22 unchanged sentences
These statements can sometimes be identified by the Corporation's use of forward-looking words such as "may," "will," "anticipate," "estimate," "expect," or "intend." The Corporation cannot guarantee that its expectations in such forward-looking statements will turn out to be correct.
−Removed: The Corporation's actual results could be materially different from expectations because of various factors, including changes in economic conditions or interest rates, credit risk, difficulties in managing the Corporation’s growth, competition, the impact of the COVID-19 pandemic, changes in law or the regulatory environment, including the Dodd-Frank Act, and changes in general business and economic trends.
+Added: The Corporation's actual results could be materially different from expectations because of various factors, including changes in economic conditions or interest rates, credit risk, difficulties in managing the Corporation’s growth, competition, changes in law or the regulatory environment, and changes in general business and economic trends.
Information concerning these and other factors can be found in the Corporation’s periodic filings with the SEC, including the discussion under the heading “Item 1A.
Risk Factors” of this annual report on Form 10-K.
−Removed: The Corporation's quarterly filings are available publicly on the SEC’s web site at http://www.sec.gov, on the Corporation's web site at http://www.chemungcanal.com or by written request to:
+Added: The Corporation's quarterly filings are available publicly on the SEC’s website at http://www.sec.gov, on the Corporation's website at http://www.chemungcanal.com or by written request to:
McKillip, Corporate Secretary, Chemung Financial Corporation, One Chemung Canal Plaza, Elmira, NY 14901.
7 unchanged sentences
Allowance for Loan Losses
−Removed: Management considers the allowance for loan losses to be a critical accounting estimate given the uncertainty in evaluating the level of the allowance required to cover probable incurred credit losses inherent in the loan portfolio, and the material effect that such judgments can have on the Corporation's results of operations.
−Removed: The allowance is established through a provision for loan losses in the Consolidated Statements of Income and is established based on management’s evaluation of the probable inherent losses in our portfolio in accordance with GAAP, and is comprised of both specific valuation allowances and general valuation allowances.
−Removed: Management's evaluation of the adequacy of the allowance for loan losses is performed on a quarterly basis and takes into consideration such factors as the credit risk grade assigned to the loan, historical loan loss experience and review of specific impaired loans.
+Added: Management considers the allowance for loan losses to be a critical accounting estimate given the uncertainty in evaluating the level of allowance required to cover probable incurred credit losses inherent in the loan portfolio, and the material effect that such judgments can have on the Corporation's results of operations.
+Added: Determining the amount requires significant judgement on the part of management, is multi-faceted, and can be imprecise.
+Added: Considerations include use of estimates related to the timing of expected cash flows on impaired loans, estimated losses on pools of homogenous loans based on historical loss experience, implications of current economic trends and conditions, and other qualitative factors, all of which may be susceptible to significant change.
+Added: The allowance is established through a provision for loan losses in the Consolidated Statements of Income, and evaluation of the adequacy of the allowance for loan losses is performed by management on a quarterly basis.
While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions.
In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Corporation's allowance for loan losses.
−Removed: Actual loss experience is supplemented with other qualitative factors based on the risks present for each portfolio class.
−Removed: These qualitative factors include consideration of the following:
−Removed: (1) lending policies and procedures, including underwriting standards and collection, charge-off and recovery policies, (2) national and local economic and business conditions and developments, including the condition of various market segments, and more recently the expected impact of COVID-19 on the various portfolios, (3) loan profiles and volume of the portfolio, (4) the experience, ability, and depth of lending management and staff, (5) the volume and severity of past due, classified and watch-list loans, non-accrual loans, troubled debt restructurings, and other modifications (6) the quality of the Bank’s loan review system and the degree of oversight by the Bank’s Board of Directors, (7) collateral related issues:
−Removed: unsecured, type, declining valuation environment and trend of other related factors, (8) the existence and effect of any concentrations of credit, and changes in the level of such concentrations, (9) the effect of external factors, such as competition and legal and regulatory requirements, on the level of estimated credit losses in the Bank’s current portfolio and (10) the impact of the global economy, including the impact of COVID-19.
−Removed: While management's current evaluation of the allowance for loan losses indicates that the allowance is adequate, under adversely different conditions or assumptions the allowance would need to be increased.
−Removed: For example, if historical loan loss experience significantly worsened or if current economic conditions significantly deteriorated, additional provisions for loan losses would be required to increase the allowance.
−Removed: In addition, the assumptions and estimates used in the internal reviews of the Corporation's non-performing loans and potential problem loans, and the associated evaluation of the related collateral coverage for these loans, has a significant impact on the overall analysis of the adequacy of the allowance for loan losses.
−Removed: Real estate values in the Corporation’s market area did not increase dramatically in the prior several years, and, as a result, any declines in real estate values have been modest.
−Removed: While management has concluded that the current evaluation of collateral values is reasonable under the circumstances, if collateral evaluations were significantly lowered, the Corporation's allowance for loan losses policy would also require additional provisions for loan losses.
−Removed: The determination of the allowance also includes an evaluation of non-impaired loans and is based on historical loss experience adjusted for current factors.
−Removed: Please refer to Note 1 in the Corporation's consolidated financial statements which begins on page F-10, for further discussion.
+Added: Actual loss experience is supplemented with other qualitative factors based on the risks present in each portfolio segment.
+Added: It is difficult to estimate how potential changes in any one economic factor may have, or input might affect, the overall allowance because a wide variety of factors and inputs are considered in estimating the allowance, and changes in those factors and inputs considered may not occur at the same rate or be consistent across all product types.
+Added: Additionally, changes in factors and inputs may be directionally inconsistent, such that improvement in one factor may offset deterioration in others.
+Added: Qualitative factors considered include lending practices & oversight, an array of local and national economic considerations, and other factors pertinent to the credit quality of the portfolio.
+Added: In estimating the allowance for loan and lease losses, management considers the sensitivity of the model to the significant judgements and assumptions built in, and the material impact that these assumptions could have on the allowance.
+Added: Given the concentration of ALLL allocation to the commercial portfolio, specifically in the area of commercial real estate, management has analyzed a series of economic scenarios to determine the hypothetical impact that changes in the underlying conditions of the commercial real estate portfolio may have on reserve requirements.
+Added: Management determined that these scenarios could materially impact ALLL requirements, either positively or adversely.
+Added: Real estate values in the Corporation’s market area have not changed dramatically in recent years, primarily appreciating, and, as a result, any declines in real estate values have been modest.
+Added: While management has concluded that the current evaluation of collateral values is reasonable under the circumstances, if collateral evaluations were significantly lowered, the Corporation's allowance for loan losses policy would require additional provisions for loan losses.
+Added: This analysis helps guide management in making determinations relating to adjustments in the qualitative portion of the allowance.
+Added: If the assumptions underlying the determination of the ALLL prove to be incorrect, the allowance may not be sufficient to cover actual loan losses and an increase in the allowance may be necessary to account for different assumptions or adverse developments.
+Added: In addition, problems with one or more specific loans could require a significant increase to the ALLL.
+Added: Management’s methodology and policy in determining the allowance for loan losses can be found in Note 1 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
+Added: The activity in the allowance for loan losses is depicted in supporting tables in Note 4 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Consolidated Financial Highlights
65 unchanged sentences
(f) Efficiency ratio (unadjusted) is non-interest bearing expense divided by the total of net interest income plus non-interest income.
−Removed: Executive Summary
−Removed: This executive summary of the MD&A includes selected information and may not contain all of the information that is important to readers of this annual report on Form 10-K.
−Removed: For a complete description of the trends and uncertainties, as well as the risks and critical accounting estimates affecting the Corporation, this annual report on Form 10-K should be read in its entirety.
+Added: Consolidated Results of Operations
+Added: The following section of the MD&A provides a comparative discussion of the Corporation’s Consolidated Results of Operations on a reported basis for the years ended December 31, 2022 and 2021.
+Added: For a discussion of the Critical Accounting Estimates that affect the Consolidated Results of Operations, see page 37.
The following table presents selected financial information for the years indicated, and the dollar and percent change (in thousands, except per share and ratio data):
5 unchanged sentences
Pre-provision income 36,335 33,777 2,558 7.6 %
−Removed: Provision for loan losses 17 4,239 (4,222) (99.6) %
+Added: Provision for loan losses ( 554 ) 17 (571) N/M
Income tax expense 8,106 7,335 771 10.5 %
10 unchanged sentences
Return on average equity for the year ended December 31, 2022 was 15.93%, compared with 12.94% for the prior year.
−Removed: The increase in net income for the year ended December 31, 2021, compared to the prior year, was driven by increases in net interest income and non-interest income and decreases in the provision for loan losses and non-interest expenses, partially offset by an increase in income tax expense.
−Removed: Net interest income
−Removed: Net interest income increased $2.7 million, or 4.2% in 2021, compared with the prior year.
−Removed: The increase was due primarily to the impact of an increase of $379.4 million in average interest-earning assets, offset by the impact of a forty-one basis points decline in net interest margin.
−Removed: Non-interest income
−Removed: Non-interest income increased $2.7 million, or 13.0% in 2021, compared to the prior year.
−Removed: The increase was due primarily to increases of $1.6 million in wealth management group fee income, $0.8 million in interchange revenue from debit card transactions, $0.2 million in change in fair value of equity investments, and a $0.7 million one-time refund of real estate taxes, sales tax rebates and Mastercard incentives as compared to the prior year, offset by a $0.7 million decrease in net gains on sales of residential mortgage loans sold into the secondary market.
