Dime Commercial Bancshares, Inc. /NY/ 10-Q

Item 1. Financial Statements BRIDGE BANCORP, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ 2020 2019 ​ ​ (unaudited) ​ ​ ​ Assets ​ ​ ​ ​ ​ Cash and due from banks ​ $ 94,892 ​ $ 77,693 Interest-bearing deposits with banks ​ ​ 615,575 ​ ​ 39,501 Total cash and cash equivalents ​ ​ 710,467 ​ ​ 117,194 ​ ​ ​ ​ ​ ​ ​ Securities available for sale, at fair value ​ ​ 466,081 ​ ​ 638,291 Securities held to maturity (fair value of $ 104,911 and $ 135,027 , respectively) ​ ​ 100,934 ​ ​ 133,638 Total securities ​ ​ 567,015 ​ ​ 771,929 ​ ​ ​ ​ ​ ​ ​ Securities, restricted ​ ​ 23,362 ​ ​ 32,879 ​ ​ ​ ​ ​ ​ ​ Loans held for sale ​ ​ 10,000 ​ ​ 12,643 ​ ​ ​ ​ ​ ​ ​ Loans held for investment ​ ​ 4,639,473 ​ ​ 3,680,285 Allowance for credit losses ​ ​ ( 43,474 ) ​ ​ ( 32,786 ) Loans, net ​ ​ 4,595,999 ​ ​ 3,647,499 ​ ​ ​ ​ ​ ​ ​ Premises and equipment, net ​ ​ 34,341 ​ ​ 34,062 Operating lease right-of-use assets ​ ​ 44,642 ​ ​ 43,450 Accrued interest receivable ​ ​ 15,823 ​ ​ 10,908 Goodwill ​ ​ 105,950 ​ ​ 105,950 Other intangible assets ​ ​ 3,448 ​ ​ 3,677 Prepaid pension ​ ​ 12,914 ​ ​ 10,988 Bank owned life insurance ​ ​ 93,352 ​ ​ 91,942 Other assets ​ ​ 105,064 ​ ​ 38,399 Total assets ​ $ 6,322,377 ​ $ 4,921,520 ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ Demand deposits ​ $ 2,246,305 ​ $ 1,518,958 Savings, NOW and money market deposits ​ ​ 2,832,362 ​ ​ 1,987,712 Certificates of deposit of $100,000 or more ​ ​ 213,110 ​ ​ 214,093 Other time deposits ​ ​ 77,292 ​ ​ 93,884 Total deposits ​ ​ 5,369,069 ​ ​ 3,814,647 ​ ​ ​ ​ ​ ​ ​ Repurchase agreements ​ ​ 1,353 ​ ​ 999 Federal Home Loan Bank ("FHLB") advances ​ ​ 215,000 ​ ​ 435,000 Subordinated debentures, net ​ ​ 79,024 ​ ​ 78,920 Operating lease liabilities ​ ​ 47,383 ​ ​ 45,977 Other liabilities and accrued expenses ​ ​ 98,327 ​ ​ 48,823 Total liabilities ​ ​ 5,810,156 ​ ​ 4,424,366 ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity ​ ​ ​ ​ ​ ​ Preferred stock, par value $ .01 per share ( 2,000,000 shares authorized; none issued) ​ ​ — ​ ​ — Common stock, par value $ .01 per share ( 40,000,000 shares authorized; 19,935,517 and 19,898,022 shares issued, respectively; and 19,748,837 and 19,836,797 shares outstanding, respectively) ​ ​ 199 ​ ​ 199 Surplus ​ ​ 357,704 ​ ​ 356,436 Retained earnings ​ ​ 167,899 ​ ​ 150,703 Treasury stock at cost, 186,680 and 61,225 shares, respectively ​ ​ ( 4,832 ) ​ ​ ( 1,843 ) ​ ​ ​ 520,970 ​ ​ 505,495 Accumulated other comprehensive loss, net of income taxes ​ ​ ( 8,749 ) ​ ​ ( 8,341 ) Total stockholders’ equity ​ ​ 512,221 ​ ​ 497,154 Total liabilities and stockholders’ equity ​ $ 6,322,377 ​ $ 4,921,520 See accompanying condensed notes to the Unaudited Consolidated Financial Statements . 3 Table of Contents ​ BRIDGE BANCORP, INC. AND SUBSIDIARIES Consolidated Statements of Income (unaudited) ( In thousands, except per share amounts ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ 2020 2019 2020 2019 Interest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans (including fee income) ​ $ 43,058 ​ $ 41,005 ​ $ 124,812 ​ $ 118,495 Mortgage-backed securities, CMOs and other asset-backed securities ​ ​ 2,003 ​ ​ 3,775 ​ ​ 7,613 ​ ​ 13,007 U.S. GSE securities ​ ​ 1 ​ ​ 56 ​ ​ 365 ​ ​ 414 State and municipal obligations ​ ​ 443 ​ ​ 507 ​ ​ 1,433 ​ ​ 1,711 Corporate bonds ​ ​ 244 ​ ​ 296 ​ ​ 854 ​ ​ 951 Deposits with banks ​ ​ 135 ​ ​ 342 ​ ​ 514 ​ ​ 1,485 Other interest and dividend income ​ ​ 412 ​ ​ 373 ​ ​ 1,157 ​ ​ 1,158 Total interest income ​ ​ 46,296 ​ ​ 46,354 ​ ​ 136,748 ​ ​ 137,221 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Savings, NOW and money market deposits ​ ​ 2,092 ​ ​ 5,816 ​ ​ 8,632 ​ ​ 19,182 Certificates of deposit of $100,000 or more ​ ​ 727 ​ ​ 1,139 ​ ​ 2,676 ​ ​ 3,201 Other time deposits ​ ​ 228 ​ ​ 300 ​ ​ 1,004 ​ ​ 1,150 Federal funds purchased and repurchase agreements ​ ​ — ​ ​ 70 ​ ​ 79 ​ ​ 273 FHLB advances ​ ​ 1,407 ​ ​ 1,179 ​ ​ 3,163 ​ ​ 3,455 Subordinated debentures ​ ​ 1,135 ​ ​ 1,135 ​ ​ 3,405 ​ ​ 3,405 Total interest expense ​ ​ 5,589 ​ ​ 9,639 ​ ​ 18,959 ​ ​ 30,666 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income ​ ​ 40,707 ​ ​ 36,715 ​ ​ 117,789 ​ ​ 106,555 Provision for credit losses ​ ​ 1,500 ​ ​ 1,000 ​ ​ 11,000 ​ ​ 5,100 Net interest income after provision for credit losses ​ ​ 39,207 ​ ​ 35,715 ​ ​ 106,789 ​ ​ 101,455 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-interest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service charges and other fees ​ ​ 2,215 ​ ​ 2,588 ​ ​ 6,604 ​ ​ 7,572 Net securities gains ​ ​ 3,540 ​ ​ — ​ ​ 3,525 ​ ​ 201 Loss on termination of swaps ​ ​ ( 3,403 ) ​ ​ — ​ ​ ( 3,403 ) ​ ​ — Change in fair value of loans held for sale ​ ​ — ​ ​ — ​ ​ ( 2,643 ) ​ ​ — Title fees ​ ​ 695 ​ ​ 508 ​ ​ 1,409 ​ ​ 1,149 Gain on sale of Small Business Administration ("SBA") loans ​ ​ 2,191 ​ ​ 601 ​ ​ 3,031 ​ ​ 1,662 Bank owned life insurance ​ ​ 543 ​ ​ 561 ​ ​ 1,638 ​ ​ 1,670 Loan swap fees ​ ​ 554 ​ ​ 1,557 ​ ​ 3,105 ​ ​ 3,200 Other ​ ​ 455 ​ ​ 429 ​ ​ 993 ​ ​ 1,507 Total non-interest income ​ ​ 6,790 ​ ​ 6,244 ​ ​ 14,259 ​ ​ 16,961 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-interest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Salaries and employee benefits ​ ​ 16,406 ​ ​ 14,294 ​ ​ 45,874 ​ ​ 41,233 Occupancy and equipment ​ ​ 3,599 ​ ​ 3,490 ​ ​ 10,618 ​ ​ 10,581 Technology and communications ​ ​ 2,487 ​ ​ 2,129 ​ ​ 7,074 ​ ​ 5,787 Marketing and advertising ​ ​ 449 ​ ​ 1,282 ​ ​ 2,240 ​ ​ 3,729 Professional services ​ ​ 1,356 ​ ​ 1,055 ​ ​ 3,351 ​ ​ 2,615 FDIC assessments ​ ​ 678 ​ ​ 18 ​ ​ 1,159 ​ ​ 652 Merger expenses ​ ​ 2,352 ​ ​ — ​ ​ 2,352 ​ ​ — Amortization of other intangible assets ​ ​ 149 ​ ​ 182 ​ ​ 507 ​ ​ 605 Other ​ ​ 1,461 ​ ​ 1,754 ​ ​ 5,004 ​ ​ 5,605 Total non-interest expense ​ ​ 28,937 ​ ​ 24,204 ​ ​ 78,179 ​ ​ 70,807 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ ​ 17,060 ​ ​ 17,755 ​ ​ 42,869 ​ ​ 47,609 Income tax expense ​ ​ 3,999 ​ ​ 3,852 ​ ​ 9,804 ​ ​ 10,126 Net income ​ $ 13,061 ​ $ 13,903 ​ $ 33,065 ​ $ 37,483 Basic earnings per share ​ $ 0.66 ​ $ 0.70 ​ $ 1.66 ​ $ 1.88 Diluted earnings per share ​ $ 0.66 ​ $ 0.70 ​ $ 1.66 ​ $ 1.88 ​ S ee accompanying condensed notes to the Unaudited Consolidated Financial Statements . ​ 4 Table of Contents BRIDGE BANCORP, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income (unaudited) (In thousands ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ 2020 2019 2020 2019 Net income ​ $ 13,061 ​ $ 13,903 ​ $ 33,065 ​ $ 37,483 Other comprehensive income (loss): ​ ​ Change in unrealized net (losses) gains on securities available for sale, net of reclassifications and deferred income taxes ​ ( 3,166 ) ​ 1,578 ​ 4,006 ​ 11,367 Adjustment to pension liability, net of reclassifications and deferred income taxes ​ 97 ​ 91 ​ 292 ​ 272 Unrealized gains (losses) on cash flow hedges, net of reclassifications and deferred income taxes ​ 3,082 ​ ( 700 ) ( 4,706 ) ( 4,755 ) Total other comprehensive income (loss) ​ 13 ​ 969 ​ ( 408 ) ​ 6,884 Comprehensive income ​ $ 13,074 ​ $ 14,872 $ 32,657 $ 44,367 ​ See accompanying condensed notes to the Unaudited Consolidated Financial Statements . ​ 5 Table of Contents BRIDGE BANCORP, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity (unaudited) ( In thousands, except per share amounts ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated Other ​ ​ ​ ​ Common ​ ​ ​ ​ Retained ​ Treasury ​ Comprehensive ​ ​ ​ Stock Surplus Earnings Stock Loss Total Balance at June 30, 2020 ​ $ 199 ​ $ 356,510 ​ $ 159,635 ​ $ ( 4,961 ) ​ $ ( 8,762 ) ​ $ 502,621 Net income ​ ​ ​ ​ ​ 13,061 ​ ​ ​ ​ ​ 13,061 Shares issued under the dividend reinvestment plan ( 11,423 shares) ​ ​ ​ 261 ​ ​ ​ ​ ​ ​ ​ 261 Stock awards granted and distributed ( 5,000 shares) ​ ​ ​ ( 169 ) ​ ​ ​ 169 ​ ​ ​ — Stock awards forfeited ( 600 shares) ​ ​ ​ 20 ​ ​ ​ ( 20 ) ​ ​ ​ — Repurchase of surrendered stock from vesting of stock plans ( 1,020 shares) ​ ​ ​ ​ ​ ​ ​ ( 20 ) ​ ​ ​ ( 20 ) Share based compensation expense ​ ​ ​ 1,082 ​ ​ ​ ​ ​ ​ ​ 1,082 Cash dividend declared, $ 0.24 per share ​ ​ ​ ​ ​ ( 4,797 ) ​ ​ ​ ​ ​ ( 4,797 ) Other comprehensive income, net of deferred income taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ 13 ​ 13 Balance at September 30, 2020 ​ $ 199 ​ $ 357,704 ​ $ 167,899 ​ $ ( 4,832 ) ​ $ ( 8,749 ) ​ $ 512,221 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated Other ​ ​ ​ ​ ​ Common ​ ​ ​ ​ Retained ​ Treasury ​ Comprehensive ​ ​ ​ Stock Surplus Earnings Stock Loss Total Balance at June 30, 2019 ​ $ 199 ​ $ 353,729 ​ $ 131,811 ​ $ ( 1,337 ) ​ $ ( 9,197 ) ​ $ 475,205 Net income ​ ​ ​ ​ ​ 13,903 ​ ​ ​ ​ ​ 13,903 Shares issued under the dividend reinvestment plan ( 6,442 shares) ​ ​ ​ 224 ​ ​ ​ ​ ​ ​ ​ 224 Shares issued under the Employee Stock Purchase Plan ( 4,355 shares) ​ ​ ​ ​ ​ 122 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 122 Purchase of treasury stock ( 11,200 shares) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 304 ) ​ ​ ​ ​ ​ ( 304 ) Stock awards granted and distributed ( 1,000 shares) ​ ​ ​ ( 33 ) ​ ​ ​ 33 ​ ​ ​ — Stock awards forfeited ( 4,703 shares) ​ ​ ​ 137 ​ ​ ​ ( 137 ) ​ ​ ​ — Repurchase of surrendered stock from vesting of stock plans ( 480 shares) ​ ​ ​ ​ ​ ​ ​ ( 12 ) ​ ​ ​ ( 12 ) Share based compensation expense ​ ​ ​ 907 ​ ​ ​ ​ ​ ​ ​ 907 Cash dividend declared, $ 0.23 per share ​ ​ ​ ​ ​ ( 4,611 ) ​ ​ ​ ​ ​ ( 4,611 ) Other comprehensive income, net of deferred income taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ 969 ​ 969 Balance at September 30, 2019 ​ $ 199 ​ $ 355,086 ​ $ 141,103 ​ $ ( 1,757 ) ​ $ ( 8,228 ) ​ $ 486,403 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated Other ​ ​ ​ ​ ​ Common ​ ​ ​ ​ Retained ​ Treasury ​ Comprehensive ​ ​ ​ Stock Surplus Earnings Stock Loss Total Balance at January 1, 2020 ​ $ 199 ​ $ 356,436 ​ $ 150,703 ​ $ ( 1,843 ) ​ $ ( 8,341 ) ​ $ 497,154 Cumulative change in accounting principle (Note 1) ​ ​ ​ ​ ​ ​ ​ ​ ( 1,473 ) ​ ​ ​ ​ ​ ​ ​ ​ ( 1,473 ) Balance at January 1, 2020 (as adjusted for change in accounting principle) ​ ​ 199 ​ ​ 356,436 ​ ​ 149,230 ​ ​ ( 1,843 ) ​ ​ ( 8,341 ) ​ ​ 495,681 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ ​ ​ ​ ​ 33,065 ​ ​ ​ ​ ​ 33,065 Shares issued under the dividend reinvestment plan ( 28,687 shares) ​ ​ ​ 748 ​ ​ ​ ​ ​ ​ ​ 748 Shares issued under the Employee Stock Purchase Plan ( 5,888 shares) ​ ​ ​ ​ ​ 128 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 128 Purchase of treasury stock ( 179,620 shares) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 4,633 ) ​ ​ ​ ​ ​ ( 4,633 ) Stock awards granted and distributed ( 95,657 shares) ​ ​ ​ ( 2,880 ) ​ ​ ​ 2,880 ​ ​ ​ — Stock awards forfeited ( 6,593 shares) ​ ​ ​ 222 ​ ​ ​ ( 222 ) ​ ​ ​ — Repurchase of surrendered stock from vesting of stock plans ( 33,322 shares) ​ ​ ​ ( 36 ) ​ ​ ​ ( 1,014 ) ​ ​ ​ ( 1,050 ) Share based compensation expense ​ ​ ​ 3,086 ​ ​ ​ ​ ​ ​ ​ 3,086 Cash dividend declared, $ 0.72 per share ​ ​ ​ ​ ​ ( 14,396 ) ​ ​ ​ ​ ​ ( 14,396 ) Other comprehensive loss, net of deferred income taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 408 ) ​ ( 408 ) Balance at September 30, 2020 ​ $ 199 ​ $ 357,704 ​ $ 167,899 ​ $ ( 4,832 ) ​ $ ( 8,749 ) ​ $ 512,221 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated Other ​ ​ ​ ​ ​ Common ​ ​ ​ ​ Retained ​ Treasury ​ Comprehensive ​ ​ ​ Stock Surplus Earnings Stock Loss Total Balance at January 1, 2019 ​ $ 198 ​ $ 352,093 ​ $ 117,432 ​ $ ( 781 ) ​ $ ( 15,112 ) ​ $ 453,830 Net income ​ ​ ​ ​ ​ 37,483 ​ ​ ​ ​ ​ 37,483 Shares issued under the dividend reinvestment plan ( 18,347 shares) ​ ​ ​ 643 ​ ​ ​ ​ ​ ​ ​ 643 Shares issued under the Employee Stock Purchase Plan ( 4,355 shares) ​ ​ ​ ​ ​ 122 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 122 Purchase of treasury stock ( 22,600 shares) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 625 ) ​ ​ ​ ​ ​ ( 625 ) Stock awards granted and distributed ( 80,974 shares) ​ 1 ​ ( 988 ) ​ ​ ​ 987 ​ ​ ​ — Stock awards forfeited ( 17,020 shares) ​ ​ ​ 479 ​ ​ ​ ( 479 ) ​ ​ ​ — Repurchase of surrendered stock from vesting of stock plans ( 26,346 shares) ​ ​ ​ ( 18 ) ​ ​ ​ ( 859 ) ​ ​ ​ ( 877 ) Share based compensation expense ​ ​ ​ 2,755 ​ ​ ​ ​ ​ ​ ​ 2,755 Cash dividend declared, $ 0.69 per share ​ ​ ​ ​ ​ ( 13,812 ) ​ ​ ​ ​ ​ ( 13,812 ) Other comprehensive income, net of deferred income taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,884 ​ 6,884 Balance at September 30, 2019 ​ $ 199 ​ $ 355,086 ​ $ 141,103 ​ $ ( 1,757 ) ​ $ ( 8,228 ) ​ $ 486,403 See accompanying condensed notes to the Unaudited Consolidated Financial Statements . 6 Table of Contents BRIDGE BANCORP, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (unaudited) ( In thousands ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended ​ ​ September 30, ​ 2020 2019 Cash flows from operating activities: ​ ​ ​ Net income ​ $ 33,065 ​ $ 37,483 Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ Provision for credit losses ​ 11,000 ​ 5,100 Depreciation and amortization of premises and equipment ​ 3,141 ​ 3,148 Net (accretion) and other amortization ​ ​ ( 772 ) ​ ​ ( 1,044 ) Net amortization on securities ​ 2,543 ​ 2,716 Increase in cash surrender value of bank owned life insurance ​ ( 1,638 ) ​ ( 1,670 ) Amortization of other intangible assets ​ 507 ​ 605 Share based compensation expense ​ 3,086 ​ 2,755 Net securities gains ​ ( 3,525 ) ​ ( 201 ) Loss on termination of swaps ​ ​ 3,403 ​ ​ — Change in fair value of loans held for sale ​ ​ 2,643 ​ ​ — Increase in accrued interest receivable ​ ( 4,915 ) ​ ( 461 ) SBA loans originated for sale ​ ( 36,228 ) ​ ( 23,012 ) Proceeds from sale of the guaranteed portion of SBA loans ​ 40,016 ​ 25,108 Gain on sale of the guaranteed portion of SBA loans ​ ( 3,031 ) ​ ( 1,662 ) (Increase) decrease in other assets ​ ( 26,545 ) ​ 3,149 Decrease in accrued expenses and other liabilities ​ ( 1,047 ) ​ ( 4,551 ) Net cash provided by operating activities ​ 21,703 ​ 47,463 ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: ​ ​ ​ Purchases of securities available for sale ​ ( 334,028 ) ​ ( 64,373 ) Purchases of securities, restricted ​ ( 43,313 ) ​ ( 63,771 ) Proceeds from sales of securities available for sale ​ 152,981 ​ 46,478 Redemption of securities, restricted ​ 52,830 ​ 59,330 Maturities, calls and principal payments of securities available for sale ​ 360,225 ​ 102,141 Maturities, calls and principal payments of securities held to maturity ​ 32,380 ​ 19,900 Net increase in loans ​ ( 961,658 ) ​ ( 249,274 ) Proceeds from sales of other real estate owned ("OREO"), net ​ ​ — ​ ​ 297 Purchase of premises and equipment ​ ( 3,421 ) ​ ( 1,684 ) Net cash used in investing activities ​ ( 744,004 ) ​ ( 150,956 ) ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: ​ ​ ​ Net increase (decrease) in deposits ​ 1,554,423 ​ ( 143,093 ) Net (decrease) increase in FHLB advances ​ ( 220,000 ) ​ 96,568 Net increase in repurchase agreements ​ 354 ​ 417 Net proceeds from issuance of common stock ​ 876 ​ 765 Purchase of treasury stock ​ ​ ( 4,633 ) ​ ​ ( 625 ) Repurchase of surrendered stock from vesting of stock plans ​ ( 1,050 ) ​ ( 877 ) Cash dividends paid ​ ( 14,396 ) ​ ( 13,812 ) Net cash provided by (used in) financing activities ​ 1,315,574 ​ ( 60,657 ) ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash and cash equivalents ​ 593,273 ​ ( 164,150 ) Cash and cash equivalents at beginning of period ​ 117,194 ​ 295,368 Cash and cash equivalents at end of period ​ $ 710,467 ​ $ 131,218 ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of cash flow information: ​ ​ ​ Cash paid for: ​ ​ ​ Interest ​ $ 20,099 ​ $ 31,805 Income taxes ​ $ 8,613 ​ $ 5,783 ​ ​ ​ ​ ​ ​ ​ Non-cash investing and financing activities: ​ ​ Transfers from portfolio loans to loans held for sale ​ $ — ​ $ 12,643 ​ See accompanying condensed notes to the Unaudited Consolidated Financial Statements . ​ 7 Table of Contents BRIDGE BANCORP, INC. AND SUBSIDIARIES CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. BASIS OF PRESENTATION Bridge Bancorp, Inc. (the “Holding Company”), is a bank holding company incorporated under the laws of the State of New York. The Holding Company’s business consists of the operations of its wholly-owned subsidiary, BNB Bank (the “Bank”). The Bank’s operations include its real estate investment trust subsidiary, Bridgehampton Community, Inc.; a financial title insurance subsidiary, Bridge Abstract LLC (“Bridge Abstract”); and an investment services subsidiary, Bridge Financial Services, Inc. (“Bridge Financial Services”). The unaudited consolidated financial statements presented in this Quarterly Report on Form 10-Q include the collective results of the Holding Company and its wholly-owned subsidiary, the Bank, which are collectively herein referred to as “we”, “us”, “our” and the “Company.” The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The unaudited consolidated financial statements included herein reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. In preparing the interim financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reported periods. Such estimates are subject to change in the future as additional information becomes available or previously existing circumstances are modified. Actual future results could differ significantly from those estimates. The annualized results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the results of operations that may be expected for the entire fiscal year. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain reclassifications have been made to prior year amounts, and the related discussion and analysis, to conform to the current year presentation. These reclassifications did not have an impact on net income or total stockholders' equity. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. COVID-19 Risks In December 2019, a novel coronavirus (“COVID-19”) was reported in China, and, in March 2020, the World Health Organization declared COVID-19 a pandemic. On March 12, 2020, the President of the United States declared the COVID-19 outbreak in the United States a national emergency. The COVID-19 pandemic has caused significant economic dislocation in the United States as many state and local governments, including New York, ordered non-essential businesses to close and residents to shelter in place at home. This has resulted in an unprecedented slow-down in economic activity and a related increase in unemployment. The Company’s unaudited consolidated financial statements reflect the impact of COVID-19 on the assumptions and estimates used. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the full impact of the COVID-19 outbreak on the Company’s business. The extent of such impact will depend on future developments, which are highly uncertain, including when COVID-19 can be controlled and abated and when and how the economy may be reopened. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, the Company may be subject to the following risks, any of which could have a material, adverse effect on its business, financial condition, liquidity, and results of operations: ● demand for the Company’s products and services may decline, making it difficult to grow assets and income; 8 Table of Contents ● if the economy is unable to substantially reopen or remain open, and high levels of unemployment continue, for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; ● collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; ● the Company’s allowance for credit losses (“ACL”) may have to be increased if borrowers experience financial difficulties beyond forbearance periods, which will adversely affect the Company’s net income; ● the Company may recognize impairment of its goodwill; ● the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to the Company; ● as the result of the decline in the Federal Reserve Board’s target federal funds rate to near 0%, the yield on the Company’s assets may decline to a greater extent than the decline in its cost of interest-bearing liabilities, reducing net interest margin and spread and reducing net income; ● a material decrease in net income or a net loss over several quarters could result in a decrease in the rate of the Company’s quarterly cash dividend; ● the Company’s cyber security risks are increased as the result of an increase in the number of employees working remotely; and ● the Company relies on third party vendors for certain services and the unavailability of a critical service due to the COVID-19 outbreak could have an adverse effect on the Company. ​ ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) Effective for periods after December 31, 2019, the Company adopted Accounting Standards Update (“ASU”) No 2016-13, Financial Instruments – Credit Losses (Topic 326), which replaced the long-standing incurred loss model used in calculating the allowance for loan and lease losses with a more forward-looking, current expected credit loss model (“CECL” or the “CECL Standard”). Furthermore, the CECL Standard requires financial institutions to measure all expected credit losses for in-scope financial assets held at amortized cost at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts, including estimates of prepayments. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with Topic 842 on leases. Accordingly, financial institutions will now leverage forward-looking information to better inform their credit loss estimates. For the Company, this standard applies to loans held for investment, unfunded commitments, and securities held to maturity. In addition, the CECL Standard made changes to the accounting for available for sale debt securities. Credit losses on available for sale debt securities under the CECL Standard should be measured in a manner similar to legacy GAAP. However, the amendments in the CECL Standard require that credit losses be presented as an allowance for credit losses rather than as a write-down. The CECL Standard approach is an improvement because an entity is able to record reversals of credit losses (in situations in which the estimate of credit losses declines) in current period net income, which in turn should align the income statement recognition of credit losses with the reporting period in which changes occur. Although the Coronavirus Aid, Relief, and Economic Security Act (the “CARES” Act) provided the option to delay the adoption of the CECL Standard until the earlier of December 31, 2020 or the termination of the current national emergency declaration related to the COVID-19 outbreak, the Company adopted the CECL Standard in the first quarter of 2020 as previously planned using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures. The adoption of the CECL Standard resulted in an initial increase of $ 1.6 million to the allowance for credit losses and $ 0.5 million to the reserve for unfunded commitments. The after-tax cumulative-effect adjustment of $ 1.5 million was recorded in retained earnings as of January 1, 2020. Based on the credit quality of the Company's securities portfolio, there was no initial adjustment to retained earnings for credit losses associated with debt securities held to maturity. Results for reporting periods beginning after January 1, 2020 are presented under the CECL Standard while prior period amounts will continue to be reported in accordance with previously applicable GAAP. 9 Table of Contents 2. EARNINGS PER SHARE Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 260-10-45 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share (“EPS”). The restricted stock awards (“RSAs”) and certain restricted stock units (“RSUs”) granted by the Company contain non-forfeitable rights to dividends and therefore are considered participating securities. The two-class method for calculating basic EPS excludes dividends paid to participating securities and any undistributed earnings attributable to participating securities. The following table presents the computation of EPS for the three and nine months ended September 30, 2020 and 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, (In thousands, except per share data) 2020 2019 2020 2019 Net income ​ $ 13,061 ​ $ 13,903 ​ $ 33,065 ​ $ 37,483 Dividends paid on and earnings allocated to participating securities ​ ( 276 ) ( 294 ) ​ ( 689 ) ​ ( 797 ) Income attributable to common stock ​ $ 12,785 ​ $ 13,609 ​ $ 32,376 ​ $ 36,686 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding, including participating securities ​ 19,896 19,958 ​ 19,901 ​ 19,950 Weighted average participating securities ​ ( 423 ) ( 422 ) ​ ( 415 ) ​ ( 425 ) Weighted average common shares outstanding ​ 19,473 19,536 ​ 19,486 ​ 19,525 Basic earnings per common share ​ $ 0.66 ​ $ 0.70 ​ $ 1.66 ​ $ 1.88 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income attributable to common stock ​ $ 12,785 ​ $ 13,609 ​ $ 32,376 ​ $ 36,686 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding ​ 19,473 19,536 ​ 19,486 ​ 19,525 Incremental shares from assumed conversions of options and restricted stock units ​ 41 32 ​ 36 ​ 27 Weighted average common and equivalent shares outstanding ​ 19,514 19,568 ​ 19,522 ​ 19,552 Diluted earnings per common share ​ $ 0.66 ​ $ 0.70 ​ $ 1.66 ​ $ 1.88 ​ There were 180,020 stock options outstanding at September 30, 2020 that were not included in the computation of diluted earnings per share for the three and nine months ended September 30, 2020 because the options' exercise prices were greater than the average market price of common stock and were, therefore, antidilutive. There were 110,660 stock options outstanding at September 30, 2019 that were not included in the computation of diluted earnings per share for the three and nine months ended September 30, 2019 because the options' exercise prices were greater than the average market price of common stock and were, therefore, antidilutive. There were 46,625 and zero RSUs that were antidilutive for the three months ended September 30, 2020 and 2019, respectively. There were 46,625 and 9,190 RSUs that were antidilutive for the nine months ended September 30, 2020 and 2019, respectively. 3. STOCK-BASED COMPENSATION PLANS In May 2019, the Company’s shareholders approved the Bridge Bancorp, Inc. 2019 Equity Incentive Plan (the “2019 Equity Incentive Plan”), which provides for the grant of stock-based and other incentive awards to officers, employees and directors of the Company. The 2019 Equity Incentive Plan superseded the Bridge Bancorp, Inc. 2012 Stock-Based Incentive Plan (the “2012 Equity Incentive Plan”). The 2012 Equity Incentive Plan superseded the 2006 Stock-Based Incentive Plan. The maximum number of shares of stock, in the aggregate, that may be granted under the 2019 Equity Incentive Plan as stock options, restricted stock, or restricted stock units is 370,000 plus the number of shares of stock which have been reserved but not issued under the 2012 Equity Incentive Plan, and any awards that are forfeited under the 2012 Equity Incentive Plan after the effective date of the 2019 Equity Incentive Plan. No further grants will be made under the 2012 Equity Incentive Plan. Currently outstanding grants under the 2012 Equity Incentive Plan will not be affected. The number of shares of common stock of Bridge Bancorp, Inc. available for stock-based awards under the 2019 Equity Incentive Plan is 370,000 plus 162,738 shares that were remaining under the 2012 Equity Incentive Plan. At September 30, 2020, 351,856 shares remain available for issuance, including shares that may be granted in the form of stock options, RSAs, or RSUs. 10 Table of Contents The Compensation Committee of the Board of Directors determines awards under the 2019 Equity Incentive Plan. The Company accounts for the 2019 Equity Incentive Plan under FASB ASC No. 718. Stock Options Stock options may be either incentive stock options, which bestow certain tax benefits on the optionee, or non-qualified stock options, not qualifying for such benefits. All options have an exercise price that is not less than the market value of the Company's common stock on the date of the grant. The fair value of each option granted is estimated on the date of the grant using the Black-Scholes option-pricing model. The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the market price of the Company's common stock as of the exercise or reporting date. During the nine months ended September 30, 2020 and 2019, in accordance with the Long Term Incentive Plan (“LTI Plan”) for Named Executive Officers (“NEOs”), the Company granted 69,360 and 63,267 stock options, respectively, with an exercise price set to equal a 10.0 % premium over the grant date stock price. All of the stock options granted vest ratably over three years . The estimated weighted-average grant-date fair value of all stock options granted in the nine months ended September 30, 2020 and 2019 was $ 4.10 and $ 5.05 per stock option, respectively, using the Black-Scholes option-pricing model with assumptions as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended ​ ​ ​ September 30, ​ ​ ​ 2020 2019 Dividend yield ​ ​ 3.03 % ​ 2.86 % Expected volatility ​ ​ 23.11 ​ ​ 23.80 ​ Risk-free interest rate ​ ​ 1.47 ​ ​ 2.52 ​ Expected option life ​ ​ 6.0 years ​ 6.0 years ​ Compensation expense attributable to stock options was $ 75 thousand and $ 217 thousand for the three and nine months ended September 30, 2020, respectively. Compensation expense attributable to stock options was $ 53 thousand and $ 144 thousand for the three and nine months ended September 30, 2019, respectively. As of September 30, 2020, there was $ 409 thousand of total unrecognized compensation cost related to unvested stock options. The cost is expected to be recognized over a weighted-average period of 1.8 years. The following table summarizes the status of the Company's stock options as of and for the nine months ended September 30, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ Average ​ ​ ​ ​ ​ ​ Number ​ Average ​ Remaining ​ ​ Aggregate ​ ​ of ​ Exercise ​ Contractual ​ ​ Intrinsic (Dollars in thousands, except per share amounts) Options Price Life Value Outstanding, January 1, 2020 ​ 110,660 $ 35.71 ​ ​ ​ ​ ​ ​ ​ Granted ​ 69,360 ​ ​ 34.87 ​ ​ ​ ​ ​ ​ ​ Outstanding, September 30, 2020 ​ 180,020 ​ 35.39 ​ 8.5 years ​ $ — Vested and Exercisable, September 30, 2020 ​ 52,681 ​ 35.85 ​ 7.8 years ​ ​ — ​ ​ ​ ​ ​ Number of ​ Exercise Options Price 69,360 ​ $ 34.87 63,267 ​ ​ 35.35 47,393 ​ ​ 36.19 180,020 ​ ​ ​ ​ Restricted Stock Awards The Company's RSAs are shares of the Company's common stock that are forfeitable and are subject to restrictions on transfer prior to the vesting date. RSAs are forfeited if the award holder departs the Company before vesting. RSAs carry dividend and voting rights from the date of grant. The vesting of time-vested RSAs depends upon the award holder 11 Table of Contents continuing to render services to the Company. The Company's performance-based RSAs vest subject to the achievement of the Company's corporate goals. The following table summarizes the unvested RSA activity for the nine months ended September 30, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average Grant-Date ​ Shares Fair Value Unvested, January 1, 2020 293,717 ​ $ 30.37 Granted 91,428 ​ ​ 31.02 Vested ( 106,278 ) ​ ​ 28.95 Forfeited ( 6,593 ) ​ ​ 32.16 Unvested, September 30, 2020 272,274 ​ ​ 31.10 ​ During the nine months ended September 30, 2020, the Company granted a total of 91,428 RSAs. Of the 91,428 RSAs granted, 57,850 time-vested RSAs vest ratably over five years and 33,578 time-vested RSAs vest ratably over three years . During the nine months ended September 30, 2019, the Company granted a total of 78,952 RSAs. Of the 78,952 RSAs granted, 49,925 time-vested RSAs vest ratably over five years , 29,027 time-vested RSAs vest ratably over three years . As of September 30, 2020, there were 272,274 unvested RSAs, all of which were time-vested RSAs and there were no unvested performance-based RSAs. Compensation expense attributable to RSAs was $ 628 thousand and $ 1.8 million for the three and nine months ended September 30, 2020, respectively, and $ 537 thousand and $ 1.7 million for the three and nine months ended September 30, 2019, respectively. As of September 30, 2020, there was $ 5.4 million of total unrecognized compensation cost related to non-vested RSAs. The cost is expected to be recognized over a weighted-average period of 3.0 years. Restricted Stock Units Long Term Incentive Plan RSUs represent an obligation to deliver shares to a grantee at a future date if certain vesting conditions are met. RSUs are subject to a time-based vesting schedule, or the satisfaction of performance conditions, and are settled in shares of the Company's common stock. RSUs do not provide voting rights and RSUs may provide dividend equivalent rights from the date of grant. The following table summarizes the unvested NEO RSU activity for the nine months ended September 30, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average Grant-Date ​ Shares Fair Value Unvested, January 1, 2020 ​ 85,342 $ 29.59 Granted ​ 26,556 ​ ​ 32.13 Reinvested dividends ​ 3,225 ​ ​ 30.05 Forfeited ​ ( 6,623 ) ​ ​ 28.68 Vested ​ ( 15,353 ) ​ ​ 25.18 Unvested, September 30, 2020 ​ 93,147 ​ 31.12 ​ During the nine months ended September 30, 2020, in accordance with the LTI Plan for NEOs, the Company granted 26,556 RSUs. Of the 26,556 RSUs granted, 17,943 time-vested RSUs vest ratably over three years and 8,613 performance-based RSUs vest subject to the achievement of the Company's three-year corporate goal for the three-year period ending December 31, 2022. Compensation expense attributable to LTI Plan RSUs was $ 224 thousand and $ 642 thousand for the three and nine months ended September 30, 2020, respectively, and $ 175 thousand and $ 518 thousand for the three and nine months ended September 30, 2019, respectively. As of September 30, 2020, there was $ 1.5 million of total unrecognized compensation cost related to non-vested RSUs. The cost is expected to be recognized over a weighted-average period of 2.3 years. 