What changed in this filing

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Item 1. Financial Statements

2024-08-07 compared with 2024-05-08 · 316 added, 150 removed, 1244 unchanged (27% of the section changed)

3 unchanged sentences

(Amounts in thousands except share data)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Cash and due from banks $ 6,162 $ 8,269

46 unchanged sentences

First Internet Bancorp

Condensed Consolidated Statements of Operations– Unaudited

Condensed Consolidated Statements of Income – Unaudited

(Amounts in thousands except share and per share data)

Three Months Ended

March 31, 2024 March 31, 2023

Three Months Ended Six Months Ended

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Interest Income

11 unchanged sentences

Benefit for credit losses - debt securities held to maturity ( 2 ) — ( 64 ) —

(Benefit) provision for credit losses - off-balance sheet commitments ( 72 ) 42

Provision for credit losses - off-balance sheet commitments 113 945 41 987

Net Interest Income After Provision for Credit Losses 17,296 16,447 35,582 26,606

19 unchanged sentences

Income Tax Provision (Benefit) 218 ( 234 ) 647 ( 2,566 )

Net Income (Loss) $ 5,181 $ ( 3,017 )

Income (Loss) Per Share of Common Stock

Net Income $ 5,775 $ 3,882 $ 10,956 $ 865

Income Per Share of Common Stock

Basic $ 0.67 $ 0.44 $ 1.26 $ 0.10

6 unchanged sentences

First Internet Bancorp

Condensed Consolidated Statements of Comprehensive Income (Loss)– Unaudited

Condensed Consolidated Statements of Comprehensive Income – Unaudited

(Amounts in thousands)

Three Months Ended March 31,

Net income (loss) $ 5,181 $ ( 3,017 )

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

2024 2023 2024 2023

Net income $ 5,775 $ 3,882 $ 10,956 $ 865

Other comprehensive (loss) income

6 unchanged sentences

Income tax provision 46 49 103 95

Net effect on other comprehensive (loss) income 177 112

Net effect on other comprehensive income 142 157 319 269

Cash flow hedges

Net unrealized holding gains (losses) on cash flow hedging derivatives recorded within other comprehensive (loss) income before income tax 902 ( 2,170 )

Income tax provision (benefit) 207 ( 499 )

Net unrealized holding (losses) gains on cash flow hedging derivatives recorded within other comprehensive income (loss) before income tax ( 262 ) 2,094 640 ( 76 )

Income tax (benefit) provision ( 60 ) 481 147 ( 18 )

Net effect on other comprehensive (loss) income ( 202 ) 1,613 493 ( 58 )

Total other comprehensive (loss) income ( 485 ) ( 1,933 ) ( 1,212 ) 450

Comprehensive income (loss) $ 4,454 $ ( 634 )

Comprehensive income $ 5,290 $ 1,949 $ 9,744 $ 1,315

See Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

Condensed Consolidated Statements of Changes in Shareholders’ Equity - Unaudited

Three Months Ended March 31, 2024 and 2023

Six Months Ended June 30, 2024 and 2023

(Amounts in thousands except share and per share data)

11 unchanged sentences

( 283 ) — — ( 283 )

Excise tax on repurchase of common stock ( 3 ) — — ( 3 )

Deferred stock rights and restricted stock units issued in lieu of cash dividends payable on outstanding deferred stock rights and restricted stock units 2 — — 2

Common stock redeemed for the net settlement of share-based awards ( 142 ) — — ( 142 )

Balance, March 31, 2024 $ 184,720 $ 212,121 $ ( 30,102 ) $ 366,739

Balance, June 30, 2024 $ 185,175 $ 217,365 $ ( 30,587 ) $ 371,953

Balance, January 1, 2023 $ 192,935 $ 205,675 $ ( 33,636 ) $ 364,974

10 unchanged sentences

Common stock redeemed for the net settlement of share-based awards ( 106 ) — — ( 106 )

Balance, March 31, 2023 $ 189,202 $ 197,623 $ ( 31,253 ) $ 355,572

Balance, June 30, 2023 $ 186,545 $ 200,973 $ ( 33,186 ) $ 354,332

1 Reflects the impact of adopting Accounting Standards Update (“ASU”) 2016-13.

1 unchanged sentence

First Internet Bancorp

Condensed Consolidated Statements of Changes in Shareholders’ Equity - Unaudited

Three Months Ended June 30, 2024 and 2023

(Amounts in thousands except per share data)

Stock Retained

Earnings Accumulated

Comprehensive

Shareholders’

Balance, April 1, 2024 184,720 $ 212,121 $ ( 30,102 ) $ 366,739

Net income — 5,775 — 5,775

Other comprehensive loss — — ( 485 ) ( 485 )

Dividends declared ($ 0.06 per share)

— ( 531 ) — ( 531 )

Recognition of the fair value of share-based compensation 458 — — 458

Excise tax on repurchase of common stock ( 3 ) — — ( 3 )

Balance, June 30, 2024 $ 185,175 $ 217,365 $ ( 30,587 ) $ 371,953

Balance, April 1, 2023 $ 189,202 $ 197,623 $ ( 31,253 ) $ 355,572

Net income — 3,882 — 3,882

Other comprehensive loss — — ( 1,933 ) ( 1,933 )

Dividends declared ($ 0.06 per share)

— ( 532 ) — ( 532 )

Recognition of the fair value of share-based compensation 115 — — 115

Repurchased shares of common stock ( 85,000 )

( 2,745 ) ( 2,745 )

Excise tax on repurchase of common stock ( 27 ) — — ( 27 )

Balance, June 30, 2023 $ 186,545 $ 200,973 $ ( 33,186 ) $ 354,332

See Notes to Condensed Consolidated Financial Statements

First Internet Bancorp

Condensed Consolidated Statements of Cash Flows – Unaudited

(Amounts in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating Activities

Net income (loss) $ 5,181 $ ( 3,017 )

Net income $ 10,956 $ 865

Adjustments to reconcile net income to net cash used in operating activities:

6 unchanged sentences

Gain on loans sold ( 14,828 ) ( 9,400 )

Gain on sale of other real estate owned ( 31 ) —

Decrease in fair value of loans held-for-sale — 143

Gain on derivatives 1,803 368

Gain on bank-owned life insurance ( 149 ) —

Loan servicing asset revaluation 1,263 413

1 unchanged sentence

Net change in accrued expenses and other liabilities ( 1,305 ) ( 2,625 )

Net cash provided by operating activities 2,791 5,898

Net cash provided by (used in) by operating activities 18,816 ( 4,844 )

Investing Activities

Net loan activity, excluding purchases ( 57,851 ) ( 37,490 )

Proceeds from sale of other real estate owned 406 —

Maturities and calls of securities available-for-sale 33,701 25,446

3 unchanged sentences

Purchase of premises and equipment ( 1,496 ) ( 3,132 )

Proceeds from bank-owned life insurance 737 —

Loans purchased ( 64,944 ) ( 118,813 )

9 unchanged sentences

Net cash provided by financing activities 165,463 402,980

Net Increase in Cash and Cash Equivalents 75,366 47,420

Net (Decrease) Increase in Cash and Cash Equivalents ( 9,112 ) 209,079

Cash and Cash Equivalents, Beginning of Period 405,898 256,552

16 unchanged sentences

In our opinion, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation have been included.

