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Fair Value | 12 Months Ended
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Dec. 31, 2025
Fair Value [Abstract] |
Fair Value | Note 10—Fair Value ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Level 1 valuation is based on quoted market prices for identical assets or liabilities to which the Company has access at the measurement date. Level 2 valuation is based on other observable inputs for the asset or liability, either directly or indirectly. This includes quoted prices for similar assets in active or inactive markets, inputs other than quoted prices that are observable for the asset or liability such as yield curves, volatilities, prepayment speeds, credit risks, default rates, or inputs that are derived principally from, or corroborated through, observable market data by market-corroborated reports. Level 3 valuation is based on “unobservable inputs” which the Company believes is the best information available in the circumstances. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Recurring Measurements Assets and liabilities measured at fair value on a recurring basis, segregated by fair value hierarchy, are summarized below (dollars in thousands):
|  |  |  | December 31, 2025
| Total |  | Level 1 |  | Level 2 |  | Level 3
Investment securities, available-for-sale |  |  |  |  |  |  |  |  |  |  |
Investment securities, available-for-sale |  |  |  |  |  |  |  |  |  |  |
U.S. Government agency securities | $ | 25,109 |  | $ | — |  | $ | 25,109 |  | $ | —
Asset-backed securities |  | 234,101 |  |  | — |  |  | 234,101 |  |  | —
Obligations of states and political subdivisions |  | 28,563 |  |  | — |  |  | 28,563 |  |  | —
Residential mortgage-backed securities |  | 464,323 |  |  | — |  |  | 464,323 |  |  | —
Collateralized mortgage obligation securities |  | 57,580 |  |  | — |  |  | 57,580 |  |  | —
Commercial mortgage-backed securities |  | 862,074 |  |  | — |  |  | 862,074 |  |  | —
Total investment securities, available-for-sale |  | 1,671,750 |  |  | — |  |  | 1,671,750 |  |  | —
Commercial loans, at fair value |  | 139,389 |  |  | — |  |  | — |  |  | 139,389
Credit enhancement asset |  | 31,138 |  |  | — |  |  | 31,138 |  |  | —
| $ | 1,842,277 |  | $ | — |  | $ | 1,702,888 |  | $ | 139,389
|  |  |  | December 31, 2024
| Total |  | Level 1 |  | Level 2 |  | Level 3
Investment securities, available-for-sale | . |  |  |  |  |  |  |  |  |  |
Investment securities, available-for-sale |  |  |  |  |  |  |  |  |  |  |
U.S. Government agency securities | $ | 29,962 |  | $ | — |  | $ | 29,962 |  | $ | —
Asset-backed securities |  | 214,499 |  |  | — |  |  | 214,499 |  |  | —
Obligations of states and political subdivisions |  | 35,620 |  |  | — |  |  | 35,620 |  |  | —
Residential mortgage-backed securities |  | 433,419 |  |  | — |  |  | 433,419 |  |  | —
Collateralized mortgage obligation securities |  | 26,152 |  |  | — |  |  | 26,152 |  |  | —
Commercial mortgage-backed securities |  | 763,208 |  |  | — |  |  | 759,746 |  |  | 3,462
Total investment securities, available-for-sale |  | 1,502,860 |  |  | — |  |  | 1,499,398 |  |  | 3,462
Commercial loans, at fair value |  | 223,115 |  |  | — |  |  | — |  |  | 223,115
Credit enhancement asset |  | 12,909 |  |  | — |  |  | 12,909 |  |  | —
| $ | 1,738,884 |  | $ | — |  | $ | 1,512,307 |  | $ | 226,577
