What changed in this filing

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Item 1. Financial Statements

2024-11-07 compared with 2024-08-08 · 235 added, 240 removed, 1190 unchanged (29% of the section changed)

3 unchanged sentences

(dollars in thousands, except share and per share data)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Cash and due from banks $ 16,383 $ 9,047

6 unchanged sentences

Federal Reserve and Federal Home Loan Bank stock 37,728 25,748

Loans held for sale, at lower of cost or fair value 5,000 —

Loans held for investment, at amortized cost 7,970,269 7,968,695

1 unchanged sentence

Loans held for investment, net of allowance 7,858,402 7,882,755

7,900,438 7,882,755

Premises and equipment, net 8,291 10,189

13 unchanged sentences

Customer repurchase agreements 32,040 30,587

Borrowings 1,659,979 1,369,918

Other short-term borrowings 1,240,000 1,369,918

Long-term borrowings 75,812 —

Operating lease liabilities 18,755 23,238

14 unchanged sentences

(dollars in thousands, except per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

8 unchanged sentences

Interest on customer repurchase agreements 332 311 977 946

Interest on borrowings 21,202 24,944 42,408 40,911

Interest on other short-term borrowings 20,448 18,152 62,856 56,989

Interest on long-term borrowings — 1,038 — 3,112

Total interest expense 101,970 90,430 301,252 240,352

1 unchanged sentence

Provision for Credit Losses 10,094 5,644 54,228 17,046

Provision for Credit Losses for Unfunded Commitments 608 318 1,064 1,166

Net Interest Income After Provision for Credit Losses 61,786 66,255 100,853 134,267

(Reversal of) Provision for Credit Losses for Unfunded Commitments ( 1,593 ) ( 839 ) ( 529 ) 327

Net Interest Income After (Reversal of) Provision for Credit Losses 63,342 65,914 164,195 200,181

Noninterest Income

Service charges on deposits 1,747 1,631 5,099 4,767

Gain on sale of loans 37 95 37 400

Gain (loss) on sale of loans 20 ( 5 ) 57 395

Net gain (loss) on sale of investment securities 3 5 10 ( 14 )

13 unchanged sentences

Total noninterest expense 43,614 37,633 230,102 116,195

(Loss) Income Before Income Tax Expense ( 79,373 ) 36,872 ( 76,714 ) 68,000

Income (Loss) Before Income Tax Expense 26,679 34,628 ( 50,035 ) 102,628

Income Tax Expense 4,864 7,245 12,290 22,319

Net (Loss) Income $ ( 83,802 ) $ 28,692 $ ( 84,140 ) $ 52,926

(Loss) Earnings Per Common Share

Net Income (Loss) $ 21,815 $ 27,383 $ ( 62,325 ) $ 80,309

Earnings (Loss) Per Common Share

Basic $ 0.72 $ 0.91 $ ( 2.07 ) $ 2.63

2 unchanged sentences

EAGLE BANCORP, INC.

Consolidated Statements of Comprehensive (Loss) Income (Unaudited)

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(dollars in thousands)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Net (Loss) Income $ ( 83,802 ) $ 28,692 $ ( 84,140 ) $ 52,926

Other Comprehensive (Loss) Income, Net of Tax:

Net Income (Loss) $ 21,815 $ 27,383 $ ( 62,325 ) $ 80,309

Other Comprehensive Income (Loss), Net of Tax:

Unrealized gain (loss) on securities available-for-sale 35,338 ( 21,314 ) 33,901 ( 15,452 )

Reclassification adjustment for (gain) loss included in net income ( 2 ) ( 2 ) ( 6 ) 14

Reclassification adjustment for (gain) loss included in net income (loss) ( 2 ) ( 4 ) ( 8 ) 10

Total unrealized gain (loss) on investment securities available-for-sale 35,336 ( 21,318 ) 33,893 ( 15,442 )

4 unchanged sentences

Other comprehensive income (loss) 36,666 ( 19,918 ) 38,180 ( 11,998 )

Comprehensive (Loss) Income $ ( 78,877 ) $ 18,019 $ ( 82,626 ) $ 60,846

Comprehensive Income (Loss) $ 58,481 $ 7,465 $ ( 24,145 ) $ 68,311

See Notes to Consolidated Financial Statements.

1 unchanged sentence

Consolidated Statements of Changes in Shareholders' Equity (Unaudited)

Three Months Ended September 30, 2024 and 2023

(dollars in thousands except share and per share data)

2 unchanged sentences

Shares Amount

Balance April 1, 2024 30,185,732 $ 297 $ 377,334 $ 1,047,550 $ ( 165,768 ) $ 1,259,413

Balance July 1, 2024 30,180,482 $ 297 $ 380,142 $ 949,863 $ ( 160,843 ) $ 1,169,459

Net Income — — — 21,815 — 21,815

Other comprehensive loss, net of tax — — — — 4,925 4,925

Other comprehensive income, net of tax — — — — 36,666 36,666

Stock-based compensation expense — — 2,019 — — 2,019

Vesting of time-based stock awards issued at date of grant, net of shares withheld for payroll taxes ( 11,371 ) — — — — —

Forfeitures of time-based stock awards and shares withheld for payroll taxes

( 23,925 ) 1 ( 1 ) — — —

Time-based stock awards granted 10,082 — — — — —

2 unchanged sentences

— — — ( 4,659 ) — ( 4,659 )

Balance June 30, 2024 30,180,482 $ 297 $ 380,142 $ 949,863 $ ( 160,843 ) $ 1,169,459

Balance April 1, 2023 31,111,647 $ 308 $ 397,012 $ 1,025,552 $ ( 180,914 ) $ 1,241,958

Balance September 30, 2024 30,173,200 $ 298 $ 382,284 $ 967,019 $ ( 124,177 ) $ 1,225,424

Balance July 1, 2023 29,912,082 $ 296 $ 370,278 $ 1,040,779 $ ( 191,587 ) $ 1,219,766

Net Income — — — 27,383 — 27,383

1 unchanged sentence

Stock-based compensation expense — — 1,969 — — 1,969

Issuance of common stock related to options exercised, net of shares withheld for payroll taxes — — — — — —

Vesting of time-based stock awards issued at date of grant, net of shares withheld for payroll taxes ( 6,960 ) — — — — —

Forfeitures of time-based stock awards and shares withheld for payroll taxes

( 15,250 ) — — — — —

Time-based stock awards granted 14,280 — — — — —

3 unchanged sentences

Common stock repurchased — — 2 — — 2

Balance June 30, 2023 29,912,082 $ 296 $ 370,278 $ 1,040,779 $ ( 191,587 ) $ 1,219,766

Balance September 30, 2023 29,917,982 $ 296 $ 372,394 $ 1,054,699 $ ( 211,505 ) $ 1,215,884

See Notes to Consolidated Financial Statements.

1 unchanged sentence

Consolidated Statements of Changes in Shareholders' Equity - Continued (Unaudited)

Nine Months Ended September 30, 2024 and 2023

(dollars in thousands except share and per share data)

6 unchanged sentences

Stock-based compensation expense — — 7,051 — — 7,051

Vesting of time-based stock awards issued at date of grant, net of shares withheld for payroll taxes ( 42,920 ) 1 ( 1 ) — — —

Forfeitures of time-based stock awards and shares withheld for payroll taxes ( 66,845 ) 2 ( 2 ) — — —

Vesting of performance-based stock awards, net of shares withheld for payroll taxes 12,013 — — — — —

3 unchanged sentences

— — — ( 32,112 ) — ( 32,112 )

Balance June 30, 2024 30,180,482 $ 297 $ 380,142 $ 949,863 $ ( 160,843 ) $ 1,169,459

Balance September 30, 2024 30,173,200 $ 298 $ 382,284 $ 967,019 $ ( 124,177 ) $ 1,225,424

Balance January 1, 2023 31,346,903 $ 310 $ 412,303 $ 1,015,215 $ ( 199,507 ) $ 1,228,321

2 unchanged sentences

Stock-based compensation expense — — 7,653 — — 7,653

Vesting of time-based stock awards issued at date of grant, net of shares withheld for payroll taxes ( 44,064 ) 2 ( 2 ) — — —

Forfeitures of time-based stock awards and shares withheld for payroll taxes ( 59,314 ) 1 ( 1 ) — — —

Vesting of performance-based stock awards, net of shares withheld for payroll taxes 27,296 — — — — —

4 unchanged sentences

Common stock repurchased ( 1,600,000 ) ( 15 ) ( 48,020 ) — — ( 48,035 )

Balance June 30, 2023 29,912,082 $ 296 $ 370,278 $ 1,040,779 $ ( 191,587 ) $ 1,219,766

Balance September 30, 2023 29,917,982 $ 296 $ 372,394 $ 1,054,699 $ ( 211,505 ) $ 1,215,884

See Notes to Consolidated Financial Statements.