The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results expected for the year ending December 31, 2024 or any other period.

The March 31, 2024 condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the First Internet Bancorp Annual Report on Form 10-K for the year ended December 31, 2023.

The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results expected for the year ending December 31, 2024 or any other period.

The June 30, 2024 condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the First Internet Bancorp Annual Report on Form 10-K for the year ended December 31, 2023.

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, or assumptions that could have a material effect on the carrying value of certain assets and liabilities.

5 unchanged sentences

It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations, and cash flows of the Company.

Earnings (Loss) Per Share

Earnings (loss) per share of common stock are based on the weighted-average number of basic shares and dilutive shares outstanding during the period.

The following is a reconciliation of the weighted-average common shares for the basic and diluted earnings (loss) per share computations for the three months ended March 31, 2024 and 2023.

(dollars in thousands, except share and per share data) Three Months Ended March 31,

Basic earnings (loss) per share

Net income (loss) $ 5,181 $ ( 3,017 )

Earnings Per Share

Earnings per share of common stock are based on the weighted-average number of basic shares and dilutive shares outstanding during the period.

The following is a reconciliation of the weighted-average common shares for the basic and diluted earnings per share computations for the three and six months ended June 30, 2024 and 2023.

(dollars in thousands, except share and per share data) Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Basic earnings per share

Net income $ 5,775 $ 3,882 $ 10,956 $ 865

Weighted-average common shares 8,594,315 8,903,213 8,684,093 8,963,308

Basic earnings (loss) per common share $ 0.60 $ ( 0.33 )

Basic earnings per common share $ 0.67 $ 0.44 $ 1.26 $ 0.10

Diluted earnings per share

Net income (loss) $ 5,181 $ ( 3,017 )

Net income $ 5,775 $ 3,882 $ 10,956 $ 865

Weighted-average common shares 8,594,315 8,903,213 8,684,093 8,963,308

1 unchanged sentence

Weighted-average common and incremental shares 8,656,215 8,908,180 8,750,017 8,980,262

Diluted earnings (loss) per common share 1

Diluted earnings per common share 1

$ 0.67 $ 0.44 $ 1.25 $ 0.10

1 Potential dilutive common shares are excluded from the computation of diluted EPS in the periods where the effect would be antidilutive.

There were no antidilutive shares for the three months ended March 31, 2024.

Since the Company was in a loss position for the three months ended March 31, 2023, basic net loss is the same as diluted net loss per share, as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive.

The following tables summarize securities AFS and securities HTM as of March 31, 2024 and December 31, 2023.

March 31, 2024

There were no antidilutive shares for both the three and six months ended June 30, 2024.

Excluded from the computation of diluted EPS were weighted-average antidilutive shares totaling 79,313 and 35,033 for the three and six months ended June 30, 2023, respectively.

The following tables summarize securities AFS and securities HTM as of June 30, 2024 and December 31, 2023.

June 30, 2024

Amortized Gross Unrealized Fair

10 unchanged sentences

Total available-for-sale $ 529,657 $ 1,139 $ ( 42,224 ) $ 488,572

March 31, 2024

June 30, 2024

Amortized Cost Gross Unrealized Fair Value Allowance for Credit Losses Net Carrying Value

6 unchanged sentences

Total held-to-maturity $ 270,578 $ 15 $ ( 23,163 ) $ 247,430 $ ( 229 ) $ 270,349

1 Includes $ 0.3 million of additional premium related to terminated interest rate swaps associated with agency mortgage-backed securities - residential as of March 31, 2024.

1 Includes $ 0.3 million of additional premium related to terminated interest rate swaps associated with agency mortgage-backed securities - residential as of June 30, 2024 .

December 31, 2023

22 unchanged sentences

1 Includes $ 0.4 million of additional premium related to terminated interest rate swaps associated with agency mortgage-backed securities - residential as of December 31, 2023.

Accrued interest receivable on AFS and HTM securities at March 31, 2024 was $ 2.7 million and $ 1.1 million, respectively, compared to $ 2.9 million and $ 1.2 million, respectively, at December 31, 2023, and is included in accrued interest receivable on the condensed consolidated balance sheet.

Accrued interest receivable on AFS and HTM securities at June 30, 2024 was $ 2.8 million and $ 1.3 million, respectively, compared to $ 2.9 million and $ 1.2 million, respectively, at December 31, 2023, and is included in accrued interest receivable on the condensed consolidated balance sheet.

The Company elected to exclude all accrued interest receivable from securities when estimating credit losses.

At both March 31, 2024 and December 31, 2023, over 95 % of mortgage-backed securities (including both AFS and HTM) held by the Company are issued by U.S.

At both June 30, 2024 and December 31, 2023, over 95 % of mortgage-backed securities (including both AFS and HTM) held by the Company are issued by U.S.

government-sponsored entities and agencies.

6 unchanged sentences

As a result, the Company recorded in an initial ACL in retained earnings of $ 0.3 million on January 1, 2023.

The Company reevaluated these securities at March 31, 2024 and determined no additional ACL was necessary.

The carrying value of securities at March 31, 2024 is shown below by their contractual maturity date.

The Company reevaluated these securities at June 30, 2024 and determined no additional ACL was necessary.

The carrying value of securities at June 30, 2024 is shown below by their contractual maturity date.

Actual maturities will differ because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

21 unchanged sentences

Total $ 270,578 $ 247,430

There were no gross gains or losses resulting from the sale of available-for-sale securities during the three months ended March 31, 2024 and March 31, 2023, respectively.

There were no gross gains or losses resulting from the sale of available-for-sale securities during the three and six months ended June 30, 2024 and June 30, 2023, respectively.

Certain investments in debt securities are reported in the condensed consolidated financial statements at an amount less than their historical cost.

The total fair value of these investments at March 31, 2024 and December 31, 2023 was $ 587.6 million and $ 578.9 million, which was approximately 84 % and 85 %, respectively, of the Company’s AFS and HTM securities portfolios.

As of March 31, 2024, the Company’s security portfolio consisted of 530 securities, of which 469 were in an unrealized loss position.

The total fair value of these investments at June 30, 2024 and December 31, 2023 was $ 603.2 million and $ 578.9 million, which was approximately 82 % and 85 %, respectively, of the Company’s AFS and HTM securities portfolios.

As of June 30, 2024, the Company’s security portfolio consisted of 553 securities, of which 493 were in an unrealized loss position.

As of December 31, 2023, the Company’s security portfolio consisted of 512 securities, of which 434 were in an unrealized loss position.

9 unchanged sentences

The Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be upon maturity.

The following tables show the securities portfolio’s gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2024 and December 31, 2023.

March 31, 2024

June 30, 2024

Less Than 12 Months 12 Months or Longer Total

29 unchanged sentences

Total $ 73,884 $ ( 720 ) $ 302,785 $ ( 38,794 ) $ 376,669 $ ( 39,514 )

The following table summarizes ratings for the Company’s HTM portfolio issued by state and political subdivisions and other securities as of March 31, 2024.

The following tables summarize ratings for the Company’s HTM portfolio as of June 30, 2024 and December 31, 2023.

June 30, 2024

Held-to-Maturity

(in thousands) State and Municipal Other Total

(in thousands) Municipal Securities Mortgage-Backed Securities - Residential Mortgage-Backed Securities - Commercial Corporate Securities Total

AAA equivalent - agency $ — $ 213,440 $ 5,738 $ — $ 219,178

Aa1/AA+ 9,400 — — — 9,400

2 unchanged sentences

A2/A — — — 5,000 5,000

A3/A- — — — 4,504 4,504

Baa1/BBB+ — — — 8,500 8,500

2 unchanged sentences

Ba1/BB+ — — — 2,000 2,000

— 184,552 184,552

Total $ 13,371 $ 213,440 $ 5,738 $ 38,029 $ 270,578

1 HTM agency mortgage-backed securities - commercial and residential are listed under Other securities as not rated and have the explicit or implicit guarantee of the United States government.

Loan balances as of March 31, 2024 and December 31, 2023 are summarized in the table below.

December 31, 2023

Held-to-Maturity

(in thousands) Municipal Securities Mortgage-Backed Securities - Residential Mortgage-Backed Securities - Commercial Corporate Securities Total

AAA equivalent - agency $ — $ 166,750 $ 5,767 $ — $ 172,517

Aa1/AA+ 9,917 — — — 9,917

Aa2/AA 1,538 — — — 1,538

A1/A+ 1,794 — — — 1,794

A2/A 643 — — 5,000 5,643

A3/A- — — — 4,509 4,509

Baa1/BBB+ — — — 8,500 8,500

Baa2/BBB — — — 8,500 8,500

Baa3/BBB- — — — 12,528 12,528

Ba1/BB+ — — — 2,000 2,000

Total $ 13,892 $ 166,750 $ 5,767 $ 41,037 $ 227,446

Loan balances as of June 30, 2024 and December 31, 2023 are summarized in the table below.

Categories of loans include:

(in thousands) March 31, 2024 December 31, 2023

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

Commercial loans

20 unchanged sentences

Net loans $ 3,917,741 $ 3,801,446

1 Includes carrying value adjustments of $ 26.9 million and $ 27.8 million related to terminated interest rate swaps associated with public finance loans as of March 31, 2024 and December 31, 2023, respectively.

1 Includes carrying value adjustments of $ 25.6 million and $ 27.8 million related to terminated interest rate swaps associated with public finance loans as of June 30, 2024 and December 31, 2023, respectively.

Risk characteristics of each loan portfolio segment are as follows:

116 unchanged sentences

A home improvement loan generally is charged off no later than when it is 90 days past due as to principal or interest.

The following tables present changes in the balance of the ACL during the three months ended March 31, 2024 and 2023.

(in thousands) Three Months Ended March 31, 2024

The following tables present changes in the balance of the ACL during the three and six months ended June 30, 2024 and 2023.

(in thousands) Three Months Ended June 30, 2024

Allowance for credit losses:

15 unchanged sentences

Total $ 40,891 $ 3,920 $ ( 1,505 ) $ 99 $ 43,405

(in thousands) Three Months Ended March 31, 2023

(in thousands) Six Months Ended June 30, 2024

Allowance for credit losses:

Balance, Beginning of Period (Credit) Provision Charged to Expense Losses

Charged Off Recoveries Balance,

End of Period

Commercial and industrial $ 2,185 $ ( 800 ) $ — $ 4 $ 1,389

Owner-occupied commercial real estate 825 ( 264 ) — — 561

Investor commercial real estate 1,311 ( 139 ) — — 1,172

Construction 2,167 973 — — 3,140

Single tenant lease financing 8,129 322 ( 195 ) — 8,256

Public finance 1,372 ( 630 ) — — 742

Healthcare finance 1,976 ( 167 ) — — 1,809

Small business lending 6,532 6,218 ( 862 ) 105 11,993

Franchise finance 6,363 205 ( 577 ) — 5,991

Residential mortgage 2,054 126 ( 69 ) 1 2,112

Home equity 171 ( 56 ) — 3 118

Other consumer loans 5,689 714 ( 335 ) 54 6,122

Total $ 38,774 $ 6,502 $ ( 2,038 ) $ 167 $ 43,405

(in thousands) Three Months Ended June 30, 2023

Allowance for credit losses:

Balance, Beginning of Period (Credit) Provision Charged to Expense Losses

Charged Off Recoveries Balance,

End of Period

Commercial and industrial $ 1,437 $ 195 $ — $ 217 $ 1,849

Owner-occupied commercial real estate 712 77 — — 789

Investor commercial real estate 1,276 140 — — 1,416

Construction 1,551 389 — — 1,940

Single tenant lease financing 10,273 ( 303 ) — — 9,970

Public finance 1,570 ( 61 ) — — 1,509

Healthcare finance 3,695 ( 1,249 ) ( 25 ) — 2,421

Small business lending 2,340 1,599 ( 1,358 ) 37 2,618

Franchise finance 4,672 143 ( 331 ) — 4,484

Residential mortgage 2,561 ( 12 ) — 1 2,550

Home equity 254 ( 32 ) — 2 224

Other consumer loans 6,538 ( 133 ) ( 150 ) 33 6,288

Total $ 36,879 $ 753 $ ( 1,864 ) $ 290 $ 36,058

(in thousands) Six Months Ended June 30, 2023

Allowance for credit losses:

Balance, Beginning of Period Adoption of CECL (Credit) Provision Charged to Expense Losses

14 unchanged sentences

Total $ 31,737 $ 2,962 $ 10,126 $ ( 9,121 ) $ 354 $ 36,058

Accrued interest receivable on loans totaled $ 20.5 million and $ 20.9 million at March 31, 2024 and December 31, 2023, respectively, and is excluded from the estimate of credit losses.

