What changed in this filing

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Item 1. Financial Statements

2022-11-07 compared with 2022-08-05 · 168 added, 179 removed, 972 unchanged (26% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

($ in thousands) June 30,

($ in thousands) September 30,

2022 (unaudited) December 31,

21 unchanged sentences

Interest-bearing checking accounts 5,481,064 5,776,007

Money market accounts 2,572,118 2,562,283

Savings accounts 747,272 708,054

Time deposits of $100,000 or more 521,853 613,414

Other time deposits 281,293 299,025

Total deposits 9,229,271 9,124,629

9 unchanged sentences

Issued & outstanding:

none as of June 30, 2022 and December 31, 2021

none as of September 30, 2022 and December 31, 2021

Common stock, no par value per share.

1 unchanged sentence

Issued & outstanding:

35,683,595 shares and 35,629,177 shares as of June 30, 2022 and December 31, 2021, respectively

35,711,754 shares and 35,629,177 shares as of September 30, 2022 and December 31, 2021, respectively

724,694 722,671

8 unchanged sentences

Consolidated Statements of Income

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

($ in thousands, except share data - unaudited) 2022 2021 2022 2021

7 unchanged sentences

INTEREST EXPENSE

Savings, checking and money market accounts 1,047 1,136 2,232 2,450

Time deposits of $100,000 or more 378 681 808 1,539

Other time deposits 160 182 316 398

Borrowings 592 381 1,052 764

Interest on deposits 1,848 1,626 5,204 6,013

Interest on borrowings 1,108 375 2,160 1,139

Total interest expense 2,956 2,001 7,364 7,152

Net interest income 85,334 58,553 240,482 172,550

Provision for credit losses — — 3,500 —

Provision for (reversal of) credit losses 5,100 ( 1,400 ) 8,600 ( 1,400 )

Provision for (reversal of) unfunded commitments 300 1,049 ( 1,200 ) 2,988

19 unchanged sentences

Intangibles amortization expense 889 695 2,859 2,437

Foreclosed property gains, net ( 292 ) ( 173 ) ( 372 ) ( 16 )

Foreclosed property losses (gains), net — 23 ( 372 ) 7

Other operating expenses 13,844 11,004 40,423 32,271

14 unchanged sentences

Three Months Ended

June 30, Six Months Ended June 30,

September 30, Nine Months Ended September 30,

($ in thousands - unaudited) 2022 2021 2022 2021

2 unchanged sentences

Unrealized (losses) gains on securities available for sale:

Unrealized holding (losses) gains arising during the period, pretax ( 109,623 ) 4,326 ( 291,418 ) ( 19,909 )

Unrealized (losses) gains arising during the period ( 141,155 ) 3,673 ( 432,573 ) ( 16,236 )

Tax benefit (expense) 32,437 ( 844 ) 99,405 3,731

1 unchanged sentence

Amortization of unrecognized net actuarial loss 44 109 132 485

Tax benefit ( 10 ) ( 77 ) ( 20 ) ( 117 )

Tax (expense) benefit ( 10 ) 5 ( 30 ) ( 112 )

Other comprehensive (loss) income ( 108,684 ) 2,943 ( 333,066 ) ( 12,132 )

10 unchanged sentences

Shares Amount

Three Months Ended June 30, 2021

Balances, April 1, 2021 28,489 $ 397,094 483,944 ( 2,256 ) 2,256 ( 4,185 ) 876,853

Three Months Ended September 30, 2021

Balances, July 1, 2021 28,492 $ 397,704 507,531 ( 1,928 ) 1,928 ( 725 ) 904,510

Net income 27,643 27,643

5 unchanged sentences

Other comprehensive income 2,943 2,943

Balances, June 30, 2021 28,492 $ 397,704 507,531 ( 1,928 ) 1,928 ( 725 ) 904,510

Three Months Ended June 30, 2022

Balances, April 1, 2022 35,640 $ 723,441 559,004 ( 1,814 ) 1,814 ( 164,955 ) 1,117,490

Balances, September 30, 2021 28,524 $ 398,058 529,474 ( 1,791 ) 1,791 2,218 929,750

Three Months Ended September 30, 2022

Balances, July 1, 2022 35,684 $ 723,956 587,739 ( 1,573 ) 1,573 ( 249,352 ) 1,062,343

Net income 37,949 37,949

5 unchanged sentences

Other comprehensive loss ( 108,684 ) ( 108,684 )

Balances, June 30, 2022 35,684 $ 723,956 587,739 ( 1,573 ) 1,573 ( 249,352 ) 1,062,343

Balances, September 30, 2022 35,712 $ 724,694 617,839 ( 1,585 ) 1,585 ( 358,036 ) 984,497

See accompanying notes to unaudited consolidated financial statements.

8 unchanged sentences

Shares Amount

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Balances, January 1, 2021 28,579 $ 400,582 478,489 ( 2,243 ) 2,243 14,350 893,421

8 unchanged sentences

Other comprehensive loss ( 12,132 ) ( 12,132 )

Balances, June 30, 2021 28,492 $ 397,704 507,531 ( 1,928 ) 1,928 ( 725 ) 904,510

Six Months Ended June 30, 2022

Balances, September 30, 2021 28,524 $ 398,058 529,474 ( 1,791 ) 1,791 2,218 929,750

Nine Months Ended September 30, 2022

Balances, January 1, 2022 35,629 722,671 532,874 ( 1,803 ) 1,803 ( 24,970 ) 1,230,575

6 unchanged sentences

Other comprehensive loss ( 333,066 ) ( 333,066 )

Balances, June 30, 2022 35,684 $ 723,956 587,739 ( 1,573 ) 1,573 ( 249,352 ) 1,062,343

Balances, September 30, 2022 35,712 $ 724,694 617,839 ( 1,585 ) 1,585 ( 358,036 ) 984,497

See accompanying notes to unaudited consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30,

($ in thousands-unaudited) 2022 2021

8 unchanged sentences

Other gains, net ( 5,958 ) ( 1,533 )

(Decrease) increase in net deferred loan fees ( 901 ) 1,084

Decrease in net deferred loan fees ( 570 ) ( 309 )

Bank-owned life insurance income ( 2,880 ) ( 1,945 )

11 unchanged sentences

Decrease in accrued interest receivable 564 850

(Increase) decrease in other assets ( 24,857 ) 2,467

Decrease (increase) in net deferred income tax asset 26,341 ( 44 )

