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Fair Values of Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 2014
Fair Values of Financial Instruments [Abstract]  
Fair Value Measurements of Assets Measured at Fair Value on Recurring Basis

The following table presents the fair value measurements of assets measured at fair value on a recurring basis and level within the ASC 820 fair value hierarchy in which the fair value measurements fall:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using

 

Fair Value

 

Level 1

 

Level 2

 

Level 3

September 30, 2014

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

Government sponsored agencies

$
114,753 

 

$

 -

 

$
114,753 

 

$

 -

Collateralized mortgage obligations

 

 

 

 

 

 

 

 

 

 

 

Government sponsored agencies

 
98,606 

 

 

 -

 

 
98,606 

 

 

 -

Federal agencies

 
4 

 

 

 -

 

 
4 

 

 

 -

Municipal obligations

 
28,955 

 

 

 -

 

 
28,955 

 

 

 -

Corporate obligations

 
21,738 

 

 

 -

 

 
18,004 

 

 
3,734 

Available-for-sale securities

$
264,056 

 

$

 -

 

$
260,322 

 

$
3,734 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using

 

Fair Value

 

Level 1

 

Level 2

 

Level 3

December 31, 2013

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

Government sponsored agencies

$
103,517 

 

$

 -

 

$
103,517 

 

$

 -

Collateralized mortgage obligations

 

 

 

 

 

 

 

 

 

 

 

Government sponsored agencies

 
107,578 

 

 

 -

 

 
107,578 

 

 

 -

Federal agencies

 
4,774 

 

 

 -

 

 
4,774 

 

 

 -

Municipal obligations

 
27,338 

 

 

 -

 

 
27,338 

 

 

 -

Corporate obligations

 
21,141 

 

 

 -

 

 
17,805 

 

 
3,336 

Available-for-sale securities

$
264,348 

 

$

 -

 

$
261,012 

 

$
3,336 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Recurring Fair Value Measurements Recognized in Balance Sheet using Significant Unobservable (Level Three) Inputs

The following is a reconciliation of the beginning and ending balances for the three months ended September 30, 2014 and 2013 of recurring fair value measurements recognized in the accompanying balance sheets using significant unobservable (Level 3) inputs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

 

2013

Beginning balance

$
3,738 

 

$
3,000 

Total realized and unrealized gains (losses)

 

 

 

 

 

Included in net income

 

 -

 

 

 -

Included in other comprehensive income (loss)

 
(4)

 

 
1 

Purchases, sales, issuances and settlements

 

 -

 

 
(30)

Ending balance

$
3,734 

 

$
2,971 

Total gains or losses for the period included in net income attributable to the change in unrealized gains or losses related to assets still held at the reporting date

$
0 

 

$
0 

 

 

The following is a reconciliation of the beginning and ending balances for the nine months ended September 30, 2014 and 2013 of recurring fair value measurements recognized in the accompanying balance sheets using significant unobservable (Level 3) inputs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

 

2013

Beginning balance

$
3,336 

 

$
2,475 

Total realized and unrealized gains (losses)

 

 

 

 

 

Included in net income

 
56 

 

 

 -

Included in other comprehensive income (loss)

 
916 

 

 
526 

Purchases, issuances and settlements

 
(574)

 

 
(30)

Ending balance

$
3,734 

 

$
2,971 

Total gains or losses for the period included in net income attributable to the change in unrealized gains or losses related to assets still held at the reporting date

$
0 

 

$
0 

 

Fair Value Measurement of Assets Measured at Fair Value on Nonrecurring Basis

 

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the ASC 820 fair value hierarchy in which the fair value measurements fall:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using

 

Fair Value

 

Level 1

 

Level 2

 

Level 3

September 30, 2014

 

 

 

 

 

 

 

Other real estate owned

$
251 

 

$

 -

 

$

 -

 

$
251 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using

 

Fair Value

 

Level 1

 

Level 2

 

Level 3

December 31, 2013

 

 

 

 

 

 

 

Impaired loans

$
925 

 

$

 -

 

$

 -

 

$
925 

Other real estate owned

 
1,677 

 

 

 -

 

 

 -

 

 
1,677 

Mortgage-servicing rights

 
2,106 

 

 

 -

 

 

 -

 

 
2,106 

 

Quantitative Information about Unobservable Inputs used in Recurring and Nonrecurring Level Three Fair Value Measurements

The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2014

 

Fair Value

 