Accrued interest receivable on loans totaled $ 28.1 million and $ 26.7 million at June 30, 2024 and December 31, 2023, respectively, and is excluded from the estimate of credit losses.

The Company made the accounting policy election to not measure an ACL for accrued interest receivable.

3 unchanged sentences

The day one entry for off-balance sheet commitments resulted in a reserve of $ 2.5 million.

The adequacy of the reserve for unfunded commitments is determined quarterly based on methodology similar to the methodology for determining the ACL.

The following tables detail activity in the provision (benefit) for credit losses on off-balance sheet commitments for the three months ended March 31, 2024 and 2023.

The adequacy of the reserve for unfunded commitments is determined quarterly based on methodology similar to the methodology for determining

The following tables detail activity in the provision (benefit) for credit losses on off-balance sheet commitments for the three and six months ended June 30, 2024.

(in thousands) Balance

March 31, 2024 Provision (Benefit) for credit losses Balance

June 30, 2024

Off-balance sheet commitments

Commercial loans

Commercial and industrial $ 193 $ ( 5 ) $ 188

Construction 3,270 150 3,420

Small business lending 159 ( 28 ) 131

Total commercial loans 3,622 117 3,739

Consumer loans

Residential mortgage 5 ( 2 ) 3

Home equity 35 ( 2 ) 33

Other consumer 11 — 11

Total consumer loans 51 ( 4 ) 47

Total allowance for off-balance sheet commitments $ 3,673 $ 113 $ 3,786

(in thousands) Balance

December 31, 2023 Provision (Benefit) for credit losses Balance

March 31, 2024

June 30, 2024

Off-balance sheet commitments

4 unchanged sentences

Construction 2,889 531 3,420

Healthcare finance — — —

Small business lending 541 ( 410 ) 131

6 unchanged sentences

Total allowance for off-balance sheet commitments $ 3,745 $ 41 $ 3,786

(in thousands) Pre-ASC 326 Adoption Impact of ASC 326 Adoption Provision (Benefit) for credit losses Balance, March 31, 2023

The following table details activity in the provision for credit losses on off-balance sheet commitments for the three and six months ended June 30, 2023.

(in thousands) Balance

March 31, 2023 Provision (Benefit) for credit losses Balance

June 30, 2023

Off-balance sheet commitments

5 unchanged sentences

Healthcare finance 2 ( 2 ) —

Small business lending — 242 242

Total commercial loans 2,361 994 3,355

5 unchanged sentences

Total allowance for off-balance sheet commitments $ 2,546 $ 945 $ 3,491

(in thousands) Pre-ASC 326 Adoption Impact of ASC 326 Adoption Provision (Benefit) for credit losses Balance

June 30, 2023

Off-balance sheet commitments

Commercial loans

Commercial and industrial $ — $ 110 $ 78 $ 188

Owner-occupied commercial real estate — — 8 8

Investor commercial real estate — 9 11 20

Construction — 2,193 704 2,897

Healthcare finance — 2 ( 2 ) —

Small business lending — — 242 242

Total commercial loans — 2,314 1,041 3,355

Consumer loans

Residential mortgage — 127 ( 68 ) 59

Home equity — 52 11 63

Other consumer — 11 3 14

Total consumer loans — 190 ( 54 ) 136

Total allowance for off-balance sheet commitments $ — $ 2,504 $ 987 $ 3,491

The Company utilizes a risk grading matrix to assign a risk grade to each of its commercial loans.

14 unchanged sentences

• “Nonperforming” - Loans that are 90 days delinquent or for which the full collection of principal and interest may be in doubt.

The following tables present the credit risk profile of the Company’s commercial and consumer loan portfolios by loan class and by year of origination for the years indicated based on rating category and payment activity as of March 31, 2024 and December 31, 2023.

March 31, 2024

June 30, 2024

Term Loans (amortized cost basis by origination year) Revolving loans amortized cost basis Revolving loans converted to term

45 unchanged sentences

Year-to-date gross charge-offs — — — — — — — — —

March 31, 2024

June 30, 2024

Term Loans (amortized cost basis by origination year) Revolving loans amortized cost basis Revolving loans converted to term

129 unchanged sentences

1 Balance in “Substandard” is partially guaranteed by the U.S.

The following tables present the Company’s loan portfolio delinquency analysis as of March 31, 2024 and December 31, 2023.

March 31, 2024

The following tables present the Company’s loan portfolio delinquency analysis as of June 30, 2024 and December 31, 2023.

June 30, 2024

(in thousands) 30-59

44 unchanged sentences

A loan is returned to accrual status when principal and interest are no longer past due and collectability is probable, typically after a minimum of nine consecutive months of performance.

There was no interest income recognized on nonaccrual loans for the three months ended March 31, 2024 and 2023.

The Company recorded less than $ 0.1 million interest income recognized on nonaccrual loans for both the six months ended June 30, 2024 and 2023.

The following table summarizes the Company’s nonaccrual loans and loans past due 90 days or more and still accruing by loan class for the periods indicated:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(in thousands) Nonaccrual Loans Nonaccrual Loans with no Allowance for Credit Losses Total Loans

Accruing Nonaccrual Loans Nonaccrual Loans with no Allowance for Credit Losses Total Loans

Commercial and industrial $ — $ — $ — $ — $ — $ —

Small business lending 1

11 unchanged sentences

Both appraised values and values based on borrower’s financial information are discounted as considered appropriate based on age and quality of the information and current market conditions.

The following tables present the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses as of March 31, 2024 and December 31, 2023.

March 31, 2024

The following tables present the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses as of June 30, 2024 and December 31, 2023.

June 30, 2024

(in thousands) Commercial Real Estate Residential Real Estate Other Total Allowance on Collateral Dependent Loans

Commercial and industrial $ — $ — $ — $ — $ —

Owner-occupied commercial real estate $ — $ — $ 1,654 $ 1,654 $ —

7 unchanged sentences

(in thousands) Commercial Real Estate Residential Real Estate Other Total Allowance on Collateral Dependent Loans

Commercial and industrial $ — $ — $ — $ — $ —

Owner-occupied commercial real estate $ — $ — $ 1,654 $ 1,654 $ —

12 unchanged sentences

Modifications to borrowers experiencing financial difficulty may include interest rate reductions, principal or interest forgiveness, forbearances, term extensions and other actions intended to minimize loss and to avoid foreclosure or repossession of collateral.

The Company did not have any loan modifications made to borrowers experiencing financial difficulty during the three months ended March 31, 2024 and 2023.

The Company did not have any loan modifications made to borrowers experiencing financial difficulty during the three and six months ended June 30, 2024 and 2023.

Other Real Estate Owned

The Company had $ 0.4 million in other real estate owned (“OREO”) as of March 31, 2024 and December 31, 2023, which consisted of two residential mortgage properties.

There were two loans totaling $ 0.5 million and one loan totaling $ 0.8 million, in the process of foreclosure at March 31, 2024 and December 31, 2023, respectively.

The Company had no other real estate owned (“OREO”) as of June 30, 2024.

The Company had $ 0.4 million in other real estate owned (“OREO”) as of December 31, 2023, which consisted of two residential mortgage properties.

There were two loans totaling $ 0.5 million and one loan totaling $ 0.8 million, in the process of foreclosure at June 30, 2024 and December 31, 2023, respectively.

Premises and Equipment

The following table summarizes premises and equipment at March 31, 2024 and December 31, 2023.

(in thousands) March 31, 2024 December 31, 2023

The following table summarizes premises and equipment at June 30, 2024 and December 31, 2023.

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

Land $ 5,598 $ 5,598

5 unchanged sentences

Total $ 72,516 $ 73,463

As of March 31, 2024 and December 31, 2023, the carrying amount of goodwill was $ 4.7 million.

There have been no changes in the carrying amount of goodwill for the three months ended March 31, 2024 or March 31, 2023.

As of June 30, 2024 and December 31, 2023, the carrying amount of goodwill was $ 4.7 million.

There have been no changes in the carrying amount of goodwill for the three and six months ended June 30, 2024 or June 30, 2023.

Goodwill is assessed for impairment annually as of August 31, or more frequently if events occur or circumstances change that indicate an impairment may exist.

5 unchanged sentences

Servicing Asset

Activity for the servicing asset and the related changes in fair value for the three months ended March 2024 and 2023 are shown in the table below.

Activity for the servicing asset and the related changes in fair value for the three and six months ended June 2024 and 2023 are shown in the table below.

Three Months Ended

(in thousands) March 31, 2024 March 31, 2023

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

Balance, beginning of period $ 11,760 $ 7,312

5 unchanged sentences

Balance, end of period $ 13,009 $ 8,252

Six Months Ended

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

Balance, beginning of period $ 10,567 $ 6,255

Originated 3,705 2,410

( 1,408 ) ( 867 )

Changes in fair value due to changes in valuation inputs or assumptions used in

the valuation model 145 454

Loan servicing asset revaluation $ ( 1,263 ) $ ( 413 )

Balance, end of period $ 13,009 $ 8,252

Loans serviced for others are not included in the condensed consolidated balance sheets.

The unpaid principal balances of these loans serviced for others as of March 31, 2024 and December 31, 2023 are shown in the table below.

(in thousands) March 31, 2024 December 31, 2023

The unpaid principal balances of these loans serviced for others as of June 30, 2024 and December 31, 2023 are shown in the table below.

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

Loan portfolios serviced for:

1 unchanged sentence

Total $ 676,497 $ 531,927

Loan servicing revenue totaled $ 1.3 million and $ 0.8 million for the three months ended March 31, 2024 and March 31, 2023, respectively.

Loan servicing asset revaluation, which represents the change in fair value of the servicing asset, resulted in a $ 0.4 million and $ 0.1 million downward valuation for the three months ended March 31, 2024 and March 31, 2023, respectively.

Loan servicing revenue totaled $ 1.5 million and $ 2.8 million for the three and six months ended June 30, 2024, respectively, and $ 0.9 million and $ 1.6 million for the three and six months ended June 30, 2023, respectively.

Loan servicing asset revaluation, which represents the change in fair value of the servicing asset, resulted in a $ 0.8 million and $ 1.3 million downward valuation for the three and six months ended June 30, 2024, respectively, and a $ 0.4 million downward valuation for both the three and six months ended June 30, 2023.

The fair value of servicing rights is highly sensitive to changes in underlying assumptions.

5 unchanged sentences

In June 2019, the Company issued $ 37.0 million aggregate principal amount of 6.0 % Fixed-to-Floating Rate Subordinated Notes due 2029 (the “2029 Notes”) in a public offering.

The 2029 Notes initially bear a fixed interest rate of 6.0 % per year to, but excluding, June 30, 2024, and thereafter a floating rate equal to three-month Term SOFR plus 4.376 %.

The 2029 Notes bear interest at a floating rate equal to three-month Term SOFR plus 4.376 %.

All interest on the 2029 Notes is payable quarterly.

17 unchanged sentences

Holders of $ 0.7 million of unregistered 2031 Notes did not participate in the exchange.

The following table presents the principal balance and unamortized discount and debt issuance costs for the 2029 Notes, the 2030 Note, and the 2031 Notes as of March 31, 2024 and December 31, 2023.

March 31, 2024 December 31, 2023

The following table presents the principal balance and unamortized discount and debt issuance costs for the 2029 Notes, the 2030 Note, and the 2031 Notes as of June 30, 2024 and December 31, 2023.

June 30, 2024 December 31, 2023

(in thousands) Principal Unamortized Discount and Debt Issuance Costs Principal Unamortized Discount and Debt Issuance Costs

16 unchanged sentences

Award Activity Under 2022 Plan

The Company recorded $ 0.4 million and $ 0.1 million o f share-based compensation expense for the three months ended March 31, 2024, and 2023, respectively, related to stock-based awards under the 2022 Plan .

The following table summarizes the stock-based award activity under the 2022 Plan for the three months ended March 31, 2024.

The Company recorded $ 0.4 million and $ 0.7 million o f share-based compensation expense for the three and six months ended June 30, 2024, respectively, related to stock-based awards under the 2022 Plan.

The Company recorded less than $ 0.1 million o f share-based compensation expense for both the three and six months ended June 30, 2023, related to stock-based awards under the 2022 Plan .

The following table summarizes the stock-based award activity under the 2022 Plan for the six months ended June 30, 2024.

