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CAPITAL RATIOS AND SHAREHOLDERS' EQUITY | 9 Months Ended
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Sep. 30, 2024
Equity [Abstract] |
CAPITAL RATIOS AND SHAREHOLDERS' EQUITY | CAPITAL RATIOS AND SHAREHOLDERS’ EQUITY The actual and required capital ratios were as follows:
|  | September 30, 2024 |  | December 31, 2023 |  | Minimum Capital Requirement
Company (consolidated) |  |  |  |  |  |
Total capital to risk-weighted assets |  | 14.4 | % |  | 14.4 | % |  | 8.0 | %
Tier 1 capital to risk-weighted assets |  | 12.2 |  |  | 12.3 |  |  | 6.0 |
Common equity tier 1 capital to risk-weighted assets |  | 12.0 |  |  | 12.0 |  |  | 4.5 |
Tier 1 capital to average assets |  | 9.9 |  |  | 9.7 |  |  | 4.0 |
|  | September 30, 2024 |  | December 31, 2023 |  | Regulatory Minimum to be Adequately Capitalized |  | Regulatory Minimum to be Well Capitalized
Bank |  |  |  |  |  |  |  |
Total capital to risk-weighted assets |  | 13.7 | % |  | 13.3 | % |  | 8.0 | % |  | 10.0 | %
Tier 1 capital to risk-weighted assets |  | 12.5 |  |  | 12.2 |  |  | 6.0 |  |  | 8.0 |
Common equity tier 1 capital to risk-weighted assets |  | 12.5 |  |  | 12.2 |  |  | 4.5 |  |  | 6.5 |
Tier 1 capital to average assets |  | 10.2 |  |  | 9.6 |  |  | 4.0 |  |  | 5.0 |
The Company and the Bank are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Failure to meet capital requirements can initiate regulatory action. At each date shown, the Company met the minimum capital requirements and the Bank met the conditions to be classified as “well capitalized” under the relevant regulatory framework. To be categorized as well capitalized, an institution must maintain minimum total risk-based, tier 1 risk-based, and tier 1 leverage ratios as set forth in the table above. As of January 1, 2019, banking organizations must maintain a minimum common equity tier 1 risk-based capital ratio of 7.0%, a minimum Tier 1 risk-based capital ratio of 8.5%, and a minimum Total risk-based capital ratio of 10.5%, including a 2.5% capital conservation buffer. Capital rules impose restrictions on capital distributions and certain discretionary cash bonus payments if the capital conservation buffer is not met. At September 30, 2024, the capital levels of both the Company and the Bank exceeded all regulatory capital requirements and the Bank's regulatory capital ratios were above the minimum levels required to be considered well capitalized for regulatory purposes. The capital levels of both the Company and the Bank at September 30, 2024 also exceeded the minimum capital requirements including the currently applicable capital conservation buffer of 2.5%. Accumulated other comprehensive (loss) Components of accumulated other comprehensive (loss) are as follows:
(In thousands) |  | September 30, 2024 |  | December 31, 2023
Other accumulated comprehensive income, before tax: |  |  |  |
Net unrealized holding (loss) on AFS securities |  | $ | (120,206) |  |  | $ | (188,927) |
Net unrealized (loss) on cash flow hedging derivatives |  | (16) |  |  | (4,265) |
Net unrealized holding (loss) on pension plans |  | (528) |  |  | (528) |
Income taxes related to items of accumulated other comprehensive income: |  |  |  |
Net unrealized tax benefit on AFS securities |  | 31,345 |  |  | 49,401 |
Net unrealized tax benefit on cash flow hedging derivatives |  | 4 |  |  | 1,159 |
Net unrealized tax benefit on pension plans |  | 144 |  |  | 144 |
Accumulated other comprehensive loss |  | $ | (89,257) |  |  | $ | (143,016) |
The following table presents the components of other comprehensive (loss) for the three and nine months ended September 30, 2024 and 2023:
(In thousands) |  | Before Tax |  | Tax Effect |  | Net of Tax
Three Months Ended September 30, 2024 |  |  |  |  |  |
Net unrealized holding gain on AFS securities: |  |  |  |  |  |
Net unrealized gains arising during the period |  | $ | 25,250 |  |  | $ | (6,616) |  |  | $ | 18,634 |
Less: reclassification adjustment for (losses) realized in net income |  | — |  |  | — |  |  | — |
Net unrealized holding gain on AFS securities |  | 25,250 |  |  | (6,616) |  |  | 18,634 |
Net unrealized gain on cash flow hedging derivatives: |  |  |  |  |  |
Net unrealized gain arising during the period |  | 9,190 |  |  | (2,499) |  |  | 6,691 |
Less: reclassification adjustment for (losses) realized in net income |  | (159) |  |  | 43 |  |  | (116) |
Net unrealized gain on cash flow hedging derivatives |  | 9,349 |  |  | (2,542) |  |  | 6,807 |
Other comprehensive income |  | $ | 34,599 |  |  | $ | (9,158) |  |  | $ | 25,441 |
Three Months Ended September 30, 2023 |  |  |  |  |  |
Net unrealized holding loss on AFS securities: |  |  |  |  |  |
Net unrealized (losses) arising during the period |  | $ | (40,525) |  |  | $ | 10,544 |  |  | $ | (29,981) |
Less: reclassification adjustment for gains realized in net income |  | — |  |  | — |  |  | — |
Net unrealized holding (loss) on AFS securities |  | (40,525) |  |  | 10,544 |  |  | (29,981) |
Net unrealized loss on cash flow hedging derivatives: |  |  |  |  |  |
Net unrealized (loss) arising during the period |  | (3,118) |  |  | 836 |  |  | (2,282) |
Less: reclassification adjustment for (losses) realized in net income |  | (159) |  |  | 42 |  |  | (117) |
Net unrealized (loss) on cash flow hedging derivatives |  | (2,959) |  |  | 794 |  |  | (2,165) |
Other comprehensive (loss) |  | $ | (43,484) |  |  | $ | 11,338 |  |  | $ | (32,146) |
(In thousands) |  | Before Tax |  | Tax Effect |  | Net of Tax
Nine Months Ended September 30, 2024 |  |  |  |  |  |
Net unrealized holding gain on AFS securities: |  |  |  |  |  |
Net unrealized gains arising during the period |  | $ | 18,812 |  |  | $ | (4,501) |  |  | $ | 14,311 |
Less: reclassification adjustment for (losses) realized in net income |  | (49,909) |  |  | 13,555 |  |  | (36,354) |
Net unrealized holding gain on AFS securities |  | 68,721 |  |  | (18,056) |  |  | 50,665 |
Net unrealized gain on cash flow hedging derivatives: |  |  |  |  |  |
Net unrealized gain arising during the period |  | 3,776 |  |  | (1,026) |  |  | 2,750 |
Less: reclassification adjustment for (losses) realized in net income |  | (473) |  |  | 129 |  |  | (344) |
Net unrealized gain on cash flow hedging derivatives |  | 4,249 |  |  | (1,155) |  |  | 3,094 |
Other comprehensive income |  | $ | 72,970 |  |  | $ | (19,211) |  |  | $ | 53,759 |
Nine Months Ended September 30, 2023 |  |  |  |  |  |
Net unrealized holding loss on AFS securities: |  |  |  |  |  |
Net unrealized (losses) arising during the period |  | $ | (41,398) |  |  | $ | 10,701 |  |  | $ | (30,697) |
Less: reclassification adjustment for gains realized in net income |  | — |  |  | — |  |  | — |
Net unrealized holding (loss) on AFS securities |  | (41,398) |  |  | 10,701 |  |  | (30,697) |
Net unrealized (loss) on cash flow hedging derivatives: |  |  |  |  |  |
Net unrealized (loss) arising during the period |  | (9,545) |  |  | 2,562 |  |  | (6,983) |
Less: reclassification adjustment for (losses) realized in net income |  | (473) |  |  | 127 |  |  | (346) |
Net unrealized (loss) on cash flow hedging derivatives |  | (9,072) |  |  | 2,435 |  |  | (6,637) |
Other comprehensive (loss) |  | $ | (50,470) |  |  | $ | 13,136 |  |  | $ | (37,334) |
The following table presents the changes in each component of accumulated other comprehensive income/(loss), for the three and nine months ended September 30, 2024 and 2023:
(In thousands) |  | Net unrealized holding loss on AFS Securities |  | Net loss on effective cash flow hedging derivatives |  |  |  | Net unrealized holding loss on pension plans |  | Total
Three Months Ended September 30, 2024 |  |  |  |  |  |  |  |  |  |
Balance at Beginning of Period |  | $ | (107,495) |  |  | $ | (6,819) |  |  |  |  | $ | (384) |  |  | $ | (114,698) |
Other comprehensive (loss) before reclassifications |  | 18,634 |  |  | 6,691 |  |  |  |  | — |  |  | 25,325 |
Less: amounts reclassified from accumulated other comprehensive (loss) |  | — |  |  | (116) |  |  |  |  | — |  |  | (116) |
Total other comprehensive income |  | 18,634 |  |  | 6,807 |  |  |  |  | — |  |  | 25,441 |
Balance at End of Period |  | $ | (88,861) |  |  | $ | (12) |  |  |  |  | $ | (384) |  |  | $ | (89,257) |
Three Months Ended September 30, 2023 |  |  |  |  |  |  |  |  |  |
Balance at Beginning of Period |  | $ | (176,274) |  |  | $ | (9,350) |  |  |  |  | $ | (616) |  |  | $ | (186,240) |
Other comprehensive income before reclassifications |  | (29,981) |  |  | (2,282) |  |  |  |  | — |  |  | (32,263) |
Less: amounts reclassified from accumulated other comprehensive (loss) |  | — |  |  | (117) |  |  |  |  | — |  |  | (117) |
Total other comprehensive (loss) |  | (29,981) |  |  | (2,165) |  |  |  |  | — |  |  | (32,146) |
Balance at End of Period |  | $ | (206,255) |  |  | $ | (11,515) |  |  |  |  | $ | (616) |  |  | $ | (218,386) |
Nine Months Ended September 30, 2024 |  |  |  |  |  |  |  |  |  |
Balance at Beginning of Period |  | $ | (139,526) |  |  | $ | (3,106) |  |  |  |  | $ | (384) |  |  | $ | (143,016) |
Other comprehensive (loss) before reclassifications |  | 14,311 |  |  | 2,750 |  |  |  |  | — |  |  | 17,061 |
Less: amounts reclassified from accumulated other comprehensive income |  | (36,354) |  |  | (344) |  |  |  |  | — |  |  | (36,698) |
Total other comprehensive income |  | 50,665 |  |  | 3,094 |  |  |  |  | — |  |  | 53,759 |
Balance at End of Period |  | (88,861) |  |  | (12) |  |  |  |  | (384) |  |  | (89,257) |
Nine Months Ended September 30, 2023 |  |  |  |  |  |  |  |  |  |
Balance at Beginning of Period |  | $ | (175,558) |  |  | $ | (4,878) |  |  |  |  | $ | (616) |  |  | $ | (181,052) |
Other comprehensive (loss) before reclassifications |  | (30,697) |  |  | (6,983) |  |  |  |  | — |  |  | (37,680) |
Less: amounts reclassified from accumulated other comprehensive income |  | — |  |  | (346) |  |  |  |  | — |  |  | (346) |
Total other comprehensive (loss) |  | (30,697) |  |  | (6,637) |  |  |  |  | — |  |  | (37,334) |
Balance at End of Period |  | $ | (206,255) |  |  | $ | (11,515) |  |  |  |  | $ | (616) |  |  | $ | (218,386) |
The following table presents the amounts reclassified out of each component of accumulated other comprehensive income for the three and nine months ended September 30, 2024 and 2023:
|  |  |  |  |  | Affected Line Item in the
|  | Three Months Ended September 30, |  | Statement where Net Income
(In thousands) |  | 2024 |  | 2023 |  | is Presented
Realized (losses) on AFS securities: |  |  |  |  |  |
|  | $ | — |  |  | $ | — |  |  | Non-interest income
|  | — |  |  | — |  |  | Tax expense
|  | — |  |  | — |  |  | Net of tax
Realized (losses) on cash flow hedging derivatives: |  |  |  |  |  |
|  | (159) |  |  | (159) |  |  | Interest expense
|  | — |  |  | — |  |  | Non-interest expense
|  | 43 |  |  | 42 |  |  | Tax benefit
|  | (116) |  |  | (117) |  |  | Net of tax
Total reclassifications for the period |  | $ | (116) |  |  | $ | (117) |  |  | Net of tax
|  |  |  |  |  | Affected Line Item in the
|  | Nine Months Ended September 30, |  | Statement where Net Income
(In thousands) |  | 2024 |  | 2023 |  | is Presented
Realized (losses) on AFS securities: |  |  |  |  |  |
|  | $ | (49,909) |  |  | $ | — |  |  | Non-interest income
|  | 13,555 |  |  | — |  |  | Tax expense
|  | (36,354) |  |  | — |  |  | Net of tax
Realized (losses) on cash flow hedging derivatives: |  |  |  |  |  |
|  | (473) |  |  | (473) |  |  | Interest expense
|  | — |  |  | — |  |  | Non-interest expense
|  | 129 |  |  | 127 |  |  | Tax benefit
|  | (344) |  |  | (346) |  |  | Net of tax
Total reclassifications for the period |  | $ | (36,698) |  |  | $ | (346) |  |  | Net of tax

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