elected to transfer 51 AFS securities with an aggregate fair value of $112.6 million to a classification of HTM on April 1, 2022. The net unrealized holding loss of $6.0 million, net of tax, at the date of transfer was retained in accumulated other comprehensive income (loss), with the associated pre-tax amount retained in the carrying value of the HTM securities. Such amounts will be amortized to comprehensive income over the remaining life of the securities.

Information pertaining to security sales is as follows:


Year ended December 31	Proceeds		Gross Gains		Gross Losses
2022	$	22,164	$	651	$	—
2021	33,553		783		—
2020	57,185		2,257		67

The tax provision related to these net realized gains at December 31, 2022, 2021 and 2020 were $137 thousand, $164 thousand, and $460 thousand, respectively.

The following is a schedule of the contractual maturity of securities AFS and HTM, excluding equity securities, at December 31, 2022:


	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
1 year or less	$	4,693	$	4,661	$	5,058	$	4,966
1 year – 5 years	43,759		41,340		242,927		225,060
5 years – 10 years	90,489		77,501		59,726		50,409
After 10 years	24,117		17,681		—		—
	163,058		141,183		307,711		280,435
Residential and multi-family mortgage	256,111		217,547		97,054		86,953
Pooled SBA	13,823		12,679		—		—

Total debt securities	$	432,992	$	371,409	$	404,765	$	367,388

Mortgage securities and pooled SBA securities are not due at a single date; periodic payments are received based on the payment patterns of the underlying collateral.

On December 31, 2022 and 2021, securities carried at $561.8 million and $461.5 million, respectively, were pledged to secure public deposits and for other purposes as provided by law.

At December 31, 2022 and 2021, there were no holdings of securities by any one issuer, other than U.S. Government sponsored entities, in an amount greater than 10% of shareholders’ equity.

AFS debt securities with unrealized losses at December 31, 2022 and 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:


December 31, 2022	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Gov’t sponsored entities	$	3,129	$	(84)	$	—	$	—	$	3,129	$	(84)
State & political subdivisions	34,667		(1,887)		54,546		(15,208)		89,213		(17,095)
Residential & multi-family mortgage	48,996		(3,122)		168,551		(35,442)		217,547		(38,564)
Corporate notes & bonds	31,730		(3,403)		10,661		(1,317)		42,391		(4,720)
Pooled SBA	5,107		(314)		7,572		(830)		12,679		(1,144)

Total	$	123,629	$	(8,810)	$	241,330	$	(52,797)	$	364,959	$	(61,607)


December 31, 2021	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Gov’t sponsored entities	$	23,733	$	(553)	$	37,911	$	(1,215)	$	61,644	$	(1,768)
State & political subdivisions	55,636		(1,399)		5,026		(283)		60,662		(1,682)
Residential and multi-family mortgage	248,690		(4,837)		45,185		(1,676)		293,875		(6,513)
Corporate notes & bonds	6,466		(249)		3,806		(194)		10,272		(443)
Pooled SBA	4,394		(37)		127		(1)		4,521		(38)

Total	$	338,919	$	(7,075)	$	92,055	$	(3,369)	$	430,974	$	(10,444)

HTM debt securities with unrealized losses at December 31, 2022 and 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:


December 31, 2022	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Gov’t sponsored entities	$	143,556	$	(10,063)	$	136,879	$	(17,213)	$	280,435	$	(27,276)
Residential & multi-family mortgage	24,132		(2,253)		62,821		(7,848)		86,953		(10,101)

Total	$	167,688	$	(12,316)	$	199,700	$	(25,061)	$	367,388	$	(37,377)

December 31, 2021

Less than 12 Months

12 Months or More

Total

Description of Securities

Fair
Value

Unrealized
Loss

Fair
Value

Unrealized
Loss

Fair
Value

Unrealized
Loss

U.S. Gov’t sponsored entities

$

—

$

—

$

—

$

—

$

—

$

—

State & political subdivisions

—

Total

$

—

$

—

$

—

$

—

$

—

$

—

The Corporation evaluates securities for possible credit allowance on a quarterly basis, or more frequently when economic or market conditions warrant such an evaluation.

As of December 31, 2022 and 2021, management performed an assessment for allowance for credit losses on the Corporation’s AFS debt securities in an unrealized loss position and as of December 31, 2022 management performed an assessment for allowance for credit losses on the Corporation's HTM debt securities.

First an assessment was performed to determine if the Corporation intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost. Management determined it does not intend to sell and will not be required to sell any of the securities before recovery of its amortized cost. Next, management performed an evaluation relying on information obtained from various sources, including publicly available financial data, ratings by external agencies, brokers and other sources. For the securities that comprise corporate notes and bonds and the securities that are issued by state and political subdivisions, management monitors publicly available financial information, such as filings with the Securities and Exchange Commission, in order to evaluate the securities credit quality and ability to repay its debt obligations. For financial institution issuers, management monitors information from quarterly "call" report filings that are used to generate Uniform Bank Performance Reports. All other securities that were in an unrealized loss position at the balance sheet date were reviewed by management, and issuer-specific documents were reviewed as appropriate given the following considerations; the financial condition and near-term prospects of the issuer and whether downgrades by bond rating agencies have occurred. Based on the results of the assessment, management believes the decline in fair value is not the result of credit losses. As a result no credit allowance is required as of December 31, 2022.

As of December 31, 2022 and 2021 management concluded that the securities described in the previous paragraph did not decline in fair value due to credit factors for the following reasons:

•There is no indication of any significant deterioration of the creditworthiness of the institutions that issued the securities.

•All contractual interest payments on the securities have been received as scheduled, and no information has come to management’s attention through the processes previously described which would lead to a conclusion that future contractual payments will not be timely received.

In addition, the rise in interest rates is the primary driver of the decline in fair value as of December 31, 2022.

Equity securities at December 31, 2022 and 2021 were as follows:


	December 31, 2022		December 31, 2021
Corporate equity securities	$	6,973	$	6,715
Mutual funds	1,406		2,566
Money market	479		506
Corporate notes	757		579

Total	$	9,615	$	10,366

During the year ended December 31, 2022, 2021, and 2020, the proceeds from sold equity securities were zero in December 31, 2022, zero in December 31, 2021 and $5.9 million in December 31, 2020, resulting in net realized gains of zero in December 31, 2022, zero in December 31, 2021, and $75 thousand in December 31, 2020.

Loans Receivable and Allowance for Credit Losses

12 Months Ended

Dec. 31, 2022

Receivables [Abstract]

Loans Receivable and Allowance for Credit Losses

Total net loans receivable at December 31, 2022 and 2021 are summarized as follows:


	2022		Percentage of Total		2021		Percentage of Total
Farmland	$	32,168	0.8	%	$	23,768	0.7	%
Owner-occupied, nonfarm nonresidential properties	468,493		11.0		434,672		12.0
Agricultural production and other loans to farmers	1,198		—		1,379		—
Commercial and Industrial 1	791,911		18.5		708,989		19.5
Obligations (other than securities and leases) of states and political subdivisions	145,345		3.4		140,887		3.9
Other loans	24,710		0.6		13,979		0.4
Other construction loans and all land development and other land loans	446,685		10.5		298,869		8.2
Multifamily (5 or more) residential properties	257,696		6.0		216,143		5.9
Non-owner occupied, nonfarm nonresidential properties	795,315		18.6		663,062		18.2
1-4 Family Construction	51,171		1.2		37,822		1.0
Home equity lines of credit	124,892		2.9		104,517		2.9
Residential Mortgages secured by first liens	942,531		22.0		826,729		22.7
Residential Mortgages secured by junior liens	74,638		1.7		56,689		1.6
Other revolving credit plans	36,372		0.9		26,536		0.7
Automobile	21,806		0.5		20,862		0.6
Other consumer	49,144		1.1		49,676		1.4
Credit cards	10,825		0.3		9,935		0.3
Overdrafts	278		—		278		—
Total loans	$	4,275,178	100.0	%	$	3,634,792	100.0	%
Less: Allowance for credit losses	(43,436)				(37,588)
Loans, net	$	4,231,742			$	3,597,204

Net deferred loan origination fees (costs) included in the above loan table	$	4,463			$	5,667

1 PPP loans, net of deferred PPP processing fees, both those disbursed in 2020 and those disbursed in 2021, are included in the Commercial and Industrial classification.

The Corporation’s outstanding loans receivable and related unfunded commitments are primarily concentrated within Central and Northwest Pennsylvania, Central and Northeast Ohio, Western New York and Southwest Virginia. The Bank attempts to limit concentrations within specific industries by utilizing dollar limitations to single industries or customers, and by entering into participation agreements with third parties. Collateral requirements are established based on management’s assessment of the customer. The Corporation maintains lending policies to control the quality of the loan portfolio. These policies delegate the authority to extend loans under specific guidelines and underwriting standards. These policies are prepared by the Corporation’s management and reviewed and approved annually by the Corporation’s Board of Directors.

During the second quarter of 2020, the Corporation began originating loans to qualified small businesses under the Paycheck Protection Program ("PPP") administered by the Small Business Administration ("SBA") under the provisions of the Coronavirus Aid, Relief, and Economic Security Act. PPP loans, both those disbursed in 2020 and those disbursed in 2021, are included in the commercial and industrial classification and, as the PPP loans are fully guaranteed by the Small Business Administration, no required allowance for credit losses was recorded against the PPP loans, net of deferred PPP processing fees, outstanding of $159 thousand and $45.2 million as of December 31, 2022 and 2021, respectively.

Syndicated loans, net of deferred fees and costs, are included in the commercial and industrial classification and totaled $156.6 million and $125.8 million as of December 31, 2022 and 2021, respectively.

Transactions in the allowance for credit losses for the year ended December 31, 2022 were as follows:


	Beginning Allowance		(Charge-offs)		Recoveries		Provision (Benefit) for Credit Losses on Loans Receivable(1)		Ending Allowance
Farmland	$	151	$	—	$	—	$	8	$	159
Owner-occupied, nonfarm nonresidential properties	3,339		(21)		15		(428)		2,905
Agricultural production and other loans to farmers	9		—		—		(3)		6
Commercial and Industrial	8,837		(175)		139		965		9,766
Obligations (other than securities and leases) of states and political subdivisions	1,649		—		—		214		1,863
Other loans	149		—		—		307		456
Other construction loans and all land development and other land loans	2,198		—		—		1,055		3,253
Multifamily (5 or more) residential properties	2,289		—		—		64		2,353
Non-owner occupied, nonfarm nonresidential properties	6,481		(335)		336		1,171		7,653
1-4 Family Construction	158		—		—		169		327
Home equity lines of credit	1,169		—		12		(8)		1,173
Residential Mortgages secured by first liens	6,943		(51)		28		1,564		8,484
Residential Mortgages secured by junior liens	546		—		—		489		1,035
Other revolving credit plans	528		(92)		50		236		722
Automobile	263		(28)		2		34		271
Other consumer	2,546		(1,623)		89		1,653		2,665
Credit cards	92		(99)		38		36		67
Overdrafts	241		(561)		138		460		278
Total loans	$	37,588	$	(2,985)	$	847	$	7,986	$	43,436

(1) Excludes provision for credit losses related to unfunded commitments. Note 20, "Off-Balance Sheet Commitments and Contingencies," in the consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments of the Corporation.

The Corporation's allowance for credit losses is influenced by loan volumes, risk rating migration, delinquency status and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions.

For the year ended December 31, 2022, the allowance for credit losses increased due to the growth in the Corporation's loan portfolio, including growth in new market areas. This was partially offset by improvements in the Corporation's historical loss rates, as well as the impact of net charge-offs. There is still a significant amount of uncertainty related to the domestic and global economy, continued supply chain challenges, persistent inflation and the COVID-19 pandemic. Management will continue to proactively evaluate its estimate of expected credit losses as new information becomes available.

Transactions in the allowance for credit losses for the year ended December 31, 2021 were as follows:


	Beginning Allowance		(Charge-offs)		Recoveries		Provision (Benefit) for Credit Losses on Loans Receivable(1)		Ending Allowance
Farmland	$	221	$	—	$	—	$	(70)	$	151
Owner-occupied, nonfarm nonresidential properties	3,700		(584)		10		213		3,339
Agricultural production and other loans to farmers	24		—		—		(15)		9
Commercial and Industrial	6,233		(163)		203		2,564		8,837
Obligations (other than securities and leases) of states and political subdivisions	998		(407)		30		1,028		1,649
Other loans	68		—		—		81		149
Other construction loans and all land development and other land loans	1,956		(282)		—		524		2,198
Multifamily (5 or more) residential properties	2,724		—		—		(435)		2,289
Non-owner occupied, nonfarm nonresidential properties	8,658		(49)		—		(2,128)		6,481
1-4 Family Construction	82		—		—		76		158
Home equity lines of credit	985		(7)		5		186		1,169
Residential Mortgages secured by first liens	4,539		(79)		47		2,436		6,943
Residential Mortgages secured by junior liens	241		(3)		—		308		546
Other revolving credit plans	507		(41)		13		49		528
Automobile	132		(26)		3		154		263
Other consumer	2,962		(1,193)		140		637		2,546
Credit cards	66		(112)		18		120		92
Overdrafts	244		(438)		160		275		241
Total loans	$	34,340	$	(3,384)	$	629	$	6,003	$	37,588

(1) Excludes provision for credit losses related to unfunded commitments. Note 20, "Off-Balance Sheet Commitments and Contingencies," in the consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments of the Corporation.

