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Fair Value Disclosures (Tables) | 9 Months Ended
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Sep. 30, 2023
Fair Value Disclosures [Abstract] |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized in the table below.
(Dollars in thousands) |  | Fair Value Measurements Using |  | Total Fair Value
September 30, 2023 |  | Level 1 |  | Level 2 |  | Level 3 |
Assets measured at fair value on a recurring basis |  |  |  |  |  |  |  |
Securities available for sale |  |  |  |  |  |  |  |
Mortgage-backed securities, residential |  | $ | — |  |  | $ | 43,182 |  |  | $ | — |  |  | $ | 43,182 |
Asset-backed securities |  | — |  |  | 1,253 |  |  | — |  |  | 1,253 |
State and municipal |  | — |  |  | 5,028 |  |  | — |  |  | 5,028 |
CLO securities |  | — |  |  | 240,475 |  |  | — |  |  | 240,475 |
Corporate bonds |  | — |  |  | 749 |  |  | — |  |  | 749 |
SBA pooled securities |  | — |  |  | 1,637 |  |  | — |  |  | 1,637 |
|  | $ | — |  |  | $ | 292,324 |  |  | $ | — |  |  | $ | 292,324 |
Equity securities with readily determinable fair values |  |  |  |  |  |  |  |
Mutual fund |  | $ | 4,289 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,289 |
Loans held for sale |  | $ | — |  |  | $ | 6,416 |  |  | $ | — |  |  | $ | 6,416 |
Indemnification asset |  | $ | — |  |  | $ | — |  |  | $ | 1,701 |  |  | $ | 1,701 |
Revenue share asset |  | $ | — |  |  | $ | — |  |  | $ | 2,696 |  |  | $ | 2,696 |
Liabilities measured at fair value on a recurring basis |  |  |  |  |  |  |  |
Return of premium liability |  | $ | — |  |  | $ | — |  |  | $ | 272 |  |  | $ | 272 |
(Dollars in thousands) |  | Fair Value Measurements Using |  | Total Fair Value
December 31, 2022 |  | Level 1 |  | Level 2 |  | Level 3 |
Assets measured at fair value on a recurring basis |  |  |  |  |  |  |  |
Securities available for sale |  |  |  |  |  |  |  |
Mortgage-backed securities, residential |  | $ | — |  |  | $ | 50,633 |  |  | $ | — |  |  | $ | 50,633 |
Asset-backed securities |  | — |  |  | 6,331 |  |  | — |  |  | 6,331 |
State and municipal |  | — |  |  | 13,438 |  |  | — |  |  | 13,438 |
CLO Securities |  | — |  |  | 181,011 |  |  | — |  |  | 181,011 |
Corporate bonds |  | — |  |  | 1,263 |  |  | — |  |  | 1,263 |
SBA pooled securities |  | — |  |  | 1,828 |  |  | — |  |  | 1,828 |
|  | $ | — |  |  | $ | 254,504 |  |  | $ | — |  |  | $ | 254,504 |
Equity securities with readily determinable fair values |  |  |  |  |  |  |  |
Mutual fund |  | $ | 5,191 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,191 |
Loans held for sale |  | $ | — |  |  | $ | 5,641 |  |  | $ | — |  |  | $ | 5,641 |
Indemnification asset |  | $ | — |  |  | $ | — |  |  | $ | 3,896 |  |  | $ | 3,896 |
Revenue share asset |  | $ | — |  |  | $ | — |  |  | $ | 5,515 |  |  | $ | 5,515 |
Liabilities measured at fair value on a recurring basis |  |  |  |  |  |  |  |
Return of premium liability |  | $ | — |  |  | $ | — |  |  | $ | 575 |  |  | $ | 575 |
Reconciliation of Opening Balance to Closing Balance of Fair Value of Contingent Consideration, Assets | A reconciliation of the opening balance to the closing balance of the fair value of the indemnification asset is as follows:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(Dollars in thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Beginning balance |  | $ | 1,905 |  |  | $ | 4,377 |  |  | $ | 3,896 |  |  | $ | 4,786 |
Indemnification asset recognized in business combination |  | — |  |  | — |  |  | — |  |  | — |
Change in fair value of indemnification asset recognized in earnings |  | (204) |  |  | (204) |  |  | (530) |  |  | (613) |
Indemnification reduction |  | — |  |  | — |  |  | (1,665) |  |  | — |
Ending balance |  | $ | 1,701 |  |  | $ | 4,173 |  |  | $ | 1,701 |  |  | $ | 4,173 |
A reconciliation of the opening balance to the closing balance of the fair value of the revenue share asset is as follows:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(Dollars in thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Beginning balance |  | $ | 3,053 |  |  | $ | 5,210 |  |  | $ | 5,515 |  |  | $ | — |
Revenue share asset recognized |  | — |  |  | 1,027 |  |  | — |  |  | 6,237 |
Change in fair value of revenue share asset recognized in earnings |  | (78) |  |  | 171 |  |  | (1,867) |  |  | 171 |
Revenue share payments received |  | (279) |  |  | (230) |  |  | (952) |  |  | (230) |
Ending balance |  | $ | 2,696 |  |  | $ | 6,178 |  |  | $ | 2,696 |  |  | $ | 6,178 |
Reconciliation of Opening Balance to Closing Balance of Fair Value of Contingent Consideration, Liabilities | A reconciliation of the opening balance to the closing balance of the fair value of the return of premium liability is as follows:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(Dollars in thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Beginning balance |  | $ | 376 |  |  | $ | 708 |  |  | $ | 575 |  |  | $ | — |
Return of premium liability recognized |  | — |  |  | — |  |  | — |  |  | 708 |
Change in fair value of return of premium liability recognized in earnings |  | (104) |  |  | (104) |  |  | (303) |  |  | (104) |
Return of premium payments made |  | — |  |  | (34) |  |  | — |  |  | (34) |
Ending balance |  | $ | 272 |  |  | $ | 570 |  |  | $ | 272 |  |  | $ | 570 |
Fair Value of Assets Measured on Non-recurring Basis | Assets measured at fair value on a non-recurring basis are summarized in the table below. There were no liabilities measured at fair value on a non-recurring basis at September 30, 2023 and December 31, 2022.
(Dollars in thousands) |  | Fair Value Measurements Using |  | Total Fair Value
September 30, 2023 |  | Level 1 |  | Level 2 |  | Level 3 |
Collateral dependent loans |  |  |  |  |  |  |  |
Commercial real estate |  | $ | — |  |  | $ | — |  |  | $ | 1,374 |  |  | $ | 1,374 |
1-4 family residential |  | — |  |  | — |  |  | 63 |  |  | 63 |
Commercial |  | — |  |  | — |  |  | 1,431 |  |  | 1,431 |
Factored receivables |  | — |  |  | — |  |  | 32,500 |  |  | 32,500 |
|  | $ | — |  |  | $ | — |  |  | $ | 35,368 |  |  | $ | 35,368 |
(Dollars in thousands) |  | Fair Value Measurements Using |  | Total Fair Value
December 31, 2022 |  | Level 1 |  | Level 2 |  | Level 3 |
Collateral dependent loans |  |  |  |  |  |  |  |
Commercial real estate |  | $ | — |  |  | $ | — |  |  | $ | 269 |  |  | $ | 269 |
1-4 family residential |  | — |  |  | — |  |  | 46 |  |  | 46 |
Commercial |  | — |  |  | — |  |  | 6,994 |  |  | 6,994 |
Factored receivables |  | — |  |  | — |  |  | 29,367 |  |  | 29,367 |
Equity investment without readily determinable fair value |  | 38,088 |  |  | — |  |  | — |  |  | 38,088 |
|  | $ | 38,088 |  |  | $ | — |  |  | $ | 36,676 |  |  | $ | 74,764 |
Estimated Fair Value of Company's Financial Assets and Financial Liabilities | The estimated fair values of the Company’s financial instruments not measured at fair value on a recurring or non-recurring basis at September 30, 2023 and December 31, 2022 were as follows:
(Dollars in thousands) |  | Carrying Amount |  | Fair Value Measurements Using |  | Total Fair Value
September 30, 2023 |  |  | Level 1 |  | Level 2 |  | Level 3 |
Financial assets: |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 337,583 |  |  | $ | 337,583 |  |  | $ | — |  |  | $ | — |  |  | $ | 337,583 |
Securities - held to maturity |  | 3,311 |  |  | — |  |  | — |  |  | 4,756 |  |  | 4,756 |
Loans not previously presented, gross |  | 4,336,160 |  |  | 129,815 |  |  | — |  |  | 4,111,712 |  |  | 4,241,527 |
FHLB and other restricted stock |  | 10,101 |  |  | N/A |  | N/A |  | N/A |  | N/A
Accrued interest receivable |  | 33,930 |  |  | 33,930 |  |  | — |  |  | — |  |  | 33,930 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |
Deposits |  | 4,487,051 |  |  | — |  |  | 4,478,382 |  |  | — |  |  | 4,478,382 |
Federal Home Loan Bank advances |  | 30,000 |  |  | — |  |  | 30,000 |  |  | — |  |  | 30,000 |
Subordinated notes |  | 108,454 |  |  | — |  |  | 88,057 |  |  | — |  |  | 88,057 |
Junior subordinated debentures |  | 41,592 |  |  | — |  |  | 43,392 |  |  | — |  |  | 43,392 |
Accrued interest payable |  | 8,382 |  |  | 8,382 |  |  | — |  |  | — |  |  | 8,382 |
(Dollars in thousands) |  | Carrying Amount |  | Fair Value Measurements Using |  | Total Fair Value
December 31, 2022 |  |  | Level 1 |  | Level 2 |  | Level 3 |
Financial assets: |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 408,182 |  |  | $ | 408,182 |  |  | $ | — |  |  | $ | — |  |  | $ | 408,182 |
Securities - held to maturity |  | 4,077 |  |  | — |  |  | — |  |  | 5,476 |  |  | 5,476 |
Loans not previously presented, gross |  | 4,088,411 |  |  | 187,729 |  |  | — |  |  | 3,805,701 |  |  | 3,993,430 |
FHLB and other restricted stock |  | 6,252 |  |  | N/A |  | N/A |  | N/A |  | N/A
Accrued interest receivable |  | 21,977 |  |  | 21,977 |  |  | — |  |  | — |  |  | 21,977 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |
Deposits |  | 4,171,336 |  |  | — |  |  | 4,159,695 |  |  | — |  |  | 4,159,695 |
Customer repurchase agreements |  | 340 |  |  | — |  |  | 340 |  |  | — |  |  | 340 |
Federal Home Loan Bank advances |  | 30,000 |  |  | — |  |  | 30,000 |  |  | — |  |  | 30,000 |
Subordinated notes |  | 107,800 |  |  | — |  |  | 104,400 |  |  | — |  |  | 104,400 |
Junior subordinated debentures |  | 41,158 |  |  | — |  |  | 42,721 |  |  | — |  |  | 42,721 |
Accrued interest payable |  | 2,830 |  |  | 2,830 |  |  | — |  |  | — |  |  | 2,830 |

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- Definition Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (bbb) -SubTopic 10 -Topic 820 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
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