What changed in this filing

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Item 1. Financial Statements

2022-11-14 compared with 2022-08-12 · 164 added, 111 removed, 812 unchanged (25% of the section changed)

3 unchanged sentences

and Subsidiary

September 30,

Consolidated Balance Sheets

8 unchanged sentences

( 7,710,256 )

Deferred net loan cost (fees)

Deferred net loan costs (fees)

Bank premises and equipment, net

38 unchanged sentences

and Subsidiary

Three Months Ended June 30,

Three Months Ended September 30,

Consolidated Statements of Income

32 unchanged sentences

and Subsidiary

Six Months Ended June 30,

Nine Months Ended September 30,

Consolidated Statements of Income

33 unchanged sentences

Consolidated Statements of Comprehensive (Loss) Income

Three Months Ended June 30,

Other comprehensive (loss) income, net of tax:

Unrealized holding (loss) gain on securities AFS arising during the period

Three Months Ended September 30,

Other comprehensive loss, net of tax:

Unrealized holding loss on securities AFS arising during the period

( 8,978,128 )

Other comprehensive (loss) income, net of tax

Other comprehensive loss, net of tax

( 7,092,721 )

1 unchanged sentence

$ ( 3,482,215

Six Months Ended June 30,

Nine Months Ended September 30,

Other comprehensive loss, net of tax:

4 unchanged sentences

( 21,392,376 )

( 1,196,853 )

Total comprehensive (loss) income

4 unchanged sentences

Consolidated Statements of Changes in Shareholders' Equity

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

shareholders'

1 unchanged sentence

$ ( 1,166,971 )

$ ( 2,622,777 )

Issuance of common stock

22 unchanged sentences

$ ( 2,622,777 )

*Accumulated other comprehensive (loss) income

Issuance of common stock

Cash dividends declared

( 1,243,187 )

Preferred stock

Comprehensive income

Other comprehensive loss

( 7,092,721 )

September 30, 2022

$ ( 22,559,347 )

$ ( 2,622,777 )

*Accumulated other comprehensive loss

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

2 unchanged sentences

Consolidated Statements of Changes in Shareholders' Equity

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

shareholders'

6 unchanged sentences

Preferred stock

Redemption of preferred stock

Comprehensive income

14 unchanged sentences

$ ( 2,622,777 )

Issuance of common stock

Cash dividends declared

( 1,176,771 )

Preferred stock

Comprehensive income

Other comprehensive loss

September 30, 2021

$ ( 281,505 )

$ ( 2,622,777 )

*Accumulated other comprehensive income (loss)

3 unchanged sentences

Consolidated Statements of Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30,

Cash Flows from Operating Activities:

Adjustments to reconcile net income to net cash provided by

operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization, bank premises and equipment

3 unchanged sentences

Gain on sale of bank premises and equipment

(Income) loss from CFS Partners

Capital loss on leases

Income from CFS Partners

Amortization of bond premium, net

4 unchanged sentences

Increase (decrease) in taxes payable

Increase in interest receivable

(Increase) decrease in interest receivable

Decrease in mortgage servicing rights

6 unchanged sentences

Decrease in interest payable

Increase (decrease) in accrued expenses

Decrease in accrued expenses

Increase (decrease) in other liabilities

8 unchanged sentences

Decrease in limited partnership contributions payable

Proceeds from distribution from CFS Partners

(Increase) decrease in loans, net

1 unchanged sentence

Capital expenditures net of proceeds from sales of bank premises and equipment

( 2,884,472 )

Recoveries of loans charged off

3 unchanged sentences

Cash Flows from Financing Activities:

Net (decrease) increase in demand and interest-bearing transaction accounts

( 14,107,598 )

Net increase in demand and interest-bearing transaction accounts

Net increase in money market and savings accounts

1 unchanged sentence

( 1,124,017 )

Net decrease in repurchase agreements

( 5,694,301 )

Net decrease in repurchase agreements

( 16,375,099 )

Repayments on long-term borrowings

(Decrease) increase in finance lease obligations

Decrease in finance lease obligations

Dividends paid on preferred stock

2 unchanged sentences

( 2,495,153 )

Net cash (used in) provided by financing activities

( 10,895,490 )

Net decrease in cash and cash equivalents

( 43,291,300 )

Net cash provided by financing activities

Net (decrease) increase in cash and cash equivalents

( 36,456,663 )

Cash and cash equivalents:

$ 129,752,036

Supplemental Schedule of Cash Paid During the Period:

4 unchanged sentences

$ ( 1,515,004

Additions to finance lease obligations

Common Shares Dividends Paid:

Dividends declared

Decrease (increase) in dividends payable attributable to dividends declared

Increase in dividends payable attributable to dividends declared

Dividends reinvested

10 unchanged sentences

The results of operations for the interim period are not necessarily indicative of the results of operations to be expected for any other interim period or the full annual period ending December 31, 2022.

Certain amounts disclosed in the Notes below for the 2021 annual and three- and six-month periods of 2021 have been reclassified to conform to the current year presentation.

Certain amounts disclosed in the Notes below for the 2021 annual and three- and nine-month periods of 2021 have been reclassified to conform to the current year presentation.

The Company is considered a “smaller reporting company” under the disclosure rules of the SEC, as amended in 2018.

4 unchanged sentences

Asset backed security

Financial Accounting Standards Board

Available-for-sale

Federal Deposit Insurance Corporation

MBS issued by a US government agency

Available-for-sale

Federal Home Loan Bank of Boston

MBS issued by a US government agency

Federal Home Loan Mortgage Corporation

Asset Liability Committee

Federal Open Market Committee

Allowance for loan losses

Asset Liability Committee

Federal Reserve Board

Accumulated other comprehensive income

Allowance for loan losses

Federal Reserve Bank of Boston

Accounting Standards Codification

Accumulated other comprehensive income

Generally Accepted Accounting Principles

Accounting Standards Update

Accounting Standards Codification

in the United States

Community Bancorp.

Accounting Standards Update

Government sponsored enterprise

Community National Bank

Community Bancorp.

Held-to-maturity

Borrower-in-Custody

Community National Bank

Insured Cash Sweeps of the InterFi Network

Board of Directors

Borrower-in-Custody

Internal Revenue Service

Bank owned life insurance

Board of Directors

Jobs for New England

Bank owned life insurance

Basis point(s)

Coronavirus Aid Relief and Economic

London Interbank Offered Rate

Certificate of Deposit Accounts Registry

Mortgage-backed security

Service of the InterFi Network

Mortgage servicing rights

Community Bank Leverage Ratio

Certificates of deposit

Net interest income

Certificate of Deposit Accounts Registry

Core deposit intangible

Other amortizing security

Service of the InterFi Network

Current Expected Credit Loss

Other comprehensive income (loss)

Certificates of deposit

Community Financial Services Group, LLC

Other real estate owned

Core deposit intangible

CFS Partners:

Community Financial Services Partners,

Other-than-temporary impairment

Current Expected Credit Loss

Private mortgage insurance

Community Financial Services Group, LLC

Collateralized Mortgage Obligations

Paycheck Protection Program

CFS Partners:

Community Financial Services Partners,

USDA Rural Development

Small Business Administration

Collateralized Mortgage Obligation

Securities and Exchange Commission

Community Bancorp.

and Subsidiary

Troubled-debt restructuring

USDA Rural Development

Coronavirus Disease 2019

Department of Agriculture

Small Business Administration

Commercial Real Estate

Veterans Administration

Securities and Exchange Commission

Demand Deposit Account(s)

Economic Growth, Regulatory Relief and

Secured Overnight Financing Rate

Depository Trust Company

Consumer Protection Act of 2018

Troubled-debt restructuring

Dividend Reinvestment Plan

Department of Agriculture

Exchange Act:

Securities Exchange Act of 1934

Veterans Administration

Financial Accounting Standards Board

Recent Accounting Developments

5 unchanged sentences

A modified version of these requirements also applies to debt securities classified as available for sale, which will require that credit losses on those securities be recorded through an allowance for credit losses rather than a write-down.

The ASU may have a material impact on the Company's consolidated financial statements upon adoption as it will require a change in the Company's methodology for calculating its ALL and allowance on unused commitments.

The Company will transition from an incurred loss model to an expected loss model, which may result in an increase in the ALL upon adoption and may negatively impact the Company’s and the Bank's regulatory capital ratios.

The ASU will require a change in the Company's methodology for calculating its ALL and allowance on unused commitments.

The Company has formed a committee to assess the implications of this new pronouncement and transitioned to a software solution for preparing the ALL calculation and related reports that management believes provides the Company with stronger data integrity, ease and efficiency in ALL preparation.

2 unchanged sentences

The ASU will become effective for the Company beginning with the 2023 fiscal year including interim periods.

Parallel calculations under the existing ALL methodology and the CECL model will be run throughout 2022 in preparation for the transition to CECL.

Parallel calculations under the existing ALL methodology and the CECL model are being run throughout 2022 in preparation for the transition to CECL.

Based on the September 30, 2022 parallel calculation, the required adjustment would not have a material impact to retained earnings and regulatory capital.

In March 2022, the FASB issued ASU No.

6 unchanged sentences

The guidance will become effective for the Company beginning with the fiscal year 2023, including interim periods.

