16.

New Authoritative Accounting Pronouncements

Accounting Standards Adopted in

2019:

February 2016,

the FASB established Topic

842,

Leases

, by issuing Accounting Standards Update (“ASU”)

No.

2016

02,

Leases

, which requires lessees to recognize leases on the balance sheet, makes targeted changes to lessor accounting, and enhances disclosures to include key information about leasing arrangements. An entity

may

adopt the new guidance by either restating prior periods and recording a cumulative effect adjustment at the beginning of the earliest comparative period presented (the modified retrospective transition approach) or by recording a cumulative adjustment at the beginning of the period of adoption (the additional transition method). The Company adopted this standard using the additional transition method approach and elected to use the effective date,

January 1, 2019,

as the date of initial application. As part of the Company’s adoption of ASC

842,

the Company undertook a detailed scoping exercise to identify all leasing arrangements subject to the new leasing guidance and believes that all arrangements that meet the definition of a lease under historic US GAAP will continue to meet the definition of a lease under ASC

842.

Upon adoption, the Company recorded right of use assets totaling

$45.4

million and operating lease liabilities totaling

$54.0

million. Additionally, a deferred gain from the sale of buildings totaling

$2.7

million, net of tax, was reclassified to retained earnings.

As the rate implicit in each of the Company’s leases is

not

readily determinable, the Company is required to apply the Company’s incremental borrowing rate (“IBR”) to calculate the lease liability and right-of-use (“ROU”) asset for its leasing arrangements. The Company has used its unsecured Kroll rating as a starting point for calculation of the IBR and will adjust for considerations of collateral (i.e., notch the Company’s Kroll rating from an unsecured to a secured rating). The Company will also consider lease renewal options reasonably certain of exercise for purposes of determining the term of the underlying borrowing. The Company has considered various other factors, including, economic environment and determined that these factors do

not

currently impact the Company’s IBR calculation. The Company will continue to assess the appropriateness of the conclusions reached herein with respect to each of the factors discussed above and will determine the appropriate IBR for each new lease arrangement or modification, as required.

The new leasing standard provides a number of optional practical expedients in transition. The Company has elected the “package of practical expedients”, which permits the Company

not

to reassess prior conclusions about lease identification, lease classification and initial direct costs. The Company did

not

elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter

not

being applicable to the Company. ASC

842

also provides certain accounting policy elections for an entity’s ongoing accounting. For operating leases wherein the Company is the lessee, the Company has elected the practical expedient to

not

separate lease and non-lease components. See Note

“Leases” for additional information.

August 2017,

the FASB issued ASU

No.

2017

12,

“Derivatives and Hedging (Topic

815

)”

providing targeted improvements to the accounting for hedging activities, which is effective

January 1, 2019,

with early adoption permitted in any interim period or fiscal year before the effective date. The guidance introduces a number of amendments, several of which are optional, that are designed to simplify the application of hedge accounting, improve financial statement transparency and more closely align hedge accounting with an entity’s risk management strategies. This ASU eliminates the requirement to separately measure and report hedge ineffectiveness and changes the presentation so that all items that affect earnings are in the same income statement line as the hedged item.

The Company adopted this standard

January 1, 2019,

as the date of initial application. As a result of adoption, fair value adjustments on qualifying fair value hedges were recorded in interest income during the

three

months ended

March 31, 2019.

These adjustments were recorded in non-interest income in prior periods. See Note

“Derivative Financial Instruments” for additional information.

Accounting Standards Pending Adoption:

August 2018,

the FASB issued ASU

No.

2018

14,

“Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic

715

)”

providing targeted improvements to the disclosures required for Defined Benefit Plans. The amendments in in this Update are effective for fiscal years ended after

December 15, 2020.

Early adoption is permitted. The amendments are to be applied on a retrospective basis to all periods presented.

We are currently evaluating the impact of adopting this new guidance on our disclosures.

August 2018,

the FASB issued ASU

No.

2018

13,

“Fair Value Measurement (Topic

820

)”. The amendments in this Update modify the disclosure requirements on fair value measurements in Topic

820.

The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years beginning after

December 15, 2019.

Early adoption is permitted. The amendments are to be applied on a retrospective basis to all periods presented.

We are currently evaluating the impact of adopting this new guidance on our disclosures.

January 2017,

the FASB issued ASU

No.

2017

04,

“Intangibles - Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment.” The ASU simplifies the subsequent measurement of goodwill and eliminates Step

from the goodwill impairment test. Under this ASU, the Company should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. The impairment charge is limited to the amount of goodwill allocated to that reporting unit. The amendments in this update are effective for fiscal years beginning after

December 15, 2019,

including interim periods within those fiscal years. Early adoption is permitted for goodwill impairment tests performed on testing dates after

January 1, 2017.

The guidance is

not

expected to have a significant impact on the Company's financial positions, results of operations or disclosures.

June 2016,

the FASB issued ASU

No.

2016

13,

“Financial Instruments – Credit Losses” which sets forth a “current expected credit loss” (“CECL”) model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This replaces the existing incurred loss model and will apply to the measurement of credit losses on financial assets measured at amortized cost and to some off-balance sheet credit exposures. This ASU will be effective for fiscal years beginning after

December 15, 2019,

including interim periods within those fiscal years. The Company has been collecting and evaluating data and system requirements to implement this standard. Management has developed inter-departmental steering and working committees to evaluate and implement CECL. We have chosen a vendor solution to model CECL results and are in the middle stages of implementing this solution. The adoption of this update could have a material impact on the Company’s consolidated results of operations and financial condition. The extent of the impact is still unknown and will depend on many factors, such as the composition of the Company’s loan portfolio and expected loss history at adoption.