10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2024

OR

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number 0-25923

Eagle Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Maryland	52-2061461
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
7830 Old Georgetown Road, Third Floor, Bethesda, Maryland	20814
(Address of principal executive offices)	(Zip Code)

(301) 986-1800

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value	EGBN	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

    Large accelerated filer ☒    Accelerated filer ☐

    Non-accelerated filer ☐    Smaller Reporting Company ☐

        Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act Yes ☐ No ☒

As of May 1, 2024, the registrant had 30,189,637 shares of Common Stock outstanding.

EAGLE BANCORP, INC.

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Consolidated Balance Sheets at March 31, 2024 and December 31, 2023 (unaudited)	3
	Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023 (unaudited)	4
	Consolidated Statements of Comprehensive (Loss) Income for the Three Months Ended March 31, 2024 and 2023 (unaudited)	5
	Consolidated Statements of Changes in Shareholders' Equity for the Three Months Ended March 31, 2024 and 2023 (unaudited)	6
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 (unaudited)	7
	Notes to Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	61
Item 4.	Controls and Procedures	62
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	63
Item 1A.	Risk Factors	63
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63
Item 3.	Defaults Upon Senior Securities	63
Item 4.	Mine Safety Disclosures	63
Item 5.	Other Information	63
Item 6.	Exhibits	64
Signatures		65

2

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

EAGLE BANCORP, INC.

Consolidated Balance Sheets (Unaudited)

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

	March 31, 2024		December 31, 2023
Assets
Cash and due from banks	$	10,076	$	9,047
Federal funds sold	11,343		3,740
Interest-bearing deposits with banks and other short-term investments	696,453		709,897
Investment securities available-for-sale (amortized cost of $1,613,659 and $1,668,316, respectively, and allowance for credit losses of $17 and $17, respectively).	1,445,034		1,506,388
Investment securities held-to-maturity, net of allowance for credit losses of $1,957 and $1,956, respectively (fair value of $878,159 and $901,582, respectively)	1,000,732		1,015,737
Federal Reserve and Federal Home Loan Bank stock	54,678		25,748
Loans	7,982,702		7,968,695
Less: allowance for credit losses	(99,684)		(85,940)
Loans, net	7,883,018		7,882,755
Premises and equipment, net	9,504		10,189
Right-of-use assets - operating leases	17,679		19,129
Deferred income taxes	87,813		86,620
Bank-owned life insurance	113,624		112,921
Goodwill and other intangible assets, net	104,611		104,925
Other real estate owned	773		1,108
Other assets	177,310		176,334
Total Assets	$	11,612,648	$	11,664,538
Liabilities and Shareholders' Equity
Liabilities
Deposits:
Noninterest-bearing demand	$	1,835,524	$	2,279,081
Interest-bearing transaction	1,207,566		997,448
Savings and money market	3,235,391		3,314,043
Time	2,222,958		2,217,467
Total deposits	8,501,439		8,808,039
Customer repurchase agreements	37,059		30,587
Borrowings	1,669,948		1,369,918
Operating lease liabilities	21,611		23,238
Reserve for unfunded commitments	6,045		5,590
Other liabilities	117,133		152,883
Total Liabilities	10,353,235		10,390,255
Shareholders' Equity
Common stock, par value $0.01 per share; shares authorized 100,000,000, shares issued and outstanding 30,185,732 and 29,925,612, respectively	297		296
Additional paid-in capital	377,334		374,888
Retained earnings	1,047,550		1,061,456
Accumulated other comprehensive loss	(165,768)		(162,357)
Total Shareholders' Equity	1,259,413		1,274,283
Total Liabilities and Shareholders' Equity	$	11,612,648	$	11,664,538

See Notes to Consolidated Financial Statements.

3

EAGLE BANCORP, INC.

Consolidated Statements of Operations (Unaudited)

(dollars in thousands, except per share data)

	Three Months Ended March 31,
	2024		2023
Interest Income
Interest and fees on loans	$	137,994	$	120,850
Interest and dividends on investment securities	12,680		13,545
Interest on balances with other banks and short-term investments	24,862		5,774
Interest on federal funds sold	66		78
Total interest income	175,602		140,247
Interest Expense
Interest on deposits	79,383		48,954
Interest on customer repurchase agreements	315		302
Interest on borrowings	21,206		15,967
Total interest expense	100,904		65,223
Net Interest Income	74,698		75,024
Provision for Credit Losses	35,175		6,164
Provision for Credit Losses for Unfunded Commitments	456		848
Net Interest Income After Provision for Credit Losses	39,067		68,012
Noninterest Income
Service charges on deposits	1,699		1,510
Gain on sale of loans	—		305
Net gain (loss) on sale of investment securities	4		(21)
Increase in the cash surrender value of bank-owned life insurance	703		655
Other income	1,183		1,251
Total noninterest income	3,589		3,700
Noninterest Expense
Salaries and employee benefits	21,726		24,174
Premises and equipment expenses	3,059		3,317
Marketing and advertising	859		636
Data processing	3,293		3,099
Legal, accounting and professional fees	2,507		3,254
FDIC insurance	6,412		1,486
Other expenses	2,141		4,618
Total noninterest expense	39,997		40,584
Income Before Income Tax Expense	2,659		31,128
Income Tax Expense	2,997		6,894
Net (Loss) Income	$	(338)	$	24,234
(Loss) Earnings Per Common Share
Basic	$	(0.01)	$	0.78
Diluted	$	(0.01)	$	0.78

See Notes to Consolidated Financial Statements.

4

EAGLE BANCORP, INC.

Consolidated Statements of Comprehensive (Loss) Income (Unaudited)

(dollars in thousands)

	Three Months Ended March 31,
	2024		2023
Net (Loss) Income	$	(338)	$	24,234
Other Comprehensive (Loss) Income, Net of Tax:
Unrealized (loss) gain on securities available-for-sale	(5,067)		17,936
Reclassification adjustment for (gain) loss included in net income	(3)		16
Total unrealized (loss) gain on investment securities available-for-sale	(5,070)		17,952
Amortization of unrealized loss on securities transferred to held-to-maturity	1,385		641
Total unrealized gain on investment securities held-to-maturity	1,385		641
Unrealized gain on derivatives	274		—
Total unrealized gain on derivatives	274		—
Other comprehensive (loss) income	(3,411)		18,593
Comprehensive (Loss) Income	$	(3,749)	$	42,827

See Notes to Consolidated Financial Statements.

5

EAGLE BANCORP, INC.
Consolidated Statements of Changes in Shareholders' Equity (Unaudited)
(dollars in thousands except share and per share data)
								Accumulated Other Comprehensive Income (Loss)
	Common			Additional Paid-in Capital		Retained Earnings				Shareholders' Equity
	Shares	Amount
Balance January 1, 2024	29,925,612	$	296	$	374,888	$	1,061,456	$	(162,357)	$	1,274,283
Net Loss	—	—		—		(338)		—		(338)
Other comprehensive income, net of tax	—	—		—		—		(3,411)		(3,411)
Stock-based compensation expense	—	—		2,368		—		—		2,368
Vesting of time-based stock awards issued at date of grant, net of shares withheld for payroll taxes	(31,549)	1		(1)		—		—		—
Vesting of performance-based stock awards, net of shares withheld for payroll taxes	12,013	—		—		—		—		—
Time-based stock awards granted	275,896	—		—		—		—		—
Issuance of common stock related to employee stock purchase plan	3,760	—		79		—		—		79
Cash dividends declared ($0.45 per share)	—	—		—		(13,568)		—		(13,568)
Balance March 31, 2024	30,185,732	$	297	$	377,334	$	1,047,550	$	(165,768)	$	1,259,413
Balance January 1, 2023	31,346,903	$	310	$	412,303	$	1,015,215	$	(199,507)	$	1,228,321
Net Income	—	—		—		24,234		—		24,234
Other comprehensive loss, net of tax	—	—		—		—		18,593		18,593
Stock-based compensation expense	—	—		2,948		—		—		2,948
Vesting of time-based stock awards issued at date of grant, net of shares withheld for payroll taxes	(37,104)	2		(2)		—		—		—
Vesting of performance-based stock awards, net of shares withheld for payroll taxes	27,296	—		—		—		—		—
Time-based stock awards granted	171,534	—		—		—		—		—
Issuance of common stock related to employee stock purchase plan	3,018	—		133		—		—		133
Cash dividends declared ($0.45 per share)	—	—		—		(13,897)		—		(13,897)
Common stock repurchased	(400,000)	(4)		(18,370)		—		—		(18,374)
Balance March 31, 2023	31,111,647	$	308	$	397,012	$	1,025,552	$	(180,914)	$	1,241,958

See Notes to Consolidated Financial Statements.

6

EAGLE BANCORP, INC.

Consolidated Statements of Cash Flows (Unaudited)

(dollars in thousands)

	Three Months Ended March 31,
	2024		2023
Cash Flows From Operating Activities:
Net (Loss) Income	$	(338)	$	24,234
Adjustments to reconcile Net (Loss) Income to net cash provided by operating activities:
Provision for credit losses	35,175		6,164
Provision for credit losses for unfunded commitments	456		848
Depreciation and amortization	786		890
Gain on sale of loans	—		(305)
Loss on mortgage servicing rights	34		35
Securities premium amortization, net	1,432		1,715
Origination of loans held for sale	—		(27,929)
Proceeds from sale of loans held for sale	—		28,480
(Gain) loss on sale of investment securities	(4)		21
Net increase in cash surrender value of BOLI	(703)		(655)
Stock-based compensation expense	2,368		2,948
Increase in other assets	(696)		(9,019)
(Increase) decrease in other liabilities	(35,664)		33,369
Net Cash Provided by Operating Activities	2,846		60,796
Cash Flows From Investing Activities:
Investment securities available-for-sale:
Proceeds from maturities	26,883		31,235
Proceeds from sale/call	27,000		8,303
Investment securities held-to-maturity:
Proceeds from maturities	16,027		17,996
Proceeds from call	52		68
Purchase of Federal Reserve stock	(71)		(69)
Purchase of Federal Home Loan Bank stock	(28,859)		(13,998)
Net increase in loans	(35,758)		(103,019)
Redemption of BOLI	—		436
Proceeds from sale of OREO	656		—
Net change in premises and equipment	(71)		(313)
Net Cash Provided by (Used in) Investing Activities	5,859		(59,361)
Cash Flows From Financing Activities:
Decrease in deposits	(306,600)		(1,249,941)
Increase in customer repurchase agreements	6,472		2,754
Proceeds from borrowings	2,100,000		4,883,000
Repayment of borrowings	(1,800,000)		(3,744,200)
Proceeds from employee stock purchase plan	79		133
Common stock repurchased	—		(18,374)
Cash dividends paid	(13,468)		(13,897)
Net Cash Used in Financing Activities	(13,517)		(140,525)
Net Decrease in Cash and Cash Equivalents	(4,812)		(139,090)
Cash and Cash Equivalents at Beginning of Period	722,684		311,854
Cash and Cash Equivalents at End of Period	$	717,872	$	172,764

See Notes to Consolidated Financial Statements.

7

EAGLE BANCORP, INC.
Consolidated Statements of Cash Flows - Continued (Unaudited)
(dollars in thousands)
	Three Months Ended March 31,
	2024		2023
Supplemental Cash Flows Information:
Interest paid	$	66,800	$	61,287
Non-Cash Investing Activities
Transfers from loans to other real estate owned	$	400	$	—

See Notes to Consolidated Financial Statements.

8

EAGLE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The Consolidated Financial Statements include the accounts of Eagle Bancorp, Inc. (the "Parent") and its subsidiaries (together with the Parent, the "Company"), with all significant intercompany transactions eliminated. EagleBank (the "Bank"), a Maryland chartered commercial bank, is the Parent's principal subsidiary.

The accounting and reporting policies of the Company conform to generally accepted accounting principles in the United States of America ("GAAP") and to general practices in the banking industry. The Consolidated Financial Statements and accompanying notes of the Company included herein are unaudited. The Consolidated Balance Sheet as of December 31, 2023 was derived from the audited Consolidated Balance Sheet as of that date. The Consolidated Financial Statements reflect all adjustments, consisting of normal recurring adjustments, that in the opinion of management are necessary to present fairly the results for the periods presented. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). In addition to the accounting policies described below, the Company applies the accounting policies contained in Note 1 to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. Certain reclassifications have been made to 2023 amounts previously reported to conform to the 2024 presentation. Reclassifications had no effect on net income or shareholders' equity. These statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

Nature of Operations

The Company, through the Bank, conducts a full service community banking business, primarily in Northern Virginia, Suburban Maryland, and Washington, D.C. The primary financial services offered by the Bank include real estate, commercial and consumer lending, as well as traditional deposit and repurchase agreement products. The Bank is also active in the origination of small business loans, and the origination, securitization and sale of multifamily Federal Housing Administration ("FHA") loans. The guaranteed portion of small business loans, guaranteed by the Small Business Administration ("SBA"), is typically sold to third party investors in a transaction apart from the loan's origination.

In April 2024, the Company closed a branch following the lease's expiration. The Bank offers its products and services through twelve banking offices, four lending centers and various digital capabilities, including remote deposit services and mobile banking services. Eagle Insurance Services, LLC, a subsidiary of the Bank that previously offered access to insurance products and services through a referral program with a third party insurance broker, continues to receive fee income in connection with such program. Landroval Municipal Finance, Inc., a subsidiary of the Bank, focuses on lending to municipalities by buying debt on the public market as well as direct purchase issuance.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates and such differences could be material to the consolidated financial statements.

Investment Securities

The Company recognizes acquired securities on the trade date. Investment securities comprise debt securities, which are classified depending on the Company's intent and ability to hold the securities to maturity. Debt securities are classified as available-for-sale when management may have the intent to sell them prior to maturity. Debt securities are classified as held-to-maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity.

Securities available-for-sale are acquired as part of the Company's asset/liability management strategy and may be sold in response to changes in interest rates, current market conditions, loan demand, changes in prepayment risk and other factors. Securities available-for-sale are carried at fair value, with unrealized gains or losses, other than impairment losses, being reported as accumulated other comprehensive income/(loss), a separate component of shareholders' equity, net of deferred income tax. Realized gains and losses, using the specific identification method, are included as a separate component of noninterest income in the Consolidated Statements of Operations.

9

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

Transfers of Investment Securities from Available-for-Sale to Held-to-Maturity

Transfers of debt securities into the held-to-maturity category from the available-for-sale category are made at amortized cost, net of unrealized gain or loss reported in accumulated other comprehensive income (loss) at the date of transfer. The unrealized holding gain or loss at the date of transfer is retained in other comprehensive income and in the carrying value of the held-to-maturity ("HTM") securities. Such amounts are amortized over the remaining life of the security.

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

Loans

Loans held for investment are stated at the principal amount outstanding, net of unamortized deferred costs and fees. Interest income on loans is recognized at the contractual rate on the principal amounts outstanding. Loan origination fees, net of direct loan origination costs, and commitment fees are deferred and amortized on the interest method over the term of the loan.

Past due loans are placed on nonaccrual status when there is a clear indication that the borrower's cash flow may not be sufficient to meet payments as they become due. Generally, this conclusion is reached when a loan is 90 days past due. When a loan is placed on nonaccrual status, all previously accrued and unpaid interest is reversed through interest income. Interest income is subsequently recognized on a cash basis as long as the remaining book balance of the asset is deemed to be collectible. If collectability is questionable, then cash payments are applied to principal. A loan is placed back on accrual status when both principal and interest are current and it is probable that we will be able to collect all amounts due (both principal and interest) according to the terms of the loan agreement.

Allowance for Credit Losses

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

	Three Months Ended March 31,
(dollars in thousands)	2024		2023
Provision for credit losses - loans	$	35,174	$	4,908
Provision for credit losses - HTM debt securities	1		1,242
Provision for credit losses - AFS debt securities	—		14
Total	$	35,175	$	6,164

Allowance for Credit Losses - Loans

The allowance for credit losses ("ACL") - loans is an estimate of the expected credit losses in the loans held for investment portfolio. The Company's ACL on the loan portfolio is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the allowance when they are deemed uncollectible. Expected recoveries are recorded to the extent they do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

Reserves on loans that do not share risk characteristics are evaluated on an individual basis. Nonaccrual loans are specifically reviewed for loss potential and when deemed appropriate are assigned a reserve based on an individual evaluation. The remainder of the portfolio, representing all loans not evaluated individually for impairment, is segregated by call report codes, and a loan-level probability of default ("PD") / loss given default ("LGD") cash flow method is applied using an exposure at default ("EAD") model. These historical loss rates are then modified to incorporate our reasonable and supportable forecast of future losses at the portfolio segment level, as well as any necessary qualitative adjustments.

The Company uses regression analysis of historical internal and peer data provided by a third-party service provider (as Company loss data is insufficient) to determine suitable credit loss drivers to utilize when modeling lifetime PD and LGD. This analysis also determines how expected PD will be impacted by different forecasted levels of the loss drivers.

10

A similar process is employed to calculate a reserve assigned to off-balance sheet commitments, specifically unfunded loan commitments and letters of credit, and any needed reserve is recorded in reserve for unfunded commitments ("RUC") on the Consolidated Balance Sheets. For periods beyond which we are able to develop reasonable and supportable forecasts, we revert to the historical loss rate on a straight-line basis over a twelve-month period.

For each of these loan segments, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speeds, PD rates, and LGD rates. The modeling of expected prepayment speeds is based on historical internal data. EAD is based on each instrument's underlying amortization schedule in order to estimate the bank's expected credit loss exposure at the time of the borrower's potential default.

During the three months ended March 31, 2024, management enhanced the cash flow model to incorporate three macroeconomic variables in addition to national unemployment. The four economic variables selected, national unemployment, which was the original variable used, Commercial Real Estate ("CRE") Price Index, House Price Index and Gross Domestic Product ("GDP"), are incorporated by utilizing a Loss Driver Analysis approach that factors in historical losses, including during the Great Recession, of regional peer banks and the Bank. The updated model incorporates a weighting of three economic scenarios; baseline, upside and downside. The scenarios cover the four economic forecast variables, with each segment of the portfolio linked to two of these variables, depending on the segment. The loss driver analysis is spread over a reasonable and supportable period of 18 months and reverts back to a historical loss rate over twelve months on a straight-line basis over the loan's remaining maturity. Management leverages economic projections from reputable and independent third parties to inform its loss driver forecasts over the forecast period.

The ACL also includes an amount for inherent risks not reflected in the historical analyses. Relevant factors include, but are not limited to, concentrations of credit risk, changes in underwriting standards, experience and depth of lending staff and trends in delinquencies.

While our methodology in establishing the ACL attributes portions of the ACL and RUC to the separate loan pools or segments, the entire ACL and RUC is available to absorb credit losses expected in the total loan portfolio and total amount of unfunded credit commitments, respectively. Portfolio segments are used to pool loans with similar risk characteristics and align with our methodology for measuring current expected credit losses ("CECL").

A summary of our primary portfolio segments is as follows:

Commercial. The commercial loan portfolio comprises lines of credit and term loans for working capital, equipment, and other business assets across a variety of industries. These loans are used for general corporate purposes including financing working capital, internal growth, and acquisitions; and are generally secured by accounts receivable, inventory, equipment and other assets of our clients' businesses.

Income producing - commercial real estate. Income producing commercial real estate loans comprise permanent and bridge financing provided to professional real estate owners/managers of commercial and residential real estate projects and properties who generally have a demonstrated record of past success with similar properties. Collateral properties include apartment buildings, office buildings, hotels, mixed-use buildings, retail, data centers, warehouse, and shopping centers. The primary source of repayment on these loans is generally expected to come from lease or operation of the real property collateral. Income producing commercial real estate loans are impacted by fluctuation in collateral values, as well as rental demand and rates.

Owner occupied – commercial real estate. The owner occupied commercial real estate portfolio comprises permanent financing provided to operating companies and their related entities for the purchase or refinance of real property wherein their business operates. Collateral properties include industrial property, office buildings, religious facilities, mixed-use property, health care and educational facilities.

Real estate mortgage – residential. Real estate mortgage residential loans comprise consumer mortgages for the purpose of purchasing or refinancing first lien real estate loans secured by primary-residence, second-home, and rental residential real property.

Construction – commercial and residential. The construction commercial and residential loan portfolio comprises loans made to builders and developers of commercial and residential property, for both renovation, new construction, and development projects. Collateral properties include apartment buildings, mixed use property, residential condominiums, single and 1-4 residential property, and office buildings. The primary source of repayment on these loans is expected to come from the sale, permanent financing, or lease of the real property collateral. Construction loans are impacted by fluctuations in collateral values and the ability of the borrower or ultimate purchaser to obtain permanent financing.

11

Construction – commercial and industrial ("C&I") (owner occupied). The construction C&I (owner occupied) portfolio comprises loans to operating companies and their related entities for new construction or renovation of the real or leased property in which they operate. Generally these loans contain provisions for conversion to an owner occupied commercial real estate loan or to a commercial loan after completion of construction. Collateral properties include industrial, healthcare, religious facilities, restaurants, and office buildings.

Home equity. The home equity portfolio comprises consumer lines of credit and loans secured by subordinate liens on residential real property.

Other consumer. The other consumer portfolio comprises consumer purpose loans not secured by real property, including personal lines of credit and loans, overdraft lines, and vehicle loans. This category also includes other loan items such as overdrawn deposit accounts as well as loans and loan payments in process.

We have several pass credit grades that are assigned to loans based on varying levels of risk, ranging from credits that are secured by cash or marketable securities, to watch credits which have all the characteristics of an acceptable credit risk but warrant more than the normal level of monitoring. Special mention loans are those that are currently protected by the sound worth and paying capacity of the borrower, but that are potentially weak and constitute an additional credit risk. These loans have the potential to deteriorate to a substandard grade due to the existence of financial or administrative deficiencies. Substandard loans have a well-defined weakness or weaknesses that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. Some substandard loans are inadequately protected by the sound worth and paying capacity of the borrower and of the collateral pledged and may be considered impaired. Substandard loans can be accruing or can be on nonaccrual depending on the circumstances of the individual loans.

Loans classified as doubtful have all the weaknesses inherent in substandard loans with the added characteristics that the weaknesses make collection in full highly questionable and improbable. The possibility of loss is extremely high. All doubtful loans are on nonaccrual.

Classified loans represent the sum of loans graded substandard and doubtful.

The methodology used in the estimation of the allowance, which is performed at least quarterly, is designed to be dynamic and responsive to changes in portfolio credit quality and forecasted economic conditions. Changes are reflected in the pool-basis allowance and individually assessed loans as the collectability of classified loans is evaluated with new information. As our portfolio has matured, historical loss ratios have been closely monitored. The review of the appropriateness of the allowance is performed by executive management and presented to management committees and the Audit Committee of the Board of Directors (the "Board"). The committees' reports to the Board are part of the Board review on a quarterly basis of our consolidated financial statements.

When management determines that foreclosure is probable, and for certain collateral-dependent loans where foreclosure is not considered probable, expected credit losses are based on the estimated fair value of the collateral adjusted for selling costs, when appropriate. A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral.

Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals and modifications unless management has a reasonable expectation that a borrower will result in financial difficulty.

We do not measure an ACL on accrued interest receivable balances because these balances are written off in a timely manner as a reduction to interest income when loans are placed on nonaccrual status.

12

Collateral Dependent Financial Assets

Loans that do not share risk characteristics are evaluated on an individual basis. For collateral dependent financial assets where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the net present value ("NPV") from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the fair value of the underlying collateral less estimated cost to sell. The ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the financial asset.

Loan Modifications to Borrowers in Financial Difficulty

The Company evaluates loan restructurings to determine if we have a loan modification and whether it results in a new loan or the continuation of the existing loan. Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows include situations where there are principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and combinations of the listed modifications.

A loan that is considered a modified loan may be subject to an individually-evaluated loan analysis if the commitment is $1.0 million or greater; otherwise, the restructured loan remains in the appropriate segment in the ACL model and associated provisions are adjusted based on changes in the discounted cash flows resulting from the modification of the restructured loan.

Management strives to identify borrowers in financial difficulty early and work with them to modify their loan to more affordable terms before their loan reaches nonaccrual status, foreclosure or repossession of the collateral to minimize economic loss to the Company.

Allowance for Credit Losses - Available-for-Sale Securities

For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either criterion is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an ACL is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income, as a non-credit-related impairment.

The entire amount of an impairment loss is recognized in earnings only when: (1) the Company intends to sell the security; (2) it is more likely than not that the Company will have to sell the security before recovery of its amortized cost basis; or (3) the Company does not expect to recover the entire amortized cost basis of the security. In all other situations, only the portion of the impairment loss representing the credit loss must be recognized in earnings, with the remaining portion being recognized in other comprehensive income, net of deferred taxes.

Changes in the ACL are recorded as a provision for or reversal of credit losses. Losses are charged against the allowance when management believes the uncollectibility of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

We have made a policy election to exclude accrued interest from the amortized cost basis of available-for-sale debt securities and report accrued interest separately in accrued interest and other assets in the Consolidated Balance Sheets. Available-for-sale debt securities are placed on nonaccrual status when we no longer expect to receive all contractual amounts due, which is generally at 90 days past due. Accrued interest receivable is reversed against interest income when a security is placed on nonaccrual status. Accordingly, we do not recognize an allowance for credit loss against accrued interest receivable.

13

Allowance for Credit Losses - Held-to-Maturity Debt Securities

The Company separately evaluates its HTM investment securities for any credit losses. The Company pools like securities and calculates expected credit losses through an estimate based on a security's credit rating, which is recognized as part of the ACL for held-to-maturity securities and included in the balance of investment securities held-to-maturity on the Consolidated Balance Sheets. If the Company determines that a security indicates evidence of deteriorated credit quality, the security is individually evaluated and a discounted cash flow analysis may be performed and compared to the amortized cost basis.

Loan Commitments and Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

Financial instruments include off-balance sheet credit instruments such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded.

The Company records a RUC on off-balance sheet credit exposures through a charge to provision for credit loss expense in the Company's Consolidated Statement of Operations.

The RUC on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur, and is included in the RUC on the Company's Consolidated Balance Sheets.

Goodwill Assessment

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Goodwill is subject to impairment testing, which must be conducted at least annually or upon the occurrence of a triggering event. Various factors, such as the Company’s results of operations, the trading price of the Company’s common stock relative to the book value per share, macroeconomic conditions and conditions in the banking sector, inform whether a triggering event for an interim goodwill impairment test has occurred. Goodwill is recorded and evaluated for impairment at its reporting unit, the Company. The Company's policy is to test goodwill for impairment annually as of December 31, or on an interim basis if an event triggering an impairment assessment is determined to have occurred.

Testing of goodwill impairment comprises a two-step process. First, the Company performs a qualitative assessment to evaluate relevant events or circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it is more likely than not that an impairment has occurred, it proceeds to the quantitative impairment test, whereby it calculates the fair value of the reporting unit and compares it with its carrying amount, including goodwill. In its performance of impairment testing, the Company has the unconditional option to proceed directly to the quantitative impairment test, bypassing the qualitative assessment. If the carrying amount of the reporting unit exceeds the fair value, the amount by which the carrying amount exceeds fair value, up to the carrying value of goodwill, is recorded through earnings as an impairment charge. If the results of the qualitative assessment indicate that it is not more likely than not that an impairment has occurred, or if the quantitative impairment test results in a fair value of the reporting unit that is greater than the carrying amount, then no impairment charge is recorded.

As part of its annual testing for goodwill impairment, the Company concluded that no impairment existed at December 31, 2023. Management has evaluated and will continue to evaluate economic conditions in interim periods for triggering events. As of the time of this report's filing, the Company did not identify any triggering events for interim testing. However, future events including a continuation of the recent trading price of the Company's common stock relative to the book value per share through the second quarter of 2024 could cause the Company to conclude that goodwill or other intangibles have become impaired, which would result in recording an impairment loss. Any resulting impairment loss could have a material adverse impact on the Company’s financial condition and results of operations, however, it would not impact our regulatory capital ratios, tangible common equity ratio, nor its liquidity position.

14

New Authoritative Accounting Guidance

Accounting Standards Pending Adoption

ASU No. 2023-06, "Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative" ("ASU 2023-06") incorporates into the Accounting Standards Codification ("ASC" or "Codification") several SEC disclosure requirements under Regulations S-K and S-X. The amendments in the ASU are intended to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations. These requirements are similar to, but require more information than, generally accepted accounting principles. The new updates modify the disclosure or presentation requirements of a variety of Topics in the Codification. Entities should apply the amendments in ASU 2023-06 prospectively. For entities subject to the SEC's existing disclosure requirements and for entities that have to file or provide financial statements with or to the SEC for the purpose of selling or issuing securities that do not have contractual limits on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. As a result, the effective date will be different for each individual disclosure based on the effective date of the SEC's deletion of the related disclosure. Early adoption is prohibited. For all other entities, the effective date will be two years later. Early adoption is permitted for these entities, but not before the provisions of the ASU become effective for entities subject to SEC's regulation. The effective dates of the amendments are predicated on the SEC removing its related disclosure requirements from its regulations. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. We are currently in the process of evaluating this guidance.

ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"). The ASU requires additional income tax disclosures around effective tax rates and cash income taxes paid. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024 and interim periods within those fiscal years. The impact of ASU 2023-09 should be applied prospectively. We are currently in the process of evaluating this guidance.

ASU No. 2024-01, "Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards" ("ASU 2024-01") clarifies how an entity determines whether a profits interest or similar award (hereafter a "profits interest award") is accounted for either (1) as a share-based payment arrangement, and therefore, within the scope of ASC 718 or (2) not a share-based payment arrangement and therefore within the scope of other guidance. ASU 2024-01 also improves the clarity and operation of the guidance in ASC 718-10-15-3. The guidance in ASU 2024-01 applies to all entities that issue profits interest awards as compensation to employees or non employees in exchange for goods or services. For public business entities, the amendments are effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2025, and interim periods within those annual periods. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. If an entity adopts the amendments in an interim period, it should adopt them as of the beginning of the annual period that includes that interim period. The amendments should be applied (i) retrospectively to all prior periods presented in the financial statements or (ii) prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies the amendments. If the amendments are applied prospectively, an entity is required to disclose the nature of and reason for the change in accounting principle. We are currently in the process of evaluating this guidance.

ASU No. 2024-02, "Codification Improvements—Amendments to Remove References to the Concepts Statements" ("ASU 2024-02") amends the Accounting Standard Codification (“Codification”) by removing references to various concepts statements. In most instances, the references are extraneous and not required to understand or apply the guidance. In other instances, the references were used in prior statements to provide guidance in certain topical areas. As stated in paragraph 105-10-05-3 of the Codification, FASB Concepts Statements are non authoritative. These amendments will simplify the Codification which will further draw a distinction between authoritative and non authoritative literature. The amendments are effective for public business entities for fiscal years beginning after December 15, 2024. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2025. Early application of the amendments is permitted for all entities, for any fiscal year or interim period for which financial statements have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments using one of the following transition methods: (i) prospectively to all new transactions recognized on or after the date that the entity first applies the amendments, or (ii) retrospectively to the beginning of the earliest comparative period presented in which the amendments were first applied. We are currently in the process of evaluating this guidance.

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Accounting Standards Adopted in 2024:

ASU No. 2023-07,"Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." ("ASU 2023-07") requires filers to disclose significant segment expenses, an amount and description for other segment items, the title and position of the entity’s chief operating decision maker ("CODM") and an explanation of how the CODM uses the reported measures of profit or loss to assess segment performance, and, on an interim basis, certain segment related disclosures that previously were required only on an annual basis. ASU 2023-07 also clarifies that entities with a single reportable segment are subject to both new and existing segment reporting requirements and that an entity is permitted to disclose multiple measures of segment profit or loss, provided that certain criteria are met. ASU 2023-07 is effective for the Company for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Since early adoption is permitted, the Company adopted the guidance prescribed under ASU 2023-07 effective January 1, 2024. Adoption of this guidance did not have a material impact on our consolidated financial statements for fiscal year 2024.

Note 2. Cash and Due from Banks

For the three months ended March 31, 2024 and 2023, the Bank maintained an average daily balance at the Federal Reserve Bank of $1.9 billion and $662.4 million, respectively, on which interest is paid.

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

Note 3. Investment Securities

The amortized cost and estimated fair value of the Company's available-for-sale and held-to-maturity securities are summarized as follows:

(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
March 31, 2024
Investment securities available-for-sale:
U.S. treasury bonds	$	49,919	$	—	$	(1,686)	$	—	$	48,233
U.S. agency securities	698,189		—		(58,863)		—		639,326
Residential mortgage-backed securities	800,793		23		(102,266)		—		698,550
Commercial mortgage-backed securities	54,018		—		(5,080)		—		48,938
Municipal bonds	8,740		—		(434)		—		8,306
Corporate bonds	2,000		—		(302)		(17)		1,681
Total available-for-sale securities	$	1,613,659	$	23	$	(168,631)	$	(17)	$	1,445,034

(dollars in thousands)	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Estimated Fair Value
March 31, 2024
Investment securities held-to-maturity:
Residential mortgage-backed securities	$	655,388	$	—	$	(87,348)	$	568,040
Commercial mortgage-backed securities	89,966		—		(13,000)		76,966
Municipal bonds	125,003		—		(9,789)		115,214
Corporate bonds	132,332		—		(14,393)		117,939
Total	$	1,002,689	$	—	$	(124,530)	$	878,159
Allowance for credit losses	(1,957)
Total held-to-maturity securities, net of ACL	$	1,000,732

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(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
December 31, 2023
Investment securities available-for-sale:
U.S. treasury bonds	$	49,894	$	—	$	(1,993)	$	—	$	47,901
U.S. agency securities	729,090		—		(57,693)		—		671,397
Residential mortgage-backed securities	823,992		45		(96,684)		—		727,353
Commercial mortgage-backed securities	54,557		—		(4,993)		—		49,564
Municipal bonds	8,783		—		(293)		—		8,490
Corporate bonds	2,000		—		(300)		(17)		1,683
Total available-for-sale securities	$	1,668,316	$	45	$	(161,956)	$	(17)	$	1,506,388

(dollars in thousands)	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Estimated Fair Value
December 31, 2023
Investment securities held-to-maturity:
Residential mortgage-backed securities	$	670,043	$	—	$	(79,980)	$	590,063
Commercial mortgage-backed securities	90,227		—		(12,867)		77,360
Municipal bonds	125,114		5		(8,540)		116,579
Corporate bonds	132,309		—		(14,729)		117,580
Total	$	1,017,693	$	5	$	(116,116)	$	901,582
Allowance for credit losses	(1,956)
Total held-to-maturity securities, net of ACL	$	1,015,737

At March 31, 2024 and December 31, 2023, the Company held $54.7 million and $25.7 million, respectively, of equity securities in a combination of Federal Reserve System ("Federal Reserve Board," "Federal Reserve" or "FRB") and FHLB stocks, which are required to be held for regulatory purposes. The securities are not marketable, and therefore are carried at cost; they are classified as restricted securities, and periodically evaluated for impairment based on ultimate recovery of par value.

At March 31, 2024 and December 31, 2023, the Company had $50.0 million and $51.7 million, respectively, of unamortized unrealized losses outstanding following the transfer of investment securities from available-for-sale to held-to-maturity in 2022. These unrealized losses are included in accumulated other comprehensive loss and are amortized through interest income as a yield adjustment over the remaining term of the securities.

Accrued interest receivable on investment securities totaled $7.8 million and $7.6 million at March 31, 2024 and December 31, 2023, respectively. The accrued interest receivable is excluded from the amortized cost of the securities and is reported in other assets in the Consolidated Balance Sheets.

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The following tables summarize available-for-sale and held-to-maturity securities in an unrealized loss position by length of time:

		Less Than 12 Months				12 Months or Greater				Total
(dollars in thousands)	Number of Securities	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
March 31, 2024
Investment securities available-for-sale:
U.S. treasury bonds	2	$	—	$	—	$	48,233	$	(1,686)	$	48,233	$	(1,686)
U. S. agency securities	76	2,904		(5)		636,422		(58,858)		639,326		(58,863)
Residential mortgage-backed securities	151	8,180		(60)		688,525		(102,206)		696,705		(102,266)
Commercial mortgage-backed securities	13	—		—		48,938		(5,080)		48,938		(5,080)
Municipal bonds	1	—		—		8,306		(434)		8,306		(434)
Corporate bonds	1	—		—		1,681		(302)		1,681		(302)
Total	244	$	11,084	$	(65)	$	1,432,105	$	(168,566)	$	1,443,189	$	(168,631)

		Less Than 12 Months				12 Months or Greater				Total
(dollars in thousands)	Number of Securities	Estimated Fair Value		Unrecognized Losses		Estimated Fair Value		Unrecognized Losses		Estimated Fair Value		Unrecognized Losses
March 31, 2024
Investment securities held-to-maturity:
Residential mortgage-backed securities	142	$	—	$	—	$	568,040	$	(87,348)	$	568,040	$	(87,348)
Commercial mortgage-backed securities	16	—		—		76,966		(13,000)		76,966		(13,000)
Municipal bonds	42	3,474		(63)		111,740		(9,726)		115,214		(9,789)
Corporate bonds	30	—		—		105,887		(14,393)		105,887		(14,393)
Total	230	$	3,474	$	(63)	$	862,633	$	(124,467)	$	866,107	$	(124,530)

		Less Than 12 Months				12 Months or Greater				Total
(dollars in thousands)	Number of Securities	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
December 31, 2023
Investment securities available-for-sale:
U.S. treasury bonds	2	$	—	$	—	$	47,901	$	(1,993)	$	47,901	$	(1,993)
U. S. agency securities	78	3,084		(4)		668,313		(57,689)		671,397		(57,693)
Residential mortgage-backed securities	149	—		—		718,042		(96,684)		718,042		(96,684)
Commercial mortgage-backed securities	13	—		—		49,564		(4,993)		49,564		(4,993)
Municipal bonds	1	—		—		8,490		(293)		8,490		(293)
Corporate bonds	1	—		—		1,683		(300)		1,683		(300)
Total	244	$	3,084	$	(4)	$	1,493,993	$	(161,952)	$	1,497,077	$	(161,956)

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		Less Than 12 Months				12 Months or Greater				Total
(dollars in thousands)	Number of Securities	Estimated Fair Value		Unrecognized Losses		Estimated Fair Value		Unrecognized Losses		Estimated Fair Value		Unrecognized Losses
December 31, 2023
Investment securities held-to-maturity:
Residential mortgage-backed securities	142	$	—	$	—	$	590,063	$	(79,980)	$	590,063	$	(79,980)
Commercial mortgage-backed securities	16	—		—		77,360		(12,867)		77,360		(12,867)
Municipal bonds	40	—		—		113,031		(8,540)		113,031		(8,540)
Corporate bonds	30	—		—		105,523		(14,729)		105,523		(14,729)
Total	228	$	—	$	—	$	885,977	$	(116,116)	$	885,977	$	(116,116)

Unrealized losses at March 31, 2024 were generally attributable to changes in market interest rates and interest spread relationships subsequent to the dates the securities were originally purchased and were considered to be temporary, and not due to credit quality concerns on the investment securities. The fair values of these securities are expected to recover as the securities approach their respective maturity dates. The Company does not intend to sell and it is likely that it will not be required to sell the securities prior to their anticipated recovery.

The Company measures its AFS and HTM security portfolios for current expected credit losses as part of its ACL analysis. During the three months ended March 31, 2024 and 2023, the Company recorded a provision for credit losses on its held-to-maturity portfolio of $1 thousand and $1.2 million, respectively. During the three months ended March 31, 2023, the Company recorded a provision for credit losses on its available-for-sale portfolio of $14 thousand. No provision was recorded for its available-for-sale security portfolio during the three months ended March 31, 2024. At March 31, 2024 and December 31, 2023, the Company had a total allowance of $17 thousand on its available-for-sale securities and $2.0 million on its held-to-maturity securities, each of which primarily comprise allowances for corporate bonds.

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The following table summarizes the Company's investment securities available-for-sale and investment securities held-to-maturity by contractual maturity. Expected maturities for mortgage-backed securities ("MBS") will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	March 31, 2024
(dollars in thousands)	Amortized Cost		Estimated Fair Value
Investment securities available-for-sale:
Within one year	$	139,224	$	135,426
One to five years	486,394		446,955
Five to ten years	112,838		97,570
Beyond ten years	20,392		17,612
Residential mortgage-backed securities	800,793		698,550
Commercial mortgage-backed securities	54,018		48,938
Less: allowance for credit losses	—		(17)
Total investment securities available-for-sale	1,613,659		1,445,034
Investment securities held-to-maturity:
Within one year	4,282		4,247
One to five years	61,707		59,309
Five to ten years	117,237		102,274
Beyond ten years	74,109		67,323
Residential mortgage-backed securities:	655,388		568,040
Commercial mortgage-backed securities	89,966		76,966
Less: allowance for credit losses	(1,957)		—
Total investment securities held-to-maturity	1,000,732		878,159
Total	$	2,614,391	$	2,323,193

For the three months ended March 31, 2024 and 2023, gross realized gains on calls of investment securities were $4 thousand and $5 thousand, respectively.

There were no gross realized losses on sales or calls of investment securities during the three months ended March 31, 2024. During the three months ended March 31, 2023, there were $26 thousand of gross realized losses on sales or calls of investment securities.

Gross sales and call proceeds were $27.1 million and $8.4 million for the three months ended March 31, 2024 and 2023, respectively.

The book value of securities pledged as collateral for certain government deposits, securities sold under agreements to repurchase, and certain lines of credit with correspondent banks at March 31, 2024 and December 31, 2023 was $2.1 billion, which were well in excess of required amounts in order to operationally provide significant reserve amounts for new business. As of March 31, 2024 and December 31, 2023, there were no holdings of securities of any one issuer, other than the U.S. Government and U.S. agency securities, which exceeded ten percent of shareholders' equity.

Note 4. Loans and Allowance for Credit Losses

The Bank makes loans to customers primarily in the Washington, D.C. metropolitan area and surrounding communities. A substantial portion of the Bank's loan portfolio consists of loans to businesses secured by real estate and other business assets.

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

	March 31, 2024				December 31, 2023
(dollars in thousands, except amounts in the footnote)	Amount		%		Amount		%
Commercial	$	1,408,767	18	%	$	1,473,766	18	%
PPP loans	467		—	%	528		—	%
Income-producing - commercial real estate	4,040,655		50	%	4,094,614		51	%
Owner-occupied - commercial real estate	1,185,582		15	%	1,172,239		15	%
Real estate mortgage - residential	72,087		1	%	73,396		1	%
Construction - commercial and residential	1,082,556		13	%	969,766		12	%
Construction - C&I (owner-occupied)	138,379		2	%	132,021		2	%
Home equity	53,251		1	%	51,964		1	%
Other consumer	958		—	%	401		—	%
Total loans	7,982,702		100	%	7,968,695		100	%
Less: allowance for credit losses	(99,684)				(85,940)
Net loans (1)	$	7,883,018			$	7,882,755

(1)Excludes accrued interest receivable of $46.3 million and $45.3 million at March 31, 2024 and December 31, 2023, respectively, which were recorded in other assets on the Consolidated Balance Sheets.

Unamortized net deferred fees and costs amounted to $24.1 million and $27.0 million at March 31, 2024 and December 31, 2023, respectively.

As of March 31, 2024 and December 31, 2023, the Bank serviced $334.1 million and $328.0 million, respectively, of multifamily FHA loans, SBA loans and other loan participations that are not reflected as loan balances on the Consolidated Balance Sheets.

Real estate loans are secured primarily by duly recorded first deeds of trust or mortgages. In some cases, the Bank may accept a recorded junior trust position. In general, borrowers will have a proven ability to build, lease, manage and/or sell a commercial or residential project and demonstrate satisfactory financial condition. Additionally, an equity contribution toward the project is customarily required.

Construction loans require that the financial condition and experience of the general contractor and major subcontractors be satisfactory to the Bank. Guaranteed, fixed-price contracts are required whenever appropriate, along with payment and performance bonds or completion bonds for larger scale projects.

Loans intended for residential land acquisition, lot development and construction are made on the premise that the land: 1) is or will be developed for building sites for residential structures, and 2) will ultimately be utilized for construction or improvement of residential zoned real properties, including the creation of housing. Residential development and construction loans will finance projects such as single family subdivisions, planned unit developments, townhouses, and condominiums. Residential land acquisition, development and construction loans generally are underwritten with a maximum term of 36 months, including extensions approved at origination.

Commercial land acquisition and construction loans are secured by real property where loan funds will be used to acquire land and to construct or improve appropriately zoned real property for the creation of income producing or owner occupied commercial properties. Borrowers are generally required to put equity into each project at levels determined by the appropriate approval authority. Commercial land acquisition and construction loans generally are underwritten with a maximum term of 24 months.

Substantially all construction draw requests must be presented in writing on American Institute of Architects documents and certified either by the contractor, the borrower and/or the borrower's architect. Each draw request shall also include the borrower's soft cost breakdown certified by the borrower or their agent. Prior to an advance, the Bank or its contractor inspects the project to determine that the work has been completed, to justify the draw requisition.

Commercial permanent loans are generally secured by improved real property that is generating income in the normal course of operation. Debt service coverage, assuming stabilized occupancy, must be satisfactory to support a permanent loan. The debt service coverage ratio is ordinarily at least 1.15 to 1.0. As part of the underwriting process, debt service coverage ratios are stress tested assuming a 200 basis point increase in interest rates from their current levels.

Commercial permanent loans generally are underwritten with a term not greater than 10 years or the remaining useful life of the property, whichever is lower. The preferred term is between 5 to 7 years, with amortization to a maximum of 25 years.

The Company's loan portfolio includes acquisition, development and construction ("ADC") real estate loans including both investment and owner-occupied projects. ADC loans amounted to $1.6 billion at March 31, 2024. A portion of the ADC portfolio, both speculative and non-speculative, includes loan-funded interest reserves at origination. ADC loans that provide for the use of interest reserves represent approximately 58.5% of the outstanding ADC loan portfolio at March 31, 2024. The decision to establish a loan-funded interest reserve is made upon origination of the ADC loan and is based upon a number of factors considered during underwriting of the credit, including: (1) the feasibility of the project; (2) the experience of the sponsor; (3) the creditworthiness of the borrower and guarantors; (4) the borrower equity contribution; and (5) the level of collateral protection. When appropriate, an interest reserve provides a means of addressing the cash flow characteristics of a properly underwritten ADC loan. The Company does not significantly utilize interest reserves in other loan products. The Company recognizes that one of the risks inherent in the use of interest reserves is the potential masking of underlying problems with the project and/or the borrower's ability to repay the loan. In order to mitigate these inherent risks, the Company employs a series of reporting and monitoring mechanisms on all ADC loans, whether or not an interest reserve is provided, including: (1) construction and development timelines that are monitored on an ongoing basis and track the progress of a given project to the timeline projected at origination; (2) a construction loan administration department independent of the lending function; (3) third party independent construction loan inspection reports; (4) monthly interest reserve monitoring reports detailing the balance of the interest reserves approved at origination and the days of interest carry represented by the reserve balances as compared to the then current anticipated time to completion and/or sale of speculative projects; and (5) quarterly commercial real estate construction meetings among senior Company management, which include monitoring of current and projected real estate market conditions. If a project has not performed as expected, it is not the customary practice of the Company to increase loan funded interest reserves.

The following table details activity in the ACL by portfolio segment for the three months ended March 31, 2024 and 2023. PPP loans are excluded from these tables since they do not carry an allowance for credit loss, as these loans are fully guaranteed as to principal and interest by the SBA, whose guarantee is backed by the full faith and credit of the U.S. Government. Allocation of a portion of the allowance to one category of loans does not restrict the use of the allowance to absorb losses in other categories.

(dollars in thousands)	Commercial		Income-Producing Commercial Real Estate		Owner-Occupied -Commercial Real Estate		Real Estate Mortgage Residential		Construction - Commercial and Residential		Construction - C&I (Owner-Occupied)		Home Equity		Other Consumer		Total
Three Months Ended March 31, 2024
Allowance for credit losses:
Balance at beginning of period	$	17,824	$	40,050	$	14,333	$	861	$	10,198	$	1,992	$	657	$	25	$	85,940
Loans charged-off	(496)		(20,943)		—		—		(129)		—		—		(1)		(21,569)
Recoveries of loans previously charged-off	115		—		24		—		—		—		—		—		139
Net loans (charged-off) recovered	(381)		(20,943)		24		—		(129)		—		—		(1)		(21,430)
Provision for (reversal of) credit losses	6,239		26,830		(820)		32		2,989		(63)		(39)		6		35,174
Ending balance	$	23,682	$	45,937	$	13,537	$	893	$	13,058	$	1,929	$	618	$	30	$	99,684
Three Months Ended March 31, 2023
Allowance for credit losses:
Balance at beginning of period	$	15,655	$	35,688	$	12,702	$	969	$	7,195	$	1,606	$	555	$	74	$	74,444
Loans charged-off	(868)		—		—		—		(136)		—		—		(50)		(1,054)
Recoveries of loans previously charged-off	76		—		—		—		—		—		—		3		79
Net loans (charged-off) recovered	(792)		—		—		—		(136)		—		—		(47)		(975)
Provision for (reversal of) credit losses	912		2,452		(245)		33		1,682		36		38		—		4,908
Ending balance	$	15,775	$	38,140	$	12,457	$	1,002	$	8,741	$	1,642	$	593	$	27	$	78,377

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

	March 31, 2024				December 31, 2023
	Business/Other				Business/Other
(dollars in thousands)	Assets		Real Estate		Assets		Real Estate
Commercial	$	1,532	$	1,218	$	1,674	$	1,240
Income-producing - commercial real estate	878		66,724		1,754		39,172
Owner-occupied - commercial real estate	—		19,798		—		19,836
Real estate mortgage - residential	—		1,692		—		1,692
Construction - commercial and residential	—		—		—		525
Home equity	—		237		—		242
Total	$	2,410	$	89,669	$	3,428	$	62,707

Credit Quality Indicators

The Company uses several credit quality indicators to manage credit risk in an ongoing manner. The Company's primary credit quality indicators inform an internal credit risk rating system that categorizes loans into pass, watch, special mention, or classified categories. Credit risk ratings are applied individually to those classes of loans that have significant or unique credit characteristics that benefit from a case-by-case evaluation. These are typically loans to businesses or individuals in the classes that comprise the commercial portfolio segment. Groups of loans that are underwritten and structured using standardized criteria and characteristics, such as statistical models (e.g., credit scoring or payment performance), are typically risk rated and monitored collectively. These are typically loans to individuals in the classes that comprise the consumer portfolio segment.

The following are the definitions of the Company's credit quality indicators:

Pass:	Loans in all classes that comprise the commercial and consumer portfolio segments that are not adversely rated, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan agreement. Management believes that there is a low likelihood of loss related to those loans that are considered pass.
Special Mention:	Loans in the classes that comprise the commercial portfolio segment that have potential weaknesses that deserve management's close attention. If not addressed, these potential weaknesses may result in deterioration of the repayment prospects for the loan. The special mention credit quality indicator is not used for classes of loans that comprise the consumer portfolio segment. Management believes that there is a moderate likelihood of some loss related to those loans that are considered special mention.
Classified:	Classified (a) Substandard – Loans inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the company will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard loans, does not have to exist in individual loans classified substandard.
	Classified (b) Doubtful – Loans that have all the weaknesses inherent in a loan classified substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors, which may work to the advantage and strengthening of the assets, its classification as an estimated loss is deferred until its more exact status may be determined.