Transactions in the allowance for credit losses for the year ended December 31, 2020 were as follows:


	Beginning Allowance (Before ASC 326 Adoption)		Impact of ASC 326 Adoption		Initial Allowance on Loans Purchased with Credit Deterioration		(Charge-offs)		Recoveries		Provision (Benefit) for Credit Losses on Loans Receivable(1)		Ending Allowance (After ASC 326 Adoption)
Farmland	$	190	$	61	$	—	$	—	$	—	$	(30)	$	221
Owner-occupied, nonfarm nonresidential properties	2,390		(754)		82		(61)		12		2,031		3,700
Agricultural production and other loans to farmers	25		5		—		—		—		(6)		24
Commercial and Industrial	4,105		(631)		216		(2,779)		39		5,283		6,233
Obligations (other than securities and leases) of states and political subdivisions	1,022		(231)		—		—		—		207		998
Other loans	41		8		—		—		—		19		68
Other construction loans and all land development and other land loans	2,327		780		228		—		125		(1,504)		1,956
Multifamily (5 or more) residential properties	1,087		312		24		—		—		1,301		2,724
Non-owner occupied, nonfarm nonresidential properties	3,980		2,547		335		(1,522)		52		3,266		8,658
1-4 Family Construction	56		(35)		—		—		—		61		82
Home equity lines of credit	180		421		22		(6)		1		367		985
Residential Mortgages secured by first liens	1,220		1,100		73		(285)		65		2,366		4,539
Residential Mortgages secured by junior liens	114		135		—		(158)		2		148		241
Other revolving credit plans	296		378		—		(137)		21		(51)		507
Automobile	156		(96)		—		(29)		2		99		132
Other consumer	1,960		1,021		—		(1,513)		130		1,364		2,962
Credit cards	84		(58)		—		(153)		14		179		66
Overdrafts	240		—		—		(435)		185		254		244
Total loans	$	19,473	$	4,963	$	980	$	(7,078)	$	648	$	15,354	$	34,340

(1) Excludes provision for credit losses related to unfunded commitments. Note 20, "Off-Balance Sheet Commitments and Contingencies," in the consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments of the Corporation.

The following tables present the amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing as of December 31, 2022 and 2021, respectively:


	December 31, 2022
	Nonaccrual		Nonaccrual With No Allowance for Credit Loss		Loans Past Due over 89 Days Still Accruing
Farmland	$	1,011	$	1,011	$	994
Owner-occupied, nonfarm nonresidential properties	2,055		1,987		—

Commercial and Industrial	5,485		2,366		71


Other construction loans and all land development and other land loans	567		567		—
Multifamily (5 or more) residential properties	1,066		423		—
Non-owner occupied, nonfarm nonresidential properties	5,081		2,665		—

Home equity lines of credit	475		475		—
Residential Mortgages secured by first liens	4,329		3,882		48
Residential Mortgages secured by junior liens	91		91		—
Other revolving credit plans	26		26		—
Automobile	19		19		—
Other consumer	781		781		—
Credit cards	—		—		8

Total loans	$	20,986	$	14,293	$	1,121


	December 31, 2021
	Nonaccrual		Nonaccrual With No Allowance for Credit Loss		Loans Past Due over 89 Days Still Accruing
Farmland	$	965	$	965	$	—
Owner-occupied, nonfarm nonresidential properties	850		762		—

Commercial and Industrial	7,060		1,653		8


Other construction loans and all land development and other land loans	516		77		—
Multifamily (5 or more) residential properties	1,270		5		—
Non-owner occupied, nonfarm nonresidential properties	3,771		2,143		—

Home equity lines of credit	824		824		—
Residential Mortgages secured by first liens	3,410		3,410		137
Residential Mortgages secured by junior liens	147		147		—
Other revolving credit plans	13		13		—
Automobile	36		36		—
Other consumer	558		558		—
Credit cards	—		—		23

Total loans	$	19,420	$	10,593	$	168

All payments received while on nonaccrual status are applied against the principal balance of the loan. The Corporation does not recognize interest income while loans are on nonaccrual status.

The following tables present the amortized cost basis of loans receivable that are individually evaluated and collateral-dependent by class of loans as of December 31, 2022 and 2021, respectively:


	December 31, 2022
	Real Estate Collateral		Non-Real Estate Collateral
Farmland	$	829	$	—
Owner-occupied, nonfarm nonresidential properties	1,296		4

Commercial and Industrial	—		1,904


Other construction loans and all land development and other land loans	501		—
Multifamily (5 or more) residential properties	1,066		—
Non-owner occupied, nonfarm nonresidential properties	5,874		—

Home equity lines of credit	335		—
Residential Mortgages secured by first liens	1,150		—






Total loans	$	11,051	$	1,908


	December 31, 2021
	Real Estate Collateral		Non-Real Estate Collateral
Farmland	$	920	$	—
Owner-occupied, nonfarm nonresidential properties	194		9

Commercial and Industrial	1,488		2,351


Other construction loans and all land development and other land loans	438		—
Multifamily (5 or more) residential properties	1,265		—
Non-owner occupied, nonfarm nonresidential properties	3,378		—


Residential Mortgages secured by first liens	435		—






Total loans	$	8,118	$	2,360

The following table presents the aging of the amortized cost basis in past-due loans as of December 31, 2022 by class of loans:


	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater Than 89 Days Past Due		Total Past Due		Loans Not Past Due		Total
Farmland	$	—	$	—	$	1,136	$	1,136	$	31,032	$	32,168
Owner-occupied, nonfarm nonresidential properties	185		27		734		946		467,547		468,493
Agricultural production and other loans to farmers	—		—		—		—		1,198		1,198
Commercial and Industrial	246		93		611		950		790,961		791,911
Obligations (other than securities and leases) of states and political subdivisions	—		—		—		—		145,345		145,345
Other loans	—		—		—		—		24,710		24,710
Other construction loans and all land development and other land loans	1,522		—		501		2,023		444,662		446,685
Multifamily (5 or more) residential properties	706		—		90		796		256,900		257,696
Non-owner occupied, nonfarm nonresidential properties	113		60		879		1,052		794,263		795,315
1-4 Family Construction	—		—		—		—		51,171		51,171
Home equity lines of credit	203		10		49		262		124,630		124,892
Residential Mortgages secured by first liens	1,302		538		1,775		3,615		938,916		942,531
Residential Mortgages secured by junior liens	5		—		51		56		74,582		74,638
Other revolving credit plans	65		27		—		92		36,280		36,372
Automobile	36		—		—		36		21,770		21,806
Other consumer	361		188		473		1,022		48,122		49,144
Credit cards	196		18		8		222		10,603		10,825
Overdrafts	—		—		—		—		278		278
Total loans	$	4,940	$	961	$	6,307	$	12,208	$	4,262,970	$	4,275,178

The following table presents the aging of the amortized cost basis in past-due loans as of December 31, 2021 by class of loans.


	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater Than 89 Days Past Due		Total Past Due		Loans Not Past Due		Total
Farmland	$	348	$	—	$	—	$	348	$	23,420	$	23,768
Owner-occupied, nonfarm nonresidential properties	278		18		414		710		433,962		434,672
Agricultural production and other loans to farmers	—		—		—		—		1,379		1,379
Commercial and Industrial	377		13		333		723		708,266		708,989
Obligations (other than securities and leases) of states and political subdivisions	—		—		—		—		140,887		140,887
Other loans	—		—		—		—		13,979		13,979
Other construction loans and all land development and other land loans	—		—		77		77		298,792		298,869
Multifamily (5 or more) residential properties	—		10		209		219		215,924		216,143
Non-owner occupied, nonfarm nonresidential properties	—		—		1,792		1,792		661,270		663,062
1-4 Family Construction	—		—		—		—		37,822		37,822
Home equity lines of credit	506		50		172		728		103,789		104,517
Residential Mortgages secured by first liens	1,286		1,145		1,647		4,078		822,651		826,729
Residential Mortgages secured by junior liens	32		24		1		57		56,632		56,689
Other revolving credit plans	56		17		4		77		26,459		26,536
Automobile	45		3		23		71		20,791		20,862
Other consumer	283		158		295		736		48,940		49,676
Credit cards	26		12		23		61		9,874		9,935
Overdrafts	—		—		—		—		278		278
Total loans	$	3,237	$	1,450	$	4,990	$	9,677	$	3,625,115	$	3,634,792

Troubled Debt Restructurings

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without a loan modification. This evaluation is performed using the Corporation’s internal underwriting policies. The Corporation has no further loan commitments to customers whose loan receivables are classified as a TDR.

During the years ended December 31, 2022 and 2021, the terms of certain loans were modified as TDRs. The modification of the terms of such loans included either or both of the following: a reduction of the stated interest rate of the loan; or an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk. The Corporation had an amortized cost in troubled debt restructurings of $12.4 million and $16.6 million as of December 31, 2022 and 2021, respectively. The Corporation has allocated $2.2 million and $2.6 million of allowance for those loans as of December 31, 2022 and 2021, respectively.

The following table presents loans by class modified as troubled debt restructurings that occurred during the years ended December 31, 2022, 2021, and 2020:


	Year Ended December 31, 2022
	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Type of Modification



Commercial and Industrial	1	$	96	$	96	Extend Amortization




Non-owner occupied, nonfarm nonresidential properties	1	1,784		1,784		Modify Rate and Extend Amortization









Total loans	2	$	1,880	$	1,880


	Year Ended December 31, 2021
	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Type of Modification



Commercial and Industrial	2	$	3,336	$	3,336	Modify Payment



Multifamily (5 or more) residential properties	1	717		717		Modify Payment
Non-owner occupied, nonfarm nonresidential properties	1	1,604		1,604		Modify Payment









Total loans	4	$	5,657	$	5,657


	Year Ended December 31, 2020
	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Type of Modification

Owner-occupied, nonfarm nonresidential properties	1	$	260	$	260	Modify Payment

Commercial and Industrial	6	1,140		1,140		Modify Payment


Other construction loans and all land development and other land loans	1	46		46		Modify Rate and Extend Amortization

Non-owner occupied, nonfarm nonresidential properties	1	3,684		3,684		Modify Rate and Modify Payment


Residential Mortgages secured by first liens	2	309		309		Modify Payment






Total loans	11	$	5,439	$	5,439

The TDRs described above increased the allowance for credit losses by immaterial amounts for the years ended December 31, 2022, 2021, and 2020, respectively.

A loan receivable is considered to be in payment default once it is 90 days contractually past due under the modified terms. There were no loans receivable modified as TDRs for which there was a payment default within twelve months following the modification during the years ended December 31, 2022, 2021 and 2020, respectively, and no principal balances were forgiven in connection with the loan receivable restructurings.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without a loan modification. This evaluation is performed using the Corporation’s internal underwriting policies. The Corporation has no further loan commitments to customers whose loans are classified as a troubled debt restructuring.

Generally, nonperforming TDRs are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectability of the total contractual principal and interest is no longer in doubt.

Credit Quality Indicators

The Corporation categorizes loans receivable into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Corporation analyzes loans individually to classify the loans as to credit risk.

The Corporation uses the following definitions for risk ratings:

Special Mention: A loan classified as special mention has a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Corporation’s credit position at some future date.

Substandard: A loan classified as substandard is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. The loan has a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. A substandard loan is characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected.

Doubtful: A loan classified as doubtful has all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

The following tables represent the Corporation's commercial credit risk profile by risk rating as of December 31, 2022 and 2021, respectively. Loans receivable not rated as special mention, substandard, or doubtful are considered to be pass rated loans.


	December 31, 2022
			Non-Pass Rated
	Pass		Special Mention		Substandard		Doubtful		Total Non-Pass		Total
Farmland	$	29,706	$	1,450	$	1,012	$	—	$	2,462	$	32,168
Owner-occupied, nonfarm nonresidential properties	433,467		27,796		7,230		—		35,026		468,493
Agricultural production and other loans to farmers	1,198		—		—		—		—		1,198
Commercial and Industrial	765,821		14,740		10,037		1,313		26,090		791,911
Obligations (other than securities and leases) of states and political subdivisions	145,345		—		—		—		—		145,345
Other loans	24,710		—		—		—		—		24,710
Other construction loans and all land development and other land loans	443,300		1,296		2,089		—		3,385		446,685
Multifamily (5 or more) residential properties	256,120		510		1,066		—		1,576		257,696
Non-owner occupied, nonfarm nonresidential properties	772,450		2,791		20,074		—		22,865		795,315









Total loans	$	2,872,117	$	48,583	$	41,508	$	1,313	$	91,404	$	2,963,521


	December 31, 2021
			Non-Pass Rated
	Pass		Special Mention		Substandard		Doubtful		Total Non-Pass		Total
Farmland	$	21,286	$	1,514	$	968	$	—	$	2,482	$	23,768
Owner-occupied, nonfarm nonresidential properties	419,368		6,723		8,581		—		15,304		434,672
Agricultural production and other loans to farmers	1,379		—		—		—		—		1,379
Commercial and Industrial	687,010		7,946		12,654		1,379		21,979		708,989
Obligations (other than securities and leases) of states and political subdivisions	140,887		—		—		—		—		140,887
Other loans	13,979		—		—		—		—		13,979
Other construction loans and all land development and other land loans	294,103		4,221		545		—		4,766		298,869
Multifamily (5 or more) residential properties	214,772		100		1,271		—		1,371		216,143
Non-owner occupied, nonfarm nonresidential properties	631,534		9,628		21,900		—		31,528		663,062









Total loans	$	2,424,318	$	30,132	$	45,919	$	1,379	$	77,430	$	2,501,748

The following tables detail the amortized cost of loans receivable, by year of origination (for term loans) and by risk grade within each portfolio segment as of December 31, 2022. The current period originations may include modifications, extensions and renewals.


