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Fair Value Disclosures (Tables)

9 Months Ended

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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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).

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