XML 24 R10.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Authoritative Accounting Guidance | 12 Months Ended
--- | ---
Dec. 31, 2021
Accounting Changes and Error Corrections [Abstract] |
Authoritative Accounting Guidance | Note 1b – Authoritative Accounting Guidance Adoption of New Accounting Standards in 2021 Effective January 1, 2021, the Company adopted Accounting Standards Update (“ASU”) 2016-13 “ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which replaced the prior incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL” or the “CECL Standard”). The measurement of expected credit losses under the CECL Standard is applicable to financial assets measured at amortized cost, including portfolio loans and investment securities classified as held-to-maturity (“HTM”). It also applies to off-balance sheet credit exposures including loan commitments, standby letters of credit, financial guarantees and other similar instruments. In addition, the CECL Standard changes the accounting for investment securities classified as available-for-sale (“AFS”), including a requirement that estimated credit losses on AFS securities be presented as an allowance rather than as a direct write-down of the carrying balance of securities which we do not intend to sell, or believe that it is more likely than not, that we will be required to sell. The Company adopted the CECL Standard using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures. As discussed further below, purchased credit deteriorated assets were measured on a prospective basis in accordance with the CECL Standard and all purchased credit impaired loans as of December 31, 2020 were considered purchased credit deteriorated loans upon adoption. Results for reporting periods beginning after January 1, 2021 are presented under the CECL Standard while prior period amounts continue to be reported in accordance with previously applicable accounting guidance. The adoption of the CECL Standard resulted in the following adjustments to our financial statements as of January 1, 2021 (dollars in thousands):
|  | Change in Consolidated Statement of Condition |  |  | Tax Effect |  |  | Change to Retained Earnings from Adoption of CECL |
Allowance for credit losses (“ACL”) (loans) |  | $ | 1,350 |  |  | $ | 406 |  |  | $ | 944 |
Adjustment related to purchased credit-impaired loan marks(1) |  |  | 5,207 |  |  |  | - |  |  |  | - |
Total ACL – loans |  |  | 6,557 |  |  |  | 406 |  |  |  | 944 |
ACL (unfunded credit commitments) |  |  | 2,833 |  |  |  | 852 |  |  |  | 1,981 |
Total impact of CECL adoption |  | $ | 9,390 |  |  | $ | 1,258 |  |  | $ | 2,925 |
| ​(1) This amount represents a gross-up of the balance sheet related to nonaccretable credit marks of purchased credit-impaired loans resulting from adoption of CECL on January 1, 2021.
Loans designated as purchased credit impaired loans (“PCI”) and accounted for under Accounting Standards Codification (“ASC”) 310-30 were designated as purchased with credit deterioration loans (“PCD”). In accordance with the CECL Standard, the Company did not reassess whether PCI loans met the criteria of PCD loans as of the date of adoption and determined all PCI loans were PCD loans. The Company recorded an increase to the balance of PCD loans and an increase to the ACL for loans of $5.2 million, which represented the expected credit losses for PCD loans. The remaining non-credit discount (based on the adjusted amortized cost basis) will be accreted into interest income at the effective interest rate as of January 1, 2021 over the remaining estimated life of the loans. Also, in accordance with the CECL Standard, the Company did not reassess whether modifications to individual acquired financial assets were troubled debt restructurings (“TDRs”) as of the date of adoption. ASU No. 2021-03, “Intangibles – Goodwill and Other (Topic 350).” ASU 2021-03 requires an entity to identify and evaluate goodwill impairment triggering events when they occur to determine whether it is more likely than not that the fair value of a reporting unit (or entity, if the entity has elected the accounting alternative for amortizing goodwill and chosen that option) is less than its carrying amount. If an entity determines that it is more likely than not that the goodwill is impaired. It must test goodwill for impairment using the triggering event date as the measurement date. An entity is required to disclose the amount assigned to goodwill in total and by major business combination, or by reorganization event resulting in fresh-start reporting. Also, the entity must disclose the weighted average amortization period in total and the amortization period by major business combination, or by reorganization event resulting in fresh-start reporting. ASU 2021-03 was effective for the Company on January 1, 2021 and did not