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FAIR VALUE
12 Months Ended
Dec. 31, 2015
Fair Value Disclosures [Abstract]  
FAIR VALUE
FAIR VALUE

Fair Value Measurements on a Recurring Basis

In accordance with ASC Topic 805, Business Combinations, liabilities for contingent consideration are reflected at fair value and adjusted each reporting period with the change in fair value recognized in earnings. Liabilities for acquisition related contingent consideration were recorded in connection with the acquisitions of Equator in 2013 and Mortgage Builder and Owners in 2014. The fair value of the liabilities for acquisition related contingent consideration were $3.9 million and $11.6 million as of December 31, 2015 and 2014, respectively. We measure the liabilities for acquisition related contingent consideration using Level 3 inputs as they are determined based on the present value of future estimated payments, which include sensitivities pertaining to discount rates and financial projections. There were no transfers between different levels during the periods presented.

During 2015, we reached an agreement with the former owners of Equator to extinguish any liability for the Equator Earn Out in exchange for $0.5 million. In connection with this settlement, we reduced the liability for the Equator Earn Out to $0 and recognized a $7.6 million increase in earnings. In 2014, the Company recorded a change in the fair value of the Equator Earn Out of $37.9 million (see Note 5). These transactions are reflected as a reduction in selling, general and administrative expenses in the consolidated statements of operations (see Note 19).

Fair Value Measurements on a Nonrecurring Basis

The Company recorded goodwill impairment losses of $55.7 million and $37.5 million for the years ended December 31, 2015 and 2014, respectively, based on fair value measurements. In addition, the Company recorded an intangible asset impairment losses of $11.9 million and a premises and equipment impairment loss of $4.1 million for the year ended December 31, 2015, based on fair value measurements. These fair value measurements were based on inputs classified as Level 3 in the valuation hierarchy (see Notes 9 and 10).

Fair Value of Financial Instruments

The following table presents the carrying amount and estimated fair value of financial instruments held by the Company at December 31, 2015 and 2014 that are not carried at fair value. The fair values are estimated using market information and what the Company believes to be appropriate valuation methodologies under GAAP:

 
 
December 31, 2015
 
December 31, 2014
(in thousands)
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
 
 
 
 
Level 1
 
Level 2
 
Level 3
 
 
 
Level 1
 
Level 2
 
Level 3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
179,327

 
$
179,327

 
$

 
$

 
$
161,361

 
$
161,361

 
$

 
$

Restricted cash
 
4,801

 
4,801

 

 

 
3,022

 
3,022

 

 

Long-term debt
 
536,598

 

 
469,523

 

 
591,543

 

 
467,319

 



Our financial assets and financial liabilities primarily include cash and cash equivalents, restricted cash and long-term debt. Cash and cash equivalents and restricted cash are carried at amounts that approximate their fair value due to the short-term nature of these instruments and were measured using Level 1 inputs. The fair value of our long-term debt is based on quoted market prices. Based on the frequency of trading, we do not believe that there is an active market for our debt. Therefore, the quoted prices are considered Level 2 inputs.