Restricted Stock Units Weighted-Average Grant Date Fair Value Per Share Restricted Stock Awards Weighted-Average Grant Date Fair Value Per Share Deferred Stock Units Weighted-Average Grant Date Fair Value Per Share

2 unchanged sentences

Vested ( 14,294 ) 24.52 ( 30,030 ) 11.18 — —

Unvested at March 31, 2024 133,282 $ 24.35 30,030 $ 11.18 — $ —

At March 31, 2024, the total unrecognized compensation cost related to unvested stock-based awards under the 2022 Plan was $ 2.8 million with a weighted-average expense recognition period of 2.4 years.

Unvested at June 30, 2024 133,282 $ 24.35 12,040 $ 31.46 — $ —

At June 30, 2024, the total unrecognized compensation cost related to unvested stock-based awards under the 2022 Plan was $ 2.8 million with a weighted-average expense recognition period of 2.0 years.

2013 Equity Incentive Plan

2 unchanged sentences

Award Activity Under 2013 Plan

The Company recorded $ 0.1 million and $ 0.4 million of share-based compensation expense for the three months ended March 31, 2024 and 2023, respectively, related to stock-based awards under the 2013 Plan .

The following table summarizes the stock-based award activity under the 2013 Plan for the three months ended March 31, 2024.

The Company recorded $ 0.1 million and $ 0.2 million of share-based compensation expense for the three and six months ended June 30, 2024, respectively, related to stock-based awards under the 2013 Plan .

The Company recorded less than $ 0.1 million and $ 0.5 million of share-based compensation expense for the three and six months ended June 30, 2023, respectively, related to stock-based awards under the 2013 Plan .

The following table summarizes the stock-based award activity under the 2013 Plan for the six months ended June 30, 2024.

2 unchanged sentences

Vested ( 8,089 ) 46.64 — — — —

Unvested at March 31, 2024 23,211 $ 46.69 — $ — — $ —

At March 31, 2024, the total unrecognized compensation cost related to unvested stock-based awards under the 2013 Plan was $ 0.3 million with a weighted-average expense recognition period of 0.8 years.

Unvested at June 30, 2024 23,211 $ 46.69 — $ — — $ —

At June 30, 2024, the total unrecognized compensation cost related to unvested stock-based awards under the 2013 Plan was $ 0.2 million with a weighted-average expense recognition period of 0.6 years.

Directors Deferred Stock Plan

3 unchanged sentences

Deferred stock rights were to be settled in common stock following the end of the deferral period payable on the basis of one share of common stock for each deferred stock right.

The following table summarizes the status of deferred stock rights related to the Directors Deferred Stock Plan for the three months ended March 31, 2024.

The following table summarizes the status of deferred stock rights related to the Directors Deferred Stock Plan for the six months ended June 30, 2024.

Deferred Stock Rights

4 unchanged sentences

In the normal course of business, the Company makes various commitments to extend credit which are not reflected in the accompanying condensed consolidated financial statements.

At March 31, 2024 and December 31, 2023, the Company had outstanding loan commitments totaling approximately $ 726.5 million and $ 755.4 million, respectively.

At June 30, 2024 and December 31, 2023, the Company had outstanding loan commitments totaling approximately $ 715.0 million and $ 755.4 million, respectively.

Fair Value of Financial Instruments

11 unchanged sentences

If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows.

The Company did not own any securities classified within Level 1 of the hierarchy as of March 31, 2024 or December 31, 2023.

The Company did not own any securities classified within Level 1 of the hierarchy as of June 30, 2024 or December 31, 2023.

Level 2 securities include U.S.

5 unchanged sentences

Rating agency and industry research reports as well as default and deferral activity are reviewed and incorporated into the calculation.

The Company did not own any securities classified within Level 3 of the hierarchy as of March 31, 2024 or December 31, 2023.

The Company did not own any securities classified within Level 3 of the hierarchy as of June 30, 2024 or December 31, 2023.

Loans Held-for-Sale (mandatory pricing agreements)

16 unchanged sentences

The fair values of IRLCs are determined using the projected sale price of individual loans based on changes in market interest rates, projected pull-through rates (the probability that an IRLC will ultimately result in an originated loan), the reduction in the value of the applicant’s option due to the passage of time, and the remaining origination costs to be incurred based on management’s estimate of market costs (Level 3).

The following tables present the fair value measurements of assets and liabilities recognized in the accompanying condensed consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2024 and December 31, 2023.

March 31, 2024

June 30, 2024

Fair Value Measurements Using

37 unchanged sentences

Interest rate swap agreements - liabilities (back-to-back) ( 677 ) — ( 677 ) —

The following tables reconcile the beginning and ending balances of recurring fair value measurements recognized in the accompanying condensed consolidated balance sheets using significant unobservable (Level 3) inputs for the three months ended March 31, 2024 and 2023.

Three Months Ended

(in thousands) Servicing Asset Interest Rate Lock

Balance as of January 1, 2024 $ 10,567 $ —

Balance as of April 1, 2024 $ 11,760 $ —

Total realized gains

3 unchanged sentences

Change in fair value ( 32 ) —

Balance, March 31, 2024 $ 11,760 $ —

Balance as of January 1, 2023 $ 6,255 $ 133

Balance, June 30, 2024 $ 13,009 $ —

Balance as of April 1, 2023 $ 7,312 $ —

Total realized gains

3 unchanged sentences

Change in fair value 170 —

Balance, March 31, 2023 $ 7,312 $ —

Balance, June 30, 2023 $ 8,252 $ —

Six Months Ended

(in thousands) Servicing Asset Interest Rate Lock

Balance, January 1, 2024 $ 10,567 $ —

Total realized gains

Originated 3,705 —

Subtractions:

Paydowns ( 1,408 ) —

Change in fair value 145 —

Balance, June 30, 2024 $ 13,009 $ —

Balance, January 1, 2023 $ 6,255 $ 133

Total realized gains

Originated 2,410 —

Subtractions:

Paydowns ( 867 ) —

Change in fair value 454 ( 133 )

Balance, June 30, 2023 $ 8,252 $ —

The following describes the valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis, as well as the general classification of such assets pursuant to the valuation hierarchy.

6 unchanged sentences

Individually analyzed loans with a specific valuation allowance based on the value of the underlying collateral or a discounted cash flow analysis are classified as Level 3 assets.

The following table presents the fair value measurements of assets and liabilities recognized in the accompanying condensed consolidated balance sheets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurement falls at March 31, 2024 and December 31, 2023.

March 31, 2024

June 30, 2024

(in thousands) Fair Value Measurements Using

12 unchanged sentences

(dollars in thousands) Fair Value at

March 31, 2024 Valuation

June 30, 2024 Valuation

Technique Significant Unobservable

23 unchanged sentences

Rating agency and industry research reports as well as default and deferral activity are reviewed and incorporated into the calculation.

