What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-07 compared with 2024-08-07 · 223 added, 188 removed, 1372 unchanged (23% of the section changed)

3 unchanged sentences

(Amounts in thousands except share data)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Cash and due from banks $ 6,539 $ 8,269

48 unchanged sentences

(Amounts in thousands except share and per share data)

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Interest Income

11 unchanged sentences

Benefit for credit losses - debt securities held to maturity ( 29 ) ( 15 ) ( 93 ) ( 15 )

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

(Benefit) Provision for credit losses - off-balance sheet commitments ( 439 ) 111 ( 398 ) 1,098

Net Interest Income After Provision for Credit Losses 18,375 15,432 53,957 42,038

17 unchanged sentences

Total noninterest expense 22,794 19,756 66,153 59,380

Income (Loss) Before Income Taxes 5,993 3,648 11,603 ( 1,701 )

Income Before Income Taxes 7,610 3,083 19,213 1,382

Income Tax Provision (Benefit) 620 ( 326 ) 1,267 ( 2,892 )

9 unchanged sentences

First Internet Bancorp

Condensed Consolidated Statements of Comprehensive Income – Unaudited

Condensed Consolidated Statements of Comprehensive Income (Loss) – Unaudited

(Amounts 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 income $ 6,990 $ 3,409 $ 17,946 $ 4,274

Other comprehensive (loss) income

Other comprehensive income (loss)

Securities available-for-sale

Net unrealized holding (losses) gains recorded within other comprehensive (loss) income before income tax ( 551 ) ( 4,810 ) ( 2,625 ) 302

Income tax (benefit) provision ( 126 ) ( 1,107 ) ( 601 ) 63

Net effect on other comprehensive (loss) income ( 425 ) ( 3,703 ) ( 2,024 ) 239

Net unrealized holding gains (losses) recorded within other comprehensive income (loss) before income tax 10,620 ( 11,308 ) 7,995 ( 11,006 )

Income tax provision (benefit) 2,442 ( 2,600 ) 1,841 ( 2,537 )

Net effect on other comprehensive income (loss) 8,178 ( 8,708 ) 6,154 ( 8,469 )

Securities held-to-maturity

6 unchanged sentences

Net effect on other comprehensive (loss) income ( 2,056 ) 569 ( 1,563 ) 511

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

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

Total other comprehensive income (loss) 6,261 ( 8,011 ) 5,049 ( 7,561 )

Comprehensive income (loss) $ 13,251 $ ( 4,602 ) $ 22,995 $ ( 3,287 )

See Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

Condensed Consolidated Statements of Changes in Shareholders’ Equity - Unaudited

Six Months Ended June 30, 2024 and 2023

Nine Months Ended September 30, 2024 and 2023

(Amounts in thousands except share and per share data)

5 unchanged sentences

Net income — 17,946 — 17,946

Other comprehensive loss — — ( 1,212 ) ( 1,212 )

Other comprehensive income — — 5,049 5,049

Dividends declared ($ 0.18 per share)

6 unchanged sentences

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

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

Balance, September 30, 2024 $ 185,631 $ 223,824 $ ( 24,326 ) $ 385,129

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

2 unchanged sentences

Net income — 4,274 — 4,274

Other comprehensive income — — 450 450

Other comprehensive loss — — ( 7,561 ) ( 7,561 )

Dividends declared ($ 0.18 per share)

3 unchanged sentences

( 8,535 ) — — ( 8,535 )

Excise tax on repurchase of common stock ( 85 ) — — ( 85 )

Deferred stock rights and restricted stock units issued in lieu of cash dividends payable on outstanding deferred stock rights and restricted stock units 3 — — 3

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

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

Balance, September 30, 2023 $ 185,085 $ 203,856 $ ( 41,197 ) $ 347,744

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

2 unchanged sentences

Condensed Consolidated Statements of Changes in Shareholders’ Equity - Unaudited

Three Months Ended June 30, 2024 and 2023

(Amounts in thousands except per share data)

Three Months Ended September 30, 2024 and 2023

(Amounts in thousands except share and per share data)

Stock Retained

2 unchanged sentences

Shareholders’

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

Balance, July 1, 2024 185,175 $ 217,365 $ ( 30,587 ) $ 371,953

Net income — 6,990 — 6,990

Other comprehensive loss — — ( 485 ) ( 485 )

Other comprehensive income — — 6,261 6,261

Dividends declared ($ 0.06 per share)

1 unchanged sentence

Recognition of the fair value of share-based compensation 454 — — 454

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

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

Balance, September 30, 2024 $ 185,631 $ 223,824 $ ( 24,326 ) $ 385,129

Balance, July 1, 2023 $ 186,545 $ 200,973 $ ( 33,186 ) $ 354,332

Net income — 3,409 — 3,409

6 unchanged sentences

Excise tax on repurchase of common stock ( 18 ) — — ( 18 )

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

Balance, September 30, 2023 $ 185,085 $ 203,856 $ ( 41,197 ) $ 347,744

See Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

(Amounts in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Operating Activities

10 unchanged sentences

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

Gain on derivatives 1,803 368

Loss on derivatives 768 362

Gain on bank-owned life insurance ( 149 ) —

2 unchanged sentences

Net change in accrued expenses and other liabilities 2,739 ( 3,584 )

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

Net cash provided by (used in) operating activities 19,147 ( 624 )

Investing Activities

18 unchanged sentences

Net cash provided by financing activities 628,721 630,021

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

Net Increase in Cash and Cash Equivalents 306,581 264,653

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

The September 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.

7 unchanged sentences

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,

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

(dollars in thousands, except share and per share data) Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

11 unchanged sentences

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 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

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

Excluded from the computation of diluted EPS were weighted-average antidilutive shares totaling 12,713 and 28,363 for the three and nine months ended September 30, 2023, respectively.

The following tables summarize securities available-for-sale and securities held-to-maturity as of September 30, 2024 and December 31, 2023.

September 30, 2024

Amortized Gross Unrealized Fair

10 unchanged sentences

Total available-for-sale $ 605,722 $ 1,840 $ ( 32,305 ) $ 575,257

June 30, 2024

September 30, 2024

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

2 unchanged sentences

Municipal securities $ 12,859 $ 1 $ ( 613 ) $ 12,247 $ ( 3 ) $ 12,856

Mortgage-backed securities - residential 213,440 15 ( 18,118 ) 195,337 — 213,440

Mortgage-backed securities - commercial 5,738 — ( 1,039 ) 4,699 — 5,738

Agency mortgage-backed securities - residential 207,878 935 ( 11,515 ) 197,298 — 207,878

Agency mortgage-backed securities - commercial 5,722 — ( 824 ) 4,898 — 5,722

Corporate securities 37,061 — ( 1,886 ) 35,175 ( 197 ) 36,864

Total held-to-maturity $ 263,520 $ 936 $ ( 14,838 ) $ 249,618 $ ( 200 ) $ 263,320

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 .

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

Accrued interest receivable on AFS and HTM securities at September 30, 2024 was $ 2.8 million and $ 1.2 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 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.

At both September 30, 2024 and December 31, 2023, over 94 % of mortgage-backed securities (including both AFS and HTM) held by the Company are issued by U.S.

government-sponsored entities and agencies.

4 unchanged sentences

As the Company does not intend to sell the AFS securities that are in an unrealized loss position, and it is unlikely that it will be required to sell these securities before recovery of their amortized cost basis, the Company did not record an ACL on these securities.

In accordance with the adoption of ASC 326, the Company also evaluated its HTM securities that are in an unrealized loss position and considered issuer bond ratings, historical loss rates for bond ratings and economic forecasts.

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 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.