−Removed: Non-interest expenses
−Removed: Non-interest expenses decreased $0.3 million, or 0.5% in 2021, compared to the prior year.
−Removed: The decrease was due primarily to a decrease of $1.3 million in other non-interest expense, a $0.6 million increase in the credit related to the net periodic pension and post-retirement benefits, and a decrease of $0.4 million in furniture and equipment expenditures, offset by increases of $0.9 million in data processing expense, $0.5 million in pension and other employee benefits, $0.4 million in FDIC insurance, and $0.2 million in professional services.
−Removed: For the years ended December 31, 2021 and 2020, the ratio of non-interest expense to average assets was 2.30% and 2.73%, respectively.
−Removed: Provision for loan losses
−Removed: The provision for loan losses decreased $4.2 million, or 99.6% in 2021, compared to the prior year.
−Removed: The general component of the allowance based on historical loss experience was reduced in total by $1.6 million, primarily a result of the decrease in the pandemic related reserve which included $1.4 million released and $0.2 million utilized for downgraded loans, with a remaining balance of $2.4 million at December 31, 2021.
−Removed: The December 31, 2021 provision included a $1.5 million increase in reserves for impaired loans, primarily due to the impairment of one commercial real estate loan.
−Removed: Net recoveries were $0.1 million in 2021, compared with net charge-offs of $6.8 million in 2020.
−Removed: The decrease in net charge-offs when compared to the prior year was due primarily to a charge-off of a large commercial participation loan for $3.8 million and a $2.1 million partial charge-off of a commercial loan in 2020.
−Removed: In 2020, net charge-offs of $6.8 million were offset by a decline in reserves for impaired loans of $6.6 million.
−Removed: Additionally, the general component of the allowance based on historical loss experience increased by $2.8 million with the establishment of a $4.0 million reserve at year-end 2020 related to the pandemic, partially offset by a decrease of $1.2 million due to a net decrease in the historical loss factors due to a large 2018 loan charge-off which no longer impacted the calculation.
−Removed: Reserves also increased by $0.9 million in 2020 on other classified loans.
−Removed: Income tax expense
−Removed: Income tax expense increased $2.7 million, or 59.2% in 2021, compared to the prior year.
−Removed: The effective tax rate for 2021 increased to 21.7% compared to 19.3% for the prior year.
−Removed: The increase in income tax expense was primarily due to an increase in pretax income.
−Removed: Consolidated Results of Operations
−Removed: The following section of the MD&A provides a comparative discussion of the Corporation’s Consolidated Results of Operations on a reported basis for the years ended December 31, 2021 and 2020.
−Removed: For a discussion of the Critical Accounting Estimates that affect the Consolidated Results of Operations, see page 37.
+Added: The increase in net income for the year ended December 31, 2022, compared to the prior year, was driven by an increase in net interest income and a decrease in the provision for loan losses, offset by a decrease in non-interest income and increases in non-interest expenses and income tax expense.
Net Interest Income
8 unchanged sentences
Fully taxable equivalent net interest margin was 3.05% for the year ended December 31, 2022 compared with 2.84% for the prior year.
−Removed: The increase in net interest income was primarily due to an increase of $2.9 million in interest and dividend income on taxable securities and a decrease of $0.6 million in total interest expense, offset by decreases of $0.6 million in interest income on interest-earning deposits, and $0.2 million in interest income on loans, including fees.
−Removed: The increase in interest and dividend income on taxable securities was due primarily to an increase in average invested balances of $343.0 million and the one-time recognition of $0.6 million related to prepayment penalties on a Fannie Mae Delegated Underwriting and Servicing (DUS) obligation.
−Removed: The increase in average invested balances was primarily due to the purchase of various mortgage-backed securities, SBA loan pools, U.S.
−Removed: Treasury securities and corporate subordinated debt issues during the year, with excess liquidity due to the increase in customer deposits related to the Corporation’s participation in the PPP and various stimulus program deposits received by customers.
−Removed: The decrease in interest expense on deposits was due primarily to the decreases in average rates paid on interest-bearing checking, and savings and money market products, due to the low interest rate environment.
−Removed: The decrease in interest income on interest-earning deposits was due primarily to the drop in interest rates on overnight deposits with the average yield on interest-earning deposits declining from 0.54% in 2020 to 0.17% in 2021, and a decrease of $53.1 million in the average balance of interest-earning deposits in 2021 when compared to the prior year, due to
−Removed: lower average interest-earning deposit levels.
−Removed: The decrease in interest income on loans, including fees was due primarily to decreases in the commercial, consumer and mortgage loan portfolio average yields due to a decrease in interest rates, partially offset by increases in average invested balances in the commercial and mortgage loan portfolios.
−Removed: These increases were primarily due to increased originations of loans secured by non-owner occupied and multi-family commercial properties and residential mortgage loans.
+Added: The increase in net interest income was primarily due to increases of $9.2 million in interest income on loans, including fees, $3.2 million in interest and dividend income on taxable securities, and $0.1 million in interest income on interest-earning deposits, offset by increases of $3.4 million in interest expense on deposits, and $0.5 million in interest expense on borrowed funds.
+Added: The increase in interest income on loans, including fees was due primarily to a 32 basis points increase in the average yield on loans, primarily related to the commercial and consumer loan portfolios due to an increase in interest rates, and a $101.0 million increase in average loan balances, representing increases across all loan categories.
+Added: The increase in interest and dividend income on taxable securities was due primarily to a 28 basis points increase in the average yield, due to an increase in interest rates, and an increase in the average invested balances of $83.9 million.
+Added: The increase in interest income on interest-earning deposits was due primarily to the increase in interest rates on overnight deposits with the average yield on interest-earning deposits increasing from 0.17% in 2021 to 1.24% in 2022.
+Added: The increase in interest expense on deposits was due primarily to a 22 basis points increase in average rates paid on interest-bearing deposits which included higher costing one-way brokered deposits, and an organic deposit campaign in the fourth quarter of 2022, when compared to the prior year.
+Added: The increase in interest expense on borrowed funds was due primarily to an increase in the average balances and interest rates of overnight FHLBNY borrowings, when compared to the prior year.
Average interest-earning assets increased $119.8 million in 2022 when compared to the prior year.
Average interest-bearing liabilities increased $70.0 million when compared to the prior year.
−Removed: The average yield on average interest-earning assets decreased 47 basis points, while the average cost of interest-bearing liabilities decreased nine basis points, as compared to the prior year.
+Added: The average yield on average interest-earning assets increased 36 basis points, and the average cost of interest-bearing liabilities increased 24 basis points, when compared to the prior year.
Average Consolidated Balance Sheet and Interest Analysis
75 unchanged sentences
Management performs an ongoing assessment of the adequacy of the allowance for loan losses based upon a number of factors including an analysis of historical loss factors, collateral evaluations, recent charge-off experience, credit quality of the loan portfolio, current economic conditions and loan growth.
−Removed: Management continues to evaluate the potential impact of the COVID-19 pandemic as it relates to the loan portfolio.
−Removed: As part of this analysis, management identified what it believes to be higher risk loans through a detailed analysis of industry codes.
−Removed: During 2020, management increased certain allowance qualitative factors based on its assessment of the impact of the pandemic on local, national, and global economic conditions as well as the perceived risks inherent in specific industries and credit characteristics.
−Removed: During 2021, as conditions improved somewhat, management adjusted certain qualitative factors resulting in a total decrease in the pandemic related reserve of $1.6 million.
−Removed: Based on this analysis, the provision for loan losses for the years ended December 31, 2021, and 2020 were $17.0 thousand and $4.2 million, respectively.
−Removed: The general component of the allowance based on historical loss experience was reduced in total by $1.6 million, primarily a result of the decrease in the pandemic related reserve which included $1.4 million released and $0.2 million utilized for downgraded loans, with a remaining balance of $2.4 million at December 31, 2021.
−Removed: The December 31, 2021 provision included a $1.5 million increase in reserves for impaired loans, primarily due to the impairment of one commercial real estate loan.
−Removed: In 2020, net charge-offs of $6.8 million were offset by a decline in reserves for impaired loans of $6.6 million.
−Removed: Additionally, the general component of the allowance based on historical loss experience increased by $2.8 million with the establishment of a $4.0 million reserve at year-end 2020 related to the pandemic, partially offset by a decrease of $1.2 million due to a net decrease in the historical loss factors due to a large 2018 loan charge-off which no longer impacted the calculation.
−Removed: Reserves also increased by $0.9 million in 2020 on other classified loans.
−Removed: Net recoveries for the year ended December 31, 2021, were $0.1 million.
+Added: Management continued to evaluate the potential impact of the COVID-19 pandemic as it relates to the loan portfolio in 2022.
+Added: As part of this analysis, the Corporation released the remaining $2.4 million of the pandemic related portion of the allowance in 2022.
+Added: In total, the Corporation released $4.3 million and utilized $0.5 million of the pandemic related allowance established in 2020.
+Added: The Corporation no longer holds a pandemic related reserve as part of the allowance for loan losses.
+Added: The provision for loan losses for the years ended December 31, 2022, and 2021 was credit of a $0.6 million and a provision of $17.0 thousand, respectively.
