XML 40 R28.htm IDEA: XBRL DOCUMENT
v3.21.1

Fair Value Measurements and Fair Value of Financial Instruments (Tables) | 3 Months Ended
--- | ---
Mar. 31, 2021
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 March 31, 2021 and December 31, 2020 are as follows:
|  |  |  |  | March 31, 2021
|  |  |  |  | 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 |  | $ | 41,301 |  | $ | - |  | $ | 41,301 |  | $ | -
Residential mortgage pass-through securities |  |  | 240,354 |  |  | - |  |  | 240,354 |  |  | -
Commercial mortgage pass-through securities |  |  | 6,414 |  |  | - |  |  | 6,414 |  |  | -
Obligations of U.S. states and political subdivision |  |  | 130,503 |  |  | - |  |  | 121,729 |  |  | 8,774
Corporate bonds and notes |  |  | 17,665 |  |  | - |  |  | 17,665 |  |  | -
Asset-backed securities |  |  | 3,359 |  |  | - |  |  | 3,359 |  |  | -
Certificates of deposit |  |  | 150 |  |  | - |  |  | 150 |  |  | -
Other securities |  |  | 2,277 |  |  | 2,277 |  |  | - |  |  | -
Total available-for-sale |  |  | 442,023 |  |  | 2,277 |  |  | 430,972 |  |  | 8,774
Equity securities |  |  | 13,200 |  |  | 13,200 |  |  | - |  |  | -
Total assets |  | $ | 455,223 |  | $ | 15,477 |  | $ | 430,972 |  | $ | 8,774
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Derivatives |  | $ | (1,464 | ) | $ | - |  | $ | (1,464 | ) | $ | -
Total liabilities |  | $ | (1,464 | ) | $ | - |  | $ | (1,464 | ) | $ | -
28 Table of Contents
CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 6. Fair Value Measurements and Fair Value of Financial Instruments – (continued)
|  |  |  |  | December 31, 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 |  | $ | 38,458 |  | $ | - |  | $ | 38,458 |  | $ | -
Residential mortgage pass-through securities |  |  | 270,884 |  |  | - |  |  | 270,884 |  |  | -
Commercial mortgage pass-through securities |  |  | 6,922 |  |  | - |  |  | 6,922 |  |  | -
Obligations of U.S. states and political subdivision |  |  | 142,808 |  |  | - |  |  | 133,964 |  |  | 8,844
Corporate bonds and notes |  |  | 25,095 |  |  | - |  |  | 25,095 |  |  | -
Asset-backed securities |  |  | 3,480 |  |  | - |  |  | 3,480 |  |  | -
Certificates of deposit |  |  | 151 |  |  | - |  |  | 151 |  |  | -
Other securities |  |  | 157 |  |  | 157 |  |  | - |  |  | -
Total available-for-sale |  | $ | 487,955 |  | $ | 157 |  | $ | 478,954 |  | $ | 8,844
Equity securities |  |  | 13,387 |  |  | 13,387 |  |  | - |  |  | -
Total assets |  | $ | 501,342 |  | $ | 13,544 |  | $ | 478,954 |  | $ | 8,844
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Derivatives |  | $ | (2,119) |  | $ | - |  | $ | (2,119) |  | $ | -
Total liabilities |  | $ | (2,119) |  | $ | - |  | $ | (2,119) |  | $ | -
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 March 31, 2021 and December 31, 2020 are as follows:
|  |  |  |  | Fair Value Measurements at Reporting Date Using
|  |  |  |  | Quoted |  |  |  |  |  |
|  |  |  |  | Prices |  |  |  |  |  |
|  |  |  |  | in Active |  | Significant |  |  |
|  | Carrying |  | Markets for |  | Other |  | Significant
|  | Value as of |  | Identical |  | Observable |  | Unobservable
Assets measured at fair value on a nonrecurring |  | March 31, |  | Assets |  | Inputs |  | Inputs
basis: |  | 2021 |  | (Level 1) |  | (Level 2) |  | (Level 3)
Collateral dependent loans: |  |  |  |  | (dollars in thousands)
Commercial |  | $ | 12,890 |  | $ | - |  | $ | - |  | $ | 12,890
Commercial real estate |  |  | 2,283 |  |  | - |  |  | - |  |  | 2,283
Commercial construction |  |  | 2,500 |  |  | - |  |  | - |  |  | 2,500
Residential real estate |  |  | 2,089 |  |  | - |  |  | - |  |  | 2,089
