What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-08-09 compared with 2021-05-10 · 257 added, 196 removed, 1090 unchanged (29% of the section changed)

3 unchanged sentences

(Amounts in thousands except share data)

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Cash and due from banks $ 4,347 $ 7,367

13 unchanged sentences

Servicing asset, at fair value 4,120 3,569

Other real estate owned 1,300 —

Accrued income and other assets 54,766 64,304

28 unchanged sentences

(Amounts in thousands except share and per share data)

Three Months Ended

March 31, 2021 March 31, 2020

Three Months Ended Six Months Ended

June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

Interest Income

18 unchanged sentences

Gain on sale of securities — — — 41

Gain on sale of premises and equipment 2,523 — 2,523 —

Other 249 456 618 873

11 unchanged sentences

Income Before Income Taxes 15,473 3,664 27,780 9,946

Income Tax Provision 1,857 263

Income Tax Provision (Benefit) 2,377 ( 268 ) 4,234 ( 5 )

Net Income $ 13,096 $ 3,932 $ 23,546 $ 9,951

10 unchanged sentences

(Amounts in thousands)

Three Months Ended March 31,

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

2021 2020 2021 2020

Net income $ 13,096 $ 3,932 $ 23,546 $ 9,951

Other comprehensive income (loss)

Net unrealized holding gains on securities available-for-sale recorded within other comprehensive (loss) income before income tax ( 2,195 ) 6,299

Net unrealized holding gains (losses) on securities available-for-sale recorded within other comprehensive income (loss) before income tax 1,388 ( 1,498 ) ( 807 ) 4,801

Reclassification adjustment for gains realized — — — ( 41 )

Net unrealized holding gains (losses) on cash flow hedging derivatives recorded within other comprehensive income (loss) before income tax 6,280 ( 13,458 )

Net unrealized holding (losses) gains on cash flow hedging derivatives recorded within other comprehensive income (loss) before income tax ( 54 ) ( 509 ) 6,226 ( 13,967 )

Other comprehensive income (loss) before income tax 1,334 ( 2,007 ) 5,419 ( 9,207 )

5 unchanged sentences

Condensed Consolidated Statements of Changes in Shareholders’ Equity - Unaudited

Three Months Ended March 31, 2021 and 2020

Six Months Ended June 30, 2021 and 2020

(Amounts in thousands except per share data)

11 unchanged sentences

Common stock redeemed for the net settlement of share-based awards ( 195 ) — — ( 195 )

Balance, March 31, 2021 $ 221,911 $ 136,575 $ ( 13,920 ) $ 344,566

Balance, June 30, 2021 $ 222,486 $ 149,066 $ ( 12,911 ) $ 358,641

Balance, January 1, 2020 $ 219,423 $ 99,681 $ ( 14,191 ) $ 304,913

6 unchanged sentences

Common stock redeemed for the net settlement of share-based awards ( 93 ) — — ( 93 )

Balance, March 31, 2020 $ 219,893 $ 105,100 $ ( 19,866 ) $ 305,127

Balance, June 30, 2020 $ 220,418 $ 108,431 $ ( 21,138 ) $ 307,711

See Notes to Condensed Consolidated Financial Statements

First Internet Bancorp

Condensed Consolidated Statements of Changes in Shareholders’ Equity - Unaudited

Three Months Ended June 30, 2021 and 2020

(Amounts in thousands except per share data)

Stock Retained

Earnings Accumulated

Comprehensive

Shareholders’

Balance, April 1, 2021 $ 221,911 $ 136,575 $ ( 13,920 ) $ 344,566

Net income — 13,096 — 13,096

Other comprehensive income — — 1,009 1,009

Dividends declared ($ 0.06 per share)

— ( 605 ) — ( 605 )

Recognition of the fair value of share-based compensation 570 — — 570

Deferred stock rights and restricted stock units issued in lieu of cash dividends payable on outstanding deferred stock rights and restricted stock units 5 — — 5

Common stock redeemed for the net settlement of share-based awards — — — —

Balance, June 30, 2021 $ 222,486 $ 149,066 $ ( 12,911 ) $ 358,641

Balance, April 1, 2020 $ 219,893 $ 105,100 $ ( 19,866 ) $ 305,127

Net income — 3,932 — 3,932

Other comprehensive loss — — ( 1,272 ) ( 1,272 )

Dividends declared ($ 0.06 per share)

— ( 601 ) — ( 601 )

Recognition of the fair value of share-based compensation 517 — — 517

Deferred stock rights and restricted stock units issued in lieu of cash dividends payable on outstanding deferred stock rights and restricted stock units 8 — — 8

Common stock redeemed for the net settlement of share-based awards — — — —

Balance, June 30, 2020 $ 220,418 $ 108,431 $ ( 21,138 ) $ 307,711

First Internet Bancorp

Condensed Consolidated Statements of Cash Flows – Unaudited

(Amounts in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating Activities

9 unchanged sentences

Gain on loans sold ( 16,774 ) ( 11,069 )

Decrease (increase) in fair value of loans held-for-sale 862 ( 316 )

Gain on derivatives 881 1,163

Net change in servicing asset ( 248 ) 66

Decrease in fair value of loans held-for-sale 744 939

Loss on derivatives ( 1,384 ) 377

Settlement of derivatives ( 1,859 ) ( 46,109 )

Loan servicing asset revaluation 395 ( 41 )

Amortization of operating lease right-of-use assets — 360

Net change in accrued income and other assets 1,631 ( 2,221 )

6 unchanged sentences

Purchase of securities available-for-sale ( 247,791 ) ( 116,993 )

Maturities and calls of securities held-to-maturity 2,500 —

Purchase of securities held-to-maturity — ( 2,000 )

Net proceeds from sale of premises and equipment 8,116 —

Purchase of premises and equipment ( 13,707 ) ( 10,580 )

1 unchanged sentence

Net proceeds from sale of portfolio loans — 205,023

Net cash provided by investing activities 29,344 25,877

Other investing activities 2,264 —

Net cash used in investing activities ( 56,367 ) ( 40,084 )

Financing Activities

Net increase in deposits ( 53,282 ) 24,543

Net increase (decrease) in deposits ( 64,738 ) 226,826

Cash dividends paid ( 1,201 ) ( 1,179 )

10 unchanged sentences

Cash paid during the period for taxes 2,905 91

Loans transferred to other real estate owned 1,300 —

Loans transferred to held-for-sale from portfolio — 204,258

12 unchanged sentences

In our opinion, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation have been included.

The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results expected for the year ending December 31, 2021 or any other period.

The March 31, 2021 condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the First Internet Bancorp Annual Report on Form 10-K for the year ended December 31, 2020.

The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results expected for the year ending December 31, 2021 or any other period.

The June 30, 2021 condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the First Internet Bancorp Annual Report on Form 10-K for the year ended December 31, 2020.

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, or assumptions that could have a material effect on the carrying value of certain assets and liabilities.

9 unchanged sentences

Earnings per share of common stock are based on the weighted-average number of basic shares and dilutive shares outstanding during the period.

The following is a reconciliation of the weighted-average common shares for the basic and diluted earnings per share computations for the three months ended March 31, 2021 and 2020.

(dollars in thousands, except per share data) Three Months Ended March 31,

The following is a reconciliation of the weighted-average common shares for the basic and diluted earnings per share computations for the three and six months ended June 30, 2021 and 2020.

(dollars in thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Basic earnings per share

10 unchanged sentences

(1) Potential dilutive common shares are excluded from the computation of diluted EPS in the periods where the effect would be antidilutive.

There were no weighted-average antidilutive shares excluded from the computation of diluted EPS for the three months ended March 31, 2021 and 8,575 weighted-average antidilutive shares excluded from the computation of diluted EPS for the three months ended March 31, 2020 .

The following tables summarize securities available-for-sale and securities held-to-maturity as of March 31, 2021 and December 31, 2020.

March 31, 2021

Excluded from the computation of diluted EPS were weighted-average antidilutive shares totaling 6 and 3 for the three and six months ended June 30, 2021, respectively, and 79,893 and 29,606 for the three and six months ended June 30, 2020, respectively.

The following tables summarize securities available-for-sale and securities held-to-maturity as of June 30, 2021 and December 31, 2020.

June 30, 2021

Amortized Gross Unrealized Fair

8 unchanged sentences

Total available-for-sale $ 663,693 $ 5,520 $ ( 5,694 ) $ 663,519

March 31, 2021

June 30, 2021

Amortized Gross Unrealized Fair

25 unchanged sentences

Total held-to-maturity $ 68,223 $ 1,356 $ ( 127 ) $ 69,452

The carrying value of securities at March 31, 2021 is shown below by their contractual maturity date.

The carrying value of securities at June 30, 2021 is shown below by their contractual maturity date.

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

16 unchanged sentences

Total $ 65,659 $ 68,058

There were no gross gains or losses resulting from sale of available-for-sale securities during the three months ended March 31, 2021.

There were less than $0.1 million gross gains resulting from sales of available securities during the three months ended March 31, 2020.

There were no gross gains or losses resulting from sale of available-for-sale securities during the three and six months ended June 30, 2021.

There were no gross gains or losses resulting from sale of available-for-sale securities during the three months ended June 30, 2020 and gross gains of less than $0.1 million resulting from sales of available-for-sale securities during the six months ended June 30, 2020.

Certain investments in debt securities are reported in the condensed consolidated financial statements at an amount less than their historical cost.

The total fair value of these investments at March 31, 2021 and December 31, 2020 was $ 247.3 million and $ 226.5 million, which was approximately 47 % and 40 %, respectively, of the Company’s AFS and HTM securities portfolios.

As of March 31, 2021, the Company’s security portfolio consisted of 437 securities, of which 146 were in an unrealized loss position.

The total fair value of these investments at June 30, 2021 and December 31, 2020 was $ 451.8 million and $ 226.5 million, which was approximately 62 % and 40 %, respectively, of the Company’s AFS and HTM securities portfolios.

As of June 30, 2021, the Company’s security portfolio consisted of 448 securities, of which 152 were in an unrealized loss position.

The unrealized losses are related to the categories noted below.

6 unchanged sentences

The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments.

Because the Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be upon maturity, the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2021.

Agency Mortgage-Backed, Private Label Mortgage-Backed and Asset-Backed Securities

1 unchanged sentence

The Company expects to recover the amortized cost bases over the terms of the securities.

The following tables show the securities portfolio’s gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2021 and December 31, 2020.

March 31, 2021

June 30, 2021

Less Than 12 Months 12 Months or Longer Total

7 unchanged sentences

Agency mortgage-backed securities 316,123 ( 3,543 ) 8,956 ( 592 ) 325,079 ( 4,135 )

Private label mortgage-backed securities

1,980 ( 1 ) — — 1,980 ( 1 )

Corporate securities 4,984 ( 16 ) 9,799 ( 202 ) 14,783 ( 218 )

Total $ 385,734 $ ( 3,745 ) $ 66,036 $ ( 1,949 ) $ 451,770 $ ( 5,694 )

March 31, 2021

Less Than 12 Months 12 Months or Longer Total

(in thousands) Fair

Value Unrealized

Securities held-to-maturity

Corporate securities $ 6,449 $ ( 76 ) $ — $ — $ 6,449 $ ( 76 )

Total $ 6,449 $ ( 76 ) $ — $ — $ 6,449 $ ( 76 )

There were no securities held-to-maturity with gross unrealized losses at June 30, 2021.

December 31, 2020

24 unchanged sentences

Total $ 17,456 $ ( 126 ) $ 2,999 $ ( 1 ) $ 20,455 $ ( 127 )

There were no amounts reclassified form accumulated other comprehensive loss to the condensed consolidated statements of income during the three months ended March 31, 2021.

Amounts reclassified from accumulated other comprehensive loss and the affected line items in the condensed consolidated statements of income during the three months ended March 31, 2020 were as follows:

There were no amounts reclassified from accumulated other comprehensive loss to the condensed consolidated statements of income during the three and six months ended June 30, 2021.

Amounts reclassified from accumulated other comprehensive loss and the affected line items in the condensed consolidated statements of income during the three and six months ended June 30, 2020 were as follows:

(in thousands)

2 unchanged sentences

Statements of Income

Three Months Ended

March 31, 2020

Three Months Ended June 30, 2021 Six Months Ended June 30, 2021 Three Months Ended

June 30, 2020 Six Months Ended June 30, 2020

Realized gains on securities available-for-sale

4 unchanged sentences

$ — $ — $ — $ 30 Net Income

Loan balances as of March 31, 2021 and December 31, 2020 are summarized in the table below.

Loan balances as of June 30, 2021 and December 31, 2020 are summarized in the table below.

Categories of loans include:

(in thousands) March 31, 2021 December 31, 2020

(in thousands) June 30, 2021 December 31, 2020

Commercial loans

19 unchanged sentences

Net loans $ 2,929,542 $ 3,029,747

(1) Includes carrying value adjustments of $ 41.6 million related to terminated interest rate swaps associated with public finance loans as of March 31, 2021 and $ 42.7 million related to interest rate swaps associated with public finance loans as of December 31, 2020.

(1) Includes carrying value adjustments of $ 40.4 million and $ 42.7 million related to terminated interest rate swaps associated with public finance loans as of June 30, 2021 and December 31, 2020, respectively.

The risk characteristics of each loan portfolio segment are as follows:

17 unchanged sentences

Construction:

Construction loans are secured by land and related improvements and are made to assist in the construction of new structures, which may include commercial (retail, industrial, office, multi-family) properties or single family residential properties offered for sale by the builder.

Construction loans are secured by land and related improvements and are made to assist in the construction of new structures, which may include commercial (retail, industrial, office, and multi-family) properties or single family residential properties offered for sale by the builder.

These loans generally finance a variety of project costs, including land, site preparation, architectural services, construction, closing and soft costs and interim financing needs.

27 unchanged sentences

The sources of repayment are primarily based on the identified cash flows from operations of the borrower and related entities if the real estate is held in a separate entity and secondarily on the underlying collateral provided by the borrower.

This portfolio segment was initially concentrated in the Western United States but has been growing rapidly throughout the rest of the country with the addition of a growing sales force located in Eastern and Midwestern markets.

This portfolio segment was initially concentrated in the Western United States but has since expanded throughout the rest of the country.

Small Business Lending:

47 unchanged sentences

A home improvement loan generally is charged off no later than when it is 90 days past due as to principal or interest.

The following tables present changes in the balance of the ALLL during the three months ended March 31, 2021 and 2020.

(in thousands) Three Months Ended March 31, 2021

The following tables present changes in the balance of the ALLL during the three and six months ended June 30, 2021 and 2020.

(in thousands) Three Months Ended June 30, 2021

Allowance for loan losses:

14 unchanged sentences

Total $ 30,642 $ 21 $ ( 2,689 ) $ 92 $ 28,066

Three Months Ended March, 2020

Six Months Ended June 30, 2021

Allowance for loan losses:

14 unchanged sentences

Total $ 29,484 $ 1,297 $ ( 3,001 ) $ 286 $ 28,066

The following tables present the recorded investment in loans based on portfolio segment and impairment method as of March 31, 2021 and December 31, 2020.

Three Months Ended June 30, 2020

Allowance for loan losses:

Balance, Beginning of Period Provision (Credit) Charged to Expense Losses

Charged Off Recoveries Balance,

End of Period

Commercial and industrial $ 1,670 $ ( 141 ) $ ( 57 ) $ 5 $ 1,477

Owner-occupied commercial real estate 645 201 — — 846

Investor commercial real estate 128 2 — — 130

Construction 460 261 — — 721

Single tenant lease financing 10,755 563 — — 11,318

Public finance 1,483 59 — — 1,542

Healthcare finance 4,318 1,187 ( 743 ) — 4,762

Small business lending 265 ( 20 ) — 6 251

Residential mortgage 500 36 — 3 539

Home equity 53 ( 4 ) — 2 51

Other consumer 2,580 347 ( 216 ) 117 2,828

Total $ 22,857 $ 2,491 $ ( 1,016 ) $ 133 $ 24,465

Six Months Ended June 30, 2020

Allowance for loan losses:

Balance, Beginning of Period Provision (Credit) Charged to Expense Losses

Charged Off Recoveries Balance,

End of Period

Commercial and industrial $ 1,521 $ 205 $ ( 254 ) $ 5 $ 1,477

Owner-occupied commercial real estate 561 285 — — 846

Investor commercial real estate 109 21 — — 130

Construction 380 341 — — 721

Single tenant lease financing 11,175 143 — — 11,318

Public finance 1,580 ( 38 ) — — 1,542

Healthcare finance 3,247 2,258 ( 743 ) — 4,762

Small business lending 54 183 — 14 251

Residential mortgage 657 ( 107 ) ( 15 ) 4 539

Home equity 46 — — 5 51

Other consumer 2,510 661 ( 502 ) 159 2,828

Total $ 21,840 $ 3,952 $ ( 1,514 ) $ 187 $ 24,465

The following tables present the recorded investment in loans based on portfolio segment and impairment method as of June 30, 2021 and December 31, 2020.

(in thousands) Loans Allowance for Loan Losses

March 31, 2021 Ending Balance:

June 30, 2021 Ending Balance:

Collectively Evaluated for Impairment Ending Balance:

50 unchanged sentences

A loan placed on nonaccrual status may be restored to accrual status when all delinquent principal and interest has been brought current, and the Company expects full payment of the remaining contractual principal and interest.

The following tables present the credit risk profile of the Company’s commercial and consumer loan portfolios based on rating category and payment activity as of March 31, 2021 and December 31, 2020.

March 31, 2021

The following tables present the credit risk profile of the Company’s commercial and consumer loan portfolios based on rating category and payment activity as of June 30, 2021 and December 31, 2020.

June 30, 2021

(in thousands) Pass Special Mention Substandard Total

10 unchanged sentences

1 Balance in “Substandard” is guaranteed by the U.S.

March 31, 2021

June 30, 2021

(in thousands) Performing Nonaccrual Total

20 unchanged sentences

Total consumer loans $ 481,107 $ 1,229 $ 482,336

The following tables present the Company’s loan portfolio delinquency analysis as of March 31, 2021 and December 31, 2020.

March 31, 2021

The following tables present the Company’s loan portfolio delinquency analysis as of June 30, 2021 and December 31, 2020.

June 30, 2021

(in thousands) 30-59

46 unchanged sentences

ASC Topic 310, Receivables , requires that impaired loans be measured based on the present value of expected future cash flows discounted at the loans’ effective interest rates or the fair value of the underlying collateral, less costs to sell, and allows existing methods for recognizing interest income.

The following table presents the Company’s impaired loans as of March 31, 2021 and December 31, 2020.

March 31, 2021 December 31, 2020

The following table presents the Company’s impaired loans as of June 30, 2021 and December 31, 2020.

June 30, 2021 December 31, 2020

(in thousands) Recorded

22 unchanged sentences

1 Entire balance is guaranteed by the U.S.

The table below presents average balances and interest income recognized for impaired loans during the three months ended March 31, 2021 and 2020.

Three Months Ended

March 31, 2021 March 30, 2020

The table below presents average balances and interest income recognized for impaired loans during the three and six months ended June 30, 2021 and 2020.

Three Months Ended Six Months Ended

June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

(in thousands) Average

2 unchanged sentences

Balance Interest

Income Average

Balance Interest

Income Average

Balance Interest

Loans without a specific valuation allowance

11 unchanged sentences

Commercial and industrial 839 — 204 — 677 — 204 —

Owner-occupied commercial real estate 1,420 — — — 473 — — —

Single tenant lease financing 5,430 — 4,680 — 4,984 — 4,680 —

3 unchanged sentences

1 Entire balance is guaranteed by the U.S.

The Company had no residential mortgage other real estate owned as of March 31, 2021 and December 31, 2020.

There was one loan for $ 0.1 million and no loans in the process of foreclosure at March 31, 2021 and December 31, 2020, respectively.

The Company had $ 1.3 million in other real estate owned (“OREO”) as of June 30, 2021, which consisted of one commercial property with a carrying value of $ 1.2 million and one residential mortgage with a carrying value of $ 0.1 million.

The Company did not have any OREO as of December 31, 2020.

There were two loans totaling $ 0.4 million and no loans in the process of foreclosure at June 30, 2021 and December 31, 2020, respectively.

Troubled Debt Restructurings

8 unchanged sentences

Terms may be modified to fit the ability of the borrower to repay in line with its current financial status or the loan may be restructured to secure additional collateral and/or guarantees to support the debt, or a combination of the two.

There was one residential mortgage loan classified as a new TDR during the three months ended March 31, 2021 with a pre-modification and post-modification outstanding recorded investment of $ 0.8 million.

The Company did not allocate a specific allowance for that loan as of March 31, 2021.

There was one portfolio residential mortgage loan classified as a new TDR during the three and six months ended June 30, 2021 with a pre-modification and post-modification outstanding recorded investment of $ 0.8 million.

did not allocate a specific allowance for that loan as of June 30, 2021.

The modifications consisted of interest-only payments for a period of time.

There were no loans classified as new TDRs during the three months ended March 31, 2020.

There were no performing TDRs that had payment defaults within the twelve months following modification during the three ended March 31, 2021 and 2020, respectively.

There was one portfolio residential mortgage loan classified as a new TDR during the three and six months ended June 30, 2020, with a pre-modification and post-modification outstanding recorded investment of $ 0.8 million.

The Company did not allocate a specific allowance for that loan as of June 30, 2020.

The modification consisted of an extension of the maturity date.

There were no performing TDRs that had payment defaults within the twelve months following modification during the three and six months ended June 30, 2021 and 2020, respectively.

Non-TDR Loan Modifications due to COVID-19

3 unchanged sentences

Modifications within the scope of this relief are in effect from the period beginning March 1, 2020 until the earlier of January 1, 2022 or 60 days after the date on which the national emergency related to the COVID-19 pandemic formally terminates.

As of March 31, 2021, the Company had 37 loans totaling $ 14.3 million in non-TDR loan modifications due to COVID-19.

As of June 30, 2021, the Company had eight loans totaling $ 7.9 million in non-TDR loan modifications due to COVID-19.

Premises and Equipment

The following table summarizes premises and equipment at March 31, 2021 and December 31, 2020.

(in thousands) March 31,

The following table summarizes premises and equipment at June 30, 2021 and December 31, 2020.

(in thousands) June 30,

2021 December 31,

6 unchanged sentences

Total $ 44,249 $ 37,590

During 2018, the Bank's subsidiary, SPF15, Inc., (“SPF15”) acquired several parcels of land consisting of approximately 3.3 acres located in Fishers, Indiana for approximately $ 10.2 million, inclusive of acquisition costs.

Pursuant to a Land Acquisition Agreement with the City of Fishers, Indiana (the “City”), and its Redevelopment Commission, among others, the City agreed to reimburse SPF15 for the purchase price and other specified land acquisition costs.

The Land Acquisition Agreement was replaced by a Project Agreement in December 2018, which extended the reimbursement deadline to October 31, 2019 and made additional financial incentives available to the Company for constructing an office building and associated parking garage on the property.

As contemplated under the Project Agreement, the City transferred to SPF15 two additional parcels of land consisting of approximately 0.75 acres and SPF15 transferred to the Fishers Town Hall Building Corporation and third parties a certain parcel of land consisting of approximately 1.65 acres in connection with the development of the property.

On October 25, 2019, the City satisfied its reimbursement obligation, resulting in the payment of SPF15 of an aggregate of $ 11.1 million for purchase prices and other specified land acquisition costs.

Site demolition has been completed and construction of a multi-use development, to include the Company's future headquarters, began on October 7, 2019.

Development of the site is estimated to be substantially completed by the fourth quarter 2021.

In December 2018, the Bank’s subsidiary, SPF15, Inc., entered into a project agreement with the City of Fishers, Indiana (the “City”), and its Redevelopment Commission, among others, to construct an office building to include the Company’s future headquarters and associated parking garage on property the Bank had acquired in 2018.

Construction began on the project in the fourth quarter 2019 and is expected to be substantially complete in the fourth quarter 2021.

The Company anticipates fully occupying the new headquarters building by the end of 2021.

On February 16, 2021, the Company entered into an agreement to sell its current headquarters and certain equipment currently located in the building to a third party.

At March 31, 2021 the net book value of the land, building and improvements was $ 5.3 million.

The sale was completed on April 16, 2021 and as a part of the sale agreement, the buyer has agreed to lease the office building back to the Company through December 31, 2021, with an option to extend up to 90 days beyond that date.

The sale was completed on April 16, 2021 and as a part of the sale agreement, the buyer agreed to lease the office building back to the Company through December 31, 2021, with an option to extend up to 90 days beyond that date.

The sale price was $ 8.9 million in cash paid in full at closing.

The Bank is expected to continue to sublease substantially all of the office space for the duration of the leaseback arrangement.

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property or equipment for a period of time in exchange for consideration.

On January 1, 2019, the Company adopted ASU 2016-02 - Leases (Topic 842) and elected the optional transition method, which allows the Company to not separate non-lease components from the associated lease component if certain conditions are met.

In addition, the Company elected not to adjust prior comparative periods.

The Company has two operating leases that are used for general office operations with remaining lease terms of two to three years .

With the adoption of ASU 2016-02, operating lease agreements are required to be recognized on the condensed consolidated balance sheets as a right-of-use asset and a corresponding lease liability.

The following table shows the components of lease expense.

(in thousands) Three Months Ended

March 31, 2021 March 31, 2020

Operating lease cost $ 143 $ 215

The following table shows supplemental cash flow information related to leases.

(in thousands) Three Months Ended

March 31, 2021 March 31, 2020

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases $ 158 $ 231

The following table shows the operating leases’ impact on the condensed consolidated balance sheets.

The Company elected not to include short-term leases (leases with original terms of 12 months or less) or equipment leases, as those amounts are insignificant.

The Company’s leases do not provide an implicit rate.

The discount rate utilized to determine the present value of lease payments is the Company’s incremental borrowing rate based on the information available at the lease inception date.

The incremental borrowing rate is the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment.

(dollars in thousands)

March 31, 2021 December 31, 2020

Operating lease right-of-use assets $ 351 $ 819

Operating lease liabilities 351 819

Weighted-average remaining lease term (years)

Operating leases 1.9 2.0

Weighted-average discount rate

Operating leases 2.3 % 2.0 %

The following table shows the future minimum payments of operating leases with initial or remaining terms of one year or more as of March 31, 2021.

(in thousands)

Twelve months ended March 31, 2021

Total lease payments 1,326

imputed interest ( 8 )

Total $ 1,318

As of March 31, 2021 and December 31, 2020, the carrying amount of goodwill was $ 4.7 million.

There have been no changes in the carrying amount of goodwill for the three months ended March 31, 2021.

The Company is expected to continue to lease substantially all of the office space for the duration of the primary leaseback period.

As of June 30, 2021 and December 31, 2020, the carrying amount of goodwill was $ 4.7 million.

There have been no changes in the carrying amount of goodwill for the three and six months ended June 30, 2021.

Goodwill is assessed for impairment annually as of August 31, or more frequently if events occur or circumstances change that indicate an impairment may exist.

5 unchanged sentences

Servicing Asset

Activity for the servicing asset and the related changes in fair value for the three months ended March 31, 2021 and 2020 are shown in the table below.

Activity for the servicing asset and the related changes in fair value for the three and six months ended June 30, 2021 and 2020 are shown in the table below.

(in thousands) Three Months Ended

March 31, 2021 March 31, 2020

June 30, 2021 June 30, 2020

Balance, beginning of period $ 3,817 $ 2,415

4 unchanged sentences

Balance, end of period $ 4,120 $ 2,522

(in thousands) Six Months Ended

June 30, 2021 June 30, 2020

Balance, beginning of period $ 3,569 $ 2,481

Originated and purchased servicing 946 310

Paydowns ( 324 ) ( 269 )

Changes in fair value due to changes in valuation inputs or assumptions used in the

valuation model ( 71 ) —

Balance, end of period $ 4,120 $ 2,522

Loans serviced for others are not included in the condensed consolidated balance sheets.

The unpaid principal balances of these loans serviced for others as of March 31, 2021 and December 31, 2020 are shown in the table below.

The unpaid principal balances of these loans serviced for others as of June 30, 2021 and December 31, 2020 are shown in the table below.

(in thousands)

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Loan portfolios serviced for:

1 unchanged sentence

Total $ 196,869 $ 165,961

Loan servicing revenue totaled $ 0.4 million and $ 0.3 million for the three months ended March 31, 2021 and 2020, respectively.

Loan servicing asset revaluation, which represents the change in fair value of the servicing asset, resulted in a $ 0.2 million downward valuation for the three months ended March 31, 2021 and 2020.

Loan servicing revenue totaled $ 0.5 million and $ 0.9 million for the three and six months ended June 30, 2021 and $ 0.3 million and $ 0.5 million for the three and six months ended June 30, 2020, respectively.

Loan servicing asset revaluation, which represents the change in fair value of the servicing asset, resulted in a $ 0.2 million and $ 0.4 million

downward valuation for the three and six months ended June 30, 2021, respectively, and a $ 0.1 and $ 0.3 million downward valuation for the three and six months ended June 30, 2020, respectively.

The fair value of servicing rights is highly sensitive to changes in underlying assumptions.

26 unchanged sentences

The Company used the net proceeds from the issuance of the 2030 Notes to redeem the 2025 Note as discussed above.

The following table presents the principal balance and unamortized debt issuance costs for the 2025 Note, the 2026 Notes, the 2029 Notes and the 2030 Notes as of March 31, 2021 and December 31, 2020.

March 31, 2021 December 31, 2020

The following table presents the principal balance and unamortized debt issuance costs for the 2025 Note, the 2026 Notes, the 2029 Notes and the 2030 Notes as of June 30, 2021 and December 31, 2020.

June 30, 2021 December 31, 2020

(in thousands) Principal Unamortized Debt Issuance Costs Principal Unamortized Debt Issuance Costs

14 unchanged sentences

All employees, consultants, and advisors of the Company or any subsidiary, as well as all non-employee directors of the Company, are eligible to receive awards under the 2013 Plan.

The Company recorded $ 0.7 million of share-based compensation expense for the three months ended March 31, 2021, related to awards made under th e 2013 Plan.

The Company recorded $ 0.6 million of share-based compensation expense for the three months ended March 31, 2020, related to awards made under the 2013 Plan.

The following table summarizes the status of the 2013 Plan awards as of March 31, 2021 , and activity for the three months ended March 31, 2021.

The Company recorded $ 0.6 million and $ 1.3 million of share-based compensation expense for the three and six months ended June 30, 2021, respectively, related to awards made under th e 2013 Plan.

The Company recorded $ 0.5 million and $ 1.1 million of share-based compensation expense for the three and six months ended June 30, 2020, respectively, related to awards made under the 2013 Plan.

The following table summarizes the status of the 2013 Plan awards as of June 30, 2021 , and activity for the six months ended June 30, 2021.

Restricted Stock Units Weighted-Average Grant Date Fair Value Per Share Restricted Stock Awards Weighted-Average Grant Date Fair Value Per Share Deferred Stock Units Weighted-Average Grant Date Fair Value Per Share

1 unchanged sentence

Granted 60,111 30.42 13,878 30.27 4 32.53

Cancelled/Forfeited — — (1,057) 30.13 — —

Vested ( 35,745 ) 30.12 ( 6,479 ) 30.20 ( 4 ) 32.53

Nonvested at March 31, 2021 134,390 $ 28.20 9,513 $ 30.13 — $ —

At March 31, 2021, the total unrecognized compensation cost related to nonvested awards was $ 3.5 million with a weighted-average expense recognition period of 2.0 years.

Nonvested at June 30, 2021 137,351 $ 28.32 6,342 $ 30.36 — $ —

At June 30, 2021, the total unrecognized compensation cost related to nonvested awards was $ 3.1 million with a weighted-average expense recognition period of 1.8 years.

Directors Deferred Stock Plan

3 unchanged sentences

Deferred stock rights were to be settled in common stock following the end of the deferral period payable on the basis of one share of common stock for each deferred stock right.

The following table summarizes the status of deferred stock rights related to the Directors Deferred Stock Plan for the three months ended March 31, 2021.

The following table summarizes the status of deferred stock rights related to the Directors Deferred Stock Plan for the six months ended June 30, 2021.

Deferred Stock Rights

4 unchanged sentences

In the normal course of business, the Company makes various commitments to extend credit which are not reflected in the accompanying condensed consolidated financial statements.

At March 31, 2021 and December 31, 2020, the Company had outstanding loan commitments totaling approximately $ 260.8 million and $ 263.9 million, respectively.

In addition, the Company is a limited partner in a Small Business Investment Company fund (the “SBIC Fund”).

As of March 31, 2021, the Company has committed to contribute up to $ 1.4 million of capital to the SBIC Fund.

At June 30, 2021 and December 31, 2020, the Company had outstanding loan commitments totaling approximately $ 293.1 million and $ 263.9 million, respectively.

In addition, the Company had unfunded commitments to provide capital contributions for on-balance-sheet investments in the amount of $ 4.8 million as of June 30, 2021.

The Company is also a limited partner in a Small Business Investment Company fund (the “SBIC Fund”).

As of June 30, 2021, the Company has committed to contribute up to $ 1.1 million of capital to the SBIC Fund.

Capital Commitments

1 unchanged sentence

The Company has entered into construction-related contracts and change orders in the amount of $ 66.4 million.

As of March 31, 2021, $ 32.9 million of such contract commitments had not yet been incurred.

As of June 30, 2021, $ 25.4 million of such contract commitments had not yet been incurred.

These commitments are due within twelve months .

20 unchanged sentences

Rating agency and industry research reports as well as default and deferral activity are reviewed and incorporated into the calculation.

The Company did not own any securities classified within Level 3 of the hierarchy as of March 31, 2021 or December 31, 2020.

The Company did not own any securities classified within Level 3 of the hierarchy as of June 30, 2021 or December 31, 2020.

Loans Held-for-Sale (mandatory pricing agreements)

10 unchanged sentences

The fair values of interest rate lock commitments (“IRLCs”) are determined using the projected sale price of individual loans based on changes in market interest rates, projected pull-through rates (the probability that an IRLC will ultimately result in an originated loan), the reduction in the value of the applicant’s option due to the passage of time, and the remaining origination costs to be incurred based on management’s estimate of market costs (Level 3).

The following tables present the fair value measurements of assets and liabilities recognized in the accompanying condensed consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2021 and December 31, 2020.

March 31, 2021

June 30, 2021

Fair Value Measurements Using

41 unchanged sentences

IRLCs 3,361 — — 3,361

The following tables reconcile the beginning and ending balances of recurring fair value measurements recognized in the accompanying condensed consolidated balance sheets using significant unobservable (Level 3) inputs for the three months ended March 31, 2021 and 2020.

Three Months Ended

(in thousands) Servicing Asset Interest Rate Lock

Balance, April 1, 2021 $ 3,817 $ 1,110

Total realized gains

Additions 543 —

Paydowns ( 154 ) —

Change in fair value ( 86 ) ( 292 )

Balance, June 30, 2021 4,120 818

Balance as of April 1, 2020 $ 2,415 $ 2,064

Total realized gains

Additions 197 —

Change in fair value ( 90 ) ( 1,782 )

Balance, June 30, 2020 $ 2,522 $ 282

Six Months Ended

(in thousands) Servicing Asset Interest Rate Lock

Balance, January 1, 2021 $ 3,569 $ 3,361

3 unchanged sentences

Change in fair value ( 71 ) ( 2,543 )

Balance, March 31, 2021 3,817 1,110

Balance, June 30, 2021 4,120 818

Balance as of January 1, 2020 $ 2,481 $ 910

1 unchanged sentence

Additions 310 —

Paydowns ( 179 ) —

Change in fair value ( 269 ) ( 628 )

Balance, March 31, 2020 $ 2,415 $ 2,064

Balance, June 30, 2020 $ 2,522 $ 282

The following describes the valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis, as well as the general classification of such assets pursuant to the valuation hierarchy.

3 unchanged sentences

If the impaired loan is identified as collateral dependent, the fair value of the underlying collateral, less costs to sell, is used to measure impairment.

This method requires obtaining a current independent appraisal of the collateral and

applying a discount factor to the value.

This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value.

If the impaired loan is not collateral dependent, the Company utilizes a discounted cash flow analysis to measure impairment.

Impaired loans with a specific valuation allowance based on the value of the underlying collateral or a discounted cash flow analysis are classified as Level 3 assets.

The following table presents the fair value measurements of assets and liabilities recognized in the accompanying condensed consolidated balance sheets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurement falls at March 31, 2021 and December 31, 2020.

March 31, 2021

June 30, 2021

(in thousands) Fair Value Measurements Using

12 unchanged sentences

(dollars in thousands) Fair Value at

March 31, 2021 Valuation

June 30, 2021 Valuation

Technique Significant Unobservable

26 unchanged sentences

Rating agency and industry research reports as well as default and deferral activity are reviewed and incorporated into the calculation.

The Company did not own any securities classified within Level 3 of the hierarchy as of March 31, 2021 or December 31, 2020.

The Company did not own any securities classified within Level 3 of the hierarchy as of June 30, 2021 or December 31, 2020.

Loans Held-for-Sale (best efforts pricing agreements)

16 unchanged sentences

The fair value of commitments to extend credit are based on fees currently charged to enter into similar agreements with similar maturities and interest rates.

The Company determined that the fair value of commitments was zero based on the contractual value of outstanding commitments at each of March 31, 2021 and December 31, 2020.

The following tables present the carrying value and estimated fair value of all financial assets and liabilities at March 31, 2021 and December 31, 2020.

March 31, 2021

The Company determined that the fair value of commitments was zero based on the contractual value of outstanding commitments at each of June 30, 2021 and December 31, 2020.

The following tables present the carrying value and estimated fair value of all financial assets and liabilities at June 30, 2021 and December 31, 2020.

June 30, 2021

Fair Value Measurements Using

32 unchanged sentences

The Company’s residential real estate lending business originates mortgage loans for customers and typically sells a majority of the originated loans into the secondary market.

For most of the mortgages it sells in the secondary market, the Company hedges its mortgage banking pipeline by entering into forward contracts for the future delivery of mortgage loans to third party investors and entering into IRLCs with potential borrowers to fund specific mortgage loans that will be sold into the secondary market.

For most of the mortgages it sells in the secondary market, the Company hedges its mortgage banking pipeline by entering into forward contracts for the future delivery of mortgage

loans to third party investors and entering into IRLCs with potential borrowers to fund specific mortgage loans that will be sold into the secondary market.

To facilitate the hedging of the loans, the Company has elected the fair value option for loans originated and intended for sale in the secondary market under mandatory pricing agreements.

1 unchanged sentence

Refer to Note 13 for further information on derivative financial instruments.

During the three months ended March 31, 2021 and 2020, the Company originated mortgage loans held-for-sale of $ 223.9 million and $ 215.4 million, respectively, and sold $ 241.6 million and $ 225.5 million of mortgage loans, respectively, into the secondary market.

The following table presents the components of income from mortgage banking activities for the three months ended March 31, 2021 and 2020.

Three Months Ended March 31,

During the three months ended June 30, 2021 and 2020, the Company originated mortgage loans held-for-sale of $ 163.3 million and $ 211.9 million, respectively, and sold $ 151.5 million and $ 229.2 million of mortgage loans, respectively, into the secondary market.

During the six months ended June 30, 2021 and 2020, the Company originated mortgage loans held-for-sale of $ 387.2 million and $ 427.3 million, respectively, and sold $ 393.1 million and $ 454.7 million of mortgage loans, respectively, into the secondary market.

The following table presents the components of income from mortgage banking activities for the three and six months ended June 30, 2021 and 2020.

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

(in thousands) 2021 2020 2021 2020

1 unchanged sentence

(Loss) gain resulting from the change in fair value of loans held-for-sale 118 ( 1,255 ) ( 744 ) ( 939 )

Gain resulting from the change in fair value of derivatives ( 887 ) ( 991 )

(Loss) gain resulting from the change in fair value of derivatives ( 1,031 ) 499 ( 1,918 ) ( 492 )

Net revenue from mortgage banking activities $ 2,674 $ 3,408 $ 8,424 $ 7,076

6 unchanged sentences

The Company had various interest rate swap agreements designated and qualifying as accounting hedges during the reported periods.

Designating an interest rate swap as an accounting hedge allows the Company to recognize gains and losses, less any ineffectiveness, in the condensed consolidated statements of income within the same period that the hedged item affects earnings.

Designating an interest rate swap as an accounting hedge allows the Company to recognize gains and losses, in the condensed consolidated statements of income within the same period that the hedged item affects earnings.

The Company includes the gain or loss on the hedged items in the same line item as the offsetting loss or gain on the related interest rate swaps.

3 unchanged sentences

The fair value of derivative instruments with a positive fair value are reported in accrued income and other assets in the condensed consolidated balance sheets, while derivative instruments with a negative fair value are reported in accrued expenses and other liabilities in the condensed consolidated balance sheets.

The following table presents amounts that were recorded on the condensed consolidated balance sheets related to cumulative basis adjustments for interest rate swap derivatives designated as fair value accounting hedges as of March 31, 2021 and December 31, 2020.

(in thousands) Carrying amount of the hedged asset Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets

Line item in the condensed consolidated balance sheets in which the hedged item is included March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020

Line item in the condensed consolidated balance sheets in which the hedged item is included June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020

Securities available-for-sale (1)

1 unchanged sentence

(1) These amounts include the amortized cost basis of closed portfolios used to designate hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship.

The designated hedged items were $ 50.0 million and $ 88.2 million, at March 31, 2021 and December 31, 2020.

The following tables present a summary of interest rate swap derivatives designated as fair value accounting hedges of fixed-rate receivables used in the Company’s asset/liability management activities at March 31, 2021 and December 31, 2020, identified by the underlying interest rate-sensitive instruments.

The designated hedged items were $ 50.0 million and $ 88.2 million, at June 30, 2021 and December 31, 2020.

The following tables present a summary of interest rate swap derivatives designated as fair value accounting hedges of fixed-rate receivables used in the Company’s asset/liability management activities at June 30, 2021 and December 31, 2020, identified by the underlying interest rate-sensitive instruments.

(dollars in thousands)

March 31, 2021

June 30, 2021

Notional Value Weighted- Average Remaining Maturity (years) Weighted-Average Ratio

1 unchanged sentence

Securities available-for-sale $ 50,000 3.3 $ ( 2,835 ) 3-month LIBOR 2.33 %

Total at March 31, 2021 $ 50,000 3.6 $ ( 2,992 ) 3-month LIBOR 2.33 %

Total at June 30, 2021 $ 50,000 3.3 $ ( 2,835 ) 3-month LIBOR 2.33 %

In March 2021, the Company terminated fair value hedging relationships with a notional value of $ 38.2 million associated with agency mortgage-backed securities available-for-sale, which resulted in swap termination payments to counterparties totaling $ 1.9 million.

7 unchanged sentences

In June 2020, the Company terminated all fair value hedging relationships associated with loans, which resulted in swap termination payments to counterparties totaling $ 46.1 million.

The corresponding loan fair value hedging adjustment as of the date of termination is being amortized over the remaining lives of the designated loans, which have a weighted average term to maturity of 12.86 years as of March 31, 2021.

The following tables present a summary of interest rate swap derivatives designated as cash flow accounting hedges of variable-rate liabilities used in the Company’s asset/liability management activities at March 31, 2021 and December 31, 2020.

(dollars in thousands)

March 31, 2021

June 30, 2021

Notional Weighted- Average Remaining Maturity Weighted-Average Ratio

9 unchanged sentences

These derivative financial instruments were entered into for the purpose of managing the interest rate risk of certain assets and liabilities.

The Company pledged $ 23.4 million and $ 30.6 million of cash collateral to counterparties as security for its obligations related to these interest rate swap transactions at March 31, 2021 and December 31, 2020, respectively.

The Company pledged $ 21.0 million and $ 30.6 million of cash collateral to counterparties as security for its obligations related to these interest rate swap transactions at June 30, 2021 and December 31, 2020, respectively.

Collateral posted and received is dependent on the market valuation of the underlying hedges.

The following table presents the notional amount and fair value of interest rate swaps, IRLCs and forward contracts utilized by the Company at March 31, 2021 and December 31, 2020.

March 31, 2021 December 31, 2020

The following table presents the notional amount and fair value of interest rate swaps, IRLCs and forward contracts utilized by the Company at June 30, 2021 and December 31, 2020.

June 30, 2021 December 31, 2020

(in thousands) Notional

3 unchanged sentences

IRLCs $ 47,493 $ 818 $ 108,095 $ 3,361

Forward contracts 81,500 721 — —

Total contracts

11 unchanged sentences

Fair values of IRLCs and forward contracts were estimated using changes in mortgage interest rates from the date the Company entered into the IRLC and the balance sheet date.

The following table presents the effects of the Company’s cash flow hedge relationships on the condensed consolidated statements of comprehensive income during the three months ended March 31, 2021 and 2020.

Amount of Gain (Loss )Recognized in Other Comprehensive Income (Loss) in The Three Months Ended

(in thousands) March 31, 2021 March 31, 2020

The following table presents the effects of the Company’s cash flow hedge relationships on the condensed consolidated statements of comprehensive income during the three and six months ended June 30, 2021 and 2020.

Amount of Gain (Loss )Recognized in Other Comprehensive Income Loss in The Three Months Ended Amount of Loss Recognized in Other Comprehensive Income Gain (Loss) in The Six Months Ended

(in thousands) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

Interest rate swap agreements $ ( 54 ) $ ( 509 ) $ 6,226 $ ( 13,967 )

The following table summarizes the periodic changes in the fair value of derivatives not designated as hedging instruments on the condensed consolidated statements of income for the three months ended March 31, 2021 and 2020.

Amount of Gain / (Loss) Recognized in the Three Months Ended

(in thousands) March 31, 2021 March 31, 2020

Amount of Gain / (Loss) Recognized in the Three Months Ended Amount of Gain / (Loss) Recognized in the Six Months Ended

(in thousands) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

Asset Derivatives

1 unchanged sentence

IRLCs $ ( 292 ) $ ( 1,781 ) $ ( 2,541 ) $ ( 628 )

Forward contracts 1,361 —

Liability Derivatives

Derivatives not designated as hedging instruments

IRLCs — — — —

Forward contracts $ ( 738 ) $ 2,281 $ 623 $ 136

The following table presents the effects of the Company’s interest rate swap agreements on the condensed consolidated statements of income during the three months ended March 31, 2021 and 2020.

The following table presents the effects of the Company’s interest rate swap agreements on the condensed consolidated statements of income during the three and six months ended June 30, 2021 and 2020.

(in thousands)

Line item in the condensed consolidated statements of income

Three Months Ended

March 31, 2021 March 31, 2020

Three Months Ended Six Months Ended

June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

Interest income

8 unchanged sentences

Total interest expense

1,445 1,182 2,853 1,810

Net interest income

1 unchanged sentence

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, included in stockholders' equity, for the three months ended March 31, 2021 and 2020, respectively, are presented in the table below.

The components of accumulated other comprehensive loss, included in stockholders' equity, for the six months ended June 30, 2021 and 2020, respectively, are presented in the table below.

(in thousands) Available-For-Sale Securities Cash Flow Hedges Total

4 unchanged sentences

Other comprehensive (loss) income - net of tax $ ( 632 ) $ 4,917 $ 4,285

Balance, March 31, 2021 $ ( 1,219 ) $ ( 12,701 ) $ ( 13,920 )

Balance, June 30, 2021 $ ( 164 ) $ ( 12,747 ) $ ( 12,911 )

Balance, January 1, 2020 $ ( 4,388 ) $ ( 9,803 ) $ ( 14,191 )

4 unchanged sentences

Other comprehensive income (loss) - net of tax 3,000 ( 9,947 ) ( 6,947 )

Balance, March 31, 2020 $ ( 239 ) $ ( 19,627 ) $ ( 19,866 )

Balance, June 30, 2020 $ ( 1,388 ) $ ( 19,750 ) $ ( 21,138 )

The components of accumulated other comprehensive loss, included in stockholders' equity, for the three months ended June 30, 2021 and 2020, respectively, are presented in the table below.

(in thousands) Available-For-Sale Securities Cash Flow Hedges Total

Balance, April 1, 2021 $ ( 1,219 ) $ ( 12,701 ) $ ( 13,920 )

Net unrealized holding gains (losses) recorded within other comprehensive income before income tax 1,388 ( 54 ) 1,334

Other comprehensive gain (loss) before tax 1,388 ( 54 ) 1,334

Income tax (benefit) provision ( 333 ) 8 ( 325 )

Other comprehensive (loss) income - net of tax $ 1,055 $ ( 46 ) $ 1,009

Balance, June 30, 2021 $ ( 164 ) $ ( 12,747 ) $ ( 12,911 )

Balance, April 1, 2020 $ ( 239 ) $ ( 19,627 ) $ ( 19,866 )

Net change in unrealized loss ( 1,498 ) ( 509 ) ( 2,007 )

Other comprehensive loss before tax ( 1,498 ) ( 509 ) ( 2,007 )

Income tax benefit ( 349 ) ( 386 ) ( 735 )

Other comprehensive income (loss) - net of tax ( 1,149 ) ( 123 ) ( 1,272 )

Balance, June 30, 2020 $ ( 1,388 ) $ ( 19,750 ) $ ( 21,138 )

Recent Accounting Pronouncements

31 unchanged sentences

The Company has formed an implementation committee and has engaged a third-party consultant to assist in developing current expected credit losses (“CECL”) models using appropriate methodologies.

ASU 2019-04 - Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (April 2019)

The amendments in this ASU clarify or correct the guidance in ASC Topic 326, Topic 815 and Topic 825.

With respect to Topic 326, ASU 2019-04 addresses a number of issues as it relates to the CECL standard including consideration of accrued interest, recoveries, variable-rate financial instruments, prepayments, extension and renewal options, among other things, in the measurement of expected credit losses.

The amendments to Topic 326 have the same effective dates as ASU 2016-13 and the Company is currently evaluating the potential impact of these amendments on the condensed consolidated financial statements.

With respect to Topic 815, ASU 2019-04 clarifies issues related to partial-term hedges, hedged debt securities, and transitioning from a quantitative method of assessing hedge effectiveness to a more simplified method.

The amendments to Topic 815 were effective for interim and annual reporting periods beginning after December 15, 2019 and did not have a material impact on the condensed consolidated financial statements.

With respect to Topic 825, ASU 2019-04 addresses the scope of the guidance, the requirement for remeasurement under ASC Topic 820 when using the measurement alternative, certain disclosure requirements, and which equity securities must be remeasured at historical exchanges rates.

The amendments to Topic 825 were effective for interim and annual reporting periods beginning after December 15, 2019 and did not have a material impact on the condensed consolidated financial statements.

Coronavirus Aid, Relief and Economic Security Act (“CARES Act”)

11 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