The Company also evaluated its HTM securities that are in an unrealized loss position and considered issuer bond ratings, historical loss rates for bond ratings and economic forecasts.

The ACL on HTM securities at September 30, 2024 was $ 0.2 million.

The carrying value of securities at September 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 $ 263,520 $ 249,618

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.

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

The total fair value of these investments at September 30, 2024 and December 31, 2023 was $ 586.9 million and $ 578.9 million, which was approximately 71 % and 85 %, respectively, of the Company’s AFS and HTM securities portfolios.

As of September 30, 2024, the Company’s security portfolio consisted of 573 securities, of which 442 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 June 30, 2024 and December 31, 2023.

June 30, 2024

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

June 30, 2024

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

September 30, 2024

Held-to-Maturity

3 unchanged sentences

Aa2/AA 2,177 — — — 2,177

A1/A+ 1,793 — — — 1,793

Aa3/AA- 1,793 — — — 1,793

A2/A — — — 5,000 5,000

19 unchanged sentences

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.

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

Categories of loans include:

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

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

Commercial loans

20 unchanged sentences

Net loans $ 3,990,159 $ 3,801,446

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.

1 Includes carrying value adjustments of $ 24.1 million and $ 27.8 million related to terminated interest rate swaps associated with public finance loans as of September 30, 2024 and December 31, 2023, respectively.

Risk characteristics of each loan portfolio segment are as follows:

101 unchanged sentences

The Company may make modifications to certain loans in order to alleviate temporary difficulties in the borrower’s financial condition and/or constraints on the borrower’s ability to repay the loan, and to minimize potential losses to the Company.

Modifications may include changes in the amortization terms of the loan, reductions in interest rates, acceptance of interest only payments, and/or reductions to the outstanding loan balance.

Such loans are typically placed on nonaccrual status when there is doubt concerning the full repayment of principal and interest or the loan has been delinquent for a period of 90 days or more.

Modifications may include changes in the amortization terms of the loan, other-than-insignificant payment delays, reductions in interest rates, acceptance of interest only payments, and/or reductions to the outstanding loan balance.

Such loans may be placed on nonaccrual status when there is doubt concerning the full repayment of principal and interest or the loan has been delinquent for a period of 90 days or more.

These loans may be returned to accrual status when all contractual amounts past due have been brought current, and the borrower’s performance under the modified terms of the loan agreement and the ultimate collectability of all contractual amounts due under the modified terms is no longer in doubt.

11 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 and six months ended June 30, 2024 and 2023.

(in thousands) Three Months Ended June 30, 2024

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

(in thousands) Three Months Ended September 30, 2024

Allowance for credit losses:

15 unchanged sentences

Total $ 43,405 $ 3,858 $ ( 1,751 ) $ 209 $ 45,721

(in thousands) Six Months Ended June 30, 2024

(in thousands) Nine Months Ended September 30, 2024

Allowance for credit losses:

15 unchanged sentences

Total $ 38,774 $ 10,360 $ ( 3,789 ) $ 376 $ 45,721

(in thousands) Three Months Ended June 30, 2023

(in thousands) Three Months Ended September 30, 2023

Allowance for credit losses:

15 unchanged sentences

Total $ 36,058 $ 1,850 $ ( 1,517 ) $ 61 $ 36,452

(in thousands) Six Months Ended June 30, 2023

(in thousands) Nine Months Ended September 30, 2023

Allowance for credit losses:

15 unchanged sentences

Total $ 31,737 $ 2,962 $ 11,976 $ ( 10,639 ) $ 416 $ 36,452

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.

Accrued interest receivable on loans totaled $ 27.8 million and $ 26.7 million at September 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 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.

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 and nine months ended September 30, 2024.

(in thousands) Balance

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

June 30, 2024

June 30, 2024 Provision (Benefit) for credit losses Balance

September 30, 2024

Off-balance sheet commitments

1 unchanged sentence

Commercial and industrial $ 188 $ 24 $ 212

Owner-occupied commercial real estate — 24 24

Investor commercial real estate — 10 10

Construction 3,420 ( 556 ) 2,864

Single tenant lease financing — 28 28

Small business lending 131 31 162

8 unchanged sentences

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

June 30, 2024

September 30, 2024

Off-balance sheet commitments

4 unchanged sentences

Construction 2,889 ( 25 ) 2,864

Healthcare finance — — —

Single tenant lease financing — 28 28

Small business lending 541 ( 379 ) 162

6 unchanged sentences

Total allowance for off-balance sheet commitments $ 3,745 $ ( 398 ) $ 3,347

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.

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

(in thousands) Balance

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

June 30, 2023

June 30, 2023 Provision (Benefit) for credit losses Balance

September 30, 2023

Off-balance sheet commitments

4 unchanged sentences

Construction 2,897 ( 8 ) 2,889

Healthcare finance 2 ( 2 ) —

Small business lending 242 148 390

7 unchanged sentences

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

June 30, 2023

September 30, 2023

Off-balance sheet commitments

29 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 June 30, 2024 and December 31, 2023.

June 30, 2024

September 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 — — — — — — — — —

June 30, 2024

September 30, 2024

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

35 unchanged sentences

Total other consumer 82,580 102,067 92,328 35,338 22,071 69,163 841 — 404,388

Gross charge-offs — 100 90 57 1 87 — — 335

Year-to-date gross charge-offs 49 214 235 100 1 161 — — 760

Total Loans $ 393,477 $ 667,289 $ 997,281 $ 443,566 $ 265,728 $ 1,163,958 $ 74,609 $ 925 $ 4,006,833

91 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 June 30, 2024 and December 31, 2023.

June 30, 2024

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

September 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.

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 Company recognized less than $ 0.1 million in interest income on nonaccrual loans for both the three and nine months ended September 30, 2024 and September 30, 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:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

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

13 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 June 30, 2024 and December 31, 2023.

June 30, 2024

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

September 30, 2024

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

2 unchanged sentences

1,192 — 8,147 9,339 5,337

Franchise finance 6,515 — — 6,515 2,017

Residential mortgage — 3,169 — 3,169 —

17 unchanged sentences

Instead, these modifications are included in their respective loan pool and a historical loss rate is applied to the current loan balance to arrive at the quantitative baseline portion of the ACL.

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 and six months ended June 30, 2024 and 2023.

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

The Company had three loan modifications made to borrowers experiencing financial difficulty during both the three and nine months ended September 30, 2024.

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

The following tables present loans that were both experiencing financial difficulty and modified during the three and nine months ended September 30, 2024.

(in thousands)

Three Months Ended September 30, 2024 Payment Delay Total Modification by Loan Class % of Class of Loans

Investor commercial real estate $ 3,731 $ 3,731 1.4 %

Franchise finance 4,028 4,028 0.7 %

Total loans $ 7,759 $ 7,759

(in thousands)

Nine Months Ended September 30, 2024 Payment Delay Total Modification by Loan Class % of Class of Loans

Investor commercial real estate $ 3,731 $ 3,731 1.4 %

Franchise finance 4,028 4,028 0.7 %

Total loans $ 7,759 $ 7,759

The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty.

As of September 30, 2024, the Company had no commitments to lend additional funds to these borrowers included in the table below.

(in thousands)

Three Months Ended September 30, 2024 - Payment Delay

Loan Type Financial Effect

Investor commercial real estate Forbearance average of 9 months.

Franchise finance Forbearance average of 7 months.

(in thousands)

Nine Months Ended September 30, 2024 - Payment Delay

Loan Type Financial Effect

Investor commercial real estate Forbearance average of 9 months.

Franchise finance Forbearance average of 7 months.

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

The following table presents the performance of such loans that have been modified in the last twelve months as of September 30, 2024.

(in thousands) Current 30 - 89 Days

Past Due 90+ Days

Investor commercial real estate $ 3,731 $ — $ —

Franchise finance 4,028 — —

Total loans $ 7,759 $ — $ —

No modified loans defaulted during the three and nine months ended September 30, 2024.

Other Real Estate Owned

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

The Company had $ 0.3 million in other real estate owned (“OREO”) as of September 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.

There were seven loans totaling $ 1.9 million and one loan totaling $ 0.8 million, in the process of foreclosure at September 30, 2024 and December 31, 2023, respectively.

Premises and Equipment

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

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

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

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

Land $ 5,598 $ 5,598

5 unchanged sentences

Total $ 72,150 $ 73,463

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.

As of September 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 nine months ended September 30, 2024 or September 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.

2 unchanged sentences

Alternatively, a quantitative goodwill test can be performed without performing a qualitative assessment.

Goodwill was assessed for impairment using a quantitative test performed as of August 31, 2023.

Goodwill was assessed for impairment using a qualitative test performed as of August 31, 2024.

The estimated fair value of the reporting unit exceeded the net carrying value, and therefore no goodwill impairment existed as of that date.

Servicing Asset

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.

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

Three Months Ended

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

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

Balance, beginning of period $ 13,009 $ 8,251

5 unchanged sentences

Balance, end of period $ 14,662 $ 9,579

Six Months Ended

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

Nine Months Ended

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

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

6 unchanged sentences

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 June 30, 2024 and December 31, 2023 are shown in the table below.

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

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

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

Loan portfolios serviced for:

1 unchanged sentence

Total $ 783,276 $ 531,927

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.

Loan servicing revenue totaled $ 1.6 million and $ 4.4 million for the three and nine months ended September 30, 2024, respectively, and $ 1.1 million and $ 2.7 million for the three and nine months ended September 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 $ 2.1 million downward valuation for the three and nine months ended September 30, 2024, respectively, and a $ 0.3 million and $ 0.7 million downward valuation for both the three and nine months ended September 30, 2023, respectively.

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

8 unchanged sentences

The 2029 Notes are scheduled to mature on June 30, 2029.

The 2029 Notes are unsecured subordinated obligations of the Company and may be repaid, without penalty, on any interest payment date on or after June 30, 2024.

The 2029 Notes are unsecured subordinated obligations of the Company and may be repaid at any time, without penalty.

The 2029 Notes are intended to qualify as Tier 2 capital under regulatory guidelines.

14 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 June 30, 2024 and December 31, 2023.

June 30, 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 September 30, 2024 and December 31, 2023.

September 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 $ 0.7 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.

The Company recorded $ 0.4 million and $ 1.1 million o f share-based compensation expense for the three and nine months ended September 30, 2024, respectively, related to stock-based awards under the 2022 Plan.

The Company recorded $ 0.2 million and $ 0.6 million o f share-based compensation expense for the three and nine months ended September 30, 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 nine months ended September 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

1 unchanged sentence

Granted 75,222 24.13 12,040 31.46 — —

Cancelled/Forfeited ( 1,290 ) 24.37 — — — —

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

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.

Unvested at September 30, 2024 131,992 $ 24.35 12,040 $ 31.46 — $ —

At September 30, 2024, the total unrecognized compensation cost related to unvested stock-based awards under the 2022 Plan was $ 2.4 million with a weighted-average expense recognition period of 1.8 years.

2013 Equity Incentive Plan

2 unchanged sentences

Award Activity Under 2013 Plan

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.

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

The Company recorded less than $ 0.2 million and $ 0.3 million of share-based compensation expense for the three and nine months ended September 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 nine months ended September 30, 2024.

2 unchanged sentences

Vested ( 8,089 ) 46.64 — — — —

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.

Unvested at September 30, 2024 23,090 $ 46.69 — $ — — $ —

At September 30, 2024, the total unrecognized compensation cost related to unvested stock-based awards under the 2013 Plan was $ 0.1 million with a weighted-average expense recognition period of 0.3 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 six months ended June 30, 2024.

The following table summarizes the status of deferred stock rights related to the Directors Deferred Stock Plan for the nine months ended September 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 June 30, 2024 and December 31, 2023, the Company had outstanding loan commitments totaling approximately $ 715.0 million and $ 755.4 million, respectively.

At September 30, 2024 and December 31, 2023, the Company had outstanding loan commitments totaling approximately $ 707.5 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 June 30, 2024 or December 31, 2023.

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

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

June 30, 2024

September 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 and six months ended June 30, 2024 and 2023.

Three Months Ended

(in thousands) Servicing Asset Interest Rate Lock

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

Balance as of July 1, 2024 $ 13,009 $ —

Total realized gains

3 unchanged sentences

Change in fair value ( 157 ) —

Balance, June 30, 2024 $ 13,009 $ —

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

Balance, September 30, 2024 $ 14,662 $ —

Balance as of July 1, 2023 $ 8,251 $ —

Total realized gains

3 unchanged sentences

Change in fair value 151 —

Balance, June 30, 2023 $ 8,252 $ —

Six Months Ended

Balance, September 30, 2023 $ 9,579 $ —

Nine Months Ended

(in thousands) Servicing Asset Interest Rate Lock

5 unchanged sentences

Change in fair value ( 12 ) —

Balance, June 30, 2024 $ 13,009 $ —

Balance, September 30, 2024 $ 14,662 $ —

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

4 unchanged sentences

Change in fair value 605 ( 133 )

Balance, June 30, 2023 $ 8,252 $ —

Balance, September 30, 2023 $ 9,579 $ —

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 June 30, 2024 and December 31, 2023.

June 30, 2024

September 30, 2024

(in thousands) Fair Value Measurements Using

12 unchanged sentences

(dollars in thousands) Fair Value at

June 30, 2024 Valuation

September 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 June 30, 2024 or December 31, 2023.

The Company did not own any securities classified within Level 3 of the hierarchy as of September 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 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

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

September 30, 2024

Fair Value Measurements Using

36 unchanged sentences

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

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

During the three months ended September 30, 2023, the Company had no mortgage loans held-for-sale and sold mortgage loans into the secondary market.

During the nine months ended September 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 and six months ended June 30, 2024 and 2023.

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

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

Three Months Ended September 30, Nine Months Ended September 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 June 30, 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 June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023

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

The designated hedged items were $ 50.0 million at both September 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 September 30, 2024 and December 31, 2023, identified by the underlying interest rate-sensitive instruments.

(dollars in thousands)

June 30, 2024

September 30, 2024

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

1 unchanged sentence

Securities available-for-sale $ 50,000 0.1 $ 123 3-month SOFR 2.33 %

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

Total swap portfolio at September 30, 2024 $ 50,000 0.1 $ 123 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 and six months ended June 30, 2024 and 2023, which 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 nine months ended September 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 10.0 years as of June 30, 2024.

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.

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 June 30, 2024 and December 31, 2023.

The Company had amortization expense totaling $ 1.6 million and $ 3.7 million for the three and nine months ended September 30, 2024, respectively, and $ 1.5 million and $ 3.5 million for the three and nine months ended September 30 2023, respectively, related to these previously terminated fair value hedges was recognized as a reduction to interest income on loans.

(dollars in thousands)

June 30, 2024

September 30, 2024

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

1 unchanged sentence

Interest rate swaps $ 110,000 2.3 $ 1,956 3-month SOFR 2.88 %

Interest rate swaps 20,000 0.0 3 Fed Funds Effective 2.78 %

(dollars in thousands)

5 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 $ 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.

The Company received $ 1.6 million and $ 5.2 million of cash collateral from counterparties as security for their obligations related to these swap transactions at September 30, 2024 and December 31, 2023.

