XML 43 R31.htm IDEA: XBRL DOCUMENT v3.20.2

Fair Value Measurements and Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

For financial assets and liabilities measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used as of September 30, 2020 and December 31, 2019 are as follows:

					September 30, 2020
					Fair Value Measurements at Reporting Date Using
		Total Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
(dollars in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Available-for-sale:
Federal agency obligations		$	46,145		$	-		$	46,145		$	-
Residential mortgage pass-through securities			242,224			-			242,224			-
Commercial mortgage pass-through securities			6,247			-			6,247			-
Obligations of U.S. states and political subdivision			128,396			-			119,484			8,912
Corporate bonds and notes			24,803			-			24,803			-
Asset-backed securities			4,868			-			4,868			-
Certificates of deposit			151			-			151			-
Other securities			181			181			-			-
Total available-for-sale		$	453,015		$	181		$	443,922		$	8,912
Equity securities			13,400			11,440			1,960			-
Total assets		$	466,415		$	11,621		$	445,882		$	8,912
Liabilities
Derivatives		$	(2,728	)	$	-		$	(2,728	)	$	-
Total liabilities		$	(2,728	)	$	-		$	(2,728	)	$	-

32

CONNECTONE BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 7. Fair Value Measurements and Fair Value of Financial Instruments – (continued)

					December 31, 2019
					Fair Value Measurements at Reporting Date Using
		Total Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
(dollars in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Available-for-sale:
Federal agency obligations		$	28,237		$	-		$	28,237		$	-
Residential mortgage pass-through securities			200,496			-			200,496			-
Commercial mortgage pass-through securities			4,997			-			4,997			-
Obligations of U.S. states and political subdivision			136,519			-			127,405			9,114
Corporate bonds and notes			28,382			-			28,382			-
Asset-backed securities			5,780			-			5,780			-
Certificates of deposit			150			-			150			-
Other securities			140			140			-			-
Total available-for-sale			404,701			140			395,447			9,114
Equity securities			11,185			11,185			-			-
Total assets		$	415,886		$	11,325		$	395,447		$	9,114
Liabilities
Derivatives		$	(273)		$	-		$	(273)		$	-
Total liabilities		$	(273)			-		$	(273)		$	-

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block]

For assets measured at fair value on a nonrecurring basis, the fair value measurements as of September 30, 2020 and December 31, 2019 are as follows:

					Fair Value Measurements at Reporting Date Using
					Quoted
					Prices
					in Active			Significant
					Markets for			Other			Significant
					Identical			Observable			Unobservable
Assets measured at fair value on a nonrecurring		September 30,			Assets			Inputs			Inputs
basis:		2020			(Level 1)			(Level 2)			(Level 3)
Impaired loans:					(dollars in thousands)
Commercial		$	13,024		$	-		$	-		$	13,024
Commercial real estate			1,722			-			-			1,722
Commercial construction			2,632			-			-			2,632
Residential real estate			214			-			-			214

					Fair Value Measurements at Reporting Date Using
					Quoted
					Prices
					in Active			Significant
					Markets for			Other			Significant
					Identical			Observable			Unobservable
Assets measured at fair value on a nonrecurring		December 31,			Assets			Inputs			Inputs
basis:		2019			(Level 1)			(Level 2)			(Level 3)
Impaired loans:					(dollars in thousands)
Commercial construction		$	2,286		$	-		$	-		$	2,286
Residential			240			-			-			240

Fair Value, Recurring basis [Table Text Block]

The tables below present a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30, 2020 and for the year ended December 31, 2019:

		Municipal
		Securities
		(dollars in thousands)
Balance as of December 31, 2019		$	9,114
Principal paydowns			(202	)
Balance as of September 30, 2020		$	8,912

		Municipal
		Securities
		(dollars in thousands)
Balance as of December 31, 2018		$	9,377
Principal paydowns			(263	)
Balance as of December 31, 2019		$	9,114

Significant unobservable inputs used in fair value measurements [Table Text Block]

The following methods and assumptions were used to estimate the fair values of the Company’s assets measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019. The table below provides quantitative information about significant unobservable inputs used in fair value measurements within Level 3 hierarchy.

September 30, 2020
					Valuation		Unobservable
		Fair Value			Techniques		Input		Rate
Securities available-for-sale:					(dollars in thousands)
Municipal securities		$	8,912		Discounted cash flows		Discount rate		2.9	%

December 31, 2019
					Valuation		Unobservable
		Fair Value			Techniques		Input		Rate
Securities available-for-sale:					(dollars in thousands)
Municipal securities		$	9,114		Discounted cash flows		Discount rate		2.9	%

Fair Value Measurements, Nonrecurring [Table Text Block]

Nonrecurring basis: The following methods and assumptions were used to estimate the fair values of the Company’s assets measured at fair value on a nonrecurring basis for the periods presented. The tables below provide quantitative information about significant unobservable inputs used in fair value measurements within Level 3 hierarchy.

September 30, 2020

					Valuation		Unobservable
(dollars in thousands)		Fair Value			Techniques		Input		Range (weighed average)
Impaired loans:
Commercial		$	13,024		Market approach (100%)		Average transfer price as a price to unpaid principal balance		62 - 68 (63)
Commercial real estate		$	1,722		Appraisals of collateral value		Adjustment for comparable sales		-25% to 20% (-8%)
Commercial Construction		$	2,632		Appraisals of collateral value		Adjustment for comparable sales		-13% to +6% (-3%)
Residential		$	214		Appraisals of collateral value		Adjustment for comparable sales		-3% to +11% (0%)

December 31, 2019

					Valuation		Unobservable
(dollars in thousands)		Fair Value			Techniques		Input		Range (weighed average)
Impaired loans:
Commercial construction		$	2,286		Appraisals of collateral value		Comparable sales		0% - 5% (3%)
Residential		$	240		Appraisals of collateral value		Comparable sales		2% - 14% (9%)

Fair Value, by Balance Sheet Grouping [Table Text Block]

As of September 30, 2020 the fair value measurements presented are consistent with Topic 820, Fair Value Measurement, in which fair value represents exit price. The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments as of September 30, 2020 and December 31, 2019:

								Fair Value Measurements
								Quoted
								Prices in
								Active			Significant
								Markets for			Other			Significant
								Identical			Observable			Unobservable
		Carrying			Fair			Assets			Inputs			Inputs
		Amount			Value			(Level 1)			(Level 2)			(Level 3)
		(dollars in thousands)
September 30, 2020
Financial assets:
Cash and due from banks		$	256,119		$	256,119		$	256,119		$	-		$	-
Securities available-for-sale			453,015			453,015			181			443,992			8,912
Investment in restricted stocks			28,713			n/a			n/a			n/a			n/a
Equity securities			13,400			13,400			11,440			1,960			-
Net loans			6,176,784			6,270,322			-			-			6,270,322
Accrued interest receivable			34,326			34,326			-			1,788			32,538
Financial liabilities:
Noninterest-bearing deposits			1,270,021			1,270,021			1,270,021			-			-
Interest-bearing deposits			4,528,735			4,547,338			2,909,126			1,638,212			-
Borrowings			506,225			510,736			-			510,736			-
Subordinated debentures			202,552			209,328			-			209,328			-
Derivatives			2,728			2,728			-			2,728			-
Accrued interest payable			4,240			4,240			-			4,240			-
December 31, 2019
Financial assets:
Cash and due from banks		$	201,483		$	201,483		$	201,483		$	-		$	-
Investment securities available-for-sale			404,701			404,701			140			395,447			9,114
Restricted investment in bank stocks			27,397			n/a			n/a			n/a			n/a
Equity securities			11,185			11,185			11,185			-			-
Net loans			5,075,234			5,096,669			-			-			5,096,669
Accrued interest receivable			20,949			20,949			-			2,187			18,762
Financial liabilities:
Noninterest-bearing deposits			861,728			861,728			861,728			-			-
Interest-bearing deposits			3,905,814			3,917,405			2,352,093			1,565,312			-
Borrowings			500,293			502,026			-			502,026			-
Subordinated debentures			128,885			134,973			-			134,973			-
Derivatives			273			273			-			273			-
Accrued interest payable			4,018			4,018			-			4,018			-

X

- Definition

Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique for each separate class of asset and liability measured on recurring and nonrecurring basis.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (bbb)
-URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258

+ Details

Name:	us-gaap_FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisValuationTechniquesTableTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- 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
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (bbb)
-URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258

+ Details

Name:	us-gaap_FairValueAssetsMeasuredOnNonrecurringBasisTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique used to measure similar asset in prior period by class of asset or liability on non-recurring basis.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (bbb)
-URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258

+ Details

Name:	us-gaap_FairValueAssetsMeasuredOnNonrecurringBasisValuationTechniquesTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of assets, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258

+ Details

Name:	us-gaap_FairValueAssetsMeasuredOnRecurringBasisTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=121572278&loc=d3e13467-108611

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258

+ Details

Name:	us-gaap_FairValueByBalanceSheetGroupingTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- References

No definition available.

+ Details

Name:	us-gaap_FairValueDisclosuresAbstract
Namespace Prefix:	us-gaap_
Data Type:	xbrli:stringItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258

+ Details

Name:	us-gaap_ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration