0001964333-23-000213 | 10-Q | XBRL Viewer | Burke Herbert Financial Services Corp

Securities

9 Months Ended

Sep. 30, 2023

The carrying amount of AFS securities and their approximate fair values at September 30, 2023, and December 31, 2022, are summarized as follows (in thousands):


	September 30, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities Available-for-Sale
U.S. Treasuries and government agencies	$	197,310	$	—	$	24,328	$	172,982
Obligations of states and municipalities	536,885		7		107,413		429,479
Residential mortgage backed - agency	47,494		—		5,658		41,836
Residential mortgage backed - non-agency	307,763		4		25,659		282,108
Commercial mortgage backed - agency	36,874		20		1,355		35,539
Commercial mortgage backed - non-agency	181,844		—		8,500		173,344
Asset-backed	82,811		11		1,650		81,172
Other	9,500		—		1,565		7,935
Total	$	1,400,481	$	42	$	176,128	$	1,224,395


	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities Available-for-Sale
U.S. Treasuries and government agencies	$	198,154	$	—	$	23,161	$	174,993
Obligations of states and municipalities	550,590		12		96,695		453,907
Residential mortgage backed - agency	57,883		14		4,836		53,061
Residential mortgage backed - non-agency	365,983		2		26,690		339,295
Commercial mortgage backed - agency	61,810		75		1,952		59,933
Commercial mortgage backed - non-agency	191,709		10		8,420		183,299
Asset-backed	101,791		49		3,214		98,626
Other	9,500		—		857		8,643
Total	$	1,537,420	$	162	$	165,825	$	1,371,757

At September 30, 2023, and December 31, 2022, AFS securities with amortized costs of $831.0 million and $637.1 million, respectively, and with estimated fair values of $709.3 million and $552.5 million, respectively, were pledged to serve as collateral for secured borrowings, derivative exposures, or to secure public deposits as required or permitted by law.

The gross realized gains, realized losses, and proceeds from the sales of securities for the nine months ended September 30, 2023, and September 30, 2022, were as follows (in thousands):


	September 30, 2023		September 30, 2022
Gross realized gains	$	772	$	1,117
Gross realized losses	(884)		(1,054)
Proceeds from sales of securities	77,780		142,475

The tax benefit (provision) related to these net realized gains and losses for September 30, 2023, and September 30, 2022, was $23.5 thousand, and ($13.2) thousand, respectively.

The maturities of AFS securities at September 30, 2023, were as follows (in thousands): (Expected maturities of securities not due at a single maturity date are based on average life at estimated prepayment speed. Expected maturities may differ from contractual maturities because borrowers have the right to call or prepay some obligations with or without call or prepayment penalties).


	September 30, 2023
	Amortized Cost
	One Year or Less		One to Five Years		Five to Ten Years		After Ten Years		Total
Securities Available-for-Sale
U.S. Treasuries and government agencies	$	29,802	$	78,123	$	89,385	$	—	$	197,310
Obligations of states and municipalities	370		15,989		234,600		285,926		536,885
Residential mortgage backed - agency	42		808		46,644		—		47,494
Residential mortgage backed - non-agency	72,280		137,888		95,182		2,413		307,763
Commercial mortgage backed - agency	165		19,531		17,178		—		36,874
Commercial mortgage backed - non-agency	13,613		163,088		5,143		—		181,844
Asset-backed	8,247		41,248		33,316		—		82,811
Other	—		—		9,500		—		9,500
Total	$	124,519	$	456,675	$	530,948	$	288,339	$	1,400,481


	September 30, 2023
	Fair Value
	One Year or Less		One to Five Years		Five to Ten Years		After Ten Years		Total
Securities Available-for-Sale
U.S. Treasuries and government agencies	$	29,203	$	67,674	$	76,105	$	—	$	172,982
Obligations of states and municipalities	370		14,290		195,558		219,261		429,479
Residential mortgage backed - agency	42		778		41,016		—		41,836
Residential mortgage backed - non-agency	69,814		129,486		80,461		2,347		282,108
Commercial mortgage backed - agency	165		18,990		16,384		—		35,539
Commercial mortgage backed - non-agency	13,220		156,187		3,937		—		173,344
Asset-backed	8,178		40,695		32,299		—		81,172
Other	—		—		7,935		—		7,935
Total	$	120,992	$	428,100	$	453,695	$	221,608	$	1,224,395

At September 30, 2023, and December 31, 2022, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in any amount greater than 10% of shareholders’ equity.

The following table shows the gross unrealized losses and fair value of the Company’s securities with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2023, and December 31, 2022.

AFS securities in a continuous unrealized loss position for less than twelve months and more than twelve months are as follows (in thousands):


	September 30, 2023
	Less Than Twelve Months				More Than Twelve Months
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Total Unrealized Losses
Securities Available-for-Sale
U.S. Treasuries and government agencies	$	—	$	—	$	172,982	$	24,328	$	24,328
Obligations of states and municipalities	1,708		125		424,139		107,288		107,413
Residential mortgage backed - agency	37		1		41,798		5,657		5,658
Residential mortgage backed - non-agency	12,875		542		268,477		25,117		25,659
Commercial mortgage backed - agency	249		2		34,725		1,353		1,355
Commercial mortgage backed - non-agency	13,671		103		158,968		8,397		8,500
Asset-backed	13,080		47		58,198		1,603		1,650
Other	6,252		1,249		1,683		316		1,565
Total	$	47,872	$	2,069	$	1,160,970	$	174,059	$	176,128


	December 31, 2022
	Less Than Twelve Months				More Than Twelve Months
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Total Unrealized Losses
Securities Available-for-Sale
U.S. Treasuries and government agencies	$	28,399	$	1,131	$	146,594	$	22,030	$	23,161
Obligations of states and municipalities	128,373		12,378		320,287		84,317		96,695
Residential mortgage backed - agency	7,258		26		41,975		4,810		4,836
Residential mortgage backed - non-agency	204,866		11,822		134,056		14,868		26,690
Commercial mortgage backed - agency	23,026		562		34,847		1,390		1,952
Commercial mortgage backed - non-agency	144,193		6,171		23,374		2,249		8,420
Asset-backed	43,472		815		50,088		2,399		3,214
Other	6,877		623		1,766		234		857
Total	$	586,464	$	33,528	$	752,987	$	132,297	$	165,825

The Company is required to conduct an impairment evaluation on AFS securities to determine whether the Company has the intent to sell the security or it is more likely than not that it will be required to sell the security before recovery. If these situations apply, the guidance requires the Company to reduce the security's amortized cost basis down to its fair value through earnings. The Company also evaluates the unrealized losses on AFS securities to determine if a security's decline in fair value below its amortized cost basis is due to credit factors. The evaluation is based upon factors such as the creditworthiness of the underlying borrowers, performance of the underlying collateral, if applicable, and the level of credit support in the security structure. Management also evaluates other factors and circumstances that may be indicative of a decline in the fair value of the security due to a credit factor.

This includes, but is not limited to, an evaluation of the type of security, length of time and extent to which the fair value has been less than cost and near-term prospects of the issuer. If this assessment indicates that a credit loss exists, the present value of the expected cash flows of the security is compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost, an ACL is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis under the CECL standard, and declines due to non-credit factors are recorded in accumulated other comprehensive income (“AOCI”), net of taxes. If a credit loss is recognized in earnings, subsequent improvements to the expectation of collectability will be recognized through the ACL. If the fair value of the security increases above its amortized cost, the unrealized gain will be recorded in accumulated other comprehensive income, net of taxes, in the consolidated statements of financial condition. Prior to implementation of the CECL standard, unrealized losses caused by a credit event would require the direct write-down of the AFS security through the other-than-temporary impairment approach.

The Company did not record an ACL on the AFS securities at September 30, 2023. The Company considers the unrealized losses on the AFS securities to be related to fluctuations in market conditions, primarily interest rates, and not reflective of deterioration in credit. The Company had 403 securities in an unrealized loss position as of September 30, 2023. The Company has evaluated AFS securities in an unrealized loss position for credit-related impairment at September 30, 2023, and concluded no impairment existed based on a combination of factors, which included: (1) the securities are of high credit quality, (2) unrealized losses are primarily the result of market volatility and increases in market interest rates, (3) the contractual terms of the investments do not permit the issuer(s) to settle the securities at a price less than the par value of each investment, (4) issuers continue to make timely principal and interest payments, and (5) the Company does not intend to sell any of the investments and the accounting standard of “more likely than not” has not been met for the Company to be required to sell any of the investments before recovery of its amortized cost basis. As such, there was no ACL on AFS securities at September 30, 2023.

Securities of U.S. Treasury and Federal Agencies and Federal Agency Mortgage (Residential and Commercial) Backed Securities

At September 30, 2023, the unrealized losses associated with 12 U.S. Treasuries and Government Agency securities, 16 Residential Mortgage Backed – Agency securities, and 17 Commercial Mortgage Backed – Agency securities were generally driven by changes in interest rates and not due to credit losses given the explicit or implicit guarantees provided

by the U.S. government. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2023.

Securities of U.S. States and Municipalities

At September 30, 2023, the unrealized losses associated with 203 State and Municipal securities were primarily caused by changes in interest rates and not the credit quality of the securities. These securities are investment grade and were generally underwritten in accordance with our own investment standards prior to the decision to purchase, without relying on a bond insurer’s guarantee in making the investment decision. These securities will continue to be monitored as part of our ongoing impairment analysis but are expected to perform, even if the rating agencies reduce the credit rating of the bond insurers. As a result, we expect to recover the entire amortized cost basis of these securities. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2023.

Residential & Commercial Mortgage Backed – Non-Agency Securities

At September 30, 2023, the unrealized losses associated with 96 Residential Mortgage Backed – Non-Agency securities and 33 Commercial Mortgage Backed – Non-Agency securities were generally driven by changes in interest rates, credit spreads, and projected collateral losses. We assess for credit impairment by estimating the present value of expected cash flows. The key assumptions for determining expected cash flows include default rates, loss severities, and/or prepayment rates. Based on our assessment of the expected credit losses and the credit enhancement level of the securities, we expect to recover the entire amortized cost of these securities. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2023.

Asset-Backed Securities

At September 30, 2023, the unrealized losses associated with 23 Asset-Backed securities were generally driven by changes in interest rates, credit spreads, and projected collateral losses. We assess for credit impairment by estimating the present value of expected cash flows. The key assumptions for determining expected cash flows include default rates, loss severities, and/or prepayment rates. Based on our assessment of the expected credit losses and the credit enhancement level of the securities, we expect to recover the entire amortized cost of these securities. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2023.

Other Securities

At September 30, 2023, the unrealized losses associated with 3 securities were primarily driven by interest rates and not the credit quality of the securities. These investments were underwritten in accordance with our own investment standards prior to the decision to purchase, without relying on a bond insurer’s guarantee in making the investment decision. Based on our assessment of the expected credit losses, we expect to recover the entire amortized cost basis of the securities. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2023.

Restricted stock, at cost

The Company’s investment in Federal Home Loan Bank (“FHLB”) stock totaled $7.2 million and $16.4 million at September 30, 2023, and December 31, 2022, respectively. FHLB stock is generally viewed as a long-term investment and as a restricted investment security, which is carried at cost, because there is no market for the stock other than the FHLB or member institutions. Therefore, when evaluating FHLB stock for impairment, its value is based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. The Company does not consider this investment to be impaired at September 30, 2023, and no impairment has been recognized. FHLB stock is included in a separate line item Restricted stock, at cost on the Consolidated Balance Sheets and is not part of the Company’s AFS securities portfolio. The Company’s Restricted stock line item on the Consolidated Balance Sheets also includes an investment in Community Bankers’ Bank, totaling $50 thousand at both September 30, 2023, and December 31, 2022, which is carried at cost and is not impaired at September 30, 2023.

Deposits - Time Deposit Maturities (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Financial Services, Banking and Thrift [Abstract]
Remaining three months ending, December 31, 2023	$ 59,683
2024	269,103
2025	135,389
2026	83,185
2027	49,432
2028	78,046
Total	$ 674,838

Securities - Expected Maturity for Debt Securities, Available-for-Sale (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Amortized Cost
One Year or Less	$ 124,519
One to Five Years	456,675
Five to Ten Years	530,948
After Ten Years	288,339
Amortized Cost	1,400,481	$ 1,537,420
Fair Value
One Year or Less	120,992
One to Five Years	428,100
Five to Ten Years	453,695
After Ten Years	221,608
Fair Value	1,224,395	1,371,757
U.S. Treasuries and government agencies
Amortized Cost
One Year or Less	29,802
One to Five Years	78,123
Five to Ten Years	89,385
After Ten Years	0
Amortized Cost	197,310	198,154
Fair Value
One Year or Less	29,203
One to Five Years	67,674
Five to Ten Years	76,105
After Ten Years	0
Fair Value	172,982	174,993
Obligations of states and municipalities
Amortized Cost
One Year or Less	370
One to Five Years	15,989
Five to Ten Years	234,600
After Ten Years	285,926
Amortized Cost	536,885	550,590
Fair Value
One Year or Less	370
One to Five Years	14,290
Five to Ten Years	195,558
After Ten Years	219,261
Fair Value	429,479	453,907
Residential mortgage backed - agency
Amortized Cost
One Year or Less	42
One to Five Years	808
Five to Ten Years	46,644
After Ten Years	0
Amortized Cost	47,494	57,883
Fair Value
One Year or Less	42
One to Five Years	778
Five to Ten Years	41,016
After Ten Years	0
Fair Value	41,836	53,061
Residential mortgage backed - non-agency
Amortized Cost
One Year or Less	72,280
One to Five Years	137,888
Five to Ten Years	95,182
After Ten Years	2,413
Amortized Cost	307,763	365,983
Fair Value
One Year or Less	69,814
One to Five Years	129,486
Five to Ten Years	80,461
After Ten Years	2,347
Fair Value	282,108	339,295
Commercial mortgage backed - agency
Amortized Cost
One Year or Less	165
One to Five Years	19,531
Five to Ten Years	17,178
After Ten Years	0
Amortized Cost	36,874	61,810
Fair Value
One Year or Less	165
One to Five Years	18,990
Five to Ten Years	16,384
After Ten Years	0
Fair Value	35,539	59,933
Commercial mortgage backed - non-agency
Amortized Cost
One Year or Less	13,613
One to Five Years	163,088
Five to Ten Years	5,143
After Ten Years	0
Amortized Cost	181,844	191,709
Fair Value
One Year or Less	13,220
One to Five Years	156,187
Five to Ten Years	3,937
After Ten Years	0
Fair Value	173,344	183,299
Asset-backed
Amortized Cost
One Year or Less	8,247
One to Five Years	41,248
Five to Ten Years	33,316
After Ten Years	0
Amortized Cost	82,811	101,791
Fair Value
One Year or Less	8,178
One to Five Years	40,695
Five to Ten Years	32,299
After Ten Years	0
Fair Value	81,172	98,626
Other
Amortized Cost
One Year or Less	0
One to Five Years	0
Five to Ten Years	9,500
After Ten Years	0
Amortized Cost	9,500	9,500
Fair Value
One Year or Less	0
One to Five Years	0
Five to Ten Years	7,935
After Ten Years	0
Fair Value	$ 7,935	$ 8,643

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):


	Fair Value Measurements at September 30, 2023 Using:
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Financial assets
Investment Securities
U.S. Treasuries and government agencies	$	172,982	$	—	$	—	$	172,982
Obligations of states and municipalities	—		429,479		—		429,479
Residential mortgage backed - agency	—		41,836		—		41,836
Residential mortgage backed - non-agency	—		282,108		—		282,108
Commercial mortgage backed - agency	—		35,539		—		35,539
Commercial mortgage backed - non-agency	—		173,344		—		173,344
Asset-backed	—		81,172		—		81,172
Other	—		7,935		—		7,935
Total investment securities available-for-sale	$	172,982	$	1,051,413	$	—	$	1,224,395

Loans held-for-sale, at fair value	$	—	$	3,011	$	—	$	3,011

Derivatives	$	—	$	2,732	$	—	$	2,732

Financial liabilities
Derivatives	$	—	$	4,178	$	—	$	4,178


	Fair Value Measurements at December 31, 2022 Using:
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Financial assets
Investment Securities
U.S. Treasuries and government agencies	$	174,993	$	—	$	—	$	174,993
Obligations of states and municipalities	—		453,907		—		453,907
Residential mortgage backed - agency	—		53,061		—		53,061
Residential mortgage backed - non-agency	—		339,295		—		339,295
Commercial mortgage backed - agency	—		59,933		—		59,933
Commercial mortgage backed - non-agency	—		183,299		—		183,299
Asset-backed	—		98,626		—		98,626
Other	—		8,643		—		8,643
Total investment securities available-for-sale	$	174,993	$	1,196,764	$	—	$	1,371,757

Loans held-for-sale, at fair value	$	—	$	—	$	—	$	—

Derivatives	$	—	$	1,311	$	—	$	1,311

Financial liabilities
Derivatives	$	—	$	3,565	$	—	$	3,565

Fair Value Measurements, Nonrecurring

Assets that were measured at fair value on a non-recurring basis during the period are summarized below (in thousands):


	Fair Value Measurements at September 30, 2023 Using:
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Individually evaluated loans:
Commercial real estate	$	—	$	—	$	301	$	301
Owner-occupied commercial real estate	—		—		1,337		1,337
Acquisition, construction & development	—		—		—		—
Commercial & industrial	—		—		—		—
Single family residential	—		—		1,838		1,838
Consumer non-real estate and other	—		—		—		—
Other real estate owned	—		—		—		—


	Fair Value Measurements at December 31, 2022 Using:
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Individually evaluated loans:
Commercial real estate	$	—	$	—	$	290	$	290
Owner-occupied commercial real estate	—		—		1,295		1,295
Acquisition, construction & development	—		—		—		—
Commercial & industrial	—		—		—		—
Single family residential	—		—		911		911
Consumer non-real estate and other	—		—		—		—
Other real estate owned	—		—		—		—

Fair Value Measurement Inputs and Valuation Techniques

The following table presents quantitative information about Level 3 Fair Value Measurements for assets measured at fair value on a non-recurring basis at September 30, 2023, and December 31, 2022 (in thousands except for percentages):

Description

Fair Value

Valuation Techniques

Unobservable Inputs

Range

Weighted Average

September 30, 2023

Impaired loans

3,476

Discounted cash flow analysis

Market rate for borrower

3.6% - 8.5%

5.3%

December 31, 2022

Impaired loans

2,496

Discounted cash flow analysis

Market rate for borrower

4.5% - 6.0%

5.2%

Fair Value Disclosure of Asset and Liability Not Measured at Fair Value

The carrying amounts and estimated fair values of financial instruments not carried at fair value, at September 30, 2023, and December 31, 2022, were as follows (in thousands):


			Fair Value Measurements at September 30, 2023 Using:
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)		Total
Financial Assets
Cash and due from banks	$	9,063	$	9,063	$	—	$	—	$	9,063
Interest-earning deposits with banks	32,801		32,801		—		—		32,801
Loans, net	2,044,505		—		—		1,882,989		1,882,989
Accrued interest	15,597		—		15,597		—		15,597

Financial Liabilities
Non-interest-bearing	$	853,385	$	—	$	853,385	$	—	$	853,385
Interest-bearing	2,132,233		—		2,132,233		—		2,132,233
Other borrowed funds	299,000		—		298,133		—		298,133
Accrued interest	6,348		—		6,348		—		6,348


			Fair Value Measurements at December 31, 2022 Using:
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)		Total
Financial Assets
Cash and due from banks	$	9,124	$	9,124	$	—	$	—	$	9,124
Interest-bearing deposits with banks	41,171		41,171		—		—		41,171
Loans, net	1,866,182		—		—		1,768,903		1,768,903
Accrued interest	15,481		—		15,481		—		15,481

Financial Liabilities
Non-interest-bearing	$	960,692	$	—	$	960,692	$	—	$	960,692
Interest-bearing	1,959,708		—		1,951,227		—		1,951,227
Other borrowed funds	343,100		—		342,904		—		342,904
Accrued interest	1,452		—		1,452		—		1,452

Allowance for Credit Losses

9 Months Ended

Sep. 30, 2023

Credit Loss [Abstract]

Allowance for Credit Losses

On January 1, 2023, the Company adopted the CECL methodology as required under ASC 326. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables. For further discussion on the Company’s accounting policies and policy elections related to the accounting standards update refer to Note 1 - Nature of Business Activities and Significant Accounting Policies in these Notes to Consolidated Financial Statements. All information presented as of September 30, 2023, is in accordance with ASC 326. All other information presented prior to January 1, 2023, is in accordance with previous applicable GAAP.

The Company’s ACL is calculated quarterly, with any adjustment recorded to the provision for credit losses in the Consolidated Statement of Income. Management calculates the quantitative portion of collectively evaluated loans for all

loan categories using the WARM method. For purposes of estimating the Company’s ACL, management generally evaluates collectively evaluated loans by federal call code in order to group loans with similar risk characteristics.

Loans that do not share similar risk characteristics are evaluated on an individual loan basis and are excluded from the collective evaluation for the ACL. Loans identified to be individually evaluated under CECL include loans on non-accrual status and may include accruing loans that do not share similar risk characteristics to other accruing loans that are collectively evaluated on a loan pool basis. A specific reserve analysis may be applied to the individually evaluated loans, which considers collateral value, an observable market price, or the present value of the expected future cash flows. A specific reserve is assigned if the measured value of the loan using one of the before mentioned methods is less than the carrying value of the loan.

Based on management’s analysis, adjustments may be applied for additional factors impacting the risk of loss in the loan portfolio beyond the information that is used to calculate a reasonable and supportable forecast and a reversion period forecast on collectively evaluated loans. Management may consider an additional or reduced reserve as warranted through qualitative risk factors based on the current and expected conditions, as measured in supplemental information relative to the macroeconomic variable loss drivers used to calculate a reasonable and supportable forecast and a reversion period forecast. These qualitative risk factors considered by management are largely comparable to legacy factors prior to the adoption of CECL.

The following tables presents the activity in the ACL, including the impact of the adoption of CECL, for the three months and nine months ended September 30, 2023, and the activity for the allowance for loan losses for the three months and nine months ended September 30, 2022 (in thousands).


	Commercial real estate		Owner-occupied commercial real estate		Acquisition, construction & development		Commercial & industrial		Single family residential (1-4 units)		Consumer non-real estate and other		Unallocated		Total
Three months ended
September 30, 2023
Balance, beginning of period	$	18,639	$	719	$	1,319	$	612	$	4,520	$	110	$	—	$	25,919
Provision for (recapture of) credit losses	969		66		446		(95)		(1,135)		(51)		—		200
Charge-offs	—		—		—		—		—		(13)		—		(13)
Recoveries	4		—		—		—		1		—		—		5
Balance, end of period	$	19,612	$	785	$	1,765	$	517	$	3,386	$	46	$	—	$	26,111

September 30, 2022
Balance, beginning of period	$	15,548	$	724	$	3,607	$	214	$	1,519	$	19	$	1,731	$	23,362
Provision for (recapture of) loan losses	(1,782)		(111)		830		82		264		60		(1,731)		(2,388)
Charge-offs	—		—		—		—		—		(54)		—		(54)
Recoveries	27		—		—		—		2		4		—		33
Balance, end of period	$	13,793	$	613	$	4,437	$	296	$	1,785	$	29	$	—	$	20,953


	Commercial real estate		Owner-occupied commercial real estate		Acquisition, construction & development		Commercial & industrial		Single family residential (1-4 units)		Consumer non-real estate and other		Unallocated		Total
Nine months ended
September 30, 2023
Beginning balance, prior to adoption of CECL	$	15,477	$	635	$	2,082	$	438	$	2,379	$	28	$	—	$	21,039
Impact of the adoption of CECL	2,686		(6)		(640)		237		1,661		187		—		4,125
Provision for (recapture of) credit losses	1,414		156		323		(129)		(661)		(70)		—		1,033
Charge-offs	—		—		—		(29)		—		(105)		—		(134)
Recoveries	35		—		—		—		7		6		—		48
Balance, end of period	$	19,612	$	785	$	1,765	$	517	$	3,386	$	46	$	—	$	26,111

September 30, 2022
Balance, beginning of period	$	25,112	$	611	$	2,189	$	165	$	2,434	$	18	$	1,180	$	31,709
Provision for (recapture of) loan losses	(8,071)		2		2,248		151		(815)		101		(1,180)		(7,564)
Charge-offs	(3,282)		—		—		(20)		—		(109)		—		(3,411)
Recoveries	34		—		—		—		166		19		—		219
Balance, end of period	$	13,793	$	613	$	4,437	$	296	$	1,785	$	29	$	—	$	20,953

The information presented in the table below is not required for periods after the adoption of CECL. The following table summarizes the allowance for loan losses and the recorded investment in loans by portfolio segment and based on the impairment method (individually or collectively evaluated for impairment) as of December 31, 2022 (in thousands):


	Commercial real estate		Owner-occupied commercial real estate		Acquisition, construction & development		Commercial & industrial		Single family residential (1-4 units)		Consumer non-real estate and other		Unallocated		Total
December 31, 2022
Allowance for loan losses
Individually evaluated for impairment	$	41	$	102	$	—	$	—	$	96	$	—	$	—	$	239
Collectively evaluated for impairment	15,436		533		2,082		438		2,283		28		—		20,800
Total ending allowance balance	$	15,477	$	635	$	2,082	$	438	$	2,379	$	28	$	—	$	21,039

Loan balance:
Individually evaluated for impairment	$	331	$	2,580	$	—	$	—	$	6,158	$	—	$	—	$	9,069
Collectively evaluated for impairment	1,108,984		124,534		94,450		53,514		493,204		3,466		—		1,878,152
Total ending loan balance	$	1,109,315	$	127,114	$	94,450	$	53,514	$	499,362	$	3,466	$	—	$	1,887,221

Prior to the adoption of CECL, loans were considered impaired when, based on current information and events as of the measurement date, it was probable the Company would be unable to collect all amounts due in accordance with the original contractual terms of the loan agreements. Impaired loans included loans on non-accrual status and accruing TDRs. When determining if the Company would be unable to collect all principal and interest payments due in accordance with the contractual terms of the loan agreement, the Company considered the borrower’s capacity to pay, which included such factors as the borrower’s current financial statements, an analysis of the global cash flow sufficient to pay all debt obligations, and an evaluation of secondary sources of repayment, such as guarantor support and collateral value.

The following table presents information related to impaired loans (in thousands) by portfolio segment as of December 31, 2022:


	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized (1)
December 31, 2022
With no related allowance recorded:
Commercial real estate	$	—	$	—	$	—	$	—	$	—
Owner-occupied commercial real estate	1,184		1,394		—		1,291		97
Acquisition, construction & development	—		—		—		—		—
Commercial & industrial	—		—		—		—		—
Single family residential (1-4 units)	5,151		5,576		—		5,131		213
Consumer non-real estate and other	—		—		—		—		—
Subtotal	$	6,335	$	6,970	$	—	$	6,422	$	310

With an allowance recorded:
Commercial real estate	$	331	$	331	$	41	$	350	$	23
Owner-occupied commercial real estate	1,397		1,397		102		1,420		74
Acquisition, construction & development	—		—		—		—		—
Commercial & industrial	—		—		—		—		—
Single family residential (1-4 units)	1,007		1,141		96		1,033		57
Consumer non-real estate and other	—		—		—		—		—
Subtotal	$	2,735	$	2,869	$	239	$	2,803	$	154

(1)Cash basis interest income recognized approximates interest income recognized shown as of the twelve months ended December 31, 2022.

The recorded investment in loans excludes accrued interest receivable and loan origination fees, net due to immateriality. The following table presents the aging of the recorded investment in past due loans as of September 30, 2023, and December 31, 2022, by portfolio segment (in thousands):


	September 30, 2023
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due		Total Past Due		Current Loans		Total Loans		90 Days Past Due & Still Accruing		Non-accrual loans
Commercial real estate	$	—	$	—	$	6	$	6	$	1,260,647	$	1,260,653	$	—	$	—
Owner-occupied commercial real estate	—		—		667		667		122,829		123,496		—		1,028
Acquisition, construction & development	—		—		—		—		96,535		96,535		—		—
Commercial & industrial	—		—		—		—		61,571		61,571		—		—
Single family residential (1-4 units)	—		39		59		98		525,460		525,558		—		1,828
Consumer non-real estate and other	3		3		—		6		2,797		2,803		—		—
Total	$	3	$	42	$	732	$	777	$	2,069,839	$	2,070,616	$	—	$	2,856

	December 31, 2022
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due		Total Past Due		Current Loans		Total Loans		90 Days Past Due & Still Accruing		Non-accrual loans
Commercial real estate	$	—	$	—	$	—	$	—	$	1,109,315	$	1,109,315	$	—	$	—
Owner-occupied commercial real estate	—		—		—		—		127,114		127,114		—		1,184
Acquisition, construction & development	—		—		—		—		94,450		94,450		—		—
Commercial & industrial	—		—		—		—		53,514		53,514		—		—
Single family residential (1-4 units)	1,403		154		546		2,103		497,259		499,362		—		4,313
Consumer non-real estate and other	—		4		—		4		3,462		3,466		—		—
Total	$	1,403	$	158	$	546	$	2,107	$	1,885,114	$	1,887,221	$	—	$	5,497

Credit Quality Indicators

The Company categorizes loans 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, current economic information, and other factors. The Company analyzes loans individually by classifying the loans by credit risk. The Company internally grades all commercial loans at the time of origination. In addition, the Company performs an annual review on the top twenty-five non-homogenous commercial loan relationships as measured by total Company exposure to each borrower. The Company uses the following definitions for credit risk classifications:

Pass: These include satisfactory loans that have acceptable levels of risk.

Special Mention: Loans classified as special mention have a potential credit 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 institution’s credit position at some future date.

Substandard: Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the orderly liquidation of debt. Loans classified as substandard are inadequately protected by sound net worth, payment capacity of the borrower, or of the collateral pledged. If weaknesses go uncorrected, there is potential for partial loss of principal and/or interest.

Doubtful: Loans classified as doubtful have 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 unlikely.

Loss: Loans classified as a loss are considered to be uncollectible and cannot be justified to continue as viable assets. While there may be the possibility of some recovery in the future, it is not practical or desirable to defer writing off these loans at the present time.

The Company has a portfolio of smaller homogenous loans that are not individually risk rated that are included within the single family residential and consumer non-real estate and other loan classes. Generally, these loan classes are rated as “Pass” unless these loans are on non-accrual and are then classified as substandard.

The following table presents the amortized cost basis of the loan portfolio, by year of origination, loan class, and credit quality, as of September 30, 2023 (in thousands):


	Term Loans
	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total
Commercial real estate
Pass	$	156,332	$	256,044	$	166,943	$	23,638	$	70,916	$	412,169	$	34,974	$	1,121,016
Special Mention	—		12,235		35,449		—		10,431		1,830		—		59,945
Substandard	—		15,480		12,847		—		1,716		49,649		—		79,692
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total	$	156,332	$	283,759	$	215,239	$	23,638	$	83,063	$	463,648	$	34,974	$	1,260,653

Year to date gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Owner-occupied commercial real estate
Pass	$	4,688	$	29,017	$	9,516	$	14,340	$	12,848	$	43,182	$	4,585	$	118,176
Special Mention	—		—		—		—		—		331		—		331
Substandard	—		536		—		—		—		4,453		—		4,989
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total	$	4,688	$	29,553	$	9,516	$	14,340	$	12,848	$	47,966	$	4,585	$	123,496

Year to date gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Acquisition, construction & development
Pass	$	4,871	$	27,645	$	15,510	$	—	$	760	$	23,951	$	1,705	$	74,442
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		22,093		—		22,093
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total	$	4,871	$	27,645	$	15,510	$	—	$	760	$	46,044	$	1,705	$	96,535

Year to date gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial & industrial
Pass	$	23,329	$	16,379	$	5,068	$	466	$	24	$	1,467	$	13,948	$	60,681
Special Mention	—		—		890		—		—		—		—		890
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total	$	23,329	$	16,379	$	5,958	$	466	$	24	$	1,467	$	13,948	$	61,571

Year to date gross charge-offs	$	—	$	—	$	—	$	29	$	—	$	—	$	—	$	29

Single family residential (1-4 units)
Pass	$	69,336	$	123,047	$	60,748	$	32,408	$	41,256	$	142,985	$	53,951	$	523,731
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		291		246		—		1,290		—		1,827
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total	$	69,336	$	123,047	$	61,039	$	32,654	$	41,256	$	144,275	$	53,951	$	525,558

Year to date gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—


Consumer non-real estate and other
Pass	$	425	$	247	$	145	$	190	$	411	$	337	$	1,048	$	2,803
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total	$	425	$	247	$	145	$	190	$	411	$	337	$	1,048	$	2,803

Year to date gross charge-offs	$	105	$	—	$	—	$	—	$	—	$	—	$	—	$	105

The value of outstanding loans by credit quality indicators as of December 31, 2022 were as follows (in thousands):


	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2022
Commercial real estate	$	1,011,025	$	62,907	$	35,383	$	—	$	—	$	1,109,315
Owner-occupied commercial real estate	121,621		1,963		3,530		—		—		127,114
Acquisition, construction & development	68,220		836		25,394		—		—		94,450
Commercial & industrial	53,273		—		241		—		—		53,514
Single family residential (1-4 units)	494,994		55		4,313		—		—		499,362
Consumer non-real estate and other	3,466		—		—		—		—		3,466
Total	$	1,752,599	$	65,761	$	68,861	$	—	$	—	$	1,887,221

The following tables present information about collateral-dependent loans that were individually evaluated for purposes of determining the ACL as of September 30, 2023 (in thousands):


	Collateral-Dependent Loans
	With Allowance				With No Related Allowance		Total
	Amortized Cost		Related Allowance		Amortized Cost		Amortized Cost		Related Allowance
September 30, 2023
Commercial real estate	$	—	$	—	$	—	$	—	$	—
Owner-occupied commercial real estate	—		—		1,028		1,028		—
Acquisition, construction & development	—		—		—		—		—
Commercial & industrial	—		—		—		—		—
Single family residential (1-4 units)	—		—		2,631		2,631		—
Consumer non-real estate and other	—		—		—		—		—
Total	$	—	$	—	$	3,659	$	3,659	$	—

On January 1, 2023, the Company adopted ASU 2022-02 on a modified retrospective basis. ASU 2022-02 eliminates the TDR accounting model and requires that the Company evaluate, based on the accounting for loan modifications, whether the borrower is experiencing financial difficulty, and the modification results in a more-than-insignificant direct change in the contractual cash flows and represents a new loan or a continuation of an existing loan. This change required all loan modifications to be accounted for under the general loan modification guidance in ASC 310-20, Receivables — Nonrefundable Fees and Other Costs, and subjects entities to new disclosure requirements on loan modifications to borrowers experiencing financial difficulty. Upon adoption of CECL, the Company loans classified as TDRs were individually evaluated for the ACL, and the measurement was done either using the collateral-dependent or the discounted cash flow method.

The Company may modify loans to borrowers experiencing financial difficulty by providing principal forgiveness, term extension, interest rate reduction, or an other-than-insignificant payment delay. When principal forgiveness is provided, the amount of forgiveness is charged off against the ACL. The Company may also provide multiple types of modifications on an individual loan. For the three and nine months ended September 30, 2023, the Company did not extend any

modifications to borrowers experiencing financial difficulty that had a more-than-insignificant direct change in the contractual cash flows of the loan.

The Company did not extend any modifications that were defined as TDRs during the year ended December 31, 2022.

Allowance for Credit Losses - Collateral Dependent Loans Individually Evaluated (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost, With Allowance		$ 2,735
Related Allowance		239
Amortized Cost, With No Related Allowance		6,335
Commercial real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost, With Allowance		331
Related Allowance		41
Amortized Cost, With No Related Allowance		0
Owner-occupied commercial real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost, With Allowance		1,397
Related Allowance		102
Amortized Cost, With No Related Allowance		1,184
Acquisition, construction & development
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost, With Allowance		0
Related Allowance		0
Amortized Cost, With No Related Allowance		0
Commercial & industrial
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost, With Allowance		0
Related Allowance		0
Amortized Cost, With No Related Allowance		0
Single family residential (1-4 units)
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost, With Allowance		1,007
Related Allowance		96
Amortized Cost, With No Related Allowance		5,151
Consumer non-real estate and other
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost, With Allowance		0
Related Allowance		0
Amortized Cost, With No Related Allowance		$ 0
Collateral-Dependent Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost, With Allowance	$ 0
Related Allowance	0
Amortized Cost, With No Related Allowance	3,659
Amortized Cost	3,659
Collateral-Dependent Loans \| Commercial real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost, With Allowance	0
Related Allowance	0
Amortized Cost, With No Related Allowance	0
Amortized Cost	0
Collateral-Dependent Loans \| Owner-occupied commercial real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost, With Allowance	0
Related Allowance	0
Amortized Cost, With No Related Allowance	1,028
Amortized Cost	1,028
Collateral-Dependent Loans \| Acquisition, construction & development
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost, With Allowance	0
Related Allowance	0
Amortized Cost, With No Related Allowance	0
Amortized Cost	0
Collateral-Dependent Loans \| Commercial & industrial
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost, With Allowance	0
Related Allowance	0
Amortized Cost, With No Related Allowance	0
Amortized Cost	0
Collateral-Dependent Loans \| Single family residential (1-4 units)
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost, With Allowance	0
Related Allowance	0
Amortized Cost, With No Related Allowance	2,631
Amortized Cost	2,631
Collateral-Dependent Loans \| Consumer non-real estate and other
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost, With Allowance	0
Related Allowance	0
Amortized Cost, With No Related Allowance	0
Amortized Cost	$ 0

Nature of Business Activities and Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Nature of Business Activities and Significant Accounting Policies

Nature of operations

Burke & Herbert Financial Services Corp. (“Burke & Herbert”) was organized as a Virginia corporation on September 14, 2022, to serve as the holding company for Burke & Herbert Bank & Trust Company (“the Bank”), together referred to as the “Company”. The Company commenced operations as a bank holding company on October 1, 2022, following a reorganization transaction in which it became the Bank’s holding company. This transaction was treated as an internal reorganization as all shareholders of the Bank became shareholders of the Company. In September 2023, the Company elected to be a financial holding company. As a financial holding company, the Company is subject to regulation and supervision by the Federal Reserve. The Company has no material operations and owns 100% of the Bank. The Bank is a Virginia chartered commercial bank that commenced operations in 1852. The Bank is supervised and regulated by the Federal Deposit Insurance Corporation (the “FDIC”) and the Bureau of Financial Institutions of the Virginia State Corporation Commission (the “Virginia BFI”).

The Bank’s primary market area includes northern Virginia, and it has 23 branches throughout the Northern Virginia region and commercial loan offices in Fredericksburg, Loudoun County, and Richmond, Virginia, and in Bethesda, Maryland. The Company’s branch locations accept business and consumer deposits from a diverse customer base. The Company’s deposit products include checking, savings, and term certificate accounts. The Company’s loan portfolio includes commercial and consumer loans, a substantial portion of which are secured by real estate.

Pending Merger with Summit Financial Group, Inc.

On August 24, 2023, the Company and Summit Financial Group, Inc. (“Summit”), entered into an Agreement and Plan of Reorganization and Plan of Merger pursuant to which Summit will merge with and into Burke & Herbert, with Burke & Herbert as the continuing corporation (the “merger”). Immediately following the merger, Summit Community Bank, Inc., a West Virginia banking corporation (“SCB”) and a wholly-owned direct subsidiary of Summit, will merge with and into Burke & Herbert Bank & Trust Company, a Virginia banking corporation and a wholly-owned direct subsidiary of Burke & Herbert, with the Bank as the continuing bank (the “bank merger,” and together with the merger, the “mergers”). In the merger, Summit shareholders will receive 0.5043 shares of Burke & Herbert common stock for each share of Summit common stock they own (the “exchange ratio”), subject to the payment of cash in lieu of fractional shares. In addition, each share of Summit series 2021 preferred stock issued and outstanding immediately prior to the effective time of the merger will be converted into the right to receive one share of a newly created series of Burke & Herbert preferred stock having rights, preferences, privileges and voting powers and limitations and restrictions thereof that are not materially less or more favorable to the holders of the Summit series 2021 preferred stock. Completion of the mergers is subject to receipt of the requisite approvals of the Company’s and Summit’s stockholders, receipt of all required regulatory approvals, and fulfillment of other customary closing conditions.

Basis of Presentation

The accompanying consolidated financial statements include Burke & Herbert Financial Services Corp. and its wholly owned subsidiary Burke & Herbert Bank & Trust Company and have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial reporting and with applicable quarterly reporting regulations of the U.S. Securities and Exchange Commission (“SEC”). The accounting and reporting policies of the Company conform to GAAP and reflect practices of the banking industry. They do not include all of the information and notes required by GAAP for complete financial statements. As such, these unaudited financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ending December 31, 2022, included in the Company’s Registration Statement on Form 10 filed with the SEC on February 28, 2023, as amended on April 4, 2023, April 20, 2023, and April 21, 2023, and as declared as effective by the SEC on April 21, 2023.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions between the Company and the Bank have been eliminated. In preparing financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the

reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the results of operations in these financial statements, have been made. The results of operations for the three and nine months ended September 30, 2023, are not necessarily indicative of the results to be expected for any other interim period or for the full year. All amounts and disclosures included in this quarterly report as of December 31, 2022, were derived from the Company’s audited consolidated financial statements. Certain items in the prior period have been reclassified to conform to the current presentation. These reclassifications had no effect on prior year net income or on shareholders’ equity.

Adoption of new accounting standards

Derivatives and Hedging

On March 28, 2022, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method. The purpose of this updated guidance is to further align risk management objectives with hedge accounting results on the application of the last-of-layer method, which was first introduced in ASU 2017-02, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2022-01 is effective for public business entities for fiscal years beginning after December 15, 2022. ASU 2022-01 requires a modified retrospective transition method for basis adjustments in which the entity will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the statement of financial position as of the date of adoption. The Company adopted this ASU on January 1, 2023; therefore, there was no impact to the consolidated financial statements.

Allowance for Credit Losses

On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”), as amended, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The CECL methodology requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, as well as future forecasts including reasonable and supportable forecasts and other forecast periods. CECL generally applies to financial assets measured at amortized cost and some off-balance sheet credit exposures, such as unfunded commitments to extend credit. Financial assets measured at amortized cost are presented as the net amount expected to be collected.

In addition, CECL made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities if management does not intend to sell and does not believe that it is more likely than not, they will be required to sell.

The Company adopted ASC 326 and all related subsequent amendments thereto effective January 1, 2023, using the modified retrospective approach for all financial assets measured at amortized cost and off-balance sheet credit exposures. The adoption of the new CECL standard resulted in a cumulative-effect adjustment that increased the allowance for credit losses for loans by $4.1 million and increased the allowance for unfunded commitments by $274.8 thousand. Retained earnings, net of deferred taxes, decreased by $3.4 million. Results for reporting periods beginning after January 1, 2023,

are presented under ASU 2016-13, while prior period amounts continue to be reported in accordance with the incurred loss model under the previously applicable GAAP.

The following table illustrates the impact of the adoption of CECL, and the transition away from the incurred loss method, on January 1, 2023. The impact to the allowance for credit losses (“ACL”) is presented at the loan segment level (in thousands):


	January 1, 2023
	Reserves under Incurred Loss Model		Reserves under CECL Model		Impact of CECL Adoption
Financial Assets:
Commercial real estate	$	15,477	$	18,163	$	2,686
Owner-occupied commercial real estate	635		629		(6)
Acquisition, construction & development	2,082		1,442		(640)
Commercial & industrial	438		675		237
Single family residential (1-4 units)	2,379		4,040		1,661
Consumer non-real estate and other	28		215		187
Unallocated reserve	—		—		—
Allowance for credit losses on loans	$	21,039	$	25,164	$	4,125
Financial Liabilities:
Allowance for credit losses on off-balance sheet credit exposure	$	—	$	275	$	275

The Company adopted ASC 326 using the prospective transition approach for debt securities for which other-than-temporary impairment had been recognized prior to January 1, 2023. As of December 31, 2022, the Company did not have any other-than-temporarily impaired investment securities. The Company did not record an ACL for securities upon adoption.

The Company elected not to measure an ACL for accrued interest receivable and instead elected to reverse interest income on loans or securities that are placed on non-accrual status, which generally occurs when the instrument is 90 days past due, or earlier if the Company believes the collection of interest is doubtful. The Company has concluded that this policy results in the timely reversal of uncollectible interest.

On January 1, 2023, the Company adopted ASU 2022-02, Financial Instruments - Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 addresses areas identified by the FASB as part of its implementation review of the credit losses standard (ASU 2016-13) that introduced the CECL model. The amendments eliminate the accounting guidance for troubled debt restructurings (“TDRs”) by creditors that have adopted the CECL model and enhance the disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. In addition, the amendments require that the Company disclose current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. The Company adopted the standard prospectively, and it did not have a material impact on the financial statements.

Allowance for credit losses - available-for-sale debt securities

Management evaluates all available-for-sale (“AFS”) debt securities in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. The Company first assesses whether it intends to sell or if 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 AFS debt securities that do not meet the aforementioned criteria, the Company 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 ACL is recognized in other comprehensive income.

Changes in the ACL are recorded as credit loss expense (or recapture). Losses are charged against the allowance when management believes the uncollectability of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met. At September 30, 2023, there was no ACL related to the AFS security portfolio. Refer to Note 2 - Securities in Notes to the Consolidated Financial Statements.

Allowance for credit losses - loans

The ACL represents an amount, which, in management’s judgment, reflects expected credit losses in the loan portfolio at the balance sheet date. The estimate for expected credit losses is based on the evaluation of the size and current risk characteristics of the loan portfolio, past events, current conditions, reasonable and supportable forecasts of future economic conditions, and prepayment experience as related to credit contractual term information. The ACL is measured and recorded upon the initial recognition of a financial asset. The ACL is reduced by charge-offs, net of recoveries of previous losses, and is increased or decreased by a provision for (or recapture of) credit losses, which is recorded in the Consolidated Statements of Income.

The ACL for expected credit losses is determined based on a quantitative assessment of two categories of loans: collectively evaluated loans and individually evaluated loans. In addition, the ACL also includes a qualitative component which adjusts the CECL model for risk factors that are not considered within the CECL model, but are relevant in assessing the expected credit losses within the loan portfolio.

The Company is using a remaining useful life or weighted average remaining maturity (“WARM”) methodology to estimate its current expected credit losses. For purposes of calculating reserves in collectively evaluated loans, the ACL calculation segments the Company’s loan portfolio using federal call codes to group loans which share similar risk characteristics. In order to generate reasonable and supportable forecasts of loss rates over a two-year period, the ACL calculation utilizes macroeconomic variable loss drivers, which may include aggregate macroeconomic indicators pertaining to such items as equity market conditions or interest rates, as well as other variables that are portfolio-specific, such as those that pertain to the commercial real estate or residential loan portfolios. A straight-line reversion technique is used for the following four quarters, and in following quarters, the ACL calculation reverts to historical average loss rates.

Based on management’s analysis, adjustments may be applied for additional factors impacting the risk of loss in the loan portfolio beyond information used to calculate reasonable and supportable, reversion and post-reversion period forecasts on collectively evaluated loans. As the reasonable and supportable and reversion period forecasts reflect the use of the macroeconomic variable loss drivers, management may consider that an additional or reduced reserve is warranted through qualitative risk factors based on current and expected conditions, including those that utilize supplemental information relative to the macroeconomic variable loss drivers. Qualitative risk factors considered by management include the following:

•Nature and volume of loans;

•Concentrations of credit;

•Delinquency trends;

•Experience, ability, and depth of management and lending staff; and

•Quality of loan review system.

Loans that do not share similar risk characteristics are evaluated on an individual basis and are excluded from the collective evaluation for the ACL. Loans identified to be individually evaluated under CECL include loans on non-accrual status and may include accruing loans that do not share similar risk characteristics to other accruing loans collectively evaluated. A specific reserve analysis is applied to the individually evaluated loans, which considers collateral value, an observable

market price, or the present value of the expected future cash flows. A specific reserve may be assigned if the measured value of the loan using one of the before mentioned methods is less than the current carrying value of the loan.

Under CECL, for collateral-dependent loans, the Company has adopted the practical expedient to measure the ACL based on the fair value of the collateral. A loan is considered collateral-dependent when the Company determines foreclosure is probable or the borrower is experiencing financial difficulty and the Company expects repayment to be provided substantially through the operation or sale of the collateral. Collateral could be in the form of real estate, equipment, or business assets. An ACL may result for a collateral-dependent loan if the fair value of the underlying collateral, as of the reporting date, adjusted for expected costs to repair or sell, was less than the amortized cost basis of the loan. If repayment of the loan is instead dependent only on the operation, rather than the sale of the collateral, the measure of the ACL does not incorporate estimated costs to sell. For loans analyzed on the basis of projected future principal and interest cash flows, the Company will discount the expected cash flows at the effective interest rate of the loan, and an ACL would result if the present value of the expected cash flows was less than the amortized cost basis of the loan. When the discounted cash flow method is used to determine the ACL, management does not adjust the effective interest rate used to discount cash flows to incorporate expected prepayments.

Allowance for credit losses on off-balance sheet credit exposures

On a quarterly basis, the Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The ACL on off-balance sheet credit exposures is adjusted through the provision for credit losses on the Consolidated Statements of Income. 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 by loan segment at each balance sheet date under the CECL model using the same methodology as the loan portfolio. The ACL for unfunded commitments is included in accrued interest and other liabilities on the Company’s Consolidated Balance Sheets.

Accrued Interest Receivable

The Company has elected to exclude accrued interest from the amortized cost basis in its determination of the ACL and elected the policy to write-off accrued interest receivable directly through the reversal of interest income. Accrued interest receivable totaled $8.3 million on loans and totaled $7.6 million on AFS securities at September 30, 2023, and is included in accrued interest receivable on the Company’s Consolidated Balance Sheets.

Other Operating Expense (Tables)

9 Months Ended

Sep. 30, 2023

Other Income and Expenses [Abstract]

Schedule of Other Operating Cost and Expense, by Component

Other operating expense from the Consolidated Statements of Income for the three and nine months ended September 30, 2023, and September 30, 2022, is as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
FDIC assessment	$	463	$	294	$	1,496	$	974
Historic tax credit amortization	632		632		1,895		1,895
IT related	532		562		1,489		1,478
Consultant fees	1,322		216		2,300		726
Network expense	474		456		1,386		1,268
Directors' fees	556		453		1,400		1,490
Audit expense	167		244		687		511
Legal expense	920		(3)		1,553		584
Virginia franchise tax	671		637		1,931		1,837
Marketing expense	116		230		454		864
Other	1,564		1,435		4,451		4,059
Total	$	7,417	$	5,156	$	19,042	$	15,686

Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Unrealized gain (loss) arising during period, tax expense (benefit)	$ 5,392	$ 11,375	$ 2,212	$ 40,638
Reclassification adjustment for loss (gain) on securities, tax	0	(9)	(23)	13
Reclassification adjustment for loss (gain) on a fair value hedge, tax	9	0	(224)	0
Unrealized holding gain (loss) on cash flow hedge, tax	10	174	71	404
Reclassification adjustment for losses (gains) included in net income, tax	$ (99)	$ (15)	$ (264)	$ 23

Leased Property - Lease, Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Finance lease cost
Right-of-use asset amortization	$ 71	$ 51	$ 173	$ 153
Interest expense	28	16	58	48
Operating lease cost	770	638	2,437	1,833
Total lease cost	$ 869	$ 705	$ 2,668	$ 2,034

Allowance for Credit Losses - Loans by Credit Quality Indicators (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Financing Receivable, Allowance for Credit Loss [Line Items]
Total	$ 2,070,616		$ 2,070,616		$ 1,887,221
Year to date gross charge-offs
Total	13	$ 54	134	$ 3,411
Pass
Financing Receivable, Allowance for Credit Loss [Line Items]
Total					1,752,599
Special Mention
Financing Receivable, Allowance for Credit Loss [Line Items]
Total					65,761
Substandard
Financing Receivable, Allowance for Credit Loss [Line Items]
Total					68,861
Doubtful
Financing Receivable, Allowance for Credit Loss [Line Items]
Total					0
Loss
Financing Receivable, Allowance for Credit Loss [Line Items]
Total					0
Commercial real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	156,332		156,332
2022	283,759		283,759
2021	215,239		215,239
2020	23,638		23,638
2019	83,063		83,063
Prior	463,648		463,648
Revolving Loans	34,974		34,974
Total	1,260,653		1,260,653		1,109,315
Year to date gross charge-offs
2023			0
2022			0
2021			0
2020			0
2019			0
Prior			0
Revolving Loans			0
Total	0	0	0	3,282
Commercial real estate \| Pass
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	156,332		156,332
2022	256,044		256,044
2021	166,943		166,943
2020	23,638		23,638
2019	70,916		70,916
Prior	412,169		412,169
Revolving Loans	34,974		34,974
Total	1,121,016		1,121,016		1,011,025
Commercial real estate \| Special Mention
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	12,235		12,235
2021	35,449		35,449
2020	0		0
2019	10,431		10,431
Prior	1,830		1,830
Revolving Loans	0		0
Total	59,945		59,945		62,907
Commercial real estate \| Substandard
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	15,480		15,480
2021	12,847		12,847
2020	0		0
2019	1,716		1,716
Prior	49,649		49,649
Revolving Loans	0		0
Total	79,692		79,692		35,383
Commercial real estate \| Doubtful
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	0		0
Revolving Loans	0		0
Total	0		0		0
Commercial real estate \| Loss
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	0		0
Revolving Loans	0		0
Total	0		0		0
Owner-occupied commercial real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	4,688		4,688
2022	29,553		29,553
2021	9,516		9,516
2020	14,340		14,340
2019	12,848		12,848
Prior	47,966		47,966
Revolving Loans	4,585		4,585
Total	123,496		123,496		127,114
Year to date gross charge-offs
2023			0
2022			0
2021			0
2020			0
2019			0
Prior			0
Revolving Loans			0
Total	0	0	0	0
Owner-occupied commercial real estate \| Pass
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	4,688		4,688
2022	29,017		29,017
2021	9,516		9,516
2020	14,340		14,340
2019	12,848		12,848
Prior	43,182		43,182
Revolving Loans	4,585		4,585
Total	118,176		118,176		121,621
Owner-occupied commercial real estate \| Special Mention
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	331		331
Revolving Loans	0		0
Total	331		331		1,963
Owner-occupied commercial real estate \| Substandard
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	536		536
2021	0		0
2020	0		0
2019	0		0
Prior	4,453		4,453
Revolving Loans	0		0
Total	4,989		4,989		3,530
Owner-occupied commercial real estate \| Doubtful
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	0		0
Revolving Loans	0		0
Total	0		0		0
Owner-occupied commercial real estate \| Loss
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	0		0
Revolving Loans	0		0
Total	0		0		0
Acquisition, construction & development
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	4,871		4,871
2022	27,645		27,645
2021	15,510		15,510
2020	0		0
2019	760		760
Prior	46,044		46,044
Revolving Loans	1,705		1,705
Total	96,535		96,535		94,450
Year to date gross charge-offs
2023			0
2022			0
2021			0
2020			0
2019			0
Prior			0
Revolving Loans			0
Total	0	0	0	0
Acquisition, construction & development \| Pass
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	4,871		4,871
2022	27,645		27,645
2021	15,510		15,510
2020	0		0
2019	760		760
Prior	23,951		23,951
Revolving Loans	1,705		1,705
Total	74,442		74,442		68,220
Acquisition, construction & development \| Special Mention
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	0		0
Revolving Loans	0		0
Total	0		0		836
Acquisition, construction & development \| Substandard
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	22,093		22,093
Revolving Loans	0		0
Total	22,093		22,093		25,394
Acquisition, construction & development \| Doubtful
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	0		0
Revolving Loans	0		0
Total	0		0		0
Acquisition, construction & development \| Loss
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	0		0
Revolving Loans	0		0
Total	0		0		0
Commercial & industrial
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	23,329		23,329
2022	16,379		16,379
2021	5,958		5,958
2020	466		466
2019	24		24
Prior	1,467		1,467
Revolving Loans	13,948		13,948
Total	61,571		61,571		53,514
Year to date gross charge-offs
2023			0
2022			0
2021			0
2020			29
2019			0
Prior			0
Revolving Loans			0
Total	0	0	29	20
Commercial & industrial \| Pass
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	23,329		23,329
2022	16,379		16,379
2021	5,068		5,068
2020	466		466
2019	24		24
Prior	1,467		1,467
Revolving Loans	13,948		13,948
Total	60,681		60,681		53,273
Commercial & industrial \| Special Mention
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	890		890
2020	0		0
2019	0		0
Prior	0		0
Revolving Loans	0		0
Total	890		890		0
Commercial & industrial \| Substandard
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	0		0
Revolving Loans	0		0
Total	0		0		241
Commercial & industrial \| Doubtful
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	0		0
Revolving Loans	0		0
Total	0		0		0
Commercial & industrial \| Loss
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	0		0
Revolving Loans	0		0
Total	0		0		0
Single family residential (1-4 units)
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	69,336		69,336
2022	123,047		123,047
2021	61,039		61,039
2020	32,654		32,654
2019	41,256		41,256
Prior	144,275		144,275
Revolving Loans	53,951		53,951
Total	525,558		525,558		499,362
Year to date gross charge-offs
2023			0
2022			0
2021			0
2020			0
2019			0
Prior			0
Revolving Loans			0
Total	0	0	0	0
Single family residential (1-4 units) \| Pass
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	69,336		69,336
2022	123,047		123,047
2021	60,748		60,748
2020	32,408		32,408
2019	41,256		41,256
Prior	142,985		142,985
Revolving Loans	53,951		53,951
Total	523,731		523,731		494,994
Single family residential (1-4 units) \| Special Mention
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	0		0
Revolving Loans	0		0
Total	0		0		55
Single family residential (1-4 units) \| Substandard
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	291		291
2020	246		246
2019	0		0
Prior	1,290		1,290
Revolving Loans	0		0
Total	1,827		1,827		4,313
Single family residential (1-4 units) \| Doubtful
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	0		0
Revolving Loans	0		0
Total	0		0		0
Single family residential (1-4 units) \| Loss
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	0		0
Revolving Loans	0		0
Total	0		0		0
Consumer non-real estate and other
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	425		425
2022	247		247
2021	145		145
2020	190		190
2019	411		411
Prior	337		337
Revolving Loans	1,048		1,048
Total	2,803		2,803		3,466
Year to date gross charge-offs
2023			105
2022			0
2021			0
2020			0
2019			0
Prior			0
Revolving Loans			0
Total	13	$ 54	105	$ 109
Consumer non-real estate and other \| Pass
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	425		425
2022	247		247
2021	145		145
2020	190		190
2019	411		411
Prior	337		337
Revolving Loans	1,048		1,048
Total	2,803		2,803		3,466
Consumer non-real estate and other \| Special Mention
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	0		0
Revolving Loans	0		0
Total	0		0		0
Consumer non-real estate and other \| Substandard
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	0		0
Revolving Loans	0		0
Total	0		0		0
Consumer non-real estate and other \| Doubtful
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	0		0
Revolving Loans	0		0
Total	0		0		0
Consumer non-real estate and other \| Loss
Financing Receivable, Allowance for Credit Loss [Line Items]
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	0		0
Revolving Loans	0		0
Total	$ 0		$ 0		$ 0

Loans

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Loans

LoansThe Company’s loan portfolio segments, as reported in the tables below, include (i) commercial real estate (ii) owner-occupied commercial real estate (iii) acquisition, construction & development (iv) commercial & industrial (v) single family residential (1-4 units) and (vi) consumer non-real estate and other. The risks associated with lending activities differ

among the various loan segments and are subject to the impact of changes in interest rates, market conditions of collateral securing the loans, and general economic conditions.

•Commercial real estate loans carry risk associated with either the net operating income generated from the lease of the real estate collateral or income generated from the sale of the collateral. Other risk factors include the credit-worthiness of the sponsor and the value of the collateral.

•Owner-occupied commercial real estate loans carry risk associated with the operations of the business that occupies the property and the value of the collateral.

•Acquisition, construction & development loans carry risk associated with the credit-worthiness of the borrower, project completion within budget, sale after completion, and the value of the collateral.

•Commercial & industrial loans carry the risk associated with the operations of the business and the value of the collateral, if any.

•Single family residential (1-4 units) loans for consumer purposes carry risk associated with the continued credit-worthiness of the borrower and the value of the collateral. Single family residential (1-4 units) loans for investment purpose carry risk associated with the continued credit-worthiness of the borrower, the value of the collateral, and either the net operating income generated from the lease of the real estate collateral or income generated from the sale of the collateral.

•Consumer non-real estate and other loans carry risk associated with the credit-worthiness of the borrower and the value of the collateral, if any.

Loan balances at September 30, 2023, and December 31, 2022, by portfolio segment were as follows (in thousands):


	September 30, 2023		December 31, 2022
Commercial real estate	$	1,260,653	$	1,109,315
Owner-occupied commercial real estate	123,496		127,114
Acquisition, construction & development	96,535		94,450
Commercial & industrial	61,571		53,514
Single family residential (1-4 units)	525,558		499,362
Consumer non-real estate and other	2,803		3,466
Loans, gross	2,070,616		1,887,221
Allowance for credit losses	(26,111)		(21,039)
Loans, net	$	2,044,505	$	1,866,182

Net deferred loan fees included in the above loan categories totaled $3.5 million and $3.3 million at September 30, 2023, and December 31, 2022, respectively. The Company holds $3.8 million and $7.9 million in Paycheck Protection Program loans, net of deferred fees and costs as of September 30, 2023, and December 31, 2022, respectively.

Deposits

9 Months Ended

Sep. 30, 2023

Financial Services, Banking and Thrift [Abstract]

Deposits

The aggregate amount of time deposits, each with a minimum denomination of $250,000, was approximately $65.5 million and $32.6 million on September 30, 2023, and December 31, 2022, respectively. Brokered time deposits totaled $389.0 million and $100.3 million as of September 30, 2023, and December 31, 2022, respectively. Time deposits through the Certificate of Deposit Account Registry Service program totaled $21.8 million at September 30, 2023, compared to $11.7 million at December 31, 2022.

At September 30, 2023, the scheduled maturities of time deposits for the remaining three months ending December 31, 2023 and the following five years were as follows (in thousands):


As of September 30, 2023
Remaining three months ending, December 31, 2023	$	59,683
2024	269,103
2025	135,389
2026	83,185
2027	49,432
2028	78,046
Total	$	674,838

At September 30, 2023, and December 31, 2022, amounts included in time deposits for individual retirement accounts totaled $30.9 million and $36.9 million, respectively.

Overdrafts of $197 thousand and $503 thousand were reclassified to loans as of September 30, 2023, and the year ended December 31, 2022, respectively.

Regulatory Capital Matters - Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations (Details) $ in Thousands	Sep. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Consolidated
Total Capital to risk weighted assets
Actual Amount	$ 443,293	$ 433,958
Actual Ratio	0.1748	0.1888
Minimum Required for Capital Adequacy Purposes (includes applicable capital conservation buffer) Amount	$ 266,306	$ 241,325
Minimum Required for Capital Adequacy Purposes (includes applicable capital conservation buffer) Ratio	0.105	0.105
To Be Well Capitalized Under Prompt Corrective Action Regulations Amount	$ 253,625	$ 229,834
To Be Well Capitalized Under Prompt Corrective Action Regulations Ratio	0.100	0.100
Tier 1 (Core) Capital to risk weighted assets
Actual Amount	$ 416,977	$ 412,946
Actual Ratio	0.1644	0.1797
Minimum Required for Capital Adequacy Purposes (includes applicable capital conservation buffer) Amount	$ 215,581	$ 195,358
Minimum Required for Capital Adequacy Purposes (includes applicable capital conservation buffer) Ratio	0.085	0.085
To Be Well Capitalized Under Prompt Corrective Action Regulations Amount	$ 202,900	$ 186,867
To Be Well Capitalized Under Prompt Corrective Action Regulations Ratio	0.080	0.080
Common Tier 1 (CET 1) to risk-weighted assets
Actual Amount	$ 416,977	$ 412,946
Actual Ratio	0.1644	0.1797
Minimum Required for Capital Adequacy Purposes (includes applicable capital conservation buffer) Amount	$ 177,537	$ 160,883
Minimum Required for Capital Adequacy Purposes (includes applicable capital conservation buffer) Ratio	0.070	0.070
To Be Well Capitalized Under Prompt Corrective Action Regulations Amount	$ 164,856	$ 149,392
To Be Well Capitalized Under Prompt Corrective Action Regulations Ratio	0.065	0.065
Tier 1 (Core) Capital to average assets
Actual Amount	$ 416,977	$ 412,946
Actual Ratio	0.1132	0.1134
Minimum Required for Capital Adequacy Purposes (includes applicable capital conservation buffer) Amount	$ 147,333	$ 145,605
Minimum Required for Capital Adequacy Purposes (includes applicable capital conservation buffer) Ratio	0.040	0.040
To Be Well Capitalized Under Prompt Corrective Action Regulations Amount	$ 184,166	$ 182,007
To Be Well Capitalized Under Prompt Corrective Action Regulations Ratio	0.050	0.050
Burke & Herbert Bank & Trust
Total Capital to risk weighted assets
Actual Amount	$ 441,597	$ 432,290
Actual Ratio	0.1739	0.1881
Minimum Required for Capital Adequacy Purposes (includes applicable capital conservation buffer) Amount	$ 266,587	$ 241,368
Minimum Required for Capital Adequacy Purposes (includes applicable capital conservation buffer) Ratio	0.105	0.105
To Be Well Capitalized Under Prompt Corrective Action Regulations Amount	$ 253,893	$ 229,874
To Be Well Capitalized Under Prompt Corrective Action Regulations Ratio	0.100	0.100
Tier 1 (Core) Capital to risk weighted assets
Actual Amount	$ 415,281	$ 411,251
Actual Ratio	0.1636	0.1789
Minimum Required for Capital Adequacy Purposes (includes applicable capital conservation buffer) Amount	$ 215,809	$ 195,393
Minimum Required for Capital Adequacy Purposes (includes applicable capital conservation buffer) Ratio	0.085	0.085
To Be Well Capitalized Under Prompt Corrective Action Regulations Amount	$ 203,114	$ 183,900
To Be Well Capitalized Under Prompt Corrective Action Regulations Ratio	0.080	0.080
Common Tier 1 (CET 1) to risk-weighted assets
Actual Amount	$ 415,281	$ 411,251
Actual Ratio	0.1636	0.1789
Minimum Required for Capital Adequacy Purposes (includes applicable capital conservation buffer) Amount	$ 177,725	$ 160,912
Minimum Required for Capital Adequacy Purposes (includes applicable capital conservation buffer) Ratio	0.070	0.070
To Be Well Capitalized Under Prompt Corrective Action Regulations Amount	$ 165,030	$ 149,418
To Be Well Capitalized Under Prompt Corrective Action Regulations Ratio	0.065	0.065
Tier 1 (Core) Capital to average assets
Actual Amount	$ 415,281	$ 411,251
Actual Ratio	0.1127	0.1130
Minimum Required for Capital Adequacy Purposes (includes applicable capital conservation buffer) Amount	$ 147,417	$ 145,605
Minimum Required for Capital Adequacy Purposes (includes applicable capital conservation buffer) Ratio	0.040	0.040
To Be Well Capitalized Under Prompt Corrective Action Regulations Amount	$ 184,271	$ 182,007
To Be Well Capitalized Under Prompt Corrective Action Regulations Ratio	0.050	0.050

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value per share (in dollars per share)	$ 1.00	$ 1.00
Preferred stock, authorized (in shares)	2,000,000	2,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common stock, par value per share (in dollars per share)	$ 0.50	$ 0.50
Common stock, authorized (in shares)	20,000,000	20,000,000
Common stock, issued (in shares)	8,000,000	8,000,000
Common stock, outstanding (in shares)	7,428,710	7,425,760
Treasury stock, shares (in shares)	571,290	574,240

Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2023

Credit Loss [Abstract]

Financing Receivable, Allowance for Credit Loss


	Commercial real estate		Owner-occupied commercial real estate		Acquisition, construction & development		Commercial & industrial		Single family residential (1-4 units)		Consumer non-real estate and other		Unallocated		Total
Three months ended
September 30, 2023
Balance, beginning of period	$	18,639	$	719	$	1,319	$	612	$	4,520	$	110	$	—	$	25,919
Provision for (recapture of) credit losses	969		66		446		(95)		(1,135)		(51)		—		200
Charge-offs	—		—		—		—		—		(13)		—		(13)
Recoveries	4		—		—		—		1		—		—		5
Balance, end of period	$	19,612	$	785	$	1,765	$	517	$	3,386	$	46	$	—	$	26,111

September 30, 2022
Balance, beginning of period	$	15,548	$	724	$	3,607	$	214	$	1,519	$	19	$	1,731	$	23,362
Provision for (recapture of) loan losses	(1,782)		(111)		830		82		264		60		(1,731)		(2,388)
Charge-offs	—		—		—		—		—		(54)		—		(54)
Recoveries	27		—		—		—		2		4		—		33
Balance, end of period	$	13,793	$	613	$	4,437	$	296	$	1,785	$	29	$	—	$	20,953


	Commercial real estate		Owner-occupied commercial real estate		Acquisition, construction & development		Commercial & industrial		Single family residential (1-4 units)		Consumer non-real estate and other		Unallocated		Total
Nine months ended
September 30, 2023
Beginning balance, prior to adoption of CECL	$	15,477	$	635	$	2,082	$	438	$	2,379	$	28	$	—	$	21,039
Impact of the adoption of CECL	2,686		(6)		(640)		237		1,661		187		—		4,125
Provision for (recapture of) credit losses	1,414		156		323		(129)		(661)		(70)		—		1,033
Charge-offs	—		—		—		(29)		—		(105)		—		(134)
Recoveries	35		—		—		—		7		6		—		48
Balance, end of period	$	19,612	$	785	$	1,765	$	517	$	3,386	$	46	$	—	$	26,111

September 30, 2022
Balance, beginning of period	$	25,112	$	611	$	2,189	$	165	$	2,434	$	18	$	1,180	$	31,709
Provision for (recapture of) loan losses	(8,071)		2		2,248		151		(815)		101		(1,180)		(7,564)
Charge-offs	(3,282)		—		—		(20)		—		(109)		—		(3,411)
Recoveries	34		—		—		—		166		19		—		219
Balance, end of period	$	13,793	$	613	$	4,437	$	296	$	1,785	$	29	$	—	$	20,953

Impaired Financing Receivables


	Commercial real estate		Owner-occupied commercial real estate		Acquisition, construction & development		Commercial & industrial		Single family residential (1-4 units)		Consumer non-real estate and other		Unallocated		Total
December 31, 2022
Allowance for loan losses
Individually evaluated for impairment	$	41	$	102	$	—	$	—	$	96	$	—	$	—	$	239
Collectively evaluated for impairment	15,436		533		2,082		438		2,283		28		—		20,800
Total ending allowance balance	$	15,477	$	635	$	2,082	$	438	$	2,379	$	28	$	—	$	21,039

Loan balance:
Individually evaluated for impairment	$	331	$	2,580	$	—	$	—	$	6,158	$	—	$	—	$	9,069
Collectively evaluated for impairment	1,108,984		124,534		94,450		53,514		493,204		3,466		—		1,878,152
Total ending loan balance	$	1,109,315	$	127,114	$	94,450	$	53,514	$	499,362	$	3,466	$	—	$	1,887,221

The following table presents information related to impaired loans (in thousands) by portfolio segment as of December 31, 2022:


	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized (1)
December 31, 2022
With no related allowance recorded:
Commercial real estate	$	—	$	—	$	—	$	—	$	—
Owner-occupied commercial real estate	1,184		1,394		—		1,291		97
Acquisition, construction & development	—		—		—		—		—
Commercial & industrial	—		—		—		—		—
Single family residential (1-4 units)	5,151		5,576		—		5,131		213
Consumer non-real estate and other	—		—		—		—		—
Subtotal	$	6,335	$	6,970	$	—	$	6,422	$	310

With an allowance recorded:
Commercial real estate	$	331	$	331	$	41	$	350	$	23
Owner-occupied commercial real estate	1,397		1,397		102		1,420		74
Acquisition, construction & development	—		—		—		—		—
Commercial & industrial	—		—		—		—		—
Single family residential (1-4 units)	1,007		1,141		96		1,033		57
Consumer non-real estate and other	—		—		—		—		—
Subtotal	$	2,735	$	2,869	$	239	$	2,803	$	154

(1)Cash basis interest income recognized approximates interest income recognized shown as of the twelve months ended December 31, 2022.

The following tables present information about collateral-dependent loans that were individually evaluated for purposes of determining the ACL as of September 30, 2023 (in thousands):


	Collateral-Dependent Loans
	With Allowance				With No Related Allowance		Total
	Amortized Cost		Related Allowance		Amortized Cost		Amortized Cost		Related Allowance
September 30, 2023
Commercial real estate	$	—	$	—	$	—	$	—	$	—
Owner-occupied commercial real estate	—		—		1,028		1,028		—
Acquisition, construction & development	—		—		—		—		—
Commercial & industrial	—		—		—		—		—
Single family residential (1-4 units)	—		—		2,631		2,631		—
Consumer non-real estate and other	—		—		—		—		—
Total	$	—	$	—	$	3,659	$	3,659	$	—

Financing Receivable, Past Due


	September 30, 2023
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due		Total Past Due		Current Loans		Total Loans		90 Days Past Due & Still Accruing		Non-accrual loans
Commercial real estate	$	—	$	—	$	6	$	6	$	1,260,647	$	1,260,653	$	—	$	—
Owner-occupied commercial real estate	—		—		667		667		122,829		123,496		—		1,028
Acquisition, construction & development	—		—		—		—		96,535		96,535		—		—
Commercial & industrial	—		—		—		—		61,571		61,571		—		—
Single family residential (1-4 units)	—		39		59		98		525,460		525,558		—		1,828
Consumer non-real estate and other	3		3		—		6		2,797		2,803		—		—
Total	$	3	$	42	$	732	$	777	$	2,069,839	$	2,070,616	$	—	$	2,856

	December 31, 2022
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due		Total Past Due		Current Loans		Total Loans		90 Days Past Due & Still Accruing		Non-accrual loans
Commercial real estate	$	—	$	—	$	—	$	—	$	1,109,315	$	1,109,315	$	—	$	—
Owner-occupied commercial real estate	—		—		—		—		127,114		127,114		—		1,184
Acquisition, construction & development	—		—		—		—		94,450		94,450		—		—
Commercial & industrial	—		—		—		—		53,514		53,514		—		—
Single family residential (1-4 units)	1,403		154		546		2,103		497,259		499,362		—		4,313
Consumer non-real estate and other	—		4		—		4		3,462		3,466		—		—
Total	$	1,403	$	158	$	546	$	2,107	$	1,885,114	$	1,887,221	$	—	$	5,497

Financing Receivable Credit Quality Indicators

The following table presents the amortized cost basis of the loan portfolio, by year of origination, loan class, and credit quality, as of September 30, 2023 (in thousands):


	Term Loans
	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total
Commercial real estate
Pass	$	156,332	$	256,044	$	166,943	$	23,638	$	70,916	$	412,169	$	34,974	$	1,121,016
Special Mention	—		12,235		35,449		—		10,431		1,830		—		59,945
Substandard	—		15,480		12,847		—		1,716		49,649		—		79,692
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total	$	156,332	$	283,759	$	215,239	$	23,638	$	83,063	$	463,648	$	34,974	$	1,260,653

Year to date gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Owner-occupied commercial real estate
Pass	$	4,688	$	29,017	$	9,516	$	14,340	$	12,848	$	43,182	$	4,585	$	118,176
Special Mention	—		—		—		—		—		331		—		331
Substandard	—		536		—		—		—		4,453		—		4,989
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total	$	4,688	$	29,553	$	9,516	$	14,340	$	12,848	$	47,966	$	4,585	$	123,496

Year to date gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Acquisition, construction & development
Pass	$	4,871	$	27,645	$	15,510	$	—	$	760	$	23,951	$	1,705	$	74,442
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		22,093		—		22,093
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total	$	4,871	$	27,645	$	15,510	$	—	$	760	$	46,044	$	1,705	$	96,535

Year to date gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial & industrial
Pass	$	23,329	$	16,379	$	5,068	$	466	$	24	$	1,467	$	13,948	$	60,681
Special Mention	—		—		890		—		—		—		—		890
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total	$	23,329	$	16,379	$	5,958	$	466	$	24	$	1,467	$	13,948	$	61,571

Year to date gross charge-offs	$	—	$	—	$	—	$	29	$	—	$	—	$	—	$	29

Single family residential (1-4 units)
Pass	$	69,336	$	123,047	$	60,748	$	32,408	$	41,256	$	142,985	$	53,951	$	523,731
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		291		246		—		1,290		—		1,827
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total	$	69,336	$	123,047	$	61,039	$	32,654	$	41,256	$	144,275	$	53,951	$	525,558

Year to date gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—


Consumer non-real estate and other
Pass	$	425	$	247	$	145	$	190	$	411	$	337	$	1,048	$	2,803
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total	$	425	$	247	$	145	$	190	$	411	$	337	$	1,048	$	2,803

Year to date gross charge-offs	$	105	$	—	$	—	$	—	$	—	$	—	$	—	$	105

The value of outstanding loans by credit quality indicators as of December 31, 2022 were as follows (in thousands):


	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2022
Commercial real estate	$	1,011,025	$	62,907	$	35,383	$	—	$	—	$	1,109,315
Owner-occupied commercial real estate	121,621		1,963		3,530		—		—		127,114
Acquisition, construction & development	68,220		836		25,394		—		—		94,450
Commercial & industrial	53,273		—		241		—		—		53,514
Single family residential (1-4 units)	494,994		55		4,313		—		—		499,362
Consumer non-real estate and other	3,466		—		—		—		—		3,466
Total	$	1,752,599	$	65,761	$	68,861	$	—	$	—	$	1,887,221

Leased Property (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Lessor, Lease Income

The components of lease income, which was included in non-interest expense on the Consolidated Statements of Income, were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease income	$	576	$	233	$	1,726	$	319
Total lease income	$	576	$	233	$	1,726	$	319

Lessor, Operating Lease, Payment to be Received, Maturity

The remaining maturities of operating lease receivables as of September 30, 2023, are as follows (in thousands):


	Operating Leases
Remaining three months ending December 31, 2023	$	575
2024	2,302
2025	2,265
2026	1,657
2027	1,356
Thereafter	3,783
Total lease receivables	$	11,938

Assets and Liabilities, Lessee

Right-of-use assets and liabilities by lease type, and the associated balance sheet classifications are as follows (in thousands):


	Balance Sheet Classification	September 30, 2023		December 31, 2022
Right-of-use assets:
Operating leases	Other assets	$	4,846	$	7,255
Finance leases	Other assets	3,661		2,620
Total right-of-use assets		$	8,507	$	9,875
Lease liabilities:
Operating leases	Other liabilities	$	5,075	$	7,592
Finance leases	Other liabilities	3,829		2,745
Total lease liabilities		$	8,904	$	10,337

Lease, Cost

The components of total lease cost were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Finance lease cost
Right-of-use asset amortization	$	71	$	51	$	173	$	153
Interest expense	28		16		58		48
Operating lease cost	770		638		2,437		1,833
Total lease cost	$	869	$	705	$	2,668	$	2,034

The following table presents additional information about the Company’s leases as of September 30, 2023, and December 31, 2022.


