What changed in this filing

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Item 1. Financial Statements

2020-11-06 compared with 2020-08-07 · 215 added, 186 removed, 1115 unchanged (26% of the section changed)

4 unchanged sentences

(In thousands, except share and per share amounts)

September 30,

Cash and due from banks

42 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Interest income:

20 unchanged sentences

Service charges and other fees

Net securities gains (losses)

Net securities gains

Loss on termination of swaps

Change in fair value of loans held for sale

10 unchanged sentences

FDIC assessments

Merger expenses

Amortization of other intangible assets

10 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Other comprehensive income (loss):

Change in unrealized net gains on securities available for sale, net of reclassifications and deferred income taxes

Change in unrealized net (losses) gains on securities available for sale, net of reclassifications and deferred income taxes

Adjustment to pension liability, net of reclassifications and deferred income taxes

Unrealized losses on cash flow hedges, net of reclassifications and deferred income taxes

Unrealized gains (losses) on cash flow hedges, net of reclassifications and deferred income taxes

Total other comprehensive income (loss)

5 unchanged sentences

( In thousands, except per share amounts )

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Accumulated Other

Comprehensive

Balance at March 31, 2020

Balance at June 30, 2020

Shares issued under the dividend reinvestment plan ( 11,423 shares)

Shares issued under the Employee Stock Purchase Plan ( 5,888 shares)

Stock awards granted and distributed

Stock awards granted and distributed ( 5,000 shares)

Stock awards forfeited ( 600 shares)

3 unchanged sentences

Other comprehensive income, net of deferred income taxes

Balance at June 30, 2020

Three Months Ended June 30, 2019

Balance at September 30, 2020

Three Months Ended September 30, 2019

Accumulated Other

Comprehensive

Balance at March 31, 2019

Balance at June 30, 2019

Shares issued under the dividend reinvestment plan ( 6,442 shares)

Shares issued under the Employee Stock Purchase Plan ( 4,355 shares)

Purchase of treasury stock ( 11,200 shares)

5 unchanged sentences

Other comprehensive income, net of deferred income taxes

Balance at June 30, 2019

Six Months Ended June 30, 2020

Balance at September 30, 2019

Nine Months Ended September 30, 2020

Accumulated Other

12 unchanged sentences

Other comprehensive loss, net of deferred income taxes

Balance at June 30, 2020

Six Months Ended June 30, 2019

Balance at September 30, 2020

Nine Months Ended September 30, 2019

Accumulated Other

2 unchanged sentences

Shares issued under the dividend reinvestment plan ( 18,347 shares)

Shares issued under the Employee Stock Purchase Plan ( 4,355 shares)

Purchase of treasury stock ( 22,600 shares)

5 unchanged sentences

Other comprehensive income, net of deferred income taxes

Balance at June 30, 2019

Balance at September 30, 2019

See accompanying condensed notes to the Unaudited Consolidated Financial Statements .

3 unchanged sentences

( In thousands )

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

7 unchanged sentences

Share based compensation expense

Net securities losses (gains)

Net securities gains

Loss on termination of swaps

Change in fair value of loans held for sale

19 unchanged sentences

Net increase (decrease) in deposits

Net decrease in FHLB advances

Net (decrease) increase in FHLB advances

Net increase in repurchase agreements

30 unchanged sentences

Actual future results could differ significantly from those estimates.

The annualized results of operations for the six months ended June 30, 2020 are not necessarily indicative of the results of operations that may be expected for the entire fiscal year.

The annualized results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the results of operations that may be expected for the entire fiscal year.

Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

12 unchanged sentences

● demand for the Company’s products and services may decline, making it difficult to grow assets and income;

● if the economy is unable to substantially reopen, and high levels of unemployment continue, for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income;

● if the economy is unable to substantially reopen or remain open, and high levels of unemployment continue, for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income;

● collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase;

26 unchanged sentences

The two-class method for calculating basic EPS excludes dividends paid to participating securities and any undistributed earnings attributable to participating securities.

The following table presents the computation of EPS for the three and six months ended June 30, 2020 and 2019:

The following table presents the computation of EPS for the three and nine months ended September 30, 2020 and 2019:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands, except per share data)

10 unchanged sentences

Diluted earnings per common share

There were 180,020 stock options outstanding at June 30, 2020 that were not included in the computation of diluted earnings per share for the three and six months ended June 30, 2020 because the options' exercise prices were greater than the average market price of common stock and were, therefore, antidilutive.

There were 110,660 stock options outstanding at June 30, 2019 that were not included in the computation of diluted earnings per share for the three and six months ended June 30, 2019 because the options' exercise prices were greater than the average market price of common stock and were, therefore, antidilutive.

There were 46,010 and 32,865 RSUs that were antidilutive for the three months ended June 30, 2020 and 2019, respectively.

There were 46,010 and 22,472 RSUs that were antidilutive for the six months ended June 30, 2020 and 2019, respectively.

There were 180,020 stock options outstanding at September 30, 2020 that were not included in the computation of diluted earnings per share for the three and nine months ended September 30, 2020 because the options' exercise prices were greater than the average market price of common stock and were, therefore, antidilutive.

There were 110,660 stock options outstanding at September 30, 2019 that were not included in the computation of diluted earnings per share for the three and nine months ended September 30, 2019 because the options' exercise prices were greater than the average market price of common stock and were, therefore, antidilutive.

There were 46,625 and zero RSUs that were antidilutive for the three months ended September 30, 2020 and 2019, respectively.

There were 46,625 and 9,190 RSUs that were antidilutive for the nine months ended September 30, 2020 and 2019, respectively.

STOCK-BASED COMPENSATION PLANS

9 unchanged sentences

available for stock-based awards under the 2019 Equity Incentive Plan is 370,000 plus 162,738 shares that were remaining under the 2012 Equity Incentive Plan.

At June 30, 2020, 358,588 shares remain available for issuance, including shares that may be granted in the form of stock options, RSAs, or RSUs.

