Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2014

Schedule of carrying amount and estimated fair value of financial instruments

	At June 30, 2014
	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value
	(in thousands)
Assets:
Cash and cash equivalents	$	120,292	$	120,292	$	—	$	—	$	120,292
Securities available for sale	235,116		—		235,116		—		235,116
Federal Reserve Bank, TIB and FHLB stock, at cost	18,494		18,494		—		—		18,494
Loans held for investment, net	1,457,035		—		—		1,461,796		1,461,796
Accrued interest receivable	6,645		6,645		—		—		6,645
Other real estate owned	752		—		—		752		752

Liabilities:
Deposit accounts	1,445,581		1,102,419		371,132		—		1,473,551
FHLB advances	210,000		210,000		—		—		210,000
Other borrowings	45,287		—		47,538		—		47,538
Subordinated debentures	10,310		—		4,592		—		4,592
Accrued interest payable	177		177		—		—		177


	At December 31, 2013
	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value
	(in thousands)
Assets:
Cash and cash equivalents	$	126,813	$	126,813	$	—	$	—	$	126,813
Securities available for sale	256,089		—		256,089		—		256,089
Federal Reserve Bank and FHLB stock, at cost	15,450		15,450		—		—		15,450
Loans held for sale, net	3,147		—		3,147		—		3,147
Loans held for investment, net	1,231,923		—		—		1,230,316		1,230,316
Accrued interest receivable	6,254		6,254		—		—		6,254
Other real estate owned	1,186		—		—		1,186		1,186

Liabilities:
Deposit accounts	1,306,286		991,630		301,007		—		1,292,637
FHLB advances	156,000		156,000		—		—		156,000
Other borrowings	48,091		—		49,058		—		49,058
Subordinated debentures	10,310		—		4,696		—		4,696
Accrued interest payable	166		166		—		—		166

	At June 30, 2013
	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value
	(in thousands)
Assets:
Cash and cash equivalents	$	103,972	$	103,972	$	—	$	—	$	103,972
Securities available for sale	313,047		—		311,990		1,057		313,047
Federal Reserve Bank and FHLB stock, at cost	11,917		11,917		—		—		11,917
Loans held for sale, net	3,617		—		3,617		—		3,617
Loans held for investment, net	1,047,436		—		—		1,124,670		1,124,670
Accrued interest receivable	5,766		5,766		—		—		5,766
Other real estate owned	1,186		—		—		1,186		1,186

Liabilities:
Deposit accounts	1,314,189		978,117		336,238		—		1,314,355
Other borrowings	48,082		—		50,074		—		50,074
Subordinated debentures	10,310		—		4,818		—		4,818
Accrued interest payable	213		213		—		—		213

Schedule of Off-balance sheet commitments and standby letters of credit

		Notional Amount			Level 1			Level 2			Level 3			Cost to Cede or Assume
Off-balance sheet commitments and standby letters of credit		$	293,228		$	—		$	29,323		$	—		$	29,323

		Notional Amount			Level 1			Level 2			Level 3			Cost to Cede or Assume
Off-balance sheet commitments and standby letters of credit		$	337,181		$	—		$	33,718		$	—		$	33,718

		Notional Amount			Level 1			Level 2			Level 3			Cost to Cede or Assume
Off-balance sheet commitments and standby letters of credit		$	236,425		$	—		$	23,643		$	—		$	23,643

Schedule of Company's financial instruments measured at fair value on a recurring basis

	June 30, 2014
	Fair Value Measurement Using
	Level 1		Level 2		Level 3		Securities at Fair Value
	(in thousands)
Investment securities available for sale:
Municipal bonds	$	—	$	85,433	$	—	$	85,433
Mortgage-backed securities	—		149,683		—		149,683
Total securities available for sale	$	—	$	235,116	$	—	$	235,116

	June 30, 2013
	Fair Value Measurement Using
	Level 1		Level 2		Level 3		Securities at Fair Value
	(in thousands)
Investment securities available for sale:
U.S. Treasury	$	—	$	83	$	—	$	83
Corporate	—		9,169		—		9,169
Municipal bonds	—		94,747		—		94,747
Mortgage-backed securities	—		207,991		1,057		209,048
Total securities available for sale	$	—	$	311,990	$	1,057	$	313,047

Summary of the changes in balance sheet carrying values associated with Level 3 financial instruments measured at fair value on a recurring basis

	Six Months Ended
	June 30, 2013

Balance, beginning of period	$	952
Total gains or (losses) realized/unrealized:
Included in earnings (or changes in net assets)	(35		)
Included in other comprehensive income	186
Purchases, issuances, and settlements	(117		)
Transfer in and/or out of Level 3	71
Balance, end of period	$	1,057

Schedule of Company's assets measured at fair value on a non-recurring basis

	June 30, 2014
	Fair Value Measurement Using
	Level 1		Level 2		Level 3		Assets at Fair Value
	(in thousands)
Assets
Collateral dependent impaired loans	$	—	$	—	$	1,003	$	1,003
Other real estate owned	—		—		752		752
Total assets	$	—	$	—	$	1,755	$	1,755

	June 30, 2013
	Fair Value Measurement Using
	Level 1		Level 2		Level 3		Assets at Fair Value
	(in thousands)
Assets
Collateral dependent impaired loans	$	—	$	—	$	1,566	$	1,566
Other real estate owned	—		—		1,186		1,186
Total assets	$	—	$	—	$	2,752	$	2,752

Schedule of quantitative information about level 3 of fair value measurements for financial instruments measured at fair value on a non-recurring basis

	June 30, 2014
							Range
	Fair Value			Valuation Techniques	Unobservable Inputs		Rate			Maturity (years)	Unobservable Inputs
Collateral dependent impaired loans:
Business loans:
Commercial and industrial	$	24		Collateral valuation	Management adjustment to reflect current conditions and selling costs		6.00		%	3	0-10%
Commercial owner occupied	417			Collateral valuation	Management adjustment to reflect current conditions and selling costs		11.75		%	8	0-10%
Real estate loans:
Commercial non-owner occupied	514			Collateral valuation	Management adjustment to reflect current conditions and selling costs		7.00		%	13	0-15%
One-to-four family	48			Collateral valuation	Management adjustment to reflect current conditions and selling costs		2.26% - 15.00%			2 - 22	0-10%
Total collateral dependent impaired loans	$	1,003

Other real estate owned
Land	$	752		Collateral valuation	Management adjustment to reflect current conditions and selling costs		—			—	0-10%
Total other real estate owned	$	752

	June 30, 2013
						Range
	Fair Value		Valuation Techniques		Unobservable Inputs	Rate				Maturity (years)	Unobservable Inputs
Collateral dependent impaired loans:
Business loans:
Commercial and industrial	$	308	Collateral valuation		Management adjustment to reflect current conditions and selling costs	6.00% - 7.25%				1	0-10%
Real estate loans:
Multi-family	1,035					7.00		%		25	0-10%
One-to-four family	223		Collateral valuation		Management adjustment to reflect current conditions and selling costs	7.25-11.50%				1-12	0-10%
Total collateral dependent impaired loans	$	1,566

Other real estate owned
Land	$	1,186	Collateral valuation		Management adjustment to reflect current conditions and selling costs	—				—	0-10%
Total other real estate owned	$	1,186

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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