Securities (Tables)
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9 Months Ended |
Sep. 30, 2023 |
Investments, Debt and Equity Securities [Abstract] |
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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 securities | | 1,221,556 | | | 66 | | | 154,811 | | | 1,066,811 | | Municipal bonds | | 3,207 | | | — | | | 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 securities | | 1,116,387 | | | 270 | | | 121,083 | | | 995,574 | | Municipal bonds | | 3,223 | | | — | | | 246 | | | 2,977 | | Other debt securities | | 500 | | | — | | | — | | | 500 | | Total | | $ | 1,136,190 | | | $ | 270 | | | $ | 121,741 | | | $ | 1,014,719 | |
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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 Months | | 12 Months or More | | Total | 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 securities | | 218,425 | | | 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 Months | | 12 Months or More | | Total | 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 securities | | 513,639 | | | 29,060 | | | 456,972 | | | 92,023 | | | 970,611 | | | 121,083 | | Municipal bonds | | 2,884 | | | 241 | | | 93 | | | 5 | | | 2,977 | | | 246 | | Total | | $ | 532,191 | | | $ | 29,713 | | | $ | 457,065 | | | $ | 92,028 | | | $ | 989,256 | | | $ | 121,741 | |
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Summary of Investment Securities by Maturity |
The following is a summary of investment securities by maturity: | | | | | | | | | | | | | September 30, 2023 | | Available-for-Sale | | Amortized Cost | | Fair Value | US government agencies | | | | Within one year | $ | 8,000 | | | $ | 7,954 | | One to five years | 20,424 | | | 19,969 | | Five to ten years | 2,375 | | | 2,261 | | Total | 30,799 | | | 30,184 | | Mortgage-backed securities | | | | Within one year | 12,519 | | | 12,452 | | One to five years | 169,796 | | | 158,003 | | Five to ten years | 249,343 | | | 212,178 | | After 10 years | 789,898 | | | 684,178 | | Total | 1,221,556 | | | 1,066,811 | | Municipal bonds | | | | Five to ten years | 3,109 | | | 2,799 | | After 10 years | 98 | | | 84 | | Total | 3,207 | | | 2,883 | | | | | | | | | | | | | | | | | | | | | | Total | $ | 1,255,562 | | | $ | 1,099,878 | |
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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, 2023 | | December 31, 2022 | | Amount | | Ownership % | | Amount | | Ownership % | 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 | | | Various | | 12,476 | | | 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. |
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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 Adjustments | | September 30, 2023 | | September 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. |
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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, 2023 | Investment Carrying Amount | | Maximum Exposure to Loss | | Liability Recognized | | Classification | Solar tax credit investments | $ | 3,713 | | | $ | 18,837 | | | $ | — | | | Other assets (1) | Affordable housing | 15,888 | | | 15,888 | | | 7,721 | | | Other assets & other liabilities (2) | Canapi Funds | 35,599 | | | 35,599 | | | 19,755 | | | Other assets & other liabilities | Non-marketable and other equity investments | 9,007 | | | 9,007 | | | 2,616 | | | Other assets & other liabilities |
| | | | | | | | | | | | | | | | | | | | | | | | December 31, 2022 | Investment Carrying Amount | | Maximum Exposure to Loss | | Liability Recognized | | Classification | Solar tax credit investments | $ | 5,221 | | | $ | 24,295 | | | $ | 2,641 | | | Other assets & other liabilities (3) | Affordable housing | 7,255 | | | 7,255 | | | — | | | Other assets | Canapi Funds | 37,021 | | | 37,021 | | | 20,474 | | | Other assets & other liabilities | Non-marketable and other equity investments | 8,509 | | | 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. |
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