At September 30, 2020, 351,856 shares remain available for issuance, including shares that may be granted in the form of stock options, RSAs, or RSUs.

The Compensation Committee of the Board of Directors determines awards under the 2019 Equity Incentive Plan.

5 unchanged sentences

The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the market price of the Company's common stock as of the exercise or reporting date.

During the six months ended June 30, 2020 and 2019, in accordance with the Long Term Incentive Plan (“LTI Plan”) for Named Executive Officers (“NEOs”), the Company granted 69,360 and 63,267 stock options, respectively, with an exercise price set to equal a 10.0 % premium over the grant date stock price.

During the nine months ended September 30, 2020 and 2019, in accordance with the Long Term Incentive Plan (“LTI Plan”) for Named Executive Officers (“NEOs”), the Company granted 69,360 and 63,267 stock options, respectively, with an exercise price set to equal a 10.0 % premium over the grant date stock price.

All of the stock options granted vest ratably over three years .

The estimated weighted-average grant-date fair value of all stock options granted in the six months ended June 30, 2020 and 2019 was $ 4.10 and $ 5.05 per stock option, respectively, using the Black-Scholes option-pricing model with assumptions as follows:

Six Months Ended

The estimated weighted-average grant-date fair value of all stock options granted in the nine months ended September 30, 2020 and 2019 was $ 4.10 and $ 5.05 per stock option, respectively, using the Black-Scholes option-pricing model with assumptions as follows:

Nine Months Ended

September 30,

Dividend yield

2 unchanged sentences

Expected option life

Compensation expense attributable to stock options was $ 64 thousand and $ 142 thousand for the three and six months ended June 30, 2020, respectively.

Compensation expense attributable to stock options was $ 52 thousand and $ 91 thousand for the three and six months ended June 30, 2019, respectively As of June 30, 2020, there was $ 484 thousand of total unrecognized compensation cost related to unvested stock options.

Compensation expense attributable to stock options was $ 75 thousand and $ 217 thousand for the three and nine months ended September 30, 2020, respectively.

Compensation expense attributable to stock options was $ 53 thousand and $ 144 thousand for the three and nine months ended September 30, 2019, respectively.

As of September 30, 2020, there was $ 409 thousand of total unrecognized compensation cost related to unvested stock options.

The cost is expected to be recognized over a weighted-average period of 1.8 years.

The following table summarizes the status of the Company's stock options as of and for the six months ended June 30, 2020:

The following table summarizes the status of the Company's stock options as of and for the nine months ended September 30, 2020:

(Dollars in thousands, except per share amounts)

Outstanding, January 1, 2020

Outstanding, June 30, 2020

Vested and Exercisable, June 30, 2020

Outstanding, September 30, 2020

Vested and Exercisable, September 30, 2020

Restricted Stock Awards

5 unchanged sentences

The Company's performance-based RSAs vest subject to the achievement of the Company's corporate goals.

The following table summarizes the unvested RSA activity for the six months ended June 30, 2020:

The following table summarizes the unvested RSA activity for the nine months ended September 30, 2020:

Average Grant-Date

Unvested, January 1, 2020

Unvested, June 30, 2020

During the six months ended June 30, 2020, the Company granted a total of 86,428 RSAs.

Unvested, September 30, 2020

During the nine months ended September 30, 2020, the Company granted a total of 91,428 RSAs.

Of the 91,428 RSAs granted, 57,850 time-vested RSAs vest ratably over five years and 33,578 time-vested RSAs vest ratably over three years .

During the six months ended June 30, 2019, the Company granted a total of 77,952 RSAs.

During the nine months ended September 30, 2019, the Company granted a total of 78,952 RSAs.

Of the 78,952 RSAs granted, 49,925 time-vested RSAs vest ratably over five years , 29,027 time-vested RSAs vest ratably over three years .

As of June 30, 2020, there were 270,850 unvested RSAs, all of which were time-vested RSAs and there were no unvested performance-based RSAs.

Compensation expense attributable to RSAs was $ 596 thousand and $ 1.2 million for the three and six months ended June 30, 2020, respectively, and $ 527 thousand and $ 1.1 million for the three and six months ended June 30, 2019, respectively.

As of June 30, 2020, there was $ 6.0 million of total unrecognized compensation cost related to non-vested RSAs.

As of September 30, 2020, there were 272,274 unvested RSAs, all of which were time-vested RSAs and there were no unvested performance-based RSAs.

Compensation expense attributable to RSAs was $ 628 thousand and $ 1.8 million for the three and nine months ended September 30, 2020, respectively, and $ 537 thousand and $ 1.7 million for the three and nine months ended September 30, 2019, respectively.

As of September 30, 2020, there was $ 5.4 million of total unrecognized compensation cost related to non-vested RSAs.

The cost is expected to be recognized over a weighted-average period of 3.0 years.

4 unchanged sentences

RSUs do not provide voting rights and RSUs may provide dividend equivalent rights from the date of grant.

The following table summarizes the unvested NEO RSU activity for the six months ended June 30, 2020:

The following table summarizes the unvested NEO RSU activity for the nine months ended September 30, 2020:

Average Grant-Date

1 unchanged sentence

Reinvested dividends

Unvested, June 30, 2020

During the six months ended June 30, 2020, in accordance with the LTI Plan for NEOs, the Company granted 26,556 RSUs.

Unvested, September 30, 2020

During the nine months ended September 30, 2020, in accordance with the LTI Plan for NEOs, the Company granted 26,556 RSUs.

Of the 26,556 RSUs granted, 17,943 time-vested RSUs vest ratably over three years and 8,613 performance-based RSUs vest subject to the achievement of the Company's three-year corporate goal for the three-year period ending December 31, 2022.

Compensation expense attributable to LTI Plan RSUs was $ 222 thousand and $ 418 thousand for the three and six months ended June 30, 2020, respectively, and $ 173 thousand and $ 343 thousand for the three and six months ended June 30, 2019, respectively.

As of June 30, 2020, there was $ 1.8 million of total unrecognized compensation cost related to non-vested RSUs.

