Fair Value Measurement (Tables)

3 Months Ended

Mar. 31, 2014

Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets and Liabilities Measured on a Recurring Basis: Assets and liabilities measured at fair value on a recurring basis are summarized below:

			Fair Value Measurements at March 31, 2014 Using:
	March 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	2014		(Level 1)		(Level 2)		(Level 3)
	(Dollars in thousands)
Assets:
Available for sale securities
US Treasury and government sponsored entities’ securities	$	230,716	$	—	$	230,716	$	—
Equity securities		458		458		—		—
Mortgage-backed GSE securities: residential		286,214		—		286,214		—
Mortgage servicing assets		103		—		103		—
Interest rate caps		419		—		—		419
Purchased certificate of deposit option		267		—		267		—
Liabilities
Written certificate of deposit option		267		—		267		—

			Fair Value Measurements at December 31, 2013 Using:
	December 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	2013		(Level 1)		(Level 2)		(Level 3)
	(Dollars in thousands)
Assets:
Available for sale securities
US Treasury and government sponsored entities’ securities	$	222,293	$	—	$	222,293	$	—
Equity securities		445		445		—		—
Mortgage-backed GSE securities: residential		288,268		—		288,268		—
Interest rate caps		546		—		—		546
Purchased certificate of deposit option		155		—		155		—
Liabilities
Written certificate of deposit option		155		—		155		—

Reconciliation of All Assets Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2014 and 2013:

	Interest Rate Caps
	Three Months Ended March 31, 2014			Three Months Ended March 31, 2013
	(Dollars in thousands)
Balance of recurring Level 3 assets at beginning of period	$	546		$	436
Total gains (losses) for the period
Included in other income		2			138
Included in other comprehensive income		—			—
Purchases		—			—
Amortization		(129	)		(130	)
Sales		—			—
Balance of recurring Level 3 assets at end of period	$	419		$	444

Quantitative Information About Level 3 Fair Value Measurements for Financial Instruments Measured at Fair Value on Nonrecurring Basis

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis at March 31, 2014:

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Average)
			(Dollars in thousands)
Impaired loans:
Permanent real estate loans	$	1,171	Sales comparison approach	Adjustment for differences between comparable sales	0.00%-56.90% (11.78%)
			Income approach	Adjustment for differences in net operating income Capitalization rate	3.95%-14.62% (9.41%)
Construction loans		1,564	Sales comparison approach	Adjustment for differences between comparable sales	0.00%-25.00% (11.90%)
Other real estate owned, net:
Permanent real estate loans		1,435	Sales comparison approach	Adjustment for differences between comparable sales	6.00%-46.53% (17.76%)
Construction loans		1,988	Sales comparison approach	Adjustment for differences between comparable sales	6.54%-26.63% (9.24%)

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis at December 31, 2013:

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Average)
			(Dollars in thousands)
Impaired loans:
Permanent real estate loans	$	2,219	Sales comparison approach	Adjustment for differences between comparable sales	0.00%-56.90% (11.78%)
			Income approach	Adjustment for differences in net operating income Capitalization rate	3.95%-14.62% (9.41%)
Construction loans		1,587	Sales comparison approach	Adjustment for differences between comparable sales	0.00%-25.00% (11.90%)
Consumer loanss		339	Sales comparison approach	Adjustment for differences between comparable sales	0.00%-10.00% (5.00%)
Other real estate owned, net:
Permanent real estate loans		1,939	Sales comparison approach	Adjustment for differences between comparable sales	6.00%-46.53% (17.76%)
Construction loans		2,310	Sales comparison approach	Adjustment for differences between comparable sales	6.54%-26.63% (9.24%)

Assets and Liabilities Measured on Non-recurring Basis

Assets and Liabilities Measured on a Non-Recurring Basis: Assets and liabilities measured at fair value on a non-recurring basis are summarized below:

			Fair Value Measurements at March 31, 2014 Using:
	March 31, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Dollars in thousands)
Assets:
Impaired loans:
Permanent real estate loans	$	1,171	$	—	$	—	$	1,171
Construction loans		1,564		—		—		1,564
Other real estate owned, net:
Permanent real estate		1,435		—		—		1,435
Construction		1,988		—		—		1,988
			Fair Value Measurements at December 31, 2013 Using:
	December 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Dollars in thousands)
Assets:
Impaired loans:
Permanent real estate loans	$	2,219	$	—	$	—	$	2,219
Construction loans		1,587		—		—		1,587
Consumer loans		339		—		—		339
Other real estate owned, net:
Permanent real estate loans		1,939		—		—		1,939
Construction loans		2,310		—		—		2,310

Carrying Value and Estimated Fair Values of Financial Instruments

In accordance with U.S. GAAP, the carrying value and estimated fair values of financial instruments at March 31, 2014 and December 31, 2013, were as follows:

				Fair Value Measurements at March 31, 2014 Using:
	March 31, 2014
	Carrying Value			(Level 1)			(Level 2)			(Level 3)
	(Dollars in thousands)
Assets:
Cash and cash equivalents	$	62,235		$	62,235		$	—		$	—
Available for sale securities		517,388			458			516,930			—
Loans held for sale		4,230			—			4,258			—
Loans, net		1,060,901			—			—			1,068,745
FHLB stock		18,068			n/a			n/a			n/a
Accrued interest receivable		5,161			—			1,964			3,197
Interest rate caps		419			—			—			419
Purchased certificate of deposit option		267			—			267			—
Liabilities:
Deposits:
Checking, savings and money market accounts		(929,720	)		(929,720	)		—			—
Certificates of deposit		(468,347	)		—			(476,104	)		—
FHLB advances		(50,000	)		—			(54,903	)		—
Repurchase agreements and other		(90,572	)		—			(97,200	)		—
Advance payments by borrowers for taxes and insurance		(12,246	)		—			(12,246	)		—
Accrued interest payable		(585	)		—			(585	)		—
Written certificate of deposit option		(267	)		—			(267	)		—

				Fair Value Measurements at December 31, 2013 Using:
	December 31, 2013 Carrying Value			(Level 1)			(Level 2)			(Level 3)
	(Dollars in thousands)
Assets:
Cash and cash equivalents	$	77,331		$	77,331		$	—		$	—
Available for sale securities		511,006			445			510,561			—
Loans held for sale		4,838			—			4,866			—
Loans, net		1,029,192			—			—			1,031,491
FHLB stock		26,464			n/a			n/a			n/a
Accrued interest receivable		5,694			—			2,584			3,110
Interest rate caps		546			—			—			546
Purchased certificate of deposit option		155			—			155			—
Liabilities:
Deposits:
Checking, savings and money market accounts		(899,481	)		(899,481	)		—			—
Certificates of deposit		(492,271	)		—			(500,651	)		—
FHLB advances		(50,000	)		—			(55,327	)		—
Repurchase agreements and other		(90,578	)		—			(98,462	)		—
Advance payments by borrowers for taxes and insurance		(20,060	)		—			(20,060	)		—
Accrued interest payable		(550	)		—			(550	)		—
Written certificate of deposit option		(155	)		—			(155	)		—

Interest Rate Caps [Member]

Quantitative Information About Level 3 Fair Value Measurements for Financial Instruments Measured at Fair Value on Nonrecurring Basis

The following table presents quantitative information about recurring Level 3 fair value measurements at March 31, 2014:

	Fair Value		Valuation Technique(s)		Unobservable Input(s)		Range
	(Dollars in thousands)
Interest rate caps	$	419		Discounted cash flow		Discount rate		0.35%-1.5%

The following table presents quantitative information about recurring Level 3 fair value measurements at December 31, 2013:

	Fair Value		Valuation Technique(s)		Unobservable Input(s)		Range
	(Dollars in thousands)
Interest rate caps	$	546		Discounted cash flow		Discount rate		0.35%-1.5%