The Company is currently assessing the impact of ASU No.

The Company is assessing the impact of ASU No.

2022-02 but does not expect that its adoption will have a material impact on the consolidated financial statements.

10 unchanged sentences

The following tables illustrate the calculation of earnings per common share for the periods presented, as adjusted for the cash dividends declared on the preferred stock:

Three Months Ended June 30,

Three Months Ended September 30,

Net income, as reported

$ 3,610,506 $ 3,699,202

dividends to preferred shareholders

17,813 12,188

Net income available to common shareholders

Weighted average number of common shares used in calculating earnings per share

$ 3,592,693 $ 3,687,014

Weighted average number of common shares

used in calculating earnings per share

5,409,612 5,354,187

Earnings per common share

Six Months Ended June 30,

$ 0.66 $ 0.69

Nine Months Ended September 30,

Net income, as reported

1 unchanged sentence

Net income available to common shareholders

Weighted average number of common shares used in calculating earnings per share

Weighted average number of common shares

used in calculating earnings per share

Earnings per common share

1 unchanged sentence

Debt securities AFS as of the balance sheet dates consisted of the following:

June 30, 2022

September 30, 2022

GSE debt securities

17 unchanged sentences

These pledged investments as of the balance sheet dates were as follows:

June 30, 2022

September 30, 2022

December 31, 2021

There were no sales of debt securities during the first six months of 2022 or 2021.

There were no sales of debt securities during the first nine months of 2022 or 2021.

The scheduled maturities of debt securities as of the balance sheet dates were as follows:

June 30, 2022

September 30, 2022

Due in one year or less

15 unchanged sentences

12 months or more

June 30, 2022

September 30, 2022

GSE debt securities

19 unchanged sentences

In analyzing an issuer's financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies or other adverse developments in the status of the securities have occurred, and the results of reviews of the issuer's financial condition.

As of June 30, 2022 and December 31, 2021, there were no declines in the fair value of any of the securities reflected in the table above that were deemed by management to be OTTI.

As of September 30, 2022 and December 31, 2021, there were no declines in the fair value of any of the securities reflected in the table above that were deemed by management to be OTTI.

Loans, Allowance for Loan Losses and Credit Quality

The composition of net loans as of the balance sheet dates was as follows:

September 30,

Commercial & industrial

7 unchanged sentences

( 7,710,256 )

Deferred net loan cost (fees)

Deferred net loan costs (fees)

$ 716,228,517

1 unchanged sentence

The following is an age analysis of past due loans (including non-accrual) as of the balance sheet dates, by portfolio segment:

June 30, 2022

September 30, 2022

Commercial & industrial

18 unchanged sentences

Number of loans

June 30, 2022

September 30, 2022

December 31, 2021

14 unchanged sentences

The general component of the ALL is based on historical loss experience and various qualitative factors and is stratified by the following loan segments:

commercial and industrial, CRE, municipal, residential real estate 1st lien, residential real estate Jr lien, purchased loans and consumer loans.

commercial and industrial, purchased loans, CRE, municipal, residential real estate 1st lien, residential real estate Jr lien and consumer loans.

The Company does not disaggregate its portfolio segments further into classes.

58 unchanged sentences

The tables below summarize changes in the ALL and select loan information, by portfolio segment, for the periods indicated.

As of or for the three months ended June 30, 2022

As of or for the three months ended September 30, 2022

ALL beginning balance

1 unchanged sentence

ALL ending balance

As of or for the six months ended June 30, 2022

As of or for the nine months ended September 30, 2022

ALL beginning balance

17 unchanged sentences

$ 689,988,533

As of or for the three months ended June 30, 2021

As of or for the three months ended September 30, 2021

ALL beginning balance

1 unchanged sentence

ALL ending balance

As of or for the six months ended June 30, 2021

As of or for the nine months ended September 30, 2021

ALL beginning balance

2 unchanged sentences

Impaired loans, by portfolio segment, were as follows:

As of June 30, 2022

Investment(1)

Investment(1)(2)

As of September 30, 2022

Investment(1)

Recognized (3)

Related allowance recorded

Commercial & industrial

Commercial real estate

Residential real estate

6 unchanged sentences

Total impaired loans

Recorded investment in impaired loans as of June 30, 2022 includes accrued interest receivable of $ 33,126 .

For the three months ended June 30, 2022.

For the six months ended June 30, 2022.

Recorded investment in impaired loans as of September 30, 2022 includes accrued interest receivable of $ 12,627 .

