XML 47 R37.htm IDEA: XBRL DOCUMENT v3.23.1
FAIR VALUE (Tables)
3 Months Ended
Mar. 31, 2023
Fair Value Disclosures [Abstract]  
Schedule of fair value assets and liabilities measured on recurring basis
The following presents assets and liabilities measured on a recurring basis as of the dates noted (dollars in thousands):
March 31, 2023Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Reported
Balance
Financial Assets
Mortgage loans held for sale$— $9,873 $— $9,873 
Loans held at fair value$— $— $20,807 $20,807 
Equity securities$637 $122 $— $759 
Guarantee asset$— $— $235 $235 
IRLC, net$— $— $723 $723 
Equity warrants$— $— $825 $825 
Swap derivative asset$— $204 $— $204 
Financial Liabilities
Forward commitments and FSC$— $(138)$— $(138)
Swap derivative liabilities$— $(508)$— $(508)
December 31, 2022Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Reported
Balance
Financial Assets
Mortgage loans held for sale$— $8,839 $— $8,839 
Loans held for sale$1,965 $— $— $1,965 
Loans held at fair value$— $— $23,321 $23,321 
Forward commitments and FSC$— $46 $— $46 
Equity securities$627 $122 $— $749 
Guarantee asset$— $— $143 $143 
IRLC, net$— $— $229 $229 
Equity warrants$— $— $825 $825 
Summary of assets and liability for level 3 instruments measured at fair value on recurring basis
The following presents a reconciliation for Level 3 instruments measured at fair value on a recurring basis as of the dates noted (dollars in thousands):
Three Months Ended March 31, 2023
Corporate Bonds(1)
Loans Held at Fair
Value
FSCGuarantee AssetIRLCEquity Warrants
Beginning balance$— $23,321 $— $143 $229 $825 
Acquisitions— 1,162 — — 886 — 
Originations— — — (1,486)— 
Gains/(losses) in net income, net— (150)— 87 1,094 — 
Settlements— (3,526)— — — — 
Ending balance$— $20,807 $— $235 $723 $825 
(1) All securities were transferred from available-for-sale to held-to-maturity effective April 1, 2022 and are no longer measured at fair value on a recurring basis.
Three Months Ended March 31, 2022Corporate Bonds Loans Held at Fair
Value
FSC Guarantee Asset IRLC Equity Warrants
Beginning balance$2,113 $— $(9)$237 $1,473 $160 
Acquisitions4,000 6,380 — 1,614 242 
Originations— — — — (1,354)— 
Losses in net income, net— — — (31)(743)— 
Unrealized gain/(losses), net102 — — — — — 
Ending balance$6,215 $6,380 $— $206 $990 $402 
Schedule of changes in fair value of loans
The following presents the changes in fair value of loans accounted for under the fair value option as of the dates noted (dollars in thousands):
Three Months Ended
March 31,
20232022
Mortgage loans held for sale$68 $667 
Loans held for sale(20)— 
Loans held for investment(150)— 
$(102)$667 
The following summarizes the activity pertaining to loans accounted for under the fair value option as of the dates noted (dollars in thousands):
Three Months Ended
March 31,
Mortgage loans held for sale20232022
Balance at beginning of period$8,839 $30,620 
Loans originated54,073 191,081 
Fair value changes68 667 
Sales(53,102)(188,666)
Settlements(5)(39)
Balance at end of period$9,873 $33,663 
Three Months Ended
March 31,
Loans held for sale20232022
Balance at beginning of period$1,965 $— 
Loans transferred from held for investment39,221 — 
Fair value changes(20)— 
Sales(40,761)— 
Settlements(405)— 
Balance at end of period$— $— 
Three Months Ended
March 31,
Loans held for investment20232022
Balance at beginning of period$23,321 $— 
Loans acquired1,162 6,380 
Fair value changes(150)— 
Net charge-offs(392)— 
Settlements(3,134)— 
Balance at end of period$20,807 $6,380 
Summary of assets measured at fair value on nonrecurring basis
The following presents assets measured on a nonrecurring basis as of the dates noted (dollars in thousands):
March 31, 2023Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Reported
Balance
Collateral dependent loans:
Commercial and Industrial$— $— $188 $188 
