3 unchanged sentences
(In thousands, except share data;
−Removed: March 31, 2021 December 31, 2020
+Added: June 30, 2021 December 31, 2020
Cash and due from banks $ 86,052 $ 77,253
34 unchanged sentences
Preferred stock, no par value:
−Removed: 1,000,000 shares authorized, zero issued and outstanding at March 31, 2021 and December 31, 2020
+Added: 1,000,000 shares authorized, zero issued and outstanding at June 30, 2021 and December 31, 2020
Common stock, no par value:
50,000,000 shares authorized;
−Removed: 29,727,122 and 29,727,214 issued and outstanding at March 31, 2021 and December 31, 2020, respectively
+Added: 29,716,294 and 29,727,214 issued and outstanding at June 30, 2021 and December 31, 2020, respectively
531,038 530,835
8 unchanged sentences
Three months ended
+Added: June 30, Six months ended
+Added: 2021 2020 2021 2020
Interest and dividend income:
32 unchanged sentences
Dividends per share $ 0.25 $ 0.22 $ 0.50 $ 0.44
−Removed: CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
+Added: CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(In thousands;
Three months ended
+Added: June 30, Six months ended
+Added: 2021 2020 2021 2020
Net income $ 28,362 $ 7,430 $ 62,011 $ 23,551
Other comprehensive income (loss), net of tax:
−Removed: Unrealized losses on available for sale securities arising during the period ( 8,690 ) ( 20,822 )
+Added: Unrealized gains (losses) on available for sale securities arising during the period 5,206 24,625 ( 3,484 ) 3,803
Change in minimum pension liability — 1,126 — 2,038
1 unchanged sentence
Other comprehensive income (loss) 5,206 25,751 ( 4,113 ) 5,841
−Removed: Comprehensive income (loss) $ 24,330 $ ( 3,789 )
+Added: Comprehensive income $ 33,568 $ 33,181 $ 57,898 $ 29,392
See accompanying notes to unaudited condensed consolidated financial statements.
6 unchanged sentences
Income (Loss) Total
+Added: Balance at March 31, 2020 29,973,516 $ 534,623 $ 356,935 $ ( 25,132 ) $ 866,426
+Added: Net income 7,430 7,430
+Added: Other comprehensive income 25,751 25,751
+Added: Stock options exercised 8,000 140 140
+Added: RSU vesting 338 338
+Added: PSU vesting 154 154
+Added: RSUs released 28,727 —
+Added: PSUs released 20,265 —
+Added: Repurchase of common stock ( 271,299 ) ( 4,833 ) ( 3,176 ) ( 8,009 )
+Added: Dividends paid ($ 0.22 per share)
+Added: ( 6,544 ) ( 6,544 )
+Added: Three months ended June 30, 2020 29,759,209 $ 530,422 $ 354,645 $ 619 $ 885,686
+Added: Balance at March 31, 2021 29,727,122 $ 531,367 $ 408,211 $ 2,961 $ 942,539
+Added: Net income 28,362 28,362
+Added: Other comprehensive income 5,206 5,206
+Added: Stock options exercised 1,675 28 28
+Added: RSU vesting 405 405
+Added: PSU vesting 221 221
+Added: RSUs released 42,511 —
+Added: PSUs released — —
+Added: Repurchase of common stock ( 55,014 ) ( 983 ) ( 1,568 ) ( 2,551 )
+Added: Dividends paid ($ 0.25 per share)
+Added: ( 7,430 ) ( 7,430 )
+Added: Three months ended June 30, 2021 29,716,294 $ 531,038 $ 427,575 $ 8,167 $ 966,780
+Added: TRICO BANCSHARES
+Added: CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (continued)
+Added: (In thousands, except share and per share data;
+Added: Stock Retained
+Added: Earnings Accumulated
+Added: Comprehensive
+Added: Income (Loss) Total
Balance at January 1, 2020 30,523,824 $ 543,998 $ 367,794 $ ( 5,222 ) $ 906,570
2 unchanged sentences
Net income 23,551 23,551
−Removed: Other comprehensive loss ( 19,910 ) ( 19,910 )
+Added: Other comprehensive income 5,841 5,841
Stock options exercised 16,000 288 288
2 unchanged sentences
RSUs released 29,089 —
+Added: PSUs released 20,265 —
Repurchase of common stock ( 829,969 ) ( 14,795 ) ( 10,509 ) ( 25,304 )
1 unchanged sentence
( 13,208 ) ( 13,208 )
−Removed: Three months ended March 31, 2020 29,973,516 $ 534,623 $ 356,935 $ ( 25,132 ) $ 866,426
+Added: Six months ended June 30, 2020 29,759,209 $ 530,422 $ 354,645 $ 619 $ 885,686
Balance at January 1, 2021 29,727,214 $ 530,835 $ 381,999 $ 12,280 $ 925,114
5 unchanged sentences
RSUs released 42,712 —
+Added: PSUs released — —
Repurchase of common stock ( 55,307 ) ( 988 ) ( 1,573 ) ( 2,561 )
1 unchanged sentence
( 14,862 ) ( 14,862 )
−Removed: Three months ended March 31, 2021 29,727,122 $ 531,367 $ 408,211 $ 2,961 $ 942,539
+Added: Six months ended June 30, 2021 29,716,294 $ 531,038 $ 427,575 $ 8,167 $ 966,780
See accompanying notes to unaudited condensed consolidated financial statements.
2 unchanged sentences
(In thousands;
−Removed: For the three months ended March 31,
+Added: For the six months ended June 30,
Operating activities:
3 unchanged sentences
Amortization of intangible assets 2,862 2,862
−Removed: Provision for (reversal of) credit losses ( 6,060 ) 8,070
+Added: Provision for (reversal of) credit losses on loans ( 6,385 ) 30,089
Amortization of investment securities premium, net 2,855 1,054
+Added: Gain on sale of investment securities — —
Originations of loans for resale ( 129,684 ) ( 84,872 )
2 unchanged sentences
Change in market value of mortgage servicing rights 459 2,494
+Added: Provision for losses on foreclosed assets 9 106
+Added: Gain on transfer of loans to foreclosed assets ( 20 ) —
Gain on sale of foreclosed assets ( 46 ) ( 57 )
Operating lease expense payments ( 2,430 ) ( 2,480 )
+Added: (Gain) loss on disposal of fixed assets ( 426 ) 15
Increase in cash value of life insurance ( 1,418 ) ( 1,430 )
3 unchanged sentences
Interest payable ( 336 ) ( 673 )
−Removed: Accretion of operating lease ROUA 1,317 1,362
+Added: Amortization of operating lease ROUA 2,645 2,720
Other assets and liabilities, net ( 6,195 ) 6,474
7 unchanged sentences
Proceeds from sale of other real estate owned 756 570
+Added: Proceeds from sale of premises and equipment 2,700 —
Purchases of premises and equipment ( 854 ) ( 1,266 )
5 unchanged sentences
Dividends paid ( 14,862 ) ( 13,208 )
+Added: Exercise of stock options 28 148
Net cash from financing activities 482,369 863,130
3 unchanged sentences
Supplemental disclosure of noncash activities:
−Removed: Unrealized loss on securities available for sale $ ( 12,337 ) $ ( 29,561 )
+Added: Unrealized (loss) gain on securities available for sale $ ( 4,945 ) $ 5,398
Market value of shares tendered in-lieu of cash to pay for exercise of options and/or related taxes 451 494
Obligations incurred in conjunction with leased assets 1,308 4,068
+Added: Loans transferred to foreclosed assets 102 —
Supplemental disclosure of cash flow activity:
39 unchanged sentences
disaggregated by sector and bond rating.
