3 unchanged sentences
Consolidated Statements of Financial Condition
−Removed: June 30, 2022 and December 31, 2021
+Added: September 30, 2022 and December 31, 2021
(Amounts in thousands, except share and per share data)
+Added: September 30,
Cash and due from banks
3 unchanged sentences
Securities available for sale
−Removed: Securities held to maturity (fair values of $ 27,224 at June 30, 2022 and $ 33,673 at December 31, 2021)
−Removed: Loans receivable, net of allowance for loan and lease losses of $ 1,639 at June 30, 2022 and $ 1,592 at December 31, 2021
+Added: Securities held to maturity (fair values of $ 25,597 at September 30, 2022 and $ 33,673 at December 31, 2021)
+Added: Loans receivable, net of allowance for loan and lease losses of $ 1,686 at September 30, 2022 and $ 1,592 at December 31, 2021
Net investment in direct financing leases
Accrued interest receivable
−Removed: Premises and equipment, net
+Added: Premises and equipment
Bank-owned life insurance
2 unchanged sentences
Core deposit intangible
−Removed: Mortgage servicing rights, net
+Added: Mortgage servicing rights
Deferred income taxes
18 unchanged sentences
Consolidated Statements of Operations (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
Interest Income
14 unchanged sentences
Other service charges and fees
−Removed: Net loss on securities transactions
+Added: Net gain (loss) on securities transactions
+Added: Net gain (loss) on sale of other real estate owned
Net appreciation on bank-owned life insurance
8 unchanged sentences
Total noninterest expenses
−Removed: Income Before Income Taxes
−Removed: Income Tax Expense
−Removed: Earnings per share - basic
−Removed: Earnings per share - diluted
+Added: Income (Loss) Before Income Taxes
+Added: Income Tax Expense (Benefit)
+Added: Net Income (Loss)
+Added: Earnings (loss) per share - basic
+Added: Earnings (loss) per share - diluted
Weighted-average shares outstanding - basic
4 unchanged sentences
Consolidated Statements of Comprehensive (Loss) Income (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
Three Months Ended
−Removed: Six Months Ended
−Removed: Other items of comprehensive loss, before tax
−Removed: Net changes in fair value of available for sale securities
−Removed: Reclassification adjustment for realized loss on sale of investment securities included in net income
−Removed: Total other items of comprehensive loss, before tax
−Removed: Income tax benefit related to other items of comprehensive loss
−Removed: Total other items of comprehensive loss, after tax
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
+Added: Net Income (Loss)
+Added: Other items of comprehensive (loss) income
+Added: Net changes in fair value of available for sale securities, before tax
+Added: Reclassification adjustment for realized loss on sale of investment securities included in net income (loss)
+Added: Total other items of comprehensive (loss) income, before tax
+Added: Income tax benefit (expense) related to other items of comprehensive (loss) income
+Added: Total other items of comprehensive (loss) income, after tax
Comprehensive (Loss) Income
2 unchanged sentences
and Subsidiaries
−Removed: Consolidated Statements of Shareholders’ and Members’ Equity (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Consolidated Statements of Shareholders’ Equity (Unaudited)
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
−Removed: Shareholders'
Comprehensive
−Removed: Three Months Ended June 30, 2022 and 2021
+Added: Shareholders'
+Added: Three Months Ended September 30, 2022 and 2021
(Loss) Income
−Removed: Balance at April 1, 2022
+Added: Balance at July 1, 2022
+Added: Stock based compensation expense
Net changes in fair value of available for sale securities, net of tax benefit of $ 328
ESOP shares committed to be released, 3,258 shares
−Removed: Balance at June 30, 2022
−Removed: Balance at April 1, 2021
−Removed: Change in additional paid in capital
−Removed: Net changes in fair value of available for sale securities, net of tax benefit of $ 3
−Removed: Balance at June 30, 2021
−Removed: Shareholders'
+Added: Balance at September 30, 2022
+Added: Balance at July 1, 2021
+Added: Stock Issuance, net of conversion costs of $ 936
+Added: Net changes in fair value of available for sale securities, net of tax expense of $ 11
+Added: Leveraged ESOP Shares, 2,606,210 shares
+Added: ESOP shares committed to be released, 6,515 shares
+Added: Balance at September 30, 2021
Comprehensive
−Removed: Six Months Ended June 30, 2022 and 2021
+Added: Shareholders'
+Added: Nine Months Ended September 30, 2022 and 2021
(Loss) Income
Balance at January 1, 2022
+Added: Stock based compensation expense
Net changes in fair value of available for sale securities, net of tax benefit of $ 1,604
ESOP shares committed to be released, 9,774 shares
−Removed: Balance at June 30, 2022
+Added: Balance at September 30, 2022
Balance at January 1, 2021
−Removed: Change in additional paid in capital
+Added: Stock issuance, net of conversion costs of $ 1,684
Net changes in fair value of available for sale securities, net of tax expense of $ 2
−Removed: Balance at June 30, 2021
+Added: Leveraged ESOP shares, 2,606,210 shares
+Added: ESOP shares earned, 6,515 shares
+Added: Balance at September 30, 2021
See Notes to Consolidated Financial Statements
2 unchanged sentences
Consolidated Statements of Cash Flows (Unaudited)
−Removed: Six Months Ended June 30, 2022 and 2021
+Added: Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
Operating Activities
3 unchanged sentences
Depreciation and amortization
−Removed: Net realized loss on investment securities transactions
+Added: Net realized loss on sale of investment securities
Loss on sale of fixed assets
+Added: Stock based compensation
+Added: Gain on sale of other real estate owned
Appreciation on bank-owned life insurance
15 unchanged sentences
Net decrease (increase) in net investment in direct financing leases
+Added: Proceeds from sales of OREO and foreclosed assets
Purchases of premises and equipment
2 unchanged sentences
Net increase in deposits
+Added: Advances from FHLB and other borrowings
Payments on long-term FHLB and other borrowings
−Removed: Conversion costs related to the conversion
+Added: Proceeds from issuance of common stock net of conversion costs
+Added: Loan to ESOP for purchase of common stock
Net Cash from Financing Activities
6 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
27 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
Interim Financial Statements
−Removed: The interim unaudited consolidated financial statements as of June 30, 2022, and for the three and six months ended June 30, 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.
+Added: The interim unaudited consolidated financial statements as of September 30, 2022, and for the three and nine months ended September 30, 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.
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.
−Removed: The results of operations for the six months ended June 30, 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.
−Removed: Certain prior period data presented in the consolidated financial statements have been reclassified to conform with the current period presentation.
+Added: The results of operations for the nine months ended September 30, 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.
+Added: Certain prior period data presented in the consolidated financial statements has been reclassified to conform with the current period presentation.
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.
11 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
+Added: Stock Incentive Plan
+Added: Compensation cost is recognized for stock options and restricted stock awards issued to directors, based on the fair value of these awards at the date of the grant.
+Added: A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of the grant is used for restricted stock awards.
+Added: Compensation cost is recognized over the required service period, generally defined as the vesting period.
+Added: For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.
Earnings Per Share
−Removed: Basic earnings per share is computed by dividing net income by the weighted–average number of common shares outstanding during the period, including allocated and committed-to-be-released ESOP shares, during the applicable period.
+Added: Basic earnings per share is computed by dividing net income (loss) by the weighted–average number of common shares outstanding during the period, including allocated and committed-to-be-released ESOP shares and restricted stock awards granted on August 31, 2022, during the applicable period.
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.
−Removed: There were no dilutive shares as of June 30, 2022.
−Removed: There were no shares issued or outstanding at June 30, 2021.
+Added: There were no dilutive shares as of September 30, 2022.
+Added: The following table presents a reconciliation of the number of shares used in the calculation of basic and diluted earnings per common share:
Three Months Ended
−Removed: Six Months Ended
−Removed: June 30, 2022
−Removed: June 30, 2022
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
+Added: Net Income (Loss)
Weighted average shares outstanding for basic earnings per share:
4 unchanged sentences
Weighted average shares outstanding for dilutive earnings per share
−Removed: Basic and dilutive earnings per share
+Added: Basic and dilutive earnings (loss) per share
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 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: June 30, 2022
+Added: September 30, 2022
Available for Sale
25 unchanged sentences
Total securities held to maturity
−Removed: During the six months ended June 30, 2022, the Company had sales of available for sale securities of $ 10,822 with a loss of $ 29 .
−Removed: During the three and six months ended June 30, 2021, the Bank had no sales of available for sale securities or held to maturity securities.
−Removed: At June 30, 2022 and December 31, 2021, securities with a carrying value of $ 2,599 and $ 2,745 , respectively, were pledged to secure public deposits and for other purposes required or permitted by law.
+Added: During the three months ended September 30, 2022, there were no sales of securities.
+Added: During the nine months ended September 30, 2022, the Company had sales of available for sale securities of $ 10,822 with a loss of $ 29 .
+Added: During the three and nine months ended September 30, 2021, the Company had no sales of available for sale securities or held to maturity securities.
+Added: At September 30, 2022 and December 31, 2021, securities with a carrying value of $ 3,182 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 Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 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 June 30, 2022, follows:
+Added: The amortized cost and fair value of debt securities by contractual maturity at September 30, 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: June 30, 2022
+Added: September 30, 2022
Less than 12 months
15 unchanged sentences
Government and agency (13)
−Removed: Mortgage-backed Securities
−Removed: 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
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
−Removed: discount relative to their face amount, and the contractual cash flows of those investments are guaranteed by agencies of the U.S.
