3 unchanged sentences
Consolidated Statements of Financial Condition
−Removed: September 30, 2021 and December 31, 2020
+Added: March 31, 2022 and December 31, 2021
(Amounts in thousands, except share and per share data)
−Removed: September 30,
Cash and due from banks
3 unchanged sentences
Securities available for sale
−Removed: Securities held to maturity (fair values of $ 36,520 at September 30, 2021 and $ 34,970 at December 31, 2020)
−Removed: Loans receivable, net of allowance for loan and lease losses of $ 1,592 at September 30, 2021 and $ 1,561 at December 31, 2020
+Added: Securities held to maturity (fair values of $ 30,084 at March 31, 2022 and $ 33,673 at December 31, 2021)
+Added: Loans receivable, net of allowance for loan and lease losses of $ 1,610 at March 31, 2022 and $ 1,592 at December 31, 2021
Net investment in direct financing leases
7 unchanged sentences
Deferred income taxes
−Removed: Liabilities and Shareholders' and Members' Equity
+Added: Liabilities and Shareholders' Equity
Noninterest bearing
1 unchanged sentence
Total deposits
−Removed: Advances from Federal Home Loan Bank
+Added: Advances from Federal Home Loan Bank (FHLB)
Accrued expenses and other liabilities
Total liabilities
−Removed: Shareholders' and Members' Equity
−Removed: Preferred stock, $ 0.01 par value, 1,000,000 shares authorized,
−Removed: none issued and outstanding
−Removed: Common stock, $ 0.01 par value, 19,000,000 shares authorized,
−Removed: 3,257,759 shares issued and 3,003,653 outstanding at September 30, 2021
+Added: Shareholders' Equity
+Added: Preferred stock, $ 0.01 par value, 1,000,000 shares authorized, none issued and outstanding
+Added: Common stock, $ 0.01 par value, 19,000,000 shares authorized, 3,257,759 shares issued and outstanding
Additional paid in capital
Retained earnings
−Removed: Accumulated other comprehensive income
−Removed: Unearned Employee Stock Ownership Plan ("ESOP") shares, at cost
−Removed: Total shareholders' and members' equity
−Removed: See Notes to Consolidated Financial Statements
+Added: Accumulated other comprehensive loss
+Added: Unearned Employee Stock Ownership Program ("ESOP") shares, at cost
+Added: Total shareholders' equity
+Added: See Notes to Consolidated Financial Statement
Texas Community Bancshares, Inc.
and Subsidiaries
−Removed: Consolidated Statements of Operations
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Consolidated Statements of Operations (Unaudited)
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
Interest Income
6 unchanged sentences
Interest Expense
−Removed: Advances from Federal Home Loan Bank
+Added: Advances from FHLB
Total interest expense
15 unchanged sentences
Total noninterest expenses
−Removed: Income (Loss) Before Income Taxes
−Removed: Income Tax Expense (Benefit)
−Removed: Net Income (Loss)
+Added: Income Before Income Taxes
+Added: Income Tax Expense
Earnings per share - basic
5 unchanged sentences
and Subsidiaries
−Removed: Consolidated Statements of Comprehensive Income (Loss)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Consolidated Statements of Comprehensive (Loss) Income (Unaudited)
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
−Removed: Net Income (Loss)
−Removed: Other items of comprehensive income (loss)
−Removed: Change in unrealized appreciation (depreciation) on investment securities available for sale, before tax
−Removed: Total other items of comprehensive income (loss)
−Removed: Comprehensive Income (Loss) Before Tax
−Removed: Income tax (expense) benefit related to other items of comprehensive (loss) income
+Added: Other items of comprehensive (loss) income
+Added: Net changes in fair value of available for sale securities, before tax
+Added: Total other items of comprehensive (loss) income
+Added: Comprehensive (Loss) Income Before Tax
+Added: Income tax benefit related to other items of comprehensive (loss) income
Comprehensive (Loss) Income
3 unchanged sentences
Consolidated Statements of Shareholders’ and Members’ Equity (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
1 unchanged sentence
Comprehensive
−Removed: Three Months Ended September 30, 2021 and 2020
−Removed: Balance at July 1, 2021
−Removed: Stock Issuance, net of conversion costs of $ 936
−Removed: Net changes in fair value of available for sale securities, net of tax expense of $ 11
−Removed: Leveraged ESOP Shares, 2,606,210 shares
−Removed: ESOP shares earned, 6,515 shares
−Removed: Balance at September 30, 2021
−Removed: Balance at July 1, 2020
−Removed: Net changes in fair value of available for sale securities, net of tax benefit of ($ 16 )
−Removed: Balance at September 30, 2020
−Removed: Shareholders'
−Removed: Comprehensive
−Removed: Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
Income (Loss)
Balance at January 1, 2022
−Removed: Stock issuance, net of conversion costs of $ 1,684
−Removed: Net changes in fair value of available for sale securities, net of tax expense of $ 2
−Removed: Leveraged ESOP shares, 2,606,210 shares
−Removed: ESOP shares earned, 6,515 shares
−Removed: Balance at September 30, 2021
+Added: Net changes in fair value of available for sale securities, net of tax benefit of $ 663
+Added: ESOP shares committed to be released, 3,258 shares
+Added: Balance at March 31, 2022
Balance at January 1, 2021
−Removed: Net changes in fair value of available for sale securities, net of tax expense of $ 47
−Removed: Balance at September 30, 2020
+Added: Conversion costs
+Added: Net changes in fair value of available for sale securities, net of tax benefit of $ 6
+Added: Balance at March 31, 2021
See Notes to Consolidated Financial Statements
1 unchanged sentence
and Subsidiaries
−Removed: Consolidated Statements of Cash Flows
−Removed: Nine Months Ended September 30, 2021 and 2020
+Added: Consolidated Statements of Cash Flows (Unaudited)
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Three Months Ended
Operating Activities
4 unchanged sentences
Appreciation on bank-owned life insurance
+Added: ESOP compensation expense for allocated shares
Deferred income tax
12 unchanged sentences
Loan originations and principal collections, net
−Removed: Net increase in net investment in direct financing leases
+Added: Net decrease (increase) in net investment in direct financing leases
Additions to premises and equipment
2 unchanged sentences
Net increase in deposits
−Removed: Advances from FHLB and other borrowings
Payments on long-term FHLB and other borrowings
−Removed: Proceeds from issuance of common stock net of conversion costs
−Removed: Loan to ESOP for purchase of common stock
+Added: Conversion costs related to the conversion
Net Cash from Financing Activities
6 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
4 unchanged sentences
The Company’s shares began trading on the NASDAQ under the symbol TCBS on July 15, 2021.
−Removed: In connection with the Bank’s Conversion, the Company acquired 100 % ownership of the Bank and the Company offered and sold 3,207,759 shares of its common stock at $ 10.00 per share, for gross offering proceeds of $ 32,078 .
+Added: In connection with the Conversion, the Company acquired 100 % ownership of the Bank and the Company offered and sold 3,207,759 shares of its common stock at $ 10.00 per share, for gross offering proceeds of $ 32,078 .
The cost of the conversion and issuance of common stock was approximately $ 1,684 , which was deducted from the gross offering proceeds.
The Company also contributed 50,000 shares of its common stock and $ 75 of cash to Texas Community Bancshares Foundation, Inc.
−Removed: (the “Foundation”), a charitable foundation formed in connection with the Bank’s Conversion.
−Removed: The Bank’s employee stock ownership plan (“ESOP”) purchased 260,621 shares of the common stock sold by the Company, which was 8 % of the 3,257,759 shares of common stock issued by the Company, including the shares contributed to the Foundation.
+Added: (the “Foundation”), a charitable foundation formed in connection with the Conversion.
+Added: The Bank’s employee stock ownership plan purchased 260,621 shares of the common stock sold by the Company, which was 8 % of the 3,257,759 shares of common stock issued by the Company, including the shares contributed to the Foundation.
The ESOP purchased the shares using a loan from the Company.
The Company contributed $ 15,276 of the net proceeds from the offering to the Bank, loaned $ 2,606 of the net proceeds to the ESOP, contributed $ 75 to the Foundation and retained approximately $ 12,436 of the net proceeds.
−Removed: Following conversion, voting rights in the Company are held and exercised exclusively by the shareholders of the Company.
+Added: Following the Conversion, voting rights in the Company are held and exercised exclusively by the shareholders of the Company.
Deposit account holders continue to be insured by the FDIC.
−Removed: In connection with the Conversion, liquidation accounts were established by the Company and the Bank in an aggregate amount equal to (i) the MHC’s ownership interest in the stockholders’ equity of Mineola Community Financial Group, Inc.
+Added: In connection with the Conversion, liquidation accounts were established by the Company and the Bank in an aggregate amount equal to (i) the MHC’s ownership interest in the shareholders’ equity of Mineola Community Financial Group, Inc.
(the former subsidiary holding company of the Bank) as of the date of the latest statement of financial condition included in the Company’s definitive prospectus dated May 14, 2021, plus (ii) the value of the net assets of the MHC as of the date of the MHC’s latest statement of financial condition before the consummation of the Conversion (excluding the MHC’s ownership interest in Mineola Community Financial Group, Inc.).
11 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
Interim Financial Statements
−Removed: The interim unaudited consolidated financial statements as of September 30, 2021, and for the three and nine months ended September 30, 2021 and 2020, are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented.
+Added: The interim unaudited consolidated financial statements as of March 31, 2022, and for the three months ended March 31, 2022 and 2021, are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented.
Such adjustments are the only adjustments contained in these unaudited consolidated financial statements.
−Removed: These unaudited consolidated financial statements have been prepared according to the rules and regulations of the Securities and Exchange Commission, and therefore certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been omitted.
−Removed: The results of operations for the three and nine months ended September 30, 2021, are not necessarily indicative of the results to be achieved for the remainder of the year ending December 31, 2021, or any other period.
+Added: These unaudited consolidated financial statements have been prepared according to the rules and regulations of the Securities and Exchange Commission, and therefore certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been omitted.
+Added: The results of operations for the three months ended March 31, 2022, are not necessarily indicative of the results to be achieved for the remainder of the year ending December 31, 2022, or any other period.
Certain prior period data presented in the consolidated financial statements have been reclassified to conform with the current period presentation.
−Removed: The accompanying consolidated financial statements have been derived from and should be read in conjunction with the audited consolidated financial statements and notes thereto of the MHC for the year ended December 31, 2020 included in the Company’s definitive Prospectus dated May 14, 2021.
−Removed: Reference is made to the accounting policies of the Company described in the Notes to Consolidated Financial Statements for the year ended December 31, 2020, contained in the Company’s definitive Prospectus dated May 14, 2021.
+Added: The accompanying consolidated financial statements have been derived from and should be read in conjunction with the audited consolidated financial statements and notes thereto of the Company for the year ended December 31, 2021.
+Added: Reference is made to the accounting policies of the Company described in the Notes to Consolidated Financial Statements contained in Form 10-K for the year ended December 31, 2021.
Principles of Consolidation
9 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
2 unchanged sentences
Diluted earnings per share is computed using the weighted-average number of shares determined for the basic earnings per common share computation plus the dilutive effect of stock compensation using the treasury stock method.