−Removed: Accrued interest receivable on held-to-maturity (HTM) debt securities totaled $ 668,000 at March 31, 2021 and is excluded from the estimate of credit losses.
+Added: Accrued interest receivable on held-to-maturity (HTM) debt securities totaled was considered insignificant at June 30, 2021 and is therefore excluded from the estimate of credit losses.
The estimate of expected credit losses considers historical credit loss information that is adjusted for current condition and reasonable and supportable forecasts based on current and expected changes in credit ratings and default rates.
11 unchanged sentences
Losses are charged against the ACL when management believes the uncollectability of an available for sale debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met.
−Removed: No security credit losses were recognized during the three month periods ended March 31, 2021 and 2020, respectively.
+Added: No security credit losses were recognized during the six month periods ended June 30, 2021 and 2020, respectively.
Loans that management has the intent and ability to hold until maturity or payoff are reported at principle amount outstanding, net of deferred loan fees and costs.
109 unchanged sentences
The amortized cost, estimated fair values and allowance for credit losses of investments in debt securities are summarized in the following tables:
−Removed: March 31, 2021
+Added: June 30, 2021
(in thousands) Amortized
27 unchanged sentences
Total debt securities held to maturity $ 284,563 $ 14,163 $ — $ — $ 298,726
−Removed: There were no sales of investment securities during the three months ended March 31, 2021 and 2020, respectively.
−Removed: Investment securities with an aggregate carrying value of $ 417,528,000 and $ 429,049,000 at March 31, 2021 and December 31, 2020, respectively, were pledged as collateral for specific borrowings, lines of credit or local agency deposits.
−Removed: The amortized cost and estimated fair value of debt securities at March 31, 2021 by contractual maturity are shown below.
+Added: There were no sales of investment securities during the three and six months ended June 30, 2021 and 2020, respectively.
+Added: Investment securities with an aggregate carrying value of $ 456,446,000 and $ 429,049,000 at June 30, 2021 and December 31, 2020, respectively, were pledged as collateral for specific borrowings, lines of credit or local agency deposits.
+Added: The amortized cost and estimated fair value of debt securities at June 30, 2021 by contractual maturity are shown below.
Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
−Removed: At March 31, 2021, obligations of U.S.
+Added: At June 30, 2021, obligations of U.S.
government corporations and agencies with a cost basis totaling $ 1,104,406,000 consist almost entirely of residential real estate mortgage-backed securities whose contractual maturity, or principal repayment, will follow the repayment of the underlying mortgages.
1 unchanged sentence
government corporations and agencies is categorized based on final maturity date.
−Removed: At March 31, 2021, the Company estimates the average remaining life of these mortgage-backed securities issued by U.S.
+Added: At June 30, 2021, the Company estimates the average remaining life of these mortgage-backed securities issued by U.S.
government corporations and agencies to be approximately 4.21 years.
Average remaining life is defined as the time span after which the principal balance has been reduced by half.
−Removed: As of March 31, 2021, the contractual final maturity for available for sale and held to maturity investment securities is as follows:
+Added: As of June 30, 2021, the contractual final maturity for available for sale and held to maturity investment securities is as follows:
Debt Securities Available for Sale Held to Maturity
9 unchanged sentences
Gross unrealized losses on debt securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:
−Removed: March 31, 2021:
+Added: June 30, 2021:
Less than 12 months 12 months or more Total
27 unchanged sentences
It is expected that the securities would not be settled at a price less than the amortized cost of the investment.Because management believes the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, there is no impairment on these securities and there has been no allowance for credit losses recorded.
−Removed: At March 31, 2021, 29 debt securities representing obligations of U.S.
+Added: At June 30, 2021, 32 debt securities representing obligations of U.S.
government agencies had unrealized losses with aggregate depreciation of 0.80 % from the Company’s amortized cost basis.
2 unchanged sentences
It is expected that the securities would not be settled at a price less than the amortized cost of the investment.
−Removed: Because management believes the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, there is no impairment on these securities and there has been no allowance for credit losses recorded as of March 31, 2021.
−Removed: At March 31, 2021, 13 debt securities representing obligations of states and political subdivisions had unrealized losses with aggregate depreciation of 3.92 % from the Company’s amortized cost basis.
+Added: Because management believes the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, there is no impairment on these securities and there has been no allowance for credit losses recorded as of June 30, 2021.
+Added: At June 30, 2021, six debt securities representing obligations of states and political subdivisions had unrealized losses with aggregate depreciation of 1.83 % from the Company’s amortized cost basis.
Asset backed securities:
The unrealized losses on investments in asset backed securities were caused by increases in required yields by investors for these types of securities.
−Removed: At the time of purchase, each of these securities was rated AA or AAA and through March 31, 2021 has not experienced any deterioration in credit rating.
−Removed: At March 31, 2021, 27 asset backed securities had unrealized losses with aggregate depreciation of 0.93 % from the Company’s amortized cost basis.
+Added: At the time of purchase, each of these securities was rated AA or AAA and through June 30, 2021 has not experienced any deterioration in credit rating.
+Added: At June 30, 2021, 18 asset backed securities had unrealized losses with aggregate depreciation of 0.63 % from the Company’s amortized cost basis.
The Company continues to monitor these securities for changes in credit rating or other indications of credit deterioration.
−Removed: Because management believes the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, there is no impairment on these securities and there has been no allowance for credit losses recorded as of March 31, 2021.
+Added: Because management believes the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, there is no impairment on these securities and there has been no allowance for credit losses recorded as of June 30, 2021.
The Company monitors credit quality of debt securities held-to-maturity through the use of credit rating.
1 unchanged sentence
The following table summarizes the amortized cost of debt securities held-to-maturity at the dates indicated, aggregated by credit quality indicator:
−Removed: March 31, 2021 December 31, 2020
+Added: June 30, 2021 December 31, 2020
AAA/AA/A BBB/BB/B AAA/AA/A BBB/BB/B
7 unchanged sentences
A summary of loan balances follows:
−Removed: (in thousands) March 31, 2021 December 31, 2020
+Added: (in thousands) June 30, 2021 December 31, 2020
Commercial real estate:
18 unchanged sentences
Allowance for credit losses on loans $ ( 86,062 ) $ ( 91,847 )
−Removed: As of March 31, 2021 and December 31, 2021, the total balance outstanding of PPP loans, which are included in commercial and industrial loans, was $ 370,274,000 (approximately 2,484 loans) and $ 333,982,000 (approximately 2,300 loans), respectively, as compared to total PPP originations of $ 614,826,000 .
−Removed: Included in the balance of outstanding PPP loans as of March 31, 2021 are approximately 1,303 loans with outstanding balances of less than $50,000 each and with a total balance outstanding of $ 26,895,000 .
−Removed: In connection with the origination of the PPP loans, the Company earned $ 23,585,000 in loan fees, offset by deferred loan costs of $ 1,163,000 , the net of which will be recognized over the earlier of loan maturity, repayment or receipt of forgiveness confirmation.
−Removed: As of March 31, 2021 and December 31, 2020, there was $ 9,430,000 and $ 7,212,000 , respectively, in net deferred fee income remaining to be recognized.
−Removed: During the three months ended March 31, 2021 and 2020, the Company recognized $ 5,232,000 and zero , respectively, in fees on PPP loans.
+Added: As of June 30, 2021, the total gross balance outstanding of PPP loans (included within commercial and industrial) was $ 248,582,000 as compared to total PPP originations of $ 640,410,000 .
+Added: In connection with the origination of these loans, the Company earned approximately $ 25,299,000 in loan fees, offset by deferred loan costs of approximately $ 1,245,000 , the net of which will be recognized over the earlier of loan maturity (between 24-60 months), repayment or receipt of forgiveness confirmation.
+Added: As of June 30, 2021 there was approximately $ 8,990,000 in net deferred fee income remaining to be recognized, as compared to $ 7,212,000 in remaining net deferred fee income as of December 31, 2020.
+Added: During the three and six months ended June 30, 2021, the Company recognized $ 2,344,000 and $ 7,304,000 , respectively in fees on PPP loans.
+Added: During the three and six months ended June 30, 2020, the Company recognized $ 2,356,000 , respectively, in fees on PPP loans.
Note 4 – Allowance for Credit Losses
For the periods indicated, the following tables summarize the activity in the allowance for credit losses on loans which is recorded as a contra asset, and the reserve for unfunded commitments which is recorded on the balance sheet within other liabilities:
−Removed: Allowance for credit losses – Three months ended March 31, 2021
+Added: Allowance for credit losses – Three months ended June 30, 2021
(in thousands) Beginning
17 unchanged sentences
Total $ 89,521 $ ( 387 ) $ 653 $ ( 260 ) $ 89,527
+Added: Allowance for credit losses – Six months ended June 30, 2021
+Added: (in thousands) Beginning
+Added: Balance Charge-offs Recoveries Provision (benefit) Ending
+Added: Commercial real estate:
+Added: CRE non-owner occupied $ 29,380 $ — $ 2 $ ( 3,354 ) $ 26,028
+Added: CRE owner occupied 10,861 — 1 ( 399 ) 10,463
+Added: Multifamily 11,472 — — 1,724 13,196
+Added: Farmland 1,980 — — ( 30 ) 1,950
+Added: Total commercial real estate loans 53,693 — 3 ( 2,059 ) 51,637
+Added: SFR 1-4 1st DT liens 10,117 — 11 501 10,629
+Added: SFR HELOCs and junior liens 11,771 — 797 ( 1,867 ) 10,701
+Added: Other 3,260 ( 279 ) 165 ( 526 ) 2,620
+Added: Total consumer loans 25,148 ( 279 ) 973 ( 1,892 ) 23,950
+Added: Commercial and industrial 4,252 ( 334 ) 215 378 4,511
+Added: Construction 7,540 — — ( 2,589 ) 4,951
+Added: Agriculture production 1,209 — 22 ( 224 ) 1,007
+Added: Leases 5 — — 1 6
+Added: Allowance for credit losses on loans 91,847 ( 613 ) 1,213 ( 6,385 ) 86,062
+Added: Reserve for unfunded commitments 3,400 — — 65 3,465
+Added: Total $ 95,247 $ ( 613 ) $ 1,213 $ ( 6,320 ) $ 89,527
In determining the allowance for credit losses, accruing loans with similar risk characteristics are generally evaluated collectively.
2 unchanged sentences
Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results.
−Removed: The Company utilizes a reasonable and supportable forecast period of approximately eight quarters and obtains the forecast data from publicly available sources.
−Removed: The Company also considers the impact of portfolio concentrations, changes in underwriting practices, imprecision in its economic forecasts, and other risk factors that might influence its loss estimation process.
−Removed: During the quarter ended March 31, 2021, the majority of the change in ACL during the period is primarily attributed to portfolio-wide qualitative indicators related to forecasted changes in the US Unemployment outlook and concentration risk.
−Removed: The aggregate change in these qualitative factors during the three months ended March 31, 2021 were $ 5,435,000 .
−Removed: Further, quantitative calculations decreases based on historical loss experience further reduced required credit reserves by $ 471,000 as of March 31, 2021.
−Removed: Management noted that the majority of economic forecasts utilized in the ACL calculation have recent estimates that forecast the U.S.
−Removed: economy rebounding to pre-pandemic levels during 2021.
−Removed: These forecasts remain cautious as a result of;
−Removed: lingering supply chain interruptions caused by an imbalance in supply and demand, logistical and transportation issues, and resurgences in COVID variants in certain nations worldwide.
−Removed: Management believes that the allowance for credit losses at March 31, 2021 appropriately reflected expected credit losses inherent in the loan portfolio at that date.
+Added: The Company utilizes a forecast period of approximately eight quarters and obtains the forecast data from publicly available sources as of the balance sheet date.
+Added: This forecast data continues to evolve and included significant shifts in the magnitude of changes for both the unemployment and GDP factors leading up to the balance sheet date.
+Added: Management noted that the majority of economic forecasts utilized
+Added: in the ACL calculation seem to have rebounded slightly in the current quarter, coinciding with the widespread availability of vaccines, continued easing of occupancy and social distancing restrictions, and continued government stimulus efforts.
+Added: Management believes that the allowance for credit losses at June 30, 2021 appropriately reflected expected credit losses inherent in the loan portfolio at that date.
Allowance for credit losses – Year ended December 31, 2020
22 unchanged sentences
The Company recognized an increase in the ACL for loans totaling $ 18,913,000 , including a reclassification of $ 481,000 from discounts on acquired loans to the allowance for credit losses, as a cumulative effect adjustment from change in accounting policies, with a corresponding decrease in retained earnings, net of $ 5,449,000 in taxes of $ 12,983,000 .
−Removed: Allowance for loan losses – Three months ended March 31, 2020
+Added: Allowance for credit losses – Three months ended June 30, 2020
(in thousands) Beginning
−Removed: Balance Adoption of CECL Charge-offs Recoveries Provision
−Removed: (benefit) Ending Balance
+Added: Balance Charge-offs Recoveries Provision Ending Balance
Commercial real estate:
15 unchanged sentences
Total $ 60,756 $ ( 491 ) $ 230 $ 22,243 $ 82,738
+Added: Allowance for credit losses – Six months ended June 30, 2020
+Added: (in thousands) Beginning
+Added: Balance Adoption of CECL Charge-offs Recoveries Provision Ending Balance
+Added: Commercial real estate:
+Added: CRE non-owner occupied $ 5,948 $ 6,701 $ — $ 193 $ 13,249 $ 26,091
+Added: CRE owner occupied 2,027 2,281 — 9 4,393 8,710
+Added: Multifamily 3,352 2,281 — — 2,948 8,581
+Added: Farmland 668 585 — — 215 1,468
+Added: Total commercial real estate loans 11,995 11,848 — 202 20,805 44,850
+Added: SFR 1-4 1st DT liens 2,306 2,675 ( 11 ) 412 2,633 8,015
+Added: SFR HELOCs and junior liens 6,183 4,638 ( 23 ) 140 1,170 12,108
+Added: Other 1,595 971 ( 373 ) 167 682 3,042
+Added: Total consumer loans 10,084 8,284 ( 407 ) 719 4,485 23,165
+Added: Commercial and industrial 4,867 ( 1,961 ) ( 594 ) 181 1,525 4,018
+Added: Construction 3,388 933 — — 2,454 6,775
+Added: Agriculture production 261 ( 179 ) — 20 817 919
+Added: Leases 21 ( 12 ) — — 3 12
+Added: Allowance for credit losses on loans 30,616 18,913 ( 1,001 ) 1,122 30,089 79,739
+Added: Reserve for unfunded commitments 2,775 — — — 224 2,999
+Added: Total $ 33,391 $ 18,913 $ ( 1,001 ) $ 1,122 $ 30,313 $ 82,738
As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including, but not limited to, trends relating to (i) the level of criticized and classified loans, (ii) net charge-offs, (iii) non-performing loans, and (iv) delinquency within the portfolio.
23 unchanged sentences
Based on the most recent analysis performed, the risk category of loans by class of loans is as follows for the period indicated:
−Removed: Term Loans Amortized Cost Basis by Origination Year – As of March 31, 2021
+Added: Term Loans Amortized Cost Basis by Origination Year – As of June 30, 2021
(in thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total
6 unchanged sentences
Total CRE non-owner occupied risk ratings $ 89,643 $ 120,974 $ 212,284 $ 150,413 $ 250,819 $ 626,970 $ 83,153 $ — $ 1,534,256
−Removed: Term Loans Amortized Cost Basis by Origination Year – As of March 31, 2021
−Removed: (in thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total
Commercial real estate:
26 unchanged sentences
Total SFR 1st DT liens $ 173,937 $ 182,911 $ 59,963 $ 41,807 $ 42,199 $ 147,397 $ — $ 6,159 $ 654,373
+Added: Term Loans Amortized Cost Basis by Origination Year – As of June 30, 2021
+Added: (in thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total
Consumer loans:
5 unchanged sentences
Total SFR HELOCs and Junior Liens $ 624 $ — $ — $ — $ — $ 351 $ 310,394 $ 13,758 $ 325,127
−Removed: Term Loans Amortized Cost Basis by Origination Year – As of March 31, 2021
−Removed: (in thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total
Consumer loans:
26 unchanged sentences
Total agriculture production loans $ 1,241 $ 1,012 $ 1,767 $ 1,370 $ 1,229 $ 1,080 $ 34,268 $ — $ 41,967
+Added: Term Loans Amortized Cost Basis by Origination Year – As of June 30, 2021
+Added: (in thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total
Lease risk ratings
4 unchanged sentences
Total leases $ 5,199 $ — $ — $ — $ — $ — $ — $ — $ 5,199
−Removed: Term Loans Amortized Cost Basis by Origination Year – As of March 31, 2021
−Removed: (in thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total
Total loans outstanding:
93 unchanged sentences
The following table shows the ending balance of current and past due originated loans by loan category as of the date indicated:
−Removed: Analysis of Past Due Loans - As of March 31, 2021
+Added: Analysis of Past Due Loans - As of June 30, 2021
(in thousands) 30-59 days 60-89 days > 90 days Total Past
35 unchanged sentences
Non Accrual Loans
−Removed: As of March 31, 2021 As of December 31, 2020
+Added: As of June 30, 2021 As of December 31, 2020
(in thousands) Non accrual with no allowance for credit losses Total non accrual Past due 90 days or more and still accruing Non accrual with no allowance for credit losses Total non accrual Past due 90 days or more and still accruing
16 unchanged sentences
Total, net $ 24,953 $ 31,840 $ — $ 21,703 $ 26,053 $ —
−Removed: Interest income on non accrual loans that would have been recognized during the three months ended March 31, 2021 and 2020, if all such loans had been current in accordance with their original terms, totaled $ 536,000 and $ 431,000 , respectively.
−Removed: Interest income actually recognized on these originated loans during the three months ended March 31, 2021 and 2020 was $ 17,000 and $ 47,000 , respectively.
+Added: Interest income on non accrual loans that would have been recognized during the three months ended June 30, 2021 and 2020, if all such loans had been current in accordance with their original terms, totaled $ 524,000 and $ 428,000 , respectively.
+Added: Interest income actually recognized on these originated loans during the three months ended June 30, 2021 and 2020 was $ 159,000 and $ 39,000 , respectively.
+Added: Interest income on non accrual loans that would have been recognized during the six months ended June 30, 2021 and 2020, if all such loans had been current in accordance with their original terms, totaled $ 1,060,000 and $ 859,000 , respectively.
