24 unchanged sentences
Inaccurate management assumptions, continuing deterioration of economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans and other factors, both within and outside of our control, may require us to increase our allowance for loan losses.
+Added: The COVID-19 pandemic has further impacted the assumptions and methodologies typically used in making allowances for loan losses, and the availability of materials and other market information, including appraisals, have been impacted by the COVID-19 pandemic, making assumptions more subjective.
In addition, our regulators, as an integral part of their examination process, review our loans and the adequacy of our allowance for loan losses and may direct us to make additions to our allowance for loan losses based on their judgments about information available to them at the time of their examination.
−Removed: Further, if actual charge-offs in future periods exceed the amounts allocated to our allowance for loan losses, we may need additional provision for loan losses to restore the adequacy of our allowance for loan losses.
+Added: If actual charge-offs in future periods exceed the amounts allocated to our allowance for loan losses, we may need additional provision for loan losses to restore the adequacy of our allowance for loan losses.
If we are required to materially increase our level of allowance for loan losses for any reason, such increase could have a material adverse effect on our business, financial condition, results of operations and future prospects.
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A good number of our loans have been made to a small number of borrowers, resulting in a high concentration of large loans to certain borrowers.
−Removed: We have established an informal, internal lending limit to one relationship of up to 40% of unimpaired capital and allowance for loan losses, if secured by commercial real estate.
−Removed: A relationship in this instance is defined as loans made to different entities but with a shared borrower principal(s).
−Removed: For individual loans, limits are set so as not to exceed the statutory maximum of 15% of unimpaired capital and allowance for loan losses.
−Removed: However, we may, under certain circumstances, consider going above our internal limit in situations where we are confident that (1) the loan to value ratio, other characteristics or the structure of the loan is such that it is a lower risk than standard, (2) we will be able to sell to another institution some portion of the relationship debt as either a whole loan or participation, (3) there is sufficient diversification in the ownership structure of the proposed borrowing entity that the involvement of one party to whom we have extended other debt will not significantly negatively impact the proposed loan’s performance in a downturn or (4) the proposed loan is secured by particularly strong collateral, for example, a commercial real estate loan secured by real estate that has strong tenants with long-term leases, thereby reducing the reliance on the principals of the borrowing entity.
As of December 31, 2021, our five largest relationships ranged in exposure from approximately $57.0 million to $93.3 million.
In addition to other typical risks related to any loan, such as deterioration of the collateral securing the loans, this high concentration of borrowers presents a risk to our lending operations.
−Removed: If any one of these borrowers becomes unable to repay a loan obligation(s) for any reason, our
−Removed: nonperforming loans and our allowance for loan losses could increase significantly, which could adversely and materially affect our business, financial condition and results of operations.
+Added: If any one of these borrowers becomes unable to repay a loan obligation(s) for any reason, our nonperforming loans and our allowance for loan losses could increase significantly, which could adversely and materially affect our business, financial condition and results of operations.
Our commercial real estate loan, commercial loan and construction loan portfolios expose us to risks that may be greater than the risks related to our other mortgage loans.
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These loans typically involve repayment dependent upon income generated, or expected to be generated, by the property securing the loan in amounts sufficient to cover operating expenses and debt service.
−Removed: Commercial real estate loans may be affected to a greater extent than residential loans by adverse conditions in real estate markets or the economy because commercial real estate borrowers’ ability to repay their loans depends on successful leasing of their properties, in addition to the factors affecting residential real estate borrowers.
+Added: Commercial real estate loans may be affected to a greater extent than residential loans by adverse conditions in
+Added: real estate markets or the economy because commercial real estate borrowers’ ability to repay their loans depends on successful leasing of their properties, in addition to the factors affecting residential real estate borrowers.
These loans also involve greater risk because they generally are not fully amortizing over the loan period, but have a balloon payment due at maturity.
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Federal Reserve Board.