Compensation expense attributable to LTI Plan RSUs was $ 224 thousand and $ 642 thousand for the three and nine months ended September 30, 2020, respectively, and $ 175 thousand and $ 518 thousand for the three and nine months ended September 30, 2019, respectively.

As of September 30, 2020, there was $ 1.5 million of total unrecognized compensation cost related to non-vested RSUs.

The cost is expected to be recognized over a weighted-average period of 2.3 years.

4 unchanged sentences

These RSUs vest ratably over one year and have dividend rights but no voting rights.

In connection with the Directors Plan, the Company recorded expense of $ 100 thousand and $ 242 thousand for the three and six months ended June 30, 2020, respectively, and $ 142 thousand and $ 285 thousand for the three and six months ended June 30, 2019, respectively.

In connection with the Directors Plan, the Company recorded expense of $ 155 thousand and $ 397 thousand for the three and nine months ended September 30, 2020, respectively, and $ 142 thousand and $ 427 thousand for the three and nine months ended September 30, 2019, respectively.

Employee Stock Purchase Plan

3 unchanged sentences

The current offering period is from July 1, 2020 through December 31, 2020.

During the six months ended June 30, 2020, 5,888 shares of common stock were purchased, and no expense was recorded related to the ESPP.

During the nine months ended September 30, 2020, 5,888 shares of common stock were purchased, and no expense was recorded related to the ESPP.

During the nine months ended September 30, 2019, 4,355 shares of common stock were purchased, and no expense was recorded related to ESPP.

Debt securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity.

8 unchanged sentences

Accrued interest for a security placed on non-accrual is reversed against interest income.

There were no non-accrual debt securities at June 30, 2020 and there was no accrued interest related to debt securities reversed against interest income for the three and six months ended June 30, 2020.

There were no non-accrual debt securities at September 30, 2020 and there was no accrued interest related to debt securities reversed against interest income for the three and nine months ended September 30, 2020.

Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

23 unchanged sentences

Accrued interest receivable is excluded from the estimate of credit losses.

The following table summarizes the amortized cost and estimated fair value of the available for sale and held to maturity investment securities portfolio at June 30, 2020 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses, respectively:

June 30, 2020

The following table summarizes the amortized cost and estimated fair value of the available for sale and held to maturity investment securities portfolio at September 30, 2020 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses, respectively:

September 30, 2020

(In thousands)

Available for sale:

Treasury securities

State and municipal obligations

15 unchanged sentences

Total securities

As of June 30, 2020, none of the Company’s available for sale debt securities were in an unrealized loss position due to credit and therefore no allowance for credit losses on available for sale debt securities was required.

As of September 30, 2020, none of the Company’s available for sale debt securities were in an unrealized loss position due to credit and therefore no allowance for credit losses on available for sale debt securities was required.

Additionally, the calculated allowance for credit losses on held to maturity securities was inconsequential given the high quality composition of the Company’s held to maturity portfolio and therefore no allowance for credit losses was recorded.

Accrued interest receivable on securities totaling $ 1.9 million at June 30, 2020 was included in other assets in the consolidated balance sheet and excluded from the amortized cost and estimated fair value totals in the table above.

Accrued interest receivable on securities totaling $ 1.8 million at September 30, 2020 was included in other assets in the consolidated balance sheet and excluded from the amortized cost and estimated fair value totals in the table above.

The following table summarizes the amortized cost and estimated fair value of the available for sale and held to maturity investment securities portfolio at December 31, 2019 and the corresponding amounts of gross unrealized gains and losses therein:

20 unchanged sentences

Total securities

The following table summarizes available for sale debt securities with gross unrealized losses for which an allowance for credit losses has not been recorded at June 30, 2020, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position:

June 30, 2020

The following table summarizes available for sale debt securities with gross unrealized losses for which an allowance for credit losses has not been recorded at September 30, 2020, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position:

September 30, 2020

Less than 12 months

2 unchanged sentences

Available for sale:

Treasury securities

GSE securities

State and municipal obligations

1 unchanged sentence

GSE residential collateralized mortgage obligations

GSE commercial mortgage-backed securities

GSE commercial collateralized mortgage obligations

19 unchanged sentences

Held to maturity:

State and municipal obligations

GSE residential mortgage-backed securities

6 unchanged sentences

Consideration is given to (1) the extent to which the fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.

At June 30, 2020, substantially all of the securities in an unrealized loss position had a variable interest rate and the cause of the temporary impairment was directly related to changes in interest rates.

At September 30, 2020, substantially all of the securities in an unrealized loss position had a variable interest rate and the cause of the temporary impairment was directly related to changes in interest rates.

The Company generally views changes in fair value caused by changes in interest rates as temporary, which is consistent with its experience.

7 unchanged sentences

The fair value is expected to recover as the securities approach maturity.

Therefore, the Company does not consider these securities to be other-than-temporarily impaired at June 30, 2020.

Therefore, the Company does not consider these securities to be other-than-temporarily impaired at September 30, 2020.

Sales and Calls of Securities

There were no proceeds from sale of securities for the three months ended June 30, 2020.

There were $ 74.6 million of proceeds from sales of securities for the six months ended June 30, 2020 with gross gains of $ 0.8 million realized in 2020 and gross losses of $ 0.8 million realized in 2020.

There were $ 46.5 million proceeds from sales of securities with gross gain of $ 0.2 million realized for the three and six months ended June 30, 2019.

There were $ 6.9 million and $ 12.2 million of proceeds from calls of securities for the three and six months ended June 30, 2020, respectively.

There were $ 2.4 million and $ 10.3 million of proceeds from calls of securities for the three and six months ended June 30, 2019, respectively.

There were $ 78.4 million in proceeds from sales of securities with gross gains of $ 3.5 million and gross losses of $ 7 thousand realized for the three months ended September 30, 2020.

There were $ 153.0 million of proceeds from sales of securities with gross gains of $ 4.3 million realized and gross losses of $ 0.8 million realized for the nine months ended September 30, 2020.

There were no proceeds from sale of securities for the three ended September 30, 2019.

There were $ 46.5 million in proceeds from sales of securities with gross gain $ 0.2 million realized for the nine months ended September 30, 2019.

There were $ 1.3 million and $ 13.5 million of proceeds from calls of securities for the three and nine months ended September 30, 2020, respectively.

There were $ 10.0 million and $ 20.3 million of proceeds from calls of securities for the three and nine months ended September 30, 2019, respectively.

Pledged Securities

Securities having a fair value of $ 576.2 million and $ 402.2 million at June 30, 2020 and December 31, 2019, respectively, were pledged to secure public deposits and Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) overnight borrowings.

Securities having a fair value of $ 451.8 million and $ 402.2 million at September 30, 2020 and December 31, 2019, respectively, were pledged to secure public deposits and Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) overnight borrowings.

Trading Securities

The Company did not hold any trading securities during the six months ended June 30, 2020 or the year ended December 31, 2019.

The Company did not hold any trading securities during the nine months ended September 30, 2020 or the year ended December 31, 2019.

Restricted Securities

5 unchanged sentences

Both cash and stock dividends are reported as income.

The Bank owned $ 29.0 million and $ 32.9 million in FHLB, ACBB and FRB stock at June 30, 2020 and December 31, 2019, respectively.

The Bank owned $ 23.4 million and $ 32.9 million in FHLB, ACBB and FRB stock at September 30, 2020 and December 31, 2019, respectively.

These amounts were reported as restricted securities in the consolidated balance sheets.

As of June 30, 2020 and 2019, there was no issuer, other than the U.S.

As of September 30, 2020 and 2019, there was no issuer, other than the U.S.

Government and its sponsored entities, where the bank had invested holdings that exceeded 10% of consolidated stockholders’ equity.

The following table summarizes the amortized cost and estimated fair value by contractual maturity of the available for sale and held to maturity investment securities portfolio at June 30, 2020.

The following table summarizes the amortized cost and estimated fair value by contractual maturity of the available for sale and held to maturity investment securities portfolio at September 30, 2020.

Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

June 30, 2020

September 30, 2020

(In thousands)

20 unchanged sentences

The following tables summarize assets and liabilities measured at fair value on a recurring basis:

June 30, 2020

September 30, 2020

Fair Value Measurements Using:

3 unchanged sentences

Available for sale securities:

Treasury securities

State and municipal obligations

25 unchanged sentences

The following tables summarize assets measured at fair value on a non-recurring basis:

June 30, 2020

September 30, 2020

Fair Value Measurements Using:

2 unchanged sentences

Loans held for sale

Collateral dependent loans

Individually evaluated loans

December 31, 2019

4 unchanged sentences

Impaired loans

Loans held for sale at June 30, 2020 had a carrying amount of $ 10.0 million which is net of a $ 2.6 million valuation allowance.

Loans held for sale at September 30, 2020 had a carrying amount of $ 10.0 million which is net of a $ 2.6 million valuation allowance.

Loans held for sale at December 31, 2019 had a carrying amount of $ 12.6 million with no valuation allowance recorded.

Collateral dependent commercial and industrial loans with an allowance for credit losses at June 30, 2020 had a carrying amount of $ 4.9 million, which is made up of the outstanding balance of $ 12.3 million, net of a valuation allowance of $ 7.4 million.

This resulted in an additional provision for credit losses of $ 3.0 million that is included in the amount reported on the consolidated statements of income for the six months ended June 30, 2020.

Individually evaluated commercial and industrial loans with an allowance for credit losses at September 30, 2020 had a carrying amount of $ 7.0 million, which is made up of the outstanding balance of $ 14.0 million, net of a valuation allowance of $ 7.0 million.

This resulted in an additional provision for credit losses of $ 2.6 million that is included in the amount reported on the consolidated statements of income for the nine months ended September 30, 2020.

Impaired loans (prior to the adoption of CECL standard) with an allowance for credit losses at December 31, 2019 had a carrying amount of $ 7.0 million, which is made up of the outstanding balance of $ 11.7 million, net of a valuation allowance of $ 4.7 million.

There was no other real estate owned at June 30, 2020 and December 31, 2019.

There was no other real estate owned at September 30, 2020 and December 31, 2019.

The Company used the following methods and assumptions in estimating the fair value of its financial instruments:

10 unchanged sentences

These valuation methods result in a Level 3 classification.

Collateral Dependent Loans with an ACL (Impaired Loans with and ACL prior to the adoption of the CECL Standard) and Other Real Estate Owned:

Individually Evaluated Loans with an ACL (Impaired Loans with an ACL prior to the adoption of the CECL Standard) and Other Real Estate Owned:

For collateral dependent loans where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the loan to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date.

14 unchanged sentences

Adjustments made in the appraisal process are not deemed material to the overall consolidated financial statements given the level of collateral dependent loans measured at fair value on a non-recurring basis.

The following tables summarize the estimated fair values and recorded carrying amounts of the Company's financial instruments at June 30, 2020 and December 31, 2019:

June 30, 2020

For non-collateral dependent loans, estimated fair value may be based on the observable market price for the loan, if available, resulting in a Level 1 classification.

The following tables summarize the estimated fair values and recorded carrying amounts of the Company's financial instruments at September 30, 2020 and December 31, 2019:

September 30, 2020

Fair Value Measurements Using:

128 unchanged sentences

No credit loss estimate is reported for off-balance sheet credit exposures that are unconditionally cancellable by the Company.

At June 30, 2020, the reserve for off-balance sheet credit exposures was immaterial to the Company’s consolidated statements of financial condition and results of operations.

At September 30, 2020, the reserve for off-balance sheet credit exposures was immaterial to the Company’s consolidated statements of financial condition and results of operations.

The following table sets forth the major classifications of loans:

(In thousands)

June 30, 2020

September 30, 2020

December 31, 2019

10 unchanged sentences

Allowance for credit losses

Included in commercial, industrial and agricultural loans at June 30, 2020 was $ 949.7 million of Paycheck Protection Program (“PPP”) loans.

The shift from net deferred loan costs at December 31, 2019 to net deferred loan fees at June 30, 2020 was the result of the net deferred loan fees associated with the PPP loans.

Accrued interest receivable on loans totaling $ 13.5 million at June 30, 2020 and $ 8.7 million at December 31, 2019 was included in other assets in the consolidated balance sheet and excluded from the table above.

The increase in accrued interest receivable from December 31, 2019 relates to accrued interest on moratorium loans which are currently in their payment deferral period and accrued interest on PPP loans.

As of June 30, 2020 and December 31, 2019, one commercial real estate (“CRE”) mortgage loan totaling $ 10.0 million and $ 12.6 million, respectively, was classified as held for sale.

Included in commercial, industrial and agricultural loans at September 30, 2020 was $ 960.4 million of Paycheck Protection Program (“PPP”) loans.

The shift from net deferred loan costs at December 31, 2019 to net deferred loan fees at September 30, 2020 was the result of the net deferred loan fees associated with the PPP loans.

Accrued interest receivable on loans totaling $ 14.0 million at September 30, 2020 and $ 8.7 million at December 31, 2019 was included in other assets in the consolidated balance sheet and excluded from the table above.

The increase in accrued interest receivable from December 31, 2019 relates primarily to accrued interest on PPP loans.

As of September 30, 2020 and December 31, 2019, one commercial real estate (“CRE”) mortgage loan totaling $ 10.0 million and $ 12.6 million, respectively, was classified as held for sale.

The loan was reclassified from loans held for investment to loans held for sale and written down from $ 16.3 million to the loan’s estimated fair value of $ 12.6 million, as of June 30, 2019, through a $ 3.7 million charge-off during the 2019 second quarter.

42 unchanged sentences

Loans classified as watch are considered pass rated loans.

These loans carry additional risk factors above those of pass loans but do not have all the risk characteristics of loans classified special mention.

These loans carry additional risk factors above those of pass loans but do not have all the risk characteristics of loans classified as special mention.

Such risk factors require monitoring and if left uncorrected, could lead these loans to be downgraded.

5 unchanged sentences

Loans classified as doubtful have all the weaknesses inherent in a substandard loan, may also be in delinquency status and have defined weaknesses based on currently existing facts, conditions and values making collection or liquidation in full highly questionable and improbable.

The following tables represent loans categorized by internally assigned risk grades as of June 30, 2020 and December 31, 2019.

In the June 30, 2020 table, the years noted represent the year of origination for non-revolving loans.

June 30, 2020

The following tables represent loans categorized by internally assigned risk grades as of September 30, 2020 and December 31, 2019.

In the September 30, 2020 table, the years noted represent the year of origination for non-revolving loans.

September 30, 2020

(In thousands)

33 unchanged sentences

Past Due and Non-accrual Loans

The following tables represents the aging of past due loans as of June 30, 2020 and December 31, 2019:

June 30, 2020

The following tables represents the aging of past due loans as of September 30, 2020 and December 31, 2019:

September 30, 2020

(In thousands)

7 unchanged sentences

In the absence of other intervening factors, loans granted payment deferrals related to COVID-19 are not reported as past due or placed on non-accrual status provided the borrowers have met the criteria in the CARES Act or otherwise have met the criteria included in an interagency statement issued by bank regulatory agencies.

During the six months ended June 30, 2020, there was no interest earned on non-accrual loans and $ 85 thousand in accrued interest on non-accrual loans was reversed through interest income.

During the nine months ended September 30, 2020, there was no interest earned on non-accrual loans and $ 151 thousand in accrued interest on non-accrual loans was reversed through interest income.

December 31, 2019

7 unchanged sentences

Installment/consumer loans

There was no other real estate owned at June 30, 2020 and December 31, 2019.

There was no other real estate owned at September 30, 2020 and December 31, 2019.

Troubled Debt Restructurings

8 unchanged sentences

The following table presents loans modified as TDRs during the periods indicated:

Modifications During the Three Months Ended June 30,

Modifications During the Three Months Ended September 30,

(Dollars in thousands)

5 unchanged sentences

Installment/consumer loans

Modifications During the Six Months Ended June 30,

Modifications During the Nine Months Ended September 30,

(Dollars in thousands)

5 unchanged sentences

Installment/consumer loans

During the six months ended June 30, 2020, there was one charge-off totaling $ 243 thousand relating to TDRs and there was one loan modified as a TDR for which there was a payment default within twelve months following the modification.

During the six months ended June 30, 2019, there were three charge-offs totaling $ 84 thousand relating to TDRs and there were two loans modified as a TDR for which there was a payment default within twelve months following the modification.

During the nine months ended September 30, 2020, there were four charge-offs totaling $ 1.7 million relating to TDRs and there was one loan modified as a TDR for which there was a payment default within twelve months following the modification.

During the nine months ended September 30, 2019, there were three charge-offs totaling $ 84 thousand relating to TDRs and there were three loans modified as a TDR for which there was a payment default within twelve months following the modification.

A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

As of June 30, 2020 and December 31, 2019, the Company had $ 3.1 million and $ 405 thousand, respectively, of non-accrual TDRs and $ 23.9 million and $ 26.3 million, respectively, of performing TDRs.

The increase in non-accrual TDRs and decrease in performing TDRs is primarily due to one TDR relationship totaling $ 2.7 million at June 30, 2020 becoming non-accrual during the 2020 second quarter.

The loans in that relationship are secured by inventory.

At June 30, 2020, the remaining non-accrual TDRs were unsecured and at December 31, 2019, the non-accrual TDRs were unsecured.

As of September 30, 2020 and December 31, 2019, the Company had $ 581 thousand and $ 405 thousand, respectively, of non-accrual TDRs and $ 23.4 million and $ 26.3 million, respectively, of performing TDRs.

The decrease in performing TDRs is primarily due to one TDR relationship which became non-accrual during the 2020 second quarter and totaled $ 2.7 million at June 30, 2020.

In the 2020 third quarter, a settlement agreement was entered into resulting in $ 875 thousand in payments received to date and a charge-off totaling $ 1.3 million.

The remaining loan balance is included in non-accrual TDRs and is secured by inventory.

At September 30, 2020, the remaining non-accrual TDRs were unsecured and at December 31, 2019, the non-accrual TDRs were unsecured.

The Bank has no commitment to lend additional funds to these debtors.

The terms of certain other loans were modified during the six months ended June 30, 2020 that did not meet the definition of a TDR.

These loans have a total recorded investment at June 30, 2020 of $ 57.4 million.

The terms of certain other loans were modified during the nine months ended September 30, 2020 that did not meet the definition of a TDR.

These loans have a total recorded investment at September 30, 2020 of $ 122.3 million.

These loans were to borrowers who were not experiencing financial difficulties.

In connection with the COVID-19 relief provided by the CARES Act, the Company is supporting its customers who may experience financial difficulty due to COVID-19 through loan moratoriums and forbearance programs.

The Company began offering 90-day payment modifications on a case-by-case basis to those customers whose income was adversely impacted by COVID-19.

In connection with the COVID-19 relief provided by the CARES Act and interagency guidance issued in March 2020, the Company is supporting its customers who may experience financial difficulty due to COVID-19 through loan moratoriums and forbearance programs.

The Company began offering 90-day payment modifications on a case-by-case basis to those

customers whose income was adversely impacted by COVID-19.

The loan modifications in this program primarily consist of three-month deferrals of interest and principal payments.

As of June 30, 2020, approximately 500 loans totaling $ 625 million were granted payment moratoriums.

T hese deferrals are not considered TDRs based on interagency guidance issued in March 2020.

20, 2020, approximately $ 400 million of these loans have reached the end of their three month deferral period.

Of these loans, 54 % have returned to making their agreed on payments, 36 % have requested an extension and 10 % are pending.

As of September 30, 2020, approximately 490 loans totaling $ 615 million were granted payment moratoriums.

T hese deferrals are not considered TDRs based on the CARES Act and/or the interagency guidance.

As of October 25, 2020, approximately $ 610 million of these loans have reached the end of their three month deferral period.

Of these loans, 66 % returned to making their agreed on payments and 34 % have requested an extension.

Extensions are being granted on a case-by-case basis.

Approximately $ 44 million in commercial loan payment deferrals were outstanding as of October 25, 2020.

Collateral Dependent Loans

At June 30, 2020, the Company had collateral dependent commercial, industrial and agricultural loans which were individually evaluated to determine expected credit losses.

These loans totaled $ 12.3 million and had a related allowance for credit losses totaling $ 7.4 million at June 30, 2020.

At September 30, 2020, the Company had collateral dependent loans which were individually evaluated to determine expected credit losses.

Collateral dependent commercial, industrial and agricultural totaled $ 10.1 million and had a related allowance for credit losses totaling $ 6.6 million.

The loans were secured by inventory and other assets.

Collateral dependent commercial real estate loans totaled $ 1.4 million and had no related allowance for credit losses.

Impaired Loans (prior to the adoption of the CECL Standard)

10 unchanged sentences

The following table sets forth the recorded investment, unpaid principal balance and related allowance for individually impaired loans at December 31, 2019.

The table also sets forth the average recorded investment of individually impaired loans and interest income recognized while the loans were impaired during the period ended June 30, 2019:

The table also sets forth the average recorded investment of individually impaired loans and interest income recognized while the loans were impaired during the period ended September 30, 2019:

Three Months Ended

Six Months Ended

Nine Months Ended

December 31, 2019

June 30, 2019

September 30, 2019

(In thousands)

21 unchanged sentences

Commercial, industrial and agricultural:

The following tables represent the changes in the allowance for credit losses for the three and six months ended June 30, 2020 and 2019.

Three Months Ended June 30, 2020

The following tables represent the changes in the allowance for credit losses for the three and nine months ended September 30, 2020 and 2019.

Three Months Ended September 30, 2020

Industrial and

5 unchanged sentences

Ending balance

Three Months Ended June 30, 2019

Three Months Ended September 30, 2019

Industrial and

5 unchanged sentences

Ending balance

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Industrial and

6 unchanged sentences

Ending balance

Six Months Ended June 30, 2019

Nine Months Ended September 30, 2019

Industrial and

5 unchanged sentences

Ending balance

The increase in the second quarter 2020 allowance for credit losses is primarily related to the reasonable and supportable forecast component of the newly adopted CECL standard which includes the impact of COVID-19, coupled with an increase in the specific reserves and reserves on PPP loans, partially offset by decreases in the outstanding balances of C&I lines of credit and changes in other qualitative factors resulting from changes in the loan portfolio.

We believe, based on all of the evidence gathered to date, that COVID-19 has had a more profound impact on economic activity in the first half of 2020 than anticipated during the first quarter analysis and will continue to have a material impact on economic conditions in 2020.

Evidence also suggests that the recovery may be more gradual than previously expected.

The allowance for credit losses at September 30, 2020 was consistent with the prior quarter primarily as a result of there being no change to the reasonable and supportable forecast component of the analysis.

COVID-19 continues to have a profound impact on economic activity.

While there have been some signs of economic improvement during the third quarter, significant uncertainty remains.

Management still believes that the economic recovery will accelerate during 2021 and 2022, however, based on the aforementioned uncertainty and negative impact the virus has had to date, the decision was made to maintain the current risk level for the reasonable and supportable forecast component of the allowance for credit losses in the third quarter.

The following table represents the balance in the allowance for loan losses and the recorded investment in loans, as defined under FASB ASC 310-10 (prior to adoption of the CECL Standard), and based on impairment method as of December 31, 2019.

20 unchanged sentences

As a result, the assets of the rabbi trust are reflected on the Company’s consolidated balance sheets.

There were $ 1.2 million of contributions to the Pension Plan during the six months ended June 30, 2020.

