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FAIR VALUE (Tables)
6 Months Ended
Jun. 30, 2016
Fair Value Disclosures [Abstract]  
Summary of assets and liabilities measured at fair value on a recurring basis
Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):
 
 
Fair Value Measurement at June 30, 2016 Using
Financial Assets:
Fair Value
 
Quoted Prices
in Active Markets for Identical Assets
(Level 1)
 
Significant
Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
Obligations of U.S. Government and U.S. Government sponsored enterprises
$
70,331

 
$

 
$
70,331

 
$

Mortgage-backed securities, residential
186,717

 

 
186,717

 

Obligations of states and political subdivisions
41,395

 

 
41,395

 

Corporate bonds and notes
756

 

 
500

 
256

SBA loan pools
609

 

 
609

 

Corporate stocks
469

 
52

 
417

 

Total available for sale securities
$
300,277

 
$
52

 
$
299,969

 
$
256

 
 
 
 
 
 
 
 
Trading assets
$
767

 
$
767

 
$

 
$

Derivative assets
437

 

 
437

 

 
 
 
 
 
 
 
 
Financial Liabilities:
 
 
 
 
 
 
 
Derivative liabilities
$
557

 
$

 
$
437

 
$
120


 
 
Fair Value Measurement at December 31, 2015 Using
Financial Assets:
Fair Value
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
Obligations of U.S. Government and U.S. Government sponsored enterprises
$
100,166

 
$
14,784

 
$
85,382

 
$

Mortgage-backed securities, residential
198,366

 

 
198,366

 

Obligations of states and political subdivisions
44,426

 

 
44,426

 

Corporate bonds and notes
752

 

 
504

 
248

SBA loan pools
647

 

 
647

 

Corporate stocks
463

 
56

 
407

 

Total available for sale securities
$
344,820

 
$
14,840

 
$
329,732

 
$
248

 
 
 
 
 
 
 
 
Trading assets
$
701

 
$
701

 
$

 
$

Derivative assets
15

 

 
15

 

 
 
 
 
 
 
 
 
Financial Liabilities:
 
 
 
 
 
 
 
Derivative liabilities
$
63

 
$

 
$
15

 
$
48

Reconciliation of all assets measured at fair value
The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three month periods ended June 30, 2016 and June 30, 2015 (in thousands):

 
 
Assets (Liabilities)
 
 
Corporate Bonds and Notes
 
Derivative Liabilities
 
 
June 30, 2016
 
June 30, 2015
 
June 30, 2016
 
June 30, 2015
Balance of recurring Level 3 assets at April 1
 
$
252

 
$

 
$
(84
)
 
$
(33
)
Derivative instruments entered into
 

 

 
(23
)
 

Total gains or losses for the period:
 
 
 
 
 
 
 
 
Included in earnings - other non-interest income
 

 

 
(13
)
 
20

Included in other comprehensive income
 
4

 

 

 

Transfers into Level 3
 

 

 

 

Balance of recurring Level 3 assets at June 30
 
$
256

 
$

 
$
(120
)
 
$
(13
)


The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six month periods ended June 30, 2016 and June 30, 2015 (in thousands):

 
 
Assets (Liabilities)
 
 
Corporate Bonds and Notes
 
Derivative Liabilities
 
 
June 30, 2016
 
June 30, 2015
 
June 30, 2016
 
June 30, 2015
Balance of recurring Level 3 assets at January 1
 
$
248

 
$

 
$
(48
)
 
$
(18
)
Derivative instruments entered into
 

 

 
(25
)
 

Total gains or losses for the period:
 
 
 
 
 
 
 
 
Included in earnings - other non-interest income
 

 

 
(47
)
 
5

Included in other comprehensive income
 
8

 

 

 

Transfers into Level 3
 

 

 

 

Balance of recurring Level 3 assets at June 30
 
$
256

 
$

 
$
(120
)
 
$
(13
)
Reconciliation of liabilities measured at fair value
The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six month periods ended June 30, 2016 and June 30, 2015 (in thousands):

 
 
Assets (Liabilities)
 
 
Corporate Bonds and Notes
 
Derivative Liabilities
 
 
June 30, 2016
 
June 30, 2015
 
June 30, 2016
 
June 30, 2015
Balance of recurring Level 3 assets at January 1
 
$
248

 
$

 
$
(48
)
 
$
(18
)
Derivative instruments entered into
 

 

 
(25
)
 

Total gains or losses for the period:
 
 
 
 
 
 
 
 
Included in earnings - other non-interest income
 

 

 
(47
)
 
5

Included in other comprehensive income
 
8

 

 

 

Transfers into Level 3
 

 

 

 

Balance of recurring Level 3 assets at June 30
 
$
256

 
$

 
$
(120
)
 
$
(13
)
Summary of assets and liabilities measured at fair value on a non-recurring basis
Assets and liabilities measured at fair value on a non-recurring basis are summarized below (in thousands):
 
 
 
Fair Value Measurement at June 30, 2016 Using
Financial Assets:
Fair Value
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
Impaired Loans:
 
 
 
 
 
 
 
Commercial mortgages:
 
 
 
 
 
 
 
Commercial mortgages
$
614

 
$

 
$

 
$
614

Consumer loans:
 

 
 

 
 

 
 

Home equity lines and loans
239

 

 

 
239

Total impaired loans
$
853

 
$

 
$

 
$
853

Other real estate owned:
 

 
 

 
 

 
 

Commercial mortgages:
 

 
 

 
 

 
 

Commercial mortgages
$
51

 
$

 
$

 
$
51

Residential mortgages
325

 

 

 
325

Consumer loans:
 

 
 

 
 

 
 

Home equity lines and loans
17

 

 

 
17

Total other real estate owned, net
$
393

 
$

 
$

 
$
393


 
 
 
Fair Value Measurement at December 31, 2015 Using
Financial Assets:
Fair Value
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
Impaired Loans:
 
 
 
 
 
 
 
Commercial mortgages:
 
 
 
 
 
 
 
Commercial mortgages
$
2,629

 
$

 
$

 
$
2,629

Consumer loans:
 

 
 

 
 

 
 

Home equity lines and loans
287

 

 

 
287

Total impaired loans
$
2,916

 
$

 
$

 
$
2,916

Other real estate owned:
 

 
 

 
 

 
 

Commercial mortgages:
 

 
 

 
 

 
 

Commercial mortgages
$
1,491

 
$

 
$
1,491

 
$

Residential mortgages
39

 

 

 
39

Total other real estate owned, net
$
1,530

 
$

 
$
1,491

 
$
39

Nonrecurring fair value measurement, valuation techniques
The following tables presents information related to Level 3 non-recurring fair value measurement at June 30, 2016 and December 31, 2015 (in thousands):
Description
 
Fair Value at June 30, 2016
 
Valuation Technique
 
Unobservable Inputs
 
Range
[Weighted Average]
at
June 30, 2016
Impaired loans:
 
 
 
 
 
 
 
 
Commercial mortgages:
 
 
 
 
 
 
 
 
Commercial mortgages
 
$
614

 
Sales comparison
 
Discount to appraised value
 
10.00% - 21.83%
[16.83%]
Consumer loans:
 
 
 
 
 
 
 
 
Home equity lines and loans
 
239

 
Sales comparison
 
Discount to appraised value
 
20.80% - 20.80%
[20.80%]
 
 
$
853

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OREO:
 
 
 
 
 
 
 
 
Commercial mortgages:
 
 
 
 
 
 
 
 
Commercial mortgages
 
$
51

 
Sales comparison
 
Discount to appraised value
 
23.66% - 23.66%
[23.66%]
Residential mortgages
 
325

 
Sales comparison
 
Discount to appraised value
 
20.80% - 39.22%
[28.94%]
Consumer loans:
 
 
 
 
 
 
 
 
Home equity lines and loans
 
17

 
Sales comparison
 
Discount to appraised value
 
20.80% - 20.80%
[20.80%]
 
 
$
393

 
 
 
 
 
 

Description
 
Fair Value at December 31, 2015
 
Valuation Technique
 
Unobservable Inputs
 
Range
[Weighted Average]
at
December 31, 2015
Impaired loans:
 
 
 
 
 
 
 
 
Commercial mortgages:
 
 
 
 
 
 
 
 
Commercial mortgages
 
$
2,629

 
Sales comparison
 
Discount to appraised value
 
10.00% - 17.19%
[16.06%]
Consumer loans:
 
 
 
 
 
 
 
 
Home equity lines and loans
 
287

 
Sales comparison
 
Discount to appraised value
 
18.04% - 18.04%
[18.04%]
 
 
$
2,916

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OREO:
 
 
 
 
 
 
 
 
Residential mortgages
 
$
39

 
Sales comparison
 
Discount to appraised value
 
22.30% - 22.30%
[22.30%]
 
 
$
39

 
 
 
 
 
 
The following table presents information related to Level 3 recurring fair value measurements at June 30, 2016 and December 31, 2015 (in thousands):

Description
 
Fair Value at
June 30,
2016
 
Valuation Technique
 
Unobservable Inputs
 
Range
[Weighted Average]
at June 30, 2016
Corporate bonds and notes
 
$
256

 
Discounted cash flow
 
Credit spread
 
1.73% - 1.73%
[1.73%]
 
 
 
 
 
 
 
 
 
Derivative liabilities
 
$
120

 
Historical trend
 
Credit default rate
 
5.83% - 5.83%
[5.83%]

Description
 
Fair Value at
December 31,
2015
 
Valuation Technique
 
Unobservable Inputs
 
Range
[Weighted Average]
at December 31, 2015
Corporate bonds and notes
 
$
248

 
Discounted cash flow
 
Credit spread
 
1.73% - 1.73%
[1.73%]
 
 
 
 
 
 
 
 
 
Derivative liabilities
 
$
48

 
Historical trend
 
Credit default rate
 
5.83% - 5.83%
[5.83%]
Carrying value and estimated fair value of financial instruments
The carrying amounts and estimated fair values of other financial instruments, at June 30, 2016 and December 31, 2015, are as follows (in thousands):
 
June 30, 2016
Financial assets:
Carrying Amount
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
Estimated Fair Value
(1)
Cash and due from financial institutions
$
27,233

 
$
27,233

 
$

 
$

 
$
27,233

Interest-bearing deposits in other financial institutions
80,121

 
80,121

 

 

 
80,121

Trading assets
767

 
767

 

 

 
767

Securities available for sale
300,277

 
52

 
299,969

 
256

 
300,277

Securities held to maturity
3,518

 

 

 
3,793

 
3,793

FHLBNY and FRBNY stock
4,491

 

 

 

 
N/A

Loans, net
1,186,488

 

 

 
1,209,140

 
1,209,140

Loans held for sale
809

 

 
843

 

 
843

Accrued interest receivable
3,904

 

 
965

 
2,939

 
3,904

Derivative assets
437

 

 
437

 

 
437

 
 
 
 
 
 
 
 
 
 
Financial liabilities:
 

 
 

 
 

 
 

 
 

Deposits:
 

 
 

 
 

 
 

 
 

Demand, savings, and insured money market accounts
$
1,309,265

 
$
1,309,265

 
$

 
$

 
$
1,309,265

Time deposits
158,655

 

 
159,084

 

 
159,084

Securities sold under agreements to repurchase
28,778

 

 
29,459

 

 
29,459

FHLBNY term advances
19,148

 

 
19,564

 

 
19,564

Accrued interest payable
213

 
21

 
192

 

 
213

Derivative liabilities
557

 

 
437

 
120

 
557

(1) Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument.  These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision.  Changes in assumptions could significantly affect the estimates.
 
December 31, 2015
Financial assets:
Carrying Amount
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
Estimated Fair Value
(1)
Cash and due from financial institutions
$
24,886

 
$
24,886

 
$

 
$

 
$
24,886

Interest-bearing deposits in other financial institutions
1,299

 
1,299

 

 

 
1,299

Trading assets
701

 
701

 

 

 
701

Securities available for sale
344,820

 
14,840

 
329,732

 
248

 
344,820

Securities held to maturity
4,566

 

 

 
4,822

 
4,822

FHLBNY and FRBNY stock
4,797

 

 

 

 
N/A

Loans, net
1,154,373

 

 

 
1,178,081

 
1,178,081

Loans held for sale
1,076

 

 
1,076

 

 
1,076

Accrued interest receivable
4,015

 
39

 
1,141

 
2,835

 
4,015

Derivative assets
15

 

 
15

 

 
15

 
 
 
 
 
 
 
 
 
 
Financial liabilities:
 

 
 

 
 

 
 

 
 

Deposits:
 

 
 

 
 

 
 

 
 

Demand, savings, and insured money market accounts
$
1,234,216

 
$
1,234,216

 
$

 
$

 
$
1,234,216

Time deposits
166,079

 

 
166,551

 

 
166,551

Securities sold under agreements to repurchase
28,453

 

 
29,128

 

 
29,128

FHLBNY overnight advances
13,900

 

 
13,901

 

 
13,901

FHLBNY term advances
19,203

 

 
19,658

 

 
19,658

Accrued interest payable
209

 
17

 
192

 

 
209

Derivative liabilities
63

 

 
15

 
48

 
63

(1) Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument.  These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision.  Changes in assumptions could significantly affect the estimates.