2 unchanged sentences
Consolidated Balance Sheets
−Removed: September 30, 2023 and December 31, 2022
+Added: March 31, 2024 and December 31, 2023
(Dollars in thousands)
−Removed: September 30,
−Removed: Cash and due from banks, including reserve requirements of $ 0 at both 9/30/23 and 12/31/22
+Added: Cash and due from banks
Interest-bearing deposits
19 unchanged sentences
Total liabilities
+Added: Commitments and contingencies
Shareholders' equity:
4 unchanged sentences
authorized 20,000,000 shares;
−Removed: issued and outstanding 5,549,799 shares at September 30, 2023 and 5,636,830 shares at December 31, 2022
+Added: issued and outstanding 5,455,999 shares at March 31, 2024 and 5,534,499 shares at December 31, 2023
Common stock held by deferred compensation trust, at cost;
−Removed: 167,193 shares at September 30, 2023 and 169,094 shares at December 31, 2022
+Added: 164,970 shares at March 31, 2024 and 158,356 shares at December 31, 2023
Deferred compensation
6 unchanged sentences
Consolidated Statements of Earnings
−Removed: Three and Nine Months Ended September 30, 2023 and 2022
+Added: Three Months Ended March 31, 2024 and 2023
(Dollars in thousands, except per share amounts)
−Removed: Three months ended
−Removed: Nine months ended
−Removed: September 30,
−Removed: September 30,
Interest income:
6 unchanged sentences
Interest expense:
−Removed: NOW, MMDA & savings deposits
+Added: Interest-bearing demand, MMDA & savings deposits
Time deposits
3 unchanged sentences
Provision for credit losses
−Removed: Net interest income after provision for loan losses
+Added: Net interest income after provision for credit losses
Non-interest income:
13 unchanged sentences
Appraisal management fee expense
−Removed: Miscellaneous
Total non-interest expense
6 unchanged sentences
PEOPLES BANCORP OF NORTH CAROLINA, INC.
−Removed: Consolidated Statements of Comprehensive Income (Loss)
−Removed: Three and Nine Months Ended September 30, 2023 and 2022
+Added: Consolidated Statements of Comprehensive Income
+Added: Three Months Ended March 31, 2024 and 2023
(Dollars in thousands)
−Removed: Three months ended
−Removed: Nine months ended
−Removed: September 30,
−Removed: September 30,
−Removed: Other comprehensive loss:
−Removed: Unrealized holding losses on securities available for sale
−Removed: Reclassification adjustment for losses on securities available for sale included in net earnings
−Removed: Total other comprehensive loss, before income taxes
−Removed: Income tax benefit related to other comprehensive income:
−Removed: Unrealized holding losses on securities available for sale
−Removed: Reclassification adjustment for losses on securities available for sale included in net earnings
−Removed: Total income tax benefit related to other comprehensive income
−Removed: Total other comprehensive loss, net of tax
−Removed: Total comprehensive income (loss)
+Added: Other comprehensive income :
+Added: Unrealized holding gains on securities
+Added: available for sale
+Added: Reclassification adjustment for losses on
+Added: securities available for sale
+Added: included in net earnings
+Added: Total other comprehensive income ,
+Added: before income taxes
+Added: Income tax benefit related to other
+Added: comprehensive income :
+Added: Unrealized holding gains on securities
+Added: available for sale
+Added: Reclassification adjustment for losses on sales
+Added: of securities available for sale
+Added: included in net earnings
+Added: Total income tax expense related to
+Added: other comprehensive income
+Added: Total other comprehensive income,
+Added: Total comprehensive income
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, 2023 and 2022
+Added: Three Months Ended March 31, 2024 and 2023
(Dollars in thousands)
Comprehensive
+Added: Income (Loss)
Balance, December 31, 2023
−Removed: Adoption of new accounting standard, net of tax
−Removed: Cash dividends declared on common stock ($0.34 per share)
−Removed: Restricted stock units exercised
−Removed: Equity incentive plan, net
−Removed: Change in accumulated other comprehensive loss, net of tax
−Removed: Balance, March 31, 2023
Common stock repurchase
−Removed: Cash dividends declared on common stock ($0.19 per share)
−Removed: Equity incentive plan, net
−Removed: Change in accumulated other comprehensive loss, net of tax
−Removed: Balance, June 30, 2023
−Removed: Common stock repurchase
−Removed: Cash dividends declared on common stock ($0.19 per share)
+Added: Cash dividends declared on
Equity incentive plan, net
−Removed: Change in accumulated other comprehensive loss, net of tax
−Removed: Balance, September 30, 2023
+Added: Change in accumulated other
+Added: comprehensive income (loss), net of tax
+Added: Balance, March 31, 2024
Balance, December 31, 2022
−Removed: Common stock repurchase
−Removed: Cash dividends declared on common stock ($0.33 per share)
+Added: Adoption of new accounting
+Added: standard, net of tax
+Added: Cash dividends declared on
Restricted stock units exercised
Equity incentive plan, net
−Removed: Change in accumulated other comprehensive loss, net of tax
+Added: Change in accumulated other
+Added: comprehensive income (loss), net of tax
Balance, March 31, 2023
−Removed: Common stock repurchase
−Removed: Cash dividends declared on common stock ($0.18 per share)
−Removed: Equity incentive plan, net
−Removed: Change in accumulated other comprehensive loss, net of tax
−Removed: Balance, June 30, 2022
−Removed: Cash dividends declared on common stock ($0.18 per share)
−Removed: Equity incentive plan, net
−Removed: Change in accumulated other comprehensive loss, net of tax
−Removed: Balance, September 30, 2022
See accompanying Notes to Consolidated Financial Statements.
1 unchanged sentence
Consolidated Statements of Cash Flows
−Removed: Nine Months Ended September 30, 2023 and 2022
+Added: Three Months Ended March 31, 2024 and 2023
(Dollars in thousands)
Cash flows from operating activities:
−Removed: Adjustments to reconcile net earnings to net cash provided by operating activities:
+Added: Adjustments to reconcile net earnings to
+Added: net cash provided by operating activities:
Depreciation, amortization and accretion
2 unchanged sentences
Loss on sale of investment securities net
−Removed: Gain on sale of premises and equipment
Restricted stock expense
8 unchanged sentences
Purchases of investment securities available for sale
−Removed: Proceeds from sales, calls and maturities of investment securities available for sale
+Added: Proceeds from sales, calls and maturities of investment securities
+Added: available for sale
Proceeds from paydowns of investment securities available for sale
−Removed: Proceeds from paydowns on other investments
−Removed: 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: Proceeds from sale of premises and equipment
−Removed: Proceeds from bank owned life insurance
Net cash provided (used) by investing activities
2 unchanged sentences
Net change in securities sold under agreement to repurchase
+Added: Proceeds from Fed Funds purchased
+Added: Repayments of Fed Funds purchased
Common stock repurchased
6 unchanged sentences
Consolidated Statements of Cash Flows, continued
−Removed: Nine Months Ended September 30, 2023 and 2022
+Added: Three Months Ended March 31, 2024 and 2023
(Dollars in thousands)
2 unchanged sentences
Noncash investing and financing activities:
−Removed: Change in unrealized loss on investment securities available for sale, net
−Removed: Issuance of accrued restricted stock units
−Removed: Initial recognition of lease right-of-use asset and lease liability
+Added: Change in unrealized loss on investment securities
+Added: available for sale, net
+Added: Restricted stock units exercised
Allowance for credit losses record upon adoption of ASU 326, net of tax
10 unchanged sentences
PEBK Trust II is not included in the Consolidated Financial Statements.
−Removed: 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”).
−Removed: These offices, which offer the same banking services as our other branches offer, now operate under the same name as our other offices;
−Removed: 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, 2023) are unaudited.
9 unchanged sentences
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 2023 Annual Report to Shareholders which is Appendix A to the Proxy Statement for the 2024 Annual Meeting of Shareholders.
−Removed: There have been no significant changes to the application of significant accounting policies since December 31, 2022, except for the adoption of ASC 326 noted below.
+Added: There have been no significant changes to the application of significant accounting policies since December 31, 2023.
Recent Accounting Pronouncements
−Removed: The following table provides a summary of Accounting Standards Updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”) that the Company has recently adopted.
+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, 2024, which may impact the Company’s financial statements.
Effective Date
Effect on Financial Statements or Other Significant Matters
−Removed: Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842):
−Removed: Effective Dates
−Removed: Guidance to defer the effective dates for private companies, not-for-profit organizations, and certain smaller reporting companies applying standards on current expected credit losses (CECL), leases and hedging.
−Removed: January 1, 2023
−Removed: The adoption of this guidance did not have a material impact on the Company’s results of operations or financial position but did impact disclosure requirements.
−Removed: Codification Improvements to Topic 326, Financial Instruments—Credit Losses
−Removed: Guidance that addresses issues raised by stakeholders during the implementation of ASU 2016-13, Financial Instruments—Credit Losses (Topic 326):
−Removed: Measurement of Credit Losses on Financial Instruments.
−Removed: The amendments affect a variety of Topics in the ASC.
+Added: ASU 2023-07 Segment Reporting (Topic 280)
+Added: The ASU provides amendments to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses
January 1, 2025
−Removed: The adoption of this guidance did not have a material impact on the Company’s results of operations or financial position but did impact disclosure requirements.
−Removed: Codification Improvements to Financial Instruments
−Removed: Guidance to clarify that the contractual term of a net investment in a lease, determined in accordance with the leases standard, should be the contractual term used to measure expected credit losses under ASC 326.
+Added: The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.
+Added: ASU 2024-01 Compensation—Stock Compensation (Topic 718)
+Added: The ASU adds an illustrative example (with four fact patterns) on how an entity would apply Accounting Standards Codification (ASC) 718 scope guidance.
January 1, 2025
−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):
−Removed: Troubled Debt Restructurings and Vintage Disclosures
−Removed: Eliminates the guidance on troubled debt restructurings (TDRs) for creditors in ASC 310-40 2 and amends the guidance on “vintage disclosures” to require disclosure of current-period gross write-offs by year of origination.
+Added: The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.
+Added: ASU 2024-02 Codification Improvements Amendments to Remove References to Concepts Statements
+Added: The ASU removes references to various Concepts Statements.
+Added: In most instances, the references are extraneous and not required to understand or apply the guidance.
+Added: In other instances, the references are a substitute for actual wording from a Concepts Statement.
+Added: In most cases, the ASU is not intended to result in significant accounting changes for most entities.
January 1, 2025
−Removed: The adoption of this guidance did not have a material impact on the Company’s results of operations or financial position but did impact disclosure requirements.
+Added: 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.
−Removed: On January 1, 2023, the Company adopted ASC 326, which replaced the incurred loss impairment framework in prior GAAP with a current expected credit loss (“CECL”) framework, which requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts and generally applies to financial assets measured at amortized cost, including loan receivables and some off-balance sheet credit exposures such as unfunded commitments to extend credit.
−Removed: Financial assets measured at amortized cost are presented at the net amount expected to be collected by using an allowance for credit losses (“ACL”).
−Removed: In addition, the adoption of CECL resulted in changes to the Company’s accounting for available for sale debt securities.
−Removed: One such change is to require credit losses to be presented as an allowance rather than as a write-down on available for sale debt securities if management does not intend to sell and does not believe that it is more likely than not, they will be required to sell.
−Removed: The Company adopted ASC 326 and all related subsequent amendments thereto effective January 1, 2023 using the modified retrospective approach for all financial assets measured at amortized cost and off-balance sheet credit exposures.
−Removed: Adoption of ASC 326 resulted in an initial reduction to retained earnings of $ 838,000 , net of tax, due to a $ 1.1 million increase in the allowance for credit losses, comprised of a $2.3 million increase in the allowance for credit losses on unfunded commitments and a $ 1.2 million decrease in the allowance for credit losses on loans.
−Removed: There was no impact to the available-for-sale securities portfolio or other financial instruments.
−Removed: Results for reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP (referred to as the “Incurred Loss” methodology).
−Removed: The Company adopted ASC 326 using the prospective transition approach for debt securities for which other-than-temporary impairment had been recognized prior to January 1, 2023.
−Removed: As of December 31, 2022, the Company did not have any other than-temporarily impaired investment securities.
−Removed: Therefore, upon adoption of ASC 326, the Company determined that an allowance for credit losses on available for sale securities was not deemed material.
−Removed: The Company elected not to measure an allowance for credit losses for accrued interest receivable and instead elected to reverse interest income on loans or securities that are placed on nonaccrual status, which is generally when the instrument is 90 days past due, or earlier if the Company believes the collection of interest is doubtful.
−Removed: The Company has concluded that this policy results in the timely reversal of uncollectible interest.
−Removed: The allowance for credit losses on loans is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans.
−Removed: Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed.
−Removed: Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.
−Removed: Accrued interest receivable is excluded from the estimate of credit losses.
−Removed: The allowance for credit losses represents management’s estimate of lifetime credit losses inherent in loans as of September 30, 2023.
−Removed: The allowance for credit losses is estimated by management using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.
−Removed: The Company measures expected credit losses for loans on a pooled basis when similar risk characteristics exist.