12 Table of Contents Directors Plan In April 2009, the Company adopted a Directors Deferred Compensation Plan (“Directors Plan”). Under the Directors Plan, independent directors may elect to defer all or a portion of their annual retainer fee in the form of RSUs. In addition, directors receive a non-election retainer in the form of RSUs. These RSUs vest ratably over one year and have dividend rights but no voting rights. In connection with the Directors Plan, the Company recorded expense of $ 155 thousand and $ 397 thousand for the three and nine months ended September 30, 2020, respectively, and $ 142 thousand and $ 427 thousand for the three and nine months ended September 30, 2019, respectively. Employee Stock Purchase Plan In May 2018, the Board of Directors adopted, and stockholders approved the Employee Stock Purchase Plan (“ESPP”). A total of 1,000,000 shares of the Company’s common stock have been initially authorized for issuance under the ESPP. Subject to any plan limitations, the ESPP allows eligible employees to contribute, normally through payroll deductions, up to $ 25 thousand for the purchase of the Company’s common stock at a discounted price per share for any calendar year. The current offering period is from July 1, 2020 through December 31, 2020. During the nine months ended September 30, 2020, 5,888 shares of common stock were purchased, and no expense was recorded related to the ESPP. During the nine months ended September 30, 2019, 4,355 shares of common stock were purchased, and no expense was recorded related to ESPP. 4. SECURITIES Debt securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Equity securities are carried at fair value, with changes in fair value reported in net income. Equity securities without readily determinable fair values are carried at cost, minus impairment, if any, plus or minus changes resulting in observable price changes in orderly transactions for the identical or a similar investment. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. The Company has made a policy election to exclude accrued interest from the amortized cost basis of debt securities and report accrued interest separately in other assets in the consolidated balance sheet. A debt security is placed on non-accrual status at the time any principal or interest payments become more than 90 days delinquent or if full collection of interest or principal becomes uncertain. Accrued interest for a security placed on non-accrual is reversed against interest income. There were no non-accrual debt securities at September 30, 2020 and there was no accrued interest related to debt securities reversed against interest income for the three and nine months ended September 30, 2020. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. On January 1, 2020, the Company adopted the CECL Standard, which requires that debt securities held to maturity be accounted for under the current expected credit losses model, including historical loss experience and impact of current conditions and reasonable and supportable forecasts, with an associated allowance for credit losses. In addition, while credit losses on debt securities available for sale should be measured in accordance with the other-than-temporary impairment (“OTTI”) framework under current GAAP, the amendments in the CECL Standard require that these credit losses be presented as an allowance for credit losses. For AFS debt securities, a decline in fair value due to credit loss results in recording an allowance for credit losses to the extent the fair value is less than the amortized cost basis. Held to maturity debt securities and the allowance for credit losses To the extent that debt securities in the held-to-maturity portfolio share common risk characteristics, estimated expected credit losses are calculated in a manner like that used for loans held for investment. That is, for pools of such debt securities with common risk characteristics, the historical lifetime probability of default and severity of loss in the event of default is derived or obtained from external sources and adjusted for the expected effects of reasonable and supportable forecasts over the expected lives of the securities. 13 Table of Contents Expected credit loss on each debt security in the held-to-maturity portfolio that do not share common risk characteristics with any of the pools of debt securities is individually measured based on net realizable value, or the difference between the discounted value of the expected future cash flows, based on the original effective interest rate, and the recorded amortized cost basis of the security. With respect to certain classes of debt securities, primarily U.S. Treasuries and securities issued by Government Sponsored Entities, the Company considers the history of credit losses, current conditions and reasonable and supportable forecasts, which may indicate that the expectation that nonpayment of the amortized cost basis is or continues to be zero, even if the U.S. government were to technically default. Therefore, for those securities, the Company does not record expected credit losses. Accrued interest receivable is excluded from the estimate of credit losses. Available for sale debt securities and the allowance for credit losses Management evaluates available for sale debt securities for OTTI on at least a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the near-term prospects of the issuer. Impairment may result from credit deterioration of the issuer or collateral underlying the security. In performing an assessment of whether any decline in fair value is due to a credit loss, all relevant information is considered at the individual security level. For asset-backed securities performance indicators considered related to the underlying assets include default rates, delinquency rates, percentage of non-performing assets, debt-to-collateral ratios, third party guarantees, current levels of subordination, vintage, geographic concentration, analyst reports and forecasts, credit ratings and other market data. In assessing whether a credit loss exists, we compare the present value of cash flows expected to be collected from the security with 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 for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount the fair value is less than amortized cost basis. Declines in fair value that have not been recorded through an allowance for credit losses, such as declines due to changes in market interest rates, are excluded from earnings and reported, net of tax, in other comprehensive income (“OCI”). Management also assesses whether it intends to sell or is more likely than not that it will be required to sell a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. Accrued interest receivable is excluded from the estimate of credit losses. ​ 14 Table of Contents The following table summarizes the amortized cost and estimated fair value of the available for sale and held to maturity investment securities portfolio at September 30, 2020 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ ​ ​ ​ Gross ​ Gross ​ Estimated ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Fair (In thousands) Cost Gains Losses Value Available for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ State and municipal obligations ​ $ 34,874 $ 1,639 ​ $ ( 9 ) $ 36,504 U.S. GSE residential mortgage-backed securities ​ 117,323 ​ 1,595 ​ ( 42 ) ​ 118,876 U.S. GSE residential collateralized mortgage obligations ​ 159,501 ​ 2,156 ​ ( 75 ) ​ 161,582 U.S. GSE commercial mortgage-backed securities ​ 13,179 ​ 189 ​ — ​ 13,368 U.S. GSE commercial collateralized mortgage obligations ​ 63,464 ​ 1,386 ​ ( 58 ) ​ 64,792 Other asset backed securities ​ 24,250 ​ — ​ ( 356 ) ​ 23,894 Corporate bonds ​ 49,000 ​ — ​ ( 1,935 ) ​ 47,065 Total available for sale ​ 461,591 ​ 6,965 ​ ( 2,475 ) ​ 466,081 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross ​ Gross ​ Estimated ​ ​ Amortized ​ Unrecognized ​ Unrecognized ​ Fair (In thousands) Cost Gains Losses Value Held to maturity: ​ ​ ​ ​ ​ ​ State and municipal obligations ​ 26,886 ​ 1,497 ​ ( 9 ) ​ 28,374 U.S. GSE residential mortgage-backed securities ​ 6,822 ​ 229 ​ — ​ 7,051 U.S. GSE residential collateralized mortgage obligations ​ 25,413 ​ 671 ​ — ​ 26,084 U.S. GSE commercial mortgage-backed securities ​ 16,742 ​ 695 ​ — ​ 17,437 U.S. GSE commercial collateralized mortgage obligations ​ 25,071 ​ 894 ​ — ​ 25,965 Total held to maturity ​ 100,934 ​ 3,986 ​ ( 9 ) ​ 104,911 Total securities ​ $ 562,525 ​ $ 10,951 ​ $ ( 2,484 ) ​ $ 570,992 ​ As of September 30, 2020, none of the Company’s available for sale debt securities were in an unrealized loss position due to credit and therefore no allowance for credit losses on available for sale debt securities was required. Additionally, the calculated allowance for credit losses on held to maturity securities was inconsequential given the high quality composition of the Company’s held to maturity portfolio and therefore no allowance for credit losses was recorded. Accrued interest receivable on securities totaling $ 1.8 million at September 30, 2020 was included in other assets in the consolidated balance sheet and excluded from the amortized cost and estimated fair value totals in the table above. ​ 15 Table of Contents The following table summarizes the amortized cost and estimated fair value of the available for sale and held to maturity investment securities portfolio at December 31, 2019 and the corresponding amounts of gross unrealized gains and losses therein: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ ​ ​ ​ Gross ​ Gross ​ Estimated ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Fair (In thousands) Cost Gains Losses Value Available for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Treasury securities ​ $ 50,833 ​ $ — ​ $ ( 11 ) ​ $ 50,822 U.S. GSE securities ​ ​ 5,000 ​ ​ — ​ ​ ( 5 ) ​ ​ 4,995 State and municipal obligations ​ 34,303 ​ 704 ​ ( 43 ) ​ 34,964 U.S. GSE residential mortgage-backed securities ​ 84,550 ​ 609 ​ ( 468 ) ​ 84,691 U.S. GSE residential collateralized mortgage obligations ​ 278,149 ​ 1,166 ​ ( 1,464 ) ​ 277,851 U.S. GSE commercial mortgage-backed securities ​ 13,656 ​ 23 ​ ( 70 ) ​ 13,609 U.S. GSE commercial collateralized mortgage obligations ​ 102,722 ​ 1,723 ​ ( 289 ) ​ 104,156 Other asset-backed securities ​ 24,250 ​ — ​ ( 849 ) ​ 23,401 Corporate bonds ​ 46,000 ​ — ​ ( 2,198 ) ​ 43,802 Total available for sale ​ 639,463 ​ 4,225 ​ ( 5,397 ) ​ 638,291 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held to maturity: ​ ​ ​ ​ ​ ​ State and municipal obligations ​ 41,008 ​ 809 ​ — ​ 41,817 U.S. GSE residential mortgage-backed securities ​ 8,142 ​ 5 ​ ( 54 ) ​ 8,093 U.S. GSE residential collateralized mortgage obligations ​ 39,936 ​ 624 ​ ( 62 ) ​ 40,498 U.S. GSE commercial mortgage-backed securities ​ 17,215 ​ 102 ​ ( 82 ) ​ 17,235 U.S. GSE commercial collateralized mortgage obligations ​ 27,337 ​ 191 ​ ( 144 ) ​ 27,384 Total held to maturity ​ 133,638 ​ 1,731 ​ ( 342 ) ​ 135,027 Total securities ​ $ 773,101 ​ $ 5,956 ​ $ ( 5,739 ) ​ $ 773,318 ​ The following table summarizes available for sale debt securities with gross unrealized losses for which an allowance for credit losses has not been recorded at September 30, 2020, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ ​ Less than 12 months ​ Greater than 12 months ​ ​ Estimated ​ Gross ​ Estimated ​ Gross ​ ​ Fair ​ Unrealized ​ Fair ​ Unrealized (In thousands) Value Losses Value Losses Available for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ State and municipal obligations ​ $ 1,513 $ ( 9 ) ​ $ — $ — U.S. GSE residential mortgage-backed securities ​ 50,124 ​ ( 36 ) ​ 154 ​ ( 6 ) U.S. GSE residential collateralized mortgage obligations ​ 22,831 ​ ( 75 ) ​ — ​ — U.S. GSE commercial collateralized mortgage obligations ​ 17,575 ​ ( 58 ) ​ — ​ — Other asset backed securities ​ — ​ — ​ 3,394 ​ ( 356 ) Corporate bonds ​ 12,805 ​ ( 194 ) ​ 29,259 ​ ( 1,741 ) Total available for sale ​ $ 104,848 $ ( 372 ) ​ $ 32,807 $ ( 2,103 ) ​ 16 Table of Contents The following table summarizes securities with gross unrealized losses at December 31, 2019, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ ​ Less than 12 months ​ Greater than 12 months ​ ​ Estimated ​ Gross ​ Estimated ​ Gross ​ ​ Fair ​ Unrealized ​ Fair ​ Unrealized (In thousands) Value Losses Value Losses Available for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Treasury securities ​ $ 50,822 ​ $ ( 11 ) ​ $ — ​ $ — U.S. GSE securities ​ ​ — ​ ​ — ​ ​ 4,995 ​ ​ ( 5 ) State and municipal obligations ​ 4,982 ​ ( 42 ) ​ 76 ​ ( 1 ) U.S. GSE residential mortgage-backed securities ​ 2,935 ​ ( 30 ) ​ 39,617 ​ ( 438 ) U.S. GSE residential collateralized mortgage obligations ​ 81,377 ​ ( 480 ) ​ 93,403 ​ ( 984 ) U.S. GSE commercial mortgage-backed securities ​ 6,648 ​ ( 70 ) ​ — ​ — U.S. GSE commercial collateralized mortgage obligations ​ 28,710 ​ ( 145 ) ​ 9,614 ​ ( 144 ) Other asset-backed securities ​ — ​ — ​ 23,401 ​ ( 849 ) Corporate bonds ​ — ​ — ​ 43,802 ​ ( 2,198 ) Total available for sale ​ $ 175,474 $ ( 778 ) ​ $ 214,908 $ ( 4,619 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held to maturity: ​ ​ ​ ​ ​ ​ U.S. GSE residential mortgage-backed securities ​ — ​ — ​ 7,268 ​ ( 54 ) U.S. GSE residential collateralized mortgage obligations ​ 6,750 ​ ( 17 ) ​ 6,105 ​ ( 45 ) U.S. GSE commercial mortgage-backed securities ​ — ​ — ​ 5,034 ​ ( 82 ) U.S. GSE commercial collateralized mortgage obligations ​ 13,038 ​ ( 57 ) ​ 4,300 ​ ( 87 ) Total held to maturity ​ $ 19,788 ​ $ ( 74 ) ​ $ 22,707 ​ $ ( 268 ) ​ Other-Than-Temporary Impairment Management evaluates available for sale debt securities in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors. Consideration is given to (1) the extent to which the fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value. ​ At September 30, 2020, substantially all of the securities in an unrealized loss position had a variable interest rate and the cause of the temporary impairment was directly related to changes in interest rates. The Company generally views changes in fair value caused by changes in interest rates as temporary, which is consistent with its experience. Other asset backed securities are comprised of student loan backed bonds which are guaranteed by the U.S. Department of Education for 97% to 100% of principal. Additionally, the bonds have credit support of 3% to 5% and have maintained their Aa3 Moody's rating during the time the Bank has owned them. The corporate bonds within the portfolio have all maintained an investment grade rating by either Moody's or Standard and Poor's. None of the unrealized losses is related to credit losses. The Company does not have the intent to sell these securities and it is more likely than not that it will not be required to sell the securities before their anticipated recovery. The issuers continue to make timely principal and interest payments on the debt. The fair value is expected to recover as the securities approach maturity. Therefore, the Company does not consider these securities to be other-than-temporarily impaired at September 30, 2020. Sales and Calls of Securities There were $ 78.4 million in proceeds from sales of securities with gross gains of $ 3.5 million and gross losses of $ 7 thousand realized for the three months ended September 30, 2020. There were $ 153.0 million of proceeds from sales of securities with gross gains of $ 4.3 million realized and gross losses of $ 0.8 million realized for the nine months ended September 30, 2020. There were no proceeds from sale of securities for the three ended September 30, 2019. There were $ 46.5 million in proceeds from sales of securities with gross gain $ 0.2 million realized for the nine months ended September 30, 2019. There were $ 1.3 million and $ 13.5 million of proceeds from calls of securities for the three and nine months ended September 30, 2020, respectively. There were $ 10.0 million and $ 20.3 million of proceeds from calls of securities for the three and nine months ended September 30, 2019, respectively. 