+Added: The decrease was primarily due to the $2.4 million release of the pandemic related portion of the allowance, the $1.5 million release of a specific reserve related to the sale of a large commercial real estate credit, positive impacts of $0.8 million related to the upgrade of two large commercial credits, and a $1.0 million decrease in the historical loss factor due to the roll-off of a commercial real estate owner occupied property previously charged off in 2020.
+Added: These decreases in the provision were offset by additional provision of $4.2 million related to increased loan growth, along with additional provisioning for loan concentrations and deteriorating national economic conditions.
Net charge-offs for the year ended December 31, 2022, were $0.8 million.
+Added: Net recoveries for the year ended December 31, 2021 were $0.1 million.
Non-interest income
12 unchanged sentences
Total non-interest income $ 21,436 $ 23,870 $ (2,434) (10.2) %
−Removed: Non-interest income for the year ended December 31, 2021 was $23.9 million compared with $21.1 million for the prior year, an increase of $2.7 million, or 13.0%.
−Removed: The increase was due primarily to increases of $1.6 million in wealth management group fee income, $0.8 million in interchange revenue from debit card transactions, $0.4 million in CFS fee and commission income, $0.2 million in change in fair value of equity investments, and $0.5 million in other non-interest income, when compared to the prior year, offset by a $0.7 million decrease in net gains on sales of loans held for sale.
+Added: Non-interest income for the year ended December 31, 2022 was $21.4 million compared with $23.9 million for the prior year, a decrease of $2.4 million, or 10.2%.
+Added: The decrease was due primarily to decreases of $1.0 million in net gains on sales of loans held for sale, $0.8 million in wealth management group fee income, $0.6 million in the change in fair value of equity investments, $0.5 million in other non-interest income, and $0.2 million in interchange revenue from debit card transactions, offset by an increase of $0.6 million in service charges on deposit accounts.
+Added: Net Gains on Sales of Loans Held for Sale
+Added: Net gains on sales of loans held for sale decreased primarily due to a decrease in net gains on sales of residential mortgage loans sold into the secondary market when compared to the prior year.
Wealth Management Group Fee Income
−Removed: The increase in wealth management group fee income was primarily attributed to new business relationships and an increase in the market value of total assets under management or administration, and represents record fee income for the segment.
−Removed: Interchange Revenue from Debit Card Transactions
−Removed: The increase in interchange revenue from debit card transactions was primarily attributable to an increase in consumer debit card usage when compared to the prior year.
−Removed: CFS Fee and Commission Income
−Removed: CFS fee and commission income increased in 2021 compared to the prior year primarily due to new business relationships.
+Added: The decrease in wealth management group fee income was primarily attributed to a decrease in the market value of total assets under management or administration.
Change in Fair Value of Equity Investments
−Removed: Change in fair value of equity investments increased in 2021 compared to the prior year primarily due to an increase in the assets held and the market value thereon.
+Added: Change in fair value of equity investments decreased in 2022 compared to the prior year primarily due to a decrease in the assets held and the market value thereon.
Other non-interest income
−Removed: Other non-interest income increased compared to the prior year primarily due to a $0.7 million one-time refund of real estate taxes, sales tax rebates and Mastercard incentives received in 2021.
−Removed: Net Gains on Sales of Loans Held for Sale
−Removed: Net gains on sales of loans held for sale decreased primarily due to a decrease in net gains on sales of residential mortgage loans sold into the secondary market when compared to the prior year.
+Added: Other non-interest income decreased compared to the prior year primarily due to the receipt of real estate and sales tax refunds received in the prior year.
+Added: Interchange Revenue from Debit Card Transactions
+Added: The decrease in interchange revenue from debit card transactions was primarily attributable to a decrease in consumer debit card usage when compared to the prior year.
+Added: Service Charges on Deposit Accounts
+Added: The increase in service charges on deposit accounts was primarily due to an increase in non-sufficient fund and overdraft fees when compared to the prior year.
Non-interest expenses
20 unchanged sentences
Total non-interest expenses $ 59,280 $ 55,682 $ 3,598 6.5 %
−Removed: Non-interest expense decreased $0.3 million, or 0.5% in 2021.
−Removed: The decrease was due primarily to a decrease of $0.4 million in total non-compensation expenses, offset by an increase of $0.1 million in total compensation expenses.
+Added: Non-interest expense increased $3.6 million, or 6.5% in 2022.
+Added: The increase was due primarily to increases of $2.2 million in total compensation expenses and $1.4 million in total non-compensation expenses.
Compensation expenses
1 unchanged sentence
Pension and other employee benefits increased primarily due to an increase in healthcare costs when compared to the prior year.
−Removed: The increase in salaries and wages was primarily due to annual merit increases offset by a decrease in salaries and wage expense during the year when compared to the prior year.
+Added: The increase in salaries and wages was primarily due to annual merit increases, increases in salary costs to fill open positions due to competitive market conditions, and a decrease in deferred salary costs related to PPP, offset by a decline in the market value of the Corporation's deferred compensation plan, when compared to the prior year.
The increase in the credit related to the net periodic pension and post-retirement benefits was primarily due to a change in factors used to prepare annual actuarial estimates.
Non-compensation expenses
−Removed: Non-compensation expenses decreased $0.4 million, or 1.4%, primarily due to decreases of $1.3 million in other non-interest expense, and a decrease of $0.4 million in furniture and equipment expenditures, offset by increases of $0.9 million in data processing expense, $0.4 million in FDIC insurance, and $0.2 million in professional services.
−Removed: The decrease in other non-interest expense was primarily due to a $0.7 million reserve established in 2020 related to a compliance matter with NYS Department of Financial Services, and the subsequent $0.3 million release of the remaining reserve upon resolution of the matter in 2021, as described in the Corporation's Form 8-K filed June 29, 2021.
−Removed: Also contributing to the decrease was $0.4 million in costs related to the closing of a branch location, including equipment and leasehold improvements and a $0.2 million lease buy-out in the prior year, and a $0.4 million decrease due to a change in restricted stock vesting requirements based upon the adoption of the Corporation's 2021 Equity Incentive Plan as approved by shareholders on June 8, 2021.
−Removed: Furniture and equipment expenditures decreased primarily due to a decrease in depreciable assets and an overall decrease in building furniture and equipment expenditures when compared to the prior year.
−Removed: Data processing expenses increased primarily due to investment in new initiatives in the current year and a $0.2 million credit received in the prior year.
−Removed: FDIC insurance increased primarily due to an increase in the assessment base due to increased average asset balances.
+Added: Non-compensation expenses increased $1.4 million, or 5.4%, primarily due to increases of $1.1 million in other non-interest expense, $0.4 million in data processing expense, $0.2 million in professional services, and $0.2 million in furniture and equipment expenditures, offset by decreases of $0.3 million in net occupancy expense and $0.2 million in amortization of intangible assets.
+Added: The increase in other non-interest expense was due primarily to the $0.3 million recognition of directors' stock compensation expense due to the implementation of the Corporation's 2021 Equity Incentive Plan, a $0.1 million increase in CDARS fee expense, $0.1 million of additional restitution regarding previously disclosed consumer compliance matters, and a $0.2 million related reserve which was initially released in 2021.
+Added: The increase in data processing expense was primarily attributable to investment in the Corporation's Tap-to-Pay debit cards supporting contactless transactions, increased software maintenance expenses, and a credit received in the prior year.
Professional services increased primarily due to additional consulting services in the current year.
+Added: Furniture and equipment expenditures increased primarily due to a an increase in building security enhancements and ATM maintenance expenses when compared to the prior year.
+Added: The decrease in net occupancy expense was primarily attributable to decreases in depreciation expense related to the sale of properties, when compared to the prior year.
+Added: The decrease in amortization of intangible assets was primarily attributable to an intangible asset reaching its fully amortized value.
Income tax expense
6 unchanged sentences
The effective tax rate increased to 22.0% for the year ended December 31, 2022 compared with 21.7% for the prior year.
−Removed: The increase in the effective tax rate can be attributed to an increase in state tax liability.
The increase in income tax expense can be attributed to an increase in pre-tax income.
−Removed: The Effect of COVID-19 on Our Business
−Removed: The Corporation remained flexible with its COVID-19 response, adapting weekly to new micro-cluster zone restrictions and spiking positivity rates throughout our footprint.
−Removed: This flexibility allowed us to ensure a healthy and safe work environment for our colleagues, clients and the communities we assist.
−Removed: At all times, social distancing, sanitizing and facial coverings were required and at certain times, access to branches was limited or restricted.
−Removed: When the need arose to temporarily close a branch, impacted customers were directed to adjacent branches when possible, and offices were immediately deep-cleaned to ensure a safe work environment when employees and customers returned.
−Removed: At the date of this filing all of our 31 branches are open with normal business hours.
−Removed: The Corporation further assisted its customer base as the Paycheck Protection Program (PPP) moved forward with its Forgiveness phase, with the Small Business Administration (SBA).
−Removed: Management did not experience any negative effects on our ability to maintain operations and financial reporting systems, and has not identified any impact on business continuity plans.
−Removed: Management does not anticipate additional risk with respect to its ability to maintain internal control over financial reporting and disclosure controls and procedures, nor does it expect any changes in such controls and procedures.
−Removed: On June 17, 2020 the New York legislature passed, and Governor Cuomo signed, new legislation which allowed certain borrowers to extend the period of forbearance on a primary residence if financial hardship is demonstrated as a result of COVID-19.
−Removed: At its highest point as of May 31, 2020, total loan forbearances represented 15.77% of the Corporation's total loan portfolio.
