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SHAREHOLDERS' EQUITY AND EARNINGS PER COMMON SHARE

12 Months Ended

Dec. 31, 2020

Stockholders' Equity Note [Abstract]

SHAREHOLDERS' EQUITY AND EARNINGS PER COMMON SHARE

NOTE 13. SHAREHOLDERS’ EQUITY AND EARNINGS PER COMMON SHARE

The actual and required capital ratios at December 31, 2020 and December 31, 2019 were as follows:


		2020
								Regulatory Minimum to
		Actual						be "Well-Capitalized"
(in thousands, except ratios)		Amount			Ratio			Amount			Ratio
Company (consolidated)
Total capital to risk-weighted assets		$	353,239		13.56	%		$	273,479		10.50	%
Common equity tier 1 capital to risk-weighted assets			273,178		10.49				182,320		7.00
Tier 1 capital to risk-weighted assets			273,178		11.28				205,850		8.50
Tier 1 capital to average assets			273,178		8.12				168,147		5.00

Bank
Total capital to risk-weighted assets		$	345,397		13.27	%		$	273,298		10.50	%
Common equity tier 1 capital to risk-weighted assets			325,956		12.52				182,244		7.00
Tier 1 capital to risk-weighted assets			325,956		12.52				221,296		8.50
Tier 1 capital to average assets			325,956		9.02				180,685		5.00


		2019
								Regulatory Minimum to
		Actual						be "Well-Capitalized"
(in thousands, except ratios)		Amount			Ratio			Amount			Ratio
Company (consolidated)
Total capital to risk-weighted assets		$	341,492		13.61	%		$	263,377		10.50	%
Common equity tier 1 capital to risk-weighted assets			265,205		10.57				175,584		7.00
Tier 1 capital to risk-weighted assets			285,825		11.39				213,211		8.50
Tier 1 capital to average assets			285,825		8.13				175,890		5.00

Bank
Total capital to risk-weighted assets		$	310,982		12.42	%		$	262,999		10.50	%
Common equity tier 1 capital to risk-weighted assets			295,315		11.79				175,332		7.00
Tier 1 capital to risk-weighted assets			295,315		11.79				212,904		8.50
Tier 1 capital to average assets			295,315		8.39				175,996		5.00

At each date shown, the Company 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.

The Company and the Bank are subject to the Basel III rule that requires the Company and the Bank to assess their Common equity tier 1 capital to risk weighted assets and the Company and the Bank each exceed the minimum to be “well-capitalized.” Effective January 1, 2019, all 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%.

Accumulated Other Comprehensive Income

Components of accumulated other comprehensive income at December 31, 2020 and December 31, 2019 are as follows:


(in thousands)		2020			2019
Accumulated other comprehensive income, before tax:
Net unrealized gain on AFS securities		$	13,069		$	7,250
Net unrealized gain (loss) on hedging derivatives			3,144			(628)
Net unrealized loss on post-retirement plans			(1,850)			(1,512)

Income taxes related to items of accumulated other comprehensive income:
Net unrealized gain on AFS securities			(3,046)			(1,703)
Net unrealized (gain) loss on hedging derivatives			(733)			149
Net unrealized loss on post-retirement plans			432			355
Accumulated other comprehensive income		$	11,016		$	3,911

The following table presents the components of other comprehensive income in 2020, 2019 and 2018:


		2020
(in thousands)		Before Tax			Tax Effect			Net of Tax
Net unrealized gain on AFS securities:
Net unrealized gain arising during the period		$	11,264		$	(2,636)		$	8,628
Less: reclassification adjustment for gains (losses) realized in net income			5,445			(1,291)			4,154
Net unrealized gain on AFS securities			5,819			(1,345)			4,474

Net unrealized gain on hedging derivatives:
Net unrealized loss arising during the period			(1,080)			37			(1,043)
Less: reclassification adjustment for (losses) gains realized in net income			(4,852)			917			(3,935)
Net unrealized gain on hedging derivatives			3,772			(880)			2,892

Net unrealized loss on post-retirement plans:
Net unrealized loss arising during the period			(338)			77			(261)
Less: reclassification adjustment for gains (losses) realized in net income			—			—			—
Net unrealized loss on post-retirement plans			(338)			77			(261)
Other comprehensive income		$	9,253		$	(2,148)		$	7,105


		2019
(in thousands)		Before Tax			Tax Effect			Net of Tax
Net unrealized gain on AFS securities:
Net unrealized gain arising during the period		$	18,883		$	(4,489)		$	14,394
Less: reclassification adjustment for gains (losses) realized in net income			237			(55)			182
Net unrealized gain on AFS securities			18,646			(4,434)			14,212

Net unrealized loss on derivative hedges:
Net unrealized loss arising during the period			(938)			289			(649)
Less: reclassification adjustment for gains (losses) realized in net income			(3,156)			737			(2,419)
Net unrealized gain on derivative hedges			2,218			(448)			1,770

Net unrealized loss on post-retirement plans:
Net unrealized loss arising during the period			(352)			83			(269)
Less: reclassification adjustment for gains (losses) realized in net income			—			—			—
Net unrealized loss on post-retirement plans			(352)			83			(269)
Other comprehensive income		$	20,512		$	(4,799)		$	15,713


		2018
(in thousands)		Before Tax			Tax Effect			Net of Tax
Net unrealized loss on AFS securities:
Net unrealized arising during the period		$	(9,487)		$	2,194		$	(7,293)
Less: reclassification adjustment for gains (losses) realized in net income			(924)			216			(708)
Net unrealized loss on AFS securities			(8,563)			1,978			(6,585)

Net unrealized gain on derivative hedges:
Net unrealized gain arising during the period			654			(168)			486
Less: reclassification adjustment for gains (losses) realized in net income			—			—			—
Net unrealized gain on derivative hedges			654			(168)			486

Net unrealized loss on post-retirement plans:
Net unrealized loss arising during the period			(245)			54			(191)
Less: reclassification adjustment for gains (losses) realized in net income			(29)			7			(22)
Net unrealized loss on post-retirement plans			(216)			47			(169)
Other comprehensive loss		$	(8,125)		$	1,857		$	(6,268)

The following table presents the changes in each component of accumulated other comprehensive income/(loss) in 2020, 2019 and 2018:


		2020
		Net unrealized			Net loss on			Net unrealized
		gain			effective cash			loss
		on AFS			flow hedging			on pension
(in thousands)		Securities			derivatives			plans			Total
Balance at beginning of period		$	5,547		$	(479)		$	(1,157)		$	3,911
Other comprehensive gain (loss) before reclassifications			8,628			(1,043)			(261)			7,324
Less: amounts reclassified from accumulated other comprehensive income			4,154			(3,935)			—			219
Total other comprehensive income (loss)			4,474			2,892			(261)			7,105
Balance at end of period		$	10,021		$	2,413		$	(1,418)		$	11,016


		2019
		Net unrealized			Net loss on			Net unrealized
		(loss) gain			effective cash			loss
		on AFS			flow hedging			on pension
(in thousands)		Securities			derivatives			plans			Total
Balance at beginning of period		$	(8,665)		$	(2,249)		$	(888)		$	(11,802)
Other comprehensive (loss) gain before reclassifications			14,394			(649)			(269)			13,476
Less: amounts reclassified from accumulated other comprehensive income			182			(2,419)			—			(2,237)
Total other comprehensive income (loss)			14,212			1,770			(269)			15,713
Less: amounts reclassified from accumulated other comprehensive income for ASU 2018-02			—			—			—			—
Balance at end of period		$	5,547		$	(479)		$	(1,157)		$	3,911


		2018
		Net unrealized			Net loss on			Net unrealized
		(loss) gain			effective cash			loss
		on AFS			flow hedging			on pension
(in thousands)		Securities			derivatives			plans			Total
Balance at beginning of period		$	(1,713)		$	(2,250)		$	(591)		$	(4,554)
Other comprehensive (loss) gain before reclassifications			(7,293)			486			(191)			(6,998)
Less: amounts reclassified from accumulated other comprehensive income			(708)			—			(22)			(730)
Total other comprehensive (loss) income			(6,585)			486			(169)			(6,268)
Less: amounts reclassified from accumulated other comprehensive income for ASU 2018-02			(367)			(485)			(128)			(980)
Balance at end of period		$	(8,665)		$	(2,249)		$	(888)		$	(11,802)

The following tables presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) in 2020, 2019 and 2018:


											Affected Line Item where
(in thousands)		2020			2019			2018			Net Income is Presented
Net realized gains on AFS securities:
Before tax		$	5,445		$	237		$	(924)		Non-interest income
Tax effect			(1,291)			(55)			216		Tax expense
Total reclassifications for the period		$	4,154		$	182		$	(708)


											Affected Line Item where
(in thousands)		2020			2019			2018			Net Income is Presented
Realized loss on effective derivative hedges:
Before tax		$	4,852		$	(3,156)		$	—		Non-interest expense
Tax effect			(917)			737			—		Tax expense
Total reclassifications for the period		$	3,935		$	(2,419)		$	—


											Affected Line Item where
(in thousands)		2020			2019			2018			Net Income is Presented
Realized loss on effective post retirement:
Before tax		$	—		$	—		$	(29)		Non-interest expense
Tax effect			—			—			7		Tax expense
Total reclassifications for the period		$	—		$	—		$	(22)

Earnings per share have been computed based on the following (average diluted shares outstanding are calculated using the treasury stock method):


(in thousands, except per share and share data)		2020			2019			2018
Net income		$	33,244		$	22,620		$	32,937

Average number of basic common shares outstanding			15,245,728			15,540,884			15,487,686
Plus: dilutive effect of stock options and awards outstanding			25,819			46,109			76,778
Average number of diluted common shares outstanding			15,271,547			15,586,993			15,564,464

Anti-dilutive options excluded from earnings calculation			—			—			7,991

Earnings per share:
Basic		$	2.18		$	1.46		$	2.13
Diluted		$	2.18		$	1.45		$	2.12