	Term Loans Amortized Cost Basis by Origination Year
	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Farmland
Risk rating
Pass	$	12,321	$	7,635	$	1,536	$	871	$	3,277	$	3,523	$	543	$	—	$	29,706
Special mention	—		—		—		—		—		1,450		—		—		1,450
Substandard	—		347		—		—		142		523		—		—		1,012
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	12,321	$	7,982	$	1,536	$	871	$	3,419	$	5,496	$	543	$	—	$	32,168
Owner-occupied, nonfarm nonresidential properties
Risk rating
Pass	$	116,701	$	113,575	$	50,226	$	55,040	$	25,327	$	60,810	$	11,788	$	—	$	433,467
Special mention	3,402		—		15,613		872		4,097		814		2,998		—		27,796
Substandard	—		—		355		1,864		862		4,149		—		—		7,230
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	120,103	$	113,575	$	66,194	$	57,776	$	30,286	$	65,773	$	14,786	$	—	$	468,493
Agricultural production and other loans to farmers
Risk rating
Pass	$	105	$	140	$	80	$	42	$	179	$	—	$	652	$	—	$	1,198
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	105	$	140	$	80	$	42	$	179	$	—	$	652	$	—	$	1,198
Commercial and Industrial
Risk rating
Pass	$	195,955	$	213,433	$	51,695	$	16,730	$	9,051	$	19,116	$	259,841	$	—	$	765,821
Special mention	241		—		6,691		273		81		45		7,409		—		14,740
Substandard	299		1,809		689		379		324		913		5,624		—		10,037
Doubtful(1)	—		1,313		—		—		—		—		—		—		1,313
Total	$	196,495	$	216,555	$	59,075	$	17,382	$	9,456	$	20,074	$	272,874	$	—	$	791,911
Obligations (other than securities and leases) of states and political subdivisions
Risk rating
Pass	$	20,840	$	37,527	$	13,868	$	4,584	$	13,518	$	50,050	$	4,958	$	—	$	145,345
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	20,840	$	37,527	$	13,868	$	4,584	$	13,518	$	50,050	$	4,958	$	—	$	145,345
Other loans
Risk rating
Pass	$	14,248	$	5,358	$	2,278	$	363	$	—	$	—	$	2,463	$	—	$	24,710
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	14,248	$	5,358	$	2,278	$	363	$	—	$	—	$	2,463	$	—	$	24,710

(1) Consists of one loan relationship that was originated in 2015 and modified in 2021. The modification met the requirements to disclose the loan relationship as a new loan during the current period.


	Term Loans Amortized Cost Basis by Origination Year
	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Other construction loans and all land development and other land loans
Risk rating
Pass	$	272,118	$	86,894	$	56,782	$	6,918	$	8,644	$	916	$	11,028	$	—	$	443,300
Special mention	1,296		0		—		—		—		—		—		—		1,296
Substandard	—		2,023		—		—		—		—		66		—		2,089
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	273,414	$	88,917	$	56,782	$	6,918	$	8,644	$	916	$	11,094	$	—	$	446,685
Multifamily (5 or more) residential properties
Risk rating
Pass	$	114,454	$	49,794	$	46,784	$	11,854	$	6,764	$	23,841	$	2,629	$	—	$	256,120
Special mention	—		—		—		—		—		510		—		—		510
Substandard	643		—		—		—		333		90		—		—		1,066
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	115,097	$	49,794	$	46,784	$	11,854	$	7,097	$	24,441	$	2,629	$	—	$	257,696
Non-owner occupied, nonfarm nonresidential properties
Risk rating
Pass	$	339,151	$	153,613	$	51,709	$	66,592	$	45,211	$	107,988	$	8,186	$	—	$	772,450
Special mention	—		488		—		273		498		1,068		464		—		2,791
Substandard	2,227		800		—		4,090		1,314		9,587		2,056		—		20,074
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	341,378	$	154,901	$	51,709	$	70,955	$	47,023	$	118,643	$	10,706	$	—	$	795,315

The following tables detail the amortized cost of loans receivable, by year of origination (for term loans) and by risk grade within each portfolio segment as of December 31, 2021. The current period originations may include modifications, extensions and renewals.


	Term Loans Amortized Cost Basis by Origination Year
	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Farmland
Risk rating
Pass	$	8,203	$	1,690	$	3,276	$	3,547	$	564	$	3,545	$	461	$	—	$	21,286
Special mention	—		—		—		—		394		1,120		—		—		1,514
Substandard	388		—		—		—		48		532		—		—		968
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	8,591	$	1,690	$	3,276	$	3,547	$	1,006	$	5,197	$	461	$	—	$	23,768
Owner-occupied, nonfarm nonresidential properties
Risk rating
Pass	$	135,095	$	78,068	$	78,621	$	29,100	$	40,677	$	50,079	$	7,728	$	—	$	419,368
Special mention	243		—		903		4,287		135		1,145		10		—		6,723
Substandard	687		416		2,190		868		250		4,152		18		—		8,581
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	136,025	$	78,484	$	81,714	$	34,255	$	41,062	$	55,376	$	7,756	$	—	$	434,672
Agricultural production and other loans to farmers
Risk rating
Pass	$	211	$	103	$	76	$	198	$	—	$	—	$	791	$	—	$	1,379
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful(1)	—		—		—		—		—		—		—		—		—
Total	$	211	$	103	$	76	$	198	$	—	$	—	$	791	$	—	$	1,379
Commercial and Industrial
Risk rating
Pass	$	313,983	$	84,815	$	31,375	$	16,577	$	12,389	$	6,777	$	221,094	$	—	$	687,010
Special mention	—		363		793		381		82		844		5,483		—		7,946
Substandard	1,991		800		1,862		452		29		2,016		5,504		—		12,654
Doubtful	1,379		—		—		—		—		—		—		—		1,379
Total	$	317,353	$	85,978	$	34,030	$	17,410	$	12,500	$	9,637	$	232,081	$	—	$	708,989
Obligations (other than securities and leases) of states and political subdivisions
Risk rating
Pass	$	36,853	$	16,688	$	8,774	$	16,957	$	20,071	$	36,764	$	4,780	$	—	$	140,887
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	36,853	$	16,688	$	8,774	$	16,957	$	20,071	$	36,764	$	4,780	$	—	$	140,887
Other loans
Risk rating
Pass	$	5,851	$	5,305	$	552	$	3	$	—	$	—	$	2,268	$	—	$	13,979
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	5,851	$	5,305	$	552	$	3	$	—	$	—	$	2,268	$	—	$	13,979

(1) Consists of one loan relationship that was originated in 2015 and modified in 2021. The modification met the requirements to disclose the loan relationship as a new loan during the current period.


	Term Loans Amortized Cost Basis by Origination Year
	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Other construction loans and all land development and other land loans
Risk rating
Pass	$	98,406	$	168,372	$	8,752	$	11,141	$	853	$	898	$	5,681	$	—	$	294,103
Special mention	1,500		—		650		—		2,071		—		—		—		4,221
Substandard	—		—		—		29		439		—		77		—		545
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	99,906	$	168,372	$	9,402	$	11,170	$	3,363	$	898	$	5,758	$	—	$	298,869
Multifamily (5 or more) residential properties
Risk rating
Pass	$	74,687	$	55,663	$	33,436	$	7,937	$	27,729	$	12,882	$	2,438	$	—	$	214,772
Special mention	—		—		—		—		—		100		—		—		100
Substandard	—		6		682		379		204		—		—		—		1,271
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	74,687	$	55,669	$	34,118	$	8,316	$	27,933	$	12,982	$	2,438	$	—	$	216,143
Non-owner occupied, nonfarm nonresidential properties
Risk rating
Pass	$	194,800	$	125,039	$	84,943	$	52,233	$	42,714	$	123,021	$	8,784	$	—	$	631,534
Special mention	—		—		428		1,004		189		5,556		2,451		—		9,628
Substandard	826		—		2,305		1,662		4,638		12,134		335		—		21,900
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	195,626	$	125,039	$	87,676	$	54,899	$	47,541	$	140,711	$	11,570	$	—	$	663,062

The Corporation considers the performance of the loan portfolio and its impact on the allowance for credit losses. For 1-4 family construction, home equity lines of credit, residential mortgages secured by first liens, residential mortgages secured by junior liens, automobile, credit cards, other revolving credit plans and other consumer segments, the Corporation evaluates credit quality based on the performance status of the loan, which was previously presented, and by payment activity. Nonperforming loans include loans receivable on nonaccrual status and loans receivable past due over 89 days and still accruing interest.


	December 31, 2022						December 31, 2021
	Performing		Nonperforming		Total		Performing		Nonperforming		Total









1-4 Family Construction	$	51,171	$	—	$	51,171	$	37,822	$	—	$	37,822
Home equity lines of credit	124,417		475		124,892		103,693		824		104,517
Residential Mortgages secured by first liens	938,154		4,377		942,531		823,182		3,547		826,729
Residential Mortgages secured by junior liens	74,547		91		74,638		56,542		147		56,689
Other revolving credit plans	36,346		26		36,372		26,523		13		26,536
Automobile	21,787		19		21,806		20,826		36		20,862
Other consumer	48,363		781		49,144		49,118		558		49,676


Total loans	$	1,294,785	$	5,769	$	1,300,554	$	1,117,706	$	5,125	$	1,122,831

The following tables detail the amortized cost of loans receivable, by year of origination (for term loans) and by payment activity within each portfolio segment as of December 31, 2022. The current period originations may include modifications, extensions and renewals.


	Term Loans Amortized Cost Basis by Origination Year
	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
1-4 Family Construction
Payment performance
Performing	$	30,451	$	16,360	$	2,577	$	752	$	62	$	—	$	969	$	—	$	51,171
Nonperforming	—		—		—		—		—		—		—		—		—
Total	$	30,451	$	16,360	$	2,577	$	752	$	62	$	—	$	969	$	—	$	51,171
Home equity lines of credit
Payment performance
Performing	$	34,738	$	13,654	$	12,903	$	8,587	$	7,924	$	38,127	$	8,484	$	—	$	124,417
Nonperforming	—		—		—		10		—		465		—		—		475
Total	$	34,738	$	13,654	$	12,903	$	8,597	$	7,924	$	38,592	$	8,484	$	—	$	124,892
Residential mortgages secured by first lien
Payment performance
Performing	$	229,842	$	222,522	$	159,651	$	91,238	$	49,587	$	181,939	$	3,375	$	—	$	938,154
Nonperforming	—		771		273		581		416		2,150		186		—		4,377
Total	$	229,842	$	223,293	$	159,924	$	91,819	$	50,003	$	184,089	$	3,561	$	—	$	942,531
Residential mortgages secured by junior liens
Payment performance
Performing	$	31,837	$	17,163	$	8,326	$	4,956	$	3,073	$	8,395	$	797	$	—	$	74,547
Nonperforming	—		—		—		—		—		47		44		—		91
Total	$	31,837	$	17,163	$	8,326	$	4,956	$	3,073	$	8,442	$	841	$	—	$	74,638
Other revolving credit plans
Payment performance
Performing	$	10,778	$	2,820	$	7,911	$	2,264	$	2,265	$	10,308	$	—	$	—	$	36,346
Nonperforming	—		—		—		4		14		8		—		—		26
Total	$	10,778	$	2,820	$	7,911	$	2,268	$	2,279	$	10,316	$	—	$	—	$	36,372
Automobile
Payment performance
Performing	$	10,146	$	4,637	$	2,945	$	2,349	$	1,117	$	593	$	—	$	—	$	21,787
Nonperforming	—		—		10		7		2		—		—		—		19
Total	$	10,146	$	4,637	$	2,955	$	2,356	$	1,119	$	593	$	—	$	—	$	21,806
Other consumer
Payment performance
Performing	$	26,699	$	12,120	$	5,333	$	2,176	$	776	$	1,259	$	—	$	—	$	48,363
Nonperforming	403		220		85		22		6		45		—		—		781
Total	$	27,102	$	12,340	$	5,418	$	2,198	$	782	$	1,304	$	—	$	—	$	49,144

The following tables detail the amortized cost of loans receivable, by year of origination (for term loans) and by payment activity within each portfolio segment as of December 31, 2021. The current period originations may include modifications, extensions and renewals.


	Term Loans Amortized Cost Basis by Origination Year
	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
1-4 Family Construction
Payment performance
Performing	$	27,539	$	9,137	$	857	$	66	$	—	$	—	$	223	$	—	$	37,822
Nonperforming	—		—		—		—		—		—		—		—		—
Total	$	27,539	$	9,137	$	857	$	66	$	—	$	—	$	223	$	—	$	37,822
Home equity lines of credit
Payment performance
Performing	$	14,383	$	14,621	$	9,564	$	10,584	$	6,863	$	39,527	$	8,151	$	—	$	103,693
Nonperforming	—		—		9		10		377		428		—		—		824
Total	$	14,383	$	14,621	$	9,573	$	10,594	$	7,240	$	39,955	$	8,151	$	—	$	104,517
Residential mortgages secured by first lien
Payment performance
Performing	$	232,606	$	178,380	$	111,333	$	62,850	$	74,136	$	160,402	$	3,475	$	—	$	823,182
Nonperforming	79		259		227		151		258		2,379		194		—		3,547
Total	$	232,685	$	178,639	$	111,560	$	63,001	$	74,394	$	162,781	$	3,669	$	—	$	826,729
Residential mortgages secured by junior liens
Payment performance
Performing	$	20,617	$	11,256	$	7,239	$	4,407	$	3,508	$	9,095	$	420	$	—	$	56,542
Nonperforming	—		—		—		—		84		63		—		—		147
Total	$	20,617	$	11,256	$	7,239	$	4,407	$	3,592	$	9,158	$	420	$	—	$	56,689
Other revolving credit plans
Payment performance
Performing	$	5,313	$	3,596	$	3,090	$	2,592	$	2,977	$	8,955	$	—	$	—	$	26,523
Nonperforming	—		—		4		4		—		5		—		—		13
Total	$	5,313	$	3,596	$	3,094	$	2,596	$	2,977	$	8,960	$	—	$	—	$	26,536
Automobile
Payment performance
Performing	$	7,047	$	5,448	$	4,668	$	2,457	$	682	$	524	$	—	$	—	$	20,826
Nonperforming	11		13		12		—		—		—		—		—		36
Total	$	7,058	$	5,461	$	4,680	$	2,457	$	682	$	524	$	—	$	—	$	20,862
Other consumer
Payment performance
Performing	$	30,423	$	11,017	$	4,537	$	1,451	$	316	$	1,374	$	—	$	—	$	49,118
Nonperforming	204		170		96		25		3		60		—		—		558
Total	$	30,627	$	11,187	$	4,633	$	1,476	$	319	$	1,434	$	—	$	—	$	49,676


	December 31, 2022		December 31, 2021

Credit card
Payment performance
Performing	$	10,817	$	9,912
Nonperforming	8		23
Total	$	10,825	$	9,935

Purchased Credit Deteriorated Loans

The Corporation has purchased loans for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of those loans is as follows:


	July 17, 2020
Purchase price of loans at acquisition	$	21,768
Allowance for credit losses at acquisition	980
Non-credit discount / (premium) at acquisition	1,063
Par value of acquired loans at acquisition	$	23,811

Holiday’s loan portfolio, included in other consumer loans above, is summarized as follows at December 31, 2022 and 2021:


	December 31, 2022		December 31, 2021
Gross consumer loans	$	31,821	$	29,227

Less: unearned discounts	(5,972)		(5,716)
Total consumer loans, net of unearned discounts	$	25,849	$	23,511

Real Estate Owned

12 Months Ended

Dec. 31, 2022

Real Estate [Abstract]

Real Estate Owned

Real estate owned is reported net of a valuation allowance and included in accrued interest receivable and other assets in the accompanying consolidated balance sheets. Activity for the years ended December 31, 2022, 2021, and 2020 were as follows:


	December 31, 2022		December 31, 2021		December 31, 2020
Balance, beginning of year	$	707	$	862	$	1,633

Loans transferred to real estate owned	785		1,470		241
Sales of real estate owned (at carrying value)	(53)		(1,625)		(1,012)
Balance, end of year	$	1,439	$	707	$	862

Expenses related to foreclosed real estate include:


	December 31, 2022		December 31, 2021		December 31, 2020
Net loss (gain) on sales	$	(45)	$	32	$	346
Operating expenses, net of rental income	104		85		240
Total	$	59	$	117	$	586

Fair Value

12 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value

Fair Value Measurement

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

The following three levels of inputs are used to measure fair value:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Corporation used the following methods and significant assumptions to estimate fair value:

Investment Securities: The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2), using matrix pricing. Matrix pricing is a mathematical technique commonly used to price debt securities that are not actively traded, values debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3).

Loans Held for Sale: Loans held for sale are carried at the lower of cost or fair value, which is evaluated on a loan-level basis. The fair value of loans held for sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan or other observable market data, such as outstanding commitments from third party investors (Level 2).

Derivatives: The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2). The Corporation's derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services.

Individually Evaluated Loans: The fair value of individually evaluated loans with specific allocations of the allowance for credit losses is generally based on recent real estate appraisals prepared by third-parties. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Management also adjusts appraised values based on the length of time that has passed since the appraisal date and other factors. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower's financial statements, or aging reports, adjusted or discounted based on management's historical knowledge, changes in market conditions from the time of the valuation, and management's expertise and knowledge of the client and client's business, resulting in a Level 3 fair value classification. Individually evaluated loans are evaluated on a quarterly basis for additional impairment and adjusted in accordance with the allowance policy.

Assets and liabilities measured at fair value on a recurring basis were as follows at December 31, 2022 and 2021:


			Fair Value Measurements at December 31, 2022 Using
Description	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Securities Available-For-Sale:
U.S. Government sponsored entities	$	3,129	$	—	$	3,129	$	—
States and political subdivisions	95,663		—		95,663		—
Residential and multi-family mortgage	217,547		—		217,547		—
Corporate notes and bonds	42,391		—		42,391		—
Pooled SBA	12,679		—		12,679		—

Total Securities Available-For-Sale	$	371,409	$	—	$	371,409	$	—
Interest rate swaps	$	1,850	$	—	$	1,850	$	—
Equity Securities:
Corporate equity securities	$	6,973	$	6,973	$	—	$	—
Mutual funds	1,406		1,406		—		—
Money market	479		479		—		—
Corporate notes and bonds	757		757		—		—

Total Equity Securities	$	9,615	$	9,615	$	—	$	—
Liabilities
Interest rate swaps	$	(1,700)	$	—	$	(1,700)	$	—


			Fair Value Measurements at December 31, 2021 Using
Description	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Securities Available-For-Sale:
U.S. Government sponsored entities	$	111,748	$	—	$	111,748	$	—
States and political subdivisions	103,712		—		103,712		—
Residential and multi-family mortgage	434,635		4,995		429,640		—
Corporate notes and bonds	28,064		—		28,064		—
Pooled SBA	19,032		—		19,032		—

Total Securities Available-For-Sale	$	697,191	$	4,995	$	692,196	$	—
Interest rate swaps	$	2,124	$	—	$	2,124	$	—
Equity Securities:
Corporate equity securities	$	6,715	$	6,715	$	—	$	—
Mutual funds	2,566		2,566		—		—
Money market	506		506		—		—
Corporate notes and bonds	579		579		—		—

Total Equity Securities	$	10,366	$	10,366	$	—	$	—
Liabilities
Interest rate swaps	$	(2,512)	$	—	$	(2,512)	$	—

The table below presents a reconciliation of the fair value of securities AFS measured on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2021:


	States and Political Subdivisions		Corporate Notes and Bonds
Balance, January 1, 2021	$	64	$	—
Purchases	—		8,250
Total gains or (losses):
Included in other comprehensive income (loss)	—		—
Settlements	(64)		—
Transfers out of Level 3	—		(8,250)
Balance, December 31, 2021	$	—	$	—

The Corporation's corporate notes and bonds with a fair value of $8.3 million for the year ended December 31, 2021 were transferred out of Level 3 and into Level 2 because of available observable market data for these investments.

The table below presents a reconciliation of the fair value of securities AFS measured on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2020:


	States and Political Subdivisions		Residential & Multi-Family Mortgage
Balance, January 1, 2020	$	—	$	2,795
Purchases	422		—
Total gains or (losses):
Included in other comprehensive income (loss)	—		—
Transfers out of Level 3	(358)		$	(2,795)
Balance, December 31, 2020	$	64	$	—

The Corporation's states and political subdivisions with a fair value of $358 thousand and residential and multi-family mortgage of $2.8 million for the year ended December 31, 2020 were transferred out of Level 3 and into Level 2 because of available observable market data for these investments.

Assets and liabilities measured at fair value on a non-recurring basis are as follows at December 31, 2022 and 2021:


			Fair Value Measurements at December 31, 2022 Using
Description	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Collateral-dependent loans:
Farmland	$	829	$	—	$	—	$	829
Owner-occupied, nonfarm nonresidential properties	1,071		—		—		1,071
Commercial and industrial	1,631		—		—		1,631
Other construction loans and all land development loans and other land loans	501		—		—		501
Multifamily (5 or more) residential properties	613		—		—		613
Non-owner occupied, nonfarm nonresidential	3,867		—		—		3,867
Home equity lines of credit	335		—		—		335
Residential mortgages secured by first liens	944		—		—		944


			Fair Value Measurements at December 31, 2021 Using
Description	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Collateral-dependent loans:
Farmland	$	920	$	—	$	—	$	920
Owner-occupied, nonfarm nonresidential properties	194		—		—		194
Commercial and industrial	3,102		—		—		3,102
Other construction loans and all land development loans and other land loans	248		—		—		248
Multifamily (5 or more) residential properties	627		—		—		627
Non-owner occupied, nonfarm nonresidential	2,889		—		—		2,889

A loan is considered to be a collateral dependent loan when, based on current information and events, the Corporation expects repayment of the financial assets to be provided substantially through the operation or sale of the collateral and the Corporation has determined that the borrower is experiencing financial difficulty as of the measurement date. The allowance for credit losses is measured by estimating the fair value of the loan based on the present value of expected cash flows, the market price of the loan, or the underlying fair value of the loan’s collateral. For real estate loans, fair value of the loan’s collateral is determined by third-party appraisals, which are then adjusted for the estimated selling and closing costs related to liquidation of the collateral. For this asset class, the actual valuation methods (income, sales comparable, or cost) vary based on the status of the project or property. For example, land is generally based on the sales comparable method while construction is based on the income and/or sales comparable methods. The unobservable inputs may vary depending on the individual assets with no one of the three methods being the predominant approach. The Corporation reviews the third-party appraisal for appropriateness and may adjust the value downward to consider selling and closing costs. For non-real estate loans, fair value of the loan’s collateral may be determined using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business.

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2022:

Fair
value

Valuation
Technique

Unobservable Inputs

Range
(Weighted
Average)

Collateral-dependent loans receivable:

Farmland

$

829

Valuation of third party appraisal on underlying collateral

Loss severity rates

20% (20%)

Owner-occupied, nonfarm nonresidential properties

1,071

Valuation of third party appraisal on underlying collateral

Loss severity rates

25%-100% (29%)

Commercial and industrial

1,631

Valuation of third party appraisal on underlying collateral

Loss severity rates

3%-49% (23%)

Other construction loans and all land development loans and other land loans

501

Valuation of third party appraisal on underlying collateral

Loss severity rates

33% (33%)

Multifamily (5 or more) residential properties

613

Valuation of third party appraisal on underlying collateral

Loss severity rates

19%-25% (23%)

Non-owner occupied, nonfarm nonresidential

3,867

Valuation of third party appraisal on underlying collateral

Loss severity rates

15%-53% (35%)

Home equity lines of credit

335

Valuation of third party appraisal on underlying collateral

Loss severity rates

15% (15%)

Residential mortgages secured by first liens

944

Valuation of third party appraisal on underlying collateral

Loss severity rates

15%-27% (21%)

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2021:

Fair
value

Valuation
Technique

Unobservable Inputs

Range
(Weighted
Average)

Collateral-dependent loans receivable:

Farmland

$

920

Valuation of third party appraisal on underlying collateral

Loss severity rates

60% (60%)

Owner-occupied, nonfarm nonresidential properties

194

Valuation of third party appraisal on underlying collateral

Loss severity rates

0%-60% (57%)

Commercial and industrial

3,102

Valuation of third party appraisal on underlying collateral

Loss severity rates

0%-59% (42%)

Other construction loans and all land development loans and other land loans

248

Valuation of third party appraisal on underlying collateral

Loss severity rates

25% (25%)

Multifamily (5 or more) residential properties

627

Valuation of third party appraisal on underlying collateral

Loss severity rates

0%-57% (26%)

Non-owner occupied, nonfarm nonresidential

2,889

Valuation of third party appraisal on underlying collateral

Loss severity rates

25%-60% (34%)

Fair Value of Financial Instruments

The following table presents the carrying amount and fair value of financial instruments at December 31, 2022:


	Carrying Amount		Fair Value Measurement Using:						Total Fair Value
			Level 1		Level 2		Level 3
ASSETS
Cash and cash equivalents	$	106,285	$	106,285	$	—	$	—	$	106,285
Debt securities available-for-sale	371,409		—		371,409		—		371,409
Debt securities held-to-maturity	404,765		—		367,388		—		367,388
Equity securities	9,615		9,615		—		—		9,615
Loans held for sale	231		—		231		—		231
Net loans receivable	4,231,742		—		—		4,157,843		4,157,843
FHLB and other restricted stock holdings and investments	30,715		n/a		n/a		n/a		n/a
Interest rate swaps	1,850		—		1,850		—		1,850
Accrued interest receivable	20,194		—		2,867		17,327		20,194
LIABILITIES
Deposits	$	(4,622,437)	$	(4,175,976)	$	(445,788)	$	—	$	(4,621,764)
Short-term borrowings	(132,396)		—		(132,396)		—		(132,396)
Subordinated debentures	(104,584)		—		(117,378)		—		(117,378)
Interest rate swaps	(1,700)		—		(1,700)		—		(1,700)
Accrued interest payable	(1,839)		—		(1,839)		—		(1,839)

The following table presents the carrying amount and fair value of financial instruments at December 31, 2021:


	Carrying Amount		Fair Value Measurement Using:						Total Fair Value
			Level 1		Level 2		Level 3
ASSETS
Cash and cash equivalents	$	732,198	$	732,198	$	—	$	—	$	732,198
Securities available-for-sale	697,191		4,995		692,196		—		697,191
Equity securities	10,366		10,366		—		—		10,366
Loans held for sale	849		—		858		—		858
Net loans	3,597,204		—		—		3,613,452		3,613,452
FHLB and other equity interests	23,276		n/a		n/a		n/a		n/a
Interest rate swaps	2,124		—		2,124		—		2,124
Accrued interest receivable	15,516		16		2,171		13,329		15,516
LIABILITIES
Deposits	$	(4,715,619)	$	(4,329,167)	$	(391,850)	$	—	$	(4,721,017)

Subordinated debentures	(104,281)		—		(92,675)		—		(92,675)
Interest rate swaps	(2,512)		—		(2,512)		—		(2,512)
Accrued interest payable	(886)		—		(886)		—		(886)

While estimates of fair value are based on management’s judgment of the most appropriate factors as of the balance sheet dates, there is no assurance that the estimated fair values would have been realized if the assets had been disposed of or the liabilities settled at that date, since market values may differ depending on various circumstances. The estimated fair values would also not apply to subsequent dates. The fair value of other equity interests is based on the net asset values provided by the underlying investment partnership. ASU 2015-7 removes the requirement to categorize within the fair value hierarchy all investments measured using the net asset value per share practical expedient and related disclosures. In addition, other assets and liabilities that are not financial instruments, such as premises and equipment, are not included in the disclosures.