−Removed: As of December 31, 2021, no loan forbearances due to COVID-19 remained.
−Removed: COVID-19 Loan Modifications Outstanding As Of
−Removed: June 30, 2020 December 31, 2020 December 31, 2021
−Removed: # Clients Total Loan Balance # Clients Total Loan Balance # Clients Total Loan Balance
−Removed: Commercial 172 $167.7 million 13 $19.8 million 0 $ —
−Removed: Retail and Residential 457 $18.0 million 18 $1.0 million 0 $ —
−Removed: The above reflects the uncertain economic situation whereby the initial response by customers prompted a quick reaction to the unknown potential impact of COVID-19 on their business.
−Removed: Subsequently, customers may have reassessed their financial position prior to finalization of a modification, either modifying deferral requests or withdrawing the request altogether.
−Removed: In some cases, customers continued to make payments on modified loans.
−Removed: Of these modifications, 100% were considered current prior to the forbearance and primarily reflect deferrals for 90 days.
−Removed: Paycheck Protection Program Initiative
−Removed: As part of the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"), Congress established the Paycheck Protection Program (PPP) under the direction of the United States Small Business Administration (SBA).
−Removed: Included in the legislation, and additional legislation approved by Congress on April 23, 2020, June 5, 2020 and December 27, 2020, was a total of $659 billion to assist small businesses by providing SBA guaranteed loans to help pay for payroll, in addition to other
−Removed: expenses such as interest expense on mortgages, rent or utility payments.
−Removed: PPP loans have an interest rate of 1.0% and two-year or five-year loan terms to maturity.
−Removed: The funds are an effort to encourage retention of employees and up to the entire loan balance and interest may be forgiven, if the borrower meets certain predetermined SBA criteria.
−Removed: Businesses with less than 500 employees are eligible, although certain corporate organizational structures were not included in the legislation.
−Removed: As a qualified SBA lender, the Corporation was automatically authorized to originate PPP loans.
−Removed: The PPP ended new loans in May, 2021.
−Removed: The Corporation successfully navigated the processes set forth by the SBA and assisted customers and non-customers through Phase 1 of the PPP, originating a total of 1,260 loans.
−Removed: As of December 31, 2021, 100 loans totaling $4.0 million were outstanding related to Phase 1 of the PPP, a portion of which may not be forgiven.
−Removed: The Corporation then assisted the businesses who received PPP loans with the forgiveness application phase of the program.
−Removed: As of December 31, 2021, 1,170 loans totaling $186.3 million were forgiven by the SBA related to Phase 1 of the PPP.
−Removed: A second phase of COVID-19 Relief totaling $248 billion to provide PPP loans to certain eligible small businesses was included in the Consolidated Appropriation Act of 2021, signed into law by the President on December 27, 2020.
−Removed: As of December 31, 2021, 510 loans totaling $39.1 million were outstanding related to Phase 2 of the PPP, a portion of which may not be forgiven.
−Removed: As of December 31, 2021, 365 loans totaling $38.4 million, were forgiven by the SBA.
−Removed: As of March 11, 2022, 319 PPP loans totaling $22.6 million were outstanding related to Phases 1 and 2 of the PPP, a portion of which may not be forgiven.
−Removed: As of March 11, 2022, 1,810 loans totaling $244.3 million, representing Phases 1 and 2 of the PPP, were forgiven by the SBA.
−Removed: Participation in Paycheck Protection Program Liquidity Facility ("PPPLF")
−Removed: The PPPLF was created by the Board of Governors of the Federal Reserve System on April 9, 2020 to facilitate lending by participating financial institutions to small businesses under the PPP of the CARES Act.
−Removed: Under the facility, the Federal Reserve Banks lend to participating financial institutions on a non-recourse basis, taking PPP loans as collateral.
−Removed: The Bank participated in the PPPLF and received funding for 141 loans totaling $66.4 million.
−Removed: The Corporation fully repaid the funds on May 28, 2020.
−Removed: Management believes that the Corporation's liquidity position is strong.
−Removed: The Corporation uses a variety of resources to meet its liquidity needs.
−Removed: These include short term investments, cash flow from lending and investing activities, core-deposit growth and non-core funding sources, such as time deposits of $100,000 or more, FHLB borrowings, securities sold under agreements to repurchase and other borrowings.
−Removed: At December 31, 2021, the Corporation's cash and cash equivalents balance was $27.0 million.
−Removed: The Corporation also maintains an investment portfolio of securities available for sale, comprised primarily of mortgage-backed securities and municipal bonds.
−Removed: Although this portfolio generates interest income for the Corporation, it also serves as an available source of liquidity and capital if the need should arise.
−Removed: As of December 31, 2021, the Corporation's investment in securities available for sale was $792.0 million, $547.7 million of which was not pledged as collateral.
−Removed: Additionally, the Bank's unused borrowing capacity at the Federal Home Loan Bank of New York was $161.0 million as of December 31, 2021.
−Removed: The Corporation did not experience excessive draws on available working capital lines of credit and home equity lines of credit during 2021 due to the COVID-19 pandemic.
−Removed: Nor has the Corporation experienced any significant or unusual activity related to customer reaction to the COVID-19 pandemic that would create stress on the Corporation's liquidity position.
−Removed: With respect to the Corporation's credit risk and lending activities, management has taken actions to identify and assess additional possible credit exposure due to the changing environment caused by the COVID-19 crisis based upon the industry types within our current loan portfolio.
−Removed: Lending risks, as mentioned, are being monitored by industry, based upon NAICS code, with specific attention being paid to those industries that may experience greater stress during this time.
−Removed: The COVID-19 pandemic is expected to continue to impact the Corporation's financial results, as well as demand for its services and products.
−Removed: The short and long-term implications of the COVID-19 pandemic, and related monetary and fiscal stimulus measures, on the Corporation's future revenues, earnings results, allowance for loan losses, capital reserves, and liquidity are uncertain at this time.
Financial Condition
17 unchanged sentences
Cash and cash equivalents
−Removed: The decrease in cash and cash equivalents can be mostly attributed to changes in securities, loans, deposits, and borrowings, offset by net income.
+Added: The increase in cash and cash equivalents can be mostly attributed to changes in securities, loans, deposits, and borrowings, offset by net income.
Investment securities
−Removed: The increase in securities available for sale and held to maturity can be mostly attributed to purchases of investment securities exceeding sales, maturities and calls.
−Removed: The decrease in total loans, net, can be mostly attributed to decreases of $25.7 million in commercial loans and $12.4 million in consumer loans, offset by an increase of $19.9 million in residential mortgage loans.
−Removed: During 2021, PPP loans contributed a net decrease of $107.8 million to the total loan portfolio as of December 31, 2021 due to a total of $185.5 million of paydowns received from the SBA for loan forgiveness, offset by $77.7 million in new Phase 2 loans.
+Added: The decrease was primarily due to $86.2 million in paydowns and a decrease in the fair value of the portfolio of $93.2 million due to increases in interest rates, offset by purchases of $23.7 million of the securities available for sale portfolio.
+Added: The increase in total loans, net, can be mostly attributed to increases of $189.4 million in commercial loans, $95.5 million in consumer loans, and $26.3 million in residential mortgage loans.
+Added: Allowance for Loan Losses
+Added: The decrease in the allowance for loan losses can mostly be attributed to the release of the aforementioned $2.4 million pandemic related portion of the allowance, the $1.5 million release of a specific reserve related to the sale of a large commercial real estate credit, positive impacts of $0.8 million related to upgrades of two large commercial credits, and a $1.0 million decrease in the historical loss factor due to the roll-off of a commercial real estate owner occupied property previously charged off in the second quarter of 2020.
+Added: These decreases in the allowance were offset by additional provision of $4.2 million related to increased loan growth, along with additional provision for loan concentrations and deteriorating national economic conditions.
+Added: The allowance for loan losses was 240.39% of non-performing loans at December 31, 2022 compared to 259.17% at December 31, 2021.
+Added: The ratio of the allowance for loan losses to total loans was 1.07% at December 31, 2022 compared to 1.38% at December 31, 2021.
+Added: Please refer to Note 1 - Summary of Significant Accounting Policies for discussion on transition to Current Expected Credit Losses.
Goodwill and other intangible assets, net
1 unchanged sentence
There were no impairments of goodwill or other intangible assets during the years ended December 31, 2022 and 2021.
−Removed: The increase in deposits can be attributed to increases of $119.2 million in non-interest bearing demand deposits, $2.5 million in interest-bearing demand deposits, $51.0 million in money market accounts and $34.3 million in savings accounts, offset by a decrease of $89.4 million in time deposits.
−Removed: The increase in non-interest-bearing demand deposits was mostly attributable to an increase in personal customer deposits.
−Removed: The increase in interest-bearing demand deposits was due primarily to an increase in commercial deposits.
−Removed: The increase in money market accounts can mostly be attributed to an increase in ICS deposits, and an increase in personal customer deposits.
−Removed: The decrease in time deposits was primarily due to a decrease in municipal certificates of deposit.
−Removed: Overall, customer deposits were impacted by the receipt of stimulus checks and PPP loan disbursements during the year.
+Added: The increase in other assets can be mostly attributed to increases of $16.9 million in deferred tax asset related to the market value adjustment on the available for sale securities portfolio, and $17.9 million in interest rate swap assets, primarily due to changes in interest rates.
