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Investment Securities | 12 Months Ended
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Dec. 31, 2024
Investment Securities [Abstract] |
Investment Securities | Note D—Investment Securities Fair values of available-for-sale securities are based on the fair market values supplied by a third-party market data provider, or where such third-party market data is not available, fair values are based on discounted cash flows. The third-party market data provider uses a pricing matrix which it creates daily, taking into consideration actual trade data, projected prepayments, and when relevant, projected credit defaults and losses. The amortized cost, gross unrealized gains and losses and fair values of the Company’s investment securities classified as available-for-sale are summarized as follows (dollars in thousands):
Available-for-sale |  | December 31, 2024
|  |  |  | Gross |  | Gross |  |  | Allowance |  |
|  | Amortized |  | unrealized |  | unrealized |  |  | for |  | Fair
|  | cost |  | gains |  | losses |  |  | Credit Losses |  | value
U.S. Government agency securities |  | $ | 31,233 |  | $ | — |  | $ | (1,271) |  | $ | — |  | $ | 29,962
Asset-backed securities(1) |  |  | 214,346 |  |  | 177 |  |  | (24) |  |  | — |  |  | 214,499
Tax-exempt obligations of states and political subdivisions |  |  | 6,860 |  |  | — |  |  | (73) |  |  | — |  |  | 6,787
Taxable obligations of states and political subdivisions |  |  | 29,267 |  |  | 7 |  |  | (441) |  |  | — |  |  | 28,833
Residential mortgage-backed securities |  |  | 438,562 |  |  | 1,137 |  |  | (6,280) |  |  | — |  |  | 433,419
Collateralized mortgage obligation securities |  |  | 27,279 |  |  | — |  |  | (1,127) |  |  | — |  |  | 26,152
Commercial mortgage-backed securities |  |  | 778,857 |  |  | 1,653 |  |  | (17,302) |  |  | — |  |  | 763,208
|  | $ | 1,526,404 |  | $ | 2,974 |  | $ | (26,518) |  | $ | — |  | $ | 1,502,860
|  | December 31, 2024
|  |  |  | Gross |  | Gross |  |  |
|  | Amortized |  | unrealized |  | unrealized |  | Fair
(1)Asset-backed securities as shown above |  | cost |  | gains |  | losses |  | value
Federally insured student loan securities |  | $ | 2,440 |  | $ | — |  | $ | (2) |  | $ | 2,438
Collateralized loan obligation securities |  |  | 211,906 |  |  | 177 |  |  | (22) |  |  | 212,061
|  | $ | 214,346 |  | $ | 177 |  | $ | (24) |  | $ | 214,499
Available-for-sale |  | December 31, 2023
|  |  |  | Gross |  | Gross |  |  | Allowance |  |
|  | Amortized |  | unrealized |  | unrealized |  |  | for |  | Fair
|  | cost |  | gains |  | losses |  |  | Credit Losses |  | value
U.S. Government agency securities |  | $ | 35,346 |  | $ | 6 |  | $ | (1,466) |  | $ | — |  | $ | 33,886
Asset-backed securities(1) |  |  | 327,159 |  |  | 9 |  |  | (1,815) |  |  | — |  |  | 325,353
Tax-exempt obligations of states and political subdivisions |  |  | 4,860 |  |  | 39 |  |  | (48) |  |  | — |  |  | 4,851
Taxable obligations of states and political subdivisions |  |  | 43,323 |  |  | 15 |  |  | (952) |  |  | — |  |  | 42,386
Residential mortgage-backed securities |  |  | 169,882 |  |  | 108 |  |  | (9,223) |  |  | — |  |  | 160,767
Collateralized mortgage obligation securities |  |  | 35,575 |  |  | — |  |  | (1,537) |  |  | — |  |  | 34,038
Commercial mortgage-backed securities |  |  | 157,759 |  |  | — |  |  | (11,506) |  |  | — |  |  | 146,253
Corporate debt securities |  |  | 10,000 |  |  | — |  |  | — |  |  | (10,000) |  |  | —
|  | $ | 783,904 |  | $ | 177 |  | $ | (26,547) |  | $ | (10,000) |  | $ | 747,534
|  | December 31, 2023
|  |  |  | Gross |  | Gross |  |  |
|  | Amortized |  | unrealized |  | unrealized |  | Fair
(1)Asset-backed securities as shown above |  | cost |  | gains |  | losses |  | value
Federally insured student loan securities |  | $ | 6,032 |  | $ | — |  | $ | (49) |  | $ | 5,983