Supplemental lease information (dollars in thousands)	September 30, 2023			December 31, 2022
Finance lease weighted average remaining lease term (years)	12.87			12.76
Finance lease weighted average discount rate	2.93		%	2.22		%
Operating lease weighted average remaining lease term (years)	3.12			3.26
Operating lease weighted average discount rate	3.02		%	3.19		%

	Nine Months Ended September 30,
Cash paid for amounts included in the measurement of lease liabilities	2023			2022
Operating cash flows from operating leases	$	2,545		$	1,871
Operating cash flows from finance leases	58			48
Financing cash flows from finance leases	130			113
Right-of-use assets obtained in exchange for new finance lease liabilities	1,214			—
Right-of-use assets obtained in exchange for new operating lease liabilities	—			502

Lessee, Operating Lease, Liability, Maturity

The Company’s future undiscounted lease payments for finance and operating leases with initial terms of one year or more as of September 30, 2023, are as follows (in thousands):


	Operating Leases		Finance Leases
Remaining three months ending December 31, 2023	$	785	$	81
2024	2,305		327
2025	849		334
2026	415		341
2027	366		347
Thereafter	626		3,347
Total undiscounted lease payments	5,346		4,777
Less: discount	(271)		(948)

Net lease liabilities	$	5,075	$	3,829

Finance Lease, Liability, to be Paid, Maturity

The Company’s future undiscounted lease payments for finance and operating leases with initial terms of one year or more as of September 30, 2023, are as follows (in thousands):


	Operating Leases		Finance Leases
Remaining three months ending December 31, 2023	$	785	$	81
2024	2,305		327
2025	849		334
2026	415		341
2027	366		347
Thereafter	626		3,347
Total undiscounted lease payments	5,346		4,777
Less: discount	(271)		(948)

Net lease liabilities	$	5,075	$	3,829

Regulatory Capital Matters - Narrative (Details) $ in Millions	Sep. 30, 2023 USD ($)
Regulatory Capital Requirements under Banking Regulations [Abstract]
Retained earnings available to be declared as dividend	$ 175.0

Consolidated Statements of Changes in Shareholders’ Equity - USD ($) $ in Thousands	Total	Impact of CECL Adoption	Common Stock	Additional Paid-in Capital	Retained Earnings	Retained Earnings Impact of CECL Adoption	Comprehensive Income (Loss)	Treasury Stock
Beginning Balance (in shares) at Dec. 31, 2021			7,423,760
Beginning Balance at Dec. 31, 2021	$ 389,627		$ 4,000	$ 10,374	$ 396,120		$ 6,955	$ (27,822)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	30,660				30,660
Other comprehensive income (loss)	(154,532)						(154,532)
(Purchase) sale of treasury stock, net (in shares)			2,000
(Purchase) sale of treasury stock, net	96							96
Cash dividends, declared	(11,807)				(11,807)
Share-based compensation expense, net	1,427			1,427
Ending Balance (in shares) at Sep. 30, 2022			7,425,760
Ending Balance at Sep. 30, 2022	$ 255,471		$ 4,000	11,801	414,973		(147,577)	(27,726)
Accounting standards update	Accounting Standards Update 2016-13 [Member]
Beginning Balance (in shares) at Dec. 31, 2021			7,423,760
Beginning Balance at Dec. 31, 2021	$ 389,627		$ 4,000	10,374	396,120		6,955	(27,822)
Ending Balance (in shares) at Dec. 31, 2022	7,425,760		7,425,760
Ending Balance at Dec. 31, 2022	$ 273,453	$ (3,439)	$ 4,000	12,282	424,391	$ (3,439)	(139,495)	(27,725)
Beginning Balance (in shares) at Jun. 30, 2022			7,425,760
Beginning Balance at Jun. 30, 2022	291,138		$ 4,000	11,313	407,772		(104,221)	(27,726)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	11,137				11,137
Other comprehensive income (loss)	(43,356)						(43,356)
Cash dividends, declared	(3,936)				(3,936)
Share-based compensation expense, net	488			488
Ending Balance (in shares) at Sep. 30, 2022			7,425,760
Ending Balance at Sep. 30, 2022	$ 255,471		$ 4,000	11,801	414,973		(147,577)	(27,726)
Beginning Balance (in shares) at Dec. 31, 2022	7,425,760		7,425,760
Beginning Balance at Dec. 31, 2022	$ 273,453	$ (3,439)	$ 4,000	12,282	424,391	$ (3,439)	(139,495)	(27,725)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	17,614				17,614
Other comprehensive income (loss)	(6,664)						(6,664)
(Purchase) sale of treasury stock, net (in shares)			2,950
(Purchase) sale of treasury stock, net	141							141
Cash dividends, declared	(11,809)				(11,809)
Share-based compensation expense, net	$ 1,523			1,536	(13)
Ending Balance (in shares) at Sep. 30, 2023	7,428,710		7,428,710
Ending Balance at Sep. 30, 2023	$ 270,819		$ 4,000	13,818	426,744		(146,159)	(27,584)
Beginning Balance (in shares) at Jun. 30, 2023			7,428,710
Beginning Balance at Jun. 30, 2023	290,072		$ 4,000	13,208	426,625		(126,177)	(27,584)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	4,056				4,056
Other comprehensive income (loss)	(19,982)						(19,982)
Cash dividends, declared	(3,937)				(3,937)
Share-based compensation expense, net	$ 610			610
Ending Balance (in shares) at Sep. 30, 2023	7,428,710		7,428,710
Ending Balance at Sep. 30, 2023	$ 270,819		$ 4,000	$ 13,818	$ 426,744		$ (146,159)	$ (27,584)

Accumulated Other Comprehensive Income (Loss) - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	$ 290,072	$ 291,138	$ 273,453	$ 389,627
Net unrealized gains (losses)	(20,323)	(43,447)	(8,589)	(154,397)
Less: net realized (gains) losses reclassified to earnings	341	91	1,925	(135)
Net change in pension plan benefits	0	0	0	0
Ending Balance	270,819	255,471	270,819	255,471
Gains and Losses on Cash Flow Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(1,196)	(1,009)	(1,589)	0
Net unrealized gains (losses)	(38)	(654)	(267)	(1,519)
Less: net realized (gains) losses reclassified to earnings	373	58	995	(86)
Net change in pension plan benefits	0	0	0	0
Ending Balance	(861)	(1,605)	(861)	(1,605)
Unrealized Gains and Losses on Available-for-Sale Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(117,950)	(97,192)	(130,875)	12,975
Net unrealized gains (losses)	(20,285)	(42,793)	(8,322)	(152,878)
Less: net realized (gains) losses reclassified to earnings	(32)	33	930	(49)
Net change in pension plan benefits	0	0	0	0
Ending Balance	(138,267)	(139,952)	(138,267)	(139,952)
Defined Benefit Pension Items
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(7,031)	(6,020)	(7,031)	(6,020)
Net unrealized gains (losses)	0	0	0	0
Less: net realized (gains) losses reclassified to earnings	0	0	0	0
Net change in pension plan benefits	0	0	0	0
Ending Balance	(7,031)	(6,020)	(7,031)	(6,020)
Accumulated Other Comprehensive Income
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(126,177)	(104,221)	(139,495)	6,955
Ending Balance	$ (146,159)	$ (147,577)	$ (146,159)	$ (147,577)

- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 852
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481372/852-10-55-10

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 946
-SubTopic 830
-Name Accounting Standards Codification
-Section 55
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480167/946-830-55-12

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 210
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-04(19))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479617/946-210-S99-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 2
-Subparagraph (SX 210.6-05(4))
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-URI https://asc.fasb.org//1943274/2147479617/946-210-S99-2

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
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-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.6-09(4)(b))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-3

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.6-09(6))
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-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-3

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
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-Paragraph 3
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Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 323
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481687/323-10-50-3

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 825
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
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Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
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+ Details

Regulatory Capital Matters

9 Months Ended

Sep. 30, 2023

Regulatory Capital Requirements under Banking Regulations [Abstract]

Regulatory Capital Matters

Banks and financial holding companies 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. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Under the Basel Committee on Banking Supervision’s capital guidelines for U.S. Banks (“Basel III rules”), an entity must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The net unrealized gain or loss on AFS securities is not included in computing regulatory capital. Management believes as of September 30, 2023, the Company and the Bank meet all capital adequacy requirements to which they are subject.

“Prompt corrective action” regulations provide five classifications: “well capitalized”, “adequately capitalized”, “undercapitalized”, “significantly undercapitalized”, and “critically undercapitalized”, although these terms are not used to 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, and capital restoration plans are required. As of September 30, 2023, and December 31, 2022, the most recent notification from the FDIC categorized the Bank as “well capitalized” under the regulatory framework for “prompt corrective action”.

The following table presents the actual and required capital amounts and ratios for the Company and the Bank at September 30, 2023, and December 31, 2022 (in thousands except for ratios).


	Actual				Minimum Required for Capital Adequacy Purposes (includes applicable Capital Conservation Buffer)			To Be Well Capitalized Under Prompt Corrective Action Regulations
	Amount		Ratio		Amount		Ratio	Amount		Ratio
As of September 30, 2023
Total Capital to risk weighted assets
Consolidated	$	443,293	17.48	%	$	266,306	≥ 10.5%	$	253,625	≥ 10.0%
Burke & Herbert Bank & Trust	441,597		17.39		266,587		≥ 10.5	253,893		≥ 10.0
Tier 1 (Core) Capital to risk weighted assets
Consolidated	416,977		16.44		215,581		≥ 8.5	202,900		≥ 8.0
Burke & Herbert Bank & Trust	415,281		16.36		215,809		≥ 8.5	203,114		≥ 8.0
Common Tier 1 (CET 1) to risk-weighted assets
Consolidated	416,977		16.44		177,537		≥ 7.0	164,856		≥ 6.5
Burke & Herbert Bank & Trust	415,281		16.36		177,725		≥ 7.0	165,030		≥ 6.5
Tier 1 (Core) Capital to average assets
Consolidated	416,977		11.32		147,333		≥ 4.0	184,166		≥ 5.0
Burke & Herbert Bank & Trust	415,281		11.27		147,417		≥ 4.0	184,271		≥ 5.0

As of December 31, 2022
Total Capital to risk weighted assets
Consolidated	$	433,958	18.88	%	$	241,325	≥ 10.5%	$	229,834	≥ 10.0%
Burke & Herbert Bank & Trust	432,290		18.81		241,368		≥ 10.5	229,874		≥ 10.0
Tier 1 (Core) Capital to risk weighted assets
Consolidated	412,946		17.97		195,358		≥ 8.5	186,867		≥ 8.0
Burke & Herbert Bank & Trust	411,251		17.89		195,393		≥ 8.5	183,900		≥ 8.0
Common Tier 1 (CET 1) to risk-weighted assets
Consolidated	412,946		17.97		160,883		≥ 7.0	149,392		≥ 6.5
Burke & Herbert Bank & Trust	411,251		17.89		160,912		≥ 7.0	149,418		≥ 6.5
Tier 1 (Core) Capital to average assets
Consolidated	412,946		11.34		145,605		≥ 4.0	182,007		≥ 5.0
Burke & Herbert Bank & Trust	411,251		11.30		145,605		≥ 4.0	182,007		≥ 5.0

The Company’s principal source of funds for dividend payments is dividends received from the Bank. Banking regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies. As of September 30, 2023, approximately $175.0 million of retained earnings was available for dividend declaration without regulatory approval.

- 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

Deposits (Tables)

9 Months Ended

Sep. 30, 2023

Financial Services, Banking and Thrift [Abstract]

Time Deposit Maturities

At September 30, 2023, the scheduled maturities of time deposits for the remaining three months ending December 31, 2023 and the following five years were as follows (in thousands):


As of September 30, 2023
Remaining three months ending, December 31, 2023	$	59,683
2024	269,103
2025	135,389
2026	83,185
2027	49,432
2028	78,046
Total	$	674,838

Derivatives - Narrative (Details)	9 Months Ended
Derivatives - Narrative (Details)	Sep. 30, 2023 USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Cash flow hedge gain (loss) to be reclassified within 12 months	$ 1,100,000
Fair value of interest rate swaps	0
Fair value of liabilities	$ 1,400,000

Regulatory Capital Matters (Tables)

9 Months Ended

Sep. 30, 2023

Regulatory Capital Requirements under Banking Regulations [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations

The following table presents the actual and required capital amounts and ratios for the Company and the Bank at September 30, 2023, and December 31, 2022 (in thousands except for ratios).


	Actual				Minimum Required for Capital Adequacy Purposes (includes applicable Capital Conservation Buffer)			To Be Well Capitalized Under Prompt Corrective Action Regulations
	Amount		Ratio		Amount		Ratio	Amount		Ratio
As of September 30, 2023
Total Capital to risk weighted assets
Consolidated	$	443,293	17.48	%	$	266,306	≥ 10.5%	$	253,625	≥ 10.0%
Burke & Herbert Bank & Trust	441,597		17.39		266,587		≥ 10.5	253,893		≥ 10.0
Tier 1 (Core) Capital to risk weighted assets
Consolidated	416,977		16.44		215,581		≥ 8.5	202,900		≥ 8.0
Burke & Herbert Bank & Trust	415,281		16.36		215,809		≥ 8.5	203,114		≥ 8.0
Common Tier 1 (CET 1) to risk-weighted assets
Consolidated	416,977		16.44		177,537		≥ 7.0	164,856		≥ 6.5
Burke & Herbert Bank & Trust	415,281		16.36		177,725		≥ 7.0	165,030		≥ 6.5
Tier 1 (Core) Capital to average assets
Consolidated	416,977		11.32		147,333		≥ 4.0	184,166		≥ 5.0
Burke & Herbert Bank & Trust	415,281		11.27		147,417		≥ 4.0	184,271		≥ 5.0

As of December 31, 2022
Total Capital to risk weighted assets
Consolidated	$	433,958	18.88	%	$	241,325	≥ 10.5%	$	229,834	≥ 10.0%
Burke & Herbert Bank & Trust	432,290		18.81		241,368		≥ 10.5	229,874		≥ 10.0
Tier 1 (Core) Capital to risk weighted assets
Consolidated	412,946		17.97		195,358		≥ 8.5	186,867		≥ 8.0
Burke & Herbert Bank & Trust	411,251		17.89		195,393		≥ 8.5	183,900		≥ 8.0
Common Tier 1 (CET 1) to risk-weighted assets
Consolidated	412,946		17.97		160,883		≥ 7.0	149,392		≥ 6.5
Burke & Herbert Bank & Trust	411,251		17.89		160,912		≥ 7.0	149,418		≥ 6.5
Tier 1 (Core) Capital to average assets
Consolidated	412,946		11.34		145,605		≥ 4.0	182,007		≥ 5.0
Burke & Herbert Bank & Trust	411,251		11.30		145,605		≥ 4.0	182,007		≥ 5.0

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2023	Nov. 09, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-41633
Entity Registrant Name	Burke & Herbert Financial Services Corp.
Entity Incorporation, State or Country Code	VA
Entity Tax Identification Number	92-0289417
Entity Address, Address Line One	100 S. Fairfax Street
Entity Address, City or Town	Alexandria
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	22314
City Area Code	703
Local Phone Number	666-3555
Title of 12(b) Security	Common Stock, par value $0.50 per share
Trading Symbol	BHRB
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,428,710
Entity Central Index Key	0001964333
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false
Current Fiscal Year End Date	--12-31

Earnings Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Basic earnings per share excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential impact of contingently issuable shares.

The following shows the weighted average number of shares used in computing earnings per share and the effect of weighted average number of shares dilutive potential Common Stock. Dilutive potential Common Stock has no effect on income available to common shareholders.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income (in thousands)	$	4,056	$	11,137	$	17,614	$	30,660

Weighted average number of shares	7,428,710		7,425,760		7,427,817		7,424,862
Options effect of dilutive shares	70,568		41,933		78,692		33,707
Weighted average dilutive shares	7,499,278		7,467,693		7,506,509		7,458,569

Basic EPS	$	0.55	$	1.50	$	2.37	$	4.13
Diluted EPS	0.55		1.49		2.35		4.11

Stock awards equivalent to 1,368 and zero shares of Common Stock were not considered in computing diluted earnings per common share for the three months ended September 30, 2023, and September 30, 2022, respectively, because they were antidilutive. Stock awards equivalent to zero and zero shares of Common Stock were not considered in computing diluted earnings per share for the nine months ended September 30, 2023, and September 30, 2022, respectively, because they were antidilutive.

Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table presents changes in accumulated other comprehensive income (loss) by component, net of tax, for the three and nine months ended September 30, 2023, and September 30, 2022 (in thousands):


	Three months ended September 30, 2023
	Gains and Losses on Cash Flow Hedges		Unrealized Gains and Losses on Available-for-Sale Securities		Defined Benefit Pension Items		Accumulated Other Comprehensive Income
Beginning Balance	$	(1,196)	$	(117,950)	$	(7,031)	$	(126,177)
Net unrealized gains (losses)	(38)		(20,285)		—		(20,323)
Less: net realized (gains) losses reclassified to earnings	373		(32)		—		341
Net change in pension plan benefits	—		—		—		—
Ending Balance	$	(861)	$	(138,267)	$	(7,031)	$	(146,159)

	Three months ended September 30, 2022
	Gains and Losses on Cash Flow Hedges		Unrealized Gains and Losses on Available-for-Sale Securities		Defined Benefit Pension Items		Accumulated Other Comprehensive Income
Beginning Balance	$	(1,009)	$	(97,192)	$	(6,020)	$	(104,221)
Net unrealized gains (losses)	(654)		(42,793)		—		(43,447)
Less: net realized (gains) losses reclassified to earnings	58		33		—		91
Net change in pension plan benefits	—		—		—		—
Ending Balance	$	(1,605)	$	(139,952)	$	(6,020)	$	(147,577)


	Nine months ended September 30, 2023
	Gains and Losses on Cash Flow Hedges		Unrealized Gains and Losses on Available-for-Sale Securities		Defined Benefit Pension Items		Accumulated Other Comprehensive Income
Beginning Balance	$	(1,589)	$	(130,875)	$	(7,031)	$	(139,495)
Net unrealized gains (losses)	(267)		(8,322)		—		(8,589)
Less: net realized (gains) losses reclassified to earnings	995		930		—		1,925
Net change in pension plan benefits	—		—		—		—
Ending Balance	$	(861)	$	(138,267)	$	(7,031)	$	(146,159)

	Nine months ended September 30, 2022
	Gains and Losses on Cash Flow Hedges		Unrealized Gains and Losses on Available-for-Sale Securities		Defined Benefit Pension Items		Accumulated Other Comprehensive Income
Beginning Balance	$	—	$	12,975	$	(6,020)	$	6,955
Net unrealized gains (losses)	(1,519)		(152,878)		—		(154,397)
Less: net realized (gains) losses reclassified to earnings	(86)		(49)		—		(135)
Net change in pension plan benefits	—		—		—		—
Ending Balance	$	(1,605)	$	(139,952)	$	(6,020)	$	(147,577)

Reclassification out of Accumulated Other Comprehensive Income

The following table presents amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2023, and September 30, 2022 (in thousands).


Details about Accumulated Other Comprehensive Income Components	Amount Reclassified From Accumulated Other Comprehensive Income								Affected Line Item in the Statements of Income
	Three months ended				Nine months ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Cash flow hedges:
Interest rate contracts	$	(472)	$	(73)	$	(1,259)	$	109	Interest income
Tax effect	99		15		264		(23)		Income tax expense (benefit)
Net of tax	$	(373)	$	(58)	$	(995)	$	86

Available-for-sale securities:
Realized gains (losses) on securities	$	—	$	(42)	$	(111)	$	62	Net gains/(losses) on securities
Realized gains (losses) on basis adjustment for fair value hedges	40		—		(1,066)		—		Interest income
Tax effect	(8)		9		247		(13)		Income tax expense (benefit)
Net of tax	$	32	$	(33)	$	(930)	$	49

Total reclassifications, net of tax	$	(341)	$	(91)	$	(1,925)	$	135	Net income

Fair Value Measurements - Schedule of Fair Value, Assets and Liabilities, Recurring (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financial assets
Fair Value	$ 1,224,395	$ 1,371,757
Recurring
Financial assets
Fair Value	1,224,395	1,371,757
Loans held-for-sale, at fair value	3,011	0
Derivatives	2,732	1,311
Financial liabilities
Derivatives	4,178	3,565
Level 1 \| Recurring
Financial assets
Fair Value	172,982	174,993
Loans held-for-sale, at fair value	0	0
Derivatives	0	0
Financial liabilities
Derivatives	0	0
Level 2 \| Recurring
Financial assets
Fair Value	1,051,413	1,196,764
Loans held-for-sale, at fair value	3,011	0
Derivatives	2,732	1,311
Financial liabilities
Derivatives	4,178	3,565
Level 3 \| Recurring
Financial assets
Fair Value	0	0
Loans held-for-sale, at fair value	0	0
Derivatives	0	0
Financial liabilities
Derivatives	0	0
U.S. Treasuries and government agencies
Financial assets
Fair Value	172,982	174,993
U.S. Treasuries and government agencies \| Recurring
Financial assets
Fair Value	172,982	174,993
U.S. Treasuries and government agencies \| Level 1 \| Recurring
Financial assets
Fair Value	172,982	174,993
U.S. Treasuries and government agencies \| Level 2 \| Recurring
Financial assets
Fair Value	0	0
U.S. Treasuries and government agencies \| Level 3 \| Recurring
Financial assets
Fair Value	0	0
Obligations of states and municipalities
Financial assets
Fair Value	429,479	453,907
Obligations of states and municipalities \| Recurring
Financial assets
Fair Value	429,479	453,907
Obligations of states and municipalities \| Level 1 \| Recurring
Financial assets
Fair Value	0	0
Obligations of states and municipalities \| Level 2 \| Recurring
Financial assets
Fair Value	429,479	453,907
Obligations of states and municipalities \| Level 3 \| Recurring
Financial assets
Fair Value	0	0
Residential mortgage backed - agency
Financial assets
Fair Value	41,836	53,061
Residential mortgage backed - agency \| Recurring
Financial assets
Fair Value	41,836	53,061
Residential mortgage backed - agency \| Level 1 \| Recurring
Financial assets
Fair Value	0	0
Residential mortgage backed - agency \| Level 2 \| Recurring
Financial assets
Fair Value	41,836	53,061
Residential mortgage backed - agency \| Level 3 \| Recurring
Financial assets
Fair Value	0	0
Residential mortgage backed - non-agency
Financial assets
Fair Value	282,108	339,295
Residential mortgage backed - non-agency \| Recurring
Financial assets
Fair Value	282,108	339,295
Residential mortgage backed - non-agency \| Level 1 \| Recurring
Financial assets
Fair Value	0	0
Residential mortgage backed - non-agency \| Level 2 \| Recurring
Financial assets
Fair Value	282,108	339,295
Residential mortgage backed - non-agency \| Level 3 \| Recurring
Financial assets
Fair Value	0	0
Commercial mortgage backed - agency
Financial assets
Fair Value	35,539	59,933
Commercial mortgage backed - agency \| Recurring
Financial assets
Fair Value	35,539	59,933
Commercial mortgage backed - agency \| Level 1 \| Recurring
Financial assets
Fair Value	0	0
Commercial mortgage backed - agency \| Level 2 \| Recurring
Financial assets
Fair Value	35,539	59,933
Commercial mortgage backed - agency \| Level 3 \| Recurring
Financial assets
Fair Value	0	0
Commercial mortgage backed - non-agency
Financial assets
Fair Value	173,344	183,299
Commercial mortgage backed - non-agency \| Recurring
Financial assets
Fair Value	173,344	183,299
Commercial mortgage backed - non-agency \| Level 1 \| Recurring
Financial assets
Fair Value	0	0
Commercial mortgage backed - non-agency \| Level 2 \| Recurring
Financial assets
Fair Value	173,344	183,299
Commercial mortgage backed - non-agency \| Level 3 \| Recurring
Financial assets
Fair Value	0	0
Asset-backed
Financial assets
Fair Value	81,172	98,626
Asset-backed \| Recurring
Financial assets
Fair Value	81,172	98,626
Asset-backed \| Level 1 \| Recurring
Financial assets
Fair Value	0	0
Asset-backed \| Level 2 \| Recurring
Financial assets
Fair Value	81,172	98,626
Asset-backed \| Level 3 \| Recurring
Financial assets
Fair Value	0	0
Other
Financial assets
Fair Value	7,935	8,643
Other \| Recurring
Financial assets
Fair Value	7,935	8,643
Other \| Level 1 \| Recurring
Financial assets
Fair Value	0	0
Other \| Level 2 \| Recurring
Financial assets
Fair Value	7,935	8,643
Other \| Level 3 \| Recurring
Financial assets
Fair Value	$ 0	$ 0

Leased Property - Lessee, Operating Lease and Financing Lease, Payment to be Received, Fiscal Year Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Operating Leases
Remaining three months ending December 31, 2023	$ 785
2024	2,305
2025	849
2026	415
2027	366
Thereafter	626
Total lease receivables	5,346
Less: discount	(271)
Operating leases	5,075	$ 7,592
Finance Leases
Remaining three months ending December 31, 2023	81
2024	327
2025	334
2026	341
2027	347
Thereafter	3,347
Total undiscounted lease payments	4,777
Less: discount	(948)
Finance leases	$ 3,829	$ 2,745

Other Operating Expense - Narrative (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Other Income and Expenses [Abstract]
Merger related expenses	$ 1.6	$ 1.7

Derivatives

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.