Valuation Technique

 

Unobservable Inputs

 

Range 

 

Trust Preferred Securities

 

$
3,734 

 

Discounted cash flow

 

Discount rate

 

8.0-14.0

%

 

 

 

 

 

 

 

Constant prepayment rate

 
2.0 

%

 

 

 

 

 

 

 

Cumulative projected prepayments

 
40.0 

%

 

 

 

 

 

 

 

Probability of default

 

1.8-2.8

%

 

 

 

 

 

 

 

Projected cures given deferral

 

0-15.0

%

 

 

 

 

 

 

 

Loss severity 

 

35.4-70.4

%

Other real estate owned 

 

$
251 

 

Third party valuations

 

Discount to reflect realizable value less estimated selling costs 

 

10.0-36.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2013

 

Fair Value

 

Valuation Technique

 

Unobservable Inputs

 

Range 

 

Trust Preferred Securities

 

$
3,336 

 

Discounted cash flow

 

Discount rate

 

10.0-17.0

%

 

 

 

 

 

 

 

Constant prepayment rate

 
2.0 

%

 

 

 

 

 

 

 

Cumulative projected prepayments

 
40.0 

%

 

 

 

 

 

 

 

Probability of default

 

1.5-2.7

%

 

 

 

 

 

 

 

Projected cures given deferral

 

0-15.0

%

 

 

 

 

 

 

 

Loss severity 

 

46.9-73.7

%

Impaired loans (collateral dependent)

 

$
925 

 

Third party valuations

 

Discount to reflect realizable value 

 

7.3-78.3

%

Other real estate owned 

 

$
1,677 

 

Third party valuations

 

Discount to reflect realizable value less estimated selling costs 

 

0-25.0

%

Mortgage-servicing rights

 

$
2,106 

 

Third party valuations

 

Prepayment speeds

 

105-700

%

 

 

 

 

 

 

 

Discount rates

 
10.0 

%

 

 

 

 

 

 

 

Servicing fee

 
0.25 

%

 

Estimated Fair Values of Financial Instruments

The estimated fair values of the Company’s financial instruments not carried at fair value in the consolidated balance sheets as of the dates noted below are as follows: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using

September 30, 2014

 

 

Carrying Amount

 

 

Fair Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$
20,499 

 

$
20,499 

 

$
20,499 

 

$

 -

 

$

 -

Loans held for sale

 

 
6,440 

 

 
6,523 

 

 

 -

 

 
6,523 

 

 

 -

Loans, net

 

 
995,468 

 

 
993,302 

 

 

 -

 

 

 -

 

 
993,302 

FHLB stock

 

 
14,391 

 

 
14,391 

 

 

 -

 

 
14,391 

 

 

 -

Interest receivable

 

 
3,665 

 

 
3,665 

 

 

 -

 

 
3,665 

 

 

 -

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 
1,098,849 

 

 
1,061,159 

 

 
636,955 

 

 

 -

 

 
424,204 

FHLB advances

 

 
168,523 

 

 
167,425 

 

 

 -

 

 
167,425 

 

 

 -

Other borrowings

 

 
10,353 

 

 
10,353 

 

 

 -

 

 
10,353 

 

 

 -

Interest payable

 

 
278 

 

 
278 

 

 

 -

 

 
278 

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using

December 31, 2013

 

 

Carrying Amount

 

 

Fair Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$
25,285 

 

$
25,285 

 

$
25,285 

 

$

 -

 

$

 -

Loans held for sale

 

 
1,888 

 

 
1,905 

 

 

 -

 

 
1,905 

 

 

 -

Loans, net

 

 
965,966 

 

 
935,414 

 

 

 -

 

 

 -

 

 
935,414 

FHLB stock

 

 
14,391 

 

 
14,391 

 

 

 -

 

 
14,391 

 

 

 -

Interest receivable

 

 
3,775 

 

 
3,775 

 

 

 -

 

 
3,775 

 

 

 -

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 
1,113,084 

 

 
1,068,422 

 

 
593,457 

 

 

 -

 

 
474,965 

FHLB advances

 

 
142,928 

 

 
141,526 

 

 

 -

 

 
141,526 

 

 

 -

Other borrowings

 

 
10,890 

 

 
10,890 

 

 

 -

 

 
10,890 

 

 

 -

Interest payable

 

 
157 

 

 
157 

 

 

 -

 

 
157 

 

 

 -