+Added: Interest income actually recognized on these originated loans during the six months ended June 30, 2021 and 2020 was $ 176,000 and $ 86,000 , respectively.
The following tables present the amortized cost basis of collateral dependent loans by class of loans as of the following periods:
−Removed: As of March 31, 2021
+Added: As of June 30, 2021
(in thousands) Retail Office Warehouse Other Multifamily Farmland SFR -1st Deed SFR -2nd Deed Automobile/Truck A/R and Inventory Equipment Total
36 unchanged sentences
The following tables show certain information regarding TDRs that occurred during the periods indicated:
−Removed: TDR information for the three months ended March 31, 2021
+Added: TDR information for the three months ended June 30, 2021
(dollars in thousands) Number Pre-mod
25 unchanged sentences
Total 3 $ 2,706 $ 2,706 $ 999 — $ — $ —
−Removed: TDR information for the three months ended March 31, 2020
+Added: TDR information for the three months ended June 30, 2020
(dollars in thousands) Number Pre-mod
25 unchanged sentences
Total — $ — $ — $ — 1 $ 735 $ —
+Added: TDR Information for the six months ended June 30, 2021
+Added: (dollars in thousands) Number Pre-mod
+Added: balance Post-mod
+Added: balance Financial
+Added: impact due to
+Added: provision Number that
+Added: defaulted during
+Added: the period Recorded
+Added: investment of
+Added: defaulted during
+Added: the period Financial impact
+Added: taken as charge-
+Added: offs or additional
+Added: Commercial real estate:
+Added: CRE non-owner occupied 2 $ 1,023 $ 1,018 $ 1,020 — $ — $ —
+Added: CRE owner occupied 1 740 742 742 — — —
+Added: Multifamily — — — — — — —
+Added: Farmland — — — — 3 847 —
+Added: Total commercial real estate loans 3 1,763 1,760 1,762 3 847 —
+Added: SFR 1-4 1st DT liens — — — — — — —
+Added: SFR HELOCs and junior liens — — — — — — —
+Added: Other — — — — — — —
+Added: Total consumer loans — — — — — — —
+Added: Commercial and industrial 5 2,316 2,310 603 1 247 —
+Added: Construction — — — — — — —
+Added: Agriculture production — — — — — — —
+Added: Leases — — — — — — —
+Added: Total 8 $ 4,079 $ 4,070 $ 2,365 4 $ 1,094 $ —
+Added: TDR Information for the six months ended June 30, 2020
+Added: (dollars in thousands) Number Pre-mod
+Added: balance Post-mod
+Added: balance Financial
+Added: impact due to
+Added: provision Number that
+Added: defaulted during
+Added: the period Recorded
+Added: investment of
+Added: defaulted during
+Added: the period Financial impact
+Added: taken as charge-
+Added: offs or additional
+Added: Commercial real estate:
+Added: CRE non-owner occupied 1 $ 257 $ 251 $ — — $ — $ —
+Added: CRE owner occupied — — — — — — —
+Added: Multifamily — — — — — — —
+Added: Farmland 2 230 298 — — — —
+Added: Total commercial real estate loans 3 487 549 — — — —
+Added: SFR 1-4 1st DT liens — — — — 2 1,037 —
+Added: SFR HELOCs and junior liens 2 172 169 — — — —
+Added: Other — — — — — — —
+Added: Total consumer loans 2 172 169 — 2 1,037 —
+Added: Commercial and industrial 1 21 20 21 — — —
+Added: Construction — — — — — — —
+Added: Agriculture production — — — — — — —
+Added: Leases — — — — — — —
+Added: Total 6 $ 680 $ 738 $ 21 2 $ 1,037 $ —
The Company also modified the terms of select loans in an effort to assist borrowers that were not related to the COVID-19 pandemic.
8 unchanged sentences
If the asset is determined not to be collateral dependent, the impairment is measured on the net present value difference between the expected cash flows of the restructured loan and the cash flows which would have been received under the original terms.
−Removed: The effect of this could result in a requirement for additional provision to the reserve.
+Added: The effect of this could result in a requirement for additional provision to the
The effect of these required provisions for the period are indicated above.
6 unchanged sentences
All of the Company’s leases are comprised of operating leases in which the Company is lessee of real estate property for branches, ATM locations, and general administration and operations.
−Removed: The Company elected not to include short-term leases (i.e.
+Added: The Company has elected not to include short-term leases (i.e.
leases with initial terms of 12 month or less) within the ROUA and lease liability.
7 unchanged sentences
As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term.
−Removed: For operating leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019 was used.
The lease liability is reduced based on the discounted present value of remaining payments as of each reporting period.
1 unchanged sentence
The following table presents the components of lease expense for the periods ended:
−Removed: Three months ended March 31,
+Added: Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2020 2021 2020
5 unchanged sentences
The following table presents supplemental cash flow information related to leases for the periods ended:
−Removed: Three months ended March 31,
+Added: Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2020 2021 2020
5 unchanged sentences
Weighted-average discount rate 3.03 % 3.17 %
−Removed: At March 31, 2021, future expected operating lease payments are as follows:
+Added: At June 30, 2021, future expected operating lease payments are as follows:
(in thousands)
2 unchanged sentences
Discount for present value of expected cash flows ( 4,632 )
−Removed: Lease liability at March 31, 2021 $ 27,780
+Added: Lease liability at June 30, 2021 $ 26,707
Note 6 - Deposits
−Removed: A summary of the balances of deposits follows (in thousands):
+Added: A summary of the balances of deposits follows:
+Added: (in thousands) June 30,
2021 December 31,
5 unchanged sentences
Total deposits $ 6,992,053 $ 6,505,934
−Removed: Certificate of deposit balances of $ 10,000,000 from the State of California were included in time certificates, over $250,000, at March 31, 2021 and December 31, 2020, respectively.
+Added: Certificate of deposit balances of $ 10,000,000 from the State of California were included in time certificates, over $250,000, at June 30, 2021 and December 31, 2020, respectively.
The Company participates in a deposit program offered by the State of California whereby the State may make deposits at the Company’s request subject to collateral and credit worthiness constraints.
The negotiated rates on these State deposits are generally more favorable than other wholesale funding sources available to the Company.
−Removed: Overdrawn deposit balances of $ 813,000 and $ 985,000 were classified as consumer loans at March 31, 2021 and December 31, 2020, respectively.
+Added: Overdrawn deposit balances of $ 916,000 and $ 985,000 were classified as consumer loans at June 30, 2021 and December 31, 2020, respectively.