Collateralized loan obligation securities |  |  | 321,127 |  |  | 9 |  |  | (1,766) |  |  | 319,370
|  | $ | 327,159 |  | $ | 9 |  | $ | (1,815) |  | $ | 325,353
The amortized cost and fair value of the Company’s investment securities at December 31, 2024, by contractual maturity are shown below (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
|  | Available-for-sale
|  | Amortized |  | Fair
|  | cost |  | value
Due before one year |  | $ | 51,119 |  | $ | 50,650
Due after one year through five years |  |  | 183,022 |  |  | 179,836
Due after five years through ten years |  |  | 684,504 |  |  | 678,320
Due after ten years |  |  | 607,759 |  |  | 594,054
|  | $ | 1,526,404 |  | $ | 1,502,860
The Company had no securities pledged against that line at December 31, 2024 and December 31, 2023. There were no gross realized gains on sales of securities for each of the years ended December 31, 2024, 2023 and 2022. R ealized losses on securities sales/calls were $2,000, $4,000, and $6,000, respectively, for the years ended December 31, 2024, 2023 and 2022. Investments in FHLB, ACBB, and FRB stock are recorded at cost and amounted to $15.6 million at December 31, 2024, and $15.6 million at December 31, 2023. The table below indicates the length of time individual securities had been in continuous unrealized loss positions at December 31, 2024 (dollars in thousands):
Available-for-sale |  |  |  | Less than 12 months |  | 12 months or longer |  | Total
|  | Number of securities |  | Fair Value |  | Unrealized losses |  |  | Fair Value |  | Unrealized losses |  | Fair Value |  | Unrealized losses
Description of Securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government agency securities |  | 18 |  | $ | 15,384 |  | $ | (307) |  | $ | 14,578 |  | $ | (964) |  | $ | 29,962 |  | $ | (1,271)
Asset-backed securities |  | 14 |  |  | 35,108 |  |  | (8) |  |  | 33,854 |  |  | (16) |  |  | 68,962 |  |  | (24)
Tax-exempt obligations of states and political subdivisions |  | 6 |  |  | 5,664 |  |  | (36) |  |  | 1,123 |  |  | (37) |  |  | 6,787 |  |  | (73)
Taxable obligations of states and political subdivisions |  | 18 |  |  | 1,157 |  |  | (18) |  |  | 25,734 |  |  | (423) |  |  | 26,891 |  |  | (441)
Residential mortgage-backed securities |  | 155 |  |  | 172,076 |  |  | (1,156) |  |  | 37,527 |  |  | (5,124) |  |  | 209,603 |  |  | (6,280)
Collateralized mortgage obligation securities |  | 19 |  |  | — |  |  | — |  |  | 26,152 |  |  | (1,127) |  |  | 26,152 |  |  | (1,127)
Commercial mortgage-backed securities |  | 37 |  |  | 351,595 |  |  | (4,402) |  |  | 166,554 |  |  | (12,900) |  |  | 518,149 |  |  | (17,302)
Total unrealized loss position |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
investment securities |  | 267 |  | $ | 580,984 |  | $ | (5,927) |  | $ | 305,522 |  | $ | (20,591) |  | $ | 886,506 |  | $ | (26,518)
The table below indicates the length of time individual securities had been in continuous unrealized loss positions at December 31, 2023 (dollars in thousands):
Available-for-sale |  |  |  | Less than 12 months |  | 12 months or longer |  | Total
|  | Number of securities |  | Fair Value |  | Unrealized losses |  | Fair Value |  | Unrealized losses |  | Fair Value |  | Unrealized losses
Description of Securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government agency securities |  | 15 |  | $ | 14,945 |  | $ | (302) |  | $ | 17,697 |  | $ | (1,164) |  | $ | 32,642 |  | $ | (1,466)
Asset-backed securities |  | 53 |  |  | — |  |  | — |  |  | 314,749 |  |  | (1,815) |  |  | 314,749 |  |  | (1,815)
Tax-exempt obligations of states and political subdivisions |  | 3 |  |  | 997 |  |  | (3) |  |  | 1,850 |  |  | (45) |  |  | 2,847 |  |  | (48)
Taxable obligations of states and political subdivisions |  | 25 |  |  | — |  |  | — |  |  | 39,621 |  |  | (952) |  |  | 39,621 |  |  | (952)