The Company's credit quality indicators are generally updated annually, however, credits rated "Special Mention" or below are reviewed more frequently. Based on the most recent analysis performed, the amortized cost basis of loans by risk category, class and year of origination, along with any charge-offs that were recorded in the applicable loan segment, if applicable, were as follows:

(dollars in thousands)	Prior		2020		2021		2022		2023		2024		Revolving Loans Amort. Cost Basis		Revolving Loans Convert. to Term		Total
March 31, 2024
Commercial
Pass	$	193,755	$	35,451	$	174,103	$	141,181	$	187,057	$	24,604	$	569,226	$	1,154	$	1,326,531
Special Mention	8,493		—		—		—		—		—		4,286		8,058		20,837
Substandard	13,771		9,371		1,538		281		—		—		36,438		—		61,399
Total	216,019		44,822		175,641		141,462		187,057		24,604		609,950		9,212		1,408,767
YTD gross charge-offs	(396)		—		—		—		—		—		(100)		—		(496)
PPP loans
Pass	—		—		467		—		—		—		—		—		467
Income producing - commercial real estate
Pass	1,452,244		308,573		559,404		755,375		299,264		26,251		243,343		19,359		3,663,813
Special Mention	170,118		6,744		—		—		—		—		—		—		176,862
Substandard	199,980		—		—		—		—		—		—		—		199,980
Total	1,822,342		315,317		559,404		755,375		299,264		26,251		243,343		19,359		4,040,655
YTD gross charge-offs	(20,943)		—		—		—		—		—		—		—		(20,943)
Owner occupied - commercial real estate
Pass	628,063		34,703		222,361		41,514		126,663		4,590		515		—		1,058,409
Special Mention	61,117		—		—		—		—		—		—		—		61,117
Substandard	64,791		1,265		—		—		—		—		—		—		66,056
Total	753,971		35,968		222,361		41,514		126,663		4,590		515		—		1,185,582
Real estate mortgage - residential
Pass	29,496		2,175		15,668		14,689		5,889		—		—		—		67,917
Substandard	4,170		—		—		—		—		—		—		—		4,170
Total	33,666		2,175		15,668		14,689		5,889		—		—		—		72,087
Construction - commercial and residential
Pass	77,388		11,101		241,373		485,461		89,757		3,874		136,092		1,177		1,046,223
Special Mention	6,532		—		—		—		—		—		—		—		6,532
Substandard	—		29,801		—		—		—		—		—		—		29,801
Total	83,920		40,902		241,373		485,461		89,757		3,874		136,092		1,177		1,082,556
YTD gross charge-offs	(129)		—		—		—		—		—		—		—		(129)
Construction - C&I (owner occupied)
Pass	26,151		56,094		615		33,242		15,084		—		7,193		—		138,379
Home equity
Pass	1,758		86		185		117		—		—		50,589		146		52,881
Substandard	71		—		237		—		—		—		62		—		370
Total	1,829		86		422		117		—		—		50,651		146		53,251
Other consumer
Pass	2		—		—		—		—		—		956		—		958
Total	2		—		—		—		—		—		956		—		958
YTD gross charge-offs	—		—		—		—		—		—		—		(1)		(1)
Total recorded investment	$	2,937,900	$	495,364	$	1,215,951	$	1,471,860	$	723,714	$	59,319	$	1,048,700	$	29,894	$	7,982,702
Total YTD gross charge-offs	$	(21,468)	$	—	$	—	$	—	$	—	$	—	$	(100)	$	(1)	$	(21,569)
(dollars in thousands)	Prior		2019		2020		2021		2022		2023		Revolving Loans Amort. Cost Basis		Revolving Loans Convert. to Term		Total
December 31, 2023
Commercial
Pass	$	157,563	$	48,524	$	39,133	$	194,555	$	149,320	$	191,889	$	623,684	$	5,207	$	1,409,875
Special Mention	1,415		—		—		—		—		—		2,259		—		3,674
Substandard	13,797		58		10,337		1,509		222		—		33,670		624		60,217
Total	172,775		48,582		49,470		196,064		149,542		191,889		659,613		5,831		1,473,766
YTD gross charge-offs	(885)		—		—		—		—		—		—		(1,135)		(2,020)
PPP loans
Pass	—		—		—		528		—		—		—		—		528
Income producing - commercial real estate
Pass	1,257,937		326,999		328,743		517,957		732,291		327,126		263,317		1,845		3,756,215
Special Mention	84,585		44,424		6,740		—		—		—		—		—		135,749
Substandard	139,961		62,689		—		—		—		—		—		—		202,650
Total	1,482,483		434,112		335,483		517,957		732,291		327,126		263,317		1,845		4,094,614
YTD gross charge-offs	(11,817)		—		—		—		—		—		—		—		(11,817)
Owner occupied - commercial real estate
Pass	534,525		103,034		35,385		202,776		41,907		125,934		673		55		1,044,289
Special Mention	54,288		13,348		—		—		—		—		—		—		67,636
Substandard	37,167		—		1,274		—		—		—		—		21,873		60,314
Total	625,980		116,382		36,659		202,776		41,907		125,934		673		21,928		1,172,239
Real estate mortgage - residential
Pass	22,877		7,545		2,186		15,967		14,756		5,895		—		—		69,226
Substandard	4,170		—		—		—		—		—		—		—		4,170
Total	27,047		7,545		2,186		15,967		14,756		5,895		—		—		73,396
Construction - commercial and residential
Pass	30,619		3,440		45,739		251,038		419,393		87,400		124,013		—		961,642
Substandard	8,124		—		—		—		—		—		—		—		8,124
Total	38,743		3,440		45,739		251,038		419,393		87,400		124,013		—		969,766
YTD Gross Charge-offs	(136)		(5,500)		—		—		—		—		—		—		(5,636)
Construction - C&I (owner occupied)
Pass	18,551		4,265		56,361		618		33,237		12,619		6,370		—		132,021
Home equity
Pass	1,590		—		87		151		118		—		49,035		643		51,624
Substandard	—		36		—		—		—		—		62		242		340
Total	1,590		36		87		151		118		—		49,097		885		51,964
Other consumer
Pass	1		—		—		—		46		—		354		—		401
Total	1		—		—		—		46		—		354		—		401
YTD gross charge-offs	(50)		—		—		—		—		—		—		—		(50)
Total recorded investment	$	2,367,170	$	614,362	$	525,985	$	1,185,099	$	1,391,290	$	750,863	$	1,103,437	$	30,489	$	7,968,695
Total YTD gross charge-offs	$	(12,888)	$	(5,500)	$	—	$	—	$	—	$	—	$	—	$	(1,135)	$	(19,523)

Nonaccrual and Past Due Loans

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

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

(dollars in thousands, except amounts in footnotes)	Nonaccrual with No Allowance for Credit Losses		Nonaccrual with an Allowance for Credit Losses		Total Nonaccrual Loans
March 31, 2024
Commercial	$	1,045	$	875	$	1,920
Income producing - commercial real estate	67,602		—		67,602
Owner occupied - commercial real estate	19,798		—		19,798
Real estate mortgage - residential	—		1,934		1,934
Home equity	237		—		237
Total (1)	$	88,682	$	2,809	$	91,491
December 31, 2023
Commercial	$	1,002	$	1,047	$	2,049
Income producing - commercial real estate	40,926		—		40,926
Owner occupied - commercial real estate	19,836		—		19,836
Real estate mortgage - residential	—		1,946		1,946
Construction - commercial and residential	—		525		525
Home equity	242		—		242
Total (1)	$	62,006	$	3,518	$	65,524

(1)Gross coupon interest income of approximately $1.3 million and $182 thousand would have been recorded for the three months ended March 31, 2024 and 2023, respectively, if nonaccrual loans shown above had been current and in accordance with their original terms, while no coupon interest income was actually recorded on such loans for the three months ended March 31, 2024 and 2023, respectively.

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

(dollars in thousands)	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 Days or More Past Due		Total Past Due Loans		Current Loans		Nonaccrual Loans		Total Recorded Investment in Loans
March 31, 2024
Commercial	$	11,175	$	—	$	—	$	11,175	$	1,395,672	$	1,920	$	1,408,767
PPP loans	—		—		—		—		467		—		467
Income producing - commercial real estate	11,106		—		—		11,106		3,961,947		67,602		4,040,655
Owner occupied - commercial real estate	—		—		—		—		1,165,784		19,798		1,185,582
Real estate mortgage - residential	199		—		—		199		69,954		1,934		72,087
Construction - commercial and residential	8,590		—		—		8,590		1,073,966		—		1,082,556
Construction - C&I (owner occupied)	—		—		—		—		138,379		—		138,379
Home equity	—		36		—		36		52,978		237		53,251
Other consumer	2		—		—		2		956		—		958
Total	$	31,072	$	36	$	—	$	31,108	$	7,860,103	$	91,491	$	7,982,702
December 31, 2023
Commercial	$	985	$	7,048	$	—	$	8,033	$	1,463,684	$	2,049	$	1,473,766
PPP loans	—		—		—		—		528		—		528
Income producing - commercial real estate	—		—		—		—		4,053,688		40,926		4,094,614
Owner occupied - commercial real estate	1,274		—		—		1,274		1,151,129		19,836		1,172,239
Real estate mortgage – residential	2,089		—		—		2,089		69,361		1,946		73,396
Construction - commercial and residential	2,056		—		—		2,056		967,185		525		969,766
Construction - C&I (owner occupied)	—		—		—		—		132,021		—		132,021
Home equity	197		—		—		197		51,525		242		51,964
Other consumer	—		—		—		—		401		—		401
Total	$	6,601	$	7,048	$	—	$	13,649	$	7,889,522	$	65,524	$	7,968,695

Loan Modifications for Borrowers Experiencing Financial Difficulty

The Company evaluates all loan restructurings according to the accounting guidance for loan modifications to determine if the restructuring results in a new loan or a continuation of the existing loan. Loan modifications to borrowers experiencing financial difficulties that result in a direct change in the timing or amount of contractual cash flows include situations where there is principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and combinations of the listed modifications. Therefore, the disclosures related to loan restructurings are for modifications which have a direct impact on cash flows.

The Company may offer various types of modifications when restructuring a loan. Commercial and industrial loans modified in a loan restructuring often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor is often requested.

Commercial mortgage and construction loans modified in a loan restructuring often involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Construction loans modified in a loan restructuring may also involve extending the interest-only payment period.

Loans modified in a loan restructuring for the Company may have the financial effect of increasing the specific allowance associated with the loan. An allowance for consumer and commercial loans that have been modified in a loan restructuring is measured based on the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's observable market price, or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent. Management exercises significant judgment in developing these estimates.

Commercial and consumer loans modified in a loan restructuring are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a loan restructuring subsequently default, the Company evaluates the loan for possible further loss. The allowance may be increased, adjustments may be made in the allocation of the allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan.

The following tables present the amortized cost basis as of March 31, 2024 and 2023 and the financial effect of loans modified to borrowers experiencing financial difficulty during the three months ended March 31, 2024 and 2023:

	March 31, 2024
(dollars in thousands)	Term Extension		Combination - Term Extension and Principal Payment Delay		Total		Percentage of Total Loan Type		Weighted Average Term and Principal Payment Extension
Three months ended March 31, 2024:
Commercial	$	31,553	$	—	$	31,553	2.2	%	4 months
Income producing - commercial real estate	—		50,926		50,926		1.3	%	3 months
Real estate mortgage - residential	—		2,478		2,478		3.4	%	6 months
Total	$	31,553	$	53,404	$	84,957
	March 31, 2023
(dollars in thousands)	Term Extension		Combination - Term Extension and Principal Payment Delay		Total		Percentage of Total Loan Type		Weighted Average Term and Principal Payment Extension
Three months ended March 31, 2023:
Commercial	$	21,744	$	—	$	21,744	1.5	%	3 months
Income producing - commercial real estate	7,211		60,139		67,350		1.7	%	4 months
Owner occupied - commercial real estate	—		19,170		19,170		1.8	%	3 months
Total	$	28,955	$	79,309	$	108,264

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

	March 31, 2024
	Payment Status (Amortized Cost Basis)
(dollars in thousands)	Current		30-89 Days Past Due		Nonaccrual
Commercial	$	37,308	$	1,467	$	—
Income producing - commercial real estate	104,463		—		66,136
Owner occupied - commercial real estate	—		—		19,127
Real estate mortgage - residential	2,478		—		—
Construction - commercial and residential	—		6,532		—
Total	$	144,249	$	7,999	$	85,263

The Company monitors loan payments on performing and nonperforming loans on an on-going basis to determine if a loan is considered to have a payment default. To determine the existence of a payment default, the Company analyzes the economic conditions that exist for each borrower and their ability to generate positive cash flow during a given loan's term.

The following table presents the amortized cost basis of loans that were experiencing payment default at March 31, 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty:

	March 31, 2024
	Amortized Cost Basis
(dollars in thousands)	Term Extension		Combination - Term Extension and Principal Payment Delay		Combination - Term Extension, Principal Payment Delay and Interest Rate Reduction
Commercial	$	—	$	1,467	$	—
Income producing - commercial real estate	—		—		66,136
Owner occupied - commercial real estate	—		19,127		—
Construction - commercial and residential	6,532		—		—
Total	$	6,532	$	20,594	$	66,136

The Company individually evaluates nonaccrual loans when performing its CECL estimate to calculate the ACL. Additionally, the Company utilizes historical internal and third-party service provider sourced loss data in the determination of its PD/LGD rates applied in the calculation of its CECL estimate. Upon determination that a modified loan (or a portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is charged off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the ACL is adjusted by the same amount.

Note 5. Leases

The Company accounts for leases in accordance with ASC Topic 842. A lease is defined as a contract that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Substantially all of the leases in which the Company is the lessee comprise real estate property for branch offices, ATM locations, and corporate office space. Substantially all of our leases are classified as operating leases, and are included in operating lease right-of-use ("ROU") assets and operating lease liabilities in the Consolidated Balance Sheets.

As of March 31, 2024 and December 31, 2023, the Company had $17.7 million and $19.1 million of operating lease ROU assets, respectively, and $21.6 million and $23.2 million of operating lease liabilities, respectively, on the Company's Consolidated Balance Sheets. The Company elects not to recognize ROU assets and lease liabilities arising from short-term leases, leases with initial terms of twelve months or less, or equipment leases (deemed immaterial) on the Consolidated Balance Sheets.

The leases contain options to extend or terminate the lease, which are recognized as part of the ROU assets and lease liabilities when an economic benefit to exercise the option exists and there is a 90% probability that the Company will exercise the option. If these criteria are not met, the options are not included in ROU assets and lease liabilities.

As of March 31, 2024, the Company's leases do not contain material residual value guarantees or impose restrictions or covenants related to dividends or its ability to incur additional financial obligations. During the three months ended March 31, 2024, the Company did not enter into new leases nor renew or extend any leases. The Company had no leases expire during that period; however, one lease expired in April 2024.

20

The following table presents lease costs and other lease information.

	Three Months Ended
(dollars in thousands)	March 31, 2024				March 31, 2023
Lease cost
Operating lease cost (cost resulting from lease payments)	$	1,601			$	1,716
Variable lease cost (cost excluded from lease payments)	241				256
Sublease income	(30)				(30)
Net lease cost	$	1,812			$	1,942
Operating lease - operating cash flows (fixed payments)	$	1,778			$	1,859
(dollars in thousands)	March 31, 2024				December 31, 2023
Right-of-use assets - operating leases	$	17,679			$	19,129
Operating lease liabilities	$	21,611			$	23,238
Weighted average lease term - operating leases	4.81			yrs	4.93			yrs
Weighted average discount rate - operating leases	2.73		%		2.78		%

Future minimum payments for operating leases with initial or remaining terms of more than one year as of March 31, 2024 were as follows:

(dollars in thousands)
Twelve months ended:
March 31, 2025	$	5,147
March 31, 2026	6,078
March 31, 2027	2,988
March 31, 2028	2,599
March 31, 2029	2,176
Thereafter	3,751
Total future minimum lease payments	22,739
Amounts representing interest	(1,128)
Present value of net future minimum lease payments	$	21,611

Note 6. Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities through the use of derivative financial instruments.

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Cash Flow Hedges of Interest Rate Risk

The Company historically utilized interest rate swaptions, accounted for as cash flow hedges, to protect itself against adverse fluctuations in interest rates on a forecasted issuance of debt. During the three months ended March 31, 2024, the Company terminated its interest rate swaption contracts. The Company expects to reclassify $121 thousand out of accumulated other comprehensive loss over the succeeding twelve months as a reduction of interest expense.

Interest Rate Products

Interest rate derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. The Company executes interest rate caps and swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net market risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings.

The Company entered into credit risk participation agreements ("RPAs") with institutional counterparties, under which the Company assumes its pro-rata share of the credit exposure associated with a borrower's performance related to interest rate derivative contracts in exchange for a fee. The fair value of RPAs is calculated by determining the total expected asset or liability exposure of the derivatives to the borrowers and applying the borrowers' credit spread to that exposure. Total expected exposure incorporates both the current and potential future exposure of the derivatives, derived from using observable inputs, such as yield curves and volatilities.

Credit-Risk-Related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.

The Company is exposed to credit risk in the event of nonperformance by the interest rate derivative counterparty. The Company minimizes this risk by entering into derivative contracts with only large, stable financial institutions, and the Company has not experienced, and does not expect, any losses from counterparty nonperformance on the interest rate derivatives. The Company monitors counterparty risk in accordance with the provisions of ASC Topic 815, "Derivatives and Hedging." In addition, the interest rate derivative agreements contain language outlining collateral-pledging requirements for each counterparty.

The interest rate derivative agreements detail: 1) that collateral be posted when the market value exceeds certain threshold limits associated with the secured party's exposure; 2) if the Company defaults on any of its indebtedness (including default where repayment of the indebtedness has not been accelerated by the lender), then the Company could also be declared in default on its derivative obligations; 3) if the Company fails to maintain its status as a well-capitalized institution then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements.

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The table below identifies the balance sheet category and fair value of the Company's derivative instruments as of March 31, 2024 and December 31, 2023. The Company has a minimum collateral posting threshold with its derivative counterparty. If the Company had breached any provisions under the agreement at March 31, 2024, it could have been required to settle its obligations under the agreement at the termination value.

	March 31, 2024					December 31, 2023
(dollars in thousands)	Notional Amount		Fair Value		Balance Sheet Category	Notional Amount		Fair Value		Balance Sheet Category
Derivatives in an asset position:
Derivatives designated as hedging instruments:
Interest rate product	$	—	$	—	Other assets	$	300,000	$	374	Other assets
Derivatives not designated as hedging instruments:
Interest rate product	680,245		34,147		Other assets	651,429		30,288		Other assets
Credit risk participation agreements	49,480		—		Other liabilities	49,480		3		Other liabilities
Total	729,725		34,147			700,909		30,291
Total derivatives in an asset position:	$	729,725	$	34,147		$	1,000,909	$	30,665
Derivatives in a liability position:
Derivatives not designated as hedging instruments:
Interest rate product	$	680,245	$	33,646	Other liabilities	$	651,429	$	30,555	Other liabilities

The table below presents the effect of the Company's derivative financial instruments on the Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023:

The Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Operations
		Amount of Gain (Loss) Recognized in Income on Derivatives
	Location of Gain (Loss) Recognized in Income on Derivatives	Three Months Ended March 31,
(dollars in thousands)		2024		2023
Interest rate products	Other income / (other expense)	$	239	$	(350)
Mortgage banking derivatives	Gain on sale of loans	—		(64)
Total		$	239	$	(414)

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Note 7. Deposits

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

(dollars in thousands)	March 31, 2024		December 31, 2023
Noninterest-bearing demand	$	1,835,524	$	2,279,081
Interest-bearing transaction	1,207,566		997,448
Savings and money market	3,235,391		3,314,043
Time deposits	2,222,958		2,217,467
Total	$	8,501,439	$	8,808,039

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

(dollars in thousands)	March 31, 2024		December 31, 2023
2024	$	1,294,087	1,445,395
2025	716,191		576,379
2026	195,505		180,384
2027	5,779		5,482
2028	10,162		9,827
2029	1,234		—
Total	$	2,222,958	$	2,217,467

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

(dollars in thousands)	March 31, 2024		December 31, 2023
Three months or less	$	321,017	$	119,880
More than three months through six months	341,418		318,353
More than six months through twelve months	253,492		368,103
Over twelve months	696,857		726,758
Total	$	1,612,784	$	1,533,094

At March 31, 2024, total brokered deposits were $4.2 billion, or 49.1% of total deposits, of which $1.7 billion were attributable to the Certificates of Deposit Account Registry Service ("CDARS") and Insured Cash Sweep ("ICS") two-way accounts. At December 31, 2023, total brokered deposits (excluding the CDARS and ICS two-way) were $2.5 billion, or 28.8% of total deposits.

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Note 8. Borrowings

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

(dollars in thousands)	Borrowings - Principal		Unamortized Deferred Issuance Costs		Net Borrowings Outstanding		Available Capacity (1)		Maturity Dates	Interest Rates (2)
March 31, 2024:
Customer repurchase agreements	$	37,059	$	—	$	37,059	$	—	N/A	3.48	%
Secured borrowings:
FHLB	600,000		—		600,000		1,302,153		September 25, 2024	5.53	%
FRB:
BTFP	1,000,000		—		1,000,000		—		January 15, 2025	4.76	%
Discount window	—		—		—		568,602		N/A	N/A
Raymond James repurchase agreement	—		—		—		17,780		N/A	N/A
Subordinated notes, 5.75%	70,000		(52)		69,948		—		September 1, 2024	5.75	%
Total borrowings	$	1,707,059	$	(52)	$	1,707,007	$	1,888,535
December 31, 2023:
Customer repurchase agreements	$	30,587	$	—	$	30,587	$	—	N/A	3.42%
Secured borrowings:
FHLB	—		—		—		1,271,846		N/A	N/A
FRB:
BTFP	1,300,000		—		1,300,000		598,870		March 22, 2024	4.53%
Discount window	—		—		—		601,504		N/A	N/A
Raymond James repurchase agreement	—		—		—		17,993		N/A	N/A
Subordinated notes, 5.75%	70,000		(82)		69,918		—		September 1, 2024	5.75%
Total borrowings	$	1,400,587	$	(82)	$	1,400,505	$	2,490,213

(1)Available capacity on the Company's borrowing arrangements with the FHLB, the FRB and the Raymond James repurchase line comprise pledged collateral that has not been borrowed against. At March 31, 2024, the Company had total additional undrawn borrowing capacity of approximately $2.2 billion, comprising unencumbered securities available to be pledged of approximately $297.5 million and undrawn financing on pledged assets of $1.9 billion.

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

The Company’s repurchase agreements operate on a rolling basis and do not contain contractual maturity dates. The contractual maturity dates on FHLB secured borrowings represent the maturity dates of current advances and are not evidence of a termination date on the line.

There are no prepayment penalties nor unused commitment fees on any of the Company’s borrowing arrangements.

Bank Term Funding Program ("BTFP")

On March 12, 2023, the FRB, Department of Treasury and the Federal Deposit Insurance Corporation ("FDIC") issued a joint statement outlining actions they had taken to protect the U.S. economy by strengthening public confidence in the banking system as a result of and in response to recently announced bank closures. Among other actions, the Federal Reserve Board announced that it would make available additional funding to eligible depository institutions through the creation of a new BTFP. The BTFP provides eligible depository institutions, including the Company's subsidiary bank, the Bank, an additional source of liquidity.

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Borrowings are funded based on a percentage of the principal of eligible collateral posted, as defined within the terms of the program. Interest is payable at a fixed rate over the term of the borrowing and there are no prepayment penalties. The Federal Reserve announced in January 2024 that the BTFP would stop originating new loans on March 11, 2024, as scheduled. The Federal Reserve also modified the terms of the program so that the interest rate for new loans would be no lower than the interest rate on reserve balances in effect on the day the loan is made. In January 2024, the Company borrowed an additional $500.0 million through the BTFP and refinanced $500.0 million under the program, both at an interest rate of 4.76% that mature in January 2025.

Subordinated Notes

On August 5, 2014, the Company completed the sale of $70.0 million of its 5.75% subordinated notes, due September 1, 2024 (the "2024 Notes"). The 2024 Notes were offered to the public at par and qualify as Tier 2 capital for regulatory purposes to the fullest extent permitted under the Basel III Rule capital requirements, and were fully phased out of regulatory capital as of December 31, 2023 as they approached maturity. The net proceeds were approximately $68.8 million which included $1.2 million in deferred financing costs, which are being amortized over the life of the 2024 Notes.

Note 9. Net Income (Loss) per Common Share

The calculation of net income per common share for the three months ended March 31, 2024 and 2023 was as follows:

	Three Months Ended March 31,
(dollars and shares in thousands, except per share data)	2024		2023
Basic:
Net (loss) income	$	(338)	$	24,234
Average common shares outstanding	30,068		31,109
Basic net (loss) income per common share	$	(0.01)	$	0.78
Diluted:
Net (loss) income	$	(338)	$	24,234
Average common shares outstanding	30,068		31,109
Adjustment for common share equivalents	—		71
Average common shares outstanding-diluted	30,068		31,180
Diluted net (loss) income per common share	$	(0.01)	$	0.78
Anti-dilutive shares	58		3

Basic net (loss) income per share is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted net (loss) income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the net income (loss) of the Company. The computation of diluted per share does not assume conversion or exercise of securities that would have an anti-dilutive effect on net income (loss) per share.

Securities issued by the Company that could potentially dilute net income (loss) per share in future periods include stock options and restricted stock. To calculate diluted net income (loss) per share, the Company utilizes the Treasury Stock method which results in only an incremental number of shares added to shares outstanding during the period.

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Note 10. Other Comprehensive (Loss) Income

The following table presents the components of other comprehensive (loss) income for the three months ended March 31, 2024 and 2023.

(dollars in thousands)	Before Tax		Tax Effect		Net of Tax
Three Months Ended March 31, 2024
Net unrealized (loss) gain on securities available-for-sale	$	(6,693)	$	1,626	$	(5,067)
Less: Reclassification adjustment for net loss included in net income	(4)		1		(3)
Total unrealized (loss) gain on investment securities available-for-sale	(6,697)		1,627		(5,070)
Amortization of unrealized loss on securities transferred to held-to-maturity	1,731		(346)		1,385
Net unrealized gain on derivatives	363		(89)		274
Other comprehensive (loss) income	$	(4,603)	$	1,192	$	(3,411)
Three Months Ended March 31, 2023
Net unrealized gain (loss) on securities available-for-sale	$	24,039	$	(6,103)	$	17,936
Less: Reclassification adjustment for net loss included in net income	21		(5)		16
Total unrealized gain (loss) on investment securities available-for-sale	24,060		(6,108)		17,952
Amortization of unrealized loss on securities transferred to held-to-maturity	1,983		(1,342)		641
Other comprehensive income (loss)	$	26,043	$	(7,450)	$	18,593

The following table presents the changes in each component of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2024 and 2023.

(dollars in thousands)	Securities Available-For-Sale		Securities Held-to-Maturity		Derivatives		Accumulated Other Comprehensive Income (Loss)
Three Months Ended March 31, 2024
Balance at beginning of period	$	(122,246)	$	(39,929)	$	(182)	$	(162,357)
Other comprehensive (loss) income before reclassifications	(5,067)		—		274		(4,793)
Amounts reclassified from accumulated other comprehensive income	(3)		—		—		(3)
Amortization of unrealized loss on securities transferred to held-to-maturity	—		1,385		—		1,385
Net other comprehensive (loss) income during period	(5,070)		1,385		274		(3,411)
Balance at end of period	$	(127,316)	$	(38,544)	$	92	$	(165,768)
Three Months Ended March 31, 2023
Balance at beginning of period	$	(154,773)	$	(44,734)	$	—	$	(199,507)
Other comprehensive income before reclassifications	17,936		—		—		17,936
Amounts reclassified from accumulated other comprehensive income	16		—		—		16
Amortization of unrealized loss on securities transferred to held-to-maturity	—		641		—		641
Net other comprehensive income during period	17,952		641		—		18,593
Balance at end of period	$	(136,821)	$	(44,093)	$	—	$	(180,914)

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The following table presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three months ended March 31, 2024 and 2023.

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
	Three Months Ended March 31,				Affected Line Item in Consolidated Statements of Operations
(dollars in thousands)	2024		2023
Realized gain (loss) on sale of investment securities	$	4	$	(21)	Net gain (loss) on sale of investment securities
Income tax benefit (expense)	(1)		5		Income tax expense
Total reclassifications for the periods	$	3	$	(16)

Note 11. Fair Value Measurements

The fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Such valuation techniques are consistently applied. Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability. ASC Topic 820, "Fair Value Measurements and Disclosures," establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1    Quoted prices in active exchange markets for identical assets or liabilities; also includes certain U.S. treasury and other U.S. Government and agency securities actively traded in over-the-counter markets.

Level 2    Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data; also includes derivative contracts whose value is determined using a pricing model with observable market inputs or inputs that can be derived principally from or corroborated by observable market data. This category generally includes certain U.S. Government and agency securities, corporate debt securities, derivative instruments, and residential mortgage loans held for sale.

Level 3    Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for single dealer nonbinding quotes not corroborated by observable market data. This category generally includes certain private equity investments, retained interests from securitizations, and certain collateralized debt obligations.

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Assets and Liabilities Recorded at Fair Value on a Recurring Basis

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

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total Fair Value
March 31, 2024
Assets:
Investment securities available-for-sale:
U.S treasury bonds	$	—	$	48,233	$	—	$	48,233
U. S. agency securities	—		639,326		—		639,326
Residential mortgage-backed securities	—		698,550		—		698,550
Commercial mortgage-backed securities	—		48,938		—		48,938
Municipal bonds	—		8,306		—		8,306
Corporate bonds	—		1,681		—		1,681
Interest rate product	—		34,147		—		34,147
Total assets measured at fair value on a recurring basis	$	—	$	1,479,181	$	—	$	1,479,181
Liabilities:
Interest rate product	$	—	$	33,646	$	—	$	33,646
Total liabilities measured at fair value on a recurring basis	$	—	$	33,646	$	—	$	33,646
December 31, 2023
Assets:
Investment securities available-for-sale:
U.S. treasury bonds	$	—	$	47,901	$	—	$	47,901
U. S. agency securities	—		671,397		—		671,397
Residential mortgage-backed securities	—		727,353		—		727,353
Commercial mortgage-backed securities	—		49,564		—		49,564
Municipal bonds	—		8,490		—		8,490
Corporate bonds	—		1,683		—		1,683
Interest rate product	—		30,662		—		30,662
Credit risk participation agreements	—		3		—		3
Total assets measured at fair value on a recurring basis	$	—	$	1,537,053	$	—	$	1,537,053
Liabilities:
Interest rate product	$	—	$	30,555	$	—	$	30,555
Total liabilities measured at fair value on a recurring basis	$	—	$	30,555	$	—	$	30,555

Investment securities available-for-sale: Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security's credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include certain U.S. treasury bonds, U.S. Government and agency securities that actively traded in over-the-counter markets. Level 2 securities includes certain U.S. treasury bonds, U.S. agency debt securities, MBS issued by Government Sponsored Entities and municipal bonds. Securities classified as Level 3 include securities in less liquid markets, for which the carrying amounts approximate the fair value.

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Credit risk participation agreements: The Company enters into RPAs with institutional counterparties, under which the Company assumes its pro-rata share of the credit exposure associated with a borrower's performance related to interest rate derivative contracts. The fair value of RPAs is calculated by determining the total expected asset or liability exposure of the derivatives to the borrowers and applying the borrowers' credit spread to that exposure. Total expected exposure incorporates both the current and potential future exposure of the derivatives, derived from using observable inputs, such as yield curves and volatilities. Accordingly, RPAs fall within Level 2.

Interest rate derivatives: The Company entered into an interest rate derivative agreement with an institutional counterparty, under which the Company will receive cash if and when market rates exceed the derivatives strike rate. The fair value of the derivative is calculated by determining the total expected asset or liability exposure of the derivative. Total expected exposure incorporates both the current and potential future exposure of the derivative, derived from using observable inputs, such as yield curves and volatilities. Accordingly, the derivative falls within Level 2.

Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

The Company measures certain assets at fair value on a nonrecurring basis, and the following is a general description of the methods used to value such assets.

Loans: The fair value of individually assessed loans is estimated using one of several methods, including the collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. Those individually assessed loans not requiring a specific allowance represent loans for which the fair value of expected repayments or collateral exceed the recorded investment in such loans. At March 31, 2024, substantially all of the Company's individually evaluated loans were evaluated based upon the fair value of the collateral. In accordance with ASC Topic 820, individually evaluated loans where an allowance is established based on the fair value of collateral, i.e. those that are collateral dependent, require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the loan as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the loan as nonrecurring Level 3.

Other real estate owned ("OREO"): OREO is initially recorded at fair value less estimated selling costs. Fair value is based upon independent market prices, appraised values of the collateral or management's estimation of the value of the collateral, which the Company classifies as a Level 3 valuation.

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Assets measured at fair value on a nonrecurring basis are included in the table below:

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total Fair Value
March 31, 2024
Individually assessed loans:
Commercial	$	—	$	—	$	2,422	$	2,422
Income producing - commercial real estate	—		—		67,602		67,602
Owner occupied - commercial real estate	—		—		19,798		19,798
Real estate mortgage - residential	—		—		1,633		1,633
Home equity	—		—		237		237
Other real estate owned	—		—		773		773
Total assets measured at fair value on a nonrecurring basis as of March 31, 2024	$	—	$	—	$	92,465	$	92,465
December 31, 2023
Individually assessed loans:
Commercial	$	—	$	—	$	2,475	$	2,475
Income producing - commercial real estate	—		—		41,038		41,038
Owner occupied - commercial real estate	—		—		19,880		19,880
Real estate mortgage - residential	—		—		1,638		1,638
Consumer	—		—		396		396
Home equity	—		—		242		242
Other real estate owned	—		—		1,108		1,108
Total assets measured at fair value on a nonrecurring basis as of December 31, 2023	$	—	$	—	$	66,777	$	66,777

Fair Value of Financial Instruments

The Company discloses fair value information about financial instruments for which it is practicable to estimate the value, whether or not such financial instruments are recognized on the balance sheet. Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by quoted market price, if one exists.

Quoted market prices, if available, are shown as estimates of fair value. Because no quoted market prices exist for a portion of the Company's financial instruments, the fair value of such instruments has been derived based on management's assumptions with respect to future economic conditions, the amount and timing of future cash flows and estimated discount rates. Different assumptions could significantly affect these estimates. Accordingly, the net realizable value could be materially different from the estimates presented below. In addition, the estimates are only indicative of individual financial instrument values, including in certain cases, the Company's estimation of exit pricing, and should not be considered an indication of the fair value of the Company taken as a whole.

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

					Fair Value Measurements
(dollars in thousands)	Carrying Value		Fair Value		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
March 31, 2024
Assets
Cash and due from banks	$	10,076	$	10,076	$	10,076	$	—	$	—
Federal funds sold	11,343		11,343		—		11,343		—
Interest-bearing deposits with other banks	696,453		696,453		—		696,453		—
Investment securities available-for-sale	1,445,034		1,445,034		—		1,445,034		—
Investment securities held-to-maturity	1,000,732		878,159		—		878,159		—
Federal Reserve and Federal Home Loan Bank stock	54,678		N/A		—		—		—
Loans	7,982,702		7,596,097		—		—		7,596,097
Bank owned life insurance	113,624		113,624		—		113,624		—
Annuity investment	12,948		12,948		—		12,948		—
Interest rate product	34,147		34,147		—		34,147		—
Accrued interest receivable	54,074		54,074		54,074		—		—
Liabilities
Noninterest-bearing deposits	$	1,835,524	$	1,835,524	$	—	$	1,835,524	$	—
Interest-bearing deposits	4,442,957		4,442,957		—		4,442,957		—
Time deposits	2,222,958		2,217,742		—		2,217,742		—
Customer repurchase agreements	37,059		37,059		—		37,059		—
Borrowings	1,669,948		1,669,043		—		1,669,043		—
Interest rate product	33,646		33,646		—		33,646		—
Accrued interest payable	20,978		20,978		20,978		—		—
December 31, 2023
Assets
Cash and due from banks	$	9,047	$	9,047	$	9,047	$	—	$	—
Federal funds sold	3,740		3,740		—		3,740		—
Interest-bearing deposits with other banks	709,897		709,897		—		709,897		—
Investment securities available-for-sale	1,506,388		1,506,388		—		1,506,388		—
Investment securities held-to-maturity	1,015,737		901,582		—		901,582		—
Federal Reserve and Federal Home Loan Bank stock	25,748		N/A		—		—		—
Loans	7,968,695		7,720,241		—		—		7,720,241
Bank owned life insurance	112,921		112,921		—		112,921		—
Annuity investment	13,112		13,112		—		13,112		—
Credit risk participation agreements	3		3		—		3		—
Interest rate product	30,662		30,662		—		30,662		—
Accrued interest receivable	53,337		53,337		53,337		—		—
Liabilities
Noninterest-bearing deposits	$	2,279,081	$	2,279,081	$	—	$	2,279,081	$	—
Interest-bearing deposits	4,311,491		4,311,491		—		4,311,491		—
Time deposits	2,217,467		2,217,795		—		2,217,795		—
Customer repurchase agreements	30,587		30,587		—		30,587		—
Borrowings	1,369,918		1,368,621		—		1,368,621		—
Interest rate product	30,555		30,555		—		30,555		—
Accrued interest payable	57,395		57,395		57,395		—		—

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Note 12 - Legal Contingencies

From time to time, the Company and its subsidiaries are involved in various legal proceedings incidental to their business in the ordinary course, including matters in which damages in various amounts are claimed, as well as regulatory and governmental investigations and inquiries. Based on information currently available, the Company does not believe that the liabilities (if any) resulting from such matters will have a material effect on the financial position of the Company. However, in light of the inherent uncertainties involved in such matters, ongoing legal expenses or an adverse outcome in one or more of these matters could materially and adversely affect the Company's financial condition, results of operations or cash flows in any particular reporting period, as well as its reputation.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion provides information about the results of operations, financial condition, liquidity, and capital resources of Eagle Bancorp, Inc. and its subsidiaries (collectively, the "Company") as of the dates and periods indicated. The Company’s primary subsidiary is EagleBank (the "Bank"), and the Company’s other direct and indirect active subsidiaries are Bethesda Leasing, LLC, Eagle Insurance Services, LLC and Landroval Municipal Finance, Inc.

This discussion and analysis should be read in conjunction with the unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this report and the Management Discussion and Analysis in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

Caution About Forward Looking Statements. This report contains forward looking statements. These forward looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements and are typically identified with words such as "may," "will," "can," "anticipates," "believes," "expects," "plans," "outlook," "estimates," "potential," "assume," "probable," "possible," "continue," "should," "could," "would," "strive," "seeks," "deem," "projections," "forecast," "consider," "indicative," "uncertainty," "likely," "unlikely," "likelihood," "unknown," "attributable," "depends," "intends," "generally," "feel," "typically," "judgment," "subjective" and similar words or phrases.

For details on factors that could affect these expectations, see the risk factors contained in this report and the risk factors and other cautionary language included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and in other periodic and current reports filed by the Company with the Securities and Exchange Commission ("SEC"). These forward looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward looking statements. The Company's past results are not necessarily indicative of future performance, and nothing contained herein is meant to or should be considered and treated as earnings guidance of future quarters' performance projections. All information is as of the date of this report. Any forward-looking statements made by or on behalf of the Company speak only as to the date they are made. Except to the extent required by applicable law or regulation, the Company undertakes no obligation to revise or update publicly any forward looking statement for any reason.

GENERAL

The Company is a growth-oriented, one-bank holding company headquartered in Bethesda, Maryland, which is currently celebrating twenty-five years of successful operations. The Company provides general commercial and consumer banking services through the Bank, its wholly owned banking subsidiary, a Maryland chartered bank which is a member of the Federal Reserve System ("Federal Reserve Board," "Federal Reserve" or "FRB").

The Company was organized in October 1997, to be the holding company for the Bank. The Bank was organized in 1998 as an independent, community oriented, full service banking alternative to the super regional financial institutions that dominate the Company's primary market area. The Company's philosophy is to provide superior, personalized service to its customers. The Company focuses on relationship banking, providing each customer with a number of services and becoming familiar with and addressing customer needs in a proactive, personalized fashion. The Bank currently has a total of twelve branch offices, including six in Suburban Maryland, three in Northern Virginia, and three in Washington, D.C. The Bank also operates four lending offices, with two in Suburban Maryland, one in Northern Virginia, and one in Washington, D.C. In April 2024, one branch was closed as it had an expiring lease. The branch's clients will be served from our other branches, and through digital channels.

The Bank offers a broad range of commercial banking services to its business and professional clients, as well as full service consumer banking services to individuals living and/or working primarily in the Bank's market area. The Bank emphasizes providing commercial banking services to sole proprietors, small and medium-sized businesses, non-profit organizations and associations, and investors living and working in and near the primary service area. These services include the usual deposit functions of commercial banks, including business and personal checking accounts, "NOW" accounts and money market and savings accounts, business, construction, and commercial loans, consumer loans, and cash management services. The Bank is also active in the origination of Small Business Administration ("SBA") loans.

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The Bank generally sells the guaranteed portion of the SBA loans in a transaction apart from the loan origination generating noninterest income from the gains on sale, as well as servicing income on the portion participated. The Company originates multifamily Federal Housing Administration ("FHA") loans through the Department of Housing and Urban Development's Multifamily Accelerated Program ("MAP"). The Company securitizes these loans through the Government National Mortgage Association ("Ginnie Mae") MBS I program and shortly thereafter sells the resulting securities in the open market to authorized dealers in the normal course of business, and periodically bundles and sells the servicing rights. Bethesda Leasing, LLC, a subsidiary of the Bank, holds title to and manages other real estate owned ("OREO") assets. Landroval Municipal Finance, Inc., a subsidiary of the Bank, focuses on lending to municipalities by buying debt on the public market as well as direct purchase issuance.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company's Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") and follow general practices within the banking industry. Application of these principles requires management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions and judgments are based on information available as of the date of the Consolidated Financial Statements; accordingly, as this information changes, the Consolidated Financial Statements could reflect different estimates, assumptions, and judgments. Certain policies inherently have a greater reliance on the use of estimates, assumptions and judgments and, as such, have a greater possibility of producing results that could be materially different than originally reported. Estimates, assumptions, and judgments are necessary when assets and liabilities are required to be recorded at fair value, when a decline in the value of an asset not carried on the financial statements at fair value warrants an impairment write-down or a valuation reserve to be established, or when an asset or liability needs to be recorded contingent upon a future event. Carrying assets and liabilities at fair value inherently results in more financial statement volatility. The Company applies the accounting policies contained in Note 1 to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 and Note 1 to the Consolidated Financial Statements included in this report. There have been no significant changes to the Company's accounting policies as disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 except as indicated in "Accounting Standards Adopted in 2024" in Note 1 to the Consolidated Financial Statements in this report.

Allowance for Credit Losses on Loans and Reserve for Unfunded Commitments

A consequence of lending activities is that we may incur credit losses, so we record an allowance for credit losses ("ACL") with respect to loan receivables and a reserve for unfunded commitments ("RUC") as estimates of those losses. The amount of the ACL on loans is based on management's assessment of current expected credit losses ("CECL") in the portfolio. The amount of such losses will vary depending upon the risk characteristics of the loan portfolio as affected by economic conditions such as changes in interest rates, the financial performance of borrowers and regional unemployment rates, which management estimates by using a national forecast and estimating a regional adjustment based on historical differences between the two.

Management has significant discretion in making the judgments inherent in the determination of the provisions for credit loss, ACL and the RUC. Our determination of these amounts requires significant reliance on estimates and significant judgment as to the amount and timing of expected future cash flows on loans, significant reliance on historical loss rates on homogenous portfolios, consideration of our quantitative and qualitative evaluation of economic factors and the reliance on our reasonable and supportable forecasts.

We estimate the ACL on loans using a quantitative model that uses a probability of default ("PD") / loss given default ("LGD") cash flow method with an exposure at default ("EAD") model to estimate expected credit losses for its loan segments. The modeling of expected prepayment speeds is based on historical internal data and adjustments to account for loan-specific risk characteristics after pooling our loan portfolio based on similar risk characteristics.

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The Company uses regression analysis of historical internal and peer data provided by a third-party service provider (as Company loss data is insufficient) to determine suitable loss drivers to utilize when modeling lifetime PD and LGD. This analysis also determines how expected PD will react to forecasted levels of the loss drivers. During the three months ended March 31, 2024, management enhanced the cash flow model to incorporate three additional macroeconomic variables. The four economic variables selected, national unemployment (original variable used), Commercial Real Estate ("CRE") Price Index, House Price Index and Gross Domestic Product ("GDP"), are incorporated by utilizing a Loss Driver Analysis approach that factors in historical losses, including during the Great Recession, of regional peer banks and the Bank. The updated model incorporates a weighting of three economic scenarios; baseline, upside and downside. The scenarios cover the four economic forecast variables, with each segment of the portfolio linked to two of these variables, depending on the segment. The loss driver analysis is spread over a reasonable and supportable period of 18 months and reverts back to a historical loss rate over twelve months on a straight-line basis over the loan's remaining maturity. Management leverages economic projections from reputable and independent third parties to inform its loss driver forecasts over the forecast period.

Loans that have evidence of credit deterioration are excluded from the loan segments subject to the quantitative model above and are individually assessed.

The RUC represents the expected credit losses on off-balance sheet commitments such as unfunded commitments to extend credit and standby letters of credit. The RUC is determined by estimating future draws and applying the expected loss rates on those draws.

The ACL also includes an amount for inherent risks not reflected in the historical analyses. Relevant factors include, but are not limited to, concentrations of credit risk, changes in underwriting standards, experience and depth of lending staff and trends in delinquencies. While our methodology in establishing the reserve for credit losses attributes portions of the ACL and RUC to the commercial and consumer portfolio segments, the entire ACL and RUC is available to absorb credit losses expected in the total loan portfolio and total amount of unfunded credit commitments, respectively. Our model may reflect assumptions by management that are not covered by the qualitative and environmental factors, and we reevaluate all of its factors quarterly.

Management has developed an analytical process to monitor the adequacy of the ACL. Our methodology for determining our ACL was developed utilizing, among other factors, the guidance from federal banking regulatory agencies and relevant available information from internal and external sources and relating to past events, current conditions and reasonable and supportable forecasts. The process is being continually enhanced and refined based on periodic reviews. Material changes to these and other relevant factors may result in greater volatility to the reserve for credit losses, and therefore, greater volatility to our reported earnings. For example, the effects of the COVID-19 pandemic and related hybrid or fully remote working environment has negatively impacted the performance outlook in the central business district office CRE segment of our loan portfolio, which informed our CECL economic forecast and continued to adversely impact our loss reserve as of March 31, 2024. Refer to the "Provision for Credit Losses" and "Allowance for Credit Losses" of Management's Discussion and Analysis of Financial Condition and Results of Operations for more information on the provision for credit losses and ACL for the loan portfolio.

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Goodwill is subject to impairment testing, which must be conducted at least annually or upon the occurrence of a triggering event. Various factors, such as the Company’s results of operations, the trading price of the Company’s common stock relative to the book value per share, macroeconomic conditions and conditions in the banking sector, inform whether a triggering event for an interim goodwill impairment test has occurred. Goodwill is recorded and evaluated for impairment at its reporting unit, the Company. The Company's policy is to test goodwill for impairment annually as of December 31, or on an interim basis if an event triggering an impairment assessment is determined to have occurred.

Testing of goodwill impairment comprises a two-step process. First, the Company performs a qualitative assessment to evaluate relevant events or circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it is more likely than not that an impairment has occurred, it proceeds to the quantitative impairment test, whereby it calculates the fair value of the reporting unit and compares it with its carrying amount, including goodwill. In its performance of impairment testing, the Company has the unconditional option to proceed directly to the quantitative impairment test, bypassing the qualitative assessment. If the carrying amount of the reporting unit exceeds the fair value, the amount by which the carrying amount exceeds fair value, up to the carrying value of goodwill, is recorded through earnings as an impairment charge. If the results of the qualitative assessment indicate that it is not more likely than not that an impairment has occurred, or if the quantitative impairment test results in a fair value of the reporting unit that is greater than the carrying amount, then no impairment charge is recorded.

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As part of its annual testing for goodwill impairment, the Company concluded that no impairment existed at December 31, 2023. Management has evaluated and will continue to evaluate economic conditions in interim periods for triggering events. As of the time of this report's filing, the Company did not identify any triggering events for interim testing. However, future events, including the continuation of the Company's recent common stock trading below the book value per share, could cause the Company to conclude that goodwill or other intangibles have become impaired, which would result in recording an impairment loss. Any resulting impairment loss could have a material adverse impact on the Company’s financial condition and results of operations, however, it would not impact our regulatory capital ratios, tangible common equity ratio, nor its liquidity position.

RESULTS OF OPERATIONS

Earnings Summary

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

Net loss for the three months ended March 31, 2024 was $338 thousand, as compared to net income of $24.2 million for the same period in 2023, a decrease of $24.6 million, or 101.4%.

The decrease of $24.6 million to net loss for the three months ended March 31, 2024 from net income for the same period in 2023 was due primarily to an increase in provision for credit losses of $29.0 million, partially offset by a reduction of income tax expenses of $3.9 million. For more information on the drivers and the components of these changes, see the "Provision for Credit Losses" and "Income Tax Expenses" sections below.

When the impact of the provision is excluded, pre-provision net revenue ("PPNR"), a non-GAAP measure, was $38.3 million for the three months ended March 31, 2024, as compared to $38.1 million for the same period in 2023. Refer to the "Use of Non-GAAP Financial Measures" section for additional detail and a reconciliation of GAAP to non-GAAP financial measures.

Total revenue (i.e. net interest income plus noninterest income) was $78.3 million for the three months ended March 31, 2024, as compared to $78.7 million for the same period in 2023.

The net interest margin, which measures the difference between interest income and interest expense (i.e. net interest income) as a percentage of earning assets, was 2.43% for the three months ended March 31, 2024 and 2.77% for the same period in 2023. The drivers of the change are detailed in the "Net Interest Income and Net Interest Margin" section below.

Noninterest income was $3.6 million for the three months ended March 31, 2024, as compared to $3.7 million for the same period in 2023. Noninterest expense was $40.0 million for the three months ended March 31, 2024, as compared to $40.6 million for the same period in 2023. The drivers of the change are detailed in the "Noninterest Income" and "Noninterest Expense" sections below.

The efficiency ratio remained steady at 51.09% for the three months ended March 31, 2024 as compared to 51.55% for the same period in 2023. Refer to the "Use of Non-GAAP Financial Measures" section for additional detail and a reconciliation of GAAP to non-GAAP financial measures.

For the three months ended March 31, 2024 and 2023, the Company had average assets of $12.8 billion and $11.4 billion, respectively, the increase of which was primarily attributable to an increase in average interest-bearing deposits with other banks and other short-term investments over the comparative period. For the three months ended March 31, 2024 and 2023, the Company had average common equity of $1.3 billion and $1.2 billion, respectively. For the three months ended March 31, 2024 and 2023, the Company had average tangible common equity, a non-GAAP measure, of $1.2 billion and $1.1 billion, respectively. Refer to the "Use of Non-GAAP Financial Measures" section for additional detail and a reconciliation of GAAP to non-GAAP financial measures.

For the three months ended March 31, 2024, the Company reported an annualized return on average assets ("ROAA") of (0.01)%, as compared to 0.86% for the same period in 2023. The annualized return on average common equity ("ROACE") for the three months ended March 31, 2024 was (0.11)% as compared to 7.92% for the same period in 2023. The annualized return on average tangible common equity ("ROATCE"), a non-GAAP measure, for the three months ended March 31, 2024 was (0.11)% as compared to 8.65% for the same period in 2023. The decline in returns was primarily attributable to a reduction in net income to a net loss. Refer to the "Use of Non-GAAP Financial Measures" section for additional detail and a reconciliation of GAAP to non-GAAP financial measures.

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Net Interest Income and Net Interest Margin

Net interest income is the difference between interest income on earning assets and the cost of funds supporting those assets. Earning assets are composed primarily of loans, investment securities, and interest bearing deposits with other banks and other short-term investments. The cost of funds includes interest expense on deposits, customer repurchase agreements and other borrowings, which consist primarily of federal funds purchased, advances from secured financing arrangements, including the Federal Home Loan Bank of Atlanta ("FHLB") and the Federal Reserve's Bank Term Funding Program ("BTFP") and Discount Window, and subordinated notes. Noninterest bearing deposits and capital are other components representing funding sources. Changes in the volume and mix of assets and funding sources, along with the changes in yields earned and rates paid, determine changes in net interest income.

Net interest income was $74.7 million for the three months ended March 31, 2024, as compared to $75.0 million for the same period in 2023. The decrease was primarily due to the $35.7 million increase in interest expense outpacing the $35.4 million increase in interest income. The increase in interest expense was primarily attributable to increased volume of time deposits, other borrowings, and interest bearing transactions, and to a lesser extent was attributable to increases in average deposits and rates (4.29% for the three months ended March 31, 2024, compared to 3.63% for the same period in 2023). The increase in interest income was primarily attributable to increased volume and rates on loans (6.95% for the three months ended March 31, 2024, compared to 6.35% for the same period in 2023) and interest bearing bank deposits and other short-term investments (5.43% for the three months ended March 31, 2024, compared to 4.45% for the same period in 2023)

The net interest margin decreased by 34 basis points from the three months ended March 31, 2023 as compared to the three months ended March 31, 2024 (from 2.77% to 2.43%). The yield on earning assets increased by 54 basis points (from 5.17% to 5.71%) while cost of funds increased 96 basis points (from 2.62% to 3.58%).

Average loans (excluding loans held for sale) increased to $8.0 billion for the three months ended March 31, 2024 compared to $7.7 billion for the same period in 2023. Average interest bearing deposits increased to $7.4 billion for the three months ended March 31, 2024 from $5.5 billion for the three months ended March 31, 2023, while average noninterest bearing demand deposits decreased to $2.1 billion for the three months ended March 31, 2024 from $3.3 billion for the three months ended March 31, 2023. Additionally, average borrowings increased from $1.3 billion in the three months ended March 31, 2023 to $1.8 billion in the three months ended March 31, 2024.

Overall yields and rates increased during the three months ended March 31, 2024 as compared to the same period in 2023 as variable rate loans adjusted upwards and an increased number of loans moved off their rate floors.

The table below presents the average balances and rates of the major categories of the Company's assets and liabilities for the three months ended March 31, 2024 and 2023. Included in the tables are measurements of interest rate spread and margin. Interest rate spread is the difference (expressed as a percentage) between the interest rate earned on earning assets less the interest rate paid on interest bearing liabilities. While the interest rate spread provides a quick comparison of earnings rates versus cost of funds, management believes that margin, together with net interest income, provides a better measurement of performance. The net interest margin (as compared to net interest spread) includes the effect of noninterest bearing sources in its calculation. Net interest margin is net interest income expressed as a percentage of average earning assets.

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Eagle Bancorp, Inc.