−Removed: No loans were individually evaluated as of September 30, 2023.
−Removed: The Company has identified the following portfolio segments and calculates the allowance for credit losses for each using a Weighted Average Remaining Maturity (“WARM”) methodology:
−Removed: - 1-4 family residential construction loans
−Removed: - Other construction loans and all land development and other land loans
−Removed: - Secured by farmland (including farm residential and other improvements)
−Removed: - Home equity loans
−Removed: - 1-4 family residential loans secured by first liens
−Removed: - 1-4 family residential loans secured by junior liens
−Removed: - Secured by multifamily residential properties
−Removed: - Loans secured by owner-occupied, nonfarm nonresidential properties
−Removed: - Loans secured by other nonfarm nonresidential properties
−Removed: - Loans to finance agricultural production and other loans to farmers
−Removed: - Commercial and industrial loans
−Removed: - Other revolving credit plans
−Removed: - Other consumer loans
−Removed: - Obligations (other than securities and leases) of states and political subdivisions in the US
−Removed: - Other loans
−Removed: Under the WARM methodology, lifetime losses are calculated by determining the remaining life of the loan pool and then applying a loss rate which includes a forecast component over this remaining life of the loan pool.
−Removed: The methodology considers historical loss experience and a loss forecast expectation to estimate credit losses for the remaining balance of the loan pool.
−Removed: The calculated loss rate is applied to the contractual term (adjusted for prepayments) to determine the loan pool’s current expected credit losses.
−Removed: The Company’s forecast component projects the next four quarters to have similar loss rates to the period between November 1, 2015 and September 30, 2019, and then with a reversion back to the long-term average over four quarters.
−Removed: This period is intended to reflect the environment that began when the Federal Reserve started its last series of rate hikes beginning in November of 2015, and reflects the overall loan loss rates of the Company during this time of no higher than 0.4%.
−Removed: This period has been extended from the prior quarter by three months, and had minor impacts on the loss rates.
−Removed: The Company expects to adjust these time frames for affecting the forecast periods as the rate environment changes to reflect either increasing or decreasing loan loss rates that will adjust the historical loss rates.
−Removed: Additionally, the allowance for credit losses calculation includes subjective adjustments for qualitative risk factors that are likely to cause estimated credit losses to differ from historical experience.
−Removed: These qualitative adjustments may increase or reduce reserve levels and include adjustments for:
−Removed: local, state and national economic outlook;
−Removed: levels and trends of delinquencies;
−Removed: trends in volume, mix and size of loans;
−Removed: seasoning of the loan portfolio;
−Removed: experience of staff;
−Removed: concentrations of credit;
−Removed: and interest rate risk.
−Removed: Loans that do not share risk characteristics are evaluated on an individual basis.
−Removed: When management determines that foreclosure is probable and the borrower is experiencing financial difficulty, the expected credit losses are based on the fair value of collateral at the reporting date unadjusted for selling costs as appropriate.
−Removed: The Company did not have any loans evaluated on an individual basis at September 30, 2023.
−Removed: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit issued to meet customer financing needs.
−Removed: The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments.
−Removed: Such financial instruments are recorded when they are funded.
−Removed: The Company records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable.
−Removed: The allowance for credit losses on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur as well as any third-party guarantees.
−Removed: The allowance for unfunded commitments is included in other liabilities on the Company’s consolidated balance sheets.
Reclassification
1 unchanged sentence
These reclassifications did not have any impact on shareholders’ equity or net earnings.
+Added: (2) Comprehensive Income
+Added: The Company reports as comprehensive income all changes in shareholders’ equity during the year from sources other than shareholders.
+Added: Other comprehensive income refers to all components (revenues, expenses, gains, and losses) of comprehensive income that are excluded from net income.
+Added: The Company’s only component of other comprehensive income is unrealized gains and losses, net of income tax, on investment securities available for sale.
+Added: The following table presents the changes in accumulated other comprehensive loss for the three months ended March 31, 2024 and 2023:
+Added: For the three months ended
+Added: (dollars in thousands)
+Added: March 31, 2024
+Added: March 31, 2023
+Added: Beginning balance
+Added: Other comprehensive loss before reclassifications, net
+Added: Amounts reclassified from accumulated other comprehensive loss, net
+Added: Net current period other comprehensive loss
+Added: Ending balance
+Added: (3) Net Earnings Per Share
+Added: Net earnings per share is based on the weighted average number of shares outstanding during the period while the effects of potential shares outstanding during the period are included in diluted earnings per share.
+Added: The average market price during the applicable period is used to compute equivalent shares.
+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, 2024 and 2023 is as follows:
+Added: For the three months ended March 31, 2024
+Added: Net Earnings (Dollars in thousands)
+Added: Weighted Average Number of Shares
+Added: Per Share Amount
+Added: Basic earnings per share
+Added: Effect of dilutive securities:
+Added: Restricted stock units - unvested
+Added: Shares held in deferred comp plan
+Added: by deferred compensation trust
+Added: Diluted earnings per share
+Added: For the three months ended March 31, 2023
+Added: Net Earnings (Dollars in thousands)
+Added: Weighted Average Number of Shares
+Added: Basic earnings per share
+Added: Effect of dilutive securities:
+Added: Restricted stock units - unvested
+Added: Shares held in deferred comp plan
+Added: by deferred compensation trust
+Added: Diluted earnings per share
(4) Investment Securities
−Removed: Investment securities available for sale at September 30, 2023 and December 31, 2022 are as follows:
+Added: Investment securities available for sale at March 31, 2024 and December 31, 2023 are as follows:
(Dollars in thousands)
−Removed: September 30, 2023
+Added: March 31, 2024
Amortized Cost
−Removed: Unrealized Gains
−Removed: Unrealized Losses
−Removed: U.S Treasuries
+Added: Gross Unrealized Gains
+Added: Gross Unrealized Losses
Government sponsored enterprises
−Removed: Mortgage-backed securities
+Added: GSE - Mortgage-backed securities
+Added: Private label mortgage-backed securities
State and political subdivisions
2 unchanged sentences
Amortized Cost
−Removed: Unrealized Gains
−Removed: Unrealized Losses
−Removed: U.S Treasuries
+Added: Gross Unrealized Gains
+Added: Gross Unrealized Losses
Government sponsored enterprises
−Removed: Mortgage-backed securities
+Added: GSE - Mortgage-backed securities
+Added: Private label mortgage-backed securities
State and political subdivisions
−Removed: The current fair value and associated unrealized losses on investments in securities with unrealized losses at September 30, 2023 and December 31, 2022 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, 2024 and December 31, 2023 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, 2023
+Added: March 31, 2024
Less than 12 Months
12 Months or More
+Added: Unrealized Losses
+Added: Unrealized Losses
+Added: Unrealized Losses
government sponsored enterprises
−Removed: Mortgage-backed securities
+Added: GSE -Mortgage-backed securities
+Added: Private label mortgage-backed securities
State and political subdivisions
3 unchanged sentences
12 Months or More
+Added: Unrealized Losses
+Added: Unrealized Losses
+Added: Unrealized Losses
government sponsored enterprises
−Removed: Mortgage-backed securities
+Added: GSE -Mortgage-backed securities
+Added: Private label mortgage-backed securities
State and political subdivisions
−Removed: At September 30, 2023, unrealized losses in the investment securities portfolio relating to debt securities totaled $ 66.3 million.
+Added: At March 31, 2024, unrealized losses in the investment securities portfolio relating to debt securities totaled $ 51.2 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, 2023 tables above, all three of the U.S.
−Removed: Treasury securities, all 108 of the securities issued by state and political subdivisions, all seven of the securities issued by U.S.
−Removed: Government sponsored enterprises and 129 of the 134 mortgage-backed securities contained unrealized losses.
−Removed: These unrealized losses are not related to credit impairment 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.
−Removed: Government sponsored enterprises, including mortgage-backed securities.
−Removed: The Company does not have an allowance for credit losses on available for sale securities at September 30, 2023.
+Added: From the March 31, 2024 tables above, both of the U.S.
+Added: Treasury securities, all 108 of the securities issued by state and political subdivisions contained unrealized losses, all seven of the securities issued by U.S.
+Added: Government sponsored enterprises (“GSE”), 114 of the 124 GSE mortgage-backed securities, and 15 of the 16 private label mortgage backed securities contained unrealized losses.
+Added: The Company did not have any reserves on available for sale securities at March 31, 2024, as no credit related losses were identified in the Company’s March 31, 2024 analysis.
At December 31, 2023, unrealized losses in the investment securities portfolio relating to debt securities totaled $ 51.3 million.
1 unchanged sentence
From the December 31, 2023 tables above, all three of the U.S.
−Removed: Treasury securities, 149 of the 158 securities issued by state and political subdivisions, all seven of the securities issued by U.S.
−Removed: Government sponsored enterprises and 123 of the 133 mortgage-backed securities contained unrealized losses.
−Removed: 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.
−Removed: Government sponsored enterprises, including mortgage-backed securities.
−Removed: The amortized cost and estimated fair value of investment securities available for sale at September 30, 2023, presented by contractual maturity, are shown below.
+Added: Treasury securities, all 108 of the securities issued by state and political subdivisions contained unrealized losses, all seven of the securities issued by GSE, 114 of the 121 GSE mortgage-backed securities, and 12 of the 14 private label mortgage backed securities contained unrealized losses.
+Added: The Company did not have an allowance for credit losses on available for sale securities at December 31, 2023, as no credit related losses were identified in the Company’s December 31, 2023 CECL analysis.
+Added: The amortized cost and estimated fair value of investment securities available for sale at March 31, 2024, presented by contractual maturity, are shown below.
Expected maturities of mortgage-backed securities will differ from contractual maturities because borrowers have the right to prepay obligations with or without prepayment penalties.
−Removed: September 30, 2023
+Added: March 31, 2024
(Dollars in thousands)
5 unchanged sentences
Mortgage-backed securities
−Removed: No securities available for sale were sold during the three months ended September 30, 2023.
−Removed: During the nine months ended September 30, 2023, proceeds from sales of securities available for sale were $ 51.0 million and resulted in gross losses of $ 2.7 million and gross gains of $ 177,000 .
−Removed: No securities available for sale were sold during the nine months ended September 30, 2022.
−Removed: Securities with a fair value of approximately $ 129.8 million and $ 96.0 million at September 30, 2023 and December 31, 2022, respectively, were pledged to secure public deposits and for other purposes as required by law.
−Removed: Major classifications of loans at September 30, 2023 and December 31, 2022 are summarized as follows:
+Added: No securities available for sale were sold during the three months ended March 31, 2024.
+Added: During the three months ended March 31, 2023, proceeds from sales of securities available for sale were $ 51.0 million and resulted in gross losses of $ 2.7 million and gross gains of $ 177,000 .
+Added: Securities with a fair value of approximately $ 109.0 million and $ 132.0 million at March 31, 2024 and December 31, 2023, respectively, were pledged to secure public deposits and for other purposes as required by law.
+Added: Major classifications of loans at March 31, 2024 and December 31, 2023 are summarized as follows:
(Dollars in thousands)
−Removed: September 30,
Real estate loans:
1 unchanged sentence
Single-family residential
−Removed: Single-family residential -
−Removed: Banco de la Gente non-traditional
Multifamily and farmland
1 unchanged sentence
Loans not secured by real estate:
−Removed: Commercial loans
−Removed: Consumer loans
−Removed: All other loans
Less allowance for credit losses
19 unchanged sentences
Loans are returned to accrual status when all 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, 2023 and December 31, 2022:
−Removed: September 30, 2023
+Added: The following tables present an age analysis of past due loans, by loan type, as of March 31, 2024 and December 31, 2023:
+Added: March 31, 2024
(Dollars in thousands)
−Removed: Loans 30-89 Days Past Due
−Removed: Loans 90 or More Days Past Due
Total Past Due Loans
4 unchanged sentences
Single-family residential
−Removed: Single-family residential -
−Removed: Banco de la Gente non-traditional
Multifamily and farmland
1 unchanged sentence
Loans not secured by real estate:
−Removed: Commercial loans
−Removed: Consumer loans
−Removed: All other loans
December 31, 2023
(Dollars in thousands)
−Removed: Loans 30-89 Days Past Due
−Removed: Loans 90 or More Days Past Due
Total Past Due Loans
4 unchanged sentences
Single-family residential
+Added: Multifamily and farmland
+Added: Total real estate loans
+Added: Loans not secured by real estate:
+Added: The following table presents non-accrual loans as of March 31, 2024 and December 31, 2023:
+Added: March 31, 2024
+Added: Nonaccrual Loans
+Added: Nonaccrual Loans
+Added: (Dollars in thousands)
+Added: Real estate loans:
+Added: Construction and land development
Single-family residential
−Removed: Banco de la Gente non-traditional
Multifamily and farmland
1 unchanged sentence
Loans not secured by real estate:
−Removed: Commercial loans
−Removed: Consumer loans
−Removed: All other loans
−Removed: The following table presents non-accrual loans as of September 30, 2023 and December 31, 2022:
−Removed: CECL Methodology
−Removed: Incurred Loss Methodology
−Removed: September 30, 2023
December 31, 2023
5 unchanged sentences
Single-family residential
−Removed: Single-family residential -
−Removed: Banco de la Gente non-traditional
Multifamily and farmland
1 unchanged sentence
Loans not secured by real estate:
−Removed: Commercial loans
−Removed: Consumer loans
−Removed: Interest income is not recognized on non-accrual loans.