Decrease in other assets 5,925 596

Increase in net deferred income tax asset ( 465 ) ( 42 )

Increase (decrease) in accrued interest payable 274 ( 295 )

6 unchanged sentences

Proceeds from maturities/issuer calls of securities held to maturity 5,158 11,246

(Purchases) redemptions of FRB and FHLB stock, net ( 7,838 ) 1,836

(Purchases) redemptions of Federal Reserve and FHLB stock, net ( 13,826 ) 1,792

Purchase of bank owned life insurance — ( 25,000 )

Net increase in loans ( 422,655 ) ( 125,083 )

2 unchanged sentences

Proceeds from sales of premises and equipment 158 218

Net cash paid from sale of insurance operations — ( 555 )

Net cash received from sale of insurance operations — 11,314

Bank-owned life insurance death benefits 5,827 —

2 unchanged sentences

Net increase in deposits 105,166 1,159,204

Net increase in short-term borrowings 159,000 —

Payments on long-term borrowings ( 99 ) ( 1,198 )

8 unchanged sentences

Consolidated Statements of Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30,

($ in thousands-unaudited) 2022 2021

6 unchanged sentences

Initial recognition of operating lease right-of-use assets and operating lease liabilities — 2,191

Receivable recorded related to sale of insurance operations — 12,955

Derecognition of intangible assets related to sale of insurance operations — ( 10,229 )

10 unchanged sentences

Accordingly, they do not include all information and notes necessary for complete financial statements in accordance with GAAP.

In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the consolidated financial position of the Company as of June 30, 2022, the consolidated results of operations for the three and six months ended June 30, 2022 and 2021, and the consolidated cash flows for the six months ended June 30, 2022 and 2021.

In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the consolidated financial position of the Company as of September 30, 2022, the consolidated results of operations for the three and nine months ended September 30, 2022 and 2021, and the consolidated cash flows for the nine months ended September 30, 2022 and 2021.

Any such adjustments were of a normal, recurring nature.

4 unchanged sentences

The Company has evaluated all subsequent events through the date the financial statements were issued.

Impact of COVID-19

Our market areas and local economies continue to show signs of recovery from the impact of the COVID-19 pandemic.

However, the current pandemic is ongoing and dynamic in nature, and there are many related uncertainties, including, among other things, its severity and new variants that have and may continue to arise;

its ultimate duration and infection spikes that may occur;

its impact on our customers, employees and vendors;

its impact on the financial services and banking industry;

and the ongoing impact on the economy as a whole.

The extent to which the COVID-19 pandemic has a further impact on our business, results of operations, and financial condition, as well as our regulatory capital and liquidity ratios, will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the COVID-19 pandemic and actions taken by governmental authorities and other third parties in response to the COVID-19 pandemic.

Note 2 – Accounting Pronouncements

Accounting Standards Adopted in 2022

The Company did not adopt any accounting standards during the first six months of 2022.

The Company did not adopt any accounting standards during the first nine months of 2022.

Accounting Standards Pending Adoption

4 unchanged sentences

The entity must have adopted the amendments in ASU 2016-13 ("CECL") to adopt the amendments in this ASU.

The Company is

currently evaluating the impact of adopting the new guidance on the consolidated financial statements but does not expect it to have a material effect on its financial statements.

The Company is currently evaluating the impact of adopting the new guidance on the consolidated financial statements but does not expect it to have a material effect on its financial statements.

ASU 2022-03, "Fair Value Measurements (Topic 820):

4 unchanged sentences

Note 3 – Securities

The book values and approximate fair values of investment securities at June 30, 2022 and December 31, 2021 are summarized as follows:

($ in thousands) June 30, 2022 December 31, 2021

The book values and approximate fair values of investment securities at September 30, 2022 and December 31, 2021 are summarized as follows:

($ in thousands) September 30, 2022 December 31, 2021

Value Unrealized Amortized

11 unchanged sentences

Total held to maturity $ 544,193 418,599 — ( 125,594 ) 513,825 511,699 3,540 ( 5,666 )

All of the Company’s mortgage-backed securities were issued by government-sponsored enterprises, except for private mortgage-backed securities with a fair value of $ 0.8 million and $ 0.9 million as of June 30, 2022 and December 31, 2021, respectively.

The following table presents information regarding securities with unrealized losses at June 30, 2022:

All of the Company’s mortgage-backed securities were issued by government-sponsored enterprises ("GSE"), except for private mortgage-backed securities with a fair value of $ 0.8 million and $ 0.9 million as of September 30, 2022 and December 31, 2021, respectively.

The following table presents information regarding all securities with unrealized losses at September 30, 2022:

Securities in an Unrealized

12 unchanged sentences

Total unrealized loss position $ 1,234,587 223,143 1,514,934 367,098 2,749,521 590,241

The following table presents information regarding securities with unrealized losses at December 31, 2021:

The following table presents information regarding all securities with unrealized losses at December 31, 2021:

Securities in an Unrealized

11 unchanged sentences

Total unrealized loss position $ 2,023,736 30,297 487,570 18,031 2,511,306 48,328

As of June 30, 2022, the Company's securities portfolio held 669 securities of which 616 securities were in an unrealized loss position.

As of September 30, 2022, the Company's securities portfolio held 669 securities of which 641 securities were in an unrealized loss position.

As of December 31, 2021, the Company's securities portfolio held 648 securities of which 371 securities were in an unrealized loss position.

In the above tables, all of the securities that were in an unrealized loss position at June 30, 2022 and December 31, 2021 are bonds that the Company has determined are in a loss position due primarily to interest rate factors and not credit quality concerns.

In the above tables, all of the securities that were in an unrealized loss position at September 30, 2022 and December 31, 2021 are bonds that the Company has determined are in a loss position due primarily to interest rate factors and not credit quality concerns.

In arriving at this conclusion, the Company reviewed third-party credit ratings and considered the severity of the impairment.

The state and local government investments are comprised almost entirely of highly-rated municipal bonds issued by state and local governments throughout the nation.

The Company has no significant concentrations of bond holdings from one state or local government entity.

Nearly all of our mortgage-backed securities were issued by FHLMC, FNMA, GNMA, or the SBA, each of which is a government agency or GSE and guarantees the repayment of the securities.

The Company does not intend to sell these securities, and it is more likely than not that the Company will not be required to sell these securities before recovery of the amortized cost.

At June 30, 2022 and December 31, 2021, the Company determined that expected credit losses associated with held to maturity debt securities were insignificant.

The book values and approximate fair values of investment securities at June 30, 2022, by contractual maturity, are summarized in the table below.

At September 30, 2022 and December 31, 2021, the Company determined that expected credit losses associated with held to maturity debt securities were insignificant.

The book values and approximate fair values of investment securities at September 30, 2022, by contractual maturity, are summarized in the table below.

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

8 unchanged sentences

Total securities $ 2,802,855 2,338,215 544,193 418,599

At June 30, 2022 and December 31, 2021 investment securities with carrying values of $ 812.7 million and $ 951.4 million, respectively, were pledged as collateral for public deposits.

At June 30, 2022 and December 31, 2021, there were no holdings of securities of any one issuer, other than U.S.

Government and its agencies or government-sponsored enterprises, in an amount greater than 10% of shareholders equity.

Included in “Other assets” in the Consolidated Balance Sheets are investments in Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank of Richmond (“FRB”) stock totaling $ 30.2 million and $ 22.3 million at June 30, 2022 and December 31, 2021, respectively.

At September 30, 2022 and December 31, 2021, investment securities with carrying values of $ 731.7 million and $ 951.4 million, respectively, were pledged as collateral for public deposits.

At September 30, 2022 and December 31, 2021, there were no holdings of securities of any one issuer, other than U.S.

Government and its agencies or GSEs, in an amount greater than 10% of shareholders' equity.

Included in “Other assets” in the Consolidated Balance Sheets are investments in Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank of Richmond (“Federal Reserve”) stock totaling $ 36.2 million and $ 22.3 million at September 30, 2022 and December 31, 2021, respectively.

These investments do not have readily determinable fair values.

The FHLB stock had a cost and fair value of $ 5.3 million and $ 4.6 million at June 30, 2022 and December 31, 2021, respectively, and serves as part of the collateral for the Company’s line of credit with the FHLB and is also a requirement for membership in the FHLB system.

The FRB stock had a cost and fair value of $ 24.9 million and $ 17.8 million at June 30, 2022 and December 31, 2021, respectively, and is a requirement for FRB member bank qualification.

Periodically, both the FHLB and FRB recalculate the Company’s required level of holdings, and the

Company either buys more stock or redeems a portion of the stock at cost.

The FHLB stock had a cost and fair value of $ 11.3 million and $ 4.6 million at September 30, 2022 and December 31, 2021, respectively, and serves as part of the collateral for the Company’s line of credit with the FHLB and is also a requirement for membership in the FHLB system.

The Federal Reserve stock had a cost and fair value of $ 24.9 million and $ 17.8 million at September 30, 2022 and December 31, 2021, respectively, and is a

requirement for Federal Reserve member bank qualification.

Periodically, both the FHLB and Federal Reserve recalculate the Company’s required level of holdings, and the Company either buys more stock or redeems a portion of the stock at cost.

The Company determined that neither stock was impaired at either period end.

3 unchanged sentences

The Class B shares have transfer restrictions, and the conversion rate into Class A shares is periodically adjusted as Visa settles litigation.

The conversion rate at June 30, 2022 was approximately 1.61 , which means the Company would have received approximately 19,843 Class A shares if the stock had converted on that date.

The conversion rate at September 30, 2022 was approximately 1.61 , which means the Company would have received approximately 19,843 Class A shares if the stock had converted on that date.

This Class B stock does not have a readily determinable fair value and is carried at zero .

2 unchanged sentences

The following is a summary of the major categories of total loans outstanding:

($ in thousands) June 30, 2022 December 31, 2021

($ in thousands) September 30, 2022 December 31, 2021

Amount Percentage Amount Percentage

8 unchanged sentences

Total loans $ 6,525,286 $ 6,081,715

Included in the line item "Commercial, financial, and agricultural" in the table above are Paycheck Protection Program ("PPP") loans totaling $ 3.0 million and $ 39.0 million at June 30, 2022 and December 31, 2021, respectively.

PPP loans are fully guaranteed by the small business administration ("SBA").

Included in unamortized net deferred loan fees are approximately $ 0.3 million and $ 2.6 million at June 30, 2022 and December 31, 2021, respectively, in unamortized net deferred loan fees associated with these PPP loans.

These fees are being amortized under the effective interest method over the terms of the loans.

Accelerated amortization is recorded in the periods in which principal amounts are forgiven in accordance with the terms of the Program.

Included in the table above are credit card balances outstanding totaling $ 40.8 million and $ 37.9 million at June 30, 2022 and December 31, 2021, respectively.

At June 30, 2022, approximately 54 % of total credit card balances were business credit cards included in "commercial, financial and agricultural" above and the remaining 46 % were personal credit cards included in consumer loans in the table above.

Included in the line item "Commercial, financial, and agricultural" in the table above are Paycheck Protection Program ("PPP") loans totaling $ 39.0 million at December 31, 2021.

There were essentially no remaining PPP loans at September 30, 2022.

PPP loans are fully guaranteed by the United State Small Business Administration ("SBA").

Included in the table above are credit card balances outstanding totaling $ 42.0 million and $ 37.9 million at September 30, 2022 and December 31, 2021, respectively.

At September 30, 2022, approximately 57 % of total credit card balances were business credit cards included in "commercial, financial and agricultural" above and the remaining 43 % were personal credit cards included in consumer loans in the table above.

Also included in the table above are various non-PPP SBA loans, with additional information on these loans presented in the table below.

($ in thousands) June 30, 2022 December 31, 2021

($ in thousands) September 30, 2022 December 31, 2021

Guaranteed portions of non-PPP SBA loans included in table above $ 36,625 48,377

2 unchanged sentences

Sold portions of SBA loans with servicing retained - not included in tables above $ 396,108 414,240

At June 30, 2022 and December 31, 2021, there was a remaining unaccreted discount on the retained portion of sold non-PPP SBA loans amounting to $ 5.4 million and $ 6.0 million, respectively.

Loans in the amount of $ 5.0 billion and $ 4.3 billion were pledged as collateral for certain borrowings at June 30, 2022 and December 31, 2021, respectively.

The loans above also include loans to executive officers and directors serving the Company at June 30, 2022 and to their related persons, totaling approximately $ 6.3 million and $ 0.6 million at June 30, 2022 and December 31, 2021, respectively.

For the six months ended June 30, 2022 t here were $ 5.8 million in new loans due to the addition of new directors, $ 66,000 in advances on loans, and repayments of $ 192,000 .

At September 30, 2022 and December 31, 2021, there was a remaining unaccreted discount on the retained portion of sold non-PPP SBA loans amounting to $ 4.6 million and $ 6.0 milion, respectively.

Loans in the amount of $ 5.2 billion and $ 4.3 billion were pledged as collateral for certain borrowings at September 30, 2022 and December 31, 2021, respectively.

The loans above also include loans to executive officers and directors serving the Company at September 30, 2022 and to their related persons, totaling approximately $ 6.1 million and $ 0.6 million at September 30, 2022 and December 31, 2021, respectively.

For the nine months ended September 30, 2022 t here were $ 5.8 million in new loans due to the addition of new directors, $ 38,000 in advances on loans, and repayments of $ 0.4 million.

The loans were made on terms and conditions applicable to similarly situated borrowers and management does not believe these loans involve more than the normal risk of collectability or present other unfavorable features.

As of June 30, 2022 and December 31, 2021, unamortized discounts on all acquired loans totaled $ 14.0 million and $ 17.2 million, respectively.

As of September 30, 2022 and December 31, 2021, unamortized discounts on all acquired loans totaled $ 12.5 million and $ 17.2 million, respectively.

Loan discounts are generally amortized as yield adjustments over the respective lives of the loans, so long as the loans perform.

1 unchanged sentence

Nonperforming assets are summarized as follows.

($ in thousands) June 30,

($ in thousands) September 30,

2022 December 31,

5 unchanged sentences

Total nonperforming assets $ 40,682 52,637

At June 30, 2022 and December 31, 2021, the Company had $ 1.0 million and $ 1.5 million, respectively, in residential mortgage loans in process of foreclosure.

The following table is a summary of the Company’s nonaccrual loans by major categories as of June 30, 2022.

At September 30, 2022 and December 31, 2021, the Company had $ 1.7 million and $ 1.5 million, respectively, in residential mortgage loans in the process of foreclosure.

The following table is a summary of the Company’s nonaccrual loans by major categories as of September 30, 2022.

($ in thousands) Nonaccrual Loans with No Allowance Nonaccrual Loans with an Allowance Total Nonaccrual Loans

15 unchanged sentences

Total $ 12,948 21,748 34,696

There was no interest income recognized during the six month period ended June 30, 2022 or the year ended December 31, 2021 on nonaccrual loans.

There was no interest income recognized during the nine month period ended September 30, 2022 or the year ended December 31, 2021 on nonaccrual loans.

The Company follows its nonaccrual policy of reversing contractual interest income in the income statement when the Company places a loan on nonaccrual status.

The following table represents the accrued interest receivables written off by reversing interest income during each period indicated.

($ in thousands) Six Months Ended June 30, 2022 For the Year Ended December 31, 2021 Six Months Ended June 30, 2021

($ in thousands) Nine Months Ended September 30, 2022 For the Year Ended December 31, 2021 Nine Months Ended September 30, 2021

Commercial, financial, and agricultural $ 56 195 160

5 unchanged sentences

Total $ 231 699 637

The following table presents an analysis of the payment status of the Company’s loans as of June 30, 2022.

The following table presents an analysis of the payment status of the Company’s loans as of September 30, 2022.

($ in thousands) Accruing

28 unchanged sentences

These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses ("ACL").

The following table presents an analysis of collateral-dependent loans of the Company as of June 30, 2022.

The following table presents an analysis of collateral dependent loans of the Company as of September 30, 2022.

($ in thousands) Residential Property Business Assets Land Commercial Property Total Collateral-Dependent Loans

11 unchanged sentences

Total $ 871 7,886 533 10,743 20,033

Under CECL, for collateral dependent loans, the Company has adopted the practical expedient to measure the allowance for credit losses based on the fair value of collateral.

The allowance for credit losses is calculated on an

individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for liquidation costs/discounts, and amortized cost.

Under CECL, for collateral dependent loans, the Company has adopted the practical expedient to measure the ACL based on the fair value of collateral.

The ACL is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for liquidation costs/discounts, and amortized cost.

If the fair value of the collateral exceeds the amortized cost, no allowance is required.

The Company's policy is to obtain third-party appraisals on any significant pieces of collateral.

For loans secured by real estate, the Company's policy is to write nonaccrual loans down to 90 % of the appraised value, which considers estimated selling costs.

For loans secured by real estate, the Company's policy is to write nonaccrual loans down to 90 % of the appraised value, which considers estimated selling costs that are usually incurred when disposing of real estate collateral.

For real estate collateral that is in industries which may be undergoing heightened stress due to economic or other external factors, the Company may reduce the collateral values by an additional 10 - 25 % of appraised value to recognize additional discounts that are estimated to be incurred in a near-term sale.

2 unchanged sentences

The Company does not believe that there is significant excess collateral for any of the loan types noted above.

The following table presents the activity in the ACL on loans for each of the periods indicated.

The following tables presents the activity in the ACL on loans for each of the periods indicated.

Fluctuations in the ACL each period are based on loan mix and growth, changes in the levels of nonperforming loans, economic forecasts impacting loss drivers, other assumptions and inputs to the CECL model, and as occurred in 2021, adjustments for acquired loan portfolios.

With regard to the increase in ACL for three and nine months ended September 30, 2022, approximately half of the increase was due to organic growth in the loan portfolio.

The balance of the increase was a result of updated economic forecast inputs to our CECL model driving higher loss rate assumptions, primarily due to higher unemployment forecasts and deteriorating Commercial Real Estate Index forecasts given the developing uncertain economic environment.

($ in thousands) Commercial,

5 unchanged sentences

and Other Consumer Loans Unallocated Total

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

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

Beginning balance $ 15,450 16,171 8,650 2,086 37,194 2,630 — 82,181

3 unchanged sentences

Ending balance $ 17,586 14,928 10,715 2,766 37,774 2,818 — 86,587

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

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

Beginning balance $ 16,249 16,519 8,686 4,337 30,342 2,656 — 78,789

25 unchanged sentences

and Other Consumer Loans Unallocated Total

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

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

Beginning balance $ 14,809 10,104 8,651 3,737 25,358 2,363 — 65,022

3 unchanged sentences

Ending balance $ 13,500 12,389 7,771 3,502 24,097 2,369 — 63,628

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

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

Beginning balance $ 11,316 5,355 8,048 2,375 23,603 1,478 213 52,388

35 unchanged sentences

In the tables that follow, substantially all of the "Classified Loans" have grades of 7 or Fail, with those categories having similar levels of risk.

The amount of revolving lines of credit that converted to term loans during the period was immaterial.

The tables below present the Company’s recorded investment in loans by credit quality indicators by year of origination or renewal as of the periods indicated.

Acquired loans are presented in the year originated, not in the year of acquisition.

For three month and nine month periods ended September 30, 2022, the amount of revolving lines of credit that converted to term loans totaled $ 2.4 million and $ 4.6 million, respectively.

Converted lines of credit were immaterial in the comparable prior year periods.

Term Loans by Year of Origination

($ in thousands) 2022 2021 2020 2019 2018 Prior Revolving Total

As of June 30, 2022

As of September 30, 2022

Commercial, financial, and agricultural

70 unchanged sentences

Concessions may include interest rate reductions or below market interest rates, principal forgiveness, extension of terms and other actions intended to minimize potential losses.

The vast majority of the Company’s TDRs modified during the periods ended June 30, 2022 and June 30, 2021 related to interest rate reductions combined with extension of terms.

The vast majority of the Company’s TDRs modified during the periods ended September 30, 2022 and September 30, 2021 related to interest rate reductions combined with extension of terms.

The Company does not generally grant principal forgiveness.

1 unchanged sentence

The TDRs that are nonaccrual are reported within the nonaccrual loan totals presented previously.

At June 30, 2022, there were three loans with immaterial commitments to lend additional funds to debtors whose loans were modified as a TDR.

At September 30, 2022, there was one loan with immaterial commitments to lend additional funds to debtors whose loans were modified as a TDR.

At December 31, 2021, there were no commitments to lend additional funds to debtors whose loans were modified as a TDR.

The following table presents information related to loans modified in a TDR during the three months ended June 30, 2022 and 2021.

($ in thousands) For the three months ended June 30, 2022 For the three months ended June 30, 2021

The following table presents information related to loans modified in a TDR during the three months ended September 30, 2022 and 2021.

($ in thousands) For the three months ended September 30, 2022 For the three months ended September 30, 2021

Contracts Pre-

4 unchanged sentences

TDRs – Accruing

Commercial, financial, and agricultural 1 $ 161 $ 161 — $ — $ —

Real estate – construction, land development & other land loans 1 131 131 — — —

Real estate – mortgage – residential (1-4 family) first mortgages — — — 1 33 33

Real estate – mortgage – home equity loans / lines of credit 1 176 176 — — —

1 unchanged sentence

Commercial, financial, and agricultural 1 327 327 — — —

Real estate – construction, land development & other land loans — — — 1 75 75

Real estate – mortgage – residential (1-4 family) first mortgages — — — 1 263 263

Real estate – mortgage – commercial and other 1 244 244 3 1,569 1,569

Total TDRs arising during period 2 $ 503 $ 503 — $ — $ —

The following table presents information related to loans modified in a TDR during the six months ended June 30, 2022 and 2021.

($ in thousands) For the six months ended June 30, 2022

For the six months ended June 30, 2021

The following table presents information related to loans modified in a TDR during the nine months ended September 30, 2022 and 2021.

($ in thousands) For the nine months ended September 30, 2022

For the nine months ended September 30, 2021

Contracts Pre-

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Real estate – mortgage – commercial and other — — — 1 160 160

Consumer loans — — — — — —

TDRs – Nonaccrual

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Real estate – mortgage – residential (1-4 family) first mortgages 1 36 36 1 263 263

Real estate – mortgage – home equity loans / lines of credit — — — — — —

Real estate – mortgage – commercial and other 2 784 784 3 1,569 1,569

Consumer loans — — — — — —

Total TDRs arising during period 13 2,154 2,154 10 2,926 2,923

The Company considers a TDR loan to have defaulted when it becomes 90 or more days delinquent under the modified terms, has been transferred to nonaccrual status, or has been transferred to foreclosed real estate.

There were no accruing TDRs that were modified in the previous twelve months and that defaulted during the three or six months ended June 30, 2022 or 2021.

There were no accruing TDRs that were modified in the previous twelve months and that defaulted during the three or nine months ended September 30, 2022 or 2021.

Concentration of Credit Risk

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The estimate includes consideration of the likelihood that funding will occur, which is based on a historical funding study derived from internal information, and an estimate of expected credit losses on commitments expected to be funded over its estimated life, which are the same loss rates that are used in computing the ACL on loans.

The ACL for unfunded loan commitments of $ 12.0 million and $ 13.5 million at June 30, 2022 and December 31, 2021, respectively, is separately classified on the Consolidated Balance Sheets within "Other liabilities".

The following table presents the balance and activity in the allowance for credit losses for unfunded loan commitments for the six months ended June 30, 2022.

The ACL for unfunded loan commitments of $ 12.3 million and $ 13.5 million at September 30, 2022 and December 31, 2021, respectively, is separately classified on the Consolidated Balance Sheets within "Other liabilities".

The following table presents the balance and activity in the allowance for credit losses for unfunded loan commitments for the nine months ended September 30, 2022.

($ in thousands) Total Allowance for Credit Losses - Unfunded Loan Commitments

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Reversal of provision for unfunded commitments ( 1,200 )

Ending balance at June 30, 2022

Ending balance at September 30, 2022

Allowance for Credit Losses - Securities Held to Maturity

The ACL for securities held to maturity was immaterial at June 30, 2022 and December 31, 2021.

The ACL for securities held to maturity was immaterial at September 30, 2022 and December 31, 2021.

Note 5 – Goodwill and Other Intangible Assets

The following is a summary of the gross carrying amount and accumulated amortization of amortizable intangible assets as of June 30, 2022 and December 31, 2021, and the carrying amount of unamortized intangible assets as of those same dates.

June 30, 2022 December 31, 2021

The following is a summary of the gross carrying amount and accumulated amortization of amortizable intangible assets as of September 30, 2022 and December 31, 2021, and the carrying amount of unamortized intangible assets as of those same dates.

September 30, 2022 December 31, 2021

($ in thousands) Gross Carrying

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Goodwill $ 364,263 364,263

Amortization expense of all other intangible assets, excluding the SBA servicing assets, totaled $ 1.0 million and $ 0.8 million for the three months ended June 30, 2022 and 2021, respectively, and $ 2.0 million and $ 1.7 million for the six months ended June 30, 2022 and 2021, respectively.

Amortization expense of all other intangible assets, excluding the SBA servicing assets, totaled $ 0.9 million and $ 0.7 million for the three months ended September 30, 2022 and 2021, respectively, and $ 2.9 million and $ 2.4 million for the nine months ended September 30, 2022 and 2021, respectively.

SBA servicing assets are recorded for the portions of SBA loans that the Company has sold but continues to service for a fee.

Servicing assets are initially recorded at fair value and amortized over the expected lives of the related loans and are tested for impairment on a quarterly basis.

SBA servicing asset amortization expense is recorded within noninterest income as an offset to SBA servicing fees within the line item "Other service charges, commissions, and fees." The following table presents the changes in the SBA servicing assets for the three and six months ended June 30, 2022 and 2021.

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

($ in thousands) 2022 2021 2022 2021

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Ending balance, net $ 4,391 5,894 4,391 5,894

A t June 30, 2022 and December 31, 2021, the Company serviced SBA loans totali ng $ 408.9 million a nd $ 414.2 million, respectively, for others.

A t September 30, 2022 and December 31, 2021, the Company serviced SBA loans totali ng $ 396.1 million a nd $ 414.2 million, respectively, for others.

There were no other loans serviced in any period presented.

There were no changes to the carrying amounts of goodwill for the six months ended June 30, 2022 .

There were no changes to the carrying amounts of goodwill for the three or nine months ended September 30, 2022 .

Goodwill is evaluated for impairment on at least an annual basis, with the annual evaluation occurring as of October 31 of each year.

The Company performed the required annual impairment testing in the fourth quarter of 2021.

Management evaluated the events and circumstances in the second quarter of 2022 that could indicate that goodwill might be impaired and concluded that a subsequent interim test was not necessary.

Management evaluated the events and circumstances in the third quarter of 2022 that could indicate that goodwill might be impaired and concluded that a subsequent interim test was not necessary.

The following table presents the estimated amortization expense schedule related to acquisition-related amortizable intangible assets.

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($ in thousands) Estimated Amortization

July 1, 2022 to December 31, 2022 $ 1,713

October 1, 2022 to December 31, 2022 $ 825

Thereafter 2,088

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Note 6 - Borrowings

The following tables present information regarding the Company’s outstanding borrowings at June 30, 2022 and December 31, 2021 ($ in thousands).

Description Due date Call Feature June 30, 2022 Interest Rate

The following tables present information regarding the Company’s outstanding borrowings at September 30, 2022 and December 31, 2021 (dollars in thousands).

Description Due date Call Feature September 30, 2022 Interest Rate

FHLB Principal Reducing Credit 7/24/2023 None $ 44 1.00 % fixed

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FHLB Principal Reducing Credit 12/20/2028 None 332 0.50 % fixed

FHLB Daily Rate Credit 8/23/2023 None 34,000 3.32 % fixed

FHLB Fixed Rate Credit 10/27/2022 None 50,000 3.11 % fixed

FHLB Fixed Rate Credit 10/13/2022 None 75,000 3.03 % fixed

Trust Preferred Securities 1/23/2034 Quarterly by Company

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3 month LIBOR + 1.39 %

Total borrowings / weighted average rate as of June 30, 2022

Total borrowings / weighted average rate as of September 30, 2022

229,951 3.69 %

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The Company enters into leases in the normal course of business.

As of June 30, 2022, the Company leased 16 branch offices for which the land and buildings are leased and nine branch offices for which the land is leased but the building is owned.

As of September 30, 2022, the Company leased 16 branch offices for which the land and buildings are leased and nine branch offices for which the land is leased but the buildings are owned.

The Company also leases office space for several operational departments.

All of the Company’s leases are operating leases under applicable accounting standards and the lease agreements have maturity dates ranging from July 2023 through May 2076, some of which include options for multiple five - and ten-year extensions.

The weighted average remaining life of the lease term for these leases was 19.5 years as of June 30, 2022.

The weighted average remaining life of the lease term for these leases was 19.6 years as of September 30, 2022.

Certain of the Company's lease agreements include variable lease payments based on changes in inflation, with the impact of that factor being insignificant to the Company's total lease expense.

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The Company uses its incremental borrowing rate, on a collateralized basis, at lease commencement to calculate the present value of lease payments when the rate implicit in the lease is not known.

The weighted average discount rate for leases was 2.92 % as of June 30, 2022.

Total operating lease expense was $ 0.7 million and $ 0.6 million for the three months ended June 30, 2022 and 2021, respectively, and $ 1.6 million and $ 1.3 million for the six months ended June 30, 2022 and 2021, respectively.

The right-of-use assets and lease liabilities were $ 19.7 million and $ 20.3 million as of June 30, 2022, respectively, and were $ 20.7 million and $ 21.2 million as of December 31, 2021, respectively.

Future undiscounted lease payments for operating leases with initial terms of one year or more as of June 30, 2022 are as follows.

The weighted average discount rate for leases was 2.94 % as of September 30, 2022.

Total operating lease expense was $ 0.7 million and $ 0.5 million for the three months ended September 30, 2022 and 2021, respectively, and $ 2.3 million and $ 1.8 million for the nine months ended September 30, 2022 and 2021, respectively.

The right-of-use assets and lease liabilities were $ 19.2 million and $ 19.8 million as of September 30, 2022, respectively, and were $ 20.7 million and $ 21.2 million as of December 31, 2021, respectively.

Future undiscounted lease payments for operating leases with initial terms of one year or more as of September 30, 2022 are as follows.

($ in thousands)

July 1, 2022 to December 31, 2022 $ 1,167

October 1, 2022 to December 31, 2022 $ 584

Thereafter 19,988

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Although no previously accrued benefits were lost, employees no longer accrue benefits under these plans for service subsequent to 2012.

The Company recorded periodic pension cost totaling $ 51,000 and $ 126,000 for the three months ended June 30, 2022 and 2021, respectively, and $ 102,000 and $ 317,000 for the six months ended June 30, 2022 and 2021, respectively.

The Company recorded periodic pension cost totaling $ 51,000 and $ 158,000 for the three months ended September 30, 2022 and 2021, respectively, and $ 153,000 and $ 475,000 for the nine months ended September 30, 2022 and 2021, respectively.

The following tables contain the components of the pension cost.

For the Three Months Ended June 30,

($ in thousands) 2022 Pension Plan 2021 Pension Plan 2022 SERP 2021 SERP 2022 Total Both Plans 2021 Total Both Plans

For the Three Months Ended September 30,

($ in thousands) 2022 Pension Plan 2022 SERP 2022 Total Both Plans 2021 Pension Plan 2021 SERP 2021 Total Both Plans

Service cost $ — — — — — —

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Net periodic pension cost $ 159 ( 108 ) 51 125 33 158

For the Six Months Ended June 30,

($ in thousands) 2022 Pension Plan 2021 Pension Plan 2022 SERP 2021 SERP 2022 Total Both Plans 2021 Total Both Plans

For the Nine Months Ended September 30,

($ in thousands) 2022 Pension Plan 2022 SERP 2022 Total Both Plans 2021 Pension Plan 2021 SERP 2021 Total Both Plans

Service cost $ — — — — — —

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The Company’s contributions to the Pension Plan are based on computations by independent actuarial consultants and are intended to be deductible for income tax purposes.

The Company did not contribute to the Pension Plan in the first six months of 2022 and does not expect to contribute to the Pension Plan in the remainder of 2022.

The Company did not contribute to the Pension Plan in the first nine months of 2022 and does not expect to contribute to the Pension Plan in the remainder of 2022.

The Company’s funding policy with respect to the SERP is to fund the related benefits from the operating cash flow of the Company.

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Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring and nonrecurring basis at June 30, 2022.

The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring and nonrecurring basis at September 30, 2022.

($ in thousands)

Description of Financial Instruments

Fair Value at June 30, 2022 Quoted Prices in

Fair Value at September 30, 2022 Quoted Prices in

Active Markets for

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For the Company, Level 2 securities include U.S.

Treasury bonds, mortgage-backed securities, commercial mortgage-backed obligations, government-sponsored enterprise securities, and corporate bonds.

Treasury bonds, mortgage-backed securities, commercial mortgage-backed obligations, GSEs, and corporate bonds.

In cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

Collateral-dependent loans — Fair values for collateral-dependent loans are measured on a non-recurring basis and are based on (1) the underlying collateral values securing the loans, adjusted for estimated selling costs, or (2) the net present value of the cash flows expected to be received for such loans.

Individually evaluated loans — Fair values for individually evaluated loans are measured on a non-recurring basis and are based on (1) the underlying collateral values securing the loans, adjusted for estimated selling costs, or (2) the net present value of the cash flows expected to be received for such loans.

Collateral may be in the form of real estate or business assets including equipment, inventory and accounts receivable.

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subsequent to foreclosure, any excess of the real estate recorded value over the fair value of the real estate is treated as a foreclosed real estate write-down on the Consolidated Statements of Income.

For Level 3 assets and liabilities measured at fair value on a recurring or non-recurring basis as of June 30, 2022, the significant unobservable inputs used in the fair value measurements were as follows:

($ in thousands) Fair Value at June 30, 2022 Valuation

For Level 3 assets and liabilities measured at fair value on a recurring or non-recurring basis as of September 30, 2022, the significant unobservable inputs used in the fair value measurements were as follows:

($ in thousands) Fair Value at September 30, 2022 Valuation

Technique Significant Unobservable

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Foreclosed real estate 364 Appraised value Discounts applied for estimated costs to sell 10 %

The carrying amounts and estimated fair values of financial instruments not carried at fair value at June 30, 2022 and December 31, 2021 were as follows:

June 30, 2022 December 31, 2021

The carrying amounts and estimated fair values of financial instruments not carried at fair value at September 30, 2022 and December 31, 2021 were as follows:

September 30, 2022 December 31, 2021

($ in thousands) Level in Fair

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Note 10 – Stock-Based Compensation

The Company recorded total stock-based compensation expense of $ 0.6 million and $ 0.8 million for the three months ended June 30, 2022 and 2021, respectively, and $ 1.2 million and $ 1.2 million for the six months ended June 30, 2022 and 2021, respectively.

In addition, the Company recog nized $ 149,000 an d $ 191,000 of income tax benefits related to stock-based compensation expense for the three months ended June 30, 2022 and 2021, respectively, and $ 275,000 and $ 282,000 for the six months ended June 30, 2022 and 2021, respectively.

At June 30, 2022, the sole equity-based compensation plan for the Company was the First Bancorp 2014 Equity Plan (the "Equity Plan"), which was approved by shareholders on May 8, 2014.

As of June 30, 2022, the Equity Plan had 374,192 shares remaining available for grant.

The Company recorded total stock-based compensation expense of $ 0.7 million and $ 0.5 million for the three months ended September 30, 2022 and 2021, respectively, and $ 1.9 million and $ 1.8 million for the nine months ended September 30, 2022 and 2021, respectively.

In addition, the Company recog nized $ 170,000 an d $ 123,000 of income tax benefits related to stock-based compensation expense for the three months ended September 30, 2022 and 2021, respectively, and $ 445,000 and $ 405,000 for the nine months ended September 30, 2022 and 2021, respectively.

At September 30, 2022, the sole equity-based compensation plan of the Company was the First Bancorp 2014 Equity Plan (the "Equity Plan"), which was approved by shareholders on May 8, 2014.

As of September 30, 2022, the Equity Plan had 346,033 shares remaining available for grant.

The Equity Plan is intended to serve as a means to attract, retain and motivate key employees and directors and to associate the interests of the plans' participants with those of the Company and its shareholders.

8 unchanged sentences

Over the past five years, there have been insignificant amounts of forfeitures, and therefore the Company assumes that all awards granted with service conditions only will vest.

In addition to employee equity awards, the Company's practice is to grant common shares, valued at approximately $ 32,000 , to each non-employee director (currently 14 in total) in June of each year.

In addition to employee equity awards, the Company's practice is to grant common shares, valued at approximately $ 32,000 for the current year, to each non-employee director (currently 12 in total) in June of each year.

Compensation expense associated with these director awards is recognized on the date of award since there are no vesting conditions.

The following table presents information regarding the activity for the first six months of 2022 related to the Company’s outstanding restricted stock awards:

The following table presents information regarding the activity for the first nine months of 2022 related to the Company’s outstanding restricted stock awards:

Long-Term Restricted Stock Awards

5 unchanged sentences

Forfeited or expired during the period ( 7,115 ) 31.50

Nonvested at June 30, 2022 215,465 $ 36.18

Total unrecognized compensation expense as of June 30, 2022 amounted to $ 5.2 million with a weighted-average remaining term of 2.4 years.

For the nonvested awards that are outstanding at June 30, 2022, the Company

expects to record $ 2.5 million in compensation expense in the next twelve months, $ 1.3 million of which is expected to be recorded in the remaining quarters of 2022.

Nonvested at September 30, 2022 242,753 $ 36.37

Total unrecognized compensation expense as of September 30, 2022 amounted to $ 5.5 million with a weighted-average remaining term of 2.3 years.

For the nonvested awards that are outstanding at September 30, 2022, the Company expects to record $ 2.7 million in compensation expense in the next twelve months, $ 0.7 million of which is expected to be recorded in the remaining quarter of 2022.

Note 11 - Shareholders' Equity

Stock Repurchases

During the first six months of 2022, the Company did not repurchase any shares of the Company's common stock.

During the first nine months of 2022, the Company did not repurchase any shares of the Company's common stock.

The Company currently has a $ 40.0 million repurchase authorization that was announced on February 7, 2022, and expires December 31, 2022.

During the first six months of 2021, the Company repurchased approximately 106,744 shares of the Company's common stock at an average stock price of $ 37.81 per share, which totaled $ 4.0 million, under a $ 20.0 million repurchase authorization announced publicly in January 2021.

During the first nine months of 2021, the Company repurchased 106,744 shares of the Company's common stock at an average stock price of $ 37.81 per share, which totaled approximately $ 4.0 million, under a $ 20.0 million repurchase authorization announced publicly in January 2021.

Note 12 – Earnings Per Share

The following is a reconciliation of the numerators and denominators used in computing Basic and Diluted Earnings Per Common Share ("EPS"):

For the Three Months Ended June 30,

For the Three Months Ended September 30,

($ in thousands except per

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Diluted EPS per common share $ 37,949 35,703,446 $ 1.06 $ 27,643 28,515,328 $ 0.97

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

($ in thousands except per

11 unchanged sentences

Diluted EPS per common share $ 108,503 35,662,527 $ 3.04 $ 85,122 28,514,405 $ 2.99

Note 13 – Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive loss for the Company are as follows:

($ in thousands) June 30, 2022 December 31, 2021

Note 13 – Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive income (loss) for the Company are as follows:

($ in thousands) September 30, 2022 December 31, 2021

Unrealized loss on securities available for sale $ ( 464,640 ) ( 32,067 )

5 unchanged sentences

Total accumulated other comprehensive loss $ ( 358,036 ) ( 24,970 )

The following tables disclose the changes in accumulated other comprehensive loss for the three and six months ended June 30, 2022 and 2021 (all amounts are net of tax).

For the Three Months Ended June 30, 2022

The following tables disclose the changes in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2022 and 2021 (all amounts are net of tax).

For the Three Months Ended September 30, 2022

($ in thousands) Unrealized Loss on

6 unchanged sentences

Ending balance $ ( 357,866 ) ( 170 ) ( 358,036 )

For the Three Months Ended June 30, 2021

For the Three Months Ended September 30, 2021

($ in thousands) Unrealized (Loss) Gain on

6 unchanged sentences

Ending balance $ 3,244 ( 1,026 ) 2,218

For the Six Months Ended June 30, 2022

For the Nine Months Ended September 30, 2022

($ in thousands) Unrealized Loss on

6 unchanged sentences

Ending balance $ ( 357,866 ) ( 170 ) ( 358,036 )

For the Six Months Ended June 30, 2021

For the Nine Months Ended September 30, 2021

($ in thousands) Unrealized Gain

6 unchanged sentences

Ending balance $ 3,244 ( 1,026 ) 2,218

Amounts reclassified from accumulated other comprehensive income for rnrealized gain (loss) on securities available for sale represent realized securities gains or losses, net of tax effects.

Amounts reclassified from accumulated other comprehensive income for postretirement plans asset (liability) represent amortization of amounts included in accumulated other comprehensive income, net of taxes, and are recorded in the "Other operating expenses" line item of the Consolidated Statements of Income.

Amounts reclassified from accumulated other comprehensive income for unrealized gain (loss) on securities available for sale represent realized securities gains or losses, net of tax effects.

There were no security sales in any period presented.

Amounts reclassified from accumulated other comprehensive income for postretirement plans asset (liability) represent amortization of amounts included in accumulated other comprehensive income (loss), net of taxes, and are recorded in the "Other operating expenses" line item of the Consolidated Statements of Income.

Note 14 – Revenue from Contracts with Customers

All of the Company’s revenues that are in the scope of the “ Revenue from Contracts with Customers ” accounting standard (“ASC 606”) are recognized within noninterest income.

The following table presents the Company’s sources of noninterest income for the three and six months ended June 30, 2022 and 2021.

The following table presents the Company’s sources of noninterest income for the three and nine months ended September 30, 2022 and 2021.

Items outside the scope of ASC 606 are noted as such.

For the Three Months Ended For the Six Months Ended

($ in thousands) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

For the Three Months Ended For the Nine Months Ended

($ in thousands) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Noninterest Income:

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Commissions from the sales of insurance and financial products:

The Company earns commissions from the sale of wealth management products and also earned commissions from the sale of insurance policies until the sale of First Bank Insurance Services on June 30, 2021.

The Company earns commissions from the sale of wealth management products.

In addition, this line included earned commissions from the sale of insurance policies until the sale of substantially all of the assets of First Bank Insurance Services on June 30, 2021, at which time this revenue source ceased.

Insurance income, which was earned by the Company until June 30, 2021, generally consisted of commissions from the sale of insurance policies and performance-based commissions from insurance companies.

The Company recognized commission income from the sale of insurance policies when it acted as an agent between the insurance company and the policyholder.

The Company’s performance obligation is generally satisfied upon the issuance of the insurance policy.

Shortly after the policy is issued, the carrier remits the commission payment to the Company, and the Company recognized the revenue.

Performance-based commissions from insurance companies were recognized at a point in time as policies are sold.

The Company’s performance obligation was generally satisfied upon the issuance of the insurance policy.

Wealth management income primarily consists of commissions received on financial product sales, such as annuities.

7 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