Also, non-financial assets such as, among other things, the estimated earnings power of core deposits, the earnings potential of trust accounts, the trained workforce, and customer goodwill, which typically are not recognized on the balance sheet, may have value but are not included in the fair value disclosures.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Secondary Market Mortgage Activities

12 Months Ended

Dec. 31, 2022

Mortgage Banking [Abstract]

Secondary Market Mortgage Activities

Secondary Market Mortgage ActivitiesTotal loans serviced for others were $264.5 million and $264.2 million for the years ended December 31, 2022 and 2021, respectively.

The following summarizes secondary market mortgage activities for the years ended December 31, 2022, 2021, and 2020:


	December 31, 2022		December 31, 2021		December 31, 2020
Loans originated for resale	$	34,181	$	95,411	$	87,528
Proceeds from sales of loans held for sale	29,151		97,179		82,619
Net gains on sales of loans held for sale	1,285		2,737		2,961
Loan servicing fees	781		720		726

The following summarizes activity for capitalized mortgage servicing rights for the years ended December 31, 2022, 2021, and 2020:


	December 31, 2022		December 31, 2021		December 31, 2020
Balance, beginning of year	$	1,664	$	1,527	$	1,573
Additions	232		514		540
Servicing rights acquired	—		—		—
Amortization	(92)		(377)		(586)
Balance, end of year	$	1,804	$	1,664	$	1,527

The fair value of mortgage servicing rights is based on market prices for comparable mortgage servicing contracts, when available, or alternatively based on a valuation model that calculates the present value of estimated future net servicing income. The fair value of mortgage servicing rights was not materially different than amortized cost at December 31, 2022 and 2021, respectively. No valuation allowance was deemed necessary at December 31, 2022, 2021, and 2020. The fair value of interest rate lock commitments and forward commitments to sell loans were not material at December 31, 2022 or 2021.

Premises and Equipment

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Premises and Equipment

The following summarizes premises and equipment at December 31, 2022 and 2021:


	December 31, 2022		December 31, 2021
Land	$	8,534	$	8,798
Premises and leasehold improvements	74,873		70,212
Furniture and equipment	42,513		39,851
Construction in process	7,582		2,589
	133,502		121,450
Less: accumulated depreciation	64,967		59,791
Premises and equipment, net	$	68,535	$	61,659

Depreciation on premises and equipment amounted to $5.3 million in 2022, $5.3 million in 2021 and $4.6 million in 2020.

Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

Operating lease assets represent the Corporation's right to use an underlying asset during the lease term and operating lease liabilities represent the Corporation's obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Corporation's incremental borrowing rate at the lease commencement date. Operating lease cost, which is comprised of amortization of the operating lease asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in net occupancy expense in the consolidated statements of income.

The Corporation leases certain full-service branch offices, land and equipment. Leases with an initial term of twelve months or less are not recorded on the balance sheet. Most leases include one or more options to renew and the exercise of the lease renewal options are at the Corporation's sole discretion. The Corporation includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Corporation will exercise the option. Certain lease agreements of the Corporation include rental payments adjusted periodically for changes in the consumer price index.


Leases	Classification	December 31, 2022		December 31, 2021
Assets:
Operating lease assets	Operating lease right-of-use assets	$	32,307	$	19,928
Finance lease assets	Premises and equipment, net (1)	286		358
Total leased assets		$	32,593	$	20,286

Liabilities:
Operating lease liabilities	Operating lease liabilities	$	33,726	$	21,159
Finance lease liabilities	Accrued interest payable and other liabilities	383		469
Total leased liabilities		$	34,109	$	21,628

(1) Finance lease assets are recorded net of accumulated amortization of $930 thousand and $858 thousand as of December 31, 2022 and 2021, respectively.

The components of the Corporation's net lease expense for the year ended December 31, 2022, 2021 and 2020 were as follows:



Lease Cost	Classification	December 31, 2022		December 31, 2021		December 31, 2020
Operating lease cost	Net occupancy expense	$	2,264	$	1,801	$	1,785
Variable lease cost	Net occupancy expense	59		55		87
Finance lease cost:
Amortization of leased assets	Net occupancy expense	72		72		72
Interest on lease liabilities	Interest expense - borrowed funds	19		23		27
Sublease income (1)	Net occupancy expense	(79)		(71)		(86)
Net lease cost		$	2,335	$	1,880	$	1,885

(1) Sublease income excludes rental income from owned properties.

The following table sets forth future minimum rental payments under noncancelable leases with terms in excess of one year as of December 31, 2022:


Maturity of Lease Liabilities as of December 31, 2022	Operating Leases (1)		Finance Leases		Total
2023	$	2,367	$	105	$	2,472
2024	2,298		105		2,403
2025	2,293		105		2,398
2026	2,277		105		2,382
2027	2,220		—		2,220
After 2027	42,626		—		42,626
Total lease payments	54,081		420		54,501
Less: Interest	20,355		37		20,392
Present value of lease liabilities	$	33,726	$	383	$	34,109

(1) Operating lease payments include payments related to options to extend lease terms that are reasonably certain of being exercised and exclude $3.6 million of legally binding minimum lease payments for leases signed, but not yet commenced.

Other information related to the Corporation's lease liabilities as of December 31, 2022 and 2021 was as follows:


Lease Term and Discount Rate	December 31, 2022		December 31, 2021
Weighted-average remaining lease term (years)
Operating leases	23.9		18.8
Finance leases	4		5

Weighted-average discount rate
Operating leases	3.83	%	3.42	%
Finance leases	4.49	%	4.49	%

Other information related to the Corporation's lease liabilities as of December 31, 2022 and 2021 was as follows:


Other Information	December 31, 2022		December 31, 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used by operating leases	$	1,183	$	964

Leases

Operating lease assets represent the Corporation's right to use an underlying asset during the lease term and operating lease liabilities represent the Corporation's obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Corporation's incremental borrowing rate at the lease commencement date. Operating lease cost, which is comprised of amortization of the operating lease asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in net occupancy expense in the consolidated statements of income.

The Corporation leases certain full-service branch offices, land and equipment. Leases with an initial term of twelve months or less are not recorded on the balance sheet. Most leases include one or more options to renew and the exercise of the lease renewal options are at the Corporation's sole discretion. The Corporation includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Corporation will exercise the option. Certain lease agreements of the Corporation include rental payments adjusted periodically for changes in the consumer price index.


Leases	Classification	December 31, 2022		December 31, 2021
Assets:
Operating lease assets	Operating lease right-of-use assets	$	32,307	$	19,928
Finance lease assets	Premises and equipment, net (1)	286		358
Total leased assets		$	32,593	$	20,286

Liabilities:
Operating lease liabilities	Operating lease liabilities	$	33,726	$	21,159
Finance lease liabilities	Accrued interest payable and other liabilities	383		469
Total leased liabilities		$	34,109	$	21,628

(1) Finance lease assets are recorded net of accumulated amortization of $930 thousand and $858 thousand as of December 31, 2022 and 2021, respectively.

The components of the Corporation's net lease expense for the year ended December 31, 2022, 2021 and 2020 were as follows:



Lease Cost	Classification	December 31, 2022		December 31, 2021		December 31, 2020
Operating lease cost	Net occupancy expense	$	2,264	$	1,801	$	1,785
Variable lease cost	Net occupancy expense	59		55		87
Finance lease cost:
Amortization of leased assets	Net occupancy expense	72		72		72
Interest on lease liabilities	Interest expense - borrowed funds	19		23		27
Sublease income (1)	Net occupancy expense	(79)		(71)		(86)
Net lease cost		$	2,335	$	1,880	$	1,885

(1) Sublease income excludes rental income from owned properties.

The following table sets forth future minimum rental payments under noncancelable leases with terms in excess of one year as of December 31, 2022:


Maturity of Lease Liabilities as of December 31, 2022	Operating Leases (1)		Finance Leases		Total
2023	$	2,367	$	105	$	2,472
2024	2,298		105		2,403
2025	2,293		105		2,398
2026	2,277		105		2,382
2027	2,220		—		2,220
After 2027	42,626		—		42,626
Total lease payments	54,081		420		54,501
Less: Interest	20,355		37		20,392
Present value of lease liabilities	$	33,726	$	383	$	34,109

(1) Operating lease payments include payments related to options to extend lease terms that are reasonably certain of being exercised and exclude $3.6 million of legally binding minimum lease payments for leases signed, but not yet commenced.

Other information related to the Corporation's lease liabilities as of December 31, 2022 and 2021 was as follows:


Lease Term and Discount Rate	December 31, 2022		December 31, 2021
Weighted-average remaining lease term (years)
Operating leases	23.9		18.8
Finance leases	4		5

Weighted-average discount rate
Operating leases	3.83	%	3.42	%
Finance leases	4.49	%	4.49	%

Other information related to the Corporation's lease liabilities as of December 31, 2022 and 2021 was as follows:


Other Information	December 31, 2022		December 31, 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used by operating leases	$	1,183	$	964

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill

The change in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 was as follows:


	December 31, 2022		December 31, 2021
Balance, beginning of year	$	43,749	$	43,749
Acquired during the year	—		—
Balance, end of year	$	43,749	$	43,749

Impairment exists when the carrying value of goodwill exceeds its fair value. Goodwill is evaluated for impairment on an annual basis as of December 31 of each year, or whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying value.

At December 31, 2022, the Corporation elected to perform a qualitative assessment to determine if it was more likely than not that the fair value exceeded its carrying value, including goodwill. The qualitative assessment indicated that it was more likely than not that the fair value exceeded its carrying value, resulting in no impairment.

Intangible Assets

In connection with its acquisition of FC Banc Corp. in 2013, the Corporation recorded a core deposit intangible asset of $4.8 million. During the years ended December 31, 2022, 2021, and 2020, the Corporation recorded amortization expense of zero, zero and $94 thousand, respectively. The net carrying values at December 31, 2022 and 2021 was zero, respectively. No other intangible assets were required to be recorded in connection with the acquisition of FC Banc Corp.

In connection with its acquisition of Lake National Bank in 2016, the Corporation recorded a core deposit intangible asset of $1.6 million. During the year ended December 31, 2022, 2021, and 2020, the Corporation recorded amortization expense of zero, zero , and $66 thousand, respectively. The net carrying values at December 31, 2022 and 2021 was zero, respectively. No other intangible assets were required to be recorded in connection with the acquisition of Lake National Bank.

In connection with its acquisition of Bank of Akron in 2020, the Corporation recorded a core deposit intangible asset of $613 thousand. During the year ended December 31, 2022, 2021 and 2020, the Corporation recorded amortization expense of $96 thousand, $107 thousand, $46 thousand, respectively. The net carrying value at December 31, 2022 and 2021 was $364 thousand and $460 thousand, respectively. No other intangible assets were required to be recorded in connection with the acquisition of Bank of Akron.

Estimated amortization expense of core deposit intangible assets for each of the next five years is as follows:



2023	$	85
2024	73
2025	62
2026	51
2027	40
Thereafter	53
Total	$	364

Deposits

12 Months Ended

Dec. 31, 2022

Deposits [Abstract]

Deposits

The following table reflects time certificates of deposit accounts included in total deposits and their remaining maturities at December 31, 2022:



Time deposits maturing:
2023	$	262,954
2024	122,314
2025	40,319
2026	9,632
2027	7,547
Thereafter	3,695
Total	$	446,461

Certificates of deposit of $250 thousand or more totaled $135.4 million and $116.6 million at December 31, 2022 and 2021, respectively.

Borrowings

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Borrowings

At December 31, 2022 and 2021, the Corporation had available one $10 million unsecured line of credit with an unaffiliated institution. Borrowings under the line of credit bear interest at a variable rate equal to SOFR plus 2.85%. There were no borrowings on the line of credit at December 31, 2022 and 2021.

FHLB Borrowings

The Bank has the ability to borrow funds from the FHLB. The Bank maintains a $250.0 million line-of-credit (Open Repo Plus) with the FHLB which is a revolving term commitment available on an overnight basis. The term of this commitment may not exceed 364 days and it reprices daily at market rates. Under terms of a blanket collateral agreement with the FHLB, the line-of-credit and long term advances are secured by FHLB stock and the Bank pledges its single-family residential mortgage loan portfolio, certain commercial real estate loans, and certain agriculture real estate loans as security for any advances.

Total loans pledged to the FHLB at December 31, 2022, and 2021, were $1.6 billion and $1.3 billion, respectively. The Bank could obtain advances of up to approximately $757.8 million from the FHLB at December 31, 2022 and $932.7 million at December 31, 2021.

At December 31, 2022 and December 31, 2021, outstanding advances from the FHLB are as follows:


	2022		2021
Open Repo borrowing at an interest rate of 4.45% at December 31, 2022. The maximum amount of the Open Repo borrowing available is $250,000.	$	132,396	$	—
Total	$	132,396	$	—

At December 31, 2022 and 2021, municipal deposit letters of credit issued by the FHLB on behalf of the Bank naming applicable municipalities as beneficiaries were $75.5 million and $10.4 million, respectively. The letters of credit were utilized in place of securities pledged to the municipalities for their deposits maintained at the Bank.

Other Borrowings

At December 31, 2022 and 2021, the Bank had no outstanding borrowings from unaffiliated institutions under overnight borrowing agreements.