+Added: No interest income was recognized on non-accrual loans for the three months ended March 31, 2024 and 2023.
The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon origination or acquisition.
9 unchanged sentences
If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.
−Removed: The following table shows the amortized cost basis at September 30, 2023 of the loans to borrowers experiencing financial difficulty that were modified during the nine months ended September 30, 2023, disaggregated by loan class and type of concession granted.
−Removed: There were no loans to borrowers experiencing financial difficulty that were modified during the three months ended September 30, 2023.
+Added: The following tables show the amortized cost basis at March 31, 2024 and 2023 of the loans to borrowers experiencing financial difficulty that were modified during the three months ended March 31, 2024 and 2023, disaggregated by loan class and type of concession granted.
(Dollars in thousands)
Term Extension
−Removed: Amortized Cost Basis at
−Removed: September 30, 2023
+Added: Amortized Cost Basis at March 31, 2024
% of Loan Class
−Removed: Single-family residential
+Added: Commercial not secured by real estate
+Added: (Dollars in thousands)
+Added: Term Extension
+Added: Amortized Cost Basis at March 31, 2023
+Added: % of Loan Class
Commercial real estate
−Removed: The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty.
+Added: The following tables describes the financial effect of the modifications made to borrowers experiencing financial difficulty during the three months ended March 31, 2024 and 2023
+Added: March 31, 2024
Term Extension
Financial Effect
−Removed: Single-family residential
−Removed: Forbearance agreement on matured home equity line of credit (HELOC) that was modified to 180 month term.
Commercial real estate
+Added: Line of credit converted to amortizing term loan .
+Added: March 31, 2023
+Added: Term Extension
+Added: Financial Effect
+Added: Commercial real estate
Extended existing amortization from 148 months to 173 months to keep existing payment the same with the current market rate .
−Removed: Upon the Bank’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off.
−Removed: Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.
−Removed: No loans modified in the nine months ended September 30, 2023 that were made to borrowers experiencing financial difficulty had been written off at September 30, 2023.
+Added: No loans modified in the three months ended March 31, 2024 and 2023 that were made to borrowers experiencing financial difficulty had been written off at March 31, 2024 and 2023.
The Bank closely monitors the performance of those loans that are modified because borrowers are experiencing financial difficulty so as to understand the effectiveness of its modification efforts.
−Removed: The following table shows the performance of loans that have been modified in the nine months ended September 30, 2023.
+Added: The following tables show the performance of loans that have been modified in the three months ended March 31, 2024 and 2023.
+Added: March 31, 2024
(Dollars in thousands)
Payment Status (Amortized Cost Basis)
−Removed: Single-family residential
+Added: 30 - 89 Days Past Due
+Added: 90 + Days Past Due
Commercial real estate
−Removed: The following table presents impaired loans as of and for the year ended December 31, 2022:
−Removed: December 31, 2022
+Added: March 31, 2023
(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: Real estate loans:
−Removed: Construction and land development
−Removed: Single-family residential
−Removed: Single-family residential -
−Removed: Banco de la Gente non-traditional
−Removed: Multifamily and farmland
−Removed: Total impaired real estate loans
−Removed: Loans not secured by real estate:
−Removed: Commercial loans
−Removed: Consumer loans
−Removed: 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, 2022 and the twelve months ended December 31, 2022.
+Added: Payment Status (Amortized Cost Basis)
+Added: 30 - 89 Days Past Due
+Added: 90 + Days Past Due
+Added: Commercial real estate
+Added: The following tables present changes in the allowance for credit losses for the three months ended March 31, 2024 and 2023.
(Dollars in thousands)
−Removed: Three months ended
−Removed: Nine months ended
−Removed: Twelve months ended
−Removed: September 30, 2022
−Removed: September 30, 2022
−Removed: December 31, 2022
−Removed: Average Balance
−Removed: Interest Income Recognized
−Removed: Average Balance
−Removed: Interest Income Recognized
−Removed: Average Balance
−Removed: Interest Income Recognized
Real Estate Loans
1 unchanged sentence
Single-Family Residential
−Removed: Single-family residential -
−Removed: Banco de la Gente stated income
Multifamily and Farmland
−Removed: Total impaired real estate loans
−Removed: Loans not secured by real estate:
−Removed: Commercial loans
−Removed: Consumer loans
−Removed: Total impaired loans
−Removed: Impaired loans collectively evaluated for impairment totaled $ 5.1 million $ 4.9 million at September 30, 2022 and December 31, 2022, respectively and are included in the tables above.
−Removed: Allowance on impaired loans collectively evaluated for impairment totaled $ 44,000 and $ 44,000 at September 30, 2022 and December 31, 2022, respectively.
−Removed: The following tables present changes in the allowance for credit losses for the three and nine months ended September 30, 2023 and 2022.
−Removed: The September 30, 2023 table reflects the CECL methodology and the September 30, 2022 table reflects the Incurred Loss methodology.
−Removed: Paycheck Protection Program (“PPP”) loans are excluded from the allowance for credit losses because PPP loans are guaranteed by the Small Business Administration (“SBA”).
−Removed: No loans were individually evaluated as of September 30, 2023.
+Added: Consumer and All Other
+Added: Three months ended March 31, 2024
+Added: Allowance for credit losses:
+Added: Beginning balance
+Added: Provision (recovery) for
+Added: loan losses (1)
+Added: Ending balance
+Added: Allowance for credit loss-loans
+Added: Allowance for credit losses
+Added: loan commitments
+Added: Total allowance for credit losses
+Added: (1) Excludes provision for credit losses related to unfunded commitments.
+Added: Note 8,"Commitments and Contingencies" in the condensed consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments.
(Dollars in thousands)
2 unchanged sentences
Single-Family Residential
−Removed: Single-Family Residential - Banco de la Gente non-traditional
Multifamily and Farmland
Consumer and All Other
−Removed: Three months ended September 30, 2023
−Removed: Allowance for credit losses:
−Removed: Beginning balance
−Removed: Provision (recovery) for
−Removed: unfunded commitments
−Removed: Provision (recovery) for
−Removed: Ending balance
−Removed: Nine months ended September 30, 2023
+Added: Three months ended March 31, 2023
Allowance for credit losses:
2 unchanged sentences
implementation (1)
−Removed: Provision (recovery) for unfunded commitments
−Removed: Provision (recovery) for loan losses
+Added: Provision (recovery) for
+Added: loan losses (1)
Ending balance
Allowance for credit loss-loans
−Removed: Allowance for credit losses unfunded loan commitments
+Added: Allowance for credit losses
+Added: loan commitments
Total allowance for credit losses
+Added: (1) Excludes adjustment for CECL implemenation and provision for credit losses related to unfunded commitments.