Consolidated Average Balances, Interest Yields And Rates (Unaudited)

(dollars in thousands)

	Three Months Ended March 31,
	2024						2023
	Average Balance		Interest		Average Yield/Rate		Average Balance		Interest		Average Yield/Rate
ASSETS
Interest earning assets:
Interest bearing deposits with other banks and other short-term investments	$	1,841,771	$	24,862	5.43	%	$	526,506	$	5,774	4.45	%
Loans held for sale (1)	—		—		—	%	4,093		60		5.95	%
Loans (1) (2)	7,988,941		137,994		6.95	%	7,712,023		120,790		6.35	%
Investment securities available for sale (2)	1,516,503		7,247		1.92	%	1,660,258		7,811		1.91	%
Investment securities held-to-maturity (2)	1,011,231		5,433		2.16	%	1,087,047		5,734		2.14	%
Federal funds sold	7,051		66		3.76	%	14,890		78		2.12	%
Total interest earning assets	12,365,497		175,602		5.71	%	11,004,817		140,247		5.17	%
Total noninterest earning assets	508,987						495,889
Less: allowance for credit losses	(90,014)						(74,650)
Total noninterest earning assets	418,973						421,239
TOTAL ASSETS	$	12,784,470					$	11,426,056
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest bearing liabilities:
Interest bearing transaction	$	1,833,493	$	16,830	3.69	%	$	1,065,421	$	6,107	2.32	%
Savings and money market	3,423,388		35,930		4.22	%	3,326,807		33,274		4.06	%
Time deposits	2,187,320		26,623		4.90	%	1,078,227		9,573		3.60	%
Total interest bearing deposits	7,444,201		79,383		4.29	%	5,470,455		48,954		3.63	%
Customer repurchase agreements	36,084		315		3.51	%	38,257		302		3.20	%
Borrowings	1,796,863		21,206		4.75	%	1,321,206		15,967		4.90	%
Total interest bearing liabilities	9,277,148		100,904		4.37	%	6,829,918		65,223		3.87	%
Noninterest bearing liabilities:
Noninterest bearing demand	2,057,460						3,263,670
Other liabilities	160,206						91,490
Total noninterest bearing liabilities	2,217,666						3,355,160
Shareholders’ Equity	1,289,656						1,240,978
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	12,784,470					$	11,426,056
Net interest income			$	74,698					$	75,024
Net interest spread					1.34	%					1.30	%
Net interest margin					2.43	%					2.77	%
Cost of funds (3)					3.58	%					2.62	%

(1)Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $5.1 million and $3.7 million for the three months ended March 31, 2024 and 2023, respectively.

(2)Interest and fees on loans and investments exclude tax equivalent adjustments.

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(3)Beginning in the second quarter of 2023, the Company revised its cost of funds methodology to use a daily average calculation where interest expense on interest bearing liabilities is divided by average interest bearing liabilities and average noninterest bearing deposits. Previously, the Company calculated the cost of funds as the difference between yield on earning assets and net interest margin. The cost of funds for the three months ended March 31, 2023 has been recalculated using the current methodology.

Rate/Volume Analysis of Net Interest Income

The rate/volume table below presents the composition of the change in net interest income for the period indicated, as allocated between the change in net interest income due to changes in the volume of average earning assets and interest bearing liabilities, and the changes in net interest income due to changes in interest rates.

	Three Months Ended March 31, 2024 Compared With The Three Months Ended March 31, 2023
(dollars in thousands)	Change Due to Volume		Change Due to Rate		Total Increase (Decrease)
Interest earned on
Loans	$	4,337	$	12,867	$	17,204
Loans held for sale	(60)		—		(60)
Investment securities available-for-sale	(676)		112		(564)
Investment securities held-to-maturity	(400)		99		(301)
Interest bearing bank deposits	14,424		4,664		19,088
Federal funds sold	(41)		29		(12)
Total interest income	17,584		17,771		35,355
Interest paid on
Interest bearing transaction	4,403		6,320		10,723
Savings and money market	966		1,690		2,656
Time deposits	9,847		7,203		17,050
Customer repurchase agreements	(17)		30		13
Other borrowings	5,675		(436)		5,239
Total interest expense	20,874		14,807		35,681
Net interest income	$	(3,290)	$	2,964	$	(326)

Provision for Credit Losses

The provision for credit losses represents the amount of expense charged to current earnings to record the ACL on loans and the ACL on available-for-sale and held-to-maturity investment securities. The amount of the ACL on loans is based on management's assessment of CECL in the portfolio. Those factors include historical losses based on internal and peer data, economic conditions and trends, the value and adequacy of collateral, volume and mix of the portfolio, performance of the portfolio, and internal loan processes of the Company.

The provision for credit losses for unfunded commitments is presented separately on the Consolidated Statements of Operations. This provision considers the probability that unfunded commitments will fund among other factors.

Refer to the discussion under "Critical Accounting Policies and Estimates" in Management's Discussion and Analysis of Financial Condition and Results of Operations above and in Note 1 to the Consolidated Financial Statements in "Item 1 - Financial Information" for an overview of the methodology management employs on a quarterly basis to assess the adequacy of the ACL and the provisions charged to expense. Also, refer to the table in the "Allowance for Credit Losses" section in Management's Discussion and Analysis of Financial Condition and Results of Operations, which reflects activity in the ACL.

During the three months ended March 31, 2024, the Company recorded a provision for credit losses of $35.2 million on its loan portfolio. The provision for credit losses was primarily attributable to an updated valuation for a CRE office property collateralizing a lending relationship with two loans outstanding, the total of which was partially charged off in the first quarter 2024. Additionally, the provision was attributable to an increase in the ACL factor associated with CRE office loans.

40

The provision for credit losses on loans for the three months ended March 31, 2023 was $4.9 million. The provision was primarily driven by adjustments to the qualitative components of the CECL model owing to the high inflationary environment and uncertainty in the macroeconomic outlook and the related changes in economic growth and the broader economy, changes in the qualitative and economic component of the model associated with CRE office properties, as well as the increases in total loans.

During the three months ended March 31, 2024 and 2023, the provision for credit losses for the held-to-maturity securities portfolio was $1 thousand and $1.2 million, respectively, which, in 2023, were recorded primarily on several corporate bonds. During the three months ended March 31, 2023, the provision for credit losses for the available-for-sale securities portfolio was $14 thousand. There was no provision for credit losses on the available-for-sale securities portfolio for the three months ended March 31, 2024.

The provision for unfunded commitments is presented separately on the Consolidated Statements of Operations. This provision considers the probability that unfunded commitments will fund. During the three months ended March 31, 2024 and 2023, provisions of $456 thousand and $848 thousand, respectively, were incurred for unfunded commitments.

Noninterest Income

Noninterest income includes service charges on deposits, gain on sale of loans, gains and losses on sale of investment securities, income from bank owned life insurance ("BOLI") and other income. The following table summarizes the comparative noninterest income for the three months ended March 31, 2024 and 2023:

	Three Months Ended March 31,
(dollars in thousands)	2024		2023		Dollar Change		Percent Change
Service charges on deposits	$	1,699	$	1,510	$	189	13	%
Gain on sale of loans	—		305		(305)		(100)	%
Net gain (loss) on sale of investment securities	4		(21)		25		(119)	%
Increase in the cash surrender value of bank-owned life insurance	703		655		48		7	%
Other income	1,183		1,251		(68)		(5)	%
Total	$	3,589	$	3,700	$	(111)	(3)	%

Total noninterest income for the three months ended March 31, 2024 decreased to $3.6 million from $3.7 million for the three months ended March 31, 2023, a 3% decrease. The decrease was primarily attributable to a decrease in gains on sale of residential mortgage loans, partially offset by an increase in service charges on deposits. The Company ceased originations of first lien residential mortgages for secondary sale in the first quarter of 2023, and completed residual origination and sales activities in the second quarter of 2023.

Noninterest Expense

Total noninterest expense includes salaries and employee benefits, premises and equipment expenses, marketing and advertising, data processing, legal, accounting and professional, Federal Deposit Insurance Corporation ("FDIC") insurance assessments, and other expenses. The following table summarizes the comparative noninterest expense for the three months ended March 31, 2024 and 2023:

	Three Months Ended March 31,
(dollars in thousands)	2024		2023		Dollar Change		Percent Change
Salaries and employee benefits	$	21,726	$	24,174	$	(2,448)	(10)	%
Premises and equipment expenses	3,059		3,317		(258)		(8)	%
Marketing and advertising	859		636		223		35	%
Data processing	3,293		3,099		194		6	%
Legal, accounting and professional fees	2,507		3,254		(747)		(23)	%
FDIC insurance	6,412		1,486		4,926		331	%
Other expenses	2,141		4,618		(2,477)		(54)	%
Total	$	39,997	$	40,584	$	(587)	(1)	%

41

Total noninterest expense totaled $40.0 million for the three months ended March 31, 2024, as compared to $40.6 million for the three months ended March 31, 2023, a 1% decrease. The decrease was primarily attributable to a $2.5 million reduction in other expenses, a $2.4 million reduction in salaries and employee benefits, and a $747 thousand reduction in legal, accounting and professional fees. This total of these reductions to expense was partially offset by a $4.9 million increase in FDIC insurance.

The decrease in salaries and employee benefits over the comparative three months ended March 31, 2024 and 2023 was primarily due to a reduction in payroll taxes and employee benefits. At March 31, 2024, the Company's full time equivalent staff numbered 451, as compared to 486 at March 31, 2023.

The decrease in legal, accounting and professional fees over the comparative three months ended March 31, 2024 and 2023 was primarily due to a $959 thousand reversal of legal fees receivable in the first quarter of 2023 relating to the previously disclosed settled litigations and investigations as Directors & Officers insurance for the 2016-2017 years was fully depleted.

The major components of other expenses include franchise taxes, director compensation and insurance expense. The decrease in other expenses over the comparative three months ended March 31, 2024 and 2023 was primarily due to a reduction in director fees of $1.3 million and a $857 thousand recovery of real estate taxes.

The efficiency ratio, which measures the ratio of noninterest expense to total revenue, was 51.09% for the three months ended March 31, 2024, as compared to 51.55% for the same period in 2023. Refer to the "Use of Non-GAAP Financial Measures" section for additional detail and a reconciliation of GAAP to non-GAAP financial measures. The improvement in the efficiency ratio for the three months ended March 31, 2024 as compared to the same three month period in 2023 was primarily driven by the decrease in noninterest expenses outpacing the decreases in net interest income and noninterest income.

As a percentage of average assets, total noninterest expense (annualized) was 1.26% for the three months ended March 31, 2024, as compared to 1.44% for the same period in 2023. The decrease for the three month period ended March 31, 2024 was primarily due to an increase in average interest earning assets.

Income Tax Expense

The Company's tax provision for the three months ended March 31, 2024 was $3.0 million, compared to $6.9 million for the three months ended March 31, 2023. The decrease in the tax provision over the comparative three months ended March 31, 2024 and 2023 was primarily due to decreases in pre-tax income period over period.

The Inflation Reduction Act of 2022 was signed into law by President Biden on August 16, 2022 and made significant changes to the U.S. tax law, including the introduction of a corporate alternative minimum tax of 15% of the “adjusted financial statement income” of certain domestic corporations as well as a 1% excise tax on the fair market value of stock repurchases by certain domestic corporations, effective for tax years beginning in 2023. Effective January 1, 2023, the Company became subject to the tax laws under the Inflation Reduction Act. The Company has not experienced and currently does not expect the tax-related provisions of the Inflation Reduction Act to have a material impact on our financial results.

FINANCIAL CONDITION

Summary

Total assets were $11.6 billion and $11.7 billion at March 31, 2024 and December 31, 2023, respectively. Assets remained at similar levels from December 31, 2023 to March 31, 2024 with minor changes in the asset mix. The decrease in total assets of $51.9 million (or 0.4%) from December 31, 2023 to March 31, 2024 was primarily due to decreases in investment securities and interest-bearing deposits with other banks and other short-term investments, the total of which was partially offset by an increase in loans.

The largest component of assets, total loans, had an amortized cost basis of $8.0 billion at March 31, 2024, a 0.2% increase from the balance at December 31, 2023. The increase in loans over the three months ended March 31, 2024, was driven primarily by increased fundings of ongoing construction projects for commercial and residential properties, partially offset by decreases in income producing - CRE, owner occupied - CRE and commercial loans.

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Investment securities, at amortized cost net of the ACL, totaled $2.6 billion at March 31, 2024 as compared to $2.7 billion at December 31, 2023, a decrease of $69.7 million, or 2.6%, that was primarily driven by the pay down of principal on mortgage-backed securities ("MBS") and calls of securities. At March 31, 2024 and December 31, 2023, investment securities available-for-sale had an amortized cost of $1.6 billion and $1.7 billion, respectively, and a fair value of $1.4 billion and $1.5 billion, respectively. Additionally, March 31, 2024 and December 31, 2023, investment securities held-to-maturity had an amortized cost, less an ACL of $2.0 million, of $1.0 billion and an estimated fair value of $878.2 million and $901.6 million, respectively.

In terms of funding, total deposits at March 31, 2024 were $8.5 billion, down from $8.8 billion at December 31, 2023, a decline of 3.5%. Total borrowings (excluding customer repurchase agreements) were $1.7 billion and $1.4 billion at March 31, 2024 and December 31, 2023, respectively. The decrease in deposits was primarily attributable to first quarter seasonality, while the increase in borrowings, attributable to net fundings on the Company's secured borrowings, was primarily to meet funding needs, including to fund loan growth, given the decrease in deposits.

Total shareholders' equity remained consistent at $1.3 billion as of March 31, 2024, and December 31, 2023. During the three months ended March 31, 2024, there was a slight decrease of 1.2%, which was primarily the result of cash dividends and the decrease in earnings.

The Company's capital ratios remain substantially in excess of regulatory minimum and buffer requirements. Regulatory ratios based on risk-weighted assets experienced minor fluctuations of less than 1% from December 31, 2023 to March 31, 2024. The total risk based capital ratio was 14.87% at March 31, 2024, as compared to 14.79% at December 31, 2023. The common equity tier 1 capital ("CET1") risk based capital ratio was 13.80% at March 31, 2024, as compared to 13.90% at December 31, 2023. The tier 1 risk based capital ratio was 13.80% at March 31, 2024, as compared to 13.90% at December 31, 2023. The tier 1 leverage ratio was 10.26% at March 31, 2024, as compared to 10.73% at December 31, 2023.

The ratio of common equity to total assets was 10.85% at March 31, 2024, as compared to 10.92% at December 31, 2023 as common equity levels remained consistent over the three months ended March 31, 2024. Book value per share was $41.72 at March 31, 2024, a 2.0% decrease over $42.58 at December 31, 2023.

In addition, the tangible common equity ratio was 10.03% at March 31, 2024, as compared to 10.12% at December 31, 2023. Tangible book value per share was $38.26 at March 31, 2024, a 2.1% decrease from $39.08 at December 31, 2023. Refer to the "Use of Non-GAAP Financial Measures" section for additional detail and a reconciliation of GAAP to non-GAAP financial measures.

In order to be considered well-capitalized, the Bank must have a CET1 risk based capital ratio of 6.5%, a Tier 1 risk-based ratio of 8.0%, a total risk-based capital ratio of 10.0% and a leverage ratio of 5.0%. The Company and the Bank exceed all these requirements and satisfy the capital conservation buffer of 2.5% of CET1 capital. Failure to maintain the required capital conservation buffer would limit the ability of the Company and the Bank to pay dividends, repurchase shares or pay discretionary bonuses.

Loan Portfolio

In its lending activities, the Company seeks to develop and expand relationships with clients whose businesses and individual banking needs will grow with the Bank. Superior customer service, local decision making, and accelerated turnaround time from application to closing have been significant factors in growing the loan portfolio and meeting the lending needs in the markets served, while maintaining sound asset quality.

Loans outstanding were $8.0 billion at March 31, 2024, an increase of $14.0 million, or 0.2%, from the balance at December 31, 2023. The loan portfolio has continued to grow in the three months ended March 31, 2024, driven by increased fundings of ongoing construction projects for commercial and residential properties, partially offset by a reduction in CRE loans. Market rates in 2024 for our new loan originations remained consistent with the market rates at the end of 2023, reflecting that the Federal Reserve has not raised short-term interest rates in 2024. We continue to see opportunities for growth in the commercial real estate market in our focused sectors; our processes for evaluating these opportunities are designed to ensure they are subject to reasonable underwriting standards, including appropriate collateral and cash flow necessary to support debt service. Following origination, we continue to monitor our borrowers' business plans and identify primary and alternative sources for loan repayment and, if necessary, obtain collateral to mitigate credit loss in the event of default.

43

Loans, net of amortized deferred fees and costs, at March 31, 2024 and December 31, 2023 by major category are summarized below.

	March 31, 2024				December 31, 2023
(dollars in thousands, except amounts in the footnote)	Amount		%		Amount		%
Commercial	$	1,408,767	18	%	$	1,473,766	18	%
PPP loans	467		—	%	528		—	%
Income producing - commercial real estate	4,040,655		50	%	4,094,614		51	%
Owner occupied - commercial real estate	1,185,582		15	%	1,172,239		15	%
Real estate mortgage - residential	72,087		1	%	73,396		1	%
Construction - commercial and residential	1,082,556		13	%	969,766		12	%
Construction - C&I (owner occupied)	138,379		2	%	132,021		2	%
Home equity	53,251		1	%	51,964		1	%
Other consumer	958		—	%	401		—	%
Total loans	7,982,702		100	%	7,968,695		100	%
Less: allowance for credit losses	(99,684)				(85,940)
Loans, net (1)	$	7,883,018			$	7,882,755

(1)Excludes accrued interest receivable of $46.3 million and $45.3 million at March 31, 2024 and December 31, 2023, respectively, which is recorded in other assets.

As noted above, a significant portion of the loan portfolio consists of commercial, construction and commercial real estate loans, primarily made in the Washington, D.C. metropolitan area, and is secured by real estate or other collateral in that market. Although these loans are made to a diversified pool of unrelated borrowers across numerous businesses, adverse developments in the Washington, D.C. metropolitan real estate market could continue to have an adverse impact on this portfolio of loans and the Company’s income and financial position. Management believes that the CRE concentration risk is mitigated by diversification among the types and characteristics of real estate collateral properties, sound underwriting practices and ongoing portfolio monitoring and market analysis. While our basic market area is the Washington, D.C. metropolitan area, the Bank has made loans outside that market area where the applicant is an existing customer and the nature and quality of such loans was consistent with the Bank’s lending policies.

The Company's concentration in the Washington, D.C. metro area includes "Washington's Maryland Suburbs," which comprise Frederick, Prince George's and Montgomery counties and "Northern Virginia," which comprises Alexandria, Arlington, Falls Church, Fairfax, Loudoun and Prince William counties. At March 31, 2024, 31.8%, 26.9%, 24.2%, 5.4% and 11.7% of the loan portfolio, as a percentage of total amortized cost, was concentrated in Washington D.C., Washington's Maryland Suburbs, Northern Virginia, other counties in Maryland and other locations in the United States, respectively. At December 31, 2023, 31.5%, 26.4%, 25.1%, 5.5% and 11.5% of the loan portfolio, as a percentage of total amortized cost, was concentrated in Washington D.C., Washington's Maryland Suburbs, Northern Virginia, other counties in Maryland and other locations in the United States, respectively. While we remain cautious with regard to CRE market conditions, principally office, the strength of the Washington D.C. metro area in certain sectors, particularly multi-family CRE and the housing market, continue to drive premiums for well-located properties.

As part of its lending strategy, the Company maintains a substantial portfolio of CRE loans, with $6.2 billion and $6.1 billion, or 77.1% and 77.0% of total loans, of amortized cost outstanding at March 31, 2024 and December 31, 2023, respectively. Management meets regularly in order to monitor its existing CRE loan portfolio and to evaluate the pipeline for CRE loan investment. The Company has remained focused on monitoring sectors that have had a lasting impact from the ramifications of the COVID-19 pandemic, particularly income producing CRE loans collateralized by office properties, which comprised approximately $898.7 million and $949.0 million, or 11.2% and 11.9% of total loans, at March 31, 2024 and December 31, 2023, respectively. Office loans within Washington D.C., Washington's Maryland Suburbs and Northern Virginia were $829.5 million and $879.0 million, or 10.4% and 11.0% of total loans, at March 31, 2024 and December 31, 2023, respectively. As a percentage of total income producing - CRE office loans, 37.4%, 31.4% and 23.5% were located in Washington's Maryland Suburbs, Northern Virginia, and Washington, D.C. at March 31, 2024.

44

The following table summarizes the Company's income producing - commercial real estate loans, at principal, at March 31, 2024:

				Maryland						Virginia
(dollars in thousands)	Washington D.C.			Washington Suburbs			Other			Northern Virginia			Other			Other			Total			Percent of Total
Collateral Type:
Hotel & motel	$	138,330		$	85,641		$	83,327		$	66,982		$	—		$	22,129		$	396,409		10	%
Industrial	5,854			78,924			40,898			19,713			3,815			—			149,204			4	%
Mixed use	265,432			45,969			372			54,511			25,793			5,380			397,457			10	%
Multifamily	384,408			214,415			320			72,131			84,636			47,877			803,787			20	%
Office	211,181			336,043			4,349			282,297			64,823			47			898,740			22	%
Retail	82,279			97,738			62,018			77,094			99,788			1,938			420,855			10	%
Single / 1-4 Family & Res. Condo	73,737			2,775			2,543			14,496			6,554			4,080			104,185			2	%
Other	155,520			188,186			39,918			459,291			9,355			27,255			879,525			22	%
Total	$	1,316,741		$	1,049,691		$	233,745		$	1,046,515		$	294,764		$	108,706		$	4,050,162		100	%
Percent of total	32		%	26		%	6		%	26		%	7		%	3		%	100		%
Percent of Principal by Loan Size:
Less than $1 million	29		%	23		%	45		%	26		%	30		%	34		%
$1 million to $15 million	16		%	16		%	6		%	10		%	8		%	8		%
$5 million to $10 million	8		%	7		%	—		%	10		%	35		%	49		%
$10 million to $25 million	25		%	37		%	43		%	26		%	24		%	9		%
$25 million to $50 million	18		%	17		%	6		%	14		%	3		%	—		%
Greater than $50 million	4		%	—		%	—		%	14		%	—		%	—		%
Total	100		%	100		%	100		%	100		%	100		%	100		%

At March 31, 2024, $248.9 million of principal of loans collateralized by office properties were criticized or classified.

At March 31, 2024, the Company had no concentrations of loans with any one borrower in any one industry exceeding 10% of its total loan portfolio. An industry for this purpose is defined as a group of businesses that are engaged in similar activities and have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions.

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The following table sets forth the time to the final contractual maturity of the loan portfolio as of March 31, 2024:

	March 31, 2024
(dollars in thousands)	Total		One Year or Less (1)		Over One Year to Five Years		Over Five Years to Fifteen Years		Over Fifteen Years
Commercial	$	1,408,767	$	356,329	$	879,193	$	169,699	$	3,546
PPP loans	467		—		467		—		—
Income producing - commercial real estate (2)	4,040,655		1,499,809		2,218,712		322,134		—
Owner occupied - commercial real estate	1,185,582		211,602		442,072		308,355		223,553
Real estate mortgage - residential	72,087		16,956		43,995		487		10,649
Construction - commercial and residential	1,082,556		289,929		755,137		7,689		29,801
Construction - C&I (owner occupied)	138,379		24,314		18,586		36,681		58,798
Home equity	53,251		2,331		2,192		1,092		47,636
Other consumer	958		771		—		—		187
Total loans	$	7,982,702	$	2,402,041	$	4,360,354	$	846,137	$	374,170
Loans with:
Predetermined fixed interest rate	$	3,132,625	$	963,405	$	1,668,486	$	403,587	$	97,147
Floating or adjustable interest rate	4,850,077		1,438,636		2,691,868		442,550		277,023
Total loans	$	7,982,702	$	2,402,041	$	4,360,354	$	846,137	$	374,170

(1)Demand loans, having no contractual maturity, and overdrafts are reported as due in one year or less.

(2)Income producing CRE office loans, which had total principal of $898.7 million at March 31, 2024 and are included within income producing - commercial real estate, had principal of $323.8 million, $559.8 million, and $15.1 million aggregated with one year or less, over one year to five years, and over five years to fifteen years remaining until contractual maturity, respectively. Approximately $107.8 million and $368.8 million of income producing CRE office loans as of March 31, 2024 were due to mature within three months and 18 months, respectively.

Allowance for Credit Losses

The ACL is an estimate based on many factors which reflect management’s assessment of the risk in the loan portfolio. Those factors include economic conditions and trends, the value and adequacy of collateral, volume and mix of the portfolio, performance of the portfolio and internal loan processes of the Company and Bank. A full discussion of the accounting for ACL is contained in Note 1 to the Consolidated Financial Statements and activity in the ACL is contained in Note 4 to the Consolidated Financial Statements. Also, please refer to the discussion under the caption "Provision for Credit Losses" for a discussion of the Company's calculation of the provision for credit losses during the three months ended March 31, 2024 and 2023.

The ACL for loans at March 31, 2024, or $99.7 million, reflected a $13.7 million increase from December 31, 2023, or $85.9 million, reflecting a provision for credit losses of $35.2 million and $21.4 million in net charge-offs during the three months ended March 31, 2024. Net charge-offs, on an annualized basis, represented 1.07% of average loans for the three months ended March 31, 2024, an increase from net charge-offs of $975 thousand during the three months ended March 31, 2023, which represented 0.05% of average loans, excluding loans held for sale, on an annualized basis. Net charge-offs during the three months ended March 31, 2024 included $20.6 million of charge offs on one CRE office lending relationship. At March 31, 2024, the ACL for loans represented 1.25% of total loans outstanding, as compared to 1.08% at December 31, 2023. The ACL represented 109% of nonperforming loans at March 31, 2024, as compared to 131% at December 31, 2023. Refer to the "Provision for Credit Losses" section of Management's Discussion and Analysis of Financial Condition and Results of Operations for more information on the provision for credit losses.

As part of its comprehensive loan review process, the Bank’s Risk Committee evaluates loans which are past due 30 days or more. The Committee makes an assessment of the conditions and circumstances surrounding delinquent and potential problem loans. The Bank’s loan policy requires that loans be placed on nonaccrual if they are 90 days past due or if their collection is deemed to be doubtful, unless they are well secured and in the process of collection. The Credit Administration department analyzes the status of development and construction projects, including sales activities and utilization of interest reserves in order to assess potential increased levels of risk which may require additional reserves.

46

The Company believes it has taken a prudent posture with respect to risk rating its loan portfolio. As of March 31, 2024 and December 31, 2023, loans rated special mention had an amortized cost of $265.3 million and $207.1 million, respectively, and loans rated substandard had an amortized cost of $361.8 million and $335.8 million, respectively. The increases in special mention loans were primarily attributable to additions in CRE loans, particularly in income producing - commercial real estate and commercial construction loans, and commercial loans. At March 31, 2024, 97.5% and $73.9% of special mention and substandard loans, respectively, were current. Based upon their status as potential problem loans, loans risk rated special mention or substandard receive heightened scrutiny and ongoing intensive risk management. Additionally, the Company's loan loss allowance methodology incorporates increased reserve factors for certain loans considered potential problem loans as compared to the general portfolio.

Management, being aware of the loan growth experienced by the Bank and the risks facing CRE, is intent on maintaining strong portfolio management and a strong risk rating process. The Bank provides analysis of credit requests and the management of problem credits. The Bank has developed and implemented analytical procedures for evaluating credit requests, has refined the Company’s risk rating system and has adopted enhanced monitoring of the loan portfolio and the adequacy of the ACL, in particular on its CRE and construction loans (including those collateralized by office properties). These analyses include stress testing. Additionally, fair value assessments of loans acquired are included in our analytical procedures. The loan portfolio analysis process is ongoing and proactive to support the Company's objective of maintaining a portfolio of quality credits and quickly identifying weaknesses before they become more severe.

At March 31, 2024 and December 31, 2023, the Company's performing office coverage ratio, which calculates the ACL attributable to loans collateralized by performing office properties as a percentage of total loans, was 3.67% and 1.91%, respectively.

The following table sets forth activity in the ACL for the periods indicated.

	Three Months Ended March 31,
(dollars in thousands)	2024			2023
Balance at beginning of period	$	85,940		$	74,444
Charge-offs:
Commercial	(496)			(868)
Income producing - commercial real estate	(20,943)			—
Construction - commercial and residential	(129)			(136)
Other consumer	(1)			(50)
Total charge-offs	(21,569)			(1,054)
Recoveries:
Commercial	115			76
Owner occupied - commercial real estate	24			—
Other consumer	—			3
Total recoveries	139			79
Net charge-offs	(21,430)			(975)
Provision for credit losses - loans	35,174			4,908
Balance at end of period	$	99,684		$	78,377
Annualized ratio of net charge-offs during the period to average loans outstanding during the period	1.07		%	0.05		%

47

The following table reflects the allocation of the ACL at the dates indicated. The allocation of the allowance at March 31, 2024 includes ACL of $387 thousand against individually assessed loans of $92.1 million, as compared to ACL of $641 thousand against individually assessed loans of $66.1 million at December 31, 2023. The allocation of the allowance to each category is not necessarily indicative of future losses or charge-offs and does not restrict the use of the allowance to absorb losses in any category.

	March 31, 2024						December 31, 2023
(dollars in thousands)	Amount		% of Total ACL		% of Total Loans		Amount		% of Total ACL		% of Total Loans
Commercial	$	23,682	24	%	18	%	$	17,824	21	%	18	%
Income producing - commercial real estate	45,937		46	%	50	%	40,050		47	%	51	%
Owner occupied - commercial real estate	13,537		13	%	15	%	14,333		16	%	15	%
Real estate mortgage - residential	893		1	%	1	%	861		1	%	1	%
Construction - commercial and residential	13,058		13	%	13	%	10,198		12	%	12	%
Construction - C&I (owner-occupied)	1,929		2	%	2	%	1,992		2	%	2	%
Home equity	618		1	%	1	%	657		1	%	1	%
Other consumer	30		—	%	—	%	25		—	%	—	%
Total allowance	$	99,684	100	%	100	%	$	85,940	100	%	100	%

Nonperforming Assets

The Company's level of nonperforming assets, which comprise the amortized cost of loans delinquent 90 days or more and nonaccrual loans, which includes the nonperforming portion of loan modifications, and the carrying value of OREO, totaled $92.3 million at March 31, 2024 representing 0.79% of total assets, as compared to $66.6 million of nonperforming assets, or 0.57% of total assets, at December 31, 2023. The increase is primarily due to the increase in nonperforming loans discussed below.

The Company had no accruing loans 90 days or more past due at March 31, 2024 or December 31, 2023. Management prioritizes remaining attentive to early signs of deterioration in borrowers’ financial conditions and to taking action designed to mitigate risk. The Company places loans on nonaccrual status if it deems collection to be doubtful. The Company believes it is diligent in placing loans on nonaccrual status and believes, based on its loan portfolio risk analysis, that its ACL, at 1.25% of total loans at March 31, 2024, is adequate to absorb expected credit losses within the loan portfolio at that date.

Total nonperforming loans had an amortized cost of $91.5 million at March 31, 2024, representing 1.15% of total loans, compared to $65.5 million at December 31, 2023, representing 0.82% of total loans. The increase was primarily from the addition of two income-producing commercial real estate loans to non-accruing status following a partial charge-off on the combined balances.

The CECL standard allows for institutions to evaluate individual loans in the event that the asset does not share similar risk characteristics with its original segmentation. This can occur due to credit deterioration, increased collateral dependency or other factors leading to impairment. In particular, the Company individually evaluates loans on nonaccrual and those identified as loan modifications to borrowers experiencing financial difficulties, though it may individually evaluate other loans or groups of loans as well if it determines they no longer share similar risk with their assigned segment. Reserves on individually assessed loans are determined by one of two methods: the fair value of collateral or the discounted cash flow. Fair value of collateral is used for loans determined to be collateral dependent, and the fair value represents the net realizable value of the collateral, adjusted for sales costs, commissions, senior liens, etc. Discounted cash flow is used on loans that are not collateral dependent where structural concessions have been made and continuing payments are expected. The continuing payments are discounted over the expected life at the loan’s original contract rate and include adjustments for risk of default.

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Nonperforming assets include loans that the Company considers to be individually assessed. Individually assessed loans are defined as those as to which we believe it is probable that we will not collect all amounts due according to the contractual terms of the loan agreement, as well as those loans whose terms have been modified in a loan restructuring to a borrower experiencing financial difficulties that has not shown a period of performance as required under applicable accounting standards. Loans that do not share risk characteristics are evaluated on an individual basis. For collateral dependent financial assets where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the net present value ("NPV") from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the fair value of the underlying collateral less estimated cost to sell. The ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the financial asset. Generally, all appraisals associated with individually assessed loans are updated on a not less than annual basis.

The Company evaluates loan modifications according to the accounting guidance for loan modifications to determine if the modification results in a new loan or a continuation of the existing loan. Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows include situations where there is principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and combinations of the listed modifications. A loan that is considered a restructured loan may be subject to an individually evaluated loan analysis if the commitment is $1.0 million or greater; otherwise, the restructured loan remains in the appropriate segment in the ACL model and associated reserves are adjusted based on changes in the discounted cash flows resulting from the modification of the restructured loan. Management strives to identify borrowers in financial difficulty early and work with them to modify their loan to more affordable terms before their loan reaches nonaccrual status, foreclosure or repossession of the collateral to minimize economic loss to the Company.

Commercial and consumer loans modified are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a loan restructuring subsequently default, the Company evaluates the loan for possible further impairment. The allowance may be increased, adjustments may be made in the allocation of the allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan.

During the three months ended March 31, 2024, the Bank modified 11 loans with a total amortized cost of $85.0 million at March 31, 2024 (1.1% of the loan portfolio). These loans received extended loan terms of between approximately one to 12 months.

Loans modified in the preceding twelve months totaled $237.5 million, of which approximately $8.0 million are loans 30-89 days past due and $85.3 million are on non-accrual status. All other loans are performing under their modified terms.

Alternatively, management, from time-to-time and in the ordinary course of business, implements renewals, modifications, extensions and/or changes in terms of loans to borrowers who have the ability to repay on reasonable market-based terms, as circumstances may warrant, and therefore, such modifications are not considered to be loan restructurings to a borrower experiencing financial difficulty, as the accommodation of a borrower's request does not rise to the level of a concession if the modified transaction is at market rates and terms and/or the borrower is not experiencing financial difficulty. For example: (1) adverse weather conditions may create a short term cash flow issue for an otherwise profitable retail business which suggests a temporary interest only period on an amortizing loan; (2) there may be delays in absorption on a real estate project which reasonably suggests extension of the loan maturity at market terms; or (3) there may be maturing loans to borrowers with demonstrated repayment ability who are not in a position at the time of maturity to obtain alternate long-term financing.

Included in nonperforming assets was OREO of $773 thousand, comprising four foreclosed properties, at March 31, 2024 and $1.1 million, comprising two foreclosed properties, at December 31, 2023. OREO properties are carried at the lower of cost or fair value less estimated costs to sell.

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It is the Company's policy to obtain third party appraisals prior to foreclosure, and to obtain updated third party appraisals on OREO properties generally not less frequently than annually. Generally, the Company would obtain updated appraisals or evaluations on OREO properties where it has reason to believe, based upon market indications (such as: comparable sales, a scenario in which the Company is considering legitimate offers below carrying value, broker indications and similar factors), that the current appraisal does not accurately reflect current value. Two OREO properties were sold during the three months ended March 31, 2024, generating proceeds of $656 thousand. There were no sales of OREO property during the three months ended March 31, 2023.

The following table shows the amounts of nonperforming assets, including loans at amortized cost and OREO at the lower of cost or fair value less estimated costs to sell:

(dollars in thousands)	March 31, 2024			December 31, 2023
Nonaccrual Loans:
Commercial	$	1,920		$	2,049
Income producing - commercial real estate	67,602			40,926
Owner occupied - commercial real estate	19,798			19,836
Real estate mortgage - residential	1,934			1,946
Construction - commercial and residential	—			525
Home equity	237			242
Other consumer	—			—
Total nonperforming loans	91,491			65,524
Other real estate owned	773			1,108
Total nonperforming assets	$	92,264		$	66,632
Coverage ratio, allowance for credit losses to total nonperforming loans	109		%	131		%
Ratio of nonperforming loans to total loans	1.15		%	0.82		%
Ratio of nonperforming assets to total assets	0.79		%	0.57		%

Significant variation in the amount of nonperforming loans may occur from period to period because the amount of nonperforming loans depends largely on the condition of a relatively small number of individual credits and borrowers relative to the total loan portfolio.

At March 31, 2024, there were $361.8 million of Substandard loans. Substandard loans are considered potential or actual problem loans due to known information about possible or actual credit problems which causes management to be uncertain as to the ability of the borrowers to comply with the present loan repayment terms, which may in the future result in the reclassification to the past due, nonaccrual or restructured loan categories, as appropriate. Based upon their status as potential or actual problem loans, these loans receive heightened scrutiny and ongoing intensive risk management.

Deposits and Other Borrowings

The principal sources of funds for the Bank are core deposits, consisting of demand deposits, money market accounts, Negotiable Order of Withdrawal ("NOW") accounts, savings accounts, and certificates of deposits. The deposit base includes transaction accounts, time and savings accounts, and accounts that customers use for cash management and which provide the Bank with a source of fee income and cross-marketing opportunities, as well as an attractive source of lower cost funds. To meet funding needs during periods of high loan demand and seasonal variations in core deposits, the Bank regularly utilizes alternative funding sources such as secured borrowings from the FHLB, federal funds purchased lines of credit from correspondent banks and brokered deposits from regional and national brokerage firms. Additionally, the Bank has participated in the BTFP established by the Federal Reserve in March 2023. The Federal Reserve announced in January 2024 that the BTFP would stop originating new loans on March 11, 2024, as scheduled. The Federal Reserve also modified the terms of the program so that the interest rate for new loans would be no lower than the interest rate on reserve balances in effect on the day the loan is made. In January 2024, prior to these announcements by the Federal Reserve, the Company borrowed an additional $500.0 million through the BTFP and refinanced $500.0 million under the program, each at an interest rate of 4.76% and a maturity date in January 2025.

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The following table summarizes the Company's deposits at March 31, 2024 and December 31, 2023:

	March 31, 2024				December 31, 2023
	Balance		Percentage		Balance		Percentage
Noninterest-bearing demand	$	1,835,524	22	%	$	2,279,081	26	%
Interest-bearing transaction	1,207,566		14	%	997,448		11	%
Savings and money market	3,235,391		38	%	3,314,043		38	%
Time deposits	2,222,958		26	%	2,217,467		25	%
Total	$	8,501,439	100	%	$	8,808,039	100	%

For the three months ended March 31, 2024, total deposits decreased by $306.6 million as compared to December 31, 2023. The decrease was primarily attributable to a $443.6 million decrease in noninterest bearing demand deposits and a reduction in savings and money market accounts of $78.7 million, which was partially offset by a $210.1 million increase in interest bearing transaction deposits.

No single depositor represented more than 10% of total deposits as of March 31, 2024. The ten largest depositors not associated with brokered pass-through relationships represented approximately 19% of total deposits in the aggregate as of March 31, 2024. The Company maintains a significant deposit relationship with a third-party payments processor, whose business results in deposit inflows and outflows on an ongoing basis, which contributes to variations in period end compared to average deposit balances.

From time to time, when appropriate in order to fund strong loan demand or account for increased deposit outflow, the Bank accepts brokered time deposits, generally in denominations of less than $250 thousand, from a regional brokerage firm and other national brokerage networks, including IntraFi Network, LLC ("IntraFi"). Additionally, the Bank participates in the Certificates of Deposit Account Registry Service ("CDARS") and the Insured Cash Sweep product ("ICS"), which provide for reciprocal ("two-way") transactions among banks facilitated by IntraFi for the purpose of maximizing FDIC insurance. The total of reciprocal deposits at March 31, 2024 was $1.7 billion (19.9% of total deposits) as compared to $1.6 billion (17.7% of total deposits) at December 31, 2023. These sources are believed by the Company to represent a reliable and cost efficient alternative funding source for the Bank, but there can be no assurance that they will continue to be adequate or appropriate to meet our liquidity needs. The Bank also is able to obtain one-way CDARS deposits and participates in IntraFi's Insured Network Deposit Program ("IND"). The Bank had $823.6 million and $786.5 million of IND brokered deposits as of March 31, 2024 and December 31, 2023, respectively. However, to the extent that the condition or reputation of the Company or Bank deteriorates, to the extent that there are significant changes in market interest rates which the Company and Bank do not elect to match, or if aggregate funding available to banks changes due to changes in the marketplace, we may experience an outflow of brokered deposits or difficulty in obtaining them in the future. In that event, we would be required to obtain alternate sources for funding, which may increase our cost of funds and negatively impact our net interest margin.

We have used brokered deposits and intend to continue to use brokered deposits as one of our funding sources to support future growth. At March 31, 2024, total brokered deposits were $4.2 billion, or 49.1% of total deposits, of which $1.7 billion were attributable to the CDARS and ICS two-way accounts. Total brokered deposits comprised $1.7 billion, $1.6 billion, and $853.0 million of time deposits, savings and money market accounts and interest-bearing transaction accounts, respectively, at March 31, 2024. At December 31, 2023, total brokered deposits (excluding the CDARS and ICS two-way) were $2.5 billion, or 28.8% of total deposits, and comprised $1.5 billion, $961.5 million, and $108.2 million of time deposits, savings and money market accounts, and interest-bearing transaction accounts, respectively.

At March 31, 2024 and December 31, 2023, total deposits included estimated totals of $2.3 billion and $2.8 billion of uninsured deposits, which represented 27.6% and 31.4% of total deposits, respectively. The decrease in the percentage of the Bank's deposits that are uninsured was in part due to customers' increased use of the products facilitated by IntraFi that enable customers to maximize FDIC deposit insurance coverage for their deposits.

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As an enhancement to the basic noninterest bearing demand deposit account, the Company offers a sweep account, or "customer repurchase agreement," allowing qualifying businesses to earn interest on short-term excess funds, which are not suited for either a certificate of deposit or a money market account. The balances in these accounts were $37.1 million at March 31, 2024 compared to $30.6 million at December 31, 2023. Customer repurchase agreements are not deposits and are not insured by the FDIC, but are collateralized by U.S. agency securities and/or U.S. agency backed MBS. These accounts are particularly suitable to businesses with significant fluctuation in the levels of cash flows. Attorney and title company escrow accounts are examples of accounts which can benefit from this product, as are customers who may require collateral for deposits in excess of FDIC insurance limits but do not qualify for other pledging arrangements. This program requires the Company to maintain a sufficient investment securities level to accommodate the fluctuations in balances which may occur in these accounts.

The Company had no outstanding balances under its federal funds lines of credit provided by correspondent banks (which are unsecured) at March 31, 2024 and December 31, 2023.

At March 31, 2024, the Company had $600.0 million in FHLB secured borrowings outstanding compared to none at December 31, 2023. Outstanding FHLB advances are secured by collateral consisting of specifically pledged marketable investment securities and a blanket lien on qualifying loans in the Bank's commercial mortgage, residential mortgage and home equity loan portfolios. Additionally, at March 31, 2024 and December 31, 2023, the Company had $1.0 billion and $1.3 billion of outstanding borrowings under the BTFP. Outstanding BTFP advances are secured by collateral consisting of specifically pledged qualifying investment securities. Outstanding short-term advances and borrowings are part of the overall asset liability strategy to support loan growth.

The subordinated notes outstanding at March 31, 2024 and December 31, 2023 comprised the Company's August 5, 2014 issuance of $70.0 million of subordinated notes, due September 1, 2024. The Company is considering various options to finance the upcoming maturity of the subordinated debt, and the Company may seek to issue new subordinated notes or other debt securities to replace those that are maturing, or fund the maturity through other means. Given prevailing interest rates, any new debt securities to refinance the subordinated notes are expected to have a higher interest rate than the subordinated notes.

Commitments and Contractual Obligations

Loan commitments outstanding and lines and letters of credit were as follows:

(dollars in thousands)	March 31, 2024		December 31, 2023
Unfunded loan commitments	$	1,850,316	$	1,981,334
Unfunded lines of credit	99,930		98,614
Letters of credit	85,719		87,146
Total	$	2,035,965	$	2,167,094

Various commitments to extend credit are made in the normal course of banking business. Letters of credit are also issued for the benefit of customers. These commitments are subject to loan underwriting standards and geographic boundaries consistent with the Company’s loans outstanding.

Unfunded loan commitments are agreements whereby the Bank has made a commitment to lend to a customer as long as there is satisfaction of the terms or conditions established in the contract and the borrower has accepted the commitment in writing. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee before the commitment period is extended. In many instances, borrowers are required to meet performance milestones in order to draw on a commitment as is the case in construction loans, or to have a required level of collateral in order to draw on a commitment as is the case in asset based lending credit facilities. Collateral obtained varies and may include certificates of deposit, accounts receivable, inventory, property and equipment, residential and CRE. Since commitments may expire without being drawn, the total commitment amount does not necessarily represent future cash requirements.

Unfunded lines of credit are agreements to lend to a customer as long as there is no violation of the terms or conditions established in the contract. Lines of credit generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since lines of credit may expire without being drawn, the total unfunded line of credit amount does not necessarily represent future cash requirements.

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Letters of credit include standby and commercial letters of credit. Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance by the Bank's customer to a third party. Standby letters of credit generally become payable upon the failure of the customer to perform according to the terms of the underlying contract with the third party. Standby letters of credit are generally not drawn. Commercial letters of credit are issued specifically to facilitate commerce and typically result in the commitment being drawn when the underlying transaction is consummated between the customer and a third party. The contractual amount of these letters of credit represents the maximum potential future payments guaranteed by the Bank. The Bank has recourse against the customer for any amount it is required to pay to a third party under a letter of credit, and holds cash and or other collateral on those standby letters of credit for which collateral is deemed necessary.

Liquidity Management

Liquidity is a measure of the Company's and Bank's ability to meet loan demand and to satisfy depositor withdrawal requirements in an orderly manner. The Bank's primary sources of liquidity consist of cash and cash balances due from correspondent banks, excess reserves at the Federal Reserve, loan repayments, federal funds sold and other short-term investments, maturities and sales of investment securities, income from operations and new core deposits into the Bank. Approximately 59% of the Company's investment portfolio of debt securities is held in an available-for-sale status which allows for flexibility, subject to holdings held as collateral for customer repurchase agreements and public funds, to generate cash from sales as needed to meet ongoing loan demand. As of March 31, 2024, the unrealized losses recorded on the available-for-sale securities were acting as a deterrent to any sale of those securities to raise liquidity. However, these securities are utilized as pledged assets that provide secondary liquidity through the form of additional available borrowings. Investment securities that are classified as held-to-maturity can also be used as collateral to pledge against additional borrowings. The Company's primary sources of liquidity are supplemented by the ability of the Company and Bank to borrow funds or issue brokered deposits, which are termed secondary sources of liquidity and which are substantial.

The following table summarizes the Company's secondary sources of liquidity in use and available at March 31, 2024:

(dollars in thousands, except amount in the footnotes)	Secondary Sources of Liquidity in Use		Secondary Sources of Liquidity Available
March 31, 2024:
Unsecured brokered deposits (1)	$	998,220	$	1,959,516
FHLB secured borrowings	600,000		1,302,153
FRB:
BTFP secured borrowings	1,000,000		—
Discount window secured borrowings	—		568,602
Federal funds lines	—		155,000
Customer repurchase agreements	37,059		—
Raymond James repurchase agreement	—		17,780
Unpledged assets: (2)
Interest-bearing deposits with banks	N/A		34,626
Investment securities	N/A		297,521
Total	$	2,635,279	$	4,335,198

(1)The available liquidity from the unsecured brokered deposits represents unsecured funds under one-way CDARS and ICS brokered deposits that would require then current market rates and be dependent on the availability of funds in those networks.

(2)Comprise unencumbered assets that could be liquidated or used as collateral to obtain additional liquidity through debt financing.

The funding mix has continued to change throughout the three months ended March 31, 2024. Deposits at quarter-end were $8.5 billion and $8.8 billion at March 31, 2024 and December 31, 2023, respectively. The decrease in deposits was primarily attributable to a $443.6 million decrease in noninterest bearing demand deposits and a reduction in savings and money market accounts of $78.7 million, partially offset by a $210.1 million increase in interest bearing transaction deposits. Borrowings at quarter-end were $1.7 billion and $1.4 billion at March 31, 2024 and December 31, 2023, respectively. The increase in borrowings was attributable to net fundings on the Company's secured borrowings.

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The Bank can purchase up to $155.0 million in federal funds on an unsecured basis from its correspondents, against which there were no amounts outstanding at March 31, 2024 and December 31, 2023. The Bank can borrow unsecured funds under one-way CDARS and ICS brokered deposits up to $2.0 billion, against which there was $998.2 million outstanding at March 31, 2024. The Bank also has custodial agreements with various broker-dealers through IntraFi's IND program which provided $823.6 million of brokered deposits at March 31, 2024.

At March 31, 2024, the Bank was eligible to draw on advances from the FHLB up to $1.9 billion based on assets pledged as collateral to the FHLB, against which the Bank borrowed $600.0 million as of March 31, 2024. The Bank had no FHLB borrowings outstanding at December 31, 2023. The Bank posted additional collateral to the FHLB during the three months ended March 31, 2024 and during the year ended December 31, 2023 to increase its eligibility for advances to meet its ongoing liquidity needs and expects to continue to utilize this source of funding in the future.

In March 2023, the Federal Reserve Board announced that it would make available additional funding to eligible depository institutions through the creation of the BTFP. The BTFP provided eligible depository institutions, including the Bank, an additional source of liquidity. Subsequent to its initiation, the Federal Reserve also modified the terms of the program so that the interest rate for new loans would be no lower than the interest rate on reserve balances in effect on the day the loan is made. In January 2024, the Company borrowed an additional $500.0 million through the BTFP and refinanced $500.0 million under the program at an interest rate of 4.76% and a maturity in January 2025. The Federal Reserve discontinued the origination of new loans on March 11, 2024, as scheduled. At March 31, 2024, the Bank had $1.0 billion of BTFP borrowings outstanding. This alternative source of liquidity is being utilized for balance sheet optimization.

The Bank has a back-up borrowing facility through the Discount Window at the Federal Reserve. This facility, which can be used to borrow up to $568.6 million, is collateralized with specific assets identified to the Federal Reserve. It is anticipated that, except for periodic testing, this facility would be utilized for contingency funding only. There can be no assurance, however, that these alternative sources of liquidity will continue to be available or will be sufficient to meet our ongoing liquidity needs.

In total, the Bank's aggregate borrowing capacity at March 31, 2024 was $2.2 billion, which consists of $1.3 billion and $568.6 million of additional aggregate capacity to borrow from the FHLB and the Federal Reserve's Discount Window, respectively, on assets that have been pledged; along with $17.8 million of aggregate capacity to borrow on a pledge security through a repurchase agreement with Raymond James. The Bank also has unencumbered securities totaling approximately $297.5 million available for pledging to the FHLB or the Federal Reserve for additional borrowing capacity.

The loss of deposits through disintermediation is one of the greater risks to liquidity. Disintermediation occurs most commonly when rates rise and depositors withdraw deposits seeking higher rates in alternative savings and investment sources than the Bank may offer. The Bank makes competitive deposit interest rate comparisons weekly and makes adjustments from time to time to ensure its interest rate offerings are competitive.

There is, however, a risk that the cost of funds will increase significantly as the Bank competes for deposits or that some deposits would be lost if rates were to continue to increase and the Bank elected not to remain competitive with its deposit rates. Under those conditions, the Bank believes that it is well positioned to use other sources of funds such as FHLB borrowings, brokered deposits, repurchase agreements and correspondent banks’ lines of credit to offset a decline in deposits in the short run, but the use of such sources may negatively impact our net interest margin and our earnings. The mix of sources used in the first quarter of 2024 negatively impacted our net interest margin and earnings, as is expected in an economic environment with continued elevated rates. There can be no assurance that the mix of sources of funds available to us at any particular time in the future will be adequate to meet our future liquidity needs. However, the market for customer and brokered deposits is highly competitive and the risk of disintermediation is high, particularly in a rising or high interest rate environment. Most of our noninterest bearing deposits are operating deposits or compensating balances that are held in connection with lending relationships. The potential outflow of such deposits is a risk unless we pay a more competitive rate of interest on them, which could significantly and negatively impact the Bank’s interest expense and net interest margin, as the transfer of some noninterest-bearing deposits to interest-bearing deposits did in 2023. Over the long-term, an adjustment in assets and change in business emphasis could compensate for a potential loss of deposits. The Bank also maintains a marketable investment portfolio to provide flexibility in the event of significant liquidity needs. The Asset Liability Committee ("ALCO") has adopted policy guidelines, which emphasize the importance of core deposits, adequate asset liquidity and a contingency funding plan.

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The Company believes it maintains sufficient primary and secondary sources of liquidity to fund its operations. During the three months ended March 31, 2024, average short term liquidity, comprising interest bearing deposits with other banks and other short-term investments and investment securities available-for-sale, was $3.4 billion, which is above the Bank's average needs. Secondary sources of liquidity available at March 31, 2024 were $4.3 billion, which include the FHLB, other insured brokered deposit sweep programs, unpledged securities, Fed funds lines, and the FRB Discount Window. At March 31, 2024, the Company held total securities available to be pledged with an estimated fair value of $297.5 million. At March 31, 2024, under the Bank’s liquidity formula, it had $5.3 billion of primary and secondary liquidity sources. Management believes the amount is adequate to meet current and projected funding needs.

Capital Resources and Adequacy

The assessment of capital adequacy depends on a number of factors such as asset quality and mix, liquidity, earnings performance, changing competitive conditions and economic forces, stress testing, regulatory measures and policy, as well as the overall level of growth and complexity of the balance sheet. The adequacy of the Company's current and future capital needs is monitored by management on an ongoing basis. Management seeks to maintain a capital structure that will assure an adequate level of capital to support anticipated asset growth and to absorb potential losses.

The federal banking regulators have issued guidance for those institutions which are deemed to have concentrations in commercial real estate lending. Pursuant to the supervisory criteria contained in the guidance for identifying institutions with a potential commercial real estate concentration risk, institutions which have (1) total reported loans for construction, land development, and other land acquisitions which represent 100% or more of an institution's total risk-based capital; or (2) total commercial real estate loans representing 300% or more of the institution's total risk-based capital and the institution's commercial real estate loan portfolio has increased 50% or more during the prior 36 months are identified as having potential commercial real estate concentration risk. Institutions which are deemed to have concentrations in commercial real estate lending are expected to employ heightened levels of risk management with respect to their commercial real estate portfolios, and may be required to hold higher levels of capital. The Company, like many community banks, has commercial real estate loans, and the Company has experienced growth in its commercial real estate portfolio in recent years. Although growth in that segment over the past 36 months at 20% did not exceed the 50% threshold laid out in the regulatory guidance, we expect the heightened supervisory expectations to continue to apply to us given the federal banking regulators’ general focus on commercial real estate exposures at banks.

At March 31, 2024, we did exceed the construction, land development, and other land acquisitions regulatory concentration threshold, and we continue to monitor our concentration in commercial real estate lending and remain in compliance with the guidance issued by the federal banking regulators. Construction, land and land development loans represent 115% of total risk based capital. Management has extensive experience in commercial real estate lending, and has implemented and continues to maintain heightened risk management procedures and strong underwriting criteria with respect to its commercial real estate portfolio.

Loan monitoring practices include but are not limited to periodic stress testing analysis to evaluate changes to cash flows, owing to interest rate increases and declines in net operating income. Nevertheless, as our commercial real estate concentration fluctuates each quarter, we may be required to maintain higher levels of capital as a result of our commercial real estate concentrations, which could require us to obtain additional capital, and may adversely affect shareholder returns. The Company seeks to manage the risks relating to commercial real estate and its capital adequacy through the development and implementation of its Capital Policy and Capital Plan, the preparation of pro-forma projections including stress testing and the development of internal minimum targets for regulatory capital ratios that are subject to approval by the Board and in excess of well capitalized ratios.

The Company and the Bank are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors and the regulators can lower classifications in certain cases. Failure to meet various capital requirements can initiate regulatory action that could have a direct material effect on the financial statements.

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At March 31, 2024, the capital position of the Company and its wholly owned subsidiary, the Bank, continue to exceed regulatory requirements and well-capitalized guidelines. The primary indicators relied on by bank regulators in measuring the capital position are four ratios as follows: Tier 1 risk-based capital ratio, Total risk-based capital ratio, the Leverage ratio and the CET1 ratio. Tier 1 capital consists of common and qualifying preferred shareholders’ equity less goodwill and other intangibles. Total risk-based capital consists of Tier 1 capital, plus qualifying subordinated debt and the qualifying portion of the ACL. Risk-based capital ratios are calculated with reference to risk-weighted assets, which are prescribed by regulation. The measure of Tier 1 capital to average assets for the prior quarter is often referred to as the leverage ratio. The CET1 ratio is the Tier 1 capital ratio but excluding preferred stock.

The prompt corrective action regulations provide five categories, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If a bank is only adequately capitalized, regulatory approval is required to, among other things, accept, renew or roll-over brokered deposits. If a bank is undercapitalized, capital distributions and growth and expansion are limited, and plans for capital restoration are required.

The FRB and the FDIC have adopted rules (the "Basel III Rules") implementing the Basel Committee on Banking Supervision's capital guidelines for U.S. banks. Under the Basel III Rules, the Company and Bank are required to maintain a CET1 ratio of 4.5% and a capital conservation buffer of 2.5% of risk-weighted assets, effectively resulting in a minimum CET1 ratio of 7.0%; a minimum ratio of Tier 1 capital to risk-weighted assets of 6.0%, or 8.5% with the fully phased in capital conservation buffer; a minimum total capital to risk-weighted assets ratio of 10.5% with the fully phased-in capital conservation buffer; and a minimum leverage ratio of 4.0%. The Basel III Rules also increased risk weights for certain assets and off-balance-sheet exposures. At March 31, 2024, the Company and the Bank meet all these requirements.

The Company announced a regular quarterly cash dividend on March 28, 2024 of $0.45 per share to shareholders of record on April 18, 2024 and it was paid on April 30, 2024.

The ability of the Company to continue to grow is dependent on its results of operations and those of the Bank, the ability to obtain additional funds for contribution to the Bank’s capital, through additional borrowings, through the sale of additional common stock or preferred stock or through the issuance of additional qualifying capital instruments, such as subordinated debt. The capital levels required to be maintained by the Company and Bank may be impacted as a result of the Bank’s concentrations in commercial real estate loans.

The capital amounts and ratios for the Company and Bank as of March 31, 2024 and December 31, 2023 are presented in the table below.

	Company				Bank				Minimum Required Basel III		To Be Well-Capitalized Under Prompt Corrective Action Regulations (1)
	Actual				Actual
(dollars in thousands)	Amount		Ratio		Amount		Ratio
March 31, 2024
CET1 capital (to risk weighted assets)	$	1,322,880	13.80	%	$	1,317,280	13.81	%	7.00	%	6.50	%
Total capital (to risk weighted assets)	$	1,425,534	14.87	%	$	1,419,934	14.89	%	10.50	%	10.00	%
Tier 1 capital (to risk weighted assets)	$	1,322,880	13.80	%	$	1,317,280	13.81	%	8.50	%	8.00	%
Tier 1 capital (to average assets)	$	1,322,880	10.26	%	$	1,317,280	10.25	%	4.00	%	5.00	%
December 31, 2023
CET1 capital (to risk weighted assets)	$	1,335,967	13.90	%	$	1,330,001	13.92	%	7.00	%	6.50	%
Total capital (to risk weighted assets)	1,421,347		14.79	%	1,415,381		14.81	%	10.50	%	10.00	%
Tier 1 capital (to risk weighted assets)	1,335,967		13.90	%	1,330,001		13.92	%	8.50	%	8.00	%
Tier 1 capital (to average assets)	1,335,967		10.73	%	1,330,001		10.72	%	4.00	%	5.00	%

(1)Applies to the Bank only.

Bank and holding company regulations, as well as Maryland law, impose certain restrictions on dividend payments by the Bank, as well as restricting extensions of credit and transfers of assets between the Bank and the Company.

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In December 2018, federal banking regulators issued a final rule that provides an optional three-year phase-in period for the adverse regulatory capital effects of adopting the CECL methodology pursuant to new accounting guidance for the recognition of credit losses on certain financial instruments, effective January 1, 2020. In March 2020, the federal banking regulators issued an interim final rule that provides banking organizations with an alternative option to temporarily delay for two years the estimated impact of the adoption of the CECL methodology on regulatory capital, followed by the three-year phase-in period. The cumulative amount that is not recognized in regulatory capital will be phased in at 25 percent per year beginning January 1, 2022. We have elected to adopt the option provided by the March 2020 interim final rule.

Asset/Liability Management and Quantitative and Qualitative Disclosures about Market Risk

A fundamental risk in banking is exposure to market risk, or interest rate risk, since a bank's earnings is largely dependent on net interest income. The Bank's ALCO formulates and monitors the management of interest rate risk through policies and guidelines established by it and overseen by the Audit Committee and the full Board of Directors and through review of detailed reports discussed quarterly. In its consideration of risk limits, the ALCO considers the impact on earnings and capital, the level and direction of interest rates, liquidity, local economic conditions, outside threats and other factors. Banking is generally a business of managing the maturity and repricing mismatch inherent in its asset and liability cash flows to provide net interest income growth consistent with the Company's profit objectives.

During the three months ended March 31, 2024, the Company was able to produce a net interest margin of 2.43% as compared to 2.77% during the same period in 2023 and continues to manage its overall interest rate risk position.

The Company, through its ALCO and ongoing financial management practices, monitors the interest rate environment in which it operates and adjusts the rates and maturities of its assets and liabilities to remain competitive and to achieve its overall financial objectives subject to established risk limits.

The loan portfolio increased during the first quarter of 2024. The re-pricing duration of the loan portfolio was 13 and 12 months at March 31, 2024 and December 31, 2023, respectively, with fixed rate loans amounting to 39% of total loans at March 31, 2024 and 38% at December 31, 2023. Variable and adjustable rate loans comprised 61% of total loans at March 31, 2024 and 62% at December 31, 2023. Variable rate loans are generally indexed to the Secured Overnight Funding Rate ("SOFR") or the Wall Street Journal prime interest rate, while adjustable rate loans are indexed primarily to the five year U.S. Treasury interest rate.

In the current and expected future interest rate environment, the Company has maintained its investment portfolio to manage the balance between yield and risk in its portfolio of MBS. Further, the Company has been principally collecting cash flows from the investment portfolio to provide liquidity. At March 31, 2024, the amortized cost less allowance of the investment portfolio decreased by $69.6 million, or 2.6%, as compared to the balance at December 31, 2023.

Based on amortized cost, the percentage mix of municipal securities was 5% of total investments at March 31, 2024 and December 31, 2023. The portion of the portfolio invested in MBS was 61% at March 31, 2024 and December 31, 2023. The portion of the portfolio invested in U.S. agency investments was 27% at March 31, 2024 and December 31, 2023. Corporate bonds made up 5% of total investments at March 31, 2024 and December 31, 2023. U.S. treasury bonds were 2% of total investments at March 31, 2024 and December 31, 2023. The duration of the investment portfolio decreased to 4.3 years at March 31, 2024 from 4.4 years at December 31, 2023.

At March 31, 2024, $80.3 million of corporate bonds were subordinated debt from other financial institutions. Corporate bonds generally, and subordinated debt in particular, pose credit risk such that if any of these issuers were to enter bankruptcy or insolvency proceedings, we could experience losses that may be material to operating results and our financial condition. We may also experience increases in provisions for credit losses, adversely affecting our net income, if the creditworthiness of the issuers declines, whether due to idiosyncratic factors, economic conditions generally or other unforeseen factors or events.

The Company has credit risk participation agreements ("RPAs") with institutional counterparties, under which the Company assumes its pro-rata share of the credit exposure associated with a borrower’s performance related to interest rate derivative contracts. The fair value of RPAs is calculated by determining the total expected asset or liability exposure of the derivatives to the borrowers and applying the borrowers’ credit spread to that exposure. Total expected exposure incorporates both the current and potential future exposure of the derivatives, derived from using observable inputs, such as yield curves and volatilities. These derivatives are not designated as hedges, are not speculative and have an asset position with a notional value of $49.5 million as of March 31, 2024. The changes in fair value for these contracts are recognized directly in earnings.

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The duration of the deposit portfolio decreased as rates rose, measuring 24 months at March 31, 2024 and 28 months at December 31, 2023. The Company experienced a total deposit decrease of $306.6 million for the three months ended March 31, 2024 as compared to a total loan increase of $14.0 million for the same period. The funding mix has continued to change in the three months ended March 31, 2024. The decrease in deposits was primarily attributable to a $443.6 million decrease in noninterest bearing demand deposits and a reduction in savings and money market accounts of $78.7 million, partially offset by a $210.1 million increase in interest bearing transaction deposits. These funding mix changes were the result of an increased disintermediation driven primarily by an increase in interest rates. During the three months ended March 31, 2024, the Company’s cost of interest bearing deposits increased by 18 basis points across its interest-bearing deposits, which comprise 78.4% of its total deposits at March 31, 2024.

The net unrealized loss before income tax on the investment securities available-for-sale portfolio was $168.6 million and $162.0 million at March 31, 2024 and December 31, 2023, respectively. At March 31, 2024, the net unrealized loss position represented 10.45% of the investment portfolio's book value.

Management relies on the use of models in order to measure the expected future impact on interest income of various interest rate environments, as described above. Through its modeling, the Company makes certain estimates that may vary from actual results. There can be no assurance that the Company will be able to successfully achieve its optimal asset liability mix, given competitive pressures, customer preferences and the inability to forecast future interest rates and movements with complete accuracy.

Market rates have stabilized as the last short-term interest rate increase from the Federal Reserve was instituted in July 2023. While yields on interest-earning assets have increased, including the impact of the reset of variable and adjustable rate loans, as scheduled, our cost of funds on interest-bearing liabilities has also increased in connection with increased utilization of interest-bearing deposits and borrowings and increasing rates on those financing sources. As a result, the net interest margin has remained steady, as compared to the two previous quarters.

Our rate risk modeling showed net interest margin expansion in an increasing rate environment; however, the model's prediction is the result of increases in both interest income on variable and adjustable rate loans and interest expense on its deposit liabilities, based on our funding needs, market conditions and certain contractual obligations but with no changes in the mix of assets or liabilities or the spreads we are able to earn. The model also assumes a stable interest rate environment after the programmed rate change, allowing assets and liabilities to reprice at their schedule in a stable environment, which may be quite different than real world conditions. Interest rate floors on certain of the Company's variable and adjustable rate loans may provide asset yield protection in a low-interest rate environment; however, they are also expected to delay the impact of increases to market rates on interest income until such floors have been exceeded, though this is not relevant for the current rate environment with most variable rate loans well above their floor rate. At March 31, 2024, the Company had a portfolio of $4.9 billion of variable and adjustable rate loans that were subject to interest rate floors with a weighted average rate of 7.82%, which was consistent with the rate at December 31, 2023. At March 31, 2024, only $210.6 million of loans held by the Company were earning interest at their floor rate, and the majority of those are expected to reset at rates higher than their floor at their next rate reset date.

The Company employs an earnings simulation model (immediate parallel shifts along the yield curve) on a quarterly basis to monitor its interest rate sensitivity and risk and to model its balance sheet cash flows and the related income statement effects in different interest rate scenarios. The model utilizes current balance sheet data and attributes and is adjusted for assumptions as to investment maturities (including prepayments), loan prepayments, interest rates, deposit decay rates, and the level of noninterest income and noninterest expense. Further discussion of the limitations of this analysis are listed below and in the risk factors and other cautionary language included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and in other periodic and current reports filed by the Company with the SEC.

The data is then subjected to a "shock test" which assumes a simultaneous change in interest rates up 100, 200, 300, and 400 basis points or down 100, 200, and 300 basis points, along the entire yield curve, but not below zero. The results are analyzed as to the impact on net interest income, earnings and the market equity over the next twelve and twenty-four month periods from March 31, 2024. In addition to analysis of simultaneous changes in interest rates along the yield curve, an analysis of changes based on interest rate "ramps" is also performed. Such analysis represents the impact of a more gradual change in interest rates, as well as yield curve shape changes.

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For the analysis presented below, at March 31, 2024, the simulation assumes a 100 basis point change in interest rates on interest bearing deposits for each 100 basis point change in market interest rates in a decreasing interest rate shock scenario with a floor of 10 basis points and assumes a 100 basis point change in interest rates on interest bearing deposits for each 100 basis point change in market interest rates in an increasing interest rate shock scenario. The Bank does have deposits with contractual terms which means these deposits will change 100 basis points for every 100 basis points change in market rates. Thus, the overall measure of the correlation between deposit costs and market rate changes is modeled at 100%. The Company utilized the same assumptions for its analysis at December 31, 2023.

Because competitive market behavior does not necessarily track the trend of interest rates but at times moves ahead of financial market influences, the change in the cost of liabilities may be different than anticipated by the interest rate risk model. If this were to occur, the effects of a rising or declining interest rate environment may not be in accordance with management’s expectations.

As quantified in the table below, the Company's analysis at March 31, 2024 shows a moderate effect on net interest income (over the next 12 months) as well as a moderate effect on the economic value of equity when interest rates are shocked down 100, 200, and 300 basis points and up 100, 200, 300, and 400 basis points. This moderate impact is due substantially to the significant level of variable rate and repriceable assets and liabilities and related shorter relative durations. At March 31, 2024, the repricing duration of the (a) investment portfolio was 4.3 years, (b) loan portfolio was 1.1 years, (c) interest bearing deposit portfolio was 1.1 years, and (d) the borrowed funds portfolio was 0.5 years.

The following table reflects the result of simulation analysis on the March 31, 2024 asset and liabilities balances:

Change in interest rates (basis points)		Percentage change in net interest income	Percentage change in net income	Percentage change in market value of portfolio equity
+	400	2.7%	6.9%	(8.0)%
+	300	2.1%	5.2%	(5.8)%
+	200	1.3%	3.4%	(3.8)%
+	100	0.6%	1.5%	(1.6)%
	—	—	—	—
-	100	0.1%	0.2%	1.1%
-	200	1.9%	4.4%	0.9%
-	300	2.4%	5.5%	(3.3)%

The results of the simulation are within the relevant policy limits adopted by the Company for percentage change in net interest income. For net interest income, the Company has adopted a policy limit of -10% for a 100 basis point change, -12% for a 200 basis point change, -18% for a 300 basis point change, and -24% for a 400 basis point change. For the market value of equity, the Company has adopted a policy limit of -12% for a 100 basis point change, -15% for a 200 basis point change, -25% for a 300 basis point change, and -30% for a 400 basis point change.

The impact of 0.1% in net interest income and 0.2% in net income given a 100 basis point decrease in market interest rates at March 31, 2024 compares to (1.3)% in net interest income and (2.6)% in net income for the same period in 2023, and reflects in large measure the beta factor discussion above. The analysis at the end of the first quarter of 2024 compared to the first quarter of 2023, showed that in an environment of increasing rates the continued increase in income is dependent on rate increases, which are passed through to borrowers basis point for basis point, as opposed to the prior year where our model suggested rising rates would not be fully passed on to depositors. The changes in net interest income, net income and the economic value of equity in higher interest rate shock scenarios at March 31, 2024 are not believed to be excessive.

Certain shortcomings are inherent in the method of analysis presented in the foregoing table. For example, although certain assets and liabilities may have similar maturities or repricing periods, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, certain assets, such as adjustable-rate mortgage loans, have features that limit changes in interest rates on a short-term basis and over the life of the loan. Further, in the event of a change in interest rates, prepayment and early withdrawal levels could deviate significantly from those assumed in calculating the tables. Finally, the ability of many borrowers to service their debt may decrease in the event of a significant interest rate increase.

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While an instantaneous parallel shift in interest rates was used in this analysis to provide an estimate of exposure under these scenarios, we believe that a non-immediate parallel shifts in interest rates would have a more modest impact. Further, the earnings simulation model does not take into account factors such as future balance sheet growth, changes in product mix, changes in yield curve relationships, the various rate indexes do not move in parallel (e.g. SOFR, Fed Funds), hedging activities we might take and changing product spreads that could mitigate any potential beneficial or adverse impact of changes in interest rates.

Another key factor to consider is the behavior of our deposit portfolio in the baseline forecast and in alternate interest rate scenarios set out in the table above is a key assumption in our projected estimates of net interest income. The projected impact on net interest income in the table above assumes no change in deposit portfolio size or mix from the baseline forecast in alternative rate environments. In higher rate scenarios, any customer activity resulting in the replacement of low-cost or noninterest-bearing deposits with higher-yielding deposits or market-based funding would reduce the assumed benefit of those deposits. The projected impact on net interest income in the table above also assumes a "through-the-cycle" non-maturity deposit beta which may not be an accurate predictor of actual deposit rate changes realized in scenarios of smaller and/or non-parallel interest rate movements.

Each of the above analyses may not, on its own, be an accurate indicator of how our net interest income will be affected by changes in interest rates. Income associated with interest-earning assets and costs associated with interest-bearing liabilities may not be affected uniformly by changes in interest rates. In addition, the magnitude and duration of changes in interest rates may have a significant impact on net interest income. For example, although certain assets and liabilities may have similar maturities or periods of repricing, they may react to different degrees to changes in market interest rates. Interest rates on certain types of assets and liabilities fluctuate in advance of changes in general market rates, while interest rates on other types may lag behind changes in general market rates. In addition, certain assets, such as adjustable-rate mortgage loans, have features (generally referred to as interest rate caps and floors) that limit changes in interest rates. Prepayment and early withdrawal levels also could deviate significantly from those assumed in calculating the maturity of certain instruments. The ability of many borrowers to service their debts also may decrease during periods of rising interest rates. ALCO reviews each of the above interest rate sensitivity analyses along with several different interest rate scenarios as part of its responsibility to provide a satisfactory, consistent level of profitability within the framework of established liquidity, loan, investment, borrowing and capital policies.

Use of Non-GAAP Financial Measures

The information set forth below contains certain financial information determined by methods other than in accordance with GAAP. These non-GAAP financial measures are "tangible common equity," "tangible book value per common share," "tangible common equity ratio," "average tangible common equity," "annualized return on average tangible common equity," "efficiency ratio," and "pre-provision net revenue." The Company considers these non-GAAP measurements useful for investors, regulators, management and others to evaluate capital adequacy and to compare against other financial institutions. Management uses these non-GAAP measures in its analysis of our performance because it believes these measures are used as a measure of our performance by investors.

The Company calculates the tangible common equity ratio by excluding the balance of intangible assets from common shareholders' equity, or tangible common equity, and dividing by tangible assets. The Company calculates tangible book value per common share by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which the Company calculates by dividing common shareholders' equity by common shares outstanding. The Company calculates the ROATCE by dividing net income available to common shareholders by average tangible common equity which is calculated by excluding the average balance of intangible assets from the average common shareholders' equity. The Company considers this information important to shareholders as tangible equity is a measure that is consistent with the calculation of capital for bank regulatory purposes, which excludes intangible assets from the calculation of risk based ratios, and as such is useful for investors, regulators, management and others to evaluate capital adequacy and to compare against other financial institutions.

The Company calculates the efficiency ratio by dividing noninterest expense by the sum of net interest income and noninterest income. The efficiency ratio measures a bank's overhead as a percentage of its revenue. The Company believes that reporting the non-GAAP efficiency ratio more closely measures its effectiveness of controlling operational activities.

The Company calculates pre-provision net revenue by subtracting noninterest expenses from the sum of net interest income and noninterest income. PPNR to average assets is calculated by dividing the annualized PPNR by average assets. The Company considers this information important to shareholders because it illustrates revenue excluding the impact of provisions and reversals to the ACL on loans.

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These disclosures should not be considered in isolation or as a substitute for results determined in accordance with GAAP and are not necessarily comparable to non-GAAP performance measures which may be presented by other bank holding companies. Management compensates for these limitations by providing detailed reconciliations between GAAP information and the non-GAAP financial measures.

The following tables reconcile the GAAP financial measures to the associated non-GAAP financial measures:

(dollars in thousands except per share data)	March 31, 2024			December 31, 2023
Common shareholders' equity	$	1,259,413		$	1,274,283
Less: Intangible assets	(104,611)			(104,925)
Tangible common equity	$	1,154,802		$	1,169,358
Book value per common share	$	41.72		$	42.58
Less: Intangible book value per common share	(3.46)			(3.50)
Tangible book value per common share	$	38.26		$	39.08
Total assets	$	11,612,648		$	11,664,538
Less: Intangible assets	(104,611)			(104,925)
Tangible assets	$	11,508,037		$	11,559,613
Tangible common equity ratio	10.03		%	10.12		%

	Three Months Ended March 31,
(dollars in thousands)	2024			2023
Average common shareholders' equity	$	1,289,656		$	1,240,978
Less: Average intangible assets	(104,718)			(104,231)
Average tangible common equity	$	1,184,938		$	1,136,747
Net income available to common shareholders	$	(338)		$	24,234
Average tangible common equity	1,184,938			1,136,747
Annualized return on average tangible common equity	(0.11)		%	8.65		%
Net interest income	$	74,698		$	75,024
Noninterest income	3,589			3,700
Operating revenue	$	78,287		$	78,724
Noninterest expense	$	39,997		$	40,584
Efficiency ratio	51.09		%	51.55		%
Net interest income	$	74,698		$	75,024
Noninterest income	3,589			3,700
Less: Noninterest expense	(39,997)			(40,584)
Pre-provision net revenue	$	38,290		$	38,140

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Please refer to Item 2 of this report, "Management's Discussion and Analysis of Financial Condition and Results of Operations," under the caption "Asset/Liability Management and Quantitative and Qualitative Disclosure about Market Risk."

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures. The Company's management, under the supervision and with the participation of the Chief Executive Officer, Executive Chairman and Chief Financial Officer, evaluated, as of the last day of the period covered by this report, the effectiveness of the design and operation of the Company's disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act. Based on that evaluation, the Chief Executive Officer, Executive Chairman and the Chief Financial Officer concluded that the Company's disclosure controls and procedures as of March 31, 2024 were effective to provide reasonable assurance that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required and that it is accumulated and communicated to our management, including the Chief Executive Officer, Executive Chairman and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting. There were no changes in our internal control over financial reporting as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) that occurred during the first quarter of 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Refer to "Note 12. Legal Contingencies" of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

ITEM 1A. RISK FACTORS

We are subject to various risks and uncertainties, including those described in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023, which could adversely affect our business, financial performance and results of operations. There have been no material changes to our risk factors from those risks included in our Annual Report on Form 10-K.

ITEM 2. - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

10.1	Form of Indemnification Agreement
31.1	Certification of Susan G. Riel
31.2	Certification of Eric R. Newell
31.3	Certification of Norman R. Pozez
32.1	Certification of Susan G. Riel
32.2	Certification of Eric R. Newell
32.3	Certification of Norman R. Pozez
101	Interactive data files pursuant to Rule 405 of Regulation S-T:
	(i)    Consolidated Balance Sheets at March 31, 2024 and December 31, 2023
	(ii)   Consolidated Statement of Operations for the three months ended March 31, 2024 and 2023
	(iii)  Consolidated Statement of Comprehensive (Loss) Income for the three months ended March 31, 2024 and 2023
	(iv)  Consolidated Statement of Changes in Shareholders' Equity for the three months ended March 31, 2024 and 2023
	(v)   Consolidated Statement of Cash Flows for the three months ended March 31, 2024 and 2023
	(vi)  Notes to the Consolidated Financial Statements
104	The cover page of this Quarterly Report on Form 10-Q, formatted in Inline XBRL

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		EAGLE BANCORP, INC.
Date:	May 3, 2024	By:	/s/ Susan G. Riel
			Susan G. Riel, President and Chief Executive Officer of the Company
Date:	May 3, 2024	By:	/s/ Eric R. Newell
			Eric R. Newell, Executive Vice President and Chief Financial Officer of the Company

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EX-10.1

Exhibit 10.1

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into as of the___ day of March, 2024, by and between Eagle Bancorp, Inc., a Maryland corporation (“Parent” or the “Company”) and _________ (“Indemnitee”), under the following circumstances.

A.    At the request of the Company, Indemnitee currently serves as [a director] [and] [an officer] of Parent and EagleBank (“Bank”) and may, therefore, be subjected to claims, suits or proceedings and judgments and amounts paid in settlement in connection therewith arising as a result of such service. Bank is a wholly-owned subsidiary of Parent.

B.    As a material inducement to Indemnitee to serve or continue to serve in such capacity, the Company has agreed to indemnify and to advance reasonable expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings and all judgments and amounts paid in settlement in connection therewith, as provided in this Agreement.

C.    The parties desire to set forth in this Agreement their agreement regarding indemnification and advancement of expenses; provided that this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the articles of incorporation or bylaws of either Parent or Bank, any agreement entered into after the date of this Agreement or a resolution of the stockholders entitled to vote generally in the election of directors, or of the Board of Directors, or otherwise.

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1. Definitions. For purposes of this Agreement:

(a)    “Corporate Status” means the status of a person as a present or former director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company. As a clarification and without limiting the circumstances in which Indemnitee may be serving at the request of the Company, service by Indemnitee shall be deemed to be at the request of the Company: (i) if Indemnitee serves or served as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any corporation, partnership, limited liability company, joint venture, trust or other enterprise (1) of which a majority of the voting power or equity interest is owned directly or indirectly by the Company, or (2) the management of which is controlled directly or indirectly by the Company, and (ii) if, as a result of Indemnitee’s service to the Company or any of its affiliated entities, Indemnitee is subject to duties by, or required to perform services for, an employee benefit plan or its participants or beneficiaries, including as deemed fiduciary thereof.

(b)    “Effective Date” means the date set forth in the first paragraph of this Agreement.

(c)    “Expenses” means any and all direct and indirect attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties and any other disbursements

or expenses incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in or otherwise participating in a Proceeding (voluntarily or involuntarily). Expenses shall also include Expenses incurred in connection with any appeal resulting from any Proceeding including, without limitation, the premium, security for and other costs relating to any cost bond, supersedeas bond or other appeal bond or its equivalent.

(d)    “Proceeding” means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation (internal or external), inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative or investigative (formal or informal) nature, including any appeal therefrom. If Indemnitee reasonably believes that a given situation may lead to or culminate in the institution of a Proceeding, such situation shall also be considered a Proceeding.

Section 2. Services by Indemnitee. Indemnitee will serve in the capacity or capacities set forth in the recital A above; however, this Agreement shall not impose any independent obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company. This Agreement shall not be deemed an employment contract between the Company (or any other entity) and Indemnitee.

Section 3. General. The Company shall indemnify, and advance Expenses to, Indemnitee: (a) as provided in this Agreement, (b) under the articles of incorporation and bylaws of Parent or Bank, and (c) otherwise to the maximum extent permitted by Maryland law in effect on the Effective Date and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the Effective Date. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law (the “MGCL”).

Section 4. Indemnification. If, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall indemnify and hold harmless Indemnitee against all judgments and amounts paid in settlement and all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any such Proceeding or any action, discovery event, claim, issue or matter therein or related thereto, to the maximum extent permitted by Parent and Bank’s articles of incorporation and bylaws and Maryland law in effect on the Effective Date and as amended from time to time, subject to the limitations set forth in Section 5.

Section 5. Certain Limits on Indemnification. Notwithstanding any other provision of this Agreement (other than Section 6), Indemnitee shall not be entitled to:

(a)    indemnification hereunder if it is established, in a final adjudication of the Proceeding not subject to further appeal, that: (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding, and was committed in bad faith or was the result of active and deliberate dishonesty, or (ii) Indemnitee actually received an improper personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful;

(b)    indemnification hereunder if the Proceeding was one by or in the right of the Company and Indemnitee is adjudged, in a final adjudication of the Proceeding not subject to further appeal, to be liable to the Company; or

(c)    indemnification or advancement of Expenses hereunder if the Proceeding was brought by Indemnitee, unless: (i) the Proceeding was brought to enforce indemnification under

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this Agreement, and then only to the extent in accordance with and as authorized by Section 10 of this Agreement, or (ii) the articles of incorporation or bylaws of Parent or Bank, a resolution of the stockholders entitled to vote generally in the election of directors, or of the Board of Directors of Parent or Bank, or an agreement approved by the Board of Directors of Parent or Bank to which either Parent or Bank is a party expressly provide otherwise.

Section 6. Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following circumstances:

(a)    if such court determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing such reimbursement; or

(b)    if such court determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper without regard to any limitation on such court-ordered indemnification contemplated by Section 2-418(d)(2)(ii) of the MGCL.

Section 7. Advancement of Expenses for Indemnitee. If, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party to (or otherwise becomes a participant in) any Proceeding, the Company shall, without requiring a preliminary determination that Indemnitee has satisfied an applicable standard of conduct of Indemnitee’s ultimate entitlement to indemnification hereunder, advance all Expenses incurred by or on behalf of Indemnitee in connection with such Proceeding. The Company shall make such advance or advances within ten days after the receipt by the Company of a statement or statements requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding and may be in the form of, in the reasonable discretion of the Indemnitee (but without duplication) (a) payment of such Expenses directly to third parties on behalf of Indemnitee, (b) advancement of funds to Indemnitee in an amount sufficient to pay such Expenses or (c) reimbursement to Indemnitee for Indemnitee’s payment of such Expenses. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor.

Section 8. Indemnification and Advancement of Expenses as a Witness or Other Participant. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of Indemnitee’s Corporate Status, made a witness or otherwise asked to participate in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party, without requiring a preliminary determination that Indemnitee has satisfied an applicable standard of conduct or Indemnitee’s ultimate entitlement to indemnification hereunder, Indemnitee shall be advanced and indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith within ten days after the receipt by the Company of a statement or statements requesting any such advancement or indemnification from time to time, whether prior to or

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after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee. In connection with any such advancement of Expenses, the Company may require Indemnitee to provide an undertaking and affirmation substantially in the form attached hereto as Exhibit A.

Section 9. Presumptions and Effect of Certain Proceedings. (a) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea of nolo contendere or its equivalent, or entry of an order of probation prior to judgment, does not create a presumption that Indemnitee is not entitled to indemnification under this Agreement.

    (b)    The knowledge and/or actions, or failure to act, of any other director, officer, employee or agent of the Company or any other director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise shall not be imputed to Indemnitee for purposes of determining any other right to indemnification under this Agreement.

Section 10. Remedies of Indemnitee. (a) If (i) advancement of Expenses is not timely made pursuant to Sections 7 or 8 of this Agreement, (ii) payment of indemnification is not made pursuant to Sections 4 or 8 of this Agreement within ten days after receipt by the Company of a written request therefor, or (iii) payment of indemnification pursuant to any other section of this Agreement or the articles of incorporation or bylaws of either Parent or Bank is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, or arbitration, conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association, of Indemnitee’s entitlement to indemnification or advance of Expenses pursuant to this Agreement. Indemnitee, in such enforcement action, shall also be entitled to be paid all Expenses associated with enforcing his or her claim or exercise of rights, unless as a part of such enforcement action, the court of competent jurisdiction or arbitrator determines that the action was instituted in bad faith or was frivolous or it shall ultimately be determined that Indemnitee is not entitled to be indemnified by the Company under the provisions of this Agreement, Parent or Bank’s articles of incorporation or bylaws or the MGCL. The judicial proceeding or arbitration commenced pursuant to this Section shall be conducted in all respects as a de novo trial, or arbitration, on the merits, and Indemnitee shall not be prejudiced by reason of the prior adverse determination. Indemnitee shall commence a proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 10(a). Except as set forth herein, the provisions of Maryland law (without regard to its conflicts of laws rules) shall apply to any such arbitration. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration. Neither the failure of Parent or Bank (including its Board of Directors or stockholders) to have made a determination prior to the commencement of such enforcement action that indemnification of Indemnitee is proper under the circumstances, nor an actual determination by Parent or Bank that such indemnification is improper, shall be a defense to the action or create a presumption that Indemnitee is not entitled to indemnification under this Agreement or otherwise.

(b)    In any judicial proceeding or arbitration commenced pursuant to this Section 10, Indemnitee shall be presumed to be entitled to indemnification or advancement of Expenses, as the case may be, under this Agreement, and the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be. If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 10, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 7 or 8 of this Agreement until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed). The Company shall, to the fullest extent not prohibited by law,

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be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 10 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all of the provisions of this Agreement.

(c)    In the event that Indemnitee is successful in seeking, pursuant to this Section 10, a judicial adjudication of or an award in arbitration to enforce Indemnitee’s rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by Indemnitee in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advancement of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

(d)    Interest shall be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial Proceedings Article of the Annotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period (i) commencing with the tenth day after the date on which the Company was requested to advance Expenses in accordance with Sections 7 or 8 of this Agreement, and (ii) ending on the date such payment is made to Indemnitee by the Company.

Section 11. Defense of the Underlying Proceeding. (a) Indemnitee shall notify the Company promptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, request or other document relating to any Proceeding which may result in the right to indemnification or the advancement of Expenses hereunder and shall include with such notice a description of the nature of the Proceeding and a summary of the facts underlying the Proceeding. The failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advancement of Expenses under this Agreement unless the Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)    Subject to the provisions of the last sentence of this Section 11(b) and of Section 11(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 11(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee, (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee or (iii) would impose any Expense, judgment, fine, penalty or limitation on Indemnitee. This Section 11(b) shall not apply to a Proceeding brought by Indemnitee under Section 10 of this Agreement.

    (c)    Notwithstanding the provisions of Section 10(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate Status, if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld or delayed, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice, subject to the prior

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approval of the Company, which approval shall not be unreasonably withheld or delayed, at the expense of the Company (subject to Section 10(d) of this Agreement), to represent Indemnitee in connection with any such matter.

Section 12. Non-Exclusivity; Survival of Rights; Subrogation. (a) The rights of indemnification and advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the charter or Bylaws of Parent or Bank, any agreement entered into after the date hereof or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors of Parent or Bank, or otherwise. Unless consented to in writing by Indemnitee, no amendment, alteration or repeal of the Company’s articles of incorporation or bylaws, this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration or repeal, regardless of whether a claim with respect to such action or inaction is raised prior or subsequent to such amendment, alteration or repeal. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right or remedy shall be cumulative and in addition to every other right or remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion of any right or remedy hereunder, or otherwise, shall not prohibit the concurrent assertion or employment of any other right or remedy.

(b)    In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

Section 13. Insurance. (a) The Company will acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors of Parent, covering Indemnitee for claims made against Indemnitee by reason of Indemnitee’s Corporate Status and covering the Company for any indemnification or advancement of Expenses made by the Company to Indemnitee for any claims made against Indemnitee by reason of Indemnitee’s Corporate Status. To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees or agents or fiduciaries of Parent and/or Bank or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any other person with a similar title or role with Company.

(b)    Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee which would otherwise be indemnifiable hereunder arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, settlements and Expenses incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in Section 13(a). The purchase, establishment and maintenance of any such insurance shall not in any way limit or affect the rights or obligations of the Company or Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement by the Company and the Indemnitee shall not in any way limit or affect the rights or obligations of the Company under any such insurance policies. If, at the time the Company receives notice from any source of a Proceeding to which Indemnitee is a party or a participant (as a witness or otherwise) either Parent or Bank has director and officer liability insurance in effect, it shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies.

(c)    The Indemnitee shall cooperate with the Company or any insurance carrier of the Company with respect to any investigation or Proceeding.

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Section 14. Coordination of Payments. The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 15. Contribution. If the indemnification provided in this Agreement is unavailable in whole or in part and may not be paid to Indemnitee for any reason, other than as provided in Section 5, then, in respect to any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), to the fullest extent permissible under applicable law, the Company, in lieu or indemnifying and holding harmless Indemnitee, shall pay, in the first instance, the entire amount incurred by Indemnitee, whether for Expenses, judgments and/or amounts paid or to be paid in settlement, in connection with any Proceeding without requiring Indemnitee to contribute to such payment, and the Company hereby waives and relinquishes any right of contribution it may have at any time against Indemnitee.

Section 16. Reports to Stockholders. To the extent required by the MGCL, Parent shall report in writing to its stockholders the payment of any amounts for indemnification of, or advancement of Expenses to, Indemnitee under this Agreement arising out of a Proceeding by or in the right of Parent with the notice of the meeting of stockholders next following the date of the payment of any such indemnification or advancement of Expenses or prior to such meeting.

Section 17. Duration of Agreement; Binding Effect. (a) This Agreement and the obligations of the Company under this Agreement shall remain in effect while Indemnitee is serving as a director, officer, employee or agent of either Parent or Bank and while Indemnitee is serving as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise at the request of the Company, and shall continue thereafter so long as Indemnitee is or may be subject to any actual or possible Proceeding (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 10 of this Agreement) even if, in any such case, Indemnitee has ceased serving in such capacity at the time of any such Proceeding.

(b)    The indemnification and advancement of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of Parent or Bank), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of Parent and Bank or a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of Parent and Bank, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.

(c)    The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise to all, substantially all or a substantial part, of the business and/or assets of the Company), by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

(d)    The Company and Indemnitee agree that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that

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Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. Indemnitee shall further be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges that, in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby waives any such requirement of such a bond or undertaking.

Section 18. Severability. If any provision or provisions of this Agreement shall be held to be invalid, void, illegal or otherwise unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby

Section 19. Required Regulatory Provisions. Notwithstanding anything in this Agreement to the contrary, any payments to Indemnitee by Parent or Bank, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C Section 1828(k), and the regulations promulgated there under in 12 CFR Part 359.

Section 20. Counterparts. This Agreement may be executed in two or more counterparts (delivery of which may be by facsimile, via email as a portable document format (.pdf) or by Docusign or other electronic execution system), each of which will be deemed an original, and it will not be necessary in making proof of this Agreement or the terms of this Agreement to produce or account for more than one of such counterparts.

Section 21. Headings. The headings of the Sections of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

Section 22. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

Section 23. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, on the day of such delivery, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

(a)    If to Indemnitee, to the address set forth on the signature page hereto.

(b)    If to the Company, to:    Eagle Bancorp, Inc.

                7830 Old Georgetown Road

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                3rd Floor

                Bethesda, MD 20814-2432

Attn: Chief Legal Officer

        With a copy to:        Chair

                    Governance and Nominating Committee

                    Eagle Bancorp, Inc.

                    7830 Old Georgetown Road

                    3rd Floor

                    Bethesda, MD 20814-2432

or to such other address as may have been furnished in writing to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

Section 24. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

“Parent”
EAGLE BANCORP, INC.
By:
	Name:
	Title:
“Indemnitee”
By:
	Name:
	Title:

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EXHIBIT A

AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES ADVANCED

To:    The Boards of Directors of Eagle Bancorp, Inc.

Re:    Affirmation and Undertaking

Ladies and Gentlemen:

This Affirmation and Undertaking is being provided pursuant to that certain Indemnification Agreement dated the ___ day of May, 2024, by and between Eagle Bancorp, Inc., a Maryland corporation (the “Company”) and the undersigned Indemnitee (the “Indemnification Agreement”), pursuant to which I am entitled to advancement of Expenses in connection with [Description of Proceeding] (the “Proceeding”). Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.

I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm my good faith belief that at all times, insofar as I was involved as [a director] [and] [an officer] of the Company, in any of the facts or events giving rise to the Proceeding, I: (1) did not act with bad faith or active or deliberate dishonesty, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.

In consideration of the advance by the Company for Expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it is established, in accordance with Section 5 of the Indemnification Agreement, that I am not entitled to indemnification in connection with the Proceeding, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established.

IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this ____ day of __________, 20__.

Name:

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Susan G. Riel, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Eagle Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	May 3, 2024	/s/ Susan G. Riel
		President and Chief Executive Officer of the Company

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Eric R. Newell, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Eagle Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	May 3, 2024	/s/ Eric R. Newell
		Executive Vice President and Chief Financial Officer of the Company

EX-31.3

Exhibit 31.3

CERTIFICATION

I, Norman R. Pozez, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Eagle Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	May 3, 2024	/s/ Norman R. Pozez
		Executive Chairman of the Company

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Form 10-Q of Eagle Bancorp, Inc. for the quarter ended March 31, 2024, I, Susan G. Riel, President and Chief Executive Officer of Eagle Bancorp, Inc., hereby certify pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

(1) such Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Eagle Bancorp, Inc.

/s/ Susan G. Riel

Susan G. Riel

President and Chief Executive Officer of the Company

May 3, 2024

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Form 10-Q of Eagle Bancorp, Inc. for the quarter ended March 31, 2024, I, Eric R. Newell, Executive Vice President and Chief Financial Officer of Eagle Bancorp, Inc., hereby certify pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

(1) such Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Eagle Bancorp, Inc.

/s/ Eric R. Newell

Eric R. Newell

Executive Vice President and Chief Financial Officer of the Company

May 3, 2024

EX-32.3

Exhibit 32.3

CERTIFICATION OF EXECUTIVE CHAIRMAN

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Form 10-Q of Eagle Bancorp, Inc. for the quarter ended March 31, 2024, I, Norman R. Pozez, Executive Chairman of Eagle Bancorp, Inc., hereby certify pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

(1) such Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Eagle Bancorp, Inc.

/s/ Norman R. Pozez

Norman R. Pozez

Executive Chairman of the Company

May 3, 2024

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2024	May 01, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	0-25923
Entity Registrant Name	Eagle Bancorp, Inc.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	52-2061461
Entity Address, Address Line One	7830 Old Georgetown Road
Entity Address, Address Line Two	Third Floor
Entity Address, City or Town	Bethesda
Entity Address, State or Province	MD
Entity Address, Postal Zip Code	20814
City Area Code	301
Local Phone Number	986-1800
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	EGBN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		30,189,637
Entity Central Index Key	0001050441
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Assets
Cash and due from banks	$ 10,076	$ 9,047
Federal funds sold	11,343	3,740
Interest-bearing deposits with banks and other short-term investments	696,453	709,897
Investment securities available-for-sale (amortized cost of $1,613,659 and $1,668,316, respectively, and allowance for credit losses of $17 and $17, respectively).	1,445,034	1,506,388
Investment securities held-to-maturity, net of allowance for credit losses of $1,957 and $1,956, respectively (fair value of $878,159 and $901,582, respectively)	1,000,732	1,015,737
Federal Reserve and Federal Home Loan Bank stock	54,678	25,748
Loans	7,982,702	7,968,695
Less: allowance for credit losses	(99,684)	(85,940)
Loans, net	7,883,018	7,882,755
Premises and equipment, net	9,504	10,189
Right-of-use assets - operating leases	17,679	19,129
Deferred income taxes	87,813	86,620
Bank-owned life insurance	113,624	112,921
Goodwill and other intangible assets, net	104,611	104,925
Other real estate owned	773	1,108
Other assets	177,310	176,334
Total Assets	11,612,648	11,664,538
Deposits:
Noninterest-bearing demand	1,835,524	2,279,081
Interest-bearing transaction	1,207,566	997,448
Savings and money market	3,235,391	3,314,043
Time	2,222,958	2,217,467
Total deposits	8,501,439	8,808,039
Customer repurchase agreements	37,059	30,587
Borrowings	1,669,948	1,369,918
Operating lease liabilities	21,611	23,238
Reserve for unfunded commitments	6,045	5,590
Other liabilities	117,133	152,883
Total Liabilities	10,353,235	10,390,255
Shareholders' Equity
Common stock, par value $0.01 per share; shares authorized 100,000,000, shares issued and outstanding 30,185,732 and 29,925,612, respectively	297	296
Additional paid-in capital	377,334	374,888
Retained earnings	1,047,550	1,061,456
Accumulated other comprehensive loss	(165,768)	(162,357)
Total Shareholders' Equity	1,259,413	1,274,283
Total Liabilities and Shareholders' Equity	$ 11,612,648	$ 11,664,538

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Investment securities available for sale, amortized cost	$ 1,613,659	$ 1,668,316
Allowance for credit losses	17	17
HTM Allowance for credit losses	(1,957)	(1,956)
HTM fair value	$ 878,159	$ 901,582
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	100,000,000	100,000,000
Common stock, issued (in shares)	30,185,732	29,925,612
Common stock, outstanding (in shares)	30,185,732	29,925,612

XML

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Interest Income
Interest and fees on loans	$ 137,994	$ 120,850
Interest and dividends on investment securities	12,680	13,545
Interest on balances with other banks and short-term investments	24,862	5,774
Interest on federal funds sold	66	78
Total interest income	175,602	140,247
Interest Expense
Interest on deposits	79,383	48,954
Interest on customer repurchase agreements	315	302
Interest on borrowings	21,206	15,967
Total interest expense	100,904	65,223
Net Interest Income	74,698	75,024
Provision for Credit Losses	35,175	6,164
Provision for Credit Losses for Unfunded Commitments	456	848
Net Interest Income After Provision for Credit Losses	39,067	68,012
Noninterest Income
Service charges on deposits	1,699	1,510
Gain on sale of loans	0	305
Net gain (loss) on sale of investment securities	4	(21)
Increase in the cash surrender value of bank-owned life insurance	703	655
Other income	1,183	1,251
Total noninterest income	3,589	3,700
Noninterest Expense
Salaries and employee benefits	21,726	24,174
Premises and equipment expenses	3,059	3,317
Marketing and advertising	859	636
Data processing	3,293	3,099
Legal, accounting and professional fees	2,507	3,254
FDIC insurance	6,412	1,486
Other expenses	2,141	4,618
Total noninterest expense	39,997	40,584
Income Before Income Tax Expense	2,659	31,128
Income Tax Expense	2,997	6,894
Net (Loss) Income	$ (338)	$ 24,234
(Loss) Earnings Per Common Share
Basic (in dollars per share)	$ (0.01)	$ 0.78
Diluted (in dollars per share)	$ (0.01)	$ 0.78

XML

Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Statement of Comprehensive Income [Abstract]
Net (Loss) Income	$ (338)	$ 24,234
Other Comprehensive (Loss) Income, Net of Tax:
Unrealized (loss) gain on securities available-for-sale	(5,067)	17,936
Reclassification adjustment for (gain) loss included in net income	(3)	16
Total unrealized (loss) gain on investment securities available-for-sale	(5,070)	17,952
Amortization of unrealized loss on securities transferred to held-to-maturity	1,385	641
Total unrealized gain on investment securities held-to-maturity	1,385	641
Net unrealized gain on derivatives	274	0
Total unrealized gain on derivatives	274	0
Other comprehensive (loss) income	(3,411)	18,593
Comprehensive (Loss) Income	$ (3,749)	$ 42,827

XML

Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid In Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning balance (in shares) at Dec. 31, 2022		31,346,903
Beginning balance at Dec. 31, 2022	$ 1,228,321	$ 310	$ 412,303	$ 1,015,215	$ (199,507)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (Loss) Income	24,234			24,234
Other comprehensive income (loss), net of tax	18,593				18,593
Stock-based compensation expense	2,948		2,948
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes (in shares)		(37,104)
Vesting of time-based stock awards issued at date of grant, net of shares withheld for payroll taxes	0	$ 2	(2)
Vesting of performance-based stock awards, net of shares withheld for payroll taxes (in shares)		27,296
Time based stock awards granted (in shares)		171,534
Issuance of common stock related to employee stock purchase plan (in shares)		3,018
Issuance of common stock related to employee stock purchase plan	133		133
Cash dividends declared	(13,897)			(13,897)
Common stock repurchased (in shares)		(400,000)
Common stock repurchased	(18,374)	$ (4)	(18,370)
Ending balance (in shares) at Mar. 31, 2023		31,111,647
Ending balance at Mar. 31, 2023	$ 1,241,958	$ 308	397,012	1,025,552	(180,914)
Beginning balance (in shares) at Dec. 31, 2023	29,925,612	29,925,612
Beginning balance at Dec. 31, 2023	$ 1,274,283	$ 296	374,888	1,061,456	(162,357)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (Loss) Income	(338)			(338)
Other comprehensive income (loss), net of tax	(3,411)				(3,411)
Stock-based compensation expense	2,368		2,368
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes (in shares)		31,549
Vesting of time-based stock awards issued at date of grant, net of shares withheld for payroll taxes	0	$ (1)	1
Vesting of performance-based stock awards, net of shares withheld for payroll taxes (in shares)		12,013
Time based stock awards granted (in shares)		275,896
Issuance of common stock related to employee stock purchase plan (in shares)		3,760
Issuance of common stock related to employee stock purchase plan	$ 79		79
Cash dividends declared (in shares)	0
Cash dividends declared	$ (13,568)			(13,568)
Ending balance (in shares) at Mar. 31, 2024	30,185,732	30,185,732
Ending balance at Mar. 31, 2024	$ 1,259,413	$ 297	$ 377,334	$ 1,047,550	$ (165,768)

XML

Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Statement of Stockholders' Equity [Abstract]
Cash dividends declared (in dollars per share)	$ 0.45	$ 0.45

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash Flows From Operating Activities:
Net (Loss) Income	$ (338)	$ 24,234
Adjustments to reconcile Net (Loss) Income to net cash provided by operating activities:
Provision for credit losses	35,175	6,164
Provision for credit losses for unfunded commitments	456	848
Depreciation and amortization	786	890
Gain on sale of loans	0	(305)
Loss on mortgage servicing rights	34	35
Securities premium amortization, net	1,432	1,715
Origination of loans held for sale	0	(27,929)
Proceeds from sale of loans held for sale	0	28,480
(Gain) loss on sale of investment securities	(4)	21
Net increase in cash surrender value of BOLI	(703)	(655)
Stock-based compensation expense	2,368	2,948
Increase in other assets	(696)	(9,019)
(Increase) decrease in other liabilities	(35,664)	33,369
Net Cash Provided by Operating Activities	2,846	60,796
Investment securities available-for-sale:
Proceeds from maturities	26,883	31,235
Proceeds from sale/call	27,000	8,303
Investment securities held-to-maturity:
Proceeds from maturities	16,027	17,996
Proceeds from call	52	68
Purchase of Federal Reserve stock	(71)	(69)
Purchase of Federal Home Loan Bank stock	(28,859)	(13,998)
Net increase in loans	(35,758)	(103,019)
Redemption of BOLI	0	436
Proceeds from sale of OREO	656	0
Net change in premises and equipment	(71)	(313)
Net Cash Provided by (Used in) Investing Activities	5,859	(59,361)
Cash Flows From Financing Activities:
Decrease in deposits	(306,600)	(1,249,941)
Increase in customer repurchase agreements	6,472	2,754
Proceeds from borrowings	2,100,000	4,883,000
Repayment of borrowings	(1,800,000)	(3,744,200)
Proceeds from employee stock purchase plan	79	133
Common stock repurchased	0	(18,374)
Cash dividends paid	(13,468)	(13,897)
Net Cash Used in Financing Activities	(13,517)	(140,525)
Net Decrease in Cash and Cash Equivalents	(4,812)	(139,090)
Cash and Cash Equivalents at Beginning of Period	722,684	311,854
Cash and Cash Equivalents at End of Period	717,872	172,764
Supplemental Cash Flows Information:
Interest paid	66,800	61,287
Non-Cash Investing Activities
Transfers from loans to other real estate owned	$ 400	$ 0

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The Consolidated Financial Statements include the accounts of Eagle Bancorp, Inc. (the "Parent") and its subsidiaries (together with the Parent, the "Company"), with all significant intercompany transactions eliminated. EagleBank (the "Bank"), a Maryland chartered commercial bank, is the Parent's principal subsidiary.

The accounting and reporting policies of the Company conform to generally accepted accounting principles in the United States of America ("GAAP") and to general practices in the banking industry. The Consolidated Financial Statements and accompanying notes of the Company included herein are unaudited. The Consolidated Balance Sheet as of December 31, 2023 was derived from the audited Consolidated Balance Sheet as of that date. The Consolidated Financial Statements reflect all adjustments, consisting of normal recurring adjustments, that in the opinion of management are necessary to present fairly the results for the periods presented. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). In addition to the accounting policies described below, the Company applies the accounting policies contained in Note 1 to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. Certain reclassifications have been made to 2023 amounts previously reported to conform to the 2024 presentation. Reclassifications had no effect on net income or shareholders' equity. These statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

Nature of Operations

The Company, through the Bank, conducts a full service community banking business, primarily in Northern Virginia, Suburban Maryland, and Washington, D.C. The primary financial services offered by the Bank include real estate, commercial and consumer lending, as well as traditional deposit and repurchase agreement products. The Bank is also active in the origination of small business loans, and the origination, securitization and sale of multifamily Federal Housing Administration ("FHA") loans. The guaranteed portion of small business loans, guaranteed by the Small Business Administration ("SBA"), is typically sold to third party investors in a transaction apart from the loan's origination.

In April 2024, the Company closed a branch following the lease's expiration. The Bank offers its products and services through twelve banking offices, four lending centers and various digital capabilities, including remote deposit services and mobile banking services. Eagle Insurance Services, LLC, a subsidiary of the Bank that previously offered access to insurance products and services through a referral program with a third party insurance broker, continues to receive fee income in connection with such program. Landroval Municipal Finance, Inc., a subsidiary of the Bank, focuses on lending to municipalities by buying debt on the public market as well as direct purchase issuance.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates and such differences could be material to the consolidated financial statements.

Investment Securities

The Company recognizes acquired securities on the trade date. Investment securities comprise debt securities, which are classified depending on the Company's intent and ability to hold the securities to maturity. Debt securities are classified as available-for-sale when management may have the intent to sell them prior to maturity. Debt securities are classified as held-to-maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity.

Securities available-for-sale are acquired as part of the Company's asset/liability management strategy and may be sold in response to changes in interest rates, current market conditions, loan demand, changes in prepayment risk and other factors. Securities available-for-sale are carried at fair value, with unrealized gains or losses, other than impairment losses, being reported as accumulated other comprehensive income/(loss), a separate component of shareholders' equity, net of deferred income tax. Realized gains and losses, using the specific identification method, are included as a separate component of noninterest income in the Consolidated Statements of Operations.

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

Transfers of Investment Securities from Available-for-Sale to Held-to-Maturity

Transfers of debt securities into the held-to-maturity category from the available-for-sale category are made at amortized cost, net of unrealized gain or loss reported in accumulated other comprehensive income (loss) at the date of transfer. The unrealized holding gain or loss at the date of transfer is retained in other comprehensive income and in the carrying value of the held-to-maturity ("HTM") securities. Such amounts are amortized over the remaining life of the security.

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

Loans

Loans held for investment are stated at the principal amount outstanding, net of unamortized deferred costs and fees. Interest income on loans is recognized at the contractual rate on the principal amounts outstanding. Loan origination fees, net of direct loan origination costs, and commitment fees are deferred and amortized on the interest method over the term of the loan.

Past due loans are placed on nonaccrual status when there is a clear indication that the borrower's cash flow may not be sufficient to meet payments as they become due. Generally, this conclusion is reached when a loan is 90 days past due. When a loan is placed on nonaccrual status, all previously accrued and unpaid interest is reversed through interest income. Interest income is subsequently recognized on a cash basis as long as the remaining book balance of the asset is deemed to be collectible. If collectability is questionable, then cash payments are applied to principal. A loan is placed back on accrual status when both principal and interest are current and it is probable that we will be able to collect all amounts due (both principal and interest) according to the terms of the loan agreement.

Allowance for Credit Losses

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

	Three Months Ended March 31,
(dollars in thousands)	2024		2023
Provision for credit losses - loans	$	35,174	$	4,908
Provision for credit losses - HTM debt securities	1		1,242
Provision for credit losses - AFS debt securities	—		14
Total	$	35,175	$	6,164

Allowance for Credit Losses - Loans

The allowance for credit losses ("ACL") - loans is an estimate of the expected credit losses in the loans held for investment portfolio. The Company's ACL on the loan portfolio is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the allowance when they are deemed uncollectible. Expected recoveries are recorded to the extent they do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

Reserves on loans that do not share risk characteristics are evaluated on an individual basis. Nonaccrual loans are specifically reviewed for loss potential and when deemed appropriate are assigned a reserve based on an individual evaluation. The remainder of the portfolio, representing all loans not evaluated individually for impairment, is segregated by call report codes, and a loan-level probability of default ("PD") / loss given default ("LGD") cash flow method is applied using an exposure at default ("EAD") model. These historical loss rates are then modified to incorporate our reasonable and supportable forecast of future losses at the portfolio segment level, as well as any necessary qualitative adjustments.

The Company uses regression analysis of historical internal and peer data provided by a third-party service provider (as Company loss data is insufficient) to determine suitable credit loss drivers to utilize when modeling lifetime PD and LGD. This analysis also determines how expected PD will be impacted by different forecasted levels of the loss drivers.

A similar process is employed to calculate a reserve assigned to off-balance sheet commitments, specifically unfunded loan commitments and letters of credit, and any needed reserve is recorded in reserve for unfunded commitments ("RUC") on the Consolidated Balance Sheets. For periods beyond which we are able to develop reasonable and supportable forecasts, we revert to the historical loss rate on a straight-line basis over a twelve-month period.

For each of these loan segments, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speeds, PD rates, and LGD rates. The modeling of expected prepayment speeds is based on historical internal data. EAD is based on each instrument's underlying amortization schedule in order to estimate the bank's expected credit loss exposure at the time of the borrower's potential default.

During the three months ended March 31, 2024, management enhanced the cash flow model to incorporate three macroeconomic variables in addition to national unemployment. The four economic variables selected, national unemployment, which was the original variable used, Commercial Real Estate ("CRE") Price Index, House Price Index and Gross Domestic Product ("GDP"), are incorporated by utilizing a Loss Driver Analysis approach that factors in historical losses, including during the Great Recession, of regional peer banks and the Bank. The updated model incorporates a weighting of three economic scenarios; baseline, upside and downside. The scenarios cover the four economic forecast variables, with each segment of the portfolio linked to two of these variables, depending on the segment. The loss driver analysis is spread over a reasonable and supportable period of 18 months and reverts back to a historical loss rate over twelve months on a straight-line basis over the loan's remaining maturity. Management leverages economic projections from reputable and independent third parties to inform its loss driver forecasts over the forecast period.

The ACL also includes an amount for inherent risks not reflected in the historical analyses. Relevant factors include, but are not limited to, concentrations of credit risk, changes in underwriting standards, experience and depth of lending staff and trends in delinquencies.

While our methodology in establishing the ACL attributes portions of the ACL and RUC to the separate loan pools or segments, the entire ACL and RUC is available to absorb credit losses expected in the total loan portfolio and total amount of unfunded credit commitments, respectively. Portfolio segments are used to pool loans with similar risk characteristics and align with our methodology for measuring current expected credit losses ("CECL").

A summary of our primary portfolio segments is as follows:

Commercial. The commercial loan portfolio comprises lines of credit and term loans for working capital, equipment, and other business assets across a variety of industries. These loans are used for general corporate purposes including financing working capital, internal growth, and acquisitions; and are generally secured by accounts receivable, inventory, equipment and other assets of our clients' businesses.

Income producing - commercial real estate. Income producing commercial real estate loans comprise permanent and bridge financing provided to professional real estate owners/managers of commercial and residential real estate projects and properties who generally have a demonstrated record of past success with similar properties. Collateral properties include apartment buildings, office buildings, hotels, mixed-use buildings, retail, data centers, warehouse, and shopping centers. The primary source of repayment on these loans is generally expected to come from lease or operation of the real property collateral. Income producing commercial real estate loans are impacted by fluctuation in collateral values, as well as rental demand and rates.

Owner occupied – commercial real estate. The owner occupied commercial real estate portfolio comprises permanent financing provided to operating companies and their related entities for the purchase or refinance of real property wherein their business operates. Collateral properties include industrial property, office buildings, religious facilities, mixed-use property, health care and educational facilities.

Real estate mortgage – residential. Real estate mortgage residential loans comprise consumer mortgages for the purpose of purchasing or refinancing first lien real estate loans secured by primary-residence, second-home, and rental residential real property.

Construction – commercial and residential. The construction commercial and residential loan portfolio comprises loans made to builders and developers of commercial and residential property, for both renovation, new construction, and development projects. Collateral properties include apartment buildings, mixed use property, residential condominiums, single and 1-4 residential property, and office buildings. The primary source of repayment on these loans is expected to come from the sale, permanent financing, or lease of the real property collateral. Construction loans are impacted by fluctuations in collateral values and the ability of the borrower or ultimate purchaser to obtain permanent financing.

Construction – commercial and industrial ("C&I") (owner occupied). The construction C&I (owner occupied) portfolio comprises loans to operating companies and their related entities for new construction or renovation of the real or leased property in which they operate. Generally these loans contain provisions for conversion to an owner occupied commercial real estate loan or to a commercial loan after completion of construction. Collateral properties include industrial, healthcare, religious facilities, restaurants, and office buildings.

Home equity. The home equity portfolio comprises consumer lines of credit and loans secured by subordinate liens on residential real property.

Other consumer. The other consumer portfolio comprises consumer purpose loans not secured by real property, including personal lines of credit and loans, overdraft lines, and vehicle loans. This category also includes other loan items such as overdrawn deposit accounts as well as loans and loan payments in process.

We have several pass credit grades that are assigned to loans based on varying levels of risk, ranging from credits that are secured by cash or marketable securities, to watch credits which have all the characteristics of an acceptable credit risk but warrant more than the normal level of monitoring. Special mention loans are those that are currently protected by the sound worth and paying capacity of the borrower, but that are potentially weak and constitute an additional credit risk. These loans have the potential to deteriorate to a substandard grade due to the existence of financial or administrative deficiencies. Substandard loans have a well-defined weakness or weaknesses that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. Some substandard loans are inadequately protected by the sound worth and paying capacity of the borrower and of the collateral pledged and may be considered impaired. Substandard loans can be accruing or can be on nonaccrual depending on the circumstances of the individual loans.

Loans classified as doubtful have all the weaknesses inherent in substandard loans with the added characteristics that the weaknesses make collection in full highly questionable and improbable. The possibility of loss is extremely high. All doubtful loans are on nonaccrual.

Classified loans represent the sum of loans graded substandard and doubtful.

The methodology used in the estimation of the allowance, which is performed at least quarterly, is designed to be dynamic and responsive to changes in portfolio credit quality and forecasted economic conditions. Changes are reflected in the pool-basis allowance and individually assessed loans as the collectability of classified loans is evaluated with new information. As our portfolio has matured, historical loss ratios have been closely monitored. The review of the appropriateness of the allowance is performed by executive management and presented to management committees and the Audit Committee of the Board of Directors (the "Board"). The committees' reports to the Board are part of the Board review on a quarterly basis of our consolidated financial statements.

When management determines that foreclosure is probable, and for certain collateral-dependent loans where foreclosure is not considered probable, expected credit losses are based on the estimated fair value of the collateral adjusted for selling costs, when appropriate. A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral.

Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals and modifications unless management has a reasonable expectation that a borrower will result in financial difficulty.

We do not measure an ACL on accrued interest receivable balances because these balances are written off in a timely manner as a reduction to interest income when loans are placed on nonaccrual status.

Collateral Dependent Financial Assets

Loans that do not share risk characteristics are evaluated on an individual basis. For collateral dependent financial assets where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the net present value ("NPV") from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the fair value of the underlying collateral less estimated cost to sell. The ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the financial asset.

Loan Modifications to Borrowers in Financial Difficulty

The Company evaluates loan restructurings to determine if we have a loan modification and whether it results in a new loan or the continuation of the existing loan. Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows include situations where there are principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and combinations of the listed modifications.

A loan that is considered a modified loan may be subject to an individually-evaluated loan analysis if the commitment is $1.0 million or greater; otherwise, the restructured loan remains in the appropriate segment in the ACL model and associated provisions are adjusted based on changes in the discounted cash flows resulting from the modification of the restructured loan.

Management strives to identify borrowers in financial difficulty early and work with them to modify their loan to more affordable terms before their loan reaches nonaccrual status, foreclosure or repossession of the collateral to minimize economic loss to the Company.

Allowance for Credit Losses - Available-for-Sale Securities

For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either criterion is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an ACL is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income, as a non-credit-related impairment.

The entire amount of an impairment loss is recognized in earnings only when: (1) the Company intends to sell the security; (2) it is more likely than not that the Company will have to sell the security before recovery of its amortized cost basis; or (3) the Company does not expect to recover the entire amortized cost basis of the security. In all other situations, only the portion of the impairment loss representing the credit loss must be recognized in earnings, with the remaining portion being recognized in other comprehensive income, net of deferred taxes.

Changes in the ACL are recorded as a provision for or reversal of credit losses. Losses are charged against the allowance when management believes the uncollectibility of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

We have made a policy election to exclude accrued interest from the amortized cost basis of available-for-sale debt securities and report accrued interest separately in accrued interest and other assets in the Consolidated Balance Sheets. Available-for-sale debt securities are placed on nonaccrual status when we no longer expect to receive all contractual amounts due, which is generally at 90 days past due. Accrued interest receivable is reversed against interest income when a security is placed on nonaccrual status. Accordingly, we do not recognize an allowance for credit loss against accrued interest receivable.

Allowance for Credit Losses - Held-to-Maturity Debt Securities

The Company separately evaluates its HTM investment securities for any credit losses. The Company pools like securities and calculates expected credit losses through an estimate based on a security's credit rating, which is recognized as part of the ACL for held-to-maturity securities and included in the balance of investment securities held-to-maturity on the Consolidated Balance Sheets. If the Company determines that a security indicates evidence of deteriorated credit quality, the security is individually evaluated and a discounted cash flow analysis may be performed and compared to the amortized cost basis.

Loan Commitments and Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

Financial instruments include off-balance sheet credit instruments such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded.

The Company records a RUC on off-balance sheet credit exposures through a charge to provision for credit loss expense in the Company's Consolidated Statement of Operations.

The RUC on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur, and is included in the RUC on the Company's Consolidated Balance Sheets.

Goodwill Assessment

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Goodwill is subject to impairment testing, which must be conducted at least annually or upon the occurrence of a triggering event. Various factors, such as the Company’s results of operations, the trading price of the Company’s common stock relative to the book value per share, macroeconomic conditions and conditions in the banking sector, inform whether a triggering event for an interim goodwill impairment test has occurred. Goodwill is recorded and evaluated for impairment at its reporting unit, the Company. The Company's policy is to test goodwill for impairment annually as of December 31, or on an interim basis if an event triggering an impairment assessment is determined to have occurred.

Testing of goodwill impairment comprises a two-step process. First, the Company performs a qualitative assessment to evaluate relevant events or circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it is more likely than not that an impairment has occurred, it proceeds to the quantitative impairment test, whereby it calculates the fair value of the reporting unit and compares it with its carrying amount, including goodwill. In its performance of impairment testing, the Company has the unconditional option to proceed directly to the quantitative impairment test, bypassing the qualitative assessment. If the carrying amount of the reporting unit exceeds the fair value, the amount by which the carrying amount exceeds fair value, up to the carrying value of goodwill, is recorded through earnings as an impairment charge. If the results of the qualitative assessment indicate that it is not more likely than not that an impairment has occurred, or if the quantitative impairment test results in a fair value of the reporting unit that is greater than the carrying amount, then no impairment charge is recorded.

As part of its annual testing for goodwill impairment, the Company concluded that no impairment existed at December 31, 2023. Management has evaluated and will continue to evaluate economic conditions in interim periods for triggering events. As of the time of this report's filing, the Company did not identify any triggering events for interim testing. However, future events including a continuation of the recent trading price of the Company's common stock relative to the book value per share through the second quarter of 2024 could cause the Company to conclude that goodwill or other intangibles have become impaired, which would result in recording an impairment loss. Any resulting impairment loss could have a material adverse impact on the Company’s financial condition and results of operations, however, it would not impact our regulatory capital ratios, tangible common equity ratio, nor its liquidity position.

New Authoritative Accounting Guidance

Accounting Standards Pending Adoption

ASU No. 2023-06, "Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative" ("ASU 2023-06") incorporates into the Accounting Standards Codification ("ASC" or "Codification") several SEC disclosure requirements under Regulations S-K and S-X. The amendments in the ASU are intended to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations. These requirements are similar to, but require more information than, generally accepted accounting principles. The new updates modify the disclosure or presentation requirements of a variety of Topics in the Codification. Entities should apply the amendments in ASU 2023-06 prospectively. For entities subject to the SEC's existing disclosure requirements and for entities that have to file or provide financial statements with or to the SEC for the purpose of selling or issuing securities that do not have contractual limits on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. As a result, the effective date will be different for each individual disclosure based on the effective date of the SEC's deletion of the related disclosure. Early adoption is prohibited. For all other entities, the effective date will be two years later. Early adoption is permitted for these entities, but not before the provisions of the ASU become effective for entities subject to SEC's regulation. The effective dates of the amendments are predicated on the SEC removing its related disclosure requirements from its regulations. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. We are currently in the process of evaluating this guidance.

ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"). The ASU requires additional income tax disclosures around effective tax rates and cash income taxes paid. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024 and interim periods within those fiscal years. The impact of ASU 2023-09 should be applied prospectively. We are currently in the process of evaluating this guidance.

ASU No. 2024-01, "Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards" ("ASU 2024-01") clarifies how an entity determines whether a profits interest or similar award (hereafter a "profits interest award") is accounted for either (1) as a share-based payment arrangement, and therefore, within the scope of ASC 718 or (2) not a share-based payment arrangement and therefore within the scope of other guidance. ASU 2024-01 also improves the clarity and operation of the guidance in ASC 718-10-15-3. The guidance in ASU 2024-01 applies to all entities that issue profits interest awards as compensation to employees or non employees in exchange for goods or services. For public business entities, the amendments are effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2025, and interim periods within those annual periods. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. If an entity adopts the amendments in an interim period, it should adopt them as of the beginning of the annual period that includes that interim period. The amendments should be applied (i) retrospectively to all prior periods presented in the financial statements or (ii) prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies the amendments. If the amendments are applied prospectively, an entity is required to disclose the nature of and reason for the change in accounting principle. We are currently in the process of evaluating this guidance.

ASU No. 2024-02, "Codification Improvements—Amendments to Remove References to the Concepts Statements" ("ASU 2024-02") amends the Accounting Standard Codification (“Codification”) by removing references to various concepts statements. In most instances, the references are extraneous and not required to understand or apply the guidance. In other instances, the references were used in prior statements to provide guidance in certain topical areas. As stated in paragraph 105-10-05-3 of the Codification, FASB Concepts Statements are non authoritative. These amendments will simplify the Codification which will further draw a distinction between authoritative and non authoritative literature. The amendments are effective for public business entities for fiscal years beginning after December 15, 2024. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2025. Early application of the amendments is permitted for all entities, for any fiscal year or interim period for which financial statements have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments using one of the following transition methods: (i) prospectively to all new transactions recognized on or after the date that the entity first applies the amendments, or (ii) retrospectively to the beginning of the earliest comparative period presented in which the amendments were first applied. We are currently in the process of evaluating this guidance.

Accounting Standards Adopted in 2024:

ASU No. 2023-07,"Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." ("ASU 2023-07") requires filers to disclose significant segment expenses, an amount and description for other segment items, the title and position of the entity’s chief operating decision maker ("CODM") and an explanation of how the CODM uses the reported measures of profit or loss to assess segment performance, and, on an interim basis, certain segment related disclosures that previously were required only on an annual basis. ASU 2023-07 also clarifies that entities with a single reportable segment are subject to both new and existing segment reporting requirements and that an entity is permitted to disclose multiple measures of segment profit or loss, provided that certain criteria are met. ASU 2023-07 is effective for the Company for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Since early adoption is permitted, the Company adopted the guidance prescribed under ASU 2023-07 effective January 1, 2024. Adoption of this guidance did not have a material impact on our consolidated financial statements for fiscal year 2024.

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Cash and Due from Banks

3 Months Ended

Mar. 31, 2024

Cash and Cash Equivalents [Abstract]

Cash and Due from Banks

Cash and Due from Banks

For the three months ended March 31, 2024 and 2023, the Bank maintained an average daily balance at the Federal Reserve Bank of $1.9 billion and $662.4 million, respectively, on which interest is paid.

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

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Investment Securities

3 Months Ended

Mar. 31, 2024

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

The amortized cost and estimated fair value of the Company's available-for-sale and held-to-maturity securities are summarized as follows:

(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
March 31, 2024
Investment securities available-for-sale:
U.S. treasury bonds	$	49,919	$	—	$	(1,686)	$	—	$	48,233
U.S. agency securities	698,189		—		(58,863)		—		639,326
Residential mortgage-backed securities	800,793		23		(102,266)		—		698,550
Commercial mortgage-backed securities	54,018		—		(5,080)		—		48,938
Municipal bonds	8,740		—		(434)		—		8,306
Corporate bonds	2,000		—		(302)		(17)		1,681
Total available-for-sale securities	$	1,613,659	$	23	$	(168,631)	$	(17)	$	1,445,034

(dollars in thousands)	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Estimated Fair Value
March 31, 2024
Investment securities held-to-maturity:
Residential mortgage-backed securities	$	655,388	$	—	$	(87,348)	$	568,040
Commercial mortgage-backed securities	89,966		—		(13,000)		76,966
Municipal bonds	125,003		—		(9,789)		115,214
Corporate bonds	132,332		—		(14,393)		117,939
Total	$	1,002,689	$	—	$	(124,530)	$	878,159
Allowance for credit losses	(1,957)
Total held-to-maturity securities, net of ACL	$	1,000,732

(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
December 31, 2023
Investment securities available-for-sale:
U.S. treasury bonds	$	49,894	$	—	$	(1,993)	$	—	$	47,901
U.S. agency securities	729,090		—		(57,693)		—		671,397
Residential mortgage-backed securities	823,992		45		(96,684)		—		727,353
Commercial mortgage-backed securities	54,557		—		(4,993)		—		49,564
Municipal bonds	8,783		—		(293)		—		8,490
Corporate bonds	2,000		—		(300)		(17)		1,683
Total available-for-sale securities	$	1,668,316	$	45	$	(161,956)	$	(17)	$	1,506,388

(dollars in thousands)	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Estimated Fair Value
December 31, 2023
Investment securities held-to-maturity:
Residential mortgage-backed securities	$	670,043	$	—	$	(79,980)	$	590,063
Commercial mortgage-backed securities	90,227		—		(12,867)		77,360
Municipal bonds	125,114		5		(8,540)		116,579
Corporate bonds	132,309		—		(14,729)		117,580
Total	$	1,017,693	$	5	$	(116,116)	$	901,582
Allowance for credit losses	(1,956)
Total held-to-maturity securities, net of ACL	$	1,015,737

At March 31, 2024 and December 31, 2023, the Company held $54.7 million and $25.7 million, respectively, of equity securities in a combination of Federal Reserve System ("Federal Reserve Board," "Federal Reserve" or "FRB") and FHLB stocks, which are required to be held for regulatory purposes. The securities are not marketable, and therefore are carried at cost; they are classified as restricted securities, and periodically evaluated for impairment based on ultimate recovery of par value.

At March 31, 2024 and December 31, 2023, the Company had $50.0 million and $51.7 million, respectively, of unamortized unrealized losses outstanding following the transfer of investment securities from available-for-sale to held-to-maturity in 2022. These unrealized losses are included in accumulated other comprehensive loss and are amortized through interest income as a yield adjustment over the remaining term of the securities.

Accrued interest receivable on investment securities totaled $7.8 million and $7.6 million at March 31, 2024 and December 31, 2023, respectively. The accrued interest receivable is excluded from the amortized cost of the securities and is reported in other assets in the Consolidated Balance Sheets.

The following tables summarize available-for-sale and held-to-maturity securities in an unrealized loss position by length of time:

		Less Than 12 Months				12 Months or Greater				Total
(dollars in thousands)	Number of Securities	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
March 31, 2024
Investment securities available-for-sale:
U.S. treasury bonds	2	$	—	$	—	$	48,233	$	(1,686)	$	48,233	$	(1,686)
U. S. agency securities	76	2,904		(5)		636,422		(58,858)		639,326		(58,863)
Residential mortgage-backed securities	151	8,180		(60)		688,525		(102,206)		696,705		(102,266)
Commercial mortgage-backed securities	13	—		—		48,938		(5,080)		48,938		(5,080)
Municipal bonds	1	—		—		8,306		(434)		8,306		(434)
Corporate bonds	1	—		—		1,681		(302)		1,681		(302)
Total	244	$	11,084	$	(65)	$	1,432,105	$	(168,566)	$	1,443,189	$	(168,631)

		Less Than 12 Months				12 Months or Greater				Total
(dollars in thousands)	Number of Securities	Estimated Fair Value		Unrecognized Losses		Estimated Fair Value		Unrecognized Losses		Estimated Fair Value		Unrecognized Losses
March 31, 2024
Investment securities held-to-maturity:
Residential mortgage-backed securities	142	$	—	$	—	$	568,040	$	(87,348)	$	568,040	$	(87,348)
Commercial mortgage-backed securities	16	—		—		76,966		(13,000)		76,966		(13,000)
Municipal bonds	42	3,474		(63)		111,740		(9,726)		115,214		(9,789)
Corporate bonds	30	—		—		105,887		(14,393)		105,887		(14,393)
Total	230	$	3,474	$	(63)	$	862,633	$	(124,467)	$	866,107	$	(124,530)

		Less Than 12 Months				12 Months or Greater				Total
(dollars in thousands)	Number of Securities	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
December 31, 2023
Investment securities available-for-sale:
U.S. treasury bonds	2	$	—	$	—	$	47,901	$	(1,993)	$	47,901	$	(1,993)
U. S. agency securities	78	3,084		(4)		668,313		(57,689)		671,397		(57,693)
Residential mortgage-backed securities	149	—		—		718,042		(96,684)		718,042		(96,684)
Commercial mortgage-backed securities	13	—		—		49,564		(4,993)		49,564		(4,993)
Municipal bonds	1	—		—		8,490		(293)		8,490		(293)
Corporate bonds	1	—		—		1,683		(300)		1,683		(300)
Total	244	$	3,084	$	(4)	$	1,493,993	$	(161,952)	$	1,497,077	$	(161,956)

		Less Than 12 Months				12 Months or Greater				Total
(dollars in thousands)	Number of Securities	Estimated Fair Value		Unrecognized Losses		Estimated Fair Value		Unrecognized Losses		Estimated Fair Value		Unrecognized Losses
December 31, 2023
Investment securities held-to-maturity:
Residential mortgage-backed securities	142	$	—	$	—	$	590,063	$	(79,980)	$	590,063	$	(79,980)
Commercial mortgage-backed securities	16	—		—		77,360		(12,867)		77,360		(12,867)
Municipal bonds	40	—		—		113,031		(8,540)		113,031		(8,540)
Corporate bonds	30	—		—		105,523		(14,729)		105,523		(14,729)
Total	228	$	—	$	—	$	885,977	$	(116,116)	$	885,977	$	(116,116)

Unrealized losses at March 31, 2024 were generally attributable to changes in market interest rates and interest spread relationships subsequent to the dates the securities were originally purchased and were considered to be temporary, and not due to credit quality concerns on the investment securities. The fair values of these securities are expected to recover as the securities approach their respective maturity dates. The Company does not intend to sell and it is likely that it will not be required to sell the securities prior to their anticipated recovery.

The Company measures its AFS and HTM security portfolios for current expected credit losses as part of its ACL analysis. During the three months ended March 31, 2024 and 2023, the Company recorded a provision for credit losses on its held-to-maturity portfolio of $1 thousand and $1.2 million, respectively. During the three months ended March 31, 2023, the Company recorded a provision for credit losses on its available-for-sale portfolio of $14 thousand. No provision was recorded for its available-for-sale security portfolio during the three months ended March 31, 2024. At March 31, 2024 and December 31, 2023, the Company had a total allowance of $17 thousand on its available-for-sale securities and $2.0 million on its held-to-maturity securities, each of which primarily comprise allowances for corporate bonds.

The following table summarizes the Company's investment securities available-for-sale and investment securities held-to-maturity by contractual maturity. Expected maturities for mortgage-backed securities ("MBS") will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	March 31, 2024
(dollars in thousands)	Amortized Cost		Estimated Fair Value
Investment securities available-for-sale:
Within one year	$	139,224	$	135,426
One to five years	486,394		446,955
Five to ten years	112,838		97,570
Beyond ten years	20,392		17,612
Residential mortgage-backed securities	800,793		698,550
Commercial mortgage-backed securities	54,018		48,938
Less: allowance for credit losses	—		(17)
Total investment securities available-for-sale	1,613,659		1,445,034
Investment securities held-to-maturity:
Within one year	4,282		4,247
One to five years	61,707		59,309
Five to ten years	117,237		102,274
Beyond ten years	74,109		67,323
Residential mortgage-backed securities:	655,388		568,040
Commercial mortgage-backed securities	89,966		76,966
Less: allowance for credit losses	(1,957)		—
Total investment securities held-to-maturity	1,000,732		878,159
Total	$	2,614,391	$	2,323,193

For the three months ended March 31, 2024 and 2023, gross realized gains on calls of investment securities were $4 thousand and $5 thousand, respectively.

There were no gross realized losses on sales or calls of investment securities during the three months ended March 31, 2024. During the three months ended March 31, 2023, there were $26 thousand of gross realized losses on sales or calls of investment securities.

Gross sales and call proceeds were $27.1 million and $8.4 million for the three months ended March 31, 2024 and 2023, respectively.

The book value of securities pledged as collateral for certain government deposits, securities sold under agreements to repurchase, and certain lines of credit with correspondent banks at March 31, 2024 and December 31, 2023 was $2.1 billion, which were well in excess of required amounts in order to operationally provide significant reserve amounts for new business. As of March 31, 2024 and December 31, 2023, there were no holdings of securities of any one issuer, other than the U.S. Government and U.S. agency securities, which exceeded ten percent of shareholders' equity.

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Loans and Allowance for Credit Losses

3 Months Ended

Mar. 31, 2024

Receivables [Abstract]

Loans and Allowance for Credit Losses

Loans and Allowance for Credit Losses

The Bank makes loans to customers primarily in the Washington, D.C. metropolitan area and surrounding communities. A substantial portion of the Bank's loan portfolio consists of loans to businesses secured by real estate and other business assets.

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

	March 31, 2024				December 31, 2023
(dollars in thousands, except amounts in the footnote)	Amount		%		Amount		%
Commercial	$	1,408,767	18	%	$	1,473,766	18	%
PPP loans	467		—	%	528		—	%
Income-producing - commercial real estate	4,040,655		50	%	4,094,614		51	%
Owner-occupied - commercial real estate	1,185,582		15	%	1,172,239		15	%
Real estate mortgage - residential	72,087		1	%	73,396		1	%
Construction - commercial and residential	1,082,556		13	%	969,766		12	%
Construction - C&I (owner-occupied)	138,379		2	%	132,021		2	%
Home equity	53,251		1	%	51,964		1	%
Other consumer	958		—	%	401		—	%
Total loans	7,982,702		100	%	7,968,695		100	%
Less: allowance for credit losses	(99,684)				(85,940)
Net loans (1)	$	7,883,018			$	7,882,755

(1)Excludes accrued interest receivable of $46.3 million and $45.3 million at March 31, 2024 and December 31, 2023, respectively, which were recorded in other assets on the Consolidated Balance Sheets.

Unamortized net deferred fees and costs amounted to $24.1 million and $27.0 million at March 31, 2024 and December 31, 2023, respectively.

As of March 31, 2024 and December 31, 2023, the Bank serviced $334.1 million and $328.0 million, respectively, of multifamily FHA loans, SBA loans and other loan participations that are not reflected as loan balances on the Consolidated Balance Sheets.

Real estate loans are secured primarily by duly recorded first deeds of trust or mortgages. In some cases, the Bank may accept a recorded junior trust position. In general, borrowers will have a proven ability to build, lease, manage and/or sell a commercial or residential project and demonstrate satisfactory financial condition. Additionally, an equity contribution toward the project is customarily required.

Construction loans require that the financial condition and experience of the general contractor and major subcontractors be satisfactory to the Bank. Guaranteed, fixed-price contracts are required whenever appropriate, along with payment and performance bonds or completion bonds for larger scale projects.

Loans intended for residential land acquisition, lot development and construction are made on the premise that the land: 1) is or will be developed for building sites for residential structures, and 2) will ultimately be utilized for construction or improvement of residential zoned real properties, including the creation of housing. Residential development and construction loans will finance projects such as single family subdivisions, planned unit developments, townhouses, and condominiums. Residential land acquisition, development and construction loans generally are underwritten with a maximum term of 36 months, including extensions approved at origination.

Commercial land acquisition and construction loans are secured by real property where loan funds will be used to acquire land and to construct or improve appropriately zoned real property for the creation of income producing or owner occupied commercial properties. Borrowers are generally required to put equity into each project at levels determined by the appropriate approval authority. Commercial land acquisition and construction loans generally are underwritten with a maximum term of 24 months.

Substantially all construction draw requests must be presented in writing on American Institute of Architects documents and certified either by the contractor, the borrower and/or the borrower's architect. Each draw request shall also include the borrower's soft cost breakdown certified by the borrower or their agent. Prior to an advance, the Bank or its contractor inspects the project to determine that the work has been completed, to justify the draw requisition.

Commercial permanent loans are generally secured by improved real property that is generating income in the normal course of operation. Debt service coverage, assuming stabilized occupancy, must be satisfactory to support a permanent loan. The debt service coverage ratio is ordinarily at least 1.15 to 1.0. As part of the underwriting process, debt service coverage ratios are stress tested assuming a 200 basis point increase in interest rates from their current levels.

Commercial permanent loans generally are underwritten with a term not greater than 10 years or the remaining useful life of the property, whichever is lower. The preferred term is between 5 to 7 years, with amortization to a maximum of 25 years.

The Company's loan portfolio includes acquisition, development and construction ("ADC") real estate loans including both investment and owner-occupied projects. ADC loans amounted to $1.6 billion at March 31, 2024. A portion of the ADC portfolio, both speculative and non-speculative, includes loan-funded interest reserves at origination. ADC loans that provide for the use of interest reserves represent approximately 58.5% of the outstanding ADC loan portfolio at March 31, 2024. The decision to establish a loan-funded interest reserve is made upon origination of the ADC loan and is based upon a number of factors considered during underwriting of the credit, including: (1) the feasibility of the project; (2) the experience of the sponsor; (3) the creditworthiness of the borrower and guarantors; (4) the borrower equity contribution; and (5) the level of collateral protection. When appropriate, an interest reserve provides a means of addressing the cash flow characteristics of a properly underwritten ADC loan. The Company does not significantly utilize interest reserves in other loan products. The Company recognizes that one of the risks inherent in the use of interest reserves is the potential masking of underlying problems with the project and/or the borrower's ability to repay the loan. In order to mitigate these inherent risks, the Company employs a series of reporting and monitoring mechanisms on all ADC loans, whether or not an interest reserve is provided, including: (1) construction and development timelines that are monitored on an ongoing basis and track the progress of a given project to the timeline projected at origination; (2) a construction loan administration department independent of the lending function; (3) third party independent construction loan inspection reports; (4) monthly interest reserve monitoring reports detailing the balance of the interest reserves approved at origination and the days of interest carry represented by the reserve balances as compared to the then current anticipated time to completion and/or sale of speculative projects; and (5) quarterly commercial real estate construction meetings among senior Company management, which include monitoring of current and projected real estate market conditions. If a project has not performed as expected, it is not the customary practice of the Company to increase loan funded interest reserves.

The following table details activity in the ACL by portfolio segment for the three months ended March 31, 2024 and 2023. PPP loans are excluded from these tables since they do not carry an allowance for credit loss, as these loans are fully guaranteed as to principal and interest by the SBA, whose guarantee is backed by the full faith and credit of the U.S. Government. Allocation of a portion of the allowance to one category of loans does not restrict the use of the allowance to absorb losses in other categories.

(dollars in thousands)	Commercial		Income-Producing Commercial Real Estate		Owner-Occupied -Commercial Real Estate		Real Estate Mortgage Residential		Construction - Commercial and Residential		Construction - C&I (Owner-Occupied)		Home Equity		Other Consumer		Total
Three Months Ended March 31, 2024
Allowance for credit losses:
Balance at beginning of period	$	17,824	$	40,050	$	14,333	$	861	$	10,198	$	1,992	$	657	$	25	$	85,940
Loans charged-off	(496)		(20,943)		—		—		(129)		—		—		(1)		(21,569)
Recoveries of loans previously charged-off	115		—		24		—		—		—		—		—		139
Net loans (charged-off) recovered	(381)		(20,943)		24		—		(129)		—		—		(1)		(21,430)
Provision for (reversal of) credit losses	6,239		26,830		(820)		32		2,989		(63)		(39)		6		35,174
Ending balance	$	23,682	$	45,937	$	13,537	$	893	$	13,058	$	1,929	$	618	$	30	$	99,684
Three Months Ended March 31, 2023
Allowance for credit losses:
Balance at beginning of period	$	15,655	$	35,688	$	12,702	$	969	$	7,195	$	1,606	$	555	$	74	$	74,444
Loans charged-off	(868)		—		—		—		(136)		—		—		(50)		(1,054)
Recoveries of loans previously charged-off	76		—		—		—		—		—		—		3		79
Net loans (charged-off) recovered	(792)		—		—		—		(136)		—		—		(47)		(975)
Provision for (reversal of) credit losses	912		2,452		(245)		33		1,682		36		38		—		4,908
Ending balance	$	15,775	$	38,140	$	12,457	$	1,002	$	8,741	$	1,642	$	593	$	27	$	78,377

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

	March 31, 2024				December 31, 2023
	Business/Other				Business/Other
(dollars in thousands)	Assets		Real Estate		Assets		Real Estate
Commercial	$	1,532	$	1,218	$	1,674	$	1,240
Income-producing - commercial real estate	878		66,724		1,754		39,172
Owner-occupied - commercial real estate	—		19,798		—		19,836
Real estate mortgage - residential	—		1,692		—		1,692
Construction - commercial and residential	—		—		—		525
Home equity	—		237		—		242
Total	$	2,410	$	89,669	$	3,428	$	62,707

Credit Quality Indicators

The Company uses several credit quality indicators to manage credit risk in an ongoing manner. The Company's primary credit quality indicators inform an internal credit risk rating system that categorizes loans into pass, watch, special mention, or classified categories. Credit risk ratings are applied individually to those classes of loans that have significant or unique credit characteristics that benefit from a case-by-case evaluation. These are typically loans to businesses or individuals in the classes that comprise the commercial portfolio segment. Groups of loans that are underwritten and structured using standardized criteria and characteristics, such as statistical models (e.g., credit scoring or payment performance), are typically risk rated and monitored collectively. These are typically loans to individuals in the classes that comprise the consumer portfolio segment.

The following are the definitions of the Company's credit quality indicators:

Pass:	Loans in all classes that comprise the commercial and consumer portfolio segments that are not adversely rated, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan agreement. Management believes that there is a low likelihood of loss related to those loans that are considered pass.
Special Mention:	Loans in the classes that comprise the commercial portfolio segment that have potential weaknesses that deserve management's close attention. If not addressed, these potential weaknesses may result in deterioration of the repayment prospects for the loan. The special mention credit quality indicator is not used for classes of loans that comprise the consumer portfolio segment. Management believes that there is a moderate likelihood of some loss related to those loans that are considered special mention.
Classified:	Classified (a) Substandard – Loans inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the company will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard loans, does not have to exist in individual loans classified substandard.
	Classified (b) Doubtful – Loans that have all the weaknesses inherent in a loan classified substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors, which may work to the advantage and strengthening of the assets, its classification as an estimated loss is deferred until its more exact status may be determined.

The Company's credit quality indicators are generally updated annually, however, credits rated "Special Mention" or below are reviewed more frequently. Based on the most recent analysis performed, the amortized cost basis of loans by risk category, class and year of origination, along with any charge-offs that were recorded in the applicable loan segment, if applicable, were as follows:

(dollars in thousands)	Prior		2020		2021		2022		2023		2024		Revolving Loans Amort. Cost Basis		Revolving Loans Convert. to Term		Total
March 31, 2024
Commercial
Pass	$	193,755	$	35,451	$	174,103	$	141,181	$	187,057	$	24,604	$	569,226	$	1,154	$	1,326,531
Special Mention	8,493		—		—		—		—		—		4,286		8,058		20,837
Substandard	13,771		9,371		1,538		281		—		—		36,438		—		61,399
Total	216,019		44,822		175,641		141,462		187,057		24,604		609,950		9,212		1,408,767
YTD gross charge-offs	(396)		—		—		—		—		—		(100)		—		(496)
PPP loans
Pass	—		—		467		—		—		—		—		—		467
Income producing - commercial real estate
Pass	1,452,244		308,573		559,404		755,375		299,264		26,251		243,343		19,359		3,663,813
Special Mention	170,118		6,744		—		—		—		—		—		—		176,862
Substandard	199,980		—		—		—		—		—		—		—		199,980
Total	1,822,342		315,317		559,404		755,375		299,264		26,251		243,343		19,359		4,040,655
YTD gross charge-offs	(20,943)		—		—		—		—		—		—		—		(20,943)
Owner occupied - commercial real estate
Pass	628,063		34,703		222,361		41,514		126,663		4,590		515		—		1,058,409
Special Mention	61,117		—		—		—		—		—		—		—		61,117
Substandard	64,791		1,265		—		—		—		—		—		—		66,056
Total	753,971		35,968		222,361		41,514		126,663		4,590		515		—		1,185,582
Real estate mortgage - residential
Pass	29,496		2,175		15,668		14,689		5,889		—		—		—		67,917
Substandard	4,170		—		—		—		—		—		—		—		4,170
Total	33,666		2,175		15,668		14,689		5,889		—		—		—		72,087
Construction - commercial and residential
Pass	77,388		11,101		241,373		485,461		89,757		3,874		136,092		1,177		1,046,223
Special Mention	6,532		—		—		—		—		—		—		—		6,532
Substandard	—		29,801		—		—		—		—		—		—		29,801
Total	83,920		40,902		241,373		485,461		89,757		3,874		136,092		1,177		1,082,556
YTD gross charge-offs	(129)		—		—		—		—		—		—		—		(129)
Construction - C&I (owner occupied)
Pass	26,151		56,094		615		33,242		15,084		—		7,193		—		138,379
Home equity
Pass	1,758		86		185		117		—		—		50,589		146		52,881
Substandard	71		—		237		—		—		—		62		—		370
Total	1,829		86		422		117		—		—		50,651		146		53,251
Other consumer
Pass	2		—		—		—		—		—		956		—		958
Total	2		—		—		—		—		—		956		—		958
YTD gross charge-offs	—		—		—		—		—		—		—		(1)		(1)
Total recorded investment	$	2,937,900	$	495,364	$	1,215,951	$	1,471,860	$	723,714	$	59,319	$	1,048,700	$	29,894	$	7,982,702
Total YTD gross charge-offs	$	(21,468)	$	—	$	—	$	—	$	—	$	—	$	(100)	$	(1)	$	(21,569)
(dollars in thousands)	Prior		2019		2020		2021		2022		2023		Revolving Loans Amort. Cost Basis		Revolving Loans Convert. to Term		Total
December 31, 2023
Commercial
Pass	$	157,563	$	48,524	$	39,133	$	194,555	$	149,320	$	191,889	$	623,684	$	5,207	$	1,409,875
Special Mention	1,415		—		—		—		—		—		2,259		—		3,674
Substandard	13,797		58		10,337		1,509		222		—		33,670		624		60,217
Total	172,775		48,582		49,470		196,064		149,542		191,889		659,613		5,831		1,473,766
YTD gross charge-offs	(885)		—		—		—		—		—		—		(1,135)		(2,020)
PPP loans
Pass	—		—		—		528		—		—		—		—		528
Income producing - commercial real estate
Pass	1,257,937		326,999		328,743		517,957		732,291		327,126		263,317		1,845		3,756,215
Special Mention	84,585		44,424		6,740		—		—		—		—		—		135,749
Substandard	139,961		62,689		—		—		—		—		—		—		202,650
Total	1,482,483		434,112		335,483		517,957		732,291		327,126		263,317		1,845		4,094,614
YTD gross charge-offs	(11,817)		—		—		—		—		—		—		—		(11,817)
Owner occupied - commercial real estate
Pass	534,525		103,034		35,385		202,776		41,907		125,934		673		55		1,044,289
Special Mention	54,288		13,348		—		—		—		—		—		—		67,636
Substandard	37,167		—		1,274		—		—		—		—		21,873		60,314
Total	625,980		116,382		36,659		202,776		41,907		125,934		673		21,928		1,172,239
Real estate mortgage - residential
Pass	22,877		7,545		2,186		15,967		14,756		5,895		—		—		69,226
Substandard	4,170		—		—		—		—		—		—		—		4,170
Total	27,047		7,545		2,186		15,967		14,756		5,895		—		—		73,396
Construction - commercial and residential
Pass	30,619		3,440		45,739		251,038		419,393		87,400		124,013		—		961,642
Substandard	8,124		—		—		—		—		—		—		—		8,124
Total	38,743		3,440		45,739		251,038		419,393		87,400		124,013		—		969,766
YTD Gross Charge-offs	(136)		(5,500)		—		—		—		—		—		—		(5,636)
Construction - C&I (owner occupied)
Pass	18,551		4,265		56,361		618		33,237		12,619		6,370		—		132,021
Home equity
Pass	1,590		—		87		151		118		—		49,035		643		51,624
Substandard	—		36		—		—		—		—		62		242		340
Total	1,590		36		87		151		118		—		49,097		885		51,964
Other consumer
Pass	1		—		—		—		46		—		354		—		401
Total	1		—		—		—		46		—		354		—		401
YTD gross charge-offs	(50)		—		—		—		—		—		—		—		(50)
Total recorded investment	$	2,367,170	$	614,362	$	525,985	$	1,185,099	$	1,391,290	$	750,863	$	1,103,437	$	30,489	$	7,968,695
Total YTD gross charge-offs	$	(12,888)	$	(5,500)	$	—	$	—	$	—	$	—	$	—	$	(1,135)	$	(19,523)

Nonaccrual and Past Due Loans

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

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

(dollars in thousands, except amounts in footnotes)	Nonaccrual with No Allowance for Credit Losses		Nonaccrual with an Allowance for Credit Losses		Total Nonaccrual Loans
March 31, 2024
Commercial	$	1,045	$	875	$	1,920
Income producing - commercial real estate	67,602		—		67,602
Owner occupied - commercial real estate	19,798		—		19,798
Real estate mortgage - residential	—		1,934		1,934
Home equity	237		—		237
Total (1)	$	88,682	$	2,809	$	91,491
December 31, 2023
Commercial	$	1,002	$	1,047	$	2,049
Income producing - commercial real estate	40,926		—		40,926
Owner occupied - commercial real estate	19,836		—		19,836
Real estate mortgage - residential	—		1,946		1,946
Construction - commercial and residential	—		525		525
Home equity	242		—		242
Total (1)	$	62,006	$	3,518	$	65,524

(1)Gross coupon interest income of approximately $1.3 million and $182 thousand would have been recorded for the three months ended March 31, 2024 and 2023, respectively, if nonaccrual loans shown above had been current and in accordance with their original terms, while no coupon interest income was actually recorded on such loans for the three months ended March 31, 2024 and 2023, respectively.

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

(dollars in thousands)	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 Days or More Past Due		Total Past Due Loans		Current Loans		Nonaccrual Loans		Total Recorded Investment in Loans
March 31, 2024
Commercial	$	11,175	$	—	$	—	$	11,175	$	1,395,672	$	1,920	$	1,408,767
PPP loans	—		—		—		—		467		—		467
Income producing - commercial real estate	11,106		—		—		11,106		3,961,947		67,602		4,040,655
Owner occupied - commercial real estate	—		—		—		—		1,165,784		19,798		1,185,582
Real estate mortgage - residential	199		—		—		199		69,954		1,934		72,087
Construction - commercial and residential	8,590		—		—		8,590		1,073,966		—		1,082,556
Construction - C&I (owner occupied)	—		—		—		—		138,379		—		138,379
Home equity	—		36		—		36		52,978		237		53,251
Other consumer	2		—		—		2		956		—		958
Total	$	31,072	$	36	$	—	$	31,108	$	7,860,103	$	91,491	$	7,982,702
December 31, 2023
Commercial	$	985	$	7,048	$	—	$	8,033	$	1,463,684	$	2,049	$	1,473,766
PPP loans	—		—		—		—		528		—		528
Income producing - commercial real estate	—		—		—		—		4,053,688		40,926		4,094,614
Owner occupied - commercial real estate	1,274		—		—		1,274		1,151,129		19,836		1,172,239
Real estate mortgage – residential	2,089		—		—		2,089		69,361		1,946		73,396
Construction - commercial and residential	2,056		—		—		2,056		967,185		525		969,766
Construction - C&I (owner occupied)	—		—		—		—		132,021		—		132,021
Home equity	197		—		—		197		51,525		242		51,964
Other consumer	—		—		—		—		401		—		401
Total	$	6,601	$	7,048	$	—	$	13,649	$	7,889,522	$	65,524	$	7,968,695

Loan Modifications for Borrowers Experiencing Financial Difficulty

The Company evaluates all loan restructurings according to the accounting guidance for loan modifications to determine if the restructuring results in a new loan or a continuation of the existing loan. Loan modifications to borrowers experiencing financial difficulties that result in a direct change in the timing or amount of contractual cash flows include situations where there is principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and combinations of the listed modifications. Therefore, the disclosures related to loan restructurings are for modifications which have a direct impact on cash flows.

The Company may offer various types of modifications when restructuring a loan. Commercial and industrial loans modified in a loan restructuring often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor is often requested.

Commercial mortgage and construction loans modified in a loan restructuring often involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Construction loans modified in a loan restructuring may also involve extending the interest-only payment period.

Loans modified in a loan restructuring for the Company may have the financial effect of increasing the specific allowance associated with the loan. An allowance for consumer and commercial loans that have been modified in a loan restructuring is measured based on the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's observable market price, or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent. Management exercises significant judgment in developing these estimates.

Commercial and consumer loans modified in a loan restructuring are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a loan restructuring subsequently default, the Company evaluates the loan for possible further loss. The allowance may be increased, adjustments may be made in the allocation of the allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan.

The following tables present the amortized cost basis as of March 31, 2024 and 2023 and the financial effect of loans modified to borrowers experiencing financial difficulty during the three months ended March 31, 2024 and 2023:

	March 31, 2024
(dollars in thousands)	Term Extension		Combination - Term Extension and Principal Payment Delay		Total		Percentage of Total Loan Type		Weighted Average Term and Principal Payment Extension
Three months ended March 31, 2024:
Commercial	$	31,553	$	—	$	31,553	2.2	%	4 months
Income producing - commercial real estate	—		50,926		50,926		1.3	%	3 months
Real estate mortgage - residential	—		2,478		2,478		3.4	%	6 months
Total	$	31,553	$	53,404	$	84,957
	March 31, 2023
(dollars in thousands)	Term Extension		Combination - Term Extension and Principal Payment Delay		Total		Percentage of Total Loan Type		Weighted Average Term and Principal Payment Extension
Three months ended March 31, 2023:
Commercial	$	21,744	$	—	$	21,744	1.5	%	3 months
Income producing - commercial real estate	7,211		60,139		67,350		1.7	%	4 months
Owner occupied - commercial real estate	—		19,170		19,170		1.8	%	3 months
Total	$	28,955	$	79,309	$	108,264

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

	March 31, 2024
	Payment Status (Amortized Cost Basis)
(dollars in thousands)	Current		30-89 Days Past Due		Nonaccrual
Commercial	$	37,308	$	1,467	$	—
Income producing - commercial real estate	104,463		—		66,136
Owner occupied - commercial real estate	—		—		19,127
Real estate mortgage - residential	2,478		—		—
Construction - commercial and residential	—		6,532		—
Total	$	144,249	$	7,999	$	85,263

The Company monitors loan payments on performing and nonperforming loans on an on-going basis to determine if a loan is considered to have a payment default. To determine the existence of a payment default, the Company analyzes the economic conditions that exist for each borrower and their ability to generate positive cash flow during a given loan's term.

