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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2022

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

Carrying Amount And Estimated Fair Value Of Assets And Liabilities



	September 30, 2022
					Quoted prices in		Significant other		Significant
					active markets for		observable		unobservable
	Carrying		Estimated		identical assets		inputs		inputs
	amount		fair value		(Level 1)		(Level 2)		(Level 3)
Investment securities, available-for-sale	$	790,594	$	790,594	$	—	$	771,597	$	18,997
Federal Home Loan Bank, Atlantic Central Bankers Bank, and Federal Reserve Bank stock		12,629		12,629		—		—		12,629
Commercial loans, at fair value		818,040		818,040		—		—		818,040
Loans, net of deferred loan fees and costs		5,267,375		5,254,340		—		—		5,254,340
Interest rate swaps, asset		952		952		—		952		—
Demand and interest checking		5,934,591		5,934,591		—		5,934,591		—
Savings and money market		575,381		575,381		—		575,381		—
Time deposits		401,331		401,331		—		401,331		—
Senior debt		98,958		93,871		—		93,871		—
Subordinated debentures		13,401		8,947		—		—		8,947
Securities sold under agreements to repurchase		42		42		42		—		—



	December 31, 2021
					Quoted prices in		Significant other		Significant
					active markets for		observable		unobservable
	Carrying		Estimated		identical assets		inputs		inputs
	amount		fair value		(Level 1)		(Level 2)		(Level 3)
Investment securities, available-for-sale	$	953,709	$	953,709	$	—	$	934,678	$	19,031
Federal Home Loan Bank and Atlantic Central Bankers Bank stock		1,663		1,663		—		—		1,663
Commercial loans, at fair value		1,388,416		1,388,416		—		—		1,388,416
Loans, net of deferred loan fees and costs		3,747,224		3,745,548		—		—		3,745,548
Assets held-for-sale from discontinued operations		3,268		3,268		—		—		3,268
Interest rate swaps, liability		553		553		—		553		—
Demand and interest checking		5,561,365		5,561,365		—		5,561,365		—
Savings and money market		415,546		415,546		—		415,546		—
Senior debt		98,682		101,980		—		101,980		—
Subordinated debentures		13,401		8,815		—		—		8,815
Securities sold under agreements to repurchase		42		42		42		—		—

Changes In Company's Level 3 Assets



	Fair Value Measurements Using
	Significant Unobservable Inputs
	(Level 3)

	Available-for-sale				Commercial loans,
	securities				at fair value
	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Beginning balance	$	19,031	$	178,951	$	1,388,416	$	1,810,812
Transfers from investment in unconsolidated entity		—		—		—		22,926
Transfers from assets held-for-sale from discontinued operations		—		—		—		61,580
Transfers to loans, net		—		—		(61,580)		—
Total net (losses) or gains (realized/unrealized)
Included in earnings		—		(44)		9,756		13,214
Included in other comprehensive loss		(34)		(1,422)		—		—
Purchases, issuances, sales and settlements
Issuances		—		—		36,877		127,765
Settlements		—		(158,454)		(555,429)		(647,881)
Ending balance	$	18,997	$	19,031	$	818,040	$	1,388,416

Total losses year to date included
in earnings attributable to the change in
unrealized gains or losses relating to assets still
held at the reporting date as shown above.	$	—	$	—	$	(5,278)	$	(2,133)

The Company’s Level 3 asset activity for the categories shown are summarized below (in thousands):


	Fair Value Measurements Using
	Significant Unobservable Inputs
	(Level 3)

	Investment in				Assets held-for-sale
	unconsolidated entity				from discontinued operations
	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Beginning balance	$	—	$	31,294	$	3,268	$	113,650
Transfers to commercial loans, at fair value		—		(22,926)		—		(61,580)
Transfers to other real estate owned		—		(2,145)		—		(17,343)
Total (losses) or gains (realized/unrealized)
Included in earnings		—		—		—		1,102
Purchases, issuances, sales, settlements and charge-offs
Issuances		—		—		—		5,222
Sales		—		—		—		(2,020)
Settlements		—		(6,223)		(3,268)		(35,750)
Charge-offs		—		—		—		(13)
Ending balance	$	—	$	—	$	—	$	3,268

Total losses year to date included
in earnings attributable to the change in
unrealized gains or losses relating to assets still
held at the reporting date as shown above.	$	—	$	—	$	—	$	566

Schedule Of Other Real Estate Owned


	September 30, 2022		December 31, 2021
Beginning balance	$	18,873	$	—
Transfers from investment in unconsolidated entity		—		2,145
Sales		—		(615)
Transfers from discontinued operations		—		17,343
Ending balance	$	18,873	$	18,873

Fair Value, Measurements, Recurring [Member]