+Added: Mortgage-backed Securities
+Added: The unrealized losses on the Company’s investments in residential mortgage-backed securities and collateralized mortgage obligations were caused by market interest rate increases and decreases in prepayment speeds.
+Added: Interest rates have risen sharply throughout 2022 and caused increases in unrealized losses on securities.
+Added: The Company has no plans to sell these securities and will continue to monitor the unrealized losses’ effect on the financial statements.
+Added: The contractual cash flows of many of these investments are guaranteed by agencies of the U.S.
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 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 June 30, 2022 or December 31, 2021.
+Added: Because the decline in fair value is attributable to changes in market interest rates and decreases 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, 2022 or December 31, 2021.
Government and Agency
1 unchanged sentence
government and agency securities were caused by market interest rate increases.
+Added: Interest rates have risen sharply throughout 2022 and caused increases in unrealized losses on securities.
+Added: The Company has no plans to sell these securities and will continue to monitor the unrealized losses’ effect on the financial statements.
The contractual cash flows of those investments are guaranteed by an agency of the U.S.
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 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 June 30, 2022 or December 31, 2021.
−Removed: State and Municipal
−Removed: The unrealized losses on the Company’s investments in state and municipal securities were caused by market interest rate increases.
−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 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 June 30, 2022 or December 31, 2021.
−Removed: Corporate Bonds
−Removed: The unrealized losses on the Company’s investments in corporate bond securities were caused by market interest rate increases.
+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 September 30, 2022 or December 31, 2021.
+Added: Municipal Securities and Corporate Bonds
+Added: The unrealized losses on the Company’s investments in state and municipal securities and corporate bonds were caused by market interest rate increases.
+Added: Interest rates have risen sharply throughout 2022 and caused increases in unrealized losses on securities.
+Added: The Company has no plans to sell these securities and will continue to monitor the unrealized losses’ effect on the financial statements.
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 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 June 30, 2022 or December 31, 2021.
+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 September 30, 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 June 30, 2022 and December 31, no investment securities were other-than- temporarily impaired.
+Added: As of September 30, 2022 and December 31, 2021, no investment securities were other-than- temporarily impaired.
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
1 unchanged sentence
A summary of the balances of loans and leases follows:
+Added: September 30,
Consumer and other
7 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 June 30, 2022, the Company originated $ 5,484 in PPP loans of which $ 5,477 had been forgiven.
−Removed: Additionally, the Company recognized $ 0 and $ 5 of PPP loan interest in interest income during the six months ended June 30, 2022 and 2021, respectively, and $ 0 and $ 1 for the three months ended June 30, 2022 and 2021, respectively.
+Added: As of September 30, 2022, the Company originated $ 5,484 in PPP loans of which $ 5,479 had been forgiven.
+Added: Additionally, the Company recognized $ 0 and $ 5 of PPP loan interest in interest income during the nine months ended September 30, 2022 and 2021, respectively, and $ 0 and $ 1 for the three months ended September 30, 2022 and 2021, respectively.
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 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 six months ended June 30, 2022 and 2021 and the year ended December 31, 2021:
−Removed: June 30, 2022
+Added: 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, 2022 and 2021 and the year ended December 31, 2021:
+Added: September 30, 2022
Allowance for loan and lease losses:
Three-months ended
−Removed: Balance, April 1, 2022
−Removed: Balance, June 30, 2022
−Removed: Six-months ended
+Added: Beginning balance, July 1, 2022
+Added: Provision (credit)
+Added: Ending balance, September 30, 2022
+Added: Nine-months ended
Balance, January 1, 2022
−Removed: Balance, June 30, 2022
−Removed: Balance, June 30, 2022 allocated to loans and leases individually evaluated for impairment
−Removed: Balance, June 30, 2022 allocated to loans and leases collectively evaluated for impairment
+Added: Balance, September 30, 2022
+Added: Balance, September 30, 2022 allocated to loans and leases individually evaluated for impairment
+Added: Balance, September 30, 2022 allocated to loans and leases collectively evaluated for impairment
Loans and leases receivable:
−Removed: Balance, June 30, 2022 loans and leases individually evaluated for impairment
−Removed: Balance, June 30, 2022 loans and leases collectively evaluated for impairment
−Removed: Balance, June 30, 2022
+Added: Balance, September 30, 2022 loans and leases individually evaluated for impairment
+Added: Balance, September 30, 2022 loans and leases collectively evaluated for impairment
+Added: Balance, September 30, 2022
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
−Removed: June 30, 2021
+Added: September 30, 2021
Allowance for loan and lease losses:
Three-months ended
−Removed: Balance, April 1, 2021
−Removed: Balance, June 30, 2021
−Removed: Six-months ended
+Added: Beginning balance, July 1, 2021
+Added: Provision (credit)
+Added: Ending balance, September 30, 2021
+Added: Nine-months ended
Balance, January 1, 2021
Provision (credit)
−Removed: Balance, June 30, 2021
+Added: Balance, September 30, 2021
December 31, 2021
17 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
16 unchanged sentences
The Company evaluates the loan risk grading system definitions and allowance for loan and lease loss methodology on an ongoing basis.
−Removed: No significant changes were made during the six months ended June 30, 2022 or during the year ended December 31, 2021.
+Added: No significant changes were made during the nine months ended September 30, 2022 or during the year ended December 31, 2021.
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
The following tables set forth information regarding the internal classification of the loan and lease portfolio:
−Removed: June 30, 2022
+Added: September 30, 2022
Construction and land
8 unchanged sentences
The following table sets forth information regarding the credit risk profile based on payment activity of the loan and lease portfolio:
−Removed: June 30, 2022
+Added: September 30, 2022
December 31, 2021
6 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
The following tables set forth information regarding the delinquencies not on nonaccrual within the loan and lease portfolio:
−Removed: June 30, 2022
+Added: September 30, 2022
> 90 Days and
11 unchanged sentences
Consumer and other
−Removed: The following table sets forth information regarding the nonaccrual status within the loan and lease portfolio as of June 30, 2022 and December 31, 2021:
+Added: The following table sets forth information regarding the nonaccrual status within the loan and lease portfolio as of September 30, 2022 and December 31, 2021:
+Added: September 30,
Construction and land
5 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
6 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 six months ended June 30, 2022 and 2021.
−Removed: The following table presents interest income recognized on impaired loans for the three and six months ended June 30, 2022 and 2021:
+Added: No interest income was recognized for loans on nonaccrual status for the three and nine months ended September 30, 2022 and 2021.
+Added: The following table presents interest income recognized on impaired loans for the three and nine months ended September 30, 2022 and 2021:
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
1-4 residential & multi-family
4 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
−Removed: The following table sets forth information regarding impaired loans as of June 30, 2022:
+Added: The following table sets forth information regarding impaired loans as of September 30, 2022:
With no related allowance
7 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
9 unchanged sentences
Consumer and other
−Removed: During the six months ended June 30, 2022, there were no modifications resulting in troubled debt restructurings.
−Removed: During the six months ended June 30, 2022, there were no subsequently defaulted troubled debt restructurings.
−Removed: At June 30, 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.
−Removed: At June 30, 2022 and December 31, 2021, the Company had a recorded investment of $ 386 and $ 493 , respectively, of troubled debt restructured loans.
+Added: During the nine months ended September 30, 2022, there were no modifications resulting in troubled debt restructurings.
+Added: During the nine months ended September 30, 2022, there were no subsequently defaulted troubled debt restructurings.
+Added: At September 30, 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 September 30, 2022 and December 31, 2021, the Company had a recorded investment of $ 375 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.
8 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
−Removed: At June 30, 2022 and December 31, 2021, the following financial instruments were outstanding whose contract amounts represent credit risk:
+Added: At September 30, 2022 and December 31, 2021, the following financial instruments were outstanding whose contract amounts represent credit risk:
Contract Amount
+Added: September 30,
Commitments to extend credit
9 unchanged sentences
The lines renew annually.
−Removed: At June 30, 2022, the Company had unused borrowing capacity of $ 107,800 with the Federal Home Loan Bank of Dallas.
−Removed: At June 30, 2022, the Company had no commitments to purchase securities.
+Added: At September 30, 2022, the Company had unused borrowing capacity of $ 100,500 with the Federal Home Loan Bank of Dallas.
+Added: At September 30, 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: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
Supplemental cash flow information:
+Added: Loan originations to facilitate the sale of foreclosed assets
Cash paid for
4 unchanged sentences
The Bank is subject to various regulatory capital requirements administered by the federal banking agencies.
−Removed: 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
+Added: Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
−Removed: calculated under regulatory accounting practices.
+Added: by regulators that, if undertaken, could have a direct material effect on the consolidated financial statements.
+Added: 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 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 June 30, 2022 and December 31, 2021, the Bank’s CBLR ratio was 12.76 % and 12.89 %, respectively, which exceeded all regulatory capital requirements under the CBLR framework and the Bank was considered to be “well-capitalized.”
+Added: At September 30, 2022 and December 31, 2021, the Bank’s CBLR ratio was 13.00 % 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.
18 unchanged sentences
Authoritative guidance requires the use of valuation techniques that are consistent with the market approach, the income approach and/or the cost approach.
−Removed: 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 market approach uses prices and other relevant information
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
−Removed: capacity of an asset (replacement costs).
+Added: generated by market transactions involving identical or comparable assets and liabilities.
+Added: 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.
+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 measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.