Note 7 - Commitments and Contingencies
The following table presents a summary of the Bank’s commitments and contingent liabilities:
−Removed: (in thousands) March 31,
+Added: (in thousands) June 30,
2021 December 31,
9 unchanged sentences
Dividends Paid
−Removed: The Bank paid to the Company cash dividends in the aggregate amounts of $ 7,772,000 and $ 26,754,000 during the three months ended March 31, 2021 and 2020, respectively.
−Removed: The Bank is regulated by the Federal Deposit Insurance Corporation (FDIC) and the State of California Department of Business Oversight (DBO).
−Removed: Absent approval from the Commissioner of the DBO, California banking laws generally limit the Bank’s ability to pay dividends to the lesser of (1) retained earnings or (2) net income for the last three fiscal years, less cash distributions paid during such period.
+Added: The Bank paid to the Company cash dividends in the aggregate amounts of $ 8,367,000 and $ 12,694,000 during the three months ended June 30, 2021 and 2020, respectively, and $ 16,139,000 and $ 39,448,000 during the six months ended June 30, 2021 and 2020,
+Added: respectively.
+Added: The Bank is regulated by the Federal Deposit Insurance Corporation (FDIC) and the State Department of Financial Protection and Innovation (DFPI).
+Added: Absent approval from the Commissioner of the DFPI, California banking laws generally limit the Bank’s ability to pay dividends to the lesser of (1) retained earnings or (2) net income for the last three fiscal years, less cash distributions paid during such period.
Stock Repurchase Plan
1 unchanged sentence
The actual timing of any share repurchases will be determined by the Company's management and therefore the total value of the shares to be purchased under the program is subject to change.
−Removed: The 2021 Repurchase Plan has no expiration date and the Company has had no share repurchases during the quarter ended March 31, 2021.
+Added: The 2021 Repurchase Plan has no expiration date (in accordance with applicable laws and regulations) and during the three and six month periods June 30, 2021, the Company repurchased 45,354 shares with a market value of $ 2,101,000 , respectively.
In connection with approval of the 2021 Repurchase Plan, the Company’s previous repurchase program adopted on November 12, 2019 (the 2019 Repurchase Plan) was terminated.
3 unchanged sentences
The Company's shareholder-approved equity compensation plans permit employees to tender recently vested shares in lieu of cash for the payment of exercise price, if applicable, and the tax withholding on such shares.
−Removed: During the three months ended March 31, 2021 and 2020, employees tendered zero and 4,668 shares, respectively, of the Company’s common stock in connection with option exercises.
−Removed: Employees also tendered 70 and 133 shares in connection with the tax withholding requirements of other share based awards during the three months ended March 31, 2021 and 2020, respectively.
−Removed: In total, shares of the Company's common stock tendered had market values of $ 2,500 and $ 153,000 during the quarter ended March 31, 2021 and 2020, respectively.
+Added: During the three months ended June 30, 2021 and 2020, employees tendered zero shares, respectively, of the Company’s common stock in connection with option exercises.
+Added: During the six months ended June 30, 2021 and 2020, employees tendered zero and 4,668 shares, respectively, of the Company’s common stock in connection with option exercises.
+Added: Employees also tendered 9,660 and 11,306 shares in connection with the tax withholding requirements of other share based awards during the three months ended June 30, 2021 and 2020, respectively, and 9,730 and 11,439 during the six months ended June 30, 2021 and 2020, respectively.
+Added: In total, shares of the Company's common stock tendered had market values of $ 450,000 and $ 346,000 during the quarters ended June 30, 2021 and 2020, respectively, and $ 452,000 and $ 494,000 during the year to date periods June 30, 2021 and 2020, respectively.
The tendered shares were retired.
6 unchanged sentences
While no new awards can be granted under the 2009 Plan, existing grants continue to be governed by the terms, conditions and procedures set forth in any applicable award agreement.
−Removed: Stock option activity during the three months ended March 31, 2021 is summarized in the following table:
−Removed: of Shares Option Price
−Removed: per Share Weighted
+Added: Stock option activity during the six months ended June 30, 2021 is summarized in the following table:
+Added: of Shares Weighted
Exercise Price
−Removed: Outstanding at December 31, 2020 128,500 $ 14.54 to $ 23.21
+Added: Outstanding at December 31, 2020 128,500 $ 17.72
Options granted — —
−Removed: Options exercised — $ — to $ —
+Added: Options exercised ( 1,675 ) 16.59
Options forfeited — —
−Removed: Outstanding at March 31, 2021 128,500 $ 14.54 to $ 23.21
−Removed: The following table shows the number, weighted-average exercise price, intrinsic value, and weighted average remaining contractual life of options exercisable, options not yet exercisable and total options outstanding as of March 31, 2021:
+Added: Outstanding at June 30, 2021 126,825 $ 17.74
+Added: The following table shows the number, weighted-average exercise price, intrinsic value, and weighted average remaining contractual life of options exercisable, options not yet exercisable and total options outstanding as of June 30, 2021:
Exercisable Currently Not
3 unchanged sentences
Intrinsic value (in thousands) $ 3,763 $ — $ 3,763
−Removed: Weighted average remaining contractual term (yrs.) 1.7 n/a 1.7
−Removed: As of March 31, 2021 all options outstanding are fully vested and are expected to be exercised prior to expiration.
−Removed: The Company did not modify any option grants during 2020 or the three months ended March 31, 2021.
−Removed: Activity related to restricted stock unit awards during the three months ended March 31, 2021 is summarized in the following table:
+Added: Weighted average remaining contractual term (yrs.) 1.5 0.0 1.5
+Added: As of June 30, 2021 all options outstanding are fully vested and are expected to be exercised prior to expiration.
+Added: The Company did not modify any option grants during 2020 or the six months ended June 30, 2021.
+Added: Activity related to restricted stock unit awards during the six months ended June 30, 2021 is summarized in the following table:
Vesting RSUs Market Plus
4 unchanged sentences
RSUs forfeited/expired ( 114 ) ( 75 )
−Removed: Outstanding at March 31, 2021 100,057 81,615
−Removed: During the three months ended March 30, 2021 and 2020 there were no restricted stock unit awards granted under the 2019 Plan.
−Removed: The 100,057 of service condition vesting RSUs outstanding as of March 31, 2021 include a feature whereby each RSU outstanding is credited with a dividend amount equal to any common stock cash dividend declared and paid, and the credited amount is divided by the closing price of the Company’s stock on the dividend payable date to arrive at an additional amount of RSUs outstanding under the original grant.
+Added: Outstanding at June 30, 2021 105,102 113,019
+Added: The 105,102 of service condition vesting RSUs outstanding as of June 30, 2021 include a feature whereby each RSU outstanding is credited with a dividend amount equal to any common stock cash dividend declared and paid, and the credited amount is divided by the closing price of the Company’s stock on the dividend payable date to arrive at an additional amount of RSUs outstanding under the original grant.