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

Assets Measured At Fair Value On A Recurring And Nonrecurring Basis



			Fair Value Measurements at Reporting Date Using
			Quoted prices in		Significant other		Significant
				active markets for	observable		unobservable
	Fair value		identical assets		inputs		inputs
		September 30, 2022	(Level 1)		(Level 2)		(Level 3)
Investment securities, available-for-sale
U.S. Government agency securities	$	24,282	$	—	$	24,282	$	—
Asset-backed securities		340,981		—		340,981		—
Obligations of states and political subdivisions		47,489		—		47,489		—
Residential mortgage-backed securities		144,314		—		144,314		—
Collateralized mortgage obligation securities		44,762		—		44,762		—
Commercial mortgage-backed securities		181,966		—		169,769		12,197
Corporate debt securities		6,800		—		—		6,800
Total investment securities, available-for-sale		790,594		—		771,597		18,997
Commercial loans, at fair value		818,040		—		—		818,040
Interest rate swaps, asset		952		—		952		—
	$	1,609,586	$	—	$	772,549	$	837,037



			Fair Value Measurements at Reporting Date Using
			Quoted prices in		Significant other		Significant
				active markets for	observable		unobservable
	Fair value		identical assets		inputs		inputs
		December 31, 2021	(Level 1)		(Level 2)		(Level 3)
Investment securities, available-for-sale
U.S. Government agency securities	$	37,302	$	—	$	37,302	$	—
Asset-backed securities		360,418		—		360,418		—
Obligations of states and political subdivisions		52,137		—		52,137		—
Residential mortgage-backed securities		184,301		—		184,301		—
Collateralized mortgage obligation securities		61,861		—		61,861		—
Commercial mortgage-backed securities		251,076		—		238,659		12,417
Corporate debt securities		6,614		—		—		6,614
Total investment securities, available-for-sale		953,709		—		934,678		19,031
Commercial loans, at fair value		1,388,416		—		—		1,388,416
Assets held-for-sale from discontinued operations		3,268		—		—		3,268
Interest rate swaps, liability		553		—		553		—
	$	2,344,840	$	—	$	934,125	$	1,410,715

Fair Value Inputs, Assets, Quantitative Information

Level 3 instruments only

Weighted

Fair value at

Range at

average at

September 30, 2022

Valuation techniques

Unobservable inputs

September 30, 2022

Commercial mortgage-backed investment

security (a)

12,197

Discounted cash flow

Discount rate

11.08%

Insurance liquidating trust preferred security (b)

6,800

Discounted cash flow

Discount rate

10.82%

Federal Home Loan Bank, Atlantic

Central Bankers Bank, and Federal Reserve Bank stock

12,629

Cost

N/A

Loans, net of deferred loan fees and costs (c)

5,254,340

Discounted cash flow

Discount rate

5.00%-10.00%

5.87%

Commercial - SBA (d)

159,914

Discounted cash flow

Discount rate

3.85%-5.07%

4.95%

Non-SBA CRE - fixed (e)

62,923

Discounted cash flow and appraisal

Discount rate

8.26%-19.23%

12.34%

Non-SBA CRE - floating (f)

595,203

Discounted cash flow

Discount rate

5.56%-16.00%

6.26%

Commercial loans, at fair value

818,040

Subordinated debentures (g)

8,947

Discounted cash flow

Discount rate

11.05%

Other real estate owned (h)

18,873

Appraised value

N/A


		Level 3 instruments only
						Weighted
	Fair value at				Range at	average at
	December 31, 2021		Valuation techniques	Unobservable inputs	December 31, 2021	December 31, 2021
Commercial mortgage-backed investment
security	$	12,417	Discounted cash flow	Discount rate	8.00%	8.00%
Insurance liquidating trust preferred security		6,614	Discounted cash flow	Discount rate	7.00%	7.00%
Federal Home Loan Bank and Atlantic
Central Bankers Bank stock		1,663	Cost	N/A	N/A	N/A
Loans, net of deferred loan fees and costs		3,745,548	Discounted cash flow	Discount rate	1.00% - 7.00%	3.70%

Commercial - SBA		199,585	Discounted cash flow	Discount rate	1.04% - 2.12%	$103.40
Non-SBA CRE - fixed		79,864	Discounted cash flow	Discount rate	5.31%-7.43%	6.26%
Non-SBA CRE - floating		1,047,387	Discounted cash flow	Discount rate	3.96%-10.20%	4.96%
Other loans		61,580	Discounted cash flow	Discount rate	3.18%-6.80%	4.36%
Commercial loans, at fair value		1,388,416

Assets held-for-sale from discontinued operations		3,268	Discounted cash flow	Discount rate	3.18%-6.80%	4.36%