+Added: There were no dilutive shares as of March 31, 2022.
+Added: There were no shares authorized or outstanding at March 31, 2021.
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30, 2021
−Removed: September 30, 2021
−Removed: Weighted-average shares outstanding for
−Removed: basic earnings per share:
+Added: March 31, 2022
+Added: Weighted average shares outstanding for basic earnings per share:
Average shares outstanding
average unearned ESOP shares
−Removed: Weighted-average shares outstanding for
−Removed: basic earnings per share:
+Added: Weighted average shares outstanding for basic earnings per share
Additional dilutive shares
−Removed: Weighted-average shares outstanding for
−Removed: diluted earnings per share:
+Added: Weighted average shares outstanding for dilutive earnings per share
Basic and dilutive earnings per share
2 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
1 unchanged sentence
The amortized cost and fair value of securities, with gross unrealized gains and losses, follows:
−Removed: September 30, 2021
+Added: March 31, 2022
Available for Sale
3 unchanged sentences
State and municipal
−Removed: Total debt securities
+Added: Corporate bonds
Government and agency
9 unchanged sentences
Residential mortgage-backed
+Added: Collateralized mortgage obligations
State and municipal
+Added: Corporate bonds
+Added: Government and agency
Total securities available for sale
4 unchanged sentences
Total securities held to maturity
−Removed: During the nine months ended September 30, 2021 and 2020, the Company had no sales of available for sale securities or held to maturity securities.
−Removed: At September 30, 2021 and December 31, 2020, securities with a carrying value of $ 2,763 and $ 2,680 , respectively, were pledged to secure public deposits and for other purposes required or permitted by law.
+Added: During the three months ended March 31, 2022 and 2021, the Company had no sales of available for sale securities or held to maturity securities.
+Added: At March 31, 2022 and December 31, 2021, securities with a carrying value of $ 2,715 and $ 2,745 , respectively, were pledged to secure public deposits and for other purposes required or permitted by law.
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
−Removed: The amortized cost and fair value of debt securities by contractual maturity at September 30, 2021, follows:
+Added: The amortized cost and fair value of debt securities by contractual maturity at March 31, 2022, follows:
Available for Sale
7 unchanged sentences
The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:
−Removed: September 30, 2021
+Added: March 31, 2022
Less than 12 months
2 unchanged sentences
Residential mortgage-backed ( 57 , 10 )
+Added: Collateralized mortgage obligations ( 5 )
State and municipal ( 19 )
+Added: Corporate bonds ( 8 )
Government and agency ( 15 )
4 unchanged sentences
Residential mortgage-backed ( 20 , 5 )
+Added: Collateralized mortgage obligations ( 5 )
State and municipal ( 9 )
+Added: Corporate bonds ( 2 )
+Added: Government and agency ( 13 )
Mortgage-backed Securities
The unrealized losses on the Company’s investments in residential mortgage-backed securities were caused by market interest rate increases and increases in prepayment speeds.
−Removed: The Company purchased those investments at a discount relative to their face amount, and the contractual cash flows of those investments are guaranteed by agencies of the U.S.
−Removed: Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost bases of the Company’s investments.
−Removed: Because the decline in market value is attributable to changes in market interest rates and increases in prepayment speeds and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at September 30, 2021 or December 31, 2020.
+Added: The Company purchased those investments at a
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
+Added: discount relative to their face amount, and the contractual cash flows of those investments are guaranteed by agencies of the U.S.
+Added: Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost bases of the Company’s investments.
+Added: Because the decline in fair value is attributable to changes in market interest rates and increases in prepayment speeds and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2022 or December 31, 2021.
+Added: Government and Agency
+Added: The unrealized losses on the Company’s investments in U.S.
+Added: government and agency securities were caused by interest rate increases.
+Added: The contractual cash flows of those investments are guaranteed by an agency of the U.S.
+Added: Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost bases of the Company’s investments.
+Added: Because the decline in fair value is attributable to changes in market interest rates and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2022 or December 31, 2021.
+Added: State and Municipal
+Added: The unrealized losses on the Company’s investments in state and municipal securities were caused by interest rate increases.
+Added: Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost bases of the Company’s investments.
+Added: Because the decline in fair value is attributable to changes in market interest rates and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2022 or December 31, 2021.
+Added: Corporate Bonds
+Added: The unrealized losses on the Company’s investments in corporate bond securities were caused by interest rate increases.
+Added: Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost bases of the Company’s investments.
+Added: Because the decline in fair value is attributable to changes in market interest rates and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2022 or December 31, 2021.
Other-Than-Temporary Impairment
1 unchanged sentence
Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) evaluation by the Company of (a) its intent to sell a debt security prior to recovery and (b) whether it is more likely than not the Company will have to sell the debt security prior to recovery.
−Removed: As of September 30, 2021 and December 31, 2020, no investment securities were other-than-temporarily impaired.
+Added: As of March 31, 2022 and December 31, no investment securities were other-than- temporarily impaired.
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Unaudited)
+Added: Three Months Ended March 31, 2022 and 2021
+Added: (Amounts in thousands, except share and per share data)
Note 3 - Loans and Leases
A summary of the balances of loans and leases follows:
−Removed: September 30,
Consumer and other
1 unchanged sentence
Loans and leases, net
−Removed: Paycheck Protection Program (PPP) Loans
+Added: Paycheck Protection Program Loans
In March 2020, the United States government passed legislation designed to help the nation’s economy recover from the coronavirus disease 2019 (“COVID‐19”) pandemic.
3 unchanged sentences
The CARES Act permits the SBA to guarantee 100 percent of these loans and also provides for forgiveness of up to the full principal amount of these loans.
−Removed: As of September 30, 2021, the Company originated $ 5,484 in PPP loans of which $ 5,449 had been forgiven.
−Removed: Additionally, the Company recognized $ 5 and $ 24 of PPP loan interest in interest income during the nine months ended September 30, 2021 and 2020, respectively.
+Added: As of March 31, 2022, the Company originated $ 5,484 in PPP loans of which $ 5,475 had been forgiven.
+Added: Additionally, the Company recognized $ 0 and $ 4 of PPP loan interest in interest income during the three months ended March 31, 2022 and 2021, respectively.
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
−Removed: The following tables set forth information regarding the activity in the allowance for loan and lease losses for the three and nine months ended September 30, 2021 and 2020 and balances as of September 30, 2021 and December 31, 2020:
−Removed: September 30, 2021
+Added: The following tables set forth information regarding the activity in the allowance for loan and lease losses for the three months ended March 31, 2022 and 2021 and the year ended December 31, 2021:
+Added: March 31, 2022
Allowance for loan and lease losses:
−Removed: Three-months ended
−Removed: Beginning balance, July 1, 2021
−Removed: Provision (credit)
−Removed: Ending balance, September 30, 2021
−Removed: Nine-months ended
−Removed: Beginning balance, January 1, 2021
−Removed: Ending balance, September 30, 2021
−Removed: Balance, September 30, 2021 allocated to loans and leases individually evaluated for impairment
−Removed: Balance, September 30, 2021 allocated to loans and leases collectively evaluated for impairment
+Added: Balance, January 1, 2022
+Added: Balance, March 31, 2022
+Added: Balance, March 31, 2022 allocated to loans and leases individually evaluated for impairment
+Added: Balance, March 31, 2022 allocated to loans and leases collectively evaluated for impairment
Loans and leases receivable:
−Removed: Balance, September 30, 2021 loans and leases individually evaluated for impairment
−Removed: Balance, September 30, 2021 loans and leases collectively evaluated for impairment
−Removed: Ending balance, September 30, 2021
+Added: Balance, March 31, 2022 loans and leases individually evaluated for impairment
+Added: Balance, March 31, 2022 loans and leases collectively evaluated for impairment
+Added: Balance, March 31, 2022
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
−Removed: September 30, 2020
+Added: March 31, 2021
Allowance for loan and lease losses:
−Removed: Three-months ended
−Removed: Beginning balance, July 1, 2020
−Removed: Ending balance, September 30, 2020
−Removed: Nine-months ended
−Removed: Beginning balance, January 1, 2020
+Added: Balance, January 1, 2021
Provision (Credit)
−Removed: Ending balance, September 30, 2020
+Added: Balance, March 31, 2021
December 31, 2021
−Removed: Ending balance allocated to loans and leases individually evaluated for impairment
−Removed: Ending balance allocated to loans and leases collectively evaluated for impairment
+Added: Allowance for loan and lease losses:
+Added: Balance, December 31, 2021 allocated to loans and leases individually evaluated for impairment
+Added: Balance, December 31, 2021 allocated to loans and leases collectively evaluated for impairment
Loans and leases receivable:
−Removed: Loans and leases individually evaluated for impairment
−Removed: Loans and leases collectively evaluated for impairment
−Removed: Ending balance
+Added: Balance, December 31, 2021 loans and leases individually evaluated for impairment
+Added: Balance, December 31, 2021 loans and leases collectively evaluated for impairment
+Added: Balance, December 31, 2021
Internal Risk Categories
7 unchanged sentences
The methodology is structured so that specific allocations are increased in accordance with deterioration in credit quality (and a corresponding increase in risk and loss) or decreased in accordance with improvement in credit quality (and a corresponding decrease in risk and loss).
+Added: Credits rated special mention show clear signs of financial weaknesses or deterioration in credit worthiness;
+Added: however, such concerns are not so pronounced that the Company generally expects to experience significant loss within the short-term.
+Added: Such credits typically maintain the ability to perform within standard credit terms and credit exposure is not as prominent as credits rated more harshly.
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
−Removed: Special Mention loans show clear signs of financial weaknesses or deterioration in credit worthiness;
−Removed: however, such concerns are not so pronounced that the Company generally expects to experience significant loss within the short-term.
−Removed: Such credits typically maintain the ability to perform within standard credit terms and credit exposure is not as prominent as credits rated more harshly.
−Removed: Substandard loans are those in which the normal repayment of principal and interest may be, or has been, jeopardized by reason of adverse trends or developments of a financial, managerial, economic or political nature, or important weaknesses exist in collateral.
+Added: Credits rated substandard are those in which the normal repayment of principal and interest may be, or has been, jeopardized by reason of adverse trends or developments of a financial, managerial, economic or political nature, or important weaknesses exist in collateral.
A protracted workout on these credits is a distinct possibility.
1 unchanged sentence
Credit exposure becomes more likely in such credits and a serious evaluation of the secondary support to the credit is performed.
−Removed: Doubtful loans are those in which full collection of principal appears highly questionable, and which some degree of loss is anticipated, even though the ultimate amount of loss may not yet be certain and/or other factors exist which could affect collection of debt.
+Added: Credits rated doubtful are those in which full collection of principal appears highly questionable, and which some degree of loss is anticipated, even though the ultimate amount of loss may not yet be certain and/or other factors exist which could affect collection of debt.
Based upon available information, positive action by the Company is required to avert or minimize loss.
1 unchanged sentence
Credits rated doubtful are generally also placed on nonaccrual.
−Removed: Loss rated loans are those that are considered uncollectible and of such little value that their continuance as bankable assets is not warranted.