Summary of assets and liabilities measured at fair value on a recurring or nonrecurring, the significant unobservable inputs The following presents quantitative information about Level 3 assets measured on a recurring and nonrecurring basis as of the dates noted (dollars in thousands):
Quantitative Information about Level 3 Fair Value Measurements as of March 31, 2023
Fair ValueValuation
Technique
Significant
Unobservable Input
Range
(Weighted Average)
Recurring fair value
Loans held for investment at fair value$20,807 Discounted cash flowDiscount rate
4% to 9% (5%)
Guarantee asset235 Discounted cash flowDiscount rate
Prepayment rate
5% (5%)
3% (3%)
IRLC, net723 Best execution modelPull through
60% to 100% (89%)
Equity warrants825 Black-Scholes option pricing modelVolatility
Risk-free interest rate
Remaining life
32.7% to 44.7% (35.0%)
3.88% (3.88%)
0 to 3 years
Nonrecurring fair value
Collateral dependent loans:
Commercial and Industrial188 Sales comparison,
Market approach -
guideline transaction
method
Loss given default
35% to 61% (50%)
Quantitative Information about Level 3 Fair Value Measurements as of December 31, 2022
Fair ValueValuation
Technique
Significant
Unobservable Input
Range
(Weighted Average)
Recurring fair value
Loans held for investment at fair value$23,321 Discounted cash flowDiscount rate
4% to 18%
(8)%
Guarantee asset143 Discounted cash flowDiscount rate
Prepayment rate
5% (5%)
4% (4%)
IRLC, net229 Best execution modelPull through
73% to 100%
(91%)
Equity warrants825 Black-Scholes option pricing modelVolatility
Risk-free interest rate
Remaining life
32.7% to 44.7% (34.8%)
4.04% to 4.14% (4.05%)
0 to 4 years
Summary of carrying amounts and estimated fair values of financial instruments
The following presents carrying amounts and estimated fair values for financial instruments not carried at fair value as of the dates noted (dollars in thousands):
Carrying
Amount
Fair Value Measurements Using:
March 31, 2023Level 1Level 2Level 3
Assets:
Cash and cash equivalents$295,067 $295,067 $— $— 
Held-to-maturity securities, net of ACL79,565 238 65,747 7,585 
Loans2,448,231 — — 2,343,600 
Accrued interest receivable10,976 10,976 — — 
Liabilities:    
Deposits2,391,927 2,037,360 — 370,521 
Borrowings:    
FHLB borrowings – fixed rate256,780 — 256,788 — 
Federal Reserve borrowings – fixed rate4,605 — 4,605 — 
Subordinated notes – fixed-to-floating rate52,167 — — 56,437 
Accrued interest payable1,786 1,786 — — 
Carrying
Amount
Fair Value Measurements Using:
December 31, 2022Level 1Level 2Level 3
Assets:
Cash and cash equivalents$196,512 $196,512 $— $— 
Held-to-maturity securities81,056 234 67,433 7,051 
Loans2,446,092 — — 2,356,085 
Accrued interest receivable10,445 10,445 — — 
Liabilities:
Deposits2,405,229 2,181,139 — 228,868 
Borrowings:
FHLB borrowings – fixed rate141,498 — 141,867 — 
Federal Reserve borrowings – fixed rate5,388 — 5,388 — 
Subordinated notes – fixed-to-floating rate52,132 — — 60,384 
Accrued interest payable1,125 1,125 — — 
Schedule of loans measured at fair value under fair value option
March 31, 2023
Total LoansNon Accruals90 Days or More Past Due
Fair Value Carrying
Amount
Unpaid Principal
Balance
DifferenceFair Value Carrying
Amount
Unpaid Principal
Balance
DifferenceFair Value Carrying
Amount
Unpaid Principal
Balance
Difference
Mortgage loans held for sale$9,873 $9,715 $158 $— $— $— $— $— $— 
Loans held for investment20,807 21,052 (245)117 121 (4)117 121 (4)
$30,680 $30,767 $(87)$117 $121 $(4)$117 $121 $(4)
December 31, 2022
Total LoansNon Accruals90 Days or More Past Due
Fair Value Carrying
Amount
Unpaid Principal
Balance
DifferenceFair Value Carrying
Amount
Unpaid Principal
Balance
DifferenceFair Value Carrying
Amount
Unpaid Principal
Balance
Difference
Mortgage loans held for sale$8,839 $8,750 $89 $— $— $— $— $— $— 
Loans held for sale1,965 1,984 (19)— — — — — — 
Loans held for investment23,321 23,415 (94)139 140 (1)139 140 (1)
$34,125 $34,149 $(24)$139 $140 $(1)$139 $140 $(1)