2 unchanged sentences

(dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash Flows From Operating Activities:

2 unchanged sentences

Provision for credit losses 54,228 17,046

Provision for credit losses for unfunded commitments 1,064 1,166

(Reversal of ) provision for unfunded commitments ( 529 ) 327

Goodwill impairment

6 unchanged sentences

Net gain on sale of other real estate owned — ( 134 )

(Gain) loss on sale of investment securities ( 7 ) 19

(Gain) loss on call/sale of investment securities ( 10 ) 14

Net increase in cash surrender value of BOLI ( 2,143 ) ( 1,972 )

1 unchanged sentence

Decrease (increase) in other assets 5,943 ( 29,589 )

Increase (decrease) in other liabilities ( 13,947 ) 25,558

Increase in other liabilities 2,528 51,058

Net Cash Provided by Operating Activities 113,682 138,969

2 unchanged sentences

Proceeds from maturities 89,035 92,647

Proceeds from sale/call 27,000 8,303

Proceeds from call/sale 27,000 8,303

Investment securities held-to-maturity:

1 unchanged sentence

Proceeds from call 4,644 2,906

Purchase of Federal Reserve stock ( 142 ) ( 158 )

Redemption (purchase) of Federal Home Loan Bank stock ( 28,384 ) 19,026

Proceeds from (purchase of) Federal Reserve stock ( 222 ) 39,378

Purchase of Federal Home Loan Bank stock ( 11,758 ) —

Proceeds from sale of mortgage servicing rights 4,798 —

6 unchanged sentences

Decrease in deposits ( 267,189 ) ( 336,876 )

Increase in customer repurchase agreements 8,633 1,917

Proceeds from borrowings 2,650,000 5,683,000

Repayment of borrowings ( 2,360,000 ) ( 4,821,242 )

Increase (decrease) in customer repurchase agreements 1,453 ( 9,411 )

Net (decrease) increase in short-term borrowings ( 130,000 ) 325,000

Net proceeds from long-term borrowings 75,812 —

Proceeds from employee stock purchase plan 347 459

9 unchanged sentences

(dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Supplemental Cash Flows Information:

2 unchanged sentences

Non-Cash Investing Activities:

Transfer from loans to loans held for sale $ 5,000 $ —

Transfer of loans for investment to loans held for sale $ 5,000 $ —

Transfers from loans to other real estate owned $ 2,370 $ —

19 unchanged sentences

The primary financial services offered by the Bank include real estate, commercial and consumer lending, as well as traditional deposit and repurchase agreement products.

The Bank is also active in the origination of small business loans, and the origination, securitization and sale of multifamily Federal Housing Administration ("FHA") loans.

The Bank is also active in the origination of small business loans.

The guaranteed portion of small business loans, guaranteed by the Small Business Administration ("SBA"), is typically sold to third party investors in a transaction apart from the loan's origination.

2 unchanged sentences

Landroval Municipal Finance, Inc., a subsidiary of the Bank, focuses on lending to municipalities by buying debt on the public market as well as direct purchase issuance.

In April 2024, the Company closed a branch following the lease's expiration.

Use of Estimates

8 unchanged sentences

AFS Securities are carried at fair value, with unrealized gains or losses, other than impairment losses, being reported as accumulated other comprehensive income/(loss), a separate component of shareholders' equity, net of deferred income tax.

Realized gains

and losses, using the specific identification method, are included as a separate component of noninterest income in the Consolidated Statements of Operations.

Realized gains and losses, using the specific identification method, are included as a separate component of noninterest income in the Consolidated Statements of Operations.

Premiums and discounts on investment securities are amortized or accreted to the earlier of call or maturity based on expected lives, which include prepayment adjustments and call optionality.

4 unchanged sentences

The Company does not intend to sell the HTM investments, and it is more likely than not that the Company will not have to sell the securities before recovery of its amortized cost basis, which may be at maturity.

The Company classifies loans in its portfolio as either held for investment (“HFI”) or held for sale (“HFS”) HFS loans are reported at the lower of cost or fair value on the Consolidated Balance Sheets.

The Company classifies loans in its portfolio as either held for investment (“HFI”) or held for sale (“HFS”).

HFS loans are reported at the lower of cost or fair value on the Consolidated Balance Sheets.

HFI loans are stated at the principal amount outstanding, net of unamortized deferred costs and fees.

8 unchanged sentences

Allowance for Credit Losses

The following table presents a breakdown of the provision for credit losses included in our Consolidated Statements of Operations for the applicable periods (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

The following table presents a breakdown of the provision for credit losses included in our Consolidated Statements of Operations for the applicable periods:

Three Months Ended September 30, Nine Months Ended September 30,

(dollars in thousands) 2024 2023 2024 2023

Provision for credit losses - loans $ 10,869 $ 5,643 $ 54,947 $ 15,802

Provision for credit losses - HTM debt securities 55 2 56 1,244

Provision for (reversal of) credit losses - HTM debt securities ( 775 ) 1 ( 719 ) 1,244

Provision for credit losses - AFS debt securities — — — —

5 unchanged sentences

Expected recoveries are recorded to the extent they do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

Reserves on loans that do not share risk characteristics are evaluated on an individual basis.

Reserves on loans that do not share similar risk characteristics are evaluated on an individual basis.

Nonaccrual loans are specifically reviewed for loss potential and when deemed appropriate are assigned a reserve based on an individual evaluation.

5 unchanged sentences

For periods beyond which we are able to develop reasonable and supportable forecasts, we revert to the historical loss rate on a straight-line basis over a twelve-month period.

For each of these loan segments, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speeds, PD rates, and LGD rates.

The modeling of expected prepayment speeds is based on historical internal data.

EAD is based on each instrument's underlying amortization schedule in order to estimate the bank's expected credit loss exposure at the time of the borrower's potential default.

The ACL also includes an amount for inherent risks not reflected in the historical quantitative analysis associated with the reasonable and supportable forecast.

Relevant factors include, but are not limited to, concentrations of credit risk, changes in underwriting standards, experience and depth of lending staff and trends in delinquencies.

While our methodology in establishing the reserve for credit losses attributes portions of the ACL and RUC to the commercial and consumer portfolio segments, the entire ACL and RUC is available to absorb credit losses expected in the total loan portfolio and total amount of unfunded credit commitments, respectively.

Our model may reflect assumptions by management that are not covered by the qualitative and environmental factors, and we reevaluate all of its factors quarterly.

During the first quarter of 2024, management enhanced the cash flow model to incorporate three macroeconomic variables in addition to national unemployment.

The four economic variables selected, national unemployment, which was the original variable used, Commercial Real Estate ("CRE") Price Index, House Price Index and Gross Domestic Product ("GDP"), are incorporated by utilizing a Loss Driver Analysis approach that factors in historical losses, including during the Great Recession, of regional peer banks and the Bank.

The updated model incorporates a weighting of three economic scenarios;

baseline, upside and downside.

The scenarios cover the four economic forecast variables, with each segment of the portfolio linked to two of these variables, depending on the segment.

The loss driver analysis is spread over a reasonable and supportable period of 18 months and reverts back to a historical loss rate over twelve months on a straight-line basis over the loan's remaining maturity.

Management leverages economic projections from reputable and independent third parties to inform its loss driver forecasts over the forecast period.

While our methodology in establishing the ACL attributes portions of the ACL and RUC to the separate loan pools or segments, the entire ACL and RUC is available to absorb credit losses expected in the total loan portfolio and total amount of unfunded credit commitments, respectively.

Portfolio segments are used to pool loans with similar risk characteristics and align with our methodology for measuring current expected credit losses ("CECL").

27 unchanged sentences

This category also includes other loan items such as overdrawn deposit accounts as well as loans and loan payments in process.

The modeling of expected prepayment speeds is based on historical internal data.

EAD is based on each instrument's underlying amortization schedule in order to estimate the bank's expected credit loss exposure at the time of the borrower's potential default.

The ACL also includes an amount for inherent risks not reflected in the historical quantitative analysis associated with the reasonable and supportable forecast.