+Added: The growth in deposits was attributable to an increase of $206.0 million in time deposits, $73.5 million of which were one-way brokered deposits, offset by decreases of $13.7 million in insured money market accounts, $13.1 million in interest-bearing demand deposits, $6.3 million in non-interest bearing demand deposits, and $1.2 million in savings deposits.
Capital Lease Obligations and FHLBNY Advances
1 unchanged sentence
Other Liabilities
−Removed: The decrease in other liabilities can be mostly attributed to a decrease of $5.6 million in interest rate swap liabilities, primarily due to changes in interest rates.
+Added: The increase in other liabilities can be mostly attributed to a $17.7 million increase in interest rate swap liabilities, primarily due to changes in interest rates.
Shareholders’ equity
−Removed: The increase in shareholders' equity was due primarily to an increase in retained earnings of $20.9 million, which was a result of earnings of $26.4 million, offset by $5.6 million in dividends declared during the current year.
−Removed: The decrease in accumulated other comprehensive income (loss) of $8.9 million can mostly be attributed to a decrease in the fair value of the securities portfolio.
−Removed: Also, treasury stock increased $0.3 million primarily due to the Corporation's common stock repurchase program, offset by the impact of the issuance of shares related to the Corporation's employee benefit plans.
−Removed: As of December 31, 2021, a total of 34,921 shares of common stock at a total cost of $1.3 million were repurchased by the Corporation under its share repurchase program.
+Added: The decrease in shareholders' equity was due primarily to a $68.7 million decrease in accumulated other income (loss), offset by an increase of $23.0 million in retained earnings.
+Added: The decrease in accumulated other comprehensive income (loss) can mostly be attributed to a decrease in the fair value of the securities portfolio.
+Added: The increase in retained earnings was primarily due to net income of $28.8 million, offset by $5.8 million in dividends declared during the current year.
+Added: Treasury stock increased $0.2 million primarily due to the Corporation's common stock repurchase program, offset by the impact of the issuance of shares related to the Corporation's employee benefit plans.
+Added: During 2022, a total of 14,263 shares of common stock at a total cost of $0.6 million were repurchased by the Corporation under its share repurchase program.
The weighted average cost was $45.00 per share repurchased.
2 unchanged sentences
Assets under management or administration
−Removed: The market value of total assets under management or administration in WMG was $2.325 billion, including $344.2 million of assets held under management or administration for the Corporation, at December 31, 2021 compared with $2.091 billion, including $305.5 million of assets held under management or administration for the Corporation, at December 31, 2020, an increase of $234.0 million, or 11.2%.
−Removed: The increase in total assets under management or administration for the Corporation can be mostly attributed to new business relationships and an increase in the market value of the assets under management.
+Added: The market value of total assets under management or administration in WMG was $2.053 billion, including $346.5 million of assets held under management or administration for the Corporation, at December 31, 2022 compared with $2.325 billion, including $344.2 million of assets held under management or administration for the Corporation, at December 31, 2021, a decrease of $271.9 million, or 11.7%.
+Added: The decrease in total assets under management or administration for the Corporation can be mostly attributed to a general decline in the market value of the assets under management.
Balance Sheet Comparisons
16 unchanged sentences
(3) Average balances for investments include securities available for sale at estimated fair value and securities held to maturity, based on amortized cost, equity investments, FHLBNY stock, FRBNY stock, federal funds sold and interest-earning deposits.
−Removed: (4) Average borrowings include overnight and PPPLF advances, securities sold under agreements to repurchase and capitalized lease obligations.
+Added: (4) Average borrowings include overnight advances, and capitalized lease obligations.
Cash and Cash Equivalents
−Removed: Total cash and cash equivalents decreased $81.6 million since December 31, 2020, due to decrease s of $69.5 million in interest-earning deposits in other financial institutions, and $12.1 million in cash and due from financial institutions.
+Added: Total cash and cash equivalents increased $28.9 million when compared to December 31, 2021, due to increases of $16.9 million in interest-earning deposits in other financial institutions, and $11.9 million in cash and due from financial institutions.
The Corporation’s Funds Management Policy includes an investment policy that in general, requires debt securities purchased for the bond portfolio to carry a minimum agency rating of "Baa." After an independent credit analysis is performed, the policy also allows the Corporation to purchase local municipal obligations that are not rated.
2 unchanged sentences
Marketable securities are classified as Available for Sale, while investments in local municipal obligations are generally classified as Held to Maturity.
−Removed: The available for sale segment of the securities portfolio totaled $792.0 million at December 31, 2021, an increase of $237.4 million, or 42.8%, from $554.6 million at December 31, 2020.
−Removed: The increase resulted primarily from new purchases which exceeded maturities and calls.
−Removed: New purchases during the year were primarily in mortgage-backed securities, SBA loan pools, U.S.
−Removed: Treasury securities and corporate subordinated debt issues.
−Removed: The increase in purchased securities was primarily due to a significant increase in customer deposits related to the Corporation's participation in PPP and various stimulus program deposits received by customers, which resulted in excess cash levels.
+Added: The available for sale segment of the securities portfolio totaled $632.6 million at December 31, 2022, a decrease of $159.4 million, or 20.1%, from $792.0 million at December 31, 2021.
+Added: The decrease was primarily due to $86.2 million in paydowns and a decrease in the fair value of the portfolio of $93.2 million due to increases in interest rates, offset by purchases of $23.7 million.
The held to maturity segment of the securities portfolio consists of obligations of political subdivisions in the Corporation’s market areas.
−Removed: These securities totaled $3.8 million at December 31, 2021, an increase of $1.3 million or 53.5%, from $2.5 million at December 31, 2020, due primarily to new purchases.
+Added: These securities totaled $2.4 million at December 31, 2022, a decrease of $1.4 million or 36.0%, from $3.8 million at December 31, 2021, due primarily to maturities.
Non-marketable equity securities at December 31, 2022 include shares of FRBNY stock and FHLBNY stock, carried at their cost of $1.8 million and $6.4 million, respectively.
5 unchanged sentences
Amount Yield Amount Yield Amount Yield Amount Yield
−Removed: Obligations of states and political subdivisions 1,038 2.93 % 319 4.06 % 800 3.92 % — N/A
+Added: Obligations of states and political subdivisions 759 3.95 % 193 3.79 % — N/A — N/A
Time deposits with other institutions 737 1.86 % 735 3.35 % — N/A — N/A
−Removed: Corporate bonds and notes — N/A — N/A — N/A — N/A
−Removed: Total $ 2,171 2.09 % $ 819 1.87 % $ 800 3.92 % $ — N/A
−Removed: The weighted-average yield on the Corporation's held to maturity debt securities at December 31, 2021 were 2.55% related to obligations of states and political subdivisions, and 1.91% related to time deposits with other institutions.
+Added: Total $ 1,496 2.92 % $ 928 3.44 % $ — N/A $ — N/A
+Added: The weighted-average yield on the Corporation's held to maturity debt securities at December 31, 2022 was 3.92% related to obligations of states and political subdivisions, and 2.62% related to time deposits with other institutions.
Management evaluates securities for OTTI on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.
19 unchanged sentences
Total $ 1,829,448 100.0 % $ 1,518,249 100.0 %
−Removed: Portfolio loans totaled $1.518 billion at December 31, 2021 and $1.536 billion at December 31, 2020, a decrease of $18.2 million, or 1.2%.
−Removed: Changes included decreases of $111.7 million, or 30.3%, in commercial and agricultural loans, and $12.4 million, or 5.9%, in total consumer loans, partially offset by increases of $86.0 million, or 12.0%, in commercial real estate loans, and $19.9 million, or 8.3% in residential mortgage loans.
−Removed: The decrease in commercial and agricultural loans was primarily a result of the net decrease in PPP loans of $107.8 million during the year.
−Removed: During 2021, $147.1 million was received from the SBA for loan forgiveness of Phase 1 loans, while $77.7 million of Phase 2 loans were originated and $38.4 million was received from the SBA for loan forgiveness of Phase 2 loans.
−Removed: PPP loan balances of $43.2 million remained at December 31, 2021, with $4.0 million and $39.2 million of Phase 1 and Phase 2 loans respectively.
−Removed: The decrease in total consumer loans was primarily related to a $7.9 million decrease in total home equity lines and loans, along with smaller decreases in both direct and indirect consumer loans.
+Added: Portfolio loans totaled $1.829 billion at December 31, 2022 and $1.518 billion at December 31, 2021, an increase of $311.2 million, or 20.5%.
+Added: The increase was driven by increases of $194.4 million in commercial real estate loans, or 24.2%, $83.6 million, or 70.5% in indirect automobile loans, and $26.3 million in residential mortgages, or 10.2%, offset by a decrease of $5.0 million, or 1.9% in commercial & agricultural loans.
The increase in total commercial real estate loans was a result of a $26.0 million increase in construction loans and a $168.3 million increase in commercial real estate loans, primarily driven by increases in loans secured by non-owner occupied and multi-family properties.
−Removed: The increase in residential mortgage loans was due to new originations retained in the portfolio driven by the continuing low interest rate environment, as increased volume continued throughout the pandemic.
+Added: The increase in indirect automobile loans was attributable to a renewed focus in the program following a pricing restructuring, as well as increased demand for automobiles coupled with elevated vehicle prices nationwide.
+Added: Increases in residential mortgage loans was due to new originations being retained in the portfolio as opposed to being sold into the secondary market, and continued strong demand through the majority of the year, despite the rising interest rate environment.