The Company did not own any securities classified within Level 3 of the hierarchy as of March 31, 2024 or December 31, 2023.

The Company did not own any securities classified within Level 3 of the hierarchy as of June 30, 2024 or December 31, 2023.

Loans Held-for-Sale (best efforts pricing agreements)

16 unchanged sentences

The fair value of commitments to extend credit are based on fees currently charged to enter into similar agreements with similar maturities and interest rates.

The Company determined that the fair value of commitments was zero based on the contractual value of outstanding commitments at each of March 31, 2024 and December 31, 2023.

The following tables present the carrying value and estimated fair value of all financial assets and liabilities that are not measured at fair value on a recurring basis at March 31, 2024 and December 31, 2023.

March 31, 2024

The Company determined that the fair value of commitments was zero based on the contractual value of outstanding commitments at each of June 30, 2024 and December 31, 2023.

The following tables present the carrying value and estimated fair value of all financial assets and liabilities that are not measured at fair value on a recurring basis at June 30, 2024 and December 31, 2023.

June 30, 2024

Fair Value Measurements Using

36 unchanged sentences

Refer to Note 13 for further information on derivative financial instruments.

During the three months ended March 31, 2024, the Company had no mortgage loans held-for-sale or sold mortgage loans into the secondary market.

During the three months ended March 31, 2023, the Company originated $ 36.3 million of mortgage loans held-for-sale and sold $ 43.5 million of mortgage loans, respectively, into the secondary market.

During both the three and six months ended June 30, 2024, the Company had no mortgage loans held-for-sale or sold mortgage loans into the secondary market.

During the three months ended June 30, 2023, the Company had no mortgage loans held-for-sale and sold $ 3.1 million of mortgage loans into the secondary market.

During the six months ended June 30, 2023, the Company originated $ 36.3 million of mortgage loans held-for-sale and sold $ 46.5 million of mortgage loans, respectively, into the secondary market.

During the first quarter 2023, the Company made the decision to exit the residential mortgage business.

The following table presents the components of income from mortgage banking activities for the three months ended March 31, 2024 and 2023.

Three Months Ended March 31,

The following table presents the components of income from mortgage banking activities for the three and six months ended June 30, 2024 and 2023.

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

(in thousands) 2024 2023 2024 2023

23 unchanged sentences

The fair value of derivative instruments with a positive fair value are reported in accrued income and other assets in the condensed consolidated balance sheets, while derivative instruments with a negative fair value are reported in accrued expenses and other liabilities in the condensed consolidated balance sheets.

The following table presents amounts that were recorded on the condensed consolidated balance sheets related to cumulative basis adjustments for interest rate swap derivatives designated as fair value accounting hedges as of March 31, 2024 and December 31, 2023.

(in thousands) Carrying amount of the hedged asset Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets

Line item in the condensed consolidated balance sheets in which the hedged item is included March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023

Line item in the condensed consolidated balance sheets in which the hedged item is included June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023

Securities available-for-sale 1

1 unchanged sentence

1 These amounts include the amortized cost basis of closed portfolios used to designate hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship.

The designated hedged items were $ 50.0 million at both March 31, 2024 and December 31, 2023.

The following tables present a summary of interest rate swap derivatives designated as fair value accounting hedges of fixed-rate receivables used in the Company’s asset/liability management activities at March 31, 2024 and December 31, 2023, identified by the underlying interest rate-sensitive instruments.

The designated hedged items were $ 50.0 million at both June 30, 2024 and December 31, 2023.

The following tables present a summary of interest rate swap derivatives designated as fair value accounting hedges of fixed-rate receivables used in the Company’s asset/liability management activities at June 30, 2024 and December 31, 2023, identified by the underlying interest rate-sensitive instruments.

(dollars in thousands)

March 31, 2024

June 30, 2024

Notional Value Weighted- Average Remaining Maturity (years) Weighted-Average Ratio

1 unchanged sentence

Securities available-for-sale $ 50,000 0.3 $ 556 3-month SOFR 2.33 %

Total swap portfolio at March 31, 2024 $ 50,000 0.6 $ 919 3-month SOFR 2.33 %

Total swap portfolio at June 30, 2024 $ 50,000 0.3 $ 556 3-month SOFR 2.33 %

(dollars in thousands)

6 unchanged sentences

The corresponding fair value hedging adjustment was allocated pro-rata to the underlying hedged securities and is being amortized over the remaining lives of the designated securities.

The Company had amortization expense totaling less than $ 0.1 million for both the three months ended March 31, 2024 and 2023, was recognized as a reduction to interest income on securities.

The Company had amortization expense totaling less than $ 0.1 million for both the three and six months ended June 30, 2024 and 2023, which was recognized as a reduction to interest income on securities.

In June 2020, the Company terminated all fair value hedging relationships associated with loans, which resulted in swap termination payments to counterparties totaling $ 46.1 million.

The corresponding loan fair value hedging adjustment as of the date of termination is being amortized over the remaining lives of the designated loans, which have a weighted average term to maturity of 10.2 years as of March 31, 2024.

The Company had amortization expense totaling $ 0.9 million and $ 1.0 million for the three months ended March 31, 2024 and 2023, respectively, related to these previously terminated fair value hedges recognized as a reduction to interest income on loans.

The following tables present a summary of interest rate swap derivatives designated as cash flow accounting hedges of variable-rate liabilities used in the Company’s asset/liability management activities at March 31, 2024 and December 31, 2023.

The Company had amortization expense totaling $ 1.2 million and $ 2.2 million for the three and six months ended June 30, 2024, respectively, and $ 1.0 million and $ 2.0 million for the three and six months ended June 30 2023, respectively, related to these previously terminated fair value hedges was recognized as a reduction to interest income on loans.

(dollars in thousands)

March 31, 2024

June 30, 2024

Notional Value Weighted- Average Remaining Maturity (years) Weighted-Average Ratio

9 unchanged sentences

These derivative financial instruments were entered into for the purpose of managing the interest rate risk of certain assets and liabilities.

The Company received $ 6.1 million and $ 5.2 million of cash collateral from counterparties as security for their obligations related to these swap transactions at March 31, 2024 and December 31, 2023.

The Company had no pledged cash collateral as of March 31, 2024 and December 31, 2023 to counterparties on interest rate swap agreements as security for its obligations related to these agreements.

The Company received $ 5.5 million and $ 5.2 million of cash collateral from counterparties as security for their obligations related to these swap transactions at June 30, 2024 and December 31, 2023.

