7 unchanged sentences
We have audited the accompanying consolidated statements of financial condition of Texas Community Bancshares, Inc.
−Removed: and Subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive (loss) income, shareholders' and members' equity, and cash flows for each of the years in the two-year period ended December 31, 2022, and the related notes (collectively referred to as the "consolidated financial statements").
+Added: and Subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), shareholders' equity, and cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively referred to as the "consolidated financial statements").
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
28 unchanged sentences
Securities held to maturity (fair values of $ 23,400 at December 31, 2023 and $ 24,615 at December 31, 2022)
−Removed: Loans receivable, net of allowance for loan and lease losses of $ 1,755 at December 31, 2022 and $ 1,592 at December 31, 2021
+Added: Loans receivable, net of allowance for credit losses of $ 3,096 at December 31, 2023 and $ 1,755 at December 31, 2022
Net investment in direct financing leases
5 unchanged sentences
Core deposit intangible
−Removed: Mortgage servicing rights, net
Deferred income taxes
+Added: Financial derivative
Liabilities and Shareholders' Equity
7 unchanged sentences
Preferred stock, $ 0.01 par value, 1,000,000 shares authorized, none issued and outstanding
−Removed: Common stock, $ 0.01 par value, 19,000,000 shares authorized, 3,296,843 and 3,257,759 shares issued and outstanding at December 31, 2022 and 2021, respectively
+Added: Common stock, $ 0.01 par value, 19,000,000 shares authorized, 3,350,268 issued and 3,175,426 outstanding at December 31, 2023 and 3,296,843 issued and outstanding at December 31, 2022
Additional paid in capital
2 unchanged sentences
Unearned Employee Stock Ownership Program (ESOP) shares, at cost
+Added: Treasury stock, at cost ( 174,842 shares at December 31, 2023)
Total shareholders' equity
2 unchanged sentences
and Subsidiaries
−Removed: Consolidated Statements of Income
+Added: Consolidated Statements of Operations
Years Ended December 31, 2023 and 2022
6 unchanged sentences
Deposits with banks
+Added: Financial derivative
Total interest income
3 unchanged sentences
Net Interest Income
−Removed: Provision for Loan and Lease Losses
−Removed: Net Interest Income After Provision for Loan and Lease Losses
+Added: Provision for Credit Losses - loans
+Added: Provision for Credit Losses - off-balance sheet credit exposures
+Added: Provision for Credit Losses
+Added: Net Interest Income After Provision for Credit Losses
Noninterest Income
1 unchanged sentence
Other service charges and fees
−Removed: Net gain (loss) on securities transactions
+Added: Net loss on securities transactions
Net gain on sale of foreclosed assets
−Removed: Net gain on sale of fixed assets
+Added: Net (loss) gain on sale of fixed assets
Net appreciation on bank-owned life insurance
4 unchanged sentences
Data processing
+Added: Technology expense
Contract services
1 unchanged sentence
Other expense
−Removed: Total noninterest expenses
−Removed: Income Before Income Taxes
−Removed: Income Tax Expense
−Removed: Earnings per share - basic
−Removed: Earnings per share - diluted
+Added: Total noninterest expense
+Added: (Loss) Income Before Income Taxes
+Added: Income Tax (Benefit) Expense
+Added: Net (Loss) Income
+Added: (Loss) earnings per share - basic
+Added: (Loss) earnings per share - diluted
Weighted-average shares outstanding - basic
3 unchanged sentences
and Subsidiaries
−Removed: Consolidated Statements of Comprehensive Loss
+Added: Consolidated Statements of Comprehensive Income (Loss)
Years Ended December 31, 2023 and 2022
(Amounts in thousands, except for share and per share data)
−Removed: Other items of comprehensive loss
+Added: Net (Loss) Income
+Added: Other items of comprehensive income (loss)
+Added: Debt Securities
Net changes in fair value of available for sale securities, before tax
−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
−Removed: Comprehensive Loss
+Added: Reclassification adjustment for realized loss on sale of investment securities included in net (loss) income, before tax
+Added: Net changes in fair value of available for sale securities hedged, before tax
+Added: Total other items of comprehensive income (loss), before tax
+Added: Income tax (expense) benefit related to other items of comprehensive income (loss)
+Added: Total other items of comprehensive income (loss), after tax
+Added: Comprehensive Income (Loss)
See Notes to Consolidated Financial Statements
7 unchanged sentences
Balance at January 1, 2023
+Added: Cumulative change in accounting principle (adoption of ASC 326)
+Added: Balance at January 1, 2023 (as adjusted for change in accounting principle)
Stock based compensation expense
−Removed: Net changes in fair value of available for sale securities, net of tax benefit of $ 1,678
+Added: Issuance of restricted stock awards
+Added: Other comprehensive income, net of tax
+Added: Cash dividends declared (at an average of $ 0.03 per share)
ESOP shares earned, 14,844 shares
+Added: Treasury stock purchased, 174,842 shares
Balance at December 31, 2023
Balance at January 1, 2022
−Removed: Stock issuance, net of conversion costs of $ 1,684
−Removed: Net changes in fair value of available for sale securities, net of tax benefit of $ 217
−Removed: Leveraged ESOP shares, 2,606,210 shares
+Added: Stock based compensation expense
+Added: Other comprehensive loss, net of tax
ESOP shares earned, 13,031 shares
7 unchanged sentences
Operating Activities
−Removed: Adjustments to reconcile net income to net cash from operating activities
−Removed: Provision for loan and lease losses
−Removed: Net amortization of securities
+Added: Net (loss) income
+Added: Adjustments to reconcile net (loss) income to net cash from operating activities
+Added: Provision for credit losses - loans
+Added: Provision for credit losses - off-balance sheet credit exposures
+Added: Net (accretion) amortization of securities
Depreciation and amortization
1 unchanged sentence
Stock dividends on restricted securities
−Removed: Loss on sale of fixed assets
−Removed: Gain on sale of foreclosed assets
+Added: Loss (gain) on sale of fixed assets
+Added: Gain on foreclosed assets
Appreciation on bank-owned life insurance
1 unchanged sentence
Stock-based compensation
−Removed: Deferred income tax expense (benefit)
+Added: Deferred income tax
+Added: Loss on fair value adjustment of fair value hedges
Net change in
Accrued interest receivable
−Removed: Mortgage servicing rights
Accrued expenses and other liabilities
8 unchanged sentences
Loan originations and principal collections, net
−Removed: Net decrease (increase) in net investment in direct financing leases
−Removed: Proceeds from sales of foreclosed assets
+Added: Net decrease in net investment in direct financing leases
+Added: Proceeds from sales of OREO and foreclosed assets
Proceeds from sales of fixed assets
4 unchanged sentences
Advances from FHLB and other borrowings
−Removed: Payments on long-term FHLB and other borrowings
−Removed: Proceeds from issuance of common stock net of conversion costs
−Removed: Loan to ESOP for purchase of common stock
+Added: Payments on FHLB and other borrowings
+Added: Cash dividends declared and paid
+Added: Purchases of treasury stock
Net Cash from Financing Activities
Net Change in Cash and Cash Equivalents
−Removed: Cash and Cash Equivalents at Beginning of Year
−Removed: Cash and Cash Equivalents at End of Year
+Added: Cash and Cash Equivalents at Beginning of Period
+Added: Cash and Cash Equivalents at End of Period
See Notes to Consolidated Financial Statements
6 unchanged sentences
Texas Community Bancshares, Inc.
−Removed: (the “Company”), a Maryland corporation and registered bank holding company, was incorporated on March 5, 2021 to become the holding company for Mineola Community Bank, SSB (the “Bank”) upon the conversion of Mineola Community Mutual Holding Company (“MHC”) from a mutual holding company to a stock holding company (the “Conversion”).
−Removed: The Conversion was completed on July 14, 2021.
−Removed: The Company’s shares began trading on the NASDAQ under the symbol TCBS on July 15, 2021.
−Removed: In connection with the Conversion, the Company acquired 100 % ownership of the Bank and the Company offered and sold 3,207,759 shares of its common stock at $ 10.00 per share, for gross offering proceeds of $ 32,078 .
−Removed: The cost of the Conversion and issuance of common stock was approximately $ 1,684 , which was deducted from the gross offering proceeds.
−Removed: The Company also contributed 50,000 shares of its common stock and $ 75 of cash to Texas Community Bancshares Foundation, Inc.
−Removed: (the “Foundation”), a charitable foundation formed in connection with the Conversion.
−Removed: The Bank’s ESOP purchased 260,621 shares of the common stock sold by the Company, which was 8 % of the 3,257,759 shares of common stock issued by the Company, including the shares contributed to the Foundation.
−Removed: The ESOP purchased the shares using a loan from the Company.
−Removed: The Company contributed $ 15,276 of the net proceeds from the offering to the Bank, loaned $ 2,606 of the net proceeds to the ESOP, contributed $ 75 to the Foundation and retained approximately $ 12,436 of the net proceeds.
−Removed: Following the Conversion, voting rights in the Company are held and exercised exclusively by the shareholders of the Company.
−Removed: Deposit account holders continue to be insured by the FDIC.
−Removed: In connection with the Conversion, liquidation accounts were established by the Company and the Bank in an aggregate amount equal to (i) the MHC’s ownership interest in the shareholders’ equity of Mineola Community Financial Group, Inc.
−Removed: (the former subsidiary holding company of the Bank) as of the date of the latest statement of financial condition included in the Company’s definitive prospectus dated May 14, 2021, plus (ii) the value of the net assets of the MHC as of the date of the MHC’s latest statement of financial condition before the consummation of the Conversion (excluding the MHC’s ownership interest in Mineola Community Financial Group, Inc.).
−Removed: Each eligible account holder and supplemental eligible account holder is entitled to a proportionate share of the liquidation accounts in the event of a liquidation of (i) the Company and the Bank or (ii) the Bank, and only in such events.
−Removed: This share will be reduced if the eligible account holder’s or supplemental account holder’s deposit balance falls below the amounts on the date of record and will cease to exist if the account is closed.
−Removed: The liquidation account will never be increased despite any increase after the Conversion in the related deposit balance.
−Removed: The Bank may not pay a dividend on its capital stock if the effect thereof would cause retained earnings to be reduced below the liquidation account amount or regulatory capital requirements.
−Removed: In addition, the Company is subject to certain regulations related to the payment of dividends and the repurchase of its capital stock.
−Removed: The Conversion was accounted for as a change in corporate form with the historic basis of the Bank’s assets, liabilities and equity unchanged as a result.
−Removed: The Bank’s primary source of revenue is providing loans and banking services to consumers and commercial customers in Mineola, Texas, and the surrounding area and the Dallas Fort Worth Metroplex.
+Added: (the “Company”), a Maryland corporation and registered bank holding company, was incorporated on March 5, 2021, and became the holding company for Broadstreet Bank, SSB (the “Bank”), formerly known as Mineola Community Bank, SSB prior to December 4, 2023, as part of the mutual to stock conversion of the former Mineola Community Mutual Holding Company (“MHC”), which was completed on July 14, 2021.
+Added: The Company’s shares trade on the NASDAQ under the symbol TCBS.
+Added: Voting rights in the Company are held and exercised exclusively by the shareholders of the Company.
+Added: The Company’s primary source of revenue is providing loans and banking services to consumers and commercial customers in Mineola, Texas, and the surrounding area and the Dallas Fort Worth Metroplex.
The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States of America (GAAP) and to general practices of the banking industry.
1 unchanged sentence
Principles of Consolidation
−Removed: The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, which include Mineola Community Bank, S.S.B.
−Removed: and its wholly-owned subsidiary Mineola Financial Service Corporation,
−Removed: Texas Community Bancshares, Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2022 and 2021
−Removed: (Amounts in thousands, except for share and per share data)
−Removed: which is not actively being utilized.
+Added: The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, which include Broadstreet Bank, SSB and its wholly-owned subsidiary Mineola Financial Service Corporation, which is not actively being utilized.
All significant intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates
−Removed: In preparing consolidated financial statements in conformity with generally accepted accounting principles in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition and reported amounts of revenues and expenses during the reporting period.
+Added: In preparing consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition and reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
−Removed: Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan and lease losses.
+Added: Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses.
Significant Group Concentration of Credit Risk
4 unchanged sentences
The Company does not have any other significant concentrations to any one industry or customer.
+Added: Recently Adopted Accounting Pronouncements
+Added: The Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326):
+Added: Measurement of Credit Losses on Financial Instruments (“ASC 326”), effective January 1, 2023.
+Added: The guidance replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology.
+Added: The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities.
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2023 and 2022
+Added: (Amounts in thousands, except for share and per share data)
+Added: It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credits, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with Topic 842 on leases.
+Added: ASC 326 requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses as well as the credit quality and underwriting standards of a company’s portfolio.
+Added: In addition, ASC 326 made changes to the accounting for available-for-sale debt securities.
+Added: One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities management does not intend to sell or believes that it is more likely than not they will not be required to sell.
+Added: The Company adopted ASC 326 using the modified retrospective method for loans and off-balance-sheet (“OBS”) credit exposures.
+Added: Results for reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP.
+Added: The Company recorded a one-time cumulative-effect adjustment to the allowance for credit losses of $ 1,025 which was recognized through an $ 810 adjustment to retained earnings, net of tax.
+Added: This adjustment brought the beginning balance of the allowance for credit losses to $ 2,780 as of January 1, 2023.
+Added: In addition, the Company recorded a $ 254 allowance on unfunded commitments which was recognized through a $ 200 adjustment to retained earnings, net of tax.
+Added: The Company adopted ASC 326 using the prospective transition approach for financial assets purchased with credit deterioration (“PCD”) that were previously classified as purchased credit impaired (“PCI”) and accounted for under ASC 310-30.
+Added: As of December 31, 2022, the Company did not hold any purchased loans with deteriorated credit quality.
+Added: Therefore, the Company did not have any PCI loans upon adoption of ASC 326 as of January 1, 2023.
+Added: The Company adopted ASC 326 using the prospective transition approach for debt securities for which other-than-temporary impairment had been recognized prior to January 1, 2023.
+Added: As of December 31, 2022, the Company did not have any other-than-temporarily impaired investment securities.
+Added: Therefore, upon adoption of ASC 326, the Company determined that an allowance for credit losses on available-for-sale securities was not deemed necessary.
+Added: The following table illustrates the impact of the adoption of ASC 326:
+Added: Allowance for credit losses on loans
+Added: Allowance for credit losses on OBS credit exposures (included in other liabilities)
+Added: The Company adopted ASU 2022-02, Financial Instruments – Credit Losses (Topic 326):
+Added: Troubled Debt Restructurings and Vintage Disclosures , effective January 1, 2023.
+Added: The additional disclosures are included in Note 4 – Loans and Leases on a prospective basis and include loan modifications where the contractual payment terms of the borrower’s loan agreement were modified through a refinancing or restructuring.
+Added: Modifications that do not impact the contractual payment terms, such as covenant waivers, insignificant payment deferrals, and any modifications made to loans carried at fair value are not included in the disclosures.
+Added: The Company uses various indicators to identify borrowers in financial difficulty.
+Added: Consumer loan borrowers that are delinquent and commercial loan borrowers that are rated substandard or worse are the primary criteria used to identify borrowers who are experiencing financial difficulty.
+Added: If a borrower is current at the time of modification, the loan generally remains a performing loan as long as there is
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2023 and 2022
+Added: (Amounts in thousands, except for share and per share data)
+Added: demonstrated performance prior to the modification, and payment in full under the modified terms is expected.
+Added: Otherwise, the loan is placed on nonaccrual status and reported as nonperforming until there is sustained repayment performance for a reasonable period, which is generally at least six consecutive months.
+Added: Prior to the adoption of ASC 326, when the Company restructured a loan to a borrower that was experiencing financial difficulty and granted a concession that it would not otherwise consider, a “troubled debt restructuring” (“TDR”) results and the Bank classified the loan as a TDR.
Cash and Cash Equivalents
6 unchanged sentences
Interest Bearing Deposits in Banks
−Removed: Interest bearing deposits in banks are carried at cost.
+Added: Interest bearing deposits in banks mature within three to six months and are carried at cost.
Debt Securities
Debt securities that management has the positive intent and ability to hold to maturity are classified as “held to maturity” and recorded at amortized cost.
−Removed: Debt securities not classified as held to maturity are classified as “available for sale” and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive loss.
+Added: Debt securities not classified as held to maturity are classified as “available for sale” and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss).
Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities.
−Removed: Declines in the fair value of held to maturity and available for sale securities below their cost that are deemed to be other than temporary, if any, are reflected in earnings as realized losses.
−Removed: In determining whether other-than-temporary impairment exists, management considers many factors, including (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) the
+Added: Held to Maturity Securities
+Added: Beginning January 1, 2023, the Company evaluates all securities quarterly to determine if any securities in a loss
+Added: position require a provision for credit losses in accordance with ASC 326.
+Added: The Company first assesses whether it intends to sell or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis.
+Added: If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through net income.
+Added: For securities that do not meet this criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors.
+Added: In making this assessment, the Company considers the extent to which fair value is less than amortized cost, changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors.
+Added: If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security.
+Added: If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the
Texas Community Bancshares, Inc.
3 unchanged sentences
(Amounts in thousands, except for share and per share data)
−Removed: intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.
−Removed: Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.
−Removed: Investments in other restricted stock are carried at cost.
−Removed: Any changes to the cost basis of these investments are recorded in the statements of income.
−Removed: These investments are reviewed annually to determine if an impairment charge is necessary.
−Removed: Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation.
−Removed: 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 December 31, 2022 and 2021, no impairment charges were recorded for any debt security.
−Removed: Federal Home Loan Bank Stock
−Removed: The Company’s investment in Federal Home Loan Bank stock is a restricted investment carried at cost ($ 100 per share par value), which approximates its fair value.
+Added: credit loss, limited by the amount that the fair value is less than the amortized cost basis.
+Added: Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income (loss).
+Added: Changes in the allowance for credit losses are recorded as provision for or (reduction of) provision for credit losses.
+Added: Losses are charged against the allowance when management believes the uncollectability of a security is confirmed or when either of the criteria regarding intent or requirement to sell is met.
+Added: For the year ended December 31, 2023, the Company determined no provision for credit losses on securities was necessary.
+Added: Restricted Investments Carried at Cost
+Added: The Company’s primary restricted investment is Federal Home Loan Bank stock carried at cost ($ 100 per share par value), which approximates its fair value.
As a member of the FHLB system, the Company is required to maintain a minimum level of investment in FHLB stock based on specific percentages of its outstanding FHLB advances.
1 unchanged sentence
Stock redemptions are made at the discretion of FHLB.
−Removed: Due to requirements for additional advances for the year ended December 31, 2022 there were purchases and dividend reinvestments of $ 583 and $ 28 , respectively.
−Removed: For the year ended December 31, 2021, there were purchases of $ 13 due to requirements for additional advances.
+Added: Due to requirements for additional advances, there were purchases of $ 706 and dividend reinvestments of $ 150 for the year ended December 31, 2023, and there were purchases and dividend reinvestments of $ 583 and $ 28 , respectively, for the year ended December 31, 2022.
+Added: Both cash and stock dividends are reported as income.
There were no sales during 2023 or 2022.
1 unchanged sentence
As of December 31, 2023 or 2022, no impairment charges were recorded.
+Added: Other restricted investments are carried at cost.
+Added: Any changes to the cost basis of these investments are recorded in the consolidated statements of operations.
Loans and Leases
7 unchanged sentences
Unearned income is amortized to interest income using a level yield methodology.
+Added: Accrued interest receivable on loans totaled $ 1,127 as of December 31, 2023, and was reported in accrued interest receivable on the consolidated statement of financial condition and is excluded from the estimate of credit losses.
+Added: Interest income is accrued on the unpaid principal balance.
The Company makes disclosures of loans and other financing receivables and the related allowance in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 310, Receivables.
10 unchanged sentences
Under this accounting guidance, the allowance is presented by portfolio segment.
−Removed: Allowance for Loan and Lease Losses
−Removed: The allowance for credit losses, which includes the allowance for loan and lease losses and the reserve for unfunded lending commitments, represents management’s estimate of probable losses inherent in the Company’s lending activities.
−Removed: The allowance for loan and lease losses does not include amounts related to the accrued interest receivable as any accrued interest receivable is reversed when a loan is placed on nonaccrual status.
−Removed: The allowance for loan and lease losses represents the estimated probable credit losses in funded consumer and commercial loans while the reserve for unfunded lending commitments, including standby letters of credit and binding unfunded loan commitments, represents estimated probable credit losses on these unfunded credit instruments based on utilization assumptions.
−Removed: Credit exposures deemed to be uncollectible are charged against these accounts.
−Removed: Cash recovered on previously charged off amounts is recorded as a recovery to these accounts.
−Removed: Management evaluates the adequacy of the allowance for credit losses based on the combined total of these two components.
−Removed: The Company performs periodic and systematic detailed reviews of its lending portfolios to identify credit risks and assess the overall collectability of those portfolios.
−Removed: The allowance on certain homogenous loan portfolios is based on aggregated portfolio segment evaluations.
−Removed: Loss models are utilized for these portfolios which consider a variety of factors including, but not limited to, historical loss experience, estimated defaults or foreclosures based on portfolio trends, delinquencies, bankruptcies, economic conditions and credit scores.
−Removed: The Company’s real estate portfolio segment is comprised primarily of homogenous loans secured by residential and commercial real estate.
−Removed: The amount of losses incurred in the homogenous loan pools is estimated based upon how many of the loans will default and the loss in the event of default.
−Removed: Using modeling methodologies, the Company estimates how many of the homogenous loans will default based on the individual loans’ attributes aggregated into pools of homogenous loans with similar attributes.
−Removed: The attributes that are most significant to the probability of default and are used to estimate default include the loan-to-value, borrower credit score, months since origination, geography, and present collection status.
−Removed: The estimate is based on the Company’s historical experience with the loan portfolio.
−Removed: The estimate is adjusted to reflect an assessment of environmental factors that are not reflected in the historical data, such as changes in real estate values, local and national economies, underwriting standards and the regulatory environment.
−Removed: The allowance on the remaining portfolio segments (agriculture, commercial, and consumer) is calculated using loss rates delineated by risk rating and product type.
−Removed: Factors considered when assessing loss rates include the value of the underlying collateral, the industry of the obligor, the obligor’s liquidity and other financial and qualitative factors.
−Removed: These statistical models are updated regularly for changes in economic and business conditions.
−Removed: Included in the analysis of these loan portfolios are reserves which are maintained to cover uncertainties that affect the Company’s estimate of probable losses including economic uncertainty and large single defaults.
−Removed: Nonperforming loans are reviewed in accordance with applicable accounting guidance on impaired loans and troubled debt restructurings (TDRs).
−Removed: If necessary, a specific allowance is established for these loans if they are deemed to be impaired.
−Removed: A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement.
−Removed: Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due.
−Removed: Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.
−Removed: Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all the
−Removed: Texas Community Bancshares, Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2022 and 2021
−Removed: (Amounts in thousands, except for share and per share data)
−Removed: circumstances surrounding the loan and the borrower, including the length of delay, the reason for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.
−Removed: Impairment is measured on a loan by loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.
−Removed: For such loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of the loan.
−Removed: The general component covers non-classified loans and is based on historical loss experience adjusted for qualitative factors.
−Removed: An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses.
−Removed: The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.
−Removed: Large groups of smaller balance homogeneous loans are collectively evaluated for impairment.
−Removed: Accordingly, the Company does not separately identify individual consumer and residential loans for impairment disclosures, unless such loans are subject of a restructuring agreement.
−Removed: In addition to the allowance for loan and lease losses, the Company also estimates probable losses related to unfunded lending commitments, such as letters of credit and financial guarantees, and binding unfunded loan commitments.
−Removed: Unfunded lending commitments are subject to individual reviews and are analyzed and segregated by risk according to the Company’s internal risk rating scale.
−Removed: These risk classifications, in conjunction with an analysis of historical loss experience, utilization assumptions, current economic conditions, performance trends within the portfolio and any other pertinent information, result in the estimation of the reserve for unfunded lending commitments.
−Removed: The allowance for loan and lease losses related to the loan portfolio is reported as a part of loans in the consolidated statements of condition whereas the reserve for unfunded lending commitments is reported on the consolidated statements of condition in accrued expenses and other liabilities.
−Removed: Provisions for credit losses related to the loan portfolio and unfunded lending commitments is reported separately in the consolidated statements of income.
+Added: Allowance for Credit Losses
+Added: The Company uses the weighted average remaining maturity (“WARM”) method to estimate expected losses for all of Company’s loan pools.
+Added: These pools are as follows:
+Added: construction & land;
+Added: 1-4 residential & multi-family real estate;
+Added: commercial real estate;
+Added: and consumer and other.
+Added: The loan portfolio pools were selected in order to generally align with the loan categories specified in the quarterly call reports required to be filed with the Federal Financial Institutions Examination Council.
+Added: For each of these loan pools, the Company calculates an average annual loss rate and estimates future outstanding balances based on contractual maturities and estimated prepayments.
+Added: The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data.
+Added: Relevant data to support the Company’s estimates of lifetime expected credit losses is maintained through internal and external information.
+Added: The CECL model leverages the use of publicly available call report data, which allows the use of external information from peers to supplement the Company’s own historical data.
+Added: The loss rate is based on historical loss rates for the peer group and the Company.
+Added: Due to internal loss rates being low, a blended historical loss rate of 75% peer group and 25% Company was used.
+Added: The weighted average remaining life is determined based on contracted loan payments, expected prepayments and maturity dates.
+Added: The allowance model uses data from the St.
+Added: Louis Federal Reserve Economic Database for reasonable and supportable forecasts.
+Added: Management has determined that between years one and two represents a reasonable and supportable forecast period and reverts to a historical loss rate in years three or four depending on the loan type.
+Added: Management leverages economic projections from the St.
+Added: Louis Federal Reserve Economic Database (FRED) to inform its loss driver forecasts.
+Added: Other internal and external indicators of economic forecasts are also considered by management when developing the forecast metrics.
+Added: Prior to the adoption of ASU 2016-13, the allowance for credit losses on loans was established through a provision for loan losses charged to expense, which represented management’s best estimate of inherent losses that had been incurred within the existing portfolio of loans.
+Added: Allowance for Credit Losses on Off-Balance Sheet Credit Exposures
+Added: The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless the obligation is unconditionally cancellable by the Company.
+Added: The allowance for credit losses on off-balance sheet credit exposures is adjusted through credit loss expense .
+Added: The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its expected life.
+Added: Estimates are influenced by historical losses, economic conditions and reasonable and supportable forecasts described in the preceding section for the allowance for credit losses on loans receivable.
Nonperforming Loans, Charge-Offs and Delinquencies
2 unchanged sentences
Interest and fees continue to accrue on past due loans until the date the loan goes into nonaccrual status, if applicable.
−Removed: The outstanding balance of real estate secured loans, including all classes of financing receivables within the real estate portfolio segment, that is in excess of the estimated property value, less estimated costs to sell, is generally charged off no later than the end of the month in which the account becomes 180 days past due.
−Removed: The estimated property value, less estimated costs to sell, is determined utilizing appraisals or broker price opinions of the fair value of the collateral.
−Removed: The outstanding balance of loans within the remaining loan segments (agriculture, commercial, and consumer) are generally charged off no later than the end of the month in which the account becomes 120 days past due.
−Removed: For secured loans, accounts are written down to the collateral value.
Texas Community Bancshares, Inc.
3 unchanged sentences
(Amounts in thousands, except for share and per share data)
+Added: The outstanding balance of real estate secured loans, including all classes of financing receivables within the real estate portfolio segment, that is in excess of the estimated property value, less estimated costs to sell, is generally charged off no later than the end of the month in which the account becomes 180 days past due.
+Added: The estimated property value, less estimated costs to sell, is determined utilizing appraisals or broker price opinions of the fair value of the collateral.
+Added: The outstanding balance of loans within the remaining loan segments (agriculture, commercial, and consumer) are generally charged off no later than the end of the month in which the account becomes 120 days past due.
+Added: For secured loans, accounts are written down to the collateral value.
The fair value of the collateral is estimated by management based on current financial information, inspections, and appraisals.
5 unchanged sentences
These loans may be restored to accrual status when all principal and interest is current and full repayment of the remaining contractual principal and interest is expected, or when the loan otherwise becomes well-secured and is in the process of collection.
−Removed: Loans whose contractual terms have been modified in a TDR and are current at the time of the restructuring remain on accrual status if there is demonstrated performance prior to the restructuring and repayment in full under the restructured terms is expected.
−Removed: Otherwise, the loans are placed on nonaccrual status and reported as nonperforming until there is sustained repayment performance for a reasonable period, generally six months.
−Removed: TDRs that are on accrual status are reported as performing TDRs through the end of the calendar year in which the restructuring occurred or the year in which the loans are returned to accrual status.
−Removed: In addition, if accruing TDRs bear less than a market rate of interest at the time of modification, they are reported as performing TDRs throughout the remaining lives of the loans.
−Removed: The allowance for loan and lease losses is established as losses are estimated to have occurred through a provision for loan and lease losses charged to earnings.
−Removed: Loan and lease losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed.
−Removed: Subsequent recoveries, if any, are credited to the allowance.
−Removed: The allowance for loan and lease losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans and leases in light of historical experience, the nature and volume of the loan and lease portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions.
−Removed: This evaluation is inherently subjective as it requires estimates that are susceptible to significant revisions as more information becomes available.
−Removed: Troubled Debt Restructured Loans
−Removed: A TDR loan is a loan which the Company, for reasons related to a borrower’s financial difficulties, grants a concession to the borrower that the Company would not otherwise consider.
−Removed: The loan terms which have been modified or restructured due to a borrower’s financial difficulty include, but are not limited to, a reduction in the stated interest rate;
−Removed: an extension of the maturity at an interest rate below current market;
−Removed: a reduction in the face amount of the debt;
−Removed: a reduction in the accrued interest;
−Removed: or re-aging, extensions, deferrals, renewals and rewrites.
−Removed: A TDR loan would generally be considered impaired.
Wholesale Lending
The Company has entered into a wholesale lending agreement with a wholesale lender and correspondent bank, TIB.
−Removed: The Company originates the loan and interacts with the customer while the wholesale lender underwrites, funds, closes and services the loan.
+Added: The Company facilitates the loan application process and interacts with the customer while the wholesale lender underwrites, funds, closes and services the loan.
The Company receives a fee from the wholesale lender at closing for the services provided which is included in noninterest income.
2 unchanged sentences
Such financial instruments are recorded when they are funded.
+Added: Derivative Loan Commitments
+Added: Mortgage loan commitments that relate to the origination of a mortgage that will be held for sale upon funding are considered derivative instruments under the derivatives and hedging accounting guidance (FASB ASC 815, Derivatives and Hedging).
+Added: Loan commitments that are derivatives are recognized at fair value on the consolidated statements of financial condition in other assets and other liabilities with changes in their fair values recorded in noninterest income.
+Added: Forward Loan Sale Commitments
+Added: The Company evaluates all loan sales agreements to determine whether they meet the definition of a derivative under FASB ASC 815 as facts and circumstances may differ significantly.
+Added: If agreements qualify, to protect against the price risk inherent in derivative loan commitments, the Company uses "best efforts" forward loan sale commitments to mitigate the risk of potential decreases in the values of loans that would result from the exercise of the derivative loan commitments.
+Added: Accordingly, forward loan sale commitments are recognized at fair value on the consolidated statements of financial condition in other assets and liabilities with changes in their fair values recorded in other noninterest income.
Texas Community Bancshares, Inc.
3 unchanged sentences
(Amounts in thousands, except for share and per share data)
−Removed: Derivative Loan Commitments
−Removed: Mortgage loan commitments that relate to the origination of a mortgage that will be held for sale upon funding are considered derivative instruments under the derivatives and hedging accounting guidance (FASB ASC 815, Derivatives and Hedging).
−Removed: Loan commitments that are derivatives are recognized at fair value on the consolidated statements of condition in other assets and other liabilities with changes in their fair values recorded in noninterest income.
−Removed: Forward Loan Sale Commitments
−Removed: The Company evaluates all loan sales agreements to determine whether they meet the definition of a derivative under FASB ASC 815 as facts and circumstances may differ significantly.
−Removed: If agreements qualify, to protect against the price risk inherent in derivative loan commitments, the Company uses "best efforts"
−Removed: forward loan sale commitments to mitigate the risk of potential decreases in the values of loans that would result from the exercise of the derivative loan commitments.
−Removed: Accordingly, forward loan sale commitments are recognized at fair value on the consolidated statements of condition in other assets and liabilities with changes in their fair values recorded in other noninterest income.
The Company estimates the fair value of its forward loan sales commitments using a methodology similar to that used for derivative loan commitments.
5 unchanged sentences
Subsequent to purchase, the policies are periodically adjusted for changes in cash surrender value.
−Removed: The adjustment to cash surrender value increases or decreases the carrying value of the policies and is recorded as income or expense on the consolidated statements of income.
+Added: The adjustment to cash surrender value increases or decreases the carrying value of the policies and is recorded as income or expense on the consolidated statements of operations.
Foreclosed Assets
Assets acquired through, or in lieu of, loan foreclosure are initially recorded at fair value less estimated costs to sell at the date of foreclosure.
−Removed: All write-downs based on the asset’s fair value at the date of acquisition are charged to the allowance for loan and lease losses.
+Added: All write-downs based on the asset’s fair value at the date of acquisition are charged to the allowance for credit losses.
After foreclosure, property held for sale is carried at the lower of the new cost basis or estimated fair value less costs to sell.
1 unchanged sentence
Costs of significant property improvements are capitalized, whereas costs related to holding property are expensed.
−Removed: Valuations are periodically performed by management, and any subsequent write-downs are recorded as a charge to operations, if necessary, to reduce the carrying value of the property to the lower of its cost or fair value less costs to sell.
−Removed: Texas Community Bancshares, Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2022 and 2021
−Removed: (Amounts in thousands, except for share and per share data)
+Added: Valuations are periodically performed by management, and any subsequent write-downs are recorded as a charge to earnings, if necessary, to reduce the carrying value of the property to the lower of its cost or fair value less costs to sell.
Premises and Equipment
8 unchanged sentences
The Company does not record leases on the consolidated statements of financial condition that are classified as short term (less than one year).
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2023 and 2022
+Added: (Amounts in thousands, except for share and per share data)
At lease inception, the Company determines the lease term by considering the minimum lease term and all optional renewal periods that the Company is reasonably certain to renew.
3 unchanged sentences
Operating lease expense consists of a single lease cost allocated over the remaining lease term on a straight-line basis, variable lease payments not included in the lease liability, and any impairment of the right-of-use asset.
−Removed: Rent expense and variable lease expense are included in occupancy and equipment expense on the Company's consolidated statements of income.
+Added: Rent expense and variable lease expense are included in occupancy and equipment expense on the Company's consolidated statements of operations.
The Company has elected to treat property leases that include both lease and non-lease components as a single component and account for it as a lease.
6 unchanged sentences
Impairment is recognized through a valuation allowance for an individual stratum, to the extent that fair value is less than the capitalized amount for the stratum.
−Removed: Texas Community Bancshares, Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2022 and 2021
−Removed: (Amounts in thousands, except for share and per share data)
Intangible Assets
11 unchanged sentences
A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information.
−Removed: The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment.
+Added: The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2023 and 2022
+Added: (Amounts in thousands, except for share and per share data)
+Added: reporting date and is subject to management’s judgment.
Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not some portion or all of a deferred tax asset will not be realized.
4 unchanged sentences
federal jurisdiction and the State of Texas.
+Added: Treasury Stock
+Added: Treasury stock is accounted for using the cost method and consists of 174,842 shares at December 31, 2023.
+Added: The Company had no treasury shares at December 31, 2022.
Advertising costs are expensed as incurred.
5 unchanged sentences
Services within the scope of Topic 606 include service charges on deposits, interchange income, and the sale of foreclosed assets.
−Removed: Texas Community Bancshares, Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2022 and 2021
−Removed: (Amounts in thousands, except for share and per share data)
A description of the Company’s revenue streams accounted for under Topic 606 follows:
11 unchanged sentences
When the Company finances the sale of a foreclosed asset to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable.
−Removed: Once these criteria are met, the foreclosed asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer.
+Added: Once these criteria are met, the foreclosed asset is derecognized and the gain or loss on sale is recorded upon the transfer of control
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2023 and 2022
+Added: (Amounts in thousands, except for share and per share data)
+Added: of the property to the buyer.
In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain (loss) on sale if a significant financing component is present.
−Removed: Comprehensive Loss
−Removed: Comprehensive loss consists of net income and other comprehensive loss.
−Removed: Other comprehensive loss includes unrealized gains and losses on securities available-for-sale.
+Added: The Company adopted ASU 2022-01, Derivatives and Hedging (Topic 815) – Fair Value Hedging – Portfolio Layer Method, as of January 1, 2023.
+Added: The adoption of this standard did not have a material effect on the Company’s operating results or financial condition as of December 31, 2022.
+Added: At the inception of a derivative contract, the Company designates the derivatives as one of the three types based on the Company’s intentions and belief as to likely effectiveness as a hedge.
+Added: These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), or (3) an instrument with no hedging designation (“stand-alone derivative”).
+Added: For a fair value hedge, the gain or loss on the derivate, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in current earnings as fair values change.
+Added: For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income (loss) and is reclassified into earnings in the same periods during which the hedged transaction affects earnings.
+Added: Changes in the fair value of derivatives not designated or that do not qualify for hedge accounting are reported currently in earnings, as non-interest income.
+Added: Accrued settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged.
+Added: Accrued settlements on derivatives not designated or that do not qualify for hedge accounting are reported in non-interest income.
+Added: Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged.
+Added: The Company formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions at the inception of the hedging relationship.
+Added: This documentation includes linking fair value or cash flow hedges to specific assets and liabilities on the statement of financial condition or to specific firm commitments or forecasted transactions.
+Added: The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in fair values or cash flows of the hedged items.
+Added: The Company discontinues hedge accounting when it determines that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative is settled or terminates, a hedged forecasted transaction is no longer probable, a hedged firm commitment is no longer firm, or treatment of the derivative as a hedge is no longer appropriate or intended.
+Added: When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as non-interest income.
+Added: When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability.
+Added: When a cash flow hedge is discontinued but the hedged cash flows or forecasted transactions are still expected to occur, gains or losses that were accumulated in other comprehensive income (loss) are amortized into earnings over the same periods which the hedged transactions will affect earnings.
+Added: The Company is exposed to losses if a counterparty fails to make its payments under a contract in which the Company is in the net receiving position.
+Added: The Company anticipates that the counterparties will be able to fully satisfy their obligations under the agreements.
+Added: All the contracts to which the Company is a party settle monthly or semi-annually.
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2023 and 2022
+Added: (Amounts in thousands, except for share and per share data)
+Added: Comprehensive Income (Loss)
+Added: Comprehensive income (loss) consists of net (loss) income and other comprehensive income (loss).
+Added: Other comprehensive income (loss) includes unrealized gains (losses) on securities available-for-sale.
Stock Incentive Plan
−Removed: 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: Compensation cost is recognized for stock options and restricted stock awards issued to directors and executive management, based on the fair value of these awards at the date of the grant.
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.
1 unchanged sentence
For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.
+Added: Reclassifications
+Added: Certain reclassification s of amounts previously reported have been made to the accompanying financial statements to maintain consistency between periods presented.
+Added: The reclassifications had no impact on net income or shareholders' equity.
Subsequent Events
Management has evaluated subsequent events through March 27, 2024, which was the date the accompanying consolidated financial statements were issued.
−Removed: On January 2, 2023, the Company purchased two buildings adjacent to the bank for $ 550 .
−Removed: On February 22, 2023, the Board of Directors of the Company approved the issuance of a first quarter dividend of $ 0.02 per share on outstanding common stock to stockholders of record as of the close of business on March 10, 2023 and payable on March 24, 2023.
+Added: On January 16, 2024, the Bank opened the Lindale branch in a new building and on February 5, 2024, the Bank opened a new branch in Tyler.
+Added: On February 28, 2024, the Company declared a quarterly cash dividend of $ 0.04 per share of common stock.
+Added: The dividend will be payable on or about March 28, 2024 to stockholders of record as of the close of business on March 14, 2024.
+Added: On February 28, 2024, the Company issued stock-based compensation to a member of management for a total of 23,455 shares of restricted stock and 58,639 restricted stock options.
+Added: The same number of awards had been forfeited in 2023.
+Added: On March 15, 2024, the Company sold 36 real estate loans with an amortized cost basis of $ 7,530 at a loss of $ 1,008 as part of a balance sheet restructuring strategy to replace these loans with higher yielding assets with a shorter weighted average life.
+Added: Subsequent to December 31, 2023 and through March 27, 2024, we purchased 11,000 shares of common stock at an average price of $ 14.03 pursuant to the Stock Repurchase Plan.
+Added: Note 2 - Earnings Per Share
+Added: Basic earnings per share is computed by dividing net (loss) income 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 and February 28, 2023, during the applicable period.
+Added: Diluted earnings per share is
Texas Community Bancshares, Inc.
3 unchanged sentences
(Amounts in thousands, except for share and per share data)
−Removed: On February 28, 2023, the Company issued stock-based compensation to certain members of management for a total of 76,880 stock award shares and 192,204 stock options.
−Removed: Note 2 - 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 and restricted stock awards granted on August 31, 2022, during the applicable period.
−Removed: Diluted earnings per share is computed using the weighted-average number of shares determined for the basic earnings per common share computation plus the dilutive effect of stock compensation using the treasury stock method.
+Added: 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.
The following table presents a reconciliation of the number of shares used in the calculation of basic and diluted earnings per common share:
+Added: Net (Loss) Income
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
−Removed: Restricted stock awards for 39,084 shares of common stock were not considered in computing diluted earnings per share for 2022, because they were antidilutive.
−Removed: Stock options for 97,728 shares of common stock were not considered in computing diluted earnings per share for 2022, because they were nonvested.
+Added: Basic and dilutive earnings (loss) per share
+Added: Nonvested restricted stock awards for 84,697 and 39,084 shares of common stock were not considered in computing diluted earnings per share for 2023 and 2022, respectively, because they were antidilutive.
+Added: Stock options for 211,747 and 97,728 shares of common stock were not considered in computing diluted earnings per share for 2023 and 2022, because they were nonvested.
+Added: Stock options for 19,546 shares of common stock have vested, however, were not considered in computing diluted earnings per share for 2023, because they were antidilutive.
Texas Community Bancshares, Inc.
12 unchanged sentences
Corporate bonds
−Removed: Government and agency
Total securities available for sale
3 unchanged sentences
State and municipal
+Added: Government and agency
Total securities held to maturity
13 unchanged sentences
Total securities held to maturity
−Removed: During the year ended December 31, 2022, the Company had sales of available for sale securities of $ 10,821 with a loss of $ 29 .
−Removed: During the year ended December 31, 2021, the Bank had no sales of available for sale securities or held to maturity securities.
−Removed: At December 31, 2022 and 2021, securities with a carrying value of $ 3,162 and $ 2,745 , respectively, were pledged to secure public deposits and for other purposes required or permitted by law.
+Added: During the years ended December 31, 2023 and 2022, the Company had sales of available for sale securities with an amortized cost basis of $ 19,767 with a loss of $ 1,734 and $ 10,821 with a loss of $ 29 , respectively.
+Added: At December 31, 2023 and 2022, securities with a fair value of $ 14,152 and $ 3,162 , respectively, were pledged to secure public deposits and for other purposes required or permitted by law.
Texas Community Bancshares, Inc.
31 unchanged sentences
Government and agency (1,13)
+Added: At December 31, 2023, the Company had investment securities with approximately $ 9,593 in unrealized losses, which have been in continuous loss positions for more than twelve months.
+Added: The Company’s assessments indicated that the cause of the market depreciation was primarily the change in market interest rates and not the issuer’s financial condition or downgrades by rating agencies.
+Added: In addition, approximately 12.4 % of the principal balance from the Company’s investment portfolio will mature and be repaid to the Company within five years or less.
+Added: As a result, the Company has the ability and intent to hold such securities until maturity.
Texas Community Bancshares, Inc.
3 unchanged sentences
(Amounts in thousands, except for share and per share data)
+Added: The Company monitors credit quality of debt securities held to maturity through the use of credit rating.
+Added: The Company monitors the credit rating on a continual basis.
+Added: The following table summarizes bond ratings for the Company’s held to maturity portfolio, based upon amortized cost, issued by state and political subdivisions and other securities as of December 31, 2023:
+Added: mortgage-backed
+Added: U.S Government
+Added: As of December 31, 2023 there were no securities held to maturity on nonaccrual or past due.
Mortgage-backed Securities and Collateralized Mortgage Obligations
−Removed: The unrealized losses on the Company’s investments in residential mortgage-backed securities and collateralized mortgage obligations were caused by interest rate increases and decreases in prepayment speeds.
−Removed: Interest rates have risen sharply throughout 2022 causing increased unrealized losses on securities.
−Removed: The Company has no plans to sell these securities and will continue to monitor the effect of the unrealized losses on the financial statements.
−Removed: The contractual cash flows of many of these investments are guaranteed by agencies of the U.S.
−Removed: Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost bases of the Company’s investments.
−Removed: Because the decline in 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 December 31, 2022 or December 31, 2021.
+Added: The unrealized losses on the Company's investment in mortgage-backed securities and collateralized mortgage obligations were caused by interest rate increases and increases in prepayment speeds.
+Added: The Company purchased these investments at a discount relative to its face amount, and the contractual cash flows of these investments are guaranteed by an agency of the U.S.
+Added: Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost basis of the Company's investments.
+Added: Because the decline in market value is attributable to changes in interest rates and prepayment speeds and not credit quality, and because the Company does not intend to sell the investments before recovery of their amortized cost basis, which may be maturity.
+Added: The unrealized losses on the Company’s investment in mortgage-backed securities have not been recognized into income and no allowance for credit losses established at December 31, 2023.
Government and Agency
−Removed: The unrealized losses on the Company’s investments in U.S.
−Removed: government and agency securities were caused by market interest rate increases.
−Removed: Interest rates have risen sharply throughout 2022 and caused increases in unrealized losses on securities.
−Removed: The Company has no plans to sell these securities and will continue to monitor the effect of the unrealized losses on the financial statements.
−Removed: The contractual cash flows of those investments are guaranteed by an agency of the U.S.
+Added: The unrealized losses on the Company's investment in U.S.
+Added: Government and agency securities have not been recognized into income and no allowance for credit losses established because the bonds are of high credit quality, management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery.
+Added: The decline in fair value is largely due to increases in interest rates and not credit quality and the fair value is expected to recover as the bonds approach maturity.
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 December 31, 2022 or December 31, 2021.
+Added: Therefore, an allowance for credit losses is deemed unnecessary at December 31, 2023.
Municipal Securities and Corporate Bonds
−Removed: The unrealized losses on the Company’s investments in state and municipal securities and corporate bonds were caused by market interest rate increases.
−Removed: Interest rates have risen sharply throughout 2022 and caused increases in unrealized losses on securities.
−Removed: The Company has no plans to sell these securities and will continue to monitor the effect of the unrealized losses on the financial statements.
+Added: The unrealized losses on the Company's investment in municipal securities and corporate bonds have not been recognized into income and no allowance for credit losses established because the bonds are of high credit quality, management does not intend to sell, and it is likely that management will not be required to sell the securities prior to their anticipated recovery.
+Added: The decline in fair value is largely due to increases in interest rates and not credit quality and the fair value is expected to recover as the bonds approach maturity.
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 December 31, 2022 or December 31, 2021.
−Removed: Other-than-temporary Impairment
−Removed: Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation.
−Removed: 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 December 31, 2022 and 2021, no investment securities were other-than-temporarily impaired.
+Added: Therefore, an allowance for credit losses is deemed unnecessary at December 31, 2023.
Texas Community Bancshares, Inc.
3 unchanged sentences
(Amounts in thousands, except for share and per share data)
+Added: Other-than-temporary Impairment
+Added: Prior to the adoption of ASC 326, management evaluated securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation.
+Added: 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.
+Added: As of December 31, 2022, no investment securities were other-than-temporarily impaired.
Note 4 - Loans and Leases
A summary of the balances of loans and leases follows:
+Added: Construction and land
+Added: 1-4 Residential and multi-family
+Added: Commercial Real Estate
+Added: Total real estate
Consumer and other
−Removed: Less allowance for loan and lease losses
+Added: Less allowance for credit losses
Loans and leases, net
−Removed: The following tables set forth information regarding the activity in the allowance for loan and lease losses for the years ended December 31, 2022 and 2021:
+Added: Direct financing leases of $ 36 and $ 64 are included in consumer and other loans at December 31, 2023 and 2022, respectively.
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2023 and 2022
+Added: (Amounts in thousands, except for share and per share data)
+Added: The following table set forth information regarding the activity in the allowance for credit losses for the year ended December 31, 2023:
December 31, 2023
−Removed: Allowance for loan and lease losses:
−Removed: Balance, January 1, 2022
+Added: Allowance for credit losses:
+Added: 1-4 Residential
+Added: & multi-family
+Added: Beginning balance prior to adoption of ASC 326
+Added: Impact of adopting ASC 326 on January 1, 2023
+Added: Provision for credit losses
+Added: Overage from off-balance sheet credit exposures
+Added: Loans charged-off
Balance, December 31, 2023
−Removed: Balance, December 31, 2022 allocated to loans and leases individually evaluated for impairment
−Removed: Balance, December 31, 2022 allocated to loans and leases collectively evaluated for impairment
+Added: Balance, December 31, 2023 allocated to loans and leases individually evaluated
+Added: Balance, December 31, 2023 allocated to loans and leases collectively evaluated
Loans and leases receivable:
−Removed: Balance, December 31, 2022 loans and leases individually evaluated for impairment
−Removed: Balance, December 31, 2022 loans and leases collectively evaluated for impairment
+Added: Balance, December 31, 2023 loans and leases individually evaluated
+Added: Balance, December 31, 2023 loans and leases collectively evaluated
Balance, December 31, 2023
4 unchanged sentences
(Amounts in thousands, except for share and per share data)
+Added: The following tables present the balances and activity in the allowance for credit losses as of and for the year ended December 31, 2022, and the allowance for credit losses and recorded investment in loans receivable based on portfolio segment by impairment method as of December 31, 2022.
+Added: Allocation of a portion of the allowance to one type of loans does not preclude its availability to absorb losses in other categories.
December 31, 2022
−Removed: Allowance for loan and lease losses:
+Added: Allowance for credit losses:
Balance, January 1, 2022
−Removed: Provision (credit)
Balance, December 31, 2022
December 31, 2022
−Removed: Allowance for loan and lease losses:
+Added: Allowance for credit losses:
Balance, December 31, 2022 allocated to loans and leases individually evaluated for impairment
4 unchanged sentences
Balance, December 31, 2022
+Added: The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing as of December 31, 2023:
+Added: with Allowance
+Added: Due Over 90 Days Still Accruing
+Added: Construction and land
+Added: 1‑4 Residential & multi-family
+Added: Commercial real estate
+Added: Consumer and other
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2023 and 2022
+Added: (Amounts in thousands, except for share and per share data)
+Added: The following table sets forth information regarding the nonaccrual status within the loan portfolio as of December 31, 2022.
+Added: Construction and land
+Added: 1‑4 Residential & multi-family
+Added: Commercial real estate
+Added: Consumer and other
+Added: The Company did not recognize any interest income on nonaccrual loans during the years ended December 31, 2023 or 2022.
+Added: The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2023:
+Added: 1-4 Residential & multi-family
+Added: Commercial real estate
+Added: The Company had $ 1,157 in collateral-dependent loans as of December 31, 2023.
+Added: Prior to adoption of ASC 326, a loan was considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan.
+Added: Impaired loans include nonperforming commercial loans but also include loans modified in accordance with ASC 310-20-5.
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2023 and 2022
+Added: (Amounts in thousands, except for share and per share data)
+Added: The following table sets forth information regarding impaired loans as of December 31, 2022:
+Added: With no related allowance
+Added: 1‑4 Residential & multi-family
+Added: Commercial real estate
+Added: Consumer and other
+Added: With a related allowance
+Added: 1-4 Residential & multi-family
+Added: Commercial real estate
+Added: Consumer and other
Internal Risk Categories
+Added: A loan is considered collateral-dependent when based on current information and events;
+Added: it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan.
+Added: Impaired loans include nonperforming loans (nonaccrual loans), loans performing but with deterioration that leads to doubt regarding collectability.
+Added: These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection.
+Added: Loans that do not share risk characteristics are evaluated on an individual basis.
+Added: For collateral-dependent loans where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the allowance for credit losses is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date.
+Added: When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the present value of expected cash flows from the operation of the collateral.
+Added: When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the fair value of the underlying collateral less estimated costs to sell.
+Added: The allowance for credit losses may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the loan.
The Company monitors credit quality within its portfolio segments based on primary credit quality indicators.
All of the Company’s loans and leases are evaluated using pass rated or reservable criticized as the primary credit quality indicator.
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2023 and 2022
+Added: (Amounts in thousands, except for share and per share data)
The term reservable criticized refers to those loans and leases that are internally classified or listed by the Company as special mention, substandard, doubtful or loss.
9 unchanged sentences
A protracted workout on these credits is a distinct possibility.
−Removed: Prompt corrective
−Removed: Texas Community Bancshares, Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2022 and 2021
−Removed: (Amounts in thousands, except for share and per share data)
−Removed: action is therefore required to strengthen the Company’s position, and/or to reduce exposure and to assure that adequate remedial measures are taken by the borrower.