+Added: Credits rated loss are those that are considered uncollectible and of such little value that their continuance as bankable assets is not warranted.
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 basically worthless asset even though partial recovery may be affected in the future.
−Removed: Pass rated loans are those not considered criticized.
+Added: Pass rated refer to loans that are not considered criticized.
In addition to this primary credit quality indicator, the Company uses other credit quality indicators for certain types of loans.
−Removed: The following table sets forth information regarding the internal classification of the loan and lease portfolio:
−Removed: September 30, 2021
+Added: The Company evaluates the loan risk grading system definitions and allowance for loan and lease loss methodology on an ongoing basis.
+Added: No significant changes were made during the three months ended March 31, 2022 or during the year ended December 31, 2021.
+Added: The following tables set forth information regarding the internal classification of the loan and lease portfolio:
+Added: March 31, 2022
Construction and land
5 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
5 unchanged sentences
The following table sets forth information regarding the credit risk profile based on payment activity of the loan and lease portfolio:
−Removed: September 30, 2021
+Added: March 31, 2022
December 31, 2021
4 unchanged sentences
The following table sets forth information regarding the delinquencies not on nonaccrual within the loan and lease portfolio:
−Removed: September 30, 2021
+Added: March 31, 2022
> 90 Days and
7 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
6 unchanged sentences
Consumer and other
−Removed: The following table sets forth information regarding the nonaccrual status within the loan and lease portfolio as of September 30, 2021 and December 31, 2020:
−Removed: September 30,
+Added: The following table sets forth information regarding the nonaccrual status within the loan and lease portfolio as of March 31, 2022 and December 31, 2021:
+Added: Construction and land
1‑4 residential & multi-family
8 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: No interest income was recognized for loans on nonaccrual status for the three and nine months ended September 30, 2021 and 2020.
+Added: No interest income was recognized for loans on nonaccrual status for the three months ended March 31, 2022 and 2021.
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
−Removed: The following table presents interest income recognized on impaired loans for the three and nine months ended September 30, 2021 and 2020:
−Removed: Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
+Added: The following table presents interest income recognized on impaired loans for the three months ended March 31, 2022 and 2021:
1-4 residential & multi-family
Commercial real estate
−Removed: Consumer and other
−Removed: The following table sets forth information regarding impaired loans as of September 30, 2021:
+Added: The following table sets forth information regarding impaired loans as of March 31, 2022:
With no related allowance
2 unchanged sentences
With a related allowance
−Removed: Commercial real estate
1-4 residential & multi-family
3 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
9 unchanged sentences
Consumer and other
−Removed: During the nine months ended September 30, 2021, there were two modifications resulting in troubled debt restructurings totaling approximately $ 90 .
−Removed: The first loan is a single-family residence with an outstanding balance of approximately $ 69 as of September 30, 2021 and a second loan in commercial and industrial with an outstanding balance of approximately $ 14 as of September 30, 2021.
−Removed: There were no troubled debt restructurings that occurred during the nine months ended September 30, 2020.
+Added: During the three months ended March 31, 2022, there were no modifications resulting in troubled debt restructurings.
+Added: During the three months ended March 31, 2021, there were two modifications resulting in troubled debt restructurings totaling approximately $ 90 .
+Added: The first loan is a single-family mortgage loan with an outstanding balance of approximately $ 72 as of March 31, 2022 and a second loan is a commercial and industrial loan with an outstanding balance of approximately $ 18 as of March 31, 2022.
There have been no subsequently defaulted troubled debt restructurings.
−Removed: At September 30, 2021 and December 31, 2020, the Company had no commitments to loan additional funds to borrowers whose loans have been modified but may on occasion extend financing to these borrowers.
−Removed: At September 30, 2021 and December 31, 2020, the Company had a recorded investment of $ 502 and $ 433 , respectively, of troubled debt restructured loans.
+Added: At March 31, 2022 and December 31, 2021, the Company had no commitments to loan additional funds to borrowers whose loans have been modified but may on occasion extend financing to these borrowers.
+Added: At March 31, 2022 and December 31, 2021, the Company had a recorded investment of $ 482 and $ 493 , respectively, of troubled debt restructured loans.
The Company has no current commitments to loan additional funds to the borrowers whose loans have been modified.
7 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
1 unchanged sentence
The Company follows the same credit policies in making commitments as it does for on-balance-sheet instruments.
−Removed: At September 30, 2021 and December 31, 2020, the following financial instruments were outstanding whose contract amounts represent credit risk:
+Added: At March 31, 2022 and December 31, 2021, the following financial instruments were outstanding whose contract amounts represent credit risk:
Contract Amount
−Removed: September 30,
Commitments to extend credit
9 unchanged sentences
The lines renew annually.
−Removed: At September 30, 2021, the Company had no commitments to purchase securities.
+Added: At March 31, 2022, the Company had unused borrowing capacity of $ 106.3 million with the Federal Home Loan Bank of Dallas.
+Added: At March 31, 2022, the Company had no commitments to purchase securities.
The Company has no other off-balance-sheet arrangements or transactions with unconsolidated, special purpose entities that would expose the Company to liability that is not reflected on the face of the consolidated statements of financial condition.
1 unchanged sentence
Supplemental disclosure of cash flow information is as follows:
−Removed: Nine Months Ended
−Removed: September 30,
Supplemental cash flow information:
Cash paid for
+Added: Interest on deposits
+Added: Interest on FHLB advances
+Added: Other interest
Note 6 - Minimum Regulatory Capital Requirements
1 unchanged sentence
Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the consolidated financial statements.
−Removed: Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
−Removed: calculated under regulatory accounting practices.
+Added: capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.
The capital amounts and classification are also subject to qualitative judgements by the regulators about components, risk weightings, and other factors.
The Bank has opted into the Community Bank Leverage Ratio (CBLR) framework, beginning with the Call Report filed for the first quarter of 2020.
−Removed: At September 30, 2021 and December 31, 2020, the Bank’s CBLR ratio was 13.07 % and 10.49 %, respectively, which exceeded all regulatory capital requirements under the CBLR framework and the Bank was considered to be “well-capitalized.”
+Added: At March 31, 2022 and December 31, 2021, the Bank’s CBLR ratio was 12.84 % and 12.89 %, respectively, which exceeded all regulatory capital requirements under the CBLR framework and the Bank was considered to be “well-capitalized.”
Under the CLBR framework, banks and their bank holding companies that have less than $10 billion in total consolidated assets and meet other qualifying criteria, including a leverage ratio (equal to tier 1 capital divided by average total consolidated assets) of greater than 9%, are eligible to opt into the CBLR framework.
Qualifying community banking organizations that elect to use the CBLR framework and that maintain a leverage ratio of greater than 9% will be considered to have satisfied the generally applicable risk-based and leverage capital requirements in the agencies’ capital rules (generally applicable capital rules) and, if applicable, will be considered to have met the well-capitalized ratio requirements for purposes of section 38 of the Federal Deposit Insurance Act.
−Removed: Accordingly, a qualifying community banking organization that exceeds the 9% CBLR will be considered to have met:
+Added: Accordingly, beginning January 1, 2022, qualifying community banking organizations that exceed the 9% CBLR will be considered to have met:
(i) the generally applicable risk-based and leverage capital requirements of the generally applicable capital rules;
4 unchanged sentences
(i) beginning second quarter 2020 and until the end of the year, a banking organization that has a leverage ratio of 8% or greater and meets certain other criteria may elect to use the CBLR framework;
−Removed: and (ii) community banking organizations will have until January 1, 2022 before the CBLR requirement is reestablished at greater than 9%.
−Removed: Under the interim rules, the minimum CBLR will be 8% beginning in the second quarter and for the remainder of calendar year 2020, 8.5% for calendar year 2021, and 9% thereafter.
+Added: and (ii) community banking organizations had until January 1, 2022 before the CBLR requirement is reestablished at greater than 9%.
+Added: Under the interim rules, the minimum CBLR was 8% beginning in the second quarter of 2020 and for the remainder of calendar year 2020, 8.5% for calendar year 2021, and 9% thereafter.
The interim rules also maintain a two-quarter grace period for a qualifying community banking organization whose leverage ratio falls no more than 1% below the applicable community bank leverage ratio.
8 unchanged sentences
The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities.
−Removed: The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount on a discounted basis.
−Removed: The cost approach is based on the amount that currently would be required to replace the service
+Added: The income approach uses
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
−Removed: capacity of an asset (replacement costs).
+Added: valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount on a discounted basis.
+Added: The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement costs).
Valuation techniques should be consistently applied.
8 unchanged sentences
A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.
−Removed: There have been no changes in valuation techniques during the periods ended September 30, 2021 and December 31, 2020, respectively.
+Added: There have been no changes in valuation techniques during either the three months ended March 31, 2022 or the year ended December 31, 2021.
In general, fair value is based upon quoted market prices, where available.
8 unchanged sentences
Collateral values are estimated using Level 3 inputs based on internally customized discounting criteria.
−Removed: Foreclosed Assets – Fair values are valued at the time the loan is foreclosed upon and the asset is transferred from loans.
−Removed: The value is based upon primarily third-party appraisals, less estimated costs to sell.
−Removed: The appraisals are
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
−Removed: generally discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the client and the client’s business.
+Added: Foreclosed Assets – Fair values are valued at the time the loan is foreclosed upon and the asset is transferred from loans.
+Added: The value is based upon primarily third-party appraisals, less estimated costs to sell.
+Added: The appraisals are generally discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the client and the client’s business.
Such discounts are typically significant and result in Level 3 classification of the inputs for determining fair value.
Foreclosed assets are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same or similar factors above.
−Removed: The following table summarizes financial assets measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:
−Removed: September 30, 2021
+Added: The following table summarizes financial assets measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:
+Added: March 31, 2022
Financial assets
3 unchanged sentences
State and municipal
+Added: Corporate bonds
Government and agency
4 unchanged sentences
Residential mortgage-backed
+Added: Collateralized mortgage obligations
State and municipal
+Added: Corporate bonds
+Added: Government and agency
Total financial assets
1 unchanged sentence
that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).
−Removed: The following table summarizes financial and non-financial assets measured at fair value on a nonrecurring basis as of September 30, 2021 and December 31, 2020, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:
−Removed: September 30, 2021
−Removed: Financial assets
−Removed: Impaired loans
−Removed: Nonfinancial assets
−Removed: Foreclosed assets
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
+Added: Three Months Ended March 31, 2022 and 2021
(Amounts in thousands, except share and per share data)
+Added: The following table summarizes financial and non-financial assets measured at fair value on a nonrecurring basis as of March 31, 2022 and December 31, 2021, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:
+Added: March 31, 2022
+Added: Financial assets
+Added: Impaired loans
+Added: Nonfinancial assets
+Added: Foreclosed assets
December 31, 2021
3 unchanged sentences
Foreclosed assets
−Removed: During the nine months ended September 30, 2021 and 2020, certain impaired loans were remeasured and reported at fair value through a specific valuation allowance allocation of the allowance for loan and lease losses based upon the fair value of the underlying collateral.
−Removed: At September 30, 2021, impaired loans with a carrying value of $ 1,483 were reduced by specific valuation allowance allocations totaling $ 308 to a reported fair value of $ 1,175 .
+Added: During the three months ended March 31, 2022 and 2021, certain impaired loans were remeasured and reported at fair value through a specific allocation of the allowance for loan and lease losses based upon the fair value of the underlying collateral.
+Added: At March 31, 2022, impaired loans with a carrying value of $ 301 were reduced by specific valuation allowance allocations totaling $ 300 to a reported fair value of $ 1 .
At December 31, 2021, impaired loans with a carrying value of $ 1,582 were reduced by specific valuation allowance allocations totaling $ 308 to a reported fair value of $ 1,274 .
The fair value of impaired loans is determined based on collateral valuations utilizing Level 3 valuation inputs.
−Removed: $ 0 was charged to the provision for loan and lease losses as a result of the valuation allowance for the nine months ended September 30, 2021 and 2020.
+Added: There was no charge to the provision for loan and lease losses as a result of the valuation allowances for the three months ended March 31, 2022 and 2021.
Quantitative Information About Significant Unobservable Inputs Used in Level 3 Fair Value Measurements – The following table represents the Company’s Level 3 financial assets, the valuation techniques used to measure the fair value of those financial assets, the significant unobservable inputs and the ranges of values for those inputs:
2 unchanged sentences
Significant Input
−Removed: September 30, 2021
+Added: March 31, 2022
Impaired loans
−Removed: collateral (1)
+Added: Appraisal of collateral (1)
+Added: Appraisal adjustment
Foreclosed assets
−Removed: collateral (1)
+Added: Appraisal of collateral (1)
+Added: Appraisal adjustment
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Unaudited)
+Added: Three Months Ended March 31, 2022 and 2021
+Added: (Amounts in thousands, except share and per share data)
Fair Value at
3 unchanged sentences
Impaired loans
−Removed: collateral (1)
+Added: Appraisal of collateral (1)
+Added: Appraisal adjustment
Foreclosed assets
−Removed: collateral (1)
+Added: Appraisal of collateral (1)
+Added: Appraisal adjustment
(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable.
−Removed: Texas Community Bancshares, Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
−Removed: (Amounts in thousands, except share and per share data)
The estimated fair values, and related carrying amounts, of the Company’s financial instruments are as follows:
−Removed: September 30, 2021
−Removed: Level 1 Inputs
−Removed: Level 2 Inputs
−Removed: Level 3 Inputs
−Removed: Total Fair Value
−Removed: Total Carrying Value
+Added: March 31, 2022
+Added: Carrying Value
Financial assets
7 unchanged sentences
Financial liabilities
−Removed: Federal Home Loan Bank advances
+Added: FHLB advances
Interest payable
December 31, 2021
−Removed: Level 1 Inputs
−Removed: Level 2 Inputs
−Removed: Level 3 Inputs
−Removed: Total Fair Value
−Removed: Total Carrying Value
+Added: Carrying Value
Financial assets
7 unchanged sentences
Financial liabilities
−Removed: Federal Home Loan Bank advances
+Added: FHLB advances
Interest payable
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Unaudited)
+Added: Three Months Ended March 31, 2022 and 2021
+Added: (Amounts in thousands, except share and per share data)
The following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments:
3 unchanged sentences
Interest receivable – The carrying value approximates its fair value.
−Removed: Texas Community Bancshares, Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
−Removed: (Amounts in thousands, except share and per share data)
−Removed: Mortgage servicing rights – Fair values are estimated using discounted cash flows based on current market rates of interest.
Restricted investments carried at cost – The carrying value of these investments approximates fair value based on the redemption provisions contained in each.
+Added: Mortgage servicing rights – Fair values are estimated using discounted cash flows based on current market rates of interest.
Deposits – The fair values disclosed for demand deposits (for example, interest and noninterest checking, passbook savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts).
1 unchanged sentence
Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies market interest rates on comparable instruments to a schedule of aggregated expected monthly maturities on time deposits.
−Removed: Federal Home Loan Bank advances – Current market rates for debt with similar terms and remaining maturities are used to estimate fair value of existing debt.
+Added: FHLB advances – Current market rates for debt with similar terms and remaining maturities are used to estimate fair value of existing debt.
Interest payable – The carrying value approximates the fair value.
−Removed: Note 8 - Employee Stock Ownership Plan (“ESOP”)
−Removed: In connection with the Conversion, Mineola Community Bank established an Employee Stock Ownership Plan (“ESOP) for the exclusive benefit of eligible employees.
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Unaudited)
+Added: Three Months Ended March 31, 2022 and 2021
+Added: (Amounts in thousands, except share and per share data)
+Added: Note 8 - Employee Stock Ownership Plan
+Added: In connection with the conversion to an entity owned by shareholders, the Company established an Employee Stock Ownership Plan for the exclusive benefit of eligible employees.
The ESOP borrowed funds from the Company in an amount sufficient to purchase 260,621 shares (approximately 8.0 % of the common stock issued in connection with the Conversion).
5 unchanged sentences
Participants will vest in their accrued benefits determined by the years of service for vesting purposes.
−Removed: Vesting is accelerated upon retirement, death or disability of the participant, or a change in control of the Company.
+Added: Vesting is accelerated upon retirement, death or disability of the participant, or a change in control of the Company or the Bank.
Forfeitures will be reallocated to remaining participants.
4 unchanged sentences
Dividends on unallocated ESOP shares, if any, are recorded as a reduction of debt and accrued interest.
−Removed: ESOP compensation was $ 102 for the three and nine months ended September 30, 2021.
+Added: ESOP compensation was $ 51 for the three months ended March 31, 2022.
A summary of the ESOP shares are as follows:
−Removed: September 30, 2021
−Removed: December 31, 2020
Shares allocated to participants
−Removed: Shares released to participants
+Added: Shares committed to be released to participants
Unreleased shares
Fair value of unreleased shares
−Removed: Texas Community Bancshares, Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Nine Months Ended September 30, 2021 and 2020
−Removed: (Amounts in thousands, except share and per share data)
Note 9 - Recently Issued But Not Yet Effective Accounting Pronouncements
2 unchanged sentences
ASU 2016‐ 13 is effective for the Company on January 1, 2023.
−Removed: Management is still evaluating the impact on the Company’s consolidated financial statements.
+Added: The Company has approved a third-party vendor recommended by the Current Expected Credit Losses (“CECL”) team.
+Added: Management will begin working with them to provide, review and update loan data for use in the model during the quarter ending June 30, 2022, as well as re-evaluating the Company’s internal and external factors, including economic and peer data, with the goal of beginning parallel runs using the new CECL model and the current allowance for loan and lease losses model
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Unaudited)
+Added: Three Months Ended March 31, 2022 and 2021
+Added: (Amounts in thousands, except share and per share data)
+Added: simultaneously as soon as all systems are in place.
+Added: Once parallel runs are in place management can evaluate how this methodology change will impact the Company’s consolidated financial statements.
+Added: In March 2020, the FASB issued ASU No.
+Added: 2020-04, Reference Rate Reform (Topic 848) which provides temporary optional expedients to ease the financial reporting burdens of the expected market transition from London Interbank Offered Rate (“LIBOR”) to an alternative reference rate such as Secured Overnight Financing Rate (“SOFR”).
+Added: The guidance was effective upon issuance and generally can be applied through December 31, 2022.
+Added: 2020-04 has not had and is not expected to have a significant impact on the Company’s consolidated financial statements.
+Added: In January 2021, the FASB issued ASU No.
+Added: 2021-01 Reference Rate Reform (Topic 848), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition.
+Added: 2021-01 was effective upon issuance and generally can be applied through December 31, 2022.
+Added: ASU 2021-01 has not had and is not expected to have a significant impact on the Company’s consolidated financial statements.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
−Removed: Management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding Texas Community Bancshares, Inc.’s (“the Company”) consolidated financial condition at September 30, 2021 and consolidated results of operations for the three and nine months ended September 30, 2021 and 2020.
+Added: Management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding Texas Community Bancshares, Inc.’s (“the Company”) consolidated financial condition at March 31, 2022 and consolidated results of operations for the three months ended March 31, 2022 and 2021.
It should be read in conjunction with the unaudited consolidated financial statements and the related notes appearing in Part I, Item 1, of this Quarterly Report on Form 10-Q.
12 unchanged sentences
● general economic conditions, either nationally or in our market areas, that are worse than expected;
−Removed: ● declines in yields on our assets resulting from the current low interest rate environment;
+Added: ● changes in yields on our assets resulting from changes in market interest rates;
● fluctuation in the demand for construction loans in our market area due to increased cost of building materials and their availability;
25 unchanged sentences
Summary of Critical Accounting Policies;
+Added: Critical Accounting Estimates
Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America.
The preparation of these consolidated financial statements requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of income and expenses.
−Removed: We consider the accounting policies discussed below to be significant accounting policies.
+Added: We consider the accounting policies discussed below to be critical accounting policies.
The estimates and assumptions that we use are based on historical experience and various other factors and are believed to be reasonable under the circumstances.
3 unchanged sentences
However, we have determined not to take advantage of the benefits of this extended transition period.
−Removed: The following represent our significant accounting policies:
+Added: The following represent our critical accounting policies:
Allowance for Loan and Lease Losses .
12 unchanged sentences
The total allowance is available to absorb losses from any segment of the loan portfolio.
−Removed: Management believes the allowance for loan and lease losses was adequate at September 30, 2021 and December 31, 2020.
+Added: Management believes the allowance for loan and lease losses was adequate at March 31, 2022 and December 31, 2021.
The allowance analysis is reviewed by the board of directors on a quarterly basis in compliance with regulatory requirements.
5 unchanged sentences
There can be no assurance that future events, such as court decisions or positions of federal and state taxing authorities, will not differ from management’s current assessment, the impact of which could be significant to the results of operations and reported earnings.
−Removed: The Company files consolidated federal income tax returns with Mineola Community Bank.
+Added: The Company files consolidated federal income tax returns with its subsidiaries.
Amounts provided for income tax expense are based on income reported for financial statement purposes and do not necessarily represent amounts currently payable under tax laws.
6 unchanged sentences
Penalties related to unrecognized tax benefits are classified as income tax expense.
−Removed: Comparison of Financial Condition at September 30, 2021 and December 31, 2020
+Added: Comparison of Financial Condition at March 31, 2022 and December 31, 2021
Total Assets.
−Removed: Total assets were $358.9 million at September 30, 2021, an increase of $59.2 million, or 19.8%, when compared to total assets of $299.6 million at December 31, 2020.
−Removed: The increase in total assets is reflective of the net proceeds of $27.8 million from our common stock offering as part of the mutual-to-stock conversion on July 14, 2021.
−Removed: The conversion proceeds and existing cash balances were used to increase our investment portfolio by $24.7 million, or 52.2%, to $72.0 million at September 30, 2021 and our portfolio of net loans by $3.6 million, or 1.7%, to $216.8 million during the nine months ended September 30, 2021.
−Removed: Additionally, our investments in interest bearing deposits in banks increased by $4.6 million and our cash balances increased by $26.5 million during the nine months ended September 30, 2021.