The Company had no pledged cash collateral as of June 30, 2024 and December 31, 2023 to counterparties on interest rate swap agreements as security for its obligations related to these agreements.

Collateral posted and received is dependent on the market valuation of the underlying hedges.

The following table presents the notional amount and fair value of interest rate swaps utilized by the Company at March 31, 2024 and December 31, 2023.

March 31, 2024 December 31, 2023

The following table presents the notional amount and fair value of interest rate swaps utilized by the Company at June 30, 2024 and December 31, 2023.

June 30, 2024 December 31, 2023

(in thousands) Notional

16 unchanged sentences

As a result of this offsetting relationship, no net gains or losses are recognized in income.

The following table presents the effects of the Company’s cash flow hedge relationships on the condensed consolidated statements of comprehensive income during the three months ended March 31, 2024 and 2023.

Amount of Gain (Loss) Recognized in Other Comprehensive (Loss) Income in The Three Months Ended

(in thousands) March 31, 2024 March 31, 2023

The following table presents the effects of the Company’s cash flow hedge relationships on the condensed consolidated statements of comprehensive income during the three and six months ended June 30, 2024 and 2023.

Amount of (Loss) Gain Recognized in Other Comprehensive Income in The Three Months Ended Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) in The Six Months Ended

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

Interest rate swap agreements $ ( 262 ) $ 2,094 $ 640 $ ( 76 )

The following table summarizes the periodic changes in the fair value of derivatives not designated as hedging instruments on the condensed consolidated statements of income for the three months ended March 31, 2024 and 2023.

Amount of Gain / (Loss) Recognized in the Three Months Ended

(in thousands) March 31, 2024 March 31, 2023

Amount of Gain / (Loss) Recognized in the Three Months Ended Amount of Gain / (Loss) Recognized in the Six Months Ended

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

Liability Derivatives

2 unchanged sentences

Forward contracts — — — ( 119 )

The following table presents the effects of the Company’s interest rate swap agreements on the condensed consolidated statements of operations during the three months ended March 31, 2024 and 2023.

The following table presents the effects of the Company’s interest rate swap agreements on the condensed consolidated statements of operations during the three and six months ended June 30, 2024 and 2023.

(in thousands)

Line item in the condensed consolidated statements of operations

Three Months Ended

March 31, 2024 March 31, 2023

Three Months Ended Six Months Ended

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Interest income

1 unchanged sentence

Total interest income

415 354 829 648

Interest expense

6 unchanged sentences

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, included in stockholders' equity, for the three months ended March 31, 2024 and 2023, respectively, are presented in the table below.

The components of accumulated other comprehensive loss, included in shareholders' equity, for the six months ended June 30, 2024 and 2023, respectively, are presented in the table below.

(in thousands) Unrealized Losses On Debt Securities Unrealized Losses On Debt Securities Transferred From Available-For-Sale To Held-To-Maturity Cash Flow Hedges Total

4 unchanged sentences

Income tax (benefit) provision ( 601 ) 103 147 ( 351 )

Other comprehensive (loss) income - net of tax ( 1,599 ) 177 695 ( 727 )

Balance, March 31, 2024 $ ( 31,773 ) $ ( 2,762 ) $ 4,433 $ ( 30,102 )

Other comprehensive (loss) gain - net of tax ( 2,024 ) 319 493 ( 1,212 )

Balance, June 30, 2024 $ ( 32,198 ) $ ( 2,620 ) $ 4,231 $ ( 30,587 )

Balance, January 1, 2023 $ ( 35,831 ) $ ( 3,519 ) $ 5,714 $ ( 33,636 )

4 unchanged sentences

Other comprehensive income (loss) - net of tax 239 269 ( 58 ) 450

Balance, March 31, 2023 $ ( 31,889 ) $ ( 3,407 ) $ 4,043 $ ( 31,253 )

Balance, June 30, 2023 $ ( 35,592 ) $ ( 3,250 ) $ 5,656 $ ( 33,186 )

The components of accumulated other comprehensive loss, included in stockholders' equity, for the three months ended June 30, 2024 and 2023, respectively, are presented in the table below.

(in thousands) Unrealized Losses On Debt Securities Unrealized Losses On Debt Securities Transferred From Available-For-Sale To Held-To-Maturity Cash Flow Hedges Total

Balance, April 1, 2024 $ ( 31,773 ) $ ( 2,762 ) $ 4,433 $ ( 30,102 )

Other comprehensive loss before reclassifications from accumulated other comprehensive loss before tax ( 551 ) — ( 262 ) ( 813 )

Reclassifications from accumulated other comprehensive loss to earnings before tax — 188 188

Other comprehensive (loss) gain before tax ( 551 ) 188 ( 262 ) ( 625 )

Income tax (benefit) provision ( 126 ) 46 ( 60 ) ( 140 )

Other comprehensive (loss) income - net of tax ( 425 ) 142 ( 202 ) ( 485 )

Balance, June 30, 2024 $ ( 32,198 ) $ ( 2,620 ) $ 4,231 $ ( 30,587 )

Balance, April 1, 2023 $ ( 31,889 ) $ ( 3,407 ) $ 4,043 $ ( 31,253 )

Other comprehensive (loss) income before reclassifications from accumulated other comprehensive loss before tax ( 4,810 ) — 2,094 ( 2,716 )

Reclassifications from accumulated other comprehensive loss to earnings before tax — 206 — 206

Other comprehensive (loss) gain before tax ( 4,810 ) 206 2,094 ( 2,510 )

Income tax (benefit) provision ( 1,107 ) 49 481 ( 577 )

Other comprehensive (loss) income - net of tax ( 3,703 ) 157 1,613 ( 1,933 )

Balance, June 30, 2023 $ ( 35,592 ) $ ( 3,250 ) $ 5,656 $ ( 33,186 )

Details About Accumulated Other Comprehensive Loss Components Amounts Reclassified from

Accumulated Other Comprehensive Loss for the Amounts Reclassified from

Accumulated Other Comprehensive Loss for the Affected Line Item in the

Statements of Operations

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

Reclassifications from accumulated other comprehensive loss to earnings before tax $ ( 188 ) ( 206 ) $ ( 422 ) $ ( 364 ) Interest income (loss)

1 unchanged sentence

Tax benefit ( 46 ) ( 49 ) ( 103 ) ( 95 ) Income tax provision (benefit)

Total reclassifications from accumulated other comprehensive loss $ ( 177 ) $ ( 112 ) Net income (loss)

Total reclassifications from accumulated other comprehensive loss $ ( 142 ) $ ( 157 ) $ ( 319 ) $ ( 269 ) Net income

Recent Accounting Pronouncements

21 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