The dividend credits follow the same vesting requirements as the RSU awards and are not considered participating securities.
−Removed: The 100,057 of service condition vesting RSUs outstanding as of March 31, 2021 are expected to vest, and be released, on a weighted-average basis, over the next 1.2 years.
−Removed: The Company expects to recognize $ 2,058,000 of pre-tax compensation costs related to these service condition vesting RSUs between March 31, 2021 and their vesting dates.
−Removed: The Company did not modify any service condition vesting RSUs during 2020 or during the three months ended March 31, 2021.
−Removed: The 81,615 of market plus service condition vesting RSUs outstanding as of March 31, 2021 are expected to vest, and be released, on a weighted-average basis, over the next 1.6 years.
−Removed: The Company expects to recognize $ 1,096,000 of pre-tax compensation costs related to these RSUs between March 31, 2021 and their vesting dates.
−Removed: As of March 31, 2021, the number of market plus service condition vesting RSUs outstanding that will actually vest, and be released, may be reduced to zero or increased to 122,423 depending on the total return of the Company’s common stock versus the total return of an index of bank stocks from the grant date to the vesting date.
−Removed: The Company did not modify any market plus service condition vesting RSUs during 2020 or during the three months ended March 31, 2021.
+Added: The 105,102 of service condition vesting RSUs outstanding as of June 30, 2021 are expected to vest, and be released, on a weighted-average basis, over the next 2.7 years.
+Added: The Company expects to recognize $ 3,894,000 of pre-tax compensation costs related to these service condition vesting RSUs between June 30, 2021 and their vesting dates.
+Added: The Company did not modify any service condition vesting RSUs during 2020 or during the six months ended June 30, 2021.
+Added: The 113,019 of market plus service condition vesting RSUs outstanding as of June 30, 2021 are expected to vest, and be released, on a weighted-average basis, over the next 2.4 years.
+Added: The Company expects to recognize $ 2,106,000 of pre-tax compensation costs related to these RSUs between June 30, 2021 and their vesting dates.
+Added: As of June 30, 2021, the number of market plus service condition vesting RSUs outstanding that will actually vest, and be released, may be reduced to zero or increased to 169,529 depending on the total return of the Company’s common stock versus the total return of an index of bank stocks from the grant date to the vesting date.
+Added: The Company did not modify any market plus service condition vesting RSUs during 2020 or during the six months ended June 30, 2021.
Note 10 - Non-interest Income and Expense
1 unchanged sentence
Three months ended
−Removed: (dollars in thousands) 2021 2020
+Added: June 30, Six months ended
+Added: (in thousands) 2021 2020 2021 2020
ATM and interchange fees $ 6,558 $ 5,165 $ 12,419 $ 10,276
10 unchanged sentences
Gain on sale of investment securities — — — —
−Removed: (Loss) gain on marketable equity securities ( 53 ) 47
+Added: Gain (loss) on marketable equity securities 8 25 ( 45 ) 72
Other 115 142 819 ( 55 )
1 unchanged sentence
Total non-interest income $ 15,957 $ 11,657 $ 32,067 $ 23,477
−Removed: The components of non-interest expense were as follows (in thousands):
+Added: The components of non-interest expense were as follows:
Three months ended
+Added: June 30, Six months ended
+Added: (in thousands) 2021 2020 2021 2020
Base salaries, net of deferred loan origination costs $ 17,537 $ 17,277 $ 33,048 $ 34,900
14 unchanged sentences
Courier service 288 337 582 668
−Removed: Gain on sale of foreclosed assets ( 51 ) ( 41 )
+Added: Gain on sale or acquisition of foreclosed assets ( 15 ) ( 16 ) ( 66 ) ( 57 )
+Added: (Gain) loss on disposal of fixed assets ( 426 ) 15 ( 426 ) 15
Other miscellaneous expense 2,855 4,375 5,204 7,306
6 unchanged sentences
Earnings per share have been computed based on the following:
−Removed: Three months ended March 31,
+Added: Three months ended June 30,
(in thousands) 2021 2020
4 unchanged sentences
Options excluded from diluted earnings per share because of their antidilutive effect — —
+Added: Six months ended June 30,
+Added: (in thousands) 2021 2020
+Added: Net income $ 62,011 $ 23,551
+Added: Average number of common shares outstanding 29,723 30,074
+Added: Effect of dilutive stock options and restricted stock 181 129
+Added: Average number of common shares outstanding used to calculate diluted earnings per share 29,904 30,203
+Added: Options excluded from diluted earnings per share because of their antidilutive effect — —
Note 12 – Comprehensive Income (Loss)
2 unchanged sentences
The components of other comprehensive income and related tax effects are as follows:
−Removed: Three months ended March 31,
+Added: Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2020 2021 2020
16 unchanged sentences
Change in joint beneficiary agreement liability before reclassifications, net of tax — — ( 629 ) —
−Removed: Total other comprehensive loss $ ( 9,319 ) $ ( 19,910 )
+Added: Total other comprehensive income (loss) $ 5,206 $ 25,751 $ ( 4,113 ) $ 5,841
The components of accumulated other comprehensive income, included in shareholders’ equity, are as follows:
−Removed: (in thousands) March 31,
+Added: (in thousands) June 30,
2021 December 31,
12 unchanged sentences
In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, income approach, and/or the cost approach.
−Removed: Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability including assumptions about the risk inherent in a particular valuation technique, the effect of a restriction on the sale or use of an asset and the risk of nonperformance.
+Added: Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability including assumptions about the risk inherent in a particular valuation technique, the effect of a restriction on the sale
+Added: or use of an asset and the risk of nonperformance.
Marketable equity securities, debt securities available-for-sale, loans held for sale, and mortgage servicing rights are recorded at fair value on a recurring basis.
22 unchanged sentences
The fair value of these loans are estimated using one of several methods, including collateral value, fair value of similar debt, enterprise value, liquidation value and discounted cash flows.
−Removed: Those loans not requiring an allowance represent
−Removed: loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans.
+Added: Those loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans.
Loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy.
12 unchanged sentences
The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis (in thousands):
−Removed: Fair value at March 31, 2021 Total Level 1 Level 2 Level 3
+Added: Fair value at June 30, 2021 Total Level 1 Level 2 Level 3
Marketable equity securities $ 2,979 $ 2,979 $ — $ —
20 unchanged sentences
Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally corresponds with the Company’s quarterly valuation process.
−Removed: There were no transfers between any levels during the three months ended March 31, 2021, or the year ended December 31, 2020.
