Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of carrying amount and estimated fair value of financial instruments

	At September 30, 2014
	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value
	(in thousands)
Assets:
Cash and cash equivalents	$	103,631	$	103,631	$	—	$	—	$	103,631
Securities available for sale	282,202		—		282,202		—		282,202
Federal Reserve Bank, TIB and FHLB stock, at cost	18,643		18,643		—		—		18,643
Loans held for investment, net	1,537,237		—		—		1,521,466		1,521,466
Accrued interest receivable	6,762		6,762		—		—		6,762
Other real estate owned	752		—		—		752		752

Liabilities:
Deposit accounts	1,543,466		1,157,972		371,574		—		1,529,546
FHLB advances	150,000		149,999		—		—		149,999
Other borrowings	45,561		—		46,095		—		46,095
Subordinated debentures	70,310		—		34,142		—		34,142
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 September 30, 2013
	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value
	(in thousands)
Assets:
Cash and cash equivalents	$	61,419	$	61,419	$	—	$	—	$	61,419
Securities available for sale	282,846		—		282,846		—		282,846
Federal Reserve Bank and FHLB stock, at cost	10,827		10,827		—		—		10,827
Loans held for sale, net	3,176		—		3,176		—		3,176
Loans held for investment, net	1,130,975		—		—		1,225,352		1,225,352
Accrued interest receivable	5,629		5,629		—		—		5,629
Other real estate owned	1,186		—		—		1,186		1,186

Liabilities:
Deposit accounts	1,284,134		998,217		284,403		—		1,282,620
FHLB advances	35,000		35,000		—		—		35,000
Other borrowings	51,474		—		53,435		—		53,435
Subordinated debentures	10,310		—		4,766		—		4,766
Accrued interest payable	195		195		—		—		195

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	$	328,708	$	—	$	32,871	$	—	$	32,871

	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	$	335,592	$	—	$	33,559	$	—	$	33,559

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

	September 30, 2014
	Fair Value Measurement Using						Securities at
Investment securities available for sale:	Level 1		Level 2		Level 3		Fair Value
	(in thousands)

Municipal bonds	$	—	$	98,585	$	—	$	98,585
Mortgage-backed securities	—		183,617		—		183,617
Total securities available for sale	$	—	$	282,202	$	—	$	282,202

	September 30, 2013
	Fair Value Measurement Using						Securities at
Investment securities available for sale:	Level 1		Level 2		Level 3		Fair Value
	(in thousands)
U.S. Treasury	$	—	$	82	$	—	$	82
Municipal bonds	—		94,885		—		94,885
Mortgage-backed securities	—		187,879		—		187,879
Total securities available for sale	$	—	$	282,846	$	—	$	282,846

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

	Nine Months Ended
	September 30, 2013

Balance, beginning of period	$	952
Total gains or (losses) realized/unrealized:
Included in earnings (or changes in net assets)	194
Included in other comprehensive income	(140		)
Purchases, issuances, and settlements	(1,077		)
Transfer in and/or out of Level 3	71
Balance, end of period	$	—

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

	September 30, 2014
	Fair Value Measurement Using						Assets at
	Level 1		Level 2		Level 3		Fair Value
	(in thousands)
Assets
Collateral dependent impaired loans	$	—	$	—	$	1,241	$	1,241
Other real estate owned	—		—		752		752
Total assets	$	—	$	—	$	1,993	$	1,993

	September 30, 2013
	Fair Value Measurement Using						Assets at
	Level 1		Level 2		Level 3		Fair Value
	(in thousands)
Assets
Collateral dependent impaired loans	$	—	$	—	$	150	$	150
Other real estate owned	—		—		1,186		1,186
Total assets	$	—	$	—	$	1,336	$	1,336

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

	September 30, 2014
					Range
	Fair Value		Valuation Techniques	Unobservable Inputs	Rate	Maturity (years)	Unobservable Inputs
Collateral dependent impaired loans:
Business loans:
Commercial owner occupied	$	398	Collateral valuation	Management adjustment to reflect current conditions and selling costs	6.75%	8	0-10%
Real estate loans:
Commercial non-owner occupied	500		Collateral valuation	Management adjustment to reflect current conditions and selling costs	7.00%	13	0-15%
One-to-four family	343		Collateral valuation	Management adjustment to reflect current conditions and selling costs	4.50% - 15.00%	6 - 23	0-10%
Total collateral dependent impaired loans	$	1,241

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

	September 30, 2013
					Range
	Fair Value		Valuation Techniques	Unobservable Inputs	Rate	Maturity (years)	Unobservable Inputs
Collateral dependent impaired loans:
Business loans:
Commercial and industrial	$	68	Collateral valuation	Management adjustment to reflect current conditions and selling costs	6.00%	1	0-10%
SBA	14		Collateral valuation	Management adjustment to reflect current conditions and selling costs	6.00%	8	0-20%
Real estate loans:
One-to-four family	68		Collateral valuation	Management adjustment to reflect current conditions and selling costs	6.62% - 11.50%	11 - 23	0-10%
Total collateral dependent impaired loans	$	150

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.

+ References+ Details

- 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.

+ References+ Details