−Removed: There were no changes in valuation techniques during either the six months ended June 30, 2022 or the year ended December 31, 2021.
+Added: There were no changes in valuation techniques during either the nine months ended September 30, 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 Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 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 June 30, 2022 and December 31, 2021, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:
−Removed: June 30, 2022
+Added: The following table summarizes financial assets measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:
+Added: September 30, 2022
Financial assets
20 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
−Removed: The following table summarizes financial and non-financial assets measured at fair value on a nonrecurring basis as of June 30, 2022 and December 31, 2021, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:
−Removed: June 30, 2022
+Added: The following table summarizes financial and non-financial assets measured at fair value on a nonrecurring basis as of September 30, 2022 and December 31, 2021, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:
+Added: September 30, 2022
Financial assets
Impaired loans
−Removed: Nonfinancial assets
−Removed: Foreclosed assets
December 31, 2021
3 unchanged sentences
Foreclosed assets
−Removed: During the six months ended June 30, 2022 and the year ended December 31, 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.
−Removed: At June 30, 2022, impaired loans with a carrying value of $ 426 were reduced by specific valuation allowance allocations totaling $ 300 to a reported fair value of $ 126 .
+Added: During the nine months ended September 30, 2022 and the year ended December 31, 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 September 30, 2022, impaired loans with a carrying value of $ 413 were reduced by specific valuation allowance allocations totaling $ 300 to a reported fair value of $ 113 .
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: There was no charge to the provision for loan and lease losses as a result of the valuation allowances for the three and six months ended June 30, 2022 and 2021.
+Added: There was no charge to the provision for loan and lease losses as a result of the valuation allowances for the three and nine months ended September 30, 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: June 30, 2022
+Added: September 30, 2022
Impaired loans
1 unchanged sentence
Appraisal adjustment
−Removed: Foreclosed assets
−Removed: Appraisal of collateral (1)
−Removed: Appraisal adjustment
Texas Community Bancshares, Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
11 unchanged sentences
The estimated fair values, and related carrying amounts, of the Company’s financial instruments are as follows:
−Removed: June 30, 2022
+Added: September 30, 2022
Carrying Value
26 unchanged sentences
Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
+Added: Three and Nine Months Ended September 30, 2022 and 2021
(Amounts in thousands, except share and per share data)
11 unchanged sentences
Interest payable – The carrying value approximates the fair value.
−Removed: Texas Community Bancshares, Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
−Removed: (Amounts in thousands, except share and per share data)
Note 8 - Employee Stock Ownership Plan
12 unchanged sentences
Contributions to the ESOP shall be sufficient to pay principal and interest currently due under the loan agreement.
−Removed: As shares are committed to be released from collateral, the Company reports the compensation expense equal to the average market price of the shares for the respective period, and the shares become outstanding for earnings per share computations.
+Added: As shares are committed to be released from collateral, the Company reports the compensation expense equal to the average market price of the shares for the respective period,
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Unaudited)
+Added: Three and Nine Months Ended September 30, 2022 and 2021
+Added: (Amounts in thousands, except share and per share data)
+Added: and the shares become outstanding for earnings per share computations.
Dividends on unallocated ESOP shares, if any, are recorded as a reduction of debt and accrued interest.
−Removed: ESOP compensation was $ 60 and $ 111 for the three months and six months ended June 30, 2022, respectively.
+Added: ESOP compensation was $ 53 and $ 164 for the three and nine months ended September 30, 2022, respectively, and $ 102 for the three and nine months ended September 30, 2021.
A summary of the ESOP shares are as follows:
+Added: September 30,
Shares allocated to participants
2 unchanged sentences
Fair value of unreleased shares
+Added: Note 9 - Stock-Based Compensation
+Added: The Company has one equity incentive plan with two share based compensation awards as described below.
+Added: Total compensation cost that has been charged against income for those plans was $ 21 for the three and nine months ended September 30, 2022.
+Added: Stock Option Awards
+Added: The Company’s 2022 Equity Incentive Plan (the Equity Plan), which is shareholder approved, permits the grant of stock options to its directors for up to 325,775 shares of common stock.
+Added: Stock option awards are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant;
+Added: those option awards have vesting periods of five years and have 10 -year contractual terms.
+Added: The Company has a policy of using shares held as treasury stock to satisfy share option exercises.
+Added: Currently, the Company does not have treasury shares and will issue new shares to satisfy expected stock option exercises.
+Added: The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions determined by management.
+Added: Expected volatility is based on historical volatility of the Company’s common stock.
+Added: The Company uses historical data when available to estimate option exercise and post-vesting termination behavior.
+Added: Due to lack of historical data, the Company estimated the expected term of options granted is 7.5 years.
+Added: This represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable.
+Added: The Company’s accounting policy is to recognize forfeitures as they occur.
+Added: The risk-free interest rate for the expected term of the options is based on the 7 -year U.S.
+Added: Treasury yield curve in effect at the time of the grants.
+Added: On August 31, 2022, the non-employee directors of the Company were granted 97,728 stock options with a cost of $ 6.50 per option and an exercise price of $ 16.00 .
+Added: These options will vest annually over a five year period ending August 31, 2027 and will expire on August 31, 2032.
+Added: Compensation expense for the stock options for the three and nine months ended September 30, 2022 was $ 11 .
+Added: The fair value of options granted was determined using the following weighted-average assumptions as of grant date.
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Unaudited)
+Added: Three and Nine Months Ended September 30, 2022 and 2021
+Added: (Amounts in thousands, except share and per share data)
+Added: Expected volatility
+Added: Expected dividends
+Added: Expected term (in years)
+Added: Risk-free rate
+Added: A summary of the activity in the stock option awards for 2022 follows:
+Added: Weighted-Average
+Added: Weighted-Average
+Added: Exercise Price
+Added: Contractual Term
+Added: Outstanding at December 31, 2021
+Added: Forfeited or expired
+Added: Outstanding at September 30, 2022
+Added: Exercisable at September 30, 2022
+Added: Weighted-Average
+Added: Non-Vested Options
+Added: Non-vested at December 31, 2021
+Added: Non-vested at September 30, 2022
+Added: As of September 30, 2022, there was $ 624,645 of total unrecognized compensation cost related to non-vested stock options granted under the plan.
+Added: The cost is expected to be recognized over a weighted-average period of five years.
+Added: Restricted Stock Awards
+Added: The Equity Plan also permits the grant of restricted stock to its directors.
+Added: Compensation expense for restricted stock awards is recognized over the vesting period of the awards based on the fair value of the stock at issue date.
+Added: The fair value of the stock was determined using the closing stock price of the Company on grant date.
+Added: Restricted shares fully vest on the fifth anniversary of the grant date.
+Added: On August 31, 2022, the non-employee directors of the Company were granted 39,084 shares of Company stock at a fair market value of $ 16.00 per share.
+Added: These stock awards will vest in five equal annual installments through August 31, 2027.
+Added: Compensation expense for the stock awards for the three months and nine months ended September 30, 2022 was $ 10 .
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Unaudited)
+Added: Three and Nine Months Ended September 30, 2022 and 2021
+Added: (Amounts in thousands, except share and per share data)
+Added: A summary of changes in the Company’s non-vested shares for the period follows:
+Added: Weighted-Average
+Added: Non-Vested Shares
+Added: Non-vested at December 31, 2021
+Added: Non-vested at September 30, 2022
+Added: As of September 30, 2022, there was $ 614,922 of total unrecognized compensation cost related to non-vested restricted stock granted under the plan.
+Added: The cost is expected to be recognized over a weighted-average period of five years.
Note 10 - Recently Issued But Not Yet Effective Accounting Pronouncements
3 unchanged sentences
The Company has contracted with a third-party vendor recommended by the Current Expected Credit Losses (“CECL”) team.
−Removed: Management is working to upload needed loan data used in the CECL model for the quarter ending June 30, 2022, as well as re-evaluating the Company’s internal and external factors, including economic and peer data for use in the second quarter calculation.
−Removed: A parallel run using the new CECL model and the current allowance for loan and lease losses model will be run for the June 30, 2022 data.
−Removed: At this time however, the CECL model data inputs are still in process.
−Removed: Texas Community Bancshares, Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Unaudited)
−Removed: Three and Six Months Ended June 30, 2022 and 2021
−Removed: (Amounts in thousands, except share and per share data)
+Added: Management is analyzing loan data used in the CECL model and corresponding results for the quarter ended September 30, 2022, and re-evaluating the Company’s internal and external factors, including economic and peer data for use in the third quarter calculation.
+Added: A parallel run using the new CECL model and the current allowance for loan and lease losses model will be run for the September 30, 2022 data.
+Added: At this time, the CECL process and data is still being updated.
In March 2020, the FASB issued ASU No.
7 unchanged sentences
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 June 30, 2022 and consolidated results of operations for the three and six months ended June 30, 2022 and 2021.
+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 September 30, 2022 and consolidated results of operations for the three and nine months ended September 30, 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.
19 unchanged sentences
● our ability to control cost and expenses, particularly those associated with operating a publicly traded company;
+Added: ● our ability to control costs and manage liquidity through a period of high inflation and rapidly rising interest rates
● our ability to access cost-effective funding;
17 unchanged sentences
Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.
−Removed: Except as required by applicable law or regulation, we do not undertake, and we specifically disclaim any obligation, to release publicly the results of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.
+Added: Except as required by applicable law or regulation, we do not undertake, and we specifically disclaim any obligation, to release publicly the results of any revisions that may be made to any
+Added: forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.