The following table presents the amortized cost basis of loans that were experiencing payment default at March 31, 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty:

	March 31, 2024
	Amortized Cost Basis
(dollars in thousands)	Term Extension		Combination - Term Extension and Principal Payment Delay		Combination - Term Extension, Principal Payment Delay and Interest Rate Reduction
Commercial	$	—	$	1,467	$	—
Income producing - commercial real estate	—		—		66,136
Owner occupied - commercial real estate	—		19,127		—
Construction - commercial and residential	6,532		—		—
Total	$	6,532	$	20,594	$	66,136

The Company individually evaluates nonaccrual loans when performing its CECL estimate to calculate the ACL. Additionally, the Company utilizes historical internal and third-party service provider sourced loss data in the determination of its PD/LGD rates applied in the calculation of its CECL estimate. Upon determination that a modified loan (or a portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is charged off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the ACL is adjusted by the same amount.

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Leases

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Leases

Leases

The Company accounts for leases in accordance with ASC Topic 842. A lease is defined as a contract that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Substantially all of the leases in which the Company is the lessee comprise real estate property for branch offices, ATM locations, and corporate office space. Substantially all of our leases are classified as operating leases, and are included in operating lease right-of-use ("ROU") assets and operating lease liabilities in the Consolidated Balance Sheets.

As of March 31, 2024 and December 31, 2023, the Company had $17.7 million and $19.1 million of operating lease ROU assets, respectively, and $21.6 million and $23.2 million of operating lease liabilities, respectively, on the Company's Consolidated Balance Sheets. The Company elects not to recognize ROU assets and lease liabilities arising from short-term leases, leases with initial terms of twelve months or less, or equipment leases (deemed immaterial) on the Consolidated Balance Sheets.

The leases contain options to extend or terminate the lease, which are recognized as part of the ROU assets and lease liabilities when an economic benefit to exercise the option exists and there is a 90% probability that the Company will exercise the option. If these criteria are not met, the options are not included in ROU assets and lease liabilities.

As of March 31, 2024, the Company's leases do not contain material residual value guarantees or impose restrictions or covenants related to dividends or its ability to incur additional financial obligations. During the three months ended March 31, 2024, the Company did not enter into new leases nor renew or extend any leases. The Company had no leases expire during that period; however, one lease expired in April 2024.

The following table presents lease costs and other lease information.

	Three Months Ended
(dollars in thousands)	March 31, 2024				March 31, 2023
Lease cost
Operating lease cost (cost resulting from lease payments)	$	1,601			$	1,716
Variable lease cost (cost excluded from lease payments)	241				256
Sublease income	(30)				(30)
Net lease cost	$	1,812			$	1,942
Operating lease - operating cash flows (fixed payments)	$	1,778			$	1,859
(dollars in thousands)	March 31, 2024				December 31, 2023
Right-of-use assets - operating leases	$	17,679			$	19,129
Operating lease liabilities	$	21,611			$	23,238
Weighted average lease term - operating leases	4.81			yrs	4.93			yrs
Weighted average discount rate - operating leases	2.73		%		2.78		%

Future minimum payments for operating leases with initial or remaining terms of more than one year as of March 31, 2024 were as follows:

(dollars in thousands)
Twelve months ended:
March 31, 2025	$	5,147
March 31, 2026	6,078
March 31, 2027	2,988
March 31, 2028	2,599
March 31, 2029	2,176
Thereafter	3,751
Total future minimum lease payments	22,739
Amounts representing interest	(1,128)
Present value of net future minimum lease payments	$	21,611

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Derivatives

3 Months Ended

Mar. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities through the use of derivative financial instruments.

Cash Flow Hedges of Interest Rate Risk

The Company historically utilized interest rate swaptions, accounted for as cash flow hedges, to protect itself against adverse fluctuations in interest rates on a forecasted issuance of debt. During the three months ended March 31, 2024, the Company terminated its interest rate swaption contracts. The Company expects to reclassify $121 thousand out of accumulated other comprehensive loss over the succeeding twelve months as a reduction of interest expense.

Interest Rate Products

Interest rate derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. The Company executes interest rate caps and swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net market risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings.

The Company entered into credit risk participation agreements ("RPAs") with institutional counterparties, under which the Company assumes its pro-rata share of the credit exposure associated with a borrower's performance related to interest rate derivative contracts in exchange for a fee. The fair value of RPAs is calculated by determining the total expected asset or liability exposure of the derivatives to the borrowers and applying the borrowers' credit spread to that exposure. Total expected exposure incorporates both the current and potential future exposure of the derivatives, derived from using observable inputs, such as yield curves and volatilities.

Credit-Risk-Related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.

The Company is exposed to credit risk in the event of nonperformance by the interest rate derivative counterparty. The Company minimizes this risk by entering into derivative contracts with only large, stable financial institutions, and the Company has not experienced, and does not expect, any losses from counterparty nonperformance on the interest rate derivatives. The Company monitors counterparty risk in accordance with the provisions of ASC Topic 815, "Derivatives and Hedging." In addition, the interest rate derivative agreements contain language outlining collateral-pledging requirements for each counterparty.

The interest rate derivative agreements detail: 1) that collateral be posted when the market value exceeds certain threshold limits associated with the secured party's exposure; 2) if the Company defaults on any of its indebtedness (including default where repayment of the indebtedness has not been accelerated by the lender), then the Company could also be declared in default on its derivative obligations; 3) if the Company fails to maintain its status as a well-capitalized institution then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements.

The table below identifies the balance sheet category and fair value of the Company's derivative instruments as of March 31, 2024 and December 31, 2023. The Company has a minimum collateral posting threshold with its derivative counterparty. If the Company had breached any provisions under the agreement at March 31, 2024, it could have been required to settle its obligations under the agreement at the termination value.

	March 31, 2024					December 31, 2023
(dollars in thousands)	Notional Amount		Fair Value		Balance Sheet Category	Notional Amount		Fair Value		Balance Sheet Category
Derivatives in an asset position:
Derivatives designated as hedging instruments:
Interest rate product	$	—	$	—	Other assets	$	300,000	$	374	Other assets
Derivatives not designated as hedging instruments:
Interest rate product	680,245		34,147		Other assets	651,429		30,288		Other assets
Credit risk participation agreements	49,480		—		Other liabilities	49,480		3		Other liabilities
Total	729,725		34,147			700,909		30,291
Total derivatives in an asset position:	$	729,725	$	34,147		$	1,000,909	$	30,665
Derivatives in a liability position:
Derivatives not designated as hedging instruments:
Interest rate product	$	680,245	$	33,646	Other liabilities	$	651,429	$	30,555	Other liabilities

The table below presents the effect of the Company's derivative financial instruments on the Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023:

The Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Operations
		Amount of Gain (Loss) Recognized in Income on Derivatives
	Location of Gain (Loss) Recognized in Income on Derivatives	Three Months Ended March 31,
(dollars in thousands)		2024		2023
Interest rate products	Other income / (other expense)	$	239	$	(350)
Mortgage banking derivatives	Gain on sale of loans	—		(64)
Total		$	239	$	(414)

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Deposits

3 Months Ended

Mar. 31, 2024

Deposits Liabilities, Balance Sheet, Reported Amounts [Abstract]

Deposits

Deposits

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

(dollars in thousands)	March 31, 2024		December 31, 2023
Noninterest-bearing demand	$	1,835,524	$	2,279,081
Interest-bearing transaction	1,207,566		997,448
Savings and money market	3,235,391		3,314,043
Time deposits	2,222,958		2,217,467
Total	$	8,501,439	$	8,808,039

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

(dollars in thousands)	March 31, 2024		December 31, 2023
2024	$	1,294,087	1,445,395
2025	716,191		576,379
2026	195,505		180,384
2027	5,779		5,482
2028	10,162		9,827
2029	1,234		—
Total	$	2,222,958	$	2,217,467

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

(dollars in thousands)	March 31, 2024		December 31, 2023
Three months or less	$	321,017	$	119,880
More than three months through six months	341,418		318,353
More than six months through twelve months	253,492		368,103
Over twelve months	696,857		726,758
Total	$	1,612,784	$	1,533,094

At March 31, 2024, total brokered deposits were $4.2 billion, or 49.1% of total deposits, of which $1.7 billion were attributable to the Certificates of Deposit Account Registry Service ("CDARS") and Insured Cash Sweep ("ICS") two-way accounts. At December 31, 2023, total brokered deposits (excluding the CDARS and ICS two-way) were $2.5 billion, or 28.8% of total deposits.

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Borrowings

3 Months Ended

Mar. 31, 2024

Long-Term Debt, Unclassified [Abstract]

Borrowings

Borrowings

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

(dollars in thousands)	Borrowings - Principal		Unamortized Deferred Issuance Costs		Net Borrowings Outstanding		Available Capacity (1)		Maturity Dates	Interest Rates (2)
March 31, 2024:
Customer repurchase agreements	$	37,059	$	—	$	37,059	$	—	N/A	3.48	%
Secured borrowings:
FHLB	600,000		—		600,000		1,302,153		September 25, 2024	5.53	%
FRB:
BTFP	1,000,000		—		1,000,000		—		January 15, 2025	4.76	%
Discount window	—		—		—		568,602		N/A	N/A
Raymond James repurchase agreement	—		—		—		17,780		N/A	N/A
Subordinated notes, 5.75%	70,000		(52)		69,948		—		September 1, 2024	5.75	%
Total borrowings	$	1,707,059	$	(52)	$	1,707,007	$	1,888,535
December 31, 2023:
Customer repurchase agreements	$	30,587	$	—	$	30,587	$	—	N/A	3.42%
Secured borrowings:
FHLB	—		—		—		1,271,846		N/A	N/A
FRB:
BTFP	1,300,000		—		1,300,000		598,870		March 22, 2024	4.53%
Discount window	—		—		—		601,504		N/A	N/A
Raymond James repurchase agreement	—		—		—		17,993		N/A	N/A
Subordinated notes, 5.75%	70,000		(82)		69,918		—		September 1, 2024	5.75%
Total borrowings	$	1,400,587	$	(82)	$	1,400,505	$	2,490,213

(1)Available capacity on the Company's borrowing arrangements with the FHLB, the FRB and the Raymond James repurchase line comprise pledged collateral that has not been borrowed against. At March 31, 2024, the Company had total additional undrawn borrowing capacity of approximately $2.2 billion, comprising unencumbered securities available to be pledged of approximately $297.5 million and undrawn financing on pledged assets of $1.9 billion.

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

The Company’s repurchase agreements operate on a rolling basis and do not contain contractual maturity dates. The contractual maturity dates on FHLB secured borrowings represent the maturity dates of current advances and are not evidence of a termination date on the line.

There are no prepayment penalties nor unused commitment fees on any of the Company’s borrowing arrangements.

Bank Term Funding Program ("BTFP")

On March 12, 2023, the FRB, Department of Treasury and the Federal Deposit Insurance Corporation ("FDIC") issued a joint statement outlining actions they had taken to protect the U.S. economy by strengthening public confidence in the banking system as a result of and in response to recently announced bank closures. Among other actions, the Federal Reserve Board announced that it would make available additional funding to eligible depository institutions through the creation of a new BTFP. The BTFP provides eligible depository institutions, including the Company's subsidiary bank, the Bank, an additional source of liquidity.

Borrowings are funded based on a percentage of the principal of eligible collateral posted, as defined within the terms of the program. Interest is payable at a fixed rate over the term of the borrowing and there are no prepayment penalties. The Federal Reserve announced in January 2024 that the BTFP would stop originating new loans on March 11, 2024, as scheduled. The Federal Reserve also modified the terms of the program so that the interest rate for new loans would be no lower than the interest rate on reserve balances in effect on the day the loan is made. In January 2024, the Company borrowed an additional $500.0 million through the BTFP and refinanced $500.0 million under the program, both at an interest rate of 4.76% that mature in January 2025.

Subordinated Notes

On August 5, 2014, the Company completed the sale of $70.0 million of its 5.75% subordinated notes, due September 1, 2024 (the "2024 Notes"). The 2024 Notes were offered to the public at par and qualify as Tier 2 capital for regulatory purposes to the fullest extent permitted under the Basel III Rule capital requirements, and were fully phased out of regulatory capital as of December 31, 2023 as they approached maturity. The net proceeds were approximately $68.8 million which included $1.2 million in deferred financing costs, which are being amortized over the life of the 2024 Notes.

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Net Income (Loss) per Common Share

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Net Income (Loss) per Common Share

Net Income (Loss) per Common Share

The calculation of net income per common share for the three months ended March 31, 2024 and 2023 was as follows:

	Three Months Ended March 31,
(dollars and shares in thousands, except per share data)	2024		2023
Basic:
Net (loss) income	$	(338)	$	24,234
Average common shares outstanding	30,068		31,109
Basic net (loss) income per common share	$	(0.01)	$	0.78
Diluted:
Net (loss) income	$	(338)	$	24,234
Average common shares outstanding	30,068		31,109
Adjustment for common share equivalents	—		71
Average common shares outstanding-diluted	30,068		31,180
Diluted net (loss) income per common share	$	(0.01)	$	0.78
Anti-dilutive shares	58		3

Basic net (loss) income per share is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted net (loss) income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the net income (loss) of the Company. The computation of diluted per share does not assume conversion or exercise of securities that would have an anti-dilutive effect on net income (loss) per share.

Securities issued by the Company that could potentially dilute net income (loss) per share in future periods include stock options and restricted stock. To calculate diluted net income (loss) per share, the Company utilizes the Treasury Stock method which results in only an incremental number of shares added to shares outstanding during the period.

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Other Comprehensive (Loss) Income

3 Months Ended

Mar. 31, 2024

Other Comprehensive Income [Abstract]

Other Comprehensive (Loss) Income

Other Comprehensive (Loss) Income

The following table presents the components of other comprehensive (loss) income for the three months ended March 31, 2024 and 2023.

(dollars in thousands)	Before Tax		Tax Effect		Net of Tax
Three Months Ended March 31, 2024
Net unrealized (loss) gain on securities available-for-sale	$	(6,693)	$	1,626	$	(5,067)
Less: Reclassification adjustment for net loss included in net income	(4)		1		(3)
Total unrealized (loss) gain on investment securities available-for-sale	(6,697)		1,627		(5,070)
Amortization of unrealized loss on securities transferred to held-to-maturity	1,731		(346)		1,385
Net unrealized gain on derivatives	363		(89)		274
Other comprehensive (loss) income	$	(4,603)	$	1,192	$	(3,411)
Three Months Ended March 31, 2023
Net unrealized gain (loss) on securities available-for-sale	$	24,039	$	(6,103)	$	17,936
Less: Reclassification adjustment for net loss included in net income	21		(5)		16
Total unrealized gain (loss) on investment securities available-for-sale	24,060		(6,108)		17,952
Amortization of unrealized loss on securities transferred to held-to-maturity	1,983		(1,342)		641
Other comprehensive income (loss)	$	26,043	$	(7,450)	$	18,593

The following table presents the changes in each component of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2024 and 2023.

(dollars in thousands)	Securities Available-For-Sale		Securities Held-to-Maturity		Derivatives		Accumulated Other Comprehensive Income (Loss)
Three Months Ended March 31, 2024
Balance at beginning of period	$	(122,246)	$	(39,929)	$	(182)	$	(162,357)
Other comprehensive (loss) income before reclassifications	(5,067)		—		274		(4,793)
Amounts reclassified from accumulated other comprehensive income	(3)		—		—		(3)
Amortization of unrealized loss on securities transferred to held-to-maturity	—		1,385		—		1,385
Net other comprehensive (loss) income during period	(5,070)		1,385		274		(3,411)
Balance at end of period	$	(127,316)	$	(38,544)	$	92	$	(165,768)
Three Months Ended March 31, 2023
Balance at beginning of period	$	(154,773)	$	(44,734)	$	—	$	(199,507)
Other comprehensive income before reclassifications	17,936		—		—		17,936
Amounts reclassified from accumulated other comprehensive income	16		—		—		16
Amortization of unrealized loss on securities transferred to held-to-maturity	—		641		—		641
Net other comprehensive income during period	17,952		641		—		18,593
Balance at end of period	$	(136,821)	$	(44,093)	$	—	$	(180,914)

The following table presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three months ended March 31, 2024 and 2023.

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
	Three Months Ended March 31,				Affected Line Item in Consolidated Statements of Operations
(dollars in thousands)	2024		2023
Realized gain (loss) on sale of investment securities	$	4	$	(21)	Net gain (loss) on sale of investment securities
Income tax benefit (expense)	(1)		5		Income tax expense
Total reclassifications for the periods	$	3	$	(16)

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Fair Value Measurements

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Such valuation techniques are consistently applied. Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability. ASC Topic 820, "Fair Value Measurements and Disclosures," establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1    Quoted prices in active exchange markets for identical assets or liabilities; also includes certain U.S. treasury and other U.S. Government and agency securities actively traded in over-the-counter markets.

Level 2    Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data; also includes derivative contracts whose value is determined using a pricing model with observable market inputs or inputs that can be derived principally from or corroborated by observable market data. This category generally includes certain U.S. Government and agency securities, corporate debt securities, derivative instruments, and residential mortgage loans held for sale.

Level 3    Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for single dealer nonbinding quotes not corroborated by observable market data. This category generally includes certain private equity investments, retained interests from securitizations, and certain collateralized debt obligations.

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

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

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total Fair Value
March 31, 2024
Assets:
Investment securities available-for-sale:
U.S treasury bonds	$	—	$	48,233	$	—	$	48,233
U. S. agency securities	—		639,326		—		639,326
Residential mortgage-backed securities	—		698,550		—		698,550
Commercial mortgage-backed securities	—		48,938		—		48,938
Municipal bonds	—		8,306		—		8,306
Corporate bonds	—		1,681		—		1,681
Interest rate product	—		34,147		—		34,147
Total assets measured at fair value on a recurring basis	$	—	$	1,479,181	$	—	$	1,479,181
Liabilities:
Interest rate product	$	—	$	33,646	$	—	$	33,646
Total liabilities measured at fair value on a recurring basis	$	—	$	33,646	$	—	$	33,646
December 31, 2023
Assets:
Investment securities available-for-sale:
U.S. treasury bonds	$	—	$	47,901	$	—	$	47,901
U. S. agency securities	—		671,397		—		671,397
Residential mortgage-backed securities	—		727,353		—		727,353
Commercial mortgage-backed securities	—		49,564		—		49,564
Municipal bonds	—		8,490		—		8,490
Corporate bonds	—		1,683		—		1,683
Interest rate product	—		30,662		—		30,662
Credit risk participation agreements	—		3		—		3
Total assets measured at fair value on a recurring basis	$	—	$	1,537,053	$	—	$	1,537,053
Liabilities:
Interest rate product	$	—	$	30,555	$	—	$	30,555
Total liabilities measured at fair value on a recurring basis	$	—	$	30,555	$	—	$	30,555

Investment securities available-for-sale: Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security's credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include certain U.S. treasury bonds, U.S. Government and agency securities that actively traded in over-the-counter markets. Level 2 securities includes certain U.S. treasury bonds, U.S. agency debt securities, MBS issued by Government Sponsored Entities and municipal bonds. Securities classified as Level 3 include securities in less liquid markets, for which the carrying amounts approximate the fair value.

Credit risk participation agreements: The Company enters into RPAs with institutional counterparties, under which the Company assumes its pro-rata share of the credit exposure associated with a borrower's performance related to interest rate derivative contracts. The fair value of RPAs is calculated by determining the total expected asset or liability exposure of the derivatives to the borrowers and applying the borrowers' credit spread to that exposure. Total expected exposure incorporates both the current and potential future exposure of the derivatives, derived from using observable inputs, such as yield curves and volatilities. Accordingly, RPAs fall within Level 2.

Interest rate derivatives: The Company entered into an interest rate derivative agreement with an institutional counterparty, under which the Company will receive cash if and when market rates exceed the derivatives strike rate. The fair value of the derivative is calculated by determining the total expected asset or liability exposure of the derivative. Total expected exposure incorporates both the current and potential future exposure of the derivative, derived from using observable inputs, such as yield curves and volatilities. Accordingly, the derivative falls within Level 2.

Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

The Company measures certain assets at fair value on a nonrecurring basis, and the following is a general description of the methods used to value such assets.

Loans: The fair value of individually assessed loans is estimated using one of several methods, including the collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. Those individually assessed loans not requiring a specific allowance represent loans for which the fair value of expected repayments or collateral exceed the recorded investment in such loans. At March 31, 2024, substantially all of the Company's individually evaluated loans were evaluated based upon the fair value of the collateral. In accordance with ASC Topic 820, individually evaluated loans where an allowance is established based on the fair value of collateral, i.e. those that are collateral dependent, require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the loan as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the loan as nonrecurring Level 3.

Other real estate owned ("OREO"): OREO is initially recorded at fair value less estimated selling costs. Fair value is based upon independent market prices, appraised values of the collateral or management's estimation of the value of the collateral, which the Company classifies as a Level 3 valuation.

Assets measured at fair value on a nonrecurring basis are included in the table below:

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total Fair Value
March 31, 2024
Individually assessed loans:
Commercial	$	—	$	—	$	2,422	$	2,422
Income producing - commercial real estate	—		—		67,602		67,602
Owner occupied - commercial real estate	—		—		19,798		19,798
Real estate mortgage - residential	—		—		1,633		1,633
Home equity	—		—		237		237
Other real estate owned	—		—		773		773
Total assets measured at fair value on a nonrecurring basis as of March 31, 2024	$	—	$	—	$	92,465	$	92,465
December 31, 2023
Individually assessed loans:
Commercial	$	—	$	—	$	2,475	$	2,475
Income producing - commercial real estate	—		—		41,038		41,038
Owner occupied - commercial real estate	—		—		19,880		19,880
Real estate mortgage - residential	—		—		1,638		1,638
Consumer	—		—		396		396
Home equity	—		—		242		242
Other real estate owned	—		—		1,108		1,108
Total assets measured at fair value on a nonrecurring basis as of December 31, 2023	$	—	$	—	$	66,777	$	66,777

Fair Value of Financial Instruments

The Company discloses fair value information about financial instruments for which it is practicable to estimate the value, whether or not such financial instruments are recognized on the balance sheet. Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by quoted market price, if one exists.

Quoted market prices, if available, are shown as estimates of fair value. Because no quoted market prices exist for a portion of the Company's financial instruments, the fair value of such instruments has been derived based on management's assumptions with respect to future economic conditions, the amount and timing of future cash flows and estimated discount rates. Different assumptions could significantly affect these estimates. Accordingly, the net realizable value could be materially different from the estimates presented below. In addition, the estimates are only indicative of individual financial instrument values, including in certain cases, the Company's estimation of exit pricing, and should not be considered an indication of the fair value of the Company taken as a whole.

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

					Fair Value Measurements
(dollars in thousands)	Carrying Value		Fair Value		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
March 31, 2024
Assets
Cash and due from banks	$	10,076	$	10,076	$	10,076	$	—	$	—
Federal funds sold	11,343		11,343		—		11,343		—
Interest-bearing deposits with other banks	696,453		696,453		—		696,453		—
Investment securities available-for-sale	1,445,034		1,445,034		—		1,445,034		—
Investment securities held-to-maturity	1,000,732		878,159		—		878,159		—
Federal Reserve and Federal Home Loan Bank stock	54,678		N/A		—		—		—
Loans	7,982,702		7,596,097		—		—		7,596,097
Bank owned life insurance	113,624		113,624		—		113,624		—
Annuity investment	12,948		12,948		—		12,948		—
Interest rate product	34,147		34,147		—		34,147		—
Accrued interest receivable	54,074		54,074		54,074		—		—
Liabilities
Noninterest-bearing deposits	$	1,835,524	$	1,835,524	$	—	$	1,835,524	$	—
Interest-bearing deposits	4,442,957		4,442,957		—		4,442,957		—
Time deposits	2,222,958		2,217,742		—		2,217,742		—
Customer repurchase agreements	37,059		37,059		—		37,059		—
Borrowings	1,669,948		1,669,043		—		1,669,043		—
Interest rate product	33,646		33,646		—		33,646		—
Accrued interest payable	20,978		20,978		20,978		—		—
December 31, 2023
Assets
Cash and due from banks	$	9,047	$	9,047	$	9,047	$	—	$	—
Federal funds sold	3,740		3,740		—		3,740		—
Interest-bearing deposits with other banks	709,897		709,897		—		709,897		—
Investment securities available-for-sale	1,506,388		1,506,388		—		1,506,388		—
Investment securities held-to-maturity	1,015,737		901,582		—		901,582		—
Federal Reserve and Federal Home Loan Bank stock	25,748		N/A		—		—		—
Loans	7,968,695		7,720,241		—		—		7,720,241
Bank owned life insurance	112,921		112,921		—		112,921		—
Annuity investment	13,112		13,112		—		13,112		—
Credit risk participation agreements	3		3		—		3		—
Interest rate product	30,662		30,662		—		30,662		—
Accrued interest receivable	53,337		53,337		53,337		—		—
Liabilities
Noninterest-bearing deposits	$	2,279,081	$	2,279,081	$	—	$	2,279,081	$	—
Interest-bearing deposits	4,311,491		4,311,491		—		4,311,491		—
Time deposits	2,217,467		2,217,795		—		2,217,795		—
Customer repurchase agreements	30,587		30,587		—		30,587		—
Borrowings	1,369,918		1,368,621		—		1,368,621		—
Interest rate product	30,555		30,555		—		30,555		—
Accrued interest payable	57,395		57,395		57,395		—		—

XML

Legal Contingencies	3 Months Ended
	Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]
Legal Contingencies	Legal Contingencies From time to time, the Company and its subsidiaries are involved in various legal proceedings incidental to their business in the ordinary course, including matters in which damages in various amounts are claimed, as well as regulatory and governmental investigations and inquiries. Based on information currently available, the Company does not believe that the liabilities (if any) resulting from such matters will have a material effect on the financial position of the Company. However, in light of the inherent uncertainties involved in such matters, ongoing legal expenses or an adverse outcome in one or more of these matters could materially and adversely affect the Company's financial condition, results of operations or cash flows in any particular reporting period, as well as its reputation.

XML

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net (Loss) Income	$ (338)	$ 24,234

XML

Insider Trading Arrangements	3 Months Ended
	Mar. 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

XML

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Principles of Consolidation and Basis of Presentation

Principles of Consolidation and Basis of Presentation

The Consolidated Financial Statements include the accounts of Eagle Bancorp, Inc. (the "Parent") and its subsidiaries (together with the Parent, the "Company"), with all significant intercompany transactions eliminated. EagleBank (the "Bank"), a Maryland chartered commercial bank, is the Parent's principal subsidiary.

The accounting and reporting policies of the Company conform to generally accepted accounting principles in the United States of America ("GAAP") and to general practices in the banking industry. The Consolidated Financial Statements and accompanying notes of the Company included herein are unaudited. The Consolidated Balance Sheet as of December 31, 2023 was derived from the audited Consolidated Balance Sheet as of that date. The Consolidated Financial Statements reflect all adjustments, consisting of normal recurring adjustments, that in the opinion of management are necessary to present fairly the results for the periods presented. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). In addition to the accounting policies described below, the Company applies the accounting policies contained in Note 1 to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. Certain reclassifications have been made to 2023 amounts previously reported to conform to the 2024 presentation. Reclassifications had no effect on net income or shareholders' equity. These statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

Nature of Operations

Nature of Operations

The Company, through the Bank, conducts a full service community banking business, primarily in Northern Virginia, Suburban Maryland, and Washington, D.C. The primary financial services offered by the Bank include real estate, commercial and consumer lending, as well as traditional deposit and repurchase agreement products. The Bank is also active in the origination of small business loans, and the origination, securitization and sale of multifamily Federal Housing Administration ("FHA") loans. The guaranteed portion of small business loans, guaranteed by the Small Business Administration ("SBA"), is typically sold to third party investors in a transaction apart from the loan's origination.

In April 2024, the Company closed a branch following the lease's expiration. The Bank offers its products and services through twelve banking offices, four lending centers and various digital capabilities, including remote deposit services and mobile banking services. Eagle Insurance Services, LLC, a subsidiary of the Bank that previously offered access to insurance products and services through a referral program with a third party insurance broker, continues to receive fee income in connection with such program. Landroval Municipal Finance, Inc., a subsidiary of the Bank, focuses on lending to municipalities by buying debt on the public market as well as direct purchase issuance.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates and such differences could be material to the consolidated financial statements.

Investment Securities

Investment Securities

The Company recognizes acquired securities on the trade date. Investment securities comprise debt securities, which are classified depending on the Company's intent and ability to hold the securities to maturity. Debt securities are classified as available-for-sale when management may have the intent to sell them prior to maturity. Debt securities are classified as held-to-maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity.

Securities available-for-sale are acquired as part of the Company's asset/liability management strategy and may be sold in response to changes in interest rates, current market conditions, loan demand, changes in prepayment risk and other factors. Securities available-for-sale are carried at fair value, with unrealized gains or losses, other than impairment losses, being reported as accumulated other comprehensive income/(loss), a separate component of shareholders' equity, net of deferred income tax. Realized gains and losses, using the specific identification method, are included as a separate component of noninterest income in the Consolidated Statements of Operations.

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

Transfers of Investment Securities from Available-for-Sale to Held-to-Maturity

Transfers of debt securities into the held-to-maturity category from the available-for-sale category are made at amortized cost, net of unrealized gain or loss reported in accumulated other comprehensive income (loss) at the date of transfer. The unrealized holding gain or loss at the date of transfer is retained in other comprehensive income and in the carrying value of the held-to-maturity ("HTM") securities. Such amounts are amortized over the remaining life of the security.

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

Loans

Loans

Loans held for investment are stated at the principal amount outstanding, net of unamortized deferred costs and fees. Interest income on loans is recognized at the contractual rate on the principal amounts outstanding. Loan origination fees, net of direct loan origination costs, and commitment fees are deferred and amortized on the interest method over the term of the loan.

Past due loans are placed on nonaccrual status when there is a clear indication that the borrower's cash flow may not be sufficient to meet payments as they become due. Generally, this conclusion is reached when a loan is 90 days past due. When a loan is placed on nonaccrual status, all previously accrued and unpaid interest is reversed through interest income. Interest income is subsequently recognized on a cash basis as long as the remaining book balance of the asset is deemed to be collectible. If collectability is questionable, then cash payments are applied to principal. A loan is placed back on accrual status when both principal and interest are current and it is probable that we will be able to collect all amounts due (both principal and interest) according to the terms of the loan agreement.

Allowance for Credit Losses- Loans

Allowance for Credit Losses - Loans

The allowance for credit losses ("ACL") - loans is an estimate of the expected credit losses in the loans held for investment portfolio. The Company's ACL on the loan portfolio is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the allowance when they are deemed uncollectible. Expected recoveries are recorded to the extent they do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

Reserves on loans that do not share risk characteristics are evaluated on an individual basis. Nonaccrual loans are specifically reviewed for loss potential and when deemed appropriate are assigned a reserve based on an individual evaluation. The remainder of the portfolio, representing all loans not evaluated individually for impairment, is segregated by call report codes, and a loan-level probability of default ("PD") / loss given default ("LGD") cash flow method is applied using an exposure at default ("EAD") model. These historical loss rates are then modified to incorporate our reasonable and supportable forecast of future losses at the portfolio segment level, as well as any necessary qualitative adjustments.

The Company uses regression analysis of historical internal and peer data provided by a third-party service provider (as Company loss data is insufficient) to determine suitable credit loss drivers to utilize when modeling lifetime PD and LGD. This analysis also determines how expected PD will be impacted by different forecasted levels of the loss drivers.

A similar process is employed to calculate a reserve assigned to off-balance sheet commitments, specifically unfunded loan commitments and letters of credit, and any needed reserve is recorded in reserve for unfunded commitments ("RUC") on the Consolidated Balance Sheets. For periods beyond which we are able to develop reasonable and supportable forecasts, we revert to the historical loss rate on a straight-line basis over a twelve-month period.

For each of these loan segments, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speeds, PD rates, and LGD rates. The modeling of expected prepayment speeds is based on historical internal data. EAD is based on each instrument's underlying amortization schedule in order to estimate the bank's expected credit loss exposure at the time of the borrower's potential default.

During the three months ended March 31, 2024, management enhanced the cash flow model to incorporate three macroeconomic variables in addition to national unemployment. The four economic variables selected, national unemployment, which was the original variable used, Commercial Real Estate ("CRE") Price Index, House Price Index and Gross Domestic Product ("GDP"), are incorporated by utilizing a Loss Driver Analysis approach that factors in historical losses, including during the Great Recession, of regional peer banks and the Bank. The updated model incorporates a weighting of three economic scenarios; baseline, upside and downside. The scenarios cover the four economic forecast variables, with each segment of the portfolio linked to two of these variables, depending on the segment. The loss driver analysis is spread over a reasonable and supportable period of 18 months and reverts back to a historical loss rate over twelve months on a straight-line basis over the loan's remaining maturity. Management leverages economic projections from reputable and independent third parties to inform its loss driver forecasts over the forecast period.

The ACL also includes an amount for inherent risks not reflected in the historical analyses. Relevant factors include, but are not limited to, concentrations of credit risk, changes in underwriting standards, experience and depth of lending staff and trends in delinquencies.

While our methodology in establishing the ACL attributes portions of the ACL and RUC to the separate loan pools or segments, the entire ACL and RUC is available to absorb credit losses expected in the total loan portfolio and total amount of unfunded credit commitments, respectively. Portfolio segments are used to pool loans with similar risk characteristics and align with our methodology for measuring current expected credit losses ("CECL").

A summary of our primary portfolio segments is as follows:

Commercial. The commercial loan portfolio comprises lines of credit and term loans for working capital, equipment, and other business assets across a variety of industries. These loans are used for general corporate purposes including financing working capital, internal growth, and acquisitions; and are generally secured by accounts receivable, inventory, equipment and other assets of our clients' businesses.

Income producing - commercial real estate. Income producing commercial real estate loans comprise permanent and bridge financing provided to professional real estate owners/managers of commercial and residential real estate projects and properties who generally have a demonstrated record of past success with similar properties. Collateral properties include apartment buildings, office buildings, hotels, mixed-use buildings, retail, data centers, warehouse, and shopping centers. The primary source of repayment on these loans is generally expected to come from lease or operation of the real property collateral. Income producing commercial real estate loans are impacted by fluctuation in collateral values, as well as rental demand and rates.

Owner occupied – commercial real estate. The owner occupied commercial real estate portfolio comprises permanent financing provided to operating companies and their related entities for the purchase or refinance of real property wherein their business operates. Collateral properties include industrial property, office buildings, religious facilities, mixed-use property, health care and educational facilities.

Real estate mortgage – residential. Real estate mortgage residential loans comprise consumer mortgages for the purpose of purchasing or refinancing first lien real estate loans secured by primary-residence, second-home, and rental residential real property.

Construction – commercial and residential. The construction commercial and residential loan portfolio comprises loans made to builders and developers of commercial and residential property, for both renovation, new construction, and development projects. Collateral properties include apartment buildings, mixed use property, residential condominiums, single and 1-4 residential property, and office buildings. The primary source of repayment on these loans is expected to come from the sale, permanent financing, or lease of the real property collateral. Construction loans are impacted by fluctuations in collateral values and the ability of the borrower or ultimate purchaser to obtain permanent financing.

Construction – commercial and industrial ("C&I") (owner occupied). The construction C&I (owner occupied) portfolio comprises loans to operating companies and their related entities for new construction or renovation of the real or leased property in which they operate. Generally these loans contain provisions for conversion to an owner occupied commercial real estate loan or to a commercial loan after completion of construction. Collateral properties include industrial, healthcare, religious facilities, restaurants, and office buildings.

Home equity. The home equity portfolio comprises consumer lines of credit and loans secured by subordinate liens on residential real property.

Other consumer. The other consumer portfolio comprises consumer purpose loans not secured by real property, including personal lines of credit and loans, overdraft lines, and vehicle loans. This category also includes other loan items such as overdrawn deposit accounts as well as loans and loan payments in process.

We have several pass credit grades that are assigned to loans based on varying levels of risk, ranging from credits that are secured by cash or marketable securities, to watch credits which have all the characteristics of an acceptable credit risk but warrant more than the normal level of monitoring. Special mention loans are those that are currently protected by the sound worth and paying capacity of the borrower, but that are potentially weak and constitute an additional credit risk. These loans have the potential to deteriorate to a substandard grade due to the existence of financial or administrative deficiencies. Substandard loans have a well-defined weakness or weaknesses that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. Some substandard loans are inadequately protected by the sound worth and paying capacity of the borrower and of the collateral pledged and may be considered impaired. Substandard loans can be accruing or can be on nonaccrual depending on the circumstances of the individual loans.

Loans classified as doubtful have all the weaknesses inherent in substandard loans with the added characteristics that the weaknesses make collection in full highly questionable and improbable. The possibility of loss is extremely high. All doubtful loans are on nonaccrual.

Classified loans represent the sum of loans graded substandard and doubtful.

The methodology used in the estimation of the allowance, which is performed at least quarterly, is designed to be dynamic and responsive to changes in portfolio credit quality and forecasted economic conditions. Changes are reflected in the pool-basis allowance and individually assessed loans as the collectability of classified loans is evaluated with new information. As our portfolio has matured, historical loss ratios have been closely monitored. The review of the appropriateness of the allowance is performed by executive management and presented to management committees and the Audit Committee of the Board of Directors (the "Board"). The committees' reports to the Board are part of the Board review on a quarterly basis of our consolidated financial statements.

When management determines that foreclosure is probable, and for certain collateral-dependent loans where foreclosure is not considered probable, expected credit losses are based on the estimated fair value of the collateral adjusted for selling costs, when appropriate. A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral.

Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals and modifications unless management has a reasonable expectation that a borrower will result in financial difficulty.

We do not measure an ACL on accrued interest receivable balances because these balances are written off in a timely manner as a reduction to interest income when loans are placed on nonaccrual status.

Collateral Dependent Financial Assets

Collateral Dependent Financial Assets

Loans that do not share risk characteristics are evaluated on an individual basis. For collateral dependent financial assets where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the net present value ("NPV") from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the fair value of the underlying collateral less estimated cost to sell. The ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the financial asset.

Loan Modifications to Borrowers in Financial Difficulty

The Company evaluates loan restructurings to determine if we have a loan modification and whether it results in a new loan or the continuation of the existing loan. Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows include situations where there are principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and combinations of the listed modifications.

A loan that is considered a modified loan may be subject to an individually-evaluated loan analysis if the commitment is $1.0 million or greater; otherwise, the restructured loan remains in the appropriate segment in the ACL model and associated provisions are adjusted based on changes in the discounted cash flows resulting from the modification of the restructured loan.

Management strives to identify borrowers in financial difficulty early and work with them to modify their loan to more affordable terms before their loan reaches nonaccrual status, foreclosure or repossession of the collateral to minimize economic loss to the Company.

Allowance for Credit Losses - Available-for-Sale Securities

Allowance for Credit Losses - Available-for-Sale Securities

For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either criterion is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an ACL is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income, as a non-credit-related impairment.

The entire amount of an impairment loss is recognized in earnings only when: (1) the Company intends to sell the security; (2) it is more likely than not that the Company will have to sell the security before recovery of its amortized cost basis; or (3) the Company does not expect to recover the entire amortized cost basis of the security. In all other situations, only the portion of the impairment loss representing the credit loss must be recognized in earnings, with the remaining portion being recognized in other comprehensive income, net of deferred taxes.

Changes in the ACL are recorded as a provision for or reversal of credit losses. Losses are charged against the allowance when management believes the uncollectibility of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

We have made a policy election to exclude accrued interest from the amortized cost basis of available-for-sale debt securities and report accrued interest separately in accrued interest and other assets in the Consolidated Balance Sheets. Available-for-sale debt securities are placed on nonaccrual status when we no longer expect to receive all contractual amounts due, which is generally at 90 days past due. Accrued interest receivable is reversed against interest income when a security is placed on nonaccrual status. Accordingly, we do not recognize an allowance for credit loss against accrued interest receivable.

Allowance for Credit Losses - Held-to-Maturity Debt Securities

Allowance for Credit Losses - Held-to-Maturity Debt Securities

The Company separately evaluates its HTM investment securities for any credit losses. The Company pools like securities and calculates expected credit losses through an estimate based on a security's credit rating, which is recognized as part of the ACL for held-to-maturity securities and included in the balance of investment securities held-to-maturity on the Consolidated Balance Sheets. If the Company determines that a security indicates evidence of deteriorated credit quality, the security is individually evaluated and a discounted cash flow analysis may be performed and compared to the amortized cost basis.

Loan Commitments and Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

Loan Commitments and Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

Financial instruments include off-balance sheet credit instruments such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded.

The Company records a RUC on off-balance sheet credit exposures through a charge to provision for credit loss expense in the Company's Consolidated Statement of Operations.

The RUC on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur, and is included in the RUC on the Company's Consolidated Balance Sheets.

Goodwill Assessment

Goodwill Assessment

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Goodwill is subject to impairment testing, which must be conducted at least annually or upon the occurrence of a triggering event. Various factors, such as the Company’s results of operations, the trading price of the Company’s common stock relative to the book value per share, macroeconomic conditions and conditions in the banking sector, inform whether a triggering event for an interim goodwill impairment test has occurred. Goodwill is recorded and evaluated for impairment at its reporting unit, the Company. The Company's policy is to test goodwill for impairment annually as of December 31, or on an interim basis if an event triggering an impairment assessment is determined to have occurred.

Testing of goodwill impairment comprises a two-step process. First, the Company performs a qualitative assessment to evaluate relevant events or circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it is more likely than not that an impairment has occurred, it proceeds to the quantitative impairment test, whereby it calculates the fair value of the reporting unit and compares it with its carrying amount, including goodwill. In its performance of impairment testing, the Company has the unconditional option to proceed directly to the quantitative impairment test, bypassing the qualitative assessment. If the carrying amount of the reporting unit exceeds the fair value, the amount by which the carrying amount exceeds fair value, up to the carrying value of goodwill, is recorded through earnings as an impairment charge. If the results of the qualitative assessment indicate that it is not more likely than not that an impairment has occurred, or if the quantitative impairment test results in a fair value of the reporting unit that is greater than the carrying amount, then no impairment charge is recorded.

As part of its annual testing for goodwill impairment, the Company concluded that no impairment existed at December 31, 2023. Management has evaluated and will continue to evaluate economic conditions in interim periods for triggering events. As of the time of this report's filing, the Company did not identify any triggering events for interim testing. However, future events including a continuation of the recent trading price of the Company's common stock relative to the book value per share through the second quarter of 2024 could cause the Company to conclude that goodwill or other intangibles have become impaired, which would result in recording an impairment loss. Any resulting impairment loss could have a material adverse impact on the Company’s financial condition and results of operations, however, it would not impact our regulatory capital ratios, tangible common equity ratio, nor its liquidity position.

New Authoritative Accounting Guidance

New Authoritative Accounting Guidance

Accounting Standards Pending Adoption

ASU No. 2023-06, "Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative" ("ASU 2023-06") incorporates into the Accounting Standards Codification ("ASC" or "Codification") several SEC disclosure requirements under Regulations S-K and S-X. The amendments in the ASU are intended to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations. These requirements are similar to, but require more information than, generally accepted accounting principles. The new updates modify the disclosure or presentation requirements of a variety of Topics in the Codification. Entities should apply the amendments in ASU 2023-06 prospectively. For entities subject to the SEC's existing disclosure requirements and for entities that have to file or provide financial statements with or to the SEC for the purpose of selling or issuing securities that do not have contractual limits on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. As a result, the effective date will be different for each individual disclosure based on the effective date of the SEC's deletion of the related disclosure. Early adoption is prohibited. For all other entities, the effective date will be two years later. Early adoption is permitted for these entities, but not before the provisions of the ASU become effective for entities subject to SEC's regulation. The effective dates of the amendments are predicated on the SEC removing its related disclosure requirements from its regulations. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. We are currently in the process of evaluating this guidance.

ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"). The ASU requires additional income tax disclosures around effective tax rates and cash income taxes paid. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024 and interim periods within those fiscal years. The impact of ASU 2023-09 should be applied prospectively. We are currently in the process of evaluating this guidance.

ASU No. 2024-01, "Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards" ("ASU 2024-01") clarifies how an entity determines whether a profits interest or similar award (hereafter a "profits interest award") is accounted for either (1) as a share-based payment arrangement, and therefore, within the scope of ASC 718 or (2) not a share-based payment arrangement and therefore within the scope of other guidance. ASU 2024-01 also improves the clarity and operation of the guidance in ASC 718-10-15-3. The guidance in ASU 2024-01 applies to all entities that issue profits interest awards as compensation to employees or non employees in exchange for goods or services. For public business entities, the amendments are effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2025, and interim periods within those annual periods. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. If an entity adopts the amendments in an interim period, it should adopt them as of the beginning of the annual period that includes that interim period. The amendments should be applied (i) retrospectively to all prior periods presented in the financial statements or (ii) prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies the amendments. If the amendments are applied prospectively, an entity is required to disclose the nature of and reason for the change in accounting principle. We are currently in the process of evaluating this guidance.

ASU No. 2024-02, "Codification Improvements—Amendments to Remove References to the Concepts Statements" ("ASU 2024-02") amends the Accounting Standard Codification (“Codification”) by removing references to various concepts statements. In most instances, the references are extraneous and not required to understand or apply the guidance. In other instances, the references were used in prior statements to provide guidance in certain topical areas. As stated in paragraph 105-10-05-3 of the Codification, FASB Concepts Statements are non authoritative. These amendments will simplify the Codification which will further draw a distinction between authoritative and non authoritative literature. The amendments are effective for public business entities for fiscal years beginning after December 15, 2024. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2025. Early application of the amendments is permitted for all entities, for any fiscal year or interim period for which financial statements have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments using one of the following transition methods: (i) prospectively to all new transactions recognized on or after the date that the entity first applies the amendments, or (ii) retrospectively to the beginning of the earliest comparative period presented in which the amendments were first applied. We are currently in the process of evaluating this guidance.

Accounting Standards Adopted in 2024:

ASU No. 2023-07,"Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." ("ASU 2023-07") requires filers to disclose significant segment expenses, an amount and description for other segment items, the title and position of the entity’s chief operating decision maker ("CODM") and an explanation of how the CODM uses the reported measures of profit or loss to assess segment performance, and, on an interim basis, certain segment related disclosures that previously were required only on an annual basis. ASU 2023-07 also clarifies that entities with a single reportable segment are subject to both new and existing segment reporting requirements and that an entity is permitted to disclose multiple measures of segment profit or loss, provided that certain criteria are met. ASU 2023-07 is effective for the Company for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Since early adoption is permitted, the Company adopted the guidance prescribed under ASU 2023-07 effective January 1, 2024. Adoption of this guidance did not have a material impact on our consolidated financial statements for fiscal year 2024.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Schedule Of Provision For Credit Losses

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

	Three Months Ended March 31,
(dollars in thousands)	2024		2023
Provision for credit losses - loans	$	35,174	$	4,908
Provision for credit losses - HTM debt securities	1		1,242
Provision for credit losses - AFS debt securities	—		14
Total	$	35,175	$	6,164

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Investment Securities (Tables)

3 Months Ended

Mar. 31, 2024

Investments, Debt and Equity Securities [Abstract]

Schedule of Available-for-Sale Securities and Held-to-Maturity Securities

The amortized cost and estimated fair value of the Company's available-for-sale and held-to-maturity securities are summarized as follows:

(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
March 31, 2024
Investment securities available-for-sale:
U.S. treasury bonds	$	49,919	$	—	$	(1,686)	$	—	$	48,233
U.S. agency securities	698,189		—		(58,863)		—		639,326
Residential mortgage-backed securities	800,793		23		(102,266)		—		698,550
Commercial mortgage-backed securities	54,018		—		(5,080)		—		48,938
Municipal bonds	8,740		—		(434)		—		8,306
Corporate bonds	2,000		—		(302)		(17)		1,681
Total available-for-sale securities	$	1,613,659	$	23	$	(168,631)	$	(17)	$	1,445,034

(dollars in thousands)	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Estimated Fair Value
March 31, 2024
Investment securities held-to-maturity:
Residential mortgage-backed securities	$	655,388	$	—	$	(87,348)	$	568,040
Commercial mortgage-backed securities	89,966		—		(13,000)		76,966
Municipal bonds	125,003		—		(9,789)		115,214
Corporate bonds	132,332		—		(14,393)		117,939
Total	$	1,002,689	$	—	$	(124,530)	$	878,159
Allowance for credit losses	(1,957)
Total held-to-maturity securities, net of ACL	$	1,000,732

(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
December 31, 2023
Investment securities available-for-sale:
U.S. treasury bonds	$	49,894	$	—	$	(1,993)	$	—	$	47,901
U.S. agency securities	729,090		—		(57,693)		—		671,397
Residential mortgage-backed securities	823,992		45		(96,684)		—		727,353
Commercial mortgage-backed securities	54,557		—		(4,993)		—		49,564
Municipal bonds	8,783		—		(293)		—		8,490
Corporate bonds	2,000		—		(300)		(17)		1,683
Total available-for-sale securities	$	1,668,316	$	45	$	(161,956)	$	(17)	$	1,506,388

(dollars in thousands)	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Estimated Fair Value
December 31, 2023
Investment securities held-to-maturity:
Residential mortgage-backed securities	$	670,043	$	—	$	(79,980)	$	590,063
Commercial mortgage-backed securities	90,227		—		(12,867)		77,360
Municipal bonds	125,114		5		(8,540)		116,579
Corporate bonds	132,309		—		(14,729)		117,580
Total	$	1,017,693	$	5	$	(116,116)	$	901,582
Allowance for credit losses	(1,956)
Total held-to-maturity securities, net of ACL	$	1,015,737

Schedule of Gross Unrealized Losses and Fair Value by Length of Time that the Individual Available-For-Sale Securities Have Been in a Continuous Unrealized Loss

The following tables summarize available-for-sale and held-to-maturity securities in an unrealized loss position by length of time:

		Less Than 12 Months				12 Months or Greater				Total
(dollars in thousands)	Number of Securities	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
March 31, 2024
Investment securities available-for-sale:
U.S. treasury bonds	2	$	—	$	—	$	48,233	$	(1,686)	$	48,233	$	(1,686)
U. S. agency securities	76	2,904		(5)		636,422		(58,858)		639,326		(58,863)
Residential mortgage-backed securities	151	8,180		(60)		688,525		(102,206)		696,705		(102,266)
Commercial mortgage-backed securities	13	—		—		48,938		(5,080)		48,938		(5,080)
Municipal bonds	1	—		—		8,306		(434)		8,306		(434)
Corporate bonds	1	—		—		1,681		(302)		1,681		(302)
Total	244	$	11,084	$	(65)	$	1,432,105	$	(168,566)	$	1,443,189	$	(168,631)

		Less Than 12 Months				12 Months or Greater				Total
(dollars in thousands)	Number of Securities	Estimated Fair Value		Unrecognized Losses		Estimated Fair Value		Unrecognized Losses		Estimated Fair Value		Unrecognized Losses
March 31, 2024
Investment securities held-to-maturity:
Residential mortgage-backed securities	142	$	—	$	—	$	568,040	$	(87,348)	$	568,040	$	(87,348)
Commercial mortgage-backed securities	16	—		—		76,966		(13,000)		76,966		(13,000)
Municipal bonds	42	3,474		(63)		111,740		(9,726)		115,214		(9,789)
Corporate bonds	30	—		—		105,887		(14,393)		105,887		(14,393)
Total	230	$	3,474	$	(63)	$	862,633	$	(124,467)	$	866,107	$	(124,530)

		Less Than 12 Months				12 Months or Greater				Total
(dollars in thousands)	Number of Securities	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
December 31, 2023
Investment securities available-for-sale:
U.S. treasury bonds	2	$	—	$	—	$	47,901	$	(1,993)	$	47,901	$	(1,993)
U. S. agency securities	78	3,084		(4)		668,313		(57,689)		671,397		(57,693)
Residential mortgage-backed securities	149	—		—		718,042		(96,684)		718,042		(96,684)
Commercial mortgage-backed securities	13	—		—		49,564		(4,993)		49,564		(4,993)
Municipal bonds	1	—		—		8,490		(293)		8,490		(293)
Corporate bonds	1	—		—		1,683		(300)		1,683		(300)
Total	244	$	3,084	$	(4)	$	1,493,993	$	(161,952)	$	1,497,077	$	(161,956)

		Less Than 12 Months				12 Months or Greater				Total
(dollars in thousands)	Number of Securities	Estimated Fair Value		Unrecognized Losses		Estimated Fair Value		Unrecognized Losses		Estimated Fair Value		Unrecognized Losses
December 31, 2023
Investment securities held-to-maturity:
Residential mortgage-backed securities	142	$	—	$	—	$	590,063	$	(79,980)	$	590,063	$	(79,980)
Commercial mortgage-backed securities	16	—		—		77,360		(12,867)		77,360		(12,867)
Municipal bonds	40	—		—		113,031		(8,540)		113,031		(8,540)
Corporate bonds	30	—		—		105,523		(14,729)		105,523		(14,729)
Total	228	$	—	$	—	$	885,977	$	(116,116)	$	885,977	$	(116,116)

Schedule of Amortized Cost and Estimated Fair Value of Investments Available-for-Sale by Contractual Maturity

The following table summarizes the Company's investment securities available-for-sale and investment securities held-to-maturity by contractual maturity. Expected maturities for mortgage-backed securities ("MBS") will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	March 31, 2024
(dollars in thousands)	Amortized Cost		Estimated Fair Value
Investment securities available-for-sale:
Within one year	$	139,224	$	135,426
One to five years	486,394		446,955
Five to ten years	112,838		97,570
Beyond ten years	20,392		17,612
Residential mortgage-backed securities	800,793		698,550
Commercial mortgage-backed securities	54,018		48,938
Less: allowance for credit losses	—		(17)
Total investment securities available-for-sale	1,613,659		1,445,034
Investment securities held-to-maturity:
Within one year	4,282		4,247
One to five years	61,707		59,309
Five to ten years	117,237		102,274
Beyond ten years	74,109		67,323
Residential mortgage-backed securities:	655,388		568,040
Commercial mortgage-backed securities	89,966		76,966
Less: allowance for credit losses	(1,957)		—
Total investment securities held-to-maturity	1,000,732		878,159
Total	$	2,614,391	$	2,323,193

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Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2024

Receivables [Abstract]

Schedule of Loans, Net of Unamortized Net Deferred Fees

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

	March 31, 2024				December 31, 2023
(dollars in thousands, except amounts in the footnote)	Amount		%		Amount		%
Commercial	$	1,408,767	18	%	$	1,473,766	18	%
PPP loans	467		—	%	528		—	%
Income-producing - commercial real estate	4,040,655		50	%	4,094,614		51	%
Owner-occupied - commercial real estate	1,185,582		15	%	1,172,239		15	%
Real estate mortgage - residential	72,087		1	%	73,396		1	%
Construction - commercial and residential	1,082,556		13	%	969,766		12	%
Construction - C&I (owner-occupied)	138,379		2	%	132,021		2	%
Home equity	53,251		1	%	51,964		1	%
Other consumer	958		—	%	401		—	%
Total loans	7,982,702		100	%	7,968,695		100	%
Less: allowance for credit losses	(99,684)				(85,940)
Net loans (1)	$	7,883,018			$	7,882,755

(1)Excludes accrued interest receivable of $46.3 million and $45.3 million at March 31, 2024 and December 31, 2023, respectively, which were recorded in other assets on the Consolidated Balance Sheets.

Schedule of Detail Activity in the Allowance for Credit Losses by Portfolio Segment

The following table details activity in the ACL by portfolio segment for the three months ended March 31, 2024 and 2023. PPP loans are excluded from these tables since they do not carry an allowance for credit loss, as these loans are fully guaranteed as to principal and interest by the SBA, whose guarantee is backed by the full faith and credit of the U.S. Government. Allocation of a portion of the allowance to one category of loans does not restrict the use of the allowance to absorb losses in other categories.

(dollars in thousands)	Commercial		Income-Producing Commercial Real Estate		Owner-Occupied -Commercial Real Estate		Real Estate Mortgage Residential		Construction - Commercial and Residential		Construction - C&I (Owner-Occupied)		Home Equity		Other Consumer		Total
Three Months Ended March 31, 2024
Allowance for credit losses:
Balance at beginning of period	$	17,824	$	40,050	$	14,333	$	861	$	10,198	$	1,992	$	657	$	25	$	85,940
Loans charged-off	(496)		(20,943)		—		—		(129)		—		—		(1)		(21,569)
Recoveries of loans previously charged-off	115		—		24		—		—		—		—		—		139
Net loans (charged-off) recovered	(381)		(20,943)		24		—		(129)		—		—		(1)		(21,430)
Provision for (reversal of) credit losses	6,239		26,830		(820)		32		2,989		(63)		(39)		6		35,174
Ending balance	$	23,682	$	45,937	$	13,537	$	893	$	13,058	$	1,929	$	618	$	30	$	99,684
Three Months Ended March 31, 2023
Allowance for credit losses:
Balance at beginning of period	$	15,655	$	35,688	$	12,702	$	969	$	7,195	$	1,606	$	555	$	74	$	74,444
Loans charged-off	(868)		—		—		—		(136)		—		—		(50)		(1,054)
Recoveries of loans previously charged-off	76		—		—		—		—		—		—		3		79
Net loans (charged-off) recovered	(792)		—		—		—		(136)		—		—		(47)		(975)
Provision for (reversal of) credit losses	912		2,452		(245)		33		1,682		36		38		—		4,908
Ending balance	$	15,775	$	38,140	$	12,457	$	1,002	$	8,741	$	1,642	$	593	$	27	$	78,377

Schedule of Amortized Cost Basis of Collateral-Dependent Loans by Class of Loans

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

	March 31, 2024				December 31, 2023
	Business/Other				Business/Other
(dollars in thousands)	Assets		Real Estate		Assets		Real Estate
Commercial	$	1,532	$	1,218	$	1,674	$	1,240
Income-producing - commercial real estate	878		66,724		1,754		39,172
Owner-occupied - commercial real estate	—		19,798		—		19,836
Real estate mortgage - residential	—		1,692		—		1,692
Construction - commercial and residential	—		—		—		525
Home equity	—		237		—		242
Total	$	2,410	$	89,669	$	3,428	$	62,707

Schedule of the Risk Category of Loans by Class of Loans

Based on the most recent analysis performed, the amortized cost basis of loans by risk category, class and year of origination, along with any charge-offs that were recorded in the applicable loan segment, if applicable, were as follows:

(dollars in thousands)	Prior		2020		2021		2022		2023		2024		Revolving Loans Amort. Cost Basis		Revolving Loans Convert. to Term		Total
March 31, 2024
Commercial
Pass	$	193,755	$	35,451	$	174,103	$	141,181	$	187,057	$	24,604	$	569,226	$	1,154	$	1,326,531
Special Mention	8,493		—		—		—		—		—		4,286		8,058		20,837
Substandard	13,771		9,371		1,538		281		—		—		36,438		—		61,399
Total	216,019		44,822		175,641		141,462		187,057		24,604		609,950		9,212		1,408,767
YTD gross charge-offs	(396)		—		—		—		—		—		(100)		—		(496)
PPP loans
Pass	—		—		467		—		—		—		—		—		467
Income producing - commercial real estate
Pass	1,452,244		308,573		559,404		755,375		299,264		26,251		243,343		19,359		3,663,813
Special Mention	170,118		6,744		—		—		—		—		—		—		176,862
Substandard	199,980		—		—		—		—		—		—		—		199,980
Total	1,822,342		315,317		559,404		755,375		299,264		26,251		243,343		19,359		4,040,655
YTD gross charge-offs	(20,943)		—		—		—		—		—		—		—		(20,943)
Owner occupied - commercial real estate
Pass	628,063		34,703		222,361		41,514		126,663		4,590		515		—		1,058,409
Special Mention	61,117		—		—		—		—		—		—		—		61,117
Substandard	64,791		1,265		—		—		—		—		—		—		66,056
Total	753,971		35,968		222,361		41,514		126,663		4,590		515		—		1,185,582
Real estate mortgage - residential
Pass	29,496		2,175		15,668		14,689		5,889		—		—		—		67,917
Substandard	4,170		—		—		—		—		—		—		—		4,170
Total	33,666		2,175		15,668		14,689		5,889		—		—		—		72,087
Construction - commercial and residential
Pass	77,388		11,101		241,373		485,461		89,757		3,874		136,092		1,177		1,046,223
Special Mention	6,532		—		—		—		—		—		—		—		6,532
Substandard	—		29,801		—		—		—		—		—		—		29,801
Total	83,920		40,902		241,373		485,461		89,757		3,874		136,092		1,177		1,082,556
YTD gross charge-offs	(129)		—		—		—		—		—		—		—		(129)
Construction - C&I (owner occupied)
Pass	26,151		56,094		615		33,242		15,084		—		7,193		—		138,379
Home equity
Pass	1,758		86		185		117		—		—		50,589		146		52,881
Substandard	71		—		237		—		—		—		62		—		370
Total	1,829		86		422		117		—		—		50,651		146		53,251
Other consumer
Pass	2		—		—		—		—		—		956		—		958
Total	2		—		—		—		—		—		956		—		958
YTD gross charge-offs	—		—		—		—		—		—		—		(1)		(1)
Total recorded investment	$	2,937,900	$	495,364	$	1,215,951	$	1,471,860	$	723,714	$	59,319	$	1,048,700	$	29,894	$	7,982,702
Total YTD gross charge-offs	$	(21,468)	$	—	$	—	$	—	$	—	$	—	$	(100)	$	(1)	$	(21,569)
(dollars in thousands)	Prior		2019		2020		2021		2022		2023		Revolving Loans Amort. Cost Basis		Revolving Loans Convert. to Term		Total
December 31, 2023
Commercial
Pass	$	157,563	$	48,524	$	39,133	$	194,555	$	149,320	$	191,889	$	623,684	$	5,207	$	1,409,875
Special Mention	1,415		—		—		—		—		—		2,259		—		3,674
Substandard	13,797		58		10,337		1,509		222		—		33,670		624		60,217
Total	172,775		48,582		49,470		196,064		149,542		191,889		659,613		5,831		1,473,766
YTD gross charge-offs	(885)		—		—		—		—		—		—		(1,135)		(2,020)
PPP loans
Pass	—		—		—		528		—		—		—		—		528
Income producing - commercial real estate
Pass	1,257,937		326,999		328,743		517,957		732,291		327,126		263,317		1,845		3,756,215
Special Mention	84,585		44,424		6,740		—		—		—		—		—		135,749
Substandard	139,961		62,689		—		—		—		—		—		—		202,650
Total	1,482,483		434,112		335,483		517,957		732,291		327,126		263,317		1,845		4,094,614
YTD gross charge-offs	(11,817)		—		—		—		—		—		—		—		(11,817)
Owner occupied - commercial real estate
Pass	534,525		103,034		35,385		202,776		41,907		125,934		673		55		1,044,289
Special Mention	54,288		13,348		—		—		—		—		—		—		67,636
Substandard	37,167		—		1,274		—		—		—		—		21,873		60,314
Total	625,980		116,382		36,659		202,776		41,907		125,934		673		21,928		1,172,239
Real estate mortgage - residential
Pass	22,877		7,545		2,186		15,967		14,756		5,895		—		—		69,226
Substandard	4,170		—		—		—		—		—		—		—		4,170
Total	27,047		7,545		2,186		15,967		14,756		5,895		—		—		73,396
Construction - commercial and residential
Pass	30,619		3,440		45,739		251,038		419,393		87,400		124,013		—		961,642
Substandard	8,124		—		—		—		—		—		—		—		8,124
Total	38,743		3,440		45,739		251,038		419,393		87,400		124,013		—		969,766
YTD Gross Charge-offs	(136)		(5,500)		—		—		—		—		—		—		(5,636)
Construction - C&I (owner occupied)
Pass	18,551		4,265		56,361		618		33,237		12,619		6,370		—		132,021
Home equity
Pass	1,590		—		87		151		118		—		49,035		643		51,624
Substandard	—		36		—		—		—		—		62		242		340
Total	1,590		36		87		151		118		—		49,097		885		51,964
Other consumer
Pass	1		—		—		—		46		—		354		—		401
Total	1		—		—		—		46		—		354		—		401
YTD gross charge-offs	(50)		—		—		—		—		—		—		—		(50)
Total recorded investment	$	2,367,170	$	614,362	$	525,985	$	1,185,099	$	1,391,290	$	750,863	$	1,103,437	$	30,489	$	7,968,695
Total YTD gross charge-offs	$	(12,888)	$	(5,500)	$	—	$	—	$	—	$	—	$	—	$	(1,135)	$	(19,523)

Schedule of Information Related to Nonaccrual Loans by Class

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

(dollars in thousands, except amounts in footnotes)	Nonaccrual with No Allowance for Credit Losses		Nonaccrual with an Allowance for Credit Losses		Total Nonaccrual Loans
March 31, 2024
Commercial	$	1,045	$	875	$	1,920
Income producing - commercial real estate	67,602		—		67,602
Owner occupied - commercial real estate	19,798		—		19,798
Real estate mortgage - residential	—		1,934		1,934
Home equity	237		—		237
Total (1)	$	88,682	$	2,809	$	91,491
December 31, 2023
Commercial	$	1,002	$	1,047	$	2,049
Income producing - commercial real estate	40,926		—		40,926
Owner occupied - commercial real estate	19,836		—		19,836
Real estate mortgage - residential	—		1,946		1,946
Construction - commercial and residential	—		525		525
Home equity	242		—		242
Total (1)	$	62,006	$	3,518	$	65,524

(1)Gross coupon interest income of approximately $1.3 million and $182 thousand would have been recorded for the three months ended March 31, 2024 and 2023, respectively, if nonaccrual loans shown above had been current and in accordance with their original terms, while no coupon interest income was actually recorded on such loans for the three months ended March 31, 2024 and 2023, respectively.

Schedule by Class of Loan, an Aging Analysis and the Recorded Investments in Loans Past Due

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

(dollars in thousands)	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 Days or More Past Due		Total Past Due Loans		Current Loans		Nonaccrual Loans		Total Recorded Investment in Loans
March 31, 2024
Commercial	$	11,175	$	—	$	—	$	11,175	$	1,395,672	$	1,920	$	1,408,767
PPP loans	—		—		—		—		467		—		467
Income producing - commercial real estate	11,106		—		—		11,106		3,961,947		67,602		4,040,655
Owner occupied - commercial real estate	—		—		—		—		1,165,784		19,798		1,185,582
Real estate mortgage - residential	199		—		—		199		69,954		1,934		72,087
Construction - commercial and residential	8,590		—		—		8,590		1,073,966		—		1,082,556
Construction - C&I (owner occupied)	—		—		—		—		138,379		—		138,379
Home equity	—		36		—		36		52,978		237		53,251
Other consumer	2		—		—		2		956		—		958
Total	$	31,072	$	36	$	—	$	31,108	$	7,860,103	$	91,491	$	7,982,702
December 31, 2023
Commercial	$	985	$	7,048	$	—	$	8,033	$	1,463,684	$	2,049	$	1,473,766
PPP loans	—		—		—		—		528		—		528
Income producing - commercial real estate	—		—		—		—		4,053,688		40,926		4,094,614
Owner occupied - commercial real estate	1,274		—		—		1,274		1,151,129		19,836		1,172,239
Real estate mortgage – residential	2,089		—		—		2,089		69,361		1,946		73,396
Construction - commercial and residential	2,056		—		—		2,056		967,185		525		969,766
Construction - C&I (owner occupied)	—		—		—		—		132,021		—		132,021
Home equity	197		—		—		197		51,525		242		51,964
Other consumer	—		—		—		—		401		—		401
Total	$	6,601	$	7,048	$	—	$	13,649	$	7,889,522	$	65,524	$	7,968,695

Schedule of Loans Modified in Troubled Debt Restructurings

The following tables present the amortized cost basis as of March 31, 2024 and 2023 and the financial effect of loans modified to borrowers experiencing financial difficulty during the three months ended March 31, 2024 and 2023:

	March 31, 2024
(dollars in thousands)	Term Extension		Combination - Term Extension and Principal Payment Delay		Total		Percentage of Total Loan Type		Weighted Average Term and Principal Payment Extension
Three months ended March 31, 2024:
Commercial	$	31,553	$	—	$	31,553	2.2	%	4 months
Income producing - commercial real estate	—		50,926		50,926		1.3	%	3 months
Real estate mortgage - residential	—		2,478		2,478		3.4	%	6 months
Total	$	31,553	$	53,404	$	84,957
	March 31, 2023
(dollars in thousands)	Term Extension		Combination - Term Extension and Principal Payment Delay		Total		Percentage of Total Loan Type		Weighted Average Term and Principal Payment Extension
Three months ended March 31, 2023:
Commercial	$	21,744	$	—	$	21,744	1.5	%	3 months
Income producing - commercial real estate	7,211		60,139		67,350		1.7	%	4 months
Owner occupied - commercial real estate	—		19,170		19,170		1.8	%	3 months
Total	$	28,955	$	79,309	$	108,264

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

	March 31, 2024
	Payment Status (Amortized Cost Basis)
(dollars in thousands)	Current		30-89 Days Past Due		Nonaccrual
Commercial	$	37,308	$	1,467	$	—
Income producing - commercial real estate	104,463		—		66,136
Owner occupied - commercial real estate	—		—		19,127
Real estate mortgage - residential	2,478		—		—
Construction - commercial and residential	—		6,532		—
Total	$	144,249	$	7,999	$	85,263

Financing Receivable, Amortized Cost Basis of Loan Had a Payment Default

The following table presents the amortized cost basis of loans that were experiencing payment default at March 31, 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty:

	March 31, 2024
	Amortized Cost Basis
(dollars in thousands)	Term Extension		Combination - Term Extension and Principal Payment Delay		Combination - Term Extension, Principal Payment Delay and Interest Rate Reduction
Commercial	$	—	$	1,467	$	—
Income producing - commercial real estate	—		—		66,136
Owner occupied - commercial real estate	—		19,127		—
Construction - commercial and residential	6,532		—		—
Total	$	6,532	$	20,594	$	66,136

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Leases (Tables)

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Schedule of Lease Costs and Other Lease Information

The following table presents lease costs and other lease information.

	Three Months Ended
(dollars in thousands)	March 31, 2024				March 31, 2023
Lease cost
Operating lease cost (cost resulting from lease payments)	$	1,601			$	1,716
Variable lease cost (cost excluded from lease payments)	241				256
Sublease income	(30)				(30)
Net lease cost	$	1,812			$	1,942
Operating lease - operating cash flows (fixed payments)	$	1,778			$	1,859
(dollars in thousands)	March 31, 2024				December 31, 2023
Right-of-use assets - operating leases	$	17,679			$	19,129
Operating lease liabilities	$	21,611			$	23,238
Weighted average lease term - operating leases	4.81			yrs	4.93			yrs
Weighted average discount rate - operating leases	2.73		%		2.78		%

Schedule of Future Minimum Payments for Operating Leases

Future minimum payments for operating leases with initial or remaining terms of more than one year as of March 31, 2024 were as follows:

(dollars in thousands)
Twelve months ended:
March 31, 2025	$	5,147
March 31, 2026	6,078
March 31, 2027	2,988
March 31, 2028	2,599
March 31, 2029	2,176
Thereafter	3,751
Total future minimum lease payments	22,739
Amounts representing interest	(1,128)
Present value of net future minimum lease payments	$	21,611

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Derivatives (Tables)

3 Months Ended

Mar. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Balance Sheet Category and Fair Values of the Derivative Instruments

The table below identifies the balance sheet category and fair value of the Company's derivative instruments as of March 31, 2024 and December 31, 2023. The Company has a minimum collateral posting threshold with its derivative counterparty. If the Company had breached any provisions under the agreement at March 31, 2024, it could have been required to settle its obligations under the agreement at the termination value.

	March 31, 2024					December 31, 2023
(dollars in thousands)	Notional Amount		Fair Value		Balance Sheet Category	Notional Amount		Fair Value		Balance Sheet Category
Derivatives in an asset position:
Derivatives designated as hedging instruments:
Interest rate product	$	—	$	—	Other assets	$	300,000	$	374	Other assets
Derivatives not designated as hedging instruments:
Interest rate product	680,245		34,147		Other assets	651,429		30,288		Other assets
Credit risk participation agreements	49,480		—		Other liabilities	49,480		3		Other liabilities
Total	729,725		34,147			700,909		30,291
Total derivatives in an asset position:	$	729,725	$	34,147		$	1,000,909	$	30,665
Derivatives in a liability position:
Derivatives not designated as hedging instruments:
Interest rate product	$	680,245	$	33,646	Other liabilities	$	651,429	$	30,555	Other liabilities

Schedule of the Effect of Derivative Financial Instruments on the Consolidated Statements of Operations

The table below presents the effect of the Company's derivative financial instruments on the Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023:

The Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Operations
		Amount of Gain (Loss) Recognized in Income on Derivatives
	Location of Gain (Loss) Recognized in Income on Derivatives	Three Months Ended March 31,
(dollars in thousands)		2024		2023
Interest rate products	Other income / (other expense)	$	239	$	(350)
Mortgage banking derivatives	Gain on sale of loans	—		(64)
Total		$	239	$	(414)

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Deposits (Tables)

3 Months Ended

Mar. 31, 2024

Deposits Liabilities, Balance Sheet, Reported Amounts [Abstract]

Schedule of Deposit Composition and Average Interest Rates

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

(dollars in thousands)	March 31, 2024		December 31, 2023
Noninterest-bearing demand	$	1,835,524	$	2,279,081
Interest-bearing transaction	1,207,566		997,448
Savings and money market	3,235,391		3,314,043
Time deposits	2,222,958		2,217,467
Total	$	8,501,439	$	8,808,039

Schedule of Maturity of Time Deposits

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

(dollars in thousands)	March 31, 2024		December 31, 2023
2024	$	1,294,087	1,445,395
2025	716,191		576,379
2026	195,505		180,384
2027	5,779		5,482
2028	10,162		9,827
2029	1,234		—
Total	$	2,222,958	$	2,217,467

Schedule of Time Deposit Accounts in Excess of $250 Thousand

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

(dollars in thousands)	March 31, 2024		December 31, 2023
Three months or less	$	321,017	$	119,880
More than three months through six months	341,418		318,353
More than six months through twelve months	253,492		368,103
Over twelve months	696,857		726,758
Total	$	1,612,784	$	1,533,094

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Borrowings (Tables)

3 Months Ended

Mar. 31, 2024

Long-Term Debt, Unclassified [Abstract]

Schedules of Short-term Borrowings and Long-term Borrowings

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

(dollars in thousands)	Borrowings - Principal		Unamortized Deferred Issuance Costs		Net Borrowings Outstanding		Available Capacity (1)		Maturity Dates	Interest Rates (2)
March 31, 2024:
Customer repurchase agreements	$	37,059	$	—	$	37,059	$	—	N/A	3.48	%
Secured borrowings:
FHLB	600,000		—		600,000		1,302,153		September 25, 2024	5.53	%
FRB:
BTFP	1,000,000		—		1,000,000		—		January 15, 2025	4.76	%
Discount window	—		—		—		568,602		N/A	N/A
Raymond James repurchase agreement	—		—		—		17,780		N/A	N/A
Subordinated notes, 5.75%	70,000		(52)		69,948		—		September 1, 2024	5.75	%
Total borrowings	$	1,707,059	$	(52)	$	1,707,007	$	1,888,535
December 31, 2023:
Customer repurchase agreements	$	30,587	$	—	$	30,587	$	—	N/A	3.42%
Secured borrowings:
FHLB	—		—		—		1,271,846		N/A	N/A
FRB:
BTFP	1,300,000		—		1,300,000		598,870		March 22, 2024	4.53%
Discount window	—		—		—		601,504		N/A	N/A
Raymond James repurchase agreement	—		—		—		17,993		N/A	N/A
Subordinated notes, 5.75%	70,000		(82)		69,918		—		September 1, 2024	5.75%
Total borrowings	$	1,400,587	$	(82)	$	1,400,505	$	2,490,213

(1)Available capacity on the Company's borrowing arrangements with the FHLB, the FRB and the Raymond James repurchase line comprise pledged collateral that has not been borrowed against. At March 31, 2024, the Company had total additional undrawn borrowing capacity of approximately $2.2 billion, comprising unencumbered securities available to be pledged of approximately $297.5 million and undrawn financing on pledged assets of $1.9 billion.

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

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Net Income (Loss) per Common Share (Tables)

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Schedule of Calculation of Net Income Per Common Share

The calculation of net income per common share for the three months ended March 31, 2024 and 2023 was as follows:

	Three Months Ended March 31,
(dollars and shares in thousands, except per share data)	2024		2023
Basic:
Net (loss) income	$	(338)	$	24,234
Average common shares outstanding	30,068		31,109
Basic net (loss) income per common share	$	(0.01)	$	0.78
Diluted:
Net (loss) income	$	(338)	$	24,234
Average common shares outstanding	30,068		31,109
Adjustment for common share equivalents	—		71
Average common shares outstanding-diluted	30,068		31,180
Diluted net (loss) income per common share	$	(0.01)	$	0.78
Anti-dilutive shares	58		3

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Other Comprehensive (Loss) Income (Tables)

3 Months Ended

Mar. 31, 2024

Other Comprehensive Income [Abstract]

Schedule of Components of Other Comprehensive (Loss) Income

The following table presents the components of other comprehensive (loss) income for the three months ended March 31, 2024 and 2023.

(dollars in thousands)	Before Tax		Tax Effect		Net of Tax
Three Months Ended March 31, 2024
Net unrealized (loss) gain on securities available-for-sale	$	(6,693)	$	1,626	$	(5,067)
Less: Reclassification adjustment for net loss included in net income	(4)		1		(3)
Total unrealized (loss) gain on investment securities available-for-sale	(6,697)		1,627		(5,070)
Amortization of unrealized loss on securities transferred to held-to-maturity	1,731		(346)		1,385
Net unrealized gain on derivatives	363		(89)		274
Other comprehensive (loss) income	$	(4,603)	$	1,192	$	(3,411)
Three Months Ended March 31, 2023
Net unrealized gain (loss) on securities available-for-sale	$	24,039	$	(6,103)	$	17,936
Less: Reclassification adjustment for net loss included in net income	21		(5)		16
Total unrealized gain (loss) on investment securities available-for-sale	24,060		(6,108)		17,952
Amortization of unrealized loss on securities transferred to held-to-maturity	1,983		(1,342)		641
Other comprehensive income (loss)	$	26,043	$	(7,450)	$	18,593

Schedule of Changes in Each Component of Accumulated Other Comprehensive (Loss) Income, Net of Tax

The following table presents the changes in each component of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2024 and 2023.

(dollars in thousands)	Securities Available-For-Sale		Securities Held-to-Maturity		Derivatives		Accumulated Other Comprehensive Income (Loss)
Three Months Ended March 31, 2024
Balance at beginning of period	$	(122,246)	$	(39,929)	$	(182)	$	(162,357)
Other comprehensive (loss) income before reclassifications	(5,067)		—		274		(4,793)
Amounts reclassified from accumulated other comprehensive income	(3)		—		—		(3)
Amortization of unrealized loss on securities transferred to held-to-maturity	—		1,385		—		1,385
Net other comprehensive (loss) income during period	(5,070)		1,385		274		(3,411)
Balance at end of period	$	(127,316)	$	(38,544)	$	92	$	(165,768)
Three Months Ended March 31, 2023
Balance at beginning of period	$	(154,773)	$	(44,734)	$	—	$	(199,507)
Other comprehensive income before reclassifications	17,936		—		—		17,936
Amounts reclassified from accumulated other comprehensive income	16		—		—		16
Amortization of unrealized loss on securities transferred to held-to-maturity	—		641		—		641
Net other comprehensive income during period	17,952		641		—		18,593
Balance at end of period	$	(136,821)	$	(44,093)	$	—	$	(180,914)

Schedule of Amounts Reclassified Out of Accumulated Other Comprehensive (Loss) Income

The following table presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three months ended March 31, 2024 and 2023.

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
	Three Months Ended March 31,				Affected Line Item in Consolidated Statements of Operations
(dollars in thousands)	2024		2023
Realized gain (loss) on sale of investment securities	$	4	$	(21)	Net gain (loss) on sale of investment securities
Income tax benefit (expense)	(1)		5		Income tax expense
Total reclassifications for the periods	$	3	$	(16)

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Schedule of Recorded Amount of Assets and Liabilities Measured at Fair Value on a Recurring Basis

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

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total Fair Value
March 31, 2024
Assets:
Investment securities available-for-sale:
U.S treasury bonds	$	—	$	48,233	$	—	$	48,233
U. S. agency securities	—		639,326		—		639,326
Residential mortgage-backed securities	—		698,550		—		698,550
Commercial mortgage-backed securities	—		48,938		—		48,938
Municipal bonds	—		8,306		—		8,306
Corporate bonds	—		1,681		—		1,681
Interest rate product	—		34,147		—		34,147
Total assets measured at fair value on a recurring basis	$	—	$	1,479,181	$	—	$	1,479,181
Liabilities:
Interest rate product	$	—	$	33,646	$	—	$	33,646
Total liabilities measured at fair value on a recurring basis	$	—	$	33,646	$	—	$	33,646
December 31, 2023
Assets:
Investment securities available-for-sale:
U.S. treasury bonds	$	—	$	47,901	$	—	$	47,901
U. S. agency securities	—		671,397		—		671,397
Residential mortgage-backed securities	—		727,353		—		727,353
Commercial mortgage-backed securities	—		49,564		—		49,564
Municipal bonds	—		8,490		—		8,490
Corporate bonds	—		1,683		—		1,683
Interest rate product	—		30,662		—		30,662
Credit risk participation agreements	—		3		—		3
Total assets measured at fair value on a recurring basis	$	—	$	1,537,053	$	—	$	1,537,053
Liabilities:
Interest rate product	$	—	$	30,555	$	—	$	30,555
Total liabilities measured at fair value on a recurring basis	$	—	$	30,555	$	—	$	30,555

Schedule of Assets Measured at Fair Value on Nonrecurring Basis

Assets measured at fair value on a nonrecurring basis are included in the table below:

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total Fair Value
March 31, 2024
Individually assessed loans:
Commercial	$	—	$	—	$	2,422	$	2,422
Income producing - commercial real estate	—		—		67,602		67,602
Owner occupied - commercial real estate	—		—		19,798		19,798
Real estate mortgage - residential	—		—		1,633		1,633
Home equity	—		—		237		237
Other real estate owned	—		—		773		773
Total assets measured at fair value on a nonrecurring basis as of March 31, 2024	$	—	$	—	$	92,465	$	92,465
December 31, 2023
Individually assessed loans:
Commercial	$	—	$	—	$	2,475	$	2,475
Income producing - commercial real estate	—		—		41,038		41,038
Owner occupied - commercial real estate	—		—		19,880		19,880
Real estate mortgage - residential	—		—		1,638		1,638
Consumer	—		—		396		396
Home equity	—		—		242		242
Other real estate owned	—		—		1,108		1,108
Total assets measured at fair value on a nonrecurring basis as of December 31, 2023	$	—	$	—	$	66,777	$	66,777

Schedule of Estimated Fair Values of Financial Instruments

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

					Fair Value Measurements
(dollars in thousands)	Carrying Value		Fair Value		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
March 31, 2024
Assets
Cash and due from banks	$	10,076	$	10,076	$	10,076	$	—	$	—
Federal funds sold	11,343		11,343		—		11,343		—
Interest-bearing deposits with other banks	696,453		696,453		—		696,453		—
Investment securities available-for-sale	1,445,034		1,445,034		—		1,445,034		—
Investment securities held-to-maturity	1,000,732		878,159		—		878,159		—
Federal Reserve and Federal Home Loan Bank stock	54,678		N/A		—		—		—
Loans	7,982,702		7,596,097		—		—		7,596,097
Bank owned life insurance	113,624		113,624		—		113,624		—
Annuity investment	12,948		12,948		—		12,948		—
Interest rate product	34,147		34,147		—		34,147		—
Accrued interest receivable	54,074		54,074		54,074		—		—
Liabilities
Noninterest-bearing deposits	$	1,835,524	$	1,835,524	$	—	$	1,835,524	$	—
Interest-bearing deposits	4,442,957		4,442,957		—		4,442,957		—
Time deposits	2,222,958		2,217,742		—		2,217,742		—
Customer repurchase agreements	37,059		37,059		—		37,059		—
Borrowings	1,669,948		1,669,043		—		1,669,043		—
Interest rate product	33,646		33,646		—		33,646		—
Accrued interest payable	20,978		20,978		20,978		—		—
December 31, 2023
Assets
Cash and due from banks	$	9,047	$	9,047	$	9,047	$	—	$	—
Federal funds sold	3,740		3,740		—		3,740		—
Interest-bearing deposits with other banks	709,897		709,897		—		709,897		—
Investment securities available-for-sale	1,506,388		1,506,388		—		1,506,388		—
Investment securities held-to-maturity	1,015,737		901,582		—		901,582		—
Federal Reserve and Federal Home Loan Bank stock	25,748		N/A		—		—		—
Loans	7,968,695		7,720,241		—		—		7,720,241
Bank owned life insurance	112,921		112,921		—		112,921		—
Annuity investment	13,112		13,112		—		13,112		—
Credit risk participation agreements	3		3		—		3		—
Interest rate product	30,662		30,662		—		30,662		—
Accrued interest receivable	53,337		53,337		53,337		—		—
Liabilities
Noninterest-bearing deposits	$	2,279,081	$	2,279,081	$	—	$	2,279,081	$	—
Interest-bearing deposits	4,311,491		4,311,491		—		4,311,491		—
Time deposits	2,217,467		2,217,795		—		2,217,795		—
Customer repurchase agreements	30,587		30,587		—		30,587		—
Borrowings	1,369,918		1,368,621		—		1,368,621		—
Interest rate product	30,555		30,555		—		30,555		—
Accrued interest payable	57,395		57,395		57,395		—		—

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Summary of Significant Accounting Policies - Narrative (Details) $ in Millions	3 Months Ended
	Mar. 31, 2024 USD ($) numberOfVariable	Apr. 30, 2024 store
Property, Plant and Equipment [Line Items]
Number of macroeconomic variables	3
Number of economic variables	4
Number of economic scenario variables	3
Number of economic forecast variables	4
Number of variables	2
Reasonable and supportable period (in months)	18 months
Historical loss rate on straight-line basis over loan's remaining maturity (in months)	12 months
Individually-evaluated loan analysis, loan threshold amount | $	$ 1.0
Banking Services | Subsequent Event
Property, Plant and Equipment [Line Items]
Number of locations | store		12
Lending Services | Subsequent Event
Property, Plant and Equipment [Line Items]
Number of locations | store		4

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Summary of Significant Accounting Policies - Schedule Of Provision For Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Accounting Policies [Abstract]
Provision for credit losses - loans	$ 35,174	$ 4,908
Provision for credit losses - HTM debt securities	1	1,242
Provision for credit losses - AFS debt securities	0	14
Total	$ 35,175	$ 6,164

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Cash and Due from Banks (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash and Cash Equivalents [Abstract]
Average balance maintained	$ 1,900.0	$ 662.4

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Investment Securities - Schedule of Available-for-Sale Securities and Held-to-Maturity Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 1,613,659	$ 1,668,316
Gross Unrealized Gains	23	45
Gross Unrealized Losses	(168,631)	(161,956)
Less: allowance for credit losses	(17)	(17)
Estimated Fair Value	1,445,034	1,506,388
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	1,002,689	1,017,693
Allowance for credit losses	(1,957)	(1,956)
Total held-to-maturity securities, net of ACL	1,000,732	1,015,737
Gross Unrecognized Gains	0	5
Gross Unrecognized Losses	(124,530)	(116,116)
Estimated Fair Value	878,159	901,582
U.S. treasury bonds
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	49,919	49,894
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(1,686)	(1,993)
Less: allowance for credit losses	0	0
Estimated Fair Value	48,233	47,901
U. S. agency securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	698,189	729,090
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(58,863)	(57,693)
Less: allowance for credit losses	0	0
Estimated Fair Value	639,326	671,397
Residential mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	800,793	823,992
Gross Unrealized Gains	23	45
Gross Unrealized Losses	(102,266)	(96,684)
Less: allowance for credit losses	0	0
Estimated Fair Value	698,550	727,353
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	655,388	670,043
Gross Unrecognized Gains	0	0
Gross Unrecognized Losses	(87,348)	(79,980)
Estimated Fair Value	568,040	590,063
Commercial mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	54,018	54,557
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(5,080)	(4,993)
Less: allowance for credit losses	0	0
Estimated Fair Value	48,938	49,564
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	89,966	90,227
Gross Unrecognized Gains	0	0
Gross Unrecognized Losses	(13,000)	(12,867)
Estimated Fair Value	76,966	77,360
Municipal bonds
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	8,740	8,783
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(434)	(293)
Less: allowance for credit losses	0	0
Estimated Fair Value	8,306	8,490
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	125,003	125,114
Gross Unrecognized Gains	0	5
Gross Unrecognized Losses	(9,789)	(8,540)
Estimated Fair Value	115,214	116,579
Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	2,000	2,000
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(302)	(300)
Less: allowance for credit losses	(17)	(17)
Estimated Fair Value	1,681	1,683
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	132,332	132,309
Gross Unrecognized Gains	0	0
Gross Unrecognized Losses	(14,393)	(14,729)
Estimated Fair Value	$ 117,939	$ 117,580

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Investment Securities - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Debt Securities, Available-for-sale [Line Items]
Federal Reserve and Federal Home Loan Bank stock	$ 54,678		$ 25,748
Provision for credit losses - HTM debt securities	1	$ 1,242
Provision for credit losses - AFS debt securities	0	14
Allowance for credit losses	17		17
HTM Allowance for credit losses	1,957		$ 1,956
Debt securities, available-for-sale, realized gain	4	5
Debt securities, available-for-sale, realized loss	0	(26)
Gross proceeds from sales and calls	$ 27,100	$ 8,400
Holdings of securities of any one issuer	10.00%		10.00%
Collateral Pledged
Debt Securities, Available-for-sale [Line Items]
Debt securities, available-for-sale, restricted	$ 2,100,000
Other Assets
Debt Securities, Available-for-sale [Line Items]
Accrued interest on available for sale securities	7,800		$ 7,600
Residential mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Unrealized loss	50,000		51,700
Allowance for credit losses	$ 0		$ 0

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Investment Securities - Schedule of Gross Unrealized Losses and Fair Value by Length of Time that the Individual Available-For-Sale Securities Have Been in a Continuous Unrealized Loss (Details) $ in Thousands	Mar. 31, 2024 USD ($) security	Dec. 31, 2023 USD ($) security
Debt Securities, Available-for-sale [Line Items]
Investment securities available-for-sale, Number of securities | security	244	244
Investment securities available-for-sale, Less than 12 months, estimated fair value	$ 11,084	$ 3,084
Investment securities available-for-sale, Less than 12 months, unrealized losses	(65)	(4)
Investment securities available-for-sale, 12 months or greater, estimated fair value	1,432,105	1,493,993
Investment securities available-for-sale, 12 months or greater, unrealized losses	(168,566)	(161,952)
Investment securities available-for-sale, Estimated fair value	1,443,189	1,497,077
Investment securities available-for-sale, Unrealized losses	$ (168,631)	$ (161,956)
Investment securities held-to-maturity, Number of securities | security	230	228
Investment securities held-to-maturity, Less than 12 months, estimated fair value	$ 3,474	$ 0
Investment securities held-to-maturity, Less than 12 months, unrealized losses	(63)	0
Investment securities held-to-maturity, 12 months or greater, estimated fair value	862,633	885,977
Investment securities held-to-maturity, 12 months or greater, unrealized losses	(124,467)	(116,116)
Investment securities held-to-maturity, Estimated Fair Value	866,107	885,977
Investment securities held-to-maturity, Unrealized losses	$ (124,530)	$ (116,116)
U.S. treasury bonds
Debt Securities, Available-for-sale [Line Items]
Investment securities available-for-sale, Number of securities | security	2	2
Investment securities available-for-sale, Less than 12 months, estimated fair value	$ 0	$ 0
Investment securities available-for-sale, Less than 12 months, unrealized losses	0	0
Investment securities available-for-sale, 12 months or greater, estimated fair value	48,233	47,901
Investment securities available-for-sale, 12 months or greater, unrealized losses	(1,686)	(1,993)
Investment securities available-for-sale, Estimated fair value	48,233	47,901
Investment securities available-for-sale, Unrealized losses	$ (1,686)	$ (1,993)
U. S. agency securities
Debt Securities, Available-for-sale [Line Items]
Investment securities available-for-sale, Number of securities | security	76	78
Investment securities available-for-sale, Less than 12 months, estimated fair value	$ 2,904	$ 3,084
Investment securities available-for-sale, Less than 12 months, unrealized losses	(5)	(4)
Investment securities available-for-sale, 12 months or greater, estimated fair value	636,422	668,313
Investment securities available-for-sale, 12 months or greater, unrealized losses	(58,858)	(57,689)
Investment securities available-for-sale, Estimated fair value	639,326	671,397
Investment securities available-for-sale, Unrealized losses	$ (58,863)	$ (57,693)
Residential mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Investment securities available-for-sale, Number of securities | security	151	149
Investment securities available-for-sale, Less than 12 months, estimated fair value	$ 8,180	$ 0
Investment securities available-for-sale, Less than 12 months, unrealized losses	(60)	0
Investment securities available-for-sale, 12 months or greater, estimated fair value	688,525	718,042
Investment securities available-for-sale, 12 months or greater, unrealized losses	(102,206)	(96,684)
Investment securities available-for-sale, Estimated fair value	696,705	718,042
Investment securities available-for-sale, Unrealized losses	$ (102,266)	$ (96,684)
Investment securities held-to-maturity, Number of securities | security	142	142
Investment securities held-to-maturity, Less than 12 months, estimated fair value	$ 0	$ 0
Investment securities held-to-maturity, Less than 12 months, unrealized losses	0	0
Investment securities held-to-maturity, 12 months or greater, estimated fair value	568,040	590,063
Investment securities held-to-maturity, 12 months or greater, unrealized losses	(87,348)	(79,980)
Investment securities held-to-maturity, Estimated Fair Value	568,040	590,063
Investment securities held-to-maturity, Unrealized losses	$ (87,348)	$ (79,980)
Commercial mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Investment securities available-for-sale, Number of securities | security	13	13
Investment securities available-for-sale, Less than 12 months, estimated fair value	$ 0	$ 0
Investment securities available-for-sale, Less than 12 months, unrealized losses	0	0
Investment securities available-for-sale, 12 months or greater, estimated fair value	48,938	49,564
Investment securities available-for-sale, 12 months or greater, unrealized losses	(5,080)	(4,993)
Investment securities available-for-sale, Estimated fair value	48,938	49,564
Investment securities available-for-sale, Unrealized losses	$ (5,080)	$ (4,993)
Investment securities held-to-maturity, Number of securities | security	16	16
Investment securities held-to-maturity, Less than 12 months, estimated fair value	$ 0	$ 0
Investment securities held-to-maturity, Less than 12 months, unrealized losses	0	0
Investment securities held-to-maturity, 12 months or greater, estimated fair value	76,966	77,360
Investment securities held-to-maturity, 12 months or greater, unrealized losses	(13,000)	(12,867)
Investment securities held-to-maturity, Estimated Fair Value	76,966	77,360
Investment securities held-to-maturity, Unrealized losses	$ (13,000)	$ (12,867)
Municipal bonds
Debt Securities, Available-for-sale [Line Items]
Investment securities available-for-sale, Number of securities | security	1	1
Investment securities available-for-sale, Less than 12 months, estimated fair value	$ 0	$ 0
Investment securities available-for-sale, Less than 12 months, unrealized losses	0	0
Investment securities available-for-sale, 12 months or greater, estimated fair value	8,306	8,490
Investment securities available-for-sale, 12 months or greater, unrealized losses	(434)	(293)
Investment securities available-for-sale, Estimated fair value	8,306	8,490
Investment securities available-for-sale, Unrealized losses	$ (434)	$ (293)
Investment securities held-to-maturity, Number of securities | security	42	40
Investment securities held-to-maturity, Less than 12 months, estimated fair value	$ 3,474	$ 0
Investment securities held-to-maturity, Less than 12 months, unrealized losses	(63)	0
Investment securities held-to-maturity, 12 months or greater, estimated fair value	111,740	113,031
Investment securities held-to-maturity, 12 months or greater, unrealized losses	(9,726)	(8,540)
Investment securities held-to-maturity, Estimated Fair Value	115,214	113,031
Investment securities held-to-maturity, Unrealized losses	$ (9,789)	$ (8,540)
Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Investment securities available-for-sale, Number of securities | security	1	1
Investment securities available-for-sale, Less than 12 months, estimated fair value	$ 0	$ 0
Investment securities available-for-sale, Less than 12 months, unrealized losses	0	0
Investment securities available-for-sale, 12 months or greater, estimated fair value	1,681	1,683
Investment securities available-for-sale, 12 months or greater, unrealized losses	(302)	(300)
Investment securities available-for-sale, Estimated fair value	1,681	1,683
Investment securities available-for-sale, Unrealized losses	$ (302)	$ (300)
Investment securities held-to-maturity, Number of securities | security	30	30
Investment securities held-to-maturity, Less than 12 months, estimated fair value	$ 0	$ 0
Investment securities held-to-maturity, Less than 12 months, unrealized losses	0	0
Investment securities held-to-maturity, 12 months or greater, estimated fair value	105,887	105,523
Investment securities held-to-maturity, 12 months or greater, unrealized losses	(14,393)	(14,729)
Investment securities held-to-maturity, Estimated Fair Value	105,887	105,523
Investment securities held-to-maturity, Unrealized losses	$ (14,393)	$ (14,729)

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Investment Securities - Schedule of Amortized Cost and Estimated Fair Value of Investments Available-for-Sale by Contractual Maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Amortized Cost
Total investment securities available-for-sale	$ 1,613,659	$ 1,668,316
Estimated Fair Value
Less: allowance for credit losses	(17)	(17)
Total investment securities available-for-sale	1,445,034
Amortized Cost
Less: allowance for credit losses	1,957	1,956
Total held-to-maturity securities, net of ACL	1,000,732	1,015,737
Estimated Fair Value
Total investment securities held-to-maturity	878,159	901,582
Asset-Backed Securities
Amortized Cost
Within one year	139,224
One to five years	486,394
Five to ten years	112,838
Beyond ten years	20,392
Estimated Fair Value
Within one year	135,426
One to five years	446,955
Five to ten years	97,570
Beyond ten years	17,612
Amortized Cost
Within one year	4,282
One to five years	61,707
Five to ten years	117,237
Beyond ten years	74,109
Less: allowance for credit losses	1,957
Total held-to-maturity securities, net of ACL	1,000,732
Total	2,614,391
Estimated Fair Value
Within one year	4,247
One to five years	59,309
Five to ten years	102,274
Beyond ten years	67,323
Total investment securities held-to-maturity	878,159
Total	2,323,193
Residential mortgage-backed securities
Amortized Cost
Amortized cost, without maturity date	800,793
Total investment securities available-for-sale	800,793	823,992
Estimated Fair Value
Estimated fair value, without maturity date	698,550
Less: allowance for credit losses	0	0
Amortized Cost
Amortized cost, without maturity date	655,388
Estimated Fair Value
Estimated fair value, without maturity date	568,040
Total investment securities held-to-maturity	568,040	590,063
Commercial mortgage-backed securities
Amortized Cost
Amortized cost, without maturity date	54,018
Total investment securities available-for-sale	54,018	54,557
Estimated Fair Value
Estimated fair value, without maturity date	48,938
Less: allowance for credit losses	0	0
Amortized Cost
Amortized cost, without maturity date	89,966
Estimated Fair Value
Estimated fair value, without maturity date	76,966
Total investment securities held-to-maturity	$ 76,966	$ 77,360

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Loans and Allowance for Credit Losses - Schedule of Loans, Net of Unamortized Net Deferred Fees (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023	Dec. 31, 2022
Loans and Leases Receivable Disclosure [Line Items]
Loans	$ 7,982,702	$ 7,968,695
Less: allowance for credit losses	(99,684)	(85,940)	$ (78,377)	$ (74,444)
Loans, net	$ 7,883,018	$ 7,882,755
Financing receivable, percent	100.00%	100.00%
Accrued interest receivable
Loans and Leases Receivable Disclosure [Line Items]
Accrued interest on available for sale securities	$ 46,300	$ 45,300
Commercial
Loans and Leases Receivable Disclosure [Line Items]
Loans	1,408,767	1,473,766
Less: allowance for credit losses	$ (23,682)	$ (17,824)	(15,775)	(15,655)
Financing receivable, percent	18.00%	18.00%
PPP loans
Loans and Leases Receivable Disclosure [Line Items]
Loans	$ 467	$ 528
Financing receivable, percent	0.00%	0.00%
Income-producing - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Loans	$ 4,040,655	$ 4,094,614
Less: allowance for credit losses	$ (45,937)	$ (40,050)	(38,140)	(35,688)
Financing receivable, percent	50.00%	51.00%
Owner-occupied - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Loans	$ 1,185,582	$ 1,172,239
Less: allowance for credit losses	$ (13,537)	$ (14,333)	(12,457)	(12,702)
Financing receivable, percent	15.00%	15.00%
Real estate mortgage - residential
Loans and Leases Receivable Disclosure [Line Items]
Loans	$ 72,087	$ 73,396
Less: allowance for credit losses	$ (893)	$ (861)	(1,002)	(969)
Financing receivable, percent	1.00%	1.00%
Construction - commercial and residential
Loans and Leases Receivable Disclosure [Line Items]
Loans	$ 1,082,556	$ 969,766
Less: allowance for credit losses	(13,058)	(10,198)	(8,741)	(7,195)
Construction - commercial and residential | Commercial and Residential
Loans and Leases Receivable Disclosure [Line Items]
Loans	$ 1,082,556	$ 969,766
Financing receivable, percent	13.00%	12.00%
Construction - C&I (owner occupied)
Loans and Leases Receivable Disclosure [Line Items]
Loans	$ 138,379	$ 132,021
Construction - C&I (owner occupied) | Construction - C&I (owner occupied)
Loans and Leases Receivable Disclosure [Line Items]
Loans	$ 138,379	$ 132,021
Financing receivable, percent	2.00%	2.00%
Home equity
Loans and Leases Receivable Disclosure [Line Items]
Loans	$ 53,251	$ 51,964
Less: allowance for credit losses	$ (618)	$ (657)	(593)	(555)
Financing receivable, percent	1.00%	1.00%
Other consumer
Loans and Leases Receivable Disclosure [Line Items]
Loans	$ 958	$ 401
Less: allowance for credit losses	$ (30)	$ (25)	$ (27)	$ (74)
Financing receivable, percent	0.00%	0.00%

XML

Loans and Allowance for Credit Losses - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)
Loans and Leases Receivable Disclosure [Line Items]
Deferred commitment fee	$ 24,100	$ 27,000
Servicing asset at fair value	334,100	328,000
Loans, net	7,883,018	$ 7,882,755
ADC Loans
Loans and Leases Receivable Disclosure [Line Items]
Loans, net	$ 1,600,000
Percent of ADC loan portfolio using interest reserves	58.50%
Income Producing Commercial Real Estate and Real Estate Construction
Loans and Leases Receivable Disclosure [Line Items]
Stress test assumption increase interest rates	2.00%
Minimum | Income Producing Commercial Real Estate and Real Estate Construction
Loans and Leases Receivable Disclosure [Line Items]
Minimum cash flow debt service coverage ratio	1.15
Minimum | Commercial
Loans and Leases Receivable Disclosure [Line Items]
Loan period, preferred term	5 years
Maximum | Real estate mortgage - residential | Land Acquisition Development and Construction Loans
Loans and Leases Receivable Disclosure [Line Items]
Loan period	36 months
Maximum | Construction - commercial and residential | Land Acquisition Development and Construction Loans
Loans and Leases Receivable Disclosure [Line Items]
Loan period	24 months
Maximum | Income Producing Commercial Real Estate and Real Estate Construction
Loans and Leases Receivable Disclosure [Line Items]
Minimum cash flow debt service coverage ratio	1.0
Maximum | Commercial
Loans and Leases Receivable Disclosure [Line Items]
Loan period	10 years
Loan period, preferred term	7 years
Amortization term	25 years

XML

Loans and Allowance for Credit Losses - Schedule of Detail Activity in the Allowance for Credit Losses by Portfolio Segment (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	$ 85,940	$ 74,444	$ 74,444
Loans charged-off	(21,569)	(1,054)	(19,523)
Recoveries of loans previously charged-off	139	79
Net loans (charged-off) recovered	(21,430)	(975)
Provision for (reversal of) credit losses	35,174	4,908
Ending Balance	99,684	78,377	85,940
Commercial
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	17,824	15,655	15,655
Loans charged-off	(496)	(868)	(2,020)
Recoveries of loans previously charged-off	115	76
Net loans (charged-off) recovered	(381)	(792)
Provision for (reversal of) credit losses	6,239	912
Ending Balance	23,682	15,775	17,824
Income-producing - commercial real estate
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	40,050	35,688	35,688
Loans charged-off	(20,943)	0	(11,817)
Recoveries of loans previously charged-off	0	0
Net loans (charged-off) recovered	(20,943)	0
Provision for (reversal of) credit losses	26,830	2,452
Ending Balance	45,937	38,140	40,050
Owner-occupied - commercial real estate
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	14,333	12,702	12,702
Loans charged-off	0	0
Recoveries of loans previously charged-off	24	0
Net loans (charged-off) recovered	24	0
Provision for (reversal of) credit losses	(820)	(245)
Ending Balance	13,537	12,457	14,333
Real estate mortgage - residential
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	861	969	969
Loans charged-off	0	0
Recoveries of loans previously charged-off	0	0
Net loans (charged-off) recovered	0	0
Provision for (reversal of) credit losses	32	33
Ending Balance	893	1,002	861
Construction - commercial and residential
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	10,198	7,195	7,195
Loans charged-off	(129)	(136)	(5,636)
Recoveries of loans previously charged-off	0	0
Net loans (charged-off) recovered	(129)	(136)
Provision for (reversal of) credit losses	2,989	1,682
Ending Balance	13,058	8,741	10,198
Construction - C&I (Owner-Occupied)
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	1,992	1,606	1,606
Loans charged-off	0	0
Recoveries of loans previously charged-off	0	0
Net loans (charged-off) recovered	0	0
Provision for (reversal of) credit losses	(63)	36
Ending Balance	1,929	1,642	1,992
Home equity
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	657	555	555
Loans charged-off	0	0
Recoveries of loans previously charged-off	0	0
Net loans (charged-off) recovered	0	0
Provision for (reversal of) credit losses	(39)	38
Ending Balance	618	593	657
Other consumer
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	25	74	74
Loans charged-off	(1)	(50)	(50)
Recoveries of loans previously charged-off	0	3
Net loans (charged-off) recovered	(1)	(47)
Provision for (reversal of) credit losses	6	0
Ending Balance	$ 30	$ 27	$ 25

