2 unchanged sentences
Consolidated Balance Sheets
−Removed: September 30, 2021 and December 31, 2020
+Added: March 31, 2022 and December 31, 2021
(Dollars in thousands)
−Removed: September 30,
−Removed: Cash and due from banks, including reserve requirements of $ 0 at both September 30, 2021 and December 31, 2020
+Added: Cash and due from banks, including reserve requirements
+Added: of $0 at both 3/31/22 and 12/31/21
Interest-bearing deposits
7 unchanged sentences
Cash surrender value of life insurance
−Removed: Other real estate
Right of use lease asset
17 unchanged sentences
issued and outstanding 5,656,030 shares
−Removed: at September 30, 2021 and 5,787,504 shares at December 31, 2020
+Added: at March 31, 2022 and 5,661,569 shares at December 31, 2021
Common stock held by deferred compensation trust, at cost;
−Removed: shares at September 30, 2021 and 155,469 shares at December 31, 2020
+Added: shares at March 31, 2022 and 162,193 shares at December 31, 2021
Deferred compensation
Retained earnings
−Removed: Accumulated other comprehensive income
+Added: Accumulated other comprehensive income (loss)
Total shareholders' equity
1 unchanged sentence
See accompanying Notes to Consolidated Financial Statements.
−Removed: PEOPLES BANCORP OF NORTH CAROLINA, INC.
Consolidated Statements of Earnings
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Dollars in thousands, except per share amounts)
−Removed: Three months ended
−Removed: Nine months ended
−Removed: September 30,
−Removed: September 30,
Interest income:
1 unchanged sentence
Interest on due from banks
−Removed: Interest on federal funds sold
Interest on investment securities:
3 unchanged sentences
Interest expense:
−Removed: Interest-bearing demand, MMDA & savings
+Added: Interest-bearing demand, MMDA & savings deposits
Time deposits
−Removed: FHLB borrowings
Junior subordinated debentures
1 unchanged sentence
Net interest income
−Removed: Provision for (recovery of) loan losses
+Added: Provision for (reduction of) loan losses
Net interest income after provision for loan losses
2 unchanged sentences
Other service charges and fees
−Removed: Gain on sale of investment securities
Mortgage banking income
1 unchanged sentence
Appraisal management fee income
−Removed: Gain on sale of other assets
−Removed: Gain (loss) on sale of other real estate
Miscellaneous
14 unchanged sentences
PEOPLES BANCORP OF NORTH CAROLINA, INC.
−Removed: Consolidated Statements of Comprehensive Income
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Consolidated Statements of Comprehensive Income (Loss)
+Added: Three Months Ended March 31, 2022 and 2021
(Dollars in thousands)
−Removed: Three months ended
−Removed: Nine months ended
−Removed: September 30,
−Removed: September 30,
−Removed: Other comprehensive income (loss):
−Removed: Unrealized holding gains (losses) on securities available for sale
−Removed: Reclassification adjustment for gains on securities available for sale included in net earnings
−Removed: Total other comprehensive income (loss), before income taxes
−Removed: Income tax expense (benefit) related to other
−Removed: comprehensive income:
−Removed: Unrealized holding gains (losses) on securities available for sale
−Removed: Reclassification adjustment for gains on securities available for sale included in net earnings
−Removed: Total income tax expense (benefit) related to other comprehensive income
−Removed: Total other comprehensive income (loss), net of tax
−Removed: Total comprehensive income
+Added: Other comprehensive loss:
+Added: Unrealized holding losses on securities available for sale
+Added: Income tax benefit related to other comprehensive loss:
+Added: Unrealized holding losses on securities available for sale
+Added: Total other comprehensive loss, net of tax
+Added: Total comprehensive income (loss)
See accompanying Notes to Consolidated Financial Statements.
1 unchanged sentence
Consolidated Statements of Changes in Shareholders' Equity
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Dollars in thousands)
Comprehensive
+Added: Income (Loss)
Balance, December 31, 2021
+Added: Common stock repurchase
Cash dividends declared on common stock
3 unchanged sentences
Balance, March 31, 2022
−Removed: Cash dividends declared on common stock
−Removed: Equity incentive plan, net
−Removed: Change in accumulated other comprehensive income, net of tax
−Removed: Balance, June 30, 2021
−Removed: Common stock repurchase
−Removed: Cash dividends declared on common stock
−Removed: Equity incentive plan, net
−Removed: Change in accumulated other comprehensive loss, net of tax
−Removed: Balance, September 30, 2021
Balance, December 31, 2020
5 unchanged sentences
Balance, March 31, 2021
−Removed: Cash dividends declared on common stock
−Removed: Equity incentive plan, net
−Removed: Change in accumulated other comprehensive income, net of tax
−Removed: Balance, June 30, 2020
−Removed: Cash dividends declared on common stock
−Removed: Equity incentive plan, net
−Removed: Change in accumulated other comprehensive loss, net of tax
−Removed: Balance, September 30, 2020
See accompanying Notes to Consolidated Financial Statements.
1 unchanged sentence
Consolidated Statements of Cash Flows
−Removed: Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Dollars in thousands)
2 unchanged sentences
Depreciation, amortization and accretion
−Removed: Provision for (recovery of) loan losses
+Added: Provision for (reduction of) loan losses
Deferred income taxes
−Removed: Gain on sale of investment securities
−Removed: Gain on sale of other real estate
−Removed: Write-down of other real estate
−Removed: Gain on sale of other assets
Restricted stock expense
10 unchanged sentences
Proceeds from paydowns of investment securities available for sale
−Removed: Proceeds from paydowns on other investments
−Removed: Redemptions (purchases) of FHLB stock
+Added: Proceeds from paydowns of other investment securities
+Added: Redemption (purchase) of FHLB stock
Net change in loans
Purchases of premises and equipment
−Removed: Purchases of bank owned life insurance
−Removed: Proceeds from sale of other assets
−Removed: Proceeds from sale of other real estate and repossessions
−Removed: Net cash used by investing activities
+Added: Proceeds from bank owned life insurance
+Added: Net cash used in investing activities
Cash flows from financing activities:
1 unchanged sentence
Net change in securities sold under agreement to repurchase
−Removed: Proceeds from FHLB borrowings
−Removed: Repayment of Junior Subordinated Debt
−Removed: Proceeds from Fed Funds purchased
−Removed: Repayments of Fed Funds purchased
−Removed: Restricted stock units exercised
Common stock repurchased
6 unchanged sentences
Consolidated Statements of Cash Flows, continued
−Removed: Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Dollars in thousands)
2 unchanged sentences
Noncash investing and financing activities:
−Removed: Change in unrealized gain on investment securities available for sale, net
+Added: Change in unrealized loss on investment securities available for sale, net
Issuance of accrued restricted stock units
−Removed: Transfers of loans to other real estate and repossessions
−Removed: Transfers of premises and equipment to other assets held for sale
+Added: Initial recognition of lease right-of-use asset and lease liability
See accompanying Notes to Consolidated Financial Statements.
3 unchanged sentences
The Consolidated Financial Statements include the financial statements of Peoples Bancorp of North Carolina, Inc.
−Removed: and its wholly owned subsidiary, Peoples Bank (the “Bank”), along with the Bank’s wholly owned subsidiaries, Peoples Investment Services, Inc.
+Added: (the “Company”) and its wholly owned subsidiary, Peoples Bank (the “Bank”), along with the Bank’s wholly owned subsidiaries, Peoples Investment Services, Inc.
(“PIS”), Real Estate Advisory Services, Inc.
−Removed: (“REAS”), Community Bank Real Estate Solutions, LLC (“CBRES”) and PB Real Estate Holdings, LLC (collectively called the “Company”).
+Added: (“REAS”), Community Bank Real Estate Solutions, LLC (“CBRES”) and PB Real Estate Holdings, LLC.
All significant intercompany balances and transactions have been eliminated in consolidation.
−Removed: The Bank formerly operated three banking offices focused on the Latino population that were operated as a division of the Bank under the name Banco de la Gente (“Banco”).
−Removed: Two of these offices remain open as Bank branches that offer the same banking services offered in the Bank’s other branches such as the taking of deposits and the making of loans.
+Added: In June 2006, the Company formed a wholly owned Delaware statutory trust, PEBK Capital Trust II (“PEBK Trust II”), to facilitate the issuance of $ 20.6 million of trust preferred securities.
+Added: PEBK Trust II is not included in the consolidated financial statements.
+Added: The Bank operates three banking offices focused on the Latino population that were formerly operated as a separate division of the Bank under the name Banco de la Gente (“Banco”).
+Added: These offices, which offer the same banking services as our other branches offer, now operate under the same name as our other offices;
+Added: however, we continue to separately categorize mortgage loans originated from these offices.
The Consolidated Financial Statements in this report (other than the Consolidated Balance Sheet at December 31, 2021) are unaudited.
−Removed: In the opinion of management, all adjustments (none of which were other than normal accruals other than Correction of an Error noted below) necessary for a fair presentation of the financial position and results of operations for the periods presented have been included.
+Added: In the opinion of management, all adjustments necessary for a fair presentation of the financial position and results of operations for the periods presented have been included.
Management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”).
2 unchanged sentences
Many of the Company’s accounting policies require significant judgment regarding valuation of assets and liabilities and/or significant interpretation of the specific accounting guidance.
−Removed: A description of the Company’s significant accounting policies can be found in Note 1 of the Notes to Consolidated Financial Statements in the Company’s 2020 Annual Report to Shareholders which is Appendix A to the Proxy Statement for the May 6, 2021 Annual Meeting of Shareholders.
−Removed: Correction of an Error
−Removed: Subsequent to issuance of the Company’s December 31, 2020 Form 10-K, it was identified that the Company’s non-qualified deferred compensation plan had not been properly recorded on the Consolidated Balance Sheets.
−Removed: The deferred compensation plan requires all deferral amounts and contributions to be held in a rabbi trust, and the assets held by the trust should be recorded on the Company’s financial statements along with a corresponding liability.
−Removed: For balances related to mutual fund investments held in the rabbi trust, the accrued interest receivable and other assets, accrued interest payable and other liabilities, total assets, and total liabilities line items on the Consolidated Balance Sheets were adjusted as of December 31, 2020 to reflect the asset and corresponding liability associated with the portion of the rabbi trust held in mutual fund investments.
−Removed: This resulted in an increase to these line items of $ 1.3 million.
−Removed: Additionally, an adjustment to the presentation of the Company’s shareholders’ equity on the Consolidated Balance Sheets has been made to disclose the number of shares of Company stock held by the rabbi trust and the cost basis for those shares, as well as a corresponding liability for the deferred compensation as of December 31, 2020.
−Removed: On the Consolidated Statements of Earnings, basic earnings per share has been adjusted from $0.78 to $ 0.80 for the three months ended September 30, 2020 and from $1.62 to $ 1.67 for the nine months ended September 30, 2020.
−Removed: The impact of the changes in the fair value of the mutual funds held in the rabbi trust and the changes in the deferred compensation liability that were not previously recorded were not considered material to the financial statements.
−Removed: These changes to basic earnings per share are also reflected within Note 4 to the financial statements below.
−Removed: In addition to the adjustments to the presentation of the Company’s shareholders’ equity on the Consolidated Balance Sheets, the Company adjusted the presentation of the Consolidated Statements of Changes in Shareholders’ Equity for all periods presented to reflect the Company shares held within the rabbi trust, as well as the corresponding deferred compensation associated with these shares.
−Removed: The Company’s Consolidated Statements of Cash Flows were adjusted for the nine months ended September 30, 2020 in order to reflect the changes to other assets and other liabilities made on the Consolidated Balance Sheets.
−Removed: These unaudited interim financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results of the periods presented.
−Removed: The adjustments to correct the error noted above were not considered material to the financial statements.
+Added: A description of the Company’s significant accounting policies can be found in Note 1 of the Notes to Consolidated Financial Statements in the Company’s 2021 Annual Report to Shareholders which is Appendix A to the Proxy Statement for the 2022 Annual Meeting of Shareholders.
Recent Accounting Pronouncements
−Removed: The following table provides a summary of ASUs issued by the Financial Accounting Standards Board (“FASB”) that the Company has recently adopted.
−Removed: Recently Adopted Accounting Guidance
−Removed: Effective Date
−Removed: Effect on Financial Statements or Other Significant Matters
−Removed: Codification Updates to SEC Sections
−Removed: Guidance updated for various Topics of the ASC to align the guidance in various SEC sections of the ASC with the requirements of certain SEC final rules.
−Removed: Effective upon issuance
−Removed: The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
−Removed: Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820)
−Removed: Updates the disclosure requirements on fair value measurements in ASC 820, Fair Value Measurement.
−Removed: January 1, 2020
−Removed: The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
−Removed: Clarifying the Interaction between Topic 808 and Topic 606
−Removed: Clarifies the interaction between the guidance for certain collaborative arrangements and the new revenue recognition financial accounting and reporting standard.
−Removed: January 1, 2020
−Removed: The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
−Removed: Leases (Topic 842):
−Removed: Codification Improvements
−Removed: Provides guidance to address concerns companies had raised about an accounting exception they would lose when assessing the fair value of underlying assets under the leases standard and clarify that lessees and lessors are exempt from a certain interim disclosure requirement associated with adopting the new standard.
−Removed: January 1, 2020
−Removed: The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
−Removed: Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans (Subtopic 715-20)
−Removed: Updates disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.
−Removed: January 1, 2021
−Removed: The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
−Removed: Income Taxes (Topic 740):
−Removed: Simplifying the Accounting for Income Taxes
−Removed: Guidance to simplify accounting for income taxes by removing specific technical exceptions that often produce information investors have a hard time understanding.