Subordinated debentures		8,815	Discounted cash flow	Discount rate	7.00%	7.00%

Other real estate owned		18,873	Appraised value	N/A	N/A	N/A

The valuations for each of the instruments above, as of the balance sheet date, are subject to judgments, assumptions and uncertainties, changes in which could have a significant impact on such valuations. Weighted averages were calculated by using the discount rate for each individual security or loan weighted by its market value, except for SBA loans. For SBA loans, the yields derived from market pricing indications for pools determined by date of loan origination were weighted. For commercial loans recorded at fair value, changes in fair value are reflected in the income statement. Changes in the fair value of securities which are unrelated to credit are recorded through equity. Changes in the fair value of loans recorded at amortized cost which are unrelated to credit are a disclosure item, without impact on the financial statements. The notes below refer to the September 30, 2022 table.

a)Commercial mortgage-backed investment security, consisting of a single Bank issued CRE security, is valued using discounted cash flow analysis. The discount rate and prepayment rate applied are based upon market observations and actual experience for comparable securities and implicitly assume market averages for defaults and loss severities. The security has significant

credit enhancement, or protection from other tranches in the issue, which limits the valuation exposure to credit losses. Nonetheless, increases in expected default rates or loss severities on the loans underlying the issue could reduce its value. In market environments in which investors demand greater yield compensation for credit risk, the discount rate applied would ordinarily be higher and the valuation lower. Changes in prepayments and loss experience could also change the interest earned on this holding in future periods and impact its fair value. As a single security, the weighted average rate shown is the actual rate applied to the security.

b)Insurance liquidating trust preferred security is a single debenture which is valued using discounted cash flow analysis. The discount rate used is based on the market rate on comparable relatively illiquid instruments and credit analysis. A change in the liquidating trust’s ability to repay the note, or an increase in interest rates, particularly for privately placed debentures, would affect the discount rate and thus the valuation. As a single security, the weighted average rate shown is the actual rate applied to the security.

c)Loans, net of deferred loan fees and costs are valued using discounted cash flow analysis. Discount rates are based upon available information for estimated current origination rates for each loan type. Origination rates may fluctuate based upon changes in the risk free (Treasury) rate and credit experience for each loan type.

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

e)Non-SBA CRE-fixed are fixed rate non-SBA commercial real estate mortgages. These loans are fair valued by a third party, based upon discounting at market rates for similar loans, except for one loan which is fair valued on the basis of an appraisal. Discount rates used in applying discounted cash flow analysis utilize input based upon loan terms, the general level of interest rates and the quality of the credit. Deterioration in loan performance or other credit weaknesses could result in fair value ranges which would be dependent upon potential buyers’ tolerance for such weaknesses and are difficult to estimate. The loan which is valued on the basis of an appraisal has a fair value of $4.8 million, an outstanding principal balance of $9.5 million and is discussed in Note 6.

f)Non-SBA CRE-floating are floating rate non-SBA loans, the vast majority of which are secured by multi-family properties (apartments). These are bridge loans designed to provide owners time and funding for property improvements and are generally valued using discounted cash flow analysis. The discount rate for the vast majority of these loans was based upon current origination rates for similar loans. Deterioration in loan performance or other credit weaknesses could result in fair value ranges which would be dependent upon potential buyers’ tolerance for such weaknesses and are difficult to estimate. At September 30, 2022, these loans were fair valued by a third party, based upon discounting at market rates for similar loans.

g)Subordinated debentures are comprised of two subordinated notes issued by the Company, maturing in 2038 with a floating rate of 3-month LIBOR plus 3.25%. These notes are valued using discounted cash flow analysis. The discount rate is based on the market rate for comparable relatively illiquid instruments. Changes in those market rates, or the credit of the Company could result in changes in valuation.

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

Fair Value, Measurements, Nonrecurring [Member]

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

Assets Measured At Fair Value On A Recurring And Nonrecurring Basis



			Fair Value Measurements at Reporting Date Using
			Quoted prices in active		Significant other		Significant
			markets for identical		observable		unobservable
	Fair value		assets		inputs		inputs⁽¹⁾
Description	September 30, 2022		(Level 1)		(Level 2)		(Level 3)
Collateral dependent loans⁽¹⁾	$	7,059	$	—	$	—	$	7,059
Other real estate owned		18,873		—		—		18,873
Intangible assets		2,149		—		—		2,149
	$	28,081	$	—	$	—	$	28,081



			Fair Value Measurements at Reporting Date Using
			Quoted prices in active		Significant other		Significant
			markets for identical		observable		unobservable
	Fair value		assets		inputs		inputs⁽¹⁾
Description	December 31, 2021		(Level 1)		(Level 2)		(Level 3)
Collateral dependent loans⁽¹⁾	$	3,005	$	—	$	—	$	3,005
Other real estate owned		18,873		—		—		18,873
Intangible assets		2,447		—		—		2,447
	$	24,325	$	—	$	—	$	24,325

1.The method of valuation approach for the loans evaluated for an allowance for credit losses on an individual loan basis and also for other real estate owned was the market approach based upon appraisals of the underlying collateral by external appraisers, reduced by 7% to 10% for estimated selling costs. Intangible assets are valued based upon internal analyses.