Summary of Critical Accounting Policies;
23 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 June 30, 2022 and December 31, 2021.
+Added: Management believes the allowance for loan and lease losses was adequate at September 30, 2022 and December 31, 2021.
The allowance analysis is reviewed by the board of directors on a quarterly basis in compliance with regulatory requirements.
1 unchanged sentence
As a result of such reviews, we may have to adjust our allowance for loan and lease losses.
−Removed: However, regulatory agencies are not directly involved in the process of establishing the allowance for loan and lease losses as the process is the responsibility of the Company and any increase or decrease in the allowance is the responsibility of management.
+Added: However, regulatory agencies are not directly involved in the process of establishing the allowance for loan and lease losses as the
+Added: process is the responsibility of the Company and any increase or decrease in the allowance is the responsibility of management.
Income Taxes.
10 unchanged sentences
Penalties related to unrecognized tax benefits are classified as income tax expense.
−Removed: Comparison of Financial Condition at June 30, 2022 and December 31, 2021
+Added: Comparison of Financial Condition at September 30, 2022 and December 31, 2021
Total Assets.
−Removed: Total assets were $373.7 million at June 30, 2022, an increase of $8.9 million, or 2.4%, from $364.8 million at December 31, 2021.
−Removed: The increase was due primarily to increases in net loans and leases of $10.1 million, or 4.6%, from $220.3 million at December 31, 2021 to $230.4 million at June 30, 2022.
+Added: Total assets were $375.7 million at September 30, 2022, an increase of $10.9 million, or 3.0%, from $364.8 million at December 31, 2021.
+Added: The increase was due primarily to increases in net loans and leases of $19.8 million, or 9.0%, from $220.2 million at December 31, 2021 to $240.1 million at September 30, 2022 and an increase in securities of $16.7 million, or 18.5%, from $90.5 million at December 31, 2021 to $107.2 million at September 30, 2022, partially offset by decreases in cash, fed funds sold and deposits in banks.
Cash and Cash Equivalents.
−Removed: Cash and cash equivalents decreased $3.5 million, or 15.9%, to $18.4 million (which includes fed funds sold of $12.2 million) at June 30, 2022 from $21.9 million (which includes fed funds sold of $16.3 million) at December 31, 2021.
−Removed: This decrease is primarily due to an increase in deposits of $13.7 million, being offset by increased net loan funding and an increase in securities purchases.
+Added: Cash and cash equivalents decreased $13.0 million, or 59.4%, to $8.9 million (which includes fed funds sold of $4.5 million) at September 30, 2022 from $21.9 million (which includes fed funds sold of $16.3 million) at December 31, 2021.
+Added: This decrease was primarily the result of increases in net loans and leases of $19.8 million and increases in securities of $16.7 million, partially offset by an increase in deposits of $7.3 million and a decrease in interest bearing deposits in banks of $14.6 million.
Interest Bearing Deposits in Banks.
−Removed: Interest bearing deposits in banks were $7.4 million at June 30, 2022 compared to $15.0 million at December 31, 2021, a decrease of $7.5 million, or 50.4%.
−Removed: The decrease was due primarily to an increase in securities of $8.4 million.
+Added: Interest bearing deposits in banks were $359,000 at September 30, 2022 compared to $15.0 million at December 31, 2021, a decrease of $14.6 million, or 97.3%.
+Added: The decrease was primarily the result of funding increases in net loans and leases of $19.8 million and increases in securities of $16.7 million, partially offset by an increase in deposits of $7.3 million and the use of cash and cash equivalents of $13.0 million.
Securities Available for Sale.
−Removed: Securities available for sale increased by $12.1 million, or 21.3%, to $68.9 million at June 30, 2022 from $56.8 million at December 31, 2021.
+Added: Securities available for sale increased by $21.5 million, or 37.9%, to $78.3 million at September 30, 2022 from $56.8 million at December 31, 2021.
The increase in securities resulted primarily from purchases of $44.5 million, sales of $10.8 million, paydowns of $4.2 million, and unrealized losses on the available for sale portfolio of $7.6 million due primarily to the increase in market interest rates during the period.
Securities Held to Maturity.
−Removed: Securities held to maturity decreased by $3.6 million, or 10.8%, to $30.0 million at June 30, 2022 from $33.7 million at December 31, 2021.
−Removed: This decrease is due primarily to principal repayments of $3.2 million and one municipal security totaling $365,000 being called.
+Added: Securities held to maturity decreased by $4.9 million, or 14.5%, to $28.8 million at September 30, 2022 from $33.7 million at December 31, 2021.
+Added: This decrease is due primarily to principal repayments of $4.4 million and one municipal security with a principal amount of $365,000 being called.
Loans and Leases Receivable, Net.
−Removed: Loans and leases receivable, net, increased $10.1 million, or 4.6%, to $230.4 million at June 30, 2022 from $220.3 million at December 31, 2021.
−Removed: Loans secured by residential real estate and farmland comprise $162.7, or 70.1% of the net loans at June 30, 2022.
−Removed: During the six months ended June 30, 2022, loan originations totaled $53.2 million of which $6.9 million were renewals or refinancings of existing loans with Mineola Community Bank, resulting in originations of new loans of $46.3 million.
+Added: Net loans and leases receivable increased $19.8 million, or 9.0%, to $240.1 million at September 30, 2022 from $220.3 million at December 31, 2021.
+Added: Loans secured by residential real estate and farmland comprise $169.4, or 70.0% of total loans at September 30, 2022.
+Added: During the nine months ended September 30,
+Added: 2022, loan originations totaled $84.3 million of which $11.7 million were renewals or refinancings of existing loans with Mineola Community Bank, resulting in originations of new loans of $72.6 million.
Originations consisted primarily of $29.3 million in one- to-four family residential mortgage loans, $31.5 million of residential construction loans (upon completion), including speculative construction loans of $10.5 million, $6.4 million in commercial real estate loans, $3.5 million in consumer loans, $4.1 million in commercial and industrial loans, $6.8 million in land & development loans, and $2.7 million in farmland loans.
−Removed: During the six months ended June 30, 2022, there were $6.4 million in loan principal paydowns and $27.4 million in loan payoffs.
−Removed: PPP loans have paid down to 2 loans totaling $7,000 at June 30, 2022.
−Removed: During the six months ended June 30, 2022, construction loans (when fully funded upon completion) increased by $11.7 million to $35.0 million at June 30, 2022 from $23.3 million at December 31, 2021 and the construction loan balance increased $6.1 million to $17.3 million at June 30, 2022.
−Removed: 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.
−Removed: Deposits increased $13.7 million, or 5.0%, to $288.6 million at June 30, 2022 from $274.9 million at December 31, 2021.
−Removed: Core deposits (defined as all deposits other than certificates of deposit) increased $17.7 million, or 8.7%, to $220.1 million at June 30, 2022 from $202.4 million at December 31, 2021.
−Removed: Certificates of deposit decreased $4.0 million, or 5.6%, to $68.5 million at June 30, 2022 from $72.6 million at December 31, 2021.
−Removed: At June 30, 2022, there were no brokered deposits.
+Added: During the nine months ended September 30, 2022, there were $9.5 million in loan principal paydowns and $39.8 million in loan payoffs.
+Added: PPP loans have paid down to two loans totaling $5,000 at September 30, 2022.
+Added: During the nine months ended September 30, 2022, construction loans (when fully funded upon completion) increased by $18.6 million, or 79.8%, to $41.9 million at September 30, 2022 from $23.3 million at December 31, 2021 and the construction loan balance increased $10.0 million to $21.4 million at September 30, 2022.
+Added: Construction loans continue to be a large segment of our loan portfolio.
+Added: Deposits increased $7.3 million, or 2.7%, to $282.2 million at September 30, 2022 from $274.9 million at December 31, 2021.
+Added: Core deposits (defined as all deposits other than certificates of deposit) increased $14.0 million, or 6.9%, to $216.4 million at September 30, 2022 from $202.4 million at December 31, 2021.
+Added: Certificates of deposit decreased $6.8 million, or 9.4%, to $65.8 million at September 30, 2022 from $72.6 million at December 31, 2021.
+Added: At September 30, 2022, there were no brokered deposits.
Advances from Federal Home Loan Bank.
−Removed: Advances from Federal Home Loan Bank decreased by $1.0 million, or 3.8%, to $26.5 million at June 30, 2022 from $27.6 million at December 31, 2021 due to scheduled monthly payments of principal on amortizing advances.
+Added: Advances from Federal Home Loan Bank increased by $7.4 million, or 26.8%, to $35.0 million at September 30, 2022 from $27.6 million at December 31, 2021 due to new advances of $12.0 million less maturities of $3 million and scheduled monthly payments of principal on amortizing advances of $1.6 million.
Total Shareholders’ Equity.
−Removed: Total shareholders’ equity decreased $3.9 million, or 6.5%, to $56.2 million at June 30, 2022 from $60.1 million at December 31, 2021.
+Added: Total shareholders’ equity decreased $4.5 million, or 7.5%, to $55.6 million at September 30, 2022 from $60.1 million at December 31, 2021.
This decrease was primarily due to a $6.0 million, or 879.9%, change in accumulated other comprehensive loss representing decreases in the fair value of available for sale securities resulting primarily from rising market interest rates.
−Removed: At June 30, 2022, the accumulated other comprehensive loss was $5.5 million, compared to $686,000 at December 31, 2021, partially offset by net income of $807,000 and an additional $111,000 added to shareholders’ equity with the commitment to release 6,516 additional ESOP shares to participants during the six months ended June 30, 2022.