17 Table of Contents Pledged Securities Securities having a fair value of $ 451.8 million and $ 402.2 million at September 30, 2020 and December 31, 2019, respectively, were pledged to secure public deposits and Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) overnight borrowings. Trading Securities The Company did not hold any trading securities during the nine months ended September 30, 2020 or the year ended December 31, 2019. Restricted Securities The Bank is a member of the FHLB of New York. Members are required to own a particular amount of stock based on the level of borrowings and other factors and may invest in additional amounts. The Bank is a member of the Atlantic Central Banker's Bank (“ACBB”) and is required to own ACBB stock. The Bank is also a member of the FRB system and required to own FRB stock. FHLB, ACBB and FRB stock is carried at cost and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. The Bank owned $ 23.4 million and $ 32.9 million in FHLB, ACBB and FRB stock at September 30, 2020 and December 31, 2019, respectively. These amounts were reported as restricted securities in the consolidated balance sheets. As of September 30, 2020 and 2019, there was no issuer, other than the U.S. Government and its sponsored entities, where the bank had invested holdings that exceeded 10% of consolidated stockholders’ equity. The following table summarizes the amortized cost and estimated fair value by contractual maturity of the available for sale and held to maturity investment securities portfolio at September 30, 2020. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ ​ Amortized ​ Estimated (In thousands) Cost Fair Value Maturity ​ ​ ​ ​ ​ ​ Available for sale: ​ ​ ​ ​ ​ ​ Within one year $ 4,133 $ 4,138 One to five years ​ ​ 46,363 ​ ​ 46,402 Five to ten years ​ ​ 43,556 ​ ​ 43,457 Beyond ten years ​ ​ 367,539 ​ ​ 372,084 Total $ 461,591 $ 466,081 ​ ​ ​ ​ ​ ​ ​ Held to maturity: ​ ​ ​ ​ ​ ​ Within one year $ 1,670 $ 1,676 One to five years ​ ​ 28,305 ​ ​ 29,522 Five to ten years ​ ​ 14,216 ​ ​ 15,081 Beyond ten years ​ ​ 56,743 ​ ​ 58,632 Total $ 100,934 $ 104,911 ​ ​ 18 Table of Contents 5. FAIR VALUE The Company adopted ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities during the first quarter of 2018 . ​ FASB ASC No. 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (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. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes 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 a reporting entity's own assumptions about the assumptions that market participants would use in pricing an asset or liability. The following tables summarize assets and liabilities measured at fair value on a recurring basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ ​ ​ ​ Fair Value Measurements Using: ​ ​ ​ ​ Quoted Prices ​ ​ ​ ​ ​ ​ ​ In Active ​ Significant ​ ​ ​ ​ ​ ​ Markets for ​ Other ​ Significant ​ ​ ​ ​ Identical ​ Observable ​ Unobservable ​ ​ Carrying ​ Assets ​ Inputs ​ Inputs (In thousands) Value (Level 1) (Level 2) (Level 3) Financial assets: ​ ​ ​ ​ ​ ​ ​ Available for sale securities: ​ ​ ​ ​ ​ ​ ​ State and municipal obligations ​ $ 36,504 ​ ​ $ 36,504 ​ U.S. GSE residential mortgage-backed securities ​ 118,876 ​ ​ 118,876 ​ U.S. GSE residential collateralized mortgage obligations ​ 161,582 ​ ​ 161,582 ​ U.S. GSE commercial mortgage-backed securities ​ 13,368 ​ ​ 13,368 ​ U.S. GSE commercial collateralized mortgage obligations ​ 64,792 ​ ​ 64,792 ​ Other asset-backed securities ​ 23,894 ​ ​ 23,894 ​ Corporate bonds ​ 47,065 ​ ​ 47,065 ​ Total available for sale securities ​ $ 466,081 ​ ​ ​ $ 466,081 ​ Derivatives ​ $ 59,385 ​ ​ ​ $ 59,385 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities: ​ ​ ​ ​ ​ ​ Derivatives ​ $ 67,341 ​ ​ ​ $ 67,341 ​ ​ 19 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ ​ ​ ​ Fair Value Measurements Using: ​ ​ ​ Quoted Prices ​ ​ ​ ​ ​ ​ ​ In Active ​ Significant ​ ​ ​ ​ ​ ​ Markets for ​ Other ​ Significant ​ ​ ​ ​ Identical ​ Observable ​ Unobservable ​ ​ Carrying ​ Assets ​ Inputs ​ Inputs (In thousands) Value (Level 1) (Level 2) (Level 3) Financial assets: ​ ​ ​ ​ ​ ​ ​ ​ Available for sale securities: ​ ​ ​ ​ ​ ​ ​ ​ U.S. Treasury securities ​ $ 50,822 ​ ​ ​ $ 50,822 ​ ​ U.S. GSE securities ​ ​ 4,995 ​ ​ ​ ​ 4,995 ​ State and municipal obligations ​ 34,964 ​ ​ 34,964 ​ U.S. GSE residential mortgage-backed securities ​ 84,691 ​ ​ 84,691 ​ U.S. GSE residential collateralized mortgage obligations ​ 277,851 ​ ​ 277,851 ​ U.S. GSE commercial mortgage-backed securities ​ 13,609 ​ ​ 13,609 ​ U.S. GSE commercial collateralized mortgage obligations ​ 104,156 ​ ​ 104,156 ​ Other asset-backed securities ​ 23,401 ​ ​ 23,401 ​ Corporate bonds ​ 43,802 ​ ​ 43,802 ​ Total available for sale securities ​ $ 638,291 ​ ​ ​ $ 638,291 ​ Derivatives ​ $ 15,437 ​ ​ ​ $ 15,437 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities: ​ ​ ​ ​ ​ ​ Derivatives ​ $ 16,645 ​ ​ ​ $ 16,645 ​ ​ The following tables summarize assets measured at fair value on a non-recurring basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ ​ ​ ​ ​ Fair Value Measurements Using: ​ ​ ​ Quoted Prices ​ ​ ​ ​ ​ ​ ​ In Active ​ Significant ​ ​ ​ ​ ​ Markets for ​ Other ​ Significant ​ ​ ​ ​ Identical ​ Observable ​ Unobservable ​ ​ Carrying ​ Assets ​ Inputs ​ Inputs (In thousands) Value (Level 1) (Level 2) (Level 3) Loans held for sale ​ $ 10,000 ​ ​ ​ ​ $ 10,000 Individually evaluated loans ​ $ 6,954 ​ $ 4,014 $ 2,940 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ ​ ​ ​ ​ Fair Value Measurements Using: ​ ​ ​ ​ Quoted Prices ​ ​ ​ ​ ​ ​ ​ ​ In Active ​ Significant ​ ​ ​ ​ ​ ​ ​ Markets for ​ Other ​ Significant ​ ​ ​ ​ ​ Identical ​ Observable ​ Unobservable ​ ​ Carrying ​ ​ Assets ​ Inputs ​ Inputs (In thousands) Value ​ (Level 1) (Level 2) (Level 3) Loans held for sale ​ $ 12,643 ​ ​ ​ ​ $ 12,643 Impaired loans ​ $ 6,981 ​ ​ $ 6,981 ​ Loans held for sale at September 30, 2020 had a carrying amount of $ 10.0 million which is net of a $ 2.6 million valuation allowance. Loans held for sale at December 31, 2019 had a carrying amount of $ 12.6 million with no valuation allowance recorded. Individually evaluated commercial and industrial loans with an allowance for credit losses at September 30, 2020 had a carrying amount of $ 7.0 million, which is made up of the outstanding balance of $ 14.0 million, net of a valuation allowance of $ 7.0 million. This resulted in an additional provision for credit losses of $ 2.6 million that is included in the amount reported on the consolidated statements of income for the nine months ended September 30, 2020. Impaired loans (prior to the adoption of CECL standard) with an allowance for credit losses at December 31, 2019 had a carrying amount of $ 7.0 million, which is made up of the outstanding balance of $ 11.7 million, net of a valuation allowance of $ 4.7 million. There was no other real estate owned at September 30, 2020 and December 31, 2019. 20 Table of Contents The Company used the following methods and assumptions in estimating the fair value of its financial instruments: Securities Available for Sale and Held to Maturity: If available, the estimated fair values are based on independent dealer quotations on nationally recognized securities exchanges and are classified as Level 1. For securities where quoted prices are not available, fair value is based on matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities resulting in a Level 2 classification. Derivatives: Represents interest rate swaps for which the estimated fair values are based on valuation models using observable market data as of the measurement date resulting in a Level 2 classification. Loans Held for Sale: Loans held for sale are carried at the lower of cost or fair value. The fair value of loans held for sale is initially determined using the price we expect to receive for the loans based on commitments received from third-party investors. Thereafter, loans held for sale are re-evaluated quarterly to determine if a valuation allowance is required to adjust for a decline in fair value below the carrying amount. Subsequent fair value determinations are based on commitments received from third party investors and/or through appraisals using a single valuation approach or a combination of approaches including comparable sales and the income approach. Appraisals may be discounted for changes in market conditions. These valuation methods result in a Level 3 classification. Individually Evaluated Loans with an ACL (Impaired Loans with an ACL prior to the adoption of the CECL Standard) and Other Real Estate Owned: For collateral dependent loans where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the loan to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. The fair value of real estate collateral is determined based on recent appraised values. The fair value of other real estate owned is also determined based on recent appraised values less the estimated cost to sell. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Adjustments may relate to location, square footage, condition, amenities, market rate of leases as well as timing of comparable sales. All appraisals undergo a second review process to ensure that the methodology employed and the values derived are reasonable. Non-real estate collateral, which includes inventory and taxi medallions, may be valued using an appraisal, net book value per the borrower’s financial statements, aging reports, or by reference to market activity, 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 borrower and its business. These valuation methods result in a Level 3 classification. Appraisals for collateral-dependent loans are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, the Appraisal and Credit Departments review the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Management also considers the appraisal values for commercial properties associated with current loan origination activity. Collectively, this information is reviewed to help assess current trends in commercial property values. For each collateral dependent loan, management considers information that relates to the type of property to determine if such properties may have appreciated or depreciated in value since the date of the most recent appraisal. Adjustments to fair value are made only when the analysis indicates a probable decline in collateral values. Adjustments made in the appraisal process are not deemed material to the overall consolidated financial statements given the level of collateral dependent loans measured at fair value on a non-recurring basis. For non-collateral dependent loans, estimated fair value may be based on the observable market price for the loan, if available, resulting in a Level 1 classification. ​ 21 Table of Contents The following tables summarize the estimated fair values and recorded carrying amounts of the Company's financial instruments at September 30, 2020 and December 31, 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ ​ ​ ​ Fair Value Measurements Using: ​ ​ ​ ​ ​ ​ ​ ​ Significant ​ ​ ​ ​ ​ Quoted Prices In Other Significant ​ ​ ​ Active Markets for Observable Unobservable ​ ​ ​ ​ Carrying Identical Assets Inputs Inputs ​ Total (In thousands) Amount (Level 1) (Level 2) (Level 3) Fair Value Financial assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and due from banks $ 94,892 $ 94,892 $ — $ — $ 94,892 Interest-bearing deposits with banks ​ 615,575 ​ 615,575 ​ — ​ — ​ 615,575 Securities available for sale ​ 466,081 ​ — ​ 466,081 ​ — ​ 466,081 Securities restricted ​ 23,362 ​ n/a ​ n/a ​ n/a ​ n/a Securities held to maturity ​ 100,934 ​ — ​ 104,911 ​ — ​ 104,911 Loans held for sale ​ ​ 10,000 ​ ​ — ​ ​ — ​ ​ 10,000 ​ ​ 10,000 Loans, net ​ 4,595,999 ​ — ​ — ​ 4,645,937 ​ 4,645,937 Derivatives ​ 59,385 ​ — ​ 59,385 ​ — ​ 59,385 Accrued interest receivable ​ 15,823 ​ — ​ 1,790 ​ 14,033 ​ 15,823 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Certificates of deposit ​ 290,402 ​ — ​ 293,552 ​ — ​ 293,552 Demand and other deposits ​ 5,078,667 ​ 5,078,667 ​ — ​ — ​ 5,078,667 FHLB advances ​ 215,000 ​ — ​ 222,342 ​ — ​ 222,342 Repurchase agreements ​ 1,353 ​ — ​ 1,353 ​ — ​ 1,353 Subordinated debentures ​ 79,024 ​ — ​ 87,615 ​ — ​ 87,615 Derivatives ​ 67,341 ​ — ​ 67,341 ​ — ​ 67,341 Accrued interest payable ​ 328 ​ — ​ 328 ​ — ​ 328 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ ​ ​ ​ Fair Value Measurements Using: ​ ​ ​ ​ ​ ​ ​ ​ Significant ​ ​ ​ ​ ​ ​ Quoted Prices In Other Significant ​ ​ ​ ​ Active Markets for Observable Unobservable ​ ​ ​ ​ Carrying Identical Assets Inputs Inputs ​ Total (In thousands) Amount (Level 1) (Level 2) (Level 3) Fair Value Financial assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and due from banks $ 77,693 $ 77,693 $ — $ — $ 77,693 Interest-bearing deposits with banks ​ 39,501 ​ 39,501 ​ — ​ — ​ 39,501 Securities available for sale ​ 638,291 ​ — ​ 638,291 ​ — ​ 638,291 Securities restricted ​ 32,879 ​ n/a ​ n/a ​ n/a ​ n/a Securities held to maturity ​ 133,638 ​ — ​ 135,027 ​ — ​ 135,027 Loans held for sale ​ ​ 12,643 ​ ​ — ​ ​ — ​ ​ 12,643 ​ ​ 12,643 Loans, net ​ 3,647,499 ​ — ​ — ​ 3,685,770 ​ 3,685,770 Derivatives ​ 15,437 ​ — ​ 15,437 ​ — ​ 15,437 Accrued interest receivable ​ 10,908 ​ — ​ 2,181 ​ 8,727 ​ 10,908 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Certificates of deposit ​ 307,977 ​ — ​ 308,660 ​ — ​ 308,660 Demand and other deposits ​ 3,506,670 ​ 3,506,670 ​ — ​ — ​ 3,506,670 FHLB advances ​ 435,000 ​ 195,000 ​ 239,622 ​ — ​ 434,622 Repurchase agreements ​ 999 ​ — ​ 999 ​ — ​ 999 Subordinated debentures ​ 78,920 ​ — ​ 81,010 ​ — ​ 81,010 Derivatives ​ 16,645 ​ — ​ 16,645 ​ — ​ 16,645 Accrued interest payable ​ 1,467 ​ — ​ 1,467 ​ — ​ 1,467 ​ ​ 22 Table of Contents 6. LOANS Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal amount outstanding, net of partial charge-offs, deferred origination costs and fees and purchase premiums and discounts. Loan origination and commitment fees and certain direct and indirect costs incurred in connection with loan originations are deferred and amortized to income over the life of the related loans as an adjustment to yield. When a loan prepays, the remaining unamortized net deferred origination fees or costs are recognized in the current year. Interest on loans is credited to income based on the principal outstanding during the period. The Company has made a policy election to exclude accrued interest from the amortized cost basis of loans and report accrued interest separately from the related loan balance in other assets on consolidated balance sheets. Past due status is based on the contractual terms of the loan. Loans that are 90 days past due are automatically placed on non-accrual and previously accrued interest is reversed and charged against interest income. However, if the loan is in the process of collection and the Bank has reasonable assurance that the loan will be fully collectable based upon an individual loan evaluation assessing