|  |  |  |  | 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: |  | 2020 |  | (Level 1) |  | (Level 2) |  | (Level 3)
Impaired loans: |  |  |  |  | (dollars in thousands)
Commercial |  | $ | 10,751 |  | $ | - |  | $ | - |  | $ | 10,751
Commercial real estate |  |  | 1,393 |  |  | - |  |  | - |  |  | 1,393
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 three months ended March 31, 2021 and for the year ended December 31, 2020:
|  | Municipal |
|  | Securities |
|  | (dollars in thousands) |
Beginning balance, December 31, 2020 |  | $ | 8,844 |  |
Principal paydowns |  |  | (70 | ) |
Ending balance, March 31, 2021 |  | $ | 8,774 |  |
|  | Municipal |
|  | Securities |
|  | (dollars in thousands) |
Beginning balance, December 31, 2019 |  | $ | 9,114 |  |
Principal paydowns |  |  | (270) |  |
Ending balance, December 31, 2020 |  | $ | 8,844 |  |
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 March 31, 2021 and December 31, 2020. The table below provides quantitative information about significant unobservable inputs used in fair value measurements within Level 3 hierarchy.
March 31, 2021 |  |  |  |  |  |  |  |  |  |
|  |  |  |  | Valuation |  | Unobservable |  |  |
|  | Fair Value |  | Techniques |  | Input |  | Rate
Securities available-for-sale: |  | (dollars in thousands)
Municipal securities |  | $ | 8,774 |  | Discounted cash flows |  | Discount rate |  | 2.9 | %
December 31, 2020 |  |  |  |  |  |  |  |  |  |
|  |  |  |  | Valuation |  | Unobservable |  |  |
|  | Fair Value |  | Techniques |  | Input |  | Rate
Securities available-for-sale: |  | (dollars in thousands)
Municipal securities |  | $ | 8,844 |  | 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. March 31, 2021
|  |  |  |  | Valuation |  | Unobservable |  |
(dollars in thousands) |  | Fair Value |  | Techniques |  | Input |  | Range (weighted average)
Collateral dependent: |  |  |  |  |  |  |  |  |
Commercial |  | $ | 722 |  | Appraisals of collateral value |  | Comparable sales |  | 0% - 5% (2%)
Commercial |  | $ | 12,168 |  | Market approach (100) |  | Average transfer price as a price to unpaid principal balance |  | 48 – 53 (49)
Commercial real estate |  | $ | 2,283 |  | Appraisals of collateral value |  | Comparable sales |  | 0% - 25% (8%)
Construction |  | $ | 2,500 |  | Appraisals of collateral value |  | Comparable sales |  | 15%
Residential |  | $ | 2,089 |  | Appraisals of collateral value |  | Comparable sales |  | 1% - 15% (6%)
December 31, 2020
|  |  |  |  | Valuation |  | Unobservable |  |
(dollars in thousands) |  | Fair Value |  | Techniques |  | Input |  | Range (weighted average)
Impaired loans: |  |  |  |  |  |  |  |  |
Commercial |  | $ | 10,524 |  | Market approach (100%) |  | Average transfer price as a price to unpaid principal balance |  | 48 - 53 (49)
Commercial |  | $ | 227 |  | Appraisals of collateral value |  | Adjustment for comparable sales |  | 1% to + 5% (+2%)
Commercial real estate |  | $ | 1,393 |  | Appraisals of collateral value |  | Adjustment for comparable sales |  | -25% to +20% (-8%)
Fair Value, by Balance Sheet Grouping [Table Text Block] | As of March 31, 2021 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 March 31, 2021 and December 31, 2020:
|  |  |  |  |  |  |  | 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)
March 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks |  | $ | 260,092 |  | $ | 260,092 |  | $ | 260,092 |  | $ | - |  | $ | -
Securities available-for-sale |  |  | 442,023 |  |  | 442,023 |  |  | 2,277 |  |  | 442,023 |  |  | 8,774
Investment in restricted stocks |  |  | 22,483 |  |  | n/a |  |  | n/a |  |  | n/a |  |  | n/a
Equity securities |  |  | 13,200 |  |  | 13,200 |  |  | 13,200 |  |  | - |  |  | -
Net loans |  |  | 6,196,623 |  |  | 6,267,519 |  |  | - |  |  | - |  |  | 6,267,519
Accrued interest receivable |  |  | 35,249 |  |  | 35,249 |  |  | - |  |  | 1,598 |  |  | 33,651
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noninterest-bearing deposits |  |  | 1,384,961 |  |  | 1,384,961 |  |  | 1,384,961 |  |  | - |  |  | -
Interest-bearing deposits |  |  | 4,566,373 |  |  | 4,573,673 |  |  | 3,209,774 |  |  | 1,363,899 |  |  | -
Borrowings |  |  | 359,710 |  |  | 362,497 |  |  | - |  |  | 362,497 |  |  | -
Subordinated debentures |  |  | 152,724 |  |  | 163,868 |  |  | - |  |  | 163,868 |  |  | -
Derivatives |  |  | 1,464 |  |  | 1,464 |  |  | - |  |  | 1,464 |  |  | -
Accrued interest payable |  |  | 3,598 |  |  | 3,598 |  |  | - |  |  | 3,598 |  |  | -
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks |  | $ | 303,756 |  | $ | 303,756 |  | $ | 303,756 |  | $ | - |  | $ | -
Investment securities available-for-sale |  |  | 487,955 |  |  | 487,955 |  |  | 157 |  |  | 478,954 |  |  | 8,844
Restricted investment in bank stocks |  |  | 25,099 |  |  | n/a |  |  | n/a |  |  | n/a |  |  | n/a
Equity securities |  |  | 13,387 |  |  | 13,387 |  |  | 13,387 |  |  | - |  |  | -
Net loans |  |  | 6,157,081 |  |  | 6,244,037 |  |  | - |  |  | - |  |  | 6,244,037
Accrued interest receivable |  |  | 35,317 |  |  | 35,317 |  |  | - |  |  | 1,764 |  |  | 33,553
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noninterest-bearing deposits |  |  | 1,339,108 |  |  | 1,339,108 |  |  | 1,339,108 |  |  | - |  |  | -
Interest-bearing deposits |  |  | 4,620,116 |  |  | 4,633,961 |  |  | 3,155,983 |  |  | 1,477,978 |  |  | -
Borrowings |  |  | 425,954 |  |  | 429,671 |  |  | - |  |  | 429,671 |  |  | -
Subordinated debentures |  |  | 202,648 |  |  | 214,113 |  |  | - |  |  | 214,113 |  |  | -
Derivatives |  |  | 2,119 |  |  | 2,119 |  |  | - |  |  | 2,119 |  |  | -
Accrued interest payable |  |  | 3,687 |  |  | 3,687 |  |  | - |  |  | 3,687 |  |  | -

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=123874694&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisValuationTechniquesTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types: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=123874694&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=123874694&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=123874694&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueAssetsMeasuredOnNonrecurringBasisTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types: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=123874694&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueAssetsMeasuredOnNonrecurringBasisValuationTechniquesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types: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=123874694&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=123874694&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueAssetsMeasuredOnRecurringBasisTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types: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=123594938&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=123874694&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueByBalanceSheetGroupingTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types: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=123874694&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=123874694&loc=d3e19207-110258 + Details
Name: | us-gaap_ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration