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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Schedule of ASC 326 Adoption

The following tables show the impact to our financial statement line items due to adoption of ASC 326 as of and during the quarter ended December 31, 2020.

(in thousands)			Pre-Tax Increase (Decrease) Upon the Adoption of CECL			Deferred Tax Effect			After Tax Impact of Adoption of CECL
Impact to allowance for credit losses on loans:
Allowance for credit losses on loans			$	748
Retained earnings (cumulative transition adjustment)			$	(1,604)		$	474		$	(1,130)
Net income (reversal of provision for credit losses on loans)			$	856		$	(253)		$	603
Impact to allowance for credit losses on unfunded loan commitments:
Allowance for credit losses on unfunded commitments			$	1,082
Retained earnings (cumulative transition adjustment)			$	(122)		$	36		$	(86)
Net income (provision for credit losses on unfunded commitments)			$	(960)		$	284		$	(676)

The following table shows the impact on the allowance for credit losses due to the transition from the incurred loss method to the CECL method by loan class.

(in thousands)			Pre-Adoption Balance at September 30, 2020			Cumulative Transition Adjustment 1			Post Adoption Adjusted Balance at October 1, 2020
Allowance for credits losses on loans:
Commercial and industrial			$	2,525		$	(278)		$	2,247
Real estate:
Commercial owner-occupied			3,135			138			3,273
Commercial investor-owned			11,624			1,755			13,379
Construction			860			201			1,061
Home equity			1,038			(361)			677
Other residential			1,260			(212)			1,048
Installment and other consumer loans			406			(125)			281
Unallocated			1,265			486			1,751
Total			$	22,113		$	1,604		$	23,717
Allowance for credit losses on unfunded commitments			$	1,697		$	122		$	1,819
1 The cumulative transition adjustment resulted from applying the CECL method, which was based on economic forecasts and other assumptions as of December 31, 2019. Refer to Note 3, Loans and Allowance for Credit Losses, for more information.

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

At December 31, 2021, the future estimated amortization expense for the CDI arising from our past acquisitions is as follows:

(in thousands)			2022			2023			2024			2025			2026			Thereafter			Total
Core deposit intangible amortization			$	1,489		$	1,350		$	975		$	875		$	773		$	1,143		$	6,605

The future amortization expense for the CDI arising from the Merger is as follows:

(in thousands)			2022			2023			2024			2025			2026			Thereafter			Total
Core deposit intangible amortization			$	707		$	630		$	552		$	475		$	397		$	830		$	3,591

Schedule of Earnings Per Share Reconciliation

The following table shows: 1) weighted average basic shares, 2) potentially dilutive weighted average common shares related to stock options and unvested restricted stock awards, and 3) weighted average diluted shares. Basic EPS are calculated by dividing net income by the weighted average number of common shares outstanding during each annual period, excluding unvested restricted stock awards. Diluted EPS are calculated using the weighted average number of potentially dilutive common shares. The number of potentially dilutive common shares included in year-to-date diluted EPS is a year-to-date weighted average of potentially dilutive common shares included in each quarterly diluted EPS computation. In computing diluted EPS, we exclude anti-dilutive shares such as options whose exercise prices exceed the current common stock price, as they would not reduce EPS under the treasury method. We have two forms of outstanding common stock: common stock and unvested restricted stock awards. Holders of unvested restricted stock awards receive non-forfeitable dividends at the same rate as common shareholders and they both share equally in undistributed earnings. Under the two-class method, the difference in EPS is nominal for these participating securities.

(in thousands, except per share data)1			2021			2020			2019
Weighted average basic common shares outstanding			14,340			13,525			13,620
Potentially dilutive common shares related to:
Stock options			62			69			148
Unvested restricted stock awards			20			23			26
Weighted average diluted common shares outstanding			14,422			13,617			13,794
Net income			$	33,228		$	30,242		$	34,241
Basic EPS			$	2.32		$	2.24		$	2.51
Diluted EPS			$	2.30		$	2.22		$	2.48
Weighted average anti-dilutive common shares not included in the calculation of diluted EPS			97			148			35

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