As of September 30, 2022

Three Months Ended

Nine Months Ended

Related allowance recorded

Commercial & industrial

Commercial real estate

Residential real estate

Total with related allowance

No related allowance recorded

Commercial & industrial

Commercial real estate

Residential real estate

Total with no related allowance

Total impaired loans

As of December 31, 2021

Investment(1)

Investment(1)(2)

Recognized(2)

Related allowance recorded

8 unchanged sentences

Recorded investment in impaired loans as of December 31, 2021 includes accrued interest receivable and deferred net loan costs of $ 33,077 .

For the year ended December 31, 2021.

As of June 30, 2021

Investment(1)

Investment(1)(2)

As of September 30, 2021

Investment(1)

Recognized(3)

Related allowance recorded

7 unchanged sentences

Total impaired loans

Recorded investment in impaired loans as of June 30, 2021 includes accrued interest receivable and deferred net loan costs of $ 37,535 .

For the three months ended June 30, 2021.

For the six months ended June 30, 2021.

Recorded investment in impaired loans as of September 30, 2021 includes accrued interest receivable and deferred net loan costs of $ 34,179 .

As of September 30, 2021

Three Months Ended

Nine Months Ended

Related allowance recorded

Residential real estate

Total with related allowance

No related allowance recorded

Commercial & industrial

Commercial real estate

Residential real estate

Total with no related allowance

Total impaired loans

For all loan segments, the accrual of interest is discontinued when a loan is specifically determined to be impaired or when the loan is delinquent 90 days and management believes, after considering collection efforts and other factors, that the borrower's financial condition is such that collection of interest is considered by management to be doubtful.

37 unchanged sentences

The risk ratings within the loan portfolio, by segment, as of the balance sheet dates were as follows:

As of June 30, 2022

As of September 30, 2022

$ 112,114,846

36 unchanged sentences

In total, throughout the pandemic, the Company granted short term loan concessions and/or modifications within the terms of this guidance to 595 borrowers.

Of those loans, 339 remained on the books with an aggregate principal balance of $ 93.7 million as of June 30, 2022.

None of these loans were in a deferral status as of June 30, 2022;

Of those loans, 322 remained on the books with an aggregate principal balance of $ 89.6 million as of September 30, 2022.

None of these loans were in a deferral status as of September 30, 2022;

however these loans may bear a higher risk of default in future periods.

New TDRs, by portfolio segment, during the periods presented were as follows, there were no new TDRs for the three months ended June 30, 2022 and 2021:

Six months ended June 30, 2022

There were no new TDRs for the three months ended September 30, 2022.

New TDRs, by portfolio segment, during the periods presented below were as follows:

Nine months ended September 30, 2022

Residential real estate - 1st lien

3 unchanged sentences

Residential real estate – 1st lien

Six months ended June 30, 2021

Three months ended September 30, 2021

Nine months ended September 30, 2021

Commercial & industrial

Commercial real estate

The TDRs for which there was a payment default during the twelve month periods presented below were as follows:

For the twelve months ended June 30, 2022

For the twelve months ended September 30, 2022

Commercial real estate

2 unchanged sentences

Commercial real estate

For the twelve months ended June 30, 2021

For the twelve months ended September 30, 2021

Commercial & industrial

3 unchanged sentences

The specific allowances within the ALL related to TDRs as of the balance sheet dates are presented in the table below.

September 30,

Specific Allocation

49 unchanged sentences

There were no Level 3 assets or liabilities measured on a recurring basis as of the balance sheet dates presented, nor were there any transfers of assets between Levels during either 2022 or 2021.

September 30,

(market approach)

14 unchanged sentences

There were no Level 1 or Level 3 assets or liabilities measured on a non-recurring basis as of the balance sheet dates presented, nor were there any transfers of assets between levels during either 2022 or 2021.

September 30,

(market approach)

12 unchanged sentences

The estimated fair values of the Company's financial instruments as of the balance sheet dates were as follows:

June 30, 2022

September 30, 2022

(Dollars in Thousands)

45 unchanged sentences

The following table shows the changes in the carrying amount of the MSRs, included in other assets in the consolidated balance sheets, for the periods indicated:

Six Months Ended

June 30, 2022

Nine Months Ended

September 30, 2022

December 31, 2021

9 unchanged sentences

The Company has evaluated events and transactions through the date that the financial statements were issued for potential recognition or disclosure in these financial statements, as required by GAAP.

On June 15, 2022, the Company’s Board declared a cash dividend of $ 0.23 per common share, payable August 1, 2022 to shareholders of record as of July 15, 2022.

On September 7, 2022, the Company’s Board declared a cash dividend of $ 0.23 per common share, payable November 1, 2022 to shareholders of record as of October 15, 2022.

This dividend has been recorded in the Company’s consolidated financial statements as of the declaration date, including shares issuable under the DRIP.

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.

What changed 10-Q

Item 1. Financial Statements