Cash flow hedges of interest rate risk

The Company’s objective in using interest rate derivatives is to add stability to interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and floors as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate floors designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty if interest rates fall below the strike rate on the contract in exchange for an up-front premium. During 2023, such derivatives were used to hedge the variable cash flows associated with variable-rate assets.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCI and subsequently reclassified into interest income in the same period(s) during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest income as interest payments are received on the Company’s variable-rate asset. During the next 12 months, the Company estimates that an additional $1.1 million will be reclassified as a reduction to interest income.

Derivatives not designated as hedges

The Company enters into interest rate swaps with its loan customers to facilitate their financing requests. Upon entering into swaps with our loan customers, the Company will enter into corresponding offsetting derivatives with third parties. These derivatives represent economic hedges and do not qualify as hedges for accounting. These back-to-back interest rate swaps are reported at fair value in “other assets” and “other liabilities” in the Company’s Consolidated Balance Sheets. Changes in the fair value of interest rate swaps are recorded in other non-interest expense and sum to zero because of offsetting terms of swaps with borrowers and swaps with dealer counterparties.

The table below presents the fair value of the Company’s derivative financial instruments, which includes accrued interest, as well as their classification on the Consolidated Balance Sheets as of September 30, 2023, and December 31, 2022 (in thousands):


	September 30, 2023
	Balance Sheet Location	Notional Amount		Fair Value
Derivatives designated as hedges:
Interest rate swaps related to cash flow hedges	Other liabilities	$	50,000	$	1,446


Derivatives not designated as hedges:
Interest rate swaps related to customer loans	Other assets	$	72,836	$	2,732
Interest rate swaps related to customer loans	Other liabilities	72,836		2,732


	December 31, 2022
	Balance Sheet Location	Notional Amount		Fair Value
Derivatives designated as hedges:
Interest rate swaps related to cash flow hedges	Other liabilities	$	50,000	$	2,254


Derivatives not designated as hedges:
Interest rate swaps related to customer loans	Other assets	$	34,674	$	1,311
Interest rate swaps related to customer loans	Other liabilities	34,674		1,311

The table below presents the effect of cash flow hedge accounting on AOCI for the three months ended September 30, 2023, and September 30, 2022, as follows (in thousands):


Derivatives in Cash Flow Hedging Relationships	September 30, 2023						Location of Gain or (Loss) Reclassified from AOCI into Income	September 30, 2023
	Amount of Gain or (Loss) Recognized in OCI on Derivative		Amount of Gain or (Loss) Recognized in OCI Included Component		Amount of Gain or (Loss) Recognized in OCI Excluded Component			Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest Rate Products	$	(48)	$	(48)	$	—	Interest Income	$	(473)	$	(473)	$	—
Total	$	(48)	$	(48)	$	—		$	(473)	$	(473)	$	—


Derivatives in Cash Flow Hedging Relationships	September 30, 2022						Location of Gain or (Loss) Reclassified from AOCI into Income	September 30, 2022
	Amount of Gain or (Loss) Recognized in OCI on Derivative		Amount of Gain or (Loss) Recognized in OCI Included Component		Amount of Gain or (Loss) Recognized in OCI Excluded Component			Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest Rate Products	$	(828)	$	(828)	$	—	Interest Income	$	(74)	$	(74)	$	—
Total	$	(828)	$	(828)	$	—		$	(74)	$	(74)	$	—

The table below presents the effect of cash flow hedge accounting on AOCI for the nine months ended September 30, 2023, and September 30, 2022, as follows (in thousands):


Derivatives in Cash Flow Hedging Relationships	September 30, 2023						Location of Gain or (Loss) Reclassified from AOCI into Income	September 30, 2023
	Amount of Gain or (Loss) Recognized in OCI on Derivative		Amount of Gain or (Loss) Recognized in OCI Included Component		Amount of Gain or (Loss) Recognized in OCI Excluded Component			Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest Rate Products	$	(337)	$	(337)	$	—	Interest Income	$	(1,259)	$	(1,259)	$	—
Total	$	(337)	$	(337)	$	—		$	(1,259)	$	(1,259)	$	—


Derivatives in Cash Flow Hedging Relationships	September 30, 2022						Location of Gain or (Loss) Reclassified from AOCI into Income	September 30, 2022
	Amount of Gain or (Loss) Recognized in OCI on Derivative		Amount of Gain or (Loss) Recognized in OCI Included Component		Amount of Gain or (Loss) Recognized in OCI Excluded Component			Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest Rate Products	$	(1,924)	$	(1,924)	$	—	Interest Income	$	108	$	108	$	—
Total	$	(1,924)	$	(1,924)	$	—		$	108	$	108	$	—

The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Income for the three and nine months ended September 30, 2023, and September 30, 2022.


	Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	Three months ended
	September 30, 2023				September 30, 2022
	Interest Income		Interest Expense		Interest Income		Interest Expense
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded.	$	(433)	$	—	$	(74)	$	—
The effects of fair value and cash flow hedging:
Gain or (loss) on fair value hedging relationships in Subtopic 815-20
Interest contracts
Hedged items(1)	40		—		—		—
Derivatives designated as hedging instruments	—		—		—		—
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20
Interest contracts
Amount of gain or (loss) reclassified from AOCI into income	(473)		—		(74)		—
Amount of gain or (loss) reclassified from AOCI into income as a result that a forecasted transaction is no longer probable of occurring	—		—		—		—
Amount of gain or (loss) reclassified from AOCI into income - included component	(473)		—		(74)		—
Amount of gain or (loss) reclassified from AOCI into income - excluded component	—		—		—		—


	Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	Nine months ended
	September 30, 2023				September 30, 2022
	Interest Income		Interest Expense		Interest Income		Interest Expense
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded.	$	(1,549)	$	—	$	108	$	—
The effects of fair value and cash flow hedging:
Gain or (loss) on fair value hedging relationships in Subtopic 815-20
Interest contracts
Hedged items(1)	(1,066)		—		—		—
Derivatives designated as hedging instruments	776		—		—		—
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20
Interest contracts
Amount of gain or (loss) reclassified from AOCI into income	(1,259)		—		108		—
Amount of gain or (loss) reclassified from AOCI into income as a result that a forecasted transaction is no longer probable of occurring	—		—		—		—
Amount of gain or (loss) reclassified from AOCI into income - included component	(1,259)		—		108		—
Amount of gain or (loss) reclassified from AOCI into income - excluded component	—		—		—		—

(1) The Company voluntary discontinued a fair value hedging relationship and these amounts include the gain or (loss) and the hedging adjustment on a voluntary discontinued hedging relationship. The Company has allocated the basis adjustment to the remaining individual assets in the closed portfolio and will amortize the basis adjustment over a period consistent with amortization of other discounts or premiums on the assets.

Credit-risk-related Contingent Features

As of September 30, 2023, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for non-performance risk related to these agreements, was $1.4 million. As of September 30, 2023, the Company has posted the full amount of collateral related to these agreements.

Leased Property - Narrative (Details)	9 Months Ended
Leased Property - Narrative (Details)	Sep. 30, 2023
Minimum
Lessor, Lease, Description [Line Items]
Operating lease term	2 years
Lease term of contract	1 year
Maximum
Lessor, Lease, Description [Line Items]
Operating lease term	12 years
Lease term of contract	13 years

Derivatives - Schedule of Derivative Instruments in Statement of Financial Position, Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Other liabilities \| Derivatives designated as hedges: \| Cash Flow Hedging
Derivatives, Fair Value [Line Items]
Notional Amount	$ 50,000	$ 50,000
Fair Value	1,446	2,254
Other liabilities \| Derivatives not designated as hedges:
Derivatives, Fair Value [Line Items]
Notional Amount	72,836	34,674
Fair Value	2,732	1,311
Other assets \| Derivatives not designated as hedges:
Derivatives, Fair Value [Line Items]
Notional Amount	72,836	34,674
Fair Value	$ 2,732	$ 1,311

Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Determination of Fair Value

Fair value is 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. There are three levels of inputs that may be used to measure fair values:

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 our own assumptions that market participants would use in pricing an asset or liability.

In instances in which multiple levels of inputs are used to measure fair value, hierarchy classification is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The Company 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 without relying exclusively on quoted prices for the specific securities but rather by relying on 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).

Derivatives

The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2). The Company has contracted with a third-party vendor to provide valuations for interest rate swaps using standard swap valuation techniques. The Company has considered counterparty credit risk in the valuation of its interest rate swap assets and has considered its own credit risk in the valuation of its interest rate swap liabilities. The Company recognizes interest rate lock commitments at fair value. Fair value of interest rate lock commitments is based on the price of underlying loans obtained from an investor for loans that will be delivered on a best effort basis (Level 2).

Loans held-for-sale, at fair value

The fair value of loans held-for-sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan (Level 2). These loans currently consist of one-to-four family residential loans originated for sale in the secondary market.

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):


	Fair Value Measurements at September 30, 2023 Using:
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Financial assets
Investment Securities
U.S. Treasuries and government agencies	$	172,982	$	—	$	—	$	172,982
Obligations of states and municipalities	—		429,479		—		429,479
Residential mortgage backed - agency	—		41,836		—		41,836
Residential mortgage backed - non-agency	—		282,108		—		282,108
Commercial mortgage backed - agency	—		35,539		—		35,539
Commercial mortgage backed - non-agency	—		173,344		—		173,344
Asset-backed	—		81,172		—		81,172
Other	—		7,935		—		7,935
Total investment securities available-for-sale	$	172,982	$	1,051,413	$	—	$	1,224,395

Loans held-for-sale, at fair value	$	—	$	3,011	$	—	$	3,011

Derivatives	$	—	$	2,732	$	—	$	2,732

Financial liabilities
Derivatives	$	—	$	4,178	$	—	$	4,178


	Fair Value Measurements at December 31, 2022 Using:
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Financial assets
Investment Securities
U.S. Treasuries and government agencies	$	174,993	$	—	$	—	$	174,993
Obligations of states and municipalities	—		453,907		—		453,907
Residential mortgage backed - agency	—		53,061		—		53,061
Residential mortgage backed - non-agency	—		339,295		—		339,295
Commercial mortgage backed - agency	—		59,933		—		59,933
Commercial mortgage backed - non-agency	—		183,299		—		183,299
Asset-backed	—		98,626		—		98,626
Other	—		8,643		—		8,643
Total investment securities available-for-sale	$	174,993	$	1,196,764	$	—	$	1,371,757

Loans held-for-sale, at fair value	$	—	$	—	$	—	$	—

Derivatives	$	—	$	1,311	$	—	$	1,311

Financial liabilities
Derivatives	$	—	$	3,565	$	—	$	3,565

The following describes the valuation techniques used by the Company to measure certain assets recorded at fair value on a non-recurring basis in the financial statements:

Individually evaluated loans

Upon the adoption of CECL, loans individually evaluated for credit expected losses included non-accrual loans and other loans that do not share similar risk characteristics to loans in the CECL loan pools and have been classified as Level 3. Individually evaluated loans with an allocation to the ACL are measured at fair value on a non-recurring basis. Any fair

value adjustments are recorded in the period incurred as provision for credit losses on the Consolidated Statements of Income. Prior to adoption of CECL and ASU 2022-02, which eliminated the TDR accounting model, loans were designated as impaired when, in the judgment of management and based on current information and events, it was probable that all amounts due, according to the contractual terms of the loan agreement, would not be collected.

The measurement of loss associated with impaired loans can be based on either the observable market price of the loan, the present value of the expected future cash flows, or the fair value of the collateral. Generally, the fair value of impaired loans will be determined by the present value of the expected future cash flows or if collateral-dependent based on recent real estate appraisals. For collateral-dependent, the fair value is measured based on the value of the collateral securing the loans, less estimated costs of disposal. Collateral may be in the form of real estate or business assets, including equipment, inventory, and accounts receivable. The vast majority of the collateral is real estate. These appraisals may utilize a single valuation approach or a combination of approaches, including comparable sales and the income approach. Any fair value adjustments are recorded in the period incurred as provision for credit losses on the Consolidated Statements of Income and will result in a Level 3 fair value classification. 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.

Other real estate owned

Assets acquired through foreclosure or other proceedings are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals, which are updated no less frequently than annually. Any fair value adjustments are recorded in the period incurred and expensed against current earnings.

Assets that were measured at fair value on a non-recurring basis during the period are summarized below (in thousands):


	Fair Value Measurements at September 30, 2023 Using:
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Individually evaluated loans:
Commercial real estate	$	—	$	—	$	301	$	301
Owner-occupied commercial real estate	—		—		1,337		1,337
Acquisition, construction & development	—		—		—		—
Commercial & industrial	—		—		—		—
Single family residential	—		—		1,838		1,838
Consumer non-real estate and other	—		—		—		—
Other real estate owned	—		—		—		—


	Fair Value Measurements at December 31, 2022 Using:
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Individually evaluated loans:
Commercial real estate	$	—	$	—	$	290	$	290
Owner-occupied commercial real estate	—		—		1,295		1,295
Acquisition, construction & development	—		—		—		—
Commercial & industrial	—		—		—		—
Single family residential	—		—		911		911
Consumer non-real estate and other	—		—		—		—
Other real estate owned	—		—		—		—

Description

Fair Value

Valuation Techniques

Unobservable Inputs

Range

Weighted Average

September 30, 2023

Impaired loans

3,476

Discounted cash flow analysis

Market rate for borrower

3.6% - 8.5%

5.3%

December 31, 2022

Impaired loans

2,496

Discounted cash flow analysis

Market rate for borrower

4.5% - 6.0%

5.2%

Fair value of financial instruments

The carrying amounts and estimated fair values of financial instruments not carried at fair value, at September 30, 2023, and December 31, 2022, were as follows (in thousands):


			Fair Value Measurements at September 30, 2023 Using:
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)		Total
Financial Assets
Cash and due from banks	$	9,063	$	9,063	$	—	$	—	$	9,063
Interest-earning deposits with banks	32,801		32,801		—		—		32,801
Loans, net	2,044,505		—		—		1,882,989		1,882,989
Accrued interest	15,597		—		15,597		—		15,597

Financial Liabilities
Non-interest-bearing	$	853,385	$	—	$	853,385	$	—	$	853,385
Interest-bearing	2,132,233		—		2,132,233		—		2,132,233
Other borrowed funds	299,000		—		298,133		—		298,133
Accrued interest	6,348		—		6,348		—		6,348


			Fair Value Measurements at December 31, 2022 Using:
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)		Total
Financial Assets
Cash and due from banks	$	9,124	$	9,124	$	—	$	—	$	9,124
Interest-bearing deposits with banks	41,171		41,171		—		—		41,171
Loans, net	1,866,182		—		—		1,768,903		1,768,903
Accrued interest	15,481		—		15,481		—		15,481

Financial Liabilities
Non-interest-bearing	$	960,692	$	—	$	960,692	$	—	$	960,692
Interest-bearing	1,959,708		—		1,951,227		—		1,951,227
Other borrowed funds	343,100		—		342,904		—		342,904
Accrued interest	1,452		—		1,452		—		1,452

- 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

Advances and Other Borrowings (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Short-Term Debt

The contractual maturities of these borrowings as of September 30, 2023, are as follows (in thousands):


Due in 2023	$	49,000
Due in 2024	250,000
Total	$	299,000

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Nature of Business Activities and Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying consolidated financial statements include Burke & Herbert Financial Services Corp. and its wholly owned subsidiary Burke & Herbert Bank & Trust Company and have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial reporting and with applicable quarterly reporting regulations of the U.S. Securities and Exchange Commission (“SEC”). The accounting and reporting policies of the Company conform to GAAP and reflect practices of the banking industry. They do not include all of the information and notes required by GAAP for complete financial statements. As such, these unaudited financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ending December 31, 2022, included in the Company’s Registration Statement on Form 10 filed with the SEC on February 28, 2023, as amended on April 4, 2023, April 20, 2023, and April 21, 2023, and as declared as effective by the SEC on April 21, 2023. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions between the Company and the Bank have been eliminated. In preparing financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the results of operations in these financial statements, have been made. The results of operations for the three and nine months ended September 30, 2023, are not necessarily indicative of the results to be expected for any other interim period or for the full year. All amounts and disclosures included in this quarterly report as of December 31, 2022, were derived from the Company’s audited consolidated financial statements. Certain items in the prior period have been reclassified to conform to the current presentation. These reclassifications had no effect on prior year net income or on shareholders’ equity.
Adoption of new accounting standards	Adoption of new accounting standards Derivatives and Hedging On March 28, 2022, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method. The purpose of this updated guidance is to further align risk management objectives with hedge accounting results on the application of the last-of-layer method, which was first introduced in ASU 2017-02, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2022-01 is effective for public business entities for fiscal years beginning after December 15, 2022. ASU 2022-01 requires a modified retrospective transition method for basis adjustments in which the entity will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the statement of financial position as of the date of adoption. The Company adopted this ASU on January 1, 2023; therefore, there was no impact to the consolidated financial statements. Allowance for Credit Losses On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”), as amended, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The CECL methodology requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, as well as future forecasts including reasonable and supportable forecasts and other forecast periods. CECL generally applies to financial assets measured at amortized cost and some off-balance sheet credit exposures, such as unfunded commitments to extend credit. Financial assets measured at amortized cost are presented as the net amount expected to be collected. In addition, CECL made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities if management does not intend to sell and does not believe that it is more likely than not, they will be required to sell. The Company adopted ASC 326 and all related subsequent amendments thereto effective January 1, 2023, using the modified retrospective approach for all financial assets measured at amortized cost and off-balance sheet credit exposures. The adoption of the new CECL standard resulted in a cumulative-effect adjustment that increased the allowance for credit losses for loans by $4.1 million and increased the allowance for unfunded commitments by $274.8 thousand. Retained earnings, net of deferred taxes, decreased by $3.4 million. Results for reporting periods beginning after January 1, 2023, are presented under ASU 2016-13, while prior period amounts continue to be reported in accordance with the incurred loss model under the previously applicable GAAP. The Company adopted ASC 326 using the prospective transition approach for debt securities for which other-than-temporary impairment had been recognized prior to January 1, 2023. As of December 31, 2022, the Company did not have any other-than-temporarily impaired investment securities. The Company did not record an ACL for securities upon adoption. The Company elected not to measure an ACL for accrued interest receivable and instead elected to reverse interest income on loans or securities that are placed on non-accrual status, which generally occurs when the instrument is 90 days past due, or earlier if the Company believes the collection of interest is doubtful. The Company has concluded that this policy results in the timely reversal of uncollectible interest. On January 1, 2023, the Company adopted ASU 2022-02, Financial Instruments - Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 addresses areas identified by the FASB as part of its implementation review of the credit losses standard (ASU 2016-13) that introduced the CECL model. The amendments eliminate the accounting guidance for troubled debt restructurings (“TDRs”) by creditors that have adopted the CECL model and enhance the disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. In addition, the amendments require that the Company disclose current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. The Company adopted the standard prospectively, and it did not have a material impact on the financial statements.
Allowance for credit losses and Accrued Interest Receivable	Allowance for credit losses - available-for-sale debt securities Management evaluates all available-for-sale (“AFS”) debt securities in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. The Company first assesses whether it intends to sell or if 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 AFS debt securities that do not meet the aforementioned criteria, the Company 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 ACL is recognized in other comprehensive income. Changes in the ACL are recorded as credit loss expense (or recapture). Losses are charged against the allowance when management believes the uncollectability of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met. At September 30, 2023, there was no ACL related to the AFS security portfolio. Refer to Note 2 - Securities in Notes to the Consolidated Financial Statements. Allowance for credit losses - loans The ACL represents an amount, which, in management’s judgment, reflects expected credit losses in the loan portfolio at the balance sheet date. The estimate for expected credit losses is based on the evaluation of the size and current risk characteristics of the loan portfolio, past events, current conditions, reasonable and supportable forecasts of future economic conditions, and prepayment experience as related to credit contractual term information. The ACL is measured and recorded upon the initial recognition of a financial asset. The ACL is reduced by charge-offs, net of recoveries of previous losses, and is increased or decreased by a provision for (or recapture of) credit losses, which is recorded in the Consolidated Statements of Income. The ACL for expected credit losses is determined based on a quantitative assessment of two categories of loans: collectively evaluated loans and individually evaluated loans. In addition, the ACL also includes a qualitative component which adjusts the CECL model for risk factors that are not considered within the CECL model, but are relevant in assessing the expected credit losses within the loan portfolio. The Company is using a remaining useful life or weighted average remaining maturity (“WARM”) methodology to estimate its current expected credit losses. For purposes of calculating reserves in collectively evaluated loans, the ACL calculation segments the Company’s loan portfolio using federal call codes to group loans which share similar risk characteristics. In order to generate reasonable and supportable forecasts of loss rates over a two-year period, the ACL calculation utilizes macroeconomic variable loss drivers, which may include aggregate macroeconomic indicators pertaining to such items as equity market conditions or interest rates, as well as other variables that are portfolio-specific, such as those that pertain to the commercial real estate or residential loan portfolios. A straight-line reversion technique is used for the following four quarters, and in following quarters, the ACL calculation reverts to historical average loss rates. Based on management’s analysis, adjustments may be applied for additional factors impacting the risk of loss in the loan portfolio beyond information used to calculate reasonable and supportable, reversion and post-reversion period forecasts on collectively evaluated loans. As the reasonable and supportable and reversion period forecasts reflect the use of the macroeconomic variable loss drivers, management may consider that an additional or reduced reserve is warranted through qualitative risk factors based on current and expected conditions, including those that utilize supplemental information relative to the macroeconomic variable loss drivers. Qualitative risk factors considered by management include the following: •Nature and volume of loans; •Concentrations of credit; •Delinquency trends; •Experience, ability, and depth of management and lending staff; and •Quality of loan review system. Loans that do not share similar risk characteristics are evaluated on an individual basis and are excluded from the collective evaluation for the ACL. Loans identified to be individually evaluated under CECL include loans on non-accrual status and may include accruing loans that do not share similar risk characteristics to other accruing loans collectively evaluated. A specific reserve analysis is applied to the individually evaluated loans, which considers collateral value, an observable market price, or the present value of the expected future cash flows. A specific reserve may be assigned if the measured value of the loan using one of the before mentioned methods is less than the current carrying value of the loan. Under CECL, for collateral-dependent loans, the Company has adopted the practical expedient to measure the ACL based on the fair value of the collateral. A loan is considered collateral-dependent when the Company determines foreclosure is probable or the borrower is experiencing financial difficulty and the Company expects repayment to be provided substantially through the operation or sale of the collateral. Collateral could be in the form of real estate, equipment, or business assets. An ACL may result for a collateral-dependent loan if the fair value of the underlying collateral, as of the reporting date, adjusted for expected costs to repair or sell, was less than the amortized cost basis of the loan. If repayment of the loan is instead dependent only on the operation, rather than the sale of the collateral, the measure of the ACL does not incorporate estimated costs to sell. For loans analyzed on the basis of projected future principal and interest cash flows, the Company will discount the expected cash flows at the effective interest rate of the loan, and an ACL would result if the present value of the expected cash flows was less than the amortized cost basis of the loan. When the discounted cash flow method is used to determine the ACL, management does not adjust the effective interest rate used to discount cash flows to incorporate expected prepayments. Allowance for credit losses on off-balance sheet credit exposures On a quarterly basis, the Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The ACL on off-balance sheet credit exposures is adjusted through the provision for credit losses on the Consolidated Statements of Income. 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 by loan segment at each balance sheet date under the CECL model using the same methodology as the loan portfolio. The ACL for unfunded commitments is included in accrued interest and other liabilities on the Company’s Consolidated Balance Sheets. Accrued Interest Receivable The Company has elected to exclude accrued interest from the amortized cost basis in its determination of the ACL and elected the policy to write-off accrued interest receivable directly through the reversal of interest income.
Fair Value Measurements	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 without relying exclusively on quoted prices for the specific securities but rather by relying on 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). Derivatives The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2). The Company has contracted with a third-party vendor to provide valuations for interest rate swaps using standard swap valuation techniques. The Company has considered counterparty credit risk in the valuation of its interest rate swap assets and has considered its own credit risk in the valuation of its interest rate swap liabilities. The Company recognizes interest rate lock commitments at fair value. Fair value of interest rate lock commitments is based on the price of underlying loans obtained from an investor for loans that will be delivered on a best effort basis (Level 2). Loans held-for-sale, at fair value The fair value of loans held-for-sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan (Level 2). These loans currently consist of one-to-four family residential loans originated for sale in the secondary market. Individually evaluated loans Upon the adoption of CECL, loans individually evaluated for credit expected losses included non-accrual loans and other loans that do not share similar risk characteristics to loans in the CECL loan pools and have been classified as Level 3. Individually evaluated loans with an allocation to the ACL are measured at fair value on a non-recurring basis. Any fair value adjustments are recorded in the period incurred as provision for credit losses on the Consolidated Statements of Income. Prior to adoption of CECL and ASU 2022-02, which eliminated the TDR accounting model, loans were designated as impaired when, in the judgment of management and based on current information and events, it was probable that all amounts due, according to the contractual terms of the loan agreement, would not be collected. The measurement of loss associated with impaired loans can be based on either the observable market price of the loan, the present value of the expected future cash flows, or the fair value of the collateral. Generally, the fair value of impaired loans will be determined by the present value of the expected future cash flows or if collateral-dependent based on recent real estate appraisals. For collateral-dependent, the fair value is measured based on the value of the collateral securing the loans, less estimated costs of disposal. Collateral may be in the form of real estate or business assets, including equipment, inventory, and accounts receivable. The vast majority of the collateral is real estate. These appraisals may utilize a single valuation approach or a combination of approaches, including comparable sales and the income approach. Any fair value adjustments are recorded in the period incurred as provision for credit losses on the Consolidated Statements of Income and will result in a Level 3 fair value classification. 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. Other real estate owned Assets acquired through foreclosure or other proceedings are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals, which are updated no less frequently than annually. Any fair value adjustments are recorded in the period incurred and expensed against current earnings.

