What changed in this filing

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Item 1. Financial Statements

2023-08-03 compared with 2023-05-04 · 260 added, 154 removed, 1115 unchanged (27% of the section changed)

37 unchanged sentences

4,000,000 shares authorized;

115,000 Series A shares, $ 1,000 per share liquidation preference, issued and outstanding at March 31, 2023 and December 31, 2022, respectively

115,000 Series A shares, $ 1,000 per share liquidation preference, issued and outstanding at June 30, 2023 and December 31, 2022, respectively

110,548 110,548

1 unchanged sentence

40,000,000 shares authorized;

22,111,454 and 22,214,913 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

21,854,800 and 22,214,913 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

Capital surplus 442,886 449,196

4 unchanged sentences

The accompanying notes are an integral part of the consolidated financial statements.

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MIDLAND STATES BANCORP, INC.

1 unchanged sentence

(dollars in thousands, except per share data)

Three Months Ended March 31,

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

2023 2022 2023 2022

Interest income:

56 unchanged sentences

The accompanying notes are an integral part of the consolidated financial statements.

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MIDLAND STATES BANCORP, INC.

1 unchanged sentence

(dollars in thousands)

Three Months Ended March 31,

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

2023 2022 2023 2022

Net income $ 21,575 $ 21,883 $ 43,347 $ 42,632

Other comprehensive income (loss):

Other comprehensive loss:

Investment securities available for sale:

Unrealized gains (losses) that occurred during the period 5,364 ( 50,776 )

Unrealized losses that occurred during the period ( 8,020 ) ( 32,659 ) ( 2,656 ) ( 83,435 )

Recapture of credit loss expense — — — ( 221 )

Reclassification adjustment for realized net losses on sales of investment securities included in net income

869 101 1,517 101

Income tax effect 1,930 8,953 308 22,977

1 unchanged sentence

Cash flow hedges:

Net unrealized derivative gains on cash flow hedges 2,206 5,105

Net unrealized derivative (losses) gains on cash flow hedges ( 2,331 ) ( 2,010 ) ( 125 ) 3,095

Income tax effect 630 553 34 ( 851 )

Change in cash flow hedges, net of tax ( 1,701 ) ( 1,457 ) ( 91 ) 2,244

Other comprehensive income (loss), net of tax 6,000 ( 33,272 )

Total comprehensive income $ 27,772 $ ( 12,523 )

Other comprehensive loss, net of tax ( 6,922 ) ( 25,062 ) ( 922 ) ( 58,334 )

Total comprehensive income (loss) $ 14,653 $ ( 3,179 ) $ 42,425 $ ( 15,702 )

The accompanying notes are an integral part of the consolidated financial statements .

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MIDLAND STATES BANCORP, INC.

8 unchanged sentences

shareholders'

Balances, March 31, 2023 $ 110,548 $ 221 $ 447,471 $ 295,200 $ ( 77,797 ) $ 775,643

Net income — — — 21,575 — 21,575

Other comprehensive loss — — — — ( 6,922 ) ( 6,922 )

Common dividends declared ($ 0.30 per share)

— — — ( 6,659 ) — ( 6,659 )

Preferred dividends declared ($ 19.375 per share)

— — — ( 2,228 ) — ( 2,228 )

Common stock repurchased — ( 3 ) ( 6,163 ) — — ( 6,166 )

Share-based compensation expense — — 567 — — 567

Issuance of common stock under employee benefit plans — 1,011 — — 1,011

Balances, June 30, 2023 $ 110,548 $ 218 $ 442,886 $ 307,888 $ ( 84,719 ) $ 776,821

Balances, December 31, 2022 $ 110,548 $ 222 $ 449,196 $ 282,405 $ ( 83,797 ) $ 758,574

Net income — — — 43,347 — 43,347

Other comprehensive income — — — — 6,000 6,000

Other comprehensive loss — — — — ( 922 ) ( 922 )

Common dividends declared ($ 0.60 per share)

5 unchanged sentences

Issuance of common stock under employee benefit plans — — 1,461 — — 1,461

Balances, June 30, 2023 $ 110,548 $ 218 $ 442,886 $ 307,888 $ ( 84,719 ) $ 776,821

Balances, March 31, 2022 $ — $ 220 $ 446,044 $ 226,757 $ ( 28,035 ) $ 644,986

Net income — — — 21,883 — 21,883

Other comprehensive loss — — — — ( 25,062 ) ( 25,062 )

Common dividends declared ($ 0.29 per share)

— — — ( 6,470 ) — ( 6,470 )

Share-based compensation expense — — 519 — — 519

Issuance of common stock under employee benefit plans — 1 331 — — 332

Balances, June 30, 2022 $ — $ 221 $ 446,894 $ 242,170 $ ( 53,097 ) $ 636,188

Balances, December 31, 2021 $ — $ 221 $ 445,907 $ 212,472 $ 5,237 $ 663,837

6 unchanged sentences

Issuance of common stock under employee benefit plans — 1 1,049 — — 1,050

Balances, March 31, 2022 $ — $ 220 $ 446,044 $ 226,757 $ ( 28,035 ) $ 644,986

Balances, June 30, 2022 $ — $ 221 $ 446,894 $ 242,170 $ ( 53,097 ) $ 636,188

The accompanying notes are an integral part of the consolidated financial statements.

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MIDLAND STATES BANCORP, INC.

1 unchanged sentence

(dollars in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

11 unchanged sentences

Loss on sales of investment securities, net 1,517 101

Gain on repurchase of subordinated debt ( 676 ) —

Gain on sales of other real estate owned ( 819 ) 120

14 unchanged sentences

Purchases of equity securities ( 192 ) ( 379 )

Proceeds from sales of equity securities 5,148 —

Net increase in loans ( 76,502 ) ( 634,229 )

2 unchanged sentences

Purchases of nonmarketable equity securities ( 66,572 ) ( 1,860 )

Proceeds from sales of nonmarketable equity securities 4,385 —

Proceeds from redemptions of nonmarketable equity securities 65,897 2,500

Proceeds from sales of other real estate owned 7,346 505

Proceeds from settlements of company-owned life insurance — 1,337

Net cash acquired in acquisitions — 60,275

Net cash used in investing activities ( 185,842 ) ( 511,449 )

4 unchanged sentences

Payments made on FHLB borrowings and other borrowings ( 11,131,000 ) ( 725,000 )

Payments made on subordinated debt ( 5,845 ) —

Cash dividends paid on preferred stock ( 4,456 ) —

Cash dividends paid on common stock ( 13,408 ) ( 12,934 )

Redemption of Series G preferred stock — ( 171 )

Common stock repurchased ( 8,967 ) ( 1,109 )

1 unchanged sentence

Net cash provided by (used in) financing activities 125,153 ( 53,282 )

Net decrease in cash and cash equivalents ( 22,321 ) ( 348,107 )

Net increase (decrease) in cash and cash equivalents 64 ( 410,254 )

Cash and cash equivalents:

6 unchanged sentences

Supplemental disclosures of noncash investing and financing activities:

Transfer of loans to loans held for sale — 74,997

Transfer of loans to other real estate owned — 102

Right of use assets obtained in exchange for lease obligations 1,348 121

Transfer of loan servicing rights held for sale to loan servicing rights, at lower of cost or market 20,745 —

The accompanying notes are an integral part of the consolidated financial statements .

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MIDLAND STATES BANCORP, INC.

38 unchanged sentences

In 2021, the UK Financial Conduct Authority delayed the intended cessation date of certain tenors of LIBOR to June 30, 2023.

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In December 2022, to ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, the FASB issued ASU No.

7 unchanged sentences

Investment Securities Available for Sale

Investment securities available for sale at March 31, 2023 and December 31, 2022 were as follows:

March 31, 2023

Investment securities available for sale at June 30, 2023 and December 31, 2022 were as follows:

June 30, 2023

(dollars in thousands) Amortized

21 unchanged sentences

Total available for sale securities $ 873,023 $ 601 $ 105,390 $ 768,234

The following is a summary of the amortized cost and fair value of the investment securities available for sale, by maturity, at March 31, 2023.

Expected maturities may differ from contractual maturities in mortgage-backed securities

because the mortgages underlying the securities may be prepaid without penalties.

The following is a summary of the amortized cost and fair value of the investment securities available for sale, by maturity, at June 30, 2023.

Expected maturities may differ from contractual maturities in mortgage-backed securities because

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the mortgages underlying the securities may be prepaid without penalties.

The maturities of all other investment securities available for sale are based on final contractual maturity.

7 unchanged sentences

Total available for sale securities $ 988,643 $ 882,715

Proceeds and gross realized gains and losses on sales of investment securities available for sale for the three months ended March 31, 2023 and 2022 are summarized as follows:

Three Months Ended March 31,

Proceeds and gross realized gains and losses on sales of investment securities available for sale for the three and six months ended June 30, 2023 and 2022 are summarized as follows:

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

(dollars in thousands) 2023 2022 2023 2022

3 unchanged sentences

Gross realized losses on sales ( 869 ) ( 817 ) ( 1,855 ) ( 817 )

Unrealized losses and fair values for investment securities available for sale as of March 31, 2023 and December 31, 2022, for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are summarized as follows:

March 31, 2023

Unrealized losses and fair values for investment securities available for sale as of June 30, 2023 and December 31, 2022, for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are summarized as follows:

June 30, 2023

Less than 12 Months 12 Months or more Total

12 unchanged sentences

Total available for sale securities $ 208,671 $ 3,111 $ 575,046 $ 103,465 $ 783,717 $ 106,576

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December 31, 2022

13 unchanged sentences

Total available for sale securities $ 241,906 $ 15,132 $ 463,399 $ 90,258 $ 705,305 $ 105,390

At March 31, 2023, 329 investment securities available for sale had unrealized losses with aggregate depreciation of 12.42 % from their amortized cost basis.

At June 30, 2023, 320 investment securities available for sale had unrealized losses with aggregate depreciation of 11.93 % from their amortized cost basis.

For all of the above investment securities, the unrealized losses were generally due to changes in interest rates, and unrealized losses were considered to be temporary as the fair value is expected to recover as the securities approach their respective maturity dates.

2 unchanged sentences

NOTE 4 – LOANS

The following table presents total loans outstanding by portfolio class, as of March 31, 2023 and December 31, 2022:

(dollars in thousands) March 31,

The following table presents total loans outstanding by portfolio class, as of June 30, 2023 and December 31, 2022:

(dollars in thousands) June 30,

2023 December 31,

15 unchanged sentences

Total loans $ 6,367,344 $ 6,306,467

Total loans include net deferred loan costs of $ 5.7 million and $ 4.4 million at March 31, 2023 and December 31, 2022, respectively, and unearned discounts of $ 67.2 million and $ 62.6 million within the lease financing portfolio at March 31, 2023 and December 31, 2022, respectively.

At March 31, 2023, the Company had residential real estate loans held for sale totaling $ 2.7 million, compared to $ 1.3 million at December 31, 2022.

The Company sold commercial real estate, residential real estate and consumer loans with proceeds totaling $ 6.3 million and $ 103.1 million during the three months ended March 31, 2023 and 2022, respectively.

Total loans include net deferred loan costs of $ 5.7 million and $ 4.4 million at June 30, 2023 and December 31, 2022, respectively, and unearned discounts of $ 67.5 million and $ 62.6 million within the lease financing portfolio at June 30, 2023 and December 31, 2022, respectively.

At June 30, 2023, the Company had residential real estate loans held for sale totaling $ 5.6 million, compared to $ 1.3 million at December 31, 2022.

The Company sold loans and leases with proceeds totaling $ 28.0 million and $ 34.3 million during the three and six months ended June 30, 2023, respectively, and $ 100.4 million and $ 203.5 million during the three and six months ended June 30, 2022, respectively.

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Classifications of Loan Portfolio

4 unchanged sentences

Commercial loans are predominately secured by equipment, inventory, accounts receivable, and other sources of repayment.

Commercial FHA warehouse lines of $ 10.3 million and $ 25.0 million as of March 31, 2023 and December 31, 2022, respectively, were included in this classification.

Commercial FHA warehouse lines of $ 30.5 million and $ 25.0 million as of June 30, 2023 and December 31, 2022, respectively, were included in this classification.

Commercial real estate —Loans secured by real estate occupied by the borrower for ongoing operations, including loans to borrowers engaged in agricultural production, and non-owner occupied real estate leased to one or more tenants, including commercial office, industrial, special purpose, retail and multi-family residential real estate loans.

14 unchanged sentences

These loans were made in the ordinary course of business upon substantially the same terms, including collateralization and interest rates prevailing at the time.

The aggregate loans outstanding to the Company's directors, executive officers, principal shareholders and their affiliates totaled $ 19.5 million and $ 19.8 million at March 31, 2023 and December 31, 2022, respectively.

The new loans, other additions, repayments and other reductions for the three months ended March 31, 2023 and 2022, are summarized as follows:

Three Months Ended March 31,

The aggregate loans outstanding to the Company's directors, executive officers, principal shareholders and their affiliates totaled $ 21.6 million and $ 19.8 million at June 30, 2023 and December 31, 2022, respectively.

The new loans, other additions, repayments and other reductions for the three and six months ended June 30, 2023 and 2022, are summarized as follows:

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

(dollars in thousands) 2023 2022 2023 2022

3 unchanged sentences

Ending balance $ 21,569 $ 23,097 $ 21,569 $ 23,097

The following table represents, by loan portfolio segment, a summary of changes in the allowance for credit losses on loans for the three months ended March 31, 2023 and 2022:

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The following table represents, by loan portfolio segment, a summary of changes in the allowance for credit losses on loans for the three and six months ended June 30, 2023 and 2022:

Commercial Loan Portfolio Other Loan Portfolio

4 unchanged sentences

financing Total

Changes in allowance for credit losses on loans for the three months ended March 31, 2023:

Changes in allowance for credit losses on loans for the three months ended June 30, 2023:

Balance, beginning of period $ 15,762 $ 28,216 $ 2,442 $ 4,350 $ 4,129 $ 7,168 $ 62,067

3 unchanged sentences

Balance, end of period $ 15,290 $ 29,425 $ 3,189 $ 5,551 $ 3,953 $ 7,542 $ 64,950

Changes in allowance for credit losses on loans for the three months ended March 31, 2022:

Changes in allowance for credit losses on loans for the six months ended June 30, 2023:

Balance, beginning of period $ 14,639 $ 29,290 $ 2,435 $ 4,301 $ 3,599 $ 6,787 $ 61,051

3 unchanged sentences

Balance, end of period $ 15,290 $ 29,425 $ 3,189 $ 5,551 $ 3,953 $ 7,542 $ 64,950

Changes in allowance for credit losses on loans for the three months ended June 30, 2022:

Balance, beginning of period $ 12,621 $ 26,277 $ 816 $ 3,288 $ 2,672 $ 7,264 $ 52,938

Provision for credit losses on loans ( 111 ) 4,284 279 133 415 ( 259 ) 4,741

Charge-offs ( 60 ) ( 2,625 ) — ( 46 ) ( 191 ) ( 499 ) ( 3,421 )

Recoveries 298 ( 62 ) 6 41 98 259 640

Balance, end of period $ 12,748 $ 27,874 $ 1,101 $ 3,416 $ 2,994 $ 6,765 $ 54,898

Changes in allowance for credit losses on loans for the six months ended June 30, 2022:

Balance, beginning of period $ 14,375 $ 22,993 $ 972 $ 2,695 $ 2,558 $ 7,469 $ 51,062

Provision for credit losses on loans 278 7,728 123 717 672 ( 645 ) 8,873

Charge-offs ( 2,214 ) ( 2,852 ) ( 6 ) ( 150 ) ( 496 ) ( 705 ) ( 6,423 )

Recoveries 309 5 12 154 260 646 1,386

Balance, end of period $ 12,748 $ 27,874 $ 1,101 $ 3,416 $ 2,994 $ 6,765 $ 54,898

The Company utilizes a combination of models which measure probability of default and loss given default methodology in determining expected future credit losses.

8 unchanged sentences

As a method for estimating the allowance, a form of migration analysis is used that combines the estimated probability of loans experiencing default events and the losses ultimately associated with the loans experiencing those defaults.

Multiplying one by the other gives the Company its loss rate, which is then applied to the loan portfolio balance to determine expected future losses.

Multiplying one by

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the other gives the Company its loss rate, which is then applied to the loan portfolio balance to determine expected future losses.

Within the model, the loss given default approach produces segmented loss given default estimates using a loss curve methodology, which is based on historical net losses from charge-off and recovery information.

21 unchanged sentences

Expected Credit Losses

In calculating expected credit losses, the Company individually evaluates loans on nonaccrual status with a balance greater than $ 500,000 , loans past due 90 days or more and still accruing interest, and loans that do not share risk characteristics with other loans in the pool.

The following table presents amortized cost basis of individually evaluated loans on nonaccrual status as of March 31, 2023 and December 31, 2022:

March 31, 2023 December 31, 2022

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with other loans in the pool.

The following table presents amortized cost basis of individually evaluated loans on nonaccrual status as of June 30, 2023 and December 31, 2022:

June 30, 2023 December 31, 2022

(dollars in thousands) Nonaccrual with allowance Nonaccrual with no allowance Total nonaccrual Nonaccrual with allowance Nonaccrual with no allowance Total nonaccrual

14 unchanged sentences

Total loans $ 29,443 $ 24,940 $ 54,383 $ 19,445 $ 22,531 $ 41,976

There was no interest income recognized on nonaccrual loans during the three months ended March 31, 2023 and 2022 while the loans were in nonaccrual status.

Additional interest income that would have been recorded on nonaccrual loans had they been current in accordance with their original terms was $ 0.8 million for both the three months ended March 31, 2023 and 2022.

There was no interest income recognized on nonaccrual loans during the three and six months ended June 30, 2023 and 2022 while the loans were in nonaccrual status.

Additional interest income that would have been recorded on nonaccrual loans had they been current in accordance with their original terms was $ 0.8 million and $ 1.6 million for the three and six months ended June 30, 2023 and $ 0.5 million and $ 1.3 million for the three and six months ended June 30, 2022, respectively.

Collateral Dependent Financial Assets

2 unchanged sentences

the prospects for support from any financially responsible guarantors;

and the nature and degree of protection provided by the cash flow and value of any underlying collateral.

and the nature and degree of

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protection provided by the cash flow and value of any underlying collateral.

However, as other sources of repayment become inadequate over time, the significance of the collateral’s value increases and the loan may become collateral dependent.

The table below presents the value of individually evaluated, collateral dependent loans by loan class, for borrowers experiencing financial difficulty, as of March 31, 2023 and December 31, 2022:

The table below presents the value of individually evaluated, collateral dependent loans by loan class, for borrowers experiencing financial difficulty, as of June 30, 2023 and December 31, 2022:

Type of Collateral

(dollars in thousands) Real Estate Blanket Lien Equipment Total

March 31, 2023

June 30, 2023

Commercial $ 2,053 $ 969 $ — $ 3,022

14 unchanged sentences

Total collateral dependent loans $ 26,077 $ 1,604 $ — $ 27,681

The aging status of the recorded investment in loans by portfolio as of March 31, 2023 was as follows:

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The aging status of the recorded investment in loans by portfolio as of June 30, 2023 was as follows:

Accruing loans

43 unchanged sentences

Total loans $ 17,328 $ 15,044 $ 1,173 $ 33,545 $ 41,976 $ 6,230,946 $ 6,306,467

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Loan Restructurings

On January 1, 2023, the Company adopted the accounting guidance in ASU No.

The Company adopted the accounting guidance in ASU No.

2022-02, effective as of January 1, 2023, which eliminates the recognition and measurement of a troubled debt restructuring ("TDR").

14 unchanged sentences

If the borrower continues to experience financial difficulty, another concession such as an interest rate reduction or principal forgiveness, may be granted.

During the three months ended March 31, 2023 the Company restructured two loans for borrowers experiencing financial difficulties with principal balances totaling $ 0.1 million.

One of the restructured loans was provided a term extension with the other receiving an interest rate reduction and a term extension.

During the three months ended June 30, 2023 the Company restructured three loans for borrowers experiencing financial difficulties with principal balances totaling $ 0.5 million.

Two of the restructured loans were provided a term extension with the other receiving an interest rate reduction and a term extension.

During the six months ended June 30, 2023 the Company restructured five loans for borrowers experiencing financial difficulties with principal balances totaling $ 0.6 million.

Three of the restructured loans were provided a term extension with the other two receiving an interest rate reduction and a term extension.

Credit Quality Monitoring

14 unchanged sentences

All loans in the commercial loan portfolio have an assigned relationship manager, and most borrowers provide periodic financial and operating information that allows the relationship managers to stay abreast of credit quality during the life of the loans.

The risk ratings of loans in the commercial loan portfolio are reassessed at least annually, with loans below an acceptable risk rating reassessed more frequently and reviewed by various individuals within the Company at least quarterly.

The risk ratings of loans in the commercial loan portfolio are reassessed at

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least annually, with loans below an acceptable risk rating reassessed more frequently and reviewed by various individuals within the Company at least quarterly.

The Company maintains a centralized independent loan review function that monitors the approval process and ongoing asset quality of the loan portfolio, including the accuracy of loan grades.

11 unchanged sentences

Loans not graded in the commercial loan portfolio are monitored by aging status and payment activity.

The following tables present the recorded investment of the commercial loan portfolio by risk category as of March 31, 2023 and December 31, 2022:

March 31, 2023

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The following tables present the recorded investment of the commercial loan portfolio by risk category as of June 30, 2023 and December 31, 2022:

June 30, 2023

Amortized Cost Basis by Origination Year

56 unchanged sentences

Total commercial loans $ 455,992 $ 1,528,190 $ 879,834 $ 370,485 $ 234,782 $ 436,730 $ 512,524 $ 4,418,537

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December 31, 2022

57 unchanged sentences

Total commercial loans $ 1,546,160 $ 927,973 $ 440,732 $ 266,582 $ 121,697 $ 408,276 $ 557,195 $ 4,268,615

The following table presents the gross charge-offs by class of loan and year of origination on the commercial loan portfolio for the three months ended March 31, 2023:

March 31, 2023

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The following table presents the gross charge-offs by class of loan and year of origination on the commercial loan portfolio for the three and six months ended June 30, 2023:

Term Loans by Origination Year

(dollars in thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Total

For the three months ended June 30, 2023

Commercial Commercial $ 10 $ — $ — $ 22 $ 18 $ 60 $ — $ 110

7 unchanged sentences

Total gross commercial charge-offs $ 46 $ 649 $ 102 $ 127 $ 87 $ 1,938 $ — $ 2,949

For the six months ended June 30, 2023

Commercial Commercial $ 10 $ — $ — $ 22 $ 27 $ 71 $ — $ 130

Commercial Other 36 1,208 166 105 69 326 — 1,910

Commercial Real Estate Non-owner occupied — — — — — — — —

Owner occupied — — — — — 1,481 — 1,481

Multi-family — — — — — 809 — 809

Farmland — — — — — — — —

Construction and land development

— — — — — 334 — 334

Total gross commercial charge-offs $ 46 $ 1,208 $ 166 $ 127 $ 96 $ 3,021 $ — $ 4,664

The Company evaluates the credit quality of its other loan portfolios, which includes residential real estate, consumer and lease financing loans, based primarily on the aging status of the loan and payment activity.

Accordingly, loans on nonaccrual status, loans past due 90 days or more and still accruing interest, and loans modified under troubled debt restructurings are considered to be nonperforming for purposes of credit quality evaluation.

The following tables present the recorded investment of our other loan portfolio based on the credit risk profile of loans that are performing and loans that are nonperforming as of March 31, 2023 and December 31, 2022:

March 31, 2023

Accordingly, loans on nonaccrual status and loans past due 90 days or more and still accruing interest are considered to be nonperforming for purposes

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of credit quality evaluation.

June 30, 2023

Amortized Cost Basis by Origination Year

18 unchanged sentences

Total other loans $ 344,745 $ 759,244 $ 352,986 $ 177,065 $ 93,860 $ 162,808 $ 58,099 $ 1,948,807

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December 31, 2022

19 unchanged sentences

Total other loans $ 994,715 $ 450,870 $ 218,964 $ 115,741 $ 55,631 $ 139,156 $ 62,775 $ 2,037,852

The following table presents the gross charge-offs by class of loan and year of origination on the other loan portfolio for the three months ended March 31, 2023:

March 31, 2023

The following table presents the gross charge-offs by class of loan and year of origination on the other loan portfolio for the three and six months ended June 30, 2023:

Term Loans by Origination Year

(dollars in thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Total

For the three months ended June 30, 2023

Residential real estate Residential first lien $ — $ — $ — $ 3 $ 7 $ — $ — $ 10

4 unchanged sentences

Total gross other charge-offs $ 18 $ 366 $ 354 $ 68 $ 34 $ 201 $ 44 $ 1,085

For the six months ended June 30, 2023

Residential real estate Residential first lien $ — $ — $ 9 $ 3 $ 7 $ — $ — $ 19

Other residential — — — — — 9 57 66

Consumer Consumer — 1 9 11 31 33 — 85

Consumer other 18 83 39 16 32 250 — 438

Lease financing — 393 535 135 22 76 — 1,161

Total gross other charge-offs $ 18 $ 477 $ 592 $ 165 $ 92 $ 368 $ 57 $ 1,769

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NOTE 5 – PREMISES, EQUIPMENT AND LEASES

A summary of premises and equipment at March 31, 2023 and December 31, 2022 is as follows:

A summary of premises and equipment at June 30, 2023 and December 31, 2022 is as follows:

June 30, December 31,

(dollars in thousands) 2023 2022

6 unchanged sentences

Premises and equipment, net $ 81,006 $ 78,293

Depreciation expense for the three months ended March 31, 2023 and 2022 was $ 1.2 million and $ 1.3 million, respectively.

Depreciation expense for the three and six months ended June 30, 2023 was $ 1.2 million and $ 2.4 million, respectively, and $ 1.2 million and $ 2.4 million for the three and six months ended June 30, 2022, respectively.

The Company has entered into operating leases, primarily for banking offices and operating facilities, which have remaining lease terms of 8 months to 15 years, some of which may include options to extend the lease terms for up to an additional 10 years.

The options to extend are included if they are reasonably certain to be exercised.

The Company had operating lease right-of-use assets of $ 7.7 million and $ 7.0 million as of March 31, 2023 and December 31, 2022, respectively, included in premises and equipment on our consolidated balance sheets.

The operating lease liabilities of the Company were $ 9.6 million and $ 8.9 million as of March 31, 2023 and December 31, 2022, respectively, and are included in accrued interest payable and other liabilities on our consolidated balance sheets.

Information related to operating leases for the three months ended March 31, 2023 and 2022 was as follows:

Three Months Ended March 31,

The Company had operating lease right-of-use assets of $ 7.5 million and $ 7.0 million as of June 30, 2023 and December 31, 2022, respectively, included in premises and equipment on our consolidated balance sheets.

The operating lease liabilities of the Company were $ 9.3 million and $ 8.9 million as of June 30, 2023 and December 31, 2022, respectively, and are included in accrued interest payable and other liabilities on our consolidated balance sheets.

Information related to operating leases for the three and six months ended June 30, 2023 and 2022 was as follows:

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

(dollars in thousands) 2023 2022 2023 2022

2 unchanged sentences

Right-of-use assets obtained in exchange for lease obligations 218 — 1,348 121

Weighted average remaining lease term 8.10 years 7.43 years

Weighted average remaining lease term 8.0 years 7.4 years 8.0 years 7.4 years

Weighted average discount rate 3.29 % 2.89 % 3.29 % 2.89 %

The projected minimum rental payments under the terms of the leases as of March 31, 2023 were as follows:

The projected minimum rental payments under the terms of the leases as of June 30, 2023 were as follows:

(dollars in thousands) Amount

5 unchanged sentences

Total operating lease liabilities $ 9,267

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NOTE 6 – LOAN SERVICING RIGHTS

A summary of loan servicing rights at March 31, 2023 and December 31, 2022 is as follows:

March 31, 2023 December 31, 2022

A summary of loan servicing rights at June 30, 2023 and December 31, 2022 is as follows:

June 30, 2023 December 31, 2022

(dollars in thousands) Serviced Loans Carrying Value Serviced Loans Carrying Value

Commercial FHA $ 2,165,150 $ 20,473 $ — $ —

SBA $ 46,279 $ 649 $ 46,081 $ 656

4 unchanged sentences

During the third quarter of 2022, the Company committed to a plan to sell our commercial FHA servicing portfolio and, therefore, transferred $ 24.0 million to commercial FHA servicing rights held for sale.

Servicing rights held for sale are recorded at the lower of their carrying value or fair value less estimated costs to sell.

At March 31, 2023 and December 31, 2022, the $ 20.7 million carrying amount of the asset reflected its estimated fair value less estimated selling costs.

Fair value was based on a letter of intent to purchase from an interested buyer.

Changes in our commercial FHA loan servicing rights for the three months ended March 31, 2022 are summarized as follows:

Three Months Ended March 31,

(dollars in thousands) 2022

Loan servicing rights:

Balance, beginning of period $ 27,386

Amortization ( 660 )

Refinancing fee received from third party ( 221 )

Permanent impairment ( 394 )

Balance, end of period $ 26,111

At beginning of period $ 28,368

At end of period 27,941

At June 30, 2023, the Company abandoned its plans to sell this servicing asset and removed this asset from held for sale at lower of cost or fair value with no gain or loss recognized.

NOTE 7 – DERIVATIVE INSTRUMENTS

5 unchanged sentences

Changes in the fair value of derivative financial instruments are recognized in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income.

The following table summarizes the interest rate lock commitments and forward commitments to sell mortgage-backed securities held by the Company, their notional amount and estimated fair values at March 31, 2023 and December 31, 2022:

Notional amount Fair value gain

(dollars in thousands) March 31,

(dollars in thousands) June 30,

2023 December 31,

2022 March 31,

2022 June 30,

2023 December 31,

1 unchanged sentence

Interest rate lock commitments $ 6,127 $ 2,078 $ 119 $ 49

Forward commitments to sell mortgage-backed securities 8,831 — 55 —

Total $ 14,958 $ 2,078 $ 174 $ 49

Notional amount Fair value loss

(dollars in thousands) March 31,

(dollars in thousands) June 30,

2023 December 31,

2022 March 31,

2022 June 30,

2023 December 31,

3 unchanged sentences

Total $ — $ 11,088 $ — $ 15

During both the three months ended March 31, 2023 and 2022, the Company recognized net gains of $ 0.1 million on derivative instruments in residential mortgage banking revenue in the consolidated statements of income.

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During both the three and six months ended June 30, 2023, the Company recognized net gains of $ 0.1 million on derivative instruments in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income.

During the three and six months ended June 30, 2022, the Company recognized net losses of $ 0.4 million and $ 0.3 million, respectively, on derivative instruments in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income.

Cash Flow Hedges

In the first quarter of 2022, the Company entered into interest rate swap agreements, which qualify as cash flow hedges, to manage the risk of changes in future cash flows due to interest rate fluctuations.

The following table summarizes the Company's receive-fixed, pay-variable interest rate swaps on certain pools of loans indexed to prime at March 31, 2023 and December 31, 2022:

(dollars in thousands) March 31,

The following table summarizes the Company's receive-fixed, pay-variable interest rate swaps on certain pools of loans indexed to prime at June 30, 2023 and December 31, 2022:

(dollars in thousands) June 30,

2023 December 31,

10 unchanged sentences

These derivative contracts do not qualify for hedge accounting.

The notional amounts of the customer derivative instruments and the offsetting counterparty derivative instruments were $ 7.3 million and $ 7.4 million at March 31, 2023 and December 31, 2022, respectively.

The fair value of the customer derivative instruments and the offsetting counterparty derivative instruments was $ 0.3 million at both March 31, 2023 and December 31, 2022, which are included in other assets and other liabilities, respectively, on the consolidated balance sheets.

The notional amounts of the customer derivative instruments and the offsetting counterparty derivative instruments were $ 7.2 million and $ 7.4 million at June 30, 2023 and December 31, 2022, respectively.

The fair value of the customer derivative instruments and the offsetting counterparty derivative instruments was $ 0.5 million at both June 30, 2023 and December 31, 2022, which are included in other assets and other liabilities, respectively, on the consolidated balance sheets.

NOTE 8 – DEPOSITS

The following table summarizes the classification of deposits as of March 31, 2023 and December 31, 2022:

(dollars in thousands) March 31, 2023 December 31, 2022

The following table summarizes the classification of deposits as of June 30, 2023 and December 31, 2022:

(dollars in thousands) June 30, 2023 December 31, 2022

Noninterest-bearing demand $ 1,162,909 $ 1,362,158

5 unchanged sentences

Total deposits $ 6,426,548 $ 6,364,652

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NOTE 9 – SHORT-TERM BORROWINGS

The following table presents the distribution of short-term borrowings and related weighted average interest rates as of March 31, 2023 and December 31, 2022:

The following table presents the distribution of short-term borrowings and related weighted average interest rates as of June 30, 2023 and December 31, 2022:

Repurchase agreements

(dollars in thousands) As of and for the Three Months Ended March 31, 2023 As of and for the Year Ended December 31,2022

(dollars in thousands) As of and for the six months ended June 30, 2023 As of and for the Year Ended December 31,2022

Outstanding at period-end $ 21,783 $ 42,311

7 unchanged sentences

The Bank may be required to provide additional collateral based on the fair value of the underlying securities.

Investment securities with a carrying amount of $ 33.9 million and $ 46.1 million at March 31, 2023 and December 31, 2022, respectively, were pledged for securities sold under agreements to repurchase.

The Company had available lines of credit of $ 207.7 million and $ 12.2 million at March 31, 2023 and December 31, 2022, respectively, from the Federal Reserve Discount Window.

The lines are collateralized by a collateral agreement with respect to a pool of commercial real estate loans and investment securities totaling $ 250.3 million and $ 14.3 million at March 31, 2023 and December 31, 2022, respectively.

There were no outstanding borrowings under these lines at March 31, 2023 and 2022.

At March 31, 2023, the Company had available federal funds lines of credit totaling $ 394.0 million.

These lines of credit were unused at March 31, 2023.

Investment securities with a carrying amount of $ 28.8 million and $ 46.1 million at June 30, 2023 and December 31, 2022, respectively, were pledged for securities sold under agreements to repurchase.

The Company had available lines of credit of $ 184.1 million and $ 12.2 million at June 30, 2023 and December 31, 2022, respectively, from the Federal Reserve Discount Window.

The lines are collateralized by a collateral agreement with respect to a pool of commercial loans and investment securities totaling $ 211.2 million and $ 14.3 million at June 30, 2023 and December 31, 2022, respectively.

There were no outstanding borrowings under these lines at June 30, 2023 and 2022.

At June 30, 2023, the Company had available federal funds lines of credit totaling $ 339.0 million.

These lines of credit were unused at June 30, 2023.

NOTE 10 – FHLB ADVANCES AND OTHER BORROWINGS

The following table summarizes our FHLB advances and other borrowings as of March 31, 2023 and December 31, 2022:

(dollars in thousands) March 31, 2023 December 31, 2022

FHLB advances – fixed rate, fixed term at rates averaging 4.18 % at March 31, 2023 - maturing through February 2028

FHLB advances – putable fixed rate at rates averaging 2.70 % and 2.35 % at March 31, 2023 and December 31, 2022, respectively – maturing through February 2028 with call provisions through February 2024

The following table summarizes our FHLB advances and other borrowings as of June 30, 2023 and December 31, 2022:

(dollars in thousands) June 30, 2023 December 31, 2022

FHLB advances – fixed rate, fixed term at rates averaging 4.18 % at June 30, 2023 - maturing in February 2028

FHLB advances – putable fixed rate at rates averaging 2.70 % and 2.35 % at June 30, 2023 and December 31, 2022, respectively – maturing through February 2028 with call provisions through February 2024

160,000 110,000

FHLB advances –SOFR floater at rates averaging 6.45 % and 5.92 % at March 31, 2023 and December 31, 2022, respectively – maturing in October 2023

FHLB advances –SOFR floater at rates averaging 6.68 % and 5.92 % at June 30, 2023 and December 31, 2022, respectively – maturing in October 2023

100,000 100,000

FHLB advances – Short term fixed rate at rates averaging 4.86 % and 4.31 % at March 31, 2023 and December 31, 2022, respectively– maturing in April 2023

FHLB advances – Short term fixed rate at rates averaging 5.18 % and 4.31 % at June 30, 2023 and December 31, 2022, respectively– maturing in July 2023

260,000 250,000

Total FHLB advances and other borrowings $ 575,000 $ 460,000

The Company’s advances from the FHLB are collateralized by a blanket collateral agreement of qualifying mortgage and home equity line of credit loans and certain commercial real estate loans totaling approximately $ 2.88 billion and $ 2.90 billion at March 31, 2023 and December 31, 2022, respectively.

The Company’s advances from the FHLB are collateralized by a blanket collateral agreement of qualifying mortgage and home equity line of credit loans and certain commercial real estate loans totaling approximately $ 2.97 billion and $ 2.90 billion at June 30, 2023 and December 31, 2022, respectively.

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NOTE 11 – SUBORDINATED DEBT

The following table summarizes the Company’s subordinated debt at March 31, 2023 and December 31, 2022:

The following table summarizes the Company’s subordinated debt at June 30, 2023 and December 31, 2022:

Subordinated debt

1 unchanged sentence

(dollars in thousands) Issued September 2019 Issued September 2019 Issued June 2015 Total

At March 31, 2023

At June 30, 2023

Outstanding amount $ 66,750 $ 27,250 $ — $ 94,000

Carrying amount 66,455 26,949 — 93,404

Current rate 5.00 % 5.50 % 6.50 %

Current rate 5.00 % 5.50 % N/A

At December 31, 2022

8 unchanged sentences

Interest payment terms Semiannually Semiannually Semiannually

During the second quarter of 2023, the Company repurchased $ 6.0 million of the outstanding Fixed to Float Subordinated Notes due September 30, 2029.

The Company recognized a gain of $ 0.7 million which included the discount realized on the repurchase, offset by the remaining unamortized debt issuance costs on the repurchase.

The Company also repurchased the outstanding Fixed Rate Subordinated Notes due June 18, 2025, having an aggregate principal amount of $ 0.6 million, during the second quarter of 2023.

The aggregate repurchase price was 100 % of the aggregate principal amount of the subordinated notes, plus accrued and unpaid interest.

The value of subordinated debentures have been reduced by the debt issuance costs, which are being amortized on a straight line basis through the earlier of the redemption option or maturity date.

4 unchanged sentences

Diluted earnings per common share is calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of shares adjusted for the dilutive effect of common stock awards.

The diluted earnings per common share computation for the three months ended March 31, 2023 and 2022 excluded antidilutive stock options of 265,831 and 15,597 , respectively, because the exercise prices of these stock options exceeded the average market

The diluted earnings per common share computation for the three and six months ended June 30, 2023 and 2022 excluded antidilutive stock options of 375,912 and 60,698 , respectively, because the exercise prices of these stock options exceeded the average market

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prices of the Company’s common shares for those respective periods.

Presented below are the calculations for basic and diluted earnings per common share for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

Presented below are the calculations for basic and diluted earnings per common share for the three and six months ended June 30, 2023 and 2022:

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

(dollars in thousands, except per share data) 2023 2022 2023 2022

32 unchanged sentences

There were no transfers between Levels 1, 2 or 3 during the

three months ended March 31, 2023 or December 31, 2022 for assets measured at fair value on a recurring basis.

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three and six months ended June 30, 2023 or December 31, 2022 for assets measured at fair value on a recurring basis.

The fair value of equity securities is determined using quoted prices or market prices for similar securities (Level 2).

26 unchanged sentences

The fair value of the assets held for sale was based on estimated market prices from independently prepared current appraisals (Level 2).

Assets and liabilities measured and recorded at fair value, including financial assets for which the Company has elected the fair value option, on a recurring and nonrecurring basis at March 31, 2023 and December 31, 2022, are summarized below:

March 31, 2023

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Assets and liabilities measured and recorded at fair value, including financial assets for which the Company has elected the fair value option, on a recurring and nonrecurring basis at June 30, 2023 and December 31, 2022, are summarized below:

June 30, 2023

(dollars in thousands) Carrying

21 unchanged sentences

Loan servicing rights $ 21,611 $ — $ — $ 21,611

Commercial FHA loan servicing rights held for sale 20,745 — 20,745 —

Nonperforming loans 54,844 3,116 42,652 9,076

1 unchanged sentence

Assets held for sale 187 — 187 —

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December 31, 2022

25 unchanged sentences

Assets held for sale 356 — 356 —

There were no assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2023.

The following table provides a reconciliation of activity for Level 3 assets for the three months ended March 31, 2022:

(dollars in thousands) For the three months ended March 31, 2022

Balance, beginning of period $ 935

Total realized in earnings (1)

Total unrealized in other comprehensive income (2)

Net settlements (principal and interest) ( 4 )

Balance, end of period $ 935

(1) Amounts included in interest income from investment securities taxable in the consolidated statements of income.

(2) Represents change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period.

The following table presents losses recognized on assets measured on a nonrecurring basis for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

There were no assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2023 and 2022.

The following table presents losses recognized on assets measured on a nonrecurring basis for the three and six months ended June 30, 2023 and 2022:

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

(dollars in thousands) 2023 2022 2023 2022

3 unchanged sentences

Total losses on assets measured on a nonrecurring basis $ 3,573 $ 11,715 $ 4,676 $ 13,033

The following tables present quantitative information about significant unobservable inputs used in fair value measurements of Level 3 assets measured on a nonrecurring basis at March 31, 2023 and December 31, 2022:

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(dollars in thousands) Fair value Valuation

1 unchanged sentence

input / assumptions Range (weighted average) (1)

March 31, 2023

June 30, 2023

Loan servicing rights:

12 unchanged sentences

Additionally, certain financial instruments and all nonfinancial instruments are excluded from the applicable disclosure requirements.

The Company has elected the fair value option for newly originated commercial and residential loans held for sale.

The Company has elected the fair value option for newly originated residential loans held for sale.

These loans are intended for sale and are hedged with derivative instruments.

1 unchanged sentence

to mitigate accounting mismatches in cases where hedge accounting is complex and to achieve operational simplification.

The following table presents the difference between the aggregate fair value and the aggregate remaining principal balance for loans for which the fair value option has been elected as of March 31, 2023 and December 31, 2022:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(dollars in thousands) Aggregate

3 unchanged sentences

Residential loans held for sale $ 5,632 $ 212 $ 5,421 $ 1,286 $ 42 $ 1,244

The following table presents the amount of gains (losses) from fair value changes included in income before income taxes for financial assets carried at fair value for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

The following table presents the amount of gains (losses) from fair value changes included in income before income taxes for financial assets carried at fair value for the three and six months ended June 30, 2023 and 2022:

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

(dollars in thousands) 2023 2022 2023 2022

2 unchanged sentences

Total loans held for sale $ 50 $ 86 $ 149 $ ( 277 )

The carrying values and estimated fair value of certain financial instruments not carried at fair value at March 31, 2023 and December 31, 2022 were as follows:

March 31, 2023

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The carrying values and estimated fair value of certain financial instruments not carried at fair value at June 30, 2023 and December 31, 2022 were as follows:

June 30, 2023

(dollars in thousands) Carrying

5 unchanged sentences

Federal funds sold 1,058 1,058 1,058 — —

Loans, net 6,292,204 6,297,002 — — 6,297,002

Loans 6,367,344 6,153,641 — — 6,153,641

Accrued interest receivable 21,000 21,000 — 21,000 —

12 unchanged sentences

Federal funds sold 7,286 7,286 7,286 — —

Loans, net 6,245,416 6,121,026 — — 6,121,026

Loans 6,306,467 6,121,026 — — 6,121,026

Accrued interest receivable 20,313 20,313 — 20,313 —

4 unchanged sentences

Trust preferred debentures 49,975 54,668 — 54,668 —

The methods utilized to measure fair value of financial instruments at March 31, 2023 and December 31, 2022 represent an approximation of exit price;

The methods utilized to measure fair value of financial instruments at June 30, 2023 and December 31, 2022 represent an approximation of exit price;

however, an actual exit price may differ.

4 unchanged sentences

These financial instruments include commitments to extend credit and standby letters of credit.

Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheet.

Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance

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The contract amounts of those instruments reflect the extent of involvement we have in particular classes of financial instruments.

2 unchanged sentences

The commitments are principally tied to variable rates.

Loan commitments as of March 31, 2023 and December 31, 2022 were as follows:

(dollars in thousands) March 31, 2023 December 31, 2022

Loan commitments as of June 30, 2023 and December 31, 2022 were as follows:

(dollars in thousands) June 30, 2023 December 31, 2022

Commitments to extend credit $ 1,083,981 $ 1,276,263

4 unchanged sentences

Subsequent to repurchase, such loans are carried in loans receivable.

There were no losses as a result of make-whole requests and loan repurchases for the three months ended March 31, 2023 and 2022.

The liability for unresolved repurchase demands totaled $ 0.2 million at March 31, 2023 and December 31, 2022 .

There were no losses as a result of make-whole requests and loan repurchases for the three and six months ended June 30, 2023 and 2022.

The liability for unresolved repurchase demands totaled $ 0.2 million at June 30, 2023 and December 31, 2022.

NOTE 15 – SEGMENT INFORMATION

10 unchanged sentences

The Other segment includes the operating results of the parent company, our captive insurance business unit, and the elimination of intercompany transactions.

Selected business segment financial information for the three months ended March 31, 2023 and 2022 were as follows:

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Selected business segment financial information for the three and six months ended June 30, 2023 and 2022 were as follows:

(dollars in thousands) Banking Wealth

Management Other Total

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Net interest income (expense) $ 61,035 $ — $ ( 2,195 ) $ 58,840

6 unchanged sentences

Total assets $ 8,025,617 $ 30,249 $ ( 21,145 ) $ 8,034,721

Three Months Ended March 31, 2022

Six Months Ended June 30, 2023

Net interest income (expense) $ 123,643 $ — $ ( 4,299 ) $ 119,344

6 unchanged sentences

Total assets $ 8,025,617 $ 30,249 $ ( 21,145 ) $ 8,034,721

Three Months Ended June 30, 2022

Net interest income (expense) $ 63,963 $ — $ ( 2,629 ) $ 61,334

Provision for credit losses 5,441 — — 5,441

Noninterest income 8,495 6,143 ( 25 ) 14,613

Noninterest expense 37,362 4,091 ( 114 ) 41,339

Income (loss) before income taxes (benefit) 29,655 2,052 ( 2,540 ) 29,167

Income taxes (benefit) 7,545 573 ( 834 ) 7,284

Net income (loss) $ 22,110 $ 1,479 $ ( 1,706 ) $ 21,883

Total assets $ 7,422,518 $ 29,042 $ ( 15,748 ) $ 7,435,812

Six Months Ended June 30, 2022

Net interest income (expense) $ 123,316 $ — $ ( 5,155 ) $ 118,161

Provision for credit losses 9,608 — — 9,608

Noninterest income 16,901 13,282 43 30,226

Noninterest expense 73,609 8,766 ( 152 ) 82,223

Income (loss) before income taxes (benefit) 57,000 4,516 ( 4,960 ) 56,556

Income taxes (benefit) 14,260 1,263 ( 1,599 ) 13,924

Net income (loss) $ 42,740 $ 3,253 $ ( 3,361 ) $ 42,632

Total assets $ 7,422,518 $ 29,042 $ ( 15,748 ) $ 7,435,812

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NOTE 16 – REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company’s revenue from contracts with customers in the scope of Topic 606 is recognized within noninterest income in the consolidated statements of income.

The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three months ended March 31, 2023 and 2022.

Three Months Ended March 31,

The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three and six months ended June 30, 2023 and 2022.

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

(dollars in thousands) 2023 2022 2023 2022

34 unchanged sentences

Payment for service charges on deposit accounts is typically received immediately or in the following month through a direct charge to a customer’s account.

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Interchange Revenue

12 unchanged sentences

Fees related to the other components of other noninterest income within the scope of Topic 606 are largely transactional based, and therefore, the Company’s performance obligation is satisfied and related revenue recognized, at the point in time the customer uses the selected service to execute a transaction.

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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