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Junior Subordinated Debt/Trust Preferred Securities | 9 Months Ended
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Sep. 30, 2021
Debt Disclosure [Abstract] |
Junior Subordinated Debt/Trust Preferred Securities | Junior Subordinated Debt/Trust Preferred Securities The contractual principal balance of the Company's debentures relating to its trust preferred securities is $12.0 million as of September 30, 2021. The Company may redeem the junior subordinated debentures at any time at par. The Company accounts for its junior subordinated debt issued under USB Capital Trust II at fair value. The Company believes the election of fair value accounting for the junior subordinated debentures better reflects the true economic value of the debt instrument on the balance sheet. As of September 30, 2021, the rate paid on the junior subordinated debt issued under USB Capital Trust II is 3-month LIBOR plus 129 basis points, and is adjusted quarterly. At September 30, 2021, the Company performed a fair value measurement analysis on its junior subordinated debt using a cash flow model approach to determine the present value of those cash flows. The cash flow model utilizes the forward 3-month LIBOR curve to estimate future quarterly interest payments due over the life of the debt instrument. These cash flows were discounted at a rate which incorporates a current market rate for similar-term debt instruments, adjusted for additional credit and liquidity risks associated with the junior subordinated debt. The 3.84% discount rate used represents what a market participant would consider under the circumstances based on current market assumptions. At September 30, 2021, the total cumulative gain recorded on the debt is $1,213,000. The net fair value calculation performed as of September 30, 2021 resulted in a net pretax loss adjustment of $373,000 for the nine months ended September 30, 2021 compared to a net pretax gain adjustment of $672,000 for the nine months ended September 30, 2020. For the nine months ended September 30, 2021, the net $373,000 fair value loss adjustment was separately presented as a $691,000 loss ($487,000, net of tax) recognized on the consolidated statements of income, and a $317,000 gain ($223,000, net of tax) associated with the instrument-specific credit risk recognized in other comprehensive income. For the nine months ended September 30, 2020, the net $672,000 fair value gain adjustment was separately presented as a $1,451,000 gain ($1,022,000, net of tax) recognized on the consolidated statements of income, and a $779,000 loss ($549,000, net of tax) associated with the instrument-specific credit risk recognized in other comprehensive income. The Company calculated the change in the discounted cash flows based on updated market credit spreads for the periods ended. The net fair value calculation performed as of September 30, 2021 resulted in a net pretax loss adjustment of $43,000 for the quarter ended September 30, 2021 compared to a net pretax loss adjustment of $344,000 for the quarter ended September 30, 2020. For the quarter ended September 30, 2021, the net $43,000 fair value loss adjustment was separately presented as a $35,000 loss ($25,000, net of tax) recognized on the consolidated statements of income, and a $8,000 loss ($6,000, net of tax) associated with the instrument-specific credit risk recognized in other comprehensive income. For the quarter ended September 30, 2020, the net $344,000 fair value loss adjustment was separately presented as a $18,000 loss ($13,000, net of tax) recognized on the consolidated statements of income, and a $326,000 loss ($230,000, net of tax) associated with the instrument-specific credit risk recognized in other comprehensive income. The Company calculated the change in the discounted cash flows based on updated market credit spreads for the periods ended.

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- Definition The entire disclosure for borrowings under subordinated debt agreements that qualify as available in computing net capital under SEC's uniform net capital rule, including restrictive covenants, collateral, interest rates and due dates, amounts due by date and amount owed in total. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 470 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6479118&loc=d3e64650-112822 + Details
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