The Company had no pledged cash collateral as of September 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 June 30, 2024 and December 31, 2023.

June 30, 2024 December 31, 2023

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

September 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 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

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 nine months ended September 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 Nine Months Ended

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

Interest rate swap agreements $ ( 2,670 ) $ 740 $ ( 2,030 ) $ 664

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 and six months ended June 30, 2024 and 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

Amount of Loss Recognized in the Three Months Ended Amount of Loss Recognized in the Nine Months Ended

(in thousands) September 30, 2024 September 30, 2023 September 30, 2024 September 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 and six months ended June 30, 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 nine months ended September 30, 2024 and 2023.

(in thousands)

Line item in the condensed consolidated statements of operations

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Interest income

10 unchanged sentences

Accumulated Other Comprehensive Loss

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

The components of accumulated other comprehensive loss, included in shareholders' equity, for the nine months ended September 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

Balance, January 1, 2024 $ ( 30,174 ) $ ( 2,939 ) $ 3,738 $ ( 29,375 )

Other comprehensive income (loss) before reclassifications from accumulated other comprehensive loss before tax 7,995 — ( 2,030 ) 5,965

Reclassifications from accumulated other comprehensive loss to earnings before tax — 607 — 607

Other comprehensive gain (loss) before tax 7,995 607 ( 2,030 ) 6,572

Income tax provision (benefit) 1,841 149 ( 467 ) 1,523

Other comprehensive gain (loss) - net of tax 6,154 458 ( 1,563 ) 5,049

Balance, September 30, 2024 $ ( 24,020 ) $ ( 2,481 ) $ 2,175 $ ( 24,326 )

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

Other comprehensive (loss) income before reclassifications from accumulated other comprehensive loss before tax ( 11,006 ) — 664 ( 10,342 )

3 unchanged sentences

Other comprehensive (loss) gain - net of tax ( 8,469 ) 397 511 ( 7,561 )

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

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

Balance, September 30, 2023 $ ( 44,300 ) $ ( 3,122 ) $ 6,225 $ ( 41,197 )

The components of accumulated other comprehensive loss, included in stockholders' equity, for the three months ended September 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, July 1, 2024 $ ( 32,198 ) $ ( 2,620 ) $ 4,231 $ ( 30,587 )

Other comprehensive income (loss) before reclassifications from accumulated other comprehensive loss before tax 10,620 — ( 2,670 ) 7,950

3 unchanged sentences

Other comprehensive income (loss) - net of tax 8,178 139 ( 2,056 ) 6,261

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 )

Balance, September 30, 2024 $ ( 24,020 ) $ ( 2,481 ) $ 2,175 $ ( 24,326 )

Balance, July 1, 2023 $ ( 35,592 ) $ ( 3,250 ) $ 5,656 $ ( 33,186 )

Other comprehensive (loss) income before reclassifications from accumulated other comprehensive loss before tax ( 11,308 ) — 740 ( 10,568 )

3 unchanged sentences

Other comprehensive (loss) income - net of tax ( 8,708 ) 128 569 ( 8,011 )

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

Balance, September 30, 2023 $ ( 44,300 ) $ ( 3,122 ) $ 6,225 $ ( 41,197 )

Details About Accumulated Other Comprehensive Loss Components Amounts Reclassified from

2 unchanged sentences

Statements of Operations

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)

Total amount reclassified before tax ( 188 ) ( 206 ) ( 422 ) ( 364 ) Income (loss) before income taxes

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

Reclassifications from accumulated other comprehensive loss to earnings before tax $ ( 185 ) ( 173 ) $ ( 607 ) $ ( 537 ) Interest income

Total amount reclassified before tax ( 185 ) ( 173 ) ( 607 ) ( 537 ) Income before income taxes

Tax benefit ( 46 ) ( 45 ) ( 149 ) ( 140 ) Income tax provision (benefit)

23 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