What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-08-02 compared with 2021-05-05 · 279 added, 171 removed, 847 unchanged (35% of the section changed)

1 unchanged sentence

The consolidated balance sheets of First Financial Bankshares, Inc.

and Subsidiaries (the “Company” or “we”) at March 31, 2021 and 2020 (unaudited) and December 31, 2020, and the consolidated statements of earnings, comprehensive earnings, shareholders’ equity and cash flow for the three-months ended March 31, 2021 and 2020 (unaudited) and notes to consolidated financial statements (unaudited), follow on pages 4 through 45.

and Subsidiaries (the “Company” or “we”) at June 30, 2021 and 2020 (unaudited) and December 31, 2020, and the consolidated statements of earnings, comprehensive earnings and shareholders’ equity for the three and six-months

ended June 30, 2021 and 2020 (unaudited), and the consolidated statements of cash flows for the six-months

ended June 30, 2021 and 2020 (unaudited) and notes to consolidated financial statements (unaudited), follow on pages 4 through 47.

FIRST FINANCIAL BANKSHARES, INC.

6 unchanged sentences

SECURITIES AVAILABLE-FOR-SALE,

at fair value (amortized cost of these securities was $ 4,961,438 , $ 3,950,510 and $ 4,177,179 as of March 31, 2021 and 2020 and December 31, 2020, respectively)

at fair value (amortized cost of these securities was $ 5,405,189 , $ 3,927,254 and $ 4,177,179 as of June 30, 2021 and 2020 and December 31, 2020, respectively)

Held-for-investment,

excluding PPP loans

Total loans held-for-investments

Less—allowance for credit losses

1 unchanged sentence

Held-for-sale

($ 61,511 , $ 39,659 and $ 79,585 at fair value at March 31, 2021 and 2020 and December 31, 2020, respectively)

($ 56,257 , $ 63,293 and $ 79,585 at fair value at

June 30, 2021 and 2020 and December 31, 2020, respectively)

BANK PREMISES AND EQUIPMENT, net

5 unchanged sentences

DIVIDENDS PAYABLE

TRADE DATE PAYABLE

OTHER LIABILITIES

3 unchanged sentences

Common stock—($ 0.01 par value, authorized 200,000,000 shares;

142,285,611 , 142,314,930 and 142,161,834 shares issued at March 31, 2021 and 2020 and December 31, 2020, respectively)

142,359,774 , 142,035,396 and 142,161,834 shares issued at June 30, 2021 and 2020 and December 31, 2020, respectively)

Capital surplus

1 unchanged sentence

Treasury stock (shares at cost:

938,004 , 928,417 and 938,591 at March 31, 2021 and 2020 and December 31, 2020, respectively)

938,629 , 932,018 and 938,591 at June 30, 2021 and 2020 and December 31, 2020, respectively)

Deferred compensation

7 unchanged sentences

(Dollars in thousands, except per share amounts)

Three-Months Ended March 31,

Three-Months Ended June 30,

Six-Months Ended June 30,

INTEREST INCOME:

16 unchanged sentences

Net gain on sale of foreclosed assets

Net gain on sale of assets

Net gain (loss) on sale of assets

Interest on loan recoveries

22 unchanged sentences

(Dollars in thousands)

Three-Months Ended March 31,

Three-Months Ended June 30,

Six-Months Ended June 30,

OTHER ITEMS OF COMPREHENSIVE EARNINGS:

16 unchanged sentences

Shareholders’

Balances at March 31, 2020 (unaudited)

Net earnings (unaudited)

Stock option exercises (unaudited)

Restricted stock grant/fortfeiture, net (unaudited)

Cash dividends declared, $ 0.13 per share (unaudited)

Change in unrealized gain in investment securities available-for-sale,

net of related income taxes (unaudited)

Shares purchased in connection with directors’ deferred compensation plan, net (unaudited)

Stock option expense (unaudited)

Shares repurchased under stock repurchase authorization (unaudited)

Balances at June 30, 2020 (unaudited)

Balances at March 31, 2021 (unaudited)

Net earnings (unaudited)

Stock option exercises (unaudited)

Restricted stock grant/fortfeiture, net (unaudited)

Cash dividends declared, $ 0.15 per share (unaudited)

Change in unrealized gain in investment securities available-for-sale,

net of related income taxes (unaudited)

Shares purchased in connection with directors’ deferred compensation plan, net (unaudited)

Stock option expense (unaudited)

Balances at June 30, 2021 (unaudited)

FIRST FINANCIAL BANKSHARES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Dollars in thousands, except per share amounts)

Treasury Stock

Comprehensive

Shareholders’

Balances at December 31, 2019

2 unchanged sentences

Stock option exercises (unaudited)

Restricted stock grant (unaudited)

Restricted stock grant (unaudited) Restricted stock grant/fortfeiture, net (unaudited)

Cash dividends declared, $ 0.25 per share (unaudited)

1 unchanged sentence

net of related income taxes (unaudited)

Shares purchased (redeemed) in connection with directors’ deferred compensation plan, net (unaudited)

Shares purchased in connection with directors’ deferred compensation plan, net (unaudited)

Stock option expense (unaudited)

Balances at March 31, 2020 (unaudited)

Shares repurchased under stock repurchase authorization (unaudited)

Balances at June 30, 2020 (unaudited)

Balances at December 31, 2020

7 unchanged sentences

Stock option expense (unaudited)

Balances at March 31, 2021 (unaudited)

Balances at June 30, 2021 (unaudited)

See notes to consolidated financial statements.

3 unchanged sentences

(Dollars in thousands)

Three-Months Ended March 31,

Six-Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

5 unchanged sentences

Gain on sale of assets, net

Deferred federal income tax (expense) benefit

Change in loans held-for-sale

5 unchanged sentences

Cash received in acquisition of TB&T Bancshares, Inc.

Activity in available-for-sale

Net (increase) decrease in loans held-for-investment

Activity in available-for-sale securities:

Net increase in loans held-for-investment

Purchases of bank premises and equipment

2 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES:

Net increase (decrease) in noninterest-bearing deposits

Net increase in noninterest-bearing deposits

Net increase in interest-bearing deposits

3 unchanged sentences

Dividends paid

Repurchase of stock

Net cash provided by financing activities

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

NET INCREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, beginning of period

2 unchanged sentences

Interest paid

Federal income taxes paid

Transfer of loans and bank premises to other real estate

Investment securities purchased but not settled

Investment securities sold but not yet settled

Restricted stock grant (forfeiture)

7 unchanged sentences

First Financial Bankshares, Inc.

(a Texas corporation) (“Bankshares”, “Company,” “we” or “us”) is a financial holding company which owns all of the capital stock of one bank with 78 locations located in Texas as of March 31, 2021.

The Company’s subsidiary bank is First Financial Bank, N.A.

The Company’s primary source of revenue is providing loans and banking services to consumers and commercial customers in the market area in which First Financial Bank, N.A.

In addition, the Company also owns First Financial Trust & Asset Management Company, N.A., First Financial Insurance Agency, Inc., First Technology Services, Inc.

and First Financial Investments, Inc.

In addition, the Company also owns First Financial Trust & Asset Management Company, N.A., First Financial Insurance Agency, Inc.

and First Technology Services, Inc.

Basis of Presentation

11 unchanged sentences

On March 12, 2020, the Company’s Board of Directors authorized the repurchase of up to 4,000,000 common shares through September 30, 2021.

Previously, the Board of Directors had authorized the repurchase of up to 2,000,000 common shares through September 30, 2020.

On July 27, 2021, the Company’s Board of Directors renewed the prior authorization and authorized the repurchase of up to 5,000,000 common shares through July 31, 2023.

The stock repurchase plan authorizes management to repurchase and retire the stock at such time as repurchases and retirements are considered beneficial to the Company and stockholders.

1 unchanged sentence

Under the repurchase plan, there is no minimum number of shares that the Company is required to repurchase.

Through March 31, 2021, 324,802 shares were repurchased and retired (all during the months of March and April 2020) totaling $ 8,008,000 under this repurchase plan.

Through June 30, 2021, 324,802 shares were repurchased and retired (all during the months of March and April 2020) totaling $ 8,008,000 under this repurchase plan.

On January 1, 2020, the Company acquired 100 % of the outstanding capital stock of TB&T Bancshares, Inc.

10 unchanged sentences

, became effective for the Company.

Accounting Standards Codification (“ASC” Topic 326 (“ASC 326”) replaced the previous “incurred loss” model for measuring credit losses with an unexpected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology.

Accounting Standards Codification (“ASC” Topic 326 (“ASC 326”) replaced the previous “incurred loss” model for measuring credit losses with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology.

The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity

18 unchanged sentences

In accordance with the standard, management did not reassess whether PCI assets met the criteria of PCD assets as of the date of adoption.

For the periods ended March 31, 2021 and 2020, and December 31, 2020, amounts related to the Company’s PCD and PCI loans were insignificant and disclosures related to these balances have been omitted.

For the periods ended June 30, 2021 and 2020, and December 31, 2020, amounts related to the Company’s PCD and PCI loans were insignificant and disclosures related to these balances have been omitted.

Other Recently Issued and Effective Authoritative Accounting Guidance

14 unchanged sentences

in the tax basis of goodwill.

is effective for the Company for annual reporting periods after December 15, 2020, and interim periods within.

was effective for the Company for annual reporting periods after December 15, 2020, and interim periods within.

Adoption of ASU 2019-12

26 unchanged sentences

The Company has made a policy election to exclude accrued interest from the amortized cost basis of securities and report accrued interest separately in other assets on the consolidated balance sheets.

A security is placed on nonaccrual status at the time any principal or interest payments become more than 90 days delinquent or if full collection of interest or principal becomes uncertain.

Accrued interest for a security placed on nonaccrual is reversed against interest income.

There was no accrued interest related to securities reversed against interest income for the three-months ended March 31, 2021 and 2020.

A security is placed on non-accrual

status at the time any principal or interest payments become more than 90 days delinquent or if full collection of interest or principal becomes uncertain.

Accrued interest for a security placed on non-accrual

is reversed against interest income.

There was no accrued interest related to securities reversed against interest income for the three and six-months

ended June 30, 2021 and 2020.

The Company records its available-for-sale

39 unchanged sentences

securities from the estimate of credit losses.

At March 31, 2021, 2020 and December 31, 2020, the Company held no securities that were classified as held-to-maturity.

At June 30, 2021, 2020 and December 31, 2020, the Company held no securities that were classified as held-to-maturity.

Loans Held-for-Investment

5 unchanged sentences

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due.

Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions.

Loans are placed on non-accrual

status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions.

In determining whether or not a borrower may be unable to meet payment obligations for each class of loans, we consider the borrower’s debt service capacity through the analysis of current financial information, if available, and/or current information with regards to our collateral position.

Regulatory provisions would typically require the placement of a loan on nonaccrual status if principal or interest has been in default for a period of 90 days or more unless the loan is both well secured and in the process of collection or full payment of principal and interest is not expected.

Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due.

Regulatory provisions would typically require the placement of a loan on non-accrual

status if principal or interest has been in default for a period of 90 days or more unless the loan is both well secured and in the process of collection or full payment of principal and interest is not expected.

Loans may be placed on non-accrual

status regardless of whether or not such loans are considered past due.

When interest accrual is discontinued, all unpaid accrued interest is reversed.

Interest income on nonaccrual loans is recognized only to the extent that cash payments are received in excess of principal due.

Interest income on non-accrual

loans is recognized only to the extent that cash payments are received in excess of principal due.

A loan may be returned to accrual status when all the principal and interest amounts contractually due are brought current and future principal and interest amounts contractually due are reasonably assured.

Prior to the adoption of ASC 326, loans were reported as impaired when, based on then current information and events, it was probable we would be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments.

Impairment was evaluated in total for smaller-balance loans of a similar nature and on an individual loan basis for other loans.

Impairment was evaluated in total for smaller-balance loans of a similar nature and on an individual loan

basis for other loans.

If a loan was impaired, a specific valuation allowance was allocated, if necessary, so that the loan was reported net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment was expected solely from the collateral.

1 unchanged sentence

Impaired loans, or portions thereof, were charged off when deemed uncollectible.

Further information regarding our accounting policies related to past due loans, nonaccrual loans and troubled-debt restructurings is presented in Note 3.

Further information regarding our accounting policies related to past due loans, non-accrual

loans and troubled-debt restructurings is presented in Note 3.

Acquired Loans

7 unchanged sentences

The Company uses either a discounted cash flow or weighted average remaining life method to determine the required level of the allowance.

PCD loans that were classified as nonaccrual as of the acquisition date and are collateral dependent are assessed for allowance on an individual basis.

PCD loans that were classified as non-accrual

as of the acquisition date and are collateral dependent are assessed for allowance on an individual basis.

For PCD loans, an initial allowance is established on the acquisition date and combined with the fair value of the loan to arrive at acquisition date amortized cost.

23 unchanged sentences

(1) a collective quantified reserve that reflects the Company’s historical default and loss experience adjusted for expected economic conditions throughout a reasonable and supportable forecast period, including the Company’s expected prepayment and curtailment rates;

(2) collective qualitative factors that consider concentrations of the loan portfolio, expected changes to the economic forecasts, large relationships, early delinquencies, and factors related to credit administrations, including, among others, loan-to-value

(2) collective qualitative factors that consider concentrations of the loan portfolio, expected changes to the economic forecasts, notable changes in a loan segments economic environment, large relationships, early delinquencies, and factors related to credit administrations, including, among others, loan-to-value

ratios, borrowers’ risk rating and credit score migrations;

23 unchanged sentences

In such cases, the loans are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation.

Specific allocations of the allowance for credit losses are determined by analyzing the borrower’s ability to repay amounts owed, collateral deficiencies, the relative risk rating of the loan and economic conditions affecting the borrower’s industry, among other things.

allocations of the allowance for credit losses are determined by analyzing the borrower’s ability to repay amounts owed, collateral deficiencies, the relative risk rating of the loan and economic conditions affecting the borrower’s industry, among other things.

A loan is considered to be collateral dependent when, based upon management’s assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the sale of the collateral.

5 unchanged sentences

The various risks that may be considered in making Q-Factor

adjustments include, among other things, the impact of (i) changes in lending policies and procedures, including changes in underwriting standards and practices for collections, write-offs, and recoveries, (ii) actual and expected changes in national, regional, and local economic and business conditions and developments that affect the collectability of the loan pools, (iii) changes in the nature, volume and size of a loan or the loan pools and in the terms of the underlying loans, (iv) changes in the experience, ability, and depth of our lending management and staff, (v) changes in volume and severity of past due financial assets, the volume of nonaccrual assets, and the volume and severity of adversely classified or graded assets, (vi) changes in the quality of our credit review function, (vii) changes in the value of the underlying collateral for loans that are non-collateral

dependent, (viii) the existence, growth, and effect of any concentrations of credit and (ix) other factors such as the regulatory, legal and technological environments;

and events such as natural disasters or health pandemics.

assets, and the volume and severity of adversely classified or graded assets, (vi) changes in the quality of our credit review function, (vii) changes in the value of the underlying collateral for loans that are non-collateral

dependent, (viii) the existence, growth, and effect of any concentrations of credit and (ix) other factors such as the regulatory, legal and technological environments, competition, and events such as natural disasters or health pandemics.

Management believes it uses relevant information available to make determinations about the allowance and that it has established the existing allowance in accordance with GAAP.

1 unchanged sentence

While management uses available information to recognize expected losses, future additions to the allowance may be necessary based on changes in the loans comprising the portfolio, changes in the current and forecasted economic conditions, changes to the interest rate environment which may directly impact prepayment and curtailment rate assumptions, and changes in the financial condition of borrowers.

The adoption of the CECL standard did not result in a significant change to any other credit risk management and monitoring processes, including identification of past due or delinquent borrowers, nonaccrual practices, assessment of troubled debt restructurings or charge-off

practices, assessment of troubled debt restructurings or charge-off

Allowance for Credit Losses - Off-Balance-Sheet/Reserve

6 unchanged sentences

Adjustments to the allowance are reported in our income statement as a component of the provision for credit losses.

At March 31, 2021, 2020 and December 31, 2020, the Company’s reserve for unfunded commitments totaled $ 6,918,000 , $ 809,000 and $ 5,486,000 , respectively.

At June 30, 2021, 2020 and December 31, 2020, the Company’s reserve for unfunded commitments totaled $ 6,751,000 , $ 809,000 and $ 5,486,000 , respectively, which is reported in other liabilities.

Other Real Estate

12 unchanged sentences

Goodwill with an indefinite life is not amortized, but rather tested annually for impairment as of June 30 each year.

There was no impairment recorded for the three-months ended March 31, 2021 or 2020, respectively.

There was no impairment recorded for the three or six-months

ended June 30, 2021 or 2020, respectively.

Securities Sold Under Agreements To Repurchase

8 unchanged sentences

Unrealized net gains on the Company’s available-for-sale

securities (after applicable income taxes) totaling $ 117,009,000 , $ 123,576,000 and $ 170,395,000 at March 31, 2021 and 2020, and December 31, 2020, respectively, are included in accumulated other comprehensive earnings.

securities (after applicable income taxes) totaling $ 136,486,000 , $ 151,236,000 and $ 170,395,000 at June 30, 2021 and 2020, and December 31, 2020, respectively, are included in accumulated other comprehensive earnings.

The Company’s provision for income taxes is based on income before income taxes adjusted for permanent differences between financial reporting and taxable income.

3 unchanged sentences

The Company grants stock options for a fixed number of shares to employees with an exercise price equal to the fair value of the shares at the grant date.

The grant date fair value is amortized over the vesting period which generally is six years.

The grant date fair value is amortized over the shorter of the service period or vesting period which generally is six years.

The Company also grants restricted stock for a fixed number of shares.

6 unchanged sentences

The Company calculates dilutive EPS assuming all outstanding stock options to purchase common shares and unvested restricted stock shares have been exercised and/or vested at the beginning of the year (or the time of issuance, if later.) The dilutive effect of the outstanding options and restricted stock is reflected by application of the treasury stock method, whereby the proceeds from the exercised options and unearned compensation for both restricted stock and stock options are assumed to be used to purchase common shares at the average market price during the respective period.

There were no anti-dilutive shares for the three-months ended March 31, 2021 and 2020.

There were no anti-dilutive shares for the three or six-months

ended June 30, 2021.

There were 448,000 and 35,000 anti-dilutive shares for the three and six-months

ended June 30, 2020, respectively.

The following table reconciles the computation of basic EPS to diluted EPS:

(in thousands)

For the three-months ended March 31, 2021:

For the three-months ended June 30, 2021:

Net earnings per share, basic

2 unchanged sentences

(in thousands)

For the three-months ended March 31, 2020:

For the six-months

ended June 30, 2021:

Net earnings per share, basic

1 unchanged sentence

Net earnings per share, diluted

(in thousands)

For the three-months ended June 30, 2020:

Net earnings per share, basic

Effect of stock options and stock grants

Net earnings per share, diluted

(in thousands)

For the six-months

ended June 30, 2020:

Net earnings per share, basic

Effect of stock options and stock grants

Net earnings per share, diluted

Note 2 - Securities

2 unchanged sentences

securities are as follows (in thousands):

March 31, 2021

June 30, 2021

Holding Gains

Holding Losses

Securities available-for-sale:

4 unchanged sentences

Total securities available-for-sale

March 31, 2020

June 30, 2020

Holding Gains

Holding Losses

Securities available-for-sale:

6 unchanged sentences

December 31, 2020

Holding Gains

Holding Losses

Securities available-for-sale:

5 unchanged sentences

The Company did not hold any securities classified as held-to-maturity

at March 31, 2021, March 31, 2020, or December 31, 2020.

at June 30, 2021, June 30, 2020, or December 31, 2020.

The Company invests in mortgage-backed securities that have expected maturities that differ from their contractual maturities.

1 unchanged sentence

These securities include collateralized mortgage obligations (CMOs) and other asset backed securities.

The expected maturities of these securities at March 31, 2021 and 2020, and December 31, 2020, were computed by using scheduled amortization of balances and historical prepayment rates.

The expected maturities of these securities at June 30, 2021 and 2020, and December 31, 2020, were computed by using scheduled amortization of balances and historical prepayment rates.

The amortized cost and estimated fair value of available-for-sale

securities at March 31, 2021, by contractual and expected maturity, are shown below (in thousands):

Estimated Fair

securities at June 30, 2021, by contractual and expected maturity, are shown below (in thousands):

Due within one year

6 unchanged sentences

12 Months or Longer

March 31, 2021

June 30, 2021

Obligations of states and political subdivisions

4 unchanged sentences

12 Months or Longer

March 31, 2020

June 30, 2020

Treasury securities

Obligations of states and political subdivisions

1 unchanged sentence

Commercial mortgage-backed securities

Corporate bonds and other

Less than 12 Months

1 unchanged sentence

December 31, 2020

Obligations of state and

political subdivisions

Obligations of state and political subdivisions

Residential mortgage-backed securities

Commercial mortgage-backed securities

The number of investments in an unrealized loss position totaled 149 at March 31, 2021.

Any unrealized losses in the obligations of state and political subdivisions, residential and commercial mortgage-backed and asset-backed investment securities at March 31, 2021 and 2020, and December 31, 2020, are due to changes in interest rates and not credit-related events.

As such, no allowance for credit losses is required at March 31, 2021 and 2020, and December 31, 2020.

The number of investments in an unrealized loss position totaled 77 at June 30, 2021.

Any unrealized losses in the obligations of state and political subdivisions, residential and commercial mortgage-backed and asset-backed investment securities at June 30, 2021 and 2020, and December 31, 2020, are due to changes in interest rates and not credit-related events.

As such, no allowance for credit losses is required on these securities at June 30, 2021 and 2020, and December 31, 2020.

Unrealized losses on investment securities are expected to recover over time as these securities approach maturity.

Our mortgage related securities are backed by GNMA, FNMA and FHLMC or are collateralized by securities backed by these agencies.

At March 31, 2021, 77.27 % of our available-for-sale

At June 30, 2021, 76.39 % of our available-for-sale

securities that are obligations of states and political subdivisions were issued within the State of Texas, of which 53.09 % are guaranteed by the Texas Permanent School Fund.

At March 31, 2021, $ 3,103,077,000 of the Company’s securities were pledged as collateral for public or trust fund deposits, repurchase agreements, a borrowing line with the Federal Reserve Bank of Dallas and for other purposes required or permitted by law.

During the three-months ended March 31, 2021 and 2020, sales of investment securities that were classified as available-for-sale

At June 30, 2021, $ 3,222,472,000 of the Company’s securities were pledged as collateral for public or trust fund deposits, repurchase agreements, a borrowing line with the Federal Reserve Bank of Dallas and for other purposes required or permitted by law.

During the three-months ended June 30, 2021, there were calls of investment securities that were classified as available-for-sale.

During the three-months ended June 30, 2020, sales of investment securities that were classified as available-for-sale

totaled $ 157,521 ,000.

Gross realized gains from security calls and sales during the second quarters of 2021 and 2020 totaled $ 5,000 and $ 1,516,000 , respectively.

There were no gross realized losses from security calls and sales during the second quarter of 2021.

Gross realized losses from security calls and sales during the second quarter of 2020 totaled $ 4,000 .

During the six-months

ended June 30, 2021 and 2020, sales of investment securities that were classified as available-for-sale

totaled $ 10,631 ,000 and $ 252,958 ,000, respectively.

Gross realized gains from security sales during the first quarter of 2021 and 2020 totaled $ 808,000 and $ 2,062,000 , respectively.

There were no gross realized losses from security sales during the three-month periods ended March 31, 2021 and 2020, respectively.

Gross realized gains from security calls and sales during the six-month

periods ended June 30, 2021 and 2020 totaled $ 813,000 and $ 3,578,000 , respectively.

There were no gross realized losses from security calls and sales during the six-month

period ended June 30, 2021.

Gross realized losses from security calls and sales during the six-month

period ended June 30, 2020 totaled $ 4,000 .

The specific identification method was used to determine cost in order to compute the realized gains and losses.

2 unchanged sentences

In conjunction with the adoption of ASC 326, the Company expanded its four loan portfolios into ten portfolio segments.

For the periods ended March 31, 2021 and December 31, 2020, the following tables outline the Company’s loan portfolio by the ten portfolio segments where applicable.

For disclosures related to the period ended March 31, 2020, management has elected to maintain its previously disclosed loan segments.

For the periods ended June 30, 2021 and December 31, 2020, the following tables outline the Company’s loan portfolio by the ten portfolio segments where applicable.

For disclosures related to the period ended June 30, 2020, management has elected to maintain its previously disclosed loan segments.

Loans held-for-investment

6 unchanged sentences

Allowance for credit losses

Outstanding loan balances at March 31, 2021 and 2020, and December 31, 2020, are net of unearned income, including net deferred loan fees.

All disclosures for the C&I loan segment include PPP loan balances, net of deferred loan fees, as disclosed on the face of the balance sheet on page 4.

Outstanding loan balances at June 30, 2021 and 2020, and December 31, 2020, are net of unearned income, including net deferred loan fees.

Our subsidiary bank has established a line of credit with the Federal Home Loan Bank of Dallas (“FHLB”) to provide liquidity and meet pledging requirements for those customers eligible to have securities pledged to secure certain uninsured deposits.

At March 31, 2021, $ 3,252,192,000 in loans held by our bank subsidiary were subject to blanket liens as security for this line of credit.

At March 31, 2021, there was no balance outstanding under this line of credit.

The Company’s nonaccrual loans, loans still accruing and past due 90 days or more and restructured loans are as follows (in thousands):

At June 30, 2021, $ 3,311,924,000 in loans held by our bank subsidiary were subject to blanket liens as security for this line of credit.

At June 30, 2021, there was no balance outstanding under this line of credit.

The Company’s non-accrual

loans, loans still accruing and past due 90 days or more and restructured loans are as follows (in thousands):

Loans still accruing and past due 90 days or more

Troubled debt restructured loans still accruing*

Troubled debt restructured loans of $ 6,619,000

, $ 4,733,000

and $ 7,407,000

, whose interest collection, after considering economic and business conditions and collection efforts, is doubtful are included in nonaccrual loans at March 31, 2021 and 2020, and December 31, 2020, respectively.

Troubled debt restructured loans of $ 7,305,000 , $ 7,275,000 and $ 7,407,000 , whose interest collection, after considering economic and business conditions and collection efforts, is doubtful are included in non-accrual

loans at June 30, 2021 and 2020, and December 31, 2020, respectively.

The Company had $ 30,114,000 , $ 39,724,000 and $ 42,898,000 in non-accrual,

past due 90 days or more and still accruing, restructured loans and foreclosed assets at March 31, 2021 and 2020, and December 31, 2020, respectively.

loans at March 31, 2021 and 2020, and December 31, 2020, consisted of the following (in thousands):

past due 90 days or more and still accruing, restructured loans and foreclosed assets at June 30, 2021 and 2020, and December 31, 2020, respectively.

loans at June 30, 2021 and 2020, and December 31, 2020, consisted of the following (in thousands):

Total Commercial

3 unchanged sentences

Total Consumer

significant additional funds are committed to be advanced in connection with nonaccrual loans as of March 31, 2021.

Summary information on the allowance for credit losses for the three-months ended March 31, 2021 and 2020, are outlined by portfolio segment in the following tables (in thousands):

March 31, 2021

Construction &

No significant additional funds are committed to be advanced in connection with non-accrual

loans as of June 30, 2021.

Summary information on the allowance for credit losses for the three and six-months

ended June 30, 2021 and 2020, are outlined by portfolio segment in the following tables (in thousands):

Three-months ended June 30, 2021

Beginning balance

1 unchanged sentence

Ending balance

March 31, 2021 (continued)

Three-months ended June 30, 2021 (continued)

Beginning balance

1 unchanged sentence

Ending balance

March 31, 2020

ended June 30, 2021

Beginning balance

1 unchanged sentence

Ending balance

Additionally, the Company records a reserve for unfunded commitments in other liabilities which totaled $ 6,918,000 , $ 809,000 and $ 5,486,000 at March 31, 2021 and 2020, and December 31, 2020, respectively.

The reversal of provision for credit losses of $ 1,997,000

reported in the consolidated statement of earnings for the three-months ended March 31, 2021 is the aggregate reversal of provision of loan losses of $ 3,429,000

net of the provision for unfunded commitments of $ 1,432,000

ended June 30, 2021 (continued)

Beginning balance

Provision for loan losses

Ending balance

Three-months ended June 30, 2020

Beginning balance

Provision for loan losses

Ending balance

ended June 30, 2020

Beginning balance

Provision for loan losses

Ending balance

Additionally, the Company records a reserve for unfunded commitments in other liabilities which totaled $ 6,751,000 , $ 809,000 and $ 5,486,000 at June 30, 2021 and 2020, and December 31, 2020, respectively.

The reversal of provision for credit losses of $ 1,206 ,000 reported in the consolidated statement of earnings for the three-months ended June 30, 2021 is the aggregate reversal of provision of loan losses of $ 1,039 ,000 and the reversal of provision for unfunded commitments of $ 167 ,000.

The reversal of provision for credit losses of $ 3,203 ,000 reported in the consolidated statement of earnings for the six-months

ended June 30, 2021 is the aggregate reversal of provision of loan losses of $ 4,468 ,000 net of the provision for unfunded commitments of $ 1,265 ,000.

The Company’s loans that are individually evaluated for credit losses (both collateral and non-collateral

dependent) and their related allowances as of March 31, 2021 and December 31, 2020, are summarized in the following table by loan segment (in thousands):

March 31, 2021

dependent) and their related allowances as of June 30, 2021 and December 31, 2020, are summarized in the following table by loan segment (in thousands):

June 30, 2021

Dependent Loans

7 unchanged sentences

Credit Losses

on Collateral

Non-Collateral

18 unchanged sentences

Credit Losses

on Collateral

Non-Collateral

8 unchanged sentences

Total Consumer

The following table presents the recorded investment with respect to impaired loans, the associated allowance by the applicable portfolio segment and the unpaid contractual principal balance of the impaired loans at March 31, 2020, in accordance with the legacy “incurred loss” methodology disclosure requirements (in thousands):

March 31, 2020

The Company’s allowance for loans that are individually evaluated for credit losses and collectively evaluated for credit losses as of March 31, 2021 and December 31, 2020, are summarized in the following table by loan segment (in thousands). Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

March 31, 2021

The following table presents the recorded investment with respect to impaired loans, the associated allowance by the applicable portfolio segment and the unpaid contractual principal balance of the impaired loans at June 30, 2020, in accordance with the legacy “incurred loss” methodology disclosure requirements (in thousands):

June 30, 2020

The Company’s allowance for loans that are individually evaluated for credit losses and collectively evaluated for credit losses as of June 30, 2021 and December 31, 2020, are summarized in the following table by loan segment (in thousands).

Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

June 30, 2021

Loans individually evaluated for credit losses

Loans collectively

evaluated for credit losses

March 31, 2021 (continued)

Loans collectively evaluated for credit losses

June 30, 2021 (continued)

Loans individually evaluated for credit losses

1 unchanged sentence

December 31, 2020

Construction &

Loans individually evaluated for credit losses

3 unchanged sentences

Loans collectively evaluated for credit losses

The Company’s allowance for loans that are individually evaluated for credit losses and collectively evaluated for credit losses as of March 31, 2020, are summarized in the following table by loan segment in accordance with the legacy “incurred loss” methodology disclosure requirements (in thousands):

March 31, 2020

The Company’s allowance for loans that are individually evaluated for credit losses and collectively evaluated for credit losses as of June 30, 2020, are summarized in the following table by loan segment in accordance with the legacy “incurred loss” methodology disclosure requirements (in thousands):

June 30, 2020

Loans individually evaluated for impairment

Loan collectively evaluated for impairment

The Company’s recorded investment in loans as of March 31, 2021 and December 31, 2020, related to the balance in the allowance for credit losses on the basis of the Company’s adopted ASC 326 evaluation methodology follows below (in thousands):

March 31, 2021

Construction &

The Company’s recorded investment in loans as of June 30, 2021 and December 31, 2020, related to the balance in the allowance for credit losses on the basis of the Company’s adopted ASC 326 evaluation methodology follows below (in thousands):

June 30, 2021

Loans individually evaluated for credit losses

Loans collectively evaluated for credit losses

March 31, 2021 (continued)

June 30, 2021 (continued)

Loans individually evaluated for credit losses

1 unchanged sentence

December 31, 2020

Construction &

Loans individually evaluated for credit losses

3 unchanged sentences

Loans collectively evaluated for credit losses

The Company’s recorded investment in loans as of March 31, 2020, related to the balance in the allowance for loan losses on the basis of the Company’s legacy “incurred loss” impairment methodology follows below (in thousands):

March 31, 2020

The Company’s recorded investment in loans as of June 30, 2020, related to the balance in the allowance for loan losses on the basis of the Company’s legacy “incurred loss” impairment methodology follows below (in thousands):

June 30, 2020

Loans individually evaluated for impairment

15 unchanged sentences

Based upon available information, positive action by the Company is required to avert or minimize loss.

Credits rated doubtful are generally also placed on nonaccrual.

Credits rated doubtful are generally also placed on non-accrual.

The following summarizes the Company’s internal ratings of its loans held-for-investment,

including the year of origination, by portfolio segments, at March 31, 2021 (in millions):

including the year of origination, by portfolio segments, at June 30, 2021 (in millions):

Special mention

27 unchanged sentences

The following tables summarize the Company’s internal ratings of its loans held-for-investment,

at March 31, 2020 (in million):

March 31, 2020

at June 30, 2020 (in millions):

June 30, 2020

The Company’s past due loans are as follows (in thousands):

March 31, 2021

June 30, 2021

Total Commercial

9 unchanged sentences

Total Consumer

March 31, 2020

June 30, 2020

The Company monitors commercial, agricultural and real estate loans after such loans are 15 days past due.

3 unchanged sentences

The Company’s loans that were modified and considered troubled debt restructurings are as follows (in thousands):

Three-Months Ended March 31, 2021

Pre-Modification

Three-Months Ended June 30, 2021

Ended June 30, 2021

Total Commercial

3 unchanged sentences

Total Consumer

Three-Months Ended March 31, 2020

Pre-Modification

Three-Months Ended June 30, 2020

Ended June 30, 2020

The balances below provide information as to how the loans were modified as troubled debt restructured loans (in thousands):

Three-Months Ended March 31, 2021

Three-Months Ended June 30, 2021

Ended June 30, 2021

Total Commercial

3 unchanged sentences

Total Consumer

Three-Months Ended March 31, 2020

During the three-months ended March 31, 2021 and 2020, no loans were modified as a troubled debt restructured loan within the previous 12 months and for which there was a payment default.

Three-Months Ended June 30, 2020

Ended June 30, 2020

During the three and six-months

ended June 30, 2021 and 2020, no loans were modified as a troubled debt restructured loan within the previous 12 months and for which there was a payment default.

A default for purposes of this disclosure is a troubled debt restructured loan in which the borrower is 90 days past due or more or results in the foreclosure and repossession of the applicable collateral.

As of March 31, 2021, the Company has no

commitments to lend additional funds to loan customers whose terms have been modified in troubled debt restructurings.

As of June 30, 2021, the Company has no commitments to lend additional funds to loan customers whose terms have been modified in troubled debt restructurings.

Note 4 - Loans Held-for-Sale

Loans held-for-sale

totaled $ 65,405 ,000, $ 42,034 ,000 and $ 83,969 ,000 at March 31, 2021 and 2020, and December 31, 2020, respectively.

At March 31, 2021 and 2020, and December 31, 2020, $ 3,894,000 , $ 2,375,000 and $ 4,384,000 are valued at the lower of cost or fair value, and the remaining amounts are valued under the fair value option.

totaled $ 61,802 ,000, $ 66,370 ,000 and $ 83,969 ,000 at June 30, 2021 and 2020, and December 31, 2020, respectively.

At June 30, 2021 and 2020, and December 31, 2020, $ 5,545,000 , $ 3,077,000 and $ 4,384,000 are valued at the lower of cost or fair value, and the remaining amounts are valued under the fair value option.

These loans, which are sold on a servicing released basis, are valued using a market approach by utilizing either:

22 unchanged sentences

The following table provides the outstanding notional balances and fair values of outstanding derivative positions (in thousands):

March 31, 2021:

June 30, 2021:

Forward mortgage-backed securities trades

March 31, 2020:

June 30, 2020:

Forward mortgage-backed securities trades

11 unchanged sentences

provisions and therefore the Company does not offset such agreements for financial reporting purposes.

The Company renewed its loan agreement, effective June 30, 2021 , with Frost Bank.

Under the loan agreement, as renewed and amended, we are permitted to draw up to $ 25,000,000 on a revolving line of credit.

There was no outstanding balance under the line of credit as of June 30, 2021 and 2020, or December 31, 2020.

Note 7 - Income Taxes

Income tax expense was $ 11,054 ,000 for the first quarter of 2021 as compared to $ 7,234 ,000 for the same period in 2020.

The Company’s effective tax rates on pretax income were 16.26 % and 16.27 % for the first quarters of 2021 and 2020, respectively.

Income tax expense was $ 11,075 ,000 for the second quarter of 2021 as compared to $ 10,663 ,000 for the same period in 2020.

The Company’s effective tax rates on pretax income were 16.42 % and 16.63 % for the second quarters of 2021 and 2020, respectively.

Income tax expense was $ 22,129 ,000 for the six months ended June 30, 2021 as compared to 17,898,000 for the same period in 2020.

The Company’s effective tax rates on pretax income were 16.34 % and 16.48 % for the six-months

ended June 30, 2021 and 2020, respectively.

The effective tax rates differ from the statutory federal tax rate of 21 % primarily due to tax exempt interest income earned on certain investment securities and loans, the deductibility of dividends paid to our employee stock ownership plan and excess tax benefits related to our directors’ deferred compensation plan.

Note 8 - Stock Option Plan and Restricted Stock Plan

Omnibus Stock and Incentive Plan

On April 27, 2021, the Company’s shareholders approved a new 2021 Omnibus Stock and Incentive Plan (“2021 Plan”) and reserved 2,500,000 shares of the Company’s common stock for issuance under this plan.

At June 30, 2021, the Company had 2,487,890 shares of stock remaining for issuance under the plan.

The 2021 Plan supersedes all prior stock option and restricted stock plans with previously reserved shares cancelled.

Stock Option Plans

The Company has two incentive stock plans previously approved by the Company’s shareholders to provide for the granting of options to employees of the Company at prices not less than market value at the date of grant.

At March 31, 2021, the Company had reserved 3,559,402 shares of stock for issuance under the plan.

The option plan provides that options granted vest and are exercisable after two years from the date of grant and vest at a rate of 20 % each year and have a 10 -year

Shares are issued under the stock option plan from available authorized shares.

An analysis of stock option activity for the quarter-ended March 31, 2021 is presented in the table and narrative below:

Prior to the approval of the 2021 Plan, the 2012 Incentive Stock Option Plan (the “2012 Plan”) provided for the granting of options to employees of the Company at prices not less than market value at the date of grant.

On April 27, 2021, the 2012 Plan was superseded by the new 2021 Plan and all previous reserved shares were cancelled and the 2021 Plan reserved 2,500,000 shares for future issuances.

The 2012 Plan provided that options granted vest and are exercisable after two years from the date of grant and vest at a rate of 20 % each year thereafter and have a 10 -year

Shares are issued under the 2012 Plan and the 2021 Plan from available authorized shares.

An analysis of stock option activity for the six-months

ended June 30, 2021 is presented in the table and narrative below:

Outstanding, December 31, 2020

Outstanding, March 31, 2021

Exercisable, March 31, 2021

The options outstanding at March 31, 2021 had exercise prices ranging between $ 7.87 and $ 34.55 .

Outstanding, June 30, 2021

Exercisable, June 30, 2021

The options outstanding at June 30, 2021 had exercise prices ranging between $ 7.87 and $ 34.55 .

Stock options have been adjusted retroactively for the effects of stock dividends and splits.

The Company grants incentive stock options for a fixed number of shares with an exercise price equal to the fair value of the shares at the date of grant to employees.

On January 28, 2020, the Company granted 11,250 incentive stock options with an exercise price of $ 34.55 per share.

The Company recorded stock option expense totaling $ 319,000 and $ 340,000 for the three-month periods ended March 31, 2021 and 2020, respectively.

As of March 31, 2021, there was $ 3,753,000 of total unrecognized compensation cost related to unvested share-based compensation arrangements related to stock options granted under the Company’s stock option plans.

The Company recorded stock option expense totaling $ 372,000 and $ 349,000 for the three-month periods ended June 30, 2021 and 2020, respectively.

The Company recorded stock option expense totaling $ 691,000 and $ 689,000 for the six months ended June 30, 2021 and 2020, respectively.

As of June 30, 2021, there was $ 3,374,000 of total unrecognized compensation cost related to unvested share-based compensation arrangements related to stock options granted under the Company’s stock option plans.

That cost is expected to be recognized over a weighted-average period of 1.69 years.

The total fair value of shares vested during the three-months ended March 31, 2021 and 2020 was $ 31,000 and $ 119,000 , respectively.

The total fair value of shares vested during the six-months

ended June 30, 2021 and 2020 was $ 1,246,000 and $ 791,000 , respectively.

Restricted Stock Plan

On April 28, 2015, shareholders of the Company approved a restricted stock plan for selected employees, officers, non-employee

On April 28, 2015, shareholders of the Company approved the 2015 Restricted Stock Plan (the “2015 Plan”) for selected employees, officers, non-employee

directors and consultants.

At March 31, 2021, the Company had allocated 633,003 shares of stock for issuance under the plan.

The following table summarized information about vested and unvested restricted stock outstanding at March 31, 2021 and 2020, respectively.

For the three-months ended March 31,

On April 27, 2021, the 2015 Plan was superseded by the new 2021 Plan and all previous reserved shares were cancelled.

The following table summarizes information about vested and unvested restricted stock.

For the six-months

ended June 30,

Balance at beginning of period

1 unchanged sentence

Balance at end of period

The total fair value of restricted stock vested was $ 39,000 for the three-months ended March 31, 2021.

restricted stock vested during the three-months ended March 31, 2020.

The Company recorded restricted stock expense for employees of $ 290,000 and $ 275,000 , respectively, for the three-months ended March 31, 2021 and 2020, respectively.

The Company recorded director expense related to these restricted stock grants of $ 150,000 and $ 175,000 for the three-months ended March 31, 2021 and 2020, respectively.

As of March 31, 2021, and 2020, there were $ 1,701,000 and $ 2,118,000 , respectively, of total unrecognized compensation cost related to unvested restricted stock which is expected to be recognized over a weighted-average period of 1.44 years and 1.43 years, respectively.

At March 31, 2021 and 2020, and December 31, 2020, there was $ 61,000 , $ 41,000 and $ 49,000 , respectively, accrued in other liabilities related to dividends declared to be paid upon vesting.

On April 28, 2021, the Company approved a new 2021 Omnibus Stock and Incentive Plan and registered and reserved 2,500,000 shares of the Company’s common stock for issuance under this plan.

This plan supersedes all prior stock option and restricted stock plans with previously reserved shares cancelled.

The total fair value of restricted stock vested for the six-months

ended June 30, 2021 and 2020, was $ 883,000 and $ 918,000 , respectively.

The Company recorded restricted stock expense for employees of $ 289,000 and $ 322,000 , respectively, for the three-months ended June 30, 2021 and 2020, respectively.

The Company recorded restricted stock expense for employees of $ 579,000 and $ 597,000 for the six-month

periods ended June 30, 2021 and 2020, respectively.

The Company recorded director expense related to these restricted stock grants of $ 150,000 and $ 160,000 for the three-months ended June 30, 2021 and 2020, respectively.

The Company recorded director expense related to these restricted stock grants of $ 300,000 and $ 335,000 for the six-months

ended June 30, 2021 and 2020, respectively.

As of June 30, 2021, and 2020, there were $ 1,845,000 and $ 2,441,000 , respectively, of total unrecognized compensation cost related to unvested restricted stock which is expected to be recognized over a weighted-average period of 1.33 years and 1.76 years, respectively.

At June 30, 2021 and 2020, and December 31, 2020, there was $ 59,000 , $ 55,000 and $ 49,000 , respectively, accrued in other liabilities related to dividends declared to be paid upon vesting.

Note 9 - Fair Value Disclosures

11 unchanged sentences

Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability.

Inputs may be observable, meaning those

that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

In that regard, the authoritative guidance establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

15 unchanged sentences

IRLCs and forward mortgage-backed securities trades.

There were no transfers between Level 2 and Level 3 during the three-months ended March 31, 2021 and 2020, and the year ended December 31, 2020.

There were no transfers between Level 2 and Level 3 during the three and six-months

ended June 30, 2021 and 2020, and the year ended December 31, 2020.

The following table summarizes the Company’s available-for-sale

1 unchanged sentence

and derivatives which are measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands):

March 31, 2021

Available-for-sale

6 unchanged sentences

Loans held-for-sale

Forward mortgage-backed securities trades asset

March 31, 2020

Forward mortgage-backed securities trades liability

Available-for-sale

2 unchanged sentences

Obligations of states and political subdivisions

Corporate bonds

Residential mortgage-backed securities

3 unchanged sentences

Forward mortgage-backed securities trades liability

December 31, 2020

Available-for-sale

12 unchanged sentences

at fair value

The following table summarizes the Company’s gains on sale and fees of mortgage loans for the three-months ended March 31, 2021 and 2020 (in thousand):

The following table summarizes the Company’s gains on sale and fees of mortgage loans for the three and six-months ended June 30, 2021 and 2020 (in thousand):

Three-Months ended

6 unchanged sentences

No residential mortgage loans held-for-sale

were 90 days or more past due or considered impaired as of March 31, 2021 or 2020, or December 31, 2020.

were 90 days or more past due or considered impaired as of June 30, 2021 or 2020, or December 31, 2020.

No significant credit losses were recognized on residential mortgage loans held-for-sale

for the three-months ended March 31, 2021 and 2020.

for the three or six-months

ended June 30, 2021 and 2020.

Certain non-financial

4 unchanged sentences

assets measured at fair value on a non-recurring

basis during the three-months ended March 31, 2021 and 2020 include other real estate owned which, subsequent to their initial transfer to other real estate owned from loans, were re-measured

basis during the three and six-months

ended June 30, 2021 and 2020 include other real estate owned which, subsequent to their initial transfer to other real estate owned from loans, were re-measured

at fair value through a write-down included in gain (loss) on sale of foreclosed assets.

5 unchanged sentences

There were no other real estate owned properties that were re-measured

subsequent to their initial transfer to other real estate owned during the three-months ended March 31, 2021 and 2020.

At March 31, 2021 and 2020, and December 31, 2020, other real estate owned totaled $ 255,000 , $ 982,000 and $ 119,000 , respectively.

subsequent to their initial transfer to other real estate owned during the three and six-months

ended June 30, 2021 and 2020.

At June 30, 2021 and 2020, and December 31, 2020, other real estate owned totaled $ 283,000 , $ 202,000 and $ 119,000 , respectively.

The Company is required under current authoritative accounting guidance to disclose the estimated fair value of their financial instrument assets and liabilities including those subject to the requirements discussed above.

16 unchanged sentences

Available-for-sale

Levels 1 and 2

Loans held-for-investment,

5 unchanged sentences

Accrued interest payable

Forward mortgage-backed securi-ties trades asset (liability)

Forward mortgage-backed securities trades liability

Note 10 – Acquisition

29 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