such factors as collateral and collectability, accrued interest will be recognized as earned. If a payment is received when a loan is non-accrual or a troubled debt restructuring (“TDR”) loan is non-accrual, the payment is applied to the principal balance. A TDR loan performing in accordance with its modified terms is maintained on accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Loans that were acquired through the acquisition of Community National Bank on June 19, 2015 and First National Bank of New York on February 14, 2014, were initially recorded at fair value with no carryover of the related allowance for loan losses. After acquisition, losses are recognized through the allowance for loan losses. Determining fair value of the loans involves estimating the amount and timing of expected principal and interest cash flows to be collected on the loans and discounting those cash flows at a market interest rate. Some of the loans at the time of acquisition showed evidence of credit deterioration since origination. These loans were considered purchased credit impaired (“PCI”) loans. As of December 31, 2019, the remaining balance of PCI loans was immaterial to the Company’s financial condition and results of operations. Unless otherwise noted, the above policy is applied consistently to all loan segments. Allowance for Credit Losses On January 1, 2020, the Company adopted the CECL Standard, which requires that loans held for investment be accounted for under the current expected credit losses model. The allowance for credit losses is established and maintained through a provision for credit losses based on expected losses inherent in the Company’s loan portfolio. Management evaluates the adequacy of the allowance on a quarterly basis. Management monitors its entire loan portfolio regularly, with consideration given to detailed analysis of classified loans, repayment patterns, past loss experience, various types of concentrations of credit, current economic conditions, and reasonable and supportable forecasts. Additions to the allowance are charged to expense and realized losses, net of recoveries, are charged against the allowance. The loan loss estimation process involves procedures to appropriately consider the unique characteristics of the Company’s loan portfolio segments. These segments are further disaggregated into loan risk ratings, the level at which credit risk is monitored. When computing allowance levels, credit loss assumptions are estimated using a model that categorizes loan pools based on expected loss history, delinquency status and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and provision for credit losses in those future periods. Credit quality is assessed and monitored by evaluating various attributes and the results of those evaluations are utilized in our process for estimation of expected credit losses. The allowance level is influenced by loan volumes, loan risk rating migration, historic loss experience and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. The methodology for estimating the amount of expected credit losses reported in the 23 Table of Contents allowance for credit losses has two basic components: (1) an asset-specific component involving individual loans that do not share risk characteristics with other loans and the measurement of expected credit losses for such individual loans; and (2) a pooled component for estimated expected credit losses for pools of loans that share similar risk characteristics. Loans that do not share similar credit risk characteristics For a loan that does not share risk characteristics with other loans, expected credit loss is measured based on net realizable value, that is, the difference between the discounted value of the expected future cash flows, based on the original effective interest rate, and the amortized cost basis of the loan. For these loans, the Company recognizes expected credit loss equal to the amount by which the net realizable value of the loan is less than the amortized cost basis of the loan (which is net of previous charge-offs), except when the loan is collateral dependent, that is, when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. In these cases, expected credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral. The fair value of the collateral is adjusted for the estimated costs to sell the loan if repayment or satisfaction of a loan is dependent on the sale (rather than only on the operation) of the collateral. The fair value of real estate collateral is determined based on recent appraised values. Appraisals are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. All appraisals undergo a second review process to ensure that the methodology employed and the values derived are reasonable. Generally, collateral values for real estate loans for which measurement of expected losses is dependent on collateral values are updated every twelve months. 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 borrower and its business. Once the expected credit loss amount is determined, an allowance is provided for equal to the calculated expected credit loss and included in the allowance for credit losses. Pursuant to the Company’s policy, credit losses must be charged-off in the period the loans, or portions thereof, are deemed uncollectable. Loans that share similar credit risk characteristics In estimating the component of the allowance for credit losses for loans that share similar risk characteristics with other loans, such loans are segmented into loan types. Loans are designated into loan pools with similar risk characteristics based on product type in conjunction with other homogeneous characteristics. Loan types include commercial real estate mortgages, owner and non-owner occupied; multi-family mortgage loans; residential real estate mortgages and home equity loans; commercial, industrial and agricultural loans, real estate construction and land loans; and consumer loans. In determining the allowance for credit losses, the Company derives an estimated credit loss assumption from a model that categorizes loan pools based on loan type and further segmented by risk rating. This model is known as Probability of Default/Loss Given Default, utilizing a Transition Matrix approach. This model calculates an expected loss percentage for each loan pool by considering the probability of default, based upon the historical transition or migration of loans from performing (various pass ratings) to criticized, and classified risk ratings to default by risk rating buckets using life-of-loan analysis runout periods for all loan segments, and the historical severity of loss, based on the aggregate net lifetime losses (loss given default) per loan pool. The default trigger, which is defined as the earlier of ninety days past-due or non-accrual status, and severity factors used to calculate the allowance for credit losses for loans in pools that share similar risk characteristics with other loans, are adjusted for differences between the historical period used to calculate historical default and loss severity rates and expected conditions over the remaining lives of the loans in the portfolio. These factors include: (1) lending policies and procedures; (2) international, national, regional and local economic business conditions and developments that affect the collectability of the portfolio, including the condition of various markets; (3) the nature and volume of the loan portfolio including the terms of the loans; (4) the experience, ability, and depth of the lending management and other relevant staff; (5) the volume and severity of past due and adversely classified or graded loans and the volume of non-accrual loans; (6) the quality of our loan review system; (7) the value of underlying collateral for collateralized loans; (8) the existence and effect of any concentrations of credit, and changes in the level of such concentrations; and (9) the effect of external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the existing portfolio. Such factors are used to adjust the historical probabilities of default and severity of loss for current conditions that are not reflective of the model results. In addition, the economic factor includes 24 Table of Contents management expectation of future conditions based on a reasonable and supportable forecast of the economy. To the extent the lives of the loans in the portfolio extend beyond the period for which a reasonable and supportable forecast can be made (currently two years), the Bank reverts immediately back to the historical rates of default and severity of loss. Management believes that this transition approach to the Probability of Default/Loss Given Default is a relevant calculation of expected credit losses as there is sufficient volume as well as movement in the risk ratings due to the initial grading system as well as timely updates to risk ratings when necessary. Credit risk ratings are based on management’s evaluation of a credit’s cash flow, collateral, guarantor support, financial disclosures, industry trends and strength of borrowers’ management. Future additions or reductions to the allowance may be necessary based on changes in economic, market or other conditions. Changes in estimates could result in a material change in the allowance. In addition, various regulatory agencies, as an integral part of the examination process, periodically review the allowance for credit losses. Such agencies may require the Bank to recognize adjustments to the allowance based on their judgments of the information available to them at the time of their examination. A loan is considered a potential charge-off when it is in default of either principal or interest for a period of 90, 120 or 180 days, depending upon the loan type, as of the end of the prior month. In addition to delinquency criteria, other triggering events may include, but are not limited to, notice of bankruptcy by the borrower or guarantor, death of the borrower, and deficiency balance from the sale of collateral. Unless otherwise noted, the above policy is applied consistently to all loan portfolio segments. Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as unused lines of credit, commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded on the balance sheet when they are funded. In accordance with the CECL Standard, the Company maintains a separate reserve for off-balance sheet credit instruments, which is included in other liabilities on the consolidated statements of financial condition. Management estimates the amount of expected losses by calculating a commitment usage factor over the contractual period for exposures that are not unconditionally cancellable by the Company and applying the loss factors, current conditions and forecasting adjustments used in the allowance for credit loss methodology to the results of the usage calculation to estimate the liability for credit losses related to unfunded commitments for each loan type. No credit loss estimate is reported for off-balance sheet credit exposures that are unconditionally cancellable by the Company. At September 30, 2020, the reserve for off-balance sheet credit exposures was immaterial to the Company’s consolidated statements of financial condition and results of operations. ​ 25 Table of Contents The following table sets forth the major classifications of loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) September 30, 2020 December 31, 2019 Commercial real estate mortgage loans: ​ ​ ​ ​ ​ ​ Owner occupied ​ $ 532,597 ​ $ 531,088 Non-owner occupied ​ ​ 1,097,290 ​ ​ 1,034,599 Multi-family mortgage loans ​ ​ 853,263 ​ 812,174 Residential real estate mortgage loans ​ 449,984 ​ 493,144 Commercial, industrial and agricultural loans ​ 1,631,167 ​ 679,444 Real estate construction and land loans ​ 66,826 ​ 97,311 Installment/consumer loans ​ 22,520 ​ 24,836 Total loans ​ 4,653,647 ​ 3,672,596 Net deferred loan (fees) costs ​ ( 14,174 ) ​ 7,689 Total loans held for investment ​ 4,639,473 ​ 3,680,285 Allowance for credit losses ​ ( 43,474 ) ​ ( 32,786 ) Loans, net ​ $ 4,595,999 ​ $ 3,647,499 ​ Included in commercial, industrial and agricultural loans at September 30, 2020 was $ 960.4 million of Paycheck Protection Program (“PPP”) loans. The shift from net deferred loan costs at December 31, 2019 to net deferred loan fees at September 30, 2020 was the result of the net deferred loan fees associated with the PPP loans. Accrued interest receivable on loans totaling $ 14.0 million at September 30, 2020 and $ 8.7 million at December 31, 2019 was included in other assets in the consolidated balance sheet and excluded from the table above. The increase in accrued interest receivable from December 31, 2019 relates primarily to accrued interest on PPP loans. As of September 30, 2020 and December 31, 2019, one commercial real estate (“CRE”) mortgage loan totaling $ 10.0 million and $ 12.6 million, respectively, was classified as held for sale. The loan was reclassified from loans held for investment to loans held for sale and written down from $ 16.3 million to the loan’s estimated fair value of $ 12.6 million, as of June 30, 2019, through a $ 3.7 million charge-off during the 2019 second quarter. During the 2020 second quarter, an additional write-down was recognized for the decrease in the estimated fair value of the loan by $ 2.6 million to $ 10.0 million through a valuation allowance which was charged against non-interest income in the consolidated statements of income. Lending Risk The principal business of the Bank is lending in CRE mortgage loans, multi-family mortgage loans, residential real estate mortgage loans, construction loans, home equity loans, commercial, industrial and agricultural loans, land loans and consumer loans. The Bank considers its primary lending area to be Nassau and Suffolk Counties located on Long Island and the New York City boroughs. A substantial portion of the Bank's loans are secured by real estate in these areas. Accordingly, the ultimate collectability of the loan portfolio is susceptible to changes in market and economic conditions in this region. Commercial Real Estate Mortgages Loans in this classification include income producing investment properties and owner-occupied real estate used for business purposes. The underlying properties are located largely in the Bank's primary market area. The cash flows of the income producing investment properties are adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, will have an effect on credit quality. Generally, management seeks to obtain annual financial information for borrowers with loans in excess of $ 1.0 million in this category. In the case of owner-occupied real estate used for business purposes, a weakened economy and resultant decreased consumer and/or business spending will have an adverse effect on credit quality. Multi-Family Mortgages Loans in this classification include income producing residential investment properties of five or more families. Loans are made to established owners with a proven and demonstrable record of strong performance. Loans are secured by a first mortgage lien on the subject property with a loan to value ratio generally not exceeding 75 %. Repayment is derived 26 Table of Contents generally from the rental income generated from the property and may be supplemented by the owners' personal cash flow. Credit risk arises with an increase in vacancy rates, property mismanagement and the predominance of non-recourse loans that are customary in the industry. Residential Real Estate Mortgages and Home Equity Loans Loans in these classifications are generally secured by owner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, can have an effect on the credit quality in this loan class. The Bank generally does not originate loans with a loan-to-value ratio greater than 80 % and does not grant subprime loans. Commercial, Industrial and Agricultural Loans Loans in this classification are made to businesses and include term loans, lines of credit, senior secured loans to corporations, equipment financing and taxi medallion loans. Generally, these loans are secured by assets of the business and repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer and/or business spending, will have an effect on the credit quality in