There were no contributions to the Pension Plan during the six months ended June 30, 2019.

There were no contributions to the SERP during the six months ended June 30, 2020 and 2019, respectively.

In accordance with the SERP, a retired executive received a distribution totaling $ 56 thousand during each of the six months ended June 30, 2020 and 2019, respectively.

There were $ 1.2 million of contributions to the Pension Plan during the nine months ended September 30, 2020.

There were no contributions to the Pension Plan during the nine months ended September 30, 2019.

There were no contributions to the SERP during the nine months ended September 30, 2020 and 2019, respectively.

In accordance with the SERP, a retired executive received a distribution totaling $ 84 thousand during each of the nine months ended September 30, 2020 and 2019, respectively.

The Company's funding policy with respect to its benefit plans is to contribute at least the minimum amounts required by applicable laws and regulations.

The following table presents the components of net periodic benefit (credit) cost:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Pension Benefits

10 unchanged sentences

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities sold under agreements to repurchase totaled $ 1.7 million at June 30, 2020 and $ 1.0 million at December 31, 2019.

Securities sold under agreements to repurchase totaled $ 1.4 million at September 30, 2020 and $ 1.0 million at December 31, 2019.

The repurchase agreements were collateralized by investment securities, of which 37 % were U.S.

GSE residential collateralized mortgage obligations and 63 % were U.S.

GSE residential mortgage-backed securities with a carrying amount of $ 2.7 million at June 30, 2020 and 17 % were U.S.

GSE residential mortgage-backed securities with a carrying amount of $ 2.4 million at September 30, 2020 and 17 % were U.S.

GSE residential collateralized mortgage obligations and 83 % were U.S.

GSE residential mortgage-backed securities with a carrying amount of $ 2.1 million at December 31, 2019.

Securities sold under agreements to repurchase are financing arrangements with $ 1.7 million maturing during the third quarter of 2020.

Securities sold under agreements to repurchase are financing arrangements with $ 1.4 million maturing during the fourth quarter of 2020.

At maturity, the securities underlying the agreements are returned to the Company.

1 unchanged sentence

The excess collateral pledged represents an unsecured exposure to the lending counterparty.

As the market value of the collateral changes, both through changes in discount rates and spreads as well as related cash flows, additional collateral may need to be pledged.

As the market value of the collateral changes, both through changes in discount rates and spreads as well as related cash flows,

additional collateral may need to be pledged.

In accordance with the Company's policies, eligible counterparties are defined and monitored to minimize exposure.

2 unchanged sentences

There are no FHLB advances with contractual maturities after 2020.

June 30, 2020

September 30, 2020

(Dollars in thousands)

6 unchanged sentences

Each advance is payable at its maturity date, with a prepayment penalty for fixed rate advances.

The advances were collateralized by $ 1.4 billion of residential and commercial mortgage loans under a blanket lien arrangement at June 30, 2020 and December 31, 2019.

Based on this collateral and the Company's holdings of FHLB stock, the Company is eligible to borrow up to a total of $ 1.8 billion at June 30, 2020.

The advances were collateralized by $ 1.6 billion and $ 1.4 billion of residential and commercial mortgage loans under a blanket lien arrangement at September 30, 2020 and December 31, 2019.

Based on this collateral and the Company's holdings of FHLB stock, the Company is eligible to borrow up to a total of $ 1.9 billion at September 30, 2020.

SUBORDINATED DEBENTURES

4 unchanged sentences

From and including September 30, 2025 to the maturity date or early redemption date, the interest rate will reset quarterly to an annual interest rate equal to the then-current three-month LIBOR plus 345 basis points.

The subordinated debentures totaled $ 79.0 million at June 30, 2020 and $ 78.9 million at December 31, 2019.

The subordinated debentures totaled $ 79.0 million at September 30, 2020 and $ 78.9 million at December 31, 2019.

The subordinated debentures are included in tier 2 capital (with certain limitations applicable) under current regulatory guidelines and interpretations.

14 unchanged sentences

The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.

Interest rate swaps with notional amounts totaling $ 405.0 million and $ 290.0 million at June 30, 2020 and December 31, 2019, respectively, were designated as cash flow hedges of certain FHLB advances.

Interest rate swaps with notional amounts totaling $ 280.0 million and $ 290.0 million at September 30, 2020 and December 31, 2019, respectively, were designated as cash flow hedges of certain FHLB advances.

The swaps were determined to be fully effective during the periods presented.

2 unchanged sentences

The Company expects the hedges to remain fully effective during the remaining term of the swaps.

The following table summarizes information about the interest rate swaps designated as cash flow hedges at June 30, 2020 and December 31, 2019:

The following table summarizes information about the interest rate swaps designated as cash flow hedges at September 30, 2020 and December 31, 2019:

(Dollars in thousands)

June 30, 2020

September 30, 2020

December 31, 2019

3 unchanged sentences

Weighted average maturity

Interest expense recorded on these swap transactions totaled $ 176 thousand and $ 66 thousand for the three and six months ended June 30, 2020, and interest income recorded on these swap transactions totaled $ 466 thousand and $ 1.0 million for the three and six months ended June 30, 2019, which is reported as a component of interest expense on FHLB advances.

Four interest rate swaps, with notional amounts totaling $ 125.0 million, were terminated resulting in $ 3.4 million in loss on termination of swaps, which is reported as a component of non-interest income, for the three and nine months ended September 30, 2020.

Interest expense recorded on these swap transactions totaled $ 4.3 million and $ 4.4 million for the three and nine months ended September 30, 2020, and interest income recorded on these swap transactions totaled $ 331 thousand and $ 1.4 million for the three and nine months ended September 30, 2019, which is reported as a component of interest expense on FHLB advances.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest income/expense as interest payments are made/received on the Company's variable-rate assets/liabilities.

During the six months ended June 30, 2020, the Company had $ 176 thousand of reclassifications as an increase to interest expense.

During the nine months ended September 30, 2020, the Company had $ 4.4 million of reclassifications as an increase to interest expense.

During the next twelve months, the Company estimates that an additional $ 2.2 million will be reclassified as an increase to interest expense.

The following table presents the net gains (losses) recorded in accumulated other comprehensive income and the consolidated statements of income relating to the cash flow derivative instruments for the three and six months ended June 30, 2020 and 2019:

During the quarter ended September 30, 2020, the Company accelerated the reclassification of $ 3.3 million loss from other comprehensive income to earnings as a result of the hedged forecasted transactions becoming probable not to occur.

Amount of gain (loss)

14 unchanged sentences

excluded component

Three months ended June 30, 2020

Six months ended June 30, 2020

Three months ended June 30, 2019

Six months ended June 30, 2019

Three months ended September 30, 2020

Nine months ended September 30, 2020

Three months ended September 30, 2019

Nine months ended September 30, 2019

The following table reflects the cash flow hedges included in the consolidated balance sheets at the dates indicated:

June 30, 2020

September 30, 2020

December 31, 2019

8 unchanged sentences

These interest-rate swap agreements do not qualify for hedge accounting treatment, and therefore changes in fair value are reported in current period earnings.

Interest rate swaps with notional amounts totaled $ 1.0 billion at June 30, 2020.

Interest rate swaps with notional amounts totaled $ 1.1 billion at September 30, 2020.

Of the $ 1.1 billion notional amounts, $ 530.5 million were from loan customers and $ 530.5 million were from bank counterparties.

1 unchanged sentence

Of the $ 823.9 million notional amounts, $ 411.9 million were from loan customers and $ 411.9 million were from bank counterparties.

The following table presents summary information about the interest rate swaps at June 30, 2020 and December 31, 2019:

The following table presents summary information about the interest rate swaps at September 30, 2020 and December 31, 2019:

(Dollars in thousands)

June 30, 2020

September 30, 2020

December 31, 2019

4 unchanged sentences

Fair value of combined interest rate swaps

Loan swap fees recorded on these swap transactions, which is reported as a component of non-interest income, totaled $ 1.3 million and $ 2.6 million for the three and six months ended June 30, 2020 and $ 0.5 million and $ 1.6 million for the three and six months ended June 30, 2019.

Loan swap fees recorded on these swap transactions, which is reported as a component of non-interest income, totaled $ 0.6 million and $ 3.1 million for the three and nine months ended September 30, 2020 and $ 1.6 million and $ 3.2 million for the three and nine months ended September 30, 2019.

Credit-Risk-Related Contingent Features

As of June 30, 2020, the termination value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $ 75.8 million, while there were no derivatives in a net asset position.

The Company has minimum collateral posting thresholds with certain of its derivative

counterparties.

As of September 30, 2020, the termination value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $ 68.0 million, while there were no derivatives in a net asset position.

The Company has minimum collateral posting thresholds with certain of its derivative counterparties.

If the termination value of derivatives is a net liability position, the Company is required to post collateral against its obligations under the agreements.

However, if the termination value of derivatives is a net asset position, the counterparty is required to post collateral to the Company.

At June 30, 2020, the Company posted collateral of $ 76.4 million to its counterparties under the agreements in a net liability position and received no collateral from its counterparties under the agreements in a net asset position.

If the Company had breached any of these provisions at June 30, 2020, it could have been required to settle its obligations under the agreements at the termination value.

At September 30, 2020, the Company posted collateral of $ 69.1 million to its counterparties under the agreements in a net liability position and received no collateral from its counterparties under the agreements in a net asset position.

If the Company had breached any of these provisions at September 30, 2020, it could have been required to settle its obligations under the agreements at the termination value.

The Company has operating leases for certain branch locations, corporate offices and equipment.

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(In thousands)

June 30, 2020

June 30, 2019

June 30, 2020

June 30, 2019

September 30, 2020

September 30, 2019

September 30, 2020

September 30, 2019

Operating lease cost

5 unchanged sentences

Supplemental cash flow and balance sheet information related to operating leases were as follows:

Six Months Ended

Nine Months Ended

(Dollars in thousands)

June 30, 2020

June 30, 2019

September 30, 2020

September 30, 2019

Cash paid for amounts included in the measurement of lease liabilities

1 unchanged sentence

Operating right-of-use assets obtained in exchange for lease liabilities

June 30, 2020

September 30, 2020

December 31, 2019

6 unchanged sentences

(In thousands)

June 30, 2020

September 30, 2020

December 31, 2019

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

Unrealized holding gains on available for sale securities

Reclassification adjustments for (gains) losses realized in income

Unrealized holding (losses) gains on available for sale securities

Reclassification adjustments for gains realized in income

Income tax effect

Net change in unrealized gains on available for sale securities

Net change in unrealized (losses) gains on available for sale securities

Reclassification adjustments for amortization realized in income

4 unchanged sentences

Income tax effect

Net change in unrealized losses on cash flow hedges

Net change in unrealized gains (losses) on cash flow hedges

Other comprehensive income (loss)

1 unchanged sentence

Comprehensive

September 30,

(In thousands)

3 unchanged sentences

Accumulated other comprehensive loss, net of income taxes

The following represents the reclassifications out of accumulated other comprehensive (loss) income for the three and six months ended June 30, 2020 and 2019:

The following represents the reclassifications out of accumulated other comprehensive (loss) income for the three and nine months ended September 30, 2020 and 2019:

Three Months Ended

Six Months Ended

Nine Months Ended

Affected Line Item

September 30,

in the Consolidated

1 unchanged sentence

Statements of Income

Realized gains (losses) on sale of available for sale securities

Net securities gains (losses)

Realized gains on sale of available for sale securities

Net securities gains

Amortization of defined benefit pension plan and defined benefit plan component of the SERP:

5 unchanged sentences

Interest expense

Realized loss on the termination of swaps

Loss on termination of swaps

Total reclassifications, before income tax

Income tax expense (benefit)

Income tax benefit (expense)

Income tax expense

24 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.

What changed 10-Q

Item 1. Financial Statements