+Added: The decrease in commercial and agricultural loans was primarily the result of a net decrease in PPP loans of $42.5 million during the year, related to SBA forgiveness.
+Added: PPP loan balances of $0.7 million remained at December 31, 2022, with $0.5 million and $0.2 million of Phase 1 and Phase 2 loans, respectively.
The table below presents the Corporation’s outstanding loan balance by bank division (in thousands):
5 unchanged sentences
*All loans, excluding those originated by the Capital Bank Division.
−Removed: ^ Includes $47.0 million in the Corporation's new Western New York Market as of December 31, 2021.
+Added: ^ Includes $79.8 million and $47.0 million in the Western New York Market as of December 31, 2022 and 2021, respectively.
Loan concentrations are considered to exist when there are amounts loaned to a multiple number of borrowers engaged in similar activities which would cause them to be similarly impacted by changes in economic or other conditions.
−Removed: The Corporation’s concentration policy limits consider the volume of commercial loans to any one specific industry, sponsor, and by collateral type and location.
+Added: The Corporation’s concentration policy limits consider the volume of commercial loans to any one specific industry, sponsor, collateral type and location.
In addition, the Corporation’s policy limits the volume of non-owner occupied commercial mortgages to four times total risk based capital.
4 unchanged sentences
The table below shows the maturity of loans outstanding as of December 31, 2022.
−Removed: Also provided are the amounts due after one year, classified according to fixed interest rates and variable interest rates (in thousands):
+Added: Also provided are the amounts due by maturity, classified according to fixed interest rates and variable interest rates (in thousands):
LOAN AMOUNTS CONTRACTUALLY DUE AFTER DECEMBER 31, 2023
26 unchanged sentences
In the case of non-accrual loans where a portion of the loan has been charged off, the remaining balance is kept in non-accrual status until the entire principal balance has been recovered.
−Removed: The following table summarizes the Corporation's non-performing assets, excluding purchased credit impaired loans (in thousands):
+Added: The following table summarizes the Corporation's non-performing assets, (in thousands):
NON-PERFORMING ASSETS
10 unchanged sentences
Accruing troubled debt restructurings (1) $ 1,405 $ 5,643 $ 2,790 $ 952 $ 816
−Removed: (1) These loans are not included in nonperforming assets above.
−Removed: Interest income recorded on non-accrual and troubled debt restructured loans was $146.0 thousand, and $76.0 thousand, as of December 31, 2021, 2020, respectively.
+Added: (1) These loans are not included in non-performing assets above.
+Added: Interest income recorded on non-accrual and troubled debt restructured loans was $56.0 thousand and $146.0 thousand, as of December 31, 2022, and 2021, respectively.
Non-Performing Loans
Non-performing loans totaled $8.2 million at December 31, 2022, or 0.45% of total loans, compared with $8.1 million at December 31, 2021, or 0.54% of total loans.
−Removed: The decrease in non-performing loans at December 31, 2021 as compared to December 31, 2020 was primarily due to payments received on non-performing loans across all loan portfolios.
+Added: The increase in non-performing loans at December 31, 2022 as compared to December 31, 2021 was due to the additional classification of multiple commercial loans, offset by pay downs on existing non-performing loans.
Non-performing assets, which are comprised of non-performing loans and other real estate owned, was $8.4 million, or 0.32% of total assets, at December 31, 2022, compared with $8.2 million, or 0.34% of total assets, at December 31, 2021.
4 unchanged sentences
The Corporation works closely with borrowers that have financial difficulties to identify viable solutions that minimize the potential for loss.
−Removed: In that regard, the Corporation modified the terms of select loans to maximize their collectability.
−Removed: The modified loans are considered TDRs under current accounting guidance.
+Added: In that regard, the Corporation may modify the terms of select loans to maximize their collectability.
+Added: The modified loans are considered TDRs under current accounting guidance, applicable to the Corporation as of December, 31 2022.
Modifications generally involve short-term deferrals of principal and/or interest payments, reductions of scheduled payment amounts, interest rates or principal of the loan, and forgiveness of accrued interest.
−Removed: Under Section 4013 of the CARES Act, loans less than 30 days past due as of December 31, 2019 will be considered current for COVID-19 related modifications and therefore will not be treated as TDRs, until January 1, 2022.
As of December 31, 2022 and 2021, the Corporation had $4.0 million and $4.6 million of non-accrual TDRs, respectively.
As of December 31, 2022, the Corporation had $1.4 million of accruing TDRs compared with $5.6 million as of December 31, 2021.
+Added: No loans were modifed as troubled debt restructurings during the twelve months ended December 31, 2022.
Impaired Loans
−Removed: A loan is classified as impaired when, based on current information and events, it is probable that the Corporation will be unable to collect both the principal and interest due under the contractual terms of the loan agreement.The unpaid principal balance of impaired loans at December 31, 2021 totaled $18.2 million, including TDRs of $10.3 million, compared to $16.5 million at December 31, 2020, including TDRs of $6.7 million.
+Added: A loan is classified as impaired when, based on current information and events, it is probable that the Corporation will be unable to collect both the principal and interest due under the contractual terms of the loan agreement.
+Added: The unpaid principal balance of impaired loans at December 31, 2022 totaled $7.5 million, including TDRs of $5.4 million, compared to $18.2 million at December 31, 2021, including TDRs of $10.3 million.
The recorded investment of impaired loans at December 31, 2022 totaled $7.5 million compared to $11.6 million at December 31, 2021.
Included in the recorded investment of impaired loans at December 31, 2022, were loans totaling $1.3 million for which impairment allowances of $1.1 million have been specifically allocated to the allowance for loan losses.
−Removed: The increase in recorded investment in impaired loans was primarily due to a $2.9 million increase in commercial real estate impaired loans, partially offset by a $1.0 million decrease in commercial and industrial impaired loans, a $0.3 million decrease in residential mortgage impaired loans and a $0.5 million decrease in home equity impaired lines and loans.
−Removed: As of December 31, 2020, the impaired loan total included $1.8 million of loans for which specific impairment allowances of $1.5 million were allocated to the allowance for loan losses.
+Added: The decrease in the recorded investment in impaired loans was primarily due to the sale of a large commerical real estate loan, reducing the recorded investment in impaired loans by $3.5 million.
As of December 31, 2021, the impaired loan total included $5.2 million of loans for which specific impairment allowances of $3.0 million were allocated to the allowance for loan losses.
3 unchanged sentences
In determining the amount of any specific allocation or charge-off, the Corporation will make adjustments to reflect the estimated costs to sell the property.
−Removed: Upon receipt and review of the updated appraisal, an additional measurement is performed to determine if any adjustments are necessary to reflect the proper provisioning or charge-off.
+Added: Upon receipt and review of an updated appraisal, an additional measurement is performed to determine if any adjustments are necessary to reflect the proper provisioning or charge-off.
Impaired loans are reviewed on a quarterly basis to determine if any changes in credit quality or market conditions would require any additional allocation or recognition of additional charge-offs.
−Removed: Real estate values in the Corporation's market area have been holding steady.
−Removed: Non-real estate collateral may be valued using (i) an appraisal, (ii) net book value of the collateral per the borrower’s financial statements, or (iii) accounts receivable aging reports, that may be adjusted based on management’s knowledge of the client and client’s business.
+Added: Real estate values in the Corporation's market area have remained stable.
+Added: Non-real estate collateral may be valued using (i) an appraisal, (ii) net book value of the collateral per the borrower’s financial statements, or (iii) accounts receivable aging reports, that may be adjusted based on management’s knowledge of the client and the client’s business.
If market conditions warrant, future appraisals are obtained for both real estate and non-real estate collateral.
1 unchanged sentence
The allowance is an amount that management believes will be adequate to absorb probable incurred credit losses on existing loans.
−Removed: The allowance is established based on management’s evaluation of the probable inherent losses in our portfolio in accordance with GAAP, and is comprised of both specific valuation allowances and general valuation allowances.
+Added: The allowance is established based upon management’s evaluation of the probable inherent losses in the portfolio in accordance with GAAP, and is comprised of both specific valuation allowances and general valuation allowances.
A loan is classified as impaired when, based on current information and events, it is probable that the Corporation will be unable to collect both the principal and interest due under the contractual terms of the loan agreement.
9 unchanged sentences
These qualitative factors include consideration of the following:
−Removed: (1) lending policies and procedures, including underwriting standards and collection, charge-off and recovery policies, (2) national and local economic and business conditions and developments, including the condition of various market segments, and more recently the expected impact of COVID-19 on the various portfolios, (3) loan profiles and volume of the portfolio, (4) the experience, ability, and depth of lending management and staff, (5) the volume and severity of past due, classified and watch-list loans, non-accrual loans, troubled debt restructurings, and other modifications (6) the quality of the Bank’s loan review system and the degree of oversight by the Bank’s Board of Directors, (7) collateral related issues:
−Removed: unsecured, type, declining valuation environment and trend of other related factors, (8) the existence and effect of any concentrations of credit, and changes in the level of such concentrations, (9) the effect of external factors, such as competition and legal and regulatory requirements, on the level of estimated credit losses in the Bank’s current portfolio and (10) the impact of the global economy, including the impact of COVID-19.