XML

Loans and Allowance for Credit Losses - Schedule of Amortized Cost Basis of Collateral-Dependent Loans by Class of Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, net	$ 7,883,018	$ 7,882,755
Business or Other Assets
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, net	2,410	3,428
Business or Other Assets | Commercial
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, net	1,532	1,674
Business or Other Assets | Income-producing - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, net	878	1,754
Business or Other Assets | Owner-occupied - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, net	0	0
Business or Other Assets | Real estate mortgage - residential
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, net	0	0
Business or Other Assets | Construction - commercial and residential
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, net	0	0
Business or Other Assets | Home equity
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, net	0	0
Real Estate
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, net	89,669	62,707
Real Estate | Commercial
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, net	1,218	1,240
Real Estate | Income-producing - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, net	66,724	39,172
Real Estate | Owner-occupied - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, net	19,798	19,836
Real Estate | Real estate mortgage - residential
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, net	1,692	1,692
Real Estate | Construction - commercial and residential
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, net	0	525
Real Estate | Home equity
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, net	$ 237	$ 242

XML

Loans and Allowance for Credit Losses - Schedule of the Risk Category of Loans by Class of Loans (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Loans and Leases Receivable Disclosure [Abstract]
Prior	$ 2,937,900		$ 2,367,170
Originated, four years before current fiscal year	495,364		614,362
Originated, three years before current fiscal year	1,215,951		525,985
Originated, two years before current fiscal year	1,471,860		1,185,099
Originated, fiscal year before current fiscal year	723,714		1,391,290
Originated, current fiscal year	59,319		750,863
Revolving Loans Amort. Cost Basis	1,048,700		1,103,437
Revolving Loans Convert. to Term	29,894		30,489
Loans	7,982,702		7,968,695
Financial Asset, Write Offs [Abstract]
Prior	(21,468)		(12,888)
Originated, four years before current fiscal year	0		(5,500)
Originated, three years before current fiscal year	0		0
Originated, two years before current fiscal year	0		0
Originated, fiscal year before current fiscal year	0		0
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	(100)		0
Revolving Loans Convert. to Term	(1)		(1,135)
YTD Gross Charge-offs	(21,569)	$ (1,054)	(19,523)
Commercial
Loans and Leases Receivable Disclosure [Abstract]
Prior	216,019		172,775
Originated, four years before current fiscal year	44,822		48,582
Originated, three years before current fiscal year	175,641		49,470
Originated, two years before current fiscal year	141,462		196,064
Originated, fiscal year before current fiscal year	187,057		149,542
Originated, current fiscal year	24,604		191,889
Revolving Loans Amort. Cost Basis	609,950		659,613
Revolving Loans Convert. to Term	9,212		5,831
Loans	1,408,767		1,473,766
Financial Asset, Write Offs [Abstract]
Prior	(396)		(885)
Originated, four years before current fiscal year	0		0
Originated, three years before current fiscal year	0		0
Originated, two years before current fiscal year	0		0
Originated, fiscal year before current fiscal year	0		0
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	(100)		0
Revolving Loans Convert. to Term	0		(1,135)
YTD Gross Charge-offs	(496)	(868)	(2,020)
Commercial | Pass
Loans and Leases Receivable Disclosure [Abstract]
Prior	193,755		157,563
Originated, four years before current fiscal year	35,451		48,524
Originated, three years before current fiscal year	174,103		39,133
Originated, two years before current fiscal year	141,181		194,555
Originated, fiscal year before current fiscal year	187,057		149,320
Originated, current fiscal year	24,604		191,889
Revolving Loans Amort. Cost Basis	569,226		623,684
Revolving Loans Convert. to Term	1,154		5,207
Loans	1,326,531		1,409,875
Commercial | Special Mention
Loans and Leases Receivable Disclosure [Abstract]
Prior	8,493		1,415
Originated, four years before current fiscal year	0		0
Originated, three years before current fiscal year	0		0
Originated, two years before current fiscal year	0		0
Originated, fiscal year before current fiscal year	0		0
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	4,286		2,259
Revolving Loans Convert. to Term	8,058		0
Loans	20,837		3,674
Commercial | Substandard
Loans and Leases Receivable Disclosure [Abstract]
Prior	13,771		13,797
Originated, four years before current fiscal year	9,371		58
Originated, three years before current fiscal year	1,538		10,337
Originated, two years before current fiscal year	281		1,509
Originated, fiscal year before current fiscal year	0		222
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	36,438		33,670
Revolving Loans Convert. to Term	0		624
Loans	61,399		60,217
PPP loans
Loans and Leases Receivable Disclosure [Abstract]
Loans	467		528
PPP loans | Pass
Loans and Leases Receivable Disclosure [Abstract]
Prior	0		0
Originated, four years before current fiscal year	0		0
Originated, three years before current fiscal year	467		0
Originated, two years before current fiscal year	0		528
Originated, fiscal year before current fiscal year	0		0
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	0		0
Revolving Loans Convert. to Term	0		0
Loans	467		528
Income-producing - commercial real estate
Loans and Leases Receivable Disclosure [Abstract]
Prior	1,822,342		1,482,483
Originated, four years before current fiscal year	315,317		434,112
Originated, three years before current fiscal year	559,404		335,483
Originated, two years before current fiscal year	755,375		517,957
Originated, fiscal year before current fiscal year	299,264		732,291
Originated, current fiscal year	26,251		327,126
Revolving Loans Amort. Cost Basis	243,343		263,317
Revolving Loans Convert. to Term	19,359		1,845
Loans	4,040,655		4,094,614
Financial Asset, Write Offs [Abstract]
Prior	(20,943)		(11,817)
Originated, four years before current fiscal year	0		0
Originated, three years before current fiscal year	0		0
Originated, two years before current fiscal year	0		0
Originated, fiscal year before current fiscal year	0		0
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	0		0
Revolving Loans Convert. to Term	0		0
YTD Gross Charge-offs	(20,943)	0	(11,817)
Income-producing - commercial real estate | Pass
Loans and Leases Receivable Disclosure [Abstract]
Prior	1,452,244		1,257,937
Originated, four years before current fiscal year	308,573		326,999
Originated, three years before current fiscal year	559,404		328,743
Originated, two years before current fiscal year	755,375		517,957
Originated, fiscal year before current fiscal year	299,264		732,291
Originated, current fiscal year	26,251		327,126
Revolving Loans Amort. Cost Basis	243,343		263,317
Revolving Loans Convert. to Term	19,359		1,845
Loans	3,663,813		3,756,215
Income-producing - commercial real estate | Special Mention
Loans and Leases Receivable Disclosure [Abstract]
Prior	170,118		84,585
Originated, four years before current fiscal year	6,744		44,424
Originated, three years before current fiscal year	0		6,740
Originated, two years before current fiscal year	0		0
Originated, fiscal year before current fiscal year	0		0
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	0		0
Revolving Loans Convert. to Term	0		0
Loans	176,862		135,749
Income-producing - commercial real estate | Substandard
Loans and Leases Receivable Disclosure [Abstract]
Prior	199,980		139,961
Originated, four years before current fiscal year	0		62,689
Originated, three years before current fiscal year	0		0
Originated, two years before current fiscal year	0		0
Originated, fiscal year before current fiscal year	0		0
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	0		0
Revolving Loans Convert. to Term	0		0
Loans	199,980		202,650
Owner-occupied - commercial real estate
Loans and Leases Receivable Disclosure [Abstract]
Prior	753,971		625,980
Originated, four years before current fiscal year	35,968		116,382
Originated, three years before current fiscal year	222,361		36,659
Originated, two years before current fiscal year	41,514		202,776
Originated, fiscal year before current fiscal year	126,663		41,907
Originated, current fiscal year	4,590		125,934
Revolving Loans Amort. Cost Basis	515		673
Revolving Loans Convert. to Term	0		21,928
Loans	1,185,582		1,172,239
Financial Asset, Write Offs [Abstract]
YTD Gross Charge-offs	0	0
Owner-occupied - commercial real estate | Pass
Loans and Leases Receivable Disclosure [Abstract]
Prior	628,063		534,525
Originated, four years before current fiscal year	34,703		103,034
Originated, three years before current fiscal year	222,361		35,385
Originated, two years before current fiscal year	41,514		202,776
Originated, fiscal year before current fiscal year	126,663		41,907
Originated, current fiscal year	4,590		125,934
Revolving Loans Amort. Cost Basis	515		673
Revolving Loans Convert. to Term	0		55
Loans	1,058,409		1,044,289
Owner-occupied - commercial real estate | Special Mention
Loans and Leases Receivable Disclosure [Abstract]
Prior	61,117		54,288
Originated, four years before current fiscal year	0		13,348
Originated, three years before current fiscal year	0		0
Originated, two years before current fiscal year	0		0
Originated, fiscal year before current fiscal year	0		0
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	0		0
Revolving Loans Convert. to Term	0		0
Loans	61,117		67,636
Owner-occupied - commercial real estate | Substandard
Loans and Leases Receivable Disclosure [Abstract]
Prior	64,791		37,167
Originated, four years before current fiscal year	1,265		0
Originated, three years before current fiscal year	0		1,274
Originated, two years before current fiscal year	0		0
Originated, fiscal year before current fiscal year	0		0
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	0		0
Revolving Loans Convert. to Term	0		21,873
Loans	66,056		60,314
Real estate mortgage - residential
Loans and Leases Receivable Disclosure [Abstract]
Prior	33,666		27,047
Originated, four years before current fiscal year	2,175		7,545
Originated, three years before current fiscal year	15,668		2,186
Originated, two years before current fiscal year	14,689		15,967
Originated, fiscal year before current fiscal year	5,889		14,756
Originated, current fiscal year	0		5,895
Revolving Loans Amort. Cost Basis	0		0
Revolving Loans Convert. to Term	0		0
Loans	72,087		73,396
Financial Asset, Write Offs [Abstract]
YTD Gross Charge-offs	0	0
Real estate mortgage - residential | Pass
Loans and Leases Receivable Disclosure [Abstract]
Prior	29,496		22,877
Originated, four years before current fiscal year	2,175		7,545
Originated, three years before current fiscal year	15,668		2,186
Originated, two years before current fiscal year	14,689		15,967
Originated, fiscal year before current fiscal year	5,889		14,756
Originated, current fiscal year	0		5,895
Revolving Loans Amort. Cost Basis	0		0
Revolving Loans Convert. to Term	0		0
Loans	67,917		69,226
Real estate mortgage - residential | Substandard
Loans and Leases Receivable Disclosure [Abstract]
Prior	4,170		4,170
Originated, four years before current fiscal year	0		0
Originated, three years before current fiscal year	0		0
Originated, two years before current fiscal year	0		0
Originated, fiscal year before current fiscal year	0		0
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	0		0
Revolving Loans Convert. to Term	0		0
Loans	4,170		4,170
Construction - commercial and residential
Loans and Leases Receivable Disclosure [Abstract]
Prior	83,920		38,743
Originated, four years before current fiscal year	40,902		3,440
Originated, three years before current fiscal year	241,373		45,739
Originated, two years before current fiscal year	485,461		251,038
Originated, fiscal year before current fiscal year	89,757		419,393
Originated, current fiscal year	3,874		87,400
Revolving Loans Amort. Cost Basis	136,092		124,013
Revolving Loans Convert. to Term	1,177		0
Loans	1,082,556		969,766
Financial Asset, Write Offs [Abstract]
Prior	(129)		(136)
Originated, four years before current fiscal year	0		(5,500)
Originated, three years before current fiscal year	0		0
Originated, two years before current fiscal year	0		0
Originated, fiscal year before current fiscal year	0		0
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	0		0
Revolving Loans Convert. to Term	0		0
YTD Gross Charge-offs	(129)	(136)	(5,636)
Construction - commercial and residential | Pass
Loans and Leases Receivable Disclosure [Abstract]
Prior	77,388		30,619
Originated, four years before current fiscal year	11,101		3,440
Originated, three years before current fiscal year	241,373		45,739
Originated, two years before current fiscal year	485,461		251,038
Originated, fiscal year before current fiscal year	89,757		419,393
Originated, current fiscal year	3,874		87,400
Revolving Loans Amort. Cost Basis	136,092		124,013
Revolving Loans Convert. to Term	1,177		0
Loans	1,046,223		961,642
Construction - commercial and residential | Special Mention
Loans and Leases Receivable Disclosure [Abstract]
Prior	6,532
Originated, four years before current fiscal year	0
Originated, three years before current fiscal year	0
Originated, two years before current fiscal year	0
Originated, fiscal year before current fiscal year	0
Originated, current fiscal year	0
Revolving Loans Amort. Cost Basis	0
Revolving Loans Convert. to Term	0
Loans	6,532
Construction - commercial and residential | Substandard
Loans and Leases Receivable Disclosure [Abstract]
Prior	0		8,124
Originated, four years before current fiscal year	29,801		0
Originated, three years before current fiscal year	0		0
Originated, two years before current fiscal year	0		0
Originated, fiscal year before current fiscal year	0		0
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	0		0
Revolving Loans Convert. to Term	0		0
Loans	29,801		8,124
Construction - C&I (owner occupied) | Pass
Loans and Leases Receivable Disclosure [Abstract]
Prior	26,151		18,551
Originated, four years before current fiscal year	56,094		4,265
Originated, three years before current fiscal year	615		56,361
Originated, two years before current fiscal year	33,242		618
Originated, fiscal year before current fiscal year	15,084		33,237
Originated, current fiscal year	0		12,619
Revolving Loans Amort. Cost Basis	7,193		6,370
Revolving Loans Convert. to Term	0		0
Loans	138,379		132,021
Home equity
Loans and Leases Receivable Disclosure [Abstract]
Prior	1,829		1,590
Originated, four years before current fiscal year	86		36
Originated, three years before current fiscal year	422		87
Originated, two years before current fiscal year	117		151
Originated, fiscal year before current fiscal year	0		118
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	50,651		49,097
Revolving Loans Convert. to Term	146		885
Loans	53,251		51,964
Financial Asset, Write Offs [Abstract]
YTD Gross Charge-offs	0	0
Home equity | Pass
Loans and Leases Receivable Disclosure [Abstract]
Prior	1,758		1,590
Originated, four years before current fiscal year	86		0
Originated, three years before current fiscal year	185		87
Originated, two years before current fiscal year	117		151
Originated, fiscal year before current fiscal year	0		118
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	50,589		49,035
Revolving Loans Convert. to Term	146		643
Loans	52,881		51,624
Home equity | Substandard
Loans and Leases Receivable Disclosure [Abstract]
Prior	71		0
Originated, four years before current fiscal year	0		36
Originated, three years before current fiscal year	237		0
Originated, two years before current fiscal year	0		0
Originated, fiscal year before current fiscal year	0		0
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	62		62
Revolving Loans Convert. to Term	0		242
Loans	370		340
Other consumer
Loans and Leases Receivable Disclosure [Abstract]
Prior	2		1
Originated, four years before current fiscal year	0		0
Originated, three years before current fiscal year	0		0
Originated, two years before current fiscal year	0		0
Originated, fiscal year before current fiscal year	0		46
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	956		354
Revolving Loans Convert. to Term	0		0
Loans	958		401
Financial Asset, Write Offs [Abstract]
Prior	0		(50)
Originated, four years before current fiscal year	0		0
Originated, three years before current fiscal year	0		0
Originated, two years before current fiscal year	0		0
Originated, fiscal year before current fiscal year	0		0
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	0		0
Revolving Loans Convert. to Term	(1)		0
YTD Gross Charge-offs	(1)	$ (50)	(50)
Other consumer | Pass
Loans and Leases Receivable Disclosure [Abstract]
Prior	2		1
Originated, four years before current fiscal year	0		0
Originated, three years before current fiscal year	0		0
Originated, two years before current fiscal year	0		0
Originated, fiscal year before current fiscal year	0		46
Originated, current fiscal year	0		0
Revolving Loans Amort. Cost Basis	956		354
Revolving Loans Convert. to Term	0		0
Loans	$ 958		$ 401

XML

Loans and Allowance for Credit Losses - Schedule of Information Related to Nonaccrual Loans by Class (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Loans and Leases Receivable Disclosure [Line Items]
Nonaccrual with No Allowance for Credit Losses	$ 88,682,000		$ 62,006,000
Nonaccrual with an Allowance for Credit Losses	2,809,000		3,518,000
Total Nonaccrual Loans	91,491,000		65,524,000
Interest on nonaccrual loans	1,300,000	$ 182,000
Actual nonaccrual, interest income	0	$ 0
Commercial
Loans and Leases Receivable Disclosure [Line Items]
Nonaccrual with No Allowance for Credit Losses	1,045,000		1,002,000
Nonaccrual with an Allowance for Credit Losses	875,000		1,047,000
Total Nonaccrual Loans	1,920,000		2,049,000
Income-producing - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Nonaccrual with No Allowance for Credit Losses	67,602,000		40,926,000
Nonaccrual with an Allowance for Credit Losses	0		0
Total Nonaccrual Loans	67,602,000		40,926,000
Owner-occupied - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Nonaccrual with No Allowance for Credit Losses	19,798,000		19,836,000
Nonaccrual with an Allowance for Credit Losses	0		0
Total Nonaccrual Loans	19,798,000		19,836,000
Real estate mortgage - residential
Loans and Leases Receivable Disclosure [Line Items]
Nonaccrual with No Allowance for Credit Losses	0		0
Nonaccrual with an Allowance for Credit Losses	1,934,000		1,946,000
Total Nonaccrual Loans	1,934,000		1,946,000
Construction - commercial and residential
Loans and Leases Receivable Disclosure [Line Items]
Nonaccrual with No Allowance for Credit Losses			0
Nonaccrual with an Allowance for Credit Losses			525,000
Total Nonaccrual Loans	0		525,000
Home equity
Loans and Leases Receivable Disclosure [Line Items]
Nonaccrual with No Allowance for Credit Losses	237,000		242,000
Nonaccrual with an Allowance for Credit Losses	0		0
Total Nonaccrual Loans	$ 237,000		$ 242,000

XML

Loans and Allowance for Credit Losses - Schedule by Class of Loan, an Aging Analysis and the Recorded Investments in Loans Past Due (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Loans and Leases Receivable Disclosure [Line Items]
Loans	$ 7,982,702	$ 7,968,695
Non-accrual	91,491	65,524
Commercial
Loans and Leases Receivable Disclosure [Line Items]
Loans	1,408,767	1,473,766
Non-accrual	1,920	2,049
PPP loans
Loans and Leases Receivable Disclosure [Line Items]
Loans	467	528
Non-accrual	0	0
Income-producing - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Loans	4,040,655	4,094,614
Non-accrual	67,602	40,926
Owner-occupied - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Loans	1,185,582	1,172,239
Non-accrual	19,798	19,836
Real estate mortgage - residential
Loans and Leases Receivable Disclosure [Line Items]
Loans	72,087	73,396
Non-accrual	1,934	1,946
Construction - commercial and residential
Loans and Leases Receivable Disclosure [Line Items]
Loans	1,082,556	969,766
Non-accrual	0	525
Construction - C&I (owner occupied)
Loans and Leases Receivable Disclosure [Line Items]
Loans	138,379	132,021
Non-accrual	0	0
Home equity
Loans and Leases Receivable Disclosure [Line Items]
Loans	53,251	51,964
Non-accrual	237	242
Other consumer
Loans and Leases Receivable Disclosure [Line Items]
Loans	958	401
Non-accrual	0	0
Past Due
Loans and Leases Receivable Disclosure [Line Items]
Loans	31,108	13,649
Past Due | Commercial
Loans and Leases Receivable Disclosure [Line Items]
Loans	11,175	8,033
Past Due | PPP loans
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
Past Due | Income-producing - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Loans	11,106	0
Past Due | Owner-occupied - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	1,274
Past Due | Real estate mortgage - residential
Loans and Leases Receivable Disclosure [Line Items]
Loans	199	2,089
Past Due | Construction - commercial and residential
Loans and Leases Receivable Disclosure [Line Items]
Loans	8,590	2,056
Past Due | Construction - C&I (owner occupied)
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
Past Due | Home equity
Loans and Leases Receivable Disclosure [Line Items]
Loans	36	197
Past Due | Other consumer
Loans and Leases Receivable Disclosure [Line Items]
Loans	2	0
30 to 59 Days Past Due
Loans and Leases Receivable Disclosure [Line Items]
Loans	31,072	6,601
30 to 59 Days Past Due | Commercial
Loans and Leases Receivable Disclosure [Line Items]
Loans	11,175	985
30 to 59 Days Past Due | PPP loans
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
30 to 59 Days Past Due | Income-producing - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Loans	11,106	0
30 to 59 Days Past Due | Owner-occupied - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	1,274
30 to 59 Days Past Due | Real estate mortgage - residential
Loans and Leases Receivable Disclosure [Line Items]
Loans	199	2,089
30 to 59 Days Past Due | Construction - commercial and residential
Loans and Leases Receivable Disclosure [Line Items]
Loans	8,590	2,056
30 to 59 Days Past Due | Construction - C&I (owner occupied)
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
30 to 59 Days Past Due | Home equity
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	197
30 to 59 Days Past Due | Other consumer
Loans and Leases Receivable Disclosure [Line Items]
Loans	2	0
60-89 Days Past Due
Loans and Leases Receivable Disclosure [Line Items]
Loans	36	7,048
60-89 Days Past Due | Commercial
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	7,048
60-89 Days Past Due | PPP loans
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
60-89 Days Past Due | Income-producing - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
60-89 Days Past Due | Owner-occupied - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
60-89 Days Past Due | Real estate mortgage - residential
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
60-89 Days Past Due | Construction - commercial and residential
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
60-89 Days Past Due | Construction - C&I (owner occupied)
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
60-89 Days Past Due | Home equity
Loans and Leases Receivable Disclosure [Line Items]
Loans	36	0
60-89 Days Past Due | Other consumer
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
90 Days or More Past Due
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
90 Days or More Past Due | Commercial
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
90 Days or More Past Due | PPP loans
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
90 Days or More Past Due | Income-producing - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
90 Days or More Past Due | Owner-occupied - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
90 Days or More Past Due | Real estate mortgage - residential
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
90 Days or More Past Due | Construction - commercial and residential
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
90 Days or More Past Due | Construction - C&I (owner occupied)
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
90 Days or More Past Due | Home equity
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
90 Days or More Past Due | Other consumer
Loans and Leases Receivable Disclosure [Line Items]
Loans	0	0
Current
Loans and Leases Receivable Disclosure [Line Items]
Loans	7,860,103	7,889,522
Current | Commercial
Loans and Leases Receivable Disclosure [Line Items]
Loans	1,395,672	1,463,684
Current | PPP loans
Loans and Leases Receivable Disclosure [Line Items]
Loans	467	528
Current | Income-producing - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Loans	3,961,947	4,053,688
Current | Owner-occupied - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Loans	1,165,784	1,151,129
Current | Real estate mortgage - residential
Loans and Leases Receivable Disclosure [Line Items]
Loans	69,954	69,361
Current | Construction - commercial and residential
Loans and Leases Receivable Disclosure [Line Items]
Loans	1,073,966	967,185
Current | Construction - C&I (owner occupied)
Loans and Leases Receivable Disclosure [Line Items]
Loans	138,379	132,021
Current | Home equity
Loans and Leases Receivable Disclosure [Line Items]
Loans	52,978	51,525
Current | Other consumer
Loans and Leases Receivable Disclosure [Line Items]
Loans	$ 956	$ 401

XML

Loans and Allowance for Credit Losses - Schedule of Financial Effect of Loans Modified in Troubled Debt Restructurings (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	$ 84,957	$ 108,264
Term Extension
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	31,553	28,955
Combination - Term Extension and Principal Payment Delay
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	53,404	79,309
Commercial
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	$ 31,553	$ 21,744
Weighted average interest rate accruing (as percent)	0.022	0.015
Commercial | Term Extension
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	$ 31,553	$ 21,744
Commercial | Combination - Term Extension and Principal Payment Delay
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	0	$ 0
Commercial | Weighted Average Term and Principal Payment Extension
Loans and Leases Receivable Disclosure [Line Items]
Weighted average term extension accruing (in months)		3 months
Income-producing - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	$ 50,926	$ 67,350
Weighted average interest rate accruing (as percent)	0.013	0.017
Income-producing - commercial real estate | Term Extension
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	$ 0	$ 7,211
Income-producing - commercial real estate | Combination - Term Extension and Principal Payment Delay
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	50,926	$ 60,139
Income-producing - commercial real estate | Weighted Average Term and Principal Payment Extension
Loans and Leases Receivable Disclosure [Line Items]
Weighted average term extension accruing (in months)		4 months
Real estate mortgage - residential
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	$ 2,478
Weighted average interest rate accruing (as percent)	0.034
Real estate mortgage - residential | Term Extension
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	$ 0
Real estate mortgage - residential | Combination - Term Extension and Principal Payment Delay
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	$ 2,478
Owner-occupied - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing		$ 19,170
Weighted average interest rate accruing (as percent)		0.018
Owner-occupied - commercial real estate | Term Extension
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing		$ 0
Owner-occupied - commercial real estate | Combination - Term Extension and Principal Payment Delay
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing		$ 19,170
Owner-occupied - commercial real estate | Weighted Average Term and Principal Payment Extension
Loans and Leases Receivable Disclosure [Line Items]
Weighted average term extension accruing (in months)		3 months

XML

Loans and Allowance for Credit Losses - Schedule of Loans Modified in Troubled Debt Restructurings (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	$ 84,957	$ 108,264
Current
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	144,249
Past Due
Loans and Leases Receivable Disclosure [Line Items]
Restructured nonaccruing	85,263
30-89 Days Past Due
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	7,999
Commercial
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	31,553	21,744
Commercial | Current
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	37,308
Commercial | Past Due
Loans and Leases Receivable Disclosure [Line Items]
Restructured nonaccruing	0
Commercial | 30-89 Days Past Due
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	1,467
Income-producing - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	50,926	67,350
Income-producing - commercial real estate | Current
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	104,463
Income-producing - commercial real estate | Past Due
Loans and Leases Receivable Disclosure [Line Items]
Restructured nonaccruing	66,136
Income-producing - commercial real estate | 30-89 Days Past Due
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	0
Owner-occupied - commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing		$ 19,170
Owner-occupied - commercial real estate | Current
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	0
Owner-occupied - commercial real estate | Past Due
Loans and Leases Receivable Disclosure [Line Items]
Restructured nonaccruing	19,127
Owner-occupied - commercial real estate | 30-89 Days Past Due
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	0
Real estate mortgage - residential
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	2,478
Real estate mortgage - residential | Current
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	2,478
Real estate mortgage - residential | Past Due
Loans and Leases Receivable Disclosure [Line Items]
Restructured nonaccruing	0
Real estate mortgage - residential | 30-89 Days Past Due
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	0
Construction - commercial and residential | Current
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	0
Construction - commercial and residential | Past Due
Loans and Leases Receivable Disclosure [Line Items]
Restructured nonaccruing	0
Construction - commercial and residential | 30-89 Days Past Due
Loans and Leases Receivable Disclosure [Line Items]
Restructured accruing	$ 6,532

XML

Loans and Allowance for Credit Losses - Schedule of Amortized Cost Basis of Loan Had a Payment Default (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($)
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Amortized cost basis of loans that had a payment default, total	$ 66,136
Combination - Term Extension and Principal Payment Delay
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Amortized cost basis of loans that had a payment default, total	6,532
Combination - Term Extension, Principal Payment Delay and Interest Rate Reduction
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Amortized cost basis of loans that had a payment default, total	20,594
Commercial
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Amortized cost basis of loans that had a payment default, total	0
Commercial | Combination - Term Extension and Principal Payment Delay
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Amortized cost basis of loans that had a payment default, total	0
Commercial | Combination - Term Extension, Principal Payment Delay and Interest Rate Reduction
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Amortized cost basis of loans that had a payment default, total	1,467
Income-producing - commercial real estate
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Amortized cost basis of loans that had a payment default, total	66,136
Income-producing - commercial real estate | Combination - Term Extension and Principal Payment Delay
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Amortized cost basis of loans that had a payment default, total	0
Income-producing - commercial real estate | Combination - Term Extension, Principal Payment Delay and Interest Rate Reduction
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Amortized cost basis of loans that had a payment default, total	0
Owner-occupied - commercial real estate
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Amortized cost basis of loans that had a payment default, total	0
Owner-occupied - commercial real estate | Combination - Term Extension and Principal Payment Delay
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Amortized cost basis of loans that had a payment default, total	0
Owner-occupied - commercial real estate | Combination - Term Extension, Principal Payment Delay and Interest Rate Reduction
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Amortized cost basis of loans that had a payment default, total	19,127
Construction - commercial and residential
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Amortized cost basis of loans that had a payment default, total	0
Construction - commercial and residential | Combination - Term Extension and Principal Payment Delay
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Amortized cost basis of loans that had a payment default, total	6,532
Construction - commercial and residential | Combination - Term Extension, Principal Payment Delay and Interest Rate Reduction
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Amortized cost basis of loans that had a payment default, total	$ 0

XML

Leases - Narrative (Details) $ in Thousands	Apr. 30, 2024 numberOfLease	Mar. 31, 2024 USD ($) numberOfLease	Dec. 31, 2023 USD ($)
Lessee, Lease, Description [Line Items]
Right-of-use assets - operating leases		$ 17,679	$ 19,129
Operating lease liabilities		$ 21,611	23,238
Probability that lease options will be exercised		90.00%
Number of leases expired | numberOfLease		0
Subsequent Event
Lessee, Lease, Description [Line Items]
Number of leases expired | numberOfLease	1
Accounting Standards Update 2016-02
Lessee, Lease, Description [Line Items]
Right-of-use assets - operating leases		$ 17,700	19,100
Operating lease liabilities		$ 21,600	$ 23,200

XML

Leases - Schedule of Lease Costs and Other Lease Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Leases [Abstract]
Operating lease cost (cost resulting from lease payments)	$ 1,601	$ 1,716
Variable lease cost (cost excluded from lease payments)	241	256
Sublease income	(30)	(30)
Net lease cost	1,812	1,942
Operating lease - operating cash flows (fixed payments)	1,778	$ 1,859
Right-of-use assets - operating leases	17,679		$ 19,129
Operating lease liabilities	$ 21,611		$ 23,238
Weighted average lease term - operating leases	4 years 9 months 21 days		4 years 11 months 4 days
Weighted average discount rate - operating leases	2.73%		2.78%

XML

Leases - Schedule of Future Minimum Payments for Operating Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Twelve Months Ended:
March 31, 2025	$ 5,147
March 31, 2026	6,078
March 31, 2027	2,988
March 31, 2028	2,599
March 31, 2029	2,176
Thereafter	3,751
Total future minimum lease payments	22,739
Amounts representing interest	(1,128)
Present value of net future minimum lease payments	$ 21,611	$ 23,238

XML

Derivatives - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($)
Interest rate swap derivatives | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized gain	$ 121

XML

Derivatives - Schedule of Balance Sheet Category and Fair Values of the Derivative Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional Amount	$ 729,725	$ 1,000,909
Fair Value	34,147	30,665
Other Assets | Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional Amount	729,725	700,909
Fair Value	34,147	30,291
Other Assets | Interest rate product | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional Amount	0	300,000
Fair Value	0	374
Other Assets | Interest rate product | Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional Amount	680,245	651,429
Fair Value	34,147	30,288
Other Assets | Credit Risk Participation Agreements | Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional Amount	49,480	49,480
Fair Value	0	3
Other Liabilities | Interest rate product | Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional Amount	680,245	651,429
Fair Value	$ 33,646	$ 30,555

XML

Derivatives - Schedule of the Effect of Derivative Financial Instruments on the Consolidated Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Amount of income (loss) recognized in income on derivative	$ 239	$ (414)
Interest rate products
Derivative Instruments, Gain (Loss) [Line Items]
Amount of income (loss) recognized in income on derivative	$ 239	$ (350)
Derivative, Excluded Component, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Other Income	Other Income
Mortgage banking derivatives
Derivative Instruments, Gain (Loss) [Line Items]
Amount of income (loss) recognized in income on derivative	$ 0	$ (64)
Derivative, Excluded Component, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Gain on sale of loans	Gain on sale of loans

XML

Deposits - Schedule of Deposit Composition and Average Interest Rates (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Deposits:
Noninterest-bearing demand	$ 1,835,524	$ 2,279,081
Interest-bearing transaction	1,207,566	997,448
Savings and money market	3,235,391	3,314,043
Time deposits	2,222,958	2,217,467
Total deposits	$ 8,501,439	$ 8,808,039

XML

Deposits - Schedule of Maturity of Time Deposits (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Deposits Liabilities, Balance Sheet, Reported Amounts [Abstract]
2024	$ 1,294,087	$ 1,445,395
2025	716,191	576,379
2026	195,505	180,384
2027	5,779	5,482
2028	10,162	9,827
2029	1,234	0
Total	$ 2,222,958	$ 2,217,467

XML

Deposits - Schedule of Time Deposit Accounts in Excess of $250 Thousand (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Time deposits $250,000 or more
Three months or less	$ 321,017	$ 119,880
More than three months through six months	341,418	318,353
More than six months through twelve months	253,492	368,103
Over twelve months	696,857	726,758
Total	$ 1,612,784	$ 1,533,094

XML

Deposits - Narrative (Details) - USD ($) $ in Billions	Mar. 31, 2024	Dec. 31, 2023
Deposits Liabilities, Balance Sheet, Reported Amounts [Abstract]
Brokered deposits, excluding CDARS and ICS Two-Way	$ 4.2	$ 2.5
Brokered deposits, excluding CDARS and ICS Two-Way, percent of total	49.10%	28.80%
Deposits attributable to CDARS and ICS two-way deposits	$ 1.7

XML

Borrowings - Schedules of Short-term Borrowings and Long-term Borrowings (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Jan. 31, 2024	Dec. 31, 2023	Aug. 05, 2014
Long-Term Borrowings
Available capacity	$ 1,888,535		$ 2,490,213
Total borrowings, gross	1,707,059		1,400,587
Unamortized Deferred Issuance Costs	(52)		(82)
Total borrowings	1,707,007		$ 1,400,505
Borrowings - Principal	2,200,000
Investment securities pledged with collateral par	297,500
Asset Pledged as Collateral
Long-Term Borrowings
Available capacity	$ 1,900,000
Subordinated notes, 5.75%
Long-Term Borrowings
Interest rate (as a percent)	5.75%		5.75%	5.75%
Long-term borrowings, gross	$ 70,000		$ 70,000
Unamortized Deferred Issuance Costs	(52)		(82)
Subordinated notes, net	69,948		69,918
Customer repurchase agreements
Long-Term Borrowings
Short-term borrowings	$ 37,059		$ 30,587
Interest rate (as a percent)	3.48%		3.42%
FHLB | Secured Debt
Long-Term Borrowings
Short-term borrowings	$ 600,000		$ 0
Available capacity	1,302,153		1,271,846
BTFP | Secured Debt
Long-Term Borrowings
Short-term borrowings	1,000,000		1,300,000
Available capacity	$ 0		$ 598,870
Interest rate (as a percent)	4.76%	4.76%	4.53%
Discount window | Secured Debt
Long-Term Borrowings
Available capacity	$ 568,602		$ 601,504
Raymond James repurchase agreement | Secured Debt
Long-Term Borrowings
Available capacity	$ 17,780		$ 17,993

XML

Borrowings - Narrative (Details) - USD ($) $ in Millions		1 Months Ended
	Aug. 05, 2014	Jan. 31, 2024	Mar. 31, 2024	Dec. 31, 2023
Subordinated notes, 5.75%
Line of Credit Facility [Line Items]
Interest rate (as a percent)	5.75%		5.75%	5.75%
Face amount	$ 70.0
Net proceeds from issuance of subordinated long-term debt	68.8
Payments of debt issuance costs	$ 1.2
BTFP | Secured Debt
Line of Credit Facility [Line Items]
Securities borrowed		$ 500.0
Short-term debt, refinanced, amount		$ 500.0
Interest rate (as a percent)		4.76%	4.76%	4.53%

XML

Net Income (Loss) per Common Share - Schedule of Calculation of Net Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Basic:
Net (loss) income	$ (338)	$ 24,234
Average common shares outstanding (in shares)	30,068	31,109
Basic net (loss) per common share (in dollars per share)	$ (0.01)	$ 0.78
Diluted:
Net (loss) income	$ (338)	$ 24,234
Average common shares outstanding (in shares)	30,068	31,109
Adjustment for common share equivalents (in shares)	0	71
Average common shares outstanding-diluted (in shares)	30,068	31,180
Diluted net (loss) per common share (in dollars per share)	$ (0.01)	$ 0.78
Anti-dilutive shares (in shares)	58	3

XML

Other Comprehensive (Loss) Income - Schedule of Components of Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Before Tax
Net unrealized (loss) gain on securities available-for-sale	$ (6,693)	$ 24,039
Less: Reclassification adjustment for net gain (loss) included in net income	(4)	21
Total unrealized gain (loss) on investment securities available-for-sale	(6,697)	24,060
Amortization of unrealized loss on securities transferred to held-to-maturity	1,731	1,983
Net unrealized gain on derivatives	363
Other comprehensive (loss) income	(4,603)	26,043
Tax Effect
Net unrealized gain (loss) on securities available-for-sale	1,626	(6,103)
Less: Reclassification adjustment for net gain (loss) included in net income	1	(5)
Total unrealized gain (loss) on investment securities available-for-sale	1,627	(6,108)
Amortization of unrealized loss on securities transferred to held-to-maturity	(346)	(1,342)
Net unrealized gain on derivatives	(89)
Other comprehensive income (loss)	1,192	(7,450)
Net of Tax
Less: Reclassification adjustment for net gain (loss) included in net income	(3)	16
Total unrealized (loss) gain on investment securities available-for-sale	(5,070)	17,952
Amortization of unrealized loss on securities transferred to held-to-maturity	1,385	641
Net unrealized gain on derivatives	274	0
Other comprehensive (loss) income	$ (3,411)	$ 18,593

XML

Other Comprehensive (Loss) Income - Schedule of Changes in Each Component of Accumulated Other Comprehensive (Loss) Income, Net of Tax (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Investment securities available-for-sale:
Beginning balance	$ 1,274,283	$ 1,228,321
Amortization of unrealized loss on securities transferred to held-to-maturity	1,385	641
Other comprehensive (loss) income	(3,411)	18,593
Ending balance	1,259,413	1,241,958
Securities Available For Sale
Investment securities available-for-sale:
Beginning balance	(122,246)	(154,773)
Other comprehensive loss (income) before reclassifications	(5,067)	17,936
Amounts reclassified from accumulated other comprehensive income (loss)	(3)	16
Amortization of unrealized loss on securities transferred to held-to-maturity	0	0
Other comprehensive (loss) income	(5,070)	17,952
Ending balance	(127,316)	(136,821)
Securities Held to Maturity
Investment securities available-for-sale:
Beginning balance	(39,929)	(44,734)
Other comprehensive loss (income) before reclassifications	0	0
Amounts reclassified from accumulated other comprehensive income (loss)	0	0
Amortization of unrealized loss on securities transferred to held-to-maturity	1,385	641
Other comprehensive (loss) income	1,385	641
Ending balance	(38,544)	(44,093)
Derivatives
Investment securities available-for-sale:
Beginning balance	(182)	0
Other comprehensive loss (income) before reclassifications	274	0
Amounts reclassified from accumulated other comprehensive income (loss)	0	0
Amortization of unrealized loss on securities transferred to held-to-maturity	0	0
Other comprehensive (loss) income	274	0
Ending balance	92	0
Accumulated Other Comprehensive Income (Loss)
Investment securities available-for-sale:
Beginning balance	(162,357)	(199,507)
Other comprehensive loss (income) before reclassifications	(4,793)	17,936
Amounts reclassified from accumulated other comprehensive income (loss)	(3)	16
Amortization of unrealized loss on securities transferred to held-to-maturity	1,385	641
Other comprehensive (loss) income	(3,411)	18,593
Ending balance	$ (165,768)	$ (180,914)

XML

Other Comprehensive (Loss) Income - Schedule of Amounts Reclassified Out of Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Realized gain (loss) on sale of investment securities	$ 4	$ (21)
Income tax benefit (expense)	(2,997)	(6,894)
Net (Loss) Income	(338)	24,234
Reclassification out of Accumulated Other Comprehensive Income (Loss)
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Realized gain (loss) on sale of investment securities	4	(21)
Income tax benefit (expense)	(1)	5
Net (Loss) Income	$ 3	$ (16)

XML

Fair Value Measurements - Schedule of Recorded Amount of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	$ 1,445,034	$ 1,506,388
Total liabilities measured at fair value on a recurring basis	33,646
U. S. agency securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	639,326	671,397
Residential mortgage-backed securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	698,550	727,353
Commercial mortgage-backed securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	48,938	49,564
Municipal bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	8,306	8,490
Corporate bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	1,681	1,683
Recurring
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total assets measured at fair value on a recurring basis	1,479,181	1,537,053
Total liabilities measured at fair value on a recurring basis		30,555
Recurring | Interest rate product
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset	34,147	30,662
Derivative liability	33,646	30,555
Recurring | U.S treasury bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	48,233	47,901
Recurring | U. S. agency securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	639,326	671,397
Recurring | Residential mortgage-backed securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	698,550	727,353
Recurring | Commercial mortgage-backed securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	48,938	49,564
Recurring | Municipal bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	8,306	8,490
Recurring | Corporate bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	1,681	1,683
Recurring | Credit Risk Participation Agreements | Derivative Financial Instruments, Assets
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset		3
​Quoted Prices (Level 1) | Recurring
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total assets measured at fair value on a recurring basis	0	0
Total liabilities measured at fair value on a recurring basis	0	0
​Quoted Prices (Level 1) | Recurring | Interest rate product
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset	0	0
Derivative liability	0	0
​Quoted Prices (Level 1) | Recurring | U.S treasury bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	0	0
​Quoted Prices (Level 1) | Recurring | U. S. agency securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	0	0
​Quoted Prices (Level 1) | Recurring | Residential mortgage-backed securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	0	0
​Quoted Prices (Level 1) | Recurring | Commercial mortgage-backed securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	0	0
​Quoted Prices (Level 1) | Recurring | Municipal bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	0	0
​Quoted Prices (Level 1) | Recurring | Corporate bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	0	0
​Quoted Prices (Level 1) | Recurring | Credit Risk Participation Agreements | Derivative Financial Instruments, Assets
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset		0
Significant Other Observable Inputs (Level 2) | Recurring
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total assets measured at fair value on a recurring basis	1,479,181	1,537,053
Total liabilities measured at fair value on a recurring basis	33,646	30,555
Significant Other Observable Inputs (Level 2) | Recurring | Interest rate product
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset	34,147	30,662
Derivative liability	33,646	30,555
Significant Other Observable Inputs (Level 2) | Recurring | U.S treasury bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	48,233	47,901
Significant Other Observable Inputs (Level 2) | Recurring | U. S. agency securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	639,326	671,397
Significant Other Observable Inputs (Level 2) | Recurring | Residential mortgage-backed securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	698,550	727,353
Significant Other Observable Inputs (Level 2) | Recurring | Commercial mortgage-backed securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	48,938	49,564
Significant Other Observable Inputs (Level 2) | Recurring | Municipal bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	8,306	8,490
Significant Other Observable Inputs (Level 2) | Recurring | Corporate bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	1,681	1,683
Significant Other Observable Inputs (Level 2) | Recurring | Credit Risk Participation Agreements | Derivative Financial Instruments, Assets
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset		3
Significant Other Unobservable Inputs (Level 3) | Recurring
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total assets measured at fair value on a recurring basis	0	0
Total liabilities measured at fair value on a recurring basis	0	0
Significant Other Unobservable Inputs (Level 3) | Recurring | Interest rate product
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset	0	0
Derivative liability	0	0
Significant Other Unobservable Inputs (Level 3) | Recurring | U.S treasury bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	0	0
Significant Other Unobservable Inputs (Level 3) | Recurring | U. S. agency securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	0	0
Significant Other Unobservable Inputs (Level 3) | Recurring | Residential mortgage-backed securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	0	0
Significant Other Unobservable Inputs (Level 3) | Recurring | Commercial mortgage-backed securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	0	0
Significant Other Unobservable Inputs (Level 3) | Recurring | Municipal bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	0	0
Significant Other Unobservable Inputs (Level 3) | Recurring | Corporate bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available-for-sale	$ 0	0
Significant Other Unobservable Inputs (Level 3) | Recurring | Credit Risk Participation Agreements | Derivative Financial Instruments, Assets
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset		$ 0

XML

Fair Value Measurements - Schedule of Assets Measured at Fair Value on Nonrecurring Basis (Details) - Non Recurring - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Other real estate owned	$ 773	$ 1,108
Total assets measured at fair value on a recurring basis	92,465	66,777
Commercial
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	2,422	2,475
Income-producing - commercial real estate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	67,602	41,038
Owner-occupied - commercial real estate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	19,798	19,880
Real estate mortgage - residential
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	1,633	1,638
Consumer
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans		396
Home equity
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	237	242
​Quoted Prices (Level 1)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Other real estate owned	0	0
Total assets measured at fair value on a recurring basis	0	0
​Quoted Prices (Level 1) | Commercial
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	0	0
​Quoted Prices (Level 1) | Income-producing - commercial real estate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	0	0
​Quoted Prices (Level 1) | Owner-occupied - commercial real estate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	0	0
​Quoted Prices (Level 1) | Real estate mortgage - residential
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	0	0
​Quoted Prices (Level 1) | Consumer
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans		0
​Quoted Prices (Level 1) | Home equity
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	0	0
Significant Other Observable Inputs (Level 2)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Other real estate owned	0	0
Total assets measured at fair value on a recurring basis	0	0
Significant Other Observable Inputs (Level 2) | Commercial
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	0	0
Significant Other Observable Inputs (Level 2) | Income-producing - commercial real estate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	0	0
Significant Other Observable Inputs (Level 2) | Owner-occupied - commercial real estate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	0	0
Significant Other Observable Inputs (Level 2) | Real estate mortgage - residential
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	0	0
Significant Other Observable Inputs (Level 2) | Consumer
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans		0
Significant Other Observable Inputs (Level 2) | Home equity
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	0	0
Significant Other Unobservable Inputs (Level 3)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Other real estate owned	773	1,108
Total assets measured at fair value on a recurring basis	92,465	66,777
Significant Other Unobservable Inputs (Level 3) | Commercial
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	2,422	2,475
Significant Other Unobservable Inputs (Level 3) | Income-producing - commercial real estate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	67,602	41,038
Significant Other Unobservable Inputs (Level 3) | Owner-occupied - commercial real estate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	19,798	19,880
Significant Other Unobservable Inputs (Level 3) | Real estate mortgage - residential
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	1,633	1,638
Significant Other Unobservable Inputs (Level 3) | Consumer
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans		396
Significant Other Unobservable Inputs (Level 3) | Home equity
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	$ 237	$ 242

XML

Fair Value Measurements - Schedule of Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Assets
Federal funds sold	$ 11,343	$ 3,740
Interest-bearing deposits with other banks	696,453	709,897
Investment securities available-for-sale	1,445,034	1,506,388
Total investment securities held-to-maturity	878,159	901,582
Federal Reserve and Federal Home Loan Bank stock	54,678	25,748
Bank owned life insurance	113,624	112,921
Liabilities
Interest-bearing deposits	1,207,566	997,448
Customer repurchase agreements	37,059	30,587
Carrying Value
Assets
Cash and due from banks	10,076	9,047
Federal funds sold	11,343	3,740
Interest-bearing deposits with other banks	696,453	709,897
Investment securities available-for-sale	1,445,034	1,506,388
Total investment securities held-to-maturity	1,000,732	1,015,737
Federal Reserve and Federal Home Loan Bank stock	54,678	25,748
Loans	7,982,702	7,968,695
Bank owned life insurance	113,624	112,921
Annuity investment	12,948	13,112
Accrued interest receivable	54,074	53,337
Liabilities
Noninterest-bearing deposits	1,835,524	2,279,081
Interest-bearing deposits	4,442,957	4,311,491
Time deposits	2,222,958	2,217,467
Customer repurchase agreements	37,059	30,587
Borrowings	1,669,948	1,369,918
Accrued interest payable	20,978	57,395
Carrying Value | Credit Risk Participation Agreements
Assets
Derivative asset		3
Carrying Value | Interest rate product
Assets
Derivative asset	34,147	30,662
Liabilities
Derivative liability	33,646	30,555
Fair Value
Assets
Cash and due from banks	10,076	9,047
Federal funds sold	11,343	3,740
Interest-bearing deposits with other banks	696,453	709,897
Investment securities available-for-sale	1,445,034	1,506,388
Total investment securities held-to-maturity	878,159	901,582
Loans	7,596,097	7,720,241
Bank owned life insurance	113,624	112,921
Annuity investment	12,948	13,112
Accrued interest receivable	54,074	53,337
Liabilities
Noninterest-bearing deposits	1,835,524	2,279,081
Interest-bearing deposits	4,442,957	4,311,491
Time deposits	2,217,742	2,217,795
Customer repurchase agreements	37,059	30,587
Borrowings	1,669,043	1,368,621
Accrued interest payable	20,978	57,395
Fair Value | Credit Risk Participation Agreements
Assets
Derivative asset		3
Fair Value | Interest rate product
Assets
Derivative asset	34,147	30,662
Liabilities
Derivative liability	33,646	30,555
Fair Value | ​Quoted Prices (Level 1)
Assets
Cash and due from banks	10,076	9,047
Federal funds sold	0	0
Interest-bearing deposits with other banks	0	0
Investment securities available-for-sale	0	0
Total investment securities held-to-maturity	0	0
Federal Reserve and Federal Home Loan Bank stock	0	0
Loans	0	0
Bank owned life insurance	0	0
Annuity investment	0	0
Accrued interest receivable	54,074	53,337
Liabilities
Noninterest-bearing deposits	0	0
Interest-bearing deposits	0	0
Time deposits	0	0
Customer repurchase agreements	0	0
Borrowings	0	0
Accrued interest payable	20,978	57,395
Fair Value | ​Quoted Prices (Level 1) | Credit Risk Participation Agreements
Assets
Derivative asset		0
Fair Value | ​Quoted Prices (Level 1) | Interest rate product
Assets
Derivative asset	0	0
Liabilities
Derivative liability	0	0
Fair Value | Significant Other Observable Inputs (Level 2)
Assets
Cash and due from banks	0	0
Federal funds sold	11,343	3,740
Interest-bearing deposits with other banks	696,453	709,897
Investment securities available-for-sale	1,445,034	1,506,388
Total investment securities held-to-maturity	878,159	901,582
Federal Reserve and Federal Home Loan Bank stock	0	0
Loans	0	0
Bank owned life insurance	113,624	112,921
Annuity investment	12,948	13,112
Accrued interest receivable	0	0
Liabilities
Noninterest-bearing deposits	1,835,524	2,279,081
Interest-bearing deposits	4,442,957	4,311,491
Time deposits	2,217,742	2,217,795
Customer repurchase agreements	37,059	30,587
Borrowings	1,669,043	1,368,621
Accrued interest payable	0	0
Fair Value | Significant Other Observable Inputs (Level 2) | Credit Risk Participation Agreements
Assets
Derivative asset		3
Fair Value | Significant Other Observable Inputs (Level 2) | Interest rate product
Assets
Derivative asset	34,147	30,662
Liabilities
Derivative liability	33,646	30,555
Fair Value | Significant Other Unobservable Inputs (Level 3)
Assets
Cash and due from banks	0	0
Federal funds sold	0	0
Interest-bearing deposits with other banks	0	0
Investment securities available-for-sale	0	0
Total investment securities held-to-maturity	0	0
Federal Reserve and Federal Home Loan Bank stock	0	0
Loans	7,596,097	7,720,241
Bank owned life insurance	0	0
Annuity investment	0	0
Accrued interest receivable	0	0
Liabilities
Noninterest-bearing deposits	0	0
Interest-bearing deposits	0	0
Time deposits	0	0
Customer repurchase agreements	0	0
Borrowings	0	0
Accrued interest payable	0	0
Fair Value | Significant Other Unobservable Inputs (Level 3) | Credit Risk Participation Agreements
Assets
Derivative asset		0
Fair Value | Significant Other Unobservable Inputs (Level 3) | Interest rate product
Assets
Derivative asset	0	0
Liabilities
Derivative liability	$ 0	$ 0