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Securities (Tables)
9 Months Ended
Sep. 30, 2023
Investments, Debt and Equity Securities [Abstract]  
Summary of Carrying Amount and Fair Value of Securities
The carrying amount of securities and their approximate fair values are reflected in the following table:
September 30, 2023
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
US government agencies$30,799 $— $615 $30,184 
Mortgage-backed securities1,221,556 66 154,811 1,066,811 
Municipal bonds3,207 — 324 2,883 
Total$1,255,562 $66 $155,750 $1,099,878 
December 31, 2022
US government agencies$16,080 $— $412 $15,668 
Mortgage-backed securities1,116,387 270 121,083 995,574 
Municipal bonds3,223 — 246 2,977 
Other debt securities500 — — 500 
Total$1,136,190 $270 $121,741 $1,014,719 
Debt Securities Available-for-Sale in Unrealized Loss Position
The following tables show debt securities available-for-sale in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.
Less Than 12 Months12 Months or MoreTotal
September 30, 2023
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
US government agencies$17,666 $176 $12,518 $439 $30,184 $615 
Mortgage-backed securities218,425 10,744 842,233 144,067 1,060,658 154,811 
Municipal bonds— — 2,883 324 2,883 324 
Total$236,091 $10,920 $857,634 $144,830 $1,093,725 $155,750 
Less Than 12 Months12 Months or MoreTotal
December 31, 2022
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
US government agencies$15,668 $412 $— $— $15,668 $412 
Mortgage-backed securities513,639 29,060 456,972 92,023 970,611 121,083 
Municipal bonds2,884 241 93 2,977 246 
Total$532,191 $29,713 $457,065 $92,028 $989,256 $121,741 
Summary of Investment Securities by Maturity
The following is a summary of investment securities by maturity:
September 30, 2023
Available-for-Sale
Amortized CostFair Value
US government agencies
Within one year$8,000 $7,954 
One to five years20,424 19,969 
Five to ten years2,375 2,261 
Total30,799 30,184 
Mortgage-backed securities
Within one year12,519 12,452 
One to five years169,796 158,003 
Five to ten years249,343 212,178 
After 10 years789,898 684,178 
Total1,221,556 1,066,811 
Municipal bonds
Five to ten years3,109 2,799 
After 10 years98 84 
Total3,207 2,883 
Total$1,255,562 $1,099,878 
Summary of Equity Method Investments
The carrying amount and ownership percentage of each equity investment over which the Company has significant influence at September 30, 2023 and December 31, 2022 is reflected in the following table:
September 30, 2023December 31, 2022
AmountOwnership % AmountOwnership %
Apiture, Inc.$56,559 40.3 %$60,320 40.3 %
Canapi Ventures SBIC Fund, LP (1) (5)
18,214 2.9 19,246 2.9 
Canapi Ventures Fund, LP (2) (5)
2,272 1.5 2,382 1.5 
Canapi Ventures Fund II, LP (3) (5)
7,297 1.6 7,412 1.6 
Canapi Ventures SBIC Fund II, LP (4) (5)
7,816 2.9 7,981 3.7 
Other Fintech investments in private companies (6)
— — 241 4.3 
Other (7)
20,217 Various12,476 Various
Total$112,375 $110,058 
(1)
Includes unfunded commitments of $5.1 million and $5.5 million as of September 30, 2023 and December 31, 2022, respectively.
(2)
Includes unfunded commitments of $613 thousand and $617 thousand as of September 30, 2023 and December 31, 2022, respectively.
(3)
Includes unfunded commitments of $6.7 million as of September 30, 2023 and December 31, 2022.
(4)
Includes unfunded commitments of $7.4 million and $7.5 million as of September 30, 2023 and December 31, 2022, respectively.
(5)Investee is accounted for under equity method due to the Company's participation as an investment advisor.
(6)
As of December 31, 2022, Other Fintech investments include Kwipped, Inc. As of September 30, 2023, the investment has been moved to equity security as the preferred shares do not qualify as in-substance common stock.
