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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Carrying Amount And Estimated Fair Value Of Assets And Liabilities



	September 30, 2024
					Quoted prices in		Significant other		Significant
					active markets for		observable		unobservable
	Carrying		Estimated		identical assets		inputs		inputs
	amount		fair value		(Level 1)		(Level 2)		(Level 3)
Investment securities, available-for-sale	$	1,588,289	$	1,588,289	$	—	$	1,576,972	$	11,317
Federal Reserve, FHLB and ACBB stock		21,717		21,717		—		—		21,717
Commercial loans, at fair value		252,004		252,004		—		—		252,004
Loans, net of deferred loan fees and costs		5,906,616		5,807,267		—		—		5,807,267
Demand and interest checking		6,844,128		6,844,128		—		6,844,128		—
Savings and money market		81,624		81,624		—		81,624		—
Senior debt		96,125		93,726		—		93,726		—
Subordinated debentures		13,401		10,991		—		—		10,991
Other long-term borrowings		38,157		38,157		—		38,157		—
Short-term borrowings		135,000		135,000		135,000		—		—



	December 31, 2023
					Quoted prices in		Significant other		Significant
					active markets for		observable		unobservable
	Carrying		Estimated		identical assets		inputs		inputs
	amount		fair value		(Level 1)		(Level 2)		(Level 3)
Investment securities, available-for-sale	$	747,534	$	747,534	$	—	$	735,463	$	12,071
Federal Reserve, FHLB and ACBB stock		15,591		15,591		—		—		15,591
Commercial loans, at fair value		332,766		332,766		—		—		332,766
Loans, net of deferred loan fees and costs		5,361,139		5,329,436		—		—		5,329,436
Interest rate swaps, asset		285		285		—		285		—
Demand and interest checking		6,630,251		6,630,251		—		6,630,251		—
Savings and money market		50,659		50,659		—		50,659		—
Senior debt		95,859		96,539		—		96,539		—
Subordinated debentures		13,401		11,470		—		—		11,470
Other long-term borrowings		38,561		38,561		—		38,561		—
Securities sold under agreements to repurchase		42		42		42		—		—

Changes In Company's Level 3 Assets



	Fair Value Measurements Using
	Significant Unobservable Inputs
	(Level 3)

	Available-for-sale				Commercial loans,
	securities				at fair value
	September 30, 2024		December 31, 2023		September 30, 2024		December 31, 2023
Beginning balance	$	12,071	$	20,023	$	332,766	$	589,143
Transfers to OREO		—		—		(1,744)		(2,686)
Total net (losses) or gains (realized/unrealized)
Included in earnings		—		—		2,489		3,869
Included in earnings (included in credit loss)		—		(10,000)		—		—
Included in other comprehensive income (loss)		(754)		2,048		—		—
Purchases, advances, sales and settlements
Advances		—		—		—		134,256
Settlements		—		—		(81,507)		(391,816)
Ending balance	$	11,317	$	12,071	$	252,004	$	332,766

Total losses year-to-date included
in earnings attributable to the change in
unrealized gains or losses relating to assets still
held at the reporting date as shown above.	$	—	$	—	$	—	$	(3,085)

Schedule Of Other Real Estate Owned


	September 30, 2024		December 31, 2023
Beginning balance	$	16,949	$	21,210
Transfer from loans, net		42,120		—
Transfer from commercial loans, at fair value		1,744		2,686
Advances		926		—
Write-downs		—		(1,147)
Sales		—		(5,800)
Ending balance	$	61,739	$	16,949

Fair Value, Measurements, Recurring [Member]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Assets Measured At Fair Value On A Recurring And Nonrecurring Basis



			Fair Value Measurements at Reporting Date Using
			Quoted prices in		Significant other		Significant
				active markets for	observable		unobservable
	Fair value		identical assets		inputs		inputs
		September 30, 2024	(Level 1)		(Level 2)		(Level 3)
Investment securities, available-for-sale
U.S. Government agency securities	$	31,018	$	—	$	31,018	$	—
Asset-backed securities		236,924		—		236,924		—
Obligations of states and political subdivisions		42,938		—		42,938		—
Residential mortgage-backed securities		463,608		—		463,608		—
Collateralized mortgage obligation securities		28,493		—		28,493		—
Commercial mortgage-backed securities		785,308		—		773,991		11,317
Total investment securities, available-for-sale		1,588,289		—		1,576,972		11,317
Commercial loans, at fair value		252,004		—		—		252,004
	$	1,840,293	$	—	$	1,576,972	$	263,321



			Fair Value Measurements at Reporting Date Using
			Quoted prices in		Significant other		Significant
				active markets for	observable		unobservable
	Fair value		identical assets		inputs		inputs
		December 31, 2023	(Level 1)		(Level 2)		(Level 3)
Investment securities, available-for-sale
U.S. Government agency securities	$	33,886	$	—	$	33,886	$	—
Asset-backed securities		325,353		—		325,353		—
Obligations of states and political subdivisions		47,237		—		47,237		—
Residential mortgage-backed securities		160,767		—		160,767		—
Collateralized mortgage obligation securities		34,038		—		34,038		—
Commercial mortgage-backed securities		146,253		—		134,182		12,071
Total investment securities, available-for-sale		747,534		—		735,463		12,071
Commercial loans, at fair value		332,766		—		—		332,766
Interest rate swaps, asset		285		—		285		—
	$	1,080,585	$	—	$	735,748	$	344,837

Fair Value Inputs, Assets, Quantitative Information

Level 3 instruments only

Weighted

Fair value at

Range at

average at

September 30, 2024

Valuation techniques

Unobservable inputs

September 30, 2024

Commercial mortgage-backed investment

security⁽¹⁾

11,317

Discounted cash flow

Discount rate

15.00%

Commercial - SBA⁽²⁾

93,888

Discounted cash flow

Discount rate

7.10%

Non-SBA commercial real estate - fixed⁽³⁾

146,701

Discounted cash flow

Discount rate

7.00%-10.80%

8.82%

Non-SBA commercial real estate - floating⁽⁴⁾

11,415

Discounted cash flow

Discount rate

9.20%-16.20%

12.02%

Commercial loans, at fair value

252,004

OREO⁽⁵⁾

61,739

Appraised value

N/A


		Level 3 instruments only
						Weighted
	Fair value at				Range at	average at
	December 31, 2023		Valuation techniques	Unobservable inputs	December 31, 2023	December 31, 2023
Commercial mortgage-backed investment
security	$	12,071	Discounted cash flow	Discount rate	14.00%	14.00%

Commercial - SBA		119,287	Discounted cash flow	Discount rate	7.46%	7.46%
Non-SBA commercial real estate - fixed		162,674	Discounted cash flow and appraisal	Discount rate	8.00%-12.30%	8.76%
Non-SBA commercial real estate - floating		50,805	Discounted cash flow	Discount rate	9.30%-16.50%	14.19%
Commercial loans, at fair value		332,766

OREO		16,949	Appraised value	N/A	N/A	N/A

The valuations for each of the instruments above, as of the balance sheet date, are subject to judgments, assumptions and uncertainties, changes in which could have a significant impact on such valuations. Weighted averages were calculated by using the discount rate for each individual security or loan weighted by its market value, except for SBA loans. For SBA loans, the yield derived from market pricing indications for comparable pools determined by date of loan origination. For commercial loans recorded at fair value, changes in fair value are reflected in the income statement. Changes in the fair value of securities which are unrelated to credit are recorded through equity. Changes in the fair value of loans recorded at amortized cost which are unrelated to credit are a disclosure item, without impact on the financial statements. The notes below refer to the September 30, 2024 table.

⁽¹⁾ Commercial mortgage-backed investment security, consisting of a single bank-issued CRE security, is valued using discounted cash flow analysis. The discount rate and prepayment rate applied are based upon market observations and actual experience for comparable securities and implicitly assume market averages for defaults and loss severities. The CRE-2 security has significant credit enhancement, or protection from other subordinated tranches in the issue, which limits the valuation exposure to credit losses. Nonetheless, increases in expected default rates or loss severities on the loans underlying the issue could reduce its value. In market environments in which investors demand greater yield compensation for credit risk, the discount rate applied would ordinarily be higher and the valuation lower. Changes in loss experience could also change the interest earned on this holding in future periods and impact its fair value. As a single security, the weighted average rate shown is the actual rate applied to the CRE-2 security. For additional information related to this security, which was transferred to nonaccrual status in the third quarter of 2024, see “Note 6. Loans.”

⁽²⁾ Commercial – SBA Loans are comprised of the government guaranteed portion of SBA-insured loans. Their valuation is based upon the yield derived from dealer pricing indications for guaranteed pools, adjusted for seasoning and prepayments. A limited number of broker-dealers originate the pooled securities for which the loans are purchased and as a result, prices can fluctuate based on such limited market demand, although the government guarantee has resulted in consistent historical demand. Valuations are impacted by prepayment assumptions resulting from both voluntary payoffs and defaults. Such assumptions for these seasoned loans are based on a seasoning vector for constant prepayment rates from 3% to 30% over life.

⁽³⁾ Non-SBA commercial real estate – fixed are fixed rate non-SBA commercial real estate mortgages. These loans are fair valued by a third-party, based upon discounting at market rates for similar loans. Discount rates used in applying discounted cash flow analysis utilize input based upon loan terms, the general level of interest rates and the quality of the credit. Deterioration in loan performance or other credit weaknesses could result in fair value ranges which would be dependent upon potential buyers’ tolerance for such weaknesses and are difficult to estimate.

⁽⁴⁾ Non-SBA commercial real estate – floating are floating rate non-SBA loans, the majority of which are secured by multifamily properties (apartments). These are bridge loans designed to provide owners time and funding for property improvements and are generally valued using discounted cash flow analysis. The discount rate for the vast majority of these loans was based upon current origination rates for similar loans. Deterioration in loan performance or other credit weaknesses could result in fair value ranges which would be dependent upon potential buyers’ tolerance for such weaknesses and are difficult to estimate. At September 30, 2024, these loans were fair valued by a third-party, based upon discounting at market rates for similar loans.

⁽⁵⁾ For OREO, fair value is based upon appraisals of the underlying collateral by third-party appraisers, reduced by 7% to 10% for estimated selling costs. Such appraisals reflect estimates of amounts realizable upon property sales based on the sale of comparable properties and other factors. Actual sales prices may vary based upon the identification of potential purchasers, changing conditions in local real estate markets and the level of interest rates required to finance purchases.

Fair Value, Measurements, Nonrecurring [Member]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Assets Measured At Fair Value On A Recurring And Nonrecurring Basis



			Fair Value Measurements at Reporting Date Using
			Quoted prices in active		Significant other		Significant
			markets for identical		observable		unobservable
	Fair value		assets		inputs		inputs⁽¹⁾
Description	September 30, 2024		(Level 1)		(Level 2)		(Level 3)
Collateral dependent loans with specific reserves⁽¹⁾	$	5,410	$	—	$	—	$	5,410
OREO		61,739		—		—		61,739
	$	67,149	$	—	$	—	$	67,149



			Fair Value Measurements at Reporting Date Using
			Quoted prices in active		Significant other		Significant
			markets for identical		observable		unobservable
	Fair value		assets		inputs		inputs⁽¹⁾
Description	December 31, 2023		(Level 1)		(Level 2)		(Level 3)
Collateral dependent loans with specific reserves⁽¹⁾	$	8,944	$	—	$	—	$	8,944
OREO		16,949		—		—		16,949
	$	25,893	$	—	$	—	$	25,893

⁽¹⁾The method of valuation approach for the loans evaluated for an allowance for credit losses on an individual loan basis and also for OREO was the market approach based upon appraisals of the underlying collateral by external appraisers, reduced by 7% to 10% for estimated selling costs.

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References + Details