14 unchanged sentences
Since then the Bank has opened full-service branches in
−Removed: Linden, Manteca, Riverbank, Modesto, Sacramento, Elk Grove, Turlock, Hilmar, Stockton, Merced, Walnut Creek, Concord, Walnut Grove, Oakland and Napa.
−Removed: As a legal entity separate and distinct from its subsidiary, the Company’s principal source of
−Removed: funds is, and will continue to be, dividends paid by and other funds received from the Bank.
+Added: Linden, Manteca, Riverbank, Modesto, Sacramento, Elk Grove, Turlock, Hilmar, Stockton, Merced, Walnut Creek, Concord, Walnut Grove, Oakland, Napa, and Danville.
+Added: As a legal entity separate and distinct from its subsidiary, the Company’s principal
+Added: source of funds is, and will continue to be, dividends paid by and other funds received from the Bank.
Legal limitations are imposed on the amount of dividends that may be paid and loans that may be made by the Bank to the Company.
8 unchanged sentences
However, trades are reported on the OTCQX under the symbol “FMCB.”
−Removed: The primary source of funding for the Company’s growth has been the generation of core deposits, which the Company raises through its existing branch locations, newly opened branch locations, or through
−Removed: acquisitions.
+Added: The primary source of funding for the Company’s growth has been the generation of deposits, which the Company raises through its existing branch locations, newly opened branch locations, or through acquisitions.
Loan growth over the years is the result of organic growth generated by the Company’s seasoned relationship managers and supporting associates who provide outstanding service and responsiveness to the Company’s clients.
16 unchanged sentences
Management’s Discussion and Analysis of Financial
−Removed: Condition and Results of Operations” and “Item 8, Financial Statement and Supplementary Data.”
+Added: Condition and Results of Operations” and “Item 8, Financial Statements and Supplementary Data.”
Years Ended December 31
46 unchanged sentences
(1) See “Non-GAAP Measurements”.
−Removed: Summary of Critical Accounting Policies and Estimates
−Removed: In the opinion of management, the accompanying Consolidated Statements of Financial Condition and related Consolidated Statements of Income, Comprehensive Income, Changes in Shareholders’ Equity and Cash Flows
−Removed: reflect all adjustments (which include reclassification and normal recurring adjustments) that are necessary for a fair presentation in conformity with GAAP.
−Removed: The preparation of financial statements in conformity with GAAP requires management to
−Removed: make estimates and assumptions that affect amounts reported in the financial statements.
−Removed: Various elements of our accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments.
−Removed: In particular, management has identified
−Removed: certain accounting policies that, due to the judgments, estimates and assumptions inherent in those policies, are critical to an understanding of our financial statements.
−Removed: Management believes the judgments, estimates and assumptions used in the
−Removed: preparation of the financial statements are appropriate based on the factual circumstances at the time.
−Removed: However, given the sensitivity of the financial statements to these critical accounting policies, the use of other judgments, estimates and
−Removed: assumptions could result in material differences in our results of operations or financial condition.
−Removed: Further, subsequent changes in economic or market conditions could have a material impact on these estimates and our financial condition and
−Removed: operating results in future periods.
−Removed: For additional information concerning critical accounting policies, see Note 1 located in Item 8:
−Removed: “Financial Statements and Supplementary Data” in this Form 10-K and the following:
−Removed: Use of Estimates — The preparation of our financial statements requires management to make estimates and judgments that affect the reported amount of
−Removed: assets, liabilities, revenues and expenses.
−Removed: On an ongoing basis, management evaluates the estimates used.
−Removed: Estimates are based upon historical experience, current economic conditions and other factors that management considers reasonable under the
−Removed: circumstances and the actual results may differ from these estimates under different assumptions.
−Removed: The allowance for credit losses, deferred income taxes, and fair values of financial instruments are estimates, which are particularly subject to
−Removed: Allowance for Credit Losses — The Company recognizes there is risk of credit losses with financial instruments, such as loans and unfunded loan
−Removed: commitments, where the Company advances funds to a counterparty.
−Removed: The risk of credit losses varies with, among other things, the type of financial instrument, the creditworthiness and cash flows of the counterparty, any guarantees from government
−Removed: agencies, and the collateral, if any, used to secure the financial instrument.
−Removed: The Company maintains an allowance for credit losses on loans and unfunded commitments held in accordance with GAAP.
−Removed: The allowance for credit losses represents our
−Removed: estimate of current expected credit losses inherent in our existing loan portfolio.
−Removed: The allowance for credit losses is increased by charging a provision for credit losses against income and reduced by charge-offs, net of recoveries.
−Removed: Under the guidance of Financial Accounting Standards Board Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“CECL”), we
−Removed: evaluate our allowance for credit losses quarterly based on a number of quantitative and qualitative factors.
−Removed: Allowance for credit losses is provided on both a specific and general basis.
−Removed: Specific allowances are provided for impaired credits for
−Removed: which the expected/anticipated loss is measurable.
−Removed: General valuation allowances are based on a portfolio segmentation based on risk grading, with a further evaluation of various quantitative and qualitative factors.
−Removed: The Company uses the Weighted Average Remaining Maturity (“WARM”) method to calculate the ACL, as this method is deemed the most appropriate given the Company’s current size and complexity.
−Removed: The Company begins its
−Removed: determination of credit losses by evaluating historical credit loss experience by loan segment.
−Removed: The Company analyzes historical credit loss criteria over a fifteen-year history for both the Company’s loss history and its peers.
−Removed: Due to a growth
−Removed: cycle that has expanded the Company’s geographical service area and product mix as it has expanded into the San Francisco Bay Area, the Company’s peer group losses have been determined to better align with the Company’s loss profile in loans
−Removed: related to commercial, industrial, and personal segments.
−Removed: However, given the low concentration in agricultural industry related loans in the peer group, the Company’s own loss history in agricultural loans is more suitable.
−Removed: These loss factors are
−Removed: analyzed in conjunction with weighted average duration calculations in order to assess the loss factors over the life of the loan segment.
−Removed: Historical loss information may be adjusted based on specific risk characteristics by loan segment.
−Removed: Such risk characteristics may include, but are not necessarily limited to, changes in lending policies and
−Removed: procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses;
−Removed: changes in national and local economic conditions and forecasts;
−Removed: changes in the
−Removed: nature and volume of the loans and in the terms of such instruments;
−Removed: changes in the experience, ability, and depth of lending management and other relevant staff;
−Removed: changes in the volume and severity of past due status, the volume of non-accrual
−Removed: loans, and the volume and severity of adversely classified or graded loans;
−Removed: changes in the quality of the institution’s loan review system;
−Removed: changes in the value of underlying collateral for collateral-dependent loans;
−Removed: the existence and effect of
−Removed: any concentrations of credit, and changes in the level of such concentrations;
−Removed: and the effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses.
−Removed: While the Company utilizes a systematic methodology in determining its allowance, the allowance is based on estimates, and ultimate losses may vary from current estimates.
−Removed: The estimates are reviewed periodically
−Removed: and, as adjustments become necessary, are reported in earnings in the periods in which they become known.
−Removed: For additional information, see Note 4, located in Item 8.
+Added: Critical Accounting Policies and Estimates
+Added: The following discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements and the notes thereto, which have been prepared in accordance with U.S.
+Added: The preparation of the consolidated financial statements requires us to make a number of estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements.
+Added: On an ongoing basis, we evaluate
+Added: our estimates and assumptions based upon historical experience and various other factors and circumstances.
+Added: We believe that our estimates and assumptions are reasonable;
+Added: however, actual results may ultimately differ significantly from these
+Added: estimates and assumptions, which could have a material adverse effect on the carrying value of assets and liabilities at the balance sheet dates and on our results of operations for the reporting periods.
+Added: Our significant accounting policies and practices are described in Note 1 “Summary of Significant Accounting Policies”, located in Item 8:
“Financial Statements and Supplementary Data” in this Form 10-K.
−Removed: The allowance for credit losses on unfunded loan commitments is classified in other liabilities on the Consolidated Statements of Financial Condition.
−Removed: The Company analyzes the unfunded loan commitments utilizing
−Removed: historical utilization rates from the prior 12 months to predict losses.
−Removed: The allowance for credit losses on unfunded loan commitments is increased by charging the provision for credit losses.
−Removed: The provision for credit-losses – unfunded loan
−Removed: commitments was recognized in non-interest expense in 2022.
−Removed: We believe that our allowance for credit losses was adequate to absorb probable losses inherent in the loan and lease portfolio as of December 31, 2023 and 2022.
−Removed: Investment Securities — Investment securities are classified as held-to-maturity (“HTM”) when the Company has the positive intent and ability to hold the
−Removed: securities to maturity.
−Removed: Investment securities are classified as available-for-sale (“AFS”) when the Company has the intent of holding the security for an indefinite period of time, but not necessarily to maturity.
−Removed: The Company determines the
−Removed: appropriate classification at the time of purchase, and periodically thereafter.
−Removed: Investment securities classified at HTM are carried at amortized cost.
−Removed: Investment securities classified as AFS are reported at fair value.
−Removed: Purchase premiums and
−Removed: discounts are recognized in interest income using the interest method over the terms of the securities.
−Removed: Debt securities classified as HTM are carried at cost, net of the allowance for credit losses - securities, adjusted for amortization of
−Removed: premiums and discounts to the earliest callable date.
−Removed: Debt securities classified as AFS are measured at fair value.
−Removed: Unrealized holding gains and losses on debt securities classified as AFS are excluded from earnings and are reported net of tax as
−Removed: accumulated other comprehensive income (“AOCI”), a component of shareholders’ equity, until realized.
−Removed: When AFS securities, specifically identified, are sold, the unrealized gain or loss is reclassified from AOCI to non-interest income.
−Removed: Management measures expected credit losses on HTM debt securities on a collective basis by major security type.
−Removed: The Company’s HTM portfolio contains securities issued by U.S.
−Removed: government entities and agencies and
−Removed: municipalities.
−Removed: The Company uses industry historical credit loss information adjusted for current conditions to establish the allowance for credit losses on its HTM municipal bond portfolio.
−Removed: For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or is more likely than not that it will be required to sell, the security before recovery of its
−Removed: amortized cost basis.
−Removed: If the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security, before recovering its cost basis, the entire impairment loss would be recognized in earnings.
−Removed: If the Company does not intend to sell the security, and it is not more likely than not that the Company will be required to sell the security, the Company evaluates whether the decline in fair value has resulted from credit losses or other
−Removed: In making this assessment, management considers the extent to which fair value is less than amortized costs, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among
−Removed: other factors.
−Removed: If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security.
−Removed: Projected cash flows are discounted by the
−Removed: current effective interest rate.
−Removed: If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount
−Removed: that the fair value is less than the amortized cost basis.
−Removed: The remaining impairment related to all other factors, the difference between the present value of the cash flows expected to be collected and fair value, is recognized as a charge to
−Removed: Changes in the allowance for credit losses-securities are recorded as provision for (or reversal of) credit losses.
−Removed: Losses are charged against the allowance when management believes the non-collectability of an AFS
−Removed: security is confirmed or when either criteria regarding intent or requirement to sell is met.
−Removed: At December 31, 2023, the Company had no investment securities that were impaired.
−Removed: Fair Value Measurements — The Company discloses the fair value of financial instruments and the methods and significant assumptions used to estimate those
−Removed: The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies.
−Removed: The use of assumptions and various valuation techniques, as well as the absence of
−Removed: secondary markets for certain financial instruments, will likely reduce the comparability of fair value disclosures between financial institutions.
−Removed: In some cases, book value is a reasonable estimate of fair value due to the relatively short
−Removed: period between origination of the instrument and its expected realization.
−Removed: For additional information, see Item 7A.
−Removed: “Quantitative and Qualitative Disclosures about Market Risk” and Note 11 located in Item 8.
−Removed: “Financial Statements and
−Removed: Supplementary Data” in this Form 10-K.
−Removed: Income Taxes — Income taxes are filed on a consolidated basis with our subsidiaries and we allocate income tax expense (benefit) based on each entity’s
−Removed: proportionate share of the consolidated provision for income taxes.
−Removed: Deferred income tax assets and liabilities are recognized for the tax consequences of temporary differences between the reported amounts of assets and liabilities and their
−Removed: respective tax bases.
−Removed: Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
−Removed: The determination of the amount of deferred income tax assets that are more likely than not
−Removed: to be realized is primarily dependent on projections of future earnings, which are subject to uncertainty and estimates that may change given economic conditions and other factors.
−Removed: The realization of deferred income tax assets is assessed and a
−Removed: valuation allowance is recorded if it is “more likely than not” that all or a portion of the deferred income tax asset will not be realized.
−Removed: “More likely than not” is defined as greater than a 50% probability.
−Removed: All available evidence, both
−Removed: positive and negative, is considered to determine whether, based on the weight of that evidence, a valuation allowance is needed.
−Removed: Only tax positions that meet the “more likely than not” recognition threshold are recognized.
−Removed: The benefit of a tax position is recognized in the financial statements in the period during which, based on all
−Removed: available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any.
−Removed: Tax positions taken are not offset or aggregated with
−Removed: other positions.
−Removed: Tax positions that meet the “more likely than not” recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing
−Removed: The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated statements of financial
−Removed: condition along with any associated interest and penalties that would be payable to the taxing authorities upon examination.
−Removed: Interest expense and penalties associated with unrecognized tax benefits are classified as income tax expense in the
−Removed: consolidated statements of income.
+Added: identified one policy and estimate as being critical because it requires management to make particularly difficult, subjective, and/or complex judgments about matters that are inherently uncertain and because of the likelihood that materially
+Added: different amounts would be reported under different conditions or using different assumptions.
+Added: This policy relates to the allowance for credit losses on loans and leases held for investment.
+Added: Allowance for Credit Losses on Loans and Leases Held for Investment — The allowance for credit losses (“ACL”) on loans and leases represents management’s
+Added: estimate of all expected credit losses over the expected life of the loan portfolio, utilizing the current expected credit loss (“CECL”) accounting standard as prescribed under GAAP.
+Added: The ACL is a valuation account that is deducted from the
+Added: amortized cost basis of loans to present the net amount expected to be collected on the loans.
+Added: The provision for credit losses reflects the amount required to maintain the ACL at an appropriate level based upon management’s evaluation of the
+Added: adequacy of the current expected credit losses.
+Added: The Company increases its ACL by charging provisions for credit losses on its consolidated statement of income.
+Added: Losses related to specific assets are applied as a reduction of the carrying value of
+Added: the assets and charged against the ACL when management believes a loan balance is uncollectable.
+Added: Recoveries on previously charged off loans are credited to the ACL.
+Added: Determining the appropriateness of the ACL is complex and requires judgment by
+Added: management about inherently uncertain factors.
+Added: Management utilizes the weighted average remaining maturity (“WARM”) methodology given its size and level of complexity.
+Added: Under the WARM methodology, lifetime losses are calculated by determining the remaining life
+Added: of the loan pool, and then applying a loss rate over the remaining life of the loan pool.
+Added: The methodology considers historical loss experience to estimate credit losses for the remaining balance of the loan pool.
+Added: The calculated loss rate is
+Added: applied to the contractual term (adjusted for prepayments) to determine the loan pool’s current expected credit losses.
+Added: Among the significant estimates required to establish the ACL are:
+Added: (i) a weighted average loss estimate categorized by loan
+Added: segmentation;
+Added: (ii) average duration calculations in order to assess the loss factors over the life of the loan segment;
+Added: (iii) application of a reasonable and supportable forecast based on macro- and micro-economic factors expected to influence
+Added: (iv) value of collateral and strength of borrowers;
+Added: and (v) the determination of the qualitative loss factors.
+Added: All of these estimates are susceptible to significant change.
+Added: Qualitative factors are evaluated each period and applied in instances when management assesses that additional risks not captured in the quantitative estimate should be factored into the overall ACL estimate.
+Added: These risks include loan performance trends, collateral value risk and changes in the nature and volume of the loan portfolio.
+Added: Changes in the assessment of these qualitative factors could significantly impact the calculated estimated credit loss.
+Added: The ACL represents management’s best estimate of potential loan losses, but significant changes in prevailing economic conditions could result in material changes in the allowance.
+Added: Generally, an improving economic
+Added: environment generates a lower ACL estimate than a weakening economic environment.
+Added: Changes in the macro-economic and micro-economic conditions, especially those impacting the agricultural industry in California, could significantly impact the
+Added: calculated estimated credit loss.
+Added: Changes in economic conditions and/or interest rates can also impact the duration assumption.
+Added: An increase in the duration of loans would increase the allowance while a decrease in the duration would decrease the
+Added: The economic information utilized in the ACL process is inherently uncertain and many external factors could impact the information.
+Added: Management reviews the inputs to the WARM model to ensure they are reasonable and supportable;
+Added: however, changes in local and national economic conditions will impact the allowance level.
+Added: While management utilizes its best judgment and current information available, the adequacy of the ACL is significantly determined by certain factors
+Added: outside the Company’s control, such as the performance of our loan portfolio, changes in the economic environment including economic uncertainty, changes in interest rates, and any regulatory changes.
+Added: Additionally, the level of ACL may fluctuate
+Added: based on the balance and mix of the loan portfolio.
+Added: See Note 1 “Summary of Significant Accounting Policies”, located in Item 8.
+Added: “Financial Statements and Supplementary Data”, of this Form 10-K for a detailed discussion of the Company’s allowance
+Added: for credit losses.
Impact of Recently Issued Accounting Standards
72 unchanged sentences
(Dollars in thousands)
+Added: Average Balance
+Added: Interest Income / Expense
+Added: Average Yield /
+Added: Average Balance
+Added: Interest Income / Expense
+Added: Average Yield /
Interest earnings deposits in other banks and federal funds sold
33 unchanged sentences
Excludes average unrealized losses of ($19.5) million and ($25.8) million for the years ended December 31, 2024, and 2023, respectively, which are included in non-interest earning assets.
−Removed: Yields and interest income are calculated on a fully taxable equivalent basis using the current statutory federal tax rate.
+Added: Yields and interest income are calculated on a fully taxable equivalent basis using the current statutory federal tax rate of 21%.
Loan interest income includes loan fees of $5.6 million and $6.1 million for the years ended December 31, 2024 and 2023, respectively.
4 unchanged sentences
The increase was primarily the result of the Federal
−Removed: Reserve increasing rates by 425 basis points from March 2022 to December 2022 and 100 basis points from February 2023 to July 2023.
−Removed: Average interest-bearing deposits with banks was $519.3 million and $704.1
−Removed: million for the years ended December 31, 2023 and 2022, respectively and decreased primarily to fund loan growth.
−Removed: Interest income on interest-bearing deposits with banks was $26.9 million and $12.1 million for the years ended December 31, 2023
−Removed: and 2022, respectively.
+Added: Reserve increasing rates by 100 basis points from February 2023 to July 2023.
+Added: The Federal Reserve dropped rates 100 basis points from September 2024 to December 2024.
+Added: Average interest-bearing deposits with
+Added: banks was $314.9 million and $519.3 million for the years ended December 31, 2024 and 2023, respectively, and decreased primarily to fund loan and lease growth and the purchases of investment securities.
+Added: Interest income on interest-bearing
+Added: deposits with banks was $16.9 million and $26.9 million for the years ended December 31, 2024 and 2023, respectively.
The investment portfolio is also a component of the Company’s earning assets.
8 unchanged sentences
generally lower than that of loans and leases, the yield earned on investments is generally less than that of loans and leases.
−Removed: Average total investment securities were $990.5 million and $1.1 billion for the years ended December 31, 2023 and 2022, respectively.
+Added: Average total investment securities were $1.1 billion and $990.5 million for the years ended December 31, 2024 and 2023, respectively.
The average yield on total investment securities was 2.79% and 2.20% for the
years ended December 31, 2024 and 2023, respectively.
+Added: The increase in the yield reflects the higher yields on investment purchases during the year.
See “Investment Securities” for a discussion of the Company’s investment strategy in 2024.
7 unchanged sentences
Total interest expense on interest-bearing deposits was $63.4 million and $37.5 million for the years ended December 31, 2024 and 2023, respectively, with the increase driven by increases in
−Removed: short-term market interest rates during 2023.
+Added: short-term market interest rates during 2023 and customers seeking higher rates on deposit products.
The average rate paid on total funding costs was 1.38% and 0.82% for the years ended December 31, 2024 and 2023, respectively.
3 unchanged sentences
For purposes of this table, the change in interest due to both volume and rate has been allocated to change due to volume and rate in proportion to the relationship of absolute dollar amounts of change in each.
−Removed: Year Ended December 31, 2023
−Removed: compared with 2022
+Added: Year Ended December 31, 2024 compared with 2023
Increase (Decrease) Due to:
20 unchanged sentences
Total interest bearing deposits
+Added: Short-term borrowings
Subordinated debentures
3 unchanged sentences
(Dollars in thousands)
+Added: $ Better / (Worse)
+Added: % Better / (Worse)
Selected Income Statement Information:
9 unchanged sentences
For the years ended December 31, 2024 and 2023, net income was $88.5 million compared with $88.3 million, respectively.
−Removed: The increase in net income was primarily the result of higher net interest income of $21.8
−Removed: million and an increase in non-interest income of $8.7 million, which included a $4.3 million death benefit gain on bank-owned life insurance (“BOLI”) that was not present during 2022.
−Removed: This increase was offset by an increase in non-interest
−Removed: expense of $10.8 million, higher income tax expense of $3.6 million and a higher provision for credit losses of $3.0 million.
+Added: The increase in net income was primarily the result of no provision for credit losses in 2024
+Added: compared to $9.4 million in 2023 and an increase in non-interest income of $5.8 million.
+Added: This increase was offset by a decrease in net interest income of $8.7 million, higher income tax expense of $5.5 million and a higher non-interest expense
+Added: $0.8 million.
Net Interest Income and Net Interest Margin
−Removed: For the year ended December 31, 2023, net interest income increased $21.8 million, or 11.27%, to $215.4 million compared with $193.6 million for the same period a year earlier.
−Removed: The increase is primarily the result
−Removed: of the net interest margin (tax equivalent basis) increasing 49 basis points to 4.30% compared with 3.81% for the same period a year earlier.
−Removed: The increase in the net interest margin was primarily the result of the Federal Reserve increasing the
−Removed: federal funds rate by 425 basis points from March 2022 to December 2022 and 100 basis points from February 2023 to July 2023.
−Removed: The loan yield for the year ended December 31, 2023, increased 84 basis points from 5.00% to 5.84% compared to the same
−Removed: period a year earlier.
+Added: For the year ended December 31, 2024, net interest income decreased $8.7 million, or 4.04%, to $206.7 million compared with $215.4 million for the same period a year earlier.
+Added: The decrease was primarily due to an
+Added: increase in interest expense from $37.5 million to $63.4 million in 2024 as the average cost of total deposits increased from 0.80% in 2023 to 1.35% in 2024 and average total deposits increased from $4.66 billion for 2023 to $4.70 billion in
The cost of funds for the year ended December 31, 2024, increased by 56 basis points from 0.82% to 1.38% compared to the same period a year earlier.
+Added: The increase in interest expense was partially offset by an increase in loan and lease
+Added: interest and fee income from $204.5 million in 2023 to $223.3 million in 2024 as the average loan yield increased from 5.84% in 2023 to 6.08% in 2024 and average loan and lease balances increased from $3.50 billion in 2023 to $3.67 billion in
Provision for Credit Losses.
2 unchanged sentences
required to maintain the allowance for credit losses at a level that, in management’s judgment, is adequate to absorb expected losses, over the life of the loans and leases, unfunded loan commitments and HTM securities portfolios.
−Removed: The provision for credit losses for the year ended December 31, 2023, was $9.4 million compared with $6.5 million for the same period a year earlier.
−Removed: The increase in 2023 was primarily due to higher estimated
−Removed: losses inherent in the loan and lease portfolio directly related to quantitative and qualitative factors associated with the current economic environment.
−Removed: For the year ended December 31, 2023, the Company incurred net recoveries of $0.3 million
−Removed: compared with net charge-offs of $0.2 million for the same period a year earlier.
+Added: Based on the Company’s credit quality of the loan and lease portfolio, modest loan growth of 0.65% and the calculations of the allowance for credit losses under CECL, no provision for credit losses for the year
+Added: ended December 31, 2024 was necessary compared with $9.4 million for the same period a year earlier comprised of $7.8 million for the provision for credit losses on loans and leases and $1.6 million for the provision for credit losses on unfunded
+Added: Net charge-offs for the year ended December 31, 2024 were $0.7 million compared to net recoveries of $0.3 million for the same period a year earlier.
+Added: The provision of $9.4 million in 2023 was due to loan growth of 4.05% and higher
+Added: estimated losses inherent in the loan and lease portfolio based on the then current economic environment.
Non-interest Income
+Added: Years Ended December 31
(Dollars in thousands)
+Added: $ Better / (Worse)
+Added: % Better / (Worse)
Non-interest Income:
4 unchanged sentences
Increase in cash surrender value of BOLI
−Removed: Net loss on sale of securities available-for-sale
+Added: Net gain/(loss) on sale of securities available-for-sale
Total non-interest income
Non-interest income increased $5.8 million to $20.7 million for 2024 compared with $14.9 million for the same period a year earlier.
−Removed: The year-over-year increase in non-interest income was primarily due to a $4.3
−Removed: million BOLI death benefit gain, a $2.5 million increase in net gains on deferred compensation plan investments and a $2.5 million decrease in net losses on the sale of investment securities during 2023 for interest rate risk management purposes
−Removed: to reposition the balance sheet.
+Added: The year-over-year increase in non-interest income was primarily a result of
+Added: recording a $0.7 million gain on sale of available-for-sale securities in 2024 compared to a loss on sale of available-for-sale securities of $8.2 million in 2023, offset by a reduction of $4.3 million in non-taxable death benefit gains on
+Added: bank-owned life insurance (“BOLI”) as 2023 included the death of a former employee with a significant BOLI policy.
The Company recorded net gains on deferred compensation plan investments of $3.3 million in 2024 compared to net gains of $3.0 million in 2023.
−Removed: See Note 10, located in Item 8.
−Removed: “Financial Statements and
−Removed: Supplementary Data” for a description of these plans.
−Removed: Balances in non-qualified deferred compensation plans may be invested in financial instruments whose market value fluctuates based upon trends in interest rates and stock prices.
−Removed: Although GAAP
−Removed: requires these investment gains/losses be recorded in non-interest income, an offsetting entry is also required to be made to non-interest expense resulting in no net-effect on the Company’s net income.
+Added: See Note 10 “Employee Benefit Plans”, located in Item 8.
+Added: Statements and Supplementary Data” in this Form 10-K for a description of these plans.
+Added: Balances in non-qualified deferred compensation plans may be invested in financial instruments whose market value fluctuates based upon trends in interest
+Added: rates and stock prices.
+Added: Although GAAP requires these investment gains/losses be recorded in non-interest income, an offsetting entry is also required to be made to non-interest expense resulting in no net-effect on the Company’s net income.
Non-interest Expense
+Added: Years Ended December 31
(Dollars in thousands)
10 unchanged sentences
The year-over-year increase was primarily comprised of a $1.6 million increase
−Removed: in salaries and employee benefits, a $2.5 million increase in net gains on deferred compensation plan investments, a $1.0 million increase in deposit insurance and a $0.6 million increase in marketing expenses.
−Removed: For the year ended December 31,
−Removed: 2023, the Company’s expense efficiency ratio was 45.31% compared with 46.84% for the same period a year earlier as the increase in revenues outpaced the increase in expenses.
+Added: in salaries and employee benefits, a $1.3 million increase in professional services and a $0.8 million increase in data processing.
+Added: The increase in professional services was due primarily to an increase in legal services related to corporate
+Added: The increase in data processing was due primarily to upgrades in technology systems.
+Added: These increases were partially offset by a decrease in other non-interest expense of $3.5 million primarily from the adoption of the proportional
+Added: amortization approach under GAAP which shifts the amortization of low-income housing tax credits from other non-interest expense to income tax expense.
+Added: For the year ended December 31, 2024, the Company’s expense efficiency ratio was 46.24%
+Added: compared with 45.31% for the same period a year earlier as the reduction in revenue outpaced the slight increase in expenses.
Net gains on deferred compensation plan obligations were $3.3 million in 2024 compared to net gains of $3.0 million in 2023.
−Removed: See Note 10, located in “tem 8.
−Removed: “Financial Statements and Supplementary Data” for a
−Removed: description of these plans.
−Removed: Balances in non-qualified deferred compensation plans may be invested in financial instruments whose market value fluctuates based upon trends in interest rates and stock prices.
−Removed: Although GAAP requires these gains on
−Removed: obligations to be recorded in non-interest expense, an offsetting entry is also required to be made to non-interest income resulting in no net-effect on the Company’s net income.
+Added: See Note 10 “Employee Benefit Plans”, located in “Item 8.
+Added: “Financial Statements and
+Added: Supplementary Data” in this Form 10-K, for a description of these plans.
+Added: Balances in non-qualified deferred compensation plans may be invested in financial instruments whose market value fluctuates based upon trends in interest rates and stock
+Added: Although GAAP requires these gains on obligations to be recorded in non-interest expense, an offsetting entry is also required to be made to non-interest income resulting in no net-effect on the Company’s net income.
Income Tax Expense
2 unchanged sentences
compared with 24.23% for the same period a year earlier.
−Removed: The Company’s effective tax rate for 2023 was lower, primarily due to a non-taxable BOLI death benefit gain of $4.3 million recognized during the year.
−Removed: The Company’s effective tax rate can
−Removed: fluctuate from year to year due primarily to changes in the mix of taxable and tax-exempt earning sources.
−Removed: The effective rates were lower than the combined Federal and State statutory rate of 30% due primarily to BOLI death benefits, the cash
−Removed: surrender value of life insurance, credits associated with low income housing tax credit investments (“LIHTC”), and tax-exempt interest income on municipal securities and loans.
+Added: The Company’s higher income tax expense and effective tax rates for 2024 compared to 2023 was due in part to the adoption of ASC 2023-02 which shifts the amortization of low-income housing
+Added: tax credits from other non-interest expense to the income tax line under the proportional amortization method thereby increasing income tax expense resulting in an increase in the effective tax rate.
+Added: The Company’s effective tax rate for 2023 was
+Added: also lower than normal due to the non-taxable BOLI death benefit gain of $4.3 million in 2023.
+Added: The Company’s effective tax rate can also fluctuate from year to year due to changes in the mix of taxable and tax-exempt earning sources.
Balance Sheet Analysis
−Removed: Total assets were $5.3 billion at December 31, 2023, a decrease of $18.5 million or 0.35% compared to December 31, 2022.
−Removed: Loans held for investment grew $142.3 million or 4.05% to $3.7 billion at December 31, 2023,
−Removed: compared with $3.5 billion at December 31, 2022.
−Removed: Total deposits were $4.7 billion at December 31, 2023 compared with $4.8 billion at December 31, 2022, a decrease of $91.2 million, or 1.92%.
+Added: Total assets were $5.37 billion at December 31, 2024, an increase of $61.3 million or 1.15% compared to December 31, 2023.
+Added: Loans and leases held for investment grew $23.7 million or 0.65% to $3.68 billion at
+Added: December 31, 2024, compared with $3.65 billion at December 31, 2023.
+Added: Total deposits were $4.70 billion at December 31, 2024 compared with $4.67 billion at December 31, 2023, an increase of $31.0 million, or 0.67%.
Cash and Cash Equivalents
3 unchanged sentences
Interest bearing deposits with banks totaled $141.5 million at December 31, 2024 and $338.4 million at December 31, 2023.
−Removed: The decrease was primarily due to funding loan growth during the year.
−Removed: The Company’s total cash and cash equivalents as of December 31, 2023 represented 7.7% of the Company’s total assets as compared to 11.0% as of December 31, 2022.
+Added: The decrease was primarily due to funding loan and lease growth and the purchase of available-for-sale securities during the year.
+Added: The Company’s total cash and cash equivalents as of December 31, 2024 represented 4.0% of the Company’s total
+Added: assets as compared to 7.7% as of December 31, 2023.
Investment Securities
−Removed: The Company’s net investment portfolio increased slightly by $2.0 million to $1.0 billion at December 31, 2023 compared to $998.2 million at December 31, 2022.
−Removed: During 2023, the Company purchased $85.3 million of`
−Removed: investment securities and sold $39.9 million for interest rate risk management purposes to reposition the balance sheet.
+Added: The Company’s net investment portfolio increased by $233.7 million to $1.2 billion at December 31, 2024 compared to $1.0 billion at December 31, 2023.
+Added: The increase was due to the purchase of $389.5 million in
+Added: investment securities during 2024 offset by normal principal maturities and pay downs and the sale of $69.5 million in available-for-sale securities.
+Added: During 2024, as part of managing the investment portfolio and balance sheet, the portfolio mix
+Added: shifted as available-for-sale securities increased from $182.5 million as of December 31, 2023 to $464.4 million as of December 31, 2024 while the held-to-maturity securities decreased from $817.7 million as of December 31, 2023 to $769.4 million
+Added: as of December 30, 2024.
The Company uses its investment portfolio to manage interest rate and liquidity risks.
−Removed: The Company's total investment
−Removed: portfolio as of December 31, 2023 represented 18.84% of the Company’s total assets as compared to 18.74% at December 31, 2022.
+Added: The Company's total investment portfolio as of December 31, 2024 represented 22.98% of the Company’s total assets as compared to
+Added: 18.84% at December 31, 2023.
+Added: Available-for-sale securities are carried at fair value and held-to-maturity securities are carried at amortized cost under GAAP.
The carrying value of our portfolio of investment securities was as follows:
2 unchanged sentences
Available-for-Sale Securities
−Removed: Treasury notes
Government-sponsored securities
Mortgage-backed securities (1)
+Added: Commercial mortgage-backed securities (1)
Collateralized mortgage obligations (1)
1 unchanged sentence
Total available-for-sale securities
−Removed: (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S.
+Added: (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government
+Added: sponsored entity of the U.S.
As of December 31,
5 unchanged sentences
Total held-to-maturity securities
+Added: Allowance for credit losses
+Added: Total held-to-maturity securities
(1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government
sponsored entity of the U.S.
−Removed: The following table shows the carrying value for contractual maturities of investment securities and the weighted average yields of such securities, including the benefit of tax-exempt securities:
+Added: The following table shows the carrying value for final contractual maturities of investment securities and the weighted average yields of such securities, including the benefit of tax-exempt securities:
As of December 31, 2024
9 unchanged sentences
Mortgage-backed securities (1)
+Added: Commercial mortgage-backed securities (1)
Collateralized mortgage obligations (1)
25 unchanged sentences
Securities available-for-sale
−Removed: Treasury notes
Government-sponsored securities
Mortgage-backed securities (1)
+Added: Commercial mortgage-backed securities (1)
Collateralized mortgage obligations (1)
113 unchanged sentences
“Quantitative and Qualitative Disclosures about Market Risk” in this Form 10-K for further details.
−Removed: Overall, the Company's loan and lease portfolio at December 31, 2023 totaled $3.7 billion, an increase of $142.3 million or 4.05% over December 31, 2022.
+Added: The Company's loan and lease portfolio at December 31, 2024 totaled $3.7 billion, an increase of $23.7 million or 0.65% over December 31, 2023.
The following table sets forth the distribution of the loan and lease portfolio by type and percent at the end of each period presented:
(Dollars in thousands)
+Added: Percent of Total
+Added: Percent of Total
Gross Loans and Leases
8 unchanged sentences
(Dollars in thousands)
−Removed: Fifteen Years
−Removed: After Fifteen
+Added: One Year or Less
+Added: After One But Within Five Years
+Added: After Five But Within Fifteen Years
+Added: After Fifteen Years
Gross loan and leases:
6 unchanged sentences
Rate Structure for Loans
−Removed: Adjustable Rate
+Added: Variable Rate
Total gross loans and leases
14 unchanged sentences
Non-performing assets to total assets
−Removed: Non-Accrual Loans and Leases - Accrual of interest on loans and leases is generally discontinued when a loan or lease becomes contractually past due by 90 days or more with
−Removed: respect to interest or principal.
−Removed: When loans and leases are 90 days past due, but in management's judgment are well secured and in the process of collection, they may not be classified as non-accrual.
−Removed: When a loan or lease is placed on non-accrual
−Removed: status, all interest previously accrued but not collected is reversed.
−Removed: Income on such loans and leases is then recognized only to the extent that cash is received and where the future collection of principal is probable.
−Removed: Non-accrual loans and
−Removed: leases were zero at December 31, 2023, and $571,000 at December 31, 2022.
−Removed: Other Real Estate Owned – OREO represents real property taken either through foreclosure or through a deed in lieu thereof from the borrower.
−Removed: The Company records all OREO properties at amounts equal to or less than the fair market value of the properties based on current independent appraisals reduced by estimated selling costs.
−Removed: The Company reported $873,000 of foreclosed
−Removed: OREO at December 31, 2023, and 2022.
+Added: Non-Accrual Loans and Leases – Accrual of interest on loans and leases is generally discontinued when a loan or lease becomes
+Added: contractually past due by 90 days or more with respect to interest or principal.