Relevant factors include, but are not limited to, concentrations of credit risk, changes in underwriting standards, experience and depth of lending staff and trends in delinquencies.

Our model may reflect assumptions by management that are not covered by the qualitative and environmental factors, and we reevaluate all of its factors quarterly.

During the first quarter of 2024, management enhanced the cash flow model to incorporate three macroeconomic variables in addition to national unemployment.

The updated model incorporates a weighting of three economic scenarios;

baseline, upside and downside.

The scenarios cover the four economic forecast variables, with each segment of the portfolio linked to two of these variables, depending on the segment.

Management leverages economic projections from reputable and independent third parties to inform its loss driver forecasts over the forecast period.

We have several pass credit grades that are assigned to loans based on varying levels of risk, ranging from credits that are secured by cash or marketable securities, to watch credits which have all the characteristics of an acceptable credit risk but warrant more than the normal level of monitoring.

20 unchanged sentences

Collateral Dependent Financial Assets

Loans that do not share risk characteristics are evaluated on an individual basis.

Loans that do not share similar risk characteristics are evaluated on an individual basis.

For collateral dependent financial assets 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 sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date.

57 unchanged sentences

If the results of the qualitative assessment indicate that it is not more likely than not that an impairment has occurred, or if the quantitative impairment test results in a fair value of the reporting unit that is greater than the carrying amount, then no impairment charge is recorded.

During the three months ended June 30, 2024, Management determined that a triggering event had occurred as a result of the share price trading under book value for more than four quarters.

During the past twelve months ended June 30, 2024, changes in macroeconomic conditions, market volatility due to rising interest rates resulted in fluctuations of the Company's stock price with a sustained decrease.

During the second quarter ended June 30, 2024, Management determined that a triggering event had occurred as a result of the share price trading under book value for more than four quarters due to changes in macroeconomic conditions and market volatility in the financial markets and the banking industry due to the impact from rising interest rates which resulted in fluctuations of the Company's stock price with a sustained decrease.

As a result of the triggering event, the Company engaged a third-party service provider to assist Management with the determination of the fair value of the Company in the second quarter of 2024.

The resulting calculations indicated that the fair value did not exceed the carrying amount of the Company's only reporting unit as of May 31, 2024 which resulted in a determination that goodwill had become fully impaired.

The goodwill impairment charge of $ 104.2 million reduced fully the carrying value of the Company's goodwill.

The impaired goodwill is primarily related to the acquisition of the Virginia Heritage Bank in October 2014.

The goodwill impairment charge of $ 104.2 million reduced fully the carrying value of the Company's goodwill as of May 31, 2024.

The impaired goodwill was primarily related to the acquisition of the Virginia Heritage Bank in October 2014.

The impairment charge did not impact our cash flows, liquidity ratios, core operating performance, or regulatory capital ratios.

52 unchanged sentences

Cash and Due from Banks

For the six months ended June 30, 2024 and 2023, the Bank maintained an average daily balance at the Federal Reserve Bank of $ 1.7 billion and $ 0.9 billion, respectively, on which interest is paid.

For the nine months ended September 30, 2024 and 2023, the Bank maintained an average daily balance at the Federal Reserve Bank of $ 1.6 billion and $ 0.9 billion, respectively, on which interest is paid.

Additionally, the Bank maintains interest-bearing balances with the Federal Home Loan Bank of Atlanta ("FHLB") and noninterest-bearing balances with domestic correspondent banks to cover associated costs for services they provide to the Bank.

2 unchanged sentences

(dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Estimated Fair Value

June 30, 2024

September 30, 2024

Investment securities available-for-sale:

7 unchanged sentences

(dollars in thousands) Amortized Cost Gross Unrecognized Gains Gross Unrecognized Losses Estimated Fair Value

June 30, 2024

September 30, 2024

Investment securities held-to-maturity:

26 unchanged sentences

Total held-to-maturity securities, net of ACL $ 1,015,737

At June 30, 2024 and December 31, 2023, the Company held $ 54.3 million and $ 25.7 million, respectively, of equity securities in a combination of Federal Reserve System ("Federal Reserve Board," "Federal Reserve" or "FRB") and FHLB stocks, which are required to be held for regulatory purposes.

At September 30, 2024 and December 31, 2023, the Company held $ 37.7 million and $ 25.7 million, respectively, of equity securities in a combination of Federal Reserve System ("Federal Reserve Board," "Federal Reserve" or "FRB") and FHLB stocks, which are required to be held for regulatory purposes.

These securities cannot be disposed of other than through redemption by the issuer and, if redeemed, would be redeemed at the original cost.

At June 30, 2024 and December 31, 2023, the Company had $ 48.2 million and $ 51.7 million, respectively, of unamortized unrealized losses outstanding following the transfer of investment securities from AFS to HTM in 2022.

At September 30, 2024 and December 31, 2023, the Company had $ 46.5 million and $ 51.7 million, respectively, of unamortized unrealized losses outstanding following the transfer of investment securities from AFS to HTM in 2022.

These unrealized losses are included in accumulated other comprehensive loss and are amortized through interest income as a yield adjustment over the remaining term of the securities.

Accrued interest receivable on investment securities totaled $ 7.3 million and $ 7.6 million at June 30, 2024 and December 31, 2023, respectively.

Accrued interest receivable on investment securities totaled $ 7.4 million and $ 7.6 million at September 30, 2024 and December 31, 2023, respectively.

The accrued interest receivable is excluded from the amortized cost of the securities and is reported in other assets in the Consolidated Balance Sheets.

2 unchanged sentences

(dollars in thousands) Number of Securities Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses

June 30, 2024

September 30, 2024

Investment securities available-for-sale:

8 unchanged sentences

(dollars in thousands) Number of Securities Estimated Fair Value Unrecognized Losses Estimated Fair Value Unrecognized Losses Estimated Fair Value Unrecognized Losses

June 30, 2024

September 30, 2024

Investment securities held-to-maturity:

25 unchanged sentences

Total 228 $ — $ — $ 885,977 $ ( 116,116 ) $ 885,977 $ ( 116,116 )

Unrealized losses at June 30, 2024 were generally attributable to changes in market interest rates and interest spread relationships subsequent to the dates the securities were originally purchased and were considered to be temporary, and not due to credit quality concerns on the investment securities.

Unrealized losses at September 30, 2024 were generally attributable to changes in market interest rates and interest spread relationships subsequent to the dates the securities were originally purchased and were considered to be temporary, and not due to credit quality concerns on the investment securities.

The fair values of these securities are expected to recover as the securities approach their respective maturity dates.

1 unchanged sentence

The Company measures its AFS and HTM security portfolios for current expected credit losses as part of its ACL analysis.

During the three months ended June 30, 2024 and 2023, the provision for credit losses for the HTM securities portfolio was $ 55 thousand and $ 2 thousand, respectively.

During the six months ended June 30, 2024 and 2023, the provision for credit losses for the HTM securities portfolio was $ 56 thousand and $ 1.2 million, respectively.

There was no provision for credit losses on the AFS securities portfolio for the three and six months ended June 30, 2024.

During the three and six months ended June 30, 2023, the Company recorded a provision reversal of 14 thousand and a provision of $ 0 , respectively.

At June 30, 2024 and December 31, 2023, the Company had a total allowance of $ 17 thousand on its AFS securities and $ 2.0 million on its HTM securities, each of which primarily comprise allowances for corporate bonds.

For further information on provision for credit losses on AFS and HTM securities, including balances for the three and nine months ended September 30, 2024 and 2023, see Allowance for Credit Losses discussion in "Note 1.

Summary of Significant Accounting Policies".

At September 30, 2024, the Company had a total allowance of $ 17 thousand on its AFS securities and $ 1.2 million on its HTM securities, each of which primarily comprise allowances for corporate bonds.

The following table summarizes the Company's investment in AFS securities and HTM securities by contractual maturity.

Expected maturities for mortgage-backed securities ("MBS") will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

June 30, 2024

September 30, 2024

(dollars in thousands) Amortized Cost Estimated Fair Value

19 unchanged sentences

Total $ 2,511,963 $ 2,301,431

For the three and six months ended June 30, 2024, gross realized gains on calls of investment securities were $ 3 thousand and $ 7 thousand, respectively.

For the three and six months ended June 30, 2023, gross realized gains on calls of investment securities were $ 2 thousand and $ 7 thousand, respectively.

There were no gross realized losses on sales or calls of investment securities during the three and six months ended June 30, 2024, no r during the three months ended June 30, 2023.