this loan class. Real Estate Construction and Land Loans Loans in this classification primarily include land loans to local individuals, contractors and developers for developing the land for sale or for the purpose of making improvements thereon. Repayment is derived primarily from sale of the lots/units including any pre-sold units. Credit risk is affected by market conditions, time to sell at an adequate price and cost overruns. To a lesser extent, this class includes commercial development projects that the Company finances, which in most cases require interest only during construction, and then convert to permanent financing. Construction delays, cost overruns, market conditions and the availability of permanent financing, to the extent such permanent financing is not being provided by the Bank, all affect the credit risk in this loan class. Installment and Consumer Loans Loans in this classification may be either secured or unsecured. Repayment is dependent on the credit quality of the individual borrower and, if applicable, sale of the collateral securing the loan, such as automobiles. Therefore, the overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this loan class. Credit Quality Indicators The Company categorizes loans into risk categories of pass, watch, special mention, substandard and doubtful based on relevant information about the ability of borrowers to service their debt including repayment patterns, past loss experience, current economic conditions, and various types of concentrations of credit. Assigned risk rating grades are continuously updated as new information is obtained. Loans risk rated special mention, substandard and doubtful are reviewed on a quarterly basis. The Company uses the following definitions for risk rating grades: Pass: Loans classified as pass include current loans performing in accordance with contractual terms, pools of homogenous residential real estate and installment/consumer loans that are not individually risk rated and loans which do not exhibit certain risk factors that require greater than usual monitoring by management. Watch: Loans classified as watch are considered pass rated loans. These loans carry additional risk factors above those of pass loans but do not have all the risk characteristics of loans classified as special mention. Such risk factors require monitoring and if left uncorrected, could lead these loans to be downgraded. Special mention: Loans classified as special mention, while generally not delinquent, have potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the Bank's credit position at some future date. 27 Table of Contents Substandard: Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. There is a distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Doubtful: Loans classified as doubtful have all the weaknesses inherent in a substandard loan, may also be in delinquency status and have defined weaknesses based on currently existing facts, conditions and values making collection or liquidation in full highly questionable and improbable. The following tables represent loans categorized by internally assigned risk grades as of September 30, 2020 and December 31, 2019. In the September 30, 2020 table, the years noted represent the year of origination for non-revolving loans. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 (In thousands) ​ 2020 ​ 2019 ​ 2018 ​ 2017 ​ 2016 ​ 2015 and Prior ​ Revolving ​ Revolving-Term ​ Total Commercial real estate owner occupied: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 69,830 ​ $ 91,050 ​ $ 48,771 ​ $ 66,855 ​ $ 25,485 ​ $ 156,047 ​ $ — ​ $ — ​ $ 458,038 Watch ​ ​ 755 ​ ​ 1,380 ​ ​ 10,172 ​ ​ 10,809 ​ ​ 3,456 ​ ​ 27,372 ​ ​ — ​ ​ — ​ ​ 53,944 Special mention ​ ​ — ​ ​ 553 ​ ​ 598 ​ ​ 10,918 ​ ​ 3,525 ​ ​ 3,837 ​ ​ — ​ ​ — ​ ​ 19,431 Substandard ​ ​ 472 ​ ​ — ​ ​ — ​ ​ 451 ​ ​ — ​ ​ 261 ​ ​ — ​ ​ — ​ ​ 1,184 Total commercial real estate owner occupied ​ ​ 71,057 ​ ​ 92,983 ​ ​ 59,541 ​ ​ 89,033 ​ ​ 32,466 ​ ​ 187,517 ​ ​ — ​ ​ — ​ ​ 532,597 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate non-owner occupied: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ ​ 152,235 ​ ​ 253,987 ​ ​ 120,314 ​ ​ 185,936 ​ ​ 55,868 ​ ​ 240,773 ​ ​ — ​ ​ — ​ ​ 1,009,113 Watch ​ ​ 5,292 ​ ​ 7,700 ​ ​ 2,930 ​ ​ 10,783 ​ ​ 17,976 ​ ​ 33,128 ​ ​ — ​ ​ — ​ ​ 77,809 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 290 ​ ​ — ​ ​ — ​ ​ 290 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ 9,006 ​ ​ — ​ ​ 1,072 ​ ​ — ​ ​ — ​ ​ 10,078 Total commercial real estate non-owner occupied ​ ​ 157,527 ​ ​ 261,687 ​ ​ 123,244 ​ ​ 205,725 ​ ​ 73,844 ​ ​ 275,263 ​ ​ — ​ ​ — ​ ​ 1,097,290 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Multi-family: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ ​ 106,693 ​ ​ 294,605 ​ ​ 40,993 ​ ​ 99,331 ​ ​ 134,851 ​ ​ 113,283 ​ ​ — ​ ​ — ​ ​ 789,756 Watch ​ ​ — ​ ​ 2,724 ​ ​ — ​ ​ 23,634 ​ ​ 23,851 ​ ​ 12,906 ​ ​ — ​ ​ — ​ ​ 63,115 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 392 ​ ​ — ​ ​ — ​ ​ 392 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total multi-family ​ ​ 106,693 ​ ​ 297,329 ​ ​ 40,993 ​ ​ 122,965 ​ ​ 158,702 ​ ​ 126,581 ​ ​ — ​ ​ — ​ ​ 853,263 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ ​ 15,706 ​ ​ 32,035 ​ ​ 76,905 ​ ​ 100,094 ​ ​ 27,184 ​ ​ 116,745 ​ ​ 51,751 ​ ​ 7,800 ​ ​ 428,220 Watch ​ ​ — ​ ​ 466 ​ ​ 408 ​ ​ 323 ​ ​ 562 ​ ​ 1,751 ​ ​ — ​ ​ 1,281 ​ ​ 4,791 Special mention ​ ​ — ​ ​ 1,108 ​ ​ 762 ​ ​ — ​ ​ — ​ ​ 5,722 ​ ​ 798 ​ ​ 718 ​ ​ 9,108 Substandard ​ ​ — ​ ​ — ​ ​ 305 ​ ​ 481 ​ ​ — ​ ​ 6,215 ​ ​ — ​ ​ 864 ​ ​ 7,865 Total residential real estate ​ ​ 15,706 ​ ​ 33,609 ​ ​ 78,380 ​ ​ 100,898 ​ ​ 27,746 ​ ​ 130,433 ​ ​ 52,549 ​ ​ 10,663 ​ ​ 449,984 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial, industrial and agricultural: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ ​ 1,025,066 ​ ​ 73,283 ​ ​ 39,742 ​ ​ 33,565 ​ ​ 21,057 ​ ​ 36,261 ​ ​ 279,990 ​ ​ 5,898 ​ ​ 1,514,862 Watch ​ ​ 8,513 ​ ​ 2,926 ​ ​ 12,960 ​ ​ 3,018 ​ ​ 1,199 ​ ​ 3,541 ​ ​ 39,957 ​ ​ 1,568 ​ ​ 73,682 Special mention ​ ​ 650 ​ ​ 523 ​ ​ 759 ​ ​ 771 ​ ​ 56 ​ ​ 764 ​ ​ 14,055 ​ ​ 2,825 ​ ​ 20,403 Substandard ​ ​ — ​ ​ — ​ ​ 4,767 ​ ​ 3,759 ​ ​ 471 ​ ​ 9,454 ​ ​ 200 ​ ​ 3,569 ​ ​ 22,220 Total commercial, industrial and agricultural ​ ​ 1,034,229 ​ ​ 76,732 ​ ​ 58,228 ​ ​ 41,113 ​ ​ 22,783 ​ ​ 50,020 ​ ​ 334,202 ​ ​ 13,860 ​ ​ 1,631,167 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real estate construction and land loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ ​ 18,833 ​ ​ 23,547 ​ ​ 8,242 ​ ​ 11,406 ​ ​ — ​ ​ 1,778 ​ ​ — ​ ​ — ​ ​ 63,806 Watch ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,551 ​ ​ — ​ ​ 274 ​ ​ — ​ ​ — ​ ​ 1,825 Special mention ​ ​ — ​ ​ — ​ ​ 1,078 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,078 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 117 ​ ​ — ​ ​ — ​ ​ 117 Total real estate construction and land loans ​ ​ 18,833 ​ ​ 23,547 ​ ​ 9,320 ​ ​ 12,957 ​ ​ — ​ ​ 2,169 ​ ​ — ​ ​ — ​ ​ 66,826 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Installment/consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ ​ 1,272 ​ ​ 927 ​ ​ 189 ​ ​ 111 ​ ​ 1 ​ ​ 855 ​ ​ 17,600 ​ ​ 550 ​ ​ 21,505 Watch ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 41 ​ ​ 41 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 100 ​ ​ 100 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ 4 ​ ​ — ​ ​ — ​ ​ 50 ​ ​ 820 ​ ​ 874 Total installment/consumer loans ​ ​ 1,272 ​ ​ 927 ​ ​ 189 ​ ​ 115 ​ ​ 1 ​ ​ 855 ​ ​ 17,650 ​ ​ 1,511 ​ ​ 22,520 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Loans ​ $ 1,405,317 ​ $ 786,814 ​ $ 369,895 ​ $ 572,806 ​ $ 315,542 ​ $ 772,838 ​ $ 404,401 ​ $ 26,034 ​ $ 4,653,647 ​ ​ ​ 28 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 (In thousands) Pass Special Mention Substandard Doubtful Total Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ $ 511,444 ​ $ 18,426 ​ $ 1,218 ​ $ — ​ $ 531,088 Non-owner occupied ​ 1,022,208 ​ — ​ 12,391 ​ ​ — ​ ​ 1,034,599 Multi-family ​ 811,770 ​ 404 ​ — ​ ​ — ​ ​ 812,174 Residential real estate ​ 475,949 ​ 12,400 ​ 4,795 ​ ​ — ​ ​ 493,144 Commercial, industrial and agricultural ​ 643,413 ​ 15,670 ​ 20,361 ​ ​ — ​ ​ 679,444 Real estate construction and land loans ​ 95,530 ​ — ​ 1,781 ​ ​ — ​ ​ 97,311 Installment/consumer loans ​ 23,976 ​ 103 ​ 757 ​ ​ — ​ ​ 24,836 Total loans ​ $ 3,584,290 ​ $ 47,003 ​ $ 41,303 ​ $ — ​ $ 3,672,596 ​ Past Due and Non-accrual Loans The following tables represents the aging of past due loans as of September 30, 2020 and December 31, 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ 90+ Days ​ Non-accrual ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 30-59 ​ 60-89 ​ Past Due ​ Including 90 ​ Total Past ​ ​ ​ ​ ​ ​ ​ ​ Days ​ Days ​ And ​ Days or More ​ Due and ​ ​ ​ ​ ​ ​ (In thousands) Past Due Past Due Accruing Past Due Non-accrual Current Total Loans Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ $ 442 ​ $ 1,025 ​ $ — ​ $ 1,653 ​ $ 3,120 ​ $ 529,477 ​ $ 532,597 Non-owner occupied ​ — ​ 14 ​ — ​ 746 ​ 760 ​ 1,096,530 ​ 1,097,290 Multi-family ​ — ​ — ​ — ​ — ​ — ​ 853,263 ​ 853,263 Residential real estate ​ 5,220 ​ 349 ​ — ​ 3,032 ​ 8,601 ​ 441,383 ​ 449,984 Commercial, industrial and agricultural ​ 2,788 ​ 743 ​ — ​ 1,506 ​ 5,037 ​ 1,626,130 ​ 1,631,167 Real estate construction and land loans ​ — ​ — ​ — ​ 117 ​ 117 ​ 66,709 ​ 66,826 Installment/consumer loans ​ 101 ​ — ​ — ​ 10 ​ 111 ​ 22,409 ​ 22,520 Total loans ​ $ 8,551 ​ $ 2,131 ​ $ — ​ $ 7,064 ​ $ 17,746 ​ $ 4,635,901 ​ $ 4,653,647 ​ In the absence of other intervening factors, loans granted payment deferrals related to COVID-19 are not reported as past due or placed on non-accrual status provided the borrowers have met the criteria in the CARES Act or otherwise have met the criteria included in an interagency statement issued by bank regulatory agencies. During the nine months ended September 30, 2020, there was no interest earned on non-accrual loans and $ 151 thousand in accrued interest on non-accrual loans was reversed through interest income. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ ​ ​ ​ ​ ​ ​ ​ 90+ Days ​ Non-accrual ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 30-59 ​ 60-89 ​ Past Due ​ Including 90 ​ Total Past ​ ​ ​ ​ ​ ​ ​ ​ Days ​ Days ​ And ​ Days or More ​ Due and ​ ​ ​ ​ ​ ​ (In thousands) Past Due Past Due Accruing Past Due Non-accrual Current Total Loans Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ $ 917 ​ $ 433 ​ $ — ​ $ 225 ​ $ 1,575 ​ $ 529,513 ​ $ 531,088 Non-owner occupied ​ 98 ​ — ​ — ​ 512 ​ 610 ​ 1,033,989 ​ 1,034,599 Multi-family ​ — ​ — ​ — ​ — ​ — ​ 812,174 ​ 812,174 Residential real estate ​ 3,053 ​ 747 ​ 343 ​ 2,743 ​ 6,886 ​ 486,258 ​ 493,144 Commercial, industrial and agricultural ​ 273 ​ 721 ​ — ​ 736 ​ 1,730 ​ 677,714 ​ 679,444 Real estate construction and land loans ​ — ​ — ​ — ​ 123 ​ 123 ​ 97,188 ​ 97,311 Installment/consumer loans ​ 124 ​ — ​ — ​ 30 ​ 154 ​ 24,682 ​ 24,836 Total loans ​ $ 4,465 ​ $ 1,901 ​ $ 343 ​ $ 4,369 ​ $ 11,078 ​ $ 3,661,518 ​ $ 3,672,596 ​ ​ There was no other real estate owned at September 30, 2020 and December 31, 2019. Troubled Debt Restructurings The terms of certain loans were modified and are considered TDRs. The modification of the terms of such loans generally includes one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent 29 Table of Contents reduction of the recorded investment in the loan. The modification of these loans involved loans to borrowers who were experiencing financial difficulties. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed to determine if that borrower is currently in payment default under any of its obligations or whether there is a probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. The following table presents loans modified as TDRs during the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Modifications During the Three Months Ended September 30, ​ ​ 2020 ​ 2019 ​ ​ ​ ​ Pre- ​ Post- ​ ​ ​ Pre- ​ Post- ​ ​ ​ ​ Modification ​ Modification ​ ​ ​ Modification ​ Modification ​ ​ ​ ​ Outstanding ​ Outstanding ​ ​ ​ Outstanding ​ Outstanding ​ ​ Number of ​ Recorded ​ Recorded ​ Number of ​ Recorded ​ Recorded (Dollars in thousands) Loans Investment Investment Loans Investment Investment Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ — $ — $ — 2 $ 7,427 $ 7,427 Non-owner occupied — — — — — — Residential real estate ​ — ​ — ​ — 1 ​ 338 ​ 338 Commercial, industrial and agricultural — ​ — ​ ​ — 7 ​ 8,378 ​ ​ 8,378 Installment/consumer loans — ​ — ​ ​ — — ​ — ​ ​ — Total — $ — $ — 10 $ 16,143 $ 16,143 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Modifications During the Nine Months Ended September 30, ​ ​ 2020 ​ 2019 ​ ​ ​ ​ Pre- ​ Post- ​ ​ ​ Pre- ​ Post- ​ ​ ​ ​ Modification ​ Modification ​ ​ ​ Modification ​ Modification ​ ​ ​ ​ Outstanding ​ Outstanding ​ ​ ​ Outstanding ​ Outstanding ​ ​ Number of ​ Recorded ​ Recorded ​ Number of ​ Recorded ​ Recorded (Dollars in thousands) Loans Investment Investment Loans Investment Investment Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ — $ — $ — 2 $ 7,427 $ 7,427 Non-owner occupied — — — — — — Residential real estate ​ — ​ — ​ — 1 ​ 338 ​ 338 Commercial, industrial and agricultural 2 ​ 1,057 ​ ​ 1,057 12 ​ 12,521 ​ ​ 12,521 Installment/consumer loans — ​ — ​ ​ — — ​ — ​ ​ — Total 2 $ 1,057 $ 1,057 15 $ 20,286 $ 20,286 ​ During the nine months ended September 30, 2020, there were four charge-offs totaling $ 1.7 million relating to TDRs and there was one loan modified as a TDR for which there was a payment default within twelve months following the modification. During the nine months ended September 30, 2019, there were three charge-offs totaling $ 84 thousand relating to TDRs and there were three loans modified as a TDR for which there was a payment default within twelve months following the modification. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms. As of September 30, 2020 and December 31, 2019, the Company had $ 581 thousand and $ 405 thousand, respectively, of non-accrual TDRs and $ 23.4 million and $ 26.3 million, respectively, of performing TDRs. The decrease in performing TDRs is primarily due to one TDR relationship which became non-accrual during the 2020 second quarter and totaled $ 2.7 million at June 30, 2020. In the 2020 third quarter, a settlement agreement was entered into resulting in $ 875 thousand in payments received to date and a charge-off totaling $ 1.3 million. The remaining loan balance is included in non-accrual TDRs and is secured by inventory. At September 30, 2020, the remaining non-accrual TDRs were unsecured and at December 31, 2019, the non-accrual TDRs were unsecured. The Bank has no commitment to lend additional funds to these debtors. The terms of certain other loans were modified during the nine months ended September 30, 2020 that did not meet the definition of a TDR. These loans have a total recorded investment at September 30, 2020 of $ 122.3 million. These loans were to borrowers who were not experiencing financial difficulties. In connection with the COVID-19 relief provided by the CARES Act and interagency guidance issued in March 2020, the Company is supporting its customers who may experience financial difficulty due to COVID-19 through loan moratoriums and forbearance programs. The Company began offering 90-day payment modifications on a case-by-case basis to those 30 Table of Contents customers whose income was adversely impacted by COVID-19. The loan modifications in this program primarily consist of three-month deferrals of interest and principal payments. As of September 30, 2020, approximately 490 loans totaling $ 615 million were granted payment moratoriums. T hese deferrals are not considered TDRs based on the CARES Act and/or the interagency guidance. As of October 25, 2020, approximately $ 610 million of these loans have reached the end of their three month deferral period. Of these loans, 66 % returned to making their agreed on payments and 34 % have requested an extension. Extensions are being granted on a case-by-case basis. Approximately $ 44 million in commercial loan payment deferrals were outstanding as of October 25, 2020. Collateral Dependent Loans At September 30, 2020, the Company had collateral dependent loans which were individually evaluated to determine expected credit losses. Collateral dependent commercial, industrial and agricultural totaled $ 10.1 million and had a related allowance for credit losses totaling $ 6.6 million. The loans were secured by inventory and other assets. Collateral dependent commercial real estate loans totaled $ 1.4 million and had no related allowance for credit losses. Impaired Loans (prior to the adoption of the CECL Standard) At December 31, 2019 the Company had individually impaired loans as defined by FASB ASC 310, “Receivables” of $ 27.0 million. For a loan to be considered impaired, management determines after review whether it is probable that the Bank will not be able to collect all amounts due according to the contractual terms of the loan agreement. Management applies its normal loan review procedures in making these judgments. Impaired loans include individually classified non-accrual loans and TDRs. At December 31, 2019, impaired loans also included $ 1.1 million in other impaired performing loans which were related to borrowers with other performing TDRs. For impaired loans, the Bank evaluates the impairment of the loan in accordance with FASB ASC 310-10-35-22. Impairment is determined based on the present value of expected future cash flows discounted at the loan’s effective interest rate. For loans that are collateral dependent, the fair value of the collateral is used to determine the fair value of the loan. The fair value of the collateral is determined based on recent appraised values. The fair value of the collateral or present value of expected cash flows is compared to the carrying value to determine if any write-down or specific loan loss allowance allocation is required. ​ 31 Table of Contents The following table sets forth the recorded investment, unpaid principal balance and related allowance for individually impaired loans at December 31, 2019. The table also sets forth the average recorded investment of individually impaired loans and interest income recognized while the loans were impaired during the period ended September 30, 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ December 31, 2019 ​ September 30, 2019 ​ September 30, 2019 ​ ​ ​ ​ ​ Unpaid ​ Related ​ Average ​ Interest ​ Average ​ Interest ​ ​ Recorded ​ Principal ​ Allocated ​ Recorded ​ Income ​ Recorded ​ Income (In thousands) Investment Balance Allowance Investment Recognized Investment Recognized With no related allowance recorded: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ $ 3,379 ​ $ 3,401 ​ $ — ​ $ 3,095 ​ $ 28 ​ $ 1,196 ​ $ 28 Non-owner occupied ​ 2,296 ​ 2,296 ​ — ​ 2,344 ​ 25 ​ 2,096 ​ 75 Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgages ​ ​ — ​ — ​ — ​ — — ​ — — Home equity ​ ​ 294 ​ 300 ​ — ​ — — ​ — — Commercial, industrial and agricultural: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Secured ​ ​ 494 ​ 494 ​ — ​ 244 5 ​ 190 11 Unsecured ​ ​ 8,863 ​ 8,863 ​ — ​ 7,836 125 ​ 5,851 274 Total with no related allowance recorded ​ ​ 15,326 ​ 15,354 ​ — ​ 13,519 ​ 183 ​ 9,333 ​ 388 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ With an allowance recorded: ​ ​ ​ ​ ​ ​ Commercial real estate: ​ ​ ​ ​ ​ ​ Owner occupied ​ ​ — ​ — ​ — ​ — ​ — ​ — ​ — Non-owner occupied ​ — — — — — — — Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgages ​ ​ — ​ — ​ — ​ — ​ — ​ — ​ — Home equity ​ ​ — ​ — ​ — ​ — ​ — ​ — ​ — Commercial, industrial and agricultural: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Secured ​ ​ 9,612 ​ 9,612 ​ 3,435 ​ 6,642 ​ 61 ​ 5,044 ​ 138 Unsecured ​ ​ 2,045 ​ 2,051 ​ 1,241 ​ 2,340 ​ 26 ​ 1,707 ​ 61 Total with an allowance recorded ​ ​ 11,657 ​ 11,663 ​ ​ 4,676 ​ 8,982 ​ 87 ​ 6,751 ​ 199 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ ​ 3,379 ​ 3,401 ​ — ​ 3,095 ​ ​ 28 ​ 1,196 ​ 28 Non-owner occupied ​ ​ 2,296 ​ 2,296 ​ — ​ 2,344 ​ ​ 25 ​ 2,096 75 Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgages ​ ​ — ​ — ​ — ​ — ​ ​ — ​ — — Home equity ​ ​ 294 ​ 300 ​ — ​ — ​ ​ — ​ — — Commercial, industrial and agricultural: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Secured ​ ​ 10,106 ​ 10,106 ​ 3,435 ​ 6,886 ​ ​ 66 ​ 5,234 149 Unsecured ​ ​ 10,908 ​ 10,914 ​ 1,241 ​ 10,176 ​ ​ 151 ​ 7,558 335 Total ​ $ 26,983 ​ $ 27,017 ​ $ 4,676 ​ $ 22,501 $ 270 ​ $ 16,084 $ 587 ​ The following tables represent the changes in the allowance for credit losses for the three and nine months ended September 30, 2020 and 2019. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2020 ​ ​ ​ ​ ​ ​ ​ Residential ​ Commercial, ​ Real Estate ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Real Estate ​ Industrial and ​ Construction ​ Installment/ ​ ​ ​ ​ ​ Real Estate ​ Multi-family ​ Mortgage ​ Agricultural ​ and Land ​ Consumer ​ ​ ​ (In thousands) Mortgage Loans Loans Loans Loans Loans Loans Total Allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning balance ​ $ 6,993 ​ $ 1,628 ​ $ 3,692 ​ $ 26,949 ​ $ 2,620 ​ $ 1,519 ​ $ 43,401 Charge-offs ​ — ​ — ​ — ​ ( 1,469 ) ​ — ​ — ​ ( 1,469 ) Recoveries ​ — ​ — ​ — ​ 42 ​ — ​ — ​ 42 Provision (credit) for credit losses ​ 1,093 ​ 46 ​ ( 494 ) ​ 2,059 ​ ( 857 ) ​ ( 347 ) ​ 1,500 Ending balance ​ $ 8,086 ​ $ 1,674 ​ $ 3,198 ​ $ 27,581 ​ $ 1,763 ​ $ 1,172 ​ $ 43,474 ​ ​ 32 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2019 ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ Commercial, ​ Real Estate ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Real Estate ​ Industrial and ​ Construction ​ Installment/ ​ ​ ​ ​ ​ Real Estate ​ Multi-family ​ Mortgage ​ Agricultural ​ and Land ​ Consumer ​ ​ ​ (In thousands) Mortgage Loans Loans Loans Loans Loans Loans Total Allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning balance ​ $ 10,878 ​ $ 2,545 ​ $ 2,620 ​ $ 13,558 ​ $ 1,333 ​ $ 237 ​ $ 31,171 Charge-offs ​ — ​ — ​ — ​ — ​ — ​ ( 9 ) ​ ( 9 ) Recoveries ​ — ​ — ​ 1 ​ — ​ — ​ 10 ​ 11 Provision (credit) for credit losses ​ 1,051 ​ 445 ​ ( 713 ) ​ 523 ​ ( 335 ) ​ 29 ​ 1,000 Ending balance ​ $ 11,929 ​ $ 2,990 ​ $ 1,908 ​ $ 14,081 ​ $ 998 ​ $ 267 ​ $ 32,173 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ Commercial, ​ Real Estate ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Real Estate ​ Industrial and ​ Construction ​ Installment/ ​ ​ ​ ​ ​ Real Estate ​ Multi-family ​ Mortgage ​ Agricultural ​ and Land ​ Consumer ​ ​ ​ (In thousands) Mortgage Loans Loans Loans Loans Loans Loans Total Allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning balance, prior to adoption of CECL ​ $ 12,150 ​ $ 4,829 ​ $ 1,882 ​ $ 12,583 ​ $ 1,066 ​ $ 276 ​ $ 32,786 Impact of adopting CECL ​ ​ ( 7,712 ) ​ ​ ( 3,589 ) ​ ​ 2,182 ​ ​ 8,699 ​ ​ 1,274 ​ ​ 771 ​ ​ 1,625 Charge-offs ​ ( 1 ) ​ — ​ — ​ ( 2,002 ) ​ — ​ ( 2 ) ​ ( 2,005 ) Recoveries ​ — ​ — ​ 2 ​ 66 ​ — ​ — ​ 68 Provision (credit) for credit losses ​ 3,649 ​ 434 ​ ( 868 ) ​ 8,235 ​ ( 577 ) ​ 127 ​ 11,000 Ending balance ​ $ 8,086 ​ $ 1,674 ​ $ 3,198 ​ $ 27,581 ​ $ 1,763 ​ $ 1,172 ​ $ 43,474 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2019 ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ Commercial, ​ Real Estate ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Real Estate ​ Industrial and ​ Construction ​ Installment/ ​ ​ ​ ​ ​ Real Estate ​ Multi-family ​ Mortgage ​ Agricultural ​ and Land ​ Consumer ​ ​ ​ (In thousands) Mortgage Loans Loans Loans Loans Loans Loans Total Allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning balance ​ $ 10,792 ​ $ 2,566 ​ $ 3,935 ​ $ 12,722 ​ $ 1,297 ​ $ 106 ​ $ 31,418 Charge-offs ​ ( 3,670 ) ​ — ​ — ​ ( 796 ) ​ — ​ ( 13 ) ​ ( 4,479 ) Recoveries ​ — ​ — ​ 112 ​ 12 ​ — ​ 10 ​ 134 Provision (credit) for credit losses ​ 4,807 ​ ​ 424 ​ ( 2,139 ) ​ 2,143 ​ ( 299 ) ​ 164 ​ 5,100 Ending balance ​ $ 11,929 ​ $ 2,990 ​ $ 1,908 ​ $ 14,081 ​ $ 998 ​ $ 267 ​ $ 32,173 ​ The allowance for credit losses at September 30, 2020 was consistent with the prior quarter primarily as a result of there being no change to the reasonable and supportable forecast component of the analysis. COVID-19 continues to have a profound impact on economic activity. While there have been some signs of economic improvement during the third quarter, significant uncertainty remains. Management still believes that the economic recovery will accelerate during 2021 and 2022, however, based on the aforementioned uncertainty and negative impact the virus has had to date, the decision was made to maintain the current risk level for the reasonable and supportable forecast component of the allowance for credit losses in the third quarter. ​ The following table represents the balance in the allowance for loan losses and the recorded investment in loans, as defined under FASB ASC 310-10 (prior to adoption of the CECL Standard), and based on impairment method as of December 31, 2019. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ Commercial, ​ Real Estate ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Real Estate ​ Industrial and ​ Construction ​ Installment/ ​ ​ ​ ​ ​ Real Estate ​ Multi-family ​ Mortgage ​ Agricultural ​ and Land ​ Consumer ​ ​ (In thousands) Mortgage Loans Loans Loans Loans Loans Loans Total Allowance for loan losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Individually evaluated for impairment ​ $ — ​ $ — ​ $ — ​ $ 4,676 ​ $ — ​ $ — ​ $ 4,676 Collectively evaluated for impairment ​ ​ 12,150 ​ ​ 4,829 ​ ​ 1,882 ​ ​ 7,907 ​ ​ 1,066 ​ ​ 276 ​ ​ 28,110 Loans acquired with deteriorated credit quality ​ — ​ ​ — ​ ​ — ​ — ​ — ​ ​ — ​ ​ — Total allowance for loan losses ​ $ 12,150 ​ $ 4,829 ​ $ 1,882 ​ $ 12,583 ​ $ 1,066 ​ $ 276 ​ $ 32,786 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans: ​ ​ ​ ​ ​ ​ ​ Individually evaluated for impairment ​ $ 5,675 ​ $ — ​ $ 294 ​ $ 21,014 ​ $ — ​ $ — ​ $ 26,983 Collectively evaluated for impairment ​ 1,560,012 ​ 812,174 ​ 492,507 ​ 658,430 ​ 97,311 ​ 24,836 ​ 3,645,270 Loans acquired with deteriorated credit quality ​ — ​ — ​ 343 ​ — ​ — ​ — ​ 343 Total loans ​ $ 1,565,687 ​ $ 812,174 ​ $ 493,144 ​ $ 679,444 ​ $ 97,311 ​ $ 24,836 ​ $ 3,672,596 ​ 33 Table of Contents ​ 7. PENSION AND POSTRETIREMENT PLANS The Bank maintains a noncontributory pension plan (the “Pension Plan”) covering all eligible employees. The Bank uses a December 31 measurement date for this plan in accordance with FASB ASC 715-30 “Compensation – Retirement Benefits – Defined Benefit Plans – Pension.” During 2012, the Company amended the Pension Plan by revising the formula for determining benefits effective January 1, 2013, except for certain grandfathered employees. Additionally, new employees hired on or after October 1, 2012 are not eligible for the Pension Plan. During 2001, the Bank adopted the Bridgehampton National Bank Supplemental Executive Retirement Plan (“SERP”). As recommended by the Compensation Committee of the Board of Directors and approved by the full Board of Directors, the SERP provides benefits to certain employees, whose benefits under the Pension Plan are limited by the applicable provisions of the Internal Revenue Code. The benefit under the SERP is equal to the additional amount the employee would be entitled to under the Pension Plan and the 401(k) Plan in the absence of such Internal Revenue Code limitations. The assets of the SERP are held in a rabbi trust to maintain the tax-deferred status of the plan and are subject to the general, unsecured creditors of the Company. As a result, the assets of the rabbi trust are reflected on the Company’s consolidated balance sheets. There were $ 1.2 million of contributions to the Pension Plan during the nine months ended September 30, 2020. There were no contributions to the Pension Plan during the nine months ended September 30, 2019. There were no contributions to the SERP during the nine months ended September 30, 2020 and 2019, respectively. In accordance with the SERP, a retired executive received a distribution totaling $ 84 thousand during each of the nine months ended September 30, 2020 and 2019, respectively. The Company's funding policy with respect to its benefit plans is to contribute at least the minimum amounts required by applicable laws and regulations. The following table presents the components of net periodic benefit (credit) cost: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ Pension Benefits ​ SERP Benefits ​ Pension Benefits ​ SERP Benefits (In thousands) 2020 2019 2020 2019 2020 2019 2020 2019 Components of net periodic benefit (credit) cost and other amounts recognized in other comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service cost ​ $ 265 ​ $ 273 $ 92 $ 65 ​ $ 795 ​ $ 818 $ 278 $ 196 Interest cost ​ 193 225 ​ 38 37 ​ 578 675 ​ 112 110 Expected return on plan assets ​ ( 713 ) ( 608 ) ​ — — ​ ( 2,138 ) ( 1,823 ) ​ — — Amortization of net loss ​ 100 130 ​ 56 18 ​ 300 390 ​ 170 53 Amortization of prior service credit ​ ( 20 ) ( 20 ) ​ — — ​ ( 58 ) ( 58 ) ​ — — Net periodic benefit (credit) cost ​ $ ( 175 ) ​ $ — $ 186 $ 120 ​ $ ( 523 ) ​ $ 2 $ 560 $ 359 ​ ​ 8. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE Securities sold under agreements to repurchase totaled $ 1.4 million at September 30, 2020 and $ 1.0 million at December 31, 2019. The repurchase agreements were collateralized by investment securities, of which 37 % were U.S. GSE residential collateralized mortgage obligations and 63 % were U.S. GSE residential mortgage-backed securities with a carrying amount of $ 2.4 million at September 30, 2020 and 17 % were U.S. GSE residential collateralized mortgage obligations and 83 % were U.S. GSE residential mortgage-backed securities with a carrying amount of $ 2.1 million at December 31, 2019. Securities sold under agreements to repurchase are financing arrangements with $ 1.4 million maturing during the fourth quarter of 2020. At maturity, the securities underlying the agreements are returned to the Company. The primary risk associated with these secured borrowings is the requirement to pledge a market value-based balance of collateral in excess of the borrowed amount. The excess collateral pledged represents an unsecured exposure to the lending counterparty. As the market value of the collateral changes, both through changes in discount rates and spreads as well as related cash flows, 34 Table of Contents additional collateral may need to be pledged. In accordance with the Company's policies, eligible counterparties are defined and monitored to minimize exposure. 9. FEDERAL HOME LOAN BANK ADVANCES The following tables present the contractual maturities and weighted average interest rates of FHLB advances for each of the next five years. There are no FHLB advances with contractual maturities after 2020. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 (Dollars in thousands) ​ ​ ​ ​ Weighted Contractual Maturity Amount Average Rate Overnight ​ $ — ​ — % ​ ​ ​ ​ ​ ​ ​ 2020 ​ 215,000 0.39 ​ Total FHLB advances ​ $ 215,000 0.39 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 (Dollars in thousands) ​ ​ ​ ​ Weighted Contractual Maturity Amount Average Rate Overnight ​ $ 195,000 ​ 1.81 % ​ ​ ​ ​ ​ ​ ​ 2020 ​ 240,000 1.84 ​ Total FHLB advances ​ $ 435,000 1.82 % ​ Each advance is payable at its maturity date, with a prepayment penalty for fixed rate advances. The advances were collateralized by $ 1.6 billion and $ 1.4 billion of residential and commercial mortgage loans under a blanket lien arrangement at September 30, 2020 and December 31, 2019. Based on this collateral and the Company's holdings of FHLB stock, the Company is eligible to borrow up to a total of $ 1.9 billion at September 30, 2020. 10. SUBORDINATED DEBENTURES In September 2015, the Company issued $ 80.0 million in aggregate principal amount of fixed-to-floating rate subordinated debentures. $ 40.0 million of the subordinated debentures are callable at par after five years , have a stated maturity of September 30, 2025 and bear interest at a fixed annual rate of 5.25 % per year, from and including September 21, 2015 until but excluding September 30, 2020. From and including September 30, 2020 to the maturity date or early redemption date, the interest rate will reset quarterly to an annual interest rate equal to the then-current three-month LIBOR plus 360 basis points. The remaining $ 40.0 million of the subordinated debentures are callable at par after ten years , have a stated maturity of September 30, 2030 and bear interest at a fixed annual rate of 5.75 % per year, from and including September 21, 2015 until but excluding September 30, 2025. From and including September 30, 2025 to the maturity date or early redemption date, the interest rate will reset quarterly to an annual interest rate equal to the then-current three-month LIBOR plus 345 basis points. The subordinated debentures totaled $ 79.0 million at September 30, 2020 and $ 78.9 million at December 31, 2019. The subordinated debentures are included in tier 2 capital (with certain limitations applicable) under current regulatory guidelines and interpretations. 