
ASU. No.	Topic	Nature of Update	Date Adoption Required	Permitted Adoption Methods	Expected Financial Statement Impact
2016-13	Financial Instruments – Credit Losses (Topic 326)	This ASU amends guidance on reporting credit losses for assets held at amortized-cost basis and available-for-sale debt securities.	January 1, 2020	Modified-retrospective approach.	The Company adopted this ASU, which introduces the current expected credit loss ("CECL") method, on January 1, 2020. In accord with this adoption, the Company expects to record by the end of the first quarter of 2020 between a $6.5 million to $8.0 million, or 15%-20%, increase in its Allowance for Credit Losses ("ACL") for its loans, a $51,000 ACL for its investment debt securities, and an approximate $500,000 ACL for its off-balance sheet exposures. The Company awaits the finalization of a model validation on its CECL method prior to finalizing its CECL adoption entries. The Company’s CECL method is a “static pool” method that analyzes historical closed pools of loans over their expected lives to attain a loss rate that is then applied to the current balance of such pools. The expected increase in ACL due to CECL adoption primarily reflects additional ACL for longer duration loan portfolios, such as the Company's residential real estate and consumer loan portfolios. No additional segmentation of the Bank's loan portfolios was deemed necessary upon adoption. Additionally, the CECL method requires reasonable and supportable forecasts incorporated into the Company's ACL model. Due to its reasonably strong correlation to the Company's historical net loan losses, the Company has chosen to use the seasonally adjusted national civilian unemployment rate as its primary forecasting tool. Finally, upon adoption, the Company modified its policies, procedures and internal controls to ensure compliance with this ASU.

2019-05	Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief	This ASU provides the fair value option for certain instruments within the scope of Subtopic 326-20, Financial Instruments—Credit Losses.	January 1, 2020	Modified-retrospective approach.	Immaterial

2019-11	Codification Improvements to Topic 326, Financial Instruments—Credit Losses	This ASU primarily clarifies guidance on how to report expected recoveries, permits organizations to record expected recoveries on PCD assets, and in addition to other narrow technical improvements, reinforces existing guidance that prohibits organizations from recording negative allowances for available-for-sale debt securities.	January 1, 2020	Modified-retrospective approach.	Immaterial

2019-12	Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes	This ASU removes specific exceptions to the general principles in Topic 740. The ASU also improves financial statement preparers’ application of income tax-related guidance and simplifies GAAP.	January 1, 2021	Modified-retrospective approach.	Immaterial

2020-01	Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815	This ASU primarily clarifies how a company should consider observable transactions when applying Topics 323 and 321. The ASU also clarifies the accounting for certain forward contracts and purchased options.	January 1, 2021	Modified-retrospective approach.	Immaterial

The following ASUs were adopted by the Company during the year ended December 31, 2019:


ASU. No.	Topic	Nature of Update	Date Adopted	Method of Adoption	Financial Statement Impact
2016-02	Leases (Topic 842)	Most leases are considered operating leases, which are not accounted for on the lessees’ balance sheets. The significant change under this ASU is that those operating leases will be recorded on the balance sheet.	January 1, 2019	Modified-retrospective approach, which includes a number of optional practical expedients.	The Company adopted this ASU on January 1, 2019 and upon adoption recorded $40 million of right-of-use lease assets and $42 million of operating lease liabilities on its balance sheet. The adoption of this ASU did not have a meaningful impact on the Company's performance metrics, including regulatory capital ratios and return on average assets. Additionally, the Company does not believe that the adoption of this ASU by its clients will have a significant impact on the Company's ability to underwrite credit when client financial statements are presented inclusive of the requirements of this ASU. See Notes 1 and 6 in this section of the filing regarding disclosures by the Company to comply with this ASU.

2018-10	Codification Improvements to Topic 842, Leases	This ASU affects narrow aspects of the guidance issued in the amendments in ASU 2016-02.	January 1, 2019	Adoption should conform to the adoption of ASU 2016-02 above.	See Notes 1 and 6 in this section of the filing regarding disclosures by the Company to comply with this ASU.

2018-11	Leases (Topic 842): Targeted Improvements	This ASU provides the Company with an additional (and optional) transition method to adopt ASU 2016-02. This ASU also provides the Company with a practical expedient to not separate non-lease components from the associated lease component under certain circumstances.	January 1, 2019	Adoption should conform to the adoption of ASU 2016-02 above.	The Company elected the optional transition method permitted by this ASU, allowing the Company to adopt ASU 2016-02, effective January 1, 2019 with a cumulative-effect adjustment to the opening balance of retained earnings on January 1, 2019.

2017-12	Derivatives and Hedging (Topic 815)	The amendments in this ASU make certain targeted improvements to simplify the application of hedge accounting.	January 1, 2019	Prospectively.	Immaterial