have a significant impact on our consolidated financial statement. ASU 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans.” These amendments modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. ASU 2018-14 was effective for the Company as of January 1, 2021 and did not have a significant impact on our consolidated financial statements. ASU 2021-01 “Reference Rate Reform (Topic 848)” In January 2021 the Financial Accounting Standards Board (the “FASB”), issued ASU 2021-01 to clarify the scope of ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”. ASU 2020-04 provides temporary, optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships that reference the London Interbank Offered Rate or another reference rate that is expected to be discontinued. The ASU addresses questions about whether Topic 848 can be applied to derivative instruments that do not reference a rate that is expected to be discontinued but that use an interest rate for margining, discounting, or contract price alignment that is expected to be modified as a result of reference rate reform, commonly referred to as the “discounting transition”. The amendments clarify that certain optional expedients and exceptions in Topic 848 do apply to derivatives that are affected by the discounting transition. The amendments in ASU 2021-01 are effective immediately for all entities. The amendments do not apply to contract modifications made after December 31, 2022; new hedging relationships entered into after December 31, 2022; and existing hedging relationships evaluated for effectiveness in periods after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that apply certain optional expedients in which the accounting effects are recorded through the end of the hedging relationship, including periods after December 31, 2022. The Company adopted ASU 2021-01 in January 2021, and its adoption did not have a significant impact on the Company’s audited consolidated financial statements. - 65 - Table of Contents CONNECTONE BANCORP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1b – Authoritative Accounting Guidance – (continued) Newly Issued, But Not Yet Effective Accounting Standards In November 2020, federal and state banking regulators issued the “Interagency Policy Statement on Reference Rates for Loans" to reiterate that a specific replacement rate for loans impacted by reference rate reform has not been endorsed and entities may utilize any replacement reference rate determined to be appropriate based on its funding model and customer needs. As discussed in the “Interagency Policy Statement on Reference Rates for Loans," fallback language should be included in lending contracts to provide for use of a robust fallback rate if the initial reference rate is discontinued. Additionally, federal banking regulators issued the "Interagency Statement on LIBOR Transition" acknowledging that the administrator of USD London Interbank Offered Rate (LIBOR) benchmarks has announced it will consult on its intention to cease the publication of the one week and two month USD LIBOR settings immediately following the LIBOR publication on December 31, 2021, and the remaining USD LIBOR settings immediately following the LIBOR publication on June 30, 2023. On March 5, 2021, the administrator of USD LIBOR benchmarks confirmed these dates and will cease publication of USD LIBOR tenors accordingly. As discussed in the "Interagency Statement on LIBOR Transition," regulators encouraged banks to cease entering into new contracts that use USD LIBOR as a reference rate as soon as practicable and in any event by December 31, 2021, in order to facilitate an orderly, safe and sound LIBOR transition. The Company continues to monitor efforts and evaluate the impact of reference rate reform on its consolidated financial statements; however, the impact is not expected to be significant.

X
- References No definition available. + Details
Name: | us-gaap_AccountingChangesAndErrorCorrectionsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 65 -Paragraph 1 -Subparagraph (g)(2) -URI http://asc.fasb.org/extlink&oid=123338486&loc=SL49131195-203048 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 105 -SubTopic 10 -Section 65 -Paragraph 6 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=124434974&loc=SL124442142-165695 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 65 -Paragraph 1 -Subparagraph (i) -URI http://asc.fasb.org/extlink&oid=123338486&loc=SL49131195-203048 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 65 -Paragraph 8 -Subparagraph (e)(2) -URI http://asc.fasb.org/extlink&oid=123459177&loc=SL121830611-158277 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section S99 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=122038215&loc=SL108384541-122693 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 20 -Section 65 -Paragraph 2 -Subparagraph (d)(1) -URI http://asc.fasb.org/extlink&oid=124402435&loc=SL124402458-218513 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 65 -Paragraph 6 -Subparagraph (e)(2) -URI http://asc.fasb.org/extlink&oid=123597120&loc=SL121967933-165497 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 65 -Paragraph 1 -Subparagraph (i)(2) -URI http://asc.fasb.org/extlink&oid=123338486&loc=SL49131195-203048 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 65 -Paragraph 6 -Subparagraph (e)(1) -URI http://asc.fasb.org/extlink&oid=123597120&loc=SL121967933-165497 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -Section 65 -Paragraph 2 -Subparagraph (g)(2)(iii) -URI http://asc.fasb.org/extlink&oid=124501264&loc=SL117420844-207641 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b)(4) -URI http://asc.fasb.org/extlink&oid=124431687&loc=d3e22499-107794 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -Section 65 -Paragraph 2 -Subparagraph (g)(2)(ii) -URI http://asc.fasb.org/extlink&oid=124501264&loc=SL117420844-207641 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -Section 65 -Paragraph 2 -Subparagraph (g)(2)(i) -URI http://asc.fasb.org/extlink&oid=124501264&loc=SL117420844-207641 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 65 -Paragraph 8 -Subparagraph (e)(1) -URI http://asc.fasb.org/extlink&oid=123459177&loc=SL121830611-158277 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 65 -Paragraph 15 -Subparagraph (g)(1) -URI http://asc.fasb.org/extlink&oid=121322162&loc=SL121327923-165333 Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 65 -Paragraph 1 -Subparagraph (e)(1) -URI http://asc.fasb.org/extlink&oid=123482062&loc=SL123482106-238011 Reference 18: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 20 -Section 65 -Paragraph 2 -Subparagraph (d)(2) -URI http://asc.fasb.org/extlink&oid=124402435&loc=SL124402458-218513 Reference 19: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 65 -Paragraph 1 -Subparagraph (j) -URI http://asc.fasb.org/extlink&oid=123338486&loc=SL49131195-203048 Reference 20: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -Section 65 -Paragraph 2 -Subparagraph (g)(2)(iv) -URI http://asc.fasb.org/extlink&oid=124501264&loc=SL117420844-207641 Reference 21: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 926 -SubTopic 20 -Section 65 -Paragraph 2 -Subparagraph (f)(1) -URI http://asc.fasb.org/extlink&oid=120154821&loc=SL120154904-197079 Reference 22: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section S99 -Paragraph 5 -Subparagraph (SAB Topic 11.M.Q2) -URI http://asc.fasb.org/extlink&oid=122038215&loc=d3e31137-122693 Reference 23: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 926 -SubTopic 20 -Section 65 -Paragraph 2 -Subparagraph (f)(2) -URI http://asc.fasb.org/extlink&oid=120154821&loc=SL120154904-197079 Reference 24: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=124431687&loc=d3e22499-107794 Reference 25: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 926 -SubTopic 20 -Section 65 -Paragraph 2 -Subparagraph (f)(3) -URI http://asc.fasb.org/extlink&oid=120154821&loc=SL120154904-197079 Reference 26: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 65 -Paragraph 6 -Subparagraph (e)(3) -URI http://asc.fasb.org/extlink&oid=123597120&loc=SL121967933-165497 Reference 27: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 10 -Section 65 -Paragraph 4 -Subparagraph (e)(1) -URI http://asc.fasb.org/extlink&oid=122640432&loc=SL121648383-210437 Reference 28: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (c)(1) -URI http://asc.fasb.org/extlink&oid=124431687&loc=d3e22499-107794 Reference 29: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -Section 65 -Paragraph 2 -Subparagraph (h)(2) -URI http://asc.fasb.org/extlink&oid=124501264&loc=SL117420844-207641 Reference 30: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 10 -Section 65 -Paragraph 4 -Subparagraph (e)(2) -URI http://asc.fasb.org/extlink&oid=122640432&loc=SL121648383-210437 Reference 31: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b)(1) -URI http://asc.fasb.org/extlink&oid=124431687&loc=d3e22499-107794 Reference 32: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 848 -SubTopic 10 -Section 65 -Paragraph 1 -Subparagraph (e)(1) -URI http://asc.fasb.org/extlink&oid=122150657&loc=SL122150809-237846 Reference 33: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 65 -Paragraph 8 -Subparagraph (e)(3) -URI http://asc.fasb.org/extlink&oid=123459177&loc=SL121830611-158277 Reference 34: http://www.xbrl.org/2003/role/disclosureRef -Topic 848 -SubTopic 10 -Name Accounting Standards Codification -Section 65 -Paragraph 2 -Publisher FASB -Subparagraph (c) + Details
Name: | us-gaap_NewAccountingPronouncementsAndChangesInAccountingPrinciplesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration