FAIR VALUE MEASUREMENT (Tables)

3 Months Ended

Mar. 31, 2017

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, 2017 Using:
			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	March 31,		Assets		Inputs		Inputs
	2017		(Level 1)		(Level 2)		(Level 3)
	(Dollars in thousands)
Assets:
Available for sale securities
U.S. Treasury and government sponsored entities' securities	$	181,653	$	—	$	181,653	$	—
States of the U.S. and political subdivisions		57,864		—		57,864
Mortgage-backed GSE securities: residential		96,317		—		96,317		—
Loans held for sale, at fair value		75,501		—		8,062		67,439
Purchased certificate of deposit option		824		—		824		—
Liabilities
Written certificate of deposit option		824		—		824		—

			Fair Value Measurements at December 31, 2016 Using:
			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	December 31,		Assets		Inputs		Inputs
	2016		(Level 1)		(Level 2)		(Level 3)
	(Dollars in thousands)
Assets:
Available for sale securities
U.S. Treasury and government sponsored entities' securities	$	186,033	$	—	$	186,033	$	—
States of the U.S. and political subdivisions		57,757		—		57,757		—
Mortgage-backed GSE securities: residential		99,494		—		99,494		—
Loans held for sale, at fair value		62,593		—		8,832		53,761
Purchased certificate of deposit option		882		—		882		—
Liabilities
Written certificate of deposit option		882		—		882		—

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, 2017 and 2016.  

	Loans Held for Sale, At Fair Value
	For the Three Months Ended March 31,
	2017			2016
	(Dollars in thousands)
Balance of recurring Level 3 assets at beginning of period	$	53,761		$	26,716
Total gains (losses) for the period
Included in change in fair value of loans held for sale		590			669
Included in other comprehensive income					—
Originations/Draws on construction perm loans		25,300			16,687
Amortization					—
Sales		(12,212	)		(17,312	)
Balance of recurring Level 3 assets at end of period	$	67,439		$	26,760

	Interest Rate Caps
	For the Three Months Ended March 31,
	March 31, 2016
	(Dollars in thousands)
Balance of recurring Level 3 assets at beginning of period	$	3
Total gains (losses) for the period
Included in other income		127
Included in other comprehensive income		—
Purchases		—
Amortization		(130	)
Sales
Balance of recurring Level 3 assets at end of period	$	—

Assets and Liabilities Measured at Fair Value 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, 2017 Using:
			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	March 31,		Assets		Inputs		Inputs
	2017		(Level 1)		(Level 2)		(Level 3)
	(Dollars in thousands)
Assets:
Impaired loans:
Commercial loans
Multifamily	$	424	$	—	$	—	$	424
Residential loans
One-to four-family residential		601		—		—		601
Consumer loans
Home Equity		16		—		—		16
Auto		11		—		—		11
Marine		169		—		—		169
Recreational vehicle		111		—		—		111
Mortgage servicing rights		56		—		56		—
Other real estate owned, net
Commercial loans
Construction loans		471		—		—		471
Residential loans
One-to four-family residential		132		—		—		132

			Fair Value Measurements at December 31, 2016 Using:
			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	December 31,		Assets		Inputs		Inputs
	2016		(Level 1)		(Level 2)		(Level 3)
	(Dollars in thousands)
Assets:
Impaired loans:
Commercial loans
Nonresidential	$	2,257	$	—	$	—	$	2,257
Secured		284		—		—		284
Residential loans
One-to four-family residential		919		—		—		919
Consumer loans
Home Equity		228		—		—		228
Auto		177		—		—		177
Recreational vehicle		89		—		—		89
Other real estate owned, net
Commercial loans
Construction loans		748		—		—		748
Residential loans
One-to four-family residential		281		—		—		281

Fair Value Option for Newly Originated Residential Mortgage and Permanent Construction Loans Held for Sale

The Company has elected the fair value option for newly originated residential mortgage and permanent construction loans held for sale.  These loans are intended for sale and the Company believes that fair value is the best indicator of the resolution of these loans.  Interest income is recorded based on the contractual terms of the loan and in accordance with the Company’s policy on loans held for investment.  None of these loans are 90 or more days past due nor on nonaccrual status as of March 31, 2017 and December 31, 2016.  

	March 31, 2017		December 31, 2016
	(Dollars in thousands)
Aggregate fair value	$	75,501	$	62,593
Contractual balance		75,000		62,843
Gain (loss)		501		(250	)

Amount of Gains and Losses from Changes in Fair Value Included in Earnings

The total amount of gains and losses from changes in fair value included in earnings for the three months ended March 31, 2017 and 2016 for loans held for sale, at fair value were:

	For the Three Months Ended
	March 31, 2017		March 31, 2016
	(Dollars in thousands)
Interest  income	$	—	$	—
Interest expense		—		—
Change in fair value		751		803
Total change in fair value	$	751	$	803

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, 2017 and December 31, 2016, were as follows:

				Fair Value Measurements at March 31, 2017 Using:
	March 31,
	2017
	Carrying Value			(Level 1)			(Level 2)			(Level 3)
	(Dollars in thousands)
Assets:
Cash and cash equivalents	$	49,772		$	49,772		$	—		$	—
Available for sale securities		335,834			—			335,834			—
Held to maturity securities		94,523			—			90,095			3,202
Loans held for sale		197			—			201			—
Loans held for sale, at fair value		75,501			—			8,062			67,439
Loans, net		1,835,000			—			—			1,823,516
FHLB stock		19,324		n/a			n/a			n/a
Accrued interest receivable		7,032			—			2,021			5,011
Purchased certificate of deposit option		824			—			824			—
Liabilities:
Deposits:
Checking, savings and money market accounts		(1,272,797	)		(1,272,797	)		—			—
Certificates of deposit		(632,408	)		—			(635,917	)		—
FHLB advances		(338,951	)		—			(338,952	)		—
Repurchase agreements and other		(6,839	)		—			(6,661	)		—
Advance payments by borrowers for taxes and insurance		(17,084	)		(17,084	)		—			—
Accrued interest payable		(304	)		—			(304	)		—
Written certificate of deposit option		(824	)		—			(824	)		—

				Fair Value Measurements at December 31, 2016 Using:
	December 31,
	2016
	Carrying Value			(Level 1)			(Level 2)			(Level 3)
	(Dollars in thousands)
Assets:
Cash and cash equivalents	$	45,887		$	45,887		$	—		$	—
Available for sale securities		343,284			—			343,284			—
Held to maturity securities		97,519			—			92,940			3,210
Loans held for sale at lower of cost or market		165			—			169			—
Loans held for sale, at fair value		62,593			—			8,832			53,761
Loans, net		1,503,577			—			—			1,494,534
FHLB stock		18,068		n/a			n/a			n/a
Accrued interest receivable		6,900			—			2,624			4,276
Purchased certificate of deposit option		882			—			882			—
Liabilities:
Deposits:
Checking, savings and money market accounts		(1,026,565	)		(1,026,565	)		—			—
Certificates of deposit		(488,426	)		—			(491,278	)		—
FHLB advances		(390,756	)		—			(390,750	)		—
Repurchase agreements and other		(512	)		—			(513	)		—
Advance payments by borrowers for taxes and insurance		(23,812	)		(23,812	)		—			—
Accrued interest payable		(145	)		—			(145	)		—
Written certificate of deposit option		(882	)		—			(882	)		—

Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member]

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

The following table presents quantitative information about recurring Level 3 fair value measurements at March 31, 2017:

			Valuation	Unobservable
	Fair Value		Technique(s)	Input(s)	Range
Loans held for sale, at fair value	$	67,439	Comparable sales	Time discount	0.00-1.80%

The following table presents quantitative information about recurring Level 3 fair value measurements at December 31, 2016:

			Valuation	Unobservable
	Fair Value		Technique(s)	Input(s)	Range
Loans held for sale, at fair value	$	53,761	Comparable sales	Time discount	0.00-1.80%

Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Nonrecurring [Member]

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

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, 2017:

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range     (Weighted Average)
Impaired loans:
Commercial loans
Multi Family	$	424	Sales comparison approach	Adjustment for differences between comparable sales	0.00%-35.00%  (15.00%)
Residential loans
One-to four-family residential		601	Sales comparison approach	Adjustment for differences between comparable sales	0.00%-10.77%  (4.27%)
Consumer loans
Home Equity		16	Sales comparison approach	Adjustment for differences between comparable sales	0.00%-17.85%  (8.93%)
Marine		169	Sales comparison approach	Adjustment for differences between comparable sales	0.00%-37.00%  (37.00%)
Other real estate owned, net
Commercial loans
Construction loans		471	Sales comparison approach	Adjustment for differences between comparable sales	0.00%-24.80%(26.94%)
Residential loans
One-to four-family residential		132	Sales comparison approach	Adjustment for differences between comparable sales	0.00%-21.00%  (3.85%)

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, 2016:

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range     (Weighted Average)
Impaired loans:
Commercial loans
Nonresidential	$	2,257	Sales comparison approach	Adjustment for differences between comparable sales	0.00-35.00%  (15.00%)
Secured		284	Sales comparison approach	Adjustment for differences between comparable sales	0.00%-64.00%  (16.00%)
Residential loans
One-to four-family residential		919	Sales comparison approach	Adjustment for differences between comparable sales	0.00%-10.77%  (4.27%)
Consumer loans
Home Equity		228	Sales comparison approach	Adjustment for differences between comparable sales	0.00%-17.85%  (8.93%)
Other real estate owned:
Commercial loans
Construction loans		748	Sales comparison approach	Adjustment for differences between comparable sales	0.00%-90.40%  (27.46%)
			Cost approach	Adjustment for differences in cost	0.00%-33.33%  (16.67%)
Residential loans
One-to four-family residential		281	Sales comparison approach	Adjustment for differences between comparable sales	0.00%-27.00%  (7.74%)