Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurement

v3.20.2
Fair Value Measurement
9 Months Ended
Sep. 30, 2020
Fair Value Measurement [Abstract]  
Fair Value Measurement 11. Fair Value of Financial Instruments

ASC 820 Fair Value Measurements and Disclosures (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 consolidated financial statements and their estimated fair values are as follows (in thousands):

As of September 30, 2020

As of December 31, 2019

Carrying
Amount

Estimated
Fair Value

Carrying
Amount

Estimated
Fair Value

Cash and cash equivalents

$

211,110

211,110

335,846

335,846

Restricted cash

35,672

35,672

49,896

49,896

Notes receivable, net

410,113

542,309

448,568

587,000

Note payable to BBX Capital, Inc.

75,000

75,000

Lines-of-credit, notes payable, and receivable-backed notes payable

541,389

543,500

568,975

589,300

Junior subordinated debentures

137,937

108,200

137,254

146,000

Cash and cash equivalents. The amounts reported in the Company’s condensed statements of financial condition for cash and cash equivalents approximate fair value.

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

Notes receivable, net.  The fair value of our 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, Inc. The fair value of the note payable to BBX Capital, Inc. approximates fair value as the note was issued on September 30, 2020.

Lines-of-credit, notes payable, and receivable-backed notes payable. The amounts reported in the Company’s condensed statements of financial condition 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 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 our 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.