−Removed: The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance.
−Removed: January 1, 2021
−Removed: The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
−Removed: Effective Date
−Removed: Effect on Financial Statements or Other Significant Matters
−Removed: Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force)
−Removed: Guidance to clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815.
−Removed: January 1, 2021
−Removed: The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
−Removed: Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946)
−Removed: Amends SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Release No.
−Removed: 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No.
−Removed: 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants.
−Removed: Effective upon issuance
−Removed: The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
−Removed: Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842)—Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.
−Removed: 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No.
−Removed: 2016-02, Leases (Topic 842) (SEC Update)
−Removed: Guidance to add and amend SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Staff Accounting Bulletin No.
−Removed: 119 related to the new credit losses standard and comments by the SEC staff related to the revised effective date of the new leases standard.
−Removed: Effective upon issuance
−Removed: The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
−Removed: The following table provides a summary of ASU’s issued by the FASB that the Company has not adopted as of September 30, 2021, which may impact the Company’s financial statements.
+Added: The following table provides a summary of Accounting Standards Updates (“ASU’s”) issued by the FASB that the Company has not adopted as of March 31, 2022, which may impact the Company’s financial statements.
Recently Issued Accounting Guidance Not Yet Adopted
11 unchanged sentences
The amount of the adjustments will be impacted by each portfolio’s composition and credit quality at the adoption date as well as economic conditions and forecasts at that time.
+Added: Effective Date
+Added: Effect on Financial Statements or Other Significant Matters
Codification Improvements to Topic 326, Financial Instruments—Credit Losses
26 unchanged sentences
The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.
−Removed: Effective Date
−Removed: Effect on Financial Statements or Other Significant Matters
Codification Improvements to Financial Instruments
9 unchanged sentences
The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.
−Removed: Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):
−Removed: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity
−Removed: Guidance to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity.
−Removed: January 1, 2022
−Removed: The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.
−Removed: Leases (Topic 842):
−Removed: Lessors—Certain Leases with Variable Lease Payments, which requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate
−Removed: Updated guidance that requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate as an operating lease at lease commencement if certain conditions are met
−Removed: January 1, 2022
−Removed: The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.
Other accounting standards that have been issued or proposed by FASB or other standards-setting bodies are not expected to have a material impact on the Company’s results of operations, financial position or disclosures.
3 unchanged sentences
(2) Investment Securities
−Removed: Investment securities available for sale at September 30, 2021 and December 31, 2020 are as follows:
+Added: Investment securities available for sale at March 31, 2022 and December 31, 2021 are as follows:
(Dollars in thousands)
−Removed: September 30, 2021
+Added: March 31, 2022
+Added: Amortized Cost
+Added: Gross Unrealized Gains
+Added: Gross Unrealized Losses
U.S Treasuries
4 unchanged sentences
December 31, 2021
+Added: Amortized Cost
+Added: Gross Unrealized Gains
+Added: Gross Unrealized Losses
+Added: U.S Treasuries
sponsored enterprises
1 unchanged sentence
State and political subdivisions
−Removed: The current fair value and associated unrealized losses on investments in securities with unrealized losses at September 30, 2021 and December 31, 2020 are summarized in the tables below, with the length of time the individual securities have been in a continuous loss position.
+Added: The current fair value and associated unrealized losses on investments in securities with unrealized losses at March 31, 2022 and December 31, 2021 are summarized in the tables below, with the length of time the individual securities have been in a continuous loss position.
(Dollars in thousands)
−Removed: September 30, 2021
+Added: March 31, 2022
Less than 12 Months
16 unchanged sentences
State and political subdivisions
−Removed: At September 30, 2021, unrealized losses in the investment securities portfolio relating to debt securities totaled $ 2.8 million.
+Added: At March 31, 2022, unrealized losses in the investment securities portfolio relating to debt securities totaled $ 25.2 million.
The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary.
−Removed: From the September 30, 2021 tables above, one out of two U.S.
+Added: From the March 31, 2022 tables above, all three U.S.
Treasury securities, 113 out of 156 securities issued by state and political subdivisions and 75 out of 108 securities issued by U.S.
Government sponsored enterprises contained unrealized losses.
−Removed: These unrealized losses are considered temporary because of acceptable financial condition and results of operations of entities that issued each security and the repayment sources of principal and interest on U.S.
+Added: These unrealized losses are considered temporary because of the acceptable financial condition and results of operations of the entities that issued each security and the repayment sources of principal and interest on U.S.
Government sponsored enterprises, including mortgage-backed securities, are government backed.
−Removed: The amortized cost and estimated fair value of investment securities available for sale at September 30, 2021, by contractual maturity, are shown below.
+Added: At December 31, 2021, unrealized losses in the investment securities portfolio relating to debt securities totaled $ 5.5 million.
+Added: The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary.
+Added: From the December 31, 2021 tables above, both of the U.S.
+Added: Treasury securities, 70 of the 146 securities issued by state and political subdivisions contained unrealized losses and 54 of the 99 securities issued by U.S.
+Added: Government sponsored enterprises, including mortgage-backed securities, contained unrealized losses.
+Added: These unrealized losses are considered temporary because of the acceptable financial condition and results of operations of the entities that issued each security and the repayment sources of principal and interest on U.S.
+Added: Government sponsored enterprises, including mortgage-backed securities, are government backed.
+Added: The amortized cost and estimated fair value of investment securities available for sale at March 31, 2022, by contractual maturity, are shown below.
Expected maturities of mortgage-backed securities will differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
−Removed: September 30, 2021
+Added: March 31, 2022
(Dollars in thousands)
+Added: Amortized Cost
Due within one year
3 unchanged sentences
Mortgage-backed securities
−Removed: No securities available for sale were sold during the three and nine months ended September 30, 2021.
−Removed: Proceeds from sales of securities available for sale during the three months ended September 30, 2020 were $ 29.2 million and resulted in net gains of $ 1.7 million.
−Removed: Proceeds from sales of securities available for sale during the nine months ended September 30, 2020 were $ 46.1 million and resulted in net gains of $ 2.1 million.
−Removed: Securities with a fair value of approximately $ 90.6 million and $ 77.3 million at September 30, 2021 and December 31, 2020, respectively, were pledged to secure public deposits and for other purposes as required by law.
−Removed: Major classifications of loans at September 30, 2021 and December 31, 2020 are summarized as follows:
+Added: No securities available for sale were sold during the three months ended March 31, 2022 and 2021.
+Added: Securities with a fair value of approximately $ 99.7 million and $ 98.6 million at March 31, 2022 and December 31, 2021, respectively, were pledged to secure public deposits and for other purposes as required by law.
+Added: Major classifications of loans at March 31, 2022 and December 31, 2021 are summarized as follows:
(Dollars in thousands)
−Removed: September 30,
+Added: March 31, 2022
+Added: December 31, 2021
Real estate loans:
11 unchanged sentences
Total net loans
−Removed: The Bank grants loans and extensions of credit primarily within the Catawba Valley region of North Carolina, which encompasses Catawba, Alexander, Iredell and Lincoln counties, and also in Mecklenburg, Wake, Durham and Rowan counties of North Carolina.
+Added: The Bank makes loans and extensions of credit primarily within the Catawba Valley region of North Carolina, which encompasses Catawba, Alexander, Iredell and Lincoln counties and also in Mecklenburg, Wake, Rowan and Forsyth counties of North Carolina.
Although the Bank has a diversified loan portfolio, a substantial portion of the loan portfolio is collateralized by improved and unimproved real estate, the value of which is dependent upon the real estate market.
3 unchanged sentences
If the estimate is inaccurate or if actual construction costs exceed estimates, the value of the property securing the loan may be insufficient to ensure full repayment when completed through a permanent loan, sale of the property, or by seizure of collateral.
−Removed: As of September 30, 2021, construction and land development loans comprised approximately 9 % of the Bank’s total loan portfolio.
+Added: As of March 31, 2022, construction and land development loans comprised approximately 11 % of the Bank’s total loan portfolio.
Single-family residential loans – Declining home sales volumes, decreased real estate values and higher than normal levels of unemployment could contribute to losses on these loans.
−Removed: As of September 30, 2021, single-family residential loans comprised approximately 32 % of the Bank’s total loan portfolio, and include Banco’s non-traditional single-family residential loans, which were approximately 3 % of the Bank’s total loan portfolio.
+Added: As of March 31, 2022, single-family residential loans comprised approximately 33 % of the Bank’s total loan portfolio, including Banco single-family residential non-traditional loans which were approximately 2 % of the Bank’s total loan portfolio.
Commercial real estate loans – Repayment is dependent on income being generated in amounts sufficient to cover operating expenses and debt service.
−Removed: These loans also involve greater risk because they are generally not fully amortizing over a loan period, but rather have a balloon payment due at maturity.
+Added: These loans also involve greater risk because they are generally not fully amortizing over the loan period, but rather have a balloon payment due at maturity.
A borrower’s ability to make a balloon payment typically will depend on being able to either refinance the loan or timely sell the underlying property.
−Removed: As of September 30, 2021, commercial real estate loans comprised approximately 41 % of the Bank’s total loan portfolio.
+Added: As of March 31, 2022, commercial real estate loans comprised approximately 40 % of the Bank’s total loan portfolio.
Commercial loans – Repayment is generally dependent upon the successful operation of the borrower’s business.
In addition, the collateral securing the loans may depreciate over time, be difficult to appraise, be illiquid, or fluctuate in value based on the success of the business.
−Removed: As of September 30, 2021, commercial loans comprised approximately 11 % of the Bank’s total loan portfolio, including $ 25.6 million in Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans.
−Removed: The Company had $ 75.8 million in PPP loans at December 31, 2020.
−Removed: Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due.
+Added: As of March 31, 2022, commercial loans comprised approximately 8 % of the Bank’s total loan portfolio, including $ 6.6 million in Paycheck Protection Program (“PPP”) loans.
+Added: Multifamily and farmland loans – Decreased real estate values and higher than normal levels of unemployment could contribute to losses on these loans.
+Added: As of March 31, 2022, construction and land development loans comprised approximately 7 % of the Bank’s total loan portfolio.
+Added: Loans are considered past due if the required principal and interest payments have not been received within 30 days of the date such payments were due.
Loans are placed on non-accrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions.
−Removed: Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due.
+Added: Generally, a loan is placed on non-accrual status when it is over 90 days past due and there is reasonable doubt that all principal will be collected.
When interest accrual is discontinued, all unpaid accrued interest is reversed.
Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due.
−Removed: Loans are returned to accrual status when all of the principal and interest amounts contractually due are brought current and future payments are reasonably assured.
−Removed: The following tables present an age analysis of past due loans, by loan type, as of September 30, 2021 and December 31, 2020:
−Removed: September 30, 2021
+Added: Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.
+Added: The following tables present an age analysis of past due loans, by loan type, as of March 31, 2022 and December 31, 2021:
+Added: March 31, 2022
(Dollars in thousands)
1 unchanged sentence
Loans 90 or More Days Past Due
−Removed: Past Due Loans
+Added: Total Past Due Loans
+Added: Total Current Loans
Accruing Loans 90 or More Days Past Due
14 unchanged sentences
Loans 90 or More Days Past Due
−Removed: Past Due Loans
+Added: Total Past Due Loans
+Added: Total Current Loans
Accruing Loans 90 or More Days Past Due
10 unchanged sentences
All other loans
−Removed: The following table presents non-accrual loans as of September 30, 2021 and December 31, 2020:
+Added: The following table presents non-accrual loans as of March 31, 2022 and December 31, 2021:
(Dollars in thousands)
−Removed: September 30,
+Added: March 31, 2022
+Added: December 31, 2021
Real estate loans:
+Added: Construction and land development
Single-family residential
8 unchanged sentences
Accordingly, the Bank’s impaired loans are reported at their estimated fair value on a non-recurring basis.
−Removed: An allowance for each impaired loan that is collateral-dependent is calculated based on the fair value of its collateral.
+Added: An allowance for each impaired loan that is collateral-dependent is calculated based on the fair value of its collateral less estimated selling costs.
The fair value of the collateral is based on appraisals performed by REAS, a subsidiary of the Bank.
4 unchanged sentences
If the recorded investment in the impaired loan exceeds the present value of projected cash flows, a valuation allowance is recorded as a component of the allowance for loan losses.
−Removed: Impaired loans under $ 250,000 are not individually evaluated for impairment with the exception of the Bank’s troubled debt restructured (“TDR”) loans in the residential mortgage loan portfolio, which are individually evaluated for impairment.
−Removed: Accruing impaired loans were $ 18.2 million, $ 21.3 million and $21.0 million at September 30, 2021, December 31, 2020 and September 30, 2020, respectively.
−Removed: Interest income recognized on accruing impaired loans was $ 754,000 , $ 1.2 million, and $ 934,000 for the nine months ended September 30, 2021, the year ended December 31, 2020 and the nine months ended September 30, 2020, respectively.
−Removed: Interest income recognized on accruing impaired loans was $ 217,000 and $ 299,000 for the three months ended September 30, 2021 and 2020, respectively.
+Added: Impaired loans under $ 250,000 are not individually evaluated for impairment with the exception of the Bank’s Troubled Debt Restructurings (“TDR”) loans in the residential mortgage loan portfolio, which are individually evaluated for impairment.
+Added: Impaired loans were $ 17.1 million, $ 18.3 million and $ 20.6 million at March 31, 2022, December 31, 2021 and March 31, 2021, respectively.
+Added: Interest income recognized on accruing impaired loans was $ 216,000 , $ 1.0 million, and $ 283,000 for the three months ended March 31, 2022, the year ended December 31, 2021 and the three months ended March 31, 2021, respectively.
No interest income is recognized on non-accrual impaired loans subsequent to their classification as non-accrual.
−Removed: The following table presents impaired loans as of September 30, 2021:
−Removed: September 30, 2021
+Added: The following table presents impaired loans as of March 31, 2022:
+Added: March 31, 2022
(Dollars in thousands)
−Removed: Recorded Investment
−Removed: Recorded Investment
−Removed: Recorded Investment in Impaired
+Added: Contractual Principal Balance
+Added: Investment With No Allowance
+Added: Investment With Allowance
+Added: Investment in Impaired Loans
Real estate loans:
9 unchanged sentences
Total impaired loans
−Removed: The following table presents the average impaired loan balance and the interest income recognized by loan class for the three and nine months ended September 30, 2021 and 2020.
+Added: The following table presents impaired loans as of and for the year ended December 31, 2021:
+Added: December 31, 2021
(Dollars in thousands)
−Removed: Three months ended
−Removed: Nine months ended
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: Average Balance
−Removed: Interest Income Recognized
−Removed: Average Balance
−Removed: Interest Income Recognized
−Removed: Average Balance
−Removed: Interest Income Recognized
−Removed: Average Balance
−Removed: Interest Income Recognized
+Added: Contractual Principal Balance
+Added: Investment With No Allowance
+Added: Investment With Allowance
+Added: Investment in Impaired Loans
Real estate loans:
2 unchanged sentences
Single-family residential -
−Removed: Banco de la Gente stated income
+Added: Banco de la Gente non-traditional
Multifamily and farmland
4 unchanged sentences
Total impaired loans
−Removed: The following table presents impaired loans as of and for the year ended December 31, 2020:
−Removed: December 31, 2020
+Added: The following table presents the average impaired loan balance and the interest income recognized by loan class for the three months ended March 31, 2022 and 2021 and the year ended December 31, 2021:
(Dollars in thousands)
−Removed: Unpaid Contractual Principal Balance
−Removed: Recorded Investment With No Allowance
−Removed: Recorded Investment With Allowance
−Removed: Recorded Investment in Impaired Loans
−Removed: Related Allowance
−Removed: Average Outstanding Impaired Loans
+Added: Three months ended
+Added: Twelve months ended
+Added: March 31, 2022
+Added: March 31,2021
+Added: December 31, 2021
+Added: Average Balance
Interest Income Recognized
+Added: Average Balance
+Added: Interest Income Recognized
+Added: Average Balance
+Added: Interest Income Recognized
Real estate loans:
2 unchanged sentences
Single-family residential -
−Removed: Banco de la Gente non-traditional
+Added: Banco de la Gente stated income
Multifamily and farmland
4 unchanged sentences
Total impaired loans
−Removed: Impaired loans collectively evaluated for impairment totaled $5.1 million and $ 5.8 million at September 30, 2021 and December 31, 2020, respectively and are included in the tables above.
−Removed: Allowance on impaired loans collectively evaluated for impairment totaled $ 45,000 and $ 61,000 at September 30, 2021 and December 31, 2020, respectively.
−Removed: The following tables present changes in the allowance for loan losses for the three and nine months ended September 30, 2021 and 2020.
+Added: Impaired loans collectively evaluated for impairment totaled $ 5.3 million at March 31, 2022 and December 31, 2021 and are included in the tables above.
+Added: Allowance on impaired loans collectively evaluated for impairment totaled $ 47,000 and $ 52,000 at March 31, 2022 and December 31, 2021, respectively.
+Added: The following tables present changes in the allowance for loan losses for the three months ended March 31, 2022 and 2021.
Unallocated balances in the following tables include allowance for loan losses based on qualitative factors such as economic outlook, concentrations of credit, interest rate risk and loan volume trends.
−Removed: PPP loans are excluded from the allowance for loan losses as PPP loans are 100 percent guaranteed by the SBA.
−Removed: PPP loans are classified as risk grade 3.
+Added: PPP loans are excluded from the allowance for loan losses as PPP loans are 100 percent guaranteed by the Small Business Administration (“SBA”).
(Dollars in thousands)
5 unchanged sentences
Consumer and All Other
−Removed: Nine months ended September 30, 2021:
−Removed: Allowance for loan losses:
−Removed: Beginning balance
−Removed: Ending balance
−Removed: Three months ended September 30, 2021:
+Added: Three months ended March 31, 2022
Allowance for loan losses:
Beginning balance
+Added: Provision (recovery)
Ending balance
−Removed: Allowance for loan losses at September 30, 2021:
+Added: Allowance for loan losses March 31, 2022
Ending balance:
3 unchanged sentences
Ending balance
−Removed: Loans at September 30, 2021:
+Added: Loans at March 31, 2022:
Ending balance
10 unchanged sentences
Consumer and All Other
−Removed: Nine months ended September 30, 2020:
−Removed: Allowance for loan losses:
−Removed: Beginning balance
−Removed: Ending balance
−Removed: Three months ended September 30, 2020:
+Added: Three months ended March 31, 2021
Allowance for loan losses:
Beginning balance
+Added: Provision (recovery)
Ending balance
−Removed: Allowance for loan losses at September 30, 2020:
+Added: Allowance for loan losses March 31, 2021
Ending balance:
3 unchanged sentences
Ending balance
−Removed: Loans at September 30, 2020:
+Added: Loans March 31, 2021:
Ending balance
3 unchanged sentences
evaluated for impairment
−Removed: The provision for loan losses for the three months ended September 30, 2021 was a recovery of $ 182,000 , compared to a provision of $ 522,000 for the three months ended September 30, 2020.
−Removed: The decrease in the provision for loan losses is primarily attributable to a decrease in reserves on loans with payment modifications made as a result of the COVID-19 pandemic and a decrease in reserves in the general reserve pool.
−Removed: At September 30, 2021, there were no loans with existing modifications as a result of the COVID-19 pandemic.
−Removed: At December 31, 2020, the balance of loans with existing modifications as a result of the COVID-19 pandemic was $ 18.3 million.
−Removed: The Company continues to track all loans that are currently modified or have been modified as a result of the COVID-19 pandemic.
−Removed: The loan balances associated with COVID-19 pandemic related modifications have been grouped into their own pool within the Company’s Allowance for Loan and Lease Losses (“ALLL”) model as they have a higher likelihood of risk, and a higher reserve rate has been applied to that pool.
−Removed: All loans modified as a result of the COVID-19 pandemic, totaling $100.9 million at September 30, 2021, have returned to their original terms;
−Removed: however, the effects of stimulus in the current environment are still unknown, and additional losses may be present in loans that were once modified.
−Removed: At December 31, 2020, the balance for all loans that were then currently modified or previously modified but returned to their original terms was $ 119.6 million.
−Removed: The $ 18.7 million decrease from December 31, 2020 to September 30, 2021 in the balance of currently or previously modified loans that had returned to their original terms is primarily due to loans paid off during the nine months ended September 30, 2021.
+Added: The provision for loan losses for the three months ended March 31, 2022 was $ 71,000 , compared to a recovery of $ 455,000 for the three months ended March 31, 2021.
+Added: The increase in the provision for loan losses is primarily attributable to an increase in reserves on loans in a pool that had once been given payment modifications as a result of the COVID-19 pandemic, and an increase in reserves due to a net increase in the volume of loans in the general reserve pool.
+Added: Loans that were previously modified have been separated from the pools for the general reserve to recognize their heightened susceptibility to an environment still affected by the economic effects of the pandemic.
+Added: Separating the previously modified loans into their own pool allows for more specific reserving factors to be considered that would not be applicable to loans in the pools for the general reserve.
+Added: There were no loans with modifications as a result of the COVID-19 pandemic at March 31, 2022 and December 31, 2021.
+Added: The Bank continues to track all loans that were previously modified as a result of the COVID-19 pandemic.
+Added: The loan balances associated with COVID-19 pandemic related modifications have been grouped into their own pool within the Bank’s Allowance for Loan and Lease Losses (“ALLL”) model as management considers that they have a higher likelihood of risk, and a higher reserve rate has been applied to that pool.
+Added: Loans included in this pool totaled $ 82.2 million and $ 88.7 million at March 31, 2022 and December 31, 2021, respectively.
+Added: The full effects of stimulus in the current environment are still unknown, and additional losses in this pool of loans may be present but not as yet identified.
Loan payment modifications associated with the COVID-19 pandemic are not classified as TDR due to Section 4013 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which provides that a qualified loan modification is exempt by law from classification as a TDR pursuant to GAAP.
−Removed: The provision for loan losses for the nine months ended September 30, 2021 was a recovery of $ 863,000 , compared to a provision of $ 3.5 million for the nine months ended September 30, 2020.
−Removed: The decrease in the provision for loan losses is primarily attributable to a decrease in reserves on loans with payment modifications made as a result of the COVID-19 pandemic and a decrease in reserves due to a net decrease in the volume of loans in the general reserve pool.
−Removed: The Company utilizes an internal risk grading matrix to assign a risk grade to each of its loans.
+Added: The Bank utilizes an internal risk grading matrix to assign a risk grade to each of its loans.
Loans are graded on a scale of 1 to 8.
3 unchanged sentences
Loans are well above average quality and a minimal amount of credit risk exists.
−Removed: Certificates of deposit or cash secured loans or properly margined actively traded stock or bond secured loans would fall in this grade.
+Added: CD or cash secured loans or properly margined actively traded stock or bond secured loans would fall in this grade.
Risk Grade 2 – High Quality:
−Removed: Loans are of good quality with risk levels well within the Company’s range of acceptability.
+Added: Loans are of good quality with risk levels well within the Bank’s range of acceptability.
The organization or individual is established with a history of successful performance though somewhat susceptible to economic changes.
Risk Grade 3 – Good Quality:
−Removed: Loans of average quality with risk levels within the Company’s range of acceptability but higher than normal.
+Added: Loans of average quality with risk levels within the Bank’s range of acceptability but higher than normal.
This may be a new organization or an existing organization in a transitional phase (e.g.
expansion, acquisition, market change).
+Added: PPP loans are classified as risk grade 3.
Risk Grade 4 – Management Attention:
3 unchanged sentences
Risk Grade 5 – Watch:
−Removed: These loans are currently performing satisfactorily, but there has been some recent past due history on repayment and there are potential weaknesses that may, if not corrected, weaken the asset or inadequately protect the Company’s position at some future date.
+Added: These loans are currently performing satisfactorily, but there has been some recent past due history on repayment and there are potential weaknesses that may, if not corrected, weaken the asset or inadequately protect the Bank’s position at some future date.
Risk Grade 6 – Substandard:
1 unchanged sentence
There is a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.
−Removed: There is a distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
+Added: There is a distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
Risk Grade 7 – Doubtful:
−Removed: Loans classified as Doubtful have all the weaknesses inherent in loans classified as Substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable.
+Added: Loans classified as Doubtful have all the weaknesses inherent in loans classified Substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable.
Doubtful is a temporary grade where a loss is expected but is presently not quantified with any degree of accuracy.
4 unchanged sentences
Loss is a temporary grade until the appropriate authority is obtained to charge the loan off.
−Removed: The following tables present the credit risk profile of each loan type based on internally assigned risk grades as of September 30, 2021 and December 31, 2020:
−Removed: September 30, 2021
+Added: The following tables present the credit risk profile of each loan type based on internally assigned risk grades as of March 31, 2022 and December 31, 2021:
+Added: March 31, 2022
(Dollars in thousands)
21 unchanged sentences
6- Substandard
−Removed: Past due TDR loans and non-accrual TDR loans totaled $ 1.6 million and $ 3.8 million at September 30, 2021 and December 31, 2020, respectively.
+Added: Past due TDR loans and non-accrual TDR loans totaled $ 3.3 million and $ 2.2 million at March 31, 2022 and December 31, 2021, respectively.
The terms of these loans have been renegotiated to provide a concession to original terms, including a reduction in principal or interest as a result of the deteriorating financial position of the borrower.
−Removed: There were no performing loans classified as TDR loans at September 30, 2021 and December 31, 2020.
−Removed: There were no new TDR modifications during the three and nine months ended September 30, 2021 and 2020.
−Removed: There were no loans modified as TDR that defaulted during the nine months ended September 30, 2021 and 2020, which were within 12 months of their modification date.
+Added: There were no performing loans classified as TDR loans at March 31, 2022 and December 31, 2021.
+Added: There were no new TDR modifications during the three months ended March 31, 2022 and 2021.
+Added: There were no loans modified as TDR loans that defaulted during the three months ended March 31, 2022 and 2021, which were within 12 months of their modification date.
Generally, a TDR loan is considered to be in default once it becomes 90 days or more past due following a modification.
On March 27, 2020, President Trump signed the CARES Act, which established a $2 trillion economic stimulus package, including cash payments to individuals, supplemental unemployment insurance benefits and a $349 billion loan program administered through the PPP.
−Removed: Under the PPP, small businesses, sole proprietorships, independent contractors and self-employed individuals may apply for loans from existing SBA lenders and other approved regulated lenders that enroll in the program, subject to numerous limitations and eligibility criteria.
−Removed: A second round of PPP funding, signed into law by President Trump on April 24, 2020, provided $320 billion additional funding for the PPP.
−Removed: The Bank is participating as a lender in the PPP .
−Removed: Total PPP loans originated as of September 30, 2021 amounted to $ 128.1 million.
−Removed: The outstanding balance of PPP loans was $ 25.6 million and $ 75.8 million at September 30, 2021 and December 31, 2020, respectively.
−Removed: The Bank has received $ 5.7 million in fees from the SBA for PPP loans originated as of September 30, 2021.