Residential mortgage-backed securities |  | 132 |  |  | 20,884 |  |  | (491) |  |  | 126,645 |  |  | (8,732) |  |  | 147,529 |  |  | (9,223)
Collateralized mortgage obligation securities |  | 20 |  |  | — |  |  | — |  |  | 34,038 |  |  | (1,537) |  |  | 34,038 |  |  | (1,537)
Commercial mortgage-backed securities |  | 40 |  |  | — |  |  | — |  |  | 146,253 |  |  | (11,506) |  |  | 146,253 |  |  | (11,506)
Total unrealized loss position |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
investment securities |  | 288 |  | $ | 36,826 |  | $ | (796) |  | $ | 680,853 |  | $ | (25,751) |  | $ | 717,679 |  | $ | (26,547)
CECL accounting requires that an ACL be established through a charge to the income statement to recognize credit deterioration. The charge may be reversed should credit improve in the future. Prior accounting required recognition of losses of other-than temporary-impairment, which could not be reversed in future periods. The Company periodically reviews its investment portfolio to determine whether an ACL is warranted, based on evaluations of the creditworthiness of the issuers/guarantors, the underlying collateral if applicable and the continuing performance of the securities. The Company did no t recognize credit charges on investment securities in either 2024 or 2022. In 2023, the Company recorded a provision for credit loss on a security as follows. The Company owned one single issuer trust preferred security issued by an insurance company through the third quarter of 2024, which was purchased in 2006, and owns no other such security or similar security. In the fourth quarter of 2023, the Bank provided for a potential loss for the full amount of the $10.0 million par value of the security through a provision for credit loss of $10.0 million. In the fourth quarter of 2024, the issuer tendered an offer to repurchase these securities which the Company accepted. Accordingly, $1.0 million was recovered which resulted in a reversal of the provision for credit loss in that amount, and a charge-off of the remaining $9.0 million of the security. The Company has evaluated the securities in the above tables as of December 31, 2024 and has concluded that, except for the trust preferred security discussed above for which the ACL was eliminated in the fourth quarter of 2024, no ne of these securities required an ACL. The Company evaluates whether an ACL is required by considering primarily the following factors: (a) the extent to which the fair value is less than the amortized cost of the security, (b) changes in the financial condition, credit rating and near-term prospects of the issuer, (c) whether the issuer is current on contractually obligated interest and principal payments, (d) changes in the financial condition of the security’s underlying collateral and (e) the payment structure of the security. The Company’s determination of the best estimate of expected future cash flows, which is used to determine the credit loss amount, is a quantitative and qualitative process that incorporates information received from third-party sources along with internal assumptions and judgments regarding the future performance of the security. With the exception of the trust preferred security discussed above and the CRE-2 security discussed in “Note E—Loans”, the Company concluded that the securities that are in an unrealized loss position are in a loss position because of changes in market interest rates after the securities were purchased. The severity of the impact of fair value in relation to the carrying amounts of the individual investments is consistent with market developments. The Company’s analysis of each investment is performed at the security level and the Company intends to hold its investment securities to maturity.

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