+Added: Note 8,"Commitments and Contingencies" in the condensed consolidated financial statements provides more detail concerning the implementation adjustment and provision for credit losses related to unfunded commitments.
+Added: Three loans, totaling $891,000, were individually evaluated as of March 31, 2024, including two loans, totaling $816,000, that were collateral dependent.
+Added: The were no collateral dependent loans individually evaluated at December 31, 2023.
+Added: The following table shows collateral dependent loans at March 31, 2024.
(Dollars in thousands)
+Added: March 31, 2024
+Added: Amortized Cost
+Added: Allowance (1)
Real estate loans:
1 unchanged sentence
Single-family residential
−Removed: Single-Family Residential - Banco de la Gente Non-traditional
Multifamily and farmland
−Removed: Consumer and All Other
−Removed: Nine months ended September 30, 2022:
−Removed: Allowance for loan losses:
−Removed: Beginning balance
−Removed: Ending balance
−Removed: Three months ended September 30, 2022:
−Removed: Allowance for loan losses:
−Removed: Beginning balance
−Removed: Ending balance
−Removed: Allowance for loan losses at September 30, 2022:
−Removed: Ending balance:
−Removed: evaluated for impairment
−Removed: Ending balance:
−Removed: evaluated for impairment
−Removed: Ending balance
−Removed: Loans at September 30, 2022:
−Removed: Ending balance
−Removed: Ending balance:
−Removed: evaluated for impairment
−Removed: Ending balance:
−Removed: evaluated for impairment
+Added: Total real estate loans
+Added: Loans not secured by real estate:
+Added: (1) Based on estimated value of residential real estate collateral and motor boat inventory collateral.
The Bank utilizes several credit quality indicators to manage credit risk in an ongoing manner.
7 unchanged sentences
There is a distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
−Removed: The following table presents by credit quality indicator, loan class and year of origination, the amortized cost of the Bank’s loans as of September 30, 2023.
+Added: Doubtful – Loans classified 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.
+Added: Loss – Loans classified Loss are considered uncollectable and of such little value that their continuance as bankable assets is not warranted.
+Added: This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this worthless loan even though partial recovery may be affected in the future.
+Added: The following table presents by credit quality indicator, loan class and year of origination, the amortized cost of the Bank’s loans as of March 31, 2024.
Term Loans by Origination Year
(dollars in thousands)
−Removed: September 30, 2023
+Added: March 31, 2024
Real Estate Loans
4 unchanged sentences
Total single family
−Removed: Single family-Banco de la
−Removed: Gente non-traditional
−Removed: Total Banco de la Gente
−Removed: non-traditional
Total commercial
8 unchanged sentences
by real estate
−Removed: Current period gross charge-offs
−Removed: The following table presents the credit risk profile of each loan type based on credit quality indicators as of December 31, 2022:
+Added: The following table presents by credit quality indicator, loan class and year of origination, gross loan charge-offs as of March 31, 2024.
+Added: Gross Loan Charge-offs by Origination Year
+Added: (dollars in thousands)
+Added: Real estate loans:
+Added: Construction and land development
+Added: Single-family residential
+Added: Multifamily and farmland
+Added: Total real estate loans
+Added: Loans not secured by real estate:
+Added: Total gross charge-offs
+Added: The following table presents by credit quality indicator, loan class and year of origination, the amortized cost of the Bank’s loans as of December 31, 2023.
+Added: Term Loans by Origination Year
+Added: (dollars in thousands)
December 31, 2023
+Added: Real Estate Loans
+Added: Construction and land
+Added: Total Construction and
+Added: land development
+Added: Single family
+Added: Total single family
+Added: Total commercial
+Added: Multifamily and farmland
+Added: Total multifamily and
+Added: Total real estate loans
+Added: Loans not secured by real estate
+Added: Total Commercial
+Added: Total consumer
+Added: Total all other
+Added: Total loans not secured
+Added: by real estate
+Added: The following table presents by credit quality indicator, loan class and year of origination, gross loan charge-offs as of December 31, 2023.
+Added: Gross Loan Charge-offs by Origination Year
(dollars in thousands)
2 unchanged sentences
Single-family residential
−Removed: Single-Family Residential - Banco de la Gente non-traditional
Multifamily and farmland
−Removed: Net Earnings Per Share
−Removed: Net earnings per share is based on the weighted average number of shares outstanding during the period while the effects of potential shares outstanding during the period are included in diluted earnings per share.
−Removed: 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, 2023 and 2022 is as follows:
−Removed: For the three months ended September 30, 2023
−Removed: Net Earnings (Dollars in thousands)
−Removed: Weighted Average Number of Shares
−Removed: Per Share Amount
−Removed: Basic earnings per share
−Removed: Effect of dilutive securities:
−Removed: Restricted stock units - unvested
−Removed: Shares held in deferred comp plan by deferred compensation trust
−Removed: Diluted earnings per share
−Removed: For the nine months ended September 30, 2023
−Removed: Net Earnings (Dollars in thousands)
−Removed: Weighted Average Number of Shares
−Removed: Per Share Amount
−Removed: Basic earnings per share
−Removed: Effect of dilutive securities:
−Removed: Restricted stock units - unvested
−Removed: Shares held in deferred comp plan by deferred compensation trust
−Removed: Diluted earnings per share
−Removed: For the three months ended September 30, 2022
−Removed: Net Earnings (Dollars in thousands)
−Removed: Weighted Average Number of Shares
−Removed: Per Share Amount
−Removed: Basic earnings per share
−Removed: Effect of dilutive securities:
−Removed: Restricted stock units - unvested
−Removed: Shares held in deferred comp plan by deferred compensation trust
−Removed: Diluted earnings per share
−Removed: For the nine months ended September 30, 2022
−Removed: Net Earnings (Dollars in thousands)
−Removed: Weighted Average Number of Shares
−Removed: Per Share Amount
−Removed: Basic earnings per share
−Removed: Effect of dilutive securities:
−Removed: Restricted stock units - unvested
−Removed: Shares held in deferred comp plan by deferred compensation trust
−Removed: Diluted earnings per share
−Removed: 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.
+Added: Total real estate loans
+Added: Loans not secured by real estate:
+Added: Total gross charge-offs
+Added: As of March 31, 2024, the Bank had operating right of use assets of $ 4.6 million and operating lease liabilities of $ 4.7 million.
+Added: The Bank maintains operating leases on land and buildings for some of the Bank’s branch facilities and loan production offices.
+Added: Most leases include one option to renew, with renewal terms extending up to 15 years.
+Added: 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.
+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, 2024 and 2023.
+Added: (Dollars in thousands)
+Added: March 31, 2024
+Added: March 31, 2023
+Added: Operating lease cost
+Added: Other information:
+Added: Cash paid for amounts included in the measurement of lease liabilities
+Added: Operating cash flows from operating leases
+Added: Right-of-use assets obtained in exchange for new lease liabilities - operating leases
+Added: Weighted-average remaining lease term - operating leases
+Added: Weighted-average discount rate - operating leases
+Added: The following table presents lease maturities as of March 31, 2024.
+Added: Imputed Interest
+Added: Operating Lease Liability
+Added: (7) Securities Sold Under Agreements to Repurchase (“repurchase agreements”)
+Added: The Bank utilizes repurchase agreements to facilitate the needs of our customers and provide additional funding to our balance sheet.
+Added: Repurchase agreements are transactions whereby we offer to sell to a counterparty an undivided interest in an eligible security at an agreed upon purchase price, and which obligates the Bank to repurchase the security on an agreed upon date at an agreed upon repurchase price plus interest at an agreed upon rate.
+Added: Securities sold under repurchase agreements are recorded at the amount of cash received in connection with the transaction and are reflected in the accompanying consolidated balance sheet.
+Added: Repurchase agreements are subject to terms and conditions of the master repurchase agreements between the Bank and the customer and are accounted for as secured borrowings.
+Added: At March 31, 2024 and December 31, 2023, repurchase agreements totaled $ 59.2 million and $ 86.7 million, respectively.
+Added: These borrowings were collateralized with government-sponsored enterprise securities with a market value of $ 69.1 million and $ 89.8 million at March 31, 2024 and December 31, 2023, respectively.
+Added: We monitor collateral levels on a continuous basis and maintain records of each transaction specifically describing the applicable security and the counterparty’s fractional interest in that security, and we segregate the security from its general assets in accordance with regulations governing custodial holdings of securities.
+Added: The primary risk with repurchase agreements is market risk associated with the securities securing the transactions, as we may be required to provide additional collateral based on fair value changes of the underlying securities.
+Added: (8) Commitments and Contingencies
+Added: The Bank is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers.
+Added: These financial instruments include commitments to extend credit and standby letters of credit.
+Added: Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheet.
+Added: The contract amounts of those instruments reflect the extent of involvement the Bank has in particular classes of financial instruments.
+Added: The exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments.
+Added: The Bank uses the same credit policies in making commitments to extend credit and standby letters of credit as it does for on-balance-sheet instruments.
+Added: In most cases, the Bank requires collateral or other security to support financial instruments with credit risk.
+Added: (Dollars in thousands)
+Added: Contractual Amount
+Added: Financial instruments whose contract amount represent credit risk:
+Added: Commitments to extend credit
+Added: Standby letters of credit
+Added: Commitments to extend credit are conditional agreements to lend to a customer.
+Added: Commitments generally have fixed expiration dates and because they may expire without being drawn upon, the total commitment amount of $ 373.9 million does not necessarily represent future cash requirements.
+Added: Standby letters of credit are conditional commitments issued by the Bank to pay a third party on behalf of a customer.
+Added: Those letters of credit are primarily issued to businesses in the Bank’s delineated market area.
+Added: The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.
+Added: The Bank holds real estate, equipment, automobiles and customer deposits as collateral supporting those commitments for which collateral is deemed necessary.
+Added: The Company maintains an allowance for off-balance sheet credit exposures such as unfunded balances for existing lines of credit, commitments to extend future credit, when this extension of credit is not unconditionally cancelable.
+Added: The allowance for off-balance sheet credit exposures is adjusted as a provision for credit loss expense.
+Added: The estimate includes consideration of the likelihood that funding will occur, which is based on a historical funding activity and an estimate of expected credit losses on commitments expected to be funded over its estimated life, which are the same loss rates that are used in computing the allowance for credit losses on loans.
+Added: The allowance for credit losses for unfunded loan commitments of $ 1.7 million and $ 2.1 million at March 31, 2024 and 2023, respectively, is separately classified on the balance sheet within Other Liabilities.
+Added: The following table presents the balance and activity in the allowance for credit losses for unfunded loan commitments for the three months ended March 31, 2024 and 2023.
+Added: (dollars in thousands)
+Added: March 31, 2024
+Added: March 31, 2023
+Added: Beginning Balance
+Added: Cummulative effect of change in accounting principle
+Added: Provision for (recovery of) credit losses
+Added: Ending balance
+Added: (9) Fair Value
+Added: The Company is required to disclose fair value information about financial instruments, whether or not recognized at fair value on the face of the balance sheet, for which it is practicable to estimate that value.
The assumptions used in the estimation of the fair value of the Company’s financial instruments are detailed below.
9 unchanged sentences
Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.
−Removed: Cash and Cash Equivalents
−Removed: For cash, due from banks and interest-bearing deposits, the carrying amount is a reasonable estimate of fair value.
−Removed: Cash and cash equivalents are reported in the Level 1 fair value category.
Investment Securities Available for Sale
4 unchanged sentences
All other fair value measurements are reported in the Level 3 fair value category.
−Removed: Other Investments
−Removed: For other investments, the carrying value is a reasonable estimate of fair value.
−Removed: Other investments are reported in the Level 3 fair value category.
Mortgage Loans Held for Sale
2 unchanged sentences
Mortgage loans held for sale are reported in the Level 2 fair value category.
+Added: Management determined that the valuation technique used at current period end and prior period end are more appropriately classified as Level 2 and has updated in the current period and prior period year end classifications to Level 2.
The fair value of loans, excluding previously presented individually evaluated loans measured at fair value on a non-recurring basis, is estimated using discounted cash flow analyses.
3 unchanged sentences
Mutual funds held in the deferred compensation trust are included in other assets on the balance sheet and reported in the Level 1 fair value category.
−Removed: The fair value of demand deposits, interest-bearing demand deposits and savings is the amount payable on demand at the reporting date.
−Removed: The fair value of certificates of deposit is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities.
−Removed: Deposits are reported in the Level 3 fair value category.
−Removed: Securities Sold Under Agreements to Repurchase
−Removed: For securities sold under agreements to repurchase, the carrying value is a reasonable estimate of fair value.
−Removed: Securities sold under agreements to repurchase are reported in the Level 2 fair value category.
