5 unchanged sentences
The COVID-19 pandemic has caused significant economic dislocation in the United States.
−Removed: Although the domestic and global economies have begun to recover from the COVID-19 pandemic as many health and safety restrictions have been lifted and vaccine distribution has increased, certain adverse consequences of the pandemic continue to impact the macroeconomic environment and may persist for some time, including labor shortages and disruptions of global supply chains.
+Added: Although the domestic and global economies have begun to recover from the COVID-19 pandemic as many health and safety restrictions have been lifted and vaccine distribution has increased, certain adverse consequences of the pandemic continue to impact the macroeconomic
+Added: environment and may persist for some time, including labor shortages and disruptions of global supply chains.
The growth in economic activity and in the demand for goods and services, coupled with labor shortages and supply chain disruptions, has also contributed to rising inflationary pressures.
43 unchanged sentences
Under the CECL model, we will be required to present certain financial assets carried at amortized cost, such as loans held for investment and debt securities, at the net amount expected to be collected.
−Removed: The measurement of expected credit losses is to be based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that
−Removed: affect the collectability of the reported amount.
+Added: The measurement of expected credit losses is to be based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount.
This measurement will take place at the time the financial asset is first added to the Statements of Financial Condition and periodically thereafter.
This differs significantly from the incurred loss model required under current GAAP, which delays recognition until it is probable a loss has been incurred.
−Removed: Accordingly, we expect that the adoption of the CECL model will materially affect how we determine our allowance for loan losses and could require us to significantly increase our allowance.
+Added: Accordingly, we expect that the adoption of the CECL model will materially affect how we determine our allowance for loan losses.
Moreover, the CECL model may create more volatility in the level 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 adversely affect our business, financial condition and results of operations.
−Removed: In November 2019, the FASB approved a delay of the required implementation date of ASU 2016-13 for smaller reporting companies resulting in a required implementation date for the Company of January 1, 2023.
−Removed: The Company is evaluating the impact of this ASU and expects to recognize a one-time cumulative-effect adjustment to the allowance for loan losses upon adoption, but we cannot yet determine the magnitude of the one-time adjustment or the overall impact of the new guidance on the Company’s consolidated financial condition or results of operation.
+Added: In November 2019, the FASB approved a delay of the required implementation date of ASU 2016-13 for smaller reporting companies resulting in a required implementation date for the Company as of January 1, 2023.
+Added: Upon adoption, the Company expects to record a cumulative effect adjustment to retained earnings that will increase stockholders’ equity by $2.1 million, net of tax.
+Added: See Note 1 of the consolidated financial statements for additional detail.
Risk Related to Changes in Market Interest Rates
28 unchanged sentences
Liquidity policies and procedures are established by the board, with operating limits set based upon the ratio of loans to deposits and percentage of assets funded with non-core or wholesale funding.
−Removed: We regularly monitor our overall liquidity position to ensure various alternative strategies exist
−Removed: to cover unanticipated events that could affect liquidity.
+Added: We regularly monitor our overall liquidity position to ensure various alternative strategies exist to cover unanticipated events that could affect liquidity.
We also establish policies and monitor guidelines to diversify our wholesale funding sources to avoid concentrations in any one market source.
6 unchanged sentences
The Company’s ability to pay dividends is subject to the ability of Community Bank to make capital distributions to the Company, and also may be limited by Federal Reserve policy.
−Removed: The Company’s long-term ability to pay dividends to its shareholders depends primarily on the ability of the Bank to make capital distributions to the Company and on the availability of cash at the holding company level if the Bank’s earnings are not sufficient to pay dividends.
+Added: The Company’s long-term ability to pay dividends to its stockholders depends primarily on the ability of the Bank to make capital distributions to the Company and on the availability of cash at the holding company level if the Bank’s earnings are not sufficient to pay dividends.
In addition, the Federal Reserve has issued a policy statement regarding the payment of dividends by bank holding companies.
7 unchanged sentences
Insurance coverage may not be available for such losses, or where available, such losses may exceed insurance limits.
−Removed: This risk of loss also includes the potential legal actions that could arise as a result of an operational deficiency or as a result of noncompliance with applicable regulatory standards, adverse business decisions or their implementation, and customer attrition due to potential negative publicity.
+Added: This risk of loss also includes the potential legal actions that could arise as a result of an operational deficiency or as a result of noncompliance with applicable regulatory standards, adverse business decisions or their implementation, and customer attrition
+Added: due to potential negative publicity.
If a breakdown occurs in the internal controls system, improper operation of systems or improper employee actions, the Company could incur financial loss, face regulatory action and suffer damage to its reputation.
12 unchanged sentences
Information security risks have increased significantly due to the use of online, telephone and mobile banking channels by clients and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties.
−Removed: Our technologies, systems, networks and our clients’ devices have been subject to, and are likely to continue to be the
−Removed: target of, cyberattacks, computer viruses, malware, phishing attacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of our or our clients’ confidential, proprietary and other information, the theft of client assets through fraudulent transactions or disruption of our or our clients’ or other third parties’ business operations.
+Added: Our technologies, systems, networks and our clients’ devices have been subject to, and are likely to continue to be the target of, cyberattacks, computer viruses, malware, phishing attacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of our or our clients’ confidential, proprietary and other information, the theft of client assets through fraudulent transactions or disruption of our or our clients’ or other third parties’ business operations.
Any of the foregoing could have a material adverse effect on the Company’s business, financial condition and results of operations.
16 unchanged sentences
The uncertainty as to the nature and effect of such reforms and actions and the political discontinuance of LIBOR may adversely affect the value of and return on our financial assets and liabilities that are based on or are linked to LIBOR, our results of operations or financial condition.
−Removed: In addition, these reforms may also require extensive changes to the contracts that govern these LIBOR based products, as well as our systems and processes.
+Added: In addition, these reforms may also require extensive changes to the contracts that
+Added: govern these LIBOR based products, as well as our systems and processes.
The implementation of a substitute index or indices for the calculation of interest rates under our loan agreements with our borrowers may result in our incurring significant expenses in effecting the transition, may result in reduced loan balances if borrowers do not accept the substitute index or indices, and may result in disputes or litigation with customers over the appropriateness or comparability to LIBOR of the substitute index or indices, which could have an adverse effect on our results of operations.
29 unchanged sentences
Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money.
−Removed: Recently, there have been market indicators of a pronounced rise in inflation and the FRB has indicated its intention to raise certain benchmark interest rates in an effort to combat inflation.
+Added: Recently, there have been market indicators of a pronounced rise in inflation and the FRB has raised certain benchmark interest rates in an effort to combat inflation.
As inflation increases, the value of our investment securities, particularly those with longer maturities, would decrease, although this effect can be less pronounced for floating rate instruments.
In addition, inflation increases the cost of goods and services we use in our business operations, such as electricity and other utilities, which increases our noninterest expenses.
−Removed: Furthermore, our customers are also affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans with us.
+Added: Furthermore, our customers are also affected by inflation and the
+Added: rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans with us.
Climate change and related legislative and regulatory initiatives may materially affect the Company’s financial condition and results of operations.
19 unchanged sentences
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.