−Removed: The Bank recognized $3.0 million and $ 1.4 million PPP loan fee income for the nine months ended September 30, 2021 and the year ended December 31, 2020 respectively.
−Removed: PPP loan fee income recognized for the three months ended September 30, 2021 was $ 489,000 .
−Removed: PPP loan fee income recognized for the three and nine months ended September 30, 2020 was $ 361,000 .
+Added: Under the PPP, small businesses, sole proprietorships, independent contractors and self-employed individuals were able to apply for loans from existing SBA lenders and other approved regulated lenders, subject to certain limitations and eligibility criteria.
+Added: A second round of PPP funding provided a total of $320 billion additional funding for the PPP.
+Added: The Bank participated as a lender in the PPP.
+Added: Total PPP loans originated during the years ended December 31, 2020 and 2021 amounted to $ 128.1 million.
+Added: The outstanding balance of PPP loans was $ 6.6 million and $ 18.0 million at March 31, 2022 and December 31, 2021, respectively.
+Added: The Bank has received $ 5.7 million in fees from the SBA for PPP loans originated during the years ended December 31, 2020 and 2021.
+Added: The Bank recognized $ 600,000 and $ 999,000 of PPP loan fee income for the three months ended March 31, 2022 and the three months ended March 31, 2021, respectively.
(4) Net Earnings Per Share
1 unchanged sentence
The average market price during the applicable period is used to compute equivalent shares.
−Removed: The reconciliation of the amounts used in the computation of both “basic earnings per share” and “diluted earnings per share” for the three and nine months ended September 30, 2021 and 2020 is as follows:
−Removed: For the three months ended September 30, 2021
−Removed: Net Earnings (Dollars in thousands)
−Removed: Basic earnings per share
−Removed: Effect of dilutive securities:
−Removed: Restricted stock units
−Removed: Shares held in deferred comp plan
−Removed: Diluted earnings per share
−Removed: For the nine months ended September 30, 2021
−Removed: Net Earnings (Dollars in thousands)
−Removed: Basic earnings per share
−Removed: Effect of dilutive securities:
−Removed: Restricted stock units
−Removed: Shares held in deferred comp plan
−Removed: Diluted earnings per share
−Removed: For the three months ended September 30, 2020
+Added: The reconciliation of the amounts used in the computation of both “basic earnings per share” and “diluted earnings per share” for the three months ended March 31, 2022 and 2021 is as follows:
+Added: For the three months ended March 31, 2022
Net Earnings (Dollars in thousands)
+Added: Weighted Average Number of Shares
+Added: Per Share Amount
Basic earnings per share
Effect of dilutive securities:
−Removed: Restricted stock units
+Added: Restricted stock units - unvested
Shares held in deferred comp plan
+Added: by deferred compensation trust
Diluted earnings per share
−Removed: For the nine months ended September 30, 2020
+Added: For the three months ended March 31, 2021
Net Earnings (Dollars in thousands)
+Added: Weighted Average Number of Shares
+Added: Per Share Amount
Basic earnings per share
Effect of dilutive securities:
−Removed: Restricted stock units
+Added: Restricted stock units - unvested
Shares held in deferred comp plan
+Added: by deferred compensation trust
Diluted earnings per share
−Removed: Stock-Based Compensation
−Removed: The Company has an Omnibus Stock Ownership and Long Term Incentive Plan that was approved by shareholders on May 7, 2009 (the “2009 Plan”) whereby certain stock-based rights, such as stock options, restricted stock, restricted stock units, performance units, stock appreciation rights or book value shares, may be granted to eligible directors and employees.
−Removed: The 2009 Plan expired on May 7, 2019 but still governs the rights and obligations of the parties for grants made thereunder.
−Removed: As of September 30, 2021, there were no outstanding shares reserved for possible issuance under the 2009 Plan.
−Removed: The Company granted 16,583 restricted stock units under the 2009 Plan at a grant date fair value of $ 16.34 per share during the first quarter of 2015.
−Removed: The Company granted 5,544 restricted stock units under the 2009 Plan at a grant date fair value of $ 16.91 per share during the first quarter of 2016.
−Removed: The Company granted 4,114 restricted stock units under the 2009 Plan at a grant date fair value of $ 25 .00 per share during the first quarter of 2017.
−Removed: The Company granted 3,725 restricted stock units under the 2009 Plan at a grant date fair value of $ 31.43 per share during the first quarter of 2018.
−Removed: The Company granted 5,290 restricted stock units under the 2009 Plan at a grant date fair value of $ 28.43 per share during the first quarter of 2019.
−Removed: The number of restricted stock units granted and grant date fair values for the restricted stock units granted in 2015 through 2017 have been restated to reflect the 10% stock dividend that was paid in the fourth quarter of 2017.
−Removed: The Company recognizes compensation expense on the restricted stock units over the period of time the restrictions are in place (four years from the grant date for the 2015, 2016, 2017, 2018 and 2019 grants).
−Removed: The amount of expense recorded each period reflects the changes in the Company’s stock price during such period.
−Removed: As of September 30, 2021, the total unrecognized compensation expense related to the restricted stock unit grants under the 2009 Plan was $ 57,000 .
−Removed: The Company also has an Omnibus Stock Ownership and Long Term Incentive Plan that was approved by shareholders on May 7, 2020 (the “2020 Plan”) whereby certain stock-based rights, such as stock options, restricted stock, restricted stock units, performance units, stock appreciation rights or book value shares, may be granted to eligible directors and employees.
−Removed: A total of 300,000 shares were reserved for possible issuance under the 2020 Plan when it was adopted.
−Removed: As of September 30, 2021, a total of 285,075 shares out of the initial 300,000 shares reserved remain available for future issuance under the 2020 Plan.
−Removed: All stock-based rights under the 2020 Plan must be granted or awarded by May 7, 2030 (or ten years from the 2020 Plan effective date).
−Removed: The Company granted 7,635 restricted stock units under the 2020 Plan at a grant date fair value of $ 17.08 per share during the second quarter of 2020.
−Removed: The Company granted 7,290 restricted stock units under the 2020 Plan at a grant date fair value of $ 22.04 per share during the first quarter of 2021.
−Removed: The Company recognizes compensation expense on the restricted stock units over the period of time the restrictions are in place (four years from the grant date for 2020 and 2021 grants).
−Removed: As of September 30, 2021, the total unrecognized compensation expense related to the restricted stock unit grants under the 2020 Plan was $ 312,000 .
−Removed: The Company recognized compensation expense for restricted stock unit awards granted under the 2009 Plan and 2020 Plan of $ 166,000 for the nine months ended September 30, 2021.
−Removed: The Company recognized a $ 73,000 credit to compensation expense for restricted stock unit awards granted under the 2009 Plan and 2020 Plan for the nine months ended September 30, 2020 due to a reduction in the Company’s stock price from $ 32.85 per share at December 31, 2019, compared to $ 15.43 per share at September 30, 2020.