Subordinated Debentures

In 2007, the Corporation issued two $10.0 million floating rate trust preferred securities as part of a pooled offering of such securities. The interest rate on each offering is determined quarterly and floats based on the 3 month LIBOR plus 1.55%. The all-in rate was 6.32% at December 31, 2022 and 1.75% at December 31, 2021. The Corporation issued subordinated debentures to the trusts in exchange for the proceeds of the offerings, which debentures represent the sole assets of the trusts. The subordinated debentures must be redeemed no later than 2037. The Corporation may redeem the debentures, in whole or in part, at face value at any time. The Corporation has the option to defer interest payments from time to time for a period not to exceed five consecutive years. Although the trusts are variable interest entities, the Corporation is not the primary beneficiary. As a result, because the trusts are not consolidated with the Corporation, the Corporation does not report the securities issued by the trusts as liabilities. Instead, the Corporation reports as liabilities the subordinated debentures issued by the Corporation and held by the trusts, since the liabilities are not eliminated in consolidation. The trust preferred securities were designated to qualify as Tier 1 capital under the Federal Reserve’s capital guidelines.

Subordinated Notes

In September 2016, the Corporation completed a private placement of $50.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes (the "2026 Notes"). The notes will mature in October 2026, and will initially bear interest at a fixed rate of 5.75% per annum, payable semi-annually in arrears, to, but excluding, October 15, 2021, and thereafter to, but excluding, the maturity date or earlier redemption, the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month LIBOR rate plus 4.55%. These subordinated notes were designed to qualify as Tier 2 capital under the Federal Reserve's capital guidelines and were given an investment grade rating of BBB- by Kroll Bond Rating Agency. On October 15, 2021, the Corporation completed its redemption of the 2026 Notes, representing all of the outstanding 2026 Notes. The 2026 Notes were redeemed pursuant to their terms at a price equal to 100% of the principal amount plus accrued and unpaid interest up to, but excluding, October 15, 2021. The total aggregate redemption price was $50.7 million, which amount included an accrued interest payment of $719 thousand. The Corporation financed the redemption with cash on hand, including the net proceeds from the issuance and sale of $85.0 million aggregate principal amount of the Corporation's 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031.

In June 2021, the Corporation sold $85.0 million aggregate principal amount of its fixed-to-floating rate subordinated notes to eligible purchasers in a private offering in reliance on the exemption from the registration requirements of Section 4(a)(2) of the Securities Act and the provisions of Rule 506 of Regulation D thereunder. The notes will mature in June 2031, and initially bear interest at a fixed rate of 3.25% per annum, payable semi-annually in arrears, to, but excluding, June 15, 2026, and thereafter to, but excluding, the maturity date or earlier redemption, the interest rate will reset quarterly to an interest rate per annum equal to the then current three-month average Secured Overnight Financing Rate ("SOFR") plus 2.58%. The net proceeds from the sale were approximately $83.5 million, after deducting offering expenses. These subordinated notes were designed to qualify as Tier 2 capital under the Federal Reserve’s capital guidelines and were given an investment grade rating of BBB- by Kroll Bond Rating Agency. The unamortized debt issuance costs were $1.0 million and $1.3 million as of December 31, 2022 and December 31, 2021, respectively.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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+ Details

Employee Benefit Plans

12 Months Ended

Dec. 31, 2022

Retirement Benefits [Abstract]

Employee Benefit Plans

Employee Benefit PlansThe Corporation sponsors a contributory defined contribution Section 401(k) plan. The plan permits eligible employees to make pre-tax and Roth contributions up to 70% of salary. Employees 21 years of age or over with a minimum of one-year with 1,000 hours of service are eligible for matching contributions by the Corporation at 100% for every 1% contributed up to 3% then 50% for every 1% contributed up to the next 2% in total of the employee’s compensation. The Corporation’s matching contribution and related expenses were $1.6 million, $1.2 million and $1.1 million for the years ended December 31, 2022, 2021, and 2020, respectively. A profit sharing discretionary non-contributory pension plan component is in place for employees 21 years of age or over with a minimum of one-year with 1,000 hours of service and allows employer contributions in an amount equal to a percentage of eligible compensation plus 5.7% of the compensation in excess of $147 thousand, subject to a $305 thousand salary limit. The Corporation recognized profit sharing expense of $2.9 million, $2.0 million and $1.9 million for the year ended December 31, 2022, 2021, and 2019 respectively.

The Corporation has adopted a non-qualified supplemental executive retirement plan ("SERP") for certain executives to compensate those executive participants in the Corporation’s retirement plan whose benefits are limited by compensation limitations under current tax law. The SERP is considered an unfunded plan for tax and ERISA purposes and all obligations arising under the SERP are payable from the general assets of the Corporation. At December 31, 2022 and 2021, obligations of $9.7 million and $8.8 million, respectively, were included in other liabilities for this plan. Expenses related to this plan were $1.3 million for the year ended December 31, 2022, $2.1 million for the year ended December 31, 2021 and $992 thousand for the year ended December 31, 2020.

The Corporation has established a Survivor Benefit Plan for the benefit of outside directors. The purpose of the plan is to provide life insurance benefits to beneficiaries of the Corporation’s directors who at the time of their death are participants in the plan. The plan is considered an unfunded plan for tax and ERISA purposes and all obligations arising under the plan are payable from the general assets of the Corporation. At December 31, 2022 and 2021, obligations of $1.6 million and $1.5 million, respectively, were included in other liabilities for this plan. Expenses (benefits) related to this plan were $81 thousand for the year ended December 31, 2022, $196 thousand for the year ended December 31, 2021 and $253 thousand for the year ended December 31, 2020.

On December 31, 2021, the Corporation adopted a Defined Contribution Plan for several employees (the "Plan"), pursuant to which the Corporation will make certain annual contributions to the Plan on the employee's behalf, which will be paid to the employee following their termination of employment from the Corporation or, if earlier, upon the employee becoming disabled. The Plan became effective as of January 2, 2022.

The Corporation has an unfunded post-retirement benefits plan which provides certain health care benefits for retired employees who have reached the age of 60 and retired with 30 years of service. The plan was amended in 2013 to include only employees hired prior to January 1, 2000. Benefits are provided for these retired employees and their qualifying dependents from the age of 60 through the age of 65.

The following table sets forth the change in the benefit obligation of the plan as of and for the years ended December 31, 2022 and 2021:


	December 31, 2022		December 31, 2021
Benefit obligation at beginning of year	$	1,487	$	1,829
Interest cost	30		28
Service cost	42		52
Actual claims	(50)		(31)
Actuarial gain	(303)		(391)
Benefit obligation at end of year	$	1,206	$	1,487

Amounts recognized in accumulated other comprehensive income at December 31, 2022 and 2021 consisted of:


	December 31, 2022		December 31, 2021
Net actuarial gain	$	972	$	782
Tax effect	(204)		(165)
Total	$	768	$	617

The accumulated benefit obligation was $1.2 million and $1.5 million at December 31, 2022 and 2021, respectively.

The following table sets forth the components of net periodic benefit cost and other amounts recognized in other comprehensive income:


	December 31, 2022		December 31, 2021		December 31, 2020
Service cost	$	42	$	52	$	61
Interest cost	30		28		51
Net amortization of transition obligation and actuarial loss	(113)		(43)		—
Net periodic benefit cost	(41)		37		112
Net gain	(303)		(391)		(277)
Amortization	113		43		—
Total recognized in other comprehensive income	(190)		(348)		(277)
Total recognized in net periodic benefit cost and other comprehensive income	$	(231)	$	(311)	$	(165)

The estimated net gain that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $(174) thousand.

The weighted average discount rate used to calculate net periodic benefit cost was 2.10% for year ended December 31, 2022, 1.55% for year ended December 31, 2021, and 2.59% for year ended December 31, 2020. The weighted average rate used to calculate accrued benefit obligations was 4.72% for year ended December 31, 2022, 2.10% for year ended December 31, 2021, and 1.55% for year ended December 31, 2020. The health care cost trend rate used to measure the expected costs of benefits is 5.0% for 2023 and thereafter.

- Definition

The entire disclosure for retirement benefits.

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+ Details

Deferred Compensation Plans

12 Months Ended

Dec. 31, 2022

Postemployment Benefits [Abstract]

Deferred Compensation Plans

Deferred compensation plans cover all directors and certain officers. Under the plans, the Corporation pays each participant, or their beneficiary, the value of the participant’s account over a maximum period of 10 years, beginning with the individual’s termination of service. A liability is accrued for the obligation under these plans.

A summary of changes in the deferred compensation plan liability follows:


	December 31, 2022		December 31, 2021		December 31, 2020
Balance, beginning of year	$	3,675	$	3,085	$	3,234
Deferrals, dividends, and changes in fair value	(2)		1,084		(70)
Deferred compensation payments	(23)		(494)		(79)
Balance, end of year	$	3,650	$	3,675	$	3,085

Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

The following is a summary of income tax expense for the years ended December 31, 2022, 2021, and 2020:


	December 31, 2022		December 31, 2021		December 31, 2020
Current – federal	$	15,494	$	13,494	$	8,681
Current – state	1,346		1,268		729
Deferred – federal	(1,618)		(1,025)		(1,672)
Deferred – state	(196)		(666)		(391)

Income tax expense	$	15,026	$	13,071	$	7,347

The reconciliation of income tax attributable to pre-tax income at the federal statutory tax rates to income tax expense is as follows:


	December 31, 2022		%		December 31, 2021		%		December 31, 2020		%
Tax at statutory rate	$	16,425	21.0	%	$	14,863	21.0	%	$	8,419	21.0	%
Tax exempt income, net	(1,036)		(1.3)		(1,016)		(1.4)		(1,119)		(2.8)

Bank owned life insurance	(721)		(0.9)		(554)		(0.8)		(367)		(0.9)

Tax credits, net of amortization	(193)		(0.3)		(215)		(0.3)		(104)		(0.3)
Effect of state tax	908		1.2		476		0.7		576		1.4
Other	(357)		(0.5)		(483)		(0.7)		(58)		(0.1)
Income tax expense	$	15,026	19.2	%	$	13,071	18.5	%	$	7,347	18.3	%

The following table sets forth deferred taxes as of December 31, 2022 and 2021:


	December 31, 2022		December 31, 2021
Deferred tax assets:
Allowance for credit losses	$	9,154	$	7,606
Fair value adjustments – business combination	917		1,240
Deferred compensation	3,448		3,344

Net operating loss carryover	344		327
Post-retirement benefits	647		696
Unrealized loss on interest rate swap	—		81
Nonaccrual loan interest	348		509
Accrued expenses	2,300		1,718
Deferred fees and costs	997		1,259
Unrealized loss on securities available-for-sale	12,914		188
Unrealized loss on securities held-to-maturity	1,265		—
Operating lease liability	7,645		4,845
Other	671		383
	40,650		22,196
Deferred tax liabilities:

Premises and equipment	3,409		3,093
Unrealized gain on equity securities	119		292
Intangibles – section 197	2,492		2,494
Mortgage servicing rights	399		366
Unrealized gain on interest rate swap	32		—
Operating lease asset	7,397		4,649
Other	68		220
	13,916		11,114
Net deferred tax asset	$	26,734	$	11,082

At December 31, 2022 and 2021, the Corporation had no unrecognized tax benefits. The Corporation does not expect the total amount of unrecognized tax benefits to significantly increase in the next twelve months.

At December 31, 2022, the Corporation had state net operating loss carryforwards of approximately $15.5 million related to the acquisition of Bank of Akron, which expire at various dates from 2034 to 2039. The Corporation's ability to utilize carryforwards is limited to $363 thousand per year. Due to this limitation, management determined it is more likely than not that approximately $9.5 million of net operating loss carryforwards will expire unutilized.

The Corporation recognizes interest and/or penalties related to income tax matters as part of income tax expense. At December 31, 2022, 2021 and 2020, there were no amounts accrued for interest and/or penalties and no amounts recorded as expense for the years ending December 31, 2022, 2021, and 2020.

The Corporation and its subsidiaries are subject to U.S. federal income tax, as well as filing various state returns. The Corporation is no longer subject to U.S. federal income tax examinations by the taxing authorities for years prior to 2019. Tax years 2019 through 2022 are open to examination.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
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-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
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-Section 50
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
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-Subparagraph (a)
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
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-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Related Party Transactions

12 Months Ended

Dec. 31, 2022

Related Party Transactions

Loans to principal officers, directors, and their affiliates during 2022 were as follows:


Beginning balance	$	45,757
New loans and advances	6,224
Effect of changes in composition of related parties	(494)
Repayments	(6,489)
Ending balance	$	44,998

Deposits from principal officers, directors, and their affiliates were $13.7 million and $23.5 million at December 31, 2022 and 2021, respectively.

Stock-Based Compensation

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

The Corporation has a stock incentive plan, which is administered by a committee of the Board of Directors and which permits the Corporation to provide various types of stock-based compensation to its key employees, directors, and/or consultants, including time-based and performance-based shares of restricted stock. The Corporation previously maintained the CNB Financial Corporation 2009 Stock Incentive Plan, which terminated in accordance with its terms on February 10, 2019, and currently maintains the CNB Financial Corporation 2019 Omnibus Incentive Plan (the "2019 Stock Incentive Plan"), which was approved by the Corporation’s shareholders and became effective on April 16, 2019.

The 2019 Stock Incentive Plan provides for up to 507,671 shares of common stock to be awarded in the form of nonqualified options or restricted stock. For key employees, the vesting of time-based restricted stock is one-third, one-fourth, or one-fifth of the granted restricted shares per year, beginning one year after the grant date, with 100% vesting on the third, fourth or fifth anniversary of the grant date, respectively. Prior to 2018, for non-employee directors, the vesting schedule was one-third of the granted restricted shares per year, beginning one year after the grant date, with 100% vested on the third anniversary of the grant date. Beginning in 2018, stock compensation received by non-employee directors vests immediately. All stock-based compensation grants during the years ending December 31, 2022, 2021 and 2020 and outstanding at December 31, 2022, 2021 and 2020 were time-based and performance-based restricted stock.