−Removed: At June 30, 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.
−Removed: At June 30, 2022, a community bank leverage ratio of at least 9.0% is required to be considered “well capitalized” under regulatory requirements.
−Removed: At June 30, 2022, Mineola Community Bank was well capitalized and had a ratio of 12.76%.
+Added: At September 30, 2022, the accumulated other comprehensive loss was $6.7 million, compared to $686,000 at December 31, 2021, partially offset by net income of $1.3 million and an additional $164,000 added to shareholders’ equity with the commitment to release 9,774 additional ESOP shares to participants during the nine months ended September 30, 2022.
+Added: In addition, there was a $21,000 charge to capital for one month of the newly adopted equity incentive plan.
+Added: At September 30, 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 September 30, 2022, a community bank leverage ratio of at least 9.0% is required to be considered “well capitalized” under regulatory requirements.
+Added: At September 30, 2022, Mineola Community Bank was well capitalized and had a ratio of 13.00%.
Average Balance Sheets
3 unchanged sentences
Non-accrual loans are included in the computation of average balances.
−Removed: Average yields for loans (excluding PPP loans) include loan fees of $103,000 and $162,000 for the three months ended June 30, 2022 and 2021, respectively.
−Removed: No PPP loans were originated during the three months ended June 30, 2022 or 2021.
+Added: Average yields for loans (excluding PPP loans) include loan fees of $90,000 and $134,000 for the three months ended September 30, 2022 and 2021, respectively.
+Added: No PPP loans were originated during the three months ended September 30, 2022 or 2021.
We have not recorded deferred loan fees, as we have determined them to be immaterial.
−Removed: For the Three Months Ended June 30,
+Added: For the Three Months Ended September 30,
(Dollars in thousands)
19 unchanged sentences
Total liabilities
−Removed: Total shareholders’ and members' equity
−Removed: Total liabilities and shareholders' and members’ equity
+Added: Total shareholders’ equity
+Added: Total liabilities and shareholders' 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 Three Months Ended June 30, 2022 and June 30, 2021
−Removed: Net income was $416,000 for the three months ended June 30, 2022, compared to net income of $188,000 for the three months ended June 30, 2021, an increase of $228,000, or 121.3%.
−Removed: The increase was primarily due to a $400,000, or 19.0%, increase in net interest income, partially offset by a $101,000, or 5.6%, decrease in net noninterest income, a $9,000 increase in the provision for loan and lease losses and a $79,000 increase in income tax expense.
+Added: Comparison of the Operating Results for the Three Months Ended September 30, 2022 and September 30, 2021
+Added: Net income was $539,000 for the three months ended September 30, 2022, compared to a net loss of $198,000 for the three months ended September 30, 2021, an increase of $737,000, or 372.2%.
+Added: The increase was primarily due to a $653,000, or 31.1%, increase in net interest income and a $280,000, or 12.2%, increase in net noninterest income, partially offset by a $34,000 increase in the provision for loan and lease losses and a $162,000 increase in income tax expense.
Interest Income.
−Removed: Interest income increased by $300,000, or 11.5%, to $2.9 million for the three months ended June 30, 2022 from $2.6 million for the three months ended June 30, 2021.
−Removed: This was primarily the result of increased interest income on securities and cash and cash equivalents resulting from increased yields and a 102.2% increase in the average balance of the securities portfolio.
−Removed: Average interest earning assets overall increased by $43.5 million, or 14.1%, from $307.5 million at June 30, 2021 to $351.0 million at June 30, 2022, which was partially offset by a decrease in the yield on interest earning assets of six basis points, or 1.8%, from 3.40% for the three months ended June 30, 2021 to 3.34% for the three months ended June 30, 2022.
−Removed: Interest income on loans (excluding PPP loans) was flat at $2.4 million for the three months ended June 30, 2022 and the three months ended June 30, 2021.
−Removed: This was primarily due to an increase of $15.6 million, or 7.3%, in the average balance of the loan portfolio to $229.9 million for the three months ended June 30, 2022 from $214.3 million for the three months ended June 30, 2021 being offset by a decrease of 25 basis points, or 5.6%, in the average yield on loans from 4.48% for the three months ended June 30, 2021 to 4.23% for the three months ended June 30, 2022.
−Removed: Interest income on securities increased $257,000, or 135.3%, from $190,000 for the three months ended June 30, 2021 to $447,000 for the three months ended June 30, 2022.
−Removed: This increase resulted from an increase of 25 basis points, or 16.3%, in yield from 1.53% for the three months ended June 30, 2021 to 1.78% for the three months ended June 30, 2022 and an increase in average securities of $50.7 million, or 102.2%, from $49.6 million for the three months ended June 30, 2021 to $100.3 million for the three months ended June 30, 2022.
−Removed: The rate increase is reflective of the rising rates in the overall market and diversification of the securities portfolio as the Bank continued to invest conversion proceeds over the periods compared.
−Removed: Interest income from interest bearing deposits in banks declined $1,000, or 7.1%, from $14,000 for the three months ended June 30, 2021 to $13,000 for the three months ended June 30, 2022.
−Removed: This decline resulted primarily from a $14.2 million, or 72.1%, decrease in average deposits in banks from $19.7 million for the three months ended June 30, 2021 to $5.5 million for the three months ended June 30, 2022 partially offset by an increase of 66 basis points, or 235.7%, in average yield from 0.28% for the three months ended June 30, 2021 to 0.94% for the three months ended June 30, 2022.
−Removed: There was also an increase in fed funds interest income of $25,000, or 500.0%, resulting from a 72 basis points, or 800.0%, increase in average yield on fed funds from 0.09% for the three months ended June 30, 2021 to 0.81% for the three months ended June 30, 2022, partially offset by a $7.9 million, or 34.6%, decrease in average fed funds balances from $22.8 million for the three months ended June 30, 2021 to $14.9 million for the three months ended June 30, 2022.
+Added: Interest income increased by $584,000, or 22.5%, to $3.2 million for the three months ended September 30, 2022 from $2.6 million for the three months ended September 30, 2021.
+Added: This was primarily the result of increased interest income on securities due to an increased average balance increase of 86.1% and an increase in yield of 67.1% and increased loan interest from an increased average balance of 7.1%.
+Added: Average interest earning assets overall increased by $16.5 million, or 5.0%, from $333.0 million at September 30, 2021 to $349.5 million at September 30, 2022, and the yield on those assets increased by 52 basis points, or 16.6%, from 3.14% for the three months ended September 30, 2021 to 3.66% for the three months ended September 30, 2022.
+Added: Interest income on loans (excluding PPP loans) increased $140,000, or 5.8%, from $2.4 million for the three months ended September 30, 2021 to $2.5 million for the three months ended September 30, 2022.
+Added: This was primarily due to an increase of $15.6 million, or 7.1%, in the average balance of the loan portfolio to $235.4 million for the three months ended September 30, 2022 from $219.8 million for the three months ended September 30, 2021 being offset by a decrease of five basis points, or 1.1%, in the average yield on loans from 4.35% for the three months ended September 30, 2021 to 4.30% for the three months ended September 30, 2022.
+Added: In the three months ending September 30, 2021, we originated more loans with fees that were included in interest income than in the three months ending September 30, 2022 and although loan rates have increased, we had not originated enough loans at the higher rates at September 30, 2022 to increase the weighted average cost of the entire loan portfolio.
+Added: Interest income on securities increased $408,000, or 211.4%, from $193,000 for the three months ended September 30, 2021 to $601,000 for the three months ended September 30, 2022.
+Added: This increase resulted from an increase of 94 basis points, or 67.1%, in yield from 1.40% for the three months ended September 30, 2021 to 2.34% for the three months ended September 30, 2022 and an increase in average securities of $47.5 million, or 86.1%, from $55.2 million for the three months ended September 30, 2021 to $102.7 million for the three months ended September 30, 2022.
+Added: The rate increase is reflective of the rise in market interest rates in the overall market and diversification of the securities portfolio as the Company continued to invest the net proceeds of the conversion stock offering over the periods compared.
+Added: Interest income from interest bearing deposits in banks increased $5,000, or 50.0%, from $10,000 for the three months ended September 30, 2021 to $15,000 for the three months ended September 30, 2022.
+Added: This increase resulted primarily from an increase in average yield of 166 basis points, or 691.7%, from 0.24% for the three months ended September 30, 2021 to 1.90% for the three months ended September 30, 2022, partially offset by a decrease in the average interest bearing deposits in banks of $13.8 million, or 81.2%, from $17.0 million for the three months ended September 30, 2021 to $3.2 million for the three months ended September 30, 2022.
+Added: There was also an increase in fed funds interest income of $29,000, or 241.7%, resulting from a 197 basis points, or 1,641.7%, increase in average yield on fed funds sold from 0.12% for the three months ended September 30, 2021 to 2.09% for the three months ended September 30, 2022, partially offset by a $32.5 million, or 80.4%, decrease in average fed funds balances from $40.4 million for the three months ended September 30, 2021 to $7.9 million for the three months ended September 30, 2022.
Interest Expense.
−Removed: Total interest expense decreased $107,000, or 19.5%, to $441,000 for the three months ended June 30, 2022 from $548,000 for the three months ended June 30, 2021 due to a decrease in the average cost of interest-bearing liabilities of 19 basis points, or 22.4%, from 0.85% for the three months ended June 30, 2021 to 0.66% for the three months ended June 30, 2022, primarily due to a decrease in deposit costs.
−Removed: Interest expense on deposit accounts decreased $91,000, or 23.4%, to $298,000 for three months ended June 30, 2022 from $389,000 for the three months ended June 30, 2021, due to a decrease in the average deposit cost of 18 basis points, or 26.5%, from 0.68% for the three months ended June 30, 2021 to 0.50% for the three months ended June 30, 2022, primarily the result of an overall decrease in market interest rates.
−Removed: This was partially offset by an increase of $11.7 million, or 5.1%, in the average deposit account balances from $228.4 million for the three months ended June 30, 2021 to $240.1 million for the three months ended June 30, 2022, with the increase being in lower cost interest bearing transaction accounts.
−Removed: Interest expense on Federal Home Loan Bank advances decreased $16,000, or 10.2%, to $141,000 for the three months ended June 30, 2022 from $157,000 for the three months ended June 30, 2021.
−Removed: This decrease was due
−Removed: primarily to the decrease in the average balance of Federal Home Loan Bank advances of $3.1 million, or 10.5%, to $26.7 million for the three months ended June 30, 2022 from $29.8 million for the three months ended June 30, 2021.
+Added: Total interest expense decreased $69,000, or 13.4%, to $447,000 for the three months ended September 30, 2022 from $516,000 for the three months ended September 30, 2021 due primarily to a decrease in the average cost of interest-bearing liabilities of 12 basis points, or 15.0%, from 0.80% for the three months ended September 30, 2021 to 0.68% for the three months ended September 30, 2022, primarily due to decreased deposit costs for the period as a result of lower deposit rates in the last quarter of 2021 and the first half of 2022.
+Added: Interest expense on deposit accounts decreased $62,000, or 17.1%, to $300,000 for three months ended September 30, 2022 from $362,000 for the three months ended September 30, 2021, due to a decrease in the average deposit cost of 13 basis points, or 20.3%, from 0.64% for the three months ended September 30, 2021 to 0.51% for the three months ended September 30,
+Added: 2022, primarily the result of lower average deposit rates in the three months ended September 30, 2022 combined with a movement of funds to more liquid and lower-cost types of accounts.
+Added: This was partially offset by an increase of $8.7 million, or 3.8%, in the average deposit account balances from $227.7 million for the three months ended September 30, 2021 to $236.4 million for the three months ended September 30, 2022, with the increase being in lower cost interest bearing transaction accounts.
+Added: Interest expense on Federal Home Loan Bank advances decreased $7,000, or 4.6%, to $144,000 for the three months ended September 30, 2022 from $151,000 for the three months ended September 30, 2021.
+Added: This decrease was due primarily to the decrease in the average balance of Federal Home Loan Bank advances of $1.0 million, or 3.5%, to $27.3 million for the three months ended September 30, 2022 from $28.3 million for the three months ended September 30, 2021.
Net Interest Income.
−Removed: Net interest income increased $400,000, or 19.0%, to $2.5 million for the three months ended June 30, 2022 from $2.1 million for the three months ended June 30, 2021 primarily due to an increase in the average balance of net interest-earning assets of $34.8 million, or 71.2%, from $48.9 million for the three months ended June 30, 2021 to $83.7 million for the three months ended June 30, 2022, with a 12 basis point, or 4.7%, increase in the net interest rate spread from 2.56% for the three months ended June 30, 2021 to 2.68% for the three months ended June 30, 2022 and an increase in interest margin of 14 basis points, or 5.2%, to 2.83% for the three months ended June 30, 2022 from 2.69% for the three months ended June 30, 2021.
+Added: Net interest income increased $653,000, or 31.1%, to $2.8 million for the three months ended September 30, 2022 from $2.1 million for the three months ended September 30, 2021 primarily due to an increase in the average balance of net interest-earning assets of $8.7 million, or 11.3%, from $76.6 million for the three months ended September 30, 2021 to $85.3 million for the three months ended September 30, 2022, with a 65 basis point, or 27.9%, increase in the net interest rate spread from 2.33% for the three months ended September 30, 2021 to 2.98% for the three months ended September 30, 2022 and an increase in net interest margin of 63 basis points, or 25.0%, to 3.15% for the three months ended September 30, 2022 from 2.52% for the three months ended September 30, 2021.
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 $37,000, for the three months ended June 30, 2022, compared to $28,000 for the three months ended June 30, 2021, an increase of $9,000, or 32.1%, due primarily to increased loan volume.
+Added: Based on management’s analysis of the adequacy of allowance for loan and lease losses, the provision for loan and lease losses was $48,000 for the three months ended September 30, 2022, compared to $14,000 for the three months ended September 30, 2021, an increase of $34,000, or 242.9%, due primarily to increased loan volume and the diversification of the loan portfolio.
Noninterest Income.
−Removed: Noninterest income increased $23,000, or 5.4%, to $449,000 for the three months ended June 30, 2022 from $426,000 for the three months ended June 30, 2021, due primarily to an increase in service charges on deposit accounts of $40,000, or 32%, and an increase in other service charges and fees of $10,000, or 3.7%, for the three months ended June 30, 2022 partially offset by a $29,000 loss on the sale of securities for the three months ended June 30, 2022.
+Added: Noninterest income increased $47,000, or 10.4%, to $499,000 for the three months ended September 30, 2022 from $452,000 for the three months ended September 30, 2021, due primarily to an increase in service charges on deposit accounts of $7,000, or 4.4%, and an increase in other service charges and fees of $1,000, or 0.4%, for the three months ended September 30, 2022 and a gain of $42,000 for the three months ended September 30, 2022 on the sale of other real estate owned.
Noninterest Expense.
−Removed: Noninterest expense increased $124,000, or 5.5%, to $2.4 million for the three months ended June 30, 2022 primarily due to increases in salaries, employee benefits and director fees.
−Removed: Salary and employee benefit expenses increased by $145,000, or 11.5%, to $1.4 million for the three months ended June 30, 2022 from $1.3 million for the three months ended June 30, 2021, due to normal salary increases and a $51,000 contribution to the ESOP plan for the three months ended June 30, 2022 which did not exist in the three months June 30, 2021.
−Removed: Directors’ fees also increased $14,000, or 17.3%, to $95,000 for the three months ended June 30, 2022 from $81,000 for the three months ended June 30, 2021 due to the addition of new directors.
−Removed: Data processing, contract services and other fees combined decreased by $34,000, or 4.7%, primarily due to higher expenses related to the conversion during the three months ended June 30, 2021 partially offsetting those increases.
+Added: Noninterest expense decreased $233,000, or 8.4%, to $2.5 million for the three months ended September 30, 2022 from $2.8 million for the three months ended September 30, 2021, primarily due to decreases in other expenses and contract services that were higher in 2021 due to the stock conversion transaction, partially offset by increases in salaries, employee benefits and director fees.
+Added: Salary and employee benefit expenses increased by $178,000, or 13.5%, to $1.5 million for the three months ended September 30, 2022 from $1.3 million for the three months ended September 30, 2021, due to normal salary increases and a $21,000 contribution to the Equity Plan for the three months ended September 30, 2022 which did not exist in the three months ended September 30, 2021, partially offset by decreased ESOP expense in the three months ending September 30, 2022 due to initial funding costs being higher in the three months ended September 30, 2021.
+Added: Directors’ fees also increased $21,000, or 28.0%, to $96,000 for the three months ended September 30, 2022 from $75,000 for the three months ended September 30, 2021 due to the addition of four new directors and two new advisory directors.
+Added: This was partially offset by a decrease of $446,000, or 37.0%, in data processing, contract services and other fees combined, primarily due to higher expenses related to the stock conversion transaction during the three months ended September 30, 2021.
Income Tax Expense.
−Removed: Income tax expense increased by $79,000, or 225.7%, to $114,000 for the three months ended June 30, 2022 from $35,000 for the three months ended June 30, 2021 primarily due to higher income before taxes.
−Removed: The effective tax rate was 21.5% and 15.7% for the three months ended June 30, 2022 and 2021, respectively.
−Removed: The effective tax rate was higher for the three months ended June 30, 2022 due to taxable income increasing at a faster rate than tax exempt income
+Added: Income tax expense increased by $162,000, or 450.0%, to $126,000 for the three months ended September 30, 2022 from a tax benefit of $36,000 primarily due to higher income before taxes.
+Added: The effective tax rate was 19.0% and 15.4% for the three months ended September 30, 2022 and 2021, respectively.
+Added: The effective tax rate was higher for the three months ended September 30, 2022 due to taxable income increasing at a faster rate than tax exempt income.
Average Balance Sheets
3 unchanged sentences
Non-accrual loans are included in the computation of average balances.
−Removed: Average yields for loans (excluding PPP loans) include loan fees of $215,000 and $295,000 for the six months ended June 30, 2022 and 2021, respectively.
−Removed: No PPP loans were originated during the six months ended June 30, 2022 or 2021.
+Added: Average yields for loans (excluding PPP loans) include loan fees of $304,000 and $429,000 for the nine months ended September 30, 2022 and 2021, respectively.
+Added: No PPP loans were originated during the nine months ended September 30, 2022 or 2021.
We have not recorded deferred loan fees, as we have determined them to be immaterial.