+Added: (1) lending policies and procedures, including underwriting standards and collection, charge-off and recovery policies, (2) national and local economic and business conditions and developments, including the condition of various market segments, and more recently the anticipated impact of COVID-19 on the various portfolios, (3) loan profiles and volume of the portfolio, (4) the experience, ability, and depth of lending management and staff, (5) the volume and severity of past due, classified and watch-list loans, non-accrual loans, troubled debt restructurings, and other modifications (6) the quality of the Bank’s loan review system and the degree of oversight by the Bank’s Board of Directors, (7) collateral related issues:
+Added: unsecured, type, declining valuation environment and trend of other related factors, (8) the existence and effect of any concentrations of credit, and changes in the level of such concentrations, (9) the effect of external factors, such as competition and legal and regulatory requirements, on the level of estimated credit losses in the Bank’s current portfolio and (10) the impact of changes & trends in the global economy.
The allowance for loan losses is increased through a provision for loan losses charged to operations.
7 unchanged sentences
The ratio of allowance for loan losses to total loans was 1.07% at December 31, 2022 and 1.38% at December 31, 2021, respectively.
−Removed: The ratio of the allowance for loan losses to total loans excluding PPP loans was 1.43% at December 31, 2021, compared to 1.51% at December 31, 2020.
−Removed: The Corporation continues to closely monitor the loan portfolio for effects related to the COVID-19 pandemic.
+Added: The Corporation continued to monitor the loan portfolio for lagging effects related to the COVID-19 pandemic throughout 2022.
Changes in governmental policies and economic pressures during the pandemic placed stress on certain industries while other industries initially anticipated to be highly impacted by the pandemic demonstrated resilience.
−Removed: Based upon management review of these factors and the uncertainty that the pandemic continues to present, there was no change to the pandemic related portion of the allowance during the fourth quarter of 2021, with a balance of $2.4 million as of December 31, 2021.
−Removed: To date the Corporation has released $1.9 million and utilized $0.5 million of the pandemic related provision.
−Removed: Net recoveries for the year ended December 31, 2021 were $0.1 million compared with net charge-offs of $6.8 million for the year ended December 31, 2020.
+Added: Based upon management review of these factors, the remaining $2.4 million of the pandemic related provision was released in 2022.
+Added: Overall, the Corporation released $4.3 million and utilized $0.5 million of the pandemic related provision, and no provision remains at December 31, 2022.
+Added: Net charge-offs for the year ended December 31, 2022 were $0.8 million compared with net recoveries of $0.1 million for the year ended December 31, 2021.
The ratio of net charge-offs (recoveries) to average loans outstanding was 0.05% for 2022 compared to (0.01)% for 2021.
+Added: The increase in net charge-offs can primarily be attributed to the $0.7 million charge off on a large commercial real estate loan.
The table below summarizes the Corporation’s allowance for loan losses, non-accrual loans, and ratio of net charge-offs and recoveries to average loans outstanding by loan category for the years ended December 31, 2022 and December 31, 2021, by category (in thousands):
24 unchanged sentences
1 Ratio is a percentage of loan category.
−Removed: The increase in the allowance to non-accrual loans is primarily due to a $1.8 million decrease in non-accrual loans from 2020 to 2021.
−Removed: The decrease in net charge-offs and recoveries to outstanding loans ratios was primarily due to the charge-off of a large commercial participation loan for $3.8 million and a $2.1 million partial charge-off of a commercial loan in 2020.
+Added: The decrease in the allowance to non-accrual loans was primarily due to a $0.1 million increase in non-accrual loans from 2021 to 2022, without an equivalent increase in the allowance allocated to non-accrual loans.
+Added: This was due to the sale of a large commercial real estate loan which carried a specifically allocated reserve of $1.5 million, resulting in the majority of non-accrual loans at December 31, 2022 being carried without a specific reserve allocation.
+Added: The decrease in the allowance for loan losses to outstanding loans can be attributed to the increase of $311.2.
+Added: million in outstanding loans, most of which were collectively evaluated for impairment at December 31, 2022, and therefore required lower allowance allocation rates to be applied.
Refer to Note 4 of the audited Consolidated Financial Statements appearing elsewhere in this report for components used in credit ratios presented above.
18 unchanged sentences
At December 31, 2022, OREO totaled $0.2 million compared to $0.1 million at December 31, 2021.
−Removed: The decrease in other real estate owned was due primarily to three residential properties and one commercial property sold during 2021.
+Added: There were four properties relating to residential mortgages and one property relating to a residential home equity loan added to OREO in 2022, and four residential properties were sold from OREO during 2022.
The table below summarizes the Corporation’s deposit composition by segment at December 31, 2022, and 2021, and the dollar and percent change from December 31, 2021 to December 31, 2022 (in thousands):
−Removed: Percentage Change from Prior Year
−Removed: 2021 2020 2021
+Added: December 31, 2022 December 31, 2021 2022 v.
+Added: Amount % of Total Amount % of Total $ Change % Change
Non-interest-bearing demand deposits $ 733,329 31.4 % $ 739,607 34.3 % $ (6,278) (0.8) %
Interest-bearing demand deposits 271,645 11.7 % 284,721 13.2 % (13,076) (4.6) %
−Removed: Insured money market accounts 654,553 603,583 8.4%
+Added: Money market accounts 640,840 27.5 % 654,553 30.4 % (13,713) (2.1) %
Savings deposits 279,029 12.0 % 280,195 13.0 % (1,166) (0.4) %
−Removed: Time deposits 196,357 285,731 (31.3)%
+Added: Certificates of deposits $250,000 or less 272,182 11.7 % 141,990 6.6 % 130,192 91.7 %
+Added: Certificates of deposits greater than $250,000 31,547 1.4 % 27,974 1.3 % 3,573 12.8 %
+Added: One-way brokered deposits 73,452 3.2 % — — % 73,452 N/A
+Added: Other time deposits 25,203 1.1 % 26,393 1.2 % (1,190) (4.5) %
Total $ 2,327,227 100.0 % $ 2,155,433 100.0 % $ 171,794 8.0 %
1 unchanged sentence
At December 31, 2022, demand deposit and money market accounts comprised 70.7% of total deposits compared with 77.9% at December 31, 2021.
−Removed: The growth in deposits was attributable to increases of $119.2 million in non-interest-bearing demand deposits, $2.5 million in interest-bearing demand deposits, $51.0 million in insured money market accounts, and $34.3 million in savings deposits, offset by a decrease of $89.4 million in time deposits.
−Removed: The growth in deposits was due primarily to increases of $76.1 million in consumer funds, and $42.8 million in commercial deposits, offset by a decrease of $1.5 million in public deposits.
−Removed: The increase in deposits was partially due to the collection of stimulus funds and PPP loan disbursements.
+Added: The growth in deposits was attributable to an increase of $206.0 million in time deposits, $73.5 million of which were one-way brokered deposits, offset by decreases of $13.7 million in money market accounts, $13.1 million in interest-bearing demand deposits, $6.3 million in non-interest bearing demand deposits, and $1.2 million in savings deposits.
At December 31, 2022, public funds deposits totaled $349.0 million compared to $378.9 million at December 31, 2021.
2 unchanged sentences
There is a seasonal component to public deposit levels associated with annual tax collections.
−Removed: Public funds deposits will increase at the end of the first and third quarters.
+Added: Public funds deposits generally increase at the end of the first and third quarters.
Public funds deposit accounts above the FDIC insured limit are collateralized by municipal bonds and eligible government and government agency securities such as those issued by the FHLB, Fannie Mae, and Freddie Mac.
9 unchanged sentences
Percentage of public funds to total deposits 15.0 % 17.6 %
−Removed: The aggregate amount of the Corporation's outstanding uninsured deposits was $366.5 million and $407.6 million as of December 31, 2021 and 2020, respectively.
+Added: The aggregate amount of the Corporation's outstanding uninsured deposits was $548.0 million, or 24%, and $558.0 million, or 26%, as of December 31, 2022 and 2021, respectively.
As of December 31, 2022, the aggregate amount of the Corporation's outstanding certificates of deposit in amounts greater than or equal to $250,000 was $31.5 million.
11 unchanged sentences
Total deposits $ 2,327,227 $ 2,155,433 $ 2,037,774 $ 1,572,138 $ 1,569,237
−Removed: *All deposits, excluding those originated by the Capital Bank Division.
+Added: *All deposits, excluding those originated by the Capital Bank Division, and including one-way brokered deposits.
In addition to consumer, commercial and public deposits, other sources of funds include brokered deposits.
3 unchanged sentences
Using a sophisticated matching system, funds are exchanged on a dollar-for-dollar basis, so that the equivalent of an original deposit comes back to the originating institution.
−Removed: The Corporation had no deposits obtained through brokers as of December 31, 2021 and 2020.
Deposits placed in the CDARS and ICS programs were $441.6 million and $288.1 million as of December 31, 2022 and 2021, respectively.
3 unchanged sentences
Strategies that have been developed and implemented to generate these deposits include:
−Removed: (i) acquire deposits by entering new markets through denovo branching, (ii) an annual checking account marketing campaign, (iii) training branch employees to identify and meet client financial needs with Bank products and services, (iv) link business and consumer loans to a primary checking account at the Bank, (v) aggressively promote direct deposit of client’s payroll checks or benefit checks and (vi) constantly monitor the Corporation’s pricing strategies to ensure competitive products and services.
−Removed: The Corporation also considers brokered deposits to be an element of its deposit strategy and anticipates that it may use brokered deposits as a secondary source of funding to support growth.
+Added: (i) acquire deposits by entering new markets through denovo branching, (ii) training branch employees to identify and meet client financial needs with Bank products and services, (iii) link business and consumer loans to a primary checking account at the Bank, (iv) aggressively promote direct deposit of client’s payroll checks or benefit checks and (v) constantly monitor the Corporation’s pricing strategies to ensure competitive products and services.
+Added: The Corporation also considers brokered deposits to be an element of its deposit strategy and anticipates that it may use brokered deposits as a secondary source of funding to support asset growth.
Information regarding deposits is included in Note 8 to the consolidated financial statements appearing elsewhere in this report.
−Removed: FHLBNY overnight advances increased $14.6 million at December 31, 2021 when compared to 2020, for which there were no outstanding FHLBNY advances.
+Added: FHLBNY overnight advances increased $81.2 million at December 31, 2022 when compared to 2021.
For each year ended December 31, 2022, and 2021 respectively, the average outstanding balance of borrowings that mature in one year or less did not exceed 30% of shareholders' equity.
2 unchanged sentences
There were no securities sold under agreements to repurchase as of and for the years ended December 31, 2022, or 2021.
−Removed: The Corporation offers interest rate swap agreements to qualified commercial loan customers.
+Added: The Corporation offers interest rate swap agreements to qualified commercial lending customers.
These agreements allow the Corporation’s customers to effectively fix the interest rate on a variable rate loan by entering into a separate agreement.
6 unchanged sentences
Since the terms of the two interest rate swap agreements are identical, the income statement impact to the Corporation is limited to the day one gain and an allowance for credit loss exposure, in the event of nonperformance.
−Removed: The Corporation recognized $0.4 million and $0.5 million for the years ended December 31, 2021 and 2020 , respectively.
+Added: The Corporation recognized $0.3 million and $0.4 million in swap income for the years ended December 31, 2022 and 2021 , respectively.
The Corporation also participates in the credit exposure of certain interest rate swaps in which it participates in the related commercial loan.
4 unchanged sentences
Shareholders’ Equity
−Removed: Total shareholders’ equity was $211.5 million at December 31, 2021, compared with $199.7 million at December 31, 2020, an increase of $11.8 million, or 5.9%, primarily due to an increase in retained earnings.
−Removed: The increase in retained earnings of $20.9 million was due primarily to earnings of $26.4 million offset by $5.6 million in dividends declared during the year.
−Removed: The decrease in accumulated other comprehensive income (loss) of $8.9 million can primarily be attributed to a decrease in the fair market value of the securities portfolio.
+Added: Total shareholders’ equity was $166.4 million at December 31, 2022, compared with $211.5 million at December 31, 2021, a decrease of $45.1 million, or 21.3%.
+Added: The decrease in shareholders' equity was due primarily to a $68.7 million decrease in accumulated other income (loss), offset by an increase of $23.0 million in retained earnings.
+Added: The decrease in accumulated other comprehensive income (loss) can mostly be attributed to a decrease in the fair value of the securities portfolio.
+Added: The increase in retained earnings was primarily due to net income of $28.8 million, offset by $5.8 million in dividends declared during the current year.
Treasury stock increased $0.2 million primarily due to the Corporation's common stock repurchase program, offset by the impact of the issuance of shares related to the Corporation's employee benefit plans.
Total shareholders’ equity to total assets ratio was 6.29% at December 31, 2022 compared with 8.74% at December 31, 2021.
−Removed: Tangible equity to tangible assets ratio increased to 7.91% at December 31, 2021, from 7.87% at December 31, 2020.
−Removed: The Bank is subject to capital adequacy guidelines of the Federal Reserve which establish a framework for the classification of financial institutions into five categories:
+Added: Tangible equity to tangible assets ratio was 5.51% at December 31, 2022, compared with 7.91% at December 31, 2021.
+Added: The Bank is subject to the capital adequacy guidelines of the Federal Reserve which establish a framework for the classification of financial institutions into five categories:
well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized.
2 unchanged sentences
For more information regarding current capital regulations see Part I-“Business-Supervision and Regulation-Regulatory Capital Requirements.”
−Removed: Beginning second quarter of 2021, the Corporation increased quarterly dividends to shareholders 19.2% to $0.31 per share.
Cash dividends declared during 2022 totaled $5.8 million, or $1.24 per share, compared to $5.6 million, or $1.19 per share in 2021.
5 unchanged sentences
Under the repurchase program, the Corporation may repurchase up to 250,000 shares of its common stock, or approximately 5% of its then outstanding shares.
−Removed: The repurchase program permits shares to be repurchased in open market or privately negotiated transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities and Exchange Commission.
+Added: The repurchase program permits shares to be repurchased in open market or privately negotiated transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities and Exchange Act of 1934.
As of March 10, 2023, the Corporation repurchased a total of 49,184 shares of common stock at a total cost of $2.0 million under the repurchase program at the weighted average cost of $40.42 per share.
11 unchanged sentences
The Corporation uses a variety of resources to meet its liquidity needs.
−Removed: These include short term investments, cash flow from lending and investing activities, core-deposit growth and non-core funding sources, such as time deposits of $100,000 or more, securities sold under agreements to repurchase and other borrowings.
+Added: These include short term investments, cash flow from lending and investing activities, core-deposit growth and non-core funding sources, such as time deposits of $250,000 or more, one-way brokered deposits, securities sold under agreements to repurchase and other borrowings.
The Corporation is a member of the FHLBNY, which allows it to access borrowings which enhance management's ability to satisfy future liquidity needs.
1 unchanged sentence
The Corporation also had a total of $68.0 million of unsecured lines of credit with six different financial institutions, all of which were available at December 31, 2022.
−Removed: The Corporation had a total of $68.0 million of unsecured lines of credit with six different financial institutions, all of which was available at December 31, 2020.
−Removed: The PPPLF was created by the Board of Governors of the Federal Reserve System on April 9, 2020 to facilitate lending by participating financial institutions to small businesses under the PPP of the CARES Act.
−Removed: Under the facility, the Federal Reserve Banks lend to participating financial institutions on a non-recourse basis, taking PPP loans as collateral.
−Removed: The Bank participated in the PPPLF and received funding for 141 loans totaling $66.4 million.
−Removed: The Corporation fully repaid the funds on May 28, 2020.
+Added: On March 12, 2023, the Treasury Department, Federal Reserve and FDIC jointly announced a new liquidity program, the Bank Term Funding Program (BTFP), in response to the failure of two banks earlier that week.
+Added: Under the BTFP, institutions can pledge certain securities (i.e., securities eligible for purchase by the Federal Reserve Banks in open market operations) for the par value of the securities at a borrowing rate of ten basis points over the one-year overnight index swap rate.
+Added: There will be no fees with the advance.
+Added: federally insured depository institution is eligible to participate in the BTFP.
+Added: The advances, which may have a term of up to one year, may be prepaid by the borrowing institution at any time (including for purposes of refinancing) without penalty.
The Corporation has a detailed Funds Management Policy that includes sections on liquidity measurement and management, and a Liquidity Contingency Plan that provide for the prompt and comprehensive response to unexpected demands for liquidity.
4 unchanged sentences
Consolidated Cash Flows Analysis
−Removed: The table below summarizes the Corporation's cash flows for the years indicated (in thousands):
+Added: The table below summarizes the Corporation's cash flows on a direct basis, for the years indicated (in thousands):
CONSOLIDATED SUMMARY OF CASH FLOWS
9 unchanged sentences
Investing activities
−Removed: Cash used in investing activities during the year ended December 31, 2021 predominantly resulted from purchases of securities available for sale, offset by maturities, and principal collected on securities available for sale.
+Added: Cash used in investing activities during the year ended December 31, 2022 predominantly resulted from a net increase in loans, offset by maturities, and principal collected on securities available for sale.
Cash used in investing activities during the year ended December 31, 2021 predominantly resulted from purchases of securities available for sale and a net increase in loans, offset by maturities, and principal collected on securities available for sale.
Financing activities
+Added: Cash provided by financing activities during the year ended December 31, 2022 resulted primarily from an increase in certificate of deposits, one-way brokered deposits, and FHLBNY overnight advances, offset by the payment of dividends to shareholders.
Cash provided by financing activities during the year ended December 31, 2021 resulted from an increase in deposits and FHLBNY overnight advances, offset by the payment of dividends to shareholders and the repurchase of treasury shares through the Corporation's common stock repurchase program.
−Removed: Cash provided by financing activities during the year ended December 31, 2020 predominantly resulted from an increase in deposits, offset by the payment of dividends to shareholders and the repurchase of treasury shares through the Corporation's common stock repurchase program.
Off-balance Sheet Arrangements
30 unchanged sentences
Prompt corrective action regulations provide five classifications:
−Removed: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition.
+Added: well capitalized, adequately capitalized, under capitalized, significantly under capitalized, and critically under capitalized, although these terms are not used to represent overall financial condition.
If adequately capitalized, regulatory approval is required to accept brokered deposits.
12 unchanged sentences
Banking regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies.
−Removed: Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the current year’s net income, combined with the retained net income of the preceding two years, subject to the capital requirements in the table above.
+Added: Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the current year’s net income, combined with the retained net income of the preceding two years.
At December 31, 2022, the Bank could, without prior approval, declare dividends of approximately $49.3 million.
41 unchanged sentences
amortization of intangible assets (15) (243)
−Removed: legal accruals and settlements — —
Adjusted non-interest expense (non-GAAP) $ 59,265 $ 55,439
55 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.