prior to their expiration, then we would establish a valuation allowance to reduce the deferred tax asset on our balance sheet to the amount with respect to which we believe it is still more likely than not that we will be able to use to offset or reduce taxes in the future. The establishment of such a valuation allowance, or any increase in an existing valuation allowance, would be effectuated through a charge to the provision for income taxes or a reduction in any income tax credit for the period in which such valuation allowance is established or increased.
Business Combinations. We account for business combinations under the acquisition method of accounting, as required by Accounting Standards Codification (“ASC”) 805, Business Combinations. The acquired assets, assumed liabilities and identifiable intangible assets are recorded at their respective acquisition date fair values. Goodwill is recorded based on the excess of the purchase price over the fair value of the net assets and other identifiable intangible assets acquired. Goodwill generated from business combinations are not subject to amortization and instead are tested for impairment annually, unless a triggering event occurs, which would require an updated assessment. Certain costs associated with business combinations are expensed as incurred.
We have two business segments, “Banking” and “Investment Management and Wealth Planning” (“Wealth Management”). Banking includes the operations of FFB, FFIS, FFPF, and Blue Moon Management LLC and Wealth Management includes the operations of FFA. The financial position and operating results of the stand-alone holding company, FFI, are included under the caption “Other” in certain of the tables that follow, along with any consolidation elimination entries.
Overview and Recent Developments
At March 31, 2023, the Company had total assets of $13.6 billion, including $10.6 billion of total loans, net of deferred fees and allowance for credit losses, $1.3 billion of cash and cash equivalents, $0.8 billion in investment securities held-to-maturity, and $0.2 billion in investment securities available-for-sale. This compares to total assets of $13.0 billion, including $10.7 billion of total loans, net of deferred fees and allowance for credit losses, $0.7 billion of cash and cash equivalents, $0.9 billion in investment securities held-to-maturity, and $0.2 billion in investment securities available-for-sale at December 31, 2022. Cash and cash equivalents, representing approximately 10% of total assets at March 31, 2023, largely accounted for the overall increase in total assets as the Company further increased its on-balance sheet liquidity.
At March 31, 2023, the Company had total liabilities of $12.5 billion, including $10.1 billion in deposits and $2.3 billion in borrowings. This compares to total liabilities of $11.9 billion, including $10.4 billion in deposits and $1.4 billion in borrowings at December 31, 2022. The $0.6 billion increase in total liabilities is due to a $0.9 billion increase in borrowings offset by a $0.3 billion decrease in deposits. The increase in borrowings was primarily due to the addition of $1.2 billion in FHLB advances offset by a $200 million paydown of fed funds balances outstanding. Funds were utilized to increase on-balance sheet liquidity. The decrease in deposits was the result of deposit outflows largely occurring after the announced closures of Silicon Valley Bank and Signature Bank in mid-March, 2023. Deposit inflows and outflows normalized at the end of March, 2023, and the Bank is back to a normalized deposit pattern.
At March 31, 2023, the Company had total shareholders’ equity of $1.1 billion, unchanged from the amount at December 31, 2022. During the three months ended March 31, 2023, shareholder’s equity activity included $8.5 million in net income offset by $6.2 million in fourth quarter 2022 dividends paid to shareholders, and $2.6 million decrease in other comprehensive income (loss) due to net unrealized losses on investment securities arising during the period.
On April 27, 2023, the Board of Directors declared a quarterly cash dividend of $0.02 per common share to be paid on May 19, 2023 to shareholders of record as of the close of business on May 8, 2023.
Results of Operations
The primary sources of revenue for Banking are net interest income, fees from its deposits and trust services, gains on sales of loans, certain loan fees, and consulting fees. The primary sources of revenue for Wealth Management are asset management fees assessed on the balance of assets under management (“AUM”). The largest component of noninterest expense is compensation and benefit costs, which accounted for 43% of the total combined noninterest expense for Banking and Wealth Management in the three months ended March 31, 2023.