+Added: Prompt corrective action is therefore required to strengthen the Company’s position, and/or to reduce exposure and to assure that adequate remedial measures are taken by the borrower.
Credit exposure becomes more likely in such credits and a serious evaluation of the secondary support to the credit is performed.
7 unchanged sentences
In addition to this primary credit quality indicator, the Company uses other credit quality indicators for certain types of loans.
−Removed: 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 years ended December 31, 2022 or 2021.
−Removed: The following table sets forth information regarding the internal classification of the loan and lease portfolio:
−Removed: December 31, 2022
−Removed: Construction and land
−Removed: 1‑4 Residential & multi-family
−Removed: Commercial real estate
−Removed: Consumer and other
−Removed: December 31, 2021
−Removed: Construction and land
−Removed: 1‑4 Residential & multi-family
−Removed: Commercial real estate
+Added: The Company evaluates the loan risk grading system definitions and allowance for credit loss methodology on an ongoing basis.
+Added: No significant changes were made during the year ended December 31, 2022.
Texas Community Bancshares, Inc.
3 unchanged sentences
(Amounts in thousands, except for share and per share data)
−Removed: Consumer and other
−Removed: The following table sets forth information regarding the credit risk profile based on payment activity of the loan and lease portfolio:
−Removed: December 31, 2022
−Removed: December 31, 2021
+Added: Based on the most recent analysis performed, the risk category of loans by class of loans as of December 31, 2023 and gross charge-offs for the year ended are as follows:
+Added: Term Loans Amortized Cost Basis by Origination Year
Construction and land
+Added: Special mention
+Added: Special mention
1-4 Residential & multi-family
+Added: Special mention
Commercial real estate
+Added: Special mention
+Added: Special mention
+Added: Special mention
Consumer and other
+Added: Special mention
+Added: Current period gross charge-offs
Texas Community Bancshares, Inc.
3 unchanged sentences
(Amounts in thousands, except for share and per share data)
−Removed: The following table sets forth information regarding the delinquencies not on nonaccrual within the loan and lease portfolio:
−Removed: December 31, 2022
−Removed: > 90 Days and
−Removed: Still Accruing
−Removed: Construction and land
−Removed: 1‑4 Residential & multi-family
−Removed: Commercial real estate
−Removed: Consumer and other
+Added: The following table sets forth information regarding the internal classification of the loan and lease portfolio:
December 31, 2022
−Removed: > 90 Days and
−Removed: Still Accruing
Construction and land
2 unchanged sentences
Consumer and other
−Removed: The following table sets forth information regarding the nonaccrual status within the loan and lease portfolio as of December 31, 2022 and 2021:
+Added: The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses.
+Added: The Company also evaluates credit quality based on the aging status of the loan, which is subsequently presented.
+Added: The following table presents the amortized cost of performing and nonperforming loans as of December 31, 2023:
+Added: Term Loans Amortized Cost Basis by Origination Year
Construction and land
+Added: Nonperforming
+Added: Nonperforming
1-4 Residential & multi-family
+Added: Nonperforming
Commercial real estate
+Added: Nonperforming
+Added: Nonperforming
+Added: Nonperforming
Consumer and other
+Added: Nonperforming
Texas Community Bancshares, Inc.
3 unchanged sentences
(Amounts in thousands, except for share and per share data)
−Removed: A loan is considered impaired when based on current information and events;
−Removed: it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan.
−Removed: Impaired loans include nonperforming loans (nonaccrual loans), loans performing but with deterioration that leads to doubt regarding collectability and also includes loans modified in troubled debt restructurings when concessions have been granted to borrowers experiencing financial difficulties.
−Removed: These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection.
−Removed: All interest accrued but not collected for loans that are placed on nonaccrual or charged-off is reversed against interest income.
−Removed: The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual.
−Removed: 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 years ended December 31, 2022 and 2021.
−Removed: The following table presents interest income recognized on impaired loans for the years ended December 31, 2022 and 2021:
−Removed: 1-4 Residential & multi-family
−Removed: Commercial real estate
−Removed: The following table sets forth information regarding impaired loans as of December 31, 2022:
−Removed: With no related allowance
+Added: The following table sets forth information regarding the credit risk profile based on payment activity of the loan and lease portfolio at December 31, 2022:
+Added: December 31, 2022
+Added: Construction and land
1‑4 Residential & multi-family
1 unchanged sentence
Consumer and other
−Removed: With a related allowance
+Added: The following is an aging analysis for loans as of December 31, 2023 and December 31, 2022:
+Added: December 31, 2023
+Added: Construction and land
1‑4 Residential & multi-family
6 unchanged sentences
(Amounts in thousands, except for share and per share data)
−Removed: The following table sets forth information regarding impaired loans as of December 31, 2021:
−Removed: With no related allowance
+Added: December 31, 2022
+Added: > 90 Days and
+Added: Still Accruing
+Added: Construction and land
1‑4 Residential & multi-family
1 unchanged sentence
Consumer and other
−Removed: With a related allowance
−Removed: Commercial real estate
+Added: All interest accrued but not collected for loans that are placed on nonaccrual or charged-off is reversed against interest income.
+Added: The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual.
+Added: Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.
+Added: No interest income was recognized for loans on nonaccrual status for the years ended December 31, 2023 and 2022.
+Added: The following table presents interest income recognized on loans that are collateral-dependent and individually reviewed for the years ended December 31, 2023 and 2022:
1-4 Residential & multi-family
Commercial real estate
−Removed: Consumer and other
−Removed: There were no troubled debt restructurings that occurred during the year ended December 31, 2022.
−Removed: During the year ended December 31, 2021, there were two modifications resulting in troubled debt restructurings of approximately $ 83 .
−Removed: The first loan is a single-family residence with an outstanding balance of approximately $ 69 as of December 31, 2021, and a second loan in commercial and industrial with an outstanding balance of approximately $ 14 as of December 31, 2021.
−Removed: There have been no subsequently defaulted troubled debt restructurings.
+Added: During the year ended December 31, 2023, there were no modifications of loans to borrowers in financial difficulty.
+Added: During the year ended December 31, 2022, there were no modifications resulting in troubled debt restructurings.
+Added: There have been no modification to borrowers with financial difficulty in the past 12 months that subsequently defaulted.
The Company has no commitments to loan additional funds to borrowers whose loans have been modified but may on occasion extend financing to these borrowers.
−Removed: At December 31, 2022 and 2021, the Company had a recorded investment of $ 364 and $ 493 , respectively, of troubled debt restructured loans.
+Added: At December 31, 2022, the Company had a recorded investment of $ 364 , of modifications of loans to borrowers in financial difficulty and $ 323 at December 31, 2023.
The Company has no current commitments to loan additional funds to the borrowers whose loans have been modified.
20 unchanged sentences
Buildings and improvements
+Added: Construction in Progress
Furniture, fixtures and equipment
49 unchanged sentences
Under these agreements, the Company had unused lines of credit amounting to $ 72,578 at December 31, 2023.
−Removed: Pursuant to a blanket collateral agreement with the FHLB, advances were secured by all stock and deposit accounts with the
+Added: Pursuant to a blanket collateral agreement with the FHLB, advances were secured by all stock and deposit accounts with the FHLB, mortgage collateral, securities collateral, and other collateral.
+Added: $ 3,558 and $ 4,528 of securities were specifically pledged as of December 31, 2023 and 2022, respectively.
Texas Community Bancshares, Inc.
3 unchanged sentences
(Amounts in thousands, except for share and per share data)
−Removed: FHLB, mortgage collateral, securities collateral, and other collateral.
−Removed: At December 31, 2022, $ 4,528 of securities were specifically pledged.
−Removed: No securities were specifically pledged as of December 31, 2021.
Note 11 - Income Taxes
2 unchanged sentences
Current federal income tax expense
−Removed: Deferred federal income tax expense (benefit)
+Added: Current state income tax expense
+Added: Deferred federal income tax (benefit) expense
Deferred state income tax expense
Total provision
−Removed: Income tax expense, as a percentage of pretax earnings, differs from the statutory federal income tax rate at December 31, 2022 and 2021, is as follows:
+Added: Income tax expense, as a percentage of pretax earnings, differs from the statutory federal income tax rate during the years ended December 31, 2023 and 2022, is as follows:
Income tax expense at the statutory rate
10 unchanged sentences
Deferred tax assets
−Removed: Allowance for loan and lease losses
−Removed: Organizational costs
+Added: Allowance for credit losses
Intangible assets
1 unchanged sentence
State income tax credit
−Removed: Stock options and awards
+Added: Stock options and restricted stock awards
Charitable contribution credit
23 unchanged sentences
Contract Amount
+Added: December 31, 2023
+Added: December 31, 2022
Commitments to extend credit
23 unchanged sentences
The portion of the director’s compensation that is deferred has been accrued and the only other expense related to this plan is the interest on the deferred amounts.
−Removed: Interest expense during the years ended December 31, 2022 and 2021, included $ 10 and $ 11 , respectively, related to this plan.
+Added: Interest expense during the years ended December 31, 2023 and 2022, included $ 10 related to this plan.
The Company has included $ 175 and $ 184 of deferred compensation payable at December 31, 2023 and 2022, respectively, which is included in accrued expenses and other liabilities.
7 unchanged sentences
Effective January 1, 2013, the Company adopted a deferred compensation incentive plan for five key employees.
−Removed: During 2022 and 2021, the plan included eight employees.
+Added: In 2019 and 2020, three employees were added to the plan.
+Added: In 2022, two employees were added to the plan and one employee was removed from the plan, for a total of nine employees.
The plan provides for an individually agreed upon percentage of net income for the plan year to be deferred and vested over five years .
3 unchanged sentences
The Company recorded compensation expense related to this program in the amount of $ 939 and $ 275 for the years ended December 31, 2023 and 2022, respectively.
−Removed: The remaining amount of bonus to be paid out before interest is $ 624 and is expected to be fully expensed by the year ending December 31, 2024.
+Added: The plan has been accelerated to fully vest all participants on December 31, 2023.
+Added: The benefits, totaling $ 435 , that had not been previously deferred will be paid out to the participants in 2025.
+Added: Deferrals from prior years totaling $ 561 will be paid out in years 2026-2029.
+Added: Going forward, the only expense related to the plan will be interest expense on the balance being held in the plan until the designated pay date.
An accrual of $ 1,189 and $ 596 for December 31, 2023 and 2022, respectively, is included in accrued expenses and other liabilities.
−Removed: To partially fund benefit plans, Mineola Community Bank maintains the Mineola Community Bank Split Dollar Life Insurance Plan, which consists of thirteen life insurance policies on ten current, two retired officers and one former officer.
+Added: To partially fund benefit plans, Broadstreet Bank maintains the Broadstreet Bank Split Dollar Life Insurance Plan, which consists of thirteen life insurance policies on ten current, two retired officers and one former officer.
The executive has the right to designate a beneficiary who will receive his or her share of the net death benefit payable upon his or her death if the employment conditions of the plan have been met.
−Removed: The policies are owned by Mineola Community Bank, which paid the premium due on the policies.
−Removed: Under the plan, the insured beneficiary will receive an agreed upon amount and Mineola Community Bank is entitled to the remaining death benefit or the entire death benefit in cases where plan employment conditions were not met.
+Added: The policies are owned by Broadstreet Bank, which paid the premium due on the policies.
+Added: Under the plan, the insured beneficiary will receive an agreed upon amount and Broadstreet Bank is entitled to the remaining death benefit or the entire death benefit in cases where plan employment conditions were not met.
The Company has included $ 6,112 and $ 6,004 in bank-owned life insurance on bank officers at December 31, 2023 and 2022, which represents the cash surrender value of the policies.
22 unchanged sentences
A summary of the ESOP shares as of December 31, 2023 and 2022 are as follows:
+Added: December 31, 2023
+Added: December 31, 2022
Shares allocated to participants
4 unchanged sentences
The Company has one equity incentive plan with two share-based compensation awards as described below.
−Removed: Total compensation cost that has been charged against income for those plans was $ 84 for the year ended December 31, 2022.
+Added: Total compensation cost that has been charged against income for those plans was $ 650 and $ 84 for the years ended December 31, 2023 and 2022, respectively.
Stock Option Awards
3 unchanged sentences
The Company has a policy of using shares held as treasury stock to satisfy share option exercises.
−Removed: Currently, the Company does not have treasury shares and will issue new shares to satisfy expected stock option exercises.
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.
8 unchanged sentences
These options will vest annually over a five year period ending August 31, 2027 and will expire on August 31, 2032.
−Removed: Compensation expense for the stock options for the year ended was $ 42 .
+Added: On February 28, 2023, the executive officers of the Company were granted 192,204 stock options with a cost of $ 6.14 per option and an exercise price of $ 15.67 .
+Added: These options will vest annually over a five year period ending February 28, 2028 and will expire on February 28, 2033.
+Added: 58,639 of these options were forfeited during the year ended December 31, 2023.
+Added: Compensation expense for the stock options for the years ended December 31, 2023 and 2022, was $ 264 and $ 42 , respectively.
The fair value of options granted was determined using the following weighted-average assumptions as of grant date.
8 unchanged sentences
(Amounts in thousands, except for share and per share data)
−Removed: A summary of the activity in the stock option awards for 2022 follows:
+Added: A summary of the activity in the stock option awards for 2023 and 2022 follows:
Weighted-Average
5 unchanged sentences
Outstanding at December 31, 2022
+Added: Forfeited or expired
+Added: Outstanding at December 31, 2023
Exercisable at December 31, 2023
3 unchanged sentences
Non-vested at December 31, 2022
−Removed: As of December 31, 2022, there was $ 593 of total unrecognized compensation cost related to nonvested stock options granted under the plan.
+Added: Non-vested at December 31, 2023
+Added: As of December 31, 2023 and 2022, there was $ 1,252 and $ 593 , respectively, of total unrecognized compensation cost related to nonvested stock options granted under the plan.
The cost is expected to be recognized over a weighted-average period of five years .
Restricted Stock Awards
−Removed: The Equity Plan also permits the grant of restricted stock to its directors.
+Added: The Equity Plan also permits the grant of restricted stock to its directors and executive officers.
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.
3 unchanged sentences
These stock awards will vest in five equal annual installments through August 31, 2027.
−Removed: Compensation expense for the stock awards for the year ended December 31, 2022 was $ 42 .
−Removed: A summary of changes in the Company’s nonvested shares for the year follows:
−Removed: Weighted-Average
−Removed: Non-Vested Shares
−Removed: Non-vested at December 31, 2021
−Removed: Non-vested at December 31, 2022
+Added: On February 28, 2023, executive officers of the Company were granted 76,880 shares of Company stock at a fair market value of $ 15.67 per share.
+Added: These stock awards will vest in five equal annual installments through February 28, 2028.
+Added: 23,455 of these awards were forfeited during the year ended December 31, 2023.
+Added: Compensation expense for the restricted stock awards for the years ended December 31, 2023 and 2022 was $ 264 and $ 42 , respectively.
Texas Community Bancshares, Inc.
3 unchanged sentences
(Amounts in thousands, except for share and per share data)
−Removed: As of December 31, 2022, there was $ 584 of total unrecognized compensation cost related to nonvested restricted stock granted under the plan.
+Added: A summary of changes in the Company’s nonvested shares for the year follows:
+Added: Weighted-Average
+Added: Non-Vested Shares
+Added: Non-vested at December 31, 2021
+Added: Non-vested at December 31, 2022
+Added: Non-vested at December 31, 2023
+Added: As of December 31, 2023 and 2022, there was $ 1,259 and $ 584 of total unrecognized compensation cost related to nonvested restricted stock granted under the plan.
The cost is expected to be recognized over a weighted-average period of five years .
5 unchanged sentences
Deposits from related parties held by the Company at December 31, 2023 and 2022, amounted to $ 4,593 and $ 5,916 , respectively.
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2023 and 2022
+Added: (Amounts in thousands, except for share and per share data)
Note 18 - Supplemental Cash Flow Information
2 unchanged sentences
Loan originations to facilitate the sale of foreclosed assets
+Added: Real estate acquired in settlement of loans
Cash paid for
7 unchanged sentences
The capital amounts and classification are also subject to qualitative judgements by the regulators about components, risk weightings, and other factors.
−Removed: Texas Community Bancshares, Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2022 and 2021
−Removed: (Amounts in thousands, except for share and per share data)
The Bank has opted into the Community Bank Leverage Ratio (CBLR) framework, beginning with the Call Report filed for the first quarter of 2020.
7 unchanged sentences
A qualifying community banking organization that elects to be under the CBLR framework generally would be exempt from the current capital framework, including risk-based capital requirements and capital conservation buffer requirements.
−Removed: On April 6, 2020, the federal banking regulators, implementing the applicable provisions of the CARES Act, issued interim rules which modified the CBLR framework so that:
−Removed: (i) beginning second quarter 2020 and until the end of the year, a banking organization that has a leverage ratio of 8% or greater and meets certain other criteria may elect to use the CBLR framework;
−Removed: and (ii) community banking organizations will have until January 1, 2022 before the CBLR requirement is reestablished at greater than 9%.
−Removed: Under the interim rules, the minimum CBLR will be 8% beginning in the second quarter and for the remainder of calendar year 2020, 8.5% for calendar year 2021, and 9% thereafter.
−Removed: The interim rules also maintain a two-quarter grace period for a qualifying community banking organization whose leverage ratio falls no more than 1% below the applicable community bank leverage ratio.
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2023 and 2022
+Added: (Amounts in thousands, except for share and per share data)
Note 20 - Fair Value Measurements
11 unchanged sentences
Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability.
−Removed: Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the
−Removed: Texas Community Bancshares, Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2022 and 2021
−Removed: (Amounts in thousands, except for share and per share data)
−Removed: assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
+Added: Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
In that regard, authoritative guidance establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.
9 unchanged sentences
Valuation adjustments may be made to ensure that financial instruments are recorded at fair value.
−Removed: While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.
+Added: While management
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2023 and 2022
+Added: (Amounts in thousands, except for share and per share data)
+Added: believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.
Available for Sale Securities - Securities classified as available for sale are reported at fair value utilizing Level 2 inputs.
2 unchanged sentences
Treasury yield curve, live trading levels, trade execution data, market consensus prepayments speeds, credit information and the bond’s terms and conditions, among other things.
−Removed: Impaired Loans - Impaired loans are reported at the fair value of the underlying collateral if repayment is expected solely from the collateral.
+Added: Derivative Instruments – As discussed in Note 21 “Derivatives”, the Company records derivative instruments at fair value on a recurring basis.
+Added: The Company utilizes derivative instruments as part of the management of interest rate risk to modify the repricing characteristics of certain portions of the Company’s interest-bearing assets and liabilities.
+Added: The Company has contracted with a third-party vendor to provide valuations for derivatives using standard valuation techniques and therefore classifies such valuations as Level 2.
+Added: Third-party valuations are validated by the Company using Bloomberg Valuation Service’s derivative pricing functions.
+Added: No significant differences were identified during the validation as of December 31, 2023.
+Added: Collateral-dependent Loans – Collateral-dependent loans are reported at the fair value of the underlying collateral if repayment is expected solely from the collateral.
Collateral values are estimated using Level 3 inputs based on internally customized discounting criteria.
3 unchanged sentences
Such discounts are typically significant and result in Level 3 classification of the inputs for determining fair value.
−Removed: Foreclosed assets are reviewed
−Removed: Texas Community Bancshares, Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2022 and 2021
−Removed: (Amounts in thousands, except for share and per share data)
−Removed: and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same or similar factors above.
+Added: 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.
The following table summarizes financial assets measured at fair value on a recurring basis as of December 31, 2023 and 2022, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:
6 unchanged sentences
Corporate bonds
−Removed: Government and agency
+Added: Derivative instruments
Total financial assets
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2023 and 2022
+Added: (Amounts in thousands, except for share and per share data)
December 31, 2022
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Financial assets
+Added: Collateral-dependent loans
+Added: Nonfinancial assets
+Added: Foreclosed assets
+Added: December 31, 2022
+Added: Financial assets
Impaired loans
+Added: During the years ended December 31, 2023 and 2022, certain collateral-dependent and impaired loans were remeasured and reported at fair value through a specific valuation allowance allocation based upon the fair value of the underlying collateral.
+Added: At December 31, 2023, collateral-dependent loans with a carrying value of $ 345 were reduced by specific valuation allowance allocations totaling $ 300 to a reported fair value of $ 45 .
+Added: At December 31, 2023, the Company had one commercial building held as a foreclosed asset with a carrying value of $ 162 including a gain of $ 32 which was recorded upon foreclosure in 2023.
+Added: The property was sold in 2024 with an additional gain of approximately $ 30 .
+Added: At December 31, 2022, impaired loans with a carrying value of $ 389 were reduced by specific valuation allowance allocations totaling $ 300 to a reported fair value of $ 89 .
+Added: The fair value of impaired loans is determined based on collateral valuations utilizing Level 3 valuation inputs.
+Added: There was no change to the provision for credit losses as a result of the valuation allowance for the years ended December 31, 2023 and 2022.
Texas Community Bancshares, Inc.
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(Amounts in thousands, except for share and per share data)
−Removed: December 31, 2021
−Removed: Financial assets
−Removed: Impaired loans
−Removed: Nonfinancial assets
−Removed: Foreclosed assets
−Removed: During the years ended December 31, 2022 and 2021, certain impaired loans were remeasured and reported at fair value through a specific valuation allowance allocation based upon the fair value of the underlying collateral.
−Removed: At December 31, 2022, impaired loans with a carrying value of $ 389 were reduced by specific valuation allowance allocations totaling $ 300 to a reported fair value of $ 89 .
−Removed: 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 .
−Removed: The fair value of impaired loans is determined based on collateral valuations utilizing Level 3 valuation inputs.
−Removed: There was no change to the provision for loan and lease losses as a result of the valuation allowance for the years ended December 31, 2022 and 2021.
Quantitative Information About Significant Unobservable Inputs Used in Level 3 Fair Value Measurements – The following table represents the Company’s Level 3 financial assets, the valuation techniques used to measure the fair value of those financial assets, the significant unobservable inputs and the ranges of values for those inputs:
3 unchanged sentences
December 31, 2023
−Removed: Impaired loans
+Added: Collateral-dependent loans
Appraisal of collateral (1)
Appraisal adjustment
+Added: Foreclosed assets
+Added: Appraisal of collateral (1)
+Added: Appraisal adjustment
Fair Value at
5 unchanged sentences
Appraisal adjustment
−Removed: Foreclosed assets
−Removed: Appraisal of collateral (1)
−Removed: Appraisal adjustment
(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable.
−Removed: Texas Community Bancshares, Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2022 and 2021
−Removed: (Amounts in thousands, except for share and per share data)
The estimated fair values, and related carrying amounts, of the Company’s financial instruments are as follows:
6 unchanged sentences
Net investment in direct financing leases
−Removed: Interest receivable
+Added: Accrued interest receivable
Restricted investments carried at cost
−Removed: Mortgage servicing rights
Financial liabilities
FHLB advances
−Removed: Interest payable
+Added: Accrued interest payable
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2023 and 2022
+Added: (Amounts in thousands, except for share and per share data)
December 31, 2022
5 unchanged sentences
Net investment in direct financing leases
−Removed: Interest receivable
+Added: Accrued interest receivable
Restricted investments carried at cost
2 unchanged sentences
FHLB advances
−Removed: Interest payable
+Added: Accrued interest payable
The following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments:
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Loans and net investment in direct financing leases – The fair values for loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms and credit quality.
−Removed: Interest receivable – The carrying value approximates its fair value.
−Removed: Texas Community Bancshares, Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2022 and 2021
−Removed: (Amounts in thousands, except for share and per share data)
+Added: Accrued interest receivable – The carrying value approximates its fair value.
Restricted investments carried at cost – The carrying value of these investments approximates fair value based on the redemption provisions contained in each.
4 unchanged sentences
FHLB advances – Current market rates for debt with similar terms and remaining maturities are used to estimate fair value of existing debt.
−Removed: Interest payable – The carrying value approximates the fair value.
+Added: Accrued interest payable – The carrying value approximates the fair value.
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2023 and 2022
+Added: (Amounts in thousands, except for share and per share data)
+Added: Note 21 - Derivatives
+Added: The Company is exposed to economic risks arising from its business operations and uses derivatives primarily to manage risk associated with changing interest rates.
+Added: The Company designates certain derivatives as hedging instruments in a qualifying hedge accounting relationship (cash flow or fair value hedge).
+Added: Fair Value Hedges – Derivatives are designated as fair value hedges when they are used to manage exposure to changes in the fair value of certain financial assets and liabilities, referred to as the hedged items, which fluctuate in value as a result of movements in interest rates.
+Added: Securities available for sale – The Company has a swap agreement to hedge the interest rate risk on a portion of its fixed rate securities available for sale.
+Added: At December 31, 2023, the aggregate notional amount of the related hedged items of the securities available for sale totaled $ 25 million and the fair value of the swaps associated with the derivative related to hedged items was an unrealized gain of $ 119 .
+Added: The Company applies hedge accounting in accordance with ASC 815, Derivatives and Hedging , and the fair value hedge and the underlying hedged item, attributable to the risk being hedged, are recorded at fair value with unrealized gains and losses being recorded within other interest income on the Company’s Consolidated Statements of Operations.
+Added: The Company assesses the effectiveness of each hedging relationship by comparing the changes in fair value or cash flows on the derivative hedging instrument with the changes in fair value or cash flows on the designated hedged item or transactions for the risk being hedged.
+Added: If a hedging relationship ceases to qualify for hedge accounting, the relationship is discontinued and future changes in the fair value of the derivative instrument are recognized in current period earnings.
+Added: For a discontinued or terminated fair value hedging relationship, all remaining basis adjustments to the carrying amount of the hedged item are amortized to interest income or expense over the remaining life of the hedged item consistent with the amortization of other discounts or premiums.
+Added: Previous balances deferred in AOCI from discontinued or terminated cash flow hedges are reclassified to interest income or expense as the hedged transactions affect earnings or over the originally specified term of the hedging relationship.
+Added: The Company’s hedges continue to be highly effective and had no material impact on the Consolidated Statements of Operations.
+Added: The following table summarizes key elements of the Company’s derivative instruments as of December 31, 2023, segregated by derivatives that are considered accounting hedges and those that are not:
+Added: December 31, 2023
+Added: Notional Amount
+Added: Derivatives designated as hedges:
+Added: Fair Value Hedges
+Added: Texas Community Bancshares, Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2023 and 2022
+Added: (Amounts in thousands, except for share and per share data)
+Added: The following table summarizes the carrying value of the Company’s hedged assets in fair value hedges and the associated cumulative basis adjustments included in those carrying values as of December 31, 2023:
+Added: Carrying Amount of Hedged Assets Amount
+Added: Cumulative Amount of Basis Adjustments Included in the Carrying Amount of the Hedged Assets
+Added: Line items on the Consolidated Statements of Financial Condition in which the hedged items is included:
+Added: Securities available for sale
Note 22 - Core Deposit Intangible
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Common stock, $ 0.01 par value, 19,000,000 shares authorized,
−Removed: 3,296,843 and 3,257,759 shares issued and outstanding at December 31, 2022 and 2021, respectively
+Added: 3,350,268 and 3,175,426 shares issued and outstanding at December 31, 2023 and 3,296,843 issued and outstanding at December 31, 2022
Additional paid in capital
2 unchanged sentences
Unearned Employee Stock Ownership Program shares
+Added: Treasury stock, at cost ( 174,842 shares at December 31, 2023)
Total shareholders' equity
4 unchanged sentences
(Amounts in thousands, except for share and per share data)
−Removed: Contribution expense - TCBS Foundation
Other expenses
4 unchanged sentences
Equity in Earnings of Subsidiary
−Removed: Dividend income
Undistributed earnings of subsidiary
Total equity in earnings of subsidiary
−Removed: Other items of comprehensive loss
+Added: Net (Loss) Income
+Added: Other items of comprehensive income (loss)
Unrealized loss on investment securities available for sale, before tax
−Removed: Reclassification adjustment for realized loss on sale of investment securities included in net income
−Removed: Income tax benefit related to other items of comprehensive loss
−Removed: Total other items of comprehensive loss, net of tax benefit
−Removed: Comprehensive Loss
+Added: Reclassification adjustment for realized loss on sale of investment securities included in net (loss) income
+Added: Net changes in fair value of available for sale securities hedge, before tax
+Added: Income tax (expense) benefit related to other items of comprehensive income (loss)
+Added: Total other items of comprehensive income (loss), net of tax expense (benefit)
+Added: Comprehensive Income (Loss)
Texas Community Bancshares, Inc.
4 unchanged sentences
Operating Activities
−Removed: Adjustments to reconcile net income to
−Removed: net cash (used for) from operating activities
+Added: Net (loss) income
+Added: Adjustments to reconcile net (loss) income to
+Added: net cash used for operating activities
Equity in undistributed earnings of subsidiary
3 unchanged sentences
Increase in accrued expenses
−Removed: Net Cash (used for) from Operating Activities
+Added: Net Cash used for Operating Activities
Investing Activities
Purchase of restricted investments
−Removed: Dividends received
−Removed: Net Cash (used for) from Investing Activities
+Added: Net Cash used for Investing Activities
Financing Activities
−Removed: Proceeds from issuance of common stock, net of offering costs
−Removed: Proceeds from conversion transferred to bank
−Removed: Loan to ESOP for purchase of common stock
−Removed: Net Cash from Financing Activities
+Added: Dividends Paid
+Added: Purchase of treasury stock
+Added: Net Cash used for Financing Activities
Net Change in Cash and Cash Equivalents
2 unchanged sentences
Note 24 - Recently Issued But Not Yet Effective Accounting Pronouncements
−Removed: Accounting Standards Updated (ASU) 2016‐13, “Financial Instruments ‐ Credit Losses (Topic 326):
−Removed: Measurement of Credit Losses on Financial Instruments.” ASU 2016‐13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio.
−Removed: ASU 2016‐13 is effective for the Company on January 1, 2023.
−Removed: The Company has approved a third-party vendor recommended by the Current Expected Credit Losses team.
−Removed: Management has been working with their third party and reviewing loan data and other inputs into the model during the quarter ended December 31, 2022, as well as re-evaluating the Company’s internal and external factors, including economic and peer data.
−Removed: The Company adopted ASU 2016-13 on January 1, 2023 and will disclose the financial impacts in the Company’s Form 10-Q for the quarter ending
−Removed: Texas Community Bancshares, Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2022 and 2021
−Removed: (Amounts in thousands, except for share and per share data)
−Removed: March 31, 2023.
−Removed: Management has made an election to move the impact through capital as of the date of adoption.
−Removed: The Company does not expect it to have a material impact on the Company’s consolidated financial statements.
−Removed: ASU 2022-02, “Financial Instruments – Credit Losses (Topic 326):
−Removed: Troubled Debt Restructurings and Vintage Disclosures.” ASU 2022-02 eliminates the recognition and measurement guidance for troubled debt restructurings (“TDRs”) by creditors in ASC 310-40.
−Removed: This Update also enhances disclosure requirements for certain loan restructurings by creditors when a borrower is experiencing financial difficulty.
−Removed: Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity will apply the loan refinancing and restructuring guidance to determine whether a modification or other form of restructuring results in a new loan or a continuation of an existing loan.
−Removed: Additionally, the amendments in this ASU require a public business entity to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases in the existing vintage disclosures.
−Removed: The amendments in this Update are effective for the Company’s annual and interim periods beginning on January 1, 2023.
−Removed: This Update requires prospective transition for the disclosures related to loan restructurings for borrowers experiencing financial difficulty and the presentation of gross write-offs in the vintage disclosures.
−Removed: The guidance related to the recognition and measurement of TDRs may be adopted on a prospective or modified retrospective transition method.
−Removed: The effect of adopting this standard is not anticipated to have a material impact on the Company’s consolidated financial statements.
+Added: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures.
+Added: The updated accounting guidance requires enhanced income tax disclosures, including the disaggregation of existing disclosures related to the tax rate reconciliation and income taxes paid.
+Added: This ASU is effective for annual periods beginning after December 15, 2024 with early adoption permitted.
+Added: The Company is currently evaluating the effect the updated guidance will have on its consolidated financial statements and related disclosures.
Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
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.