−Removed: Changes in monetary policy, including changes in interest rates, could influence not only the interest we receive on loans and securities and the interest we pay on deposits and borrowings, but such changes could also affect our ability to originate loans and obtain deposits, the fair value of our financial assets and liabilities, and the average duration of our assets.
+Added: Changes in monetary policy, including changes in interest rates, could influence not only the interest we receive on loans and securities and
+Added: the interest we pay on deposits and borrowings, but such changes could also affect our ability to originate loans and obtain deposits, the fair value of our financial assets and liabilities, and the average duration of our assets.
If the interest rates paid on deposits and other borrowings increase at a faster rate than the interest rates received on loans and other investments, our net interest income, and therefore net income, could be adversely affected.
−Removed: A continuation of the current levels of interest rates could cause the spread between our loan yields and our deposit rates paid to compress our net interest margin and our net income could be adversely affected.
Further, any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our business, financial condition, results of operations and future prospects.
29 unchanged sentences
In addition to pursuing organic growth, another element of our management team’s strategy will be to acquire other branches, whole financial institutions or related lines of business.
−Removed: We intend to actively seek potential acquisition opportunities.
+Added: intend to actively seek potential acquisition opportunities.
There are numerous risks that may make it difficult for us to execute this growth strategy and we cannot assure you that we will be successful in executing any part of our management team’s strategy.
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Declines in home prices and/or weak general economic conditions may result in increases in delinquencies and losses in the loan portfolios and other assets of financial institutions that we may acquire in amounts that exceed our initial forecasts developed during the due diligence investigation prior to acquiring those institutions.
−Removed: In addition, asset values may be impaired,
−Removed: in the future due to factors we cannot predict, including significant deterioration in economic conditions and further declines in collateral values and credit quality indicators.
+Added: In addition, asset values may be impaired, in the future due to factors we cannot predict, including significant deterioration in economic conditions and further declines in collateral values and credit quality indicators.
Any of these events could adversely affect the financial condition, liquidity, capital position and value of any institutions that we acquire and of the Bank as a whole.
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We are limited in the amount we can loan to a single borrower by the amount of our capital.
−Removed: Under Connecticut banking law, the total direct or indirect liabilities of any one obligor that are not fully secured, however incurred, to any Connecticut bank, exclusive of such bank’s investment in the investment securities of such obligor, shall not exceed at the time incurred 15% of the equity capital and allowance for loan losses of such bank.
−Removed: The total direct or indirect liabilities of any one obligor that are fully secured, however incurred, to any Connecticut bank, exclusive of such bank’s investment in the investment
−Removed: securities of such obligor, shall not exceed at the time incurred 10% of the equity capital and allowance for loan losses of such bank, provided this limitation shall be separate from and in addition to the limitation on liabilities that are not fully secured.
−Removed: We have also established an informal, internal lending limit to one relationship of up to 40% of unimpaired capital and allowance for loan losses, if secured by commercial real estate.
−Removed: A relationship in this instance is defined as loans made to different entities but with a shared borrower principal(s).
−Removed: For individual loans, limits are set so as not to exceed the statutory maximum of 15% of unimpaired capital and allowance for loan losses.
Based upon our current capital levels and our informal, internal limit on loans, the amount we may lend both in the aggregate and to any one borrower is significantly less than that of many of our competitors and may discourage potential borrowers who have credit needs in excess of our lending limit from doing business with us.
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Competition for employees is intense, and the process of locating key personnel with the combination of skills and attributes required to execute our business plan may be lengthy.
+Added: The COVID-19 pandemic, along with general economic conditions, has made it more difficult to retain employees and to attract new employees.
We believe that retaining the services and skills of our management team is important to our success.
−Removed: The unexpected loss of services of any of our key personnel could have an adverse impact on us because of their skills, knowledge of our market, years of industry experience and the difficulty of promptly finding qualified replacement personnel.
+Added: unexpected loss of services of any of our key personnel could have an adverse impact on us because of their skills, knowledge of our market, years of industry experience and the difficulty of promptly finding qualified replacement personnel.
If the services of any of our key personnel should become unavailable for any reason, we may not be able to identify and hire qualified persons on terms acceptable to us, which could cause a material adverse effect on our business, financial condition, results of operations and prospects.
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Any significant environmental liabilities could cause a material adverse effect on our business, financial condition, results of operations and future prospects.
−Removed: Uncertainty about the future of LIBOR may adversely affect our business.
+Added: Uncertainty relating to the LIBOR determination process and LIBOR discontinuance may adversely affect our results of operations.
LIBOR is used extensively in the United States as a benchmark for various commercial and financial contracts, including adjustable rate mortgages, corporate debt, interest rate swaps and other derivatives.
LIBOR is set based on interest rate information reported by certain banks.
−Removed: There is no definitive information regarding the future utilization of LIBOR or of any particular replacement rate.
+Added: The United Kingdom Financial Conduct Authority (“FCA”), which regulates the process for establishing LIBOR, announced in July 2017 that the sustainability of LIBOR cannot be guaranteed.
+Added: The administrator for LIBOR announced on March 5, 2021 that it would permanently cease to publish most LIBOR settings beginning on January 1, 2022 and will cease to publish the overnight, one-month, three-month, six-month and 12-month USD LIBOR settings on July 1,
+Added: Accordingly, the FCA has stated that it does not intend to persuade or compel banks to submit to LIBOR after such respective dates.
+Added: Until such time, however, FCA panel banks have agreed to continue to support LIBOR.
+Added: In October 2021, the federal bank regulatory agencies issued a Joint Statement on Managing the LIBOR Transition.
+Added: In that guidance, the agencies offered their regulatory expectations and outlined potential supervisory and enforcement consequences for banks that fail to adequately plan for and implement the transition away from LIBOR.
+Added: The failure to properly transition away from LIBOR may result in increased supervisory scrutiny.
+Added: We have not yet determined which alternative rate is most applicable, and there can be no assurances on which benchmark rate(s) may replace LIBOR or how LIBOR will be determined for purposes of financial instruments that are currently referencing LIBOR when it ceases to exist.
+Added: The discontinuance of LIBOR may result in uncertainty or differences in the calculation of the applicable interest rate or payment amount depending on the terms of the governing instruments and may also increase operational and other risks to the Company and the industry.
Other rates or benchmarks may perform differently than LIBOR.
−Removed: It is also uncertain what will happen with instruments that rely on LIBOR for future interest rate adjustments and which remain outstanding if LIBOR ceases to exist.
+Added: It is also uncertain what will happen with instruments that rely on LIBOR for future interest rate adjustments and which remain outstanding when LIBOR ceases to exist.
+Added: The discontinuance of LIBOR may also increase operational and other risks to the Company and the industry.
We have derivative contracts and limited loan exposure tied to LIBOR.
Although we are not yet able to assess what the ultimate impact of the transition from LIBOR will be, failure to adequately manage the transition could have a material adverse effect on our business, financial condition and results of operations.
−Removed: The Coronavirus (COVID-19) pandemic is adversely affecting us and our customers, and these adverse impacts on our business, financial position, results of operations, and prospects could be significant.
+Added: The Coronavirus (COVID-19) pandemic may continue to adversely impact our customers and our business, financial position, results of operations, and prospects.
In March 2020, the World Health Organization declared novel coronavirus disease 2019 ("COVID-19") as a global pandemic.
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These developments have impacted the macroeconomic environment, leading to lower interest rates, depressed equity market valuations, heightened financial market volatility, and significant disruption in banking and other financial activities.
−Removed: In response to the economic impact of COVID-19, the U.S.
−Removed: Government and related regulatory authorities provided fiscal and monetary stimuli.
−Removed: In March 2020, the U.S.
−Removed: Government enacted a $2 trillion stimulus bill referred to as the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act").
−Removed: The CARES Act included, among other things, direct payments to individuals and families, a loan program for small businesses, expansion of unemployment benefits and monetary support to state and local governments.