−Removed: For the Six Months Ended June 30,
+Added: For the Nine Months Ended September 30,
(Dollars in thousands)
19 unchanged sentences
Total liabilities
−Removed: Total shareholders' and members’ equity
−Removed: Total liabilities and shareholders' and members’ equity
+Added: Total shareholders' equity
+Added: Total liabilities and shareholders' 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 Six Months Ended June 30, 2022 and June 30, 2021
−Removed: Net income was $807,000 for the six months ended June 30, 2022, compared to net income of $430,000 for the six months ended June 30, 2021, an increase of $377,000, or 87.7%.
−Removed: The increase was primarily due to a $700,000 increase in net interest income and a $93,000 increase in noninterest income, offset by a $238,000 increase in noninterest expense, a $47,000 increase in the provision for loan and lease losses and an increase in income tax expense of $119,000.
+Added: Comparison of the Operating Results for the Nine Months Ended September 30, 2022 and September 30, 2021
+Added: Net income was $1.3 million for the nine months ended September 30, 2022, compared to net income of $232,000 for the nine months ended September 30, 2021, an increase of $1.1 million, or 550.0%.
+Added: The increase was primarily due to a $1.3 million, or 21.0%, increase in net interest income and a $141,000 increase in noninterest income, offset by a $81,000 increase in the provision for loan and lease losses and an increase in income tax expense of $281,000.
Interest Income.
−Removed: Interest income increased at $500,000, or 9.6%, for the six months ended June 30, 2022 from $5.2 million at June 30, 2021 to $5.7 million at June 30, 2022.
−Removed: This was primarily the result of increased interest income on securities and fed funds due primarily to the continued investment of proceeds from the Conversion and increased yields on those investments resulting primarily from rising market interest rates.
−Removed: Average interest earning assets increased by $51.3 million, or 17.3%, from $297.1 million at June 30, 2021 to $348.4 million at June 30, 2022, which was partially offset by a decrease in the yield on interest earning assets of 24 basis points, or 6.8%, from 3.51% on June 30, 2021 to 3.27% on June 30, 2022.
−Removed: Interest income on loans was $4.8 million for the six months ended June 30, 2022 and 2021.
−Removed: Loan interest income remained flat with a $13.7 million, or 6.4%, increase in average loans from $213.2 million at June 30, 2021 to $226.9 million at June 30, 2022 being offset by a 26 basis point, or 5.8%, decrease in loan yield to 4.24% for the six months ended June 30, 2022 from 4.50% for the six months ended June 30, 2021.
−Removed: Interest income on securities increased $452,000, or 122.8%, from $368,000 for the six months ended June 30, 2021 to $820,000 for the six months ended June 30, 2022.
−Removed: This increase resulted from an increase of 18 basis points, or 11.9%, in yield from 1.51% for the six months ended June 30, 2021 to 1.69% for the six months ended June 30, 2022 and an increase in average securities of $48.5 million, or 99.6 %, from $48.7 million for the six months ended June 30, 2021 to $97.2 million for the six months ended June 30, 2022.
−Removed: The rate increase is reflective of market rate increases and the diversification of our securities portfolio as we continue to invest Conversion proceeds into higher yielding investments.
−Removed: Interest income from interest bearing deposits in banks declined $16,000, or 45.7%, from $35,000 for the six months ended June 30, 2021 to $19,000 for the six months ended June 30, 2022.
−Removed: This decline resulted from a decrease in average deposits in banks of $13.6 million, or 65.7%, from $20.7 million for the six months ended June 30, 2021 to $7.1 million for the six months ended June 30, 2022 partially offset by a 20 basis points, or 58.8%, increase in average yield from 0.34% for the six months ended June 30, 2021 to 0.54% for the six months ended June 30, 2022.
−Removed: There was also an increase of $34,000 in fed funds interest income for the six months ended June 30, 2022 primarily from an increase of 39 basis points, or 487.5%, in average yield on fed funds from 0.08% for the six months ended June 30, 2021 to 0.47% for the six months ended June 30, 2022, and a $3.6 million, or 27.5%, increase in average fed funds from $13.1 million for the six months ended June 30, 2021 to $16.7 million for the six months ended June 30, 2022.
−Removed: This increase is reflective of the increase in the fed funds market rate.
+Added: Interest income increased $1.1 million, or 14.1%, for the nine months ended September 30, 2022 from $7.8 million at September 30, 2021 to $8.9 million at September 30, 2022.
+Added: This was primarily the result of increased interest income on securities and fed funds sold due primarily to the continued investment of the net proceeds from the conversion stock offering and increased yields on those investments resulting primarily from rising market interest rates.
+Added: Average interest earning assets increased by $39.5 million, or 12.8%, from $309.3 million at September 30, 2021 to $348.8 million at September 30, 2022, and a small increase in the yield on interest earning assets of 2 basis points, or 0.6%, from 3.38% on September 30, 2021 to 3.40% on September 30, 2022.
+Added: Interest income on loans increased $146,000, or 2.0%, to $7.3 million for the nine months ended September 30, 2022 from $7.2 million for the nine months ending September 30, 2021.
+Added: Average loans increased $14.3 million, or 6.6%, from $215.5 million at September 30, 2021 to $229.8 million at September 30, 2022, being offset by a 19 basis point, or 4.3%, decrease in loan yield to 4.26% for the nine months ended September 30, 2022 from 4.45% for the nine months ended September 30, 2021.
+Added: In the nine months ending September 30, 2021, we originated more loans with fees that were included in interest income than in the three months ending September 30 2022 and although loan rates have increased, we had not originated enough loans at the higher rates at September 30, 2022 to increase the weighted average cost of the entire loan portfolio.
+Added: Interest income on securities increased $861,000, or 153.8%, from $560,000 for the nine months ended September 30, 2021 to $1.4 million for the nine months ended September 30, 2022.
+Added: This increase resulted from an increase in average securities of $48.2 million, or 94.7%, from $50.9 million for the nine months ended September 30, 2021 to $99.1 million for the nine months ended September 30, 2022 and an increase of 44 basis points, or 29.9%, in average yield from 1.47% for the nine months ended September 30, 2021 to 1.91% for the nine months ended September 30, 2022.
+Added: The rate increase is reflective of market rate increases and the diversification of the securities portfolio as the net proceeds of the conversion stock offering continued to be invested into higher yielding investments.
+Added: Interest income from interest bearing deposits in banks declined $11,000, or 24.4%, from $45,000 for the nine months ended September 30, 2021 to $34,000 for the nine months ended September 30, 2022.
+Added: This decline resulted from a decrease in average deposits in banks of $13.6 million, or 70.1%, from $19.4 million for the nine months ended September 30, 2021 to $5.8 million for the nine months ended September 30, 2022, partially offset by 48 basis points, or 154.8%, increase in average yield from 0.31% for the nine months ended September 30, 2021 to 0.79% for the nine months ended September 30, 2022.
+Added: There was also an increase of $63,000 in fed funds interest income for the nine months ended September 30, 2022 primarily from an increase of 68 basis points, or 680.0%, in average yield on fed funds sold from 0.10% for the nine months ended September 30, 2021 to 0.78% for the nine months ended September 30, 2022, partially offset by a $8.6 million, or 38.6%, decrease in average fed funds sold from $22.3 million for the nine months ended September 30, 2021 to $13.7 million for the nine months ended September 30, 2022.
+Added: The increases in yields on deposits in banks and fed funds is reflective of the sharp increase in market rates.
Interest Expense.
−Removed: Total interest expense decreased $214,000, or 19.2%, to $898,000 for the six months ended June 30, 2022 from $1.1 million for the six months ended June 30, 2021 due to a decrease in the average cost of interest-bearing liabilities of 21 basis points, or 23.6%, from 0.89% for the six months ended June 30, 2021 to 0.68% for the six months ended June 30, 2022, primarily due to a decrease in deposit costs.
−Removed: Interest expense on deposit accounts decreased $182,000, or 23.0%, to $609,000 for six months ended June 30, 2022 from $791,000 for the six months ended June 30, 2021, due to a decrease in the average deposit cost of 21 basis points, or 29.2%, from 0.72% for the six months ended June 30, 2021 to 0.51% for the six months ended June 30, 2022.
−Removed: This was partially offset by an increase of $18.4 million, or 8.4%, in the average deposit account balances from $219.9 million for the six months ended June 30, 2021 to $238.2 million for the six months ended June 30, 2022, with the increase being in lower cost interest-bearing transaction accounts.
−Removed: Interest expense on Federal Home Loan Bank advances decreased $32,000, or 10.1%, to $285,000 for the six months ended June 30, 2022 from $317,000 for the six months ended June 30, 2021.
−Removed: This decrease was due primarily to the decrease in the average balance of Federal Home Loan Bank advances of $3.1 million, or 10.5%, to $27.0 million
−Removed: for the six months ended June 30, 2022 from $30.1 million for the six months ended June 30, 2021.
−Removed: The average yield was 2.11% for the six months ended June 30, 2022 and 2.10% for the six months ended June 30, 2021.
+Added: Total interest expense decreased $283,000, or 17.4%, to $1.3 million for the nine months ended September 30, 2022 from $1.6 million for the nine months ended September 30, 2021 due to a decrease in the average cost of interest-bearing liabilities of 18 basis points, or 20.9%, from 0.86% for the nine months ended September 30, 2021 to 0.68% for the nine months ended September 30, 2022, primarily due to a decrease in deposit costs.
+Added: Interest expense on deposit accounts decreased $244,000, or 21.2%, to $908,000 for the nine months ended September 30, 2022 from $1.2 million for the nine months ended September 30, 2021, due to a decrease in the average deposit cost of 18 basis points, or 26.1%, from 0.69% for the nine months ended September 30, 2021 to 0.51% for the nine months ended September 30, 2022.