(7)
As of September 30, 2023, Other investments include low income housing tax credit (“LIHTC”) in Estrella Landing Apartments LLC (“Estrella Landing”), in which the company holds a 99.9% limited member interest. Also included in Other investments are solar income tax credit investments in Green Sun Tenant LLC (“Green Sun”), SVA 2021-2 TE Holdco LLC (“Sun Vest”) and EG5 CSP1 Holding LLC (“HEP”), which the Company holds a 99.0% limited member interest in all investments. Also included are Cape Fear Collective Impact Opportunity 1 LLC (“Cape Fear Collective”), Cape Fear Collective Impact Opportunity 2 LLC (“Cape Fear Collective 2”) and OTR Fund I, LLC ("OTR") which the Company holds 99.0%, 32.3%, and 11.5% of limited member interests, respectively. As of September 30, 2023, there was an unfunded commitment of $7.7 million for Estrella Landing. The Company also has an unrecorded commitment related to a solar income tax credit investment for $18.2 million. As of December 31, 2022, Other investments include Green Sun, Sun Vest, and HEP, which the Company holds a 99.0% limited member interest in all investments. Also included within Other investments are Cape Fear Collective and Cape Fear Collective 2, which the Company holds 99.0% and 32.3% of limited member interests, respectively. As of December 31, 2022 an unfunded commitment of $2.6 million was recorded as a liability for HEP, and as of September 30, 2023, this commitment has been funded. Managing control of the above investments resides with the managing members.
Summary of Carrying Amount of Company Investments in Non Marketable Equity Securities with No Readily Determinable Fair Value and Amounts Recognized in Earnings
The carrying amount of the Company’s investments in non-marketable equity securities with no readily determinable fair value and amounts recognized in earnings on a cumulative basis as of September 30, 2023 and as of and for the nine months ended September 30, 2023 and 2022 is reflected in the following table:
As of and for the nine month period ended
Cumulative AdjustmentsSeptember 30, 2023September 30, 2022
Carrying value (1)
$78,508 $76,438 
Carrying value adjustments:
Impairment$— — — 
Upward changes for observable prices (2)
50,492 — 2,022 
Downward changes for observable prices(1,085)(999)— 
Net upward change$49,407 $(999)$2,022 
(1)
Includes $2.6 million and $3.1 million in unfunded commitments as of September 30, 2023, and September 30, 2022, respectively.
(2)
Cumulative adjustments excludes $13.9 million in realized gains for sale of an investment in the second quarter of 2021.
Schedule of Variable Interest Entities
The following table provides a summary of the VIEs that the Company has not consolidated as of September 30, 2023 and December 31, 2022:
September 30, 2023Investment Carrying AmountMaximum Exposure to LossLiability RecognizedClassification
Solar tax credit investments$3,713 $18,837 $— 
Other assets (1)
Affordable housing15,888 15,888 7,721 
Other assets & other liabilities (2)
Canapi Funds35,599 35,599 19,755 Other assets & other liabilities
Non-marketable and other equity investments9,007 9,007 2,616 Other assets & other liabilities
December 31, 2022Investment Carrying AmountMaximum Exposure to LossLiability RecognizedClassification
Solar tax credit investments$5,221 $24,295 $2,641 
Other assets & other liabilities (3)
Affordable housing7,255 7,255 — Other assets
Canapi Funds37,021 37,021 20,474 Other assets & other liabilities
Non-marketable and other equity investments8,509 8,509 3,033 Other assets & other liabilities
(1)
Maximum exposure to loss represents $3.7 million of current investments and a scenario in which related tax credits are recaptured, collectively totaling $15.1 million.
(2)
Maximum exposure to loss represents $15.9 million of investments. As there are no tax credits allocated in the current year, there is no increase to the maximum exposure to loss related to recaptured tax credits on the $8.8 million LIHTC investment.
(3)
Maximum exposure to loss represents $5.2 million of current investments and a scenario in which related tax credits are recaptured, collectively totaling $19.1 million.