−Removed: There can be no assurance that these actions taken will stimulate the economy or prevent recessionary conditions.
+Added: government responded to the crisis by enacting a number of policies to provide fiscal stimulus to the economy and relief to those affected by the pandemic.
+Added: Throughout March and April of 2020, Congress passed three main relief packages (including the $2.3 trillion CARES Act) and one supplemental package.
+Added: A fifth major stimulus package, the $1.9 trillion American Rescue Plan Act (“ARPA”), was signed into law on March 11, 2021.
+Added: The stimulus legislation included, among other things, direct payments to individuals and families, loan programs for small businesses, expansion of unemployment benefits and monetary support to state and local governments.
+Added: Federal regulatory agencies also took a series of substantial monetary stimulus measures to complement the fiscal stimulus to further add liquidity to the markets.
+Added: Most of the relief programs have expired, although state and local governments are still in the process of allocating and deploying ARPA funds.
The COVID-19 pandemic has resulted in, and is likely to continue to result in, significant economic disruption affecting our business and the clients we serve.
However, we are unable to estimate the full impact of COVID-19 on our business and operations at this time, including the ability of our employees and our third-party vendors to work effectively during the course of the pandemic.
−Removed: The pandemic could cause us to experience an increase in the number of loan delinquencies, defaults and charge-offs, additional provisions for credit losses, adverse asset values of the collateral securing loans and an overall material adverse effect on the quality of the loan portfolio of the Company, impairment of our goodwill, reduced demand for our products and services, or other negative impacts on our financial position, results of operations, and prospects.
−Removed: Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the full impact of the COVID-19 pandemic on our business.
−Removed: The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated and what further actions may be taken by governmental authorities in response to the pandemic.
+Added: If the pandemic continues to spread or otherwise result in a continuation or worsening of the current economic and commercial environments, we could experience an increase in the number of loan delinquencies, defaults and charge-offs, additional provisions for credit losses, adverse asset values of the collateral securing loans and an overall material adverse effect on the quality of the loan portfolio of the Company, impairment of our goodwill, reduced demand for our products and services, or other negative impacts on our financial position, results of operations, and prospects.
+Added: Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the ultimate impact of the COVID-19 pandemic on our business.
+Added: The extent of such impact will depend on future developments, which are highly uncertain, including the scope and duration of the pandemic, third party providers’ ability to support our operations and what further actions may be taken by governmental authorities and other third parties in response to the pandemic.
The length of the pandemic and the efficacy of the extraordinary measures being put in place to address it are unknown.
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The Bank is subject to further reporting requirements under FDIC regulations.
−Removed: We are subject to further reporting requirements under the rules of the FDIC for the year ended December 31, 2020 as the Bank’s total assets exceed $1.0 billion, including a requirement for management to prepare a report that contains an assessment by management of the Bank’s effectiveness of internal control structure and procedures for financial reporting as of the end of such fiscal year.
+Added: We are subject to reporting requirements under the rules of the FDIC, including a requirement for management to prepare a report that contains an assessment by management of the Bank’s effectiveness of internal control structure and procedures for financial reporting as of the end of such fiscal year.
In addition, we are required to obtain an independent public accountant’s attestation report concerning our internal control structure over financial reporting.
4 unchanged sentences
Various laws impose nondiscriminatory lending requirements on financial institutions, including the CRA, the Equal Credit Opportunity Act and the Fair Housing Act.
−Removed: A successful regulatory challenge to an institution’s performance under the
−Removed: CRA or fair lending laws and regulations could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, restrictions on mergers and acquisitions activity, restrictions on expansion, and restrictions on entering new business lines.
+Added: A successful regulatory challenge to an institution’s performance under the CRA or fair lending laws and regulations could result in a wide variety of sanctions, including damages and civil money
+Added: penalties, injunctive relief, restrictions on mergers and acquisitions activity, restrictions on expansion, and restrictions on entering new business lines.
Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class action litigation.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.