During the six months ended June 30, 2023, there were $ 26 thousand of gross realized losses on sales or calls of investment securities.

Gross sales and call proceeds were $ 50 thousand and $ 27.1 million for the three and six months ended June 30, 2024, respectively, and $ 273 thousand and $ 8.6 million for the same periods in 2023.

The book value of securities pledged as collateral for certain government deposits, securities sold under agreements to repurchase, and certain lines of credit with correspondent banks at June 30, 2024 and December 31, 2023 was $ 2.2 billion and $ 2.1 billion, respectively.

For the three and nine months ended September 30, 2024, gross realized gains on calls of investment securities were $ 3 thousand and $ 10 thousand, respectively, as compared to $ 5 thousand and $ 126 thousand for the three and nine months ended September 30, 2023.

There were no gross realized losses on sales or calls of investment securities during the three and nine months ended September 30, 2024, no r during the three months ended September 30, 2023.

During the nine months ended September 30, 2023, there were $ 140 thousand of gross realized losses on sales or calls of investment securities.

Gross sales and call proceeds were $ 4.5 million and $ 31.6 million for the three and nine months ended September 30, 2024, respectively, and $ 2.6 million and $ 11.2 million for the same periods in 2023.

The book value of securities pledged as collateral for certain government deposits, securities sold under agreements to repurchase, and certain lines of credit with correspondent banks at September 30, 2024 and December 31, 2023 was $ 1.4 billion and $ 2.1 billion, respectively.

These balances were well in excess of required amounts in order to operationally provide significant reserve amounts for new business.

As of June 30, 2024 and December 31, 2023, there were no holdings of securities of any one issuer, other than the U.S.

As of September 30, 2024 and December 31, 2023, there were no holdings of securities of any one issuer, other than the U.S.

Government and U.S.

4 unchanged sentences

A substantial portion of the Bank's loan portfolio consists of loans to businesses secured by real estate and other business assets.

HFI Loans, net of unamortized deferred fees and costs, at June 30, 2024 and December 31, 2023 are summarized by portfolio segment as follows:

June 30, 2024 December 31, 2023

HFI Loans, net of unamortized deferred fees and costs, at September 30, 2024 and December 31, 2023 are summarized by portfolio segment as follows:

September 30, 2024 December 31, 2023

(dollars in thousands, except amounts in the footnote) Amount % Amount %

12 unchanged sentences

$ 7,858,402 $ 7,882,755

(1) Excludes accrued interest receivable of $ 46.8 million and $ 45.3 million at June 30, 2024 and December 31, 2023, respectively, which were recorded in other assets on the Consolidated Balance Sheets.

Unamortized net deferred costs amounted to $ 21.9 million and $ 27.0 million at June 30, 2024 and December 31, 2023, respectively.

As of June 30, 2024 and December 31, 2023, the Bank serviced $ 150.9 million and $ 328.0 million, respectively, of multifamily FHA loans, SBA loans and other loan participations that are not reflected as loan balances on the Consolidated Balance Sheets.

During the six months ended June 30, 2024, the Company sold the servicing rights to all FHA loans.

(1) Excludes accrued interest receivable of $ 43.4 million and $ 45.3 million at September 30, 2024 and December 31, 2023, respectively, which were recorded in other assets on the Consolidated Balance Sheets.

Unamortized net deferred costs amounted to $ 20.7 million and $ 27.0 million at September 30, 2024 and December 31, 2023, respectively.

As of September 30, 2024 and December 31, 2023, the Bank serviced $ 56.0 million and $ 328.0 million, respectively, of SBA loans and other loan participations that are not reflected as loan balances on the Consolidated Balance Sheets.

During the nine months ended September 30, 2024, the Company sold the servicing rights to all FHA loans.

Real estate loans are secured primarily by duly recorded first deeds of trust or mortgages.

21 unchanged sentences

The Company's loan portfolio includes acquisition, development and construction ("ADC") real estate loans including both investment and owner-occupied projects.

ADC loans amounted to $ 1.7 billion at June 30, 2024.

ADC loans amounted to $ 1.8 billion at September 30, 2024.

A portion of the ADC portfolio, both speculative and non-speculative, includes loan-funded interest reserves at origination.

ADC loans that provide for the use of interest reserves represent approximately 62.8 % of the outstanding ADC loan portfolio at June 30, 2024.

ADC loans that provide for the use of interest reserves represent approximately 59.6 % of the outstanding ADC loan portfolio at September 30, 2024.

The decision to establish a loan-funded interest reserve is made upon origination of the ADC loan and is based upon a number of factors considered during underwriting of the credit, including:

14 unchanged sentences

If a project has not performed as expected, it is not the customary practice of the Company to increase loan funded interest reserves.

The following table details activity in the ACL by portfolio segment for the three and six months ended June 30, 2024 and 2023.

The following table details activity in the ACL by portfolio segment for the three and nine months ended September 30, 2024 and 2023.

PPP loans are excluded from these tables since they do not carry an allowance for credit loss, as these loans are fully guaranteed as to principal and interest by the SBA, whose guarantee is backed by the full faith and credit of the U.S.

1 unchanged sentence

(dollars in thousands) Commercial Income-Producing Commercial Real Estate Owner-Occupied -Commercial Real Estate Real Estate Mortgage Residential Construction - Commercial and Residential Construction - C&I (Owner-Occupied) Home Equity Other Consumer Total

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Allowance for credit losses:

5 unchanged sentences

Ending balance $ 20,303 $ 53,312 $ 20,071 $ 738 $ 15,417 $ 1,297 $ 700 $ 29 $ 111,867

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Allowance for credit losses:

5 unchanged sentences

Ending balance $ 20,303 $ 53,312 $ 20,071 $ 738 $ 15,417 $ 1,297 $ 700 $ 29 $ 111,867

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Allowance for credit losses:

5 unchanged sentences

Ending balance $ 16,337 $ 40,693 $ 14,252 $ 864 $ 8,633 $ 1,894 $ 634 $ 25 $ 83,332

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Allowance for credit losses:

5 unchanged sentences

Ending balance $ 16,337 $ 40,693 $ 14,252 $ 864 $ 8,633 $ 1,894 $ 634 $ 25 $ 83,332

The following table presents the amortized cost basis of collateral-dependent HFI loans by class of loans as of June 30, 2024 and December 31, 2023:

June 30, 2024 December 31, 2023

The following table presents the amortized cost basis of collateral-dependent HFI loans by class of loans as of September 30, 2024 and December 31, 2023:

September 30, 2024 December 31, 2023

Business/Other Business/Other

33 unchanged sentences

to Term Total

June 30, 2024

September 30, 2024

Pass $ 141,608 $ 27,799 $ 140,443 $ 121,922 $ 120,991 $ 67,565 $ 457,999 $ 5,967 $ 1,084,294

15 unchanged sentences

Total 758,232 34,479 220,650 47,551 138,686 76,133 509 — 1,276,240

YTD Gross Charge-offs ( 3,800 ) — — — — — — — — ( 3,800 )

Real estate mortgage - residential

Pass 22,324 2,450 14,340 12,235 5,874 — — — 57,223

Substandard 1,693 — — — — — — — 1,693

Total 22,324 2,450 14,340 12,235 5,874 — — — 57,223

YTD Gross Charge-offs — — — — — — — — —

Construction - commercial and residential

5 unchanged sentences

Pass 6,212 49,996 — 35,098 8,514 — 842 — 100,662

Total 6,212 49,996 — 35,098 8,514 — 842 — 100,662

Pass 1,481 71 35 116 — — 49,175 400 51,278

3 unchanged sentences

Pass 3 — — — — 69 96 1 169

Substandard — — — — — — 11 — 11

Total 3 — — — — 69 96 1 169

12 unchanged sentences

Pass — — — 528 — — — — 528

Total — — — 528 — — — — 528

Income producing - commercial real estate

9 unchanged sentences

Total 625,980 116,382 36,659 202,776 41,907 125,934 673 21,928 1,172,239

YTD Gross Charge-offs — — — — — — — — —

Real estate mortgage - residential

2 unchanged sentences

Total 27,047 7,545 2,186 15,967 14,756 5,895 — — 73,396

YTD Gross Charge-offs — — — — — — — — —

Construction - commercial and residential

8 unchanged sentences

Total 1,590 36 87 151 118 — 49,097 885 51,964

YTD Gross Charge-offs — — — — — — — — —

Other consumer

10 unchanged sentences

Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The following table presents, by portfolio segment, the nonaccrual HFI loans on amortized cost basis as of June 30, 2024 and December 31, 2023:

The following table presents, by portfolio segment, the nonaccrual HFI loans amortized cost basis as of September 30, 2024 and December 31, 2023:

(dollars in thousands, except amounts in footnotes) Nonaccrual with No Allowance for Credit Losses Nonaccrual with an Allowance for Credit Losses Total Nonaccrual Loans

June 30, 2024

September 30, 2024

Commercial $ 1,479 $ 451 $ 1,930

13 unchanged sentences

$ 62,006 $ 3,518 $ 65,524

(1) Gross coupon interest income of approximately $ 2.9 million and $ 1.1 million would have been recorded for the six months ended June 30, 2024 and 2023, respectively, if nonaccrual loans shown above had been current and in accordance with their original terms, while no coupon interest income was actually recorded on such loans for the six months ended June 30, 2024 and 2023, respectively.

The table presents, by portfolio segment, an aging analysis and the recorded investments in HFI loans past due, on an amortized cost basis as of June 30, 2024 and December 31, 2023:

(1) Gross coupon interest income of approximately $ 5.9 million and $ 4.1 million would have been recorded for the nine months ended September 30, 2024 and 2023, respectively, if nonaccrual loans shown above had been current and in accordance with their original terms, while no coupon interest income was actually recorded on such loans for the nine months ended September 30, 2024 and 2023, respectively.

The table presents, by portfolio segment, an aging analysis and the recorded investments in HFI loans past due, on an amortized cost basis as of September 30, 2024 and December 31, 2023:

(dollars in thousands) Loans 30-59 Days Past Due Loans 60-89 Days Past Due Loans 90 Days or More Past Due Total Past Due Loans Current Loans Nonaccrual Loans Total Recorded Investment in Loans

June 30, 2024

September 30, 2024

Commercial $ 66 $ 17,996 $ — $ 18,062 $ 1,134,357 $ 1,930 $ 1,154,349

35 unchanged sentences

The allowance may be increased, adjustments may be made in the allocation of the allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan.

The following tables present the amortized cost basis as of June 30, 2024 and 2023 and the financial effect of HFI loans modified to borrowers experiencing financial difficulty during the three and six months ended June 30, 2024 and 2023:

June 30, 2024

The following tables present the amortized cost basis as of September 30, 2024 and 2023 and the financial effect of HFI loans modified to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2024 and 2023:

September 30, 2024

(dollars in thousands) Term Extension Combination - Term Extension and Principal Payment Delay Combination - Interest Rate Reduction and Principal Payment Delay Combination - Term Extension, Principal Payment Delay and Interest Rate Reduction Total Percentage of Total Loan Type Weighted Average Term and Principal Payment Extension Weighted Average Interest Rate Reduction

Three months ended June 30, 2024

Three months ended September 30, 2024

Commercial $ 11,328 $ 28,776 $ — $ — $ 40,104 3.5 % 10 months — %

Income producing - commercial real estate 27,535 69,023 — — 96,558 2.3 % 12 months — %

Owner occupied - commercial real estate 876 — — — 876 0.1 % 12 months — %

Construction - commercial and residential — 11,012 — — 11,012 1.0 % 9 months — %

Owner occupied - commercial real estate — — — — — — % — — %

Construction - commercial and residential — — — — — — % — — %

Total $ 38,863 $ 97,799 $ — $ — $ 136,662

Six months ended June 30, 2024:

Nine months ended September 30, 2024:

Commercial $ 27,325 $ 28,776 7,831 $ — $ 63,932 5.5 % 13 months 1.63 %

3 unchanged sentences

Total $ 55,734 $ 211,657 $ 7,831 $ 3,513 $ 278,735

June 30, 2023

September 30, 2023

Three months ended June 30, 2023

Three months ended September 30, 2023:

Commercial $ 29,898 $ — $ — $ — $ 29,898 2.1 % 4 months — %

1 unchanged sentence

Owner occupied - commercial real estate — 19,125 — — 19,125 1.6 % 3 months — %

Construction - commercial and residential 6,971 — — — 6,971 0.8 % 6 months

Total $ 37,088 $ 74,774 $ — $ 113,833 $ 225,695

Six months ended June 30, 2023:

Nine months ended September 30, 2023:

Commercial $ 36,969 $ — $ — $ — $ 36,969 2.6 % 7 months — %

4 unchanged sentences

The following table presents the performance of HFI loans modified during the prior twelve months to borrowers experiencing financial difficulty:

June 30, 2024

September 30, 2024

Payment Status (Amortized Cost Basis)

8 unchanged sentences

To determine the existence of a payment default, the Company analyzes the economic conditions that exist for each borrower and their ability to generate positive cash flow during a given loan's term.

The following table presents the amortized cost basis of HFI loans that were experiencing payment default at June 30, 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty:

June 30, 2024

The following table presents the amortized cost basis of HFI loans that were experiencing payment default as of September 30, 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty:

September 30, 2024

Amortized Cost Basis

11 unchanged sentences

A lease is defined as a contract that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration.

Substantially all of the leases in which the Company is the lessee comprise real estate property for branch offices, ATM locations, and corporate office space.

Substantially all of our leases are classified as operating leases, and are included in operating lease right-of-use ("ROU") assets and operating lease liabilities in the Consolidated Balance Sheets.

As of June 30, 2024 and December 31, 2023, the Company had $ 16.3 million and $ 19.1 million of operating lease ROU assets, respectively, and $ 20.0 million and $ 23.2 million of operating lease liabilities, respectively, on the Company's Consolidated Balance Sheets.

Substantially all of the leases in which the Company is the lessee comprise real estate for branch offices, ATM locations, and corporate office space.

Substantially all of our leases are classified as operating leases and are included in operating lease right-of-use ("ROU") assets and operating lease liabilities on the Consolidated Balance Sheets.

As of September 30, 2024 and December 31, 2023, the Company had $ 15.2 million and $ 19.1 million of operating lease ROU assets, respectively, and $ 18.8 million and $ 23.2 million of operating lease liabilities, respectively, on the Company's Consolidated Balance Sheets.

The Company elects not to recognize ROU assets and lease liabilities arising from short-term leases, leases with initial terms of twelve months or less, or equipment leases (deemed immaterial) on the Consolidated Balance Sheets.

1 unchanged sentence

If these criteria are not met, the options are not included in ROU assets and lease liabilities.

As of June 30, 2024, the Company's leases do not contain material residual value guarantees or impose restrictions or covenants related to dividends or its ability to incur additional financial obligations.

During the six months ended June 30, 2024, the Company did not enter into new leases nor renew or extend any leases.

The Company had two leases expire during that period.

As of September 30, 2024, the Company's leases do not contain material residual value guarantees or impose restrictions or covenants related to dividends or its ability to incur additional financial obligations.

During the nine months ended September 30, 2024, the Company did not enter into new leases nor renew any leases.

However, during the same period, the Company did extend two existing leases, one each in Maryland and District of Columbia, and two additional leases expired.

The following table presents lease costs and other lease information.

Three Months Ended Six Months Ended

(dollars in thousands) June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Three Months Ended Nine Months Ended

(dollars in thousands) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Operating lease cost (cost resulting from lease payments) $ 1,525 $ 1,604 $ 4,691 $ 4,987

3 unchanged sentences

Operating lease - operating cash flows (fixed payments) $ 1,703 $ 1,760 $ 5,212 $ 5,433

(dollars in thousands) June 30, 2024 December 31, 2023

(dollars in thousands) September 30, 2024 December 31, 2023

Right-of-use assets - operating leases $ 15,167 $ 19,129

2 unchanged sentences

Weighted average discount rate - operating leases 2.63 % 2.78 %

Future minimum payments for operating leases with initial or remaining terms of more than one year as of June 30, 2024 were as follows:

Future minimum payments for operating leases with initial or remaining terms of more than one year as of September 30, 2024 were as follows:

(dollars in thousands)

Twelve months ended:

June 30, 2025 $ 6,796

June 30, 2026 4,276

June 30, 2027 2,832

June 30, 2028 2,278

June 30, 2029 1,981

September 30, 2025 $ 6,821

September 30, 2026 3,580

September 30, 2027 2,753

September 30, 2028 2,207

September 30, 2029 1,857

Thereafter 2,413

6 unchanged sentences

Assets Additions Accumulated

Amortization Impairment

June 30, 2024:

Amortization Impairment Net

September 30, 2024:

Goodwill $ 104,168 $ — $ — $ ( 104,168 ) $ —

11 unchanged sentences

Assumptions related to loan terms and amortization are made to arrive at the initial recorded values.

During the three months ended June 30, 2024, Management determined that a triggering event had occurred as a result of the share price trading under book value for more than four quarters.

During the past twelve months ended June 30, 2024, changes in macroeconomic conditions and market volatility resulting from rising interest rates resulted in a sustained decrease in the Company’s stock price.

Management performed an interim quantitative impairment test, resulting in the impairment charge on its only reporting unit as of May 31, 2024 and determined that goodwill had become fully impaired, which resulted in an impairment charge of $ 104.2 million to reduce fully the carrying value of the Company's goodwill.

The goodwill is primarily related to the acquisition of the Virginia Heritage Bank in October 2014.

The impairment charge did not impact our cash, liquidity ratios, core operating performance, or regulatory capital ratios.

As a result of the triggering event, the Company engaged a third-party service provider to assist Management with the determination of the fair value of the Company in the second quarter of 2024.

The goodwill impairment charge of $ 104.2 million reduced fully the carrying value of the Company's goodwill as of May 31, 2024.

The impaired goodwill is primarily related to the acquisition of the Virginia Heritage Bank in October 2014.

The impairment charge did not impact our cash flows, liquidity ratios, core operating performance, or regulatory capital ratios.

The Company is exposed to certain risks arising from both its business operations and economic conditions.

3 unchanged sentences

The Company historically utilized interest rate swaptions, accounted for as cash flow hedges, to protect itself against adverse fluctuations in interest rates on a forecasted issuance of debt.

During the six months ended June 30, 2024, the Company terminated its interest rate swaption contracts.

The Company expects to reclassify $ 89 thousand out of accumulated other comprehensive loss over the succeeding twelve months as a reduction of interest expense.

During the quarter ended March 31, 2024, the Company terminated its interest rate swaption contracts and discontinued the associated hedging relationship.

The amount in accumulated other comprehensive loss related to the swaption contracts is being amortized over the remainder of the hedged transaction.

The Company expects to reclassify the remaining $ 57 thousand out of accumulated other comprehensive loss over the next two quarters as a reduction of interest expense.

Interest Rate Products

3 unchanged sentences

As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings.

At September 30, 2024, the Company had posted $ 10.2 million of cash collateral with other financial institutions and held $ 9.2 million of cash collateral on behalf of other financial institutions.

The Company entered into credit risk participation agreements ("RPAs") with institutional counterparties, under which the Company assumes its pro-rata share of the credit exposure associated with a borrower's performance related to interest rate derivative contracts in exchange for a fee.

10 unchanged sentences

3) if the Company fails to maintain its status as a well-capitalized institution then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements.

The table below identifies the balance sheet category and fair value of the Company's derivative instruments as of June 30, 2024 and December 31, 2023.

The table below identifies the balance sheet category and fair value of the Company's derivative instruments as of September 30, 2024 and December 31, 2023.

The Company has a minimum collateral posting threshold with its derivative counterparty.

If the Company had breached any provisions under the agreement at June 30, 2024, it could have been required to settle its obligations under the agreement at the termination value.

June 30, 2024 December 31, 2023

If the Company had breached any provisions under the agreement at September 30, 2024, it could have been required to settle its obligations under the agreement at the termination value.

September 30, 2024 December 31, 2023

(dollars in thousands) Notional

14 unchanged sentences

Interest rate product $ 755,156 $ 30,588 Other liabilities $ 654,757 $ 30,555 Other liabilities

The table below presents the effect of the Company's derivative financial instruments on the Consolidated Statements of Operations for the three and six months ended June 30, 2024 and 2023:

The table below presents the effect of the Company's derivative financial instruments on the Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023:

The Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Operations

Amount of Gain (Loss) Recognized in Income on Derivatives

Location of Gain (Loss) Recognized in Income on Derivatives Three Months Ended June 30, Six Months Ended June 30,

Location of Gain (Loss) Recognized in Income on Derivatives Three Months Ended September 30, Nine Months Ended September 30,

(dollars in thousands) 2024 2023 2024 2023

Interest rate products Other income / (other expense) $ 843 $ 3,027 $ 1,321 $ 3,735

Mortgage banking derivatives Gain on sale of loans — ( 29 ) — ( 93 )

Total $ 239 $ 1,029 $ 478 $ 615

The following table provides information regarding the Bank’s deposit composition at June 30, 2024 and December 31, 2023:

(dollars in thousands) June 30, 2024 December 31, 2023

The following table provides information regarding the Bank’s deposit composition at September 30, 2024 and December 31, 2023:

(dollars in thousands) September 30, 2024 December 31, 2023

Noninterest-bearing demand $ 1,609,823 $ 2,279,081

3 unchanged sentences

Total $ 8,540,850 $ 8,808,039

The remaining maturity of time deposits at June 30, 2024 and December 31, 2023 were as follows:

(dollars in thousands) June 30, 2024 December 31, 2023

The remaining maturity of time deposits at September 30, 2024 and December 31, 2023 were as follows:

(dollars in thousands) September 30, 2024 December 31, 2023

2024 $ 411,016 $ 1,445,395

4 unchanged sentences

Total $ 2,710,908 $ 2,217,467

As of June 30, 2024 and December 31, 2023, time deposit accounts in excess of $250 thousand were as follows:

(dollars in thousands) June 30, 2024 December 31, 2023

As of September 30, 2024 and December 31, 2023, time deposit accounts in excess of $250 thousand were as follows:

(dollars in thousands) September 30, 2024 December 31, 2023

Three months or less $ 187,180 $ 119,880

3 unchanged sentences

Total $ 1,651,562 $ 1,533,094

At June 30, 2024, total brokered deposits were $ 3.9 billion or 46.9 % of total deposits, of which $ 1.5 billion were attributable to the Certificates of Deposit Account Registry Service ("CDARS") and Insured Cash Sweep ("ICS") two-way accounts.

At September 30, 2024, total brokered deposits were $ 3.6 billion or 42.5 % of total deposits, of which $ 1.4 billion were attributable to the Certificates of Deposit Account Registry Service ("CDARS") and Insured Cash Sweep ("ICS") two-way accounts.

At December 31, 2023, total brokered deposits (excluding the CDARS and ICS two-way) were $ 2.5 billion, or 28.8 % of total deposits.

The following table summarizes the Company’s borrowings, which include repurchase agreements with the Company’s customers and borrowings, at June 30, 2024 and December 31, 2023:

The following table summarizes the Company’s borrowings, which include repurchase agreements with the Company’s customers and borrowings, at September 30, 2024 and December 31, 2023:

(dollars in thousands) Borrowings - Principal Unamortized Deferred Issuance Costs Net Borrowings Outstanding Available Capacity (1)

Maturity Dates Interest Rates (2)

June 30, 2024:

September 30, 2024:

Customer repurchase agreements $ 32,040 $ — $ 32,040 $ — N/A 3.31 %

Short-term borrowings:

Secured borrowings:

FHLB 590,000 — 590,000 1,318,817 September 25, 2024 5.38 %

FHLB 240,000 — 240,000 1,203,126 April 1, 2025 5.20 %

BTFP 1,000,000 — 1,000,000 — January 15, 2025 4.76 %

1 unchanged sentence

Raymond James repurchase agreement — — — 18,604 N/A N/A

Subordinated notes

Subordinated notes — — — — N/A N/A

Total 1,240,000 — 1,240,000 3,061,282

Long-term borrowings:

77,665 ( 1,853 ) 75,812 — September 30, 2029 10.00 %

2 unchanged sentences

Customer repurchase agreements $ 30,587 $ — $ 30,587 $ — N/A 3.42 %

Short-term borrowings:

Secured borrowings:

3 unchanged sentences

Raymond James repurchase agreement — — — 17,993 N/A N/A

Subordinated notes

70,000 ( 82 ) 69,918 — September 1, 2024 5.75 %

Subordinated notes 70,000 ( 82 ) 69,918 — September 1, 2024 5.75 %

Long-term borrowings:

Total borrowings $ 1,400,587 $ ( 82 ) $ 1,400,505 $ 2,490,213

(1) Available capacity on the Company's borrowing arrangements with the FHLB, the FRB and the Raymond James repurchase line comprise pledged collateral that has not been borrowed against.

At June 30, 2024, the Company had total additional undrawn borrowing capacity of approximately $ 3.4 billion, comprising unencumbered securities available to be pledged of approximately $ 151.2 million and undrawn financing on pledged assets of $ 3.3 billion.

At September 30, 2024, the Company had total additional undrawn borrowing capacity of approximately $ 4.0 billion, comprising unencumbered securities available to be pledged of approximately $ 892.9 million and undrawn financing on pledged assets of $ 3.1 billion.

(2) Represent the weighted average interest rate on customer repurchase agreements and the borrowings outstanding and the coupon interest rate on the subordinated notes, which approximates the effective interest rate.

12 unchanged sentences

In January 2024, the Company borrowed an additional $ 500.0 million through the BTFP and refinanced $ 500.0 million under the program, both at an interest rate of 4.76 % that mature in January 2025.

On September 30, 2024, the Company closed a private placement of its 10.00 % senior unsecured debt totaling $ 77.7 million maturing on September 30, 2029 (the "2029 Senior Notes").

At September 30, 2024, the carrying value of these 2029 Senior Notes was $ 75.8 million.

which reflected $ 1.9 million in deferred financing costs that are being amortized over the life of the 2029 Senior Notes.

In connection with the issuance of the 2029 Senior Notes, the Company also entered into a registration rights agreement dated September 30, 2024 with the purchasers of the 2029 Senior Notes (the “Registration Rights Agreement”).

Pursuant to the Registration Rights Agreement, the Company is planning to file an exchange offer registration statement with the SEC to exchange the Senior Notes for substantially identical notes registered under the Securities Act.

Subordinated Notes

On August 5, 2014, the Company completed the sale of $ 70.0 million of its 5.75 % subordinated notes, due September 1, 2024 (the "2024 Notes").

The net proceeds were approximately $ 68.8 million which included $ 1.2 million in deferred financing costs, which are being amortized over the life of the 2024 Notes.

The 2024 Notes were offered to the public at par and qualify as Tier 2 capital for regulatory purposes to the fullest extent permitted under the Basel III Rule capital requirements, and were fully phased out of regulatory capital as of December 31, 2023 as they approached maturity.

Since the subordinated notes are due September 1, 2024, the Company is considering various options to finance the upcoming maturity of the subordinated debt, and the Company may seek to issue new subordinated notes or other debt securities to replace those that are maturing, or fund the maturity through other means.

Given prevailing interest rates, any new debt securities to refinance the subordinated notes are expected to have a higher interest rate than the subordinated notes.

On August 5, 2014, the Company completed the sale of $ 70.0 million of its 5.75 % subordinated notes, which matured and were repaid in September 2024 (the "2024 Notes").

The net proceeds were approximately $ 68.8 million which included $ 1.2 million in deferred financing costs, which were amortized over the life of the 2024 Notes.

The 2024 Notes were offered to the public at par and qualified as Tier 2 capital for regulatory purposes to the fullest extent permitted under the Basel III Rule capital requirements and were fully phased out of regulatory capital as of December 31, 2023 as they approached maturity.

Net Income (Loss) per Common Share

The calculation of net income per common share for the three and six months ended June 30, 2024 and 2023 was as follows:

Three Months Ended June 30, Six Months Ended June 30,

The calculation of net income (loss) per common share for the three and nine months ended September 30, 2024 and 2023 was as follows:

Three Months Ended September 30, Nine Months Ended September 30,

(dollars and shares in thousands, except per share data) 2024 2023 2024 2023

Net (loss) income $ ( 83,802 ) $ 28,692 $ ( 84,140 ) $ 52,926

Net income (loss) $ 21,815 $ 27,383 $ ( 62,325 ) $ 80,309

Average common shares outstanding 30,174 29,910 30,143 30,487

Basic net (loss) income per common share $ ( 2.78 ) $ 0.94 $ ( 2.79 ) $ 1.72

Net (loss) income $ ( 83,802 ) $ 28,692 $ ( 84,140 ) $ 52,926

Basic net income (loss) per common share $ 0.72 $ 0.91 $ ( 2.07 ) $ 2.63

Net income (loss) $ 21,815 $ 27,383 $ ( 62,325 ) $ 80,309

Average common shares outstanding 30,174 29,910 30,143 30,487

1 unchanged sentence

Average common shares outstanding-diluted 30,242 29,944 30,143 30,535

Diluted net (loss) income per common share (1)

Diluted net income (loss) per common share (1)

$ 0.72 $ 0.91 $ ( 2.07 ) $ 2.63

1 unchanged sentence

(1) For periods ended with a net loss, anti-dilutive financial instruments have been excluded from the calculation of GAAP diluted EPS.

Basic net (loss) income per share is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period.

Diluted net (loss) income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the net income (loss) of the Company.

Basic net income (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period.

Diluted net income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the net income (loss) of the Company.

The computation of diluted per share does not assume conversion or exercise of securities that would have an anti-dilutive effect on net income (loss) per share.

2 unchanged sentences

Other Comprehensive (Loss) Income

The following table presents the components of other comprehensive (loss) income for the three and six months ended June 30, 2024 and 2023.

The following table presents the components of other comprehensive (loss) income for the three and nine months ended September 30, 2024 and 2023.

(dollars in thousands) Before Tax Tax Effect Net of Tax

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Net unrealized gain on securities available-for-sale $ 46,788 $ ( 11,450 ) $ 35,338

$ 4,812 $ ( 1,183 ) $ 3,629

Reclassification adjustment for net gain included in net income ( 3 ) 1 ( 2 )

3 unchanged sentences

Net unrealized loss on derivatives ( 32 ) 7 ( 25 )

( 32 ) 8 ( 24 )

Other comprehensive income $ 48,521 $ ( 11,855 ) $ 36,666

$ 6,502 $ ( 1,577 ) $ 4,925

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Net unrealized loss on securities available-for-sale $ ( 28,150 ) $ 6,836 $ ( 21,314 )

$ ( 15,959 ) $ 3,885 $ ( 12,074 )

Reclassification adjustment for net gain included in net income ( 5 ) 1 ( 4 )

Total unrealized loss on investment securities available-for-sale ( 28,155 ) 6,837 ( 21,318 )

( 15,961 ) 3,885 ( 12,076 )

Amortization of unrealized loss on securities transferred to held-to-maturity 1,824 ( 424 ) 1,400

1 unchanged sentence

$ ( 26,331 ) $ 6,413 $ ( 19,918 )

Six Months Ended June 30, 2024

Net unrealized loss on securities available-for-sale

Nine Months Ended September 30, 2024

Net unrealized gain on securities available-for-sale

$ 44,907 $ ( 11,006 ) $ 33,901

Reclassification adjustment for net gain included in net income ( 10 ) 2 ( 8 )

( 7 ) 1 ( 6 )

Total unrealized loss on investment securities available-for-sale

Total unrealized gain on investment securities available-for-sale

44,897 ( 11,004 ) 33,893

2 unchanged sentences

Other comprehensive income $ 50,419 $ ( 12,239 ) $ 38,180

$ 1,899 $ ( 385 ) $ 1,514

Six Months Ended June 30, 2023

Net unrealized gain on securities available-for-sale

Nine Months Ended September 30, 2023

Net unrealized loss on securities available-for-sale

$ ( 20,070 ) $ 4,618 $ ( 15,452 )

Reclassification adjustment for net loss included in net income 14 ( 4 ) 10

Total unrealized gain on investment securities available-for-sale

Total unrealized loss on investment securities available-for-sale

( 20,056 ) 4,614 ( 15,442 )

Amortization of unrealized loss on securities transferred to held-to-maturity 5,638 ( 2,194 ) 3,444

Other comprehensive income

$ 11,913 $ ( 3,993 ) $ 7,920

The following table presents the changes in each component of accumulated other comprehensive income (loss), net of tax, for the three and six months ended June 30, 2024 and 2023.

Other comprehensive loss $ ( 14,418 ) $ 2,420 $ ( 11,998 )

The following table presents the changes in each component of accumulated other comprehensive income (loss), net of tax, for the three and nine months ended September 30, 2024 and 2023.

