Quarterly report pursuant to Section 13 or 15(d)

Fair Value Of Financial Instruments

v3.22.2
Fair Value Of Financial Instruments
6 Months Ended
Jun. 30, 2022
Fair Value Of Financial Instruments [Abstract]  
Fair Value Of Financial Instruments 8. Fair Value of Financial Instruments

ASC 820 Fair Value Measurement (Topic 820) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The inputs used to measure fair value are classified into the following hierarchy:

Level 1:

Unadjusted quoted prices in active markets for identical assets or liabilities

 

Level 2:

Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability

 

Level 3:

Unobservable inputs for the asset or liability

The carrying amounts of financial instruments included in the unaudited consolidated financial statements and their estimated fair values were as follows (in thousands):

As of June 30, 2022

As of December 31, 2021

Carrying
Amount

Estimated
Fair Value

Carrying
Amount

Estimated
Fair Value

Cash and cash equivalents

$

222,076

$

222,076

$

140,225

$

140,225

Restricted cash

42,245

42,245

42,854

42,854

Notes receivable, net

482,647

604,975

446,322

607,881

Note payable to BBX Capital, Inc.

50,000

45,805

50,000

50,340

Lines-of-credit, notes payable, and

receivable-backed notes payable

516,061

503,500

459,779

463,300

Junior subordinated debentures

135,455

80,000

134,940

133,500

Cash and cash equivalents. The amounts reported in the unaudited consolidated balance sheets for cash and cash equivalents approximate fair value due to their short maturity of 90 days or less.

Restricted cash. The amounts reported in the unaudited consolidated balance sheets for restricted cash approximate fair value.

Notes receivable, net.  The fair value of the Company’s notes receivable is estimated using Level 3 inputs and is based on estimated future cash flows considering contractual payments and estimates of prepayments and defaults, discounted at a market rate.

Note Payable to BBX Capital. The fair value of the note payable to BBX Capital was determined using Level 3 inputs by discounting the net cash outflows estimated to be used to repay the debt.

Lines-of-credit, notes payable, and receivable-backed notes payable. The amounts reported in the Company’s unaudited consolidated balance sheets for lines of credit, notes payable, and receivable-backed notes payable approximate fair value for indebtedness that provides for variable interest rates. The fair value of the Company’s fixed-rate, receivable-backed notes payable was determined using Level 3 inputs by discounting the net cash outflows estimated to be used to repay the debt. These obligations are to be satisfied using the proceeds from the consumer loans that secure the obligations.

Junior subordinated debentures. The fair value of the Company’s junior subordinated debentures is estimated using Level 3 inputs based on the contractual cash flows discounted at a market rate or based on market price quotes from the over-the-counter bond market.