+Added: Total assets were $369.0 million at March 31, 2022, an increase of $4.2 million, or 1.2%, from $364.8 million at December 31, 2021.
+Added: The increase was due primarily to increases in net loans of $4.3 million, or 2.0%, from $220.3 million at December 31, 2021 to $224.6 million at March 31, 2022.
Cash and Cash Equivalents.
−Removed: Cash and cash equivalents increased $26.5 million, or 328.1%, to $34.6 million (which includes fed funds sold of $28.9 million) at September 30, 2021 from $8.1 million (which includes fed funds sold of $2.1 million) at December 31, 2020.
−Removed: This increase is primarily due to an increase in deposits of $29.3 million during the nine months ended September 30, 2021, in addition to the net proceeds from the common stock offering of $27.8 million.
+Added: Cash and cash equivalents increased $3.7 million, or 16.9%, to $25.6 million (which includes fed funds sold of $19.7 million) at March 31, 2022 from $21.9 million (which includes fed funds sold of $16.3 million) at December 31, 2021.
+Added: This increase is primarily due to an increase in deposits of $6.8 million, partially offset by loan funding.
Interest Bearing Deposits in Banks.
−Removed: Interest bearing deposits in banks were $18.6 million at September 30, 2021 compared to $14.0 million at December 31, 2020, an increase of $4.6 million, or 32.5%.
−Removed: The increase was due primarily to an increase in deposits of $29.3 million, or 12.5%, during the nine months ended September 30, 2021 combined with conversion proceeds of $27.8 million.
+Added: Interest bearing deposits in banks were $5.3 million at March 31, 2022 compared to $15.0 million at December 31, 2021, a decrease of $9.7 million, or 64.7%.
+Added: The decrease was due primarily to an increase in securities of $5.1 million and loans of $4.3 million.
Securities Available for Sale.
−Removed: Securities available for sale increased by $23.0 million, or 177.3%, to $36.0 million at September 30, 2021 from $13.0 million at December 31, 2020.
−Removed: This increase is due primarily to securities purchased totaling $26.4 million in the nine months ended September 30, 2021 made with conversion proceeds.
−Removed: These purchases include $13.2 million in US Treasuries ranging in maturity from 3-10 years, $7.2 million in collateralized mortgage obligations (CMO), and $2.9 million in municipal securities.
−Removed: In addition, $3.1 million in mortgage backed securities (MBS) purchases were made in the nine months ended September 30, 2021.
−Removed: These purchases were partially offset by $3.2 million in paydowns on MBS, and a $200,000 municipal security that was called.
+Added: Securities available for sale increased by $7.2 million, or 12.7%, to $64.0 million at March 31, 2022 from $56.8 million at December 31, 2021.
+Added: The increase in securities for the quarter included the investment of $11.5 million in available for sale securities, including purchases of $6.0 million in U.S.
+Added: Government debt securities, $3.3 million in municipals, and $2.2 million in corporate bonds, partially reduced by paydowns of $1.1 million, and unrealized losses on the available for sale portfolio of $3.2 million due primarily to the increase in market interest rates during the period.
Securities Held to Maturity.
−Removed: Securities held to maturity increased by $1.7 million, or 5.0%, to $36.0 million at September 30, 2021 from $34.3 million at December 31, 2020.
−Removed: This increase was due primarily to purchases of $13.8 million in MBS made during the nine months ended September 30, 2021, partially offset by MBS principal repayments of $8.4 million and calls on municipal securities totaling $3.5 million.
+Added: Securities held to maturity decreased by $2.1 million, or 6.2%, to $31.6 million at March 31, 2022 from $33.7 million at December 31, 2021.
+Added: This decrease is due primarily to principal repayments of $1.7 million and one municipal security totaling $365,000 being called.
Loans and Leases Receivable, Net.
−Removed: Net loans and leases increased $3.6 million, or 1.7%, to $216.8 million at September 30, 2021 from $213.3 million at December 31, 2020.
−Removed: During the nine months ended September 30, 2021, loan originations totaled $77.5 million of which $17.6 million were renewals or refinances of existing loans with Mineola Community Bank, resulting in originations of new loans of $59.8 million.
−Removed: During the nine months ended September 30, 2021, one to four family residential real estate loans increased $14.8 million, or 10.3%, to $158.6 million at September 30, 2021 from $143.8 million at December 31, 2020.
−Removed: Commercial Real estate loans decreased $5.6 million, or 19.1%, to $23.8 million at September 30, 2021;
−Removed: farmland loans decreased $284,000, or 5.1%, to $5.3 million at September 30, 2021;
−Removed: construction and development loans (including raw land) decreased $2.1 million, or 20.6%, to $8.0 million at September 30 2021, funded residential construction loans decreased $1.7 million, or 13.6%, to $11.0 million at September 30, 2021;
−Removed: commercial and industrial loans decreased $2.8 million, or 32.0%, to $5.9 million (this includes a reduction in PPP loans of $4.0 million, or 99.1%, to $37,000) at September 30, 2021;
−Removed: municipal loans increased $1.1 million, or 588.4%, to $1.2 million at September 30, 2021;
−Removed: consumer loans increased $372,000, or 9.6%, to $4.2 million at September 30, 2021;
−Removed: and agricultural loans and other consumer loans decreased by $125,000, or 26.8%, to $341,000 at September 30, 2021.
−Removed: During the nine months ended September 30, 2021, there were $57.8 million in loan principal payoffs and $9.1 million in monthly principal payments received for a total reduction in principal of $66.8 million.
−Removed: During the nine months ended September 30, 2021, construction loans in process (not fully funded) decreased $1.7 million, or 7.5% to $21.3 million at September 30, 2021.
−Removed: Construction loans continue to be an important segment of our loan portfolio which is a reflection of the strong housing demand in our primary market area.
−Removed: Deposits increased $29.3 million, or 12.5%, to $264.5 million at September 30, 2021 from $235.1 million at December 31, 2020.
−Removed: Core deposits (defined as all deposits other than certificates of deposit) increased $30.4 million, or 19.1%, to $189.8 million at September 30, 2021 from $159.4 million at December 31, 2020.
−Removed: Certificates of deposit decreased $1.1 million, or 1.5%, to $74.7 million at September 30, 2021 from $75.8 million at December 31, 2020.
−Removed: At September 30, 2021, there were no brokered deposits.
−Removed: The additional growth in deposits in 2021 was significantly impacted by higher customer balances resulting from tax refund deposits and various forms of COVID-19 relief, primarily government stimulus payments.
−Removed: The decrease in certificates of deposit is primarily due to the low interest rate environment combined with our strategy to reduce these higher cost time deposits.
−Removed: Advances from the Federal Home Loan Bank.
−Removed: Advances from the Federal Home Loan Bank of Dallas decreased by $2.7 million or 8.7%, to $28.1 million at September 30, 2021 from $30.8 million at December 31, 2020 due to scheduled monthly payments of principal on amortizing advances and the payoff of an advance that matured.
−Removed: Shareholders’ Equity.
−Removed: Total shareholders’ equity increased by $28.6 million, or 89.6%, to $60.6 million at September 30, 2021 from $31.9 million at December 31, 2020.
−Removed: The increase was primarily the result of the mutual to stock conversion on July 14, 2021.
−Removed: Gross proceeds from the sale of common stock of $30.4 million was reduced by $2.6 million with the establishment of the Mineola Community Bank leveraged ESOP, for a net addition to equity of $27.8 million.
−Removed: Retained earnings was increased by consolidated income for the nine months ended September 30, 2021 of $232,000.
−Removed: At September 30, 2021, Mineola Community Bank opted to use the community bank leverage ratio framework (Tier 1 capital to average assets) for regulatory capital purposes, as permitted by the CARES Act.
−Removed: At September 30, 2021, a community bank leverage ratio of at least 8.5% is required to be considered “well capitalized” under regulatory requirements.
−Removed: At September 30, 2021, Mineola Community Bank was well capitalized and had a ratio of 13.07%.
−Removed: The following table sets forth average balance sheets, average yields and costs, and certain other information at and for the periods indicated.
−Removed: No tax-equivalent yield adjustments have been made, as the effects would be immaterial.
−Removed: All average balances are daily average balances.
−Removed: Non-accrual loans are included in the computation of average balances.
−Removed: Average yields for loans (excluding PPP loans) include loan fees of $134,000 and $189,000 for the three months ended September 30, 2021 and 2020, respectively.
−Removed: No PPP loans were originated during the three months ended September 30, 2021 or the three months ended September 30, 2020.
−Removed: We have not recorded deferred loan fees, as we have determined them to be immaterial.
−Removed: For the Three Months Ended September 30,
−Removed: (Dollars in thousands)
−Removed: Interest-earning assets:
−Removed: Loans (excluding PPP loans)
−Removed: Allowance for loan and lease losses
−Removed: Restricted stock
−Removed: Interest bearing deposits in banks
−Removed: Federal funds sold
−Removed: Total interest-earning assets
−Removed: Noninterest-earning assets
−Removed: Interest-bearing liabilities:
−Removed: Interest-bearing demand deposits
−Removed: Regular savings and other deposits
−Removed: Money market deposits
−Removed: Certificates of deposit
−Removed: Total interest-bearing deposits
−Removed: Advances from the Federal Home Loan Bank
−Removed: Other liabilities
−Removed: Total interest-bearing liabilities
−Removed: Noninterest-bearing demand deposits
−Removed: Other noninterest-bearing liabilities
−Removed: Total liabilities
−Removed: Total members’ equity
−Removed: Total liabilities and members’ equity
−Removed: Net interest income
−Removed: Net interest rate spread (1)
−Removed: Net interest-earning assets (2)
−Removed: Net interest margin (3)
−Removed: Average interest-earning assets to interest-bearing liabilities
−Removed: (1) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
−Removed: (2) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
−Removed: (3) Net interest margin represents net interest income divided by average total interest-earning assets.
−Removed: Comparison of the Operating Results for the Three Months Ended September 30, 2021 and September 30, 2020
−Removed: Net Income (Loss).
−Removed: We had a net loss of $198,000 for the three months ended September 30, 2021, compared to net income of $208,000 for the three months ended September 30, 2020, a decrease of $406,000, or 195.2%.
−Removed: The decrease in net income was primarily due to a $575,000 charitable contribution to initially fund TCBS Foundation, Inc.
−Removed: as part of the conversion transaction.
−Removed: This was partially offset by a $13,000 increase in net interest income, a $40,000 increase in noninterest income and a $52,000 decrease in provision for loan and lease losses when comparing the three months ended September 30, 2021 to the three months ended September 30, 2020.
−Removed: Interest Income.
−Removed: Interest income decreased $80,000, or 3.0%, to $2.6 million for the three months ended September 30, 2021 from $2.7 million for the three months ended September 30, 2020.
−Removed: This was primarily the result of a decreased yield on interest earning assets of 83 basis points, or 21%, from 3.97% for the three months ended September 30, 2020 to 3.14% for the three months ended September 30, 2021.
−Removed: The increase in average interest earnings assets of $61.7 million, or 22.7%, from $271.3 million at September 30, 2020 to $333.0 million at September 30, 2021 could not offset the decrease in overall average yield with the current investment mix.
−Removed: Interest income on loans remained flat at $2.4 million for the three months ended September 30, 2021and 2020, although the average loan volume increased $21.7 million, or 11%, to $219.8 million at September 30, 2021 from $198.1 million at September 30, 2020.
−Removed: The average yield on loans decreased 54 basis points, or 11%, from 4.89% for the three months ended September 30, 2020 to 4.35% for the three months ended September 30, 2021.
−Removed: Interest income on securities declined $24,000, or 11.1%, from $217,000 for the three months ended September 30, 2020 to $193,000 for the three months ended September 30, 2021.
−Removed: This decline resulted from a decrease of 30 basis points, or 17.6%, in yield from 1.70% for the three months ended September 30, 2020 to 1.40% for the three months ended September 30, 2021, partially offset by an increase in average securities of $4.1 million, or 8.0%, from $51.1 million for the three months ended September 30, 2020 to $55.2 million for the three months ended September 30, 2021.
−Removed: The rate decrease is reflective of the overall decline in average yields on securities.
−Removed: Despite lower yields in the current interest rate environment, we plan to continue to purchase securities with funds currently being held in cash and investments in banks as a part of our overall investment strategy.
−Removed: Interest income from interest bearing deposits in banks declined $23,000, or 69.7%, from $33,000 for the three months ended September 30, 2020 to $11,000 for the three months ended September 30, 2021.
−Removed: This decline resulted from a decrease of 74 basis points, or 75.8%, in yield from .97% for the three months ended September 30, 2020 to 0.24% for the three months ended September 30, 2021, partially offset with a $3.4 million, or 25.1%, increase in deposits in banks from $13.6 million for the three months ended September 30, 2020 to $17.0 million for the three months ended September 30, 2021.
−Removed: There was an increase of 7 basis points, or 122.7%, in yield on fed funds from 0.05% for the three months ended September 30, 2020 to 0.12% for the three months ended September 30, 2021, combined with a $38.1 million, or 1,696.0%, increase in fed funds from $2.2 million for the three months ended September 30, 2020 to $40.4 million for the three months ended September 30, 2021.
−Removed: The large increase in fed funds is primarily a result of the mutual to stock conversion.
−Removed: The decline in average yields is primarily due to the overall decrease in market interest rates.
−Removed: Interest Expense.
−Removed: Total interest expense decreased $93,000, or 15.3%, to $516,000 for the three months ended September 30, 2021 from $609,000 for the three months ended September 30, 2020 due to a decrease in the average cost of interest-bearing liabilities of 28 basis points, or 25.8%, from 1.09% for the three months ended September 30, 2020 to 0.81% for the three months ended September 30, 2021, primarily due to a decrease in deposit costs.
−Removed: Interest expense on deposit accounts decreased $78,000, or 17.7%, to $362,000 for three months ended September 30, 2021 from $440,000 for the three months ended September 30, 2020, due to a decrease in the average deposit cost of 28 basis points, or 30.9%, from .92% for the three months ended September 30, 2020 to 0.64% for the three months ended September 30, 2021, primarily the result of an overall decrease in market interest rates.
−Removed: This was partially offset by an increase of $36.5 million, or 19.1%, in the deposit account balances from $191.2 million for the three months ended September 30, 2020 to $227.7 million for the three months ended September 30, 2021, with the increase being in lower-cost interest bearing transaction accounts.
−Removed: Interest expense on Federal Home Loan Bank advances decreased $15,000, or 9.0%, to $151,000 for the three months ended September 30, 2021 from $166,000 for the three months ended September 30, 2020.
−Removed: This decrease was due primarily to a decrease in advances of $4.6 million, or 14.1%, to $28.3 million for the three months ended September 30, 2021 from $32.9 million for the three months ended September 30, 2020 combined with an increase in the average rate of 12 basis points, or 5.9%, from 2.02% for the three months ended September 30, 2020 to 2.14% for the three months ended September 30, 2021.
−Removed: Net Interest Income.
−Removed: Net interest income remained basically flat at $2.1 million for the three months ended September 30, 2021 and 2020.
−Removed: This is primarily due to a decrease in interest income of $80,000, or 3.0%, on interest
−Removed: earning assets for the three months ended September 30, 2021 resulting primarily from a 83 basis point, or 21.0%, decrease in addition to a decrease in interest expense on interest bearing liabilities of $93,000, or 15.3%, primarily due to a 28 basis point, or 25.8%, decrease in yield.
−Removed: Net interest margin decreased 55 basis points, or 18.0%, to 2.52% for the three months ended September 30, 2021 from 3.07% for the three months ended September 30, 2020.
−Removed: The net interest rate spread decreased 55 basis points, or 19.1%, from 2.89% for the three months ended September 30, 2020 to 2.33% for the three months ended September 30, 2021.
−Removed: The net interest rate spread and net interest margin were impacted by falling market interest rates over the comparison periods.
−Removed: Provision for Loan and Lease Losses.
−Removed: Based on management’s analysis of the adequacy of allowance for loan and lease losses, the provision for loan and lease losses was $14,000 for the three months ended September 30, 2021, compared to $66,000 for the three months ended September 30, 2020, a decrease of $52,000, or 78.8%, due in part to a higher provision in the three months ended September 30, 2020 related to increased risk and uncertainty associated with the Covid-19 pandemic.
−Removed: Noninterest Income.
−Removed: Noninterest income increased $40,000, or 9.7%, to $452,000 for the three months ended September 30, 2021 from $412,000 for the three months ended September 30, 2020, due partially to an increase in ATM fees of $28,000, or 14.3%, to $224,000 for the three months ended September 30, 2021 and an increase in service charges on deposit accounts of $16,000, or 11.2%, to $159,000 for the three months ended September 30, 2021.
−Removed: ATM fees increased primarily due to customer usage that grew in general during the pandemic and increased numbers of preloaded cards being used to distribute funds, and from checking account growth.
−Removed: That growth also contributed to the increase in service charges on deposit accounts.
−Removed: Service charge income was historically low in 2020 due to fees being waived and above average balances in customer accounts.
−Removed: Noninterest Expense.
−Removed: Noninterest expense increased $585,000, or 26.8%, to $2.8 million for the three months ended September 30, 2021 from $2.2 million for the three months ended September 30, 2020 primarily due to a contribution expense of $575,000 in the three months ended September 30, 2021 to fund the TCBS Foundation that was created as part of the mutual to stock conversion.
−Removed: Salary and employee benefit expenses remained unchanged at $1.3 million for the three months ended September 30, 2021 from $1.3 million for the three months ended September 30, 2020.
−Removed: However, we had an initial ESOP expense of $102,000 for the first half of 2021 expensed in the three months ended September 30, 2021, which was offset by a discretionary bonus that was paid in the three months ended September 30, 2020 of $125,000.
−Removed: Directors’ compensation also increased $12,000, or 19.0%, to $75,000 for the three months ended September 30, 2021 from $63,000 for the three months ended September 30, 2020 due to an increase in monthly director fees.
−Removed: Core processing expenses decreased by $38,000, or 16.2%, to $196,000 for the three months ended September 30, 2021 from $234,000 for the three months ended September 30, 2020 primarily due to a renegotiated contract with our core processor..
−Removed: Other expenses increased $608,000, or 221.9%, to $882,000 for the three months ended September 30, 2021 from $274,000 for the three months ended September 30, 2020, due primarily to the $575,000 foundation contribution expense, in addition to increased fees associated with being a public company and increased fees associated with a larger asset size.
−Removed: Income Tax Expense.
−Removed: Income tax expense decreased by $74,000, or 194.7%, to a benefit of $36,000 for the three months ended September 30, 2021 from a $38,000 expense for the three months ended September 30, 2020.
−Removed: The effective tax rate was 15.38% and 15.45% for the three months ended September 30, 2021 and 2020, respectively.
−Removed: The following table sets forth average balance sheets, average yields and costs, and certain other information at and for the periods indicated.
+Added: Loans and leases receivable, net, increased $4.3 million, or 2.0%, to $224.6 million at March 31, 2022 from $220.3 million at December 31, 2021.
+Added: Loans secured by residential real estate and farmland comprise $161.7, or 71.5% of the net loans at March 31, 2022.
+Added: During the three months ended March 31, 2022, loan originations totaled $31.0 million of which $3.9 million were renewals or refinancings of existing loans with Mineola Community Bank, resulting in originations of new loans of $27.1 million.
+Added: Originations consisted primarily of $11.4 million in one- to-four family residential mortgage loans, $11.8 million of residential construction loans (upon completion), including speculative construction loans of $4.9 million, $4.2 million in commercial real estate loans, $964,000 in consumer loans, $1.6 million in commercial and industrial loans, $676,000 in land & development loans,
+Added: and $406,000 in farmland loans.
+Added: During the three months ended March 31, 2022, there were $3.4 million in loan principal paydowns and $16.4 million in loan payoffs.
+Added: PPP loans have paid down to 3 loans totaling $9,000 at March 31, 2022.
+Added: During the three months ended March 31, 2022, construction loans in process increased by $6.1 million to $29.4 million at March 31, 2022 from $23.3 million at December 31, 2021.
+Added: Construction loans continue to be a large segment of our portfolio which is a reflection of the strong housing demand in our primary market area.
+Added: Deposits increased $6.8 million, or 2.5%, to $281.7 million at March 31, 2022 from $274.9 million at December 31, 2021.
+Added: Core deposits (defined as all deposits other than certificates of deposit) increased $8.5 million, or 4.2%, to $210.9 million at March 31, 2022 from $202.4 million at December 31, 2021.
+Added: Certificates of deposit decreased $1.9 million, or 2.6%, to $70.7 million at March 31, 2022 from $72.6 million at December 31, 2021.
+Added: At March 31, 2022, there were no brokered deposits.
+Added: Advances from Federal Home Loan Bank.
+Added: Advances from Federal Home Loan Bank decreased by $518,000 or 1.9%, to $27.1 million at March 31, 2022 from $27.6 million at December 31, 2021 due to scheduled monthly payments of principal on amortizing advances.
+Added: Total Shareholders’ Equity.
+Added: Total shareholders’ equity decreased $2.0 million, or 3.3%, to $58.1 million at March 31, 2022 from $60.1 million at December 31, 2021.
+Added: This decrease was primarily due to a $2.5 million, or 364.1%, change in accumulated other comprehensive loss representing decreases in the fair value of available for sale securities resulting primarily from rising market interest rates.
+Added: At March 31, 2022, this unrealized loss was $3.2 million, compared to $686,000 at December 31, 2021, partially offset by net income of $391,000 for the three months ended March 31, 2022.
+Added: An additional $51,000 was added to shareholders’ equity with the commitment to release 3,258 additional ESOP shares to participants.
+Added: At March 31, 2022, Mineola Community Bank opted to use the community bank leverage ratio framework (Tier 1 capital to average assets) for regulatory capital purposes, as permitted by the CARES Act.
+Added: At March 31, 2022, a community bank leverage ratio of at least 9.0% is required to be considered “well capitalized” under regulatory requirements.
+Added: At March 31, 2022, Mineola Community Bank was well capitalized and had a ratio of 12.84%
+Added: Average Balance Sheets
+Added: The following table sets forth average consolidated statements of financial condition, average yields and costs, and certain other information at and for the periods indicated.
No tax-equivalent yield adjustments have been made, as the effects would be immaterial.
1 unchanged sentence
Non-accrual loans are included in the computation of average balances.
−Removed: Average yields for loans (excluding PPP loans) include loan fees of $429,000 and $412,000 for the nine months ended September 30, 2021 and 2020, respectively.
−Removed: No PPP loans were originated during the nine months ended September 30, 2021 and $5.5 million in PPP loans were originated in the nine months ended September 30, 2020.
+Added: Average yields for loans (excluding PPP loans) include loan fees of $112,000 and $134,000 for the three months ended March 31, 2022 and 2021, respectively.
+Added: No PPP loans were originated during the three months ended March 31, 2022 or 2021.
We have not recorded deferred loan fees, as we have determined them to be immaterial.
−Removed: For the Nine Months Ended September 30,
+Added: For the Three Months Ended March 31,
(Dollars in thousands)
13 unchanged sentences
Total interest-bearing deposits
−Removed: Advances from the Federal Home Loan Bank
+Added: Advances from FHLB
Other liabilities
3 unchanged sentences
Total liabilities
−Removed: Total members’ equity
−Removed: Total liabilities and members’ equity
+Added: Total shareholders’ and members' equity
+Added: Total liabilities and shareholders' and members’ equity
Net interest income
6 unchanged sentences
(3) Net interest margin represents net interest income divided by average total interest-earning assets.
−Removed: Comparison of the Operating Results for the Nine Months Ended September 30, 2021 and September 30, 2020
−Removed: Net income was $232,000 for the nine months ended September 30, 2021, compared to net income of $781,000 for the nine months ended September 30, 2020, a decrease of $549,000, or 70.3%.
−Removed: The decrease in net income was primarily due to a $575,000 charitable contribution to the TCBS Foundation, Inc.
−Removed: related to our mutual to stock conversion.
+Added: Comparison of the Operating Results for the Three Months Ended March 31, 2022 and March 31, 2021
+Added: Net income was $391,000 for the three months ended March 31, 2022, compared to net income of $242,000 for the three months ended March 31, 2021, an increase of $149,000, or 61.6%.
+Added: The increase was primarily due to a $270,000 increase in net interest income and a $70,000 increase in noninterest income, partially offset by a $115,000 increase in noninterest expense, a $38,000 increase in the provision for loan and lease losses and an increase in income tax expense of $38,000.
Interest Income.
−Removed: Interest income decreased $83,000, or 1.0%, to $7.8 million for the nine months ended September 30, 2021 from $7.9 million for the nine months ended September 30, 2020.
−Removed: This decrease was the result of decreased interest income on securities, cash and cash equivalents and deposits in banks, but was offset by an increase in loan interest income due to increased loan volume.
−Removed: Interest income on loans was $7.2 million for the nine months ended September 30, 2021, compared to $6.9 million for the nine months ended September 30, 2020, an increase of $246,000 or 3.5%, net of interest income on PPP loans of $6,000 and $24,000, respectively.
−Removed: This increase was primarily due to an increase of $26.4 million, or 13.9%, in the loan portfolio to $214.5 million for the nine months ended September 30, 2021 from $189.1 million for the nine months ended September 30, 2020.
−Removed: This was partially offset by a decrease of 45 basis points, or 9.1%, in the yield on loans from 4.90% for the nine months ended September 30, 2020 to 4.45% for the nine months ended September 30, 2021.
−Removed: Interest income on securities declined $142,000, or 20.2%, from $702,000 for the nine months ended September 30, 2020 to $560,000 for the nine months ended September 30, 2021.
−Removed: This decline resulted from a decrease of 47 basis points, or 24.1%, in yield from 1.93% for the nine months ended September 30, 2020 to 1.47% for the nine months ended September 30 2021, partially offset by an increase in average securities of $2.5 million, or 5.2%, from $48.4 million for the nine months ended September 30, 2020 to $50.9 million for the nine months ended September 30, 2021.
−Removed: The rate decrease is reflective of the overall rate decline on securities.
−Removed: Despite lower yields in the current interest rate environment, we intend to continue to purchase securities with funds currently being held in cash and investments in banks as a part of our overall investment strategy.
−Removed: Interest income from interest bearing deposits in banks declined $166,000, or 78.7%, from $211,000 for the nine months ended September 30, 2020 to $45,000 for the nine months ended September 30, 2021.
−Removed: This decline resulted from a decrease of 133 basis points, or 81.1%, in yield from 1.63% for the nine months ended September 30, 2020 to 0.31% for the nine months ended September 30, 2021, which was partially offset by a $2.2 million, or 12.8%, increase in deposits in banks from $17.2 million for the nine months ended September 30, 2020 to $19.4 million for the nine months ended September 30, 2021.
−Removed: There was also a decrease of 25 basis points, or 70.7%, in average yield on fed funds from 0.35% for the nine months ended September 30, 2020 to 0.10% for the nine months ended September 30, 2021, which was partially offset by a $20.4 million, or 1,061.3%, increase in average fed funds from $1.9 million for the nine months ended September 30, 2020 to $22.3 million for the nine months ended September 30, 2021.
−Removed: Total interest earning assets increased by $48.9 million, or 18.8%, from $260.4 million at September 30, 2020 to $309.3 million at September 30, 2021, which was offset by a decrease in the yield on interest earning assets of 67 basis points, or 16.4%, from 4.05% for the nine months ended September 30, 2020 to 3.38% for the nine months ended September 30, 2021.
+Added: Interest income increased at $164,000, or 6.3%, for the three months ended March 31, 2022.
+Added: This was primarily the result of increased interest income on securities and fed funds due primarily to the investment of proceeds from the Conversion, but was offset by a decrease in loan interest income of $23,000 due to decreased loan yield.
+Added: Interest income on loans was $2.4 million for the three months ended March 31, 2022 and 2021.
+Added: Loan interest income remained flat with an $11.8 million, or 5.6%, increase in average loans from $212.1 million at March 31, 2021 to $223.9 million at March 31, 2022 being offset by a 28 basis point, or 6.2%, decrease in loan yield to 4.24% for the three months ended March 31, 2022 from 4.52% for the three months ended March 31, 2021.
+Added: Interest income on securities increased $195,000, or 109.6%, from $178,000 for the three months ended March 31, 2021 to $373,000 for the three months ended March 31, 2022.
+Added: This increase resulted from an increase of 10 basis points, or 6.8%, in yield from 1.48% for the three months ended March 31, 2021 to 1.58% for the three months ended March 31, 2022 and an increase in average securities of $46.4 million, or 97.1 %, from $47.8 million for the three months ended March 31, 2021 to $94.2 million for the three months ended March 31, 2022.
+Added: The rate increase is reflective of the beginning of market rate increases and the diversification of our securities portfolio as we continue to invest Conversion proceeds into higher yielding investments.
+Added: Interest income from interest bearing deposits in banks declined $14,000, or 70.0%, from $20,000 for the three months ended March 31, 2021 to $6,000 for the three months ended March 31, 2022.
+Added: This decline resulted from a decrease of nine basis points, or 24.9%, in average yield from 0.37% for the three months ended March 31, 2021 to 0.28% for the three months ended March 31, 2022, combined with a $13.0 million, or 60%, decrease in average deposits in banks from $21.6 million for the three months ended March 31, 2021 to $8.6 million for the three months ended March 31, 2022.
+Added: There was also an increase of $9,000 in fed funds interest for the three months ended March 31, 2022 primarily from an increase of seven basis points, or 57.5%, in average yield on fed funds from 0.12% for the three months ended March 31, 2021 to 0.19% for the three months ended March 31, 2022, and a $15.3 million, or 463.6%, increase in average fed funds from $3.3 million for the three months ended March 31, 2021 to $18.6 million for the three months ended March 31, 2022.
+Added: This increase is reflective of the increase in the fed funds market rate.
+Added: Average interest earning assets increased by $59.2 million, or 20.7%, from $286.6 million at March 31, 2021 to $345.8 million at March 31, 2022, which was offset by a decrease in the yield on interest earning assets of 43 basis points, or 11.9%, from 3.63% on March 31, 2021 to 3.20% on March 31, 2022.
Interest Expense.
−Removed: Total interest expense decreased $285,000, or 14.9%, to $1.6 million for the nine months ended September 30, 2021 from $1.9 million for the nine months ended September 30, 2020 due to a decrease in the average cost of interest-bearing liabilities of 31 basis points, or 26.8%, from 1.17% for the nine months ended September 30, 2020 to 0.86% for the nine months ended September 30, 2021, primarily due to a decrease in market interest rates.
−Removed: Interest expense on deposit accounts decreased $225,000, or 16.3%, to $1.2 million for nine months ended September 30, 2021 from $1.4 million for the nine months ended September 30, 2020, due to a decrease in the average deposit cost of 31 basis points, or 30.9%, from 1.00% for the nine months ended September 30, 2020 to 0.69% for the nine months ended September 30, 2021, primarily the result of an overall decrease in market interest rates.
−Removed: This was partially offset by an increase of $38.7 million, or 21.0%, in the average deposit account balances from $183.8 million for the nine months ended September 30, 2020 to $222.6 million for the nine months ended September 30, 2021.
−Removed: Interest expense on Federal Home Loan Bank advances decreased $59,000, or 11.2%, to $468,000 for the nine months ended September 30, 2021 from $527,000 for the nine months ended September 30, 2020.
−Removed: This decrease was due primarily to the decrease in the average balance of Federal Home Loan Bank advances of $3.5 million, or 10.6%, to $29.5 million for the nine months ended September 30, 2021 from $33.0 million for the nine months ended September 30, 2020.
+Added: Total interest expense decreased $106,000, or 18.8%, to $458,000 for the three months ended March 31, 2022 from $564,000 for the three months ended March 31, 2021 due to a decrease in the average cost of interest-bearing liabilities of 24 basis points, or 25.6 %, from 0.93% for the three months ended March 31, 2021 to 0.69% for the three months ended March 31, 2022, primarily due to a decrease in deposit costs.
+Added: Interest expense on deposit accounts decreased $90,000, or 22.4%, to $311,000 for three months ended March 31, 2022 from $401,000 for the three months ended March 31, 2021, due to a decrease in the average deposit cost of 23 basis points, or 30.7%, from 0.76% for the three months ended March 31, 2021 to 0.53% for the three months ended March 31, 2022, primarily the result of an overall decrease in market interest rates.
+Added: This was partially offset by an increase of $25.3 million, or 12.0%, in the average deposit account balances from $211.1 million for the three months ended March 31, 2021 to $236.4 million for the three months ended March 31, 2022, with the increase being in lower cost interest-bearing transaction accounts.
+Added: Interest expense on Federal Home Loan Bank advances decreased $16,000, or 10.0%, to $144,000 for the three months ended March 31, 2022 from $160,000 for the three months ended March 31, 2021.