+Added: There were no transfers between any levels during the six months ended June 30, 2021, or the year ended December 31, 2020.
The following table provides a reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the time periods indicated.
Had there been any transfer into or out of Level 3 during the time periods indicated, the amount included in the “Transfers into (out of) Level 3” column would represent the beginning balance of an item in the period (interim quarter) during which it was transferred (in thousands):
−Removed: Three months ended March 31, Beginning
+Added: Three months ended June 30, Beginning
Balance Transfers
4 unchanged sentences
Mortgage servicing rights $ 5,168 — $ ( 1,236 ) $ 318 $ 4,250
+Added: Six months ended June 30, Beginning
+Added: Balance Transfers
+Added: into (out of)
+Added: Level 3 Change
+Added: in Earnings Issuances Ending
+Added: Mortgage servicing rights $ 5,092 — $ ( 459 ) $ 970 $ 5,603
+Added: Mortgage servicing rights $ 6,200 — $ ( 2,494 ) $ 544 $ 4,250
The key unobservable inputs used in determining the fair value of mortgage servicing rights are mortgage prepayment speeds and the discount rate used to discount cash projected cash flows.
1 unchanged sentence
Conversely, a decrease in the mortgage prepayment speed and discount rate will result in a positive fair value adjustment (and increase in the fair value measurement).
−Removed: The following table presents quantitative information about recurring Level 3 fair value measurements at March 31, 2021 and December 31, 2020:
−Removed: As of March 31, 2021:
+Added: The following table presents quantitative information about recurring Level 3 fair value measurements at June 30, 2021 and December 31, 2020:
+Added: As of June 30, 2021:
(in thousands) Valuation
7 unchanged sentences
The tables below present the recorded investment in assets and liabilities measured at fair value on a nonrecurring basis, as of the dates indicated (in thousands):
−Removed: March 31, 2021 Total Level 1 Level 2 Level 3 Total Gains (Losses)
+Added: June 30, 2021 Total Level 1 Level 2 Level 3 Total Gains (Losses)
Individually evaluated loans $ 4,912 — — $ 4,912 $ ( 1,604 )
5 unchanged sentences
Total assets measured at fair value $ 2,403 — — $ 2,403 $ ( 1,334 )
−Removed: March 31, 2020 Total Level 1 Level 2 Level 3 Total Gains (Losses)
+Added: June 30, 2020 Total Level 1 Level 2 Level 3 Total Losses
Individually evaluated loans $ 162 — — $ 162 $ ( 16 )
8 unchanged sentences
At the time of foreclosure, other real estate owned is recorded at fair value less costs to sell, which becomes the property’s new basis.
−Removed: Any write-downs based on the asset’s fair value at the
−Removed: date of acquisition are charged to the allowance for credit losses.
+Added: Any write-downs based on the asset’s fair value at the date of acquisition are charged to the allowance for credit losses.
After foreclosure, management periodically performs valuations such that the real estate is carried at the lower of its new cost basis or fair value, net of estimated costs to sell.
6 unchanged sentences
Under certain circumstances, management discounts are applied based on specific characteristics of an individual property.
−Removed: The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis at March 31, 2021:
−Removed: March 31, 2021 Fair Value
+Added: The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis at June 30, 2021:
+Added: June 30, 2021 Fair Value
(in thousands) Valuation
25 unchanged sentences
Further, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on the fair value estimates and have not been considered in any of these estimates.
−Removed: March 31, 2021 December 31, 2020
+Added: June 30, 2021 December 31, 2020
(in thousands) Carrying
28 unchanged sentences
Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of total, Tier 1, and common equity Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets.
−Removed: The following tables present actual and required capital ratios as of March 31, 2021 and December 31, 2020 for the Company and the Bank under applicable Basel III Capital Rules.
−Removed: The minimum capital amounts presented include the minimum required capital levels as of March 31, 2021 and December 31, 2020 based on the then phased-in provisions of the Basel III Capital Rules.
+Added: The following tables present actual and required capital ratios as of June 30, 2021 and December 31, 2020 for the Company and the Bank under applicable Basel III Capital Rules.
+Added: The minimum capital amounts presented include the minimum required capital levels as of June 30, 2021 and December 31, 2020 based on the then phased-in provisions of the Basel III Capital Rules.
Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.
1 unchanged sentence
Considered Well
−Removed: As of March 31, 2021:
+Added: As of June 30, 2021:
Amount Ratio Amount Ratio Amount Ratio
29 unchanged sentences
Tri Counties Bank $ 714,811 9.76 % $ 292,949 4.00 % $ 366,186 5.00 %
−Removed: As of March 31, 2021 and December 31, 2020, capital levels at the Company and the Bank exceed all capital adequacy requirements under the Basel III Capital Rules.
−Removed: Also, at March 31, 2021 and December 31, 2020, the Bank’s capital levels exceeded the minimum amounts necessary to be considered well capitalized under the current regulatory framework for prompt corrective action.
+Added: As of June 30, 2021 and December 31, 2020, capital levels at the Company and the Bank exceed all capital adequacy requirements under the Basel III Capital Rules.
+Added: Also, at June 30, 2021 and December 31, 2020, the Bank’s capital levels exceeded the minimum amounts necessary to be considered well capitalized under the current regulatory framework for prompt corrective action.
The Basel III Capital Rules require for all banking organizations to maintain a capital conservation buffer above the minimum risk-based capital requirements in order to avoid certain limitations on capital distributions, stock repurchases and discretionary bonus payments to executive officers.
The capital conservation buffer is exclusively composed of common equity tier 1 capital, and it applies to each of the risk-based capital ratios but not the leverage ratio.
−Removed: At March 31, 2021, the Company and the Bank are in compliance with the capital conservation buffer requirement.
+Added: At June 30, 2021, the Company and the Bank are in compliance with the capital conservation buffer requirement.
+Added: Note 15 - Subsequent Events
+Added: On July 27, 2021, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Valley Republic Bancorp, a California corporation (“Valley”), providing for the merger of Valley with and into the Company, with the Company as the surviving corporation.
+Added: The Merger Agreement contemplates that immediately after the Merger, Valley Republic Bank, a California state-chartered bank and wholly-owned subsidiary of Valley, will merge with and into Tri Counties Bank, a California state-chartered bank and wholly-owned subsidiary of the Company, with Tri Counties Bank as the surviving bank (the “Bank Merger”).
+Added: The Merger Agreement was adopted and unanimously approved by the Board of Directors of each of the Company and Valley.
+Added: As of June 30, 2021, Valley had a total asset size of approximately $ 1.36 billion.
+Added: The transaction, subject to customary regulatory approvals, is expected to close during the fourth quarter of 2021.
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.