XML 46 R35.htm IDEA: XBRL DOCUMENT

Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2020

Schedule of Company's financial instruments measured at fair value on a recurring basis

The following fair value hierarchy table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis at the dates indicated:


	June 30, 2020
	Fair Value Measurement Using
	Level 1		Level 2		Level 3		Total Fair Value
	(Dollars in thousands)
Financial assets
Investment securities available-for-sale:
U.S. Treasury	$	—	$	32,870	$	—	$	32,870
Agency	—		339,990		—		339,990
Corporate	—		273,999		—		273,999
Municipal bonds	—		461,335		—		461,335
Collateralized mortgage obligations	—		384,739		—		384,739
Mortgage-backed securities	—		843,133		—		843,133
Total securities available-for-sale	$	—	$	2,336,066	$	—	$	2,336,066

Derivative assets:
Interest rate swaps	$	—	$	15,707	$	—	$	15,707
Equity warrants	—		—		1,952		1,952
Total derivative assets	$	—	$	15,707	$	1,952	$	17,659

Financial liabilities
Derivative liabilities	$	—	$	16,017	$	—	$	16,017


	December 31, 2019
	Fair Value Measurement Using
	Level 1		Level 2		Level 3		Total Fair Value
	(Dollars in thousands)
Financial assets
Investment securities available-for-sale:
U.S. Treasury	$	—	$	63,555	$	—	$	63,555
Agency	—		246,358		—		246,358
Corporate	—		151,353		—		151,353
Municipal bonds	—		397,298		—		397,298
Collateralized mortgage obligations	—		9,984		—		9,984
Mortgage-backed securities	—		499,836		—		499,836
Total securities available-for-sale	$	—	$	1,368,384	$	—	$	1,368,384

Derivative assets	$	—	$	2,103	$	—	$	2,103

Financial liabilities
Derivative liabilities	$	—	$	2,103	$	—	$	2,103

Schedule of reconciliation of fair value of equity warrants

The following table is a reconciliation of the fair value of the equity warrants that are classified as Level 3 and measured on a recurring basis:


	June 30, 2020
	(Dollars in thousands)
Beginning Balance	$	5,162
Change in fair value ⁽¹⁾	(3)
Sales	(3,207)
Ending balance	$	1,952

______________________________

⁽¹⁾ The changes in fair value are included in other income on the consolidated statement of income.

Schedule of quantitative information for level 3 fair value measurements

The following table presents quantitative information about level 3 of fair value measurements for assets measured at fair value on a recurring basis at June 30, 2020.

June 30, 2020

Range

Fair Value

Valuation Technique(s)

Unobservable Input(s)

Min

Max

Weighted Average

(Dollars in thousands)

Equity warrants

1,952

Black-Scholes
option pricing
model

Volatility
Risk free interest rate
Marketability discount

30.00% 0.16% 6.00%

41.25%

0.28%

33.00%

31.33%

20.00%

13.67%

The following table presents quantitative information about level 3 of fair value measurements for assets measured at fair value on a nonrecurring basis at June 30, 2020 and December 31, 2019.


	June 30, 2020
					Range
	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Min		Max	Weighted Average
	(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied	$	322	Fair value of collateral	Collateral discount and cost to sell	10.00%		10.00%	10.00%


SBA secured by real estate ⁽¹⁾	593		Fair value of collateral	Collateral discount and cost to sell	10.00%		10.00%	10.00%

Business loans secured by real estate


SBA secured by real estate ⁽²⁾	247		Fair value of collateral	Collateral discount and cost to sell	10.00%		10.00%	10.00%

Commercial loans
Commercial and industrial	312		Fair value of collateral	Collateral discount and cost to sell	5.00%	5.00%	5.00%	5.00%
Franchise non-real estate secured	2,428		Fair value of collateral	Collateral discount and cost to sell	—%		10.00%	10.00%
SBA non-real estate secured	2		Fair value of collateral	Collateral discount and cost to sell	7.00%		7.00%	7.00%





Total individually evaluated loans	3,904
Other real estate owned	260		Fair value of property	Cost to sell	10.00%		10.00%	10.00%
Total assets	$	4,164


	December 31, 2019
					Range
	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Min	Max	Weighted Average
	(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied	$	569	Fair value of collateral	Collateral discount and cost to sell	10.00%	10.00%	10.00%


SBA secured by real estate ⁽¹⁾	408		Fair value of collateral	Collateral discount and cost to sell	10.00%	10.00%	10.00%

Business loans secured by real estate


SBA secured by real estate ⁽²⁾	140		Fair value of collateral	Collateral discount and cost to sell	7.00%	10.00%	7.81%

Commercial loans


SBA non-real estate secured	1,140		Fair value of collateral	Collateral discount and cost to sell	7.00%	63.00%	15.33%





Total individually evaluated loans	$	2,257

______________________________

⁽¹⁾ SBA loans that are collateralized by hotel/motel real property.

⁽²⁾ SBA loans that are collateralized by real property other than hotel/motel real property.

Schedule of Company's financial instruments measured at fair value on a nonrecuring basis

The following table presents our assets measured at fair value on a nonrecurring basis at June 30, 2020 and December 31, 2019.


	June 30, 2020
	Level 1		Level 2		Level 3		Total Fair Value
	(Dollars in thousands)
Financial assets
Collateral dependent loans	$	—	$	—	$	3,904	$	3,904
Other real estate owned	—		—		260		260
Total assets	$	—	$	—	$	4,164	$	4,164


	December 31, 2019
	Level 1		Level 2		Level 3		Total Fair Value
	(Dollars in thousands)
Financial assets
Impaired loans	$	—	$	—	$	2,257	$	2,257

Schedule of carrying amount and estimated fair value of financial instruments

The fair value estimates presented herein are based on pertinent information available to management as of the dates indicated, representing an exit price.


	At June 30, 2020
	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value
	(Dollars in thousands)
Assets
Cash and cash equivalents	$	1,341,730	$	1,341,730	$	—	$	—	$	1,341,730
Interest-bearing time deposits with financial institutions	2,845		2,845		—		—		2,845
Investments held-to-maturity	32,557		—		34,179		—		34,179
Investment securities available-for-sale	2,336,066		—		2,336,066		—		2,336,066
Loans held for sale	1,007		—		1,081		—		1,081
Loans held for investment, net	15,082,884		—		—		15,308,998		15,308,998

Derivative assets	17,659		—		15,707		1,952		17,659
Accrued interest receivable	78,408		78,408		—		—		78,408

Liabilities
Deposit accounts	$	16,976,693	$	15,057,613	$	1,926,624	$	—	$	16,984,237
FHLB advances	41,006		—		41,700		—		41,700

Subordinated debentures	501,375		—		565,772		—		565,772
Derivative liabilities	16,017		—		16,017		—		16,017
Accrued interest payable	6,991		6,991		—		—		6,991


	At December 31, 2019
	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value
	(Dollars in thousands)
Assets
Cash and cash equivalents	$	326,850	$	326,850	$	—	$	—	$	326,850
Interest-bearing time deposits with financial institutions	2,708		2,708		—		—		2,708
Investments held-to-maturity	37,838		—		38,760		—		38,760
Investment securities available-for-sale	1,368,384		—		1,368,384		—		1,368,384
Loans held for sale	1,672		—		1,821		—		1,821
Loans held for investment, net	8,722,311		—		—		8,691,019		8,691,019
Derivative assets	2,103		—		2,103		—		2,103
Accrued interest receivable	39,442		39,442		—		—		39,442

Liabilities
Deposit accounts	$	8,898,509	$	7,850,667	$	1,048,583	$	—	$	8,899,250
FHLB advances	517,026		—		517,291		—		517,291
Other borrowings	—		—		—		—		—
Subordinated debentures	215,145		—		237,001		—		237,001
Derivative liabilities	2,103		—		2,103		—		2,103
Accrued interest payable	2,686		2,686		—		—		2,686