+Added: When loans and leases are 90 days past due, but in management's judgment are well secured and in the process of collection, they may not be classified as
+Added: When a loan or lease is placed on non-accrual status, all interest previously accrued but not collected is reversed.
+Added: Income on such loans and leases is then recognized only to the extent that cash is received and where the future
+Added: collection of principal is probable.
+Added: The Company had $929,000 in non-accrual loans and leases as of December 31, 2024, and no non-accrual loans or leases at December 31, 2023.
Although management believes that non-performing loans and leases are generally well-secured and that potential losses are provided for in the Company’s allowance for credit losses, there can be no assurance that
future deterioration in economic conditions and/or collateral values will not result in future credit losses.
−Removed: “Loans and Leases”, located in Item 8.
+Added: See Note 4 “Loans and Leases”, located in Item 8.
“Financial Statements and Supplementary Data” in this Form 10-K for an allocation of
the allowance classified to collateral dependent loans and leases.
−Removed: Loan Modifications to Borrowers Experiencing Financial Difficulties – In the normal course of business, the Company may execute loan
−Removed: modifications to borrowers experiencing financial difficulties.
+Added: Other Real Estate Owned – OREO represents real property taken either through foreclosure or through a deed in lieu thereof from the borrower.
+Added: The Company records all OREO properties at amounts equal to or less than the fair market value of the properties based on current independent appraisals reduced by estimated selling costs.
+Added: The Company reported $873,000 of foreclosed
+Added: OREO at December 31, 2024, and 2023.
+Added: Loan Modifications to Borrowers Experiencing Financial Difficulties – In the normal
+Added: course of business, the Company may execute loan modifications to borrowers experiencing financial difficulties.
Some of these modifications include:
−Removed: term extension, principal forgiveness, rate reduction, other-than-insignificant payment delay, or any combination of those.
−Removed: requires certain disclosure of loans and leases that have been modified within the past 12 months and the effects that those modifications had on the modified loans and leases.
−Removed: Because the effect of most modifications made to borrowers
−Removed: experiencing financial difficulty is already included in the allowance for credit losses and because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon
−Removed: modification.
+Added: term extension, principal forgiveness, rate reduction, other-than-insignificant payment delay,
+Added: or any combination of those.
+Added: ASU 2022-02 requires certain disclosure of loans and leases that have been modified within the past 12 months and the effects that those modifications had on the modified loans and leases.
+Added: Because the effect of most
+Added: modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses and because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is
+Added: generally not recorded upon modification.
Occasionally, the Company modifies loans by providing principal forgiveness that is deemed to be uncollectable;
−Removed: therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a
−Removed: corresponding adjustment to the allowance for credit losses.
−Removed: The Company modified four loans, with two borrowers, in the aggregate amount of $6.4 million, during the year ended December 31, 2023.
−Removed: These loans are current and have no loss exposure as of December 31, 2023.
+Added: therefore, that portion of the loan is written off, resulting in a reduction of the
+Added: amortized cost basis and a corresponding adjustment to the allowance for credit losses.
+Added: The Company modified six loans, with two borrowers, in the aggregate amount of $13.2 million, during the year ended December 31, 2024.
+Added: These loans were current as of December 31, 2024.
Allowance for Credit Losses—Loans and Leases
7 unchanged sentences
The overall allowance consists of two primary
−Removed: specific reserves related to impaired loans and leases and general reserves comprised of both quantitative and qualitative factors for current expected credit losses related to loans and leases that are not collateral dependent.
−Removed: Company uses the Weighted Average Remaining Maturity (“WARM”) method to calculate the ACL, as this method is deemed the most appropriate given the Company’s current size and complexity.
−Removed: See Note 1, located in Item 8.
−Removed: “Financial Statements and
−Removed: Supplementary Data” of this Form 10-K for a detailed discussion of the Company’s allowance for credit losses.
−Removed: The following table sets forth the activity in our ACL for loans and leases for the periods indicated:
+Added: specific reserves related to individually evaluated loans and leases and general reserves comprised of both quantitative and qualitative factors for current expected credit losses related to loans and leases that are not individually
+Added: The Company uses the Weighted Average Remaining Maturity (“WARM”) methodology to calculate the ACL, as this method is deemed the most appropriate given the Company’s size and complexity.
+Added: See “ – Critical Accounting Policies and
+Added: Estimates” above, and Note 1 “Summary of Significant Accounting Policies”, located in Item 8.
+Added: “Financial Statements and Supplementary Data”, of this Form 10-K for a detailed discussion of the Company’s allowance for credit losses.
+Added: The allowance for credit losses is the combination of the allowance for credit losses on loan and lease losses and the allowance for credit losses on unfunded loan commitments.
+Added: The ACL for unfunded loan commitments
+Added: is included within “Interest payable and other liabilities” on the consolidated balance sheets.
+Added: The following table sets forth the activity in our allowance for credit losses on loans and leases held for investment and unfunded loan commitments for the periods indicated:
Year Ended December 31,
3 unchanged sentences
Provision for credit losses:
+Added: Allowance for credit losses- loans and leases
+Added: Allowance for credit losses- unfunded loan commitments
+Added: Total provision for credit losses
+Added: Provision for credit losses
Residential and home equity
10 unchanged sentences
Total recoveries
−Removed: Net recoeries / (charge-offs)
+Added: Net (charge-offs) / recoveries
Balance at end of year
+Added: Allowance for credit losses - loans and leases
+Added: Allowance for credit losses - unfunded loan commitments
+Added: Total allowance for credit losses
Selected financial information:
5 unchanged sentences
Provision for credit losses to average loans and leases
−Removed: Allowance for credit losses to gross loans and leases held-for-investment
−Removed: The increase in ACL during the year ended 2023 was primarily related to higher estimated losses inherent in the loan and lease portfolio directly related to quantitative and qualitative factors associated with the
−Removed: current economic environment.
−Removed: In 2023, the Company recorded a provision for credit losses on unfunded commitments of $1.6 million due to changes in the utilization factors and a slight increase in unfunded commitments.
−Removed: Year Ended December 31,
−Removed: (Dollars in thousands)
−Removed: ACL - Loans and leases
−Removed: ACL - Unfunded commitments
+Added: Allowance for loan and lease losses to loans and leases held for investment
+Added: (1) Not meaningful
The following table indicates management’s allocation of the ACL for loan and leases by loan type as of each of the following dates:
(Dollars in thousands)
−Removed: Type to Total
−Removed: Type to Total
+Added: Percent of Each Loan Type to Total Loans
+Added: Percent of ACL to Each Loan Type
+Added: Percent of Each Loan Type to Total Loans
+Added: Percent of ACL to Each Loan Type
Allowance for credit losses:
5 unchanged sentences
Total allowance for credit losses
−Removed: Total deposits were $4.67 billion and $4.76 billion at December 31, 2023 and 2022, respectively or a decrease of $91.2 million or 1.92%.
−Removed: Deposits ebbed and flowed during the year with decreases in the first and
−Removed: fourth quarters of 2023 partially offset by increases in the second and third quarters of 2023.
−Removed: Our deposit base has some seasonality from the agricultural portfolio, but the year-over-year decrease in 2023 was primarily due to a shift in
−Removed: customer behavior to higher yielding deposit products or other investment alternatives such as U.S.
+Added: Total deposits were $4.70 billion and $4.67 billion at December 31, 2024 and 2023, respectively, or an increase of $31.0 million or 0.67%.
+Added: The modest increase in total deposits was primarily due to a $35.7 million
+Added: or 2.41% increase in non-interest bearing deposits.
+Added: The Company experienced fluctuations in deposits during the year due in part to the seasonality within our agriculture client base along with changes in customer behavior over the last year as
+Added: customers were seeking higher yielding deposit products or other investment alternatives such as U.S.