- Definition

Disclosure of accounting policy for credit loss on financial instrument measured at amortized cost basis, net investment in lease, off-balance sheet credit exposure, and available-for-sale debt security. Includes, but is not limited to, methodology used to estimate allowance for credit loss, how writeoff of uncollectible amount is recognized, and determination of past due status and nonaccrual status.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 326
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479319/326-20-50-14

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 326
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-Name Accounting Standards Codification
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-Paragraph 5A
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-URI https://asc.fasb.org//1943274/2147479391/326-20-30-5A

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 326
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-Paragraph 3C
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-URI https://asc.fasb.org//1943274/2147479319/326-20-50-3C

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Section 35
-Paragraph 8A
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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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-URI https://asc.fasb.org//1943274/2147479319/326-20-50-3D

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 326
-SubTopic 20
-Name Accounting Standards Codification
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-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479344/326-20-45-5

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 326
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-Name Accounting Standards Codification
-Section 50
-Paragraph 3A
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479106/326-30-50-3A

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 326
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147479106/326-30-50-3D

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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-Section 30
-Paragraph 4A
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-URI https://asc.fasb.org//1943274/2147479391/326-20-30-4A

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 7A
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-Topic 326
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-Name Accounting Standards Codification
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-Paragraph 21
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-URI https://asc.fasb.org//1943274/2147479319/326-20-50-21

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 326
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147483530/326-20-S99-1

+ Details

Leased Property

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leased Property

Lessor Arrangements

The Company enters into operating leases with customers to lease vacant space in certain owned premises that is not being used by the Company. These operating leases are typically payable in monthly installments with terms ranging from around two years to around twelve years and may contain renewal options.

The components of lease income, which was included in non-interest expense on the Consolidated Statements of Income, were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease income	$	576	$	233	$	1,726	$	319
Total lease income	$	576	$	233	$	1,726	$	319

The remaining maturities of operating lease receivables as of September 30, 2023, are as follows (in thousands):


	Operating Leases
Remaining three months ending December 31, 2023	$	575
2024	2,302
2025	2,265
2026	1,657
2027	1,356
Thereafter	3,783
Total lease receivables	$	11,938

Lessee Arrangements

The Company has entered into leases for branches and office space. The leases are evaluated for whether the lease will be classified as either a finance or operating lease. Certain leases offer the option to extend the lease term, and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably assured of being exercised. Including renewal options, the terms of the Company’s leases range from less than one year to around thirteen years. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations.

Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. These cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease. The right-of-use asset and lease liability are included in other assets and other liabilities, respectively, in the Consolidated Balance Sheets.

Right-of-use assets and liabilities by lease type, and the associated balance sheet classifications are as follows (in thousands):


	Balance Sheet Classification	September 30, 2023		December 31, 2022
Right-of-use assets:
Operating leases	Other assets	$	4,846	$	7,255
Finance leases	Other assets	3,661		2,620
Total right-of-use assets		$	8,507	$	9,875
Lease liabilities:
Operating leases	Other liabilities	$	5,075	$	7,592
Finance leases	Other liabilities	3,829		2,745
Total lease liabilities		$	8,904	$	10,337

The components of total lease cost were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Finance lease cost
Right-of-use asset amortization	$	71	$	51	$	173	$	153
Interest expense	28		16		58		48
Operating lease cost	770		638		2,437		1,833
Total lease cost	$	869	$	705	$	2,668	$	2,034

The Company’s future undiscounted lease payments for finance and operating leases with initial terms of one year or more as of September 30, 2023, are as follows (in thousands):


	Operating Leases		Finance Leases
Remaining three months ending December 31, 2023	$	785	$	81
2024	2,305		327
2025	849		334
2026	415		341
2027	366		347
Thereafter	626		3,347
Total undiscounted lease payments	5,346		4,777
Less: discount	(271)		(948)

Net lease liabilities	$	5,075	$	3,829

The following table presents additional information about the Company’s leases as of September 30, 2023, and December 31, 2022.


Supplemental lease information (dollars in thousands)	September 30, 2023			December 31, 2022
Finance lease weighted average remaining lease term (years)	12.87			12.76
Finance lease weighted average discount rate	2.93		%	2.22		%
Operating lease weighted average remaining lease term (years)	3.12			3.26
Operating lease weighted average discount rate	3.02		%	3.19		%

	Nine Months Ended September 30,
Cash paid for amounts included in the measurement of lease liabilities	2023			2022
Operating cash flows from operating leases	$	2,545		$	1,871
Operating cash flows from finance leases	58			48
Financing cash flows from finance leases	130			113
Right-of-use assets obtained in exchange for new finance lease liabilities	1,214			—
Right-of-use assets obtained in exchange for new operating lease liabilities	—			502

Leased Property

Lessor Arrangements

The components of lease income, which was included in non-interest expense on the Consolidated Statements of Income, were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease income	$	576	$	233	$	1,726	$	319
Total lease income	$	576	$	233	$	1,726	$	319

The remaining maturities of operating lease receivables as of September 30, 2023, are as follows (in thousands):


	Operating Leases
Remaining three months ending December 31, 2023	$	575
2024	2,302
2025	2,265
2026	1,657
2027	1,356
Thereafter	3,783
Total lease receivables	$	11,938

Lessee Arrangements

Right-of-use assets and liabilities by lease type, and the associated balance sheet classifications are as follows (in thousands):


	Balance Sheet Classification	September 30, 2023		December 31, 2022
Right-of-use assets:
Operating leases	Other assets	$	4,846	$	7,255
Finance leases	Other assets	3,661		2,620
Total right-of-use assets		$	8,507	$	9,875
Lease liabilities:
Operating leases	Other liabilities	$	5,075	$	7,592
Finance leases	Other liabilities	3,829		2,745
Total lease liabilities		$	8,904	$	10,337

The components of total lease cost were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Finance lease cost
Right-of-use asset amortization	$	71	$	51	$	173	$	153
Interest expense	28		16		58		48
Operating lease cost	770		638		2,437		1,833
Total lease cost	$	869	$	705	$	2,668	$	2,034

The Company’s future undiscounted lease payments for finance and operating leases with initial terms of one year or more as of September 30, 2023, are as follows (in thousands):


	Operating Leases		Finance Leases
Remaining three months ending December 31, 2023	$	785	$	81
2024	2,305		327
2025	849		334
2026	415		341
2027	366		347
Thereafter	626		3,347
Total undiscounted lease payments	5,346		4,777
Less: discount	(271)		(948)

Net lease liabilities	$	5,075	$	3,829

The following table presents additional information about the Company’s leases as of September 30, 2023, and December 31, 2022.


Supplemental lease information (dollars in thousands)	September 30, 2023			December 31, 2022
Finance lease weighted average remaining lease term (years)	12.87			12.76
Finance lease weighted average discount rate	2.93		%	2.22		%
Operating lease weighted average remaining lease term (years)	3.12			3.26
Operating lease weighted average discount rate	3.02		%	3.19		%

	Nine Months Ended September 30,
Cash paid for amounts included in the measurement of lease liabilities	2023			2022
Operating cash flows from operating leases	$	2,545		$	1,871
Operating cash flows from finance leases	58			48
Financing cash flows from finance leases	130			113
Right-of-use assets obtained in exchange for new finance lease liabilities	1,214			—
Right-of-use assets obtained in exchange for new operating lease liabilities	—			502

Leased Property

Lessor Arrangements

The components of lease income, which was included in non-interest expense on the Consolidated Statements of Income, were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease income	$	576	$	233	$	1,726	$	319
Total lease income	$	576	$	233	$	1,726	$	319

The remaining maturities of operating lease receivables as of September 30, 2023, are as follows (in thousands):


	Operating Leases
Remaining three months ending December 31, 2023	$	575
2024	2,302
2025	2,265
2026	1,657
2027	1,356
Thereafter	3,783
Total lease receivables	$	11,938

Lessee Arrangements

Right-of-use assets and liabilities by lease type, and the associated balance sheet classifications are as follows (in thousands):


	Balance Sheet Classification	September 30, 2023		December 31, 2022
Right-of-use assets:
Operating leases	Other assets	$	4,846	$	7,255
Finance leases	Other assets	3,661		2,620
Total right-of-use assets		$	8,507	$	9,875
Lease liabilities:
Operating leases	Other liabilities	$	5,075	$	7,592
Finance leases	Other liabilities	3,829		2,745
Total lease liabilities		$	8,904	$	10,337

The components of total lease cost were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Finance lease cost
Right-of-use asset amortization	$	71	$	51	$	173	$	153
Interest expense	28		16		58		48
Operating lease cost	770		638		2,437		1,833
Total lease cost	$	869	$	705	$	2,668	$	2,034

The Company’s future undiscounted lease payments for finance and operating leases with initial terms of one year or more as of September 30, 2023, are as follows (in thousands):


	Operating Leases		Finance Leases
Remaining three months ending December 31, 2023	$	785	$	81
2024	2,305		327
2025	849		334
2026	415		341
2027	366		347
Thereafter	626		3,347
Total undiscounted lease payments	5,346		4,777
Less: discount	(271)		(948)

Net lease liabilities	$	5,075	$	3,829

The following table presents additional information about the Company’s leases as of September 30, 2023, and December 31, 2022.


Supplemental lease information (dollars in thousands)	September 30, 2023			December 31, 2022
Finance lease weighted average remaining lease term (years)	12.87			12.76
Finance lease weighted average discount rate	2.93		%	2.22		%
Operating lease weighted average remaining lease term (years)	3.12			3.26
Operating lease weighted average discount rate	3.02		%	3.19		%

	Nine Months Ended September 30,
Cash paid for amounts included in the measurement of lease liabilities	2023			2022
Operating cash flows from operating leases	$	2,545		$	1,871
Operating cash flows from finance leases	58			48
Financing cash flows from finance leases	130			113
Right-of-use assets obtained in exchange for new finance lease liabilities	1,214			—
Right-of-use assets obtained in exchange for new operating lease liabilities	—			502

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash Flows from Operating Activities
Net income	$ 17,614	$ 30,660
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of fixed assets	2,050	2,259
Amortization of housing tax credits	4,194	4,610
Realized loss (gain) on sales of available-for-sale securities	112	(63)
Provision for (recapture of) credit losses	964	(7,564)
Income from company-owned life insurance	(1,720)	(1,634)
Deferred tax (benefit)	(2,101)	755
Loss on disposal of fixed assets	0	24
Accretion of securities	(1,210)	(1,099)
Amortization of securities	6,922	8,646
Share-based compensation expense	1,798	1,492
Repayment of operating lease liabilities	(2,393)	(1,700)
(Gain) on loans held-for-sale	(79)	(58)
Proceeds from sale of loans held-for-sale	7,243	9,526
Change in fair value of loans held-for-sale	6	23
Originations of loans held-for-sale	(10,181)	(2,300)
(Increase) in accrued interest receivable	(117)	(78)
Decrease in other assets	2,904	2,022
Increase in accrued interest payable and other liabilities	6,329	3,129
Net cash flows provided by operating activities	32,335	48,650
Cash Flows from Investing Activities
Proceeds from maturities, prepayments, and calls of securities available-for-sale, net	76,053	164,574
Proceeds from sale of securities available-for-sale, net	77,780	142,475
Purchases of securities available-for-sale, net	(23,321)	(355,542)
Sales of restricted stock	27,447	15,038
Purchases of restricted stock	(18,250)	(13,932)
Purchases of property and equipment, net of disposals	(6,394)	(21,965)
(Purchase of) company-owned life insurance	(6)	(6)
(Increase) in loans made to customers, net	(183,395)	(15,958)
Net cash flows (used in) investing activities	(50,086)	(85,316)
Cash Flows from Financing Activities
Net increase (decrease) in non-interest-bearing accounts	(107,307)	49,867
Net increase (decrease) in interest-bearing accounts	172,525	(5,624)
(Decrease) in other short-term borrowings	(44,100)	(32,000)
Repayment of finance lease liabilities	(130)	(113)
Cash dividends paid	(11,809)	(11,807)
Sale of treasury stock	141	96
Net cash flows provided by financing activities	9,320	419
Increase in cash and cash equivalents	(8,431)	(36,247)
Cash and cash equivalents
Beginning of period	50,295	77,363
End of period	41,864	41,116
Cash payments for:
Interest paid to depositors	25,454	1,480
Interest paid on other borrowed funds	6,860	1,995
Interest paid on finance lease	58	48
Income taxes	445	550
Change in unrealized gains on available-for-sale securities	(10,422)	(193,580)
Lease liability arising from obtaining right-of-use assets	1,214	758
Transfers from portfolio loans to loans held-for-sale	0	19,594
Financing of sale from loan held-for-sale	$ 0	$ 9,000

Allowance for Credit Losses - Activity in the Allowance for Loan Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period	$ 25,919	$ 23,362	$ 21,039	$ 31,709
Provision for (recapture of) credit losses	200		1,033
Provision for (recapture of) loan losses	235	(2,388)	964	(7,564)
Charge-offs	(13)	(54)	(134)	(3,411)
Recoveries	5	33	48	219
Balance, end of period	26,111	20,953	26,111	20,953
Commercial real estate
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period	18,639	15,548	15,477	25,112
Provision for (recapture of) credit losses	969		1,414
Provision for (recapture of) loan losses		(1,782)		(8,071)
Charge-offs	0	0	0	(3,282)
Recoveries	4	27	35	34
Balance, end of period	19,612	13,793	19,612	13,793
Owner-occupied commercial real estate
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period	719	724	635	611
Provision for (recapture of) credit losses	66		156
Provision for (recapture of) loan losses		(111)		2
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Balance, end of period	785	613	785	613
Acquisition, construction & development
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period	1,319	3,607	2,082	2,189
Provision for (recapture of) credit losses	446		323
Provision for (recapture of) loan losses		830		2,248
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Balance, end of period	1,765	4,437	1,765	4,437
Commercial & industrial
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period	612	214	438	165
Provision for (recapture of) credit losses	(95)		(129)
Provision for (recapture of) loan losses		82		151
Charge-offs	0	0	(29)	(20)
Recoveries	0	0	0	0
Balance, end of period	517	296	517	296
Single family residential (1-4 units)
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period	4,520	1,519	2,379	2,434
Provision for (recapture of) credit losses	(1,135)		(661)
Provision for (recapture of) loan losses		264		(815)
Charge-offs	0	0	0	0
Recoveries	1	2	7	166
Balance, end of period	3,386	1,785	3,386	1,785
Consumer non-real estate and other
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period	110	19	28	18
Provision for (recapture of) credit losses	(51)		(70)
Provision for (recapture of) loan losses		60		101
Charge-offs	(13)	(54)	(105)	(109)
Recoveries	0	4	6	19
Balance, end of period	46	29	46	29
Unallocated reserve
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period	0	1,731	0	1,180
Provision for (recapture of) credit losses	0		0
Provision for (recapture of) loan losses		(1,731)		(1,180)
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Balance, end of period	$ 0	$ 0	0	$ 0
Impact of CECL Adoption
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period			4,125
Impact of CECL Adoption \| Commercial real estate
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period			2,686
Impact of CECL Adoption \| Owner-occupied commercial real estate
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period			(6)
Impact of CECL Adoption \| Acquisition, construction & development
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period			(640)
Impact of CECL Adoption \| Commercial & industrial
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period			237
Impact of CECL Adoption \| Single family residential (1-4 units)
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period			1,661
Impact of CECL Adoption \| Consumer non-real estate and other
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period			187
Impact of CECL Adoption \| Unallocated reserve
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period			$ 0

Nature of Business Activities and Significant Accounting Policies - Impact of Adoption of CECL (Details) - USD ($)	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Financial Assets:
Allowance for credit losses	$ 26,111,000	$ 25,919,000	$ 21,039,000	$ 20,953,000	$ 23,362,000	$ 31,709,000
Financial Liabilities:
Allowance for credit losses on off-balance sheet credit exposure			0
Reserves under CECL Model
Financial Assets:
Allowance for credit losses			25,164,000
Financial Liabilities:
Allowance for credit losses on off-balance sheet credit exposure			275,000
Impact of CECL Adoption
Financial Assets:
Allowance for credit losses			4,125,000
Financial Liabilities:
Allowance for credit losses on off-balance sheet credit exposure			275,000
Commercial real estate
Financial Assets:
Allowance for credit losses	19,612,000	18,639,000	15,477,000	13,793,000	15,548,000	25,112,000
Commercial real estate \| Reserves under CECL Model
Financial Assets:
Allowance for credit losses			18,163,000
Commercial real estate \| Impact of CECL Adoption
Financial Assets:
Allowance for credit losses			2,686,000
Owner-occupied commercial real estate
Financial Assets:
Allowance for credit losses	785,000	719,000	635,000	613,000	724,000	611,000
Owner-occupied commercial real estate \| Reserves under CECL Model
Financial Assets:
Allowance for credit losses			629,000
Owner-occupied commercial real estate \| Impact of CECL Adoption
Financial Assets:
Allowance for credit losses			(6,000)
Acquisition, construction & development
Financial Assets:
Allowance for credit losses	1,765,000	1,319,000	2,082,000	4,437,000	3,607,000	2,189,000
Acquisition, construction & development \| Reserves under CECL Model
Financial Assets:
Allowance for credit losses			1,442,000
Acquisition, construction & development \| Impact of CECL Adoption
Financial Assets:
Allowance for credit losses			(640,000)
Commercial & industrial
Financial Assets:
Allowance for credit losses	517,000	612,000	438,000	296,000	214,000	165,000
Commercial & industrial \| Reserves under CECL Model
Financial Assets:
Allowance for credit losses			675,000
Commercial & industrial \| Impact of CECL Adoption
Financial Assets:
Allowance for credit losses			237,000
Single family residential (1-4 units)
Financial Assets:
Allowance for credit losses	3,386,000	4,520,000	2,379,000	1,785,000	1,519,000	2,434,000
Single family residential (1-4 units) \| Reserves under CECL Model
Financial Assets:
Allowance for credit losses			4,040,000
Single family residential (1-4 units) \| Impact of CECL Adoption
Financial Assets:
Allowance for credit losses			1,661,000
Consumer non-real estate and other
Financial Assets:
Allowance for credit losses	46,000	110,000	28,000	29,000	19,000	18,000
Consumer non-real estate and other \| Reserves under CECL Model
Financial Assets:
Allowance for credit losses			215,000
Consumer non-real estate and other \| Impact of CECL Adoption
Financial Assets:
Allowance for credit losses			187,000
Unallocated reserve
Financial Assets:
Allowance for credit losses	$ 0	$ 0	0	$ 0	$ 1,731,000	$ 1,180,000
Unallocated reserve \| Reserves under CECL Model
Financial Assets:
Allowance for credit losses			0
Unallocated reserve \| Impact of CECL Adoption
Financial Assets:
Allowance for credit losses			$ 0

Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Share-Based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity

The following is a summary of the Company’s RSU awards:


Non-vested Shares	Shares	Weighted-Average Grant-Date Fair Value
Non-vested at December 31, 2022	122,440	$	48.00
Granted	24,705	67.81
Vested	(4,560)	54.07
Forfeited	—	—
Non-vested at September 30, 2023	142,585	$	51.24

Securities - Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value
Less Than Twelve Months	$ 47,872	$ 586,464
More Than Twelve Months	1,160,970	752,987
Gross Unrealized Losses
Less Than Twelve Months	2,069	33,528
More Than Twelve Months	174,059	132,297
AFS, Total Gross Unrealized Losses	176,128	165,825
U.S. Treasuries and government agencies
Fair Value
Less Than Twelve Months	0	28,399
More Than Twelve Months	172,982	146,594
Gross Unrealized Losses
Less Than Twelve Months	0	1,131
More Than Twelve Months	24,328	22,030
AFS, Total Gross Unrealized Losses	24,328	23,161
Obligations of states and municipalities
Fair Value
Less Than Twelve Months	1,708	128,373
More Than Twelve Months	424,139	320,287
Gross Unrealized Losses
Less Than Twelve Months	125	12,378
More Than Twelve Months	107,288	84,317
AFS, Total Gross Unrealized Losses	107,413	96,695
Residential mortgage backed - agency
Fair Value
Less Than Twelve Months	37	7,258
More Than Twelve Months	41,798	41,975
Gross Unrealized Losses
Less Than Twelve Months	1	26
More Than Twelve Months	5,657	4,810
AFS, Total Gross Unrealized Losses	5,658	4,836
Residential mortgage backed - non-agency
Fair Value
Less Than Twelve Months	12,875	204,866
More Than Twelve Months	268,477	134,056
Gross Unrealized Losses
Less Than Twelve Months	542	11,822
More Than Twelve Months	25,117	14,868
AFS, Total Gross Unrealized Losses	25,659	26,690
Commercial mortgage backed - agency
Fair Value
Less Than Twelve Months	249	23,026
More Than Twelve Months	34,725	34,847
Gross Unrealized Losses
Less Than Twelve Months	2	562
More Than Twelve Months	1,353	1,390
AFS, Total Gross Unrealized Losses	1,355	1,952
Commercial mortgage backed - non-agency
Fair Value
Less Than Twelve Months	13,671	144,193
More Than Twelve Months	158,968	23,374
Gross Unrealized Losses
Less Than Twelve Months	103	6,171
More Than Twelve Months	8,397	2,249
AFS, Total Gross Unrealized Losses	8,500	8,420
Asset-backed
Fair Value
Less Than Twelve Months	13,080	43,472
More Than Twelve Months	58,198	50,088
Gross Unrealized Losses
Less Than Twelve Months	47	815
More Than Twelve Months	1,603	2,399
AFS, Total Gross Unrealized Losses	1,650	3,214
Other
Fair Value
Less Than Twelve Months	6,252	6,877
More Than Twelve Months	1,683	1,766
Gross Unrealized Losses
Less Than Twelve Months	1,249	623
More Than Twelve Months	316	234
AFS, Total Gross Unrealized Losses	$ 1,565	$ 857

Other Operating Expense - Schedule of Other Operating Cost and Expense, by Component (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Other Income and Expenses [Abstract]
FDIC assessment	$ 463	$ 294	$ 1,496	$ 974
Historic tax credit amortization	632	632	1,895	1,895
IT related	532	562	1,489	1,478
Consultant fees	1,322	216	2,300	726
Network expense	474	456	1,386	1,268
Directors' fees	556	453	1,400	1,490
Audit expense	167	244	687	511
Legal expense	920	(3)	1,553	584
Virginia franchise tax	671	637	1,931	1,837
Marketing expense	116	230	454	864
Other	1,564	1,435	4,451	4,059
Total	$ 7,417	$ 5,156	$ 19,042	$ 15,686

Loans - Schedule of Accounts, Notes, Loans and Financing Receivable (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	$ 2,070,616		$ 1,887,221
Allowance for credit losses	(26,111)	$ (25,919)	(21,039)	$ (20,953)	$ (23,362)	$ (31,709)
Net loans	2,044,505		1,866,182
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	1,260,653		1,109,315
Allowance for credit losses	(19,612)	(18,639)	(15,477)	(13,793)	(15,548)	(25,112)
Owner-occupied commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	123,496		127,114
Allowance for credit losses	(785)	(719)	(635)	(613)	(724)	(611)
Acquisition, construction & development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	96,535		94,450
Allowance for credit losses	(1,765)	(1,319)	(2,082)	(4,437)	(3,607)	(2,189)
Commercial & industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	61,571		53,514
Allowance for credit losses	(517)	(612)	(438)	(296)	(214)	(165)
Single family residential (1-4 units)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	525,558		499,362
Allowance for credit losses	(3,386)	(4,520)	(2,379)	(1,785)	(1,519)	(2,434)
Consumer non-real estate and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	2,803		3,466
Allowance for credit losses	$ (46)	$ (110)	$ (28)	$ (29)	$ (19)	$ (18)

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Assets
Cash and due from banks	$ 9,063	$ 9,124
Interest-earning deposits with banks	32,801	41,171
Cash and cash equivalents	41,864	50,295
Securities available-for-sale, at fair value	1,224,395	1,371,757
Restricted stock, at cost	7,247	16,443
Loans held-for-sale, at fair value	3,011	0
Loans	2,070,616	1,887,221
Allowance for credit losses	(26,111)	(21,039)
Net loans	2,044,505	1,866,182
Premises and equipment, net	57,514	53,170
Accrued interest receivable	15,597	15,481
Company-owned life insurance	94,213	92,487
Other assets	96,842	97,083
Total Assets	3,585,188	3,562,898
Liabilities
Non-interest-bearing deposits	853,385	960,692
Interest-bearing deposits	2,132,233	1,959,708
Total deposits	2,985,618	2,920,400
Borrowed funds	299,000	343,100
Accrued interest and other liabilities	29,751	25,945
Total Liabilities	3,314,369	3,289,445
Commitments and contingent liabilities (see Note 10)
Shareholders’ Equity
Preferred Stock, $1.00 par value per share; 2,000,000 shares authorized; no shares issued or outstanding	0	0
Common Stock $0.50 par value; 20,000,000 shares authorized and 8,000,000 issued at September 30, 2023, and December 31, 2022; 7,428,710 shares outstanding at September 30, 2023, and 7,425,760 shares outstanding at December 31, 2022	4,000	4,000
Additional paid-in capital	13,818	12,282
Retained earnings	426,744	424,391
Accumulated other comprehensive income (loss)	(146,159)	(139,495)
Treasury stock	(27,584)	(27,725)
Total Shareholders’ Equity	270,819	273,453
Total Liabilities and Shareholders’ Equity	$ 3,585,188	$ 3,562,898

Earnings Per Share - Narrative (Details) - shares	3 Months Ended		9 Months Ended
Earnings Per Share - Narrative (Details) - shares	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share [Abstract]
Stock awards antidilutive (in shares)	1,368	0	0	0

Nature of Business Activities and Significant Accounting Policies - Narrative (Details)		9 Months Ended	12 Months Ended
	Aug. 24, 2023 shares	Sep. 30, 2023 USD ($) branch	Dec. 31, 2022 USD ($)	Jun. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of branches \| branch		23
Allowance for credit losses		$ 26,111,000	$ 21,039,000	$ 25,919,000	$ 20,953,000	$ 23,362,000	$ 31,709,000
Credit loss liability expense (reversal)		205,000
Decrease in retained earnings, net of deferred taxes		(426,744,000)	(424,391,000)
Accrued interest receivable on loans		8,300,000
Accrued interest receivable on available-for-sale debt securities		$ 7,600,000
Summit Financial Group, Inc
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Common Stock Portion, number of Burke & Herbert stock for each share of Summit common stock converted (in shares) \| shares	0.5043
Burke & Herbert Bank & Trust Company
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Subsidiary, ownership percentage, parent		100.00%
Impact of CECL Adoption
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			4,125,000
Credit loss liability expense (reversal)			274,800
Decrease in retained earnings, net of deferred taxes			$ 3,400,000

Other Operating Expense

9 Months Ended

Sep. 30, 2023

Other Income and Expenses [Abstract]

Other Operating Expense

Other operating expense from the Consolidated Statements of Income for the three and nine months ended September 30, 2023, and September 30, 2022, is as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
FDIC assessment	$	463	$	294	$	1,496	$	974
Historic tax credit amortization	632		632		1,895		1,895
IT related	532		562		1,489		1,478
Consultant fees	1,322		216		2,300		726
Network expense	474		456		1,386		1,268
Directors' fees	556		453		1,400		1,490
Audit expense	167		244		687		511
Legal expense	920		(3)		1,553		584
Virginia franchise tax	671		637		1,931		1,837
Marketing expense	116		230		454		864
Other	1,564		1,435		4,451		4,059
Total	$	7,417	$	5,156	$	19,042	$	15,686

The Company incurred merger-related expenses of $1.7 million for the nine months ended September 30, 2023 including $1.6 million which were incurred during the three months ended September 30, 2023. These expenses are included in the consultant fees and legal expense line items detailed in other operating expenses.