+Added: (5) Fair Value
The Company is required to disclose fair value information about financial instruments, whether or not recognized on the face of the balance sheet, for which it is practicable to estimate that value.
3 unchanged sentences
The following disclosures should not be considered a surrogate of the liquidation value of the Company, but rather a good faith estimate of the increase or decrease in the value of financial instruments held by the Company since purchase, origination, or issuance.
−Removed: The methods of determining the fair value of assets and liabilities presented in this note are consistent with methodologies disclosed in Note 16 of the Company’s 2020 Form 10-K, except for the valuation of loans which was impacted by the adoption of ASU No.
The Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.
18 unchanged sentences
Mortgage Loans Held for Sale
−Removed: Mortgage loans held for sale are carried at the lower of aggregate cost or market value.
+Added: Mortgage loans held for sale are carried at lower of aggregate cost or market value.
The cost of mortgage loans held for sale approximates the market value.
Mortgage loans held for sale are reported in the Level 3 fair value category.
−Removed: In accordance with ASU No.
The fair value of loans, excluding previously presented impaired loans measured at fair value on a non-recurring basis, is estimated using discounted cash flow analyses.
26 unchanged sentences
In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.
−Removed: The tables below present the balance of securities available for sale, which are measured at fair value on a recurring basis by level within the fair value hierarchy, as of September 30, 2021 and December 31, 2020.
+Added: The tables below present the balance of securities available for sale, which are measured at fair value on a recurring basis by level within the fair value hierarchy, as of March 31, 2022 and December 31, 2021.
(Dollars in thousands)
−Removed: September 30, 2021
−Removed: Fair Value Measurements
+Added: March 31, 2022
+Added: Level 1 Valuation
+Added: Level 2 Valuation
+Added: Level 3 Valuation
sponsored enterprises
3 unchanged sentences
December 31, 2021
−Removed: Fair Value Measurements
+Added: Level 1 Valuation
+Added: Level 2 Valuation
+Added: Level 3 Valuation
sponsored enterprises
1 unchanged sentence
State and political subdivisions
−Removed: The tables below present the balance of mutual funds held in the deferred compensation trust, which are measured at fair value on a recurring basis by level within the fair value hierarchy, as of September 30, 2021 and December 31, 2020.
+Added: The tables below present the balance of mutual funds held in the deferred compensation trust, which are measured at fair value on a recurring basis by level within the fair value hierarchy, as of March 31, 2022 and December 31, 2021.
(Dollars in thousands)
−Removed: September 30, 2021
−Removed: Fair Value Measurements
+Added: March 31, 2022
+Added: Level 1 Valuation
+Added: Level 2 Valuation
+Added: Level 3 Valuation
Mutual funds held in deferred compensation trust
1 unchanged sentence
December 31, 2021
−Removed: Fair Value Measurements
+Added: Level 1 Valuation
+Added: Level 2 Valuation
+Added: Level 3 Valuation
Mutual funds held in deferred compensation trust
−Removed: The fair value measurements for mortgage loans held for sale, impaired loans and other real estate on a non-recurring basis at September 30, 2021 and December 31, 2020 are presented below.
+Added: The fair value measurements for mortgage loans held for sale and impaired loans on a non-recurring basis at March 31, 2022 and December 31, 2021 are presented below.
The fair value measurement process uses certified appraisals and other market-based information;
2 unchanged sentences
(Dollars in thousands)
−Removed: Fair Value Measurements September 30, 2021
+Added: Fair Value Measurements March 31, 2022
+Added: Level 1 Valuation
+Added: Level 2 Valuation
+Added: Level 3 Valuation
Mortgage loans held for sale
2 unchanged sentences
Fair Value Measurements December 31, 2021
+Added: Level 1 Valuation
+Added: Level 2 Valuation
+Added: Level 3 Valuation
Mortgage loans held for sale
Impaired loans
−Removed: Other real estate
(Dollars in thousands)
−Removed: September 30,
+Added: March 31, 2022
+Added: Fair Value December 31, 2021
+Added: Valuation Technique
+Added: Significant Unobservable Inputs
General Range of Significant Unobservable Input Values
4 unchanged sentences
Discounts to reflect current market conditions and ultimate collectability
−Removed: Other real estate
−Removed: Appraised value
−Removed: Discounts to reflect current market conditions and estimated costs to sell
−Removed: The carrying amount and estimated fair value of financial instruments at September 30, 2021 and December 31, 2020 are as follows:
+Added: The carrying amount and estimated fair value of financial instruments at March 31, 2022 and December 31, 2021 are as follows:
(Dollars in thousands)
−Removed: Fair Value Measurements at September 30, 2021
+Added: Fair Value Measurements at March 31, 2022
+Added: Carrying Amount
Cash and cash equivalents
9 unchanged sentences
Fair Value Measurements at December 31, 2021
+Added: Carrying Amount
Cash and cash equivalents
7 unchanged sentences
Junior subordinated debentures
−Removed: As of September 30, 2021, the Company had operating right of use assets and operating lease liabilities of $ 2.9 million.
−Removed: The Company maintains operating leases on land and buildings for some of the Bank’s branch facilities and loan production offices.
+Added: As of March 31, 2022, the Bank had operating right of use assets of $ 6.2 million and operating lease liabilities of $ 6.3 million.
+Added: The Bank maintains operating leases on land and buildings for some of the Bank’s branch facilities and loan production offices.
Most leases include one option to renew, with renewal terms extending up to 15 years.
The exercise of renewal options is based on the judgment of management as to whether or not the renewal option is reasonably certain to be exercised.
−Removed: Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of renewal rates compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option is not exercised.
−Removed: As allowed by ASU 2016-02, leases with a term of 12 months or less are not recorded on the balance sheet and instead are recognized in lease expense on a straight-line basis over the lease term.
−Removed: The following table presents lease cost and other lease information as of September 30, 2021 and 2020.
+Added: Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of renewal rates compared to market rates, and the presence of factors that would cause a significant economic penalty to the Bank if the option is not exercised.
+Added: Leases with a term of 12 months or less are not recorded on the balance sheet and instead are recognized in lease expense on a straight-line basis over the lease term.
+Added: The following table presents lease cost and other lease information as of March 31, 2022 and 2021.
(Dollars in thousands)
−Removed: September 30,
−Removed: September 30,
+Added: March 31,2022
+Added: March 31,2021
Operating lease cost
1 unchanged sentence
Cash paid for amounts included in the measurement of lease liabilities
−Removed: Operating cash flows from operating leases
Right-of-use assets obtained in exchange for new lease liabilities - operating leases
1 unchanged sentence
Weighted-average discount rate - operating leases
−Removed: The following table presents lease maturities as of September 30, 2021 and December 31, 2020.
+Added: The following table presents lease maturities as of March 31, 2022 and December 31, 2021.
(Dollars in thousands)
Maturity Analysis of Operating Lease Liabilities:
−Removed: September 30,
+Added: March 31, 2022
+Added: December 31, 2021
Imputed Interest
4 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.