Treasuries or money market funds given the interest rate environment.
−Removed: Non-interest bearing demand deposits were $1.48 billion and $1.76 billion at December 31, 2023 and 2022, respectively.
−Removed: Non-interest bearing deposits were 31.76% and 36.96% of total deposits, at December 31, 2023
−Removed: and 2022, respectively.
+Added: Non-interest bearing demand deposits grew $35.7 million from $1.48 billion at December 31, 2023 to $1.52 billion at December 31, 2024.
+Added: Non-interest bearing deposits were 32.31% and 31.76% of total deposits, at
+Added: December 31, 2024 and 2023, respectively.
Interest bearing deposits were $3.18 billion and $3.19 billion as of December 31, 2024 and 2023, respectively.
−Removed: Interest bearing deposits are comprised of interest-bearing transaction accounts, money market accounts,
−Removed: regular savings accounts, and certificates of deposit.
−Removed: The decrease in non-interest bearing deposits and the increase in interest-bearing deposits primarily reflects changes in customer behavior as customers shifted from non-interest bearing
−Removed: accounts to higher interest earning accounts given the interest rate environment during 2023.
−Removed: Certificates of deposit accounts increased $313.2 million, or 94.52%, to $664.6 million at December 31, 2023 compared with $331.4 million at December 31, 2022.
−Removed: Savings and money market accounts increased $63.4
−Removed: million, or 4.11%, to $1.61 billion at December 31, 2023 compared with $1.54 billion at December 31, 2022.
−Removed: Demand and non-interest bearing transaction accounts totaled $2.42 billion at December 31, 2023, a decrease of $467.8 million, or 16.22%,
−Removed: from $2.88 billion at December 31, 2022.
−Removed: The following table shows the average balances and average rate paid on the categories of deposits for each of the periods presented:
+Added: Interest bearing deposits are comprised of interest-bearing transaction accounts, money
+Added: market accounts, regular savings accounts, and certificates of deposit.
+Added: Interest-bearing transaction accounts decreased $51.3 million, or 5.5%, to $882.1 million at December 31, 2024, compared with $933.4 million at December 31, 2023.
+Added: money market accounts decreased $24.3 million, or 1.51%, to $1.58 billion at December 31, 2024 compared with $1.61 billion at December 31, 2023.
+Added: Certificates of deposit accounts increased $70.9 million, or 11.0%, to $715.5 million at December 31,
+Added: 2024, compared with $664.6 million at December 31, 2023.
+Added: The following table shows the average amount and average rate paid on the categories of deposits for each of the periods presented:
As of December 31,
16 unchanged sentences
The interest rates paid are competitively priced for each particular deposit product and structured to meet our funding requirements.
−Removed: significant increase in short-term interest rates during 2022 and 2023 placed pressure on deposit pricing.
−Removed: The average cost of total deposits, including non-interest bearing deposits, increased to 0.80% for 2023 compared to 0.09% for 2022.
−Removed: Company had no brokered deposits during 2023.
+Added: increase in short-term interest rates during 2023 and customers seeking higher yielding deposit products continued to place pressure on deposit pricing during 2024.
+Added: The Company did reduce interest rates during the last four months of 2024 after
+Added: the Federal Reserve cut interest rates by 100 basis points between September and December.
+Added: The average cost of total deposits, including non-interest bearing deposits, increased to 1.35% for 2024 compared to 0.80% for 2023 due to the higher
+Added: interest rate environment during the year before the Federal Reserve rate cuts.
+Added: The Company had no brokered deposits at December 31, 2024.
The following table shows deposits with a balance greater than $250,000 at December 31, 2024 and 2023:
22 unchanged sentences
On December 17, 2003, the Company raised $10.0 million through the sale of subordinated debentures to an off-balance sheet trust and its sale of trust-preferred securities.
−Removed: “Long-Term Subordinated
+Added: See Note 9 “Long-Term Subordinated
Debentures,” located in Item 8.
1 unchanged sentence
Although this amount is reflected as subordinated debt on the Company’s balance sheet, under current regulatory guidelines, our Trust Preferred
−Removed: Securities will continue to qualify as regulatory capital.
+Added: Securities continue to qualify as regulatory capital.
These securities accrue interest at a variable rate based upon 3-month SOFR plus 2.85%.
1 unchanged sentence
rate paid for these securities was 8.45% in 2024 and 8.21% in 2023.
−Removed: Additionally, if the Company decided to defer interest on the subordinated debentures, the Company would be prohibited from paying cash dividends on the Company’s common stock.
+Added: Additionally, if the Company decided to defer interest on the subordinated debentures, the Company would be prohibited, by the terms of the debentures, from paying cash dividends
+Added: on the Company’s common stock.
Capital Resources
16 unchanged sentences
December 31, 2024
−Removed: Required for Capital
−Removed: Adequacy Purposes
+Added: Required for Capital Adequacy Purposes
Minimum to be Categorized as
11 unchanged sentences
December 31, 2023
−Removed: Required for Capital
−Removed: Adequacy Purposes
+Added: Required for Capital Adequacy Purposes
Minimum to be Categorized as
10 unchanged sentences
Tier 1 leverage capital ratio
−Removed: On November 8, 2022, the Board of Directors authorized an extension to its share repurchase program through December 31, 2024 for an additional $20.0 million of the
−Removed: Company’s common stock (“Repurchase Plan”), which represented approximately 4% of outstanding shareholders’ equity at the time of approval.
−Removed: Repurchases by the Company under the Repurchase Plan may be made from time to time through open market
−Removed: purchases, trading plans established in accordance with SEC rules, privately negotiated transactions, or by other means.
−Removed: On November 14, 2023, the Board of Directors authorized a further extension to its share repurchase program through December
−Removed: 31, 2024 for an additional $25.0 million of the Company’s common stock, which represented approximately 4% of outstanding shareholders’ equity as of December 31, 2023.
−Removed: During 2023, the Company repurchased 20,366 shares under the Repurchase Plan, for a total of $20.2 million under the combined $20.0 million share repurchase program authorized in November 2022 and the additional
−Removed: $25.0 million share repurchase program authorized in November 2023.
−Removed: As of December 31, 2023, there remains $24.5 million authorized for repurchases under the Repurchase Plan.
−Removed: From January 2022 through December 31, 2023, the Company reduced the number of shares outstanding by 41,675 shares or 5.28%, due to share repurchases.
−Removed: Repurchases are made at market prices through open market
−Removed: purchases, trading plans established in accordance with SEC rules and privately negotiated transactions.
+Added: On September 10, 2024 the Board of Directors authorized a new share repurchase program (the “Repurchase Plan”) in which the Company may repurchase up to $55.0 million of the Company’s common stock, which
+Added: represented approximately 9% of outstanding shareholders’ equity at the time of approval.
+Added: The new Repurchase Plan extends through December 31, 2026.
+Added: The Board concurrently terminated the existing $25.0 million repurchase plan previously approved
+Added: on November 14, 2023.
+Added: Repurchases by the Company under the Repurchase Plan may be made from time to time at market prices through open market purchases, trading plans established in accordance with SEC rules and privately negotiated
+Added: transactions.
In August 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted.
−Removed: Among other things, the IRA imposes an excise tax equal to 1% of the
−Removed: fair market value of any stock repurchased by covered corporations during a taxable year, subject to certain limits and provisions.
+Added: Among other things, the IRA imposes an excise tax equal to 1% of the fair market value of any stock repurchased by covered corporations during a taxable year,
+Added: subject to certain limits and provisions.
+Added: During 2024, the Company repurchased 48,173 shares under the Repurchase Plan, for a total of $45.3 million, inclusive of the excise tax.
+Added: The largest repurchase transaction occurred on October 3, 2024, when the
+Added: Company entered into and executed a Stock Purchase Agreement with the living trust of one of the Company’s largest shareholders under which the Company repurchased 37,990 shares of common stock of the Company at a cost of $34.8 million.
+Added: time of purchase, this transaction represented the repurchase of 5.15% of the Company’s outstanding shares of common stock.
+Added: As of December 31, 2024, there remains $19.9 million authorized for repurchases under the new Repurchase Plan.
Off-Balance-Sheet Arrangements
6 unchanged sentences
research and development services with the Company.
−Removed: The Company had the following off balance sheet commitments as of the dates indicated.
The following table sets forth our off-balance sheet lending commitments as of December 31, 2024:
1 unchanged sentence
(Dollars in thousands)
+Added: Total Committed Amount
+Added: One to Three Years
+Added: Three to Five Years
+Added: After Five Years
Off-balance sheet commitments
14 unchanged sentences
Most standby letters of credit have maturity dates ranging from 1
−Removed: to 60 months with final expiration in August 2028.
+Added: to 48 months with final expiration in October 2028.
Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.
−Removed: The ability to have readily available funds sufficient to repay maturing liabilities is of primary importance to depositors, creditors and regulators.
−Removed: In an effort to satisfy our liquidity needs, we actively manage
−Removed: our assets and liabilities.
+Added: The ability to have readily available funds sufficient to repay maturing and non-maturing liabilities is of primary importance to depositors, creditors and regulators.
+Added: In an effort to satisfy our liquidity needs,
+Added: we actively manage our assets and liabilities.
We have access to immediate liquid resources in the form of cash, which totaled $212.6 million or 4.0% of total assets as of December 31, 2024.
−Removed: The majority of cash is on deposit with the FRB and amounted to $338.4
−Removed: Potential sources of liquidity also include investment securities in our available-for-sale securities portfolio, our ability to sell loans in the secondary market, and our ability to borrow from the FRB and FHLB.
−Removed: Our diversified deposit
−Removed: portfolio has historically provided us with a long-term source of stable low cost funding.
−Removed: Maturities and payments on outstanding loans and investment securities also provide a steady flow of funds.
−Removed: Our liquidity, represented by cash borrowing
−Removed: lines, federal funds and available for sale securities, is a result of our operating, investing and financing activities and related cash flows.
−Removed: In order to ensure funds are available at all times, we devote resources to projecting the amount of
−Removed: funds that will be required and we maintain relationships with a diversified client base so funds are accessible.
−Removed: Liquidity requirements can also be met through short-term borrowings or the disposition of short-term assets.
+Added: The majority of cash is on deposit with the FRB and
+Added: amounted to $141.5 million.
+Added: Potential sources of liquidity also include our ability to sell or pledge our available-for-sale securities portfolio, our held-to-maturity portfolio which can be pledged for borrowing purposes, our ability to sell
+Added: loans in the secondary market, and our ability to borrow from the FRB and FHLB.
+Added: Our diversified deposit portfolio has historically provided us with a long-term source of stable low cost funding.
+Added: Maturities and payments on outstanding loans and
+Added: investment securities also provide a steady flow of funds.
+Added: Our liquidity, represented by cash borrowing lines, federal funds and available for sale securities, is a result of our operating, investing and financing activities and related cash
+Added: In order to ensure funds are available at all times, we devote resources to projecting the amount of funds that will be required and we maintain relationships with a diversified client base.
+Added: Liquidity requirements can also be met through
+Added: short-term borrowings or the disposition of short-term assets.
+Added: We actively monitor our liquidity on a daily basis and manage our liquidity and overall balance sheet positions through both our management and Board level Asset and Liability
+Added: Management committees (ALCO), which meet regularly during the year.
We had the following borrowing lines available at December 31, 2024:
1 unchanged sentence
(Dollars in thousands)
+Added: Total Credit Line Limit
+Added: Outstanding Amount
+Added: Remaining Credit Line Available
+Added: Value of Collateral Pledged
Additional liquidity sources:
1 unchanged sentence
Federal Home Loan Bank
−Removed: FRB Bank Term Funding Program
US Bank Fed Funds
8 unchanged sentences
Our pledged collateral on short-term borrowing lines was comprised
−Removed: of $2.8 billion in loans, $135.0 million in investment securities pledged at par value and $1.9 million in investment securities held at market value.
−Removed: We have the option of either borrowing on our credit lines or selling these investment
−Removed: securities for cash flow needs.
−Removed: On a long-term basis, we intend to meet our liquidity needs by changing the relative distribution of our asset portfolios by reducing our investment or loan and lease volumes, or selling or encumbering assets.
−Removed: Further, we would increase liquidity by soliciting higher levels of deposit accounts through promotional activities and/or borrowing from our correspondent banks as well as the FHLB.
−Removed: At the current time, our long-term liquidity needs primarily
−Removed: relate to funds required to support loan and lease originations and commitments and deposit withdrawals.
−Removed: We believe we can meet all of these needs from existing liquidity sources.
+Added: of $2.5 billion in loans and $1.6 million in investment securities held at market value.
+Added: We have the option of either borrowing on our credit lines or selling these investment securities for cash flow needs.
+Added: On a long-term basis, we can, as needed, meet our liquidity needs by changing the relative distribution of our asset portfolios by reducing our investment or loan and lease volumes, or selling or encumbering
+Added: Further, we can increase liquidity by soliciting higher levels of deposit accounts through promotional activities and/or borrowing from our correspondent banks as well as the Federal Reserve and FHLB.
+Added: At the current time, our long-term
+Added: liquidity needs primarily relate to funds required to support loan and lease originations and commitments and deposit withdrawals.
+Added: We believe we can meet all our liquidity needs from existing liquidity sources.
Our liquidity is comprised of three primary classifications:
cash flows from or used in operating activities;
−Removed: cash flows from or used in
−Removed: investing activities;
+Added: cash flows from or used
+Added: in investing activities;
and cash flows from or used in financing activities.
−Removed: Net cash provided by or used in operating activities has consisted primarily of net income adjusted for certain non-cash income and expense items such as the credit loss
−Removed: provision, investment and other amortization and depreciation.
+Added: Net cash provided by or used in operating activities has consisted primarily of net income adjusted for certain non-cash income and expense items such as the credit
+Added: loss provision, investment and other amortization and depreciation.
+Added: Our net cash provided by operating activities for 2024 was $103.7 million driven by record net income of $88.5 million.
Our primary investing activities are the origination of loans and leases and purchases and sales of investment securities.
−Removed: As of December 31, 2023, we had unfunded loan commitments of $1.15 billion and unfunded
−Removed: letters of credit of $16.9 million.
−Removed: At December 31, 2023, we believe that we had sufficient funds available to meet current loan commitments.
+Added: Net cash used in investing activities was $274.6 million during 2024 driven by a net
+Added: increase in loans and leases of $24.3 million and activity in our investment portfolio, including purchases of $389.5 million in available-for-sale securities offset by proceeds from the sale, maturities, calls, and pay downs of investment
+Added: securities of $152.6 million.
+Added: As of December 31, 2024, we had unfunded loan commitments of $1.0 billion and unfunded letters of credit of $15.4 million.
+Added: At December 31, 2024, we believe that we had sufficient funds available to meet current loan
+Added: Net cash used in financing activities totaled $27.2 million in 2024 driven by the repurchase of $45.3 million in common stock, $13.0 million in cash dividends paid to shareholders offset by an increase in deposits
+Added: of $31.0 million.
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.