+Added: This was partially offset by an increase of $15.1 million, or 6.8%, in the average interest bearing
+Added: deposit account balances from $222.6 million for the nine months ended September 30, 2021 to $237.6 million for the nine months ended September 30, 2022, with the increase being in lower cost interest-bearing transaction accounts.
+Added: Interest expense on Federal Home Loan Bank advances decreased $39,000, or 8.3%, to $429,000 for the nine months ended September 30, 2022 from $468,000 for the nine months ended September 30, 2021.
+Added: This decrease was due primarily to the decrease in the average balance of Federal Home Loan Bank advances of $2.4 million, or 8.1%, to $27.1 million for the nine months ended September 30, 2022 from $29.5 million for the nine months ended September 30, 2021.
+Added: The average yield was 2.11% for the nine months ended September 30, 2022 and 2.12% for the nine months ended September 30, 2021.
Net Interest Income.
−Removed: Net interest income increased $700,000, or 17.1%, to $4.8 million for the six months ended June 30, 2022 from $4.1 million for the six months ended June 30, 2021 primarily due to an increase of $35.9 million in the average balance of net interest-earning assets from $46.8 million for the six months ended June 30, 2021 to $82.7 million for the six months ended June 30, 2022, which offset a three basis point, or 1.1%, decrease in the net interest rate spread from 2.62% for the six months ended June 30, 2021 to 2.59% for the six months ended June 30, 2022.
−Removed: Net interest margin decreased one basis point, or 0.4%, to 2.75% for the six months ended June 30, 2022 from 2.76% for the six months ended June 30, 2021.
+Added: Net interest income increased $1.3 million, or 21.6%, to $7.5 million for the nine months ended September 30, 2022 from $6.2 million for the nine months ended September 30, 2021 primarily due to an increase of $26.7 million, or 46.9%, in the average balance of net interest-earning assets from $56.9 million for the nine months ended September 30, 2021 to $83.6 million for the nine months ended September 30, 2022, and a 20 basis points, or 7.9%, increase in the net interest rate spread from 2.52% for the nine months ended September 30, 2021 to 2.72% for the nine months ended September 30, 2022.
+Added: Net interest margin increased 20 basis points, or 7.5%, to 2.88% for the nine months ended September 30, 2022 from 2.68% for the nine months ended September 30, 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 $77,000 for the six months ended June 30, 2022, compared to $30,000 for the six months ended June 30, 2021, an increase of $47,000, primarily due to an increase in loan volume.
+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 $125,000 for the nine months ended September 30, 2022, compared to $44,000 for the nine months ended September 30, 2021, an increase of $81,000, or 184.1%, primarily due to an increase in loans and leases, an $18,000 increase in net consumer credit losses to $31,000 for the nine months ended September 30, 2022 and diversification of the loan portfolio.
Noninterest Income.
−Removed: Noninterest income increased $93,000, or 11.5%, to $902,000 for the six months ended June 30, 2022 from $809,000 for the six months ended June 30, 2021, due primarily to an increase of $118,000, or 15.8%, in service charges and fees from $746,000 for the six months ended June 30, 2021 to $864,000 for the six months ended June 30, 2022.
−Removed: The increase is primarily due to an increase in the number of deposit accounts combined with increased ATM use.
−Removed: This was partially offset by a $29,000 loss on the sale of securities during the six months ended June 30, 2022.
+Added: Noninterest income increased $141,000, or 7.7%, to $1.4 million for the nine months ended September 30, 2022 from $1.3 million for the nine months ended September 30, 2021, due primarily to an increase of $127,000, or 10.9%, in service charges and fees from $1.2 million for the nine months ended September 30, 2021 to $1.3 million for the nine months ended September 30, 2022.
+Added: The increase is primarily due to an $84,000 increase in service charges primarily due to waiving fees during part of 2021 on deposit accounts and increases in the number of deposit accounts.
+Added: There was also a $42,000 gain on the sale of real estate owned in the nine months ended September 30, 2022, partially offset by a $29,000 loss on the sale of securities during the nine months ended September 30, 2022.
Noninterest Expense.
−Removed: Noninterest expense increased $238,000, or 5.4%, to $4.6 million for the six months ended June 30, 2022 primarily due to increases in salaries and employee benefits, director fees and other expenses partially offset by decreases in contract services and data processing.
−Removed: Salary and employee benefit expenses increased by $277,000, or 11.1%, to $2.8 million for the six months ended June 30, 2022 from $2.5 million for the six months ended June 30, 2021, due to normal salary increases and an increase in health insurance cost, as well as the additional $111,000 expense for the quarter for the ESOP plan that was not in existence in 2021.
−Removed: Directors’ fees also increased $35,000, or 22.4%, to $191,000 for the six months ended June 30, 2022 from $156,000 for the six months ended June 30, 2021 due to the addition of four new directors and two new advisory directors.
−Removed: These increases were partially offset by a combined decrease in data processing, contract services and other expenses of $82,000.
−Removed: These expenses were higher in the six months ended June 30, 2021 due partially to additional expenses related to the Conversion.
+Added: Noninterest expense remained flat at $7.1 million for the nine months ended September 30, 2022 primarily due to increases in salaries, employee benefits and director fees being offset by decreases in contract services, data processing and other expenses.
+Added: Salary and employee benefit expenses increased by $455,000, or 11.9%, to $4.3 million for the nine months ended September 30, 2022 from $3.8 million for the nine months ended September 30, 2021, due to normal salary and benefits increases and an increase in the ESOP contribution expense of $61,000 and a new $21,000 contribution expense for the Equity Plan in the nine months ending September 30, 2022.
+Added: The Equity Plan was not in existence and the ESOP was not fully funded for the nine months ending September 30, 2021.
+Added: Directors’ fees increased $56,000, or 24.2%, to $287,000 for the nine months ended September 30, 2022 from $231,000 for the nine months ended September 30, 2021 due to the addition of four new directors and two new advisory directors in 2022.
+Added: These increases were offset primarily by a combined decrease in data processing, contract services and other expenses of $527,000.
+Added: These expenses were higher in the nine months ended September 30, 2021 due partially to additional expenses related to the stock conversion.
Income Tax Expense.
−Removed: Income tax expense increased by $119,000, or 143.4%, to $202,000 for the six months ended June 30, 2022 from $83,000 for the six months ended June 30, 2021, primarily due to higher income before taxes.
−Removed: The effective tax rate was 20.02% and 16.18% for the six months ended June 30, 2022 and 2021, respectively.
−Removed: The effective tax rate was higher for the six months ended June 30, 2022 due to taxable income increasing at a faster rate than tax exempt income
+Added: Income tax expense increased by $281,000, or 597.9%, to $328,000 for the nine months ended September 30, 2022 from $47,000 for the nine months ended September 30, 2021, primarily due to higher income before taxes.
+Added: The effective tax rate was 19.59% and 16.85% for the nine months ended September 30, 2022 and 2021, respectively.
+Added: The effective tax rate was higher for the nine months ended September 30, 2022 due to taxable income increasing at a faster rate than tax exempt income.
Liquidity and Capital Resources
4 unchanged sentences
We are also able to borrow from the Federal Home Loan Bank of Dallas.
−Removed: At June 30, 2022, we had outstanding advances of $26.5 million from the Federal Home Loan Bank of Dallas.
−Removed: At June 30, 2022, we had unused borrowing capacity of $107.8 million with the Federal Home Loan Bank of Dallas.
−Removed: In addition, at June 30, 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.
−Removed: At June 30, 2022, there was no outstanding balance under either of these facilities.
+Added: At September 30, 2022, we had outstanding advances of $35.0 million from the Federal Home Loan Bank of Dallas.
+Added: At September 30, 2022, we had unused borrowing capacity of $100.5 million with the Federal Home Loan Bank of Dallas.
+Added: In addition, at September 30, 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 September 30, 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.
1 unchanged sentence
The levels of these assets are dependent on our operating, financing, lending, and investing activities during any given period.
−Removed: Our cash flows are comprised of six primary classifications:
+Added: Our cash flows are comprised of three primary classifications:
cash flows from operating activities, investing activities, and financing activities.
−Removed: For additional information, see the consolidated statements of cash flows for the six months ended June 30, 2022 and 2021 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 nine months ended September 30, 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 June 30, 2022, Texas Community Bancshares, Inc.
+Added: At September 30, 2022, Texas Community Bancshares, Inc.
(on a stand-alone, unconsolidated basis) had liquid assets of $13.4 million.
−Removed: At June 30, 2022, Mineola Community Bank exceeded all of its regulatory capital requirements, and was categorized as well-capitalized at that date.
+Added: At September 30, 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.
23 unchanged sentences
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.
−Removed: At June 30, 2022
+Added: At September 30, 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 June 30, 2022, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a 2.47% decrease in net interest income, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 2.30% decrease in net interest income.
+Added: The table above indicates that at September 30, 2022, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a 2.11% decrease in net interest income, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 1.86% decrease in net interest income.
The net interest income decreases in both interest rate scenarios due to the assets and liabilities repricing at different speeds in a rates up and rates down environment.
4 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 June 30, 2022
+Added: At September 30, 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 June 30, 2022, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a 8.53% decrease in EVE, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 1.02% increase in EVE.
+Added: The table above indicates that at September 30, 2022, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a 6.85% decrease in EVE, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 0.03% 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.