11. DERIVATIVES During the first quarter of 2019 the Company adopted ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities . The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. ASU 2017-12 is effective for public business entities for fiscal years beginning after December 15, 2018, with early adoption, including adoption in an interim period, permitted. ASU 2017-12 requires a modified retrospective transition method in which the Company 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 has adopted the standard in 2019 with minimal impact to its financial position upon transition. 35 Table of Contents The Alternative Reference Rates Committee ("ARRC") has proposed that the Secured Overnight Funding Rate ("SOFR") replace USD-LIBOR. ARRC has proposed that the transition to SOFR from USD-LIBOR will take place by the end of 2021. The Company has material contracts that are indexed to USD-LIBOR. Industry organizations are currently working on the transition plan. The Company is currently monitoring this activity and evaluating the risks involved. Cash Flow Hedges of Interest Rate Risk As part of its asset liability management, the Company utilizes interest rate swap agreements to help manage its interest rate risk position. The notional amount of the interest rate swap does not represent the amount 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. Interest rate swaps with notional amounts totaling $ 280.0 million and $ 290.0 million at September 30, 2020 and December 31, 2019, respectively, were designated as cash flow hedges of certain FHLB advances. The swaps were determined to be fully effective during the periods presented. The aggregate fair value of the swaps is recorded in other assets or other liabilities, with changes in fair value recorded in other comprehensive income (loss). The amount included in accumulated other comprehensive income (loss) would be reclassified to current earnings should the hedges no longer be considered effective. The Company expects the hedges to remain fully effective during the remaining term of the swaps. The following table summarizes information about the interest rate swaps designated as cash flow hedges at September 30, 2020 and December 31, 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands) September 30, 2020 December 31, 2019 ​ Notional amounts ​ $ 280,000 ​ ​ $ 290,000 ​ Weighted average pay rates ​ 1.33 % ​ 1.84 % Weighted average receive rates ​ 0.26 % ​ 1.94 % Weighted average maturity ​ 3.39 years ​ 2.91 years ​ Four interest rate swaps, with notional amounts totaling $ 125.0 million, were terminated resulting in $ 3.4 million in loss on termination of swaps, which is reported as a component of non-interest income, for the three and nine months ended September 30, 2020. ​ Interest expense recorded on these swap transactions totaled $ 4.3 million and $ 4.4 million for the three and nine months ended September 30, 2020, and interest income recorded on these swap transactions totaled $ 331 thousand and $ 1.4 million for the three and nine months ended September 30, 2019, which is reported as a component of interest expense on FHLB advances. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest income/expense as interest payments are made/received on the Company's variable-rate assets/liabilities. During the nine months ended September 30, 2020, the Company had $ 4.4 million of reclassifications as an increase to interest expense. During the next twelve months, the Company estimates that an additional $ 2.2 million will be reclassified as an increase to interest expense. During the quarter ended September 30, 2020, the Company accelerated the reclassification of $ 3.3 million loss from other comprehensive income to earnings as a result of the hedged forecasted transactions becoming probable not to occur. The following table presents the net gains (losses) recorded in accumulated other comprehensive income and the consolidated statements of income relating to the cash flow derivative instruments for the three and nine months ended September 30, 2020 and 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount of gain (loss) ​ Amount of gain ​ ​ ​ ​ ​ ​ ​ ​ reclassified from ​ reclassified from ​ ​ Amount of (loss) gain ​ Amount of (loss) gain ​ Accumulated OCI ​ Accumulated OCI (In thousands) ​ recognized in OCI ​ recognized in OCI ​ into income ​ into income Interest rate contracts included component excluded component included component excluded component Three months ended September 30, 2020 ​ $ 14 ​ $ — ​ $ ( 4,325 ) ​ $ — Nine months ended September 30, 2020 ​ $ ( 11,059 ) ​ $ — ​ $ ( 4,414 ) ​ $ — Three months ended September 30, 2019 ​ $ ( 657 ) ​ $ — ​ $ 331 ​ $ — Nine months ended September 30, 2019 ​ $ ( 5,360 ) ​ $ — ​ $ 1,353 ​ $ — ​ 36 Table of Contents The following table reflects the cash flow hedges included in the consolidated balance sheets at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ December 31, 2019 ​ ​ ​ ​ Fair ​ Fair ​ ​ ​ ​ Fair ​ Fair (In thousands) ​ Notional ​ Value ​ Value ​ Notional ​ Value ​ Value Included in other assets/(liabilities): Amount Asset Liability Amount Asset Liability Interest rate swaps related to FHLB advances ​ $ 215,000 ​ $ — ​ $ ( 7,322 ) ​ $ 240,000 ​ $ 1,233 ​ $ ( 978 ) Forward starting interest rate swaps related to FHLB advances ​ ​ 65,000 ​ ​ — ​ ​ ( 720 ) ​ ​ 50,000 ​ ​ — ​ ​ ( 1,427 ) ​ Non-Designated Hedges Derivatives not designated as hedges may be used to manage the Company's exposure to interest rate movements or to provide service to customers but do not meet the requirements for hedge accounting under U.S. GAAP. The Company executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that the Company executes with a third party in order to minimize the net risk exposure resulting from such transactions. These interest-rate swap agreements do not qualify for hedge accounting treatment, and therefore changes in fair value are reported in current period earnings. Interest rate swaps with notional amounts totaled $ 1.1 billion at September 30, 2020. Of the $ 1.1 billion notional amounts, $ 530.5 million were from loan customers and $ 530.5 million were from bank counterparties. Interest rate swaps with notional amounts totaled $ 823.9 million at December 31, 2019. Of the $ 823.9 million notional amounts, $ 411.9 million were from loan customers and $ 411.9 million were from bank counterparties. The following table presents summary information about the interest rate swaps at September 30, 2020 and December 31, 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands) September 30, 2020 ​ December 31, 2019 Notional amounts ​ $ 1,061,074 ​ ​ $ 823,894 Weighted average pay rates ​ ​ 2.94 % ​ ​ 3.75 % Weighted average receive rates ​ ​ 2.94 % ​ ​ 3.75 % Weighted average maturity ​ ​ 10.08 years ​ ​ 10.77 years Fair value of combined interest rate swaps ​ $ — ​ ​ $ — ​ ​ ​ Loan swap fees recorded on these swap transactions, which is reported as a component of non-interest income, totaled $ 0.6 million and $ 3.1 million for the three and nine months ended September 30, 2020 and $ 1.6 million and $ 3.2 million for the three and nine months ended September 30, 2019. ​ Credit-Risk-Related Contingent Features As of September 30, 2020, the termination value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $ 68.0 million, while there were no derivatives in a net asset position. The Company has minimum collateral posting thresholds with certain of its derivative counterparties. If the termination value of derivatives is a net liability position, the Company is required to post collateral against its obligations under the agreements. However, if the termination value of derivatives is a net asset position, the counterparty is required to post collateral to the Company. At September 30, 2020, the Company posted collateral of $ 69.1 million to its counterparties under the agreements in a net liability position and received no collateral from its counterparties under the agreements in a net asset position. If the Company had breached any of these provisions at September 30, 2020, it could have been required to settle its obligations under the agreements at the termination value. 37 Table of Contents 12. LEASES The Company has operating leases for certain branch locations, corporate offices and equipment. Certain leases contain rent escalation clauses, which are reflected in the Company’s operating lease liabilities. The Company’s lease agreements do not contain any material residual value guarantees, restrictions or covenants. The components of lease cost were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended (In thousands) September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Lease cost ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease cost ​ $ 1,898 ​ $ 1,679 ​ $ 5,703 ​ $ 5,030 Sublease income ​ ​ ( 11 ) ​ ( 32 ) ​ ​ ( 33 ) ​ ( 71 ) Total lease cost ​ $ 1,887 ​ $ 1,647 ​ $ 5,670 ​ $ 4,959 ​ The Company reports lease cost in occupancy and equipment expense in the consolidated statements of income. The Company subleases a portion of its leased properties to commercial sublessees. Sublease income is included in other operating income in the consolidated statements of income. Supplemental cash flow and balance sheet information related to operating leases were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended (Dollars in thousands) September 30, 2020 September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities ​ ​ Operating cash flows from operating leases ​ $ 5,442 ​ $ 5,180 Operating right-of-use assets obtained in exchange for lease liabilities ​ $ 5,716 ​ $ 39,825 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ ​ December 31, 2019 ​ Weighted-average remaining lease term-operating leases ​ ​ 7.8 years ​ 7.8 years Weighted-average discount rate-operating leases (1) ​ 3.00 % ​ 3.20 % 1) The Company computes the present value of operating lease liabilities using its incremental borrowing rate as the discount rate. Certain leases contain renewal options which are not reflected in the tables below. The exercise of renewal options, which extend the lease term from five to ten years , is at the Company’s discretion. The maturities of operating lease liabilities were as follows: ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) September 30, 2020 ​ December 31, 2019 2020 ​ $ 1,834 ​ $ 7,011 2021 ​ ​ 7,461 ​ 6,974 2022 ​ 7,341 ​ 6,802 2023 ​ ​ 6,444 ​ 5,853 2024 ​ 6,190 ​ 5,595 Thereafter ​ 24,067 ​ 20,324 Total operating lease payments ​ $ 53,337 ​ $ 52,559 Less: Interest ​ ​ ( 5,954 ) ​ ​ ( 6,582 ) Present value of operating lease liabilities ​ $ 47,383 ​ $ 45,977 ​ ​ ​ 38 Table of Contents 13. ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME The following table summarizes the components of other comprehensive income (loss) and related income tax effects: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ September 30, ​ September 30, (In thousands) 2020 2019 2020 2019 Unrealized holding (losses) gains on available for sale securities ​ $ ( 935 ) $ 2,227 ​ $ 9,186 $ 16,247 Reclassification adjustments for gains realized in income ​ ( 3,540 ) — ​ ( 3,525 ) ( 201 ) Income tax effect ​ ​ 1,309 ​ ( 649 ) ​ ​ ( 1,655 ) ​ ( 4,679 ) Net change in unrealized (losses) gains on available for sale securities ​ ​ ( 3,166 ) ​ 1,578 ​ ​ 4,006 ​ 11,367 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reclassification adjustments for amortization realized in income ​ ​ 136 ​ 128 ​ ​ 412 ​ 385 Income tax effect ​ ​ ( 39 ) ​ ( 37 ) ​ ​ ( 120 ) ​ ( 113 ) Net change in post-retirement obligation ​ ​ 97 ​ 91 ​ ​ 292 ​ 272 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in fair value of derivatives used for cash flow hedges ​ ​ 3,364 ​ ( 657 ) ​ ​ ( 7,709 ) ​ ( 5,360 ) Reclassification adjustments for losses (gains) realized in income ​ ​ 992 ​ ( 331 ) ​ ​ 1,058 ​ ( 1,353 ) Income tax effect ​ ​ ( 1,274 ) ​ 288 ​ ​ 1,945 ​ 1,958 Net change in unrealized gains (losses) on cash flow hedges ​ ​ 3,082 ​ ( 700 ) ​ ​ ( 4,706 ) ​ ( 4,755 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income (loss) ​ $ 13 $ 969 ​ $ ( 408 ) $ 6,884 ​ The following is a summary of the accumulated other comprehensive loss balances, net of income taxes, at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ December 31, ​ Comprehensive ​ ​ September 30, (In thousands) 2019 Income 2020 Unrealized (losses) gains on available for sale securities ​ $ ( 829 ) ​ $ 4,006 ​ $ 3,177 Unrealized (losses) gains on pension benefits ​ ( 6,775 ) ​ 292 ​ ( 6,483 ) Unrealized losses on cash flow hedges ​ ( 737 ) ​ ( 4,706 ) ​ ( 5,443 ) Accumulated other comprehensive loss, net of income taxes ​ $ ( 8,341 ) ​ $ ( 408 ) ​ $ ( 8,749 ) ​ The following represents the reclassifications out of accumulated other comprehensive (loss) income for the three and nine months ended September 30, 2020 and 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ Affected Line Item ​ ​ September 30, ​ September 30, ​ September 30, ​ September 30, ​ ​ in the Consolidated (In thousands) 2020 2019 2020 2019 Statements of Income Realized gains on sale of available for sale securities ​ $ 3,540 ​ $ — ​ $ 3,525 ​ $ 201 ​ Net securities gains Amortization of defined benefit pension plan and defined benefit plan component of the SERP: ​ ​ ​ ​ ​ ​ ​ ​ ​ Prior service credit ​ ​ 20 ​ 20 ​ ​ 58 ​ 58 ​ Other operating expenses Actuarial losses ​ ​ ( 156 ) ​ ( 148 ) ​ ​ ( 470 ) ​ ( 443 ) ​ Other operating expenses Realized (losses) gains on cash flow hedges ​ ​ ( 992 ) ​ 331 ​ ​ ( 1,058 ) ​ 1,353 ​ Interest expense Realized loss on the termination of swaps ​ ​ ( 3,348 ) ​ ​ — ​ ​ ( 3,348 ) ​ ​ — ​ ​ Loss on termination of swaps Total reclassifications, before income tax ​ $ ( 936 ) ​ $ 203 ​ $ ( 1,293 ) ​ $ 1,169 ​ ​ Income tax benefit (expense) ​ ​ 274 ​ ( 59 ) ​ ​ 378 ​ ( 341 ) ​ Income tax expense Total reclassifications, net of income tax ​ $ ( 662 ) ​ $ 144 ​ $ ( 915 ) ​ $ 828 ​ ​ ​ ​ ​ ​ 39 Table of Contents 14. RECENT ACCOUNTING PRONOUNCEMENTS Standards Effective in 2020 ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) Effective for periods after December 31, 2019, the Company adopted the CECL Standard. Refer to Note 1. “Basis of Presentation” for further details of the recent accounting pronouncement and its effect on the Company’s consolidated financial statements. ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In January 2017, the FASB amended existing guidance to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The amendments require an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirement for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. The amendments are effective for public business entities that are an SEC filer, like the Company, for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The amendments should be applied prospectively. An entity is required to disclose the nature of and reason for the change in accounting principle upon transition in the first annual period when the entity initially adopts the amendments. The adoption of ASU 2017-04 did not have an effect on the Company's consolidated financial statements. ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract In August 2018, the FASB issued ASU 2018-15 to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The amendments in this ASU are effective for public business entities, like the Company, for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption of the amendments in this ASU is permitted, including adoption in any interim period. The amendments in this ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The adoption of ASU 2018-15 did not have a material effect on the Company's consolidated financial statements.