During the years ended December 31, 2022, 2021, and 2020, the Executive Compensation and Personnel Committee of the Corporation's Board of Directors granted a total of 57,823, 55,218 and 36,968 shares, respectively, of time-based restricted common stock to certain key employees and all independent directors of the Corporation.

Compensation expense for the restricted stock awards is recognized over the requisite service period based on the fair value of the shares at the date of grant on a straight-line basis. Non-vested restricted stock awards are recorded as a reduction of additional paid-in-capital in shareholders’ equity until earned. Compensation expense resulting from time-based, performance-based and director restricted stock awards was $1.2 million, $1.4 million and $1.4 million for the years ended December 31, 2022, 2021, and 2020, respectively. The total income tax benefit related to the recognized compensation cost of vested restricted stock awards was $262 thousand, $296 thousand and $296 thousand for the years ended December 31, 2022, 2021 and 2020, respectively.

A summary of changes in time-based unvested restricted stock awards follows:


	Shares	Weighted-average Grant Date Fair Value
Non-vested at January 1, 2022	69,643	$	24.18
Granted	46,033	26.64
Forfeited	(1,440)	25.04
Vested	(44,490)	25.05
Non-vested at December 31, 2022	69,746	$	25.21

The above table excludes 11,790 shares in restricted stock awards that were granted to the Corporation’s Board of Directors and certain employees at a weighted average fair value of $26.71 and immediately vested. As of December 31, 2022 and 2021, there was $1.2 million and $1.1 million, respectively, of total unrecognized compensation cost related to non-vested shares granted under the restricted stock award plan. The fair value of shares vesting during the year end December 31, 2022, 2021, and 2020 was $1.4 million, $835 thousand and $1.1 million, respectively.

In addition to the time-based restricted stock disclosed above, the Corporation’s Board of Directors grants performance-based restricted stock awards ("PBRSAs") to key employees. The number of PBRSAs will depend on certain performance conditions earned over a three year period and are also subject to service-based vesting. In 2022, awards with a maximum of 13,761 shares in aggregate were granted to key employees. In 2021, awards with a maximum of 18,210 shares in aggregate were granted to key employees. In 2020, awards with a maximum of 18,100 shares in aggregate were granted to key employees.

Total compensation expense related to the PBRSAs and included in the above compensation expense total was $91 thousand, $378 thousand and $384 thousand for 2022, 2021 and 2020. Estimated remaining unearned compensation related to PBRSAs at December 31, 2022 was $12 thousand.

In 2021, the 2019 PBRSAs were fully earned and in 2022, 11,895 shares were fully distributed. The fair value of the shares distributed in 2022 was $318 thousand. In 2020, the 2018 PBRSAs were fully earned and in 2021, 10,587 shares were fully distributed. The fair value of the 10,587 shares distributed in 2021 was $223 thousand.

The number of authorized stock-based awards still available for grant as of December 31, 2022 was 320,372.

Regulatory Capital Matters

12 Months Ended

Dec. 31, 2022

Banking and Thrift, Other Disclosure [Abstract]

Regulatory Capital Matters

Banks and financial holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, for the Bank, prompt corrective action ("PCA") regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can result in regulatory enforcement actions. The net unrealized gain or loss on AFS securities is excluded from computing regulatory capital. Management believes as of December 31, 2022 the Corporation and the Bank meet all capital adequacy requirements to which they are subject.

The PCA regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms alone do not represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion; brokered deposits may not be accepted, renewed or rolled over; and capital restoration plans are required. As of December 31, 2022 and 2021, the most recent regulatory notifications categorized the Bank as well capitalized under the PCA. There are no events or conditions since this notification that management believes have changed the Bank’s capital category.

Actual and required capital amounts and ratios are presented below as of December 31, 2022 and 2021. The capital adequacy ratio includes the capital conservation buffer.


	Actual				For Capital Adequacy Purposes (1)				To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2022
Total Capital to Risk Weighted Assets
Consolidated	$	688,164	16.08	%	$	449,370	10.50	%	N/A		N/A
Bank	525,048		12.32		447,436		10.50		$	426,130	10.00	%
Tier 1 (Core) Capital to Risk Weighted Assets
Consolidated	566,454		13.24		363,776		8.50		N/A		N/A
Bank	489,374		11.48		362,210		8.50		340,904		8.00
Common equity Tier 1 to Risk Weighted Assets
Consolidated	488,669		11.42		299,580		7.00		N/A		N/A
Bank	481,995		11.31		298,291		7.00		276,984		6.50
Tier 1 (Core) Capital to Average Assets
Consolidated	566,454		10.74		210,988		4.00		N/A		N/A
Bank	489,374		9.22		212,283		4.00		265,354		5.00
December 31, 2021
Total Capital to Risk Weighted Assets
Consolidated	$	541,651	14.92	%	$	381,093	10.50	%	N/A		N/A
Bank	475,231		13.16		379,180		10.50		$	361,123	10.00	%
Tier 1 (Core) Capital to Risk Weighted Assets
Consolidated	427,988		11.79		308,504		8.50		N/A		N/A
Bank	447,055		12.38		306,955		8.50		288,899		8.00
Common equity Tier 1 to Risk Weighted Assets
Consolidated	350,203		9.65		254,062		7.00		N/A		N/A
Bank	439,676		12.18		252,786		7.00		234,730		6.50
Tier 1 (Core) Capital to Average Assets
Consolidated	427,988		8.22		208,208		4.00		N/A		N/A
Bank	447,055		8.63		207,109		4.00		258,887		5.00

(1) The minimum amounts and ratios as of December 31, 2022 and 2021 include the full phase in of the capital conservation buffer of 2.5 percent required by the Basel III framework.

Certain restrictions exist regarding the ability of the Bank to transfer funds to the Corporation in the form of cash dividends, loans or advances. During 2022, $248.2 million of accumulated net earnings of the Bank included in consolidated shareholders’ equity, plus any 2023 net profits retained to the date of the dividend declared, is available for distribution to the Corporation as dividends without prior regulatory approval, subject to regulatory capital requirements described above.

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

+ References + Details

Derivative Instruments

12 Months Ended

Dec. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

On September 7, 2018, the Corporation executed an interest rate swap agreement with a 5-year term and an effective date of September 15, 2018 in order to hedge cash flows associated with $10.0 million of a subordinated note that was issued by the Corporation during 2007 and elected cash flow hedge accounting for the agreement. The Corporation’s objective in using this derivative is to add stability to interest expense and to manage its exposure to interest rate risk. The interest rate swap involves the receipt of variable-rate amounts in exchange for fixed-rate payments from September 15, 2018 to September 15, 2023 without the exchange of the underlying notional amount. At December 31, 2022, the variable rate on the subordinated debt was 6.32% (LIBOR plus 155 basis points) and the Corporation was paying 4.53% (2.98% fixed rate plus 155 basis points).

As of December 31, 2022 and 2021, no derivatives were designated as fair value hedges or hedges of net investments in foreign operations. Additionally, the Corporation does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedges.

The following tables provide information about the amounts and locations of activity related to the interest rate swaps designated as cash flow hedges within the Corporation’s consolidated balance sheet and statement of income as of December 31, 2022 and 2021 and for the years ended December 31, 2022, 2021, and 2020:

Liability Derivative

Balance Sheet

Fair value

Location

December 31, 2022

December 31, 2021

Interest rate contract

Accrued interest receivable (payable) and other assets (liabilities)

$150

$(388)

For the Year Ended December 31, 2022

(a)

(b)

(c)

(d)

(e)

Interest rate contract

$425

Interest expense – subordinated debentures

$(127)

Other
income

$—

For the Year Ended December 31, 2021

Interest rate contract

301

Interest expense – subordinated debentures

(276)

Other
income

—

For the Year Ended December 31, 2020

Interest rate contract

(224)

Interest expense – subordinated debentures

(224)

Other
income

—

(a)Amount of Gain or (Loss) Recognized in Other Comprehensive Loss on Derivative (Effective Portion), net of tax

(b)Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)

(c)Amount of Loss Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)

(d)Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)

(e)Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)

Amounts reported in accumulated other comprehensive loss related to the interest rate swap will be reclassified to interest expense as interest payments are made on the subordinated debentures. Such amounts reclassified from accumulated other comprehensive loss to interest expense in the next twelve months are expected to be a $179 thousand benefit.

As of December 31, 2022 and 2021, a cash collateral balance of $200 thousand and $1.1 million, respectively, was maintained with the counterparty to the interest rate swaps. These balances are included in interest bearing deposits with other banks on the consolidated balance sheets.

The Corporation entered into certain interest rate swap contracts that are not designated as hedging instruments. These derivative contracts relate to transactions in which the Corporation enters into an interest rate swap with a customer while at the same time entering into an offsetting interest rate swap with another financial institution. In connection with each swap transaction, the Corporation agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on a similar notional amount at a fixed interest rate. Concurrently, the Corporation agrees to pay another financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. The transaction allows the Corporation’s customers to effectively convert a variable rate loan to a fixed rate. Because the Corporation acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts offset each other and do not impact the Corporation’s results of operations.

The Corporation pledged cash collateral to another financial institution with a balance $173 thousand as of December 31, 2022 and $3.4 million as of December 31, 2021. This balance is included in interest bearing deposits with other banks on the consolidated balance sheets. The Corporation may require its customers to post cash or securities as collateral on its program of back-to-back swaps depending upon the specific facts and circumstances surrounding each loan and individual swap. In addition, certain language is included in the International Swaps and Derivatives Association agreement and loan documents where, in default situations, the Corporation is permitted to access collateral supporting the loan relationship to recover any losses suffered on the derivative asset or liability. The Corporation may be required to post additional collateral to swap counterparties in the future in proportion to potential increases in unrealized loss positions.

The following table provides information about the amounts and locations of activity related to the back-to-back interest rate swaps within the Corporation’s consolidated balance sheet as of December 31, 2022 and 2021:


	Current Notional Amount		Average Maturity (in years)	Weighted Average Fixed Rate		Weighted Average Variable Rate	Fair Value
December 31, 2022
3rd Party interest rate swaps	$	31,417	4.9	4.12	%	1 month LIBOR + 1.68%	$	1,700	(a)
Customer interest rate swaps	(31,417)		4.9	4.12	%	1 month LIBOR + 1.68%	(1,700)		(b)
December 31, 2021
3rd Party interest rate swaps	$	32,768	5.8	4.12	%	1 month LIBOR + 2.27%	$	2,124	(a)
Customer interest rate swaps	(32,768)		5.8	4.12	%	1 month LIBOR + 2.27%	(2,124)		(b)

(a)Reported in accrued interest receivable and other assets within the consolidated balance sheets

(b)Reported in accrued interest payable and other liabilities within the consolidated balance sheets

Off-Balance Sheet Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

Off-Balance Sheet Commitments and Contingencies

Financial Instruments with Off-Balance Sheet Risk

Loan commitments are made to accommodate the financial needs of the Corporation’s customers commitments that result in market risk. Standby letters of credit commit the Corporation to make payments on behalf of customers when certain specified future events occur. They are primarily issued to facilitate customers’ trade transactions.

Both arrangements have credit risk, essentially the same as that involved in extending loans to customers, and are subject to the Corporation’s normal credit policies. Collateral is obtained based on a credit assessment of the customer.

The Corporation's maximum obligation to extend credit for loan commitments (unfunded loans and unused lines of credit) and standby letters of credit outstanding as of December 31, 2022 and 2021 were as follows:


	December 31, 2022				December 31, 2021
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to make loans	$	126,594	$	441,008	$	94,924	$	323,013
Unused lines of credit	7,444		725,277		13,265		663,903
Standby letters of credit	16,124		1,603		15,063		1,623

Commitments to make loans are generally made for periods of 60 days or less.

Other Off-Balance Sheet Commitments

The Corporation makes investments in limited partnerships, including certain small business investment corporations and low income housing partnerships. Capital contributions for investments in small business companies ("SBICs") and other limited partnerships, reported in FHLB and other restricted stock holdings and investments on the consolidated balance sheet, as of December 31, 2022 and 2021 were $17.0 million and $14.5 million, respectively. Unfunded capital commitments in investments in SBICs and other limited partnerships totaled $5.5 million and $8.0 million as of December 31, 2022 and 2021, respectively. These investments are accounted for either under the equity method of accounting.

Qualified Affordable Housing Project Investments

The carrying value of investments in the low income housing partnerships, reported in FHLB and other restricted stock holdings and investments on the consolidated balance sheet, as of December 31, 2022 and 2021 were $4.5 million and $5.3 million, respectively. The related amortization for the twelve months ended December 31, 2022, 2021 and 2020 were $803 thousand, $691 thousand and $634 thousand, respectively. Unfunded commitments, reported in accrued interest payable and other liabilities on the consolidated balance sheet, as of December 31, 2022 and 2021 were $1.0 million and $2.1 million, respectively.

Allowance for Credit Losses on Unfunded Loan Commitments

The Corporation maintains an allowance for credit losses on unfunded commercial lending commitments and letters of credit to provide for the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the allowance for credit losses for loans receivable, modified to take into account the probability of a draw-down on the commitment. The provision for credit losses on unfunded loan commitments is included in the provision for credit losses on the Corporation's consolidated statements of income. The allowance for unfunded commitments is included in other liabilities in the consolidated balance sheets. Note 4, "Loans Receivable and Allowance for Credit Losses," in the consolidated financial statements provides more detail concerning the provision for credit losses related to the loan portfolio of the Corporation.