(dollars in thousands) Securities Available-For-Sale Securities Held-to-Maturity Derivatives Accumulated Other Comprehensive Income (Loss)

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Balance at beginning of period $ ( 123,689 ) $ ( 37,222 ) $ 68 $ ( 160,843 )

Other comprehensive income (loss) before reclassifications 35,338 — ( 25 ) 35,313

3,629 — ( 24 ) 3,605

Amounts reclassified from accumulated other comprehensive income (loss) ( 2 ) — — ( 2 )

1 unchanged sentence

Net other comprehensive income (loss) during period 35,336 1,355 ( 25 ) 36,666

3,627 1,322 ( 24 ) 4,925

Balance at end of period $ ( 88,353 ) $ ( 35,867 ) $ 43 $ ( 124,177 )

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Balance at beginning of period $ ( 148,897 ) $ ( 42,690 ) $ — $ ( 191,587 )

4 unchanged sentences

Balance at end of period $ ( 170,215 ) $ ( 41,290 ) $ — $ ( 211,505 )

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Balance at beginning of period $ ( 122,246 ) $ ( 39,929 ) $ ( 182 ) $ ( 162,357 )

1 unchanged sentence

Amounts reclassified from accumulated other comprehensive income (loss) ( 8 ) — — ( 8 )

( 6 ) — — ( 6 )

Amortization of unrealized loss on securities transferred to held-to-maturity — 4,062 — 4,062

Net other comprehensive (loss) income during period ( 1,443 ) 2,707 250 1,514

Net other comprehensive income (loss) during period 33,893 4,062 225 38,180

Balance at end of period $ ( 88,353 ) $ ( 35,867 ) $ 43 $ ( 124,177 )

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Balance at beginning of period $ ( 154,773 ) $ ( 44,734 ) $ — $ ( 199,507 )

2 unchanged sentences

Amortization of unrealized loss on securities transferred to held-to-maturity — 3,444 — 3,444

Net other comprehensive income during period 5,876 2,044 — 7,920

Net other comprehensive (loss) income during period ( 15,442 ) 3,444 — ( 11,998 )

Balance at end of period $ ( 170,215 ) $ ( 41,290 ) $ — $ ( 211,505 )

The following table presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three and six months ended June 30, 2024 and 2023.

The following table presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2024 and 2023.

Details about Accumulated Other Comprehensive Income (Loss) Components Amount Reclassified from Accumulated Other Comprehensive Income (Loss)

Three Months Ended June 30, Affected Line Item in Consolidated Statements of Income

Three Months Ended September 30, Affected Line Item in Consolidated Statements of Income

(dollars in thousands) 2024 2023

3 unchanged sentences

Details about Accumulated Other Comprehensive Income (Loss) Components Amount Reclassified from Accumulated Other Comprehensive Income (Loss)

Six Months Ended June 30, Affected Line Item in Consolidated Statements of Operations

Nine Months Ended September 30, Affected Line Item in Consolidated Statements of Operations

(dollars in thousands) 2024 2023

21 unchanged sentences

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

The tables below present the recorded amount of assets and liabilities measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023.

The tables below present the recorded amount of assets and liabilities measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023.

(dollars in thousands) Quoted Prices

2 unchanged sentences

(Level 3) Total Fair Value

June 30, 2024

September 30, 2024

Investment securities available-for-sale:

5 unchanged sentences

Corporate bonds — 1,798 — 1,798

Loans held for sale — 5,000 — 5,000

Interest rate product — 31,984 — 31,984

Credit risk participation agreements — 1 — 1

Total assets measured at fair value on a recurring basis $ — $ 1,464,991 $ — $ 1,464,991

20 unchanged sentences

treasury bonds, U.S.

Government and agency securities that actively traded in over-the-counter markets.

Level 2 securities includes certain U.S.

treasury bonds, U.S.

agency debt securities, MBS issued by Government Sponsored Entities and municipal bonds.

14 unchanged sentences

Those individually assessed loans not requiring a specific allowance represent loans for which the fair value of expected repayments or collateral exceed the recorded investment in such loans.

At June 30, 2024, substantially all of the Company's individually evaluated loans were evaluated based upon the fair value of the collateral.

At September 30, 2024, substantially all of the Company's individually evaluated loans were evaluated based upon the fair value of the collateral.

In accordance with ASC Topic 820, individually evaluated loans where an allowance is established based on the fair value of collateral, i.e.

10 unchanged sentences

(Level 3) Total Fair Value

June 30, 2024

September 30, 2024

Individually assessed loans:

2 unchanged sentences

Owner occupied - commercial real estate — — 33,961 33,961

Real estate mortgage - residential — — 1,698 1,698

— — 2,072 2,072

Home equity — — 257 257

Other real estate owned — — 2,743 2,743

Total assets measured at fair value on a nonrecurring basis as of June 30, 2024 $ — $ — $ 97,391 $ 97,391

Total assets measured at fair value on a nonrecurring basis as of September 30, 2024 $ — $ — $ 132,246 $ 132,246

December 31, 2023

8 unchanged sentences

Total assets measured at fair value on a nonrecurring basis as of December 31, 2023 $ — $ — $ 66,777 $ 66,777

As shown in the table above, certain assets are measured at fair value on a nonrecurring basis in accordance with GAAP.

Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets after they are evaluated for impairment.

The primary assets accounted for at fair value on a nonrecurring basis are related to collateral-dependent loans that are individually assessed and other real estate owned.

For the collateral-dependent loans and other real estate owned, the Company measures the fair value utilizing a market valuation approach, based on an appraisal conducted by an independent, licensed appraiser.

Management may discount the value from the appraisal in determining the fair value if, based on its understanding of the market conditions, the collateral had been impaired below the appraised value (Level 3).

For loans that are not collateral dependent, the Company uses an income approach, specifically, the discounted cash flow method.

The continuing payments are discounted over the expected life at the loan’s original contract rate and include adjustments for risk of default.

Fair Value of Financial Instruments

6 unchanged sentences

In addition, the estimates are only indicative of individual financial instrument values, including in certain cases, the Company's estimation of exit pricing, and should not be considered an indication of the fair value of the Company taken as a whole.

The estimated fair value of the Company's financial instruments at June 30, 2024 and December 31, 2023 are as follows:

The estimated fair value of the Company's financial instruments at September 30, 2024 and December 31, 2023 are as follows:

Fair Value Measurements

2 unchanged sentences

(Level 2) Significant Other Unobservable Inputs

June 30, 2024

September 30, 2024

Cash and due from banks $ 16,383 $ 16,383 $ 16,383 $ — $ —

1 unchanged sentence

Interest-bearing deposits with other banks 584,491 584,491 — 584,491 —

526,228 526,228 — 526,228 —

Investment securities available-for-sale 1,433,006 1,433,006 — 1,433,006 —

1 unchanged sentence

Federal Reserve and Federal Home Loan Bank stock 37,728 N/A — — —

Loans held for sale 5,000 5,000 — 5,000 —

Loans 7,970,269 7,649,112 — 7,649,112

4 unchanged sentences

Noninterest-bearing deposits $ 1,609,823 $ 1,609,823 $ — $ 1,609,823 $ —

$ 1,693,955 $ 1,693,955 $ — $ 1,693,955 $ —

Interest-bearing deposits 4,220,119 4,220,119 — 4,220,119 —

4,289,294 4,289,294 — 4,289,294 —

Time deposits 2,710,908 2,727,075 — 2,727,075 —

Customer repurchase agreements 32,040 32,040 — 32,040 —

Borrowings 1,659,979 1,659,595 — 1,659,595 —

Other short-term borrowings 1,240,000 1,240,000 — 1,240,000 —

Long-term borrowings 75,812 82,399 — 82,399

Interest rate product 30,588 30,588 — 30,588 —

4 unchanged sentences

Interest-bearing deposits with other banks 709,897 709,897 — 709,897 —

709,897 709,897 — 709,897 —

Investment securities available-for-sale 1,506,388 1,506,388 — 1,506,388 —

8 unchanged sentences

Noninterest-bearing deposits $ 2,279,081 $ 2,279,081 $ — $ 2,279,081 $ —

$ 2,279,081 $ 2,279,081 $ — $ 2,279,081 $ —

Interest-bearing deposits 4,311,491 4,311,491 — 4,311,491 —

4,311,491 4,311,491 — 4,311,491 —

Time deposits 2,217,467 2,217,795 — 2,217,795 —

Customer repurchase agreements 30,587 30,587 — 30,587 —

Borrowings 1,369,918 1,368,621 — 1,368,621 —

Other short-term borrowings 1,369,918 1,368,621 — 1,368,621 —

Long-term borrowings — — — — —

Interest rate product 30,555 30,555 — 30,555 —

11 unchanged sentences

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.

What changed 10-Q

Item 1. Financial Statements