Leased Property - Lessor, Operating Lease, Payment to be Received, Maturity (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Operating Leases
Remaining three months ending December 31, 2023	$ 575
2024	2,302
2025	2,265
2026	1,657
2027	1,356
Thereafter	3,783
Total undiscounted lease payments	$ 11,938

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 4,056	$ 11,137	$ 17,614	$ 30,660
Unrealized gains (losses) on securities:
Unrealized gain (loss) arising during period, net of tax of $5,392 and $11,375 for the three months ended September 30, 2023, and September 30, 2022, respectively, net of tax of $2,212 and $40,638 for the nine months ended September 30, 2023, and September 30, 2022, respectively	(20,285)	(42,793)	(8,322)	(152,878)
Reclassification adjustment for loss (gain) on securities, net of tax of $— and ($9) for the three months ended September 30, 2023, and September 30, 2022, respectively, net of tax of ($23) and $13 for the nine months ended September 30, 2023 and September 30, 2022, respectively	0	33	88	(49)
Reclassification adjustment for loss (gain) on fair value hedge, net of tax of $9 and $— for the three months ended September 30, 2023, and September 30, 2022, respectively, net of tax of ($224) and $— for the nine months ended September 30, 2023, and September 30, 2022, respectively	(32)	0	842	0
Unrealized gain (loss) on cash flow hedge:
Unrealized holding gain (loss) on cash flow hedge, net of tax of $10 and $174 for the three months ended September 30, 2023, and September 30, 2022, respectively, net of tax of $71 and $404 for the nine months ended September 30, 2023, and September 30, 2022, respectively	(38)	(654)	(267)	(1,519)
Reclassification adjustment for losses (gains) included in net income, net of tax ($99) and ($15) for the three months ended September 30, 2023, and September 30, 2022, respectively, net of tax of ($264) and $23 for the nine months ended September 30, 2023, and September 30, 2022, respectively	373	58	995	(86)
Total other comprehensive income (loss)	(19,982)	(43,356)	(6,664)	(154,532)
Comprehensive income (loss)	$ (15,926)	$ (32,219)	$ 10,950	$ (123,872)

Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share [Abstract]
Net income (in thousands)	$ 4,056	$ 11,137	$ 17,614	$ 30,660
Weighted average number of shares (in shares)	7,428,710	7,425,760	7,427,817	7,424,862
Options effect of dilutive shares (in shares)	70,568	41,933	78,692	33,707
Weighted average dilutive shares (in shares)	7,499,278	7,467,693	7,506,509	7,458,569
Basic EPS (in usd per share)	$ 0.55	$ 1.50	$ 2.37	$ 4.13
Diluted EPS (in usd per share)	$ 0.55	$ 1.49	$ 2.35	$ 4.11

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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+ Details

Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)


	Three months ended September 30, 2023
	Gains and Losses on Cash Flow Hedges		Unrealized Gains and Losses on Available-for-Sale Securities		Defined Benefit Pension Items		Accumulated Other Comprehensive Income
Beginning Balance	$	(1,196)	$	(117,950)	$	(7,031)	$	(126,177)
Net unrealized gains (losses)	(38)		(20,285)		—		(20,323)
Less: net realized (gains) losses reclassified to earnings	373		(32)		—		341
Net change in pension plan benefits	—		—		—		—
Ending Balance	$	(861)	$	(138,267)	$	(7,031)	$	(146,159)

	Three months ended September 30, 2022
	Gains and Losses on Cash Flow Hedges		Unrealized Gains and Losses on Available-for-Sale Securities		Defined Benefit Pension Items		Accumulated Other Comprehensive Income
Beginning Balance	$	(1,009)	$	(97,192)	$	(6,020)	$	(104,221)
Net unrealized gains (losses)	(654)		(42,793)		—		(43,447)
Less: net realized (gains) losses reclassified to earnings	58		33		—		91
Net change in pension plan benefits	—		—		—		—
Ending Balance	$	(1,605)	$	(139,952)	$	(6,020)	$	(147,577)


	Nine months ended September 30, 2023
	Gains and Losses on Cash Flow Hedges		Unrealized Gains and Losses on Available-for-Sale Securities		Defined Benefit Pension Items		Accumulated Other Comprehensive Income
Beginning Balance	$	(1,589)	$	(130,875)	$	(7,031)	$	(139,495)
Net unrealized gains (losses)	(267)		(8,322)		—		(8,589)
Less: net realized (gains) losses reclassified to earnings	995		930		—		1,925
Net change in pension plan benefits	—		—		—		—
Ending Balance	$	(861)	$	(138,267)	$	(7,031)	$	(146,159)

	Nine months ended September 30, 2022
	Gains and Losses on Cash Flow Hedges		Unrealized Gains and Losses on Available-for-Sale Securities		Defined Benefit Pension Items		Accumulated Other Comprehensive Income
Beginning Balance	$	—	$	12,975	$	(6,020)	$	6,955
Net unrealized gains (losses)	(1,519)		(152,878)		—		(154,397)
Less: net realized (gains) losses reclassified to earnings	(86)		(49)		—		(135)
Net change in pension plan benefits	—		—		—		—
Ending Balance	$	(1,605)	$	(139,952)	$	(6,020)	$	(147,577)


Details about Accumulated Other Comprehensive Income Components	Amount Reclassified From Accumulated Other Comprehensive Income								Affected Line Item in the Statements of Income
	Three months ended				Nine months ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Cash flow hedges:
Interest rate contracts	$	(472)	$	(73)	$	(1,259)	$	109	Interest income
Tax effect	99		15		264		(23)		Income tax expense (benefit)
Net of tax	$	(373)	$	(58)	$	(995)	$	86

Available-for-sale securities:
Realized gains (losses) on securities	$	—	$	(42)	$	(111)	$	62	Net gains/(losses) on securities
Realized gains (losses) on basis adjustment for fair value hedges	40		—		(1,066)		—		Interest income
Tax effect	(8)		9		247		(13)		Income tax expense (benefit)
Net of tax	$	32	$	(33)	$	(930)	$	49

Total reclassifications, net of tax	$	(341)	$	(91)	$	(1,925)	$	135	Net income

Leased Property - Lessor, Lease Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating lease income	$ 576	$ 233	$ 1,726	$ 319
Total lease income	$ 576	$ 233	$ 1,726	$ 319

Loans - Narrative (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unamortized loan fee	$ 3,500	$ 3,300
Loans, net	2,044,505	1,866,182
Paycheck Protection Program
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net	$ 3,800	$ 7,900

Share-Based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation

The Company has a share-based incentive plan described below that allows it to offer a variety of equity compensation awards subject to approval. Total compensation cost that has been charged against income for the share-based awards granted was $610.1 thousand and $492.7 thousand for the three months ended September 30, 2023, and September 30, 2022, respectively. The total income tax benefit was $128.1 thousand and $103.5 thousand for the three months ended September 30, 2023, and September 30, 2022, respectively.

Total compensation cost that has been charged against income for the share-based awards granted was $1.8 million and $1.5 million for the nine months ended September 30, 2023, and September 30, 2022, respectively. The total income tax benefit was $377.6 thousand and $313.3 thousand for the nine months ended September 30, 2023, and September 30, 2022, respectively.

2019 Stock Incentive Plan

In 2019, the Company’s Stock Incentive Plan (“2019 SIP”) was approved by the Bank’s Board of Directors. The 2019 SIP provides for the issuance of share-based awards to directors and employees of the Company. The 2019 SIP authorized 240,000 units to be issued, and the Company has a practice of using shares held as treasury stock to satisfy these share-based awards. Each unit represents a contingent right to receive one common share or an equivalent amount of cash, or a combination of the two, at the discretion of the Company. Currently, we have a sufficient number of treasury shares to satisfy outstanding equity awards.

Under the 2019 SIP, the Company has issued restricted stock unit (“RSU”) awards that are both time-based and performance-based. Each RSU award will indicate the number of shares, the conditions (e.g., service, performance, and/or a combination), and the grant date. Compensation expense is recognized over the vesting period of the awards based on the fair value of the award at grant date. A total of 24,705 and 13,160 shares were issued during the nine months ended September 30, 2023, and September 30, 2022, respectively.

For time-based RSUs, the fair value was determined by using the closing stock price on the date prior to the grant date. These RSUs vest over three to five years.

The Board, from time to time, approves performance-based RSU awards that may be earned between a three to five year performance period. Whether units are earned at the end of the performance period will be determined based on the achievement of a market capitalization target over the performance period. If the condition is not achieved, the grant recipient will receive 50% of the units upon fulfilling the required service time. If the performance condition is achieved, the grant recipient will receive 100% of the units granted. The market capitalization target will be determined by the Board.

The fair value for performance-based RSU awards was determined by using a Monte Carlo simulation analysis to estimate the achievement of the market capitalization target determined by the Board. The Monte Carlo simulation analysis required the following inputs: (1) expected term, (2) expected volatility, (3) risk-free rate, and (4) dividend yield. The expected term was based on the stated performance period. Management used the expected volatility from a peer group. The risk-free interest rate is based on the U.S. Treasury yield curve over the performance period. The dividend yield assumption was based on historical and anticipated dividend payouts.

The following is a summary of the Company’s RSU awards:


Non-vested Shares	Shares	Weighted-Average Grant-Date Fair Value
Non-vested at December 31, 2022	122,440	$	48.00
Granted	24,705	67.81
Vested	(4,560)	54.07
Forfeited	—	—
Non-vested at September 30, 2023	142,585	$	51.24

As of September 30, 2023, there was $3.5 million of total unrecognized compensation costs related to non-vested shares granted under the 2019 SIP. The cost is expected to be recognized over a weighted average period of 1.63 years.

2023 Stock Incentive Plan

In 2023, a new stock incentive plan (“2023 SIP”) was approved by the Board of directors and shareholders. Upon the plan’s shareholder approval date of March 30, 2023, no further share-based awards will be issued under the 2019 SIP. The plan provides for the issuance of share-based awards to directors and employees of the Company. The 2023 SIP authorized the issuance of 250,000 shares, subject to an annual increase in available shares. As of September 30, 2023, no share-based awards have been issued under the 2023 SIP.

Loans (Tables)

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable

Loan balances at September 30, 2023, and December 31, 2022, by portfolio segment were as follows (in thousands):


	September 30, 2023		December 31, 2022
Commercial real estate	$	1,260,653	$	1,109,315
Owner-occupied commercial real estate	123,496		127,114
Acquisition, construction & development	96,535		94,450
Commercial & industrial	61,571		53,514
Single family residential (1-4 units)	525,558		499,362
Consumer non-real estate and other	2,803		3,466
Loans, gross	2,070,616		1,887,221
Allowance for credit losses	(26,111)		(21,039)
Loans, net	$	2,044,505	$	1,866,182

Derivatives - Schedule of Derivative Instruments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of gain or (loss) reclassified from AOCI into income	$ (473)	$ (74)	$ (1,259)	$ 108
Interest Income
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded.	(433)	(74)	(1,549)	108
Interest Income \| Interest Rate Products
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Hedging items	40	0	(1,066)	0
Derivatives designated as hedging instruments	0	0	776	0
Amount of gain or (loss) reclassified from AOCI into income	(473)	(74)	(1,259)	108
Amount of gain or (loss) reclassified from AOCI into income as a result that a forecasted transaction is no longer probable of occurring	0	0	0	0
Interest Expense
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded.	0	0	0	0
Interest Expense \| Interest Rate Products
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Hedging items	0	0	0	0
Derivatives designated as hedging instruments	0	0	0	0
Amount of gain or (loss) reclassified from AOCI into income	0	0	0	0
Amount of gain or (loss) reclassified from AOCI into income as a result that a forecasted transaction is no longer probable of occurring	$ 0	$ 0	$ 0	$ 0

Advances and Other Borrowings - Narrative (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Short-Term Debt [Line Items]
Borrowed funds	$ 299,000	$ 343,100
Outstanding amount for short-term debt	302,100	269,500
Unused funds for short-term debt	883,500
Securities and loans pledged	$ 778,000	$ 698,100
Minimum
Short-Term Debt [Line Items]
Interest rate for short-term debt	4.38%	4.13%
Maximum
Short-Term Debt [Line Items]
Interest rate for short-term debt	5.57%	4.57%

Share-Based Compensation - Share-Based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity (Details) - Restricted Stock Units (RSUs)	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Shares
Beginning nonvested (in shares) \| shares	122,440
Granted (in shares) \| shares	24,705
Vested (in shares) \| shares	(4,560)
Forfeited (in shares) \| shares	0
Ending nonvested (in shares) \| shares	142,585
Weighted-Average Grant-Date Fair Value
Beginning nonvested (in usd per share) \| $ / shares	$ 48.00
Granted (in usd per share) \| $ / shares	67.81
Vested (in usd per share) \| $ / shares	54.07
Forfeited (in usd per share) \| $ / shares	0
Ending nonvested (in usd per share) \| $ / shares	$ 51.24

Deposits - Narrative (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financial Services, Banking and Thrift [Abstract]
Time deposits, at or above FDIC insurance limit	$ 65,500	$ 32,600
Brokered time deposits	389,000	100,300
Interest bearing deposit, certificates of deposits	21,800	11,700
Time deposits, individual retirement account	30,900	36,900
Deposit liabilities reclassified as loans receivable	$ 197	$ 503

Commitment and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Interest rate lock commitments

Commitments to fund consumer mortgage loans (interest rate lock commitments) to be sold into the secondary market are defined as derivatives under GAAP. The Company enters into best effort forward commitments for the future delivery of mortgage loans to third-party investors. The Company has elected the fair value option (“FVO”) on both the best-efforts forward commitments and the consumer mortgage loans held-for-sale in order to economically hedge the effect of changes in interest rates resulting from the commitment to fund the loans.

Interest Rate lock commitments are not designated as hedging instruments, and therefore, changes in the fair value of these free-standing derivative instruments are reported as non-interest income.

Credit extension commitments

The Company’s financial statements do not reflect various financial instruments which arise in the normal course of business and which involve elements of credit risk, interest rate risk, and liquidity risk. These financial instruments include commitments to extend credit, commercial letters of credit, and revolving lines of credit.

Many of our lending relationships contain both funded and unfunded elements. The funded portion is reflected on our balance sheet. The unfunded portion of these commitments is not recorded on our balance sheet until a draw is made under the loan facility. Since many of our commitments to extend credit may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash flow requirements.

A summary of the contractual amounts of the Company’s financial instruments outstanding at September 30, 2023, and December 31, 2022, is as follows (in thousands):


	September 30, 2023		December 31, 2022
Commitments to extend credit	$	269,097	$	291,265
Commercial letters of credit	10,443		8,539

Commitments to extend credit and commercial letters of credit all include exposure to some credit loss in the event of nonperformance of the customer. The Company’s credit policies and procedures for credit commitments and financial guarantees are the same as those for extensions of credit that are recorded on the Consolidated Balance Sheets. Many of these instruments have fixed maturity dates, and many of them will expire without being drawn upon; accordingly, they do not generally present any significant liquidity risk to the Company.

Allowance for credit losses - off-balance-sheet credit exposures

The Company recorded a provision for credit losses on unfunded commitments of $35.0 thousand for the three months ended September 30, 2023, and a recapture of credit losses on unfunded commitments of $69.8 thousand for the nine months ended September 30, 2023. The ACL on off-balance-sheet credit totaled $205.0 thousand at September 30, 2023, and is included in accrued interest and other liabilities on the accompanying Consolidated Balance Sheets.

Litigation

The Company is a party to litigation, claims, and proceedings arising in the normal course of business that are ordinary and routine to the nature of the Company’s business and operations. Management, after consultation with legal counsel, believes that the liabilities, if any, arising from any currently pending or threatened litigation, claims, or proceedings will not be material to the Company’s financial position.

Derivatives - Schedule of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of Gain or (Loss) Recognized in OCI	$ (48)	$ (828)	$ (337)	$ (1,924)
Amount of Gain or (Loss) Reclassified from AOCI into Income	(473)	(74)	(1,259)	108
Amount of Gain or (Loss)	0	0	0	0
Interest Rate Products
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of Gain or (Loss) Recognized in OCI	(48)	(828)	(337)	(1,924)
Amount of Gain or (Loss)	0	0	0	0
Interest Income
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of Gain or (Loss) Reclassified from AOCI into Income	(473)	(74)	(1,259)	108
Amount of Gain or (Loss)	$ 0	$ 0	$ 0	$ 0

Fair Value Measurements - Schedule of Fair Value, Assets and Liabilities, Nonrecurring (Details) - Nonrecurring - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned	$ 0	$ 0
Commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	301	290
Owner-occupied commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	1,337	1,295
Acquisition, construction & development
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Commercial & industrial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Single family residential (1-4 units)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	1,838	911
Consumer non-real estate and other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned	0	0
Level 1 \| Commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Level 1 \| Owner-occupied commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Level 1 \| Acquisition, construction & development
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Level 1 \| Commercial & industrial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Level 1 \| Single family residential (1-4 units)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Level 1 \| Consumer non-real estate and other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned	0	0
Level 2 \| Commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Level 2 \| Owner-occupied commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Level 2 \| Acquisition, construction & development
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Level 2 \| Commercial & industrial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Level 2 \| Single family residential (1-4 units)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Level 2 \| Consumer non-real estate and other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned	0	0
Level 3 \| Commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	301	290
Level 3 \| Owner-occupied commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	1,337	1,295
Level 3 \| Acquisition, construction & development
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Level 3 \| Commercial & industrial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Level 3 \| Single family residential (1-4 units)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	1,838	911
Level 3 \| Consumer non-real estate and other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	$ 0	$ 0

Commitment and Contingencies - Narrative (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Derivatives, Fair Value [Line Items]
Credit loss liability expense (reversal)		$ 205,000
Unfunded Loan Commitment
Derivatives, Fair Value [Line Items]
Credit loss liability expense (reversal)	$ 35,000	$ (69,800)

Nature of Business Activities and Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Schedule of Impact from Adoption of CECL


	January 1, 2023
	Reserves under Incurred Loss Model		Reserves under CECL Model		Impact of CECL Adoption
Financial Assets:
Commercial real estate	$	15,477	$	18,163	$	2,686
Owner-occupied commercial real estate	635		629		(6)
Acquisition, construction & development	2,082		1,442		(640)
Commercial & industrial	438		675		237
Single family residential (1-4 units)	2,379		4,040		1,661
Consumer non-real estate and other	28		215		187
Unallocated reserve	—		—		—
Allowance for credit losses on loans	$	21,039	$	25,164	$	4,125
Financial Liabilities:
Allowance for credit losses on off-balance sheet credit exposure	$	—	$	275	$	275

Securities - Narrative (Details)	9 Months Ended
Securities - Narrative (Details)	Sep. 30, 2023 USD ($) security	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amortized Cost	$ 1,400,481,000		$ 1,537,420,000
Fair Value	1,224,395,000		1,371,757,000
Realized tax expense (benefit) gain (loss)	$ 23,500	$ (13,200)
Securities unrealized loss \| security	403
Restricted stock, at cost	$ 7,247,000		16,443,000
Asset Pledged as Collateral
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amortized Cost	831,000,000		637,100,000
Fair Value	709,300,000		552,500,000
Community Bankers' Bank
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Restricted stock, at cost	50,000		50,000
U.S. Treasuries and government agencies
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amortized Cost	197,310,000		198,154,000
Fair Value	$ 172,982,000		174,993,000
Securities in unrealized loss positions \| security	12
Residential mortgage backed - agency
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amortized Cost	$ 47,494,000		57,883,000
Fair Value	$ 41,836,000		53,061,000
Securities in unrealized loss positions \| security	16
Commercial mortgage backed - agency
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Securities in unrealized loss positions \| security	17
State and Municipal Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Securities in unrealized loss positions \| security	203
Residential mortgage backed - non-agency
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amortized Cost	$ 307,763,000		365,983,000
Fair Value	$ 282,108,000		339,295,000
Securities in unrealized loss positions \| security	96
Commercial mortgage backed - non-agency
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amortized Cost	$ 181,844,000		191,709,000
Fair Value	$ 173,344,000		183,299,000
Securities in unrealized loss positions \| security	33
Asset-backed
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amortized Cost	$ 82,811,000		101,791,000
Fair Value	$ 81,172,000		98,626,000
Securities in unrealized loss positions \| security	23
Other
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amortized Cost	$ 9,500,000		9,500,000
Fair Value	$ 7,935,000		$ 8,643,000
Securities in unrealized loss positions \| security	3

Securities (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Debt Securities, Available-for-Sale

The carrying amount of AFS securities and their approximate fair values at September 30, 2023, and December 31, 2022, are summarized as follows (in thousands):


	September 30, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities Available-for-Sale
U.S. Treasuries and government agencies	$	197,310	$	—	$	24,328	$	172,982
Obligations of states and municipalities	536,885		7		107,413		429,479
Residential mortgage backed - agency	47,494		—		5,658		41,836
Residential mortgage backed - non-agency	307,763		4		25,659		282,108
Commercial mortgage backed - agency	36,874		20		1,355		35,539
Commercial mortgage backed - non-agency	181,844		—		8,500		173,344
Asset-backed	82,811		11		1,650		81,172
Other	9,500		—		1,565		7,935
Total	$	1,400,481	$	42	$	176,128	$	1,224,395


	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities Available-for-Sale
U.S. Treasuries and government agencies	$	198,154	$	—	$	23,161	$	174,993
Obligations of states and municipalities	550,590		12		96,695		453,907
Residential mortgage backed - agency	57,883		14		4,836		53,061
Residential mortgage backed - non-agency	365,983		2		26,690		339,295
Commercial mortgage backed - agency	61,810		75		1,952		59,933
Commercial mortgage backed - non-agency	191,709		10		8,420		183,299
Asset-backed	101,791		49		3,214		98,626
Other	9,500		—		857		8,643
Total	$	1,537,420	$	162	$	165,825	$	1,371,757

Expected maturities may differ from contractual maturities because borrowers have the right to call or prepay some obligations with or without call or prepayment penalties).


	September 30, 2023
	Amortized Cost
	One Year or Less		One to Five Years		Five to Ten Years		After Ten Years		Total
Securities Available-for-Sale
U.S. Treasuries and government agencies	$	29,802	$	78,123	$	89,385	$	—	$	197,310
Obligations of states and municipalities	370		15,989		234,600		285,926		536,885
Residential mortgage backed - agency	42		808		46,644		—		47,494
Residential mortgage backed - non-agency	72,280		137,888		95,182		2,413		307,763
Commercial mortgage backed - agency	165		19,531		17,178		—		36,874
Commercial mortgage backed - non-agency	13,613		163,088		5,143		—		181,844
Asset-backed	8,247		41,248		33,316		—		82,811
Other	—		—		9,500		—		9,500
Total	$	124,519	$	456,675	$	530,948	$	288,339	$	1,400,481


	September 30, 2023
	Fair Value
	One Year or Less		One to Five Years		Five to Ten Years		After Ten Years		Total
Securities Available-for-Sale
U.S. Treasuries and government agencies	$	29,203	$	67,674	$	76,105	$	—	$	172,982
Obligations of states and municipalities	370		14,290		195,558		219,261		429,479
Residential mortgage backed - agency	42		778		41,016		—		41,836
Residential mortgage backed - non-agency	69,814		129,486		80,461		2,347		282,108
Commercial mortgage backed - agency	165		18,990		16,384		—		35,539
Commercial mortgage backed - non-agency	13,220		156,187		3,937		—		173,344
Asset-backed	8,178		40,695		32,299		—		81,172
Other	—		—		7,935		—		7,935
Total	$	120,992	$	428,100	$	453,695	$	221,608	$	1,224,395

Schedule of Realized Gain (Loss)

The gross realized gains, realized losses, and proceeds from the sales of securities for the nine months ended September 30, 2023, and September 30, 2022, were as follows (in thousands):


	September 30, 2023		September 30, 2022
Gross realized gains	$	772	$	1,117
Gross realized losses	(884)		(1,054)
Proceeds from sales of securities	77,780		142,475

Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value

AFS securities in a continuous unrealized loss position for less than twelve months and more than twelve months are as follows (in thousands):


	September 30, 2023
	Less Than Twelve Months				More Than Twelve Months
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Total Unrealized Losses
Securities Available-for-Sale
U.S. Treasuries and government agencies	$	—	$	—	$	172,982	$	24,328	$	24,328
Obligations of states and municipalities	1,708		125		424,139		107,288		107,413
Residential mortgage backed - agency	37		1		41,798		5,657		5,658
Residential mortgage backed - non-agency	12,875		542		268,477		25,117		25,659
Commercial mortgage backed - agency	249		2		34,725		1,353		1,355
Commercial mortgage backed - non-agency	13,671		103		158,968		8,397		8,500
Asset-backed	13,080		47		58,198		1,603		1,650
Other	6,252		1,249		1,683		316		1,565
Total	$	47,872	$	2,069	$	1,160,970	$	174,059	$	176,128


	December 31, 2022
	Less Than Twelve Months				More Than Twelve Months
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Total Unrealized Losses
Securities Available-for-Sale
U.S. Treasuries and government agencies	$	28,399	$	1,131	$	146,594	$	22,030	$	23,161
Obligations of states and municipalities	128,373		12,378		320,287		84,317		96,695
Residential mortgage backed - agency	7,258		26		41,975		4,810		4,836
Residential mortgage backed - non-agency	204,866		11,822		134,056		14,868		26,690
Commercial mortgage backed - agency	23,026		562		34,847		1,390		1,952
Commercial mortgage backed - non-agency	144,193		6,171		23,374		2,249		8,420
Asset-backed	43,472		815		50,088		2,399		3,214
Other	6,877		623		1,766		234		857
Total	$	586,464	$	33,528	$	752,987	$	132,297	$	165,825

- Definition

Tabular disclosure of investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale).

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-9

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (aa)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (aaa)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

+ Details

Allowance for Credit Losses - Impaired Loans by Portfolio Segment (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
With no related allowance recorded:
Recorded Investment	$ 6,335
Unpaid Principal Balance	6,970
Average Recorded Investment	6,422
Interest Income Recognized	310
With an allowance recorded:
Recorded Investment	2,735
Unpaid Principal Balance	2,869
Related Allowance	239
Average Recorded Investment	2,803
Interest Income Recognized	154
Commercial real estate
With no related allowance recorded:
Recorded Investment	0
Unpaid Principal Balance	0
Average Recorded Investment	0
Interest Income Recognized	0
With an allowance recorded:
Recorded Investment	331
Unpaid Principal Balance	331
Related Allowance	41
Average Recorded Investment	350
Interest Income Recognized	23
Owner-occupied commercial real estate
With no related allowance recorded:
Recorded Investment	1,184
Unpaid Principal Balance	1,394
Average Recorded Investment	1,291
Interest Income Recognized	97
With an allowance recorded:
Recorded Investment	1,397
Unpaid Principal Balance	1,397
Related Allowance	102
Average Recorded Investment	1,420
Interest Income Recognized	74
Acquisition, construction & development
With no related allowance recorded:
Recorded Investment	0
Unpaid Principal Balance	0
Average Recorded Investment	0
Interest Income Recognized	0
With an allowance recorded:
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	0
Commercial & industrial
With no related allowance recorded:
Recorded Investment	0
Unpaid Principal Balance	0
Average Recorded Investment	0
Interest Income Recognized	0
With an allowance recorded:
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	0
Single family residential (1-4 units)
With no related allowance recorded:
Recorded Investment	5,151
Unpaid Principal Balance	5,576
Average Recorded Investment	5,131
Interest Income Recognized	213
With an allowance recorded:
Recorded Investment	1,007
Unpaid Principal Balance	1,141
Related Allowance	96
Average Recorded Investment	1,033
Interest Income Recognized	57
Consumer non-real estate and other
With no related allowance recorded:
Recorded Investment	0
Unpaid Principal Balance	0
Average Recorded Investment	0
Interest Income Recognized	0
With an allowance recorded:
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	$ 0

Commitment and Contingencies (Tables)

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Fair Value, off-Balance-Sheet Risks

A summary of the contractual amounts of the Company’s financial instruments outstanding at September 30, 2023, and December 31, 2022, is as follows (in thousands):


	September 30, 2023		December 31, 2022
Commitments to extend credit	$	269,097	$	291,265
Commercial letters of credit	10,443		8,539

Advances and Other Borrowings -Schedule of Short-Term Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Advance from Federal Home Loan Bank, Fiscal Year Maturity [Abstract]
Borrowed funds	$ 299,000	$ 343,100
Short-Term Debt
Advance from Federal Home Loan Bank, Fiscal Year Maturity [Abstract]
Due in 2023	49,000
Due in 2024	250,000
Borrowed funds	$ 299,000

Allowance for Credit Losses - Aging and Non-Accrual Loans (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	$ 2,070,616	$ 1,887,221
90 Days Past Due & Still Accruing	0	0
Non-accrual loans	2,856	5,497
Total Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	777	2,107
30 - 59 Days Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	3	1,403
60 - 89 Days Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	42	158
90 Days or More Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	732	546
Current Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	2,069,839	1,885,114
Commercial real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	1,260,653	1,109,315
90 Days Past Due & Still Accruing	0	0
Non-accrual loans	0	0
Commercial real estate \| Total Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	6	0
Commercial real estate \| 30 - 59 Days Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	0	0
Commercial real estate \| 60 - 89 Days Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	0	0
Commercial real estate \| 90 Days or More Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	6	0
Commercial real estate \| Current Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	1,260,647	1,109,315
Owner-occupied commercial real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	123,496	127,114
90 Days Past Due & Still Accruing	0	0
Non-accrual loans	1,028	1,184
Owner-occupied commercial real estate \| Total Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	667	0
Owner-occupied commercial real estate \| 30 - 59 Days Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	0	0
Owner-occupied commercial real estate \| 60 - 89 Days Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	0	0
Owner-occupied commercial real estate \| 90 Days or More Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	667	0
Owner-occupied commercial real estate \| Current Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	122,829	127,114
Acquisition, construction & development
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	96,535	94,450
90 Days Past Due & Still Accruing	0	0
Non-accrual loans	0	0
Acquisition, construction & development \| Total Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	0	0
Acquisition, construction & development \| 30 - 59 Days Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	0	0
Acquisition, construction & development \| 60 - 89 Days Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	0	0
Acquisition, construction & development \| 90 Days or More Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	0	0
Acquisition, construction & development \| Current Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	96,535	94,450
Commercial & industrial
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	61,571	53,514
90 Days Past Due & Still Accruing	0	0
Non-accrual loans	0	0
Commercial & industrial \| Total Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	0	0
Commercial & industrial \| 30 - 59 Days Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	0	0
Commercial & industrial \| 60 - 89 Days Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	0	0
Commercial & industrial \| 90 Days or More Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	0	0
Commercial & industrial \| Current Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	61,571	53,514
Single family residential (1-4 units)
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	525,558	499,362
90 Days Past Due & Still Accruing	0	0
Non-accrual loans	1,828	4,313
Single family residential (1-4 units) \| Total Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	98	2,103
Single family residential (1-4 units) \| 30 - 59 Days Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	0	1,403
Single family residential (1-4 units) \| 60 - 89 Days Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	39	154
Single family residential (1-4 units) \| 90 Days or More Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	59	546
Single family residential (1-4 units) \| Current Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	525,460	497,259
Consumer non-real estate and other
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	2,803	3,466
90 Days Past Due & Still Accruing	0	0
Non-accrual loans	0	0
Consumer non-real estate and other \| Total Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	6	4
Consumer non-real estate and other \| 30 - 59 Days Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	3	0
Consumer non-real estate and other \| 60 - 89 Days Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	3	4
Consumer non-real estate and other \| 90 Days or More Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	0	0
Consumer non-real estate and other \| Current Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	$ 2,797	$ 3,462

Commitment and Contingencies - Schedule of Fair Value, off-Balance-Sheet Risks (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Commitments to extend credit
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Financial instrument contractual amount	$ 269,097	$ 291,265
Commercial letters of credit
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Financial instrument contractual amount	$ 10,443	$ 8,539

Fair Value Measurements - Fair Value Measurement Inputs and Valuation Techniques (Details) - Level 3 - Nonrecurring - Discounted cash flow analysis $ in Thousands	Sep. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	$ 3,476	$ 2,496
Minimum \| Market rate for borrower
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans, measurement input	0.036	0.045
Maximum \| Market rate for borrower
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans, measurement input	0.085	0.060
Weighted Average \| Market rate for borrower
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans, measurement input	0.053	0.052

Securities - Debt Securities, Available-for-Sale (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amortized Cost	$ 1,400,481	$ 1,537,420
Gross Unrealized Gains	42	162
Gross Unrealized Losses	176,128	165,825
Fair Value	1,224,395	1,371,757
U.S. Treasuries and government agencies
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amortized Cost	197,310	198,154
Gross Unrealized Gains	0	0
Gross Unrealized Losses	24,328	23,161
Fair Value	172,982	174,993
Obligations of states and municipalities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amortized Cost	536,885	550,590
Gross Unrealized Gains	7	12
Gross Unrealized Losses	107,413	96,695
Fair Value	429,479	453,907
Residential mortgage backed - agency
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amortized Cost	47,494	57,883
Gross Unrealized Gains	0	14
Gross Unrealized Losses	5,658	4,836
Fair Value	41,836	53,061
Residential mortgage backed - non-agency
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amortized Cost	307,763	365,983
Gross Unrealized Gains	4	2
Gross Unrealized Losses	25,659	26,690
Fair Value	282,108	339,295
Commercial mortgage backed - agency
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amortized Cost	36,874	61,810
Gross Unrealized Gains	20	75
Gross Unrealized Losses	1,355	1,952
Fair Value	35,539	59,933
Commercial mortgage backed - non-agency
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amortized Cost	181,844	191,709
Gross Unrealized Gains	0	10
Gross Unrealized Losses	8,500	8,420
Fair Value	173,344	183,299
Asset-backed
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amortized Cost	82,811	101,791
Gross Unrealized Gains	11	49
Gross Unrealized Losses	1,650	3,214
Fair Value	81,172	98,626
Other
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amortized Cost	9,500	9,500
Gross Unrealized Gains	0	0
Gross Unrealized Losses	1,565	857
Fair Value	$ 7,935	$ 8,643

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net income (in thousands)	$ 4,056	$ 11,137	$ 17,614	$ 30,660

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Securities - Schedule of Realized Gain (Loss) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Fair Value Disclosures [Abstract]
Gross realized gains	$ 772	$ 1,117
Gross realized losses	(884)	(1,054)
Proceeds from sales of securities	$ 77,780	$ 142,475

Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Consolidated Statements of Income - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Interest income
Loans, including fees	$ 26,425	$ 18,618	$ 74,485	$ 52,486
Taxable securities	8,909	8,171	28,130	20,101
Tax-exempt securities	1,376	2,334	4,243	7,224
Other interest income	562	142	1,858	248
Total interest income	37,272	29,265	108,716	80,059
Interest expense
Deposits	11,277	954	26,708	1,723
Borrowed funds	3,078	1,614	10,495	2,506
Other interest expense	28	17	58	48
Total interest expense	14,383	2,585	37,261	4,277
Net interest income	22,889	26,680	71,455	75,782
Provision for (recapture of) credit losses	235	(2,388)	964	(7,564)
Net interest income after credit loss expense	22,654	29,068	70,491	83,346
Non-interest income
Net gains/(losses) on securities	(1)	(41)	(112)	63
Income from company-owned life insurance	589	555	1,720	1,634
Other non-interest income	764	683	2,565	2,050
Total non-interest income	4,289	4,261	13,128	12,872
Non-interest expense
Salaries and wages	9,867	10,094	29,283	29,240
Pensions and other employee benefits	2,242	2,017	7,116	5,957
Occupancy	1,462	1,151	4,464	4,306
Equipment rentals, depreciation and maintenance	1,435	1,534	4,231	4,296
Other operating	7,417	5,156	19,042	15,686
Total non-interest expense	22,423	19,952	64,136	59,485
Income before income taxes	4,520	13,377	19,483	36,733
Income tax expense	464	2,240	1,869	6,073
Net income	$ 4,056	$ 11,137	$ 17,614	$ 30,660
Earnings per common share:
Basic (in usd per share)	$ 0.55	$ 1.50	$ 2.37	$ 4.13
Diluted (in usd per share)	$ 0.55	$ 1.49	$ 2.35	$ 4.11
Fiduciary and wealth management
Non-interest income
Revenue from contract with customer	$ 1,354	$ 1,328	$ 3,996	$ 3,995
Service charges and fees
Non-interest income
Revenue from contract with customer	$ 1,583	$ 1,736	$ 4,959	$ 5,130

Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income (in thousands)	$	4,056	$	11,137	$	17,614	$	30,660

Weighted average number of shares	7,428,710		7,425,760		7,427,817		7,424,862
Options effect of dilutive shares	70,568		41,933		78,692		33,707
Weighted average dilutive shares	7,499,278		7,467,693		7,506,509		7,458,569

Basic EPS	$	0.55	$	1.50	$	2.37	$	4.13
Diluted EPS	0.55		1.49		2.35		4.11

Fair Value Measurements - Fair Value Disclosure of Asset and Liability Not Measured at Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financial assets
Cash and due from banks	$ 9,063	$ 9,124
Carrying Amount
Financial assets
Cash and due from banks	9,063	9,124
Loans, net	2,044,505	1,866,182
Accrued interest	15,597	15,481
Financial liabilities
Other borrowed funds	299,000	343,100
Accrued interest	6,348	1,452
Carrying Amount \| Non-interest-bearing
Financial liabilities
Deposit liabilities	853,385	960,692
Carrying Amount \| Interest-bearing
Financial liabilities
Deposit liabilities	2,132,233	1,959,708
Carrying Amount \| Interest-earning deposits with banks
Financial assets
Interest-earning deposits with banks	32,801	41,171
Fair Value Amount
Financial assets
Cash and due from banks	9,063	9,124
Loans, net	1,882,989	1,768,903
Accrued interest	15,597	15,481
Financial liabilities
Other borrowed funds	298,133	342,904
Accrued interest	6,348	1,452
Fair Value Amount \| Non-interest-bearing
Financial liabilities
Deposit liabilities	853,385	960,692
Fair Value Amount \| Interest-bearing
Financial liabilities
Deposit liabilities	2,132,233	1,951,227
Fair Value Amount \| Interest-earning deposits with banks
Financial assets
Interest-earning deposits with banks	32,801	41,171
Level 1 \| Fair Value Amount
Financial assets
Cash and due from banks	9,063	9,124
Loans, net	0	0
Accrued interest	0	0
Financial liabilities
Other borrowed funds	0	0
Accrued interest	0	0
Level 1 \| Fair Value Amount \| Non-interest-bearing
Financial liabilities
Deposit liabilities	0	0
Level 1 \| Fair Value Amount \| Interest-bearing
Financial liabilities
Deposit liabilities	0	0
Level 1 \| Fair Value Amount \| Interest-earning deposits with banks
Financial assets
Interest-earning deposits with banks	32,801	41,171
Level 2 \| Fair Value Amount
Financial assets
Cash and due from banks	0	0
Loans, net	0	0
Accrued interest	15,597	15,481
Financial liabilities
Other borrowed funds	298,133	342,904
Accrued interest	6,348	1,452
Level 2 \| Fair Value Amount \| Non-interest-bearing
Financial liabilities
Deposit liabilities	853,385	960,692
Level 2 \| Fair Value Amount \| Interest-bearing
Financial liabilities
Deposit liabilities	2,132,233	1,951,227
Level 2 \| Fair Value Amount \| Interest-earning deposits with banks
Financial assets
Interest-earning deposits with banks	0	0
Level 3 \| Fair Value Amount
Financial assets
Cash and due from banks	0	0
Loans, net	1,882,989	1,768,903
Accrued interest	0	0
Financial liabilities
Other borrowed funds	0	0
Accrued interest	0	0
Level 3 \| Fair Value Amount \| Non-interest-bearing
Financial liabilities
Deposit liabilities	0	0
Level 3 \| Fair Value Amount \| Interest-bearing
Financial liabilities
Deposit liabilities	0	0
Level 3 \| Fair Value Amount \| Interest-earning deposits with banks
Financial assets
Interest-earning deposits with banks	$ 0	$ 0

Advances and Other Borrowings

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Advances and Other Borrowings

The Company had borrowings of $299.0 million and $343.1 million at September 30, 2023, and December 31, 2022, respectively. At September 30, 2023, the interest rate on this debt ranged from 4.38% to 5.57%. At December 31, 2022, the interest rate on this debt ranged from 4.13% to 4.57%. The average balance outstanding during the nine months ending September 30, 2023, and the year ending December 31, 2022, was $302.1 million and $269.5 million, respectively. The Company’s short-term borrowings from time to time may consist of advances from the FHLB of Atlanta, unsecured lines from Correspondent Banks, and secured lines from the Federal Reserve Discount Window.

The Company has available lines of credit with the FHLB of Atlanta and unsecured federal funds lines of credit from correspondent banking relationships. Through these sources, the Company has unused capacity of $883.5 million in remaining borrowing capacity as of September 30, 2023. The advances on credit lines are secured by both securities and loans. The lendable collateral value of securities and loans pledged against available lines of credit as of September 30, 2023, and December 31, 2022, was $778.0 million and $698.1 million, respectively. As of September 30, 2023, all of the Company’s borrowings will mature within one calendar year.

The contractual maturities of these borrowings as of September 30, 2023, are as follows (in thousands):


Due in 2023	$	49,000
Due in 2024	250,000
Total	$	299,000

- 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

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

Accumulated Other Comprehensive Income (Loss) - Reclassification out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total pre-tax amount	$ 37,272	$ 29,265	$ 108,716	$ 80,059
Tax effect	(464)	(2,240)	(1,869)	(6,073)
Net income	4,056	11,137	17,614	30,660
Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net income	(341)	(91)	(1,925)	135
Reclassification out of Accumulated Other Comprehensive Income \| Gains and Losses on Cash Flow Hedges
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total pre-tax amount	(472)	(73)	(1,259)	109
Tax effect	99	15	264	(23)
Net income	(373)	(58)	(995)	86
Reclassification out of Accumulated Other Comprehensive Income \| Unrealized Gains and Losses on Available-for-Sale Securities
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total pre-tax amount	40	0	(1,066)	0
Realized gains (losses) on securities	0	(42)	(111)	62
Tax effect	(8)	9	247	(13)
Net income	$ 32	$ (33)	$ (930)	$ 49

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

- Definition

Amount of operating interest income, including, but not limited to, amortization and accretion of premiums and discounts on securities.

+ References + Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Derivatives (Tables)

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value


	September 30, 2023
	Balance Sheet Location	Notional Amount		Fair Value
Derivatives designated as hedges:
Interest rate swaps related to cash flow hedges	Other liabilities	$	50,000	$	1,446


Derivatives not designated as hedges:
Interest rate swaps related to customer loans	Other assets	$	72,836	$	2,732
Interest rate swaps related to customer loans	Other liabilities	72,836		2,732


	December 31, 2022
	Balance Sheet Location	Notional Amount		Fair Value
Derivatives designated as hedges:
Interest rate swaps related to cash flow hedges	Other liabilities	$	50,000	$	2,254


Derivatives not designated as hedges:
Interest rate swaps related to customer loans	Other assets	$	34,674	$	1,311
Interest rate swaps related to customer loans	Other liabilities	34,674		1,311

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)

The table below presents the effect of cash flow hedge accounting on AOCI for the three months ended September 30, 2023, and September 30, 2022, as follows (in thousands):


Derivatives in Cash Flow Hedging Relationships	September 30, 2023						Location of Gain or (Loss) Reclassified from AOCI into Income	September 30, 2023
	Amount of Gain or (Loss) Recognized in OCI on Derivative		Amount of Gain or (Loss) Recognized in OCI Included Component		Amount of Gain or (Loss) Recognized in OCI Excluded Component			Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest Rate Products	$	(48)	$	(48)	$	—	Interest Income	$	(473)	$	(473)	$	—
Total	$	(48)	$	(48)	$	—		$	(473)	$	(473)	$	—


Derivatives in Cash Flow Hedging Relationships	September 30, 2022						Location of Gain or (Loss) Reclassified from AOCI into Income	September 30, 2022
	Amount of Gain or (Loss) Recognized in OCI on Derivative		Amount of Gain or (Loss) Recognized in OCI Included Component		Amount of Gain or (Loss) Recognized in OCI Excluded Component			Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest Rate Products	$	(828)	$	(828)	$	—	Interest Income	$	(74)	$	(74)	$	—
Total	$	(828)	$	(828)	$	—		$	(74)	$	(74)	$	—

The table below presents the effect of cash flow hedge accounting on AOCI for the nine months ended September 30, 2023, and September 30, 2022, as follows (in thousands):


Derivatives in Cash Flow Hedging Relationships	September 30, 2023						Location of Gain or (Loss) Reclassified from AOCI into Income	September 30, 2023
	Amount of Gain or (Loss) Recognized in OCI on Derivative		Amount of Gain or (Loss) Recognized in OCI Included Component		Amount of Gain or (Loss) Recognized in OCI Excluded Component			Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest Rate Products	$	(337)	$	(337)	$	—	Interest Income	$	(1,259)	$	(1,259)	$	—
Total	$	(337)	$	(337)	$	—		$	(1,259)	$	(1,259)	$	—


Derivatives in Cash Flow Hedging Relationships	September 30, 2022						Location of Gain or (Loss) Reclassified from AOCI into Income	September 30, 2022
	Amount of Gain or (Loss) Recognized in OCI on Derivative		Amount of Gain or (Loss) Recognized in OCI Included Component		Amount of Gain or (Loss) Recognized in OCI Excluded Component			Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest Rate Products	$	(1,924)	$	(1,924)	$	—	Interest Income	$	108	$	108	$	—
Total	$	(1,924)	$	(1,924)	$	—		$	108	$	108	$	—

Schedule of Derivative Instruments


	Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	Three months ended
	September 30, 2023				September 30, 2022
	Interest Income		Interest Expense		Interest Income		Interest Expense
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded.	$	(433)	$	—	$	(74)	$	—
The effects of fair value and cash flow hedging:
Gain or (loss) on fair value hedging relationships in Subtopic 815-20
Interest contracts
Hedged items(1)	40		—		—		—
Derivatives designated as hedging instruments	—		—		—		—
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20
Interest contracts
Amount of gain or (loss) reclassified from AOCI into income	(473)		—		(74)		—
Amount of gain or (loss) reclassified from AOCI into income as a result that a forecasted transaction is no longer probable of occurring	—		—		—		—
Amount of gain or (loss) reclassified from AOCI into income - included component	(473)		—		(74)		—
Amount of gain or (loss) reclassified from AOCI into income - excluded component	—		—		—		—


	Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	Nine months ended
	September 30, 2023				September 30, 2022
	Interest Income		Interest Expense		Interest Income		Interest Expense
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded.	$	(1,549)	$	—	$	108	$	—
The effects of fair value and cash flow hedging:
Gain or (loss) on fair value hedging relationships in Subtopic 815-20
Interest contracts
Hedged items(1)	(1,066)		—		—		—
Derivatives designated as hedging instruments	776		—		—		—
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20
Interest contracts
Amount of gain or (loss) reclassified from AOCI into income	(1,259)		—		108		—
Amount of gain or (loss) reclassified from AOCI into income as a result that a forecasted transaction is no longer probable of occurring	—		—		—		—
Amount of gain or (loss) reclassified from AOCI into income - included component	(1,259)		—		108		—
Amount of gain or (loss) reclassified from AOCI into income - excluded component	—		—		—		—

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

+ References + Details

Leased Property - Assets and Liabilities, Lessee (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Right-of-use assets:
Operating leases	$ 4,846	$ 7,255
Finance leases	3,661	2,620
Total right-of-use assets	8,507	9,875
Lease liabilities:
Operating leases	5,075	7,592
Finance leases	3,829	2,745
Total lease liabilities	$ 8,904	$ 10,337

Leased Property - Additional Information on Leases (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Leases [Abstract]
Finance lease weighted average remaining lease term (years)	12 years 10 months 13 days		12 years 9 months 3 days
Finance lease weighted average discount rate	2.93%		2.22%
Operating lease weighted average remaining lease term (years)	3 years 1 month 13 days		3 years 3 months 3 days
Operating lease weighted average discount rate	3.02%		3.19%
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$ 2,545	$ 1,871
Operating cash flows from finance leases	58	48
Financing cash flows from finance leases	130	113
Right-of-use assets obtained in exchange for new finance lease liabilities	1,214	0
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 0	$ 502

Allowance for Credit Losses - Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Allowance for loan losses
Individually evaluated for impairment			$ 239
Collectively evaluated for impairment			20,800
Total ending allowance balance	$ 26,111	$ 25,919	21,039	$ 20,953	$ 23,362	$ 31,709
Loan balance:
Individually evaluated for impairment			9,069
Collectively evaluated for impairment			1,878,152
Total ending loan balance	2,070,616		1,887,221
Commercial real estate
Allowance for loan losses
Individually evaluated for impairment			41
Collectively evaluated for impairment			15,436
Total ending allowance balance	19,612	18,639	15,477	13,793	15,548	25,112
Loan balance:
Individually evaluated for impairment			331
Collectively evaluated for impairment			1,108,984
Total ending loan balance	1,260,653		1,109,315
Owner-occupied commercial real estate
Allowance for loan losses
Individually evaluated for impairment			102
Collectively evaluated for impairment			533
Total ending allowance balance	785	719	635	613	724	611
Loan balance:
Individually evaluated for impairment			2,580
Collectively evaluated for impairment			124,534
Total ending loan balance	123,496		127,114
Acquisition, construction & development
Allowance for loan losses
Individually evaluated for impairment			0
Collectively evaluated for impairment			2,082
Total ending allowance balance	1,765	1,319	2,082	4,437	3,607	2,189
Loan balance:
Individually evaluated for impairment			0
Collectively evaluated for impairment			94,450
Total ending loan balance	96,535		94,450
Commercial & industrial
Allowance for loan losses
Individually evaluated for impairment			0
Collectively evaluated for impairment			438
Total ending allowance balance	517	612	438	296	214	165
Loan balance:
Individually evaluated for impairment			0
Collectively evaluated for impairment			53,514
Total ending loan balance	61,571		53,514
Single family residential (1-4 units)
Allowance for loan losses
Individually evaluated for impairment			96
Collectively evaluated for impairment			2,283
Total ending allowance balance	3,386	4,520	2,379	1,785	1,519	2,434
Loan balance:
Individually evaluated for impairment			6,158
Collectively evaluated for impairment			493,204
Total ending loan balance	525,558		499,362
Consumer non-real estate and other
Allowance for loan losses
Individually evaluated for impairment			0
Collectively evaluated for impairment			28
Total ending allowance balance	46	110	28	29	19	18
Loan balance:
Individually evaluated for impairment			0
Collectively evaluated for impairment			3,466
Total ending loan balance	2,803		3,466
Unallocated reserve
Allowance for loan losses
Individually evaluated for impairment			0
Collectively evaluated for impairment			0
Total ending allowance balance	$ 0	$ 0	0	$ 0	$ 1,731	$ 1,180
Loan balance:
Individually evaluated for impairment			0
Collectively evaluated for impairment			0
Total ending loan balance			$ 0

Share-Based Compensation - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2019
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Compensation cost for awards granted	$ 610,100	$ 492,700	$ 1,800,000	$ 1,500,000
Total income tax benefit	128,100	$ 103,500	377,600	$ 313,300
Restricted Stock Units (RSUs)
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Unrecognized compensation costs	$ 3,500,000		$ 3,500,000
Average period for cost to be recognized			1 year 7 months 17 days
Restricted Stock Units (RSUs) \| Minimum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Award vesting period			3 years
Vesting percentage			50.00%
Restricted Stock Units (RSUs) \| Maximum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Award vesting period			5 years
Vesting percentage			100.00%
Restricted Stock Units (RSUs) \| 2020 Stock Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares authorized to be issued (in shares)					240,000
Shares issued during period (in shares)			24,705	13,160
Restricted Stock Units (RSUs) \| 2023 Stock Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares authorized to be issued (in shares)	250,000		250,000