The following table presents activity in the allowance for credit losses on unfunded loan commitments for the years ended December 31, 2022 and 2021, respectively:


	Year ended December 31,

		2022		2021		2020
Beginning balance		$	—	$	—	$	—
Provision for credit losses on unfunded loan commitments (1)		603		—		—
Ending balance		$	603	$	—	$	—

(1) Excludes provision for credit losses related to the loan portfolio.

Litigation

The Corporation is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Corporation.

Parent Company Only Financial Information

12 Months Ended

Dec. 31, 2022

Condensed Financial Information Disclosure [Abstract]

Parent Company Only Financial Information


CONDENSED BALANCE SHEETS	December 31,
	2022		2021
Assets
Cash	$	142,832	$	47,035
Equity securities	2,750		2,850
Investment in bank subsidiary	466,268		474,902
Investment in non-bank subsidiaries	21,566		20,327
Deferred assets and current receivables	1,782		1,798
Other assets	931		1,044
Total assets	$	636,129	$	547,956
Liabilities

Subordinated debentures	$	104,584	$	104,281
Other liabilities	783		828
Total liabilities	105,367		105,109
Stockholders' equity	530,762		442,847
Total liabilities and stockholders' equity	$	636,129	$	547,956


CONDENSED STATEMENTS OF INCOME	Year Ended December 31,
Income:	2022		2021		2020
Dividends from:
Bank subsidiary	$	21,225	$	22,165	$	16,702
Non-bank subsidiaries	1,431		1,700		10,350
Other	198		210		216
Total income	22,854		24,075		27,268
Expenses	(6,112)		(6,657)		(6,838)
Income before income taxes and equity in undistributed net income of subsidiaries:	16,742		17,418		20,430
Change in net unrealized holdings gains (losses) on equity securities not held for trading	(132)		121		(31)
Income tax benefit	1,422		1,381		1,306
Equity in undistributed net income of bank subsidiary	43,846		37,178		18,197
Equity in undistributed (distributions in excess) of net income of non-bank subsidiaries	1,310		1,609		(7,159)
Net income	63,188		57,707		32,743
Dividends on preferred stock	(4,302)		(4,302)		(1,147)
Net income available to common stockholders	$	58,886	$	53,405	$	31,596

Comprehensive income attributable to the parent	$	63,613	$	58,008	$	32,519


CONDENSED STATEMENTS OF CASH FLOWS	Year Ended December 31,
	2022		2021		2020
Net income
Adjustments to reconcile net income to net cash provided by	$	63,188	$	57,707	$	32,743
Operating activities:
Equity in undistributed net income of bank subsidiary	(43,846)		(37,178)		(18,197)
(Equity in undistributed) distributions in excess of net income of non–bank subsidiaries	(1,310)		(1,609)		7,159
Net unrealized (gains) losses on equity securities	132		(121)		31
Decrease in other assets	609		60		21
Increase in other liabilities	1,571		978		1,091
Net cash provided by operating activities	20,344		19,837		22,848
Cash flows from investing activities
Purchase of equity securities	(32)		—		(2,000)

Outlays for business acquisition	—		—		(16,126)
Investment in bank subsidiaries	—		—		(41,500)
Net cash used in investing activities	(32)		—		(59,626)
Cash flows from financing activities:
Dividends paid on common stock	(12,557)		(11,550)		(10,981)
Dividends paid on preferred stock	(4,302)		(4,302)		(1,147)
Proceeds from issuance of long term debt	—		83,484		—
Repayment of long term debt	—		(50,000)		—
Purchase of treasury stock	(1,707)		(1,163)		(1,307)
Net proceeds from the issuance of preferred stock	—		—		57,785
Net proceeds from issuance of common stock	94,051		—		3,257
Net advance to subsidiary	—		—		(850)
Net cash provided by financing activities	75,485		16,469		46,757
Net increase in cash	95,797		36,306		9,979
Cash beginning of year	47,035		10,729		750
Cash end of year	$	142,832	$	47,035	$	10,729

Earnings Per Share

12 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

Earnings Per Share

The computation of basic and diluted earnings per common share is shown below. There were no anti-dilutive stock options for the years ended December 31, 2022, 2021, and 2020.


	Years Ended December 31,
	2022		2021		2020
Basic earnings per common share computation
Net income per consolidated statements of income	$	58,886	$	53,405	$	31,596
Net earnings allocated to participating securities	(229)		(183)		(100)
Net earnings allocated to common stock	$	58,657	$	53,222	$	31,496
Distributed earnings allocated to common stock	$	12,508	$	11,514	$	10,942
Undistributed earnings allocated to common stock	46,149		41,708		20,554
Net earnings allocated to common stock	$	58,657	$	53,222	$	31,496
Weighted average common shares outstanding, including shares considered participating securities	18,057		16,875		16,048
Less: Average participating securities	(70)		(55)		(48)
Weighted average shares	17,987		16,820		16,000
Basic earnings per common share	$	3.26	$	3.16	$	1.97
Diluted earnings per common share computation
Net earnings allocated to common stock	$	58,657	$	53,222	$	31,496
Weighted average common shares outstanding for basic earnings per common share	17,987		16,820		16,000
Add: Dilutive effects of performance based-shares	33		—		—
Weighted average shares and dilutive potential common shares	18,020		16,820		16,000
Diluted earnings per common share	$	3.26	$	3.16	$	1.97

Other Comprehensive Income

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

Other Comprehensive Income

Other comprehensive income components and related tax effects were as follows for the years ended December 31, 2022, 2021, and 2020:


	December 31, 2022		December 31, 2021		December 31, 2020
Unrealized holding gains (losses) on available-for-sale securities	$	(67,167)	$	(19,526)	$	12,494
Less reclassification adjustment for gains recognized in earnings	(651)		(783)		(2,190)
Net unrealized gains (losses)	(67,818)		(20,309)		10,304
Tax effect	14,242		4,265		(2,164)
Net-of-tax amount	(53,576)		(16,044)		8,140


Amortization of unrealized gains from held-to-maturity securities	1,107		—		—
Tax effect	(232)		—		—
Net-of-tax amount	875		—		—
Actuarial gain (loss) on postemployment health care plan	303		391		277
Net amortization of transition obligation and actuarial gain	(113)		(43)		—
Net unrealized gain (loss) on postemployment health care plan	190		348		277
Tax effect	(40)		(73)		(58)
Net-of-tax amount	150		275		219
Unrealized gain (loss) on interest rate swap	411		105		(508)
Less reclassification adjustment for losses recognized in earnings	127		276		224
Net unrealized gain (loss)	538		381		(284)
Tax effect	(113)		(80)		60
Net-of-tax amount	425		301		(224)
Other comprehensive income (loss)	$	(52,126)	$	(15,468)	$	8,135

The following is a summary of the change in the accumulated other comprehensive income (loss) balance, net of tax, for the years ended December 31, 2022, 2021, and 2020.


	Balance 12/31/21		Comprehensive Income (Loss)		Balance 12/31/22
Unrealized gains (losses) on securities available-for-sale	$	(706)	$	(53,576)	$	(54,282)
Amortization of unrealized gains from held-to-maturity securities	—		875		875
Unrealized gain on postretirement benefits plan	618		150		768
Unrealized loss on interest rate swap	(306)		425		119
Total	$	(394)	$	(52,126)	$	(52,520)


	Balance 12/31/20		Comprehensive Income (Loss)		Balance 12/31/21
Unrealized gains on securities available-for-sale	$	15,338	$	(16,044)	$	(706)
Unrealized gain on postretirement benefits plan	343		275		618
Unrealized loss on interest rate swap	(607)		301		(306)
Total	$	15,074	$	(15,468)	$	(394)


	Balance 1/1/20		Comprehensive Income (Loss)		Balance 12/31/20
Unrealized gains (losses) on securities available-for-sale	$	7,198	$	8,140	$	15,338
Unrealized gain (loss) on postretirement benefits plan	124		219		343
Unrealized loss on interest rate swap	(383)		(224)		(607)
Total	$	6,939	$	8,135	$	15,074

Revenue from Contracts with Customers

12 Months Ended

Dec. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

All of the Corporation’s revenue from contracts with customers in the scope of ASC 606 is recognized within Non-Interest Income. The following table presents the Corporation's sources of Non-Interest Income for the years ended December 31, 2022, 2021 and 2020. Items outside the scope of ASC 606 are noted as such.


	December 31, 2022		December 31, 2021		December 31, 2020
Non-interest Income
Service charges on deposit accounts	$	7,206	$	6,195	$	5,095
Wealth and asset management fees	7,172		6,740		5,497
Mortgage banking (1)	1,237		3,147		3,354
Card processing and interchange income	7,797		7,796		5,727
Net realized gains on available-for-sale securities (1)	651		783		2,190
Other income	10,703		8,773		6,196
Total non-interest income	$	34,766	$	33,434	$	28,059

(1)Not within scope of ASC 606

Management determined that the primary sources of revenue emanating from interest and dividend income on loans and investment securities along with non-interest revenue resulting from security gains, loan servicing, gains on the sale of loans, commitment fees, fees from financial guarantees, certain credit card fees, gains (losses) on sale of other real estate owned not financed by the Corporation, is not within the scope of ASU 2014-9.

The types of non-interest income within the scope of the standard that are material to the consolidated financial statements are services charges on deposit accounts, wealth and asset management fee income, card processing and interchange income, and other income.

Service charges on deposit accounts: The Corporation earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed, as that is the point in time the Corporation fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Corporation satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Services charges on deposits are withdrawn from the customer’s account balance.

Wealth and asset management fees: The Corporation earns wealth and asset management fees from its contracts with trust and brokerage customers to manage assets for investment, and/or to transact on their accounts. These fees are primarily earned over time as the Corporation provides the contracted monthly or quarterly services and are generally assessed based on a tiered scale of the market value of assets under management at month end. Fees for these services are billed to customers on a monthly or quarterly basis and are recorded as revenue at the end of the period for which the wealth and asset management services have been performed. Other performance obligations, such as the delivery of account statements to customers, are generally considered immaterial to the overall transaction price.

Card processing and interchange income: The Corporation earns interchange fees from check card and credit card transactions conducted through the Visa payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder.

Other income: The Corporation's other income includes sources such as bank owned life insurance, changes in fair value and realized gains on sales of equity securities, certain service fees, gains (losses) on sales of fixed assets, and gains (losses) on sale of other real estate owned. The service fees are recognized in the same manner as the service charges mentioned above. While gains (losses) on the sale of other real estate owned are within the scope of ASU 2014-9 if financed by the Corporation, the Corporation does not finance the sale of transactions. The revenue on the sale is recorded upon the transfer of control of the property to the buyer and the other real estate owned asset is derecognized.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

+ Details

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2022
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsSubsequent to December 31, 2022, on February 17, 2023, the Corporation purchased 100,000 shares with an average price paid, including commissions, of $24.05.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Business and Organization

CNB Financial Corporation (the "Corporation") is headquartered in Clearfield, Pennsylvania, and provides a full range of banking and related services through its wholly owned subsidiary, CNB Bank (the "Bank"). In addition, the Bank provides wealth and asset management services, including the administration of trusts and estates, retirement plans, and other employee benefit plans as well as a full range of wealth management services. The Bank serves individual and corporate customers and is subject to competition from other financial institutions and intermediaries with respect to these services. In addition to the Bank, the Corporation also operates a consumer discount loan and finance business through its wholly owned subsidiary, Holiday Financial Services Corporation ("Holiday"). The Corporation and its other subsidiaries are subject to examination by federal and state regulators. The Corporation’s market area is primarily concentrated in the Central and Northwest regions of the Commonwealth of Pennsylvania, the Central and Northeast regions of the state of Ohio, Western New York, and Southwest Virginia.

Basis of Financial Presentation

The financial statements are consolidated to include the accounts of the Corporation, the Bank, CNB Securities Corporation, Holiday, CNB Risk Management, Inc. and CNB Insurance Agency. All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements.

Use of Estimates

To prepare financial statements in conformity with U.S. generally accepted accounting principles ("GAAP"), management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. The allowance for credit losses on loans receivable and off-balance-sheet credit exposures, the fair values of financial instruments, goodwill and the status of contingencies are particularly subject to change.

Operating Segments

While the Corporation's chief operating decision makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Corporation-wide basis, and operating divisions are aggregated into one as operating results for all divisions are similar. Accordingly, all of the financial service operations are considered to be aggregated in one reportable operating segment.

Cash and Cash Equivalents and Interest-Bearing Deposits in Other Financial Institutions

Cash and Cash Equivalents

For purposes of the consolidated statement of cash flows, the Corporation defines cash and cash equivalents as cash and due from banks and interest bearing deposits with the Federal Reserve and other financial institutions. Net cash flows are reported for customer loan and deposit transactions, interest bearing time deposits with other financial institutions and borrowings with original maturities of 90 days or less.

Interest-Bearing Deposits in Other Financial Institutions

Interest-bearing deposits in other financial institutions are carried at cost.

Restrictions on Cash

Note 19, "Interest Rate Swaps," to the consolidated financial statements discloses the cash collateral balances required to be maintained in connection with the Corporation’s interest rate swaps.

Debt Securities

Debt securities are classified as held-to-maturity ("HTM") and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available-for-sale ("AFS") when they might be sold before maturity. Securities AFS are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax.

Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Premiums on callable debt securities are amortized to their earliest call date. Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

The Corporation has made a policy election to exclude accrued interest from the amortized cost basis of debt securities and report accrued interest separately in accrued interest receivable and other assets in the consolidated balance sheets. A debt security is placed on nonaccrual status at the time any principal or interest payments become more than 90 days delinquent or if full collection of interest or principal becomes uncertain. Accrued interest for a security placed on nonaccrual is reversed against interest income. There was no accrued interest related to debt securities reversed against interest income for the years ended December 31, 2022 and 2021, respectively.

Allowance for Credit Losses (Debt Securities AFS and Loans)