FHLB Borrowings
1 unchanged sentence
FHLB borrowings are reported in the Level 2 fair value category.
−Removed: Junior Subordinated Debentures
−Removed: Because the Company’s junior subordinated debentures were issued at a floating rate, the carrying amount is a reasonable estimate of fair value.
−Removed: Junior subordinated debentures are reported in the Level 2 fair value category.
+Added: Management determined that the valuation technique used at current period end and prior period end are more appropriately classified as Level 2 and has updated in the current period and prior period year end classifications to Level 2.
Commitments to Extend Credit and Standby Letters of Credit
9 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 all financial instruments measured at fair value on a recurring basis by level within the fair value hierarchy, as of September 30, 2023 and December 31, 2022.
+Added: The tables below present all financial instruments measured at fair value on a recurring basis by level within the fair value hierarchy, as of March 31, 2024 and December 31, 2023.
(Dollars in thousands)
−Removed: September 30, 2023
+Added: March 31, 2024
Level 1 Valuation
2 unchanged sentences
Government sponsored enterprises
−Removed: Mortgage-backed securities
+Added: GSE - Mortgage-backed securities
+Added: Private label mortgage-backed securities
State and political subdivisions
−Removed: Mutual funds held in deferred compensation trust
(Dollars in thousands)
3 unchanged sentences
Level 3 Valuation
−Removed: Government sponsored enterprises
+Added: Sponsored enterprises
Mortgage-backed securities
1 unchanged sentence
Mutual funds held in deferred compensation trust
−Removed: The fair value measurements for mortgage loans held for sale and individually evaluated loans on a non-recurring basis at September 30, 2023 and December 31, 2022 are presented below.
+Added: The fair value measurements for mortgage loans held for sale and individually evaluated loans on a non-recurring basis at March 31, 2024 and December 31, 2023 are presented below.
The fair value measurement process uses certified appraisals and other market-based information;
however, in many cases, it also requires significant input based on management’s knowledge of, and judgment about, current market conditions, specific issues relating to the collateral and other matters.
−Removed: As a result, all fair value measurements for impaired loans and other real estate are considered Level 3.
+Added: As a result, all fair value measurements for individually evaluated loans and other real estate are considered Level 3.
(Dollars in thousands)
−Removed: Fair Value Measurements September 30, 2023
+Added: Fair Value Measurements March 31, 2024
Level 1 Valuation
1 unchanged sentence
Level 3 Valuation
−Removed: Mortgage loans held for sale
Individually evaluated loans
4 unchanged sentences
Level 3 Valuation
−Removed: Mortgage loans held for sale
−Removed: Impaired loans
+Added: Individually evaluated loans
(Dollars in thousands)
−Removed: September 30, 2023
+Added: March 31, 2024
December 31, 2023
−Removed: Valuation Technique
Significant Unobservable Inputs
General Range of Significant Unobservable Input Values
−Removed: Mortgage loans held for sale
−Removed: Rate lock commitment
Individually evaluated loans
−Removed: Appraised value and discounted cash flows
+Added: Appraised value
Discounts to reflect current market conditions and ultimate collectability
−Removed: The carrying amount and estimated fair value of financial instruments at September 30, 2023 and December 31, 2022 are as follows:
+Added: The carrying amount and estimated fair value of financial instruments at March 31, 2024 and December 31, 2023 are as follows:
(Dollars in thousands)
−Removed: Fair Value Measurements at September 30, 2023
+Added: Fair Value Measurements at March 31, 2024
Carrying Amount
3 unchanged sentences
Mortgage loans held for sale
−Removed: Mutual funds held in deferred compensation trust
−Removed: Securities sold under agreements to repurchase
+Added: Mutual funds held in deferred
+Added: compensation trust
+Added: Securities sold under agreements
+Added: to repurchase
Junior subordinated debentures
6 unchanged sentences
Mortgage loans held for sale
−Removed: Mutual funds held in deferred compensation trust
−Removed: Securities sold under agreements to repurchase
+Added: Mutual funds held in deferred
+Added: compensation trust
+Added: Securities sold under agreements
+Added: to repurchase
Junior subordinated debentures
−Removed: As of September 30, 2023, the Bank had operating right of use assets of $ 4.9 million and operating lease liabilities of $ 5 .0 million.
−Removed: The Bank maintains operating leases on land and buildings for some of the Bank’s branch facilities and loan production offices.
−Removed: Most leases include one option to renew, with renewal terms extending up to 15 years.
−Removed: 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 Bank if the option is not exercised.
−Removed: 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, 2023 and 2022.
−Removed: (Dollars in thousands)
−Removed: September 30,
−Removed: September 30,
−Removed: Operating lease cost
−Removed: Other information:
−Removed: Cash paid for amounts included in the measurement of lease liabilities
−Removed: Operating cash flows from operating leases
−Removed: Right-of-use assets obtained in exchange for new lease liabilities - operating leases
−Removed: Weighted-average remaining lease term - operating leases
−Removed: Weighted-average discount rate - operating leases
−Removed: The following table presents lease maturities as of September 30, 2023.
−Removed: (Dollars in thousands)
−Removed: Maturity Analysis of Operating Lease Liabilities:
−Removed: September 30,
−Removed: Imputed Interest
−Removed: Operating Lease Liability
(10) Reportable Segments
7 unchanged sentences
(Dollars in thousands)
−Removed: As of and for the three months ended September 30, 2023
+Added: As of and for the three months ended March 31, 2024
Interest income
8 unchanged sentences
Net income (loss)
−Removed: As of and for the three months ended September 30, 2022
−Removed: Interest income
−Removed: Interest expense
−Removed: Net interest income
−Removed: Provision for loan losses
−Removed: Noninterest income
−Removed: Appraisal management fee income
−Removed: Noninterest expense
−Removed: Appraisal management fee expense
−Removed: Income tax expense (benefit)
−Removed: Net income (loss)
−Removed: As of and for the nine months ended September 30, 2023
+Added: As of and for the three months ended March 31, 2023
Interest income
8 unchanged sentences
Net income (loss)
−Removed: As of and for the nine months ended September 30, 2022
−Removed: Interest income
−Removed: Interest expense
−Removed: Net interest income
−Removed: Provision for loan losses
−Removed: Noninterest income
−Removed: Appraisal management fee income
−Removed: Noninterest expense
−Removed: Appraisal management fee expense
−Removed: Income tax expense (benefit)
−Removed: Net income (loss)
−Removed: Subsequent Events
−Removed: The Company has reviewed and evaluated subsequent events and transactions for material subsequent events through the date the financial statements are issued.
−Removed: Management has concluded that there were no material subsequent events.
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.