+Added: This decrease was due
+Added: primarily to the decrease in the average balance of Federal Home Loan Bank advances of $3.2 million, or 10.4%, to $27.2 million for the three months ended March 31, 2022 from $30.4 million for the three months ended March 31, 2021.
+Added: The average rate was flat at 2.11% for the three months ended March 31, 2022 and 2.10% for the three months ended March 31, 2021.
Net Interest Income.
−Removed: Net interest income increased $202,000, or 3.4%, to $6.2 million for the nine months ended September 30, 2021 from $6.0 million for the nine months ended September 30, 2020 due primarily to the increase in net interest-earning assets of $13.6 million, or 31.5%, from $43.2 million for the nine months ended September 30, 2020 to $56.9 million for the nine months ended September 30, 2021, which offset a 36 basis point, or 12.6%, decrease in the net interest rate spread from 2.88% for the nine months ended September 30, 2020 to 2.52% for the nine months ended September 30, 2021.
−Removed: Net interest margin decreased 39 basis points, or 12.6%, to 2.68% for the nine months ended September 30, 2021 from 3.07% for the nine months ended September 30, 2020.
+Added: Net interest income increased $270,000, or 13.2%, to $2.3 million for the three months ended March 31, 2022 from $2.0 million for the three months ended March 31, 2021 primarily due to a decrease in the average cost of funds of 24 basis points, or 25.6%, from 0.93% for the three months ended March 31, 2021 to 0.69% for the three months ended March 31, 2022 combined with an increase in the average balance of net interest-earning assets from $44.7 million for the three months ended March 31, 2021 to $81.7 million for the three months ended March 31, 2022, which offset a 19 basis point, or 7.2%, decrease in the net interest rate spread from 2.70% for the three months ended March 31, 2021 to 2.51% for the three months ended March 31, 2022.
+Added: Net interest margin decreased 18 basis points, or 6.2%, to 2.67% for the three months ended March 31, 2022 from 2.85% for the three months ended March 31, 2021.
Provision for Loan and Lease Losses.
−Removed: Based on management’s analysis of the adequacy of the allowance for loan and lease losses, the provision for loan and lease losses was $44,000 for the nine months ended September 30, 2021, compared to $211,000 for the nine months ended September 30, 2020, a decrease of $167,000, or 79.1% resulting from increased provisions in the nine months ended September 30, 2020 due to heightened uncertainty and risk associated with the COVID-19 pandemic and increased reserves for impaired loans.
−Removed: Our total allowance was $1.6 million, or 0.73% of our loan balance of $218.4 million at September 30, 2021 compared to an allowance of $1.3 million, or 0.63% of our total loan balance of $207.4 million at September 30, 2020.
+Added: Based on management’s analysis of the adequacy of the allowance for loan and lease losses, the provision for loan and lease losses was $40,000 for the three months ended March 31, 2022, compared to $2,000 for the three months ended March 31, 2021, an increase of $38,000, primarily due to an increase in loan volume.
Noninterest Income.
−Removed: Noninterest income decreased $102,000, or 7.5%, to $1.3 million for the nine months ended September 30, 2021 from $1.4 million for the nine months ended September 30, 2020, due primarily to a 100% decrease in PPP SBA fee income of $212,000, partially offset by an increase in ATM fees of $141,000, or 27.1%.
−Removed: There was also a $4,000, or 1.0% decrease in service charges on checking accounts, primarily related to decreased overdraft fees.
−Removed: The decrease in fees was a direct result of above average balances in customer accounts throughout 2021.
+Added: Noninterest income decreased $70,000, or 18.3%, to $453,000 for the three months ended March 31, 2022 from $383,000 for the three months ended March 31, 2021, due primarily to an increase of $68,000, or 19.3%, in service charges and fees from $353,000 for the three months ended March 31, 2021 to $421,000 for the three months ended March 31, 2022.
+Added: The increase is partially due to an increase in the number of deposit accounts combined with increased ATM use.
Noninterest Expense.
−Removed: Noninterest expense increased $923,000, or 14.8%, to $7.1 million for the nine months ended September 30, 2021 from $6.2 million for the nine months ended September 30, 2020 primarily due to increases in contribution expenses of $575,000 in the nine months ended September 30, 2021 to fund the TCBS Foundation as part of the mutual to stock conversion on July 14, 2021.
−Removed: Additionally, employee benefit expenses increased by $115,000, or 3.1%, to $3.8 million for the nine months ended September 30, 2021 due primarily to a $102,000 ESOP benefit expense representing one half of the ESOP funding expense for 2021.
−Removed: The Mineola Community Bank ESOP plan is an employee benefit added as part of the conversion as well.
−Removed: Director compensation also increased $184,000, or 25.5%, to $231,000 for the nine months ended September 30, 2021 from $121,000 for the nine months ended September 30, 2020 due to an increase in monthly director fees.
−Removed: Data processing expense increased by $9,000, or 1.4%, to $644,000 for the nine months ended September 30, 2021 primarily due to additional products, an increase in the number of loan and deposit accounts, and increased usage of online services, partially offset by a reduction in monthly expenses after our contract with FPS Gold was renegotiated and extended in the nine months ended September 30, 2021.
−Removed: Contract services increased $55,000, or 15.2% to $416,000 for the nine months ended September 30, 2021 partially due to a professional expense of $50,000 associated with hiring.
+Added: Noninterest expense increased $115,000, or 5.4%, to $2.2 million for the three months ended March 31, 2022 from $2.1 million for the three months ended March 31, 2021 primarily due to increases in salaries and employee benefits, director fees and other expenses partially offset by decreases in contract services and data processing.
+Added: Salary and employee benefit expenses increased by $132,000, or 10.7%, to $1.4 million for the three months ended March 31, 2022 from $1.2 million for the three months ended March 31, 2021, due to normal salary increases and an increase in health insurance cost, as well as the additional $51,000 expense for the quarter for the ESOP plan that was not in existence in 2021.
+Added: Directors’ fees also increased $21,000, or 28.0%, to $96,000 for the three months ended March 31, 2022 from $75,000 for the three months ended March 31, 2021 due to the addition of four new directors and two new advisory directors.
+Added: These increases were partially offset by decreases in data processing, contract services and other expenses.
+Added: These expenses were higher in the three months ended March 31, 2021 due partially to additional expenses related to the Conversion.
Income Tax Expense.
−Removed: Income tax expense decreased by $107,000, or 69.5%, to $47,000 for the nine months ended September 30, 2021 from $154,000 for the nine months ended September 30, 2020.
−Removed: This decrease was due primarily to the loss and related tax benefit related to the TCBS Foundation contribution expense in the nine months ended September 30, 2021.
−Removed: The effective tax rate was 16.85% and 16.47% for the nine months ended September 30, 2021 and 2020, respectively.
+Added: Income tax expense increased by $38,000, or 76.0%, to $88,000 for the three months ended March 31, 2022 from $50,000 for the three months ended March 31, 2021, primarily due to higher income before taxes.
+Added: The effective tax rate was 18.4% and 17.1% for the three months ended March 31, 2022 and 2021, respectively.
Liquidity and Capital Resources
Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business.
+Added: Federal Reserve Bank of Boston provides the Company with a federal funds line of credit.
Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures.
1 unchanged sentence
We are also able to borrow from the Federal Home Loan Bank of Dallas.
−Removed: At September 30, 2021, we had outstanding advances of $28.1 million from the Federal Home Loan Bank of Dallas.
−Removed: At September 30, 2021, we had unused borrowing capacity of $101.7 million with the Federal Home Loan Bank of Dallas.
−Removed: In addition, at September 30, 2021, we had a $10.0 million line of credit with Texas Independent Bankers Bank and a $5.0 million line of credit with First Horizon Bank.
−Removed: At September 30, 2021, there was no outstanding balance under either of these facilities.
+Added: At March 31, 2022, we had outstanding advances of $27.1 million from the Federal Home Loan Bank of Dallas.
+Added: At March 31, 2022, we had unused borrowing capacity of $106.3 million with the Federal Home Loan Bank of Dallas.
+Added: at March 31, 2022, we had a $10.0 million line of credit with Texas Independent Bankers Bank and a $5.0 million line of credit with First Horizon Bank.
+Added: At March 31, 2022, there was no outstanding balance under either of these facilities.
While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition.
3 unchanged sentences
cash flows from operating activities, investing activities, and financing activities.
−Removed: For additional information, see the consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020 included as part of the consolidated financial statements included in this report.
+Added: For additional information, see the consolidated statements of cash flows for the three months ended March 31, 2022 and 2021 included as part of the consolidated financial statements included in this report.
We are committed to maintaining a strong liquidity position.
7 unchanged sentences
is governed by applicable banking laws and regulations.
−Removed: At September 30, 2021, Texas Community Bancshares, Inc.
+Added: At March 31, 2022, Texas Community Bancshares, Inc.
(on a stand-alone, unconsolidated basis) had liquid assets of $13.4 million.
−Removed: At September 30, 2021, Mineola Community Bank exceeded all of its regulatory capital requirements, and was categorized as well-capitalized at that date.
+Added: At March 31, 2022, Mineola Community Bank exceeded all of its regulatory capital requirements, and was categorized as well-capitalized at that date.
Management is not aware of any conditions or events since the most recent notification of well-capitalized status that would change our category.
3 unchanged sentences
Our Risk Management and Interest Rate Risk Management Officer is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the policy and guidelines approved by our board of directors.
−Removed: We currently utilize a third-party modeling program, prepared on a quarterly basis, to evaluate our sensitivity to changing interest rates, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the board of directors.
+Added: We currently utilize a third-party modeling program, prepared on a monthly basis, to evaluate our sensitivity to changing interest rates, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the board of directors.
We have sought to manage our interest rate risk in order to minimize the exposure of our earnings and capital to changes in interest rates.
16 unchanged sentences
An increase in interest rates from 3% to 4% would mean, for example, a 100 basis point increase in the “Change in Interest Rates” column below.
−Removed: The tables below set forth the calculation of the estimated changes in our net interest income that would result from the designated immediate changes in the United States Treasury yield curve.
−Removed: At September 30, 2021
+Added: The tables below set forth the calculation of the estimated changes in our monthly net interest income that would result from the designated immediate changes in the United States Treasury yield curve.
+Added: At March 31, 2022
Change in Interest Rates
4 unchanged sentences
(1) Assumes an immediate uniform change in interest rates at all maturities.
−Removed: The table above indicates that at September 30, 2021, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a 6.08% increase in net interest income, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 0.27% decrease in net interest income.
+Added: The table above indicates that at March 31, 2022, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a 4.72% decrease in net interest income, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 1.39% increase in net interest income.
Net Economic Value .
3 unchanged sentences
The table below sets forth the calculation of the estimated changes in our EVE that would result from the designated immediate changes in the United States Treasury yield curve.
−Removed: At September 30, 2021
+Added: At March 31, 2022
EVE as a Percentage of
11 unchanged sentences
(4) EVE Ratio represents EVE divided by the present value of assets.
−Removed: The table above indicates that at September 30, 2021, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a 3.30% decrease in EVE, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 1.43% increase in EVE.
+Added: The table above indicates that at March 31, 2022, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a 6.04% decrease in EVE, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 0.09% increase in EVE.
Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements.
7 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.