Investment securities, available for sale, at fair value. The estimated Level 2 fair values of investment securities are based on quoted market prices, if available, or estimated independently by a third-party pricing service based upon their matrix pricing technique. Level 3 investment securities relate to commercial mortgage-backed securities that were issued by CRE-2, that were fully repaid in 2025. Fair values for Level 3 investments is based on the present valuing of cash flows, which discounts expected cash flows from principal and interest using yield to maturity, or yield to call as appropriate, at the measurement date. Co mmercial loans, at fair value are comprised primarily of commercial real estate bridge loans and SBA loans which had been originated for sale or securitization in the secondary market, and which are now being held for investment. Commercial real estate bridge loans and SBA loans are valued using a discounted cash flow analysis based upon pricing for similar loans where market indications of the sales price of such loans are not available. SBA loans are valued on a pooled basis and commercial real estate bridge loans are valued individually. Credit enhancement asset has a carrying value that approximates fair value. Activity in Level 3 instruments is summarized below (dollars in thousands):
| Investment |  | Commercial loans,
| securities |  | at fair value
| December 31, 2025 |  | December 31, 2024 |  | December 31, 2025 |  | December 31, 2024
Beginning balance | $ | 3,462 |  | $ | 12,071 |  | $ | 223,115 |  | $ | 332,766
Transfers to OREO |  | — |  |  | — |  |  | — |  |  | (2,863)
Total net (losses) or gains (realized/unrealized) |  |  |  |  |  |  |  |  |  |  |
Included in earnings(1) |  | — |  |  | — |  |  | 1,815 |  |  | 3,016
Included in earnings (included in credit loss) |  | — |  |  | — |  |  | — |  |  | —
Included in other comprehensive income (loss) |  | — |  |  | 503 |  |  | — |  |  | —
Purchases, advances, sales and settlements |  |  |  |  |  |  |  |  |  |  |
Advances |  | — |  |  | — |  |  | 3,651 |  |  | —
Settlements |  | (3,462) |  |  | (9,112) |  |  | (89,192) |  |  | (109,804)
Ending balance | $ | — |  | $ | 3,462 |  | $ | 139,389 |  | $ | 223,115
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. | $ | — |  | $ | — |  | $ | — |  | $ | (683)
(1)For commercial loans at fair value, gains or losses are recognized in Non-interest income—Net realized and unrealized gains on commercial loans, at fair value in the Consolidated Statements of Operations. Information related to the valuation of Level 3 instruments is as follows (dollars in thousands):
|  | Fair value at |  |  |  |  |  |  |  |
|  | December 31, 2025 |  | Valuation techniques |  | Unobservable inputs |  | Range |  | Weighted average
Commercial loans, at fair value: |  |  |  |  |  |  |  |  |  |  |
Commercial - SBA |  | $ | 68,374 |  | Discounted cash flow |  | Discount rate |  | 5.73% |  | 5.73%
Non-SBA commercial real estate |  |  | 71,015 |  | Discounted cash flow and appraisal |  | Discount rate |  | 6.50%-8.98% |  | 6.94%
|  | $ | 139,389 |  |  |  |  |  |  |  |
|  | Fair value at |  |  |  |  |  |  |  |
|  | December 31, 2024 |  | Valuation techniques |  | Unobservable inputs |  | Range |  | Weighted average
Investment securities: |  |  |  |  |  |  |  |  |  |  |
Commercial mortgage-backed investment security |  | $ | 3,462 |  | Discounted cash flow |  | Discount rate |  | 9.45% |  | 9.45%
Commercial loans, at fair value: |  |  |  |  |  |  |  |  |  |  |
Commercial - SBA |  | $ | 89,902 |  | Discounted cash flow |  | Discount rate |  | 6.77% |  | 6.77%
Non-SBA commercial real estate |  |  | 133,213 |  | Discounted cash flow and appraisal |  | Discount rate |  | 6.80%-11.50% |  | 8.77%
|  | $ | 223,115 |  |  |  |  |  |  |  |
The valuations for each of the instruments above 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 yield derived from market pricing indications for comparable pools determined by date of loan origination. For commercial loans recorded at fair value, changes in fair value are reflected in the Consolidated Statements of Operations. Unrealized changes in the fair value of securities which are unrelated to credit are recorded through other comprehensive income. Further discussion of the December 31, 2025 measurements follows: 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 these seasoned loans are based on a seasoning vector for constant prepayment rates from 3% to 30% over life. Non-SBA commercial real estate loans are primarily bridge loans designed to provide property owners time and funding for property improvements. They are fair valued by a third-party, based upon a discounted cash flow analysis us. Discount rates used in the discounted cash flow analysis are based upon loan terms, the general level of interest rates and the quality of the credit. Non-Recurring Measurements Assets measured at fair value on a nonrecurring basis are summarized below (dollars in thousands):
|  |  |  | Fair Value Measurements at Reporting Date Using
| Fair value |  |  |  |  |  |
| December 31, 2025 |  | Level 1 |  | Level 2 |  | Level 3
Loans, net: |  |  |  |  |  |  |  |  |  |  |
Collateral dependent loans with specific reserves | $ | 15,190 |  | $ | — |  | $ | — |  | $ | 15,190
Other real estate owned |  | 60,695 |  |  | — |  |  | — |  |  | 60,695
| $ | 75,885 |  | $ | — |  | $ | — |  | $ | 75,885
|  |  |  | Fair Value Measurements at Reporting Date Using
| Fair value |  |  |  |  |  |
| December 31, 2024 |  | Level 1 |  | Level 2 |  | Level 3
Loans, net: |  |  |  |  |  |  |  |  |  |  |
Collateral dependent loans with specific reserves | $ | 6,587 |  | $ | — |  | $ | — |  | $ | 6,587
Other real estate owned |  | 62,025 |  |  | — |  |  | — |  |  | 62,025
| $ | 68,612 |  | $ | — |  | $ | — |  | $ | 68,612
Loans recorded at amortized cost that are in non-accrual status are treated as collateral dependent to the extent they have resulted from borrower financial difficulty (and not from administrative delays or other mitigating factors) and are not brought current. At December 31, 2025, the Company’s basis in the non-accrual loans, or the loan principal of $21.4 million was reduced by specific reserves of $6.2 million within the ACL as of that date, representing the deficiency between principal and estimated collateral values, which were reduced by estimated costs to sell. When the deficiency is deemed uncollectible, it is charged off by reducing the specific reserve and decreasing principal. Valuation techniques consistent with the market and/or cost approach were used to measure fair value and primarily included observable inputs for the individual loans being evaluated such as recent sales of similar collateral or observable market data for operational or carrying costs. In cases where such inputs were unobservable, the loan balance is reflected within the Level 3 hierarchy. For OREO, 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. The Company’s year-to-date OREO activity is summarized below (dollars in thousands):
| December 31, 2025 |  | December 31, 2024
Beginning balance | $ | 62,025 |  | $ | 16,949
Transfer from loans, net |  | 1,978 |  |  | 42,120
Total realized net gains included in earnings: Non-interest expense - other(1) |  | 754 |  |  | —
Transfer from commercial loans, at fair value |  | — |  |  | 2,863
Advances |  | 2,142 |  |  | 1,695
Sales |  | (6,204) |  |  | (1,602)
Ending balance | $ | 60,695 |  | $ | 62,025
(1)Recognized in Non-interest expense - Other in the Consolidated Statements of Operations. Fair Value of Other Financial Instruments The Company determines estimates of fair value for other financial instruments for disclosure purposes only, as follows: Carrying value of certain instruments approximates fair value, due to the short-term or highly liquid nature of such instruments, including cash and cash equivalents, stock in FRB, FHLB and ACBB, accrued interest receivable, demand and interest checking, savings and money market, and other liabilities - accrued interest payable. Loans, net have an estimated fair value using the present value of future cash flows. The discount rate used in these calculations is the estimated current market rate adjusted for credit risk. Other long-term borrowings resulting from sold loans which did not qualify for true sale accounting are presented in the amount of the principal of such loans. The following tables provide information regarding carrying amounts and estimated fair values of all the Company’s financial instruments (dollars in thousands):
| December 31, 2025
| Carrying |  | Estimated |  |  |  |  |  |
| amount |  | fair value |  | Level 1 |  | Level 2 |  | Level 3
ASSETS: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities, available-for-sale | $ | 1,671,750 |  | $ | 1,671,750 |  | $ | — |  | $ | 1,671,750 |  | $ | —
Commercial loans, at fair value |  | 139,389 |  |  | 139,389 |  |  | — |  |  | — |  |  | 139,389
Loans, net of deferred loan fees and costs |  | 7,116,676 |  |  | 7,073,348 |  |  | — |  |  | — |  |  | 7,073,348
FRB, FHLB and ACBB stock |  | 25,205 |  |  | 25,205 |  |  | — |  |  | — |  |  | 25,205
Accrued interest receivable |  | 43,090 |  |  | 43,090 |  |  | — |  |  | 43,090 |  |  | —
Credit enhancement asset |  | 31,138 |  |  | 31,138 |  |  | — |  |  | 31,138 |  |  | —
LIABILITIES: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  |  |  |  |  |  |  |  |  |  |  |  |  |
Demand and interest checking |  | 7,827,037 |  |  | 7,827,037 |  |  | — |  |  | 7,827,037 |  |  | —
Savings and money market |  | 338,459 |  |  | 338,459 |  |  | — |  |  | 338,459 |  |  | —
Short-term borrowings |  | 199,000 |  |  | 199,000 |  |  | — |  |  | 199,000 |  |  | —
Senior debt |  | 196,253 |  |  | 202,503 |  |  | — |  |  | 202,503 |  |  | —
Subordinated debentures |  | 13,401 |  |  | 11,220 |  |  | — |  |  | — |  |  | 11,220
Other long-term borrowings |  | 13,712 |  |  | 13,712 |  |  | — |  |  | 13,712 |  |  | —
Other liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accrued interest payable |  | 6,802 |  |  | 6,802 |  |  | — |  |  | 6,802 |  |  | —
| December 31, 2024
| Carrying |  | Estimated |  |  |  |  |  |
| amount |  | fair value |  | Level 1 |  | Level 2 |  | Level 3
ASSETS: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities, available-for-sale | $ | 1,502,860 |  | $ | 1,502,860 |  | $ | — |  | $ | 1,499,398 |  | $ | 3,462
Commercial loans, at fair value |  | 223,115 |  |  | 223,115 |  |  | — |  |  | — |  |  | 223,115
Loans, net of deferred loan fees and costs |  | 6,113,628 |  |  | 5,998,293 |  |  | — |  |  | — |  |  | 5,998,293
FRB, FHLB and ACBB stock |  | 15,642 |  |  | 15,642 |  |  | — |  |  | — |  |  | 15,642
Accrued interest receivable |  | 41,713 |  |  | 41,713 |  |  | — |  |  | 41,713 |  |  | —
Credit enhancement asset |  | 12,909 |  |  | 12,909 |  |  | — |  |  | 12,909 |  |  | —
LIABILITIES: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  |  |  |  |  |  |  |  |  |  |  |  |  |
Demand and interest checking |  | 7,434,212 |  |  | 7,434,212 |  |  | — |  |  | 7,434,212 |  |  | —
Savings and money market |  | 311,834 |  |  | 311,834 |  |  | — |  |  | 311,834 |  |  | —
Senior debt |  | 96,214 |  |  | 99,000 |  |  | — |  |  | 99,000 |  |  | —
Subordinated debentures |  | 13,401 |  |  | 11,320 |  |  | — |  |  | — |  |  | 11,320
Other long-term borrowings |  | 14,081 |  |  | 14,081 |  |  | — |  |  | 14,081 |  |  | —
Other liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accrued interest payable |  | 2,612 |  |  | 2,612 |  |  | — |  |  | 2,612 |  |  | —

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (bbb)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 3: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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